Leasehold and Freehold Reform Bill

Lord Khan of Burnley Excerpts

Committee stage
Wednesday 24th April 2024 Lords Chamber

[Baroness Pinnock (LD)]

I thank the noble Earl for that intervention, because he is right in many cases. I am not a lawyer, but I know that the 1925 property Act made a huge change away from the old system, which was feudal at that point, and modernised property legislation. This Bill may do the same. In some instances, as we have heard this afternoon, it will have big consequences—for freeholders, in the context of this set of amendments. I accept that maybe there ought to have been—as we heard on Monday from the noble Lord, Lord Young of Cookham—a draft Bill on commonhold. Maybe it requires an in-depth, cross-House, cross-party committee to get into the detail, rather than the 300 or so pages of the Bill that we have in front of us, in order to get to grips with the consequences of what is being proposed.

I go back to the principle, and the principle has to be right. We are trying to rebalance the rights between freehold and leasehold. There is frequent talk on the Conservative Benches that the basis of Conservative philosophy is a property-owning democracy, but leaseholders will not be full participants in that until these changes are made. So it will be interesting to hear what the Minister has to say with regard to this very challenging debate.

[Lord Khan of Burnley (Lab)]

My Lords, this has been a more wide-ranging debate than was anticipated at the beginning of the group. The noble Lords, Lord Howard and Lord Moylan, made some interesting points in introducing their amendments, and it is for the Minister to clarify and address her noble friends’ concerns. All three amendments in this group attempt to make changes to Schedule 4, which is where the market- value element of the premium for any enfranchisement claim is determined.

I listened to the noble Baroness, Lady Fox of Buckley, in relation to the European Convention on Human Rights. Although we have differing views on that, it is interesting how legislation and the regard for international law are debated in different debates in this House—without pinpointing any noble Lord in particular.

The noble Baroness, Lady Deech, laid out and stipulated the complexity of the issue as a teacher in property law, while the noble Lord, Lord Thurlow, as a student of property law, made some interesting points about complexity and about working and bringing change in a fair manner.

In conclusion, I ask the Minister what consideration the Government have given to the principles of grandfathering for leases of various lengths and other conditions when developing the Bill? For example, in the instance of a lease of a very short length, when the Bill becomes law, what are the ramifications of the Bill as it is written? Do the Government think that some shorter leases are going to be treated in a way that may be fairer on wider principle but do not seem appropriate, given the shorter lengths? If so, did they consider any mitigation?

I finish by referring to my noble friend Lord Truscott, who advocated in a diligent manner the ending of marriage value and talked about the wider unfairness in leasehold properties. I look forward to the Minister’s response.

[Baroness Scott of Bybrook (Con)]

My Lords, I thank my noble friends Lord Howard and Lord Moylan for their amendments in this group. Amendments 26 and 27 would require marriage value or possible hope value to be payable by a leaseholder who has fewer than 80 years remaining on their lease on the passage of the Act.

The Government’s stated objective is to make it cheaper and easier for leaseholders to extend their lease or acquire their freehold. We want them to attain greater security of tenure. The amendments are directly counter to our objective. In particular, they would prevent us from helping the trapped leaseholder—that is, a leaseholder with a short lease who is unable to afford to extend because of the prohibitive marriage value payable, and so is trapped with an asset of diminishing value.

We do not believe that the leaseholder should have to pay marriage value. For the freeholder, the marriage value that is payable under the current law is a windfall created by the freehold and leasehold interests being married earlier than they otherwise would have been—namely, at the end of the lease. It is a sum that the freeholder would not receive if the lease ran its course. Parliament has previously determined that the value should be split equally and the leaseholder should pay half of it to the freeholder on enfranchisement, but we do not believe that freeholders should continue to receive that windfall.

The leaseholder needs to enfranchise, because by its very nature a lease is a wasting asset. Without either extending their lease or buying their freehold, they will suffer financial loss as the lease runs down or lose possession when it has fully run down. Nor has the lease- holder meaningfully chosen to enter such an arrangement, since leasehold is very often the only available form of tenure outside the rented sector at certain price points or in certain locations. The lease- holder’s need to enfranchise is born out of their insecurity of tenure; that is, out of the inherent injustice of the leasehold system. Our objective is to enable them to obtain greater security and to address that inherent injustice. By not having to pay marriage value to the freeholder, the leaseholder’s ability to obtain security of tenure is much improved.

A third party who bought the landowner’s interest would not pay marriage value, and we do not think it is right that the leaseholder should pay more than that same interest. Requiring leaseholders to pay more than a third party—or, in other words, enabling the freeholder to profit from the sale to a leaseholder by comparison to a third party—is to punish the leaseholder for their need to enfranchise, and therefore to affirm the very injustice we are trying to address.

The noble Earl, Lord Lytton, and many other noble Lords brought up compensation. Under our valuation scheme, the freeholder is compensated as if the lease simply ran its course. We believe that this is adequate compensation; it is sufficient to reflect their legitimate property interests.

Amendments 26 and 27 would also further complicate an already complex system. They would create a new two-tier system, with different rules for leases that were under 80 years at the time of the Act and those that fell under 80 years thereafter. This is undesirable, as it runs contrary to our stated aim to simplify this complex tenure.

Before I move on to Amendment 29, I will answer one or two specifics. First, the issue of human rights has been brought up by a number of noble Lords. The Government consider that all provisions in the Bill are compatible with the relevant convention rights and that in the case of the provisions engaging Article 8 and A1P1 any interference is justified and proportionate. There is a GOV.UK page where noble Lords can read further information on that should they wish.

The noble Baroness, Lady Deech, also brought up phasing, which is important. Following Royal Assent, we will allow time for a smooth transition to a new system, while making sure that leaseholders and freehold home owners on private and mixed-tenure estates— which is an issue—can benefit from it as soon as reasonably possible. We will also support leaseholders, freeholders, landlords and agents to adjust to and understand the new rules. We will work with delivery partners to make sure that the necessary support is in place, including through the publication of appropriate guidance.

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[Baroness Pinnock (LD)]

My Lords, for me, this is a very technical set of amendments, but they are very important. As we have heard, this issue can have significant implications.

I always go back to first principles. One of the aims of the Bill is to make enfranchisement cheaper than it is currently, and so more readily available. However, as we have heard, that will entirely depend on the deferment rate and how it is set. My understanding was that the current deferment rate was set by the Court of Appeal in 2007, as the noble Lord, Lord Young of Cookham, said. The debate is around whether it is right for that to continue; whether another process should be used, such as that proposed by the noble Lord, Lord Borwick, in his amendment about using the bank rate as a base for setting a deferment rate; or whether, as in the Bill, the responsibility is passed to the Secretary of State to determine the deferment rate. I have to agree with the noble Lords, Lord Moylan and Lord Young of Cookham, that the latter does not seem right.

When I was investigating the deferment rate issue, I noticed that Homehold Services Ltd gave evidence to the Commons Public Bill Committee that was very telling. It criticised the fact that the “applicable deferment rate” was referenced throughout the Bill

“without specifying what this will be”.

It provided an example of what effect a change in the deferment rate could have on the cost of enfranchisement. It said:

“A lease extension … on a £200k flat with 80 years unexpired and no ground rent would be c. £4,000”.


That is the example given by Homehold Services Ltd; as it is one of the experts, I thought it might be right. It continues:

“If the deferment rate was reduced from 5% to 4%, the premium would increase to c. £8,500. At 3.5% it would be … £12,000”.


Those small changes in percentages have very high consequences for the leaseholders. This is important—that is what the evidence told me when I read it.

The argument from Homehold Services Ltd was that the deferment rate must be set no lower than that set by the appeal judgment in 2007. Otherwise, the consequence is that the rate can escalate considerably, as the noble Lord, Lord Moylan, pointed out. The cost of enfranchisement would increase, removing the ability of many leaseholders to continue with the process—contrary to one of the objectives of the Bill. Can the Minister say what consideration the Government have given to the deferment rate?

The noble Lord, Lord Young of Cookham, said that the Chancellor’s department has had a consultation on this and come up with some figures. Why are those not being adopted in this instance to set the rate in the Bill? As we have heard, it is very important to know exactly what the deferment rate will be. I do not believe that it is satisfactory to leave the applicable deferment rate to be set by a statutory instrument some time in the future. Surely, if the Government’s intentions are as they are set out in the Bill—to make it cheaper for leaseholders to enfranchise—one of the key rates must be this one. Therefore, I would have thought that we would want to see it set during the course of this Bill, rather than wait for a statutory instrument.

I have a lot of sympathy with the arguments that have been made by the mover of the amendment and others about the need for certainty here, rather than a principle and uncertainty as to the exact figure at which the deferment rate will be set.

[Lord Khan of Burnley (Lab)]

My Lords, I will speak to Amendment 42 in the name of my noble friend Lady Taylor of Stevenage, which was well supported by my noble friend Lord Truscott in his earlier remarks.

Deferment rates are a phenomenally complex area to understand, and the standard valuation method in Schedule 4 is extremely technical. The Law Commission set out options. It did not make recommendations, but the Government have chosen to allow the Secretary of State to prescribe the applicable deferment rate. I thank the noble Lord, Lord Borwick, for his contribution and for seeking to make the process for setting the deferment rate more efficient and asking for more clarity and certainty.

Our amendment is clear and would ensure that, when determining the applicable deferment rate,

“the Secretary of State must have regard to the desirability of encouraging leaseholders to acquire their freehold at the lowest possible cost”.

We understand that the 2007 Cadogan v Sportelli judgment, which has broadly set deferment rates, was made in the context of 0.5% interest rates. If the Government are minded to remain of the view that the Secretary of State should fix the deferment rates, how best should they do that? Although it may work in London, what would need to be taken into account for other parts of the country? Is there a need to set multiple rates for different parts of the country to deal with the variations?

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[Baroness Pinnock (LD)]

My Lords, I congratulate the noble Lords, Lord Young of Cookham and Lord Berkeley, on exposing and exploring the exceptions to the general rule in the legislation and its application. If we live in a democracy, the rule of law should apply to everyone without heed or hindrance, so I am grateful to both noble Lords for bringing this to the attention of the House. I hope that when the Minister responds she will be able to confirm that the Bill will apply to the Crown Estate and the Duchy of Cornwall, because it ought to.

[Lord Khan of Burnley (Lab)]

My Lords, I rise briefly to thank the noble Lord, Lord Young of Cookham, and my noble friend Lord Berkeley for providing the detail, with diligence and eloquence, in calling for what the noble Lord, Lord Young, called a level and equitable playing field for all leaseholders in that situation, particularly in relation to Crown land. I want to press the Minister on getting information from the Government about to what extent Crown and Duchy of Cornwall land would be affected by the amendments, and on providing clarification on the important and pertinent points that both noble Lords raised.

[Baroness Scott of Bybrook (Con)]

My Lords, I will briefly speak to the amendments in my name before turning to the amendments in the names of my noble friend Lord Young of Cookham and the noble Lord, Lord Berkeley. Government Amendment 83 is a clarificatory amendment. Clause 67 outlines that all of Sections 18 to 30P of the Landlord and Tenant Act 1985 bind the Crown, and that the relevant provisions bind the Crown whether or not they relate to Crown land.

As a result, Section 172(1)(a) of the Commonhold and Leasehold Reform Act 2002 will be repealed. Since subsections (4) and (7) of Section 112 of the Building Safety Act 2022 amend the 2002 Act, these subsections are no longer necessary.

I now turn to the amendments in the names of my noble friend Lord Young, and the noble Lord, Lord Berkeley. I thank my noble friend Lord Young for his Amendment 54, which seeks to bind the Crown to the enfranchisement measures in the Bill and to apply those measures to properties subject to escheat. It is a long-established principle that legislation does not bind Crown lands, including the Duchies of Lancaster and Cornwall, unless the Act expressly states so or by necessary implication. Where an Act, or a part of an Act, does not bind the Crown, the Crown can and often does agree to act in accordance with the legislation.

The current position is that most Crown leaseholders enjoy the same lease extension and enfranchisement opportunities as other leaseholders, by virtue of the Crown’s undertaking given to Parliament to act by analogy with the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993, which are not directly binding on the Crown. We also expect that the Crown will agree to act by analogy with the Bill before us. The effect will be that most leaseholders of the Crown will have the same opportunity to extend their lease or buy their freehold as any other leaseholder would, except in certain special circumstances set out in an undertaking we expect to be given by the Crown. Therefore, the outcomes the Government want to see can be achieved without legislation, and the amendment is unnecessary.

I would also like to thank my noble friend for raising an important point in his amendment about properties subject to escheat. The Government recognise that when the freehold becomes ownerless, it can cause problems for some of those leaseholders. However, the amendment would not achieve its intended aim because when a property escheats to the Crown the freehold no longer exists, and the Bill is not the appropriate place for a review of the complex law surrounding ownerless land. When a property becomes ownerless the land and buildings escheat to the Crown. If a purchaser is interested, the Crown can sell it so that it goes back into private ownership.

Leasehold and Freehold Reform Bill

Lord Khan of Burnley Excerpts

Committee stage
Monday 22nd April 2024 Lords Chamber

Moved by

[Lord Khan of Burnley]

5: Schedule 1, page 135, line 19, leave out paragraph 5
Member's explanatory statement
This amendment, and other similar amendments in my name, probe each of the categories of “permitted leases”.

[Lord Khan of Burnley (Lab)]

My Lords, I will speak to these probing amendments in the name of my noble friend Lady Taylor of Stevenage. This group of amendments further relates to different parts of Schedule 1, which provides details of permitted lease categories where self-certification applies in relation to the Clause 1 ban on new leases of houses, which the Government added to the Bill on Report in the Commons. The purported ban on new leasehold houses does not actually ban all new leasehold houses—a point that my noble friend eloquently made during the opening group. It is imperative that, through the probing amendments in this group, we emphasise that this ban appears to be a weak ban.

Each of the amendments in this group refers to a different type of exemption or permitted lease: Amendment 5 relates to leases agreed before commencement; Amendment 6 refers to shared ownership leases; Amendment 9 relates to home finance plan leases; Amendment 10 refers to extended leases; Amendment 11 looks into agricultural leases—paragraph 9 of Schedule 1 details the permitted lease definition for agricultural leases as

“a lease where the house is comprised in … (a) an agricultural holding within the meaning of the Agricultural Holdings Act 1986 which is held under a tenancy to which that Act applies, or … (b) a farm business tenancy within the meaning of the Agricultural Tenancies Act”.

Without wishing to lengthen the debate on this issue, since many points were picked up by my noble friend, can I ask the Minister opposite to let the Committee know how many current leases fit these categories of permitted leases? Do the Government expect it to stay the same going forward, especially for shared ownership? How many permitted leases do the Minister and the Government envisage over the next 10 years, for example, to which these categories will apply?

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[Baroness Scott of Bybrook (Con)]

I am not aware of the timescale for that, but I will make some inquiries and come back to my noble friend.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the Minister for her response to what was a very interesting debate. I always appreciate the breadth and depth of expert knowledge from the noble Lord, Lord Young of Cookham, in particular. He talked about the rights of shareholders and what they are entitled to, and it is important that he finished by talking about the response to the Select Committee report on shared ownership. I appreciate also the probing of the noble Baroness, Lady Pinnock, alongside myself, on the definition of agricultural leases but, for the time being, I beg leave to withdraw my amendment.

Amendment 5 withdrawn.

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[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I forgot to mention earlier how much I support the noble Lord, Lord Young of Cookham. I think the last draft Bill we had here was the Modern Slavery Act. There was a draft Bill and a Joint Committee of both Houses on it. The work of that committee ironed out all the wrinkles; we got a much better Act of Parliament, and it had a much easier passage through both Houses. The committee was able to look at the issues and deal with them, which was really important.

It would be lovely to hear the Minister say that we will have a draft Bill for commonhold. Again, that would really help us. We could have a Joint Committee of both Houses that could take evidence and work through all the problems. Then, when we got the proper Bill, we would get it much more smoothly and easily through this House and the other House.

I suspect we will not get that, but it is the way forward. Having more draft legislation enables us to sort things out. The Law Commission has worked on the two other Bills we need. We would benefit from having draft Bill committees. It would be much easier for the Government and for everybody to get stuff through and to deal with the problems we all want to solve.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the noble Baroness, Lady Pinnock, for introducing this group of amendments. It has been a fantastic, constructive debate, with some excellent points made across the Committee. I do not want to repeat the arguments, but I will speak particularly to the amendment in the name of my noble friend Lady Taylor of Stevenage, which many noble Lords have spoken about. I remind the Committee that this amendment would require the Government to set out a strategy for making commonhold the preferred alternative to leasehold, as recommended by the Law Commission in its report, Reinvigorating Commonhold: the Alternative to Leasehold Ownership.

The amendments in the name of the noble Lord, Lord Bailey of Paddington, and the noble Baroness, Lady Fox of Buckley, are both important. They all point towards a particular focus: that commonhold should be the future. We should help the move towards commonhold; it is overdue. The Government have had 14 years to deliver and have broken their promises to leaseholders, as mentioned by my noble friend Lord Kennedy of Southwark. Let me remind the Committee that an incoming Labour Government would be left to pick up the pieces should we have the opportunity to serve.

On these Benches, our commitment, as reiterated by my noble friend Lady Taylor of Stevenage, is to have comprehensive leasehold reform, and this has not changed. We will bring forward ambitious legislation to enact all the Law Commission’s remaining recommendations at the earliest opportunity if we are privileged enough to serve.

The important point made by my noble friend Lord Kennedy about not having a strategy is why, on these Benches, we have brought forward an amendment asking for a strategy as part of this Bill. It has been so long; commonhold was introduced in 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership. However, fewer than 20 commonhold developments have been established since the commonhold legislation came into force. Flats in England and Wales continue to be owned, almost inevitably, on a leasehold basis.

Unlike practice in most other countries across the world, flat owners in England and Wales continue to hold leasehold interests that will expire at some point in the future, and landlords make the key decisions about the management and costs of their buildings. Commonhold enables flats to be owned on a freehold basis, so that owners’ interests can last for ever and gives decision-making powers to home owners.

The Law Commission published its final report in July 2020, in which it makes numerous recommendations that seek to make commonhold not only a workable but a preferred form of home ownership to residential leasehold. Its recommendations include measures designed to make it easier for leaseholders to convert to common- hold and gain greater control over their properties; to enable commonhold to be used for larger, mixed-use developments that accommodate not only residential properties but shops, restaurants and leisure facilities; and to allow shared ownership leases to be included within commonhold. The recommendations would give owners a greater say in how the costs of running their commonhold are met, and ensure they have sufficient funds for future repairs and emergency work. They would provide owners with flexibility to change the commonhold’s rules, while improving the protections available to those affected by the change.

I ask the Government whether they disagree with the benefits I have just outlined? If they do not, why are they not doing this? That is the fundamental question from this debate that numerous noble Lords have alluded to. There was clearly some appetite for it a few years ago, so why are they not doing this? Have the Government changed their mind or are they just not brave enough to do it?

In May 2021, the Government had even established a Commonhold Council as a partnership of industry, leaseholders and government that would prepare home owners and the market for the widespread take-up of commonhold. I ask the Minister what has happened to that council. When did it last meet and how often does it meet?

It is widely accepted that, in terms of this Bill, we will not have commonhold brought in now. However, there is still much miscommunication around commonhold in the industry. There needs to be more education and an awareness campaign. As contributions have highlighted today, commonhold is so much easier. You do not have complex laws; you talk to one another and work problems and disputes out. You have meetings and laws are prescribed so that it is easy for people to know what to do at each step of the way. There are things that could be done with commonhold in this Bill to strengthen it and pave the way to commonhold happening en masse. The amendment in the name of my noble friend Lady Taylor would help the Government ensure that there is a strategy in this Bill and fulfil their manifesto promise, as mentioned previously. I commend the amendment in the name of my noble friend, and I look forward to hearing from the Minister.

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[Baroness Scott of Bybrook (Con)]

I thank my noble friend for that. As I have said, we are working on it, we are working on further changes and we will come back in due course.

[Lord Khan of Burnley (Lab)]

If I can just probe the Minister on the answer she gave me, that the Commonhold Council met in September, can I just confirm that she is chairing that Commonhold Council? The government website still has the noble Lord, Lord Greenhalgh. As the Commonhold Council advises the Government, what advice did it give in relation to the plan for commonhold? Surely it was not, “Take your time”, was it?

[Baroness Scott of Bybrook (Con)]

I do not have that detail with me, but I will make sure the noble Lord gets it.

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[Lord Gascoigne (Con)]

My Lords, before I start, I declare that my wife is an employee at the Crown Estate, as set out in the register of ministerial interests.

Government Amendments 19 to 22, in the name of my noble friend Lady Scott, are consequential on the repeal of the right for public authorities to block freehold acquisition and lease extension claims of houses for the purposes of redevelopment. This relates to Section 28 of the Leasehold Reform Act 1967. Removing this blocker will allow more leaseholders to enfranchise.

The power to block enfranchisement was given to authorities named on a list in the same section of the Act. The list of authorities is, however, used for wider purposes. For example, the list may be used by separate legislation when a lease has reached its end and expired. When this happens, the listed public authorities could apply to the courts to seek possession, for the purposes of redevelopment. These amendments preserve the list and its use for wider current law, as it is moved into Clauses 29 and 38 of the Bill.

Government Amendments 25, 30 to 40, and 49 are also in the name of my noble friend Lady Scott. Government Amendment 32 addresses the enfranchisement valuation procedure regarding “chained” leases—that is where successive long leases of a house are treated as one single long lease. The amendment makes it clear that the exception for market rack-rent leases will apply only where the leaseholder’s current lease is a market rack-rent lease. It will not matter whether a previous lease was a market rent lease. This will protect leaseholders and mean that in the case of chained leases, where a previous lease might have been granted for no, or low, premium, freeholders will be prevented from unfairly gaining through the new valuation scheme.

Government Amendment 39 clarifies the rules on which lease to consider when valuing a lease comprising a chain of leases—treated as one single lease—where one of them was granted for a high rent and low, or no, premium. The amendment states that it is the most recent lease that should be looked at. This will determine whether the ground rent cap should apply in the enfranchisement valuation. This will protect leaseholders and mean that in the case of chained leases, where a previous lease might have been granted for a high ground rent, but for little or no premium, freeholders will be prevented from unfairly gaining through the new valuation scheme.

Government Amendments 25, 31, 33, 34, 35, 36, 37, 38 and 40 are minor amendments that will tidy up the Bill by aligning two different sets of terminology, used to mean the same thing, across the Bill. This will help to avoid any potential for confusion and has no material impact on the valuation provisions in the Bill.

Government Amendment 30 is a minor amendment to Schedule 4. As currently drafted, the Bill would incorrectly require a valuation of a freehold for a lease extension. We are fixing this to align with the new valuation scheme, so that a lease extension will require a valuation of a notional lease. This will ensure that the provision works for lease extensions as intended. This amendment does not change the scope or effect of Assumption 3 in Schedule 4; it simply makes sure that it is phrased correctly.

Government Amendment 49 is a minor correction of a grammatical error in Clause 41 so that it refers to the appropriate tribunal. In this case, the appropriate tribunal can make orders regarding the new right for intermediate landlords to commute—that is, reduce—the rent they pay following lease extensions and ground rent buyout claims by their tenants.

Turning to government Amendments 50, 51, 52, 53 and 56 in the name of my noble friend Lady Scott, as noble Lords are aware, whenever making new legislation, it is of the utmost importance that we review any consequential amendments required to be made, including to other Acts of Parliament. We have therefore conducted a thorough review of how the reforms brought forward in this Bill will require necessary changes. The following amendments focus specifically on consequential changes resulting from Part 2 of the Bill.

Government Amendment 52 is a minor and technical amendment which reflects the movement of material from Section 175 of the Housing Act 1985 into the new Section 7A of the 1967 Act. The amendment preserves a part of the current law which deals with a number of exemptions for the valuation of a freehold acquisition under Section 9(1) of the 1967 Act which will still be available under a “preserved law claim”. This will make sure that the Bill retains the current restrictions and will remove any potential for unintentionally expanding the number of tenants who qualify for a Section 9(1) valuation and consequently for a preserved law claim. Right-to-buy tenants who qualify for enfranchisement rights will be no worse off and benefit in the same way from the new valuation scheme as other leaseholders.

Government Amendment 53 inserts a new clause, which acts as a paving amendment to introduce a new schedule. This new schedule brings together the consequential amendments to other legislation. As a result of this new schedule, government Amendments 50 and 51 remove consequential amendments to the Housing and Planning Act 1986, which are currently contained in Schedule 8; these are now addressed in the new schedule.

Amendment 56 inserts the new schedule, entitled “Part 2: consequential amendments to other legislation”. This new schedule is extensive and brings together the consequential amendments across 19 other Acts into a single place. None of the amendments makes separate, substantive changes, but, rather, the new schedule allows this Bill to mesh with and integrate seamlessly with other legislation. These consequential amendments will: remove provisions which will become obsolete as a result of the changes made by the Bill; enable freehold acquisition claims of houses under Section 9(1) of the Leasehold Reform Act 1967 to continue to operate as they do currently, while making sure that provisions in other legislation do not override our new valuation scheme; make clear how to treat the valuation of freehold acquisitions for right-to-buy tenants; preserve the current law so that non-litigation costs payable on enfranchisement do not attract stamp duty land tax, allowing the operations of stamp duty land tax to continue as intended; and make sure that provisions of other Acts governing shared ownership leases will still function properly following the repeal of some shared ownership provisions in the 1967 Act.

Government Amendments 88 and 89 are tidying-up amendments to align the terminology in Clause 77 with terminology used elsewhere in Part 5.

Finally, with sincere thanks to noble Lords for bearing with me and for their patience, I turn to government Amendment 90. This is a clarificatory amendment which seeks to deal with any potential confusion over the extent to which the Bill applies to event fees. As noble Lords may know, some leases require the leaseholder to pay a fee on certain events, such as the sale of the premises or a change of occupancy. These so-called event fees are common in specialist housing for older people. How event fee terms are drafted varies from one lease to the next, as does what the money is used for. This amendment is not concerned with the regulation of event fees; the Government have committed to making event fees fairer and more transparent and will implement agreed Law Commission recommendations when parliamentary time allows. There is a risk in the current drafting of the Bill that the specific nature and purpose of event fees may be regarded as an administration charge under Clause 81. That would, in turn, mean that they are subject to the test of reasonableness, which we do not consider appropriate for a fee of this nature. The amendment therefore sets out a definition of an event fee and makes it clear, for the avoidance of doubt, that any event fee is not to be regarded as an administration charge. I beg to move.

[Lord Khan of Burnley (Lab)]

I thank my fellow east Lancastrian, the Minister, for introducing these technical, tidying-up and clarificatory amendments.

[Lord Gascoigne (Con)]

I have spoken ad nauseam about many of these amendments. I too thank my long-lost brother from east Lancashire, the noble Lord, Lord Khan, and say what a pleasure it is to follow him.

Leasehold and Freehold Reform Bill

Lord Khan of Burnley Excerpts

2nd reading
Wednesday 27th March 2024 Lords Chamber

[Lord Khan of Burnley (Lab)]

My Lords, it is a pleasure to close this Second Reading debate on behalf of the Opposition, and I thank all noble Lords who have participated in it. The expertise, skills and knowledge on this subject in your Lordships’ House have been demonstrated in such an eloquent manner. I am sure that the Secretary of State, Mr Gove, will be delighted with the scrutiny his Bill is getting in this place.

I echo what so many others have said and add my own tribute to all the individuals and organisations which have campaigned for so long for reform in this area. It was interesting to hear the noble Baroness, Lady Thornhill, talk about her ancestral colleagues raising this issue in 1909, and my noble friend talking about leasehold being raised in the 19th century in this building. Without being subtle at all, I pay tribute to my Chief Whip, my noble friend Lord Kennedy, for his relentless and consistent efforts over a long period of time to educate our Benches, with his experience and expertise in the area.

As a number of noble Lords have pointed out, we have waited a long time for this Bill. It beggars belief that we are on to our fourth Prime Minister and we have had 10 Housing Ministers since the Government first proposed legislation on leasehold reform in 2017. We are pleased that the Bill will progress today. It will provide some limited relief to leaseholders. We welcome and support most measures in the Bill, including changes to the calculation of premiums payable for lease extensions or collective buying of the freehold, and the end of marriage value, as well as the introduction of 990-year extensions, ground rent reforms and freehold estate regulation.

The problem is that the leaseholders across the country expected so much more from the Government. We are clear that, in due course, as my noble friend has mentioned, Labour will have to finish the job and enact in full all the Law Commission’s recommendations on enfranchisement, the right to manage and commonhold. We are determined to do so.

I know the Minister is looking forward to responding to the many issues raised by noble Lords. We had a number of powerful contributions across the House. It is always refreshing to hear from the noble Lord, Lord Best, and, in relation to his property agents working group, it is a shame that his 2019 report has been largely ignored. The noble Lord is calling for a regulator, and has consistently done so, and the point was made that the industry has come out with this as one of its top requests.

The noble Lord, Lord Young of Cookham, and my noble friend Lady Andrews talked about uncertainty and lack of clarity. In her eloquent speech, my noble friend spoke about how the Bill deals with the problem but, although making some progress, it is a game of two halves; there is some good progress in certain areas, yet so much is missing, and I agree with that. She also shared personal stories and spoke passionately about the letters she received from leaseholders. I agree with my noble friend Lady Taylor of Stevenage, who said that this is a long way from what leaseholders want and have waited for. The Bill needs so much more substance added to it.

One of our key areas of concern is that there is so much material arriving throughout the passage of the Bill. As the noble Lord, Lord Stunell, mentioned, this is now becoming the norm and not an exception. How can that be effective for scrutiny, for noble Lords and Members in the other House to properly advise or amend?

I want to probe the Minister on some areas of concern which, at this stage, the Bill fails to cover. First, in 2021 the Law Commission provided the Government with updated recommendations on the archaic law of forfeiture, and yet, as many noble Lords mentioned, there is nothing in the Bill to end the unjust windfall gains exploited by freeholders. My noble friend Lady Twycross described freeholders’ behaviour as “mafia-like”, and the noble Lord, Lord Bailey of Paddington, said the way they operate is “gangster-like”.

The Secretary of State claimed that he wanted to

“squeeze every possible income stream that freeholders currently use”,—[Official Report, Commons, 11/12/23; col. 659.]

so why has this income stream been untouched? The Minister mentioned that she would be bringing the issue of forfeiture back to your Lordships’ House. This has happened too many times and it is another example of not being able to look at something from the outset. As mentioned by my noble friend Lord Kennedy, we will work with all noble Lords across the House to decide whether we can support what the Government bring back to end the forfeiture rule.

As previously mentioned by many noble Lords, Labour has committed to implementing in full the recommendations in the Law Commission’s three reports on leasehold. Why is it so difficult for the Government to do the same?

In 2021, the Government established the Commonhold Council to

“advise the government on the implementation of a reformed commonhold regime and bring forward solutions to prepare homeowners and the market”.

I understand that the council has not met for two years and, as has been discussed, there is no sign of commonhold in the Bill. Have the Government completely given up on this?

I re-emphasise that deferment rates used for calculating lease extension and freehold purchase premiums are missing from the Bill. These are crucial for determining the prices paid by leaseholders who want to buy out or extend their lease. Will the Minister bring forward more detail at the next stage of the Bill to set out the methodology for their calculation?

Almost every country in the world, apart from Britain, has either reformed or abolished this archaic, feudal model. I know the noble Lord, Lord Moylan, objects to “feudal”, but we are quoting the word that Secretary of State Michael Gove has been using. If the noble Lord looks at Hansard, the speech of the noble Lord, Lord Bailey, mentioned “feudal” more times than anybody else here.

There has long been cross-party consensus on the need to do something about this horrific situation, so why have the Government watered down their commitments to leaseholders of flats? This is a point that the noble Lords, Lord Stunell and Lord Young of Cookham, made about being on our own in not being able to deal with the situation.

Just what do the Government stand for on the Bill? It is remarkable that, in a recent interview with the Sunday Times, the Secretary of State went so far as to declare, without qualification, that he intended to abolish the leasehold system in its entirety. There have been all these extravagant promises, yet we have a Bill before us which is missing in detail, and the Secretary of State’s ambition nowhere to be seen.

Leaseholders have been badly let down. Having waited so long, and had their expectations raised so high, they are understandably disappointed at the limited Bill that we are considering today. This unambitious piece of legislation makes it clear that proponents of caution and restraint have won out over those who want to lay claim to a legacy of bold reform in this area. The Government’s poverty of ambition has real implications for leaseholders being routinely gouged by freeholders under the present system.

The scaled-back leasehold reform Bill as the Government have introduced it is a far cry from what successive Ministers have led leaseholders across the country to believe would be enacted by this Government in this Parliament. Leaseholders deserve a clear answer about the real reason why they have got just a limited Bill. We on these Benches are determined to overhaul leasehold to their lasting benefit and reinvigorate commonhold to such an extent that it will become the default and render leasehold obsolete.

We look forward to working with noble Lords across the House, as well as the Minister opposite, to do whatever we can to strengthen the Bill throughout its passage in your Lordships’ House and on to the statute book. We on these Benches want to make the existing Bill the most robust piece of legislation that we can make it, by rectifying its remaining flaws. Like many noble Lords across the House, I look forward to the Minister’s response detailing how she will fill the gaps over the remaining stages of the Bill. However, I remind noble Lords that if they do a word index of what has been discussed today, some of the key phrases coming out of today’s debate are as follows: “missing detail”, “insufficient”, “limited”, “lacking ambition”, “significant shortcoming”, “not properly thought through”, and “glaring omission”. I look forward to hearing from the Minister.

Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) (Amendment) Regulations 2024

Lord Khan of Burnley Excerpts

Monday 25th March 2024 Lords Chamber

[Lord Shipley (LD)]

My Lords, I will wait for the Minister to reply to the points raised by my noble friend Lord Scriven. In her introduction, she talked about the review that is taking place but not the timescale. It would help the House to know when the Government expect the response, which we all expect, to be produced.

I understand that this instrument maintains parity between combined authorities and combined county authorities and that it is necessary. However, I was concerned to read in paragraph 7.4 of the Explanatory Notes that

“several of the combined authorities with whom the draft legislation was discussed asked if provision could be included enabling committees to meet virtually or to reduce the quoracy requirement for the transaction of committee business from its current level of two thirds of committee members”.

I am very pleased that the Government concluded

“that face-to-face attendance of meetings”

of overview and scrutiny, and of audit, is important. It is and, having worked on the levelling-up Bill and moved amendments in relation to overview and scrutiny, and audit, I think that the Government’s position is correct.

It is very easy for those who are running overview and scrutiny, and audit, to want to reduce the workload and so suggest “Can we meet virtually?”—that means that, rather than all the conversations that take place before or after a meeting, people are only discussing these matters online—and, “Can committees have a lower turnout/attendance rate?” When we moved these matters in previous legislation, the figure of two-thirds mattered because overview and scrutiny, and audit, must be taken very seriously. I hope that the Government understand this.

We will see when we get the report that the Government are due to present to your Lordships’ House, but, as my noble friend Lord Scriven said, my eyes lit upon the words at paragraph 10.1 of the Explanatory Notes saying that:

“The Government has no plans actively to monitor this legislation”.


I think that this means relating only to whether people take up the option of allowances—it may mean that; however, it may mean something else. I hope that the Government do not mean the wider definition of “legislation”, because all the evidence suggests that the Government need to keep a very close eye on overview and scrutiny and audit, and how it is being carried out.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the Minister for introducing these regulations. It is a pleasure to follow the noble Lords, Lord Scriven and Lord Shipley, who have asked some very important questions.

The Levelling-up and Regeneration Act 2023 provides for the establishment of combined county authorities, which typically cover more rural areas; the existing combined authorities typically cover cities. The purpose of these regulation is to ensure that the same membership and proceedings provisions apply to the overview and scrutiny committees and audit committees of combined county authorities as apply to the same committees in combined authorities.

The regulations aim to create uniformity across both types of local authority in terms of committees that scrutinise the spending of public money and enable their members to be paid. We on these Benches would like to raise some specific issues. The measures mirror powers given to local authorities and the current combined authorities. We must be careful that we do not create legislation that allows combined authorities to create overview and scrutiny functions and audit functions if they do not have the specialist teams that are needed to support them properly.

This is a point my honourable friend Jim McMahon MP raised in the other place; he had no satisfactory response. We all know that when local government excels in scrutiny, it is because it has a well-resourced team that enables it to do proper, deep-dive reviews and investigations, to call in expert witnesses and to really go through things. I do not see that provision of finance in these regulations, so I would welcome a response on that.

Will overview and scrutiny committees have the power to conduct a “best value” review? Will remuneration for members of the committees reflect the type of members the committees want to attract? For instance, getting a specialised accountancy perspective may cost more than getting a residential view; will remuneration for each be the same or different? Have overview and scrutiny committees been reviewed yet? How effective have they been so far at ensuring that there are checks and balances in place on local authority spending? Who will pay for the provisions of these regulations? Will the cost come out of already-stretched local authority budgets?

Representation of the People (Variation of Election Expenses and Exclusions) Regulations 2024

Lord Khan of Burnley Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I add to what my noble friend Lord Rennard said just a few brief comments. First, on the timing, I note that when the committee considered this, the Minister in the Commons said:

“I will be perfectly frank … we could have delayed this until after the elections in May”.—[Official Report, Commons, Third Delegated Legislation Committee, 5/3/24; col. 6]


The Government should at least have asked themselves: how does this looks to a cynical public? Why rush it in just after it has been announced that they have received some huge donations? It looks like last-minute changing of the rules in favour of the Government.

I declare an interest as a Liberal Democrat. I recall the Electoral Commission commenting some years ago that we had a much larger number of donors to our party than the Conservative Party but, of course, a much smaller total of what had been given, because our donations tend to come, at best, in £5,000 or £10,000 chunks, rather than in chunks of £1 million or £2 million or more. It looks bad.

Secondly, as my noble friend has said, the Committee on Standards in Public Life report has been on the table for some time now. It is clear that the political parties ought to be coming to a consensus on what to do about that and what to set as a limit. I am sorry that the Government have not moved in that direction. I very much hope that, immediately after the next election, whatever Government come in will move on that.

Thirdly, we have a severe problem with public confidence in our democratic politics and it is a shame that the Government are not addressing this. The sense that money counts in political campaigns is part of the worry. The whiff of corruption that comes with donors being seen to be close to the Prime Minister, with big donations coming from companies that have made their money out of public contracts given by the Government—all of those things add to disillusionment with our politics, which is fundamentally corrosive of our democratic system.

I add that we now have a right-wing television station that made a loss last year of £31 million but, in spite of making a loss, is paying over £1 million to Conservative and right-wing politicians. The £340,000 increase that my noble friend mentioned is almost exactly the sum that Jacob Rees-Mogg is receiving for the few hours a week that he puts in as a television presenter. That is all corrosive of public confidence in public life, and the Committee on Standards in Public Life is correct to say so.

This SI, coming now, adds to the sense that money is what counts in British politics. We look across the Atlantic and see what has happened in American politics as big money has taken over. We do not want that to happen here, and I deeply regret that this Government are moving in that direction.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the Minister for her introduction to this statutory instrument. I offer my appreciation to the noble Lord, Lord Rennard, for his eloquent speech and detailed analysis before the House today.

The Minister will be glad to know that these Benches support the implementation of Regulation 4 of the instrument. It would be wrong for expenses incurred to protect candidates, their families and supporters to be seen as part of the cost of campaigning, and it would set a dangerous precedent if candidates requiring extra security had to forgo elements of their campaign simply to feel safe. I say that as a Member of your Lordships’ House who has unfortunately faced death threats to me and my family in recent months. I totally understand the need for parliamentarians to exercise all security measures in order to do their job and serve.

This instrument stops an obvious injustice in our electoral expense law, but our response to candidates feeling unsafe cannot simply be to tell them to open their pockets and hire security. The Government must make sure that adequate resources are in place to ensure that candidates feel secure without needing to spend their own money.

I turn to another significant part of the instrument relating to the increase to election expenses in Greater London Authority elections and local authority mayoral elections. The noble Lord, Lord Rennard, dissected the issue using percentages and statistics to a profound effect. The point that election expenses have remained the same since the introduction of mayoral elections in the year 2000 has rightly been made loud and clear by noble Lords. Sadly, that figure has failed to be updated in line with inflation. It was used during the last mayoral election, 21 years after it was introduced. I understand that a significant increase is expected, given that the limit has been untouched for 24 years.

I hope that the Minister recognises why we need to ask questions about why we are raising the limit by over 80% less than two months out from the elections. The real reason why we are seeing this rise in the proposed figures is the compound failure by successive Tory Chancellors to get inflation under control. The reality is that we have seen a huge rise in inflation under this Government.

We do not intend to oppose this instrument outright, but I hope the Minister agrees that this rise does not reflect the reality that people are seeing in their day-to-day expenses. I hope she also agrees with me that future Governments should not wait until six weeks before an election to carry out an increase that is 24 years late.

The noble Lord, Lord Wallace of Saltaire, made an interesting point about election spending across the Atlantic. In 2018, after the midterm elections, I visited Capitol Hill and spoke to a Congressman. As I was congratulating him on winning his election, he said, “Well, I can’t take too many congratulations because I have to start fundraising for my next election”. This increase in the region of £19 million to £36 million is bringing money into our politics like never before. That means a lot of people are spending time fundraising when they should be serving their communities.

I hope the Minister reflects on those points and tells us when the periodic review will be for the next uplift in expenses. Will we have to wait another 24 years for a decision, or will we get told six weeks before the next set of mayoral elections? I look forward to the Minister’s response.

[Baroness Scott of Bybrook (Con)]

My Lords, I thank noble Lords for their contributions. They have made a number of points and I will try to respond to all of them. First, I say to the noble Lord, Lord Rennard, that I remember Andrew Pennington; I remember the case and I am really sorry. To the noble Lord, Lord Khan, I say that nothing changes, does it? The noble Lord and his family are still getting death threats, which is totally unacceptable in a country as democratic as ours.

Electoral Commission Strategy and Policy Statement

Lord Khan of Burnley Excerpts

Tuesday 6th February 2024 Lords Chamber

Moved by

[Lord Khan of Burnley]

At end insert “but that this House regrets that the draft Strategy and Policy Statement has been laid, despite significant concerns raised by the Speaker’s Committee, the Electoral Commission, and the Levelling Up, Housing and Communities Select Committee, during the statutory consultation process, and the finding by the Speaker’s Committee that the statement as drafted is ‘not fit for purpose and inconsistent with the Commission’s role as an independent regulator’”.

[Lord Khan of Burnley (Lab)]

My Lords—

[Baroness Noakes (Con)]

My Lords, the noble Lord was not in his place at the beginning of this debate—not by a very long way. I do not think it appropriate for him to speak in the debate.

[Lord Evans of Rainow (Con)]

My Lords, through the usual channels we agreed that the noble Lord can speak.

[Lord Khan of Burnley (Lab)]

My Lords, I apologise to the House for my slight delay in getting here; there was an emergency that I had to deal with. I thank the Minister for her introduction and for meeting me and my noble friend Lady Taylor of Stevenage ahead of this debate.

I point to the fundamental issue sitting at the heart of this debate. We have tabled the amendment because this statement is unnecessary and the Government have provided no evidence for why it is needed. Unfortunately, nothing we have heard from the Ministers in the other place or here today proves otherwise. I pay tribute to the much-missed Lord Judge for his work in this area during the passage of the Elections Act. He tabled amendments seeking to remove Clauses 15 and 16, which provided for the policy statement we are discussing today. The amendment enjoyed overwhelming support. There was cross-party agreement that the commission’s independence is vital to the health of our democracy. In moving the vote, Lord Judge said:

“I really do not think that anyone in your Lordships’ House can have the slightest doubt about the constitutional imperative that the Electoral Commission should be politically independent—independent of all political influence, whether direct or indirect, over the electoral process”.—[Official Report, 25/4/22; col. 23.]


Clauses 15 and 16, now Sections 16 and 17, are repugnant to that foundational principle. They require the commission to have regard to—at the very lowest, to pay close attention to—the strategy and policy principles and to follow the guidance of the Government of the day. The House benefited hugely from Lord Judge’s wisdom and expertise on this issue, and we are poorer for not having his thoughts in today’s debate.

Following the passage of the Elections Act, the Government’s strategy and policy statement has been the subject of consultation. This includes statutory consultation with the Levelling Up, Housing and Communities Select Committee, the Speaker’s Committee on the Electoral Commission and the Electoral Commission itself. The Select Committee found that the statement assumes that

“Government priorities must automatically also be Commission priorities, and for the most part reads as though the Commission was an arm of Government”.

The Speaker’s Committee reported that the

“uncertainty, confusion, and new legal risks”

being introduced

“are likely to reduce the Commission’s … effectiveness, in return for no material benefit to the democratic process”.

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, I thank all noble Lords for their thoughtful consideration and input today. I will seek to address some of the points made by noble Lords, although I may not be as wide-ranging in my responses as noble Lords were in their contributions.

I agree with both noble Lords, Lord Khan and Lord Rennard, about the value of the contributions that we have had in these debates previously in this House by both Lord Judge and Lord Mackay. While the Government did not always agree with those points, we are all the poorer for their absence from the debate we are having today.

The noble Lord, Lord Khan, questioned whether the statement sets the priorities for the commission. The introduction of the statement will not replace the commission’s other duties. The commission will continue to set its own priorities; I reassure all noble Lords on that matter. The noble Lord, Lord Khan, asked what happens if the statement conflicts with the commission’s priorities. Does it override them or can the commission simply ignore the statement? Neither is the case. As my noble friend Lady Noakes set out clearly and eloquently, the duty to have regard to a statement of government policy in this area is not unusual and does not conflict with the operational independence of the commission. The duty to have regard simply means that, when carrying out its functions, the commission will be required to consider the statement and weigh it up against other relevant considerations. It is for the commission to independently decide how best to factor the statement into its decision-making processes and corporate documents.

My noble friend was right that the concern about the word “should” in the statement is misguided. In legislation, the relevant point is that the commission has the duty to have regard to the statement. That is a well-established legal principle. Therefore the use of the word “should”, or any alternative phrase in the statement, does not change anything relating to what the commission must do in order to fulfil its legal duties. The duty to have regard simply means that it needs to consider it and weigh it up carefully.

On the question of who scrutinises or enforces whether the commission has had regard to the statement, that is for the Speaker’s Committee. The Elections Act gave the committee the power to scrutinise the commission’s duty to have regard to the statement.

The noble Lord, Lord Khan, also asked about enforcement and the ability of the statement to influence the Electoral Commission’s enforcement work. The Government wholeheartedly agree that the commission’s enforcement work should be left to the commission. That is why the legislation underpinning the statement explicitly states that the Secretary of State must have regard to the statutory duties of the commission to monitor and secure compliance with electoral law, and the statement must not contain provision relating to any specific enforcement or investigatory activity. Again, I emphasise that the statement does not provide operational instructions to the commission.

The noble Lord, Lord Rennard, said the Government’s assertion that substantive changes had been made to the draft statement in response to the statutory consultation was subjective. It may be, but it was acknowledged by the Speaker’s Committee in its response to the Government that some of the changes have clarified the wording of the initial draft statement and constitute substantive improvement. At least in that regard, there is some agreement between the Government and the Speaker’s Committee, although I recognise that there is wider disagreement, which was drawn to the House’s attention by the Secondary Legislation Scrutiny Committee.

I will not dwell on some of the wider issues. Suffice to say that the statement sets out the Government’s priorities in areas that touch on matters such as voter ID, where the Government continue to be of the view that it is essential that we stamp out the potential for voter fraud. We have looked carefully at the implementation of this policy. We found that, in the recent elections, 99.75% of voters were able to cast their vote successfully and adapted well to the rollout of voter ID in Great Britain. Obviously, that is something that we will continue to monitor closely, but the signs are good.

Broader points were raised about people’s confidence in the system. My understanding is that the Electoral Commission has done some of its own research in this area. It found that 90% of voters were satisfied with the process of voting in the 2023 elections. That is in line with the most recent comparable elections in 2019, where 91% of voters were satisfied. Our own work has found that voter satisfaction with the voting process is positive, and we continue to work to ensure that that continues to be the case.

The noble Lord, Lord Rennard, raised the question of spending limits. I simply say to him that the provision for uprating those spending limits was set out and anticipated by Parliament in the original legislation. That is the mechanism by which we have uprated those limits to take inflation into account, which is not an unusual process across the business of government.

I emphasise to noble Lords that the Government absolutely agree about the importance of the independence of the Electoral Commission, but we also think it important for all bodies to be accountable. The measures in the statement are a way for the Electoral Commission to be held to account by Parliament, and we think that is a reasonable measure to take. I therefore hope the noble Lord, Lord Khan, is able to withdraw his amendment to the Motion.

[Lord Khan of Burnley (Lab)]

I thank the Minister for her response and her attempt to address the issue. I also thank noble Lords across the House for their thoughtful contributions. A number of them raised concerns about the policy statement and others about wider electoral law.

The function of the Electoral Commission is

“to ensure a level playing field between political parties”.

One team should not get to tell the umpire how to enforce the rules of the game. That is what this statement is doing and is clearly perceived to be doing, which ultimately is undermining trust in our politics.

There are issues that need tackling. There are rising considerations, such as the threat of generative artificial intelligence, the use of deepfakes, the spread of disinformation, overseas involvement, and the scraping of people’s data. None of that has been tackled today, but instead the Government are paying attention to a problem that just does not exist. Both the levelling-up committee and the Speaker’s Committee on the Electoral Commission, as statutory consultees, concluded that no statement was necessary. The levelling-up committee said that

“no evidence has been provided justifying it”.

The guidance in the Statement presented before us today would add complexity, confusion, and extra legal risk.

Nothing is wrong with the current system, in which the electoral system reports to the elected House and not to the Government. If something is not broken, why fix it? The Minister did not give us one example of something that the commission is not doing right at present which it will be made to do right and better by means of this statement. What are the problems that need addressing, and what will be different tomorrow from today? She did not give one example of that.

In view of the huge importance of this issue, I would like to test the opinion of the House and put my amendment to a vote.

Temporary Accommodation Costs

Lord Khan of Burnley Excerpts

Wednesday 31st January 2024 Lords Chamber

[Baroness Scott of Bybrook (Con)]

As I have said, on 24 January, the Government announced additional measures for local authority funding worth £600 million, including £500 million of new funding for adult and children’s social care. It means that core spending powers will be up by £4.5 billion next year. This is what we are doing to help local authorities with all the pressures on their budgets at this time.

[Lord Khan of Burnley (Lab)]

My Lords, local councils across the UK have warned that they are increasingly facing bankruptcy because of the rising cost of preventing homelessness. The National Housing Federation predicts that the number of children living in temporary accommodation will rise from 131,000 to 310,000 by 2045. It says that social housing waiting lists will grow to 1.8 million households by 2045—an increase of more than 50%. What practical steps are the Government taking to tackle the tremendous cost of temporary accommodation and homelessness?

[Baroness Scott of Bybrook (Con)]

I think I have already answered most of that. We have increased the amount of money going to the base budgets of local authorities across the country this year. We are giving money to prevent homelessness—which is as important as dealing with the issue. As I have said, we are giving money to councils so that they can build better properties and access better temporary accommodation. We are doing all we can in what has been quite a difficult economic climate. However, we are coming out of it, things are beginning to look better, and houses are being built.

Combined Authorities (Mayors) Filling of Vacancies Order 2017 (Amendment) Regulations 2024

Lord Khan of Burnley Excerpts

Tuesday 30th January 2024 Grand Committee

[Lord Khan of Burnley (Lab)]

My Lords, I too thank the Minister for introducing these statutory instruments. I concur with many of the points made by the noble Lord, Lord Shipley, in relation to district councils and their role in administrating elections, which I will come to shortly.

These regulations provide the rules for declaring a combined county mayoral vacancy, the procedure for by-elections and the rules governing a mayoral election. They do this simply by extending the existing rules for combined authority mayoral elections or by-elections to cover the new combined county authority mayors. We on these Benches supported the passage of the original orders in 2017, and we support these instruments today.

These regulations are required in advance of the first planned combined county authority mayoral election in May 2024 in the East Midlands, as the Minister mentioned, and we on these Benches want to focus on a particular point. While we are discussing the combined county authorities, I will take this opportunity to raise the importance of ensuring that all constituent councils get the opportunity to have their say. We hope that the mayors duly elected under the regulations we are discussing will take heed of the importance of that very local representation and expertise in parish, district and town councils.

As the noble Lord, Lord Shipley, mentioned, the Minister talked about a two-tier system where there is a county and a district council. She referred to how the district council presiding officers will have the responsibility to administer the election process. My concern is that, as the noble Lord mentioned, there is a lot of confusion about the financial resources to support the administration of these elections. We all know that local councils are already so stretched, and there is a lot of discussion about certain councils not having enough funds to deliver statutory services. What extra financial support or resources are the Government giving to district councils in light of the new responsibilities created by these statutory instruments?

Can I press the Minister further in relation to consultation? She mentioned a number of organisations. I have seen this repeatedly in numerous statutory instruments. What is the consultation in relation to working with the Local Government Association, and what is the overall focus with regard to the district, parish and town councils? What discussions and deliberations are there with these councils in the light of these statutory instruments being introduced? I look forward to the Minister’s response.

[Baroness Scott of Bybrook (Con)]

I thank both noble Lords for taking an interest in this debate and for their contributions. Once again, these regulations are essential in providing the rules by which all county combined authority mayors will be elected, including in May, as well as the mayor of the East Midlands if Parliament approves this new authority.

The noble Lord, Lord Shipley, asked about voter ID. Yes, that is understood. We have heard him loud and clear throughout many debates on voter ID. Obviously, we went through reviews on that, as did the Electoral Commission. I have been away, and have not been so close to it, but I will write to the noble Lord to say what the next moves are. I think we all have to agree that the first use of voter ID—I know it was in a smaller area—was successful, but we should never be complacent. We need to keep listening and learning from it.

On first past the post, which is another thing that the noble Lord often brings up, there is not going to be a change. The Government are very clear that the first past the post system is the most straightforward way of electing representatives. It is well understood by the electorate of this country. It makes it so much easier for the public to express a clear preference and reduces a lot of the complexity that we have seen recently in police and crime commissioner elections. There is no plan to change or relook at that; we had that discussion again on the recent Bill on elections, and we will not be looking back at it.

The patchwork of differences across the country is an interesting issue. The problem is that the whole of local government in this country is complex anyway, and reflects the different areas: cities, rural areas, and towns with rural areas around them. Government is trying to reflect that and give local people some choices about how they look in a bigger and more overall way at their area, rather than at small—down even to county —areas. As things change in this country, we are seeing bigger areas of economic development. We need to look at where the work patterns and travel-to-work patterns are. We need to look at all those things as well as at the traditional districts and counties that we have seen in the past.

I think it is up to local people. They have choice through the Levelling-up and Regeneration Act—they now have choices on how to plan for the future—but we in government have no further plan to look at the overall structure across the whole country.

On district councils, I will come back to the noble Lord. As far as I know, there has been nothing further since the Act came into force, but I will go back and see what discussions have been had with the district councils. That links to something brought up by the noble Lord, Lord Khan: do we talk to the district councils? Yes, we do. We talk to the LGA, the District Councils’ Network and the County Councils Network. They are part of the team that looks at these things, and part of our top stakeholder group, but I do not know what the latest conversations with particularly the district councils are.

As far as audit, risk and scrutiny are concerned—all important parts of local government—as we get bigger and there is more money to spend, people expect that money to be accounted for and to be accounted for quite publicly. In the new combined county authorities, while it is the upper tier that is doing it, the same audit requirements will be there as for other councils as they exist now. There must be scrutiny committees and audit committees, and they must have a risk register. I do not think it is any different but, in my opinion, we need to continue to challenge local authorities and to make sure that they are accessible to local people to know what their money is being spent on.

Quite rightly, the noble Lord, Lord Khan, talked about consulting with local people about any changes. I have been through that consultation; it is tough at times, but it is important. It will always be part of our process that local people are consulted in those early stages of changing their council structures, if that is what local people want. It is up to local elected representatives, whether district, county, borough or wherever they come from, to listen to local people before any changes are made. We expect that to happen.

In conclusion, these regulations are essential— as I said—to progress the devolution powers and to enable the election of combined county authority mayors. I commend both sets of draft regulations to the Committee.

Representation of the People (Postal and Proxy Voting etc.) (Amendment) Regulations 2024

Lord Khan of Burnley Excerpts

Tuesday 23rd January 2024 Grand Committee

[Lord Rennard (LD)]

My Lords, the Minister need not fear that I will ask any particularly difficult, tricky or awkward questions on this legislation. There is a simple explanation for that: I could not think of any. I looked at the proceedings in Committee in the other place, and nor could anyone there, so I will confine my remarks simply to a question and an observation. The observation is that we seem to have had a lot of changes to election law in the year before a general election. Does the Minister accept that there may be a greater risk of an error in the conduct of our elections as a result of the large number of changes to election law being made in the year before a general election, and with local elections in May? Could she tell us—perhaps she will write to us in due course—how many pages of legislation are in the secondary legislation instruments brought before us in the last 12 months? It seems a lot of pages.

[Lord Khan of Burnley (Lab)]

My Lords, I thank the Minister for introducing this statutory instrument. It corrects very minor errors in a previous statutory instrument. We are pleased that the Government are correcting the errors and understand why this instrument must be introduced. The Minister outlined the huge task as a result of the changes made in the Elections Act. I have sympathy with her in the task of introducing so many complex changes in electoral statutes. If there are other mistakes in the Elections Act that the Government want to rectify, we are happy to support them.

I have a few questions for the Minister. Is the department now examining instruments relating to the Elections Act to ensure that all other transitional arrangements are correct? Do the Government plan to lay any further regulations relating to the Elections Act prior to the elections in May? Has the Minister discussed the regulations with those responsible for implementing them?

Another concern on these Benches is that we have already stretched electoral administrators up and down the country, who are getting their heads around the changes that the Government are making, sometimes rectifying errors. This is deeply concerning. Will those electoral officers be further resourced? How will they be strengthened to deal with the impacts and changes that have been outlined today? The noble Lord, Lord Rennard, spoke about this. I look forward to the Minister’s response.

Intergovernmental Relations Within the United Kingdom

Lord Khan of Burnley Excerpts

Thursday 18th January 2024 Lords Chamber

[Lord Khan of Burnley (Lab)]

My Lords, as a proud Lancastrian it is a pleasure to follow a Yorkshireman, the noble Lord, Lord Wallace of Saltaire—although he did say that Yorkshire is a mess, which was an interesting statement. I was looking at the noble Lord, Lord Gascoigne, a fine Lancashire man, for solidarity.

I thank the noble Earl, Lord Kinnoull, for securing this debate and introducing it in such an eloquent manner. I thank noble Lords from across the House for making informative and useful contributions, many of which came from great expertise and experience. This debate is timely, and there are numerous questions and concerns that the Government need to address.

Since 1998, intergovernmental relations have been an important yet understudied part of the United Kingdom’s new machinery of government, once described by the noble Lord, Lord Hennessy, as the “hidden wiring” of the UK’s territorial constitution. The King’s Speech late last year promised to promote the integrity of the union and to strengthen the social fabric of the United Kingdom. This can be achieved only through a strong working relationship between the nations and regions of the UK. Unfortunately, the Government have often ridden roughshod over devolved Governments, leaving the union less stable and less secure than ever before.

Working in co-operation is always better than conflict, and we need the structures and institutions of shared government to drive this forward. Each part of the UK should have an equal and respected voice in decision-making, giving those responsible for delivery the freedom to innovate. While the specific policy solutions may vary across the regions and nations of our country, the UK also needs an underlying vision and a Government who are prepared to work in partnership with devolved Governments and local leaders to achieve this—a point which so many noble Lords across this House have made in this debate.

Today, as we speak, we are witnessing 100,000 people striking in Northern Ireland, with no indication of the formation of an Executive, and the deadline to achieve this being midnight tonight. What update can the Minister provide on the situation in Northern Ireland? What preparations are the Government making to address the situation? Do the Government foresee a new election in Northern Ireland? When can we have a functioning Northern Ireland Government? Can we have an update on this situation?

Northern Ireland’s involvement in the new intergovernmental relations structures has been impacted by the absence of a fully functioning Executive or Assembly since February 2022. We understand that senior civil servants have been attending intergovernmental review meetings in the absence of ministerial representation. Their attendance at ministerial meetings is in an observational capacity. What impact are these observers having on intergovernmental relations? The noble Baroness, Lady Stuart of Edgbaston, made a point about the great work that civil servants are doing in different parts of the devolved Governments, but what impact are they having here, as observers? After the intergovernmental review, a new structure was established in January 2022, providing ambitious and effective working to support our Covid recovery, tackle the climate change crisis and inequalities, and deliver sustainable growth. How can this be achieved when there is observer status in Northern Ireland? How can you have dialogue, strategy and sustainability discussions when there is only observation from one particular side?

What is the Minister’s response to the Welsh and Scottish Governments’ view that progress and momentum in implementing the new ways of working and mechanisms agreed as part of the view were slower than anticipated? The Welsh Government said that this was because of

“the instability of the UK government over this period and frequent UK ministerial changes”—

a point that the noble Lord, Lord Wallace, also referred to.

We note that the Independent Commission on the Constitutional Future of Wales was taking evidence and its report has been launched, as mentioned today by the noble Lord. What is the progress on evaluating recent practice in terms of meeting the intentions set out in the review and is the new machinery being used to operate a partnership approach?

The commission’s report was published today. It also talks about the “fragility of intergovernmental relations” as one of the “pressure points” of devolution, and states:

“The machinery for inter-governmental relations operates at the discretion of the UK government, and its reduced engagement in recent years has coincided with its willingness to override conventions”.


I refer noble Lords to the operation of the Sewel convention, particularly in Wales, whereby the consent of the Senedd is required for UK Bills that impact on devolved powers, which is of concern to the Welsh Government. In Wales, the Government reported late engagement from Bill teams in the UK Government and a reluctance to share information and drafting, and called these

“symptoms of a disregard for the legitimate interest the Welsh Government and Senedd have in UK legislation which touches on devolved issues”.

UK Bills introduced during 2022 that the Senedd refused consent to include the Northern Ireland Protocol Bill, the Genetic Technology (Precision Breeding) Bill, the Trade (Australia and New Zealand) Bill, the Procurement Bill and the Retained EU Law (Revocation and Reform) Bill. The UK Government has ignored the Senedd’s refusal of consent, in breach of the Sewel convention. In 2023, the Welsh Government also recommended that consent be withheld in relation to the Strikes (Minimum Service Levels) Bill, the Illegal Migration Bill and the majority of the Levelling-up and Regeneration Bill.

At a recent meeting of the Legislation, Justice and Constitution Committee, the Counsel General was asked to comment on Sewel in relation to the new dispute resolution process, which a number of noble Lords have referred to. He said:

“The crux of the problem with Sewel is … the lack of codification of Sewel—the lack of clarity as to what it means, and the diverse ways in which it is treated”.


These disputes are problematic and

“ultimately, a political process of a constitutional disagreement that doesn’t have a real justiciable status”

is not enough.

The new dispute resolution mechanism introduced after the intergovernmental relations review is still relatively untested—a point that the noble Earl, Lord Kinnoull, mentioned at the start of his speech. The Senedd research service noted that a dispute between the Northern Ireland Executive and the Treasury appeared to be the only known use of the new dispute procedure so far. Can the Minister outline where else the dispute mechanism has been used and the nature of any dispute?

We have heard some excellent contributions across the House, and recurrent themes have been highlighted during the debate. I conclude by agreeing with what the UK Government said in September last year:

“The need for effective intergovernmental relations … has never been greater”.


This is understood to be in light of Brexit, Covid-19, climate change and international conflict. However, the lack of stability at the heart of the UK has been detrimental to intergovernmental relations. In practice, implementation of proposals has been disrupted by such instability. Does the Minister agree that having five UK Prime Ministers in the space of seven years, and constant reshuffles, has had a negative impact on effective intergovernmental collaboration?

The noble Baroness opposite mentioned the three-tier structure, as well as giving a very strong perspective in relation to Scotland. How is the three-tier system working, and what are the operational issues with this?

I agree with the noble Baroness, Lady Humphreys, that this cannot be dealt with by a sticking plaster approach. We need a stable and sustainable approach—a point that my noble friend Lady Andrews talked about. The theme and message for me is the phrase used by my noble friend Lord Murphy when he said that parity of esteem is needed. Better relationships between the Governments will eventually strengthen the union.

In concluding, I say that respect, good will, strong relationships and shared objectives across our nations are needed now and, unfortunately, they are missing from the Government’s approach. I look forward to hearing the noble Baroness’s reply.