Property law is theft, say lords of land: Marianne Macdonald on the proposed help for leaseholders that has upset landowners

NOT SINCE the repeal of the Corn Laws in 1846 has the Conservative Party faced such hostility from the aristocracy, and defections from the party by the landed gentry, as have blown up over reforms of leasehold laws.

The conflict over the innocuously named Housing and Urban Development Bill is the more poignant because the landowners see the reform, which will give leaseholders the right to buy the freehold of their homes, as attacking the right of private ownership. Yet to extend this right is one of the Government's aims.

Wealthy landlords who will be affected, such as the Duke of Westminster, have been generous contributors to the Conservative Party. Tory peers cannot understand how the Bill, which has gone through its Commons stages, came about in the first place. They see it as a socialist-style attempt to extend home ownership to the smaller householders while withdrawing it from the larger landlords, in order to give 750,000 flat-dwellers the right to buy their homes.

It is a substantial blow for the Duke of Westminster, who owns 100 acres of Mayfair and 200 acres of Belgravia, which he regards as the 'jewel in the crown' of his holdings. That is why he resigned this month as Conservative Party Association chairman in Chester, a post he has held since 1977.

The duke has raised hundreds of thousands of pounds for the party since 1977 by hosting fund-raising dinners, and is the man who was reportedly once given as a gift a Monopoly set on which he owned all the properties.

The Bill has been described by Sir George Young, the Housing Minister, as 'an essential part of our policy on extending home ownership'.

Leaseholders believe it will tackle problems associated with bad management of flats and the difficulties of selling short leases.

But John Barnes, of the London School of Economics, a specialist in British government, says: 'The Conservatives are now finding a tension between their decision to try to extend ownership to more people and the principle of ownership itself.'

On Friday, Earl Cadogan, who owns Sloane Square and 90 acres of Chelsea, announced that he was withdrawing financial support from the party.

Lord Howard de Walden, who owns 120 acres of Marylebone, accused the Tories of theft and hinted he might switch allegiance to Labour, adding: 'Why the Conservatives should bring this Act leaves me gasping. It's nothing but confiscation.'

Other Conservative peers are unhappy about the Bill. Lord Brougham and Vaux summed up their reaction: 'I think it's rather anti-Conservative.'

The Duke of Devonshire, who made headlines when he abandoned the Conservatives for the SDP in 1982, agreed: 'I would have thought it was more suitable for a Labour government.'

The Earl of Dudley said: 'I see it as an excuse for people to be able to acquire freehold property at below the market price.' Lord Forbes said: 'I can't think it's right to take away someone's heritage and let others have it.'

Rail privatisation and army cuts and the lack of strong leadership are also causing ripples among politically-minded peers.

Whether the Duke of Westminister's resignation is of much significance is disputed.

Professor Frank O'Gorman of Manchester University, a historian of the modern Conservative Party, believes the party should be 'very worried indeed - the Grosvenor connection with Chester goes back to the 17th century: it has always been a very proud aristocratic constituency'.

But Professor John Ramsden, of Queen Mary and Westfield College, London University, says dismissively: 'What has the Duke of Westminster resigned from? The presidency of Chester Conservative Association. He held a purely honorary title in one of 650 constituencies.'

Many previous conflicts between the aristocracy and the Conservative Party have been over policies which hit their pocket and their estates, but there have been few resignations.

Most recently, the Marquess of Salisbury resigned from the Cabinet in 1957 over the speed of decolonisation.

It is ironic that the actions of the duke and the earl mean Labour stands to profit indirectly from a Bill that mirrors its own 1967 Leasehold Reform Act, introduced by Harold Wilson.

That aimed to give leaseholders the right to buy freeholds, but excluded leaseholders with higher rateable values after heavy lobbying by landowners.

In 1986 the Duke of Westminster led an unsuccessful challenge against it in the European Court of Human Rights. The Act forced him to sell 80 houses, for pounds 2.5m.

(Photograph omitted)

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