Draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023

Matthew Pennycook Excerpts

Wednesday 25th October 2023 General Committees

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

It is a pleasure to serve with you in the Chair, Mr Robertson. I thank the Minister for that explanation of the instrument before us.

We welcome the regulations, which, as we heard, increase the fees payable for major and non-major planning applications for the first time since 2018, add an annual inflation indexation of those fees, and make changes to both fees payable for repeat applications and the planning guarantee period for non-major applications.

Local authorities play an instrumental role in efforts to meet housing need and demand, yet many are struggling to fulfil their responsibilities due to a lack of capacity, capability, skills and resourcing in their planning departments. As a report published last year by the House of Lords Built Environment Committee put it, we face an “evolving crisis”, with local planning authorities under-resourced and consequently unable to undertake a variety of skilled planning functions effectively. The resources dedicated to planning within local authorities, which were never particularly high by international standards even before 2010, have fallen dramatically over the past 13 years, primarily as a result of local authority belt tightening in response to central Government funding cuts.

The “Planning for new homes” report published by the National Audit Office in February 2019 found that between 2010-11 and 2017-18 there was a 37.9% real-terms reduction in net current expenditure on planning functions by local councils. Even when the income that authorities generated from fees, sales and charges or transfers from other public authorities was considered, the report concluded that total spending on planning had fallen by 14.6% in real terms between the dates in question—from £1.125 billion to £961 billion. Given that context, I would be grateful if the Minister could tell the Committee whether the Government are considering any other means, beyond the fee increases provided for by this instrument, to provide local authority planning services with additional funding.

Although the fee increases provided for by the regulations will not compensate fully for the sharp real-terms reductions in funding that authorities have had to cope with over recent years, they do have the potential to help enable local planning authorities to better deliver the service that applicants and the public rightly expect. I use the word “potential” deliberately, because there is a justifiable concern that increased revenue from planning application fees will not necessarily be allocated to planning departments or lead to improved performance. Although there is both a clear expectation and a requirement in primary legislation for planning fees to be used by local authorities to perform the function of determining planning applications, in practice many councils use planning fee income, despite the lack of surplus, to cross-subsidise other services. If they did not, the Government would never have felt the need even to consult on ringfencing in their “Increasing planning fees and performance” technical consultation earlier this year.

As such, what further assurances can the Minister provide today that the Government’s expectations—and ours—and the statutory requirements in respect of revenue generated from planning fees will be adhered to? In addition, can she confirm that the Department plans to begin actively monitoring how planning fees are generated and used, and evaluating whether they are having a beneficial impact on performance?

I would also be grateful if the Minister could provide further clarity on what other steps the Department is taking to ensure that local planning authorities are improving their performance. When the other place considered these regulations last week, Baroness Swinburne, speaking for the Government, referred to “a new framework” that will measure local authority performance across

“a wider set of criteria to ensure that local authorities are delivering on all fronts, for all users of the system.”—[Official Report, House of Lords, 17 October 2023; Vol. 833, c. 141.]

Can the Minister tell us when that new framework is expected to be put in place?

Lastly, increasing fees by the proposed amount or in isolation, even if supplemented by other funding sources, will almost certainly not be enough to address the capacity and capability issues faced by local planning authorities. As the Minister knows, difficulties in recruiting and retaining principal planners, and a shortfall of specialist skills, is another significant challenge. Although the Government have seemingly abandoned the proposals in the 2020 “Planning for the future” White Paper for a comprehensive resources and skills strategy, the policy paper that accompanied the Levelling-up and Regeneration Bill committed Ministers to bringing forward a planning skills strategy. Can the Minister tell us whether the Department still intends to publish one, and if so, when?

--- Later in debate ---

[Rachel Maclean]

I thank my hon. Friend for his point, and the feedback is noted, but what I was talking about regarding planning performance is a policy decision that we are in the process of making. I am sure that further legislation will come forward in due course.

[Matthew Pennycook]

Will the Minister give way?

[Rachel Maclean]

I will, briefly, but then I want to make progress.

[Matthew Pennycook]

I appreciate the Minister’s giving way. She has provided some useful additional clarity on performance and funding. May I press her on greater transparency, and the Department’s monitoring of how the increased planning fees are used? Does it monitor how fees are generated and used by planning authorities across the country? If not, will it start to, and will it actively track whether the increased fees are contributing to the improved performance that we all want?

[Rachel Maclean]

Yes, I can assure the hon. Gentleman that that is one of the core activities that I carry out in my role, with the assistance of my civil servants and various teams that feed into this. I have already spoken about our powers to intervene where local authorities are not performing. On top of that, we expect that the additional funding that we are giving through the separate funding pots that I referred to, and this new broader funding, will be spent, and we can track performance. Notwithstanding the challenge put to me by my hon. Friend the Member for Central Suffolk and North Ipswich, we intend to bring forward details of how we will track performance. I know that every Member in this House is very interested in how their local authority performs on planning applications, because we are often the first to receive complaints when they not performing well.

My hon. Friend has indicated his concerns about the disproportionate impact of the fees. I obviously take that on board, and we have considered that carefully; that is why the fee for householders will rise only from £206 to £258. We consider that to be proportionate, given the need. Planning services do not make a profit from fees; the services are still subsidised through wider funding. It is not a cost-recovery fee. Applicants still benefit from what they pay, even with the increase. He raised the point about people making modifications for disabled residents of a property. They will still be exempt. The current set of exemptions will still apply, so people in that situation will rightly not be charged; he is right to say that.

[Rachel Maclean]

The changes that we are making have removed the “free go”; we debated that in the House in proceedings on the Levelling-up and Regeneration Bill. We made that change because the free go placed a disproportionate burden on planning departments, and added to their overall workload.

It is really important to look at this small increase in the round. We are talking about increasing capacity and providing a better service across the board. I have recent experience of making a planning application to my local authority, so I know how much work is involved. When people pay a fee, they want to get a good service. If we resource the system as a whole to a greater extent—I hope Members will be reassured, both by this instrument and by the other grants that we have mentioned, that we are doing that—small householders building an extension will see a better service overall, and that should minimise the need for repeat applications. The idea is to capture everything up front.

It is also important to note that we are embarking on an ambitious programme to digitise the whole system. Members will know how paper heavy the system is now. That is where mistakes creep in and things need to be repeated. By improving the whole system overall, we will remove the need for repeated applications and, I hope, provide a fairer service.

My hon. Friend the Member for Central Suffolk and North Ipswich asked me about flooding, so I will touch on that before I wind up. We have all seen the recent events, which I know have affected his area greatly. All our sympathies are with the people affected, and I hope that they can be back in their homes soon. He will know that the national planning policy framework—the planning system more broadly—already takes account of flooding. Work has been done on this matter by my colleagues in the Department for Environment, Food and Rural Affairs, particularly in setting up the Flood Re scheme and making sure that planning applications and local plans are made with flooding in mind.

We will be going further. My hon. Friend will know of the work that we have done through the national development management policies; we debated again yesterday on the Floor of the House when considering the Lords message how the planning system responds to climate change, of which flooding is one manifestation. We have been clear that we intend to strengthen our approach, to give planners and the country the reassurance that the planning system can respond adequately to climate change and help us achieve our net zero objectives.

[Matthew Pennycook]

The Minister has missed out one of my questions. Will we see the planning skills strategy that was promised in the policy paper that accompanied the Levelling-up and Regeneration Bill?

[Rachel Maclean]

I understand the hon. Gentleman’s eagerness to see that, and we will bring it forward in due course. If he will allow me, I will write to him with more details on the timeline.

I thank Members for their interest in this matter. I must reiterate that it is critical that we have well-resourced, effective and efficient local planning services so that development is not delayed. We need to build the right houses for our country, in the right places, and planning is critical to that. The regulations will contribute to that by delivering much-needed additional resources. As I hope I have said multiple times, we are clear that local planning authorities must invest the additional income from the increase in planning application fees in their planning service. Improvements will enable speedier delivery and the economic growth that our country needs. I hope the Committee will welcome these important and necessary regulations.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023.

Levelling-up and Regeneration Bill

Matthew Pennycook Excerpts

Consideration of Lords message
Tuesday 24th October 2023 Commons Chamber

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

It is a pleasure to follow that characteristically sensible speech from the hon. Member for Waveney (Peter Aldous). I put on record our thanks for their lordships’ continued engagement on the Bill and all the work they have done on it over many months. After considering an extensive number of Lords amendments to the Bill last week, just two issues remain for us to debate again. The first is remote local government meetings.

Labour remains firmly of the view that while in-person council meetings should continue to predominate, there are circumstances in which virtual or hybrid local government meetings might be either useful or necessary. We also maintain that permitting their use in certain instances would have a number of additional benefits, not least in helping to reduce barriers to public engagement in the planning process, which is a goal shared across the House. As has been previously noted, an extremely broad range of organisations support change in this area, including the Local Government Association, Lawyers in Local Government, the Association of Democratic Services Officers, the Society of Local Council Clerks and the National Association of Local Councils. Indeed, as the hon. Member for Buckingham (Greg Smith) pointed out during last week’s debate, evidence from NALC suggests that support for it among local councils is overwhelming, with 90% of town and parish councils wanting the ability to hold virtual meetings in some form to widen participation.

As we just heard, it is not just those organisations and authorities and those on the Labour Benches who support greater local discretion in this area. In last weeks’ debate, the right hon. Members for Chipping Barnet (Theresa Villiers) and for North Somerset (Dr Fox) and the hon. Members for Buckingham, for Waveney and for Worthing West (Sir Peter Bottomley) all expressed support for a degree of flexibility so that councils could enable remote participation in meetings in certain circumstances. No one is arguing that we should require every local government meeting to be virtual or hybrid. Doing so would clearly undermine the principle that members of the public should have suitable opportunities to interact in-person with their local representatives. Instead, the case is being made for a degree of local discretion so that such meetings would be permitted in certain circumstances.

Lords amendment 22B addresses the Government’s understandable concern that permitting councils to hold wholly virtual meetings might have unintended and adverse consequences for local democracy. The amendment would allow Ministers to determine by regulations the range of circumstances in which hybrid meetings could take place. For example, they might choose to enable parish councillors in more remote parts of a given authority area to attend meetings virtually while ensuring that most are still required to be present in person. To take another example, they might choose to allow members of the public—say, people with mobility issues or those with children—to participate actively in planning committees, while councillors would still be required to attend in person. We believe that this is a reasonable and proportionate amendment, and we will support it.

The second issue concerns the planning system’s role in mitigating and adapting to global heating. The Government’s amendment in lieu is noticeably weaker than Lords amendment 45 as it applies only to national development management policies rather than all national policy, planning policy or advice relating to the development or use of land. It also excludes precise statutory definitions of what constitutes mitigation and adaptation. Nevertheless, we welcome that the Government have made a concession on this issue by tabling their amendment.

However, while we welcome the fact that the Government’s amendment in lieu would ensure consideration of climate mitigation and adaptation in the preparation or modification of NDMPs, it would not achieve what Lords amendment 45 would: namely, to establish genuine coherence between the planning system and our country’s climate commitments, not least by requiring local planning authorities to have regard to climate when making decisions on individual planning applications. The planning system in its current form is manifestly failing to play its full part in addressing the climate emergency. Indeed, one might go so far as to argue that it is actively hindering our ability to mitigate and adapt to climate change in myriad different ways.

The Bill is a missed opportunity to fully align the planning system with our climate mitigation and adaptation goals and ensure that new development produces resilient and climate-proofed places. The provisions in the Bill that require local plans to be designed in such a way as to contribute to the mitigation of, and adaptation to, climate change are welcome, but they are transposed from existing legislation introduced 15 years ago, and, alone, they are not sufficient. The promised related update to the national planning policy framework to ensure that it contributes to climate change mitigation and adaptation as fully as possible is vital, but it will not take place until well after the Bill has received Royal Assent if it materialises at all during what remains of this Parliament.

As we have argued consistently throughout the passage of the Bill, there is a pressing need for clear and unambiguous national policy guidance on climate change, a purposeful statutory framework to align every aspect of the planning system with net zero, and an overarching duty on the Secretary of State, local planning authorities and those involved in neighbourhood plan making to achieve climate change mitigation and adaptation when preparing plans and policies or exercising their planning decision-making functions.

The Climate Change Committee recommended in its 2022 progress report that

“Net zero and climate resilience should be embedded within the planning reforms”

contained in the Levelling Up and Regeneration Bill.

As things stand, they have not been. In this week—of all weeks—when we have seen once again the impact on communities across the country of the more frequent extreme weather events that climate change is driving, we should look to improve how the planning system responds to the climate emergency. The Government amendment in lieu is welcome, but it does not go far enough. For that reason, we will support Lords amendment 45.

[Theresa Villiers (Chipping Barnet) (Con)]

I would like to start by thanking the Minister for her involvement in the very long saga that is the Levelling Up and Regeneration Bill, which, finally may be drawing to a close. It is good to see the areas of difference between the two Houses reduced.

I appreciate that Lords amendment 22 on councils meeting virtually is a significant issue, as it could set a precedent for other parts of the public sector. I understand the Government’s concerns and why they have resisted it up to now, but I hope there is room for further compromise and at least some flexibility to allow councils to deploy hybrid meetings. If the amendment still goes too far, I hope that Ministers can come up with something, perhaps specifically in the planning context or in at least some circumstances, to make the life of our local councillors a little easier. We must remember that they do a difficult job; they work hard and many are trying to hold down day jobs at the same time. A bit more flexibility for virtual meetings could help to enhance democratic participation.

An amendment that we did not get back from their lordships was on NDMPs. I have a certain amount of regret about that, because I continue to believe that the replacement of local development management policies with a single centralised diktat is the wrong approach. However, I welcome the fact that, thanks to the Government’s amendments in lieu, we now see in the Bill a commitment to consult on NDMPs. That was an important part of the compromise announced last December by the Secretary of State to tackle problems outlined in the amendments package headed by new clause 21, which I tabled. It resulted from concerns felt by many on the Government Benches about problems leading to massive pressure for blocks of flats in the suburbs and housing estates on greenfield and agricultural land in rural areas. Now, we need to see the remainder of that package delivered by the national planning policy framework. Once again, I encourage and urge Ministers to get that published.

We also need to see the new set of planning policy guidance—another document that will be crucial to ensuring that the reforms promised in the planning system deliver real change. Concern remains among Back Benchers about the rush for volume of units at all costs. We all accept the need for new homes and want more homes built, but they need to be the right homes in the right places. I know that you, Mr Deputy Speaker, strongly agree with that.

With that in mind, I can understand the rationale of Lords amendment 45 on climate change mitigation and adaptation. We need to do more to ensure that the developments that come forward for approval are consistent with our net zero goals. I am not necessarily saying that Lords amendment 45 is the right vehicle to deliver that, but if we are to make that huge transition to carbon neutrality, construction and development has an enormous part to play, and significant change needs to be delivered. I hope that the Government will make every effort to ensure that the new NPPF reflects our climate goals, in terms of both mitigation and adaptation.

In particular, as we have heard many times during the debate on the Bill, we must take care in relation to areas prone to flooding since, even if we deliver net zero on time, the climate has already changed to make such episodes more serious and more frequent. I would like to take this opportunity to put on record my great sympathy to anyone who has been affected by the floods of recent days. I hope they are back in their homes soon. I truly understand what a miserable experience it is to be subjected to these climatic episodes.

Returning lastly and briefly to the December compromise announced on Report by the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), I reiterate what I have said a number of times in this House: we need the compromise to be implemented. The issues raised in new clause 21 on excessive targets have not gone away. Back-Bench concern has not gone away. We are all determined to defend our constituencies from overdevelopment. We believe it is vital to shift the focus of home building to big urban city sites like Old Oak Common, Beckton and central Manchester. The Docklands 2.0 approach outlined by the Secretary of State in his July speech and in his long-term plan for housing reflects our climate commitments by situating people close to jobs, services and public transport systems. It helps to take the pressure off suburban and rural areas, protecting green spaces and the green belt, and supports our ambitions for nature recovery. So, please, let us make sure that that change really happens.

Renters (Reform) Bill

Matthew Pennycook Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

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

It is a pleasure to close this Second Reading debate for the Opposition, and I thank all hon. and right hon. Members who have spoken in it. It has been a good debate and one defined by a great many thoughtful and eloquent contributions.

As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) so rightly argued in her remarks at the outset, this is a piece of legislation that is shamefully overdue. As she and other speakers pointed out, not only is it now over four and a half years since the Government first pledged to abolish section 21 no fault evictions, but, for reasons that now appear quite clear, Ministers sat on the Bill for a further five months subsequent to its publication in May. Drawing attention to the lengthy delay in bringing the Bill forward is not simply a parliamentary debating point. As many of my hon. Friends, including my hon. Friends the Members for Putney (Fleur Anderson), for Liverpool, Riverside (Kim Johnson), for Liverpool, West Derby (Ian Byrne) and for Blaydon (Liz Twist) pointed out, it has had very real consequences for private renters across the country.

During the years that Ministers prevaricated and the months this year they clearly spent negotiating with the discontented on their own Benches, tens of thousands of renters have been pushed to financial breaking point by multiple rent rises or threatened with homelessness as a result of being served a section 21 notice. We will continue to justifiably bemoan the fact that the Government have not acted with the urgency that was required, but we do welcome the Bill’s finally progressing. I want to take the opportunity to thank once again, on behalf of those on the Labour Benches, all organisations, particularly the 20 that comprise the Renters Reform Coalition, for not only making the case for change over many years, but for joining Labour over recent months in urging Ministers to get on with the process of turning the Bill into law.

The case for fundamentally reforming the private rented sector is as watertight as they come, and Labour has called for it for many years. More than 11 million people in England—not just the young and the mobile but, now, many older people and families with children—live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction. Such a situation cannot possibly be justified.

The sector should have been transformed a long time ago. Its regulation should have been overhauled to level the playing field between landlord and tenant decisively. The Bill is a good starting point to that end, and, as the debate has made clear, the principle of it enjoys broad support across the House. General support has been expressed today for the White Paper proposals that have found their way into it, including a new property portal and ombudsman, a simpler tenancy structure, the end of rent review clauses, prohibitions on multiple in-year rent increases, the right to request keeping a pet, and, of course, the abolition of section 21 notices.

However, as nearly all Opposition Members mentioned, a significant degree of uncertainty now surrounds the implementation of the promised section 21 abolition as a result of a concession made by Ministers to appease a minority of disgruntled Conservative Members—seemingly without complete success, given the tone and content of the contributions of the right hon. Members for Calder Valley (Craig Whittaker) and for Gainsborough (Sir Edward Leigh) and the hon. Members for Yeovil (Mr Fysh) and for Don Valley (Nick Fletcher).

As we have heard, the Government have made it clear in recent days—although it would seem that Members were told two weeks ago—that section 21 notices will not be phased out until Ministers judge that

“sufficient progress has been made to improve the courts.”

Explicit reference was made to end-to-end digitisation of the process, which could well take a great many years to achieve. Private renters across the country, who have been assured repeatedly by Ministers that the passage of this Bill will finally remove the threat of a section 21 eviction, have no guarantee whatsoever that the concession made does not amount to an effective deferral of that change well beyond the phased transition already provided for by the Bill.

If this sounds all too familiar, that is because it is. The Secretary of State has form when it comes to acquiescing in damaging concessions rather than facing down the unruly Benches behind him, with future housing supply in England a notable past casualty.

After 13 years of Tory government, the courts system is on its knees. The Government have had more than four and a half years, since they committed themselves to abolishing section 21 evictions, to make significant improvements to it in order to support good-faith landlords, and they have not succeeded. As things stand, HMCTS does not expect to be able to deliver even the reduced-scope reform programme to its current timetable. Given this Government’s record, why on earth should renters take it on trust that things will improve markedly any time soon? The inefficiency of the courts system is a huge problem, and action must be taken to address its lack of capacity so that landlord possession claims can be expedited, but the end of no-fault evictions cannot be made dependent on an unspecified degree of future progress subjectively determined by Ministers. In the absence of very clear commitments from the Minister on metrics and timelines in this respect, we will seek to amend the Bill in Committee to ensure that it is not.

While Ministers face the prospect of having to give further ground as the Bill progresses to keep their Back Benchers onside, Labour will work in Committee to see it strengthened so that it truly delivers for tenants. We will press for clarification of the new grounds for possession for students’ landlords to ensure that they are not too expansive, and will probe the Government’s intentions in respect of dealing with the complexities of the student market. My hon. Friend the Member for Sheffield Central (Paul Blomfield) and the Chair of the Select Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), rightly called for that.

We will put forward a number of sensible changes, including an increase in the proposed notice periods from two months to four months to protect renters better. I am pleased that my hon. Friends the Members for Stretford and Urmston (Andrew Western) and for Brighton, Kemptown (Lloyd Russell-Moyle) argued for that. We will press the Government to reconsider their position on a range of White Paper proposals that did not make it into the Bill. They include measures to strengthen councils’ enforcement powers—I thank my hon. Friends the Members for Battersea (Marsha De Cordova) and for Blaydon for raising that point—along with powers to limit the amount of advance rent that landlords can ask for, and provisions to expand rent repayment orders to cover repayment for non-decent homes.

We will explore why essential reforms that were outlined in the White Paper, including the proposed legally binding decent homes standard and the proposed ban on landlords refusing to rent to those in receipt of benefits or with children—a point powerfully made by my hon. Friend the Member for Sheffield South East—are not on the face of the Bill. We will explore what more might be done to ensure that the separate measures that have been promised to enact each of those reforms are passed and applied quickly and effectively. We will also look to amend various provisions in the Bill relating to new and revised grounds for possession, including the far too sweeping and punitive proposed new mandatory ground 8A and the proposed change to discretionary ground 14 relating to antisocial behaviour, so that blameless and vulnerable tenants are properly safeguarded.

Perhaps most importantly, we will seek to close the numerous loopholes in the Bill that would allow the minority of disreputable landlords—such as the unscrupulous owner of Dorchester Court mentioned in the powerful contribution of my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes)—to exploit tenants and jeopardise their security of tenure. Let us take two examples that are featured prominently in the Bill. Even with the proposed expanded right to challenge, it is far from clear that the tribunal system would prevent significant numbers of tenants from being evicted by means of an extortionate rent hike. We need to explore what more can be done to put in place genuinely effective means of redress for them. Similarly, the proposed three-month ban on landlords re-letting properties they have taken back to sell or move into themselves is not only insufficient but appears not to apply in some circumstances and will almost certainly be impossible to enforce even when it does. We need to tighten it.

The Bill is shamefully overdue but imperative. We support it in principle and are pleased that it will progress today, but it needs to be enhanced rather than undermined by concessions aimed at placating a minority of Members. Private renters deserve a piece of legislation that will ensure that they have real security and enjoy better rights and conditions in short order. We are willing to work constructively with the Government on the Bill, but make no mistake, we plan to do everything in our power to see it strengthened to the benefit of private renters who have waited long enough for meaningful change.

Levelling-up and Regeneration Bill

Matthew Pennycook Excerpts

Consideration of Lords amendments
Tuesday 17th October 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call shadow Minister.

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

Well, what can one say about that last 20 minutes, apart from that it must have felt far more persuasive when the Minister practised it in the mirror this morning, but I do congratulate her on the birth of her grandson.

I will start by thanking their lordships for the extensive and forensic scrutiny to which they have subjected this complex and demanding piece of legislation. I put on record the appreciation felt on these Benches for the tireless work of our noble Friends, Baroness Hayman of Ullock and Lady Taylor of Stevenage, ably assisted as ever by Ben Wood and the whole Labour Lords team.

This Bill has been with us for some time now. First published in May 2022, it has progressed slowly against the backdrop of significant political and economic turbulence, the responsibility for which lies squarely with the Conservatives. It has survived an unprecedented degree of ministerial churn: three Prime Ministers; four Secretaries of State, albeit one a retread; four Housing and Planning Ministers; and four Levelling Up Ministers. With so many minds on the Government Benches having grappled thoughtfully with the implications of each of the Bill’s many provisions, one might have hoped that it would have been significantly improved and that its worst features would have been substantially mitigated, if not removed altogether. Sadly, despite the addition of scores of new clauses and a large number of new schedules to the extensive number it already contained, the Bill remains not only eclectic but deeply muddled. It is a rag-tag mix of measures—some sensible, but many more ill-considered or downright damaging—that attempt but fail to render coherent a Tory levelling up, devolution and planning agenda that is anything but.

In the eight months that the Bill was considered in the other place, the Government were forced to give way on a variety of fronts. I am glad that, in a range of areas, the arguments that my hon. Friend the Member for Nottingham North (Alex Norris) and I made in Committee last year have been partially accepted.

However, although the Government’s concessions have rendered the Bill slightly more palatable, they have not resolved the fact that it still contains a range of measures, from the new infrastructure levy to community land auction arrangements, that are riven with flaws. We regret the fact that Ministers did not reconsider their inclusion entirely. It will now fall to a future Labour Government to halt, review or rescind each of them.

We do not have an opportunity today to attempt, again, to address many of the more problematic parts of the Bill but, as a result of the prodigious efforts of noble Lords in the other place, we have a chance to make a number of important changes that would modestly improve the Bill and, in so doing, enhance outcomes for local communities across the country. It is with that objective in mind that I turn to a selection of the unusually large number of amendments that the other place has sent to us for consideration.

Lords amendments 1 and 10 relate to the levelling-up mission set out in part 1 of the Bill and the distinct, but related, third round of the levelling-up fund. They seek respectively to ensure that the missions and the fund application process are properly integrated and that round 3 of the fund takes place not only in a timely manner but on the basis of a reformed application process. We support both.

The Opposition’s views on the Government’s levelling-up missions are well known, but, if we are to give statutory force to a statement setting such missions for a period of no less than five years, it is right not only that it comes into effect soon after the Bill receives Royal Assent but that it is accompanied by a statement detailing the application process for round 3 of the levelling-up fund, including transparent criteria so that the two can be fully aligned.

Similarly, our criticisms of the levelling-up funding process are a matter of public record, but, if the fund is to be the primary means of delivering priority local infrastructure projects for the foreseeable future, it is right that steps are taken prior to the opening of round 3 to simplify the application process and to reduce the onerous requirements and resources it presently involves.

We recognise that, by tabling an amendment in lieu of Lords amendment 10, the Government have sought to enshrine in the Bill an assurance in respect of round 3 of the levelling-up fund. However, not only is the content of the proposed statement left completely undefined, but the proposed amendment in lieu fails to achieve one of the central objectives sought by their noble Lords, namely that such a statement be published within the same timescale as a statement on the levelling-up missions so that the two processes, which are clearly connected, fully complement each other. For those reasons, we cannot support the Government amendment in lieu and we will support Lords amendment 10, along with Lords amendment 1.

The question of whether the Government’s proposed levelling-up missions are comprehensive enough to reduce inequalities between and within regions has arisen since the White Paper was first published in February 2022. Lords amendments 2 and 4 seek to augment the 12 missions set out in that document by requiring the addition of separate missions relating to child poverty and health disparities. We welcome the Government’s acceptance that addressing the impact of economic and social disparities warrants a greater focus in respect of levelling-up missions and that they have tabled amendments in lieu of Lords amendments 2 and 4 to that end. However, in our view, the requirement that Ministers “must have regard” to these disparities in the preparation and review of all the missions falls some way short of the implications that establishing dedicated new missions on child poverty and health disparities would have for life chances across the country. For that reason, we cannot support the Government amendment in lieu and will support Lords amendments 2 and 4.

We also support Lords amendment 22. We remain firmly of the view that there are circumstances in which virtual or hybrid meetings are necessary or useful, and that their use could help to reduce barriers to public engagement, particularly in relation to the planning process. As we argued in Committee last year, a number of organisations, including the Planning Inspectorate, already enjoy the freedom to offer such meetings as they deem necessary, and there is widespread support for putting local authority remote meeting arrangements on a permanent footing, including from the Local Government Association, Lawyers in Local Government and the Association of Democratic Services Officers. The Government have offered no compelling reason why this amendment should not be incorporated into the Bill, and we therefore urge the House to support it.

As the Minister will know, the establishment of a new tier of national planning policy in the form of national development management policies, and their precise relationship and standing in respect of local development plans, has been a point of contention throughout the Bill’s passage. The Opposition feel strongly that it cannot be right that national policies that will have a far greater impact on local communities than any existing national policy statement and that have significant implications for the status and remit of local planning can be developed without an obligatory and defined public consultation and parliamentary approval process. Lords amendment 44 stipulates such a process, including minimum public consultation requirements and a mechanism for facilitating parliamentary scrutiny based on that which currently applies to designating a national policy statement.

--- Later in debate ---

[Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)]

Does my hon. Friend agree that people deserve to have their voices heard and to decide for themselves who they want to represent them as their police and crime commissioner?

[Matthew Pennycook]

My hon. Friend is right. As I was about to say, we believe that this change is clearly driven by political expediency and is intended to facilitate the transfer of the PCC functions in the west midlands to its Mayor prior to the elections that will take place in May 2024. This is the latest attempt to achieve that end—a provision enabling the Mayor to expand the boundary of the West Midlands Combined Authority without the consent of the constituent authorities, having been defeated in the other place on 13 July. Lords amendment 273 does not engage with the substantive issue of whether a transfer on this basis is appropriate. All it seeks to do is to delay the point at which the measures contained in clause 59 come into force, so that this not insignificant change can be enacted in a considered manner after the next set of elections take place. The amendment has our support.

Finally, Lords amendment 329, which was tabled by Lord Best, would require local plans to identify the scale and nature of local housing need and to make provision for sufficient social rented housing so that homelessness and the use of temporary accommodation can be ended. The importance of this matter cannot be overstated. As a result of the reduced supply of genuinely affordable homes over the past 13 years, more than 1.2 million households languish on local authority waiting lists; millions of families are trapped in overcrowded or unsuitable properties; and, to our shame as a nation, the number of households in temporary accommodation, many of whom contain young children, surpassed 100,000 for the first time this year. National planning policy is clear that local plans should, as a minimum, provide for objectively assessed needs for housing, but we know that the true extent of local housing need, and in particular the need for social rented housing, is not often reflected in them.

We strongly support the principle that underpins Lords amendment 329: that local planning authorities should be required, rather than encouraged, to properly identify local housing need and plan to meet it. We recognise that the Government have made an important concession with their proposed amendment in lieu of Lords amendment 329, which would ensure that local plans must take account of an assessment of local housing need, including affordable housing need. However, the Government amendment in lieu falls short, in failing to require local planning authorities to plan to accommodate that identified need. For that reason, we are minded to support Lords amendment 329 today, with a view to encouraging the Government to consider whether they can move a little further on this matter.

[Rachael Maskell]

Having served on the Bill Committee for six months, I have to say to the Minister that I found it really disrespectful that she would not take my intervention; I am here to scrutinise the legislation. I say to my hon. Friend—the future Housing Minister—that I welcome our adoption of these measures to ensure that we get the right tenure, not least because of the housing crisis that I see in my constituency. Let me push him further by asking whether we will accept the principles of Lords amendment 46 on healthy homes and the built environment, because we know that housing is about not just bricks and mortar, but the environments in which people live.

[Matthew Pennycook]

I thank my hon. Friend for her intervention, and I thank her again, as I did at the time, for the many months of work that she did on the Bill Committee. She is right to raise the point about healthy homes; we fully support the principles of that campaign. We disagree with the Government’s suggestion that the issue is already well addressed, and I gently encourage the Minister to continue the conversations that I believe the Government are having with Lord Crisp and the other proposers of that amendment in the other place.

To conclude, while we welcome a small number of the concessions that the Government have felt able to make to the Bill, we believe that most do not go far enough. This unwieldy and confused piece of legislation is flawed on many levels. We have an opportunity today to make modest but important improvements to it. On that basis, we urge the House to support the many reasonable amendments that the other place has sent to us.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Father of the House.

Oral Answers to Questions

Matthew Pennycook Excerpts

Monday 16th October 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

It is essential that we boost the number of new homes built each year for private sale, but just as important is the need to significantly increase the supply of new affordable homes to buy and rent. The National Audit Office has confirmed that the Government’s target for its flagship 2016 to 2023 affordable homes programme was 250,000 starts by March 2023. Can the Secretary of State explain how on earth the public can trust this Government to address the housing affordability crisis when recent figures reveal that they have failed to deliver on their share of that target outside London?

[Michael Gove]

The significant increase in the affordable homes programme that I outlined earlier is the means for that to be done, but the difference between us is that we have a target for social and affordable homes, while Labour has none.

Nutrient Neutrality: Levelling-up and Regeneration Bill

Matthew Pennycook Excerpts

Tuesday 5th September 2023 Commons Chamber

[Mr Speaker]

Oh, sorry. It has taken so long, I thought we must have moved on to Back Benchers. I call the shadow Minister.

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

Thank you, Mr Speaker. As a result of the Government’s failure over many years to make decisive progress in tackling the main sources of problem nutrients, namely farming and waste water treatment works, the requirements for nutrient neutrality in sensitive river catchments present a challenge to securing planning permission for new housing development. It is therefore right in Labour’s view that the operation of the rules around nutrient neutrality is reviewed with a view to addressing problematic delays and increasing the pace at which homes can be delivered in these areas.

However, we have serious concerns about the approach that the Government have decided on. Not only does it involve disapplying the Conservation of Habitats and Species Regulations 2017, but it does not legally secure the additional funding pledges to deliver nutrient management programmes and does not provide for a legal mechanism to ensure that housing developers contribute towards mitigation.

I put the following questions to the Minister: what advice did the Government receive from Natural England about potential reform of the laws around nutrient neutrality? Did it offer a view on the Government’s proposed approach? Given the amount of mitigation currently available in the pipeline, which is estimated at allowing for approximately 72,000 homes, did the Government consider an approach based on the habitat regulations assessment derogation and a revised credit mitigation system to front-load permissions and provide for future compensatory schemes? If so, why did they dismiss that option? What assessment have the Government made of the impact of their proposed approach on the nascent market in mitigation credits, and investor confidence in nature markets more generally? Why on earth do Ministers believe developers will voluntarily contribute to mitigation under the proposed approach?

Finally, the Government claim their approach will see 100,000 planning permissions expedited between now and 2030. Given that house building activity is falling sharply and the pipeline for future development is being squeezed—not least as a result of housing and planning policy decisions made by this Conservative Government—what assessment has the Department made of the number of permissions that its disruptive approach will unlock within the first 12 months of its operation?

[Rachel Maclean]

I thank the hon. Gentleman for his questions and remarks. I take them to mean that he will support the measures when they come before the House. I am delighted to hear his support for our sensible, practical and pragmatic approach to unblock much needed housing across the country. He asked about our engagement with Natural England; we have had detailed discussions. He asked about the current legal framework; we have looked at and discussed a number of options to make the changes, and we are taking what we believe is the right approach to unblock planning permissions more quickly than the current situation allows.

The hon. Gentleman referred to nature markets; he is right to highlight the groundbreaking work we are doing across that piece. We are continuing with our commitment to those nature markets, which are a very important part of the Government’s plan to keep our environment, protect it and leave it in a better state than we found it. That is what the Conservative Government have always been committed to and continue to be.

The hon. Gentleman is right to say that we have spoken to developers, who, of course, support our objectives. We have very constructive dialogue with the developers, who are happy to contribute. We will have those discussions with industry, as I am sure he has heard from developers, because I know he has spoken to them all. We are on the side of those builders. It is important to say that the developers most affected by the disproportionate ruling from the European Court of Justice are not the big developers but the small and medium-sized enterprises—the small builders—some of which have gone bust. It is right that we stand behind them.

Cost of Living: Private rented sector

Matthew Pennycook Excerpts

Tuesday 18th July 2023 Westminster Hall

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

As ever, Dr Huq, it is a pleasure to serve with you in the Chair.

I start by congratulating my hon. Friend the Member for Stretford and Urmston (Andrew Western) on securing this incredibly important debate and on his powerful opening remarks. He has served in this place only for a relatively short time, but he has already made a considerable impact. His commitment to advocating for all those at the sharp end of the acute housing crisis has helped and will continue to help to ensure that it remains a prominent consideration for the House.

I also thank all those other hon. Members who have participated in this afternoon’s debate. I particularly commend the compelling contributions of my hon. Friends the Members for Barnsley East (Stephanie Peacock), for Pontypridd (Alex Davies-Jones), for Birmingham, Erdington (Mrs Hamilton), and for Cynon Valley (Beth Winter)—I hope that I pronounced that last constituency correctly.

I also want to take the opportunity at the outset to express the Opposition’s thanks to all those organisations that have done so much to keep the issue of renters’ reform on the political agenda, particularly the 20 organisations that form the Renters’ Reform Coalition.

The cost of living crisis remains the most pressing issue facing households across the country. Against the backdrop of static inflation and rising core inflation, prices in some areas are easing, but remain high by historical standards. Pay is now rising, despite a cooling labour market, but continues to fall in real terms. Direct cost of living support for households is being scaled back, and the Government have overseen one of the biggest tax rises in a generation. As a result, families are continuing to feel the squeeze, and many are cutting back on essentials, withdrawing savings and racking up debts.

All the evidence suggests that private renters are particularly hard hit. Data released by the Office for National Statistics only on Friday, made clear that renters are nearly five times as likely to be financially vulnerable compared with mortgage holders or outright homeowners. According to that analysis, as many as four in 10 renters are finding it difficult to pay their rent. Renters are more likely than mortgage holders to cut spending on groceries and other essentials, to run out of food, and to be behind on energy payments.

The pressure on private renters reflects, at least in part, the sharp increase in rents over the recent period, owing to the mortgage crisis this Conservative Government presided over, as well as the general shortage of lettings, an issue rightly highlighted by my hon. Friend the Member for Stretford and Urmston in his comments relating to overall supply. According to the ONS, private property rental prices across the country rose 5% in the 12 months to May 2023, the biggest increase since the national data series began in 2016, with rent rises most acute in London.

We have heard several statistics in the debate, and other analysis suggests that the situation could be even more dire, with property website Rightmove suggesting that rents have risen nationwide by 9.4% in the past year, and by an eye-watering 14% in Greater London. The combination of all those pressures means that the situation for many renters is nothing short of dire. According to Shelter, almost 2.5 million are either behind or constantly struggling to pay their rent, an increase of 45% since April 2022. An analysis produced by the debt advice charity, StepChange, suggests that private renters are twice as likely as the general population to be in problem debt.

With renters across the country at breaking point, and many falling into arrears and at risk of eviction, they urgently need the long-term security and better rights and conditions they have been promised by this Government. After so many years of waiting, the Government finally published the Renters (Reform) Bill on 17 May. Yet, two months on, the Bill has not had its Second Reading and will not have it before the summer recess. That means, as my hon. Friend the Member for Pontypridd mentioned, we will not get a chance to consider it before September.

The Government’s justification for the delay, as suggested by the Secretary of State at departmental questions last week, is that a “fit-for-purpose impact assessment” was required to be available before progressing the legislation. No one disputes the need for a fit-for-purpose impact assessment to accompany the Bill, as we subject it to detailed scrutiny. We welcome the fact that the regulatory policy committee declared it green rated as of 3 July. However, it is frankly laughable for a Government that published the impact assessment for the Levelling-up and Regeneration Bill the day before Third Reading to suggest the absence of a fit-for-purpose one is the sole reason that Second Reading of the Renters (Reform) Bill was delayed.

Whatever the reason for the delay, with a green-rated impact assessment now available, there is no reason whatsoever that we cannot begin to progress this long overdue and desperately needed piece of legislation. Will the Minister confirm to the House, and all those renters following our proceedings today, that the Renters (Reform) Bill will finally have Second Reading in the weeks immediately following the House’s return after the summer recess? Can she also reaffirm the commitment she made in response to a question from journalist Vicky Spratt at the Renters’ Reform rally on 21 March, to the effect that the Government will ensure that the abolition of section 21, and presumably therefore the passage of the Bill in its entirety, will be completed this autumn?

As the Minister will know, the Opposition were supportive of the proposals published in the “A fairer private rented sector” White Paper last year, on the basis that they provide a solid foundation for overhauling the private rental market, and we welcome much of what is in the Bill. However, we do have some concerns. We were troubled, for example, that the proposed legally binding decent homes standard for the private rented sector, and the ban on landlords refusing to rent to those in receipt of benefits or with children, commonly known as “no DSS” practices, are not in the Bill.

The explanatory notes accompanying the Bill state:

“The Government is carefully considering how to implement these policies and intends to bring forward legislation at the earliest opportunity within this Parliament.”

The Minister confirmed to the Levelling Up, Housing and Communities Committee last Monday that separate legislation was not required, but that the Government intended to introduce both measures, along with stronger enforcement powers for councils, through the Renters (Reform) Bill. Can she confirm today that that is indeed the case? Will she provide the House with an assurance that the changes will be considered and scrutinised in Committee, rather than tabled as detailed amendments just prior to Report, thereby allowing for only limited scrutiny, as her Department has done with other pieces of recent legislation?

Lastly, the Minister will know that the Opposition regret the fact that important elements of the White Paper are missing from the Bill as published, including powers to limit the amount of advance rent that landlords can ask for and measures to expand rent repayment orders to cover repayment for non-decent homes. Can she tell us whether the Government are open in principle to amending the Bill to include those measures and to address its other well-known and well-understood deficiencies and loopholes, not least the inadequate means of redress provided for challenging extortionate within-tenancy rent hikes, or is it the Government’s intention to resist such attempts to strengthen this important piece of legislation?

Private renters have waited long enough to secure a fair deal. The case for transforming how the rental sector is regulated, and for finally levelling the playing field between tenant and landlord, is indisputable. The case for reform existed before the cost of living crisis, which has now made it an urgent imperative. The Government must act, and must act boldly. I look forward to listening carefully to the Minister’s response.

Social Housing (Regulation) Bill [Lords]

Matthew Pennycook Excerpts

Consideration of Lords message
Monday 17th July 2023 Commons Chamber

[Dehenna Davison]

The hon. Gentleman is, as ever, a fantastic champion for Northern Ireland and its people. We will, of course, continue to have conversations with the relevant bodies in Northern Ireland, because it is important that social housing, wherever it is provided within the United Kingdom, is up to the appropriate standard. I know he will continue to champion that cause.

In closing, I would just like to put on record one final time my and my Department’s heartfelt thanks to Grenfell United and all other stakeholders for their strong constructive engagement on this critical legislation. I hope that, following today, we will see it on the statute book incredibly soon.

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

I intend to be brief, because the sole amendment we are considering is entirely uncontentious.

As you will no doubt recall, Madam Deputy Speaker, the Opposition welcomed the concession the Government made in the other place last year with regard to professional training and qualifications, and the resulting addition of clause 21 to the Bill. Having pressed in Committee for that clause to be strengthened, we also welcomed the Government’s amendment to it, which was tabled on Report earlier this year on the basis that it largely assuaged our concerns. We support Lords amendment 13B in lieu of Commons amendment 13, as do the relevant trade bodies and tenant groups including Grenfell United and Shelter, whom we once again commend for the role they played in convincing the Government to incorporate qualification requirements in the Bill.

Lords amendment 13B is a technical amendment that has three main effects. First, it will ensure that the qualification requirements in clause 21 capture relevant managers working for organisations which deliver housing management services on behalf of a registered provider. Secondly, it will ensure that contractual agreements between registered providers and delegated services providers and relevant sub-agreements contain terms stipulating that their relevant managers should have, or be working towards, a specified qualification in housing management, thus enabling registered providers to take action against delegated services providers that are not compliant. Thirdly, the amendment expands on definitions of services providers and specific roles, and provides for consultation before setting a standard and before giving a direction to set a standard.

We agree with their lordships that the changes are necessary if we are to ensure that the sector as a whole delivers high-quality professional services of the kind social tenants deserve and rightly expect. I want to put on record our thanks to my noble Friend, Lady Hayman of Ullock for bringing the need for this amendment to the Government’s attention and for her efforts more generally to improve the Bill in the other place.

It is our sincere hope that once the House has agreed this minor but necessary change today, this important and urgently needed piece of legislation can quickly receive Royal Assent so that we can overhaul the regulation of social housing and better protect the health, safety and wellbeing of social tenants across the country.

Question put and agreed to.

Draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023

Matthew Pennycook Excerpts

Monday 17th July 2023 General Committees

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

It is a pleasure to serve with you in the Chair, Mrs Murray. I thank the Minister for the detailed explanation she has just read into the record.

The Opposition welcome this instrument and do not intend to oppose it, although we do bemoan the fact that it has proven necessary for the Government to bring it forward. After all, these regulations consist mostly of technical amendments to regulations previously made under the Building Safety Act after it came into force. For example, regulation 10 amends the definition of resident management companies to ensure consistency across the relevant regulations. Surely, the need for such basic definitional alignment could have been anticipated in the drafting of the previous regulations. We appreciate fully that these are not simple matters, but the fact that this Committee is having to meet this afternoon to rectify what are largely obvious deficiencies and omissions in the drafting of the previously approved regulations does not exactly inspire confidence in the Government’s approach to leaseholder protections and the building safety crisis more generally.

During the passage of Building Safety Bill, we warned about the consequences of rapidly overhauling what was already a complex and technical piece of legislation in order to reflect the Government’s belated change of approach. Indeed, I remember arguing when we considered Lords amendments to the Bill in April last year that it was deeply problematic that this House had so little time to carefully consider or properly scrutinise substantial changes to the legislation. As I said at the time,

“this is no way to make good law”—[Official Report, 20 April 2022; Vol. 712, c. 191.]

Our concerns persist when it comes to the regulations before us. What assurances can the Minister give us that, in rectifying the deficiencies and omissions in previously approved regulations, the same errors will not recur in respect of the many other building safety instruments that we still need to consider?

While the bulk of this instrument concerns technical amendments to recently approved regulations made under the Building Safety Act, there are some noteworthy new provisions. I would like to press the Minister for specific information on one in particular: regulation 4, which adds Homes England to the list of interested persons who may seek remediation orders and remediation contribution orders under sections 123 and 124 of the Act. Leaving aside the obvious question of why it was not included from the outset, particularly given that it administers the building safety fund outside London, the addition of Homes England to the list of persons who can seek an RO and an RCO raises several questions.

First, is it the Government’s intention that, following the passage of this instrument, Homes England will largely or wholly take over the Department’s functions when it comes to applying to the first-tier tribunal for ROs and RCOs? Secondly, if that is the intention, do the Government expect this transfer of responsibility to lead to an increase in the number of such orders being applied for, beyond the extremely small number of orders that the Department is presently taking forward? Thirdly, will Homes England be provided with any further funding in order to fulfil this new responsibility—perhaps some of the £1.9 billion of allocated funding that the Department recently returned unspent to the Treasury?

As I have suggested, while there is good reason to believe that the need for them could and should have been anticipated, the instrument contains a series of perfectly sensible refinements to previous regulations, the effect of which should be to streamline the landlord certificate and leaseholder deed of certificate process. As the Minister has made clear, the draft regulations include provisions specifically requiring a landlord certificate to be served within four weeks of a landlord becoming aware of a new leaseholder deed of certificate containing information not included in a previous landlord certificate; changes to the information required to be included in a landlord certificate; and changes to the time period within which a landlord must share a copy of a received leaseholder deed to any RMC, RTM or named manager or else be prevented from recovering costs.

We take no issue with any of these measures. However, we regret that, although the instrument makes these necessary changes, it is a missed opportunity to resolve a number of other glaring deficiencies in the Building Safety Act that the Government really should have resolved by now. Let me give the Committee two brief examples.

The first example concerns the gap in the Building Safety Act that exists for those leaseholders who need to extend or vary their lease on or after 14 February 2022. The Minister and her officials are well aware that any leaseholder granted a lease extension or variation in a block of flats after that date does not benefit from the protections provided for under schedule 8 to the Act, even if the surrendered lease had the benefit, with the effect that leaseholders are being advised by the Government to try to persuade their landlord to apply those protections as contractual terms. The Government have stated on the record that they are

“looking to legislate to resolve this issue as soon as parliamentary time allows.”—[Official Report, House of Lords, 2 May 2023; Vol. 829, c. 1392.]

Why are the Government not using this instrument to address that shortcoming?

The other example concerns the circumstances in which the costs of remediating relevant defects in relevant buildings can be charged back to leaseholders. As the Minister will know, in the recent case of Adriatic Land 3 Ltd v. Leaseholders of Waterside Apartments, St James Court West, Accrington, the first-tier tribunal held that the service charge protections under schedule 8 to the Act were not retrospective. As a result, those landlords who, seeing the writing on the wall, quickly sent out demands for service charges to cover the cost of remedial works before the Act came into force on 28 June last year have seemingly got away with passing on significant costs to leaseholders. The Government are surely not expecting individual leaseholders or groups of leaseholders to fund litigation to settle the law, so why are they not using this instrument to clarify that the provisions of schedule 8 are retrospective?

In addition to the specific questions that I have put to the Minister about regulation 4, I would be grateful if she explained why these and many other unresolved issues are not being addressed in this instrument, and if she provided further detail on whether and when they will finally be addressed.

Freehold Estate Management Fees

Matthew Pennycook Excerpts

Thursday 13th July 2023 Westminster Hall

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

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

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

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

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

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

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

[Richard Fuller]

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

[Matthew Pennycook]

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

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

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

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

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

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

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

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

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

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

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

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