Leasehold and Freehold Reform Bill

Baroness Andrews Excerpts

Committee stage
Wednesday 24th April 2024 Lords Chamber

Moved by

[Baroness Andrews]

23: Clause 36, page 29, line 29, at end insert “and has effect subject to section (LRHUDA 1993: Non-development guarantee)”
Member's explanatory statement
This amendment is related to another amendment in the name of Baroness Andrews inserting a new Clause (LRHUDA 1993: Non-development Guarantee).

[Baroness Andrews (Lab)]

My Lords, in moving this amendment I shall also speak to Amendment 24. These might seem to be rather arcane amendments; Amendment 23 is a technical amendment and Amendment 24 is the substantial point and a proposed new clause. This might look like an arcane point but it is a very significant one and it is simple to correct. The amendment asks the Government to act on a promise to remove a significant blockage, which at the moment increases the cost of enfranchisement to leaseholders who are threatened with upward extensions to blocks of flats and have to pay the freeholder extra for the possible profit he might have made had he chosen to develop. The proposed new clause, although detailed— I apologise for the length of my speaking note—would remove the blockage. I am extremely grateful to noble Lords around the Committee for supporting this, and to the Minister, who has already met me. We all agreed that this is something that must be put right in the Bill.

I declare an interest as a leaseholder in a block of flats that has been under threat of an upward extension for not two years but five years. The consequent blight and anxiety have been considerable. Asking for compensation for not extending upward is now an accessible and popular option for freeholders looking for more profit, especially when it falls under the relaxed requirements of permitted development. That means that there would be no automatic planning hearing, and often what would count as a major development slips by for determination simply by planning officers. There is no requirement for affordable housing, friendly accommodation that would help disabled people, or considerations of planning issues such as the impact on structural stability or protection from massive disturbance for residents.

Given that upward extension can be authorised in wider circumstances than the normal planning rule, it is estimated that there are about 2.2 million custom-built private sector leasehold flats in blocks where development value—for example, for upward extension—could be an issue, and therefore where leaseholders might face this additional obstacle to enfranchisement. There are certainly many people already affected by upward development in London alone.

The current key legislation is paragraph (5) of Schedule 6 to the Leasehold Reform, Housing and Urban Development Act 1993. It defines development value in relation to premises to be enfranchised as an

“increase in the value of the freeholder’s interest in the premises which is attributable to the possibility of demolishing, reconstructing, or carrying out substantial works of construction on, the whole or a substantial part of the premises”.

To give a graphic illustration, in our own situation in my block of flats, when faced with a development we were not consulted on and did not want, we sought to enfranchise ourselves. The cost was originally estimated at £750,000 for 103 flats. Now the development value has been added, that has shot up to £1.75 million. We can no longer raise the funds and we cannot buy the freehold. What has shocked me most as I have pursued the Government on this point is that the impact assessment on upward extension of permitted development shows that the Government actually knew that this would happen. They anticipated that upward extensions would generate freeholder profits to the tune of £530 million in land value uplift, even without any actual development. Moreover, the impact statement recognised that this may make it more expensive for leaseholders to enfranchise.

To their credit, the Government realised that there was something wrong, especially since it would contradict the policy intentions of this Bill to make enfranchisement cheaper. So they referred it to the Law Commission, which reported in 2020 on options to make enfranchisement cheaper and easier. In option 9, it said that:

“When exercising enfranchisement rights, and in order to reduce the premium payable where there is development value, leaseholders could be given the ability to elect to take a restriction on future development of the property”.


The Government accepted the option. On 11 January 2021, in the House of Commons, Robert Jenrick promised in a Written Statement:

“Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’”.—[Official Report, Commons, 11/1/21; col. 10WS.]


Nothing would give us more pleasure in my block than a promise not to develop.

Even more to their credit, this solution was signposted in the impact statement on this Bill, in Annex 2, at paragraph 12, which recognises that the prospect of paying development value can make enfranchisement “prohibitively expensive”, and contemplates that there will be a new right for an option not to pay development value on the condition that leaseholders guarantee not to develop themselves. So I must ask the Minister this: with all these assurances having been given, where is this new clause? What has happened to the policy commitment?

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

I do not think that would be a sensible solution, because there might be times when permitted development might be the correct thing to do and everybody might be happy about it, including those leaseholders who have enfranchised. We need to take this steadily because it is fraught with complexity.

[Baroness Andrews (Lab)]

I am extremely grateful to everyone who has supported the amendment, especially the noble Baroness on my Front Bench. I am also particularly grateful to the Minister. I understood her to say that the Government are committed to bringing forward a workable scheme to deal with this problem, which is exactly what I wanted to hear. I know it must be fraught with difficulties. There are lots of rights and planning issues involved. There is a whole nest of issues that would have to be addressed. The important thing is that it be in line with the timetable for the Bill. Perhaps she will be able to say more about this when we meet, but I hope that it will be either aligned in the timetable, so that there is no more confusion and we can get this tracked as soon as possible, or, if it requires legislation, in the Bill. I take the point, and I would be very happy to meet her—and to take in with me an army, and its advisers.

I have one further reflection on the PDR review. I did my homework—I did what the Minister said, and I saw whether I could use the current PDR review as a way of raising this, but it does not allow me to do that; it is too narrow in scope. Therefore, in fact we need a proper review of PDR, because the implications are so varied and wide. If the Government could commit to that, there would be a lot of political capital in it. In the meantime, I am happy to leave this amendment, and we will see and wait on progress.

Amendment 23 withdrawn.

Leasehold and Freehold Reform Bill

Baroness Andrews Excerpts

2nd reading
Wednesday 27th March 2024 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, it is a great pleasure to follow the noble Lord, who has been indefatigable in his pursuit of justice and improvements to the leasehold system. The Minister is going to have a huge amount of help to improve the Bill; she has already heard from the noble Lord, Lord Best, about how to improve the regulatory system, and there will be lots of advice coming from around the House, as there has been from every part of the industry that knows about leasehold.

I welcome the Bill, but like many others in the House—as I am sure the Minister will hear in the rest of the debate—I think it is a disappointing Bill because it does not fulfil the full task that the Law Commission undertook. Mr Gove, who is ever cheerful, was hardly right when he said at Second Reading in the other place that the Bill would mean

“the effective destruction of the leasehold system”.—[Official Report, Commons, 11/12/23; col. 659.]

That is not so, sadly. It does serious damage, but the leasehold system survives and will go on inflicting and perpetuating real damage, as we have heard already from around the House. He also conceded that more improvements were necessary and I think we have heard several, very powerful reasons for that. Without delaying it, I am sure that this House can improve the Bill very seriously.

The failure to follow the full recommendations of the Law Commission is particularly frustrating because it is one area of the complex and disastrous housing landscape where a solution can be found through the law. The Government have said that there has not been enough legislative time; I say very gently to the Minister, because I know she is not responsible, that if the Government had not distracted both Houses with legislation such as the Rwanda Bill, then we might have had more legislative time. There certainly would have been more time to consider, for example, the proposition made by the noble Lord, Lord Best, about introducing a regulator, or addressing the impact on building safety.

The Government would also not have had to introduce 124 of their own amendments, 34 new clauses and a new schedule in Committee. We are making legislation on the hoof. Legislation like this, which is consensual, ought at least to have the benefit of proper and thorough scrutiny, and we will give it that in this place, not least to some of those 72 very constructive amendments which came forward from the Opposition in the other place—all of which were, of course, rejected.

Reference has been made to this bizarre medieval system of leasehold which we have inherited. Like the feudal laws it echoes, it places all the power in the hands of the freeholders, who are indeed free of all obligations to show responsibility, transparency or fair treatment to the leaseholders beholden to them. Leaseholders live with insecurity compounded by secrecy. They live with no control over what the freeholder is up to next—they never know, especially with offshore companies. They are subject to arbitrary cuts and things being loaded into maintenance, over which they have no control; the cases mentioned by my noble friend on the Front Bench were extraordinarily powerful. They are subject to bad or indifferent property management, as the noble Lord, Lord Best, has described. They worry constantly about whether they should or could afford to extend the length of lease, or pursue enfranchisement—what does it involve and what will it cost?—or what the implications are if they rent out, stay in or sell their homes? No other form of tenure faces such intractable problems.

We talk these days about the precariat; this is at the very edge of the precariat, and more so the 70% of leaseholders living in flats. Yet they have less protection in this Bill, which does not offer them what they need. I speak from experience: as a leaseholder in a block of flats in London, I am in that precariat. This is a speech of two halves, and the second half will be about a particular issue that comes on top of all the others.

If the Bill had been comprehensive, it would certainly have abolished leasehold for all properties. While I welcome the ban on new leasehold houses, I cannot understand the logic of not extending that to flats—not for political reasons alone. I welcome the changes which will make it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freeholds. It is long overdue to be able to extend a 90-year lease to 990 years. As has already been said, why could the Government not have followed the logic and given leaseholders greater protection against losing their homes if they are found to be in minor breaches of the lease? I take comfort from what the Minister has said, and I look forward to seeing what the Government will bring forward; I just hope it will deal with the problem. Also, why did they not follow the logic of placing in the Bill, the purpose of which is to reduce the cost of enfranchisement, a clear legal obligation to encourage leaseholders to acquire their freehold at the lowest possible cost when determining the applicable deferment?

Many of the amendments put forward in the other place will have served the purposes of this Bill very well. It would have been right and sensible to give leaseholders the right to buy up their ground rent, or to provide that all new flats should include a requirement to establish and operate a residents’ management company. Every day, we see the evidence for how effective resident management buyouts are, with lower costs, higher standards, and so on. As other Members have said, the Bill might have also included provision to give leaseholders the right to a share of the freehold, which is the first step towards the preferred option of commonhold. The extension of the protections around the Building Safety Act are very welcome.

We have heard already several times about the importance of the work done by the noble Lord, Lord Best, on the property agents working group. If the Government were worried about Henry VIII clauses, because that is what they said, it would be the first time I have ever heard, in this House, any Government be worried about Henry VIII clauses. I am not going to take that seriously and I do not think anyone else should either. All I hope, at this point, is that the Government find a better reason for supporting the case put forward by the noble Lord.

I am sure we will have a lot of further discussion in Committee, and I am grateful to the Minister for already having engaged with me on a particular issue that I will bring forward in Committee, unless the Government choose to do so. I ask the House to indulge me while I tell a particular tale which affects quite a lot of leaseholders in London, and it is a sort of extension of many of the issues.

Many leaseholders in blocks of flats around and beyond London have been threatened in recent years by upward extensions. Upward extension has been made possible by permitted development; there is no right to be consulted or requirement for a planning application, and there is no strength in objection. No affordable housing provisions are required nor is there provision for disability, and the proposed new homes are market-rent and do not help solve London’s housing crisis.

There is no provision for compensation caused by disruption or decanting of tenants. Imagine an 80 year-old who has been living in the top floor of a four-storey house who suddenly finds she is on a building site. She cannot afford to move, no one is going to help her, and she has to stay put. That is the situation facing the residents of my block of flats at the moment.

Extraordinarily, building control does not help. The way building control operates means that permission can be given without construction methods being tested in advance. There could be a builder who has never done this before, who suddenly decides to put a concrete structure on top of four storeys, and no one will actually know whether it is going to work. Building control will not take action until it has gone through the process. There is, in fact, potential damage or danger by construction methods and approach, recognised by departmental circular 3 of 2020, but it is given pretty short shrift. This is a really awful situation to be in when, as a resident, you have no power to challenge.

We were in that situation when we were threatened by two storeys. There was no consultation and minimal information. Permission was sought and granted, first for one storey under normal planning rules and then for two. We lost our judicial review on the one storey, and, extraordinarily enough, we won on appeal on the two storeys, because we were within the catchment area of a hospital heliport. It was nothing to do with planning or our rights; it was only by accident. We are still under threat of a one-storey extension.

In this Bill, I want the Government to honour their promise. The development ambitions of freeholders, all across London and beyond, are having a chilling effect on the ability of leaseholders to seek and afford enfranchisement. The new hazard is that the development value of the plans brought forward by our freeholder have doubled the collective enfranchisement cost from £0.75 million to £1.75 million. This puts it outside of the reach of most of the residents. The Law Commission proposed a remedy in its valuation report, and the Government—Mr Jenrick, no less—said in the House of Commons on 11 January 2021 that:

“Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’”.—[Official Report, Commons, 11/1/21; col. 10WS.]


The Bill has an impact assessment, thank goodness. Buried in it—you have to be forensic—in annex 2, paragraph 12, is the recognition that the prospect of paying development value can make enfranchisement prohibitively expensive, contemplating that there will be a new right for an option not to pay development value on condition that leaseholders guarantee not to develop themselves. I will draw my remarks to a close soon, but the assessment is detailed. It also contemplates that the freeholder would be due reasonable out-of-pocket expenses, if they have been genuinely incurred. The freeholder gets some profit, but the leaseholder gets absolutely nothing out of this. The Law Commission did not recommend it—this is an invention of the Government.

I have asked the Minister whether she thinks this is something that the Government can honour in the Bill, and she has said that it is a live issue. That is all I need for now, because I trust the Minister to take this issue seriously. It is quite a general issue. I will come back and discuss this with her, if the Government feel that they cannot. She has already told me that the permitted development review is under consultation and that there may be an implication there. Perhaps she could tell me more about that.

We will certainly engage over the course of Committee, and I will not make any further argument at this point, other than simply to say that I welcome the Bill. It is a huge opportunity; let it not be a missed opportunity. Let us use the resources and expertise in this House to make the Bill as robust and comprehensive as we can. I believe that there is quite a lot of good will on the part of the Government to do that.

Intergovernmental Relations Within the United Kingdom

Baroness Andrews Excerpts

Thursday 18th January 2024 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, it is a great pleasure, as always, to follow the noble Baroness, Lady Fraser of Craigmaddie. I should reassure her that the Welsh are very rarely in a majority in this House. We should take advantage of that this afternoon. I am grateful to the noble Earl, Lord Kinnoull, for enabling us to have this debate and for the forensic way in which he introduced it. It is timely because there is much to welcome in the new IGR structure, especially the greater clarity in terms of process, accountabilities and dispute resolution. As he was saying, this is a work in progress and I entirely agree with him about the challenges of how it will be used. I look forward to the Minister’s response to his important questions.

I will focus on Wales, because what gives this debate extra edge today is that we have had the much-anticipated report of the Independent Commission on the Constitutional Future of Wales, chaired by our very own Archbishop Rowan Williams, and by Professor Laura McAllister. It has concluded that

“The relationship between the UK government and the devolved governments has fallen far short of the co-operation that citizens expect and which is essential to the successful operation of the Union”.


It calls on the need to protect the Union from the risk of “gradual attrition” if steps are not taken to secure it, and sets out the options for Wales in terms of the future of its governance.

Now, its conclusions consolidate much of what has been marked by intergovernmental relations of recent years. However banal this may sound, no matter how good our structures are, unless those trusted relationships can be retained and made resilient, Westminster and the devolved Administrations will always have an asymmetrical relationship.

That is certainly reflected in Wales’s relationship with Westminster. In July last year, the UK’s conduct towards Wales was described as

“attempts to undermine the devolution settlement and … continued disrespect for the Welsh Government and the Senedd”,

which has damaged intergovernmental working. When he was asked during the Covid inquiry how the new intergovernmental structures were working, the First Minister said they would work only where there were existing good relationships in place, but that

“the new machinery has not succeeded in sparking those arrangements”

or “new forms of interaction”, and that too often relationships just reflected the whim or will of the individual Minister. Indeed, we saw the failure of that will during the Covid pandemic itself, when, despite what we were told in this House, the relationship between Wales and Westminster was one of incommunicado some of the time. Now, that was a basic failure of courtesy, let alone co-ordinated policy.

This House has seen at first hand how the Government have introduced legislation that has overridden the basic precepts of devolution—consultation and consent—and this is documented in the commission’s report. But in this House, I am delighted to say that noble Lords have played a key role in protecting the devolution settlement from the worst effects of provocative legislation, presented to the DAs without care or consultation.

The Common Frameworks Scrutiny Committee, which I had the privilege of chairing for two and a half years, had a ringside seat—sometimes we were actually in the ring itself—for intergovernmental relationships. It was not so much a case of benign indifference but more a question of “prod and provoke”. It was our conviction that common frameworks could help to mend those relationships and build a stronger Union. But the prevailing political mood was in effect to make common frameworks a victim rather than an agent of positive policy, as seen particularly in relation to the internal market Act and the Retained EU Law (Revocation and Reform) Act. These brand-new mechanisms, these common frameworks that were invented post-Brexit for managing divergence within the internal market, were intended originally to be positive instruments for taking collaborative policy across the UK, whether that was on agriculture or health, and in so doing to draw the Union closer. That opportunity has been lost so far because they have become focused on compatible processes rather than policy. Insofar as they are successful, it is because the officials working across the four countries have made them so.

What has been lacking is political leadership, and in our final letter to Mr Gove—I completely agree with everything the noble Lord has said about the way the Cabinet Office is marginalised here—we said that the failure to provide drive and focused leadership, which would have galvanised the contribution common frameworks could make to the Union, explains why we described in our reports that common frameworks have been an unfulfilled opportunity. Indeed, we had a whole cohort of Ministers trooped in front of us—some with a better grasp than others—but they all displayed a rather cavalier attitude towards the frameworks and no real grip on what they could actually achieve. Mr Gove has disputed our arguments, of course, but he does say that he thinks the IGR reforms have created “a better overall context”. The obvious question is how; I hope the Minister can answer that.

Recently, the Interparliamentary Forum drew attention to the difficulties caused by the United Kingdom Internal Market Act—a Bill that was fought in this House, where we were able to protect the dispute resolutions of the current frameworks against being subordinated to UK legislation, which was very important—and the Retained EU Law (Revocation and Reform) Act, which virtually dismissed any concerns on the part of either Wales or Scotland as to how their regulatory frameworks would be impacted.

Given that the union is now more troubled, less robust and less certain about boundaries and functions, the publication of the report today, which calls on the Westminster Parliament to secure through legislation

“a duty of co-operation and parity of esteem between the governments of the UK”

is vital. I hope the Government will listen and learn from that because parity of esteem between the different cultures and conditions of the countries of the UK must be at the heart of reviving the relationships if they are not to become even more frayed.

Wales carries the burden of inherited poverty and ill health. It is an exceptional legacy. Underfunding for years means that the Welsh Government simply cannot meet the needs of Wales. The reason why that is so, and its repercussions in the context of the union, is part of the conversation that the commission has started across Wales by making recommendations about the strengthening of the union and raising options for its future. I hope the Government will listen intently to that.

Local Councils: 2023-24 Budgets

Baroness Andrews Excerpts

Wednesday 25th January 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I absolutely agree with my noble friend, not only on that point but that councils can look to a referendum. It is important that, if they look for a referendum, they say what they are going to spend the money on so that local people have a choice.

[Baroness Andrews (Lab)]

My Lords, is the Minister aware that, in the first few months of last year, 2.2 million hours of adult social care were lost? This year, we have half a million people waiting for a care assessment, a care package or to have some care sorted out. Does she agree that adult social care and the community basis for adult social care should be a priority in the Budget? The Health Secretary believed this when he was chair of the Health and Social Care Committee in the Commons. Will she remind him of his promise to increase funding and will she engage with her Treasury officials and her Ministers to make that happen?

[Baroness Scott of Bybrook (Con)]

My Lords, adult social care has been an issue to be solved for not just this Government but many Governments before them. The Government are putting more money into adult social care. They put £2 billion more into local authority funding this year for it, and we will continue to look for better ways of delivering adult social care, working with the NHS as well.

Residential Leaseholders

Baroness Andrews Excerpts

Thursday 12th January 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I cannot comment on the individual case, but the law is already clear that service charges must be reasonable. That is set out in Section 19 of the Landlord and Tenant Act 1985. If leaseholders feel they are being ripped off, they can apply in First-tier Tribunals for determination on this. However, I agree that there is more to do. The Government are committed to ensuring that charges, particularly service charges and these extra charges, are transparent. There should be a clear route to challenge or redress if things go wrong.

[Baroness Andrews (Lab)]

My Lords—

[The Lord Bishop of Chelmsford]

My Lords, in light of the commitment made by the big six lenders to accept mortgage applications for flats with building safety issues from Monday 9 January, will the Minister confirm that the Government will monitor their lending decisions to ensure that this time their commitments will be fulfilled, so that this part of the housing market can be unfrozen?

[Baroness Scott of Bybrook (Con)]

The right reverend Prelate brings up an interesting point. I do not know exactly what the Government will do, as the announcement was made only this week. However, I will find out exactly how we will monitor them and the process, and come back to her.

[Baroness Andrews (Lab)]

My Lords, I apologise to the right reverend Prelate. Can I press the Minister on the timetable? She said that she expects the Bill to be introduced before the end of this Parliament. Does she mean that it will be introduced before the election? It is not only disappointing that we have had delays but profoundly destabilising. For example, leaseholders no longer know whether it is safe to pursue enfranchisement or whether they should wait for the Bill. Another thing that has happened in recent years, with the extension of permitted development, is that there are blocks of flats with leaseholders held captive by freeholders who are pursuing upward extensions under permitted development, without the protection of law. These leaseholders do not even have protection in case they have to be decanted while building works are going on. It is a very serious situation and it is accelerating. I would like the Minister to advise on that point.

[Baroness Scott of Bybrook (Con)]

As I have made clear a number of times at this Dispatch Box, these measures were in the manifesto in 2019. We have always said that we will bring forward a reform Bill in this Parliament and that is what we intend to do. We just have to wait and see; I am very sorry. I totally understand that this is causing some issues in the sector. That is why we will get the Bill through as soon as we possibly can, but it has been quite complex and we need to get it right.

Social Homes for Rent

Baroness Andrews Excerpts

Thursday 26th May 2022 Lords Chamber

[Lord Greenhalgh (Con)]

The noble Lord is always on the money. We need to create places and not just homes on mono-tenured estates. That is why the affordable homes programme is looking to increase the number of social homes for rent, but also other forms of subsidised housing such as affordable rent and low-cost home ownership, so that people of all incomes can live in the same place.

[Baroness Andrews (Lab)]

My Lords, when are we going to have a housing policy that takes account of the fact that we have an ageing society? How can you level up when we are expecting a new generation of elderly people in poverty who will go on paying rent as long as they live? If we can plan for an ageing society, why can we not plan to have flexible and adapted housing, systematically provided and spatially planned, which can allow for people to age in place? That would save enormous social and economic costs.

[Lord Greenhalgh (Con)]

We do recognise that we have an ageing society, which is why a chunk of the £11.5 billion affordable homes programme will go towards subsidising housing for the elderly. We recognise in our planning policies that areas need to do their bit to house people, and also to enable people to remain in their homes if that is what they choose to do.

Levelling-up Report

Baroness Andrews Excerpts

Thursday 19th May 2022 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I do not think the technical annexe is particularly dumbed down—it is pretty complicated stuff. To have a clear sense of direction supported by metrics which are then enshrined in statute is hardly dumbing things down.

[Baroness Andrews (Lab)]

My Lords, forgive me for not having the technical annexe, the 22 metrics or the others that the Minister has alluded to. Can he tell me whether it will include the numbers of people using food banks and of new food banks having to be started because of the increasing cost of living? Will we have any evaluation of the catch-up programme, which is so inadequate, in terms of the impact of the pandemic on children and young people?

[Lord Greenhalgh (Con)]

We recognise the impact of the pandemic and the cost-of-living crisis. But all the metrics are set out clearly in the technical annexe, copies of which are available on the GOV.UK website.

Building a Co-operative Union (Common Frameworks Scrutiny Committee Report)

Baroness Andrews Excerpts

Wednesday 13th October 2021 Grand Committee

Moved by

[Baroness Andrews]

That the Grand Committee takes note of the Report from the Common Frameworks Scrutiny Committee Common Frameworks: building a cooperative Union (1st Report, Session 2019–21, HL Paper 259).

[Baroness Andrews (Lab)]

My Lords, on behalf of the committee, I say how much we welcome this opportunity to present our report and to update the House on the progress we have made since we published it. I thank the missing Ministers this evening—the noble Lord, Lord True, and Chloe Smith MP—who were extremely supportive and shared our journey to an extent. We welcome the noble Lord, Lord Greenhalgh, this afternoon and look forward to hearing what he says.

Part of the benefit of working closely with Ministers is that we benefited from working with their officials in the Cabinet Office as well. They were always, and continue to be, extremely helpful to us. We welcome the Government’s response although, in a way inevitably I suppose, it was largely a statement of principle and support and there was a marked absence of hard, practical acceptance of the recommendations, but we hope that will improve too.

I start by thanking the committee and congratulating it on its stamina, not least over the past year. We have done a lot of things for the first time—we are a rather unusual committee—and it has been hard work. I am very pleased to say that, on Monday, the Liaison Committee agreed that we will extend our work until next summer. We really welcome that, because there is a lot still to be done. It is a real tribute to the work we do and to the need for Parliament to maintain its scrutiny over the common frameworks. It is also a tribute to the connections we have built up with the devolved Administrations across the UK.

I am blessed to chair a committee with such quality, insight and experience, often in high office, of what the journey to devolution has meant and its history. It is what gives our committee its unique weight and perspective and has enabled us to talk very frankly to the devolved Administrations, Ministers and stakeholders. Our expertise has already been poached; the Cabinet Office seized the noble Lord, Lord McInnes, and took him away from us. Although he has probably not gone to a better place, he has probably gone to serve a higher cause. In exchange, we got another hostage, the noble and learned Lord, Lord Keen of Elie, who brings intimate knowledge of the United Kingdom Internal Market Act. The only downside of meeting in person today—it is lovely to see the committee as we have not met in person as a committee before—is that we do not have the noble Lord, Lord Murphy, who has been a very important member and given us enormously wise advice.

I also thank our wonderful staff: Moriyo Aiyeola, who took over from Erik Tate, Tim Stacey, our absolutely splendid policy adviser, and Glenn Chapman and Breda Twomey, who keep us in order and make sure that we do not stray too far from our companion committees, the Constitution Committee and the Northern Ireland protocol committee, on which some of our members also serve.

My speech today is something of a common framework because there are lots of things that I know my colleagues will want to pick up in detail, and I look forward to hearing from them. I have to start with a rather blunt question to the Minister. I know that this is a new brief for him so we will be kind, as always, but we also have to ask some awkward questions. When he winds up, please can he tell us which Minister is now responsible for the common frameworks? Which department is now responsible for the common frameworks? No Cabinet Minister has yet been appointed to replace Chloe Smith. Does that mean that, from now on, there will be no Minister in the Cabinet Office responsible for co-ordinating and driving the common frameworks programme?

If the responsibility has moved to the Department for Levelling Up, Housing and Communities, we presume that the Secretary of State, Mr Gove, will be the man in charge, but can the Minister tell us who the responsible Minister will be? If this is the case, it would have been nice to have been told earlier than now. I speak for the devolved Administrations as well. So we need answers this afternoon as a matter of urgency and credibility but also plain courtesy, especially to the devolved Administrations. I hope I am not being too pessimistic about this but I think the department will have to make an effort to make sure that the common frameworks are not seen as another aspect of local government, having gone into the department which traditionally has been about local government.

This debate is timely in many ways and the issues we raised in March are more urgent than ever. We subtitled our report “Building a Cooperative Union” because our work suggests that is what the common frameworks can uniquely do, especially when the political environment seems to be hostile to that ambition. Some of our witnesses said, in very many different words, that government relations with the devolved Administrations had never been worse. Obviously, we are not offering a holistic solution in our report—that is not our job and we would be naive to try—but it offers a pragmatic prescription rooted in what works.

The content of what we do is often technical, sometimes dauntingly so, but the context is wholly political. Although we are forced to focus on process, as the frameworks themselves do, the function of the frameworks is no less than to guarantee safe and appropriate services across the UK, covering a host of issues: nutritional standards, carbon emissions, food and feed safety, blood products and transport systems. Every framework is different, every department behaves differently, but they determine huge areas of health and safety across the UK.

Since the common frameworks emerged in 2017 with a set of clear principles, 32 frameworks have been designated to replace the rules which had been established by the European Commission to guarantee a functioning internal market and to protect the common resources of the environment, which is why over half the frameworks are concerned with environmental issues.

Much of this constructive work was virtually invisible, which is why it is a challenge to explain what the common frameworks do, but we emphasised in our report that these frameworks could play a unique role in creating new opportunities for collaboration and consensus across the UK, through shared information, interests, policy and process. Above all, they were the way by which the common framework of the internal market could be maintained at the same time as managing divergence, which was not disruptive. In short, the common frameworks are a new asset, they have huge potential and they should not be underplayed.

Since we reported in March, there have been some setbacks and these have been largely external. But there has been some progress and this is to the credit, not least, of the work of the Cabinet Office officials and, I like to think, of our committee itself, in the way we have drawn attention to inconsistency, sloppiness in some cases, and things that could be done better, including transparency.

Of course, we have been dealing with delay. Every deadline set by the Government has proved to be widely ambitious and widely missed. The first deadline was Christmas 2020, and the second was the Easter just gone; now we are told that it is Easter next year—we shall see. The fact that our committee has been extended to next summer gives us some scope.

As for progress, when the committee reported in March, only seven of the 32 frameworks in development had reached provisional status. In July, we had better news: a further 21 frameworks had reached provisional status. However, while the UK, Welsh and Scottish Governments had signed them off, the Northern Ireland Executive had not. That has now, thankfully, changed, and the Northern Ireland Executive have approved the frameworks agreed by the four Administrations. This is most significant—and I am sure we will talk a lot about Ireland this afternoon—given that it is clear that common frameworks have the potential to be a positive force to reduce future tensions deriving from the protocol. To support this, we recommended that the Government should ensure that policy changes introduced with the protocol should be considered through the frameworks, in just the same way as divergent policy changes suggested by the other Administrations are so mediated. That would provide not just parity of process but a more predictable and transparent outcome.

The Government have accepted that in theory but, again, to what extent it will be applied in practice remains to be seen. That applies to our other recommendation that the significant number of frameworks that intersect with the protocol should include processes for reporting on the divergence that occurs and its effect. We have not seen any evidence of those reporting mechanisms being developed since we produced the report, but they are recommendations that do not ignore political realities; they are a pragmatic approach to a problem that we would like to contribute to solving. Perhaps the Minister could update us on the Government’s thinking on those areas.

The second area that has obstructed progress is the interaction between the common frameworks and the United Kingdom Internal Market Act, which has continued to be a cause of friction between the UK Government and devolved Administrations. The Welsh Government believe that the Act unlawfully altered the devolution settlement, and they are pursuing legal action. The Bill was amended in Committee, thanks not least to one of the members of our committee, the noble and learned Lord, Lord Hope, and the Act now contains the power for the Secretary of State to create exemptions from the effects of the Act in areas agreed through a common framework. We recommended in our report that each framework should be updated to include a consistent and transparent process for agreeing areas where this very important power will be used. It is proving difficult to do that; it is not easy—and we look forward to the Minister, I hope, telling us that some progress has been made, because it is definitely adding to frustrations and delays.

I turn briefly to the internal challenges of the programme itself. Much of the insecurity and difficulties around the frameworks is due to the lack of transparency, and I know that my colleagues will want to pick that particular failure up. The lack of transparency inhibits success, and that should not be the case. We have proposed a simple solution that an open consultation should be included in the scheduled review that each framework is due to undergo, but that has not happened. I look forward to hearing what the Minister says about that.

We also acknowledge in our recommendations that frameworks are still at an early stage. That makes it difficult to make any judgments as to whether they will raise or lower standards, maintaining or diluting previous European Union standards. It is difficult to determine that since, rather than establishing minimum standards, the 11 frameworks that we have seen have largely included agreements on the process for the future agreements of standards rather than the standards themselves. Since we reported, I can give one example whereby preliminary documents on the radioactive substances framework include agreement on maintaining or exceeding European standards.

All this is taking place within the wider challenges of the future of the devolution settlement. I am delighted that the noble Lord, Lord Dunlop, is with us this afternoon, and very much look forward to his contribution. Indeed, we look forward to seeing his report being implemented in full, as we do the outcomes of the intergovernmental committee and the Minister’s response on progress. Where we as a committee can speak with authority and unanimity is on the need for a clear commitment to ongoing parliamentary scrutiny.

In our report we recommended that the four Administrations should provide regular updates to their legislatures, and to public reporting as part of their planned reviews of the frameworks. Again, the Government are very much in favour of this in theory, but the commitments we have seen have been, frankly, lacklustre. The Welsh Government have no such inhibition in relation to the Senedd. The UK Government seem to fear making such a commitment as far as our Parliament is concerned.

In the context and in conclusion, I put on record the fact that our scrutiny committee is doing things for the first time and in different ways—not least because we are a unique and welcome point of contact between the Parliaments of the four countries. Our warm relationships and our continuing and frank exchanges have been mutually valid: they have set a tone and a precedent for what could and should happen going forward. The strength of devolution lies in the balance between common and individual interests and common frameworks both exemplify this and have the power to strengthen the wider and critical relationships. We hope most fervently that this is something that the Government, and Parliament as a whole, will want to invest in. I beg to move.

--- Later in debate ---

[Baroness Andrews (Lab)]

My Lords, I thank the Minister for his response. He will know now, I think, why the committee is so formidable—formidable to chair and formidable in its questioning. I am conscious that a great number of questions were put to him this afternoon. I think there was quite a lot of good news in what he said, but we will have to read what he said carefully. It is of the utmost importance that we get the greatest clarity—and, frankly, the greatest enthusiasm—from the Government for the common frameworks.

The question raised by the noble and learned Lord, Lord Hope, is fundamental. The centre has a role here in making sure that the common frameworks are properly co-ordinated and driven in the right directions, in the right way and at the right speed, that they really work and make an optimum contribution to strengthening the union. We will watch very closely how the Minister’s department is going to manage them, and the level of transparency. I have absolute confidence in officials, and we are very grateful that we at least have the name of the Minister; I am sure that we will want to talk to him as soon as he is properly in place.

Many of my colleagues raised the character of the frameworks, saying that they look dull, technical and impenetrable. I should say to the noble Baroness, Lady Bryan, and other noble Lords who have spoken that there is no such thing as an interloper in this debate: we welcome any interest shown by anybody from any part of the House, and well beyond. We have talked about the misleading nature of the frameworks. They are so much more than the sum of their parts, as they deal with huge constitutional issues and possibilities. The noble and learned Lord, Lord Thomas, spoke of them as constitutional innovations. They illuminate the lopsided nature of power in the UK, shining a new light on what is possible and necessary through devolution, and the risks of the state of the debate on devolution. These are huge historic themes, not small, technical adjustments. Since the issue has gone into the Department for Levelling Up, it will become confused with a whole range of other issues and imperatives.

Our imperative is to make sure that these frameworks, which were and may still be precarious—just as the existence of our committee might have been precarious—are maximised in their impact across the UK, for the benefit of the whole of the UK. We will hold Ministers’ feet to the fire and we will want to see what progress is being made, that faith is being kept, that transparency and quality is improved, that timetables are kept, and that the impact on the ground for delivery is as it should be. If there is divergence, it must be managed transparently and constructively.

Everything that my noble friend said about the position of Wales is absolutely true. The internal market Act was totally disruptive, and there was a very serious chance that the whole process would lose credibility. It did not—not least because of this committee’s work. That is the standard to which we will hold ourselves over the next year. We will be vigilant and pretty ruthless about what we expect in terms of behaviour from not just this department but all departments across government.

Motion agreed.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Andrews Excerpts

Monday 24th May 2021 Lords Chamber

[Baroness Andrews (Lab) [V]]

My Lords, I welcome the Bill although, as the Minister might expect, with some caveats. But I welcome the way in which he introduced it and the context in which he placed it. Four years after it was promised in 2017, a leasehold reform Bill has reached this House—and it is an important start to remove what the Minister called the massive and increasing disadvantages that leaseholders have to contend with. The law has until now not been on their side, and this helps redress that.

We recognise that leasehold reform has been in process for decades. The Law Commission has done its work after endless investigations and consultations, but the Minister will know that, along with many others in this House, I am disappointed that the Government have not been able to bring forward the full range of leasehold reforms that we were promised. The Minister spoke about bringing them forward later in this Parliament. Inevitably, my first question is: what does that mean and can he be more specific? As we know, this Bill will deal with new leases only.

However, the Bill is a start in addressing the scandals and abuses that leaseholders have faced for years. As the Minister said, the problem is that leaseholders receive no clear service in return for these ground rent payments and it is not always clear what costs leaseholders will have to pay when they purchase their home. How very true. A survey for Propertymark, which has been campaigning for leasehold reform for years, found that 57% of leaseholders had no idea of the escalating costs they would face and, tragically, 50% were first-time buyers. Had they known, 93% said that they would not have chosen a leasehold home. They certainly had no idea that their ground rents could double in 10 years. This has been a real scandal, documented throughout by the Leasehold Knowledge Partnership, which has charted years of distress and anxiety among leaseholders.

While we have to wait for that bigger scandal to be fixed, we can welcome the Bill as incredibly important, not least because it abolishes ground rents and therefore cuts off the income stream that underpins the current leasehold system. If investors are not incentivised to buy up leaseholds for their ground rents, that removes the risk they will appoint managing agents who see leaseholders as little more than cash cows. Once that happens, there is a prospect that buildings may start to be run in the interests of the people living in them, as opposed to the interests of investors who see them as little more than accounting entries. It is a systemic change, which can root out abuses throughout the system, and I welcome it as such.

However, inevitably, I have some questions for the Minister. What is the Government’s estimate of the number of homes that will actually be affected when the Bill is enacted in 2023? Given that leasehold properties are not evenly distributed across the country, which areas of the country will benefit most? Secondly, how will the Bill interact with the Government’s plans for reinvigorating commonhold, which we certainly welcome. How will the timetables overlap? I ask this because, if the Government succeed and synchronise the introduction of commonhold plans with this Bill, it is possible that there may be none or very few residential leaseholds to which the Bill will apply because most flats will surely be sold as commonhold.

Thirdly, given that the Bill will become law in 2023, what does the Minister think the effect of knowing that ground rents are about to be abolished will be on the housing market for leasehold homes?

The Minister raised the question of the definition of rent, and I would like him to clarify what he said when he winds up. Does the Bill intend to force future leases to be redrafted to restrict the definition of rent? As he knows, the problem is that many modern leases define rent as including ground rent and service charges and sometimes building insurance. Will that continue or will it be changed? The argument is that, if you exclude them from the definition of rent in strict form, the landlord cannot take advantage of the forfeiture. I would be most grateful for an answer on that point.

The Minister referred to enforcement. The problem is that this is going to be left to the trading standards departments. How realistic is that? He must be aware that those departments are chronically underfunded and under huge pressures, as are other local government departments that have been stripped out, such as planning and conservation. It is really unlikely that local authorities will get involved, not least on the grounds that leaseholders are better off using civil claims to recover prohibited ground rent. What plans do the Government have to encourage local authorities to ramp up the capacity of the local trading standards?

In conclusion, let me return to those not helped by the Bill. It is significant that the property associations welcome the Bill. Indeed Mark Hayward, the chief policy adviser at Propertymark, has said that the legislation will

“go a long way to help thousands of homeowners caught in a leasehold trap”.

However, it has called on the Government to extend the provisions on ground rents to those who already hold a leasehold property to create a “level playing field”.

Power has been in the lands of the freeholder for far too long. Aggressive and escalating ground rents continue to be a scandal against which there is no redress. I know that the Minister understands and appreciates the work of the Leasehold Knowledge Partnership, so he will know of the countless cases it has collected. For example, recently there was a story of a lady living in south London whose ground rent is threatening to reach £1 million in the next 50 years at the rate of escalation. The problem is that in some ways—and this lies at the Government’s feet—the situation of leaseholders has gone on getting worse. The cladding scandal is, of course, in a class of its own, but the extension of permitted development rights is another way in which the rights of leaseholders to protect themselves and their homes against ruthless developers are being lost as upward extensions are permitted outside the protection of normal planning law.

I hope that the Minister, while he basks in the welcome given to the Bill, will also reassure us that the Government are only too aware of its limitations, and the imperative to act fast to protect current—as well as future—leaseholders, who have waited patiently but in increasing anxiety for so long.

Queen’s Speech

Baroness Andrews Excerpts

Monday 17th May 2021 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, it gives me great pleasure to join with other noble Lords in congratulating the noble Lord, Lord Morse, and my noble friend Lord Coaker on their wonderful maiden speeches. We look forward very much to hearing more from them. I must confess that I was a bit jealous, as never in this House have I made a speech which has been greeted with a clap of thunder. It sets a new standard for all of us to see what we can achieve.

The fundamental question at the heart of this debate is: what does it mean and what does it take to build better for the communities of the future? Many noble Lords have answered that question this evening with great sophistication and power: good jobs, lifelong skills, decent incomes, accessible, affordable housing for all ages, robust local services, reliable transport and a safe, clean, beautiful place to live in. These are basic rights and requirements, but they are without the reach of many people in this country. Yet the opportunity is staring us in the face. After the unparalleled last 15 months, there is a real appetite and a real sense of urgency for change.

There has never been a better time for the Government to tackle the long-term, fundamental, systemic problems which face this country: for example, the failed housing market, which is geared towards the developer; and a disjointed, vulnerable social care system, which is financially ruinous for many families and yet does not guarantee good quality or choice of social care. What an opportunity for a Government to turn to the country and say, in a paraphrase of another time: “We have the tools, we can do the job, we have shown that we can act fast, we can inspire innovation on an unparalleled scale, we can find the money for what we need to do, because the people expect us to do better and to do differently, in a way which is safer, fairer and more efficient.”

I am very disappointed that the Government seem not to have been able to grasp that. I am sad to say that I find that the Queen’s Speech fails on three basic tests. The Minister opening the debate today gave us a catalogue of reasons for delay. I do not think that is good enough. The first test is about honouring promises. There was nothing on social care, of course, but the charge sheet on housing is much longer. Housing has become almost totemic in its significance as a place of safety and distress, and increasing homelessness looks even more likely when housing subsidies are withdrawn.

Many noble Lords have said that there is nothing about accelerating social housing, only the statement that the Government will continue to legislate on the social housing proposal White Paper proposals and will legislate as soon as practicable. The White Paper was three years in the making and that was four years ago. There is nothing on renters’ reform. That was promised 17 months ago. There was no mention of a White Paper. Reform seems to be receding. There was nothing on landlord registration. That was promised 13 years ago in the Rugg review. There was nothing on the scale of leasehold reform that we were anticipating. Yes, ground rent reform is important, but it is the low-hanging fruit of leasehold reform. When can we expect these Bills? I welcome the building safety Bill, of course. I hope the Minister has answers to the many questions raised on it.

The second basic test is that policies should at least agree with each other. The two Ministers at the Dispatch Box this evening are at odds with each other. The new planning Bill is virtually incompatible with the Government’s targets for a greener and healthier economy. The Justice Minister has promised leasehold reform while the Housing Minister presses ahead with permitted development which will, for example, remove the rights of leaseholders, who will have storeys built above their heads while losing their rights to object.

The third test for a Queen’s Speech is that it should at least find support among its own friends. I think the planning Bill has more enemies than friends already. One speech from the other place last week says it all. It

“would reduce local democracy, remove the opportunity for local people to comment on specific developments, and remove the ability of local authorities to set development policies locally.”

It

“would also lead to fewer affordable homes, because they hand developers a get-out clause … what we will see is not more homes, but, potentially, the wrong homes … in the wrong places”.—[Official Report, Commons, 11/5/21; col. 39.]

In this case, Theresa May was absolutely right and many others agree with her. The Bill is described by the CPRE as a descent into the dark ages of planning. It means the end of the Section 106 agreements, which my noble friend referred to, and fewer mechanisms for ensuring that affordable housing targets are met. Unless the Bill is changed, it will not build faster, better or greener. I am afraid I can assure the Minister that it will have a lively passage through this House.