:00:00. > :00:00.services they provide will change as more people want to be treated at
:00:00. > :00:13.home. Thank you. Order. Urgent question. Mr Ed Miliband. To ask the
:00:14. > :00:20.Secretary of state to make a statement on the time table and
:00:21. > :00:26.approach of Government to 21st Century Fox's bid to take over Sky
:00:27. > :00:35.and whether it plans to refer the bid to the competition authority. As
:00:36. > :00:41.members know, Sky PLC announced on Friday 9th December it had received
:00:42. > :00:46.an approach from 21st Century Fox to acquire the 61% of shares which it
:00:47. > :00:50.does not already own. The minister for culture made a statement on 12th
:00:51. > :00:56.December about the proposed bid and the process that would need to be
:00:57. > :01:00.followed. I recognise that this is an issue of significant interest to
:01:01. > :01:04.the public and had raised interest in Parliament as well as being a
:01:05. > :01:12.significant issue for the parties concerned. It is very important that
:01:13. > :01:19.I make clear the role I will play in this process is a quasi-judicial
:01:20. > :01:24.one. I'm able to intervene in certain media mergers on public
:01:25. > :01:29.interest grounds, as set out under the enterprise Act. Government
:01:30. > :01:34.guidance under that act gives an indication of how the intervention
:01:35. > :01:39.regime will operate in practice and the approach I will aim to take. The
:01:40. > :01:47.most important concern is that the integrity of the process is uphold.
:01:48. > :01:52.The guidance makes clear I will aim to take an initial decision within
:01:53. > :01:58.ten working days of formal notification of the merge r to the
:01:59. > :02:04.competition authority No such formal notify xags has been made. --
:02:05. > :02:10.notification has been made. Unless and until it is made, I will not be
:02:11. > :02:13.taking any decision in relation to the bid. It is for the parties to
:02:14. > :02:28.inform the competition authorities. It is that point that I will need to
:02:29. > :02:32.consider whether any of the public interests mentioned merit an
:02:33. > :02:37.intervention. It is important I can act independent and the process is
:02:38. > :02:40.fair. Given that it would be inappropriate to comment further on
:02:41. > :02:46.this bid at this point, in order that the integrity of the process is
:02:47. > :02:52.protected and that everyone's interests are treated fairly. What I
:02:53. > :02:55.can say is I understand the significant public and Parliamentary
:02:56. > :03:00.interest there is in this and I do not for a minute underestimate that.
:03:01. > :03:04.This is also clearly a significant issue for the parties to the bid. It
:03:05. > :03:09.is therefore crucial that the integrity of the process is
:03:10. > :03:14.protected. I will not be making any further comment on the process or
:03:15. > :03:18.the merits of bid today. But can I confirm that this matter is being
:03:19. > :03:22.treated with the utmost seriously and should the parties formally
:03:23. > :03:27.notify the bid to the relevant competition authorities that I will
:03:28. > :03:34.act in line with the relevant legislation, guidance and in line
:03:35. > :03:41.with the quasi-judicial principles. Can I thank the Secretary of State
:03:42. > :03:45.for her reply, the urgency is that we are going into recess until
:03:46. > :03:50.January and the bid maybe notified to Government at any time. It is
:03:51. > :03:57.important Nat House understands the reality that even in launching this
:03:58. > :04:00.bid the Murdoches are seeking to turn the judgement of this House,
:04:01. > :04:09.the regulator and the country on its head. In 2011 this House urged the
:04:10. > :04:15.withdrawal of the bid for Sky and in 2012 Ofcom publishing a damning
:04:16. > :04:21.indictment of James Murdoch running News International. That only just
:04:22. > :04:28.stopped short of saying Sky were unfit to hold a lie lens, because
:04:29. > :04:36.the Murdoches were not a major holder. Today James Murdoch is back
:04:37. > :04:39.as chairman of Sky and Chief Executive of 21st Century Fox. It
:04:40. > :04:45.shows the Murdoches think they can get awhich with anything. Way with
:04:46. > :04:54.anything. It was wrong for them to own Sky in 2012, it is wrong today.
:04:55. > :04:58.We have seen convictions of seen your employees for phone hacking and
:04:59. > :05:09.taking the payments. We are still yet to have part two of Leveson
:05:10. > :05:14.which was accept was supposed to look at the corporate manage of News
:05:15. > :05:19.International. Because this Government is seeking to ditch part
:05:20. > :05:24.two of Leveson. We said never again would we allow the Murdoches to
:05:25. > :05:31.wield unfetterred power, yet here we are all over again. So can I ask the
:05:32. > :05:35.Secretary of State has she read the Ofcom report into James Murdoch and
:05:36. > :05:39.what she thought of its contents. Can she tell us how this bid can
:05:40. > :05:45.even be considered to be in the realm of reality when part two of
:05:46. > :05:50.Leveson specifically tasked with looking at News International has
:05:51. > :05:55.not taken place and thirdly, can she hear the message that if this house
:05:56. > :06:01.were to return in January to find the waving through of this bid it
:06:02. > :06:06.will be totally unacceptable and fly in the express will of this House
:06:07. > :06:09.and the country. Can she assure this will not happen. On the steps of
:06:10. > :06:13.Downing Street the Prime Minister said she would stand up to the
:06:14. > :06:22.powerful. If ever there was a chance to prove it, it is today.
:06:23. > :06:29.I do not for one second underestimate the huge public and
:06:30. > :06:33.parliamentary interest in this proposed merger. As well as the
:06:34. > :06:40.importance of this issue to the parties concerned. But the important
:06:41. > :06:43.thing is that I must ensure, given my quasi judicial role, that I
:06:44. > :06:53.protect the integrity of the process and ensure that as and when, if a
:06:54. > :06:57.formal notification is given, it is properly considered. I will make no
:06:58. > :07:03.further comments on the merit of the bid at this stage. Will my right
:07:04. > :07:06.honourable friend bear in mind that contrary to the assertion of the
:07:07. > :07:12.right honourable gentleman opposite the Guardian, the sky's share of the
:07:13. > :07:16.television news market is 5% rather than 10% and while there may well be
:07:17. > :07:19.a case for asking the regulator to look at this bid, will she also
:07:20. > :07:24.recognise this represents a ?12 billion investment into a British
:07:25. > :07:29.company and is a vote of confidence that Britain will remain a centre of
:07:30. > :07:35.international broadcasting after Britain leaves the European Union?
:07:36. > :07:41.My right honourable friend has significant interest in this area,
:07:42. > :07:43.having been an exceptionally good predecessor for me. He will
:07:44. > :07:52.understand the position I am in. I cannot comment. We have seen this
:07:53. > :07:56.bid before. I know it is Christmas and a time for TV repeats, but this
:07:57. > :08:03.was not a hit the first time round and it is no more popular now. More
:08:04. > :08:12.than 135,000 people have already signed an online petition calling
:08:13. > :08:20.for this bid to be referred to Ofcom. Their concerns are the same
:08:21. > :08:23.as those which caused the previous as those which caused the previous
:08:24. > :08:23.bid to be abandoned in 2011. Does the Secretary of State to
:08:24. > :08:24.it would be outrageous if this bid it would be outrageous if
:08:25. > :08:27.were pushed through the Christmas holidays when Parliament is not
:08:28. > :08:33.sitting? Is she not even slightly embarrassed that on the one hand
:08:34. > :08:39.shears currently consulting on shelve part two of the Leveson
:08:40. > :08:43.Inquiry which would look at improper or unlawful conduct in parts of the
:08:44. > :08:46.Murdoch empire? And she is also being asked to rule on whether the
:08:47. > :08:52.umpire should be expanded. Last week the Minister told the house
:08:53. > :08:56.categorically that the Prime Minister had not discussed this bid
:08:57. > :09:00.at a recent New York meeting with Rupert Murdoch. Will the Secretary
:09:01. > :09:05.of State repeat that insurance? How does she know? Can she tell us what
:09:06. > :09:08.was discussed customer Levenson recommended those meetings should be
:09:09. > :09:14.limited ashlar clap discussed? Yesterday Rupert Murdoch wrote the
:09:15. > :09:18.Guardian deflate, I have made it a principle all my life never to ask
:09:19. > :09:28.for anything from any Prime Minister. -- the Guardian. We will
:09:29. > :09:33.just pause to take that in. You will recall John Major's testimony to the
:09:34. > :09:37.Leveson Inquiry in which he recalled Rupert Murdoch asking him to change
:09:38. > :09:41.his party's policy on Europe. Warning that, if we could not change
:09:42. > :09:45.the European policies, his papers could not and would not support the
:09:46. > :09:52.Conservative government. Does the Secretary of State believe Rupert
:09:53. > :09:54.Murdoch or the former Conservative Prime Minister estimate what
:09:55. > :09:57.implications does the contradiction between them have for the
:09:58. > :10:02.application of the fit and proper person test? -- former Conservative
:10:03. > :10:08.Prime Minister? I will repeat I cannot comment on the merits of the
:10:09. > :10:12.bid. As and when a formal notification is made, there will be
:10:13. > :10:18.ten days for me to make decision as to whether to refer the proposed
:10:19. > :10:24.merger. The honourable gentleman talked about the Leveson process and
:10:25. > :10:30.I want to remind him we have opened an open public consultation on the
:10:31. > :10:34.Leveson process. I hope he has responded. I am sure he has. At the
:10:35. > :10:37.end of that consultation, I will look at the responses in a separate
:10:38. > :10:41.matter. He has asked specifically about the meeting the Prime Minister
:10:42. > :10:47.held in September. She had a prearranged meeting with Wall Street
:10:48. > :10:55.journal editors. Mr Murdoch dropped in and I can assure him that the
:10:56. > :10:57.proposed takeover was not discussed. Who do you believe? I am not sure
:10:58. > :11:04.the company controlled by Rupert Murdoch trying to buy another
:11:05. > :11:05.company largely controlled by Rupert Murdoch is of the great public
:11:06. > :11:14.interest that the step could try of interest that the step
:11:15. > :11:15.the seems to think it is. -- the the seems to think it is. --
:11:16. > :11:15.is. It is about the party opposite Secretary of State seems to think
:11:16. > :11:19.is. It is about the party opposite not liking Rupert Murdoch. If it was
:11:20. > :11:24.Richard Branson they would not be saying a word. Can I ask her to
:11:25. > :11:29.ignore the siren voices opposite and not treat it with the great
:11:30. > :11:34.importance they think it should be treated with? The BBC controlled
:11:35. > :11:37.huge amounts of TV news output, local and radio news, and we do not
:11:38. > :11:43.hear a peep out of the opposition about that. My honourable friend has
:11:44. > :11:47.strong views on these matters. I will just repeat that I will not be
:11:48. > :11:51.making any comments on the merits or otherwise of the bid. When this
:11:52. > :11:56.matter was last discussed, the Minister said that the plurality
:11:57. > :11:59.rules were clearly set out and that the Secretary of State would follow
:12:00. > :12:05.them very carefully if she was required to make a determination.
:12:06. > :12:09.Now the bid has been agreed, although no formal notification has
:12:10. > :12:14.been given, can the Minister throw some light on the process? Does the
:12:15. > :12:21.separation of the Murdoch print and broadcast interests change the
:12:22. > :12:24.Government's view of plurality compared the last bit? How much
:12:25. > :12:31.weight will the Secretary of State give to the separation when
:12:32. > :12:35.considering whether or not public interest intervention notice should
:12:36. > :12:40.be issued? -- the last bid. No formal notification has been made at
:12:41. > :12:48.this stage and I will be making no comment on the merits of the bid or
:12:49. > :12:53.otherwise. Thank you. May I note a hereditary interest in relation to
:12:54. > :12:59.the forces of the great Rupert Murdoch? I commend my right
:13:00. > :13:03.honourable friend for her proper evenhandedness in dealing with this
:13:04. > :13:10.matter and her correct responses. May I also note that we have seen
:13:11. > :13:16.the true voice of socialist envy that Sky has provided thanks to
:13:17. > :13:22.Rupert Murdoch who risked his whole business on it in about 1990,
:13:23. > :13:27.incredible choice to millions of people? It is amazingly popular.
:13:28. > :13:31.Instead of decrying this wonderful achievement, we should be proud it
:13:32. > :13:35.happened in Britain and proud this huge investment is potentially
:13:36. > :13:38.coming into our nation and I hope my right honourable friend will bear
:13:39. > :13:45.this in mind and will not fall tempted by the siren voices of
:13:46. > :13:49.socialist ingrates. I note my honourable friend's comments but as
:13:50. > :13:59.I repeat, I will not be making any comments on the merits or otherwise
:14:00. > :14:03.of the bid. Thank you, Mr Speaker. The Secretary of State is quite
:14:04. > :14:10.properly saying she is not going to comment on the decision itself, but
:14:11. > :14:11.some of the questions put to her some of the questions put to
:14:12. > :14:16.today. She should not hide behind today. She should not hide behind
:14:17. > :14:20.it. Can I ask her again? How she it. Can I ask her again? How she
:14:21. > :14:26.read the 2012 Ofcom report on the conduct of James Murdoch? Yes or no?
:14:27. > :14:29.I am sorry to disappoint the right honourable lady but I will not be
:14:30. > :14:36.making any comments on the process or merits otherwise. Disgrace.
:14:37. > :14:43.Making a mockery of Parliament. Disgrace! The Minister is at pains
:14:44. > :14:49.to tell us what she cannot do and we respect that, of course. But can she
:14:50. > :14:54.tell us, can she give us an assurance that she will use her
:14:55. > :14:58.office to ensure there is a proper plurality of ownership of the media
:14:59. > :15:05.in this country and that the views of this house, which have been very
:15:06. > :15:10.clearly and frequently expressed, that they will also be respected at
:15:11. > :15:15.the end of this process? Mr Speaker, I fully appreciate the level of
:15:16. > :15:21.interest in this House in this matter. I am sure this House will
:15:22. > :15:26.continue to debate these issues and it is absolutely right it should do
:15:27. > :15:29.so. But it is equally important, and the right honourable gentleman has
:15:30. > :15:32.made the point, that I discharge my functions in line with the
:15:33. > :15:41.legislation and in accordance with my quasi judicial role. Isn't it
:15:42. > :15:47.likely that Mr Murdoch in fact has a point when he said, quoted earlier
:15:48. > :15:50.from the front bench, I have never asked anything from any Prime
:15:51. > :15:56.Minister? Why should he? He knows what a Tory government -- repertory
:15:57. > :16:00.government knows what he wants and usually gives it to him without any
:16:01. > :16:06.difficulty whatsoever -- the Tory government. It would not be
:16:07. > :16:08.appropriate for me to comment on the relationships prime ministers over
:16:09. > :16:16.the years have had with members of the press of all parties. The
:16:17. > :16:21.secretary of State has made it very clear that she does not feel able to
:16:22. > :16:25.comment on the content of this decision because it is a quasi
:16:26. > :16:31.judicial decision, but does she show my anxiety that the timing is all in
:16:32. > :16:36.the hands of Murdoch? She has a responsible at it to respond within
:16:37. > :16:40.ten days. It might not be an accident that he has chosen not to
:16:41. > :16:43.notify the bid at the moment in order to ensure that Parliament
:16:44. > :16:51.cannot take a decision before she has to. What is she going to do
:16:52. > :16:55.about that, now or in the future? At the moment, there is no decision to
:16:56. > :16:58.take. This decision will be taken by me ask the Secretary of State and I
:16:59. > :17:02.would like to reassure the right honourable lady I will not be taking
:17:03. > :17:08.a break over Christmas, whether there is a formal notification or
:17:09. > :17:14.otherwise. The member for North East Somerset could not have struck a
:17:15. > :17:23.more wrong note with his remarks. Nobody on this side of the House
:17:24. > :17:27.feels any envy for the family of Milly Dowler or any other victims of
:17:28. > :17:31.phone hacking. The Secretary of State cannot tell us what she is
:17:32. > :17:37.going to do. But what may be relevant for the fit and proper
:17:38. > :17:43.person test is the findings of Leveson part two. When she came to
:17:44. > :17:48.this House and she announced that she was going to do a consultation
:17:49. > :17:53.on it, rather than just go ahead straightforwardly, did she have any
:17:54. > :17:59.inkling that this takeover bid was going to be made? Mr Speaker, the
:18:00. > :18:02.first I knew about the takeover bid was the same as everyone off in the
:18:03. > :18:09.House, when it was announced in the press. -- everyone else. Given the
:18:10. > :18:14.concerns raised about the timing, and the fact that it could well be
:18:15. > :18:17.that the quasi judicial role that the Secretary of State will have to
:18:18. > :18:20.undertake will be in the recess, if she could not answer questions about
:18:21. > :18:28.what she has previously read today, will she ensure that when she does
:18:29. > :18:31.take a decision on which you will be questioned in this House, she will
:18:32. > :18:36.be able to answer that she did read all of that relevant material and an
:18:37. > :18:39.understanding of Parliamentary and public interest, does she accept
:18:40. > :18:44.that most of it goes to those points that are in the public interest
:18:45. > :18:50.grounds in the legislation? I can assure the honourable gentleman that
:18:51. > :18:53.I will fill the role I have exactly in line with the legislation and I
:18:54. > :19:00.will of course be answerable to Parliament for the decisions I take.
:19:01. > :19:06.I know there is no point asking the culture secretary to give a view on
:19:07. > :19:11.the bid, but can I express to herd the views of more than 100
:19:12. > :19:15.constituents who have e-mailed me in recent days expressing very clearly
:19:16. > :19:18.what they think about the bid? Can she undertake that she will come
:19:19. > :19:25.back to this House on the 9th of January to give us an update? I hear
:19:26. > :19:30.the honourable lady's comments about her constituents' concerns and I
:19:31. > :19:37.will update the house when there is anything to say on the matter. When
:19:38. > :19:41.the original bid was abandoned in 2011, the former Prime Minister said
:19:42. > :19:44.it was the right thing to do for the country. Does the Secretary of State
:19:45. > :19:47.disagree with the former Prime Minister and think the time is now
:19:48. > :19:54.right question of if not, will she please refer it to Ofcom. I cannot
:19:55. > :19:58.answer that question at this stage. I have a quasi judicial role in this
:19:59. > :20:01.process. I know the honourable lady has a legal background and will
:20:02. > :20:08.understand that. I simply cannot make comment at this stage. I know
:20:09. > :20:12.this question will not be answered but I am asking it just the same! A
:20:13. > :20:17.substantial number of my constituents have contacted me over
:20:18. > :20:21.the last week regarding this bid and they are all of the same opinion,
:20:22. > :20:30.that Mr Murdoch has too much of an influence over our media. They would
:20:31. > :20:40.like the bid to be referred to Ofcom for that reason. She agreed that any
:20:41. > :20:46.takeover should be postponed until the Leveson Inquiry part two takes
:20:47. > :20:50.place? I cannot comment on the merits of the bid or the process.
:20:51. > :20:54.With reference to the question asked by my honourable friend about the
:20:55. > :20:57.quote of the former promise the David Cameron, that the withdrawal
:20:58. > :21:00.of the decision was the right one, what assessment has she made about
:21:01. > :21:06.what might have changed between then and now? I will be making no
:21:07. > :21:10.comments on any assessments I have made at any time. I will be going
:21:11. > :21:13.through a full process in line with the legislation. I need to ensure
:21:14. > :21:24.the integrity of that process for all concerned. We are all concerned
:21:25. > :21:32.that next year the leader of the free world will be a Blunt brained
:21:33. > :21:45.snake oil salesman who was elected by a prostituted press to food truth
:21:46. > :21:48.is... In order to prove that she will bear in mind the very strong
:21:49. > :21:56.views that we may need to maintain, those qualities of balance and
:21:57. > :22:00.fairness that we have imposed on the BBC by statute is maintained in this
:22:01. > :22:07.country, will she bear in mind the grave danger of a prostituted press?
:22:08. > :22:15.I do not think anyone is in doubt of the honourable gentleman's views.
:22:16. > :22:33.Grateful for the honourable gentleman for his sedentary chunter.
:22:34. > :22:40.Is it the minister's intention to ensure a free press. I have specific
:22:41. > :22:45.roles set out and I will fulfil that role with the utmost integrity. My
:22:46. > :22:50.constituency have contacted me in relation to their concerns about the
:22:51. > :22:54.bid, in particular the threat to the value diversity of our press. Will
:22:55. > :22:59.she commit to addressing this point when she comes back to the House in
:23:00. > :23:09.the first week back after recess and I'm sure will she confirm if she has
:23:10. > :23:13.not read the 2012 Ofcom report on James Murdoch that she will have
:23:14. > :23:18.done by the time she comes back. I can assure the House I will update
:23:19. > :23:23.the House as and when decisions are taken and I do understand the utmost
:23:24. > :23:30.interest there is in this matter, but it is a quasi-judicial role and
:23:31. > :23:40.I cannot make any further comment at this stage. Order. Point of order.
:23:41. > :23:45.On a different matter in response to a parliamentary reon staffing of
:23:46. > :23:50.child poverty -- Parliamentary question on staffing of the child
:23:51. > :23:53.poverty unit. The minister said responsibility for policy and
:23:54. > :23:58.analysis has been transferred to the department for work and pensions.
:23:59. > :24:04.Given the significance of that decision to abolish the child
:24:05. > :24:08.poverty unit, can I seek your guidance toss ance as too whether it
:24:09. > :24:13.could not have been more appropriate to make a written ministerial
:24:14. > :24:20.statement informing the House of that decision. The means by which a
:24:21. > :24:24.minister seeks to clarify a matter that is the subject of Parliamentary
:24:25. > :24:33.interest is a matter for that minister. Sometimes a minister will
:24:34. > :24:38.sense that the sail that the appetite of the House is such that a
:24:39. > :24:44.statement, rather than simply an answer to a written question, might
:24:45. > :24:51.be judicious. But that is a judgment for him or her to make, rather than
:24:52. > :24:56.for the chair. I would also say to the honourable gentleman on the
:24:57. > :24:59.subject of the closure of child poverty unit, as follows, I note
:25:00. > :25:07.that the the honourable gentleman has a Westminster hall debate on
:25:08. > :25:13.this matter this very afternoon to. Say the least therefore, it would be
:25:14. > :25:18.surprising if he did not raise and ventilate fully his concern on this
:25:19. > :25:33.and related matters on that occasion. The Point of order. Thank
:25:34. > :25:38.you. On a point of orderers you have probably aware one of hi hobby
:25:39. > :25:42.horses is the Government sneaking out statements in written terms and
:25:43. > :25:48.not coming to the house. On 8th December, the Home Office announced
:25:49. > :25:51.the extension of asylum accommodation contracts and the
:25:52. > :26:11.minister said the government was committed to ensure destituted sigh
:26:12. > :26:17.asylum seekers are in safe areas. Allowing siblings of the opposite
:26:18. > :26:21.sex to share to the room to 16, allowing willing mothers to return
:26:22. > :26:27.to share accommodation and allowing children up to 16 to share with
:26:28. > :26:29.parents. Can I gently say to the honourable gentleman that I don't
:26:30. > :26:35.think that the House requires the full details of the statement which
:26:36. > :26:40.the honourable gentleman was clearly very keen to share with us. The mat
:26:41. > :26:50.tore which matter to which the honourable gentleman allude is
:26:51. > :26:53.person but it did not require to be rehearsed in the chamber today. That
:26:54. > :27:01.is why it is not being aired today in the way that another matter has
:27:02. > :27:07.been aired very fully today. What I would say there are various vehicles
:27:08. > :27:13.open to him to pursue the issue and knowing the honourable gentleman as
:27:14. > :27:20.I do, I feel certain that he possesses the ingenuity to use one
:27:21. > :27:26.of other of those vehicles and which ill look with great interest to see
:27:27. > :27:32.how he does so when he has had a brief break over Christmas. Many of
:27:33. > :27:37.us who have been ministers know only too well that quasi-judicial
:27:38. > :27:43.processes have to be carefully handled. I wonder if you could
:27:44. > :27:49.assist us, here we had a statement from the Secretary of State on the
:27:50. > :27:53.future Sky bid, but she refused to answer a range of other questions,
:27:54. > :27:58.such as whether she had read an Ofcom report of 2012, which is
:27:59. > :28:02.published and in the public domain. Surely that does not, refusing to
:28:03. > :28:06.answer that question isn't because she is actually in a quasi-judicial
:28:07. > :28:13.process, but because she didn't want to tell us whether she had read it
:28:14. > :28:17.or not? I don't want to impute any particular motive to any member of
:28:18. > :28:23.the House, including to this minister. What I would say to the
:28:24. > :28:30.the honourable lady is I understand her, I was going to say frustration,
:28:31. > :28:34.irritation on the matter. The Secretary of State has interpreted
:28:35. > :28:38.her responsibility in the way she described to the House. Very
:28:39. > :28:44.narrowly. Which she is entitled to do. And I think colleagues can make
:28:45. > :28:50.on either side of the argument their own assessment of the way in which
:28:51. > :29:00.the Secretary of State responded to the various inquiries that were put
:29:01. > :29:03.to her. I feel sure that the House significantly number of the members
:29:04. > :29:15.of House will want to return to this matter in the new year. We will
:29:16. > :29:27.leave it there. For now. Prennation of bill Mr David Hanson. House of
:29:28. > :29:37.Lords exclusion of her hereditary peers bill. Friday 24th March, 2017.
:29:38. > :29:41.Thank you. We now come to... The ten minute rule motion. I say that with
:29:42. > :29:46.a degree of interest, because it means the honourable gentleman has
:29:47. > :29:54.only up to ten minutes in order to articulate his case which I feel he
:29:55. > :30:00.will do with great eloquence. Thank you Mr Speaker for that hint. I beg
:30:01. > :30:10.to move that leave be give on the bring in a bill to establish a rail
:30:11. > :30:15.op mbudsman. And about the use of fine and for connected purposes and
:30:16. > :30:23.how to do that within ten minutes given the shambles of GTR is a
:30:24. > :30:28.wonder. But the GTR franchise notice work. Not withstanding the problems
:30:29. > :30:32.with industrial action which have been aired in this House the system
:30:33. > :30:37.for pursuing complaint and achieving financial or other redress is not
:30:38. > :30:49.fit for purpose. My bill would apply to the whole UK rail network and not
:30:50. > :30:57.intended as a silver bullet for southern should disincentivise the
:30:58. > :31:02.come complacency when normally returns in the southern region. The
:31:03. > :31:10.truth is that when things go wronging on the railways, train
:31:11. > :31:13.companies can benefit. There is the schedule eight payments when
:31:14. > :31:24.something goes wrong with the infrastructure, such as points
:31:25. > :31:31.failures or the signal box failure at Penge in Reggie Perrin's day. But
:31:32. > :31:36.the train companies are not required to pass on the compensation they
:31:37. > :31:40.received to the passengers who suffer the inconvenience and loss.
:31:41. > :31:44.It has been estimated that some 60% of compensation comes in this form
:31:45. > :31:49.and it was calculated by the social market foundation that the train
:31:50. > :31:53.operators raised ?107 million from network rail for delays and
:31:54. > :31:59.passenger received just ?26 million of that meaning that the companies
:32:00. > :32:07.profited by 81 million. The second form of compensation that is paid by
:32:08. > :32:11.the train operators to the passenger where they are responsible for
:32:12. > :32:16.delays. The problem is this depends on passenger lodging a claim that
:32:17. > :32:22.can be bureaucratic and often rejected. The take up rate is low.
:32:23. > :32:30.While events on southern have changed that, it is from a l base
:32:31. > :32:35.and only 11% of passenger always or usually claim compensation. That has
:32:36. > :32:40.increased to 45%, but bit is still a minority. Passenger do not claim the
:32:41. > :32:48.operators benefit and on strike days when they have reduced salaries they
:32:49. > :32:57.can actually profit as well. GTR's turn over is ?1.3 billion. One
:32:58. > :33:07.billion comes from Government. The rail minister said that two million
:33:08. > :33:15.has been levied in relation to cancellation. That is a total of
:33:16. > :33:21.just 0.4% of turn over and hardly an incentive and that is before netting
:33:22. > :33:30.off the payments to GTR to network rail and operators have different
:33:31. > :33:39.schemes for compensating. Its hardly an incentive and with 46 million
:33:40. > :33:44.journey cancelled or late I, it is a big problem. We need a more
:33:45. > :33:49.effective awareness programme. There is no sign of that being done by the
:33:50. > :33:56.trant operators -- train operators and the problem is the passenger can
:33:57. > :33:59.like it or lump it. The complaint procedure relies on the good will of
:34:00. > :34:07.the company if they accept the application at all. As the consumer
:34:08. > :34:16.champion Which put it the landscape is inadequate with major gaps in
:34:17. > :34:20.provision and the transport focus which handles some complaints has no
:34:21. > :34:27.ability to impose binding decisions and no power to resolve complaint
:34:28. > :34:35.and this is not an appropriate body to deliver a resolution. It is
:34:36. > :34:39.extraordinary that there is no ombudsman system, this could and
:34:40. > :34:48.should have been introduced at the same time as the consumer rights act
:34:49. > :34:57.giving passenger the same legal protection when obtaining other
:34:58. > :35:02.goods. What will my bill do? I know you're desperate to know. Over all
:35:03. > :35:05.the compensation scheme, creating a much tougher financial impact on
:35:06. > :35:10.train operating companies and a fairer and easier way of
:35:11. > :35:18.compensating passenger with a more reliable reflection of the costs
:35:19. > :35:25.they have suffered. . Every time a train is cancelled, a penalty final
:35:26. > :35:33.will be paid into a central pot and before passenger claim. Passengers
:35:34. > :35:38.can claim from the Bott pot in a much more simplified way and
:35:39. > :35:43.passenger can down load an app, lodge a compensation claim where
:35:44. > :35:52.appropriate and compensation will be paid without any paperwork. This app
:35:53. > :35:56.goes live in January and by will reduce administration charges for
:35:57. > :36:03.the train operators and the report gave a range of estimates for manual
:36:04. > :36:09.processing between ?1.80 and ?39 per claim. I know the minister has
:36:10. > :36:13.promised automated refunds, but that is still years away and is fraught
:36:14. > :36:21.with problems. This technology is available now.
:36:22. > :36:30.Any remaining funds will be used to offset fare rises, giving a further
:36:31. > :36:32.payback to inconvenience and hassle. Whilst the new scheme is no silver
:36:33. > :36:41.bullet, it would recalibrate the balance of power back to the
:36:42. > :36:44.aggrieved passengers, and instil a sense of urgency to get problem
:36:45. > :36:50.sorted. The second part of my bill would establish a new rail ombudsman
:36:51. > :36:53.with real teeth and proper statutory powers. Based on practical proposals
:36:54. > :37:01.discussed with the ombudsman and which have been endorsed by Which?
:37:02. > :37:08.who said the Government must introduce a new ombudsman. They are
:37:09. > :37:12.subsequently supporting this bill. It would be based on the energy
:37:13. > :37:16.ombudsman model which is already in operation and it could be adapted,
:37:17. > :37:20.also helping to clarify responsibility for passenger
:37:21. > :37:26.problems. The introduction of an ombudsman would level the playing
:37:27. > :37:29.field by establishing a strong independent second tier for address
:37:30. > :37:34.and it would not only greatly enhance the level of redress but it
:37:35. > :37:37.would help to improve confidence in the rail sector, something currently
:37:38. > :37:41.sorely lacking in the southern region in particular. The rail
:37:42. > :37:44.ombudsman would take up and resolve individual complaints and direct
:37:45. > :37:47.compensation and oversee the operation of thresholds for the
:37:48. > :37:50.penalty pot and it would need to afford compensation based on
:37:51. > :37:58.realistic levels of actual loss suffered by passengers. Typically
:37:59. > :38:05.passengers can claim just 25% of the cost of single fares and the
:38:06. > :38:09.minister recently announced one month's compensation but it does not
:38:10. > :38:14.go far when you're having to pay for nights staying in London or taxis
:38:15. > :38:47.back at night when you find yourself stranded. It would also identify
:38:48. > :38:47.frequent and common problems for individual operators.
:38:48. > :38:50.whole and work with government to ombudsman would identify
:38:51. > :38:51.the dynamics within the rail mitigate any impact before it causes
:38:52. > :38:53.the dynamics within the rail industry when something goes wrong
:38:54. > :38:57.and constituents lose out first, last and most. I appreciate above
:38:58. > :39:02.all that most of our constituents are primarily concerned with being
:39:03. > :39:05.able to use a reliable rail service to get them to work, school,
:39:06. > :39:10.college, hospital appointments and home again at roughly the times they
:39:11. > :39:16.anticipated. Compensation for an unreliable service is secondary.
:39:17. > :39:21.They are not totally interested in apportioning blame, they just need a
:39:22. > :39:24.service that works. I do not think these two things are mutually
:39:25. > :39:30.exclusive. I believe the measures in my bill or long overdue and will
:39:31. > :39:38.help to achieve both those objectives and I therefore commend
:39:39. > :39:42.it to the house. The question is that the honourable member have
:39:43. > :39:45.leave to bring in the bill. As many as are of the opinion, say "aye". To
:39:46. > :39:52.the contrary, "no". I think that ayes have it. Who will prepare and
:39:53. > :40:01.bring in the bill? Sir Nicholas Soames, Miss Harriet Harman, Maria
:40:02. > :40:03.Corfield, Hugh Merriman, Chris felt, Henry Smith, Caroline Ansell,
:40:04. > :40:40.Caroline Lucas and me, Sir. Tim Lawton. -- Loughton. The rail
:40:41. > :40:51.ombudsman bill. Second reading? March the 24th, 2017. Thank you.
:40:52. > :40:55.Order, we now come to the backbench debate on leasehold on commonhold
:40:56. > :41:02.reform. To move the motion, I call Mr Jim Fitzpatrick. I beg to move
:41:03. > :41:05.that the House considers leasehold and commonhold reform. I am grateful
:41:06. > :41:09.to the business committee for accepting the bid from the
:41:10. > :41:27.parliamentary group to hold this debate. I co-chaired the group with
:41:28. > :41:43.houses joined since our inaugural the honourable gentleman. We
:41:44. > :41:44.meeting only a short time ago. I meeting only a
:41:45. > :41:44.This is a debate which is overdue. want to place on record thanks to
:41:45. > :41:49.The front page of the library briefing for it makes the
:41:50. > :41:52.fundamental point, it says, and I quote, despite a good deal of
:41:53. > :41:58.legislative activity, dissatisfaction remains. I am sure
:41:59. > :42:03.that many more colleagues would be here if it was not just before
:42:04. > :42:07.Christmas. This issue affects millions of homeowners. From the
:42:08. > :42:13.library briefing on the extent of leasehold ownership, it says,
:42:14. > :42:20.technical paper published in 2014, producing a new estimate of 4.1
:42:21. > :42:24.million leasehold dwellings in England in 2012-13. LK P estimated
:42:25. > :42:31.there were around 5.37 million mis-sold properties at the end of
:42:32. > :42:36.2013. The library paper went on to describe on hold. It said,
:42:37. > :42:40.commonhold tenure is viewed as offering several advantages over the
:42:41. > :42:43.leasehold system. It does not remove the obligation on residents to
:42:44. > :42:49.contribute to management and maintenance and major works, but it
:42:50. > :42:52.argues it is more transparent. It referred to the advantages of
:42:53. > :42:59.commonhold. It says, it will address the problem of leasehold holders
:43:00. > :43:02.being beholden to an absentee landlord who cannot be bothered to
:43:03. > :43:07.carry out maintenance or who is more interested in trying to make a
:43:08. > :43:10.profit at their expense. More on that later. Commonhold will remove
:43:11. > :43:15.the problem of leasehold property being a wasted asset. Commonhold is
:43:16. > :43:19.will have perpetual interest, effectively akin to a freehold, in
:43:20. > :43:25.the individual unit. Standardised documents should be of general
:43:26. > :43:29.benefit. In my constituency, as in many, there is a mix of leasehold
:43:30. > :43:33.is, those who have bought former council properties under the right
:43:34. > :43:38.to buy legislation, and perhaps second, third, fourth purchasers,
:43:39. > :43:42.and those who have bought or new properties built in east London as
:43:43. > :43:49.part of its regeneration or bought into converted rail houses and the
:43:50. > :43:53.like transformed into homes. One constituency has the second-highest
:43:54. > :43:57.number leasehold properties in England after Cities of London and
:43:58. > :44:03.Westminster. There are common issues of both types of properties. I wish
:44:04. > :44:09.to briefly run through some of these. I would like to mention the
:44:10. > :44:13.length of leases, service charges, insurance fees, refurbishment costs,
:44:14. > :44:18.recognition rights, ground rents and dispute resolution procedures. I
:44:19. > :44:23.will not cover forfeiture, retirement homes, I have much less
:44:24. > :44:26.familiarity with these and I know other colleagues intend to raise
:44:27. > :44:32.them. Briefly on some of the issues I have mentioned, on the length of
:44:33. > :44:37.leases, these vary from 99 to 999 years. Many people buy their homes
:44:38. > :44:41.under leasehold believe they are purchasing the property. They are
:44:42. > :44:46.not. They are releasing it. Some ground rents doubled every ten
:44:47. > :44:52.years, mortgages can be more difficult to secure later in the
:44:53. > :44:55.lease for resale. On service charges and the former public sector, there
:44:56. > :45:00.have been improvements in recent years with more transparency of
:45:01. > :45:03.costs and details to show reasonableness of charges.
:45:04. > :45:07.Previously I've had constituents charged for lifts in blocks with no
:45:08. > :45:10.lifts and garden that keeps when there are no gardens. There have
:45:11. > :45:18.been improvements but there are still anomalies. The homeowners on
:45:19. > :45:21.new housing estates, they are sold by developers subject to a
:45:22. > :45:24.requirement for the owners to pay maintenance and service charges for
:45:25. > :45:29.common areas on the estate. Freeholders in this situation are
:45:30. > :45:33.unable to bring claims to the property Tribunal if they feel these
:45:34. > :45:39.charges are reasonable and my wife and I own such a freehold property.
:45:40. > :45:43.Also in the private sector, I have tried to help residents add two
:45:44. > :45:47.large sites in my constituency, Canary riverside and West India key.
:45:48. > :45:57.Both are controlled by a gentleman or a person called John under a
:45:58. > :46:01.group. LKP have been involved. Both sites have tried to work
:46:02. > :46:04.constructively with the managing agent of the landlord but have
:46:05. > :46:08.suffered from poor management. Both had not had accounts for years
:46:09. > :46:13.regardless of what the legislation might say is required. Only when the
:46:14. > :46:20.site took its latest action through the tribunal process soup replaced
:46:21. > :46:22.the landlords' agent did their accounts emerge. What the accounts
:46:23. > :46:26.showed was far from a pretty picture. In the decision the
:46:27. > :46:32.tribunal were highly critical of many aspects of the landlords'
:46:33. > :46:34.management, including not having a professional, planned maintenance
:46:35. > :46:40.programme in place and then having obtained one, failing to implement
:46:41. > :46:45.it. Since the court's appointment in October this year, the landlords'
:46:46. > :46:51.solicitor, David Marston, appears to have bombarded the new
:46:52. > :46:56.court-appointed manager with a huge number of e-mails. 22 in October, 29
:46:57. > :47:01.in November and 37 so far this month. It would strike me as very
:47:02. > :47:07.important that when the landlords management are moved through fault,
:47:08. > :47:13.to protect the manager from what is to protect the manager from what
:47:14. > :47:17.little short of harassment. The little short of harassment. The
:47:18. > :47:25.the manager has been ground down in personally and they say that
:47:26. > :47:33.the manager has been ground down in an attempt to undermine the first
:47:34. > :47:37.tribunal's decision... They could find themselves in a worse position
:47:38. > :47:41.than if they had never taken the section 24 action, back under the
:47:42. > :47:49.management of a landlord who knows the law does not reject them. The
:47:50. > :47:52.manager is increasingly finding himself in an untenable position,
:47:53. > :47:57.forced to spend more time dealing with the landlords' demands and
:47:58. > :48:02.injunctions and resolving the estate management issues he was appointed
:48:03. > :48:06.to work if the landlord agrees, even to work if the landlord agrees, even
:48:07. > :48:19.if a decision is in equivocal Billy in the licensee's favour. They have
:48:20. > :48:23.had three appeals fail. Taking every opportunity to apply the High Court
:48:24. > :48:27.to chip away at the manager of's powers. On Friday, he obtained an
:48:28. > :48:30.injunction that effectively granted him and his staff unfettered access
:48:31. > :48:38.to the estate, and estate he no to the estate, and estate he no
:48:39. > :48:44.longer managers. They spent two years securing the decision at a
:48:45. > :48:48.considerable cost financially and in respect of the time and energy
:48:49. > :48:52.needed to pursue legal action. It has been huge endeavour. It seems
:48:53. > :48:58.the hearing was just the beginning of the legal battle. The landlords'
:48:59. > :49:02.fees work ?335,000 for the hearing. Since then there have been three
:49:03. > :49:06.appeals, judicial review pending and several High Court injunction
:49:07. > :49:11.hearings. Legal fees could easily top half ?1 million and the
:49:12. > :49:15.billionaire landlord knows the more legal resources he throws at it, the
:49:16. > :49:19.more likely he is to win. Section 24, I say to the Minister, is not
:49:20. > :49:24.fit for purpose and the residents will end up with over half ?1
:49:25. > :49:28.million less and with nowhere else to turn. None of this impacts on the
:49:29. > :49:33.value of the investment, the only people damaged by poor estate
:49:34. > :49:38.management and hire service charges is the leaseholders. I would welcome
:49:39. > :49:45.the Minister's comment. At the estate, Christmas Eve will mark a
:49:46. > :49:49.new and dismal milestone, the 60th of accounts being overdue. -- the
:49:50. > :49:58.sixth. They have had none since 2010. Over ten millions of -- over
:49:59. > :50:01.?10 million of their cash is unaccounted for. I asked the
:50:02. > :50:06.minister, how can this be allowed? There is no enforcement action for
:50:07. > :50:12.the residents to try to make sure the property management agents
:50:13. > :50:13.owners do some thing about it. These owners do some thing about
:50:14. > :50:21.are examples of the problems faced are examples of the problems faced
:50:22. > :50:22.by residents against powerful by residents against powerful
:50:23. > :50:25.uncaring and unscrupulous landlords. The consumer organisation Which?
:50:26. > :50:29.estimated that 2012, ?700 million was being overcharged in service
:50:30. > :50:35.charges EGF. That was when everyone thought there were 2-2.5 million
:50:36. > :50:42.leasehold homes. Given the size of the sector, as we know it now, it
:50:43. > :50:45.suggests maybe ?1.4 billion is overcharged each year and this
:50:46. > :50:52.cannot be right either. Insurance fees, freeholders in my constituency
:50:53. > :50:56.were asked for ?78,000 for the insurance of their building of 32
:50:57. > :51:00.flats. Several of them worked in the sector and they were sure ?15,000
:51:01. > :51:05.would have been more appropriate. They settled after negotiation for
:51:06. > :51:09.20 2000. On refurbishment costs, this mostly affects former council
:51:10. > :51:12.blocks and leaseholders are almost at the mercy of counsellor Housing
:51:13. > :51:20.associations, trying to secure detailed bills, assurances on the
:51:21. > :51:24.quality of the work being undertaken, that has proved very
:51:25. > :51:28.difficult and unreasonable, especially from public sector
:51:29. > :51:33.organisations. Fortunately, this is changing but it is very slow. On
:51:34. > :51:36.recognition rights, this is a source of much consternation, both that the
:51:37. > :51:42.private and public sector. I have one group of residents who won the
:51:43. > :51:48.first tier tribunal for recognition of their residents Association but
:51:49. > :51:51.the social landlord is appealing against the ruling. There is an
:51:52. > :51:57.in-built sense of reverse snobbery and prejudice against leaseholders
:51:58. > :51:58.in the social housing sector. Recognition resistance features in
:51:59. > :52:12.the private sector too. One case was from the first high
:52:13. > :52:18.rise block on the isle of dogs, the free holder was ahasing them --
:52:19. > :52:26.harassing them to frustrate their efforts to set up a residents'
:52:27. > :52:30.sewings. Association. The cost of high powered barristers defending
:52:31. > :52:37.free holders at tribunal is a disgrace. The procedures were
:52:38. > :52:48.supposed to be relevatively informal. This has changed. My
:52:49. > :52:58.honourable friend writes to me and says any lessee can expect to face a
:52:59. > :53:06.barrister. A landlord is free to put his legal cost on the service charge
:53:07. > :53:12.even against leasees who are not respondents. Where is the justice in
:53:13. > :53:15.the system that favours billionaires protecting their profits against
:53:16. > :53:22.ordinary working people trying to proexpect their homes? -- protect
:53:23. > :53:29.their homes. Ground rights have been the subject of reports in the press.
:53:30. > :53:35.I'm happy to give way. I congratulate my right honourable
:53:36. > :53:39.friend on raising this topic. I should say since he raised the
:53:40. > :53:44.point, I'm a barrister, although not in the landlord and tenant sector.
:53:45. > :53:49.But would he agree many people entering these lease holds are
:53:50. > :53:57.unaware that the landlords have powers to make huge increases in
:53:58. > :54:00.ground rents and if this practice is deemed acceptable, tenants should
:54:01. > :54:04.have clear information about what the landlords can do and what their
:54:05. > :54:08.rights are and how they can challenge him. I'm grateful for the
:54:09. > :54:13.honourable gentleman for raising the point. As has been evident in
:54:14. > :54:19.meeting, the honourable gentleman from Worthing and I have had with
:54:20. > :54:23.experts and individual constituents from across the country, many people
:54:24. > :54:27.don't recognise the significance of this issue. Many lawyers don't
:54:28. > :54:31.recognise the significance of the issue and people are keen to get
:54:32. > :54:37.their hands on their first home on their new property and will take the
:54:38. > :54:41.advice of lawyers who may not be conversant with what the implication
:54:42. > :54:48.is and will sign the issue. What is good news to an extent is that after
:54:49. > :54:52.the outcry in a number of the media reports, several of the large
:54:53. > :54:58.developers have announced their policy of doubling ground rents
:54:59. > :55:04.every ten years, which is the equivalent of 7% interest rates, is
:55:05. > :55:12.untenable and announced they're returning to RPI and the honourable
:55:13. > :55:16.gentleman I will call my my right honourable friend for the purpose of
:55:17. > :55:21.this debate. But the campaigning charities and residents'
:55:22. > :55:29.associations and others have had this success. But it is not across
:55:30. > :55:34.the piece. Question is how do we protect everyone against the rogues
:55:35. > :55:39.who won't do the right thing and prevent people from the abuse
:55:40. > :55:44.they're subject to. I am grateful he has brought this subject up. My
:55:45. > :55:54.calculation is if a quarter of a million pound house has a ?250
:55:55. > :56:00.ground rent that doubles every year. Over the years they will paid for
:56:01. > :56:10.that still to be 1% of value the house would have been to be
:56:11. > :56:15.worthened 08 worth 80 million. The honourable gentleman emphasises the
:56:16. > :56:19.absurdity and the abuse and it is something he has been campaigning
:56:20. > :56:25.on. We have had some success. I think the opportunity is there to
:56:26. > :56:37.drive this issue into reverse and to try to prevent that which should
:56:38. > :56:41.have been peppercorn back into the realms where it should have been or
:56:42. > :56:46.to abolish the procedure. The aims of all party group are simple.
:56:47. > :56:54.Reduce the opportunities for exploitation, alleviate the distress
:56:55. > :57:03.and hard ship of lease holders, to do away with the high cost of the
:57:04. > :57:07.system and unearth and publicise scandalous behaviour of those
:57:08. > :57:10.involved and examine insurance commissions and matters where lease
:57:11. > :57:16.holders pay but are not party to the contract and to ensure the right to
:57:17. > :57:22.manage legislation acts as intended. There have been measures of success
:57:23. > :57:27.so far. The growth of all party group is one and well attended by
:57:28. > :57:37.many professionals, the round tables which have been organised by LKP and
:57:38. > :57:40.ourselves helped by someone from the honourable gentleman's office and we
:57:41. > :57:43.have had significant media interest and interest from ministers and
:57:44. > :57:46.shadow ministers and both the minister for housing and his shadow
:57:47. > :57:54.are in their place today. We look forward to hearing from them. And
:57:55. > :57:57.interest from senior civil servants whose interest we are grateful for
:57:58. > :58:02.also. Because it demonstrates that this is a matter Government and the
:58:03. > :58:05.opposition are take seriously and there is a recognition that
:58:06. > :58:11.everything is not quite well there and it needs to be examined. Of
:58:12. > :58:18.course we have debate today allowing us to raise the issue. Some matters
:58:19. > :58:25.are easier to resolve than others and some will right legislation B us
:58:26. > :58:39.the. But the industry is also trying to clean up the sector led by Dr
:58:40. > :58:45.Nigel Glenn and a regulator to oversee procedures. Many decrepit
:58:46. > :58:51.professional organisations have joined in and many others are decent
:58:52. > :59:00.companies. But there are still too many bullies, cowboys and crooks in
:59:01. > :59:04.the centre. We need not only better regulation and protect, we need
:59:05. > :59:12.legislation. There are millions of citizens out there looking to their
:59:13. > :59:16.politicians to remedy their distress and in conclusion, I return to my
:59:17. > :59:22.original except from the library, despite a good deal of legislative
:59:23. > :59:31.activity, dissatisfaction remains. This goes back to the nineties, both
:59:32. > :59:35.Governments have tried to resolve it and have been unsuccessful. So in
:59:36. > :59:42.some sense it is not a party political issue. Until Government
:59:43. > :59:44.recognises the unfairness and dissatisfaction, many people are
:59:45. > :59:50.condemned to suffer. Politically for me this is a vote winner for which
:59:51. > :59:55.ever party pledges action and all parties should chl thank you. The
:59:56. > :00:05.question is that the House has considered lease hold and common
:00:06. > :00:09.hold reform. My My honourable friend Rehned to things going wrong on
:00:10. > :00:16.purpose and sometimes by mistake. To avoid things going wrong by mistake
:00:17. > :00:29.I would ask government, particularly the Ministry of Justice abandon the
:00:30. > :00:36.opportunity of winning a forfe chur. The surplice value should go to the
:00:37. > :00:40.lease holder. The case in Plantation wharf in batter Sea was one of the
:00:41. > :00:47.worst where two elderly people applied to challenge management
:00:48. > :00:52.costs of about ?9,000. The lease hold valuation tribunal agreed with
:00:53. > :00:58.them in large part and struck off about ?7,000. Then there was
:00:59. > :01:02.applications for costs. One of lease holders had read on the Government
:01:03. > :01:06.web-site that the costs of going to tribunal was ?500. So assumed there
:01:07. > :01:18.was nothing in this cost application. By inattention ended up
:01:19. > :01:29.bouncing between various courts and ended up owing ?70,000 and the
:01:30. > :01:35.forfeiture was granted and when the insurance company woke up at the
:01:36. > :01:41.prompting of the lease hold partnership, to whom I pay tribute,
:01:42. > :01:46.that the debt was settled and the man was able to go off to his new
:01:47. > :01:52.home with the bulk of his equity with him. He should never have been
:01:53. > :01:58.forced to pay anything, because if you win say ?5,000 or ?9,000, that
:01:59. > :02:04.should be regarded as a win, not a score-draw. Has it happened in that
:02:05. > :02:12.case, the free holder was not an avicious crook. It was the people
:02:13. > :02:16.more used to commercial dealings and thought everyone could pay costs.
:02:17. > :02:21.Any challenge is to even in the field, don't assume that other
:02:22. > :02:34.people are as clever or as Wylie or as -- wily or a crooked as you are.
:02:35. > :02:41.One crook is Martin Payne. Who has taken lease beyond the sleaze into
:02:42. > :02:45.an art form. He earns a number of short leases. Where the person who
:02:46. > :02:53.wants to sell them has to get an extension. And my understanding is
:02:54. > :02:59.he has offered informal extensions, legally valid, the ground converts
:03:00. > :03:03.to nothing His informal leases would contrain a provision of doubling the
:03:04. > :03:11.ground rent every ten years, but written into the lease in such a way
:03:12. > :03:20.that even experienced solicitors do not see it. The person discovers
:03:21. > :03:24.their getting asked for ground rents that are high, because Martin Payne
:03:25. > :03:29.has written the provision back to the first granting of the lease, not
:03:30. > :03:33.the time of extension. You might have a flat worth ?150,000 being
:03:34. > :03:43.asked for thousands a year in ground rent and the prospect of it going
:03:44. > :03:56.up. When the lease holder complains, Payne's practice is to say to sue
:03:57. > :04:04.your solicitor. The indemocrat nitty society should get together to see
:04:05. > :04:09.if is in crookedness can be stopped. Mr Martin Payne will then buy back
:04:10. > :04:15.the price at a low price and then remarket it with the same terms. To
:04:16. > :04:19.do it once can be regarded as incompetence, to do it twice on the
:04:20. > :04:26.same property I think deserves the word crooked. I would recommend to
:04:27. > :04:30.every auctioneer to do what we had to do, to prompt one respectable
:04:31. > :04:37.auction House, look at the lease. It turned out of course Mr Martin Payne
:04:38. > :04:52.has not supplied the lease to the action ears, it was withdrawn. It
:04:53. > :05:01.shouldn't be left to a pass member of Parliament to put this right. In
:05:02. > :05:06.Worthing I own a lease hold flat. We had a good landlord. We had good
:05:07. > :05:10.managing agents. We are now being succeeded by another good managing
:05:11. > :05:16.agent. The free holders decides he is going to retire and suggested to
:05:17. > :05:21.the six flat lease holders they may like to buy the free hold and we
:05:22. > :05:25.did. We haven't had a problem all the way through and together we are
:05:26. > :05:34.a good association and had our most recent meeting on Friday. That is
:05:35. > :05:39.not the experience of others. Come now the latest manifestations of
:05:40. > :05:43.things going wrong. And that is the house builders who during the last
:05:44. > :05:49.20 years have come back to selling houses on lease hold terms. And I
:05:50. > :05:52.have it by communication from one of the house builders, that the price
:05:53. > :05:56.of selling, you can get for selling a house lease hold is within 1% of
:05:57. > :06:07.selling it free hold. Some argue it is tradition in the
:06:08. > :06:11.north-west and it is different. It should not be. Some say that when
:06:12. > :06:16.you get away with something, others copy. There are no examples in North
:06:17. > :06:20.London of builders producing roughly the same kinds of homes on either
:06:21. > :06:27.side of the street, some freehold, some leasehold. If we come to an
:06:28. > :06:30.example of a leasehold which has the doubling of ground rent provision
:06:31. > :06:37.every ten years, the example which we shared early on comes in. I got
:06:38. > :06:47.my maths wrong, doing it late at night. But to argue that an ordinary
:06:48. > :06:56.home within 60 years that started at ?250,000, it needs to be worth ?80
:06:57. > :07:04.million, doubling every years, going up by 7% a year, it is wrong. I
:07:05. > :07:08.would say to those, the corporate responsibility experts who go to a
:07:09. > :07:13.GMs, start raising this with the house-builders. The house-builders
:07:14. > :07:18.Federation talk about how they think it is justifiable. They may say it
:07:19. > :07:22.is a deal between the members, nothing to do with them. I say it
:07:23. > :07:32.is. Seeing the Honourable lady on the opposite side, the people who
:07:33. > :07:36.established and ran Cadburys with a sort of people who did not need
:07:37. > :07:41.reminding by members of Parliament how to behave, they knew that in the
:07:42. > :07:51.bones and blood and heart, you treat people properly. I own some shares
:07:52. > :07:55.in person. -- Persimmon. If necessary, I will go to the AGM,
:07:56. > :08:00.giving notice in advance, as to what they are going to do to unwind
:08:01. > :08:08.problems created in the past. Some say they were not aware of what was
:08:09. > :08:20.going on. They know now. The problem comes back to put things right, a
:08:21. > :08:24.building firm, I am not particularly focusing on Taylor Wimpey and the
:08:25. > :08:27.moment because they realise there are things to investigate, if the
:08:28. > :08:32.builder sells the freehold, it stops them being able to treat the
:08:33. > :08:36.leaseholders properly. Many leaseholders, when they bought the
:08:37. > :08:43.flat or house, they did it through the solicitors who worked for the
:08:44. > :08:47.seller, the builder. I think the solicitors will probably have
:08:48. > :08:54.practice notes and letters pointing out the provisions of the ground
:08:55. > :08:57.rent. That may or may not be so. I have not had evidence back from one
:08:58. > :09:04.of the solicitors that I have asked, but I doubt that the attendance note
:09:05. > :09:10.under letters point out that if you are to buy your freehold in the
:09:11. > :09:13.first three years, you might be able to get it very cheaply, at a
:09:14. > :09:21.multiple of ten times the ground rent. If you wait, and when that
:09:22. > :09:26.first freeholder sold it to another one, and they then start saying,
:09:27. > :09:29.actually, because interest rates have gone down, the value of the
:09:30. > :09:33.ground rent has gone up, you have to buy it at the value of the ground
:09:34. > :09:38.rent. I say to the Government, why don't you just agreed a
:09:39. > :09:43.straightforward graph where you can read what the purchase price ought
:09:44. > :09:49.to be for a freehold at various stages... I was going to give a long
:09:50. > :10:06.section on Paul Dummett regression. That deals with this case where the
:10:07. > :10:11.Wellcome trust interests managed to persuade a property tribunal to make
:10:12. > :10:18.a change in the valuation of short leases. That is probably lifting the
:10:19. > :10:23.apparent value, the cost of extending leases, by about 40%. It
:10:24. > :10:28.is very good for the Wellcome trust to get good publicity for so they
:10:29. > :10:31.will give ?1 billion to good causes, mostly medical research this year,
:10:32. > :10:35.and I do not mind their chief investment person being paid ?3
:10:36. > :10:41.million a year if they have lifted their capital value of their assets,
:10:42. > :10:47.but if ?1 billion of those assets are the estate they bought from the
:10:48. > :10:53.Henry Smith charity established to children and others, and they have
:10:54. > :10:58.done it because they have managed to persuade two people, without a
:10:59. > :11:02.public interest representatives being there, that the cost of
:11:03. > :11:07.extension should go up so enormously, something is seriously
:11:08. > :11:12.wrong. It will take people in government and advisers to work out
:11:13. > :11:16.what it is. If there is an appeal, that case, I hope that Government
:11:17. > :11:20.will associate themselves with the appeal and try to make sure that on
:11:21. > :11:25.the regression, the calculation is go back to before 1993, because
:11:26. > :11:32.after the 1993 act, values were affected and I think that James
:11:33. > :11:36.Wyatt are more likely to be right and I hope the appeal succeeds and I
:11:37. > :11:43.hope the Government make sure that if it does not succeed, the decision
:11:44. > :11:48.in the case of Persimmon will be reversed by statute. I returned to
:11:49. > :11:52.the smaller leaseholders. -- Mundy. If I was applying for an extension
:11:53. > :11:58.or to buy my freehold as a smaller leaseholders, the cost the
:11:59. > :12:00.freeholder has can be put back on the leaseholders, that is the point
:12:01. > :12:06.made by my honourable friend for Limehouse. What about the cost to me
:12:07. > :12:11.anyway? I have to go to surveyors, lawyers, I am new to this. I am
:12:12. > :12:17.dealing with freeholders who do it multiple times a week, a year. They
:12:18. > :12:23.are very experienced and they are often very rich. I think that if
:12:24. > :12:27.government could bring in simple graph is for most cases, where
:12:28. > :12:31.people say, where do I stand? What is the length of the lease, the
:12:32. > :12:35.terms? By the way, there will be a cap to ground rents so you cannot go
:12:36. > :12:38.monetising nose and making the leaseholder by them out on some
:12:39. > :12:44.prospective multiple just because the reference rate is very low, the
:12:45. > :12:50.apparent cost of buying at grand reps becomes very high dasher grey
:12:51. > :12:58.ground rents. I apologise for interrupting -- ground rents. When
:12:59. > :13:03.the procedure was originally designed, it was supposed to create
:13:04. > :13:07.a relatively informal arrangement whereby residents could actually go
:13:08. > :13:09.to the tribunal and argue their case and that has been completely
:13:10. > :13:14.distorted by some of these unscrupulous freeholder landlords
:13:15. > :13:22.bringing high-powered barristers and then charging fees to the residents,
:13:23. > :13:29.whether they win or lose? More than that, it reminds me that the
:13:30. > :13:36.Government have had a review of Leaseholder advisory service, and I
:13:37. > :13:44.fear the decision to make it self-sustaining is wrong. It is
:13:45. > :13:47.presently chaired by Roger, and I think he and his wife know quite a
:13:48. > :13:57.bit about leasehold property, the predecessor chairman, and in his
:13:58. > :14:04.time, they held conferences, fund raising conferences. The people who
:14:05. > :14:09.would pay to come would listen to experts explaining how you can gain
:14:10. > :14:14.extra income from the leaseholders. For example, someone stood up and
:14:15. > :14:20.said, do you know, on insurance, which may be interesting to my
:14:21. > :14:25.honourable friend from Plymouth, on insurance, the freeholder gets the
:14:26. > :14:32.managing agent to arrange the insurance? It is paid for by the
:14:33. > :14:38.leaseholders and the commission can stick with the freeholder end. If
:14:39. > :14:45.the commission happen to be 40-50%, a leaseholder paying twice as much
:14:46. > :14:49.as they should. What happens when the leaseholders want to get
:14:50. > :14:56.together? This is a point of law for the Government to consider. I do not
:14:57. > :15:00.think anyone would expect the Minister to answer all of the points
:15:01. > :15:03.today. But early in the New Year, will want a proposed programme of
:15:04. > :15:09.action which I think can then develop into reducing the abuse and
:15:10. > :15:13.improving the happiness. I'm grateful. I commend him and
:15:14. > :15:17.honourable friend for all of the work they have put into this
:15:18. > :15:21.incredibly important subject. Given all of the complexity he is
:15:22. > :15:29.describing, the scope for manipulation and exploitation, the
:15:30. > :15:33.present pattern of leasehold tenure, is it not fit for purpose? Do we
:15:34. > :15:40.need to move to a system which either has freehold been resident
:15:41. > :15:47.controlled management companies or a form of commonhold working properly?
:15:48. > :15:52.I am grateful. There are a number of issues which do not always come
:15:53. > :15:57.together. The first is that commonhold was recommended by the
:15:58. > :16:01.Law Commission 20, 30 years ago, Parliament and Government thought
:16:02. > :16:08.they had made legal provision for it to come in and it did not work.
:16:09. > :16:10.Within six years of the 2003 act, by 2009, we understand officials in the
:16:11. > :16:14.Ministry of Justice and maybe ministers too, they knew it was not
:16:15. > :16:19.working. Some who are not very knowledgeable say it cannot work.
:16:20. > :16:25.Others who have been outside of the country know that no other country,
:16:26. > :16:34.as far as I know, has kept the system which we developed 100, 200
:16:35. > :16:39.years ago. In the old days, by the way, besides the flat in Worthing, I
:16:40. > :16:45.have a home around the corner here which was built, I suppose, about
:16:46. > :16:50.1720, 99 year lease, on the basis that in the 99 years, it would fall
:16:51. > :16:53.down or be burnt down. People were not expecting houses to last
:16:54. > :17:00.forever. I pay tribute to George Thomas, Lord Tony Pandy, in his
:17:01. > :17:03.firebrand days, he campaigned to get leasehold reform and rent Acts in so
:17:04. > :17:08.that people in South Wales could be saved from bad landlords and
:17:09. > :17:14.freeholders. I have in my hand the debate on the 8th of March, 1991,
:17:15. > :17:20.when the MP for Kensington paid tribute to his predecessor, one of
:17:21. > :17:28.the early ones to start campaigning on leasehold, quite remarkable
:17:29. > :17:35.contribution by Terry, the MP... Sorry, find the right page. Terry
:17:36. > :17:42.Lewis, the MP who made reference to a number of the abuses which was
:17:43. > :17:47.err-macro. A nonparty issue then as now. -- which was there. Nearly all
:17:48. > :17:55.of those scandals apply now. Especially the shorter term leases.
:17:56. > :18:00.If we take commonhold, it works perhaps on different titles in parts
:18:01. > :18:06.of Australia, New South Wales particularly with strata Holdings,
:18:07. > :18:11.they have come to our group and forums to talk about it. You will
:18:12. > :18:15.not find the problems we have got in Canada or New Zealand or South
:18:16. > :18:20.Africa. You will not find them in front or Germany. When you give
:18:21. > :18:24.people interest in the flat... At the moment if you improve the
:18:25. > :18:27.property, the value goes eventually to the freeholder. If you get rid of
:18:28. > :18:30.the freeholder, you stop the abuse and you encourage people to invest
:18:31. > :18:36.in things that matter to them. I strongly recommend that debate of
:18:37. > :18:47.1991. I was going to go through it... What I will do is come to some
:18:48. > :18:55.of the abuses. Benjamin, a woman surveyor and leasehold property
:18:56. > :18:59.manager -- well-known, surveyor and leasehold property manager, he was
:19:00. > :19:04.going to be removed, but when the investigation office had concluded
:19:05. > :19:09.their investigation, he retired or resigned days before he would have
:19:10. > :19:13.been dismissed. If he had not, the full report would have come out in
:19:14. > :19:20.the open. As it happens, because he jumped before he was pushed, it is
:19:21. > :19:24.not. He is not fit for judicial office, not fit to go on being a
:19:25. > :19:28.registered member of the royal chartered institute of chartered
:19:29. > :19:35.surveyors. The problem is that his clever lawyers and perhaps a display
:19:36. > :19:40.of not enormous competence by the wall institute of chartered
:19:41. > :19:44.surveyors -- the royal institute of chartered surveyors, they have left
:19:45. > :19:52.it not fully at in the open. 35 cases where he or his company were
:19:53. > :19:59.appearing at the property tribunal. Their failings by almost everyone
:20:00. > :20:04.involved. The problem with the tribunal, they do not have power to
:20:05. > :20:07.fine for repeat offences. If they did, he would have been
:20:08. > :20:20.significantly. Everyone is entitled significantly. Everyone is entitled
:20:21. > :20:22.to a fair hearing. I give an example of one case when the trust acted as
:20:23. > :20:25.property manager, the landlords had scant regard for law and the respect
:20:26. > :20:30.of the costs of interior decorations, how can a
:20:31. > :20:35.self-regulation system that does not consider such court findings retain
:20:36. > :20:38.the confidence of the general public? The Government has argued
:20:39. > :20:41.for years there is no need for statutory regulation but can anyone
:20:42. > :20:48.name a group supporting their position? Even the main managing
:20:49. > :20:52.agents trade body has been asking the government to regulate this
:20:53. > :20:55.sector. Leasehold is the only part of the housing market where an
:20:56. > :20:59.unregulated person can hold huge amount of funds and has no
:21:00. > :21:04.obligation to act in the interests of the leaseholder. I go back to
:21:05. > :21:08.remind the House that when the freeholder appoints the managing
:21:09. > :21:15.agent, who is the management agent working for? The freeholder. I would
:21:16. > :21:17.say to Government ministers, please establish a legal position so that
:21:18. > :21:24.the leaseholder has an interest in everything that happens done with
:21:25. > :21:29.the money and in the block where they are in the least. In this
:21:30. > :21:36.report, the most recent one I have seen is 2013, there are references
:21:37. > :21:45.to soft income. We still have too many examples of landlords sometimes
:21:46. > :21:48.who even own their own agents skimming on huge insurance
:21:49. > :21:52.commission reported by the Financial Conduct Authority 's as recently as
:21:53. > :21:56.two years ago, they say, and it backs up what I said earlier, it is
:21:57. > :22:04.not uncommon for commission of 40% to be charged.
:22:05. > :22:12.This can result in bad services and high costs. My honourable friend may
:22:13. > :22:20.remain the hosts about whether there was that link between the freeholder
:22:21. > :22:24.and the managing agent in Plymouth. I cannot distinguish between one
:22:25. > :22:33.brother and the other or between them and the trusts. I'm going to
:22:34. > :22:36.talk about interests so they can pick up whether they are affected.
:22:37. > :22:46.There are two areas where I criticise them. One was really
:22:47. > :22:54.controlled property managing agents who owned the business called
:22:55. > :22:58.Cirrus, as in the cloud, when they are a large number of freehold
:22:59. > :23:08.blocks were said to have needed the system replaced, there would be a
:23:09. > :23:23.competition between very big firms and Little minnows.
:23:24. > :23:32.Neither the police nor at the authority nor the Serious Fraud
:23:33. > :23:36.Office managed to get together at the same time to work out how to
:23:37. > :23:48.deal with this rip-off of millions of pounds. When they discovered the
:23:49. > :23:54.game was up it was discovered they'd been involved in cartel bidding. We
:23:55. > :23:57.know that if you're the first to declare you've been involved in a
:23:58. > :24:05.cartel UART penalty free. The fact is the size of them was such as...
:24:06. > :24:12.We leave the coverage of the House of Commons. We are about to go over
:24:13. > :24:23.to the liaison committee with Prime Minister Theresa May.