LORDS AMENDMENT (Hansard, 26 October 1967)

§ LORD KENNET
My Lords, I beg to move that this House doth not insist on Amendment No. 7 to which the Commons have disagreed.

§ LORD BROOKE OF CUMNOR
My Lords, this disagreement arises out of an 1809 Amendment which was moved in your Lordships' House on Report stage by the noble Lord, Lord Butler of Saffron Walden. He said that he was speaking, in particular, on behalf of the bursars of Oxford and Cambridge colleges; and no doubt there are many other freeholders who are in a similar position. His anxiety was to ensure that less injustice was done to those freeholders who had many years of a lease still unexpired. Under the Bill, if it went through unamended, in a case where perhaps there were 40 years of a lease still unexpired and the leaseholder sought to enfranchise, the price of enfranchisement would be based on the supposition that the old original low ground rent continued for the whole of the long remaining unexpired period of the lease. Quite clearly, a ground rent of that kind continuing for many years would never have been created originally at a low figure had there been any thought of compulsory enfranchisement coming along while the lease still had many years to run.
It was to rectify in some small degree that situation that the noble Lord, Lord Butler of Saffron Walden, moved his Amendment, and your Lordships approved it on a Division. We now understand that the Commons disagree to this Amendment for a reason which, frankly, was not mentioned by the Government, or anybody else, during the debates on the Amendment in your Lordships' House. The Reason given is: Because the effect of the Amendment would be that on enfranchisement a tenant would be paying the landlord in part for the interest which the tenant already has in the land. I am bound to say that this is rather a late stage to start debating that quite new point, which was not, as I say, raised at all from any quarter of your Lordships' House while the matter was under debate here. The Government did not bring it forward.
Here, as in other cases, I recognise that we must accept the Commons' disagreement, and that we cannot insist on our Amendment. I can only say that I am sorry that once again the Government have thrown away an opportunity to do slightly more justice to freeholders, often charities, who were most severely treated by the provisions of the Bill in the manner that I have described.

§ LORD KENNET
My Lords, I differ from the noble Lord when he says that the Commons Reason was not put forward in this House. It was not put forward in those terms, I agree; but it comes to very much the same thing. This is another way of expressing the points made in this House earlier.
The Amendment which the Commons have struck out would have a curious effect, and I am not sure that it was fully realised in this House. In the case of a 99-year lease, for the last 25 years the terms of the existing tenancy are swept aside, and the leaseholder would pay the site value at the end of the lease, or something near that value. On the other hand, during the period when there was from about 60 years to 25 years to run, he would pay more than he has to pay under the present law. Where there are more than 60 years to run, the effect is marginal, but he might pay a little more than under the present law. The reason for this paradoxical effect is that arbitrarily introducing a modern ground rent somewhere during the term of an existing lease will affect all valuations made which have to ascribe a value to the unexpired term, even though the change-point may be some years ahead.