Leasehold and Freehold Reform Bill

Debate between Clive Betts and Barry Gardiner

2nd reading
Monday 11th December 2023 Commons Chamber

[Mr Betts]

There are real issues with that, which I was going to address later, but I will do so now. It is important to strengthen the right to manage, both for leaseholders and for freeholders in these estates who own the freehold of their house but not of the communal areas. I said earlier that in all property purchases where common areas remain in private ownership, there should be, at the point of purchase, a clear understanding of the agreement between the local authority and the developer about who is responsible for those common areas. In many circumstances it is simply opaque. Often, purchasers do not know who is responsible and are sent on a wild goose chase to find out once they have bought their property.

Returning to onerous ground rents, the Select Committee took counsel’s opinion, which was quite interesting, and made recommendations in paragraphs 114 to 116 of our report. There were two clear arguments why removing onerous ground rents from leases retrospectively was completely compatible with the European convention on human rights. The first, which most of us may not have thought about, is that controlling or changing rent is not confiscation of property but control of its use, so it does not conflict with the article on removing people’s property rights. Secondly, the convention includes a justification where the proposal has a wider beneficial impact on society, which can be offset against any impact on the property owner. Counsel’s opinion was that it was therefore perfectly justifiable under the European convention to remove onerous ground rents on existing properties.

[Barry Gardiner (Brent North) (Lab)]

My hon. Friend will remember that when the Labour Government overturned the case of Custins v. Hearts of Oak in 1967, they used exactly those grounds to justify doing so.

[Mr Betts]

I do remember that far back. Many will not remember the Labour Government’s ’67 reforms, but they were quite important on those grounds—absolutely.

Other good aspects of the Bill include its reducing the price of enfranchisement and trying to make it simpler. Now, I am not sure that it makes it simpler; it is still a bit complicated. In the end, it partly depends on the capitalisation rates that the Government introduce, which will determine the price. But a lot of my constituents who are leaseholders live in houses, and they often face enormous barriers to carry through the enfranchisement process. I have referred to Coppen Estates in my constituency, which is notorious for simply not replying to letters. I once got it to reply to a recorded letter at the third time of asking. Normally, it ignores everything. That is just its way of trying to hang on to its ground rents and its income from leases. How will we deal with those sorts of individuals and companies, and the fact that they transfer ownership around from one company to another?

Why is there no right of first refusal for leaseholders in the Bill? I was pleased that, some years ago, Sheffield Council agreed that when it sold freeholds, the right of first refusal would go to the leaseholder. That would be a simple reform, and I hope the Secretary of State will consider it. The improvement of the enfranchisement process to make it simpler and reduce the cost is right, but I would like further improvements to ensure that it will work.

I welcome the standardisation of service charges. One big complaint to the Committee was that leaseholders often simply do not know what they are paying and why. They cannot work out which services are supposed to be provided and which are not. That is an important step forward.

On commission fees, we heard about the £150 to change a doorbell and the £3,000 to put up a conservatory—complete rip-offs. There is no justification for them in houses in particular, and very little justification in flats. I am pleased that freeholders will now have to provide a schedule of rates that will be charged. We called for a cap on rates, which might have taken reform a little further, but at least there now has to be clarity and transparency. I also welcome the clause that means leaseholders will not end up paying for the legal and other costs of freeholders where there is any conflict or dispute.

A number of other measures have been omitted from the Bill, but they could be included very easily. The Secretary of State mentioned forfeiture. If leasehold is a feudal tenure, then forfeiture is prehistoric—it really is. If a leaseholder in a very small way fails to comply with an element of their lease, they could have the property taken off them. That is just unacceptable and unjustifiable. The Secretary of State was right in what he said. Forfeiture is not necessarily something that gets used, but the threat of its being used puts the onus on leaseholders to “behave” or do what the freeholder wants them to do. The removal of that with a simple clause would be really welcome.

Local Government Procurement

Debate between Clive Betts and Barry Gardiner

Thursday 13th March 2014 Commons Chamber

[Mr Betts]

My hon. Friend has raised a number of points. Let me deal first with his point about transparency. We support open-book accounting, but I accept that that means opening the books to the councils themselves rather than a wider agenda. Freedom of information is often not applied to every aspect of a contractor’s dealings. We urged councils to consider making that so, but did not direct them to do so because ultimately this is a local matter and they should be free to make that decision. As for whistleblowing, we concluded that a clear system that contractors would be required to adopt should be written into the contracts. There should be no effect on a whistleblower. They should be protected as part of the contract. If any whistleblower raises concerns with a contractor, the information must be passed on to the council. We also considered ways of enabling whistleblowers to draw attention to problems anonymously, which would probably involve a role for the National Audit Office.

[Barry Gardiner (Brent North) (Lab)]

I congratulate my hon. Friend on his statement. He rightly referred to a move from lowest cost to best value. He will, of course, be aware of legislation passed by the last Labour Government, which stipulated that all public bodies should procure only legal and sustainable timber. Did the Committee carry out any investigations of the progress that local authorities are making in that respect?

[Mr Betts]

I am afraid that I cannot provide a great deal of further enlightenment. We did not receive much evidence relating to the environmental elements of local government commissioning. What was clear to us, however, was that, although cost is obviously very important to councils at this time, other important issues, such as the quality of service, economic and social added value, and indeed environmental impacts and implications, should be considered by councils as part of their procurement strategies.

[Mr Betts]

Absolutely. We believe that that is now a matter for central Government—the Department for Communities and Local Government and the Cabinet Office, whose commissioning academy could be used to increase skills in local authorities—and for the Local Government Association. Many examples of good practice will be sector-led. A number of councils are doing excellent work across the political spectrum in encouraging contractors to take on apprentices as part of an overall council policy, but the practice would be a great deal more effective and beneficial if it were adopted by other councils. That aim is at the heart of our report.

I thank all members of the Committee for their work. I believe that the report makes many good recommendations that will enable us to make progress. It was approved by the whole Committee, and that is the basis on which we always try to work.

[Barry Gardiner]

On a point of order, Madam Deputy Speaker. Before the statement, you were good enough to explain the procedures—which are rather novel for the House—that would govern its delivery and the subsequent questions. Can you tell me whether it is in order, when such a statement is made by the Chair of a Select Committee, for no Minister from the relevant Department to be present?

[Mr Betts]

Further to that point of order, Madam Deputy Speaker. A local government Minister—the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams)—was asked to attend, but he thought that the statement would be made earlier, and he had a ministerial commitment outside the House. He rang my office to apologise and I accepted his apology. The Deputy Chief Whip is representing him on the Front Bench, but obviously the Deputy Chief Whip could not speak.