Leasehold Reform (Ground Rent) Bill [Lords]

Debate between Chris Bryant and Eddie Hughes

2nd reading
Monday 29th November 2021 Commons Chamber

[Eddie Hughes]

I appreciate my right hon. Friend’s strong lobbying on this matter. I think the Government decided that it was appropriate to treat all leaseholders the same and therefore we made that change, although we did allow an extension in the introduction of that to April 2023.

[Chris Bryant (Rhondda) (Lab)]

The bit I do not understand is why we have leasehold at all. It is just preposterous nonsense, is it not? It is a feudal relic. Would it not make far more sense to have some kind of commonhold situation for flats, which is what they have in nearly every other country in the world and, I think I am right in saying, also in Scotland? Does that not make far more sense? We can then just get rid of leasehold completely.

[Eddie Hughes]

I thank the hon. Gentleman for his intervention. I wonder why, in the brief periods when Labour has been in control, it has not done so itself. I guess English law is pretty complex, so it would not be so straightforward to simply withdraw it on the basis that he suggests. Perhaps when Labour is in power again at some point in the distant future, it will be able to return to this matter.

Learned Societies at Burlington House

Debate between Chris Bryant and Eddie Hughes

Tuesday 8th June 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Eddie Hughes)]

It is a pleasure to serve under your chairmanship, Ms Rees. Like others, I commend my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing this debate. We have heard fantastic contributions from right hon. and hon. Members from across the House. I note the silent contribution from my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), whose presence in the Gallery signifies a strong interest in the subject matter under discussion.

I am grateful for the contributions, but take issue with the idea that responsibility for the problem needs to sit with DCMS because they are more cultural. That is unfounded. Within MCHLG we have a strong appreciation of the cultural and scientific elements that are being discussed. We fully appreciate that heritage, and for that reason we all want to see the future of the five learned societies secured, not just in the short term but for many years to come, at a venue befitting their enormous scientific and cultural contribution.

I believe, as do the Government, that the right venue is New Burlington House. In deference to my hon. Friend the Member for Stroud (Siobhan Baillie), unfortunately there will still be some faffing about. We are in the early stages of negotiation; we have just pitched our offer to them and are now awaiting a response, so there will be faffing. Hopefully, with a Minister who is keenly engaged in the subject, we will be able to make some headway.

I echo the comments made by hon. Members who recognise the incredible work done by the Geological Society, the Linnean Society, the Royal Astronomical Society and the Society of Antiquaries, which seems to be well represented by Members, and the Royal Society of Chemistry. I will temper any praise with the caveat that many of the wonderful collections housed by those societies are not usually open to the public. We heard a fine outline of some of the things that are available, and I am looking forward to seeing those works myself. The Government recognise their contribution, but we need to support them to survive and adapt in a post-covid world to become, dare I say, modern and accessible institutions for all. Others have quoted Charles Darwin, as one of the Linnean Society’s most notable past fellows: it is not the strongest of the species that survives, or the most intelligent; it is the one most adaptable to change.

The legal position is that in 2005 the High Court confirmed that a landlord and tenant relationship existed between MHCLG and the five learned societies. Both parties openly negotiated and agreed an 80-year lease, which would protect the learned societies from paying full market rent until 2085. This agreement, which included a £1 million contribution to repairs from my Department, remains in place today, with MHCLG acting as a supportive landlord, working with its tenants to help the societies deliver their mandates.

Here is, unfortunately, where we get to the faffing. Under the current rental agreement, the rent set for each year is determined by a valuation designed to bring rents gradually to market value by 2085, when the lease expires. The market value is determined by market evidence from comparable properties being used for education or cultural purposes. Given the references to a posh merchandise that might be available locally, it is important to stress that market value in this context does not mean the same value attributed to office tenants or luxury retailers on Piccadilly. Both the learned societies’ and my Department’s valuers agreed the evidence that determines value, and I think we can all agree that that reflects the terms settled upon by the learned societies.

[Chris Bryant]

I want to return to the point that the Minister made about what the learned societies do. I would dearly love them to be able to take some of their experience and knowledge around the country more, but it is very difficult to do that if all the money is spent on paying rent to the Government. I wonder what a sensible assessment of, say, £150,000 a year could do for one of the learned societies, as opposed to what it can do for Government. That might be a sensible part of trying to assess a way forward.

[Eddie Hughes]

I am sure I will repeat this later on, but we have made our pitch to the learned societies and we are awaiting their response. Given the commercial sensitivity of those negotiations, it important that we wait to hear from the learned societies themselves about what they think the way forward will be.

We must acknowledge that the growth in annual rent under the lease contract has been unpredictable. UK rents have grown significantly since 2005, causing a significant challenge for the learned societies. Achieving a rent that represents value for money to the taxpayer while giving security and certainty for the learned societies is the Department’s goal, and we hope to achieve that in collaboration with the learned societies.

Rent for 2020-21 financial year is £15.35 per square foot, which was agreed through the formula and is some 70% lower than the £50 per square foot that is the current market value for similar use—as I said, for educational purposes, not compared with the much more expensive commercial properties. That was agreed by both parties. However, we have heard the real financial concerns of the five learned societies, and the issue has received significant media coverage. In 2019, the societies sought a grant from our Department that would allow them to purchase a 125-year lease from us at a peppercorn rent. We assessed the proposal and of course considered the benefits, which are incredibly difficult to put a value on, of keeping the learned societies at Burlington House.

The Treasury’s Green Book rules require us to assume that if a learned society vacated Burlington House, it could be replaced by a similar tenant who would meet the cost of the rent at the market rate. So, it is not in our Department’s gift to grant that peppercorn lease. I fully appreciate that others have said that different options might be available to the Treasury, but considering such options is clearly way above my pay grade.