My Lords, it is a privilege to speak after the noble Baroness, with her depth of knowledge about this subject, and my noble friend Lord Howard of Rising, who did me a number of favours. First, he saved me from any obligation to explain the meaning of marriage value. Secondly, he made a moderate and temperate case for his amendment when my argument might be expressed in a somewhat less moderate and well-tempered manner, because I feel a real sense of outrage about what is being proposed.
As my noble friend has explained, marriage value is a real financial asset. His Majesty’s Government say that they are abolishing it. They are not abolishing it; they are, in effect, transferring, at the stroke of a pen, value from the freeholder to the leaseholder without any compensation. It is, simply, expropriation. My amendment, which is a probing amendment—I would not expect it to be part of the Bill—obliges the Secretary of State to pay compensation to those who have lost out as a result. Of course, I really want the Government to scrap the provision itself, rather than for compensation to be paid, and I would not expect my amendment to be a practical policy. It is a probing amendment to raise the question about expropriation without compensation.
I want to make three broad points. There are genuine evils in the leasehold system. I made it clear at Second Reading that there were things that I support in the Bill. For example, it was scandalous that in recent years some housebuilders sold leasehold houses with rapidly escalating ground rents, which they then securitised in order to increase their capital receipts. Also, it is scandalous the way that many freeholders are implementing their obligations in relation to the cladding crisis; people are genuinely suffering as a result.
However, how many of these evils are actually being addressed by removing marriage value from the calculation of the enfranchisement premium, or the premium paid for extending a lease? It is not germane to the main evils that the Bill has been advanced as addressing.
Expropriation of this character implies some wrongdoing on the part of the person whose assets are being expropriated. It requires a high test. Noble
Lords will have noticed that even in the case of the friends of Putin, we have been sensitive and careful about expropriation. We have frozen assets, but when it comes to whether we should expropriate them and give them to Ukraine or do whatever useful stuff we might do with that money, we all draw back from it because of the legal consequences. Here, we are perfectly happy to expropriate assets and hand them around the market without any consideration, and with very few people rising to protest about it, even in your Lordships’ House.
I believe that the Secretary of State said that he sees this as an act of justice, but what justice is involved in transferring wealth from a group of people who include, as my noble friend has said, charities and pension funds to leaseholders, who in many cases are frightfully rich? We will shortly come to amendments in the name of the right reverend Prelate the Bishop of Manchester which deal specifically with charities, which I have put my name to. I live in Kensington, and as I declared at Second Reading, I live in a flat on a long leasehold. However, there are many people around Kensington with very expensive properties who are salivating at the prospect of this going through. This is not substantially helping the poor and middle classes; it is going to transfer huge amounts of wealth to people with long leases. The more valuable the flat, the bigger the benefit that they are going to get from it. Where is the justice in all this? I simply do not understand how that point can be made.
My second point relates to the European Convention on Human Rights, on which I do not claim to be an expert. I have a suspicion that my noble friend, when she rises to answer, will say that in respect of Article 1 of the first protocol—to which the noble Baroness, Lady Deech, has referred with such learning—similar cases in the past have been taken to the court, and that the landowners, the freeholders, have lost. Therefore, the Government are certain that this will pass that test. I am, of course, wholly unqualified to comment on the legal merits of the case in either way. However, even if it did pass that test, is this something that should pass the test in England, as far as the older rights that we have inherited are concerned? This is principally England that we are talking about, with its tradition of respect for private property and not implementing retrospective law or seizure of assets without very good reason. I would suggest that it does not pass the test. Even the Law Society—the “leftie lawyers”, as they are often referred to, which is not a phrase that I would use, and I hope Hansard will put that in quotation marks—is concerned about the damage that this will do to the reputation of English law.
My final point is addressed to my fellows on these Benches, who take the Conservative Whip. Are we and our noble friends on the Front Bench here to expropriate property without compensation, without justice, without an argument, or without there being serious wrongdoing on the part of the person whose assets are seized? Is this what we came into this House to do? I do not think it is. This is something that the Government need to take away and rethink very seriously, because it is wrong, it smells, and it is something that we should have nothing to do with.