Lords Sitting of 22 July 1980

Preamble
(Sitting in the Royal Gallery.)
The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Exeter.

SITTINGS IN THE ROYAL GALLERY
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, late yesterday evening, while the House was sitting, a wooden ornamental boss in the ceiling of the Chamber fell to the floor. No one was hurt, but had the boss hit anyone, death or serious injury could have been caused. On investigation, the boss was found to have been held in position by little more than a tight fit reinforced by glue. There are about 40 such bosses in the Chamber ceiling, dating from the mid-nineteenth century, all of which must clearly now be inspected in the interests of your Lordships and made good in the interests of safety. This work could take three or four days.
In the meantime, and with the gracious permission of Her Majesty The Queen, arrangements have been made for the House to sit in the Royal Gallery, where the seating has been laid out to be as close as possible to that of the Parliament Chamber, including seats below Bar for guests, and also some seats for the press and the general public. The Property Service Agency of the Department of the Environment hope to have the Parliament Chamber back in use for next Monday's sitting. Until next Monday, the line of route within the House of Lords is temporarily suspended.
It is proposed that the House should continue to use the Division Lobbies as usual when the House wishes to divide. The only procedural changes are that the Lord on the Woolsack will say, in the case of a Division:
"The Contents will go to the right through the Prince's Chamber, the Not-Contents to the left through the Prince's Chamber".
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It will no longer be possible to lock the doors after six minutes, and Peers who have passed through the Division Lobbies will have to return to the House via either the West Front corridor or the Library corridor.
Since there is no convenient exit from the Throne end of the Royal Gallery, Members of the House who are sitting at that end may make their way to the Prince's Chamber, it is suggested, by the Back Benches on either side of the House where a gap has been specially left for this purpose. Temporary microphones have been installed, and it is hoped that they will prove satisfactory. Peers who are speaking are asked to position themselves immediately by one of the microphones. Accommodation has been provided below Bar for the Press, distinguished Strangers and the public, to the best extent possible. Those who are entitled to sit on the steps of the Throne may stand at the Bar of the House.
I could not conclude this Statement without expressing (and I am sure all your Lordships would like to join with me in so doing) the warm thanks of the House for the work done by Black Rod, the Yeoman Usher, the staff of the House and many members of the Property Service Agency staff of the Department of the Environment in fitting up this temporary Chamber at such short notice. It might interest your Lordships to know that they started work at 6 o'clock this morning and it was completed by lunchtime. I am sure that the whole House would wish to join me in expressing our sincere thanks to them for having done such a remarkable job for the House in so short a time.
Lord PEART: My Lords, may I thank the noble Lord for his Statement, and I am sure the whole House would wish to echo the noble Lord's gratitude for Her Majesty's gracious permission for us to use the Royal Gallery. May I, too, pay tribute to Black Rod and his staff, the servants of the House and the workmen who have made this possible. It could easily have been something much more serious. Fortunately, as the noble Lord said, we are very lucky that nobody was injured. However, there it is. We pay tribute to the staff and the workmen. It is an unusual experience being in another Chamber, and I hope we enjoy it.
Lord BYERS: My Lords, from these Benches I, too, should like to express our very sincere thanks to Black Rod and his staff and the Property Service Agency, and all those who have managed this remarkable transformation in such a short time. We in this House are very well
served by those who look after our comforts, and those who enable us to despatch business as usual in the face of an emergency or even a semi-crisis. I hope there is no connection between the judgment from above which took place last night and the fact that the Government were defeated four times on the Floor of the House yesterday, because I must warn the noble Lord that it is going to happen again, and I hope this Chamber is more secure!
Lord SOAMES: My Lords, I really do not know why the noble Lord should go so far as to say that he does not think there was any connection. I should think there most probably was.

ANGLO-SCOTTISH LEGISLATION: RENTON REPORT
2.43 p.m.
The Earl of SELKIRK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government to what extent recommendations 32 to 38 of the Renton Committee (AngloScottish Legislation) are being implemented.
The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, recommendations 32 to 36 of the Renton Committee's Report are implemented wherever it is appropriate to do so. Recommendation 37 has not been implemented. As regards recommendation 38, the Government see advantage in the re-enactment, in suitable cases, of the Scottish provisions in Anglo-Scottish Bills but, at the present, believe that the best way of going about it is by way of the Joint Committee on Consolidation Bills. We are, however, keeping recommendation 37 and the alternative procedure referred to in recommendation 38 under review.
The Earl of SELKIRK: My Lords, I did not hear the noble and learned Lord very well. May I ask two supplementary questions? Is early consultation already taking place between draftsmen and others on Bills affecting both parts of the United Kingdom? Secondly, can the noble and learned Lord say whether he is obtaining, both in quantity and in quality, the type of men capable of doing the exacting task of draftsmen?
Lord MACKAY of CLASHFERN: My Lords, so far as consultation is concerned, early consultation between Scottish and English draftsmen takes place at the present time. I am satisfied with the arrangements for that. I think that it would be impossible for the Lord Advocate to be satisfied with the number of Scottish draftsmen that are available, but, considering the difficulties the department have had in recent years, particularly with the sudden death of the legal secretary, the department is very well staffed.
Lord RENTON: My Lords, is my noble and learned friend aware that the great advantage of having separate and parallel Bills for Scotland is that, when there are United Kingdom and Great Britain Bills dealing with the law of both countries, the Scottish draftsmen may concentrate their efforts upon basing their Bills on Scottish law? Is he also aware that the demand for this Committee's report throughout the Commonwealth, including Scotland, has been so great that it is now out of print? Can the noble and learned Lord say when printing will be resumed?
Lord MACKAY of CLASHFERN: My Lords, there are advantages in parallel Bills and disadvantages also, particularly in the shape of the requirements made on parliamentary time. We have tried to balance these various considerations in making decisions in particular cases. I am glad to know that the demand for the Renton Committee Report has been so great. Several reprints have been called for since the original publication. I had gathered that the demand had now slightly fallen off and that recently a further reprint was not considered justified. Copies can be obtained by arrangement with Her Majesty's Stationery Office, but the situation is kept under constant review.
Lord GARDINER: My Lords, this is a very important report. Is there really not some responsibility on the Government to make copies available to Members of Parliament?
Lord MACKAY of CLASHFERN: My Lords, as I have said, the Government have had the report reprinted several times. The demand for it appeared to be reasonably satisfied, although it happens to be out of print at the moment. If there should be a resurgence of demand the Government will meet it. Individual copies are available by arrangement with Her Majesty's Stationery Office.
Lord LEATHERLAND: My Lords, as in describing certain things and situations the Scottish use different words from the English—for example, they say "outwith" instead of "outside"—will the noble and learned Lord arrange for this document to be printed in both languages?
Lord MACKAY of CLASHFERN: My Lords, I think it is fair to say that at the moment legislation is printed in the two different languages as far as that may be necessary—as I am sure the noble Lord will know as a result of referring to the Tenants' Rights Etc. (Scotland) Bill, which the House is presently considering.

YOUTH OPPORTUNITIES PROGRAMME: AGRICULTURE
2.47 p.m.
The Earl of SWINTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether in view of the current state of unemployed school-leavers they would consider extending the work experience on employers' premises scheme of the Youth Opportunities Programme from six months to one year in agriculture and other allied industries.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, I am advised by the Manpower Services Commission, which is responsible for operating the Youth
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Opportunities Programme that there are no plans to extend the length of work experience on employers' premises schemes in agriculture and other allied industries from six months to one year.
The Earl of SWINTON: My Lords, I was going to say that I was grateful to my noble friend for that helpful reply, but I do not think that I can. May I ask whether he might not persuade his colleagues at the Manpower Services Commission to look at this point? Does he not think that agriculture is unlike other industries, where one can learn a trade in six months? It takes a year to learn all the variations of seasons and the other work involved. I am not thinking here just of rural children but of children from town areas who perhaps seek some form of new life in the country—and might this not be of benefit in the present conditions?
The Earl of GOWRIE: My Lords, I must say that while I am sorry to have disappointed my noble friend, it is precisely because the Manpower Services Commission have had the interests of agriculture in mind that the provision has been made. We are anxious about any danger of interference with the normal channels of training and recruitment in an industry which has a declining labour force. On the point about whether six months is sufficient for a young person to decide whether or not he wishes to go into agriculture, while I agree with my noble friend that it does not cover all four seasons, I should have thought that two seasons would have been sufficient experience.
Lord ROCHESTER: My Lords, would the noble Earl agree that even more demoralising than to be unemployed immediately after leaving school may be to gain a place on a work experience scheme but be unable thereafter to obtain a permanent job? Does he further accept that in the light of the unemployment figures announced today there is now an even stronger case to make more resources available to the Manpower Services Commission in order to expand various elements comprising the youth opportunities scheme to the benefit of not only agriculture but of industry generally?
The Earl of GOWRIE: My Lords, as I have told the House in other connections, the provision for the Manpower Services Commission's Youth Opportunity Programme has been increased from between 20 per cent. and 25 per cent. I certainly agree with the noble Lord that it is demoralising to be out of work. I am happy to say that the take-up rate into real employment from the Youth Opportunities Programme is between 60 per cent. and 70 per cent. which I hope the noble Lord will agree is a good record. If there is any sign of this record flagging, we will take steps to correct it.
Baroness DAVID: My Lords, may I ask the Minister whether he will be quite sure that the educational and training element will be strong enough in these courses—particularly if they are extended? It may be difficult in things such as agriculture where one or two people may be working on one farm. Could I ask for a reassurance that the educational training element will be strong enough?
The Earl of GOWRIE: We are aware of the need for that, my Lords. The noble Baroness will probably agree with us that one can learn a very great deal by working for six months on a farm, let us say. One should know enough in that way to know whether it would be the right kind of career for the young person involved.
Lord SANDFORD: My Lords, would my noble friend not agree that under the present circumstances, in view of the figures announced today, the point concentrated on in the Youth Opportunities Programme is to improve on the take-up of the places available, and particularly to do so with the school-leavers who have just left school qualified for those places? Could he tell us—or write to me in more detail if he cannot tell us now—what the current take-up of the places on the Youth Opportunities Programme is at the moment?
The Earl of GOWRIE: My Lords, it may not be sufficiently recognised that the Government offer a place on the Youth Opportunities Programme to every young man and woman in this country who may find himself or herself unemployed after six weeks. That is a considerable undertaking on behalf of the Government. I
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agree with my noble friend Lord Sandford that sometimes there are slownesses in take-up provisions. We are constantly looking at any areas where take-up may be slower than we wish. I cannot give him a precise figure but I understand that it is well over 70 per cent.
Lord SANDFORD: My Lords, would the noble Lord not agree that the general figure is far lower than that? Would it not be valuable to have the answer to my question?
The Earl of GOWRIE: My Lords, if my noble friend will ask me that question formally—which is rather different from the Question in the name of my noble friend Lord SN\ inton—I will of course give him the information.
Lord SOAMES: My Lords, I wonder whether I may intervene for a second to suggest that in the interests of the Official Report and those who will be struggling to ensure that we get an accurate Official Report, noble Lords would be tolerant of the fact that we are in a different place and that the acoustics are not what they were in our proper House. Perhaps noble Lords will do two things: first, to try and get as near as possible to the microphones: secondly, to speak somewhat more slowly than perhaps is their custom.
Lord ELWYN-JONES: And louder!
Lord SOAMES: And therefore perhaps shorter as well!

WEST GERMAN/USSR ECONOMIC AGREEMENT
2.55 p.m.
Lord CHELWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the new West German longterm economic agreement with the Soviet Union involving large-scale industrial co-operation in several advanced technological fields signals a Community decision to ignore President Carter's appeal to restrict exports to the Soviet Union beyond

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the presently agreed COCOM lists; and whether it was one of the initiatives "designed to promote a solution to the Afghan crisis" through "the withdrawal of Soviet troops" agreed at the meeting of the Council of Ministers in Venice last month.
Lord TREFGARNE: No, my Lords, on both counts.
Lord CHELWOOD: My Lords, is my noble friend aware that the Foreign Secretary's call yesterday for "increased co-ordination of effort in the West", and for "a better follow-through to consultation that at present takes place in too many forums", is very welcome? While it may be argued that the West is not in disarray, have we not recently given a rather good imitation of it? Does that not mean that many people will now ask: Where do we go from here, and who is going to take the long overdue initiative to improve political co-operation among the democracies?
Lord TREFGARNE: My Lords, my noble friend has raised an important point. I wonder whether I may deal with it rather more carefully than perhaps would normally be the case at Question Time. My noble friend the Foreign Secretary was saying that political co-operation among the Nine has increased in recent months but that we need nevertheless to look very carefully at the co-ordination of the West's efforts in the world, especially in the light of what has happened in Afghanistan, and of how consultations should proceed in the Alliance. These are matters which we shall be pursuing with our friends. Consultation already happens very frequently; the need is to make it more effective. That requires patience and private discussion. Our purpose will be to consider how the resources of the West and its friends and of others who value independence and oppose Soviet imperialism can be mobilised to promote economic development and political stability and thus reduce the likelihood of further crises like the one in Afghanistan.
Lord SHINWELL: My Lords, has the Minister not failed—
Several noble Lords: We cannot hear!
Lord SHINWELL: My Lords, has the Minister not failed to recognise the importance and significance of Lord Chelwood's Question? Does he not appreciate that what has taken place recently is unilateral action on the part of several members of the Nine countries? If this continues, as in the case of France—now in the case of Germany and possibly the case of the United States and in the case of the United Kingdom—is not the term "unity" a travesty of the situation? There is no unity whatever. What has happened in the case of Germany is not only unilateral action in the political sense but a rebuke to the United States of America.
Lord TREFGARNE: My Lords, I do not think that the noble Lord is right in that assertion. The difference of emphasis which some of our colleagues put on these matters is very natural, having regard to the difference in our circumstances; and the correct position is as my noble friend described it yesterday.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that whether or not he thinks the noble Lord, Lord Shinwell, is right, on the evidence of the past few months many people think that the noble Lord, Lord Shinwell, is right? The unilateral action is there for all to see, and the dangers of that are obvious particularly if it leads to a point where, while Europe may be in step with one another, they are out of step with the United States of America.
Lord TREFGARNE: My Lords, if my noble friend is referring to the recent visit by Chancellor Schmidt to Moscow—and he tells me that he is—there is something to be said for keeping open the lines of communication in a crisis, and the Soviet leaders on this occasion were at least confronted with some of the "home truths" about the position in Afghanistan.
Lord BLYTON: My Lords, is the Minister aware that there is a great deal of hypocrisy about this Question? After you have flayed the Olympic players going to Moscow, you are still trading with Russia; you have not withdrawn your ambassador. It seems to everyone that you are playing two games: one against the Olympic players, and another by still

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maintaining trade. You cannot do both. That is why it is hypocrisy.
Lord TREFGARNE: My Lords, I do not think the noble Lord is right in what he says. As I have said earlier, while in this matter there is some difference of emphasis between ourselves and our colleagues in the Nine, we are in general united.
Lord TAYLOR of GRYFE: My Lords, in view of the political initiatives that have been taken by the French and German Governments, would the noble Lord give an assurance to this House and also to British industry, which is engaged in trading with the USSR, that they are in no way disadvantaged in the present circumstances in credit terms or by political constraints following the initiatives of our allies?—whereas we seem to observe all the regulations and agreements which have been reached within the allied group.
Lord TREFGARNE: My Lords, the Government continue to support trade which is of real benefit to us, but there should be no unreciprocated benefits for the Soviet Union and that is why we have not renewed the Anglo-Soviet credit agreement of 1975, which offered exceptionally preferential interest rates to the Soviet Union and why we are participating with our partners in discussions in COCOM, referred to in the Question.
Lord TAYLOR of GRYFE: My Lords, may I ask, since we in fact began negotiations on revised credit terms, whether credit terms that will be agreed by Great Britain will be observed by all others who offer credit terms within the alliance?
Lord TREFGARNE: My Lords, I cannot, of course, speak for other Governments, but we certainly hope there will be a consensus in these matters.

PARLIAMENTARY BOUNDARY COMMISSIONS: REPORTS
3.2 p.m.
Lord ELLENBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are confident that the reports of the Parliamentary Boundary Commission for England, Scotland, Wales and Northern Ireland will have been received by early 1982, and that the implementation of their recommendations will not be delayed if by then the commission has not completed its consideration of the European constituencies.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, I understand that the Parliamentary Boundary Commissions for England, Scotland and Northern Ireland are likely to have completed their tasks of reviewing parliamentary constituencies by early 1982. The commisson for Wales has not yet begun its general review but is expected to do so shortly.
Under the provisions of the European Assembly Elections Act 1978, the commissions for England, Scotland and Wales may not report on their reviews of Westminster constituencies until they have completed their reviews of European Parliament constituencies. The Government are, however, considering the case for amending the Act to permit these commissions to submit their proposals for correcting the present serious disparities between the electorates of 'Westminster constituencies as soon as they have finished preparing them.
Lord ELLENBOROUGH: My Lords, While thanking the noble Lord for that rather satisfactory Answer, may I ask that if consideration of the European boundary constituencies has not been completed simultaneously with the Westminster constituencies, will legislation be introduced so that the commission may submit its recommendations on the Westminster constituencies without delay? Does the noble Lord not agree that there could be disastrous consequences for our electoral system if by the next general election the existing boundaries are not changed, because there are scandalous discrepancies between the size of electorates in different constituencies at present as has been highlighted by the four by-elections which have taken place during this Parliament—one in a constituency of some 30,000 electors and another of

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only 20,000 electors, when there are many other constituencies of electors of more than 100,000?
Lord BELSTEAD: My Lords, if I may answer my noble friend's two supplementaries together, of course the Boundary Commissions must complete their reports by the spring of 1984 at the latest—that is the extreme of the 10 to 15 years since their last general review, although I said in my reply earlier that we hope it will be in 1982. Clearly, after this lapse of time there are serious disparities—I agree with my noble friend on that—between constituencies, and to have to await the reviews of the European constituencies could delay matters by many months more. It is in this context that the Government are considering the matter.
Lord UNDERHILL: My Lords, may I ask whether it is not the case that Parliamentary reviews are based to a great extent on the areas of district authority wards? It is not also the case that the parliamentary reviews will be followed by the local government review, and therefore is there not a case for endeavouring to synchronise both local government and parliamentary reviews? —otherwise we shall find that parliamentary constituencies based on district boards will be soon out of date.
Lord BELSTEAD: My Lords, there is some inter-relation between the work of the local government and the parliamentary Boundary Commissions, but I am not aware of any serious delay on this account in the reviews of parliamentary constituencies now in progress.

DINNER
Lord DENHAM: My Lords, it may be for the convenience of your Lordships if I announce that dinners will be available at the usual time. The Report stage of the Housing Bill will be adjourned at about 7 o'clock for approximately an hour, and two Order Confirmation Bills be taken during this adjournment.

LORDS' EXPENSES
3.8 p.m.
Lord SOAMES: My Lords, there are two Motions standing in my name on
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the Order Paper. The first gives effect to an increase in the Peers' expenses allowance and the allowance for secretarial assistance for office holders in the Lords. The Peers' expenses allowance is divided into three separate elements, each with its own limit. The new limits which have been recommended by the Top Salaries Review Body in its Report No. 15, and which I propose should apply from the beginning of this month, are as follows. For Peers who necessarily have to use overnight accommodation away from their usual residence, a daily—perhaps I should say nightly—limit of £23.00 will apply. For day subsistence—that is, to cover meals and incidental travel—the limit will be £11.00. Secretarial costs, postage, and certain additional expenses as defined in the Review Body's 9th Report, may be met within a limit of £10.00 a day treated cumulatively—in other words, claims may be arranged to recover expenditure over a period.
These daily limits together total £44. However, I must make clear that we are talking about a maximum figure within which Members of this House may reclaim those sums which they have actually spent in attending to their parliamentary duties. I emphasise this point because it is not always clearly understood by people outside this House. Thus, only those Peers who actually have to incur overnight accommodation expenses in London may claim within the £23 limit. Other Peers will be restricted to the £21 total provided under the second two categories.
Office holders in this House can claim up to a limit of £1,000 per annum towards the cost of the secretarial assistance needed to deal with non-departmental correspondence arising by virtue of their position. The Review Body have recommended that this allowance should be increased to £1,175, and the Government propose that this increase be accepted. Again this figure is the maximum against which reimbursement of expenses that have actually been incurred in employing secretarial assistance to deal with non-departmental correspondence can be claimed.
The second Motion gives the approval of this House to the draft of the Ministerial and other Salaries and Pensions Order

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1979. This order is designed to increase the pay of Ministers and office holders this year in line with proposals contained in my Statement to your Lordships on 7th July 1980. The order provides for the payment of the second stage of the increases recommended by the Review Body on Top Salaries last year, increased as for Members of Parliament by 9.6 per cent., save in the case of Cabinet Ministers and the Attorney-General. For them the increase has been reduced to 5 per cent. The order also provides for the same percentage increases to he applied to the third stage payments with effect from 13th June 1981. These latter rates will count for pension purposes from this year. While the pensions of the Prime Minister and Lord Chancellor will be calculated on this full rate, the order reflects their wish that the salaries they actually receive will be no more than other Cabinet Ministers. The order is made under the Ministerial and Other Salaries Act 1975, and the operative date of the increase will be the date on which the order is made, which is expected to be Monday, 28th July.
Your Lordships will be aware that junior Ministers in the House of Lords, unlike their counterparts in another place, do not receive any salary in respect of their parliamentary duties. This is a very real problem, as I said in my Statement on 7th July, and as, I believe, is generally recognised. The Government are considering how the arrangements for their remuneration should be revised, to take account of the considerable amount of work that they do in this House. We will bring forward proposals as quickly as possible.
As I see my noble friend Lord Boyle in his place today, I would not wish to end this Statement without paying our sincere tribute and expressing our thanks to Lord Boyle for all the work that he has put in, not only for this report, but also for other reports in the past. We are deeply grateful to him for all his assiduity in the work that he has done. My Lords, I beg to move the first order.
Moved, That this House approves the following proposals with respect to expenses incurred by Lords after 30th June 1980—
(1) members of this House, except any Lord who receives a salary under
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the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees, shall be enabled to recover, in addition to the costs of travel for which other provision is made, but within the limits specified in (2) below, expenses certified by them as—

(a) expenses incurred (otherwise than as mentioned in (c) below) for the purpose of attendance at sittings of this House or of Committees of this House other than judicial sittings; or

(b) expenses incurred (otherwise than as mentioned in (c) below) for the purpose of attendance at judicial sittings of this House or Committees of this House or under section 9 of the Appellate Jurisdiction Act 1876 if incurred by Lords of Appeal who are neither Lords of Appeal in Ordinary nor holders of high judicial office within the meaning of that Act; or

(c) expenses incurred in staying overnight away from their main or only residence, where this is necessary for the purpose stated in (a) above and also, if incurred by such Lords of Appeal as are mentioned in (b) above, where this is necessary for the purpose stated in (b) above; or

(d) expenses incurred for the performance of their Parliamentary duties as general office expenses or on secretarial or research assistance.

(2) The limits are—

(a) for (1)(a) and (1)(b) above, £11 for each day of attendance;

(b) for (1)(c) above, £23 for each day of attendance;

(c) for (1)(d) above, £10 multiplied by the number of days of attendance falling within paragraph (1)(a) or (1)(b) above.

(3) A Lord who receives a salary under the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees shall be enabled to recover expenses certified by him as incurred on secretarial assistance for the purpose of his Parliamentary duties, but not exceeding £1,100 in any year.—(Lord Soames.)
3.12 p.m.
Lord PEART: My Lords, I warmly support what the noble Lord has said. I am glad that he has made clear the real amounts that Peers may claim, and I hope that they will be understood; at least by the general public. On Ministerial salaries, I know from personal experience how hard Ministers in the Lords work. I believe that their work has not been really appreciated, and they get insufficient remuneration. So I hope that the efforts of the Lord President will be successful. I know that he is looking at this matter again and will have discussions. May I also pay tribute to the noble Lord, Lord Boyle, who has always been courteous when I have often appeared before his committee. He and his colleagues have worked very hard and I wish to join in the tribute that the noble Lord, Lord Soames, has paid to him.
Lord BYERS: My Lords, I should also like to support what the noble Lord, Lord Soames, and the noble Lord, Lord Peart, have said about the great work that the noble Lord, Lord Boyle, has done for so many people in public life. I should like to thank not only him, but all who work with him on the Top Salaries Review Body. On the question of junior Ministers in the House of Lords, this nettle must be grasped. They have not really been treated properly for a considerable number of years. I hope that this problem will now be taken on board, and that proper arrangements will be made for them.
Lord BOYD-CARPENTER: My Lords, may I say a word or two in support of what the noble Lord, Lord Byers, said about the treatment of junior Ministers in this House. As he said, they have been very badly treated indeed for some years and their position is really quite urgent. All of us, whatever our political views and wherever in the House we sit, acknowledge that the junior Ministers, and particularly the Lords-in-Waiting, do a remarkable and strenuous job. When my noble friend replies, I hope that he will give some indication that the Government really do attach some urgency to dealing with this matter quickly, and will give some indication as to when the proposals are likely to be brought forward.
Lord TAYLOR of BLACKBURN: My Lords, may I ask the Lord President
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whether, at the same time as he is considering the junior Ministers, he will also consider—perhaps this is a different matter and I may be ruled out of order—Members on the Opposition Front bench who are putting in a terrific amount of time.
Lord SOAMES: My Lords, I am grateful for all that various noble Lords have said on this matter. It is quite obvious that it is widely accepted in the House that junior Ministers need some improvement in their remuneration. In reply to my noble friend Lord Boyd-Carpenter, who asked me specific questions, the fact that I said in my Statement that the Government are looking at this matter shows that we, too, are treating it seriously. We are looking at it with a view to doing something. The question is: what is best to be done? There are difficulties about every course. If I may, I will leave it at that for the time being. We have looked at a number of courses and we are trying to discover which is the best, the easiest and the most satisfactory to pursue, and I hope it will not be very long before a decision is reached.
On the question of other office holders—because I think that is all that was ever at issue—I am happy to say that the position of other office holders has been considerably improved during the course of this Parliament, compared with the last. This is not to say that they, too, do not have an important role to play and have very demanding jobs, and it is being considered whether or not the same reasons apply to other office holders as to Ministers, in the thought that is being given to this problem at the present time.
On Question, Motion agreed to.

MINISTERIAL AND OTHER SALARIES AND PENSIONS ORDER 1980
Lord SOAMES: My Lords, I beg to move the Second Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 14th July be approved.—(Lord Soames.)
On Question, Motion agreed to.

HOUSING BILL
3.18 p.m.
Further considered on Report.
Clause 64 [Conversion of controlled tenancies into regulated tenancies]:
Baroness BIRK Baroness BIRK moved Amendment No. 68:
Page 46, line 34, after ("tenancy") insert ("subject to the property being certified as fit for human habitation (within the definition of section 4 of the Housing Act 1957) by the local authority.").
The noble Baroness said: My Lords, I rise with some trepidation, as the ceiling will fall down. This amendment was tabled by the noble Baroness, Lady Vickers, and the noble Lord, Lord Evans, in Committee, but was not moved then. Here we are talking about the residue of controlled tenancies, which are estimated at around 200,000. These tenants live in some of the worst conditions in the private rented sector. They are among the poorest tenants and include elderly people who have lived in their homes for several decades; indeed, 85 per cent. of them are over pensionable age. The purpose of the amendment is to give protection to those living in these wretched properties. In fact, Mr. John Stanley said in the Commons Committee, that it was conceivable that 150,000 of the 200,000 remaining controlled tenancies were quite unfit for human habitation.
If a property is defined as unfit, it is surely unreasonable for the tenant to have to pay the considerably increased rent which will result from decontrol. Although I suspect that the Minister will say that if the properties are unfit the rents will not go up to any great degree, we have to accept that average rents are now very much higher and these rents have lagged behind over the years. Therefore, they will increase irrespective of their condition, because of this enormous gap. The fact that the rents have not increased over the years is a quite different matter. Today we are dealing with the facts as they are. At the same time, by making decontrol conditional on the property being certified as fit for human habitation, we are providing an incentive to the landlord to bring the property up to a reasonable standard. I do not believe that it is justifiable to expect tenants to pay an increase in advance of the work
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needed to make the property fit. In no other field would it be reasonable to expect people to pay for a service before it is provided.
Secondly, the landlord stands to gain from the enhanced capital value of the property if it is improved. Therefore, it is unreasonable to expect the tenant to pay towards the cost of the work which will bring about this result. The landlord will also be able to claim an improvement grant. For these reasons, I believe that this is an amendment which
should receive general support and I hope that the Government will find that it is possible to accept it. I beg to move.
Lord EVANS of CLAUGHTON: My Lords, as the noble Baroness, Lady Birk, has said, at the Committee stage an amendment was put down in the names of the noble Baroness, Lady Faithfull, and myself. We did not move it on that occasion, because of the amendment standing in the name of the noble Lord, Lord Goodman, who wanted to exclude altogether the proposals for converting these tenancies into regulated tenancies, which we had hoped might meet with the approbation of your Lordships. Unfortunately, that was not the case. As the noble Baroness said, in all justice an assurance should be given that the tenants—who are now, generally speaking, elderly—will not have to suffer extremely bad household conditions. These were understandable when the landlord was receiving only a very small rent. It is right that an assurance should be given that now that these tenants will have to expect a fairly extensive boost in their rent, they will not have to suffer considerably inadequate conditions.
Noble Lords in all parts of the country, and particularly in inner urban areas, will have seen houses of this nature in which tenants have lived for very many years, admittedly at a low rent, with no commercial advantage to the landlord. I am not making a general attack on landlords because their position in this type of statutory tenancy has been very difficult. Neverthless, I am sure that noble Lords will agree from their own experience that if rents are to be increased and if tenancies are to become regulated tenancies, these are the least of the reforms which your Lordships should agree to for what amounts to a substantial change

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in the status of these kinds of tenants. I have very much pleasure in supporting the amendment moved by the noble Baroness.
Lord SANDFORD: My Lords, in this amendment we are invited to deal with two distinct but interrelated issues. The first is the Government's intention to bring to an end controlled tenancies and to make them all into regulated tenancies. I should like to put it to the House that it is high time that this should be done. It is overdue. The position of the landlords—we had a profile of the landlords who are concerned presented to us in Committee—in the case of controlled tenancies has been grossly unfair and unjust for many years, and since the rate of inflation went into two figures the position has become quite intolerable. If the properties in question are not so good as they should be and suffer from serious shortcomings, the main blame lies in the perpetuation of the controlled tenancy system. So the first thing to do is to bring that to an end. The proposal that it should be made subject to certificates of fitness which would have to be provided by housing authorities in respect of some
200,000 properties is to involve them in an appalling waste of their time and resources. They have many other better things to do.
The second issue to face up to is the position of the tenants. That is safeguarded by two factors. First, the regulated rent is going to be assessed by a rent officer and related to the fair rent. Secondly, tenants who are not in a position to pay the full fair rent are fully protected by the provision of rent allowances in the private sector. There is no equivalent provision for the protection of the landlord, and there has not been for many years.
The third fact that we have to take into account is how to deal with those properties which are found to be unfit and unsuitable for human habitation in the process of assessing the fair rent for the regulated tenancies. This can be done in a number of ways. It can be done by the application of Section 4 of the 1957 Act. We had a debate in Committee on Amendment No. 271 which was moved by the noble Lord, Lord Evans of Claughton, who invited the Government to consider a few additional
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criteria for unfitness. There is the process under Section 8 of the 1957 Act under which the measures for compulsory improvement can be set in motion in general improvement and housing action areas. It is to be hoped that that provision, which is suitable in many cases, could be invoked. But there is in every case the provision under Section 9 of the 1957 Act for the closing and demolition of properties which are unfit and beyond reclaim.
My question to my noble friend is this. Which of these processes for dealing with unfitness does he and his noble friend intend to invoke? In answer to the noble Lord, Lord Evans of Claughton, he indicated during the Committee stage that his right honourable friend was not prepared to make any special provision in this Bill, and we can all understand that it is now too late for that. But it would be useful to know by what manner the Government propose to deal with this —whether they will use unfitness under Section 9, compulsory improvement under Section 8, or changes in criteria under Section 4, or a combination of the lot. None of that, in my view, alters the fact that we ought no longer to delay in moving from controlled to regulated tenancies, and I believe that we can do so with equanimity if we bear in mind the two forms of protection which are available to tenants.
3.30 p.m.
The PARLIAMANTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, before I start what doubtless will be several hours of discussion, may I say that I hope the bloody scenes portrayed on both sides of the House will in no way be symbolic as to the discussions we will be having later on? After yesterday, I felt that such an observation might not be too far removed from reality.
This amendment would prevent any of the remaining 200,000 controlled tenancies from passing into the fair rent system unless and until—those are the operative words—the local authority has certified that the dwelling is fit according to the definition of the 1957 Housing Act. It is quite true that in our decontrol provisions in the 1972 Housing Finance

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Act we excluded from decontrol any dwelling which had already been certified as unfit. In framing our present proposals for decontrol under this Bill we caretully considered whether we should do the same. We concluded we should not. The reason is simple. The damage and unfairness caused by the retention of the controlled system has been so great that very powerful considerations would be needed to retain any part of it. The unfairness of control, with rents pegged at 1956 levels, is even greater now than it was in 1972.
Furthermore, I should stress that even the 1972 Act prevented the decontrol only of tenancies already declared as unfit. The noble Baroness's amendment would go much further by requiring the local authority to visit and inspect each of the remaining controlled 200,000 tenancies and positively certify that they are fit. Unless and until that happened, the tenancies would remain controlled and a fair rent could not be registered. In my opinion, this is quite misconceived. No other category of tenancy entering the fair rent system must pass this test of fitness. Why single out the long-suffering controlled landlord? It was estimated in 1976 that a third of a million privately rented dwellings are unfit, and a great many of these will be regulated tenancies. Where a fair rent is fixed, the rent officer will of course take account of the state of repair of the dwelling. Section 70 of the Rent Act, of which the noble Lord, Lord Goodman, was a principal author, specifically requires that he must do so.
Prolonging decontrol as proposed by the amendment will do nothing to improve the fitness of the dwellings concerned. Nor do I believe that in equity it would be right to require possibly quite expensive works to properties that are unfit before a fair rent can be charged. I described in Committee how controlled rents have remained pegged at 1956 levels and how controlled landlords will often be worse off than their tenants. Concerned as I am with brevity, I think f owe it to the House to give at least one or two examples from the vast number of letters we get from landlords. On their behalf, I think I should give one or two examples. A lady who owns a house in Cromer writes to say she receives an annual rent of £120, from which she has to pay £87.95 rates and £10 insurance; that is a net rent of
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less than £23 a year, or less than 50p per week.
Another lady, in Enfield, is faced with a repair bill of £300 which she just cannot afford. The rent she receives is only £1.08p after rates have been paid, so she would need six years rental income just to meet this one bill. And another letter tells of an old age pensioner in Stoke who lets a house to a family which includes three wage-earners. The rent she receives is £3 a week, from which she must pay rates and water rates. She also is faced with a repair bill of £300 and she does not know what to do. This is hardly the traditional image of the landlord with a Rolls and a pin-stripe suit. Many of these landlords clearly want to carry out the necessary repairs, but the rental income they receive just does not allow it. I know of no way of explaining to such people how it can possibly be fair to keep the rent fixed at 1956 levels while all other charges and costs keep increasing.
The Government can at least offer these people the chance of applying to the rent officer for a fair rent. The noble Baroness's amendment offers only a continuation of the wretched position of which they truly despair. I have stressed the landlord's side of the story because it is not often put, but the Government of course equally recognise that controlled tenants are generally on low incomes. Most are old age pensioners. But, as my noble friend Lord Sandford said, there are at least the supplementary benefit and rent allowance schemes to meet most or all of their rent. And as under our proposals their rent can be increased only by application to the rent officer, this will provide a valuable opportunity to ensure that tenants are aware of their eligibility under these schemes. Additionally, the Government will be providing leaflets free of charge explaining to landlords and tenants what is involved on decontrol.
I will not go into much of the rest of that which I have before me, which refers to what Richard Crossman said—not the quotations I gave in Committee but more quotations. He said in 1965 that something had to be done, that these houses had to be brought out of control. That was in 1965. Here we are in 1980 and we are still talking of the same thing, and yet noble Lords opposite have reservations.

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We can hardly be said to be rushing into anything. At this stage I will not go further other than to say that quite clearly if the noble Baroness presses her amendment there would also be a major workload for local authorities, who would have to inspect each one of the 200,000 dwellings to see whether they were fit: and that would be additional to, and not instead of, inspection by the rent officer. I do urge the noble Baroness to withdraw this amendment because it would so greatly increase the administrative requirements of decontrol, and for those dwellings not passed as fit it would prolong indefinitely what is manifestly an unjust relationship between landlord and tenant.
Lord LEATHERLAND: My Lords, the noble Lord has given us some dramatic examples of the heavy burden which the local rates impose upon both landlords and tenants. I should like to ask him, therefore, whether Her Majesty's Government intend to take any action to fulfil the promise which they made at the last general election; namely, that local rates should be abolished.
Lord BELLWIN: My Lords, I do not really think that is apposite to the point we are discussing. I would think that the complaint we are getting in this House from noble Lords opposite is that we are in fact carrying out that which we said in our manifesto we would do. I would only say to the noble Lord on that particular point that he need have no cause to doubt that we are looking into that matter, as we are doing with everything else that we said in our manifesto. I trust he is one of those who will not criticise us at any time when we point out that what we are doing is what we said in the manifesto that we would do.
Baroness BIRK: My Lords, it seems to me that on the whole the Minister was talking about not decontrolling but leaving the whole control system as it is, which was in fact the amendment we debated in Committee. This really is quite different. On this amendment I am not arguing that there should not be decontrol. What I am saying is that where properties do not come up to what is really a very low standard of fitness for human habitation they should not at that point be decontrolled. This does not mean those properties which fit the criteria; they can be
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decontrolled immediately. So it is not an argument against decontrol. It is an argument in favour of making sure that those properties which are decontrolled come up to a minimum standard.
I really cannot agree with the noble Lord, Lord Sandford, that issuing certificates of fitness would involve local authorities in an appalling waste of time and resources. This is something absolutely basic. We are discussing properties in which human beings are living—human beings who have been paying a rent, admittedly a very low rent, for a long period of time. Suddenly they are faced with an increase in rent, but without any improvement or difference to the property in which they live. I just do not think it is either fair, human or even healthy to do it in this particular way. The noble Lord, Lord Sandford, referred to rent allowances.
I think we are all aware that the take-up of eligible unfurnished tenants is only 50 per cent. I know the Minister has said before that a big publicity campaign will try to increase this, but I must tell him that we have all tried these publicity campaigns and they have very little effect because it is still a complicated procedure. There is still, particularly among older people, very great prejudice against it. They feel there is something shameful about it. This is wrong, but it is the way they feel. I do not think this will make any difference. The fact that that was said by Richard Crossman in 1965 is I think, with great respect, totally irrelevant because this is 1980 and we are dealing with the situation as it is now. I feel that in this amendment we are asking for such a minimal change and it would be quite wrong, anti-social and irresponsible to allow people to have their rents increased. This is not at all an anti-landlord amendment. I stress again that the landlord would be entitled to improvement grants; he only has to do a minimum and then of course he will get an increase in rent. It is for these reasons that I intend to press the amendment. In my view this safeguard is essential.
Lord BELLWIN: My Lords, by leave of the House perhaps I may say just this. I do not know whether the noble Baroness appreciates that the effect of her amendment is that it will not allow any immediate decontrol. There are so many

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matters in this Bill and we have had so many amendments—and no doubt we shall have more—and I feel very passionately about some aspects of it. The noble Lord, Lord Evans, said "in all justice": how can it be in all justice that we come here and even contemplate a measure—and your Lordships can take it from me that I know what I am talking about—the effect of which will be to put back again for years and years any hope of overcoming this iniquity which exists at the present time? With every ounce of feeling that I can muster for those who are concerned I urge your Lordships to throw out this amendment because it is misconceived and will do great and continuing injustice, which has gone on for too long now. It is time this injustice was finished.
Baroness BIRK: My Lords, with the leave of the House, I would point out that it is still subject to the property being
certified as fit for human habitation. It has to have a certificate and I accept the result—which incidentally was a very close one—in Committee. If the Government insist upon decontrolling these tenancies instead of taking the advice which was offered to them from many parts of the Committee, this is the least they can do. I submit that they have put themselves into this position by not allowing the controlled tenancies to become decontrolled by natural wastage and so disappear. So what the noble Lord has said does not make any difference to the substance of this amendment, and therefore I intend to press it.
3.44 p.m.
On Question, Whether the said amendment (No. 68) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 132.

CONTENTS

Airedale, L.

Foot, L.

Ponsonby of Shulbrede, L. [Teller.]

Amherst, E.

Gaitskell, B.

Amulree, L.

Gardiner, L.

Rathcreedan, L.

Annan, L.

Gifford, L.

Rochester, L.

Ardwick, L.

Gladwyn, L.

Ross of Marnock, L.

Aylestone, L.

Gordon-Walker, L.

Sainsbury, L.

Bacon, B.

Goronwy-Roberts, L.

Segal, L.

Banks, L.

Grey, E.

Shinwell, L.

Beaumont of Whitley, L.

Hale, L.

Soper, L.

Beswick, L.

Hampton, L.

Stedman, B.

Birk, B.

Hatch of Lusby, L.

Stewart of Alvechurch, B.

Blease, L.

Henderson, L.

Stewart of Fulham, L.

Blyton, L.

Hooson, L.

Stone, L.

Boston of Faversham, L.

Hughes, L.

Strabolgi, L.

Brimelow, L.

Irving of Dartford, L.

Strauss, L.

Brockway, L.

Jacques, L.

Tanlaw, L.

Brooks of Tremorfa, L.

Janner, L.

Taylor of Blackburn, L.

Bruce of Donington, L.

Jeger, B.

Taylor of Gryfe, L.

Buckinghamshire, E.

Kilmarnock, L.

Taylor of Mansfield, L.

Byers, L.

Leatherland, L.

Underhill, L.

Caradon, L.

Lee of Newton, L.

Wade, L.

Chitnis, L.

Llewelyn-Davies of Hastoe, B.

Wallace of Coslany, L. [Teller.]

Clancarty, E.

Lloyd of Kilgerran, L.

Walston, L.

Cledwyn of Penrhos, L.

Lovell-Davis, L.

Wedderburn of Charlton, L.

Collison, L.

McCluskey, L.

Wells-Pestell, L.

Cooper of Stockton Heath, L.

Maelor, L.

Whaddon, L.

Cudlipp, L.

Milford, L.

White, B.

David, B.

Northfield, L.

Wigoder, L.

Davies of Leek, L.

Ogmore, L.

Winterbottom, L.

Denington, B.

Oram, L.

Wootton of Abinger, B.

Diamond, L.

Pargiter, L.

Wynne-Jones, L.

Elwyn-Jones, L.

Peart, L.

Evans of Claughton, L.

Phillips, B.

NOT-CONTENTS

Ailesbury, M.

Avon, E.

Berkeley, B.

Allerton, L.

Balerno, L.

Bessborough, E.

Amory, V.

Barnby, L.

Birdwood, L.

Ampthill, L.

Bellwin, L.

Boyd of Merton, V.

Atholl, D.

Belstead, L.

Boyd-Carpenter, L.

Boyle of Handsworth, L.

Gowrie, E.

Morris, L.

Bradford, E.

Gridley, L.

Mowbray and Stourton, L.

Campbell of Croy, L.

Grimston of Westbury, L.

Moyne, L.

Carver, L.

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

Netherthorpe, L.

Cawley, L.

Northchurch, B.

Chelwood, L.

Halsbury, E.

Onslow, E.

Clifford of Chudleigh, L.

Harmar-Nicholls, L.

Perth, E.

Clitheroe, L.

Hatherton, L.

Porrit, L.

Clwyd, L.

Hawke, L.

Rawlinson of Ewell, L.

Cockfield, L.

Henley, L.

Redcliffe-Maud, L.

Cork and Orrery, E.

Hill of Luton, L.

Renton, L.

Cottesloe, L.

Hillingdon, L.

Robbins, L.

Craigavon, V.

Hornsby-Smith, B.

Roberthall, L.

Craigmyle, L.

Hylton, L.

Rochdale, V.

Cranbrook, E.

Hylton-Foster, B.

Romney, E.

Cullen of Ashbourne, L.

Ilchester, E.

St. Aldwyn, E.

Daventry, V.

Inchyra, L.

Sandford, L.

De Freyne, L.

Kilmany, L.

Sandys, L.[Teller.]

Denham, L [Teller.]

Kimberley, E.

Savile, L.

Derwent, L.

Kinloss, Ly.

Selkirk, E.

Digby, L.

Kinnaird, L.

Skelmersdale, L.

Dundee, E.

Lauderdale, E.

Soames, L. (L. President.)

Eccles, V.

London, Bp.

Spens, L.

Effingham, E.

Long, V.

Strathclyde, L.

Ellenborough, L.

Lovat, L.

Strathcona and Mount Royal, L

Elles, B.

Lucas of Chilworth, L.

Swinfen, L.

Elliot of Harwood, B.

Luke, L.

Swinton, E.

Elton, L.

Lyell, L.

Thorneycroft, L.

Energlyn, L.

McAlpine of Moffat, L.

Trefgarne, L.

Faithfull, B.

McFadzean, L.

Trenchard, V.

Ferrers, E.

Mackay of Clashfern, L.

Vaizey, L.

Ferrier, L.

Macleod of Borve, B.

Vaux of Harrowden, L.

Fortescue, E.

Mansfield, E.

Vickers, B.

Fraser of Kilmorack, L.

Marley, L.

Vivian, L.

Gage, V.

Merrivale, L.

Ward of Witley, V.

Garner, L.

Milne, L.

Westbury, L.

Geoffrey-Lloyd, L.

Milverton, L.

Widgery, L.

Gisborough, L.

Monckton of Brenchley, V.

Worcester, Bp.

Glendevon, L.

Monk Bretton, L.

Young, B.

Godber of Wellington, L.

On Question, amendment agreed to.

[Amendment No. 69 not moved.]
3.52 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 70:
After Clause 66, insert the following new clause:
("Lettings by servicemen
The following Case shall be added to the Cases in Part II of Schedule 15 to the 1977 Act (mandatory orders for possession) after the Case inserted in Part II by section 55 of this Act—
"Case 20
Where the dwelling-house was let by a person (in this Case referred to as "the owner") at any time after the commencement of section (Lettings by servicemen) of the Housing Act 1980 and—

(a) at the time when the owner acquired the dwelling-house he was a member of the regular armed forces of the Crown serving outside the United Kingdom;

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(b) at the relevant date the owner was a member of the regular armed forces of the Crown;

(c) not later than the relevant date the owner gave notice in writing to the tenant that possession might be recovered under this Case;

(d) the dwelling-house has not, since the commencement of section (Lettings by servicemen) of the Act of 1980 been let by the owner on a protected tenancy with respect to which the condition mentioned in paragraph (c) above was not satisfied; and

(e) the court is of the opinion that—

(i) the dwelling-house is required as a residence for the owner; or

(ii) of the conditions set out in Pz£art V of this Schedule one of those in paragraphs (c) to (f) is satisfied.

If the court is of the opinion that, notwithstanding that the condition in paragraph (c) or (d) above is not complied with, it is just and equitable to make an order for possession of the dwelling-house, the court may dispense with the requirements of either or both of these paragraphs, as the case may require.
For the purposes of this Case "regular armed forces of the Crown" has the same

219
meaning as in section 1 of the House of Commons Disqualification Act 1975."")
The noble Lord said: My Lords, in speaking to Amendment No. 70, I wonder whether, for the convenience of the House, I can also speak to Amendment No. 70A. During the discussion of the amendment moved in Committee by the noble Earl, Lord Selkirk, and the noble Lord, Lord Greenwood, I promised to give careful considerstion to the idea of a special Rent Act repossession case which would enable serving servicemen to buy a house and let it with a mandatory right to repossession. As I said during the discussion of that amendment, the Government fully accept that service in the armed forces of the Crown imposes very special obligations on people. That is why we have come forward with this new clause, Amendment No. 70.
Our new clause is restricted in scope to those servicemen who are serving overseas. It would enable them to acquire a house while serving abroad and to let it with a mandatory right to repossession. Amendment No. 70A to our new clause, tabled by the noble Earl and the noble Lord, goes further and would extend this provision so that it would be available to any serving serviceman and not just to those posted abroad.
I am pleased to be able to tell your Lordships' House that on further consideration the Government accept that this provision should be available to all serving servicemen. While the primary need for this new provision arises from circumstances of servicemen posted overseas, we accept that it is not only while serving abroad that a serviceman may be unable to live in a house of his own before he lets it. There are also postings in this country where servicemen are encouraged to live in quarters provided by the forces. There are also postings remote from where most servicemen are likely to wish to buy their own homes. We accept that having accepted the case for those overseas it would be wrong for these people to be denied the possibility of acquiring their own homes with a view to living there when they leave the forces or are posted to where the house is situated.
I am therefore happy to recommend noble Lords to accept the amendments to the Government's new clause tabled by
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the noble Earl, Lord Selkirk, and the noble Lord, Lord Greenwood. Might I say how grateful I am to them not only for raising this matter, but for the way in which they have done it, and for the strength of the arguments they have made. I feel that this is an amendment which will be welcome on all sides of your Lordships' House, and I ask noble Lords to accept.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 70A:
In paragraph (a) of "Case 20", line 3, leave out ("serving outside the United Kingdom")
The noble Earl said: My Lords, I thank the noble Lord, Lord Bellwin, very much for finally getting the door wide open. I know it has taken him about a fortnight of hard work to do it, and I am very grateful indeed to him for doing so.
I understand that I am now speaking to Amendment No. 70A, which I beg to move. May I ask one question which has been asked of me: "I take it that this will cover furnished lettings?"? I said that I was quite sure it would, but I would be grateful to have Lord Bellwin's confirmation that it would, in fact, cover furnished lettings. I beg to move.
Lord BELLWIN: My Lords, I am able, and gladly do so, to confirm that position to the noble Earl.
[Amendment No. 71 not moved.]
3.59 p.m.
Lord GIFFORD Lord GIFFORD moved Amendment No. 72:
After Clause 66, insert the following new clause:
("Further amendment of 1977 Act
After section 22 of the 1977 Act there is inserted the following section—
Licences to occupy a dwelling-house.
22A. —(1) Where a person occupies a dwelling-house under a contract which reserves to the landlord the right to nominate another person to share the dwelling-house or any part of it with him, or himself to enter into occupation of the dwelling-house or any part of it, and by reason only of such reservations

221
that person is a licensee and not a tenant of the dwelling-house, he shall be deemed to be a tenant of the dwelling-house.
(2) Where two or more persons occupy a dwelling-house under a contract, or under more than one contract, by which there is reserved to the landlord the right to replace any one or more of such persons, or to nominate other persons to share the dwelling-house or any part of it with them, or himself to enter into occupation of the dwelling-house or any part of it, and by reason only of such reservations those persons are licensees and not tenants of the dwelling-house, they shall together be deemed to be the joint tenants of the dwelling-house.
(3) In this section, "landlord", in relation to any dwelling-house occupied under a right granted by a contract, means the person who granted that right, or any successor in title of his, as the case may require.").
The noble Lord said: My Lords, I beg leave to move Amendment No. 72 which stands in the name of my noble friend Lady Birk. This looked to be a very complicated amendment on paper, but in fact it covers a very important subject. The Rent Act, even as amended by this Bill, provides for a system of fair rents in the private rented market, but there are those who want to evade that system of fair rents by charging a black market rent, and this amendment is designed to cure one of the worst of those evasions. I think we would all wish to condemn blatant Rent Act evasions. The noble Lord, Lord Bellwin, himself criticised such evasions in the debate in Committee.
My Lords, so far as this amendment is concerned, this is how the evasion works. Ingenious lawyers have found a way of drafting an agreement whereby two or more people can take what, to all intents and purposes, is the letting of a dwelling house, but it is called a licence and it falls outside the Rent Act; the rent control system does not apply to it, nor does the system of security of tenure. Instead of having one agreement, you have two agreements. Instead of being called a tenancy, it is called a licence. Instead of each party being responsible for the whole rent, each party is responsible for half the rent, and if one goes the landlord says: "I can nominate a successor. You neither of you have an exclusive right to occupy the premises."
That, speaking very simply, is how it works. The result is that against all kinds of logic and fairness people are signing agreements for the occupation of flats and houses at exorbitant rents with no kind of protection. The agreement is called a licence. In reality they are licences for profiteering.
The system is spreading around the country. In a recent survey undertaken by the National Association of Citizens' Advice Bureaux it was found that in the six months covered by the survey, 155 of these agreements had been brought to the attention of the Citizens' Advice Bureaux, and one can imagine, therefore, that that is only the tip of a very large iceberg.
The Government's new system of short-holds will not do anything to stop this because of what is now a very tight system of fair rent control imposed upon the shorthold procedures. Therefore, those who wish to exploit their property to the limit will still be able quite lawfully to have their tenants or their licensees sign these agreements. The rent officers refuse to register rents for such tenancies because they say they do not have jurisdiction. It is true that they can be challenged in the courts, in which case you then have a battle between ingenious lawyers for the tenants and ingenious lawers for the landlords which can drag on for months to nobody's profit. Sometimes the courts will declare these agreements to be bogus and sometimes not; it is something of a lottery.
This matter was raised in Committee, along with holiday lets and other kinds of Rent Act evasions. There was a kind of global discussion, and I fear that this particular amendment did not get the attenton it deserves. It certainly had very little separate consideration. In the course of the discussion, I offered to sit down with the Minister and those who advise him to try constructively to find a way round this form of Rent Act evasion. That oar has not been been taken up. I have not been told that there is anything technically wrong with this amendment. I appeal to the House that we should resolve—whether through this form of words or some other—this abuse of the Rent Act procedure, so that it is stopped by this House before the Bill passes from us. I beg to move.
Lord BELLWEN: My Lords, this new clause seeks to close what is perhaps the best known of the so-called Rent Act loopholes—the non-exclusive sharing agreement. During the discussions in Committee, I undertook to speak to the experts in this matter to consider whether there was a possibility of closing these Rent Act loopholes. This I have done, but I regret to have to inform your Lordships' House that we do not see any way of closing these loopholes in this Bill. The noble Lord, Lord Gifford, has written to me on this matter, and others have also done likewise.
I hope noble Lords will find it helpful if I explain why we do not feel this new clause could be accepted. The non-exclusive sharing loophole depends on the fact that one of the conditions for full Rent Act protection is that there must be a tenancy. The distinction between a licence and a tenancy derives from common law, and is a fundamental feature of the law of landlord and tenant. I do not think it is necessry to go into this complex area in detail: the important point is that for there to be a tenancy, the tenant must have what is called "exclusive possession". That means the right to occupy on his own and to exclude anyone he does not want. If the agreement allows the landlord himself to share with the tenant, or to nominate that someone else can share with the tenant, this is prima facie evidence that the agreement is a licence rather than a tenancy because there is no exclusive possession.
However, I must stress that it does not follow that someone does not have Rent Act protection because the landlord makes him sign a purported licence agreement. This is something that can only be settled definitively in the courts and the courts will consider the intention of the parties at the time the agreement was made. There have been four cases in the Court of Appeal on the question of whether a licence agreement was genuine or sham. Two were decided in favour of the landlord, and two in favour of the tenants. It is, therefore, always open to someone to go to court if he does not accept his landlord's claim that he is a licensee rather than a tenant.
This new clause seeks to close the nonexclusive occupation loophole by deeming that there will be a tenancy rather than a
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licence where the agreement would be a tenancy but for a provision about sharing. The first subsection of the new clause is concerned with the situation where the landlord reserves the right to nominate another person to share the dwelling-house or part of it. This subsection would have the effect that someone who was a licensee rather than a tenant only by virtue of this part of the agreement would be deemed to be a tenant. The second subsection is concerned with the situation where two or more people share the dwelling. If the only reason that they are licensees and not tenants is that the landlord reserves the right to replace one or more of them by other people, this subsection would deem them to be joint tenants.
I certainly understand and sympathise with the intention behind this clause, as I have already made quite clear. It was just because of conditions about sharing of this kind in the agreements that the occupier in the Somma v. Hazellutrst and Aldrington Garages v. Fielder cases were found to be licensees rather than tenants. However, I do not think it would be possible—as this clause would require—for the courts to consider a part of the agreement in isolation. As I have said, when considering cases of this kind, the courts will look not only at the written contract to see whether it represents the true agreement between the parties, but also at any evidence which may show that this was a sham. Study of the decisions I have mentioned, as well as earlier cases, does not suggest that the courts are likely to isolate one particular aspect of an agreement in order to determine whether there is a tenancy or a licence. It is the whole agreement that matters. This is demonstrated by the two Court of Appeal cases, Demuren v. Seal Estates and O'Malley v. Seymour, where it was found that there was a tenancy. As the noble and learned Lord the Master of the Rolls said in the case of Marchant v. Charters:
"All the circumstances have to be worked out. Eventually the answer depends on the nature and quality of the occupancy".
A further consideration is that it might not always be in someone's interest to be deemed to be a tenant rather than a licensee. There are obligations as well as rights that attach to having a tenancy. For
example, the rent. If two people are sharing with a non-exclusive licence agreement and one moves out, the

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one who remains will not be liable for the rent of the person who has gone. But this would not normally be the case if they were deemed to be joint tenants. The one of two joint tenants who remained behind would be liable for the rent for the whole dwelling. This, I think, illustrates the kind of difficulty that can arise when agreements are deemed to be of a different nature from what the people entering into them thought they were.
For these reasons, I am not convinced that this clause would work in practice; nor do the Government see any easy way of closing this loophole. However, in my view, there are two ways of tackling the use of licences to evade the Rent Acts. First, it is important to remember that because an agreement says it is a licence, and so outside the Rent Acts, it does not follow that the courts will accept this. The two most recent cases in the Court of Appeal on this question have found that there was a tenancy. Secondly, it seems to me that the initiatives we are taking in this Bill to encourage landlords to go on letting and to make more accommodation available should mean that landlords will be encouraged to let within the Rent Acts rather than trying to resort to uncertain devices of this kind.
My Lords, I have gone to quite some trouble to be specific and to give detailed reasons why we feel the clause proposed by the noble Lord would not get us to where both he and we want to be. I certainly am happy to ensure that we do sit down and talk not only to him but to anyone who feels they have a solution to this problem, not necessarily within this Bill. We are always being told we have too much in the Bill, and there will be many other things coming later on. In saying that, I do not for one moment seek to prevaricate or attempt in any way to belittle the importance of trying to put right any loopholes of this kind in the Rent Acts. So, my Lords, I ask you not to accept the amendment, if the noble Lord feels he has to press it. I hope he may feel it is not necessary to do so because he certainly knows there is no difference between us in wanting to get there. The debate is about whether this is the right way I submit, with respect, this present way unhappily is not the effective way and that is why we are not
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accepting the amendment to the clause.
Lord GIFFORD: My Lords, with the leave of the House, we are of course on fairly technical legal ground here and what the noble Lord says clearly has to be studied to be fully appreciated. One of the areas where we differ is in thinking that short-holds will do very much to cure this type of abuse. Time alone can tell which of us is right.
What I want to ask, and hear from the noble Lord, is this. If it is found that this type of abuse is continuing, despite the shortholds and despite the court rulings, that people who should be protected tenants or shorthold tenants are in fact licensees paying well over the odds, then will it be the Government's intention to put their minds, and their expert's minds to seeing that this abuse is closed.
Lord BELLWIN: My Lords, by leave of the House, I have no hesitation in saying, Yes, of course, we shall certainly try to do that, no hesitation at all.
Lord GIFFORD: My Lords, in those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 73:
After Clause 66, insert the following new clause:
(" Amendment of 1977 Act
. For section 9 of the 1977 Act (Holiday lettings) there is substituted the following section:
"9. A tenancy is not a protected tenancy if the purpose of the tenancy is to confer on the tenant the right to occupy the dwelling-house for a holiday and—

(a) the dwelling-house is approved by and registered with the local authority for use as holiday accommodation, such approval and registration to be renewed annually;

(b) that the rent charged is equal to or less than a rent approved by the local authority as reasonable (following guidelines to be set by the Secretary of State) for letting the dwelling-house for holiday occupancy; and

(c) that the approved rent is posted in the dwelling-house, together with a certificate of current registration and a notice stating the provisions of the Rent Act applying to lettings for holiday occupancy.').

The noble Baroness said: My Lords, this is really another sprig off the same tree or bush which my noble friend Lord Gifford moved. It is really concerned with another aspect of loopholes. He dealt with licences, this deals with holiday lets, and we did have quite a long discussion on it in Committee. The point, briefly, is that Section 9 of the Rent Act 1977 puts a tenancy outside protection if the purpose of the tenancy is to confer on the tenant the right to occupy the dwelling-house for a holiday. This has had the effect of driving a coach and horses through the intentions of the Act, because the use of so-called holiday lets is widespread, particularly in London, and many people are forced, for lack of any alternative, to take tenancies where they have no Rent Act protection and are open to gross exploitation. There is clearly a need to protect the position of owners of genuine short-stay accommodation. But anything worded in the general terms in which it was worded in the Act—I hasten to say, in parenthesis, which has been for so long under review, otherwise the noble Lord the Minister will remind me of that—is bound to be exploited by unscrupulous landlords with the connivance of tenants who really have no alternative because they are homeless.
I gave a number of examples in Committee with which I will not weary the House again, but the point is that—I wonder if I might have the Ministers' attention—the difference between the last amendment and this one is that on the last amendment the Minister raised the question, quite rightly, about a bona fide holiday which was in the amendment there. Points were raised as to how the landlord would be able, if the onus was put on the landlord, in fact to discharge this. The amendment is an attempt to deal with these problems and make it more specific, tightening up the opportunities for stopping up this loophole. We believe that the answer to this problem lies in giving the local authority the power to control such lettings through a system of registration. The cost could be met by charging a registration fee and the advantage of this would be, first, an end to uncertainties and the complex and expensive court cases for tenants and landlords. The legal position of such lettings would become clear and unambiguous. Secondly,
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local authorities could plan for the number of short-term and holiday lettings appropriate to housing needs in their own areas.
I believe there are authorities—I think I am right in saying that Westminster is one—who already operate a register and do so quite satisfactorily. This would seem to me to be the answer. It would not prevent the genuine holiday letting; it would be a means of stopping the evasion of the new shorthold procedures because, whereas shorthold involves, of course, a registered rent, a holiday letting does not. So what have been used as a number of rather bogus holiday lettings under the new Act should fall into the shorthold category. I would have thought that a precaution of this kind, stopping the loophole by this new amendment which is really in working terms quite different from the old amendment moved in Committee, might meet with the Government's approval. I beg to move.
Lord BELLWIN: My Lords, as I said in discussing the last amendment, I have considered the whole question of Rent Act loopholes very carefully since our discussions in Committee. However, I am afraid that again I am not convinced that this new clause would deal satisfactorily with the so called "bogus holiday let" loophole. What this clause would require is, as the noble Baroness, Lady Birk, said, a special register of holiday accommodation to be maintained by local authorities. It would also require local authorities to approve the rent that it would be appropriate for landlords of holiday accommodation to charge. I would be extremely reluctant to see an additional burden of this kind imposed on local authorities merely as a way of enforcing the Rent Acts. Nor do I think local authorities, quite frankly, are in any position to determine what would be an appropriate rent for holiday accommodation in their areas. The noble Baroness said that some already operate such a register. They may indeed do so, and it is certainly up to them, but I would be very interested for myself to know how they decide what is an appropriate arrangement. Allowing, if you like, authorities to do this, is vastly different from imposing upon them a duty so to do. I think that there is a whole world of difference in that.

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If someone who is evidently not on holiday is obliged to sign an agreement saying that they are, it must be for them to challenge this in the courts. I do not think the expense and complexity of maintaining a register of holiday accommodation, frankly, could be justified on the basis of preventing the use of this Rent Act loophole.
As I have already made clear, it seems to me that the attempt to use loopholes of this kind has arisen because landlords are deterred from letting within the Rent Acts by the legislation of those Acts, not least the one in 1974. Indeed it may well be as the noble Lord, Lord Gifford, intimated, a hope; it certainly is that. A guarantee it certainly is not. But I hope very much—and I am confident myself about this—that the shorthold will encourage more landlords to let within the Rent Acts. That has to be a better way of solving the problem than going into the very difficult problems, and I suggest to the noble Baroness, Lady Birk, that it would lead to many more difficult problems than she appreciates.
Lord EVANS of CLAUGHTON: My Lords, I concede what the noble Minister said, that it may be a clumsy way of dealing with the matter, but I think the noble Lord ought to concede from experience and his own evidence in his department—certainly this is so from my own personal experience as a lawyer—that this is a device which is used from time to time by people who want to avoid the Rent Acts. I suspect it will go on being used in spite of the proposals for shorthold, perhaps because many people may not think the shorthold will last very long in view of what has been said in another place.
In my submission, the Government should be looking for means of stopping up this loophole. I agree that it is a matter about which people can go to court and say that the thing was signed under a misapprehension and so on. But that involves lengthy and expensive legal proceedings for the tenants, who are at a disadvantage as compared to the position of the landlord. That is what happens so often in these type of cases.
It seems to me that it would have been helpful had the Government been able to say that they would look for means,
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perhaps by requiring anyone who lets property as a holiday letting to apply for a change of use under the planning Acts, to perhaps have the property rated as business premises. That might have been a way, but there are many ways of doing it.
The amendment is an honest and genuine attempt to see a way out of the situation, and I should have thought that, if the way that is being sought here is beaurocratic, clumsy and difficult, the Government should recognise that there is a genuine case here of hardship and of advantage taken of people who are perhaps not able to defend themselves and they might have looked for one of the other means—one of the means that I have suggested, or other means that have been canvassed as no doubt the Minister knows—of dealing with what is a matter of some concern in certain areas of the country at certain times.
4.22 p.m.
Lord GIFFORD: My Lords, before the noble Lord replies, I should like to put to him one other point which arises out of what he said. As regards the question of holiday lets and indeed as regards the last amendment, the noble Lord, Lord Bellwin, said, quite rightly, that these matters can be tested in the courts. He has greater confidence than I have in the capacity of the courts always to do what is just in those circumstances. The difficulty is that courts tend to hold the parties to the very letter of the agreement which they have signed. That is one of the principles of the law. Be that as it may, it is true that it frequently happens that one can show that the agreement is, in fact, a sham.
The difficulty is that the process of taking these cases to court can take months. We are dealing, by definition, with landlords who are overcharging, sometimes grossly overcharging. What is the person who is the victim of this to do? He goes to the rent officer and asks for the registration of a rent. The rent officer says that is a holiday let, or it is a licence, and that he cannot register the rent. The other party goes to the court and nine months elapse before there is a court decision in his favour. Because of the other provisions of the Bill, whereby the registration of the rent is the operative day for the coming into operation of the

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reduced rent, a year will possibly have passed before the tenant, as he is now shown to be, will have any benefit. That cannot be right. Even allowing for the other understanding that we have to wait to see how these new provisions operate, will the Minister consider very seriously before Third Reading what to do about that situation?
Lord HYLTON: My Lords, I should like to suggest to the noble Baroness, Lady Birk, that her amendment is cumbersome and would be very costly to put into practice. If there is a large-scale abuse of holiday letting—and I have yet to be convinced of that, although there are perhaps some signs of it in London—I should have thought that a much better method of tackling the situation would be to bring in an amendment saying that a holiday letting can only go on for perhaps six months, and if the same person remains in those premises for longer than six months, then it shall be taken to be a shorthold letting.
Lord BELLWIN: My Lords, with the leave of the House I should like to make a few comments. I would only add to what I said previously that, as regards the loopholes in the Rent Acts—and noble Lords opposite know more about them than I do—we accept that there are, of course, problems. What I have said in answer to the amendment is that I just do not believe that this is the way to deal with the problems, for the reasons that I have given. That does not mean to say that I do not think that there should be attempts to find solutions to them. However, I certainly do not think that this is practical for a whole host of reasons.
A number of points were raised by the noble Lord,
Lord Evans of Claughton. He suggested the use of the planning Acts to control holiday lets. I am advised that that would not solve the problem of bogus holiday lets, because a building with planning approval for holiday lets could be the subject of a proper Rent Act tenancy. That, and indeed the point made by my noble friend Lord Hylton, only illustrates that there are so many attempts to get this right that within the remaining time before the Bill is enacted there will not be the opportunity to find solutions which surely others ought to have been
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looking at, and indeed for that matter probably have been looking at, for many years now. I would only say—and I am not sure what other amendments there may be as regards filling the loopholes in the Rent Acts—that this is an area on which at present, within the Bill, we cannot go any further. Time does not allow it. But no one is turning away from the problems. It will be for another time—not necessarily a long time in the future—when we have got through what we are doing at present when we shall probably want to sit down and talk about the matter.
Baroness BIRK: My Lords, I do not intend to take noble Lords on that long, long walk as regards this amendment. However, I should like to feel—and I am sure that with the leave of the House the Minister could nod to me—that the Minister will take this matter away and look at it in the same way as he promised as regards the previous amendment moved by my noble friend Lord Gifford. I think that he recognises that there is a problem.
I agree with the noble Lord, Lord Hylton, that this is a cumbersome amendment. The last one that we moved in Committee was not right and so it is a question of getting the right amendment. I think that if this continues it will probably involve some sort of register and that in fact is what the noble Lord, Lord Hylton, mentioned. If the Minister would undertake to find out—and I am sure that he would not find it very difficult to do so through the department—which authorities are using a register and how they are using it in an efficient and economic way, then I shall be quite satisfied. I should not like the matter to be completely forgotten and dropped and for this situation to continue.
The Bill was obviously prepared in a rushed way and I know that the Government are anxious to get it on to the statute book. However, although these different points will unfortunately not be ready in time for the legislation to go on the statute book, I still think that it is important that they should not be forgotten or overlooked; that action should be taken on them and that it should be as effective as possible. All that I want from the noble Lord, Lord Bellwin, is an undertaking that he will do that. Moreover, my noble friend Lord Gifford raised a

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question that the noble Lord has not answered and perhaps he would, by leave, do that at the same time.
Lord BELLWIN: My Lords, with the leave of the House, I should like to say that, to the best of my knowledge, Westminster is not operating a register. It has expressed some interest in so doing and would like to know the implications. Certainly I see no reason why we should not approach the local authority associations and ask them to advise us, if they will, which of their members are so doing, and that I gladly undertake to do and to pass the information on to the noble Baroness. We shall check them all out and pass the information on.
Baroness BIRK: My Lords, I think that it is Kensington and Chelsea.
Lord BELLWIN: My Lords, I do not know the point raised by the noble Lord, Lord Gifford, which I have not answered, but I hope that what I have said in general terms covers the fact that we are interested in the whole subject in any case, and therefore if there is a particular point presumably we shall pick it up. Once we have all this material away and have time to do it in a proper and hopefully, dare I say, more leisurely way, then I would expect that we can cover everything.
The DEPUTY CHAIRMAN (Lord Derwent): My Lords, does the noble Baroness wish to withdraw the amendment?
Baroness BIRK: My Lords, yes.
Amendment, by leave, withdrawn.
Schedule 7 [Amendment of Schedule 15 to 1977 Act]:
4.30 p.m.
The DEPUTY SPEAKER: My Lords, two manuscript amendments have been tabled to Schedule 7, Amendments Nos. 73A and 73B.
Lord BELLWIN Lord BELLWIN moved manuscript Amendment No. 73A:
Page 119, line 39, leave out ("and 12") and insert (", 12 and 20").
The noble Lord said: My Lords, I have only a very brief comment to make
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on this. These are two minor, consequential amendments to Amendment No. 7D, which provides a new Rent Act possession case for servicemen, Case 20. All they do is to make reference to Case 20 in Schedule 7 of the Bill. I ask noble Lords to accept this amendment. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendment No. 73B:
Page 120, line 5, after ("12") insert ("and in paragraph (e)(ii) of Case 20").
The noble Lord said: My Lords, this is also a technical amendment. I beg to move.
Clause 67 [Rent agreements with tenants having security of tenure]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 74:
Page 49, line 46, after ("III") insert ("or IV").
The noble Lord said: My Lords, the Bill provides a special safeguard for tenancies being decontrolled by Clause 64. This is that the landlord cannot raise the rent by agreement with the tenant; only by applying to the rent officer for the registration of a rent. This ensures that the tenant pays no more than a fair rent, and that his rights—including his eligibility for rent allowances—are explained to him. The Bill also provides this safeguard in respect of decontrol under Part III of the Housing Finance Act 1972—for example, decontrol by qualification certificate.
This amendment additionally provides the safeguard in respect of Part IV of the Housing Finance Act 1972, which provided for the general programme of decontrol by rateable value. Special rules were applied to these tenancies in the 1972 Act, but for reasons which are not clear they seem to have been removed in 1975 when general decontrol was ended. As a result of the amendment, the same clear rules and safeguards will apply to all formerly controlled tenancies where the old controlled rent has not yet been increased. There will be later related amendments to Schedules 24 and 25; that is, Nos. 148, 151, 154 and 163.

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I hope that your Lordships will agree that they are a useful modification. I beg to move.
[Amendment No. 75 not moved.]
Clause 72 [Dwellings forming part of Crown Estate or belonging to Duchies]:
4.35 p.m.
Lord NORTHFIELD Lord NORTHFIELD moved Amendment No. 75A:
Page 54, line 41, at end insert—
("( ) In the Duchy of Cornwall Management Act 1863 the words in section 21 "not exceeding Thirty-one Years in possession, but not in reversion, so that upon every such Demise, where the Subject matter thereof shall consist of Land or Property other than Mines or Minerals, there shall he reserved the full and fair annual Rent of the Property to be comprised therein, to be incident to the immediate Reversion of or in the Premises to be thereby demised without taking any Fine or Consideration in the Nature of a Fine for the granting thereof;" are omitted.").
The noble Lord said: My Lords, I beg to move Amendment No. 75A. When the House was in Committee dealing with this Bill on 3rd July, the noble Lord, Lord Bellwin, dealt with Clause 72, which covers tenants of the Crown and the Duchies. He was, of course, referring to the 1,000 or so Crown tenants, but also to the, I think he said, 200 tenants of the Duchy of Cornwall. I declare an interest immediately; I am one of those 200 tenants of the Duchy, although I am not here to complain about my landlord!
Secondly, I am sorry that notice of this amendment had to be given so late. As I shall explain in expounding the detail of the amendment, it was not possible until yesterday to track down the information which could result in this amendment. Clause 72 deals with the issue of applying the provisions of the Bill to some of the Crown and Duchy tenancies. As drafted, the clause deals successfully with applying the purposes of the Bill in so far as the properties shall be governed by the Rent Acts.
However, one other issue was raised in the other place which concerns these tenants; it is the right-to-buy provisions of the Bill. This afternoon I shall not enter
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into the arguments about the extent to which the right-to-buy provisions should apply either to the Crown or to the Duchies. All I want to examine is what exactly the noble Lord, Lord Bellwin, said on 3rd July and why my amendment is appropriate to add to what he said on that date. On 3rd July, at column 571, he said that there had been:
"…representations to the effect that the Crown Estates Commissioners should be regarded as a public body, and therefore brought within the scope of the tenants' charter provisions…including the right to buy at a discount".
et cetera. He then went on to say:
"I see little merit in entering into"
the argument. But he did offer a compromise in column 572 where he said:
"The Government have also been discussing with the Commissioners their policy on the sale of long leases once the Rent Acts have formally been applied. The Commissioners have said that they will be prepared in principle to sell assignable but non-enfranchisable long leases to sitting tenants".
In other words, he is saying that they cannot agree or move that the Crown Estates should begin to sell, but that there is this compromise that they will now begin to sell assignable but non-enfranchiseable long leases.
As a tenant of the Duchy, I then wrote to the Duchy and said that that was very interesting, and asked how far the Duchy was prepared to apply these principles that are mentioned in column 572; because at that time we had mainly been discussing the Crown and the Duchies together, and I had hoped that they would be lumped together in this question of selling long leases as a compromise. The answer I obtained—and I obtained it only yesterday, because the chief officer of the Duchy is, I think, on holiday and I finally ended up with their solicitor, who was very helpful—was that whatever the Duchy may wish to do in this respect is limited by the fact that the 1863 Act of Management of the Duchy prevents them issuing leases longer than 31 years. So they could not fall into line even if they wished, and at this stage I do not know whether the Duchy so wishes—that is a matter of policy on which the solicitor could not, of course, advise me. He said that even if they wished to do so—and, who knows, they may so wish—they are bound by this very old Act not to issue leases of longer than 31 years.
Therefore, I speedily turned to the 1863 Act and found in Section 21 that that limitation is indeed the case. The section reads:
"It shall be lawful for the Duke of Cornwall, by Deed under the Seal of the Duchy of Cornwall, to demise or grant any Manors, Messuages, Parks, Lands, Tenements, or Hereditaments for the Time being, Parcel of the Possessions of the Duchy of Cornwall…"
et cetera—
"…for any Term or Number of Years not exceeding Thirty-one Years in possession,…"
So the simple amendment which I thought it was expedient to move was to delete the words, as I have done in the amendments on the Marshalled List, which would leave the Duchy with a right to offer leases of any term. If they then wished to follow on the lead given by the Crown Estate Commissioners under the undertaking given by the noble Lord, Lord Bellwin, on 3rd July, nothing further will bind their hands in the act of management. I hope that explains the rather complicated situation, and I beg to move.
4.40 p.m.
Lord BELLWIN: My Lords, I must confess that I find myself in some difficulty in responding to an amendment tabled at such a late stage and dealing with such an arcane statute as the Duchy of Cornwall Management Act 1863. I believe however that the matter is of some importance to the noble Lord. As he fairly said himself, he lives in a property owned by the Duchy of Cornwall.
As I understand it, and the noble Lord will appreciate that there has been very little time, to say the least, for consultation in that the amendment was only tabled yesterday afternoon, the Duchy, like the Crown Estate Commissoners, are prepared in principle to grant long assignable but non-enfranchisable leases to their tenants. However, the 1863 Act prevents such long leases lasting for more than 31 years, and the noble Lord wishes to remove that barrier. I fear that the Government cannot contemplate amending the 1863 Act in this Housing Bill, not least at a few hours' notice. The Act is a general one governing the manner in which the Duchy operates and is not specifically concerned with housing. I cannot say what wider issues would be involved if the noble Lord's amendment was accepted.
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May I say, in an attempt to be helpful to the noble Lord, that his remarks are noted and will certainly be passed on to the appropriate authorities. I would certainly be exceeding my authority if I advised the House to accept the amendment. Therefore, I think I cannot usefully make any further comment, though I entirely take the points made, which will be considered later. For the moment, I wonder whether, in view of my perhaps not too helpful but I hope understandable remarks, the noble Lord would feel able to withdraw his amendment.
Lord NORTHFIELD: My Lords, the noble Lord has not been very helpful. I rather gathered from what he said that the aim of the amendment was agreeable to him; namely, that the Duchy should have the power to grant long leases. If I heard him aright, he also said that they would like to be able to grant long leases.
Lord BELLWIN: My Lords, I do not think I said quite that. It is perhaps important that I should carefully repeat what I said on that point. I said that the noble Lord will appreciate that the Crown Estate Commissioners are prepared in principle to grant long assignable but non-enfranchisable leases to their tenants. However, the 1863 Act prevents such leases lasting for more than 31 years, and it was the noble Lord who wished to remove this barrier. Then I went on to say that I cannot contemplate our amending that Act in this Housing Bill. I said, in an attempt to be helpful, that we would take careful note of what has been said, and that we would pass it on to the Duchy of Cornwall management, the people concerned, and that we would have a look later on to see whether there was anything that could be done to help. That is all I was able to say.
Lord NORTHFIELD: My Lords, looking at Clause 72 I can hardly accept what the noble Lord said in one part of his remarks. He said that a general Bill on housing is not the place to amend the 1863 Act. With respect to him, the whole of Clause 72 is designed to, and indeed does in a page and a half of amendments, amend various Acts as they apply to the Crown Estates and to Duchy properties. It is a further step, but I would say only a slight further step, to single out the 1863 Act, which is particular to the Duchy,

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in order to amend it in the way I am suggesting. It is only a slight step further that I am suggesting.
To go one step further, he is going to leave the situation in a very anomalous position. We shall have the problem that the whole of the remainder of the Bill in broad terms will be applied to parts of the Crown Estates but not now, because of this loophole, to the few tenants—I readily confess a minority of 200 people—of the Crown properties. I really do not think that I can leave the matter entirely as it is. If the noble Lord would be agreeable to meet and discuss this matter and to see how we can proceed, I would be prepared to withdraw the amendment at this stage and then to look at the possibility of returning to the matter on Third Reading when he has had a chance to study it a little further, and perhaps to take further advice from the Duchy about their wishes and intentions. If he would give me that sort of undertaking I would be very ready to withdraw the amendment at this stage. Perhaps, with the leave of the House, he would respond to my suggestion.
Lord BELLWIN: My Lords, by the leave of the House, I am afraid that I cannot take up the noble Lord's proposal. The amendments which the Government have themselves made in your Lordships' House to extend the Rent Acts to the Duchy of Cornwall do not in any way amend the 1863 Act or the other legislation governing the Duchy. They stay within the four walls of the existing Duchy legislation. Certainly our Crown Estates amendments do not concern long leases at all. I cannot be any more helpful on this and I cannot take the point any further. This came up as an amendment yesterday afternoon referring to the 1863 Act. My goodness me! I do not think I am being at all unreasonable in saying that I cannot go any further with it now.
Lord NORTHFIELD: My Lords, with the leave of the House, I am not asking the noble Lord to go any further now. I am asking whether he would be prepared to look at it before Third Reading. I would then withdraw it today with the possibility, after consultation with him, of not coming back to it at Third Reading.
Lord MOWBRAY and STOURTON: My Lords, with respect, we are getting very
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out of order in not asking for the leave of the House. This is Report stage.
Lord NORTHFIELD: My Lords, very reluctantly—
Lord MOWBRAY and STOURTON: My Lords, I really must protest. It is Report stage.
Lord NORTHFIELD: My Lords, I am not sure what the noble Lord is protesting about. I am rising to withdraw the amendment. Very reluctantly, I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
Schedule 8 [Crown Estate and Duchies—Consequential Provisions]:
4.46 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 76:
Page 121, line 10, after ("to") insert ("the assignment, before the end of the year 1990, of").
The noble Lord said: My Lords, for the convenience of the House I should like to speak to Amendments Nos. 76 and 77 together. Section 72 and Schedule 8 to the Bill, which were introduced in Committee of your Lordships' House, extend Rent Act protection to short lease tenants of the Crown Estate Commissioners, the Duchy of Cornwall and the Duchy of Lancaster. As at present drafted, paragraph 4 of Schedule 8 would allow existing Crown Estate and Duchy tenants to charge full market premiums on the assignment of the remaining terms of fixed term leases existing at the time of commencement. They are specifically excluded from the ban on premiums in Part IX of the Rent Act. This met the request made by representatives of the Crown Estate tenants at a meeting with the Secretary of State on 11th June. The commissioners were also content.
Since the Committee proceedings it has been brought to our attention that there are some Crown Estate tenancies which will not be fully covered by the new premium provisions. Although the leases of these tenancies will not be extended until after the Bill has become law the tenants were, as I am advised, given an

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undertaking in 1976 that they would be assignable up to 1990. Once these leases have been renewed they will find themselves alone among Crown Estate tenants in not being able to assign at a market premium because the Government's provision on premiums applies only up to the end of existing leases.
To deal with this problem the amendments extend the provisions of paragraph 4 of Schedule 8 so as to enable market premiums to be charged not only in respect of existing leases, but also in respect of renewals or extensions of leases granted to sitting tenants provided that the original lease was in existence at the time of commencement. The charging of premiums would be allowed on assignments only until the end of 1990. This means that the Crown Estate Commissioners' undertakings on premiums can be fully honoured and that no Crown Estate tenants are worse off following the application of the Rent Acts. I beg to move.
Lord BELLWIN Lord BELLWIN moved Amendment No. 77:
Page 121, line 11. leave out from ("tenancy") to end of line 18 and insert ("falls within this sub-paragraph if it was granted for a term certain and its terms do not inhibit both the assignment and the underletting of the whole of the premises comprised in the tenancy, and either—

(a) it was granted before the commencement of section 72 of this Act and became a regulated tenancy by virtue of that section; or

(b) it is a regulated tenancy by virtue of that section and was granted to a person who, at the time of the grant, was the tenant of the premises comprised in it under a regulated tenancy which also fell within this sub-paragraph").

The noble Lord said: My Lords, I spoke to this amendment with the previous amendment. I beg to move.
Schedule 10 [Amendment of Part VI of Rent Act 1977]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 78:
Page 123, line 39, leave out paragraph 2.
The noble Lord said: My Lords, this is a minor and consequential amendment
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to the Government amendments to Clause 61 and Schedule 25 dealing with the effective date of rent registrations, Nos. 57, 59 and 160. I beg to move.
Clause 77 [Allowable premiums in relation to certain long tenancies]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 79:
Page 58, line 5, leave out ("subsection (2)(c)") and insert ("subsections (2)(c) and (3B)(d)").
The noble Lord said: My Lords, I think it would be for the convenience of the House if I spoke at the same time to Amendment No. 80. In Committee I explained why the Government could not accept the amendment moved by the noble Lord, Lord Evans of Claughton, to try to deal with the problems that can arise when people who paid a full market price for a lease find that they risk being unable to sell it at a full market price because increases in the ground rent mean that the lease is likely to be affected by the premium provisions in Part IX of the Rent Act 1977. I said in Committee, in replying to the noble Lord, Lord Evans, that I hoped to come forward with a solution to this difficult and technical problem on Report. I am happy to say that we have been able to table these amendments, and I hope noble Lords will agree that they should provide a workable solution to this difficult problem, both for existing and future leases. I should also like to acknowledge again the helpful discussions that my officials have had about this with the Law Society and I wish to thank the noble Lord, Lord Evans, for having so ably raised the matter in Committee.
The circumstances in which a full premium can already be charged for leases are set out in Section 127 of the Rent Act 1977. The conditions that have to be met are that the lease is a long one—that is, it is not terminable within 20 years—and that the rent cannot be reviewed within the first 20 years or more than once every 21 years and that assignment or subletting of the whole is allowed. I will not explain the other criteria which are set out in the amendment, but the Government aim is to ensure that the Rent Act restrictions on the charging of premiums for leases

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should not affect bona fide sales to home owners. I am confident that the amendments will achieve this objective.
Lord EVANS of CLAUGHTON: My Lords, I am grateful to the Minister for the trouble he and those advising him have taken to deal with what is a very complex matter indeed. The Law Society say that although he has approached it in a different way from them, he has come to the same answer, possibly a better answer, in the end, and I know that the Law Society is very pleased. I believe this will be helpful in a broad sense, and I am delighted the Government have taken this step.
Lord BELLWIN Lord BELLWIN moved Amendment No. 80:
Page 58, line 14, at end insert—
("(4) After subsection (3) of section 127 there are inserted the following subsections—
"(3A) If the conditions in subsection (3B) below are satisfied in respect of a tenancy, this Part of this Act shall not apply to that tenancy and, together with Part VII of the Rent Act 1968 and the enactments replaced by Part VII, shall be deemed never to have applied to it.
(3B) The conditions are that—

(a) the tenancy was granted before 16th July 1980;

(b) a premium was lawfully required and paid on the grant of the tenancy;

(c) the tenancy was, at the time when it was granted, a tenancy at a low rent; and

(d) the terms of the tenancy do not inhibit both the assignment and the under-letting of the whole of the premises comprised in the tenancy.

(3C) If the conditions in subsection (3D) below are satisfied in respect of a tenancy, this section shall have effect, in relation to that tenancy, as if for the words "20 years" and "21years", in subsections (2)(b) and (3) above there were substituted, respectively, the words "6 years" and "7 years".
(3D) The conditions are that—

(a) the tenancy is granted after 15th July 1980;

(b) at the time when it is granted it is a tenancy at a low rent; and

(c) the terms of the tenancy ensure that any variation of the sums payable by the tenant otherwise than in respect of rates, services, repairs or maintenance, cannot lead to those sums exceeding an annual rate of two-thirds of the rateable value of the dwelling-house at the date when the variation is made.

For the purposes of this subsection the rateable value of a dwelling-house shall be
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ascertained in accordance with section 25 of this Act (disregarding subsection (4)) by reference to the value shown in the valuation list at the date when the variation is made.".").
The noble Lord said: My Lords, I spoke to this amendment with the last amendment. I beg to move.
Clause 78 [Meaning of "premium" in Part IX of Rent Act 1977.]:
[Amendment No. 81 not moved.]
Clause 79 [Repairing obligations in short leases.]:
[Amendment No. 82 not moved.]
Clause 80 [Tenant's improvements.]:
Lord BELLWIN Lord BELLWIN moved manuscript Amendment No. 82Z:
Page 59, line 19, after ("18") insert ("and 20").
The noble Lord said: My Lords, this, again, is minor and consequential on Amendment No. 70. It simply makes reference to the new Rent Act possession case—Case 70 in Clause 80—so that the tenant of a house where the landlord has a mandatory right to possession under Clause 20 will not have the right to carry out improvements, as the Bill already provides for the other mandatory possession cases in Part III of Schedule 15 to the Rent Act 1977. I beg to move.
4.56 p.m.
Lord MONSON Lord MONSON moved Amendment No. 82A:
Page 59, line 38, after ("if") insert ("(i)").
The noble Lord said: My Lords, I will, with permission, speak at the same time to Amendment No. 82B, 82A being the paving amendment. The Government are giving council tenants the right to make wide-ranging improvements to their houses and to redecorate them externally to any colour they choose, according to the promises set out in the Conservative Party's election manifesto, and very few people would take exception to that. However, very much at the last minute, it would seem, and certainly without adequate consultation with those likely to be adversely affected, they inexplicably decided to extend this right to private

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tenants, and that was categorically not in their manifesto. Nor would anybody in the Central Office or elsewhere dare to have included it because, of course, it cuts right into the concept of private property rights which the Conservatives—and incidentally the Liberals, or so I believe—have traditionally upheld.
I suspect that the Government may have had mainly in mind large impersonal landlords, many of them resident abroad, whose general behaviour is often criticised by the noble Lord, Lord Janner, and others, frequently with extremely good reason. The Government appear to have overlooked the fact that most landlords are small, are far from impersonal and are people who care very much about their own property and its future. Take the case of a farmer who converts a cottage or possibly an old barn or stable for letting, one which is contiguous or at any rate extremely near to his house; take the case of a widow living in a house which is too large for her and who converts part of the house into a self-contained flat or maisonette with its own separate entrance; or take the case of somebody owning a pair of semi-detached houses who lives in one and lets the other, or two adjoining terraced houses in some modest street.
If they let these properties on seven-year full repairing and full insuring leases—and most landlords who do not want to lose money try to let on leases of that kind, given that the cost of insurance and repairs goes up so much faster than rents—they will be obliged, if the clause is left unamended, to allow their tenants to paint the exterior of their houses any colour they wish, be it fluorescent lime green, bright orange or whatever, whether or not that harmonises with their own house. My proposal is designed to spare owners the necessity of seeing, day in and day out, their own property decorated in colours which they personally may find quite hideous. The 50 yards radius point is necessarily arbitrary, but any figure one uses will be arbitrary and I think this is a reasonable one. I hope the Minister will give the amendment very favourable consideration.
Lord MOWBRAY and STOURTON: My Lords, many of your Lordships, myself included, will sympathise with the feeling behind the noble Lord's amendment. The appearance of dwellings in
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a street is important to the character of our towns and to the quality of the environment. But it seems to me that the noble Lord, Lord Monson, in his enthusiasm for civic design, is unnecessarily restricting the tenant's right to improve. This amendment makes no allowance for the condition of the tenant's property, which may be in great need of attention, and it makes no allowance for the age or character of the property. So the amendment could mean that a landlord living in a Georgian property could refuse external decoration by tenant's of modern flats built, for example, on land which he owned at the rear of his dwelling. That seems perhaps to be unreasonable; and the essence of the tenant's right to improve is that it is firmly based on what is reasonable to allow.
I suggest that the essential part of what the noble Lord, Lord Monson, is seeking to achieve, is covered
already by the drafting of Clause 80. Where there are reasonable grounds for a landlord to refuse consent to external decoration by a tenant, he may do so. Where the landlord wishes to impose reasonable conditions to an improvement by the tenant, he may do so. We have provided for the courts to determine what is reasonable in these situations, and I think that is fairer and more flexible than the kind of blanket exclusion which this amendment would introduce. I hope that on reflection the noble Lord will see fit to withdraw the amendment.
Lord MONSON: My Lords, I thank the noble Lord for that reply, but what he fails to stress, I fear, is that this is a totally novel concept. So far as I know, never before in history have private tenants been given the right to do more or less as they wish with someone else's property, on the basis that the consent cannot be unreasonably withheld. Of course, I take the point that it all hinges on the concept of what is unreasonable. I think that possibly my amendments to Clause 81 might cover the point rather better, and we shall come to those in a moment. For that reason, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 82B not moved.]
Clause 81 [Provisions as to consents required by section 80]:
5.3 p.m.
Lord MONSON Lord MONSON moved Amendment No. 82C:
Page 60, line 1, leave out ("in particular") and insert ("among other considerations").
The noble Lord said: My Lords, now we come to the trio of amendments which might more readily fulfil the purpose that I had in mind. Noble Lords will see from the wording of Clause 81 that
"the court shall, in particular, have regard to the extent to which the improvement would be likely"
to do a number of things; three in all, in fact. The words "in particular" are likely to suggest to the court, which after all may have a tricky borderline decision to make, that the three considerations set out in paragraphs (a), (b) and (c) should, when it is making its judgment, count, to the tune of about 90 per cent., with all other considerations that the landlord may be anxious to put forward counting for only 10 per cent.
By means of the substitution of the words "among other considerations", the court would therefore be able to give a better balance. It would be able to give more weight to the other considerations, such as the external appearance of the house, and so forth. It is a matter of fine judgment, I know. But the courts have to interpret Acts of Parliament, and to them the words "in particulars" may imply that apart from the three considerations mentioned, all the others carry very small weight. I hope that the Government will see the merits of what I suggest. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, the noble Lord, Lord Monson, has expressed concern about the implications which the tenant's right to improve could have. He has also sought to alter the factors to which the court shall have regard in determining whether a landlord was reasonable in refusing consent to an improvement. But my belief is that he has over-stressed the risks here, whereas I would emphasise the positive benefits of tenant's improvements.
On Amendment No. 82C, I would suggest that it is already implied in the drafting of Clause 81 that the court can take other factors into account besides those specifically mentioned in subsection (1). What the court has to decide is
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whether refusal of consent, or the giving of consent subject to conditions, is reasonable in the circumstances of any particular case. It is not obliged to confine its consideration solely to the factors listed in that subsection: and it could lead to some very strange judgments if that were so. These factors are included in the provision to help guide the court on points which may be relevant where there is a dispute between landlord and tenant over an improvement. They are not meant, however, to exclude other factors which may be material to the case. I hope that what I have said explains why we do not see fit to approve of the noble Lord's Amendment No. 82C.
Lord MONSON: My Lords, the acoustics in this Chamber are not as good as might be imagined, and I am not quite sure that I have taken in all that the noble Lord, Lord Mowbray and Stourton, said. Of course, it is perfectly true that the courts are given a power to take other matters into account as well. The trouble is that courts are not allowed to read Hansard and take these points into consideration. They have to take the Act of Parliament, the wording, as it stands. It still seems to me that the words "in particular" give an undue, over-heavy stress on the three considerations set out in paragraphs (a), (b) and (c), to the exclusion of other considerations. Perhaps we can deal with this matter in my next pair of amendments. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord MONSON Lord MONSON moved Amendment No. 82D:
Page 60, line 7, leave out ("or").
The noble Lord said: My Lords, I beg to move Amendment No. 82D and, with the leave of the House, I shall speak also to Amendment No. 82E, which is consequential. Now we come to the heart of the question. Theoretically, the tenant will have powers under the Bill, as I understand it, to make quite extensive changes to the interior of the house and to its external appearance. It is not merely a question of erecting television aerials, installing extra power points, or anything of that nature, to which few landlords, if any, would object. In theory, the tenant can knock down a partition wall, provided that it is not a load-bearing wall, or he can

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erect a wall and so make one room into two rooms.
With regard to the external appearance, it is not merely a question of painting. He may erect a sun lounge, so far as one is able to interpret the clause. He can fit dormer windows in the roof. He can render the exterior of the house with stucco; it might be a brick house. He can do any number of things of that nature. None of those things may detract from the value of the house—from either its capital value or its lettable value—but such things may make the house totally different from what it was at the beginning of the tenancy.
The landlord may not himself wish to live in the house—though if he does, this is covered by the exclusion in the clause as it stands—but he may wish for a son, daughter or other relative to live in it. The alterations made by the tenant as permitted by the clause may be extensive and may be totally unsuitable for the member of the landlord's family who is to live there. This involves taking an extraordinary liberty with the fundamental property rights of the citizen. I regard this as a very important issue.
Lord MOWBRAY and STOURTON: My Lords, I must still emphasise the importance with which we regard the tenant's right to improve the house. We regard this as an important matter. With regard to these two amendments, in our view there is no need to draw the court's attention particularly to internal layout or external appearance. I would remind the noble Lord, however, that we see it as a very important principle for tenants, especially council tenants, to have a right to decorate and to do internal alterations. There are too many council estates painted in the same uniform colours, and we want people to have a real chance of changing all that. Where questions of internal layout or external appearance are relevant to the case before the court, it will be able to take such points into account, and in our view no amendment is needed to emphasise this.
I should perhaps also remind your Lordships that nothing in this clause is intended to override the usual planning and building consents which may be required before works are carried out to a
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property; and, of course, as I have just explained on the previous amendment, the landlord can impose any reasonable conditions as to internal alterations or external decoration. I would therefore again urge the noble Lord, Lord Monson, and your Lordships, in the first case to withdraw the amendment, and in the second case, if the noble Lord were to press it, to reject it.
Lord MONSON: My Lords, the noble Lord, Lord Mowbray and Stourton, has given us a picture of council estates ablaze with multi-coloured front doors, but I was not talking about council estates. The Government would have got themselves off this particular hook if they had confined to council tenants the rights extended under this clause. Then, nobody would have objected; it seems perfectly reasonable. But we are talking about the rights of private individuals, not of councils, and so on, who do not have any personal interest one way or another in what colour houses are painted.
Lord LYELL: My Lords, would the noble Lord step a little closer to the microphone? Both my noble friends Lord Bellwin and Lord Mowbray have found it rather hard to follow the gist of the noble Lord's argument, as indeed I did. I wonder whether he could step as close to the microphone as he can get.
Lord MONSON: Certainly, my Lords. I was saying that the noble Lord, Lord Mowbray, had given us a most inspiring picture of council estates ablaze with colour, and so on. Of course, this is a magnificent idea, but I was not talking about council estates. I was talking about private individuals, and this is a totally different matter. If the Government had excluded private tenancies from this clause, there would have been no worry at all; but for the first time in history, so far as I know, they are giving private tenants the right to make these very wide-ranging improvements, to which the landlord is virtually forced to agree unless he has extremely good and rather narrow grounds upon which to object. My Lords, this is a matter of principle, and I am afraid I cannot withdraw the amendment.
On Question, amendment negatived.
[Amendment No. 82E not moved.]
Clause 86 [Extended discretion of court in certain proceedings for possession]:
[Amendments Nos. 83 and 84 not moved.]
Clause 87 [Discretion of court in certain proceedings for possession]:
5.13 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 87:
Page 63, line 4, leave out ("by") and insert ("in three or more").
The noble Lord said: My Lords, this is a small, technical amendment to define more tightly, for the purposes of Clause 87, the nature of a rental purchase agreement as distinct from a normal house purchase transaction. The amendment will avoid the possibility that the clause might apply to the ordinary house purchaser who may, in some circumstances, be allowed into occupation of the house he is buying before contracts are exchanged. Without this amendment the present clause might inhibit conveyances in ordinary house purchase transactions. They might be more cautious about allowing purchasers into occupation of property before completion of the sale. I therefore invite your Lordships to approve this amendment. I beg to move.
Lord EVANS of CLAUGHTON: My Lords, if I may say so very briefly, I think that once again this is an amendment about which the noble Lord's department has been in consultation with the Law Society, and I have a postscript to a letter concerning the previous amendment that the noble Lord, Lord Bellwin, dealt with, saying:
"I have just heard that the Government propose an amendment to Clause 87 similar to the one suggested in my last letter".
I can only assume that this is it, and on the assumption that it is then I think it should be welcomed.
Clause 90 [Power of local authorities to dispose of land held for purposes of Part V of Housing Act 1957]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 88:
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Page 64, line 15, leave out ("property") and insert ("land").
The noble Lord said: My Lords, in speaking to this amendment, No. 88, I should also like to speak to Amendments Nos. 89, 93, 94, 103 and 104. These are all drafting amendments to the provisions in the Bill requiring ministerial consent for the disposal of land. These amendments do two things. First, Amendments Nos. 88, 89, 103 and 104 substitute the word "land" for "property" in the consent requirements for "Part V" local authorities (in Clauses 90 and 91) and registered housing associations (in Clause 121). This will give a consistent use of the word "land". Secondly, Amendments Nos. 93 and 94 deal with the relationship between the words "land" and "house" in Clause 94—the provision requiring ministerial consent for the appropriation of certain "Part V" land by local authorities. These amendments are designed to avoid any possible confusion, and make the distinction between the words clear. My Lords, I beg to move.
Clause 91 [Consent to disposals and recovery of discount]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 89:
Page 65, line 37, leave out from first ("to") to end of line 38 and insert ("any particular land or description of land")
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 90:
Page 67, line 3, at end insert ("by a body specified in subsection (5A) below").
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 9. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 91:
Page 67, line 6, at end insert ("or further advanced to him by that body.

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(5A) The bodies referred to in subsection (5)(b) above are any building society and 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, also with Amendment No. 9. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 92:
Page 67, line 15, after ("section") insert (" "building society" means a building society within the meaning of the Building Societies Act 1962 or the Building Societies Act (Northern Ireland) 1967 and")
The noble Lord said: Again, my Lords, I have already spoken to this amendment with Amendment No. 9. I beg to move.
Clause 94 [Appropriation of land]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 93 and 94:
Page 69, line 31, leave out from ("appropriate") to end of line 32 and insert ("any part of that land which consists of a house or part of a house for any other purpose")
Page 69,line 36, leave out from first ("to") to end of line 37 and insert ("any particular land or description of land.")
The noble Lord said: My Lords, I have already spoken to Amendment No. 93, and it might be convenient to your Lordships if I move it with Amendment No. 94. I beg to move.
5.20 p.m.
Baroness FAITHFULL Baroness FAITHFULL moved Amendment No. 94A:
After Clause 94, insert the following new clause:
("Amendment of Housing (Homeless Persons) Act 1977
. The Housing (Homeless Persons) Act 1977 shall be amended as follows:

(a) by inserting after subsection (3) of section 3 the words "or with an area outside Great Britain"; and

(b) by inserting after subsection (5) of section 4 the following subsection:

" (5A) A housing authority shall not he the subject to a duty under subsection (5) above if they are of the opinion:—
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(i) that neither the person who applied to them for accommodation or for assistance in obtaining accommodation nor any person who might reasonably be expected to reside with him has a local connection with their area, and

(ii) that the person who so applied or a person who might reasonably be expected to reside with him has a local connection with an area outside Great Britain." ").

The noble Baroness said: My Lords, I rise with the indulgence of the House, because this amendment was to have been moved by my noble friend Lord Mottistone. It is an amendment which we feel should be brought to your Lordships' notice in view of a very difficult situation that is arising due to the fact that on 10th July the Prime Minister, in answer to a Question in another place concerning homeless families from overseas and families moving from one area to another, said in connection with a judgment of the Court of Appeal, that she felt that it was a matter of great concern and hoped that it could be looked into. For that reason, my noble friend has tabled this amendment. Under the Housing (Homeless Persons) Act 1977 persons becoming homeless in an area are the responsibility of that particular area, whether or not they live in it. That means that people moving about, if they are homeless, have the right under the Act to go to the local housing authority of the authority in which they find themselves and, so long as they subscribe to certain conditions, they have a right to be helped.
The first part of the amendment concerns those people who come from overseas to local authorities particularly where there is an airport. In the borough of Hillingdon, for instance, between 1975 and 1980, 256 families from 41 different countries, were found to be homeless and, under this Bill, should be housed by the area in which they find themselves. From 1977 to 1980, 67 families from 67 countries came from overseas, landed at London Airport, were homeless and, therefore, by law had to be housed by the Hillingdon borough council. Equally those people from this country who move from one area to another, provided that they subscribe to certain conditions, must be housed by the local authority in which they find themselves. If people want to move from an undesirable area to a desirable area, they can move and claim to be homeless and,

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provided that the conditions are subscribed to, must, by law, be housed. This is creating a great deal of financial difficulty for those areas which are desirable, but, much more important, for those areas where there is an airport and where people coming from overseas are found to be homeless.
This is an invidious position not only for the authorities which have to deal with the families but for the families themselves, because, not unnaturally, they are not wholly welcomed and inquiries must be made about them. The inquiries, not unnaturally, take time, and during that time the families must be put up in hotels, boarding houses or substandard accommodation. Your Lordships will remember that at the time of the Ugandan Asians coming to this country, we gave every possible help by having them at centres where specialised people were able to help them with their specialist problems. By this amendment—which, I am sure, my noble friend Lord Mottistone will be able to explain much better than I—it is felt that people should be accorded courtesy during the time that investigation is taking place and it should not be the responsibility on one particular authority but perhaps that of a centre where those coming from overseas might receive specialised help. From the point of view of people from this country moving from one area to another, it is felt that, unless they have local connections, they should not be declared as homeless people and become the responsibility of the authority to which they have moved. I beg to move.
Lord MOTTISTONE: My Lords, I must thank my noble friend Lady Faithfull for moving my amendment today and for putting the case so ably. I am sure that I could not have done better, but there are two points that I should like to emphasise. One is that there is evidence, both in the case of overseas people and in the case of people coming from (may I say?) undesirable parts of the country to more desirable parts, that this is done deliberately to exploit the Housing (Homeless Persons) Act. It seems to me that we must somehow have that Act modified. I am heartened by the fact that my right honourable friend the
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Prime Minister answered my honourable friend Mr. Shersby by saying that the Housing (Homeless Persons) Act requires to be looked at. That is a good thing; but it seems to me that, with Government legislation as it is, any amendments to that Act will perhaps not take effect for some time. In the meantime, these people continue to flood in. The first point is that there is exploitation and, while one does not want to deprive the genuine homeless people from such facilities as the Housing (Homeless Persons) Act gives them, one does want to try to exclude the ones who are not genuine. It may be very difficult to do so, but I think that the Government should give great attention to it.
The other point which needs emphasising is that basically this is very unfair to people on the housing lists of the local authority, who in effect have to give place to these other people. It must have been appreciated by Parliament when the Housing (Homeless Persons) Act was first passed that this situation would arise to a certain extent. I would say that if it is a fair situation, people have to accept it. But where it is unfair and where there is exploitation, we must somehow get round it. In conclusion, I would suggest that the Government might like to look at the Housing (Homeless Persons) Act. In the meantime, to prevent the flood continuing, they might give thought to accepting my amendment so ably presented by my noble friend Lady Faithfull. If they do not like its precise wording, perhaps they might care at Third Reading to put forward something of their own to deal with this knotty problem.
5.30 p.m.
Baroness BIRK: This amendment, my Lords, is a case of very great overkill. The case which Hillingdon Council have been making and on which the noble Baroness, Lady Faithfull, and the noble Lord, Lord Mottistone, base their amendment is simply not justified by the facts. The numbers of people arriving homeless from overseas who are entitled to be in this country who have no accommodation elsewhere and who have not become homeless intentionally is very small. A picture went through my mind of people sitting round the bush in Africa saying: "How can we abuse the Housing (Homeless

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Persons) Act in Britain?" and coming across to do so. That was a little exaggerated.
The official DoE statistics on homelessness show that only 2 per cent. of homeless households accepted by local authorities have newly-arrived from overseas. Hillingdon's own figures show that in the 31 months since 1977—and with great respect, this is rather more relevant than the figures that the noble Baroness used as we are talking about the Act—they have had to accommodate only 83 such cases, an average of 32 a year.
What Hillingdon has not mentioned in all its considerations about the Act is that the Greater London Council offered to take a quota of housing for just such eventualities. If Hillingdon had taken it up, it would have ensured that Hillingdon could have discharged its responsibilities under the 1977 Act with virtually no effect at all on the housing prospects of local residents. Noble Lords may well remember the case of the Kenyan Asian family who arrived here as British passport-holders in November 1978, and were literally dumped by Hillingdon Council in a great blaze of publicity on the steps of the Foreign Office. That action resulted in an investigation by the Commission for Racial Equality into the possibility of racial discrimination—an investigation which is still in train at present. The test case heard in the Court of Appeal a few weeks ago involved Mrs. Sophia Streeting an Ethiopian born refugee who was homeless in Hillingdon.
The first point to make about this case is that it was set up purposely by Hillingdon Council. I do not object to that at all because it is quite right that councils or other bodies should make a test case to find out what exactly their position is. They advised Mrs. Streeting to contact a solicitor with a view to taking legal action. The chairman of the housing committee was quoted at the time (17th November 1979) in the Daily Telegraph as welcoming the challenge to the council's ruling that it would not house Mrs. Streeting. He went on to say:
"We want this to be settled once and for all. We have no intention of breaking the law, but it is ridiculous that someone can fly across the world to Heathrow and demand to be housed ahead of local people. The only way to test whether we are right is in the Divisional Courts".
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The case was heard in the High Court in February 1980. The court found in favour of Mrs. Streeting. I do not want to go into all the details of that. According to The Times law report, Mr. Justice Griffiths commented, in reaching the decision that Hillingdon Council had an obligation to house Mrs. Streeting under the 1977 Housing (Homeless Persons) Act:
"I reach that conclusion with satisfaction, for if anyone needed the succour of this Act it is this young woman and her child—homeless refugees in a strange country".
Mr. Justice Griffiths also stressed that local authorities would be protected from an influx of homeless persons from abroad by immigration controls, and by the further protection that a person abroad could not give up accommodation and expect to be housed by a local authority under the Act, because by intentionally making himself homeless abroad the person would have disentitled himself to relief under the Act.
Hillingdon Council appealed against this judgment, and the appeal was heard before the noble and learned Lord, Lord Denning, earlier this month. In dismissing the appeal the noble and learned Lord described Mrs. Streeting's case as "meritorious" and emphasised that it must be comparatively rarely that a foreigner was allowed to enter the United Kingdom when he was homeless overseas and would be homeless here with no means to support himself. The trouble then with Hillingdon's reaction, having taken it as a test case and said "We will follow what the courts say", was that they did not like the court's ruling so they have attempted, so far as they can, to circumvent that. What they are now seeking would be done through this amendment. This would have far-reaching and very dangerous consequences—consequences of which perhaps those tabling it are not aware. In the first place, it would overturn the fundamental principle of people of refugee status like Mrs. Streeting, who are legally entitled to be in Britain, should receive exactly the same treatment under the law as all other United Kingdom citizens. This principle is fundamental to good race relations in this country, and was strongly endorsed by the Conservative Party in The Right Approach which emphasised the need for:
"fair and equal treatment before the law for everyone who lives here".

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Secondly, this amendment would, if agreed, have the curious effect of debarring from entitlement to help under the 1977 Act those British people who have been abroad for some years and who find themselves homeless on return to the United Kingdom. This means that if they had been abroad on work and come back then they would find themselves in that position. To establish a local connection, people have to have lived in the area for three out of the last five years or, failing that, have been there at least six months prior to their application. The noble and learned Lord, Lord Denning, specifically referred in his judgment to soldiers or sailors in our armed forces who had no local connection with any particular area. On returning to civilian life, if they were homeless, they should certainly qualify for the benefits of the statute. It would be quite absurd if such persons or others in civilian jobs who had been working abroad should be debarred from help under the Housing (Homeless Persons) Act. This is what the amendment would do.
Thirdly, the amendment is so drafted that it would be impossible for a local authority with whom an applicant recently arrived from overseas had no connection to refer that applicant on to another authority in the United Kingdom with whom the applicant had a connection. That is the case at the moment under the Act. I do not think that the movers of this amendment intended this; but this will be the result of their amendment.
To sum up—and I am sorry to have taken time over this—I think that this is an extremely important amendment and those objecting to it really have to object to it thoroughly. The amendment is not necessary. The numbers of homeless applicants from overseas to whom local authorities have an obligation are really very small. Furthermore, it would introduce some extremely unwelcome and injudicious changes to the current procedures which are well recognised by the overwhelming majority of local authorities as working well. Sir Duncan Loch, ex-chairman of ADC, said last year that the Act was working well; that the fears for it at the beginning were not realised; that the additional costs were a small price to pay for solving some of the homelessness in Britain.
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Only last week the AMA considered this at their housing committee meeting. They came to the conclusion that, although there are difficulties in certain London boroughs, they are of the opinion that there is no reason for any change. The code of guidance and the cost of implementing the Act should be taken into account when working out the new housing subsidy system. In other words, this may need some bolstering through the subsidy system. Nevertheless, at the end of the day one is left with a problem of having to deal with homeless people. It will be a great pity if we are in the position of having turned into a country that turned its eyes, its hands and its help away from people who are really in need of help. They also have a legal right to be here with refugee status. Also, in a case like this, where the local authority concerned firmly refused to take up the quota of housing offer it had in order to make their point.
I imagine that the Minister, when replying, will also remind us that the survey being carried out on the Act by the DoE has not yet been finished. This is a large amendment that is being proposed to this Bill at this time and I do not think can be satisfactory whatever the merits of it may be.
Lord MOWBRAY and STOURTON: My Lords, I listened to my two noble friends with great interest on the arguments with which they introduced this amendment and, I do agree with the noble Baroness, Lady Birk, rather introduced at the last moment on a totally new topic. I agree with so much of what the noble Baroness said, that this matter deals with issues of very great sensitivity and with an area of very considerable complexity. For these reasons, we have to exercise the very greatest care to ensure that we are not mislead into thinking that with a few hasty and apparently simple strokes we can neatly dispose of the issue. I do not believe there is any simple solution here at all. The interaction between this proposal, the European Community legislation dealing with freedom of movement, the right to take up employment and the entitlement to rights and benefits of all citizens of member states, and the Race Relations Act 1976 must be explored with very great care. We must also consider the

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wider implications of this isolated proposal for the operation not only of the Housing (Homeless Persons) Act 1977 but of all the parallel legislation in the social services field, particularly the Children and Young Persons Act 1963, which also includes duties towards dependent families with children who may find themselves without a home.
Your Lordships will be aware that a detailed and exhaustive review of the Housing (Homeless Persons) Act has, as the noble Baroness said, been under way for some considerable time. Representations have been received from a wide range of interests and are being carefully studied within our department. Your Lordships will also have noted the assurance given by my right honourable friend the Prime Minister in another place when answering a Question on the Hillingdon case. It has been suggested that the London Borough of Hillingdon needs a reception centre to deal with the problem of homeless immigrants. There have certainly been occasions when such measures have been necessary; for example, those thankfully rare occasions when world events have led to such misfortunes for large numbers of people that this country has had to make special arrangements to receive them as homeless, displaced refugees as, for instance, with the influx of Ugandan Asians. We have had the Ugandan Asians and also the Vietnamese boat people. On occasions like these the Government will be ready to consider what is the most appropriate assistance to offer.
However, the available evidence suggests that such a crisis does not, thankfully, exist in Hillingdon. Certainly the department's published figures do not support such a view. No special measures are therefore necessary. We are reviewing the operation of the Housing (Homeless Persons) Act 1977 and will take into account the implications of recent court decisions. Your Lordships will probably be aware that a High Court ruling in December, involving Crawley Borough Council and two Italian families, established that immigrants who come here without making adequate long-term arrangements for their accommodation run the risk of being declared internationally homeless, in which case the responsibilities of the local authorities towards them are
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limited. Having said all that, I would urge my two noble friends to withdraw their amendment in the knowledge that the points they have made will be fully taken into account during the review, on which the Government have not yet reached a conclusion.
Lord MOTTISTONE: My Lords, I thank my noble friend very much for his statement. If I might say so, the noble Baroness, Lady Birk, greatly exaggerated the deleterious effects of this amendment. In the first place, there is no suggestion that there should he no housing at all for people who come from overseas. We are only talking about council housing and there is no reason why there should not be other sorts of housing for people from overseas. It is certainly not the intention of this amendment to—
Baroness BIRK: My Lords, I wonder whether I might ask the noble Lord this. Can he indicate what sort of housing homeless people who arrive here, or people of refugee status, could have? What are they going to do? Are they going into hotels?
Lord MOTTISTONE: I am coming on to refugees in a minute, my Lords. I am talking about people who are not refugees and who come here of their own volition. As to refugees, I noted what my noble friend on the Front Bench had to say. I personally think there is probably a good case for some special refugee facilities organised by the Government on a national scale, but no doubt the Government will take that into account when they study the problem, as they say they will.
The other point where I think the noble Baroness was slightly in error, and indeed the noble and learned Lord the Master of the Rolls also, was in suggesting that this in any way affects service families. They never get council houses and at one stage that was a great grumble. They either go into service quarters or they have to find accommodation for themselves. This is sometimes very difficult for them, but it is not relevant for them at this moment. So there are one or two loopholes, if I may say so, in the Opposition's case. However, I take heart from what my noble friend Lord Mowbray has said and, with your Lordships' permission, I beg leave to withdraw the amendment.
The DEPUTY SPEAKER (Baroness Wootton of Abinger): My Lords, I think the amendment was moved by the noble Baroness, Lady Faithfull. If it is to be withdrawn, I think it must be withdrawn by the mover.
Baroness FAITHFULL: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.47 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 95:
Insert the following new clause:
"Houses classed as fit properties
(. Houses previously classed as fit properties when included in Compulsory Purchase Orders under Part III of the Housing Act 1957 shall for the purposes of Rehabilitation Orders under section 114 of the Housing Act 1974 be treated in the same manner as houses previously classed as unfit under Part III of the 1957 Act").
The noble Lord said: My Lords, the words set out in this amendment, and the thrust of it, may not be immediately apparent and it does seem, even by the standard of the amendments and the clauses of this Bill, to be obscure and complex in its wording. Therefore, I will apologise to your Lordships because it might take a couple of minutes to explain the problem. I hope to warm the rather cold heart of the noble Lord the Minister regarding this particular case. It is a matter which has been brought to my attention from the City of Leeds. The problem is that under Part III of the Housing Act 1977 local authorities are empowered to acquire land by compulsory purchase for clearance areas. The scheme under the 1957 Act is that, first, the local authority has to be satisfied that an area of houses is unfit for human habitation and may determine to purchase that area for clearance. Once they have obtained the consent of the Department of the Environment to the compulsory purchase order and have purchased the land, Section 47 of the 1957 Act then imposes a duty on the local authority to abolish all the buildings on the land. Under Section 43(2) of that Act, the local authority was, however, permitted to purchase, by compulsory purchase order again—and I quote:
"any adjoining land, the acquisition of which is reasonably necessary for the satisfactory development or use of the cleared area".
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This is known in common parlance as "added lands" in local government circles, and may consist of houses which are fit for human habitation. Once the compulsory purchase order is made in respect of added lands, the local authority is then under the same duty to demolish the buildings on that land. Under the Housing Act 1974, Section 114 as amended and replaced by the Housing Rents and Subsidies Act 1975, Schedule 5, further provision is made to allow the local authority to seek a rehabilitation order in respect of the houses in a clearance area. The order is made by the department and releases the local authority from the duty to demolish on terms that they bring the property up to the full standard set out in Section 66 of the 1974 Act. This procedure may be extended to the added lands I mentioned by virtue of Section 114.
There has arisen in Leeds a case—and I understand that there have been similar cases in other parts of the country—where the unfit houses have been demolished. This is quite an important case and, as I say, exists in more than one particular circumstance. Unfit houses have been demolished but also certain fit houses which are purchased with added land remain and are usable.
The Department of the Environment seem to take the attitude that they cannot accede to a rehabilitation order to save fit houses, as rehabilitation orders can be made only in respect of unfit houses. In my view, this assessment is incorrect, unless the subsection is read as being capable of operating only where houses on added land can be saved along with some unfit houses. The Department of the Environment's logic seems to be based on the assumption that a compulsory purchase order is confirmed only because the added land was reasonably necessary for the redevelopment. If the houses on the added land were to be saved, this would show that they were not reasonably necessary for the redevelopment, should not have been included in the compulsory purchase order, and therefore the original order of the Secretary of State was wrong.
This amendment is an attempt to place both added lands and unfit houses on the same footing, so that a local authority can seek a rehabilitation order in respect of all the lands in the compulsory pur-

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chase order, and thus release itself from the duty to demolish each and every house which is the subject of a compulsory purchase order. I am sure that that very simple explanation of a very complex problem will convince your Lordships, without any further discussion, that what I have said is correct. My Lords, beg to move.
Lord MOWBRAY and STOURTON: My Lords, this new clause, like the last one we were discussing a few moments ago, has also come at rather a late stage and is drafted in rather general terms. It might help your Lordships' understanding of a somewhat technical subject if I also explain a little of the background of the rehabilitation order provisions to which the amendment refers, as we in the Government see them.
In the early 1970s, the gradual shift of emphasis away from demolition and clearance of areas of older housing and towards programmes and policies of rehabilitation and improvement culminated in the Conservative Housing and Planning Bill in 1973, and subsequently in what became the Labour Government's Housing Act of 1974. The purpose of the rehabilitation order provisions in the 1974 Act was to give local authorities the opportunity to think again, in the light of the new emphasis on rehabilitation and improvement, about some of their existing clearance proposals for areas of older housing.
Essentially what the rehabilitation order provisions do is to provide a local authority with a power to look at a former clearance proposal, and formally to decide that it no longer intends to demolish the houses within that area, but will embark on a programme of rehabilitation and improvement of either the whole or part of that area. I must emphasise that this opportunity to reconsider applies only to decisions which had been taken before the Act came into force; that is, for houses which had either been acquired before 2nd December 1974, or included in compulsory purchase orders confirmed not later than 2nd March 1975. So far as new acquisitions, whether voluntary or compulsory, were concerned, it was anticipated that local authorities would have full regard to the possibilities of renovation before acquiring dwellings for clearance purposes.
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There is, therefore, no provision on the statute book
which enables a local authority to change its mind in relation to dwellings acquired for clearance after the dates to which I have already referred. This may seem a somewhat rigid position for us to take, but it is important to bear in mind that, so far as fit houses are concerned, the local authority is entitled to acquire them for clearance purposes only if it can be shown that their demolition is essential in order to provide a suitable site for redevelopment. The Secretary of State's confirmation of any compulsory purchase order in relation to fit properties rests on that same assumption, and if local authorities were simply allowed to change their minds and retain fit properties acquired under these powers it would undermine the whole basis on which the Secretary of State had approved their acquisition in the first place.
Despite this, one cannot help but feel some sympathy with the view that it should not be essential to demolish a house which is not unfit and which, because of changes in local policies or programmes, no longer forms an essential part of the redevelopment proposal. That is a problem which needs further examination, though I do not hold out any prospect of finding an easy solution, given the whole basis on which the initial acquisition by the local authority rests. We would need to consider very carefully the position of the original vendor, for example, and to look at the underlying compensation and other issues which inevitably arise.
These are inevitably fairly deep waters and not, I suggest, appropriate for us to set sail on, without an opportunity to think very carefully about our course and about the hazards which might lie in our path. The new clause does not achieve what we take to be its main objective and is, indeed, somewhat capricious in its effect. I hope therefore that, in the light of my acknowledgement that there is an issue worthy of further examination, the noble Lord will agree to withdraw the clause.
Lord EVANS of CLAUGHTON: My Lords, I apologise for the amendment having been put down rather late. It should have been put down in Committee. The fact is that in another place they thought that the amendment was appropriate

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to the Local Government, Planning and Land (No. 2) Bill, but then they found out at a very late stage that it should appear in this Bill. If they had asked me, I could have told them that much earlier.
But I am very grateful to the noble Lord for what he said. I appreciate that this is a difficult problem and that it would be wrong for local authorities to be able capriciously to acquire added land and then rehabilitate it, under the guise of being the compulsory purchase of unfit property. On the face of it, it seems absurd that unfit houses can be refurbished under a rehabilitation order, but not fit houses. This appears to be a paradox whose examination by the Government might he helpful. From what the noble Lord the Minister has said, I suspect that this will be looked at. But I thank him for his consideration and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 12 [Amendments of Housing Act 1974 Part VII (local authority grants)]:
5.58 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 96:
Page 130, line 35, leave out ("section 16 of that Act") and insert ("Schedule (Houses in multiple occupation: means of escape from fire) to the Housing Act 1980").
The noble Lord said: My Lords, for the convenience of the House, with Amendment No. 96 I should like to speak to Amendments Nos. 138, 139, 143, 155, 156 and also 147. But, before I do so, I am asked by Hansard to mention that noble Lords might like to speak a little more slowly or nearer to a microphone because of difficulty with the acoustics.
Your Lordships will recall that when we considered the Bill in Committee my noble friend Lady Vickers moved an amendment on the subject of means of escape from fire in houses of multiple occupation. At that time I promised that the Government would themselves table an amendment on the same subject, and it is that amendment which we are now considering, together with some minor amendments which are consequential upon it, as well as my noble friend's Amendment No. 147, which she has tabled again.
The Government's amendments bring together existing statutory powers dealing with means of escape, with the major addition that the Secretary of State will be given a power to specify by order particular types of houses in multiple occupation for which local authorities will have a duty. The provisions in the new schedule will give local authorities a choice between different courses of action, although they must consult a fire authority before exercising this choice. They may require the execution of works to provide means of escape, and your Lordships will be aware that elsewhere in the Bill there is provision for the mandatory payment of grant in the case of such a requirement; or they may secure by agreement or by the serving of a notice that some or all of the house should be closed, or they may combine the two procedures as they consider most suitable.
I understand from what my noble friend Lord Sandford said in Committee, and from other sources, that local authorities sometimes have difficulty in enforcing the law on means of escape. I should be glad to hear of any troublesome cases. I believe that the new clause will help local authorities and will be welcomed by them, but if any problems with the existing legislation persist the Government will be prepared to consider changes.
I am sure that your Lordships will agree that because of the provision to lay a duty on local authorities, this is an amendment which will have far-reaching implications. For that reason it will be necessary for the Government to hold lengthy and careful consultations with a range of interested bodies and organisations to establish whether, and if so how, the scope of the duty to be laid on local authorities by order should be restricted.
Within the time-scale of the Bill it has not been possible to carry out the necessary consultations. The approach which we have adopted, involving an order-making power, leaves the question open in order that we can give the closest possible consideration to the views that are put to us without the constraint either of an excessively tight time limit or of a legislative framework which reduces the options open to us.
I should like to turn now to the amendment tabled by my noble friend Lady

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Vickers; namely, Amendment No. 147. This amendment has been tabled before, both here and in another place. On the first occasion my honourable friend the Minister explained that he was not happy with the fact that under the procedures set out in the amendment local authorities could find themselves forced to take action which could be costly and time-consuming, solely—and I stress solely—as a result of a complaint by an HMO resident. As I said when we debated my noble friend's earlier amendment, I do not rule out the possibility of an orchestrated campaign, and this could well lead to the initiative being wrested from the responsible public bodies. The Government really could not allow that possibility.
I am also unhappy with the cumbersome apparatus surrounding the business of serving notices and counter notices, as proposed here. I am not convinced that there is evidence of the need for any more than the existing arrangements set out in Sections 14, 15, 17 and 18 of the 1961 Housing Act. In the absence of such evidence, I should be most unwilling to add to the bureaucratic burdens of local authorities and of HMO managers or landlords. Also, my noble friend's amendment does not provide for partial closure where it would be unreasonable to require works.
Finally, my Lords, I must mention three minor amendments which are consequential on the main one under consideration. In Schedule 23, the paragraph updating the penalty for contravention of Section 60 of the 1969 Act is no longer needed. In Schedule 25, the repeals of Section 19 of the 1961 Act and Section 60 of the 1969 Act are added. Lastly, Schedule 12 is altered to provide that when a notice under this schedule is served requiring that means of escape be provided, the payment of grant would be mandatory. May I conclude by commending these Government amendments to your Lordships' House. I wonder whether, if she agrees with this, my noble friend will feel able to withdraw her amendment.
6.3 p.m.
Lord SANDFORD: My Lords, as one who spoke in Committee on this cluster of points, may I say how welcome this group of amendments is and how
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much the Association of District Councils welcome them. They are sorry that it has not been possible to deal in the Bill with all the matters that they raised, but I think that the order-making powers which the Government are seeking should enable them to do what is necessary.
There are three things to be welcomed. The first is that the Government have resisted the call which came from a number of quarters but which I think was misguided. It came from, among other places, Church leaders in a statement which they put out on 8th May inviting a duty to be laid upon the local housing authorities to oblige hostels in multiple occupation to come up to certain standards in respect of fire escapes, fire precautions, and so on. This, I think, would have been running into the danger of making the best the enemy of the good. I am grateful—and I believe that the House should be—to the Government for having resisted that pressure. Housing authorities will do their best, exercise their discretion and see that, so far as possible, fire precautions and fire escapes are as good as they can be. The amendment standing in the name of my noble friend Lady Vickers which follows this amendment will, if it is accepted, help in that direction.
One of the things which must be done when the orders
are available is to bring into the embrace of this legislation the power of local authorities to deal with fire precautions, fire extinguishers and fire doors as well as fire escapes. It is better to prevent a fire, or to quench it at an early stage, rather than to concentrate on providing for escape when escape is the only thing which is left. For all those reasons, I welcome this amendment and the other ones which flow from it.
Baroness VICKERS: My Lords, I was rather taken aback when my noble friend mentioned Amendment No. 147 because I had no idea that he was going to discuss it now. I am very sorry that I had no notice from my noble friend that he was going to deal with Amendment No. 147, for there were a lot of points which I had hoped to put before him. In view of the circumstances, I think he will forgive me if I say that I should like to consider the matter and to come back to it again at Third Reading. There are a lot of points which I think are rather important.
6.8 p.m.
Lord HYLTON: My Lords, first I apologise to my noble friend the Minister for the fact that I was not here to hear the beginning of the remarks which he made in moving his amendment. Despite that, may I put to him one question and two comments arising from his Amendment No. 143. The question is this: what precise types of premises will be affected by the new duty? In relation to this, I suggest that it will be vital that the legislation in this Bill is not restricted solely to the large institutions. I would point out that the fire last March in the Kilburn hostel, in which 10 women were killed, was in a three-storey terraced house. It was quite a small house, not an enormous hostel.
My two comments are these. The duty proposed in the Government's amendment does not require local authorities to carry out works in default, as was proposed by my noble friend Lady Vickers in her Amendment No. 147. A power to carry out works in default is of extreme importance and is very much better than a closing order, for this reason: we need every single place in every single hostel to be in operation all the time. It is no good having a lot of hostels with a lot of closed beds in them. So I hope something can be done about that.
Secondly, it is still not clear, I suggest, from the Government's Amendment No. 143 how exactly local authorities are to become aware of unsafe hostel conditions. The amendment moved by my noble friend Lady Vickers made special provision for inspection upon a complaint by a hostel tenant. Obviously this could occur under the Government's amendment, but I suggest very strongly that if it is not to be written into the Bill, then at least it should be encouraged by notices to voluntary bodies, by circular or by any other way in which it can be encouraged. I would ask the Government to take this one question and these two points into very serious consideration.
Baroness DAVID: My Lords, I should like to reinforce what the noble Lord, Lord Hylton, has said and to ask the same questions about the kind of premises to which the clause would refer. I should also like to know how they are going to be alerted to the need for action. Have
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the Government given any attention to the AMA's worry about a possibility of a closing order being achieved, possibly because of precautions being needed, but this being taken advantage of by the landlord in order to get vacant possession? I understand that some landlords in London have been using closing orders to get vacant possession, and there is an anxiety that with paragraphs 3 and 9 of the Government's new schedule this could be done. I should like to hear what the Minister has to say about that. Again, I am very interested in the question asked by the noble Lord, Lord Hylton.
Lord BELLWIN: My Lords, the latter point which the noble Baroness, Lady David, raised in many ways highlights the great difficulty that there is in coming forward with something which on the one hand both recognises and sets out to do something about what is a very real problem and, on the other hand, considers the enormous open-endedness and all that flows from that and what it could mean. It is a very difficult one to get just right. I suppose one will not get it just right, but one will get it as right as one can. That is why I said—my noble friend said he was not here when I said it; that is fair enough—at the beginning that what we really must do here is have discussions. We have already had first talks with the local authority associations. As I recall it, the housing consultative council met within the last 14 days or so, when this matter was talked about, and all the local authority associations were involved. Clearly, this is one instance where there will have to be the most careful consultation and discussions with the AMA and the others to pick up the point that the noble Baroness makes and the many others which flow from the very considerable requirement that is being put forward.
I should like to put right an omission I made on Amendment No. 143, which in itself is a minor amendment. There has been a new paragraph 12, which says that the first italicised passage has been deleted and it should now read simply, "Section 15". It has no sinister implications, but I have to put the record right. My noble friend Lord Hylton asked which properties will he made the subject of the new duty. This is exactly the point that I was making a moment ago.

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Clearly there will have to be discussions with local authorities. The Kilburn tragedy, of course, is precisely the kind of case that must be used as an example to see exactly what flows from it. This in itself has not touched it all off, but every time—sadly it has to be said that this is not the first time—that these tragedies take place it only highlights the enormity of the dilemma, on the one hand, of wanting to make sure that there is proper provision, which is so necessary, and, on the other hand, not getting into a scene whereby one could risk closure of so much accommodation because of what that would mean. No one in your Lordships' House would claim that there is a simple solution. Therefore, we had best arrive at a solution by sitting down, as we intend, and having discussions. I hope that answers the point. In this amendment the Government are making an attempt to take this on board while this legislation is going through. I feel sure that there is great interest—that is the minimal word I can use—in this. People are concerned, and I have confidence that with this amendment and what will flow from the Bill we shall get some action very quickly.
Lord GIFFORD: My Lords, before this amendment is finally accepted, may I voice the disquiet that I feel about the amendment and the debate upon it? I think the House needs to appreciate that the law is not being changed one iota by this amendment unless and until the Secretary of State takes upon himself to use the new powers that are given in paragraph 1. What I fear is that these powers will be talked about to some extent and then put on a shelf, as I understand similar powers under the Fire Precautions Act have been, and used only in a very small number of circumstances, perhaps when there are very big institutions involved, and that they will not meet the dangers that the noble Lord, Lord Hylton, talked about, which were exemplified by the Kilburn fire. We ought to have from the noble Lord, Lord Bellwin, a commitment by the Government that these powers will be vigorously used. Even if he cannot give us the detail of what kind of buildings will be specified by them, he should give us an undertaking that there will be vigorous use of these powers, perhaps more vigorous than the local authorities themselves would like to see, so that means of escape from fire can be provided
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and people are not trapped in ill-provided hostels.
Lord BELLWIN: My Lords, by leave of the House, may I say that I do not know that I can or need to add to what I said when I made my opening remarks, which I can assure the noble Lord, Lord Gifford, were very carefully thought through. This was not just a case of having speaking notes and reading things out. I try not to do that. It is a case of looking very carefully into what is said, talking about it, thinking about it and adjusting it where necessary. That is why the words chosen, which will be in Hansard, were chosen very carefully. I hope they gave the impression of concern and urgency as well.
6.18 p.m.
Baroness VICKERS Baroness VICKERS moved Amendment No. 97:
Page 131, line 41, leave out ("£5,000") and insert ("£6,750").
The noble Baroness said: My Lords, I beg to move the amendment standing in my name and that of the right reverend Prelate. This amendment is self-explanatory. I set out in detail on the Committee stage, at column 665, the reasons for it. The noble Lord, Lord Mowbray and Stourton, very kindly asked whether I would withdraw it so that, if necessary, it could be discussed further. I hope that he has had a chance to discuss it further. There was one other point in regard to Scotland which he was kind enough to write to me about. In his letter, he said he understood that, in the light of the provision being made in the Housing Bill, further consideration was being given to the situation in Scotland. I should be very grateful if he would let me know whether he has had a chance to do that. I beg to move the amendment.
Lord MOWBRAY and STOURTON: My Lords, my noble friend Lady Vickers is quite right. At the Committee stage we said that we would take this away. We had much persuasion and eloquence from all sides of your Lordships' House on this. We have given it further consideration, and I am very pleased to be able to inform my noble friend and your Lordships that, having taken it away, we are content to accept this amendment.
Baroness VICKERS: My Lords, by leave of the House, I should like to thank my noble friend for his kindness in accepting this amendment. I believe it will give a great deal of help to many homeless people.
6.20 p.m.
Lord BANKS Lord BANKS moved Amendment No. 98:
After Clause 113, insert the following new clause:
("Housing subsidies
.—(1) The provisions of section 24(1)(B) of the Housing Subsidies Act 1967 shall have effect where a person borrows, or two or more persons borrow jointly, from a qualifying lender on the security of a freehold or leasehold estate of the borrower, or of one or more of the borrowers (including an estate held jointly or in common by the borrower, or one or more of the borrowers and one or more other persons) in land in Great Britain, and the following conditions are satisfied:—

(a) that the loan is or was made as part of a scheme under which not less than nine tenths of the proceeds of the loan are or were applied to the purchase by the person or persons to whom it was made of an Annuity ending with his life or with the life of the survivor of two or more persons (in this section referred to as "the Annuitants") who include the person or persons to whom the loan is made;

(b) that at the time the loan is made the person to whom it is made or each of the Annuitants had attained the age of 65 years; and

(c) that the person or persons to whom the loan is made or each of the Annuitants uses the land on which it is secured as his only residence.

(2) The borrower or borrowers may by notice in writing to the lender in such form as the Ministry may direct (in this section referred to as an "Option Mortgage") elect that the loan shall be subsidised in accordance with the provisions of Part II of the Housing Subsidies Act 1967 and the Option Notice shall be treated for all purposes as if it were an Option Notice made under the provisions of section 24 of the said Act.").
The noble Lord said: My Lords, I beg to move Amendment No. 98 standing in the names of my noble friend Lord Evans of Claughton, the noble Baroness, Lady Faithfull, the noble Baroness, Lady Phillips, and myself. I must begin by declaring an interest because, as I have explained to your Lordships before, I am an insurance broker being a director of a subsidiary company of a firm of Lloyd's brokers.
I moved an amendment in exactly similar terms to this amendment at the Committee and Report stages of the Social Security (No. 1) Bill. The amendment had—and still has—the strong support of Help the Aged and Age Concern, two leading organisations dealing with the problems of the elderly. The amendment attracted widespread support from all parts of the House, not least from the Government Benches, from which the noble Baroness, Lady Vickers, the noble Lord, Lord Gisborough, the noble Baroness. Lady Elliot of Harwood and the noble Baroness, Lady Trumpington, spoke sympathetically. However, at that time the Government said that the amendment was not relevant to that Bill, and on a Division the amendment was defeated by 12 votes. I tabled it again in Committee on this Bill and the noble Lord, Lord Bellwin, confirmed that this is the right Bill to which to move such an amendment, but I withdrew the amendment at that stage in order to consider the comments which the noble Lord, Lord Bellwin, had made.
I imagine that by this time the House will be familiar with the purpose of the amendment so I will restate it only briefly. Elderly people owning their own homes but with inadequate income can supplement their income by raising a mortgage in order to purchase an annuity. Out of the annuity they pay the interest on the mortgage and the balance of the annuity provides the extra income. Those paying tax enjoy tax relief on the mortgage interest, which makes the arrangement much more attractive to them than to non-taxpayers. Indeed, as the situation is at present, the arrangement may not prove suitable for the non-taxpayer. The amendment seeks to extend to the non-taxpayer the option mortgage arrangements available to non-taxpayers raising a mortgage to buy their house. Under this they pay a lower Government subsidised rate of interest on the mortgage. Since elderly taxpayers have been helped in the same way as taxpayers buying their houses, it seems only just that elderly non-taxpayers should be helped in the same way as non-taxpayers buying their houses.
I should like now to consider briefly the arguments which have been advanced at various times by the noble Baroness, Lady Young, and the noble Lord, Lord Bellwin, against the amendment. First,

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it has been argued that there is no general principle that tax relief for taxpayers must be matched by subsidies for non-taxpayers. I agree that that is so but it has been done for house purchase. Recognition of the need to help non-taxpayers has led to the replacement of child income tax allowances by child benefit. In both those cases it was felt that non-taxpayers should be helped as well as taxpayers. It seems to me that there is an overwhelming case for helping the elderly non-taxpayers whom we are now considering.
Secondly, it has been argued that tax relief on loans to purchase life annuities has never been regarded as an instrument of public policy. It was further argued that when in 1974 tax relief on loans was being withdrawn for all but a limited number of purposes, home income plans were exempted only because the noble Lord, Lord Carr of Hadley, who moved the amendment in another place, wanted to protect those who had already taken out such plans. However, the fact is that the exemption covered future as well as existing home income plans and it did become an instrument of public policy. The noble Lord, Lord Carr, cannot be here today, but he has written to me in these terms:
"I am delighted that you are going to make another attempt to secure the benefit of the option mortgage for non-taxpaying home owners. This has my full-hearted support."
Thirdly, it has been argued that the option mortgage scheme is really designed to encourage home ownership, and that to use it for the purpose proposed by the amendment would be a completely new departure. I see no reason why that should not be so. From time to time we are bound to have completely new departures, and if we find a new purpose for something which was originally designed for another purpose it would be foolish not to use it.
Fourthly, it has been argued that the tax relief on the mortgage interest compensates for the tax on the interest element in the annuity. It is argued that they balance out and therefore no advantage is given under the present arrangements to the taxpayer. The interest element on the annuity in home income cases is never more than one-third of the interest on the mortgage, so tax relief is a very decided
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advantage to the taxpayer. Fifthly, it is argued that if the amendment is passed home income schemes would become more attractive to non-taxpayers than to taxpayers since, it is argued, the subsidy on the interest rate equals the tax relief and the non-taxpayer does not pay tax on the interest element in the annuity. This advantage to the non-taxpayer would be very marginal indeed, for this reason: The rate of interest on the mortgage and the annuity rate are both kept very low in these schemes. Because the annuity rate is low the taxable element in the annuity is very small and is regarded as very largely capital; the tax on it would be even smaller.
Sixthly, it is asked whether we should use taxpayers' money to provide extra income for a particular group of old people. In my view there is no difference in principle between tax relief and a subsidy. Both are methods of helping particular groups of people and the Government have already selected elderly taxpayers when making these arrangements. It is wrong to leave out those who need help most; namely, the elderly non-taxpayers.
Then it is argued that the average outright home owner spends only 4½ per cent. of his gross household income on housing and therefore that class of people do not require help. But the group we are thinking of are not average; their income is well below average. Most of them live in old houses where the upkeep can be extremely heavy, and in any case as I have already pointed out, the tax-paying home owners are helped.
Finally, there is the question of cost. On 6th May the noble Baroness, Lady Young, said that the Government estimate was that it would cost £10 million a year. My view is that it would cost something like £2·5 million, taking into account the number of these plans taken out so far. Then we have to bear in mind the cost of maintaining people in care if they are unable to continue to live in their own homes because their income is insufficient. On 4th July the noble Lord, Lord Bellwin, said in Committee that the cost was not the kernel of the argument. He said:
"I do not at all make my case on that point".
The noble Lord's case depended on the other arguments. However, the House

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may feel, in view of what I have said about them, that the other arguments do not really stand up.
I should like to conclude by quoting from a letter which I received the other day from a lady living in the Midlands. She said:
"I should like to thank you very much for your support in this and to say that I hope very much that you will continue to fight to remove the obstacle that prevents folks such as myself from taking out a home ownership annuity. What a difference it would make to our lives".
My Lords, I beg to move.
6.30 p.m.
Baroness VICKERS: My Lords, I would like to support the noble Lord, Lord Banks, as I did on the previous amendment. I think it will be recognised by all parties that when the benefit of this plan was discussed in 1974 the interest on mortgage was specifically allowed for tax relief, which considerably increases the benefit of this plan as not only would this help elderly people who find times hard but, by enabling them to keep their independence and stay in their homes, it would help take the weight of some of them off the public or private sector, and this would provide extra housing. However, although the plan was designed to help those in need, it was really only used for those with large incomes, large enough to pay tax and make use of the available tax relief. As to the large numbers of elderly people on much lower incomes, in the so-called poverty trap, who cannot claim tax relief and thus take advantage of this useful plan, if something similar to the existing option mortgage could be extended to them they could obtain subsidy instead of tax relief, which would put them on a par with their wealthy contemporaries.
The only alternative for many of these elderly people is to sell their homes, but as most of them already live in small, comparatively inexpensive houses they cannot usually buy something else and they have to queue up for heavily-subsidised council accommodation or other accommodation for the elderly. My Lords, this crusade, if I may put it that way, has been going on for three years now, and only recently have the Government—and I am grateful to them—decided which department should be
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responsible. As I said in a previous debate, when the elderly people made their plans for retirement they had no idea what inflation would do, and that it would wreck their plans and perhaps their lives. I beg to support this amendment.
Baroness FAITHFULL: My Lords, I speak as an ex-director of social services who was responsible for administering the Health Services and Public Health Act, which is the Act of Parliament which lays down that a local authority must give assistance and help to the elderly unable always to help themselves. I would like to support this amendment of the noble Lord, Lord Banks, on three counts. First of all, cost. Our difficulty in this country is that we always look at lists of columns separately and not together. This would save the country paying out supplementary benefit to a number of people who otherwise would have to receive supplementary benefit. Secondly, it would save cost in the provision of alternative accommodation for the elderly when they have to leave their homes; and, although figures have been mentioned, I think it has not always been costed, taking into account the cost of an old people's home or wardened accommodation. The cost of keeping someone in an old persons' home now is between £90 and £120 a week. In view of the number of people this Bill would cover, local authorities could save a great deal of money.
On the question of facilities, it is well known in your Lordships' House, so I apologise for saying it again, that facilities for the elderly in this country are woefully inadequate. We have not enough hostels, old peoples' homes or wardened accommodation. Indeed, if we had it, that is not the kind of accommodation that the elderly want. If we have to provide that accommodation, we are providing accommodation which might be necessary, but is not always the kind of accommodation that the elderly like. Thirdly, it is a question of what it is that people want and need. I maintain that they want independence; they want to be in their own homes. They do not want to move away from the communities in which they live; they want to stay in the place they have known. Therefore, I beg to support this amendment.
Baroness PHILLIPS: My Lords, I should also like to support this amendment. I feel that the arguments have been so well deployed both by the mover and the subsequent speakers that I will not waste valuable time replying. I would merely say that this proposal must be in line with the Government's thinking, because this is an attempt to assist people, as the noble Baroness who has just spoken so rightly said, to remain in their own homes and not to be a charge on the State. This is a group who would particularly resent that, but who would be quite happy if they could indeed draw an annuity and remain in their own homes for as long as possible.
I am very heartened to see that the amendment states clearly who is concerned—those over 65—so we know precisely who we are talking about. I would also say to the Minister—I know this is something he will accept—that it does not cover a very large number of people. These must be the kind of people we have been thinking about right throughout our consideration of the Bill, and I am sure that the persistence and humanity of the mover of the amendment and those who have supported it will be rewarded. We look to the Minister, as he has already accepted one amendment this evening, to do the same again, for a large number of your Lordships who support it and a small number of people who will benefit.
Lord GARDINER: My Lords, while in a sense perhaps biased as president of Help the Aged, I would like to support this amendment. I will not detain your Lordships since the arguments have already been fully advanced. It has always seemed to me that, although sufficient account has been taken of the money that would be saved if this amendment were accepted, in the various fields described by the noble Baroness, Lady Faithfull, in the end all it means is that a fairly small number of people who are too poor to obtain tax relief will be enabled to die in their own homes. One has to take into account in reverse the various aspects which the noble Baroness, Lady Faithfull, has described. I hope very much that the Government may be able to accept this amendment.
It seems to me that we have become an uncaring people. I have no complaint because I am much better off this year
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than I have been for years owing to Mrs. Thatcher's kind tax reliefs. Exactly what I have done to deserve this I do not know, and how it benefits the country I am not sure, but I am sorry if it is at the expense of the poor, of those who want to bury their dead in decency, who want maternity benefits, and so forth. Here, at least, the Government taking human charity into account, ought, I submit, to accept this amendment.
Lord BELLWIN: My Lords, I hope the noble Lords will pay the same detailed attention to what I have to say as they have done to other noble Lords who have spoken because, despite the very emotive tones that have been used in this debate, I believe there are other arguments which in fact show that to do what this amendment suggests would not benefit more elderly people. It would in fact provide benefit to some at the expense of many more elderly people. May I go through the points carefully. I have tried to look, as did the noble Lord, Lord Banks, at what has been said before. I have taken the arguments and tried to think them through logically. This is the fourth occasion on which this amendment has been discussed in this Chamber in the last few months. I listened carefully to the arguments advanced earlier, and I have listened to them again during this debate. While one may indeed have sympathy with the intention that lies behind the amendment, I have to say at the outset that the Government's attitude to the amendment has not changed.
There are two questions to answer. First, should particular members of the group of non-taxpaying elderly outright owner-occupiers receive a direct subsidy from the Government to augment their incomes? Secondly, do they deserve a higher priority than the many other groups in society who make a case for additional help? I suggest that the supporters of this amendment have to build their case around the answers to these questions. With respect, such a case, in my view, has not been established.
I think there are two strands to the argument advanced by the supporters of the amendment: first, the point of principle or of equity. It is said that because taxpaying elderly outright owner-occupiers get tax relief, their non-taxpaying counterparts should receive option

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mortgage subsidy. The availability of option mortgage subsidy as an alternative to tax relief is exceptional. There is no general principle that tax reliefs should be matched by corresponding subsidies. The option mortgage scheme was devised specifically to encourage house purchase and improvement. The amendment, by contrast, would augment the incomes of elderly home-owners; it would serve no housing purpose at all.
Supporters of the amendment have argued that tax relief serves no housing purpose either, but in this context tax reliefs are intended to prevent someone paying tax on part of his income which is to be paid to someone else as interest on a loan. Since non-taxpayers by definition do not pay tax, there is in this context no case for a corresponding subsidy. The option mortgagors are few in proportion to those who receive tax relief on their mortgages. If this amendment is passed, it is likely that the number of non-taxpayers taking advantage of it would far exceed the number of taxpayers who have life income plans. Those receiving option mortgage subsidy to augment their annuities would greatly outnumber those getting tax relief. That, I submit, just cannot be right. It would be a classic instance of the tail wagging the dog.
The second strand of the argument put by the supporters of the amendment is that of cost. I said at the Committee stage that I would not hazard a guess at the cost of the amendment, and as the noble Lord, Lord Banks, very fairly pointed out, I do not believe that that is the kernel of the argument. On an earlier occasion my noble friend Lady Young mentioned a figure. But if we are talking about cost—and I am not mentioning a figure—the difficulty is that nobody can say how many people might take advantage of the amendment. It would simply represent an open-ended commitment. No one can specify a number. Can a responsible Government really contemplate accepting such an open-ended commitment at any time, least of all at present when public expenditure is severely restrained?
I want to say again that that is not the kernel of the argument. It is a point I feel I must make in fairness to those who made the point before, and because it has
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relevance, not least in terms of open-endedness. Surely, it cannot really be argued that the particular group of outright owner-occupiers whose incomes would be increased by this amendment are the first priority for additional help or that they are the most deserving of all groups of those in need. If this amendment were passed, I think it would be deeply resented by, among others, people in the rented sector, whose housing costs are far higher. A true comparison with tenants who receive rent rebates would require rebates of some 100 per cent. The average outright owner-occupier spends only 4½ per cent. of his gross household income on housing, while the housing costs of people in rented accommodation are about 10 per cent. after taking account of rebates. The noble Lord, Lords Banks, asked: what about helping the category of people to whom the amendment is directed? But what about helping the non-home-owner, who are also elderly people in many cases?
The noble Lord, Lord Banks, has said that although the option mortgage scheme was introduced as an aid to house purchase, it would be foolish not to use it for another useful purpose if one could be found. That is rather like saying that any method of tax relief or subsidy should be infinitely extendable. That is a principle that no Government could accept. The existence of the instrument must be subsidiary to the merits of the proposal.
Lord Banks also referred to child benefit as an example of assistance available to taxpayers and non-taxpayers alike. But an analogy cannot be drawn satisfactorily between child benefit and option mortgage subsidy for annuitants. The only qualification for child benefit is to have children, and a recipient's financial or housing circumstances are irrelevant. By contrast, an annuitant would need to be the outright owner of a marketable house to have made particular financial arrangements with a particular insurance company before he could benefit from this amendment.
I suggest that the essential point is whether it is justifiable to provide such additional help for people who as a group have very low housing costs and who may not as individuals be in the greatest need compared with other groups.

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It would not be responsible for Government to fulfil their obligations to all elderly people by selecting for extra help particular members of this particular group. Moreover, I suggest that the Government cannot commit themselves to a new open-ended demand-determined commitment, least of all in these times.
I should like briefly to comment on one or two of the other points that were made. I do not accept the argument of my noble friend Lady Faithfull, when she talked about the facilities for the elderly being inadequate. Of course the facilities for elderly people are inadequate, but the facilities for all elderly people are inadequate, not just for this group. The argument does not help, in my view. The noble Baroness knows the tremendous respect and admiration I have for her knowledge and involvement in matters to do with the social services and the like. But I just do not see how, by singling out this one sector of the elderly, you are being fair in equity to all the others. I also do not take the point made by one or two speakers, that if you do not let them sell their homes in this way, then they will have to go to the local authorities for accommodation with the consequences of them doing that. It does not work that way.
I have several other points in front of me, because I write them all down as they are made and try to answer them. But at the end of the day I do not think there is much point. I accept entirely the great sincerity with which everyone spoke on this matter. I hope that in turn they will accept that I am sincere when I say that we are no less concerned with this than with any other group of the elderly. It is said that in this House if you merely mention the elderly in moving an amendment, a button goes and everyone goes with it. I do not think that that is so. I am convinced that your Lordships on all sides of the House will listen to all the arguments. There is a strong argument for helping all elderly people, but if we have to help them in one way or another let it be done on a basis that affects everyone and goes right across the board. Do not let us do what this amendment tries to do: wish to help a certain category of elderly people at the expense of other people, and thereby give them an advantage which I do not believe is justifiable. If your Lordships
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will think carefully about this, I hope you will at least concede that there is an argument to be considered. I think the Government are putting the case fairly, having thought about it not for the first time but, indeed, as the noble Lord said, for the fourth time.
Lord MONSON: My Lords, I think it is time that somebody from these benches rose to support this amendment. The noble
Lord, Lord Bellwin, mentioned priority and cost. I wonder whether your Lordships realise how minuscule the cost of accepting this amendment would be compared to the cost of subsidies to householders by means of tax relief on mortgage interest and subsidies to council house tenants. The combined cost of the latter two; that is to say, subsidies to council house tenants and tax relief on mortgage interest, amounts to no less than 1,330 times the cost of this scheme, if we take the figure suggested by the noble Lord, Lord Banks, of £2·6 million. But even if we take the figure of £10 million suggested a few months ago by the noble Baroness, Lady Young, it is still 346 times the assumed cost of the scheme. Furthermore, if we accept the extremely well reasoned contention of the noble Baroness, Lady Faithfull, the net cost of the scheme would be far lower because of the saving in the payment of supplementary benefit and rehousing costs; so your Lordships will see that the disparity is even greater. I hope, therefore, that you will support this amendment.
Lord KALDOR: My Lords, I should like to say a few words on this amendment. I feel that the noble Lord, Lord Bellwin, did not state the case properly when he mentioned the equity argument in connection with the option mortgages. The option mortgage scheme was introduced simply because the mortgage relief was not only anomalous but was regressive in its incidence. The richer you are, the greater the benefit you receive. If the noble Lord consulted his colleague, the noble Lord, Lord Cockfield, who was the author of the tax credit plan, which was very much in the spirit of this amendment, he would put him right on the true nature of the equity aspects involved.
Lord BANKS: My Lords, may I say how grateful I am to those noble Lords who have supported this amendment. I think

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all those who have spoken, other than the noble Lord, Lord Bellwin, have supported it. Of course, I accept the sincerity of the noble Lord, about which he spoke, but I must confess that I thought the arguments which he put forward were precisely the arguments which I had dealt with in my opening remarks. I thought I had shown that they would not in fact stand up. I will not go over them all again, but I think the basic argument on which opposition to this particular amendment has been presented is the argument: Should this particular group have a subsidy? That is the particular group of elderly non-taxpayers. Since a precisely similar group, in exactly similar circumstances, of elderly taxpayers has been selected and people who are better off have been selected and given an advantage and help in order to do this, it seems only right and fair that people at the bottom of the scale who need it most should be given the opportunity. There is no reason to suppose that the numbers involved would be so very large compared with those who receive tax relief. The number of schemes since the idea was introduced seven years ago has been only 3,000, and the figure which I gave was worked out on the basis that there would be 10,000 in a
year. So I believe I was being very generous in arriving at that figure.
It is said that it would be exceptional to do this; that there is no general principle. Yet it has been done in other cases, and if that is so, why should it not be done in this case, if the merits of the case demand it? There is no question of having an open-ended commitment for option mortgage so that it would be extended to all kinds of other things. It would be extended only if, on some other occasion, the merits of the case seemed to suggest it, as the merits of this case seem to me to suggest it.
We return to the fundamental point that if help is given to elderly taxpayers, then elderly non-taxpayers in exactly similar positions should be given the same kind of help as is given in the case of house purchase, and I hope that your Lordships will support this amendment in the Division Lobby.
6.55 p.m.
On Question, Whether the said amendment (No. 98) shall be agreed to?
Their Lordships divided: Contents, 114; Not-Contents, 85.
Resolved in the affirmative, and amendment agreed to accordingly.
Lord SANDYS: My Lords, I think that at this stage it might be for the convenience of the House if the House resumed its discussion of the Bill on Report at eight o'clock, and if in the meanwhile we took the business which is to be dealt with during the dinner hour. I beg to move that further consideration on Report be adjourned until eight o'clock.

HOUSING BILL
Consideration on Report resumed.
Schedule 15 [Rent rebates and allowances.]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 99:
Page 140, line 10, at end insert ("or, where the housing co-operative is a housing association, but for sections 15 and 16 of the Act of 1977").
The noble Lord said: My Lords, the purpose of this amendment is to correct a technical flaw in the drafting of Schedule 15 as it affects tenants of local authority housing co-operatives constituted under

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Schedule 20 to the Bill. It is, of course, the intention that tenants of housing co-operatives should be entitled to rent allowances, and subsection (5)(f) of the new Section 19 of the Housing Finance Act 1972, inserted by Schedule 15, is intended to provide for this. Subsection (5)(f), however, defines a housing co-operative tenancy by reference to a tenancy which would be a protected tenancy but for Section 16 of the Rent Act 1977, which excludes housing cooperatives. This deals satisfactorily with some co-operatives which are constituted as, for example, bodies of trustees; others, however, are constituted as fully mutual and industrial provident societies and although not of course registered housing associations, they would fall within the broad definition of "housing association" used in this schedule. Tenants of such co-operatives would therefore be protected tenants but for Section 15 of the Rent Act, which excludes housing associations, as well as Section 16. Subsection (5)(f) as currently drafted does not cater for this, but the insertion proposed puts the position right.
8.2 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 100:
Page 141, line 18, after ("3") insert ("to this Act").
The noble Lord said: My Lords, this corrects a minor drafting error by adding to the repeal of Schedule 15(5)(2) the words "to this Act", which should have been included in the repeal but were omitted in error. If they are not added to the repeal they will continue to stand in the 1972 Act and will have no meaning.
Clause 120 [Disposal of land by registered housing associations]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 101:
Page 88, line 3, after ("apply") insert ("(with the modification specified in subsection (4A) below)").
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 9. I beg to move.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 102:
Page 88, line 9, at end insert—
("(4A) The modification referred to in subsection (4) above is that the Housing Corporation is added to the bodies specified in subsection (5A) of section 104B.")
The noble Lord said: My Lords, I spoke also to this with Amendment No. 9. I beg to move.
Clause 121 [Consent of Housing Corporation to disposals of land by housing associations and housing trusts]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 103 and 104 en bloc:
Page 88, line 26, leave out from first ("to") to end of line 27 and insert ("any particular land or description of land")
Page 88,line 43, leave out ("property") and insert ("land").
The noble Lord said: My Lords, I spoke to these amendments with Amendment No. 88. I beg to move.
Clause 122 [Accounts and audit]:
8.5 p.m.
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 105:
Page 89, line 32, leave out ("and balance sheet").
The noble Lord said: My Lords, this and the subsequent amendments through to No. 110 I move as a result of representations made to me and, I gather, also to the Ministry, by the Consultative Committee of Accountancy Bodies which, as noble Lords possibly know, comprises a body for co-ordinating the activities in specific respects of the three institutes of chartered accountants in England and Wales and Scotland and Ireland: the Association of Certified Accountants, the Institute of Cost and Management Accountants and the Chartered Institute of Public Finance and accountancy. That committee, on behalf of its component bodies, which comprise the leading professional accountancy organisations in the United Kingdom, keeps a very watchful eye on all legislation which has any auditing or accountancy

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implications and from time to time endeavours to advise successive Governments as to the legislation which comes before them which carries such implications.
As it applies to all the amendments on this issue appearing under my name, I should perhaps declare a very remote and contingent financial interest, since my firm, Halpern and Woolf, might conceivably in the future act for housing associations or charities. It is therefore proper that I should disclose that remote interest. At the same time, I wish to make it clear that I speak in an independent capacity only. It will not therefore he possible for me to bring these amendments to issue on a Division, because that would imply a party political interest on the part of those sitting behind me and those who sit on other Benches. These amendments are of an entirely technical and non-political nature.
In moving Amendment No. 105, I would ask for the indulgence of the House so that I may speak at the same time to the following amendments: Nos. 107, 108, 109A, 109B, 109C, 109D, 109E, 109F, 109G and 109H, which all embody essentially the same point. In the clause as drafted—and Clauses 122 and 123 and Schedule 16 incorporate substantially the same words as I seek to amend—there are references to accounts and balance sheets, yet it is well known in the accountancy and legal professions that the word "accounts" includes also the balance sheet, which is essentially part of the ordinary system of accounts. Therefore the term "balance sheet" is entirely redundant.
Substantially the same point arises on Amendment No. 107, where in view of the existence of the word "accounts" we eliminate the words "and balance sheet". Similar considerations apply in Amendments Nos. 108, 109, 109B, 109C, 109D, 109E, 109F, 109G and 190H in the relevant form according to the context in which the words appear. The consultative committee has already spoken to the Department of the Environment on this matter, and I sincerely hope that the Government may see fit to accept the amendments. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, I appreciate the noble Lord's
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argument that the word "accounts", encompasses balance sheets and that separate reference is unnecessary. I am therefore happy to accept the noble Lord's amendments.
With regard to Amendment No. 109F I appreciate the noble Lord's reasons, for moving it, and I accept that it makes paragraph 4 of the schedule consistent on the face of the Bill with paragraph 2. Therefore I am happy to accept that particular amendment, too. I thank the noble Lord for having gone to the trouble of explaining this matter to the House, and to myself in particular.
8.12 p.m.
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 106:
Page 89, line 34, leave out from first ("of") to end of line 37 and insert—

("(a) the state of affairs of the association;

(b) the source and application of funds;

(c) so far as the housing activities are concerned its surplus or deficit during the financial year").

The noble Lord said: This amendment, which refers to Clause 122(1), deals with a slightly more complex matter than that with which the noble Lord has been good enough to concur on the previous amendment. If your Lordships look at Clause 122(1), you will find that towards the end of the subsection there is a reference to,
"the state of affairs of the association, so far as its housing activities are concerned, and of the disposition of funds and assets which arc, or at any time have been, in its hands in connection with those activities".
The purpose of this amendment is to leave out those words, and to substitute:

("(a) the state of affairs of the association;

(b) the source and application of funds;

(c) so far as the housing activities are concerned its surplus or deficit during the financial year").

The clause as drafted presents certain difficulties. In the first place, there is no requirement for the revenue accounts to show a true and correct view, which in all the circumstances is generally felt to be desirable. Secondly, the requirement that the balance sheet, or the state of affairs and the source and application of funds statement should show a true and fair view is restricted to the association's housing activities. Here we are up against a difficulty. If as part of the

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accounts one is to present a balance sheet which comprises a statement of the assets and liabilities, together with particulars of funding and reserves, in the case of a charity or an association having activities which partially relate to housing activities, it is not possible to separate assets and liabilities relating to those specific activities, which is what the existing clause as drafted requires us to do. This is also true of the source and application of funds statement which shows, broadly speaking, the movements in assets and liabilities between balance sheets at different dates. The third difficulty is that the reference to the disposition of funds and assets would be far more in accordance with current usage if it were to be replaced by a requirement for a source and application of funds statement.
So it will be observed that that part of the clause that the amendment seeks to delete and to replace with the words proposed is not really possible of achievement. It is not possible to segregate a balance sheet, or an account of which a balance sheet is a part, showing the separate housing activities. Of course it is always possible to show a revenue account, and it is possible to say whether there can be a true and fair view established as regards that revenue account. But when it comes to dealing with the specific allocations of assets and liabilities of the organisation as a whole to this particular branch of its activities, that is quite impossible. I suggest that the words in the amendment are much more appropriate.
I realise that in saying that I am entirely in the hands of the Government. For reasons that I previously explained, I should not wish to force this matter to a Division; that would not be appropriate for what is an entirely non-party issue. It would place all Members of the House, particularly those at present absent from the Chamber, in an entirely impossible position. That may give the noble Lord, Lord Mowbray and Stourton, some cause for modest serenity over the whole question. So I venture most courteously to draw his attention to the fact that even though it may not be possible to bring the matter to a Division, his statement in reply to mine is likely to be faithfully reproduced in the professional accountancy and legal press, and that in the event of the Government being unable
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to accede to what is a purely technical matter in order to clear up a legal complexity that would otherwise arise, the accountancy and legal professions would then be in a position to form an independent judgment of their own. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, first, I can assure the noble Lord, Lord Bruce of Donington, that I have very little modest serenity when speaking to experts on their own subject. I know my limitations only too well, and chartered accountancy has always been a subject on which, I hate to say, I am not an expert; I wish I were.
I am most grateful to the noble Lord for having explained the intention behind this amendment. As he said, its most important effect would be to widen the scope of Clause 122 so that the Secretary of State would be able to lay down accounting requirements on matters not connected with housing. At present, the only part of the requirements in Clause 122 and Schedule 16 that could involve non-housing activities is that relating to associations' balance sheets, which cannot be split up between various activities of an association.
One of the significant results of widening the clause in this way would be that the Housing Corporation could become involved in the examination of documents, other than balance sheets, not related to an association's housing activities. The Government believe that these would be unnecessary and undesirable effects, and certainly not ones that should be legislated for in a housing bill. I am glad to be able to reassure the noble Lord that our legal advice is that the requirement in Clause 122 for a true and fair view to be given of an association's affairs does indeed cover the production of revenue accounts.
The noble Lord also referred to the phrase "disposition of funds and assets". It is always possible, I am told, to argue that this or that bit of a statute might, with advantage, be differently drafted. We can only say that the present wording seems to us to be perfectly clear, and leaves no room for doubt. I appreciate the fact that the noble Lord has warned me that the words will be taken down and looked at very carefully, so I shall say no more than my brief allows me to say.
Lord BRUCE of DONINGTON: My Lords, I am very sorry indeed, of course, that the noble Lord has not seen fit to accept the amendments that have been laid before the House. In the course of his remarks he referred to parliamentary draftsmen. The profession of parliamentary draftsmen is one for which every Member of this House must have the most profound respect. Nevertheless, if the judgments of the Divisional Courts, of the appeal courts and of the House of Lords sitting judicially are to he taken into account on a whole series of matters, it is quite clear that over a considerable field and in quite a significant number of important instances parliamentary counsel have not always been beyond reproach in their drafting. I need refer the noble Lord only to certain aspects of the income tax Acts and the subsequent Finance Acts which have been commented on unfavourably from time to time, particularly in regard to their draftsmanship, by noble and learned Lords who sit in this House in their judicial capacity. I will merely hazard the view, therefore, that it may well be that in due course criticisms may be made of the parliamentary draftsman in this case. Nevertheless, I am indebted to the noble Lord for his courtesy, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The DEPUTY SPEAKER (Lord Airedale): My Lords, with the leave of the House, I could put a single Question as to Amendments Nos. 107 to 109H.
Lord MOWBRAY and STOURTON: My Lords, with great respect, can we leave Amendment No. 109 out, please?
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendments Nos. 107 and 108:
Page 89, line 38, leave out ("and balance sheet").
Page 90, line 2, leave out ("balance sheet").
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 109:
Page 90, line 15, leave out from ("shall") to ("be") in line 16.
The noble Lord said: My Lords, I beg to move Amendment No. 109, which refers to page 90 of the Bill, Clause 122, and seeks to leave out the following words:
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"in respect of its housing activities (and separately from its other activities, if any)…".
The reason why this amendment is moved is that there would seem to be conflict with paragraph 2(1)(b) of Schedule 16 to the Bill. If your Lordships will kindly look at paragraph 2(1)(b) of Schedule 16, which is at page 142 of the Bill, you will find that the charity is required for each period of account to prepare,
"a balance sheet giving a true and fair view (as at the end of the period) of the state of the charity's affairs";
whereas subsection (5) of Clause 122 seeks to narrow this to:
"in respect of its housing activities (and separately from its other activities…".
The two would appear to be in conflict with one another, and I therefore beg to move Amendment No. 109, to delete the appropriate words from subsection (5) of Clause 122.
Lord MOWBRAY and STOURTON: My Lords, I am again grateful to the noble Lord for explaining the meaning and intention of this amendment. I am pleased to be able to reassure him, having checked the position very carefully with our advisers, that we are satisfied that the present wording of Clause 122 meets the point which he has raised. On Clause 122, I hate to say it to the noble Lord (he is being so kind and nice) but we think it would be unhelpful and (again, I hate to say it) undesirable. I should explain that the words we are concerned with do not rigorously constrain the scope of Schedule 16, to which we shall be coming in a moment: rather they provide an indication of what the reader will find when he turns to the schedule.
The schedule's requirements, as implied by Clause 122(5), are concerned first and foremost with housing activities. Indeed, the only reason why the schedule needs to embrace any other activities at all is that some associations will have balance sheets which are not confined to housing and which have to be read as a whole. In view of this, we see no need to delete these words. Indeed, we think that to do so would be unhelpful to those less familiar with these provisions than the noble Lord.
The DEPUTY SPEAKER: My Lords, does the noble Lord desire to withdraw the amendment?
Lord BRUCE of DONINGTON: My Lords, I note that the noble Lord does not consider that the amendments would be helpful. I am not quite sure which body is going to be helped by the retention of these words, but I am quite confident that if any litigation should ever arise on this clause possibly learned judges may feel constrained to observe that it might have been well to have clarified it on the lines that I have ventured to suggest to your Lordships. I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 123 [Enforcement of s. 122:]
The DEPUTY SPEAKER: With the leave of the House I could put into a single Question Amendments Nos. 109A to 109H.
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendments Nos. 109A to 109H:
Page 90, line 34, leave out ("and balance sheets")
Page 90,line 38, leave out ("and balance sheet")
Page 90,line 44, leave out (",balance sheet")
Page 142, line 42, leave out ("and balance sheet")
Page 143, line 29, leave out ("and balance sheet")
Page 143,line 32, leave out ("accounts give") and insert ("revenue account gives")
Page 143,line 46, leave out ("and balance sheet")
Page 144, line 2, leave out ("or the balance sheet").
8.29 p.m.
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 110:
Page 144, line 7, leave out from ("and") to ("and") in line 9 and insert ("accounts and all other documents of the charity;").
The noble Lord said: This is another amendment that seeks to put the clause into some kind of form in which it will not be contradicted elsewhere in the Bill. It will be observed from the amendment that it is desired to eliminate the words,
"and to all other documents relating to those activities"
from paragraph 5(3) of Schedule 16, and to substitute the words,
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"accounts and all other documents of the charity".
My Lords, this clause gives the auditor the right of access to the various books and documents which he is entitled to see. But if one looks at paragraph 4(2)(b) of the same schedule one finds that the auditor's report shall give an opinion as to whether in the auditor's opinion the balance sheet gives a true and fair view of the state of affairs of the charity as at the end of the period of account. Yet, paragraph 5 only gives him the right of access at all times to the books, deeds and accounts of the charity so far as relate to its housing activities.
The duty imposed on the auditor by paragraph 4(2)(b) gives him a responsibility over the charity as a whole. Paragraph 5(3)(a), as at present drafted, only gives him the right of access to the charity's activities as far as its housing activities are concerned. The two are in conflict. If the auditor has a duty to give a true and fair view of the state of affairs of the charity, clearly he must be entitled to access to all the books, accounts and documents relating to that charity rather than being restricted merely to those which relate to the housing activity. I should have thought that the logic of that, even though it may have been enunciated in professional terms, is clear enough to your Lordships. I therefore hope that the Government will seek to remove this blatant contradiction and accept the amendment.
Lord MOWBRAY and STOURTON: My Lords, once again I have to stand up and risk the censure of the noble Lord opposite warning me of what will happen in legal cases to come when the Government's advice on this Bill has been proved wrong. I can only say that his legal and financial advisers, who, I am sure are the most eminent of men, are in conflict with the legal and financial advisers who are advising us. Therefore, I have to put to the noble Lord and the House what our advisers, despite having had the advice of the noble Lord, still persevere in advising.
I am told that I can assure the noble Lord that his amendment to paragraph 5(3)(a) to Schedule 16 is unnecessary. The reason here is quite simply that paragraph 5(3)(b) will allow the auditor to obtain any information which he needs

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to carry out his duties. It follows that if any of those duties touches on an association's non-housing activities, he can apply to the trustees or officers of the association to provide the relevant information. That is the advice I have to give.
Lord BRUCE of DONINGTON: My Lords, I am grateful to the noble Lord. I am quite sure that many members of my profession will be grateful for his explanation and assurances. The assurances have been so specific that I am still a little at a loss as to why they could not be incorporated in the Bill itself. Nevertheless, I can hardly carry the matter further, for the reasons I have already described. I would thank the noble Lord for his courtesy and his department for the courtesy that they have shown to representatives of the accountancy profession with whom these matters have been long discussed. I beg leave to withdraw the amendment.
Lord HYLTON: My Lords, before the Question is put, may I say that the charitable housing associations in particular are extremely grateful to the noble Lord for the care, consideration and thought which he has put into drafting these amendments and in moving and speaking to them.
Amendment, by leave, withdrawn.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 111:
Page 146, line 5, at end insert—
("(6A) Nothing in this section prevents the grant or renewal of a tenancy by an association whose rules restrict membership to persons who are tenants or prospective tenants of the association and preclude the granting or assignment of tenancies to persons other than members.")
The noble Lord said: Schedule 16 to the Bill which bans fee earning or duality of interest for housing association committee members, prevents associations granting tenancies to committee members or their close relatives; although it does not prevent existing tenants from becoming committee members. This satisfactorily prevents a possible abuse as far as the great majority of housing associations is concerned. It raises a problem, however, for fully mutual co-operatives where all members must be tenants or prospective
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tenants, and in the co-operative's development stages, at least, the founder members must envisage granting themselves tenancies. This amendment removes that anomaly by ensuring that fully mutual associations can grant tenancies to members. I invite your Lordships to accept the amendment.
8.36 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 112:
After Clause 125, insert the following new clause:
("Removal of certain housing associations from register
.—(1) In section 15 of the 1974 Act—

(a) after subsection (2) there is inserted the subsection set out below; and

(b) in subsection (6) for the words this section "there are substituted the words" subsection (2) above.

(2) The subsection inserted after subsection (2) is:—
"(2A) Where a body which is registered—

(a) has not at any time received a grant under section 29 or section 32 below or any such payment or loan as is specified in paragraph 2 or paragraph 3 of Schedule 2 to this Act; and

(b) requests the Corporation to remove it from the register;

the Corporation may, if they think fit, remove it from the register."").
The noble Lord said: My Lords, your Lordships may know that the Housing Corporation has only very narrow powers of de-registering housing associations under the Housing Act 1974. These, in effect, apply only when an association is no longer operating as such. The sort of circumstances in which these new powers of voluntary re-registration would be of benefit mainly involve housing associations whose registration has always been unnecessary or inappropriate. When the 1974 Act first came into effect, the corporation registered a number of associations which continue to exist but whose activities are untypical of those of a registered housing association. Such associations will not have received public money in the form of housing association grant and probably have never had any intention of applying for grant. The registration often stems simply from a lack of understanding of the purpose of registration in the early days of the Act. They remain on the register simply for want of a

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power to remove them. This clause enables associations which have not received public money to be de-registered with the corporation's consent. That consent is necessary to ensure, for instance, that an association does not de-register in order to avoid an inquiry into its affairs. I invite the House to accept the new clause.
8.38 p.m.
Baroness VICKERS Baroness VICKERS moved Amendment No. 113:
Page 92, line 29, leave out ("for any period") and insert—
("until such time as an amount equivalent to the original grant has been redeemed".)
The noble Baroness said: My Lords, I understand that this Bill is required to register the housing associations to service the grant redemption fund in their statutory accounts. This fund will, I suggest, show many surpluses derived from schemes which have been subject to the housing association grant. Such services will arise when the rental income is greater than the combined costs of the management and maintenance and loan repayments. The Secretary of State, I understand, is given the power to specify the uses to which monies may be shown in this fund which may be appropriate, with interest to any sums standing in this account. With the conception of the grant redemption fund—and this I gather was introduced by the previous Labour Government in their Housing Bill—it was considered by the Federation of Housing Associations, and they debated the principle at that time of the Government particularly having to claw back surpluses deriving from the housing association grants; in other words, what is known as the HAG subsidy.
It is recognised that there are some schemes where the management and maintenance costs are particularly low and fair rents are particularly high. This will make remarkable surpluses in years to come and the organisations concerned may have no other unprofitable schemes. I should like to suggest that any plans related to this activity could absorb these monies. I appreciate therefore that the Government may need to exercise control over surpluses from the HAG schemes in certain circumstances. I also recognise that some local autorities may turn
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envious eyes on this grant system claiming that it is more generous than their own and that the Government Ministers may wish to demonstrate that there are other opportunities available to them to prevent the associations accumulating private fortunes.
I also accept the point put forward by the Department of the Environment that if associations have access to revenue deficit grants in their bad times, the Government could justify seeking some replayments of surpluses in good times. These various arguments do not lead to the conclusion that surpluses accumulated on the HAG schemes should in normal circumstances be returnable—this is the point I want to make quite clear—to the Government. I do not see that it is objectionable that such surpluses should be accounted for by means of grant redemption funds nor that the Government should keep a watchful eye over spending of such surpluses; but I must ask the Minister to make it clear that only in exceptional circumstances will these surpluses be clawed back. Grants were given, I suggest, and received in good faith; in order to secure them, associations have had to comply with a long list of requirements. Associations have carried out their responsibilities in these contractual relationships and Government have no right, retrospectively, to convert a grant into a repayable loan.
The NFHA policy, therefore, is that, in the fact of constant calls for "accountability" by the Public Accounts Committee and others, a grant redeption fund is not objectionable in principle. However, only in those cases where associations are unable to demonstrate that the funds shown in this account cannot be used constructively for forwarding the objects of the association, should Government require them to be paid back. It would be of the greatest help if the Minister is able to give us some reassurance that the intention is not sequestration of the monies in the GRF but that this is a mechanism for ensuring such surpluses are wisely spent.
I am worried about the open-ended nature of the "fund": it appears that the present wording of Section 113(1) indicates not just the "redemption" of the original grant received but a continuing

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requirement for surpluses to be controlled by this GRF. In other words, as I understand this Bill, the Secretary of State has no discretion ever to stop the transfer to the GRF of income—even though the word "redemption" clearly implies that, when the grant has been redeemed, no further transfers would be necessary. It would seem very unfair for an association to go on transferring income from HAG schemes into the GRF for years after the full amount of grant had been redeemed.
So that in place of saying that surpluses shall be shown separately in the association's accounts "for any period", substitute the words:
"until such time as the Secretary of State determines that the grant has been redeemed".
If the Government cannot accept this amendment, it would at least keep the door open for further debate on the issue if the substituted words read,
"until such time as the Secretary of State shall determine".
The Federation has had to accept the concept of the grant redemption fund which takes the unprecedented step of considering that a grant can be regarded as a loan, but it is unfair in any circumstances, that the further implication that Government could be in the position of requiring payments not just of the original grant (with interest if necessary) but of further sums: this turns the original grant not even into a loan but into an investment by the Government. I believe it was not the intention of any Government to consider payment of HAG as a profit-making exercise and, even at a time of economic difficulty, for Government to seek such powers contravenes all the rules governing behaviour between two parties to an agreement. I beg to move.
Lord MOYNE: My Lords, in rising to support the amendment of my noble friend Lady Vickers I hope that, under this unaccustomed—but I hope reasonably stable ceiling—I am reasonably audible. I will at least be reasonably brief because many of the arguments which I used at the Committee stage in
moving what is now Amendment No. 115 apply very much to the amendment of the noble Baroness. The noble Lord, Lord Bellwin, in foreshadowing the assurances he intends
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to give to charitable housing trusts has very fairly said that:
"surpluses arising from individual projects will only be recovered or directed in so far as they reflect the input of housing association grant".
The amendment of the noble Baroness would give statutory recognition to this principle, not only for charitable trusts but also very properly and equitably to the whole housing association movement.
If it be argued that the grants were more valuable in terms of present money values when given in 1974 or subsequently, I would say that the grants are still there in the bricks and mortar they were intended to bring together, thus fulfilling their purpose. But if the Minister should feel that inflation needs to be taken into account, it would, after all, be open to him, if he accepts this amendment, or has it pressed successfully upon him, to introduce an amendment to this amendment on Third Reading, authorising repayment up to the original value but computed to take account of inflation. Myself, I think that would be wrong because the bricks and mortar are still there fulfilling their purpose; but, either way, I hope the Minister will accept the amendment.
Lord HYLTON: My Lords, I wish to support this amendment so clearly moved by my noble friend Lady Vickers. The essence of this amendment is the question of time. What we are anxious to do is to prevent a perpetuity arising in favour of the Government and the Exchequer by inadvertence or by accident. Beyond that, I would say that I hope that on many occasions where such surpluses arise the Government will see fit to leave them in the hands of the association where the surplus is, given, of course that the Government are satisfied that that association can make a really good use of that money in the public interest.
Lord BELLWIN: My Lords, my noble friend Lady Vickers will appreciate that on the vast majority of recent schemes housing associations have provided no money of their own whatsoever. The costs of the schemes have been covered by housing association grant supplemented by loans to be serviced out of rental income. It was never the intention of housing association grant that it should put an association into surplus, and I am sure at the time when grants have been

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given initially the housing association movement never expected that it would be so.
This is likely to happen in future as a result of rent increases, particularly as the Bill is removing the out-dated 75p a week limit on housing association rents. While this is happening, loan repayment will remain constant in money terms and a gap will develop between income and expenditure the effect of which may be that housing associations will accrue large and fast-increasing surpluses generated entirely as a result of public funds. Associations may not have a sufficiently forward programme to put the surpluses to good use. May I say here, in case there is any misunderstanding about this, that the Secretary of State is not, and will not be, obliged in all circumstances to recover surpluses. He can, and undoubtedly sometimes will, simply direct their use. I cannot accept, nor could the Public Accounts Committee, that retention of these benefits would represent proper handling of public funds. Of course, where surpluses arise as a result of an injection of private funds to whatever degree in a project which has received housing association grant, I have already said, and no doubt will say again later on, that the surpluses will be recovered or directed by the Secretary of State, only in so far as they reflect the input of grant.
We shall ensure administratively that surpluses reflecting charitable endowments can be retained by the association with no strings attached—and I repeat, "with no strings attached". I do not accept that it can be said that the Government have no right to take back this money. We are talking about surpluses which accrue from public money and which accrue for the reasons I have given. I hope that we have made it categorically clear that the question of private funds is in no way affected. I frankly do not consider it to be unfair. I do not think—here I choose my words carefully—that it would be in the interests of the housing association movement, in which so many of us have believed so much for such a long time and, as I have said before so many of us feel will play a greater part in the future in housing than it may ever have done in the past. Certainly it has the potential. But I think if we reached the point where surpluses which
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accrued in this way as a result of the injection of public money could not reasonably be recovered, if it was felt appropriate that they should be so recovered, or even put to use as the Secretary of State such as he might direct, I think it would do the housing association no good at all, and that is not what any of us want.
I cannot accept the amendment, and I hope that my noble friends, whose views on this I respect—and of course I do not come fresh to this tonight because we have had some correspondence and much discussion together since I have been anxious to try to assure them of the equity of what we are proposing,—might have felt that that would be so. In view of what I have said—and no doubt in one way or another we shall be talking about this further in respect of other amendments-I hope they may feel able to withdraw their amendment.
Baroness VICKERS: My Lords, There is one point that I should like to raise with the noble Lord. My amendment envisages paying back the amount necessary. Would he be kind enough to let us know in due course how that is to be dealt with?
Lord BELLWIN: My Lords, by leave of the House, I am not absolutely clear as to the precise point the noble Baroness is making but I will undertake, as I always do, to take it away and look at it. I cannot go further than that at the moment.
Baroness VICKERS: My Lords, on that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness FAITHFULL Baroness FAITHFULL had given Notice of her intention to move Amendment No. 114:
Page 92, line 31, after ("projects") insert ("other than hostels").
The noble Baroness said: My Lords, I spoke to this amendment at Committee stage, and since then I have had a most helpful letter from the Minister. In view of that helpful letter, and with his assurance to the noble Baroness, Lady Vickers, I shall not move the amendment.
8.54 p.m.
Viscount BOYD of MERTON Viscount BOYD of MERTON moved Amendment No. 115:
Page 92, line 32, at end insert—
("Provided that in the case of a Housing Trust which is a Charity within the meaning of the Charities Act 1960 any such surplus shall be divided in such proportion that the Capital Value of the Trusts Assets on the 18th of September 1974 bears to the total Housing Association grant payable to it by the date of the passing of this Act and only that part which is proportionate to the Housing Association grant payable shall be shown in its Grant Redemption Fund; the balance, being proportionate to the Trusts own assets shall be retained in the Trusts accounts as a General Revenue Reserve available for any of the Trust's objects.")
The noble Viscount said: My Lords, I beg to move the amendment standing in my name and in the names of my noble friends and of the noble Baroness, Lady Denington. I am sorry that the wording of the amendment is complicated and rather daunting, but the problem is really a simple one. A broadly similar amendment was moved at Committee stage by the noble Lord, Lord Moyne, and then withdrawn in view of certain assurances given by the Minister. I myself raised the matter during Second Reading and said that my anxieties were shared by the older charitable trusts—the Guinness Trust, a housing trust of which I am a trustee, the Peabody, the Sutton and Samuel Lewis Trusts. The House will know that the 1974 Housing Act set up housing association grants, now referred to in a rather unfelicitous but, I hope, not an ungrateful way as HAGS. But long before this Act was passed, a number of the older charitable trusts had very considerable holdings of land and buildings—some thousands of properties in the case of a number of them—and these particular holdings have been very little if at all affected by housing association grants. These assets will earn future higher rental surpluses, independently of surpluses generated by HAGS. It seems to us surprising that the whole of these future surpluses should be placed in the new grant redemption fund of each trust. Once in this trust, all monies will be subject to the complete control of the Secretary of State. There is another important point. The object of some of the older trusts, including the Guinness Housing Trust, include purposes in addition to housing and surpluses that arise in that way should surely not be regarded as
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general housing association grants and then be automatically placed in a grant redemption fund.
I am very grateful to the noble Lord the Minister, whose housing record is supremely good and who is much trusted by charitable institutions and everyone else. He made certain helpful observations at Committee stage, and since then has been good enough to write to me and to have a talk with me. His statement on Committee stage recognised the arguments of the older charitable trusts, and he told your Lordships that he would be looking for a formula which would account fairly for the funding involved and would allow for the surpluses I have mentioned to be retained by the association and trusts. Those of us with anxieties do not suggest that surpluses arising on any projects which have received housing
association grants should be excluded from the grant redemption fund; nor were we intending to suggest that surpluses should not be divided. Our intention was that for relevant projects the surpluses which would have to be calculated in any case should be divided before they were transferred into the Grant Redemption Fund and only that part that was generated by HAGS should go into the Grant Redemption Fund.
That seems to us to be a much more acceptable and simpler way than putting all the surpluses on every HAG scheme into the fund and having to rely on a subsequent direction by the Minister, allowing the trust to share back from the fund into the trust's general revenue reserve. The Minister has assured me that the formula he is seeking will ensure administratively that surpluses arising on individual projects will be recovered or directed only in so far as they reflect the input of housing association grants. He has added that so far as private funds are concerned, it is intended that the Secretary of State will use his directive power to ensure that surpluses arising reflect that input can be retained by the association or trust and, as he said tonight, "With no strings attached".
We are very grateful for these assurances, but I confess that I should be very much happier if they could be embodied into the Bill. I remember, with some thirty years' experience of another place and nearly twenty years in this House, how

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much more difficult it has proved in the past for a future Minister to escape from an undertaking given by a predecessor, if the undertaking has been written into a Bill, rather than left as a ministerial undertaking. But knowing in what respect the Minister is held in housing circles, and happily conscious that the noble Baroness, Lady Denington, has put her name to my amendment, I hope that I shall be satisfied when I listen with keen interest to what the Minister has to say. My Lords, I beg to move.
9 p.m.
Baroness DENINGTON: My Lords, I am very happy to support this amendment fully. I am most grateful for the statement that the noble Lord, Lord Bellwin, made a few minutes ago about the protection of charitable funds, because a principle that everybody in this House would want to stand by is that those funds should be protected. But I support very strongly the point that it is a great safeguard for the future if we can have this amendment embodied in the Bill. Following the Minister's statement here, we can trust the present Government, but who knows what Government will follow? One cannot be too careful on this matter. Since the Government accept what we are putting forward, is it necessary for us all to go trooping into the same Lobby, which would be lovely, or will the Government just accept the amendment and embody it in the Bill, and then we can all rejoice?
Lord HYLTON: My Lords, in rising to support this amendment, I should declare an interest in that I am chairman of a small housing association which has already received a very limited amount of HAG. I should first like to thank the noble Lord the Minister for the very helpful remarks that he made earlier on Amendment No. 113, which bear on this amendment of my noble friend Lord Boyd. The essence of this amendment is the idea of apportionment, and I wonder whether I could give some instances of the kind of case where apportionment is so much needed.
The first is where the land on which housing has been built has been donated. The second is where part of the building costs have been donated by, for instance, charitable sources. The consequence of
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this, as I know from my own experience, can be that higher standards will have been built into a scheme than would otherwise have been possible under the old cost-yardstick system. The result of the higher standards will be a higher fair rent. In the case of some older charitable trusts, they have properties which have been modernised with HAG repair grants. But those properties were already in ownership of the organisation before the receipt of the HAG, so that the existing property contributed by far the greater part of the total asset.
Finally, I have one small administrative point which I should like to put to my noble friend the Minister, on which I hope that he can give me an assurance. It concerns the calculation of the grant redemption fund. Can he assure us that it will not be necessary to go into all the complications of calculating the GRF, when an association is in overall deficit, which can clearly be shown when, for instance, that association is receiving revenue deficit grant. If my noble friend can give that assurance, it would be extremely helpful and would save a great deal of abortive and unnecessary administration in the future.
Lord BELLWIN: My Lords, to take up the last point made, I do not feel that I am able to give the assurance that my noble friend requests. After all, I suppose it is not impossible to envisage a situation where an association was in deficit for all kinds of reasons, and yet was in surplus so far as the funds which had come from grants were concerned. However, it must surely be a comfort to know that, if that were the eventuality, any Secretary of State would surely have to take that into account. But I could not give an assurance at this stage.
I was interested in what the noble Baroness, Lady Denington, said. I wonder whether I have more confidence in what a future administration that she supports would do, than she has. But I do not think that we should cross that bridge till we come to it. Some of us hope that it will be a long time before we come to it and, if that be so, then there will be no problem. I am sure that she has confidence in her ability to influence events at that time.
As I said on the previous amendment, I cannot accept that surpluses arising on

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any projects which have received Housing association grant should be excluded from the grant redemption funds. I believe it to be a matter of accounting discipline that these surpluses should be identified. Nor can I accept the notion that surpluses should be divided on the basis of the proportional relationship between a charity's total assets and the total amount of grant paid. The effect of this would be that, even on projects which were provided entirely with housing association grant, only a proportion of the surpluses arising would come with the grant redemption funds.
However, I very much appreciate the importance of charitable endowments in the activities of many associations, particularly as my noble friend Lord Boyd said, the older housing trusts, and I can again assure noble Lords that, as I said during the discussions in Committee, we shall be seeking a formula to ensure administratively that surpluses arising on individual projects shall be recovered or directed only in so far as they reflect the input of housing association grant. So far as private funds are concerned, the Secretary of State will use his direction power to ensure that surpluses which reflect the input of those funds can be retained by the association or trust—and I say it again—with no strings whatsoever attached.
When considering the manner in which surpluses are to be calculated and the treatment of those surpluses, we shall be consulting representatives of the charitable trusts, because of the specific points that have been raised on the treatment of charitable endowments. I recognise clearly the keen concern that exists among the charitable trusts—and it is right that they should be so concerned—to ensure that whatever formulae are reached in calculating, in apportioning, in directing or whatever, this is something into which they should have an input. I am very happy to confirm again that we would want them to be putting in that input. I think this is the right approach. In view of that, I wonder whether my noble friend will feel able to withdraw the amendment?
Viscount BOYD of MERTON: My Lords, it was never my intention to take this motion on the amendment to a vote,
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but I would make one plea to the Minister: that so often when money is paid back to people to whom it belongs there are long delays before the payments are made. I very much hope that this will not be the case in this particular problem.
Amendment, by leave, withdrawn.
Clause 131 [Working balance in Housing Revenue Account]:
9.9 p.m.
Baroness DAVID Baroness DAVID moved Amendment No. 116:
Page 94, line 24, leave out from ("of") to fourth ("the") in line 25 and insert ("the Housing Repairs Account").
The noble Baroness said: My Lords, this is an important amendment which was not moved at the Committee stage because of the pressure of time late at night. We think that public housing should not seek to be profit-making. It has been a long-standing principle that rents within an area are pooled. This means that existing tenants pay rent increases to help meet the cost of providing new houses. We do not want tenants to subsidise the general rates. Some may say that because on other occasions rate fund contributions have gone to housing revenue accounts there should now be no objection to that process being reversed.
Quite apart from the principal objection to that argument, in 1979–80, 180 authorities did not make any voluntary rate fund contribution to housing revenue accounts. At the beginning of this financial year, working balances in those accounts totalled some £70 million. It is precisely those authorities which had previously declined to make any rate fund contributions which are now most likely to be able to turn their working balances into profits for the general rate fund. I wonder whether the Minister is listening to what I say?
Lord BELLWIN: My Lords, I am very much listening to what the noble Baroness is saying.
Baroness DAVID: Good! Just one example taken from a set of statistics for 1979–80 shows that in that year South Shropshire, which is an independent council, expected to retain a working

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balance of some £240,000, which is over £100 per dwelling. In other words, they could have charged rents of £2 a week lower without incurring any loss. Neither in that year nor in each of the two previous years did they make any voluntary rate fund contribution. It may be said that the profits from rents, by reducing the need to raise the rates, will help to keep down the cost of public expenditure. We object to this in principle but we look at this, too, in the context of the public expenditure plans for housing. Profits from rents going to the rate fund do nothing at all to reduce public expenditure on housing, so the Government are proposing that these profits should be taken away from housing on top of the reduction of £2 billion in public expenditure on housing.
This amendment seeks to prevent such profit-making, but to allow any balances from housing revenue accounts to be transferred to housing repair accounts. Let us look forward a few years. It is those authorities with little housing need and a fairly old housing stock which are in the easiest financial position. However, this in turn means that before long they will face higher costs for repair, modernisation or even replacement. It would be sensible housekeeping to set money aside for this in the housing repairs account over a period of years until it is needed. Until then, it could be "borrowed"—I put that in inverted commas—by authorities and thus still help to reduce the public sector borrowing requirement without being lost from the reduced funds to be available for public expenditure on housing. I beg to move.
Lord SANDFORD: My Lords, if I may say so with the greatest courtesy to the noble Baroness, I think that we have just heard a piece of tremendous humbug and hypocrisy. The operative word in this clause is "may". Here we have the Government giving to local authorities power and discretion to exercise their own judgment about the way in which they will combine the resources in their general revenue account and their housing revenue account. Noble Lords and noble Baronesses opposite have argued time and time again that the Government are being inflexible and are interfering in the affairs of local government. Here in this clause the Government are being less rigid,
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removing rigidities, being more flexible, giving local government more power, more discretion, and noble Lords and noble Baronesses opposite complain.
Lord BELLWIN: My Lords, I, too, really am astonished at this amendment. The noble Baroness began by saying that public housing should not be profit-making. I presume, therefore, that it is quite satisfactory to her that public housing should be loss-making; and there is plenty of evidence of that. I am not concerned with my brief on this. This was a subject which the local authorities, the local authority associations, talked about for years. The one thing they always said was that the right to decide what local rent should be, the right to decide what should be done with any surpluses from those rents, should be for local decision; and that is precisely what we are doing in this Bill.
There are authorities in the country who have annual rate fund contributions to their housing revenue accounts—in some cases well over £30 million a year—while other authorities with more public houses not only have no deficits, no rate fund contribution, but have actual surpluses. Yet here we have situations where like authorities have, on one side, massive losses which are made up for every year by their ratepayers, and, on the other side, authorities with great numbers of houses who have no such losses at all. All we are saying is that those authorities who have a surplus can, if they wish, apportion those surpluses as they want. What is the position at the present time? The position is that if one so manages one's affairs—and without charging expensive or exorbitant rents—one has a surplus, one may apply that surplus to housing purposes—that is perfectly in order—but one may not do anything else with that money.
There is no way that that can be right by any standards. What we are seeking to do in this Bill is to say to authorities, "Yours are the decisions. If you get it wrong, if you get it so that your rents are too high, you will answer to the local electorate for it. If you get it so that your rates are too high you will answer to the local electorate. But yours are the decisions and yours will be the decision to decide how you use that money". How

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can it be wrong in this day and age for us to come along and say, "From now on you have the decisions to make. We will give you the freedom to make those decisions and you will answer for them to the people who elect you"? That cannot be wrong in any way that one looks at it.
I was really rather pleased at Committee when, of all the things that were raised, this was not raised. I felt that at last there was a realisation of the fact that this is what local government and local authorities want; it has to be right, and all sides of the House recognise it. Now it rears its ugly head again. I hope that the noble Baroness will be persuaded by the arguments and will not press the amendment.
Baroness DAVID: My Lords, I am not persuaded by the arguments. I think it depends on the importance one puts on the need for public housing. Homes are extremely important, and I think this is the point. We consider that homes in good repair are important, and that is the reason we have moved this amendment. But I will not press it at this time of night.
Amendment, by leave, withdrawn.
9.18 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 118:
After Clause 133, insert the following new clause:
("Avoidance of certain unauthorised disposals
.—(1) If—

(a) at any time after 18th July 1980 a local authority or a housing association has disposed of a house; and

(b) the disposal was one which, under section 104 of the 1957 Act or section 2 of the 1974 Act, required the consent of the Secretary of State or of the Housing Corporation (or would have required it had the relevant provisions been in force but was made without that consent;

then, unless the disposal was to an individual (or to two or more individuals) and did not extend to any other house, it shall be void (and, if made before the passing of this Act, be deemed always to have been void) and section 128(2) of the Local Government Act 1972 or, as the case may be, subsection (5A) (inserted by section 121(6) of this Act) of section 2 of the 1974 Act (protection of purchasers) shall not apply.
(2) In this section "house" includes a flat and "the relevant provisions" means Part I and sections 90 and 121 of this Act.").
The noble Lord said: My Lords, during the passage of this Bill, Parliament has expressed its clear will that secure tenants of local authorities and of certain housing associations should have the right to buy. The Bill sets out a procedure for tenants to exercise that right, a procedure which is designed to ensure that this right can be confidently exercised. But we must be just as sure that the expressed will of Parliament cannot be frustrated through any loopholes in the legislation. This was bound to be a preoccupation of the Government. The attitude and statements of the Opposition were bound to ensure that. In another place, the right honourable gentleman, Mr. Kaufman, for instance, has said that though in his opinion any opposition to the Act should be conducted within the law there is no obligation on any citizen in the country to obey the spirit of the law. No doubt his view reflects that of a number of people in local authorities. Hence the effect of the law must be entirely clear, with no scope for any landlord to wriggle out of complying with the expressed will of Parliament. Hence, this new clause.
The basic purpose of the new clause is to ensure that no landlord should be able to succeed in frustrating the right to buy by disposing of some or all of its housing to some other body to whom the right to buy does not apply. The Bill in some cases by amendment of prior legislation provides for a comprehensive requirement consent both to the disposal of "Part V" houses and land and also to the disposal of land and houses by registered housing associations. This consent requirement is needed in order to simplify the present law. We have also seen it as the means to ensure that tenants whom Parliament intends to have the right to buy shall not be deprived of that right as a result of disposals to other bodies.
However, as it stands, Section 128 of the Local Government Act 1972 has the effect that if a disposal takes place without necessary consent the person to whom it is made still gets valid title. The Bill makes similar provision in respect of housing association disposals in Clause 121. We have come to the conclusion therefore that, as the Bill stands, the rights of tenants are not yet adequately protected.
The new clause deals with the problem by providing that a disposal which takes

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place without consent will be void; in other words, it will be as if the disposal had not taken place and tenants will still have their right to buy. The important exception is made, to deal with the case where an individual makes a single purchase of a house or flat. It is possible that an authority might sell or lease a house or flat and do so without consent unwittingly perhaps because it had not conformed with the terms of an available consent. Such a disposal would clearly not subvert the right to buy, and it is clearly right to protect the position of the individual purchaser in such cases.
The new clause also deals with a loophole in the present requirements for ministerial consent for the disposal of "Part V" council houses, that is the requirements which apply until the relevant part of the Bill comes into force. Under the present law, the consent requirements may not cover all possible disposals. We are not prepared to see the right to buy snatched from tenants by any landlord who might seek to get rid of his housing through the gaps and sought to make a perverse disposal in the short time that the Government hope remains before enactment. The new clause provides, therefore, that such a disposal also would be void.
My Lords, we must ensure that individual tenants have the rights which Parliament intends them to have and that these rights are not taken away. These provisions have that purpose. They apply only to transactions after the new clause was tabled. The Department and the Welsh Office have already written to all local authorities warning them of the new clause. The Housing Corporations are writing similarly to housing associations. I beg to move.
Baroness DAVID: My Lords, the Minister asked us earlier to speak rather slowly so that we might hear. In fact I found that he went extremely fast, so if I ask foolish questions I must ask him to forgive me. May I ask whether the effect of this amendment is to introduce retroactive legislation which will make any disposals by local authorities or housing associations which have occurred after 18th July null and void unless they received the consent of the Secretary of State? Also, will the Minister confirm that if this amendment is accepted, transactions which are legal today would
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become illegal once this Bill becomes an Act? Surely that is a departure from any previous legislation.
Lord BELLWIN: My Lords, may I first apologise for speaking perhaps more quickly than I should have done. One is caught up in the wish to get on with the proceedings but at the same time to consider the problems of the Hansard writers. I accept that sometimes it makes it difficult to follow some of the points and I shall try to slow down a little in future. I am not absolutely certain as to the answer to the noble Baroness. Again, as I have said before, I can give—
Baroness DAVID: My Lords, if the Minister will allow me, there really must be an answer.
Lord BELLWIN: My Lords, of course there is an answer and I was about to say that I can give my interpretation of it if the noble Baroness wishes, but I think it is always preferable for me to confirm and to write to the noble Baroness and that I gladly undertake to do. If the noble Baroness is not happy with that, then I will check this point out and will return to it even as we continue with the proceedings.
Schedule 19 [Provisions replacing sections 90 to 91A of Housing Finance Act 1972]:
9.25 p.m.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 119:
Page 151, line 41, at beginning insert ("normal")
The noble Lord said: My Lords, I beg to move Amendment No. 119 and, with your Lordships' permission, I should like to speak also to Amendments Nos. 120, 121 and 122. With this schedule we move now into the private sector, dealing mainly with the service charges in the larger blocks of flats in our cities, and in particular in Inner London, which have been causing much concern. This is not at all a party matter. We are grateful to the Government for meeting us in many respects and for improving the schedule enormously, both in another place and since it came to this House, and we are also grateful for the actons of the Inner

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London Members of Parliament, most of whom are also members of the governing party.
The purpose of the amendments is to restrict the amount of money that can be levied on tenants under the heading of "service charges" to normal maintenance and to the actual costs incurred. I readily concede that running repairs need to be done, but in some mansion blocks tenants are being asked to pay large sums in advance, sometimes two or three years in advance, for major repairs and reconstruction. Some landlords, either directly or through their managing agents, in certain blocks of flats are attempting to establish what is called a reserve fund, amounting sometimes to a very large sum, against any eventualities and even as a hedge against inflation, or so they describe it.
The effect of this is that tenants are giving the landlords an interest-free loan over and above the normal service charge for what, in many cases, should surely be capital expenditure, and the landlord has the benefit of a cash flow far in advance of what is required. If a tenant refuses to pay, he is threatened with the forfeiture of the long lease which he has bought, sometimes for a large sum; and I have seen some such letters. They may he bluff, but, on the other hand, if they are not bluff they are very worrying for the recipients. There is no control over the sums involved, amounting, sometimes, to tens of thousands of pounds—which a later amendment of mine seeks to rectify—and in some cases the landlord uses his interest-free loan to refurbish empty flats in the block which are then sold off at great profit.
The Government say that charges should be restricted to what is reasonable. But what is reasonable? If the landlord says that the roof may need repairing one day in the future and this will cost so many thousands of pounds, it may be reasonable, but what proof is there that the work needs to be done? If he wants to put Chinese silk in the communal hall in order to get a higher price for the empty flats that he is hoping to sell off, it might be at a reasonable cost for Chinese silk, although the tenants (who, of course, are doing the paying) may not want this expensive form of wall covering.
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Tenants under the Bill as at present drafted are at the whim of the landlord, who will be able to demand large advance payments for expenditure that could be proved to be reasonable in the context.
I consider that service charges should be used for normal running repairs and normal maintenance, which they always used to be until recently, and for which they are still used by many good landlords. In Dolphin Square, after it was taken over by Westminster Council when it was under threat of being taken over by some of these offshore property companies, there have been no problems of this kind. So it can be done. Any other major structural repairs, general refurbishing of empty fiats and so-called reserve funds should be, I submit, a capital liability for the property company concerned. What I have described is by no mans universal practice. There are, of course, many good landlords, but there are, I regret to say, some bad ones; and it is to give tenants the extra protection over and above what the Government have already rightly given them that I have ventured to put down these amendments. I beg to move.
9.30 p.m.
Lord BELLWIN: My Lords, I am grateful to the noble Lord for raising once more this question of advance payments. I think our objectives are very much the same, and, as the noble Lord was kind enough to say, we have had some discussion on this matter since the Committees proceedings; we have talked about the difficulties of adopting any approach which is different from that now laid down in the schedule.
As I have said before, there is no question of party politics here. We want to try to get the law right so that it operates fairly for both landlord and tenant and promotes good management of blocks of flats. It may be helpful to your Lordships if I explain the background and the view we have reached. First of all, it has been common practice for leases of flats to provide for some part of a service charge to be paid on an interim basis. This is meant to contribute to such items as porters' wages, cleaning the common parts and fuel costs. If a landlord could only claim for such items once a year after he had paid for them out of his own pocket, his financing costs would

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clearly be very substantial. Without doubt they would be passed on to the leaseholder as a legitimate cost of providing services.
A second practice, which is not as general as interim payments but is certainly not uncommon, is for a lease to require contributions to a sinking fund for major repairs which occur only infrequently, such as the replacement of roofs, boilers and lifts. The object is to save leaseholders from being faced out of the blue with very large bills and instead to spread the cost over the years. Here again we have a very reasonable concept which, if fairly operated, will be in the interests of leaseholders. Neither this Government nor, as I understand it, any previous Government of either party have taken the view that interim payments or contributions to sinking funds should be entirely banned and that the provisions of leases giving effect to these should be made void. Nevertheless, the High Court in the very recent case of Frobisher v. Kiloran took the view that the provisions made about service charges by the Housing Act 1974 were so worded as to make a requirement for advance payments in that case not lawfully enforceable. The court was not, of course, concerned with the merits of the issue but with the interpretation of the statute and the facts of that particular case.
It was not the intention in 1974 to ban advance payments. Indeed, it has never been the purpose of these statutory provisions to try to rewrite leases. Their purpose has been, and still is, to provide rights of consultation and information as a prelude to a possible challenge to what is being charged. For this reason, the present Schedule seeks to reverse the effect of the Kiloran judgment in so far as it interfered with provisions of leases on the subject of interim advance payments. In no way does this give landlords carte blanche to levy whatever advance payments they wish. They can operate only under the provisions of the lease. If a lease provides for interim payments of £100 per year, that is all that can be demanded. I utterly repudiate the idea which has been put about that in restoring the legal position to pre-Kiloran we are innovating in favour of landlords.
Now as I understand the noble Lord's position, he accepts that some interim
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payments, such as those contributing to staff wages, are reasonable and should not be banned, while others, relating for example to major building works, should be recoverable only after the work has been done. If we accepted this, it would certainly outlaw sinking funds, which could mean very heavy bills facing leaseholders with little prior warning. However, leaving that aside, I think we have to recognise that in these days of inflation and high interest rates stage payments are not an uncommon or necessarily unreasonable feature of major building contracts. Quite apart from the drafting difficulty of distinguishing between major and minor works of repair, I can see objection to banning interim payments by tenants until the whole of a job has been completed.
My Lords, notwithstanding these difficulties, we have included in the schedule an amendment made in Committee which gives leaseholders in addition to their protection under the terms of the lease the opportunity to challenge any demand for advance payment which is unreasonable, notwithstanding the express provisions in the lease. This, I accept, is a broad brush approach, but given the variety of purposes for which advance payments can be made I think it is the only practical way of giving leaseholders an extra line of defence.
As always, I listened carefully to what the noble Lord, Lord Strabolgi, said, and he made a fair point—what is reasonable? I agree that it is considered unsatisfactory that the courts should have to decide what is reasonable, and if one does resort to the point where it is the courts who have to decide, it is in my view usually a sad situation. Nevertheless, it is, if you like, a term in which the courts now have very considerable experience and there is any amount of precedent, albeit not in every particular instance.
I hope that my explanation will, at least to some extent, have reassured the noble Lord. Certainly I think he knows of the Government's concern and of our desire to do what is practical to help. I have not, perhaps, gone into as much detail as the noble Lord might have liked on his amendment, but I am bound to say I could not advise an acceptance, however kindly disposed I felt, because I think it would cause considerable uncertainty, and this is a great difficulty.

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This is not an area of great principle as such; it is a problem. It is a problem for the people, the landlords, the tenants, the management—it really is a problem all round. If the noble Lord, as he has been seeking to do recently, can come up with—what was it Matthew Arnold said? —"a spark from heaven", then we would be glad to know of the spark that would perhaps lead us on to better ways of doing these things. I think the noble Lord knows my position here, I am anxious to help; I do not think we have the answer here.
Lord STRABOLGI: My Lords, as the noble Lord has said, this is a problem. Of course, one of the troubles is that many of these leases were signed some years ago with standard wording which was used in more spacious—should I perhaps say, more gentlemanly—days when these blocks of flats were owned by old family trusts and so on. There was never any problem. But now the wording is being interpreted in a most ruthless way to extort all sorts of sums, large sums from tenants, and I have seen some of these letters. They are threatened with the forfeiture of their lease if they do not pay.
The noble Lord says they should go to court, but that is a time consuming matter. This is a big subject, and I know the noble Lord is sympathetic. I hope the department will study it, and, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 120 to 122 not moved.]
9.38 p.m.
The Earl of HALSBURY The Earl of HALSBURY moved Amendment No. 123:
Page 152, line 4, at end insert—
("(3) This Schedule shall have effect notwithstanding anything to the contrary contained in any lease or tenancy agreement which makes provision for payment of a service charge.").
The noble Earl said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. I would also like your Lordships' permission to make a brief reference to my other amendment, No. 129A. Both these amendments
332
are in the same form as that in which I withdrew them in Committee, following an undertaking by the noble Lord the Minister to examine my points very carefully and write to me. As a result of that, I am happy to assure him that if he successfully pilots through his own amendment to paragraph 12—I think it is No. 129—I shall not move my Amendment No. 129A. Therefore, it only remains for me to speak to Amendment No. 123.
My Lords, people outside this House who have been following attentively the progress of the Bill in Committee have written to me about this amendment and asked me to pursue it. In addition, it has attracted the attention of the noble Lord, Lord Strabolgi, and the noble Baroness, Lady Birk, on the Opposition Front Bench. Therefore, although this subject is not by any means mine, I do not feel I am in any way indulging in frivolous behaviour in pursuing the matter a little further on Report in your Lordships' House tonight.
A typical correspondence includes a firm of solicitors whose practice is mainly concerned with the administration of large estates and the chairman of a tenants' association in a large block of London fiats. They both urge me to pursue the matter and seek the assurance that the noble Lord has endeavoured to give me in correspondence, but which I should like to persuade him to pursue with me a little further. What he has told me is that the Act would not permit somebody to introduce into a lease a provision which was outwith the terms of this schedule. But that does not cover leases in being—in the words which he used in giving me that assurance—and one must remember that there are three groups of leases here.
There are those entered into before the Housing Act 1974; those that have been entered into in the interim between 1974 and the date when this Act vests, and the question arises as to whether provisions in leases ante-dating this Act or the 1974 Act would or would not be overridden by this schedule in relation to the matters legislated for. It is that particular point on which I seek somewhat further assurance from the noble Lord in the form not merely of a statement, if I may put it ex cathedra, that the Act does override earlier leases, but rather to tell us what the authority for that statement would be

333
either in terms of something recited in the Act itself or in terms of some general legal authority on the construction of statutes.
I have myself, not being a lawyer, tried to do a little homework on this point. But, although I have consulted Maxwells Interpretation of Statutes I have not really got much further.
Lord MOWBRAY and STOURTON: My Lords, may I politely ask the noble Earl to talk into the microphone a little louder, because the Box is totally unable to hear what he is saying.
The Earl of HALSBURY: My Lords, I am so sorry. I have been doing my best to speak into the microphone. I hope that the noble Lord the Minister was able to hear what I was saying. I was saying that I had tried to find some general legal authority for this, but that, although consulting a textbook, I really felt that I was not up to the task. I should be greatly obliged to the noble Lord the Minister if he would he so kind as to give me the authority for whatever assurance he is able to give.
We all know that what we say here in Committee, or what we say here tonight, or whatever may be said on Third Reading, does not apply when it comes to construction of the Act in the courts. The courts will construe this Bill as an Act, when it vests, in terms of what it says. What we say in debate does not really count for very much. It is for that reason that I ask the noble Lord whether he can quote the authority for saying that the Bill overrides any provision there may be to the contrary in earlier leases. I do not wish to pursue the matter any further. I could give illustrations but the hour is late and I prefer not to do so. I beg to move.
Lord BELLWIN: My Lords, I explained in Committee that there was no need for the amendment. However, I am obliged to the noble Earl for moving it again today, because it provides me with the opportunity to clarify a fundamental point about Schedule 19 on which, I believe, he seeks an assurance and which may be helpful generally.
The provisions in Schedule 19 apply to existing leases and to future leases. Let there he no doubt at all on that point.
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Furthermore, it will not be possible for a landlord to put a term in a new lease so as to evade the schedule. Whatever the terms of an existing lease or a new lease may say, a landlord will be able to recover costs only to the extent that they have been reasonably incurred, and provided that he has consulted tenants in the manner required. Where a lease provides for an advance payment, whether that is based on estimates or is a contribution to a sinking fund, or is provided for in any other way, such a payment will be recoverable only by the landlord to the extent that it is reasonable. I am happy to assure your Lordships once again that there is no need for Amendment No. 123.
The noble Lord says, "Yes, that is fine; I am sure that that is right". But he asked whether I would care to quote him legal cases or whatever to endorse what I say". As to that, there is no actual legal authority as such; it is just part of the constitutional position. I would not dare to be so bold as to state it in such clear and unequivocal terms unless I was very sure of what I was saying. With that, I hope that the noble Lord is satisfied.
The Earl of HALSBURY: My Lords, subject to anything that the noble Lord, Lord Strabolgi, or the noble Baroness, Lady Birk, may wish to add, for my own part I must be content with the very positive assurance given to me by the noble Minister and I beg leave to withdraw the amendment standing in my name.
Amendment, by leave, withdrawn.
9.47 p.m.
Lord STRABOLGI Lord STRABOLGI moved Amendment No. 125:
Page 152, line 48, at end insert—
("( ) Where a service charge relates to a later period the monies collected for this charge shall be accounted for separately by the landlord or the association or company responsible for the collection of the service charge and shall be controlled and administered by a representative of the landlord and one representative of each category of tenant nominated by the respective categories subscribing to the service charge.").
The noble Lord said: My Lords, I beg to move Amendment No. 125. I submit that it is important that when there are large advance payments demanded by the landlord for a reserve or sinking fund, the monies collected should be controlled

335
and administered jointly by landlord and tenants. This is particularly important in the case of certain offshore companies or, indeed, anonymous foreign landlords where the funds collected could be transferred overseas or used for quite another purpose to help the cash flow.
What happens if the company goes out of business or, indeed, sells the property to another landlord?—and there have been cases where the tenants have had to go to court. I submit that this is the tenants' money and it should be accounted for separately and not treated as an interest-free long-term loan over which there is no control.
In Committee the noble Lord, Lord Bellwin, said that the Government were not unsympathetic to the purpose of my amendment, and the noble Lord kindly said that if I would withdraw it, the Government would look at it again. I therefore hoped that the Government would put down their own amendment. As they have not done so, for some reason or another, I thought that I had better put mine down again. I beg to move.
Lord BELLWIN: My Lords, the question of sinking funds has been raised certainly here in this House, indeed in Committee, and in another place. The Government have said that this is a matter which must be looked into in the longer term and I am happy to repeat that undertaking. In recent years my department has been engaged on a study of the problems of tenants of flats in the private sector, particularly in mansion blocks. The first fruits of that study are the provisions in Schedule 19. We have, in fact, already started to look into the question of sinking funds, but we came to the conclusion that this is such a complex matter that there was no possibility of bringing forward effective proposals within the time-scale of this Bill. I think it is fair to say—and I say it certainly in no spirit of criticism—that none of the amendments relating to sinking funds which has been tabled at various stages of the Bill, either here or in another place, including the present one, would be satisfactory, despite the fact that we know the intentions behind thern;and indeed approve of them.
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I should also like to point out that while we are aware of the general concern of some leaseholders about the administration and security of sinking funds we have not so far been shown detailed case histories of abuses where existing remedies have been tried and have failed, If the noble Lord is able to give us such cases I should be very pleased indeed to have them, which is not to imply that because we do not have them we are satisfied; far from it. I would hardly have said what I did about our intentions had that been the case.
I want to assure the noble Lord that, after the present Bill has been enacted—and I am sorry that I am not able to bring forth for him that which he and certainly I too would wish, but it is not there to be, and therefore I cannot do it—we shall resume our study of this question. We do not intend to let it go away because the legislation will be there. We shall be reviewing it with a view to drawing up proposals if a workable scheme can be devised. If the noble Lord can (as they say in another colloquialism), put his tenpence in, we shall be very glad indeed to have it.
Lord STRABOLGI: My Lords, I am grateful to the noble Lord. He said and implied that I did not bring forward any cases. I did refer to one case, and indeed this was referred to in another place, where, in a block of flats in central London, the tenants were asked to pay a substantial capital expenditure for future repairs. The block was sold and the funds so collected were mysteriously whisked away, the tenants being asked by the new landlord to pay that money again; and they had to go to court. All the amendment seeks to do is to see that tenants' money is accounted for separately. It is not seeking to stop sinking funds or to do any of the other things over service charges that we have discussed at length in Committee. All it is doing is earmarking the tenants' money in a separate account, which they themselves will control jointly with the landlord. This is an important amendment, and we must press it.
9.52 p.m.
On Question, Whether the said amendment (No. 125) shall be agreed to?
Their Lordships divided: Contents, 42; Not-Contents, 94.

CONTENTS

Airedale, L.

Diamond, L.

Kinloss, Ly.

Amherst, E.

Donaldson of Kingsbridge, L.

Leatherland, L.

Ampthill, L.

Ellenborough, L.

Lee of Newton, L.

Amulree, L.

Elliot of Harwood, B.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Elwyn-Jones, L.

Lloyd of Kilgerran, L.

Bacon, B.

Evans of Claughton, L.

Longford, E.

Balogh, L.

Faithfull, B.

McGregor of Durris, L.

Banks, L.

Foot, L.

Macleod of Borve, B.

Barrington, V.

Fulton, L.

Maelor, L.

Beaumont of Whitley, L.

Gaitskell, B.

Milne, L.

Bernstein, L.

Gardiner, L.

Monson, L.

Beswick, L.

Gifford, L.

Moyne, L.

Birk, B.

Gladwyn, L.

Northchurch, B.

Blease, L.

Glenamara, L.

Northfield, L.

Blyton, L.

Goronwy-Roberts, L.

Ogmore, L.

Boston of Faversham, L.

Greenway, L.

Oram, L.

Brockway, L.

Greenwood of Rossendale, L.

Paget of Northampton, L.

Brooks of Tremorfa, L.

Gregson, L.

Phillips, B.

Bruce of Donington, L.

Grey, E.

Pitt of Hampstead, L.

Byers, L.

Hale, L.

Ponsonby of Shulbrede, L.

Caradon, L.

Halsbury, E.

Raglan, L.

Chitnis, L.

Hampton, L. [Teller.]

Rathcreedan, L.

Cledwyn of Penrhos, L.

Hanworth, V.

Rochester, L.

Clifford of Chudleigh, L.

Hooson, L.

Ross of Marnock, L.

Collison, L.

Houghton of Sowerby, L.

Seear, B.

Cooper of Stockton Heath, L.

Hughes, L.

Segal, L.

Cork and Orrery, E.

Jacques, L.

Simon, V.

Craigavon, V.

James of Rusholme, L.

Spens, L.

David, B.

Janner, L.

Stedman, B.

Davies of Leek, L.

Jeger, B.

Stone, L.

de Clifford, L.

Kaldor, L.

Strabolgi, L.

Denington, B.

Kilmarnock, L.

Strathclyde, L.

Strathspey, L.

Vaizey, L.

Whaddon, L.

Tanlaw, L.

Vaux of Harrowden, L.

Wigg, L.

Taylor of Blackburn, L.

Vickers, B.

Wigoder, L. [Teller.]

Taylor of Gryfe, L.

Wade, L.

Winstanley, L.

Taylor of Mansfield, L.

Wallace of Coslany, L.

Wootton of Abinger, B.

Underhill, L.

Wells-Pestell, L.

Yarborough, E.

NOT-CONTENTS

Alexander of Tunis, E.

Dundee, E.

Mansfield, E.

Allerton, L.

Eccles, V.

Margadale, L.

Alport, L.

Elles, B.

Marley, L.

Amory, V.

Elton, L.

Massereene and Ferrard, V.

Atholl, D.

Falkland, V.

Monk Bretton, L.

Auckland, L.

Ferrers, E.

Mottistone, L.

Avon, E.

Ferrier, L.

Mountevans, L.

Balerno, L.

Godber of Willington, L.

Mowbray and Stourton, L.

Bellwin, L.

Gowrie, E.

Norfolk, D.

Belstead, L.

Gridley, L.

Orkney, E.

Bessborough, E.

Grimston of Westbury, L.

Perth, E.

Boyd of Merton, V.

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

Rawlinson of Ewell, L.

Boyle of Handsworth, L.

Rochdale, V.

Brabazon of Tara, L.

Harmar-Nicholls, L.

Salisbury, M.

Bridgeman, V.

Hatherton, L.

Sandford, L.

Brookeborough, V.

Henley, L.

Sandys, L. [Teller.]

Caithness, E.

Hornsby-Smith, B.

Savile, L.

Campbell of Croy, L.

Hylton, L.

Selkirk, E,

Chelwood, L.

Killearn, L.

Sempill, Ly.

Clitheroe, L.

Kilmany, L.

Sharples, B.

Cockfield, L.

Kinnoull, E.

Skelmersdale, L.

Colville of Culross, V.

Lauderdale, E.

Soames, L. (L. President.)

Crawshaw, L.

Long, V.

Stanley of Alderley, L.

Croft, L.

Lucas of Chilworth, L.

Swinton, E.

Cullen of Ashbourne, L.

Lyell, L.

Thorneycroft, L.

Denham, L. [Teller.]

McAlpine of Moffat, L.

Trefgarne, L.

Digby, L.

McFadzean, L.

Vivian, L.

Drumalbyn, L.

Mackay of Clashfern, L.

Young, B.

Dulverton, L.

Malmesbury, E.

On Question, Amendment agreed to.

CONTENTS

Barrington, V.

Greenwood of Rossendale, L.

Mountevans, L.

Beaumont of Whitley, L.

Grey, E.

Northfield, L.

Birk, B.

Halsbury, E.

Peart, L.

Blease, L.

Hampton, L.

Ross of Marnock, L.

Boston of Faversham, L.

Hooson, L.

Seear, B.

Brooks of Tremorfa, L.

Houghton of Sowerby, L.

Segal, L.

Cledwyn of Penrhos, L.

Howie of Troon, L.

Simon, V.

Collison, L.

Janner, L.

Stone, L.

Crowther-Hunt, L.

Jeger, B.

Strabolgi, L.

David, B. [Teller.]

Llewelyn-Davies, L.

Taylor of Blackburn, L.

Davies of Leek, L.

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

Underhill, L.

Denington, B.

Walston, L.

Eldon, E.

Maelor, L.

Wells-Pestell, L.

Evans of Claughton, L.

Mishcon, L.

Wigoder, L.

Gifford, L.

NOT-CONTENTS

Abercorn, D.

Eccles, V.

Mottistone, L.

Abinger, L.

Ellenborough, L.

Mowbray and Stourton, L. [Teller.]

Airey of Abingdon, B.

Elles, B.

Ampthill, L.

Elliot of Harwood, B.

Moyne, L.

Avon, E.

Elton, L.

Newall, L.

Balerno, L.

Faithfull, B.

Norfolk, D.

Bellwin, L.

Ferrers, E.

Orkney, E.

Belstead, L.

Ferrier, L.

Pender, L.

Bessborough, E.

Fortescue, E.

Rawlinson of Ewell, L.

Boyd of Merton, V.

Gainford, L.

Renton, L.

Brabazon of Tara, L.

Godber of Willington, L.

Rochdale, V.

Bradford, E.

Gowrie, E.

St. Aldwyn, E.

Bridgeman, V.

Gridley, L.

Salisbury, M.

Buxton of Alsa, L.

Grimston of Westbury, L.

Sandford, L.

Caithness, E.

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

Sandys, L. [Teller.]

Campbell of Croy, L.

Savile, L.

Chelwood, L.

Harvey of Tasburgh, L.

Selkirk, E.

Clifford of Chudleigh, L.

Hatherton, L.

Sempill, Ly.

Cockfield, L.

Keyes, L.

Sharples, B.

Colville of Culross, V.

Killearn, L.

Skelmersdale, L.

Cork and Orrery, E.

Kimberley, E.

Soames, L. (L. President)

Craigavon, V.

Kinnoull, E.

Strathclyde, L.

Craigmyle, L.

Long, V.

Strathcona and Mount Royal, L.

Crawshaw, L.

Lucas of Chilworth, L.

Swinton, E.

Croft, L.

Lyell, L.

Thorneycroft, L.

Cullen of Ashbourne, L.

McFadzean, L.

Trefgarne, L.

De La Warr, E.

Mackay of Clashfern, L.

Trenchard,V.

Denham, L.

Macleod of Borve, B.

Vaux of Harrowden, L.

Digby, L.

Malmesbury, E.

Vickers, B.

Drumalbyn, L.

Mansfield, E.

Vivian, L.

Dulverton, L.

Margadale, L.

Yarborough, E.

Dundee, E.

Marley, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
10.1 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY moved Amendment No. 126:
Page 153, line 20, leave out ("another building") and insert ("other buildings")
The noble Lord said: My Lords, I beg to move this amendment. This is another amendment about service charges. The purpose of the amendment is to make certain that the procedure regarding accounting for service charges is considerably simpler than it is made out to be in the Bill. Now that my noble friend has arrived I shall allow him to continue with the theme.
Lord EVANS of CLAUGHTON: My Lords, I apologise that I was not in my place when the amendment was called, but under the temporary arrangements it takes some time to get back to this Chamber after a Division. It seems to me and to my noble friends, and indeed to the Association of Metropolitan Authorities, that local authorities will have a considerable additional administrative expense in converting the existing procedures relating to service charges to those laid down in the Bill. It seems to those advising me that service charges should be arranged so that they can apply to more than one block; and that is why the amendment has been moved.
There are two elements in a service charge: the basic charge and the charge for major repairs. As things stand in the Bill as drawn, block by block accounts will have to be kept for any blocks in which flats have been sold. This would apply even if only one flat has been sold in a block of local authority flats. Heaven knows! what this provision will mean for a large authority, but for a medium-size authority, such as Knowsley, near Liverpool, which has 900 blocks, it will mean that the authority will have to keep 900 separate accounts. At present in that kind of set-up minor repairs and maintenance charges are not charged separately, as I am sure the noble Lord the Minister will be aware from his experience of local government. They are kept on an estate basis, or indeed almost on a local authority basis. If the legislation as set out is carried, the
340
change will take in local authorities such as Knowsley which, as I have said, is a medium-size authority. It will take two man-years to introduce the new procedures; and that does not include computer testing or systems implementation time. I am sorry to use those kind of somewhat "way out" terms.
My amendment seeks to clarify the fact that local authorities may base a proportion of the service charges—in other words, not the major items of repair—on an across-the-board basis. This would not in any way take away the rights of the tenant, enshrined in the Bill, to challenge charges: it is merely seeking information about whether in fact local authorities, if this measure is introduced in the way it is drafted, will have to carry out a block by block charge—as I say, it might amount to 900 different charges—or whether they can in fact charge for maintenance and for minor repair items across-the-board or on an estate basis. I think that from a point of view which the Government are very concerned about, it would be preferable if an across-the-board basis could be established so that in fact a very considerable saving in administrative charges could be made.
Lord BELLWIN: My Lords, paragraph 7 of Schedule 21 gives a tenant of a flat the right to a summary of costs relating to his service charge. If there are more than four flats in the building, or if the costs relate also to another building, the summary must be certified by an independent accountant. The amendment substitutes "other buildings", in the plural, for "another building".
The provision as drafted already covers the situation where the costs relate to one other building or several other buildings, because if the cost relates to several others it must relate to "another". On the other hand, the amendment would remove the requirement for certification when there is only one other building, which I submit is a valuable protection for the tenants. If the noble Lord is arguing that costs should not relate to more than one other building, I do not think this is practical. Surely the vital thing is for the tenant to be able to see how his charges are derived.

341
My Lords, I am slightly puzzled here, because we have discussed this position of block by block accounts with the local authority associations, and we understood that in fact they were satisfied. The schedule does not specifically require accounts for each block. The summary of costs must take account of how the expenditure is apportioned, each tenant to his block, with another block. With that, I admit very brief but, I hope, to the point explanation, I hope the noble Lord will feel that his point is covered.
Lord EVANS of CLAUGHTON: My Lords, I am sure the noble Lord the Minister appreciates that I am not trying to create difficulties; I am trying to simplify matters for the future. I am advised by the Association of Metropolitan Authorities in this matter, which suggests to me that the lines between the noble Lord the Minister and the AMA are possibly not as clear as the noble Lord thought they might be. Because they say in the last paragraph of their briefing note to me:
"The above amendment is sought in order to clarify that local authorities may base a proportion of their service charge—that is, for non-major items—in relation to several blocks on an acrossthe-board basis. The costs involved could, of course,"
as I said earlier,
"be challenged by tenants in the normal way, but the ability to relate the charge to several blocks"—
and this is the important point which perhaps the noble Lord the Minister might take up—
"could considerably ease what would otherwise become an extremely costly administrative exercise".
I know that it is the often-repeated sentiment of the present Government that they are anxious to reduce administrative charges, and that is why, in a desire—a totally disinterested desire, my Lords—to assist the present Government to reduce their administrative charges, I move this amendment; and I hope the noble Lord will take the spirit in which I move the amendment from the way in which it is moved.
Lord BELLWIN: My Lords, I will certainly do that without any hesitation. I continue to be slightly puzzled—although
342
I take the point about the lines of communication. We last met the local authorities associations on this on 29th May and, in fact, have heard no more since. I can only repeat that the accounts do not have to be kept on a block-by-block basis and there is nothing in the schedule which says that they must. I hope that the noble Lord will feel able to withdraw his amendment. Certainly, it is important that the lines of communication be clear and kept clear now and at all times. Of course, we will want to be talking and urging them by saying, "Come on, what are you concerned about?" That we shall certainly do.
Lord EVANS of CLAUGHTON: My Lords, with the consent of the House, I beg leave to withdraw the amendment on the understanding that the Government are keeping in constant touch with the Association of Metropolitan Authorities.
Amendment, by leave, withdrawn.
10.11 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 127:
Page 154, line 31, after ("whether") insert ("any amount payable before")
The noble Lord said: My Lords, if I may, in moving this amendment I should like to speak also to Amendments Nos. 128 and 129. Noble Lords will be aware that in Committee the Government introduced an amendment to paragraph 2 of Schedule 19 providing that the limitation on what a landlord can recover in a service charge to what is reasonable will apply to advance payments as well as costs which have been incurred. These three amendments—Nos. 127, 128, and 129—are necessary consequences on that amendment which we overlooked at that time. I do not think I need elaborate further unless I am required to do so. I hope this amendment will be accepted and that it will satisfy the noble Earl, Lord Halsbury. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 128:
Page 154, line 32, after ("management") insert ("are incurred is reasonable, whether such costs").
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 129:
Page 154, line 35, after ("declaration") insert ("that any such amount is or is not reasonable").
On Question, amendment agreed to.
[Amendment No. 129A not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 130:
Page 156, line 35, after ("account") insert ("in determining the authority's or corporation's reckonable expenditure or reckonable income under Part VI of this Act or").
The noble Lord said: My Lords, this is a small technical amendment to paragraph 2(1) of Schedule 20 which deals with the treatment of subsidy for housing cooperatives. As Schedule 20 is drafted at present, it provides that the existence of a co-operative on a local authority or new town estate shall not be a ground for recovering, withholding or reducing subsidy paid under Clause 101 of the Bill. It does not, however, ensure that the existence of a co-operative shall not be a reason for changing the basis on which subsidy is calculated under the new provisions in Part IV of the Bill. The amendment ensures that subsidy will be calculated for co-operatives on the same basis as if the dwellings were ordinary local authority or new town dwellings. I invite noble Lords to accept the amendment.
On Question, amendment agreed to.
10.15 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 131, 132 and 133:
Page 156, line 39, leave out ("sub-lease") and insert ("lease")
Page 156,line 41, leave out ("sub-lease") and insert ("lease")
Page 156,line 42, leave out ("sub-lease") and insert ("lease")
The noble Lord said: My Lords, these again are small technical amendments to the treatment of subsidy for housing co-operatives on local authority or new town estates. As drafted at present, Schedule 20 provides only one exception to the general rule that subsidy for cooperatives should be calculated on the same basis as if no co-operative agreement has been made. This exception deals with what seems likely to be the quite rare circumstance in which a co-operative
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itself grants a shared-ownership lease to an individual. This amendment broadens the circumstances in which a subsidy adjustment may be made to include those in which shared-ownership lease is granted; for instance by a local authority to a co-operative on a shared-ownership basis.
It is obviously necessary to adjust subsidy where shared ownership is involved for co-operatives—as for all local authority property. I invite noble Lords to accept the amendments.
On Question, amendments agreed to.
Schedule 21 [Amendments of Leasehold Reform Act 1967 and Housing Act 1974, Schedule 8]:
10.17 p.m.
Lord DAVIES of LEEK Lord DAVIES of LEEK moved Amendment No. 134:
Page 157, line 41, at beginning insert—
("1.—(1) For the first paragraph of section 1 of the 1967 Act (tenants entitled to enfranchisement or extension), substitute—
"This part of this Act shall have effect to confer on a tenant of a leasehold house or self contained flat, occupying that house or flat as his residence, a right to acquire on fair terms, in the case of a house, the freehold or an extended lease of the house and premises and in the case of a self contained flat an extended lease of the flat and premises where—"
(2) In subsection (1)(a) after the words "of house and premises" insert "or flat and premises as the case may be."
(3) In subsection (1)(b) after the words "of the house" insert "or flat."
2. In section 2(1) of the 1967 Act after the words "any building" insert "not being a self contained flat" and omit the words "or is divided horizontally into flats or maisonettes and—" and subsections (a) and (b) of that subsection.").
The noble Lord said: My Lords, are the acoustics all right in this place? Can I be heard? This is a charming little amendment and, on a night like this, after the Government have been defeated so many times, I hope that in the kindness of their hearts they will see the logic and the fairness of this amendment which I am about to move. I should also like to congratulate the noble Lord who has been working for days, morning, noon and night, meticulously and fairly on this Bill. I hope that he will be tolerant with me for about three minutes—I will not

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take much longer—in moving this amendment to Schedule 21. I shall not read the words because the Lord Chairman, who sits stately on the Woolsack, will simply say: "The words inserted on the Marshalled List", and as every noble Lord can read, there is no need for me to read them again.
I beg to move Amendment No. 134 as being more fitting for the world in which we now live than Section 1 of the 1967 Act; and, to show that I know what I am talking about, I have read Section 1 of the 1967 Act. We substitute through this amendment the right of a tenant of a leasehold house or self-contained flat in that house on fair terms—which I underline—to obtain a freehold or an extended lease of a house and premises and also in this case I say a self-contained flat. A lease—and this is a little bit of history—as generally understood today is a document creating an interest in land for a fixed period or a certain duration, but it has not always been so. Leases are governed now by numerous statutory positions. Despite all the legislation of all Governments (to be fair) in the past two or three decades or more, there is a need for simplification and clarification in this sphere of legislation. Particularly is this true—as a Welshman myself from rural areas—of old farmhouses, rural workshops and dwellings as well as for the dwellings in cities and modern towns.
The issue of leasehold rights grows more acute and more complicated particularly as large dwelling-houses in our modern cities and environment tend to be changed into multiple living quarters—what I am saying is absolutely clear—and are built up as self-contained flats. My own mother-in-law's house which was sold for £1,000 in Lewisham is now worth about £260,000 because there are about five flats in it.
How does a leasehold and freehold hold in that building, for instance? So far as rents are concerned, which links with it a little, an effort was made in the Rent Act 1977 to embody a complicated mass of legislation in one Act, and a distinction was made then between the controlled and regulated tenancies on which it would be irrelevant for me, in moving this amendment, to dwell.
A basic human need is shelter and,
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coupled with the freehold, it ranks as the target house buyers like to acquire—the fullest status that any people can enjoy is that of freehold owner-occupation. Under the Leasehold Reform Act 1967, a person who is a long leaseholder of a house, though not of a flat, can compel the landlord to sell him the freehold of the premises, or else compel the landlord to extend the lease for another 50 years beyond the date of its original termination for a price. These rights do not apply to those houses which are not horizontally divided from other premises: that is, they do not to any extent overlap or underlap another property. The house could be in a row of terraced houses: it need not be free standing. This amendment aims at rectifying this and making the entire business more fair for the owner-occupier of small means.
It is still necessary under this Bill and the Leasehold Reform Act 1967 for a leaseholder to exercise his rights to purchase the freehold, and that is known as the enfranchisement or extension, before the lease expires. The leaseholder who has been occupying a house as his main residence for a period of at least five years would be entitled to this. The price can be fixed freely between the parties by land tribunals, and here legal aid can come in and the public should know this, and simple information should be available. In some cases it is much inure important, in the question of freehold, for a tenant to employ a good surveyor than a barrister or a lawyer, for in this sphere not so many lawyers are as well informed as some of the surveyors in local authorities.
One other point: the price of this enfranchisement bears no relationship to currency today and the public should be made aware that when they are buying freehold—something which will last for generations—they are now dealing in capital sums of £200,000 or more. I hope that, in his magnanimity, the overworked Minister, who has been working like a lion all the week, will say, "Yes, the Government can see the common sense of this and will accept it." I beg to move.
Lord EVANS of CLAUGHTON: My Lords, I warmly support the amendment which has been moved by the noble Lord,

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Lord Davies of Leek. I think the amendment he moved should probably be taken conjointly with Amendment No. 136. The position at the moment is that the leasholders of flats are not afforded the same opportunities for enfranchisement as the leaseholders of houses, and because of the curiosities and almost medieval history of our land law, it is very difficult to provide for the ownership of flats in the way that can be done in Scotland—I hate to admit that Scottish law may be superior to English law in this respect. However, it seems to me that we have two choices. We can provide as this amendment suggests that, instead of getting the freehold of a block of flats for themselves, which will be very difficult under English law, leaseholders can seek a 50-year extension of their existing lease.
Amendment No. 136, which I think is the better amendment, would mean that leaseholders would be entitled to join together to purchase the freehold of a block of flats and organise it as a cooperative. The two amendments seek the same end and I should have thought, if under the 1967 Act we are offering lessees of houses an opportunity of enfranchisement, that we ought to give something similar to the lessees of flats. I very warmly support the concept that the noble Lord, Lord Davies, has tried to introduce. If it is an individual lessee he gets a 50-year extension, or, if they can co-operate together, the lessees of a whole block of flats are given the right to buy the freehold and then organise the block as they wish. I very much support the amendment moved by the noble Lord.
10.27 p.m.
Lord BELLWIN: My Lords, I do not think it is fair to bring the noble Lord, Lord Davies, in to bat at this time of night. He certainly introduces a breath of fresh air but I cannot agree with most of what he said. But he says it with such panache that he adds a great deal to the proceedings. Amendment No. 134 would give leaseholders of flats the right to an extension lease, but not the right to buy the freehold. The reason why the 1967 Act does not apply to the flats is that under the existing law enfranchisement of individual flats would lead to difficulties regarding the future maintenance of the block. The positive covenants which would be required
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for the owner of each flat to ensure proper maintenance of the rest of the building cannot, at present, be made binding on subsequent purchasers of the freeholds.
Long leases of flats have, on the whole, been granted fairly recently and have substantial periods left to run. We are not aware of long leases of flats which are about to expire, but if they exist leaseholders of such flats will normally have the right to stay on as protected tenants under the Rent Act 1977. We are aware, however, of problems which can arise in selling flats as the unexpired term of the lease gets shorter, because of the difficulty the purchaser may have in getting a mortgage.
We have already indicated that we intend to look at the question of extension leases in the longer term, as part of our continuing work on mansion blocks. Any proposal of this kind would give rise to a number of difficult questions which would have to be considered. For example, whether under any such right all leases in the same block should fall in together; how to deal with the situation where different flats in the same block have leases on different terms; or whether such a right might be better exercised on an individual or collective basis.
The present proposal would not be workable, because a great deal more would need to be done to adapt the provisions of the 1967 Act to deal with such cases. For example, the existing provision for the fixing of the new ground rent for an extension lease relates to the value of the site. In any case, it would be little more than a stop-gap arrangement and landlords would in future be able to sell shorter leases in the knowledge that they could be extended.
I wonder whether with that explanation the noble Lord will feel able to withdraw his amendment. I have made the point about general concern, and the intention to go further into the whole area of mansion blocks and all that goes with them. I wonder whether the noble Lord will withdraw his amendment.
Baroness BIRK: My Lords, before my noble friend withdraws the amendment may I say this: Amendments Nos. 134 and 136 really go together, but they have

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somehow become separated by another amendment coming in between. It seems a pity to take the other amendment next, which is on a different subject, and not to deal with these two amendments together. They are on the same point and have both been explained by my noble friend Lord Davies and by the noble Lord, Lord Evans. Therefore, may I ask the Minister whether we can take them both together, and I can then move No. 136 formally.
10.30 p.m.
Lord DAVIES of LEEK: My Lords, in view of the Minister's statement, there is still not much oil in the lantern but there is a glimmer of light across the moors. Consequently, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
The DEPUTY SPEAKER (Viscount Simon): My Lords, the next amendment is manuscript amendment No. 134AZ, the Earl of Kinnoull. In accordance with standing orders, I have to read this amendment. The manuscript amendment reads:
Page 157, line 43, at end insert:
("Section 9(2) of the Leasehold Reform Act, 1967 shall be amended so as to add the following:—
"9.(2)A. Where a tenant has given notice, pursuant to Section 8 of this Act, of his desire to have the freehold, a landlord may serve upon such tenant notice in writing stating the price which the landlord proposes that the tenant shall pay for the house and premises and if within one year of the service of this notice upon him a tenant has neither given to the landlord notice in writing of his agreement to pay such price nor applied to a Leasehold Valuation Tribunal pursuant to Section 21 of this Act to determine the matter of the price payable, then upon the expiration of the said one year the tenant shall be deemed to have given to the landlord notice under subsection (3) hereof that he is unable or unwilling to acquire the house and premises and thereupon the provisions of the said subsection (3) shall have effect accordingly"").
The Earl of KINNOULL: My Lords, I must apologise to the House both for the length of the amendment and for the fact that it is a manuscript. I would apologise to my noble friend, except for the fact that I see he has already had three manuscript amendments, so I feel that I am in good company. I do not intend to speak for any length of time—the purpose of the amendment is very
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simple—but I should like to spend one minute this evening upon placing on record the purpose of the amendment, for my noble friend to consider it, and perhaps for myself to be able to come back on it at the final stage of the Bill.
As I have said, the purpose of the amendment is very simple. The machinery of the leasehold enfranchisement which triggers off the right of a tenant to purchase his freehold comes, as the House is aware, under Section 8 of the 1967 Act. The tenant applies in the usual form. The landlord is then obliged, under Section 9, to reply and to state his value. There is then normally a period of negotiation and, failing that, either party may apply, under Section 21 of the Act, to the Lands Tribunal.
There is one flaw in the machinery which concerns the landlord: that there is no timescale between the moment that the tenant applies, under Section 8, to the moment when the deal must be closed. One has to remember that the date of valuation dates from the time of the first application. What one has seen, since 1974 in particular, is that tenants who applied in 1974 have still not purchased, although the valuation will date back to 1974. I think that this is a flaw. The amendment seeks to achieve the fact that if no action is taken by the tenant within one year, which is a reasonable period of time, then his right will fall and he will not be able to apply again for another three years, as under the Act.
There is an alternative which I should like my noble friend to consider. If the tenant does not react within one year, then the valuation should be at the modern valuation at the time of the contract. I hope that my noble friend will consider this point. I beg to move.
Lord BELLWIN: My Lords, the fact that my noble friend has tabled a substantive and rather complicated amendment which came to our notice at 9.30 p.m., means that in the time available we have been unable to examine its effects. It may be that the simple answer is that the landlord can apply to the Leasehold Valuation Tribunal, which will fix a price. Then, under the rules, the tenant must complete within a specified timescale. However, I propose to write to my noble friend in more detail, and

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I hope he will feel satisfied with that. Certainly we will go into the detail carefully.
The Earl of KINNOULL: My Lords, of course I am satisfied with that reply, for which I am grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.36 p.m.
Lord MONSON Lord MONSON moved Amendment No. 134A:
Page 158, line 7, leave out paragraph 3.
The noble Lord said: My Lords, in moving this amendment I am taking the rather unusual step of moving an identical amendment to one I moved in Committee, as it has since become evident that, because of genuine misunderstandings on both sides, perhaps only to be expected in such a complex Bill as this one, the noble Lord, Lord Bellwin, misinterpreted my question and I, in turn, misinterpreted his answer. In other words, the misgivings which I thought had been allayed are very much not allayed.
The purpose of paragraph 3 of this schedule, it now appears, is to close up a loophole in the 1967 Act. The existence of this loophole has been well known to lawyers for over 12 years. It provides a most useful facility for anyone wanting to enter into a contract for the purchase of a leasehold house which has been demonstrably excluded from the enfranchisement provisions of the 1967 Act in the full knowledge of the pros and cons of doing so. Anybody wanting to know what I mean by "useful facility" need only refer back to the speech made by the noble Lord, Lord Brooke of Cumnor, on the Second Reading of the Leasehold Reform Bill 13 years ago this summer to see exactly what I mean. The noble Lord, Lord Brooke, pointed out that the leasehold system had enabled him and his family to live in a much better house in a much better district than would have been the case if only freehold houses had been available.
The point which seems to have escaped the Government—I cannot stress this too highly—is that precisely the same facility is still available to those who are choosing a leasehold house over a certain rateable
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value or choosing a flat of any rateable value. With a given sum of money, one can opt either for a flat in Belgravia with, say, a 27-year lease, or, alternatively, a flat in Earl's Court, perhaps with a 75-year lease. The flat in Belgravia may very well be a nicer one in a more desirable district, but it will be a fairly rapidly wasting asset. Against this, the flat in Earl's Court will be a rather more slowly wasting asset. Surely in a free country where people are treated as adults and encouraged by the Government of the day to stand on their own feet, as the oft-repeated saying goes, those looking for houses should be given the same options as those looking for flats.
Given the Government's general overall philosophy, given that the Conservatives, along with the then Liberal Party and the Independents, bitterly opposed the 1967 Act—they were assisted by the misgivings of at least a few Socialists, including the late Mr. Richard Crossman—and given that at least one eminent authority believes that the 1967 Act infringes Article 1 to the First Protocol to the European Convention on Human Rights, I should like to ask the noble Lord, Lord Bellwin, what a Conservative Government are doing extending this Act rather than, if not actually repealing it, then trying to make its provisions a little fairer.
Lord BELLWIN: My Lords, perhaps I might remind the House of the intention of paragraph 3 of Schedule 21 to the Bill, which is to close a loophole in the Leasehold Reform Act which some large commercial landlords have been exploiting in order to get round the Act. The 1967 Act contains a provision which exempts from it all tenancies terminable by notice after a death or marriage. That was intended to allow for the creation of what I referred to in Committee as bona fide leases. Such a lease might be granted to a former employee to let him live in a house for the rest of his life, or under the terms of a will, or where a person sells his house to raise capital but leases it back for the rest of his life. In such circumstances it would not be right if the tenant could buy the freehold of the house on the favourable terms of the Act. The provision was not intended to enable commercial landlords to evade the Act. There is evidence that

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some have been doing this by granting leases terminable at any time after the death of a descendant of King George V.
The noble Lord will remember that we spoke about this when we were in Committee. The Government therefore decided to close the loophole, and paragraph 3 of Schedule 21 does this by imposing more stringent limitations on the kind of life lease which will be exempt from the Act. This should allow for the continuing creation of bona fide leases but prevent exploitation. The change in the law will not, however, operate retrospectively, since it will not affect leases granted before 18th April 1980, the date on which the proposal was announced.
In moving this amendment, I hope that the noble Lord, Lord Monson, is not suggesting that the loophole should be kept open. I am confident that that is not his wish, and therefore I wonder whether he is prepared to withdraw his amendment. I take the point which he made originally about our criss-crossing over. I am sorry about it, but I suppose it was largely inevitable. Perhaps the only surprising thing is that we have not had more of that with all that one has been trying to do in giving information on the great complexities of this Bill.
Lord MONSON: My Lords, I entirely accept the last part of the noble Lord's statement. It was inevitable in a Bill of this complexity that there should be some accidental criss-crossing and it was kind of him to make that apology. However, I am saying to him that the loophole should not be closed because the point is that this is a loophole which is freely available to people who want to go into it with their eyes open and to take advantage of the same facilities as are available to them when they wish to buy flats on short leases, knowing full well that they are buying a wasting asset. It seems extraordinary that a party which so bitterly opposed the 1967 Act—and I have a mass of quotations to prove this—should apparently have changed their mind in a surreptitious way. I rather feel that they should have been more open about it. If they were wrong in 1967, should they not say so openly now? Obviously I have no prospect of changing the Government's mind on this, so I must beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.44 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY moved Amendment No. 135:
Page 158, leave out from end of line 7 to first ("the") in line 10.
The noble Lord said: My Lords, I beg to move this amendment which deals with very much the same point, but certainly from a different angle. I want to pursue it for a little while if only because I was unable to hear the Minister's reply to the last point. I hope I am not wasting your Lordships' time, but I think it is a very important point.
The 1967 Act gave rights to various tenants to buy freeholds but it exempted, for the best of all possible reasons, various arrangements which had been entered into, which were due to come to an end on the death of a particular tenant and were designed to provide a home for a member of the family or something analogous to that. Because of the rather poor wording of the Act, an enormous loophole was created whereby owners of blocks of flats were able to produce formulae by which they could evade the whole purpose of the Act.
At the last stage of the Bill I sought to put before your Lordships an amendment which would bring those people back into the Act. In the Minister's reply, he no longer sought (as had happened in another place) to rely on what I hoped I had shown to be the rather bad point of resistance; that is, that the whole thing was retrospective. But he pointed out, quite rightly, that I was throwing out the baby with the bath water, and that in trying to bring in the various firms who had found the loophole in this Act I was also bringing in the few cases of the genuine arrangements which the 1967 Act had been designed to protect. I accepted that and I took the amendment away again.
I now bring forward this amendment which, by doing away with the whole of that proviso, will bring into this Bill all the previous arrangements, which will therefore mean that the genuine arrangements will be covered, because under the Bill the genuine arrangements which are entered into now are also covered. It seems to me that this is a protection for

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the few cases, where these exist, and I think they are fairly few because, in quite a lot of inquiries and in talking to people I have found no one who, in fact, in their legal practice, has come across one. But I am sure that they do exist, and I am sure that they should be preserved.
My Lords, this is another try which is designed to block a really beastly loophole which is being taken advantage of for all the wrong reasons, and when the Minister, if he does, points out to me the errors in this particular amendment I hope that he will say that between now and the Third Reading he will, in fact, ask his department to look at it again and see whether they cannot find something better, always assuming that mine is defective, as I rather fear it is. I beg to move.
Lord BELLWIN: My Lords, I do not know whether the noble Lord will be pleased or sad at the comments I have to make. One is not that the amendment is defective. To that extent, I hope he may feel it is a plus. Would that I could say other things to make him feel likewise, but I fear I cannot.
The amendment now proposed would make paragraph 3 operate retrospectively, and that is not the Government's intention, as I pointed out in Committee. Furthermore, it would not be consistent with our position on the Leasehold Reform Act of 1979 to make the provision retrospective. I appreciate that this amendment would not operate retrospectively on all leases, unlike an amendment which the noble Lord tabled in Committee, but I think there is little doubt that it would nevertheless affect some existing bona fide leases. This is because although the qualifying conditions we have imposed in paragraph 3(b) should allow adequately for the creation of bona fide leases in the future which will be exempt from the Act, it does not follow that all bona fide leases created in the past will satisfy those conditions, and where they do not they will be brought within the Act.
Consequently, my Lords, I think that possibly Amendment No. 135 goes further than is intended by the noble Lord. It certainly goes a great deal further than the Government's proposal, because it is not our intention that the change in the law
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should be retrospective at all. Without saying more, I wonder whether the noble Lord might therefore feel that on the technicality he may wish not to pursue the point.
Lord EVANS of CLAUGHTON: My Lords, before my noble friend responds to the invitation made by the noble Lord the Minister, may I say, as a solicitor myself and as a member of a profession that uses these kinds of devices, that the kind of thing which enrages me, with great respect, is that time and again loopholes are left which members of my profession use quite outrageously while talking about the descendants of King George V or King George VI.
For some reason, Governments of all political complexions seem reluctant to close these kinds of loopholes. I agree that by accepting the amendment of my noble friend we might in fact close a loophole which is perfectly legitimate, but I would have hoped that the Minister might have looked for some way of stopping the kind of exploitation of loopholes in the law which give people who are highly paid to look for these kinds of loopholes an opportunity of expanding their kind of, I think, quite illegitimate practice. I should have thought that the Minister might have given a more optimistic reply to my noble friend.
Lord BELLWIN: My Lords, the last thing I would want to do at this time of the day is to enrage the noble Lord. Certainly, I have no wish to do that. I must say I actually feel much sympathy with the way he puts the point. I clearly cannot promise him that anything will be done about this, but I promise him from my own interest, and because of the way he puts the point, that I will want to talk to officials about this to see whether or not it is practical. I make no promises; I am sure the noble Lord will accept that. If he feels so strongly about this technical point, I feel I ought to take it and have a look at it on that basis.
Lord BEAUMONT of WHITLEY: My Lords, I should like to thank the noble Lord very much for that. The noble Lord can pass on now from the compliments of the noble Lord, Lord Davies of Leek, who said that he worked like a lion. In fact lions do no work at all; they lie

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about sleeping all day and wait for the lionesses to bring the meat. So that was a very double-edged compliment. I will go further and say the noble Lord is working like a beaver, and beavers really do work. I am grateful. This really is a loophole which should be plugged. I beg leave to withdraw the amendment.
Lord DAVIES of LEEK: My Lords, with permission, I would like to point out that lions work. I made a film of lions on the kill, and I know how they worked on that.
Amendment, by leave, withdrawn.
10.51 p.m.
Lord MONSON Lord MONSON moved Amendment No. 135A:
Page 158, line 9, after ("granted") insert ("or an enforceable contract was entered into for its grant").
The noble Lord said: My Lords, this is a very much more modest amendment than my Amendment No. 134A. I want to stress that this amendment does not seek to reverse the course on which the Government seem currently, although in my view mistakenly, set in their attitude towards the leasehold system. It appears that the Liberal Party has reversed its opposition to the 1967 Act even more totally than the Conservatives have, which I suppose is a bull point for the Government.
The purpose of this amendment is simply to avoid accidental retrospection that may occur in the case of certain building lease schemes which are set up but not finalised in every detail prior to 18th April 1980. This is a highly complex, technical matter with which I will not bore your Lordships; indeed, I should probably get it wrong. I think the noble Earl, Lord Kinnoull, could probably explain it better than I can. I assure your Lordships that unless something is done people who have entered into perfectly legitimate schemes prior to that date will be caught out. One thing that can be said with confidence is that the Conservative Party still maintains its opposition to punitive retrospective legislation, and rightly so.
I will not be pressing this amendment because, after an enormous amount of legal head scratching, it was decided two
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hours ago that the word "enforceable" in my amendment implied a meaning which might possibly invalidate the intention of the amendment as a whole. I propose to move what I trust will be a legally watertight amendment leaving out the word "enforceable" at Third Reading. Before I withdraw this amendment I should like to hear whether the Government are in principle opposed to accidental punitive retrospection, and therefore, subject to careful scrutiny beforehand on the part of the Government, they would in principle support an amendment to avoid such accidental retrospection at Third Reading.
Lord MOWBRAY and STOURTON: My Lords, I do see the point of Amendment No. 135A, and I do not dissent from the objective. I would draw the attention of your Lordships' House to the definition of a tenancy in Section 37 of the Leasehold Reform Act. A tenancy there means a "tenancy at law or in equity". I am assured that the words "tenancy in equity" cover the situation where there is an enforceable contract to grant a tenancy. It follows, therefore, that a tenancy granted after 18th April as a result of an enforceable contract entered into before that date will not be affected by the proposal in paragraph 3; consequently, there is no need for this amendment. If the noble Lord is satisfied on that point, perhaps he would withdraw his amendment, but I am grateful to him for giving me this chance to explain the point to the House.
Lord MONSON: My Lords, I thank the noble Lord very much for what he has said. In fact it appears that lawyers are not wholly agreed that Section 37 of the 1967 Act does have the effect that he says it has. This is the difficulty about it. But in any case I intend to withdraw the amendment because it appears, again as a result of legal disputation, that it may be defective. I reserve the right to move a more legally watertight one if possible on Third Reading, but for the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 135B not moved.]
Baroness BIRK Baroness BIRK moved Amendment No. 136:

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Page 158, line 14, at end insert—
(" .In section 1 of the 1967 Act after subsection (1) insert—
"(1A) Where any house is divided into self-contained flats in circumstances where the tenant of each flat:

(i) has a right to acquire on fair terms an extended lease; and

(ii) is, in relation to his occupation of that flat, a member of a housing co-operative then, for the purpose only of conferring upon that co-operative the right to acquire on fair terms the freehold of that house and premises, the co-operative shall be treated for the purpose of subsection 1 of this section as the tenant of a leasehold house complying with the requirements of paragraphs (a) and (b) of that subsection.").

The noble Baroness said: My Lords, I have already spoken to this amendment. I beg to move the amendment.
Lord MOWBRAY and STOURTON: My Lords, the intention of Amendment 136 is evidently to enable a housing co-operative which owns the long lease of a house to buy the freehold under the terms of the Leasehold Reform Act, in circumstances where the house is divided into self-contained flats and each tenant is a member of the co-operative and has the right to acquire an extended lease on fair terms. The 1967 Act does not apply to individual flats and is tailored to deal solely with the case of an individual long leaseholder of a house. I do not think it would be appropriate to use it in this way, and to attempt to do so might give rise to all sorts of practical difficulties. There is nothing to prevent a co-operative or any other association of long leaseholders from purchasing the freehold of a house or a block of flats if the freeholder is willing to sell to them. I understand that there are several cases where this has already happened, but I see no case for giving special rights to co-operatives to buy out freeholders.
Lord EVANS of CLAUGHTON: My Lords, may I say I am somewhat disappointed by the view the noble Lord the Minister has taken here? As one who is very much involved in the purchase and sale of blocks of flats, I find it is becoming common practice in the private sector for a landlord or a builder to build a block of flats, to give to the flat purchasers leases of 99 years and then at the end, when all the leases have been granted, to sell the free-
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hold reversion to a management company which is made up of the individual lessees. This is a sensible and civilised modern system of dealing with the problems that flats create for us, not because they are flats but because of our archaic conveyancing system in this country. In Scotland they have been conveying flats for generations. In the time of James IV, James III, James I and Malcolm the Maiden they were conveying flats in Scotland. It is only the curiosities of the English conveyancing system that prevent us from conveying the freeholds of flats, and, to get round this problem, we have devised in the private sector this means of conveying the freehold to a management company in which each of the lessees has a share.
I would have thought that if the Government had been a little more flexible (to use a term that has been used a great deal in the last few weeks and days) they could have accepted this kind of amendment, which is put forward by a responsible body of people, the Association of Metropolitan Authorities, who are very anxious themselves to create a property owning democracy.
I would have thought that we could have had (if I may put it without, I hope, being unduly offensive to the noble Lord) not quite the brush-off that he has given us this evening. I would have thought this might have been an area where the Government could say, "Very interesting. We'll look at this and try and create a system akin to that used in the private sector so that people can feel themselves involved as individuals in the flats in which they live".
Baroness BIRK: My Lords, these amendments were separated by a number of other amendments, but from a discussion point of view it would have been better if they had been taken together. When the Minister answered the amendment moved by noble friend Lord Davies of Leek, Amendment No. 134, my impression was that he was not going to have a look at the whole matter generally. He did not say that he would necessarily come back on this Bill, but it was certainly a very much more flexible answer than the answer we have had on this amendment. I said that I had spoken to it because I got up and said that they

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seemed to me to be two parts of the same subject, and that if this was the attitude taken that was all right and I was leaving it like that. That was why I got up and moved it formally.
However, a very much harsher response seems to have come to this one but they really are fairly similar amendments. I would like to have it confirmed that what the Minister the noble Lord, Lord Bellwin, said in reply to my noble friend Lord Davies of Leek operates as far as this other amendment is concerned.
Lord MOWBRAY and STOURTON: Yes, my Lords; that would be the case.
Baroness BIRK: My Lords, if that is so I shall withdraw the amendment and I suggest that the noble Lord tears up what he said in answer just before.
Amendment, by leave, withdrawn.
Schedule 23 [Houses in multiple occupation: revised penalties for certain offences]:
11.2 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 137.
Page 162, leave out lines 21 to 26.
The noble Lord said: My Lords, you will remember that during the previous stage of consideration of the Bill we inserted a clause giving local authorities new powers to deal with overcrowding in houses in multiple occupation. This amendment arises directly from that, in that it removes from Schedule 23 the provision to update the penalty for contravention of the section in the 1957 Housing Act that will be replaced by the new clause. This updating is unnecessary because the new clause includes provision for a penalty at the higher level. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 138:
Page 163, line 33, leave out paragraph 8.
The noble Lord said: My Lords, I beg to move Amendment No. 138. This has already been spoken to with Amendment No. 96.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 139:
After Clause 142 insert the following new clause:
Houses in multiple occupation: means of escape from fire.
(".—(1) Schedule (Houses in multiple occupation means of escape from fire) shall have effect in place of section 16 of the Housing Act 1961 and section 60 of the 1969 Act except in relation to notices served, undertakings accepted or orders made before the commencement of this section.
(2) In relation to a breach after the commencement of this section of an undertaking accepted under section 60 of the 1969 Act subsection (3) of that section (fine on summary conviction) shall have effect as if for "£20" there were substituted "£50".
(3) The amendments and repeals made by this Act (except subsection (2) above) shall not affect the operation of any enactment in relation to any notice served, undertaking given or order made under the provisions replaced by this section.")
The noble Lord said: My Lords, this amendment also has already been spoken to with Amendment No. 96.
On Question, amendment agreed to.
[Amendment No. 140 not moved]
Clause 146 [Regulations and orders]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 141:
Page 103, line 12, after ("section") insert ("52(4),").
The noble Lord said: My Lords, during the Committee stage of the Bill my noble friend undertook to consider whether the affirmative procedure might be more appropriate than the negative procedure for which the Bill currently provides if an order were to be made under Clause 52(4) of the Bill to disapply compulsory rent registration for shorthold, either generally or in particular areas. Let me stress once again that if such an order were made it would not affect any existing registered rent under shorthold and would still enable a fair rent to be registered if either party wanted it.
My right honourable and honourable friends and my noble friend have considered very carefully everything that was said in your Lordships' House during the discussions of this issue in Committee. We accept that if the Government were to make an order disapplying compulsory rent registration for shorthold, either generally or in particular areas, it should

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be necessary to seek the approval of both Houses of Parliament before such an order could come into force. I have no doubt that even under the negative procedure appropriate debates would have taken place. Nevertheless, the Government are very content to meet the wishes expressed in different parts of the House on this matter. That is why we have tabled these amendments, which have the effect of making any order under Clause 52(4) subject to Affirmative Resolution rather than Negative Resolution. I hope that this will be welcomed by your Lordships. I beg to move.
Baroness BIRK: My Lords, I should like to thank the Government very much. I am very pleased that these amendments have been moved. I think that this is a very great improvement. It is extremely important that there should be Affirmative Resolution in this area and, therefore, it is something about which, at the end of a long, long two days and nights, we can be pleased.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 142:
Page 103, line 14, after ("section") insert ("52(4)or").
The noble Lord said: My Lords, in moving Amendment No. 141 I was really taking Amendments Nos. 142 and 143 as well. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 143:
Before Schedule 24 insert the following new schedule—
("SCHEDULE
HOUSES IN MULTIPLE OCCUPATION: MEANS OF ESCAPE FROM FIRE
Exercise of powers of local authority
1.If it appears to a local authority that a house which is occupied by persons who do not form a single household is not provided with such means of escape from fire as the local authority considers necessary the local authority may exercise such of its powers under this Schedule as appear to it most appropriate; and it shall do so if the house is of such description or occupied in such manner as the Secretary of State may by order specify.
Powers available to local authority
2.—(1) The local authority may serve a notice on any person on whom a notice may be served under section 15 of the Housing Act
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1961 specifying the works which in the opinion of the local authority are required to provide the necessary means of escape from fire and requiring the person on whom the notice is served to execute those works within such period, not less than twenty-one days from the service of the notice, as may be specified in the notice.
(2) The period specified in the notice may from time to time be extended by the local authority.
(3) Where the local authority serves a notice on any person under this paragraph it shall inform any other person who to its knowledge is an owner, lessee or mortgagee of the house of the fact that the notice has been served.
3. If it appears to the local authority that the means of escape from fire would be adequate if part of the house were not used for human habitation the local authority may secure that that part is not so used.
4. The local authority may secure that part of the house is not used for human habitation and serve a notice under paragraph 2 above specifying such works only as in the opinion of the authority are required to provide the means of escape from fire which will be necessary if that part is not so used.
5. For the purpose of securing that a part of the house is not used for human habitation the local authority may, if after consultation with any owner or mortgagee it thinks fit to do so, accept an undertaking from him that that part will not be used for human habitation without the permission of the local authority.
6. If the local authority does not accept an undertaking under paragraph 5 above with respect to a part of the house or if, in a case where it has accepted such an undertaking, that part of the house is at any time used in contravention of the undertaking, the local authority may make a closing order with respect to that part of the house.
Enforcement
7. Any person who, knowing that an undertaking has been accepted under paragraph 5 above, uses the part of the house to which the undertaking relates, in contravention of the undertaking, or permits that part of the house to be so used, shall be guilty of an offence and liable on summary conviction to a fine not exceeding £50 and to a further fine of £5 for every day, or part of a day, on which he so uses it or permits it to be so used after conviction.
Consultation with fire authority
8. A local authority shall, before serving a notice, accepting an undertaking or making a closing order under this Schedule, consult with the fire authority concerned.
Exclusion of Rent Act protection
9. Nothing in the 1977 Act shall prevent possession being obtained of any part of a house which, in accordance with any undertaking in pursuance of this Schedule, cannot for the time being be used for human habitation.
Interpretation
10. In this Schedule expressions defined in the 1957 Act have the same meanings as in that Act.
Application and amendment of enactments
11. Part II of the 1957 Act shall apply to a closing order made under this Schedule as it applies to a closing order under section 18(1) of that Act, but the ground on which, under section 27(2) of that Act, the local authority is required to determine the order shall be that it is satisfied that the means of escape from fire with which the house is provided is adequate (owing to a change of circumstances) and will remain adequate if the part of the house with respect to which the order was made is again used for human habitation.
12. In section 17(1) of the Housing Act 1961 for the words "either of the two last foregoing sections" there are substituted the words "section (Houses in multiple occupation: means of escape from fire) of this Act or Schedule (Houses in multiple occupation: means of escape from fire) to the Housing Act 1980" and for the words from "in the case of a notice" to "that section" there are substituted the words "in the case of a notice under that Schedule, that the notice is not justified by the terms of that Schedule".
13. In section 18(1) of the Housing Act 1961 for the words "section fourteen, section fifteen or section sixteen of this Act" there are substituted the words "section 14 or 15 of this Act or Schedule (Houses in multiple occupation: means of escape from fire) to the Housing Act 1980".
14. In section 61 of the 1969 Act for the words "section 14, 15 or 16 of the Housing Act 1961" there are substituted the words "14 or 15 of the Rousing Act 1961 or Schedule (Houses in multiple occupation: means of escape from fire) to the Rousing Act 1980".
15. In section 29(7) of the Land Compensation Act 1973 for the words "section 60 of the Housing Act 1969" there are substituted the words "Schedule (Houses in multiple occupation: means of escape from fire) to the Housing Act 1980" and for the words "section 60(2) of the said Act of 1969" the words "paragraph 5 of the said Schedule (Houses in multiple occupation: means of escape from fire).".")
The noble Lord said: My Lords, I beg your Lordships' pardon. I spoke to Amendments Nos. 141 and 142. Amendment No. 143 has already been spoken to with Amendment No. 96. I beg to move.
On Question, amendment agreed to.
11.6 p.m.
Baroness VICKERS Baroness VICKERS moved Amendment No. 144:
Page 164, line 45, at end insert—
(" .In section 77 of the 1957 Act (Definition of Overcrowding) in subsection (2) for "one half" there shall be substituted "one".")
The noble Baroness said: My Lords, I beg to move the amendment standing in my name and in the name of the right
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reverend Prelate. The statutory overcrowding standard enforceable by local authorities is virtually unchanged since the Housing Act 1935. At the present time all rooms normally used as living rooms and bedrooms are included in calculating the "permitted number" of any dwelling-house, with the exception of the kitchen, the lavatory and the bathroom, if there is one.
Therefore, I propose the introduction of the bedroom standard as a basis for calculation, and children from one to 10 years will be calculated as one unit. This proposal will not create any homelessness, but it will provide a situation which reflects, I suggest, the current attitudes to space requirements and presents a safety net which is appropriate to the life-styles of the 1980s, not the 1930s when the original standard was introduced.
By omitting babies up to the age of one year from this standard—they were also omitted from the original standard —parents will be provided with the opportunity to plan their future housing circumstances. I should like to emphasise that the proposals will have little overall effect on the housing situation because the problem is relatively small. It will assist families to plan their accommodation and enable local authorities to look at each property as a whole, having regard to the health and environmental standards of the 1980s.
I should like to mention that I moved a similar amendment in Committee, but I was told that it was not in order, and I said that I would try to introduce another one at this stage. In conclusion, may I add that this amendment involves no extra cost and no extra staff. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, I am grateful to my noble friend Lady Vickers for going to the trouble of tabling these amendments again so that the House can see the form that was originally intended. I thank her, too, for her detailed explanation.
First, I ought perhaps to reiterate a little of what I said in Committee. The existing standards are minima, admittedly lower than one generally finds today. But this is hardly surprising, because if

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the standards are contravened, the implications are serious; the landlord is guilty of an offence. The excess residents lose their security of tenure and homelessness may well result, causing very serious problems in those areas already subject to housing stress. I know that the right reverend Prelate and my noble friend are concerned about the number of people who are homeless or obliged to live in unsatisfactory hostels, but if this amendment is accepted it might result in an improvement in comfort for those already established in independent accommodation but at the high cost of swelling the ranks of the homeless.
I cannot readily accept what my noble friend said in Committee. She said that the amendment—and she repeated this tonight—would not cost any money or involve any extra staff. She said that it would have very little effect on the housing situation. Before coming to such a conclusion, we should have to estimate how many people would be displaced by a change in the standard. This would not be easy and wide consultation would be needed. We are always ready to consider fresh evidence, but so far we have not seen anything to persuade us that a change would be free of very serious and expensive consequences. There is a danger that an attempt to deal with what is perceived to be a problem will, in fact, create a very real and intractable problem. I would therefore ask my noble friend to withdraw her amendment at the moment.
11.12 p.m.
Lord SANDFORD: My Lords, I should like to thank the noble Baroness for moving this amendment, and I regret to some extent the less than cordial reception of it by the Government. Through this Bill, the local housing authorities have lost their power to control overcrowding in their own estates through landlord control, and in principle welcome the opportunity that the noble Baroness has taken of using this Bill to improve and bring up to date the criteria by which overcrowding is judged. I would hope, therefore, that the Government would look, not necessarily at this amendment, but this initiative by my noble friend with rather more consideration.
Lord HYLTON: My Lords, I should like strongly to support the spirit of this amendment. I thought that perhaps my noble friend Lady Vickers was being slightly sanguine in moving her amendment when she said that the writing into an Act of Parliament of this new standard would create no homelessness at all. I hope she is right, but I fear that she may be wrong. Nevertheless, like my noble friend Lord Sandford, I too thought that the Government were being unwelcoming. If they think it is wrong now to write this in, could they please tell us when they think it might be possible, because it will be a great and useful step forward.
It is already the practice of the best local authorities and the best housing associations to do something that is better and at a higher standard than the bedroom standard, and very much in line with the figures that her amendment suggests. I hope that the Government can be more forthcoming than they have been up to now.
Lord MOWBRAY and STOURTON: My Lords, with the leave of the House, I should like to say that we have every sympathy, as I said, with what my noble friend and the right reverend Prelate are proposing. But although we agree that it is a good and proper thing to aim for better standards, if it is going to be done at the cost of putting more people on the homeless list we think it could at this moment of time be counterproductive. As soon as the situation changes, the Government will alter their plans.
Baroness VICKERS: I thank the noble Lord for his reply. I cannot say I am satisfied with it. I had the assurance of the environmental officers who do this duty that there would be hardly any extra people needing housing. I should have thought that perhaps the noble Lord could say if he cannot bring it in now, that he would do so in, say, a year's time when he has had time to consult other people about possible numbers. I did not move the amendment without receiving an assurance that it would not create homelessness, and therefore with much regret I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 145 not moved.]
11.15 p.m.
Baroness VICKERS Baroness VICKERS had given Notice of her intention to move Amendment. No. 147:
Page 165, line 30, at end insert—
("Housing Act 1961 (c.65)
For section 16 there is substituted—
16.—(1) Where a local authority upon consideration of a report from a proper officer, or a complaint from a private tenant, are satisfied that any house which is occupied by persons who do not form a single household is not provided with such means of escape from fire as the local authority consider necessary, then the local authority shall, subject to this section, serve on the person having control of the house, a notice specifying—

(a) the works which, in the opinion of the local authority, are required to provide such means of escape; and

(b) such reasonable time, or times, within which the works are to be executed; and

(c) requiring the person on whom the notice is served to execute those works within the specified time or times.

(2) A local authority who are not, under the Fire Services Act 1947, the fire authority for the area in which the house is situated, or who have under section 12 of that Act, delegated all their functions in respect of that area to another fire authority, shall, before serving a notice under this section, consult with the fire authority concerned.
(3) Within seven days of the service of a notice under subsection (1) of this section, the local authority shall post a copy of that notice in some conspicuous part of the house, and it shall be an offence (other than on the authority of the local authority) for anyone to remove, damage, deface or obscure that notice, punishable, on summary conviction, by a fine not exceeding ten pounds for a first offence, and a fine not exceeding fifty pounds for a subsequent offence.
(4) Where a local authority receive a complaint from a private tenant that a house occupied by persons who do not form a single household is not provided with the necessary means of escape from fire, then a proper officer shall forthwith inspect that house and report to the local authority stating all the facts in the case and whether or not, in his opinion, the house is provided with the necessary means of escape from fire. Copies of that report shall be available to the private tenant (or his authorised representative) at all reasonable times, for a period of 28 days from the date of inspection, at the principal office of the local authority.
(5) In addition to serving a notice under subsection (1) of this section on the person having control of the house, the local authority may, at any time after the service of that notice and before the execution of the works, serve a copy of the notice on any other person having an interest in the house,
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and, where such a person, or a private tenant who has made a complaint to the local authority under subsection (1) of this section, gives notice to the local authority, the local authority shall provide him with a copy of any notice served under this section.
(6) The person on whom the notice was served may, within 14 days of the service of the notice, serve a counter-notice on the local authority—

(a) undertaking to carry out the works specified in the notice within the periods specified in the notice, and also stating the date upon which he intends to commence those works; or

(b) he cannot, or does not intend to, carry out the works specified in the notice within the periods specified in the notice; or

(c) undertaking to provide necessary means of escape from fire, and providing to the local authority an alternative specification of works and specifying alternative periods within which those works will be executed.

(7) Where—

(a) no such counter-notice as mentioned in subsection (6) is received by the local authority; or

(b) a counter-notice under subsection (6)(b) is received by the local authority; or

(c) a counter-notice under subsection (6)(a) is received, but specifies a commencement date which, in the opinion of the local authority, will cause an unreasonable delay; or

(d) a counter-notice under subsection (6)(c) is received but, in the opinion of the local authority, the alternative specification is unsatisfactory;

then the local authority shall themselves execute the works specified in the notice.
(8) Where a local authority have accepted an undertaking under subsection (6)(a) or (b) and the undertaker has failed to comply with any of the terms of his undertaking, then the local authority shall themselves complete the works specified in that agreed undertaking.
(9) Where the local authority are about to enter upon a house under the provisions of either subsection (7) or (8) of this section for the purpose of carrying out any works thereon, they shall serve on the person having control of the house a notice of their intention so to do, and if at any time after the service of such notice any person upon whom the notice was served, or any workman or contractor employed by him, is in the house for the purposes of carrying out any work, such persons shall be deemed to be obstructing the local authority in the execution of this Act, and liable on summary conviction to a fine not exceeding fifty pounds for a first offence, and to a fine not exceeding two hundred pounds for a subsequent offence, unless he proves to the satisfaction of the court that there was an urgent necessity to carry out the works in order to obviate danger to the occupants of the house.

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(10) Any expenses incurred by the local authority under this section including administration expenses and expenses incurred under subsections (1), (2), (3), (4), (5), (6), (7), (8) or (9), together with interest (at the rate fixed by section 171(2) of the Local Government Act 1972) when a demand for the expenses is served until payment is made, may be recovered by the local authority in accordance with the provisions of section 10(3), (4), (5), (6), (7), (8) and (9) of the Housing Act 1957.
(11) For the purposes of this section, "private tenant" has the meaning given to it in section 17 of the Rent Act 1977.")
The noble Baroness said: My Lords, I am in a somewhat difficult position over this because my noble friend Lord Bellwin, to whom I owe a great deal of thanks for accepting one of my amendments, referred to Amendment No. 147 along with a number of others, and I had no knowledge that he intended to do so. Therefore, I will not move this amendment now but may wish to bring it forward at Third Reading because there are a number of amendments I would like to suggest to the Government Amendment No. 143.
Lord HYLTON: My Lords, I consider my noble friend's Amendment No. 147 in many ways considerably superior to the Government amendment. I say that because it seems to contain more effective teeth, and I hope that between now and Third Reading the Government will look at the points I outlined earlier, and in my view what my noble friend suggests in No. 147 has an advantage in that it is stronger and more enforceable.
Baroness VICKERS: In view of my earlier remarks, my Lords, I will not at this stage move Amendment No. 147.
[Amendment No. 146 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 148:
Page 169, line 44, at end insert—
("(dd) Part IV of the Act of 1972 (conversion by reference to rateable values);")
The noble Lord said: My Lords, I will, with permission, speak at the same time to Amendments Nos. 151 and 154. These are all minor tidying amendments consequential upon the conversion of controlled tenancies into rent regulation under Clause 64. They deal with the situation whereby a landlord is entitled
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to serve a notice of increase in rent in respect of repairs or improvements carried out before decontrol, but has not done so. Under the Bill at present, the notice could still be served and the rent increased after decontrol. The amendments remove this possibility by repealing paragraphs 3 and 4 of Schedule 17 to the Rent Act 1977. The landlord will instead have to apply to the rent officer for a fair rent which will take account of the improvements and repairs. This will be so not only for decontrol under Clause 64, but also for previous decontrol under Parts III or IV of the Housing Finance Act 1972. I hope your Lordships will approve these minor improvements. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 149 and 150 en bloc:
Page 170, line 14, leave out ("87(5)").
Page 170,line 17, leave out from ("where") to ("before") in line 19 and insert (", on the determination or confirmation of a rent by the rent officer, the rent determined by him is registered, or his confirmation is noted in the register,").
The noble Lord said: My Lords, with permission, I will speak at the same time to Amendments Nos. 152 and 153. These are all minor technical amendments consequential on the Government's earlier amendments to Clause 61—Nos. 57 and 59 to 67—dealing with the effective date of rent registrations. They ensure that the necessary consequential amendments are made to Part VI of the Rent Act 1977 (housing association registrations) and that the new effective date rules apply only to registrations made after the relevant provisions are brought into operation. I beg to move.
On Question, amendments agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 151:
Page 173, line 20, after ("Act") insert—
("(aa) paragraphs 3 and 4 are hereby repealed;").
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 148. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 151A:
Page 173, line 30, at end insert—
("Protection from Eviction Act 1977 (c. 43)
The Protection from Eviction Act 1977 shall apply, where a person has been let into possession of a dwelling-house under the terms of a rental purchase agreement (within the meaning of section 87 of this Act) as if—

(a) the dwelling-house had been let to him as a dewlling under a tenancy which is not a statutorily protected tenancy (within the meaning of section 3 of that Act); and

(b) that tenancy had come to an end on the termination of the agreement or of his right to possession under it.").

The noble Lord said: My Lords, this is a minor amendment, effectively consequential on Clause 87, which gives new protection to those purchasing under rental purchase agreements. It provides that someone who was buying under a rental purchase agreement and who defaults on the payments cannot be evicted without a court order. I ask your Lordships to accept this amendment. I beg to move.
Lord GIFFORD: My Lords, this is a small, but important, point about which there have been some discussions outside the Chamber. I wish merely to thank the noble Lord for a most prompt and favourable response to a matter that was brought to his notice and which is now covered by this amendment.
Lord MOWBRAY and STOURTON: My Lords, with the leave of the House, I should like to thank the noble Lord, Lord Gifford, for the very helpful way in which he has advised us as to what he should like to see done in some of these cases.
On Question, amendment agreed to.
11.22 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 152:
Page 173, line 41, after ("in") insert ("Schedule 6 to the Rent (Agriculture) Act 1976 or in").
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 149. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 153:
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Page 175, line 9, leave out paragraph 74.
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 149. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 154:
Page 175, line 19, at end insert—
("77. Paragraphs 3 and 4 of Schedule 17 to the 1977 Act continue to have effect, notwithstanding paragraph 59 of this Schedule, in relation to a notice of increase served under paragraph 4 before the commencement of paragraph 59.")
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 148. I beg to move.
On Question, amendment agreed to.
Schedule 25 [Repeals]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 154A:
Page 176, line 2, after ("4") insert ("(2) and").
The noble Lord said: My Lords, this amendment repeals Section 4(2) of the New Towns Act 1959 which will become superfluous. The new housing subsidy system will make it unnecessary to pay to the Commission for the New Towns the Exchequer payments authorised by the subsection. The Commission for the New Towns will, in future, like new town development corporations under this Bill, receive the new housing subsidy. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 155:
Page 176, line 4, column 3, at beginning insert ("Section 16")
The noble Lord said: My Lords, my noble friend Lord Bellwin has already spoken to this amendment with Amendment No. 96. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 156:
Page 176, line 56, column 3, at end insert ("Section 60")
The noble Lord said: My Lords, likewise my noble friend has already spoken to this amendment with Amendment No. 96. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 157:
Page 177, line 4, at end insert—

(" 1971 c. 62.

The Tribunals and Inquiries Act 1971.

In section 7(3) the words "28(a)" and the words from "but" onwards.

In section 13(1) the words "(a) or ".

In Schedule 1 paragraph 28(a).")

The noble Lord said: My Lords, this is a minor repeal of the Tribunals and Inquiries Act consequential on Clause 71. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 158:
Page 179, line 18, at end insert ("and paragraph 7").
The noble Lord said: My Lords, with permission, with this amendment I would speak to Amendments Nos. 160, 161 and 163. All record repeals to the Rent Acts by earlier Government amendments. In the case of Nos. 158, 160 and 161, the repeals stem from the effective date amendments made to Clause 61 (Sections 57 and 59 to 67). In the case of Amendment 163, they stem from the amendments on decontrol provisions made to Schedule 24 (Sections 148, 151 and 154). I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 159:
Page 179, line 57, at end insert ("and paragraph (b)").
The noble Lord said: My Lords, with the permission of your Lordships, with this Amendment I would speak to Amendment No. 162 as well. It might be convenient if I take them together. They repeal Section 69(4)(b) and paragraphs 13 and 14 of Schedule 11 to the Rent Act 1977, which provide for the provisional registration of a fair rent. Where a
376
certificate of fair rent has been issued to a person intending to grant a regulated tenancy, he may apply for a provisional registration of a rent in accordance with the certificate. This rent will not take effect unless the rent officer is notified, within a set period from the date of the registration, that the regulated tenancy has been granted. These amendments repeal this little-used procedure.
This is one of a number of minor improvements to the certificate of fair rent procedure that have been agreed with the Institute of Rent Officers. We have in mind to make the others by statutory instrument at an early date. My Lords, I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 160 and 161:
Page 180, line 15, at end insert ("In section 87, subsections (3) to (5).").
Page 180,line 24, at end insert ("Section 96(1) and (2),").
The noble Lord said: My Lords, I spoke to Amendment No. 160 and to Amendment No. 161 when I moved No. 158. I beg to move the two together.
On Question, amendments agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 162:
Page 181, line 7, after ("paragraphs") insert ("13, 14 and").
The noble Lord said: My Lords, I have already spoken to this amendment, when I moved Amendment No. 159. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 163:
Page 181, line 27, leave out from ("17") to ("10") in line 30 and insert ("paragraphs 3, 4,").
The noble Lord said: My Lords, I spoke to this amendment when I moved Amendment No. 158. I beg to move.
On Question, amendment agreed to.

BREASCLETE HARBOUR ORDER CONFIRMATION BILL
7.5 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, I beg to move that the Bill he now considered on Report.
Moved, That the Bill be now considered on Report.—(The Earl of Mansfield.)
Lord ROSS of MARNOCK: My Lords, I should like to congratulate the Government on the Bill and the fact that they have brought it forward. It is some months ago since I addressed myself to the Confirmation Order on the Ardveenish Harbour Bill. I can remember asking the Government at that time whether we could be assured that the Secretary of State would bring forward the necessary authority for financing it. I just discovered today, of course, that there has been no action taken to forward that harbour.
So I wish to congratulate first the Highlands and Islands Development Board on this occasion for actually having built the harbour; they have actually built the facilities and they are in operation. Your Lordships will remember that this was originally mooted because of the feeling that we should make arrangements for the fishing for blue whiting and putting this new harbour on the West Coast of Lewis. It is all there and, believe it or not, the ships are coming in. They are actually delivering fish, landing fish, and

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the fish are being gutted, filleted and dried in the facilities provided by the Highlands and Islands Development Board. There is only one point—they cannot charge anything for the landing of the fish until they get this order.
Therefore, my first question to the Government is this. Has there been any unseemly delay in bringing this matter forward because, certainly in these days of stress and strain financially, we do not want to deny the Highlands and Islands Board the opportunity of maximising what it can get from this. It must involve very considerable expenditure and I think that the final account must come to about £1 million. Can the Minister tell me whether any EEC grants are involved here and, if so, their extent?
On the whole there is nothing more to be said except to offer congratulations all round, especially to the Government for bringing it forward. Fancy this Government of all Governments confirming a public harbour instead of selling it off and letting it off to some private firm! There is a lot to be said for this new look as far as their policies in Scotland are concerned. I certainly welcome the Bill and express my hope that Breasclete Harbour will go from strength to strength, because at present the fishing industry is in a bad way. In fact, the Scottish inshore fishermen are not fishing, for the simple reason that prices are so low that they feel that it is not worth their while.
I hope that that will not happen here. I hope that the Government will sort the matter out in our negotiations with the EEC. If any section of the Scottish communities in the Highlands and Islands and in the north of Scotland merit support in their battle in respect of the future of their industry, it is certainly the fishermen.
7.9 p.m.
The Earl of MANSFIELD: My Lords, as the noble Lord has said, the pier is in fact already in operation, but so is the factory—I know, because I opened it. The fish supplies to the harbour have not been entirely uninterrupted. As the noble Lord has implied, this is a highly specialised market so far as fishermen are concerned and there have been times when they have not been altogether keen to land at
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Breasclete because they could obtain better prices for fish elsewhere. But I am glad to say that fish landings this year are consistent with the requirements of the factory.
Lord WELLS-PESTELL: My Lords, will the noble Earl allow me to interrupt and say that we on this side of the House really cannot hear him? It is not his fault. I know that the Hansard reporters cannot hear speakers, either. I am not referring just to the noble Earl, Lord Mansfield. I do not know what we can do about it. May I suggest that we need to speak right into the microphones?
The Earl of MANSFIELD: My Lords, I can hear myself, and I love the sound of my own voice. It is rather like the noble Lord, Lord Ross, I fancy. On this particular occasion I must throw my voice, although I think that the loudspeakers work better on our side than on the side of the Opposition. I do not particularly wish to repeat myself. The factory provides employment for the equivalent of 20 full-time jobs, which is good, and
up to 50 local people are employed on a part-time basis. In a place like Lewis that is very good indeed. The cost to the HIDB of constructing the pier and the adjacent service site, was £300,000—which, of course, was back in 1978. I am afraid I do not know whether application was made for a grant from the European Community or, if it was, whether it was granted. However, I will consult on that point and let the noble Lord know.
The hope of the Highlands Board—indeed, of the Government and all of us—is that this particular development will lead to further onshore developments which will provide more employment for the population of this rather remote community.

BRITISH RAILWAYS ORDER CONFIRMATION BILL
The Earl of MANSFIELD: My Lords, I beg to move that this Bill be now considered on Report.
Moved, That the Bill be now considered on Report—(The Earl of Mansfield.)
Lord ROSS of MARNOCK: My Lords, I was very enthusiastic in relation to the last Bill. I cannot say the same about this one, for the simple reason that, as far as I can see, this Bill is occasioned by local government reorganisation in Scotland which took place in, I think, 1973.
Lord LYELL: My Lords, 1975.
Lord ROSS of MARNOCK: My Lords, I think that the legislation was passed before then, and effectively from the point of view of its operation. Then, of course, things like boroughs were wiped out; sheriff substitutes have also gone. Reference to the Police Act 1946 is, of course, long outdated. Let us compare what is here with what was in Section 53 of the British Transport Commission Act 1949, which was a local Act. If you are looking for it, remember to ask for the local Act. These are the only changes that are made, plus, so far as I can see, one other change.
There is introduced in subsection (4) the privilege, the powers and protection of constables:
"in, on and in the vicinity of the railways, harbours, docks, inland waterways, stations, wharves, garages, hotels"—
that was always there by the way but I shall return to it—
"works, depots and other premises, and in vessels and hovercraft".
Vessels and hovercraft were not in the 1949 Act, but they are here, so we are bringing them up to date. Full marks, one might say, to the British transport authorities.
But although they are pretty late in bringing forward this Bill, they are too early as well; for if they had waited just a little longer they might have got it right in modern terms. It says "hotels", but the British Transport Commission is to get rid of its hotels. So in a couple of months the word "hotel" may be quite otiose. But I have not finished yet. The provisions says:
"…and in vessels and hovercraft, belonging or leased to or worked by any of the Boards or their wholly-owned subsidiaries".
But in future these subsidiaries are not to be wholly owned. The result is that this will be wrong in a few months. Would it not have been better for the Scottish Office to advise British Rail to hold off?—bearing in
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mind that the changes that are to be made should have been made long before this. Now that they are being made, it looks as though the situation will be very different. Indeed, parts of this legislation will be quite wrong and quite unnecessary.
There is only one other suggestion that I want to make. Is it not a little unfair that the cost, charge and expenses of and incidental to the preparing of, obtaining and confirming of this order shall be paid by the Board—that is, the Railways Board? It is not really responsible for the necessitating of this order. It was the Government that reorganised local government and so threw the thing out of joint as regards Section 53 of the 1949 Act. Indeed, it is the Government again who are enforcing changes and once again making it doubtful as to whether it will be accurate for very long. I wonder whether any thought has been given to these matters by the Scottish Office, and whether I am entirely wrong in my suggestion that this was occasioned by local government reorganisation as long as seven years ago.
The Earl of MANSFIELD: My Lords, my understanding of this Bill, which is a private Bill, is that it has nothing to do with local government at all. The purpose of it is simply and solely to amend Section 53 of the British Transport Commission Act 1949 in its application to Scotland. But by the provisions of Section 53 of that Act, which in general applied throughout Great Britain, the British Transport police constable was able to act as a constable only when he was in, on, or in the vicinity of the railways, harbours, and premises of the British Transport Commission, or, since 1962, its successor undertakings, and British Transport Hotels, except when he—that is the officer—was in pursuit of persons who had committed an arrestable offence in the vicinity of those premises.
It is paragraph 3 of the schedule with which we are really concerned. The purpose of that is two-fold. It enables a British Transport police constable to continue to act as a constable when off the premises of the board or its subsidiaries, and furthermore to act as a constable on such conveyances as ships and hovercraft, which the noble Lord, Lord Ross, has related to the House, operated by the board or their subsidiaries and on premises of the board's subsidiaries.

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I have not looked this up, but we can see from the Bill that "wholly-owned subsidiary" has the same meaning as in Section 92 of the Transport Act 1962. I imagine that when the legislation which is proposed to allow what is nowadays called the privatisation of British Rail to take place, there will have to be an amendment to the Transport Act 1962 or it will make a nonsense. This is perfectly well in point, and I would remind the noble Lord that when it was contemplated I do not suppose that we had got too far along the road towards the privatisation of British Railways.
I should just add that a British Transport police constable appointed under Clause 3 shall not act as a constable unless he is in uniform. If he is acting as a constable out of uniform he must hold authority from the sheriff or the chief police officer of the transport police to do so, and shall show such authority when requested to do so. So far as the cost is concerned, I think it is perfectly normal in a private Bill, such as this, that costs fall on the person or organisation that desires the Bill. I do not think I can help the House further.
Lord ROSS of MARNOCK: My Lords, in order to cover the changes that will be necessary in this particular Bill the Government could have done it within their own public Act, which would save money to the board. If he goes back and has a look at Section 53 of the British Transport Commission Act, I think subsection (4), that is the only change that is being made. Subsection (4) is one of these sort of omnibus subsections in application to Scotland. For "boroughs" you will read "burgh"; for "justices" you will read "sheriff" or "sheriff substitute", and points like that. The Police Act 1946 and 1947.
What they have done, instead of making the changes there, is to take the opportunity of rewriting Section 53 in much more lucid language and making the changes that I have suggested that are here about vessels, and hovercraft, et cetera. If the noble Earl looks back he will probably find that there has been no change in the English and Welsh situation because there was none needed. Indeed, we could have carried on but for the desire to make the necessary changes.
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Even what the noble Earl read out about them being in uniform or acting without uniform, is all in Section 53, and this is merely a sensible rewriting of Section 53. I do not think there is very much difference in relation to the carrying out of investigations and arresting any person "whom he has followed from." That is all there too, or most of it. I think myself that they would have been well advised, in view of the changes that are proposed and were announced last week, to just hold this back for another length of time. It was not going to cause any trouble at all to British Transport.
However, as the noble Earl says, it will be all right for a week or two, or a month or two, and depending upon when we get the change of legislation, then we are going to have to deal with another confirmation Bill, which means that the noble Earl will have to listen to another speech of mine. I know that is bad news for him, but there you are. I do not think it is a very good piece of legislation in the circumstances.
Lord LYELL: My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.
[The Sitting was suspended at 7.24 p.m. and resumed at 8 p.m.]

UNITED REFORMED CHURCH LION WALK COLCHESTER BILL
Brought from the Commons; read 1a, and referred to the Examiners.
PIER AND HARBOUR ORDER (GREAT YARMOUTH WELLINGTON PIER) CONFIRMATION BILL
Examiners Certificate that no Standing Orders are applicable: Ordered to lie on the Table.