TENANTS' RIGHTS, ETC. (SCOTLAND) BILL

HL Deb 15 July 1980 vol 411 cc1644-700

4.12 p.m.

House again in Committee on Amendment No. 1.

Lady SALTOUN

I would just like to say a word or two in support of Clause I of this Bill. I agree with every word the noble Lord, Lord Drumalbyn, said. In fact, he has said most of what I was going to say already, but there are just two points which I should like to emphasise. The first is that where a tenant purchases his council house, the burden of maintaining it, as I think has already been mentioned, will fall upon him instead of upon the local authority as in the past. I am a Scot and I know that the Scots are a canny race. I do not think that many Scots will contemplate purchasing their houses unless they are fully aware of the burdens which they are undertaking. The second point is that the money which the local authorities obtain from the sale of council houses to sitting tenants can go to help towards the provision of further housing.

The Earl of SELKIRK

The noble Lord, Lord Ross, emphasised to us that the fundamental work of the local authorities would be seriously undermined if these proposals went through. I find it very hard to be sympathetic with this point of view because of course none of us knows how successful it would be; it may or it may not be successful. But supposing in the next five years 10 per cent. of the local authority houses were sold—I rather doubt myself whether as many as that would in fact be sold, but supposing it was that figure in five years—just about half the houses in Scotland would remain local authority houses.

With those figures it is really rather hard, I think, to say that the basic role which local authorities have in this would be undermined. After all, these people, of their own free choice, are saying, "We want to and we can buy a house". A house is a very personal thing indeed, and it is something about which people are entitled, as far as possible, to arrange as they like. I cannot see that the local authorities' duties, such as they are, would be very greatly undermined. They would still have over half or just about half of all the houses in the country. I really think this is quite enough for them to deal with those essential problems with which they have been charged by statute. Not only that, I think all those houses are in fact paid for in part out of the rates, so that the more houses are sold the more this would be a form of economy to most local authorities. For these reasons, I think the anxieties of the noble Lord, Lord Ross, are not really justified. I believe the local authorities will not be any worse off; they will still have a very large task and, I think, a reasonable opportunity of fulfilling it.

4.14 p.m.

Lord ROSS of MARNOCK

We have had a better debate on this amendment than we had on the Second Reading. As I remember, on the Second Reading there were no Back-Bench speeches at all and I think from that point of view this debate has certainly been worthwhile. The suggestion is that this is a wrecking amendment. I am an old enough parliamentarian not to put down wrecking amendments, and the noble Earl the Minister destroyed his own argument when he said that this was an amalgam of other amendments in another place. It may well have been, but if they had been in another place and had been wrecking amendments they would not have been discussed at all, because wrecking amendments are out of order. It is not a wrecking amendment; it is certainly a limiting amendment in respect of the principle that the tenant is the only person to be considered in this matter. The actual principle of the sale of council houses to sitting tenants is still a live matter, even taking into account this particular amendment.

My noble friend Lord Galpern, who, as the former Lord Provost of Glasgow, probably knows a little more about the position in respect of council houses and the problems of Glasgow, the problems of the cities, is quite right, I think, when he draws attention to exactly the difficulties that will arise even for those who buy the houses. This links up with the point that was made by the noble Lady, Lady Saltoun.

I thought of putting down an amendment to insist that either the Secretary of State or the local authority should produce a document outlining to would-be purchasers just exactly what they were letting themselves in for. We shall probably discuss this later, but it is so very important. You see, everybody will make out of this. Lord Drumalbyn is going to finance the rest of the building programme of the local authorities out of this, so is the noble Lady. It will be a tremendous bargain for the tenants; their rates are going to be reduced, and everybody is going to gain from it.

You only have to say it to realise that there is something wrong here somewhere. So far as I can see, the only person who will gain is the Government, because if it is not on the housing revenue account then they do not pay a subsidy on it. Not all the money, by the way, I would inform the noble Lady, Lady Saltoun, is coming to the local authority. Once we get down to other clauses, she will discover that the local authority has to provide the money for the tenant to buy the house that it was unwilling, in the first place, to sell. Crazy!

But the noble Lord, Lord Drumalbyn, said that I should find another angle from which to look at this matter. I have been looking at this from all angles and I think I said on Second Reading that the one on which I lighted as the angle from which many supporters of the Government saw it, is that we get rid of as many council houses as we can. I do not think that the Government know very much about the people who live in council houses. The noble Lord said that they do not take away a house, it remains a part of the stock. Of course it does, but it is no longer within the control of the local authority, and the day after purchase it can be sold to somebody who is not on a waiting list. It can be sold to anybody at all who is not in need of housing. That is the difficulty that the local authorities find themselves in. They have got to provide a plan and tell the Secretary of State exactly what they are going to do in the way of building, in the way of modernisation and all the rest of it, when they do not know themselves whether there is going to be 5 per cent. sold. It knocks haywire any idea of planning as to what the local authorities can do.

The noble Lord, Lord Drumalbyn, said that there was no incentive for landlords to build for letting. I ask the noble Lord when that started. It started in the year 1900. That is when private landlords stopped building houses and that is why a Royal Commission had to be established, which encouraged local authorities to start building houses. That was the reason for it. This problem was there before a single local authority house was built.

Lord DRUMALBYN

Surely the noble Lord will admit that it was mainly the cessation of the building of houses during the First World War that influenced the situation.

Lord ROSS of MARNOCK

No, not during the First World War; it was before the First World War. As a matter of fact, it was in the year 1917, during the First World War, that the Royal Commission on Scottish Housing reported. So the noble Lord's history is not all that good, so far as that is concerned. There is a possessive attitude—

Lord MACKIE of BENSHIE

The noble Lord did not mention any dates of that kind. He was simply saying that the cessation of building during the First World War led to most of the trouble.

Lord ROSS of MARNOCK

No; it was the establishment of the Royal Commission which pinpointed the fact that there was trouble. A Royal Commission is not established unless there is something to solve on which you want some kind of advice. It reported during the war, which is an indication that the trouble started long before that time. The trouble started after about the year 1900. It may have been the introduction of a Liberal Government in 1905 that caused the trouble—I do not know. Anyway, the noble Earl the Minister suggested that the Government had fought an election. He was careful not to mention the manifesto this time. My full congratulations to him. I did not introduce the subject—he did. They fought an election on this promise. He did not tell us the result, but they lost it.

The Earl of MANSFIELD

I am sitting here.

Lord ROSS of MARNOCK

Of course, the noble Earl is sitting there, but it is by the grace of the English. The number of seats won by the Labour Party in Scotland was 44. The number won by the Conservatives and Unionists—I think they still call themselves that in Scotland—was 22. They are in a minority of two to one and the noble Earl says, "We fought an election". He did not convince the people of Scotland of it.

But since then we have fought the local elections. What happened there? We hardly controlled a district authority in Scotland before. All these authorities who I said were complaining to the Minister about taking away their powers were Tory authorities and Independent authorities. But since the election—and they fought the election on this issue—they have lost miserably. They have only a handful left in Glasgow; they have only the casting vote of the Lord Provost in Edinburgh, with the help of a few others as well. The same applies in the other cities. This idea has been turned down by the people of Scotland. We fought a by-election in the centre of Glasgow; I hope that noble Lords remember the result. The Tories got 707 votes and lost their deposit. Was this a great victory for this kind of thing? Of course it was not.

They are so insensitive to the needs of the people of Scotland, and they are running into the same dangers as they ran into before. What do they think of the people of Scotland? The people give a decision against something, but they still get it. I hope that noble Lords noticed who was second in that by-election. It was not the Conservatives; it was the Scottish Nationalists. The Conservatives are going to repeat all the mistakes of the past and the trouble will start in the same areas around the North of Scotland. The noble Lord shakes his head. He is very young in politics, but I can tell him exactly where the seats will be lost. Let him look at the majorities in that area where the Conservatives had hoped that we had got rid of Scottish Nationalism. The way they are carrying on, giving people what they do not want in spite of the declared opposition, will invite the same kind of problems as before.

There has been talk about the rights of ownership and cocking a snook at local authorities. What does this mean? You must own your own house, in order to do it. I own my house and I do not cock a snook at the local authority—I dare not. The byelaws passed by local authorities apply to owner-occupiers, as they do to tenants. If the noble Lord is talking about the colour of the windows and so on, that has nothing to do with the purchase of the house. That has to do with security of tenure and the lease that we are going to give them. That is the freedom that we are going to give to the tenants. The tenant's charter was provided by the last Labour Government. That is the only good bit in the Bill, but we are not there yet.

The noble Lord himself used to be in a local authority, and I understand that at that time it was a housing authority. Can he tell me how many local authority houses he sold then? I do not think there was one. The point is that we first had to meet the needs of the people of Scotland. We had to build and build. I remember a Tory Prime Minister who made his name by building 400,000 houses. But he never sold a single local authority house. This is the new criterion. The question of selling the houses has arisen only in the last few years. In those great glorious 13 years of Tory misrule, how many houses were sold? This is something new which they have thought up. I assure noble Lords that they do not really appreciate the damage that they will do.

A person does not necessarily stay in a council house all his life. People have been known to leave council houses at the age of 40 or 50, when their families are working, and then to buy a house under private owner-occupation. There is a mathematical formula that can be worked out to find the number of local authority houses that become available for reletting every year. But the one thing that is true is that if you take a house out of the stock and sell it and then it is resold again and again, it is not someone from the waiting list who will be going in. It will be lost to the local authority for reletting. We are not wrecking the Bill. We are trying to make sense of the Bill and trying to save the Government from doing something that is very foolish indeed.

I am sorry that the Liberal Party do not appreciate the value of decision-making by a local authority. That is the principle that we are now talking about. Let the local authority decide. It is a question of the rights of the individual or the rights of the whole community, because the people who are waiting for houses are interested in this, and their rights are reduced if a house is taken out of the letting stock. We are talking about the rights of people who are waiting to get into a desirable area—and there are many.

I think it was the noble Lord, Lord Drumalbyn, who said that the houses in desirable areas will be sold first. Of course they will be. I can think of a scheme in Kilmarnock where you must virtually serve your time there for five years before you get a transfer into a better house, but that better house will not be there if it is sold and then resold to somebody else. This will make it absolutely impossible for a local authority to keep a balance of housing to meet its varied needs, whether they be the needs of the homeless, the elderly, the people who need transfers or the pensioners. We have done our best to persuade the Government, but they are obviously not going to move. Good sense would tell them to take the advice of the Convention of Scottish Local Authorities. Good sense would tell them to take the advice of the National Farmers' Union. Good sense would tell them to take the advice of their own individual local authority. But, no; they fought the election on it and they lost and, whether or not the Scots like it, they are going to get it. Well, well! I think that the party opposite deserve everything they are going to get at the next election. I think we should divide the House.

4.30 p.m.

Lord STRATHCLYDE

I rise merely because I think that the noble Lord who has just spoken forgets things that he does not wish to remember. He forgets the Rent Restriction Act. He forgets owners' rates. What was one of the principal causes why we needed to build more houses? I also ask, who was it who went ahead and built the houses? Who was it who set a target for housing? It was not the Government of which the noble Lord has been a member; it was the Conservative Party which set the target. The target of 300,000 houses was fixed by two Members of your Lordships' House today—myself and my noble friend Lord Harmar-Nicholls. We were told that the target was impossible. The Labour Party's target was 200,000 houses.

The noble Lord forgets some of these facts; he has a convenient memory. The need for houses was made more and more abundantly clear during the First World War. Houses were falling into disrepair at a tremendous rate because of the Rent Restriction Act. The owners of these houses simply could not afford to keep them up. Whose fault was that? It was only when we set our target so high that we began to get houses built. If people want to have houses of their own, surely they ought to be able to have them. Should not houses be made available to them? I cannot understand the noble Lord when he says, more or less, that people are not allowed to get a house of their own if they want one.

Who can afford to build a house today, I should like to ask? I know of nobody in my situation who can afford to build a house today, nor in the case of many Members of your Lordships' House, because this is simply out of the question. Here is an opportunity to let people get the house which they want at the price which they can pay. I am delighted that the Government have brought forward this Bill, and I hope that it will go through, despite what has been said by the noble Lord opposite—which in my opinion is quite mistaken, and I think that I had as much to do with housing during my period in another place as did the noble Lord.

Lord ROSS of MARNOCK

I should be the first to admit that the noble Lord did his best. So far as building houses is concerned, and so far as targets are concerned, he has only to look at the history books to find that it was when I was Secretary of State that the greatest number of houses were built in Scotland, not when he was there as Minister of State. The noble Lord talked about the Rent Restriction Act. The troubles did not start with that Act; they started long before then. The noble Lord also talked about owners' rates. Owners' rates were taken away and put on to the tenant. That was supposed to help owners, but it did not lead to an increase in the number of privately rented houses. In fact, the number still went down, even after all the generosity of the Government of which the noble Lord was a member. The situation is certainly different today.

I am glad that the noble Lord asked, who can afford to build a house? The people who have got to build houses to replace the houses which are no longer in stock are the local authorities. Could the noble Lord tell me, just like that, what it is going to cost Shetland County Council, because of the pressures there, to build houses? I will tell him. The cost of building a house there is £63,000. Because of this Bill, they have got to sell houses to sitting tenants at, possibly, half the price when they were built. Many of these houses to which the noble Lord refers were built before the war. The loans were for 40 years and they have been paid off by now. The fact that they are still tenanted and being looked after means that the local authority can reduce the rents of the others, the whole community thus benefiting. This helps the rates as well. I am afraid that what is being done today is not something of which eventually we are going to be very proud. I hope that we shall return to local authorities the discretion and the right to determine where and how many houses will be sold.

The Earl of PERTH

As I understand it, the noble Lord, Lord Ross of Marnock, said that this was not a wrecking amendment. Technically, I suppose that is true, but, as I understand it, the amendment makes things extremely restrictive in the realm of housing. Under this amendment, although Government policy may be one thing, if the local authority decides otherwise their rule or will would prevail. Perhaps I have got this wrong, but that is how I understand it. It seems to me that this is as close to a wrecking amendment as can be, for it says that local authority policy will come ahead of that of the Government. Perhaps the noble Lord will explain it to me if I am wrong.

Lord ROSS of MARNOCK

These houses are the local authority's houses.

The Earl of PERTH

I know, but Government policy is Government policy.

Lord ROSS of MARNOCK

Yes, but it does not change that simple fact. They are local authority houses. They are owned by the local authorities. The local authorities are responsible for them, not the Government.

The Earl of PERTH

It seems to me to be a wrecking amendment, or as close to it as no matter.

Lord UNDERHILL

May I comment on what the noble Earl has just said? I have just looked at the amendment which refers to, the targets set out in the relevant local housing plan drawn up by the local authority and approved by the Secretary of State". Then it refers to the designation of areas as the local authority, with the consent of

the Secretary of State, may determine. Therefore the local authority is going to have some authority, but the Secretary of State is going to have some as well.

The Earl of MANSFIELD

I do not want to prolong the agony. I do not know whether the noble Lord, Lord Underhill, was in his place, or attending, but on the assumption that the answer to one of those questions may be, No, I tried to say that the plan drawn up by the noble Lord, Lord Ross of Marnock, by which local authorities will produce their relevant local housing plans,to be approved by the Secretary of State, is unfortunately not blessed by statute. If, therefore, they produce a plan of which the Secretary of State disapproves, or if they produce no plan at all which contains any proposals for selling local authority housing, there is nothing under these amendments which the Government, through the Secretary of State, can do about it.

4.38 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 71; Not-Contents, 120.

CONTENTS
Ardwick, L.	Gordon-Walker, L.	Pargiter, L.
Aylestone, L.	Goronwy-Roberts, L.	Parry, L.
Bacon, B.	Hale, L.	Plant, L.
Balogh, L.	Hall, V.	Rathcreedan, L.
Beswick, L.	Hatch of Lusby, L.	Ross of Marnock, L.
Birk, B.	Henderson, L.	Sainsbury, L.
Blease, L.	Houghton of Sowerby, L.	Segal, L.
Blyton, L.	Howie of Troon, L.	Shinwell, L.
Boston of Faversham, L.	Jacques, L.	Stewart of Alvechurch, B.
Bowden, L.	Janner, L.	Stewart of Fulham, L.
Brockway, L.	Jeger, B.	Stone, L.
Brooks of Tremorfa, L,	Kaldor, L.	Strabolgi, L.
Bruce of Donington, L.	Kilmarnock, L.	Strauss, L.
Cudlipp, L.	Leatherland, L.	Taylor of Gryfe, L.
Darling of Hillsborough, L.	Lee of Newton, L.	Taylor of Mansfield, L.
David, B.[Teller.]	Llewelyn-Davies of Hastoe, B.[Teller.]	Underhill, L.
Davies of Penrhys, L.		Wallace of Coslany, L.
Denington, B.	Lloyd of Hampstead, L.	Walston, L.
Diamond, L.	Lovell-Davis, L.	Wells-Pestell, L.
Donaldson of Kingsbridge, L.	MacLeod of Fuinary, L.	Whaddon, L.
Gaitskell, B.	Maelor, L.	White, B.
Galpern, L.	Milford, L.	Wilson of Radcliffe, L.
Gardiner, L.	Noel-Baker, L.	Wootton of Abinger, B.
Glenamara, L.	Oram, L.	Wynne-Jones, L.
NOT-CONTENTS
Airedale, L.	Amory, V.	Baker, L.
Airey of Abingdon, B.	Ampthill, L.	Balerno, L.
Allerton, L.	Auckland, L.	Balfour of Inchrye, L.
Alport, L.	Avon, E.	Bellwin, L.
Belstead, L.	Gibson-Watt, L.	Mowbray and Stourton, L.
Berkeley, B.	Gladwyn, L.	Moyola, L.
Bessborough, E.	Glenkinglas, L.	Murton of Lindisfarne, L
Bradford, E.	Gray, L.	Nathan, L.
Brentford, V.	Grey, E.	Netherthorpe, L.
Buckinghamshire, E.	Gridley, L.	Newall, L.
Byers, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Northchurch, B.
Campbell of Croy, L.		Onslow, E.
Carrington, L. (A Principal Secretary of State.)	Hampton, L.	Orkney, E.
	Harvington, L.	Perth, E.
Clifford of Chudleigh, L.	Hawke, L.	Redmayne, L.
Clitheroe, L.	Henley, L.	Reigate, L,
Clwyd, L.	Holderness, L.	Ridley, V.
Cockfield, L.	Home of the Hirsel, L.	Rochdale, V.
Cork and Orrery, E.	Hornsby-Smith, B.	Rochester, L.
Craigavon, V.	Kimberley, E.	Saltoun, Ly.
Crawford and Balcarres, E.	Kinloss, Ly.	Sandford, L.
Cullen of Ashbourne, L,	Kinnaird, L.	Sandys, L.[Teller.]
De Freyne, L.	Kintore, E.	Selkirk, E.
Denham, L.[Teller.]	Lauderdale, E.	Sharpies, B.
Derwent, L.	Lindsey and Abingdon, E.	Simon, V.
Digby, L.	Lloyd of Kilgerran, L.	Sligo, M.
Drumalbyn, L.	Long, V.	Soames, L. (L. President.)
Dundee, E.	Lyell, L.	Stamp, L.
Eccles, V,	McFadzean, L.	Strathclyde, L.
Effingham, E.	Mackay of Clashfern, L.	Strathspey, L.
Ellenborough, L.	Mackie of Benshie, L.	Swinfen, L.
Elliot of Harwood, B.	Mancroft, L.	Thurso, V.
Elton, L.	Mansfield, E.	Trefgarne, L.
Evans of Claughton, L.	Margadale, L.	Trenchard, V.
Fairfax of Cameron, L.	Marley, L.	Vaux of Harrowden, L.
Falkland, V.	Merrivale, L.	Vickers, B.
Ferrers, E.	Milverton, L.	Vivian, L.
Ferrier, L.	Montagu of Beaulieu, L.	Waldegrave, E.
Fortescue, E.	Montgomery of Alamein, V.	Westbury, L.
Fraser of Kilmorack, L.	Morris, L.	Wigoder, L.
Gainford, L.	Mountgarret, V.

Resolved in the negative, and amendment disagreed to accordingly.

4.47 p.m.

Lord ROSS of MARNOCK moved Amendment No. 2: Page 1, line 9, leave out ("to which this section applies").

The noble Lord said: I am not necessarily going to divide the Committee on this amendment but I am giving the Government a chance to redeem themselves and to live up to the Title at the front of this Bill.

The Earl of MANSFIELD

Would the noble Lord think that he might speak to Amendment No. 3 at the same time, to give me a double chance?

Lord ROSS of MARNOCK

I will do more than that. I will speak to Amendments Nos. 3 and 6. We are racing through at a speed that my ex-colleagues in another place just would not believe. I was wondering whether on this Bill I could possibly repeat my performance—my greatest parliamentary achievement— which was to get Bob Boothby out of his bed at 4 o'clock in the morning on a Scottish Housing Bill, summoned by his Whips to appear; I think it was in 1956. I am giving the Government an opportunity to redeem themselves here so that the Bill might apply not just to public sector tenants but to all tenants—those who are private tenants as well. If all the great benefits that we have heard about put a new light into the eyes of people and a sprightliness into their step when they become owner-occupiers, why should that be available under this Bill only to the public sector tenants? What about those who are paying rent to private landlords? Would they not be much better people (according to the Government, anyway) if they, too, were given the opportunity to become owner-occupiers?

That was the intended effect of this series of amendments. I did not follow it through, and if the Government think that there is no precedent for this kind of thing may I remind them of the Scottish long leases Act of 1951, when we had a problem of long leases falling in and, even though they had only a year to go, we worked out a formula whereby they were given a nominal term of (I think it was) about 15 to 20 years; and we worked out a formula whereby those with long leases were allowed to purchase their houses. The Government did not own the houses; they were private houses owned by private people, and if we could do it there, surely we can all exercise our noble minds to do it here for those people who are unfortunate enough still to be paying rents. We should give them the opportunity. So I am really testing the bona fides of the Government in respect of this great new principle that they have discovered in the past year. I beg to move.

The Earl of MANSFIELD

Fortified by the majority in the last Division, which proportionately was bigger than that obtained in the pocket borough of Glasgow, Central, the noble Lord now turns the argument on its head; because having said in effect that nobody should have the right to buy his council house, save with the blessing of the local authority, the noble Lord now turns round and says in effect that every tenant should have the right to buy his house not only in the public sector but in the private sector as well. Nevertheless, I suppose I do have to take this argument as a would-be serious contribution to the deliberations of the Committee, although perhaps I shall do so fairly quickly.

I shall take the public sector tenants first. What the noble Lord proposes, of course, runs absolutely contrary to the bulk of the amendments which he and his noble friend have put down to Part I, which restrict the right to buy. We make no apologies for the limitations which we have placed on the right to buy. As regards its limitation to tenants of public housing authorities, this follows to a large extent the limitation on the landlords whose tenants are to have security of tenure. It seems a matter of simple logic that if there are sound reasons for not granting a tenant security of tenure in his house those reasons must apply with equal or greater force to the case for not giving him the right to buy it. The reason for not granting security of tenure to tenants of public landlords other than those listed in Clause 10 of the Bill is that they have no housing functions and are all concerned with housing only in so far as it is related to their activities as employers. I take it that the noble Lord is not seriously suggesting that employers who need a stock of tied housing in order to carry out their functions should be forced to sell it.

So far as Amendment No. 6 is concerned, that would restrict landlords, past tenancy of whose houses will count for the qualifying period, to those whose houses are covered by the right to buy. At present, time in any house let by a landlord and covered by discount also counts for the qualifying period. There are people, for instance, such as those who have been policemen or prison officers, who spend a great deal of their time in tied houses placed at their service and have to, as it were, work unsocial hours and have to be on hand to deal with any emergency that may arise. We want such people at the end of their service, people who have to leave their service houses and become housing authority tenants, to be entitled to put that period of time towards the time which counts for the buying of a council house. But equally it could not be right to say that such a person should be entitled in circumstances such as those to buy his house. So I hope that answers that point.

I come finally to the private sector. The reason that private tenants are not given the right to buy is simple that their houses are not owned and financed by the state, so that if in effect by this amendment you gave them the right to buy it would be a wholly unwarrantable appropriation of private property by an individual at the behest of the state without any or any proper compensation.

If I may encapsulate the argument in this way, we believe that the freedom to choose between owning and renting is an extremely important right, as we have been discussing for the last hour or so, but we have never sought to suggest that its availability should not be circumscribed where there are strong practical considerations which weigh against granting it. There is a balance to be struck and believe that the Bill now strikes the balance correctly. I hope, therefore, that the noble Lord, once he sees the logic which I have brought to bear in relation to these amendments, will see fit to withdraw them.

Lord ROSS of MARNOCK

Whatever else there may be in the arguments in relation to this Bill and the title of this Bill, logic is not one. It says "Tenants' Rights, Etc." Bill; it does not say "Public Sector Tenants' Rights", but "Tenants' Rights". I am trying to widen as much as possible the rights of as many tenants as possible. I had a feeling that we would get the old argument brought out that the houses I would seek to bring in are not owned by the state. As a matter of fact I think it was at the Second Reading the Secretary of State who gave this argument that the houses were not owned by the state, and then at the Committee stage the Under-Secretary of State Mr. Rifkind said that the houses were not owned by the Government. This was a new concept of the Government actually owning houses. The whole point surely is that the public sector houses, generally speaking the local housing authority houses, are owned by the local authority; they are not owned by the state, they are not owned by the Government, they are owned by the local authority.

If under national policy we can interfere with the local authority to the extent that has been suggested, why should not we interfere with privately owned rented property? We have done it in many ways in the past with all sorts of rules and regulations about rent control, fair rents, registered rents, regulated tenancies and all that. Indeed, in the question of leasehold, we actually gave rights of ownership to people who formerly had only leases, and we did this in Scotland long before they did it in England and Wales. I remember the arguments which we had in the Government of which I was a member about that. Believe it or not it was a Tory Government which did it in Scotland; I think it was Viscount Stuart of Findhorn, James Stuart, who introduced the Bill on the long leases in Scotland, and interfered with the rights of individual owners who were expecting to have properties falling into their hands within a few years in Lanarkshire, in Stonehouse—places like that. We put a stop to that; we interfered.

From that point of view, why should we not do it now? But the Government, which has found all the arguments on the grounds of national policy in relation to interfering with local authorities, are not prepared in this instance to apply the principle to the private section of the field. Well, I accept it; I am not surprised, I am not disappointed. It is just what I always thought, that there was no logic in what the Government were doing, and probably there was no money to be made out of it from the Treasury point of view. So that is why there is no interference on the private side. That being so, I beg leave to withdraw Amendment No. 2 and shall not move Amendments Nos. 3 and 6.

Amendment, by leave, withdrawn.

[Amendments Nos. 3 and 4 not moved.]

5 p.m.

Lord ROSS of MARNOCK moved Amendment No. 5: Page 2, line 8, leave out ("3") and insert ("8").

The noble Lord said: I beg to move Amendment No. 5. In order to gain the right to purchase a house, to buy a house—I do not know whether we have sorted out those two words, but I shall leave that to the noble Earl, Lord Selkirk—a person must have been a tenant for three years, and for only three years. I do not think that it is fair that that right should be given after that length of time. It may well be that the Government find some special magic in three years, but certainly from the point of view of the local authorities and of anyone who considers that people should have earned the right by having lived in a council house for a certain length of time, I think that eight years is far more reasonable. For that reason I wish to move this very simple amendment. It is easy to understand and I am perfectly sure that any fair-minded person would say, "Yes, eight is quite a good period; by that time you will know whether they are good tenants, and you will have all the information that you want in respect of them when you come to adjudicate on whether or not they should be allowed to buy their house". Eight years would be a far better period.

We must bear in mind, of course, that the three years could be three years spent in England, Wales or Northern Ireland—so long as they were in a local authority house—they could then come to Scotland, get a local authority house and within a day proceed to purchase it. In that respect I think that eight years is far better and it would be much more likely that the local authorities and, indeed, the people in the area, would know just exactly who is the person who is getting what, in my view, will be the bargain of a house. I beg to move.

Lord GALPERN

I should like to support my noble friend. I think that eight years is a more practical period. I am afraid that there will be some people who will move in by way of business if the period is three years. There will be people moving in who have no interest, apart from making a fast buck by working some kind of dodge that they will devise, and the house could be sold after three years.

As I read it, even as regards the requisite period of occupation, it says: … or of a succession of dwelling-houses". It does not mean a continuous succession of dwelling-houses. I take it that under this particular clause, an individual will be able to have a house one year, move out and then somehow get back in again or be out for two years. It does not say that it must be a continuous period. If that is so, there will be a great deal of malpractice operating if we do not alter it to a reasonable period, one of, as is suggested, at least eight years.

Viscount THURSO

I think that as regards this amendment, we are probably more able to go hand-in-hand with the noble Lords, Lord Ross of Marnock and Lord Galpern. However, I feel that eight years is rather too long. I would much prefer a figure of five years, which seems to be a reasonable period by which one could prove one's intent and one's bona fides. I know that it is difficult to pick a figure out of the sky. I merely wish to say that we support the principle of a rather larger number of years as the qualifying period, but we think that eight years is rather too long and that five years would be nearer the mark.

The Earl of MANSFIELD

there is nothing magical about three years. It is a restriction. First it is designed to ensure that the right to buy is confined to those who are bona fide public tenants. We think that three years is just about right for that and I am quite certain that the eight years proposed by the amendment is much too long. I say that for two reasons. First, as I have said, it is too long for the ordinary public tenant. Also, there are certain categories of people who quite frequently live in tied houses—I am thinking of people like policemen, prison officers and so on, who do their stint (if that is the right word) and come out at the age of about 45 still active and quite able to embark on a second career. Very often they go into public sector housing. They have given a considerable amount of their life to public service, and it would be quite wrong for those types of people—who are able to contribute a great deal more to the community and who probably will be the sort of people who would like to buy their own houses—to have to wait eight years until (and noble Lords have made reference to my recent birthday) they are getting slightly over the hump and perhaps their earning power decreases. Seriously though, quite a lot of thought was given to this particular time, and I ask noble Lords on reflection, to agree that three years is about the right level, and I ask the noble Lord to withdraw his amendment.

Lord HOWIE of TROON

I do not want to spend too much time on this matter, but it occurs to me that buying a house under the Bill after the very short period of three years will attract a substantial reduction in the cost—a third if I have read the Bill correctly. That suggests a possibility to me, following on the remarks of the noble Lord, Lord Ross of Marnock, earlier when he spoke of people qualifying in various parts of the country and they buying a house in another part of the country. It opens up the possibility of a market in second homes in some of the coastal towns of Scotland where there is a very large programme of public housing and where local authority houses are relatively easy to obtain. It would not be impossible to qualify, let us say, under the conditions of the Bill, in England or elsewhere in Scotland, or even, if I read the Bill correctly, in Northern Ireland, and then to find a council house in a coastal region of Scotland, buy it at a very substantial discount after a very short period, and then set up in the second home market. I am perfectly sure that that is not the Government's intention. It may well be that they have thought of that and have safeguarded themselves against that particular abuse.

However, I think that the three year period is very short indeed. Whether or not eight years is right, I have no idea at all. But, three years is certainly on the short side, and I think that the Government would be well advised to give some further consideration to my noble friend's amendment with a view to coming back with a new suggestion at a later stage in the Bill.

Viscount THURSO

Will the noble Earl clarify the point which he made? He quoted the case of a prison officer. As I read the Bill it says: … not less than 3 years in occupation of a dwelling-house or of a succession of dwelling-houses provided by any persons mentioned in subsection (10) below". Subsection (10) includes police authorities, the prison service and so on. So the fellow who has done his stint has surely quite easily qualified for buying a house before he ever leaves the prison service. He would have made eight years, he would have made five years and he would certainly have made his three years, and he would have his qualification under his belt at the age of 45 when he wants to buy his house. I was merely hoping that in these circumstances a slightly longer qualification could be considered by the Government. Would the noble Earl like to clarify that?

Lord GLENKINGLAS

Before the noble Earl clarifies it, would he not think it wise to take this back and look at it again, because I think that three years is too short. I am not sure whether eight years or five years is right; I should be happier with five but, frankly, I am not happy with three.

The Earl of PERTH

I should also like to support the noble Lord, Lord Glenkinglas, for I agree that three years is a short period, that eight is rather long and that the figure of five, which seems to be a compromise, seems to have good reasons going for it. I hope that the noble Earl will, in fact, say that he will consider the actual figure—he said that the figure of three was not sacrosanct—and perhaps introduce an amendment at the Report stage.

Lord DRUMALBYN

I take a different view from that expressed by my two noble friends. It seems to me that three years is sufficient to identify the person with the house. In the ordinary way, if a person has been in a house for three years, the likelihood is that, other things being equal—and they seldom are—he will have intended to stay on there, and he will now be given an opportunity to buy the house and identify himself with it even more closely.

Lord MACKIE of BENSHIE

Do I understand the noble Lord, Lord Ross, to be right and that a person can serve his three years in the houses of any authority in the British Isles?

Lord DRUMALBYN

Yes, that is right. Perhaps my noble friend can confirm what I say in relation to the point raised by the noble Viscount. It seems to me that it is intended that a person should be able to qualify in any house of another public housing authority and also of any of these other bodies, like the prison service, forestry and so on, within the public sphere. The case that was taken was that of the prison service or the police service. Let us assume that he starts off in a new house with a new career and that his service in the prisons or the police counts to enable him to buy the house that he has moved into on the basis of renting it practically right away. I think that that is right if he has served the three years. I see nothing wrong with that. One is merely treating the publicly-owned housing service as one complete service for that purpose—not for all other purposes. It seems perfectly reasonable to me.

Lord SWINFEN

I should also like to support the suggestion of a period of five years rather than three years. This Bill deals with Scotland, and people in local authority houses in Wales, England and Northern Ireland can also qualify within this period to buy a house in Scotland. Should not the matter be considered at the same time as the Housing Bill so that the qualifying period is the same under both Bills?

The Earl of MANSFIELD

The answer to the last queston is, No. We like to consider Scottish matters on their merits; and the English have had their go with their Housing Bill. and they are welcome to it. First, may I tell the noble Viscount, Lord Thurso, that in trying to search for graphic—I shall not say amusing—but slightly more entertaining examples, I deceived myself and may have misled the Committee. Prison officers, of course, are in the latter part of the clause and therefore they, as it were, clock up their years by virtue of their service. If I have misled the Committee in what I find is a somewhat complex matter, I can only apologise. However, I think that the point I made is a good one even if, in fact, the prison officers were not.

I should like to answer the two points which have been made: first, on the period of three years, which some noble Lords have certainly queried, as opposed to five years or eight years; and, secondly, the point made, I think, by the noble Lord, Lord Howie of Troon, that a public sector tenant who avails himself of these provisions after three years could thereafter sell the house and make what I think the noble Lord, Lord Howie, would regard as an unjustifiable profit.

On the question of three years, nobody can be put in this happy position unless he has been allocated a house by the local authority which has come to a conclusion that that person needs to be allocated a house. So that person is not in the position of being a speculator, which is the point I am trying to make. I think that the length of time that a person should have to work his term as a tenant until he is entitled to buy his house is a matter of judgment. It has been considered very carefully by the Government. The matter was exhaustively debated in another place and it comes to your Lordships—and I do not say this in any pejorative sense—with thought already having been given to this period. I am very ready to give more thought to it, but I cannot make any promises that I shall come to any different conclusion from that which has already been reached by my right honourable and honourable friends.

So far as the unjustified enrichment part is concerned, if the noble Lord, Lord Howie, looks on down, so to speak, he will see that there are measures which would allow clawback if someone takes advantage of the fact that he has been allocated a council house and then sells it within five years of having made the purchase. Therefore, I hope that that deals with the noble Lord's point.

Lord HOWIE of TROON

Before the noble Earl leaves that point, will he recall that I was less interested in what he calls an "unjustifiable profit"—those words were his not mine—and that I was really drawing attention to the possibilities of acquiring at an advantageous price a second holiday home?

The EARL of MANSFIELD

When there is nationally a shortage of houses, I just do not believe that local authorities will be keen to allocate as tenants people who already have a home. I cannot see that happening. Unless they were, then of course this does not arise.

Lord ROSS of MARNOCK

This is very interesting. When the noble Earl spoke and corrected himself, he used not only the words "the prison service", but the words "police authority" as well. Of course, he was quite wrong, because subsection (10) gives a lengthy list starting with local authorities, new towns, a development corporation, the Scottish Special Housing Association, the Development Board for Rural Wales, the Northern Ireland Housing Executive, a police authority, a fire authority, a water authority, and so on. All those bodies, having served their time—their three years—if they are given a local authority house are immediately in a position to demand the right to purchase. With all due respect, I think that it is just a bit much, even though a person may have come from the housing lists and gone on—I think that three years is not fair.

I read most of the arguments put forward in another place and I listened to some of them in the Committee in another place. One person said that someone who has been in a local authority house, having paid rent, is entitled to this privilege. That is not the argument that he used a few years ago. A few years ago the argument was that people were not paying enough rent, but now they have to get a return for this. Three years is not fair; it is not right. When we talk about somebody who has been in a police authority house, or a prison warder's house—and there are the ones at Barlinnie and around the Polmont area and elsewhere—it may well be that that person only joined the prison service, did not like it, and left after three years. There is no indication of need to justify how you left the other house that was occupied which gives you a qualification.

Then of course you come to town because you have to leave that house. It is a tied house, and you are then homeless. You have to be rehoused by the local authority, and within a day you can send in word saying you want to buy the house. I do not think this is altogether fair. I can assure the noble Earl, after 33 years sitting at surgeries on a Saturday morning and hearing people on their problems of housing, that there is no subject on which you will get less objectivity than the subject of housing—who gets a house, which house they get.

This will cause a lot of trouble. We would be easing the position considerably if we had a higher figure than three. The suggestion has been made by the noble Viscount, Lord Thurso, that it may be that five is a better figure. I am not particularly tied to eight, because it is equally arbitrary. What I am convinced of is that picking on three is almost ludicrous. It is unfair to the people themselves for the kind of problems that might arise with neighbours in respect of it.

I hope we appreciate that local authorities are not all that keen to part with their houses if they know they are to be sold. Up until now there has been a good relationship in regard to tied houses in the countryside, certainly in relation to janitors, in relation to people leaving the prison service, people in police houses, with the local authority going out of their way to rehouse these people. I hope that the Government will appreciate the difficulties now. The local authorities may decide, "Well, we did that before but we can hardly do it now when, within a day of arriving, if they had been in these other public service houses, they are going to be off the housing stock". I hope that the Government thought of this consequence in respect of not just this amendment but in respect of this particular clause and this new right that has been given.

I would gladly withdraw the amendment if the Minister would suggest that he is prepared to have a look at this and see whether or not five would be a better figure. I think that would be reasonable. I am very glad indeed that he said that we are not going to be tied to what they have done in England in this respect. The English housing situation is entirely different, Their attitude to sale for owner occupation is different. Birmingham, over 13 years, sold about 10,000 houses. It would be interesting to analyse what kind of houses were sold, but that is something we shall return to later on.

The point is that we do not want to be tied by that. I would like to see the Minister of State getting his civil servants together and, after having lectured them about the mess they made over the Explanatory and Financial Memorandum, saying to them, "I want this changed in the Bill from three to five". I am sure that his word would prevail. If he would do that I would gladly withdraw the amendment.

The Earl of MANSFIELD

I shall lecture my civil servants in the way that I consider proper. Just to squash the endless repetition of allegations about the Explanatory and Financial Memorandum, I would say that there are public servants at several stages who have their part to play before the memorandum sees the light of day. The noble Lord should not blame officials in the Scottish Office necessarily for the fact that it was produced incomplete and not wholly accurate, and somewhat late. I shall look at this again, although, as I have said, without any commitment necessarily to table an amendment at the next stage.

Lord ROSS of MARNOCK

I well know what the position is of civil servants and I know who employs draftsmen. But I think that the Government are to blame because of the unholy speed with which they processed this Bill from another place into this House and want it finished before the Summer Recess. That is the real cause of the trouble, and not enough checking is being done. Ministers have ultimate responsibility for the Bills which they bring forward and which they sponsor, and not just civil servants. On the undertaking that was given, I gladly withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

5.26 p.m.

Lord ROSS of MARNOCK moved Amendment No. 7: Page 2, line 23, leave out ("fixed by subtracting from").

The noble Lord said: With Amendment No. 7 may we take No. 8. I do not think we can take quite as many as I had thought, unless the noble Earl wishes to deal with the whole question of discounts in the one debate. I would gladly do that, but not No. 14.

The EARL of MANSFIELD

I think that Amendments Nos. 7, 8, 9 and 14 fall into what I might call a convenient parcel.

Lord ROSS of MARNOCK

Helpful as ever, I shall agree to that. It means of course that we may have a wider ranging debate. In the first instance what I suggest is that we leave out the words "fixed by subtracting from". We come now to the question of the price of these houses that we have now decided to sell, and we have decided to sell to tenants, or joint tenants, if they can show that they have been three years either in that house or in another public sector house. You can aggregate the periods together after three years. After this time the local authority must give a discount to whatever is the market value decided by the qualified valuer, or the district valuer, and subtract from that market value a sum of money equal to, in the first instance 33 per cent.

That is the reduction you get if you have been in the house for three years. Then another 1 per cent. for every year beyond three years up to a limit of 20 years, which would amount to 50 per cent. You get the house for half price eventually after that length of time. I have no objection to the sale of local authority houses on a restricted basis. As Secretary of State I allowed the sale of certain local authority houses, but we did not tell the local authorities to give them away at bargain prices.

This is distinctly unfair to the local authorities. Of course they are bargains even after the three years, and so, instead of 33 per cent. as a starting point, I have suggested 15 per cent. to a maximum of 25 per cent., rather than 50 per cent. It is most unfair on the local authorities that they should have to give away property which is valuable to them, and which they may well have to replace at the highly inflated figures of modern building today. Indeed, it could land the local authority in considerable financial difficulties.

I have read the financial memorandum that was produced not by the Scottish Office but, I believe, by the Department of the Environment. If I had to go through this and deal with every single unwarranted assumption—because they had to make assumptions of some kind—and then work out just exactly whether this would be of financial benefit to the local authorities, it would take me a long time indeed.

I notice that the Government are a little more hesitant today when speaking about the financial benefits that will come from the sale of council houses. They have probably appreciated that it is a much more complex business than they had originally thought. If one leaves aside the replacement cost, one may come to an advantageous figure, but once one begins replacing the houses that have been taken out of the housing stock, then of course local authorities will find themselves in deep trouble. I do not know whether noble Lords on the Liberal Benches are satisfied that my figures this time are reasonable—moving from 33 to 15 per cent. and from 50 as a maximum to 25 per cent.—but I think they will agree that any fair-minded person with the interests of the ratepayers at heart could not do other than say that what the Bill proposes is more than slightly ridiculous. Giving discounts of the size proposed would be unfair to the local authority and to the rest of the community, who must bear the burden.

If this is the kind of standard the Government intend to lay down for the sale of public assets—and every day we hear of more public assets being offered for sale— Heaven help us! After all, local authorities will not decide what the charge should be for their own houses; the Government will make that decision. "Freedom for local authorities" was, I thought, the watchword of the Liberal Party at one time. Here the Government are not only telling local authorities, "You will sell your houses", but they are also saying, "You will give a discount", and they give the actual figures—figures which to my mind are unfair to local authorities.

5.33 p.m.

Lord MACKIE of BENSHIE

This is an enormously important question in Scotland today, particularly as we need some mobility of labour. Nobody wants to buy a house in Fort William at the present time, because we have just had a failed industry there. On the other hand, people want to buy houses in, say, Shetland and areas around Aberdeen where prices are high and there are jobs. It is therefore important that housing authorities should be in a position to do something useful with the money they receive. The cost of new housing is high and I doubt, for example, whether authorities in the region of Aberdeen would be justified in giving the large discounts that are being proposed. I can see the argument for giving a discount on the sale of a house, but the figures proposed in the Bill are, in my view, far too large.

Can the Minister say in what way he thinks this proposal will help the vexed question of the mobility of labour? We in Scotland have always tried to move jobs, at any rate to a degree, to where the people are and we have tried to substitute new industry for declining industries—obviously that is much cheaper—but this is a problem which must have a relationship to the Bill. I would not go along with the noble Lord, Lord Ross, in saying that many Labour authorities in Scotland have been particularly successful in providing houses for new industries and in conditions which have attracted industry, and the Government's initiative here might help. Nevertheless, I believe that more will have to be done to encourage the mobility of labour, and the money received by authorities must have a bearing on this question of providing houses where the need is great and where the jobs are.

Lord STRATHCLYDE

Have noble Lords opposite taken into account what was the original cost of the house to the local authority, who will probably make a considerable profit, even allowing for a reduction of 33 per cent.? Again, what has it cost them to maintain that house? Many of these original houses have been kept up-to-date by the local authority at considerable expense, not to the local authority but to the poor unfortunate ratepayer, of whom I am one and the noble Lord opposite is another. One must take account of those two figures before saying a discount of 33 per cent. is excessive, because I do not think it is if a proper calculation is made.

The Earl of PERTH

The length of time we spent discussing earlier amendments is relevant to this question. If, after only three years' occupation, one gets a house at a 33 per cent. discount, I think that is going a bit far. If it were five years or a slightly longer period I could see a better justification for that sort of discount.

Lord GALPERN

I imagine that those who will seek to buy their corporation or council houses will probably accept the valuation placed on those properties by the surveyor selected by the local council. I do not like the idea of a surveyor being selected by the local council because there may be a tendency, in order that he should get as much business as possible from the local authority, for him to put a slightly higher valuation on the property than would, say, the district valuer. I believe he should be a completely independent man, not engaged by the local council.

The point I particularly wish to raise is the question of a possible disagreement. If a valuation has been fixed and there is not agreement, will there be any machinery, any form of arbitration, to reconsider the price suggested by the surveyor or local council? One can imagine disputes arising and I am wondering whether anything will be done to help the prospective purchaser to obtain another opinion on the valuation of a house.

Lord HOWIE of TROON

The noble Lord, Lord Mackie of Benshie, drew attention to differences between different parts of Scotland and he instanced prices in Fort William, on the one hand, and Aberdeen, on the other, and certainly house values are very different in those places because the demand is different. Houses are at a premium in Aberdeen and it seems somewhat divisive to propose a situation in which council house tenants in Aberdeen—I mention that city only by way of example and not to pillory it in any way—should receive such an advantage when their fellow citizens who are not in council houses have to buy their houses on the open market, and the difference in value between Aberdeen council houses and property on the open market might be considerable. The advantage then would be increased; it would still be 33 per cent. but it would become that much greater compared with open market values.

That brings me to the point raised by my noble friend Lord Galpern when he spoke about the method of valuation. Obviously council houses in this category must be valued in some way and it must be done by a professional man doing a proper job. Undoubtedly a number of houses will be sold and perhaps some of them will be re-sold. We shall then have the situation where there will be two possible values for a council house, the theoretical value derived by the valuer and the re-sale value which, as time goes on, will become an increasing proportion of the whole.

As more and more houses are sold, does the valuer then adopt the market value as the value, or does he continue with the same kind of calculations of a theoretical nature that he has carried out in the past? The Government should think very carefully here and should try to ensure that the disparities caused by these discounts are as narrow as possible; otherwise they will create in society unnecessary division where is does not already exist.

5.40 p.m.

The EARL of MANSFIELD

For the moment I shall confine myself to the four amendments that we agreed would be considered in this package, as I described it; that is, Amendments Nos. 7, 8, 9 and 14. If these amendments were agreed to, the totality of their effect would be to remove the right to discount so that all the sales would in effect be at full market value. The noble Lord, Lord Ross, in his Amendments Nos. 10 and 11 proposes different figures for what he considers the discount might be, but so as not to muddy the debate, I shall confine myself for the moment to the four amendments that I mentioned earlier.

I say right away that the provision of discounts as part of the right to buy is one of the fundamental features of the policy. We make no bones about the fact that we are making a genuine attempt to give as many council tenants as possible a real choice between owning and renting, and I admit that, unless there are substantial discounts, a large proportion of tenants will not have a genuine opportunity to buy.

As the noble Lord, Lord Mackie of Benshie, has pointed out, the availability and amount of discount will increase mobility of labour, because more people will be able to buy their homes, and there is overwhelming evidence that owner-occupiers are more mobile than are public tenants. Public tenants often have to stay where they are by virtue of the local authority's allocation policies. So in a situation in which we want to encourage the maximum mobility of labour—I think that this was behind the point of the noble Lord, Lord Mackie—that maximum mobility depends to an extent on ownership of homes.

Lord MACKIE of BENSHIE

May I interrupt the noble Earl for a moment? How will that point apply in the case of Aberdeen, which we keep mentioning? Surely people presently occupying houses there will be buying them, and certainly they do not want to move out of Aberdeen. It seems to me that in Aberdeen it is necessary to provide more houses because the population is growing.

The EARL of MANSFIELD

Yes, and, as my noble friend Lord Drumalbyn said earlier, one way to provide more housing is through the injection of cash made available by the sale of houses. Aberdeen is a most volatile society, due to all the different things that are happening there regarding new industries. If people there wish to move, because they get a better, or different, job in another part of the country, what better chance have they of availing themselves of such opportunities if they own their own homes and can sell them. This is an important part of the thinking.

Experience over the last year of voluntary sales shows that with the discounts, many thousands of tenants are keen to buy their homes, and it is only the blind intransigence of Labour-controlled local authorities that forces large numbers of them to wait until the Bill is to be enacted before they can realise their ambitions regarding home ownership.

Next we should look at the discounts. They are not an unwarranted benefit to tenants. If noble Lords examine Clause 1(5)(a) of the Bill, they will see that the discounts are in fact against a fictional basis for valuation: the supposition that the house is available for sale on the open market with vacant possession". That is not the case in the public sector. The house has a sitting tenant with security of tenure, and, as some noble Lords will know to their cost, in the private sector sales of houses with sitting tenants take place at substantially lower prices than is the case with houses with vacant possession. It is impossible to state a general rule, but advice has been taken from the Chief Valuer for Scotland, and on average the reduction in price is in the order of 40 per cent., due to the sitting tenant with security of tenure. While our discount scheme does not provide a single flat rate of discount, it reflects the realities of the market. That is the answer to the question of what happens as between Aberdeen, which in terms of housing is intensely desirable, and Fort William, which because of its present difficulties is less desirable. The noble Lord, Lord Ross, implied in effect, if he did not say so outright, that in the legal sense the sale of houses in such a case was a fraud on the public purse; that it is quite unfair to the public purse that sales of houses at a discount should take place in this manner. I hope to show that that is simply not the case.

The Financial Memorandum to the Bill illustrates the very substantial short-term savings, and these continue in the medium term. It is generally recognised that analysis of the long-term financial effects of sales is extremely dependent on the assumptions made about rents, interest rates, inflation, and a variety of other factors, and that this limits the value of any such analysis. However, in January the Government published a long and detailed analysis, which the noble Lord, Lord Ross, at any rate has looked at, and this examined 24 different combinations of key assumptions. The results, based on Scottish data, which were made available separately, showed that there was not a single one of those combinations of assumptions which resulted in net loss, even over a 50-year timescale. I hope that that disposes of the point about the loss to the public purse.

I was asked another question by the noble Lord, Lord Galpern, and, I think, the noble Lord, Lord Howie of Troon, about the mechanics of the valuation. The position is that the tenant can choose whether to accept the local authority's choice of valuer or the district valuer. Once the tenant has done that and the valuer has made his valuation, it is beyond appeal, as is normal custom. I hope that with regard to the question of discounts, as opposed to full market value, it will be seen that the discounts give a very considerable impetus to the tenants in the public sector to buy their houses.

Lord GALPERN

The noble Earl has made one point very clear to the Committee, and that is that the substantial discounts are the main attraction, are the carrot which is being dangled in front of the sitting tenant; but he goes on to try to soften the amount of discount by indicating that, because it is the sale of a house with a sitting tenant, the value for sale will be substantially less than if it had been a house which was untenanted. Does he realise, then, what a rush there could be? Because the individual, if he is smart enough, will be buying a house even below its market value because it is tenanted. All right; at the time he gets a lower discount than he would have got if it had been an untenanted house, but all he has to do is to wait for the qualifying period and then he can offer an untenanted house at a far higher price than the one for which he got a reduced discount because of the fact it was a tenanted house.

Baroness PHILLIPS

As an Englishwoman I hesitate to intervene in this Scottish debate, but a point which the Minister made mystified me. He said that owner-occupied houses presupposed greater mobility. I am chairman of governors of a school, and I can tell him that anybody seeking to move from Scotland, even if they are selling their house, cannot possibly purchase a house in the South-East at anything vaguely like the same price. So often do we find that the young professionals are totally immobilised because the values are so very different according to the area in which they are living. I feel it would be unfortunate if it remained on the record that everybody who owned a house had greater mobility, because that is not so.

Lord DRUMALBYN

May I say a word about that? If I understand the position properly, the answer to the point made by the noble Lord, Lord Mackie, is surely this, that values of houses in areas with high unemployment will tend to fall. Is that not so? And these areas of high unemployment are just the areas which want to attract industry. What happens very often is that industry will not go to a particular area because there is a deficiency in that area of certain classes of skilled labour. There must be difficulties, as of now, in getting those classes of skilled labour to move; but if, as I am postulating, the rents in the areas to which we are trying to attract industry are lower, there will be a greater attraction for the skilled workers to move, particularly from areas in which they can sell their houses at high prices. So they will make a double gain, and I should have thought it was bound to increase the willingness to be mobile. No one can say whether it will increase mobility, but it could at least set the scene to make it easier for people to move. But on that point I think the second answer to the noble Lord is to look at Clause 26, which is purely on the question of the allocation of public authority houses. There, special attention has to be given to the question of mobility, so that priority can be given, when necessary, to mobility. But that is another question we shall come to in due course.

I think that perhaps the noble Lord, Lord Galpern, is seeing things too much in the present pattern, in the pattern fixed by the market at the present time. The changes which are being made are, I am quite certain, going to change the market very considerably, and I do not think he can look forward to the situation in years to come and say that at the end of the period when the tenant has, so to speak, worked off the discount and is free to sell, the situation will be the same as it is now. I think it will be very different. I think this Bill will give the whole thing a shake-up.

5.54 p.m.

Baroness SEEAR

Like the noble Baroness, Lady Phillips, as an Englishwoman I hesitate to say anything, but the question of mobility is most important and, like Lady Phillips, I was extremely surprised to hear the noble Earl say that this was going to increase mobility. There is no doubt that the inability of people to move about the country and get housing is a real block in dealing with problems of unemployment, and it is a priority matter. If you are in a Fort William situation and you own a house, the value drops because there is not employment there. If you want to move where there is a job, the house you wish to buy there is going to be very much more expensive than the house you have owned in the Fort William area. Therefore, the ability of people who live in areas where work has disappeared to move is handicapped very considerably by the ownership of houses. I am very much in favour of the ownership of houses, but do not let us have the argument that it is going to help mobility.

With the greatest respect to Lord Drumalbyn, I find his argument a little difficult, because, all right, you want to attract employers of skilled people into areas of unemployment, and therefore cheap housing, the noble Lord is arguing, will help to do this. But if people have been able to buy their council houses in such areas, then there will be fewer, not more houses available for people to move into, surely. You are again making the mobility question more difficult, not easing it—and it is a matter of priority.

Lord MACKIE of BENSHIE

Perhaps I may intervene, as reference was made to me. If I may make a point, it is very difficult to get a specific industry to move to areas like Fort William. My noble friend Lord Thurso and I have specific knowledge of trying to set up industry in an area remote from other industry, remote from the services and remote from the customers. It is enormously difficult to do; and, although we have tried hard and we have been successful in a number of areas, there is really much more need for people to move to the areas where there is a great need for employment than there is a willingness among employers to move to areas like Fort William.

Lord HOWIE of TROON

I should like to revert for a moment to the question which I raised, and which the noble Earl replied to, about the machinery of valuation. As I understand the Bill, the initial valuation is done by experts as if the house was in an open market and untenanted. That is a theoretical position, and, quite properly, it is the only position in which it can be valued. There then follows a period in which sales and resales take place, and there develops, presumably, some kind of local resale market in former council housing. In some areas the value of these council houses will rise due to the localised demand in housing, and in other areas the value of these houses which have been once sold will fall. Do we assume, then, that the valuation is based on the local resale market, or is there still an element of theory about it? Because if it comes to the realistic market price, that seems to reinforce what I said earlier on about the divisive nature of this bargain sale: that the bargain will be a greater bargain, very desirable, in some parts of the country, but much less so in other parts of the country. I do not really see that as terribly socially cohesive, and I am sure the Minister will not, either.

Lord GLENKINGLAS

Before my noble friend answers this short debate, can he perhaps help me by letting me know how, if his scheme is a success, the valuations are in fact going to be achieved? My experience has been that the district valuers are already enormously heavily pressed, and sometimes take two or three years to come to value things. If we are going to have a lot of houses, then how are the district valuers going to cope and where are they going to get the staff to carry out the valuations?

Lord ROSS of MARNOCK

I think we have pretty well covered the Question, Whether the clause shall stand part? We are dealing with art amendment in relation to the discounts.

The EARL of MANSFIELD

I wonder whether the noble Lord will allow me to reply if he is about to sum up the debate, because one or two things have been put to me. May I say a word on mobility? With these ferocious ladies from the golden triangle, I am not making a great claim about mobility, particularly so far as the South-East of England is concerned. What I say is that, bearing in mind—

Baroness PHILLIPS

If the Minister thinks that we are ferocious, he has not seen us in action.

The Earl of MANSFIELD

I do not think I have seen the noble Baroness in action but I have often heard her.

Prices vary from area to area. It must be so if one has a free market and there are economic factors in different parts of the country which are going to make a tremendous difference so far as prices are concerned. My point, which is a limited one, is that at least if you own your own house you have an asset to dispose of and some funds, if you do so, which go towards your next house. That is the simple point. If you live in rented accommodation, you have no financial base upon which to move. As I have said, one is then likely to be dependent upon the housing authority, the local authority, in the area to which one wishes to move. I make no greater claim for that point than that, but I think that it is a valid one.

So far as the noble Lord, Lord Howie of Troon, is concerned, I can do no more than direct his attention to the clause which, in 5(a), sets out how the district valuer or qualified valuer will set about his task. There will be differences in value as between Fort William and Aberdeen, because of the economic situations which obtain in those two towns; but the basis on which the valuation will be made will be exactly the same according to in whichever area the house happens to be at the time the valuation is made. So far as the last point that my noble friend made, in resource terms, I have to confess that I do not know what will happen so far as district valuers are concerned. The task of valuing a council house would be very considerably less than that of valuing perhaps a scattered estate for capital transfer tax purposes. I do not anticipate that such would pose nearly the same problems; but if there are resource difficulties posed by this new Bill becoming law, then they will have to be faced.

Lord ROSS of MARNOCK

I thought that we should get many arguments about the discount—whether it is too large or too small—but I never thought that we should get one about the mobility of labour. If we are on the subject of mobility of labour—and it was the noble Lord, Lord Mackie of Benshie, who introduced it and the question of attracting new industries—if we had to depend on the mobility of owner occupation for the attraction of new industry, the pulp mill at Fort William would never have been built there. It was the local authority, sponsored by the Government, who saw that the houses were built. The firm building them, Logan, went bankrupt. The result of that was that we had to get the Scottish Special Housing Association to move in to take over the contract. But it was important and it was done.

That is what I have been talking about—the feelings of the local authorities in respect of their housing and the problems that they have had to face in what they have done at the behest of Government. Now the Government say: "You will sell at this price and there will be this discount". I see ex-Secretaries of State sitting opposite. We had the same problem with the motorcar industry. That meant a tremendous build up of rent in Erskine.

Lord GLENKINGLAS

I am grateful to the noble Lord for referring to me in that way. I think that in every case in which we brought in new, big industries to Scotland, it was not the local authorities, but the Scottish local housing which built the houses.

Lord ROSS of MARNOCK

Precisely. It is a mystery to me that it is not abolished in this Bill. Perhaps it will come in the next Bill. I should not have put the idea into the heads of the Scottish authorities. The Scottish Special Housing Association built houses in Fenwick and just outside my constituency, at Symington (not the one in Lanarkshire) and they built them for young executives who could not afford to buy their way into owner occupation; and let them—they were specially-built houses—at economic rents. These houses, too, will go for sale under the Bill, with a discount. Is that fair? Of course it is not. Admittedly, there would be a discount to take into account the difference in value in respect of vacant possession, but in these particular cases, with due respect to the noble Lord, it is not 40 per cent.

My argument is that in the circumstances, this discount is far too high in respect of somebody who has been there for three years—as we have decided it now: but we hope it might he changed to five years. The noble Lord, Lord Strathclyde, spoke about the length of time that these houses have been built and the extent to which they were debt-free. Half of them will be debt-free now; because these houses were built before the war and they were built with money borrowed over 40 years. But local authorities consolidate their debt charges and the result is that the benefit of that reduction is going to the ratepayer at the present time and it is going to try to keep down the levels of rents that would be otherwise far too high. The more of these houses that we sell, the worse will be the position for the local authority. The suggestion that we should sell these at anything below market value—tell that to the private owner!—really would be a bit unfair. We are going too far with the market value minus the 33 per cent. going up to 50 per cent.

On the question of mobility, there is a demand for houses at the moment in the Shetlands. They cannot meet their own waiting lists. The information I obtained yesterday—and I should like the noble Earl to check this—is that for the replacement of an ordinary house which goes off the housing stock the cost is £63,000. The noble Earl laughs. I do not know whether he knows the Shetlands. I had the good fortune, or misfortune, to serve there during the war with the HLI. There is not a tree in the place. Every piece of stone, every piece of wood, every piece of material, has to be brought in at considerable expense. When you consider the cost of labour, the cost of materials, the cost of transport, you begin to appreciate there why there is this cost. Probably the noble Earl does not know (although I hope he does) that we have a subsidy for the Highlands and Islands. Because of that they get an even higher subsidy in order to help build these particular houses.

All of the finance statement that he spoke about is destroyed by one simple fact. If you sell a house and then you must build another to meet the need that still remains, then you are very much out of pocket. According to the England figures for the first half, 1979–80, the average house price before discount, is £12,000. If you sell one for £8,000 or for £6,000 and build one which will cost £15,000, I should like to know how we make a profit out of that. It becomes worse the greater you make the discount.

Lord MACKIE of BENSHIE

If the noble Lord will allow me to intervene, I have heard that there are certain elements of local housing where the cost of maintenance exceeds the return from the houses. I know, for example, of an instance in Liverpool, where it costs £10 to mend a washer on a tap. Surely he is carrying his argument a little too far, in that owners of houses maintain them rather more competently and cheaply than do local authorities.

Lord ROSS of MARNOCK

I hope we shall have an opportunity to discuss this further, but it would be quite wrong to suggest that all local authorities and all houses of all local authorities are in that position. That is not true of the houses in the part of the world that the noble Lord knows best. The noble Lord should not start to draw a general deduction from an isolated example; it is quite wrong. I have known the noble Lord for a long time, and I am not surprised that he does. I suggest that we are being unfair to the local authorities here. We are being unfair to ratepayers generally. I will not move the amendment that would remove the discount altogether, but I will move Amendment No. 10, I think it is, which deals with the reduction from 33 per cent. to 15 per cent., and with that I would have in mind the reduction from the maximum of 50 per cent. discount to 25 per cent.

On Question, amendment negatived.

[Amendments Nos. 8 and 9 not moved.]

6.12 p.m.

Lord ROSS of MARNOCK moved Amendment No. 10: Page 2, line 37, leave out ("33") and insert ("15").

The noble Lord said: I beg to move this amendment formally.

The Earl of MANSFIELD

We now come on to the second part of the argument which I specifically did not address myself to in the earlier part of our deliberations, when I was a great deal shorter than some; and I shall be that now. I want to direct my remarks particularly to the noble Earl, Lord Perth, who thought that the scale of possible discount was on the generous side; I believe that is putting his point of view fairly accurately. What I have to tell the Committee—and this is what is in the Bill—is that the district valuer, if it is he who is making a valuation, will in fact have to value the house at a full open-market valuation with vacant possession. I stress the last part of that phrase, because what the house does not have is vacant possession. It has in it a sitting tenant, with security of tenure, and, as I told the Committee, on advice which the Government received from the chief valuer for Scotland, that average is a discount of 40 per cent.

What we are doing in this Bill is to provide, first of all, an inducement for people to buy their houses; and I think most noble Lords will agree that if that inducement is not provided they will not come forward and buy them. That is the law of nature. So the scales range from 33 per cent. at the bottom for the tenant who has been but three years in his house, which is below the 40 per cent. average, to 50 per cent., which I concede is 10 per cent. above the 40 per cent., for the tenant who has been 20 years in his home and whom one could say was likely to be a reasonably steady and meritorious citizen. So, in effect, rather than giving a flat rate of discount overall, which could very well have been 40 per cent., at which, on the figures, as I have suggested, would not have been a fraud on the public purse, would not have been unconscionable, would not have been improper in any way—and I take issue, though not at length, with the last remarks of the noble Lord, Lord Ross of Marnock, on the previous amendment—we have spread the benefit either side of the figure of 40 per cent., so that according to the length of tenancy in a publicly-owned house the figure will fluctuate, because we believe that most people will regard this as a fairer method of proceeding.

It is important that the discount should be large enough to give a really sizeable proportion of tenants, a large number of tenants, a real choice between owning and renting. The noble Lord, Lord Ross, would argue that the smaller the discount the greater the benefit to public expenditure. That may be, although I do not agree, but the general truth about all transactions between anybody who is going to buy or sell is that one cannot sell anything for a greater price than the market will bear. If we do not enable tenants to buy their houses, then we shall be left with these loss-making assets which, as the noble Lord, Lord Mackie, said in the last debate, make a tremendous call every year on the taxpayer and ratepayer. That is the way in which I justify these figures in the Bill, and therefore I would ask your Lordships to reject the somewhat specious range of discounts put forward in Amendments Nos. 10 and 11.

The Earl of PERTH

Since the noble Earl mentioned me in particular in relation to this amendment, I should like to say that I do not quarrel with the fact that there is a considerable inducement to encourage people to buy. The only point I made was that someone who has lived there for only three years is perhaps getting away with something rather fortunate. I would hope that the noble Earl would take that point, not so much in relation to this amendment as in relation to Amendment No. 5, which has already gone its way. He said at that time that he would consider again whether three years was not too short a period. I would hope that in that connection he would bear that in mind when he considers Amendment No. 5, which has already been dealt with.

Lord ROSS of MARNOCK

I do not think the noble Earl said much that he had not said before, because I remember him mentioning this figure of 40 per cent., which I personally do not accept, for the simple reason that this market has not yet been tested. It is wrong to suggest that 40 per cent. is the right figure and then to say that one is being fair to a person who is entitled to 33 per cent. discount. One is being very unfair. Being more fair to somebody else does not justify being unfair to any individual. The noble Earl said that if the phrase "with vacant possession" had not been there, there would have been a reduction in market value of 40 per cent. He cannot possibly justify 33 per cent. He is being unfair to that tenant.

But all the argument is on his side. I am not in favour of the discount at all; I would rather have had the words "vacant possession" left out. I followed the arguments in another place, and the suggestion was that the person who had been there for 20 years paying rent—the phrase used by one Member, who shall be nameless, was "hard-earned wages"—was entitled to this discount. We have spent 20 years saying that he has been far too well off because he has been getting a subsidised rent, and then we have got to give him not only the right to buy the house but to buy it at lower than market value with this discount. I think the discounts are still too high. In this muddled Bill it is not the first aspect that is wrong, nor is it the last one.

Viscount THURSO

The discounts are indeed too high. The noble Earl has not explained this to us. What will be the differential when all these houses come on the market? At the moment maybe the difference is 40 per cent., between owner-occupied and non-owner occupied. Once all these houses become available for purchase, is the figure not going to change? I cannot help feeling that the difference between rented and vacant possession houses is going to narrow very considerably.

Lord DRUMALBYN

The noble Viscount, Lord Thurso, may well be right. The point is that one has to adjust the figure—this is a matter of judgment—not just to bring the houses on the market, but to ensure that they will be sold. If one merely brings them on the market and the discount allowed is not big enough to sell them, then one's efforts will be wasted. The noble Lord, Lord Ross of Marnock, said that one does not know what the houses are going to be sold at; it has not been decided. The only test is when they come on the market. But a judgment has to be made to get things moving. Nobody has put forward any other credible judgment to put against the careful judgment which has been made by the Scottish Office.

Lord ROSS of MARNOCK

We have some slight experience. Local authorities have been selling the houses without these fantastic discounts.

6.22 p.m.

On Question, Whether the said amendment (No. 10) shall be agreed to?

Their Lordships divided: Contents, 69; Not-Contents, 86.

CONTENTS
Ailesbury, M.	Greenway, L.	Ponsonby of Shulbrede, L. [Teller.]
Bacon, B.	Grey, E.
Baker, L.	Hale, L.	Rathcreedan, L.
Balogh, L.	Hall, V.	Rochester, L.
Beswick, L.	Hampton, L.	Ross of Marnock, L.
Birk, B.	Hatch of Lusby, L.	Seear, B.
Blease, L.	Houghton of Sowerby, L.	Segal, L.
Blyton, L.	Howie of Troon, L.	Stewart of Alvechurch, B.
Boston of Faversham, L.	Janner, L.	Stewart of Fulham, L.
Bowden, L.	Jeger, B.	Stone, L.
Brockway, L.	Kaldor, L.	Strabolgi, L.
Brooks of Tremorfa, L.	Lee of Newton, L.	Taylor of Gryfe, L.
Bruce of Donington, L.	Llewelyn-Davies of Hastoe, B.	Taylor of Mansfield, L.
Craigavon, V.	Lovell-Davis, L.	Thurso, V.
David, B.	McGregor of Durris, L.	Underhill, L.
Davies of Penrhys, L.	Mackie of Benshie, L.	Wallace of Coslany, L. [Teller.]
Diamond, L.	MacLeod of Fuinary, L.	Walston, L.
Donaldson of Kingsbridge, L.	McNair, L.	Wells-Pestell, L.
Fulton, L.	Maelor, L.	Whaddon, L.
Gaitskell, B.	Monson, L.	White, B.
Galpern, L.	Oram, L.	Wigoder, L.
Glenamara, L.	Peart, L.	Winstanley, L.
Goronwy-Roberts, L.	Phillips, B.	Wootton of Abinger, B.
		Wynne-Jones, L.

NOT-CONTENTS
Airey of Abingdon, B.	Geoffrey-Lloyd, L.	Murton of Lindisfarne, L.
Allerton, L.	Gibson-Watt, L.	Netherthorpe, L.
Alport, L.	Gisborough, L.	Newall, L.
Auckland, L.	Glenkinglass, L.	Northchurch, B.
Avon, E.	Gray, L.	Pender, L.
Balerno, L.	Gridley, L.	Perth, E.
Balfour of Inchrye, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Rawlinson of Ewell, L.
Bellwin, L.		Redmayne, L.
Belstead, L.	Harvington, L.	Reigate, L.
Bessborough, E.	Henley, L.	Ridley, V.
Boyd of Merton, V.	Home of the Hirsel, L.	Rochdale, V.
Clifford of Chudleigh, L.	Inchyra, L.	St. Aldwyn, E.
Clitheroe, L.	Kemsley, V.	Saltoun, Ly.
Cockfield, L.	Killearn, L.	Sandys, L.[Teller.]
Cork and Orrery, E.	Kimberley, E.	Selkirk, E.
Craigmyle, L.	Kinnoull, E.	Sempill, Ly.
Craigton, L.	Kintore, E.	Sharples, B.
Cullen of Ashbourne, L.	Lauderdale, E.	Soames, L. (L. President.)
De La Warr, E.	Lindsey and Abingdon, E.	Stamp, L.
Denham, L.	Long, V.	Strathclyde, L.
Drumalbyn, L.	Lyell, L.	Strathcona and Mount Royal, L.
Dundee, E.	Macleod of Borve, B.	Strathspey, L.
Eccles, V.	Mancroft, L.	Sudeley, L.
Ellenborough, L.	Mansfield, E.	Teviot, L.
Elton, L.	Marley, L.	Trefgarne, L.
Falkland, V.	Merrivale, L.	Trenchard, V.
Ferrers, E.	Montgomery of Alamein, V.	Vaizey, L.
Ferrier, L.	Mowbray and Stourton, L. [Teller.]	Vaux of Harrowden, L.
Fortescue, E.		Vivian, L.
Gainford, L.

Resolved in the negative and amendment disagreed to accordingly.

[Amendment No. 1l not moved.]

6.29 p.m.

Lord ROSS of MARNOCK moved Amendment No. 12: Page 2, line 47, at end insert ("; and (c) in calculating the discount no account shall be taken of the element of market value of the house which reflects an increase in the value as a result of modernisation of major maintenance carried out by the landlord after 15th May 1975.").

The noble Lord said: In calculating the discount, I suggest that no account should be taken of the element of market value of the house which reflects an increase in the value as a result of modernisation on major maintenance carried out by the landlord after 15th May, 1975. The date is reasonably arbitrary. I say "reasonably" because it is already in the Bill; it refers to the date of reorganisation of local authorities. One can appreciate very considerably that the cost of modernisation now amounts to thousands of pounds. It would be quite unfair to give away an element of that—33 per cent. or 50 per cent.—in discount. It is a relatively simple amendment but important from the point of view of the eventual price that will come to the local authority. I beg to move.

The Earl of MANSFIELD

I think that there is a major misunderstanding about the financial considerations which are relevant to selling council houses and I will attempt to explain it. It is frequently suggested that the fact that an authority has spent a certain sum of money on a house in the past is relevant to what it ought to obtain for it in selling it. This overlooks the fact that once money has been spent by an authority, nothing will bring it back and the only sensible way of looking at the financial implications of a choice between two options is by looking at the future income and expenditure connected with each of those options. In the case of the choice between renting and sales, the balance of financial advantage lies firmly with selling, as I have indicated already in previous debates, and any change in the terms of sale which makes it less likely that people will buy, such as the one proposed in this amendment, will therefore have the consequence that more public expenditure will be required to subsidise the retention of the house for renting. Far from being good, financial sense this amendment would leave the taxpayer and ratepayer worse off.

Even if one accepted the other way of looking at it and had regard to past costs, this amendment offers an inconsistent approach. Houses which have had substantial works done to them will be older houses, which will have been built for sums which are very small compared to present-day house values, so that the tenant is, on the one hand, to be asked to pay much more than the house cost because its value has gone up, but, on the other hand, is to be denied discount because of the cost underlying part of its value. Whichever way one looks at it, the logic behind this amendment is what I might describe as somewhat muddled. I hope that the noble Lord will withdraw it.

Lord DRUMALBYN

My Lords, is it not fallacious to take improvements made to a house as necessarily adding proportionately to the value of the house? One knows from one's own house, when one has made an improvement that has cost a lot of money, that that improvement is sometimes not reflected in the value of the house when one comes to sell it. That is a common experience. That being so, I fail to see why it should be necessary to say that this will not affect the discount. The discount comes from the market value of the house and has no near connection—I was going to say no necessary connection, but no near connection—with the cost of improvements done.

Lord ROSS of MARNOCK

If that were the case, I am surprised that the noble Lord has not got an amendment down to subsection(6). I am sure he is consistent and will follow this all the way through. If he reads subsection (6), he will see that it says: For the purposes of subsection (5)(a) …"— —that is the discount— no account shall he taken of any clement in the market value of the house which reflects an increase in value as a result of"— and so on. The Government are saying that: it is not me saying that. So that will probably change the noble Lord's attitude altogether.

I do not accept the arguments of the Minister in respect of this matter. One must consider just exactly the position; here is somebody who has got to stay in a house for three years; within that three years maybe he has already fixed the price and even after the price has been fixed the local authority may be in the process of spending money modernising the house; and he gets all that for nothing.

I think the only sensible thing to do in respect of this is to fix the date at the date of reorganisation, and if the local authority has spent a considerable sum of money, maybe thousands of pounds, then that will be in the calculation for the market value. I am not quarrelling with that, but, as to discount, I do not think he should get the full value of that expenditure for the discount: that should be ignored so far as calculating the discount is concerned.

I am far from satisfied with the explanation that the noble Earl has given. I think he is trying to find some way of introducing this document and showing what a great bonanza all this is for the local authority. He talked about repairs. My goodness! if you have just done major repairs and modernisation, that is the kind of house on which you will be spending less on repairs. This really

[Amendment No. 13 not moved.]

does not add up, and I think the inconsistency of the arguments proves my case that this amendment should be accepted.

6.37 p.m.

On Question, Whether the said amendment (No. 12) shall be agreed to?

Their Lordships divided: Contents, 53; Not-Contents, 85.

CONTENTS
Ailesbury, M.	Hale, L.	Ponsonby of Shulbrede, L.
Bacon, B.	Hall, V.	Rathcreedan, L.
Balogh, L.	Hatch of Lusby, L.	Ross of Marnock, L.
Beswick, L.	Houghton of Sowerby, L.	Shackleton, L.
Birk, B.	Howie of Troon, L.	Stamp, L.
Blease, L.	Janner, L.	Stewart of Alvechurch, B.
Blyton, L.	Jeger, B.	Stone, L.
Boston of Faversham, L.	Kaldor, L.	Strabolgi, L. [Teller.]
Bowden, L.	Kilmarnock, L.	Taylor of Gryfe, L.
Brockway, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Taylor of Mansfield, L.
Bruce of Donington, L.		Underhill, L.
Crowther-Hunt, L.	Lovell-Davis, L.	Wallace of Coslany, L.
David, B.	McGregor of Durris, L.	Walston, L.
Davies of Penrhys, L.	Maelor, L.	Wells-Pestell, L.
Donaldson of Kingsbridge, L.	Monson, L.	Whaddon, L.
Gaitskell, B.	Noel-Baker, L.	White, B.
Galpern, L.	Oram, L.	Wootton of Abinger, B.
Glenamara, L.	Phillips, B.	Wynne-Jones, L.

NOT-CONTENTS
Airey of Abingdon, B.	Fortescue, E.	Murton of Lindisfarne, L.
Allerton, L.	Gainford, L.	Netherthorpe, L.
Auckland, L.	Gibson-Watt, L.	Ncwall, L.
Avon, E.	Gisborough, L.	Northchurch, B.
Balerno, L.	Gray, L.	Pender, L.
Balfour of Inchrye, L.	Greenway, L.	Perth, E.
Bellwin, L.	Gridley, L.	Rawlinson of Ewell, L.
Belstead, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Reigate, L.
Bessborough, E.		Rochdale, V.
Boyd of Merton, V.	Hampton, L.	Rochester, L.
Broadbridge, L.	Harvington, L.	St. Aldwyn, E.
Clifford of Chudleigh, L.	Henley, L.	Saltoun, Ly.
Clitheroe, L.	Home of the Hirsel, L.	Sandys, L. [Teller.]
Cockfield, L.	Kemsley, V.	Seear, B.
Cork and Orrery, E.	Killearn, L.	Selkirk, E.
Craigavon, V.	Kimberley, E.	Sempill, Ly.
Craigmyle, L.	Lauderdale, E.	Sharpies, B.
Craigton, L.	Lindsey and Abingdon, E.	Soames, L. (L. President.)
Cullen of Ashbourne, L.	Long, V.	Strathclyde, L.
De La Warr, E.	Lyell, L.	Strathspey, L.
Denham, L.	Mackie of Benshie, L.	Sudeley, L.
Drumalbyn, L.	Macleod of Borve, B.	Teviot, L.
Dundee, E.	McNair, L.	Thurso, V.
Eccles, V.	Mancroft, L.	Trefgarne, L.
Ellenborough, L.	Mansfield, E.	Trenchard, V.
Elton, L.	Marley, L.	Vaizey, L.
Falkland, V.	Montgomery of Alamein, V.	Vaux of Harrowden, L.
Ferrers, E.	Mowbray and Stourton, L. [Teller.]	Vivian, L.
Ferrier, L.		Wigoder, L.

Resolved in the negative, and amendment disagreed to accordingly.

The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger)

I have to call your Lordships' attention to the fact that if Amendment No. 14 should be agreed to I shall not be able to call Amendments Nos. 15 to 23 inclusive.

6.46 p.m.

Lord ROSS of MARNOCK moved Amendment No. 14: Page 3, line 33, leave out subsection (10).

The noble Lord said: Here we have a very, very lengthy list of persons referred to in subsection (3) regarding the right to purchase and I want to query this as to its fairness, and as to whether or not the Government have had any other second thoughts about who else should be included. It takes one's breath away when one appreciates that the right to purchase will be given to anyone in these categories: the regional or district councils in Scotland—anyone who has been employed by them in any capacity and housed by them; and then there is the commission of a new town. If you move out of a new town into a local authority —it does not matter whether it is near or far—you then have an entitlement right away if you have completed the three years. In another place, the Government added the Forestry Commission to this.

This is only of value to anybody if they become a secure tenant under a local authority or, in other words, if the local authority gives them a house. Can the Minister give me any justification for this regarding anyone who has served with the fire authority, the water authority, the prison service or the Crown in relation to accommodation provided, or in connection with service by the tenant or occupier who is a member of the regular armed forces or where the house is used for the purposes of the health board? Then we get the Department of Health and Social Services in Northern Ireland and the Health and Personal Services Board of Northern Ireland and the statutory predecessor of any such board, and the Forestry Commission. It is a very considerable burden that is being placed on local authorities, if you were to say that they were under an obligation to house anyone who left any of these other houses. How do the Government justify all this? How many people do they think will be involved in transfers of this kind? They must have some statistics. This is really a probing amendment. I am fascinated by the list and I wonder whether the list is enough. Also, I wonder just exactly what is involved within it.

Of course, people do not acquire any rights until they are rehoused by a local authority and I raise a question which I think is important: What is the position at the moment? Are local authorities rehousing these people? What makes the Government think that once this Bill is passed the local authority will continue to rehouse these people, knowing that if they are rehoused after even a day has passed they can buy the house? I know the noble Lord, Lord Drumalbyn, thinks it is a great thing, but I am not interested entirely in what he thinks but in what the local authorities think and how they will react. If beneficial procedures are being applied, non-statutory at the present time, in respect of rehousing people in all these categories of houses, will that continue after the passing of this Bill? I beg to move.

The Earl of MANSFIELD

I am bound to say that I do not find it at all easy to reply to the amendment proposed by the noble Lord. The various persons, referred to in subsection (3), who have their rights referred to there, are then set out in subsection (10), as the noble Lord has said. It seems to me that this is a fairly extensive list of public authorities, the employees of which are deemed to be (what shall I say?) worthy enough to have the rights that are laid down, which are similar to those enjoyed by public sector tenants.

When I gave vent to my explanation which was rather more enthusiastic than accurate, and for which I subsequently apologised to the noble Viscount, Lord Thurso, I think I then tried to explain that there are various classes of people who, for one reason or another, should be put in a favoured position by virtue of their employment, and in many cases they have to inhabit different houses from those which they would inhabit if they were in more ordinary occupations.

I take it that the noble Lord is referring to paragraph (f) downwards. I am afraid I have no figures as to the number of people who it is estimated could take advantage of the subsection. I will try and obtain them for the noble Lord and let him know before the next stage of the Bill. But I think that my colleagues, when they came to draft the Bill, merely—if one can use the word "merely" about such a magnum opus as this—sat down and considered those who were to be ad- vantaged. This is the result of their deliberations. I do not think I can help the Committee any more at this stage.

Viscount THURSO

This clearly has to be a probing amendment, because to leave this whole section out of the Bill would wreck it and it is obviously not intended to be a wrecking amendment. Now there are one or two questions that arise. Perhaps the noble Earl, Lord Mansfield, can help us with these questions. I take it that anybody who lives in one of these houses mentioned in this list of categories can buy that house. He does not necessarily have to buy a council house, does he? He could buy the house that he lives in. If that is so, this surely presents fairly major problems because some of the houses, for instance, are remote doctors' houses. Paragraph (m) refers to the statutory predecessors of the Health and Personal Services Board in Northern Ireland, the Department of Health and Social Services, and so on, and the National Health Services (Scotland) Act, and this refers to the houses which were set up by the old Highlands and Islands Panel—the old doctors' houses in villages in very remote communities.

If suddenly a doctor who now occupies a house decided that he liked the community and wished to retire from medicine and would like to buy his house at a discount, he could get a very large and comfortable house at a very low price. The community would find it extremely difficult to get a new doctor. This surely cannot he meant.

Likewise, if you take a forestry house, or perhaps one or two remote cottages in a forestry area which had been set up to provide enough resident workers on the spot to cope with the forestry plantation. If you think of somebody who, after say three years of permanent argument with his employers, gets the sack, he could demand to buy his employers' house at a discount and live in it. He could say that he was a forestry worker and he could not find any employment round about, and you have a whole series of ridiculous situations which one can envisage with very small quantities of houses. Can the noble Earl clear this point up for me—

Lord DRUMALBYN

If I may answer—

The EARL of MANSFIELD

If I might intervene, I wonder whether the noble Viscount has finished.

Viscount THURSO

I think I have made the point, I am probing and was asking the question in relation to these small numbers of houses. I do not quarrel with the fact that people who live in these special sort of houses should acquire points, as it were, when they go to council houses. But I wonder whether they are going to be entitled to buy the specific houses they live in.

The Earl of MANSFIELD

No. May I just remind the noble Viscount of what subsection (10) provides? It provides that tenants whose landlords in effect are contained in that very long list from paragraph (a) to (m) can use their occupation of those houses as a qualifying period for the right to buy, and also for the assessment of the discount if eventually they decide to buy. But this is only if at the time when they do decide to buy they have in effect moved house and they are then the tenants of a body mentioned in paragraphs (a), (b), (c) or (f) of Clause 10(2); in other words, a local authority, an islands or district council, a development corporation, the Scottish Special Housing Association or a housing cooperative. I think that answers the noble Viscount's point about the doctors and so on.

The Earl of SELKIRK

Might I ask whether the Special Housing Association is included? I see it is not included under subsection (3) which refers to paragraphs (a), (b), (c) and (f). That does not include the Special Housing Association.

Lord ROSS of MARNOCK

If the noble Earl will forgive me, that refers to Clause 10(2), whereas the other reference is in Clause 1(10).

The Earl of MANSFIELD

We have to distinguish between subsection (10) of the clause which we are now considering and Clause 10(2), which we shall come to.

Lord HOWIE of TROON

I hestitate to intervene at this moment, but it strikes me that very little justification has been made for the extreme length of this list. It consists of some very worthy people and I understand the principle that lies behind it, but people can qualify by living in houses for a period under the Development Board for Rural Wales. Welshmen are excellent people in their way and particularly good in Wales, but I am not so sure that you want too many of them in Scotland; or, at any rate, for relatively short periods they are welcome when they come. There are various qualifications in this list which seem to be rather remote from Scottish housing.

I recollect that in one of our debates earlier today the noble Earl rather cast English things to one side when he was asked to make provisions in the Bill similar to provisions which occurred in an English Bill. He said that we Scots did not do that sort of thing. Yet here is a list which goes far, far wider than that question raised earlier on. I would like some kind of justification for several of the inclusions in this list.

Lord DRUMALBYN

Would it be possible for my noble friend, when we get to the Report stage, to give us some idea of the co-ordination—or co-operation, if he likes—between all these bodies and the islands and district councils? Because the accumulated right of the time during which the applicants to buy a house have been employed by, and have been occupying a house of, the various authorities listed is, as I understand it, all of no avail unless they are given a house by the district council. Ought we not to know the attitudes of the district councils, the islands councils and so on? Do they have a single attitude to it? How will this work out in practice?

The Earl of MANSFIELD

The best thing for me to do is to cogitate. It is fair to say—and it must be obvious to the Committee—that we did not realise that the probes would go so deep. I shall think about it before the next stage.

Lord ROSS of MARNOCK

The noble Earl must be very grateful that he met me in my old age, because I can assure him that the probes have not been very deep at all. Some of his noble friends behind him, who have a little experience, will probably agree that I have been very kindly towards the noble Earl in respect of this matter.

I can understand how the noble Earl, Lord Selkirk, was confused about subsection (10), because it is very easy to be confused. That subsection lists the bodies in occupation of whose houses the eventual tenant of a district council house manages, by extent of occupation, to build up a right to a discount. A regional, district or islands council in Scotland is easy to understand. A regional authority is the employing authority for the whole of the education authorities. That means headmasters who have to live in a school house; it means janitors who have to live beside a school in a school house. But whereas, at the present time, we all know that provision is made by a local authority for a retiring janitor to get a local authority house, is there any likelihood of that position continuing? As a consequence of that, I hoped we should he able to get some information on whether the Scottish Office have had discussions with local authorities.

When a warden retires from Barlinnie, Saughton or some other prison, the local authorities very often have an arrangement, but will that continue? Unless they get a local authority house this discount, this confusion and this lengthy list, that worries my noble friend Lord Howie of Troon, will not come into application at all. My concern is that there may be a change in attitude as a result of this Bill, and that these people will find themselves worse off. They will not be able to get a house to rent, far less one to buy, because a local authority will know that, as soon as they allocate a house to that person, he will be able to buy it and it will be off their hands.

Up till now, it is fair to say—and it has caused some talk—people have moved into good housing, because they came from a police house, from a prison warden's house or from a janitor's house. These are houses that people are likely to want to buy. But it may well be that local authorities will be offering them houses—they are under no obligation to do so, unless they are homeless—which nobody would want to buy, or would want to rent. There will be a very considerable difference in the rights of those people, who have served out their lives in the prison service or in the police, and who are no longer able to stay in their house. It is that kind of information that I want, and it is a fairly obvious question to ask whether the Government have had some discussion with district authorities as to whether or not this will change their attitude.

As regards the lengthy list, I think that it just grew and grew. I do not know how Northern Ireland came into it. Of course the noble Earl will try to find our for me whether, in the past five years, somebody has moved from Northern Ireland to Scotland and into a local authority house, because there must be some pattern somewhere to justify including this.

The Earl of MANSFIELD

I can justify this. The noble Lord had a good point, but I think he is now making it worse; and age has certainly not withered his infinite capacity to keep the debate going. But the list includes public housing bodies in the United Kingdom and there must be—pace the noble Lord, Lord Howie of Troon, who, if I may say so, exhibits a certain chauvinism in this direction—some degree of reciprocity as between England, Scotland, Wales and Northern Ireland, if for no other reason than to encourage labour mobility, which is one of the reasons behind this Bill and which we have already discussed at length.

I am informed that the Development Board for Rural Wales is the Welsh equivalent of the SSHA and, therefore, perhaps that picture falls into place. In fact, I am told that the Bill as a whole was discussed with local authorities, and there is no question of any suggestion being made of a change of policy. So I think that deals with that. I have been thinking over this long list, and I have received word from the Box that, as I said in an earlier part of our deliberations, it is public housing bodies in the United Kingdom who employ people who, because of their type of employment, such as policemen or fire officers, have to live in defined quarters. They are singled out—if that is the right term—for special treatment thereafter, in circumstances which I suggested, slightly out of context, to the noble Viscount, Lord Thurso, earlier on. I do not think it is any more sinister than that, in spite of what the noble Lord, Lord Ross, is trying to suggest.

Lord ROSS of MARNOCK

I never thought it was at all sinister. The prolongation of any debate is related to the replies that I have received, and it is not only the noble Lord, Lord Ross of Marnock, who has been querying the information that is available to the noble Earl; there have been others as well, who are equally perplexed about this complex matter. The simple fact is that they are public service houses. That is one of the answers that we have now elicited, but which we should have got very much earlier.

There are other people in worthy occupations to whom one might say "We will allow you to build up a right". Farm workers who live in tied houses do not get any preference. They have a worthy occupation, but they cannot move from their house in the same way as the police, water authority employees, janitors and so on. The Government have singled out public sector authorities. But the big safeguard in respect of the chauvinism of my noble friend is that, before they get any benefit at all, they must be allocated a house by a Scottish local authority, a Scottish new town, the Scottish Special Housing Association or by others who are listed. I am still not satisfied that the Government have covered them all here. The noble Earl says that this was discussed with local authorities. His information is better than that which was available to honourable Members in another place. If all this had been discussed, we might have had a White Paper and known something about it. Ministers might have known a little more about their own Bill and its implications if there had been discussion, a White Paper and debates. Instead, it has been thrown at us like this. I have no intention of dividing the Committee, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord SANDYS

I think at this juncture it would be the wish of the Committee to adjourn for one hour and to reassemble at 10 minutes past eight. In the meanwhile, the other business will be dealt with. I beg to move that this House do now resume.

Moved accordingly and, on Question, Motion agreed to.

House resumed.