Crown Estate Bill [HL]

Lord Young of Cookham Excerpts

Committee stage
Monday 14th October 2024 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, Amendment 13 in my name is a follow-up to an issue I raised at Second Reading, where I spoke about a case where the Crown Estates were not honouring an undertaking that they gave to your Lordships’ House earlier this year: that they would adhere to the terms of the various Leasehold Reform Acts on the statute book. By appointing a commissioner, as my noble friend has just mentioned, with the specific responsibility of ensuring that such undertakings are honoured, we could reduce the risk of this happening.

To recap, briefly, Parliament has given certain rights to leaseholders. Included in those rights is the right to buy out the freehold or to extend the lease on specified terms. The Crown is, as a general rule, exempt from legislation but it agrees to abide by its terms. The relevant undertaking to so abide was given by me in 1983, when I took what is now the Leasehold Reform, Housing and Urban Development Act through the other place. The undertaking was repeated by my noble friend Lady Anelay, then the Government Chief Whip, on 24 May this year as the then Leasehold Reform Bill got its Third Reading; it can be found in Hansard for that day and says that

“The Crown … agrees to the enfranchisement or extension of … leases”—[Official Report, 24/5/24; col. 1368.]


as set out in the various Acts.

How does the Crown acquire new freeholds? When a freeholder disappears or goes bankrupt, the Crown Estate takes possession under a process known as escheat. At that point, leaseholders appear to lose the rights that Parliament has given them. In the case that I cited, leaseholders applied to buy the freehold but were told by agents acting for the Crown Estate that it was not obliged to dispose of the freehold under the relevant formula in the legislation, but offered to sell it at a far higher price—over four times as high.

Solicitors acting for the Crown Estate conceded that, until this issue is resolved:

“Where a block of flats is subject to escheat lessees will generally be unable to sell”,


and that is indeed the case. We have a stalemate, as described at Second Reading, with longer-terms risks to the fabric of a building. I referred then to the framework document, which sets out the terms of agreement between the Treasury and the Crown Estate, in particular the sentence which says the Treasury shall

“inform The Crown Estate of relevant government policy in a timely manner”.

I suggested that the Minister told the Crown Estate that policy on enfranchisement has been clear for many years and that the Crown Estate should respect it.

--- Later in debate ---

I hope that I have been able to provide the appropriate reassurances to noble Lords—

[Lord Young of Cookham (Con)]

Before the Minister sits down, I am grateful for what he said. Can he confirm that he has not ruled out amending the draft memorandum of understanding in the way that I proposed?

[Lord Livermore (Lab)]

I would like to be helpful to the noble Lord. I am told that the memorandum of understanding deals exclusively with borrowing powers, so it may not be the most appropriate vehicle to insert that into.