Kew Gardens (Leases) (No. 3) Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st May 2019 Lords Chamber

Moved by

[Lord Hodgson of Astley Abbotts]

1: Clause 1, page 1, line 4, at end insert—
“( ) The Secretary of State may not grant a lease for more than 31 years under subsection (1) unless he or she has consulted the Charity Commission on the compliance of the proposed lease with the functions of the Royal Botanic Gardens, Kew, under section 24 of the National Heritage Act 1983 and with sections 117 to 123 of the Charities Act 2011 (restrictions on dispositions of land) and the results of that consultation have been published.”

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, with this amendment, we leave the harsh atmosphere of steel manufacture for the gentler world of Kew Gardens, and what better day to do so than the first day of the Chelsea Flower Show?

I will begin by making it clear what my amendment is not about. It is not an attack on the Bill itself, which I think has an excellent purpose in encouraging Kew, like all semi-public bodies, to make best use of its assets. It is not an attack on the institution itself. I explained at Second Reading that, though I am no plantsman, I am aware of Kew’s worldwide reputation, and it is part of our soft-power armoury. It is not an attack on the trustees—good men and women true—who, I am sure, are doing their best. It is not an attack on the Minister, who has given several passionate speeches in favour of Kew during the earlier stage of this Bill; and nor, indeed, is it an attack on his officials in the Box, who have been more than kind to us, and who have written, had meetings and helped those of us with an interest in this topic as much as could reasonably be expected.

But the French have a phrase—the French always have a phrase—“autres temps, autres mœurs”. For those of you who cannot understand my execrable French, it means “other times, other customs”. All of us who are involved and who have an interest in this Bill will eventually move on, and we cannot be certain that those who come after us will be as well motivated as today’s participants and protagonists. Therefore, we need to ensure that the keys to the castle are safely guarded for ever against two broad types of possible events. The first I could describe broadly as conspiracy—that is to say, in the future, a determined effort to misapply Kew’s assets, maybe in response to some shift in national government policy. The second type—in my view a more likely outcome, but I hope I am not using unparliamentary language—is a cock-up: that is, an administrative failing or oversight that is not caught in time.

This is the essence of my amendment. The Bill’s intention is to open up considerable financial returns by extending the maximum term of a lease from 31 years to 150 years. The Explanatory Notes focus on seven houses on Kew Green that are owned by the Crown and are said to be surplus to Kew’s requirements. Before we go any further, I would be grateful if the Minister could explain whether there are any other assets to which the Bill might apply in future that are currently hidden from view. In other words, is this a one-shot deal after which nothing else can happen, or, when the Bill is passed, might we suddenly find that a series of other assets is revealed?

My direct concerns are twofold. As I said, the Bill increases the financial resources available to Kew. Noble Lords will be familiar with the crime thriller book or film in which the grizzled detective with 25 years’ experience tells his naive new recruit to “follow the money”. That has been a feature of some charities’ behaviour in recent years—a tendency to overlook and downplay the fact that, as a charity, it has a stated public benefit objective and instead to be dazzled by access to funding. That is my first concern.

My second concern is potential inflexibility. Extending leases is of course financially very attractive. However, once the lease is signed, the asset is effectively gone, at least for 150 years. At Second Reading, a number of noble Lords, including the noble Baroness, Lady Kramer, drew attention to places where Kew’s service performance offering might be improved. So we need to be sure that any new arrangements balance the search for funding today with the constraints on Kew’s future operations and its overall performance in future. I would feel happier if we had a clear regulatory structure and lines of authority.

I will not repeat what I said at Second Reading. Suffice it to say that the Royal Botanic Gardens, Kew is a charity—but a charity with a difference. It is what is known as an “exempt charity”: that is, it can access all the benefits of a registered charity, on tax and so forth, but it does not—indeed, cannot—register with the Charity Commission, which therefore has no sight of, and no ability to watch, what is happening in the charity. Instead, an exempt charity has what is called a “principal regulator”, which in Kew’s case is Defra—the Minister’s department. However, “principal regulator” is a misnomer. The principal regulator’s sole task is to ensure compliance with charity law. When the principal regulator discovers malfeasance, it can do nothing about it. It has no enforcement power but has to pass the case on to the Charity Commission to take whatever actions are necessary. As I said at Second Reading, its role will be closer to that of a traffic policeman than that of a regulator. On top of this already somewhat confused situation, we have the provisions of the National Heritage Act 1983, which has a whole section devoted to Kew and gives the Minister very wide powers indeed, but which nowhere mentions the need for an exempt charity to comply with the provisions of the Charities Act, despite the Minister having the very wide powers to direct the board.

My noble friend Lord Eccles has been good enough to put his name to this amendment. I am delighted that he has done this, because as a past chairman of Kew he can speak with far greater authority than I can. I think he intends to focus on the part of the ministerial brief on power, so I will say no more about it now.

What is the department’s answer to this regulatory model? Its deus ex machina is the existence of a memorandum of understanding signed in 2010 between the department and the Charity Commission, in which—as I understand it; I have not seen it so cannot be certain what it says—the department binds itself to observing the principles of charity law in connection with Kew. I do not doubt that this represents an effective tactical bridge, but strategically it is very weak because an MoU is capable of being swept away at the stroke of a ministerial pen.

My amendment aims to reinforce that potentially weak bridge. It does so by binding the existing MoU into the Bill, requiring the Secretary of State in statute, before he grants any lease extensions, to consult the Charity Commission and to publish the results of that consultation. Some, perhaps including my noble friend, may argue that this is bureaucratic, to which I reply that Kew’s worldwide reputation is too valuable to take chances with. The need for these consultations will be infrequent—perhaps only one will be needed if my noble friend gives the answer that only seven properties will ever fall under the provisions of this Bill.

About quarter of an hour ago, the noble Lord, Lord McFall, moved a series of changes to the procedure rules of your Lordships’ House. One of them permits short explanatory statements to amendments. I thought I might be able to add one to this amendment, so I went to the Public Bill Office to ask whether I could. I was told, “Not yet, you are jumping the gun. You have to wait until the House has passed it”. If I were able to table a short explanatory statement summarising what I am trying to achieve, it would read as follows: “to clarify and strengthen the lines of responsibility for ensuring compliance with charity law for the trustees of the Royal Botanic Gardens, Kew, Defra, the relevant government department, and the Charity Commission”. I beg to move.

--- Later in debate ---

[Lord Hodgson of Astley Abbotts]

Before my noble friend leaves behind the issue of the leases, can he let the Committee know whether other assets could be leased, or are we talking just about seven properties on Kew Green?

--- Later in debate ---

I will look again at some of the key points raised, but I want to emphasise that the whole purpose of this legislation, in moving from the figure of 31 to 150, is to release funds for Kew to do what we all want it to do: supply solutions to many of the issues facing our ecosystems. It is science that I will always put first. I have problems with the amendment because of the legal situation, and although I am very happy to continue discussions with my noble friends to provide reassurance, I hope my noble friend will feel able to withdraw his amendment at this time.

[Lord Hodgson of Astley Abbotts]

My Lords, my noble friend the Minister has been extremely courteous and accepted interventions from all sides of the House, which is very good of him. He may be regretting the briefing he provided for us before Second Reading, at which he was unwise enough to say, “I hope some of you are going to take an interest in this Bill and we get enough speakers”. He may have put his head into the lion’s mouth there.

I thank my noble friend Lord Eccles, who brings a wealth of experience and insight to this and brought out the difficult balances that are to be struck—no one is suggesting that what we are trying to tackle is easy. To the noble Baroness, Lady Bakewell, I say that of course we understand that Kew needs the money; but we need to make sure there are appropriate checks and balances and that we are not chasing the money too much. I am grateful to the noble Baroness, Lady Jones, for her general support.

My noble friend made three important points. First, he said that the focus is on seven residential properties but there are no immediate plans to go beyond that. That is a careful set of words. Secondly, he was very careful and courteous also in dealing with the “core” and “non-core” point, brought up by my noble friend Lord Eccles.

Finally, as I understand it, the legal advice is that this amendment does not have effect because the Crown land has no link with a charity and therefore with the Charity Commission. I am therefore not quite sure why the department needs to sign an MoU to ensure compliance with charity law because if it was just—

[Lord Gardiner of Kimble]

This is because the MoU relates to the plants, collections and functions, not to the land.

[Lord Hodgson of Astley Abbotts]

That is very helpful. So the MoU is narrowly drawn in that sense. I am grateful for that. I want to make sure that somewhere in this legislation we know how big a set of opportunities we are offering Kew and make sure that there are no unnecessary opportunities for side deals which may release funds for Kew in the short term in a way that does not deal with its long-term objectives, which we all support. We will carry on the discussion. In the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Lord Hodgson of Astley Abbotts]

Following on slightly from the point made by the noble Lord, Lord Campbell-Savours, can the Minister address the nature of the leases? These will presumably be repairing and insuring leases, in the sense that at the end of the term of the lease Kew will want the property back in the state in which the lease was granted. It would be worth while if my noble friend could confirm that, either now or in writing later.

The one amendment in this group with which I have particular sympathy is Amendment 7. This seems to provide a way to get some of the answers to the questions posed by my noble friend Lord Eccles about core and non-core land and to the wider concerns in the House about whether this is a one-shot deal or whether there is—as the noble Lord, Lord Campbell-Savours, just said—around the periphery of the properties a whole series of small plots of land that might at one time or another be envisaged as falling under the provisions of this Bill. Some work on Amendment 7 could provide some answers and reassurance to those of us concerned at the nibbling away that might take place over a period of time in circumstances that are hard to foresee now.

[Lord Gardiner of Kimble]

My Lords, I am most grateful to the noble Baroness for tabling these amendments. Without going on for too long, I should like to take the opportunity to place on record a number of points.

Amendment 5 seeks to require the Secretary of State to publish, within a month of the Act being passed, an impact assessment covering any property that could be involved in these leases and any related financial liabilities and income projections. I understand that the aim of the amendment is to ensure public transparency on the scope and impacts of the leases that may be enabled under the Bill. I am most grateful to the noble Baroness for allowing me to put on record the detail already published in Kew’s annual report and accounts, which includes the valuations set for Kew’s heritage assets of land, buildings and dwellings, as well as those assets under restoration.

Kew has already estimated the value to Kew of the properties affected. I understand that the £40 million was in 2015. Since then, the assessment is that the value of leases and avoided renovation costs in the short term would be up to £15 million. This estimate is based on the seven residential leases, of which two are currently unoccupied properties that require substantial renovation. This means that there cannot be any more quantified projections other than those that Kew has given at this time.

The need to scrutinise the impacts of lease proposals will be fulfilled by Kew in taking specialist advice and preparing proposals for consideration by, first, its executive board and board of trustees and, ultimately, the Secretary of State. This includes the involvement of Kew’s finance committee, audit and risk committee and capital development committee, as well as Defra. As I have said, and as we have all realised, Kew will focus on the seven residential properties currently let on assured shorthold tenancies or empty. As I have said, Kew has no immediate plans beyond that.

I find it really rather alarming that everyone is determined that dreadful things can happen. The noble Lord, Lord Whitty, has already said that this is one of the most protected sites in the country. No Parliament can bind its successors. All we can do is use our best endeavours now, with the protections that are there in legislation. I am looking at the noble Lord, Lord Campbell-Savours. If a Parliament decided to amend the National Heritage Act in an adverse way, of course we would regret it, but it is for future Parliaments to decide those matters. What we can deal with today is having all the protections we possibly can. I have sympathy with all that the noble Lord, Lord Whitty, is seeking, but it is on record—even from the noble Lord—that this is the most protected part of the kingdom.

The development of all aspects of the Kew estate will remain subject to the approval of its board of trustees and in line with Kew’s world heritage site management plan, just as any shorter-term leases already would. Although I fully endorse the desire for meaningful transparency in these leases and the motivation behind the amendment from the noble Baroness, the degree of variation means that it would be best served through Kew’s existing proposals and commitments. Indeed, the lease would be publicly available at the Land Registry when the sale completes.

It is the view of my department that this amendment would risk providing information that would not be precise. Of course, it is subject to market conditions. In addition, the Secretary of State has to follow the guidance in Managing Public Money, formerly the Treasury Green Book, which requires value-for-money assessments.

The noble Baroness, Lady Bakewell, referring to Amendment 6, made some important points about the local planning authority. I understand and share the wish of the noble Baroness, Lady Jones of Whitchurch, that any refurbishment or development should require the correct approval so that it does not compromise the property—which is Crown land—the world heritage site or Kew’s functions and activities in any way.

Kew’s activities, including any lease under the Bill’s provisions, are overseen by Kew’s board and the Secretary of State. The discussions and negotiations about leases would be initiated by Kew in accordance with its governance. This includes the trustees’ code of best practice, the National Heritage Act 1983 and the framework document between Kew and Defra. The lease itself would be prepared for and on behalf of the Secretary of State using specialist property lawyers and specialist commercial advice.

There will be numerous bespoke conditions in the lease agreement itself that shall offer the appropriate and relevant protection to Kew under this amendment. As I shall detail, these would deal with the unique nature of the land at Kew and, in particular, the listed buildings on Kew Green and, in doing so, provide complete protection for the Secretary of State and Kew.

As well as conditions bespoke to Kew, which I shall turn to in a moment, the usual lease conditions would apply. The usual leaseholder covenants include obligations not to do anything that contravenes planning; to comply with any estate regulations that may be drawn up; not to make any alterations to any part of the internal or external structure of premises without freeholder consent; to submit plans to the freeholder if consent for alteration is required; not to sublet or transfer premises without freeholder consent; not to interfere with or obstruct the performance of a freeholder in carrying out its duties; not to use the property for anything other than the use specified in the lease; not to access the property other than as specified in the lease; and not to cause a nuisance from the property. In addition, I assure your Lordships that all Kew leases will expressly include a leaseholder obligation not to do, or allow to be done, anything that will bring into disrepute the Royal Botanic Gardens, Kew, including its status as a world heritage site or the listed building status of any house, for example.

Some of the houses will contain features typical of buildings of this age, such as plasterwork ceilings and cornicing. Given their listed building status, features such as these may not be altered, so any lease would provide that such features must be preserved and may not be damaged in any way. As the noble Baroness, Lady Bakewell, said, the local planning authority, advised by Historic England, is responsible for deciding whether a proposed development, or even internal renovation, should be allowed to go ahead.

I hope I can also reassure your Lordships that the Secretary of State would absolutely not grant a lease without the recommendation of the Kew trustees. The Secretary of State would take advice from specialist property lawyers as to the appropriate level of protection given Kew’s listed building status and the world heritage site. Therefore, I believe that robust procedures are already in place to ensure that the correct approvals are made. I am as concerned as anyone that none of these buildings be refurbished insensitively, but the terms of any standard lease, bolstered by special conditions for Kew and alongside the governance that the local planning authorities, Kew trustees and the Secretary of State provide, ensure that the points in the noble Baroness’s amendment are already covered.

Turning to Amendment 7, I am again grateful to the noble Baroness for the opportunity to clarify the criteria that would apply. Instead of taking three months, I hope I am able to put on record now these points. I re-emphasise that Kew’s current proposals extend to only seven properties, two of which are unoccupied and none of which is part of the core estate. These leases are being pursued to free up vital revenue for Kew, and will do so with no impact on Kew’s core functions. I am pleased to reassure your Lordships that these criteria derive from the various protections already in place, which I have strongly emphasised. It is, however, absolutely right that the noble Baroness, Lady Jones of Whitchurch, referred to respecting the property, because that is exactly what we must do.

To preserve the protection of the property and Kew’s functions, obligations on the leaseholders would include the following requirements, which I will place on record in the context of Amendments 7 and 8: to repair and keep the property in good condition and decoration; to allow Defra or Kew to access the property to carry out any necessary works; to make good any damage caused by the leaseholder to the property or to the Kew estate; not to do, or allow to be done, anything that will bring RBG Kew into disrepute, including its status as a world heritage site; to comply with the provisions of any statute, statutory instrument, order, rule or regulation, and of any order, direction or requirement made or given by any planning authority or the appropriate Minister or court; not to alter any of the property internally or externally without the express written consent of Kew’s board of trustees and the Secretary of State; not to sublet any of the property without the Secretary of State’s consent; not to assign, transfer or sell their interest in the property without the Secretary of State’s consent; not to interfere with or obstruct the performance of the duties of the Secretary of State, or Kew by way of servant; not to use the property for anything other than the use specified in the lease; not to access the property other than as specified in the lease; not to leave the property unoccupied for a certain period of time; and, finally, not to cause a nuisance from the property. I want to be very clear that there has been proper consideration of this in reference to, as my noble friend Lord Hodgson said, the status and condition of the property.

The noble Baroness was right to raise also the issue of forfeiture. The right to forfeiture occurs when the leaseholder under a lease breaches an obligation contained within a lease. What these obligations may be are a routine part of lease agreements, and so are the conditions for termination of the lease—I have already placed these on the record—as to obligations that will ultimately result in forfeiture if breached under a Kew lease. As I said, the lease agreement itself will be drawn up by specialist property lawyers acting on behalf of the Secretary of State to reflect the various considerations and protections that need to apply in respect of the property itself, the world heritage site and Kew’s functions and activities. I should stress that lease agreements will need to be, and shall be, drawn up and agreed on a case-by-case basis by specialist property lawyers, even though they will have most conditions in common.

Forfeiture of a business lease and forfeiture of a residential property are not the same. This Bill does not seek to disapply any protection a leaseholder may have from unlawful eviction. The forfeiture clause in a lease cannot be one size fits all, since the court looks very seriously at any possession claim, and it is a complicated area of law. This does not, however, negate the fact that breach of leaseholder covenants under leases created by this Bill—such as an obligation to keep in good repair—can and will, if appropriate and if sanctioned by the courts following sufficiently serious breaches, result in the Secretary of State taking back possession of the property.