Lords Sitting of 26 June 1980

Preamble
The House met at three of the clock: The Chairman of Committees on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.
The Lord Henniker—Sat first in Parliament after the death of his father.

PRODUCT LIABILITY
Lord GISBOROUGH: 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 will not endorse the EEC draft Directive on Product Liability until they have consulted British industry.
Lord LYELL: My Lords, the Department of Trade is now considering the views of over 300 interested parties whom it consulted last year about the draft directive. The Government will, of course, take account of these and all other views expressed before deciding their attitude to the draft.
Lord GISBOROUGH: My Lords, I thank the noble Lord for that Answer. Can he assure the House that the additional cost to the consumer arising from legislation that may he introduced to cover the provisions of the directive will be fully explored before any conclusions are reached concerning the United Kingdom's position?
Lord LYELL: My Lords, I can indeed give the assurance to my noble friend that these problems are being considered at the moment, and indeed that all views are being taken into account.
Baroness HORNSBY-SMITH: My Lords, will my noble friend also give us an assurance that he will consult the retail trade? Is he aware that the proposals that have been made make the retailer responsible for defective goods, and that
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in many people's view this is totally unrealistic? However firms check the initial purchase, most goods are prepacked, and purchasers do not want the goods that are open on the counter; they want the prepacked goods that have not been handled. Can my noble friend say how on earth the retailer can know whether they are faulty when he does not make them and does not pack them?
Lord LYELL: My Lords, I hope that my noble friend does not expect me to go beyond the present law in the United Kingdom, of which no doubt she and the House are aware, because the present position is that any purchaser who is injured or harmed by defective goods can obtain, and indeed does obtain, compensation under the law of contract from the supplier. In this case regrettably it is usually the retailer rather than the manufacturer.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness White): My Lords, may I ask the noble Lord whether he has read, marked, and learned the 50th Report of this Session from your Lordships' Select Committee on the European Communities? The committee took considerable pains in this matter and make a number of recommendations, and I would commend the report to all Members of the House who are interested.
Lord LYELL: My Lords, the noble Baroness will, I hope, not be surprised to hear that I certainly have read this report. I hope that I have learnt it. I have indeed marked it, and the noble Baroness and the House will, I am sure, have noticed that there is a Motion on the Order Paper (I think that the noble Baroness will find it on page 2689) which is in the name of the noble and learned Lord, Lord Fraser of Tullybelton, that this report be discussed in your Lordships' House.
Baroness HORNSBY-SMITH: My Lords, does not my noble friend agree that, if somebody manufactures a product and a retailer markets it, it is really unrealistic to expect the retailer to be responsible for it since he does not make it?
Lord LYELL: My Lords, I understand that this position is under review, but

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that we cannot go further than the position I mentioned earlier to my noble friend. Indeed, I think it would not be in my province. It is far more in the province of the noble and learned Lord who normally sits upon the Woolsack, and indeed other noble and learned Lords, to pursue this happy subject through the labyrinth of the laws of contract and the laws of liability, because, as my noble friend will no doubt be aware, there are several stages of manufacture.
Lord ELWYN-JONES: My Lords, will the noble Lord examine the implications of the case of the snail in the ginger beer bottle and its possible impact on this fascinating subject?
Lord LYELL: My Lords, the case of Donoghue v. Stevenson is always in my mind. Indeed, this was one of the first steps that I made in my happy education so far in the law. I cannot quote chapter and verse—and indeed I think it was a Scottish case—from this side of the House, but we are aware of that. I hope that the law of strict liability has progressed a little further than that.
Lord DRUMALBYN: My Lords, will my noble friend confirm that it is the draft directive that the noble and learned Lord, Lord Fraser of Tullybelton, is seeking to discuss?
Lord LYELL: My Lords, I am grateful to my noble friend. Indeed, that is the instruction that I have. But I have no doubt that your Lordships' House will be able to discuss this draft directive, the convention, and indeed other matters so far as strict liability is concerned.

GIBRALTAR: SPANISH PROHIBITED AREA
3.11 p.m.
Lord BOYD-CARPENTER: 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 Spanish Government have yet abandoned their attempted blockade of the British colony of Gibraltar; and
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whether the restrictions imposed by the Spanish Government on the use of Spanish air space by aircraft operating in and out of Gibraltar airport have yet been withdrawn.
Lord TREFGARNE: My Lords, both Governments are continuing to work for the early implementation of the agreement on Gibraltar which my noble friend reached with the Spanish Foreign Minister on 10th April. But we regret that preparation of the necessary practical steps was not completed by 1st June as envisaged. The Spanish prohibited area remains.
Lord BOYD-CARPENTER: My Lords, while thanking my noble friend for that moderately encouraging reply, may I ask what are the practical steps necessary for opening a gate in some barbed wire?
Lord TREFGARNE: My Lords, the Spaniards are experiencing a number of administrative difficulties in this area, but they are moving to solve these difficulties and we wish to support their endeavours in that direction.
Lord GORONWY-ROBERTS: My Lords, could the Government be a little more informative about the progress made in regard to removing the restrictions on the use of air space around Gibraltar, these being a continuous and possibly imminently dangerous threat to aircraft and those who travel in them?
Lord TREFGARNE: My Lords, the restrictions on the air space around Gibraltar airport do not threaten the safety of operations into Gibraltar airport, but they are certainly an inconvenience for airlines operating in there. If there were a question of safety, then of course operations would not be permitted. However, I can say that we expect the prohibited area to be modified or removed in the context of an overall settlement.

EUROPEAN PARLIAMENT: ELECTORAL PROCEDURE
3.14 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 what consideration is being given to the system that will be adopted to elect Members of the European Parliament in June 1984; and for an assurance that Parliament will be fully consulted about this in ample time to ensure the smooth working and public understanding of the new arrangements.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the Treaty of Rome specifies that although it is for the European Parliament to draw up proposals for a uniform electoral procedure, these cannot take effect until they have been approved unanimously by the Council of Ministers and adopted by member states in accordance with their respective constitutional requirements. Parliament will therefore have ample opportunity to consider this matter when legislation is introduced to incorporate the European Parliament's proposals into our own electoral law.
Lord CHELWOOD: My Lords, may I put two short questions to my noble friend? First, when Article 138 of the treaty refers to a uniform procedure in all member states, of which he has spoken, is that not clearly intended to mean also a uniform system? Secondly, is my noble friend aware that the Procedure Committee of the European Parliament, which has been sitting for a good many months, is now not likely to report its views on what system they recommend or what the options are until towards the end of the year? Is there not a risk therefore that, as in 1978 and 1979, both Houses of Parliament will be rushed off their feet and not given a fair opportunity to express their views, and for those views to be taken into account by the Government?
Lord BELSTEAD: My Lords, my understanding of the first question is that the answer is, yes; but of course it would be premature to say what proposals the Parliament will make, or whether indeed the Council of Ministers will adopt those proposals. The state of play regarding my noble friend's second supplementary question is that the matter is presently being considered by a sub-
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committee of the Parliament's Political Affairs Committee, and that committee will report to the European Parliament advising them on the proposals to be made to the Council; and anyone who may read the report of these proceedings will take on board what my noble friend said in his supplementary question.
Lord BYERS: My Lords, can the Minister give some indication of the timing of this matter? How soon after the report has been received from the committee is it likely that Her Majesty's Government will bring this matter to both Houses of Parliament?
Lord BELSTEAD: It is not a question of waiting until the report is received from the committee, my Lords, but a question of waiting until unanimous agreement has been reached in the Council of Ministers.
Lord BYERS: I will therefore rephrase the question, my Lords. How soon after that may we expect to have discussion in this House so that consultations can take place?
Lord BELSTEAD: My Lords, as the question is hypothetical, we have not yet given consideration to the matter.
Lord STEWART of FULHAM: My Lords, may we take it that the Government are anxious to secure a uniform method and system of election and will do whatever they can to accelerate the process, because it is bound to require a good deal of consideration before agreement is reached all round?
Lord BELSTEAD: My Lords, I would say, with respect, that this is the difference between the optimist and the pessimist. The noble Lord will remember that the optimist is the man who believes his glass is half full while the pessimist believes it is half empty. It is entirely for the noble Lord's imagination as to what view Parliament will take of proposals, if they come forward and if they are unanimously agreed by the Council of Ministers.
Lord DUNCAN-SANDYS: My Lords, do Her Majesty's Government recognise that the majority of the member states of the Community will undoubtedly ask

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for some system of proportional representation?
Lord BELSTEAD: My Lords, like the noble Lord, I can only conjecture. As I have said at least twice, we must wait to sec what those proposals are and then whether they are agreed unanimously by the Council of Ministers.
Lord CLEDWYN of PENRHOS: My Lords, would it not need an optimist to believe that the Prime Minister would accept proportional representation?
Lord BELSTEAD: That also is pure conjecture, my Lords.
Viscount SIMON: My Lords, reverting to an answer the noble Lord gave in which he said that Parliament could not be consulted until the Council of Ministers had reached a unanimous conclusion, may I ask whether it would not be right for Parliament to be consulted when the proposals of the European Parliament Committee are available and before the Minister, on behalf of our Government, either agrees or disagrees with them?
Lord BELSTEAD: My Lords, that, of course, is a matter for the usual channels.
The Earl of BESSBOROUGH: My Lords, in supporting my noble friends Lord Chelwood and Lord Duncan-Sandys on this matter, may I ask the Minister whether he really thinks it is fair that a party which in fact polled only 50 per cent. of the votes obtained 75 per cent. of the seats; and is he aware that while I am, with other noble friends, a convinced Conservative and a supporter of electoral reform, would he consider this to be a just solution?
Lord BELSTEAD: My Lords, if my noble friend is referring to the last elections for the European Parliament, I can only answer that Parliament took the view that the most appropriate system was that of direct single member representation in individual constituencies, and that is the basis on which that election was contested.
Lord CHELWOOD: Nevertheless, my Lords, will my noble friend kindly bear in mind that, apart from Greenland, this
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country was the only one which did not include an element of proportional representation in the system that they adopted, and as a result it is hard, if not impossible, to deny that the results were grossly unfair?
Lord BELSTEAD: My Lords, I accept the facts which my noble friend puts to me, but I must repeat at the end of these several questions that we are, first of all, waiting not only for proposals but for unanimous agreement, and it will then be for Parliament to decide exactly how that agreement should be translated, if it is translated, into the law of this country.

UK COAL EXPORTS
3.20 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper, and, in so doing, may I draw attention to a misprint? The second time the word "published" appears in the Question, it should read "publicised".
The Question was as follows:
To ask Her Majesty's Government why, in the World Coal Study (WOCOL) recently published and widely published. Britain is not included among countries considered to have export potential.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the World Coal Study was prepared by an international team which included the National Coal Board and the United Kingdom private sector coal interests. Her Majesty's Government were not involved, and I cannot therefore answer for the conclusions reached by the authors of the report. I can assure the House, however, that the National Coal Board was closely involved in the World Coal Study and is very well aware of the growing scale of the world market for coal. While the board's first priority is to supply the home market, exports of about 2 to 3 million tonnes are in fact made each year to certain customers who either want particular types of coal produced by the board, or have looked to the United Kingdom as an alternative source of supply for part

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of their needs. This trade seems likely to continue.
The Earl of LAUDERDALE: My Lords, in thanking my noble friend for that rather evasive reply to my Question, may I ask whether he would not agree that the attitude of the Coal Board, and indeed of the Government, as represented by his reply, is of a somewhat defeatist character and quite out of line with the bold declaration of Venice to which the Prime Minister adhered only the other day?
The Earl of GOWRIE: My Lords, I cannot he evasive about a reply to a Question which is not properly addressed to me. As I have told my noble friend, Her Majesty's Government were not involved here.
Lord STRABOLGI: My Lords, is the noble Earl aware that it is the Government's unrealistic financial policy that is leading to pit closures?
The Earl of GOWRIE: My Lords, I am stupefied by that supplementary question from the noble Lord. As the noble Lord is well aware, being a considerable expert on coal, Her Majesty's Government are engaged in very heavy financial subsidies to the coal industry in this country, and that is probably one of the reasons why we are increasing exports.
The Earl of LAUDERDALE: My Lords, does my noble friend not agree that in fact last year productivity was up very significantly, thanks in part to the Tory tax cuts; that output was up higher in the mining industry than in any other industry in the country; and that it is time to be bold, to pursue a bold coal export policy, instead of one which is rather apologetic and negative?
The Earl of GOWRIE: My Lords, if I may take up my noble friend's point, as I said to the noble Lord, Lord Strabolgi, we are pursuing a bold policy, but it would be most welcome to the Government if boldness in financial terms from our point of view was met—as in many significant cases it is being met—by increased productivity within the coal industry itself.
Lord SHINWELL: My Lords, in
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order to counter some of the pessimists who have been asking questions about this matter—I am not sure whether they know all about it—may I ask the noble Earl whether he is aware that finance is the dominating factor here, and that without adequate finance it is not possible to proceed? Is the noble Earl aware that one of the most important finance houses in the City of London, indeed perhaps the most supreme merchant bank in the City of London, is closely associated with the organisation? Does he agree that as long as that is the case, we need have no doubt about the potential involved?
The Earl of GOWRIE: My Lords, I certainly welcome the degree of enthusiasm with which investment is being placed in the coal industry, and I agree with noble Lords that this country has a great coal potential. Like most noble Lords, I should of course wish to see us importing rather less, but that will depend upon the Coal Board modernising and being able to compete successfully with overseas coal producers; and that is what we wish to see achieved.
Lord STRABOLGI: My Lords, will the Government consider increasing the financial limits that they have placed upon the coal industry to a more realistic level?
The Earl of GOWRIE: My Lords, I think that in general terms that would be suicide.
Lord HALE: My Lords, is it not a fact that we have for years been discussing massive developments of coalfields, including the one now under consideration in my native county? Does it not appear that the Government are thinking of stopping some of these tremendously important industrial developments, which are the basis of the foundation of our fuel policy, as decided in this House? Is this not a question which affects both industry at large and of course war-time industry? Is not the Statement, coming as it did from Venice, almost a clear surrender of a large part of our industrial future?
The Earl of GOWRIE: My Lords, with regard to the coal industry overall, the Government are not anxious to stop anything. That industry has a great

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potential, and our policy is to encourage it to go.
Lord DERWENT: My Lords, in my continual thirst for knowledge may I ask my noble friend what the initials WOCOL represent? They do not to me seem to represent the World Coal Study.
The Earl of GOWRIE: My Lords, share my noble friend's pessimism about the future of acronyms, which seem to be growing apace in public life. My advice is that WOCOL stands for World Coal Study, but how this acronym was arrived at is I fear another Question, which I would seek to answer if my noble friend put it down.
The Earl of LAUDERDALE: My Lords, does my noble friend not agree that the Government's intention to assist the coal industry to the extent of £200 million in real terms each year for the next three years is not only a great encouragement to the industry, but should mean that its target to the end of the century could be raised to 200 million tonnes from 170 million tonnes?
The Earl of GOWRIE: My Lords, I quite agree with my noble friend, but it is very difficult to please noble Lords opposite.
Lord STRABOLGI: My Lords, in view of what the noble Earl has said, may I ask the Government whether they are aware that if productive pits are sacrificed on the altar of short-term monetary fanaticism, they will not be easily forgiven?
The Earl of GOWRIE: My Lords, anyone who thinks that £200 million a year is short-term monetary fanaticism needs to take lessons in arithmetic.

BUSINESS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30, my noble friend Lord Trenchard will repeat a Statement being made in another place on British Steel Corporation finances.
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It may also be for the convenience of your Lordships if I announce that dinner will be available this evening at the usual time.
The Committee stage of the Housing Bill will be adjourned at approximately seven o'clock, for about an hour. The Third Reading of the Laboratory Animals Protection Bill and the Second Reading of the Pier and Harbour Order Confirmation Bill will be taken during that adjournment.

CLIFTON SUSPENSION BRIDGE BILL
Read 3a, with the amendments, and passed, and returned to the Commons.
YORKSHIRE WOOLLEN DISTRICT TRANSPORT BILL
Read 2a, and committed to an Unopposed Bill Committee.
SEA FISH INDUSTRY BILL
Read 3a, and passed.

HOUSING BILL
3.29 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Bellwin.)
Baroness BIRK: My Lords, before we embark upon the Committee stage of the Bill I should like to point out that this is an extremely long and complex Bill, and I feel that the Government should have made available Notes on Clauses. During the time that I was a Minister in the Department of the Environment I took through this House about a dozen Bills, and to the best of my knowledge on all occasions I provided Notes on Clauses, as the colleague of the noble Baroness, Lady Young, will vouch for. She was

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very appreciative, and certainly I would have appreciated it.
I should like to draw your Lordships' attention to Recommendation 57 of the Renton Committee's report on procedure for the preparation of legislation, which says:
"The practice should be developed of making available for Committee stage debates in both Houses Notes on Clauses and similar additional explanatory material".
I think this is a matter of great importance in a Bill of this type. It really does mean that it is going to take longer, without any filibustering, because it is an extremely difficult Bill to understand. It is a great pity that the Government are causing themselves, as well as the rest of us, a great deal of inconvenience and extra trouble.
Several noble Lords: Hear, hear!
Lord BELLWIN: My Lords, this decision follows the one made by my right honourable friend when he decided not to make these papers available in another place. Instead, my right honourable friend the Minister offered to explain any points which might be causing difficulty to the Standing Committee which considered the Bill in another place. Noble Lords will know that many such points were raised in that Committee, and my right honourable friend went to great lengths to provide the explanations that were sought in terms which were readily understandable. I am sure that this was far more useful to them than to have copies of the lengthy and technical Notes on Clauses. Of course, I will gladly do no less.
I should draw attention to the fact that I have made available in the Library an indexed guide to the Standing Committee proceedings in another place so that your Lordships may have ready access to the explanations given by my right honourable friend. In so far as those explanations already given do not answer points which concern your Lordships, I will undertake to do my best to provide similar expositions. In the light of that assurance, which I hope your Lordships will accept in the spirit in which it is given, and the index which has been provided, I really could not accept that the absence of the Notes on Clauses is any impediment to your Lordships' understanding of the
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Bill. I feel it would not take us much further, but I could quote some precedents on the other side of the House if there was really any purpose in so doing.
Lord STRABOLGI: My Lords, perhaps with the leave of the House, since I am taking part in Part II of the Bill, which is just as complicated as Part I, which is coming before your Lordships today, I may endorse what my noble friend has said. I cannot understand why the Government are so furtive about this Bill, why they cannot be more open about it. I absolve at once the noble Lord, Lord Bellwin. We know very well that this is not his personal decision but a decision made by his right honourable friends in another place. But this is a very complicated Bill. It is of great interest to a great many private tenants outside this House who wish to understand it. They wish to know how the Government are proposing to change the various contracts of tenure, which they are intending to do in the Bill. They want to understand the Bill.
Will the Government at least give an undertaking that if they are not going to explain and make available these Notes on Clauses they will, after the Bill becomes an Act, publish a plain man's guide to it so that at least its provisions will be understood? Also, may I say in the presence of the Scottish Minister, that when a similar Bill, the Tenants' Rights (Scotland) Bill, came before your Lordships the other day, in reply to a similar question by my noble and learned friend Lord McCluskey, the noble Earl, Lord Mansfield, said—here I quote:
"I shall think about his suggestion that Notes on Clauses should be published, or provided.… I think the answer to his request is yes, probably".—[Official Report, 24/6/80; col. 1530.]
Could therefore England and Wales follow the excellent example of Scotland?
Lord BELLWIN: My Lords, I do not know whether "Yes, probably" means, "Yes, of course". I would not have thought it necessarily meant the same thing, but that is not for me to say. Just to have the record straight, may I say that those of your Lordships who have not seen that which has been prepared and put into the Library and who are interested in the Bill, ought to take the opportunity so to do because, for

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myself, I have found that far more helpful an explanation than ploughing through the great technicalities in the Notes on Clauses. I hear what the noble Lord says, and of course I undertake to convey his observations to my colleagues in another place. That goes without saying. I repeat, before sitting down, with your Lordships' permission—perhaps I did not make it sufficiently clear a moment ago—that it goes without saying, I hope, that if any noble Lord wishes to have any information at all that I can give I shall be glad to try to give it.
Lord ROSS of MARNOCK: My Lords, am I right in thinking that this measure was guillotined in another place? If it was guillotined, how could these full explanations be available when they were not given?
Lord BELLWIN: My Lords, I have already said that I undertake to give any explanations way beyond what noble Lords may themselves have to delve out in dealing with the whole of this Bill. I have said so and I will do so. Beyond that I do not think I can go at this moment.
Lord ELWYN-JONES: My Lords, helpful as the noble Lord always is to the House, to have information before the actual occasion when the Committee has to consider the point is far more important than later guidance by the Minister, however generous that might be. Is the noble Lord not aware that this really is contrary to what has become increasingly the practice of this House?
Several noble Lords: Hear, hear!
Lord ELWYN-JONES: My Lords, for some years now, in matters of this kind, the notes have been made available to those who have to function in these debates without much, if any, secretarial or research assistance, which usually is not available. It is not right that your Lordships should have to go through hundreds of pages of proceedings in another place when the Notes on Clauses could be made available here. I do not understand this reluctance unless it reflects a total lack of faith in the Bill on the other side of the House.
Lord BELLWIN: My Lords, I am sure that the noble and learned Lord does
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not expect me to concur with his last observation; nor do I. I really did not want to get into the realm of trotting out a whole series of precedents, because frankly I do not think I should take up your Lordships' time in doing it. But I will quote just three which are readily available: the Water Charges Equalisation Bill 1977, when no Notes on Clauses were given by the Labour Party at that time; the Home Purchase Assistance and Housing Corporation Guarantee Bill 1978; the Local Authorities (Restoration of Works Powers) Bill 1977. I just did not want my private office wasting its time—
Lord STRABOLGI: Wasting time?
Lord BELLWIN: Perhaps the noble Lord will bear with me. I did not want it wasting its time in getting out a whole list of precedents. But, of course, it would gladly do so if it was felt that I needed to make a greater case. I really do not think I do.
Lord ELWYN-JONES: My Lords, with great respect, those precedents surely are trivial in comparison with an important Bill of this kind, affecting almost every household in the country?
Lord DENHAM: My Lords, I think noble Lords opposite have on this expressed the point of view which they obviously feel very sincerely. Of course, if they are blaming the Government it is all members of the Government who are equally to blame, but I think we could consider what noble Lords opposite have said and perhaps we might now get on with the Bill itself. I do not want to belittle any further argument they have, but I think we take the point.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Right to acquire freehold or long lease]:
3.40 p.m.
Lord HYLTON Lord HYLTON moved Amendment No. 1:
Page 2, line 4, leave out from ("house") to end of line 6.
The noble Lord said: I look on it as a privilege to speak to this first amendment

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to what is undoubtedly not only a very complex but also a very controversial Bill. The Bill has aroused considerable anxiety and interest outside the Chamber, judged by the weight of stuff, which I am barely able to lift—it occupies a file about two inches thick—which has been sent to me. In view of this outside interest, I hope that—
Baroness BIRK: We cannot hear what the noble Lord is saying. I do not know whether the microphone has moved, or what has happened, but we cannot hear a word of what is, I am sure, a very valuable contribution.
Lord HYLTON: I apologise for inaudibility. I was going to say that I hope my noble friend Lord Bellwin will be prepared to listen very carefully to the arguments that will be brought forward on these amendments, and that he will persuade his ministerial colleagues in another place to do the same. It may be already known to your Lordships that the housing association programme for England and Wales, which would in normal times have amounted to no fewer than 43,000 new or rehabilitated units, has been cut for 1980–81 to 22,000. That represents a cut of nearly 50 per cent. —a cut that will have a very serious effect on many families and individuals living in the most unsatisfactory housing conditions.
It is in the light of this fact that I have put down Amendment No. 1 as a probing amendment. I am seeking to discover whether, and, if so, by how much, Housing Corporation loans to housing associations are likely to be reduced in the current year as a result of a duty placed by the Bill on the Housing Corporation to lend to tenants who are buying their freeholds from housing associations. I should be grateful if my noble friend could give further forecasts of what the impact will be on years that will follow the current financial year.
I am also seeking to discover what will be the machinery for sales of housing association property to tenants. For instance, will the Housing Corporation be expected to collect mortgage repayments? Will housing associations retain any balance of the purchase price that will be left over once existing loans have been paid off? Further, what will happen
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if the purchase price of the property after discounts is less than the amount of loans outstanding at the moment? I beg to move.
Lord BELLWIN: I hope your Lordships will agree that I always listen very carefully to what is said. I am really not very clear as to the significance of the intimation that perhaps I might not do so on this occasion, but I gladly assure my noble friend he need have no fears as to that. Indeed, I have listened very carefully to his explanation of the intention behind his amendment. I was a little puzzled when I first saw it, because its effect is to leave housing associations with a duty to provide mortgages for their tenants exercising the right to buy, and it seemed to me unlikely that this was what my noble friend really wanted to achieve.
It is the Government's intention that, as far as possible, housing association tenants exercising the right to buy should, like their counterparts in local authorities, get their mortgages from building societies or from other private sources. But we recognise that this will not always be possible, and we have therefore provided housing association tenants with a right to a mortgage from the Housing Corporation. We did not feel it would be right to leave housing associations themselves with a duty to provide mortgages. In contrast to the position for local authorities, that would be an activity quite unlike anything associations are doing now and one for which they are clearly ill-suited.
Even so, we consider it to be essential that there should be a right to a mortgage if the right to buy is to be fully effective, and the appropriate source for housing association tenants is the Housing Corporation. The Corporation receives a very large allocation for its work in funding housing association development projects. That sum is arrived at as part of the general process of establishing the Government's spending plans through PESC. Many factors bear upon the decision: the Government's policy for their expenditure as a whole in the light of the needs of the economy; the state of the country's housing and the need for Government finance to improve it; and, within that finance, the sum to be devoted to housing associations. In future, a further specific factor will have to be considered, and that

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will be the sums needed by the Corporation to provide mortgages.
As my noble friend probably knows, the public expenditure White Paper does not include specific figures for the Corporation's allocation, or for other housing programmes, after this year. Decisions on these figures will be taken, as always, year by year in the light of needs and circumstances at the time. So I cannot assure my noble friend that the sums required by the Corporation for mortgages and the sums required to fund development projects will be kept in watertight compartments. Obviously, no forecasts or figures can he contemplated until one knows the likely amount to be required. To anticipate any sum would be indeed to give a hostage to fortune. However, I can and do assure my noble friend that the fact that the Corporation will have to provide mortgages will he borne in mind in setting the Corporation's overall allocation. Perhaps with that assurance, my noble friend may feel able to withdraw his amendment.
Lord HYLTON: I am disappointed that my noble friend is unable to provide any forecasts or estimates. Can he say how building societies are to lend to housing association tenants purchasing their properties at a time when they are unable to supply even the needs of the general house purchase market?
Lord BELLWIN: It is not for me at this time to try to give intimations as to what percentage of tenants will want to finance their purchases in any specific way. As I have said, some will go to building societies; some will go to the other sources available to them; some will bring forth their own resources—and it may perhaps surprise my noble friend to know that there are many who do precisely that in other spheres, too. So, clearly, there is no way in which one could contemplate estimating a figure at this stage; but I have indicated that the Government recognise that, as part of this whole exercise, there will be a responsibility upon the Housing Corporation, and we shall bear that well in mind once we know what the general parameters of that are likely to be.
Lord HYLTON: I beg leave to
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withdraw the amendment.
Amendment, by leave, withdrawn.
3.48 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 2:
Page 2, line 13, after ("tenant") insert ("of that dwelling house").
The noble Lord said: I beg to move Amendment No. 2 which stands in my name on the Marshalled List, and with it I should like to consider Amendment No. 3, since the two amendments go together to deal with a problem with which, I think, right at the very beginning, the Bill fails to reckon. That is, as the Bill stands at present a tenant in a council house or similar property may buy a council property if he has been a secure tenant of any dwelling—not the dwelling he is living in at the time he seeks to buy, but any dwelling—during the previous three years, and under any landlord.
Let us take John Smith, who will have started, perhaps, as a tenant of a flat in a fairly undesirable part of the town, who lived there for two years and who then moved to a semi-detached house in a suburban part of the same town. The two years he spent as a tenant in the flat or in the less desirable area counts towards his right to be a secure tenant after three years and therefore his right to buy the more desirable semi-detached house in the suburbs in which he now lives. Similarly, if he moves from one local authority area to another, or, changing landlords, moves from one landlord to another, the period spent under one landlord will tot up, as it were, towards the three years to make him a secure tenant to enable him to buy.
We seek in this amendment to ensure that the security from which secure tenancies flow will arise only if the tenant has been the tenant of one dwelling house for the three years. I suspect—as, perhaps, may a number of noble Lords—that one of the disadvantages of the right-to-buy provisions is that the social mix in housing estates is going to be diminished. The tenants who are owners are going to be, widely, tenants in the better type council houses and the tenants who do not choose to become owners will largely be tenants of the houses in areas with social or other kinds of stigma. Your Lordships may have seen correspondence in

1737
many journals of no particular political persuasion indicating that there is very widespread concern about council estates becoming, even more than they are now, ghettos with very poor people in one area and the better off in other areas. From our point of view we should like to see housing estates with a fairly mixed social content and a fairly mixed ownership content, some houses with owner occupiers and some houses with tenants, and so on.
I suspect that unless your Lordships are willing to incorporate this amendment into the Bill, we shall inevitably see that John Smith will be waiting until the moment arrives when he can obtain a transfer from the socially-undesirable house or flat in which he now lives and can move to a socially-desirable district before he buys his house.
By suggesting, as in this amendment, that the period which is to count towards security of tenure must be a period in one house, we shall do something to try to avoid the danger of extension of the ghetto principle and to ensure that if houses are sold and owner-occupied, they are sold and owner-occupied across a much wider spectrum of local authority estates. It seems to me that this is social engineering of a useful kind and I think that it would mitigate a little the danger of creating another class structure within council estates which the present proposals create under the right to buy. For those reasons, I feel that these amendments are very important from the social engineering point of view and from the point of view of getting rid of class consciousness, class differences and the whole variety of enmities and jealousies that arise at present and which will be exacerbated if the legislation is passed in its present form. I beg to move.
Baroness BIRK: I should like to support the amendment moved by the noble Lord, Lord Evans of Claughton. He covered the ground extremely well and fully. I should like to add that this Part of the Bill not only gives people an automatic right to buy (in fact, the local authority must sell) but, in addition, large discounts are being allowed. As the Bill stands, there are options of £100 which last for two years, which means that a house can be bought at the price ruling when the option was originally taken up. In consequence, a local authority will be
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compelled to sell, at what could be a very knock-down price, a house into which, as the noble Lord has said, the tenant has only quite recently moved. It seems to me that this amendment offers a sensible safeguard and, as the noble Lord said, to some extent mitigates the effect of this Part of the Bill. I should have thought that this would be something to which the Government could agree.
Lord BELLWIN: May I begin by referring to one or two observations made by the noble Lord, Lord Evans, and say at once that I refute his point about what he called ghettos? I am sure that we are going to have many opportunities to debate this particular aspect and, for that matter, the point of options which the noble Baroness, Lady Birk, touched on is something to which I am sure we shall return later. The noble Lord, Lord Evans, referred to his concern about this leading to a changed class structure within council estates. May I remind him that at the present time there is only one class structure within council estates and that if these proposals lead to anything which will widen the social content within council estates that can only be a good thing? I should have thought that that would have been as much welcomed by the noble Lord as by anybody else. The fact is that the mixed social content to which he referred is something which everyone professes to wish to see. This Government are trying to do something now to make it come about, yet it is being opposed in the way that it is. I am sure that we shall be discussing this point many times before even this day is out. The noble Lord's amendment proposes a restriction on the right to buy which would narrow its scope significantly. The Bill as it stands provides that a secure tenant becomes qualified to exercise the right to buy when he has been a secure tenant for not less than three years, whether or not the three years have been spent in the same dwelling or as a tenant of the same landlord. The noble Lord proposes to change this by providing for the right to arise only when the tenant has been for at least three years the secure tenant of the particular dwelling that he wishes to buy.
The qualification for the right to buy was considered very carefully when we were preparing the Bill, and we concluded

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that the arrangement that the noble Lord proposes would be wrong. In our view, there was no compelling reason why the secure tenant should have to have spent the previous three years in the same dwelling. Indeed, there were all sorts of entirely valid reasons why he might not have wished, or been able, to do so. He might, for example, be a skilled craftsman who had moved from one part of the country to another to keep himself in employment and to take his skills where they were most needed by industry. He might be an older person whose children had left home and who had agreed to move to another dwelling to release accommodation which could be more fully occupied by a family from the waiting list. We could see no overriding considerations to set against the harsh anomalies that could arise from the rule that the noble Lord is proposing, and no advantage in discouraging tenants from agreeing to move home when that was in the interests either of the mobility of labour or the most effective use of the housing stock.
Entitlement to buy therefore rests on a purchaser's history as a secure tenant, whether or not all of that history was spent as the tenant of the same dwelling or landlord as when he exercises the right to buy. It is clear, so far as I am concerned, that this was the right decision, and I hope that the noble Lord will feel able on reflection to withdraw his amendment.
Baroness BIRK: I was both amused and saddened on hearing the Minister talk about the mixed social content. He cannot be as naive as he appears—and in fact I know he is not. He says that this narrows the scope considerably and he refers to mobility. I should like to put two points. First, it is quite inconsistent for the Government to allow people the right to buy irrespective of any residential qualification drawn in this way when they are allowing local authorities to impose residential qualifications for council home allocations. Secondly, he mentioned the question of mobility. As it stands, I think the Bill will have the effect of discouraging mobility as the local authorities are likely to be very reluctant to accept tenants under the mobility scheme if, as the noble Lord, Lord Evans, said, those tenants are then able immediately to claim
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the right to buy with a discount a house that they may have been in for a very short time, purely on the strength of previous residence elsewhere. This amendment seems to me something that is so right and equitable that the Government would be being, really, unnecessarily obdurate, even for them, if they refused to accept it.
Lord EVANS of CLAUGHTON: I regret that the explanation the noble Lord, Lord Beliwin, has given does not and cannot satisfy the reservation that I enshrined in the amendments I put down, because the fact of the matter is, I am sure—I would like to think I am sure—that the problem we have in Merseyside applies to Leeds, where the noble Lord comes from. We have at present very much a ghetto situation in parts of our council estates, where very few houses have been sold under the present legislation. I can see that the kind of gulf that exists between, as it were, the rougher council estates—the ones with more social problems, where the social workers are in and out every day—and the "plushier" council estates would become, under a right to sell, an even greater gulf.
I can imagine now something like 90 per cent. of the houses on one or two of the estates in the area I live in would be snapped up immediately under the generous provisions of this Bill, and I can think of other estates in our locality where, unless there is some incentive given to the people living there to stay there and to improve the quality of the neighbourhood, 90 to 100 per cent. of the houses would never be sold, or never be considered for being sold, or it would never be in anyone's mind to buy them.
It is, I gather, a precept of Conservative Party policy, as indeed it is of my party's policy, that home ownership gives concern and interest to the quality of the house and the environment in which one lives. I would have thought that by refusing to support this amendment that kind of encouragement will be missing in the areas where it is most needed. There is already a great shortage of the better or the more acceptable type of council house, in most Northern urban areas certainly, and I suspect that the pressure on those houses will become absolutely enormous if this Bill, as drawn, is allowed to go through.

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I take the point that th noble Lord, Lord Bellwin, makes about older people and key workers. I would have thought, with great respect to the noble Lord, that the problems arising from people of this nature could very easily be dealt with if this amendment were passed, because it is a very obvious and a very easy exception to make for people of that kind. Certainly I have myself put down amendments later in the Bill to deal with key workers. Therefore, so far as I am
concerned, I cannot accept the arguments the Government have put forward, and I hope I shall have the support of the Committee on this amendment.
4.4 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 88; Not-Contents, 122.
4.12 p.m.
[Amendment No. 3 not moved.]
Lord MOWBRAY and STOURTON: This may be a suitable moment to adjourn the Committee in order that we may hear the Statement. I beg to move that the House be now resumed.
House resumed.

HOUSING BILL
4.49 p.m.
House again in Committee on Clause 1.
On Question, Whether Clause 1 shall stand part of the Bill?
Baroness BIRK: Clause 1 of this Bill, which is really the core of the Bill, marks a definitive break with past practice, since for the first time the decisions about whether or not to sell to sitting tenants, how many units and which type of housing for sale, will be removed completely from the sphere of local authority discretion. This policy runs directly counter to the increasing emphasis in recent years on the need to develop coherent local council housing strategies, will inflict significant damage to the public sector, adversely affect the housing aspirations of those who continue to look to the local authority for rented housing, and will multiply the pressures on local authorities, pressures that have already been heightened by the Government's plans to halve expenditure on housing by 1983/84, from £5,372 million in 1979/80 to £2,390 million in 1983/84, a massive cut of 48 per cent. which will put an end to new building, cut down improvements and force up rents. The other day at the Housing Consultative Council, Mr. John Morgan, chairman of the Association of District Councils, said that the Government's housing cuts could not be met without—I quote; this was reported in The Times—
"… dire consequences for families in housing need and the housebuilding industry".
Much of the damage to the public sector from enforced sales stems from the fact that it is the best stock which is bought up. Since last May Ministers have repeatedly asserted that a fair spread of houses is being sold, and on Second Reading the noble Lord, Lord Bellwin, claimed that the disproportionate sales of better housing were not taking place. I am afraid all the information points in precisely the opposite direction, including that presented to the Select Committee on the Environment which has been concerning itself with the sale of council houses and is, I believe, due to report next month. What an extraordinary thing that at a time when a Select Committee of another place is sitting and taking evidence and considering this very subject, the Government should rush, hell for leather, to try to implement it in advance of any measured evidence and comment from that Select Committee!
It is houses rather than flats that are taken up. It is dwellings in the outer urban

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rather than the inner urban areas that are being sold, and in inner areas it is houses in the most popular estates rather than those with poor environments that are being disposed of. In London, for instance, only 12 per cent. of the GLC sales have been in the inner boroughs; 88 per cent. have been in outer London. May I take Leeds? I do not want to linger on it, but just in passing—I do not think the noble Lord and I should spend time on it on this Bill, having had what I would call a local hassle—I recall that on Second Reading the noble Lord took me up and quoted the figures for Middleton and Belle Isle, but he omitted to mention, no doubt through a slip of memory, that only 0·4 per cent. have been sold in Hunslet, 1·1 per cent. in Dewsbury Road and 2 per cent. in Lincoln Green. This, of course, is not peculiar to Leeds; this pattern of large numbers of sales in suburban areas but relatively few in the inner areas has been consistent in all the large cities where significant numbers of sales have taken place in recent years. This must increase social segregation by making it harder for those who cannot afford to become owner-occupiers to move from the inner to the outer areas of our cities.
This is why those of us who supported the last amendment felt that the Minister's comments on social mix were quite out of any contact with reality. At the same time, the largest numbers of sales are taking place in areas where owner-occupation already predominates and where the most agreeable housing is the housing that is being sold. Indiscriminate compulsory sales do not and cannot promote social mix on the problem estates. Indeed, what they do is reduce the flexibility of councils to deal with problems existing within the public sector, reduce the scope for transfers and relettings and promote social segregation. The noble Lord, Lord Evans, was absolutely right when he talked about the way this moves towards a ghetto situation. We can see what has happened in America in the so-called welfare areas.
Riding roughshod over local housing strategy, which is what this Bill does, opens up the prospect of a massive rise in sales with the most serious social consequences. Transfers have already been seriously affected. Thus in London, as a direct result of the GLC "sale of the
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century", the transfer of existing tenants from unpopular inter-war flats in the inner boroughs to houses in the outer boroughs has finally ceased. Ministers deny that there will be an effect on relets. They argue that those who buy their houses are overwhelmingly middle-aged and would not have moved anyway. The evidence for this, presented in an appendix to the Department of the Environment's Appraisal of the Financial Effects of Sales, last December is, 1 am sorry to say of my ex-department, not very convincing, since it is drawn from surveys conducted in the late 1960s when to qualify for a discount which enabled a sitting tenant to purchase at a significantly cheaper price than in the private sector one had to have been a council tenant for a very long time. So it was the middle-aged who tended to buy.
But in the current climate, with 100 per cent. mortgages as of right to purchasing tenants and a minimum 33 per cent. discount after three years, younger tenants who would previously have moved out to buy in the private market—and even the Government's own figures indicate that—will purchase as sitting tenants. Therefore, what we can expect in the next few years is a significant squeeze on the number of households moving out to become owner-occupiers. In the past such moves accounted for over a quarter of all relets occurring annually in the public sector, and as the squeeze occurs when new building is being savagely slashed all over the country the effect will be felt by the homeless, by mothers and families in tower blocks, by the elderly and by those on waiting lists.
It is not only the public sector tenants themselves, or those who are homeless, those on waiting lists, who are going to be affected. This is also going to be, and is starting to be, a tremendous blow to the private building industry. Numbers of private builders and spokesmen for the building industry have expressed great concern that the Government's economic and housing policies are leading to serious decline. As limited Government money available for mortgages is used to finance council house sales, there is less to support the private building industry.
I know—and the Minister will no doubt remind me—that the Government have

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a mandate to do this very thing. But the Government brought out their proposals for a General Election over a year ago, at a time when the inflation rate was far below what it is today, when unemployment was practically nothing compared with the figures we have had this week. Now they go hell for leather, irrespective of the economic climate in which we find ourselves today, a climate, where we have over 1,650,000 unemployed, the highest since the depression in the 1930s, inflation over 20 per cent., minimum lending rate 17 per cent., mortgage rate 15 per cent., draconian cuts in housing expenditure, bankruptcies all over industry and a share of them, unfortunately, in the construction industry. What a time to bring in a compulsory council house sales policy! The real answer to this is to allow some measure of local discretion so that particular problems in particular areas can be dealt with by those who know them best. That is the way the public sector home ownership should be tackled, and certainly not in the way the Government are doing it in this really outrageous Bill.
Lord SANDFORD: I thought that my noble friend dealt admirably with all the points raised by the noble Baroness and others like them in his Second Reading speech, and no doubt if he wishes he will do so again. But we are actually discussing Clause 1 of the Bill. It is, as the noble Baroness says, a core clause enshrining the right to buy. However, she began her remarks by referring to the attitude of the Association of District Councils and as I am its president I think that I should respond.
It is perfectly true, of course, that the Association of District Councils does not like the cuts which are being imposed upon it. However, I think that the majority understand perfectly well why they are necessary. It is also perfectly true that it does not like limits and restrictions being put upon its discretion. But in the present circumstances some measure of that also is necessary. However, when it comes to the specific matter of this clause—namely, the right to buy—I can assure the Committee that the Association of District Councils is fully in support of it.
It is true that all along and when the Bill was first introduced it had reservations
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on two points: first, the special measures being taken in rural areas, which was something which was recognised in the manifesto as needing very serious and careful consideration. I can say that it is now wholly satisfied with the measures in Clause 18 dealing with that point. Secondly, it was concerned about the provisions being made for special accommodation for the elderly, the sheltered accommodation. It is true to say that it is not yet entirely satisfied on that point. We shall come to that matter when we reach Schedule 1 when I shall have a few more observations to make. However, as regards the question of its general support for the council tenant's right to buy, I can assure the Committee that the association is fully in support of the Government.
Lord EVANS of CLAUGHTON: I should like to make it clear from these Benches that we in the Liberal Party are in favour of the concept of the right to buy a council house or, indeed, any house. I mentioned in my speech on Second Reading that it is a great pity, certainly in some respects, that the right to buy that the Government are enshrining in this proposed legislation is not also enshrined for tenants in the private sector. I understand the reasons which the noble Lord, Lord Bellwin gave, namely, that this is an area which is owned by the public whereas the private sector is owned, by definition, by private landlords. Nevertheless, I should have thought that some steps could be taken in the tenants' charter to make some advance as regards the opportunity for private tenants to purchase their own houses.
Having said and underlined the fact that I think it is an excellent concept that tenants should be allowed, where appropriate, to buy the houses in which they live—houses in which, very often, they have spent many years of their lives, which they have improved and regard as their home for the rest of their lives—certainly one can only applaud the principle. I suppose, as the noble Baroness has said, this is perhaps the most important part of the Bill from the Government's point of view. This is the area where the doctrine of the mandate was waved about vigorously for over a year. This is, I suppose, the part of the Bill which has, as it were, the most sex appeal.

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I could not help overhearing some noble Lords speaking, before the beginning of this debate. They said that they thought that the debate would probably be rather boring. That was very estimable because there are many amendments to try to limit the right to sell, all of which I think are very important and will be debated very thoroughly. However, whether or not one thinks that parts of this Bill will be boring, it deals with a fundamental change in the relationships between central and local government.
As regards this measure I object not to the concept of the selling of council houses where appropriate, but to the concept that local automony once again is being thrown out of the window on the basis of central Government policy. That is what I find very difficult to understand. We have heard great oratorical flights in your Lordships' House about how important it is in the area of education that local authorities should make their own choice: why should not local authorities have the same right to make the same kind of choice as regards whether they sell or do not sell local authority houses?
I concede that in many parts of the country local authorities would want to sell a very large part of their stock. I concede that there are local authorities that might refuse to sell a large part of their stock, not because it was not available to sell, but for the doctrinaire reason that they did not believe in the selling of council houses. However, I am sure that it was not beyond the wit of the Government to introduce machinery so that schemes for selling—or for not selling if you prefer —could be put before the Minister and a decision made on that basis, rather than a blanket order or instruction that local authorities should sell their own houses.
During my years in local government I was brought up in the belief that local government was a partnership with central Government. I learnt, as the years went by, that almost whatever Government were in power local government was being regarded increasingly as an agent of central Government and not as a free party. And no wonder, my Lords! If there is a low voting pattern when local government elections come around, no wonder if the quality of the local councillor who puts himself forward is not as high as it used to
1762
be in the old days. Frankly, more and more of those elements which gave local councillors an interest, a concern and a feeling that they were doing something positive and worth while have been eroded by successive Governments. I suspect that by midsummer, when we get through the Local Government, Planning and Land (No. 2) Bill, other great swathes of local government responsibility will have been removed. By the end of this Government's period of office local government will be so emasculated that I wonder whether any person who has any interest in public life will bother to take part in it at all. To me the most serious part of this measure is the erosion of local government rights, local government authority and local government freedom.
There are so many things that the Government could have done if they were as enthusiastic as they claimed to be about giving tenants the right to buy. It would have been so much better had the Government developed the partnership between the private builder and the local authority to get private enterprise to build houses for sale on local government land, which, as I said on Second Reading, has been done in many cities in this country with great success. The councils build to sell and there are special provisions as regards the price, assistance with solicitors' fees, survey fees and as regards removal expenses. That would have an attraction and we would be building houses to sell in inner urban areas—where there are social problems—and releasing the local authority stock of houses for people who are willing to buy, and making those houses available to the very long list of people on many council housing lists.
In the area in which I live I would be very concerned if any substantial part of the stock of housing in the Wirral or Liverpool were sold. First, it would be the good stock that would be sold, and we have seen that already. The desirable areas like the Mount Estate, and areas which people on Merseyside would recognise immediately, would be sold and then a whole stock of less desirable property would be left for council house tenants. There are huge waiting lists and in the Wirral those waiting lists number 4,000 or 5,000. They are much larger in places like Liverpool, Glasgow and other large cities.

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If we were building for sale we would be providing more stock for the people who cannot afford, or who are unable to buy for one reason or other, and we would be doing something towards the Government's plan to enable people who cannot get building society mortgages to buy a house in central areas near where their families and work are located. I should have thought that these were the type of reforms that should be carried out and not this spectacular type of measure which will result in a few people owning their own houses but in the great mass of people having to wait much longer for the kind of house they want or the kind of surroundings that would best suit them to live in. We must remember that very many people in this country who still live in the private sector in grossly inadequate accommodation will be dying to get council houses, but will not be able to get them because of a shortage of council houses or because they cannot afford to buy them.
Therefore, I should like to see a limitation in the sense that local authorities should put schemes before central Government rather than that there should be a blanket sale. I should like to see building for sale being incorporated as part of this. Within this clause I should certainly like to see some measures not only for giving rights and privileges of this kind to tenants in the public sector, but I should also like the same kind of privileges to be extended to tenants in the private sector, many of whom are groaning under the hardships of high service charges and difficulties in the area of long leases which are drawing to a close without proper support. I know that certain amendments have been tabled and have been accepted by the Government, but generally I believe that the Government are putting this forward for the most dogmatic reason; not in order to serve the private sector, but to serve a political dogma.
Lord WOLVERTON: I should like to support this very important clause. I have spent a good many years in local government. Although it is a partnership, the State, of course, pays about 65 per cent. of the cost to local government. Although quite a number of local authorities were willing to carry out the wishes of the tenants to sell houses, quite a num-
1764
ber would not sell them because they liked to think that they had their own empire.
Wherever possible it is the policy of our party to allow tenants to buy their own houses. A few years ago an interesting experiment was carried out in the city of Birmingham where they did some really interesting research work, which impressed me very much. They discovered that a very large number of potential tenants who wanted to buy their houses remained in those houses for their economic lives. Therefore, a change of ownership did not allow the council to relet; the occupation of the house was simply changed from being a local authority dwelling to the owner's dwelling, and the local authority received some money for the house and was relieved of the burden of repairing the house. With that money the local authority could help to build another house. That impressed me very much.
It has always been argued—and the noble Baroness, Lady Birk, argued a little in this direction today—that you would often get a house to relet, but that is not the case, because a large number of people remain in those houses for their lives. Therefore, I support this part of the Bill very strongly. It is unfortunate to have to give mandatory powers, but I think it is necessary because some councils have not played the game.
Lord HATCH of LUSBY: Like my noble friend Lady Birk, I consider that Clause 1 is the core of the Bill and that everything in the rest of the Bill flows from it. Unlike the noble Lord, Lord Sandford, I am not confident that the noble Lord, Lord Bellwin, has answered the criticisms that were put forward during Second Reading. In particular I should like to remind him that, far from answering the specific issues which I raised during the Second Reading debate, he had this to say in his winding up speech:
"I really do not know where to start to answer the noble Lord, Lord Hatch, because his remarks were so blatantly political".—[Official Report, 9/6/80; col. 133.]
During the course of my Second Reading Speech I referred to housing associations, which I would inform the noble Lord the Minister are a form of social owership of private tenancies, along with co-operatives. I referred to the anxiety felt in rural areas,

1765
particularly associated with agricultural workers and agricultural communities; and I referred to the dangers that were being felt, particularly in rural areas, but not only in rural areas, about the undermining of provision of housing for the elderly.
These are matters to which the noble Lord the Minister referred as "political". I have heard these matters being put forward from the Benches behind him, and, since the Second Reading debate, a very wide set of suggestions has been made to me that these matters are, in fact, of concern to all political parties and to no political parties because they are of concern to the people themselves, particularly those living in rural areas and particularly members of housing associations and the elderly. Therefore, I think that it is very feeble to attempt to avoid answering the issues which I included in my speech simply by saying, "I do not have to answer that; it is political".
However, on this clause itself I want to take up another of the issues which I raised in my Second Reading speech and which had already been raised from behind the noble Lord by the noble Lord, Lord Hylton. It is the matter which has been so excellently put forward by the noble Lord, Lord Evans of Claughton, and so I shall not spend more than a minute or two on it. It is the question of the relationship between central and local government.
The noble Lord, Lord Sandford, said that he was satisfied with the answers which the noble Lord the Minister had given to the criticisms made on Second Reading. But I should like to remind him that, when a number of noble Lords from both sides of the House had raised this very important issue of the relationship between central and local government as it applies to housing and as it is spelt out in Clause 1 of the Bill, this is what the noble Lord had to say:
"… but there are bound to he instances where it has to be accepted that national policies must dominate over local policies".—[Official Report, 9/6/80; col. 132.]
Why? No reason is given—no reason that I can discover. It is just a dogmatic assertion without any argument to support it.
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In this case what are we talking about so far as the relationship between central and local government is concerned? Noble Lords on both sides of the Committee have, I think, been a little misled by the phrase which the Government are using and which originates from this clause—namely, "the right to buy". I think that Clause 1 would be better described as "the compulsion to sell". That is the basic difference between noble Lords on the Front Bench on the other side of the Committee—not necessarily on the Back Benches—and the noble Lords who are sitting on this side of the Chamber.
The right to buy has been used by many local authorities. To the best of my knowledge the compulsion to sell has never been the policy of any Government before this one. The Government appear to be saying, however many differences there are between the contexts of local governments, that it does not matter whether a local authority is operating in a rural area somewhere in the North of England—in Cumbria, on Humberside, in Lincolnshire, Yorkshire or Lancashire—or whether that local authority is a metropolitan authority, all must be treated in the same way, with certain exceptions which we shall come to in Committee; the principle must he that that local authority must he compelled to sell.
I should like to suggest to noble Lords sitting behind the Front Bench opposite—it is no good suggesting it to the Front Bench—that this was not the philosophy on which they were elected in the election of last year. Indeed, they made great capital out of the concentration of power which the Labour Party was supposed to have placed in central Government at the expense of local authorities. It has always been the case that the Conservative Party has criticised the Labour Party for centralising policy and for not allowing voluntary organisations, local authorities of various kinds, to operate according to the wishes of local inhabitants.
When a local authority is elected it is surely elected by the individuals living in that area who know the specific needs of that area, and each local authority represents the majority view on the needs in that area. What this clause does is to say, "That does not matter. We do not

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need to have local elections so far as housing is concerned. Local elections are not going to give your local authority the power to represent your interests and your wishes as expressed in the building and control of council houses, because we are going to overrule whatever you say." As I pointed out at Second Reading, it is no good the party opposite claiming that they have a mandate to compel local authorities in every area throughout this country to sell their council houses, when we know that since the General Election of last year there have been numerous occasions—scores, hundreds of occasions—on which local people have expressed the view through their local electoral machinery that they do not wish their council houses to be sold.
They have a stake in those council houses. They have invested in those council houses. They are part owners of those council houses. What kind of philosophy is it that the Government arc now putting over that this local right shall he overridden by the power of central government? That was a question which I asked the Minister at Second Reading. He has not answered it. I should like him, when he comes to support this clause—as I presume he will do—to answer it, not just on behalf of the Government but on behalf of Conservative philosophy, so that he can convince those noble Lords sitting behind him that he has not been converted to statism, or centralism, but that he has some other explanation in order to excuse this gross overriding of local opinion and local rights by the central Government he is representing tonight.
Lord HYLTON: Since the noble Lord, Lord Hatch of Lusby, has referred to me, and since I was moved by what the noble Lord, Lord Evans of Claughton, was saying earlier, I think it is right that I should state my position. The Conservative Party, which I support, has for many years insisted that local authorities should be able to determine the method of selection, or the administrative procedures that govern how children are admitted to secondary schools. In this Bill it lays down, with no possibility of local choice and with very few exceptions, what is to happen on the sale of council houses to existing tenants. I cannot, for the life of
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me, see how these two things can be reconciled in logic or in anything else.
5.25 p.m.
Baroness FISHER of REDNAL: I rise to support my noble friend on the Front Bench regarding houses for sale in certain areas. I give you some up-to-date figures from Warrington New Town Development Corporation. There they are trying hard to sell their houses. I am a member of that authority, and I know that nothing is being held back, but at the present moment their figures are very low. In fact, no purpose built rented dwellings which have been completed by the Warrington New Town Development Corporation have been sold, but we have sold some of the houses the development corporation purchased from private builders. These were houses that were purchased from private builders because the previous Government said that more houses had to be rented by the authority than put up for sale. Our figures are very small indeed and hear out what my noble friend said. These were houses, originally built for sale by a large contractor, which Warrington Development Corporation bought up. They are the only houses at the present moment that have been sold by that development corporation.
Birmingham was mentioned. There is no need for me to repeat once again that I come from that city. I want to follow up what the noble Lord, Lord Evans of Claughton, and my noble friend Lord Hatch have said. Local authorities up and down the country have accepted for a long time now that there are people who wish to purchase their council housing. They have recognised this in various ways. In those areas where there is perhaps the most urgent need of housing there has been the greatest opposition to selling council houses. Previous speakers have said that different local authorities have chosen different ways of trying to help what everybody would call the owner-occupier. I really did not follow the noble Lord on the opposite side when he made mention of some scheme in Birmingham. I think I know practically all the schemes that Birmingham has. Perhaps I could give these as examples, and no doubt other noble Lords who have served for a long time in local authorities will be able to elaborate.

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At the present moment there are 150,000 tenants in council houses in Birmingham. We have sold 10 per cent. of the housing stock. If you go around council houses and council housing estates now, it will be obvious to you why in some instances people bought them. It was not that they intended to live there for a very long time, because when one goes round council housing estates now it is quite surprising to see how many notice boards "For Sale" there are in the front gardens. Obviously people see a bargain, they buy it and sell it on the market, and move out. One cannot criticise them when they have the opportunity to do that. I made this point because the noble Lord opposite came to the conclusion that once you had bought it you stayed in it. I do not think that that is proving so in practice.
Birmingham built houses for sale, and that was nothing new. Ten or 15 years ago they were actually building houses for sale, to give to people on the housing register the choice whether they went into a council house or whether they went into a rented house. Partnership schemes were set up with specialist builders to build in the inner city areas houses for sale of a smaller character than those on the outskirts and therefore at a lower price. There were 50–50 option schemes whereby the tenant bought only half of his house to start with and rented the other half. Those are illustrations of what local authorities have been able to do up and down the country. This, I should have thought, was what local government was all about.
It is the variety of local government that makes Britain so different from many parts of Europe. Perhaps one of the biggest criticisms in the past of council house building was that wherever one went in Britain one could point to houses and say, "They are council houses". Since the war, however, and especially in the last 10 years, there has been a dramatic increase in architectural standards for public housing and today public housing is comparable with anything to be found in the private sector.
What worries me more than anything else about the compulsion that local authorities must sell is the whole philosophy behind it; the very fact that because you rent a house you will be considered in some way inferior. The status symbol
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will be being an owner-occupier in a council housing development. I think I see the noble Lord, Lord Bellwin, smiling at that remark. I remind him that there was a time—I remember this well, because I have been involved with housing for many years in Birmingham—when there was great pressure, if you lived in a back-to-back slum clearance house, to become a council house tenant; you were looked upon as someone important after you left the hovels of the private landlord. The noble Lord must remember that situation in Leeds, too—the stature people had once they left that environment. That stature is being removed by the simple fact that, as rents increase, more and more people will be forced into buying, and we shall find ourselves in great difficulty as local authorities become welfare housing authorities. That is my worry. This whole philosophy will mean that the whole way of life of people will be degraded by this compulsion on local authorities to do things which are very much against their will.
5.33 p.m.
Lord BELLWIN: It is right that we should have had a far-ranging debate on this clause, which is a fundamental part of the Bill. If some of the topics about which noble Lords have spoken are ones which we shall be discussing in greater depth as we deal with the various amendments, it is none the worse that we should be debating the principles at the beginning of these few days in which we shall be discussing the Bill line by line.
Before I make some general observations, I will comment on some of the points that have been made, some of which may not come in the generality of what I wish to say. I do not think noble Lords will mind if I start at the end by referring to the observations of the noble Baroness, Lady Fisher of Rednal, to whom I always immensely enjoy listening. The fact that we do not always agree is beside the point. I have great respect for her involvement in the past in local government and, when she talks about Birmingham, that is in many ways so akin to the area from which I come that I always listen very closely to her. I am sorry that on this occasion, perhaps more than on many other occasions in the past, we just have to agree to differ, and she will not be too surprised to hear me say that.

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The noble Baroness referred to the number or kind of sales made or not made in Warrington New Town. Clearly I do not know the individual circumstances in Warrington New Town, but I can tell her that of all the applications to buy, more in percentage terms have come from the new towns than from anywhere else in the country. Indeed, I believe there are many Members in another place who would today say that the only reason they are in another place is that, at the last general election, they pursued in the new towns very vigorously in their respective manifestoes the general Conservative manifesto line of the intention to give the right to buy. So, of all the indications that might be given against the proposal, I should have thought that the position in the new towns was probably not one of the strongest.
She then said that local authorities had accepted that people wanted to buy and she fairly went on to say that not all local authorities would give the opportunity to buy, and that is almost at the basis of the original proposal. Clearly if there had been authorities overall who were willing to sell, there would be no need for there to have to be the right to buy. It is precisely because many have accepted the philosophy in words (I will come to that shortly) but in practice have not given that right, while many more have openly stated that they will not give it of their own volition for their own beliefs —which I may respect while strongly disagreeing with them—that we consider it so basic. I shall return to that subject, too, but clearly it is a position on which we must make the move in general terms.
The noble Baroness, Lady Fisher of Retinal, said that if one rented, it used to be said that one was inferior. I do not want to go back to the old days. I too remember the back-to-back dwellings to which she referred. Indeed, when I first came into housing I was told—would you believe?—that many people wanted to continue living in the back-to-backs because they were little palaces"; that was not the kind of palace I ever had in mind when the term was used. Nevertheless, many people did live together and developed a community spirit living in back-to-backs. There is a great case, some would argue even today, for trying
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sufficiently to modernise (if you can, though I am doubtful if you can) those same back-to-backs that still exist because they have certain advantages; in the main they tend to be very low in rent and they have certain other advantages of that kind. I would not knock the back-to-back any more than I am sure the noble Baroness would.
If I am working my way backwards—and I am—I would say in regard to the observations of my noble friend Lord Hylton that on this issue—he said so himself—he clearly follows the Opposition line in regard to the right to buy, and that is absolutely his prerogative. It is not for me to comment on that, so long as noble Lords opposite will not be reminding me during the many debates we shall be having that on all sides there is this feeling simply because my noble friend has this feeling. We shall have to weigh the measure of the feeling on this side of the Committee, and I think that will come forth in due course.
The noble Lord, Lord Hatch, referred to my "feeble attempts" to answer his questions. I do not think we add much to this or any other debate if we sink to the point where we start to be recriminatory. Frankly, that adds nothing to our deliberations. I come from a forum where the style of debate is much more vigorous than I have found in your Lordships' House, and it is not easy to adjust. While it would be easy, as it were, to revert to that style of debating, I consider that to do so would add nothing, and therefore I have no intention of bandying those sort of words with the noble Lord. It is with pleasure that I see the noble Lord, Lord Sefton of Garston, smiling; he more than most knows what I mean.
The noble Lord, Lord Hatch, did not like the fact that I referred to the blatant political line which he adopted, and he quoted from the Second Reading debate. I do not need to refer to Hansard of that debate because some of the words he used stuck in my mind. If he looks in the Official Report he will find that he referred to "the social ownership of private housing". I said then, and I repeat, that to me that sums up entirely if not the philosophy of the noble Lord, Lord Hatch, then the philosophy of those who want something quite different from what I want to see in housing.

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The social ownership of private housing —I ask Members of the Committee to pause and think exactly what that means. It means that the noble Lord wants to see private housing in the ownership of the state. That is what it means. If anyone should say, "So what?" he may be right, because it was only in November last that the right honourable gentleman Mr. Roy Hattersley said almost the same thing. He said:
"What we want to see are two housing sectors: the public, generally to rent; the private, generally to buy".
Right from the time when I first came into housing many years ago the one thing I have always regarded as appalling is to have two sectors. It is wrong that there should be two sectors. I do not want to see the public sector in one way and the private sector in another. I want to see the greatest possible mix in housing, because it is in that way that we shall achieve what many of us want to see in our society. It will not be achieved by dividing housing in the way that the noble Lord, Lord Hatch of Lusby, suggested, or as has been mentioned in the reference which I have given.
Therefore I have no hesitation in saying that I have no time for two sectors in housing. I want the greatest possible mix. I have over the years discussed housing with some of the great Labour experts on the subject. I am sorry that the noble Lord, Lord Greenwood of Rossendale, is not in the Chamber at present. He was at one time a housing Minister in another place. He knows the people to whom I am referring. He knows, too, of the hours that we spent discussing housing generally. When do an opposition ever sit down with the party in control and discuss all the implications of the subject, as we used to do? The one thing that those who were really concerned about housing wanted was the widest possible mix. So I say to Members of the Committee, please do not tell me about what one might call the politics of housing—
Lord HATCH of LUSBY: Will the noble Lord allow me to intervene?
Lord BELLWIN: Yes.
Lord HATCH of LUSBY: In order to put the record straight I wish to point out
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that the phrase that I used was, "the social ownership of privately-rented accommodation." I thought that in my intervention this afternoon I had explained to the noble Lord that I had been referring in particular to housing associations and co-operative associations. Does the noble Lord support the concept of the housing association and the co-operative association as a part of his mix? I ask this because all I am saying is that I should like to see the social ownership of privately-rented accommodation extended through these, and possibly other, means.
Lord BELLWIN: Of course I see the role of housing associations and co-ownership. That was the very thing that I was trying to say. I believe in the greatest possible number of different forms of housing, and that is what I want to see. If I misunderstood the noble Lord, then I am very glad that the matter is now clear. It makes me feel much better about his views on housing.
However with regard to the noble Lord's other observations about myself and local government, I have to say to him that I need neither lessons nor lectures from him or, if I may say so, from anybody else, on local government. No doubt we shall have many chances to toss that one about when we get closer to the Bill which is to come before us on that subject.
I now wish to refer to the points made by the noble Baroness, Lady Birk. The noble Baroness should not be talking to us about the number of dwellings being built in this country, the amount of money being provided for them, or for that matter the cut-back. I believe I have reminded her on more than one occasion that her party in their period of office made the biggest reduction in percentage terms in house building of any Government in history. The noble Baroness talks about what we might do and what we intend to do. Well, time will tell, and there is no doubt that as the years go by—
Baroness BIRK: Will the noble Lord give way? I should like to get this point clear right from the beginning. I am not saying, nor have I ever said, that everything done by the Government of which 1 was a member, or by any other previous Government, was absolutely

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right. It would be crazy for anyone to say that. I absolutely agree that the number of housing starts dropped during the latter years of the last Labour Government. But what is the position going to be like in the future under this Government? I am not excusing the past situation. I am not saying that that was a good thing. As the noble Lord said a little while ago, it will not help if we ping-pong along that particular line. The noble Lord was the one who asked us to stop doing that.
Lord PARGITER: Before the noble Lord replies to that, may I—
Lord BELLWIN: No, I have a long speech to make on this question, and I would beg the indulgence of your Lordships' Committee——
Lord PARGITER: Instead of expressing the situation in percentage terms, can the noble Lord give the number of houses involved, in regard to the position under the last Labour Government?
Lord BELLWIN: I undertake to do that before we finish the debate. I do not carry those particular figures in my head, though I carry many other figures in my head. The noble Lord can he assured that I do not lightly trot out the figures when I say that there was a 50 per cent. reduction during the period in question. There is no doubt about that. I think that the figures showed a reduction in the region of from 4.4 million to 2.2 million. I shall be interested in due course to see how near I am. If I have the figures almost right, I shall be very surprised—or perhaps I shall not.
I take the point that the noble Baroness makes. Nevertheless, I am glad to hear that she feels as she says she does about her own party's performance on this matter, and so long as that is on the record, I am content, as I have learned to say in this Chamber.
The noble Baroness spoke about new building being "savagely slashed". Well, in view of what I have just said, perhaps I should not take her too much to task on that, but is it not easy to use that kind of emotive language and to sound so virtuous and so right? But before so doing, one must think again about what the record
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shows. The noble Baroness spoke about the level of unemployment previously being "practically nothing". I should not regard 1½ million unemployed as "practically nothing". That figure may have been 100,000 lower than the present figure, but to say that the level of unemployment was "practically nothing"—well, come on, what are WC talking about? Let us keep everything in perspective.
My noble friend Lord Sandford very kindly interjected and made observations about the general attitude of the ADC. The noble Baroness, Lady Birk, referred to comments made by Councillor John Morgan at the Housing Consultative Council meeting this week. Well, I was there, as they say, and I heard those words at first hand. I also heard Councillor John Morgan say many other things which heartily approved of what we are doing in housing. Perhaps the noble Baroness would have been more effective had she quoted some of those remarks, too, as my noble friend did; and I am most grateful to him. I am also grateful to my noble friend Lord Wolverton for what he said.
This clause gives to secure tenants of public sector dwellings for the first time an unequivocal right to acquire the freehold of their houses, or a long lease if they have a flat, provided that they have been a secure tenant for at least three years. In enacting this right we are giving to council tenants what the vast majority want to have. There is no doubt about that; it is what the vast majority want to have. It is a chance that has been denied to many, of having access to a capital asset and the ability to pass it on to their children, a greater freedom to move house, and more control over their own lives and homes. The right to buy paves the way for a massive redistribution of wealth from the public sector to private individuals. This provision will transform the personal prospects of millions of our citizens by giving them the chance to be home owners.
Home ownership is a fundamental belief of the Conservative Party. We believe that the desire for it should be fostered as widely as possible. Noble Lords opposite, and I regret to say, even one or two of my noble friends, do not take that view. They have argued, and will argue, the case on many points, as is indicated by amendments yet to come before the Committee, and I shall refer to some of those points in

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a moment. But, however often they preface their remarks with pleas to the contrary, the fundamental fact is that to them home ownership excludes sitting council tenants.
The Labour Party pays lip-service to home ownership. They profess to deplore the concentration of wealth in relatively few hands, but when the chips are down they do all in their power to frustrate the widest extension of home ownership that this country is ever likely to see, and they thereby seek to curtail, and even to deny, the one step, probably the only great step, which can redistribute wealth in a meaningful way.
Let me take a few of the other anti-right-to-buy arguments which we have heard today. It has been argued that under the right to buy, only the best houses will be sold. This was said during the Second Reading debate as well; and I am told that there are those who will produce evidence to prove this. Your Lordships may talk of the evidence that can be produced by those who wish to show a particular result. All I will say—and I have the figures with me as well—is that there is no evidence at all that people do not buy houses in the poorer areas. There is no evidence of that. Certainly I know of over a thousand—I give the number, and will justify it to anyone—sold in Leeds in what would be called the poorest estates.
May I mention another point. It will come again later, but I want to mention it here now. How on earth can the opponents of this policy tell us that we shall not sell houses in the poorest areas when they put down amendments to try to prevent us from selling in housing action areas? What are housing action areas but among the poorest areas? Otherwise, they would not be housing action areas. Yet here we have amendments which say "You should not be allowed to sell there; tenants there should not have the right to buy". In the first instance, nothing is more likely to make those housing action areas better, more upgraded, than people in them owning their houses, because then they will do something about it. But what muddled, woolly thinking to say, on the one hand, that no one will want to buy in the poorer areas, and then, on the other hand, to put down amendments to pre-
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vent our selling in them? Come on!—let us really get this right. I have said, and will say time and time again, that houses are sold across the spectrum. They were and they will be sold across the spectrum.
It has been said that few flats have been sold. Of course the number sold so far is very small, but then very few authorities have been offering them for sale. There was a well-known Labour councillor in my former authority who used to say to me regularly, at almost every council meeting when this matter was discussed, "When will you sell me my flat?" I used to say, "Bill, be patient; your time will come". Unhappily, he is no longer with us; otherwise, he would have been among those looking forward to owning their own flat. In the debate, no one has talked about the financial aspect, so I will not do so, either. We shall no doubt come to that later. There certainly are financial benefits to the purchasers—everyone is complaining about that—but very much so to the authorities, as well, and I shall gladly dilate upon that on another occasion.
Perhaps the most significant criticism was about this issue of the erosion of local autonomy. Lord Hatch spoke at length about it. So far as I am concerned he did not say much, but he spoke at length about it. I do not consider this is at all a valid point, because there is no shortage of precedent on this issue of, if you like, local versus national democracy, which is really what we are talking about. One has only to look at Labour's steamrolling of comprehensive education. Of course the national Government have the right to put forward and put over a national policy. They have it all the more when it is part of their basic manifesto—yes, the noble Baroness was right when she said I would refer to this. I do refer to it, and I shall go on referring to it. It was a mandate, it was a valid mandate, and we shall use it. No one is more anxious than I am to protect the autonomy of local government, and I will not have anyone say to the contrary. But no one is more committed than I am to the fundamental belief—and there are many members of the Labour Party in local government who would confirm that I have said this—that Governments should govern. If the Government have a national policy, then that

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is what they will put forward and that it is what they will do; and that is what we are doing.
We have been told of the calamitous effect that the policy will have on the overall pool of dwellings for rent. As I have said so often, this simply is not true, and it is a fallacious argument, because a purchaser who has lived in a house for three years or more and who then occupies the same house as an owner rather than as a tenant, makes that house not one wit more or less available to the pool of rented accommodation than it was before. I will not go on about that now, but I am sure we shall be coming back to that one. A brief reference was made to restricting sales to the elderly. We are going to talk about this at length, so I shall not deal with it at the moment.
Altogether, I do not think there is much more I want to say as regards this clause. I have gone on, I suppose; but the fact is, basically, that the opportunity given to council tenants in this clause is already enjoyed by many. Many have taken advantage of it, and are reaping the benefit of having done so. Others have been denied that benefit and will continue to be denied until this Bill comes into operation. It is right on all counts, and I commend this clause to your Lordships' Committee.
Lord EVANS of CLAUGHTON: The noble Lord said in his speech (if I may paraphrase what he said), "I am a great believer in, and have a fundamental belief in, the automony of local government; no one is going to gainsay that; but because Labour Governments have eroded it in the past there is no reason why I should not do it in the future." Is that what he is saying?
Lord BELLWIN: Before I comment on that, perhaps I may apologise to the noble Lord, Lord Evans, because I did not reply to some of the things he said. I do not want to draw out the proceedings, but 1 will try to answer him very briefly, because I feel I owe it to him to try quickly to do so. He said he was in favour of the basic
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concept of the right to buy, and then disappointed me by yet again going on to prove that he was not by the other things that he said. But I did not feel too badly about that; it happens to me all the time when we talk about this subject. He spoke of letting local government work together with the private sector in building. That is a fine concept. As he rightly said, there are authorities who do it—and why not? The enlightened authorities will make land available to the private sector and even go into partnership with them. I hope we shall see more of that; I think it is a constructive thought, but it is happening at the present time.
But what the noble Lord did say (I am sure he did not really mean it) is that he really wants to see, as he said, private sector tenants becoming council tenants. He did say that, and I noted it carefully. I suspect he did not really mean it. I hope he did not. Before I sit down, and in that I now have the chance, perhaps I may quickly answer the noble Lord who raised the question about public sector housing starts. I have the figures now. In 1974 they were 146,100; in 1978–79 they were 98,400.
Lord TAYLOR of BLACKBURN: May I remind the Minister, in relation to the statement he made about comprehensive education, that we did not bulldoze comprehensive education through the country? It was taken up entirely with the local authorities and they decided themselves. We did not bulldoze it through.
Lord BELLWIN: I would have to say that, so far as I am concerned, technically the noble Lord may be right—I say "may be right"—but noble Lords have only to have read the papers to have read of the battle. I do not think that in reality anyone would accept that that was so.
5.58 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
Their Lordships divided: Contents, 111; Not-Contents, 63.

CONTENTS

Ailesbury, M.

Gosford, E.

Ponsonby of Shulbrede, L.

Airedale, L.

Greenwood of Rossendale, L.

Rathcreedan, L.

Ardwick, L.

Gregson, L.

Ritchie-Calder, L.

Aylestone, L.

Grey, E.

Rochester, Bp.

Banks, L.

Hale, L.

Rochester, L.

Barrington, V.

Hall, V.

Ross of Marnock, L.

Beaumont of Whitley, L.

Hampton, L. [Teller.]

Sainsbury, L.

Beswick, L.

Hanworth, V.

Sefton of Garston, L.

Birk, B.

Hatch of Lusby, L.

Segal, L.

Blease, L. [Teller.]

Henderson, L.

Shackleton, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Brockway, L.

Howie of Troon, L.

Simon, V.

Burton of Coventry, B.

Ilchester, E.

Stedman, B.

Chitnis, L.

Irving of Dartford, L.

Stewart of Alvechurch, B.

Clancarty, E.

Jacques, L.

Stewart of Fulham, L.

Cledwyn of Penrhos, L.

Kilbracken, L.

Stone, L.

Collison, L.

Kilmarnock, L.

Strabolgi, L.

Cudlipp, L.

Leatherland, L.

Strauss, L.

David, B.

Lee of Newton, L.

Taylor of Blackburn, L.

Davies of Leek, L.

Listowel, E.

Taylor of Mansfield, L.

Denington, B.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Diamond, L.

Lloyd of Kilgerran, L.

Wallace of Coslany, L.

Elwyn-Jones, L.

Lovell-Davis, L.

Wedderburn of Charlton, L.

Evans of Claughton, L.

McCarthy, L.

Wells-Pestell, L.

Fisher of Rednal, B.

McNair, L.

Whaddon, L.

Foot, L.

Maybray-King, L.

White, B.

Gaitskell, B.

Monson, L.

Wigoder, L.

Gladwyn, L.

Pargiter, L.

Wootton of Abinger, B.

Gordon-Walker, L.

Pitt of Hampstead, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

NOT-CONTENTS

Adeane, L.

Cork and Orrery, E.

Gage, V.

Airey of Abingdon, B.

Cullen of Ashbourne, L.

Gainford, L.

Alport, L.

Davidson, V.

Garner, L.

Ampthill, L.

De Freyne, L.

Geoffrey-Lloyd, L.

Avon, E.

De La Warr, E.

Gibson-Watt, L.

Balerno, L.

Denham, L. [Teller.]

Gisborough, L.

Balfour of Inchrye, L.

Derwent, L.

Glendevon, L.

Bellwin, L.

Digby, L.

Glenkinglas, L.

Belstead, L.

Dormer, L.

Godber of Willington, L.

Berkeley, B.

Drumalbyn, L.

Gowrie, E.

Bessborough, E.

Dundee, E.

Gridley, L.

Boyd-Carpenter, L.

Ebbisham, L.

Grimston of Westbury, L.

Brentford, V.

Effingham, E.

Halsbury, E.

Caccia, L.

Elton, L.

Hankey, L.

Caithness, E.

Ely, M.

Hawke, L.

Campbell of Croy, L.

Faithfull, B.

Henley, L.

Carver, L.

Falkland, V.

Hives, L.

Chelwood, L.

Ferrers, E.

Home of the Hirsel, L.

Chesham, L.

Ferrier, L.

Hood, V.

Clifford of Chudleigh, L.

Forbes, L.

Hornsby-Smith, B.

Clitheroe, L.

Forester, L.

Hylton-Foster, B.

Clwyd, L.

Fortescue, E.

Inglewood, L.

Cockfield, L.

Fraser of Kilmorack, L.

Ironside, L.

Kimberley, E.

Porntt, L.

Spens, L.

Lauderdale, E.

Redmayne, L.

Stamp, L.

Long, V.

Reigate, L.

Stanley of Alderley, L.

Lucas of Chilworth, L.

Richardson, L.

Strathclyde, L.

Lyell, L.

Robbins, L.

Strathcona and Mount Royal, L

McFadzean, L.

Rochdale, V.

Strathspey, L.

Mackay of Clashfern, L.

Romney, E.

Swansea, L.

Macleod of Borve, B.

Rugby, L.

Swinfen, L.

Mancroft, L.

Saint Oswald, L.

Tranmire, L.

Marley, L.

Sandford, L.

Trefgarne, L.

Monk Bretton, L.

Sandys, L. [Teller.]

Trenchard, V.

Mowbray and Stourton, L.

Savile, L.

Vickers, B.

Moyne, L.

Seebohm, L.

Vivian, L.

Norfolk, D.

Selkirk, E.

Ward of Witley, V.

Northchurch, B.

Sharples, B.

Wolverton, L.

Nugent of Guildford, L.

Skelmersdale, L.

Yarborough, E.

Orkney, E.

Soames, L. (L. President.)

Young, B.

Penrhyn, L.

Somers, L.

Moved accordingly, and, on Question, Motion agreed to.

CONTENTS

Airey of Abingdon, B.

Fortescue, E.

Pender, L.

Alexander of Tunis, E.

Fraser of Kilmorack, L.

Penrhyn, L.

Alport, L.

Gage, V.

Redmayne, L.

Ampthill, L.

Gisborough, L.

Reigate, L.

Auckland, L.

Glendevon, L.

Richardson, L.

Avon, E.

Glenkinglas, L.

Ridley, V.

Balerno, L.

Godber of Willington, L.

Rochdale, V.

Balfour of Inchrye, L.

Gray, L.

Romney, E.

Bellwin, L.

Gridlcy, L.

Sandford, L.

Belstead, L.

Grimston of Westbury, L.

Sandys, L. [Teller.]

Berkeley, B.

Halsbury, E.

Savile, L.

Bessborough, E.

Hanworth, V.

Seebohm, L.

Brougham and Vaux, L.

Hawke, L.

Selkirk, E.

Chelwood, L.

Henley, L.

Sharples, B.

Chesham, L.

Hives, L.

Skelmersdale, L.

Clifford of Chudleigh, L.

Holderness, L.

Soames, L. (L. President.)

Cockfield, L.

Home of the Hirsel, L.

Spens, L.

Colville of Culross, V.

Hornsby-Smith, B.

Stamp, L.

Colwyn, L.

Hylton-Foster, B.

Strathclyde, L.

Cottesloe, L.

Ironside, L.

Strathcona and Mount Royal, L.

Craigavon, V.

Kimberley, E.

Strathspey, L.

Cullen of Ashbourne, L.

Long, V.

Swansea, L.

Davidson, V.

Lucas of Chilworth, L.

Swinfen, L.

De La Warr, E.

Lyell, L.

Teviot, L.

Denham, L. [Teller.]

McFadzean, L.

Tranmire, L.

Digby, L.

Mackay of Clashfern, L.

Trefgarne, L.

Dormer, L.

Macleod of Borve, B.

Trenchard, V.

Drumalbyn, L.

Marley, L.

Trumpington, B.

Dundee, E.

Merrivale, L.

Tryon, L.

Ellenborough, L.

Monk Bretton, L.

Tweedsmuir, L.

Elton, L.

Mowbray and Stourton, L.

Vickers, B.

Faithfull, B.

Moyne, L.

Vivian, L.

Falkland, V.

Norfolk, D.

Ward of Witley, V.

Ferrers, E.

Northchurch, B.

Westbury, L.

Ferrier, L.

Nugent of Guildford, L.

Wolverton, L.

Forbes, L.

Orkney, E.

Wynford, L.

Forester, L.

Orr-Ewing, L.

Yarborough, E.

NOT-CONTENTS

Airedale, L.

Greenwood of Rossendale, L.

Ritchie-Calder, L.

Ardwick, L.

Gregson, L.

Rochester, Bp.

Aylestone, L.

Grey, E.

Rochester, L.

Balogh, L.

Hale, L.

Ross of Marnock, L.

Banks, L.

Hatch of Lusby, L.

Sainsbury, L.

Beaumont of Whitley, L.

Hylton, L.

Sefton of Garston, L.

Birk, B.

Irving of Dartford, L.

Shinwell, L.

Blease, L.

Jacques, L.

Simon, V.

Boston of Faversham, L.

Jeger, B.

Stewart of Alvechurch, B.

Brockway, L.

Kilbracken, L.

Stewart of Fulham, L.

Burton of Coventry, B.

Kilmarnock, L.

Stone, L.

Collison, L.

Leatherland, L.

Strabolgi, L.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Blackburn, L.

David, B.

Longford, E.

Underhill, L.

Diamond, L.

Lovell-Davis, L.

Wallace of Coslany, L.

Elwyn-Jones, L.

McCarthy, L. [Teller.]

Wedderburn of Charlton, L.

Evans of Claughton, L.

Noel-Baker, L.

Whaddon, L.

Fisher of Rednal, B.

Ogmore, L.

White, B.

Foot, L.

Pargiter, L.

Wootton of Abinger, B.

Gaitskell, B.

Pitt of Hampstead, L.

Wynne-Jones, L.

Gifford, L.

Ponsonby of Shulbrede, L. [Teller.]

Goronwy-Roberts, L.

Resolved in the affirmative, and Clause 1 agreed to accordingly.
Clause 2 [Exceptions to right to buy.]:
6.6 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 4:
Page 3, line 14, at end insert—
("or
(c) has at no time received a grant under section 119(3) of the 1957 Act, section 29, 31, 32 or 33 of the 1974 Act or under any enactment mentioned in paragraph 2 of Schedule 2 to that Act.")
The noble Lord said: The object of this amendment is to exclude from the right to buy housing associations which have never received public subsidy. The great majority of associations in this position are charities, which have provided their housing from private donations rather than from public funds. They are already excluded from the right to buy by virtue of subsections (1) and 2(a) of this clause. There are, however, a handful of associations which are not charities and which have not received public subsidy. It has been put to us that such associations can scarcely be described as being in the public sector, and that they should instead be treated for these purposes as if they were private landlords. We accept that view, and this amendment therefore excludes them from the right to buy. I ask your Lordships to agree to it.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Schedule 1 [Exceptions to right to buy.]:
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): I must point out to your Lordships that if Amendment No. 5 is agreed to I shall be unable to call Amendment No. 6.
Lord HYLTON Lord HYLTON moved Amendment No. 5:
Page 95, line 19, leave out paragraph 4 and insert—
("4. The dwelling-house is one which it is the practice of the landlord to let for occupation by persons of pensionable age.")
The noble Lord said: This amendment is sufficiently widely drawn to include not only old people's bungalows which are not in sheltered schemes but also flats normally let to aged persons and other properties, such as, for instance, the ground floors of tower blocks which many local authorities have frequently reserved for people of pensionable age. Considerable concern was expressed at Second Reading from all sides of your Lordships' House on the difficulties and problems that would ensue if this Bill were to go through as it is now drawn. These difficulties and problems refer to the special needs of elderly people.
I should like to quote briefly from what the director of Age Concern, the national umbrella body for matters affecting the elderly, has written to me. He said:
"We are also anxious to protect existing public sector housing for the elderly. In our experience many elderly people seek smaller dwellings in later life and because of lack of this type of provision in the private sector they have to rely upon public sector housing".
I think I see the noble Lord, Lord Seebohm, in his place, and I hope I shall have his support as President of Age Concern.
I made some inquiries of my own local authority in East Somerset, the Mendip District, and I found that they own some 7,400 council properties. Of these, 800 are old people's bungalows and some 650 are old people's units in the sheltered schemes which under the Bill would be exempt. Therefore, in this district we are in the situation that more than half of the accommodation now normally used by the elderly will be at risk of being sold and passed on to people who are not at all elderly and perhaps have no connection with the district whatsoever.
I discovered, further, that there are 779 elderly persons on the council's waiting list, and that that number of people represents more than 10 per cent. of the total stock of council houses in Mendip. It also represents more than a third of the total waiting list. I know it is often said that waiting lists are a poor guide to housing need, but in this case no fewer than 332 of the elderly people on the waiting list were judged to be in urgent housing need—very nearly half. As I said before, we risk losing from the pool available more than half of what it now contains.
At Second Reading I referred to the situation in the village where I live. That has a population of 450 people and we have at present six bungalows normally let to elderly people. Of those six, four belong to the local authority and two belong to a housing association. We are lucky to the extent that the housing association happens to have charitable status and therefore the two will be protected while the four will be at risk of being sold or passed on to anybody from anywhere.
I am delighted to have the support of the noble Baroness, Lady Birk, and I hope she will speak with particular reference to

1785
the urban areas. I am delighted also that the right reverend Prelate the Bishop of Guildford has added his name to the amendment. In view of the very much lesser degree of discretion that local authorities are likely to have under this Bill, I do hope that at least that much can be salvaged. I beg to move.
6.14 p.m.
Baroness BIRK: This, I think, is probably one of the most important amendments we shall be dealing with, at any rate today. There is a very great problem here. On Second Reading the Minister said:
"We recognise the genuineness of much of that concern"—
he was referring to accommodation for the elderly—
"The treatment of old people's dwellings in the Bill is a matter of judgment. It involves balancing community interests against the interests, or in this case the rights, of individuals. That is a balance which we have tried our best to strike correctly ".—[Official Report, 9/6/80; col. 131.]
I certainly do not feel that the balance is correct at the moment. It is, as I see it, when you have set out the sort of Bill that we are studying today, with the various rather limited exclusion clauses, a difficult one; but I would put it to the Minister that it would be an absolute tragedy if these provisions were not enlarged and increased.
The Government have gone one step to exclude sheltered housing, which is a very particular and specialised type of housing, with special adaptation and with warden facilities, but it really does not help the great number of elderly people who are not in need of sheltered housing, or would not be eligible for it even if they were, because there is not enough of it. We have in our society at the moment a growing proportion of elderly people, and the demographic projections indicate that there will be a continuing increase during the next decade. Financial and economic reasons are extremely important, but most of the voluntary organisations which help the elderly in our community, with which I have anything to do, see their function as keeping old people in their own homes. They try not to have old people taken into residential care, supplying the social services by way of day centres or something of that kind. But it is impossible to do this unless housing accommodation is available for old people.
1786
The reason why this amendment is drafted in this, I agree, wide way is that it seems to me, to the noble Lord, Lord Hylton, and to the right reverend Prelate (whom I will mention in a moment, because he has sent a written message since he could not be here today) that the only way to deal with this situation is in this way where it is the practice of the landlord to let for occupation. This covers not only specially adapted housing but the housing where there may be groups of bungalows which have been specially built. It would also cover the cases where the local authority has over the years kept a ground floor flat for elderly people—and I would ask the Minister to note particularly the words, "it is the practice of the landlord", where we have followed some of the wording in the Bill. Once this accommodation starts being sold it will be very difficult to replace it, particularly if (without going into all the details of the previous debate) we are not going to have replacement housing, certainly over the short and medium terms at the present time.
Elderly people who want to move because they need to be near supportive relatives or friends will need somewhere to go where perhaps they do not have to climb too many stairs and where, while they are quite healthy and mobile, they can live and manage on their own. If these houses, flats or bungalows are sold off, these are the people who, by reason of being older, have a shorter expectation of life than the middle-aged or the younger people; and those houses, flats or bungalows will just pass out of the circulation of property, the housing stock, that the local authorities have for older people.
The noble Lord, Lord Hylton, was quite right when he referred to the great problem for the elderly, as well as people in the rural areas. It may be slightly different, but so far as the old person is concerned there is a similar problem in the urban areas as well. There is the problem of the old people who may be owner-occupiers but do not have the financial resources to maintain their homes. Their home may be too large for them to keep up and they will be looking for opportunities to transfer into smaller or more suitable rented property in which they can manage—this is terribly important—on their own and retain their independence.

1787
I think there is no doubt that, unless the exclusion is enlarged in the way that I have outlined, it is really going to be very hard for older people in the future.
The old person buys the house or flat and afterwards the children inherit it or take it over. In the rural areas, as the noble Lord, Lord Hylton, said, there is the great attraction of a second home. The property may than be lived in by younger people who do not need to live in that special location which is designed for the ease and comfort of the older person. Or the property will be sold, and then it goes out of the housing stock altogether. This is not in any way, in my view, a party political or necessarily a political question at all. It is purely a human question; it is tied up with the amount of housing stock available.
It is also a question of economic sense and common sense. Even the present housing stock is not sufficient to meet the needs of many elderly people who would like to be able to remain on their own. However, to let that housing stock drift away—and it will—is very wrong. This Committee of your Lordship's House—and the House has always shown a great and informed interest in social questions —should advise the Government to show some relaxation and latitude on this matter.
The right reverend prelate the Lord Bishop of Guildford asked me to give the Committee his apologies. He said in his letter to me:
" I very much hope that your amendment will be passed and I entirely support it".
He is concerned about the situation of old people, both in his area and, as he says, on general grounds as well. It seems to me that this is a concession which the Government not only can make but ought to make. It really is in the interests of the community and is not in the interests of any particular political party.
Lord SANDFORD: In coming to Schedule 1, we are coming to the part of the Bill which deals with the exceptions to be made to the right to buy. The whole Committee will agree with the noble Baroness when she says that the concern for the housing of the elderly is something which is shared by all the parties. The Association of District Councils—which
1788
contains councils under the control of both parties—also agrees that it is necessary in this field for special arrangements to be made for the elderly. Some have been made precisely in line with the election manifesto, but there is a case for examining them closely and seeing whether they can be extended a little further. However, I do not think that my noble friend Lord Hylton or the noble Baroness have set about it in the right way. This is the only exception that needs to be enlarged. I believe the other exceptions dealt with in subsequent amendments from now until Amendment No. 11 are not necessary. That is also the view of the Association of District Councils. They are satisfied with the exceptions already being made for the rural areas, and it is only in the case of the elderly that they think that any further consideration is necessary.
The right solution to this problem has been found by other Members of this Committee. It is no surprise to the Committee that it has been found by the noble Baroness, Lady Denington, and the noble Lord, Lord Greenwood of Rossendale, who are both immensely experienced in this field. It is because I think, as the Association of District Councils also think, that the approach they make with their amendments after Clause 16 is the right one that I do not recommend the Committee to adopt the course being advocated at the moment.
6.25 p.m.
Lord EVANS of CLAUGHTON: From these Benches may I say that the welcome one gives to the principle set out in this amendment is a warm one. However, the basic point that I wish to make in recommending noble friends not to vote for this amendment has been made by the noble Lord, Lord Sandford, when he drew attention to Amendment No. 53 in the names of the noble Baroness, Lady Denington, and the noble Lord, Lord Greenwood of Rossendale, followed by Amendment No. 54 in my own name. It appears to me that my amendment is exactly the same and I suspect we were getting advice from the same source. I received my advice from the Association of Metropolitan Authorities.
I would prefer that one of those amendments should be carried which would enable elderly people in the circumstances

1789
described by the noble Baroness and the noble Lord, Lord Hylton, to have the right to buy, but there should be a preemption which would mean that the property would return to the local authority's stock if the local authority wanted it at the end of the use by the elderly at the increased price which the district valuer would settle. It would be grossly unfair if one group of elderly, active people were prevented from having the opportunity of benefiting from the capital gain that other people would be making. That is why I prefer Amendments Nos. 53 and 54 to Amendment No. 5.
Lord GISBOROUGH: I should like to support this amendment in principle. I hope that the Minister will advise us as to which amendment he will accept, in view of the general support in the Committee. Very often one finds that old people living in bungalows do not want to purchase because they are too old. Therefore I do not think their inability to purchase will be of great concern to the majority of them.
Baroness DENINGTON: I should like to make my position clear. As has been said, I have an amendment down on page 9 of the Marshalled List, but I am giving my full support to this amendment. The reason I also have an amendment is because 1 fear—alas!—that the Government may not accept this amendment. I tried very hard to put down an amendment that I hoped leaned as far as possible in the Government's direction so as to enable them to accept it in the last instance. Nevertheless, I give this amendment my wholehearted support. I hope that my position is clear.
I feel tremendous concern, as do the noble Lord, Lord Hylton, and my noble friend Lady Birk, at the proposals to sell all these dwellings that are now habitually used for housing elderly people. I was very interested—as we must all have been —in Lord Hylton's figures. My amendment will, according to his figures—and I think it is possibly a national position—lose half of those whom this amendment would protect. But, if we must lose half, let us try and gain half with the other amendment.
I sincerely hope—as many of us do on all sides—that the Government will accept this amendment.—I, like the noble
1790
Baroness, Lady Birk, read carefully Lord Bellwin's speech on Second Reading on 9th June. I was very interested in it. May I quote one part to which the noble Baroness also referred. At col. 131 the noble Lord said:
"The treatment of old people's dwellings in the Bill is a matter of judgment. It involves balancing community interests against the interests, or in this case the rights, of individuals. That is a balance which we have tried our best to strike correctly".
Those last words—and I did stress the important ones as I read them—show that this is a party political decision: "We, in our judgment". He stresses that this is a question of balancing community interests against the rights of individuals.
What I am questioning is the judgment of the Tory Party, just as many, many times I, a member of the Labour Party, query very deeply the judgment of my own party. We all do it if we are sincere people; of that I am quite certain. This to me is not a matter of party politics, as the noble Baroness, Lady Birk, said. The Labour Party does not like the alienation (I think I must use that word) of old people's dwellings from public ownership. I think, quite plainly, that the Liberal Party do not like it either. The AMA do not like it either, and they are most concerned about it. The Association of District Councils have made representations: they do not like it either. And when the AMA and the ADC are under Conservative majorities—true, the AMA has now changed but the policy statement was made before the change of control—that is not a matter of "party" policy. It is a matter of what appears right to those of us who work in the housing field. There are many individuals and organisations and there are many individuals in this Chamber who find the matter extremely worrying and they are concerned about it.
I really cannot help feeling that the people who voted, as the noble Lord, Lord Bellwin, has stressed to us, in the last election, voted for the Conservative Party, and the sale of council houses was a major plank in that party's manifesto. That is agreed and we must accept it. I must admit that I never read their manifesto, but I cannot believe—I am sure the noble Lord, Lord Bellwin, will correct me if I am wrong—that in it they spelt out to their voters that it was their intention to

1791
make it much more difficult for elderly people to be adequately and properly housed in the future. I cannot think they did, because had they done that I think the matter would have been raised very, very strongly with them before the election took place.
I say that this is not a party issue at all. As the noble Baroness, Lady Birk, said, it is a matter of common humanity, common necessity and of common decency towards our elderly citizens. I will go back for a moment to the speech of the noble Lord, Lord Bellwin, on Second Reading. He said then at column 132:
"Your Lordships are rightly jealous of our democratic rights, but there are bound to be instances where it has to be accepted that national policies must dominate over local policies".
I utterly agree; but so must national needs dominate over party policies: that is the point I am trying to make. The Minister continued, in his interesting speech, by referring to Labour authorities who are "too doctrinaire". Again, how profoundly I agree with him! I know some, just as he knows some, which are far, far too doctrinaire; but I would ask him to consider his own attitude and that of his party in this particular matter. Are they not being too doctrinaire? I just ask that question and I hope he will ponder it. National needs, in my view, must dominate over party policy; and in this issue regarding our national needs, as the noble Baroness, Lady Birk, has already pointed out, we have an ageing population and a real national shortage of accommodation suitable for old people.
Socially, these dwellings we are talking about have a very great scarcity value and they ought not to be alienated. There is a great need to conserve them in public ownership because that is the only way they can be kept available for those who will follow the people who are now living in them. These dwellings have been provided by public money and through public initiative to meet the needs of those for whom public authorities are responsible.
I stress again that there is still a shortage. There is a shortage in the public sector and there is an enormous shortage in the private sector. I wish there were more private money that could be channelled into providing private homes for the elderly, where those who own a house-
1792
and sometimes it is much too big for them and they want to get out of it—could buy a 25-or 30-year lease on a private property built for them with private money. We have over the whole of this field an enormous national shortage of proper accommodation tailored for elderly people, and I suggest that we are making a tremendous mistake if we let go of any of it. I beg your Lordships to consider this matter very, very deeply, and I beg the Minister to be generous in his reply. But if he is not, I still have a long-stop!
6.37 p.m.
Lord SHINWELL: I refuse to believe that when the Government considered the manifesto they deliberately, maliciously and, I add to that, with malice aforethought, introduced this section of the Bill. I refuse to believe it. I do not mean by that that there are not innumerable objections to the Bill, and many of them are of a political character; but how can one inject politics into this section? It has compassionate aspects, humanitarian aspects, and the like, but nothing really political. There is no question of partisanship in a matter of this kind.
What are we discussing? We are really discussing a principle which in effect is based on this: should we exclude from old age pensioners certain rights which are made available to a large body of people? It is as simple as that. If we agree that the rights which are embodied in this Bill in various sections are available to ordinary people—to young people, middle-aged people and so on—why exclude old age pensioners? It is really a matter of principle, and I think that the Minister, with all his eloquence and ability, at any rate in matters of this kind, whatever abilities he may lack in other areas, will find great difficulty in resisting the demands that have been made in all quarters of the Committee.
It occurs to me that this is not a matter which requires a Division. No vote is required. I say that because of the suggestion made by the noble Lord, Lord Sandford, and the noble Lord, Lord Evans. For example, the noble Lord, Lord Evans, pointed to Amendment No. 53 and said that it is all there. But there is no guarantee that when we come to that it will be found acceptable by the noble Lord, Lord Bellwin. I would

1793
not take a chance on it. I prefer to deal with the situation which presents itself to us now, immediately. Forget about the rest. Anyway, with the greatest respect in the world, even if a guarantee was suggested by the noble Lord, Lord Bellwin, and having previously said something rather different, I should prefer not to accept it.
Let us deal with this matter of principle. Are we going to exclude from some people certain rights which we believe are acceptable to a very large section of the people concerned with housing? That is what we are discussing. I venture to say to noble Lords opposite that they would have very great difficulty in arguing against that. How do they do that? They can do only this, and I suggest that it should be done.
The noble Lord, Lord Bellwin, should get up and say "I have listened to what has been said. I may not agree entirely with some of the arguments adduced, but in these circumstances I will do the right thing—even if it is the only right thing I do in the course of our debates on the Housing Bill—and I will give this matter sympathetic consideration. Later on, when we come back on Report stage, having thought it out deliberately, compassionately, with the utmost humanity and in principle, I shall be able to say"—I am speaking on behalf of the noble Lord, Lord Bellwin—" that we accept what was suggested on this clause and let us have no further discussion."
6.43 p.m.
Lord DIGBY: It might be for the convenience of the Committee if I spoke to Amendment No. 6, as that cannot be called should a certain result attend this amendment. I ought to explain to the Committee that in the first Marshalled List an "and" was added to the end of my amendment, which completely altered the whole meaning of it. Therefore, I hope that your Lordships will bear with me if I read out the paragraph as it would be if my amendment were carried. It reads:
"The dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons of pensionable age and"—
this is my amendment—
"where there arc more than ten elderly persons' dwellings in one parish a social service or special
1794
facilities are provided in close proximity to the group of dwelling-houses for the only or main purpose of assisting those persons".
The point of my amendment is to exclude old people's dwellings in small villages from the right to buy. Many villages have elderly persons' dwellings in small groups of four and six, and it is quite uneconomic to have a warden service, which is what is implied in the second part of this paragraph, for those groups.
As the Bill stands at present, the tenants would have a right to buy. I support entirely the principle of this Bill, but am very concerned that it might reduce the supply of old people's dwellings in small villages. These dwellings are now a vital part of village life and social structure, and, if they are sold when an elderly person dies, then they may well pass to a son or daughter and out of the ambit of elderly people.
Old people do not move well. There is a world of difference between moving to a convenient house in the same village and having to move to another village or town. I cannot believe that the Government intend to deprive small villages of elderly persons' homes. These dwellings not only help the tenants, but in many cases help the council, because they can move a widow or widower from a large council house into these old people's houses, and thereby provide a home for a larger family.
Doubtless, the noble Lord, Lord Bellwin, will tell me that my amendment goes too wide, but I hope that the Government will give further thought to keeping old persons' homes in small villages. My point is very much narrower than Amendment No. 5, which I am afraid I cannot support. But I hope that the Government will consider my point on the narrow issue of small villages.
Lord SEEBOHM: I have been referred to as the president of Age Concern, which is perfectly true, but a more relevant qualification I have, if any, is that of chairman of the trustees which owns the New Earswick village in Yorkshire, where we have done a good deal of experimentation in looking after old people, both in building groups of houses, which are an enormous success, and in residential homes.

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I have become more and more convinced, as time goes on, that there is a very strong case for building a number of houses which are not in groups, but are more in the community where there are children round about, because old people love watching children running around and the children can make jolly good use of the old people. I am not sure whether paragraph 4, which specifically states that a
"dwelling-house is one of a group of dwelling-houses"
might cramp what I believe is quite an important movement for the future, of building houses which do not put all old people together but are in a community of all ages. So I like this amendment.
6.47 p.m.
Baroness FISHER of REDNAL: I shall be quite brief. I understand that what the schedule is saying is that we will accept warden service housing and nothing else. If my interpretation is wrong, then perhaps I shall be told about that afterwards. What I want to say is that if you can act humanely, and place somebody who is elderly in a bungalow which has some adaptations—whether it is special bath rails, dimmer lights, ramps or whatever—then that commends itself to all of us. But if you want to look at this financially, you have to say that it is much cheaper for the social services, and therefore the local authority, to provide meals on wheels and home helps, than it is to place someone in an elderly person's home. It is better for the person concerned as well as being cheaper, if you want to look at it from the economic point of view.
Lots of local authorities have used their initiative in providing for the elderly, and the DoE have themselves produced this occasional paper Housing the Elderly, which goes into great detail about various ways in which local authorities have tried to be helpful when they have not been able to provide warden service housing, because it might not have been economic or because they felt that there was a better system.
They talk about peripatetic wardens, self-help schemes and the gradual extension of electronic aids and warning systems. The good neighbour policy has now been taken up by a lot of local authorities. It is cheap and it performs
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the right kind of function. I want to ask the Minister: are these schemes to be lost, because they do not conform to the letter and are not part of a warden housing scheme?
The particular point I want to emphasise is that on 21st February, when the Environment Secretary, Mr. Michael Heseltine, announced the housing investment programme, he said that housing needs and problems had become increasingly specific and local and that the emphasis of public sector housing policy now must be to meet particular needs such as those of the elderly and the handicapped. I think that the handicapped are being catered for in the Bill, but perhaps the noble Lord will remind the Environment Secretary that the elderly were also included in his announcement on 21st February.
Lord MILVERTON: I should like to support the amendment of my noble friend Lord Hylton and the noble Baroness, Lady Birk. Looking ahead, I shall also support the amendment of the noble Lord, Lord Greenwood of Rossendale, though whether it is moved will depend on what happens to this amendment. As certain other noble Lords have said, I feel that we may forget about caring properly for some old people. Quite a few old people like to look after themselves and are quite capable of doing so, but there are others who need our help. I agree with those who have said that small places and villages need to have some bungalows for old people. It is good for the place and for the people, as well as for the old people. Therefore, I support the amendment and, later, I shall support wholeheartedly the amendment of the noble Lord, Lord Greenwood of Rossendale.
Lord GREENWOOD of ROSSENDALE: Like my noble friend Lord Shinwell, I am an essentially reasonable and emollient character, and I hope that I may be able to help him by ensuring this evening that there is not too much of a difference of opinion on this issue. I have a great deal of sympathy with the noble Lord, Lord Hylton, and my noble friend Lady Birk. However, looking at it purely from the point of view of practicality and getting the largest measure of agreement, I feel that it may be possible

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to get that support for the amendment tabled by my noble friend Lady Denington and myself or for that tabled by the noble Lord, Lord Evans of Claughton. Incidentally, his amendment is not quite the same as the amendment which my noble friend and I have tabled. I believe that one of those amendments would have great support.
I appreciate what was said by the noble Lord, Lord Sandford. As president of the AMA and as a vice-president of the ADC, I can say that there is ground for believing that the amendment tabled by my noble friend and I would be very acceptable to both of those organisations. I would say this to my noble friends: that if the Minister, for whom I have very great respect, is able to tell us that he will look sympathetically at the amendment tabled by my noble friend Lady Denington and myself, I shall urge my noble friends on the Front Bench not to press this amendment to a Division.
Lord PARGITER: There is one small point that I should like to draw to the Minister's attention. The up-to-date situation is that with the almost cessation of council house building in some areas, local authorities feel compelled to restrict their building efforts to building more places for old people. That goes to show that this happens to be the most urgent sector at present. Therefore nothing should be done to reduce the stock in that area.
Lord IRVING of DARTFORD: I should like to support Amendment No. 5. After 30 years' experience in local government, and still a member of a local authority and chairman of its finance committee, I am firmly of the opinion that the outstanding need and the area of the greatest neglect is that of housing for old people. Many authorities, under pressure from growing numbers of families needing housing after the war, for nearly 30 years pressed on with two-and three-bedroomed properties at the expense of homes for the elderly. Many elderly people remained in under-occupied properties, private or council, or lived with their families when they needed homes of their own. This was because there was no suitable council accommodation and because private enterprise had not entered the field in any measure.
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This means that today the waiting lists for homes for the elderly are sometimes longer than those for other applicants. The waiting time is much greater in almost every authority. Therefore anything which makes this problem more difficult is exacerbating an already difficult situation. There are many old age pensioners who have waited nearly 10 years in some authorities—in authorities where they are able to house people in three-bedroomed properties in under a year. Even for urgent cases the waiting list is often three of four years.
In my own authority, which is not untypical, the housing stock comprises 56 per cent. of three-bedroomed properties, 27 per cent. of two-bedroomed properties and only 17 per cent. of one-bedroomed houses. This takes in not only old people but all the single people who are waiting for that kind of accommodation. Therefore, the provision is very limited indeed. Of that percentage, 200 are wardened accommodation properties. However, when one looks at the housing list one sees that half of the total applicants are looking for one-bedroomed properties, and half of that number are old age pensioners.
If a local council is required to sell all except its wardened properties, it will further seriously depress the prospects for the elderly, as at present the turnover of the limited accommodation available is greater than that of other classes of accommodation. Once these properties are sold, sooner or later they will pass into the hands of much younger people. This is because older people will not be able to provide the money to go into the market and buy such properties. I believe that this is the reason for making a distinction in treatment between elderly people and the rest of the community.
Many authorities like my own have regarded one-bedroomed properties as interchangeable. The decision that properties like this should come within Section 4 means that the great majority of properties available for old people will go. On a number of estates, bungalows and old people's properties were quite deliberately spread throughout the estates. Those properties, deliberately planned in that way, will, for that reason, be sure of being sold. May I ask the Government to look again at this matter,

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for I believe that it would be an act of kindness and justice to do so.
Lord BELLWIN: I said at the beginning that I would listen very carefully to what was said during the various debates, and I can assure noble Lords that I have done so. I am sure that my noble friend Lord Hylton will gladly accept that from me. There have been some fascinating contributions to this debate. May I begin by referring to some of the points made by the noble Baroness, Lady Denington, who, as she rightly reminded us, together with the noble Lord, Lord Greenwood of Rossendale, has tabled Amendment No. 53 while the noble Lord, Lord Evans of Claughton, has tabled Amendment No. 54. Although they are not exactly the same, they are quite similar and cover the same point.
If I may refer to some of her observations, the noble Baroness said—I am reading what she said—that we had set out to find a balance which we felt to be correct between, on the one hand, carrying out our election promise to the elderly, namely, to enable them to have the right to buy—yes, that was an election promise and it is one that we want to see carried out—yet at the same time ensuring that the needs of the community for this type of accommodation were not so disturbed as to have an adverse effect upon the ability to make public provision.
As with all these things, it is a matter of judgment. One may call it political or one may call it anything else, but at the end of the day there will be a judgment. The noble Lord, Lord Shin-well, to whom I shall refer in a moment, was kind enough to say that one tries, with the best motivations—and one does—to get the balance right. Now what is right requires a judgment upon which one might, at the end of the day, have to disagree. However, I take without question the point made by the noble Baroness. She said we should not make it more difficult for elderly people to be adequately and properly housed. Those were the words she used. That is really the tenor of what many other of your Lordships have said. I would say to her that the last thing that we intend is that we should make it more difficult for eldery people to be adequately and properly housed; that is not our intention at all. But
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what will have to be decided at the end of the day is whether what we propose does or does not have that effect. I suppose only time will prove that one way or the other. We do not believe it does.
I have before me a whole set speech for Amendments Nos. 53, 54, 5, 6 and 8, and frankly I am not looking at it at all, because with the tolerance of the Committee I am really speaking right across the subject. I think that is what the Committee would want me to do. There are very many elderly people who want to buy their houses—you would be surprised if you knew how many. I have not got the figure but it is a great number round the country. We do not want that they should be disadvantaged because they are elderly. They are able to make their own judgments about what they want and we want to enable them to buy a house, and, yes, pass it on to those who follow them. What is wrong with that? Surely it must be one of the greatest joys in life to be able to pass on to one's children after one has gone something which has worth. I do not think anyone in the Committee would quarrel with that.
The only debate is what happens about availability of accommodation to house those who will remain and still continue to have need. That is the kernel of it. The noble Lord was absolutely right when he said the greatest need in housing is to provide one- and two-bedroomed accommodation. But may I remind your Lordships that one- and two-bedroomed accommodation is also what the young people in the community need. They also have a great need. Your Lordships would be the last to seek to deny to the younger people also the opportunity to have that kind of accommodation. Is it not a fact that if the old people enjoy the rest of their lives in their home, thereby making it neither more nor less available to any other old person, if it is then young people who occupy it it might marginally affect the ability to help the elderly but at least the home would be going to another section of the community which is in great need? I say that because that is part of the debate.
Turning to the noble Lord, Lord Shinwell, I thought he was so persuasive and so hard to deny—really very disarming —and one always has to be very careful

1801
when the noble Lord speaks. He and others of your Lordships said that this is not political, and I am happy if it is felt that it is not political in the party sense; I do not consider it to be such, not at all. It is a question of making available homes for those who need them so much and yet at the same time—and I repeat myself because it is fundamental—fulfilling the promise to give the elderly their chance to have something and to give something in their turn. The noble Lord, Lord Shinwell, said that we should be excluding certain rights which are available to old people. But that is exactly what we are trying to give, not to exclude. We are trying, as we see it, to give old people rights which they do not have today and which we do not wish to see them not have by comparison with the rest of the community. But I entirely take the point; I know exactly what the debate is about and I am sure your Lordships know that I know what the debate is about.
I am always very influenced by what the noble Lord, Lord Greenwood, says. He and I go back an awfully long way in housing and I have great respect for his views and thinking on housing. Again I am appreciative of what the noble Baroness, Lady Fisher, said, and she knows also that I am aware of the social side of what local authorities have to do to help their elderly and meet their needs. I am not insensitive to the feeling of the Committee. Perhaps my noble friend Lord Hylton and my noble friend Lord Digby would feel able to withdraw these amendments, despite Lord Shinwell's hesitations as to my guarantees. I really am not quite sure what caused him to express reservations; he was so kind as to my abilities that I am not quite sure what caused him to express reservations: however, that may be something for another time.
Despite the noble Lord's concern, I would be prepared to say this: if noble Lords are willing to withdraw Amendments Nos. 5, 6 and 8, I undertake when we come to Amendments Nos. 53 and 54 to take those away and talk about them again with my colleagues. I think that would probably satisfy the noble Baroness, Lady Denington, and the noble Lord, Lord Greenwood—they did intimate as much—also my noble friend Lord Sandford, whose opinions on this I follow
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very closely. I think, frankly, that that is what I ought to do, and it is what I gladly undertake to do. I think that is the best way to make progress tonight on this subject.
Baroness BIRK: My name is joined to this amendment with the noble Lord, Lord Hylton, and the right reverend Prelate. The noble Lord, Lord Bellwin, was talking about old people having the right to buy their own homes. This amendment does not preclude that; it says specifically that it covers only those dwelling-houses,
"which it is the practice of the landlord to let for occupation by persons of pensionable age".
If it is not the practice, then they get the right like anybody else under the Bill. It is only in those particular cases. Perhaps, as this is an amendment that I personally feel very strongly about, the noble Lord could just enlarge a little on that, so that I can make up my mind whether I wish to withdraw.
Lord PITT of HAMPSTEAD: Before the noble Lord, Lord Hylton, decides whether or not to withdraw this amendment, may I draw your Lordships' attention to one of the losses that are likely to be incurred through this Bill? The Greater London Council builds a lot of seaside bungalows for old people. There is not the slightest doubt that they are very attractive and in fact they will be sold. I cannot see the GLC going on building those bungalows merely for people to sell them.
Lord HYLTON: I am not quite clear exactly what the offer was that was made, by the noble Lord, Lord Beltwin. Was he saying that he would sympathetically consider Amendments Nos. 53 and 54 if this Amendment No. 5 was withdrawn, or was he saying something else?
Lord BELLWIN: I was saying very much that. I was tempted to speak at some length to these Amendments Nos. 5, 6 and 8, but I feel that, in the interests of what the Committee would like me to do, bearing in mind that these amendments, like Nos. 53 and 54, do cover this whole subject, if my noble friend feels able to withdraw them I shall not need to speak at length on them, and I would further undertake to take away Amendments Nos. 53 and 54 to consider and

1803
discuss them with my ministerial colleagues.
Lord HYLTON: I am extremely grateful for the support I have had on Amendment No. 5 from all parts of the Committee. I think my noble friend Lord Sandford expressed the views of the Committee extremely well when he said we have a shared concern over everything that concerns old people's housing. The noble Baroness, Lady Denington, mentioned the extreme scarcity value of every unit of old people's housing, and how much I agree. I am also extremely grateful to the noble Lord, Lord Seebohm, for his support. My contention is that every single vacancy that one gets in the existing stock of old people's housing is absolutely vital. The noble Lord, Lord Evans, mentioned the possibility for old people to have a capital gain when they have bought their flat or bungalow. I just wonder how many will be in that position when one considers the proportion who are now dependent upon supplementary pensions. I do not think that they will be able to afford mortgages.
The difference between Amendment No. 5 and the later Amendments Nos. 53 and 54 is that my amendment acts as an exclusion from the right to buy. The later amendments, which my noble friend is prepared to consider, give the local authority a right of pre-emption. These are two fairly different matters and, as we are somewhat embarked upon preemption, I should like to ask how a local authority will meet the vast price difference between a bungalow sold at its present value less discount, and the open-market value in future when it comes to buy back. That will particularly be the case with the seaside bungalows built by the Greater London Council, as was mentioned by the noble Lord, Lord Pitt of Hampstead.
Therefore, I think that the Committee ought to have an opportunity to express its opinion by a vote as to whether or not pre-emption is a sufficient safeguard. I contend that it is not a sufficient safeguard and I hope that the Committee will support me in going for exclusion.
Lord BELLWIN: I gather that my noble friend is not willing to withdraw his amendment and so I think that I must speak on it either now or later, because it
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has been suggested that in view of the time we should resume the House.
Lord ELWYN-JONES: It would seem an occasion to finish the subject-matter. I think that it has reached the point of near oral exhaustion.
Lord BELLWIN: Would that it were so! Unfortunately, it is very far from the case, and I frankly regret very much that my expression of willingness to take this matter away to consider it has been turned down in the way that it has. It is the first time since I have been in your Lordships' House or in Committee that I have ever heard that happen. I think that it is important that we should—
Lord HYLTON: Will the Minister give way? Surely he has confirmed to me that he is not considering Amendment No. 5? He is prepared to consider Amendments Nos. 53 and 54.
Lord BELLWIN: There is always the Report stage, of course, but the fact is that if we are to have a discussion on this matter then I must do it this way. I should have thought that there was great merit in our having the ability to try to find agreement by mutual understanding rather than by putting it to the vote.
Lord BEAUMONT of WHITLEY: Will the Minister give way? From the interchanges that we have just had perhaps the Minister would undertake to consider —as he has already very generously and rightly agreed to do as regards the later amendments—at the same time the differences between the two types of amendment which the noble Lord, Lord Hylton, has just pointed out, so that we can come back with the whole principle at a later stage. If he did that surely the noble Lord, Lord Hylton, and the noble Baroness, Lady Birk, would be prepared to withdraw.
Lord BELLWIN: I am grateful to the noble Lord. I may have put it wrongly, in which case I apologise to my noble friend, but I specifically said that if he would withdraw these amendments we would come back on Amendments Nos. 53 and 54. I also said—or meant to say—that the areas were very close together and that, although there were differences between the amendments, nevertheless, I

1805
would feel equally obliged to consider the points in all these amendments because I think they form part of the whole subject. So, if it is of help to my noble friend, I gladly undertake to do that too.
Lord HYLTON: With that assurance, I beg leave to withdraw that amendment.
Amendment, by leave withdrawn.
Lord MOWBRAY and STOURTON: I think that it is time that we moved to the next business. I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

BRITISH STEEL CORPORATION FINANCES
4.13 p.m.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, with the leave of the House, I shall now repeat the Statement made a short while ago in the other place by my right honourable friend the Secretary of State for Industry. The Statement runs as follows:
"With permission, Mr. Speaker, I wish to make a Statement on the British Steel Corporation.
"For the last financial year, as the House was told on 10th June, BSC estimate a loss before adjustments of £450 million from ordinary activities. There are also extraordinary items, consisting of redundancy and other closure costs and a write-down of over £1,100 million of fixed assets. Final figures will be available in a few weeks' time.
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"For this financial year, as the House knows, the Government have made £450 million of taxpayers' money available as the external financing limit. The chairman has warned me for months that, without corrective action, BSC's needs would greatly exceed the external financing limit but he also told me that he was seeking remedies and was not asking for more cash. On 6th June, however, he wrote to me that, even after allowing for the remedies being pursued, his board foresaw an additional cash requirement of around £400 million in the financial year 1980–81 over and above the EFL. He wrote that unless the Government agreed to the factoring of home debts and the sale and leaseback of major assets outside the EFL to provide this £400 million, BSC could not carry on trading and the board would have to recommend the liquidation of the business.
"Measures such as BSC have proposed would, of course, only postpone the day of reckoning. As for liquidation, the Iron and Steel Act 1975 makes no provision for this. The £400 million figure is based on provisional trading forecasts: a firmer figure, which may well be larger, will have to await an up-to-date assessment of BSC's trading position.
"Over the past year, the market has fallen away both at home and abroad with a depressive effect on prices. Meanwhile, BSC's costs have been rising sharply. The long strike has, as I warned the House, made BSC's sales and job prospects and the cash problems worse.

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"We are not satisfied that the corporation have yet taken with sufficient speed and determination all the action open to them to reduce their cash requirement in 1980–81. Mr. MacGregor, who takes office as chairman next week, will need time to produce new proposals.
"Until Mr. MacGregor has made his proposals and we are satisfied that the corporation is taking the necessary measures we are not prepared to reconsider the level of the external financing limit. Should the Government decide to advance additional funds, any money required would involve a winter supplementary estimate and if needed before then would be provided by a repayable advance from the Contingencies Fund. I shall report to the House again later in the year.
"Meanwhile, having considered the corporation's concern about taking on fresh financial commitments, I have asked BSC to continue trading as an on-going business. I have told them that in the last resort Her Majesty's Government would have to ensure that creditors of the corporation had their claims met in full.
"BSC have for years suffered from political interference and insulation from market realities. The taxpayer has already contributed over £4,000 million to BSC over the past five years; a further £450 million is being made available in the current year and now we are being asked to consider yet further calls on the taxpayer. BSC are still faced by excess capacity and lack of competitiveness in what is an intensely competitive market. It is for the new chairman to use every practicable means, including a further review of capacity and disposals, to bring the corporation's cash requirements as close as practicable to the EFL and to see if it is possible to restore the corporation's financial and trading position".
My Lords, that is the end of the Statement.
4.18 p.m.
Lord LEE of NEWTON: My Lords, in a long parliamentary career I do not think that I have ever heard a more
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serious Statement on any industry in this nation. Is the noble Viscount aware that it is difficult for us to believe that this state of affairs has suddenly come up on the Government, without their intimating anything of the kind to either House of Parliament? Indeed, following this Statement there will be consternation and anxiety throughout the whole of the areas in which the steel industry is situated. It would seem that there is now a threat to the whole bulk producing sector of the BSC. That threat will be seen to involve not only Wales, Scotland and the North of England, but indeed those vast number of industries which depend entirely on steel as their raw material.
The Statement is the culmination of 12 months of dithering during which the cash limits have been shown to be inadequate. On these issues even now we really get no answer to the problems which the Statement poses to us.
The extraordinary items referred to in paragraph 2 include, as has been said, the costs of redundancy and closures; but surely it has been possible, while that was happening, for the Ministry to be able to make an estimation of what the total costs would be? We are further informed that the chairman of the BSC informed the Secretary of State many months ago that without further financial aid BSC cash limits would be quite inadequate, but that the chairman was not asking for more money. What, in Heaven's name! did the Secretary of State think the chairman was going to use for money after a statement of that kind? It would seem that on the 6th June the board put the figure of £400 million in the year 1980–81 as the additional requirement for that period. Then we read again in paragraph 4 that that would merely postpone the day of reckoning.
Again, in paragraph 2 we are told about a total write-down of assets of over £1,100 million. I have had some experience of writing down assets, but in this Statement there is no indication whatever that the Government are even agreeing to write off that figure. May I ask the noble Viscount, do they propose to do so? If not, how do they propose to deal with an issue which, as given in the Statement, would justify the liquidation of the whole industry, were it not possible under the Act for them to do so?

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Another question to which the noble Viscount will perhaps address himself is this: Is this the preliminary to a proposition to write off the whole production of the bulk steel industry in this country? I have had a chance to look at this for only a short time, but to my reading of it, that is inevitably the threat that is now posed by this Statement.
How much knowledge of this had the trade unions in the industry? Long before we got to this pass surely the Secretary of State should have called together not only the interested members of the Government but the whole of the BSC and the whole of the trade unions involved in the steel industry, to find a way to face these problems. Is there any intention by the Government now to convene that kind of machinery in order to try to make a go of what appears now to be a very distressing spectre indeed?
We are left now to wonder just what attitude the Government intend to take to it, having said nothing as to how they are going to deal with the problems they have posed, except to say: "In a while we will consider whether to write off this or that" That will not do. As the weeks pass the problem is intensified. Unless action of a wide-ranging nature is taken almost immediately, the despair created throughout the steel industry and the steel users of this country will spread like wildfire. I ask the noble Viscount: What are the necessary steps in the immediate future that the Government intend to take?
4.24 p.m.
Lord ROCHESTER: My Lords, from these Benches I should like to thank the Minister for having repeated this Statement. I do not think I can thank him for much else. It is a harsh Statement and, in my view, inadequate to meet the present situation. As I said in response to the Statement made last week on remedial measures for areas affected by the steel rundown, we on these Benches accept the need for the restructuring of the steel industry, and therefore I think I can fairly claim that we have already shown our willingness to approach this problem in a positive way. But, as I have also made plain before, the Government have a very heavy responsibility to see
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that the necessary adjustments are made at a pace that does not produce intolerable social strains, particularly among young people in areas where unemployment is already very high.
In The Times this morning there are reports that the Manpower Services Commissior is dissatisfied with the Government's requirement for it to make still further staff cuts despite the enormous growth in unemployment generally, of which we were hearing earlier this week, and the greatly increased calls on the training and special programmes that are sponsored by the commission for people out of work. I suggest that the Government really cannot have it both ways. If they insist on confining the BSC to the present financial limits, surely it becomes even more necessary to provide the means by which the Manpower Services Commission can handle the additional problems that result.
I should like to ask the noble Viscount a number of specific questions. First, is it not the case that in some towns like Shotton, Corby and Consett, which have been so heavily dependent on the steel industry for employment, conservative estimates are that there are already more than 10 per cent. of the employable population out of work and this figure will rise to as much as 25 per cent. for the next few years, including a very large increase in the number of unemployed school-leavers?
Secondly, are the Government satisfied that the facilities are adequate for retraining steel workers who have the capability to take up skilled occupations in lighter industries, whether in terms of the use now being made of existing training premises, or the availability of further facilities for this purpose? I think the noble Viscount will be aware already of the concern that is felt by your Lordships' Select Committee on unemployment on this point. It is a very real present problem and it is not going to go away while we are waiting for Mr. Ian MacGregor to size up the situation.
Finally, would the noble Viscount not agree that new firms are less likely to cornmit themselves to come to steel towns such as those I have mentioned if there is insufficient skilled labour available in those places? Putting all this in another

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way, if the Government are not going to give the Manpower Services Commission adequate funds to cope with the rapidly worsening employment situation, they should in the case of the steel industry, in our view, make more money available to the corporation, thus enabling the pace of rundown to be slowed.
4.29 p.m.
Viscount TRENCHARD, My Lords, nobody in the Government wishes in any way to belittle the extreme seriousness of the situation in steel, and so I find that I can echo the opening words of the noble Lord, Lord Lee. It is indeed a very serious situation and it arises to a high degree out of the failure of previous Governments to ensure that the British Steel Corporation management faced up to the realities of the market and the realities of the competitive situation between British Steel and the steel industries of other countries; so we have a really major problem to sort out.
The noble Lord, Lord Lee, is quite right, of course, in saying that this did not happen suddenly, and the chairman of the British Steel Corporation has been warning of the threatening position, partly arising out of failing to meet their own targets of movement towards competitiveness, partly, of course, arising out of the steel strike and the damage that that has done, as my right honourable friend warned that it would do. However, it is true that until 6th June the chairman of British Steel and his board informed my right honourable friend, and believed, that they could take remedial actions to stay within, or very nearly within, the financing limit.
I think that the noble Lord, who has, as he rightly said, only just had time to look at a difficult Statement, is not separating the part of the Statement about 1979-80 from the part about the external financing limit for 1980–81. The £1,100 million is the figure that will be found when the accounts come out in relation to 1979–80—the Statement referred to unaudited figures—but is the figure of write-off of assets, both because of the reduction of demand and thus of capacity, and because of any realistic value of the assets in the industry as it is today. So they will come out in the accounts for 1979–80—
Lord LEE of NEWTON: My Lords, I am sorry to interrupt, but I should like to get this clear. Is the noble Viscount saying that credit will now be given to the BSC for that write-off, and that interest rates and so on which have been paid on that money will not now need to be paid any more in this year's assets?
Viscount TRENCHARD: My Lords, it will not, of course, affect the cash limit, because a write-off in the books does not do so. So it is a book transaction to bring the assets into line with the realistic value as they now stand. The main part of the Statement relates to the cash limit for 1980–81.
The next main point of the noble Lord, Lord Lee, was: Did this represent a major threat to the bulk producing areas of British Steel? He also expressed his alarm that the effect of this announcement, on both the areas and the people working in British Steel, would be very serious. Indeed, I understand his concern in both those two areas, and all I wish to say is that the Government have the greatest confidence in Mr. MacGregor in reviewing, as optimistically as he possibly can, all the alternatives that he sees before British Steel and in putting those before us. At this stage, we still fully believe that the management and personnel of British Steel are capable of maintaining a viable BSC. We must wait, however, for the new chairman to take stock in the incredibly difficult situation and to put before us the alternatives. It is for that reason that, at this stage, we do not wish to fix any extension to the external financing limit.
The noble Lord, Lord Lee, then asked me whether the Government would sit down with the trade unions in consultation as to what to do in this terrible situation. I believe that this reflects the views of the previous Administration and of noble Lords opposite, that Ministers are good at running industries. We do not think that. We believe that it is vital to ensure that we have the best possible management we can get in charge of British Steel. But it is for them to enter into consultation with the trade unions on the alternatives before them, and I am quite sure that at the appropriate times Mr. MacGregor will do that.
In relation to the points of the noble Lord, Lord Rochester, I, at least, thank

1751
him for his continued support of the necessity for major restructuring. Regrettably, the degree and form of that restructuring clearly have to be looked at again, in that the plan that we have had is demonstratably not up to the present situation. The noble Lord then asked me a number of detailed questions about the pace of adjustment and the remedial measures. I made a Statement, as did my right honourable friend, last week on remedial measures, and I think it would be wrong to take up extra time of the House in going through each one of those. But I would point out to the noble Lord that my right honourable friend the Secretary of State for Employment did—I believe on Monday, but I will check and let him know—at considerable length go through the fact that the MSC would be spending more in real terms under a number of alleviation heads than ever before, which is in line with the Statement that I made on remedial measures. I think I must refer the noble Lord to that, rather than go through the detail.
I do not believe at this stage that the unemployment figures which he quoted, of up to 25 per cent. in these areas, will come about. It is extremely hard, as he well knows, to forecast situations which depend upon the number of other industries coming in and how quickly they come in. I do not believe that skill shortages will hold up any new growth of new industries in those areas.
Baroness GAITSKELL: My Lords, may I ask the noble Viscount a very short question? Can the Government produce one other argument about industries in distress than to increase unemployment? So far as I can judge, the only thing they seem able to do is to produce an industrial desert.
Viscount TRENCHARD: My Lords, the plain answer is that the whole of our policies are directed to improve the competitiveness and, ultimately, the profitability of British industry so that we get industrial recovery. We have, unfortunately, taken on on a road which was leading straight downhill to the industrial desert that the noble Baroness mentioned.
Lord DRUMALBYN: My Lords, is not the message that my noble friend has
1752
given us today simply that the steel industry is very gravely sick, it is being put into hospital and it has a new doctor—
Lord LEE of NEWTON: A mortuary!
Lord DRUMALBYN:—whose main task is to keep the industry alive and bring it back to health? That is surely the message that my noble friend has given us today, and we ought not to anticipate events by demands for massive injections of funds at this time. Obviously, he has to be given whatever is needed to keep the industry alive. Of course we have friends and allies with us in Europe in the European Communities. The other steel industries are very nearly equally affected throughout Europe. Will my noble friend confirm that the maximum use is being made of the assistance that is available? Lastly, dealing with the point that the noble Lord, Lord Rochester, raised, there is the other aspect of the matter. I think that he was referring to those who are already confronted, or are about to be confronted, by unemployment. What he was asking was: what arrangements are being made to train these people in advance of industry coming to replace the jobs that they have lost in steel?
Viscount TRENCHARD: My Lords, I like my noble friend's medical analogy. The new doctor's first task has to be to stem the haemorrhage. I can assure my noble friend that we are taking all available help from the ECSC and will continue to make sure that we do. I believe that my right honourable friend the Secretary of State for Employment has said that we are increasing our efforts in training, now.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that this grim Statement augurs a sad day for Britain? To me, it is as bad as autumn leaves on a coffin lid. Is the noble Lord aware that "MacGregorisation", and everything else does not matter? What I am really afraid of is that there is a hidden sequence, somewhere, to break down the industrial and military complex of Britain and move it over to central Europe. There is a feeling that investment is moving from the steel industry and the mining industry of Britain into Europe. I believe that we should have learned the lesson of the "Beechingisation" of our railways. Far

1753
from all this talk of a cold war and this rubbish about rearmament, we could not rearm a pigeon loft with the steel industry as it is today. Money should be spent upon it to protect Britain.
Lord DENHAM: My Lords, before my noble friend replies to that point, could I put it to the House that we are going a little bit wide? Questions are meant to be for elucidation.
Lord DAVIES of LEEK: Well, my Lords, the steel industry wants elucidation on its future.
Viscount TRENCHARD: My Lords, I have already said that this is a very serious announcement about a very serious situation. The reason that I find myself answering this question is because I want to do what little I can to reverse the decline of British industry and avoid it all going abroad—which it has been doing for a long while. It has been doing that because of the apparent inability of the party opposite to see that the way they—and, I have to say, previous Governments of my own party—have treated industry over the last decade has produced a situation in which our industry is very weak indeed, a situation in which reality has not been faced. It is therefore particularly difficult for my right honourable friend and the Government to bring in reality at this stage, and inevitably it causes very serious and distressing situations. I hope that the noble Lord does not for one moment doubt the sincerity of the Government and of all my colleagues in trying to ensure that British industry recovers and becomes really competitive.
Lord ROSS of MARNOCK: My Lords, surely we are not dealing with the question of the general and long-term restructuring of this industry. As I understand it, we are dealing with something which requires immediate action. The Government have said that they are not satisfied that the corporation have yet taken, with sufficient speed and determination, all the action open to them to reduce their cash requirement in 1980–81. So action has got to be taken in the next two to three months.
1754
The noble Viscount said that it is not for politicians to say how the industry should be run. But if they are satisfied that the corporation have not taken, with sufficient speed and determination, all the action open to them, they should clearly be able to tell the House what action they think should be taken. We are entitled to know exactly what are the implications. Is it a question of more unemployment? Is it just the laying off of men? If it is more unemployment on a long-term basis it means heightening that redundancy figure. So it is not that. It is more unemployment, probably on a short-term basis. It is probably holding back investment that is urgently needed. Why do not the Government come entirely clean with the industry? A Statement like this about cash not being available is going to create havoc in the minds of banks, suppliers and the people employed by suppliers. This is a very serious Statement. It is serious because the Government have not come clean and are leaving it all to MacGregor.
Viscount TRENCHARD: My Lords, once again may I say that the Government do not believe that they hold a magic wand? It is perfectly correct that we are not yet satisfied that in this very serious situation all steps possible have been taken. In particular, BSC's own targets for the improvement of their efficiency and competitiveness have just not been met. We certainly wish to hear from the new chairman, in whom we have great faith, as to the practicality of meeting those targets, and how soon.
There are parts of the business which may not be essential to the mainstream of British Steel but for which there may be a future outside the company. That affects the cash flow. There is the question of stocks and what should be done with a very high level of stocks of different kinds, upon which a man of Mr. MacGregor's enormous international experience must be allowed to have a proper view. Those, in short, are three main headings. There are, in a complicated industrial situation, all sorts of alternatives. We have appointed a new chairman who takes over next week. It would be gross political interference, from which the industry has suffered too much, for the Government then to tell him what we want him to do.
Lord WYNNE-JONES: My Lords, I wish to ask the noble Viscount a particular question about this problem of the steel industry. It is one which a vital to that part of the country in which I have been living. I am referring to the town of Consett. As I understand it, and I know the town fairly well, Consett is entirely dependent upon the steel industry. I understand also—perhaps the noble Viscount can tell us about this—that Consett has been told that the steel industry there is to be closed down entirely at the beginning of September. I understand further—and again perhaps the noble Viscount can confirm this—that Consett happens to be one of the areas of the British Steel Corporation which is productive and which has been producing a profit.
Viscount TRENCHARD: Question!
Lord WYNNE-JONES: I am asking a question. If the Chief Whip of the Government will forgive me, a noble Lord is entitled to ask a question in this House. The question I am asking is whether it is intended to continue with the closure of the whole of this steel complex in Consett, which lies in a part of the country where unemployment is running at the rate of over 11 per cent.
Viscount TRENCHARD: My Lords, my reason for rudely interrupting the noble Lord, Lord Wynne-Jones, was that only a few days ago I repeated a full Statement made in the other place on the future of Consett, Scunthorpe and the individual areas. I have nothing further to add to that Statement and to the remedial measures Statement that I made at that time in relation to Consett. I could repeat it all, but I do not think that it would be in the interests of the House if were to repeat Statements, and the answers that I made to questions on those Statements, over and over again.

BROADCASTING BILL
Brought from the Commons; read 1a, and to be printed.
LABORATORY ANIMALS PROTECTION BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

PIER AND HARBOUR ORDER (BRIGHTON WEST PIER) CONFIRMATION BILL
7.15 p.m.
Lord MOWBRAY and STOURTON: My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to confirm an order enabling the Brighton West Pier Society Limited to become the statutory undertakers for the West Pier.
The West Pier dates from 1865. It is thus one of the oldest piers in England and has been, perhaps, one of the most elegant; but in recent years, alas! it has fallen into disrepair, and it is now closed to the public. When its former owners went into liquidation, the pier vested in the Crown Estate Commissioners. The West Pier Society Limited hope and intend to take over the pier, with the object of restoring and operating it. To achieve these objects they need some of the statutory powers of the former under-
1806
takers, and have therefore promoted the order that is scheduled to this Bill.
The effect of the order is that, once the Crown Estate Commissioners have conveyed the pier to the West Pier Society Limited, that body—the Company, as they are called in the order—will take over the essential part of the former company's statutory powers and duties.
My Lords, it is a very considerable enterprise to be undertaken by a voluntary body. They are campaigning to gather the necessary funds and backing for their restoration plans. Their efforts and enthusiasm are quite crucial to the preservation of the pier. Nevertheless, the pier will only be conveyed to them when they have satisfied the Crown Estate Commissioners that their company has reached an adequately secure financial and statutory position. They will thus enter into their statutory rights and responsibilities only if they are in a position to discharge them properly. So, the actual transfer may not take place immediately. But the order and the Bill are essential to these rather complicated arrangements, which are themselves unavoidable if the Brighton West Pier Society Limited are to have any chance of saving the West Pier.
I hope that I have explained the scope of this Bill to your Lordships at sufficient length. My Lords, I commend the Bill to the House and I beg to move.
Moved, That the Bill be now read 2a—(Lord Mowbray and Stourton.)
7.19 p.m.
Lord ELWYN-JONES: My Lords, I hasten to say that we on this side of the House will support this Bill as a necessary step in what, I think, can only be described as the courageous effort by public-spirited people with a sense of our national heritage to save a valuable part of that heritage from demolition. The noble Lord has reminded the House that the pier was erected, in fact, between 1863 and 1866. My researches tell me that The Times of 1867 reported:
"panic among the promenaders on the pier when the structure shuddered and oscillated"—
I like that word—
"several times. Ladies fainted"—
as was their habit in those Victorian days—

1807
"as the crowd hurried to the pier entrance".
However, the pier stood firm and has stood firm for over a century. I think that it has been generally regarded as one of the finest piers in Great Britain and, therefore, something that it is essential to seek to save. It has provided pleasure to holiday makers and residents for over 100 years. Since it was built it has responded to social needs in an entertaining and an immensely decorative way, and was, and I think, is, a splendid example of what one might describe as "seaside oriental", with shapely structures and standard lamps in the embrace of music hall dragons—wonderful stuff!
It is very interesting that the concert hall on the pier was built in 1916, during the First World War, as a kind of morale booster when many of the wounded from the trenches were brought to Brighton to be healed. In the circumstances it was perhaps fitting that the pier should have been extensively used to make Joan Littlewood's brilliant film, "Oh what a lovely war"!
The sea end of the pier was closed in 1971 as being unsafe and the shore end was closed four years later. At one time demolition of the pier was being proposed and, indeed, planned, but happily that was prevented by an energetic "Save-the-Pier" campaign in Brighton. I have little doubt that not only do the majority of the people of Brighton want the pier saved, but a large number of the thousands of visitors who come to the town would want the same.
It is interesting that the Brighton Gazette conducted a poll on the question: "Do you want the West Pier to be saved, and would you be prepared to pay a penny rate for it?" Over 1000 people responded; over 70 per cent. of those said Yes, and only 6 per cent. said No. In this campaign the Brighton West Pier Society actively responded to that majority view of the community, with the support of the active Brighton Conservation Society. Therefore, in our view on this side of the House—and I understand that it is reflected on the other side of the House—every encouragement should be given to those who wish to save the West Pier. I am sure that the House, with its excellent track record in conservation matters, will take that view. Therefore,
1808
we hope that the result of this endeavour will be a success.
Incidentally, I hope that public interest in the matter will not fade in the sense of a willingness for some degree of commitment from public sources to help in the financial endeavour that lies ahead. But at any rate, as far as it goes, clearly this is a useful and necessary Bill to which we give our support.
7.23 p.m.
Lord MOWBRAY and STOURTON: My Lords, I am grateful to the noble and learned Lord, Lord Elwyn-Jones, for the way in which he has supported this Bill in his usual inimitable, light and witty style. "Seaside oriental" was not an expression that I had heard used about this particular pier, but on reflection I think that it is very apt, especially when one thinks that it might have been pupped from around the corner in the Pavilion.
I should like to mention, en passant, that the Brighton Town Council has very generously said that if the company is successful in its financial efforts to raise this money in a public spirited way—as the noble and learned Lord said—it, too, will contribute a considerable sum of money towards this fund.
I should be less than honest if I did not quickly pour cold water on the noble and learned Lord's, I think, only half-hearted hope that there might be public support from the Government. It would be misleading if I held out any prospect of that, however nice it might have been in better times. I wish the company luck in its endeavours and I beg to move that this Bill be now read a second time.
Lord ELWYN-JONES: My Lords, the hopeful indication that the local authority might find it appropriate to support the endeavour from its sources, at any rate is gratifying. But I hope that the Government will take a kindly view if it takes that course, and not come down upon the company on the basis of this allegedly being a wasteful extravagance. This is an important matter, and I gather from the assurance of the Minister that that is not the view the Government would take.
On Question, Bill read 2a and committed to a Committee on Unopposed Bills.
Lord LYELL: My Lords, I beg to move that the House do now adjourn during pleasure until 8.15 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.25 to 8.15 p.m.]

HOUSING BILL
Lord BELLWIN: My Lords, I beg to move that the House do again resolve itself into a Committee on the Bill.
Moved accordingly, and, on Question, Motion agreed to.
Lord HYLTON: I wonder whether that is in order? Very few noble Lords are on the Opposition Front Bench, let alone on the Liberal Front Bench.
Lord SANDYS: We are indeed in order in resolving ourselves into a Committee on the Bill as the Front Bench opposite is occupied.
Lord DIGBY Lord DIGBY had given notice of his intention to move Amendment No. 6:
Page 95, line 21, after ("and") insert ("where there are more than ten elderly persons' dwellings in one parish").
The noble Lord said: I am most grateful to the Minister for undertaking to reconsider this matter. I hope that he will consider the small rural villages in detail, and I shall not move this amendment.
8.17 p.m.
Lord HYLTON Lord HYLTON moved Amendment No. 7:
Page 95, line 23, at end insert—
("5. The dwelling-house is situated within a District Council Area and within a parish or ward where less than thirty dwellings are owned by the local authority.").
The noble Lord said: The purpose of Amendment No. 7 is to preserve a minimal rented sector, at least a few houses to let, particularly in villages and also in parts of towns where there are very few council houses anyway. I have been in correspondence with the Housing Centre Trust, a body which I think is quite well known as being non-political, objective, and disinterested, in housing matters. It has among its vice-presidents my noble friend
1810
Lord Brooke of Cumnor, together with Professors Donnison and Cullingworth, both of whom are by now extremely well known for the highly objective quality of their research into housing matters.
The Housing Centre Trust has written:
"We welcome the continuing provision for tenants to buy their council homes but deplore the compulsion put on housing departments to sell regardless of local circumstances. We feel that housing authorities should have been given the right to withhold consent to buy in circumstances where the sale would deplete the rented housing stock to a dangerously low level, or for other reasons where the authority's ability to meet its continuing housing obligations would be in jeopardy. There are many areas in the country where additional rented housing is still needed, but what local authority is going to be prepared to build for that need knowing that after a short time the dwellings may be bought?"
It went on to say:
"In spite of evidence of a crude surplus of dwellings over households much housing misery still exists, and we fear that Clause I will diminish the power which local authorities have had for 60 years to help the poorly paid and poorly housed".
I submit that there arc poorly paid and poorly housed people both in the country and in the towns.
As on the previous amendment, I made some inquiries of my local authority in East Somerset which has a population of over 85,000, which has incidentally risen by no less than 4·6 per cent. over the last five years. It has some 63 parishes, and in no fewer than 33 of those parishes there are fewer than 30 council houses. More than half the parishes have less than this minimal figure.
In East Hampshire, which is a district where the National Council of Social Service carried out a careful and rather elaborate study of housing, the population increased by no less than 44 per cent. between 1951 and 1978. There they were studying 36 parishes, and 12 still have fewer than 30 council houses in each. It is perhaps dangerous to argue from too small a sample, but I am quite sure that noble Lords throughout the Committee will be able to give instances from their own districts of where there are very few council houses in places which are most attractive for buying.
It is a matter of common knowledge that it is the smaller villages with populations of, say, under 1,000 where the planning constraints on new construction

1811
are the greatest. It is also true, I believe, that it is in these small villages that the lack of sewers and other public services is the greatest. Those factors arc very likely indeed to prevent the construction of new houses to replace those which will come to be sold. It is also a matter of fairly common knowledge that it is extremely difficult for either a local authority or a housing association to succeed in building within cost yardsticks in small villages and remote rural places.
As I just touched on the question of repurchase when we were discussing old people's housing, I wish to touch on it again but with rather more emphasis in relation to rural housing. I suggest that a house which is now valued and sold for, say, £10,000, within five or six years may easily be resold for £30,000 or £40,000. How is a local authority or housing association going to finance this enormous disparity in values? The amendment has been tabled because of a concern with community balance in the countryside. I do not think that can be achieved if we allow every single council house or housing association house in a very small pool to be sold off. I beg to move.
Baroness BIRK: There is not much for me to add to the careful explanation which the noble Lord, Lord Hylton, gave of the amendment, to which I attached my name. I see this as a way to stop the erosion of houses in rural areas, particularly where there are small communities and village life.
Lord BELLWIN: May I turn, first, to some of the points made by my noble friend. He referred to the observations of the Housing Centre Trust. I would only say that they can have their opinions and we can have ours. Perhaps I should remind my noble friend that there will be no cost yardsticks as soon as the present legislation alterations have gone through this House and the other place; the Government have changed project control completely. He talked about the need to replace those houses sold. We seem to have difficulty getting away from the generalities in this series of debates, and I suppose that is inevitable. I have said before and repeat that I do not accept the premise that you must replace every
1812
house that is sold. That just does not arise, although I suspect that we shall be back to talking of that again.
Lord PITT of HAMPSTEAD: Admittedly, you do not have to replace every house, but you will have to replace a certain number of them. Therefore the fewer houses there are in an area like the area about which the noble Lord, Lord Hylton, was speaking, the more difficulty there will be. The argument that you do not have to replace all the houses is not the argument. The argument is that if there are only a few houses and they are sold, then the replacement which will be necessary may be very difficult.
Lord BELLWIN: How many times do I have to repeat that just do not accept the argument at all? The fact that a tenant buys and continues to occupy the same house, only now as the owner instead of the tenant, makes not the slightest difference to the pool of houses.
Lord PITT of HAMPSTEAD: It certainly does.
Lord BELLWIN: It does not make the slightest difference. No doubt I shall say so 50 times and be contradicted, but I fully expect that and so be it.
Lord PITT of HAMPSTEAD: May I remind the noble Lord—
Lord MOWBRAY and STOURTON: With respect, this is Committee stage. The noble Lord, Lord Pitt of Hampstead, has every right to get up and speak when my noble friend has sat down. It is not customary in Committee to keep jumping up and interrupting.
Lord PITT of HAMPSTEAD: I accept that, of course.
Lord BELLWIN: My noble friend has proposed the exclusion from the right to buy of dwellings in a parish or ward within a district council's area where the authority owns less than 30 dwellings. These conditions will usually arise only in rural areas and to that extent they are already provided for under Clause 18 of the Bill. That clause allows conditions to be imposed in certain circumstances on the resale of dwellings which have been purchased under the right to buy. In

1813
national parks or areas designated as areas of outstanding natural beauty under the National Parks and Access to the Countryside Act 1949 or areas designated by the Secretary of State as rural areas for this purpose, a covenant may be included in the conveyance or grant of a lease to ensure, in effect, that the dwelling concerned may be resold only to a person with a genuine local interest. As an alternative, if the Secretary of State consents, a 10-year right of pre-emption at market value may be retained.
The Government's policy is that as many secure tenants as possible in the public sector should have the right to buy and that exceptions to that rule should be kept to an absolute minimum. It follows, therefore, that I do not agree that my noble friend's exclusion is an appropriate way of dealing with the problem. The figure of 30 dwellings in particular seems entirely arbitrary. I doubt that my noble friend could justify to the tenant of a dwelling his exclusion from the right to buy because the local authority owned, say, 29 houses in the parish, while a neighbour across a parish boundary who was a tenant of the same authority could buy a similar dwelling. Still harder would be the case of the third tenant who wanted to buy in a parish where the authority owned 32 houses to begin with.
Given the Government's commitment to a right to buy for as many tenants as possible in the public sector, the restrictions available under Clause 18 provide a better way of tackling the difficulties that my noble friend has raised, rather
than a further exclusion as he proposes, and I have to resist the amendment.
Lord SANDFORD: It may help the Committee to decide how to deal with the amendment if I say that the Association of District Councils, all 300 of them, who are the ones chiefly concerned with these rural areas, have had all their anxieties in this general area met by the provisions of Clause 18.
Lord MONSON: Would the noble Lord, Lord Bellwin, perhaps agree that if the amendment is not accepted, it will make life extremely difficult for farmers with employees living in tied cottages who take up employment outside agriculture, because there will be a smaller and smaller pool of local authority houses into which they can be moved, and I do not think Clause 18 adequately covers that position?
Lord BELLW1N: We have given consideration to the particular point that the noble Lord. Lord Monson, makes, and, so far as I am aware, it is felt that problems will not arise. I cannot accept the amendment, but I undertake to talk again to my ministerial colleagues in order to be entirely satisfied on the point.
8.30 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 75.

CONTENTS

Airedale, L.

Goronwy-Roberts, L.

Peart, L.

Aylestone, L.

Greenwood of Rossendale, L.

Pitt of Hampstead, L.

Balogh, L.

Hale, L.

Ross of Marnock, L.

Beaumont of Whitley, L. [Teller.]

Hatch of Lusby, L.

Sainsbury, L.

Hylton, L.

Sefton of Garston, L.

Beswick, L.

Irving of Dartford, L.

Stewart of Alvechurch, B.

Birk, B.

Jeger, B.

Stewart of Fulham, L.

Cudlipp, L.

Kilmarnock, L.

Stone, L.

David, B.

Kirkhill, L.

Strabolgi, L.

Donaldson of Kingsbridge, L.

Llewelyn-Davies of Hastoe, B.

Underhill, L,

Elwyn-Jones, L.

Lovell-Davis, L.

Wallace of Coslany, L. [Teller.]

Evans of Claughton, L.

McCarthy, L.

Whaddon, L.

Fisher of Rednal, B.

Monson, L.

Wigoder, L.

Glenamara, L.

Noel-Baker, L.

NOT-CONTENTS

Alexander of Tunis, E.

Belstead, L.

Craigavon, V.

Alport, L.

Carr of Hadley, L.

Cullen of Ashbourne, L.

Balerno, L.

Clitheroe, L.

De La Warr, E.

Balfour of Inchrye, L.

Cockfield, L.

Denham, L. [Teller.]

Bellwin, L.

Cork and Orrery, E.

Digby, L.

Drumalbyn, L.

Lyell, L.

Selkirk, E.

Dundee, E.

McFadzcan, L.

Skelmersdale, L.

Ellenborough, L.

Mackay of Clashfern,

Soames, L. (L. President.)

Elton, L.

Marley, L.

Strathclyde, L.

Faithfull, B.

Merrivale, L.

Strathcona and Mount Royal, L.

Ferrers, E.

Monk Bretton, L.

Sudeley, L.

Ferrier, L.

Mowbray and Stourton, L.

Swansea, L.

Gisborough, L.

Moyne, L.

Swinfen, L.

Giendevon, L.

Norfolk, D.

Tranmire, L.

Glenkinglas, L.

Northchurch, B.

Trefgarne, L.

Gowrie, E.

Nugent of Guildford,

Trenchard, V.

Gray, L.

Pender, L.

Trumpington, B.

Gridley, L.

Reigate, L.

Tweedsmuir, L.

Hives, L.

Remnant, L.

Vaux of Harrowden, L.

Holderness, L.

Rochdale, V.

Vickers, B.

Hornsby-Smith, B.

Romney, E.

Vivian, L.

Hylton-Foster, B.

Sandford, L.

Ward of Witley, V.

Killearn, L.

Sandys, L. [Teller.]

Wolverton, L.

Lindsey and Abingdon, E'

Savile, L.

Wynford, L.

Long, V.

Seebohm, L.

Yarborough, E.

Resolved in the negative, and amendment disagreed to accordingly.

8.39 p.m.
Lord HYLTON Lord HYLTON had given notice of his intention to move Amendment No. 8:
Page 95, line 23, at end insert—
("5. The dwelling-house is one which the local authority certifies to have been built for persons of pensionable age.")
The noble Lord said: I do not intend to speak to this amendment. Perhaps other noble Lords who are associated with it do.
[Amendment No. 8 not moved.]
Baroness BIRK Baroness BIRK moved Amendment No. 9:
Page 95, line 23, at end insert—
("5. The dwelling house is a listed building, or a part thereof, under section 54 of the Town and Country Planning Act 1971, or is located within a conservation area designated under section 277 of that Act.")
The noble Baroness said: I can explain quite quickly that, although this might appear to be a small amendment, it is I believe of some importance. It relates to a dwelling-house which is a listed building, or a part thereof, which the local authority or other public landlord would particularly want to keep in its care. Being a listed building the dwelling-house would be protected in regard to alterations or demolition, but there may be the odd occasion when the authority would want to keep it not just because it is a public asset, but also because it is part of our historic heritage.
The most important part of the amendment is that which relates to where the
1816
dwelling-house is within a conservation area. There would not be vast numbers involved, and therefore there would be no embarrassment to the local authorities. However, in such instances houses are sometimes part of a group. Here I am thinking of the Swindon Railway Village—which I visited when I was a Minister in the department—which is an absolutely delightful entity. If a house in such a group was sold, the whole character of the place could be lost. I think it would be very unfortunate for the area. Furthermore, where there is a grant—for example, for the Swindon Village and for many other houses or groups of houses in conservation areas the Historic Buildings Council gives what is known as a Section 10 grant under the Town and Country Planning (Amendment) Act 1972—there are then extra public funds put into the improvement, into the rehabilitation of these buildings, and I feel it is important that if it wants to—and this is, or course, discretionary—the local authority should be able to keep control.
May I give an instance of an industrial village just outside Bradford built in the 1870s. None of the houses there has been sold, and the whole character has been changed and partly destroyed. Some of the old mullion windows have been taken out and picture windows put in. I quite understand that some people may prefer picture windows, but for these historic places it is a very great pity. Again, there are other examples where, often, local authorities have assiduously, but also lovingly, put considerable public funds into houses. There are houses in conservation areas in Bath—this is apart from the listed houses—in York and in South

1817
London. The reason for the amendment is that the local authority should have this discretion, which, frankly, I think they are going to use very sparingly because they will not want to be put to too much extra expense themselves. I beg to move.
Lord EVANS of CLAUGHTON: I support very warmly the amendment moved by the noble Baroness, Lady Birk. As she says, it is going to affect a very small number of dwellings, but perhaps that small number will play a very important part in the heritage of this country. In my own particular experience—and I am sure other noble Lords will have had the same experience—in Birkenhead where I live we have the first park built by public subscription in the world. It was built by Sir William Paxton, and Central Park, New York, was based upon it. Sir William Paxton's plans included the building of a number of lodges, each of the lodges being of a different architectural design—there is a Norman lodge, there is an Italian lodge and so on. But they are part of the local authority's housing stock, and they are usually occupied by members of the local authority's staff working in the parks and gardens. But they are buildings of exceptional beauty and attraction, and are a very important integral part of what is still, I think, one of the most attractive parks in this country, but little known because it is in a little known part of the country.
One was horrified because very recently a new secondary school was built in a peculiarly unattractive modern style, and it was widely suggested inside and outside the council that the Italian lodge which was adjacent to it should be pulled down because it did not fit in with the architecture of the new building. That is a perfectly true story. It is like the American wondering why they built Conway Castle so near the railway. But it does happen; and when that kind of thing happens, and when this type of house could be sold and could get into the hands of people who probably do not have the concern for aesthetic values that the local authority would have and that conservationists would have, one is horrified at what might happen. The area I have referred to is in a conservation area; they are conserved buildings. It therefore seems to me very important that this kind of property should remain in the hands of the local authority,
1818
and I feel from my own personal experience that it would be a great mistake if this amendment were not carried.
Lord SANDFORD: I am as keen on conservation as anybody else, but I think this amendment is particularly unsuitable. It is quite wrong to deprive people of a personal right which is being conferred on council tenants generally up and down the country in order to achieve environmental objectives. Furthermore, it is quite unnecessary, because the protection of a group of cottages like the Swindon railway cottages can be achieved by the application of ordinary conservation legislation, and if that is not precise enough Article 4 can be invoked in order to prevent such things as mullion windows being taken out, and so on. That is a much more appropriate way of dealing with it. I hope the Committee will reject this amendment.
8.46 p.m.
Lord MOWBRAY and STOURTON: I am most grateful to my noble friend Lord Sandford for having poured a little dose of common sense on to this amendment because, although the sentiments expressed by the noble Baroness and the noble Lord, Lord Evans, are in themselves admirable, and are sentiments with which I totally concur, as my noble friend Lord Sandford has said it is really totally unnecessary to move this amendment to give effect to them, because this amendment would apply to any council dwelling that was part of a listed building or was in a conservation area. It would exclude the tenant of any such dwelling from the right to buy his home. As I have said, I share the anxiety of the noble Baroness to preserve the character of historic buildings of this kind —the Swindon railway village, Bradford or anywhere else you like to mention—whether or not they are in local authority ownership.
I repeat that the value of a building does not depend upon whether it is in local authority ownership or private ownership. A building is a valuable or beautiful architectural piece whoever owns it. I pay enormous tribute to the noble Baroness, because she has done more in this field than most people. When she was in the Government she was a byword for the work she did in this field, and I could not be more grateful to her for what she has

1819
done in the past. We know that her heart is completely in the right place. But having said that, I do not believe that the exclusion that she proposes is necessary, and I really cannot advise your Lordships that this amendment ought to be accepted.
We believe that as many tenants as possible should have the right to buy, and that that right should be subject to the minimum of restrictions. Anybody in a dwelling of a kind affected by this amendment who has been hoping to buy on the strength of that promise would have every right to feel aggrieved, I should have thought, if they were now to find themselves excluded. If a dwelling is in a designated conservation area or is a listed building under Section 54 of the Town and Country Planning Act 1971, anyone who wishes to alter it in a way which would affect its architectural or historic interest would require the local planning authority's consent under Section 277A of the Town and Country Planning Act 1971. The secondary school mentioned by the noble Lord, Lord Evans, would be caught under this; they would not be allowed to do it. If they go ahead and do the work without consent, they are not only guilty of an offence but could be required, under an enforcement notice, to put everything back as they found it. I ask your Lordships to take note of that.
This control is independent of the control which an authority is able to exercise over any dwellings of which it is the landlord. It is important to remember that it is the control which they rely on to protect properties that have never been in their ownership. I do not think that the noble Baroness and the noble Lord are suggesting that such buildings can be protected only in local authority ownership. Obviously, I do not wish to see spoilt the character of any dwelling of special interest, or any village or any area, but I do not think that, given the planning powers available, it is necessary on that account to keep the dwellings in public ownership or to deny the tenants the right to buy. Private ownership, as I repeat, does not affect the beauty or the architectural interest of a building. I hope I have said enough, but if your Lordships were to want more in the way of what penalties, powers and pains can
1820
be exacted, I can come back and give full details.
Baroness BIRK: I am grateful to the noble Lord for the nice things he said about my heart; but when he referred to the lack of commonsense in the amendment, he seemed to have doubts about my head. Nevertheless, I thank him very much. I wish I had as much confidence as he has concerning the way the penalties are invoked and what happens to listed buildings in conservation areas. Life is not as simple as that. In spite of these penalties, very often the building gets treated badly.
I am aiming at the local authorities having discretion. I do not expect the local authorities—it would be nonsense to do so—to keep all the listed buildings. When the noble Lord says that it does not matter, that when it is sold it is still there and still architecturally beautiful, he forgets that these are public assets and investments and that they have added qualities when compared to ordinary houses because they have special historical and architectural merit.
I do not accept the argument about one of a group going and that it does not matter, it can be kept in that way. With the cuts in manpower, it is going to be more difficult to catch up with people who act (shall I say?) delinquently in this respect; and the local authorities will not be able to do it. I am not going to delay the Committee any further. I should like to consider the noble Lord's reply, and perhaps we will put down something similar to this at Report stage. For the moment, I withdraw the amendment.
Amendment, by leave, withdrawn.
8.52 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 10:
Page 95, line 23, at end insert—
("5. The dwelling house is situated in a National Park, or an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty, or an area designated by Order of the Secretary of State as a rural area.")
The noble Baroness said: This is rather similar in approach to the amendment on the elderly that we discussed before the dinner break. This excludes properties

1821
in the rural areas from the right to buy. The Government have already conceded that there may be problems arising from sales in such areas where supplies of rented housing are small and property in due course may be sold at high prices to outsiders or to the disadvantage of local people on low incomes. This is how it came about that they agreed to the alteration to Clause 18. But, unlike the noble Lord, I do not feel that this is effective enough. Once again, it has the pre-emption arrangement which allows the local authority to buy back such accommodation at market value if it is placed on the market within ten years unless it is sold to someone with three years' local residence or employment.
I consider that these safeguards are inadequate. So far as the building is concerned, the problem from the financial and the local authority point of view is worse than the problem of the elderly that we discussed earlier. There it was a human and compassionate problem; here it is a question of where these properties in rural areas and in national parks probably will increase in value more rapidly and to a greater extent.
The safeguard that the Government have incorporated in Clause 18 is, I concede, a considerable improvement on the original Bill. Nevertheless, the preemption clause lasts for only ten years. Then the local authority has to pay the full market price for the property which it may have sold at the substantial discount plus, probably, the £100 option. The increase could be quite enormous. I cannot believe that there can be many authorities who will be in the financial position to be able to exercise their pre-emption right. Under the current Government restrictions, local authorities are not free to acquire property in other manner without special consent from the Secretary of State.
I think that the amendment takes the logic behind the Government's concession in Clause 18 to its conclusion by leaving the local authorities the discretion to decide whether or not to sell council houses in such areas. A number of Conservative-controlled local authorities have specifically sought for special discretion to ensure they are able to meet the needs in their areas by providing rented housing to those who wish to stay
1822
but cannot afford to become owner-occupiers.
On a previous amendment the noble Lord, Lord Monson, made a point relevant to this amendment. He made a point about the agricultural worker.
Now we have the Rent (Agriculture) Act—and it works well despite any forebodings in this House. It works well, because, together with the ADHACs and arrangements with the local authority, the local authorities find alternative accommodation for the person leaving the cottage. If the agricultural worker is necessary for the purpose of his work, he can be in what was formerly the tied cottage. The noble Lord, Lord Monson, was right. If the housing is not available, how will you put in people who may be concerned with farming, forestry and a whole range of rural activities? Without this extra safeguard, there must be a progressive transfer which will accelerate after the 10-year exemption period expires and accommodation in rural areas will become much sought after—and you cannot blame people for that if they can afford it—as an expensive second home.
The very definition of where they are means that they are probably in attractive surroundings. This will leave the local people, and particularly the sons and daughters of existing residents, with fewer and fewer opportunities to stay there; so that you are then not only eroding the housing stock but contributing to the deprivation of the rural areas themselves. These young people will move out and will leave the areas and maybe leave the countryside. Those council tenants who exercise the right to buy will be enabled (particularly after the 10-year period has expired) to make capital gains, because, again, their homes are a desirable asset in an attractive area. Whichever way one looks at it, the local community will lose out and many people will make a great deal of money out of this—and all at the community's expense.
Lord EVANS of CLAUGHTON: I support the amendment moved by the noble Baroness, Lady Birk. I have an amendment on the Marshalled List on similar lines. I think she expressed very well the problems and the difficulties. We must bear in mind the fact that in the kind of areas to which this amendment

1823
refers, the national parks and areas of outstanding natural beauty, and areas designated by order of the Secretary of State, to all intents and purposes all the private stock of housing has now been bought up (very often at exhorbitant prices) by second-house owners or by people retiring. One sees examples of this in the Lake District, in Scotland and Wales, in the Cotswolds and all over the country.
In the part of Wales where my family come from, a ruined cottage which would have changed hands for about £100 10 or 15 years ago merely as a stony site can now fetch prices of £5,000, £6,000 or £10,000 and can be rebuilt. That, of course, is a good thing. I am not suggesting that this is a bad thing; it is a good thing from the point of view of the appearance of the neighbourhood. But it is a bad thing in that anyone working in agriculture or forestry locally cannot afford to pay this kind of price because their level of wages is low, so that he or she must look to the local authority to get any accommodation at all. There is no hope of buying accommodation in the areas to which this amendment refers. Consequently, the local authority stock is all that is available to the low-paid agricultural or forestry worker. It is no use burking this issue. This is a real, genuine and very serious issue, and I would have thought it would have been an issue that would have attracted and given a lot of food for thought to many noble Lords on the other side because of their great personal experience of this.
I personally, although I am a Welshman, have no sympathy for the recent action of the burning of second homes, which we have read a lot about in the newspapers. Thank heavens it seems to have stopped at the moment. But, having no sympathy for it, one still understands the frustration that affects many Welsh families when they see their style of life, the style of their community, being destroyed because whole villages and areas are being taken over entirely by summer visitors. I know a little place called Llangranog, which perhaps the noble and learned Lord, Lord Elwyn-Jones, if he was here at the moment, would know. Twenty years ago, when I was a child, it had a busy school. There were 30 or 40 families with children. Now only four
1824
houses remain in private local ownership with tenants living there throughout the year. This is very depressing and distressing.
If we do not retain the stock which is available for rent—and there is no other stock available for rent except local authorities' stock—we are saying this is another nail in the coffin of rural life, of rural activity, of any real rural life of the old-fashioned traditional kind, with rural communities and rural interests. We might as well say that we write off all this kind of life in areas of special interest, of special outstanding natural beauty, or areas designated, which are attractive to visitors. It is as simple and as stark as that. If we do not pass this amendment or similar amendments that follow, we might as well say in regard to areas of natural beauty that we can forget any accommodation being available for the local, native population. Therefore, I support the amendment very warmly.
9.4 p.m.
Lord SANDFORD: The provision and the maintenance of housing for letting in the national parks and other similar areas is a matter of paramount importance. It fell to me to undertake a review of the national parks some seven or eight years ago, in the course of which we had 50 or 60 public meetings and this issue arose in every single one of them. I do not need any reminder of its importance or its significance, and long before this Bill was published, long before the manifesto was printed, I was at pains to remind my noble and honourable friends who are now in Government of the importance of dealing with this question. The manifesto clearly stated that special measures would be taken to ensure that the stock of private letting accommodation in national parks and elsewhere was safeguarded and taken care of. The special provisions that were finally selected are those now embodied in Clause 18. Once again the method was adopted by the noble Lord, Lord Greenwood, and the noble Baroness, Lady Denington, in respect of houses for the elderly that was adopted in this particular case; and I am convinced that it is a better method than the method which would be introduced if this amendment was accepted.
Clause 18 is quite a long clause and we shall come to it in due course, but it

1825
is superior in the way that it operates to that incorporated in this amendment. It is true, too, that although the Government gave it a great deal of thought before publishing the Bill, it has been possible, under pressure from the Association of District Councils, to improve it still further, and if it is helpful to the Committee I can say on behalf of that association that they are now satisfied with Clause 18 and the proposed way of dealing with this problem.
Viscount GAGE: As the noble Lord, Lord Evans of Claughton, will be moving an amendment on this subject later on, I presume he thinks that housing associations might provide accommodation, rented accommodation, in rural areas. And when he says that this is the only way, as he has just said, he would agree, perhaps—I refer to his own amendment—that they might serve that purpose.
Lord EVANS of CLAUGHTON: I entirely agree with the noble Viscount. In fact, there would be provision by private housing associations for this kind of accommodation, but in many areas housing associations do not operate. It is only the local authority that makes housing available.
Lord HATCH of LUSBY: This is not good enough. There is a basic difference between this amendment and those that have been put down to Clause 18, and indeed Clause 18 itself. This amendment, as I understand it, would preclude the right of the tenant in rural areas—I am confining this to rural areas—to purchase a house. It is not just the national parks; it is not just the areas of great natural beauty; it is our countryside—and our countryside includes our seaside. Just go around the coasts of this country and see the number of villages where the traditional community was based on fishing, where the fishermen had a council estate, which was particularly important when they retired, just as it is to agricultural workers, where old people could retire. It might be very small, but it was an essential element in cementing the community together.
Now, as the noble Lord, Lord Evans of Claughton, has pointed out, if this public asset is lost, if it is threatened indeed—and I am not at all satisfied, as
1826
Lord Sandford appears to be, with Clause 18 as it now stands, because I believe that it is possible, with skilful lawyers, to get round it—it is doing nothing more than postponing the central issue for 10 years, and then adding to the costs of the local council. But if, as the noble Lord, Lord Evans of Claughton, has pointed out, there is a threat to this public asset, it is a threat to the traditional communities of our country and it is a threat which is an economic threat to the economic activities of the rural communities. It is a social threat to the social cohesion of those communities; and, above all, it is a threat to our national heritage.
9.9 p.m.
Lord BELLWIN: To listen to the noble Lord, Lord Hatch, Armageddon is about to descend upon us if we do not accept this amendment, so I presume it will not come as any real surprise to him to learn that we will not accept the amendment. This is the first of several amendments that we shall be considering on the question of the sale of council houses in rural areas. Most of them relate to Clause 18.
One of the great difficulties in the Marshalled List which we have before us is that there are so many amendments which are so very close to each other, and, while we are trying to group them together in the interests of the business of the Committee, it is a problem. However, I am grateful to my noble friend Lord Sandford, who occupies a position of great responsibility in this matter and has been most anxious about several aspects of the Bill. As he says, there have been amendments made, and Clause 18 is a very relevant one and we shall be coming to it soon.
Clause 18 makes provision for conditions to be attached to the sale of dwellings in certain specified rural areas, but it does not exclude such dwellings from the right to buy. These conditions are safeguards which we have inserted because we recognise that difficulties may arise as a result of sales of council houses in such areas. They may be applied on dwelling houses situated in National Parks, areas of out-standing natural beauty and other rural areas designated as such by the Secretary of State.

1827
There are two alternatives: First, where the landlord executing the conveyance or grant is a local authority, county council or the Development Board for Rural Wales, it may require a covenant in the conveyance or grant making it a condition of resale that the purchaser should have lived or worked for the previous three years in a region within which the National Park, area of outstanding natural beauty or designated rural area wholly or partly falls. The Secretary of State has the power to designate these "catchment areas".
Secondly, if the landlord is a local authority or the Development Board for Rural Wales, it may, subject to the consent of the Secretary of State, replace the restriction on resale by catchment area with a pre-emption condition giving it the right to buy back at market value if the purchasing tenant sells within 10 years.
In providing these safeguards on sales in rural areas, we believe that we have struck a fair balance between the right that tenants, whether in the countryside or in towns, should have to buy their home, and the special, local circumstances with which some rural authorities have to deal. The amendment proposes to go further, however, and to exclude all dwellings in these areas from the right to buy.
I have explained that we consider that the right of tenants in the public sector to buy should genuinely be a right; that it should be as universal as possible; and that exemptions should be kept to an essential minimum. It would be wrong for the Government now to go back on the promises that we made to tenants, including tenants in rural areas, at the time of the last election. They would quite rightly consider that we had betrayed them if we did so. I do not think that "betraying" is too strong a word to use in such circumstances. Certainly it is nothing like as strong as some of the other words which have been used in connection with this amendment. I have no sympathy at all with the view which says that the right to buy is quite acceptable provided that no home is sold in the country or in the cities; and none which are lived in by old people or people with large families.
I believe such a situation means that there is no right to buy at all. Therefore, I cannot accept the total exclusion of all
1828
these dwellings from the right to buy. In our view, the resale conditions provided in Clause 18 lay down specific safeguards in these areas and illustrate our understanding that there are circumstances in these cases which merit special consideration. Beyond that, it clearly would not be right to go.
Lord HYLTON: My noble friend Lord Bellwin lays great reliance on Clause 18 as regards this amendment as he did in relation to my earlier amendment. In doing so, he is brushing aside entirely the fact that there are, and presumably will be for quite a long time, a large number of people in rural areas who are simply not in a financial position to buy. It is for that reason that I hope this amendment will be pressed.
Lord BELLWIN: If people are not in a financial position to buy they will not do so; but they have the right to buy, and that is what matters. That seems to be what is missing in the understanding throughout the whole of this discussion. The Government undertook to give the right to buy to those who can and that we would help them in any way we could. That we shall do. If they cannot buy—and it is not everybody who can or will want to —then that is up to them.
Baroness BIRK: I think the Minister really must accept that the fact that one does not agree with him all the time does not mean that one does not understand what is proposed. We understand perfectly well what the Government are doing but we do not happen to agree with certain aspects of it: in fact, with a lot of it. There are particular aspects which we are dealing with tonight: first, the elderly and now those living in rural areas. In view of what the Minister has said I do not know what attitude he is going to take on the amendments which have been attached to Clause 18, but from the sound of his voice and the vigour of his words I have no hope; therefore I intend to press this amendment.
9.14 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 79.

CONTENTS

Airedale, L.

Goronwy-Roberts, L.

Pitt of Hampstead, L.

Beaumont of Whitley, L. [Teller.]

Hale, L.

Rochester, Bp.

Hatch of Lusby, L.

Ross of Marnock, L.

Beswick, L.

Houghton of Sowerby, L.

Sainsbury, L.

Birk, B.

Hylton, L.

Sefton of Garston, L.

Craigavon, V.

Irving of Dartford, L.

Stewart of Alvechurch, B.

Cudlipp, L.

Jeger, B.

Stewart of Fulham, L.

David, B.

Kirkhill, L.

Stone, L.

Denington, B.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L. [Teller.]

Donaldson of Kingsbridge, L.

London, Bp.

Underhill, L.

Elwyn-Jones, L.

Lovell-Davis, L.

Wallace of Coslany, L.

Evans of Claughton, L.

Monson, L.

Whaddon, L.

Glenamara, L.

Peart, L.

Wigoder, L.

NOT-CONTENTS

Abinger, L.

Gowrie, E.

Reigate, L.

Alexander of Tunis, E.

Gray, L.

Remnant, L.

Alport, L.

Gridley, L.

Rochdale, V.

Balerno, L.

Henley, L.

Romney, E.

Bellwin, L.

Hives, L.

Sandford, L.

Belstead, L.

Holderness, L.

Sandys, L. [Teller.]

Carr of Hadley, L.

Hood, V.

Savile, L.

Chelwood, L.

Hornsby-Smith, B.

Selkirk, E.

Clitheroe, L.

Hylton-Foster, B.

Skelmersdale, L.

Cockfleld, L.

Killearn, L.

Strathclyde, L.

Cork and Orrery, E.

Kinnoull, E.

Strathcona and Mount Royal, L.

Crathorne, L.

Lindsey and Abingdon, E.

Sudeley, L.

Cullen of Ashbourne, L.

Long, V.

Swansea, L.

De La Warr, E.

Lyell, L.

Swinfen, L.

Denham, L. [Teller.]

McFadzean, L.

Tranmire, L.

Digby, L.

Mackay of Clashfern, L.

Trefgarne, L.

Drumalbyn, L.

Macleod of Borve, B.

Trenchard, V.

Dundee, E.

Marley, L.

Trumpington, B.

Ellenborough, L.

Merrivale, L.

Tweedsmuir, L.

Elton, L.

Monk Bretton, L.

Vaux of Harrowden, L.

Faithfull, B.

Mowbray and Stourton, L.

Vickers, B.

Ferrers, E.

Newall, L.

Vivian, L.

Ferrier, L.

Norfolk, D.

Ward of Witley, V.

Fortescue, E.

Northchurch, B.

Wolverton, L.

Gage, V.

Orkney, E.

Wynford, L.

Gisborough, L.

Pender, L.

Yarborough, E.

Glendevon, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.22 p.m.
Baroness DAVID Baroness DAVID moved Amendment No. 11:
Page 95, line 23, at end insert—
("5. The dwelling is situated in an area designated by order of the Secretary of State as a housing stress area, and the landlord is a local authority, the Greater London Council, or a Housing Association.").
The noble Baroness said: Before I speak on this amendment may I say that there was a mistake on the Marshalled List, and the name of the right reverend Prelate the Bishop of Southwark should have been related to this amendment and not to Amendment No. 9. The noble Lord, Lord Beliwin, has given warning that he is not looking favourably on this amendment, but that does not
1830
daunt me in the least. I think that it is an extremely important amendment, and its purpose is, of course, to exclude all properties in housing stress areas from the right to buy.
Many local authorities in such areas are apprehensive as to whether they will continue to be able to discharge their statutory housing obligations, housing the homeless and people from clearance areas, let alone ensure that waiting list applicants have a reasonable prospect of getting housed. These are duties which were imposed by a Conservative Government under the 1957 Housing Act. They will probably not be able to carry out their statutory duties, because cuts in housing programmes are very sharp and, at the same time, demand is rising. For example, in inner London 9,500 fewer lettings were made to waiting list applicants and the homeless in the 12 months ended

1831
March 1980, when compared with 1976. Yet over the same period the numbers on the waiting lists and of the homeless have both increased to record levels. Last year, there were 97,000 new applicants on the waiting list in London and around 14,000 homeless households were accepted by London councils. In both cases, these are the highest levels recorded to date.
No doubt it will not surprise noble Lords that the right reverend Prelate the Bishop of Southwark has his name attached to this amendment because his diocese includes Lambeth, which is one of the worst areas for housing stress. I imagine that a great many noble Lords will have read the survey of three urban areas—Lambeth, Liverpool and Birmingham—where the situation is quite appalling. The thought that houses could be sold in these areas where there are such terrible problems for the poor and the very poor very much dismays those of us on this side of the Committee.
The Government should be endeavouring to assist housing stress areas to be able more effectively to meet these needs. Instead, by imposing the right to buy irrespective of local circumstances, which inevitably will have an adverse impact on those whose only chance of obtaining a house is to rent one from a council, the Government are deliberately making it harder for local authorities to cope with the pressures. If a local authority sees its own problems as so great that it feels it must declare a housing stress area, its duty under the 1957 Act should be allowed to override the provisions of Clause 1. I beg to move.
Lord PITT of HAMPSTEAD: In order not to have to intervene when the Minister is speaking again, may I take the opportunity of explaining to him how I see the situation? He and I have obviously had different experiences. In London, a percentage of dwellings has always become available for reletting.
We are deciding several things. We are deciding that people are to have security of tenure. That is all right; they have always had it, even though in theory they did not have it. We are also deciding that they are to have the right to buy those dwellings and the right to sell them.
1832
This means that some of these relettings will no longer be available. What is more, after five years there is always the likelihood that many of these dwellings will no longer be available. It is in this setting that I cannot agree with the Minister that a house or a flat being tenanted means that it is not going to be available because, as things are, a percentage of them do become available. However, as things will be after the Bill becomes an Act, there is less likelihood of that percentage becoming available.
That brings me to the housing stress areas. In an area where many houses are available, the fact that there are a few houses not available will be of no serious consequence to the area, but in housing stress areas—that is, areas which are already difficult— the fact of losing even one reletting can be a serious consequence. It is in that setting that I want to support very strongly indeed this amendment.
Lord HYLTON: I want to support this amendment. I do so from the experience of having interviewed many hundreds of families who were living in housing stress areas and who themselves were in very great housing need. I do so for the reasons the noble Lord, Lord Pitt, has just brought to your Lordships' attention. My noble friend the Minister may reply that at present there is no statutory definition of a housing stress area. To that I would say, first of all, that the Secretary of State has only to designate one. If that were not enough, I am sure it would be possible to include a definition in one of the many schedules to the Bill. My noble friend may also say he prefers my Amendment No. 63, which tries to stiffen up Clause 18, but I would much prefer to see the particular houses excluded from the right to buy in the first place.
The Lord Bishop of LONDON: I rise to support this amendment because, like my right reverend brother Southwark, I know the immense pressures there are in areas such as Lambeth and similar areas in the London diocese, and I think it is essential that there should be some restraint upon the disposal of the housing stock in those areas. I agree with the noble Lord, Lord Hylton, that we need some much clearer definition of what is or is not a stress area, and this is very

1833
important. But where there are areas which are recognised as such, I am sure it is important that there should be restraint on the power to sell the housing stock. Therefore, for that reason I support this amendment.
Lord HYLTON: Perhaps I could be allowed to add, in support of the right reverend Prelate, that housing stress areas have been well known ever since the Milner-Holland Report in 1965, and the London Council for Social Service has done a tremendous amount of work defining them and suggesting where they should be.
Baroness DENINGTON: May I intervene briefly. As we all know, these are areas full of grave social problems. They are districts of mixed populations and they give councils in the areas enormous problems. My noble friend Lord Pitt made the point strongly about not being able to lose one single relet. I cannot over-emphasise that. One single relet in that area is absolutely invaluable. I hope the Minister will give this considerable thought. Whether we have got the amendment worded right I do not know, but it is a point that somehow ought to be recognised in the Bill. Obviously when in time—I hope not too long a time—these areas can be de-designated, then the situation will change; it will revert to normal and the houses can be sold. But what we are saying is that at the present time we cannot let the situation go as it is and it must be protected.
9.32 p.m.
The Duke of NORFOLK: Before the Minister replies, may I say that, with my family, I have built about 1,200 or 1,500 houses in Lancashire, and before I changed my name for the last time that is how my poor mother's family existed. We went bankrupt almost, but we survived in the end. The noble Lord, Lord Pitt, whom I know well, talked about losing one single relet, but the whole point is that we want to see many more houses built. Up in Lancashire we built all types of house. Unpleasant houses were closed down and people moved out to the new areas. I think this is a perfect example where the Government are trying to say to the nation, "Look, we want the nation to go forward, to buy houses, and
1834
for other houses to be built". In no sense are they saying, "We are trying to restrict the houses available to people in stress areas". The whole principle the Government are working on is that they want more houses built.
Why cannot the councils be expected to build more houses to relet, or private enterprise build more houses to relet? That is what I think should happen. It is the opposite of what the noble Lord, Lord Pitt, is saying, or the Opposition is saying. It is saying that we are going to expand and build more and more houses, not saying we have only this small number of houses and we have got to keep them. We want to build more houses. This is a type of ingrowing toenail opposition, not wanting to expand. I want to see it expand in a big way and build many more houses.
Lord PITT of HAMPSTEAD: I should like to say to the noble Duke that I hope later on, when we are discussing finance, I shall get his support.
9.35 p.m.
Lord BELLWIN: I am very grateful to my noble friend the Duke of Norfolk. The point which he has made is a fair point. Today we have kept well away from the financial implications and aspects and I do not want to get involved in them at this time of night unless so pressed. However, there is a very valid argument as regards this matter which I shall keep for another time.
I should like to quote briefly from the evidence which a very large authority submitted to the Select Committee which was referred to earlier, relating to its experience in the whole matter of housing in poor areas and the right-to-buy issue. It said:
"Increasingly councils are experiencing difficulty with estates which consist of pre-war unimproved property and some of these dwellings are increasingly difficult to let. It has been argued that the sheer size of such estates induces apathy and disinterest among the residents and that this gives rise to social abuses such as vandalism. The policy of selling houses in these areas will, in our view, influence the social atmosphere in these areas, and the introduction of families with an interest in the equity of the dwellings in which they live is likely to have beneficial effects on the social climate of the area in question".
I said earlier when we were talking about housing action areas, and sales there, that

1835
if the areas to which we are referring really are among the worst—and presumably if they are designated as housing stress areas they are—and if the suppositions that we hear from noble Lords opposite and from my noble friend Lord Hylton are correct, nobody will want to buy those houses. We are always being asked, "Who will buy the poorer houses?" The same argument applies to this matter as it did to housing action areas, and I repeat it again now. My noble friend Lord Hylton said that maybe I preferred his Amendment No. 63. I am sure that he will not be surprised if I say to him that I do not know whether I shall prefer it or not, but I doubt whether I shall be able to support it, although I shall listen with much interest to what he has to say about it.
One must always have great respect for the views of the right reverend Prelate and I do, indeed. But when he talks of his concern about the "disposal of the housing stock", I must come back to the basic argument that I have made over and over again today and which, it seems, I am fated to make over and over again on other days. Frankly, we do not consider that we are disposing of the housing stock, if we sell to people who already live there and who will have lived there for at least three years—indeed, many will have lived there for many years longer than that. The noble Baroness, Lady Denington, said that these stress areas give councils enormous problems. She is absolutely right. They do, indeed, give councils enormous problems and that is why, when we have in those areas a number of owner-occupiers, they will do what the people whose evidence I quoted said—they will upgrade them. I can tell the noble Baroness that from my own experience, and I can take her to estates where it has actually happened and she would be as delighted as I am to see how it is helping to upgrade those estates.
Many of the points which we are now raising run through everything that we have spoken about—every amendment and everything we spoke about earlier. I suppose that that is inevitable. But I must say yet again that the Government simply do not accept the arguments underlying the view that there should be widespread exclusions from the right to buy. It follows that no blanket exclu-
1836
sion from the right to buy of the type being proposed by the noble Baroness, Lady David, can be acceptable to the Government. The power that the amendment would give the Secretary of State would be very broad. For example, it does not say what he is to regard as evidence of "housing stress" when making an order. If agreed, this amendment could provide a rapid means of effectively repealing the right to buy in large parts of the country in the event that a Government opposed to it in principle should come to power. I do not know whether that is what the noble Baroness intends, but for the reasons given I should have to resist the amendment.
Lord STEWART of FULHAM: I am sorry that the noble Lord does not feel that he can accept the amendment. I think he was a little too pleased with his ingenuity in trying to convict us on this side of the Committee of an inconsistency, so much so that he did not pay attention to the real nature of the argument. Let me spell it out. I believe that in general it will be the more attractive houses which are bought. Both common sense and experience suggest that. But one should notice that "more attractive" can sometimes be a subjective judgment.
When I was a member of another place I had constituents who came to me with housing problems; some because they hoped one day to become housing tenants, and some because they were in not very attractive council dwellings and wanted transfers. Many of them wanted to be on the ground floor, particularly as they advanced in years; and many wanted a place where there was some garden. Even in a housing stress area you will find some dwellings that possess these attractions. It will be those dwellings which, for one reason or another, are more attractive which are most likely to be sold. But that is not inconsistent with saying that if you can buy houses in housing stress areas, some of those houses will be bought. What happens to such a house? It is true that the house is not removed from stock in the sense that it disappears, but it ceases to be available for those people who want council accommodation and who want to rent it because they cannot afford to buy.
I think that the Government have drunk the heavy wine of their own

1837
manifesto so often, saying, "We are going to give the right to buy; we are starting a great social revolution", that they have completely forgotten the very large number of tenants for whom buying is not an available option. We are concerned that their situation will he made progressively worse. That will be particularly true of those who already have the misfortune to live in a housing stress area.
The noble Duke, the Duke of Norfolk, comforted us with the prospect that this would be all right because more houses would be built. In coming to the Government's aid with that argument he was, if I may say so, rather in the position of someone who goes into the witness box and swears an alibi for his friend, only to find that his friend does not have the nerve to go into the box himself and support it. When we come to argue subsidies with the Minister I doubt whether we shall get very much comfort about the increased encouragement which the Government will give to the building of more houses.
I ventured to say on Second Reading that we had to judge the whole of this Bill in the light of the fact that there has been an alarming fall in starts this year compared with last year, and no sign that the trend will he reversed. Therefore I am afraid that the comfort which the noble Duke offers us is, alas!, not on the menu at the present time. So I do not think that the noble Lord, Lord Bellwin, has really answered the questions at issue in this amendment.
The Duke of NORFOLK: May I be allowed to reply? I should like to say, most sincerely that what I have said is on the menu. I believe that if there is to be no extra housing built by the county councils, or whoever it may be, houses can be built by free enterprise. It may surprise many noble Lords to know that I am experienced in house building in the city of Bolton in Lancashire, where we are building houses of all types and we make them pay. That is what we are talking about: more and more houses to be built by every means. I think that what I am saying is very much on the menu.
Lord STEWART of FULHAM: I trust that the noble Duke is right, but the evidence is not yet available.
Baroness DENINGTON: I know that the Minister truly believes that in these stress areas houses will be sold and then the area will be lifted up. Quite frankly, if I believed that, I should not be supporting this amendment. I live on the borders of Brixton and I know the problems there; it is a terrible area. I really fear that these houses will be sold by those who are now there in order to escape, which they will then do, and good luck to them; but the persons who buy them will buy so to exploit them by renting them out, and I do not like the picture.
Lord BELLWIN: I really have much respect for what the noble Baroness says, and I can only say from the experience that I have had that it has not happened that way. Time will tell when far greater number are sold. As to the points that the noble Lord, Lord Stewart of Fulham, referred to on the financial aspects and the adverse effects he said they would have, frankly I just do not take his points at all. If anything is conducive to helping the situation it is the policy of selling, because the local authorities will be able to retain 50 per cent. of the capital receipts, and they will be able to apply that 50 per cent. and that extra money to their existing HIPs allocation which they will receive. With that they can do whatever they like. They can build more houses; better repair their existing stock—they can do what they like. If that is not a positive contribution towards enabling them either to build or to do whatever else they want to do, I do not know what is. However, no doubt we shall come to that in more detail when we come to the financial implications.
Baroness DAVID: Certainly I am not going to go into the financial aspects at this time. We were aware that there might be criticisms about the amendment, but the Secretary of State has taken so many powers to himself in this Bill that I think just to be able to define "housing stress area" will not exercise him too far. We are not at all convinced by what the Minister has said. I am grateful for the support we have had from around the Committee, and we shall press this amendment.
9.47 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to?
Their Lordships divided: Contents, 33; Not-Contents, 81.

CONTENTS

Airedale, L.

Houghton of Sowerby, L.

Pitt of Hampstead, L.

Beswick, L.

Hylton, L.

Rochester, Bp.

Birk, B.

Irving of Dartford, L.

Ross of Marnock, L.

Cudlipp, L.

Jeger, B.

Sainsbury, L.

David, B.

Kirkhill, L.

Sefton of Garston, L.

Denington, B.

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

Stewart of Alvechurch, B.

Donaldson of Kingsbridge, L.

Stewart of Fulham, L.

Elwyn-Jones, L.

London, Bp.

Stone, L.

Evans of Claughton, L.

Lovell-Davis, L.

Strabolgi, L. [Teller.]

Goronwy-Roberts, L.

Monson, L.

Underhill, L.

Hale, L.

Peart, L.

Wigoder, L.

Hatch of Lusby, L.

NOT-CONTENTS

Abinger, L.

Gowrie, E.

Rochdale, V.

Alexander of Tunis, E.

Gray, L.

Romney, E.

Alport, L.

Gridley, L.

Salisbury, M.

Balerno, L.

Henley, L.

Sandford, L.

Bellwin, L.

Hives, L.

Sandys, L. [Teller.]

Belstead, L.

Holderness, L.

Savile, L.

Carr of Hadley, L.

Hood, V.

Selkirk, E.

Chelwood, L.

Hornsby-Smith, B.

Sharples, B.

Clitheroe, L.

Hylton-Foster, B.

Skelmersdale, L.

Cockfield, L.

Kinnoull, E.

Strathclyde, L.

Cork and Orrery, E.

Lindsey and Abingdon, E.

Strathcona and Mount Royal, L.

Craigavon, V.

Long, V.

Sudeley, L.

Craigmyle, L.

Lyell, L.

Swansea, L.

Crathorne, L.

McFadzean, L.

Swinfen, L.

Cullen of Ashbourne, L.

Mackay of Clashfern, L.

Tranmire, L.

De La Warr, E.

Macleod of Borve, B.

Trefgarne, L.

Denham, L. [Teller.]

Marley, L.

Trenchard, V.

Digby, L.

Merrivale, L.

Trumpington, B.

Dundee, E.

Monk Bretton, L.

Tweedsmuir, L.

Ellenborough, L.

Mowbray and Stourton, L.

Vaux of Harrowden, L.

Elton, L.

Moyne, L.

Vickers, B.

Faithfull, B.

Newall, L.

Vivian, L.

Ferrers, E.

Norfolk, D.

Ward of Witley, V.

Ferrier, L.

Northchurch, B.

Westbury, L.

Fortescue, E.

Orkney, E.

Wolverton, L.

Gisborough, L.

Pender, L.

Wynford, L.

Glendevon, L.

Reigate, L.

Yarborough, E.

Resolved in the negative, and amendment disagreed to accordingly.
9.55 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 12:
Page 95, line 29, after ("pending") insert ("or a receiving order is in force").
The noble Lord said: With the permission of the Committee, I shall speak at the same time to Amendment No. 13. These are minor technical amendments which I hope will not detain your Lordships long. Paragraph 2 of Part II of Schedule 1 prevents a person who is bankrupt, or who has a bankruptcy petition outstanding against him, or who has made a composition or arrangement with his creditors, from exercising the right to buy. The unwisdom of giving someone whose
1840
finances were in such a state the right to buy his home and the right to a mortgage is self-evident.
There is one circumstance which is not covered by the paragraph as it stands. There is a gap between the making of a receiving order under Section 5(2) of the Bankruptcy Act 1914 and the adjudication of bankruptcy under Section 18(1) of the same Act. During this gap, which in some cases can be quite long, a bankruptcy petition is no longer outstanding against the person concerned, but he has not yet actually been made bankrupt. Someone who was betwixt and between in this way would not, as the paragraph is drafted, be prevented from exercising his right to buy. The first of this pair of amendments closes this gap by extending the prohibition in the paragraph to cases where a receiving order is in force.
The second of the pair affects the person who is not bankrupt but has made a composition or agreement with his creditors. He, too, is prevented by Paragraph 2 from exercising the right to buy, as it is clearly sensible that he should be. The Law Society has pointed out to us, however, that the effect of the prohibition as drafted may be wider that we would wish. It has suggested that the paragraph as it stands could prevent someone who had made a composition or arrangement with his creditors from exercising the right to buy even after the fulfilment of the terms of his composition or arrangement. The amendment therefore makes it clear that the prohibition is not to apply once those terms have been fulfilled.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 13:
Page 95, line 32, at end insert ("the terms of which remain to be fulfilled").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
10 p.m.
On Question, Whether Schedule 1, as amended, shall be a schedule to the Bill?
Lord HYLTON: I should like to ask my noble friend the Minister a question of which I have given him notice. With regard to group schemes of dwellings for the elderly, I am anxious to discover whether both Category 1 and Category 2 schemes are exempt from the right to buy. I should further like to ask my noble friend whether he can define what is meant by the term "social service or special facilities" in line 21 on page 95 of the Bill?
Lord BELLWIN: First, I must confess that I have not seen the notice that my noble friend has sent to me. I do not know exactly what the Bill proposes should be the definition of "social service". Of course I know my own understanding of the term. It covers a very broad field. Anyone who has been involved in local government work will know what is meant by "social service".
1842
However, to give an off-the-cuff definition as to what the term means in this instance would perhaps not be helpful, but I shall certainly write to my noble friend on this.
Would my noble friend care to repeat his other question?
Lord HYLTON: It was in regard to Category 1 and Category 2.
Lord BELLWIN: Whether Category 1 or Category 2 old people's dwellings are covered by this definition will depend on the circumstances of the individual case. There will virtually always be a clear understanding straight away as to whether or not the first two criteria—the existence of a group of dwellings, and the letting practice of the landlord—are met. We decided as a matter of conscious policy that it was better to express the third criterion—a social service or special facilities—in general terms, rather than to spell it out in the legislation. This provides a flexibility that would be needed if each case is to be treated on its own particular merits.
However, as examples of the kind of thing that was in our minds when Paragraph 4 of Schedule 1 was being drawn up, perhaps it would help if I cite residents' wardens, day centres, common catering facilities, clinics, or other medical facilities. My noble friend may feel, perhaps, that those examples are sufficient for him on this point.
Lord SEFTON of GARSTON: I apologise to the Committee for not intimating before, either by way of an amendment or otherwise, that I wished to speak, but I should like to put something to the noble Lord, Lord Bellwin, in relation to the way in which this Bill is proceeding in your Lordships' Committee now, as compared with the way the Social Services Bill and other Bills have in fact been dealt with by your Lordships in Committee. Any moment now somebody from the Opposition Front Bench will rise and ask, "Will the Government admit for once, just one small time, that some of the things that have been said about stress areas and the weaknesses of this Bill are appreciated by the Government; and will the Government, just once, give way to the arguments from this side?".
I believe that what is happening on this Bill is a reflection of what happened

1843
in the other place, and to some extent it is a very regrettable state of affairs. I do not think that anyone on the Opposition Benches here would seek to undermine the authority of a Government to govern; and if that Government believe in the principle that people should be given the opportunity to buy, then that is right and we should accept it. But I think we also have a duty and a privilege—for privilege it is—to safeguard members of the community other than those to whom the Government have given this pledge in an election manifesto. I refer to the ones in stress areas and to the councillors—and Lord Bellwin, having had experience of them, knows some of the difficulties that they have—who look after their interests.
It surely is not all black or all white. Surely the issue is not: does everybody have the right to buy, or does nobody have the right to buy? The Labour Party has never said that no-one should buy council houses—and I am glad to see that the noble Lord agrees with me, sustaining the compliment, I suppose, which he paid me this afternoon in describing me as a friend of his, although I must say that that friendship has been strained a little. I believe that there are points to be made on both sides, and that we have not yet explored the possibility of a compromise on the issue of whether or not there should be restrictions in certain areas of the country on the right of people to buy, and therefore take out of the public sector and place in the private sector, houses which were built to let.
I should like to ask the Minister: would he be prepared to say that he will go away from this Chamber and have consultations, either with the local authorities in which stress areas are sited or with the local authority associations who are responsible for the housing authorities, in order to try to achieve a formula which would take into account the factors which determine whether housing should be sold or not? Those factors are the length of the waiting list, the number of people on the waiting list and the ability of the local authority concerned to undertake a programme. If the noble Lord could find a formula by which the Government could then say to the particular local authority containing the stress area concerned, "This is the
1844
number of houses "or" This is the percentage of houses which should be retained in the letting section, and no houses should be sold above that number", that would leave the Government perfectly free finally to decide what should be the number in each area.
It would also do one other thing. It would allow the local authority concerned really to believe that the central Government are going into this with a sense of partnership. I believe that if this Bill goes the way the other Bills went, the damage done to the relationship between the local authorities and central Government will be so bad that it will take a long time to recover from it and to make any sense of housing policy.
Lord SANDFORD: May I, in reply, say a word, as it were, on behalf of the Association of District Councils? The noble Lord opposite gives the impression that the Government have published and produced this Bill and dealt with the amendments without consulting the bodies that the noble Lord now suggests should be consulted. The truth is that they and the AMA have been in constant consultation with my right honourable friend and my honourable friends in the Department of the Environment throughout this Bill, and in this particular regard—the amendment dealing with stress areas—they are content with the Bill as it stands.
Lord HYLTON: I am grateful to my noble friend Lord Bellwin for saying that he will write to me. I am sorry that he did not receive advance notice of my question, since it was not only telephoned but sent in writing; and his secretary confirmed to me this morning that it had been received. May I add that unless much greater clarity can be got into the phrases "social services" and "special facilities" there will be long and considerable arguments about them when the Bill becomes law; because the local authorities and housing associations who do not wish to sell their own people's units will try every expedient not to do so.
Lord HATCH of LUSBY: Before the Minister replies, may I ask the noble Lord, Lord Sandford, to elucidate a point which has been puzzling me all afternoon? He is constantly saying that he is speaking on behalf of this association.

1845
On behalf of how many members? Does it take a vote? What does he mean by "speaking on behalf" of the association which has had consultations with the Government and has agreed to these amendments or clauses of the Bill? Is this a majority view or is he speaking for the entire association?
Lord SANDFORD: The association has a council elected from their total membership and a housing committee within that council made up of members of it. The position at the moment in respect of this Bill is that they have three amendments which they would still like to have moved and incorporated into the Bill in some respects. The first has already been dealt with. It was the enlargement of the special measures made in respect of the elderly. Their amendment corresponds closely to that which has been moved by the noble Baroness, Lady Denington, and to the amendment to Clause 54 which was moved—not on behalf of the AMA but corresponding to the one which the AMA supported—by the noble Lord, Lord Evans of Claughton. Those are the two amendments which my noble friend Lord Bellwin has undertaken to take away and to reconsider. There is a further amendment to which we shall come when we get to Clause 77, where they would like to sec the Bill improved, and two more amendments on Clauses 95 and 140. There is another one to Schedule 3. In other respects, they are satisfied with the Bill as it stands.
Baroness BIRK: I am querying whether this is in order. It seems to me to be a question-and-answer session between two noble Lords. I should have thought that any questions should be addressed to the Minister. We are now on Schedule 3. While it is interesting, we are not here to discuss the activities of the ADC.
Lord MOWBRAY and STOURTON: I should like strongly to support the noble Baroness. We are dealing with the motion whether Schedule 1 shall stand part of the Bill. All the speeches are totally irrelevant.
Lord SEFTON of GARSTON: Is the noble Lord saying that my speech was totally irrelevant? I am quite sure that
1846
the Companion to Standing Orders would have allowed me to move an amendment without even taking the courtesy of submitting it in writing. If somebody will read the Companion to Standing Orders they will find that that is true. I did not want to do that; and I do not want to delay the Committee. The specific question that I put to the Minister was this: is he prepared to give an assurance that he will take away and either discuss with the local authorities who have stress areas or with the Local Authorities Association the possibility of arriving at a formula which will meet all the difficulties that one has foreseen. It might not be successful, but at least it would demonstrate to local authorities that central Government were trying to meet them on their own wavelength, and the pertinence of the question by the noble Lord, Lord Hatch, was simply this: is it not true that the composition of the Local Authorities Association has changed so drastically recently that we shall probably get a different answer from them this time from what the noble Lord, Lord Sandford, got.
Lord BELLWIN: If anyone can join in this debate, I might be able to say something to respond. The noble Lord, Lord Sefton, has indeed shown a rather tenuous hold on the friendship to which I referred earlier. If it is really only that sort of friendship, it could not have been much in the first place—but I think he was talking with his tongue slightly in his cheek.
He raises a very fair point which touches on the kernel of the whole debate today and what it is going to be about on the other days. There is an enormous gulf of difference between us and what we believe about this whole matter. It is quite wrong for him to say—and I think he really knows this—that there has not been consultation. My noble friend Lord Sandford is absolutely right; there has been enormous consultation with those concerned about this Bill; there always is. The fact that one does not reach agreement is one of those things, although one tries to. The people who represent the associations I know are people with vast experience. One has to listen to what they say. Many of the things that are in the Bill or which appear in the form of amendments are there as a result of what they have said, or may have come from the original discussions before the Bill

1847
was put through. However, at the end of the day it comes down to a whole gulf of difference between us, and if it seems, as I have said already earlier, that we seem to be trotting out the same arguments, we on this side making the same restatements of philosophies and attitudes and the people on the Opposition side taking up individual aspects by way of amendments against those basic principles, that, I understand is what this Committee is supposed to be doing. It is supposed to be taking the Bill line by line, Part by Part, having a shot on the one side to try to change it, on our side to listen to discover whether it can be bettered, or whether we can think about it again where possible. You may think not too much of what has happened, but even so we listen. As I told my noble friend, Lord Hylton, we do listen most carefully and pay attention to what is said. Whether we change the Bill or not depends on how far we edge into the basic arguments that divide us.
Schedule 1, as amended, agreed to.
10.14 p.m.
Clause 3 [Meaning of "house", "flat", "dwelling-house" and "relevant time"]:
On Question, Whether Clause 3 shall stand part of the Bill?
The Earl of KINNOULL: I have one probing point to put to my noble friend, of which I am sorry not to have given him warning. It is a very simple point. Clause 3 gives an interpretation of the meaning of "dwelling-house"—what is a dwelling-house, what may be a dwelling-house, what is a flat—and then, if one looks at subsection (4), it reads:
"There shall be treated as included in the dwelling-house any land used for the purpose of a dwelling-house which the landlord and the tenant agree to include".
My simple question is, what happens if they do not agree? I am told this is a possibility, not only an obvious possibility but also a managerial possibility. Obviously, you can get car parking spaces, you can get drying areas, you can get garden disputes, and so on. I am sure my noble friend either has in this Bill or means to have later on a regulation to introduce some form of arbitration by
1848
which the tenant or the landlord can deal with it.
Lord BELLWIN: As my noble friend says, I did not know of his intention to raise this point and, as with the point made by my noble friend Lord Hylton, clearly I should like to come back to him on it. It is really not hard to give a view on a matter of this kind, to get an interpretation, but that is not what my noble friend wants. He wants an authoritative and considered response, and that I gladly undertake to give him. Indeed, I will make it available also to noble Lords opposite.
Clause 3 agreed to.
Clause 4 [Joint tenants and members of family occupying dwellinghouse otherwise than as joint tenants]:
On Question, Whether Clause 4 shall stand part of the Bill?
10.15 p.m.
The Earl of KINNOULL: I am afraid I have another point on Clause 4, although not a very big point. My noble friend will have seen that last Friday there was a change in the highest court of appeal on the rights of ownership of homes where the wife who is not necessarily an owner, a joint owner of the house, now has a much greater right to the ownership. It is a very important point. In a way it transpires on this clause because what we have here is the right of the tenant or the joint tenant to serve a notice on the council. The point I should like to raise is under Clause 4(2). The tenant has the right to serve the notice and he may elect three of his family also to benefit from this clause. Suppose he does not elect his wife. In the clause, it refers to "his only or principal home" and later on refers to "his only or principal house". I would have thought it should have said: "his or her principal home or house". I should like some clarification. If my noble friend cannot give that now, perhaps he will let me know later regarding the automatic right of the wife.
Lord BELLWIN: I am grateful for the interesting point. I had noticed the case to which my noble friend referred, with much interest, as I am sure did many

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Members of the Committee. With the other response that I make to him I will give my noble friend that information.
Clause 4 agreed to.
Clause 5 agreed to.
Clause 6 [Purchase price]:
10.17 p.m.
Lord HYLTON Lord HYLTON moved Amendment No. 14:
Page 5, line 14, after ("vendor") insert ("to a willing purchaser").
The noble Lord said: This amendment is an attempt to ensure that the full open market value is calculated as the starting point when the right to buy is being exercised. It seems to me that in order to have this open market value one needs to have not only a willing vendor but also a willing purchaser. If there is no willing purchaser, the market is flat and the vendor—the landlord—may have to accept a derisory price. I cannot believe that is right. I hope that my noble friend can give me some reassurance on this point. I beg to move.
Lord MOWBRAY and STOURTON: I have listened carefully to what my noble friend Lord Hylton has said in moving his amendment. I am pleased to tell him that it is unnecessary, because the Bill already ensures that when a dwelling is valued under Clause 6, the valuation is made on the assumption that there is a willing purchaser. This is implicit in the phrase, "on the open market" in subsection (2). I am sure that some buyers on the open market have had their arms ruthlessly twisted by wives and families, but they will never be anything but willing purchasers in the sense intended by the noble Lord.
The valuation of a dwelling for the purpose of the right to buy, with one or two minor refinements, is the price which it would fetch on the assumptions given in the Bill if it were sold in a perfectly ordinary way on the ordinary housing market. In such a sale, there would be a willing vendor; that is why a willing vendor is assumed in subsection (2) of Clause 6. That in itself is not enough, however: a willing vendor might sell privately at a lower price than he might
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otherwise have got. He may do this because he wants to sell in a hurry, for example, or as a favour to a friend or a member of his family. Hence the necessity for the complementary reference in subsection (2) to the open market. In the light of what I have said, I hope that any noble friend will be able to withdraw his amendment.
Lord HYLTON: Yes, I am delighted to ask leave to withdraw.
Amendment, by leave, withdrawn.
10.20 p.m.
Lord HYLTON Lord HYLTON moved Amendment No. 15:
Page 5, line 29, leave out from ("for") to end of line 30 and insert ("a period to be determined by him; such period shall not be less than 21 years except with the agreement of the purchaser;").
The noble Lord said: On the Second Reading of this Bill, I pointed out that flats can only be sold on 125 year leases. I asked what would happen if the useful life of the flats was not as long as 125 years. I do not think there has been any very clear answer on that point. I also had in mind that it would be very much to the advantage of intending purchasers if they could purchase a shorter lease because they could expect to pay a lower price, as they can at the moment in cases of leases of variable length in the private sector and on the open market.
There is a further point to be made in support of this amendment and it is one which was put to me by the Housing Centre Trust. They say:
"From a management angle, it is clearly desirable that the leases in a particular block, and even sometimes on a particular estate, should fall in together. We suggest that landlord authorities should at least be given the option of ensuring this".
I am impressed with the force of that argument and I hope that it will be carefully examined. I beg to move.
Lord MONSON: I have considerable sympathy with this amendment, but I feel that the period suggested is a little on the short side. I should like to point out that there are certain capital gains tax pitfalls when leases of less than 51 years are sold, and this may make what is suggested just a little complicated.
Lord BELLWIN: My noble friend has explained why he believes that the minimum period for the lease of a flat sold under the right to buy should be 21 years, rather than the 125 years provided in the Bill as drafted. Since that was his intention, perhaps he should really have sought to amend Clause 15(1)(b) and Paragraph 1 of Schedule 2, which set the minimum period of the lease, rather than Clause 6, which merely ensures that the minimum period of 125 years is assumed when the dwelling is valued.
There is no magic about the figure of 125 years. For a number of reasons, it is simply a convenient period for a lease of a flat sold under the Bill. It is a long lease. It safeguards the value of the buyer's investment slightly more than the more usual 99-year lease would, and though we may perhaps be looking forward slightly too far if we compare too closely a lease expiring in the year 2079 with one ending in the year 2105, it is the case that the latter lease would not become a wasting asset for about sixty years, compared with about thirty if the term was 99 years. 125-year leases have precedents in the sale of flats in the private sector, and local authorities have in the past granted leases of this length for purposes other than housing.
The minimum period of 21 years suggested by my noble friend, on the other hand, would be quite unacceptable. It would allow would-be purchasers the alternative of either not buying at all or buying a short lease which would be a rapidly depreciating asset. This would be exploited by landlords opposed on principle to the right to buy to deter their tenants from exercising that right. For this, and other reasons which have been given, I fear that the amendment is unacceptable.
Baroness BIRK: I put my name to this amendment in order to support the principle of the amendment of the noble Lord, Lord Hylton. I also realised that the amendment itself was defective, but it was a question of discussing the principle. I wonder whether the Minister could tell me why they have not thought about leases being made coterminous, because of the management problems which arise when you have leases in one block of flats all ending at different times and the problem created when you want to
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redevelop. It seems to me that by making the term 125 years for all flats, the Government are setting up unnecessary difficulties. It is that reason and the principle, rather than the actual term of 21 years, that I am supporting.
Lord HYLTON: I wonder whether it would be possible before Report stage to have an answer, both about the management point and about the useful life of flats?
Lord BELLWIN: I hear what my noble friend says and, of course, I will gladly come back to him on the point. I really do not feel that it is something we might do anything about, but I gladly undertake to discuss it with colleagues and see whether they feel there is something that we ought to be doing.
Baroness BIRK: Perhaps I may have an answer on my point about coterminous leases as well?
Lord HYLTON: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.26 p.m.
Lord MONSON Lord MONSON moved Amendment No. 16:
Page 5, line 33, leave out (" £10 per annum ") and insert—
("£25 per annum for the first 25 years of the term
£50 per annum for the second 25 years of the term
£100 per annum for the third 25 years of the term
£200 per annum for the fourth 25 years of the term
£400 per annum for the final 25 years of the term")
The noble Lord said: I beg to move Amendment No. 16 and, with the leave of the Committee, I will speak at the same time to Amendment No. 56. Very unusually, No. 16 is effectively consequential upon Amendment No. 56, in so far as Schedule 2, to which No. 56 relates, sets out in detail the terms upon which the tenant of a local authority flat may acquire a lease, while Clause 6(4) merely reiterates in précis those terms, in order that a valuation may be established for the dwelling-house prior to the sale.
The tenant—and I do not think that the Government have fully appreciated this fact—who buys his flat is, under the Bill as drafted, in an extraordinarily privileged position in relation to a tenant who buys his house. A man who buys his house will have to stand on his own feet, in true Thatcherite fashion—and I do not say that in any disparaging way. In other words, he will have to repair his roof, he will have to unblock his drains, if there is damp in the wall he will have to deal with that, if the chimney falls down he will have to rebuild it and, of course, he will have to bear the entire responsibility for insuring the property against all perils and pay the increasing premium year by year.
In contrast, under the Bill as drafted, the tenant who buys a flat is in an extraordinarily cosseted position. It is true that under paragraphs 15 to 17 of Schedule 2 it is possible to offload a small proportion of the repairing obligations on to the tenant, but not very many; it is extremely heavily qualified. It is difficult to understand paragraph 15 as modified by paragraph 16, and paragraph 16 as modified by paragraph 17. It is not easy to follow. But, all in all, the repairing and insuring obligations that can be passed over to the tenant are not very great in relation to the total. The great bulk of the maintenance will still fall upon the local authority's shoulders, including, incidentally, the duty to send inspectors periodically to check that the tenant is complying with the covenant to keep the interior in good repair, as set out in paragraph 14 of Schedule 2.
If one reverts to paragraph 13 of Schedule 2—and it is necessary to keep on referring to Schedule 2, because Clause 6(4) depends on this entirely—it can be seen that, subject to the very minor exceptions listed in paragraphs 15 to 17, a local authority is obliged,

"(a) to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;

(b) to keep in repair any other property over or in respect of which the tenant has any rights by virtue of this Schedule;

(c) to ensure, so far as practicable, that any services which are to be provided by the landlord and to which the tenant is entitled (whether by himself or in common with others) are maintained at a reasonable level
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and to keep in repair any installation connected with the provision of those services".

That, of course, includes lifts in tower blocks, and so on.
Furthermore, the lessor—the local authority—is required to rebuild or reinstate the dwelling-house in the event of destruction or damage by fire, tempest, flood or any other cause against the risk of which it is normal practice to insure. It cannot possibly cost less than £10 per annum at 1980 prices to insure the average flat of, say, 400 square feet against fire, tempest, flood, aircraft damage and so on. On the most optimistic estimate, it must cost, at the very minimum, £15 per annum to cover the other repairing obligations. That is the absolute minimum figure. So £25 rather than £10 is the groundwork necessary for the council to break even. This takes no account of inflation.
One must remember that a local authority will be responsible for these flats for l25 years. Its responsibility for houses lasts for 25 years at the maximum, and less if a mortgage is provided by a building society. With inflation at a mere 5 per cent. per annum, this minimum outlay of £25 a year will rise to £287 in 50 years' time and to £11,133 in 125 years' time. But with inflation at 10 per cent. per annum—and it is certainly nothing like 10 per cent. at the moment, and we are a long way from it—a local authority will be spending £2,935 per annum in 50 years' time and £3,732,722 in 125 years' time, against which there is an income from the tenant of only £10, if the Bill remains unamended.
All the savings in public expenditure envisaged by the sale of council houses which may or may not bear fruit—and many noble Lords on the Opposition Benches doubt that they will—will certainly be nullified if the Bill remains as it is, by the continuing obligations forced upon local authorities by their duty to maintain these flats in repair. The tenant of a council flat is not only extraordinarily privileged vis-à-vis the tenant of a council house who wants to buy but also vis-à-vis an individual buying the lease of a flat in the private sector. In the private sector it is normal nowadays to pay a much higher ground rent than £10. A ground rent of £50 or £100 is more usual. Furthermore, this ground rent is normally doubled every 33 years,

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which provides a certain minimal protection against inflation. It covers inflation of 2 per cent. per annum, which admittedly is not very much but it is certainly better than having the ground rent fixed over the entire period.
Furthermore, and far more important, it is normal for the lessee to bear almost all, if not all, of the repairing and insuring costs. Either he must pay a service charge to the landlord—I know we shall come to service charges later, but nobody could, I think, object to a fair, index-linked service charge—or, as quite often happens, he is obliged to participate in a limited company to which all the tenants in a block belong in order to take care of the roof, staircases, lifts and all the communal parts.
I personally think it would be better if provision could be made for local authorities to impose a service charge. I cannot find provision for this anywhere in the Bill. Failing agreement from the Government on this, I urge the Government seriously to consider my amendment. It will provide a little bit of protection. It is geared to inflation at about 2·9 per cent. per annum, which is not very much. The lessee will never lose out. He will never pay as much, in real terms, as he does in the first year, but it is a little bit better than nothing, and I urge the Government to give it serious consideration.
10.35 p.m.
Lord BELLWIN: Some of the points raised by the noble Lord, Lord Monson, are most interesting, not to say fascinating. I am sure he does not expect, at this time of the night, that one would spot what I suspect must be a rather simple explanation of the points that he makes. However, I readily assure him that of course we shall look at this very carefully, indeed with a magnifying glass in order to pick out the answer.
The reason that the Bill provides for the tenants of flats to buy a long lease under the right to buy rather than a freehold is that, under the law as it stands, long leasehold sales offer the most convenient way of making arrangements for dealing with such matters as the provision of services and obligations to repair. The existence of a ground rent is an incidental element
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of arranging matters in this way. It is not designed to secure a continuing income for the ground landlord, but merely to represent in a token way his continuing interest in the land. I therefore see no reason to make specific allowance for inflation, as the noble Lord's amendments would do, or to try to maintain the real value of the ground rent. I had this note before I listened to some of the points made, so I qualify that last remark to the extent that I did in opening my response to the noble Lord.
I know from the noble Lord's speech on Second Reading, and from amendments which he has put down, that he has anxieties about the possibilities relating to service charges and repairing obligations. The Bill goes a long way towards meeting those anxieties, but on this point I fear that I must stand upon the Government's view that it would be wrong to provide for landlords selling under the right to buy to be able to secure the future value of their income in the way suggested. Having said that, I repeat that I think we ought to look at some of the points made. While I cannot accept the amendment, and hope that in view of what I have said the noble Lord may feel able to withdraw it, I certainly think we ought to look at it, and I undertake to do so.
Lord EVANS of CLAUGHTON: I was very interested in the speech made by the noble Lord, Lord Monson, and very grateful for the facts and figures he was kind enough to provide. It seems to me that if the ground rent is merely a nominal recognition of the existence of a long lease between landlord and tenant one might as well make it a peppercorn, which is the usual way of doing it; if it is not going to be of real monetary value one might as well recognise that and call it a peppercorn. Secondly, I would like to know this. Will the cost of servicing the block of flats—what would be the service charge in a private block of flats—go on the housing revenue account of the local authority?— because that would cause a lot of difficulty among local authorities facing increasing burdens on housing revenue account, none of which they are recovering.
Lord BELLWIN: One would normally expect that the selling price would reflect some of these additional costs and the kind of expense to which the noble Lord

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refers. The housing revenue account would therefore benefit in that way. As I said, I would want to look at some of these points, and I will gladly look at those raised by the noble Lord, Lord Evans.
Lord MONSON: I am extremely grateful to the noble Lord for saying he will have a look at it. The noble Lord, Lord Evans, speaks about a peppercorn. I am sure he and others realise that with inflation at as little as 3 per cent. it will not be long before it does become a peppercorn; the £10 would be worth one-quarter of one penny in 125 years' time. Anything where the sending out of the half-yearly invoice costs twenty times as much as the amount received is not good policy. I would still prefer a higher starting figure.
The noble Lord is quite right in saying that the ground rent is not normally meant to include a service charge. The trouble is that I do not see in the Bill any provision for any kind of service charge, either de jure or de facto. We are talking about very considerable sums of money here. I wonder whether the noble Lord will say that the Government will seriously consider giving local authorities power to impose a fair service charge when they grant 125-year leases.
Lord BELLWIN: I would certainly not be able to say that to the noble Lord. Frankly, I would think it most unlikely. But anything that he says is clearly on record and will go into the pool of thinking on the points that have been made.
Lord MONSON: In that case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.41 p.m.
Lord MONSON Lord MONSON moved Amendment No. 17:
Page 5, line 36, at end insert ("and
(e) that the landlord would continue throughout the term of the lease to bear the entire cost of keeping in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and of making good any defects affecting that structure, and to bear the entire cost of insuring the dwelling-house against destruction or damage by fire, tempest, flood or other normal risks").
The noble Lord said: Although this amendment logically follows the previous
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one and is connected with it, it stands or falls on its own. In other words, even if some variation of my Amendment No. 16 were not accepted by the Government, or does not succeed at a later stage, this amendment, or some modification of it, is definitely necessary if local councils are not actually to be cheated.
The point is that it is highly unusual, as I have said previously, for a lease to be granted on such favourable terms. It certainly does not happen with the tenant bearing virtually no recurring obligations himself. It certainly does not happen in the private sector. This must be taken into consideration when a valuation is being made. After all, if you were thinking of buying a house and you were told that if you were to pay an extra £1,000 on the purchase price you would be absolved from all insuring and repairing liabilities for 125 years, you would leap at the chance. I suggest that unless some higher ground rent or service charge were imposed, it would effectively raise the value of these flats prior to the discount, and that must be taken into consideration by the valuer, otherwise you are not getting a valuation at a fair price. It may be—and this probably is the case—that the amendment is not quite explicit enough. I have lifted it largely from parts of Schedule 2, but certain things have been omitted and it may be that the noble Lord will want to examine it. However, I would be grateful if he would give it serious consideration.
Lord BELLWIN: As I said in regard to the previous amendment, we would want to look at some of the points which the noble Lord, Lord Monson, has raised. However, I think that one must say that he is not correct in his basic assumption that a landlord is required to carry out the functions listed in his amendment at his own expense throughout the term of the lease when a flat is sold under the right to buy. Even if his interpretation had been correct, however, his amendment would not have been necessary to ensure that the landlord's obligations were taken into account when the grant of a lease of the flat was valued, because Clause 6(4)(d) requires that it should be assumed that:
"the grant was to be made with the same rights and subject to the same burdens as it would be in pursuance of this Chapter".

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Those rights and burdens would naturally include the terms included in the lease by virtue of Clause 16 and Schedule 2.
It may perhaps help if I explain how the matters included in the noble Lord's amendment are treated in Schedule 2. Sub-paragraphs (1)(a) and (1)(b) of paragraph 13 of Schedule 2 on page 98 provide that the lease of a flat sold under the right to buy shall contain implied covenants by the landlord:
"to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;"—
and
"to keep in repair any other property over or in respect of which the tenant has any rights by virtue of this Schedule".
Sub-paragraph (2) of paragraph 13 on page 98 provides that the first of these two covenants includes:
"a requirement that the landlord shall rebuild or re-instate the dwelling-house and the building in which it is situated in the case of destruction or damage by fire, tempest, flood or any other cause against the risk of which it is normal practice to insure".
This is in line with normal practice regarding landlords' repairing and maintenance obligations when flats are sold in the private sector. The county court may (under paragraph 13(3) of Schedule 2) authorise the exclusion or modification of these obligations, but only with the consent of the parties. I believe that the noble Lord's confusion may arise, however, from paragraph 15(b) on page 99, which says that:
"Any provision of the lease or of any agreement collateral to it shall be void in so far as it purports … (b) to enable the landlord to recover from the tenant any part of the costs incurred by the landlord in discharging or insuring against his obligations under paragraph 13(1)(a) or 13(1)(b) above".
This sub-paragraph is subject, in its turn, to paragraph 16. Together with paragraph 17, that paragraph provides that a landlord is not to be prevented by paragraph 15 from recovering from the tenant costs incurred under paragraph 13(1)(a) or 13(1)(b) in carrying out repairs which do not amount to structural defects. Even where works do constitute the making good of structural defects, paragraph 17 allows the landlord to recover their cost where either the tenant
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has been notified of the existence of the defects before the granting of the lease or the landlord has not become aware of them earlier than 10 years after the granting of the lease. Paragraph 16 also allows landlords to recover the costs of insuring against risks involving such repairs or the making good of such defects.
What this rather complicated exposition adds up to can be summarised in two propositions, both of which should be welcome to the noble Lord, Lord Monson. First, valuations under the right to buy do reflect the terms on which the sale is to take place. Secondly, the obligations on landlords are not as onerous as the noble Lord fears. I suggest that the noble Lord's point is, therefore, met by the Bill as it stands. In those circumstances, I hope that he will feel able to withdraw his amendment.
Lord MONSON: Amendments Nos. 15 to 17 are certainly something of a "dog's dinner," and they will provide assured employment for the legal profession for many years to come. It is true that when leases are sold in the private sector the landlord's obligations do exist, but I suggest that normally these are recouped by some form of service charge and, to some extent, by a higher ground rent. However, if the noble Lord assures me that the valuation will fully reflect this state of affairs, I think that I had better beg leave to withdraw the amendment now and return to it possibly at the Report stage.
Amendment, by leave, withdrawn.
Baroness LLEWELYN-DAVIES of HASTOE: With the leave of the Committee, may I say that although I should be loath to echo the words of the noble Lord that this is a "dog's dinner," I am sure that we should have understood the Bill better if we had had the Notes on Clauses. If I may leave that point aside, may I add that the time is just after a quarter to eleven and there was an unofficial agreement between both sides of the House that we should rise at about this time. I wonder what the noble Lord the Chief Whip would think about that?
Lord DENHAM: Chief Whips, I know, are never very happy people, but I cannot say that I am particularly happy with the

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progress that we have made so far. But, of course, an agreement is an agreement. Perhaps it would be tidier if, just before we rise, we could deal with the Question whether the clause should stand part of the Bill. I am not sure whether any noble Lord particularly wishes to raise anything on the Motion that this clause stand part, but, if not, perhaps we could just round off the Bill by dealing with it.
Clause 6 agreed to.
Lord DENHAM: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.