HL Deb 24 July 1967 vol 285 cc639-71

4.4 p.m.

Report stage resumed.

LORD KENNET

My Lords, reverting to the Leasehold Reform Bill and the Amendment of the noble Lord, Lord Butler of Saffron Walden, one can have—indeed I have—the greatest sympathy with the noble Lord's intention to get closer to the Government's stated aim of fairness as between freeholder and leaseholder, while yet seeing certain disadvantages in how this Amendment would actually work out on the ground. It is effectively the same as an Amendment which was put down by the Opposition on Report stage in the House of Commons, and it is an Amendment which tends a little to the advantage of the freeholder and the disadvantage of the leaseholder—not that that necessarily makes it fall outside the concept of fairness which the Government are seeking to achieve.

What would happen if this Amendment were law? I think that what would happen would be that the leaseholder who is in a position to hang on to the very end, to wait until the existing lease falls in, would simply put off enfranchisement until the very last years of the term, because he would sit it out at his existing low ground rent. I am not at all sure that this would be to anybody's advantage. Indeed, it might conceivably, from the landlord's point of view, be even worse, since he would be kept in suspense longer than might otherwise have been the case: and when it came to the end he would receive very little, if indeed any, more than he would under the Bill as it now stands.

Now consider the leaseholder not in a position to wait, who wants to part with his house immediately in order to go somewhere else and take another job, he being an industrially mobile citizen. He could get round the situation under the noble Lord's Amendment by taking his extended lease and thereby getting a saleable asset. He sells his extended lease, and the next leaseholder, whoever occupies that house under the extended lease—who would continue to be at the original ground rent until the original term date, since this Amendment does not apply to extended leases—would defer enfranchisement until as near the original term date as he could. I feel bound to say that what would count would be the ability of the parties concerned to manoeuvre to the best advantage, rather than the basic facts of the case; and that is the reason for which the Government are not too happy about the Amendment proposed by the noble Lord.

LORD BROOKE OF CUMNOR

My Lords, I am glad that the Government recognise that this Amendment, so ably moved by the noble Lord, Lord Butler of Saffron Walden, does not impair the general principles of the Government's White Paper. I listened to what the noble Lord, Lord Kennet, said, and I took his point that leaseholders who were in a position to do so might well put off enfranchising until the end of the lease. Of course, if they did so, that might not be disadvantageous to the landlord, because in the enfranchisement terms the landlord would not long have to bear what I can only call the burden of this long lease at a ground rent which had been originally fixed without any knowledge of the Government's proposals.

I am quite sure that a solution needs to be found—and it may be that only the Government can find it—for the gross unfairness which follows when a tenant desires to take advantage of the enfranchisement provisions of the Bill, even though the lease has run only a comparatively few years. The Government must surely recognise the difference between the two cases which I am going to outline. First, there is the case where the lease has run for nearly the whole period of 99 years, or whatever it may be, and the landlord has been receiving what he bargained for: the ground rent over that period. What he is deprived of by this Bill is his interest in the bricks and mortar towards the end of the lease. But he will be able to claim in the enfranchisement price the benefit of an almost immediate substantial improvement in the ground rent. He will not have hanging round his neck a period of many years at a low ground rent, and therefore the enfranchisement price will not be kept down by that fact.

The other type of ground landlord, the one that I think the noble Lord, Lord Butler of Saffron Walden, has in mind, is in a wholly different position. He granted the lease relatively recently. He granted it on the assumption that at the end of the 99 years, or whatever it might be, the bricks and mortar would revert to him and therefore he was content with a low ground rent over the whole period of 99 years. But in this case the Government are intervening in the bargain at a much earlier stage and they are saying that the property in the bricks and mortar is to be transferred to the leaseholder but that the freeholder is still to be burdened, in the price which he receives on enfranchisement, with the expectation of a many years' lease at a low ground rent.

It seems quite unfair to treat those two ground landlords in just the same way. It seems grossly unfair that when, by this Bill, the Government are upsetting the terms of the original contract at an early stage, they should take no account of the grave loss they are going to cause thereby to the ground landlord. He would not have dreamt of granting a lease at a low ground rent for a long period of years if, at an early stage, it was to be interfered with by this enfranchisement legislation. He is in quite a different position from the ground landlord where the original lease granted nearly 99 years ago has almost run out, and the enfranchisement price therefore will only have to take into account a relatively short term of years at the low ground rent.

The Government know my opinions on the objects of this Bill. I stated them in quite clear terms at Second Reading. But here we are discussing an Amendment which is within the general principles of the Bill—principles to which I deeply object but which, for the purposes of this debate, we are accepting. By some means such as this Amendment it would be possible to do a greater degree of justice and yet carry out entirely the Government's plan. The noble Lord suggested one or two difficulties which might arise. No doubt that is so, but those difficulties could be overcome by giving further thought to all the implications of this Amendment and, possibly, by further consequential Amendments elsewhere, which the noble Lord, Lord Butler of Saffron Walden, could hardly have been expected to prepare, not having all the resources of the Government and of Parliamentary draftsmen. I stress most strongly that in the Bill there is an in- justice here, and if the noble Lord, Lord Butler of Saffron Walden, desires to press this Amendment I, for one, will support him.

LORD BUTLER OF SAFFRON WALDEN

My Lords, I do not think I have any alternative but to press this to a conclusion. As my noble friend Lord Brooke of Cumnor has said, this is within the spirit, not only of the White Paper, but also of the terms of Clause 1 and other clauses of the Bill. Moreover, I do not think the case put forward by the Minister was at all a convincing one. In the great majority of cases, for example, it will not matter at all to the freeholder if the leaseholder delays enfranchising until nearly the end of the lease. The freeholder will at any rate be quite sure of getting the full value of his land—or a better value—because there will be virtually no deferment of the modern ground rent. So I do not think that objection is a very powerful one. Leaving aside that particular objection, as this is the only way we can see of getting a fairer enfranchisement price within the terms of the Bill itself, I think the only thing to do is to reach a conclusion on this matter to see whether we can amend the Bill.

LORD KENNET

My Lords, before we come to any decision about this clause I should like to take up the noble Lord, Lord Brooke of Cumnor, on his two cases with which he made such effective play a moment or two ago. It seemed to me that his second case—that is the one of the newly issued lease, where the leaseholder has been there only a few years—is not likely to be affected by the Amendment proposed by the noble Lord, Lord Butler of Saffron Walden, because this will bite only on the last 25 years of any lease. The leaseholder will have had to be there for five years in order to enfranchise at all. I do not know how many leases are issued for a period of 30 years or less these days. I should have thought rather few, and moreover, since we are considering recently issued leases a recently created ground rent is not likely to be very low and this, too, affects the dramatic contrast drawn by the noble Lord, Lord Brooke of Cumnor, between his case (a) and case (b), if I may so call them.

Having said that, I should like to suggest to the noble Lord, Lord Butler of Saffron Walden, that if he would consider withdrawing this Amendment to-day we shall have another "shot" at this Bill in October, on Third Reading, when it can still be amended in this House. I will undertake to look at it again, but in the usual form of words I must say that I do so without any commitment to being able to introduce something which would meet the point.

LORD BROOKE OF CUMNOR

My Lords, if I may speak again, of course I appreciate that if a lease has run only six years any increase in the ground rent for the last 25 years will still be a long way ahead. But in the kind of example I was giving I was thinking of the lease which was, perhaps, getting on for halfway through its term. I think the noble Lord, Lord Butler of Saffron Walden, has been modest in the request that he has made. He might not have said 25 years; he might have said the midway term of the lease.

LORD BUTLER OF SAFFRON WALDEN

My Lords, the Minister has made a generous suggestion. However, I think it would probably be better to reach a conclusion on this Amendment, and then we can still look at it again when we come back in the autumn. I think it would be better to try to amend the Bill now, but at the same time I should like to express my thanks to the Minister for the courteous suggestion he has made. Whatever decision we reach about this Amendment this afternoon, it has been considered by a great many legal luminaries in this country, not only those in another place. I have had it examined very carefully indeed to see its effect, and I believe it would be better to reach an agreement on this now and then consider the matter again in the autumn.

LORD KENNET

My Lords, I am not at all sure that what the noble Lord proposes in his Amendment should be done, but I am quite certain that the way in which he seeks to achieve this effect is not a good way. That being so, if the noble Lord does press it to a Division I must advise the House to vote against it.

LORD MITCHISON

My Lords, before we proceed to a Division or not to a Division, may I say that I regard this as a rather remarkable and somewhat obvious manœuvre. It appears that noble Lords opposite desire at all costs to have a Division at a convenient hour of the day, and for that reason they are adopting a course which I should have thought would discourage any Government from ever offering to look at anything at all. We heard the noble Lord, Lord Brooke of Cumnor, talk about justice and injustice, and I came rapidly to the conclusion, perhaps too rapidly, that his view of what was just was anything that helped the freeholder, and that what was unjust was anything that helped the leaseholder, and I still remain of that opinion. I do not think there is any principle here at all. I think this is simply a question of how much, a matter of degree, as between the two parties to the lease. In a case of that kind it seems to me simply asking for trouble to refuse an offer by the Government to look at the matter again.

What is the object of it? The object, I suppose, is simply to waste the time of another place—and they are very short of time at the moment. I can see no other object. If this is pressed to a Division it will obviously go back to another place and we shall see what happens there. I do not know whether or not the offer to look at it again will be repeated elsewhere. All I can say is that if I were the Minister in charge, and having regard to the position of the elected and this non-elected Chamber, in a question of this kind I should not repeat the offer which has been made here.

LORD HAWKE

My Lords, I do not think Lord Mitchison's intervention has helped the proceedings of this House one little bit. My reading of the situation is that if we put some words in the Bill, which admittedly are not very good words, it will mean, at any rate, that the Government will come forward with their own Amendment on Third Reading to elucidate the matter properly.

4.24 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Resolved in the affirmative, and Amendment agreed to accordingly.

4.33 p.m.

LORD ABERDARE moved, in subsection (1)(c), to leave out "section 10" and insert: sections 10 and, where appropriate, (covenants transferring landlord's liability for common facilities) below". The noble Lord said: My Lords, I beg to move this Amendment on behalf of my noble friend Lord Colville of Culross, who much regrets that he is unable to

Their Lordships divided: Contents, 83; Not-Contents, 52.

CONTENTS
Aberdare, L. Denham, L. [Teller.] Mar, E.
Ailwyn, L. Derwent, L. Margadale, L.
Airedale, L. Drumalbyn, L. Massereene and Ferrard, V.
Albemarle, E. Dudley, L. Meston, L.
Allerton, L. Dundee, E. Milverton, L.
Ampthill, L. Dundonald, E. Monsell, V.
Asquith of Yarnbury, Bs. Eccles, V. Monson, L.
Atholl, D. Effingham, E. Moynihan, L.
Balfour of Inchrye, L. Ellenborough, L. Nugent of Guildford, L.
Bathurst, E. Elliot of Harwood, Bs. Oakshott, L.
Bessborough, E. Emmet of Amberley, Bs. Rea, L.
Boston, L. Ferrers, E. Redmayne, L.
Brooke of Cumnor, L. Fortescue, E. St. Aldwyn, E.
Brooke of Ystradfellte, Bs. Gage, V. St. Helens, L.
Buckton, L. Goschen, V. [Teller.] St. Just, L.
Butler of Saffron Walden, L. Grimston of Westbury, L. St. Oswald, L.
Byers, L. Hawke, L. Salisbury, M.
Carrington, L. Horsbrugh, Bs. Sandford, L.
Clwyd, L. Ilford, L. Sandys, L.
Colgrain, L. Inchyra, L. Sempill, Ly.
Conesford, L. Jellicoe, E. Stonehaven, V.
Cork and Orrery, E. Jessel, L. Strang, L.
Cornwallis, L. Kilmarnock, L. Strange, L.
Craigavon, V. Lambert, V. Strange of Knokin, Bs.
Craigmyle, L. Latymer, L. Teynham, L.
Croft, L. Lothian, M. Vivian, L.
Daventry, V. MacAndrew, L. Wakefield of Kendal, L.
Mancroft, L. Wolverton L.
NOT-CONTENTS
Geddes of Epsom, L. Royle, L.
Gifford, L. Sainsbury, L.
Addison, V. Greenway, L. St. Davids, V.
Archibald, L. Henderson, L. Samuel, V.
Beswick, L. Hilton of Upton, L. [Teller.] Segal, L.
Bowles, L. Hughes, L. Shepherd, L.
Brockway, L. Kennet, L. Silkin, L.
Brown, L. Latham, L. Snow, L.
Buckinghamshire, E. Leatherland, L. Sorensen, L. [Teller.]
Burden, L. Lindgren, L. Stocks, Bs.
Chalfont, L. Longford, E. (L. Privy Seal.) Stonham, L.
Champion, L. Maelor, L. Stow Hill, L.
Chorley, L. Mitchison, L. Summerskill, Bs.
Darwen, L. Moyle, L. Taylor of Mansfield, L.
Douglas of Barloch, L. Pargiter, L. Wells-Pestell, L.
Faringdon, L Phillips, Bs. Williamson, L.
Gaitskell, Bs. Plummer, Bs. Winterbottom, L.
Gardiner, L. (L. Chancellor) Popplewell, L. Wynne-Jones, L.

be present to-day. If it is convenient to the House, I would suggest that we consider at the same time Amendment No. 11, which is also in my noble friend's name, and for which Amendment No. 4 is a paving Amendment.

Amendment No. 4 arises out of an Amendment which I moved at the Committee Stage, the object of which was to deal with the case where the landlord is providing communal facilities that are enjoyed by a number of leaseholders on his estate when these leaseholders exercise their right to enfranchisement. Your Lordships will recollect the problem that when a number of them have enfranchised the landlord will be left with a number of communal facilities, be they gardens, trees, streets or sewers, which he will have no incentive to maintain. The Amendment that I moved on the last stage sought to put an obligation on the local authorities in such cases to undertake the provision of these facilities; but as the noble Lord, Lord Hughes, pointed out, there were certain difficulties and objections to this course

The noble Lord, Lord Hughes, said that the desirable thing was that the person who had enfranchised, and who would be benefiting, should be the person to carry the responsibility. He went on to say that there is no effective means of passing on the burden of positive covenants from the vendor to the purchaser. My noble friend Lord Colville of Culross mentioned last time that he thought he could recollect a precedent for the making of positive covenants. This occurs, in fact, in Clause 9 of the Manchester Corporation Act 1965, and it is because of this provision that he has put down the main Amendment here, Amendment No. 11, for a new clause suggesting covenants transferring the landlord's liability for common facilities.

I think the proposed new clause is fairly straightforward and self-explanatory. The first subsection outlines the circumstances in which positive covenants may be included in an enfranchising conveyance. The second and third subsections are the mechanics for the way in which the covenant transfers to the enfranchised person a pro rata amount of the landlord's provision. If one imagines a number of houses sharing a garden, when each householder enfranchises the enfranchising leaseholder takes on a proportionate obligation for the upkeep of the common garden.

Subsection (4) provides that the covenant shall be enforceable by the other enfranchising tenants, and by the landlord, where he has some interests left, against a defaulting enfranchised leaseholder and his successors. In other words, if, after the landlord has shared out the maintenance of the garden among the various householders, one of them fails to keep up the covenant, the landlord, if he is still interested in property on the estate, or the other enfranchising leaseholders have a right against him or his successors. Subsection (5) outlines the conditions in which the covenant is enforceable. Subsection (6) sets out the method by which the covenant can be enforced. My noble friend has made it as simple as possible, in that the other parties concerned may enter upon the land, perform the covenant and then later recover the expense of so doing. Subsection (7) introduces the need for registration of the covenant under the Land Charges Act.

This seems to me a fairly straightforward clause. It meets a point that has already been agreed. The Minister in another place accepted that there was here a difficulty. The noble Lord, Lord Hughes, in this House intimated that he would favourably consider any kind of solution that would put the burden on the enfranchising tenants, and I believe that my noble friend's clause achieves this objective in a fairly sensible and straightforward way. As I have already said, the Amendment which we are at present considering, No. 4, is a paving Amendment. If the new clause is inserted this Amendment will permit, in computing the price that the enfranchising leaseholder has to pay, an allowance against the obligation that he will have under this new clause. I beg to move.

Amendment moved— Page 5, line 2, leave out ("section 10") and insert the said new words.—(Lord Aberdare.)

4.40 p.m.

LORD KENNET

My Lords, as I indicated to the noble Lord earlier, I am very happy to discuss Amendment No. 11 under this paving Amendment No. 4. The new clause of the noble Viscount, Lord Colville of Culross, is, as I myself can see and as I am informed by those who are better qualified to judge than I am, extremely ingenious and carefully drafted, as one would expect from the noble Viscount. But at the end of the day I am advised that the clause would not really improve the situation which, as the House knows, the Government are probably as concerned about as the noble Viscount. It is possible to provide for the continuance of common services under a Clause 19 scheme which is something tailor-made for a particular area precisely defined by a map, and which contains detailed provision for maintenance and closely related default powers, but it is not possible to secure this objective by covenants which, in the nature of things, have perforce to be rather vaguely expressed.

The new clause assumes that the landlord will already be under covenant to his leaseholders to provide and maintain the common services; and it provides for each leaseholder to take over this liability so far as it affects his house on enfranchisement. But this, unfortunately, is a situation which will hardly ever arise, because landlords very rarely enter into any covenants with their leaseholders beyond the standard one of "quiet enjoyment". In nearly all cases where the landlord provides common services the lease merely binds the leaseholder to pay the freeholder, in addition to the ground rent, a rateable proportion of the cost that the landlord incurs in providing these services—but without imposing any liability on the landlord to provide or maintain the services. Consequently, this clause could practically never be invoked.

Another difficulty which the Government see is that in so far as the clause seeks to impose on the leaseholder sometimes a liability to "provide" common services as distinct from maintaining them, this permits of another loophole. I am sorry to be going into such detail on the drafting, but this is an intensely carefully drafted new clause and I think that I owe it to the House to take it up in detail. Assume that the landlord were under a liability to provide, let us say, a recreation ground—unlikely as the example may be—how could the liability to provide it be transferred to the enfranchising leaseholders? In any case, bearing in mind that the leaseholder may on enfranchisement redevelop his property as he pleases (subject only to planning permission), it seems most improbable that a covenant even to maintain a recreation ground in perpetuity could ever be made to work. I use an extremely unlikely case of a recreation ground, but it points up the difficulty in a dramatic light.

In practice the only person who can maintain a property is the owner or some body specially empowered for the purpose, and this is precisely what is contemplated under Clause 19 of the Bill. The individual participation of a large number of unorganised freeholders should properly take the form of a money contribution to the person who undertakes the maintenance, but this new clause envisages maintenance direct, not payments for maintenance. It does so because of its fundamental idea of transfer ring a liability, or a share in a liability, without transforming it. Some leaseholders would no doubt decline to enter into such covenants but would nevertheless continue to enjoy the common services But without the new clause there is nothing to prevent the leaseholder and the landlord from entering into a personal agreement for the leaseholder to take over responsibility for certain of the landlord's services which were previously provided by him under covenant. The only difficulty standing in the way of that free personal agreement is the one which we discussed at such great length in Committee: that is, that as the law now stands such an arrangement would not "run with the land" so as to be enforceable against the leaseholder's successors in title but would fall with the passage from the present leaseholder or enfranchised freeholder to the next one.

This, however, is a very temporary disadvantage, because a Bill to give effect to the recommendations of the Wilberforce Report is very likely to be introduced in the near future, and when it comes into effect any such agreement entered into between the freeholder and the leaseholder will take effect as a "land obligation" and will run with the land from that leaseholder to his successor in title. So that in so far as the noble Viscount's clause is inspired by the defect in the law as it stands—and I believe it is largely inspired by that—it is hardly necessary to make complicated and special provision in this Bill to overcome it, even when that special provision is drafted with as much care and ingenuity as the noble Viscount has brought to it.

4.46 p.m.

LORD ABERDARE

My Lords, I am grateful, and I know that my noble friend will be grateful, for the care with which the noble Lord, Lord Kennet, has considered this clause and for the kind words he said about its ingenuity. But there are still difficulties. I am sorry that we have not got a little further because, although there are points of drafting, I am sure that these could be quite easily got over. Where it is a matter of "providing" rather than "maintaining", I am sure that this is only a matter of drafting; and if it could be a matter of financial contributions, I am sure that we do not intend leaseholders to go out and cut the lawn or anything of that kind. The idea is that they would all contribute towards the upkeep of the communal garden. There are certainly cases where this difficulty will arise which will not be covered under Clause 19 schemes and which will apply only to certain defined, well-managed estates.

What my noble friend was seeking to do was to try to put in the Bill something in the way of positive covenants which would anticipate what might later emerge from the Wilberforce Report and which could later be modified in the light of the Wilberforce Report. But until that Report arrives, I think it was in my noble friend's mind to put into the Bill a sensible clause which would allow for positive covenants which would thereby enable a landlord to share out among his enfranchising tenants some of these communal facilities. I hope that we can have more talks about the situation. I know that the Government are anxious to put it right. I urge on them that there might well be a solution through this form of positive covenant, and I hope that they will be able to talk to my noble friend when he returns and it may be that we can get somewhere at another stage.

LORD KENNET

My Lords, before the noble Lord withdraws or otherwise his Amendment, may I say that I am not sure that the noble Lord is right about the Wilberforce Report. He said, "Until we get the Wilberforce Report". We have got it; it is published. It is there and it has been considered. All we have to wait for now is the legislation based upon it, which I have every confidence will not be too long delayed. Lastly, neither of us has mentioned the fact that the noble Viscount has been in direct touch with the Parliamentary draftsman about this matter, and the difficulty which faces the Government in accepting this Amendment is twofold: first, that it simply does not seem to us to be worth while to go such a long way round to achieve the effect for such a short time as we hope the situation will be uncovered; and, secondly that the best legal advice available to the Government is that this new clause, despite its ingenuity, is in the end defective, not only on minor points of drafting but also a little more completely than that.

LORD ABERDARE

My Lords, I am grateful for the correction about the Wilberforce Report, and I hope my noble friend will be able to see what the Minister has said. Meanwhile, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.50 p.m.

LORD BROOKE OF CUMNOR moved to add to subsection (1): Provided that the price payable shall in no case be less than the open market value of the site (without including anything for the value of the buildings on the site) at the date of enfranchisement, subject to the tenancy then existing. The noble Lord said: My Lords, this Amendment is in very much the same terms as an Amendment which was moved in Committee by the noble Lord, Lord Silsoe, and later withdrawn after some discussion about its possible ambiguity. The noble Lord, Lord Silsoe, is not able to be here to-day, and it seemed to me desirable that I should keep the matter open on his behalf, as there is a further stage of the Bill coming after the Recess, and as he withdrew the Amendment, as Hansard shows, on an invitation from the Government to withdraw it and to meet and discuss. I am not aware whether those discussions have taken place, but this is an important matter and I feel it is desirable that the House should return to it.

The Government know my opinion on the main proposal in the Bill for settling the enfranchisement terms; that is, that the interest in the bricks and mortar should be taken away from the landlord. This Amendment, however, is drafted in terms which I should have thought represented exactly what the Government by a roundabout method were trying to do in the Bill. The reason why I think we should further consider it—and, so far as I know, one of the reasons why the noble Lord, Lord Silsoe, put down an Amendment of similar effect in Committee—is that he and I both have some doubts as to whether the roundabout and indirect manner in which the Bill is drafted to achieve the Government's purpose will in fact work out unfairly to the landlord, and will fail to give effect to what the Government have stated in their White Paper they mean to do.

As I understand it, Clause 9 is drafted so that although it appears to include the value of the house and premises, that value is to be effectually excluded by the provisions in subsection (1)(a) of that clause which say: … if the tenancy has not been extended under this Part of this Act, on the assumption that it was to be so extended". If the tenancy has, in fact, been so extended, there is of course no need for the assumption to be made, because it is a fact. I take it that the Government are advised by their valuers that the extension of the tenancy by a further 50 years will in practice eliminate the value of the bricks and mortar, which will already have been there for a considerable time before the 50 years started, and therefore their present value assuming another 50 years is nugatory. That may be so, but I have seen some evidence that the formula which the Bill provides may not in all circumstances give to the landlord what my Amendment specifies. My Amendment says that … the price payable shall in no case be less than the open market value of the site (without including anything for the value of the buildings on the site) at the date of enfranchisement, subject to the tenancy then existing.)". That is perfectly clear. I do not mind the Government having the words which are in the Bill now, as long as this proviso is inserted as a long-stop to ensure that the landlord never gets less than the White Paper says he is to get.

I am not a surveyor or a valuer, but the noble Lord, Lord Silsoe, is a man of immense experience in this field, and he, for his part, was clearly not satisfied at the Committee stage that the Bill was protecting the landlord's interest in the way the White Paper claimed it would. It seems to me that no harm whatever could be done by including this proviso; that it would make considerably clearer how the enfranchisement price was to be fixed; and that it would put beyond all doubt that the purpose of the White Paper was achieved in the Bill. I beg to move.

Amendment moved— Page 15, line 2, at end insert the said proviso.—(Lord Brooke of Cumnor.)

LORD KENNET

My Lords, I am sorry that the noble Lord, Lord Silsoe, is not able to be with us to-day. As the noble Lord, Lord Brooke of Cumnor, has said, he had down an Amendment at Committee stage which was very similar to this and he agreed to withdraw it when I said, not that the Government might be able to reconsider it but that I myself was in confusion about its meaning at that time. So I invited him during the Committee stage to come and discuss it with me later. I am sorry that the noble Lord, Lord Silsoe, has not been free to come and discuss the matter with me, but I have written to him, and I believe the noble Lord, Lord Brooke of Cumnor, will have seen my letter. But I think that, for the information of the House, I should go just a little into the detailed background of this matter.

The point is that the words: without including anything for the value of the buildings on the site", as used in the Amendment of the noble Lord, Lord Brooke of Cumnor, come to the same thing as adding the 50 years' extension. But where there is development value as well, the proviso fails to give the desired result of the value of the site for the house alone plus development value. What it gives is these values plus something more (I see the noble Lord is smiling; it may be that I should explain that I meant "the result desired by the Government", for development value is the worth of the site to do things with, after making due allowance for getting the tenant out. If the tenant could be got out for nothing, then the proviso would work. But under the Bill the tenant has to be compensated for being got out and this fact cannot be ignored, as otherwise the development value would vary according to whether the tenant chose the extension or the enfranchisement.

The noble Lord, Lord Brooke of Cumnor, said that he was determined that the landlord would never get less than the White Paper said he would get, and that that was the purpose of the Amendment. But I am informed that the Amendment would give him more than the White Paper said he should get. There are three values are there not? There is the value of the site for its present use; there is the value of the bricks and mortar, and there may or not be development value over and above. The White Paper made it very plain that the freeholder should receive compensation for the value of the site and for development value, in the cases where there was any, but not for the bricks and mortar value. My Lords, where there is no development value, this Amendment is all right in accordance with the White Paper. Where there is development value, it is not all right, because I am informed that its effect would be to make the enfranchising leaseholder pay to the freeholder not only the site value and development value, but also an element of the bricks and mortar value. For that reason the Amendment is in conflict with the principles laid down in the White Paper.

LORD BROOKE OF CUMNOR

My Lords, the noble Lord, Lord Kennet, has the advantage of all his officials and the Parliamentary draftsmen in explaining to him, if he needs any explanation, exactly what these Amendments would mean in relation to the wording of the Bill. By his last few words I am thrown back to the same difficulty I was in when we discussed this point in Committee. I find it so extraordinarily hard to understand how the words without including anything for the Value of the buildings on the site can, according to him, in certain cases include something for the value of the buildings on the site. I wonder whether it would be possible, as we now have another two months or so before this Bill reaches its final stages, for us to meet, perhaps with the noble Lord, Lord Silsoe, who is also interested in this, to try to see whether we can thresh it out. It is extremely difficult for me, on the Floor of the House, to follow a complex explanation in a matter in which I am not professionally qualified, as the noble Lord, Lord Silsoe, is. I am bound to say that my Amendment seems to me to say exactly what I always thought the White Paper was trying to say, and that the wording of the Bill seems an unnecessary complexity, which therefore, not unnaturally, raises my suspicions that it may mean that people would not in fact get in all cases what they had been led by the White Paper to expect they would get.

I think it would be a mistake for me, in these circumstances, to press this Amendment to-day. We have advanced in one respect beyond where we were on the Committee stage, in that the Government said then that there was an element of ambiguity in the Amendment proposed by the noble Lord, Lord Silsoe, and that has not been said to me to-day. I hope that the noble Lord, Lord Kennet, will agree to discuss this with the noble Lord, Lord Silsoe, if he so wishes, and with me. Through some mischance, I have not received a copy of the letter he mentioned, which I have no doubt is on its way to me, so I am handicapped in that respect. But if the noble Lord will be good enough to say that he is willing to discuss the technical details of all this in circumstances when we can do so at greater length and with less difficulty than on the Floor of the House, I will withdraw the Amendment.

LORD MITCHISON

My Lords, is the position this: that when the Minister offers to consider an Amendment we have a Division, but when the Opposition invite the Minister to consider an Amendment, and he agrees, we do not have a Division?

LORD KENNET

My Lords, of course I shall be happy to discuss this matter with the noble Lord at our leisure during the summer. If I might just run over the history again, I invited the noble Lord, Lord Silsoe, to come and discuss it at the last stage. He was, I was informed, too busy to do so. I regret that. I have not invited the noble Lord, Lord Brooke of Cumnor, to come and discuss it, but I will do so if he will be so kind as to withdraw the Amendment. I hope that we shall thereafter soon finish with this point. At the time of our last discussion, as I said, I was myself confused about the effect of this Amendment. I am no longer confused, having had full professional advice; and I believe that when the noble Lord comes to see me he will find that the position is as I said it was.

LORD BROOKE OF CUMNOR

My Lords, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD KENNET moved, after subsection (5), to insert: (5A) Where under a lease executed to give effect to this section the new tenancy takes effect subject to a subsisting charge on the existing tenancy, and at the time of its execution the person having the charge is by reason thereof entitled to possession of the documents of title relating to the existing tenancy, then he shall be similarly entitled to possession of the documents of title relating to the new tenancy and the tenant shall within one month of the execution of the lease deliver it to him, and the instrument creating or evidencing the charge shall apply in the event of the tenant failing to deliver the lease in accordance with this subsection as if the obligation to do so were included in the terms of the charge as set out in that instrument.

The noble Lord said: My Lords, this Amendment has been put down to meet a point raised by the Building Societies Association. They were worried lest a leaseholder whose lease was subject to a mortgage might obtain an extended lease without the mortgagee being brought into the matter at all, and fail to hand over the new lease, which the Bill states is to be "in substitution for" the existing lease, to the mortgagee. This could make for difficulty if the mortgagee subsequently had to foreclose or sell the house. The new subsection which I now propose makes it clear that whenever a mortgagee has possession of the title deeds relating to the original tenancy he is also to be entitled to the deeds relating to the new tenancy, and the new subsection imposes on the leaseholder a duty to hand over the new lease to the mortgagee within one month of its being executed. I beg to move.

Amendment moved— Page 25, line 24, at end insert the said subsection.—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 15 [Terms of tenancy to be granted on extension]:

LORD BROOKE OF CUMNOR

My Lords, I beg to move Amendment No. 7, and perhaps I may speak to the two subsequent Amendments at the same time, Nos. 8 and 9. All these three Amendments are consequential on an Amendment to Clause 15(2)(b) which was agreed to in Committee, and it seems right that, the provisions in paragraph (b) having been altered, the remainder of the clause should be brought in line. I trust that the consequential Amendments are correctly drafted. I beg to move.

Amendment moved— Page 26, line 19, leave out ("either") and insert ("each").—(Lord Brooke of Cumnor.)

LORD KENNET

My Lords, I rise simply to say that the Government accept these Amendments on the "no commitment" basis.

On Question, Amendment agreed to.

LORD BROOKE OF CUMNOR: My Lords, I beg to move Amendment No. 8.

Amendment moved— Page 26, line 22, leave out ("by") and insert ("equally by the landlord and").—(Lord Brooke of Cumnor.)

On Question, Amendment agreed to.

LORD BROOKE OF CUMNOR: My Lords, I beg to move Amendment No. 9.

Amendment moved— Page 26, line 24, leave out ("of the twenty-five,") and insert ("year of any period of ten").—(Lord Brooke of Cumnor.)

On Question, Amendment agreed to.

Clause 19 [Retention of management powers for general benefit of neighbourhood]:

5.8 p.m.

LORD BROOKE OF CUMNOR moved, in subsection (8)(a), to leave out "regulating the redevelopment" and insert: empowering any person or body of persons specified under the scheme to redevelop, and for regulating the". The noble Lord said: My Lords, we now come to Clause 19, agreed on both sides of the House to be of exceptional importance. In Committee, the noble Lord, Lord Silsoe, who cannot be here to-day, moved to leave out Clause 19 and to substitute a new clause which he had drafted, part of the purpose of which was to secure opportunity for the redevelopment of well-managed estates or parts thereof by stopping enfranchisement on estates which had received a certificate of good management. He, for his part, at the end of a considerable debate, asked leave to withdraw the Amendment for two reasons: first, because he said he was confident that, having heard the debate, the Government would in fact have another look at many of these difficult problems; and, secondly, because he did not wish to be found with a badly drafted Amendment which had been carried.

My Lords, this is the penultimate stage of the Bill, and we may have to settle the final shape of Clause 19 in your Lordships' House on Third Reading, after the Recess. It seemed to me, in the absence of Lord Silsoe, that it would be a mistake for me to put down again at this stage another Amendment or a new clause similar to his, partly because this is not the last stage of the Bill but largely because it still seems to me extremely important that the House should have a real answer to the principal question which I asked in Committee when we were dealing with this clause. That question is to find out what the Government mean by their references in the Bill to regulating redevelopment.

If your Lordships will look at Clause 19(1) you will see that the Minister may grant a certificate that it is "likely to be in the general interest that the landlord should retain powers of management", et cetera, in order to maintain adequate standards of appearance and amenity and regulate development in the area in the event of tenants acquiring the landlord's interest in their house and premises under this Part of this Act. We have not yet been able to elicit from the Government what they have in mind by the words: regulate redevelopment in the area in the event of tenants acquiring the landlord's interest in their house and premises under this Part of this Act". Two pages further on, still the middle of this lengthy clause, we come to the same phrase again. Subsection (8) reads: Without prejudice to any other provision of this section, a scheme under it may provide for all or any of the following matters:—

  1. (a) for regulating the redevelopment, use or appearance of property of which tenant has acquired the landlord's interest under this Part of this Act;"

I hope I have made clear from the beginning that in relation to Clause 19 it is the aspect of redevelopment which seems to me to be outstandingly important in the national interest. We all have a fair knowledge of which are the well-managed estates. Many of us could mention one or two, and there would be unanimous agreement about them. At some stage in the past—sometimes in the long past—those estates were strikingly and laudably developed. I should have thought that there was no question whatever about its being in the national interest that when the bricks and mortar are due for redevelopment, the redevelopment should take place to the same high standard. I ought not to have spoken of "bricks and mortar" being due for redevelopment; because redevelopment is much more than a matter of renewing bricks and mortar. One may have to change the layout or the whole town-planning concept. This is something which, in my submission, has to have a single purpose behind it. The noble Lord, Lord Silsoe, said in our last debate: There are a great deal of redevelopments which can be done properly only comprehensively."—[OFFICIAL REPORT, col. 1217; 12/7/67.] In the previous column, the noble Lord, Lord Kennet himself spoke of areas where the ownership had been fragmented, and went on to say: When the plan for redevelopment came, they have been reassembled, in some cases—it all depends on the circumstances—into larger freeholds, and thus we have seen some of the best redevelopments in this country.

I cannot help thinking that the Government have in mind under Clause 19 that the kind of scheme which might be submitted for approval by the High Court would in some way provide for this high-quality redevelopment envisaged in those passages where I have quoted both noble Lords. But there is no indication whatever in Clause 19 how this is to happen. The questions I asked last time—and I admit that I asked them without previous notice—received not very comprehensive replies, if I may use the word "comprehensive" in this context. These words which I desire to amend: for regulating the redevelopment, use or appearance of property of which tenants have acquired the landlord's interest clearly are intended, one would think, to cover redevelopment, use and appearance alike. But in most of our debates, and in most of the discussions on Clause 19 and the schemes under Clause 19, the Government's concept seems to be that a scheme can be made to maintain the look of the estate for the limited period which the estate still has to last. Clearly, its life must end at some time. There does not appear to be any effective plan for regulating the redevelopment.

I do not know at this stage whether I should wish to put down a further Amendment to Clause 19 on Third Reading. Still less have I any idea whether Lord Silsoe would wish to do so—I have not had an opportunity of consulting him about his intentions when he can attend your Lordships' House again. But it would help me greatly, and, I submit, it would help the whole House, if the Government could say something more about how they envisage the content of schemes under Clause 19. If they are simply to be schemes to maintain the look of well-managed estates, that is not enough for me. If they are schemes that are really to be effective towards securing wise and far-sighted redevelopment of a quality equal to that which went into the original development, then this clause assumes a new importance. But I am anxious about this matter because I do not think a comprehensive answer was given to these questions on the last occasion and because I find it extremely difficult to see from anything in this Bill how a scheme can successfully regulate the redevelopment of an area which has been avowedly well-managed but which has afterwards, equally avowedly, been fragmented. I beg to move.

Amendment moved— Page 35, line 20, leave out ("regulating the redevelopment") and insert ("empowering any person or body of persons specified under the scheme to redevelop, and for regulating the").—(Lord Brooke of Cumnor.)

5.19 p.m.

LORD MITCHISON

My Lords, I want to say only that it seems to me that what we have to look at here is the language of the Bill itself. This is not really a question of Government intentions; it is much more a question of landlord's intentions. If the noble Lord would look back at the heading to these three clauses, Clauses 17, 18, and 19, he will find it is "Landlord's overriding rights". It is the landlord (or, in an Amendment introduced, a body of tenants) who has to make the scheme; that is to say, it is the people on the spot. I understand that the noble Lord, Lord Brooke of Cumnor, and his friends think that this has been very well done on a good number of occasions, in a good many cases by London landlords. I would not differ from that; I think it has in a number of cases, though we could argue about it. That being so, what is the real difficulty? What is the effect of this Amendment? I cannot imagine wider words than "regulating the redevelopment" of an area—

LORD BROOKE OF CUMNOR

My Lords, if I may interrupt the noble Lord, I hoped that I had made clear in my speech that I was not proposing to press this Amendment. It is a probing Amendment. But the noble Lord himself has not explained how the landlord who, he says, is the operative person, can himself regulate the redevelopment of an area where he will no longer possess the freehold.

LORD MITCHISON

My Lords, I do not want to hold back the Minister. He is "raring" (I think that is the word) to speak. All I wish to say about this is that if you look at Clause 19 as a whole you will see that the motive power in this matter is the landlord, or the body of tenants. The Minister has a controlling power and certain conditions have to be fulfilled, and the purpose of the exercise has to be, among other things, to regulate redevelopment. I have looked at the Amendment; it substitutes for the words "regulating the development" other words which seem to me to narrow, rather than to widen, the effect of the clause. Having said that, and in view of the obvious wishes of the Minister, I will sit down.

5.22 p.m.

LORD KENNET

My Lords, the noble Lord, Lord Brooke of Cumnor, said that he hoped the schemes under Clause 19 would cover use, appearance and redevelopment alike. I must apologise for not having been sufficiently comprehensive last time, but I would confirm what my right honourable friend said: I hope so, too. I imagine that the meaning of the words "regulate the redevelopment" is intended to be to say (of course I must be careful here not to trespass on the functions of the courts, because the courts will be coming in all the time on the schemes) how new development is to be done; whether the new building is to be a 90-storey hotel, or a two-storey house like the ones beside it, or whether it is to have a flat roof or gables, and so on. To "regulate the development" will be simply to say what the new development will be and what it will be like. What, of course, it does not mean is what this clause is not intended to do (and I think it would be most unlikely the Government could ever accept any Amendment which made it do so); that is, to enable a freeholder to withhold enfranchisement on the grounds of getting more watertight control over redevelopment. This would be going too far, in my judgment, and I hope that, having said that, I have, within the bounds of Parliamentary propriety, satisfied the noble Lord in his quest for definitions.

VISCOUNT GAGE

My Lords, I hope that some agreement can be reached on this point. We laymen become accustomed to hearing a great number of things which defy intelligibility. If there are these estates which are to be fragmented, one wishes to know how the fragmented part is to be brought into the redevelopment scheme. We are told that these are the landlord's rights, but these fragmented parts will not be under the landlord's control, and somehow they have to be brought in. I hope that the noble Lord and my noble friend will manage to get this process made more clear than at present it seems to be.

LORD KENNET

My Lords, I am sincerely puzzled by the noble Lord's sincere puzzlement. This is precisely what the scheme will do: this is what it is for. Presumably the landlord and the former tenants, together in agreement, or, if not, then one party (or, since the recent Amendment, the other party) without the agreement of the other, having got the Minister's certificate, will go to the court and say, "We want an agreement which will control the following sorts of things." Among the sorts of things may or may not be the height of new development; the shape of the roof of new development; the colour of new development; the material of new development. It will be up to them to propose to the court, and up to the court, in the event of disagreement between the parties to the scheme, to adjudicate between them.

LORD BROOKE OF CUMNOR

My Lords, I believe that as mover of the Amendment I have the right of reply. I am afraid that I am not at all satisfied with what the noble Lord has said. He suggested that the scheme would say how the new development is to be done. I can understand a scheme saying that certain things are not to be done, but unless there is some central control there will not be a comprehensive scheme of redevelopment. I have had some experience in the planning world—

LORD KENNET

My Lords, may I interrupt the noble Lord? I did not say that the scheme would settle how redevelopment was to be done. I should imagine that it would be more in the nature of defining what aspects of the new development would be subject to the scheme. I cannot imagine a scheme saying, if a new block was to be built there: "The block shall look like this." I can imagine a scheme which would say, "The appearance of a new block, as defined in such and such a way, shall be subject to the scheme."

LORD BROOKE OF CUMNOR

My Lords, I took down the noble Lord's words, and what I took down was that the scheme would say how new development is to be done. What is troubling me is this: that though you can, by a scheme, or by planning legislation, or otherwise, prevent various things from being done, you can secure that a comprehensive plan will be carried out only if somebody has some unified control over that. May I give an example from another field, with regard to the control of high buildings? You can, by planning control, ensure that high buildings will not be in certain positions and will not break the skyline at certain points. But you cannot, unless there is unified control, ensure that there will be a high building erected at point A or B or C. That will depend on the owner of that particular plot of land.

As I see it, what the Government are likely to achieve by this clause is that when a well-managed estate is broken up, a scheme may be agreed by the High Court to forbid certain types of redevelopment. But I cannot see how that scheme can ensure that simultaneous redevelopment of high quality is to take place, if the area in question is then owned by a number of different individuals, some of whom do not wish, or are not able, to redevelop when the rest of the redevelopment is going forward.

The noble Lord, Lord Kennet, is saying on behalf of the Government that this, the securing of far-sighted unified redevelopment, is less important than enabling the existing leaseholders to secure their capital gains on their houses. He is saying that what he cannot contemplate is any interference with enfranchisement, and on these well-managed estates enfranchisement means capital gains to the leaseholders. I am saying that before we legislate to provide for these untaxed capital gains to individuals who hold leases on these well-managed estates, we should consider carefully what we are sacrificing. It appears to me that we are sacrificing the ultimate opportunity of comprehensive, wise and far-sighted redevelopment of the quality which we had in the original development. This is why I have been pressing the Government. Certainly up till now I have not seen any way in which this redevelopment can be secured except on the lines of the earlier clause of the noble Lord, Lord Silsoe, which would stop enfranchisement in these areas. There may be some other way, but I have not yet discovered it.

Frankly, I think that the noble Lord, Lord Silsoe, who obviously attached a great deal of importance to what can or cannot be done under Clause 19, will be no more convinced by the Government's answer than I have been. I can only hope that in the next two or three months it will be brought home to the Government that the eventual comprehensive redevelopment of these well managed estates or parts of them is an object of high priority in the national interest, and that Clause 19, whatever form it takes, should be so drafted that it will contribute towards that and not militate against it. Having said that, I repeat that this was a probing Amendment and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 23 [Agreements excluding or modifying rights of tenant]:

LORD KENNET

My Lords, this Amendment and the next are consequential to an Amendment which we carried to Clause 14. They also make drafting corrections with which I need not trouble the House. I beg to move.

Amendment moved— Page 43, line 41, at beginning insert ("section 14(5) and (5A) above and,").—(Lord Kennel.)

On Question, Amendment agreed to.

LORD KENNET

My Lords, I beg to move.

Amendment moved— Page 43, line 42, leave out ("section 14(5) above").—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 28 [Retention on resumption of land required for public purposes]:

LORD KENNET

My Lords, this Amendment is put down to honour the undertaking given by my noble friend the Leader of the House to the noble Lord, Lord Molson, who was moving an Amendment in the name of the noble Lord, Lord Ilford, about the word "shortly". If I remember rightly, the Amendment on Committee proposed seven years "or such time as the Minister may determine".

LORD ILFORD

My Lords, it referred to seven years, and the noble Earl the Leader of the House thought that ten was better.

LORD KENNET

My Lords, the Amendment before the House has ten because that is precedented in earlier legislation. Unless the noble Lord has a special reason for preferring seven, I will not detain the House but simply say that I am glad to have been able to meet him at any rate so far. I hope that three years will not stand between us. I beg to move.

Amendment moved— Page 47, line 40, leave out ("shortly") and insert ("in ten years or less").—(Lord Kennet.)

On Question, Amendment agreed to.

LORD BROOKE OF CUMNOR

My Lords, I never seek to move a manuscript Amendment without apologising to the House. I hope that your Lordships will feel that in this case there is some excuse for doing it in this way. This is an Amendment which will more effectively achieve the purpose which I was seeking to achieve in Committee by an Amendment to subsection (6) of Clause 28. The Government were good enough to say that they thought the point was a valid one, and that they would look into it further and see whether a more successful Amendment could be drafted.

The point is that under the Bill as it stands the advantages of Clause 28 may be lost if part of the land is to be redeveloped under the auspices of a local authority by a private developer. In certain cases it is agreed to be desirable that that should be done, and it would be a pity if the law were to forbid it. When I said "under the auspices of a local authority", what I meant was that a local authority might, as part of a comprehensive redevelopment scheme, make land available for private development. It is that which would be frustrated by the Bill as it stands.

The Government were good enough to accept my first Amendment in principle, though not in wording, and to help with the correct drafting of this Amendment. It was only the fact that I did not receive the correct drafting in time to get it on to the Marshalled List, that has led me to venture to move it as a manuscript Amendment. I understood that the Government were friendly to it, and I thought that, assuming that the Amendment were to be inserted in the Bill it would be convenient to all concerned if it could be inserted at this stage and not on Third Reading. I beg to move.

Amendment moved— Page 49, line 37, leave out ("so that") and insert ("in relation to a local authority includes any development to be undertaken, whether or not by that authority, in order to secure the development or re-development of an area defined by a development plan as an area of comprehensive development. However—").—(Lord Brooke of Cumnor.)

LORD KENNET

My Lords, I am only sorry that in seeking to do a courtesy to the noble Lord by sending him this Amendment rather than put it down myself, I have inadvertently caused him to do an apparent discourtesy to the House by sending it to him too late to put on the Marshalled List. I apologise both to him and to the House and support the Amendment.

On Question, Amendment agreed to.

Clause 38 [Modification of right to possession under Landlord and Tenant Act 1954]:

5.38 p.m.

LORD BROOKE OF CUMNOR moved to leave out subsection (1) The noble Lord said: My Lords, I cannot see the point of subsection (1). It seems to undo something which was done by the 1954 Act. In justice to all concerned, I want to submit to your Lordships that that should remain the law. The subsection refers back to Sections 12 and 13 of the Landlord and Tenant Act 1954, which deal with the grounds on which a landlord may apply to the court for a resumption of possession. Some of those grounds are much in line with the circumstances justifying a court making an order for possession under the Rent Acts. But there is in Section 12 of the Act a further ground on which the landlord may apply to the court for possession—that is, if for the purpose of redevelopment after the termination of a tenancy the landlord proposes to demolish or reconstruct the whole or a substantial part of the relevant premises.

If this Bill goes through there will be three possibilities for the leaseholder: he may enfranchise under this Bill; he may seek an extended lease under this Bill; or he may, under the 1954 Act, exercise his existing option to seek a new tenancy on rack-rent terms. It is that last option that we are discussing at the moment, because under Section 1 of the 1954 Act the tenant has given to him a right to a new tenancy, and it is only in circumstances mentioned in Sections 12 and 13 that he may not be able to exercise that right.

Why, because the tenant is being given two new options under this Bill, should any part of the landlord's rights under the 1954 Act be taken away from him? The tenant is not bound to exercise the option under the 1954 Act. He has now made available to him under this Bill two extra options which may well be even more attractive to him. Why should not the 1954 Act be left entirely unchanged in this respect? I am not aware that the Government have offered any explanation, certainly any convincing explanation, why the balance in the 1954 Act should be altered, and my purpose in moving this Amendment is to say to your Lordships that in this respect it appears to me that it would be right that the 1954 Act should remain unamended. I beg to move.

Amendment moved— Page 64, line 28, leave out subsection (1).—(Lord Brooke of Cumnor.)

LORD KENNET

My Lords, the Bill as it is before the House is really a tidying up operation in the general statutory protection given to tenants. The noble Lord said that he does not see why the 1954 Act should not stay as it is. The short answer to that is that the Government do not think the 1954 Act was right in this respect. There was an anomaly in it, in that rack-rent tenants were protected by the 1954 Act in a manner familiar to all noble Lords, and leaseholders at the end of their lease were not. It is as simple as this: that the Government thought this Leasehold Reform Bill the obvious opportunity to correct that anomaly.

The noble Lord said that at the end of his lease the leaseholder had two different options which might be more attractive: presumably, to enfranchise, or to take out the new 50-year lease. But there will be some leaseholders who cannot enfranchise, for one reason or another, particularly those who have not been there long enough, who come in at the fag-end, and it seemed to the Government that they ought to have the same protection as ordinary rack-rent tenants at the end of the arrangements. What we are doing is to take this opportunity of protecting leaseholders in the same way as other tenants are already protected by the 1954 Act.

LORD BROOKE OF CUMNOR

My Lords, I am afraid I cannot understand the noble Lord's argument. He has first of all spoken about the 1954 Act provisions as though they would apply to rack-rent tenants. The 1954 Act provisions apply to cases where a long lease is reaching its termination, and the Act says that at the end of a long lease a tenant may normally obtain a new tenancy on rack-rent terms, save in certain particular cases. One of these cases is the one that is mentioned here. First of all, this is nothing to do with security for the ordinary tenant under the Rent Acts. We are talking about the man who is a leaseholder under a lease.

LORD KENNET

My Lords, before the noble Lord goes too far into the point, perhaps I can save time by saying that I was being completely muddle-headed. I should have not said that the rack-rent tenant is protected by the 1954 Act. He is protected by the Rent Acts in general, and what we are seeking to do in this Bill is to give the leaseholder a protection equivalent to that which rack-rent tenants obtain from the Rent Acts in general. I apologise to your Lordships for the error.

LORD BROOKE OF CUMNOR

My Lords, I am grateful to the noble Lord for what he has said. We appear now to be talking solely about somebody who has acquired the fag-end of a lease—and very much the fag-end, because if he has been in occupation for five years he will be able to take advantage of an extended lease, even if he cannot afford to enfranchise. Is it really right that we should make special new provision in this Bill for somebody who has bought less than five years of the fag-end of a lease? I cannot see that that case is made out. It is wholly different from the normal case we are considering, of the person who has been a leaseholder for a considerable time and remained in occupation. It is to his benefit that this Bill is directed. Now we are coming to somebody of a quite different character. He may have acquired just the very last few months of a lease, and he is to be enabled now to frustrate redevelopment which might otherwise have been imminent. I really think that I must press this Amendment unless the noble Lord has a more convincing reply to make as to why we should go out of our way in this Bill to amend the 1954 Act in this respect.

LORD KENNET

My Lords, since I am to have the pleasure of a discussion with the noble Lord during the Recess, in any case, may I suggest to him that if he would be prepared to withdraw his Amendment on this occasion we could add this subsection to the agenda for that day?

LORD BROOKE OF CUMNOR

My Lords, I am grateful to the noble Lord. His previous offer of that kind to another noble Lord was not so successful, but this time it will be. On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD KENNET

My Lords, this Amendment is consequential on the one that we have just approved, replacing "shortly" by "in ten years or less". I beg to move.

Amendment moved— Page 64, line 41, leave out ("that ground is established") and insert ("the property is so required").—(Lord Kennet.)

On Question, Amendment agreed to.