Thousands of homeowners in my constituency and millions across the country who face estate management charges will have their rights substantially increased thanks to the provisions in this Bill. I am extremely grateful to the Prime Minister, the Secretary of State, the Minister and his predecessor, my hon. Friend the Member for Redditch (Rachel Maclean), for including estate management charges in this Bill.
5.45 pm
That is extraordinarily timely, given the findings released this week by the Competition and Markets Authority. In its final report, it states:
“As a result of the emergence of the private management model, and the market power conferred on some management companies, households are facing financial and emotional detriment, and, if the status quo is maintained, this is likely to worsen over time.”
It proposes that the Governments of the UK and the devolved authorities look at two areas of measures. The first is to
“provide greater protection to households living under private management arrangements.”
That is what this Bill seeks to do. I know that the Minister has some cards up his sleeve—on forfeiture, right to manage and probably a host of other things—and I hope that he will shake some of them loose as the Bill moves up to the upper House.
Secondly, the Competition and Markets Authority makes two recommendations to prevent the proliferation of private management arrangements for new housing estates. The first is to
“implement common adoptable standards for public amenities on new housing estates”,
and the second is to
“implement mandatory adoption of public amenities on new housing estates”.
That sounds good, but it also sounds a long time away. We know that this issue is growing rapidly, so my amendment 18 seeks to stop it in its tracks by saying that homeowners may not have passed on to them charges for any service or provision that is usually the recourse of the local authority.
I cannot for the life of me understand why the Opposition are not supporting this amendment. I know that it is a bit of a club and not very nuanced, but it gets to the heart of the matter. Could the Minister therefore reassure the Opposition, as well as me and other Back Benchers, that he will look at what the Bill can do to make progress on some of the measures mentioned by the Competition and Markets Authority? I know that he wants to do that; I just hope that he can go as far as he can.
I will now turn to the proposed treatment of marriage value. There is a concern, which has been stressed a number of times, that the decisions we are making through this Bill are based on limited information on important economic effects. One example is the ability given to the Secretary of State to decide options for the future of ground rent. That was raised in responses to the recent consultation. Another is how the Government might determine the appropriate rates for the deferment and capitalisation rates, and there are a range of unquantified effects in the Bill’s impact assessment.
In Committee, I tried to learn a bit more about whether marriage value is a real thing. It is a real thing: it was enshrined in legislation in 2002 and, prior to that, in 1993. The Bill does not abolish marriage value; it transfers it. In fact, it is not possible to abolish marriage value; in maths, it is an optional value—it has real value. This is a decision not to abolish something, but to take it from one group of stakeholders and give it to another. It is a £7 billion transfer of wealth from one group to another, and under the provisions of the Bill it would be retrospective on contracts already entered into. That is a perfectly legitimate public policy position if we wish to take it, but I say to the Minister that as currently proposed it is fraught with legal risk and legal jeopardy.
My amendment would provide a safer passage for this Bill on its way to becoming law. It would ensure that any lease below 80 years at the time the Act is passed would continue to have marriage value, but any lease that goes below 80 years after the Act has passed would not. I ask the Minister to consider that as the Bill moves to its next stage.