Housing: Manifesto Commitment

Lord Naseby Excerpts

Wednesday 26th October 2022 Lords Chamber

[Lord Deben (Con)]

My Lords—

[Lord Naseby (Con)]

My Lords—

[Lord Haselhurst (Con)]

My Lords—

--- Later in debate ---

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords—

[Lord Naseby (Con)]

My Lords—

[Lord Haselhurst (Con)]

My Lords—

[Baroness Williams of Trafford (Con)]

My Lords, the more that noble Lords row with each other, the less time there is to answer questions. I did say my noble friend Lord Naseby next, and then the noble Lord, Lord Foulkes.

[Lord Naseby (Con)]

My Lords, is this not now a golden opportunity for the new Government to recognise the success of Milton Keynes as a new town/city, Northampton as a new town, and Welwyn Garden City? That concept can be modernised and is an opportunity —to pick up the point made by my noble friend—for social housing to be in the lead? Should not every one of the roofs in these new towns be appropriate for dealing with Covid, et cetera?

[Baroness Scott of Bybrook (Con)]

New towns have been around for many years, and are a part of the solution if local people are happy to have that in their area. I will take my noble friend’s views back to the department; we will discuss it further and I will talk to my noble friend.

New Homes Commitment

Lord Naseby Excerpts

Tuesday 21st June 2022 Lords Chamber

[Lord Greenhalgh (Con)]

I recognise that we cannot look at housing in isolation; we need to get investment in the infrastructure and other factors to allow for growth. It is a good start to have had a £10 billion investment in housing supply since the start of this Parliament, but there is also investment to enable brownfield sites to be built out rather than the—sometimes easier—greenfield sites. We want to see brownfield development and that requires infrastructure, and the money is in place to do precisely that.

[Lord Naseby (Con)]

My Lords, is it not time that we had a meaningful new towns project which would benefit both owner-occupation and social housing throughout the United Kingdom?

[Lord Greenhalgh (Con)]

I think we need to find ways of coming up with new town projects but to do that we need the infrastructure, the transport, the roads and the rail, and that is why we recognise that a programme just to build homes is not enough. We need to get that in the round, and we are taking it forward as part of the Levelling-up and Regeneration Bill in this Session.

Elections: Multiple Voting

Lord Naseby Excerpts

Tuesday 14th June 2022 Lords Chamber

[Lord Greenhalgh (Con)]

The purpose of the Elections Act was to ensure that we did not have this arbitrary cut-off point. Those living abroad have always been able to vote in elections for up to 15 years, which we have now extended as part of that legislation. People cannot vote in local elections if one of their properties is, let us say, in Spain, so I do not think that arises.

[Lord Naseby (Con)]

My Lords, as one who was first elected to the other place with a majority of 179, after three recounts, and later in that year by 141, is not the proposition from the noble Lord on the Liberal Benches correct? Otherwise, there will be tactical voting by students in marginal seats.

Building Safety Bill

Lord Naseby Excerpts

3rd reading
Monday 4th April 2022 Lords Chamber

[Lord Blencathra (Con)]

My Lords, simply look at the Bill that came from the other place, then take a look at what we are sending back. It has changed beyond all recognition. I pay tribute to my noble friend the Minister and his boss, my right honourable friend Michael Gove, for that extraordinary transformation. I also thank my noble friend Lord Young of Cookham and noble Lords and noble Baronesses on all sides of the House, and the right reverend Prelate, for the many amendments they have made, many of which have been accepted by the Government. We are sending back some important amendments that the Government might not quite like as much as we would like them to. However, I appeal to the other place to accept them and not to remove them, especially the zero amendment proposed by the noble Baroness, Lady Hayman of Ullock.

The Government, apparently, have had legal advice on the dangers of breaking the ECHR if we changed the cap figures, but we heard, I submit, even better legal advice that that is not so. In any case, as the noble Lord, Lord Marks of Henley-on-Thames, said, some developers will challenge the figure in court no matter what level the Government set.

We also need to do more on enfranchised leaseholders. They were encouraged to purchase their freeholds, and they must not be treated like rapacious landlords. Nevertheless, this Bill now gives leaseholders infinitely better protection. With a few further tweaks it could give them full protection. When I see the contribution my noble friends have made to the Bill, I am reminded of the words of Shakespeare’s Julius Caesar, or almost his words:

“Antonius! … Yond”


noble Lord, Lord Young of Cookham,

“has a lean and hungry look … Let me have men about me that are fat”.

I commend this Bill and hope the other place will improve it further.

[Lord Naseby (Con)]

My Lords, as one who has been involved in housing policy for over 50 years, I pay tribute to my noble friend for his time, care and effort, and his listening qualities, which have not always been a feature of those on either Front Bench. I offer sincere thanks to my noble friend.

[Baroness Pinnock (LD)]

My Lords, I start by thanking the cladding and building safety campaigners who have been resolute and unremitting, since the Grenfell fire tragedy, in pursuing justice for leaseholders and tenants. Without them, this Bill would not be in the shape it is today. It has been transformed but not transformed enough, as we have heard from others. Across the House, people have worked together to make it a better Bill. I thank them for the way we have worked together to make improvements, but it is not yet enough.

I, too, urge the Government to accept the amendments that we accepted on Report. I, for one, am not giving way. I hope that the Government, at the other end, will say that the argument has been made for a nil cost to all leaseholders. That is where I shall firmly stand to the bitter end. Leaseholders are the innocent victims; they must not pay a penny.

I pass on my thanks to the Minister for being so free with his time, discussing the various amendments, and to the officials from various parts of the Government for explaining the detailed changes that had been proposed. Particularly, I thank Sarah Pughe in the Liberal Democrat Whips’ Office, and my noble friend Lord Stunell. Without their expertise, knowledge and experience, we would not have been able to do the job that, between us, we have done. I look forward to the Bill coming back, having been accepted by the Commons.

Building Safety Bill

Lord Naseby Excerpts

Committee stage
Monday 28th February 2022 Grand Committee

There is nothing there about cladding and non-cladding, but I distinctively heard my noble friend, when he rattled through his opening speech, use the words “non-cladding”. I just wonder where in the amendments that distinction appears. I am sure it is there somewhere, but for the life of me I have not been able to find it. As I said, there was a lot in my noble friend the Minister’s speech that I want to look at and digest. In the meantime, I beg to move Amendment 56.

[Lord Naseby (Con)]

My Lords, I shall speak to my Amendment 65, which would modify the major statement in government Amendment 64. I was greatly encouraged when my noble friend the Minister sent the letter on 14 February. I thought, “Ah, here’s a good letter”, because it says clearly:

“The key principles that I outlined were a more proportionate approach to building safety risk”,


and

“the need to protect leaseholders”.

That is in the first paragraph. The second paragraph even starts:

“I committed to protect leaseholders”.


So I thought, “Oh, good, we’ve got there now”. But then, of course, I looked at the letter in more detail—and what is proposed in new subsection (2)(d) proposed by government Amendment 64 will have a major adverse effect on buy to let.

I remind my noble friend, who has been in housing for many years, as I have—I first got elected to the London Borough of Islington in 1968—that it was in 1993, under the Major Government, that the whole concept of buy to let was produced. That was at a time when, as all of us who were involved in housing would have known, there was a terrible situation for private tenants. They were basically exploited. We remember Rachman, De Lusignan and the others at that time. Here, it was not launched with trumpets or anything; nevertheless, it started in 1993 and it built up, because it offered good-quality housing for people to rent in the private sector. We now have a situation today, which I find really amazing, having done a bit of donkey work on this, where there are more than 2 million buy-to-let properties that are mortgaged and successful.

I will not take much of the Committee’s time, but I will just highlight that over the past 25 years, landlords have made a tangible improvement to the whole rented sector, so now we have a situation where millions of tenants today are proud of their home, although they have it on a buy-to-let basis. That is all fine and dandy, except that when you look at what is actually proposed at the moment, the net result is that, basically, buy-to-let landlords, or some of them, will not qualify for the remit of the cladding scheme that was announced in January. If they rent out no more than one flat in a block, they are okay, but if they have any more, they are in trouble. I have had strong representations, of course, from the National Residential Landlords Association, which states:

“We still fail to see why the Government is making it so difficult for buy-to-let landlords who are leaseholders to access the same level of support as all other types of leaseholders.”


The reality is, if you are a buy-to-let landlord renting out however many flats, or an owner-occupier leaseholder, you have been treated unfairly by the developers that installed dangerous cladding on blocks of flats. What Her Majesty’s Government are doing, as matters stand in Amendment 64, is introducing a very dangerous principle, basically stating that there are worthy and unworthy victims of the cladding crisis. I ask my noble friend to reflect that the Government should make it clear that any and all leaseholders should be treated the same. That is why I have tabled this amendment. I have not sought any publicity on this at all, but people have read the Bill, thankfully, and I have just brought a small sample of the huge number of emails I have received. Each is an indication of a case. The first is from a retired solicitor—so this is a perfect gentleman—who had a flat on buy to let. His wife bought one as well, and they now have two flats and are facing a problem. He says it is vital that all leaseholders are treated equally, and I do not think I can disagree with that.

Another one comes from a lady who was affected. She had a one-bedroom flat, which she bought in St Albans when her mother died, and then they bought one more, yet they are caught again. Then there is one from a lady called Katherine Wilde in Croydon. A single-parent family, two sisters, bought a flat jointly, then another flat jointly, then another flat jointly. They are caught. I could go on, although I have not brought many. It is clear. This is from a gentleman called Paul Bullock. It is clear that all these people are victims of this national scandal. As further evidence from the Grenfell inquiry comes to light, it is obvious that many parties have played a role in creating this crisis, the only innocent party being the leaseholders who purchased the flats after being guaranteed that everything was in order, only to find out that this was not true. There are moving words at the end of this email:

“Personally, I am caught up in this mess. I can’t even start to explain the toll of the past two years on my physical and mental health”.


I will not read the rest, but I will say to my noble friend that there is a problem here and I hope that he will have another look at it. I think that when he was introducing the letter of 14 February, he said that some of it had been done in a bit of a rush—so I think there ought to be an opportunity to have another look at this issue.

[Lord Blencathra (Con)]

My Lords, my Amendment 59 is concerned with the first two lines of paragraph 5 of Schedule 8, which begins:

“Building safety costs may be taken into account in determining the … building safety charge payable by a relevant tenant”.


You can bet your life they will be. Leaseholders know that every other week a notice comes from the managing agents to say that the freeholder or landlord has decided that the corridor lighting needs updating, new lines need to be painted in the car park, the entry phone system needs replacing and so on, ad nauseam. This schedule gives them another excuse for possibly unnecessary, gold-plated, so-called safety improvements and contracts let to their favourite contractors. That is why my amendment seeks to add these words at the end of the sentence I have just quoted:

“only if they are below a maximum as specified in regulations made by the Secretary of State”.

It is another plea for the Government to take a permissive power so that, if it proves to be the case that service or safety charges have been jacked up, they can use a regulation to put a control on it.

These regulations may not be necessary—I hope they are not—but the power should be there just in case it is needed. If your Lordships just google “leasehold scandals”, up will pop names such as McCarthy & Stone and Peverel, now calling itself FirstPort—I can assure your Lordships that Mr Tchenguiz has not made his millions by being nice to leaseholders.

My Amendment 66A adds to the definition of “relevant defect” in new subsection (2) in Amendment 66. At the moment it says:

“‘Relevant defect’ means a defect as regards a building that … arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and … causes a building safety risk.”


I propose to add at the end:

“which may relate to but is not limited to … external cladding … internal walls and the materials contained inside any walls … fire doors … balconies … a lack of sprinklers, fire detection and control systems … inadequate escape routes.”

Quite simply, I believe that builders should pay for all fire safety remedial work and not just external cladding. But I also hope that common sense can prevail and the Government can lay down the law that wooden decking on a steel balcony is not a fire risk, and that potentially flammable materials sandwiched inside non-combustible inner and outer walls do not need to be removed. There are a lot of excessive suggestions on fire risk materials going round at the moment, and that needs to be stamped on.

My Amendment 86 seeks to insert a new clause to prevent managing agents charging excessive amounts for undertaking fire risk assessments or preparing applications for assistance. In particular, I suggest that the regulations may include—again I stress “may”:

“setting limits on the charges managing agents may impose for fire risk assessments … setting limits on the charges managing agents may impose for making applications to the Building Safety Fund or any other source of funding for fire risk remedial works … setting limits on the charges managing agents may impose for inviting tenders for fire risk remedial works … preventing service charges being inflated by fire risk remedial works.”

I suggest that these are all reasonable. My noble friend the Minister knows what managing agents are like. If we are not careful, this Bill will be a licence for them to print money: charging for the work of the accountable person and for drawing up the strategy, coming into all our homes to look for safety dangers, and a host of other things they will be able, quite legitimately, to charge leaseholders for. While they can do so, I suspect that the charges will be excessively high. Thus, the backstop of a regulatory power is essential.

I commend Amendment 131 from my noble friend Lord Young of Cookham. He made a compelling case for a short, sharp inquiry into the charges for fire safety work which leaseholders have had to pay and which are not covered by this Bill. That is eminently sensible stuff.

Building Safety Defects

Lord Naseby Excerpts

Monday 7th February 2022 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I cannot give a guarantee around retrospective application, but through these measures we are ensuring that many hundreds of thousands of leaseholders do not face eye-watering bills. These measures are about ensuring that that does not happen.

[Lord Naseby (Con)]

Is my noble friend aware that this problem has been with us for over four years? Is he confident that this demand that Her Majesty’s Government are making on the construction industry is the right way forward? Using the law, as every Member of this place knows, takes an awfully long time. Would it not be better if everyone sat down round the table and found an answer without implying the use of a new law?

[Lord Greenhalgh (Con)]

My Lords, that is an incredibly helpful point, because in fact it is exactly what I did on Friday. On Friday we sat down to a virtual meeting with the developers and sought precisely that: to understand how we could ensure that we brought resolution to this crisis, which has taken over 30 years to evolve. In seeking voluntary contributions, that is precisely what is happening: engagement at every level.

Building Safety Bill

Lord Naseby Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Naseby (Con)]

My Lords, it has been my privilege to be involved in public and private housing for over 50 years now. I was chairman of the housing committee in the London Borough of Islington from 1968 to 1971 and represented Northampton South—the main, central part of Northampton—on a fourth-generation development plan. I looked back on the Bills that have passed since I got into Parliament in February 1974 and can think of no Bill more important than the one before us. Having done that little bit of research, I am thankful that my noble friend on the Front Bench will take charge of it and see us through the challenging package ahead of us.

I want to pick out one or two areas that have not been spoken about this evening. Property protection is not a consideration of the fire safety building regulations. Currently, the fire safety building regulations are based on a consideration of life-saving only—and quite rightly so. The life-saving limitation means that the sole focus of the fire safety building design is the safe evacuation of all occupants in the event of a fire. While life safety is clearly paramount, the consequence of this approach is that it leads to the design of disposable buildings—not the most technical term in the world—which too often results in disproportionate damage when fire strikes. My understanding is that Her Majesty’s Government have commissioned some research to assess the merits of a property protection consideration. I hope we can discuss that in Committee, and I look forward to taking part in that discussion.

Being at the ripe age of 85, I was going to say something about safer stairs, but my noble friend Lady Eaton covered it more than adequately. I back her up and will be happy to join her if she tables an amendment to enshrine British Standard 5395-1 in law. I will support her on that.

I came relatively fresh to this whole business; obviously, I was well aware of the tragedy of Grenfell. The more I look it, the more I think we now seem to be in slight danger of differentiating one type of leaseholder from another. In a Bill as comprehensive as this, that would not be a sensible move. Fundamentally, all leaseholders—whether owner-occupiers or individual landlords—should be treated equally. Not to do so is not only unfair but, I suspect, unnecessary. Buy-to-let landlords and owner-occupier leaseholders face the same problems with developers, through no fault of their own. We also find certain developments where there is a mixture, so in my judgment it would be invidious to deal with just one category rather than another.

On the Bill as it stands, the “golden thread” referred to by Judith Hackitt in her final report is very welcome. It seems so vital. I have had the privilege of working in the aviation industry and being an RAF pilot. Every plane that is made has a logbook and a life history of that plane. We see how vital that is, even in today’s world with sophisticated engineering, given the tragedy of the recent Boeings that crashed. You need that history to know how to change and develop. I think it will be welcomed by the industry.

I also looked at the construction products and testing facilities. Some industries test at great length, but I am afraid it is very weak in this industry and we really need to toughen that up. The original problem at Grenfell probably lay with that cladding and its combustibility.

That is enough from me, other than just to make one point. The Bill needs to be implemented successfully. There needs to be a situation in which industry is fully prepared to operate under the new regulatory scheme and it is very important for industry to be provided with clarity and timescales. I know the Secretary of State feels very strongly about this but in my experience, as someone who has been in politics a long time, it is no good shouting at people; you have to work with them. You have to be a bit devious and find a way through the back door. I urge my noble friend to persuade his right honourable friend to do just that.

Building Safety Defects

Lord Naseby Excerpts

Wednesday 5th January 2022 Lords Chamber

[Lord Greenhalgh (Con)]

We have quite a lot of the data on the number of medium-rise buildings, and there are far more medium-rise buildings than there are high-rise ones. The figure of 77,000 is broadly correct, but the number within that requiring remediation is very small indeed. I cannot give the noble Baroness those statistics, but I have seen our survey work. The number requiring mitigation is also very small. Frankly, the Royal Institution of Chartered Surveyors seems to be more interested in how it can raise money for surveyors than being proportionate in terms of the approach towards this crisis.

[Lord Naseby (Con)]

Nevertheless, does my noble friend recognise that there is great hardship for significant numbers of people who are stuck in the middle? I speak as a former chairman of the housing committee in the London Borough of Islington. I am sure that local authority housing departments would, if it were put to them properly, be willing to look at taking over a limited number of flats to ensure that those who have to move can move.

[Lord Greenhalgh (Con)]

As someone who has served in London local government in, I think, Lambeth—

[Lord Naseby (Con)]

No—Islington.

Grenfell Tower: Demolition

Lord Naseby Excerpts

Monday 6th September 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I want to be absolutely clear that this was not a briefing by the Government; it had nothing to do with the Government. On Friday, I had a meeting where it was made very clear that no decision had been taken—so I was as surprised as the noble Lord by what we read in the Sunday papers and subsequently. The Government have embarked on a phase of concentrated engagement on the future of the tower; this started around a year ago and has intensified since May, when we published a series of engineering reports that included a peer review of the major review that was carried out by Atkins. I can certainly continue to make the point that the Government will proceed by very carefully engaging with and consulting the community on this very sensitive matter.

[Lord Naseby (Con)]

Is my noble friend aware that this site reminds one of the failures of building safety provisions? It has been there for too long now. The noble Lord on the Opposition Benches is right that we need to move on. Against that background, will my noble friend make sure that the project he has just outlined does not drift and that, certainly this side of Christmas, there will be a clear and concise provision of what is to happen?

[Lord Greenhalgh (Con)]

My Lords, I underline that no decision has been taken, but we are aware that we have had unambiguous advice from engineering experts that the tower should be carefully taken down. We have published those studies, but I reiterate that no decision has been taken. Obviously, a decision on this cannot be put off indefinitely, and one will be made in due course—but not via the media.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Naseby Excerpts

Committee stage
Monday 14th June 2021 Grand Committee

[Baroness Grender (LD)]

My Lords, this group of amendments is an attempt to ensure that enforcement bodies have sufficient financial long-term sustainability. It also ensures that there are appropriate deterrents in the Bill to incentivise freehold landlords to understand just how serious a breach will be and the impact it will have on their current portfolio of properties. The additional aim is to create an incentive for local authorities to pursue financial penalties.

Today, of course, is the fourth anniversary of the Grenfell Tower fire where 72 people lost their lives, and I am sure that we are all thinking of those bereaved families, survivors and residents as they remember their loved ones. That tragedy underlines just how important it is that homes are safe and secure, and one of the first lines of defence is the enforcement authorities.

In addition to moving Amendment 14, I will speak to Amendment 15. While we appreciate that the Minister stressed at Second Reading that the fines would be for each individual lease, the danger remains that an enforcement authority will receive only £5,000. Indeed, Clause 9(3) states:

“Where the same landlord has committed more than one breach of section 3(1) in relation to the same lease, only one financial penalty may be imposed on the landlord in respect of all of those breaches committed in the period”.


Several noble Lords at Second Reading raised the issue of enforcement and resources to enforce. Local authorities’ trading standards departments have experienced staff cuts of at least 50% since 2010. It is not unusual for skilled and experienced—and therefore more expensive—staff to have been replaced with less skilled and lower-salaried staff. Sometimes trading standards has been contracted out to third parties completely. Local authority trading standards departments need greater sustainable long-term resource and that means generating greater levels of income.

Therefore, there should be a wider range for the fines and a higher start point for the penalty. The amount should be consistent with the Tenant Fees Act 2019 where landlords breach Sections 1 and 2 of the Act on more than one occasion. If you are a leaseholder, you are not a home owner, and therefore the levels of potential fines should surely be similar to those for rogue landlords in the Tenant Fees Act. The Bill relies on local weights and measures authorities—namely, trading standards departments—to oversee this new law. The Government will already be well aware of the sluggish approach to fining and banning rogue landlords under the Tenant Fees Act 2019. When originally launched, the Government predicted that there were 10,500 rogue landlords; so far, only 43 have been registered. Speak to many local authorities and they will report that an operation of this nature requires early up-front investment, but other priorities such as social care with chronic records of poor funding will inevitably come first. As Liam Spender, a trustee of the Leaseholder Knowledge Partnership, points out:

“It is likely most local authorities will decline to get involved, as they do in most private sector housing disputes now, on the grounds that leaseholders have civil claims they can use to recover any prohibited ground rent.”


Waiting for the next local government settlement is a short-term solution and, frankly, unlikely to solve this problem given other competing demands on local authorities. Now the Government are adding another task with too limited financial reward: as the fines currently stand in the Bill, the incentive to take the necessary action to fine a freeholder will not be worth the effort.

Amendments 14 and 15 would raise the minimum financial penalty from £500 to £5,000 and the maximum financial penalty from £5,000 to £30,000. The potential of greater fines would give local authorities an opportunity to invest in this operation, charge rogue landlords and freeholders and therefore sustain a longer-term, fully budgeted operation. If the Government are opposed to this increase, perhaps the Minister could share what level of financial penalty would make it worth while for a local authority to pursue a freeholder. If the argument is that this will have an impact if it is a penalty on a developer across several leases, what level of fine do the Government anticipate?

On Amendment 16, in my name and that of my noble friend Lord Stunell, the arguments are similar. It contains a new clause that would be inserted after Clause 12 that would extend the banning order regime under the Housing and Planning Act 2016, with an exception for rent recovery orders. It would ban landlords who received three or more penalties in any six-year period from collecting some or all of the monetary ground rents arising under pre-commencement leases. That should be a clear signal to persistent offenders that, under Clause 9 of the Bill, if the maximum penalty has been charged three or more times against the same landlord or a person acting on their behalf, there will be restrictions and penalties.

We recognise how significant the failure is of this part of the Housing and Planning Act 2016. On 9 January 2018 the then MHCLG Minister, Jake Berry MP, said the Government’s estimate was that

“about 600 banning orders per year will be made”.—[Official Report, Commons, Fifth Delegated Legislation Committee , 9/1/18; col. 12.]

In April, the Housing Minister, Christopher Pincher MP, confirmed that just seven landlords had so far been issued with a banning order. As the National Residential Landlords Association says of this failure:

“The Government needs to work with local authorities to understand the true extent of the pressures faced by environmental health departments responsible for enforcing many regulations”


affecting this sector.

“Too often, government has introduced initiatives to crackdown on”,


for instance,

“criminal landlords without properly understanding whether councils have the resources and staff to properly enforce them. In short, regulations and laws to protect tenants”—

and to protect leaseholders from bad practice—

“mean nothing without them being properly enforced.”

When we look at the level of these fines, we must remember that this industry is vast. The MHCLG’s own estimate is that, of the 4.5 million leasehold properties in the UK, approximately 2.5 million are owner-occupied. All these people are likely to be paying some level of ground rent. The companies behind the freehold interests receiving these ground rents are huge undertakings. They are more than a match for any local authority seeking a £5,000 fine. For example, Proxima GR, a key company in the Vincent Tchenguiz freehold portfolio, reports in its most recent accounts that it expects to receive £2.4 billion in ground rent between 2019 and 2080. It is believed to control a portfolio consisting of freehold interests over hundreds of thousands of leasehold properties. The same accounts report cash income of £24 million in the same year. A fine of £500 or £5,000 for multiple breaches is no disincentive to any organisation of that scale. Information on other ground rent investors is hard to come by but, from the limited information available, there are many other substantial operators out there. For example, in 2016, leasehold properties worth £64.8 billion were sold. Of these, new-build properties were worth £13.7 billion, leasehold house numbers doubled, and developers made £300 million to £500 million a year from ground rent sales. Looked at from that perspective, £5,000 seems a very small sum to put as a maximum. Has the Minister considered an industry-funded redress scheme to support enforcement?

To conclude, there should be greater detail in the Bill about how to resource penalties and sanctions to sustain longer-term planning and funding. These are large industries with significant levels of income and profit: they need to be aware that their days of exploiting leaseholders are over and failure to recognise that will cost them dearly. I beg to move.

[Lord Naseby (Con)]

My Lords, I am delighted to support the noble Baroness on Amendments 14 and 15. I was just reflecting on how important this issue is: hundreds of thousands, maybe millions, of families are affected. The problem probably goes back over half a century. It is to the great credit of my noble friend on the Front Bench that the Bill is before the Committee now, and I say to him “Well done.” In 1968—I see my noble friend Lord Young sitting opposite me—I had the privilege of being elected, somewhat against the odds, as the potential leader of the London Borough of Islington. We won 57 out of 60 seats; we did a deal with the other three, because they were a local community group. I was then elected to be leader and chairman of the housing committee. Sitting here this afternoon, I still remember working really closely with the officers of that authority, from the town clerk down. It was not entirely to do with leaseholds, but it was to do with property and rogue landlords. Two in particular come to mind: a local one called De Lusignan and the one whom we all remember, Rachman. Those rogues and their successors have not gone away—the noble Baroness is absolutely right; they may well have multiplied for all I know. They were a huge problem even in those days.

There is another element, which I can talk about, though some noble Lords might have more difficulty. I have lived and worked in Pakistan, India and Sri Lanka. I have the greatest respect for those countries. I would go as far as to say that I love them dearly; I know them extremely well. As far as I can see, there is a rogue element, particularly in the poorer parts of our country, which exploits vulnerable migrants. That is wrong, and we know that it is wrong, but some local authorities appear to be slow, resistant, unwilling or too conscious of the social situation. In my view, as someone who has taken a deep interest in housing all my political life, that rogue element has to be addressed—it does not matter who they are.

The noble Baroness is right about the figures that are in the Bill. In today’s world, £500 is absolutely no deterrent to anybody: you only have to see what is happening out there in the market. She is right that £5,000 is the beginning of a reasonable deterrent. Personally, I would do a multiplier by five, because £25,000 somehow—perhaps it is the advertising man in me—sings out as even stronger than £30,000. I do not know why that is, but I thought about this when I was working on it over the weekend. I agree with the noble Baroness that £5,000 is the beginning of a proper deterrent, and I think that £25,000 should be the maximum.

Of course, it is for my noble friend on the Front Bench to decide what Her Majesty’s Government believe is appropriate, but all I say to him is that this area needs dealing with, and here is an opportunity to do it. I again congratulate my noble friend and his colleagues on bringing this Bill forward. Let us make a really good job of it.

--- Later in debate ---

After the very disappointing outcome of the G7 meeting, and following so many broken government promises, can the Minister please give us some hope that the Government are listening and will improve this Bill?

[Lord Naseby (Con)]

My Lords, I think most legislators would agree that there should always be a review of legislation. Unfortunately, that has not always happened in the past, and I have put down a number of amendments to certain Bills to say that there should be a review. But quite frankly, to have a review within 30 days is totally unrealistic; it is far too fast. Given that we have Christmas holidays, Easter holidays and bank holidays—and even the occasional pandemic, with people working at home—I am sorry to say that proposed subsection (1) in Amendment 19 is not the least bit viable.

However, when we move on to Amendment 20, we come to a more realistic basis: that within six months of the Act being passed a review of its financial impact on leaseholders must be carried out. That is eminently sensible and a reasonable length of time. The Minister may have a different view, but looking at it from the outside—again, I speak as someone who has been involved in housing matters—I would have thought that it was a reasonable length of time.

Whether proposed subsection (2) in Amendment 20 is correct, I am not sure. It says:

“The review must make a recommendation”.


I do not think it is the point of a review that it “must” do something. The whole point of a review is that it should look at all aspects of whatever it is reviewing and then make recommendations. That is a technicality, but it seems a more sensitive way of doing it.

I make one further point on the fire remediation work. I think Her Majesty’s Government, and this Government in particular, have tried very hard to get a grip on this very difficult area. One sees daily the outbreak of fire because of cladding, and each one seems to be different. I do not have the experience or the wisdom to know whether Her Majesty’s Government are doing enough in this area. I would appreciate from my noble friend, as would Parliament, a regular update on exactly what is happening on cladding. There is a great deal of confusion out there and clarity would help us all.

I was fascinated by Amendment 21A from my colleague the noble Lord, Lord Berkeley. I am conscious of having visited the model village that was formed in the Duchy of Cornwall—I cannot remember its name but I think it is in Dorset.

[Lord Young of Cookham (Con)]

Poundbury.

[Lord Naseby (Con)]

Yes, thank you so much.

I declare an interest in that I happen to own 40 acres around my home. Somebody suggested the other week that maybe a small bit of this—say five acres—might be a help to the housing market. I certainly would not think of having it on a leasehold basis. If I am going to build houses in the interests of the community in Bedfordshire, they will be sold, because if something is sold the family involved have real ownership. When they own their home it is not a disincentive but an incentive to do something good for their home; it is in their interests. I suspect that it is a disincentive to do so for most leaseholders.

I think the noble Lord is right to ask the question. I think he said that he sent three letters to the Duchy. The least that the Duchy should do is come back to the questions he asked. I hope that will go on the record. I say to my noble friend on the Front Bench that none of these are black and white, other than the fact that there should be a review within the six-month period.

[Lord Stunell (LD) [V]]

My Lords, this has been a very interesting debate. Everybody has spoken with a sense of understanding and concern, remembering that today is four years since the Grenfell tragedy. It should be a matter of particular regret in the kind of debate that we are having that, four years on, so few of the deep issues that have been revealed subsequent to that fire have yet been fully dealt with or accounted for. It is a matter of regret to me that the building safety Bill is still somewhat on the distant horizon, and that we have not yet solved at all the question of who will pay for the costs of this tragedy, since it affects households right across the country.

Noble Lords would expect me to focus particularly on Amendment 20 in the rest of my remarks. Before I do, I will comment briefly on Amendment 19 from the noble Lords, Lord Kennedy and Lord Lennie, which calls for a review. I will skip the number of days and focus on the four issues that they have said need urgent reform and which every speaker in this debate and anybody who has considered the issue would agree on: lease forfeiture, transfer fees, redress schemes and enfranchisement. The Bill does not deal with those four issues. It is time that the Government face up to that and present to Parliament—preferably in the form of legislation, but if not a published report—precisely what their view is on those issues.

The move of the noble Lord, Lord Berkeley, to clarify where Crown exemptions come into play for leaseholders raises an issue that he has brought to your Lordships on a number of occasions. I would be very interested indeed to hear whether the Minister is brave enough to accept his challenge to write to the Duchy of Cornwall and get it to answer the noble Lord’s letter. Your Lordships certainly deserve to hear from the Duchy precisely how it intends to proceed. If the legislation needs change and reform to take account of that, we need to hear the Minister say that he is ready to do that and to make sure that Crown exemptions are used with appropriate discretion and not in any way at all to put residential leaseholders of Crown land in a more disadvantageous place than those holding leases where the freeholder is a private body.

On Amendment 20, my noble friend Lady Pinnock set out, as she has done many times before to your Lordships, the grievous burdens placed on leaseholders across the country as a consequence of the remediation made necessary following property inspections post Grenfell. Before I go on, I remind noble Lords that I served as a Minister in the Department for Communities and Local Government, as it then was, with responsibilities for building regulations between 2010 and 2012.

The Grenfell inquiry has been hearing evidence of failures at many levels: building owners, building managers, designers, materials suppliers, on-site contractors, inspection teams and enforcement bodies. No one has escaped damning evidence of their failures. What there has not been is any evidence at all of failure by residents or leaseholders. On the contrary, it was the residents of Grenfell Tower who repeatedly warned of the dangers that other people chose to ignore. That led to the terrible tragedy, the deaths and the unmeasurable impact on so many lives of families in and around Grenfell Tower who survived that night.

It also led to the discovery that this was not an isolated case of many unfortunate things coming together in a sequence of horrible coincidences to make a one-off dangerous, combustible building. We now know that more than 400 other residential blocks have been found to have similar dangerous cladding, and the enforced inspection of those blocks has brought to light many other fire safety defects, costing billions of pounds in total. Many of those blocks are occupied by blameless leaseholders who find that they now live in a dangerous and unsaleable home and are being presented with enormous bills for remediation under the terms of their leases.

The Minister will say that this is not the place to insert a proper compensation scheme—nor does Amendment 20 do that—but he needs literally to take stock. That is what Amendment 20 tabled by my noble friend Lady Pinnock does. It asks for a taking stock of the impact of this Bill on leaseholders who live in those defective properties.

Time after time your Lordships have pressed the Government to come forward with a proper scheme of compensation for leaseholders all over the country who have been unwittingly caught up in the Grenfell scandal. Every time your Lordships have pressed Ministers—this Minister in particular—we are told, “Not here and not now”. Meanwhile, as my noble friend Lady Pinnock spelt out, leaseholders are being sent five-figure bills with 28 days to settle or face the forfeiture of their lease. They cannot raise finance on their now-worthless properties, and the Government still have not issued the vital information on how they can even access the loan scheme the Government announced months ago.

Will the Minister tell your Lordships today when those missing loan scheme criteria will be published and what the distribution system of those loans will be? Please can he assure us that it will not be administered via an outsourcing company such as that in Virginia, USA, which earlier this year was the nemesis of the green homes grant fiasco? Let this piece of work be started soon, carried out efficiently and delivered to the benefit of leaseholders as quickly as possible.

Secondly, will he urgently bring forward a proper compensation scheme and lift the threat of forfeiture and bankruptcy from innocent leaseholders trapped in these blocks? Will he, as an earnest of good intent, accept my noble friend Lady Pinnock’s amendment today so as, at the very least, to commit to take stock of the impact that a ground rent ban could have on those affected leaseholders and tenants?

--- Later in debate ---

[Lord Stunell (LD) [V]]

My Lords, I address my remarks to Amendment 26, just spoken to by the noble Lord, Lord Blencathra. I strongly support what he said and the arguments that he put forward in support of his amendment.

One key risk of separating out the legislation for all new domestic leases from those of the 4.5 million existing domestic leases is that a gap will open up in the market between homes traded under existing leases and those traded under the new regime. As the noble Lord, Lord Blencathra, has just said, the existing leases are very disadvantageous compared to those that will be formed under the new Bill. In many respects, existing leaseholders will be under a double disadvantage. They will have a home that may be identical in every respect to one that is subject to the new Bill, with a lease signed a week after Royal Assent—or maybe in two years, when it is finally implemented. The existing leaseholder will be at a permanent long-term disadvantage up to the point when stage 2 of this reform comes into force.

This amendment would bring the Bill into force immediately. It would mean that the long tail behind the existing leaseholder system would be cut off. There would be no new leaseholders stuck with the old system, with a Bill that has had Royal Assent but not been brought into effect. It would, as quickly as possible, create a bigger market of those with new leases rather than old leases.

In its turn, that will throw up disparities between the two categories of leaseholder resident. Those who have an existing lease—particularly those with an informal lease extension, which might have huge escalating charges written into it—will find that the gap between them and their near neighbours under the new system widens and widens. Inevitably, that will lead to a two-tier market; perhaps at first only at the margins but, over time, as the number and proportion of new leases on the market increase in relation to the number of existing leases, that gap will widen. The disadvantage suffered by those holding existing leaseholders will also widen and will be twofold: first, they will find it harder to sell their leases on, because they will be less attractive to purchasers than those leases available under this Bill; and, secondly, in the meantime, they will be stuck with paying through the nose the exorbitant terms of their existing lease.

Amendment 26 from the noble Lord, Lord Blencathra, is a good step forward in the absence of any real commitment by the Government to bring much closer together this Bill, stage 1 of reform, and the next Bill, stage 2 of reform. The noble Lord is absolutely right to press the Government and to express his concern that that announcement has not yet been forthcoming. Indeed, Ministers have been very reluctant to make it. We need to know when stage 2 will be before your Lordships’ House. We need to know how soon it will be that the follies, injustices and oppressions of the current system will be stopped. We need to make sure that as few people as possible find themselves in the unenviable position of hearing, “Take it on these terms or take it on no terms.”

In an earlier debate we debated the four things that the noble Lord, Lord Kennedy, thought should be reviewed. The Government did not accept that. In our first day’s work we tried to make sure that there was some definite timetable for future reform. The Government were not willing to accept that. Today’s amendment from the noble Lord, Lord Blencathra, would, unfortunately, still not achieve it, but it might be a powerful lever to force the Government toward bringing these two stages of reform closer together, cutting off the tail of existing leases being signed as quickly as possible, and, as soon as possible, reforming the whole system.

[Lord Naseby (Con)]

My Lords, I do not want to be repetitive because much has been said by those who have taken a particular interest in the Bill—and indeed the market, which is why we are taking an interest in the Bill. I have little to add, but if I was sitting in my noble friend’s position, as the Minister responsible, I would see merit in the timeframe of six months from the noble Lord, Lord Kennedy. That would be the maximum break.

I declare an interest in that I share an office with my noble friend Lord Blencathra. He is very clear on his views in life and he is more often right than wrong. My noble friend on the Front Bench needs to reflect on this.

We know that this has been a very difficult area and I have sympathy with my noble friend on the Front Bench. But we cannot have a situation where phase 1 happens—I think we all have confidence that it will, whether immediately, as my noble friend Lord Blencathra says, or along the lines of the amendment from the noble Lord, Lord Kennedy—but the second half is to happen only sometime in the distant future. I again reflect on the period when I was chairman of the housing committee in Islington. You could not have had a situation where people in one section of society had their problems sorted out but those in another section—almost identical, except that they are a bit earlier in life—did not, and their problems were kicked into the long grass. My dear friend on the Front Bench has to come back, maybe not today but on subsequent sittings on this Bill, with a firm commitment that the second stage will happen and with a timeframe for it to happen.