TENANCIES TERMINABLE AFTER DEATH OR MARRIAGE. (Hansard, 9 February 1993)

§ The Minister of Housing and Planning (Sir George Young)
I beg to move, That the clause be now read a Second time.

§ Madam Speaker
I understand that it will be convenient to discuss at the same time Government amendments Nos. 55, 76, 56, 78 and 79.
I draw the attention of the House to Government amendment No. 56, which refers to line 22. There is a misprint; it should read "line 12". I make that point so that it need not be mentioned again.

§ Sir George Young
I repeat an interest which I have declared on previous occasions. I am the owner of a 999-year lease on a flat in my constituency, although it is not a lease that terminates on the death of the Prince of Wales, which is the subject of new clause 13.
When we debated the matter in Standing Committee, I undertook to reflect on the case for retrospectively bringing within enfranchisement lessees who are presently excluded by the so-called Prince of Wales clause. It is a blatant avoidance device used by some landlords, and its use was blocked prospectively by the Housing Act 1980. Leaseholders persuaded us that, in practice, many of their number would have been unaware of the effect of that clause in their leases, and no landlord groups have made any representations in favour of the clause. In the light of that, we have decided that it would be contrary to the aims of our reforms to leave that small group of leaseholders high and dry.
This new clause, with its associated group of amendments, will amend the Leasehold Reform Act 1967 by adding a new section and modifying the existing section 3. It will enable a leaseholder who was granted a long lease on a house before 18 April 1980, which would qualify under the 1967 Act except that it contains a clause which renders it terminable by notice after the death of, for example, the last survivor of any issue of King George V alive at the time of the grant—hence the name of the Prince of Wales clause—to acquire the freehold interest.
The valuation basis will be the higher of the two in the 1967 Act —the so-called special valuation base. That is consistent with our policy expressed in the Bill, that leaseholders who are given new rights should pay the market price for the interest that they can now purchase.
Nothing in the new clause will prevent landlords from continuing to grant bona fide life tenancies to, for example, former employees.Such leases will continue to be unenfranchiseable. Houses which were previously excluded from enfranchisement because of a Prince of Wales clause will be eligible for inclusion in an area subject to an estate management scheme set up under chapter IV of the Bill.
I hope that the House will recognise that this new clause signifies the Government's desire to he fair with the leasehold reform package. The new clause reforms an anomaly which is no longer defensible, and I commend it to the House.

§ Mr. John Battle (Leeds, West)
We welcome the new clauses which the Government have tabled on the Prince of Wales clause. They signify some give, after efforts were made in Committee. While the Government's intentions to extend enfranchisement to leaseholders are reflected in the 834 clauses, what we have before us in the amendments and the new clauses do not satisfy all the promises which the Minister gave in Committee.
While we welcome the Minister's shifting of the direction of enhancing and extending leasehold, we would—as we said in Committee—push further: we want commonhold. At least the Government have given us an assurance that we shall get commonhold. We look forward to the Government introducing a commonhold Bill so that we can proceed with that.
Some small measure is provided in the Government's clauses which we are immediately discussing. I hope that the three quarters of a million leaseholders who think that they will be enfranchised under the legislation actually will be, because there is still a danger, despite the new clauses, that the Bill is hedged with exemptions. As we know, some of the clauses before us today will push through even more exemptions, so that those who think that they will be enfranchised will find in practice that they are not.
We welcome the shift on the Prince of Wales clause. In the further discussions on the shift, as it were, on the low-rent test for flats and houses which the Minister promised to re-examine, we look forward to the operation of the two-thirds rule in smaller blocks as well. I hope that we can make progress tonight to enhance and extend the rights of leaseholders to enfranchisement, rather than restrict them and hedge them with exemptions, which the Government still seem to be doing.