Lords Sitting of 22 June 1972

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

AIR FARES ON B.E.A. SERVICES
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of their responsibility concerning United Kingdom policy and international air service agreements, they will themselves recommend to B.E.A. that scheduled seats on the airline, in addition to being used for B.E.A. package tour business, are also make available to normal scheduled travellers at a similar reduction; or, alternatively, whether they will request B.E.A. to discuss the matter with the Civil Aviation Authority with a view to introducing individual excursion fares throughout Europe.
EARL FERRERS: No, my Lords. It is the responsibility of the airlines to negotiate individual fares and fare structures, which are then subject to the approval of the Civil Aviation Authority. It would accordingly be undesirable for Her Majesty's Government to intervene in this respect and to usurp one of the functions for which the Civil Aviation Authority was set up. However, the Government, with the co-operation of the Civil Aviation Authority, are playing a very active part in discussion with other countries on proposals which are specifically designed to enable airlines to make lower fares (to which the noble Baroness refers) available to a wider public.
BARONESS BURTON OF COVENTRY: My Lords, I thank the noble Earl. The second part of the Answer is much better than the first part. May I ask the noble Lord whether he is aware that we are all glad that B.E.A. is doing so well in
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the British charter business? Is he also aware that the airline is using its scheduled seats for this purpose? May I take it from his Answer that the noble Earl agrees that the time has now come when individual scheduled travellers should take some share in such reductions?
EARL FERRERS: My Lords, I am always apprehensive of agreeing with the noble Baroness, Lady Burton of Coventry, when she asks can she "take it from my reply". The answer is that this very point is being discussed, but, as she knows, there must be reciprocal arrangements between one country and another. It is this that is, up to a point, causing the hold-up. But I would assure her that British airlines are most progressive in trying to get lower air fares.
BARONESS BURTON OF COVENTRY: My Lords, I am glad the noble Earl, Lord Ferrers, qualified with "up to a point". May I ask him whether he recalls that the Government, the British Civil Aviation Authority and the airlines are at last publicly on record as stating that it is better to fly with full occupancy than with empty seats? This being the case, would it not seem desirable, in spite of what the noble Earl, Lord Ferrers, has just said, for B.E.A. to insist on individual excursion fares throughout Europe? Does he recall that when B.O.A.C. insisted on certain fares to Australia they won the day?
EARL FERRERS: My Lords, I entirely agree with the noble Baroness, Lady Burton of Coventry, that it is much better to fly with a full complement than with empty seats, but it is also important that the airlines should make a profit; hence the reason that one has to have a rather complicated structure to allow scheduled air services to operate and at the same time to enable airlines to make a profit.
BARONESS BURTON OF COVENTRY: My Lords, is the noble Earl, Lord Ferrers, not aware that obviously the air-lines financial viability is much greater if they have full occupancy, even with i people not paying full fares, than if they have empty seats?
EARL FERRERS: My Lords, it depends upon the cost of the fare.

THE WHITEHALL PLAN
3.11 p.m.
LORD ILFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the present situation with regard to the Whitehall Plan.
THE PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, my right honourable friend the Secretary of State for the Environment is considering the future of the Whitehall area in the light of the recommendations made by Mr. Harold Willis, Q.C., and in the context of the proposed new Parliamentary extension.
LORD ILFORD: My Lords, I am obliged to my noble friend for his Answer, which is encouraging but not sufficiently encouraging. May I ask him this question? Can he give any assurance that no final decisions will be taken on this plan until Parliament has had an ample opportunity of discussing it?
LORD SANDFORD: My Lords, I will certainly invite my right honourable friend to consider that point.
Loan REIGATE: My Lords, would my noble friend suggest to his right honourable friend that it might be a good idea if the Whitehall Plan were extended to cover an area not very far away where a very bulky and startlingly ugly building, a model of which is now on exhibition upstairs, is probably going to be put up and which will be nearly as ugly as Queen Anne's Mansions which have just been pulled down?
LORD SANDFORD: My Lords, I will not comment on the merits of any of the buildings that featured in this competition, but I did say that this enters into the considerations of my right honourable friend.
LORD GLADWYN: My Lords, can the noble Lord say whether the Whitehall Plan involves the demolition of the present Foreign Office building?
LORD SANDFORD: No, my Lords, I cannot. As noble Lords know, we have
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had Sir Leslie Martin's inquiry of 1965, Sir Robert Matthew's Inquiry of 1966, Mr. Willis's Inquiry of 1970 and the competition relating to the new Parliamentary building earlier this year. All these matters are interrelated.
LORD CHALFONT: My Lords, will Her Majesty's Government bear in mind the façade of the present Foreign and Commonwealth Office (it used to be the Foreign Office), which is one of Sir Giles Gilbert Scott's better elevations, when they are considering the future of the Whitehall Plan?
LORD SANDFORD: Yes, indeed.
LORD STRABOLGI: My Lords, may I ask whether the authorities are considering constructing a large underground car park under St. James's Park? Will they deny such rumours as it is one of the most beautiful parks in the world?
LORD SANDFORD: My Lords, That is quite another matter, with which I shall be happy to deal if the noble Lord will put down a Question.
LORD SHEPHERD: My Lords, the noble Lord undertook to consult with his right honourable friend that before a decision was made Parliament will be consulted. Would the noble Lord have a word with his noble friend the Deputy Leader of the House to see whether time could be provided prior to the decision in order that the House could express a view?
LORD SANDFORD: Certainly, my Lords.
LORD GORE-BOOTH: My Lords, may we take it that the Government have constantly in mind the importance of an early decision on this matter, from the point of view of the efficiency of Government right down to the most humble level?
LORD SANDFORD: Yes, my Lords. The fact that we have had three inquiries and the competition, all requiring a decision, points I think to the necessity of arriving at a decision; but when a decision is reached, it is important that it should be the right one.
LORD ILFORD: My Lords, do not these questions show that it is essentially

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desirable that decisions on this matter should be given at a fairly early stage?
LORD SANDFORD: Yes, my Lords. My right honourable friend is very conscious of this.

DOGS: LICENSING AND CONTROL
3.15 p.m.
LORD DE CLIFFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the review of all matters concerning the licensing of dogs, which was being carried out in January, 1971, has now been completed and when the result may be expected to be published.
EARL FERRERS: My Lords, there has been progress in the review to which the noble Lord refers, but a decision on the future of dog licensing needs to be made in the wider context of measures for the control of dogs generally. My right honourable friend the Secretary of State for the Environment will shortly be consulting the Local Authority Associations on this latter aspect.
LORD DE CLIFFORD: My Lords, I thank the noble Earl for his reply. This review appears to be lasting even longer than the inquiry into the matter of the Consumer Council referred to by the noble Baroness. Can we look forward to some early Statement as to when this decision is likely to come?—because there is a great demand for it, particularly in the rural areas, where there is a considerable amount of sheep-worrying.
EARL FERRERS: My Lords, my noble friend may look forward to it, but I cannot tell him exactly when in fact it will be.
BARONESS STOCKS: My Lords, can the noble Lord tell us whether, when the whole question of dog licences is under review, consideration will be given to increasing the cost of licences for dogs in urban areas, such as residential London areas, where the fouling of the pavements by dogs is becoming a serious problem?
EARL FERRERS: My Lords, that is doubtless one of the points that is being taken into account.
LORD AILWYN: My Lords, is my noble friend aware that over the years we have received similar answers from the Government Front Bench of both Parties on this point? For example, in 1959, after a full debate in this House on the question of licensing, we were assured by the noble Lord who answered for the then Conservative Government that this matter would receive urgent attention. Ten years later we had another full debate on this subject, when the Labour Government were in office, and we had a still fuller assurance from the Minister that the matter would receive immediate attention. Can my noble friend perhaps be a little more expansive on the likelihood of our getting a reply in the next year or two?
EARL FERRERS: My Lords, the problem is still receiving immediate attention. It is merely over the conclusion that the delay occurs.
LORD DAVIES OF LEEK: My Lords, is the noble Earl aware that Merlin, the Welsh wizard, had a corgi that he taught to read and write? With a little care these Welsh dogs are very intelligent, and the noble Earl would probably get over the trouble by teaching them to read and write.
EARL FERRERS: My Lords, that is a fascinating piece of information of which I was not aware.
LORD BARNBY: My Lords, does my noble friend recollect that in the two debates to which reference has been made it was reported that the dog population exceeded by some 2½ million the number of licences taken out? Can he now do anything to damp the hopes of those who evade obtaining dog licences, and have been doing so for a long time?
EARL FERRERS: My Lords, there is no official estimate of the number of dogs in the country, but the R.S.P.C.A. have quoted approximately 5 million at the present time. Slightly under 3 million licences have been taken out.
LORD POPPLEWELL: My Lords, is the noble Earl aware that while many local authorities have imposed by-laws prohibiting the fouling of pavements by dogs, it is remarkable how slow they are in enforcing them? Will he have a word with his right honourable friend to see whether it would be possible for the

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appropriate Department to send out a circular drawing the attention of local authorities to this matter, so that they will be a little more stringent in their attention to it?
EARL FERRERS: My Lords, local authorities have many pressing problems, and I suppose it is a question of whether this comes high up in the list of priorities. Some local authorities have introduced dog wardens.
LORD LEATHERLAND: My Lords, is the noble Earl not aware that, despite the fact that notices about the fouling of footpaths are posted upon lamp-posts, the dogs are unable to read them?
LORD COLERAINE: My Lords, may I ask my noble friend whether he has any information about the number of dog licences that will be cancelled by the Leader of the Opposition in another place by the time the Common Market Bill is through?
EARL FERRERS: My Lords, I am afraid that I am completely unable to give my noble friend the answer to that question.
LORD SLATER: My Lords, does not the noble Earl agree that the licence fee ought to be kept uniform as happens with motor cars, where the old form of taxation, in which the licence fee depended on the horsepower of the car was changed?
EARL FERRERS: My Lords, all these matters are being taken into account with regard to not only the cost of the licence, but who should claim it and what should be done with it. This is one of the points which I am sure will be taken into account.
LORD FRASER OF LONSDALE: My Lords, would it be a good idea to plant 5 million trees?

GAS COUNCIL'S CONTRACTS AND GAS PRICE
LORD BALOGH: My Lords, I beg leave to ask the question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they can make a statement
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on the results of the re-negotiation of the gas price paid by the Gas Council to firms with oil and gas licences.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK): My Lords, no; there has been no re-negotiation of any long-term contract.
LORD BALOGH: My Lords, are we to understand that the contracts were not carried out? There was a statement in this House that there would be a re-negotiation of the gas price paid to the oil companies this spring.
THE EARL OF LIMERICK: My Lords, I am unaware of any such statement.

NORTHERN IRELAND
LORD DENHAM: My Lords, with the leave of the House, my noble friend Lord Windlesham will be making a Statement on Northern Ireland at a convenient moment after 3.30 p.m.
BRITISH RAILWAYS BILL
Read 2a, and committed to the Committee on Unopposed Bills.
BRITISH TRANSPORT DOCKS BILL
Read 2a, and committed to a Select Committee.
ROYAL BANK OF SCOTLAND LIMITED WIDOWS' AND ORPHANS' FUND ORDER CON- FIRMATION BILL
Considered on Report.

SRI LANKA REPUBLIC BILL [H.L.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move, pursuant to Standing

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Order No. 45(2), that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Baroness Tweeds-muir of Belhelvie.)
LORD DAVIES OF LEEK: My Lords, I think I am in order in speaking now. It is not inappropriate at this moment with regard to Sri Lanka, this jewel in the Indian Ocean, to say that many of us on both sides of the House wish success to this beautiful island in its future existence as a Republic.
On Question, Motion agreed to.

HOUSING FINANCE BILL
3.25 p.m.
THE MINISTER WITHOUT PORT-FOLIO (LORD DRUMALBYN): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Drumalbyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 47 [Statutory tenants by succession]:
LORD STOW HILL LORD STOW HILL moved Amendment No. 109GT:
Page 51, line 34, at end insert—
("(3) In interpreting the word 'substantial' in the phrases 'substantial part of the whole rent' and 'substantial proportion of the whole rent' and 'proportion of the rent which is substantial' in section 2(3) and section 70(3) of the Rent Act 1968 and section 18(3) of this Act respectively parts or proportions of 20 per cent. or more shall be deemed to be substantial; parts or proportions of 15 per cent. or less shall be deemed not to be substantial; and parts or proportions of between 15 per cent. and 20 per cent. shall be deemed to be substantial or not substantial having regard to all the surrounding circumstances of the relevant letting.").
The noble Lord said: I beg to move that the words on the Marshalled List be inserted into Clause 47. The object of the Amendment is as follows: The distinction between furnished and unfurnished lettings has always been, and still is, of the greatest importance. The Committee know that the protection against
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eviction in the case of unfurnished lettings is still, and has been, very much more effective than the protection in respect of a furnished letting. If one looks to the relevant legislation to try to ascertain what in terms of definition is the distinction between a furnished and an unfurnished letting, one finds that it is contained in the word "substantial" which first makes its appearance in legislation going back to 1920. It is used on a number of occasions in the consolidation Act, the Rent Act 1968, and is again used in the Bill before the Committee to distinguish between unfurnished and furnished lettings. Broadly sneaking, the distinction is that a letting is furnished if a substantial part of the rent is paid for the use of furniture or services, and if something less than a substantial part of the rent is paid for furniture or services it is an unfurnished letting with the consequences which I have described.
The object of the Amendment is to seek to introduce some certainty into the definition that is to be used. That certainty would reside in the words that where the proportion of the rent is 20 per cent. or more, the letting shall be deemed to be a furnished letting; where it is less than 15 per cent. is shall be deemed to be an unfurnished letting; but where it is between 15 per cent. and 20 per cent. it will depend on the circumstances whether it is a furnished or unfurnished letting. Before Standing Committee E Mr. Douglas-Mann made what, if I may be allowed to say so without presumption, I thought was a most effective and cogent speech in support of an Amendment in these terms. Anybody who has had any personal contact with these matters will remember so vividly what Mr. Douglas-Mann described in his speech. If you were asked by a client with a modest income and in modest circumstances the simple question: "Am I a furnished or unfurnished tenant?" you would naturally ask, "How much furniture is there in the dwelling?" You may be told that there was some lino, a table, a bed, no curtains, and so on. You then have to ask yourself, in order to answer your client, "Was a substantial proportion of the rent payable for the dwelling attributable to the fact that there was some lino, a bed and a table?" It is almost impossible to answer that question.
Over and over again those who advised persons in modest circumstances, who wanted to know whether they were furnished or unfurnished tenants, simply could not tell them. All one can tell them—and those who have had contact with these matters remember this so bitterly—is that it depends on what learned judge the case goes before. One has to say, "You are in the area of such-and-such a county court district, and I can tell you that the learned judge who normally sits in the county court for that district takes a rather strict view as to what is a 'substantial proportion of the rent'." Another person in another area might ask you the same question, and then you would have to say, "The learned judge in this area takes a much more lenient view."
It is really like asking the courts to decide the length of a piece of string. Even if you have that degree of certainty which emerges from the fact that you knew which learned judge was going to try the case, and you knew what his broad approach to the matter was, you would still be in a difficulty if you were taken to the Court of Appeal on appeal from the county court because you would not know which learned Lords Justices were sitting on the day that the application was to be tried and, in consequence, you would not know what approach the Court of Appeal would be likely to take. I have always thought that this crucial part of our legilslation has been in a most unsatisfactory state. I believe that all practitioners who have had anything to do with this matter would readily agree that if there is one area of uncertainty where there ought to be certainty it is in this question: "Are you a furnished or an unfurnished tenant?" Occasionally the dwelling is crammed full of furniture and you know the answer; coversely, it may be completely emtpy and again you know the answer. The twilight areas and the areas of difficulty reside in those cases where there is some furniture and you do not know whether a substantial proportion of the rent is attributable to the furniture.
The matter was fully discussed before Standing Committee E and your Lordships may think it is a little supererogatory to raise the matter again before your Lordships' House. The Minister, Mr.
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Julian Amery, gave a full and careful reply in Standing Committee, for which I am sure everybody will be grateful, and I would not seek to revert to the matter unless I thought, as I do, that possibly some of the reasoning on which the Minister based his conclusions was open to question. The position is this. In 1946 there was a case Palser v. Grinling decided in your Lordships' House. It came from the Court of Appeal. In the Court of Appeal the learned Lords Justices laid down this numerical test which is proposed in the Amendment which I seek to move; that is, the 20 per cent. and the 15 per cent. test.
When the case came to this House on appeal, this House disapproved of that arithmetical test, and if I may cite shortly from the Opinions expressed in this House, these words were used:
"It must be left to the discretion of the judge of fact to decide as best he can according to the circumstances in each case, the onus being on the landlord. If the Judgment of the Court of Appeal in the Palser case were to be understood as fixing a percentage, as a legal measure that would be going beyond the powers of the judiciary, but to say that everything over 20 per cent. of the rent should be regarded as a substantial proportion of that rent would be to play the part of a legislator. If Parliament thinks fit to amend the statute by fixing percentages Parliament will do so."
It is that that I am asking the House to do: to say that a fixed percentage should answer the question. The Minister, when he gave his reply, reasoned in this way. He said to begin with that the Francis Committee proposed a different test—I will not trouble your Lordships with that, but I do not think it is quite so satisfactory. Broadly speaking, it is to ask the question: "Is the furniture sufficient for the tenant's needs in his actual circumstances?"
The Minister went on to say that the Francis Committee posed a number of questions with regard to furnished lettings which will have to be dealt with in due course by legislation, and suggested that it would be desirable to leave this issue over until that legislation was introduced. He concluded his speech as follows:
"In any event, even if you take the arithmetical test, that poses difficulties for the courts too, because the courts have in each case to decide whether the amount attributable was over 20 per cent., or above or under 15 per cent, or something in between."

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The reason—and I hope I do not trouble your Lordships unprofitably—is the following. I submit that this is such a crucially important matter that it ought not to wait over any longer. Legislation, I am sure, will in due course be produced to deal with furnished lettings, but it is everybody's experience that complicated legislation takes a long time—perhaps years—and the submission I make is that this House now has an opportunity to deal with it and to introduce some measure of certainty into this vexed problem, and it should now seize that opportunity.
The other reason which the Minister gave—namely, that the arithmetical test was not an easy one to judge by—I would suggest is not really well founded. It is not difficult for the courts to ascertain, in the case of an individual contract of letting, whether the rent as to more or less than 20 per cent. is attributable to the use of furniture and services. That is the sort of question which courts have to decide day in clay out, and it is far more productive of a precise answer than the wholly different question whether a substantial proportion of the rent is so attributable. Those are the reasons why I would ask the Committee to consider this matter once more. I think it is right that this matter should be dealt with once and for all.
It may not always produce the best answer, but it produces an answer and has the enormous merit of introducing certainty where uncertainty puzzles and perplexes ordinary people who say, "Surely my lawyer can tell me where I stand on this matter which is so crucial to me". Even if a better answer might be produced by the test proposed by the Francis Committee, I am desirous of introducing certainty into this vexed area. I beg to move.
LORD DAVIES OF LEEK; I do not wish to reiterate the arguments made by my noble friend, but may I appeal to the Government to look carefully at this matter, and if at the end they cannot accept entirely the Amendment so succinctly and cogently moved by my noble friend at least to consider it. May I say from experience that this is a part of legislation that needs tightening up because of the opportunities for extortionate
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rents being charged in less prosperous areas of the country, particularly in industrial areas where young couples are looking for jobs and when we need mobility in jobs to solve the problem of unemployment. It is important that nobody should be allowed to extract extortionate rents for what are, in some cases, under-furnished semi-slums which have a lump of shoddy linoleum, a rickety table and chair and a bed that could be described as worse than a camp bed.
As a Member in another place and as a young man in South Wales, I have had experience of this kind of extortion from persons who have no moral approach to this question. Because I am making this speech, do not let it be assumed that I am denigrating all owners who let furnished houses or rooms. I appeal to the Minister to listen to the appeal of my noble friend and to try to find an answer to what I agree is a difficult problem.
LORD JANNER: May I, as a practising solicitor for many years, having dealt with a large number of these cases, ask the House to consider whether it is not important to have something definite about the meaning of terms which are used? As everybody who has had anything to do with them knows, the Rent Acts have been the subject of a tremendous amount of litigation. Judges have differed since the year 1915 when the Acts first came in and have expressed the opinion that in some way or another certain sections of the Acts should be made clearer by legislation.
I want to support this Amendment on the ground that it is extremely difficult for a court to decide this particular issue of percentages. Maybe the Government think there should be a different proportion. That is a matter which I am sure the noble and learned Lord, Lord Stow Hill, would be prepared to consider. But the important feature is that there should be something definite that the layman can understand. If the layman cannot understand it, when he is seeking legal advice on the matter the solicitor advising him should not be placed in the usual position which prevails where things are indefinite, of having to say, "On the one hand, the court may decide this way; but it may decide some other way. It is in the lap of the gods."

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In my view, anything which can be done to make the position clearer by legislation itself is of considerable value to everybody concerned. It is true, as my noble and learned friend said, that we may err on one side or another so far as the proportions are concerned, but it is infinitely more important, in spite of that, that people should be in a position to know what the circumstances are. My noble friend who spoke before me pointed out the serious nature of this problem because bad landlords—I agree with him: it is not all landlords, obviously—in particular in the part of the world we are speaking about, in Wales, take advantage of a situation in which the position is not clear. If it were made clear in the Bill itself, or at any rate in some legislation, what the actual proportion is to be, at least people would be in a position to get a surveyor or somebody else to assist them, in so far as the value of the furniture is concerned, in comparison with the value of the rest of the tenancy. Then they would know what the percentage was; they would know from the valuation of a qualified person what was their actual position.
In my view, too, it would prevent the bad landlord from seeking to impose high rents on the plea that the letting was a furnished letting. He could not insist on the kind of rent which would then be appropriate—even though at a later stage a court may say he was wrong, and his excuse would then be that he thought the amount that should be charged for furniture was so much. I hope that in these circumstances the Government will see their way clear either to accept this Amendment or, if they have some other suggestion with regard to the proportions, to let us know what that is, so that we may consider whether they are likely to be right or whether the proportions given in this particular Amendment are correct.
3.43 p.m.
THE EARL OF BALFOUR: I have listened with great interest to what the noble and learned Lord, Lord Stow Hill, said. But again may I refer back to the 1968 Act. Section 2(3) of that Act and Clause 18(3) of this Bill, in regard to "substantial part" state that furniture and attendance form a substantial part
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of the rent. Section 70(3) of the 1968 Act almost reverses the meaning when it says:
if the value of the board to the lessee forms a substantial proportion of the whole rent".
Furthermore, in the Rent Act 1968, Section 68(3), Section 68 being the start of Part VI which refers to furnished lettings, reads:
"The power to make an order under this section shall be exercisable by statutory instrument".
Furnished lettings go back to the Furnished Houses (Rent Control) Act 1946. No Government have yet thought it necessary to take advantage of producing a Statutory Instrument to describe exactly what are furnished lettings. Therefore, I do not feel that this is either the right place or the right subject for going into a financial provisions Bill such as we are talking about in the Committee stage. Furthermore, as a final point, Clause 47 concerns statutory tenants by succession and in fact has nothing whatever to do with furnished lettings.
LORD DRUMALBYN: I should like to start first by saying that I am sure all of us in all parts of the Committee are anxious that landlords should not be able to escape the Rent Act protection for unfurnished tenants by providing meagre and inadequate furniture. But I would go on to say that it would be wrong to assume that, without the proposed Amendment, a tenancy with a few inadequate sticks of decrepit furniture would be likely to be classified by the courts as furnished. The noble Lord dealt with the present situation so far as the law is concerned. I would not dream of dissenting from what he said, but I should like to carry it one stage further, because, since the case of Palser v. Grinling which was decided in your Lordships' House, there has been a new leading decision in Goel v. Sagoo in 1970, which has laid greater stress on whether the furniture was sufficient for the tenant's purposes, and in fact accepted a particular tenancy as furnished where the amount of the rent attributable to furniture was only 6⅔ per cent.
The Francis Committee came to their conclusion that the borderline as defined in Section 2(3) of the Rent Act 1968 was no longer an apt test. And I agree with what the noble Lord said on this. They

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recommended that a furnished tenancy should be defined as:
"one under which the furniture, together with any fixtures and fittings provided by the landlord at the commencement of the tenancy for the use of the tenant, was substantially sufficient at that time to meet the tenant's essential domestic needs in respect of the use and occupation of the dwelling, having regard to the purpose for which, and the circumstances in which, the dwelling was let".
So they were not very far away from the Queen's Bench decision in Goel v. Sagoo.
The trouble is that the noble Lord is proposing an arithmetical solution which would move in the opposite direction, back to a much more arithmetical approach. In fact, it would tend to shift the uncertainty from whether the proportion of furniture was substantial in relation to the rent to the value of the furniture itself. It would, I suppose, have been possible in this Bill to have legislation along the lines proposed by the Francis Committee, but in the Government's view the present Bill does not provide the right occasion for going into this question because it is a very involved one. The Government believe that it would be wrong to incorporate in this Bill a decision in favour of the arithmetical concept at this stage, before there had been much fuller discussion and examination of the Francis Report.
I think it would be right to point out to the Committee that any solution which defines "substantial" by reference to a rigid proportion would have to deal with some inherent difficulties. In the first place it would involve fixing a standard percentage for "substantial" and in that way would simply shift the scope for argument on to the value to be placed on the furniture, and how that value is to be converted to a rental amount. In addition the Committee must bear in mind that rental values vary widely in different parts of the country, so a rigid percentage would apply unevenly over the country. If it were decided to have an arithmetical percentage it might be necessary to have separate percentages in different parts of the country. In the third place the result could vary widely according to whether or not the fixtures and fittings are easily detachable from the fabric of the dwelling.
These are in themselves considerable difficulties. Perhaps one of the most diffi-
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cult is the different proportion that one would find between furniture that is sufficient for the ordinary use of a tenant in relation to the rent in one part of the country as compared with another. A number of possible formulæ have been mooted from time to time and they all need to be examined, not just this particular one. Any new proposal would need to be closely examined by a number of bodies outside the Department. Before recommending an alteration of the borderline one would want to be as sure as one could possibly be that the new formula would stand the test of time, and one would need to reach an informed view on the extent to which it would in the long run help tenants and prospective tenants. I suggest that this is not the sort of problem on which it is wise to rush into action. It is not closely connected with this Bill, but it will be intimately connected with the other legislative proposals of the Francis Committee. There will be—and there must be—continuing studies, but obviously these cannot be furthered in the context of this Bill. Therefore I would invite the Committee to agree with another place, because, as the noble and learned Lord said, this matter has been fully debated in another place. I would invite the Committee to agree with another place that this is not the appropriate time to introduce a formula in this Bill, and that in any case before we decided on an arithmetical test it would need a great deal more consideration than we could give it at the moment.
BARONESS GAITSKELL: May I be enlightened about this particular subject? I find myself in agreement with, and as bewildered as, the noble Earl, Lord Balfour. I cannot find any reference to furnished tenancies in this Amendment. It does not appear to me to "square up" with Clause 47, or with page 51, line 34, and I should like to be enlightened on the matter.
LORD DRUMALBYN: It is for the noble and learned Lord, Lord Stow Hill, to explain his own Amendment, but my noble friend Lord Balfour referred to Section 2(3), which is mentioned in the Amendment, and the point there is that under Section 2 of the Rent Act 1968 a tenancy is not a protected tenancy if
"(b) under the tenancy the dwelling-house is bona fide let at a rent which includes payments

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in respect of board, attendance or use of furniture."
Then there follows subsection (3), which says:
"For the purposes of paragraph (b) of subsection (1) above, a dwelling-house shall not be taken to be bona fide let at a rent which includes payments in respect of attendance or the use of furniture unless the amount of rent which is fairly attributable to attendance or use of furniture, having regard to the value of the attendance or the use to the tenant, forms a substantial part of the whole rent."
Does that explain it to the noble Baroness?
BARONESS GAITSKELL: I thank the noble Lord.
LORD DIAMOND: I can well understand my noble friend Lady Gaitskell having difficulty when the whole Bill legislates by reference—that is to say, continual reference to a number (my latest count is seven) of other Rent Acts of one kind or another, rather than including the provisions. But it is well understood that this is a field in which there are many Statutes and much complication, and all I can offer my noble friend is my heartfelt sympathy, which I hope is in a measure reciprocated.
We are grateful to the noble Lord for what he has said. I think this was the right point at which to introduce this important issue, and I listened carefully to what he said about the Francis Committee. I should first like to thank my noble and learned friend Lord Stow Hill for having put the matter with the authority which only he can command and the clarity which falls so easily from his lips. As to the Francis Committee, I am glad to know that the Government are considering rather than rushing into a conclusion. Frankly, with regard to the recommendations of the Francis Committee on this issue—and I shall be short, as we are in a great panic for time—we do not like them, and I hope the noble Lord will be good enough to "take that on board". We do not think that the approach to the distinction here is a good one. We recognise the work that the Francis Committee has done; we recognise that in a sense the Labour Government was the parent of the Committee; nevertheless we do not like this conclusion on this particular issue. So in a sense we are glad that the noble Lord and his Government have not rushed to a
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conclusion on this particular matter and proposed in this Bill (the heart of which does not refer to this actual issue) that the recommendations of the Francis Committee should be embodied and should become statute law.
On the other hand, we think it will be some time before the matter can be fully discussed, ventilated, clarified and legislated upon. In the meantime, the proposal which my noble and learned friend put forward seems to me to be the best proposal that is available. I do not share the view of the noble Lord, Lord Drumalbyn, that there are as many difficulties in the new proposal as in the existing situation. The difficulty of determining what are landlords' fixtures and what are tenants' fittings is not great and is certainly not novel. That is a matter which has been going on for a long time. The difficulty of determining the value to be put on the furniture is not great. There cannot be a great deal of difference between two valuers as to what that is. It is a small matter.
THE LORD CHANCELLOR: I should like to tell the noble Lord that I once fought a county court case, which subsequently became a reported decision, in which one valuer put a value of £20 on a piece of furniture while another valuer put £150 on it.
LORD DIAMOND: Well, there is a difference there of £130. The proportion, of course, is substantial but there is a difference of £130 and the noble and learned Lord who temporarily does not sit on the Woolsack thought this was a remarkable case, but I think it illustrates my point. By the time you have converted that amount into a percentage which affects the rent, the percentage on £130 can be very small indeed. Therefore I do not think that even in extreme cases there would be a great difficulty in an adjudicating body reaching a fairly firm conclusion as to the bracket within which the value of this furniture might fall.
The third difficulty brought forward by the noble Lord, Lord Drumalbyn, was converting the capital value into a percentage in terms of rent. This is a regular procedure that is followed scores of times a day when any buyer is buying and any seller is selling in the property market. The

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market has a percentage which is available to anyone who wants to know what it is, and at the moment there is a maximum difference in contemplation of 1 per cent., so that that does not present a great difficulty. In these circumstances, I regret that the noble Lord has not thought fit to accept the Amendment. It would have protected the tenant a little more than he is protected now and it would have clarified the situation. Having said that, I do not think the issue is one on which we need divide the House. Having noted that the Government are considering these matters and in the hope that, with their usual good sense, they will take account of what my noble and learned friend has said, I imagine that my noble and learned friend will not wish to pursue the matter unduly.
LORD STOW HILL: I thank the noble Lord, Lord Drumalbyn, for his answer; I am not at all sure that I was inviting the Committee to rush into a problem which has subsisted in an acute form since 1920. In any event, I accept the rebuke. My noble friends were puzzled as to why this Amendment had found its place in relation to Clause 47. I apprehend that those who prepared the Amendment thought that this would be an appropriate Part of the Bill, being headed "Miscellaneous", for it, as they no doubt considered that this was a miscellaneous matter. Having put your Lordships in possession of the considerations, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: My Lords, if it is your Lordship's desire, I beg to move that the House do now resume for a Statement.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

NORTHERN IRELAND: REPUBLICAN MOVEMENT'S PEACE OFFER
4.3 p.m.
THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM): My Lords, may I repeat a Statement which is now being made by my right honourable friend the Secretary
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of State for Northern Ireland in another place? The Statement is as follows:
"The House will be aware of the statement put out earlier this afternoon on behalf of the Republican Movement to the effect that the I.R.A. will suspend offensive operations as and from midnight on Monday, 26th June, 1972, provided that a public reciprocal response is forthcoming from the Armed Forces of the British Crown. As the purpose of Her Majesty's Forces in Northern Ireland is to keep the peace, if offensive operations by the I.R.A. in Northern Ireland cease on Monday night, Her Majesty's Forces will obviously reciprocate."
LORD BESWICK: My Lords, we thank the noble Lord for repeating that Statement, which appears to be a significant one; and anything which holds out the prospect of a lessening the maiming and killing of Irish by Irish is to be welcomed. Needless to say, all of us in this House will share a sense of relief that our Servicemen are likely to be put at less risk.
May I put two questions to the noble Lord? First, will he make clear what is meant by the "Republican Movement"? Can he confirm reports that the Provisionals of Londonderry are included in the Republican Movement, so far as this statement is concerned? Second, may I ask about the Protestant majority and the extent to which they have been consulted about the consequences and implications of the statement, or whether they are to be consulted?
LORD AVEBURY: My Lords, we should of course reserve comment on this matter for a future occasion, because the less said now the more likelihood there is that this initiative will result in lasting peace in Northern Ireland. But may I ask the noble Lord to convey to the Secretary of State our congratulations on the policies which he has followed since taking office, policies which we believe have had a very salutary effect and are partly responsible for this happy conclusion?
LORD WINDLESHAM: My Lords, I must first thank both noble Lords for what they have said. I understand the announcement was made shortly after two o'clock this afternoon on behalf of

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the Republican Movement. I am afraid that I am not in a position to add to what is contained in the Secretary of State's statement as to the meaning of that phrase. The reference to the I.R.A. does not distinguish between the Official and Provisional wings of the I.R.A. and of course the Official I.R.A. have already declared a cease-fire.
As regards Londonderry, I believe there has been a later report this afternoon to the effect that the Republican leadership in Londonderry have said that they will follow this decision, and that the future of the "no-go" areas is something to be considered. I am most grateful to the noble Lord, Lord Avebury, for his comments about the policies of the Secretary of State in moving towards the sort of conditions in which a cease-fire is possible. This has played a major part in this development.
LORD BESWICK: I do not think the noble Lord answered my second question about other consultations.
LORD WINDLESHAM: My Lords, it is difficult for me to say anything very much about consultations, since this announcement has become known only this afternoon. Protestant opinion is of course extremely important, and we recognise that. We are in regular touch with a wide range of Protestant opinion and shall continue to be so in the new situation.

HOUSING FINANCE BILL
4.7 p.m.
House again in Committee.
LORD DIAMOND LORD DIAMOND had given Notice of his intention to move Amendment No. 109GU:
Page 51, line 34, at end insert—
("(3) Paragraph (a) of subsection (1) of section 1 of the Rent Act 1965 shall cease to have effect.")
The noble Lord said: The subject matter of this Amendment is already contained in Amendment No. 125, which stands in the name of the noble Lord, Lord Drumalbyn, and Amendment No. 137, which stands in the name of the noble Lord, Lord Bethell. It would therefore be appropriate to discuss it with one or other of those Amendments. In the belief and hope that surrendering our
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position at the head of the Marshalled List to a later stage in the List will in no way prejudice our ability to discuss this matter fully, I do not desire to move Amendment No. 109GU.
Clause 47 agreed to.
Clause 48 agreed to.
Clause 49 [Duty of authorities to charge fair rents]:
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWFL): Perhaps I should point out at this stage that if Amendment No. 109GV is agreed to, I shall be unable to call the following Amendment, No. 109GW.
LORD DIAMOND LORD DIAMOND moved Amendment No. 109GV:
Page 52, line 6, leave out from ("dwellings") to end of line 7 and insert ("a rent which in the judgment of the local authority or new town corporation is reasonable provided that the aggregate of rents charged by a local authority or new town corporation shall not exceed the costs of providing the said dwellings plus the costs of managing, repairing, maintaining and improving the same and their associated amenities").
The noble Lord said: Before explaining the reason why we have tabled this Amendment, I should perhaps ask for the understanding of the Committee in the difficulties which will face the Opposition from this point onwards. I see from the Order Paper that this is the seventh day in Committee. As I see the noble Lord, Lord Sandford, in front of me I had better make it quite clear that there is no relationship between this and any other seventh day which may be in noble Lords minds. This is the seventh day, and we have agreed to complete our Committee discussions in a further period ending on Tuesday night. In my view there is no possibility whatever of doing justice to the remaining Amendments and completing consideration in the time in which we have agreed to complete consideration. We have agreed it; we stick to our agreement. So far as I am concerned, I have always held the view that one of the greatest advances in democracy is the "agreed" as opposed to the "imposed" timetable.
It is, in such circumstances we shall have to deal with a vast number of very important Amendments, because your Lordships will recognise that we are barely one-third of the way through in terms of pages and possibly half the

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way through in terms of parts of the Bill. We have entered into our seventh day out of 9½. The arithmetic does not tally, but nevertheless we shall do our best. That is why I shall seek your Lordships' indulgence in putting forward the arguments for these various Amendments inadequately and with excessive brevity. I hope the Government will manfully be able to disguise their displeasure on hearing that I am going to discuss these matters with excessive brevity.
The Amendment which I now move is perhaps one of the most important Amendments in the whole of the Bill because it deals with essential contact of Part V of the Bill, which is really the guts of the Bill and which provides for what is euphemistically, fantastically, and unbelievably called "fair rents" for housing authority dwellings. The Amendment proposes that from "dwellings" on line 6 one should leave out the words to the end of line 7 and insert instead
"a rent which in the judgment of the local authority or new town corporation is reasonable provided that the aggregate of rents charged by a local authority or new town corporation shall not exceed the costs of providing the said dwellings plus the costs of managing, repairing, maintaining and improving the same and their associated amenities".
It is clear that there are two parts to this Amendment: first, that the rent to be charged shall be reasonable and, secondly, that it shall not exceed—that is to say that there shall be a ceiling, though the floor is not described—the cost of providing the said dwellings with all reasonable associated costs.
The first argument I have to put before your Lordships is that the rent should be reasonable. In this connection I do not think I can put any better argument than the views of the Government, and I read the views of the Government as expressed in recent legislation. Those views are:
"Subject to the provisions of this part of this Act a local authority in respect of the tenancy or occupation of houses etc., may make such reasonable charges as they may determine".
That sentence is not taken from the English Act; that is the Scottish Bill which came before your Lordships' House two days ago and was moved by the Government. It provides that local authorities "may make such reasonable
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charges as they may determine". So, there is no difference between the Government and the Opposition on the point that a local authority should in appropriate cases have power to make reasonable charges in respect of rent. Indeed, that is what local authorities in England and Wales have been doing for years and are doing at the moment. It is for the Government to justify why we should depart from what England and Wales have been doing and what Scotland is being required to do in the legislation being brought forward by the Government.
Of course, this would not only enable rents to be reasonable, but it would serve a second purpose; it would restore a much needed sense of confidence to local authorities. Local authorities are having a bad time at the hands of this Government. Somewhere or other—it is not quite clear where it is at the moment—there is a Bill brought forward by Her Majesty's Government to alter and to reduce very considerably the powers of many local authorities. In the Bill which we are now discussing the power of local authorities who fix rents is being reduced to nothing; it is being destroyed completely. This power of local authorities to fix rents for their own citizens, is a power which they have had for very many years indeed. I think that the need for local authorities to feel that they are able to carry out a responsible task is great. Here again, I do not think I can do better on this issue than to quote the Conservative Manifesto at the last General Election—the Conservative "bible" as one might say. It reads as follows:
"The independence of local authorities has been seriously eroded by Labour Ministers. On many issues, particularly in education and housing, they have deliberately overridden the views of elected councillors. We think"—
I am quoting here, and when I say "we think" it is of course the Conservative Party which is doing the thinking; and a nice change, too—
"it wrong that the balance of power between central and local government should have been distorted and we will redress the balance and increase the independence of local authorities."
Your Lordships would not expect me to say that I would vote Conservative, but I would certainly vote for that state-

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ment: "We, the Conservatives, will increase the independence of local authorities". The Amendment which we are proposing therefore fits in completely with Government policy. It provides (a) for local authorities having the discretion to fix reasonable rents as in the Government's Scottish Bill, and (b) for local authorities having their independence increased as stated in the Conservative Manifesto at the last General Election. So far I am sure we are all walking hand in hand. One might almost say, as the old postcards used to say, "hands across the table".
The next argument I would adduce is that the proposal to move from the private sector to the public sector and to say because one has fair rents in the private sector so one can somehow or other have fair rents in the public sector, is a lot of economic nonsense. I am sorry to speak in such plain and simple terms. In the private sector there is a market and you get a market price when you have buyers and sellers, and when the buyer's consideration is how much he is prepared to pay and the seller's consideration is how much he is prepared to accept. Where you have a market you can ask, "what is the market price?" Then one can attempt to say—although not with any great success—what then would have been the market price excluding one element only, the scarcity element, and arrive at a non-scarce market price. You can do that where you have a market, but it is sheer gibberish to try to pretend that you can do that where you have not a market. There is no market place so far as local authority rents are concerned.
The essential point is, as every one of your Lordships knows only too well, and everyone who has been in the other place and has had to listen to constituent after constituent coming to press him or her about the local authority housing lists, that whereas in the private sector as between private landlord and private tenant cash is what counts, in the public sector as between the local authority landlord and the citizen cash is what does not count. In all the points lists prepared by all the councils all over the country to determine on which basis houses should be let in priority—there have been methods of determining need, generally on a points basis—so far as I am aware, in not one single case has cash
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been an element. The circumstances of the would-be tenant in terms of family requirements, illness, age, marriage, all these things, and in particular the period of time on the waiting list, have been very relevant in terms of need. So far as I know, no prospective tenant has ever been asked what his bank balance is. You can have a market price in the private sector, and can then claim to have a market less scarcity value in the private sector, and can produce what was then called a fair rent, as compared to the grossly unfair rents which were being charged by landlords at that time and which gave rise to that phrase; but it is nonsense to suppose that you can transfer that concept to a totally different situation, where there is no market place, where cash is no consideration, where 100 per cent. of the consideration is need as opposed to depth of pocket. I am saying, for that reason, that the removal of
fair rent determined on the principles set out sections 50 and 58 below"
should appeal to your Lordships.
The next argument I would adduce, shortly, is the one of profit versus service. It is well-known and well understood that a private landlord—and this comes out most easily if you regard the private landlord as a substantial company quoted on the Stock Exchange, with shareholders to consider—has to fix his rents on the basis that his capital will be fully serviced and that there will be a profit available, partly for ploughing back for further investment and partly for distribution to shareholders. That is a proper, well-understood function of private enterprise in this field. So far as public enterprise is concerned, a statutory duty is laid upon local authorities to provide housing for their citizens, and there is not one word said about providing profits for shareholders or for dividends or for ploughing back or anything of that kind. We are dealing with a totally different situation: in the one case the private entrepreneur needing to provide a profit, in the other case a statutory undertaker being required to provide a service. Therefore, to attempt to say that what is understandably a fair rent concept in the one case can be transposed to the other case is totally invalid.
The next argument I would put before your Lordships is the one relating to

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historic costs. As your Lordships know, it is the normal practice for local authorities to pool their costs and to charge rents for their own dwellings, which are their property and which they let, which are related to the costs as a whole. They of course make all relevant adjustments, which local authorities are in a position to do, knowing the circumstances, the councillors living in the area, the officers walking the streets every week and knowing the circumstances very well indeed. But they fix them, as I say, in relation to their historic costs, and, as we all know, one has to balance the account in which is recorded the cost of providing the houses and the revenue produced from the houses, and sometimes a contribution has to be made from the rate fund for that purpose. But what I am saying to your Lordships is that that being the case, there can be no justification whatsoever for a community which has provided itself with houses through its representatives, the councillors serving on the community council known as the local authority, charging itself such a figure as would more than cover the historic costs, by whatever method you calculate them, and so providing a profit, a surplus, which would go in part to the Chancellor of the Exchequer.
And yet the
"fair rent determined on the principles set out in sections 50 and 58 below"
provides for that very thing. It says to a community, "Notwithstanding that these are your properties, occupied by your citizens, nevertheless we, the central Government, are going to require you in future to charge such a rent as will more than cover in certain cases the total costs, however computed, and will provide a surplus to be handed in part in cash, a cheque drawn in cash, to the Chancellor of the Exchequer to go towards reduction of taxation". So that is a further reason why we could not contemplate sponsoring the proposal which is in this Part of the Bill. In fact we can only regard that surplus as a tax on the tenant, going towards a reduction in the tax on the taxpayer. And when I say we can only regard it, we are not alone in regarding it in that way. If I may quote what the Minister for Housing said in Standing Committee E:
"The surplues paid into the Fund"—
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that is to say, the Consolidation Fund, and the surpluses to which I have been drawing your Lordships' attention—
"make it possible to raise less tax to meet the cost of subsidies which are paid towards the housing revenue deficit. But the surpluses paid into the Fund benefit the taxpayers at large, both those who pay direct taxes and those who pay indirect taxes."—[OFFICIAL REPORT (Commons), Standing Committee E, 18/1/72; col. 586.]
It is perfectly clear, therefore, that the reason for charging rents which will create a surplus going to the Chancellor of the Exchequer is to benefit the taxpayers at large, both those who pay direct taxes and those who pay indirect taxes.
It is not surprising that we should have observed and now recollect that the whole of these proposals were not first brought to the other place by the Minister for Housing or by the Secretary of State for the Environment. They are not housing proposals; they are finance proposals, and they were, therefore, very sensibly and properly, brought before the other place by the Chancellor of the Exchequer in his mini-Budget in the autumn of 1970. We now know the context of these proposals. They are a suggestion by the Chancellor of the Exchequer that tenants of local authority houses should be required to pay such rents as will enable taxpayers to have their burden relieved. I have given your Lordships the various reasons why I find that unworkable, why I find it bad in principle and offensive morally. I beg to move.
4.31 p.m.
BARONESS GAITSKELL: Let us compare local authority financing of housing to a business which must yield a profit. The Government have shown that in this Bill they envisage a profit on the Housing Revenue Account. If a profit is made in a business a certain amount of it is ploughed back in order to reduce prices. In the case of the Government's Bill, half of the finance is to go to the Chancellor of the Exchequer and none of it is to be ploughed back either to improve housing or build more houses, or to reduce rents. Where this essence of profit is brought into local authority housing, it is thoroughly bad from beginning to end.
LORD BERNSTEIN: I should like to support this Amendment. I could say nothing on the financial aspect better than the noble Lord, Lord Diamond, and the noble Baroness, Lady Gaitskell. There is another point that the Government should consider. Over the years there have been great attacks on the way various communication media have denigrated Members of the other place, county councillors, local councillors, civil servants and municipal servants. In taking away the responsibility of local authorities the Government are taking from them something which is important to them and to the people who vote for them. Can there be any case for depriving the local authorities at this stage of the responsibility which they have had and which so far they have not handled too badly? Where do we get to if we continue this process? The whole point of this Bill is that it takes away responsibility from local authorities. If we want the public to respect the local authorities, the least we can do is to show that the Government and your Lordships' House respect them.
LORD SANDFORD: I am glad to respond to the suggestion from the noble Lord that we should try to get on. I should like to deal first with the point raised by the noble Baroness, Lady Gaitskell. We are talking about a system into which subsidy at the rate of something over £300 million is now being paid, and will continue to be paid, by the Exchequer—a system in which nobody is going to pay more than a fair rent, which Mr. Francis of the Francis Committee reckons to average 20 per cent. below the market value. I do not think that by any stretch of the imagination it is feasible or sensible to talk about people making profits out of that.
I found it interesting to hear the noble Lord, Lord Diamond, who has been Chief Secretary at the Treasury, arguing that in some cases the removal of a subsidy is synonymous with the imposition of a tax. It is no such thing. Under this system, nobody will pay anything higher than a fair rent, which in any case is not more than the market value and in some cases in London, according to Mr. Francis, is 40 per cent. below the market value. Certainly there is an element of taxation in the present system, under
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which a number of tenants, under the pooled historic cost system, may well be paying more than the actual historic cost of their own particular dwellings in order to make something cheaper for some other tenant or in order to reduce the burden on the rate fund.
But what the noble Lord has been putting before us, dressed up to look a little like something different, is really the status quo—pooled historic costs as operated by each of the individual housing authorities. For some reason, the Party opposite shrink from extending this system, which has some justification, to the nation as a whole. What they are introducing is the criterion of reasonableness; but they have no way of defining what is "reasonable". What we are introducing is a system of fair rents defined precisely in the terms which noble Lords set out themselves in their Rent Act 1968 and which have now been applied in the case of no fewer than 300,000 private tenancies. We are making it possible to adapt that system for council houses. I will deal in a moment with the question raised by the noble Lord as to whether or not this system can be adapted. I believe it can.
The only guide he is giving us as to what noble Lords opposite mean by "reasonable" is this: that there is a ceiling above which rents cannot go and a floor below which they cannot go. If there were not some way of reducing this ceiling it would lead to rents far higher than we are contemplating. Pooled historic costs would lead to something quite serious, for instance, in Tower Hamlets, and in many other places. They are quoted by my right honourable friend in column 1426 of the OFFICIAL REPORT of the deliberations in Standing Committee E. When it comes to the floor, the noble Lord is proposing that there should be virtually an open-ended cheque on which local authorities can draw, using their own discretion as to what they consider reasonable and sending the bill to the Exchequer. I should be very surprised if this was a system which the noble Lord would have recommended when he was Chief Secretary at the Treasury.
I will deal now with the noble Lord's point about whether this system, which was introduced by the Party opposite

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and has been applied to 300,000 private tenancies, can or cannot be transferred to the 5 million council house tenancies. The Committee have heard the noble Lord's argument, which was that fair rents registered in the private sector have not, generally speaking, been market rents although they have been originally derived from market rents. That is the case. They have been determined, as the noble Lord agreed, after discounting the scarcity element and it is important that that should have been done. It originally involved looking at rents which had recently been negotiated for properties in respect of which there was no scarcity, and then assessing the fair rent of properties in respect of which there was scarcity by a process of adjustment and extrapolation, which is a quite normal and recognised feature of valuation practice.
As a result of the increasing number of registered rents—300,000—the main method now used in the private sector is the comparability method. Under that method, one looks at the fair rents registered for comparable properties near the time of determination, where similar circumstances exist and where appropriate adjustments can be made. That method can be used not only if the registered rent has been determined for comparable properties in the locality, but also where the determination arose much further afield—again, using methods which are quite familiar to valuers. We have the leading case of Tormes Property Company v. Landau, in which the Lord Chief Justice said that by far the best guide to the fair rent in any case was the fair rent recently registered for comparable dwellings. That process can quite readily be adapted to the public sector on the system which was introduced by the Party opposite, which has now been in force for three or four years and which has been reported upon by the Francis Committee as working quite satisfactorily.
BARONESS GAITSKELL: May I ask the Minister one question? Let us have a fair argument in at least one respect. The noble Lord mentioned the subsidy, and we know that the amount of subsidy is roughly £300 million in respect of local authority houses. Will he be kind enough to state that the relief on mortgages
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amounts to more or less the same amount of £300 million, and will he agree that it is fair to put them together?
LORD SANDFORD: I am not sure that I see the relevance of the point, but I can certainly confirm that. But the amount for tax relief must be spread over roughly double the number of people.
BARONESS GAITSKELL: It is entirely relevant, because the Minister based the whole of his argument on the fact that local authority housing has an enormous subsidy. So it does, but so do mortgages on very expensive houses; and the more expensive they are, the more relief from taxation does the owner-occupier have.
LORD BERNSTEIN: Will the noble Lord kindly answer a direct question about local authorities? The Amendment moved by my noble friend Lord Diamond includes these words:
"a rent which in the judgment of the local authority".
Is the noble Lord saying that he does not trust the future judgment of local authorities in the matter of rents?
LORD SANDFORD: No. We trust them very much and, as the noble Lord will see when we come to a later clause in this Part of the Bill, we are laying the main responsibility upon them for determining what fair rents should be.
4.44 p.m.
LORD DIAMOND: The noble Lord says some extraordinary things. He has just said that he lays upon the local authorities the main responsibility for determining what rents should be. The noble Lord knows full well that they will not determine the rents. They will suggest a provisional rent, a separate body will determine it, and the local authorities will not have one word at all to say in the matter. It is extraordinary for the noble Lord to say what he has just said. Equally extraordinary is it for the noble Lord to say that nobody is making a profit, when the Government's estimate of the profit—which I do not accept—is £30 million. I do not understand how the noble Lord can reconcile the facts with what he is saying. I could not be more precise than that.
I am sorry that the noble Lord has not thought fit to deal with the argument at all. He said that there is no definition

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of the word "reasonable". I am sorry that he did not understand that what we are trying to say is that the local authorities are there using their reason—they are elected by their constituents because they are reasonable people—to decide what is a reasonable amount. The Government recognise this by providing for the continuation of exactly the same policy in Scotland. I have read out the provision in the Bill, and unless it is altered that is what the Act will provide for. It is certainly the Government's proposal that local authorities may make such reasonable charges as they may determine, but the noble Lord spent not one second on that point. It is the Government's own Bill, not my Bill. I am therefore saying it is really rather odd that he should ask for a definition of the word "reason". All you can do about reason is to say whose reason; and the reason is the property of the local authority, just as it is in Scotland. They are the appropriate people to judge.
The noble Lord said that there would be no difficulty, because of the scope of fair rents in the private sector. He spent not one second, as I can well understand, dealing with the argument that where you have a market you can have a market price, but where you do not have a market you cannot. It would he pointless for the noble Lord to spend any time trying to demolish that argument. What he said was that you could transpose from one to the other, because there have
been 300,000 rents registered in the last four years and it is now proposed to register 5½ million in the next six months. I think that comparison is a very odd one. It is 20 times as many in one-eighth of the time. The noble Lord may not wish to deal with the argument and may wish to rely on the strength of his support. I am telling him that this is as evil a proposal as the one which the Government introduced last Session in a Bill on which I was privileged to take some small part, together with the noble Lord, Lord Drumalbyn, which is showing whether one of us was right in our estimate of whether it was conducive or opposed to improving industrial relations.
This provision, which goes to the heart of the Bill, will similarly destroy relationships between local authorities and central Government, and between local tenants and central Government. It is a divisive proposal, it is totally unfair, it is unarguable, it is opposed to what the Government are doing in Scotland of their own free will and by their own legislation, and it is something which we can only vote against. But our votes are not what count. What count are the wishes and the will of the people in the days and years ahead.
4.49 p.m.
On Question, Whether the said Amendment (No. 109GV) shall be agreed to?
Their Lordships divided: Contents, 55: Not-Contents, 92.

CONTENTS

Foot, L.

Phillips, B. [Teller]

Archibald, L.

Gaitskell, Bs.

Platt, L.

Ardwick, L.

Gardiner, L.

Sainsbury, L.

Arwyn, L.

Garnsworthy, L. [Teller]

Shepherd, L.

Avebury, L.

Geddes, of Epsom, L.

Shinwell, L.

Bernstein, L.

Gladwyn, L.

Simon, V.

Beswick, L.

Granville-West, L.

Slater, L.

Birk, B.

Greenwood of Rossendale, L.

Stocks, Bs.

Blyton, L.

Hale, L.

Stow Hill, L.

Boothby, L.

Hoy, L.

Strange, L.

Brockway, L.

Jacques, L.

Summerskill, Bs.

Burntwood, L.

Leatherland, L.

Taylor of Mansfield, L.

Champion, L.

Llewelyn-Davies of Hastoe, Bs.

Walston, L.

Crook, L.

McLeavy, L.

Wells-Pestell, L.

Davies of Leek, L.

Maelor, L.

Williamson, L.

Diamond, L.

Meston, L.

Willis, L.

Donaldson of Kingsbridge, L.

Moyle, L.

Wise, L.

Faringdon, L.

Nunburnholme, L.

Wootton of Abinger, Bs.

Fiske, L.

Pargiter, L.

NOT-CONTENTS

Aberdare, L.

Alexander of Tunis, E.

Balfour, E.

Abinger, L.

Atholl, D.

Belstead, L.

Ailwyn, L.

Balerno, L.

Berkeley, Bs.

Blackford, L.

Elles, B.

Long, V.

Bledisloe, V.

Elliot of Harwood, Bs.

Lonsdale, E.

Brecon, L.

Emmet of Amberley, Bs.

Lothian, M.

Brentford, V.

Falkland, V.

Loudoun, C.

Brooke of Cumnor, L.

Ferrers, E.

Milverton, L.

Brooke of Ystradfellte, Bs.

Ferrier, L.

Monckton of Brenchley, V

Buckton, L.

Forres, L.

Montagu of Beaulieu, L.

Camoys, L.

Fortescue, E.

Mowbray and Stourton, L.

Carrington, L.

Fraser of Lonsdale, L.

Nugent of Guildford, L.

Clifford of Chudleigh, L.

Gage, V.

Oakshott, L.

Coleraine, L.

Gisborough, L.

Onslow, E.

Colgrain, L.

Glasgow, E.

Rankeillour, L.

Colville of Culross, V.

Goschen, V.

Rathcavan, L.

Conesford, L.

Gowrie, E. [Teller]

Reigate, L.

Cork and Orrery, E.

Hailes, L.

Rhyl, L.

Cottesloe, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Robertshall, L.

Courtown, E.

Ruthven of Freeland, Ly.

Craigavon, V.

Hankey, L.

Sackville, L.

Cromartie, E.

Harvey of Prestbury, L.

Saint Oswald, L.

Daventry, V.

Hatherton, L.

Sandford, L.

de Clifford, L.

Hawke, L.

Selkirk, E.

Denham, L. [Teller]

Hood, V.

Sempill, Ly.

Derwent, L.

Howard of Glossop, L.

Somers, L.

Devonport, V.

Hylton, L.

Strathclyde, L.

Digby, L.

Hylton-Foster, Bs.

Thomas, L.

Drumalbyn, L.

Ilford, L.

Vivian, L.

Dunleath, L.

Kinloss, Ly.

Windlesham, L.

Effingham, E.

Leicester, E.

Young, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

4.56 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 109GX:
Page 52, line 7, at end insert ("unless a local authority serve a notice in writing on the Secretary of State to the effect that they will not receive from him any of the subsidies mentioned in sections 2 to 6 inclusive of this Act and certifying that no contribution from the general rate fund will be paid to the Housing Revenue Account in which case Parts V and VI of this Act shall not apply to that authority for so long as the conditions stated in the notice hold good.")
The noble Lord said: This Amendment would be to the first part of Clause 49 which deals with the duty of local authorities and housing authorities to charge fair rents. If a local authority wishes and is able to contract out of the whole of the system it should be allowed to do so. It does not want anything from the central Government by way of subsidies and it does not want to pay anything to the central Government by way of excess rents converted into a surplus. It just wants to contract out. There are authorities which would take advantage of such a provision if the Government thought fit to agree to it. I beg to move.
BARONESS YOUNG: This Amendment is an example of the historic pooled costs system working for one fortunate
404
authority which chooses not to receive question asked by the noble Lord, Lord contribution to its Housing Revenue Account. if it is in the fortunate position of being able to achieve both these ends it could opt out of the fair rents system altogether. It could either charge rents that were below the fair rent level or it could prevent any surplus arising in its Housing Revenue Account as a result of charging fair rents. It is the position of an authority which presumably has a large stock of old houses and little or no new building. It would make the tenants of that authority a privileged group vis-à-vis tenants of private houses. One of the basic principles behind the Bill and the reason why this Amendment must be resisted is that fair rents should apply both to council tenants and to tenants of private houses; and by not applying this principle throughout we should be breaking one of the basic principles of the Bill.
LORD DIAMOND: I am grateful to the noble Baroness, but I do not understand what she means by "privileged". Her whole argument is based on the fact that this would be distinguishing council tenants and making them a privileged category, as opposed to tenants of private landlords who would not be able to contract out of the system and who would be paying fair rents. That is the situation to-day, so far as decontrolled houses

405
are concerned. That is the present situation, the situation which has existed since 1965, I think it is; namely, that in appropriate cases—decontrolled houses—private tenants have been paying fair rents, the market rent less the scarcity value in a market situation, and local authority tenants have been paying on a different scale, and have been paying rents which are reasonable.
Then, again, why should the noble Baroness comment on the privilege of local authority tenants when every single one of them is privileged and would not be a local authority tenant unless he or she were privileged to be such a tenant and had established his need to be a local authority tenant on the local authority's points system for determining need? They are all privileged; they are all in need—or were when they obtained their houses; and that is why the local authority provided the houses for them. If the noble Baroness is saying that once need is established you have to prove it year after year, and if, after five years or ten years, there is no longer any need, then local authority tenants should be evicted, then the noble Baroness had better get up and say that that is the Government's policy. But if the noble Baroness is not saying that, then the Government's policy presumably remains what all policies have been, that once need is established according to the list of priorities then the local authority tenant becomes a tenant of a local authority housing estate and the question of need in later years is not considered. So all we have to consider is the question of need at the time. The question of need at the time means that these tenants were chosen on that basis—privileged, if you like; taken out of the general mass of would-be local authority tenants and given the key because of established priority in need, because of established greater need, generally on the points system, as I have said. So I cannot see that there is any argument whatsoever in saying what is an obvious fact, that there is privilege in that sense. There has been throughout, and there will continue to be.
I therefore hope that the noble Baroness will think of some other argument for rejecting what is a perfectly reasonable demand; namely, that where a community has provided itself with a housing stock and wishes to let those
406
houses on a community basis to members of the community, it should be free to do so. If it does not want any help from the central Government, why should it be subject to the requirements of the central Government that it should charge such rent as would produce a surplus for the benefit of the general body of tax-payers? If it does not want to do so, let it contract out of the system. I hope the noble Baroness will therefore agree, on second thoughts, that we should have this Amendment.
LORD HYLTON: The noble Lord, Lord Diamond, labours the question of need at considerable length. I hope he has studied or will study the recommendations of the Cullingworth Committee on the allocation of council properties. He will see there that one of the recommendations was for leases of council houses for varying periods of years—maybe three years, five years or seven years, whatever may be deemed appropriate. I hope that, perhaps as a result of this debate, more regard may be paid to these recommendations than hitherto.
BARONESS YOUNG: I think the point that the noble Lord, Lord Diamond, has raised is really a basic principle of the Bill and one on which we are going to disagree because it is a fundamental principle. The principle that we on this side think is important is that there should not be this discrimination between tenants of private houses and tenants of council houses; that all should be subject to a fair rent and that those who need it should either have a rent rebate or a rent allowance. Either one believes this or one does not. In the particular instance to which this Amendment refers, it would produce in the council sector a group of privileged tenants who could live presumably below the fair rent level, and they therefore would enjoy privileges that tenants of private houses would not enjoy.
I entirely take the point about the council house waiting list, with which, of course, I am very familiar, and the points scheme that goes with it. But there is surely this difference: whereas every person who gets to the top of a council house waiting list will have done so because of his need, it does not necessarily follow that 20 years later the position is the same and that every tenant in every council house who has been there ever

407
since the time he got into it is in need in the same way as he was when he first got to the top of the list. He may be; but, on the other hand, he may not be. The point about the Bill is that those who can afford to pay fair rents will do so, and those who are unable to will have rent rebates. It is for this reason that we are unable to accept this Amendment. May I thank my noble friend for his observations? I do not think I wish to be drawn off this point, either to speak perhaps further on this one or, indeed, to have attributed to me by the noble Lord, Lord Diamond, suggestions which I certainly never made in my opening remarks.
LORD GARNSWORTHY: The noble Baroness has, I think, really emphasised the point which was brought out on Second Reading. The term "fair rent" is used as though this is really a matter that is above dispute. Let us get the position quite clear. The fair rent and the formula for determining the fair rent by the Government is one that is aimed at producing a profit, and I think this is the great divide. We on this side look on housing as a social service; the Party opposite look on it as something out of which a profit ought to be made. Whatever may be said, again and again I think we have to emphasise that this fair rent is one that is designed to produce a profit. We object to local authorities being told what to do and, despite anything the noble Lord, Lord Sandford, said just now about what is going to come before the Committee on a later clause, being given no discretion whatsoever. Here we have it: this is the great divide—local authorities being compelled to toe the line and the Government telling them what they have to do.
LORD DIAMOND: I am grateful to my noble friend for underlining that point. I would only say to the noble Baroness that she is of course right in saying that there is a big philosophical divide between us on this issue. For that reason, I think we are totally opposed to her approach, and she will be totally opposed to ours. But I am reinforced in my opposition to her approach by her con-
cluding remarks; namely, that the fact that a tenant was adjudged to be in need of a house 10 or 20 years ago does not mean that he is in need of a house now. It does not mean that, I agree. Therefore what follows from that? That is what I was asking the noble Baroness. The only relevance of those remarks is that something might follow other than allowing the tenant to continue; namely, that the tenant should be evicted; that you should say to someone who has been in a house for 20 years, "You needed it 20 years ago; you do not need it now."
I agree that the conditions which applied 20 years ago may not apply now. What I do not agree is that we could ever support a policy in which people could be told, and compelled, to move from the house in which they have been living for 20 years because the conditions were not the same. We very much hope—I am sure that it is an essential part of Tory policy—everyone hopes, that every person will get on in the world, improve his economic situation and stand on his own feet. That has nothing to do with the deep psychological importance of not disturbing people who have put down roots in an area and have their own possessions in their homes, who attach enormous importance to that and who rely greatly on continuing to be there. I shall, of course, do what was asked of me by the noble Lord, Lord Hylton, and consider this Report which proposes short-term tenancies with a view to saying at the end of the tenancy, "You are no longer in the same need that you were and therefore you do not need to stay there"—that is the purpose of it. I bear in mind that at the present time all local council tenancies are weekly, for all practical purposes, with weekly rents. But I return to the noble Baroness to say that I agree with her that here there is a deep divide, and it had better be recognised in the Division Lobbies.
5.12 p.m.
On Question, Whether the said Amendment (No. 109GX) shall be agreed to?
Their Lordships divided: Contents, 56; Not-Contents, 88.

CONTENTS

Annan, L.

Arwyn, L.

Beswick, L.

Archibald, L.

Avebury, L.

Birk, Bs.

Ardwick, L.

Bernstein, L.

Blyton, L.

Brockway, L.

Granville-West, L.

Popplewell, L.

Burntwood, L.

Greenwood of Rossendale, L.

Rea, L.

Champion, L.

Hale, L.

Sainsbury, L.

Chorley, L.

Hoy, L.

Shepherd, L.

Crook, L.

Jacques, L. [Teller]

Shinwell, L.

Davies of Leek, L.

Janner, L.

Simon, V.

Diamond, L.

Leatherland, L.

Slater, L.

Douglas of Barloch, L.

Llewclyn-Davies of Hastoe, Bs.

Stocks, Bs.

Douglass of Cleveland, L.

McLeavy, L.

Summerskill, Bs.

Faringdon, L.

Maelor, L.

Taylor of Mansfield, L.

Fiske, L.

Meston, L.

Walston, L.

Foot, L.

Moyle, L.

Wells-Pestell, L.

Gaitskell, Bs.

Nunburnholme, L.

Williamson, L.

Gardiner, L.

Pargiter, L.

Wise, L.

Garnsworthy, L.

Phillips, Bs. [Teller]

Wootton of Abinger, Bs.

Geddes of Epsom, L.

Platt, L.

NOT-CONTENTS

Aberdare, L.

de Clifford, L.

Ilford, L.

Abinger, L.

Denham, L. [Teller]

Killearn, L.

Ailwyn, L.

Derwent, L.

Kinloss, Ly.

Alexander of Tunis, E.

Devonport, V.

Leicester, E.

Atholl, D.

Digby, L.

Long, V.

Auckland, L.

Drumalbyn, L.

Lonsdale, E.

Balerno, L.

Elles, Bs.

Lothian, M.

Balfour, E.

Elliot of Harwood, Bs.

Loudoun, C.

Barnby, L.

Emmet of Amberley, Bs.

Milverton, L.

Belstead, L.

Falkland, V.

Monckton of Brenchley, V.

Berkeley, Bs.

Ferrers, E.

Mowbray and Stourton, L. [Teller]

Bessborough, E.

Ferrier, L.

Bledisloe, V.

Forres, L.

Nugent of Guildford, L.

Brecon, L.

Fortescue, E.

Oakshott, L.

Brentford, V.

Gage, V.

Rathcaven, L.

Brooke of Ystradfellte, Bs.

Gisborough, L.

Reay, L.

Buckton, L.

Glasgow, E.

Reigate, L.

Camoys, L.

Goschen, V.

Rhyl, L.

Carrington, L.

Gowrie, E.

Roberthall, L.

Coleraine, L.

Hailes, L.

Ruthven of Freeland, Ly.

Colgrain, L.

Hailsham of Saint Marylebone, L. (L. Chancellor)

Sackville, L.

Colville of Culross, V.

Sandford, L.

Conesford, L.

Hankey, L.

Selborne, E.

Cork and Orrery, E.

Harvey of Prestbury, L.

Selkirk, E.

Cottesloe, L.

Hatherton, L.

Sempill, Ly.

Courtown, E.

Hawke, L.

Somers, L.

Cowley, E.

Hood, V.

Thomas, L.

Craigavon, V.

Howard of Glossop, L.

Vivian, L.

Cromartie, E.

Hylton, L.

Windlesham, L.

Daventry, V.

Hylton-Foster, Bs.

Young, Bs.

On Question, Amendment agreed to.

5.20 p.m.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 110:
Page 52, line 11, after ("service") insert ("with the authority").
The noble Baroness said: This is a drafting Amendment to define more exactly those service tenants who are not required to be charged fair rents. The Amendment expressly limits such tenants to those who occupy Housing Revenue Account dwellings in pursuance of a contract of service with the housing authority. As at present drafted, the clause has given rise to doubt whether tenants occupying Housing Revenue Account
410
dwellings under a contract of service with another employer, other than the housing authority, could be charged fair rents. Several local authorities have made agreements with firms or with other authorities—for example, a county council—whereby Housing Revenue Account dwellings are either leased to the firm or authority, or their employees are allotted Housing Revenue Account dwellings because of their employment. If such dwellings are leased to a firm or another authority and the firm or authority then sub-let or allot them to their employees, it may well be inappropriate to apply Part V to that dwelling. In that case, the Secretary of State would make a direction under Clause 100, subsection (2), to the effect that the dwellings should

411
not be Housing Revenue Account dwellings for the purposes of Parts V or VI. If a dwelling is allocated to the employee of a firm or of another authority by virtue of his employment and he then becomes the tenant of the housing authority, he would be charged a fair rent on the same basis as other tenants of the housing authority. That rent would then be taken into account by his employer in connection with his pay and conditions of service. It is to clarify this point that this Amendment is moved.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110CD:
Page 52, line 29, leave out ("or a new town corporation").
The noble Lord said: This clause, which puts on housing authorities the duty to charge fair rents, defines an authority as, "a local authority or a new town corporation". We have tried our best to exclude both but have not succeeded. What we are now trying to do is to exclude new town corporations, because a new town corporation is surely in a special position. It is a clear, new, separately-defined community by its very nature of being a new town corporation and its stock of houses is its own. It should therefore not be included with local authorities which go back many centuries and which have therefore the complexities that the years have brought about—it should not be confused with them—but should be treated on its own. The new town corporation has a very satisfactory structure, a very reliable method of self-government, and it has until now had the responsibility of fixing rents for its own citizens in its own property. In these circumstances, it seems that one can quite properly and readily distinguish between a new town corporation and a local authority. Therefore this particular type of housing authority, namely, a new town corporation, ought to be excluded from the provisions of this clause.
LORD SANDFORD: I must advise the Committee not to accept this Amendment. In the first place, it represents another breach in the general principle of wanting to put all tenants—private and council house tenants, new town authority tenants and council house tenants in other
412
towns—on the same basis of fair rents. But it would have two particularly undesirable effects, in addition to breaching the general principle. The noble Lord, Lord Diamond, is not, if I may say so, quite right when he says that new towns are separate and distinct communities. Some of them are, but most of them have been built up and developed on existing communities. There are three New Towns, Northampton, Peterborough and Warrington, that are being created in and upon, and side by side with, existing towns or existing cities. The present rent differential is a particularly undesirable feature of the existing system. The effect is that if one happens to live in the County Borough of Northampton one pays an average rent of £3·65; if one is the tenant of the Northampton Development Corporation, one pays £5·95. If one is a tenant of the development corporation of the New Town of Peterborough one pays £4·50; if one is a tenant of Peterborough Borough one pays £3·26. These differentials are clearly unfair as between one average tenant and another. There is scope for a differential which reflects the character and age of the houses, and fair rents will take account of that; but that this should be a differential between average rents is clearly undesirable and unfair, as it leads to an immobility as between one part of the community and another which it is very desirable to break down.
LORD DIAMOND: I have been following the argument of the noble Lord, Lord Sandford, very carefully and I do not understand why he says it is unfair. If I have in mind a new town comprising, on the whole, new properties and an old local authority comprising, as to the majority, old houses, what is wrong with one kind of house being more expensive to rent than the other? Is this not something that the rent assessment committees are required to take into account? Has the noble Lord had figures for Northampton? Can he tell us what the new figures would be for the two categories that he has mentioned to show that there would be a difference which is smaller than the one which he is describing?
LORD SANDFORD: The rents I am quoting are existing rents but, as I said just now, the fair rent takes into account the difference in the age, size, locality

413
and other characteristics of two different properties. It is reasonable that there should be a differentiation between them, but it is not right that there should be a differentiation of this kind as between average rents. The ones I quoted were all for three bedroomed houses built to Parker Morris standards, and the differentiation is primarily because one has been built by a new town and others by the County Borough of Northampton. This differentiation is neither fair nor desirable.
Furthermore, a differentiation of the kind and scale that exists now between rents in towns which are acting as overspill for large cities such as London and Birmingham also mitigates against the overall regional strategies of moving people and jobs from the big conurbations, where congestion and scarcity make for bad housing conditions and serious housing stress, into areas where better conditions exist. It is for both of these reasons, as well as for the general reason of principle, that I would advise the Committee to resist this Amendment. But I hope that, with that explanation, the noble Lord, Lord Diamond, will feel able to withdraw it.
LORD DIAMOND: We are in this difficulty: that whenever the Government want to make an argument based on the likelihood of the new rents they make the argument, but without telling us what the new rents will be, because they do not know them. But whenever we want to probe them on what the new rents will be they say: "We do not know them, and your suggestion of what the new rents may be is without adequate foundation." So we are in a little difficulty with the noble Lord's examples. For aught I know, and for aught the Minister has told us, after the new rents have been established for the two circumstances he described the difference will be exactly the same as it is now, or even more. I do not know.—
LORD SANDFORD: If I may—
LORD DIAMOND: Perhaps I might finish. I do not know how this average is arrived at. The noble Lord says now that they are all three-bedroom, Parker Morris standard houses. I do not know what their circumstances are or their environmental conditions. These are all
414
matters which the rent assessment boards are required to take into account. If the noble Lord's Department has made a provisional assessment, or if it has been made and found acceptable, as in the case of Birmingham, then that is some evidence that there would be a distinction as between a new town and its neighbouring old town which it would be difficult to maintain. But so far the noble Lord has not told us that. The noble Lord wanted to interrupt.
LORD SANDFORD: What I wanted to say was that when rents are applied throughout Northampton to the development corporation's housing stock and the county borough's housing stock there will be minor variations between all three-bedroom houses built to Parker Morris standards, depending on where they are located, the size of their gardens, whether they have garages or not and so on. But they will not amount to something like a 70 or 80 per cent. increase of one over the other over the whole of that particular stock of three-bedroom houses.
LORD DIAMOND: The noble Lord gives that as his estimate, but I gather that no calculation has been made of the figures. So I say to the noble Lord that there may or may not be a difficulty. I am not satisfied with the argument that he has put forward, but I understand that in this Committee it is usual, notwithstanding that one is not satisfied with the argument, to seek leave to withdraw an Amendment in which one believes; and so long as it is fully understood that I believe in this Amendment, I seek your Lordships' permission to withdraw it.
Amendment, by leave, withdrawn.
5.33 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110CE:
Page 52, line 29, at end insert—
("(6) Where the Secretary of State has given a direction under subsection (4) of section 63 of this Act and the local authority resolve to adopt as fair rents the estimated fair rents adopted by the Secretary of State then the provisions of Part V of this Act shall not apply to that authority.")
The noble Lord said: The purpose of this Amendment is to put in order, so far as one can, the Government's strange reactions to the Birmingham situation. In the Birmingham case, figures were

415
put forward at a convenient moment (I mean convenient to the Party then in power in Birmingham) and were apparently accepted by the Minister even in advance of the Bill's arrival in your Lordships' House. This is an attempt to restore the authority of the Minister in relation to the Act. I hope therefore that the Amendment will be acceptable to the Government. I beg to move.
BARONESS YOUNG: This Amendment would in effect exempt authorities from the procedures leading to a fair rent where the Secretary of State has made a direction under Clause 63(4) and the authority has accepted this level of rent. The fact is that Clause 63(4) does not deal with determination of fair rent: it relates only to increases towards a fair rent required for the two years 1972–73 and 1973–74. It says that the Secretary of State may direct a lower increase in the progression to fair rents if 2 per cent. of the authority's qualifying dwellings would otherwise be brought above the fair rent level. As I indicated before when we were talking on the preceding Amendment about another circumstance in which an authority could opt out of the fair rents system, in this particular case the discretion of the Secretary of State is relevant only to two years—that is to say, 1972–73 and 1973–74. Beyond that the rent must be determined between the local authority and the rent scrutiny board. Therefore it would be unfair that some authorities should have their rents determined, as the Bill says, by the rent scrutiny board, and others by the Secretary of State. I find it difficult to comment on the Birmingham situation. I am informed that Birmingham has made informal proposals to the Secretary of State, but they are as yet unresolved and therefore I feel that it would be quite inappropriate for me to comment on their request while it is still under study.
LORD AVEBURY: The noble Baroness said that if the increase towards fair rents for each of these two years was likely to take 2 per cent. of the dwellings above the fair rent level, then the Secretary of State could make a direction under Clause 6314). She missed out a few words, because the subsection begins: "If it appears to the Secretary of State …". That means that before
416
coming to a conclusion on the Birmingham situation (I use that example since it has been quoted) the noble Baroness or her colleagues in the Department will have to decide whether the calculations which have been made by the treasurer of the Birmingham City Council and submitted to that authority are accurate and take into account in a proper manner the formula as set out in the Bill.
I am not going to press the noble Baroness, because obviously if the matter is under consideration by the Department she cannot go into the merits of the calculations in any detail. But I should like to ask her a question about the formula that is being used by the treasurer of Birmingham, a copy of which I have before me. What he has done is to take a multiplier which he has applied to the gross rateable values of various classes of dwellings, and then he has taken into account the amenity factor, which is variable according to the part of the city in which the dwelling is located. He says in the introductory note that there are some parts in which dwellings are in great demand and some in which they are less popular—and this is obviously so. That takes into account the locality element in the formula, does it not? What I am asking the noble Baroness to tell the Committee is whether she is satisfied that a formula which merely takes into account the two factors I have mentioned—that is to say, the gross rateable value of a dwelling and its locality in an estate—fulfils the terms of the Bill.
LORD GARNSWORTHY: I should like to raise a comparatively short point, but I think it is an important one. The noble Baroness referred to the fact that the Birmingham issue had not yet been resolved. It would be of great interest if she could give us some indication as to when it is likely to be resolved. Certainly I think it ought to be resolved before this Bill completes its passage through this House. It is a matter of interest and of great importance that we should know what is likely to happen in regard to the Birmingham situation. Many local authorities would feel, if they knew that, that they were in a much better position to assess the consequences of this Bill than they are at present. At the present time, they feel that they are under intolerable pressure.
BARONESS YOUNG: I think the noble Lord, Lord Avebury, answered his own question. He agreed with me in his first sentence when he said that I was in a difficult position in commenting on the situation in Birmingham as it is under discussion with the Secretary of State. It would therefore be extremely unwise to comment on the Birmingham city treasurer's calculations on fair rents. This is all part of the discussion which is taking place, and I feel that I can add nothing further to what I said before. Neither do I have an answer for the noble Lord, Lord Garnsworthy, on the question of when these discussions will be concluded.
LORD AVEBURY: I was not asking the noble Baroness to say whether she agreed with the multipliers which the city treasurer of Birmingham had applied to the gross values or to the amenity factors which he has applied when determining the rents, for example, of bungalows and one-bedroomed two-storey flats built or converted for old people. I was not asking about the arithmetical calculations, but whether she agrees that in determining a fair rent to the satisfaction of the Government, which will be necessary before the Secretary of State can begin to look at Clause 63(4), the only things that need to be taken into account are the gross value of the dwelling and its locality within the local authority's area.
THE EARL OF BALFOUR: If we are to consider the gross annual values, it is Important to remember that in England these have not been revised since 1965. Therefore I should have thought that the gross annual value was a figure which was pretty hopelessly out of date by now.
LORD DIAMOND: Perhaps it would save the legs of the noble Baroness if she had to get up only once to reply to both of us. We are anxious that she should not be put to physical discomfort in addition to the discomfort that she finds herself in at the moment in relation to the Birmingham episode.
We understand her desire not to make the matter more complicated, but I must turn to my noble friend Lord Garnsworthy's point. These figures have been under consideration for a long time. I
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daresay that they have moved from being under consideration to being under urgent consideration in the meantime, but we still have not had the answer. The answer is absolutely vital in relation to our understanding of the Bill, to the Minister's attitude and, much more important, in relation to the understanding of local authorities as to where they will be at the end of the day. Therefore we must ask the Government to give us some indication of which way their mind is moving when we come to the relevant clause in the Committee stage or, if that is not possible, before the Report stage is taken.
I hope that it will be carried through to the appropriate channels that, just as when we were considering the Industrial Relations Bill the Government recognised that consideration of that Bill could not possibly be completed until a very relevant piece of Government thinking had been put forward—namely, the code of conduct—I hope it will be equally understood that we cannot possibly move towards the consideration of the Report stage of this Bill until we have heard what the view of the Government is as interpreted by its reaction to the Birmingham situation. I hope that I have made that point absolutely clear. We do not press the noble Baroness; she has a difficult task and we do not want to make it any more difficult. We merely want to stand up for the rights of Parliament to have all the relevant facts when it is considering a Bill. This may be a novel concept so far as the present Government are concerned, but it is one which I feel is not wholly inappropriate to put before them.
LORD AVEBURY: It is not only Parliament which needs these facts. The City Council of Birmingham are going to be placed in an extremely difficult situation if the Department of the noble Baroness does not reply before the Council disperses for the summer recess to the representations that have been made. This will mean that the Council will not be able to consider the decision of the Department until their December meeting, and it gives them only a couple of weeks to implement the decision of the Secretary of State before October 1 when the clause comes into effect.
LORD DIAMOND: The noble Lord is quite right. My noble friend Lord Garnsworthy reminds me that all the other local authorities are anxious to know, but it is the Birmingham City Council which is in an almost impossible position. Therefore these are good reasons why we must press the Government to give us this information. If I may confide in the noble Baroness (now that we know for certain that nobody else is listening), I am beginning to have doubts whether the figures are being considered every hour of every day. It occurs to me that the consideration of the figures may have been put on one side because I find it difficult to understand why consideration should take months. We all know the date when the figures were first put forward—it was conveniently before the last May elections. That is very easy to remember. We do not understand why it should take months for these figures to be considered. It cannot rest with the lack of information, because information has been provided. This is only a matter of Ministers giving their minds to the principles lying behind this Bill and those figures.
We hope that any evil thoughts which are—I will not say "gathering"—possibly going to gather in one's mind if the delay goes on much longer she will do her best to allay; but I repeat that there is one person who is in difficulty beyond Birmingham Council and that is the Minister. He has anticipated Parliament's decision. We all have great affection for the Minister, and we all think that he needs our help and assistance. Having read every speech which he has made in Committee in the other place, I am certain that he needs every assistance that we can possibly give him. If the Committee understood what he was saying then, my colleagues in another place have a greater capacity to understand than I have. So far as the Minister is concerned he is in a difficult situation, having anticipated the will of Parliament. This is a clause (I will not say to put a white sheet on him) to turn him into a respectable married woman. That is the least we can try to do for him. I am sorry that the noble Baroness is not
accepting the Amendment in that spirit. It is something I should not dream of dividing the Committee on. My affection for the Minister is considerable, and I do not want to disturb the Members of your Lordship's Committee to go into the Division Lobbies on that issue. If the noble Baroness does not want to accept the Amendment I can only ask leave to withdraw it.
BARONESS YOUNG: I have said all that I can say on the Birmingham situation. Although I appreciate that this can go on for a long time, I cannot be drawn any further. I should like to answer the point raised by the noble Lord, Lord Avebury, on the criteria for determining the fair rent. These are set out fully in Clause 50(1) and (2). In assessing the fair rent, those responsible for making the assessment can take into account any relevant factor along with these, and could include comparisons with existing registered rents. I hope that that answers the question.
LORD DIAMOND: I am sure that the noble Baroness will be good enough to draw to her colleague's attention the difficulty that we are going to be in in attempting to deal with the Report stage before we have this information. Having said that, I seek your Lordships' leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 49, as amended, shall stand part of the Bill?
LORD DIAMOND: We dislike this clause intensely. It is the heart of the Bill; it is the greatest piece of evil in the Bill, but I have described it sufficiently. I do not think there is anything in the details of the clause which even compare faintly with the evil which we have dealt with on the earlier Amendment. Therefore I will not delay your Lordships, so far as we are concerned, on this clause. We will, of course, seek to have it removed.
5.50 p.m.
On Question, Whether Clause 49, as amended, shall stand part of the Bill?
Their Lordships divided: Contents, 81; Not Contents, 54.

CONTENTS

Aberdare, L.

Atholl, D.

Belstead, L.

Abinger, L.

Balerno, L.

Berkeley, Bs.

Ailwyn, L.

Balfour, E.

Bessborough, E.

Alexander of Tunis, E.

Barnby, L.

Brecon, L.

Brentford, V.

Gage, V.

Milverton, L.

Brooke of Ystradfellte, Bs.

Garner, L.

Mowbray and Stourton, L. [Teller.]

Buckton, L.

Gisborough, L.

Carrington, L.

Glasgow, E.

Oakshott, L.

Coleraine, L.

Goschen, V.

Orr-Ewing, L.

Colgrain, L.

Gowrie, E.

Polwarth, L.

Colville of Culross, V.

Greenway, L.

Rathcavan, L.

Conesford, L.

Hailes, L.

Reay, L.

Cork and Orrery, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reigate, L.

Courtown, E.

Rhyl, L.

Cowley, E.

Hankey, L.

Ruthven of Freeland, Ly.

Craigavon, V.

Hatherton, L.

Sackvilie, L.

Cromartie, E.

Hawke, L.

Saint Oswald, L.

Daventry, V.

Hood, V.

Sandford, L.

de Clifford, L.

Howard of Glossop, L.

Selborne, E.

Denham, L. [Teller.]

Hylton, L.

Sempill, Ly.

Derwent, L.

Hylton-Foster, Bs.

Somers, L.

Drumalbyn, L.

Killearn, L.

Stocks, Bs.

Elles, Bs.

Kinloss, Ly.

Strange, L.

Elliot of Harwood, Bs.

Leicester, E.

Teviot, L.

Falkland, V.

Long, V.

Trefgarne, L.

Ferrers, E.

Lonsdale, E.

Vivian, L.

Ferrier, L.

Lothian, M.

Young, Bs.

Fortescue, E.

Loudoun, C

NOT-CONTENTS

Airedale, L.

Fiske, L.

Platt, L.

Amherst, E.

Gaitskell, Bs.

Popplewell, L.

Archibald, L.

Gardiner, L.

Sainsbury, L.

Ardwick, L.

Garnsworthy, L.

Samuel, V.

Arwyn, L.

Geddes of Epsom, L.

Shepherd, L.

Avebury, L.

Granville-West, L.

Shinwell, L.

Bernstein, L.

Greenwood of Rossendale, L.

Simon, V.

Beswick, L.

Hale, L.

Slater, L.

Birk, Bs.

Hoy, L.

Stow Hill, L.

Blyton, L.

Jacques, L. [Teller.]

Summerskill, Bs.

Brockway, L.

Janner, L.

Tanlaw, L.

Champion, L.

Leatherland, L.

Taylor of Mansfield, L.

Chorley, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Walston, L.

Crook. L.

Wells-Pestell, L.

Davies of Leek, L.

McLeavy, L.

Williamson, L.

Diamond, L.

Maelor, L.

Willis, L.

Douglas of Barloch, L.

Pargiter, L.

Wise, L.

Douglass of Cleveland, L.

Phillips, Bs.

Wootton of Abinger, Bs.

Faringdon, L.

Resolved in the affirmative, and Clause 49, as amended, agreed to accordingly.
Clause 50: [Principles for the determination of fair rent]:
5.57 p.m.
Loan DIAMOND Loan DIAMOND moved Amendment No. 110DA:
Page 52, line 32, leave out from ("circumstances") to ("to") in line 33.
The noble Lord said: I hope that with this Amendment it will be convenient to discuss the following Amendment, No. 110DB. Perhaps the simplest thing would be for me at this stage to read out the clause as it would read if we were fortunate enough to have it amended. This is the clause which sets out the principles for the determination of fair rent, and the words we are seeking to leave out are the exclusion from
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the consideration of personal circumstances. At the moment consideration of personal circumstances is to be excluded and we wish to add, in addition to the circumstances mentioned in the Bill, those mentioned in the second Amendment. Therefore the clause would read:
"In determining a fair rent for a dwelling under this Part of this Act, regard shall be had, subject to the following provisions of this section, to all the circumstances, and in particular to the age, character and locality of the dwelling and its state of repair; to the duty of an authority as a public body to provide housing to meet social needs; to the opinion of an authority as to what is a reasonable rent and to the effect on the economy and on the general market in housing of increases in rents."
We have already debated or discussed the issue of a local authority's taking an opinion as to what is a reasonable rent. I do not think therefore that I need to go over that ground again at any

423
length. The authorities in England and Wales have their opinion taken into account, as the Amendment proposes. That is the situation at the present time. The opinion of an authority as to what is a reasonable rent is taken into account in the provisions now before your Lordships' House in the Scottish Bill. So this is nothing novel, or nothing opposed to what is within Government thinking. So much, then, for the opinion of an authority as to what is a reasonable rent.
Then we refer in the Amendment to
"the duty of an authority as a public body to provide housing to meet social needs".
Indeed, it is a statutory duty of local authorities to provide housing and all we are adding are the words "to meet social needs". That makes a distinction between meeting social needs and making a profit out of the exercise. The further principle which is to be considered in our Amendment is the effect on the economy and on the general market in housing of increases in rents. So perhaps, as we are pressed for time, I ought to refer only, or particularly, to the effect on the economy.
As is well known by now, those authorities which have not so far anticipated the Bill will be required to increase the rents of their local authority houses by £1 a week in October. We also know that the average local authority rent is £2, and therefore this is going to represent a very sharp increase, both absolutely and proportionately—50 per cent. proportionately; £1 in absolute terms. That is a very sharp increase indeed, and is to be considered against the background of inflationary wage demands, to quote the Government's own words. We also know that the expectation is, and the calculations are, that over a period of three or four years the establishment of fair rents will mean an increase of 100 per cent. in the average local authority rents. So we are heading for an enormous inflationary stimulation if we carry on with the proposals in the Bill and if we do not have regard to the effect on the economy of these proposals.
The background to this, I find to my astonishment, is that in many people's minds there is a feeling or an understanding that housing rents have been holding back as compared with the general rise of other things in our cost
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of living. We all know that the cost of living has been going up considerably, and continues to go up. It is going up at the present time by something like 8 per cent. per annum. But the general feeling is that the rents of houses should go up because they have been held back. Now nothing could be further from the truth and therefore I want to put the figures on the Record. If one takes the position over the whole of the decade from 1960 to 1971, the cost of living rose in that period by 64 per cent. The cost of housing rose in that period by 122 per cent.—that is, roughly twice as much. So the present situation at the start of the application of this Bill is that the cost of housing is pressing very hard indeed on the minds and on the pockets of everybody; and indeed those Who are seeking to buy new houses or to rent flats or houses, particularly in the whole area from, say, Hitchin. South to the coast, will know how true this is. There are estimates of G.L.C. flats being built to rent at £14 or £15 a week, excluding rates.
So the situation we are in at the present time is that the housing costs have risen out of all proportion to the cost of living; and the cost of living has risen so much as to create enormous wage demands because wage earners have been seeking hard to keep level with increasing costs. If one assumes that productivity has risen by, say, 4 or 5 per cent., and that wage earners are entitled not only to keep their wages constant in real terms but to have a share in productivity, then wage rates will not be inflationary unless they exceed, on this basis, 8 per cent. plus 4½ per cent.—about 12½ per cent. Only beyond that figure can a wage demand be held to be inflationary. In that situation, it is surely unwise in the extreme to go along with proposals which will create a shock so far as a vast number of local authority tenants are concerned. We are concerned with 5½ million local authority tenants all over the country. When I gave the figure of £2 a week average, that is the average applying to 5½ million local authority tenants in England and Wales. It would be extremely foolish, and indeed dangerous, to go ahead with a proposal which provides for that sharp increase—£1 in the majority of cases, or at least ten shillings a week in the rest of the cases, at this particular time.
This is not only my view. It was only recently, barely a week ago, that the Prime Minister said, and rightly said, on a television programme that the fight against rising prices must be one with no holds barred. I share that view. I do not want to get too closely involved with balance-of-payments difficulties, but they exist for everyone to see. Balance-of-payments difficulties arise out of costs of production which are disproportionately high in relation to other countries' costs of production. One of the largest elements in costs of production is wages. Wages rise in relation to needs, and the Government are increasing the needs substantially. Therefore, I am saying that, surely, even if the Government want to go ahead with this Bill—an extraordinary thing to want to do, but even if they want to—they should surely have some regard to the current financial and economic situation, and should delay bringing in the increases at the rate which is proposed. Those increases could be delayed; they could be spread over a longer period. Nobody is saying that rents should be fixed; nobody is saying that rents are fixed. In view of the figures I have given, people should realise that the cost of housing generally has gone up twice as fast as everything else; that is the point to "cotton on to". It is against that background that the Government are proposing to carry on with this Bill. It is for that reason that we are introducing this Amendment—to make it clear that there should be a sense of public responsibility on the part of the Government, who are continually asking trade unions and wage earners to have it in mind. There should be a sense of public responsibility in the Government's mind in pursuing this Bill, as well as in the wage earner's mind. I beg to move.
6.10 p.m.
BARONESS YOUNG: Perhaps I might deal with the first Amendment, which seeks to delete the words "other than personal circumstances", and explain why this particular phrase has been incorporated into the Bill. It is a basic principle of the fair rent principle that personal circumstances should not be taken into account, because of course the circumstances of the tenant can change from time to time or from year to year. The fair rent is fixed and then, according to the way in which the per-
426
sonal circumstances might change, the tenant would receive either a rent rebate or a rent allowance as the case might be. This is why that has been deliberately put in, because the fair rent excludes the personal circumstances of the tenant. It is a rent based on the value of the house.
Turning to the second Amendment, the noble Lord, Lord Diamond, is quite right in saying that there is a duty on local authorities to provide accommodation to meet the housing needs of the area, and local authorities must provide houses to rent to meet this demand by those in need. It is in fact a service that they have been providing for some fifty years, and obviously they will continue to provide it for the benefit of their areas. But there is no reason why charging a fair rent for a council house should have an adverse effect on these duties. It is perfectly possible for them to meet this duty by helping those tenants in real social need by means of a rent rebate, while at the same time expecting those tenants who do not have this pressing social need to pay the fair rent. If I may make one personal comment, in my own authority approximately one-third of the houses are council houses and flats, and I think it would be difficult to say that every one of those tenants could afford otherwise. Some undoubtedly could; others could not.
Perhaps I may now turn to the third part, which was the economic argument about fair rent. The actual provisions of the Bill are that council rents must be increased by £1 a week in October, but of course many of them could have been increased by 50p earlier on. I am told that the average local authority council house rent is now £2·48 a week. So those are the figures that we are talking about.
LORD DIAMOND: That is a new figure to me. Does that include the 50p a week increase which has taken place in the first six months of this year as a result of this Bill?
BARONESS YOUNG: The figure that I have been given is for April 1, 1971, and to the best of my knowledge and belief it therefore does not include the 50p increase that an authority might have made.

427
Returning to the argument about inflation, the basic provision of the Bill is that the rent of each local authority house ought to be a fair rent, based on the principles in Clause 50, which discounts the scarcity value. It is therefore setting a price on the house which is leaving out all the effects of the market. For the purposes of the argument one is assuming a perfect market in which the numbers of houses and the numbers of people seeking houses are in equilibrium. This principle was introduced by the last Government for private tenants, and it is a principle which should discount inflation of rental value. Therefore we do not feel there is any reason why this principle should not be extended to council tenants, and we cannot accept that setting a fair price on the value of the house can be regarded as an inflationary move.
LORD GARNSWORTHY: May I say that I think too much is being made of the fair rents that the previous Government introduced in regard to the private sector. A quite different situation existed in the private sector than in the public sector. The noble Baroness knows very well that there has been a tension—and a very considerable tension—as between the tenant and the landlord in the private sector. In this Committee we have been discussing the manner in which the landlords have failed to keep their properties in good condition, and she knows very well that the attempt of the last Government to introduce fair rents into the private sector was intended to alleviate this position. The remarks of my noble friend Lord Diamond, in what he has said about the economic consequences of what the Government are proposing, ought not to be treated lightly; there will be very serious consequences indeed. And when the noble Baroness says that if local authorities had taken advantage of the opportunity which they had to put rents up by 50p in April, they would not need to put them up £1 in October, she knows as well as I do that in the 12 months they would have paid exactly as much, namely £26—just as much as the people will pay whose rents are put up by £1 in October.
If I may say so, we are coming to the nub of the issue: the importance that the
428
Government are prepared to attach to the sense of judgment of local authorities and the area of discretion that the Government are prepared to allow; but really we need to know a great deal more than we have been told. Again and again we shall have to come back to the Birmingham situation. Until we get some further information we are bound to hold this view. At the moment, so far as we can assess the position, the Government are saying that they will determine a fair rent according to the formula that is laid down. They are saying, "Whether you like it or whether you do not, you will impose it; and if you do not, we shall appoint housing commissioners to do the job." The noble Baroness drew attention to the fact that in the area in which she served on a local authority one-third of the people lived in local authority-owned dwellings and it would be difficult to say that they were all in social need. I should hope so, because if they were all in social need it would mean that we were having segregation of an economic group that was likely in itself to produce even further social consequences. One has a feeling that there is indeed in this Bill, if not in this particular clause, a danger that we shall get economic groupings because local authorities will be—I think I am correct in saying—encouraged to put tenants into older houses with lower rents, so avoiding the necessity for rent rebates. I hope that more attention will be paid to this aspect and that a more penetrating reply will be given to the case made by my noble friend Lord Diamond on the whole economic consequences of this exercise.
VISCOUNT GAGE: I do not pretend to possess a deep understanding of the Bill. However, I was interested in the philosophy underlying the remarks of the noble Lord, Lord Garnsworthy. I understand that a large number of poor people will get the appropriate rent rebates. In other words, the evil consequences, as it were, of which noble Lords are talking will be confined to the less poor; those who are in work. I appreciate that if their rents are increased there will be a tendency for them to regard that as a good reason for claiming higher wages, and that, of course, will be inflationary. Does the noble Lord, Lord Garnsworthy, regard that as a fact of life, a regrettable necessity, or does he think it right that

429
families with earnings of, say, £30 or £40 a week coming in should receive Government subsidies? I appreciate that it will have an inflationary tendency simply because people do not like to pay higher rents. On the other hand, it is right that the trade unions, because they are trade unions, should seek, as it were, higher subsidies?
LORD GARNSWORTHY: I am glad that the noble Viscount, Lord Gage, accepts that the consequences of this Bill will be inflationary. Leaving all else aside, we are at least making progress when we can get the noble Viscount's agreement on that.
LORD BERNSTEIN: It seems to me that the noble Baroness does not accept the logic of the argument adduced by my noble friend Lord Diamond. Does she accept the figures given by my noble friend relating to the likely economic and social consequences of the Bill? If not, may we have figures from the Government, remembering that sooner or later the logic of the argument will be tested on the figures?
LORD SANDFORD: I will answer the question asked my the noble Lord, Lord Bernstein, first and give the Committee some figures that may be helpful. We do not believe that the Bill is inflationary because of the effect of the rent allowances and rebates which will be applied to the lowest wage earners. Those are the people on whose behalf industrial action is sometimes taken and wage claims put forward. It is in this sector that the rent rebates and allowances, covering between them the whole of the private and public field with generous allowances and rebates—more generous than anything hitherto—will be anything but inflationary. Exactly the reverse will be the case. This is all part of a package which serves to concentrate subsidies not only in the places where they are needed to encourage building, but on the people in need.
I will not weary the Committee by giving all the figures I have. I will compare the position in October, 1968, with that in October, 1971, but bringing into the picture the effect of the tax reductions in the last Budget. Let us apply this situation to the case of a married couple
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with two dependent children, paying £4 a week rent, and see the effect of our model scheme of rent rebates. Let us say the man is earning the average income of a manual worker on those two respective dates. In October, 1968, he would have been earning £23 a week. Let us say that he would have been paying a rent of £3 a week for a house suitable for a family of that size. The effect of paying that full rent—full because in most cases rent rebates would not have been available, though some local authorities might have run them—then paying the income tax and National Insurance prevailing at the time, would have been that man would be left with a net income after rent, tax and National Insurance of £16. Three years later that rent would have gone up to, say, £4 a week, at the rate at which rents were increasing in that period. But if our rent rebates were available—I agree that they are not available at the moment—that increase would have been brought back to a rent of £3·42. That would be the impact of rent rebate on that family with those needs paying that rent. The man's tax position would have been improved by the Budget and he would have a spendable income, comparable to the £16 he had before, of £22·50. His wages, if they had followed average increases, would have gone up from £23 to £31. If his income is less or if his needs are greater, the effect of the rent rebate would be greater.
LORD DIAMOND LORD DIAMOND We will study carefully the figures which the noble Lord has given, though he omitted to say whether they were constant or current prices; I take it that they were current.
LORD SANDFORD: I was comparing prices and everything else prevailing in October, 1968, with October, 1971, but applying to the 1971 figures the benefits of the last Budget and showing the effect of our rent rebates, which are not yet in force but which would have had the effect I mentioned if they had been in force.
LORD DIAMOND: The noble Lord is comparing like with unlike—comparing £s of a certain purchasing power in 1968 with £s of a considerably lower purchasing power in the later period.
LORD SANDFORD: Yes.
LORD DIAMOND: The noble Lord is taking as an average 1971 rent a figure which his noble friend said was approximately twice the average. Nevertheless, we will work out the figures and see what benefit we can get from them. We are grateful to the noble Lord for giving them. I return to the issue raised by the Amendment, the remarks of the noble Baroness and the interesting intervention of the noble Viscount, Lord Gage. The noble Baroness said that personal circumstances should continue to be omitted. Arising out of her experience—the noble Baroness shone with considerable light in her local authority—I am sure that she was troubled, as all local councillors are, when going into the whole question of rent arrears. Every large housing authority must at each meeting of the housing committee consider these arrears. A document is put before each councillor showing what the arrears are and the circumstances of each individual tenant; the family circumstances, how the arrears have grown and all other relevant matters. They are all what one might call personal circumstances. They are held to be particularly relevant in considering whether action should be taken or whether the arrears should be remitted. Personal circumstances are considered by all councils in relation to the possible remission of rent.
Remitting rent is a matter of simple accounting. It is just a question of reducing the amount of rent. It is like saying "If your rent was £x and we are remitting one-quarter of £x, your liability has been reduced to three-quarters of £x." Is the noble Baroness saying that local authorities will be denied the discretion to take personal circumstances into account in remitting rent? That sounded very much like what she had in mind by her rejection of our request that persons' circumstances should be taken into account. I hope that councillors will still be able to use that discretion and be able to exercise humanity, sympathy and understanding when considering all the personal circumstances of their tenants, in deciding whether arrears of rent should be remitted or carried forward. And if that is so, here is a very good example of personal circumstances entering into the consideration as we think they should and as the Amendment considers they
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should, albeit I admit the Amendment takes it a step further.
The noble Baroness turns once more to the switch from fair rents in the private sector to fair rents in the public sector. We are going to get confused if we keep on talking about fair rents. Therefore, if I may, I shall use my own vocabulary, so as to avoid any possibility of confusion. The present position is that local authorities can decide on what rents they think are reasonable, and these rents are known shortly as "reasonable rents". What is proposed in the Scottish Bill is that local authorities shall have that power. I will read it out once more. Part IV states:

"Subject to the provisions of this Part of this Act a local authority, in respect of the tenancy or occupation of houses"—
et cetera—
"may make such reasonable charges as they may determine".
Those are reasonable rents. The present position in England and Wales is "reasonable rents". The proposed position in the legislation brought forward by the Government for Scotland is "reasonable rents". Are these wanted for England and Wales under this Bill? No. How should we describe them? They are unreasonable rents. If the noble Baroness will forgive me, I will use that description from now on. We shall be quite clear what kind of rents we are referring to. "Unreasonable rents" are the rents which the noble Baroness is proposing for local authority tenants in future under this Bill. "Fair rents" is what the noble Baroness is proposing should he extended for private tenants of private landlords, both under the old legislation and under the continuing legislation.
Now I turn to the question of the economic effects of the situation as we find it to-day. The noble Baroness will be as familiar as I am with what has happened in Threadneedle Street at the usual hour, and I can assure her that I did not engineer this with the Governor of the Bank. He did not seek my advice before deciding what to do, nor did he trouble to find out whether I was going to move this Amendment this afternoon. With regard to the view of the noble Viscount, Lord Gage, as to whether we think this is right, I am happy to tell the noble Viscount that there is no difference between either side of the Committee on

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this issue as to principle. There is no difference at all. The Government are not saying, "We think unreasonable rents are right and that therefore they should be imposed". The Government are saying, "Having regard to the economic and other circumstances"—exactly the circumstances which are in our Amendment—"we think that the rent should not go up by more than £1 or ten shillings this October (as the case may be), making a total increase of £1 for the 12 months ". They are saying, "Having regard to the economic effects, and no doubt the political effects, we think it should not go up by more than £1 over the 12 months".
The issue between us is not a matter of principle at all; it is a matter of how fast the rent increases should take place and whether the economic circumstances of the country should be taken into account. All I am saying is that when this Bill was drafted the economic situation of this country was not seen to be what it is seen to be to-day. When this Bill was drafted, if anybody had said that the bank rate would go up by 1 per cent. for the well-known reasons during the course of the consideration of the Bill, he would not have been believed, because the general expectation was a move the other way. If anybody had said when this Bill was introduced that pressure on the pound was going to mount in the way it has done, they would not have been believed.
I am saying that it is irresponsible to have no regard to the economic difficulties of the country or the way they have moved in pursuing a fixed determination about a particular piece of legislation which stemmed from a decision taken years ago at a Party conference. A Party conference is a relevant consideration. The change in the economic circumstances of the country is also a relevant piece of information. If I were to be asked which is of the greater importance, the decision of the Conservative Party Conference or the increase in the bank rate, I should have no difficulty in coming to a conclusion; and that is why I am saying that I hope nobody in your Lordships' House would have any difficulty either. On to-day, of all days, to reject an Amendment which invites the Government to take account of the economic situation passes my understanding.
VISCOUNT GAGE: I am much obliged to the noble Lord, Lord Diamond, for shedding some light on my difficulty. It is not entirely resolved, however. Somebody has to pay for these houses and somebody has to pay for the maintenance. The question seems to be what shoulder should bear the burden. It sounded as if the noble Lord was saying that if you put too much on the shoulders of the trade unions they will go on strike and add to the general confusion. I do not know whether or not that may happen, but I do not think from the moral point of view that it is right that people should have that privilege simply because they have the power to add to the inflationary pressure.
6.37 p.m.
LORD LEATHERLAND: The noble Viscount, Lord Gage, who has a very long experience of local government and for whom I have a very high personal regard, talked to us about the £40-a-week tenants of council houses who were not going to be asked to bear what he calls a fair rent. That kind of story reminded me of what we used to hear 30 years ago, of the coalminers in South Wales who used to fill the baths in the bathroom with coal. Fortunately we are in a position to answer the suggestion about the £40-a-week tenants. Not long ago the Prices and Incomes Board (what a pity it is not in existence to-day ! If it were we might have avoided many of our current troubles) was specifically asked to investigate this kind of allegation, and it found that the percentage of people who were in receipt of £40 a week, or whose incomes were £40 a week, was very small indeed, I believe that it was somewhere about 1 per cent.
The noble Viscount, Lord Gage, also drew into question the morality of paying subsidies. I believe that I said in an earlier speech on this Bill that I do not regard subsidies as such as being iniquitous. We pay them to many sections of the population when we think it is in the national interest so to do. We pay them to landowners and wealthy farmers; and, through one of our subsidiary organisations, we pay them to chorus girls and ballet dancers. We also pay them on a very big scale to the people who buy their own houses on mortgage: we give them a direct subsidy more than twice as large as that which is given to council tenants. So we

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should see this thing in its proper perspective.
The noble Lord, Lord Sandford, said that this scheme was not inflationary because the distribution of rebates to a large number of council tenants would have exactly the opposite effect. Let us accept that, so far as it goes, but we must bear in mind that even when the rebates are given they will be given from the level of the new increased rents; they are not set against the existing rents. It may well turn out that many of these tenants, even after they have received a rebate, will be facing a rent increase based upon the existing rent which they pay. But I am not talking about the tenants who will get the rebates; I am talking about the tenants who will be mulcted in these increased rents. That is what we are talking about, increased rents—1 this October; 10s. next year; 10s. the next year; and then, for the second three-year period, undoubtedly still further increases. We have to bear in mind that these people are already paying increased rates; rates that have gone up 25 per cent. since the present Government came into power. What I am concerned with is this wording in our Amendments which talks about the national economic position. What is going to happen? We shall have one big wage demand after another—but I will come back to that in a moment.
I want to try to illustrate the way in which the Government's present policy under this Bill is running directly counter to everything promised to the nation two years ago, and repeated time after time since then. Only a few months ago, Mr. Heath was saying at Luton Hoo:
"Ever since we were elected, we have concentrated on reducing rises in prices."
Putting up these rents under this Bill is not going to reduce prices: it is not even going to slow down the increase in prices; it is going to be a positive definite increase bearing upon millions of people.
Mr. Heath also said on the same occasion—and I commend this example to the noble Lord:
"The employers, by keeping price increases down to 5 per cent., have made their contribution. Can we not all take a longer view now? Let us end the bickering and get on with the job."
He was commending to us the example of the employers, the C.B.I., who had
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limited their increases to 5 per cent. And he has the bare-faced effrontery to come to us this afternoon and say, "Put up these rents by 50 per cent." !—because that is what will happen in a large number of cases, with further increases to follow. Then Mr. Heath told us—he never tires of talking about bringing down the cost of living while his Ministers are putting it up:

"The people of the country will not lightly forgive any group which is seen to obstruct the improvement in the standard of living."
The Government are not going to improve the standard of living by putting up the rents of millions of tenants.
There is a further aspect of this matter. Time after time we have heard from this Government, from various Ministers, that it is their desire to increase the powers of the local authorities, to give them a bigger say in handling local affairs. What is the biggest undertaking that most local authorities have to handle? It is housing. Yet the powers which the local authoritities now have, the powers which they have had for many years, are now to be taken away from them (if I may coin a phrase) "at a stroke". What will be the effect of all this on the economy? This increase in rent is not something we can view in isolation. It is coming on top of increases in the price of food—17½ per cent. since the Government came in; increases in fares, increases in the price of clothing, increases in the price of school meals, increases in the price of everything. It is inevitable that trade union leaders, who have to defend their policy to their members, will be compelled to put in demands for still bigger and bigger wages. We may deplore it, but it is a fact, something that will happen; and we are seeing the first indications of it at this moment, while the miners and railwaymen are talking about the next increase they will demand.
What is going to be the effect of all this on our competitive efforts in world markets? We have already heard that the competitive advantage we received from the last devaluation—I am not going to talk about the next devaluation—have almost worn away. The terms of trade are turning against us. The prices of our exports are going up, and that is leading to a smaller demand from foreign countries for those exports. This must inevitably have a very serious effect upon

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our balance of payments, which has already turned away from the very rosy hue it had a year ago and is rapidly moving in the direction of a balance-of-payments deficit. I do not want to be panicky about that, but it is coming; the bankers of Europe can see it coming, and that is one of the reasons for the recent run we have had on the pound.
There is a still further effect upon the economic situation in this country. If these people are to pay this extra rent on top of all the other increases they are having to meet, and if they do not get increased wages to counterbalance that, it means that they will have less money in their pockets to buy all the other things the householder usually buys: household equipment, clothing, all kinds of things. What will be the effect if the demand for these goods is reduced in our factories? It will mean that our factories will have to produce fewer goods, and that means an increase in the number of people unemployed.
I take the view—and I used to feel that I was fortified in this view by Members opposite—that local councils should be allowed to handle their own business. If we look at the housing situation through that kind of telescope, we see that many councils have already paid off the whole of the costs on many of the houses they have built. Why, therefore, if they can charge an economic rent which meets all their outgoings, should they be compelled by the Government to pay something very considerable on top of that? I think our Amendment is taking a patriotic view in the wide scope of the national economy, and I sincerely hope that the Government will find it possible to accept it.
6.47 p.m.
On Question, Whether the said Amendment (No. 110DA) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 67.

CONTENTS

Amherst, E.

Garnsworthy, L. [Teller.]

Sainsbury, L.

Archibald, L.

Granville-West, L.

Shepherd, L.

Arwyn, L.

Hale, L.

Shinwell, L.

Bernstein, L.

Henderson, L.

Slater, L.

Beswick, L.

Jacques, L. [Teller.]

Stow Hill, L.

Birk, Bs.

Leatherland, L.

Strange, L.

Brockway, L.

Lloyd of Hampstead, L.

Summerskill, Bs.

Champion, L.

Maelor, L.

Tanlaw, L.

Crook, L.

Pargiter, L.

Taylor of Mansfield, L.

Diamond, L.

Phillips, Bs.

Wells-Pestell, L.

Faringdon, L.

Platt, L.

Willis, L.

Fiske, L.

Popplewell, L.

Wise, L.

Gaitskell, Bs.

Royle, L.

Wootton of Abinger, Bs.

Gardiner, L.

NOT-CONTENTS

Aberdare, L.

Daventry, V.

Hawke, I.

Abinger, L.

de Clifford, L.

Hood, V.

Ailwyn, L.

Denham, L. [Teller.]

Hylton, L.

Alexander of Tunis, E.

Derwent, L.

Hylton-Foster, Bs.

Alport, L.

Digby, L.

Killearn, L.

Atholl, D.

Drumalbyn, L.

Leicester, E.

Balfour, E.

Elles, Bs.

Limerick, E.

Barnby, L.

Elliot of Harwood, Bs.

Loudoun, C.

Belstead, L.

Falkland, V.

Milverton, L.

Berkeley, Bs.

Ferrers, E. [Teller.]

Mowbray and Stourton, L.

Bessborough, E.

Ferrier, L.

Reading, M.

Brooke of Cumnor, L.

Fortescue, E.

Reay, L.

Brooke of Ystradfellte, Bs.

Gage, V.

Reigate, L.

Brougham and Vaux, L.

Gainford, L.

Ruthven of Freeland, Ly.

Carrington, L.

Gisborough, L.

Saint Oswald, L.

Colville of Culross, V.

Glasgow, E.

Sandford, L.

Colwyn, L.

Goschen, V.

Selborne, E.

Conesford, L.

Gowrie, E.

Sempill, Ly.

Cork and Orrery, E.

Hailes, L.

Teviot, L.

Courtown, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Thorneycroft, L.

Cowley, E.

Vivian, L.

Craigavon, V.

Hanworth, V.

Young, Bs.

Cullen of Ashbourne, L.

Hatherton, L.

6.54 p.m.
LORD TANLAW LORD TANLAW moved Amendment No. 110DC:
Page 52, line 34, at end insert—
("(1A) Regard shall also be had to the differences which exist between local authority and private landlords, and in particular, the fair rent of a local authority dwelling shall be reduced below the rent of an equivalent privately rented dwelling by taking into account the relative interest rates, repayment periods of loans, taxation, profits, and any other factors which may be different in the case of a local authority from the case of a private landlord.")
The noble Lord said: My noble friend, Lord Avebury, apologises for not being present to move this Amendment. He has an outside engagement and has asked me to move it on his behalf. The Amendment modifies the criteria for arriving at a fair rent, in that it makes a clear-cut distinction between the public sector and the private sector. I believe the Milner Holland Report on housing showed that because of the difference in the rates of interest and repayment, as mentioned in the Amendment, the economic rent of council houses would be much lower than the equivalent in the private sector. Hence it would not be just or in accordance with the principles set out in the White Paper to charge the tenants the same. There is little I can add except to say that there are two entirely different matters of principle here: the principle of ownership and the terms of funding and finance behind the council dwelling and the private dwelling. The terms of finance have already been referred to by the noble Lord, Lord Diamond, who mentioned the bank rate, but this is just part of it. The loan terms for a private landlord are inclined to be much shorter than those for councils, which are often for as long as sixty years. This can make a difference, and the Amendment is intended to make this distinction and to ensure fairness in keeping with the principles set out in the White Paper.
LORD SANDFORD: It is perfectly true to say that in determining fair rents and in the process of comparing one dwelling with another, either within the private sector or between the private sector and the public sector, the difference in the return on the original investment is something which can be taken into account. But the fact of the matter
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is that when there are two roughly comparable dwellings in a balanced market, the difference in profitability as between one landlord and another will have only a minimal effect on the rent which each of those two dwellings would command. What affects the rent far more than that is any difference in the quality, characteristics and amenities of the two particular dwellings. It is for that reason that we already have the ruling of the courts that the determination of fair rent should be based, whenever possible, on fair rents registered for comparable dwellings, and that the return from the dwelling as an investment should be considered only as a check.
What is true as a ruling between one dwelling and another in the private sector has the same validity when we are comparing dwellings in the private sector with dwellings in the public sector. I fully recognise that the difference in the return on the investment made and the difference between a housing authority as a landlord and a private individual as a landlord is very marked indeed. But in view of the rulings of the courts on these matters I hope the noble Lord will not feel it necessary to press his Amendment, and that if he does the Committee will resist it.
LORD HYLTON: This seems to be a very theoretical Amendment. I do not believe that in many cases in the private sector the information could be extracted. Even if it were capable of being extracted, it would produce an administrative nightmare. The complications would probably be greater than anything else in the whole Bill. I hope the noble Lord, Lord Tanlaw, will not press this Amendment.
LORD TANLAW: Let me assure the noble Lord that the figures are in the Milner Holland Report. I have seen them, but they are mislaid under the pyramid of papers which I have here.
LORD HYLTON: The Milner Holland Report deals only with London, and not with the rest of the country.
LORD TANLAW: In view of what the noble Lord and the Minister have said, I am pleased to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD SANDFORD: I beg to move that the House do now resume.
Moved accordingly and, on Question, Motion agreed to.
House resumed.

POLICE BILL
7.0 p.m.
LORD WILLIS: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a. —(Lord Willis.)
On Question, Bill read 3a.
LORD WILLIS: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Willis.)
On Question, Bill passed.
LORD SANDFORD: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended at 7.1 p.m. and resumed at 8 p.m.]

HOUSING FINANCE BILL
8.0 p.m.
House again in Committee.
Clause 50 [Principles for the determination of fair rent]:
LORD DIAMOND LORD DIAMOND moved Amendment No. 110DD:
Page 52, line 36, at end insert ("Housing Revenue Account").
The noble Lord said: Clause 50 deals with the principles for the determination of fair rent. Subsection (2) says:
"For the purposes of the determination it shall be assumed that the number of persons seeking to become tenants of similar dwellings in the locality … is not substantially greater than the number of such dwellings in the locality which are available for letting …"
In short, this is a method of eliminating from the calculations the scarcity element. I understand that and I agree with it. But I am not sure that it is right for us to talk about tenants of similar dwellings. I assume that what we have in mind are
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tenants of Housing Revenue Account dwellings; in other words, local authority dwellings. There is such a distinction between local authority dwellings on the one hand and private tenancies on the other. I recognise that it is the Government's wish to import into the public sector the fair rent concept. While such a concept has some validity in the private sector, it has no validity in the public sector. Nevertheless, for the purpose of eliminating the scarcity element, I should have thought that we should have to concern ourselves solely with the public sector, and it is for that pupose that I beg to move the Amendment.
BARONESS YOUNG: In this clause we are concerned with the principles for the determination of a fair rent. One of those principles is that in the calculation of a fair rent it must be assumed that there is a balance of supply and demand in the case of all dwellings to rent and not just Housing Revenue Account dwellings. If this Amendment were agreed to, we should be concerned simply with Housing Revenue Account dwellings, and not with those in the private sector as well; whereas the principle of the Bill is that the fair rent for each should be assessed on the same basis; that is, the rental value of the dwelling in a balanced market. In the Government's view it would be wrong to have separate principles for determining rents in the public and private sectors.
LORD DIAMOND: I have listened to what the noble Baroness, Lady Young, has said, and I am not going to pursue the matter unduly. I do not think that it is right. We are not arguing about the principles, but I feel that the way of determining those principles is to say that there shall be a method of eliminating scarcity. When we are eliminating scarcity we are not concerned with the switch of fair rents from the private to the public sector; we are concerned only with eliminating scarcity. What we want, therefore, is a balanced position of supply and demand in the area with which we are dealing. This is the area of public housing. Somebody is suffering from slight confusion of thought. It may be myself, and to be on the safe side I am going to ask your Lordships' leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.6 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110DE:
Page 52, line 40, leave out from ("terms") to end of line 41.
The noble Lord said: This Amendment proposes to leave out the words:
"and that no person seeking to become such a tenant can expect any special preference."
I realise that we are in the company of Alice the whole way through this clause in that we seem to be in Wonderland. We are trying to assume a situation which does not and cannot exist in order to enable the Government to have some justification, which they cannot possibly have, for saying that it is possible to switch the concept of a market rent in a market situation to a market rent in a non-market situation. Therefore, we are bound to get into a hopeless confusion.
The previous Amendment illustrated a minor confusion: this one illustrates a major confusion. The clause deals with the principles for determining a fair rent, and subsection (2) says:
"For the purposes of the determination it shall be assumed that … no person seeking to become such a tenant can expect any special preference."
Broadly speaking, there is no tenant in the public sector who at the time at which he was accepted as a tenant was not in receipt of special preference. That is how he got there. He was preferred on the grounds that his need was such that under the points system he was at the top of the list and was preferred to others in the middle or bottom of the list. Preference was given to him on the basis of need and on the basis of that council's computation of that need according to its points system.
The point that I am making is that every such tenant was the subject of special preference in being given a local authority house. Therefore, it is very difficult, if not impossible, to assume these conditions for the sake of importing the private sector concept into the public sector. It is for those reasons that I beg to move the Amendment.
BARONESS YOUNG: I am very sorry that the noble Lord, Lord Diamond, should feel that there is confusion over this Part of the Bill, because these particular words were put in to clarify what might appear to be a complication that
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could arise from the fact that local authorities choose their tenants from a housing list, whereas private landlords simply choose tenants from those who happen to wish to rent their property. It is perfectly true that under Section 113(2) of the Housing Act 1957 local authorities are required to give a reasonable preference to persons who are occupying insanitary or overcrowded houses, have large families or are in other respects living in unsatisfactory housing conditions. It may well be thought that this statutory duty might throw doubt on the assumption, which has to be made in the determination of a fair rent, of a balanced market for rented dwellings. This assumption, of course, rests on the tacit assumption that any landlord is, in principle, able to let his accommodation to any prospective tenant. Such a tacit assumption conflicts with the statutory duty of local authorities to select certain persons in preference to others, and also with the practices adopted by local authorities for the discharge of this duty; for example, that a local authority will have, of course, a waiting list with a points scheme, and will insist almost certainly on certain residential qualifications.
In order that, in determining a fair rent, the same assumption of a balanced market can be made for council dwellings as for private tenancies, subsection (2) provides in effect that the statutory requirement under Section 113(2) of the 1957 Act should be disregarded in making the assumption required by the subsection about a balanced market. It is therefore put in for the avoidance of this doubt; but I should like to say that in putting it in it is important to note that it does not affect the local authority's duty to give preference to certain people in the selection of its tenants. Nor does it mean that the fair rent for a council dwelling should be assessed otherwise than on the bases that the dwelling is as it is, that its locality is as it is, and that the dwellings around it are as they are. So that in effect the bases of determining the fair rent should be the same for both local authority and for private dwellings, but the local authority still has a duty to give preference to certain people.
LORD DIAMOND: If ever the noble Baroness thought that when I got up and

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said that I was grateful to her for what she had said there was any lack of any sincerity in my words, would she please realise that on this occasion I mean every syllable of it. I could not think of a speech which proved my point fully more than the speech which the noble Baroness has been good enough to make. What she has said is that, in order to move with this ridiculous concept that you can switch a market situation into a non-market situation, you have to do at least two things: you have to assume that the Statute does not provide what the Statute does provide, and you have to assume that the facts on the ground are not what the facts on the ground are. If I therefore used the phrase, "We are accompanying Alice in Wonderland" in moving this Amendment, I was, if anything, understating the position. It is quite a ridiculous situation at which we have arrived. The noble Baroness has explained it in the clearest of terms. She says that, notwithstanding that the Statute provides this, you are to ignore the Statute; notwithstanding that the facts are that here is preference for every tenant, you are to ignore that; but you are not to be confused by that into thinking that the facts are not what they are, and you must take into account the fact that every tenant, both this one and the neighbour, and those in all the so-called balanced market, are all people who in fact have had to be selected under the statutory instructions to the council by the methods which the council uses.
We really are in a ridiculous situation. All I want to establish is that you have to go to these ridiculous lengths—I do not think you can use a word less strong than "ridiculous"—in order to bolster up this untenable theory that you can have a market situation in local authority housing where there is nobody purchasing in the market, where the normal demand and supply is totally absent on the basis on which supply and demand are normally measured—that is to say, purchasing power—and where every tenant is not only in fact but in Statute a tenant who is selected, not on grounds of purchasing power or command of resources but on the grounds of his personal needs. I think that the speech the noble Baroness made was so good and so excellent, and proved the point so perfectly, that all I can really say to her
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is "Ditto" and seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.15 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110DF:
Page 53, line 11, leave out subsection (4).
The noble Lord said: In its new form—I gather it has changed its content on its journey through another place—this subsection provides:
"In any case where, if the rent of a dwelling were being determined under Part IV of the Rent Act, 1968, consideration would be given to the return that it would be reasonable to expect on it as an investment, the like consideration shall be given in determining a fair rent for it under this Part of this Act, and the fact that it is vested in a public body shall be disregarded."
I think that here we are broadly on the same point. It is just not sensible to contemplate that a local authority house is not vested in a local authority. That is the assumption which you have to make, presumably, if that is the case the Government are going to put up in support of it. I really do not think I have any more than that to say on this Amendment in view of the pressure of time. I beg to move.
LORD SANDFORD: I do not think there is much to make of it, either. As I explained in dealing with the Amendment moved on behalf of the noble Lord, Lord Avebury, just before supper, the fact is that this particular consideration, as to what the return is on the investment made, is not the main or primary method of arriving at a fair rent in respect of any particular dwelling. It is only used as a check. It can be used as a check in this particular instance—where it is possible to know what investment was made on a particular dwelling in the case of the stock belonging to a particular local authority; there may be circumstances where it would be useful for that purpose, but as it is not the primary purpose, I do not think we need spend any longer on it.
LORD DIAMOND: The noble Lord is quite right in saying that that argument was dealt with on Lord Avebury's Amendment, but the point I am stressing is that we have again to make an assumption which is totally invalid and totally incapable of being made; namely, that

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there is not a public body, or, in other words, that the local authority house is not owned by a local authority. So the whole of this clause, which sets out the principles for the determination of fair rent, moves on the basis (a) that there is no local authority owning the houses; (b) that local authorities have not got the duty which they have to perform under Statute; and (c) that the facts are that tenants are not chosen by preference, by which they are chosen. If you make all those assumptions you can then go on, presumably, to the other parts of the clause; but to describe those as principles for the determination of fair rent to me makes the point very clearly that you simply cannot import the fair rent concept into a public sector, where you have a local authority, where you have a public body, where you have statutory duties and where you have the facts of the case, which everybody knows; namely, that every tenant is chosen by a preference. So I can only repeat, I think, that the whole thing is utter nonsense, and seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 50 agreed to.
Clause 51 [Rent scrutiny boards]:
LORD DIAMOND LORD DIAMOND moved Amendment No. 110DG:
Page 53, line 24, leave out from ("Secretary of State") to end of line 27 and insert ("may in consultation with the local authority associations accordingly appoint to any panel drawn up under that paragraph such persons as they consider necessary to enable the members of the panel to carry out the functions of rent scrutiny committees for their areas").
The noble Lord said: Perhaps it would be convenient to discuss the next Amendment, No. 110DH, at the same time. We are now on Clause 51, having not put the Committee to the trouble of dividing on the last clause in order to save time, and not because one has any belief that the clause can possibly work. Clause 51 deals with rent scrutiny boards. The words in line 24 which are sought to be left out are the words that the Secretary of State:
"may accordingly appoint to any panel drawn up under that paragraph such numbers of persons as he considers necessary to enable the members of the panel to carry out the
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functions of rent scrutiny boards for their area".
These rent scrutiny boards were at one time called rent scrutiny committees, but the Council on Tribunals insisted on having their name changed as they wanted to have nothing to do with them, fortunately and very understandably.
The situation which we are going to discuss under a later Amendment is that these rent scrutiny boards are to have complete power to decide, in private and behind locked doors, without hearing appellants and without giving reasons for their decisions, what the rents of local authority dwellings shall be. Under a later Amendment we shall come to the manner in which they are to conduct their affairs. But in those circumstances—assuming that this situation continues—the only protection that the tenant will have is in the constitution of the boards. Therefore, instead of the words I have read out, this Amendment proposes to insert:
"May in consultation with the local authority associations"—
I dwell on the word "consultation"—
"accordingly appoint to any panel drawn up under that paragraph such persons as they consider necessary to enable the members of the panel to carry out the functions of rent scrutiny committees for their areas."
That brings in the point of consultation with the local authorities.
Subsection (4) says:
"… each rent scrutiny board shall consist of a chairman and at least six other members, at least two of whom shall be persons appointed to the panel under subsection (1) above".
Subsection (1) is the one which we have already been discussing. Amendment No. 110DH proposes to add:
"and four of whom shall be nominated for and elected by local authority tenants' associations in their area."
The reason for having both Amendments is to try to keep a better balance in the rent scrutiny boards which look like being composed unduly of professionals. As a professional myself, I recognise that there are professionals and professionals; and the kind that we want are those with the wider, rather than the narrower, experience. Therefore caution leads one to conclude that they should be balanced with those who are not professionals in that technical sense; people with their feet well on the ground who have experience of a different quality.
It is right, I think, that as the boards will be hearing nobody, but will be deciding behind closed doors matters affecting local authorities and local authority tenants, the only way to get any kind of acceptance of their decisions is to have boards constituted in part of people in whom the local authorities have every confidence and in part of people in whom local authority tenants' associations—representing the tenants—have every confidence. These two Amendments seek to achieve that purpose: balanced scrutiny hoards including members who have the confidence of the two sides whose views will not be heard, but in respect of whom decisions will be made.
8.25 p.m.
LORD SANDFORD: I do not seek to correct the noble Lord, Lord Diamond, at every point in the debate as we go along, but I must not let him get away with the assertion that the rent scrutiny boards do not have to give reasons for their decisions. It is specifically provided for in Clause 56(3) that they do have to give their reasons if they disagree with the rent assessments proposed to them by the local authorities. But we will discuss that when we get to it. As to these two Amendments, the purpose of the rent scrutiny boards is primarily to do a valuation exercise as a check and confirmation of the assessments worked out by the local housing authorities and presented to them for their adjustment. What is required is not people representative of the various interests concerned—the tenants and the local authority being the two concerned in this case—but people who have the necessary personal qualities: personal judgment and experience in the relevant fields of valuation and public administration, to mention the two main ones. Because of the need for experience in local government administration, the views of the local authorities will certainly be of value and will be taken into account by the Secretary of State in making his nominations, but that is not to say that they ought to have a right to nominate people themselves, and that is not provided for.
When it comes to tenants' associations, if we accepted that limb of the Amendment we should be putting on to the rent scrutiny boards people with a distinct bias in favour of one of the parties with an interest in the matter. Of course
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their interests must be taken into account, safeguarded, and provision made for them. But that is done in so far that the tenants' associations, if the tenants so empower them, will be able to make representations on behalf of the tenants to the local authorities when the provisional assessments are first published. This may be done by the tenants individually, or by the associations acting for them. That is the point at which the interests of the tenants' associations are provided for and safeguarded to an extent which they are not provided for at all at the moment. This is the point at which council house tenants are being given rights which they do not have at present. Because they are provided for there, it would be quite inappropriate to provide for them on the rent scrutiny boards. I have nothing else to say in answer to the Amendment. I hope that I have made the position clear to the Committee.
BARONESS GAITSKELL: The noble Lord, Lord Sandford, has said that the Government are going to have valuers and that they do not want to consider people from the local authority tenants' association because they would be biased in favour of the tenants. But where does the bias of these valuers lie? They have never valued local authority housing; surely they have valued only private housing. The Government are going to have a lot of non-professional people, too, but if they are going to have professional valuers where are these valuers to get their experience about valuing local authority housing and where is their bias going to fall?
LORD SANDFORD: It will be for the Committee to form a view, but if I were a valuer asked to value a piece of property, the fact that it has been occupied by a council tenant or by a private tenant would not, to my mind, introduce any particular difficulties. It is quite common for private housing to be acquired by local authorities and it then becomes part of the H.R.A. stock. But the fact that it has been changed from one sector to another does not introduce complications for valuers which present any difficulty at all.
BARONESS GAITSKELL: I disagree with the noble Lord, Lord Sandford. A valuer to-day values a house at a sum

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out of all proportion. It is valued according to the market value, but here we have local authority housing which has to be valued quite apart from market values. Therefore, there is still a problem. The noble Lord, Lord Sandford, has not answered my case at all.
LORD GARNSWORTHY: My noble friend Lady Gaitskell has raised a point that ought to receive more attention. Surely it is reasonable to indicate on what basis valuers are going to be chosen and from where they are going to be chosen. The point my noble friend is making is very serious. The public will want to know whether these valuers are as unbiased as the noble Lord, Lord Sandford, is suggesting. If it were not for the time factor, matters like this would need to be probed much more deeply than we are able to probe them. We are under some considerable constraint in putting these matters before the Committee but, quite frankly, the Committee, local authorities, tenants, and the public at large, are entitled to know on what basis the Secretary of State is going to appoint these people to these panels. It surely is not unreasonable to ask that he should consult, in the first place, with local authority associations. Amendment 110DG says that local authorities shall nominate and appoint. It is asking for consultations. The Government are bending over backwards to ensure that the people who are to administer the Bill when it becomes an Act are biased, or are thought to be biased, against the interests of the tenants, particularly tenants in local authority accommodation.
As to tenants associations being represented, Amendment 110DH does not ask that they shall appoint, but it does give the Secretary of State an opportunity to consult with them and to select people that they may suggest to him as being right and proper for this kind of work. I should have thought that their point of view could have been valuable and would have been appreciated. The Committee are entitled to a great deal more information than they have received.
LORD SLATER: My noble friend Baroness Gaitskell has made a very good point about valuers who are to be responsible to the local authorities for selling council houses on a rateable value. I am wondering whether the noble Lord,
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Lord Sandford, or my noble friend Lady Gaitskell have ever had any experience in local government. A Government valuer is necessary in order to purchase land on which to build council houses. He is the one who enters into negotiations with private landowners in order to acquire land for building purposes. Then there are officials attached to local authorities, the housing managers, architects and surveyors. They are responsible in the first place for drawing up plans for the building of houses. I hope that the noble Lord, Lord Sandford, will take note of what I am saying. A great many council houses were built after the Second World War at a price based on the land value operating at that time. Where do we stand in regard to post-war houses?
The Government on this occasion have just slipped up. They have never given serious thought, apart from seeking advice from officials in their Departments, to the administration of the local government departments which are responsible for housing. Local authorities differ on policy and on the fixing of rents. As a member of a rural local authority I was responsible for introducing a scheme whereby we were able to collect rent over a period of 50 weeks instead of 52 weeks per annum. We were able to do this by a slight adjustment in the weekly rents over a period of 50 weeks which meant that tenants received a kind of rebate, a fortnight's rent-free accommodation. This idea is spreading to various parts of the country. We must never forget that there are Tory councils who go all out to sell council houses irrespective of what it might incur. We must also bear in mind the amount of subsidies that have gone into the building of local authority houses during the postwar period of succesive Governments. The Department has not taken these issues into consideration. My noble friend Baroness Gaitskell has posed the question about where the bias of these valuers will lie. It is time that the Government were having second thoughts about issues like this which have been presented by my noble friend Lord Diamond and about what action should be taken in the interests of people who are tenants of local authority properties.
THE EARL OF BALFOUR: Rent assessment committees have existed for some

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time under the Rent Acts. One very large house-owning organisation has taken advantage of these rent assessment committees and the rent officers; that is, the Coal Board. They have registered through the Rent Act a tremendous number of their properties, and a tenant in that case has a complete security of tenure under the terms of the Rent Act. That is something, as we all know, that a local authority tenant does not have. I have never heard anybody complain of unfair treatment where the rent officers have been called in to register houses belonging to the National Coal Board. I feel that the fear of noble Lords opposite is misguided. I do not think it will exist in practice. I hope that to some extent, also, I have been able to answer one of the points raised by the noble Baroness, Lady Gaitskell.
LORD HYLTON: It seems that noble Lords opposite underestimate the ability of valuers. These are extremely objective people who are quite capable of ridding their minds of all forms of bias. Having said that, and having listened carefully to the reply given earlier by my noble friend, Lord Sandford, I am quite convinced that it would be wrong to exclude any lay element from the rent scrutiny boards. Maybe a minority lay element could be incorporated in them. I think that justice would be seen to be done as well as actually being done, and this could be a helpful thing in the public sector. The two Amendments that have been moved are almost certainly defective in form. In the second one, the number is specified, and this may easily not be the right number. However, I would ask my noble friend Lord Sandford, if he can, to give some further consideration to the principle raised, and whether he can possibly bring in an Amendment at a later stage to include a degree of lay representation on the boards.
BARONESS GAITSKELL: There is one other reason why the noble Lord's argument about the rent officers is defective. At present the rent officers are not valuers. Here the Government are introducing rent officers who are going to be valuers. Therefore, if they are so sold on this idea of fair rents comparable to fair rents in the private sector, why are
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they so against having fair rent officers of the kind that they have at present?
LORD DIAMOND: I am going to press the Government much more on this, because I do not think they have taken on board the seriousness of the situation. The seriousness of the situation does not rest only on this Amendment: it rests on the denial of justice, on the way the boards are going to funstion, which is the subject of a later Amendment and which I shall be speaking to at some considerable length. But the first thing I want to do—and I hope my noble friends on this side will not be jealous—is to thank the noble Earl, Lord Balfour, for his most interesting and helpful speech. He said that under the system which is not going to apply you have justice. You have rent officers. They can appeal to rent assessment committees. And the noble Earl said that, so far as at all events one applicant was concerned, the Coal Board, he was not aware of any complaint in relation to their dealings with this two-tier system of having justice performed in the fixing and registration of rents.
I go all the way with the noble Earl on that. That is exactly what happens at the present time, and it is exactly what is not proposed under the Bill. It is exactly what we are not discussing at the present time. It is that comparison which helps my case considerably, because the present proposal is for a board which sits in private, not in public; a board which does not have representations made to it; a board which does not hear the participants in the argument; a board which does not allow participants to be represented by counsel; a board which, with respect to the noble Lord, Lord Sandford, who went as near to misleading the Committee as I did, only has to declare its reasons when it disagrees—not when it agrees—with the view put forward by a local authority. Therefore the tenant comes nowhere. The tenant disagrees with the local authority. The local authority puts the provisional rent to the board. The board decides that the local authority is right. The tenant is not heard by the board; the tenant is not represented, and is not entitled to be told by the board why the board has

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confirmed what the local authority says. I will give way to the noble Lord, Lord Sandford, immediately if he wants to correct that statement of fact.
Very well. So we are all agreed on the facts, which is the only sensible way of proceeding with the argument. The fact is that a tenant comes nowhere. What are we proposing? To avoid the explosion which is going to take place when 5½ million tenants have their rents increased by enormous amounts and are going to have no outlet whatsoever for complaint when their fate is decided behind closed doors, we are proposing to help the Government, who still do not seem to understand that confrontation politics of this kind is suicidal, as well as being divisive. We are trying to help the Government by saying: "At all events if you are going to stick to that method of reaching decisions, for Heaven's sake let the boards which make the decisions contain some people in whom the participants have confidence."
The first thing I have made clear is that the tenant comes nowhere. So the first thing, surely, is that the tenant should have some representation in a committee that is going to decide his fate so far as the rent of his house is concerned. Surely that is a minimum and a reasonable request. The noble Lord, Lord Hylton, says that perhaps four is not the right figure: and he may be right. The purpose of moving an Amendment at Committee stage is to hear the views of the Government; to clarify one's mind; to be relieved of the mistakes one has made or the misunderstandings one has come to, so that one is in a position to reach agreement, if possible, on the Report stage. I am not concerned whether it is four, three or five, or whatever method is chosen, but it cannot be right for the Government to say, in those circumstances, that they will not have any tenant represented in the committee. The bias will be so strong, and so strongly felt, that I am not using extravagant language when I refer to "an explosion".
The second thing I am saying to the Government is that it cannot be right to refuse to say in a Bill that you are going to consult the local authorities in the appointment of a board which
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is going to have these draconic powers: it is going to act behind closed doors, hear nobody, not even publishing its conclusions except where they differ from the local authority; it is not going to hear counsel; it is not going to hear evidence; it is not going to hear expert witnesses—certainly not expert witnesses; it may research in its own way behind closed doors—none of these things is going to happen. Yet its function is to decide whether the views of the local authority on the rents are right. Therefore you must have, if not people who clearly can be seen to know the local authority point of view, people who are accepted by the local authority as being independent and informed.
What are these rent boards going to do? Are they going to inspect every house before reaching a decision? No, they are going to reach block decisions. That is what the Bill provides. Are they going to know about the whole of the houses or flats in the block? Of course not; how can they know? The only people who can know are the members of the local authority who work in the area or canvass the area, the tenants' association, people who live in the area. One is accused of suggesting that there will be bias in favour of the tenant by having people there who know the tenants' conditions and know the circumstances in which the tenants live. If that is the case, then anybody who speaks with knowledge or authority is biased. We want people who are knowledgeable and who will be accepted by the tenants as fair and independent and aware of the situation of the tenants.
These are very reasonable requests; they are against a background of the most astonishing method of constituting the board—we shall come to that later. What I have to say now is moderate in the extreme as compared to what I am going to say when we get to that. It is going to cost the noble Lord absolutely nothing to say that he will think about this Amendment and let us know his views at Report stage. There is every justification for what we are asking. It is not a Party point; it is a method for making his rotten scheme work. You cannot ask for more than that from an Opposition. The noble Lord has heard a lot. He has heard my noble friend, to whom I am grateful. He has heard

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nothing in approval of this proposal at all. There have been four speeches, other than from the Front Bench, and he has heard not one word in support of this proposal. He has heard words from his noble friend Lord Balfour supporting the situation which works well. When we come to the appropriate Part of the Bill I shall show how much it has departed from that situation, because we are going to have an Amendment which seeks to restore the present position. I look forward, possibly for the first time, to walking arm in arm with the noble Earl through the Division Lobby. It is my hope that it will not be for the last time. So I hope that the noble Lord, Lord Sandford, will say a good deal more, a good deal more sympathetically and understandingly than we have heard so far from him.
9.3 p.m.
LORD SANDFORD: That was good, spirited stuff. I am grateful to the noble Lord for giving me the opportunity and encouraging me to go rather further into this subject. It is good that the Corn-mince should do this because we are dealing with entirely new bodies. There is a good deal of inconsistency in what the noble Lord says. He started off earlier this afternoon advocating to the Committee reasonable rents, but without any criteria as to what was reasonable. It would not be possible to have a rent scrutiny board at all under that system, or for anybody to entertain any representations, because there would be no criteria by which to judge them. What we are dealing with now is fair rents. The criteria have been taken over from the legislation of the Party opposite and are set out in some detail in an earlier clause which we have been discussing. Those criteria have to be applied by the local authorities. The local authorities are elected by the local electorate, a large number of whom in many cases—sometimes the majority—are council tenants. For the first time in legislation the council tenants have a statutory right to make representations and to have them heard about increases and changes in their rents. That is something which they have not had hitherto. It is provided for in this Bill. The local authority have to take into account any representations council tenants make. There is a statutory right for this as the noble Lord has said.
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There is nothing now to prevent tenants from talking to their councillors; but that is quite different from people having a statutory right to make representations, and to have those representations dealt with and heard properly.
The rent scrutiny board is not the body that noble Lords opposite take it to be. The rent scrutiny board will have what is essentially a valuation function. The specially appointed members will be persons whose experience, personal qualitties and special qualifications, if they have them—and I take the point from my noble friend Lord Hylton, that not all members need be specialists—make them particularly suitable for the service that the rent scrutiny board has to fulfil.
LORD SLATER: Do we take it that the valuation officers that were set up by the noble Lord's Government will be the officers that the Minister has in mind, and that those are the people who will have to carry out the operations of this particular Bill?
LORD SANDFORD: No, not directly; they are the kind of people from whom suitable candidates for these boards may be well drawn, but there are many others. Members are likely to include some persons with special experience in public administration, including local government administration, knowledge of housing problems and housing administration. They may have professional qualifications in valuation and estate management. I think I have said enough to indicate the range of specialities from which the people with special qualifications may be drawn; there may be experts and there may be lay people with wide experience of public administration. That is the kind of body that the rent scrutiny board will be. That is the kind of job they will do. Of course the tenants and tenants' associations must have an opportunity to make their representations, and here, for the first time, we are providing by Statute for this. But this will be to the local authority itself after the publication of the rent assessment. I hope that explanation has made the matter clearer than it was before as to how we see this board operating.
LORD DIAMOND: The noble Lord has made it clearer that the noble Lord, with the greatest possible respect, can

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have little idea of how local authority works or how a citizen in a local authority makes his representations. He is laying great stress on the fact not that a tenant will be able to have access to the board that makes the decision, but that the tenant will have access by Statute to the local authority. He has that access at the moment in a greater measure than he will have under this Bill. He has that access under the greatest sanction that exists; namely, the sanction of the vote. If any citizen goes to his councillor and says, "I want to object", does the councillor say, "I am not going to listen"? He does not say that twice—at least, not after two elections, because he is no longer a councillor. The councillor's job is a difficult and tiresome one. He has to listen on Mondays, Tuesdays, Wednesdays, Thursdays, Fridays, Saturdays and Sundays, to the people living in his area, ringing up, coming to see him and making complaints; and if he does not listen he does not get re-elected. That is the real sanction.
But what is going to happen now? That sanction is withdrawn, because the local authority puts forward a view of the rent to the board and the board makes a decision. It is no use a municipal voter going to his councillor and saying, "I object to what the board has decided." All the councillor will say is, "So do I, but what can I do? I cannot make representations; I cannot go and be heard; I cannot introduce expert witnesses to be heard; I cannot employ counsel and have it heard; I do not know how they carry on their business—it is carried on behind closed doors. I'm in the same boat as you, mate." The two of them will commiserate with each other and the tenant will have no sanction, no right whatsoever. That is the change in the situation. So the reality, with the greatest respect to the noble Lord, Lord Sandford, is that there is being written into the Bill a statutory right which is absolutely meaningless, to replace a right which is valuable and always used and which is based on the sanction of the vote, which is the democratic system in our country. So there is no advantage in the scheme which the noble Lord is proposing; nothing but disadvantage.
So I come back to my earlier request. He has made it clear that there is a
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further disadvantage which I did not find it necessary to refer to, because I thought I had made a sufficient case. As there is a further disadvantage, surely it is right that the board which will decide upon the disagreement of the tenant and the local authority, without hearing either party, or counsel, or any witness, should include members in whom both sides have confidence and who know the circumstances, the locality and the kinds of problems affecting people living there.
I repeat that we are asking nothing of the Government; it is not a Party point at all. We are asking whether they would be good enough to consider this matter in the light of the difficulties they are going to experience in getting their scheme accepted. I should prefer to see their scheme destroyed, because it is a bad scheme, but our duty in Committee is not to challenge the fundamental principles of the Bill but to seek to improve them. On the basis of the Government's own principle, we think that the only way in which the thing might work is if the boards are so constituted that the local authorities and the tenants had some faith in them. The proposals in these two Amendments are merely an attempt to offer one alternative. If the Government can think of any others we shall be glad to look at them, but that they should turn them down out of hand is something which we cannot accept.
LORD SANDFORD: It was clear from his earlier remarks that the noble Lord, Lord Diamond, had not read Clause 56(3). It is now clear from his further remarks that he has not read Clause 56(4). There it is clearly set out that the local authority can make representations to the rent scrutiny board. Nor is the noble Lord's grasp of Clause 53 all that it might be. A particular phase in the whole process is there set out. There is a pause of two months before the local authority submit their assessment to the rent scrutiny hoard, specifically provided for the consideration of tenants' or tenants' associations' representations, There is no question of the local authority making assessments and passing them to the rent scrutiny board at once.
LORD DIAMOND: There are times when the noble Lord and I misunderstand each other in such a fundamental way that I am not sure that he is trying to help

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me as much as I should like to be helped. It is true that I have not read the Bill in the same detail that he has. It is also true that we have not got to the Amendment to which I am continually referring and did not want to have to go into very closely. I want to be sure that what the noble Lord is saying is right. As I understand it, he is saying that a tenant can make representations to the board before the board reaches its conclusion. I think that is wrong, but if the noble Lord tells me that it is right I will accept it.
LORD SANDFORD: I am afraid that is not right. In Clause 53, particularly in subsection (5), there is provision for a pause of two months specifically to allow tenants and tenants' associations to make representations to the local authorities about their provisional assessment. That is the additional statutory right provided to tenants which they have not got at the moment. I make no mention of the right of all tenants to approach their council. That exists and that is not changed by this Bill. There is built into this subsection an additional statutory right. The next point to which I wanted to invite attention—
LORD DIAMOND: The noble Lord has challenged me and I want to get this straight. I am saying that there is no provision for the tenant to apply to the board. Nobody said there was no provision for the tenant to apply to the local authority. I am talking about the tenants applying to the board. I am saying that the board will not hear a tenant or his representative or his expert witness, nor will it sit in public. Is that wrong?
LORD SANDFORD: The noble Lord said before that there was no scope for representaions to be made to the rent scrutiny board. There is provision in Clause 56(4) for the local authority to make representations to the rent scrutiny board.
LORD DIAMOND: With great respect, the noble Lord does not improve the situation by avoiding my question three times running. I am speaking about the tenant. I have not got so far as saying that the noble Lord is deliberately trying to mislead the Committee, but it is getting very near to it.
LORD DERWENT: Would it not be better if the noble Lord opposite occasionally listened to the explanation and then he could decide afterwards?
LORD SHEPHERD: I wonder whether I can help in this matter. My noble friend Lord Diamond made an appeal to the noble Lord opposite to consider this matter. Having listened to the debate, I am not saying that the noble Lord, Lord Sandford, is evading the issue. He may not understand the provisions of the Bill and nobody would criticise him in those circumstances. But if he will undertake to consider this matter I am certain my noble friend will not persist. If the noble Lord will look at it I am sure that my noble friend will agree and we can move on. It seems to me that there is no point in doing otherwise if the noble Lord finds himself unable to answer the particular questions my noble friend has put to him.
LORD SANDFORD: Of course we are considering all the points noble Lords opposite are making to us, and we shall consider them, but I want to make it clear, because I do not think it was clear to the noble Lord before, that there is provision in Clause 56(4) for the local authorities to make representations to the rent scrutiny board. Equally, there is a requirement on the rent scrutiny board, as I said earlier, to give their reasons if they disagree. The other point I was seeking to make, because I did not think the noble Lord had appreciated it, was that there is a specific pause in the process between the publication of assessments by the local authority and the submission of them to rent scrutiny boards. It is a difficult Bill, I know, and I am trying, when it appears to me that points may have been missed by noble Lords opposite, to make them clear. I have the job of doing this as well as defending the Government's policy. But I do not think I can say more now. If noble Lords opposite think that rent scrutiny boards ought to operate in a different way from the one in which we intend them to operate, and they feel they have made all the points they want to make, then there is nothing further to be done except to divide.
LORD GARNSWORTHY: May I say with great respect that I appreciate that my noble friend Lord Diamond did not

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dwell on the pause aspect of the matter, but I think that if the noble Lord, Lord Sandford, will read to-morrow my noble friend's words he will appreciate that by what he himself has just said he has added nothing. What the noble Lord, Lord Sandford, has signally failed to do
9.20 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110DJ:
Page 53, line 39, leave out ("and may be removed").
The noble Lord said: Subsection (5) deals with rent scrutiny boards and provides that:
"The chairman and other members of the board shall be nominated and may be removed by the president of the panel, who shall have power to nominate himself as chairman or as an ordinary member of the Board."
The president of such a panel will have quite an amount of power. The idea of him nominating without consultation in the first place, if that is to be the position, is a little far-fetched. The idea that he shall have power to remove anybody is going ridiculously far. It means that nobody can be sure of doing his job according to his own likes and conscience
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is to reply to the questions and points made by my noble friend Lord Diamond.
9.11 p.m.
On Question, Whether the said Amendment (No. 110DG) shall be agreed to?
Their Lordships divided: Contents, 26; Not-Contents, 54.

CONTENTS

Ardwick, L.

Henderson, L.

Stow Hill, L.

Bernstein, L.

Hoy, L.

Strang, L.

Beswick, L.

Hylton, L.

Tanlaw, L.

Champion, L.

Milner of Leeds, L.

Taylor of Mansfield, L.

Diamond, L.

Phillips, Bs. [Teller]

Wells-Pestell, L.

Gainford, L.

Popplewell, L.

White, Bs.

Gaitskell, Bs.

Sempill, Ly.

Wise, L.

Garnsworthy, L. [Teller]

Shepherd, L.

Wootton of Abinger, Bs.

Hanworth, V.

Slater, L.

NOT-CONTENTS

Aberdare, L.

Derwent, L.

Limerick, L.

Abinger, L.

Digby, L.

Lothian, M.

Ailwyn, L.

Drumalbyn, L.

Milverton, L.

Alexander of Tunis, E.

Elles, Bs.

Reading, M.

Alport, L.

Ferrers, E. [Teller]

Redesdale, L.

Atholl, D.

Ferrier, L.

Reigate, L.

Balfour, E.

Fortescue, E.

Saint Oswald, L.

Barnby, L.

Fraser of Lonsdale, L.

Sandford, L.

Belstead, L.

Gage, V.

Savile, L.

Berkeley, Bs.

Gisborough, L.

Selborne, E.

Bessborough, E.

Gowrie, E.

Strange, L.

Brabazon of Tara, L.

Greenway, L.

Strathclyde, L.

Brooke of Cumnor, L.

Hailes, L.

Terrington, L.

Brooke of Ystradfellte, Bs.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Thomas, L.

Colville of Culross, V.

Vivian, L.

Cork and Orrery, E.

Harvey of Prestbury, L.

Wakefield of Kendal, L.

Craigavon, V.

Hatherton, L.

Winchester, M.

Cullen of Ashbourne, L.

Kemsley, V.

Young, Bs.

Denham, L. [Teller]

Resolved in the negative, and Amendment disagreed to accordingly.

without being removed by the president at a whim—or should I say at a stroke?—whenever it occurs to the president so to do. In these circumstances I hope that the Government will agree to delete the words "and may be removed."
BARONESS GAITSKELL: Everyone has said that this is a difficult Bill and not much fun, but subsection (5) is just hilarious. It could have been drafted by Edward Lear. The words "and may be removed" should be removed, but why not simply by-pass the whole of the first part of the provision, and instead of saying:
"The chairman and other members of the board shall be nominated and may be removed by the president of the panel, who shall have power to nominate himself as chairman or as an ordinary member of the board"
simply say:
"… the president of the panel … shall have power to nominate himself as chairman or as an ordinary member of the board."

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That would save a lot of people a lot of trouble.
LORD HYLTON: If the Minister does not wish to accept the Amendment, may I ask him to say in what circumstances it is envisaged that a member of a panel might be removed in this way?
LORD SANDFORD: If it had been realised what emotion and anxiety these words would cause, a different phrase might have been selected, and perhaps we can choose another one now. This provision does nothing more than enable the president to exercise the necessary functions to keep the rent assessment panels matched to their tasks. The committees, once they have done one particular job, cease to exist and then the president appoints a fresh one, so that there is no question of removing people or disbanding them. They automatically come to an end as their job is done.
These words appear in the clause only in order that the president may he able to continue the unfettered discretion he was given when rent assessment committees were established under earlier legislation, passed when noble Lords opposite were in power, to operate fair rents in the private sector and to enable him to remove members from one rent scrutiny board when the amount of work they have to do no longer justifies the number who might have been required at an earlier stage and to put them to work on another rent scrutiny board. That is the only purpose of it.
Rent scrutiny boards on the whole will remain in existence for some considerable time but their workload may well alter, and in those circumstances the president must have the discretion to decide when that rent scrutiny board does not require quite so many people. Then he removes a member and puts him on another rent scrutiny board. The working of this whole system was something the Francis Committee looked into. There is nothing in their Report to indicate that panel presidents have abused the unfettered discretion which they were given to form committees and adjust committees. The rent scrutiny boards are slightly different because they will remain in existence for longer, and during their life their work may decrease, so that it will be necessary to take people off them and put them to
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work on some other rent scrutiny board. I am sorry that the simple and innocent purpose behind this clause has caused so much anxiety.
BARONESS GAITSKELL: May I ask the Minister, if he is removing both the chairman and a member of the board because there is not enough work for them to do, why he has to appoint himself as chairman and a member of the board immediately? I do not understand.
LORD GARNSWORTHY: May I put this point to the Minister? This subsection is very unfortunately worded. Most people reading it will feel that the chairman will consider appointing himself after he has removed somebody else. That may not be the intention, but I think the subsection could be re-worded with advantage. The Minister said that he was prepared to think about another word instead of the word "remove". Would he go so far as to say that there is a case, if not for deleting the subsection, at least for considering redrafting it completely? Because at the present time the inference drawn by most people will be that the chairman is going to consider appointing himself after he has removed the chairman or after he has removed some other member. When the noble Lord says that they will be removed when they are no longer required, at what point is the chairman likely to be no longer required if in point of fact the other members are to continue?
LORD STOW HILL: I have just been glancing at Schedule 5 to the 1968 Act which deals with rent assessment committees and I can find no similar power there. Would not the noble Lord agree that, whereas you find powers to remove in the case of a president of a panel of this sort from time to time in other precedents, you generally find coupled with it some words like "removed for good reason" or "for good cause" or some words of that sort? He will have realised that the naked words "may remove", unqualified as they are, have given rise to some considerable anxieties on this side of the Committee. Would he not agree that it would be better for him to take these words back, think about them and perhaps insert some qualifying words like "removed for good reason" or "for good cause"? I make that suggestion to him.
LORD SANDFORD: I think I have already indicated that if we had thought, as it is still clear, that these words were causing anxieties, we would certainly have a look at them. But the reason for including this power here is as I have stated. The reason why it is not exactly equivalent to that provided for rent assessment committees is, as I explained; namely, that rent assessment committees have a short life in which they do a particular job and then they disband. There is no need to remove anybody because it ceases to exist. But the rent scrutiny board has a longer life with a changing workload and its members may need to be reduced. I will certainly look at this again to see whether I can find a form of words which does what we want but does not cause anxiety or concern.
LORD DIAMOND: I am grateful to the noble Lord for everything he has said and for undertaking to look at it and also for having explained the circumstances which he has described as the only circumstances in which the power to remove is envisaged. In order to enable us to get on and for this matter to be considered in its appropriate context, we will at the Report stage put down an Amendment which coincides with the words which the noble Lord has used.
Resolved in the affirmative, and Clause 51 agreed to accordingly.
We trust that that Amendment will be accepted at that stage. I beg your Lordships' permission to withdraw this Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 51 shall stand part of the Bill?
LORD DIAMOND: This is an objectionable clause, objectionable in every way, and none of the objections have been removed by the discussion that has taken place. We have made our position quite clear with regard to these rent scrutiny boards; we do not love them any more than the Council on Tribunals loves them. We think it is a very good thing that at all events they could not parade as judicial bodies when they are nothing whatever related to them. It is most unfortunate that our attempts to have the boards constituted in such a way as to be acceptable to the people whose affairs they are going to decide have not succeeded. If we cannot get any better response from the Government all we can do is to seek to have the whole clause removed.
9.32 p.m.
On Question, Whether Clause 51 shall stand part of the Bill?
Their Lordships divided: Contents, 55; Not-Contents, 17.

CONTENTS

Aberdare, L.

Digby, L.

Lothian, M.

Abinger, L.

Drumalbyn, L.

Milverton, L.

Ailwyn, L.

Elles, Bs.

Mountevans, L.

Alexander of Tunis, E.

Elliot of Harwood, Bs.

Reading, M.

Alport, L.

Ferrers, E. [Teller.]

Redesdale, L.

Atholl, D.

Ferrier, L.

Reigate, L.

Balfour, E.

Fraser of Lonsdale, L.

Ruthven of Freeland, Ly.

Barnby, L.

Gage, V.

Saint Oswald, L.

Belstead, L.

Gainford, L.

Sandford, L.

Berkeley, Bs.

Gisborough, L.

Savile, L.

Bessborough, E.

Gowrie, E.

Sempill, Ly.

Brabazon of Tara, L.

Greenway, L.

Strathclyde, L.

Brooke of Cumnor, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Terrington, L.

Brooke of Ystradfellte, Bs.

Thomas, L.

Colville of Culross, V.

Harvey of Prestbury, L.

Thorneycroft, L.

Craigavon, V.

Hatherton, L.

Vivian, L.

Cullen of Ashbourne, L.

Hylton, L.

Wakefield of Kendal, L.

Denham, L.

Kemsley, V.

Young, Bs. [Teller.]

Derwent, L.

Limerick, E.

NOT-CONTENTS

Ardwick, L.

Gaitskell, Bs.

Shepherd, L.

Bernstein, L.

Garnsworthy, L. [Teller.]

Tanlaw, L.

Beswick, L.

Hoy, L.

Wells-Pestell, L.

Blyton, L.

Maelor, L.

White, Bs.

Champion, L.

Milner of Leeds, L. [Teller.]

Wise, L.

Diamond, L.

Phillips, Bs.

Clause 52 agreed to.
Clause 53: [Publication and alteration of provisional assessments]:
9.40 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110J:
Page 54, line 33, leave out ("six") and insert ("twelve").
The noble Lord said: This Amendment refers to the publication of provisional assessments, and at the beginning of the clause it is provided that:
"An authority shall publish their provisional assessment of fair rents within six months of the coming into force of this Act".
The Amendment suggests that for "six months" the Bill should read "twelve months". I am moving this Amendment because we think that six months is an impossibly short time if the task is to be taken seriously. Moreover, we believe that it is quite unnecessary to provide for such a short period as six months. We are suggesting 12 months, not because 12 months is a very adequate time but because it gives more time, would produce better results and would be very much more economical in labour and money.
The first point which I want your Lordships to consider is the range and variety of dwellings which have to be looked at—variety in age, in location, in amenity, in whether or not they have gardens and in whether or not there is the noise of aircraft or of traffic. All these matters create a need for a separate examination of a whole variety and range of dwellings. The second point which I want your Lordships to consider is that there is really no adequate starting point. So far only 300,000 houses in the private sector have registered fair rents. We are now moving to a figure of 5½ million in the public sector, and 100 based on five or six is not enough to cover the enormous variety. Then there is the question of the time scale—perhaps the most relevant consideration of all. These 300,000 houses in the private sector were registered over a total of six years, and 5½ million on the same basis would take over a century. We are not suggesting a century, but we are suggesting 12 months. Even that is too short, but it gives some possibility for the task to be done. The Conservative chairman of the Conservative council at Reading has stated that his officers
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have estimated that it would take 10 years for this job to be done satisfactorily in Reading, so that six months is really absurdly short.
Then there is the question of staffing. I believe that Camden has estimated that they would need 12 extra staff at a cost of some £35,000. At all events, they would need a substantial number of additional staff at substantial cost—10 being valuation and technical professional staff and two being administrative staff—to cope with the work of publishing a provisional assessment of fair rents. But if the period were extended, their requirement of staff would be proportionately reduced, as would the cost. I think that a conservative estimate for the country as a whole is that something like 1,000 additional qualified technical staff and about 250 additional administrative staff would be required in order to do this job, at an additional cost of something like £4 million. Doubling the time could halve the bill, according to the Camden officer's estimate, and so we could save up to £2 million by merely changing from six months to twelve months.
I have tried to get help from the Financial Memorandum to the Bill but it is very reticent on this point. If one looks at page viii one sees the effects of the Bill on public service manpower. It says that we will need an additional 1,350 civil servants in order to carry out the provisions of the Bill and, in the last paragraph, that some increase in the staff of local authorities is expected to arise as a result of the provisions of the Bill, including the administration of the rent rebate and allowance schemes and the work in connection with the determination of fair rents. I now understand why the noble Lord, Lord Avebury, chided me somewhat for making an underestimate in allowing only 150 additional local government officials, making a total of 1,500 extra people to be employed. It will be very much more than 150; I should have esimated 1,000, getting near to a total of 2,500 rather than 1,500, in order to carry out the provisions of the Bill in the time which this clause suggests.
I hope that the Government will be able to say that in the circumstances they feel that the matter should be dealt with more efficiently and at less cost in manpower and money by taking twelve months instead of six. I cannot see that

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it makes very much difference. The Government have estimated that the final determination, on the basis of six months here, would still take something like 18 months after allowing for various representations that have to be made. So I cannot see that it makes very much difference whether the final determination is made in 18 months or in 24 months if the longer period provides for the job being done properly or, at all events, a good deal better and saves so much in skilled manpower and in money.
I do not know how so many skilled people, such as valuers and the like, with all the qualifications which we were told in an earlier debate were going to be necessary, will be found. It is hardly necessary for me to say that the A.M.C. is strongly in support of the extension of time because it represents the authorities who have got the job of doing all this. I hope that the Government will accept this Amendment which is put forward in the interests of economy and efficiency.
LORD AVEBURY: May I say one word in support of the noble Lord, Lord Diamond, and point out that the Government have rightly argued that the conversion from controlled rents to regulated rents should be phased over a number of years. This is because the rent officers will not be able to cope simultaneously with the 1·1 million dwellings which are at present in the controlled sector. The sequence of conversion is being spread out according to the rateable value of these dwellings up until 1975. So the Government are saying that the rent officers are not able to cope with 1·1 million dwellings in under three years and yet they are proposing that the assessment of local authority dwellings, which are several times as numerous, ought to be completed within six months. How can those be reconciled? Only if you say that the assessment will be done on a very rough and ready basis, and that large estates will all have their rents fixed simultaneously—and that, of course, would conflict with the provisions of Clause 50, where regard is supposed to be had
"to the age, character and locality of the dwelling and to its state of repair."
Going back to what we were discussing earlier in relation to the Birmingham ease,
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it was evidently the intention there that all houses or flats of a particular kind and in a particular area to which the Birmingham treasurer attached an amenity factor would have the same rent. But that could not be fair, because one of the houses might be next to a gasworks at one end of the estate and, at the other end of the estate, with an exactly similar rent, the tenant might be overlooking a public park. So you would not be taking into account the factors which are mentioned in Clause 50. If one is going to be fair and is to determine rents on the basis of this formula which the Government have themselves set down, it is physically impossible to do the job in six months. Therefore, I would beg the Government to accept this Amendment. I think twelve months is far too short a period, but if that is the best we can have from the Government then I hope that we shall get at least that.
BARONESS YOUNG: I should like to begin, if I may, by putting the Record right on the numbers of council houses and the numbers of private tenancies going into regulated tenancies with fair rents. There are in fact slightly under 5 million council tenancies in England and Wales, and there are at present some 300,000 tenancies in the private sector with fair rents registered. Fair rents are being registered at the rate of about 100,000 a year. To suggest, therefore, that it is an absolutely impossible task because it has taken five or six years to achieve this rate is not a fair analogy. Clearly, at the start it was a much more difficult job, and what we can do now is to build on the experience that we have already gained. The fact is that in the private sector this is going much more quickly than it was at the beginning.
Having said that, I should like to say that we recognise that the preparation of the provisional assessment of fair rents for every Housing Revenue Account dwelling of an authority will not be an easy task to achieve within the six months which the Bill lays down. But having heard so many noble Lords opposite, in the course of both this afternoon and this evening, explaining that in the case of council rents local authorities have an enormous amount of knowledge about their own stocks of houses—the kinds of houses they are, and so on;

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in fact, a great deal of detailed information about them—I think it is only fair to say that they start off in a much better position than private landlords in the case of private tenancies. In fact, of course, on the whole, local authority dwellings are mainly grouped in estates built at about the same time and containing a limited number of standard dwelling types. Therefore, I think it is fair to say that, while an authority must assess the fair rent of each dwelling individually, the scope for variation between the dwellings on an estate may be relatively limited and factors within each dwelling type are readily identifiable—factors such as the outlook, the size of garden, the absence or presence of a garage and those sorts of facilities.
Furthermore, many authorities at present adopt to a greater or lesser degree a system of rent pooling—a point which has been referred to many times to-day—under which the rent structure takes account of the differences in size, in amenities and in the location of the houses within the Housing Revenue Account of an authority. I should like to say that, in connection with the relative level of fair rents, authorities may find it helpful to have some regard to gross values; and the Inland Revenue are ready to make available informally, to any authority, the gross values of their Housing Revenue Account dwellings proposed for the 1973 rating revaluation, and certain survey data, including information on floor areas. As regards the overall level of fair rents, authorities can obtain advice from the rent officer for the registration area in which the dwelling is situated. The other fact is that there is nothing to prevent an authority that feels it is unable to complete its provisional assessment within the six months from embarking on this now; indeed it could have done so some months ago. The G.L.C., Portsmouth and Newcastle-upon-Tyne have already started on this task. I hope that for these reasons noble Lords opposite will feel ready to withdraw the Amendment.
LORD BERNSTEIN: May I ask the noble Baroness to say categorically how many extra civil servants and municipal servants will be required to operate the clauses in this Bill, and what will be the total cost?
LORD DIAMOND: While the noble Baroness is working out that sum—unfortunately there is not sufficient information provided in the Financial Memorandum—may I say that I recognise the force of all the arguments she has used. That is why I think that twelve months, although probably too short a period, may not prove to be impossibly short. But I cannot conceive that the task could be done in six months, and it is not right to penalise an authority which had not anticipated the passing of an Act of Parliament. We are getting to a sorry state if local authorities are to be expected to engage staff and incur expenditure on the basis of the provisions in a Bill which has not gone through Parliament. I should have thought that was not an argument the Government would wish to use. Otherwise they will find themselves in considerable trouble. Because, of course, Bills may be amended by the Government, and this Bill is being substantially amended. If a local authority has incurred expenditure and finds it has no authority for doing so, because the necessary provision was removed before the Bill became an Act, the auditor would be in difficulties; individual councillors would be surcharged and, I should have thought, be able to look to the Government for the recovery by way of damages of the loss they had suffered.
What the matter boils down to is this. The noble Baroness and the Government think six months is possible. We, and the Association of Municipal Corporations—a body not entirely ignorant of the subject, as they have to work it—think that period is impossible. The sensible solution, therefore, is for the Government to say that they will introduce a provision whereby a local authority would be able to seek permission for the Government to extend the period from six to twelve months if it could not achieve its purpose adequately within six months. Would the noble Baroness be prepared to consider a suggestion of that kind, and to put down her own Amendment on Report stage?
VISCOUNT GAGE: I wonder whether any special provision is to be made for those district councils and housing authorities which are yet to be formed, because we are now in a period of transition. I do not know when such authorities would start; they have not officials or offices,

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and I feel that they should have some special protection.
BARONESS YOUNG: The answer to the questionn that the noble Lord, Lord Bernstein, put, is I think in the Explanatory Memorandum at the beginning of the Bill. If my arithmetic is right, it is estimated that there will be about 500 extra staff for the rent assessment panels, and the Supplementary Benefits Commission. In the next paragraph it is indicated that there will be a substantial increase in the rent officer service. According to the memorandum the figure may well double from 850. As far as local authorities are concerned, I have not got the figures. It would depend very much on what staff local authorities have at present. Housing authorities vary from very large county boroughs to much smaller rural and urban districts. It would be difficult to give any kind of exact figure of the numbers of increased staff that local authorities would require, but I accept that they would require more staff. I have not the figures of cost, but if it is possible to get any kind of costing I will, of course, let the noble Lord, Lord Bernstein, know. I am not in a position to say in any way that I could accept this Amendment, but if there was a point that could be considered without prejudice before Report stage, I think that could be done.
LORD BERNSTEIN: I am sure that Her Majesty's Government have done some homework on this subject. If they have not, I hope they will do so pretty quickly. Perhaps they could let us know in writing the estimated number of
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municipal servants required—this they could get from the associations—and the total cost.
LORD DIAMOND: I am grateful to the noble Baroness, Lady Young, for what she has said. She did not add greatly to our knowledge on the public service manpower or on the cost. So far as manpower is concerned I think she was referring to the first two paragraphs on page viii in the Explanatory Memorandum where the staff is described, but that does not deal with the third paragraph where the question mark arises, so we should be grateful for any help she could give us on that. The only estimate I have been able to work out is based on an inadequate sample of one or two local authorities who have described their difficulties. The noble Baroness, Lady Young has said, as I understand it, that she is not in a position to accept the Amendment but will consider what we have been putting forward. In particular, I am anxious that she should be good enough to consider the suggestion I made that a local authority can be given an extended period, not without the Minister's permission but if the Minister thinks fit. That is going only a very small way to help a particular local authority out of a particular difficulty. Otherwise we are afraid we might get a botched job. In the circumstances, I am grateful to the noble Baroness, Lady Young, for what she has said in her promise to have a look at the matter, and I ask your Lordships' permission to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.5 p.m.
LORD AVEBURY LORD AVEBURY moved Amendment No. 110K:
Page 55, line 10 leave out from ("and") to end of line 18, and insert ("shall notify each individual tenant in writing of the provisional assessment of fair rent on his own dwelling, and of his right under subsection (5) below to make representations relating to it.")
The noble Lord said: Would it be convenient for the Committee if we took Amendments 110K and 110M together, since both of them relate to the serving of notices on tenants at various stages in the procedure for determining the fair rent? Amendment 110K seeks to insert strengthened machinery for ensuring that tenants know what is going on at the preliminary stage when the rent assessment is first prepared. All Clause 53 as it stands says is that the authority,
"shall take such steps as they may consider reasonable to notify each individual tenant of a dwelling to the rent of which the assessment relates …".
I think the word "to" must be wrong there: it must be "of the rent" and "to which".
There are minor drafting points which perhaps the noble Baroness will have a look at before Report stage; I did not think it was worth putting down an Amendment now.
What are "such steps as they may consider reasonable"? Some authorities might think it adequate to place a notice in the office of the housing department to inform tenants verbally through the rent collector that they could come in and look at it if they felt like it. I do not see why this provision should not be strengthened. The machinery exists for individual notification of the tenants, because rent collectors go round periodically, and the notices for which I call in Amendment No. 110K could be taken round in the normal course of events. The only cost that would be placed on the shoulders of the local authority would be the cost of printing the notices, because they could be distributed for nothing. Certainly, I think it important that each individual tenant should have written notification.
The Party opposite are always telling us how the fair rent provisions in relation to local authority dwellings are modelled
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on those contained originally in the 1965 Rent Act for private dwellings and read over into the Consolidation Act 1968. If one looks at Schedule 6 to that Act one finds in paragraph 2:
"Where the application is made by the landlord alone the rent officer shall serve on the tenant … a notice informing him of the application and specifying a period of not less than seven days from the service of the notice during which representations in writing may be made …"
So in the case of the private tenant it was thought desirable that individual notification should be given. All I am asking is that the same privilege—if you like to call it that; I would call it a right—should be accorded to the tenant in the public sector. If noble Lords and the noble Baroness opposite are so keen on the Government's formula in the 1965 Act, here is an opportunity to adopt a little more of it.
Let me turn to the second Amendment, No. 110M, which is to provide for a similar notification in Clause 54(1). The notification is needed for this reason: that the authority may reassess the rent of a dwelling, and unless there is a second notification the tenant has no way of knowing that this has been done. They have to amend the entry relating to the rent of that dwelling in the copy that is deposited at their principal office (that is provided for by Clause 53(7)(a)), but they do not have to tell the tenant that this is being done. There might be an alteration made in that principal office copy and the tenant could remain in complete ignorance of the fact. So I am asking that when the final copy is submitted for approval under Clause 54 the tenant should be given a second notification. Here again I must draw a parallel with the 1968 Rent Act, the provisions of which were read over, as I have said, from the original 1965 formula which is so popular with the Government. The noble Baroness, if she is going to reply, will find the relevant provision in paragraph 5 of Schedule 6 to the Rent Act 1968. I have simply copied the wording from there in the perfect knowledge that this will be to the satisfaction of the Government. These are two very small Amendments which I feel sure the Government will be able to accept. I beg to move.
VISCOUNT HANWORTH: I should like to support the Amendment put forward so briefly and to the point by the noble Lord, Lord Avebury. It seems to me (there may be an explanation) quite incredible that one should try to save—I presume that this is the object—the money on postage and ask the tenant to go and look at the rent assessment. People's time these days is of some value, and if they are expected to trail to wherever the offices are purely to save a 2½p or 3p stamp it is quite appalling.
LORD HYLTON: I think there is considerable merit in this Amendment. Tenants may have to travel quite considerable distances to get to their council offices. A one-line notice could be incorporated along with the rent demand, which will be delivered anyway.
LORD SANDFORD: The proposal behind the Amendment of the noble Lord, Lord Avebury, is certainly an idea and a very desirable one. It was a subject that was discussed with the local authority associations, among many other topics, in preparation of this Bill. They recognised that it is very desirable, in the course of notifying tenants that a rent assessment has been made—that is provided for in the Bill—that each individual tenant should be notified of what his particular assessment has been. They confirmed that it was their intention to recommend to their members that they should do so. But they asked that this should not be made a statutory requirement of every single authority. Like noble Lords opposite, we pay attention to what the local authority associations say. On the whole, we have been disposed to agree with them that, although this is something which everybody would like to be able to do, and most authorities would try to do, there is a case for not making it a statutory requirement on every authority.
LORD AVEBURY: The authorities that found some difficulty were the widely scattered rural authorities which would have some physical difficulty in getting notices out to tenants in isolated areas.
LORD SANDFORD: That is not the argument. There is a requirement to
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notify everybody; a letter has to go to every tenant indicating that a fair rent has been assessed. That statutory requirement is met by sending out a circular. The Amendment the noble Lord is seeking would involve sending out an individual notice, which is an increased commitment. It is not a question of saving postage, because a letter has to be sent to meet the statutory requirement. The point the local authority associations made was that they should not be under a statutory requirement to notify each individual of his own particular assessment in every case, though they recognise this as desirable.
LORD SHEPHERD: Could the noble Lord give us the reasons why the authorities gave that advice to the Government? It would be helpful if the noble Lord could give the reasons why.
LORD SANDFORD: I do not think I can do so off the cuff. I have already undertaken to consider whether this agreement is the best in all the circumstances. Noble Lords will recognise that in a widespread rural community where it is not at all ordinary for people to come anywhere near their town hall it imposes a much greater burden on individual council tenants to come in and inspect the lists. There is a much stronger case there for notifying individual tenants of their own particular assessments. In other cases it is not an undue burden. The borough may be a compact one and almost every tenant may have occasion to go into, or at any rate very close to, the town hall, and it is not asking too much for them to inspect the lists there. It may be possible to provide lists at branches of the town hall. But these are all questions I shall be very happy to look into in the light of what noble Lords have said.
LORD SHEPHERD: In his reply to the debate, the noble Lord made a very strong point in that the local authorities felt very strongly in this matter. This was the basic point, I think, in his defence. Does he not find it extraordinary that when he is asked "What was the reason the local authorities came to this conclusion?" he is unable to give it to the Committee? We could save a great deal of time if we could understand why

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the authorities have put this view to the Government and could assess why the Government accept their particular view.
10.16 p.m.
LORD BERNSTEIN: I do not care what the local authorities say or do not say, because I realise that during the course of the Committee discussions noble Lords opposite have ignored their advice on a great number of more important issues. The point is that people occupy council houses or flats, which accommodation anybody in this Chamber might occupy, and they suddenly find that their rent is going up. They would obviously wish to be advised in writing that the rent was going up. Why should we have a kind of apartheid on the question of rent because these people are paying £2 (or whatever it is) average rent per week? I think it is disgraceful that people's rents are to be put up without their being given written notice of the fact.
VISCOUNT HANWORTH: The Minister has said, I think, that in each case the tenant would have to be informed by letter. The first point is that it does not seem to me (I may be wrong) that the wording of the Bill is such that notification must be by letter. Surely, it might be by the unsatisfactory means of an advertisement in the local paper. That is the first point I should like an answer upon. The second is that if the Minister is correct in saying that they must write to the tenant, the only advantage that can accrue to the local authority by not sending direct information of the assessment is that it may save a certain amount of clerical labour, at the expense, as another noble Lord quite apart from myself has pointed out, of tenants having to go to the council offices themselves to find out. I think that unless we have a more satisfactory reason why the councils oppose this step, all noble Lords ought to support the Amendment to ensure that this kind of practice is not going to continue.
LORD GISBOROUGH: I support this Amendment. I feel that not everybody visits his council offices now. When we get the new establishments with 100,000 people or more in a housing authority, it is even less likely that people will often be in their council offices.
LORD OAKSHOTT: May I ask one question? Would I be wrong in thinking that my noble friend would undertake to look at all these matters raised by the noble Lord, Lord Avebury?
LORD AVEBURY: Before the noble Lord opposite answers, may I point out that it does not say in Clause 53 that each individual tenant will be notified in writing when the provisional assessments have been made. What it says is that an authority
"shall take such steps as they may consider reasonable to notify each individual tenant".
As I pointed out, some authorities might consider it reasonable for the rent collectors to give this information verbally to the tenant. That is point number one. The second point which emerges from this discussion is that if the local authorities do have to send out a circular—accepting the noble Lord's argument that somewhere or other, which I have not spotted, they are obliged to do this—the only additional work which is being created for them by asking them to give the tenants individually the fair rent of the dwelling in which they are living is to put in one figure by typing it at the bottom of the circular. The circular could have printed in it a sentence which says: "The provisional assessment of fair rent on your dwelling is …"—followed by a blank, and then the clerk in the housing department office would simply fill in £2·75 or £3·50, as the case may be. I really cannot see why any local authority should object to what seems to me to be a fairly simple operation. Even if there are tens of thousands of dwellings in a particular local authority, so that many of these forms must have this figure individually added in, this is absolutely nothing compared with the vast staff which the noble Baroness told us in connection with the previous Amendment that local authorities would need to engage—750 here; 850 more officers in the rent officer sections. It is not by any means as huge a task as they will have to undertake, so I cannot see why the local authorities should take this view at all.
On the second Amendment that I took with this one I cannot see anything about notification at all, whether by circular or individually in writing. Under Clause

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53(7) if the authorities re-assess the rent of a dwelling they only have to amend the copy of the assessment deposited in their principal office, and they have to take whatever steps they may consider reasonable to amend copies deposited at any of the other offices. So that they could amend the provisional assessment in accordance with the provisions of subsection (5) without the tenant knowing anything about it at all. So, if anything, my second Amendment is more important than the first. The two should be considered together because they both involve the despatch of notices. I think we are making rather heavy weather of this, and for once we ought to tell the local authority associations that we disagree with them.
Loan GARNSWORTHY: May I just say that we are not really dealing with the publication and alteration of provisional assessments. I would put it to the noble Lord, Lord Sandford, that unless we can be satisfied that each individual tenant is notified how can we be sure that he is going to enjoy the opportunities to which the noble Lord himself drew attention earlier this evening—the opportunity to do something about it and to make known his dissatisfaction?
I think there is little doubt that there is strong feeling in the Committee on this matter, and it is coming from all sides. Attention has been drawn to the fact that we shall shortly be considering local government re-organisation. It will not just be people living in rural districts who will find that they have a long journey to go to their district council offices; most of us will have a long journey to go to our council offices before we are much older. The difficulty will be countrywide, and the noble Lord who spoke from the Back Benches on the other side of the Committee was absolutely right to draw attention to this. The Committee should be quite definite that every tenant is not going to be told that his rent is going up when it has been decided, but indeed that he will be notified when an assessment has been made.
VISCOUNT HANWORTH: There is one further point I should like to make. When people receive notification that there is a change in their rent assessment,
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how many of them will simply sit back and say: "Oh, yes, the next time I go in by 'bus I can conveniently call at the council office"? So while to some it is not very inconvenient, most people are desperately interested in their rent. What will they have to do? They will have to rush in the next day at great inconvenience to themselves, and one cannot contrast that inconvenience against any administrative difficulty that the councils may have.
10.25 p.m.
LORD SANDFORD: I agree with Lord Avebury that we are making very heavy weather of this. I draw his attention, in connection with the point he made, to Clause 53(6) which in that respect lays an inescapable statutory duty on the authority in those circumstances to notify the individual tenant direct about a change. To listen to the debate one might have thought that I had asserted that local authorities did not intend to notify their tenants of the assessment of their rents. In fact, I have done the opposite. I have confirmed that it is their intention, and we are concerned here simply with whether we secure this by putting it into the Bill and making it a statutory requirement; by including it in a circular; or by relying on the local authority associations to recommend it to their members. I have indicated that I am more than willing to reconsider this whole matter in the light of the comments of noble Lords. As many noble Lords opposite have said, the amount of extra cost and effort involved in doing this is very small compared with the sums we are considering in the Bill as a whole. It is not a major matter. I will certainly consider it and if, in the light of this debate, it is thought right to make this a statutory requirement on local authorities and not to rely on their intentions and word, we can do it.
LORD SHEPHERD: I am grateful to the noble Lord for those remarks and perhaps on Report he will give the reasons why such a strong line has been taken on this matter. He referred the noble Lord, Lord Avebury, to Clause 53(6) in which, he said, there was an inescapable requirement on authorities. In fact, that provision simply:
"If an authority re-assess the rent of a dwelling under subsection (5) above, they shall

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take such steps as they may consider reasonable to notify the tenant of the dwelling of the amount of the rent as re-assessed."
The operative words are: "… such steps as they may consider reasonable …". I would not have thought that such words would be sufficient for the noble Lord, Lord Avebury. They do not seem to place an inescapable duty on authorities to inform individual tenants in this matter. Too much is left open, and perhaps when considering this issue the noble Lord will see whether subsection (6) can be tightened up so as to place a more specific duty on authorities.
LORD SANDFORD: Certainly, but I do not see how that could be done without writing to each tenant saying what the amount should be. However, I will look into the matter.
LORD AVEBURY: In view of the fact that the noble Lord, Lord Sandford, has been so forthcoming, I feel that it might be convenient to bring this debate to an end. I urge the noble Lord to draw the attention of the local authority associations to what has been said in all parts of your Lordships' House and to make it clear that strong feelings exist that this should be written into the Bill and not be left as a vague undertaking given behind closed doors by the local authority associations to the Minister. It should be written into the Bill so that everyone, including the tenants who will be affected, may be clear about it. As the noble Lord has undertaken to discuss this matter with the local authorities and as we can, if we wish, return to the subject on Report, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.29 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110L:
Page 55, line 18, at end insert—
("(iii) of the rent proposed for his dwelling with a statement explaining that the changes in rent structure are mandatory on the local authority following legislation by the Government.")
The noble Lord said: I move this Amendment so that the noble Lord, Lord Sandford, can, if he will be good enough, take these considerations into account when he is giving thought to any Amendments he may like to see incorporated
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on Report. This Amendment begins by making it clear that one of the duties to be performed is the notification of each individual tenant of the rent proposed for his dwelling. This is really repeating what has already been said and what the noble Lord, Lord Avebury, proposed in his Amendments. Then the Amendment goes on to ask for,
"a statement explaining that the changes in rent structure are mandatory on the local authority following legislation by the Government."
The reason I think that some kind of explanation ought to be given to the tenant is that rents have always been fixed by the local authority, and the tenants will naturally assume that their councillors are responsible for whatever new assessment has been made. Unless they are told to the contrary, and told very clearly, they will assume that; and they will immediately go rushing round to their councillors or go complaining to the council itself or raising hell with the housing officers or town clerk, whatever it may be, quite unnecessarily and quite improperly—because, of course, the local authority will have had no alternative but to carry out the duty put upon them under the Bill. Therefore I think the tenants ought to be told that there has been this complete change, and that it is not the council who are responsible but the Government, who have introduced the legislation with which the local authority are compelled to comply.
The second reason is that this Bill is a very bad Bill—as I think it is—and the proposed increase in rents is far too great and coming far too quickly, and that as a result trouble will be coming. If I am right and it is a bad Bill, then there is great need for the cohesion of the local community to be borne in mind, and people should know that it is not the local authority who are inflicting these increases in rents upon them. Alternatively, it may be a very good Bill, as the Government think it is (and I should be the last one to wish the Government to be denied the credit to which they are entitled), in which case they ought to notify the tenants that it is their Bill and this additional explanatory paragraph ought to go on the notification that is already taking place. There is no question of additional work.
On looking at the words, I think they are perhaps not sufficiently precise. The words "following legislation by the Government" is not the accurate position. They ought perhaps to be "following legislation promoted by the Government and passed by Parliament". But the words could be whatever the Government like, so long as the principle is included. I hope that the noble Lord will be able to say that he will take account of these matters and give them consideration when he considers the other Amendments that we have just discussed.
BARONESS YOUNG: As the noble Lord, Lord Diamond, has said, I think the first part of this Amendment has been adequately dealt with by my noble friend Lord Sandford, in the undertaking that he has just given. The second part of his Amendment is not something the Government feel able to accept. Anyone who has had experience in local government knows perfectly well that local councillors are perfectly capable of making their views felt, even if this Amendment does represent their views; they can do it in a whole variety of ways; through the Press, through local radio, through public meetings, through tenants' meetings, or even by going and visiting tenants. Really it would be quite unnecessary to tell local authorities how to put forward a point of view, if indeed it did express the point of view of all local authorities.
I would conclude by saying that the Government do consider that the fair rent principle is a good principle and are quite prepared to stand by it.
LORD DIAMOND: The major part of the Amendment, of course, is the point which the Government has already undertaken to consider, and as to the rest, certainly councillors can make their views known. It would have saved a little trouble, irritation and misunderstanding by tenants if this further information had been given, but if the Government do not want to do it then I do not want to press them particularly, and I seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 53 agreed to.
Clause 54 agreed to.
Clause 55 [Functions of rent scrutiny board]:
10.35 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 110N:
Page 57, line 2, leave out (" consider ") and insert (" adjudicate upon ")
The noble Lord said: We are now dealing with the functions of the rent scrutiny boards, and the clause provides in its first line:
"It shall be the duty of the rent scrutiny board to consider any provisional assessment submitted to them."
The difficulty about the rent scrutiny boards is the difficulty I have already alluded to, that they are an extremely authoritarian body, an extremely powerful body. They are going to fix the rents of some five million tenants, I gather—although 5½ million was the figure used throughout in the other place without correction, but I am grateful to the noble Baroness for letting us know that the right figure is about five million tenancies. The difficulty is that no tenants are going to be allowed to make any representations to the rent scrutiny board, or to be heard through their representatives, or to know the manner in which the rent scrutiny board function or reach their conclusions; and of course there is going to be no appeal and the decision of the rent scrutiny board will be final. This is all an extraordinary situation. But at all events it would give some appearance of the quasi judicial character of the procedure of the rent scrutiny board if, instead of the duty being laid upon them to consider any provisional assessment, we had a duty to adjudicate upon any provisional assessment. That is why the word "consider" is left out, so that the sentence would read:
"It shall be the duty of the rent scrutiny board to adjudicate upon any provisional assessment submitted to them".
The views of the Government on this are not absolutely clear. I thought the Government was at one stage content about it, because I read at column 2064 of the proceedings of Standing Committee E on

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February 15 the views of the Under-Secretary of State for the Environment, Mr. Channon:
"I have sought to illustrate my point that the process of consideration which the rent scrutiny boards will undertake will be such as to ensure that they make a proper judgment of the rents and assessments …"
"A proper judgment of the rents and assessments"—that is adjudication; and so I should have thought, therefore, that to have the word "adjudicate" would be helpful, for the reasons I have indicated, and would be in line with what the Government were thinking.
However, to be fair to the Government, if one reads on in the same column in the proceedings of that Standing Committee E, one finds the Minister going on to say:
"I believe that the rent scrutiny boards will be able to make a proper consideration of the rents".
So I am not so clear as I thought I was at the beginning about what the view of the Government is. I shall be very happy, if the Government want it both ways, to put in both words, so that the sentence would read:
"It shall be the duty of the rent scrutiny board to consider and adjudicate upon …"
because of course nobody can adjudicate upon without considering. Perhaps that would be the most suitable way of amending this subsection. I should be grateful to know the Government's view, and I beg to move.
LORD SANDFORD: I must take this opportunity to confirm what I believe I indicated before—namely, that we see this rent scrutiny board as being a body, not which adjudicates in the sense of deciding the claims of one person against another person, such as landlord versus tenant, but which considers the rents proposed as provisional assessments by the local authorities after the processes described in the Bill—that is, a consideration as to values and fair rent. One can use the word "judgment" in two ways. One can use it in relation to a numerical assessment; one can use it in relation to judgment as between two rival claims. I must make it clear that our view is that the rent scrutiny board, will be exercising its judgment in the first way—namely, a judgment as to a particular value to be set on the fair rent of a building or group of buildings as proposed by the local
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authority. It is because we are quite clear that this is the rôle of the rent scrutiny board and that that is the kind of judgment they will exercise, rather than an adjudication between two rival claims or two parties, that I cannot advise the Committee to accept this Amendment.
In view of our previous debate I hope the noble Lord, Lord Diamond, will not feel it necessary to press the Amendment. If he were to succeed in persuading us to his view, then of course all the other Amendments consequential upon it would certainly flow, because if the board was going to act in a judicial way it would be necessary for it to receive representations from the parties and for provision to be made for it to call expert witnesses, and so on. It is because we see the rent scruntiny board's function as being an exercise of its judgment upon the value of the fair rents proposed by the local authorities that I cannot recommend the Committee to accept this Amendment, if the noble Lord presses it. But, in view of our previous debate on this cardinal point, I hope very much that he will not feel it necessary to do so.
10.43 p.m.
LORD DIAMOND: I do not think I can regard that as a wholly satisfactory answer. I quite agree that it would be a lot easier for all of us if the Government were to change their mind about the function of this board and endow it with some of the qualities which would make its decisions acceptable to tenants. That is the point I am getting at I am not getting at the figure; that is a separate issue, and is something we have passed. The Government know our views on that, and we know the Government's views; we shall never reach agreement on that unless the Government change their mind. We shall not change our view. But our point here is on making acceptable what we think is the Government's excessive figure. It is the Government's profitable rent figure—profitable in the sense of making a profit over and above the costs involved—a figure which we dislike intensely.
That figure will never be acceptable if, in addition to its being a vast increase, it is decided in such a way that nobody knows how the decision has been reached and people feel they have not had an

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opportunity of making their representations felt. It will be necessary to go into considerable detail about the ways in which this proposed function lacks any possibility of making the board's decisions acceptable to the tenant community as a whole. In the meantime, I should have thought that the Government could have dressed up this clause a little by saying "consider and adjudicate". Certainly on some of the figures coming before it the board will know that the local authority think one thing and the tenant thinks another, because the tenant will have made his representations to the local authority. Unfortunately, the tenant cannot make his representations to the rent scrutiny board.
As I have said, "adjudicate" is a word which gives a feeling that people have looked in an objective and judicial way, at the question they have had to decide, and I should have thought that that would be very helpful to the Government. If the Government are not prepared to consider it, then I can only say that it is most regrettable. I do not want to divide the Committee at this late hour but I suggest that there is a good deal in what I am saying that is helpful to the Government, and that they would be not unwise to offer to consider what I have said.
LORD SANDFORD: Perhaps before we conclude this matter I can make sure that the noble Lord is not under the impression that the local authority will submit to the rent scrutiny board anything except their provisional assessment. They will take into account the representations of the tenants, and if they are swayed by them, they will alter those provisional assessments. What the rent scrutiny board receives from the local authority is one set of assessments, and it is on those that the rent scrutiny board has to make its consideration.
LORD DIAMOND: I am grateful to the noble Lord. That makes quite clear a point on which I was not absolutely sure. Not only can the tenant not make representations directly to the board, but the tenant cannot make representations indirectly to the board. Any representations which the tenant makes to the local authority stop there and are lost, and the board will have no idea of what the
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tenant feels. That is an additional matter which we shall take into account when we consider the rest of this objectionable procedure as we go through this clause. I hoped that the noble Lord would say that he would consider what we have said. But in the meantime, to save the time of the Committee, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
House resumed.

SEAHAM HARBOUR DOCK BILL
Reported without amendment.