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Lords Chamber

Volume 837: debated on Monday 22 April 2024

House of Lords

Monday 22 April 2024

Prayers—read by the Lord Bishop of Derby.

Deaths of Members

Announcement

My Lords, I regret to inform the House of the deaths of the noble Baroness, Lady Gardner of Parkes, on Sunday 14 April and the noble Baroness, Lady Massey of Darwen, on Saturday 20 April. On behalf of the House, I extend our condolences to the noble Baronesses’ families and friends.

Medical Student Places

Question

Asked by

To ask His Majesty’s Government what progress has been made on plans to increase the number of medical student places in England.

My Lords, we are on track to meet the NHS Long Term Workforce Plan and aim to double the number of medical school places in England from 7,500 to 15,000 places a year by 2031-32. We have allocated 205 additional medical school places and provisionally allocated 350 more for the 2024-25 and 2025-26 academic years respectively. In 2020, the Government completed an expansion in the number of medical school places in England from 7,500 per year, a 25% increase.

My Lords, may I start by saying on behalf of these Benches that we wish to express our deep condolences on the sad passing of Baroness Gardner of Parkes and our colleague Baroness Massey? May their memories be for a blessing.

Ministers recently advised the Office for Students that only 350 additional places for trainee doctors would be funded in 2025-26. On the basis that, at this rate, it will take over 21 years to meet the Government’s promise to double the number of medical training places, what assessment has been made of the effect this will have on medical schools, which had in fact been told to plan for considerably greater numbers? Where does this leave the Government’s promise to double medical places by 2031?

My Lords, I would like to follow the noble Baroness’s tribute to Baroness Gardner of Parkes and Baroness Massey. I also pay tribute to the late Doug Hoyle, an outstanding north-west MP and an outstanding public servant.

We remain committed to the long-term workforce plan’s target to double the number of medical school places by 2031 and are in fact ahead of schedule. The planned expansion is not uniform in each year; it increases substantially in later years. The timeline allows for new and existing medical schools to build the physical and teaching capacity needed, and to develop curricula and receive General Medical Council approvals where needed.

My Lords, may I add my condolences to those who have spoken on the loss of Baroness Massey and, in particular, Baroness Gardner, who shared an office with us in this building? She will be greatly missed. Long may their memories live, and may they rest in peace.

I declare my interest with the Dispensing Doctors’ Association. While the increased number of places at medical schools is welcome, does this take account of the large number of people who are expected to retire in the next five to 10 years—especially GPs—and are currently only in their 50s?

I thank my noble friend for that question. She is right to point out that certain GPs in their 50s retire, but the Government are committed to increasing the number of GPs. As I indicated in my Answer, there is a substantial number of younger new GPs in the pipeline.

My Lords, I associate these Benches with the condolences to the families of the noble Baronesses, Lady Gardner and Lady Massey. The Government, in their response to a Guardian article that queried the student numbers, said that numbers will be increasing “exponentially until 2031”. Exponentially is an impressive adverb that is sometimes used to mean something that is fast and getting faster. It also has a more precise meaning, and there is a formula. Will the Minister share the formula being used between now and 2031, so that we can see how many places will be allocated each year?

I thank the noble Lord for that question. I do not have a formula in my briefing pack, but I will ask that question and refer the answer back to the noble Lord. I would also point out not to believe everything that you read in the Guardian.

Is my noble friend aware that, out of every three sixth formers who wish to become a doctor, only one will find a medical school place? Is that not a tragic loss, at a time when we are really short of doctors? At the other end of the spectrum, we also know that the number of doctors who work in the NHS once qualified is going down. Against that background, surely, we should have another look at our forecasts and the provision we make for more medical school places.

In my initial Answer, I pointed out that the Government are increasing the number of medical school places, but he raises an important point. If he has any specific cases of students not getting a place and lets me know about them, I will look into them.

My Lords, the Minister is not responsible for the crisis we are facing in the health service, but we have had 13 years of cuts in training for doctors. Does he not accept that it was a major mistake not to recruit more doctors and make available more places in universities to train the number of doctors we need?

The noble Lord raises an important point about the number of doctors, but I fear I am repeating myself. The Government have laid out in their long-term NHS workforce plan that we will have a significant increase in the number of doctors—from 7,500 each year, in five new medical schools. So that may have been the case in the past, but it will not be in the future through to 2030-31.

My Lords, the training of doctors requires expansion of resources in pre-clinical years and particularly clinical years. It also requires expansion of foundation year one and the useless foundation year two, which are clinical years in which they train in hospitals and GP practices. What are the Government doing to finance both the clinical years and the foundations years?

One of the reasons why we cannot accelerate the training of doctors in GP practices, for example, is capacity. That is why the Government have funded five new training hospitals. The noble Lord is absolutely right, but it is about capacity and that is why we are ramping it up, and it will increase in time as outlined in my initial Answer.

We need to keep the doctors we already have, not just the ones we are training for the future. Does the Minister know how many doctors are leaving the country and going to places such as Australia?

Every year, approximately 4% of all doctors registered with the General Medical Council—roughly 300,000 doctors on the register—relinquish their licence to practise. The vast majority go on to work in the NHS after completing their foundation programme training. GMC analysis shows that 93% of doctors enter speciality or GP training and are working as a doctor in the UK within three years of completing the foundation programme. The noble Baroness refers to Australia specifically. It is my understanding that for a newly qualified doctor who has spent several years working hard to qualify, it is quite an attractive place to practise as a doctor, but they do come back to the United Kingdom.

My Lords, last year it was reported that 25% of doctors drop out after two years’ foundation training. After five years, the drop-out rate in total is 40%. So increasing the number of students is not the answer, or any part of it. Is not the crucial thing to ensure that young doctors are encouraged to remain in training? That may mean more care in selecting them in the first place, but it also means making it better for them while they are training.

Student drop-out is not unique to the medical sector. My noble friend is absolutely right: it is very important that, before students decide to take on a lengthy medical course, they decide whether it is right for them.

My Lords, despite the myriad problems faced by the Betsi Cadwaladr health department in north-west Wales, perhaps my noble friend would join me in congratulating Bangor University on opening a new medical school. The first cohort of students will start in September this year.

My noble friend is an advocate for everything Wales. Of course, I will do exactly that: congratulations all round.

My Lords, we have heard about trained medical staff going to work overseas. We are also very familiar, of course, with the other end of the discussion. Many trained medical staff come from overseas to work in our country, to the great benefit of the health service. Surely, the answer to both those challenges has to be for us to train and retain medical staff in this country, neither exporting them somewhere else nor being entirely dependent on imports from somewhere else.

I agree with the noble Lord. That is why the long-term workforce plan commits to improving retention by improving the culture and leadership to ensure that up to 130,000 fewer staff will leave the NHS over the next 15 years. But the noble Lord is absolutely right: doctors from overseas, trained in third-world countries and elsewhere, come to our country and, as the noble Baroness said earlier, also go to attractive places such as Australia. As I say, young people like to experiment with other countries but do come back. It is also a testament to the NHS that so many foreign-trained doctors decide to practise here.

Fur: Import and Sale

Question

Asked by

My Lords, I declare my interest as set out in the register. Fur farming is banned in the UK, and there are already import restrictions, which means that some skin and fur products may not be legally imported. In Our Action Plan for Animal Welfare, Defra committed to explore further potential action in relation to the import of fur from abroad, but we have continued to build our evidence base, including commissioning a report from our Animal Welfare Committee.

The action plan to which the Minister refers was produced in June 2021, nearly three years ago. Knowing that we are a nation of animal lovers and that the number of animals killed for fur is estimated worldwide at 130 million, most of them kept in appalling conditions and suffering mental and physical distress, why on earth cannot the Government bring a popular Bill, for a change, to this House, so that it can vote for something happily—instead of the Rwanda Bill, for example?

My Lords, there is a good news story on this, because the volume of fur that is imported and exported has fallen by 50% in the past five years. In the action plan for animal welfare, Defra committed to explore potential action in relation to the import of fur from abroad. The call for evidence that Defra published in 2021 was a key step in delivering that commitment. A summary of the replies received should be published in due course; in the meantime, we are continuing to build our evidence base on the fur sector, which will be used to inform any future action on the fur trade. We have also commissioned a report from our expert Animal Welfare Committee, which I mentioned earlier, on what constitutes responsible sourcing in the fur industry. This report will support our understanding of the fur industry and help to inform our next steps.

My Lords, the import of fur is unnecessary. The killing of Canadian bears for their pelts is still used to make bearskin headgear for the Grenadier Guards at Buckingham Palace. These come at a minimum cost of £650 each. The MoD orders between 50 and 100 bearskins each year. In 2020, the MoD stated that the quality of alternative material did not match natural fur. Surely, the Minister would agree that it is time for this unnecessary practice to be discontinued without delay.

My Lords, the wearing of bearskins by the Guards division is a matter for the Ministry of Defence. We are continuing to build our evidence base on the fur sector, which will be used to inform the future of the fur trade, and we will continue to share this evidence with other government departments, including the Ministry of Defence.

My Lords, what has happened to joined-up government? Is not this a matter for environmental and welfare considerations, and are they and the Ministry of Defence to be completely separated? I would suggest not. On the wider question, I am delighted by the progress that is being made, but could my noble friend speed it up a bit? I want to be alive when something really happens.

My noble friend is in very robust form, and I can see will be for many years ahead. I commit to providing a response to the consultation and the wider other brief as soon as I can.

My Lords, surely the Minister would agree that, in light of the new legislation that is coming in on the banning of the import of shark-fins and the progress of the Government-backed Private Member’s Bill on banning cruel puppy imports, the trade measures, such as a total ban on the import of fur and foie gras, which also safeguard animal welfare standards, should have equal priority. That is clearly not the case at the moment.

The Government made it clear in their manifesto commitment that in all our trade negotiations we will not compromise on our high environmental protection, animal welfare and food standards. The UK is rightly proud of the animal welfare standards that underpin our high-quality produce. Imports into the UK must comply with our existing import requirements, such as meeting the United Kingdom’s slaughter standards.

My Lords, what assessment has my noble friend the Minister made of the UK’s role in the global fur trade and of the volume of the import and export trade in animal fur and fur products over the past five years?

I thank my noble friend for her question. Between 2017 and 2019, the UK imported around £61 million-worth of fur or fur-based products and we exported around £35 million of fur and fur-based goods. The majority of these were for apparel and clothing. In the period since then—the latest report was in 2023—the volume and the numbers have exactly halved.

My Lords, the RSPCA has stated that one-quarter of children aged 10 to 18 have witnessed animal abuse videos online. What action are the Government taking to tackle the increase in this content? What education are we providing to children on the importance of animal welfare?

I thank my noble friend. I was not aware of those statistics from the RSPCA, but they sound very concerning and it is a matter that the Government will be taking very seriously. As for the content, I will refer my noble friend to the Home Office, because it sounds highly inappropriate for children to be watching that. I will take the issue of education back to my department.

My Lords, last week in the Grand Committee, the noble Lord and I were agreeing about the importance of biosecurity and the threat presented to human and animal health—indeed, One Health. During Covid 19, we saw huge numbers slaughtered on mink farms because of the risk of transmission. Does the Minister agree that the fur farms that keep animals in such dreadful conditions as my noble friend referred to present a threat to the security of all of us, in terms of the transmission of zoonoses? If we were to ban the imports, we would actually be making the world safer for all of us by helping to discourage those farms from continuing and presenting the biosecurity threat that they do.

The noble Baroness raises a very good point. We have been in discussions with our colleagues in Europe about these issues over the period. I can assure the House that there is no current risk, or the risk is assessed as extremely low, in terms of any transfer of diseases across from Europe. I know that where they do get outbreaks, they go to a policy of cull straightaway.

My Lords, a year ago the Government staged a U-turn on the promise to ban fur imports. We do not know the reason for that, but we do know that, as we have heard mentioned, in April 2021 there was a call for evidence and the Government received 30,000 replies. Since then, we have heard nothing, so will the Minister say when that evidence, the 30,000 responses to the call for evidence, will be released?

The noble Baroness is absolutely right about the numbers there. As I said earlier, I do not have an exact date for that response, but I am pressing for it to come out as soon as possible.

My Lords, what are the arguments for not banning fur products coming into the country? It does not seem to me that there is any important reason why we should not ban them. I think the vast majority of the public would support that move. What arguments are the Government putting forward for not banning them?

I thank the noble Lord for his question. I am not in a position to go into that level of detail right now, so I will write to him.

Can my noble friend the Minister tell us whether his department has done any analysis of the source of fur from animals? What I mean by that is when animals are killed for fur, what percentage are killed specifically for fur; what percentage are killed for something else, such as meat, and the fur is a by-product; and what percentage are killed to control an animal population?

My Lords, I asked this specific Question three years ago. I have not had an answer in those three years and I do not like the Answer today. Is it any wonder that I get so annoyed with this Government? Please, bring us back a proper answer on this.

I am distressed that we are causing the noble Baroness so much discomfort—that is certainly not the intention of the Government nor, indeed, my department at Defra. As I stated, I do take a personal interest in this; I have attended a number of meetings on it over the last month or so and I am endeavouring to get a response shortly, which I hope will satisfy the noble Baroness.

International Mother Earth Day

Question

Asked by

To ask His Majesty’s Government what plans they have to mark International Mother Earth Day, and to fulfil the United Kingdom’s commitments set out in their White Paper on International Development, published in November 2023 (CP 975).

My Lords, the UK has previously attended UN events to mark International Mother Earth Day, recognising that development, nature and climate are interconnected. We are progressing our White Paper commitments, helping to end extreme poverty and address climate change and biodiversity loss. The UK ensured that nature remained central to the international agenda at COP 28, announcing £576 million to halt forest loss and protect nature. Our £11.6 billion international climate finance commitment includes £3 billion to protect, restore and sustainably manage nature.

My Lords, on International Mother Earth Day, which falls today, I welcome the Government’s White Paper commitment to protect forests, land and natural resources. Can my noble friend please give a couple of significant practical examples of where the Government will assist those countries in sub-Saharan Africa that are facing substantial desertification and illegal practices on mineral extraction?

Protecting natural resources in sub-Saharan Africa continues to be a focus for the United Kingdom. Our support includes the Investments in Forest and Sustainable Land Use program. This is mobilising private investment into forest protection, restoration and sustainable land use. Its highly successful first phase, which ran from 2017 to 2024, operated in eastern, west and central Africa. Our Biodiverse Landscapes Fund aims to reduce poverty and protect and restore biodiversity in environmentally critical landscapes, including the Kavango-Zambezi Transfrontier Conservation Area and areas in Madagascar and the western Congo Basin. There are many other examples but those are two, to answer my noble friend’s point.

My Lords, given the importance of deforestation as far as climate is concerned, can the Minister celebrate Earth Day by publishing this week the Schedule 17 forest risk due diligence regulations? He assured the House before Easter that they would be published shortly, so why not this week?

This forest risk commodities regulation is a good news story and the UK has been pushing for it. The publication of the statutory instrument is imminent and the House will be able to debate it. The UK will be one of the countries at the forefront of introducing sensible, well consulted regulations that will protect forests by making sure that supply chains are rigorously enforced.

My Lords, given the decision last week in Scotland, where I live, for Green Party Ministers to ditch their target on climate change, and the concerns raised by the head of the Climate Change Committee that the UK is less ambitious on climate than it had been, does the Minister agree that emerging economies need the UK to be reliable and dependable in planning for climate alleviation policies? It is why I asked the Minister in a debate in January whether the climate finance that he announced and referred to was new money. Subsequently, independent analysis has suggested £2 billion pounds of that has been recycled. What is the point of making announcements when they are reneged on, or indeed when the funding given is recycled?

I am sorry but I cannot take that. The £11.6 billion, one of the largest commitments by a country, is absolutely solid. If the noble Lord wants me to be completely frank, I suspect that our spending on climate finances is probably nearer to £15 billion or £16 billion if I take into account other things that other countries calculate as international climate finance. The noble Lord really cannot say that we are somehow reneging on this. The Prime Minister and the Government are absolutely committed to this, and we should be proud that we are a country that has halved our greenhouse gas emissions and that we are the fastest reducer of greenhouse gas emissions of any country in the G7.

My Lords, the noble Baroness mentioned the extractive industries. The UN 2021 report recognised that extractive industries have the potential to drive growth and reduce poverty in developing countries, yet it also recognised that most of those developing countries are locked into patterns of primary product exportation specialisation. That constitutes a barrier to long-term economic growth. One of the UN’s calls for action was to systematically include civil society and vulnerable groups affected by the green transition—including women and indigenous populations—in the design, implementation and monitoring of all extractive operations. What are this Government doing to ensure that this call for action applies, and that we involve those people who are most directly affected?

I entirely agree with the noble Lord. At recent COPs, particularly the CBD in Montreal 14 months ago, we spent a lot of time talking to representatives of local communities and indigenous peoples, to make sure that we are making this relevant to them. If the noble Lord wants one example, I will mention digital sequence information, which is potentially a £100 billion a year new nature fund, where the money will go direct to local communities and indigenous people. It is an example of the priority we are making them, to make sure that they are part of the conversation.

My Lords, I declare my interests as set out in the register. The scale of the cost of servicing debt for emerging economies was highlighted at the World Economic Forum last week. Are His Majesty’s Government open to pursuing debt swaps as a way of allowing climate-vulnerable countries to implement the very necessary adaptation to combat the damaging effects of climate change that are all too obvious?

The noble Baroness is absolutely right that debt holds back countries in a completely unfair way, particularly those which are most vulnerable, and we are committed to improving the international debt system. We are pushing for improvements to the G20 common framework, and we use our position in official creditor committees to help to return countries to debt sustainability. One example I would give her is that we in the UK pioneered the climate resilient debt clauses, which pause debt repayments when a developing country is hit by a disaster. I am delighted that France and three other countries have followed suit, and that this is now becoming an established form of debt alleviation.

My Lords, in the White Paper we are talking about, there is a short but quite good section on working with the Commonwealth. Given that security goes with development—there is no development, let alone green development, without reasonable security and political stability—would the Minister remind the authors of this aspect, particularly as the Chinese are now actively undermining the security of numerous Commonwealth countries? The Solomon Islands is a good example of the latest one, but there are many others. Should we not have this aspect of the whole development question rather higher in the agenda than we seem to have it now?

My noble friend raises a really important issue in the run up to CHOGM, where we want to show that we are using the Commonwealth in an effective way, in supporting small island developing states in particular to manage the adaptation to climate change. It is being held in Samoa, so his point is absolutely right. On Friday of last week, I was in Cyprus at the Commonwealth Ocean Ministers Meeting. You cannot sit and listen to the representative from Tuvalu without understanding the importance of this to them. It is an existential threat, and the work we are doing on SIDS this year in the run up to CHOGM, and in the future, shows that it is an absolute priority, and the Commonwealth is an excellent way of supporting so many of them.

The Minister recognises the importance of indigenous land management for environmental benefit. Can he comment on why upland farmers in the UK are so mistreated by the SFI as it is currently set out?

That is quite a leap from the Pacific but I will try to answer the noble Earl. He should look at the amendments that have been made to the SFI recently, which have been broadly welcomed by upland farmers. Where there was an actual or perceived discrepancy between lowland and upland farming, that has been addressed. It is vital that we maintain a vibrant upland farming community, which is absolutely the Government’s intention. Our grant schemes—the sustainable farming incentive, Countryside Stewardship and the farming in protected landscapes fund—show that these are people who matter to us, our landscape and the future of farming in this country.

Paying Polluters: UN Report

Question

Asked by

To ask His Majesty’s Government what assessment they have made of the United Nations Special Rapporteur report on Paying polluters: the catastrophic consequences of investor-State dispute settlement for climate and environment action and human rights, published on 13 July 2023.

My Lords, investor-state dispute settlement mechanisms offer investors an independent means of legal redress to seek compensation following a breach of international investment agreements. The report notes that, outside the UK, investors have brought ISDS claims against climate change measures; however, the UK has not faced a successful ISDS claim. On 22 February we announced withdrawal from the energy charter treaty, to avoid remaining in a treaty not aligned with our energy security and net-zero ambitions.

My Lords, on 7 December we had a debate on a Motion moved by the noble Baroness, Lady Hooper, on Latin America. In the context of our trade deal with Colombia, my friend, the noble Baroness, Lady Coussins, raised the issue of the inherent manifold injustices of the ISDS. The Minister responding to the debate, the noble Lord, Lord Ahmad, wrote in response:

“ISDS is an effective means of resolving … disputes”,

and the Government are

“content with the standard of protection”

provided. So it is surprising that none of the free trade deals concluded since Brexit contains an ISDS—and the absence of one is an explicit goal of our negotiations for a UK-Canada deal. What is the Government’s view of an ISDS as a means of resolving disputes? If they have shifted their view, what are they doing to ensure that their new approach is reflected in trade with Colombia?

This is a complicated area. Of course, these treaties are bilateral, and they also help to protect the investments of UK companies investing in other overseas territories. However, the UK’s investment policy is designed to protect the UK’s right to regulate in the public interest, and so far we have been successful in that, in that we have not seen any successful claims against us.

My Lords, the UN Working Group on Business and Human Rights has said that the ISDS mechanism incentivises investor irresponsibility. Currently there is a case of a UK-listed company using the ISDS in Colombia in a way that undermines the fundamental interests and rights of the Wayuu indigenous people. As penholder at the UN for the Colombia peace process, what are His Majesty’s Government doing to discourage such activity?

I thank the noble Baroness for her question. I cannot comment on cases that are currently ongoing, but we will certainly bear her comments in mind when we consider our policy on this matter.

My Lords, with fossil fuel and mining industries already having won more than $100 billion in awards and at least 175 treaty-based ISDS cases closed or pending that are directly related to environmental measures, does the Minister agree that foreign investors are using the dispute settlement process to seek exorbitant compensation from states that seek to strengthen their environmental protection? What actions are the Government taking with partners and allies on the international stage to try to find solutions to these problems?

As the noble Earl is probably aware, there are discussions in the OECD at the moment about the use of these clauses. As I said, we are responsible for the ones that we have signed, recognised and arbitrated against, and we very carefully ensure that these clauses protect our right to regulate in these circumstances on energy and climate change matters. The success of that has meant that we have seen no successful claims against the UK.

My Lords, while we will of course hear a lot about the importance of investor confidence, it is as important to ensure that Governments, particularly of less affluent and more vulnerable nations, are able to fulfil their climate commitments. It is estimated that those Governments fulfilling their commitments under the Paris Agreement might be liable to pay up to $340 billion in future cases under this system. Can the Minister tell us the Government’s assessment of what the impact of this system will be on limiting the increase in global temperatures to 1.5 degrees centigrade above pre-industrial levels?

The noble Baroness is using the generality to refer to the specific. ISDS clauses are very useful in a whole range of different areas. I accept her point that there is some evidence of their misuse in the case of energy and climate change policies, and we will work with international partners to see how this can be mitigated. We are very careful to make sure that the ones to which we agree preserve our right to regulate. Other countries take their own decisions, of course.

My Lords, many developing countries are handicapped by clauses in foreign direct investment agreements—sometimes called stabilisation clauses—that forbid the hearing of disputes in local courts. As a result, local courts’ lawyers are unable to develop the expertise or necessary institutional structure to combat corporate power. What steps are the Government taking to ban the inclusion of such clauses in FDI agreements, at least for UK companies?

All such agreements are different. Many rely on international arbitration panels that are appointed by the complainant company and the defendant company with an independent chairman. We are very careful in how we regulate these matters and which clauses we agree to. As I said earlier, we will work with other countries to look at their particular disputes as well.

Is the Minister aware that one of the concerns around ISDS is that it is a secret process, as opposed to a multilateral judicial process that is more transparent? Given the fact that ISDS can be used against small emerging economies and deliberately facilitated by legal funds based in the UK, what discussions have the Government had with our legal community to ensure that ISDS is not just about protecting UK interests and that the legal community in the UK is not using it strategically against emerging economies that do not have the capacity and secret processes to defend themselves?

As I said, ISDS clauses work both ways. They also seek to protect the interests of UK companies investing in other overseas economies. Any state that wishes to regulate against the interest has to prove that it is being transparent and fair, not discriminating against foreign investors, et cetera. All these criteria are used to make judgments about whether cases will proceed.

We discussed ISDS arrangements in the context of the CPTPP Bill recently, and a number of noble Members expressed concern about the impact on environmental standards. The response from the Government Front Bench was, “Not to worry; it won’t be used in this way”. That is clearly not the case with Colombia. It has faced at least 21 cases under the ISDS process, mainly for mining companies and mainly questioning the effect on the country’s environmental standards. Given the pressure that Colombia is under in its transition to full democracy and peace, would the money that it inevitably has to spend on defending these cases, and in some instances paying damages, be better spent on maintaining the peace process?

I am sure it would, but we are responsible for what clauses we agree to in the UK. We always protect our right to regulate, and we seek not to take actions that are arbitrary or discriminatory against foreign companies. Ultimately, it is a question of what clauses Colombia agrees to, what criteria it uses and how it will be arbitrated, so it is a difficult question to answer.

My noble friend will be aware that when we were both in the European Parliament we used to debate the issue of ISDS, and that one of the reasons that ISDS was asked for by investors was to ensure they had confidence, particularly when there was no confidence in the local legal system. The other side of that is that big companies were perceived to get preferential treatment in being able to go to the ISDS process, rather than through the legal system. We have to look at the trade-offs, and maybe one of the things that my noble friend’s department could look at is the impact of not including ISDS agreements and how much that would affect outward or inward investment in these countries.

My noble friend makes a powerful point; of course, it works both ways. We want to protect the interests of UK companies, which sometimes operate in very hostile, non-democratic countries with unclear or murky legal systems. By the same token, we need billions of pounds of investment into the UK—we are the top European destination for inward investment—to help us in our energy and climate change transition, so it is important as well that we demonstrate that we are liberal and open to companies investing here in the UK. These clauses help to deliver that, but they need to be structured in the right manner, transparent and liberal.

Arrangement of Business

Announcement

My Lords, it may be helpful for me to explain to the House how we expect business to run today. As noble Lords will know, we are expecting a further message from the Commons on the safety of Rwanda Bill this afternoon. We will interrupt business before the House to consider that message.

Before setting out the process for today, I acknowledge the frustration that noble Lords have felt—I have been at the brunt of that as well—that there was less-than-adequate notice of this and that it is scheduled to take place on the first day of Passover. I can assure noble Lords that this was very carefully considered, and as the Government Chief Whip, I take my duties to this House as a whole, and to the usual channels in particular, extremely seriously. I can also assure the House that it remains my intention to facilitate government business collaboratively, with the agreement of the usual channels.

With regard to how business will run today, ultimately we were also at the mercy of scheduling in the other House. The plan remains to start Committee on the leasehold Bill after Oral Questions, and we will then pause proceedings on that Bill once we are ready to commence consideration of the Commons message on Rwanda. Once the message has been received, we will place a message on the annunciator signalling the beginning of a 30-minute window to table amendments on Motions. Once that closes, we will start debate on that Bill as soon as all the relevant paperwork is ready. The usual channels have agreed that this will not be before 6 pm, and my best guess is that it will be around 7 pm, but that depends on many factors and it could be earlier or later. If we are ready to start proceedings on Rwanda before 7.30 pm, we will consider the Commons message before debate on the QSD in the name of the noble Lord, Lord Farmer. If it is not ready until later, we will take the QSD before considering the Rwanda Bill. If there is time, we will resume Committee on the leasehold Bill until the usual rising time of about 10 pm. If further rounds of ping-pong are required on the Rwanda Bill, we will sit to take them this evening, and those could well take place after 10 pm.

I thank all noble Lords in advance for their patience. We will ensure that we place details of the first round and any subsequent rounds that are needed on the annunciator as soon as possible. The Government Whips’ Office would be happy to assist further with any questions. I also thank the administration and particularly the catering staff, who have already made swift provision for services beyond 10 pm should noble Lords and staff need them.

Pet Abduction Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Building Societies Act 1986 (Amendment) Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Zoological Society of London (Leases) Bill

First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Litigation Funding Agreements (Enforceability) Bill [HL]

Order of Commitment

Moved by

That the order of commitment of 15 April be discharged and the bill be committed to a Grand Committee; and that the instruction to the Committee of the Whole House of 15 April shall also be an instruction to the Grand Committee.

Motion agreed.

Official Controls (Fees and Charges) (Amendment) Regulations 2024

Plant Health (Fees) (England) and Official Controls (Frequency of Checks) (Amendment) Regulations 2024

Veterinary Medicines (Amendment etc.) Regulations 2024

Motions to Approve

Moved by

That the draft Regulations laid before the House on 26 February and 4 March be approved.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the first two instruments). Considered in Grand Committee on 18 April.

Motions agreed.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Order of Commitment

Moved by

My Lords, I understand that no amendments have been set down to the Bill and that no noble Lords have indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

Leasehold and Freehold Reform Bill

Committee (1st Day)

Welsh Legislative Consent sought

Clauses 1 to 6 agreed.

Clause 7: Permitted leases

Debate on whether Clause 7 should stand part of the Bill.

My Lords, I am pleased to start Committee stage of this long-awaited Bill. I understand that it is not correct protocol to reiterate Second Reading speeches in Committee, so I shall not do that, but I believe that there are some long-standing unanswered questions relating to the Bill. Though we will probe some of them through our amendments, it is disappointing and unhelpful to reach this stage without some of those issues being clarified. If the Minister can comment, either in her early responses in Committee, or as the Bill proceeds, it would be helpful.

I hope we do not have to reach Report before we know, for example, the outcome of the consultation on ground rent; whether the Government have given up on their proposals to scrap leasehold as a tenure for flats; how the Government propose to help freehold homeowners who find themselves trapped in what have become known as fleecehold charges for estate management, an issue raised powerfully by the Law Commission again in its recent briefing; whether the Government intend to use the Bill to put right some of the building safety issues around qualifying and non-qualifying leases, including those relating to buildings under 11 metres in height, which undoubtedly would have been better addressed by the Building Safety Act but were excluded; and why proposals for a regulator of property agents—supported across this House, and discussed again just last week—continue to be resisted. We would be grateful for clarification from the Minister on the commencement date of the provisions in the Bill, as she has indicated in a written response to my noble friend Lord Kennedy that it will not be until 2026.

It is worth opening this group by talking about the news reports over the weekend. We learned from the Times that the costly regime of ground rent will continue for a further 20 years. Although those ground rents may be capped at £250, we have not had any official announcement on that yet.

The amendments in this group relate directly to the ban that was introduced on Report in the Commons; it was added in late so it was not able to be properly scrutinised there. So our main question is: when exactly will the Government do what was reported over the weekend? Will they amend the Bill at an even later stage, with even less opportunity to scrutinise?

Our main purpose in tabling the amendments is that the Government’s purported ban on new leasehold houses does not actually ban the sale of all new leasehold houses. Our main specific objections are to Schedule 1, which we will cover in subsequent amendments. What assessment have the Government carried out of the scale and numbers of community housing leases, retirement housing leases and National Trust leases which would be covered by the exemptions listed in Schedule 1? It seems that such a measure would be unlikely to enact the proposed ban on leasehold because Schedule 1 would allow new long residential leases of houses in instances where the superior lease has been granted before 2017. Have the Government carried out any scoping on this? We have no idea of the numbers of undeveloped plots of land or properties which may be subject to superior leases or which could be granted under such terms.

If a developer had purchased a pre-2017 head lease on a site but not built it out—we know that that has been done in this market both for financial purposes and to give developers protection from some consumer protections—and this is not fully understood and quantified, the exemptions could be in danger of virtually nullifying the ban on leasehold houses. We understand the significance of the date relating to the announcement of the policy and the need, for example, for National Trust leases to be exempt, but a considerable amount of clarification is needed.

Our stand part notice probes permitted leases by removing Clause 7, and Amendments 2 to 4 focus on the following exemptions respectively by removing the relevant lines from Part 1 of Schedule 1. Amendment 1 concerns leases granted out of historic leasehold estates; paragraph 1 of Schedule 1 details that a lease granted out of a historic leasehold estate is a lease granted on a leasehold estate acquired by the vendor before 22 December 2017 or a lease granted out of an agreement for a lease entered into before 22 December 2017. We are very anxious in case that might allow more widespread nullification of the intention to stop leasehold homes being sold in future.

Paragraph 2 states that the permitted lease definition for community housing leases may include community land trusts, co-operatives or a lease of a description that meets further conditions specified in regulations by the Secretary of State. Have the Government looked at the expected size of that group of exemptions?

In terms of retirement housing leases in Paragraph 3, the lease must meet certain conditions, including a minimum age restriction for the tenant and that all the leasehold houses within that development scheme must also be held on a retirement lease. We have particular concerns because this group of leaseholders has been affected by some of the heaviest and most onerous hikes of charges across the board, including service charges, ground rent and other costs. What assessment have the Government done of the impact on that group of leaseholders?

Amendment 4 relates to leases of certain National Trust properties. As I said, we understand why the National Trust would be exempted.

Surely the Government realise that the exemptions provided for by Schedule 1 could render the ban meaningless and will mean that new leasehold houses are still built in significant numbers. Can the Minister offer us any reassurance on whether an impact assessment has been carried out on the effect of these exemptions on the overall ban? Will she consider amendments that will tighten the proposed exemptions to ensure that the majority of homes that come forward will be freehold? Can she enlighten us any further on what will happen about leasehold flats, which affect 70% of leaseholders?

I want to raise a slightly different point from the one raised by the noble Baroness, who is worried that there are loopholes in the schedule. My concern is slightly different, in that the schedule currently bans a form of lease that is actually beneficial. I refer to an arrangement called Home for Life, which has been operating for some time and is based on somebody who is over 60 selling their home. Homewise, which operates Home for Life, then buys the property to which the person moves and grants them a lifetime lease. That enables them to vacate a large family home, gives them the security of the home they move to and, in many cases, releases a sum of money that enables them to expand their income.

There are a number of exemptions under the schedule; this scheme is not one of them. This is, in fact, contrary to what the Government said when they consulted on this a few years ago, when they made it absolutely clear that they would exempt these leases. I quote from paragraph 252 of the Government’s response to a consultation document, Implementing Reforms to the Leasehold System in England:

“It is not the intention of the policy to affect lease-based financial products (home reversion plans—equity release, home purchase plans—lifetime leases and Islamic/Sharia compliant finance), so long as they do not provide a loophole from which to evade the ban. For both home reversion and home purchase plans the provider acquires the freehold and the consumer has a non-assignable lifetime lease. Because these leases are not assignable to another party there is no risk of such leasehold houses coming onto the open market”.

They concluded:

“We will provide an exemption from the ban for these financial products”.

The product I have just mentioned falls squarely within the terms of the exemption that I just read out, but I am afraid it is caught by the Bill as it now stands. I hope my noble friend the Minister will be able to say that this is an unintentional capture of a worthwhile type of lease and that the Government will provide the necessary amendment downstream so that Home for Life can continue to provide a worthwhile service, which I do not think is a loophole of the kind described by the noble Baroness, Lady Taylor.

My Lords, this Bill is really very important. It has been a long time since Second Reading, so I think it is worth reiterating some of the fundamentals that we hope it will achieve.

The first is that this is obviously a huge opportunity to reform the leasehold/freehold property rights and relationships. That is certainly one of the key aspects that we on these Benches will pursue with vigour. It is also an opportunity to tackle the huge omissions in the Building Safety Act to provide remedies for those leaseholders and tenants living in blocks of flats that are under 11 metres or five storeys. As we have all through the debates and discussions on the Fire Safety Act, the Building Safety Act and the levelling-up Act, we on these Benches will continue to pursue the safety of leaseholders and tenants in those blocks of flats, because that is the right thing to do.

On these amendments, we on these Benches acknowledge that there will, of course, be areas in the leasehold/freehold arrangement where the abolition of leasehold impinges on other important rights, so we accept that there will be examples where an exception is justifiably made. However, the noble Baroness, Lady Taylor of Stevenage, is absolutely right to probe the reasons for these exceptions, in this group and in the following group, and has drawn attention to them individually. For example, the noble Baroness drew attention to a situation where the developer has a head lease and has yet to build out to the development. She asked the pertinent question of what happens if leasehold is going to be abolished for houses. Where does that fit in with a development that is ongoing that will be developed under the terms of a leasehold? That is not explained either in the Bill or in the Explanatory Notes.

We on these Benches understand the importance of this for historic estates that are now owned by the National Trust in England, Wales and Scotland. The purpose of the leases in those instances ought to be protected, because the overwhelming responsibility is the protection of our national heritage. That makes good sense. However, although the schedule provides details of which properties are eligible for what was described as “permitted leases” under the tribunal certification, what is not clear in either the clauses or the schedule, or in the Explanatory Notes, is what criteria the Government are using to enable some leaseholds to be described as permitted. Can the Minister provide the reasons for the choices made by the Government in determining permitted leases in Schedule 1? This is important because the legislation will be challenged in the future. It is therefore vital that, before we get to Report, we understand the reasons, as well as the purpose, behind the tribunal certification. Perhaps the Minister can provide the details of the regulations that are to be provided to the tribunal for making those decisions.

The two examples used by the noble Baroness, Lady Taylor of Stevenage, and the noble Lord, Lord Young of Cookham, relating to retirement housing and homes for life, strike me as being very important in our discussions. Those of us who have been involved in leasehold, and in the debate about leasehold and some of the criticisms of the way in which leasehold is implemented in practice, have been astonished by the way in which some retirement housing service charges have risen exponentially, without, it seems, any recourse to an explanation or a reduction. It is important to understand, for both homes for life and retirement housing—one of which is referred to in the schedule and the other which is not, as the noble Lord, Lord Young of Cookham has said—how protections will be provided for these very important areas of housing in order to provide protection for the leaseholders in these arrangements.

We support the probing amendments of the noble Baroness, Lady Taylor of Stevenage, and look forward to the detailed response, I hope, from the Minister.

My Lords, it gives me great pleasure to open Committee on the Leasehold and Freehold Reform Bill. Before turning to the debate on the amendments that have been tabled, it would be remiss of me if I did not take this opportunity to thank those Peers who have engaged with the Bill and those who have long championed the rights of leaseholders. I also thank colleagues from the Law Commission, without whose advice much of this vital legislation may not have been possible.

Reforming the leasehold market has long been an ambition of this Government. The Bill builds on the success of the Leasehold Reform (Ground Rent) Act 2022, which put an end to ground rents for almost all new long residential leasehold properties in England and Wales. The Government continue to be committed to improving the situation of leaseholders across the country. The Leasehold and Freehold Reform Bill is the best and most efficient way to make leases more transparent and affordable. When taken together, the package of reforms in this Bill goes further than the Government’s manifesto commitment, and will bring increased fairness, security, transparency and competition to the leasehold housing market.

I now turn to individual amendments that have been tabled to the Bill. The noble Baroness, Lady Taylor of Stevenage, asked about a number of issues. I have considered those issues and am pretty sure that they will all be covered within the Bill in further groups. I will make no comment on any newspaper articles at the Dispatch Box today. I thank all noble Lords for their valuable contributions to this group, especially the noble Baroness, Lady Taylor of Stevenage, in her opposition to Clause 7.

I turn to Amendments 1 to 4. The effect of this group of amendments would be to remove certain exceptions from the ban on new leases of houses. Like the noble Baroness, the Government want to see new houses sold as freehold. That is why we committed to ban the sale of new leases of houses other than in a very narrow set of circumstances. Having twice consulted carefully on this matter, the Government have listened to all parts of the housing market. We recognise that there are a handful of legitimate reasons for certain developments or types of houses or consumers where a lease may still be appropriate. Ignoring those, and pursuing a total ban, could restrict consumer choice and even access to housing. For example, on inalienable sites of National Trust land, the freehold is not disposable. Were the ban to capture these sites, selling new houses on them would not be possible. It could also prevent the granting of leases intended to help maintain and preserve a historic property—the central business of the National Trust.

However, we are sympathetic to the concerns raised by the noble Baroness, and recognise that there may be circumstances where it is not always evident to the consumer if the lease is permitted. As an added protection for consumers, we will therefore require that certain leases, contained within Part 1 of Schedule 1, must obtain a certificate from the relevant tribunal stating that the proposed lease of a house is permitted. This will ensure that the limited exemptions we have set out cannot be abused or manipulated by unscrupulous developers.

I restate that the Government share the noble Baroness’s objective that the vast majority of new houses be sold as freeholds—indeed, already, on account of steps taken by the Government, the overwhelming majority are. The provisions in this Bill will ensure that they continue to be so. Nevertheless, we believe the exceptions in the schedule are necessary, fair and appropriate. Following two public consultations on the matter, they have been considered in depth and with care.

Before I move on, I will speak about just one or two particular types of exemptions. First, the first noble Baroness, Lady Taylor, brought up the land-banked lots of leased land that will be exempt from the ban. She is quite right. For land leased prior to our announcing that we would bring forward legislation to ban new leasehold properties, which was on 21 December 2017, the market would have been unaware that the ban was forthcoming. If any development land held on a lease has been historically land-banked, it will effectively be sterilised if the land, for example on the edge of towns or villages, is only suitable for building housing. It could reduce the supply of new housing from land that is ideally suited for the construction of new houses.

We do not expect this exemption to result in a significant volume of new leasehold houses, other than in shared ownership, where there are now currently only a couple of hundred new leasehold houses being sold each year. Many such leased sites will already have been built out in the passing of time and any land leased after the 2017 announcement would not qualify for this exemption. Therefore, leasehold properties that are built would not be allowed to charge a ground rent following the provisions of the Leasehold Reform (Ground Rent) Act 2022. A developer would also not be allowed to sell new leasehold houses on land leased after 21 December 2017 once the legislation is commenced, unless they are selling an exempted lease on a house; they could sell flats on the site or offer houses for rent.

The noble Baroness, Lady Pinnock, also brought up exempting of the National Trust. I think I have covered that but, as I have said, the use of the tribunal is an added layer of protection for consumers. Permitted National Trust leases will require that certificate, which will identify the leases permitted and the reason why.

I thank the noble Lord, Lord Young of Cookham, for bringing up Homes for Life. I do apologise, but I will look into this; I will come back to him and make sure that the House is aware of our response to that.

I am most grateful to my noble friend for that undertaking, but I remind her that the Government said:

“We will provide an exemption”,

for these types of scheme.

I have noted that.

The noble Baronesses, Lady Pinnock and Lady Taylor, and the noble Lord, Lord Young of Cookham, also brought up the issue of the exempting of retirement houses. Retirement houses do not stand alone; they are usually part of a wider scheme with extensive communal facilities and packages of support care and hospitality services. A lease can help to organise the relationship between the two parties, with the home owner and provider managing the development in properties such as these. We think this justifies an exemption from the ban.

The noble Baroness, Lady Taylor Stevenage, also brought up the commencement day for this Bill. The letter that we wrote to the noble Lord, Lord Kennedy, explained that it is a complex Bill, and there will be complexities as we roll out the Bill after Royal Assent. However, I think we did put in that that commencement is likely to be 2025-26, not 2026.

I want to reassure noble Lords that there is a power in the Bill, should evidence of any abuse emerge, to tighten definitions further or remove exemptions entirely if there is evidence that a stricter approach is necessary. With these assurances in mind, I hope that the noble Baroness will agree not to press her amendment at this stage. In this group—

Before the Minister sits down, she referenced in the early part of her response the number of houses that were likely to be developed under circumstances where a lease had already been granted before the commencement of this Bill. Is she able to give the Committee a ballpark figure of the number of houses that would be caught up in this situation?

I am not prepared to give any ballpark figures from the Dispatch Box, but I will look into it and let the noble Baroness know. I apologise that I do not have that figure with me today.

Before I finish on this group, I have government Amendment 8, which makes minor clarificatory changes to the definition of shared ownership leases permitted under the leasehold house ban to clarify its intent. The amendment adds a further condition to permitted shared ownership leases, confirming that where a shared ownership leaseholder has acquired 100% of the equity in the house, they will then be transferred the freehold of the house at no extra cost. This brings the definition into line with government funding programmes and definitions elsewhere in the Bill. I look forward to hearing—

Just to return to the National Trust exemption, are the Government satisfied that there are no other institutions similar to the National Trust that have similar obligations of heritage maintenance, will be impacted by these provisions and should also possibly be exempted? If there are, how would they be able to grant long leases on property that needs to be maintained for heritage purposes?

We have been working with the stakeholders for many months, if not years, on this. If the noble Earl looks in the schedule of exemptions, I think he will find everybody that wanted to be there. We have agreed to put them there, but if he has any particular group in mind, I would like to hear about it, please.

Government Amendment 8 is also relevant to the following group of amendments, so perhaps we could take that into consideration on the next group. In the meantime, I look forward to hearing from noble Lords about how they think these measures can be improved as we move through the Bill. I ask that the clause stand part and that the amendments are not moved.

Clause 7 agreed.

Schedule 1: Categories of permitted lease

Amendments 1 to 4 not moved.

Amendment 5

Moved by

5: Schedule 1, page 135, line 19, leave out paragraph 5

Member's explanatory statement

This amendment, and other similar amendments in my name, probe each of the categories of “permitted leases”.

My Lords, I will speak to these probing amendments in the name of my noble friend Lady Taylor of Stevenage. This group of amendments further relates to different parts of Schedule 1, which provides details of permitted lease categories where self-certification applies in relation to the Clause 1 ban on new leases of houses, which the Government added to the Bill on Report in the Commons. The purported ban on new leasehold houses does not actually ban all new leasehold houses—a point that my noble friend eloquently made during the opening group. It is imperative that, through the probing amendments in this group, we emphasise that this ban appears to be a weak ban.

Each of the amendments in this group refers to a different type of exemption or permitted lease: Amendment 5 relates to leases agreed before commencement; Amendment 6 refers to shared ownership leases; Amendment 9 relates to home finance plan leases; Amendment 10 refers to extended leases; Amendment 11 looks into agricultural leases—paragraph 9 of Schedule 1 details the permitted lease definition for agricultural leases as

“a lease where the house is comprised in … (a) an agricultural holding within the meaning of the Agricultural Holdings Act 1986 which is held under a tenancy to which that Act applies, or … (b) a farm business tenancy within the meaning of the Agricultural Tenancies Act”.

Without wishing to lengthen the debate on this issue, since many points were picked up by my noble friend, can I ask the Minister opposite to let the Committee know how many current leases fit these categories of permitted leases? Do the Government expect it to stay the same going forward, especially for shared ownership? How many permitted leases do the Minister and the Government envisage over the next 10 years, for example, to which these categories will apply?

How do these numbers add up, compared to the number of new leases the Government expect to ban? What consultation did the Government undertake to establish the categories of permitted lease that are subject to our amendments before the Committee today? Can the Minister reassure the Committee that all these exemptions have been properly considered?

Given that agricultural leases rely on external definitions, can the Minister provide more detail on what exactly falls within these two definitions? Can she reassure the Committee of the suitability of all the new leases in that category being rightfully exempt? I look forward to her response, and I beg to move.

My Lords, I will speak to Amendment 7 in my name, which deals with shared ownership—one of the issues touched on by the noble Lord, Lord Khan. Shared ownership was developed in the 1980s and I claim some paternal responsibility for it. It was a route into affordable homes, and there are now some 200,000 shared owners.

There is a risk that shared owners will fall between the cracks between conventional leaseholders and those who rent. The Government are doing a lot for the conventional leaseholder. Under the Renters (Reform) Bill, they plan to do a lot for the conventional renter, and as I said, there is a risk of shared owners falling between the cracks. If one looks, for example, at the New Homes Ombudsman Service, which I greatly welcome, and the new homes quality code under it, the protection does not extend to affordable homes—namely, those sold under a shared-ownership scheme.

The reason for this amendment is a report, which I am sure my noble friend has seen, from the Select Committee in another place published on 26 March entitled Shared Ownership. The crucial thing to remember about this is that it was published after the Bill left the other place. Therefore, these are comments on the Bill as we see it today. I will briefly quote from three relevant paragraphs from that report.

Paragraph 80 states:

“When we asked Baroness Penn about this issue”—

shared ownership—

“she told us that the provisions of the Leasehold and Freehold Reform Bill are intended to make it easier for those on the old form of the lease to extend when needed. However, Shared Ownership Resources have said that shared owners will not benefit from the leasehold enfranchisement reforms included in the Bill, as, as assured tenants, they do not have statutory rights to leasehold enfranchisement”.

I hope my noble friend can assure me that shared owners do have the right referred to in that statement—the right to enfranchise—and that the fact they are technically assured tenants does not mean they are precluded from the rights in the Bill. Paragraph 92 reaffirms that point:

“We also believe that it is unacceptable that shared owners do not have the same statutory right to leasehold extension as other leaseholders”.

My final quote is from paragraph 94:

“Finally, the Government should ensure that any legislation passing through Parliament which has provisions to reduce the cost of, and simplify, the process of leasehold extension (for example, as in the Leasehold and Freehold Reform Bill) also applies to leaseholders in shared ownership properties, so that shared owners have the same statutory right to leasehold extensions as all other leaseholders”.

It is clear from those quotes from the recent report that the Select Committee holds serious doubts about the entitlement of shared owners to some of the rights in the Bill.

Shared-ownership leases are often complex. Leases on flats, for example, with multiple sub-lessees with different rights and responsibilities, can add further complexity. It is worth mentioning that shared owners are liable for all legal and other administrative costs of superior leaseholders and freeholders, although they only own, for example, 50% of the property. As a result, they can be paying more in service charges than other people in the block, simply because they have that extra relationship with the registered provider as well as the freeholder.

When a shared-ownership owner, for example, extends the lease and the property is valued, they pay 100% of the legal costs, although they only own 50% of the property. The explanatory notes to the Bill state, on page 8, paragraph 20:

“The Bill also gives shared ownership leaseholders the right to a lease extension for 990 years”.

However, the registered provider—the shared ownership’s immediate landlord—may have only a short-term interest in the lease as a head lessee or a sublessee. So, what happens when the shared-ownership leaseholder exercises the right, but the registered holder says, “I’m very sorry but I don’t have 990 years available; I only have a short lease”? Is there an obligation in the Bill for that registered provider to get a long lease, which, in turn, is passed on to the shared owner?

Turning to Condition C in the Bill, which my probing amendment addresses, I wonder whether this precludes certain shared owners from the right to a lease extension. Paragraph 6(6), on page 136, states:

“Condition C: the lease allows for the tenant’s share in the house to reach 100%”.

However, some shared-ownership leases have caps. They have caps at 80% in a designated protected area, and a cap of 75% in older persons shared ownership. So, are these groups excluded, or does paragraph 6(2) come into play, which says that the Secretary of State can exclude Condition C if the lease is of a description he has specified? Again, I would be grateful for an assurance on this.

My final point, which was also raised by the Select Committee, is that there is a broader risk of a two-tier market in shared-ownership leases following the changes in lease terms as part of the affordable homes programme.

My noble friend the Minister may want to reply to this in a letter, but shared owners want an assurance that their entitlements have been properly take on board during the Bill’s drafting, particularly against the background of the Select Committee report that I have just referred to, which makes it clear that there are anxieties that the interests of shared owners are not adequately reflected in the Bill.

My Lords, there are two elements of this category of permitted leases that are worthy of further exploration. One—on which the noble Lord, Lord Young of Cookham, has gone into great detail, questioning how it will work—relates to shared ownership. The second is to do with agricultural leases.

I would like the Minister to explain, first, why agricultural leases cannot be subject to tribunal certification, rather than the current self-certification process. There does not seem to be a reason why that does not occur under the first element of permitted leases.

There are other issues, such as shared ownership and self-certification, that are not necessarily covered in the details the noble Lord, Lord Young of Cookham, went into, but which are very important. I would like to understand how self-certification will be subject to challenge, what the process is and how such situations can be resolved. Will it be a costly process? If so, granting permitted leases for shared ownership, and agricultural leases, becomes an expensive legal minefield for those caught up in it.

So, I would like to understand why agricultural leases are not in the first set of certifications for permitted leases, and how challenges can be resolved. I look forward to what the Minister has to say.

My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, for Amendments 5, 6, 9, 10 and 11. I thank the noble Lord, Lord Khan, for speaking to those amendments to Part 2 of Schedule 1. These amendments would remove exemptions to the ban on the grant of new leases on houses.

As I stated when addressing Amendments 1 to 4, the Government are aware that certain housing or financial products which support home ownership rely on granting a lease. We have therefore consulted extensively on scenarios where this may be justified. For example, shared ownership, a vital home-ownership product, relies on the use of a lease. We cannot surely be saying that the thousands of new shared ownership houses built each year should not be sold any longer. Equally, we cannot say that the use of home purchase plans—including, for example, through use of Islamic finance, a vital option for the purchase of houses for those who cannot, for faith-based reasons, apply for an interest-charging mortgage—should not be allowed, or that owners of existing leasehold houses cannot extend their leases.

For any of the exceptions in Part 2 of the schedule, including shared ownership, home finance plans, lease extensions, agricultural tenancies, or contracts on leases agreed pre commencement, it should be clear and unambiguous to consumers buying these that they are getting a lease on a house, and why that lease is needed. Because of this, the Government will not require these types of leases to obtain tribunal certification. However, again, we have taken powers in the Bill to adjust the definition if there is evidence of abuse, or to move permitted leases into Part 1 of the schedule, should there be a need for tribunal involvement. The Government will continue to monitor market behaviour and act accordingly.

The noble Lord, Lord Khan, asked for some more details of these groups of homes or products. On exempting shared ownership, I should say that shared ownership is one of the Government’s key affordable housing products, which helps consumers to get on to the property ladder. Consumers purchase shares in the property over time through the payment of rent to a provider, and a lease facilitates this arrangement between the two parties. The Bill therefore permits the grant of new shared ownership leases on houses.

When we go to financial products, the Bill includes an exemption to the ban on new leasehold houses for lease-based financial products, as I said, which can help people to buy a home or release equity from it. Here a lease is required because a third-party provider acquires a freehold on the consumer’s behalf as part of the financing of the purchase. Ownership is required by two parties and is best facilitated via a lease.

The noble Baroness, Lady Pinnock, and the noble Lord, Lord Khan, asked about agricultural tenancies. Farm businesses and agricultural landlords negotiate the length of a tenure to suit their business needs, and it is intended that this should continue, as longer-term leases can help to ensure that farmers have security to invest in their businesses over time. The Bill makes it clear that agricultural tenancies will be the permitted lease for the purposes of the ban on new leases of houses, and explicit exemption is provided in the Bill for tenancies that fall under the Agricultural Holdings Act 1986 or the Agricultural Tenancies Act 1995.

We are exempting lease extensions when a home owner extends their lease; often the original lease is surrendered and a new one granted in its place. While this is technically a new lease, the homeowner remains the leaseholder of the same property. Therefore, we believe that this should be treated as an existing rather than new lease, and warrants an exemption. In practice, we envisage that most leaseholders will purchase their freehold, where they are able to do so.

We are exempting agreements for lease. These AFLs are a contract between the prospective leaseholder and landlord to enter into a lease in the future. Where an AFL was agreed prior to commencement of the Bill, it is right that this contract should be honoured, and the lease granted. For this reason, an AFL entered into prior to the commencement of the ban will be treated as a permitted lease, as both parties have agreed on the terms of the lease and are aware that they will be entering into a lease. A tribunal certificate and a warning notice are not therefore required, we believe.

While I commend the intent of this group—as I did the last group—which is to make sure that even fewer, if any, new leases of houses are sold upon commencement of the ban, the unintended consequences of this amendment would have significant effects. It would reduce housing supply, reduce access to home ownership for those on lower incomes and minority groups, and prevent leaseholders living in existing leasehold houses extending their leases.

Amendment 7, tabled by my noble friend Lord Young of Cookham, provides that the definition of shared ownership should be adjusted to allow shared ownership leases with capped staircasing arrangements. The Government agree that catering for such shared ownership leases is vital, especially in rural areas, so that affordable housing can be retained for the benefit of the local community. I point my noble friend to paragraph 6(2) on the shared ownership definition, which provides that paragraph 6(6) and (7) can be disapplied in regulations. We intend to provide in those regulations for such cases that my noble friend is keen to see protected, and look forward to working with him on those regulations as we move through the Bill.

My noble friend also asked why shared ownership was not in the Bill, and what is going to be done for shared ownership. There was an amendment on this in the other place, I understand, which says that the equivalent lease extension rights have been given to shared ownership leaseholders: that is, extension by 990 years at peppercorn ground rent, on the leaseholder’s share, on payment of a premium. Presently, shared owners of houses were excluded from extension rights under the 1967 Act and their position for flat under the 1993 Act was uncertain due to contradictory court and tribunal decisions. Where the shared ownership provider is the freeholder, they will be able to grant an extension. I hope that helps my noble friend. With these assurances, I hope that noble Lords will agree not to press their amendments.

I am enormously grateful for the assurances that my noble friend has given. Will the Government respond to the Select Committee report on shared ownership before Report? It raises some important issues which I touched on and it would be nice to have the Government’s response before Report.

My Lords, I thank the Minister for her response to what was a very interesting debate. I always appreciate the breadth and depth of expert knowledge from the noble Lord, Lord Young of Cookham, in particular. He talked about the rights of shareholders and what they are entitled to, and it is important that he finished by talking about the response to the Select Committee report on shared ownership. I appreciate also the probing of the noble Baroness, Lady Pinnock, alongside myself, on the definition of agricultural leases but, for the time being, I beg leave to withdraw my amendment.

Amendment 5 withdrawn.

Amendments 6 and 7 not moved.

Amendment 8

Moved by

8: Schedule 1, page 136, line 10, leave out from “tenancy” to the end of line 12 and insert “—

(a) allows for the tenant to acquire the freehold of the house (if the landlord has the freehold), or(b) provides that the terms of the lease which make the lease a shared ownership lease cease to have effect (if the landlord does not have the freehold),without the payment of further consideration.”Member’s explanatory statement

This amendment amends the definition of a shared ownership lease so that it includes the case where a tenant has the right to acquire the freehold. This is in line with the definition being inserted into the LRA 1967 by paragraph 13 of Schedule 8 to the Bill.

Amendment 8 agreed.

Amendments 9 to 11 not moved.

Schedule 1, as amended, agreed.

Clauses 8 to 18 agreed.

Schedule 2 agreed.

Clauses 19 to 25 agreed.

Amendment 12

Moved by

12: After Clause 25, insert following new Clause—

“Report on providing leaseholders in flats with a share of the freehold(1) The Secretary of State must publish a report outlining legislative options to ensure that all qualifying tenants in newly-constructed residential properties containing two or more flats have a proportionate share of the freehold of their property.(2) The report must be laid before Parliament within three months of the commencement of this Act.”Member’s explanatory statement

This new Clause would require the Secretary of State to publish a report outlining legislative options to provide leaseholders in flats with a share of the freehold.

My Lords, just before I move my amendment, I should say that I omitted to thank the Minister for her collaborative approach to the Bill in advance of it coming before the Committee. I now do so and rectify that omission. I also thank the Law Commission, as she did, and the many groups that have a leasehold interest and met us in recent weeks. I hope the Committee will forgive me for not mentioning that earlier on.

Amendment 12 requires the Secretary of State to publish a report outlining legislative options to provide leaseholders in flats with a share of the freehold. I shall resist the temptation to go over the ground again of why the Government did not include flats in their ban on new leases, although it would be helpful to know from the Minister what level of consideration was given to enacting the recommendations of the Law Commission in full in regard to this matter, particularly as it was the stated intention of the Secretary of State—that is what he wanted to do. There has been a commitment to this ban on leasehold at least since 2017. One would think that there has been plenty of time to get the work done. Indeed, the Law Commission has done much of the heavy lifting on what would be needed.

Our later amendments seek to determine the Government’s appetite to move in due course to a more widespread system of commonhold as the default tenure. The successful adoption and implementation of this in other jurisdictions has been well debated and discussed in your Lordships’ House. It is certainly the clear intent of my party to move as quickly as possible to that tenure. However, that would be a policy decision, as distinct from the implementation of the Law Commission’s recommendations, and would necessarily have to follow the legal scheme that those recommendations would introduce. As that is not proposed in the Bill but follows the Secretary of State’s intent to do away with the archaic system of leasehold altogether, there is a strong case to make a start with a transitional regime.

The introduction of a mandatory share of freehold in all new blocks of flats, as proposed in our amendment and that of the noble Lord, Lord Bailey of Paddington, alongside the requirement to establish and operate an RMC—a right to manage company—with each leaseholder given a share, would be a sensible staging post on a path towards a commonhold future. It would make conversion to commonhold at a later date a far simpler process. We urge the Government to accept these amendments as they would ensure that we have started on the path to confining leasehold to the dustbin of history, which is where we believe it belongs, and would make it clear that the Bill is not ruling in one set of homes and home owners to the ban and ruling out another. That other is affecting by far the greatest number of leaseholders, with 70% of leaseholders occupying flats. To be clear, this is not an alternative to leasehold. If such a measure were brought into force, any leaseholder resident in a new block of flats would own both the lease and a share of the freehold. It would ensure, in effect, that all new blocks of flats were collectively enfranchised by default, without the need for leaseholders in them to go through the process of acquiring the freehold.

The advantage of having a default share in the freehold is that it would give the leaseholder a direct say on what happens in their building, as is the case with those who have already been collectively enfranchised. It would also provide additional valuable rights, such as the right to a long lease extension on the basis of a peppercorn rent; in other words, the rights that will be accorded to existing leaseholders but without the cost of paying a premium to the freeholder that is still required to exercise that modified right.

We know that flat owners having a share of the freehold can cause tensions; for example, in agreeing how to proceed on crucial decisions, such as whether to cover the cost of major works through service charges. That is why it is essential that proper management arrangements are in place as a matter of course, to reduce the likelihood of damaging disputes between neighbours. That is why we propose mandatory RMCs on new blocks of flats as a corollary to the new clause.

Labour is unequivocal about the fact that commonhold is a preferable tenure to leasehold, in that it gives the benefits of freehold ownership to the owners of flats without the burdensome shortcomings of leasehold ownership. As we have heard, the Law Commission made 121 recommendations on commonhold, designed to provide a legal scheme that would enable commonhold to work more flexibly, and in all contexts. It is vital that if commonhold is to be the default tenure, it is enacted fully and properly, with full account of the Law Commission recommendations.

We have not sought to persuade the Government to incorporate any subset of the Law Commission commonhold recommendations into the Bill, but we need to reform the legal regime for commonhold in one go. Labour is committed to doing so if the British people give us the opportunity to serve after the next general election. In the meantime, it would be good to give current leaseholders a share in the management of their properties. I beg to move.

My Lords, it is a pleasure to follow the noble Baroness, Lady Taylor of Stevenage. I do not want to rehearse the reasons why I think that a mandatory share of the freehold is necessary, in the way that the noble Baroness laid out. I want to speak more to the contact that I have had with so many different groups and individuals who feel that they are trapped in their leasehold.

The number one thing that comes up is, of course, service charge abuse. Which? did a study in 2011 which suggested that £700 million in service charges had been overcharged. The market for that has grown now to £7.6 billion, so we can only assume that this overcharging has grown along with it.

The challenge becomes: how do we make this market fair? How do we make sure that these abuses are washed away? That is to give the people paying the bills control, and not to lock them into the monopoly that leaseholders are currently locked into. Ultimately, the answer would be commonhold, but while commonhold is not on the table, we need to look at a share of the freehold. It should be mandatory, and it should happen straightaway. The noble Baroness laid out very eloquently the benefits that this would give to leaseholders.

We must understand that leaseholders do not want a landlord; that is why they have left the private rented sector—to avoid landlords. These amendments should stand. They really give leaseholders what they want. I have tabled an amendment which asks the Government to retain the power to bring forward a share of the freehold on new flats. That is the most important thing going on here.

My Lords, we on these Benches far prefer a move to commonhold. The journey towards commonhold is a solution to the leasehold/freehold issue.

I understand why the noble Baroness, Lady Taylor of Stevenage, and the noble Lord, Lord Bailey, have proposed a share of freehold as a route towards commonhold as being the ideal solution, as recommended by the detailed report from the Law Commission in 2020. However, it is only a small step, and it is an option that is already being exercised by some flat owners.

It seems to me that the disadvantage of share of freehold is that, in practice, it will be possible only for blocks of flats with a small number of units. Where there is a large number of units in a single block, it would be very difficult to have a share of freehold for some but not others. It will be interesting to hear what the Minister and the noble Baroness, Lady Taylor of Stevenage, think.

We on these Benches support any move that enables leaseholders to gain some full ownership rights over the home in which they live. However, I am not yet convinced that this is the route to go down. If this is accepted by the Government, it will probably be seen as a further barrier to the promotion and reinvigoration of the option of commonhold, which, after all, has been in existence since 2002. This alternative was investigated by the Law Commission, which came down in favour of commonhold—that is the subject of the next group, for which I will move the lead amendment. It is a small step in the right direction, but whether it is the step that will lead to commonhold has yet to be seen.

My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, and my noble friend Lord Bailey of Paddington for their amendments.

Amendment 12 would require the Secretary of State to publish a report, within three months of the commencement of the Act, into the legislative options for mandating that new-build flats be sold to leaseholders with a proportionate share of the freehold. We appreciate the benefits that share-of-freehold arrangements have over ordinary leasehold arrangements with third-party landlords, which is why we are making it simpler and cheaper for leaseholders of flats to enfranchise collectively and, therefore, achieve share-of-freehold arrangements. However, the commonhold framework has already been designed as the optimal legal vehicle for the collective ownership of flats. As such, the Government want to see the widespread take-up of commonhold, and for it to be the future preferred tenure for owners of flats, rather than share of freehold.

The noble Baroness, Lady Taylor of Stevenage, asked why the legal framework was so complex. We need to determine precisely what property the mandate is applied to, exemptions, the processes for phased developments, the enforcement of developer liabilities for remedial works and so on. We would also need to prescribe the constitution for resident management companies—since they are presently unregulated—and to consider how the management functions are to be exercised by such companies, resident participation in decision-making, and the procedures and jurisdictions for dispute resolution. It is a complex issue, but one that we are working on—the Law Commission has worked on it for us for a number of years—and we feel that it is important that we continue with moving to commonhold rather than mandate share of freehold.

We understand the desire to offer leaseholders a share of freehold in the interim between leasehold and commonhold while the Government consider the Law Commission report and work on commonhold. However, we do not believe that mandating share-of-freehold sales would be a simple and quick undertaking. We also have concerns about using share of freehold across the whole housing market. It is not an optimum product for managing all types of shared properties, such as large and complex buildings—as we have heard—or buildings with extensive shared spaces. That is why the Government are committed to commonhold instead. We would prefer to work on one widespread take-up of a new tenure, and for that new tenure to be commonhold.

I will ask for some clarification, then. The policy was originally announced in 2017. The Law Commission did a great deal of work on what needed to be done to enact commonhold, and yet it is not in this Bill. The Minister has just reaffirmed the Government’s commitment to move to commonhold, so can she say how much longer it will take to get us to a situation where we have it?

I reiterate that the Government remain absolutely committed to widespread take-up of commonhold for flats. We have reviewed the Law Commissioners’ recommendations to reinvigorate commonhold as a workable alternative to leasehold, and I can assure noble Lords that we will set out next steps in due course.

Amendment 15B from my noble friend Lord Bailey of Paddington would require mandatory share-of-freehold arrangements to be made for block of flats in instances where flats are subject to long leases or collective enfranchisement. I thank him for this amendment and for his interest in this specific instance. We are aware of the interest in this and appreciate the desire to ensure that more leaseholders can obtain control or ownership of their building. Although we understand the benefits that share-of-freehold arrangements can have over ordinary leasehold arrangements with third-party landlords, we are also conscious that mandating share-of-freehold sales on new builds would require a complex legal framework to be constructed and to accommodate the mandate. As I have said, we do not believe that mandating share of freehold would be a quick or easy fix for leaseholders. The Government consider that the best option, as I have also said before, is to continue to work towards the widespread use of commonhold in future, rather than mandating share of freehold.

My noble friend Lord Bailey of Paddington was particularly keen on service charges. The Government will bring forward, through this Bill, a number of measures to require landlords to provide further information to leaseholders on a very proactive basis and to increase the transparency of their service charges and administration charges, as well as providing more information to leaseholders on a reactive basis. Those measures include the introduction of a standardised service charge demand form to standardise the information that freeholders are required to provide to leaseholders. We will mandate the provision of an annual report that sets out key information of importance to leaseholders. We will compel landlords to provide more relevant information to leaseholders on request. We will ensure that service charge accounts are provided within six months of the end of the previous accounting period that they cover, regardless of the lease terms, and this will be subject to a number of exemptions. We will require freeholders to proactively disclose—

Can my noble friend the Minister let me know how many of the 121 recommendations that the Law Commission made around commonhold will be adopted?

All I can say to my noble friend is that that is exactly what the Government are working on and that further details will come forward in due course.

A number of things in this Bill will affect the transparency and accountability of freeholders to leaseholders, particularly on service charges, which is the one thing that my noble friend brought up. For these reasons, I hope that the noble Baroness and my noble friend will not press their amendments.

I thank all noble Lords who have taken part in the debate. I found it a bit of a frustrating debate in many ways. As I said, this policy was announced in 2017; we have had a very detailed Law Commission review and endless discussions in this House about how we move to commonhold. In a sense, my amendment was set out to probe whether we could have some route map towards commonhold, and this might be a first step towards that, to provide leaseholders with at least a share of freehold with a view to moving towards commonhold in the future. It seems that the Government want neither to set out what their route map to commonhold is or what the steps on it might be, nor to give us a timescale for that route map towards commonhold. Now we are faced with an indefinite timescale to get there and a Bill which could have enacted it but has not. I wonder how much longer we will have to wait. The seven years we have already waited is quite long enough.

It has been frustrating to unlock that but worth probing the Government’s intentions. I am grateful for the reassurance that commonhold is still the aim, but I would like to know how long it will take. However, in view of the discussions here today, I will for the moment withdraw the amendment.

Amendment 12 withdrawn.

Amendment 13

Moved by

13: After Clause 25, insert the following new Clause—

“Commonhold and Leasehold Reform Act 2002: commonhold threshold(1) Within six months of the day on which this Act is passed the Secretary of State must make regulations to amend the Commonhold and Leasehold Reform Act 2002 to lower the threshold of supportive eligible leaseholders needed to enter into a commonhold to 50%.(2) Regulations under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”Member’s explanatory statement

This amendment would require the Government to legislate for conversions from leasehold to commonhold where 50% of eligible leaseholders in a building support the conversion, rather than 100% as it currently stands, in line with the recommendation from the Law Commission.

My Lords, this amendment is on commonhold. I was pleased to hear the Minister emphasise that the Government intend to ensure that commonhold becomes the norm, although it was unfortunate that the phrase that followed was “in due course”.

This conversation about leasehold reform has been going on for a very long time. I accept that it is complex and that that there are competing financial interests. I accept that it will be difficult to find a route to ensuring that leaseholders become commonholders. However, the legal work has been done by the extensive and authoritative report from the Law Commission, The Future of Home Ownership, which was published in July 2020. The commission published three massive reports—one of them is over 800 pages. Therefore, the Government have at their disposal the combined thoughts of the Law Commission on how home ownership should be extended to leaseholders, and it has explained how that is done in a straightforward way.

The amendment in my name presses the Government to legislate for conversions to commonhold where only 50% of eligible leaseholders in a building support the conversion—rather than having it at 100%, which is obviously a barrier to commonhold ownership—and is in line with the recommendation from the Law Commission.

Everyone in the Committee will be well aware that the leasehold/freehold arrangement is very unusual in western European countries. The historic norm in the rest of western Europe is the equivalent of commonhold; that is how people who live in flats organise their affairs. It was introduced in England and Wales in 2002 but, for various reasons explained by the Law Commission, it has not taken off as an alternative to leasehold.

I will outline the advantages of commonhold so that those who oppose the move to it, or believe the barriers are too great, will need to respond to them. The advantages of commonhold are that a person becomes a home owner, and it provides flat owners with equivalence to house owners. We on these Benches believe in that fundamental principle: that flat owners should have the same legal rights to home ownership as house owners.

The second advantage is that there is no ground rent to be paid—we will debate whether that should be abolished or limited on future Committee days. The third advantage is the control over the property that the flat owner would have as a commonholder. We have heard over long debates in this House that freeholders or their management agents are seemingly abusing service charges by raising them—we have seen sky-rocketing increases—while insurance costs arising as a consequence of the dreadful tragedy at Grenfell Tower are currently the remit of the freeholder or managing agent and not of the flat owner. That cannot be right, and it would change under commonhold.

In its report, the Law Commission states that some criticisms of freeholders with regard to, for instance, rising ground rents and inexplicable rises in service charges

“can fairly be described as abusive practices by landlords or developers”.

The Competition and Markets Authority also reported on leasehold housing in 2020, expressing concerns about—again—ground rent and services charges. Further, it reported on permission fees, whereby a leaseholder has to pay the freeholder for permission for even minor alterations within the flat that they are leasing. I find it extraordinary that in the 21st century there is still a fee to be paid to make alterations, rather than an agreement that it can be done.

The very nature of the leasehold/freehold arrangement opens the door to those who wish to derive the maximum gain from it, as both the Law Commission and CMA exposed. Of course, not all freeholders or their agents behave in this way, but the exploitative behaviour of some must be curtailed through legislation. Hence, I hope that we can have a quick, ready transition to commonhold, because that is the only way that such abuses will be prevented.

The Law Commission was very clear that this could be done. It talks about a “cultural change” being the biggest barrier to the move to commonhold, rather than legal and financial involvement, which is often seen as a barrier. The Law Commission stated that commonhold should be used

“in preference to leasehold, because it overcomes the inherent limitations of leasehold ownership”.

There is clear evidence and advice from the Law Commission, and all that is now needed is the will to implement the reform that the Law Commission has extensively reported on and shown the route map to achieving.

It is obvious that this will not be straightforward because of the financial interests of individuals and institutions in prolonging the existence of the leasehold/freehold arrangement. However, if the Government are determined, as the Minister said that they were, to create commonhold as part of a property-owning democracy—the phrase often used by the Government—the move to commonhold must be implemented, and must be implemented as speedily as possible. There must be no more delay; commonhold has been an option for over 20 years. It needs reinvigorating—the word that the Law Commission uses. It needs some of the barriers to be removed. It needs, as the Law Commission states, a cultural change in the way that commonhold and leasehold reform is looked at. That is what is needed, and the Government are in a position to do it. They have said that they want to make that change; unfortunately, the Bill does not enable it, as “in due course” will no longer be sufficient. I look forward very much to this debate and the Minister’s response.

My Lords, I shall speak to my Amendment 14. First, I apologise that I was away for Second Reading; I confess that I would probably have made a rather frustrated and angry speech at the Bill’s limitations and the waste of a chance to end leasehold once and for all. However, I come here today in a more conciliatory mood with, I hope, a constructive proposal to create a sunset clause on all new leasehold flats that would allow the Government five years to resolve any outstanding issues for present leaseholders. Because of a time limit, there would be light at the end of the tunnel, and all the rhetoric from the Government and the Opposition condemning leasehold as a feudal, unfair tenure could be turned into a concrete outcome, with no room for broken promises.

There is nothing unreasonable or radical about the amendment. The Conservative Party’s 2019 manifesto promised to enact a

“ban on the sale of new leasehold homes”—

and note that the wording was “homes”, not “houses”—and the majority of leasehold homes are flats. In fact, as the noble Baroness, Lady Pinnock, pointed out, 70% of them are. We know that it is precisely in relation to flats where the real abuse occurs, where the real money is made by third parties in exploitative extraction, and where the majority are denied control of their own finances and lives. That is where this scandal lies.

What is more, the number of leasehold flats is increasing exponentially, whereas the proportion of new-build houses sold as leasehold is falling dramatically, from a 15% high in 2016 to a meagre 1% of all leaseholds in December 2022. Yet the Bill avoids the main problem, and I am hoping that this amendment will give us a way out, and that now is the time to do it. Banning new leasehold houses is not enough and does not, in my opinion, despite what the Minister assured us, uphold the manifesto commitment. The amendment would allow the Government to honour their promise but without doing it in a rush.

Not to be partisan, I was delighted when the shadow Housing Minister, Matthew Pennycook, pledged to scrap leasehold tenure within Labour’s first 100 days in office, but this appears to have been slightly rescinded or fudged. This is therefore an amendment for all sides, to ensure there is cross-party consensus that we will absolutely name the date by which leasehold will have gone—what Michael Gove, the Secretary of State, has called an “indefensible” system of tenure. As far as I can see, everyone, cross-party, agrees with that. If not now, when? This is the first piece of legislation tackling leasehold tenure for new and existing homes in 22 years, outside of building safety. Another opportunity to move against this iniquitous regime may not come around any time soon; it might take another 22 years.

I am keen to learn the lessons of history, because back in 1995, the late Frank Dobson, then the shadow Secretary of State for the Environment, and Nick Raynsford, then the shadow Secretary of State for Housing, brought out an excellent pamphlet entitled An End to Feudalism: Labour’s New Leasehold Reform Programme. It noted:

“Over recent decades the weaknesses and injustices inherent in the British leasehold system have become increasingly highlighted, but reform has been a long time coming”.

It was promised that reform would come under that Government, but reform has sadly been an even longer time coming because, despite a promise to use the 2002 leasehold Bill to sunset any new leasehold buildings, this was reneged on.

This failure to use legislation 22 years ago to resolve the situation means that over 2 million further leasehold properties have been created—the very debt traps that have caused so much misery for so many. Are we just going to allow this Bill to pass, knowing that we will create more leasehold flats, and therefore more problems and more debt traps ahead? As Sebastian O’Kelly from the Leasehold Knowledge Partnership bluntly put it to MPs:

“You’re out of step with the rest of the world, so stop creating more leaseholds”.

I was delighted to hear the Minister assure us that nobody wants this, but I want that promise to be written down rather than just stated.

I stress that the amendment is not trying to dictate how this should be done. Rather, it would give the elected Government of the day, whoever that is, the space and flexibility to decide on whatever schemes are appropriate to ensure that third-party investors—the rentiers—are no longer permitted to interfere in what will be, I hope, a thriving sector of flats throughout the UK.

The amendment is not prescriptive, as I have said. Commonhold is not even mentioned directly, even though I agree with all those who have said that it is best suited to deliver ownership and management of residential flats for the future. The main point is to set a sunset clause to ensure that, whichever party is in government, there are no more broken promises and that the “in due course” we heard about earlier has an end date. What is more, the amendment, via proposed new subsection (3)(c) and (d), would ensure that existing leaseholders are not left behind. In a way, what is not to like?

However, it is difficult to know exactly who or what I am arguing against, because I am not quite sure that I even understand why this could not have been done in this legislation. The answer has not been forthcoming. I want to look at just a couple of objections.

In this Chamber, the noble Baroness, Lady Penn, explained from the Dispatch Box earlier this year that reforming leasehold for flats is “inherently more complicated” than for houses, as they required an arrangement to “facilitate management” of the buildings. Surely the “it’s complicated” defence is a red herring. There have been endless consultations and commissions, and decades-worth of academic and policy research, as we have heard from the noble Baroness, Lady Taylor of Stevenage, and as the noble Baroness, Lady Pinnock, pointed out. We have had the Law Commission, with its 121 recommendations. An expert advisory group, the Commonhold Council, was launched in May 2021 by the Government precisely to prepare home owners and the market for widespread uptake of a collective form of home ownership. So, as the former Housing Minister, Rachel Maclean, told the other place at Second Reading:

“All the work has already been done”.—[Official Report, Commons, 11/12/23; col. 676.]

For the remaining complexities, this amendment would give Parliament one more term as a reasonable timeframe to work at any outstanding issues—for example, around the complications of shared ownership, which we heard about earlier.

I also want to challenge the notion that the management of blocks of flats is so complicated that it is untenable in the short term. I fear that this hints at a prejudice about whether commonhold will lead to poor property management—something that is often wrongly equated with amateur management. This is a flawed argument that is sometimes put forward by the freeholder lobby. It is patronising and patrician and, in any event, it ignores what is happening worldwide. If you buy a flat in the majority of cities in the world, it will be held in commonhold, and the buildings are not all falling down or neglected.

Groups of flat owners are more than capable of bringing in professional management companies to organise repairs. The Commons Select Committee said, back in 2018-19, that it was

“unconvinced that professional freeholders provide a significantly higher level of service than that which could be provided by leaseholders themselves”.

To be honest, it is the opposite. At present, leaseholders are being charged for services that they do not receive.

In conclusion, what is not complicated is that owners of flats are a safer bet for maintaining and managing their own homes than those developers and freeholders who have given their own profession a bad name. It is why this scandal is being discussed in the first place. I suggest that we simply say that in five years’ time this will be put to bed and finished with, and then no one can accuse whichever Government are in power of breaking promises again.

My Lords, I do not have an amendment in this group, but it is almost therapeutic when your Lordships’ House is asked to consider a rare Bill such as this, where, instead of the Government seeking to do something really quite nasty, they are merely failing to do the best possible thing that they could.

The amendments in this group reveal that the Government have failed to bring in any proposals to replace leasehold ownership of residential property with commonhold ownership. It is obvious that there is a political consensus—at least on this side of the Chamber and partly on the other side—that commonhold should be the main model of ownership for multi-unit residential properties. However, 20 years since commonhold was first introduced, and four years since the Law Commission published legislative proposals to enable more widespread adoption of commonhold, it looks as though this Government have chosen to leave this issue to the next Government to sort out. That might be the best thing—I do not know—but, quite honestly, this Government have had the option, even in this Bill, to do the right thing.

Housing is part of survival: it is a human right and you have to get it right. It is time to end the commodification of housing by international finance and to end the feudal model of land ownership, which facilitates developers extracting as much money as possible from home owners while providing little or no value in return. Forgive me, I should have declared an interest as a leaseholder.

I would like to ask the Minister some questions; others have probably asked these questions before, but I just want to be specific and get clear answers. When do the Government expect the Commonhold Council to complete its work on the implementation of commonhold for new housing supply? When do they expect the completion of the work on conversion to commonhold? Why is it taking so long?

My Lords, I will make a brief intervention to support the thinking behind Amendment 14, in the name of the noble Baroness, Lady Fox. We all understand the disappointment that it has not been possible to make progress with commonhold in this Parliament. We all understand that it would be impossible to try to retrofit commonhold into the existing legislation. One thing we have learned over the last two parliamentary Sessions is that the capacity of the department to produce legislation that does not need wholesale amendment as it goes through is limited. We all bear the scars of the levelling-up Bill.

We have also seen the number of government amendments that have already been tabled to this Bill. What ought to happen, and I wonder whether my noble friend would smile on this, is that at the beginning of the next Session, a draft Bill should be published on commonhold. That would enable us to iron out all the wrinkles and expedite the passage of an eventual commonhold Bill when it came forward. There is all-party agreement that we need to make progress with commonhold, so urgent work now on producing a draft Bill is time that would not be wasted. It would mean that early in the next Session of Parliament we could produce a draft Bill—we have the Law Commission’s work, which we could build on—and iron out all the wrinkles. Then, when the actual Bill came forward, we would be spared, I hope, the raft of government amendments. I exempt my noble friend on the Front Bench from responsibility for this; it would be a faster destination.

By way of comment, what has happened to draft Bills? When did we last see a draft Bill? If you look at the Cabinet Office’s recommendation, I think in 2022 it said that they should be part of a normal legislative programme; there should be a number of Bills produced in draft, which we can get our teeth into. All my experience as chairman of the Parliamentary Business and Legislation Committee is that when you have a draft Bill, the actual Bill goes through much more quickly. Again, my noble friend has no responsibility for the legislative programme, but I think we need to spend more time as a Parliament looking at draft Bills rather than at Bills that have been drafted in haste, and then having to cope with a whole range of government amendments.

My Lords, I too was unable to speak at Second Reading, and I apologise for that. However, I was able to attend much of the debate and to listen to a number of your Lordships’ speeches. I noted the numerous times in which leasehold tenure was described as “feudal”; we have heard this many times today. It is used as a pejorative term, which I do not strictly agree with, being a feudal Member of your Lordships’ feudal House, serving our feudal sovereign. It seems a somewhat discriminatory term to use. I also note that not all feudal rights are bad; we laud the Magna Carta, the right to trial by jury, and the rights of habeas corpus, all of which are essential feudal rights. I would hazard that leasehold tenure is similarly a feudal right that we should be particularly proud of, like your Lordships’ feudal House.

That said, I realise that the days of leasehold are numbered, but we should not remove such an important element of our residential housing market without ensuring that there are at least adequate alternatives that are fit for purpose. There currently are not. I believe it a mistake to dismantle leasehold tenure without ensuring that the commonhold alternative is fit for purpose.

Here I note my interests: in 2003, as a junior property barrister, I was a contributing author to a handbook on the exciting new tenure of commonhold. Since then, and despite our best hopes, the book has sold barely a copy, and I understand that commonhold has been adopted by hardly anyone. In 2015, and again more recently, the Law Commission has explored the shortcomings of commonhold, and has, as we have heard, identified numerous ways in which the law could be amended to make it better. I believe the Government are therefore wrong not to have grasped the nettle and made commonhold fit for purpose at the same time as, if not before, introducing this piece of legislation.

For this reason, I support the probing amendment of the noble Baroness, Lady Taylor, with respect to the publication of a commonhold strategy. Without that viable alternative, I am particularly concerned that the leasehold reforms will have the unfortunate effect of decreasing the available housing stock, and will drive up the price of housing, which will decrease the number of homes that are affordable. I note my interests as a member of the Devon Housing Commission, ably chaired by the noble Lord, Lord Best, which is exploring why there is so little housing available in the county for people who actually live there.

I have a question for the Minister: have the Government sought to measure the likely impact of the Bill on the availability of new housing, and the willingness of freeholders to make land available for development?

My Lords, I have a number of interests to declare: first, as a leaseholder, secondly, as chair of the Heart of Medway Housing Association and, thirdly, as a non-executive director of MHS Homes Ltd.

I spoke at Second Reading and I am sure that, as we go through these few days in Committee, we will largely agree with each other that there is a major problem. We all want to see leasehold reform and commonhold reform. Everybody backs it. I know that the noble Baroness, Lady Scott, and the noble Lord, Lord Gascoigne, back it. The problem is that we are not doing anything about it. That is the shame here.

The amendment from the noble Baroness, Lady Fox, absolutely takes us forward. She includes a day to end leasehold flats, which would deliver that Tory party manifesto commitment. We should all back her if, as I hope, she divides the House at the next stage. Her amendment would deliver the Tory party manifesto commitment, but will the Government support it? Of course not. We know that. We all agree in these debates, but what we will get from the Government Front Bench is, “When parliamentary time allows”, “The next steps will follow in due course”, “We are keeping it under review”, or “We will get back to you”. That is the problem.

This is a golden opportunity that the Government have completely failed to deal with. We have sat here for years. I have asked question after question. I have been assured, “It is coming” or “Don’t worry, don’t ask questions, we are going to sort it all out”. Yet here we are and what do we get? A Bill that delivers very little. On the point about service charges and transparency, I can assure the Government Front Bench that if a leaseholder has problems with the service charge, they know they have problems. What they want from the Government are the tools to sort them out. The Government have not delivered that. They can give more transparency—great, but we need the tools for the job and they are not doing that for us.

This is very frustrating. I think we will have lots of agreement but very little action. I hope that, when we get to Report, a number of amendments will be passed and many members of the Government will support us in delivering the commitments that their party made to leaseholders at the last general election. The amendments from the noble Baroness, Lady Fox of Buckley, in particular, are really good, giving an absolutely clear cut-off date.

My noble friend Lady Taylor of Stevenage asked the Government to set out their strategy for commonhold. What is it? I hope they can tell us. The current strategy seems to be, “We will get back to you. We know it is important, but we can’t do anything about it at the moment—sorry”. That is just not good enough. There are lots of great amendments here, but we need some action from the Government. I hope that, when we get to the next stage, we will divide the House many times. Where we have got to at the moment is just not good enough.

In 1880 Henry Broadhurst was elected as the Member of Parliament for Stoke-upon-Trent. He was then elected as a Member of Parliament for Nottingham West. He raised the problems of leasehold in the other place. We are still talking about them today. He was elected in 1880, and we have still made only limited progress. It is about time we made some progress here. We want more transparency and we want the Government to deliver their commitments. We want commonhold, and we want it now.

My Lords, I agree fundamentally with the point made by the noble Baroness, Lady Taylor of Stevenage, and with what other noble Lords have said with regard to the desirability of a transition to commonhold. I say that because, apart from anything else, conventional leasehold has clearly got itself an extremely bad press. Like it or not, that is something we have to take account of. However, although it is poorly regarded among leaseholders, it happens to be the commercial preference and the model on which a great deal of leaseholder and freeholder value rests. We have to be a bit careful about that.

My interest here is very much about consumer protection. I do not want us to enter a brave new world in which the existing leasehold situation is seen as in any way second class. Comments are made about the evils of monetisation of the management process, but I think that is a slightly different issue. I do not see that as intrinsic in the tenure. I see that as an abuse, a lack of transparency and another area in which consumer protection has not operated.

If we transition to commonhold as seems to be now proposed, leaving existing leasehold and freehold situations in place—particularly the leasehold situation—it would create a market of commonholders and leaseholders. It would certainly add the interesting, if not potentially perilous, market dimension of an additional tenure. We have to consider whether we do the whole of it in one job lot—in other words, get all the pain done, convert all the existing leaseholds and deal with it that way—or whether we deal with it by a thousand cuts, in which case you may end up with part of the market sector not being liked by the finance houses, lenders, banks, insurers and people like that. In that case, which camp is it going to be? Is it going to be traditional leasehold that becomes eschewed in favour of commonhold or is commonhold to be one of those unfortunate experiments that nobody really wants to buy into, because it is seen as a novelty? We really have to be extremely careful about that, which is the main reason why I support the approach of the noble Baroness, Lady Taylor.

The second thing here is that whatever you have, commonhold or leasehold, does not of itself guarantee good management, which requires something different; I made that allusion in what I said previously. Whatever the tenure, the question of ongoing building safety remediation, which we know is floating around in the system, does not get resolved. I know that the noble Baroness, Lady Pinnock, is particularly concerned about that because of its pernicious and corrosive effect on people’s lives—their livelihoods, life chances and everything else in their own homes. Whether you are in commonhold or traditional leasehold, it does not disappear. The legal construct does not govern the physical effects of bad construction from some previous time by some person who, in nine cases out of 10, is not themselves party to the leasehold or freehold arrangement. It does not go away.

We also hear much about commonhold being nearer to outright home ownership and ought to be very careful about what we are trying to promise in that respect. Unit ownership and occupation within a larger block—a unit that may be one of dozens or hundreds—does not align perfectly with block ownership and control. It will never totally align, and the question of who does the management may not of itself answer that problem.

There is an essential conundrum here. If you have a residential unit and are in a collective with a lot of other people—with common parts and possibly with bits going forward that have larger elements of commercial property within them, up to 50%—it is about the management style and how that is seen to be objective for the building and the collective of its occupiers and tenants, rather than simply approached on the basis of saying, “We want to do what’s good for the residents and never mind the commercial element” or “We want to do what’s for the benefit of this particular group of residents and not for the others”.

I am grateful to the Minister for allowing a meeting earlier today in which I aired some of this, but one comes across situations in which parts of a building are older and less modern and the residents have a different set of objectives from those in the other parts of the building. I well remember that from a situation in Brighton that I had experience of, where part of a building had had a bomb dropped on it in the Second World War and been rebuilt after the war, but the other bit was inter-war. The residents of the two bits could not agree on the priorities for management and maintenance.

If we allow the residents themselves, the vox populi, to vote for whatever the immediate purpose is—the maximum number of goodies for its vote—that is not necessarily a stable thing. However, I would be the first to agree that residents have the far greater stake by value, often by floor area and by the fact they sleep there and are more vulnerable in that respect; they are more easily hurt by things going wrong. It is right that they should have a substantial say, but to make the decision-making in some way mutually exclusive is very difficult. Getting the balance right between particular groups of residents is not automatically a given. Another dimension is involved, which is not answered simply be altering the tenure. I feel the need to spell that out from my own experience of dealing with these things over many years.

That is not to say that commonhold is in any way wrong. I do not think leasehold is particularly good; I certainly do not subscribe to much of what is going on at the moment. However, I suggest we concentrate on the process of consumer protection. That is why the noble Baroness, Lady Taylor of Stevenage, has got it right. We need to get more feedback. I take the point made by the noble Baroness, Lady Fox, that we probably need a sunset date to force the political decision-making so that we know that we will get to an endpoint and will not still be talking about this in 10 years.

My Lords, I forgot to mention earlier how much I support the noble Lord, Lord Young of Cookham. I think the last draft Bill we had here was the Modern Slavery Act. There was a draft Bill and a Joint Committee of both Houses on it. The work of that committee ironed out all the wrinkles; we got a much better Act of Parliament, and it had a much easier passage through both Houses. The committee was able to look at the issues and deal with them, which was really important.

It would be lovely to hear the Minister say that we will have a draft Bill for commonhold. Again, that would really help us. We could have a Joint Committee of both Houses that could take evidence and work through all the problems. Then, when we got the proper Bill, we would get it much more smoothly and easily through this House and the other House.

I suspect we will not get that, but it is the way forward. Having more draft legislation enables us to sort things out. The Law Commission has worked on the two other Bills we need. We would benefit from having draft Bill committees. It would be much easier for the Government and for everybody to get stuff through and to deal with the problems we all want to solve.

My Lords, I thank the noble Baroness, Lady Pinnock, for introducing this group of amendments. It has been a fantastic, constructive debate, with some excellent points made across the Committee. I do not want to repeat the arguments, but I will speak particularly to the amendment in the name of my noble friend Lady Taylor of Stevenage, which many noble Lords have spoken about. I remind the Committee that this amendment would require the Government to set out a strategy for making commonhold the preferred alternative to leasehold, as recommended by the Law Commission in its report, Reinvigorating Commonhold: the Alternative to Leasehold Ownership.

The amendments in the name of the noble Lord, Lord Bailey of Paddington, and the noble Baroness, Lady Fox of Buckley, are both important. They all point towards a particular focus: that commonhold should be the future. We should help the move towards commonhold; it is overdue. The Government have had 14 years to deliver and have broken their promises to leaseholders, as mentioned by my noble friend Lord Kennedy of Southwark. Let me remind the Committee that an incoming Labour Government would be left to pick up the pieces should we have the opportunity to serve.

On these Benches, our commitment, as reiterated by my noble friend Lady Taylor of Stevenage, is to have comprehensive leasehold reform, and this has not changed. We will bring forward ambitious legislation to enact all the Law Commission’s remaining recommendations at the earliest opportunity if we are privileged enough to serve.

The important point made by my noble friend Lord Kennedy about not having a strategy is why, on these Benches, we have brought forward an amendment asking for a strategy as part of this Bill. It has been so long; commonhold was introduced in 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership. However, fewer than 20 commonhold developments have been established since the commonhold legislation came into force. Flats in England and Wales continue to be owned, almost inevitably, on a leasehold basis.

Unlike practice in most other countries across the world, flat owners in England and Wales continue to hold leasehold interests that will expire at some point in the future, and landlords make the key decisions about the management and costs of their buildings. Commonhold enables flats to be owned on a freehold basis, so that owners’ interests can last for ever and gives decision-making powers to home owners.

The Law Commission published its final report in July 2020, in which it makes numerous recommendations that seek to make commonhold not only a workable but a preferred form of home ownership to residential leasehold. Its recommendations include measures designed to make it easier for leaseholders to convert to common- hold and gain greater control over their properties; to enable commonhold to be used for larger, mixed-use developments that accommodate not only residential properties but shops, restaurants and leisure facilities; and to allow shared ownership leases to be included within commonhold. The recommendations would give owners a greater say in how the costs of running their commonhold are met, and ensure they have sufficient funds for future repairs and emergency work. They would provide owners with flexibility to change the commonhold’s rules, while improving the protections available to those affected by the change.

I ask the Government whether they disagree with the benefits I have just outlined? If they do not, why are they not doing this? That is the fundamental question from this debate that numerous noble Lords have alluded to. There was clearly some appetite for it a few years ago, so why are they not doing this? Have the Government changed their mind or are they just not brave enough to do it?

In May 2021, the Government had even established a Commonhold Council as a partnership of industry, leaseholders and government that would prepare home owners and the market for the widespread take-up of commonhold. I ask the Minister what has happened to that council. When did it last meet and how often does it meet?

It is widely accepted that, in terms of this Bill, we will not have commonhold brought in now. However, there is still much miscommunication around commonhold in the industry. There needs to be more education and an awareness campaign. As contributions have highlighted today, commonhold is so much easier. You do not have complex laws; you talk to one another and work problems and disputes out. You have meetings and laws are prescribed so that it is easy for people to know what to do at each step of the way. There are things that could be done with commonhold in this Bill to strengthen it and pave the way to commonhold happening en masse. The amendment in the name of my noble friend Lady Taylor would help the Government ensure that there is a strategy in this Bill and fulfil their manifesto promise, as mentioned previously. I commend the amendment in the name of my noble friend, and I look forward to hearing from the Minister.

My Lords, Amendment 13 concerns the conversion of existing leasehold buildings to commonhold. I thank the noble Baroness, Lady Pinnock, for raising this important subject. In future, the Government would like to see widespread use of commonhold for new and existing buildings, empowering consumers to fully own, control and manage their buildings. Reforming the route through which existing leaseholders in England and Wales can convert to commonhold will be a crucial stepping stone on this path to commonhold. The Government welcome the Law Commission’s excellent work on this subject, and continue to consider its recommendations in this space.

It is important to note that reform to conversion is not a simple task that can be achieved overnight; substantive legislative work will be needed to ensure that when leaseholders convert to commonhold, they will be left with the very best tools to manage their blocks effectively. Crucially, beyond lowering the threshold for conversion, new provisions will also be required with regard to the status of non-consenting leaseholders. This includes whether such non-consenting leaseholders should be compelled to change their leasehold interest to a commonhold interest against their wishes, or how workable in practice operating both leasehold and commonhold in a building may be, and the implications of such a model for the smooth management of the block.

The Government wish to extend the benefits of freehold ownership to more home owners. Reforms set out in the Bill will help leaseholders buy their freeholds and will ensure that all new houses are freehold from the outset, other than in exceptional circumstances. I reiterate that the Government remain committed to widespread take-up of commonhold for flats. As I have said before, we have been reviewing the Law Commission’s recommendations to reinvigorate commonhold as a workable alternative to leasehold, and will respond in due course; we will set out next steps in due course as well.

Amendment 14 seeks to ban the sale of leasehold for flats from January 2029. I thank the noble Baroness, Lady Fox, for her intention to encourage consumers towards a fairer system of ownership. To extend such a ban to flats will significantly impact the housing market. Any transition away from leasehold would need to be managed in a way that protects the legitimate property interests of both leaseholders and developers. For example, there are many new leasehold developments already at the planning stage, and to ban all leasehold homes without due consideration could impact the value and saleability of those developments.

Any such wholesale ban would also need to include consideration of the need for any exceptions. For example, home purchase plans rely on a lease, and we would need to consider how to allow aspiring home owners who are unable to acquire a mortgage for faith-based reasons to purchase a property. If we banned new leaseholds, this limitation could prohibit groups across England and Wales from getting on to the property ladder. More widely, it will be crucial to ensure that a robust and fully workable alternative to leasehold is in place before a ban is in force; otherwise, developers of flats will have nowhere to go. We believe that the alternative is a reformed commonhold tenure, the likes of which are found in countries all over the world. In short, extending a ban on new leasehold houses to include new leasehold flats, without a viable alternative in place, could damage the much-needed supply of new homes.

I thank the noble Lord, Lord Khan, for introducing Amendment 15 on behalf of the noble Baroness, Lady Taylor of Stevenage. The amendment would require the Government to set out their strategy on transitioning from leasehold to commonhold. As I hope I have made clear, the Government are committed to commonhold and are carefully considering the detail of the Law Commission’s proposals for reform, including conversion. This Bill prioritises the most significant measures that will help existing leaseholders now.

The noble Lord, Lord Bailey, did not speak to his Amendments 15A and 105A but I shall respond to them. Amendment 15A would require a 990-year lease term for new flats, and I thank him for the amendment. I understand the noble Lord’s desire to make sure that leaseholders have long-term security in their homes, and we share this aim. However, the Government are not able to accept the proposed new clause.

First, the provision would be a very blunt requirement, and there could be cases where this is genuinely not appropriate. For instance, a developer may not be the freeholder itself, and so may not have a long enough interest in the land to grant a 990-year lease. The Government would need to undertake detailed policy development work to make it a more workable proposal. Careful consideration would also need to be given to such a mandate to understand the impact on development viability and to ensure that planned developments do not stall. I hope my noble friend therefore agrees with me that it would not be appropriate to mandate a 990-year lease in all cases, and will agree to not move his amendment.

Amendment 105A would require the Government to publish a report setting out proposals for reforms to shared ownership, mandating a share of freehold or granting a 999-year lease as a default, and to set out plans for the widespread adoption of commonhold for all new flats by 2030. Under Amendment 105A, the Government would have six months to publish this report following Royal Assent to the Bill. To reiterate, 999 years may not work for all developments and may act to prevent new housing coming forward in some cases. I hope that the noble Lord will agree with my previous comments on the complexities of mandating lease lengths. Likewise, I noted issues with mandating the share of freehold under Amendment 12. I will spare noble Lords from listening to my comments in great detail again; none the less, I restate that the Government believe that commonhold has significant advantages over shared freehold.

The Government have heard the strong voices of those advocating for commonhold reform in the Bill. We thank them for their support in considering the future of flat ownership and welcome the views of Members across both Houses as we move forward with the Bill. I assure noble Lords that the Government are carefully considering next steps for commonhold, with a view towards its widespread use, especially for new flats. For shared ownership leaseholders, we have already enabled a right to a 990-year lease extension in the Bill. As for the amendment regarding adjusting shared ownership service charges for the proportion owned, we consider that that would be a general shared ownership regulation, and so would be outside the scope of the Bill.

On one or two issues have come up. First, I can say to the noble Lord, Lord Khan, that the Commonhold Council is still meeting—I think the noble Baroness, Lady Jones of Moulsecoomb, brought this up as well. It last met in September.

The noble Earl, Lord Lytton, is right, and what he said supports the issue that I have continually spoken about—complexities in the system and the fact that we need to get this right. It is a huge change to the housing market. The noble Earl also brought up the issue of building safety, but that will come in future groups.

The noble Lord, Lord Young of Cookham, supported by the noble Lord, Lord Kennedy, brought up the issue of draft Bills. I shall certainly take this back to the department, discuss it, and come back to noble Lords.

Lastly, the noble Earl, Lord Devon, asked whether these reforms would have an impact on the supply of new homes. We do not expect them to have any significant impact. Developers are already bringing properties to the market with 999-year leases, resident management companies in place and no ground rents payable, so these reforms will likely accelerate this trend. Investors and developers have previously adjusted their business model in response to reforms in the housing sector, including the Leasehold Reform (Ground Rent) Act 2022, so we are not expecting any significant changes in that regard.

With all these assurances in mind, I ask the noble Baroness kindly to withdraw her amendment.

My Lords, I forgot to declare my interest as a leaseholder. I feel as though I might have to declare an interest to the noble Earl, Lord Devon, as a serf, or at least somebody who is rather pleased that democracy has allowed me to move from that particular interest.

In her response, the Minister said that all this change needs to be managed. In response to my amendment, she said there should not be a ban without due consideration. Fine, but this was a sunset clause in five years; it is hardly rushing it. The endless contributions that have been made suggest that this has been talked about for a very long time. The noble Lord, Lord Kennedy, made the point that we can all go back. This sort of response, saying that we need to go slowly and that it needs to be managed, makes it seem a little unclear as to what the Government are responding to. Nobody here is exactly rushing through.

Also, can I have some clarification on the idea of a danger to the supply of new homes? I was glad that the Minister responded to the noble Earl, Lord Devon, saying that there does not appear to be any evidence of that, but she said we had to be careful about a ban without due consideration. She herself said that it could damage the supply of new homes, and to be honest I think that is an unjustified threat—although not by the Minister. I keep hearing this: “If we rush this through, nobody will ever build a flat again. We have a housing crisis; what are we going to do?” I know the developers are saying that, but I was interested in the fact that Lendlease is one of those saying that this may disrupt building supply, but actually it seems to be building away and thriving, with massive developments in Australia, where it is from and where, indeed, there is a form of commonhold of which Lendlease was supportive. It is not going to stop the development of houses. We can build, build, build—just not build, build, build leaseholds, surely.

My response to the noble Earl, Lord Devon, was a response on commonhold. My response to the noble Baroness, Lady Fox, was more about the fact that her amendment would just ban the sale of leasehold, which I suggest would give an uncertainty to the market.

Maybe my noble friend the Minister can give us some detail on the Government’s new-found support for commonhold. It would be easier not to move my amendment if I had some idea of the progress of the Government’s thinking, the timetable and how they intend to increase the adoption of commonhold, because that would make my amendment largely unnecessary.

I thank my noble friend for that. As I have said, we are working on it, we are working on further changes and we will come back in due course.

If I can just probe the Minister on the answer she gave me, that the Commonhold Council met in September, can I just confirm that she is chairing that Commonhold Council? The government website still has the noble Lord, Lord Greenhalgh. As the Commonhold Council advises the Government, what advice did it give in relation to the plan for commonhold? Surely it was not, “Take your time”, was it?

Yes. The noble Lord knows, and I have said it enough times at this Dispatch Box, that the Government fully support commonhold. It is a matter of getting through the complexities and ensuring that it is delivered in a safe, secure way for the future.

It is good to hear that they have a strategy; maybe the Minister can explain to the Committee what the strategy is. All I see at the moment is that there is a lot of support for commonhold—everyone is committed to it and wants to bring it in in due course—but I would like to see some sort of timeline. When are we going to get it? They will have had this report from the Law Commission for four years in July. Where is the plan? If they had a plan they could set out for the Committee, I am sure they would get a lot of support from us here, but the worry is that we will be sitting here in another four years. What is the plan from the Government?

I am sorry, but I have made it very clear that the Government are fully in support. I am trying to remember whether it was 219 or 120, but large numbers of amendments were required to be put into place to ensure that, while we have commonhold in this country now, it can be delivered across all our leasehold flats. We do not have the time on this Bill to do that amount of legal work, and that is why we are not promising it at present, but we want to get as far along that journey to commonhold as we possibly can within the Bill.

But we are not, are we? That is the whole point. We are not getting anywhere, just making commitments and promises with no timescale, no plan, nothing. That is the problem and why we are getting so frustrated here. They have had the Law Commission report for four years. What have they been doing for the last four years?

The noble Baroness will obviously know this really well, then: how many more years do we need before we get a Bill to deliver this?

My Lords, the purpose of Amendment 13 in my name was to encourage a debate on commonhold and the route to achieving it, and in that it has been successful. I am pleased about that and thank all noble Lords for their involvement. It has been a long time since the first legislative proposal was made to abolish leasehold. I think it was in the Liberal Government of 1906, so we are going back a long way.

I do not think that that was a legislative proposal—I was very careful in the words I used. What this debate has achieved is that it is very clear across the Committee that there is overwhelming support for the move to commonhold. That is very positive. The next achievement is that it has brought forward three different ways, or perhaps four, in which the Government can move. One is a draft Bill, which seems to me to be a very interesting proposal and one that again I think would get support across the House, because the move to commonhold is complex. I and everybody else who has spoken accept that, so let us find a way of working together to achieve that common end.

The second proposal was a “Let’s get something done” type of proposal for a sunset clause. If nothing else happens, let us adopt that. The third proposal, from the noble Baroness, Lady Taylor of Stevenage, was similar to a draft Bill: to get the Government to agree a draft strategy. Unfortunately, the Minister used the phrase “in due course” a number of times. The trouble with “in due course” is that the due course can go on for a very long time, as it has already. Some of us are concerned to enable all existing leaseholders to achieve commonhold and be part of home ownership. The party opposite always talks about that, so you would think it is in its interest to push it. That is why it is very disappointing to hear the Minister say “in due course” and, “We are considering the recommendations of the Law Commission”, which was four years ago now.

Finally, we have heard from various Members on the Labour Benches that, if they ever have the privilege to serve—that is the phrase they are using—this will happen quickly. I look forward to maybe 2025 when we might see whether the Minister will bring forward a proposal for a draft Bill on commonhold or whether somebody from the Labour Benches will do so, in which case we will make progress. We on these Benches will hold both parties to account if they fail to do that at the earliest possible moment. I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

Amendments 14 to 15B not moved.

Clause 26 agreed.

Clause 27: Removal of restrictions on repeated enfranchisement and extension claims

Amendment 16

Moved by

16: Clause 27, page 18, line 8, at end insert—

“(ca) in section 23 (agreements excluding or modifying rights of tenant), in subsection (2)(b), omit the words from “or any provision” to “or any part of it”;”Member's explanatory statement

This amendment would prevent a landlord and tenant agreeing to a restriction on the tenant making a repeated enfranchisement or extension claim.

My Lords, to be clear, the Bill already removes the automatic 12-month bar on leaseholders that stops them making another enfranchisement claim, should an earlier claim have been withdrawn. My Amendment 16 supplements this by removing the right for a voluntary 12-month agreement to be made between parties to restrict further enfranchisement claims for a leasehold house. Removing the ability for a voluntary 12-month restriction makes sure leaseholders are not put under undue pressure to withhold their claims. This is an important protection for leaseholders and makes it clear that they can make fresh claims as needed.

I look forward to hearing from noble Lords as to how they think that our enfranchisement reforms can be further improved. I beg to move.

My Lords, our Amendment 17 would enable the Secretary of State—or, in Wales, Welsh Ministers—to change the description of premises that are excluded from collective enfranchisement rights. Such a change would be subject to the affirmative resolution procedure. I thank the noble Lord, Lord Thurlow, for all his time in discussing the Bill with me, and I acknowledge his expertise in this area.

Clause 28, which our amendment targets, makes changes to the non-residential limit for collective enfranchisement claims. At present, Section 4(1) of the 1993 Act excludes from the right to enfranchise buildings in which 25 % or more of the internal floor area, excluding the common parts, can be occupied or are intended to be occupied for non-residential use. The clause increases that non-residential use percentage to 50%. We welcome the change, which enacts recommendation 38 of the Law Commission’s final report on leasehold enfranchisement and was supported by the National Leasehold Campaign, among others.

Of course, if the purpose of the non-residential limit is to confine enfranchisement to predominantly residential blocks, the Law Commission determined that the existing 25% limit does not achieve that purpose. There is a significant amount of evidence that, instead, it regularly prevents leaseholders from undertaking collective freehold acquisitions because a sizeable proportion of buildings fall slightly above it and that 25% is a significant bar to the ability of leaseholders to undertake a collective freehold acquisition. The Law Commission further argued that

“the arbitrary nature of the limit makes the bar to enfranchisement a source of considerable frustration for many leaseholders”.

We accept that there is no easy or non-arbitrary way in which to determine where that bar should be. However, it is the stated intention of the Bill to bring as many leaseholders as possible into enfranchisement, and it is therefore questionable as to whether limits under 50% would feel inherently fair. We would hope that a 50% non-residential limit would mean that the number of genuine cases excluded would be small and would remove the opportunity for developers to play the system, because only a genuine split between commercial and residential would apply.

Our main concern on this clause is that there is no flexibility built into it, and we are keen to probe whether a review after a period of time to determine whether the non-residential policy as set out is working in practice could be undertaken, or another mechanism used, so that changes for the limit in respect of collective enfranchisement rights do not require primary legislation but can be enacted through regulations. Enacting small but necessary changes that may occur in relation to the Government’s proposed limit—for example, whether that relates to individual cases that fall just above the limit, or a change in the criteria on using internal floor area to determine the rights, or changing altogether the criteria on which the limit is based—may need alternative mechanisms to resorting to future primary legislation. That is the purpose of our amendment.

I will comment briefly on the other amendments in this group. We understand the reasons for the amendments of the noble Lords, Lord Sandhurst and Lord Thurlow, and look forward to hearing the comments of the Minister on those amendments. In relation to the Question on whether the clause should stand part of the Bill, to be put by the right reverend Prelate the Bishop of Manchester, we understand the Church position as a landholder, but we feel it would go against the spirit of increasing the enfranchisement through the Bill to retain the 25% limit.

My Lords, I shall speak to Amendment 17A. I am sorry that I was unable to speak at Second Reading. I should also say that the noble Baroness, Lady Deech, who is unavoidably detained, has added her name to that amendment. We therefore have her support as well. Amendment 17A is directed at Clause 28 on mixed-use premises with substantial proportions of business and residential tenants. Currently, collective enfranchisement and lease renewal is not permitted where more than 25% of the premises are business premises. That figure is going to be changed to 50%, thereby making it easier for residential tenants to go down the collective enfranchisement route.

That will introduce management issues—I do not say that they are necessarily problems, but they are certainly management issues. The Bill proposes that, if 50% of the occupants are residential, that will be enough. That will mean that, unless more than half of the building is occupied by business premises, all residential tenants will be entitled to be enfranchised. That will create issues for management and, in particular, problems where some of those residential tenants are overseas companies. We know that there are increasing numbers of those, particularly in London.

Mixed-use buildings pose greater management challenges than purely residential ones. Freeholders need to be responsive and active property managers. Business tenants require swift responses so that they can manage their businesses. If they want changes to the premises and so on, they need their landlord’s consent so that they can go ahead. If there are difficulties with obtaining that consent because, for example, some—or possibly a large number—of the residential tenants are overseas companies, then one can see how unattractive such premises will become as business premises for the business occupiers.

Issues already arise where enfranchised leaseholders are on a corporate basis, where they are offshore companies and not British domestic companies. Many leaseholders have encountered difficulties seeking to hold overseas companies to account for building remediation works. It can be very challenging to identify the ultimate decision-maker and to secure consent to even modest alterations. It should be noted that Amendment 17A would not change the rights of individual lease extensions for such overseas owners. They would retain those, but they would not be allowed to go down the collective enfranchisement route.

In short, I suggest that non-UK registered companies should be excluded from all mixed-use collective enfranchisement claims. This will leave intact the Government’s objective of benefiting genuine individual residential owner-occupiers. It will address issues arising due to the opaque ownership of UK properties, it will encourage greater transparency, and it will mitigate against what are called “zombie freeholders”—non-UK companies that become the freeholder of complex, mixed-use buildings and stymie the day-to-day management of the non-residential elements of a building because they are unresponsive and challenging for the tenants to contact.

It is important to remember in this particular context that leasehold properties owned by non-UK registered companies are concentrated in prime properties in central London. My amendment would provide protections for those properties and the businesses that occupy them, and for streetscapes and high streets of particular national importance, by securing long-term single ownership which is not fractured and does not deteriorate. As part of the reform, the Bill should mitigate this by introducing the additional requirement that, to qualify as a leaseholder entitled to go down the collective enfranchisement route, the property cannot be held by a non-UK registered company or any type of company structure.

My Lords, I will speak in support of my right reverend friend the Bishop of Manchester, who is unable to be in his place today and who has asked me to speak to his opposition that Clause 28 stand part of the Bill. This is linked to a similar stand-part debate, in the name of my right reverend friend, relating to Clause 47, to be debated later in Committee.

I declare my interest as a beneficiary, as is my diocese, of the Church Commissioners. I thank the Minister for her engagement with the charities affected by the legislation so far: the Church Commissioners, John Lyon’s Charity, Portal Trust, Campden Charities, Merchant Taylors’ Boone’s Charity, Dulwich Estate and the London Diocesan Fund. I hope she will continue to engage with my right reverend friend to find an amicable solution.

The Church Commissioners for England are the freeholders of the Hyde Park Estate. If we are looking back a long way, the Church can look back longer than most. The Church has had a long relationship with that part of London, starting in 1550 when the Bishop of London was granted the manor. The first leases were granted in 1795, and the Ecclesiastical Commissioners became responsible for the estate in 1868. Like the other charities mentioned, the Church Commissioners have long relationships with their estate. The money generated from the estate beyond the local is used for the betterment of the whole of our society, by the levelling up of communities and the lowest income parishes across the country, including in the diocese of Derby.

Like the other charity freeholders of large estates, the Church Commissioners manage the whole area, focusing not only on the residential properties themselves but on the whole environment, for those who live in, work on and visit the area. Their freehold ownership includes approximately 100 commercial units on the estate, where independent cafés, specialist boutiques and restaurants are mixed alongside amenities for local residents. This by no means affects the Church Commissioners alone; other large freeholders across London and beyond use their mixed freeholdings to ensure that areas have what local residents need, such as a dry cleaners, a pub, a hardware store—I could go on.

I thank the Minister for her letter to my right reverend friend the Bishop of Manchester, received today. However, concerns remain that Clause 28 threatens the ability of freeholders in large estate areas to ensure mixed areas that have all the amenities that people need. If the threshold for collective enfranchisement and the right to manage claims is lowered so that more mixed blocks can initiate a claim, there is a risk of the degeneration of these areas. There is no guarantee that newly enfranchised blocks will have the wherewithal or even the desire to maintain the make-up of the estate area. Leaseholders may not even live permanently in the area, may be foreign-owned companies or may have no active stake in the community. What need would these companies or corporations have to ensure the maintenance of a community? My right reverend friend the Bishop of Manchester said at Second Reading of this Bill that:

“We would lose all the shops that really matter to those who live perhaps not just in that block, but”—[Official Report, 27/3/24; col. 737.]

in the locality.

The amendment of the noble Lord, Lord Thurlow, which would mean that right to manage and collective enfranchisement rule changes would apply only where 50% of the leaseholders are permanent residents in a block, would certainly be a step in the right direction. At least there would be a guarantee that those managing mixed blocks would have an active stake in maintaining community resources, including shops. Could the Minister tell us whether the Government could make proposals to ensure that great estate areas, such as the Hyde Park Estate and others, are not adversely affected? Nobody wants to see local shops, amenities and community hubs closing as an unintended consequence of the Bill.

My Lords, I turn to my Amendment 18 in this group. I begin by declaring my interests as both the owner of two buy-to-let investment flats and the occupier of a flat, all on leases. I stand to benefit under the Bill in both situations, which is quite patently wrong.

I thank the right reverend Prelate the Bishop of Derby for articulating my amendment with greater ability than I can. I want to turn specifically to mixed-use buildings and the proposal to move from a 25% threshold for enfranchisement to 50%, and build on the comments of the noble Lord, Lord Sandhurst. Mine is a straightforward proposal: simply that lessees who are not occupiers living there as their primary residence should not benefit from the great wealth transfer that is going to take place through the enfranchisement process. It cannot be an intended consequence of the Bill.

My amendment requires that at least 50% of leaseholders should satisfy the residence occupancy condition for any collective enfranchisement to apply. I remind the Committee that I am thinking of mixed-use buildings. A very complex management expertise is required in looking after mixed-use buildings; the skills are not the same for commercial property as for residential property, and the scope for mistakes and delay is huge. The potential to improve and curate an environment through single ownership of an expansive area has been very clearly described. To expect such behaviour to continue responsibly is almost impossible under the Bill as it stands.

We have also heard that, in London and the south-east, some 50% of tenants are not residents but foreign nationals living elsewhere, with ownership registered abroad. Are they taxpayers? This group often do not want to be identified. They shroud their property in ownership interests in offshore companies, as we have heard. They are very slow to respond, doing so from time to time, let alone to offer up money when required. If the Government do not agree that 50% of leaseholders in a block should be permanent residents, can I have an informed estimate on how many billions of pounds is expected to be paid in compensation to this cohort of wealthy foreign nationals, should they pursue this new enfranchisement entitlement?

My Lords, I declare an interest as a long-standing leaseholder of some 30 years. I have been a leaseholder in apartment blocks in London, Kent and Somerset, and a right-to-manage director in two apartment blocks.

I support His Majesty’s Government’s Clause 28, which seeks to raise the non- residential limit on collective enfranchisement claims from 25% to 50%, as mentioned by the noble Baroness, Lady Taylor of Stevenage. I consequentially oppose the proposal of the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Moylan, to vote against Clause 28.

Your Lordships have heard how giving more say to leaseholders in mixed blocks of residential and commercial units would be a bad idea and negatively impact on investment and the effective running of these blocks. It has been said that reform would only help some foreign leaseholders and investors and would result in fewer homes being built. That is far from the case. I have lived in two blocks of mixed developments: one was controlled by a residents’ right-to-manage company, with a NatWest bank in the basement, and another contained a number of commercial units and was 100% controlled by the freeholder. I can say categorically that the right-to-manage block was run better and with cheaper service charges. The freeholder-run block exploited the residents, cross-subsidising the commercial units at their expense and giving them no effective say over how the block was run. I point out to the noble Earl, Lord Lytton, that the difference was that the RTM block was actually run by the residents, who were managing their own money, whereas the freeholder block was run by a managing company and the freeholders were profligate with the use of residents’ cash.

Let us be frank: maintaining the 25% cap is about the freeholders retaining control and not about fairness or efficiency. If anyone lives or invests in a flat in a block, they should have a say over how it is run. For that reason, I oppose the amendments in the names of the noble Lords, Lord Thurlow and Lord Sandhurst, which would restrict enfranchisement and further strengthen the position of freeholders by limiting the number of leaseholders who can vote on and manage their own blocks of residents. RTM directors are perfectly capable of managing mixed blocks of developments.

Freeholders are keen to take leaseholders’ money but do not want to relinquish control. That can result in a situation where leaseholders represent 95% to 99% of the investment in a building but have no control. In contrast, the freeholder, who has an investment of just 1% to 5%, is deemed to own the building and run it for their profit, while appointing a property management company that proceeds to rip off the leaseholders via excessive service charges and insurance commissions. As I said, because it is not the freeholder’s money, they do not care—that is the difference. Any leaseholder’s attempt to challenge that is fraught with risk and a potentially ruinous cost, so this aspect also needs reform.

I am aware of a major lobbying effort by the great estates to protect their feudal privileges built up over hundreds of years—I was invited to dinner by one, but I did not go. Following the contribution of the right reverend Prelate the Bishop of Derby, I refer to the proposal in the name of the right reverend Prelate the Bishop of Manchester, who was refreshingly frank at Second Reading. He said that the system could be described as “feudal” and that some of the Church property he dealt with dated back to the 11th century. The property portfolio of the Church of England is valued at £2 billion—it is a business. It has assets of at least £6.7 billion. As we all know, the Church of England does a lot of work with charities and works with the poor, but some have already questioned whether its 105,000 acres of land could be better used, in part, to provide the social housing so badly needed by the needy and homeless.

With the great estates, the story is also about retaining their wealth, not about losing it. I have no problem with that, I just do not think that it should be at the expense of leaseholders. They need to move with the times; the old ways of fleecing leaseholders are increasingly untenable.

I was thrown by the right reverend Prelate the Bishop of Manchester not being here, as we were going to talk later about marriage value, but that is a different part of the debate.

We in Parliament have a greater duty than just to the freeholders and their interests: we have a duty to the over 5 million leaseholders to reform the fleecehold system and, preferably, abolish it altogether. We heard again at Second Reading how some freeholders seek to hide behind property rights and the European Convention on Human Rights, but leaseholders also have rights, which are being deliberately supressed.

On ground rents—again, as mentioned at Second Reading—the Competition and Markets Authority said that there was no legal or commercial reason to justify ground rents. I have just had a bill for £300 for my ground rent, for which I receive absolutely no service. Everyone involved knows full well that ground rents provide no service, are purely rent-seeking and are a legalised scam. If pension funds are invested in ground rents, as some are, they should find a better use for their money; for example, by investing in British companies. Our pension companies invest less in our own country’s companies and stock market than any of their international competitors—shame on them.

My Lords, I will speak to this group, as the noble Lord, Lord Truscott, mentioned my name, although I have not yet spoken. He represents one viewpoint and the noble Lords, Lord Thurlow and Lord Sandhurst, and the right reverend Prelate the Bishop of Manchester represent another. They are often portrayed as being mutually exclusive but, in property terms, that is not necessarily the case. Clearly, there are perfectly good managers who look after not only their residential tenants but their commercial tenants, and there are some are rotten managers. Some are good corporates while others are rotten—some are good resident management operations while others are pretty poor—so it is very difficult to make a standard rule for them all.

If one looks at the large urban estates across London, it is evident that there is a clear sense of purpose in trying to preserve the value, appearance and general amenity represented by the running of that estate. That inevitably comes at a cost, but I hope that that helps not only the commercial activities but the amenity of the residents.

Let us look at what happens if things start going wrong and getting fragmented. First, there becomes a distinction, if one is not very careful, between the purposes of long-term management in the view of the residents and the purposes of long-term management in the view of the commercial operator or landlord. Under the purposes of this Bill, if the enfranchisement of a 50% commercial ownership block goes ahead, there will be an enforced leaseback to the original freehold owner. Straightaway, you have an enforced leaseholder, whose business model was not quite hypothecated on that basis, who is none the less obliged to take it on but does not need to have the primary amenity and visual appeal functions that might be relevant to the residents.

I have seen that happen in historic high streets, where ownership has become fragmented in this way. We tend to find that when a shop becomes vacant, and if there are difficulties in the letting market, it will be let to a charity shop, a slot machine operator, a tanning shop, or some other type of operator, because the person who has it needs to move it on quickly. There is not that fat on the bone associated with having the larger estate, nor is there the fat on the bone to take on some assignee, as I have had to deal with in the past, who really runs a rather low-grade sort of business but is well funded. Therefore, you have to work out whether you can afford to fight an appeal, or fight a case, on an assignment of a lease in order to see off that person and their particular trade. If you cannot, there is a general deterioration of the area. It might be a fast-food takeaway that opens late at night; the police might be around every now and again; there might be people congregating there because it is late at night, and that sort of thing affects residents. If one is not careful, things like emptying bins and delivery of incoming goods to a retail operation can start being operated at times that are not that helpful to the interest of residents, who once might have been part of this overall concern. I can see both sides of this, and we have to be careful not to make standard rules about things where the decision is much more nuanced and difficult. It really depends on where one is starting from, the circumstances, and everything else.

As I said earlier, my interest is in consumer protection. I do not want to see degraded environments; I want to see environments that are lively and looked after and where everybody has confidence in them being managed. Fragmented management very seldom achieves that. The issue is about management being a slightly different issue to ownership. It is a big issue that we need to address, because it will not be dealt with by a local authority. That has no function there. Beyond the planning functions of a change of use, or licensing for some premises that needs it, it has very few powers of control. If overarching control is needed, and there may be an argument that ecclesiastical, heritage or possibly other environments do need it, we should very careful that we are not chucking out that baby with the bathwater and ending up with a slow process of attrition that suits nobody and ends up degrading the value not only of the freeholders, who can look after themselves by and large, but of the area and its appeal, which is ultimately to the detriment of residents. I do not want to go down that road without being clear about what we are doing, and making sure that there is some way we can pick up on processes of deterioration before they take root.

My Lords, this is my first intervention today—I spoke at Second Reading. I regret that this is yet another Bill that was heralded with robust rhetoric from the Secretary of State which has now come face to face with reality. I regret that some of that reality is from those with vested interests and therefore we are getting a watered-down Bill. We certainly believe on these Benches that it is a missed opportunity.

I turn to the group of amendments on enfranchisement. We on these Benches support the Government in Amendment 16. We need to see as many restrictions as possible on leaseholders’ ability to enfranchise removed by the Bill. After all, they have bought a home and should be able to extend their lease and buy their freeholds in a way that is easy and affordable, to use the Government’s own words.

It is perhaps no surprise that we also support Amendment 17 in the name of the noble Baroness, Lady Taylor, in so far as it would allow the Secretary of State to give more leaseholders rights to collective enfranchisement, and we note the detail of the noble Baroness’s reasons. However, the power cannot and must not be used to narrow the qualifying criteria or to exclude more leaseholders from freehold purchase. We are pleased that it would be subject to the affirmative resolution procedure, as this includes public consultation and the involvement of both Houses.

However, we know that cohorts of leaseholders will still not even qualify to buy their freehold under the Bill. For example, MPs in the Public Bill Committee in January heard from experts and campaigners that there really is a problem with leaseholders in mixed-use buildings—from our debate today, I would say we have a problem with mixed-use buildings that needs to be sorted out. The Government are admirably using the Bill to try to liberate leaseholders in mixed-use blocks by, as we have said, moving the 25% rule on non-residential premises to 50% and introducing mandatory leasebacks on commercial space to slash the cost of collective enfranchisement, but—and I find this strange—they have not lifted the restrictive regulations in the 1993 Act that mean that shared services, such as a plant room, would disqualify leaseholders from buying out their freehold. Apparently, there is even a regulation stipulating that the mere existence of pipes, cables or other fixed installations connecting residential and commercial premises in a mixed-use building would block leaseholders from buying their freedom. That means that many leaseholders who would otherwise stand to benefit from the changes on mixed use will be blocked from securing collective enfranchisement and being in control of their buildings. I ask the Minister whether we can discuss this aspect before Report.

Turning to what I will call the three “tricky” amendments, I noted that the noble Baroness, Lady Taylor, wisely hedged her bets on these. I suspect that it is because, like me, she knows that the intentions of the noble Lords speaking on them are based on good experience and a genuine wish to see the measures agreed, but she worries whether, in fact, they are just another means of putting commercial interests before residential interests and not getting that balance right.

Instinctively, like the noble Lord, Lord Truscott—I was relieved when he made his comments—we oppose these three amendments, because in our view they seek to row back. But I have listened attentively to what has been said and I am completely changing what I was going to say: I genuinely believe that there are some serious areas that need looking at. There is much experience in the Committee, but I am concerned that we have been subject to special pleadings.

In particular, on the pleading from the noble Lord, Lord Sandhurst, with regard to overseas owners, I do not see why we should be bending over backwards to placate overseas owners who are absent, will not do their duty and are hard to contact—and lots of other phrases that all noble Lords have used. I do not see why we should pander to that. Surely we should try to solve the problem to bring them into the fold. Phrases such as “management difficulties” were used, but we should be able to solve them. Clearly, there are issues.

It is worth saying that the rest of the world manages just fine under resident-controlled commonhold systems, with some truly remarkable mixed-use developments including cinemas, shopping centres, train stations and all sorts of facilities and infrastructure. They are not asking to adopt our leasehold arrangement.

Although I accept from the noble Lords who spoke in the debate that there are issues that need to be probed further, spoken about and listened to, perhaps in a round-table discussion before we get to Report, our instincts are that these are shoring up the interests of commercial leaseholders because, let us face it, freeholders are where the money is.

My Lords, the descriptions that have been put forward—the right reverend Prelate described these thriving communities, which sounded idyllic, and the noble Earl, Lord Lytton, talked about making sure that we understood that there might be some bad players but that there are also some very enlightened players—made it sound as though this is really just a question of having the right people in charge, whereas I think it is a systemic problem.

One of the reasons why I am anxious about this is that although it is always nicer to have friendly, non-rip-off freeholders—that is genuinely a positive thing—we should not be grateful that we are not being ripped off in the homes that we live in. The system problem is that people lack autonomy and control over where they live and their destiny. I just throw in that a successful community depends on people retaining their autonomy rather than being grateful that they are being looked after.

What the noble Baroness, Lady Thornhill, pointed out is incredibly important; the noble Lord, Lord Truscott, also made an excellent speech laying some of this out. There are thriving communities with mixed-use abilities all over the world that do not use leasehold. We are now getting to a point where we are saying, “If we don’t have leasehold here, we’ll never have a local swimming pool and there will be no community centres. What will happen to all the shops?” That is mythological. Although I agree that one needs to look at the complexities, and I for one am actually all for nuance in relation to this and not just blunderbussing away, we should also stop myth-building about the wonders of the system, when in fact the reason why we want enfranchisement in the first place is that when our citizens buy a house they should have control over it. It is their home, and they can work collectively on building the community. At the moment they are denied that, which is why we are trying to tackle the problem of leasehold in the first instance.

My Lords, I thank all noble Lords for their contributions, and I start by thanking especially the noble Baroness, Lady Taylor of Stevenage, for Amendment 17, which seeks to amend the description of premises that are excluded from collective enfranchisement rights, where leaseholders would otherwise qualify. I know the amendment is well intentioned, with the aim that there is flexibility to amend the description of exceptions without new primary legislation. The amendment introduces a broad power for Ministers to change fundamental elements of the structure of the regime, which are substantive areas of policy. The Government are already making changes to primary legislation by increasing the non-residential limit from 25% to 50%, following extensive consultation, which is right and proper. The powers in this amendment would affect the very core of the regime and how it is structured rather than amending mere procedural changes.

To make sure that stakeholders have certainty as to how the law will work in practice, changes to the fundamental structure of the statutory regime should be clear and stable. Although the intention behind the amendment is noble, the Government are not able to accept it as it is not proportionate or reasonable for the proper functioning of the regime. It would be a sweeping power to change the fundamental structure of the enfranchisement regime after it has been approved by Parliament.

This amendment would introduce uncertainty into the new system, meaning that both leaseholders and landlords would need to second-guess whether changes may be made at relatively short notice, introducing volatility to the regime. This could potentially lead to undesirable outcomes, such as undermining confidence in long-term investment decisions for mixed use-premises, or lead to irregular design of floor-space in anticipation of future changes. I want to make it clear that the Law Commission has spent years considering qualifying criteria and assessed different options in its consultation process before putting forward its recommendations to increase the non-residential threshold to 50%.

The amendment could also remove rights of leaseholders or landlords in a disproportionate way and create unnecessary uncertainty and divergence likely to complicate the overall regime, with consequential effects on the behaviour of different stakeholders in different ways. Therefore, I hope that I have convinced the noble Baroness that the amendment is not proportionate, and that it is not moved.

I thank my noble friend Lord Sandhurst for Amendment 17A, which would exclude long leases held by overseas companies from being qualifying tenants for the purpose of collective enfranchisement. The Government’s aim is to improve leasehold as a tenure and address the historic imbalance of power between freeholders and leaseholders. The Bill does not confer different rights on leaseholders by how their leases are held. The Government do not think that implementing such a definition, in respect of which leaseholders have rights and which do not, is workable or desirable.

Amending the definition of a qualifying tenant for collective enfranchisement will make it harder for other leaseholders in a building to meet the numbers required to enfranchise, should they so wish. Attempting to restrict some leaseholders may well disenfranchise others, meaning that many leaseholders up and down the country could lose the opportunity to exercise their rights. Furthermore, it would remove the existing rights of some leaseholders and complicate the system overall, contrary to the aims of the Government.

I understand that the intention of the amendment may be to safeguard against circumstances in which non-resident or overseas companies do not take an active interest in the management of a building or are slow to respond. However, we expect that most multi-occupancy buildings will be managed by professional management companies on behalf of freeholders, as they are now.

I thank my noble friend again for the amendment, but I cannot accept it because it runs contrary to the aims of the Government and may restrict leaseholders’ rights. I therefore hope that he is content not to move his amendment.

I thank the right reverend Prelate the Bishop of Derby for speaking on behalf of the right reverend Prelate the Bishop of Manchester, with whom I have had a number of meetings about this issue. I am happy if the right reverend Prelate takes back the fact that I will continue that discussion if the right reverend Prelate the Bishop of Manchester so wishes.

I thank my noble friend Lord Moylan for his clause stand part notice. Clause 28 increases the non-residential limit for the collective enfranchisement claims to proceed in mixed-use buildings from 25% to 50%. The clause implements a Law Commission recommendation that has been subject to comprehensive consultation by the Law Commission and the department. I note the right reverend Prelate’s and my noble friend’s concerns, which have been raised through various consultations with freeholders and landlords.

The Bill’s impact assessment considers the impact of increasing the non-residential limit for collective enfranchisement claims, including the potential impact on freeholders, high streets and businesses. The increase to 50% strikes a fair and proportionate balance and will ensure that leaseholders are not unfairly prevented from claiming the right to manage in respect to buildings that are majority residential. It protects the freeholders and commercial leaseholders in buildings that are majority commercial. Freeholders can also protect their commercial interests by taking a leaseback of the commercial unit, securing their interest with a 999-year leaseback at a peppercorn rent.

We recognise the importance of the responsibility of building management and, as I have said, would expect that those who exercise their right to take over their buildings will employ professional managing agents—ensuring that the building is managed with the appropriate expertise, as we have heard from the noble Lord, Lord Truscott, about the issues that he is aware of.

The Government consider that this increase is proportionate, and I ask the right reverend Prelate and my noble friend to support Clause 28 standing part of the Bill.

I thank the noble Lord, Lord Thurlow, for Amendment 18, which seeks to apply a residency test to the collective enfranchisement claims in buildings with more than 25% non-residential floorspace. As we have discussed, Clause 28 amends the Leasehold Reform, Housing and Urban Development Act 1993 to increase the non-residential limit for collective enfranchisement claims from 25% to 50%.

Clause 28 implements a Law Commission recommendation that seeks to broaden access to collective enfranchisement for leaseholders living in mixed-use buildings where the non-residential elements constitute up to 50% of the floorspace. The existing qualifying criteria require leaseholders representing at least 50% of the flats in a building to participate in a collective enfranchisement claim. When combined with these existing criteria, the noble Lord’s amendment would allow claims only in mixed-use buildings with more than 25% non-residential floorspace, where at least 25% of the flats are owner-occupied.

For leaseholders in mixed-use buildings where less than 25% of the flats are owner-occupied but more than 25% of the floorspace is non-residential, this new clause would have the effect of removing all the benefit of Clause 28. This would leave leaseholders unable to collectively buy the freehold of their building because of how their neighbours chose to use their properties. It would also complicate all claims in buildings with over 25% non-residential floorspace, as participating leaseholders would be required to demonstrate that they are owner-occupiers. This could lead to claims taking longer and costing more, and would provide freeholders with another opportunity to frustrate leaseholders’ right to buy their freehold. This is counter to the Government’s aims in this area to broaden access to collective freehold ownership for all leaseholders, and to simplify, not complicate, the system leaseholders use to do so.

The noble Lord, Lord Thurlow, asked why we were not introducing a residency test. The Government are committed to broadening access to collective enfranchisement and making it cheaper and easier for leaseholders to buy their freehold. As I have said, any residency test would complicate this system. The noble Lord also asked about compensation. Our reforms to enfranchisement valuation ensure that sufficient compensation is paid to landlords to reflect their legitimate property interests. For these reasons, I ask the noble Lord to not move his amendment, and move my own.

Amendment 16 agreed.

Clause 27, as amended, agreed.

Clause 28: Change of non-residential limit on collective enfranchisement claims

Amendments 17 and 17A not moved.

Clause 28 agreed.

Amendment 18 not moved.

Clause 29 agreed.

Schedule 3: Eligibility for enfranchisement and extension: specific cases

Amendment 19

Moved by

19: Schedule 3, page 151, line 13, at end insert—

“(ea) any combined county authority established under section 9(1) of the Levelling-up and Regeneration Act 2023;”Member’s explanatory statement

This amendment would reflect provision that has come into force since the Bill was introduced.

My Lords, before I start, I declare that my wife is an employee at the Crown Estate, as set out in the register of ministerial interests.

Government Amendments 19 to 22, in the name of my noble friend Lady Scott, are consequential on the repeal of the right for public authorities to block freehold acquisition and lease extension claims of houses for the purposes of redevelopment. This relates to Section 28 of the Leasehold Reform Act 1967. Removing this blocker will allow more leaseholders to enfranchise.

The power to block enfranchisement was given to authorities named on a list in the same section of the Act. The list of authorities is, however, used for wider purposes. For example, the list may be used by separate legislation when a lease has reached its end and expired. When this happens, the listed public authorities could apply to the courts to seek possession, for the purposes of redevelopment. These amendments preserve the list and its use for wider current law, as it is moved into Clauses 29 and 38 of the Bill.

Government Amendments 25, 30 to 40, and 49 are also in the name of my noble friend Lady Scott. Government Amendment 32 addresses the enfranchisement valuation procedure regarding “chained” leases—that is where successive long leases of a house are treated as one single long lease. The amendment makes it clear that the exception for market rack-rent leases will apply only where the leaseholder’s current lease is a market rack-rent lease. It will not matter whether a previous lease was a market rent lease. This will protect leaseholders and mean that in the case of chained leases, where a previous lease might have been granted for no, or low, premium, freeholders will be prevented from unfairly gaining through the new valuation scheme.

Government Amendment 39 clarifies the rules on which lease to consider when valuing a lease comprising a chain of leases—treated as one single lease—where one of them was granted for a high rent and low, or no, premium. The amendment states that it is the most recent lease that should be looked at. This will determine whether the ground rent cap should apply in the enfranchisement valuation. This will protect leaseholders and mean that in the case of chained leases, where a previous lease might have been granted for a high ground rent, but for little or no premium, freeholders will be prevented from unfairly gaining through the new valuation scheme.

Government Amendments 25, 31, 33, 34, 35, 36, 37, 38 and 40 are minor amendments that will tidy up the Bill by aligning two different sets of terminology, used to mean the same thing, across the Bill. This will help to avoid any potential for confusion and has no material impact on the valuation provisions in the Bill.

Government Amendment 30 is a minor amendment to Schedule 4. As currently drafted, the Bill would incorrectly require a valuation of a freehold for a lease extension. We are fixing this to align with the new valuation scheme, so that a lease extension will require a valuation of a notional lease. This will ensure that the provision works for lease extensions as intended. This amendment does not change the scope or effect of Assumption 3 in Schedule 4; it simply makes sure that it is phrased correctly.

Government Amendment 49 is a minor correction of a grammatical error in Clause 41 so that it refers to the appropriate tribunal. In this case, the appropriate tribunal can make orders regarding the new right for intermediate landlords to commute—that is, reduce—the rent they pay following lease extensions and ground rent buyout claims by their tenants.

Turning to government Amendments 50, 51, 52, 53 and 56 in the name of my noble friend Lady Scott, as noble Lords are aware, whenever making new legislation, it is of the utmost importance that we review any consequential amendments required to be made, including to other Acts of Parliament. We have therefore conducted a thorough review of how the reforms brought forward in this Bill will require necessary changes. The following amendments focus specifically on consequential changes resulting from Part 2 of the Bill.

Government Amendment 52 is a minor and technical amendment which reflects the movement of material from Section 175 of the Housing Act 1985 into the new Section 7A of the 1967 Act. The amendment preserves a part of the current law which deals with a number of exemptions for the valuation of a freehold acquisition under Section 9(1) of the 1967 Act which will still be available under a “preserved law claim”. This will make sure that the Bill retains the current restrictions and will remove any potential for unintentionally expanding the number of tenants who qualify for a Section 9(1) valuation and consequently for a preserved law claim. Right-to-buy tenants who qualify for enfranchisement rights will be no worse off and benefit in the same way from the new valuation scheme as other leaseholders.

Government Amendment 53 inserts a new clause, which acts as a paving amendment to introduce a new schedule. This new schedule brings together the consequential amendments to other legislation. As a result of this new schedule, government Amendments 50 and 51 remove consequential amendments to the Housing and Planning Act 1986, which are currently contained in Schedule 8; these are now addressed in the new schedule.

Amendment 56 inserts the new schedule, entitled “Part 2: consequential amendments to other legislation”. This new schedule is extensive and brings together the consequential amendments across 19 other Acts into a single place. None of the amendments makes separate, substantive changes, but, rather, the new schedule allows this Bill to mesh with and integrate seamlessly with other legislation. These consequential amendments will: remove provisions which will become obsolete as a result of the changes made by the Bill; enable freehold acquisition claims of houses under Section 9(1) of the Leasehold Reform Act 1967 to continue to operate as they do currently, while making sure that provisions in other legislation do not override our new valuation scheme; make clear how to treat the valuation of freehold acquisitions for right-to-buy tenants; preserve the current law so that non-litigation costs payable on enfranchisement do not attract stamp duty land tax, allowing the operations of stamp duty land tax to continue as intended; and make sure that provisions of other Acts governing shared ownership leases will still function properly following the repeal of some shared ownership provisions in the 1967 Act.

Government Amendments 88 and 89 are tidying-up amendments to align the terminology in Clause 77 with terminology used elsewhere in Part 5.

Finally, with sincere thanks to noble Lords for bearing with me and for their patience, I turn to government Amendment 90. This is a clarificatory amendment which seeks to deal with any potential confusion over the extent to which the Bill applies to event fees. As noble Lords may know, some leases require the leaseholder to pay a fee on certain events, such as the sale of the premises or a change of occupancy. These so-called event fees are common in specialist housing for older people. How event fee terms are drafted varies from one lease to the next, as does what the money is used for. This amendment is not concerned with the regulation of event fees; the Government have committed to making event fees fairer and more transparent and will implement agreed Law Commission recommendations when parliamentary time allows. There is a risk in the current drafting of the Bill that the specific nature and purpose of event fees may be regarded as an administration charge under Clause 81. That would, in turn, mean that they are subject to the test of reasonableness, which we do not consider appropriate for a fee of this nature. The amendment therefore sets out a definition of an event fee and makes it clear, for the avoidance of doubt, that any event fee is not to be regarded as an administration charge. I beg to move.

I thank my fellow east Lancastrian, the Minister, for introducing these technical, tidying-up and clarificatory amendments.

I have spoken ad nauseam about many of these amendments. I too thank my long-lost brother from east Lancashire, the noble Lord, Lord Khan, and say what a pleasure it is to follow him.

Amendment 19 agreed.

Amendments 20 to 22

Moved by

20: Schedule 3, page 152, line 17, leave out paragraph (f)

Member's explanatory statement

This amendment would reflect that the Development Board for Rural Wales has been abolished.

21: Schedule 3, page 152, line 25, at end insert—

“(ma) any clinical commissioning group;(mb) any Strategic Health Authority;(mc) any Primary Care Trust;”Member's explanatory statement

This amendment would ensure that the bodies listed are “local authorities” for the purpose of section 57 of the Landlord and Tenant Act 1954.

22: Schedule 3, page 152, line 30, leave out “National Rivers Authority” and insert “Environment Agency”

Member's explanatory statement

This amendment would replace reference to the National Rivers Authority with reference to its successor body, the Environment Agency.

Amendments 20 to 22 agreed.

Schedule 3, as amended, agreed.

Clauses 30 to 35 agreed.

House resumed. Sitting suspended.

Safety of Rwanda (Asylum and Immigration) Bill

Commons Reasons

Motion A

Moved by

That this House do not insist on its Amendment 3G, to which the Commons have disagreed for their Reason 3H.

3H: Because the Commons consider that it is not necessary as the Bill comes into force on the day on which the Rwanda Treaty enters into force and Rwanda’s ongoing adherence to its Treaty obligations will be subject to the monitoring provisions set out in the Treaty.

My Lords, in moving Motion A I will also speak to Motions B and B1. I am very grateful to noble Lords on all sides of the House for the careful consideration of this Bill. It is important that we have such detailed debates, and that the Bill has been scrutinised to the extent it has, but we must now accept the will of the elected House and get this Bill on to the statute book.

I turn now to the amendment in the name of the noble and learned Lord, Lord Hope. Having now debated this issue on so many occasions, I will not repeat the same arguments, but I remind the House of a key point of which I am sure, by now, noble Lords are fully aware. The Bill’s provisions come into force when the treaty enters into force, and the treaty enters into force when the parties have completed their internal procedures. We will ratify the treaty in the UK only once we agree with Rwanda that all necessary implementation is in place for both countries to comply with the obligations under the treaty.

I refer to the remarks of the noble and learned Lord, Lord Hope of Craighead, during our debate on 20 March, when he said:

“I want to make it plain that I do not for a moment question the good faith of the Government of Rwanda when they entered into the agreement or when they seek to give effect to what the treaty says. I do not for a moment question their determination to fulfil the obligations that they are undertaking”.—[Official Report, 20/3/24; col. 226.]

The Government entirely agree with this sentiment. The noble and learned Lord was right not to question the determination of the Rwandan Government to fulfil the obligations that they are undertaking. Their commitment to the partnership and their obligations under the treaty have been demonstrated by the progress they are making towards implementation.

I set out last week the recent steps that have been taken to implement the treaty and I do not intend to repeat those again, but I am pleased to be able to confirm further progress. On 19 April, the Rwandan Parliament passed domestic legislation to implement its new asylum system. The new Rwandan asylum law will strengthen and streamline key aspects of the end-to-end asylum system, in particular decision-making processes and associated appeals processes.

I remind noble Lords of the role of the independent monitoring committee, which, as noble Lords will all be aware by now, has been enhanced under the terms of the treaty to ensure compliance in practice with the obligations under the treaty. The monitoring committee will have the power to set its own priority areas for monitoring. It will have unfettered access for the purposes of completing assessments and reports, and it will have the ability to publish these reports as it sees fit. It will monitor the entire relocation process from the beginning, including initial screening, to relocation and settlement in Rwanda. Crucially, the monitoring committee will undertake daily monitoring of the partnership for at least the first three months to ensure rapid identification of and response to any shortcomings.

As we have made clear, if the monitoring committee were to raise or escalate any issues to the joint committee, where standing members of the joint committee are senior officials of the Government of the UK and the Government of the Republic of Rwanda with responsibility for areas related to the partnership, or areas with a strong interest in and relevance to this activity, the Government will of course listen. I remind noble Lords that it is up to the independent monitoring committee to raise any issues at any point.

The Government are satisfied that Rwanda is safe. Of course, I cannot predict what will happen in the future but, as I have set out, I can assure this House that we have already established the right mechanisms so that, should a situation ever arise, the Government will respond as necessary. This would include a range of options to respond to the circumstances, including any primary legislation as required. Therefore, this amendment is not necessary.

I turn to the Motion in the name of the noble Lord, Lord Browne. As I have said previously, the Government greatly value the contribution of those who have supported us and our Armed Forces overseas. That is why there are legal routes for them to come to the UK. On 1 February the Ministry of Defence updated Parliament on developments relating to the Afghan relocations and assistance policy—ARAP—scheme, announcing a reassessment of decisions made on applications with credible links to Afghan specialist units. This followed the Ministry of Defence’s review of processes around eligibility decisions for applicants claiming service in Afghan specialist units, which demonstrated instances of inconsistent application of ARAP criteria in certain cases. We are taking necessary steps to ensure that ARAP criteria are applied consistently.

As such, the Ministry of Defence has decided to undertake a reassessment of all eligibility decisions made on ineligible applications with credible claims that have links to Afghan specialist units. This reassessment is being done by a team that is independent of those who conducted the original casework. It will review each application thoroughly on a case-by-case basis.

In existing legislation, including but not limited to the Illegal Migration Act, the Secretary of State has a range of powers to consider cases and specific categories of persons. I have already made clear, and given a clear commitment on behalf of His Majesty’s Government, that we will consider how removal under existing immigration legislation would apply. That means that once this review of ARAP decisions for those with credible links to Afghan specialist units has concluded, the Government will not remove to Rwanda those who have received a positive eligibility decision as a result of this review, where they are already in the UK as of today. The Government recognise the commitment and responsibility that comes with combat veterans, whether our own or those who showed courage by serving alongside us. We will not let them down.

The House of Commons has considered and rejected these amendments four times. For the reasons I have set out, they are not necessary. We will ratify the treaty only once we agree with Rwanda that all necessary implementation is in place for both countries to comply with the obligations under the treaty. We will not relocate people to Rwanda if circumstances change that impact on the safety of the country, and we will not turn our backs on those who have supported our Armed Forces and the UK Government.

Illegal migration is costing billions of pounds and innocent lives are being lost. Bold, novel solutions are required, and our partnership with Rwanda offers just that. Rwanda is a safe country that has proven time and again its ability to offer asylum seekers a safe haven and a chance to build a new life. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by

3J: Clause 1, page 2, line 31, at end insert—

“(7) The Republic of Rwanda may be treated as a safe country for the purposes of this Act only once the Secretary of State, having consulted the Monitoring Committee formed under Article 15 of the Rwanda Treaty, has made a statement to Parliament to that effect.

(8) The Republic of Rwanda must cease to be treated as a safe country for the purposes of this Act once the Secretary of State has made a statement to Parliament to that effect.””

My Lords, I beg to move Motion A1 as an amendment to Motion A. I do so in the unavoidable absence of the noble and learned Lord, Lord Hope of Craighead, who tabled the previous versions of Amendment 3 and has been good enough to approve this one.

We are in the endgame now. We will, this week, have a law that provides for the offshore processing and settlement of asylum seekers in Rwanda. Its benefits remain to be seen. Its costs will be measured not only in money but in principles debased—disregard for our international commitments, avoiding statutory protections for the vulnerable, and the removal of judicial scrutiny over the core issue of the safety of Rwanda. That is now a fact, and there is nothing more we can do about it.

But there is a further principle, as precious as any of those, to which we can still hold fast. One might call it the principle of honesty in lawmaking. I presume on your Lordships’ patience this evening because we have it in our power to reinstate that principle without damaging the purpose of this Bill or delaying its passage any further. We are concerned with the safety of Rwanda, both in the present and in the future. This Bill is honest about neither.

The present position is governed by Clause 1(2) of the Bill, which

“gives effect to the judgement of Parliament that the Republic of Rwanda is a safe country”,

yet there has been no statement even by the Government that Rwanda is currently a safe country, as defined in Clause 1(5). The Minister said just now—I noted his words; they are the same words he used last Wednesday—that

“we will ratify the treaty in the UK only once we agree with Rwanda that all necessary implementation is in place for both countries to comply with the obligations under the treaty”.—[Official Report, 17/4/24; col. 1033.]

This has not yet happened. Against the background of what the Supreme Court described on the evidence before it as

“the past and continuing practice of refoulement”,

those obligations include, by Article 10(3) of the treaty, the agreement of an “effective system” to ensure that refoulement no longer occurs. The Minister has repeatedly declined the invitations of the noble Lord, Lord Kerr, to confirm that this system—a precondition for the safety of Rwanda—is fully set up and ready to go. Neither have we heard anything from the monitoring committee. While the Minister’s confidence is comforting up to a point, we are simply not in a position to make the judgment this Bill imputes to us.

The Bill’s treatment of the future is still further from reality. Parliament is asked to declare that Rwanda will always be a safe country, even if the progress made since the genocide of the 1990s—and one can only commend Rwanda on that—should ever falter or go into reverse. Decision-makers, immigration officials, courts and even the Secretary of State are bound by Clause 2 to treat Rwanda conclusively as safe in perpetuity.

Bluntly, we are asked to be complicit in a present-day untruth and a future fantasy, by making a factual judgment not backed by evidence, then by declaring that this judgment must stand for all time, irrespective of the true facts—this in the context not of some technical deeming provision in the tax code but of a factual determination on a matter of huge controversy on which the safety of human beings will depend. This is a post-truth Bill. To adapt a phrase we have often heard from the noble Lord, Lord Norton of Louth, it takes the culture of justification, which is a trademark of this House, and replaces it with a culture of assertion. It takes hopes and rebadges them as facts. It uses the sovereign status of this Parliament as a shield from scrutiny, and it makes a mockery of this Bill.

My amendment addresses first the present and then the future. The first part, proposed new subsection (7), requires the Secretary of State to tell us when, in his judgment, Rwanda is safe. It is this statement, not the judgment we are supposed to be reaching tonight, that will determine when the flights may lawfully begin. He has the detailed evidence on this. Despite our best efforts, we have had only scraps.

In previous versions of the amendment, this ministerial statement on the safety of Rwanda has been conditional on a favourable opinion from the Government’s own monitoring committee, established under the treaty, which we are told is already operational and which is ideally placed to assess the evidence. It has been objected, on previous occasions, that the monitoring committee should have no more than an advisory role. The noble and learned Lord, Lord Hope, and I have listened and have revised this amendment, which now provides only for the monitoring committee to be consulted. The statement on safety would be purely for the Secretary of State.

The noble and learned Lord, Lord Falconer, asked the Minister last Tuesday to confirm that

“before the Government are satisfied that Rwanda is a safe country, they will seek the views of the monitoring committee”.—[Official Report, 16/4/24; col. 900.]

No such assurance was forthcoming. I cannot say why not; perhaps we will get an assurance this evening. Failing that, this amendment would write one into law.

The second part of my amendment, proposed new subsection (8), deals with the future. The noble and learned Lord, Lord Hope, pointed out the problem in these terms:

“no provision is made anywhere in the Bill for what should happen if the facts change and everyone can see that Rwanda is no longer safe”.—[Official Report, 16/4/24; col. 902.]

Sir Jeremy Wright, Sir Bob Neill, and Sir Robert Buckland—none of them lefty lawyers, the last time I checked—have made the same point in the Commons debates. The Minister indicated last week that if the Government thought Rwanda had become unsafe, there might be some unspecified “parliamentary occasion” to mark that development, but of course no such occasion, other than the passage of a full Act of Parliament, could do the trick. I think that was effectively acknowledged by the Minister in the Commons this afternoon.

This assumption of perpetual parliamentary infallibility is an embarrassment and a nonsense. Fortunately, there is an alternative, which presents not the slightest threat to what the Government are seeking to achieve. Proposed new subsection 8 would give the Secretary of State an untrammelled power to decide in the future that Rwanda is no longer a safe country. Such a decision would release all decision-makers, including himself, from a legal fiction that makes the law look like an ass and those who make it asses.

So there is a speedy and effective way to reinstate the principle of honesty in lawmaking. To quote the parting words of Sir Robert Buckland, who rebelled this afternoon, alongside Sir Jeremy Wright, “Sort this out now”. I persist in the hope that reason may yet break out in the Minister’s response. If it does not, I propose to test the opinion of the House. I beg to move.

My Lords, I will speak to Motion B1 and Amendment 10H in lieu. I have given a great deal of thought, in recent times, to the question of what courage and strength look like. I ask myself today whether it a desperate and unpopular Prime Minister threatening to keep some of us septuagenarians up all night if we do not bow to his will, or putting yourself and your family in mortal peril by fighting totalitarianism alongside British forces with no idea of how that struggle will end. I know which I consider to be brave and strong, and I believe that the overwhelming majority of your Lordships, like others up and down the United Kingdom, of whatever age or political persuasion, agree. For weeks, Ministers have toured the TV and radio studios, saying that to repay our debt of honour to those who have served the Crown, in Afghanistan in particular, would open the floodgates of applications. If the concession I seek would open such floodgates, creating oceans of imposters, this would be only as a result of the Government’s own incompetence and lack of preparation. It is incompetence, as well as dishonour, that has brought us here this evening.

In the summer of 2021, the former Foreign Secretary, Dominic Raab, told us in a statement to the Foreign Affairs Select Committee, that the Government were developing a plan for the evacuation of our exposed allies and agents from Afghanistan. If your Lordships will allow me a moment, I will read my exact words when reporting this to the House:

“Dominic Raab told the Foreign Affairs Select Committee that, back in July, the Government were planning for the possibility of an evacuation of British citizens and those who were quite rightly entitled to think that we had a moral obligation to secure their lives”.—[Official Report, 7/9/21; col. 812.].

I remember, post Operation Pitting, asking if someone would share that plan with me, to see whether it included the reality that those who were sent to help people evacuate left before those who needed to be evacuated could be.

In a Statement repeated in your Lordships’ House and set out in full in Hansard on 7 September, the Prime Minister, Boris Johnson, told your Lordships that the Taliban must ensure safe passage and that the Government would keep ongoing evacuation plans under review in respect of such people. He said this:

“Let me say to anyone to whom we have made commitments and who is currently in Afghanistan: we are working urgently with our friends in the region to secure safe passage and, as soon as routes are available, we will do everything possible to help you to reach safety”.—[Official Report, Commons, 6/9/21; col. 21.]

Those are the words of the Prime Minister, repeated here. After the Statement was repeated in your Lordships’ House, we were told that this plan had been in existence for most of that year and that it had been reviewed in January, and was repeatedly reviewed, so that the chaos that we saw at Kabul airport would not happen—but it did.

You would have thought that, with all of that planning and information behind it, and having recruited and trained the Triples and paid them out of the embassy in Kabul, the 2,000 people who made them up—who were most at risk, and who had been working for us, in harm’s way—would have been known about, recorded and evacuated, and that it would have been the simplest thing in the world to triage anybody who claimed to be of that group out of the ARAP process. That is not how it turned out. Instead, a great many were left behind, and so the disastrous evacuation plan of 2021 continues.

The Government created this problem, which has caused at least nine of those who fought for us to be executed by the Taliban because the promised safe passage never appeared. His Majesty’s Government told us, even last week, that there would be no concession in respect of those people who had come here because they were frightened for their lives, and were entitled to be frightened for their lives and to find a way of getting here if there was no safe passage.

Why no concession for so long? I am asked this question every day—every day, since we started debating this issue, I am asked by many people, including many Conservative politicians, why there has been no concession: “Why have they not been able to work something out with you? Why the delay?”, they ask me. Either the Government have no confidence in their ability to implement this plan and are seeking in some way to delay it—considering it to be not their responsibility—or they just want the theatre of delay to their flagship Bill, so as to blame Labour, the Lords, the courts and so on. Today, the Government finally bring a concession: having offered and then withdrawn it last week, they refused to put it in the Bill.

I break away now to ask the Minister to re-read the passage of his speech that I call a concession—I know he does not—and to read it a bit more slowly, so that we can understand its implications. If not, if he has a printed a copy, I will read it slowly. I invite him to read it again, please. Will the Minister do that now, as it is important to the rest of my speech?

With the leave of the House, I will read it very slowly:

“That means that once this review of ARAP decisions for those with credible links to Afghan specialist units has concluded, the Government will not remove to Rwanda those who have received a positive eligibility decision as a result of this review, where they are already in the UK as of today”.

You cannot be removed and deported to Rwanda unless you are here by what the Government call illegal means and what I call irregular means. Those words are important for this reason. The Minister does not believe this to be a concession; it is to him a restatement of what he has been telling us for some time, but in a different form. In my view it is quite clearly a concession, although I guarantee that the media out there are being briefed that it is not, because there can be no concessions on this Bill.

Let me tell noble Lords why it is a concession. At Report on this Bill in your Lordships’ House, on 4 March, as recorded at col. 1420 in Hansard, I asked this question of the Minister:

“Will the Minister answer the question I asked in February when this review was announced”—

meaning the Triples review of eligibility for ARAP—

“will anyone who is eligible but was told they were ineligible—and acted in a way in which a small number of them did in extremis to protect themselves from possible death—be disqualified from being allowed to become eligible on review? Will they be excluded from the requirement of the Illegal Migration Act and this Bill if it becomes law that they must be deported to Rwanda?”

The Minister answered—it was the first time he was in a position to do so:

“As I understand it, they will be deported to Rwanda”.—[Official Report, 4/3/24; cols. 1420-1421.]

Now they will not be. That is a concession in anybody’s language.

It is an extremely important concession, because these are the small number of people who I have said, in every speech I have made in support of my amendment, are the target of my ambition that they will not be deported. Today, the Government finally bring a concession, having offered then withdrawn it, so should I trust them at their word? They left these people behind; they messed up any subsequent evacuation plan. This is a third opportunity competently to do the right thing. Why should I trust them now?

I will tell your Lordships why I am minded to consider doing so, although I have not yet made up my mind. It is because we are now part of a grand coalition, including noble and gallant Lords, many very senior politicians and officials, who have secured this country for years and put their names to this, veterans, campaigners and many voters of all persuasions and traditions across our nations—and we will not be silent until today’s promise is honoured by this Government or the next one.

Finally, what does this ignominious history tell us about the Rwanda policy as a whole? There were no safe routes for those heroes to whom we owe a debt of honour, still less are there safe routes for any other genuine refugees worthy of the promise of the refugee convention—also paid for in courage and strength in an earlier war, so many years ago. While I may not press my Motion this evening, I look forward to the day when a Labour Government repeal this immoral and unlawful excuse for legislation in total.

My Lords, it is a privilege to follow the noble Lord, Lord Browne of Ladyton. His persistence, his clarity and his determination have, in my view, led to a meaningful concession—and it is a concession—by the Government on a very important issue. To those who say that your Lordships’ House has not behaved legitimately and constitutionally in relation to this Bill, we can at the very least point to the concession that has been made to the noble Lord, Lord Browne, as justification for still being here debating the Bill tonight.

I stand principally to speak in total support of the admirable speech given by my noble friend Lord Anderson in favour of Motion A1. I will return briefly to Motion A1 in a few moments but, before I do, I wish to place on the record something which concerns me very much about the fact that we are debating this matter at all today. I do so with appreciation for the characteristically gracious and considerate words spoken by the Government Chief Whip earlier this afternoon. I was not in the House, because I did not know she was going to say it, but I have been able to watch it on that splendid organ, parliamentlive.tv.

I speak as a religiously confused person, born with 100% Jewish blood but brought up in the Church of England by convert parents. I note that there may well be some Jewish Peers in the House today. Others, I know, are absent on the grounds of conviction and conscience, for today is the first day of the Passover festival—of Pessach, one of the Jewish religion’s most sacred holidays. It is a day when Jewish families gather, sometimes with their friends—I should have been at one such event tonight—around a dinner table to pray, to eat, to sing and to retell the story of the exodus, with the help of a narrative liturgy called the Haggadah. For those who have been to such a Seder, it is a joyful experience and it brings home to one the importance of the first day of Passover. I am told that strong representations were made, not least by the Labour Party, through the usual channels, to avoid the final stages of the safety of Rwanda Bill being heard today. The Jewish community, although it places great importance on the first and second days of Pessach, would have been willing to be here tomorrow or any other day this week. Unfortunately, that was refused.

I have tried hard to think of a legitimate reason for that refusal. If this debate had taken place on Tuesday, Wednesday, Thursday or Friday, or next week, it would not have made any material difference to the Government’s position. Nothing that was said by the Prime Minister, who on 11 November displayed, properly and rightly, his devotion to his own religion in public, has justified choosing today for this debate. I take it as an offence to our ambitions for diversity in this country— sermon over.

I now turn to the Government’s inexplicable refusal to accept my noble and learned friend Lord Hope’s amendments and what are now my noble friend Lord Anderson’s amendments. All they would require was for a very small piece of verification to take place in Parliament—a verification that either Rwanda is a safe country or that it is not. Surely it is right that if there is to be the kind of fiction spoken of eloquently by my noble friend, there should be that verification in Parliament. At the moment, even if the Secretary of State became aware that Rwanda was non-compliant, the Bill as it stands would mean it would still be deemed compliant. Is there anybody in this House who does not honestly think that is nonsense?

Then we have the rhetoric that has been behind this. Even this morning, the Prime Minister talked about stopping the boats and claimed that the worldwide publicity this Bill has received has resulted in stopping them. Well, he has not been reading the same newspapers and watching the same websites as me, I am afraid. In the last two and a half months, the number of people on those boats has increased over the previous year. He chose to give the figures for an earlier period in his extraordinary press conference this morning. That adage—stop the boats—has become just an idle boast. I say to the Government: it is time to stop the boasts, because this is not stopping the boats.

Then we have discovered this in recent days. Do your Lordships remember that picture of then-Home Secretary Suella Braverman sitting and looking admiringly on some quite nice-looking houses which had been built in Rwanda for the refugees to come from the United Kingdom? Now we learn that a lot of them have been sold. If you tried to book a holiday and the travel agent said to you, “It’s a beautiful island, but there is no property for you to stay in and we are not sure you can get there”, you would think that travel agent was mad. Yet that is a fair metaphor for the Government’s behaviour on this Bill.

Then there is the question of the aircraft. We heard this morning from the Prime Minister that, apparently, there is a contract with a carrier. I hope the Minister, who has treated this House with enormous care and respect on the Bill—I really admire the way that he has dealt with it—will continue to do so by telling the House some detail as to whether there really is a contract. I am afraid, given the fictions that there are around the basis and at the root of the Bill, that I am not sure I believe there is a contract. What sort of company is it with and are there pilots who have declared that they are willing to fly the planes carrying those refugees? I am far from sure that that is the case.

Would the Minister take the trouble to get someone to explain to the Prime Minister that it is deeply insulting to the jurisdiction that brings so much foreign money into the United Kingdom to describe the European Court of Human Rights as a foreign court? It is not a foreign court; it is an international court. I am sure that, somehow or other, the Government might be persuaded to get that into their heads. It is causing enormous difficulty for those of us who try to defend our jurisdiction to hear Ministers tell that untruth.

Perhaps the Minister would care to tell us how many times the United Kingdom Government have relied on the European Convention on Human Rights in international cases and in cases in this country? When I was a part-time judge I sat in the Administrative Court, which was a great privilege for any part-time judge. I am absolutely certain that the number of times the European convention was relied on by government lawyers appearing for their client, the Government, is beyond normal counting.

Finally, I ask noble Lords to reflect for a moment on the cost of this whole Bill. We have now had some accurate numbers from the relevant government accounting organisation. We were told in this very Chamber that a maximum of 300 people were going to Rwanda at a cost which, at that time a couple of weeks ago, was estimated at between £550 million and £600 million. I commented at the time that we could send them to the Ritz hotel in Paris for a couple of years and still have some change. I have been corrected; I am not sure how much change there would have been. But it is an enormous sum of money to deal with a very small number of people.

The Government have suddenly decided to do something they should have done years ago: to appoint more judges to deal with asylum and immigration cases, to have more civil servants who are specialised in dealing with these cases, and to deal with the problem they have brought on themselves. I am very disappointed that, by the end of tonight, this Bill will pass. It is an awful Bill. It is the worst Bill I have seen in my 38 years in one or the other House of Parliament. I will certainly vote in favour of Motion A1.