Building Safety Bill

Lord Blencathra Excerpts

Committee stage
Monday 21st February 2022 Grand Committee

[Lord Stunell (LD)]

My Lords, I slightly got the impression that I might even have got a draw on one of those, and I thank the Minister for her reply. In relation to Clause 12, we will want to see the detail of what the Minister has said. It is somewhat reassuring that she understood the concerns that have been expressed, and we look forward to examining it in more detail.

I have to say that she did not do quite such a convincing job on why the building advisory committee should be treated in a different fashion from the committee on industry competence or the residents’ panel. If the whole point of the procedure in Clause 12 is to stop the fossilisation of a set of structures in primary legislation and to give the possibility of changing them as time goes on, which is really the argument she deployed, it does not seem consistent with that line of reasoning that she has been resisting giving some flexibility to how the building advisory committee uses its functions, acting obviously under advice from the building safety regulator itself. That may well be something we come back to. Perhaps the Minister might like to think, in terms of her reply and the reason she gave for retaining Clause 12, about why that search for flexibility in the longer term is not an argument that also applies to Clause 9 in respect of its difference from Clauses 10 and 11.

[Lord Blencathra (Con)]

I am very grateful to the noble Lord, and I apologise for interrupting. I merely wish to apologise to the Committee for not having been able to speak to my amendments today. I got to London five hours later than I had planned. We had a bit of a breeze, and it was not a breeze getting here. I am very grateful to the noble Baroness, Lady Grey-Thompson, for introducing them and I apologise once again to the Committee. It is a pity in a way as they were my smallest amendments. I have a few larger ones later on, so I was hoping today that I could show the Committee that I can be very brief on occasion.

[Lord Stunell (LD)]

Before concluding, can I say that the Minister, if I can speak on his behalf, was very sad to have missed your speech, which he expected to be one of great eloquence? That having been said, I beg leave to withdraw the amendment.

Building Safety Bill

Lord Blencathra Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Blencathra (Con)]

My Lords, first, I declare a personal interest as a leaseholder of a flat near here, which will qualify for some fire remedial works and was built by one of the big four, who collectively raked in almost £4 billion in 2020. I give a warm welcome to the Bill, particularly the creation of a regulator. However, of particular interest to me are the parts on high-risk buildings and other safety measures. While I welcome these, I believe that we now have an opportunity to go much further.

When the Bill left the Commons, we did not have my right honourable friend the excellent Michael Gove as Secretary of State, so the Bill does only half of what it needs to do. Then on 10 January we had the superb Statement from the SoS, repeated here by my noble friend Lord Greenhalgh, setting out all the actions the Government propose to take to really sort out the cladding problem and protect leaseholders. We all owe a deep debt of gratitude to the Minister: I know that he has been arguing for all the things that were in that Statement and he had the good fortune to get a new Secretary of State who agreed with him and had the guts to go for it. I congratulate him on his rather feisty introduction of the Bill today. I also congratulate the noble Lord, Lord Best, on his outstandingly succinct description of today’s construction industry—what the Spectator last year called the house mafia.

What did the Secretary of State say on 10 January? He set out the range of actions and initiatives he wanted to take. These were in two broad categories, which could be classed as leaseholder protection measures and “polluter pays” measures. He said in the Statement repeated by my noble friend that he would take action against those who mis-sold dangerous cladding and insulation and those who profited from the consequences of Grenfell. He would review government schemes and programmes to ensure there were commercial consequences for any company responsible for this crisis and refusing to help fix it. He would take powers to exclude any company from government schemes and impose proportionate risk assessments on organisations such as the RICS and powers to review the operation of the RICS.

He would set a higher expectation that developers must fix their own buildings, and possibly issue instructions to insurance companies. There would be statutory protection for leaseholders from certain building costs and protection of leaseholders from eviction and forfeiture. He would introduce a residential property development tax and a building safety levy, and there would be new collaborative procurement guidance on removing the incentives for industry to cut corners and to help stop the prioritisation of cost over value, and possibly put that on a statutory footing. That is what the Secretary of State said he wanted to do. I am absolutely certain that, if my right honourable friend Michael Gove had been in post one year ago, most of those provisions would be in the Bill today, but now we have the chance to add them.

I do not intend, in Committee, to add just a few new clauses; rather, I have asked the Public Bill Office to draft two whole new Parts to add at the start of the Bill. One Part would be on leaseholder protection, with clauses setting out that no leaseholder will have to pay for any fire-related remedial work. I want leaseholder protection to be first and foremost in the Bill as a new Part 1, or a new Part 2 at the very latest. I want clauses defining what fire-related remedial work is, and what buildings it should apply to; clauses prohibiting freeholders and leaseholders from gold-plating remedial works to add to the value of their property portfolio. For example, if wooden decking balconies have to be replaced, leaseholders must be protected from freeholders replacing them with, say, bronze-covered aluminium or Italian marble flooring, making lease- holders pay.

Then I need clauses setting out alternatives to cladding replacement for low-risk buildings and permitting the Secretary of State to prepare new risk assessments. These could replace those compiled by the Royal Institution of Chartered Surveyors—and I want to put in a legal power to review its modus operandi, since it has not exactly covered itself in glory over the past three years, I submit to the noble Lords behind me. Finally, in this Part, I want a clause creating a scheme similar to the Flood Re agreement between the Government and insurers to keep down the cost of flood insurance, but in this case covering fire insurance.

The other new Part will contain “polluter pays” provisions or schemes for fire hazard remedial works. In it, I want to have clauses setting out that developers will be primarily responsible for the costs of all remedial works. Where they have created special purpose vehicles which they have now wound up, then the holding company will be liable. All contractors who supplied materials which were not fit for purpose, whether or not approved at the time, will be liable. Where we cannot find the developer or their special purpose vehicle, or their holding company, or their contractor, or their supplier, then the whole industry should be liable and pay through a levy system that will raise a lot more than £5 billion. Clause 57 does not go far enough, since it applies to future bills and not to bad ones of the past.

Now, clearly, my proposals—if I lay them before the House—will impact on current company law, laws of limitation, the Building Act and a host of other Acts. There may be ECHR concerns and concerns about retrospectivity. But we have never had a problem such as this before, where companies have made billions from flawed construction in the past. I submit that it is therefore right that we reach back in time to make them pay to remedy it now. They did it, not the leaseholders. Therefore, those parts of the Bill will need to be more skeletal than I would have approved of last week when I was still the chair of the Delegated Powers Committee.

[Noble Lords]

Oh!

[Lord Blencathra (Con)]

Ahem. We will also need some Henry VIII clauses to make those changes to existing Acts of Parliament. It is a tall order, but in the time we have, we can do it. We cannot at this stage set out all the details in new clauses since we do not know exactly what powers and provisions we will need. However, we can draft sufficiently wide regulatory powers to deal with all eventualities. Naturally, I want these to take the affirmative procedure so that there is some element of proper parliamentary scrutiny.

Simply look at Clause 57. Five out of the eight new subsections begin with the words “regulations may” or similar, so the Government have already taken wide regulatory powers. In any case, no matter when we take forward a primary Act—in this Bill, next year or in two years’ time—we will still need extensive regulation-making powers for all the details. I say let us do it now so that all those who have raked in billions from property deals see that this Government and this Parliament mean business—I have almost finished.

I know that my amendments will have dozens of technical flaws and will need beefing up and filling out. But that is what government lawyers and the Office of the Parliamentary Counsel are for. All I want to do is set the parameters of the action we need to take—and we need to take that action because lease- holders, as the innocent parties, demand nothing less. We need to take it so that all developers and contractors see this sword of Damocles hanging over their heads, because that is the only way they will ever pay up.

I look forward to debating this further in Committee and to getting support from your Lordships, if not for the exact details then at least for the concept of my amendments. In the meantime, I warmly support the Bill.

Building Safety

Lord Blencathra Excerpts

Tuesday 11th January 2022 Lords Chamber

[Lord Greenhalgh (Con)]

The right reverend Prelate is not being slow; if you are the Bishop of London, you have to be pretty quick. As a backstop, we have committed to look at solutions that involve tax, which is a Treasury matter—it has been very clear about that—or legal means to do these things. I am well aware of the work that has been done by Steve Day, supported by many experts, in bringing forward the polluter pays proposal. My personal view, as a humble Minister, is that we need a building-by-building assessment of liability if we are to ensure that the polluter pays. But that is down the road, and the sequence is: voluntary contributions first, and some of these other things are being positioned as backstops.

[Lord Blencathra (Con)]

My Lords, I declare a potential interest as someone who has some wooden decking on a balcony. I congratulate my noble friend on the wonderful Statement he has made, his own personal views today, and the work he has done over the last 12 months. More particularly, will he convey to my right honourable friend the Secretary of State the thanks of millions of leaseholders for the astonishing announcement he made yesterday? I always believed that, when he was appointed, there was no one better than Michael Gove to cut through and deliver success.

I do not want the taxpayer to spend a penny on this, but I want the developers and the freeholders to do so. With regard to the backstop, I suggest that we need to hold a sword of Damocles over the developers’ heads. The voluntary approach, I am afraid, will not work. Can my noble friend therefore bring forward urgent legislation—which we pass but hold in abeyance as that sword of Damocles—to let them see that Parliament means business and that we want legislation on the statute book that we can implement at a moment’s notice if they fail to deliver, rather than spend a year putting it through afterwards? I suggest that as a good tactical approach.

[Lord Greenhalgh (Con)]

My noble friend is a very wise man. With regard to my right honourable friend the Secretary of State—having worked with the Prime Minister for four years when he was mayor, I know that he likes the odd Latin phrase—quod erat demonstrandum: he has done an amazing job coming in to reset this. Of course, there is more work to be done, but I pay tribute to him myself, and I thank my noble friend Lord Blencathra for those kind remarks. I agree with him; they are very wise words.

When we look for the polluter to pay, as in all negotiations, you need both the carrot and the stick. I will use the metaphor of the very distinguished late Archbishop Desmond Tutu: you need your moment of truth and reconciliation, where people come forward and make a voluntary contribution. That could work to a degree, and time will tell how well it works. But equally, as a backstop, you need to prepare for the moment where you go to the Nuremberg trials and look, building by building, at who caused the mess, and make sure that they pay for it. We have started that process with Operation Apex, which looked at who caused the problems in particular buildings. We are getting some specific figures. My right honourable friend got a series of forensic accountants to look at some of this stuff, and more work will be done in that regard. That is very helpful advice.

Building Safety Defects: Costs

Lord Blencathra Excerpts

Monday 18th October 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I am happy to look at that specific case, because that sounds like an eye-watering sum of money. In the first instance, is full-scale remediation the answer? Has the freeholder looked at mitigation measures that may also achieve an acceptable way of improving things and lowering the fire safety risk? However, that does seem an extremely large sum of money, and I am happy to look into that case.

[Lord Blencathra (Con)]

My Lords, I do not want leaseholders, nor the taxpayer, to pay a single penny towards these remediation works, but I want the housebuilders to pay for every pound that it takes. I am afraid to say that the proposed levy is simply derisory. Will my noble friend campaign in government for a proper, full-scale windfall tax imposed on the housebuilders? In 2019, four companies—Barratt, Wimpey, Persimmon and Berkeley—posted profits of £3.8 billion. I repeat: one year, four companies, £3.8 billion. They should be made to pay from their profits for their shoddy work. Will my noble friend agree with that and just say, “Yes, Lord Blencathra”?

[Lord Greenhalgh (Con)]

My noble friend knows that government is not quite so simple. In all seriousness, we have stated publicly that the new tax on developers will raise at least £2 billion over 10 years. We know that the amount of money required is far in excess of that, but there is no upper limit, and we still have not yet announced the detail. We take my noble friend’s point on board with regard to the windfall tax.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Blencathra Excerpts

Committee stage
Monday 14th June 2021 Grand Committee

[Lord Blencathra (Con) [V]]

My Lords, I declare a personal interest as someone who pays ground rent on my London flat. I am coming at this from a slightly different angle from the noble Lord, Lord Lennie.

My noble friend the Minister is an honourable man, and I therefore believe him when he says that the Government want this Bill to come into force as soon as possible; he has urged us not to push any amendments which might delay its passage. I am therefore mystified at Clause 25 and the very bitty commencement dates. As the noble Lord, Lord Lennie, said, Bills often have different commencement dates, but the only things coming into effect on Royal Assent are the regulation-making powers and the usual consequentials at the end of the Bill, which we have just voted through on the nod. If the Bill is as urgent as the Government and we on this Committee say it is, why have we no date for the commencement of the only thing which really matters—the abolition of new ground rents and their replacement by the new peppercorn regime? Every week which goes by allows more iniquitous leases to be created.

I understand that the residential homes sector has been granted more time to adjust. I am sure that Messrs McCarthy and Stone and others will put that time to good use, adjusting their service charges to take account of any future ground rent losses. But as we consider what to do about the commencement dates at Report, we really need to know, very firmly on the record, when we will see the second and third legs of this three-legged stool. When will the Government introduce a fully-fledged leasehold reform and abolition Bill, and when will they introduce provisions like those advocated by my noble friend Lord Young of Cookham and my noble and learned friend Lord Mackay of Clashfern to have a proper ground rent buyout system?

I know that my noble friend the Minister will say that it is up to the usual channels and that he cannot make promises on when other Bills will be introduced, but we need to stress to him, and to the rest of the Government, that we will be very impatient unless we hear a firm commitment that this will be as soon as possible—ideally, in the next Session of Parliament and not sometime in this whole parliamentary period.

We have all said that this Bill is a good first start—a very good one leg of the stool—but we must see firm promises on the introduction of the next two legs or I, at any rate, will not be content to agree the commencement mishmash in Clause 25 when we come to Report.

[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.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Blencathra Excerpts

Committee stage
Wednesday 9th June 2021 Grand Committee

Moved by

[Lord Blencathra]

1: Clause 1, page 1, line 6, leave out paragraph (b)

[Lord Blencathra (Con) [V]]

My Lords, I will, for a change, be very brief, not least because there are a number of amendments in this group in the name of my noble friend Lord Young of Cookham which give a practical way forward and are far superior to mine. I declare a personal interest as someone who pays £602 ground rent per annum on my London flat. While that is a disgraceful rip-off, for no services given, it pales into insignificance compared to the horror stories I heard at Second Reading about leaseholders hit with escalating ground rents running to tens of thousands of pounds.

At Second Reading, I attempted to use mockery to draw attention to the fact that the English leasehold and ground rent laws are an absolutely prehistoric abomination which should not exist in a top G7 country these days. I also said that I fully support this Bill and will do nothing to hold up its becoming law. The only problem is that it does not go far enough and does not deal with the injustices for all those caught up in the current ground rent racket. The peppercorn rent solution, ridiculous though that term now is, does in fact give justice to all future leaseholders, and I welcome that. Amendments 1, 2 and 11 simply apply that same just principle to the current racket. If it is right and just that all future leaseholders, who have not lost a penny, are protected from this evil racketeering, then surely it is far more important to deliver justice to all those who are being ripped off at present, some for extortionate sums, as the House heard at Second Reading. Amendments 1 and 2 simply say that all current ground rents will become peppercorn rents, just as the Bill does for future rents. Amendment 11 offers an alternative, setting a ceiling on the amount which may be demanded in ground rent per annum and giving a refund to leaseholders who are being ripped off by ground rents above £1,000 per annum.

I suspect that my noble friend the Minister will say that this is a very complicated subject, that the Government are working on solutions and that we will see the full details next year in the leaseholders Bill. I accept that my amendments take an absolutist, purist approach, but I do like the detailed, sensible amendments tabled by my noble friend Lord Young of Cookham, which may offer a compromise—letting leaseholders buy their freedom. As my noble and learned friend Lord Mackay of Clashfern will confirm, since he is a far better scholar of ancient Roman law than I ever was, in ancient Roman times slaves could buy their freedom, but very few could afford to buy their manumission. Most were freed by testamentary manumission—that is, in the will of their master—and Caesar Augustus regulated the system. So I call on my noble friend the Minister to become the new Caesar Augustus and set free the millions of leaseholders still paying their salarium.

If the Minister cannot accept my amendments, I would like to hear exactly what is wrong with Amendments 7, 8, 12, 17 and 18, proposed by my noble friend Lord Young of Cookham and Amendment 5 in another group, in the name of my noble and learned friend Lord Mackay of Clashfern. They seem to me to be an excellent way to remove this 800-year-old injustice, bring justice to leaseholders and not deprive freeholders of some of their entitlements. I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I will speak to Amendment 12 and its consequential Amendments 7, 8, 17, 22 and 23. Their effect is broadly the same as Amendments 1 and 2, in the name of my noble friend Lord Blencathra, whose speech I commend. Whereas he was able to express himself in four lines, I am afraid that my amendments have taken up four pages. The amendments also achieve the same as Amendment 5, which we will come to later, in the name of my noble and learned friend Lord Mackay. However, his amendment reserves all the detail set out in mine to the discretion of the Secretary of State, in regulations, and is time-limited. The amendments standing in my name, if accepted, would give a right to buy out ground rents for ever, beginning on 1 January 2023.

As my noble friend Lord Blencathra has just said, the Bill as drafted applies only to future leases, coming into force on such a day as the Secretary of State may appoint by regulations. It does nothing to help existing leaseholders or anyone who buys a lease with a ground rent before the commencement date, but it is government policy that existing leaseholders should have the right to buy out their ground rents. I refer to the Written Statement by the Secretary of State on 11 January this year:

“I am confirming that the Government will give leaseholders of all types of property the same right to extend their lease as often as they wish, at zero ground rent, for a term of 990 years.”


Later comes the crucial commitment:

“We will also enable leaseholders, where they already have a long lease, to buy out the ground rent without the need to extend the term of the lease.”


The obvious question for the Minister, raised by these amendments, is why the Leasehold Reform (Ground Rent) Bill does not deliver government policy on ground rents. Why should we have to wait for the next piece of legislation to honour the commitment? On waiting for promised legislation, I am once bitten, twice shy. As Opposition spokesman in another place, when the hereditary Peers were removed, I was assured by the then leader of the House that stage two of House of Lords reform would be in place for the first round of elections to your Lordships’ House, by 2001. Twenty years on, I am still waiting.

There is still no firm commitment from the Government on when the Bill will come into force and, the longer the Government leave setting a date, the greater the risk that new monetary ground rents will continue to be created. The Government could stop this by indicating even a provisional date for this legislation to come into force, which would shift the bargaining power in favour of prospective purchasers of leasehold properties. That is why Amendment 22, in my name, prescribes a date of 1 January 2023 for this right to buy out ground rents to come into force.

The case for giving existing leaseholders this right was well made by the Law Commission. They took head on the counterargument that this right is unnecessary because leaseholders can extinguish the ground rent by extending their lease. I quote from Law Commission paper 387, entitled Leasehold Home Ownership: Buying your Freehold or Extending your Lease. Paragraph 3.63 of the consultation paper states:

“we explained that the 1993 Act right to a lease extension has been criticised for requiring leaseholders simultaneously to extend the term of their lease (and therefore pay the landlord for the deferral of the reversion) and to extinguish the ground rent (and therefore pay the landlord the value of the remainder of the original term). We noted suggestions that leaseholders should be able to choose between extending their lease, extinguishing their ground rent, or both, in order to reduce the premium payable on the lease extension.”

The paper continued:

“Support for the introduction of a right to extinguish the ground rent under a lease without extending the lease (whether alone, or together with the right discussed immediately above) was widespread. Consultees who supported this option included various professional bodies, the majority of commercial freeholders, a majority of firms and individual professionals, and a significant majority of leaseholders and other individuals.”


I continue to quote from the report, which states:

“Generally, consultees’ reasoning for supporting a right to extinguish the ground rent without extending the lease focussed on the predicament of leaseholders who are subject to onerous or doubling ground rents in long or very long leases. Both professionals and leaseholders explained that these leaseholders have no need to extend their lease term (which may be as long as 999 years), but wish to buy out their ground rent before it becomes onerous, and/or to make their property saleable. It was said to be ‘pointless’ to require them to claim an extended lease term purely to solve this problem.”


The report goes on to say:

“Several consultees considered that, given the forthcoming ban on ground rents in the majority of new leases, the right to extinguish ground rent in an existing lease (which is very long and does not require extending) would help to avoid the creation of a ‘two-tier’ market, consisting of leases with ground rent and those without. This argument was most persuasively made by a number of leaseholders from 1 West India Quay Residents’ Association. Pointing out that media coverage of the ground rent scandal has led prospective buyers to scrutinise ground rent obligations much more closely, Antonio De Gouveia wrote: ‘If Government is to cap or eliminate ground rents on new leases (which we think they will do), then there is even more reason for new legislation from the Law Commission to enable all leaseholders in our building to buy out their ground rent (onerous or not)’.”


I note in passing that the point about a two-tier market was made in the helpful briefing for the Bill from the Law Society. This all led the commission to its conclusion in paragraph 3.108:

“We recommend that leaseholders who already have very long leases should be entitled to extinguish the ground rent payable under their lease without also extending the term of the lease.”


My amendments deliver that. They have been drafted so that costs are kept to a minimum. No valuation is required because proposed subsection (6) of Amendment 12 sets out the terms, based on Law Commission examples. There is no prejudice to enfranchisement rights and timescales are set out to prevent any delay by the freeholder.

My amendment also addresses a different complaint raised by the Law Commission, namely that the current process for statutory leasehold extensions is too long and cumbersome. Landlords have options to game the system to make it as difficult as possible for leaseholders to exercise their rights. Look at paragraph 2.23 of Law Commission report 392.

My Amendment 12 therefore seeks to give effect to the Law Commission’s recommendations for simplification by proposing a straightforward way in which to buy out monetary ground rents without the need for notice and counter-notice, as exists under the current legislation. There will be nowhere for unscrupulous landlords to hide if the approach suggested in this group of amendments is adopted.

My Amendment 17 provides for the First-tier Tribunal to have jurisdiction in dealing with any issues arising from the exercise of the rights given by Amendment 12 and mirrors the provisions in Clauses 13 and 15. Amendment 12 goes further, in that it would also permit the tribunal at its discretion to award damages to a tenant denied rights to buy out a monetary ground rent, which is intended to serve as a deterrent to landlords denying such rights. Amendment 22 brings in the commencement date of 1 January 2023, giving those involved time to make the necessary preparations. Amendment 23 is consequential.

Why not use the Bill to give an option to millions of existing leaseholders, rather than wait for another Bill that deals with ground rents? There is no disagreement on policy, and here we have the vehicle. I await the response from my noble friend the Minister and hope that he will set the tone for this Committee by looking favourably on this first group of amendments.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, we want to move as speedily as possible but, as I stated in my reply, we do not want to set a deadline for things. We want to get this on the statute book very speedily in this Session; that is why it is so early in this Session. That is my answer.

[Lord Blencathra (Con) [V]]

My Lords, I am grateful to all noble Lords who have participated in this debate. I feel rather guilty that I am responding when it really should be my noble friend Lord Young of Cookham, who put forward an impeccable case today for the reforms he has suggested.

The one thing that has come through loud and clear to the Minister from all noble Lords is that the current system is totally unsustainable. My amendments are probably not appropriate; I believe the amendments of my noble friend Lord Young of Cookham are. If they cannot be accepted into this Bill, it is desperately important that we get them in the full leasehold reform Bill which we expect next year. If my noble friend wishes to put down his amendments on Report, I will support him; he may not wish to push them to a vote, but perhaps the Government need to see on Report that we are serious about talking about the injustice of the current leasehold system.

My noble friend the Minister has said that this is a difficult area and that he is committed to giving leasehold reform “high priority”. If I may say so, the Law Commission is a worthy body, but its problem is that it is full of lawyers; they see leasehold reform as a matter of dotting some “i”s, crossing some “t”s and tweaking an 800 year-old system a bit here and there to make it work better. As politicians—and as politicians in the Commons would say—we find the whole system iniquitous. It is wrong. Perhaps it is those of us from a Scottish background who cannot believe that you buy a property and do not fully own it; it is an extraordinary, wrong system. When the Bill comes next year, we do not want leasehold reform tweaked; we want it stopped for all new contracts.

The wonderful innovation of commonhold failed because we gave developers and other money-grubbing people the choice of continuing with leasehold or commonhold. We thought they would implement common decency and common sense, but they operated a system which made the most money—well, we cannot criticise that; it is inevitable. When the new Bill comes, let there be no choice. Let it be clear that commonhold will be the only system acceptable for all new purchase contracts in future.

That still leaves the problem of current leaseholders. I am very certain that, with Amendment 5 from my noble and learned friend Lord Mackay, the amendments from my noble friend Lord Young of Cookham on a buy-out scheme must be the right direction to go in, because it affords justice to leaseholders who can get out of this wicked system and gives some compensation—too much in my opinion, but who am I to say?—to current freeholders who would demand the right not to be stripped of all their benefits.

On early implementation, I refer my noble friend Lord Young of Cookham to Amendment 26, where I suggest that the Bill should be implemented on Royal Assent. I appreciate that we may need to make exceptions for property for old folks’ homes—I am not sure what the current term is for an old folks’ home, but I believe that is to be exempted for a couple of years for us to figure out how to do it. The rest of this Bill should be implemented as soon as possible after Royal Assent.

With those words—and my apologies; my camera was off a lot of the time so that my machine did not run down, but I heard all the debate—I am grateful to all noble Lords who have taken part and, in conclusion, emphasise to my noble friend once again that the Government might get away with not sorting out leasehold and ground rents in this Bill, but they will not get away with it next year when the big Bill comes. I beg leave to withdraw my amendment.

Amendment 1 withdrawn.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Blencathra Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Blencathra (Con)]

My Lords, I declare a personal interest as someone who pays ground rent on my flat in London.

I congratulate my noble friend the Minister on his usual courteous and full explanation of the Bill. I just do not know what he has done to draw the short straw again, but I suspect that he will get as much hassle from this House on this Bill as we saw with the Trade Act, China and the Fire Safety Act. However, I shall support it, inadequate though it is, because it is a small step in the right direction and because I have never before been involved putting lipstick on a pig, which the Bill attempts to do.

Before one can judge the merits, one has to look back at how we got here with these things called leasehold and ground rents. I do not mean just looking back at the 2017 consultation, nor the Commonhold and Leasehold Reform Act 2002, nor the 1993 leasehold reform Act, nor even the Leasehold Reform Act 1967. No, to understand where we are coming from, we have to go back a bit further than that—right back 1,000 years to the 11th century and the Domesday Book of 1089, which uses the term “freeholder” for the first time. The term “leasehold estates” appears a few decades later.

Medieval or feudal law was not concerned with hard-working families trying to get on the property ladder; in those days there was no concept of levelling up in Hartlepool or Rotherham. Land meant power in the Middle Ages, and powerful families wanted to retain ownership of their land while maximising their earnings from it. Thus the concept of leasing was established to allow serfs to work a plot of land, for a fixed period, on the basis that they would pay “in kind” by providing food and services to their master further up the social order. Thus, the common law of the landlord-tenant relationship evolved in England during the Middle Ages, based on a feudal social order and an agrarian economy, where land was the primary economic asset and ownership of land was the primary source of rank and status.

Let us roll on 1,000 years, and what has changed today? Nothing of real substance. We may buy a property but find that we are still vassals of a landlord who does nothing for us. We sit in this place as noble Lords and most of us are life Barons, but for those of us who are leaseholders, like the 4.6 million of our fellow country men and women, we are still just feudal serfs paying our masters for nothing in return. I suggest that the whole leasehold system is rotten to the core and has no place in a modern property-owning democracy.

Ground rent is even worse and can be traced back to Roman times, when the solarium, or ground rent, was payable by the lessee of a piece of land. I rather liked studying Roman law as a student in Scotland many years ago and learning, through the Institutes of Gaius and Justinian, how to manumit my slaves. Little did I realise on moving to England and buying a flat, that England still had that Roman equivalent of slavery with its servile property laws, whereby we are bonded to the master for 999 years, paying for nothing in return. It is therefore no surprise that the Normans brought the concept of ground rent to England and, following the 1290 statute of Quia Emptores, the landlord had complete control over the tenant.

I simply do not understand how such an iniquitous system can have survived for 800 years. In the last century we had radical reforming Governments, and even socialist Governments, but we still have a 1,000 year-old feudal law with regard to property ownership. Will the Labour Party opposite bring forth a new Wat Tyler or Jack Straw—the old Jack Straw, of the Peasants’ Revolt—and lead a revolt against ground rent? I hope it will, because I will be tempted to—or rather, I certainly shall—support it.

The Bill seeks to amend 800 year-old rules of common law. I like common law and respect it—it is one of the greatest systems of law in the world—but as far as the property rights of England are concerned, it has long outlived its moral justification. In this Session of Parliament we will debate Bills dealing with the challenges of the technological age: policing the internet, creating an advanced technology organisation, telecommunications infrastructure—all the stuff of the modern age and the future. Then let us look at this Bill. Clause 4(3) states:

“In this Act a ‘peppercorn rent’ means an annual rent of one peppercorn.”


What in the name of God are we doing in 2021 legislating with terminology such as “peppercorns”, a term invented in the late 16th century? Nothing demonstrates how archaic, obsolete and unlevel is our society like the iniquitous system of leasehold and ground rent surviving and prospering to this day.

The Minister hit the nail on the head when he said in his letter to all Peers:

“Ground rents are a charge that leaseholders pay with no clear service in return from freeholders. Unfair practices relating to ground rent have damaged the reputation of the leasehold system and caused substantial difficulties for some leaseholders. We believe that people’s homes should be theirs to live in and enjoy, not designed as an income stream for third party investors.”


There was never a truer paragraph—my noble friend is absolutely spot on—so why must millions of leaseholders be exempted from the Bill and still have to pay for no service?

We have a situation in which all future serfs will be freed from bondage but existing ones must still pay the master. I thought it was quite instructive when my noble friend said in his opening speech that the Government had decided not to define “ground rent” because—I paraphrase slightly—unscrupulous freeholders would use every underhand trick in the book to find a way round it. That is the problem we face: it is not about the innocent, decent freeholders but the unscrupulous ones.

I was going to put down an amendment to abolish ground rent completely, but I understand that landlords could complain to the European Court of Human Rights that they had been deprived of their property rights. Well, we cannot have that, can we? Since the Government like peppercorns, I suggest that we should have a full packet of them. Thus, I will invite the House to support an amendment so that all ground rents, including all present ones, become peppercorn rents. If future leaseholders need to be protected from being ripped off for no service in return, to use the Minister’s words, existing leaseholders are even more deserving of being protected. The Government might say that it is unfair to interfere with the income received from property, but the Government do that all the time when they take up to 12% stamp duty, 28% capital gains and 40% of your money when you die.

In conclusion, therefore, there is no fundamental new principle in limiting the charge of ground rents to a peppercorn. Landlords would not be deprived of their property rights, although in all morality they should be; they would just get a lower income in peppercorns—although that may rub salt in the wounds. Let us build those 300,000 homes per annum as a bare minimum, and let us give existing home owners proper rights to their homes, free from a feudal serfdom system that should have no place in a modern society.

Leaseholders and Cladding

Lord Blencathra Excerpts

Wednesday 25th November 2020 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, in addition to other ministerial responsibilities, I am now responsible for looking at leasehold reform. This is not the place to opine on that, but just over 50% of private sector developers and freeholders with aluminium composite material in high-rises funded it and did not pass on the costs to leaseholders—a significant proportion stepped up to the plate and did the right thing.

[Lord Blencathra (Con)]

My Lords, I declare a possible interest as someone who might be affected. One million leaseholders will still be ripped off by landlords, freeholders and agents who will carry out all possible so-called remediation works and gold-plate them to increase the value of their holdings and make leaseholders pay through the nose for them. Will my noble friend confirm that the Government will bring forward an amendment to the Fire Safety Bill stating that leaseholders will not pay a penny for remedial works but will deal with the genuine anomaly of wear and tear and service charges, for which they should pay? Will he also bring forward urgent legislation on leasehold reform and the full abolition of this iniquitous, prehistoric law which should have no place in a levelled-up society?

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend—that will be about five minutes’ work. I agree that leaseholders must be protected from unaffordable costs, particularly if these are driven by unnecessary gold-plating. I agree that leasehold reform needs to be an absolute priority, and it is a priority for this Government.

Business and Planning Bill

Lord Blencathra Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I hope to persuade the Minister to present a government amendment in relation to Amendments 52 and 79. I support the thrust of the Bill and the impact it will have, allowing the hospitality and construction industries to recover from a particularly difficult time.

These two amendments relate to working hours in the construction industry and whether, if the temporary measures in Clause 16 are still in place in the autumn or for next year’s breeding season, the Government will pay more than lip service to the environmental protections of which we are so proud. I share the Government’s support for environmental protections such as the habitats and other directives. These are now part of retained UK law, which we have supported through our membership of the European Union.

I am delighted to have the support of the noble Lord, Lord Shipley, for these amendments. Amendment 52 seeks to have regard to the Conservation of Habitats and Species Regulations 2017 and what catastrophic environmental impacts there might be reaching a common-sense agreement under those regulations.

Amendment 79 asks that regulations passed under Clause 22(3) be considered by affirmative procedure. Can the Minister confirm that these regulations have undergone or will undergo a proper consultation?

With these few remarks, I hope that I can enlist the support of the Minister and others for these two very important amendments. I am not seeking to delay construction with Amendment 52, but to ensure that we have regard to the habitats directives, which are now part of retained UK law, and that regulations passed under Clause 22 will undergo a proper consultation through affirmative procedure. I beg to move.

[Lord Blencathra (Con) [V]]

My Lords, Amendment 53 in my name seeks a complete ban on any construction activities carried out between 10 pm and 7 am in any location where residents live within 300 metres of those activities applied for.

I thank my noble friend the Deputy Leader for his extremely courteous letter immediately after Second Reading last week, dealing with the points I raised about disturbance to residents. He said:

“The draft guidance highlights in particular that careful consideration will need to be given whether to refuse applications made in relation to developments that are in close proximity to residential areas when the request is likely to have a significant impact on health, taking into account other legal duties of local authorities to protect persons in the locality from the effects of noise.”


While I accept that and believe in local decision-making, I also believe that a national backstop should be imposed by this legislation. If it is right to introduce a national law permitting applicants to apply for up to 24/7 construction working, as this Bill does, equally, it is right to impose a national limit on the times during which that construction may take place.

The Government cannot have it both ways. They cannot say, “We are passing a national law on construction working hours, but we cannot interfere with local decision-making when it comes to setting limits on those hours.” In most cases, I accept that this will all work okay, but we all know of the usual ploy whereby developers submit an application for 20 homes, which is granted, and then they slap in a revised application for 40 homes, which local authorities are afraid to reject in case they lose an expensive judicial review case. Developers and experts manipulate local planning authorities again and again. That is why a national backstop is required.

I strongly support Amendment 56 in the name of my noble friend Lord Randall, to which I wanted to add my name but left it a day too late. It is vital that environmental and wildlife concerns are taken into account. Local authorities must not grant any changes to planning applications until they have gone back and examined the environmental concerns expressed in the original application and any special conditions that the local authority then attaches. I am not suggesting that a new assessment must be carried out, or a whole new EIA, but that the original conditions of protecting the environment be maintained unless there is strong evidence that the proposed new construction conditions applied for create no adverse environmental or wildlife effects. This is not just a matter of disruptive work at night. Was there not a recent case of a company having to remove nets from trees and delay construction because it would have been disruptive to birds nesting at that time of year?

I have done inadequate justice to the speech my noble friend Lord Randall will make on his amendment. I look forward to him setting it out in his usual concise, but highly authoritative and expert, manner. I am proud to give him my support.

Business and Planning Bill

Lord Blencathra Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Lord Cormack (Con) [V]]

My Lords, I sat in your Lordships’ Chamber last Monday and heard every speech on Second Reading. Two things came across to me powerfully: the second I will deal with later, when I speak to my Amendment 28. First, I want to address a few remarks to my Amendment 20 and, as it is so short, I will read it for the benefit of your Lordships. Line 7 on page 5 of the Bill says:

“The Secretary of State may publish conditions for pavement licences.”


We should probably change that “may” to must”. I have added the words:

“and in doing so must take into account the needs of the disabled, including the blind and the partially sighted.”

It came across in speech after speech last week that there was real concern on this issue—a concern most graphically expressed by my friend the noble Lord, Lord Low of Dalston, who has just spoken, and my noble friend Lord Holmes of Richmond, who introduced this series of amendments.

t is one thing to aspire to a café society, which is very pleasant. It is entirely reasonable that we should spill out on to the pavements, if it is safe and suitable to do so. But it is essential that the needs of the disabled —including the blind and the partially sighted—are properly recognised. I very much hope that when the Minister comes to reply, we will have an assurance from the Government that this matter will be explicit and on the face of the Bill. If it is not, I will seek to reintroduce an amendment next week on Report and, if necessary, divide the House, but I am confident that that will not be necessary. I hope that this debate will be brief, and unanimous that on this issue, in those immortal words, “something must be done”.

[Lord Blencathra (Con) [V]]

My Lords, I will speak to Amendment 21 in my name, but begin by referring to the recommendations of the Delegated Powers Committee, which I have the honour of chairing. It was critical of these conditions, which are legally enforceable but not subject to parliamentary scrutiny. The committee’s report last week said:

“In the absence of cogent reasons for not requiring mandatory conditions to be imposed through regulations, we recommend that the power to impose legally enforceable conditions in Clause 5(6) should be exercisable through regulations and that the negative procedure would afford an adequate level of parliamentary scrutiny.”


However, today I am requesting simply that we apply it to the national condition relating to space on pavements for disabled people, because the guidance is absolute nonsense which would not survive proper parliamentary scrutiny.

This is nothing to do with my noble friend the Deputy Leader, or the Minister, who did not invent this guidance published by the Government on 22 June. Paragraph 4.2 refers to

“the recommended minimum footway widths and distances required for access by mobility impaired and visually impaired people as set out in Section 3.1 of Inclusive Mobility”.

Paragraph 2.2 on page 5 of Inclusive Mobility says that:

“Someone who does not use a walking aid can manage to walk along a passageway less than 700mm wide, but just using a walking stick requires greater width than this; a minimum of 750mm. A person who uses two sticks or crutches, or a walking frame, needs a minimum of 900mm, a blind person using a long cane or with an assistance dog needs 1100mm. A visually impaired person who is being guided needs a width of 1200mm. A wheelchair user and an ambulant person side-by-side need 1500mm width.”


So, if I read this correctly—and I apologise to the Minister if I have got it wrong—rather than one simple instruction to café owners to keep a space of 1,500 millimetres, there are six different widths by which they might be guided.

Some noble Lords are old enough to remember two ancient television programmes. I can imagine a Benny Hill sketch—or something like that wonderful “Fawlty Towers” episode in which John Cleese keeps moving his diners from table to table—whereby a café owner sets out his tables at 700 millimetres and sees someone with a walking stick coming and moves them out to 750 millimetres, then I come along in my chair with my wife beside me, and he moves them out to 1,500 millimetres, and closes them back to 1,100 millimetres when my noble friend Lord Holmes comes along with Lottie, his guide dog, or the noble Lord, Lord Low, comes along with his white stick.

These guidelines are unworkable. We must have one simple rule: a minimum of 1,500 millimetres in all cases. That would also go some way towards aiding social distancing.

[Baroness Thomas of Winchester (LD) [V]]

My Lords, I am bowled over by the research done by the noble Lord, Lord Blencathra.

I am pleased to support the amendment moved by the noble Lord, Lord Holmes of Richmond, and the other amendments in this group. People who do not have mobility problems or sight impairment might wonder why there are so many amendments about accessibility. The answer is simple. So many of us who use wheelchairs or, in my case, mobility scooters, or have a sight impairment, have all had experience of obstructed pavements, which make journeys extremely hazardous.

As my noble friend Lady Pinnock said from these Benches, we support what the Government are doing in the Bill, but there is detail which must be addressed, and I hope that I am pushing at an open door. I too note the national guidance for local authorities over pavement space, but guidance is unenforceable by its very nature, so how much notice of it will be taken by an enthusiastic café owner trying to maximise table space, for example? We need something much more explicit in the Bill, and I urge the Minister to table a suitable amendment on Report if he is not going to accept any of the existing amendments.

--- Later in debate ---

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

I have received a request to speak after the Minister from the noble Lord, Lord Blencathra.

[Lord Blencathra [V]]

My Lords, it would be churlish of me not to intervene at this stage and thank my noble friend the Minister most sincerely for his excellent concession in saying that these national guidelines will now be subject to parliamentary scrutiny via the negative resolution procedure. I chair the Delegated Powers Committee. This is an excellent and very welcome concession.

We make laws in two ways in this country, or we should do—Acts of Parliament and statutory instruments—but in the past few years we have seen a worrying trend of guidance having legal force and a new invention, which we will come to in a Bill very shortly, of something called “protocols”, which are legally enforceable. These are just clever euphemisms for what should be regulations. I am delighted that my noble friend the Minister will put these on a statutory basis. I also look forward to his amendment next week in time to set minimum guidelines for access on pavements.

In the meantime, I thank my noble friend most sincerely for this excellent change of heart today.

[Lord Greenhalgh]

I thank my noble friend for his comments. Of course, I noted the points about the need for a minimum access requirement.