Compensation

HL Deb 24 July 1974 vol 353 cc1725-86

107G.—(1) It is hereby declared that where, under section 107A above, or Schedule 8 to this Act, a compulsory purchase order is to be treated as made under Part V of The Housing Act 1957 or Part VI of the Town and Country Planning Act 1971 compensation for the compulsory acquisition of the land comprised in the compulsory purchase order is to be assessed in accordance with the provisions applying to a compulsory acquisition under the said Part V (or, as the case may be, the said Part VI).

(2) Where under section 107B above, or Schedule 8 to this Act, land or any interest in land within a clearance area is to be treated as appropriated by a local authority to the purposes of the said Part V, compensation for its compulsory acquisition shall (where it increases the amount) be assessed or reassessed in accordance with the provisions applying to a compulsory acquisition under the said Part V.

(3) Where under section 107C above or Schedule 8 to this Act, any interest in land acquired by a local authority by agreement (after the declaration of the clearance area) is to be treated as appropriated for the purposes of the said Part V—

1. (a) compensation shall (where subsection (2) above would have increased the amount) be assessed and paid as if the acquisition were a compulsory acquisition, under the said Part III, to which subsection (2) applied, but
2. (b) there shall be deducted from the amount of compensation so payable any amount previously paid in respect of the acquisition of that interest by the authority.

(4) Where subsection (2) or subsection (3) above applies, the local authority shall serve on the person entitled to the compensation a notice in the prescribed form giving particulars of the amount of compensation payable in accordance with the provisions applying to a compulsory acquisition under the said Part V, and if the person served does not within twenty-one days from service of the notice accept the particulars, or if he disputes the amount stated, the question of disputed compensation shall be referred to the Lands Tribunal.

(5) The notice shall be served not later than six months after (as the case may be)—

1. (a) the relevant date as defined in section 107B above, or
2. (b) confirmation of the rehabilitation order,

and section 30 of the Compulsory Purchase Act 1965 (service of notices) shall apply to the notice.

(6) Subsection (2) above shall be left out of account in considering whether under section 22 of the Compulsory Purchase Act 1965 compensation has been properly paid for the land; and accordingly subsection (2) above shall not prevent an acquiring authority from remaining in undisputed possession of the land.

(7) Where subsection (2) above makes an increase in compensation to be assessed in accordance with Schedule 2 to the Compulsory Purchase Act 1965 (absent and untraced owners)

1. (a) a deed poll executed under paragraph 2(2) of that Schedule before the latest date for service of a notice under subsection (4) above shall not be invalid because the increase in compensation had not been paid. and
2. (b) it shall be the duty of the local authority not later than six months after the said date to proceed under the said Schedule 2 and pay the proper additional amount into court.

(8) In Scotland where subsection (2) makes an increase in compensation to be assessed in accordance with sections 56 to 60 and 63 of the Lands Clauses (Consolidation) (Scotland) Act 1845 (provisions dealing with absent and untraced owners)—

1. (a) a notarial instrument executed under section 76 of that Act before the latest date for service of a notice under subsection (4) above shall not be invalid because the increase in compensation had not been paid and
2. (b) it shall be the duty of the local authority not later than six months after the said date to proceed under the said sections and pay the proper additional amount into the Bank.

(9)Any sum payable by virtue of this section shall carry interest at the rate prescribed under section 32 of the Land Compensation. Act 1961 from the time of entry by the local authority on the land, or from vesting of the land or interest, which ever is the earlier, until payment.

(10) In this section references to an increase in compensation shall be read as if payments under—

1. (a) sections 60 and 61 of and Schedule 2 to the Act of 1957 (payments in respect of well-maintained houses and payments to owner-occupiers);
2. (b) section 63(1) of the Act of 1957 or section 30 of the Land Compensation Act 1961 (allowances to persons displaced);
3. (c) section 68 of and Schedule 5 to the Housing Act 1969 (payments to owner-occupiers and others in respect of unfit houses purchased or demolished); and
4. (d) section 37 of the Land Compensation Act 1973 (disturbance payments for persons without compensationable interests),

and any extra-statutory payments made by way of additional compensation were, to the extent that they were made to the person holding the interest in question, compensation in respect of the compulsory purchase.

(11) In this section "prescribed" means prescribed by order made by the Secretary of State for the purposes of this section; and any order under this subsection shall be contained in a statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").—(Lord Hughes.)

THE DEPUTY SPEAKER

My Lords, there is a misprint in the Marshalled List. On page 35, the reference in subsection (7)(a) to "subsection (4) above" should be to "subsection (5) above".

On Question, Amendment agreed to.

LORD HUGHES

My Lords, I beg to move Amendment No. 46.

Amendment moved—

Insert the following new clause—

Amendment of section 4 of the Compulsory Purchase Act 1965

107. In section 4 of the Compulsory Purchase Act 1965 (time limits for exercising powers under compulsory purchase orders) there shall be added at the end, the following paragraph: For the purposes of this section no account shall be taken of any period during which an authority are, by virtue of section 107B, 107E or 107F of the Housing Act 1974 (which relate among other things to unfit buildings in clearance or conservation areas), prevented from serving notice to treat under section 5 of this Act, and the same amendment shall be made to section 116 of the Lands Clauses Consolidation (Scotland) Act 1845 with the substitution for the reference to section 5 of the Compulsory Purchase Act 1965 of a reference to section 17 of the said Act of 1845."—(Lord Hughes.)

On Question, Amendment agreed to.

Clause 109 [Raising of rateable value limits for enfranchisement or extension under Leasehold Reform Act 1967]:

5.7 p.m.

LORD HUGHES moved Amendment No. 47:

Page 94, line 19, leave out from ("day)") to end of line 30 and insert ("after the words" rent and" there shall be inserted the words "subject to subsections (5) and (6) below" and after subsection (4) there shall be added the following subsections:

"(5) If, in relation to any house and premises, the appropriate day for the purposes of subsection (1)(a) above falls on or after 1st April 1973 that subsection shall have effect in relation to the house and premises,—

1. (a) in a case where the tenancy was created on or before 18th February 1966, as if for the sums of £200 and £400 specified in that subsection there were substituted respectively the sums of £750 and £1,500; and
2. (b) in a case where the tenancy was created after 18th February 1966, as if for those sums of £200 and £400 there were substituted respectively the sums of £500 and £1,000.

(6) If, in relation to any house and premises,—

1. (a) the appropriate day for the purposes of subsection (1)(a) above falls before 1st April 1973, and
2. (b) the rateable value of the house and premises on the appropriate day was more than £200 or, if it was then in Greater London, £400, and
3. (c) the tenancy was created on or before 18th February 1966,

subsection (1)(a) above shall have effect in relation to the house and premises as if for the reference to the appropriate day there were substituted a reference to 1st April 1973 and as if for the sums of £200 and £400 specified in that subsection there were substituted respectively the sums of £750 and £1,500".

(1A) In any case where, by virtue only of the amendments of section 1 of the Leasehold Reform Act 1967 effected by subsection (1) above, the right specified in subsection (I) of that section is conferred on a tenant, section 19 of that Act (retention of management powers for general benefit of neighbourhood) shall have effect in relation to the house and premises to which the tenant's right applies as if for the references in subsection (1) of that section to an application made within two years beginning with the commencement of Part I of that Act there were substituted a reference to an application made within two years beginning with the date on which this Act is passed.")

The noble Lord said: My Lords, the purpose of the Amendment is to make a number of technical Amendments to sort out the position which arose from the Amendments made in Committee in another place. This is one way in which the matter can be dealt with, but the noble Earl, Lord Kinnoull, has proposed in Amendment No. 48 another way of dealing with the matter. In that Amendment he proposes to restore the Bill to what was originally proposed, and in it his name is associated with that of the noble Baroness, Lady Young.

I think it might be for the convenience of the House if we discussed both these Amendments together. We could then find what is the feeling of the House as to whether the Bill should be amended one way or the other. It may be that the noble Lord, Lord Maybray-King, would want Amendments Nos. 49 and 50 discussed at the same time, though they are not an alternative to Amendment No. 47. Amendment No. 48 would be an alternative to Amendment No. 47, but the other two are not. That is all I propose to say at this stage, because I certainly wish to learn what is the feeling of the House after the noble Lord, Lord Maybray-King, and the noble Earl, Lord Kinnoull, have spoken to Amendment No. 48. I beg to move.

BARONESS YOUNG

My Lords, I should like to raise a point of procedure. My Amendment No. 49 would, in my opinion, apply even if the Amendment of my noble friend Lord Kinnoull were carried. I should therefore like to move it separately and I reserve my right to speak later.

LORD MAYBRAY-KING

My Lords, in response to the gracious invitation of the noble Lord, Lord Hughes, I want to speak about Amendment No. 48, which stands in my name and in that of the noble Earl, Lord Kinnoull. In this debate we are discussing the dividing line between poor people and rich people, in the advantage that we give to poorer people when they are wiping out a lease. The story is a simple one. We have drafted our Amendment because we feel that the Amendment which was carried in the House of Commons went further than was in the minds of those who carried it, and if our Amendment is carried we shall be back at the position which we were in before the clause was amended. We shall also be in accordance with the 1967 Act of the previous Government.

In no way can this be said to be anything like a Party point; if it were I would not be making it. As the clause before it was amended appeared before the Committee it was regarded as a mere technical modernisation of what was carried in the 1967 Act. So little was it heeded that there was no Explanatory Memorandum about it. As the Act of 1967 stands, the holder of a long lease is entitled to acquire the reversion compulsorily on advantageous terms if the rateable value of the house and premises on what is called "the appropriate day" did not exceed £400 in London or £200 elsewhere. The appropriate day under the 1967 Act is March 23, 1965.

The rateable values of 1965 are obviously out of date, but that does not affect the principle. Assuming that a dividing line is needed between the poorer who qualify for this capital bonus and the rich who do not, the 1965 rateable value is as good as any other so long as the premises remain the same. Any revaluation should in principle, leave the same premises on the same side of the line as between richer people and poorer people. However, the appropriate day is not always March 23, 1965. Under Section 1(4) of the Act of 1967, which attracts Section 43(3) of the Rent Act 1965, the appropriate day for premises which were not valued in the valuation list in force on March 23, 1965, is the first day thereafter on which they are valued in the valuation list. These are rare cases, but since the revaluation which came into force on April 1, 1973, they produce a wrong result. The appropriate day falls within a period when rateable values are on average 250 per cent. above those current in 1965 but the limits of value are still over 1965.

The original clause tried to put that right—and did put it right as I think is agreed by everybody on the Commons Committee—by substituting £1,000 for £400 and £500 for £200 in those circumstances. But the clause we now have before us goes much further. It substitutes April 1, 1973, for March 23, 1965, as the normal appropriate day on which rateable values shall be ascertained, raising the limits of rateable value, as I said, to £1,000 and £500 in the two cases. This raises no great issue of principle on the assumption that the new limits are broadly comparable with £400 and £200 in terms of 1965 rateable values, but it does mean that all existing leases near the original limit will have to be reexamined, and it may be found in many individual cases that an existing right to enfranchise a lease is lost or a new right is created.

Secondly—and this is the point which I regard as much more important—a distinction is drawn between leases granted before and after March 23, 1965. For those granted on or before that date the limits of rateable value are increased by 50 per cent. up to £1.500 in London and £750 elsewhere in terms of the 1973 valuation list. The effect of this is to extend the benefit of the Act retrospectively to those relatively few leaseholders of properties in the most expensive areas of the country, and particularly expensive areas in other parts of the country, which were originally excluded. I speak as one who loves Dulwich, and is very proud that Alleyn, Shakespeare's fellow actor, founded the great Dulwich Charity which serves the needs of education and other charitable institutions in Dulwich and elsewhere in London. The estate comprises some 1,500 acres in a desirable residential district. Out of nearly 3,000 houses held from the estate on long lease, all except 20 are liable to expropriation under the Act of 1967 as originally enacted. This will change. The effect of Clause 109 as it stands would be to enable the richest people in the district to get richer still, and they would get richer at the expense of the charities which are supported by the estates. This would affect tenants too.

The leases now to receive the benefit of the new Act will have been changing hands, like other leases, at prices related to the rights which the seller and the lessee thought existed but which would be changed by this Act. A man who has just sold a lease of a properly above the limit of rateable value will not be pleased to learn that under the new Act the buyer is going to receive a retrospective bonus at the expense of the landlord. The noble Earl, Lord Kinnoull, and myself, think that the simple Amendment we have proposed prevents retrospective bonanzas for rich persons and I hope the House will support it.

LORD JANNER

My Lords, it is not very often, if ever, that I have disagreed with my noble friend. I still call him my noble friend in spite of the fact that he is sitting on the Cross-Benches. On this occasion I categorically oppose what he says because it strikes at the very root of what we in our Party, and I think reasonable people throughout the whole of our political thinking, have considered to be the important feature about leasehold reform. Why has it been fought for for so many years? Why did he and I and many others strive year after year in order to get leaseholds enfranchised? I remember 40 or 50 years ago when we were crying out loudly that a person who held a long lease and considered it to be his home was perfectly entitled morally to claim that he should have the right to retain those premises and to use them, if he wanted, as his home in future. That, after all, was the basis on which leasehold reform came into existence.

My noble friend says that the rich will get richer—he did not say that the poor will get poorer; he said the rich will get richer. Who is rich? Is a person whose rateable value to-day is £1,500 really a rich person? Who are the people we are seeking to benefit by this Amendment, which after all is a tidying Amendment? They are not the richest people at all. They are middle-class people, many of whom were excluded from the benefit of the Leasehold Reform Act because they had improved their premises and made them of a rateable value higher than the next door person who had not carried out any improvements. It is sheer nonsense.

We can see in the streets men and women who are not able to buy their freeholds (I do not know whether my noble friend will remember Henry George's theory which so many of us were so keen about), who have put their houses into a better condition or who have built a garage or something of that sort, with the consequence that their rateable value has gone up beyond that of their next-door neighbour. This is a fact. These arc not myths; this is true. The result is that they are not able to buy their freeholds, whereas the next-door neighbour is. Is that not sheer nonsense? Is it not something that must be remedied?

Many of us think that people who have long leases, no matter what the rateable value may be, should be entitled to acquire the freehold. The Bill as it stands, and with the Amendment that is proposed, would not carry it so far as that, but it certainly carries it into the range of those who cannot be put into the category of the rich and brings it within the range of the so-called middle-class individuals whose rates have gone up by leaps and bounds and who, under the old rateable values, were very badly done by. Some of us have striven for a long time to try to get that evil removed. Now that it has been successful and the Government themselves have been reasonably moved by the Amendment which was proposed in the House of Commons and which they have now accepted—as I say, changed in form but not in principle—I see no reason why anyone should feel that there is a disadvantage to any person or persons.

Let me put this in simple terms. What my noble friend was saying was that this lends itself to speculation. That is what he had in his mind. But whichever way it goes it is speculation. If the landlord makes a pile of money because he is able to sell at a higher figure a property to which he has added nothing at all in the course of very many years, because something has been added to it by somebody else, you cannot call that a matter of speculation. But if a tenant improved the property, that is his home. If he cannot keep his home, if he is not secure, then he has to buy another home and buy it at the higher level. Consequently he gets no benefit at all, because whatever price may be obtained for the house that he is in, if at any time he has to lease it he has to pay an even higher price for alternative accommodation.

This is a question of a home. Are we entitled to deprive an individual who for many years has been paying rent, who has looked after the house—and it is a house, not a flat—and whose family has been brought up in it, of the continuance of having the home? Even if he does sell and obtains a profit, he would naturally have to utilise that profit to buy a similar home.

THE EARL OF KINNOULL

My Lords. surely the noble Lord can explain to the House that at the end of a long lease the leaseholder would have the right to remain in that house under rent provision?

LORD JANNER

My Lords, that is precisely what those who are moving this Amendment have not realised. They have failed to appreciate the fact that they are entitled to retain their home but that they can be charged much higher rentals than they were paying before. If it is correct that security should be maintained at a higher level of rateable values for people who rent, surely that is a principle which ought to be adopted in a similar way in respect of leasehold reform and the obtaining of the freeholds. That is the basis of this Government Amendment—that it would put this matter on an equal level with regard to rateable values in respect of security and rent.

One could speak for a very long time and I do not want to burden the House with a very long speech, but some of us feel very strongly about this matter. I remember in my early days in another place, at a time when Lloyd George was stampeding through the country on the leasehold reform business, I noticed with anguish how difficult it was and how long it took to get leasehold enfranchisement brought about. In my opinion, we have no right on a moral basis, and if we respect family life, to make it impossible for a person to purchase the freehold of a property so that he and his family, or her family, whichever it may be, can continue to have a peaceful existence. I appeal to the noble Lords who are moving this Amendment to look at this matter in that light. It is not just a question of money. It is not just a question of how much a person is going to benefit; it is a question of whether family life is to be allowed to continue under proper conditions.

Of course I appreciate what my noble friend has said. I realise that some charities will suffer because they would not have to buy additional houses for themselves to live in. That is the whole point. In the main it is not a question of charities here but a question of speculative landlords whoever and wherever they may be. May I say to my noble friend that the position in Dulwich to-day is a very sad one. I respectfully suggest to him that for ground rent's to-day, in respect of places where tenants have applied for 50-year leases instead of having the freehold, enormous sums, outrageous sums are being asked. There is a lone contest going on about that. All these circumstances have to be taken into consideration. I am very happy that the Government themselves realised this by accepting the Amendment put down in the other place and by now asking us to accept it, and I hope that those who are moving this Amendment will realise that that action is not one which is helpful to the community as a whole but, on the contrary, is very disruptive.

5.30 p.m.

LORD STOW HILL

My Lords, I hesitate to take your Lordships' time in adding to what has already been said, principally because I agree entirely with what my noble friend Lord Janner has said. He and I in another place were involved in the genesis of the 1967 Act. My understanding of its purpose is precisely as he has stated. I sat, I think, for four constituencies, one of them was one in which the problem of leasehold reform was particularly prominent. Over and over again, I met people living in premises subject to the old building leases, some granted in 1860, 1870 and so on, who thought the houses were in every sense their own. It was a kind of legal outrage and artificiality which enabled somebody else to say, "This is not your home; the bricks and mortar belong to me; the land on which you walk and the roof under which you sleep is something which is not your home at all. It is a species of property which, in the ultimate resort, is vested in me. "That is the genesis of this Act and the strong justification for it. I was glad to see it go on the Statute Book and we all owe a great debt to the late Richard Crossman for his sterling work in piloting it through the other place before it came to your Lordships' House.

Having said that, I want to ask my noble friend Lord Hughes one or two questions. If is relevant, when we are considering what are the appropriate rateable limits which should be applicable for the purpose of Section 1 of the 1967 Act, to remember that the value of the pound has depreciated by something like half in the past ten years. So an alteration in the rateable limits would seem for that reason, if for no other, not altogether inappropriate. I do not follow why in the original Clause 109 of the Bill that we are now discussing a distinction is made between tenancies which were brought into being before March 23, 1965, and those brought into being after that date. I do not discern any logical reason for that. I should like to ask my noble friend, if he has it in his brief, to give some indication to me as to why that distinction is drawn. Why is it that in the case of tenancies granted after March 23, 1965, the increase in the rateable limits which are to be appropriate under Clause 109 of the Bill are less than the increase in the rateable limits which are to be appropriate in the case of long tenancies on low rents granted before that date? I do not understand the logic of that.

So far as I can see, comparing Amendment No. 47 with the original Clause 109, in substance all the Amendment does is say that the appropriate date within the meaning of Subsection (4) of Section 1 of the 1967 Act is always to be treated as if it was April, 1973, whatever its actual date was. I do not want to go in detail through the Amendment; that seems to be the effect of it. The only other effect of any substance that seems to be appropriate is that it alters the date of March 23, 1965, which is the dividing line between the tenancy granted before and the tenancy granted after, to February, 1966. To the extent that it brings that date forward that is a desirable change. I should be grateful if my noble friend could give some indication as to what is the Government's probably sound thinking, which induces my noble friend to propose that that date should be altered from March, 1965, to February, 1966. I do not oppose that. On the contrary, I rather welcome it. This creates a puzzle in the minds of a number of persons affected. One speaks entirely on one's own responsibility in this House, but I am prompted to put that question by a puzzled citizen who approached me. I found it puzzling when I studied the matter. Probably a large number of those who are affected would like to know the Government's thinking on the matter.

5.35 p.m.

LORD MONSON

My Lords, I should like to support the Amendment proposed by my noble friend Lord Maybray-King and the noble Earl, Lord Kinnoull. I can do no better than quote the words of the noble Lord, Lord Hughes, when this clause was being debated in Committee: The Government's reasons for opposing the Amendment carried in another place were that a house outside the present rateable limits would be so valuable as to render enfranchisement attractive for reasons of financial gain rather than domestic security, particularly as persons able to afford the leases of such houses would be able to afford freeholds of smaller houses. I have been advised by a senior partner in a well known firm of estate agents that the profit to be expected by somebody exercising their rights of enfranchisement, if this clause goes through unamended, may be £8,000 nett of all outgoings. If they were to sell their houses immediately after enfranchising they would be subject to capital gains tax at 30 per cent. Few people would baulk at paying £2,400 in tax provided they could see an almost immediate profit of £5,600.

The noble Lord, Lord Janner, said it would be mainly middle class people who would benefit from the unamended clause. I am advised the houses in this category would tend to sell in the London area for £50,000 upwards. The noble Lords, Lord Janner and Lord Stow Hill, talked about the principles of not depriving people of their homes. Flats, whatever their rateable value, have never been eligible for leasehold enfranchisement. People in rented accommodation of all kinds—council houses or private rented accommodation—do not have the same security as when they own their houses freehold. No doubt the totally unexpected bonus that this clause, if unamended, would confer, would be highly welcome to a good number of people. But in exactly the same way if the Price Commission were to order Harrods and Fortnum and Masons to reduce the price of caviar and paté de foi gras by 50 per cent., this would also bring pleasure to many people. I suggest that very few who would benefit from this would be bus drivers or bank clerks. The people who would suffer would be the shareholders of the House of Fraser and so on. There are some well-off shareholders, but others are of very modest means, exactly like the beneficiaries of the Dulwich Trust cited by the noble Lord, Lord Maybray-King. I hope that your Lordships will support this Amendment.

5.40 p.m.

THE EARL OF KINNOULL

My Lords, may I support the very powerful moving of the Amendment by the noble Lord, Lord Maybray-King. Also may I declare straight away a professional interest in this subject. At this stage of the Bill, this clause seems to present to the House something of a dilemma. I believe that we have three choices. First, we have the choice of the Amendment of the noble Lord, Lord Maybray-King. Basically it would restore the clause as it was originally drafted by the Government before it went into the Committee of another place. Indeed, it would stir no further muddy leasehold waters. Secondly, we could support the Government's Amendment which seems, at some 24 hours' notice, simply to put into legal drafting the Amendment which was moved in another place. As the noble Lord, Lord Monson, has reminded us, the Amendment, which the Government earnestly declared on that occasion would create a monstrous imbalance within the 1967 Act, would lead to harmful speculation in the housing field, with wholly unjustifiable gains for certain leaseholders. Thirdly, it seems that we could support my noble friend Lady Young whose Amendment offers a two-tier form of compensation which I am advised has certain defects so far as the valuation profession is concerned.

I believe that the issue before the House is a simple one. It is whether or not the present rules of compensation under the Leasehold Enfranchisement Act 1967 were designed and geared for the higher-priced property which the new rateable value limits of £1,500 and £750 that the Government and, indeed, my noble friend are proposing would cater for. By those of us who took part in the deliberations on the 1967 Act, it will be remembered that the Bill introduced at that time was designed specifically to meet urgent social and security cases, particularly in South Wales. That was the initial purpose of the Bill. As many of your Lordships will remember, the Bill was hotly contentious. It gave for the first time compulsory rights to one individual against another individual's property. Secondly, it was contentious because it laid down a compensation formula which was highly complicated and which only the passage of time and successive Lands Tribunal cases has shown to be minimal and, indeed, in certain cases almost confiscatory.

My Lords, what would be the result if the House were to accept the Government's Amendment? What types of houses are involved and what would be the consequences for the leaseholder and the freeholder? I have tried to obtain examples to illustrate the case as I see it if the Government's Amendment is accepted. In Central London we are dealing with houses valued within the region of £80,000 to £120,000. In Paddington, Pimlico, Chelsea and St. John's Wood, this is the kind of value which can be reached in the case of a house with a rateable value limit of £1,500.

LORD HAWKE

My Lords, if I may interrupt my noble friend, at the moment the price of houses is extremely speculative. Is the noble Earl talking about the prices which houses fetched six months or a year ago, or is he talking about the value which houses would fetch if they were put to auction to-day?

THE EARL Of KINNOULL

My Lords, it is a valid point which my noble friend Lord Hawke has made. In fact, I am quoting to-day's prices and the evidence I have before me was given to me by two firms of leading estate agents in London. The effect in one case, if the present Amendment of the Government were accepted, would be this. There is a house in W.2. with a present rateable value of £1,100; its estimated present leasehold value is £8,000. The estimated enfranchisement compensation which the. leaseholder would be entitled to claim under the clause proposed by the Government would be £20,000, and the freehold value is estimated at £65,000. According to my rather weak mathematics, that would give a profit of some £37,000 to the leaseholder, simply by applying under this clause to be allowed to purchase the freehold.

LORD JANNER

My Lords, will the noble Earl explain what profit it would give to the landlord if what he is asking for were to prevail?

THE EARL OF KINNOULL

My Lords. I am surprised at the question of the noble Lord, Lord Janner, because I know he is a very eminent solicitor and that he knows how the values of properties work. The noble Lord knows that when a freeholder has a long lease which is shortly to come to an end it has considerable value in the current market. Therefore, I do not really see the purpose of the noble Lord's question.

The second property which I should like to mention to the House is a property in St. John's Wood. The rateable value of that property is £1,472, and in that case we are reaching almost the limit of the clause suggested by the Government. It is a block of flats, and I think I am correct in saying that if the owner of the leasehold who occupies one fat is able to get the other flats vacant, under the Leasehold Reform Act he has the right to apply to the freeholder to acquire the freehold. The enfranchisement compensation has been estimated at £30,000, and the full freehold value of the flats when empty is £120,000. Therefore, we see that in that case the iease-holder could play with £90.000; he would have £90,000 with which to negotiate with the other tenants to leave the flats. I am sure that the House will agree that this is a considerable sum. Having given these two examples, may I ask the noble Lord, Lord Hughes, whether this is equitable and whether it is what the Government really want?

In Outer London—I have taken areas like Finsbury, Tottenham and Haringey—I am advised that the intended £1,500 limit virtually would engulf 85 per cent. of all leasehold houses, and in the countryside the net of £750 would effectively carry all but the very large houses.

My Lords, in Committee in another place the Government argued against the principle of the Amendment. As I understand it, there were two arguments. The first was house speculation. I believe that the two cases which I have produced eminently show the kind of speculation which could go on. Secondly, they said that they were reviewing the whole of the working of the Leasehold Reform Act. I do not know whether the noble Lord, Lord Hughes, could amplify that further. but it seems very wrong in a hastily drawn clause in a Housing Bill, fundamentally to affect the Leasehold Reform Act.

May I also ask the noble Lord, Lord Hughes, whether it is really the intention of the Government to press their Amendment now? What is the evidence of hardship for leaseholders, particularly in the higher bracket? That is what we are talking about. We are not talking about rateable values of £1,000 and under £1,000. We are talking of rateable values of between £1,000 and £1,500. What is the evidence of hardship?

I should be very interested to know whether the advisers of the noble Lord, Lord Hughes, have any evidence of that, because the real evidence of hardship is not on the leaseholder but on the freeholder, and on individuals who at the moment have a market value for their properties. If the Amendment of the noble Lord, Lord Maybray-King, were not accepted by the House, that figure would disappear.

The second choice before the House, as I see it, is that in the Amendment suggested by my noble friend Lady Young. I have the greatest respect for my noble friend and for the way in which she has conducted a searching and critical appraisal of housing legislation which has gone through this House recently. It has been highly complicated and required a great deal of effort from her. She has led us on this side of the House extremely well with skill, tenacity and patience. But I hope she will not be offended when I say that on this occasion I feel that her Amendment, which sets out to lessen the iniquity of the Government's proposal on compensation, would not really succeed in practical compensation benefits which I believe she desires.

I say that on the basis—again, without being repetitive—of two further examples which were worked out for me only last night following a study of my noble friend's Amendment. In one case the property was in central London. It had a ground rent—

LORD JANNER

My Lords, will the noble Earl allow me to intervene for a moment? We are not dealing with that Amendment at all. We have a lot to say on that Amendment. With the greatest respect, it would be grossly unfair to deal with that Amendment in the course of discussion of the Amendment we are dealing with at the moment.

THE EARL OF KINNOULL

My Lords, the reason I am commenting on my noble friend's Amendment is that in her proposal the rateable value limit in London would be £1,500, and the rateable value proposed by the noble Lord, Lord Hughes, would also be £1,500 in Central London. The rateable value in the country in my noble friend's Amendment would be £750, and in the proposal of the noble Lord, Lord Hughes, in it would be £750. In the cases I have been given, which have been worked out to demonstrate the difference in compensation that would arise under the existing rules of the 1967 Act and the suggested formula under the Amendment of my noble friend Lady Young, the position would be as follows. In the case of the property in Central London, the ground rent is £190, the leasehold value is estimated at £8,000, the freehold vacant possession value is £65,000. Under the existing formula the compensation for the freehold would be £20,000 and the tenant's profit would be in the region of £37,000, but under my noble friend's formula it would be £22,000—a difference of only £2,000.

My Lords, I am also advised by the valuation profession that under my noble friend's Amendment there is one part in subsection 1(c) which they would con sider very contentious. This is the assumption that the leaseholder has no liability for repair or maintenance, even if that condition is in the lease. This is an assumption which a valuer would have to make under my noble friend's Amendment. This means, in practice, that when a leaseholder let a house fall into a state of decay he would benefit in compensation more than if it were in good order.

My Lords, I sincerely hope the House will accept the Amendment proposed by the noble Lord, Lord Maybray-King, because I believe there are two fundamental reasons for doing so. The first is that there has been no evidence, so far as I can see, of any hardship suffered by leaseholders; and, indeed, there is a great deal of evidence, as the noble Lord so movingly said, of hardship that will be suffered by freeholders. The reason for this is simply the question of the compen sation and present rules that govern compensation under the 1967 Act. The second reason is that in a Housing Bill it is fundamentally wrong to alter the balance in the major Act of 1967 by a hastily drafted clause such as that which lies before us. For these two, as I believe, compelling reasons, I urge your Lordships to support the Amendment proposed by the noble Lord, Lord Maybray-King.

5.56 p.m.

LORD HALE

My Lords, I do not usually find myself having any contention at all with the noble Lord, Lord Maybray-King, but his reference, basing his case on a particular example and his love of Dulwich, was unfortunate. It places some of us in a difficult personal situation Although I know that the House has much to do, I propose to put the position which I put to him when the noble Lord was in the Chair in discussion on the 1967 Act.

The noble Earl, Lord Kinnoull, said that this arose almost by chance because of the falling in of working-class leases in South Wales. I fought the Election of 1929 very largely on leasehold enfranchisement, which was a main part of the Liberal Party programme at that time—45 years ago. When I went to the House of Commons in 1945, I became chairman of an ad hoc Labour Party committee set up to consider the implications of leasehold reform which sat very regularly interviewing Ministers. I say, quite frankly, that it was a pressure committee. To an extent, it was a Party committee and it did not profess to be impartial, but it pressed for the appointment of an impartial committee and for an impartial investigation, and finally that committee was set up.

I did not come here to-day with the slightest intention of speaking, except to look at the Amendment which I understood was in the name of the noble Baroness, Lady Young, because of correspondence I had from Hampstead—certainly nothing to do with Dulwich. I wonder whether or not rather heavy weather is being made of this. I was a member of the Select Committee under Lord Uthwatt which began to deal wth business leases and that very great man, for whom I had a profound affection, died before our labours were completed. He was succeeded by Lord Jenkins who, alas, has also gone to join the great majority, and who was a brilliant expert on the matter. I think he knew more about leasehold law than almost any living man, but he did not share our views at all. He would not mind my saying that. He was quite clear that he did not believe in leasehold enfranchisement, and he thought the landlords would have a very hard deal by leasehold reform for working-class houses in South Wales or anywhere else. He was a very distinguished, honest, able and courteous man.

So the minority report bore only two names, and I am the only survivor, unfortunately, of those two. The future Lord Justice Ungoed-Thomas and I helped to prepare the minority report. Up to that time, I had never had any personal interest of any kind in leasehold. We were very strict about these things in those days. Sometimes I wonder whether we are still as strict to-day. So when I bought a leasehold house, my own house, in Dulwich in January, 1956, I considered myself as being disqualified to take an active part in the matter. When the debate opened in 1967, I made a personal explanation with the permission of the noble Lord, then Mr. Speaker, saying that I would not take any part in the discussion of that Bill.

It was a decision which I have since bitterly regretted. I think I was over-punctilious, because at that time I knew a great deal about the problem which was not only affecting South Wales. The only matter I mentioned in the whole course of that debate was the 999 years' lease, the special problem of Oldham, because in that problem the tenant rarely finds who the landlord is. The tenants cannot pay any rent and they cannot do any repairs without permission, so we made a little Amendment in connection with that.

The noble Lord, Lord Maybray-King, in his emphasis on that point, now puts me in the position that I am either to appear to be taking a biased position, or going back on principles that I have advocated for a great many years. I was greatly dissatisfied with the 1967 Act and so were many tenants. All we gave them was temporary protection and the prospects of litigation, and of course a management order which in Dulwich, I agree, is very important. The noble Lord, Lord Maybray-King, has spoken particularly to-day about Dulwich, but I shall try to abstain from speaking about it. However, I am sure he will not misunderstand my use of the word when I say that he has presented "selected" figures. I do not mean that he has selected them, but I have no doubt that we have all been presented with selected figures from Hampstead, for instance.

I received a circular setting out the grievances and giving the figures, and I do not doubt for a moment that the figures have been selected and are, in fact, specially hard cases. However, I would say that the houses in Dulwich to which I understand he is really referring, have nearly all been erected in the last few years; or, at any rate, since I went there in 1956. They all surround me. Mine is the last slum house in the road and is an eyesore, because my house was built at the time when Pissaro sat on the opposite side of the road painting Dulwich Church, and Pissaro was here to escape service in the Franco-German war. It has suffered a good deal of dilapidation since, and I am wondering just what will happen to me under a management order. But I have no quarrel at all. Several of the governors are personal friends of mine, and since recent—and not so recent—changes of staff I have had the utmost courtesy. I have no complaint and I do not want to say anything other than what is fair.

One thing I can say that is fair is that the admirable houses which were built, perhaps, ten years ago, at a guess—less, I think—have quite often already changed hands several times at a profit, and the people buying them now are facing burdens which are likely to engulf them, because now they are paying 13 per cent. interest on a mortgage, and the prices which boomed when the last Government were in power are now showing a recession, as I understand the position. I hope that Dulwich will be preserved, with the great amenities that the college governors have provided, including one of the most charming picture galleries, magnificent parks and so on. But it is not good enough to say that great advantages have been conferred on the tenants by the 1967 Act. In some cases, of course, it will work out that way, but in many cases great burdens and great fears are in the minds and hearts of the tenants.

I do not say that necessarily about Dulwich, I do say that here we are facing special difficulties at the moment, and already more threats are being murmured about our aggressive intentions, our alterations to clauses, and so on. This was agreed at Committee stage and I am bound to say, having listened to my noble and learned friend Lord Stow Hill, to whom I always listen with very special attention, and to my noble friend Lord Janner, to whom I shall have to say the same now or he will be annoyed, that I feel justified on this occasion in voting against the Amendment if the occasion arises.

VISCOUNT GAGE

My Lords, I speak with considerable reserve on these complicated matters, but I happen to be a trustee of an ancient and well-known charity which owns assets, from the rents of which we pay a great deal of money every year to various admirable charitable objects. In listening to this debate I cannot help feeling—although I may be wrong, of course—that those assets will be endangered by this clause. I know that in the past the noble and learned Lords of this House have always been jealous about any attacks from any quarter on charities. I must confess that I feel uneasy about the position here, and unless I can be assured that charities such as I am referring to are exempted in some way from the operation of this clause, I shall feel strongly in favour of voting with my noble friend Lord Maybray-King.

LORD CLINTON

My Lords, I rise in support of this Amendment, and I think I should declare my interest in having leasehold interests outside London. I believe that we should get back to the original Leasehold Act and not try to alter this very complicated piece of legislation, especially, as I gather that it has been done in a short time and at rather short notice. We are dealing here with two different animals, and I believe that leaseholders and lessees come under the Leasehold Reform Act. However, having said that I believe that this very sensible Amendment should be supported. This would give time for this Part of the Bill to be looked at again. By increasing the rateable value, it is well-known that a different class of property comes within the ambit of the legislation, which was not originally intended, and I think it is unfair that the new freeholders should collect such a large bounty. So far as I know it was intended—and not altered—that only houses within the application of the Rent Acts should be enfranchised. This Amendment observes the existing position and, at the same time, allows for change in the rateable value.

BARONESS YOUNG

My Lords, we have had a very long debate on this matter and I can well understand the reason for it. One fact which has daily become clearer to me is what an extremely complicated and technical subject the whole question of leasehold enfranchisement is, on which it is necessary to tread extremely carefully. I cannot recall having more correspondence in so short a space of time as I have had on this matter, and I should like to say to my noble friend Lord Kinnoull, who supports Amendment No. 48, that if he has no evidence of any hardship that would be caused he should look at my file.

It may well be, as has been said, that people have picked out hard cases, but a number of cases have been drawn to my attention, particularly in Hampstead, and I also have in front of me a long letter from Cambridge, indicating people who would be seriously affected were Amendment No. 47 not carried. I cannot speak with all the personal experience that other noble Lords have of all parts of the country, but I know that there are a great many leasehold houses in Oxford and there is a situation in which people feel strongly about leasehold enfranchisement. So if one is trying to weigh up the balance, I can see the difficulties facing the great estates and the charities on this matter, but I also see the difficulties of a great many individuals, and, in fairness, I think one must put both sides of the case in this debate.

As the noble Lord, Lord Maybray-King, made very clear in his speech, the reason why the rateable value limits were fixed originally in the Bill of the last Government and maintained in the present Housing Bill is, as I understand, that they exactly reflect the two and a half times increase in rateable values from 1965. Of course, it was on the 1965 rateable values that the 1967 Leasehold Reform Act was based.

On an Amendment moved at the Com-mittee stage in another place by my honourable friend Mr. Rossi, these two limits were to be raised to £1,500 in Greater London and £750 elsewhere. I think I am right in saying that that; Amendment received all Party support in that Committee, and it was therefore carried. I am, therefore, very glad to suport to-day Amendment No. 47 which was moved some time ago now by the noble Lord, Lord Hughes. One of the reasons why there has been a great deal of apprehension expressed by the charities and by a great many of the landowners is that there was some doubt in the wording of the original Amendment by Mr. Rossi. The first reason why I am grateful for the Government's Amendment is that it removes this doubt.

As I understand the position, those who are entitled to enfranchise themselves under Clause 109 as now drafted will be those whose rateable values are £1,500 in Greater London and £750 elsewhere on April 1, 1973, and whose leases date back to pre-1966. This removes, therefore, any kind of retrospection. That, I think, is one of the reasons for the doubts of so many people about this Amendment.

The second reason why I am very glad to welcome the Amendment—and nobody so far has mentioned it—is that a new subsection (1)(a) at the bottom of page 40 contains a clause which affects management schemes, and it therefore enables an estate to have a management scheme provided they set it up within two years, which is entirely comparable with the proposals in the Leasehold Reform Act, 1967. I very much welcome this, and I am most grateful to the Government for drafting an appropriate clause. I quite accept that the clause I moved at the Committee stage was not correctly drafted.

As I said at the beginning, the difficulty is to steer a middle path between the two groups of people who are seriously affected. I said earlier that undoubtedly there was evidence that many people would be affected if the rateable values were not kept where they are in the present draft of Clause 109. These rateable values are brought into line with the fair rent legislation. I well recall that last year I myself moved the raising of the rateable value limits for fair rent legislation. One of the reasons for doing so was that it brought into security of tenure a group of people who had formerly been excluded—I suppose, if we use such terms, very largely middle class people who stood to benefit from this extra security.

It seemed only right to my right honourable friend Mrs. Thatcher, and my honourable friend Mr. Rossi, that the leasehold enfranchisement clauses should be brought into line with the fair rents legislation. I accept that there could still be anomalies. This is a fact of all housing legislation, that the more one interferes with the housing market the more anomalies one creates and one works further to take them out again.

The reason why I have down another Amendment, Amendment No. 50, is because it has been put to me that with these more valuable houses there could be this element of speculation. It is designed to amend the compensation provisions of the Leasehold Reform Act for these more valuable houses, and to bring the compensation that would be given more in line with market values. I am bound to say I was rather surprised at the argument of the noble Lord, Lord Maybray-King, on this because it seems to me that if we are going to talk about expropriation or anything else, a very good case could be made out under the Leasehold Reform Act 1967 where, as T understand the basis of compensation, in a layman's language it is effectively that you buy the land and not the bricks and mortar. That enables you to enfranchise yourself. Whatever we may think of it, that is what the law says. It is going to be applied automatically to everyone whose rateable values are £1,000 in London or £500 elsewhere. If we talk about expropriation, we could apply it just as much there as indeed anywhere else. This situation has been in existence since 1969. I am bound to say I was somewhat surprised at that.

I hope that the House feel that the newly drafted Clause 109 is one that the House should support. In this very difficult field it does, I hope, with the following Amendment that I intend to move, give fairness to both sides. It brings it in line with the Rent Act legislation which, after all, is in many ways a comparable piece of legislation, in that this is all concerned with the security of someone's home.

As I say, a great many letters have been written to me on this subject. I am quite certain that enormous numbers of people are watching very anxiously to see how this debate will go, and I hope very much that the House will support Amendment No. 47.

THE EARL OF KINNOULL

My Lords, before my noble friend sits down, I wonder whether she could clarify one point in her argument. I am not at all unsympathetic concerning any hardship of leaseholders. Where is the hardship of a leaseholder? When a leaseholder owns a lease it has a value and he would buy it for a premium plus a small ground rent. That premium is basically a capitalised fair rent. At the end of the lease, he does not lose his house. All that happens is that he either has to take out another lease for a premium or he can revert to the fair rents system. So where is the hardship? Is he really being turned out of his house?

BARONESS YOUNG

My Lords, it may well be that "hardship" is the wrong word to use in this particular case. But, of course, what a leaseholder wants is the knowledge that the house in which he has been living for a considerable period of time will be his as an owner and not as a tenant, even if he has security of tenure. It may be that "hardship" is the wrong word to use, but that is the position the leaseholder wishes to have.

6.9 p.m.

LORD HUGHES

My Lords, when a very long time ago I moved in very few words Amendment No. 47 I felt it would be the wish of the House that there should be a wide-ranging debate over these two Amendments, one of which must automatically rule out the other. If Amendment No. 47 is made, then of course Amendment No. 48 would not be possible, and the other way round.

As I said, Amendment No. 47 is technical. It corrects drafting errors in Clause 109 as it left another place. The original clause in the Bill merely amended the Leasehold Reform Act 1967 by providing a rateable value limit on the 1973 rateable value lists for new houses entering the lists after 1973 comparable with the rateable value limit in the old list. The Opposition Amendment which was carried against the Government in another place raised the rateable value limits for enfranchisement under the Act for tenancies granted before March 23, 1965, by amending Section 1A of the 1970 Act to bring tenancies with rateable values of £750 outside and £1,500 within Greater London granted before 1965, and those with rateable values of £500 and £1,000 granted after March 23, 1965, into the scope of the Act. These are rateable values on the 1973 rateable value list. If the Government accept the principle behind that Amendment, it will be necessary to redraft the clause to ensure that it does what was intended. There is a problem about dividing the date March 23, 1965, in the higher and lower rateable value limits. The reason for this division is that tenancies granted after this date were granted with knowledge of the Leasehold Reform Act 1967, and it would be unjust to raise the rateable value limits to bring into the scope of the Act tenancies granted by a landlord on the understanding that they were outside the Act. However, the date of March 23, 1965, bears no relation to the introduction or coming into force of the Act. A more appropriate date is January 18, 1966, when the White Paper Leasehold Reform in England and Wales, which preceded the Act, was published. This is the date used in this Amendment.

The other fault of the clause, as it now stands, is that it may disenfranchise some tenants. It is possible that some premises with 1969 rateable values of less than £700 or £1,000, the rateable value limits in the 1967 Act, may have new rateable values in the 1973 leases of more than £750 or £1,500. There may be tenancies granted after March 23, 1965, of £500 or £1,000. Such tenancies will be taken outside the scope of the 1967 Act. This is rectified in this Amendment by keeping the original Section 1(1)(a) of the 1967 Act, and adding two sections, Section 1(5) and Section 1(6). Subsection (5) provides that where the appropriate day falls on or after April 1, 1973, for tenancies granted before February 18, 1966, the rateable value limits are £750 and £1,500. For tenancies granted after February 18, 1966, the rateable value limits are £500 and £1,000. Subsection (6) provides that where the appropriate days fall before April 1, 1973, for tenancies granted before April 18, 1966, the rateable value limits are £750 and £1,500 on the 1973 rateable value lists.

My Lords, I now come to words in my brief which I feel right in my heart. This is a complicated Amendment. The legislation with which I was involved before we started on this Housing Bill was the reform of land tenure in Scotland. One of the things which was done in that Bill was to make certain that long leases of residential property were not going to rear their ugly heads in Scotland. Up to the present, we have been free of them, and we wanted to make certain they were not going to come in. If nothing else has emerged, as far as I am concerned, in the long time since I moved Amendment No. 47, I am convinced completely how absolutely right we are not to have this system imported into Scotland. Otherwise, I feel, as a Scot, moving this—places have been mentioned which have so much effect in London, such as Dulwich and Hampstead, which, after all, are only names on a map to me—like an innocent bystander who has been roped into a quarrel which has absolutely nothing to do with me. I am even more so, because the alternative Amendment to the one I have moved, No. 48, is to restore the Bill to the form in which the Government originally had it.

So it is obviously impossible for me to say that we should not like to see the Bill in the form in which we brought it into another place. Obviously, in the opinion of the Government that is the best form of the Bill. But I come up against the difficulty that in another place they decided to change it. I have had from all sides of the House views expressed wishing the Government to adhere to the decision of another place, and to make that decision work in the way which another place intended.

My Lords Amendment No. 47 does precisely that. If, therefore, the Government decide that the right thing to do is to accept the will of another place on this matter, then Amendment No. 47 should go into the Bill. If the Government want to go back to the original position, then we have to say we are to take the opportunity in this place to throw aside the decision arrived at in another place after very careful consideration. I must admit that at the outset of this debate I was minded to hope that the House would accept Amendment No. 48 instead of Amendment No. 47. As an upholder of the constitutional practice that in disagreements the decision of the other place is better than a decision of this place—there are sometimes exceptional circumstances—I think it would be wrong for me to encourage your Lordships not to accept the Government Amendment No. 47.

Having said all that, I think your Lordships will probably agree with my feeling that I am an innocent bystander dragged in has a certain merit of truth

Resolved in the affirmative, and Amendment agreed to accordingly.

attaching to it. Therefore, with regrets to my noble friend Lord Maybray-King and to the noble Earl, Lord Kinnoull, who have found themselves allies in the position in which the Government once found themselves, I must invite your Lordships to put Amendment No. 47 in the Bill.

6.27 p.m.

On Question, Whether the said Amendment (No. 47) shall be agreed to?

Their Lordships divided: Contents, 110; Not-Contents, 14.

CONTENTS
Aberdare, L.	Elles, B.	Pannell, L.
Alexander of Tunis, E.	Elwyn-Jones, L. (L. Chancellor.)	Peddie, L.
Amherst of Hackney, L.		Phillips, B.
Ardwick, L.	Emmet of Amberley, B.	Pike, B.
Auckland, L.	Essex, E.	Platt, L.
Balerno, L.	Evans of Hungershall, L.	Raglan, L. [Teller]
Belstead, L.	Ferrier, L.	Rankeillour, L.
Berkeley, B.	Gainford, L.	Rhyl, L.
Bernstein, L.	Gardiner, L.	Rothermere, V.
Beswick, L.	Garnsworthy, L.	Ruthven of Freeland, Ly
Birk, B.	Glasgow, E.	Sandford, L.
Boothby, L.	Glenkinglas, L.	Sandys, L.
Boyle of Handsworth, L.	Gowrie, E.	Segal, L.
Brabazon of Tara, L.	Hailes, L.	Sempill, Ly.
Brooke of Cumnor, L.	Halisham of Saint Marylebone, L.	Sharples, B.
Brooke of Ystradfellte, B.		Shepherd, L. (L. Privy Seal)
Brougham and Vaux, L.	Hale, L.	Shinwell, L.
Buckinghamshire, E.	Hall, V.	Slater, L.
Castle, L.	Harris of Greenwich, L.	Snow, L.
Catheart, E.	Henderson, L.	Stow Hill, L.
Champion, L.	Hornsby-Smith, B.	Strathcarron, L.
Chelwood, L.	Houghton of Sowerby, L.	Strathcona and Mount Royal, L.
Colville of Culross, V.	Hughes, L.
Colwyn, L.	Jacques, L.	Sudeley, L.
Cork and Orrery, E.	Janner, L.	Taylor of Mansfield, L.
Cowley, E.	Lauderdale, E.	Tenby, V.
Cranbrook, E.	Lee of Asheridge, B.	Tranmire, L.
Crawshaw, L.	Longford, E.	Trefgarne, L.
Cullen of Ashbourne, L.	Lyell, L.	Vivian, L.
Darling, L.	Macleod of Borve, B.	Walston, L.
Davies of Leek, L.	Melchett, L.	Wells-Pestell, L. [Teller]
Davies of Penrhys, L.	Merrivale, L.	Wigg, L.
Denham, L.	Mersey, V,	Windlesham, L.
Douglas of Barloch, L.	Mowbray and Stourton, L.	Wootton of Abinger, B.
Drumalbyn, L.	Newall, L.	Wright of Ashton under Lyne, L.
Dundee, E.	Northchurch, B.
Eccles, V.	Oakshott, L.	Wynne-Jones, L.
Effingham, E.	Orr-Ewing, L.	Young, B.

NOT CONTENTS
Caccia, L.	Killearn, L.	Monson, L.
Clinton, L.	Kinloss, Ly.	Redcliffe-Maud, L.
Clwyd, L.	Kinnoull, E. [Teller]	Robbins, L.
Gage, V.	Maybray-King, L. [Teller]	Stradbroke, E.
Hylton-Foster, B.	Middleton, L.

6.37 p.m.

BARONESS YOUNG moved Amendment No. 49:

Page 94, line 30, at end insert— (1A) After subsection (4) of section 1 of the Leasehold Reform Act 1967 there shall be inserted— ( ) At any time the tenant may take the action provided in Schedule (reduction of rateable value in case of certain improvements) to this Act, for his rateable value to be adjusted and in all such cases the agreed rateable value or that determined by the Court or District Valuer shall be the rateable value for the purposes of that Act.

The noble Baroness said: My Lords, I beg to move Amendment No. 49. This is couched in similar terms to the Amendment I moved in Committee. We have already had a very long debate on the subject of leaseholds and I do not wish to take up any unnecessary time, because I know there is other business to follow. I should like to make three general points about it. I withdrew the Amendment at Committee stage because I wanted to have an opportunity to study what the noble Lord, Lord Hughes, had said about it. Having had this opportunity, I should like to say this. One of the noble Lord's reasons for not accepting the Amendment then, as I understood it, was that it had come to him suddenly and he had not had the opportunity to look at it himself. In fact, it was an Amendment similar to one put down by my honourable friend Mr. Rossi in another place some four weeks previously, but I would accept that with the printing difficulties one finds it difficult to keep up with everything. His second reason was that its drafting was defective, but so far as the new Schedule is concerned this is a complete lift of the Fifth Schedule from the 1957 Rent Act.

The basic purpose of this Amendment is to allow those tenants, who have improved their houses—perhaps by adding a garage or another bathroom or something like that—and whose rateable value therefore rises, to have that increase in their rateable value not counted against the rateable value for leasehold reform. This seems to me entirely in spirit with the Amendment we have just carried, and I should have thought that it was something the Government could accept. It seems to me very harsh that when a tenant improves his house and raises his rateable value just over the limit he can- not enfranchise himself. The whole purpose of the Amendment is to exclude this rateable value that comes from the improvement, and to bring him within the terms of the Bill. I beg to move.

6.40 p.m.

LORD HUGHES

My Lords, the noble Baroness, Lady Young, supported the Government's Amendment and she regards this as an addition to what we have, in fact, done already. I am sorry, but I cannot agree with her. This new clause, and the Schedule which goes with it, are designed to enable certain tenants who are outside the scope of the Act to bring themselves within its scope by having their rateable values adjusted downwards. This adjustment would be, carried out following a declaration by the tenant that he has carried out improvements. The procedure would also involve the valuation officer and the county court, in certain cases, and the machinery under which it is to be done is taken from a repealed Schedule to the Rent Act 1958. It is apparently the intention that this right to have rateable values adjusted should apply only to those houses which might have been brought within the Act by the Amendment carried out at Committee stage in another place.

Because the clause amending the Leasehold Reform Act which the Government introduced into this Bill, as the Opposition when they were in Office introduced it into the preceding Bill, came at the end of the Bill, and because it stands as an isolated provision, it has not been possible to give the whole question of leasehold enfranchisement the full discussion I am sure both sides of this House would have wished. What was intended as a modest measure to retain the scope of the Leasehold Reform Act 1967 has been turned, as a result of a change of Conservative policy on the subject of leasehold enfranchisement, into a wide extension of the scope of the Act. Because the records of our proceedings are not available in the normal way, the changed Bill has not been available to many of those who would be interested in expressing a view, and who would normally expect to be consulted on matters of such importance. I am talking of people outside.

My Lords, what we are now being asked to do is to adopt at this late stage in the progress of the Bill, a complicated procedure which is quite absent from the Leasehold Reform Act itself, was not advocated in all the exhaustive debates both before and during the passage of that Act in Parliament, and has never been suggested to the Department or to Ministers until Amendments similar to these were put down at Report stage in another place, as the noble Baroness told us. I understand that the Department has some knowledge of the cases which may very well lie behind these Amendments. In one case—I do not think that it is right to mention individual names—for instance, about which the noble Baroness may well know, I believe that it is doubtful whether the Amendments which she has put down, even if they were technically effective, would be of benefit, because that individual would still be outside the scope of the Leasehold Reform Act for other reasons.

There may be other cases in which leaseholders with long leases would be able to bring themselves within the Act if these Amendments were accepted. There have no doubt been similar cases in which leaseholders whose leases have already expired would have been able to bring themselves within the scope of the Act if it had been possible for them to adjust their rateable values in this way. There must also be cases in which tenants of houses on ordinary tenancies have removed themselves from the protection of the Rent Act 1968 by improving their houses. They, too, would no doubt have liked to take advantage of such a procedure as this, and if it is available for long leaseholders it should, in equity, be available for them. But there is no such procedure for them, and it has not been suggested that there should be. What we have already done in the Bill, is greatly to extend the scope of the Leasehold Reform Act 1967. In the light of what I have said, I hope the noble Baroness will agree that it would be unwise to extend it still further in this partial, and indeed complicated way without much more careful consideration than has been possible in the timetable of the Bill.

As a final point, I should say that on technical grounds this clause and Schedule, drafted as they are on the basis of an original clause which has itself to be amended, are certainly defective. Indeed, I understand that they may be defective in an absolutely basic way, in that they could be involved only by a tenant who was already within the scope of Section 1 of the Leasehold Reform Act, and would, therefore, be of no use at all to any of the people they are designed to help.

For these reasons, and not for any Party political point, or question of Government prestige, or anything of the kind, I invite the noble Baroness to feel that she and her colleagues in another place have accomplished a fair amount of what they wanted, and that they ought not to put it in peril by putting in this exceedingly difficult and complicated Amendment, the consequences of which it is impossible to forecast. She has put it in to accomplish certain things for certain people, but the advice which I have received, in the time that has been available to study this complicated problem, is that it is more likely to have a reverse effect. Therefore, I ask her not to press this Amendment. If it were put in with all its defects, went to another place and then had to come back here with corrections, the Bill itself would be in very grave peril for something which is, at most, of doubtful value.

LORD JANNER

My Lords, I have listened carefully to what my noble friend has said. I feel that the complications are not as heavy as he has in mind. What worries me about this matter is that some people who have made improvements can be put at a disadvantage compared to those who have not. For example, you could have people living in the same street, one of whom has neglected the premises he is living in and would come within the rateable value, whereas the person who had made improvements and spent a considerable amount of money—some considerable, perhaps some not so considerable—might come outside the scope of the Act.

I wonder whether my noble friend might think about the matter once more. I appreciate that a considerable amount has been obtained already, and I do not think the noble Baroness would deny that. We would not want to destroy what we have received by something which might cause delay later on. I hope that my noble friend will reconsider the position.

LORD HUGHES

My Lords, I really cannot reconsider this. After all, we finish the Bill to-day. I have said that the advice we have is that this could, in fact, have the opposite effect to what is intended in some cases, and it will not cover some of the people who think that Amendments of this kind will work in their favour. Obviously what my noble friend has said about the unfairness for the person who has improved his property and taken himself out has some merit, but if we are to deal with that we must be quite certain that we are dealing with it in a way which will accomplish the purpose. We are in danger of attempting to effect more and more radical Amendments to the Leasehold Reform Act in this Housing Bill. My noble friend Lord Hale spoke about all the complications which led up to the passing of that Act in 1967, and all the difficulties that had to be overcome before it got on to the Statute Book. Obviously the way to accomplish difficult amendments to that Act is not by Amendments to a Housing Bill, particularly when the advice of my advisers is that it would be such a dangerous way to attempt it.

6.50 p.m.

BARONESS YOUNG

My Lords, with the leave of the House, may I say that I am sure that the noble Lord, Lord Hughes, and I are in basic agreement as to what I am trying to achieve. It seems to me a most reasonable objective that the tenant who improves his house, and gets himself out of the rateable value limits, should be able to discount this. He has said that the Amendment is defective and that some people may not be helped. That may be true of any Amendment. What I should like from the noble Lord is a few examples of how it would make matters worse for some people. I can see that some people would be left out. What I cannot see is how someone who has improved his house can fail to be covered. Will the noble Lord give an example of what he means?

LORD HUGHES

My Lords, I am not certain that that is the position. The brief from which I read did not suggest that. What it said was that we are now doing quite different things in relation to those on leasehold and those who are tenants. By an Amendment in the Hous- ing Bill of the Leasehold Act, we are giving certain things. If we are to do this, it ought to be part of deliberate Government policy to seek to provide equity between one lot and another. The method of doing that is to amend the appropriate legislation, not to attempt other legislation under this Bill. If the circumstances had been different in regard to printing and so on, we might have been in a position to see a little earlier what were the remedies.

I am now trying to find out whether what has been put into my hands is appropriate in my remarks at this stage. I will read it and if it is in the wrong place we can disregard it: The fact that the Schedule is lifted from another Act does not mean that it is suitable in this Bill. Indeed, so defective is the present Schedule that the pages arc in the wrong order. There is absolutely no possibility before Commons' consideration of Lords' Amendments of putting this into anything like workable order.'' This is the point where I should say, "Not to be read to your Lordships". I am anticipating the next Amendment, No. 50. The noble Baroness, Lady Young, is getting advance notice that we do not like it also.

Obviously, if the noble Baroness decides that she has to press the Amendment, having regard to the numbers in the House, she will carry it into the Bill. What she will do is make us send along to the other place, at this stage of the proceedings, an Amendment so defective that it will have to be corrected there, with all the timetable problems that are involved. She is therefore taking the risk that we may lose the Bill, or sit on it for even longer than we are contemplating at present. It is for her to decide what she is to do. My advice to the House is that it is much too dangerous to put the Amendment in the Bill.

6.55 p.m.

BARONESS YOUNG

My Lords, by leave of the House again, I should have been much more sympathetic to the argument of the noble Lord, Lord Hughes, if I felt that the Government had considered this point. It is not as if I am raising it for the first time, at the last gasp. It is an Amendment which is in almost precisely the same terms as the one moved by my honourable friend Mr. Rossi on Report in another place. So the Government had an opportunity to consider it then, but they did not. I raised it again on Committee and said I thought it a reasonable Amendment that affected many people. The Government had an opportunity to consider it then and did not. I now raise it again on Report. It is not as if I had not said that I regarded this as important. Under those circumstances, I shall press it.

LORD HUGHES

My Lords, it is not correct that the Government did not consider the Amendment. The Government considered the matter fully on each occasion. Each time they came to the conclusion that it is impossible to do in the Bill what the noble Baroness requires. It is much too complicated. It is not because we did not consider the matter, but because we found it impossible to do what she wants. But if she wants to include

Resolved in the affirmative, and Amendment agreed to accordingly.

something which is unworkable, and even so defective as I indicated, it is up to her. She has the power to do it. That I must admit.

LORD SLATER

My Lords, is it not correct to state, which I believe my noble friend has endeavoured to do, that if the noble Baroness wants what she has been indicating to the House, it is for her Party to table an Amendment to the original Act on leasehold reform and to have it absorbed within its confines and its operations? That can be done, and it has been done in other Bills and Acts.

6.54 p.m.

On Question, Whether the said Amendment (No. 49) shall be agreed to?

Their Lordships divided: Contents, 66; Not-Contents, 43.

CONTENTS
Aberdare, L.	Denham, L. [Teller]	Mersey, V.
Alexander of Tunis, E.	Drumalbyn, L.	Mowbray and Stourton, L.
Amherst of Hackney, L.	Dundee, E.	Northchurch, B.
Auckland, L.	Eccles, V.	Nugent of Guildford, L.
Balerno, L.	Effingham, E.	Oakshott, L.
Belstead, L.	Elles, B.	Orr-Ewing, L.
Berkeley, B.	Emmet of Amberley, B.	Rankeillour, L.
Boothby, L.	Essex, E.	Rothermere, V.
Boyle of Handsworth, L.	Ferrier, L.	Ruthven of Freeland, Ly.
Brooke of Cumnor, L.	Gainford, L.	Salisbury, M.
Brooke of Ystradfellte, B.	Glasgow, E.	Sandford, L.
Brougham and Vaux, L.	Glenkinglas, L.	Sandys, L. [Teller]
Cathcart, E.	Gowrie, E.	Selsdon, L.
Chelwood, L.	Hailes, L.	Sempill, Ly.
Colville of Culross, V.	Hailsham of Saint Marylebone, L.	Sharples, B.
Colwyn, L.		Somers, L.
Cork and Orrery, E.	Hornsby-Smith, B.	Strathcarron, L.
Cowley, E.	Killearn, L.	Sudeley, L.
Cranbrook, E.	Lauderdale, E.	Trefgarne, L.
Crawshaw, L.	Lyell, L.	Vivian, L.
Cullen of Ashbourne, L.	Macleod of Borve, B.	Windlesham, L.
De L'Isle, V.	Merrivale, L.	Young, B.

NOT-CONTENTS
Birk, B. [Teller]	Hale, L.	Popplewell, L.
Blyton, L.	Hall, V.	Raglan, L.
Buckinghamshire, E.	Harris of Greenwich, L.	Rhodes, L.
Castle, L.	Henderson, L.	Segal, L.
Champion, L.	Houghton of Sowerby, L.	Shannon, E.
Clwyd, L.	Hughes, L.	Shepherd, L. (L. Privy Seal)
Darling of Hillsborough, L.	Jacques, L.	Slater, L.
Davies of Leek, L.	Lee of Asheridge, B.	Snow, L.
Davies of Penrhys, L.	Lloyd of Kilgerran, L.	Wade, L.
Elwyn-Jones, L. (L. Chancellor.)	Longford, E.	Wells-Pestell, L. [Teller]
	Maelor, L.	Wigg, L.
Evans of Hungershall, L.	Melchett, L.	Wise, L.
Gardiner, L.	Monson, L.	Wootton of Abinger, B.
Garnsworthy, L.	Peddie, L.	Wynne-Jones, L.
Goronwy-Roberts, L.	Platt, L.

7.4 p.m.

BARONESS YOUNG moved Amendment No. 50:

Page 94, line 30, at end insert— (" (1B) In section 9 of the Leasehold Reform Act 1967 (purchase price of enfranchisement) there shall be inserted after subsection (1): (1A) Notwithstanding the foregoing subsection, the price payable for a house and premises, the rateable value of which is above £1,000 in Greater London and £500 elsewhere, on a conveyance under section 8 above, shall be the amount which at the relevant time the house and premises, if sold in the open market by a willing seller, might be expected to realise on the following assumptions:

1. (a) on the assumption that the vendor was selling for an estate in fee sample, subject to the tenancy, but on the assumption that this Part of this Act conferred no right to acquire the freehold;
2. (b) on the assumption that at the end of the tenancy the tenant has the right to remain in possession of the house and premises under the provisions of Part I of the Landlord Tenant Act 1954;
3. (c) on the assumption that the tenant has no liability to carry out any repairs, maintenance or redecorations under the terms of the tenancy or Part I of the ' Landlord and Tenant Act 1954;
4. (d) on the assumption that the price be diminished by the extent to which the value of the house and premises has been increased by any improvement carried out by the tenant or his predecessors in title at their own expense;
5. (e) on the assumption that (subject to paragraph (a) above) the vendor was sell ing subject, in respect of rent-charges and other rents to which section 11(2) below applies, to the same annual charge as conveyance to the tenant is to be subject to, but the purchaser would otherwise be effectively exonerated until the termination of the tenancy from any liability or charge in respect of tenant's incumbrances; and
6. (f) on the assumption that (subject to paragraphs (a) and (b) above) the vendor was selling with and subject to the rights and burdens with and subject to which the conveyance to the tenant is to be made. and in particular with and subject to such permanent or extended rights and burdens as are to be created in order to give effect to section 10 below.

(1B) For the purpose of determining whether the rateable value of the house and premises is above £1,000 in Greater London, or £500 elsewhere, the rateable value shall be adjusted to take into account any tenant's improvements in accordance with Schedule (Reduction of rateable value in case of certain improvements) to the Housing Act 1974."")

The noble Baroness said: My Lords, I beg to move Amendment No. 50. I shall not take long moving it, because we have already discussed this matter very fully. As we agreed when we were debating Amendments Nos. 47 and 48, the difficulty with raising the rateable value limits for leasehold enfranchisement is that it has brought in some of the more valuable properties. As a consequence, a number of estate owners are greatly affected, and a number of charitable organisations, including of course the Church Commissioners and the Dulwich Estate, which was mentioned, and a number of the colleges of Oxford and Cambridge. I have therefore tabled this Amendment to alter the basis of compensation for those houses in the rateable value bands, in Greater London between £1,000 and £1,500 and those outside between £500 and £750. to bring it more into line with market value.

The Amendment is taken very largely from Section 9 of the Leasehold Reform Act. It begins with an explanatory introduction, which is subsection (1A), and then paragraph (a) is an alteration of paragraph (a) in Section 9 of the Leasehold Reform Act. As I understand the technicalities of the formula for enfranchisement under that Act, the basis of compensation at the end of a lease is to make an assumption that the lease continues for a number of years, I think 50 years, and then this decreases the value of the terminating lease, if only six or seven years are left. Paragraph (a) of my Amendment takes out this assumption, and therefore brings the value of enfranchisement nearer to the market value, rather than this particular formula under the Leasehold Reform Act. It also takes into account the fact that there is a sitting tenant in the house, which must alter its value; and it takes into account the increase in the value brought about by the tenant's improvement. It assumes, under paragraph (c), that we will, as it were, wipe the slate clean so far as tenant's improvements are concerned, and that none of these repairs are taken into account.

It also includes the two technical matters in the Leasehold Reform Act 1967 which follows as paragraph (e)—there is, incidentally, a misprint on page 43; there appear to be two paragraphs (c) but one should be (e)—and paragraph (f). As I understand it, they are highly technical matters which apply in certain parts of the country only, and those remain. The purpose behind it is to try to do justice, particularly to those charitable organisations which would otherwise be affected. It allows the leaseholder to enfranchise himself, but allows the freeholder to have nearer the market value when he does. I beg to move.

LORD JANNER

My Lords, I have listened carefully to what the noble Baroness has said. I am sorry to say that I do not find her argument a sustainable one. We are dealing with leasehold reform. A certain formula has been arranged and agreed to in the Statutes in respect of the calculation of the value of a freehold. An Amendment of this nature would in fact be altering the basis of what has all along been—indeed, it was tightened in the Housing Bill some time ago—the scale on which a tenant has been called upon to pay for the enfranchisement of the leasehold.

I do not think that at this stage we ought or are entitled to change that, because if we do it means that at a later stage we shall have this being regarded as a precedent for other alterations of a similar nature in respect of the leasehold enfranchisement itself. There is no reason why this should be done. A leaseholder's rights were assessed in a certain manner before. Up till now that has been accepted except, of course, in those cases where different tribunals have made different assessments on the basis of the Act itself. That is legitimate of course, but to alter the basis itself at this stage would in my view be quite wrong and I hope that the House will not agree to this Amendment and that the Leasehold Reform Act, as it relates to the calculation of the amount to be paid, will remain as it is at present.

THE EARL OF KINNOULL

My Lords as a Scot, I should like to congratulate the noble Lord, Lord Hughes, on the splendid tightrope he has been walking on behalf of the English Leasehold Reform Act. Unless my memory fails me, during the Committee stage the noble Lord, Lord Hughes, said that the clause which the Government had drafted in the original Bill before it went to the Commons Committee was based on their feeling that the possible profits of the leaseholders would be undesirable and unjustifiable. I hope that when the noble Lord comes to reply to my noble friend's Amendment he will be able to give an undertaking that the compensation rules under the Act will be reconsidered in view of the increase in the rateable value limits.

7.4 p.m.

LORD HUGHES

My Lords, the purpose of the Amendment moved by the noble Baroness is to increase the compensation paid by tenants for their freeholds under the Leasehold Act 1967. It is no doubt designed as a way of counteracting some of the results of extending the scope of the Act and it applies only to the, more valuable, tenancies brought within that Act by this Bill, as amended in another place. I am advised that the effect of the Amendment might be highly doubtful. It only become available for study in the Department in the middle of yesterday afternoon and I am advised that, from the examination which it has been possible to give it since then, it has not been possible to form a clear view of what it might do to compensation under the Act. I understand that it may well be that the effect of the Amendment as drafted would be just the opposite of what the noble Baroness intends and would actually be to reduce still further the prices paid for the freeholds of these large houses. The assumptions (b) and (c) which the noble Baroness's Amendment would insert among those upon which the price to be paid will be based might well have that result, or so I am advised.

The Government feel that if the Leasehold Reform Act is to be extended it should be extended properly, and that we should not take away with one hand benefits which we offer with the other. We considered, when we looked at the whole question, that the Act should be amended only so far as to maintain its scope and, after the discussion in Committee in another place and in the light of the discussion to-day, we decided that we should bow to the wishes of that Committee and extend it. That has been done. We believe that there can be no half measures. If the Amendment of the noble Baroness did ensure that the market value was paid for the more expensive freeholds brought within the scope of the Act, that extension would have been of no real benefit to tenants, since there could be no way for them to improve upon the situation in which they had bought their original leases.

As it is, I am afraid that the simple answer is that I can give the noble Baroness no assurance whatsoever as to what her Amendment would do, nor of course would it now be possible to introduce an Amendment which would have the result which she is seeking. Further, for technical reasons this Amendment might increase—if indeed it does increase compensation—compensation paid by already qualified leaseholders, the reason being that some people inside the old limits will have rateable values above the figures of £1,000 and £500. I am quite certain that that is not what the noble Baroness intends because it would so clearly be grossly unfair to these people.

My Lords, this is just part of the picture which I painted on the last Amendment. Attempting to make these complicated provisions as last-minute alterations to another Act means that we are treading on very dangerous ground indeed. However, the noble Baroness did not take my advice on the last Amendment and I have no great confidence that she will do any differently on this occasion. All I would say is that on this occasion the defects of Amendment No. 50 are even greater than those of Amendment No. 49. Finally, I am sorry that I cannot give the noble Earl the answer for which he asked but, if he will allow me, I will write to him and, if possible, give him the assurance which he seeks.

EARL OF KINNOULL

My Lords, I am grateful for that assurance, and all I would ask the noble Lord is, if he says in Committee that the Government disapprove of the sort of profits leaseholders will get, how can he come to this stage of the Bill and give no undertaking at all about altering the form of compensation

which my noble friend has put down?

LORD HUGHES

My Lords, this is a housing Bill. It is not a Bill to amend leasehold enfranchisement.

BARONESS YOUNG

By leave of the House, my Lords, I should like to say to the noble Lord, Lord Hughes, that I am very sorry that I was unable to get the Amendment to him earlier but, of course, I am not responsible for the timetable of the Bill and, as he knows as well as I do, we have been working to a very tight timetable indeed and this is an exceedingly complicated subject. What I am seeking to do is to be fair with regard to compensation as between those who wish to enfranchise themselves and the freeholders. It is quite wrong to say that there would be no benefit to tenants under this: there would clearly be the benefit to tenants that they could enfranchise themselves. While they might not be able to do it at the price under the 1967 Act, the fact is that they will be able to do it; and it does seem to me that it is much fairer to those in the higher rateable value limits that they should get something more by way of compensation than the 1967 Act allows. I appreciate that the Amendment is probably not technically correct; Amendments which are not drafted by Government draftsmen seldom are. Nevertheless, it is one about which I feel strongly and is one which I feel in honour bound to press, because I feel that in this case it acts in fairness to both the leaseholder and the freeholder.

7.18 p.m.

On Question, Whether the said Amendment (No. 50) shall be agreed to?

Their Lordships divided: Contents, 55; Not-Contents, 41.

CONTENTS
Aberdare, L.	Colwyn, L.	Killearn, L.
Abinger, L.	Cowley, E.	Kinnoull, E.
Amherst of Hackney, L.	Cranbrook, E.	Lauderdale, E.
Auckland, L.	Cullen of Ashbourne, L.	Macleod of Borve, B.
Balerno, L.	Denham, L. [Teller.]	Merrivale, L.
Berkeley, B.	Drumalbyn, L.	Mersey, V.
Boyle of Handsworth, L.	Dundee, E.	Monson, L.
Brooke of Cumnor, L.	Eccles, V.	Mowbray and Stourton, L.
Brooke of Ystradfellte, B.	Effingham, E.	Northchurch, B.
Brougham and Vaux, L.	Elles, B.	Oakshott, L.
Caccia, L.	Emmet of Amberley, B.	Rankeillour, L.
Cathcart, E.	Ferrier, L.	Rothermere, V.
Chelwood, L.	Gowrie, E.	Ruthven of Freeland, Ly.
Clinton, L.	Hartwell, L.	Sandford, L.
Colville of Culross, V.	Hornsby-Smith, B.	Sandys, L. Tetter]
Selsdon, L.	Sudeley, L.	Vivian, L.
Sempill, Ly.	Tranmire, L.	Windlesham, L.
Sharpies, B.	Trefgarne, L.	Young, B,
Strathcarron, L.
NOT-CONTENTS
Birk, B. [Teller]	Goronwy-Roberts, L.	Popplewell, L.
Blyton, L.	Hale, L.	Raglan, L.
Boothby, L.	Hall, V.	Rhodes, L.
Brockway, L.	Harris of Greenwich, L.	Segal, L.
Buckinghamshire, E.	Henderson, L.	Shepherd, L. (L. Privy Seal.)
Castle, L.	Houghton of Sowerby, L.	Snow, L.
Champion, L.	Hughes, L.	Stow Hill, L.
Davies of Leek, L.	Jacques, L.	Taylor of Mansfield, L.
Davis of Penrhys, L.	Janner, L.	Wade, L.
Elwyn-Jones, L. (L.Chancellor.)	Lee of Asheridge, B.	Wells-Pestell, L. [Teller]
	Lloyd of Kilgerran, L.	Wigg, L.
Evans of Hungershall, L.	Longford, E.	Wise, L.
Gardiner, L.	Maelor, L.	Wootton of Abinger, B.
Garnsworthy, L.	Melchett, L.	Wynne-Jones, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

Clause 110 [Option mortgages]:

7.25 p.m.

Lord HUGHES moved Amendment No. 51:

Page 94, line 33, at the beginning insert— (1) Subject to the following provisions of this section".

The noble Lord said: My Lords, with permission I will move Amendments Nos. 51 and 52, and associate with them Amendments Nos. 73, 74, 75, 76, 77, 78 and 79 in Schedule 8. These Amendments to Clause 110 and Schedule 8 follow upon amendments to Schedule 8 to restrict the availability of tax relief on interest contained in the Finance Bill which was considered in Lords' Committee. The restrictions mean basically that option mortgage subsidy will not in future be available for very large loans or new loans, or for what may generally be described as second loans. I must apologise for the fact that Amendment No. 52 is a starred Amendment which the House has not had long to consider. This was tabled in place of another Amendment which was identical in substance, but in which there was a small technical defect. In fact, all that the new Amendment does is to add in two places the words: or in paragraphs (ix) to (xi) of section 24(3) of the said Act of 1967".

My Lords, I beg to move.

LORD SANDYS

My Lords, this group of Amendments follows a pattern, and in view of the explanation which the noble Lord, Lord Hughes, has given about Amendment No. 52 we do not wish to raise any comments on them. In view of the need to proceed as fast as possible with later Amendments, I do not want to make further observations.

LORD HUGHES

My Lords, I beg to move Amendment No. 52:

Amendment moved—

Page 94, line 37, at end insert—

("(2) Until 6th April 1980, nothing in paragraphs 1(2) and 2 of Schedule 8 to this Act or in paragraphs (ix) to (xi) of section 24(3) of the said Act of 1967 shall have effect in relation to a loan if—

1. (a) the option notice in respect of the loan was signed on or before 26th June 1974, or
2. (b) the loan was made in pursuance of an offer in writing made by the lender to the borrower on or before 26th June 1974 and the option notice was signed as mentioned in section 24(3)(b) of the said Act of 1967.

(3) Until the expiry of the period of 3 months beginning on the appointed day, nothing in paragraphs 1(2) and 2 of Schedule 8 to this Act or in paragraphs (ix) to (xi) of section 24(3) of the said Act of 1967 shall have effect in relation to a loan (being a loan to which subsection (2) above does not apply) if the option notice in respect of the loan was signed after 26th June 1974 and before the day appointed for the coming into operation of this section.

(4) The Secretary of State may by regulations made by statutory instrument make such transitional provisions as he considers appropriate for the purpose of securing the proper application of Part II of the said Act of 1967—

1. (a) on and after 6th April 1980 in relation to a loan to which subsection (2) above applies; and
1771
2. (b) after the expiry of the period specified in subsection (3) above in relation to a loan to which that subsection applies.

(5)Without prejudice to the generality of the power conferred by subsection (4) above, in relation to a loan to which the power applies, regulations under that subsection—

1. (a) may require things to be done before the date on which the said Part II is to apply to the loan; and
2. (b) may make such modifications of the said Part II as the Secretary of State considers appropriate.

(6) A statutory instrument containing regula tions under subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

LORD GARNSWORTHY moved Amendment No. 53:

After Clause 113 insert the following new clause:

"Duty to inform tenant of a dwelling on assignment of landlord's interest

(1) If the interest of the landlord under a tenancy of premises which consist of or include a dwelling is assigned, the person to whom that interest is assigned (in this section referred to as "the new landlord") shall, within the appropriate period, give notice in writing to the tenant of the assignment and of the name and address of the new landlord.

(2) In subsection (1) above "the appropriate period" means the period beginning on the date of the assignment in question and ending either two months after that date or, if it is later, on the first day after that date on which rent is payable under the tenancy.

(3) Subject to subsection (4) below, the reference in subsection (1) above to the new landlord's address is a reference to his place of abode or his place of business or. if the new landlord is a company, its registered office.

(4) If trustees as such constitute the new landlord, it shall be a sufficient compliance with the obligation in subsection (1) above to give the name of the new landlord, to give a collective description of the trustees as the trustees of the trust in question, and where such a collective description is given—

1. (a) the address of the new landlord for the purpose of that subsection may be given as the address from which the affairs of the trust are conducted; and
2. (b) a change in the persons who are for the time being the trustees of the trust shall not be treated as an assignment of the interest of the landlord.

(5) If any person who is the new landlord under a tenancy falling within subsection (4) above fails, without reasonable excuse, to give the notice required by that subsection, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.

(6) Where an offence under subsection (5) above which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, he, as well as the body corporate, shall be guilty of that offence and be liable to be proceeded against and punished accordingly.

(7) Where the affairs of a body corporate are managed by its members, subsection (6) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

(8) In this section "tenancy" includes a sub-tenancy and a statutory tenancy, within the meaning of the Rent Act 1968 or of the Rent (Scotland) Act 1971, but does not include a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies, and "tenant" shall be construed accordingly.

(9) In this section—

1. (a) in relation to England and Wales "assignment" includes any conveyance other than a mortgage or charge; and
2. (b) in relation to Scotland "assignment" means a conveyance or other transfer (other than in security), and any reference to the date of the assignment means the date on which the conveyance or other transfer was granted, delivered or otherwise made effective.

(10) This section shall come into operation I at the expiry of the period of one month beginning with the date on which this Act is passed.").

The noble Lord said: My Lords, where there is a change of ownership this new clause imposes on a new landlord of residential property an obligation to inform the tenant of the change of ownership and of the landlord's name and address. The clause meets a commitment made by the Government during the debate in Committee in another place, which is why we support it. It also takes up a recommendation made by the Law Commission in a working paper on this subject, that a tenant should have the right to be automatically informed, when there is a change of landlord, of the new landlord's name and address. I hope that that brief explanation will satisfy your Lordships. I beg to move.

LORD SANDYS

My Lords, in view of the fact that this Amendment received wide acclaim in another place, and in view of the explanation given by the noble Lord, Lord Garnsworthy, we do not wish to make further comment upon it.

Clause 114 [Service charges]:

7.30 p.m.

LORD SANDYS moved Amendment No. 54:

Page 96, line 9, at end insert— ("and if any works in respect of which a service charge is claimed are estimated to cost more than £250, at least two estimates of the cost of such works shall be obtained by the landlord or agent and one of the said estimates shall be from a firm wholly unconnected with them, in the manner described in Schedule 10 to this Act.").

The noble Lord said: My Lords, on behalf of my noble friend Lady Young and myself, I wish to move Amendment No. 54. We enter into Part IX of the Bill and we have before us a matter in relation to services charges which we have discussed in considerable depth. I should like to open by thanking the noble Lord, Lord Hughes, for one of the longest letters I have ever received on this interesting and complicated subject. I should like to thank him also for providing me with the information and following the line which he said in Committee he would follow. It is quite obvious when we examine the details which were discussed on Committee, that the Government take a radically different view from the Opposition in this matter of service charges.

The noble Lord, Lord Hughes, made a number of observations. He said that this Amendment was unnecessary. He said that it was defective and, I quote his words, he "hit it for six" on that account. If he is as good a batsman as I feel sure he is in the field of draftsmanship, it may be unfortunate for the noble Lord to discover that this Amendment has re-emerged in another over in almost precisely the same form. I should like to make a single comment on a defective typographical error. In Amendment No. 54 you will see on the last line but one a reference to "Schedule 10 to this Act". In view of the fact that the Schedules have been re-numbered once again this should read "Schedule 9 to this Act". It is a simple but nevertheless highly important fact and I hope the noble Lord will accept that amendment to the Amendment as set down.

LORD HUGHES

In the copy I have it says "Schedule 1".

LORD SANDYS

Are we speaking about the final line but one of Amendment No. 54?

LORD HUGHES

The Amendment No. 54 I have is "page 96, line 9, at end insert … ". Is that the one?

LORD SANDYS

Quite correct.

LORD HUGHES

In my copy the reference to the Schedule is in the last line. It reads: … wholly unconnected with them, in the manner described in Schedule 1 to this Act.

LORD SANDYS

Would the noble Lord accept that it is possible that a typographical error has occurred?

LORD HUGHES

It is Schedule 9 that you want?

LORD SANDYS

It should be "Schedule 9 to this Act". My Lords, to continue with the defects which the noble Lord pointed out on Committee, he said: The Amendment does not "define"' works which is a term which does not fit in with the definition of service charges. It does not prescribe who is to estimate the cost of works as being likely to exceed £250. It prescribes a rigid sum as applicable to ail blocks of flats, the smallest and the largest alike, although in a small block £250 might pay for a real job of work, whereas in some of the very big blocks that sum might only cover insignificant items."—[Official Report, 15/7/74.] I have examined with the closest detail the comments of the noble Lord, Lord Hughes, upon this matter and I cannot find it possible to depart from my remarks on Committee that we must have a starting gate and £250 seems to be a very reasonable starting gate.

This figure in present-day terms would appear to be the kind of figure which is the basic minimum which one might reasonably expect to exist—even in a period of inflation—for a short period between now and the appearance of yet another Housing Bill before Parliament. Therefore, I regret that I cannot alter the draftsmanship of the £250. In regard to the question of the machinery for ensuring that statutory duty is carried out, I find that the Amendment as drafted—and here I rely on the advice of my advisers—is entirely satisfactory and I fail to understand why the Amendment as drafted is wholly unsatisfactory to the noble Lord. So far as the other Amendments which follow are concerned, I feel sure that the noble Lord will wish me to deal with those one by one and, therefore, I shall move them separately.

7.35 p.m.

LORD HUGHES

My Lords, with the House as densely occupied as this, it would be a waste of time if I were to repeat the arguments which I put forward at Committee stage. As the noble Lord has said, I wrote him a very long letter explaining even more fully than I did at Committee stage the reason why the Government considered this whole group of Amendments to be wrong—perhaps good in intention, but we know how pavements sometimes rise. All that the noble Lord has done is to return to the arguments he put forward at the last stage and to say that he does not accept what I said in return.

I see no useful purpose in repeating all that L said before, merely to prove that I am still of the same opinion, particularly

Resolved in the affirmative, and Amendment agreed to accordingly.

as it does not matter—nobody will read anything that is said here to-morrow or even the day after. Therefore, all I need to do is to point out that the Government are still firmly of the opinion that many people will have great cause to regret what the noble Lord is proposing and none more so than those whom he is seeking to help. His Amendments are singularly ill-advised. Their purpose in many cases will be totally different from that which ha seeks to accomplish. They will be of no help to tenants who have a good landlord, but they will be an absolute disaster for tenants who have a bad landlord and who want to seize on all the opportunities for delay which these Amendments will build into the procedure. I therefore must ask the House not to accept this Amendment.

7.38 p.m.

On Question, Whether the said Amendment (No. 54) shall be agreed to?

Their Lordships divided. Contents, 42: Not-Contents, 35.

CONTENTS
Aberdare, L.	Denham, L. [Teller]	Macleod of Borve, B.
Abinger, L.	Drumalbyn, L.	Mersey, V.
Auckland, L.	Dundee, E.	Monson, L.
Balerno, L.	Eccles, V.	Mowbray and Stourton, L.
Berkeley, B.	Effingham, E.	Northchurch, B.
Brooke of Cumnor, L.	Elles, B	Rankeillour, L.
Brooke of Ystradfellte, B.	Emmet of Amberley, B	Ruthven of Freeland, Ly.
Brougham and Vaux, L.	Ferrier, L	Sandford, L.
Cathcart, E.	Gowrie, E	Sandys, L. [Teller]
Chelwood, L.	Hartwell, L.	Sharples, B.
Colville of Culross, V.	Hornsby-Smith, B.	Sudeley, L.
Colwyn, L.	Inglewood, L.	Wade, L.
Cowley, E.	Killearn, L.	Windlesham, L.
Cranbrook, E.	Lindsey and Abingdon, E.	Young, B.

NOT CONTENTS
Ardwick, L.	Garnsworthy, L. [Teller]	Segal, L.
Birk, B. [Teller]	Goronwy-Roberts, L.	Shepherd, L. (L. Privy Seal)
Blyton, L.	Hale, L.	Slater, L.
Brockway, L.	Hall, V.	Snow, L.
Buckinghamshire, E.	Harris of Greenwich, L.	Strabolgi, L.
Castle, L.	Henderson, L.	Taylor of Mansfield, L.
Champion, L.	Houghton of Sowerby, L.	Wells-Pestell, L.
Davies of Leek, L.	Hughes, L.	Wise, L.
Davies of Penrhys, L.	Jacques, L.	Wootton of Abinger, B.
Elwyn-Jones, L. (L. Chancellor.)	Longford, E.	Wright of Ashton under Lyne, L.
	Melchett, L.
Evans of Hungershall, L.	Popplewell, L.	Wynne-Jones, L.
Gardiner, L.

7.46 p.m.

LORD SANDYS moved Amendment No. 55:

Page 96, line 9, at end insert— ("and if any work in respect of which a service charge is claimed is estimated to cost more than £2,000, there shall be a duty upon the landlord or agent first to discuss it with the tenants' association or if no such body exists or is not wholly independent, then with individual tenants before it is proceeded with (except in cases of emergency) and only after such consultation shall estimates be obtained in accordance with the provisions of this section; and the consultation and expressed views of tenants or their association or both shall be produced to the Court in case of any dispute arising out of the operation of this section.")

The noble Lord said: My Lords, this is consequential upon the last Amendment. I do not know whether at this hour the House would wish me to repeat the argument yet again which was set out in Committee. If your Lordships would like me to do so, I should be happy to move this Amendment without further discussion. I beg to move.

LORD HUGHES

My Lords, all I need to say is that I still like it not.

On Question, Amendment agreed to.

LORD SANDYS moved Amendment No. 56:

Page 96, line 35, at end insert— ("( ) Where in proceedings brought under the foregoing subsection (3) it is proved to the satisfaction of the Court that an association has been formed to represent the tenants one or more of whom are parties to the application and that the membership of such Association comprises not less than 60 per cent. of the tenants eligible to belong thereto the Court may in making any order on the application further declare that the said association shall until further order of the Court be recognised for the purposes of this Act as the tenants' association entitled to exercise the rights conferred by this Act and the term "tenants' association" shall refer to such association so long as it is recognised. ( ) Regulations relating to the formation of such tenants' association may be made by the Secretary of State.")

The noble Lord said: My Lords, this third Amendment in the series on service charges is somewhat different. The noble Lord, Lord Hughes, wrote at length on this subject in regard to eligibility of groups of tenants, and I must say once again that we disagree with his point of view. I am relying here on advice from a sound status and we feel it would be perfectly satisfactory to retain the Amend- ment as it stands. The noble Lord made a considerable point about the question of the proportions and the opportunity which lay in the law of exceeding 60 per cent. or a number less than that amount. The noble Lord sees lions in his path, to which I referred in Committee. Although these lions have threatening silhouettes in the distance, when one comes close to them one realises they are cardboard lions, and I profoundly disagree with the noble Lord, Lord Hughes, despite his blandishments on this subject. I beg to move.

LORD HUGHES

My Lords, I have heard frequent references in the past to cardboard tigers. Cardboard lions do not make this Amendment any more attractive.

On Question, Amendment agreed to.

LORD HUGHES moved Amendment No. 57:

After Clause 114 insert the following new clause:

"Specific performance of landlord's repairing covenants, etc.

.—(1) In any procedings in which a tenant of a dwelling alleges a breach on the part of his landlord of a repairing covenant relating to any part of the premises in which the dwelling is comprised, the court may, in its discretion, order specific performance of that covenant, whether or not the breach relates to a part of the premises let to the tenant and notwithstanding any equitable rule restricting the scope of that remedy, whether on the basis of a lack of mutuality or otherwise,

(2) In this section—

• "landlord". in relation to a tenant, includes any person against whom the tenant has a right to enforce a repairing covenant;
• "repairing covenant" means a covenant to repair, maintain, renew, construct or replace any property;
• "statutory tenant" has the same meaning as in the Rent Act 1968; and
• "tenant" includes a sub-tenant and a statutory tenant but does not include a tenant under a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies, and any reference to the premises let to a tenant means, in relation to a statutory tenant, the premises of which he is the statutory tenant.

(3) This section shall come into operation on the passing of this Act.").

The noble Lord said: My Lords, I beg to move Amendment No. 57. The purpose of this clause is to underline the right of a court to grant to a tenant of a dwelling a decree of specific performance of a landlord's covenant to build, repair, or maintain the dwelling or the premises of which the dwelling forms part, whether or not the tenant has rights over these other parts of the premises.

The court's ability to grant specific performance was shown in the case of Jenne v. Queens Cross Properties, (1973) 3W.L.R. During discussions in the Commons Committee on new clauses put down by Mr. Geoffrey Finsberg and Mr. Bruce Douglas-Mann it became clear that the Committee felt that this power should be enshrined in the Statutes. The effect of the clauses put down would have been to oblige the courts to grant tenants orders for specific performance. These clauses were resisted by the Government as being unnecessary in view of the judgment in the Jenne case, and unacceptable because they would have fettered the court's discretion. However, because of the mood of the Committee, the Minister agreed to consider introducing a clause. This new clause takes up that commitment.

The clause gives the courts a discretionary power to grant an order for specific performance, so that the courts are not fettered and their power to grant relief other than an order for specific performance is not prejudiced. The scope of the clause is limited to dwellings and the definition of "landlord" is widened to include any person whose duty it is to carry out the repairing covenant. I hope that noble Lords opposite will accept that this is a reasonable implementation of the commitment given in another place. I beg to move.

BARONESS YOUNG

My Lords, I should like to thank the noble Lord, Lord Hughes, for his explanation of this Amendment and to say how glad we are that the Government have been able to give effect to the wishes of those Members of another place who originally moved this Amendment.

On Question, Amendment agreed to.

Clause 120 [Short title, citation, commencement and extent]:

LORD GARNSWORTHY moved Amendment No. 58:

Page 102, line 40, after ("V") insert ("VI").

The noble Lord said, My Lords, I beg to move Amendment No. 58 It is purely technical and it secures that Part VI of the Bill, that part of the Bill which contains the new clauses on priority neighbourhoods, will apply in England and Wales only. I ought to explain that the Scottish provisions for areas of housing stress are contained in the Housing (Scotland) Bill. There is no need to detain your Lordships at length upon this. I am sure that the Amendment will commend itself. I beg to move.

On Question, Amendment agreed to.

LORD GARNSWORTHY moved Amendment No. 59:

Page 102, line 41, after ("114") insert ("Specific performance of landlord's repairing covenants, etc.)").

The noble Lord said: My Lords, I beg to move Amendment No. 59. It is consequential to the new clause which has been inserted after Clause 114 and limits that clause again to England and Wales. I beg to move.

On Question, Amendment agreed to.

Schedule 3 [Application of Rent Act 1968 to certain housing association tenancies]:

LORD HUGHES moved Amendments Nos. 60 to 64:

Page 110, line 15, at end insert:

("(lA) In the following provisions of this paragraph "the regulated tenancy" means the regulated tenancy consisting of the protected or statutory tenancy referred to in sub-paragraph (1)(a) above, together with any subsequent statutory tenancy which, when taken with that regulated tenancy, is by virtue of section 7(4) of the Rent Act 1968 treated for the purposes of that Act as constituting one regulated tenancy.")

Page 110, leave out lines 20 and 21 and insert ("the regulated tenancy")

Page 110, line 31, after ("a") insert ("new").

Page 110, line 34, leave out from ("the") to end of line 35 and insert ("regulated tenancy")

Page 110A, line 12, at end insert ("regulated tenancy consisting of or beginning with a").

The noble Lord said: My Lords, I beg to move Amendment No. 60, and, with your Lordships' permission, I wish to move en bloc Amendments Nos. 60, 61, 62, 63 and 64. Paragraph 8 of Schedule 3 was inserted at Committee stage in this House. It provides that in tenancies of housing associations which do not become registered, rent increases are to continue to be phased until the first free registration of a rent or until a new regulated tenancy is granted. It does not cover the situation where a tenancy comes to an end and the occupier stays on as a statutory tenant. These Government Amendments remedy that omission by providing that the phasing of rent increases continues to apply in the same way. I beg to move.

On Ouestion, Amendments agreed to.

LORD HUGHES moved Amendment No. 65: Page 110A, line 20, at end

("8A.—(1) This paragraph shall have effect with respect to the application of Schedule 6 to the 1972 Act (restriction of rent increases) in relation to a regulated tenancy consisting of—

1. (a) a tenancy which becomes a protected tenancy by virtue of section 18(1) of this Act, or
2. (b) a statutory tenancy imposed by virtue of paragraph 5 above,

together with any subsequent statutory tenancy which, when taken with that regulated tenancy, is by virtue of section 7(4) of the Rent Act 1968 treated for the purposes of that Act as constituting one regulated tenancy.

(2) For the purposes of paragraph 1(1)(b) of the said Schedule 6 (application of paragraph 1 to the first registration of rent after completion, during the existence of the regulated tenancy, or certain works), a tenancy falling within sub-paragraph (1)(a) above shall be deemed to have been a regulated tenancy throughout the period when Part VIII of the 1972 Act applied to it.

(3) In the case of a regulated tenancy falling within sub-paragraph (1)(b) above, paragraph 1(1)(b) of the said Schedule 6 shall have effect as if the reference to the completion of works during the existence of the regulated tenancy included a reference to their completion during the period beginning on the day on which Part VIII of the 1972 Act first applied to the tenancy referred to in paragraph 5(1) above and ending on the day on which the regulated tenancy came into existence.

(4) The references in paragraph 3(1) of the said Schedule 6 to notices of increase authorised by the Rent Act 1968 shall include a reference to notices of increase under section 87 of the 1972 Act.")

The noble Lord said: My Lords, I beg to move Amendment No. 65. Clause 18(1) in Schedule 3 to the Bill is directed towards putting the tenancies of housing associations which do not become registered on the same footing, so far as possible, as other private landlord's tenancies. This Amendment removes one small difference of treatment. It relates to the phasing of rent increases following grant-aided improvements to the dwelling to ensure that the tenant can gain a fair share of the benefits of the public funds extended in grant. Schedule 6 to the Housing Finance Act 1972 provides that rent increases for the regulated tenancy to which it applies shall be phased. That restriction upon rent increases is applied by this Amendment to the tenancies of housing associations which do not become registered upon the operative date. Without the Amendment, Schedule 3 to the Bill as drafted would have the effect that while the restrictions on increases in rent after improvements apply to most regulated tenancies of private landlords, they would not apply to a tenancy where grant-aided improvements were completed to a dwelling while it was subject to a housing association tenancy which was regulated under Part VIII of the 1972 Act. My Lords, I beg to move.

BARONESS YOUNG

My Lords, I should like to thank the noble Lord, Lord Hughes, for that explanation. As I understand it, this is bringing housing associations into line with other tenancies that are privately owned. It seems to me to be only a reasonable and sensible Amendment.

On Question, Amendment agreed to.

LORD DENHAM

My Lords, I beg to inform your Lordships that in Division No. 2 the numbers who voted Content were 65 not 66. This makes no difference to the results. The figures are—Contents, 65; Not-Contents, 43.

LORD HUGHES moved Amendment No. 66:

Page 111, line 28, leave out from ("made") to end of the line and insert ("or, where such an order has been made,—

1. (a) during any period while its operation is postponed or its execution is suspended; or
2. (b) after it has been rescinded").

The noble Lord said: My Lords, I beg to move Amendment No. 66. This Amendment corresponds exactly with Amendment No. 47 for England and Wales which was agreed in Committee. At that time it was inadvertently not moved.

On Question, Amendment agreed to.

LORD HUGHES moved Amendments Nos. 67 and 68:

Page 112, line 38, after ("shall") insert (", subject to the provisions of sub-paragraph (2A) of this paragraph,')

Page 113, line 22, at end insert—

("' (2A) In the application, by virtue of subparagraph (2)(c) of this paragraph, of subsection (2) of section 63 of the 1972 Act to the rent of a dwelling-house subject to a statutory tenancy which is deemed to arise under paragraph 11 above, that subsection shall be deemed to have continued to apply throughout the period between the termination of the tenancy referred to in paragraph 11(1)(a) above and the operative date; but nothing in this sub-paragraph shall affect the rent recoverable for that dwelling-house at any time during that period.

(2B) In the case where sub-paragraph (2)(c) of this paragraph applies, and the rent limit therein referred to is the rent limit as determined in accordance with section 63 of the 1972 Act, any notice of increase under section 21(2)(6) of the 1971 Act shall not increase the rent for any statutory period of a tenancy to which this paragraph applies above the rent limit as so determined, and any such notice which purports to increase it further shall have effect to increase it to that limit but no further.").

The noble Lord said: My Lords, with your Lordships' permission I will move Amendments Nos. 67 and 68 together. These Amendments insert certain provisos to sub-paragraph 12(ii)(c) on the lines of the new paragraph 72(4)(b)(5) which was inserted in Part II of the Schedule for England and Wales. They are concerned with the application of Section 63(2) of the Housing (Financial Provisions) (Scotland) Act which provides for the phasing of rent increases in the case of housing association tenancies where a rent is registered and is higher than the previous rent recoverable. I beg to move.

On Question, Amendments agreed to.

LORD GARNSWORTHY moved Amendment No. 69:

After Schedule 3 insert the following new Schedule:

(" Notification procedure

1. Where, by virtue of the principal section, a person is under obligation to notify a local authority of any matter, the obligation shall he fulfilled by furnishing to the local authority a notification in writing containing the information specified in the following provisions of this Schedule.

2.—(1) Every such notification shall contain—

1. (a) the name and address of the person by whom it is furnished;
2. (b) the address of, and any further information necessary to identify, the land to which the notification relates; and
3. (c) the estate or interest in that land which the person by whom the notification is furnished has at the time it is furnished.

(2) The reference to sub-paragraph (1)(a) above to a person's address is a reference to his place of abode or his place of business or, in the case of a company, its registered office.

(3) To the extent that it is capable of being so given, the information required by subparagraph (1)(b) above may be given by reference to a plan accompanying that notification.

3.—(1) A notification given in compliance with subsection (1) or subsection (2) of the principal section shall also specify—

1. (a) whether the tenancy concerned is periodic or for a term certain:
2. (b) the duration of the period or term; and
3. (c) the date on which the tenancy will come to an end (by virtue of the service of the notice to quit or by effluxion of time).

(2) If the landlord considers it appropriate,; he may also, in a notification given in compliance with subsection (1) of the principal section, give his reason for serving the notice to quit.

4. A notification given in compliance with subsection (3) of the principal section shall also specify whether, at the time the notification is furnished, the person furnishing it intends to retain any estate or interest in the land specified in the notification in accordance with paragraph 2(1)(6) above and, if he does, the nature of that estate or interest and the land in which he intends that it should subsist.

5. In this Schedule "the principal section'" means section (Notification of notices to quit and disposals of housing accommodation etc.) of this Act.").

The noble Lord said: My Lords, I spoke to this Amendment when we dealt with Amendment No. 3. I beg to move.

On Question, Amendment agreed to.

Schedule 4 [General improvement areas]:

LORD GARNSWORTHY moved Amendment No. 70: Page 119, line 1, at the beginning insert— ("In subsection (2) of section 40 of that Act (in relation to land in a general improvement area declared by them, the Greater London Council is to be deemed to be the local authority for certain purposes and cetain functions are to be exerciseable by other authorities only after consultation with the Greater London Council)").

The noble Lord said: My Lords, I spoke to Amendment No. 70 when the House dealt with Amendment No. 17. I beg to move.

On Question, Amendment agreed to.

BARONESS YOUNG

I beg to move Amendment No. 710.

Amendment moved—

After Schedule 6 insert the following new Schedule ("Reduction of rateable value in case of certain improvements.

1.—(1) Where the tenant, or any previous tenant, has made or contributed to the cost of an improvement on the premises comprised in the tenancy and the improvement is one to which this Schedule applies, then, if the tenant serves on the landlord a notice in the prescribed form requiring him to agree to a reduction under this Schedule, their rateable value as ascertained for the purposes of subsection (1) of section one of this Act shall be reduced by such amount, if any, as may be agreed or determined in accordance with the following provisions of this Schedule.

(2) This Schedule applies to any improvement made by the execution of works amounting to structural alteration, extension or addition.

2.—(1) The amount of any such reduction may at any time be agreed in writing between the landlord and the tenant.

(2) Where, at the expiration of a period of six weeks from the service of a notice under paragraph 1 of this Schedule any of the following matters has not been agreed in writing between the landlord and the tenant, that is to say,—

1. (a) whether the improvement specified in the notice is an improvement to which this Schedule applies;
2. (b) what works were involved in it;
3. (c) whether the tenant or a previous tenant under the tenancy has made it or contributed to its cost; and
4. (d) what proportion his contribution, if any, bears to the whole cost;

the county court may on the application of the tenant determine that matter, and any such determination shall be final and conclusive.

(3) An application under the last foregoing sub-paragraph must be made within six weeks from the expiration of the period mentioned therein or such longer time as the court may allow.

3.—(1) Where, after the service of a notice under paragraph 1 of this Schedule, it is agreed in writing between the landlord and the tenant or determined by the county court—

1. (a) that the improvement specified in the notice is one to which this Schedule applies, and what works were involved in it. and
2. (b) that the tenant or a previous tenant under the tenanacy has made it or contributed to its cost, and, in the latter case, what proportion his contribution bears to the whole cost, then if, at the expiration of a period of two weeks from the agreement or determination, it has not been agreed in writing between the landlord and the tenant whether any or what reduction is to be made under this Schedule, and the tenant, within four weeks from the expiration of that period, makes an application to the valuation officer for a certificate under the next following sub-paragraph, that question shall be determined in accordance with the certificate unless the landlord and the tenant otherwise agree in writing.

(2) On any such application the valuation officer shall certify—

1. (a) whether or not the improvement has affected the rateable value on the first day of April, nineteen hundred and seventy-three as ascertained for the purposes of subsection (1) of section one of this Act), of the hereditament of which the premises consist or, as the case may be, in which they are wholly ar partly comprised.
2. (b) if it has, the amount by which the rateable value would have been less if the improvement had not been made.