HOUSING BILL

HL Deb 21 July 1980 vol 412 cc41-106

4.28 p.m.

Consideration on Report continued.

Baroness BIRK moved Amendment No. 2: Page 105, line 22, at end insert— ("5. The dwelling-house has been provided under the Housing (Temporary Provisions) Act 1944 or the Housing (Temporary Accommodation) Act 1945.").

The noble Baroness said: My Lords, I beg to move Amendment No. 2. This amendment deals with the problem of temporary housing, the prefab type of housing, and it is supported by the AMA. The concern of the authorities is that accommodation originally constructed as a temporary measure at the end of the Second World War and intended to have a limited life, will be subject to the right to buy within the current proposals. The amendment is intended to exclude dwellings commonly known as prefabs which at the time of construction were intended to have a life of 10 years. While the majority of temporary accommodation has now been cleared, there remains a small number of such properties throughout the country, although most authorities are gradually clearing them as they become vacant.

The Association and other organisations consider that it is inappropriate to extend the right to buy to accommodation which was built for a temporary life only and where the intended life has been exceeded, and where authorities are, in general, clearing such properties when the occupants move. It would seem that if they do get the security of ownership, then when the authorities want to re-develop, they will be put to considerably more trouble and expense. I beg to move.

Lord BELLW1N

My Lords, one would have to say that this, of course, is another amendment designed to chip away at the right to buy, because it would exclude all housing provided under the Housing (Temporary Accommodation) Acts of 1944 and 1945. We have heard that there will be all sorts of problems for local authorities if these dwellings are sold. However, although prefabs in general have been remarkably popular with tenants over the years, let us remember that they are temporary dwellings which are now over 20 years old, and most of them will now be at or near the end of their useful lives.

Even bearing in mind that valuations might be correspondingly low, I wonder whether tenants will buy these dwellings. Anyone who considered it would certainly be wise to think very carefully and to take expert advice before doing so. For although there may be circumstances in which it might not be in the tenant's interest to exercise his right to buy, it would be neither fair nor practical to try to take away the right to buy from tenants of all the 1944 prefabs. That might ensure that none of them bought where it would be unwise for them to do so, but it would also prevent any of them from buying where it might still be perfectly reasonable to do so. I suggest that that would be unfair and unacceptable. For that reason, we cannot accept the amendment.

Lord PARGITER

My Lords, will the noble Lord consider the further point, that in many cases it will not be the value of the prefab but the value of the site that will be the attraction. Having regard to what single-house property sites cost these days, if there is a site of a reasonable size with drainage, road access, lighting and everything else provided, it would be a very great temptation to want to buy it? You would get the odd ones bought in particular places which very often would prohibit the local authority doing proper redevelopment of the area. I think that that in itself would be undesirable.

Lord BELLWIN

My Lords, by leave of the House, I do not think that in any way that does other than make the case for resisting the amendment. I was trying to be helpful to the point of saying that I had reservations as to the extent to which it would he used. I hope I also stressed that the key factor in the Government's objection to the amendment was that we did not want to remove the right to buy. As the noble Lord said, it may be that people will want to do it not so much because of the unit itself, but because of the worth of the land on which it is sited. Leaving aside the fact that most of them are rather small sites, even so, I still believe that it is the right with which we are concerned; it is the right that we have promised; it is the right to which we are committed, and that is why we cannot accept the amendment.

Baroness BIRK

My Lords, I do not think that the reply is very satisfactory and I think that my noble friend Lord Pargiter made a very good point. However, I do not propose to press my luck on this, so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.33 p.m.

Lord MONSON moved Amendment No. 2A: Page 5, line 34, after ("years") insert ("or, in the case of a dwelling-house to which the exception in paragraph 11 of Schedule 2 to this Act applies, for such shorter term as is required by that paragraph.").

The noble Lord said: My Lords, I beg to move Amendment No. 2A, and with the leave of the House at the same time I shall speak to Amendments Nos. 12A and 18, which are consequential. The purpose of these amendments is to remove from the Bill a grave anomaly—one which, unless rectified, will impose an extremely heavy burden upon local authorities in years to come. What is more, it will also impose a very heavy burden on certain of those tenants, or rather their heirs and successors, who opt to buy their flats, as I shall demonstrate in a moment.

The anomaly in question is the requirement for all local authorities to grant applicants leases of 125 years or more whenever the lease is granted, whether it be granted in 1980, 1985, 1990 or, for that matter, 2030. This means that in regard to blocks of flats with a demonstrably limited life—and, remember, many blocks of flats in existence today were built 50, 60, 70 and even 80 years ago—the leases could fall in, not all at the same time so that the local authority could redevelop efficiently by demolishing the out-of-date and possibly even structurally-dangerous buildings and replacing them with modern, purpose-built blocks; but instead the leases will fall in at widely varying dates, in theory possibly as much as 100 years or more apart.

In the private sector this would be considered sheer insanity. In the private sector the length of long leases of flats in a single block is always geared so that they all fall in at the same time. These amendments will ensure that when local authority flats are sold the same sensible, practical, financially-prudent practice is followed. This is why virtually every respected professional body in the country which has anything to do with finance or with property supports these amendments. I would instance the Royal Institution of Chartered Surveyors, the Association of Metropolitan Authorities, the Association of District Councils, which is, of course, Conservative-controlled, the Chartered Institute of Public Finance and Accountancy, numerous local authorities—Conservative local authorities just as much as Labour-controlled ones —and many distinguished and experienced estate agents and land agents.

There is a further point to consider. I mentioned that if the Bill is unamended, it could backfire upon the tenant who buys his flat, or perhaps backfire upon his sons and daughters, or grandsons and granddaughters. This is because those few lessees who remain in an old and crumbling block of flats which is well past its prime but which cannot be redeveloped, will find themselves paying a larger and larger sum each year by way of their share of the service charge in order literally to prop up the structure of an outdated and possibly dangerous building. There are, additionally, immense complications in the case of partnership schemes entered into by developers in conjuction with local authorities, where council flats have been built above shops with a limited life as a quid pro quo for getting planning permission in the first place. As the Housing Centre Trust has asked: How could local authorities cater with limited resources for a limitless life for a flat in a block already 50 years old, or difficult to let, or with newly-discovered design faults? We all know about the design faults—the alumina cement and the number of post-war council blocks that have already been demolished for one reason or another.

When objections were raised in the Commons to the Bill as drafted, the astonishingly frivolous reply that apparently came from the Conservative side was that it did not really matter which side got its way in the debate, as all those who were taking part would be dead by the time difficulties started arising. I am sure that on reflection noble Lords on the Conservative Benches will agree that such an attitude does not really conform with traditional Conservative values. Surely all serious and respected political parties in this country are united, in wanting to put the important, long-term interests of future generations above short-term political considerations. Not that I believe for a moment that to grant leases of 122, 119, 114, or 108 years would lose the Conservative Party any votes to speak of, particularly when people appreciate the sensible aspect of changing the Bill. It is rare indeed to find so many respected professional bodies united in favour of this series of amendments. I hope that the Government will, therefore, accept them. If not, I hope that your Lordships will support me in the Division Lobby.

Lord BELLWIN

My Lords, the intention of these amendments was to provide that where tenants of flats bought their flats under the right to buy, the leases of the flats in a particular block should all fall in at the same time. The Government now accept that it is right to provide for this. However, the amendment which the noble Lord, Lord Monson, has moved, seems to us to be unsatisfactory. I hope that the noble Lord will accept that the Government's amendments on the supplementary Marshalled List have the same effect and substantially meet the representations made on the need for coterminus leases in blocks of flats. With that assurance, I hope that the noble Lord will feel able to withdraw his amendment.

Lord HYLTON

My Lords, I should like to say how much I welcome the Government's acceptance of the principle of co-terminus leases. This is something to which I drew attention earlier in the Bill, pointing out the rigidity of the 125-year requirement. Speaking as a chartered surveyor and as a trustee of a charitable estate whose property is almost entirely let out on long leases—both residential and commercial—I only hope that the Government's amendments are really watertight and will meet the case.

Baroness BIRK

My Lords, I have my name to the amendment of the noble Lord, Lord Monson, because I felt as he did, that it was a quite anomalous situation and that in addition it would make great difficulties for the management and maintenance of flats, particularly the communal part. I am afraid that I have only just seen the supplementary Marshalled List, but if this covers the points raised by the noble Lord and if he is satisfied, then I am happy as well.

Lord MONSON

My Lords, I, too, have only just understood—or half understood—the amendment set out in the list supplementary to the Marshalled List. If the noble Lord tells me that it has the desired effect, then there is nothing more to add and I am delighted that the Government have seen fit to accept this principle. Therefore, I am very happy to withdraw the amendment.

Amendment, by leave, withdrawn.

4.40 p.m.

Lord BELLWIN moved Amendment No. 2B: Page 5, line 35, at end insert ("(subject to paragraph 11(2) of Schedule 2 to this Act)").

The noble Lord said: My Lords, I should like to speak to this amendment and also to Amendments Nos. 12AZ and 18B. First, I should like to acknowledge that these amendments are intended to achieve the same result as amendments already tabled by the noble Lord, Lord Monson. I am grateful to him and to the noble Baroness, Lady Birk, and to the noble Earl, Lord Kinnoull, and, I suspect, also to my noble friend Lord Hylton, who is not here. Maybe I am wrong about that. The Government have been convinced that the Bill should include such a provision. As there were technical difficulties over the wording of the amendments in the name of the noble Lord, we felt it was right to table Government amendments even though it had to be done at the last moment.

The main amendment is to Schedule 2. This provides that once one flat in a block has been leased under the provisions of the Bill for a term of 125 years or more than any subsequent lease of another flat in that block under the right to buy may terminate at the same time as the lease on the first flat. This would apply whether the first flat had been sold under the right to buy or voluntarily under the powers in Part I of the Bill.

Amendment No. 2B to Clause 6 makes the necessary adjustment to the assumptions made on the valuation of the second or further flat. Amendment No. 12AZ is a consequential amendment to Clause 16, and the provision as to the term of the lease which a landlord is bound to grant on a flat. I beg to move.

On Question, amendment agreed to.

Lord MONSON moved Amendment No. 2C: Page 5, line 38, after ("annum") insert ("for the first 33 years of the term; £20 per annum for the second 33 years of the term, £40 per annum for the third 33 years of the term, and £80 per annum for the remainder of the term.").

The noble Lord said: My Lords, I beg to move Amendment No. 2C, and with the leave of the House I shall speak at the same time to Amendment No. 18A. First, I should like to apologise to the House on having so many of my amendments on a list supplementary to the marshalled list, which I appreciate makes them rather difficult to follow. It takes a great deal of time for those of us without the power of Government at our elbow or legal expertise at our fingertips to draft effective and, with luck, cast-iron amendments to such a wide-ranging and complex Bill.

Although I moved a slightly similar amendment in Committee I want to emphasise that this is not an attempt to bring in a supplementary service charge by the back door, since the noble Lord, Lord Bellwin, has now more or less succeeded in convincing me that service charges are already adequately provided for in Schedule 2 to the Bill and elsewhere. Like the previous amendment, it is simply an attempt to make the Bill conform more with what one believes to be Conservative principles by making these provisions more businesslike and efficient and less wasteful, by providing some protection against inflation for the initial ground rent of £10. When we discussed the question of ground rent in Committee the noble Lord, Lord Evans, rightly pointed out that it might well be more economic to charge a peppercorn, and I must say that if this amendment is not accepted I am inclined to agree with him.

£10 in 125 years' time at 3 per cent, inflation would be worth only 25p. At 5 per cent, inflation it would be worth only 2¼p, and at 10 per cent. inflation it would be worth 0.00067p. My very modest amendment effectively indexes the ground rent to the extremely modest degree of 2 per cent. inflation. If, therefore, as we hope, inflation were by some miracle brought down to only 5 per cent. the 2¼p that the £10 would be worth at the end of 125 years would, as a result of my amendment, be raised to 18p, which would just about cover the cost of a stamp and envelope even if not the clerical cost of sending out the demand. Of course, it is possible to argue that we will not have stamps in 125 years' time and everything would be done by direct debit, but even so I cannot believe that the cost of getting the amount from the tenant would be less than 18p in real terms.

It is not I who am being radical or proposing anything out of the ordinary, but the Government if they fail to accept this amendment. Every single lease in the private sector today, and indeed for the past 10 years or more, has included provisions for the indexation of the ground rent, usually once every 33 years or sometimes once every 25 years. Therefore, by accepting this amendment the Government would be simply following normal commercial practice.

If the Government succeed in bringing down inflation over the next 12 months to 15 per cent., and then subsequently to 10 per cent. for the rest of their period in office—and I do not think realistically they expect any more than that—then by the latest time that the next general election can take place in April 1984, £10 will already have fallen to £6.71 in real terms, so it can be seen that already the value of the initial ground rent is being eroded. For that reason, I hope that the Government will look extremely favourably upon this amendment.

Lord EVANS of CLAUGHTON

My Lords, I am grateful to the noble Lord, Lord Monson, for bringing this forward. The Government are in a sense, the author of their own difficulties here. If they mean a nominal rent, even in these inflationary days £10 is not a nominal sum of money. If they mean a nominal rent it would be better if they were to say either a peppercorn or, if you come from the county palatine of Lancaster, one red rose, or possibly for the noble Lord the Minister one white rose. They ought to make their minds up whether they mean a nominal rent or a rent that represents value. If they do, I think the noble Lord's amendment should be supported. If they mean a nominal rent, why do not they say so?

Lord BELLWIN

My Lords, I trust that the noble Lord, Lord Monson, in making his inflationary forecasts is speaking for himself. Certainly I must dissociate myself from any such forecast he makes. May I suggest to the noble Lord, Lord Evans, that he might also have referred to the possibility of a leek being used. The noble Lord, Lord Monson, put down amendments at Committee stage designed to allow for inflation in the imposition of ground rents on flats sold under the right to buy. He has now modified his proposals. The suggested rent would rise from £10 to £80 instead of from £25 to £400. However, I still believe that it is unnecessary to provide for an increase in the ground rent. The noble Lord, Lord Monson, said at Committee stage that he thought it would be better if local authorities could impose a service charge on flats sold under the right to buy, but failing this he urged the Government to consider his amendments which would try to maintain the real value of the ground rent. Since then I have written to the noble Lord to assure him that local authorities may levy service charges on such sales.

I did in fact explain this in Committee, but I am afraid that the hour and the pressure we were under to make progress did not allow me to take this rather complicated point at a pace which made it easy to follow. Rather than repeat myself at length, perhaps it would be best if I give noble Lords the Hansard reference for my explanation, being 26th June at cols. 1859 and 1860. All I would add to this is that paragraph 14(1) of Schedule 18 applies the provisions relating to service charges to flats sold under the right to buy.

The noble Lord's amendments would make allowance for inflation in the ground rent of flats sold on 125 year leases under the right to buy. I said in Committee that the ground rent—and I think this is really the major point—is not designed to secure a continuing income for the ground landlord but merely to represent in a necessarily token way his continuing interest in the land. I resisted the noble Lord's amendments in Committee for this reason. The noble Lord, Lord Monson, has now indeed modified his amendment since Committee stage in such a way as to moderate the increase in the ground rent, as I have said.

My reason for rejecting them, however, was that there is no need for any sort of increase in the ground rent. I have to say that this remains the Government's view, and that these amendments are no more acceptable than the earlier ones. I was interested in the point that the noble Lord, Lord Evans, made about a ground rent, a peppercorn rent, or whatever, but I fear that on this point the Government will not want to move. I wonder if, in the light of that, the noble Lord, Lord Monson, in that I think he might concede that this is probably not one of the major points that he raises, is able to withdraw his amendment.

Lord MONSON

My Lords, I concede of course that this is not one of the major points in the Bill, but I think the Government are being rather shortsighted over it. It is rather like the response in another place to the previous issue we were discussing; namely, we shall all be dead before the trouble becomes apparent. The noble Lord said this represents just a token payment. In fact, it is an uneconomic token payment because once the lease is about one-quarter the way through it will become more expensive to collect the ground rent than not to collect it, and that cannot be sensible. Auditors will not allow local authorities merely to wash their hands of it but will insist on reminder letters being sent out, and it will cost a great deal more to extract these sums from rather slow payers than the income itself. However, the House being quite thin and, without a great number of noble Lords to support me, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 [Discount]:

4.51 p.m.

Lord BELLWIN moved Amendment No. 3: Page 6, line 32, leave out from ("to") to second ("the") and insert ("the following provisions of this section").

The noble Lord said: My Lords, I will, with permission, speak at the same time to Amendments Nos. 4, 5, 6, 7 and 8. There will be occasions when a secure tenant dies and the surviving husband or wife takes over as secure tenant of the marital home. These amendments are concerned with the effect of such a change on the terms on which a surviving spouse can exercise the right to buy. Their intention is to help widows and widowers.

As the Bill is drafted, spouses' entitlement to discount may be taken into account under Clause 7(6)(a) only if the secure tenant and spouse are living in the same dwelling as their only or principal home when a notice is served claiming to exercise the right to buy. This clearly would prevent a deceased spouse's entitlement from being invoked. In many cases this would make little or no difference to the discount which the spouse who became a secure tenant on the death of a husband or wife could claim; time spent in secure tenancies with the now dead husband or wife could in any event be claimed under Clause 7(5)(a) as a period during which the new secure tenant was the spouse of a secure tenant.

But there could be a case, for example where the widow had been married to a now deceased secure tenant for only 10 years out of his total 20 years' secure tenancy, and her discount entitlement would as a result be lower than his would have been. Elsewhere in the Bill the principle followed has been that the right to buy is rightly to be regarded as the property of the marriage partnership rather than one particular partner who is a secure tenant. Thus, Clause 1(5) allows a widow or widower who becomes a secure tenant on the death of a spouse to count the spouse's period of entitlement under Clause 1(3) towards his or her own qualification to exercise the right to buy. We have concluded, following this principle, that a widow or widower becoming a secure tenant on a spouse's death should be entitled to discount terms which are no less favourable than those on which the couple would have been able to buy had they done so together before the bereavement, and these amendments will achieve that.

Amendments Nos. 3, 4, 6, 7 and 8 accordingly add to the period to be taken into account in determining discount under Clause 7 periods during which the secure tenant's deceased spouse was a secure tenant or the spouse of a secure tenant. The effect of this is qualified by Amendment No. 5, which restricts the circumstances in which such periods may be claimed to cases where the present secure tenant became a secure tenant on the death of his or her spouse. This is intended to ensure that the couple's right to buy was the joint asset of a genuine marriage partnership at the time when the deceased spouse died.

For the same reason both spouses are required to have been occupying the dwelling-house as their only or principal home at the time of the death. This helps to ensure that discount is not claimed, for example, in respect of a marriage which has actually ended with the partners living separately but not yet divorced. These are small but important and humane amendments which prevent hard cases which might otherwise arise over widows' and widowers' entitlement to discount, and I am sure your Lordships will be glad to see them in the Bill.

Baroness BIRK

My Lords, these are complicated and technical amendments, except for lawyers. Even though the Minister explained them, I am sure, with clarity, may I ask if it means that under Amendment No. 5 the period is or is not taken into account? In other words, if a man dies and his wife then becomes the tenant and she has lived in the house with him jointly for a number of years, does that count towards her residence for the right to buy and towards the discount time? I gather from the nod of assent of the noble Lord, Lord Bellwin, that it does. What, then, happens in the case of a common law wife or a live-in friend—or whatever expression one wishes to use—where two people have been in a stable relationship for many years?

Lord BELLWIN

My Lords, the answer to the latter question asked by the noble Baroness, Lady Birk, is that to the best of my knowledge I should not have thought that would have applied. I am, however, open to correction on that and I shall, if I may, confirm or otherwise my answer a little later. I am not absolutely sure, but I should not have thought it would apply.

Baroness PHILLIPS

I should like to know how far on in time this goes, my Lords. I have an example of a widow who was the tenant and remarried and then died, then the husband became the tenant and remarried and his wife became the tenant, and this has gone on for some time. They have been protected right through. Does the same rule apply? In other words, for how long in time does this situation continue?

Lord BELLWIN

My Lords, I should have thought in the case the noble Baroness, Lady Phillips, cites that if the husband had gone on marrying different people, as it were, for one reason or another (there may have been divorces, or nature may have taken its course, and so on) the wife who was living when he eventually died—which might be sooner rather than later in those circumstances—would acquire his time in occupation.

Baroness PHILLIPS

To the third or only the second, my Lords?

Lord BELLWIN

My Lords, I should have thought it would go on. If he has had many wives—all legally entitled, of course—I should have thought they would all qualify on the back of his time of tenure for such discount as might apply. That would be my interpretation, but should the position be otherwise, I undertake to notify the noble Baroness.

Baroness JEGER

My Lords, supposing two spouses have been living together for about 40 years and then, just before the death of one or the other, one of them goes off for a bit of a party with somebody else. At what point does that disenfrancise the delinquent spouse from being regarded as eligible under the clause?

Lord BELLWIN

My Lords, it would depend on what kind of a party it was. If it was the kind of party which was just one of those things that comes and goes, then I think it would have no effect whatever. If, however, it was the kind of party which resulted in, say, the husband departing the marital home indefinitely, if he was then to die I should have thought the wife, who in our hypothetical case I am assuming remained in the house, would be entitled to his time of tenure as a qualifying basis. As I said to the noble Baroness, Lady Phillips, if I am wrong I will let the noble Baroness know, but I suspect I am not wrong on this one.

On Question, amendment agreed to.

Lord BELLWIN moved Amendment No. 4: Page 6, line 35, after ("spouse") insert ("or deceased spouse").

The noble Lord said: My Lords, I have spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord BELLWIN moved Amendments Nos. 5 to 8:

Page 7, line 9, at end insert— ("(aa) no period during which the tenant's deceased spouse was a secure tenant or the spouse of a secure tenant shall be so taken into account unless the tenant became the secure tenant on the death of his spouse and at the time of the death both occupied the dwelling-house as their only or principal home; and").

Page 7, line 10, at end insert ("or deceased spouse")

Page 7, line 28, after ("spouse") insert ("or deceased spouse")

Page 7, line 29, after ("is") insert ("(or was)").

The noble Lord said: My Lords, I spoke to these amendments when moving Amendment No. 3. I beg to move.

On Question, amendments agreed to.

Clause 8 [Repayment of discount on early disposal of freehold or lease]:

5 p.m.

Lord MOWBRAY and STOURTON moved Amendment No. 9: Page 8, line 40, leave out from ("by") to ("for") in line 41 and insert ("a body specified in subsection (4A) below").

The noble Lord said: My Lords, in speaking to this amendment I wish to speak also to Amendments Nos. 10, 90 91, 92, 101, and 102, all of which are minor amendments. Clause 8 of the Housing Bill makes provision for the repayment of discount where a purchaser, under the right to buy, resells the dwelling-house within five years. This liability for repayment of discount on early disposal is deemed to take effect as a legal mortgage. There are two further equivalent provisions in the Bill; one is in Clause 91, and covers the case where a local authority voluntarily sells a council house at a discount, subject to a discount repayment liability. Clause 120 makes similar provision on the voluntary sale of a dwelling at a discount by a housing association.

As Clause 8 is drafted, if the landlord, the Housing Corporation, or a building society grants the purchaser a mortgage to finance the purchase, this mortgage takes priority over the mortgage securing the liability to repayment of discount. However, as the Bill stands, any mortgage granted by any other lender to finance the purchaser would rank in priority after the discount repayment mortgage.

So far as possible, we wish to encourage those who purchase houses from local authorities or housing associations to get the mortgages they need from private sector lenders. In this way we seek to derive the maximum benefit to the public purse from the sale of council houses. Therefore, we have concluded that it would be right for certain other lenders' mortgages to be stated to have first priority under the Bill. Broadly speaking, these lenders are insurance companies, trustee savings banks, and banks as identified in the Home Purchase Assistance Act 1978, as recognised lending institutions for house purchase. Amendments Nos. 90, 91, and 92 achieve exactly the same result in relation to voluntary sales by local authorities.

It is also necessary to ensure, in regard to Clause 120, that a Housing Corporation mortgage will have first priority on a voluntary sale by a housing association. This is achieved by Amendments Nos. 101 and 102.

These amendments make the necessary changes to Clauses 8, 91, and 120. I beg to move.

On Question, amendment agreed to.

Lord MOWBRAY and STOURTON: moved Amendment No. 10:

Page 8, line 43, leave out from ("by") to end of line and insert ("that body. (4A) The bodies referred to in subsection (4)(b) above are—

1. (a) the Housing Corporation;
2. (b) any building society; and
3. (c) any of the bodies specified in paragraph 6, 7 or 8 of the Schedule to the Home Purchase Assistance and Housing Corporation Guarantee Act 1978.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 13 [Change of secure tenant after notice claiming right to buy or right to a mortgage]:

Lord MOWBRAY and STOURTON moved Amendment No. 11: Page 12, line 29, leave out ("or the right to a mortgage").

The noble Lord said: My Lords, Amendments Nos. 11 and 12 are procedural amendments to Clause 13, which governs what happens when there is a change of secure tenant after the service of a notice claiming the right to buy. When the change of tenancy takes place the landlord may already have served a notice under Clause 10 which tells the tenant about the price to which he is entitled and, among other things, about his right to a mortgage. In all cases however the size of a mortgage to which an eventual purchaser is entitled will depend on his own circumstances. Where the tenancy changes after the service of a right to buy notice it will be the new tenant's income that will be relevant. He must therefore fill in a form giving details of his financial circumstances if he wishes to take up the right to a mortgage. Amendment No. 12 therefore provides that where a notice has already been served under Clause 10, a new form is to be sent to the new tenant. The new tenant would then have the normal three months to fill in and return the form. I beg to move.

On Question, amendment agreed to.

Lord MOWBRAY and STOURTON moved Amendment No. 12: Page 12, line 39, leave out from beginning to ("or") in line 1 on page 13 and insert— ("(2) If a notice under section 10 of this Act has been served on the former tenant, the landlord shall serve on the new tenant a further form for his use in exercising the right to a mortgage and the new tenant may then serve a notice under section 12(1) within the period of three months beginning with the service on him of that form").

The noble Lord said: My Lords, I spoke to this amendment when dealing with the last amendment. I beg to move.

On Question, amendment agreed to.

Clause 16 [Completion]:

Lord BELLWIN moved Amendment No. 12AZ: Page 14, line 20, at end insert ("(subject to paragraph 11(2) of Schedule 2 to this Act)").

The noble Lord said: My Lords, I spoke to this amendment when dealing with Amendment No. 2B. I beg to move.

On Question, amendment agreed to.

[Amendment No. 12A not moved.]

Baroness BIRK moved Amendment No. 13: Page 14, line 40, leave out ("two years") and insert ("six months").

The noble Baroness said: My Lords, this amendment and the two following amendments are intended as attempts once more to do something about that rather outrageous creature, the option, which we very much dislike, since it comes on top of the discount, and the amendments provide different ways in which to minimise some of its extravagant effects. Amendment No. 13 seeks to reduce the period for which the option can be held from two years to six months. It appears that the Government are insisting on holding on to the option; they will not give it up, as I and many other people believe they should do. The object of the amendment is to ensure that the option is granted only in order to help people over a bridging period, which should be as short as possible.

I suppose that in those circumstances it could be argued that the provision is just about feasible, since it takes people about six months to organise their affairs in order to complete a sale. However, people should not be allowed a lengthy period of time that is not really consonant with the question of being able to find the small edge of the finance that they need. This matter is supposed to be clearly tied down, but our following amendments deal with it, since we do not accept the situation. The provision should be used merely to help people over the short bridging period.

The amendment would also avoid a situation which must arise if the Bill remains as it is at the moment. On certain occasions a number of people will take out options in a slaphappy fashion since, after all, they are not going to cost them anything. However, at the end of the two years' period, or even earlier, they may decide not to pursue the matter further. This may be because they still cannot afford to go ahead. The Minister may say that that point is covered in the Bill, but we do not accept that it is; hence the next amendment that we shall be moving. On the other hand, they may treat the matter almost as a status symbol, so that they can say that they have taken out an option to buy a house, even though after a period of two years they are not likely to be in a position to complete the purchase. This situation seems to me to involve a rather unpleasant method of encouraging people to aspire to things that are beyond their means.

On the previous occasion we discussed this matter I raised a point to which I do not think I received an answer. I realise that at that time many questions were asked of the Minister, who has entered into considerable correspondence, but I think that this particular point has been overlooked. I asked the Minister what will be the cost of processing these applications. After all, if people apply for an option, someone has to file the application, or otherwise deal with it. There has to be correspondence, and I feel that much unnecessary expenditure will be involved. I beg to move.

Lord HYLTON

My Lords, having spoken at Second Reading as strongly as I could about the unsatisfactory consequences of a combination of the discount and the option period, I should like to support this amendment. In moving it, the noble Baroness has touched on the effect of the present option on local authorities, and particularly on local authority staffs. I think that if her amendment is accepted there will be a great deal of saving of unnecessary administration, and I hope the Government will accept it.

Lord MONSON

My Lords, I, too, should like to support the noble Baroness in this amendment. I shall be happier still to support Amendment No. 15, which I think I am right in saying is an alternative to No. 13. In fact, I would have put down my name to Amendment No. 15 had I not suspected that the drafting may be imperfect. Noble Lords may be surprised to know that according to the Nationwide Building Society, in the two years from the autumn of 1977 to the autumn of 1979 house prices rose by no less than 63.7 per cent. Who can possibly deny that such a rise in house prices might not happen again? Suppose this were to occur between the autumn of 1980 and the autumn of 1982—and I am not trying to make a political point in saying that inflation and rising house prices occur only under one Government or another; I simply choose 1980 to illustrate what might happen. Suppose the house were to be valued by the district valuer at £20,000 in the autumn of 1980, and a tenant entitled to a 50 per cent. discount put down an option to buy that house for £10,000. By the time he came to exercise his option in the autumn of 1982 the value of that house would have risen to £32,740, so his effective discount would be not 50 per cent. but just under 70 per cent.—69.46 per cent., to be precise. Similarly, someone entitled to a 33 per cent. discount would effectively receive a 59 per cent. discount if the rise in house prices were to be of this magnitude.

I fully recognise that the figures 33 per cent. and 50 per cent. were included in the Conservative manifesto. We had a Divsion on the discounts at Committee. We were defeated, albeit not by a very large margin, and we accept that, although I must tell the noble Lord, Lord Beliwin, and his colleagues on the Front Bench that in the interim an amazingly large number of Conservatives in the country —Conservatives who are involved in local government, particularly—have come up to me or have written to me and said how much they approved of my amendment; but that is by the by. However, it was not in the manifesto that effective discounts should vary between 59 and 70 per cent., which would be the case if we have a similar rise in house prices in the future to what we have had in the past and one or other of the amendments of the noble Baroness is not accepted.

I prefer Amendment No. 15 because I think it is a little fairer to those who are not able to get their deposit organised within six months. It still gives a pretty handsome discount. Effectively, the man in the first instance, instead of being able to get his £32,740 house for £10,000, would have to pay £13,185 for it, but that is still a discount of 59.73 per cent.— a good deal better than 50 per cent. Similarly, a person entitled to a 33 per cent. discount would effectively get a 46 per cent. one; so they are still doing a lot better by having the option than by not having it, but the public purse is not being hit to quite the same extent as would be the case if one or other of these amendments is not accepted.

Lord BELLWIN

My Lords, may I just say that if the same people who had written to the noble Lord, Lord Monson, and expressed their concern had fully understood exactly what is being proposed in the Bill, they may perhaps have had less concern; and I shall try to make this point again, as I did at Committee stage. But before I do so perhaps I may comment briefly on one or two points that the noble Baroness, Lady Birk, made. She was concerned about people aspiring, as she said, to do things beyond their means, and then she went on to say that they will take out options in a slaphappy fashion. I have to remind your Lordships that one has to put £100 down, and if that is a status symbol, or whatever, it is one about the value of which there might be differing views.

One point I cannot answer her on—I should like to do so, but I cannot at this time—is her question about the cost of processing this. I do not have that information at the present time. But would suggest that in the context of what we are trying to do by giving this option it is not particularly important, and certainly I do not expect that it would be very significant. This is really the major point in this option matter, and I want to repeat it very carefully by saying that this is a tightly-drawn provision. It is not a wide open thing where anyone can come along and decide, "I will not buy now; I think T might do better, as the noble Lord, Lord Monson, said, by hanging around for a couple of years, so I will leave it for that time; but I will put my £100 down". They cannot do that, because the right to have an option for deferred completion will be available only in limited circumstances; that is, where a tenant's mortgage entitlement would not enable him to buy immediately.

I have written to noble Lords who were anxious about this aspect of these proposals explaining to them that the only circumstances in which the right to deferred completion will arise are those in which the calculation of a purchaser's mortgage entitlement has been made and has shown him not to be entitled to a mortgage large enough to enable him to buy at once. In any event, I consider that most people will want to do so at once so that they can start paying off their mortgage, and so that the five years for discount-sharing begins to run soon. In the case of those whose resources are so small that they cannot get the mortgage entitlement that they need, I would have thought it was very praiseworthy that they should then want to set about saving up, if you like, to get to the point where it was.

As to the life of the option, it must be long enough to fulfil its purpose; namely, that the tenant should know in advance the price at which he can buy while he saves the money to do so. As to what was said in election manifestos, I will not go into that now. If I have to come back further on this point I will quote what was said by different people, but I will not waste the time of the House in doing that now if it is not necessary. But the fact is that we were considering the possibility of whether the period should be two or three years, and it was said so openly. But after careful consideration we came to the conclusion that the two-year period was the right one—two years, that is, from when the tenant claims to exercise his right to buy. We believe that any shorter period than two years will be too short to make the option of any benefit.

Some time will inevitably elapse—and, indeed, the noble Lord, Lord Monson, touched on this—between a tenant's initial application and the date on which it becomes clear that he may have the option to complete at the fixed price within two years. If he is to be in any position to save or to take advantage of an improvement in his circumstances, the period of six months would be quite useless. I do not know, but there may be some who may feel that that would be a good thing; but, in any case, as I have said, the noble Baroness, Lady Birk, has made it clear that it is really the principle of these provisions that she dislikes, not the precise form that they take. I hope that I, too, have made the Government's position clear. We are firmly committed to the principle of the provisions embodied in Clause 16, and that is why we cannot accept the amendment.

Baroness BIRK

My Lords, I am afraid that I not only dislike the principle, I dislike the way it has been done as well; I dislike it all. On the two years, I know the Minister said the same thing at Committee stage, that they had thought of three years and reduced it to two years. I am afraid that is rather like saying it was not an awfully big robbery, it is only a little tiny burglary—I mean on public funds; I am not talking about the Minister personally, of course. I find it very unsatisfactory. All these amendments are attempts to find alternative ways to deal with the same problem, so I will withdraw this amendment in order to enable us to go on to the other one. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

5.20 p.m.

Baroness DAVID moved Amendment No. 14: Page 15, line 3, leave out ("to be left outstanding or") and insert ("which he is entitled, or is treated as being entitled, to leave outstanding or have").

The noble Baroness said: My Lords, I make no apology for bringing forward this amendment again. I am not convinced that this is a tightly drawn provision, as the noble Lord said during Committee. He has used this phrase again today. He said it twice in Committee but even if he had said it three times I should not have believed it was true. It is clear from reading the Committee discussion on the £100 option, that many noble Lords were, to say the least, uneasy and fearful of abuse. The noble Lord undertook to look at it again and was good enough to write to me. In his letter he said he did not accept there was any danger of abuse of these provisions by those who may wish to delay completion, and he suggests that subsection (4)(b) of the clause, which is now Clause 16, ensures that only a tenant whose mortgage entitlement is too low to enable him to buy at once may defer completion. I cannot agree. I still think there is nothing in the clause as drafted which limits options to those who cannot afford to buy. It still appears to allow any purchaser simply to choose to delay for two years and thereby take advantage of the extra effective discount which would arise from avoiding house price rise over that period. The noble Lord, Lord Monson, has made very clear what an enormous extra discount that could give after two years.

As I said in Committee, it might be thought there would be difficulties in introducing the inherently subjective distinction between those who can and those who cannot afford to buy, but the Bill's existing provisions make exactly such a distinction in relation to the right to a mortgage. Clause 9, subsections (I) to (4), define the amount which a tenant is entitled to leave outstanding or to have advanced to him, and Clause 9(5) gives local authorities discretion to treat him as entitled to leave outstanding a higher amount. My amendment, by introducing these concepts from Clauses 9 and 16, would ensure that the £100 option could be exercised only where a tenant had failed to qualify in terms of the Bill's own provisions for a mortgage large enough to enable him to buy immediately. Not only the noble Lord, Lord Bellwin, but Mr. Stanley and Mr. Finsberg in another place have said they wish this provision to be tightly drawn, and therefore I can see no reason for the Government to resist this amendment. I beg to move.

Lord BELLWIN

My Lords, when we said that we wanted it to be tightly drawn and that we believed it to be tightly drawn, we did, and do, mean just that. I wrote to the noble Baroness, Lady David, saying that we believed that what is now Clause 16 as drafted provides that the right to defer completion was open only to those who could not afford to buy at once. Since then, however, I have received further advice on this matter. I should hate it to be thought that the Bill as drafted was defective, but in the light of the noble Baroness's advocacy, and possibly to her not inconsiderable surprise though I hope not displeasure, I am happy to tell her that in fact I am prepared to accept this amendment, and by so doing I may even convert those on the opposite Benches to the policy embodied in the clause.

On Question, amendment agreed to.

Baroness DAVID moved Amendment No. 15: Page 15, line 29, after ("price") insert ("that price to be determined by adding half the difference between the value of the dwelling-house at the time of completion of the transaction and the value at the time the notice exercising the right to buy was served.").

The noble Baroness said: My Lords, I am encouraged, but I shall be rather surprised if I get support for this amendment, which is an attempt to do by price what my noble friend Lady Birk tried to do by time in Amendment No. 13. This amendment is an attempt to make a little more realistic and sensible this option scheme and to prevent quite such a big present being handed to the prospective purchaser at the expense of the local authority, the ratepayers and the taxpayers; to make the "bonanza", as my noble friend Lord Davies of Leek described it, not quite so attractive, and the whole thing less open to abuse.

As I said before, the noble Lord, Lord Monson, has made clear what tremendous gains could be made if house prices went on rising as they have been doing. We are suggesting that the price the tenant would have to pay would be determined by adding half the difference between the value of the house at the time of completion of the transaction and its value at the time the notice exercising the right to buy was served. This seems still quite generous to the purchaser and slightly fairer to everyone else. It is a compromise which I hope will get the support of the House. I beg to move.

Lord MONSON

My Lords, I should like to support this amendment, which I think in fact is rather fairer than Amendment No. 13. The noble Lord, Lord Bellwin, gave some good reasons why the six months' option period was a little bit too short. If I might follow on from some of the examples I gave when speaking to Amendment No. 13, if this amendment were accepted and assuming that the drafting is right—and if it is not it can surely be made right on Third Reading—that someone who is entitled to a 50 per cent. discount on a £20,000 house which rises by about the same percentage as has occurred between autumn 1977 and autumn 1979 would, instead of paying £10,000, pay £13,185. However, his neighbour who, for one reason or another, might have bought an identical flat at the same time and for some reason not taken out an option, would have to pay £16,370; so although he pays rather more than he would if the Bill is left unamended, he still does pretty well as compared with his neighbour. Again, if he were entitled to a 33 per cent. discount, he would pay, instead of £13,400, £17,668. The same neighbour who again might have taken posession of his flat at the same time but again without an option would have to pay £21,281. So in each case the man or woman who took up the option would be gaining approximately between £3,000 and £3,500. I do not think this is at all a bad bargain. It is fairer, I think, as far as local authorities are concerned and I hope that the noble Lord will give the amendment very serious consideration.

Lord BELLWIN

My Lords, I was about to say to the noble Baroness, Lady David, when she stood up having had her previous amendment accepted, "Steady, steady!" In fact I listened very carefully to what she said when proposing this amendment because it was none too clear, at least to me, from its terms precisely what it was supposed to achieve. However, I am now much clearer.

I feel that I cannot be helpful on this, in the sense that the noble Baroness and the noble Lord, Lord Monson, would wish. The fact is—although I do not want to repeat what I said when I spoke on Amendment No. 13—that the remarks I made then are really absolutely apposite to this as well. Perhaps I might say also that it is harder to save up when the price against which you are saving is in fact increasing as you save. Secondly, the two-year period during which completion may be deferred runs not from when the parties are first ready to complete except for the purchaser's lack of mortgage money, but instead from the date when the tenant claimed to exercise his right to buy. I have not heard anything additional said that could convince us that it would be right to give way on this point. It is a very fundamental part of the whole of the right-to-buy commitment which we made; and I will not, unless pressed, repeat when and how that was made because I do not think your Lordships would wish me to do that. But I fear I cannot accept this amendment.

Baroness DAVID

My Lords, the House will know how we on this side feel and I think there has been some general support for the opposition to the option scheme as it stands. We certainly do want to press this amendment.

5.29 p.m.

On Question, Whether the said Amendment (No. 15) shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 86.

CONTENTS
Ailesbury, M.	Eldon, E.	Peart, L.
Amberst, E.	Evans of Claughton, L.	Phillips, B.
Ardwick, L.	Fisher of Rednal, B.	Plant, L.
Aylestone, L.	Fulton, L.	Ponsonby of Shulbrede, L.[Teller.]
Bacon, B.	Gaitskell, B.
Balogh, L.	Gifford, L.	Rhodes, L.
Banks, L.	Goronwy-Roberts, L.	Ross of Marnock, L.
Barrington, V.	Hale, L.	Seear, B.
Beaumont of Whitley, L.	Hampton, L.	Segal, L.
Bernstein, L.	Hanworth, V.	Shinwell, L.
Beswick, L.	Hatch of Lusby, L.	Simon, V.
Birk, B.	Houghton of Sowerby, L.	Stamp, L.
Blease, L.	Howie of Troon, L.	Stedman, B.
Blyton, L.	Hughes, L.	Stewart of Alvechurch, B.
Boston of Faversham, L.	Hylton, L.	Stewart of Fulham, L.
Brockway, L.	Janner, L.	Stone, L.
Bruce of Donington, L.	Jeger, B.	Strabolgi, L.
Burton of Coventry, B.	Kaldor, L.	Strauss, L.
Byers, L.	Kilmarnock, L.	Taylor of Mansfield, L.
Cledwyn of Penrhos, L.	Leatherland, L.	Underhill, L.
Collison, L.	Listowel, E.	Wade, L.
Cooper of Stockton Heath, L.	Llewelyn-Davies of Hastoe, B.	Wallace of Coslany, L. [Teller]
Craigavon, V.	Lloyd of Kilgerran, L.	Wells-Pestell, L.
Crowther-Hunt, L.	Longford, E.	Whaddon, L.
Darling of Hillsborough, L.	Lovell-Davis, L.	Wigoder, L.
David, B.	McCluskey, L.	Willis, L.
Davies of Leek, L.	Maelor, L.	Wilson of Radcliffe, L.
Davies of Penrhys, L.	Monson, L.	Wootton of Abinger, B.
Denington, B.	Northfield, L.	Wynne-Jones, L.
Diamond, L.	Ogmore, L.
Donaldson of Kingsbridge, L.	Oram, L.

NOT-CONTENTS
Airey of Abingdon, B.	Gainford, L.	Netherthorpe, L.
Alexander of Tunis, E.	Gisborough, L.	Newall, L.
Allen of Abbeydale, L.	Gowrie, E.	Northchurch, B.
Alport, L.	Grimston of Westbury, L.	O'Brien of Lothbury, L.
Ampthill, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Orkney, E.
Auckland, L.		Pender, L.
Avon, E.	Harmar-Nicholls, L.	St. Aldwyn, E.
Balerno, L.	Hatherton, L.	Sandford, L.
Bellwin, L.	Hawke, L.	Sandys, L. [Teller.]
Belstead, L.	Hornsby-Smith, B.	Savile, L.
Berkeley, B.	Hylton-Foster, B.	Sempill, Ly.
Boyd of Merton, V.	Killearn, L.	Soames, L. (L. President.)
Bridgeman, V.	Kinloss, Ly.	Spens, L.
Campbell of Croy, L.	Lauderdale, E.	Strathclyde, L.
Cork and Orrery, E.	Long, V.	Strathcona and Mount Royal, L.
Cullen of Ashbourne, L.	Lyell, L.	Strathspey, L.
Daventry, V.	McAlpine of Moffat, L.	Stuart of Findhorn, V.
de Clifford, L.	Mackay of Clashfern, L.	Teviot, L.
De Freyne, L.	Macleod of Borve, B.	Trefgarne, L.
Denham, L. [Teller.]	Malmesbury, E.	Trenchard, V.
Drumalbyn, L.	Mancroft, L.	Trevethin and Oaksey, L.
Dundee, E.	Mansfield, E.	Vaizey, L.
Eccles, V.	Marley, L.	Vickers, B.
Ellenborough, L.	Merrivale, L.	Vivian, L.
Elliot of Harwood, B.	Middleton, L.	Ward of Witley, V.
Faithfull, B.	Milverton, L.	Westbury, L.
Ferrers, E.	Mountevans, L.	Willoughby de Broke, L.
Fortescue, E.	Mowbray and Stourton, L.	Wise, L.
Gage, V.	Murton of Lindisfarne, L.	Young, B.

Resolved in the affirmative and amendment agreed to accordingly.

5.37 p.m.

Lord EVANS of CLAUGHTON moved Amendment No. 16: Page 16, line 2, leave out ("injunction") and insert ("an order for specific performance as if there were in existence a contract for the sale of the property by the landlord to the tenant on the terms prescribed by this Part of this Act").

The noble Lord said: My Lords, your Lordships might remember that I moved a similar amendment at Committee stage because I felt that the Government were taking a heavy and blunt instrument to do what could have been done more subtly and much less messily by a different procedure of specific performance. I was told then by the noble Lord the Minister that since there was not a contract in the legal sense of the word in existence, the procedure of specific performance would not be applicable. Therefore, I re-drew the amendment so that the amendment would make what was not a contract into a contract for the purposes of applying the remedy of specific performance.

I have had a helpful letter from the noble Lord, Lord Mowbray and Stourton, in which he tells me—and I shall try to abbreviate what he has told me in the letter—that he has discovered that under section 47 of the Supreme Court of Judicature (Consolidation) Act 1925, a court can order the conveyance or lease under Part I of this Bill to be executed by a person nominated by the court when it is satisfied that the landlord has failed to complete under Section 16. I am obliged to the noble Lord for his letter.

Your Lordships will appreciate that what I was trying to avoid was a recalcitrant council which did not approve the concept of the sale of council houses making martyrs of themselves. We all have memories of occasions when councils have gone to great trouble to make martyrs of themselves to show how much they disapprove of the policy of the Government. Since the remedy for refusal to obey an injunction is imprisonment, I can see a number of council leaders in some councils—and I should not like to specify which—joyfully making martyrs of themselves in the style of the early Christian saints. I am somewhat reassured by the letter which the noble Lord has sent me. It seems to me that if what the noble Lord has said in his letter is the case, why, with great respect, have the Government bothered to insert this sanction saying that the remedy is to be enforced by injunction?

I should have thought that the Government, in the light of the evidence that the noble Lord has dug out from the 1925 Act, might want to consider, at least, changing "shall be enforceable by injunction", to "may be enforceable by injunction". Since the remedy is there that the court can sign a conveyance where the local authority refuses, I feel that we are using a very heavy, blunt instrument to do something which could be done more simply, with less publicity and with less difficulty. I should have thought that the Government might have welcomed the opportunity to get themselves out of a hole that they have perhaps unintentionally dug for themselves. I beg to move.

Lord MOWBRAY and STOURTON

My Lords, I am grateful to the noble Lord, Lord Evans of Claughton, for the way he has expressed gratitude for my letter. If the right reverend Prelate will not think it blasphemous, I was going to say the heavenly fruit machine under the conjunction of the stars, Clause 16, page 16, Amendment 16, has proved moderately fruitful to making the noble Lord's mind a little bit warmer to the Government's thinking, than it was before.

My Lords, I could read out a lot from my papers, but I would rather not do so. I would rather say that we still prefer the word "injunction" to his "specific performance". Having explained—and I am grateful to him for having done so—that it does not mean that we have martyrs and the courts have full powers, I should like to leave it at that. If noble Lords want it, I could read out more. With hat the noble Lord said, and under the benign blessing of the number 16, I should like to leave it at what the noble Lord has said.

Lord EVANS of CLAUGHTON

As I said before, my Lords, I was trying to seek the avoidance of confrontation. I have had a word with the noble Lord, Lord Janner, who kindly supported me at the Committee stage. Having drawn the Government's attention to this, if the Government gets into this kind of trouble we will not say "we told you so" but just point to the appropriate columns in the Official Report. I beg to withdraw this amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Clause 17 [Conveyance of freehold and grant of lease]:

Lord MOWBRAY and STOURTON moved Amendment No. 17: Page 16, line 11, at end insert ("and Part IV of that Schedule applies in relation to certain charges.").

The noble Lord said: My Lords, in speaking to Amendment No. 17, I should also like to speak to Amendment No. 21. These two amendments make the necessary provision for cases where a dwelling-house on which a tenant is exercising his right to buy is subject to an existing mortgage, or rent charge or other charge. These technical amendments will be important in the cases affected.

So far as the mortgages and other charges except rentcharges are concerned, the amendments embody two basic principles. First, a purchaser should expect to take the dwelling-house free of any such charge. Secondly, as far as possible the mortgagee's position should be sufficiently protected. This reflects the normal expectation of a purchaser in the private market. Such a purchaser would expect to take the conveyance of the property free from mortgages or other charges, but not free from rentcharges. I will come to rent charges in a moment. Housing associations may well have raised mortgages on their property; often (but by no means always) such mortgages would be in favour of the housing corporation. However in practice it is unlikely that a dwelling-house belonging to a landlord which is a local authority, development corporation or the Development Board for Rural Wales will be subject to a mortgage.

New paragraph 18(a) of Schedule 2 deals with the case where property is subject to a mortgage (or other charge except a rentcharge) in the following way. First, the dwelling-house will be conveyed (in the case of a house) free from any existing mortgage or other charge (other than a rentcharge). Secondly, the release of a dwelling-house from a charge under these provisions will be without prejudice to the landlord's personal obligation under the mortgage. I turn now to rentcharges. The provision for rentcharges needs to be different from that for mortgages. In contrast to general practice with mortgages, it is the custom for the purchasers of property subject to rentcharges to take the property with the rentcharge.

In money terms, the rentcharge will normally be at most an irritant: it will be no more of a financial burden on the purchaser than is a ground rent payable on a long lease. (If it was more a burden it would reduce the price which the purchaser paid). That is fairly obvious. Amendment No. 21 also amends Schedule 2 to provide that where a house—but not a flat—sold under the right to buy is subject to a rentcharge which does not affect other land, the conveyance of the house will be made subject to the rentcharge.

However, where the house is on a larger parcel of land which is subject to a rent-charge we need to make special provision which as far as possible avoids the need to make a series of apportionments of the rentcharge, following a series of sales under the right to buy. This would be a time-consuming and administratively expensive business. Therefore, Amendment No. 21 further provides that in these circumstances that although the dwelling-house will still be conveyed subject to the rentcharge, the landlord is to convenant to indemnify the purchaser and his successors in respect of the rent-charge. Also, if the rentcharge may be redeemed under the Rentcharges Act 1977, the landlord will be bound to redeem it.

The amendments make different provisions in the case of flats. They provide that where there is a charge (whether a mortgage or a rentcharge) on the freehold of the land on which there is a flat, a lease granted on that flat under the right to buy will not be affected by that charge. (It will remain secured on the landlord's residual freehold interest). Amendment No. 17 itself is a paving amendment needed to bring in all the above. I beg to move.

On Question, amendment agreed to.

The DEPUTY SPEAKER (Baroness Wootton of Abinger)

My Lords, I understand that the noble Lord, Lord Monson, does not wish to move this amendment, Schedule 2, Amendment No. 18. Does either the noble Baroness, Lady Birk, or the noble Earl, Lord Kinnoull, wish to move it?

Baroness BIRK

My Lords, not moved.

The DEPUTY SPEAKER

My Lords, Lord Monson, equally does not wish to move Amendment No. 18A which is on the supplementary list. We therefore pass to Amendment No. 19 in the name of Lord Bellwin.

[Amendment No. 19 not moved.]

The DEPUTY SPEAKER

Amendment No. 19 not moved. Amendment 20, Lord Bellwin?

Schedule 2 [Conveyance of freehold and grant of Lease]:

5.50 p.m.

Lord MOWBRAY and STOURTON moved Amendment No. 20: Page 109, line 24, leave out ("An agreement") and insert ("A provision").

The noble Lord said: My Lords, this is a drafting amendment. Paragraph 16 of Schedule 2 refers back to the beginning of paragraph 15, which is in terms of a "provision" rather than an "agreement." This amendment will mean that the terms used in these two paragraphs are consistent. My Lords, I beg to move.

On Question, amendment agreed to.

Lord MOWBRAY and STOURTON moved Amendment No. 21:

Page 109, line 34, at end insert—

("PART IV

CHARGES ON FREEHOLD

18. Where there is a charge (however created or arising) on the freehold which is not a tenant's incumbrance, then—

1. (a) if it is not a rentcharge, the conveyance of the freehold in pursuance of the right to buy shall be effective to release the freehold from the charge, but the release shall not affect the personal liability of the landlord or any other person in respect of any obligation which the charge was created to secure; and
2. (b) whether or not it is a rentcharge, the charge shall not affect a lease granted in pursuance of the right to buy.

19—(1) Where the freehold is subject to a rentcharge which does not affect other land the conveyance shall be made subject to the rentcharge.

(2) Where the freehold is subject to a rent-charge which also affects other land the conveyance shall be made subject to the rentcharge but shall contain a covenant by the landlord to indemnify the tenant and his successors in title in respect of any liability arising under the rentcharge.

(3) In a case falling within sub-paragraph (2) above the landlord shall, immediately after the conveyance and if the rentcharge is of a kind which may be redeemed under the Rentcharges Act 1977, take such steps as are necessary to redeem the rentcharge, so far as it affects land owned by the landlord (including land treated by sub-paragraph (4) below as so owned).

(4) For the purposes of the Rentcharges Act 1977 and of sub-paragraph (3) above any land which has been conveyed by the landlord in pursuance of the right to buy, but subject to the rentcharge, shall be treated as if it had not been so conveyed but had continued to he owned by the landlord.

20. In this Part of this Schedule "rent-charge" has the same meaning as in the Rentcharges Act 1977; and for the purposes of paragraph 19 above land is owned by a person if he is the owner of the land within the meaning of section 13(1) of that Act.").

The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 17. I beg to move.

On Question, amendment agreed to.

Clause 19 [Dwelling-houses in National Parks and areas of outstanding natural beauty, etc.]:

Baroness BIRK moved Amendment No. 22:

Page 16, line 34, at beginning insert— ("the local authority with the consent of").

The noble Baroness said: My Lords, this amendment was discussed in Committee and it deals with the power and opportunity of local authorities to designate rural areas, which was previously covered in Clause 18. It was clear from the debate in Committee, which was not very conclusive, that many noble Lords on all sides of the Committee were concerned about these very great arbitrary powers—which, incidentally, run through this whole Bill—which are being taken by the Secretary of State. This amendment would enable local authorities themselves to designate rural areas, with the consent of the Secretary of State.

Many of us felt that the autonomy of local authorities, which has been seriously eroded throughout this Bill, is particularly in danger under this clause. But they are the people who are very much on the ground in the rural areas, and who should be in the position of designating them, with the consent of the Secretary of State. As I remember, the Minister said that local authorities could undertake an initiative, and there was no reason why they should not do that. But, later on, he was unable to say at which point the initiative could be taken and in what way. But he said that there were three good reasons why this decision should be left to the Secretary of State himself.

The first was that this was the only way of being sure that desirable consistency in the policy was maintained. The second was administrative convenience, though, he emphasised not, the convenience of the Secretary of State. The third reason was constitutional, which seemed to me to be making rather heavy weather of it. The alarming point about all these reasons is that they make for a far too tidy state. To have everything consistent is a miserable way of doing things, because areas are not consistent, local authorities are not consistent and, thank God, most of us are not consistent; otherwise, we should be more like automatons than human beings. Administrative convenience is a very bad reason for doing something, because such a reason should be tailored to the right policy and not the other way round. As I said, the constitutional point is making rather heavy weather of it.

I asked the Minister at which point the local authority would be brought in, since the Secretary of State would make an order. I said that there is no point in taking an initiative if nobody takes any notice, if one is not called in and if one is not treated as an equal partner. I said that if the Minister could not take the matter any further, perhaps he would come back on Report or write to me and tell me exactly what was the process. The Minister replied: I really do try hard to be understanding and helpful". he does, and I agree with that— I cannot really see the point. The only thing I can suggest is that the noble Baroness might care to have a word with me afterwards, unless it is so late that neither of us is in the mood to do so "—[Official Report, 30/6/80; col. 125.] Evidently we were not in the mood to do so. Nothing further has been said and we have not corresponded on this point.

But, to be serious, this is an important point. It is right that local authorities should come in at this point. Earlier on in the debate, the Minister said that if one designated an area it may turn out to be partly in the district of another authority, which might cause difficulties. I feel that these difficulties can be ironed out, and they usually are. Anyhow, I do not see any problem, because if one authority wanted to designate a rural area which was partly within the area of another authority, they could come to some agreement or could agree to disagree. It is much more healthy and virile to operate in that way, rather than to leave it to the centralist hand—I will not say equal hand—of the Secretary of State, which is much more remote. My Lords, I beg to move.

Lord HYLTON

My Lords, this is a very important amendment. I and many others have been most concerned, and still are, about the impact of the right to buy in rural areas. It is for this reason that I wrote to my noble friend on the Front Bench immediately after the Committee stage, asking him what would be the criteria by which the Secretary of State would designate his rural areas. I also asked when these criteria would be published. He has very kindly replied to me, but I am sorry to say that all he has been able to put on paper is the following: The relevant orders would go through the normal parliamentary processes of the Negative Resolution procedure. Beyond this, I cannot commit my colleagues. Therefore, we do not know what a rural area will be in the mind of the Secretary of State.

At the Committee stage, I quoted a number of areas in Somerset which are highly debatable. Some people could call them urban; others could call them rural. The noble Lord, Lord Hatch of Lusby, quoted a number of areas of a different character in Yorkshire where, again, there could be this difference of opinion. That is why it is right to give a local authority the initiative in defining a rural area, in its own context of circumstances. Moreover, it is entirely consistent with Conservative principles that there should he this initiative in the hands of the local authority, who know the area and who are elected to represent it. Of course, you need the consent of the Secretary of State as well, in order to get some kind of uniform national policy, but let the initiative be with the local authority. I very much hope that my noble friend will look very favourably upon and, if possible, accept, at this stage, this amendment.

Lord BELLWIN

My Lords, I cannot accept this amendment. The noble Lord, Lord Hylton, made the important point of the initiative and the noble Baroness, Lady Birk, asked at what stage an authority would take such an initiative. It would be open to an authority to instigate steps to have an area so designated at any time after the Bill has been enacted. It could do so immediately. Indeed, most of the local authorities that I know are not backward in coming forward, when they feel they have something that they want to press. They will know precisely what it is that we are about. They will know all that is going on under the Bill, and this move will be entirely up to them. I have every confidence that they will do so. As my noble friend rightly said, it is then, quite properly, up to the Secretary of State to react to those initiatives. There is no more reason to suppose that the reaction will be less favourable than it might be to the opinions which anybody else might have.

The important point here, and one of very great significance, is the third, the constitutional reason, to which the noble Baroness, Lady Birk, referred. Surely it must be right that orders of this kind should come under the scrutiny of Parliament, and that is what will happen under the Bill, as drafted. However, they would not do so under the amendment moved by the noble Baroness, Lady Birk. For that reason alone, I should have thought that the noble Baroness might not have wanted to pursue the amendment in this way. I am not sure whether she really appreciates the significance of that point. Possibly she does.

I do not know that there is much more that I can add to what I said at Second Reading without going over it all again, which I have no wish to do. I understand the concern, but I feel, for the reasons which I have given, that it should not be a matter of concern. Possibly the best safeguard of all is that there is parliamentary cover and every opportunity for authorities to take initiatives. There is also the position of the Secretary of State. I think that everybody is involved. In the light of that explanation, I hope

that the noble Baroness feels that she does not need to pursue the amendment.

Baroness BIRK

My Lords, this is the second time round on this question. In Committee, apart from the Minister, nobody supported the line which he has taken. Concern was expressed all round. A point which I did not make when I moved the amendment concerns delay. If a local authority undertakes this initiative at some point and applies to the Government to declare a rural area, we do not know how long it will be before the Government department replies and everything is sorted out. We have to be realistic. We all know that these things take time. They will take even longer if we get, as we are getting now, cuts in central Government expenditure. Therefore, it will he understandable if things are further delayed.

I think that rather heavy weather was made of the constitutional point, and I am not entirely convinced about it. As it will be the local authority, with the consent of the Secretary of State, which will designate the area, I think because of the way in which it is drafted, that if something arises it will go to Parliament. On the other hand, nowadays there are so many areas in which local authorities take decisions that I am not completely horrified by the idea of it not having parliamentary approval. If there is great feeling about the designation of one of these areas, first it need not get the support of the Secretary of State and, secondly, the Members of Parliament for that area have every right to bring it up—and most definitely would do so—in the House of Commons. I find that the Minister's reply is very unsatisfactory. It has not taken us any further. I am afraid, therefore, that I shall press the amendment.

6.4 p.m.

On Question, Whether the said amendment (No. 22) shall be agreed to?

Their Lordships divided: Contents, 88; Not-Contents, 82.

CONTENTS
Ailesbury, M.	Balogh, L.	Beswick, L.
Amherst, E.	Banks, L.	Birk, B.
Ardwick, L.	Barrington, V.	Blease, L.
Aylestone, L.	Beaumont of Whitley, L.	Boston of Faversham, L.
Bacon, B.	Bernstein, L.	Brockway, L.
Bruce of Donington, L.	Houghton of Sowerby, L.	Ross of Marnock, L.
Burton of Coventry, B.	Hughes, L.	Seear, B.
Chitnis, L.	Hylton, L.	Segal, L.
Cledwyn of Penrhos, L.	Janner, L.	Shinwell, L.
Collison, L.	Jeger, B.	Simon, V.
Cooper of Stockton Heath, L.	Kaldor, L.	Stamp, L.
Craigavon, V.	Kilmarnock, L.	Stedman, B.
Crowther-Hunt, L.	Leatherland, L.	Stewart of Alvechurch, B.
David, B.	Llewelyn-Davies of Hastoe, B. [Teller.]	Stewart of Fulham, L.
Davies of Leek, L.		Stone, L.
Davies of Penrhys, L.	Lovell-Davis, L.	Strabolgi, L.
Denington, B.	McCluskey, L.	Strauss, L.
Diamond, L.	Maelor, L.	Taylor of Mansfield, L.
Donaldson of Kingsbridge, L.	Milverton, L.	Underhill, L.
Evans of Claughton, L.	Monson, L.	Wade, L.
Fisher of Rednal, B.	Mountevans, L.	Wallace of Coslany, L.
Fulton, L.	Northfield, L.	Wells-Pestell, L.
Gaitskell, B.	O'Brien of Lothbury, L.	Whaddon, L.
Gifford, L.	Ogmore, L.	White, B.
Goronwy-Roberts, L.	Oram, L.	Wigoder, L.
Hale, L.	Peart, L.	Willis, L.
Hampton, L.	Phillips, B.	Wilson of Radcliffe, L.
Hanworth, V.	Ponsonby of Shulbrede, L. [Teller.]	Winterbottom, L.
Hatch of Lusby, L.		Wootton of Abinger, B.
Hooson, L.	Rhodes, L.	Wynne-Jones, L.
NOT-CONTENTS
Airey of Abingdon, B.	Faithfull, B.	Murton of Lindisfarne, L.
Alport, L.	Ferrers, E.	Newall, L.
Ampthill, L.	Fortescue, E.	Northchurch, B.
Auckland, L.	Gage, V.	Orkney, E.
Avon, E.	Gisborough, L.	Pender, L.
Balerno, L.	Gowrie, E.	Rawlinson of Ewell, L.
Bellwin, L.	Grimston of Westbury, L.	St. Aldwyn, E.
Belstead, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Sandford, L.
Berkeley, B.		Sandys, L. [Teller.]
Bessborough, E.	Harvey of Tasburgh, L.	Savile, L.
Boyd of Merton, V.	Hatherton, L.	Soames, L. (L. President.)
Bridgeman, V.	Hawke, L.	Spens, L.
Brougham and Vaux, L.	Hornsby-Smith, B.	Strathclyde, L.
Campbell of Croy, L.	Hylton-Foster, B.	Strathcona and Mount Royal, L.
Colville of Culross, V.	Killearn, L.	Strathspey, L.
Cork and Orrery, E.	Kinloss, Ly.	Stuart of Findhorn, V.
Craigmyle, L.	Long, V.	Teviot, L.
Cullen of Ashbourne, L.	Lyell, L.	Trefgarne, L.
de Clifford, L.	Mackay of Clashfern, L.	Trenchard, V.
De La Warr, E.	Macleod of Borve, B.	Trevethin and Oaksey, L.
Denham, L. [Teller.]	Malmesbury, E.	Vaizey, L.
Denman, L.	Mancroft, L.	Vickers, B.
Drumalbyn, L.	Mansfield, E.	Vivian, L.
Dundee, E.	Marley, L.	Ward of Witley, V.
Eccles, V.	Merrivale, L.	Westbury, L.
Ellenborough, L.	Middleton, L.	Wise, L.
Elles, B.	Monk Bretton, L.	Young, B.
Elliot of Harwood, B.	Mowbray and Stourton, L.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.

The DEPUTY SPEAKER

My Lords, I have to call your attention to the fact that, owing to a misprint in the Procedural Orders, Amendment No. 18B was not called after Amendment No. 18. If your Lordships are agreeable, I will now call Amendment No. 18B in the name of the noble Lord, Lord Bellwin.

Schedule 2 [Conveyance of freehold and grant of lease]:

Lord BELLWIN moved Amendment No. 18B:

Page 108, line 18, at end insert ("but subject to sub-paragraph (2) below. (2) If a building contains two or more dwelling-houses and the landlord has, since the passing of this Act, granted a lease of one of them for a term of not less than 125 years, any lease granted in pursuance of this Chapter of the other or one of the others may be for a term expiring at the end of that term and, if it is for such a term, the assumption stated in section 6(4)(a) shall be modified accordingly.").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 2B. I beg to move.

The DEPUTY SPEAKER

My Lords, we now revert to the main list: Amendment No. 23, in the name of the noble Lord, Lord Bellwin.

Lord BELLWIN

My Lords, I withdrew Amendment No. 23. It was not moved.

The DEPUTY SPEAKER

Not moved.

[Amendment No. 24 not moved.]

Clause 21 [Costs]:

6.13 p.m.

Baroness BIRK moved Amendment No. 25: Leave out Clause 21 and insert the following new clause:

Costs

(21. The landlord and, if appropriate, the Housing Corporation may charge to the tenant the costs incurred by it in connection with the tenant's exercise of the right to buy and the tenant's exercise, if such be the case of the right to a mortgage but in either case only to the extent that they do not exceed such amount or amounts as the Secretary of State may by order specify.").

The noble Baroness said: My Lords, Clause 20 as it now stands provides that a landlord may pass on to the purchaser only the cost of a mortgage and not the legal administrative costs of sale. These will amount to a considerable sum as the volume of sales increases following enactment of the Bill. Under existing arrangements, it is common practice for authorities to pass on to the purchasers the legal administrative costs of the transaction. It is my view and that of the AMA that it is unreasonable that ratepayers and tenants should pay for such costs, particularly in the light of the generous discount arrangements which will be available. Accordingly, we should like to see the insertion of this new Clause 20 whereby the landlord will be able to pass on to the purchaser legal and administrative costs up to a maximum prescribed by the Secretary of State. It seems to me not only to be legally right but to make economic good sense, because if people have the opportunity to buy the houses, and buy them at these rates of discount, then I think it is important that they themselves should carry the cost and that it should not be borne by the rest of the community. I beg to move.

Lord BELLWIN

My Lords, I accept the point made by the noble Baroness that the prohibition of the recovery of the costs of a right-to-buy sale by the landlord from the tenant in Clause 21 of the Bill makes a departure from current practice in some local authorities when a house is sold under the general consent for council house sales. But circumstances are not entirely the same in both cases. The question of how the costs incurred by the parties to a sale under the right to buy should be met is not clear-cut, and called for a judgment to be made. The judgment that we came to is reflected in Clause 21. It was that each party to the transaction should bear its own costs arising from a sale under the right to buy. There are two reasons for this. First, it seemed a fair arrangement on general grounds, given that the Bill introduces a statutory right for the secure tenant to buy and a statutory obligation on the landlord to sell. Secondly, it corresponded to normal arrangements when a dwelling was sold on the private market.

I am sure that the noble Baroness, when selling her house, would not expect a purchaser to pay the costs she had incurred as vendor; nor would she expect to be required to pay the vendor's costs if she were the buyer. The landlord's costs incurred as a result of a tenant's right to buy are vendor's costs, and it is fair that the landlord, as vendor, should bear them. The tenant, in turn, will have to bear such costs as he may incur as a purchaser. He may decide that he wishes to be legally represented, for example, or that he wishes to have a structural survey carried out on the property.

It was to follow practice in the private sector, also, that we provided in subsection (2) of Clause 21 for a charge to be made to the tenant for costs that the landlord or, if appropriate, the Housing Corporation, incurs in connection with the tenant's exercise of his right to a mortgage. As your Lordships know, building societies and other mortgagees normally recover their costs in this way. The main items are legal fees and the cost of the mortgagee's survey of the property.

I should like to make it clear that the prohibition in subsection (1) of Clause 21 applies only to the landlord's own costs; it does not prevent arrangements of the sort provided for in subsection (1)(c) of Clause 9, under which a tenant's costs can be defrayed by the landlord or the Housing Corporation on his behalf and then recovered. It seems to me that the arrangements in Clause 21 are entirely fair and reasonable. I cannot agree to the charging of the vendor's costs to the purchaser in the way suggested by the noble Baroness, Lady Birk, even with the safeguard of the maximum amount which her amendment would empower the Secretary of State to specify by order. I hope that she will accept this argument and maybe withdraw her amendment.

Baroness BIRK

My Lords, I am really not very happy about that. The Minister gave the analogy of my buying a house and how I would feel about the costs. If I bought a house that I had been living in for 20 years and got 50 per cent. discount, and if in addition I had also had the option, I do not think I would mind very much about paying my share of the costs. But this is not the point. The point is that that would be so if I were living as a council tenant and bought that house, because I would then be in the public sector area and be involved, and the people who would be helping to defray my costs would be ratepayers and taxpayers; so that is entirely different.

On this point, perhaps I could quote a case from Harrogate Borough Council, where they had a report from the housing property committee that a charge of roughly £130 a house would be made against the purchase of council houses to cover the administrative costs. It was then that the chief executive found that under the Housing Land Bill now going through the House a charge of that kind would be inadmissible when the Bill becomes an Act. It really looks as though this can lead to quite a considerable expense being laid on the landlord in the case of sales of houses. It is something that I certainly do not intend to press at the moment, but in spite of what the Minister said I wonder whether he would take it back to look at it. It really is not a party political point. It just seems to me to be rather inequitable. Local authorities, again with more and more limited resources and the compulsion on them to give mortgages, are going to find themselves up against it as well with some additional expenditure which I really think in this case could be undertaken by the tenants.

Lord BELLWIN

My Lords, by leave of the House, I think we have here a fundamental difference really of what the impact on the finances of local authorities will be. I do not see it at all as the noble Baroness does, with her fears about the effect that it will have on the finances of local authorities. Indeed, quite the contrary, even with the discounts. Therefore, the main point upon which she makes her case, which she does so well, is obviously one on which we do not agree. For that and the other reasons I have already given. I fear that at this stage I am not able to take it back, although I entirely understand the point that she is making.

Baroness BIRK

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.21 p.m.

Lord BRUCE of DONINGTON moved Amendment No. 26: After Clause 21, insert the following new clause:

("Conveyancing

Section 22 of the Solicitors Act 1974 (Unqualified person not to prepare certain instruments) shall not apply in relation to the preparation of a conveyance, mortgage or lease in pursuance of this Chapter, where the title to the land in question is, at the time when the notice under section 5 of this Act is served, already registered with an absolute title under the Land Registration Act 1925.").

The noble Lord said: My Lords, this is an amendment which I move with some diffidence because it is one that I would normally have expected to come from the Government Benches. This is an amendment which seeks to break the "closed shop" in rather an important respect. Your Lordships will recall that under Section 22 of the Solicitors Act 1974—which was passed by a previous Administration not of the noble Lord's party, so I do not seek to make any particular point of it— any unqualified person who directly or indirectly—

1. (a) draws or prepares any instrument of transfer or charge for the purposes of the Land Registration Act 1925, or makes any application or lodges any document for registration under that Act at the registry, or
2. (b) draws or prepares any other instrument relating to real or personal estate, or any legal proceeding, shall, unless he proves that the act was not done for or in expectation of any fee, gain or reward, be guilty of an offence …".

That particular section of the Act establishes for an important part of the legal profession a complete monopoly of acting in this particular way. As I have said, from a Government who, rumour has it, are so completely opposed to the principle of the closed shop, I should have thought that this Bill presented an admirable opportunity (particularly since the vendors are either local authorities or housing associations and no particular complications are likely to arise) where they could easily have tabled this amendment themselves. The position, of course, is reserved, When any notice under Section 5 of the Act is served, already registered with an absolute title under the Land Registration Act …"; and other cases of course would normally be prepared and engrossed by properly qualified solicitors. I should have thought this amendment could easily have been tabled by the Government in pursuit of their widely enunciated principles on the subject. Consider the amount of costs that would be saved not only to local authorities and housing associations but also to the individual purchasers themselves. I should have thought purely in the interests of economy this would have been an excellent provision for the Government to have inserted.

It has often been said that matters relating to the transfer of ownership of property or the conveyance of property are matters of immense legal complication and give rise to difficulties, and indeed may result in some defect of a title further down the line. But there are many more complicated transactions than the simple transfer of property, and if simplicity, or alternatively complication, were to be the guide surely the Government would have insisted on legal advice being taken before contracts of insurance were entered into. It must be within the noble Lord's experience on reading insurance policies and massive exclusion clauses, which are virtually incomprehensible in any small print, that if ever legal advice is required then surely in some cases it should be required before a contract of insurance is entered into.

I think the noble Lord ought to take these matters into consideration and, in view of the well-known principles enunciated by his party, he should at least consider taking a step forward to free many tenants and landlords from what is frequently the onerous and costly responsibility imposed on them by law of employing members of the legal profession for this purpose. I beg to move.

Lord EVANS of CLAUGHTON

My Lords, may I say that the normal standards of politeness in your Lordships' House to which I have become accustomed are being strained in the extreme by the mover of this amendment. I must declare an interest, my Lords; I am a solicitor. I should like to suggest to the noble Lord that possibly we should also limit some of the monopolies which the accountancy profession enjoys. I do not think that this is either the time or the occasion to discuss the monopoly which the legal profession enjoys in the conveyancing field. It should surely be a matter for further legislation, if necessary, after consideration of the Royal Commission's report; and I would remind your Lordships that the Royal Commission—no doubt the noble Lord, Lord Bruce, would say "whitewashed" the legal profession, but those of us who are lawyers thought they gave a very fair and reasoned report on the way in which the legal profession exercises its conveyancing monopoly and the not unduly expensive means that is employed to do this. But may I point out that the legal profession and the provincial branches have agreed extra-statutory scales of remuneration for acting in this kind of transaction, which as your Lordships will realise is often cheaper and less onerous because of the nature of the way in which the title has been prepared by the local authority, and there is a very generously calculated extra-statutory scale of charges agreed between the local authorities and the local law societies. That is the first point.

The second point is that with the best will in the world these unqualified conveyancers are a very peculiar race indeed. In the part of the world where I practice as a lawyer there is a gentleman who benefits from one of the loopholes in the law and practices as a conveyancer on the strength of being a notary public. He failed his Law Society finals only because he failed to pass his conveyancing paper at least eight or 10 times and now he practices as a conveyancer. If that is the kind of person that the noble Lord, Lord Bruce, wants to put in charge of the tenants who are trying to buy their council houses and change their style of life, and who often need considerable explanation about the complexities of the nature of the documents they are about to sign, I should have thought your Lordships would want to think carefully about it before agreeing with the noble Lord's proposal.

I should like to add that I speak only for myself. I do not speak for my noble friends, many of whom are as prejudiced against my profession as are many noble Lords in other parts of your Lordships' House, but I do hope that your Lordships will not support this amendment. If this matter were to be discussed it should be on a quite separate matter of an amendment to the Solicitors Act.

Lord JANNER

My Lords, may I declare an interest too? In my 60 years in professional life, I have come across attempts made by people who are not qualified which have landed people, their so-called clients, into very serious difficulties. Let me give a simple illustration. We are dealing at present with leaseholds. How many people have entered into leaseholds without seeking proper advice and later on have found themselves, at the end of a period, without the freehold and having to live and make arrangements with the landlord into whose hands this has fallen?

My Lords, this is not as simple a matter as it might seem to the average individual. It is terribly important that an unqualified person should not be in a position to advise on matters of a legal nature, any more than an unqualified person should give medical advice. A person needing medical advice ought to go to a doctor; in other words, a person holding himself out to be able to do what a doctor has been examined about and who has had experience is the only person who can claim to be a doctor and to carry on that profession.

This is not just a matter of profession. A lot of us have given freely of our time. I am sure my noble friend Lord Evans will agree that in cases where people have been hard up, are really in a bad way or something of that sort, the Law Society and the lawyers themselves in the local area invariably give them a hand-out. This is factually the case, and I defy anybody who is in contact with solicitors to deny this. I cannot think of any of my colleagues who has found himself confronted by a person who is really poor who has not reduced the fees or has charged no fees.

The real point is this: how can an unqualified man know what the absolute consequences are of any advice that he gives? What compensation, what insurance, is there? I do not know whether your Lordships realise that it costs £1,000 a year, or something of that sort, for every individual, to cover insurance for any mistakes made in order to see to it that compensation shall be paid to anyone who has been wrongly advised and consequently suffered damages. This is a very interesting and, I think, a very important profession.

I do not know how many of your Lordships have been in the House of Commons, but if you go to a "surgery" in the House of Commons and anyone comes along to ask for advice, there are small committees in which the advice is given freely to the residents of a particular area. This is not a trivial matter; this is a profession in which it takes six or seven years before one can actually practise as a solicitor, and this profession has to be qualified to deal with whatever contingency may arise.

Your Lordships have heard the noble Lord, Lord Evans. The question of scales and things of that nature are under consideration. I think it is much better that one takes the advice of the Law Society and the law profession because they are the people who know most about this kind of thing. In spite of what a lot of people think of solicitors, barristers and lawyers, should they be in the House or anywhere else, the fact of the matter is that they are professional people who advise, and without advice very big mistakes can be made. The profession itself is a reasonable profession which understands the needs of people who are not in a position to pay.

Lord BELLWIN

My Lords, I was going to ask: can anyone join in? Perhaps I need not quite do that. I think the noble Lord, Lord Evans, in fact made the point I was going to make; namely, that the Government are it so happens, at the present time considering the report of the Royal Commission on Legal Services, and clearly until he had some views as to that he would not want to make any such moves. So, without my making too much of a do of it, I think I can leave the matter to the noble Lord, Lord Bruce.

Lord BRUCE of DONINGTON

My Lords, I seen to have been a little misunderstood by members of the legal profession within your Lordships' House. This amendment did not in any way seek to prohibit solicitors from doing busines of this kind. The noble Lord, Lord Janner, did refer to cases where mishaps occur, and perhaps it is some commentary that all individuals—including members of the legal and, I should add, accountancy professions—are prone to make errors from time to time. Of course, there are professional indemnity policies which exist precisely for that purpose, and solicitors do insure themselves, thereby admitting the feasibility of error, as indeed we do in our profession.

Lord JANNER

My Lords, I apologise for interrupting, but would the noble Lord be good enough to say whether any insurance company is prepared to cover a person who is not a professional man in these matters?

Lord BRUCE of DONINGTON

My Lords, that is a matter for the insurance companies. I know of no one. Perhaps I could mollify the noble Lord by saying that if I intended to embark on a transaction of this kind I should not hesitate to employ the services of my own solicitor. All I wished to do was to allow people freedom under certain well-defined circumstances. But, as the noble Lord opposite has said, the report of the Royal Commission is to be considered. I would not wish to intrude on your Lordships' time any further and I will, with your Lordships' permission, withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 [Secretary of State's power to intervene]:

Baroness BTRK moved Amendment No. 27: Page 19, line 36, after ("so") insert ("and of his reasons for doing so").

The noble Baroness said: My Lords, this is an extremely important amendment because we are once again, as we were in the previous amendment, dealing with the powers of the Secretary of State. The whole of Clause 23 gives the Secretary of State quite unprecedented powers to intervene with local government; and the object of this amendment, which in the circumstances is quite a modest little amendment, is simply in Clause 23(1) to say that the Secretary of State should give to the landlord or landlords not only notice in writing of his intentions but also "his reasons for doing so". We are only asking here for the reasons.

If I might just briefly review the powers that Parliament is being asked to give the Secretary of State, in the first place he can, after serving his notice, go even beyond the powers Parliament is asked to give to allow the right to buy. This is by virtue of subsection (7), which, may require the taking of steps different from those which the landlord would have been required to take". In other words, he is going to be allowed to act in what I would call an extra-parliamentary manner. He can under subsection (5) require the landlord to produce any document or supply any information and require officers of the council to produce any document or any information even if they are not instructed to do so. That particular subsection is dealt with in a following amendment.

He can also take over on behalf of the council mortgage payments and refuse to return the money obtained to the council whose property was sold except at the pleasure of the Secretary of State; that is in subsection (4). By virtue of Clause 23 the Secretary of State can actually transfer the ownership of property, built and paid for in the main by local councils, to the tenant. Finally, the Secretary of State can charge the council such sums as he may determine for the cost of compulsorily seizing and selling its property over its head; that is in subsection (9).

What conditions are laid down for the exercise of such power?—which any Conservative Government would condemn as monstrous if it were applied to private property rather than that held in the public trust. Only that the Secretary of State shall believe that the right to buy may have difficulty in being exercised effectively and expeditiously. This is such a vaguely worded clause, with absolutely no checks on the powers of decision of the Secretary of State. This is again what I am afraid we keep coming back to in this Bill. It is another fundamental attack on the principle of local autonomy, of local councils managing their own property. This is an extremely modest amendment to deal with it.

I would point out to the noble Lord who is to reply that not only is there no precedent for this but there are precedents which have been brought in by Conservative Governments for doing the opposite. When the Conservative Government passed their last housing Act, the Housing Finance Act 1972, it included the power to require councils to put up its rents and it vested in central Government a power to impose its own authority in default if any authority was recalcitrant. It is true it gave rise to the Clay Cross affair which caused considerable heat. In that Act there was an advance notice provision which read as follows: It shall be the duty of the Secretary of State before making an order … to give notice in writing to the authority concerned that he is considering whether to make such an order and to have regard to any representations made to him by the authority within one month of the notification ". This is exactly the sort of thing I am asking for in this Bill.

Perhaps I may remind the noble Lord that this was discussed in Committee. It is very interesting that on all these matters that were discussed in Committee there were practically no occasions, especially when these outstanding and fundamental problems were aired, on which there was any support for the Minister from the Benches opposite. At the end of the various criticisms that were rained on him from these Benches and from the Liberal Benches the noble Lord, Lord Bellwin, said: I am not at all convinced; at the same time I recognise the point of view being put forward. I cannot accept the amendment. I do not agree with it and I do not think that it is necessary, but I am prepared to do the very thing that the noble Lord suggested and talk to my colleagues about it. Beyond that I cannot go. That I will undertake to do ".—[Official Report, 30/6/80; col. 149.] I do not seem to remember receiving any illumination of any talks, if and when they took place, but hopefully the noble Lord who is to reply on this may have come back with the happy news that the Government are going to accept what I would call a very modest amendment in regard to what is a draconian list of powers the Secretary of State has under this clause. I beg to move.

Lord MOWBRAY and STOURTON

My Lords, I seem to have been plunged into this amendment rather at the deep end. When this question was discussed at Committee stage my noble friend said that he would talk about it to our colleagues, although he made it clear that he was not convinced by the case that the noble Baroness, Lady Birk, and the noble Lord, Lord Gifford, had put forward. I understood that he had had discussions, but if the noble Baroness says that he has not it is obviously an omission of memory on my noble friend's part. I do not know. I seem to have it in front of me that there were discussions. It may have been something which was halfway between this and something else. These matters are so complicated that it is easy for the noble Lord or noble Baroness to muddle up what they did discuss. I have done that myself before today, as your Lordships are aware. My noble friend, I gather, having re-read carefully what was said in this House, wrote to the noble Baroness and to the noble Lord, Lord Gifford, with his conclusions.

The noble Lord, Lord Gifford, was concerned that there should be a requirement on the Secretary of State to consult a local authority before serving a notice under what is now Clause 23(1). As my noble friend explained on that occasion, consultation is in effect already built in because of the nature of the events which would lead up to an intervention. I sincerely hope that matters will never go that far, but if they did it would first have been necessary for the case to have been brought to the attention of the Secretary of State as one where he might consider using his powers under this clause. It would be natural and normal for there to be contact by way of preliminary inquiries from the Department about the case or cases concerned at that stage. My honourable friend the Minister has also undertaken quite specifically that administrative steps would always be taken to notify any authority on which the Secretary of State was considering serving a notice. So in practice the consultation which the noble Lord wanted to take place is already provided for.

It is inconceivable, I would suggest, that with the Bill as it stands a notice should come, or could come, as a surprise to a local authority. The authority will always know that it had been in the offing and they will also know about the events leading up to it and the background to its service. It would simply not be possible to operate the clause in any other way. The noble Lord, Lord Gifford, implied in Committee that if some sort of advance consultation procedure could be considered by the department that would be an acceptable substitute for the amendment, which has now been moved again. But, as my noble friend said, consultation is in practice already assured. I do not accept therefore that this amendment is necessary, and I would urge the noble Baroness to consider withdrawing it.

Baroness BIRK

My Lords, I must apologise because recollection has suddenly come to me. I think the noble Lord will understand; he is always sympathetic. We have had such a shoal of letters from the department. The words "administrative steps" strike a bell, and I have a

feeling that I must have filed it under "turned down", and so it then got lost. I think I probably did get it, but, as the noble Lord will understand, I was not convinced by it.

If he says it is really already written in because consultations would take place, I still think we are not talking about informal meetings or just a briefing for a seminar. We are talking about what goes into legislation and I think we must have a great deal of respect for that and a great deal of care. I am always unhappy even if one says these things will happen and the administrative steps will take place and everybody will know about it in advance, that it still should not be written into the legislation.

I still believe it is important because we are dealing with very serious matters: personnel change in ministries, Governments change and it is very important to have what I feel are safeguards; whether they are safeguards for the individual, safeguards for the local authority or safeguards for other bodies, they should be written into the Bill. As I said when I moved it, I consider this an extremely modest amendment. All I am asking is that the reasons should be in writing as well as the intentions in the notice. It seems to me to be rather unnecessarily obdurate to resist something which I would think was as sensible as this. Anyhow, I will not take any more time on it because I intend to press the amendment.

6.52 p.m.

On Question, Whether the said amendment (No. 27) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 74.

Resolved in the affirmative, and amendment agreed to accordingly.

Lord MOWBRAY and STOURTON

My Lords, I beg to move that consideration on Report be now adjourned, so that we can deal with the next business. It is the intention that this Report stage will be resumed at 8 p.m.

EUROPEAN COMMUNITIES (DEFINITION OF TREATIES)(ECSC DECISION OF 18th MARCH 1980 ON SUPPLEMENTARY REVENUE) ORDER 1980

7 p.m.

Viscount TRENCHARD rose to move, That the draft order laid before the House on 23rd June be approved.

The noble Viscount said: My Lords, I beg to move that the draft European Communities (Definition of Treaties) (ECSC Decision of 18th March 1980 on Supplementary Revenue) Order 1980, laid before your Lordships' House on 23rd June 1980, be approved.

The order specifies as a Community treaty the decision taken at the Council of Ministers on 18th March 1980 to allocate supplementary revenue to the 1980 Budget of the European Coal and Steel Community. If the House approves this order, it will formally define the decision as a Community treaty under Section I of the European Communities Act 1972 thereby permitting the necessary sum to be paid to the ECSC as provided for in Section 2(3) of the Act.

I am sure that noble Lords will be acquainted with this procedure for allocating supplementary revenue to the ECSC since it was used twice last year in respect of both the 1978 and 1979 ECSC Budgets. Although there was some upturn in the European steel industry last year, the ECSC is still faced with weakness of demand, surplus capacity and heavy expenditure associated with steel restructuring. Indeed, 1980 will be a year of very great difficulty for the European steel industry. A high level of expenditure by the ECSC will continue to be needed in particular to assist redundant steelworkers with resettlement grants and to provide interest-subsidies on loans for projects designed to give alternative employment to redundant steelworkers and coal miners.

In these circumstances, inevitably revenue derived from the ECSC's normal source of income, the levy on production, will again prove inadequate to meet outgoings. The levy on coal and steel production has been raised by the Commission from 0.29 per cent. to 0.31 per cent. in 1980, but it would not be desirable, even if it were possible, to place an additional burden on these hard-pressed industries by raising the rate of the levy further. In the longer term, we want to see the ECSC self-financing once again, but we must recognise that at present that is not a realistic possibility.

Noble Lords will wish to know how this need for extra revenue became translated into the decision we are currently concerned with. By cutting expenditure on some headings and raising the rate of the levy by 0.02 per cent. the Commission reduced the forecast excess of expenditure over income of 70 million European units of account shown in the first draft of the ECSC Budget for 1980 drawn up in October last year to 43 million European units of account. That still proved too much. The Commission proposed that this 43 million European units of account should be filled by extraordinary receipts. In discussing the form such receipts should take it soon became clear that there was a preference among member states for a further round of ad hoc supplementary contributions rather than a transfer from the EEC general budget, the legality of which is uncertain. The idea of transferring the proceeds of customs duties on imports of ECSC products, which has been suggested in the past, remains unacceptable to most member states, including the United Kingdom, as being unrelated either to member states' wealth and ability to pay or to the size of their steel and coal industries and as involving a fundamental change in the ECSC Treaty which, unlike the EEC Treaty, leaves customs receipts in the hands of member states.

The Commission proposed that the 43 million European units of account, should be used to finance interest rebates on loans for reconversion projects that is, on loans for new industrial projects in coal and steel closure areas which would provide new jobs for redundant coal and steelworkers. Although the United Kingdom was prepared to support a supplementary contribution of this size, some member states sought to reduce the amount and the compromise agreed for the March Council, subject to parliamentary procedures, was that the supplementary contribution should total 28 million European units of account—the same figure as in 1978 and 1979. It was also agreed that there should be a review in the autumn of the need for further supplementary revenue for the ECSC for this year and next. Of the 28 million European units of account the share to be paid by each member state will be the same as in 1979 and 1978, the United. Kingdom contribution being 17.42 per cent. or about £3 million.

There is expected to be a clear net benefit to the United Kingdom from this ad hoc contribution; Commission officials have provided figures which show that in 1978 and 1979 the United Kingdom received 40 per cent. of the allocations for interest rebates on reconversion projects. Their preliminary examination of requests already in the pipeline suggests that this figure will almost certainly be maintained in 1980. We should remember that the money under this heading in the budget helps to provide new and permanent employment for former coal and steelworkers. And small businesses as well as major projects can benefit from the scheme; there is a scheme operated by ICFC which specifically enables small businesses to take advantage of these funds.

In fact the United Kingdom is receiving a net benefit from the ECSC Budget overall. In 1979 the United Kingdom paid approximately £15 million through the levy on coal and steel production and £3¼ million through the Government contribution making a total of £18¼ million. Against this the United Kingdom was allocated £14 million for resettlement aid to redundant coal and steel workers, £½ million in interest rebates for coal and steel modernisation loans, £7 million for interest rebates on reconversion loans, and £9¾ million for United Kingdom-based research projects, making £31¼ million in total against an £18¼ million contribution in total. Noble Lords will agree that that is a reasonably satisfactory state of affairs. I am therefore confident that the proposed contribution is fully justified and accordingly I seek approval for the draft order in council. I beg to move.

Moved, That the draft order laid before the House on 23rd June be approved—(Viscount Trenchard.)

Lord BRUCE of DONINGTON

My Lords, the House will be grateful to the noble Viscount, Lord Trenchard, for having introduced this order. I have before me an explanatory memorandum for the Joint Committee on Statutory Instruments which refers to a number of documents which are very necessary indeed for this House to have in its possession before it considers the whole matter within its context. For example, the decision of the representatives of the Governments of the member states of the European Coal and Steel Community (ECSC) meeting within the Council, of 18th March, is not available at present to Members of this House, even though the explanatory memorandum refers to it. Nor is the 1980 budget of the ECSC available to Members of this House to examine the matter within its context and nor—within the facilities at present available to us—can I obtain a copy of what is euphemistically referred to as the Treaty of Paris.

All of those documents are referred to in paragraph 2 of the explanatory memorandum. I do not think that this is particularly satisfactory. After all, EEC matters are of some concern to the nation as a whole because, by virtue of the Act of Accession 1972, various decisions and directives, together with regulations, become automatically incorporated in United Kingdom law. The ancient British maxim is that ignorance of the law is no excuse. Perhaps in some cases it is not, but at least it ought to be possible, within the facilities provided to this House, for any noble Lord to obtain documents to which reference has been made in an explanatory memorandum.

No one can complain about the way in which the noble Viscount has introduced this particular item. His explanations have been very adequate indeed; and I understand from him that the present purpose is to provide for budgetary assistance in connection with interest rebates. I think that this is very reasonable, but, of course, it is only part of the problem and remains to be considered within the context of the European Steel industry as a whole.

Very often in this House we have debated vast sums of money to be paid out of this country's Exchequer, in particular into the Common Agricultural Policy, which I believe is not universally popular on either side of your Lordships' House, certainly not in another place; indeed, dismay with it is already widespread on the continent of Europe, though not particularly among the beneficiary countries of France, Denmark and, of course, Eire.

However, iron and steel are the very sinews of European industry, and one would have thought that on the assumption that we are a European economic community as distinct from an agricultural club, the problems of the European steel industry in all the member states would have received far more consideration than they have so far. It is, indeed, indicative of the present mood of the Nine, who appear to accept all the ridiculous and insane consequences of the Common Agricultural Policy, with all the increases in domestic price levels and the rest, and with all the contributions that are made direct from the budget, and, indeed, from our own Consolidated Fund by our own taxpayers. However, when it comes to the steel industry, that becomes the Cinderella.

Why should that be? I have before me the draft budget for 1980, as approved on first reading. Under Title 5, Chapter 54 it says: Special contribution to the ECSC for temporary social measures in connection with the restructuring of the steel industry". This is quite consistent with the often expressed desires of the Commission—and in particular of Count Davignon, the Commissioner who is in charge of this particular side of Community affairs—to put forward some degree of Community responsibility for all the ailing steel industries of Europe. So it put into its preliminary draft budget 100 million units of account for these particular provisions: Special contribution to the ECSC for temporary social measures in connection with the restructuring of the steel industry ", which is a problem throughout Europe.

The European Parliament approved this sum, but when it went before the Council, the Council reduced it to nil. Indeed, in the Council's revised draft general budget for the financial year 1980, one finds under Chapter 54 "nil". So they decided not to do anything about it. In an explanatory memorandum issued by the Department of Industry on 20th May 1980 it says: Originally the Commission proposed that 100 million European Units of Account "— that is, roughly £66 million— be granted to the European Coal and Steel Community from the General Budget … over a period of 3 years ". then it says: It is intended that these funds will finance the Commission proposals to assist steelworkers adversely affected by the re-structuring of the steel industry ". It then said that out of its own resources in the ECSC, despite the increased levy, there were no resources available for the new social measures proposed. Then at paragraph 7 it says: Funds would be transferred from the General Budget of the European Communities. Member States have not yet accepted the legality of the proposed transfer ". I do not know where this question of legality arises. There are some views as to whether the transfer is permitted under Article 235 of the treaty. Someone must have been reading the fine print because I cannot see—and I agree that I am no European lawyer—any reason why this transfer should not take place under the normal provisions of the financial regulations. Perhaps if the noble Viscount is advised otherwise he can inform the House as to how he considers these would be illegal.

Finally, on the memorandum of 20th May, the Minister of State at the Department of Industry says: No action can be taken on the proposed transfer of funds until the EEC 1980 Budget has been agreed, nor until the Council has reached a decision on the social proposals to assist steelworkers ". We now know that the draft budget for 1980 has at last been approved. All we now await is a decision on the social proposals to assist steelworkers.

I have some questions to ask about this. The plight of the steelworkers of the United Kingdom is well known. The extent to which their troubles will be exacerbated or otherwise by decisions made by the Secretary of State for Industry himself—who has certain very pronounced ideas on this subject—is not, of course, yet known. We do not even know in what the MacGregor proposals, when they are formulated, will result. But one thing is certain. The plight of the steelworkers of this country is one of increasing gravity. Nor, is this confined in any way to the United Kingdom. Other steel industries in Europe—some of them state-supported in precisely the same way as the United Kingdom industry has been supported in the past—are also facing difficulties.

I am given to understand by Her Majesty's Government that they take their membership of the EEC very seriously. In fact, I have asked them many times to state in precise terms what economic, as distinct from political, advantages have accrued to the United Kingdom as a result of membership, and what advantages are apprehended in the future. So far I have received no reply. However, I take the point that come hell and high water Her Majesty's Government are firm members of the EEC and fully espouse its principles. I want to ask them what energy they will put into it to ensure that out of ECSC funds or out of the budget Britain receives a net benefit of a substantial size to deal with the very great problems that the steelworkers in South Wales, Corby, Scunthorpe and elsewhere will experience.

Even on the assumption—which I do not accept—that the funds in the United Kingdom at the moment do not permit of some state-aided expenditure, there is still no excuse, if we cannot do it, for not pressing with the utmost vigour, for the EEC to do something about it. I therefore hope that the noble Viscount will be able to tell us what steps he has in mind for this meeting that is due to take place in the autumn in order that out of the EEC budget there can be, via the ECSC, certain sums made available in order to bear part of the tremendous financial costs in terms of human lives, human incomes, and all the rest of it that will result from the mass closures that are envisaged.

If Her Majesty's Government cannot do it out of Treasury resources—and I do not admit that they cannot at a time when they are willing to spend £5,000 million on Trident—then there is still no excuse for them not using the maximum endeavour within the Council of the EEC, and indeed at all levels in the EEC, to make sure that our needs are made known and are satisfied. If the noble Viscount could give us some idea as to what plans Her Majesty's Government have for this autumn meeting, what demands they propose to put forward, what other alternative proposals they have in mind, I am sure that not only this House but the country at large would be greatly appreciative.

Nothing I have said detracts in any way from our satisfaction with the way in which the noble Viscount has presented this particular proposal. We complain that we have not had all the documents, and this must be a matter of some importance. The noble Viscount said that this country derives a small net benefit from its contributions to the ECSC, and we should of course be grateful for small mercies. We therefore are indebted to the noble Viscount, and we should not wish to resist the passing of the appropriate resolution.

7.23 p.m.

Viscount TRENCHARD

My Lords, I am not going to follow the noble Lord into a debate on the EEC, its agricultural policy, or even a broad-ranging debate on steel itself, on which we have had a number of discussions in the past. On the question of this order, and to deal first with the point that the noble Lord raised on the availability of documents, the Treaty of Paris was signed in 1951, and I believe that copies would be obtainable from the Library if they are still there. But certainly this is not a secret document, it was published ages and ages ago. The decision of the 18th March, which I have before me, is published by Her Majesty's Stationery Office, 50p net, Cmnd. 7936. I cannot offhand give the noble Lord an answer in relation to the 1980 ECSC budget, but I undertake to write to him on that third document.

I do not think it is fair to say that the countries in the Community, either individually or collectively, are paying no attention to the serious conditions in the steel industry which, as the noble Lord observed, is a situation that exists in other countries as well as in this country. One has to look at the remedial measures for the difficult situations in the steel producing areas in the country, and in all countries, in the context of national measures and international measures. The biggest part is the national measures, which we have been over in this House on a good few occasions quite recently. Large sums of money are being spent on remedial measures in relation to the necessary cutback in steel production over the Community as a whole, and in Britain arising from the reasons which we have discussed so often but which lie in the past in relation to the competitive nature of the British steel industry.

In relation to the suggestion that perhaps 100 million European units of account extra should be budgeted and spent, this too has been discussed in this House and in the other place when discussing the steel remedials. I have previously informed the House, as has my right honourable friend the other place, that the support for the measures put forward, mainly under the auspices of Commissioner Vredeling, has not been at all universal. At the first round really only Belgium was in favour of those proposals, and even they had qualifications on how the money should be spent.

Within a community one has to respect the right of one's partners, as well as one's own judgment, and to understand that some things which are best handled nationally and some are best handled on a Community basis. I cannot follow the noble Lord into the legality of transfer from the EEC budget. He said that he was not a Community lawyer, and I am certainly not one. I can assure him that it is the advice of the legal departments of Her Majesty's Government that in all probability such a transfer would not be legal, and that appears to be the opinion of others as well.

If the noble Lord would like me to give him some expert opinions in writing on the main areas on which that view is based, I should be prepared to do so. But I have to accept that my colleagues with the legal qualifications have come to that conclusion, I may say not with any enthusiasm because in this area we have major steel problems and we might well have considered that this was a road that could be followed. It is not only a question of the transfer to the ECSC budget, but it might not have been possible to use the money from the EEC budget for the purposes of ECSC. This does not, however, mean that the EEC industries are badly looked after so far as the EEC budget is available.

The noble Lord asks what is going to take place in the autumn, and asks me to ensure that Her Majesty's Government will press with—I have forgotten all the adjectives he used—great vigour that the contribution from countries to the ECSC budget on the existing basis should be increased in order that we should be in a position to take more benefits. I gave him the overall figures of our net very large benefit; much larger than any other country in the Community. I have on previous occasions told him that we have had something like 40 per cent. of the loans and 30 per cent. of the readaptation monies.

My Lords, I ask the noble Lord just to consider the position of the EEC, in which I believe, and the question whether it would be right for Her Majesty's Government to press with the utmost vigour in the way that he suggested in relation to the system as it works at the moment, on a steel tonnage basis; and I ask him to think about this in view of the various industries' movements, the levy being on the sealed tonnage basis and the split being, as I outlined it, of the special contribution. I ask him to consider, about tactics, what would be the best way of going about it and to take into consideration the fact that we are getting a very considerable and major benefit at the present time. He will perhaps give us the credit of wanting to ensure that we get the maximum possible benefit. I think if he considers the tactics of the situation against the fact that many other countries are putting in large sums of money, have major steel problems of their own and are getting nothing like the percentage out that they are putting in— some others are beneficiaries, but overall that is the truth—he will perhaps give us the credit and leave it to us to negotiate in the autumn as seems most practicable in the circumstances; and perhaps he will welcome the continuation of this benefit to the United Kingdom, which is no more than a contribution to the remedial measures for the major problems which the Government are facing in the steel areas.

Viscount LONG

My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.

[The Sitting was suspended from 7.32 until 8 p.m.]