HOUSING BILL

HL Deb 26 June 1980 vol 410 cc1809-61

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 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 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 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 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 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 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 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 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 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 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, 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 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 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 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 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 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 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 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 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 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.

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 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 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 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 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. 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 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 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 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- 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 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 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 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 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". 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 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 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. 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 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 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 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 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 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 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 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 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 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,

1. "(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;
2. (b) to keep in repair any other property over or in respect of which the tenant has any rights by virtue of this Schedule;
3. (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 1854 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, 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 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 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 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 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". 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 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 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.