My Lords, I have a number of interests to declare. I am a non-executive director of MHS Homes, chair of the Heart of Medway Housing Association, a vice-president of the Local Government Association and a leaseholder.
I welcome the Bill, but there is a big “but”. It represents limited progress. The next Parliament will have to return to the issue of leasehold reform to liberate leaseholders, deliver on commitments made and deliver justice for them.
I pay tribute to the campaigners outside Parliament, who have never given up. They include the National Leasehold Campaign, led by Councillor Katie Kendrick, Jo Darbyshire and Cath Williams; and the Leasehold Knowledge Partnership, led by Sebastian O’Kelly, Martin Boyd and my good friend, the campaigner Liam Spender. They will deliver justice for leaseholders.
The noble Baroness, Lady Thornhill, talked about the Lloyd George Budget of 1909. The noble Lord, Lord Bailey, talked about 1966. There is a fantastic play called “Fleecehold”, by Michele Sheldon. If it is on, I urge noble Lords to go and see it. In one scene, in 1884, Henry Broadhurst, a Liberal, and then Labour Member of Parliament for various Midlands constituencies, discusses leases on the Floor of the House of Commons. This has been a long-term problem, which we have still not sorted out. Many Members of Parliament have also stood up for leaseholders. I pay tribute to the noble Lords, Lord Young of Cookham and Lord Best, and many others who have raised these issues time and again.
It is most frustrating to look at the timeline of events and actions taken in more recent times. I have a few examples to share with the House. The fire at Grenfell Tower broke out on 14 June 2017—just short of seven years ago. We have still not resolved issues arising from that tragedy. It is not right that there are people living in blocks whose flats are unsaleable and unmortgageable. There is no excuse for it. It is a complete failure by the Government, on their watch. Does the Minister think this is acceptable? When will they finally do something about it?
There has been a complete lack of action following the report of the Regulation of Property Agents working group, chaired by the noble Lord, Lord Best. It was published in July 2019, towards the end of the last Parliament. We are now at the end of this Parliament, and nothing has happened. This Bill is the ideal place to deal with it, but there is nothing in it. This is just not good enough. Nothing has happened in five years. Can the Minister explain why this is acceptable?
Three Law Commission reports were published in July 2020 on leasehold enfranchisement, the right to manage and commonhold. It is good that this Bill largely addresses leasehold enfranchisement, but there is very little on the right to manage and nothing on commonhold. Again, can the Minister explain why this is acceptable? We have been waiting nearly seven years to complete the job on Grenfell and nearly five years without any action on regulating property agents; and it is nearly four years since the Law Commission report, in which nothing was done about commonhold. Telling this House that this is all extremely complicated and will take time is not acceptable. We have been waiting for action for years, without promises being delivered.
It has been frustrating to watch the right honourable Member for Surrey Heath tour the television studios and radio stations, speak to newspapers, give interviews about what he wants to do to end the feudal leasehold system, make promises, pledges and commitments, and give assurances and undertakings. The noble Lord, Lord Young of Cookham, referred to letters and to a Statement in the House of Commons. These have amounted to absolutely nothing.
When I spoke to a member of the Government privately, they said: “Well, Roy, you must understand that this is what Michael does.” Another member of the Government said: “Roy, everything you want to do, Michael wants to do, but you have to understand, he has been vetoed by No. 10. His plans are now shot to pieces. It is all over.” I do not know if this is true or not, but going around making promises and pledges with no agreement to deliver them is shoddy politics. There will be a heavy price to pay. Making promises and pledges without delivering is stringing people along. It is just not good enough.
I will look at a few of the issues that are missing from the Bill. There is no ban on creating leasehold flats. Why not? Seventy per cent of leaseholds are for flats, but there is nothing in the Bill at all. The answer, as the noble Lord, Lord Bailey of Paddington, said, is commonhold. Why it is not there? The Government have had the report from the Law Commission for four years. Why are they not dealing with it?
There are other issues that are just not happening. There is the stuff about the Building Safety Act; again, after Grenfell, why are they not doing that? I just do not understand why. There was also a Conservative Party manifesto commitment on forfeiture in 2017, but it is not in the Bill. Why not? It is ridiculous. We are going to be putting it in the Bill; we will certainly have amendments on that one. Forfeiture can happen for as little as £350 in unpaid rent or service charges. If pursued to its conclusion, the process allows the landlord to take the tenant’s entire flat and not account to the tenant for a penny. Any mortgage is not repaid and the lender can pursue the tenant for the full amount of the debt. I accept that very few flats or houses are lost to forfeiture, but the whole process is used to bully tenants—the people in the properties—and it is just not right. They made that commitment in 2017 and it is about time they delivered it.
I move on to a few other issues. My noble friend Lady Twycross mentioned the assured shorthold tenancy trap. She was up on the ballot for a Private Member’s Bill; she got it and was then approached by the Government, who assured her: “You don’t need to do this Private Member’s Bill because we’re going to do it in a renters reform Bill”. But the Renters (Reform) Bill has disappeared. It started in the House of Commons before this Bill did, but it is still not out of that House. At the moment, it has vanished without trace. My noble friend was told there was no need for her to do it, so I hope that the Government will deal with the issue in this Bill, because we cannot guarantee that the other Bill will ever appear in this House. We know there have been all sorts of problems with people upset about what is in that Bill, so we certainly need to ensure that it is addressed here.
What there is on leasehold houses is absolutely welcome, but there are still some issues about that. It was introduced in the House of Commons only on Report; remember, it was left out of the Bill when it was first published, so it came in then. There are one or two little problems. Clause 7 and part 1 of Schedule 1, paragraph 1, together allow new leasehold houses to be created as under leases or sub-leases. An example may be where a local authority granted a head lease to
a developer before 22 December 2017; the developer could still create leasehold houses. In Clause 7 and part 1 of Schedule 1, paragraph 3 allows the creation of new retirement leasehold houses, regardless of whether they are built on freehold land. Again, that issue has been raised elsewhere, but why are some of the most vulnerable in our society not protected? That is another big issue we need to deal with.
Then there is the control of service charges. In many cases, with great property companies and good freeholders, it all works absolutely fine. Sadly, of course, that is not always the case and we need further reform. It was 50 years ago that there was talk in the other place about reform to service charges; we still do not have that matter sorted out, and much of the of the detail in Part 4, which deals with service charges, is left to statutory instruments—secondary legislation. There is very little detail in the Bill.
Clause 51 extends information rights to properties paying a fixed service charge. The clause does not allow for extending the right to challenge unreasonable service charges. I can assure your Lordships that leaseholders know when they are being ripped off. When things are bad, they know. So, while it is great to get some information, what they need are the tools to actually stop it. The Bill does not do that.
Clause 54 creates a new system of accounts and annual reports. Again, that is to be welcomed, but we need to go further. Clause 56 introduces a new right to claim damages of up to £5,000; again, we need clarity on what that actually means. There are two issues: we all know that “damages” has a specific legal meaning. The clause may not provide an effective remedy to claim money for delay where the leaseholder is unable to prove loss. That needs to be addressed in Committee. It is also unclear whether the clause allows each affected leaseholder to claim up to £5,000, or whether it is just £5,000 for the leaseholders as a collective body. There are many issues we need to explore in Committee.
Part 4 of the Bill requires landlords and estate managers to join an approved redress scheme, but much of the detail is missing and the Secretary of State will determine who is obliged to join by regulations, which we have not seen yet. This change is welcome, but there are still issues.
On the whole issue of commencement and interpretation, many provisions will be commenced by regulation at a later date. The Bill has 123 clauses and 12 schedules. Only four clauses will come into force two months after the Bill is passed. The rest of it will come into play when the Secretary of State determines. When will that be? We do not know. We have not got the regulations here; we do not have visibility on any dates. So, again, we need some more assurances. Even if the Bill passes, most of it will not come into force until you decide you are going to bring it in. We need to be careful about this. We need a clear timetable for when this stuff is going to come into force. I think it is really important. There are many cases, on the issue of marriage values, of leases that are approaching 80 years now. This needs to be resolved for them in particular.
So, as I said when I started, I welcome the Bill. It is progress, but it is very limited progress. We need much more progress here in Committee. I hope the Government
will listen to what the House is saying and bring amendments forward. If not, certainly colleagues around the House will bring amendments forward and we will divide the House on those.
I will spend a bit of time working on what I call the “Gove amendments”—that is, all the pledges Michael Gove has made over the last few years. I will create amendments and divide the House for him, so he can actually deliver what he wants to do. It is really important that, if you make these promises and pledges, you actually want to do that. I am sure he does want to do it, so I am disappointed we have not got there. I am going to help the Secretary of State in that way and make sure that the House gets the chance to vote. Then he can have the chance to speak up for them when they get to the House of Commons. I will leave my remarks there and look forward to the noble Baroness’s response.
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