Sian Skerratt-Williams considers what Welsh Labour’s manifesto pledges mean for property.
The Senedd (Welsh parliament) Election on 6 May 2021 was the sixth devolved general election in Wales. Welsh Labour won with a comfortable 30 out of the 60 seats, with the Conservatives winning 16 and Plaid Cymru 13.
This article takes a look at some of the new government’s pledges and proposed policies that catch the eye from a property viewpoint.
In its pre-election manifesto Moving Wales Forward, Welsh Labour announced that it “is fired with the ambition to create the different, sustainable, exciting Wales of the future”. One notable feature of the manifesto is a distinct and overarching focus on the environment, with a general promise to build a greener Wales and create a greener economy.
Specific pledges include:
- Investment for the long term in a green and modern infrastructure, with a commitment to publish a new 10-year Wales Infrastructure Investment Plan for a zero-carbon economy.
- Putting nature and climate on the agenda of every public service and private sector business and looking for an environmental return on any public investment.
- A Clean Air Act for Wales.
- Continuing the policy of opposing the extraction of fossil fuels in Wales both on land and in Welsh waters and expanding renewable energy generation, working towards a target of 1GW in public sector and community renewable energy capacity by 2030.
- Supporting innovation in new renewable energy technology and aiming to make Wales a world centre of emerging tidal technologies.Since the election, the first minister has reiterated the Welsh government’s commitment to a green agenda. In a written statement published on 13 May 2021, he declared that the environment will be at the heart of decision-making: “In my new government, the environment will not just have a seat at the cabinet table; it will be a consideration in everything we do.”
Significantly, a new climate change ministry has already been established, bringing together the environment, energy, housing, planning and transport portfolios.
A key area and a quandary
The manifesto includes a pledge to enact the Law Commission’s recommendations relating to leasehold, which include limitations on ground rent in long residential leases.
This confirms that work done in this area by the previous Welsh government, also Labour, is likely to be continued. A written statement was published on 17 March 2021 by the then Welsh minister for housing and local government entitled Next steps on leasehold reform. In it the minister reported on a research paper commissioned on the operation of leasehold in Wales, concluding that there is compelling evidence to show that there is no good reason for imposing monetary ground rent in leases. The minister continued that she had written to the UK government requesting that Wales be included in its proposed legislation restricting ground rents and that their respective officials work together on it, but added: “It will be for the next administration to consider the merits of taking forward the… legislation in respect of Wales through the legislative consent process.”
The “legislative consent process” is when the UK government seeks the consent of the Senedd to legislate on an issue falling within the competence of the latter. The minister’s approach assumes that leasehold reform is an area devolved to the Senedd – but is it?
Legislative devolution is a complicated matter, particularly when it comes to residential leasehold law. While “housing” is devolved, “property law” is not and the draft explanatory notes accompanying the UK parliament’s Leasehold Reform (Ground Rent) Bill explicitly state that: “The subject matter of this Bill is the law of property which is a reserved matter [reserved to Westminster] in relation to Wales.” If that is indeed the case, the Senedd will have much less say in the matter.
So where does that leave us? As the research paper mentioned above points out: “The complexities of the devolution settlement will need further consideration at the implementation stage of any policy proposals related to leasehold…”
Short-term tenancies of dwellings, on the other hand, are generally accepted as falling under housing, as evidenced by the Renting Homes (Wales) Act 2016. The manifesto states that this, as amended, will “make renting a home in Wales simpler and fairer and… will mean security of tenure in Wales will be greater than elsewhere in the UK”. A consultation on accompanying regulations closed on 16 June 2021 and the Act, which has not yet come into force, is expected to do so in spring 2022.
Other pledges of interest
- a national scheme restricting rent to local housing allowance levels for those priced out of the private rental market;
- keeping the 1% increase in land transaction tax on second home purchases and exploring effective tax, planning and housing measures, possibly including local rates of LTT;
- a new Digital Strategy for Wales;
- improvements to building safety;
- masterplans for towns and high streets;
- a new register of empty buildings; and
- co-ordinated regional transport and land use planning.
Perhaps surprisingly, there is no mention of freeports. However, the UK government’s first Plan for Wales published in May 2021 commits to establishing at least one freeport in Wales as soon as possible. The previous Welsh government commented that: “We are willing to work with the UK government to explore the introduction of Freeports in Wales.”
Looking further ahead
In terms of big-picture aspirations, the manifesto sets out ambitions which have the potential of widening the devolution gap even further. These include the establishment of an independent commission to consider the constitutional future of Wales and making the case for greater tax devolution.
One thing is clear: the new Welsh government will not be resting on its laurels.