20/12/2016 House of Commons

services they provide will change as more people want to be treated at

home. Thank you. Order. Urgent question. Mr Ed Miliband. To ask the

Secretary of state to make a statement on the time table and

approach of Government to 21st Century Fox's bid to take over Sky

and whether it plans to refer the bid to the competition authority. As

members know, Sky PLC announced on Friday 9th December it had received

an approach from 21st Century Fox to acquire the 61% of shares which it

does not already own. The minister for culture made a statement on 12th

December about the proposed bid and the process that would need to be

followed. I recognise that this is an issue of significant interest to

the public and had raised interest in Parliament as well as being a

significant issue for the parties concerned. It is very important that

I make clear the role I will play in this process is a quasi-judicial

one. I'm able to intervene in certain media mergers on public

interest grounds, as set out under the enterprise Act. Government

guidance under that act gives an indication of how the intervention

regime will operate in practice and the approach I will aim to take. The

most important concern is that the integrity of the process is uphold.

The guidance makes clear I will aim to take an initial decision within

ten working days of formal notification of the merge r to the

competition authority No such formal notify xags has been made. --

notification has been made. Unless and until it is made, I will not be

taking any decision in relation to the bid. It is for the parties to

inform the competition authorities. It is that point that I will need to

consider whether any of the public interests mentioned merit an

intervention. It is important I can act independent and the process is

fair. Given that it would be inappropriate to comment further on

this bid at this point, in order that the integrity of the process is

protected and that everyone's interests are treated fairly. What I

can say is I understand the significant public and Parliamentary

interest there is in this and I do not for a minute underestimate that.

This is also clearly a significant issue for the parties to the bid. It

is therefore crucial that the integrity of the process is

protected. I will not be making any further comment on the process or

the merits of bid today. But can I confirm that this matter is being

treated with the utmost seriously and should the parties formally

notify the bid to the relevant competition authorities that I will

act in line with the relevant legislation, guidance and in line

with the quasi-judicial principles. Can I thank the Secretary of State

for her reply, the urgency is that we are going into recess until

January and the bid maybe notified to Government at any time. It is

important Nat House understands the reality that even in launching this

bid the Murdoches are seeking to turn the judgement of this House,

the regulator and the country on its head. In 2011 this House urged the

withdrawal of the bid for Sky and in 2012 Ofcom publishing a damning

indictment of James Murdoch running News International. That only just

stopped short of saying Sky were unfit to hold a lie lens, because

the Murdoches were not a major holder. Today James Murdoch is back

as chairman of Sky and Chief Executive of 21st Century Fox. It

shows the Murdoches think they can get awhich with anything. Way with

anything. It was wrong for them to own Sky in 2012, it is wrong today.

We have seen convictions of seen your employees for phone hacking and

taking the payments. We are still yet to have part two of Leveson

which was accept was supposed to look at the corporate manage of News

International. Because this Government is seeking to ditch part

two of Leveson. We said never again would we allow the Murdoches to

wield unfetterred power, yet here we are all over again. So can I ask the

Secretary of State has she read the Ofcom report into James Murdoch and

what she thought of its contents. Can she tell us how this bid can

even be considered to be in the realm of reality when part two of

Leveson specifically tasked with looking at News International has

not taken place and thirdly, can she hear the message that if this house

were to return in January to find the waving through of this bid it

will be totally unacceptable and fly in the express will of this House

and the country. Can she assure this will not happen. On the steps of

Downing Street the Prime Minister said she would stand up to the

powerful. If ever there was a chance to prove it, it is today.

I do not for one second underestimate the huge public and

parliamentary interest in this proposed merger. As well as the

importance of this issue to the parties concerned. But the important

thing is that I must ensure, given my quasi judicial role, that I

protect the integrity of the process and ensure that as and when, if a

formal notification is given, it is properly considered. I will make no

further comments on the merit of the bid at this stage. Will my right

honourable friend bear in mind that contrary to the assertion of the

right honourable gentleman opposite the Guardian, the sky's share of the

television news market is 5% rather than 10% and while there may well be

a case for asking the regulator to look at this bid, will she also

recognise this represents a ?12 billion investment into a British

company and is a vote of confidence that Britain will remain a centre of

international broadcasting after Britain leaves the European Union?

My right honourable friend has significant interest in this area,

having been an exceptionally good predecessor for me. He will

understand the position I am in. I cannot comment. We have seen this

bid before. I know it is Christmas and a time for TV repeats, but this

was not a hit the first time round and it is no more popular now. More

than 135,000 people have already signed an online petition calling

for this bid to be referred to Ofcom. Their concerns are the same

as those which caused the previous as those which caused the previous

bid to be abandoned in 2011. Does the Secretary of State to

it would be outrageous if this bid it would be outrageous if

were pushed through the Christmas holidays when Parliament is not

sitting? Is she not even slightly embarrassed that on the one hand

shears currently consulting on shelve part two of the Leveson

Inquiry which would look at improper or unlawful conduct in parts of the

Murdoch empire? And she is also being asked to rule on whether the

umpire should be expanded. Last week the Minister told the house

categorically that the Prime Minister had not discussed this bid

at a recent New York meeting with Rupert Murdoch. Will the Secretary

of State repeat that insurance? How does she know? Can she tell us what

was discussed customer Levenson recommended those meetings should be

limited ashlar clap discussed? Yesterday Rupert Murdoch wrote the

Guardian deflate, I have made it a principle all my life never to ask

for anything from any Prime Minister. -- the Guardian. We will

just pause to take that in. You will recall John Major's testimony to the

Leveson Inquiry in which he recalled Rupert Murdoch asking him to change

his party's policy on Europe. Warning that, if we could not change

the European policies, his papers could not and would not support the

Conservative government. Does the Secretary of State believe Rupert

Murdoch or the former Conservative Prime Minister estimate what

implications does the contradiction between them have for the

application of the fit and proper person test? -- former Conservative

Prime Minister? I will repeat I cannot comment on the merits of the

bid. As and when a formal notification is made, there will be

ten days for me to make decision as to whether to refer the proposed

merger. The honourable gentleman talked about the Leveson process and

I want to remind him we have opened an open public consultation on the

Leveson process. I hope he has responded. I am sure he has. At the

end of that consultation, I will look at the responses in a separate

matter. He has asked specifically about the meeting the Prime Minister

held in September. She had a prearranged meeting with Wall Street

journal editors. Mr Murdoch dropped in and I can assure him that the

proposed takeover was not discussed. Who do you believe? I am not sure

the company controlled by Rupert Murdoch trying to buy another

company largely controlled by Rupert Murdoch is of the great public

interest that the step could try of interest that the step

the seems to think it is. -- the the seems to think it is. --

is. It is about the party opposite Secretary of State seems to think

is. It is about the party opposite not liking Rupert Murdoch. If it was

Richard Branson they would not be saying a word. Can I ask her to

ignore the siren voices opposite and not treat it with the great

importance they think it should be treated with? The BBC controlled

huge amounts of TV news output, local and radio news, and we do not

hear a peep out of the opposition about that. My honourable friend has

strong views on these matters. I will just repeat that I will not be

making any comments on the merits or otherwise of the bid. When this

matter was last discussed, the Minister said that the plurality

rules were clearly set out and that the Secretary of State would follow

them very carefully if she was required to make a determination.

Now the bid has been agreed, although no formal notification has

been given, can the Minister throw some light on the process? Does the

separation of the Murdoch print and broadcast interests change the

Government's view of plurality compared the last bit? How much

weight will the Secretary of State give to the separation when

considering whether or not public interest intervention notice should

be issued? -- the last bid. No formal notification has been made at

this stage and I will be making no comment on the merits of the bid or

otherwise. Thank you. May I note a hereditary interest in relation to

the forces of the great Rupert Murdoch? I commend my right

honourable friend for her proper evenhandedness in dealing with this

matter and her correct responses. May I also note that we have seen

the true voice of socialist envy that Sky has provided thanks to

Rupert Murdoch who risked his whole business on it in about 1990,

incredible choice to millions of people? It is amazingly popular.

Instead of decrying this wonderful achievement, we should be proud it

happened in Britain and proud this huge investment is potentially

coming into our nation and I hope my right honourable friend will bear

this in mind and will not fall tempted by the siren voices of

socialist ingrates. I note my honourable friend's comments but as

I repeat, I will not be making any comments on the merits or otherwise

of the bid. Thank you, Mr Speaker. The Secretary of State is quite

properly saying she is not going to comment on the decision itself, but

some of the questions put to her some of the questions put to

today. She should not hide behind today. She should not hide behind

it. Can I ask her again? How she it. Can I ask her again? How she

read the 2012 Ofcom report on the conduct of James Murdoch? Yes or no?

I am sorry to disappoint the right honourable lady but I will not be

making any comments on the process or merits otherwise. Disgrace.

Making a mockery of Parliament. Disgrace! The Minister is at pains

to tell us what she cannot do and we respect that, of course. But can she

tell us, can she give us an assurance that she will use her

office to ensure there is a proper plurality of ownership of the media

in this country and that the views of this house, which have been very

clearly and frequently expressed, that they will also be respected at

the end of this process? Mr Speaker, I fully appreciate the level of

interest in this House in this matter. I am sure this House will

continue to debate these issues and it is absolutely right it should do

so. But it is equally important, and the right honourable gentleman has

made the point, that I discharge my functions in line with the

legislation and in accordance with my quasi judicial role. Isn't it

likely that Mr Murdoch in fact has a point when he said, quoted earlier

from the front bench, I have never asked anything from any Prime

Minister? Why should he? He knows what a Tory government -- repertory

government knows what he wants and usually gives it to him without any

difficulty whatsoever -- the Tory government. It would not be

appropriate for me to comment on the relationships prime ministers over

the years have had with members of the press of all parties. The

secretary of State has made it very clear that she does not feel able to

comment on the content of this decision because it is a quasi

judicial decision, but does she show my anxiety that the timing is all in

the hands of Murdoch? She has a responsible at it to respond within

ten days. It might not be an accident that he has chosen not to

notify the bid at the moment in order to ensure that Parliament

cannot take a decision before she has to. What is she going to do

about that, now or in the future? At the moment, there is no decision to

take. This decision will be taken by me ask the Secretary of State and I

would like to reassure the right honourable lady I will not be taking

a break over Christmas, whether there is a formal notification or

otherwise. The member for North East Somerset could not have struck a

more wrong note with his remarks. Nobody on this side of the House

feels any envy for the family of Milly Dowler or any other victims of

phone hacking. The Secretary of State cannot tell us what she is

going to do. But what may be relevant for the fit and proper

person test is the findings of Leveson part two. When she came to

this House and she announced that she was going to do a consultation

on it, rather than just go ahead straightforwardly, did she have any

inkling that this takeover bid was going to be made? Mr Speaker, the

first I knew about the takeover bid was the same as everyone off in the

House, when it was announced in the press. -- everyone else. Given the

concerns raised about the timing, and the fact that it could well be

that the quasi judicial role that the Secretary of State will have to

undertake will be in the recess, if she could not answer questions about

what she has previously read today, will she ensure that when she does

take a decision on which you will be questioned in this House, she will

be able to answer that she did read all of that relevant material and an

understanding of Parliamentary and public interest, does she accept

that most of it goes to those points that are in the public interest

grounds in the legislation? I can assure the honourable gentleman that

I will fill the role I have exactly in line with the legislation and I

will of course be answerable to Parliament for the decisions I take.

I know there is no point asking the culture secretary to give a view on

the bid, but can I express to herd the views of more than 100

constituents who have e-mailed me in recent days expressing very clearly

what they think about the bid? Can she undertake that she will come

back to this House on the 9th of January to give us an update? I hear

the honourable lady's comments about her constituents' concerns and I

will update the house when there is anything to say on the matter. When

the original bid was abandoned in 2011, the former Prime Minister said

it was the right thing to do for the country. Does the Secretary of State

disagree with the former Prime Minister and think the time is now

right question of if not, will she please refer it to Ofcom. I cannot

answer that question at this stage. I have a quasi judicial role in this

process. I know the honourable lady has a legal background and will

understand that. I simply cannot make comment at this stage. I know

this question will not be answered but I am asking it just the same! A

substantial number of my constituents have contacted me over

the last week regarding this bid and they are all of the same opinion,

that Mr Murdoch has too much of an influence over our media. They would

like the bid to be referred to Ofcom for that reason. She agreed that any

takeover should be postponed until the Leveson Inquiry part two takes

place? I cannot comment on the merits of the bid or the process.

With reference to the question asked by my honourable friend about the

quote of the former promise the David Cameron, that the withdrawal

of the decision was the right one, what assessment has she made about

what might have changed between then and now? I will be making no

comments on any assessments I have made at any time. I will be going

through a full process in line with the legislation. I need to ensure

the integrity of that process for all concerned. We are all concerned

that next year the leader of the free world will be a Blunt brained

snake oil salesman who was elected by a prostituted press to food truth

is... In order to prove that she will bear in mind the very strong

views that we may need to maintain, those qualities of balance and

fairness that we have imposed on the BBC by statute is maintained in this

country, will she bear in mind the grave danger of a prostituted press?

I do not think anyone is in doubt of the honourable gentleman's views.

Grateful for the honourable gentleman for his sedentary chunter.

Is it the minister's intention to ensure a free press. I have specific

roles set out and I will fulfil that role with the utmost integrity. My

constituency have contacted me in relation to their concerns about the

bid, in particular the threat to the value diversity of our press. Will

she commit to addressing this point when she comes back to the House in

the first week back after recess and I'm sure will she confirm if she has

not read the 2012 Ofcom report on James Murdoch that she will have

done by the time she comes back. I can assure the House I will update

the House as and when decisions are taken and I do understand the utmost

interest there is in this matter, but it is a quasi-judicial role and

I cannot make any further comment at this stage. Order. Point of order.

On a different matter in response to a parliamentary reon staffing of

child poverty -- Parliamentary question on staffing of the child

poverty unit. The minister said responsibility for policy and

analysis has been transferred to the department for work and pensions.

Given the significance of that decision to abolish the child

poverty unit, can I seek your guidance toss ance as too whether it

could not have been more appropriate to make a written ministerial

statement informing the House of that decision. The means by which a

minister seeks to clarify a matter that is the subject of Parliamentary

interest is a matter for that minister. Sometimes a minister will

sense that the sail that the appetite of the House is such that a

statement, rather than simply an answer to a written question, might

be judicious. But that is a judgment for him or her to make, rather than

for the chair. I would also say to the honourable gentleman on the

subject of the closure of child poverty unit, as follows, I note

that the the honourable gentleman has a Westminster hall debate on

this matter this very afternoon to. Say the least therefore, it would be

surprising if he did not raise and ventilate fully his concern on this

and related matters on that occasion. The Point of order. Thank

you. On a point of orderers you have probably aware one of hi hobby

horses is the Government sneaking out statements in written terms and

not coming to the house. On 8th December, the Home Office announced

the extension of asylum accommodation contracts and the

minister said the government was committed to ensure destituted sigh

asylum seekers are in safe areas. Allowing siblings of the opposite

sex to share to the room to 16, allowing willing mothers to return

to share accommodation and allowing children up to 16 to share with

parents. Can I gently say to the honourable gentleman that I don't

think that the House requires the full details of the statement which

the honourable gentleman was clearly very keen to share with us. The mat

tore which matter to which the honourable gentleman allude is

person but it did not require to be rehearsed in the chamber today. That

is why it is not being aired today in the way that another matter has

been aired very fully today. What I would say there are various vehicles

open to him to pursue the issue and knowing the honourable gentleman as

I do, I feel certain that he possesses the ingenuity to use one

of other of those vehicles and which ill look with great interest to see

how he does so when he has had a brief break over Christmas. Many of

us who have been ministers know only too well that quasi-judicial

processes have to be carefully handled. I wonder if you could

assist us, here we had a statement from the Secretary of State on the

future Sky bid, but she refused to answer a range of other questions,

such as whether she had read an Ofcom report of 2012, which is

published and in the public domain. Surely that does not, refusing to

answer that question isn't because she is actually in a quasi-judicial

process, but because she didn't want to tell us whether she had read it

or not? I don't want to impute any particular motive to any member of

the House, including to this minister. What I would say to the

the honourable lady is I understand her, I was going to say frustration,

irritation on the matter. The Secretary of State has interpreted

her responsibility in the way she described to the House. Very

narrowly. Which she is entitled to do. And I think colleagues can make

on either side of the argument their own assessment of the way in which

the Secretary of State responded to the various inquiries that were put

to her. I feel sure that the House significantly number of the members

of House will want to return to this matter in the new year. We will

leave it there. For now. Prennation of bill Mr David Hanson. House of

Lords exclusion of her hereditary peers bill. Friday 24th March, 2017.

Thank you. We now come to... The ten minute rule motion. I say that with

a degree of interest, because it means the honourable gentleman has

only up to ten minutes in order to articulate his case which I feel he

will do with great eloquence. Thank you Mr Speaker for that hint. I beg

to move that leave be give on the bring in a bill to establish a rail

op mbudsman. And about the use of fine and for connected purposes and

how to do that within ten minutes given the shambles of GTR is a

wonder. But the GTR franchise notice work. Not withstanding the problems

with industrial action which have been aired in this House the system

for pursuing complaint and achieving financial or other redress is not

fit for purpose. My bill would apply to the whole UK rail network and not

intended as a silver bullet for southern should disincentivise the

come complacency when normally returns in the southern region. The

truth is that when things go wronging on the railways, train

companies can benefit. There is the schedule eight payments when

something goes wrong with the infrastructure, such as points

failures or the signal box failure at Penge in Reggie Perrin's day. But

the train companies are not required to pass on the compensation they

received to the passengers who suffer the inconvenience and loss.

It has been estimated that some 60% of compensation comes in this form

and it was calculated by the social market foundation that the train

operators raised ?107 million from network rail for delays and

passenger received just ?26 million of that meaning that the companies

profited by 81 million. The second form of compensation that is paid by

the train operators to the passenger where they are responsible for

delays. The problem is this depends on passenger lodging a claim that

can be bureaucratic and often rejected. The take up rate is low.

While events on southern have changed that, it is from a l base

and only 11% of passenger always or usually claim compensation. That has

increased to 45%, but bit is still a minority. Passenger do not claim the

operators benefit and on strike days when they have reduced salaries they

can actually profit as well. GTR's turn over is ?1.3 billion. One

billion comes from Government. The rail minister said that two million

has been levied in relation to cancellation. That is a total of

just 0.4% of turn over and hardly an incentive and that is before netting

off the payments to GTR to network rail and operators have different

schemes for compensating. Its hardly an incentive and with 46 million

journey cancelled or late I, it is a big problem. We need a more

effective awareness programme. There is no sign of that being done by the

trant operators -- train operators and the problem is the passenger can

like it or lump it. The complaint procedure relies on the good will of

the company if they accept the application at all. As the consumer

champion Which put it the landscape is inadequate with major gaps in

provision and the transport focus which handles some complaints has no

ability to impose binding decisions and no power to resolve complaint

and this is not an appropriate body to deliver a resolution. It is

extraordinary that there is no ombudsman system, this could and

should have been introduced at the same time as the consumer rights act

giving passenger the same legal protection when obtaining other

goods. What will my bill do? I know you're desperate to know. Over all

the compensation scheme, creating a much tougher financial impact on

train operating companies and a fairer and easier way of

compensating passenger with a more reliable reflection of the costs

they have suffered. . Every time a train is cancelled, a penalty final

will be paid into a central pot and before passenger claim. Passengers

can claim from the Bott pot in a much more simplified way and

passenger can down load an app, lodge a compensation claim where

appropriate and compensation will be paid without any paperwork. This app

goes live in January and by will reduce administration charges for

the train operators and the report gave a range of estimates for manual

processing between ?1.80 and ?39 per claim. I know the minister has

promised automated refunds, but that is still years away and is fraught

with problems. This technology is available now.

Any remaining funds will be used to offset fare rises, giving a further

payback to inconvenience and hassle. Whilst the new scheme is no silver

bullet, it would recalibrate the balance of power back to the

aggrieved passengers, and instil a sense of urgency to get problem

sorted. The second part of my bill would establish a new rail ombudsman

with real teeth and proper statutory powers. Based on practical proposals

discussed with the ombudsman and which have been endorsed by Which?

who said the Government must introduce a new ombudsman. They are

subsequently supporting this bill. It would be based on the energy

ombudsman model which is already in operation and it could be adapted,

also helping to clarify responsibility for passenger

problems. The introduction of an ombudsman would level the playing

field by establishing a strong independent second tier for address

and it would not only greatly enhance the level of redress but it

would help to improve confidence in the rail sector, something currently

sorely lacking in the southern region in particular. The rail

ombudsman would take up and resolve individual complaints and direct

compensation and oversee the operation of thresholds for the

penalty pot and it would need to afford compensation based on

realistic levels of actual loss suffered by passengers. Typically

passengers can claim just 25% of the cost of single fares and the

minister recently announced one month's compensation but it does not

go far when you're having to pay for nights staying in London or taxis

back at night when you find yourself stranded. It would also identify

frequent and common problems for individual operators.

whole and work with government to ombudsman would identify

the dynamics within the rail mitigate any impact before it causes

the dynamics within the rail industry when something goes wrong

and constituents lose out first, last and most. I appreciate above

all that most of our constituents are primarily concerned with being

able to use a reliable rail service to get them to work, school,

college, hospital appointments and home again at roughly the times they

anticipated. Compensation for an unreliable service is secondary.

They are not totally interested in apportioning blame, they just need a

service that works. I do not think these two things are mutually

exclusive. I believe the measures in my bill or long overdue and will

help to achieve both those objectives and I therefore commend

it to the house. The question is that the honourable member have

leave to bring in the bill. As many as are of the opinion, say "aye". To

the contrary, "no". I think that ayes have it. Who will prepare and

bring in the bill? Sir Nicholas Soames, Miss Harriet Harman, Maria

Corfield, Hugh Merriman, Chris felt, Henry Smith, Caroline Ansell,

Caroline Lucas and me, Sir. Tim Lawton. -- Loughton. The rail

ombudsman bill. Second reading? March the 24th, 2017. Thank you.

Order, we now come to the backbench debate on leasehold on commonhold

reform. To move the motion, I call Mr Jim Fitzpatrick. I beg to move

that the House considers leasehold and commonhold reform. I am grateful

to the business committee for accepting the bid from the

parliamentary group to hold this debate. I co-chaired the group with

houses joined since our inaugural the honourable gentleman. We

meeting only a short time ago. I meeting only a

This is a debate which is overdue. want to place on record thanks to

The front page of the library briefing for it makes the

fundamental point, it says, and I quote, despite a good deal of

legislative activity, dissatisfaction remains. I am sure

that many more colleagues would be here if it was not just before

Christmas. This issue affects millions of homeowners. From the

library briefing on the extent of leasehold ownership, it says,

technical paper published in 2014, producing a new estimate of 4.1

million leasehold dwellings in England in 2012-13. LK P estimated

there were around 5.37 million mis-sold properties at the end of

2013. The library paper went on to describe on hold. It said,

commonhold tenure is viewed as offering several advantages over the

leasehold system. It does not remove the obligation on residents to

contribute to management and maintenance and major works, but it

argues it is more transparent. It referred to the advantages of

commonhold. It says, it will address the problem of leasehold holders

being beholden to an absentee landlord who cannot be bothered to

carry out maintenance or who is more interested in trying to make a

profit at their expense. More on that later. Commonhold will remove

the problem of leasehold property being a wasted asset. Commonhold is

will have perpetual interest, effectively akin to a freehold, in

the individual unit. Standardised documents should be of general

benefit. In my constituency, as in many, there is a mix of leasehold

is, those who have bought former council properties under the right

to buy legislation, and perhaps second, third, fourth purchasers,

and those who have bought or new properties built in east London as

part of its regeneration or bought into converted rail houses and the

like transformed into homes. One constituency has the second-highest

number leasehold properties in England after Cities of London and

Westminster. There are common issues of both types of properties. I wish

to briefly run through some of these. I would like to mention the

length of leases, service charges, insurance fees, refurbishment costs,

recognition rights, ground rents and dispute resolution procedures. I

will not cover forfeiture, retirement homes, I have much less

familiarity with these and I know other colleagues intend to raise

them. Briefly on some of the issues I have mentioned, on the length of

leases, these vary from 99 to 999 years. Many people buy their homes

under leasehold believe they are purchasing the property. They are

not. They are releasing it. Some ground rents doubled every ten

years, mortgages can be more difficult to secure later in the

lease for resale. On service charges and the former public sector, there

have been improvements in recent years with more transparency of

costs and details to show reasonableness of charges.

Previously I've had constituents charged for lifts in blocks with no

lifts and garden that keeps when there are no gardens. There have

been improvements but there are still anomalies. The homeowners on

new housing estates, they are sold by developers subject to a

requirement for the owners to pay maintenance and service charges for

common areas on the estate. Freeholders in this situation are

unable to bring claims to the property Tribunal if they feel these

charges are reasonable and my wife and I own such a freehold property.

Also in the private sector, I have tried to help residents add two

large sites in my constituency, Canary riverside and West India key.

Both are controlled by a gentleman or a person called John under a

group. LKP have been involved. Both sites have tried to work

constructively with the managing agent of the landlord but have

suffered from poor management. Both had not had accounts for years

regardless of what the legislation might say is required. Only when the

site took its latest action through the tribunal process soup replaced

the landlords' agent did their accounts emerge. What the accounts

showed was far from a pretty picture. In the decision the

tribunal were highly critical of many aspects of the landlords'

management, including not having a professional, planned maintenance

programme in place and then having obtained one, failing to implement

it. Since the court's appointment in October this year, the landlords'

solicitor, David Marston, appears to have bombarded the new

court-appointed manager with a huge number of e-mails. 22 in October, 29

in November and 37 so far this month. It would strike me as very

important that when the landlords management are moved through fault,

to protect the manager from what is to protect the manager from what

little short of harassment. The little short of harassment. The

the manager has been ground down in personally and they say that

the manager has been ground down in an attempt to undermine the first

tribunal's decision... They could find themselves in a worse position

than if they had never taken the section 24 action, back under the

management of a landlord who knows the law does not reject them. The

manager is increasingly finding himself in an untenable position,

forced to spend more time dealing with the landlords' demands and

injunctions and resolving the estate management issues he was appointed

to work if the landlord agrees, even to work if the landlord agrees, even

if a decision is in equivocal Billy in the licensee's favour. They have

had three appeals fail. Taking every opportunity to apply the High Court

to chip away at the manager of's powers. On Friday, he obtained an

injunction that effectively granted him and his staff unfettered access

to the estate, and estate he no to the estate, and estate he no

longer managers. They spent two years securing the decision at a

considerable cost financially and in respect of the time and energy

needed to pursue legal action. It has been huge endeavour. It seems

the hearing was just the beginning of the legal battle. The landlords'

fees work ?335,000 for the hearing. Since then there have been three

appeals, judicial review pending and several High Court injunction

hearings. Legal fees could easily top half ?1 million and the

billionaire landlord knows the more legal resources he throws at it, the

more likely he is to win. Section 24, I say to the Minister, is not

fit for purpose and the residents will end up with over half ?1

million less and with nowhere else to turn. None of this impacts on the

value of the investment, the only people damaged by poor estate

management and hire service charges is the leaseholders. I would welcome

the Minister's comment. At the estate, Christmas Eve will mark a

new and dismal milestone, the 60th of accounts being overdue. -- the

sixth. They have had none since 2010. Over ten millions of -- over

?10 million of their cash is unaccounted for. I asked the

minister, how can this be allowed? There is no enforcement action for

the residents to try to make sure the property management agents

owners do some thing about it. These owners do some thing about

are examples of the problems faced are examples of the problems faced

by residents against powerful by residents against powerful

uncaring and unscrupulous landlords. The consumer organisation Which?

estimated that 2012, ?700 million was being overcharged in service

charges EGF. That was when everyone thought there were 2-2.5 million

leasehold homes. Given the size of the sector, as we know it now, it

suggests maybe ?1.4 billion is overcharged each year and this

cannot be right either. Insurance fees, freeholders in my constituency

were asked for ?78,000 for the insurance of their building of 32

flats. Several of them worked in the sector and they were sure ?15,000

would have been more appropriate. They settled after negotiation for

20 2000. On refurbishment costs, this mostly affects former council

blocks and leaseholders are almost at the mercy of counsellor Housing

associations, trying to secure detailed bills, assurances on the

quality of the work being undertaken, that has proved very

difficult and unreasonable, especially from public sector

organisations. Fortunately, this is changing but it is very slow. On

recognition rights, this is a source of much consternation, both that the

private and public sector. I have one group of residents who won the

first tier tribunal for recognition of their residents Association but

the social landlord is appealing against the ruling. There is an

in-built sense of reverse snobbery and prejudice against leaseholders

in the social housing sector. Recognition resistance features in

the private sector too. One case was from the first high

rise block on the isle of dogs, the free holder was ahasing them --

harassing them to frustrate their efforts to set up a residents'

sewings. Association. The cost of high powered barristers defending

free holders at tribunal is a disgrace. The procedures were

supposed to be relevatively informal. This has changed. My

honourable friend writes to me and says any lessee can expect to face a

barrister. A landlord is free to put his legal cost on the service charge

even against leasees who are not respondents. Where is the justice in

the system that favours billionaires protecting their profits against

ordinary working people trying to proexpect their homes? -- protect

their homes. Ground rights have been the subject of reports in the press.

I'm happy to give way. I congratulate my right honourable

friend on raising this topic. I should say since he raised the

point, I'm a barrister, although not in the landlord and tenant sector.

But would he agree many people entering these lease holds are

unaware that the landlords have powers to make huge increases in

ground rents and if this practice is deemed acceptable, tenants should

have clear information about what the landlords can do and what their

rights are and how they can challenge him. I'm grateful for the

honourable gentleman for raising the point. As has been evident in

meeting, the honourable gentleman from Worthing and I have had with

experts and individual constituents from across the country, many people

don't recognise the significance of this issue. Many lawyers don't

recognise the significance of the issue and people are keen to get

their hands on their first home on their new property and will take the

advice of lawyers who may not be conversant with what the implication

is and will sign the issue. What is good news to an extent is that after

the outcry in a number of the media reports, several of the large

developers have announced their policy of doubling ground rents

every ten years, which is the equivalent of 7% interest rates, is

untenable and announced they're returning to RPI and the honourable

gentleman I will call my my right honourable friend for the purpose of

this debate. But the campaigning charities and residents'

associations and others have had this success. But it is not across

the piece. Question is how do we protect everyone against the rogues

who won't do the right thing and prevent people from the abuse

they're subject to. I am grateful he has brought this subject up. My

calculation is if a quarter of a million pound house has a ?250

ground rent that doubles every year. Over the years they will paid for

that still to be 1% of value the house would have been to be

worthened 08 worth 80 million. The honourable gentleman emphasises the

absurdity and the abuse and it is something he has been campaigning

on. We have had some success. I think the opportunity is there to

drive this issue into reverse and to try to prevent that which should

have been peppercorn back into the realms where it should have been or

to abolish the procedure. The aims of all party group are simple.

Reduce the opportunities for exploitation, alleviate the distress

and hard ship of lease holders, to do away with the high cost of the

system and unearth and publicise scandalous behaviour of those

involved and examine insurance commissions and matters where lease

holders pay but are not party to the contract and to ensure the right to

manage legislation acts as intended. There have been measures of success

so far. The growth of all party group is one and well attended by

many professionals, the round tables which have been organised by LKP and

ourselves helped by someone from the honourable gentleman's office and we

have had significant media interest and interest from ministers and

shadow ministers and both the minister for housing and his shadow

are in their place today. We look forward to hearing from them. And

interest from senior civil servants whose interest we are grateful for

also. Because it demonstrates that this is a matter Government and the

opposition are take seriously and there is a recognition that

everything is not quite well there and it needs to be examined. Of

course we have debate today allowing us to raise the issue. Some matters

are easier to resolve than others and some will right legislation B us

the. But the industry is also trying to clean up the sector led by Dr

Nigel Glenn and a regulator to oversee procedures. Many decrepit

professional organisations have joined in and many others are decent

companies. But there are still too many bullies, cowboys and crooks in

the centre. We need not only better regulation and protect, we need

legislation. There are millions of citizens out there looking to their

politicians to remedy their distress and in conclusion, I return to my

original except from the library, despite a good deal of legislative

activity, dissatisfaction remains. This goes back to the nineties, both

Governments have tried to resolve it and have been unsuccessful. So in

some sense it is not a party political issue. Until Government

recognises the unfairness and dissatisfaction, many people are

condemned to suffer. Politically for me this is a vote winner for which

ever party pledges action and all parties should chl thank you. The

question is that the House has considered lease hold and common

hold reform. My My honourable friend Rehned to things going wrong on

purpose and sometimes by mistake. To avoid things going wrong by mistake

I would ask government, particularly the Ministry of Justice abandon the

opportunity of winning a forfe chur. The surplice value should go to the

lease holder. The case in Plantation wharf in batter Sea was one of the

worst where two elderly people applied to challenge management

costs of about ?9,000. The lease hold valuation tribunal agreed with

them in large part and struck off about ?7,000. Then there was

applications for costs. One of lease holders had read on the Government

web-site that the costs of going to tribunal was ?500. So assumed there

was nothing in this cost application. By inattention ended up

bouncing between various courts and ended up owing ?70,000 and the

forfeiture was granted and when the insurance company woke up at the

prompting of the lease hold partnership, to whom I pay tribute,

that the debt was settled and the man was able to go off to his new

home with the bulk of his equity with him. He should never have been

forced to pay anything, because if you win say ?5,000 or ?9,000, that

should be regarded as a win, not a score-draw. Has it happened in that

case, the free holder was not an avicious crook. It was the people

more used to commercial dealings and thought everyone could pay costs.

Any challenge is to even in the field, don't assume that other

people are as clever or as Wylie or as -- wily or a crooked as you are.

One crook is Martin Payne. Who has taken lease beyond the sleaze into

an art form. He earns a number of short leases. Where the person who

wants to sell them has to get an extension. And my understanding is

he has offered informal extensions, legally valid, the ground converts

to nothing His informal leases would contrain a provision of doubling the

ground rent every ten years, but written into the lease in such a way

that even experienced solicitors do not see it. The person discovers

their getting asked for ground rents that are high, because Martin Payne

has written the provision back to the first granting of the lease, not

the time of extension. You might have a flat worth ?150,000 being

asked for thousands a year in ground rent and the prospect of it going

up. When the lease holder complains, Payne's practice is to say to sue

your solicitor. The indemocrat nitty society should get together to see

if is in crookedness can be stopped. Mr Martin Payne will then buy back

the price at a low price and then remarket it with the same terms. To

do it once can be regarded as incompetence, to do it twice on the

same property I think deserves the word crooked. I would recommend to

every auctioneer to do what we had to do, to prompt one respectable

auction House, look at the lease. It turned out of course Mr Martin Payne

has not supplied the lease to the action ears, it was withdrawn. It

shouldn't be left to a pass member of Parliament to put this right. In

Worthing I own a lease hold flat. We had a good landlord. We had good

managing agents. We are now being succeeded by another good managing

agent. The free holders decides he is going to retire and suggested to

the six flat lease holders they may like to buy the free hold and we

did. We haven't had a problem all the way through and together we are

a good association and had our most recent meeting on Friday. That is

not the experience of others. Come now the latest manifestations of

things going wrong. And that is the house builders who during the last

20 years have come back to selling houses on lease hold terms. And I

have it by communication from one of the house builders, that the price

of selling, you can get for selling a house lease hold is within 1% of

selling it free hold. Some argue it is tradition in the

north-west and it is different. It should not be. Some say that when

you get away with something, others copy. There are no examples in North

London of builders producing roughly the same kinds of homes on either

side of the street, some freehold, some leasehold. If we come to an

example of a leasehold which has the doubling of ground rent provision

every ten years, the example which we shared early on comes in. I got

my maths wrong, doing it late at night. But to argue that an ordinary

home within 60 years that started at ?250,000, it needs to be worth ?80

million, doubling every years, going up by 7% a year, it is wrong. I

would say to those, the corporate responsibility experts who go to a

GMs, start raising this with the house-builders. The house-builders

Federation talk about how they think it is justifiable. They may say it

is a deal between the members, nothing to do with them. I say it

is. Seeing the Honourable lady on the opposite side, the people who

established and ran Cadburys with a sort of people who did not need

reminding by members of Parliament how to behave, they knew that in the

bones and blood and heart, you treat people properly. I own some shares

in person. -- Persimmon. If necessary, I will go to the AGM,

giving notice in advance, as to what they are going to do to unwind

problems created in the past. Some say they were not aware of what was

going on. They know now. The problem comes back to put things right, a

building firm, I am not particularly focusing on Taylor Wimpey and the

moment because they realise there are things to investigate, if the

builder sells the freehold, it stops them being able to treat the

leaseholders properly. Many leaseholders, when they bought the

flat or house, they did it through the solicitors who worked for the

seller, the builder. I think the solicitors will probably have

practice notes and letters pointing out the provisions of the ground

rent. That may or may not be so. I have not had evidence back from one

of the solicitors that I have asked, but I doubt that the attendance note

under letters point out that if you are to buy your freehold in the

first three years, you might be able to get it very cheaply, at a

multiple of ten times the ground rent. If you wait, and when that

first freeholder sold it to another one, and they then start saying,

actually, because interest rates have gone down, the value of the

ground rent has gone up, you have to buy it at the value of the ground

rent. I say to the Government, why don't you just agreed a

straightforward graph where you can read what the purchase price ought

to be for a freehold at various stages... I was going to give a long

section on Paul Dummett regression. That deals with this case where the

Wellcome trust interests managed to persuade a property tribunal to make

a change in the valuation of short leases. That is probably lifting the

apparent value, the cost of extending leases, by about 40%. It

is very good for the Wellcome trust to get good publicity for so they

will give ?1 billion to good causes, mostly medical research this year,

and I do not mind their chief investment person being paid ?3

million a year if they have lifted their capital value of their assets,

but if ?1 billion of those assets are the estate they bought from the

Henry Smith charity established to children and others, and they have

done it because they have managed to persuade two people, without a

public interest representatives being there, that the cost of

extension should go up so enormously, something is seriously

wrong. It will take people in government and advisers to work out

what it is. If there is an appeal, that case, I hope that Government

will associate themselves with the appeal and try to make sure that on

the regression, the calculation is go back to before 1993, because

after the 1993 act, values were affected and I think that James

Wyatt are more likely to be right and I hope the appeal succeeds and I

hope the Government make sure that if it does not succeed, the decision

in the case of Persimmon will be reversed by statute. I returned to

the smaller leaseholders. -- Mundy. If I was applying for an extension

or to buy my freehold as a smaller leaseholders, the cost the

freeholder has can be put back on the leaseholders, that is the point

made by my honourable friend for Limehouse. What about the cost to me

anyway? I have to go to surveyors, lawyers, I am new to this. I am

dealing with freeholders who do it multiple times a week, a year. They

are very experienced and they are often very rich. I think that if

government could bring in simple graph is for most cases, where

people say, where do I stand? What is the length of the lease, the

terms? By the way, there will be a cap to ground rents so you cannot go

monetising nose and making the leaseholder by them out on some

prospective multiple just because the reference rate is very low, the

apparent cost of buying at grand reps becomes very high dasher grey

ground rents. I apologise for interrupting -- ground rents. When

the procedure was originally designed, it was supposed to create

a relatively informal arrangement whereby residents could actually go

to the tribunal and argue their case and that has been completely

distorted by some of these unscrupulous freeholder landlords

bringing high-powered barristers and then charging fees to the residents,

whether they win or lose? More than that, it reminds me that the

Government have had a review of Leaseholder advisory service, and I

fear the decision to make it self-sustaining is wrong. It is

presently chaired by Roger, and I think he and his wife know quite a

bit about leasehold property, the predecessor chairman, and in his

time, they held conferences, fund raising conferences. The people who

would pay to come would listen to experts explaining how you can gain

extra income from the leaseholders. For example, someone stood up and

said, do you know, on insurance, which may be interesting to my

honourable friend from Plymouth, on insurance, the freeholder gets the

managing agent to arrange the insurance? It is paid for by the

leaseholders and the commission can stick with the freeholder end. If

the commission happen to be 40-50%, a leaseholder paying twice as much

as they should. What happens when the leaseholders want to get

together? This is a point of law for the Government to consider. I do not

think anyone would expect the Minister to answer all of the points

today. But early in the New Year, will want a proposed programme of

action which I think can then develop into reducing the abuse and

improving the happiness. I'm grateful. I commend him and

honourable friend for all of the work they have put into this

incredibly important subject. Given all of the complexity he is

describing, the scope for manipulation and exploitation, the

present pattern of leasehold tenure, is it not fit for purpose? Do we

need to move to a system which either has freehold been resident

controlled management companies or a form of commonhold working properly?

I am grateful. There are a number of issues which do not always come

together. The first is that commonhold was recommended by the

Law Commission 20, 30 years ago, Parliament and Government thought

they had made legal provision for it to come in and it did not work.

Within six years of the 2003 act, by 2009, we understand officials in the

Ministry of Justice and maybe ministers too, they knew it was not

working. Some who are not very knowledgeable say it cannot work.

Others who have been outside of the country know that no other country,

as far as I know, has kept the system which we developed 100, 200

years ago. In the old days, by the way, besides the flat in Worthing, I

have a home around the corner here which was built, I suppose, about

1720, 99 year lease, on the basis that in the 99 years, it would fall

down or be burnt down. People were not expecting houses to last

forever. I pay tribute to George Thomas, Lord Tony Pandy, in his

firebrand days, he campaigned to get leasehold reform and rent Acts in so

that people in South Wales could be saved from bad landlords and

freeholders. I have in my hand the debate on the 8th of March, 1991,

when the MP for Kensington paid tribute to his predecessor, one of

the early ones to start campaigning on leasehold, quite remarkable

contribution by Terry, the MP... Sorry, find the right page. Terry

Lewis, the MP who made reference to a number of the abuses which was

err-macro. A nonparty issue then as now. -- which was there. Nearly all

of those scandals apply now. Especially the shorter term leases.

If we take commonhold, it works perhaps on different titles in parts

of Australia, New South Wales particularly with strata Holdings,

they have come to our group and forums to talk about it. You will

not find the problems we have got in Canada or New Zealand or South

Africa. You will not find them in front or Germany. When you give

people interest in the flat... At the moment if you improve the

property, the value goes eventually to the freeholder. If you get rid of

the freeholder, you stop the abuse and you encourage people to invest

in things that matter to them. I strongly recommend that debate of

1991. I was going to go through it... What I will do is come to some

of the abuses. Benjamin, a woman surveyor and leasehold property

manager -- well-known, surveyor and leasehold property manager, he was

going to be removed, but when the investigation office had concluded

their investigation, he retired or resigned days before he would have

been dismissed. If he had not, the full report would have come out in

the open. As it happens, because he jumped before he was pushed, it is

not. He is not fit for judicial office, not fit to go on being a

registered member of the royal chartered institute of chartered

surveyors. The problem is that his clever lawyers and perhaps a display

of not enormous competence by the wall institute of chartered

surveyors -- the royal institute of chartered surveyors, they have left

it not fully at in the open. 35 cases where he or his company were

appearing at the property tribunal. Their failings by almost everyone

involved. The problem with the tribunal, they do not have power to

fine for repeat offences. If they did, he would have been

significantly. Everyone is entitled significantly. Everyone is entitled

to a fair hearing. I give an example of one case when the trust acted as

property manager, the landlords had scant regard for law and the respect

of the costs of interior decorations, how can a

self-regulation system that does not consider such court findings retain

the confidence of the general public? The Government has argued

for years there is no need for statutory regulation but can anyone

name a group supporting their position? Even the main managing

agents trade body has been asking the government to regulate this

sector. Leasehold is the only part of the housing market where an

unregulated person can hold huge amount of funds and has no

obligation to act in the interests of the leaseholder. I go back to

remind the House that when the freeholder appoints the managing

agent, who is the management agent working for? The freeholder. I would

say to Government ministers, please establish a legal position so that

the leaseholder has an interest in everything that happens done with

the money and in the block where they are in the least. In this

report, the most recent one I have seen is 2013, there are references

to soft income. We still have too many examples of landlords sometimes

who even own their own agents skimming on huge insurance

commission reported by the Financial Conduct Authority 's as recently as

two years ago, they say, and it backs up what I said earlier, it is

not uncommon for commission of 40% to be charged.

This can result in bad services and high costs. My honourable friend may

remain the hosts about whether there was that link between the freeholder

and the managing agent in Plymouth. I cannot distinguish between one

brother and the other or between them and the trusts. I'm going to

talk about interests so they can pick up whether they are affected.

There are two areas where I criticise them. One was really

controlled property managing agents who owned the business called

Cirrus, as in the cloud, when they are a large number of freehold

blocks were said to have needed the system replaced, there would be a

competition between very big firms and Little minnows.

Neither the police nor at the authority nor the Serious Fraud

Office managed to get together at the same time to work out how to

deal with this rip-off of millions of pounds. When they discovered the

game was up it was discovered they'd been involved in cartel bidding. We

know that if you're the first to declare you've been involved in a

cartel UART penalty free. The fact is the size of them was such as...

We leave the coverage of the House of Commons. We are about to go over

to the liaison committee with Prime Minister Theresa May.