HL Deb 18 March 1975 vol 358 cc646-77

4.45 p.m.

House again in Committee.

Debate resumed on Amendment No. 2.

Lord LYELL

Before we were interrupted on perhaps greater business, I was seeking to clarify one point in the comments made by the noble Lord, Lord Hughes. I think I understood rightly that the noble Lord believed that this Amendment would make some councils understand that it was mandatory to increase rents by £26 in any one year. The noble Lord may be right. But on reading this Amendment, it seeks—and I hope any layman would take it as such— to enable councils to raise an average rent by £26, but no more. If the noble Lord takes the last clause, he will find it is most important when a greater increase is required to balance the housing account. It is only when a greater increase is required, and the councillors decide there is a need to raise rents, that we find guidance that the amount should be £26 as a maximum; but there is absolutely no need at all to raise rents, if the working balance, as we are calling it, is within sight. I wish to clarify in the mind of the noble Lord that there is no mandatory significance in this Amendment.

Lord HUGHES

I indicated that I understood that the motive of the noble Lord, Lord Campbell of Croy, and the support indicated by the noble Baroness, Lady Elliot of Harwood, and, now, the view of the noble Lord, Lord Lyell, were to give guidance to local authorities. As the noble Lord pointed out, this would be particularly applicable where the deficiency on the housing revenue account was such that an increase of £26 would not wipe it out.

The advice which I have been given is that it is easier to express a wish on these matters than to put it into language which carries that wish into law. The effect of the Amendment would be to make it mandatory on every authority, whose accounts would not be balanced by a sum of £26 or less, to impose an in-crease. In fact, that would be contrary to the intention of the Bill, which is to restore freedom to local authorities. It may well be that £26 is a reasonable figure in relation to circumstances. But whether or not it is a reasonable figure two, three, four or five years from now is very difficult to say. It might easily be more; it might less easily be less. But the point is that we are saying that the best way is to let the local authorities decide the circumstances.

If I may anticipate a further point on the rent reviews, the period between them will, of course, be a matter for the local authorities to decide in terms of the Bill. Some may favour a policy of frequent small increases, whereas others may prefer longer intervals, which would almost inevitably mean larger increases. Personally, I hope the second way is not the way in which it is done because that is the path which meets the greatest resistance. I want to make it perfectly clear that at this stage I am merely stating a personal opinion, but it is one which I have ventured already in discussions with various district authorities. I have expressed to them the correct path to follow when they are considering their annual budgets and determining what will be the level of rates for the ensuing year. That is an appropriate time to consider what the level of their rents will be for the ensuing year. If authorities do this, I think it is more likely that a district authority, the greater part of whose expenditure will be on housing, will find this is the right time in which to consider rent proposals. If this is done, then I think we shall almost naturally flow into a pattern where the balance between the ratepayer and the rentpayer will be more evenly held than has been the case in the past.

I shall not cease to urge upon local authorities the desirability of making this part of their financial arrangements. It has the merit that whatever the pattern of increase is, it is obviously easier for people to adjust themselves to these changes than if they are faced with something very much more substantial at intervals of two or three years. They would resent in one instalment something which they would have accepted if it had been divided by two or three over a corresponding period of years. I think that when, very soon, noble Lords opposite see the circular which we are issuing they will find that, while we may have considerable differences in our general approach to the problem, there is not very much difference in the guidance which we should like to give. But we are of the opinion that administrative methods are the right way of giving guidance, and that we should not have to give advice in a Statute, particularly as with the best will in the world it has not been possible to put this advice in a form which would prevent it from being an order. It might be for the convenience of noble Lords opposite if I made arrangements, when the circular is issued, for a copy to be sent to the noble Lord, Lord Campbell of Cray, and if he desires to the noble Lord, Lord Lyell, so that if they are contemplating further action at the next stage they will be able at the earliest moment to consider their attitude.

Lord CAMPBELL of CROY

As my noble friend Lady Elliot of Harwood pointed out, most councillors in Scotland would welcome guidance on this subject. The noble Lord, Lord Hughes, has told us that the Government recognise this fact and that they intend to give it in the form of a circular. The difficulty is that there is no way of making sure that the guidance is followed. We will come back to this subject in the debate on whether the clause shall stand part, when we start inquiring into what the Government think will happen if a local authority simply takes no notice at all of the guidance which it is sent.

We have a chicken and egg situation, because, as I understand it—and this has arisen on previous Bills—the circular of guidance is usually not sent to local authorities until the Bill has been enacted, which is reasonable, because until the Bill has finally received the Royal Assent it cannot be assumed what will be in the Act. So that we shall have to wait, I imagine, until the Bill has completed its passage through Parliament before the circular sees the light of day. I hope it will also take into account other points which we shall be raising in later debates.

I am glad that the noble Lord has already raised this question of the rent review, and I will comment on it now in this debate rather than in a later one. Unless I misunderstood him, he was advocating that the review should take place every year, and this I entirely agree with. I think we shall be very fortunate if every council in Scotland does that, because, as we know, there were some in the past who did not. They are new authorities, but none the less what has happened in the past can be repeated. It is interesting that when the equivalent Bill on rents and subsidies in England and Wales was passing through this House a few weeks ago, and it was suggested that the review should take place every three years, that proposal was rejected by the Government. I certainly accept a review every year, which is a great improvement so far as Scotland is concerned; I only hope it will be carried out. This leads us on into the debate which we shall come to later in this Committee stage. I am sorry that the Government do not feel able to accept this Amendment, because they say that although the words "take into account" appear in it a strict interpretation would make it mandatory in the circumstances visualised. I, therefore, beg leave to with-draw this Amendment.

Amendment, by leave, withdrawn.

4.55 p.m.

Lord HUGHES moved Amendment No. 3:

Page 2, line 13, at end insert (",but subject to the Note at the end of that Part.")

The noble Lord said: I beg to move Amendment No. 3, and I would suggest to the Committee that this is part of a group comprising Amendments Nos. 3, 5, 10, 11, 12, 13, 16 and 17. Six of these Amendments are paving Amendments for No. 16, and the remaining one is consequential. If it should have been the case that the Guinness Book of Records ever cast their eyes upon your Lordships' House, they would have found Amendment No. 16 perhaps worthy of consideration. It certainly is the first time I have ever in this place—and I certainly hope it will be the last—moved an Amendment which runs to 14½ closely printed pages. I hasten to assure your Lordships that it is not nearly so formidable as it looks. In order that I might diminish the consequences for myself, I took the precaution of sending an informatory letter about these Amendments to the noble Lord, Lord Campbell of Croy, on the assumption, which proved correct, that he would be interesting himself in these matters.

The main Amendment, No. 16, inserts a new Schedule 10A in the Housing Act 1974, for reasons which I shall explain to your Lordships shortly. Because of the extent of the further Amendments to the Housing Act 1974 which we are seeking to incorporate in the Bill, Schedule 1 is being split into two, and the miscellaneous Amendments at present in Part III of Schedule 1 will, together with the further Amendments we are now proposing, form a new Schedule 2A. In turn this necessitates purely consequential drafting Amendments to Clauses 1, 3, 11 and 13.

The main Amendment covers two separate points. The first and major part of the Amendment re-enacts Sections 109 to 116 and Schedule 10 to the Housing Act 1974 so far as they relate to Scotland. These provisions are concerned with the difficulties which can arise where local authorities are under an obligation to demolish property because of action they have taken under Housing Act powers. They deal with two separate types of case: first, where an authority is under a duty to demolish a building which has subsequently been listed as of special architectural or historic interest; and, secondly, where an authority changes its mind and wishes to rehabilitate houses which it had originally decided to demolish. These provisions were welcomed by all sides of this House when they were incorporated in the 1974 Housing Bill on Report. Some noble Lords may remember that the provisions were introduced into the 1974 Bill by your Lordships at a very late stage in the Bill's proceedings. Unfortunately, perhaps because of the haste with which they were drafted and the complexities of the slum clearance legislation, it has been found that there are certain ambiguities and errors in the present provisions which should be corrected.

The necessary Amendments were made in the Housing Rents and Subsidies Act 1975, again at Report stage in your Lordships' House, but since that Act applies only to England and Wales those Amendments cannot apply to Scotland, where the ambiguities and errors therefore remain. The present sections as applied to Scotland are cumbersome and difficult to follow, and the necessary Amendments to remove these ambiguities and errors would make them even more so. We have therefore decided that the sensible course is to re-enact as Scottish provisions the sections and Schedules, as amended, and this is what we are now doing by the Amendments to Schedule 1 and the introduction of the new Schedule 2A. The effect is that the provisions of Sections 109 to 116 and Schedule 10 of the Housing Act 1974 will be re-enacted for Scotland as Schedule 10A to that Act. The re-enactment, like the original provisions, is lengthy and detailed. This is inevitable because of the complexities of the procedures, but I think that the provisions will now be much easier for local authorities and others concerned to follow.

I think that a reading of the new Schedule makes it very clear how complicated the situation is, and no one could say that it is one which any layman would understand in its entirety at its first reading.

The point is that it is more convenient and easier for those who have to operate the legislation to do it in this form, than if we were to make the situation worse by amending further the 1974 Act. So, while it perhaps makes a little more work for the printers and for your Lordships, it will make things easier for those who have to operate the legislation. I ought to assure your Lordships that the provisions are essentially unchanged. I asked my advisers why the word "essentially" was included, because to my simple mind to say that something was essentially unchanged meant that in some degree it was changed. The reasons for including that word are twofold. One is that there are two minor procedural changes which are taking place—and I will refer to these shortly—and the other is that if one were to make a comparison between the provisions in the existing Act and what is being re-enacted in the new Schedule, one would find that in some places the words are not exactly the same. Where it has been possible we have used words which conform to the Scottish law on the subject, rather than words which were more acceptable when they had to apply both North and South of the Border. But I assure your Lordships that where the language is slightly different it does not in any way change the effect, so the legislation remains exactly as it is.

I should mention the two minor procedural points in paragraph 10 of the new Schedule, which relates to the serv- ing of notices on the making of the re-habilitation order. The first change is that these notices must now be served not only on those directly affected, but also on all others with an interest in other property in any clearance area, or housing treatment area, to which a rehabilitation order relates. The second is that my right honourable friend the Secretary of State has been given power to dispense with the service of notices in any particular case. Such dispensation will not be given lightly, but one can envisage circumstances where the requirement to serve notice on any person who received notice of the making of the earlier compulsory purchase order would be unduly onerous, and, indeed, unnecessary.

For example, one could have a very large clearance area, or a compulsory purchase order covering several acres, with a rehabilitation order covering a single tenement block of houses on the edge of the area. It is quite clear that the properties on the far side of the area covered by the compulsory purchase order, some hundreds of yards distant from the tenement to be rehabilitated, would be in no way affected by the proposed rehabilitation, and in such a case the authority should be relieved of the time and trouble of serving unnecessary notices.

The re-enactment excludes the original Section 113 which was never brought into effect and is now no longer necessary. The new provisions require my right honourable friend the Secretary of State to prescribe certain forms. Because of the procedural difficulties to which I have referred, no forms have yet been pre-scribed. Amendments made in the course of re-enactment will enable the necessary forms to be prescribed and will allow local authorities to use these powers if they wish to do so. The last part of the Amendment rectifies an omission in the Housing Act 1974; a consequential Amendment which should have been made when Section 17(4) was amended. I beg to move.

Lord CAMPBELL of CROY

I echo the sentiments of the noble Lord, Lord Hughes, when he says that he hopes he will never have to introduce so many pages of Amendments again in your Lordships' House. When I discovered only yesterday that 19 printed pages of Government Amendments had just been circulated, I also felt that some of your Lordships would be alarmed about the limited time available in which to consider them. The noble Lord, Lord Hughes, was good enough to write to me, although that was not until Friday, when I was in the North of Scotland. Therefore, his letter, with the Amendments, did not reach me until yesterday. It is no good my making a forwarding arrangement to the North of Scotland, because anything that leaves here on a Thursday night or a Friday does not reach me before I leave home at 6 a.m. on a Monday morning to board the 7 a.m. plane to London. Mail is not delivered on Saturday. So many of us are in the position where we could not possibly consult interested bodies outside this House about this 14-page new Schedule.

I accept entirely, the noble Lord's assurance that this is simply a re-enactment to remedy defects in earlier legislation in a convenient way for those who have to operate it later and that in essence there is no new material introduced. I think "in essence" are the words rather than the word "essential". For my part, I do not dissent from the two procedural points which the noble Lord has described as being new, but for the moment I must reserve my position because there has been no opportunity for anybody, who might be affected by them, to comment. I must reserve my position in case there is need to raise questions about them at the Report stage in this House, or, perhaps, in another place later, although the opportunities in another place will be limited.

I should like to raise a point about Amendment No. 12 which, if I heard correctly, is one of those being discussed. I have no objection to the related Amendments to Amendment No. 16 being discussed. I do not wish to raise a point of substance, but I have an important constitutional point on Amendment No. 12. By that Amendment, the Bill is being extended on certain points to cover England and Wales. This is a Scottish Bill, but the device is being used to extend it to relate in certain matters to England and Wales. When the Bill was in another place it must have been certified by the Speaker as being a wholly Scottish Bill, with the result that it was referred to a Scottish Committee there, upon which no English or Welsh Members sat. There is no opportunity in another place for English or Welsh Members to have a Committee stage on a point affecting England and Wales. Their only opportunity arises if this House decides to send a Message to the other place with any Amendments.

I should like to ask the noble Lord whether there are any precedents for ex-tending the Bill—I recognise that these may be fairly minor points—to England and Wales by an Amendment in this House after it has already been through its stages in the other place, including being certified as a wholly Scottish Bill. I think it is an important constitutional point and we ought to know whether this is a correct procedure. I would certainly wish it to be brought to the attention of Members of the other place who represent England and Wales.

On the main Amendment, No. 16 in this group, I accept that the Government are attempting to re-enact for the convenience of all those who are going to have to operate the system, particularly the rehabilitation orders, what was found to be less satisfactory. On this very short notice we have to accept from the Minister that he is not introducing any-thing new which we would find controversial.

Lord HUGHES

I am grateful for the fact that the noble Lord deliberately extended his remarks to enable me to reply. The position is that this does not, as I understand, raise any conflict with another place. The purpose of Amendment No. 12, which he rightly assumed I associated with the main Amendment No. 16, is to exclude England and Wales from the operation of the new Schedules which we are putting in. Therefore it remains a purely Scottish Bill, in that we are amending an Act which applies to England and Wales for Scottish purposes. The effect of Amendment No. 12 is not to apply to England and Wales any of the things which we are doing for Scotland, so I do not anticipate that this will cause any difficulty in another place. If I should be wrong on that I have no doubt I will hear about it in due course.

Lord CAMPBELL of CROY

The noble Lord might like to have a little more time on this question. If he is not briefed on it, I do not expect him to try to answer straight away because it is a constitutional, and not an easy, point. Amendment No. 12 is not related to Schedules to other Acts; it is an Amendment to Clause 13 of this Bill, the clause stating that the Bill extends only to Scotland. The Amendment says, "With the exception of this section", which is at present one of the clauses, "and section 11 of this Act …" and then brings in England and Wales. I should like to accept what the noble Lord has just said but at first sight I find that difficult. I am perfectly ready to wait for a later stage, if that would be a more convenient time for him to give us a more considered explanation.

Lord HUGHES

I have just received another brief. Basically the position is as I have stated it. As I said in explaining the Amendment, we are in fact proposing Amendments which have already been accepted in the main Bill for England and Wales. We are re-enacting these in a purely Scottish section. Obviously, as the noble Lord has raised the question, I must take it up with my right honourable friend to ensure that we are not stoking up any difficulties for him when the Bill goes back to another place. I have a suspicion that when the Bill returns to another place with this mass of Amendments they will not recognise it as being their Bill at all, so obviously we do not want to make any unnecessary difficulties. I will certainly take up the point that the noble Lord, Lord Campbell of Croy, has raised, and perhaps it would be his wish that when it has been considered I may write and let him know the position.

Baroness ELLIOT of HARWOOD

I have tried to read this Schedule but, being only a Back-Bencher, I have not had the opportunity of reading the letter which the noble Lord, Lord Hughes, has sent to the noble Lord, Lord Campbell of Croy. The matter is quite incomprehensible to any ordinary person who knows anything about Scottish local government —and I think I know a certain amount about it. When the noble Lord says that it is going to make things easier for those who are concerned with housing operations in Scotland, I question that very much. I may be quite wrong; I do not know. As the noble Lord knows, a very controversial matter in connection with housing, is the question of compulsory purchase, whether of houses or of land. Does Amendment No. 16, to which he has referred—and which he rightly said covers eight or nine pages—do anything about compulsory purchase? I see that it allows the alternative, either to agree to demolish or to change your mind and not demolish. I should have liked to hear the noble Lord make a Second Reading speech on this Amendment alone. Those of us who are involved in local government are, on this occasion, completely flummoxed by such a vast Schedule with apparently nothing but references to other Acts and things which have been done in the past or are likely to be done in the future. It is such a muddle that I wonder whether it can possibly be easier for those who are trying to administer local government.

Lord HUGHES

If the noble Baroness thinks that the new clause is difficult to understand I would suggest that if she has two or three days on her hands she should look at Sections 109 to 116 in the former Act and the two Schedules referred to, and take the Amendments which were made for England and Wales and apply them to these sections. I think she will discover that by comparison this new complicated Schedule is a child's guide to legislation. That is about as far as I can take the question of complexity or simplicity.

On the matter of compulsory purchase, as we are just re-enacting legislation which is already on the Statute Book the position in relation to a compulsory purchase order does not change. In the particular part to which the noble Baroness has referred we are enabling an authority which was going to demolish a house to change its mind and rehabilitate it. While it does not alter the compulsory purchase procedure in any way, it makes it possible for an authority to revoke a compulsory purchase order which was already made because it was going to demolish the house and which would not be necessary if the house was going to be rehabilitated. It might in fact be rehabilitated by its existing owner. While we are not altering the law in relation to compulsory purchase, we are making it possible for the circum-stances in relation to a compulsory purchase order to be changed if it is shown that it should no longer be necessary because the authority has changed its mind. The position as it stands is that once an authority has made a compulsory purchase order because of a decision to demolish, it can change its mind even though the circumstances have changed which make it clear that the original decision was wrong. We want to make it possible for a second decision to emerge.

On Question, Amendment agreed to.

5.20 p.m.

On Question, Whether Clause 1, as amended, shall stand part of the Bill?

Lord CAMPBELL of CROY

As I indicated earlier, this clause raises the whole question of what is a reasonable rent, because the wording leaves it to local authorities to decide in the light of circumstances which they choose to take into account. It also raises the question of reviewing from time to time, but the noble Lord, Lord Hughes, gave what was from our point of view a satisfactory answer about what he thinks is the right time for reviews; that is, once a year. I would agree with that, provided it happens. The trouble is that there is nothing in the clause to bring it home to a wayward or laggard local authority, which might not have reviewed its rents for, say, four years or more, that it ought to review them.

As regards reasonable rents, how are these to be judged? Have the Government in mind some comparison with other expenditure by a household, or possibly a percentage of average earnings in Scotland? We must remember that we are not dealing with the less well-off tenants, because the rent rebate scheme ensures that no family in Scotland needs to pay a higher rent than it can afford. That situation was brought about by our 1972 Act which introduced the rebate scheme, so we are dealing with the better-off tenants and the question of what should be the standard rent.

In the Abstract of Regional Statistics some figures are given. Some of these have been obtained by sample surveys, but they are none the less reliable guidance from the Central Statistical Office. If the Government were thinking in terms of a comparison with expenditure by households, would they, for example, take into account the figures given for expenditure on tobacco and alcohol? It is interesting to look at the year 1972 on which, for Scotland, it says that the average amount spent by the average house hold on tobacco was £1.72 and on alcohol £1.65. The average standard rent towards the end of that period—in November 1972—was £1.82; that is to say, the combined expenditure on tobacco and alcohol of the average family in Scotland was nearly twice as much as the standard rent. I think that noble Lords can come to their own conclusions on whether this is the kind of factor which ought to be taken into account when a council considers what is reasonable.

What will the Government be putting into the circular which the noble Lord, Lord Hughes, said would be going out? Is this kind of index of expenditure to be considered, or are there other indices which should be considered? I am glad that the noble Lord said in an earlier debate that the rent rebate scheme which was to be introduced was a very good one, and that we need not worry about that. We agree that provided the rebate scheme is properly operated there should be no question of hardship. It is simply a question of standard rents and of what should be taken into account as criteria. In putting this forward, I am assuming that the housing in question is in a good state and I am not considering substandard housing. In our debate on Second Reading, I mentioned that I understood that there were over 1,000 local authority houses in Glasgow which were empty. This has been stated by a Glasgow Labour Member of Parliament as being the situation in November and the noble Lord, Lord Hughes, gave us another figure of about 250. I understand that the apparent discrepancy results from the fact that 250 are available for letting, but that many others are impossible to let because they are not wanted owing to their state. Apparently, the total comes to about 1,000 or more, or did so in November. As I said, that was stated by a Glasgow Member of Parliament and was not contradicted in the other place.

Lord HUGHES

The figures which I gave were more up to date, and in the interval many of the houses which were not wanted in November have been let. This is very largely because of the changed circumstances in relation to the possibility of house ownership.

Lord CAMPBELL of CROY

I am glad to hear that. That is good news, because it has been one of the problems for local authorities and central government that there has been such a high proportion of houses in certain areas which were apparently unlettable. It helps me with my point that what we are considering for a standard rent is a house in a good state and not one of those houses which, unfortunately, have in some cases been the targets of vandalism. Those are not houses which could be offered by a local authority for a standard rent.

Then I come to another point. It is sometimes stated, and certainly was when the 1972 Act was first brought into effect, that people ought not to be asked to pay certain rents because of high unemployment in the area. That was of course a completely false argument, because the unemployed were covered by the rent rebate scheme. In Clydebank, in regard to which this was stated and where there was such high unemployment at the time, the unemployed were, on the whole, paying less rent when the 1972 Act came into force than they had been paying earlier, because a proper rebate scheme had been introduced for the first time. So, again, this question of the criteria for a reason-able rent ought no longer to take into account the question of whether there is unemployment or some similar situation in the area, provided the rebate scheme caters for that, as it should, and provided it is being carried out in the way the noble Lord, Lord Hughes, commended just now.

Lastly, may I ask what is to happen if a local authority is deemed by the Government not to be carrying out its duty under the clause? What would happen if it had failed to carry out any review of rents for some time and had made no adjustment; and if, clearly, the rents were intolerable from the point of view of the ratepayers who had to make up the difference? Are we going back to the system of an inquiry appointed by the Secretary of State for Scotland? If the inquiry found the council to be at fault, that would leave him to decide whether or not to make a surcharge. I remember that situation back in the early 1960s. It is not a very good system. It is exceedingly difficult for an inquiry to decide whether or not the local authority had carried out its duties properly. Without guidance under the clause, and without criteria laid down by the Government both as to what is a reasonable rent and as to when a local authority is not carrying out its duty under the clause, a local authority will be in great difficulty. I ask for my own information whether, in the event of a local authority clearly not carrying out the purpose of the clause, the Government contemplate going back to the system of an inquiry and then a report to the Secretary of State. This is a very important clause, and I believe that it is the basic clause in the whole Bill. So I hope that the Committee will not mind my having taken a few minutes to put forward these important points arising from the Bill.

Lord HUGHES

The noble Lord has put a number of points in connection with the way in which the new rent policy is to operate, and has introduced a fascinating range of possibilities as to how a reasonable rent might be determined. I was interested to hear him say that the Amendments which are down apply only to houses which are properly up to standard. So far as I recall, he made no such distinction in regard to the 1972 Act because the mandatory £26 had to apply to all the houses in a local authority's housing revenue account, whether in a good, bad or indifferent state. I see the noble Lord, Lord Sandford, shaking his head in dissent, but he will remember that we are talking about the Scottish measure and that attention has already been drawn to the fact that the Scottish one is better than the English one.

Lord CAMPBELL of CROY

The noble Lord seems to have misunderstood me. The point about the 1972 Act is that it was an average and local authorities could charge a higher rent for superior houses and a much lower rent for houses which were less good. The £26 was an average and every house was not tied to that figure. We had a limit of £39 for any single house, but we shall come to that when we discuss the next Amendment. The noble Lord has misunderstood the position because, looking at local authority housing at that time, there was not, as we saw it, any authority which had a majority of houses which were in such a bad state as to have affected the £26 average.

5.32 p.m.

Lord HUGHES

No, I did not misunderstand and I pointed out that the £26 mandatory increase was an average. In so far as the noble Lord went out of his way when referring to the Amendment to except the position of the substandard house or the house which was in a poor state of repair, through vandalism or anything else, in the 1972 Act these houses had to be taken into account in determining the average, and because of their state they were diminished. The effect of maintaining a mandatory £26 average meant that the rents of houses had to be increased beyond what would be reasonable, simply because other houses were in a bad state. This is one reason why it is better to leave the determination of rent to the local authority, who know the circumstances. Given the will of the then Government to legislate along these lines, it would have been quite impossible for them to devise a method of saying, " What proportion of houses in a particular area will be in this state, how can we take account of this, and will this, perhaps, require an authority to have an average of £24 or £23 rather than £26? " That would have been an impossibility and it is one of the defects of legislating along these lines.

I come to the noble Lord's main point of how we shall determine a reasonable rent. He offered various suggestions, such as making a comparison between what the average family in Scotland spends on tobacco and alcohol. I wonder—because the noble Lord has never revealed his inner thoughts on the matter —which of these criteria he depended on and to what extent, when he found the figure of £26, apart from the fact that it was the figure adopted South of the Border. He might tell us what factors the Government as a whole took into account in determining the figure of £26. Certainly I should be happy if this became an element—not in determining rents because I am an owner-occupier and therefore do not pay rent— in relation to the payment of rates; for example, if the suggestion was that these items should be a percentage of what one spent on tobacco or alcohol. I should get off very lightly, being a non-smoker and almost a tee-totaller, but I should hate it if what I had to pay in one direction was deter-mined by what somebody else spent on tobacco and alcohol. I hope that we shall not import into local rent-fixing the argument that those who do not smoke should pay a lower rent than those who do.

An obvious example as to the way in which it will be determined whether or not the local authority is fixing a reasonable rent is the way in which it holds the balance between the amount of money that it is taking in rent and the amount it is taking in rates. I think there is an increasing recognition on the part even of existing authorities—and I believe that it will certainly be the position of the new authorities—that they should fix a reasonable rent. The advantage of doing it at the time when they are doing their annual budgets is that they can see quite clearly then exactly what the consequences of action or no action on rents will be on the rating situation. Thus, I do not think that there is any formula for determining what a rate of increase should be for Scotland as a whole. I think, however, that an acceptable formula is that the local authority should not be loading too much at one time on one side or the other.

That applies equally to fixing too low a rent and to fixing too high a rent, if the consequence is fixing too low a rate or too high a rate. This brings me to the noble Lord's final point: what do we do if the local authority pays no attention, does not review rents and there-fore does not implement this measure? I confess that I should prefer to cross that bridge if we ever meet it. But I confirm that we should, indeed, if less formal pressures did not produce the desired results, be back to the position of local public inquiries into rents. We must keep this in perspective. We must remember that, despite all the criticisms of the previous local authorities, between 1958 and 1971, when there were 234 local authorities with housing powers, it was necessary to hold only four local inquiries. That is not an unsatisfactory position and I am certain that there are other fields of our activities where, if the proportion was as good as that, we should be very much happier. I am quite certain that what I am saying will not be a satisfactory answer to the noble Lord, but I am satisfied in my own mind that, at the end of the day, the result will be one which is capable of defence.

Earlier in our proceedings the noble Earl, Lord Cromartie, indicated that the new authority of which he is chairman, and which is a housing authority, had reviewed its rents and had decided what its policy is to be. Perhaps the noble Earl would like to give a practical indication of how his authority set about doing that, what it has considered a reasonable rent, what it has done in the matter and whether it took such things as the incidence of smoking or "boozing" into consideration in the fixing of rents?

The Earl of CROMARTIE

The noble Lord, Lord Hughes, will realise that the new district council could not yet have done anything, because it is not a statutory body until 16th May. It is still the old county council. We have a problem which does not affect many parts of Scotland, in that we have areas in which houses can bring in probably £300 to £400 a week, because we are an oil area. I do not think that we in Ross and Cromarty would care to take into consideration such matters as the number of bottles of whisky consumed by one family as compared with another. Goodness knows where we should end up if we started doing that! We in the oil areas have considerations which do not apply to many other parts of Scotland. This is a big industry and a great deal of money is involved. As for my district council, the rents have not been fixed and we are carrying on with the rents presently being charged by the county council.

Lord HUGHES

I am sorry, I must have misunderstood the noble Earl. I thought he said that the authority had decided. I know that some authorities have already decided what their policy will be in certain directions when they assume Office; after all, they will be the ones who will have to produce the budget for the ensuing year. I am sorry that—

The Earl of CROMARTIE

The noble Lord is right up to a point. We talked about it quite a lot, but we have not yet actually come down on any considerable alterations, although we may well do so.

Clause 1, as amended, agreed to.

Clause 2 [Limitation on increases in standard rents of individual houses]:

5.40 p.m.

Lord CAMPBELL of CROY moved Amendment No. 4:

Page 2, line 30 at end insert— (" ( ) A local authority shall not increase the income receivable from the standard rents of ail the houses to which their housing revenue account relates so that the average rent increase for those houses is more than £26 in any period of 12 months.")

The noble Lord said: In Clause 2 the Government have reintroduced what was in the 1972 Act, in placing a limit of £39 on the increase in rent to be made for any individual local authority house. But in the 1972 Act there was also the limit—which we were discussing just now —to the average increase. A local authority could not increase rents as a whole in such a way that the average would be more than £26. In theory under this Bill, if a local authority were conscientious and enthusiastic, it could put up the rents of all its houses by £39—a greater increase than was possible under our 1972 Act. We believe that one of the means of instilling confidence among tenants— who, as we know, are easily alarmed at the thought of rent increases, particularly if there are scare stories, as there were in 1972—is to ensure that any increases are gradual, that they should be made by gradual steps each year. This is fair as between one area and another. A conscientious local authority might be so carried away as to put up all the rents by £39 under this clause, whereas another one, as we pointed out earlier, may make no change at all, even though it was further in the " red" in its housing revenue account than the first authority. Therefore I hope that this Amendment —if not the others—commends itself to the Government. I beg to move.

Lord HUGHES

The noble Lord, Lord Campbell of Croy, has undoubtedly put me in a very difficult position on this Amendment, which is not the sort of Amendment one customarily gets from the Opposition Front Bench in regard to matters of rent. In the past there has been a much greater enthusiasm for putting rents up rather than for putting them down—

Several Noble Lords: Oh!

Lord HUGHES

I am talking about the Front Bench opposite and the noble Lord, if I may say so, is not in so good a position as I am to determine what were the views of the Front Bench of which he has so recently become an occupant. It may not necessarily be his own view, but he has been at great pains to. point out how differently he did things in the 1972 Act from what was done in the other Housing Act.

Clause 2 of the Bill is essentially part of the counter-inflationary machinery. It is a long-stop with an element of flexibility about it; and this, as I have emphasised more than once, is what was so markedly absent from the 1972 Act. Apart from anything else, the Amendment is misplaced, because it could not properly be applied as an Amendment to Clause 2 which deals with the rent of individual houses. We could not, there-fore, import into that clause an Amendment which affected the rent of all houses. The noble Lord will undoubtedly have to withdraw the Amendment because, if nothing else, it is in the wrong place. However, I will certainly take the opportunity of drawing the attention of my right honourable friend to the effect of this Amendment, and make quite certain that I have his views on whether or not this is something which would be generally consistent with Government policy. We thought it desirable to make certain, as part of counter-inflationary procedure, that nobody should be subjected to an unduly large increase, and therefore the limit of £39, similar to the previous limit, is made for an individual house. Whether as a counter-inflationary measure it is necessary to impose an over-all limit on what the local authority might do is a different matter altogether. It comes close, not to imposing a rent freeze permanently, but to doing something of the same order, and the rent freeze which was imposed and which comes to an end on 15th May this year was for limited duration.

One possible objection would be if the counter-inflationary measures were not successful. The £26 limit overall might then turn out to be a guaranteed method of ensuring that the burden on the ratepayers should be increased disproportionately, which would make it impossible for the authority to hold a fair balance between the rent payer and the ratepayer. While it may be possible, if we do this, to impose a limit on what the tenant should have to pay overall— and I accept that we are effectively doing that at the £39 figure—we cannot impose any limit on what is then going to be asked from the ratepayer. I certainly should want to look very closely at the principle which the noble Lord has put forward in this Amendment. I have no doubt, having started by saying that the Amendment is in the wrong place, that if he withdraws it at this stage we will see something like it again at Report stage, at which time I would be in a better position to give the Government's considered view on the principle of the Amendment.

Lord CAMPBELL of CROY

I am glad the noble Lord said that the Government will consider this point, but I must draw attention to the very strange attitude which the noble Lord has taken to this Amendment which states that no local authority in Scotland can put up its standard rent each year in such a way that the average would go up by more than £26. The noble Lord is saying that this could be some form of rent freeze, but that is the maximum under the 1972 Act by which any local authority could put up rents. That is what caused all the fuss. It is this amount of £26 which caused several local authorities to decide not to carry out the Act when it first came into being. It caused the Clyde-bank fuss and the £20,000 fine in the courts. It is a very strange change that the noble Lord should refer to this as a freeze when it is the maximum amount permitted in the 1972 Act.

Thus I am astonished, but it confirms what I said earlier. Here is the mythology about the 1972 Act now being exposed. There is this talk about freezing rents because they could be put up by only an average of £26 a year, which is the maximum amount allowed under our 1972 Act. The Amendment may be in the wrong place, but I put it into this clause because I wanted to point out that under this clause the maximum increase has been raised to £39, if any local authority wanted to do it; whereas under the 1972 Act, which still applies this day, local authorities cannot put up their rents, except by a gradual step, more than an average of £26.

If that is going to cause a rent freeze, it is very new language. I only wish that the noble Lord had been saying that two and a half years ago, because it might then have helped us a great deal with the troubles when some local authorities were regarding this as if it were iniquitous in terms of the amount of the rise permitted; some were going around giving the 1972 Act a blackened name—apparently, now, we find, quite unnecessarily. As the Government are to look at this matter again, and as I should like to reserve the position offered to me to raise it again at a later stage—

Lord HUGHES

Before the noble Lord concludes, may I say that his remarks emphasise the extent of the complete difference of approach on this matter between the previous Government and the present Government. We have taken the line that the local authority is the best judge of its circumstances. If we do that, we must accept that there will be cases where a local authority will find it perfectly proper to increase its rents by a figure which might exceed the average of £26. What we felt was that in an inflationary situation there could not be total freedom in this regard and that we ought to impose an upper limit, not in rent control procedure but as a counter-inflationary measure.

It is the wrong thinking in relation to local authorities which enables the noble Lord to make the comments he has just made. It assumes that every local authority has a problem similar to that of another authority; and that therefore every local authority would be compelled to raise its annual rents by £26 every year on average until it reached the point at which its housing revenue account was in balance. What may be a totally acceptable figure of £26 or £30 or £35 in one authority may be totally unacceptable in another. Even a figure of £20 might be unreasonable in another authority. It is to enable authorities to consider what is acceptable in their area in regard to their circumstances that we restore freedom.

The only restriction placed on the powers of local authorities is to set this upper limit of £39 per house. Within that limit any sensible reading of the Bill must lead to the conclusion that it permits some authorities—if they are so inclined and think it right—to increase the rent by more than £26 on average. By the same token, it permits other authorities to fix lower levels if they think that is right. What I said was that it was almost getting back to a permanent rent freeze; in that it was being said to an authority—even when the circumstances might justify something bigger—" in no circumstances are you to exercise your judgment as to what is the proper balance between rentpayer and ratepayer." All the arguments on Second Reading and at this stage have been about the injustice which might be perpetrated on the ratepayers. This Amendment, whether it be a good or a bad one, certainly imports the provision that the tenant is to be protected at a particular level irrespective of the consequences to the ratepayer.

The noble Lord cannot have it both ways. He cannot argue the tremendous injustice which a local authority may be doing to its ratepayers by fixing the rents too low, and then saying in regard to another Amendment, "Ah, yes, but we will perpetrate a possible injustice to the ratepayers by compelling an average rent increase which may be less than you consider is reasonable in your circumstances." But it is an interesting point. When I said that the Government would have to look at this, I did not necessarily imply that we were going to accept it; but it seemed to me to be a completely new concept of control which was being suggested and which was going much further than we do in the Bill. I certainly feel that I am under an obligation to draw to the attention of my right honourable friend the Secretary of State the fact that if we were to say that no local authority was to increase its rents by more than £26 a year on average, we should look at whether or not it was something that we wished to do.

Lord CAMPBELL of CROY

I am grateful to the noble Lord for that long intervention before my closing words. But I can assure him that I have never heard it suggested that the maximum average increase in rents now permitted under the 1972 Act was unfair to the rate-payers of Scotland. That is a new concept that he has put forward. But what he is suggesting could be unfair as between tenants in different parts of Scot-land. The important point was when he said that something might be "unacceptable" to some councils, and then went on to say that it might be considered "unreasonable". In 1972 the old Clyde-bank Council found the £26 maximum unacceptable. But I think that the ratepayers of Clydebank, to a man, did not think it was unreasonable.

My point is that, because of the way the Bill is now drafted, a local authority in one part of Scotland could put up all its rents by £39—a great deal more than it can now under the 1972 Act—while another authority which probably ought to put up its rents more, because it is, as a county, more out of balance, need not put up rents at all and might even put them down. It is a fact that reactions vary in different parts of Scotland, and the attitudes of councils cause unfairness not only to ratepayers but to tenants. As for the freedom of the local authorities, which is the one argument that the noble Lord raises to explain what he is doing, I must point out that between 1972 and 1974 we relaxed or abolished about 300 controls over local authorities in Scotland. This was done largely as part of the Local Government Reorganisation Bill, but there we did away with the previous requirement for local authorities to obtain approval for financial expenditure, and many other things, from central Government; so that our record of setting the local authorities free is there to be seen by anybody.

In this matter of housing, as we argued on earlier Amendments, it is helpful to many local authorities to be given a yardstick and a guide from central Government as to what to do. In order to be fair to tenants in different parts of Scotland, we believe that there should be these gradual increases which people can see beforehand will not be over-whelming, and which can be carried out by local authorities where necessary. As I indicated I was about to do before the noble Lord intervened, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Amendments relating to housing subsidies]:

5.58 p.m.

Lord HUGHES

I have already spoken to Amendment No. 5. I beg to move.

Amendment moved—

Page 2, line 36, at end insert (", but subject to the Note at the end of that Part.")—(Lord Hughes.)

On Question, Amendment agreed to.

Clause 3, as amended, agreed to. Clauses 4 to 7 agreed to.

Clause 8 [Termination of decontrol of controlled tenancies by reference to rateable value etc.]:

Lord HUGHES moved Amendment No. 6:

Page 6, leave out lines 13 to 17 and insert ("sections 34, 35 and 38 of the 1972 Act shall cease to have effect.").

The noble Lord said: I beg to move Amendment No. 6 and to associate with it Amendment No. 20 to Schedule 3. These are tidying-up Amendments. As drafted, Clause 8 provides for the repeal of Section 36(1)(a) of the 1972 Act. This takes general provisions about the con-version of controlled tenancies into regulated tenancies and relates them to con-trolled tenancies converted by means of the automatic decontrol provisions of Section 34 of the 1972 Act. Even though Section 34 of the 1972 Act is to be repealed, we are advised that it is inappropriate to repeal this provision. The effect of these Amendments is simply to leave Section 36(1) (a) in the Act. I beg to move.

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

6 p.m.

Clause 9 [Increases of rent under con-trolled tenancy permitted towards cost of repairs]:

Lord HUGHES moved Amendment No. 7:

Page 7, line 12, leave out from ("accruing") to end of line 14 and insert ("to the dwelling-house and to the other premises from the carrying out of the repairs.")

The noble Lord said: This is a purely drafting Amendment, the object of which is to make it clearer that where repairs are carried out to the benefit of a dwelling-house—for example, a flat in a tenement which is let on a controlled tenancy—then, even though repairs are not carried out to the dwelling-house itself, the landlord shall be entitled to recover 12½ per cent. of a proportion of the cost of repairs. The proportion is to be determined according to the extent to which the repairs benefit the dwelling-house concerned. This is the usual provision, that where something is being done which is to the common benefit of all they should pay a due proportion. As the Bill stands, it is not clear that this is permitted to be done in the proper and customary way. I beg to move.

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Lord HUGHES moved Amendment No. 8:

After Clause 9 insert the following new clause: Eligibility for housing association grant and revenue deficit grant. (" . The fact that a housing association is a society registered under the Industrial and Provident Societies Act 1965 and that its rules restrict membership to persons who are tenants or prospective tenants of the association and preclude the grant or assignation of tenancies to persons other than members shall not render it ineligible for housing association grant under section 29 of the Housing Act 1974 or for revenue deficit grant under section 32 of that Act.")

The noble Lord said: I should like to associate with this Amendment, Amendment No. 22 relating to the Title of the Bill. The effect of the new clause is to lift certain restrictions imposed by Sections 29 and 32 of the Housing Act 1974 on the payment of grants to housing associations registered with the Housing Corporation. These restrictions prevent grants being paid to those associations (defined in Section 18(1)(b) of the Act) which have full mutuality between tenants and members; that is to say, where the rules restrict membership to people who are tenants or prospective tenants of the association and preclude the grant or assignation of tenancies to people other than members. A similar Amendment to these sections of the Housing Act 1974 has already been made for England and Wales by means of Section 6 of the Housing Rents and Subsidies Act. I beg to move.

On Question, Amendment agreed to.

Lord HUGHES moved Amendment No. 9: Insert the following new clause—

Continuation of right to recover excess rent, etc., under Counter-Inflation Orders

(" . —(1) Article 5 of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) Order 1974 (recovery of excess rent) shall continue to have effect, for the purposes of that Order and of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) No. 2 Order 1974, so as to enable a tenant to recover rent at any time when he is able to recover it in terms of that Article, whether or not Part II of the Counter-Inflation Act 1973 (under which the Orders were made) is in force.

(2)Article 8 of the Order first mentioned (jurisdiction of sheriff) shall continue to have effect, for the purpose of both of the said Orders, in respect of any proceedings commenced before the expiry of a period of two years commencing on 16th May 1975, whether or not Part II of the said Act of 1973 is in force.

(3)Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the said Orders as it applies in relation to Part II of the said Act of 1973 by virtue of paragraph 4 of Schedule 3 to that Act.")

The noble Lord said: The purpose of this new clause is to extend until two years after the expiry of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) Orders 1974 on 15th May the right of a tenant to recover any rent which was in excess of what the landlord was legally entitled to charge under the Orders, and to extend the jurisdiction of the sheriff over any proceedings to recover any such excess rent. Article 5 of the Counter-Inflation Order to which I have referred at present provides that the tenant shall be entitled to recover any such excess rent for a period of up to two years after the date on which it was paid. Since Part II of the Counter-Inflation Act 1973 under which the Orders were made, will, however, expire in March 1976, it is necessary to provide that the right of the tenant to recover excess rent shall be extended to cover the period between March 1976 and 15th May 1977. I beg to move.

Lord LYELL

I should like to thank the noble Lord for explaining this Amendment to us. He has already pointed out that we have not had all the time we might have wished to consult all the bodies which might be interested in this Amendment. We should like to reserve our position on this Amendment, but subject to that we accept it.

On Question, Amendment agreed to.

Clause 10 agreed to.

Clause 11 [Miscellaneous and consequential amendments and repeals]:

Lord HUGHES

I have spoken to Amendment No. 10 already. I beg to move.

Amendment moved—

Page 8, line 19, leave out ("1") and insert ("2A").—(Lord Hughes.)

On Question, Amendment agreed to.

Lord HUGHES

I beg to move Amendment No. 11.

Amendment moved—

Page 8, line 22, leave out from ("this Act") to end of line 23.—(Lord Hughes)

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 agreed to.

Clause 13 [Citation, commencement and extent]:

Lord HUGHES

I beg to move Amendment No. 12.

Amendment moved—

Page 9, line 10, at beginning insert ("With the exception of this section, and section 11 of this Act so far as relating to paragraph 13 of Schedule 2A to this Act (which extend also to England and Wales),").—(Lord Hughes.)

On Question, Amendment agreed to.

Schedule 1 [Miscellaneous and consequential amendments] :

Lord HUGHES

I beg to move Amendment No. 13.

Amendment moved— Page 10, line 3, after ("Amendments") insert ("relating to Housing Revenue Account and Housing Subsidies").—(Lord Hughes.)

On Question, Amendment agreed to.

Lord HUGHES moved Amendment No. 14:

Page 12, line 24, at end insert—

("The Land Compensation (Scotland) Act 1973

9A. In section 27 (right to home loss payments where person displaced from dwelling)—

  1. (1) For paragraph (d) of subsection (1) there shall be substituted the following paragraph—
  2. (2)At the end of subsection (2) there shall be added (but not as part of paragraph (b)) the words "and in a case within subsection (1)(d) above, unless the displacement occurred on or after 31st July 1974 (on which date the Housing Act was passed).".
  3. (3)At the beginning of subsection (9) there shall be inserted the words " Subject to subsection (2) above,".

9B. In section 34 (disturbance payments for persons without compensatable interests)—

  1. (1) For paragraph (d) of subsection (1) there shall be substituted the following paragraph—
    2. 674
  2. (2) At the end of subsection (2)(c) there shall be added the following paragraph—
  3. (3) At the beginning of subsection (9) there shall be inserted the words "Subject to subsection (2)(d) above,".

9C. In section 80(1) (general interpretation) the following definitions shall be inserted in the appropriate places— housing association" has the meaning assigned to it by section 208(1) of the Housing (Scotland) Act 1966; registered", in relation to a housing association, means registered in the register of housing associations established under section 13 of the Housing Act 1974;").

The noble Lord said: This Amendment widens the scope of the whole loss and disturbance payments made by registered housing associations when they displace tenants in order to carry out redevelopment or improvement projects. The Land Compensation (Scotland) Act 1973 provided for home loss payments in Section 27 and for disturbance payments in Section 34. These were extended to tenants of registered housing associations for the first time by amendments contained in the Housing Act 1974. The effect of these Amendments to the Housing Act was to provide for payments in respect of displacements which took place at a time when the association was registered, but there was also a provision that it should apply to land acquired when the association was registered. It had not been our intention to confine payments to land which was acquired at a time when the association was registered: this was an accidental limitation, and we wish to remove it. This Amendment will benefit the people concerned. I beg to move.

Lord CAMPBELL of CROY

We had assumed this would be for the benefit of the housing associations, as the noble Lord has just said. Again, as these Amendments reached us only yesterday it is virtually impossible for anyone outside this Chamber, including the housing association movements, to have seen them. I assume that the Government will have had discussions with them beforehand, but I must again reserve our position in case those concerned have any comments to make when they see these Amendments for the first time.

Lord HUGHES

The noble Lord will not be surprised to learn that some of these Amendments have arisen following representations that have been made to us.

On Question, Amendment agreed to.

5.59 p.m.

Lord HUGHES moved Amendment No. 15:

Page 12, line 30, at end insert—

(" 10A. In section 17 of the Housing Act 1974 (loans and grants limited to registered housing associations), at the end there shall be added the following subsection— (5) Nothing in subsection (1)(b) above shall prevent a local authority from making loans under section 152(2)(a) of the Housing (Scotland) Act 1966 to an unregistered self-build society, as defined in section 12 above, for the purpose of enabling it to meet the whole or any part of any expenditure incurred or to be incurred by it in carrying out its objects.".

10B. In section 119(3) of the Housing Act 1974 (option mortgages), for the word "section", in the second place where it occurs, there shall be substituted the word "subsection".").

The noble Lord said: This Amendment covers two separate points. The purpose of the Amendment to Section 17 of the Housing Act 1974 is to enable local authorities to make loans under section 152(2)(a) of the Housing (Scotland) Act 1966 to self-build societies, which have not been registered by the Housing Corporation, on or after 1st April 1975. Under Section 17(1) of the Housing Act 1974, the making of certain loans and grants to housing associations is limited from 1st April 1975 to those associations registered with the Housing Corporation under Section 13 of that Act. Subsection (1)(b) of Section 17 provides that loans under Section 152(2)(a) of the Housing (Scotland) Act 1966, which enables local authorities to make grants or loans to housing associations, are restricted in this way.

This Amendment removes that restriction in the case of self-build societies. Although it is a basic principle to assist only registered housing associations, we recognise that self-build societies, which are housing associations by definition in Section 208(1) of the Housing (Scotland) Act 1966, should not be required to go through the complicated system of registration and deregistration. This is because the self-build societies are inevitably transient by nature, since on completion of the project the houses are transferred to individuals and the society wound up. But the Government wish to encourage an expansion of self-build activity alongside the development of registered housing associations. The Housing Corporation may lend to unregistered self-build societies under Section 9(1)(b) of the 1974 Act.

The Amendment to Section 119 of the Housing Act 1974 is quite straight-forward. That section provided for amendments to the option mortgage scheme introduced under the Housing Subsidies Act 1967. It had originally been intended to bring the whole of Section 119 of the Housing Act 1974 into force on a single day. But in the event this has not happened, and there will need to be at least two commencement orders for the section. Paragraph 10B therefore provides, for the sake of clarity, that the appointed day for the purposes of subsection (3) is the date on which subsection (3) comes into force. I beg to move.

On Question, Amendment agreed to.

6.11 p.m.

Lord HUGHES

I have already spoken to Amendment No. 16, which I now beg to move.

Amendment moved—

Page 12, leave out lines 31 to 37 and insert—

(" 11. Sections 109 to 116 of the Housing Act 1974 and Schedule 10 thereto shall cease to have effect as respects Scotland.

12. After section 116 of the Housing Act 1974 there shall be added the following section— Provisions for Scotland in place of sections 110 to 116 and Schedule 10.

116A. Schedule 10A to this Act shall have effect for the Purpose of making provision for Scotland in relation to the matters dealt with in section 110 to 112 and 114 to 116 of this Act and Schedule 10 thereto.".

13. In section 131 of the Housing Act 1974 (short title, extent, etc.), in subsection (5), after "108" there shall be inserted "110 to 116", and in subsection (6), for the words " Section 107 of this Act extends "there shall be substituted the words "Sections 107 and 116A of this Act extend".

14. After Schedule 10 to the Housing Act 1974 there shall be inserted the following Schedule—

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