Planning and Infrastructure Bill

Viscount Hanworth Excerpts

Committee stage
Thursday 17th July 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, we come to another interesting clause. In essence, I am trying to find ways to identify those infrastructure developments that are of critical national importance to see whether there is a way in which we can streamline the process of approvals that they have to go through. Also, in picking up the points from the noble Baronesses, Lady Coffey and Lady Pinnock, about the need for democratic legitimacy, I am seeing whether we can use parliamentary processes to help.

I am moving Amendment 47 and speaking to Amendments 48, 49, 52, 53 and 65. The two substantive amendments are Amendments 52 and 65. I have two on judicial review which, because of the mystique of groupings for the first day, should really be grouped with a number of other JR amendments that we will come to later, so I will be brief in speaking on those.

My Amendment 52, in essence, creates a short, abridged parliamentary process to confirm Ministers’ decisions to give development consent for infrastructure projects as a critical national priority. Apparently, until the late 1990s, we had a system of provisional order confirmation Bills, whereby Parliament could confirm orders made by UK Ministers for various proposals, including infrastructure projects. There are many of these on the statute book so it is, in fact, a tried and tested approach that we could use for some projects where we need to speed up delivery but we need to have parliamentary approval as well.

This kind of approach, using a development consent order confirmation Bill, could take only four to six months to go through Parliament, which is nothing like the complexity of the hybrid Bill. We have seen that with HS2, which ultimately failed to satisfy anybody and built in huge delays. We are where we are with HS2. Having said that, the station being built in Birmingham looks pretty good; we can only hope that, one day, a train is actually able to arrive there.

The point about this amendment is to give Parliament a vote. I have very much accepted this point about the need for Parliament to have a say in some of these matters. In a sense, this is another trade-off; I am saying that some projects need to be dealt with in a special way—nationally, by being taken by Ministers, by going through the necessary procedures to ensure that they are appropriate and in being given legitimacy by parliamentary vote. It would give businesses and developers much greater certainty about investment decisions and, as I have said, ensure that we have a proper democratic say in these very important decisions.

Amendment 53 is related to Amendment 52 and would repeal Section 150 of the Planning Act 2008. I well recall our debates on that regime, because I was a Minister involved in it. The NSIP regime was designed with the intention of being a one-stop shop for major infrastructure projects, in terms of the consents required. However, the effect of Section 150 of the 2008 Act has been to stop development consent orders from being as much of a one-stop shop as they could be, because certain regulators have a veto on whether a DCO can roll consents into it that would otherwise have to be obtained separately from regulators. We have already debated the problem of having multiple regulators involved; they do not seem to be able to work together and co-ordinate their response.

I know that there was a debate on a similarly worded amendment that was proposed in the other place. The Government had some concerns about it but promised guidance on how to wrap up other consents in a DCO. However, the problem with that is that the regulators’ veto remains, which is why I argue that it should be moved.

My Amendment 65 can be seen in parallel: I seek to enable the Secretary of State to designate certain classes of development as critical national developments; establish an expert critical national developments task force to advise on each application; and provide that planning permission and any other regulatory consent for such development is deemed to be granted six months after the application is made, unless the Secretary of State issues a written objection within that period or extends the period. Of course, here, I am anticipating the response of my noble friend, because I noted that she was not very keen on my earlier amendment on timelines because different infrastructure developments have different requirements and probably different timelines. This amendment allows the Government to be able to sort of flex the timeline according to circumstances.

I would argue that, at the moment, Ministers lack a coherent mechanism to prioritise and accelerate delivery of critical infrastructure projects. The DCO regime has not really, in the end, delivered what we hoped it would when we took it through Parliament. I hesitate again to mention Sizewell C, but eight years from application to consent is just hopeless, and I must say that on Heathrow too. I support the third runway at Heathrow, because I think that, as the Government have said, this will take place within carbon budgets, but it is just an example of how decisions here can be stuck for decades, and we really have to move on from that.

The amendment I am proposing here would centralise accountability with the Secretary of State. I would align it to my earlier amendment in relation to parliamentary consent. It would bring consents under a single process, introduce a statutory determination deadline and de-risk major investments.

There is international precedent for it. The Canadian Government have also faced great delays in major national infrastructure from fragmented approval systems, environmental litigation and federal/provincial conflicts. Recently, the Parliament of Canada has produced a law with very much the same principles as my amendment, which allows the Canadian Cabinet to designate nation-building projects, as they are called, via Orders in Council.

I refer to my other three amendments. Amendment 47 seeks to remove the requirement for any planning appeals to be considered at an actual hearing. That, in my view, is a streamlining process.

Amendments 48 and 49 are around judicial reviews. I really welcome Clause 12(1), which would restrict judicial review appeals to the Court of Appeal where the High Court decides the application for permission to apply for judicial review is totally without merit. Now, I have already paid tribute to the noble Lord, Lord Banner, for his review; this clause follows that review. We received a very helpful letter from my noble friend the Minister this morning, which gives details about how the Government are going to follow up; that is very welcome indeed, but I just want to probe whether we can go further.

Amendment 48 relates to the reviews of NPSs at least every five years, which I warmly welcome. I take my noble friend’s point about the issue with NPSs that have not been subject to a review and therefore could be considered to be out of date. I just want to make sure that judicial reviews are not used in a way which unreasonably might block progress, so my amendment would remove the possibility of JR in two circumstances: in between the five-yearly reviews, by repealing Section 13(2) of the Planning Act 2008, and in relation to any revisions to NPSs that are solely non-material or are reflective changes—in other words, reflective of published government policy change legislation or court judgments which the Bill is providing for.

I am a strong believer in the judicial review process. My background is mainly in the health service, and the fact is that NHS bodies are sometimes fast and loose with legislation and guidance, particularly when it comes to the outsourcing of services, changes of use, closures of hospitals and the like. There is no doubt that the judicial review process has been necessary to ensure proper transparency. My problem with judicial review is when it is used, essentially, to try to block progress—hence the amendment.

Amendment 49 would bring legal consistency to the Planning Act so that it is the High Court where applications for JR would be made. It is not a substantive change but it would make sure that, in any future event, civil procedure rules cannot be made to divert planning appeals to any court other than the High Court. There is already precedent in Section 63 of the listed buildings Act, which makes it clear that appeals are to be made to the High Court. I think that could flow across the Planning Act.

I hesitate to talk about judicial review when the noble Lord, Lord Banner, is present, but it would be good to have at least some debate as to whether, in the light of his review, we could go further. I beg to move.

[Viscount Hanworth (Lab)]

My Lords, Amendment 52 is of prime importance. Our planning system has become sclerotic. According to the Explanatory Notes that accompany the Bill, the time that it takes on average to secure a development consent order, or DCO, for major infrastructure projects has more than doubled in the last decade to more than four years. The development consent system is beset by objections and pleas and by judicial reviews, with several judicial reviews sometimes besetting the same project. The effects of the delay may be to cause an otherwise viable project to become uneconomic or unaffordable. Nowadays, such delays are often envisaged as a means of defeating a project. The conjunction of lawyers and protesters, which has given rise to a veritable industry, is a modern and unprecedented phenomenon.

Recently, I had good cause to consider such developments. I made a trip by car from London to Ilfracombe in Devon. I had intended to travel on the M4 motorway, which is a major arterial route. However, in consequence of its blockage, I was diverted, on the advice of the Google satnav system, on to the A303. In doing so, I remembered that 303 is the calibre of a rifle bullet. I had hoped to travel at the maximum legal speed, if not at the speed of a bullet. I was pleased to be able to do so until I was brought to a halt. I was then constrained to travel at a snail’s pace for a prolonged period, while passing an ancient stone monument on a single-lane road. I saw the ancient megaliths of Stonehenge on the brow of a hill, which were surrounded by a gathering of druids. I was reminded of their campaign, which has prevented the building of the Stonehenge bypass. They regret the presence of the road and resist the building of a bypass that would encroach upon Salisbury Plain. Some might regard their campaign as a worthy attempt to preserve the dignity of an ancient monument. However, there is another side to the story, which concerns the objections of residents in the neighbouring villages to the diversion of traffic on to their streets. They contend that their villages have an equal claim to preservation.

The legal wrangling has been interminable. The first grant of development consent for a bypass, in 2020, was quashed by the High Court in July 2021. It was then given the green light again, by the Department for Transport, which reissued a development consent two years later, in July 2023. The project was put on hold again, because of another series of judicial reviews, which were dismissed by the High Court in February 2024 and by the Court of Appeal in October 2024. Undeterred by those two defeats, the claimants asked the Supreme Court if they could appeal to it. On 29 January this year, the Supreme Court refused permission to appeal, on the grounds that the challenge did not raise an arguable point of law.

However, this decision was immaterial since, within weeks of taking office last July, the Labour Government had scrapped the plans for a two-mile tunnel that would bypass the monument on the grounds that the cost of the project had become unaffordable. The decision to cancel the project was taken some three and a half years after the development consent order had been issued and after a full and detailed examination of all the issues. In this case, it might be said that the campaigners had won not by virtue of the strength of their case but by dint of endless legal chicanery and delay. However, the same recourse is available to many other parties who, for various reasons, wish to stand in the way of important development projects.

Planning and Infrastructure Bill

Viscount Hanworth Excerpts

2nd reading
Wednesday 25th June 2025 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the Planning and Infrastructure Bill marks a turning point. An intention has been declared by the Government to pursue a major reconstruction of the UK economy. This intention is conveyed by the Bill.

Many years ago, a Labour Government were faced with a similar task of post-war reconstruction. An austere and purposive Government, under the unassuming leadership of Clement Attlee, faced a task of which the difficulties were widely acknowledged. The Government were supported by an able Civil Service. Its skills had been honed by the wartime exigencies. The Ministry of Supply, which had overseen the procurement of wartime matériel, was replete with technicians and staff who had managed a complex supply chain. The ministry oversaw some leading post-war technological projects, including those of the newly established nuclear industry. It also oversaw the nationalisation of the iron and steel industry.

Equal competence was demonstrated by the Ministry of Transport, which oversaw the nationalisation of the rail network, albeit that little credit was given on this account. Thereafter, the Civil Service was rapidly de-skilled. Its traditional amateurism was reasserted by means of its selection board. By the mid-1960s, critics were complaining of the lack of scientific, commercial and manufacturing skills in the Civil Service.

Current circumstances are very different from those of the early post-war years. The Department for Energy Security and Net Zero, which is charged with overseeing our energy policy, has a dearth of technical expertise. One might expect the department to be dominated by scientists and engineers, but there are few of these. Those in charge of the nuclear policy are graduates with degrees in archaeology, history and the social sciences. Although they can be credited with supporting a nuclear renaissance, there is little understanding of the technological imperatives.

In pursuit of net-zero emissions, it will be necessary for small nuclear plants to become close-up and personal to industrial applications and to clusters of population. Reactors are required that embody fourth-generation nuclear technologies that possess inherent safety. Instead, we are developing pressurised water reactors, both on a massive scale and as small modular reactors. Both pose stringent safety requirements, which must keep them at a distance from the consumers of heat and electricity. We have allowed projects that have been pursuing fourth-generation nuclear technologies in the UK to close or to expatriate themselves to more welcoming countries. A ministry staffed by technical enthusiasts would never have allowed this to happen.

The dearth of commercial experience in the Civil Service is as striking as its technological limitations. This deficiency has been gruesomely illustrated by the experience of the HS2 rail project. It seems that successive Governments who were willing to support the project were content to issue vague outline plans and to rely on the contractors to determine the detailed specifications. Governments were inclined to make changes to the plans without regard to the costs of the resulting disorganisation. The HS2 project has been affected by a planning system that is beset by local objections and demands for judicial review. This has severely impeded its progress. The Planning and Infrastructure Bill proposes to reform a sclerotic system.

There is a tendency to envy nations that have a more forceful regime that can override local objections. If we are not prepared to act likewise, then we must resolve to adequately compensate the affected parties. However, in pursuing the construction of new towns, if that is what we intend, we must make provision for the compulsory purchase of land in a way that will allow its enhanced value to accrue largely to the public authorities or to the development corporations. Otherwise, it will accrue to lucky but undeserving landowners.

I will make one final comparison between the past and present. After the war, the nation was fully aware of the parlous state of the economy and the physical environment. Nowadays, the electorate are less aware of the hazards we face. Our leaders should have alerted them to the realities sooner. The consequence is that we will be blamed for each emerging problem. We will be blamed for the failures in the provision of healthcare and social care, for the bankruptcies of local authorities, universities and institutions of higher education, and for much else besides.

We have been willing to listen to the nostrums of pollsters, spin doctors and political strategists, who were responsible for convincing our leadership that it was dangerous, at an election time, to admit that taxes needed to be raised to finance the reconstruction. That was surely a misreading of popular opinion that made no allowance for the possibilities of political persuasion. The consequence is that we have lost time before embarking on the project, and we have lost some credibility.

High Streets (Built Environment Committee Report)

Viscount Hanworth Excerpts

Tuesday 13th May 2025 Grand Committee

[Viscount Hanworth (Lab)]

My Lords, I too served on the committee while this report was being compiled. I also commend our chairman and our secretariat.

The report testifies to the decline of Britain’s high streets. They have been suffering from the current economic troubles of the nation, which tend to be described as a cost of living crisis, but there are other enduring factors that have contributed to their decline. Among the recent difficulties affecting high streets have been the impact of the Covid pandemic and the rising proportion of online shopping. A less immediate problem has been the development of large shopping centres that have attracted customers away from high streets. This phenomenon has been seen in neighbouring countries, such as France, where large so-called hypermarkets have been built in out-of-town locations. It seems that the detriment of such developments has now been recognised in the UK and that measures are being taken to restrain them.

However, there are other pathologies that have had an enduring effect in the UK. Not the least of these is what might be described as the financialisation of the commercial property market. This process accelerated rapidly in the 1980s and 1990s. The result has been that the ownership of commercial properties is now preponderantly in the hands of financial institutions. These include real estate investment trusts, property companies large and small, pension funds, banks, foreign sovereign wealth funds and many other remote owners.

The assets within the commercial property market are conventionally classified as prime assets and subprime assets. The former include large office buildings and department stores and the latter comprise the majority of the buildings to be found on Britain’s high streets. The salient fact is that the majority of the properties in both categories are not owned by their current occupants. They are owned by parties who are remote from the locations in question and have no day-to-day involvement. The structure of ownership affecting large retail chains and department stores has been revealed in recent years by their financial collapse.

A prime example has been the Arcadia empire of Philip Green, which was created by the leveraged acquisitions of numerous businesses. Existing assets served as collateral for borrowings that were used to finance further acquisitions. In the process, Philip Green accumulated a personal wealth almost unprecedented in Britain. The sources of this wealth were the assets of the businesses that he had acquired. Many of these businesses had owned their own premises. They were sold by Green to the institutional investors of the property market. The consequence was that, when major trading losses arose, the property owners were able to call time on his businesses. There were no resources, other than Green’s personal wealth, available to sustain the businesses during the economic downturn. The truth of the matter was revealed when Green was able to sell British Home Stores for £1, without personal loss to himself, until he was constrained to supplement the pension fund.

The other side of the story concerns much smaller high street businesses that have suffered closure. The committee’s report reveals a startling fact about the landlords and property owners in the high street. A survey of 22 British high streets conducted in 2019 found that only 5.3% of retail and leisure units were owned by their current occupiers. As with much larger businesses, the retailers lacked the capital to sustain the temporary losses occasioned by an economic downturn and the businesses were forced to close.

The properties in question are liable to feature as entries on spreadsheets of large institutional investors, which have little incentive and little ability to quickly find occupants to replace those who are departing. Occupants might be found more quickly if property owners were inclined to reduce their rents; doing so would reduce the number or value of their assets and they would prefer to leave their properties empty for longer.

A further detriment arises from the remote ownership of commercial bodies, which affects their upkeep. Neither the owners nor the current occupants have a sufficient incentive to enhance the properties since any investment undertaken by one of the parties will be to the substantial benefit of the other party. The division of responsibilities for the upkeep of properties is typically determined by clauses in the lease, and these vary widely from case to case.

In Britain, there is a small and diminishing residue of municipal ownership within high streets. If a landlord is a local authority and if they have access to funds, then favourable opportunities for enhancement or the regeneration of a property or the wider environment can arise. However, this is an uncommon circumstance. It is notable that the circumstances are very different in neighbouring European countries. In Holland, for example, large proportions of town centre properties are under municipal ownership, and this is outwardly reflected in the superior upkeep of these locations.

A question to be faced is: what can the Government do to alleviate the distress of our high streets? The answer is that very little can be done, unless local authorities, development corporations and other relevant bodies are given the funds to enable them to undertake significant developments of high street environments. The high streets must be made more attractive, and they must cater to developing circumstances. Amenities must be brought to the high streets to replace the retail outlets that are closing. We have heard suggestions that doctors’ surgeries, libraries, restaurants and leisure activities should be attracted to the high streets. If the high streets and adjacent streets have been cleared of motorised traffic, then adequate public transport must be provided and parking facilities in adjacent areas must be established.

However, the question of funding is paramount. The report criticises the chaotic system of special funds that are available to local authorities, which are invited to compete for them. In many cases, it is too time-consuming for a local authority to make a bid when there is little chance of succeeding. Attempts to reform the system are, I hope, under way. The principal source of funds for local authorities is local taxation, which consists of domestic rates and business rates. We are led to understand that, in the future, 70% of a local authority’s income will be raised locally. A large proportion of this income will come from business rates, of which the councils will keep 50%. This will give them, so it has been said, a real incentive to go for growth and encourage enterprise and job creation.

The problem with rates being raised on properties is that they bear only a tenuous relationship to the income of the householder or to the turnover of a business, and they are often subject to angry resentments. However, it must be a priority to reform the system of local taxation and, in the process, to make it more productive of revenue. This will require the replacement of the rates by local income taxes and local turnover taxes.

Housing: Modern Methods of Construction

Viscount Hanworth Excerpts

Thursday 5th September 2024 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, the recently elected Labour Government have proposed that there should be mandatory targets for housebuilding that local authorities must adhere to. The ambition is for 1.5 million houses to be built in the current Parliament, with annual targets of 370,000 units.

This target, which far exceeds recent levels of housebuilding, is comparable to what was achieved in the early post-war years. A large proportion of those houses were council houses, and they were subject to direct procurement, financed by local authorities. They were built mainly by small local building firms, which typically employed their labour on a permanent basis. Nowadays, a few large firms build most of the residential accommodation. They hire their labour on a temporary basis. However, the supply of such skilled labour has shrunk drastically. Moreover, the big firms do not undertake to train their workforce.

It has been widely proposed that, in order to accomplish a revolution in housebuilding and to meet the targets, it will be necessary for builders to adopt modern methods of construction. These will involve a substantial proportion of off-site construction in factories with assembly lines. Contemporary methods of housebuilding are slow and wasteful of materials. They also make inordinate demands on a scarce labour force. It is doubtful whether, if such methods were used preponderantly, any of the targets could be met.

The houses that are so urgently needed must be subject mainly to direct public procurements. Much of the new housing stock would therefore remain in public ownership, albeit that the right of the occupants to buy their houses should be preserved. It was an ideological aversion to public ownership that inspired the Thatcher Governments to promote the right to buy, while preventing councils from investing the proceeds from the sales in replacement buildings. This has been a major factor in creating the current housing crisis.

Leaseholders: Management Companies

Viscount Hanworth Excerpts

Monday 20th May 2024 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, we are looking more closely at this issue, because the noble Lord is right—sometimes it can be more difficult. We have also recognised the participation rates, which can be affected by foreign owners. We have listened to the arguments raised in Committee and by MPs in the other place, and we will continue to consider the issues raised.

[Viscount Hanworth (Lab)]

My Lords, is the Minister aware of the extent of a stratagem whereby companies have acquired freeholds with the intention of removing the leaseholder occupants by undertaking works on the properties that the leaseholders cannot possibly afford to pay for? By these means the freeholder expects to compel the occupants to sell up. What redress is there against this stratagem?

[Baroness Scott of Bybrook (Con)]

I am not aware of this strategy on the part of freeholders, but I will look into it and come back to the noble Viscount.

High Streets (Designation, Review and Improvement Plan) Bill

Viscount Hanworth Excerpts

2nd reading
Friday 17th May 2024 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, I should begin by mentioning that I am a current member of the Built Environment Committee, which is engaged in considering the state of Britain’s high streets.

The Bill that we are discussing today has excellent intentions and I strongly support it. It proposes that local authorities should have a watching brief over the health and development of a high street in their area and that they should have a development plan that should be reviewed at least every five years. At the best of times, this requirement should serve to reaffirm the good practices that one would expect well-run local authorities to be adopting as a matter of course. However, nowadays is not the best of times, and the authorities will struggle to fulfil the injunctions of the Bill in meaningful ways. Many of them lack the personnel to conduct proper appraisals of local problems and to formulate plans to address them.

There was a time when local authorities could be expected to react with enthusiasm to this Bill. They were endowed with planning departments that typically contained a full complement of architects, surveyors, town planners and other professionals, and they were responsible for, among other concerns, overseeing the stock of council housing and adding to it. Such housing provided shelter for a large proportion of the population.

The policy that gave the right to buy to council tenants was initiated in 1982 during the Thatcher era. It divested the authorities of much of this housing stock, and they were prevented from replenishing it. The planning departments lost much of their personnel and their sense of initiative.

The present Government have aimed numerous poorly funded initiatives at addressing the decline of the town centres and high streets. Many of these fall under the so-called levelling-up agenda. The current web page of the Department for Levelling Up, Housing and Communities, which is from July 2023, lists a bewildering variety of funds aimed at urban regeneration. I have counted 15 of them. The overview on the web page states:

“In the Levelling Up White Paper, the government committed to setting out a plan for simplifying and streamlining the funding landscape and to help local stakeholders navigate funding opportunities”.


This testifies to the difficulties and expenses incurred by local authorities in making applications for funding.

A common testimony of local authorities is that insufficient resources are available for developing a bid, which may be accompanied by a judgment that it is not worth their while to do so. Even if these impediments were overcome and if the money for regeneration were amply available, a more fundamental impediment could block the progress. Local authorities lack sufficient influence over the activities in high streets to address the problems of urban regeneration.

Few occupants of commercial town centre properties are also their owners. A figure of 12.8% has been cited for the proportion of private individual landlords and owner-occupiers. The ownership of the majority of properties resides in the portfolios of real estate investment trusts and other private interest companies, such as insurance and pension funds, where individual properties feature as lines on a spreadsheet.

The rent payable to owners places a heavy burden on the retailers. The burden is heaviest in times of economic recession when the income from trading is reduced; it may force the retailers into bankruptcy. There is little direct engagement of the property owners with the tenants. Although both parties are charged with the upkeep of the properties, there is little incentive to enhance them since much of the benefit from doing so will accrue to the other party. When properties fall vacant, there seems to be little urgency on the part of owners to find new occupants, and there may be good reason for this. The principal characteristic of a property from the point of view of an investment fund is its capital value, which is tied to its rent. To reduce the rent in an attempt quickly to attract a tenant will destroy that value.

Short-term letting to independent retailers may be unprofitable. Among the inducements to a new tenant there are liable to be deferments of rent and contributions to fitting-out costs, which cannot be afforded easily by small independent retailers. Whereas, in the past, retail leases could be for as long as 20 years, they are now expected to be of a limited duration. Moreover, the high rates of failure among small start-up enterprises deters property owners from accepting such tenants.

The planning departments of local authorities face an intractable problem in motivating a collection of remote and disengaged agents to co-operate in any plans they might have for urban renewal and regeneration. Matters were quite different in the early post-war years, when urban reconstruction was an urgent priority. Much of our modern environment was created in that era. One can conjure up an image of a post-war architect or planning officer airily waving their hand over a tabletop model corresponding to a large derelict area that was set for redevelopment. The tabletop would be covered with small, white rectilinear boxes representing buildings in the modernist style. The person demonstrating the plan might have been dressed in an imitation of the sartorial style of the Swiss-French architect Charles-Édouard Jeanneret, known commonly by the pseudonym Le Corbusier.

We have come to regret the depredations of the cheap modern architecture that accompanied this post-war redevelopment; we should remember its vigour and ambition, which we might wish to recapture. We look for contemporary examples of such enterprise, but they are rare. Some of them are the result of private sector initiatives. The Built Environment Committee has witnessed one such example recently, which is from a firm that began working on town centre redevelopment some 30 years ago. The firm is based in the Sheffield area of South Yorkshire. A typical example of what the firm has achieved has been the redevelopment of an extensive site of a derelict steelworks. This degree of enterprise is rare and it cannot be relied upon to achieve the reconstruction that is called for. Only by engendering the same spirit of enterprise within many local authorities can a major transformation be achieved. It is appropriate to remember that once, in the not-so-distant past, they did embody such a spirit.

[Lord Evans of Rainow (Con)]

My Lords, I remind the House that it is an advisory five minutes.

[Viscount Hanworth (Lab)]

It is advisory, presumably, but not mandatory.

[Lord Evans of Rainow (Con)]

It is advisory, which means you do not need to go to five minutes; you can go shorter than that. Every one of the previous speakers was below five minutes. It is not mandatory but I remind the House that we have speakers who will speak later on this afternoon, when other Members who have already spoken will be at home.

Leasehold and Freehold Reform Bill

Viscount Hanworth Excerpts

2nd reading
Wednesday 27th March 2024 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, rent is income derived from the ownership of land or other property. It is an income derived without effort on the part of the owner. The owner would have acquired a title to the property at some time in the past. This may have been achieved by means of their labours or by inheritance, or the title may have been acquired by nefarious means that are nominally legitimate. The British economy is in decline; it offers diminishing opportunities for gainful employment. Therefore, there is, nowadays, a heightened incentive to acquire an income through rent. However, since such acquisitions are often at the expense of another party, rent-seeking requires to be restrained if it is not to damage the social fabric.

In recent years, the market for residential property and accommodation in the UK has been severely affected by the activities of rent seekers. The Bill seeks to place some restraint on these activities. It is appropriate briefly to describe what has been happening in recent times. The problems arising have two aspects. They affect both newly built and pre-existing properties. Newly built properties have been sold to new occupiers under leasehold clauses that allow the housebuilder to retain the ultimate ownership. They are often built in estates and the housebuilders will propose that payments are due for the upkeep of the estate.

There has been nothing to prevent the housebuilders which retain the freehold increasing these so-called service charges to an exorbitant level that far exceeds the cost of maintaining the estate—an income derived without effort on the part of the recipient. It is remarkable that many housebuilders have managed to sell the properties under leasehold clauses without the new occupants realising that they are not the full owners of the houses. The Bill addresses this abuse by partially banning the sale of new houses under leasehold clauses. However, it also contains provisions for a category of permitted leases in respect of new houses.

It is notable that the provisions of the Bill that restrain the sale of new houses under leasehold relate only to future ownership. They do nothing to redress the abuses of the past. Admittedly, freeholders and their agents must now guard their behaviour for fear of a legal redress that the leaseholders will be empowered to seek, but this seems to alter the balance of power between the two parties in only a minor way. Hitherto, the powers of the freeholder have been exorbitant. They have been able to set the service charges and insurance fees at whatever levels they choose. They have also been able to impose upon the tenants any legal costs that might arise out of their defence of a case brought against them in a tribunal or a court, regardless of the outcome. They still have unlimited powers of repossession in cases where tenants have refused or have been unable to pay the service charges.

The second major concern is that leasehold arrangements are to the disadvantage of the inhabitants of flats. It should be recorded at the outset that of the dwellings in England, 70% are flats and 30% are houses. Flats may be located in tower blocks or in small terraced houses. Other speakers have described how tenants in tower blocks have been affected by shoddy workmanship and inflammable cladding. Many have had no legal redress and are facing financial ruin. I shall concentrate on flats in modest houses and, for an illustration, I shall consider a small estuarine town on the mouth of the River Thames at a commuting distance from London.

The attractive terraced houses are at increasing elevations as one moves away from the water’s edge towards the high street at the centre of the town. Most of the houses are divided into two or three flats, typically occupied by elderly people or impecunious families. Like many seaside towns, this one has not been prospering of late, but there are clear signs that this is changing through the influx of wealthier Londoners. A prescient property company has been buying up the freeholds of these properties, which have remained mainly in the hands of previous owners who have moved away. They may have sold the leaseholds in respect of two or three of the flats that the houses now comprise.

The property company is a conglomerate—or, at least, a federation of agencies. A search of the companies register reveals that the constituent parts have directors in common. They comprise a property company, a managing and letting agency, a firm of solicitors and an insurance broker. There is also a shadowy affiliated company, Capital Recoveries. The property company has purchased the freeholds at what might seem to their owners to be attractive prices, but they are unlikely to have recognised in full the prospective values of their properties.

Some of the existing freehold owners acquired their titles in an era of low interest rates that encouraged them to buy to let. The current high interest rates, and, in the case of leasehold purchasers, the additional burden of increasing service charges, are encouraging many of them to sell up. The remaining problem for the property company is how to expel the tenants from the properties that are now in their control. This is not difficult to do in an era of no-fault evictions. In the meantime, it might be prepared to bide its time by deriving rents from the tenants.

The only anxiety of the property companies is that they may have to face an incoming Government intent on providing greater protection to tenants. The present Bill will require the property companies to smarten up some of their practices. After the Covid pandemic, the lists of service charges both for small houses divided into flats and for blocks of many flats contained an item described as “charges for the deep cleaning of communal areas”. There were no such communal areas in the small houses, and the testimony of the tenants was that no one from the management and letting agencies had ever paid a visit. Such spurious charges may no longer be sustainable under the prospective legislation, but it will continue to permit many other abuses.

Leasehold Properties: Managing Agents

Viscount Hanworth Excerpts

Monday 17th July 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, we are well aware of the significant issue concerning leaseholder protections where leases are extended or varied. A change to primary legislation is necessary to ensure the continuation of protection. We are looking to bring forward the necessary legislation as soon as parliamentary time allows. Obviously, compensation will be part of that discussion, I am sure.

[Viscount Hanworth (Lab)]

Is the Minister not aware that freeholders are frequently motivated to consolidate the ownership of their properties by driving the leaseholders into unsustainable debt, by dint of exorbitant service charges?

Leasehold Reform

Viscount Hanworth Excerpts

Thursday 23rd March 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My noble friend is absolutely right. Leaseholder issues are complex and contain a lot of legal issues that need to be dealt with. Therefore, we need to take our time, and we are doing so, but the government manifesto says that we will deal with this issue within this Parliament, and we intend to do so.

[Viscount Hanworth (Lab)]

My Lords, the Minister will be aware that freeholders have been empowered to impose the costs of any litigation that has been initiated by an aggrieved leaseholder upon that leaseholder. When will that extraordinary anomaly in British law be corrected?

[Baroness Scott of Bybrook (Con)]

The Government recognise that the existing statutory requirements do not go far enough to enable leaseholders to identify and challenge those unfair costs. We believe that leaseholders should not be subject to unfair legal costs and should be able to claim them from their landlords, and we are taking action to address that.

Residential Leaseholders

Viscount Hanworth Excerpts

Thursday 12th January 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

My Lords, the Government have already committed to: making it easier and cheaper for leaseholders to extend their lease or buy their freehold; banning new leasehold houses, so all new houses will be freehold from the onset rather than in exceptional circumstances; delivering a reformed commonhold system as an alternative to leasehold ownership for flats; and giving leaseholders more information about what their costs cover and ensuring that they are not subject to unjustified legal costs. I am sorry that the noble Lord could not find time to come to a meeting that I agreed to the last time I was at this Dispatch Box talking about the same issue. It was at that meeting that we discussed what noble Lords were expecting to see and how we could meet those expectations. However, as I say, we will bring forward further leasehold reforms later in the Parliament but I cannot say at this time exactly what date it will be.

[Viscount Hanworth (Lab)]

The Minister will be aware that the property companies that own freeholds are able to impose on leaseholders any legal costs that might arise from a leaseholder’s appeal to a tribunal in the face of the freeholder’s exorbitant service charges. When will this extraordinary legal anomaly be redressed?

[Baroness Scott of Bybrook (Con)]

The Government believe that leaseholders should not be subject to unjustified legal costs and should be able to claim their own legal costs from their landlord. The Government are committed to taking action to address this as soon as possible.