Housing and Building Control Bill

HL Deb 28 February 1984 vol 448 cc1179-266

House again in Committee on Clause 1

4.20 p.m.

Lord Coleraine moved Amendment No. 2. Page 2, line 7, leave out paragraphs (a) and (b) and insert ("for a term exceeding 21 years commencing with the relevant time.")

The noble Lord said: Clause 1 of the Bill gives to secure tenants who occupy houses the right to buy if their landlords can support a lease of 21 years. But in the case of flats, secure tenants of flats can only buy a long lease if their public sector landlords have themselves leases of at least 50 years and can therefore grant leases of 50 years. I seek by this amendment to persuade your Lordships that this is unfair and that secure tenants of flats should, like secure tenants of houses, have the right to buy long leases if their public sector landlords can support leases of 21 years.

As far as I can see, the matter is as plain as a pikestaff. It is only fair that flat tenants should have this right. They are prejudiced in many ways and not least by the fact that, unlike the owners of houses or the leaseholders of houses, they are not in a position to enfranchise.

I understand that the reason for making the distinction was given by my right honourable friend the then Secretary of State in another place on 23rd November 1982 at col. 719 of the Official Report. Mr. Heseltine said: It is because those provisions do not apply to flats that we are providing for a 50-year minimum for flats so that tenants get a marketable asset". It seems to me that it should be a matter for the tenants themselves to decide whether they are going to get a marketable asset. If a tenant feels that a 21-year lease is a marketable asset, then why should he not be able to have a 21-year lease? I speak from close personal knowledge of a flat which was purchased when 25 years of the lease remained. Eight years have since passed, and over those eight years the flat has increased in value several times. In those circumstances I do not see how anyone can say that the flat was not as much of a marketable asset eight years ago as it is now with 17 years to run. I am sure that this would not apply to all flats, but in my view the tenant of any flat should have the right to make up his own mind whether to buy, and should be given the right to take a long lease of 21 years or more. I beg to move.

Lord Bellwin

The amendment to Clause 1 which was tabled by my noble friend Lord Coleraine would, as he said, allow tenants to buy a sub-lease of both fiats and houses in all cases where the landlord's own lease has more than 21 years to run. Clause 1 as drafted provides that in the case of flats the minimum term must be 50 years. Perhaps I may explain why we have decided on this different treatment of houses and flats.

Under the Leasehold Reform Act 1967, anyone who acquires a long lease of a house—that is a lease for more than 21 years—can subsequently acquire the freehold if he meets the relevant qualifying conditions. Consequently a lease of that term or longer is always marketable because it carries with it the opportunity to acquire the freehold.

However, different considerations apply to flats. As I said previously, the Leasehold Reform Act 1968 does not apply to flats and the value of the asset acquired by the tenant is related directly to the term of the lease granted. Although the tenant will have a statutory right to a mortgage when he buys his lease, 50 years is the minimum unexpired term normally acceptable to private sector mortgagees as security for the purchase of the residential property. To give a right to buy and a right to a mortgage in respect of flat leases for shorter terms, as my noble friend's amendment proposes, could mislead many tenants into buying their flat, only to find later that it is virtually unmarketable.

As regards the new clause—which in fact is Amendment No. 26, tabled by my noble friend Lord Coleraine and which is part of the same general subject—this seeks to deny the right to enfranchise to tenants acquiring a house lease under Clause 1. Whether or not right of enfranchisement should apply in such cases is a question to which the Government have given the most careful consideration, and it is a subject on which I have written to my noble friend. I have noted what my noble friend has said about the general principle of leasehold enfranchisement, but the issue in this context, I would respectfully suggest, is one of consistency in the treatment of long leaseholders, rather than the merits of leasehold enfranchisement as such.

We do not think that it would be justifiable not to apply the normal leasehold enfranchisement rules to one particular group of leaseholders simply because they acquire their leases under this Bill. To do so would be to treat "right to buy" lessees of houses differently from other long leaseholders of houses and we think that it would lead to some very strange discrepancies. Let me give an illustration of what we have in mind. Local authorities can already grant subleases of houses in which they themselves have a leasehold interest if they wish to do so and if the terms of their own lease permit it. If they grant sub-leases of the appropriate term, rights of enfranchisement can arise. If we refuse such rights to those who buy under Clause 1, we will create a situation in which former tenants who bought their house leases under "voluntary" sales schemes can acquire their freehold, but those who bought their leases under the right to buy cannot. I do not see how one could defend such an anomaly and I would be interested to hear whether my noble friend Lord Coleraine would agree with that view, and then decide what to do about the amendment.

The Earl of Caithness

My noble friend rather lost me in the middle of his reply; I shall have to read it very carefully. However, I should like to take him up on the point he made about mortgages. I think he said that in order to obtain a mortgage on a flat the normal unexpired period of the lease must be 50 years. If that is so, why should somebody who perhaps does not need a mortgage on a flat be prevented from taking a long lease when the head leaseholder still has an unexpired term of 40 years? If a person does not require a mortgage, why can he not exercise the same rights as a person with a house, to get a long lease on a flat?

Lord Bellwin

On a point of clarification, what I actually said—and I can well sympathise with my noble friend for not following what is a complex matter—was that 50 years is the minimum unexpired term (and we are talking here of leasehold) normally acceptable to private sector mortgagees as security for the purchase of residential property.

Lord Seebohm

How certain is the Minister of what he has just stated? I daresay that some building societies have that rule, but in the West End of London, leases of up to 30 years are perfectly satisfactory security for any bank.

Lord Bellwin

I was, of course, referring to residential property. If the noble Lord is saying that what he has said is so in the case of residential property in the West End of London, then I certainly would not quarrel with him. But what I have stated is the generally accepted rule, as I understand it.

Lord Seebohm

It just does not happen to be true.

Lord Coleraine

I am sure that my noble friend did answer my point. He certainly answered points that I had not made and I think he also answered points that I may be making in a speech on a later amendment. But, so far as I can see, his attitude is directed not so much to the question of leasehold enfranchisement, as to pushing forward a very strong line in official paternalism. However, at this stage in today's debate I do not wish to push the matter to a Division. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2A not moved.]

Clause 1, as amended, agreed to.

Schedule 1 agreed to.

Clause 2 [Variation of circumstances in which right does not arise]:

4.29 p.m.

Baroness Faithfull moved Amendment No. 3: Page 2, line 18, after ("building") insert ("or land").

The noble Baroness said: With your Lordships' permission and with the permission of my noble friend the Minister, I beg to move Amendment No. 3 and to speak also to Amendments Nos. 4, 7 and 8, as they all concern the same matter. Amendment No. 4: Page 2, line 18, after ("(2)") insert ("or (2A)"). Amendment No. 7: Page 2, line 25, leave out ("if the building") and insert ("or land if it"). Amendment No. 8: Page 2, line 29, after ("(b)") insert ("if a building").

Clause 2 adds a new category of dwelling where the right to buy shall not arise; that is, where the dwelling is within the curtilage of a building held mainly for other than housing purposes and has been let to an employee in consequence of his employment. Non-Part V dwellings were brought within the ambit of the right to buy because of the difficulties likely to be created where dwellings in operational areas went out of the control of the local authority. However, the effect of the clause is restricted to dwellings within the curtilage of buildings and thus would not include dwellings which stand on their own, such as those in a park or cemetery—for example, lodges—notwith-standing that they are within operational areas and that the difficulties are similar.

It is perhaps illogical for an employee's flat in a crematorium building to be excluded from the right to buy while the employee's house in the middle of a cemetery is not. The amendments seek to correct this anomaly. I beg to move.

Lord Bellwin

Before commenting on the detailed points which my noble friend has made, I should like to put this subsection of Clause 2 into its wider context. It is part of a package of proposals in Clauses 2, 23 and 29 of the Bill designed with two objects. The first is to bring certain county council tenancies within the scope of the security of tenure and right to buy provisions of the 1980 Act. The second is to supplement and refine the categories of dwellings which are excluded from security of tenure and/or the right to buy for certain operational reasons. These two objectives are related. In extending security of tenure and the right to buy to county council tenancies, we clearly need to ensure that counties' operational responsibilities are not prejudiced.

But we are also taking the opportunity to provide that a common set of provisions on the fact of the main legislation governs all dwellings on land which is held for other than housing purposes. The Housing (Extension of the Right to Buy) Order made in May 1983 extended the right to buy to most local authority council dwellings held other than under housing powers. This order is to be repealed. The right to buy will apply equally to county and other local authority dwellings, but subject to the common set of "operational" exceptions which we are now discussing.

I should like to turn to the detail of this particular amendment. Clause 2(1) provides that the right to buy shall not arise where a dwelling is within the curtilage of an operational building, and where it has been let to an employee in consequence of his employment. It is sensible that the right to buy should not arise in such circumstances. Where a dwelling is within the curtilage of, say, a town hall, a school, a fire station, there will be security and operational considerations which could be prejudiced by a sale.

These amendments would extend this exclusion in two respects. First, they provide that the right to buy should not arise where a dwelling is one which it is the practice of the landlord to let to a warden or caretaker. I do not wish to quarrel with my noble friend's basic objective here, but I believe that the situation which she has in mind is adequately safeguarded in the existing provisions. Paragraph 2 of Schedule 3 excludes from security of tenure and the right to buy any tenant who is an employee of his landlord and whose contract of employment requires him to occupy his home for the better performance of his duties. Most wardens and caretakers are likely to be covered by this exclusion and I do not think we would wish to go wider. In addition, in Clause 29 of the Bill, we are proposing that there should be a new category of exclusion covering dwellings normally let under contract of employment, but exceptionally let otherwise on a short-term basis.

Secondly, these amendments extend Clause 2(1) so that any dwelling which is within the curtilage of land held for non-housing purposes would be excluded from the right to buy. For this reason the Government could not accept this amendment as it stands. County councils are not housing authorities and do not hold land for housing purposes. It follows that the effect of the amendment would be to exclude from the right to buy all county council dwellings, which, of course, is contrary to our intention.

Nevertheless, I accept that there may be defined categories of land to which we need give further consideration. Indeed, I thought that my noble friend made a particularly telling case when she referred to cemeteries, which must be a special case, and said that dwellings within them should be excluded from the right to buy. We have been having discussions with the associations on the details of the proposals, and they have suggested further amendments which may be needed to the proposed categories of exclusion. As I say, I am certainly impressed, as indeed I almost always am (and I had better qualify that if my noble friend will allow me), by my noble friend Lady Faithful!: and in the light of what she has said I shall certainly undertake to take this away and look again at this part of the Bill with a view to bringing forward amendments for consideration at the Report stage. With that undertaking, I hope that my noble friend may feel able to withdraw her amendments.

Baroness Faithfull

I thank my noble friend the Minister very much for his consideration of this matter. I shall read very carefully in Hansard all that has been said. I am very grateful to him for his help. I may perhaps wish to bring this matter back at the Report stage, as indeed he does. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 4 not moved.]

Lord Bellwin moved Amendment No.5: Page 2, line 20, leave out ("(a) the tenant or his predecessor in title was") and insert ("the dwelling-house was let to the tenant or to a predecessor in title of his in consequence of the tenant or predecessor being").

The noble Lord said: With this amendment I also propose to speak to Amendments Nos. 6, 21, 50, 51, and 141. Amendment No. 6: Page 2, line 22, leave out from ("below") to end of line 24. Amendment No. 21: Page 8, line 27, leave out ("his predecessor in title") and insert ("to a predecessor in title of his"). Amendment No. 50: Page 25, line 4, leave out ("the tenant or his predecessor in title was ") and insert ("the dwelling-house was let to the tenant or to a predecessor in title of his in consequence of the tenant or predecessor being"). Amendment No. 51: Page 25, line 6, leave out from ("specified") to ("and ") in line 8. Amendment No. 141: Page 88, at end insert— ("(3) In paragraph 8 of that Schedule for the words "(or his predecessor in title)", in the first place where they occur, there shall be substituted the words "(or a predecessor in title of his)" and for the words "(or his predecessor in title)", in the second place where they occur, there shall be substituted the words "or predecessor". 24. In Part I of Schedule 4 to that Act, in Ground 6, for the words "(or his predecessor in title)", in the first place where they occur, there shall be substituted the words "(or a predecessor in title of his)" and for the words "he (or his predecessor in title)", in both places where they occur, there shall be substituted the words "the tenant or predecessor".").

These amendments are minor amendments, largely consequential on the proposed right to exchange. They arise from the fact that assignments made under the proposed right to exchange will increase the likelihood of tenants, whether or not they are successors under Section 31 of the Housing Act 1980, having more than one predecessor in title under the same tenancy. These amendments give recognition to the possibility, so that Parliament's intention that conditions which applied to the granting of the original tenancy may be taken into account in the various relevant provisions. I beg to move.

On Question, amendment agreed to.

Lord Bellwin moved Amendment No. 6:

[Printed above.]

On Question, amendment agreed to.

[Amendments Nos. 7 and 8 not moved.]

Baroness Faithfull moved Amendment No. 9:

Page 2, line 34, at end insert— ("(2A) This sub-paragraph applies to a dwelling-house which it is the practice of the landlord to let to an employee for the performance of his duties as a caretaker or warden of accommodation provided for housing purposes, and in this sub-paragraph 'housing purposes' has the same meaning as in sub-paragraph (2)").

The noble Baroness said: As the Bill stands at present, the right to buy will not arise in the case of dwellings let to employees in consequence of their employment where such dwellings are in operational buildings which are not held for housing purposes. Thus, it will not cover the case of a dwelling specifically intended for occupation by a caretaker of a block of flats or a warden of a sheltered housing scheme and occupied by that employee solely by virtue of that employment.

Housing schemes are as much operational areas as crematoria, social service and educational buildings, but the Department of the Environment envisages this falling within the scope of this clause. I think that it is illogical for dwellings specifically provided and designated to enable employees to carry out their duties and let solely for that reason to be subject to the right to buy merely because they are contained within a housing scheme. This amendment seeks to correct this anomaly without in any way widening the scope of the clause to other housing scheme dwellings which may be occupied by employees and which would properly be subject to paragraph 2 of Schedule 3 to the 1980 Act. The amendment seeks to safeguard specific dwellings from being subject to the right to buy regardless of the employee's contract of employment. I beg to move.

Lord Bellwin

What I said on Amendment No. 3 I should like to say again to my noble friend. I think that this is part of what I understood we undertook to look at carefully and, hopefully, bring back at Report in a manner which she will think covers the points she makes. I gladly undertake to do with this amendment what I undertook to do with that one.

Baroness Faithfull

I thank my noble friend the Minister, and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.40 p.m.

Viscount Ingleby moved Amendment No. 10:

Page 3, line 5, leave out paragraph (a) and insert— (" (a) the dwellinghouse has had those features since it was constructed, or it is a dwellinghouse in which one or more of the following alterations have been carried out by the landlord, or the predecessor in title of the landlord, to meet the needs of a disabled person or persons—

1. (i) the extension of the dwellinghouse by the provision of one or more additional rooms;
2. (ii) the construction of an additional bathroom with a water closet;
3. (iii) the removal or relocation of internal walls in conjunction with the relocation of a bathroom, fixed bath or shower or water closet;
4. (iv) the installation of a fixed vertical passenger lift;
5. (v) an increase in excess of 7.5 square metres in the floor area of the dwellinghouse;

and in this paragraph "constructed" includes the provision of a separate dwellinghouse by sub-division of an existing structure and the meaning of "predecessor" is restricted to a local authority, a development corporation, the Commission for the New Towns or a registered housing association;")

The noble Viscount said: I beg to move Amendment No. 10 on the Marshalled List standing in my name and in the names of the noble Lord, Lord Molson, the noble Baroness, Lady Birk, and the noble Baroness, Lady Stedman. The purpose of this amendment is to take out the right to buy when major extensions or alterations have been done to make a home suitable for occupation by a handicapped person. The vast majority of these alterations are of a minor nature, the average cost being about £700, and consist of such things as wider doors, grab rails, ramps and kitchen fitments put at the right height. These would not be affected by this amendment; the right to buy would still apply in these cases. But where really major alterations or additions have been made, this amendment would keep these homes in public ownership for the benefit of future generations of disabled people.

What we have in mind is where, for example, a downstairs bedroom, bathroom and WC is added on to an existing house. This, with other minor alterations, can cost (and often does cost) in the region of £13,000 at the present time. I gave three examples of such houses at Second Reading. Another example would be where all the internal walls are taken out of, say, a three-bedroomed flat to make it into a two-bedroomed flat with a larger bathroom, kitchen and living room. In this particular case, we would finish up with something identical to a purpose-built flat; and this, the Government say, quite rightly, should he excluded from the right to buy. The detailed wording of this amendment is arguable and we should be very happy indeed to receive suggestions for improving it. But it is the principle behind this amendment which we are asking your Lordships to decide today.

These houses are in short supply. For example, in Camden there is a waiting list of 100 people for wheelchair accommodation. The fact that these houses are in short supply was confirmed by the noble Lord. Lord Bellwin, when we debated this matter on 26th April last year. I refer to Hansard, column 868. We believe that such accommodation, upon which a lot of money has been spent, is a very valuable asset which should not be sold but should be kept for the benefit of future generations of disabled people. This amendment is supported by the Association of Metropolitan Authorities, the Association of District Councils, the London Boroughs Association, the National Institute of Housing and Town Planning, Rural Voice, the Royal Association for Disability and Rehabilitation, Age Concern and Shelter. I beg to move.

The Lord Bishop of Norwich

I should like to support this amendment for three reasons. The first is the breadth of support that it has in the country, about which the noble Viscount has already told us in his opening speech. It is quite clear that there is a very widespread feeling that it would be an injustice if this amendment were not agreed. The second reason why I should like to support the noble Viscount is because it is our duty in your Lordships' House, it seems to me, to take particular care of those who are disadvantaged and who cannot always speak with the facility and ability with which the disadvantaged Members of your Lordships' House are able so eloquently and well to speak as banner bearers for many others who simply feel helpless, isolated and unable to make themselves heard. For that second reason I hope the Government will give a great deal of sympathy to this amendment.

The third reason is because, in a way, I think the Government have agreed the principle. The Government's own wording in Clause 2(2)(a) is: the dwelling-house has had those features since it was constructed". It seems to me that there is no matter of principle here. The Government have in fact already agreed in principle that the right should be related to this clause. This is simply an extension of work that has been done after construction, and therefore it is very much what the Government appear to have in mind to be wanting to do. Therefore, I hope it is something that the noble Lord, Lord Bellwin, will almost naturally agree to without thinking any more about it.

Lord Molson

I will not repeat the points that have been so cogently put by my noble friend Lord Ingleby. I wish only to emphasise one point, and that is that I feel that in a number of provisions of this Bill the Government are a little inclined to take the short view and to consider the present generation without having regard to a subsequent generation. They feel that it is wrong to deprive disabled people of the right to buy; that the right to buy means that accommodation which is particularly adapted for the use of disabled people will go out of the category of the housing which is specially reserved (shall I say?) for disabled people and will become part of the general stock of the housing of the country.

I think it is a mistake to attach too much importance to the idea that the disabled person now occupying that accommodation should have the right to buy without taking into account the importance of preserving as large a stock as possible—and it is very small relative to the demand at the present time—of accommodation which is specially suitable for disabled people in order that it may be available for another generation. I feel that the Government have this general consideration in mind but I feel that they ought to be willing to go a little further, in the way that is indicated by my noble friend and has been emphasised by the right reverend Prelate. I hope that the Government will not consider this as being a departure from the principles to which they are attached, but merely an extension in a suitable case for the preservation of accommodation for a category of people of whom, unfortunately, there will be future generations as well as the present generation.

Lord Broxbourne

This amendment has been so eloquently commended to the Committee by those who have already testified in its favour that I feel it needs no more commendation—or, at least, not from myself. I rise very briefly to add my support to it for one principal reason in particular. The fact that my name is not among those tabling this amendment enables me to say that which reasons of modesty forbid them to say; that is, to congratulate them on the clarity and simplicity of their drafting. That is not an invariable characteristic of this type of legislation. Many years, I fear, now having been spent by me in my forensic capacity in statutes dealing with property law, planning law, landlord and tenant law, public health law and the like, make me only too aware of this circumstance.

In this case it is clearly drafted by the noble Viscount, Lord Ingleby, who, characteristically modestly, invites suggestions for the improvement of the drafting. For myself I have none and I venture to say that I cannot see any single phrase in this draft which is capable of that doubt and dispute which so often arises in these cases. It is certainly an improvement on the words for which it is proposed to be a substitute. For that we have to go to Part I of the First Schedule to the Housing Act 1980, which reads: The dwelling-house has features which are substantially different from those of ordinary dwelling-houses and which are designed to make it suitable for occupation by physically disabled persons". The words "substantial" and "substantially" are notoriously difficult and dangerous words in law. I seem to recall—the noble Lord, Lord Simon of Glaisdale, will correct me if I am wrong—a case in the House of Lords on the meaning of the word "substantial" which after long and learned argument through the courts came to the conclusion that it means "not substantial".

Here we have very specific criteria which seem to me to be incapable of doubt in the course of their interpretation and application. While respectfully commending the noble Lords who are sponsors of this amendment, I testify to my support for it and hope the Minister can accept it.

Baroness Lane-Fox

I feel very humble in speaking in opposition to this amendment after the distinguished speakers who have gone before. On a number of occasions in recent years I have been told by disabled people that they have unexpectedly found a house to live in, suitably adapted to their needs. In some cases this has occurred when a family has had to change districts, probably because of a job. To find a ready-made place is a godsend—and here I am referring to substantial adaptations. Obviously it is not only council properties and those controlled by voluntary organisations that have been constructed to suit disabled people. There are houses in the community that have been privately designed and constructed and their presence can lend greater freedom and mobility to households with a seriously disabled member.

I wonder, really, who it is basically that the movers of the amendment seek to benefit. With growing numbers of young disabled people who through the progress of medical science survive and live on in the community, of course adequate accommodation should be available for their needs, if possible widely distributed throughout the country to allow such freedom and mobility of housing as required in a modern industrial society. If the occupant of a substantially adapted council house wishes, and only if he wishes, to take up the offer to purchase his home and if in later years he decides to sell, the usefulness of the substantial adaptation does not just vanish from the scene. I know this too well because in the last 40 years it has happened to me in various parts of the country. Houses have been substantially adapted privately and have been used by other people who make use of those adaptations. I feel it is a fair point to make. Indeed, if he is wise, the seller will point out in the advertisement, or whatever, the adaptations and their suitability for physically handicapped persons. In some cases it would even be wise to state the type of physical disablement that the adaptation was carried out for. This enables a family with a disabled person needing to move from another district to find their new nest.

Let us say that the assumption is that the right to buy is not granted for the reasons of the amendment, in a district where all other occupants of council houses have the right to buy, but the adaptation has disqualified this right. May I repeat the gist of what I said on Second Reading. This to me is extraordinarily hard discrimination. Let us think of the disabled person concerned. He knows that this is one more financial disadvantage that he has caused to his family. Neighbours to the right and to the left are gratified at their chance to invest in buying their home gradually and over time, rather than paying rent to the council. What the amendment does is to deny the family the right to take up this opportunity and to deny the council the purchase money with which to add to the adaptations and make more suitable housing. Most of all it denies the facility to move about more freely and instead one must he restricted to all the difficulties entailed in transfer. So I still search for the reason that prompts this amendment.

I am bound to think that it must stem from a wish to hold people to municipal housing instead of encouraging them to plant their stake in the country with their own home. I fail to see why disabled people should be picked on for this and for these reasons I oppose the amendment.

Baroness Elliot of Harwood

I should like a very short word. I agree with what the noble Viscount, Lord Ingleby, and the noble Lord, Lord Molson, have said. My experience comes from being responsible for starting a home for the disabled—not for permanent stay but to enable them to improve their capacity to join in the ordinary living world of the community rather than staying either in hospital or in a home. One of the things that has happened in my experience in the city of Birmingham is that quite a number of houses have been altered so that people living in this place, Prospect Hall, can go out into the community and live an ordinary life. It has taken a long time to persuade the local authority to do this and the people in this place could not in any circumstances afford to buy a house of their own. This has been a great success. It would be extremely unfortunate if those houses which have been specially built for the severely disabled who can live in the community were not available for them to go to. They could not build such houses themselves. Therefore it is most important that this amendment should be adopted by the Government because it does the one thing that enables people who are not rich enough to build their own houses to go out into the community and live an ordinary life. I hope the Government will accept this amendment.

Lord Northfield

I should like to ask a couple of questions of the movers of the amendment. I see this in everyday life as the chairman of a new town where we have dwellings such as this. I wonder whether they could face up to the problem which I am having to weigh up in my mind which is that some of these people were tenants of a house before an adaptation took place. For many years they have felt that they would like to own their own homes. They see their neighbours, who have not perhaps fallen on unfortunate days and do not have the misfortune of being disabled, buying their houses. Suddenly, because adaptations are made to their houses, they are disqualified in the queue. This could cause a great deal of anguish to those people who feel that their misfortune has meant that they are doubly—

A noble Lord

Penalised.

Lord Northfield

I thank my noble friend for helping with the phrase—doubly penalised.

Secondly, I am wondering whether the movers of this amendment are worried more about another aspect of the matter that they have not revealed. Is it not the case that, with the discounts available, scarce money which has been used to adapt these houses is in effect being wasted because someone is getting an adaptation paid for very cheaply so far as they are concerned because they have been disabled? Is it not the discount that is really worrying the movers of the amendment? Would it meet their case if the discount system were altered so that the purchaser of the house in this case did not get a discount on the cost of the adaptions? Money would then be available—and I take the point put by the noble Lord, Lord Molson, about scarcity—because the cost of the adaptions would then go back to the authority, who could spend the money on somebody else. In that way in the end nobody would be disadvantaged. I think we could meet what I suspect is the real worry behind the amendment and also meet the concern expressed by the noble Baroness, Lady Lane-Fox, that many people are desirious of owning their own home and feel terribly penalised if their misfortune prevents this.

5.2 p.m.

Lady Saltoun

It seems to me there is a great deal to he said both for and against this amendment. I wonder whether there might not he a solution which would be moderately satisfactory to both sides: that would be for the housing authority or the owner to retain a right of pre-emption should the house come on to the market again.

Lord Swinfen

I am worried about the financial aspects of housing for disabled people. A house specifically built from the word 'go" costs quite a lot more than a house which is built for a person who is not disabled. It needs wider corridors, larger bathrooms, larger doorways and all sorts of things. Houses or flats that have been adapted later on in their lives specifically for a disabled person cost a great deal to adapt.

If the dwelling is sold to the disabled tenant and that tenant then dies, the dwelling can be passed on to an able-bodied person who does not need those particular adaptions, so a certain amount of money is then in effect wasted by taking out those adaptions where they can. It means that there is a dwelling for a disabled person that is lost, and I do not think we should allow that. If the dwelling is kept in its adapted state it can be used for another disabled person.

There is another aspect which has not so far been mentioned. We have a steadily ageing population in the country and there are people who become physically disabled not through accident or disease but purely through age. We will require a greater proportion of dwellings for disabled people over the coming years, and I think it is a great mistake that we should lose any at this stage.

Another point on dwellings that are properly adapted for physically disabled people, or built for them in the very first instance, is that this amendment does not mention such things as bathroom and kitchen fittings; but the modern practice is to install fittings that can be adapted for people with different disabilites, needing different heights of work-surfaces, and so on. Those are not necessary for an able-bodied person and they will represent more wasted money. I am all in favour of this amendment.

Baroness Masham of Ilton

First, let me say that I think there should he far more housing suitable for disabled people built and more houses built with bathrooms downstairs. I also serve on a new town: in fact two new towns. I have been trying over the years to encourage them to do something they do not seem to like, that is to build suitable houses for disabled people. I think that is a great pity. I wonder whether the Government can give special grants for more housing which is suitable for disabled people and which would also serve the large population of the elderly. It seems such bad luck, if you are a young disabled man with a family living and working with colleagues who are buying their own council houses. They do not want to be singled out, and if they are disabled they want to have the same chance in life. And they are being singled out if this amendment goes through.

The elderly are a totally different matter. I am concerned about the young family with a disabled member. I should be grateful if the Minister could tell us how easy it is to get a family to move out of an adapted council house if the disabled person dies. There is no doubt in my mind that there should be far more suitable houses and flats. If that was the case we should not be in this dilemma now.

Lord Molson

At the outset I should like to say that my noble friend Lady Masham has raised some points which I hope the Minister will deal with. I rise again to answer, on behalf of my noble colleagues and myself, the question which was put by the noble Lord opposite. We did not have in mind at all the question of discounts when we framed this amendment. It really is in order to try to preserve in the special category housing which is suitable and specially adapted for disabled people and to prevent it, as a result of sale, from going out of that special category and into the general stock of housing suitable for everyone in the country.

When for eight years I was on the central housing advisory committee, I quickly discovered that one must not only regard the general stock of housing of the country as a whole but also consider the housing that was specially adapted and suitable for special categories of people. In the case of a dwelling which has been made specially suitable for a disabled person, it is extremely important in the interests of future generations that that dwelling should be kept in the special category of being suitable and available for disabled people and not merged into the general housing stock of the country. I hope that is a fair and straightforward answer to the question put to me by the noble Lord opposite.

Earl Attlee

The noble Baroness, Lady Lane-Fox, suggested that if these houses which have been specially adapted for the disabled were sold to anyone the money would go back to the local housing authority and could therefore be spent on producing more housing for the disabled. I have a nasty feeling that this would not be the case—far from it, in fact. I feel that it' I were working for a local housing authority—and we all know that money is very scarce these days—I would be disinclined to spend my taxpayers' or ratepayers' money on adapting houses for the disabled if I knew that in a few short years that house could be sold off and bought by someone who was not disabled. I therefore support this amendment.

5.10 p.m.

Lord Bellwin

The practical effect of this amendment—and let us be quite clear about it—would be to perpetuate what many people feel is a sense of injustice and discrimination among the disabled people who would be affected. The Government have concluded—on the basis of their experience over the last three years, the arguments put forward in the House last spring and the many representations we have received from physically disabled tenants—that this sense of unfair discrimination is very real and should be removed. It arises particularly where tenants in adapted dwellings are denied the right to buy. We believe the answer is to draw a clear distinction between dwellings purpose- built for the physically disabled and those which have simply been adapted. So I am sure that my noble friend Lady Elliot will be satisfied when I confirm to her, again, that dwellings which have been purpose-built for the disabled do not come within the right to buy legislation.

1 have listened to the arguments put forward by my noble friend Lord Ingleby and by other noble Lords, both today and during the Second Reading debate, as to why costly adaptations should continue to be excluded from the right to buy. But I have to say that I am not convinced. The level of investment is clearly a factor to be taken into account. It is one of the reasons—but not the only one—why we are not proposing to extend the right to buy to purpose-built dwellings for the physically disabled. However, the average cost of adaptations, at less than £1,000, is only a fraction of the cost of providing a purpose-built dwelling. And while I accept that we have undertaken a relatively small number of expensive adaptations, the average figure I have just quoted shows that they are a small proportion of all adaptations. Another point to bear in mind is that it is often difficult to differentiate between the costs that relate directly to the works for the disabled tenant and general upgrading works that the landlord might take the opportunity to have done at the same time.

I do not want to dwell too long on the argument about costs, not because I think it is unimportant, but because I believe it would be a mistake to decide whether the right to buy should arise solely on that basis. There are other and, in some ways, more important considerations to be taken into account. First, it is still the case, even where major adaptations are concerned, that private owners can get grant assistance to carry out works of the same kind. Why should a tenant be denied the right to buy—a right that is available to his more fortunate neighbours—simply because his landlord carries out similar work before the prospective sale? Why should disabled tenants be put into the invidious position of feeling that they then have to refuse adaptation works—works that could help them live fuller and more independent lives—in order to preserve their right to buy?

Secondly, may I remind your Lordships that there is still the requirement in paragraph 3 of Schedule 1 to the 1980 Act that, in order to be excluded from the right to buy, a dwelling has to have features that are "substantially different" from those of ordinary houses? Neither the Government's amendment to Clause 2 of the Bill, nor the amendment of my noble friend Lord Ingleby, would remove that requirement. But are all the types of adaptation included in this amendment really such as to make a property "substantially different" from an ordinary dwelling?

This type of equipment is generally provided by social service departments to both tenants and owner-occupiers alike, so there is no argument for denying the right to buy here. Is my noble friend Lord Ingleby and those who support this amendment really arguing that an extra room, or a downstairs shower or toilet are really substantially different features? No, I do not believe that that argument can be sustained. Your Lordships do not need to take my word for it. May I refer you to legal precedent? In the interesting case of Freeman v. Wansbeck District Council last year, the Court of Appeal ruled that a downstairs lavatory installed in a council house for the use of a disabled child was not a feature that rendered the house a substantially different dwelling.

Thirdly, I think it is very important indeed that whatever distinction we draw in the right to buy legislation between properties that can or cannot be bought is not only clear and fair, but is seen to be clear and fair by those affected. The correspondence we have had from disabled tenants suggests that there is a clear perception of the difference between purpose-built and adapted dwellings, and only in respect of the latter do tenants feel strongly that they are being unjustly denied the right to buy. I do not believe that the average disabled tenant would understand, and I certainly do not know, how an extra room or additional toilet facilities would make his home "substantially different" from those of other tenants who have the right to buy.

The overwhelming impression we have is that many disabled tenants in adapted dwellings are willing to buy and are prepared to pay a fair price. That price would, of course, reflect the market value of the property including the adaptation—and the "cost floor" rules would, of course, apply if the expenditure had been incurred since 1974. I do not believe that we should go further.

Perhaps I may say this in answer to some of the many points which have been made. First, I am grateful for the point which the noble Lord, Lord Northfield, made. I suspect, however, that the discount is not the major point here. The major point here is the extent to which a dwelling is adapted so that it stays within the general totality of the stock, and is available to the people concerned. My noble friend Lady Masham said that we should build more houses for the disabled, and I do not think one would quarrel with that. She asked me how easy it is to get someone out if a disabled person dies. The answer is that that is a ground for repossession, but it may be necessary to go to the court to get it. But it is a ground on which a court will grant repossession.

The right reverend Prelate the Bishop of Norwich hoped that the Government would have sympathy on this point. I should like to assure him that we very much have sympathy. This is a matter which I thought the noble Lady, Lady Saltoun, put very fairly, when she said that there are different points of view about it. The suggestion which I should like to make is exactly the one that she made; namely, in an attempt to accept that there are points of view, that there is a case for those who are disabled not to be discriminated against and an equal concern about the availability of this accommodation, I propose, if my noble friend Lord Ingleby is agreeable, that the Government should take this away and be prepared to consider bringing back at Report stage an amendment that would give a landlord the right to impose pre-emption convenants on the sale of dwellings adapted for the disabled.

This would operate very much on the same lines as those proposed for non-sheltered elderly persons' dwellings under Clause 7. It is indeed a compromise, but in a situation like this that is probably a fair solution. If my noble friend Lord Ingleby feels able to do that, then I shall he glad to undertake to bring it back in that way.

Baroness Birk

I was interested to hear what the Minister would say on this amendment and he has certainly said it. He talked, first, about perpetuating a sense of injustice and I agree that there is some truth in that. There is a certain amount of discrimination, but that is brought about because of the law of supply and demand. If there were enough dwellings for the disabled, either purpose-built or adapted, there would not be any question of having a right to buy. This is not a question of whether or not one should have a right to buy.

If I may try to answer the second question—and I think that the noble Lord, Lord Molson, answered one of the questions put by my noble friend Lord Northfield—it was: if there were tenants before adaptations took place, why can they not then buy and will they not feel aggrieved? It is the same sort of point as that made by the Minister when he said that people would feel that they could live fuller and more independent lives if they were able to buy their houses, rather than have them adapted for their disability and not be able to buy. Those of us who are extremely lucky not to be disabled would have to ask most disabled people whether they prefer to live in a house which they own but which has none of the adaptations that improve the quality of their life rather than in a house which has been adapted for disabled people and which gives them security of tenure, although it does not give them ownership of the house.

The Minister asked what was meant by "major adaptations". The noble Viscount and the other co-signatories to the amendment were delighted by what the noble Lord, Lord Broxbourne, had to say about the drafting. We were very worried about it. The Minister prayed in aid "substantially different". We had this argument about old people's dwellings when we discussed the Housing Bill 1980. The House was influenced by the fact, which many of us pointed out, that the use of the phrase "substantially different" would mean a heyday for lawyers and long delays and would probably get us nowhere. The noble Lord said that a downstairs lavatory would not be considered to be a substantially different feature. If it were a lavatory alone, this would probably be so and I could understand it. But that is not what the amendment says. It refers to: (ii) the construction of an additional bathroom with a water-closet; (iii) the removal or relocation of internal walls in conjunction with the relocation of a bathroom, fixed bath or shower or water-closet". Therefore, the adaptations are very much greater than simply a downstairs lavatory.

The noble Lord, Lord Swinfen, touched on the point that if, as the Government have quite rightly said, dwelling-houses have had these features since they were constructed, it seems to be quite illogical not to accept an amendment which refers to these major adaptations. Adaptations of the nature that we have put down, and which could be even larger and more costly, could cost almost as much as a purpose-built house. If these houses are sold with an extra bathroom downstairs there may not have to be a great deal of adaptation. What we are concerned with has got nothing to do with discounts, principles of faith, or anything else. The four of us who have put down our names to this amendment do not often agree on other matters in the Division lobbies. This is a case of making sure that dwellings which have been adapted in this way stay within the pool of dwellings for the disabled. It is also to ensure that local authorities and the other organisations who put both money and work into these buildings will know that they will be doing it for the disabled and that these dwellings will be used in perpetuity by the disabled.

The Minister spoke about coming back with preemption. We do not believe that this is the answer. That point was made when we discussed the 1980 Bill and it was turned down as far as the elderly are concerned. The noble Lord has not explained how pre-emption would work. I do not know whether it means that as soon as somebody dies or moves from the house, whoever inherits it would have the right to it. I should have thought that is how it would work. Pre-emption would exert itself only if the house or flat came up for sale. Again, this is very uncertain. First, we do not know whether it will. Secondly, the cost of buying back a house which has already been adapted to a large extent in this way will be very high for local authorities. I should not have thought that it was a satisfactory solution. Like other noble Lords, I do not understand why the Government cannot accept something which we have already restricted to a very great extent.

Lord Bellwin

I do not want to draw out the debate, but I do not agree with the noble Baroness. When we speak about supply and demand, we pre-suppose that dwellings which are bought are lost. As with any other right to buy, how can it be said that if a disabled person who lives in a home as a tenant buys it and continues to live in it as the owner-occupier, the dwelling is lost to the availability of the housing pool for disabled people? It is just not so. What about all the thousands of pounds that the Government give in grants for the conversion and the adaptation of homes for this purpose? I recognise more clearly than does the noble Baroness the fact that there are different points of view. I am not sticking rigidly to the Government's point of view. I am taking the very fair suggestion—I had it in mind to do so and was glad that the noble Lady, Lady Saltoun, made the same point—that we should come back with an amendment to give preemption rights to local authorites. If the person who has bought the house wishes to sell it, or if anybody else wishes to sell it, the local authority will have the right to buy it back. There can be no question, therefore, of it being lost to the pool of dwellings. I do not accept, however, that it will be lost. Nevertheless, accepting that there is another point of view, the Government are prepared—and I hope it will be felt that they are being fair about this—to take that line in this case.

Baroness Fisher of Rednal

Could the noble Lord tell us what will be the buy back price that the local authority will have to pay if we agree to pre-emption? Will it he the value of an extended house, which means the value of the property and the improvements which have already been paid for once?

Lord Bellwin

The noble Baroness makes a very fair point. I should like to consider it and tell her when we bring the matter back at Report. It is no good the noble Baroness shaking her head and saying, "No". Nobody knows yet what we shall say. That is what we intend to do when we bring it back at Report.

Lord Evans of Claughton

Can I inquire of the noble Lord the Minister how it can be ensured that a house which has been bought for use by a disabled person will continue to be used by disabled people in the future? Will estate agents say that they will sell these houses only to people who can show that they have a major disability? As somebody who has dealt with property all his life, I do not believe that to be a practical proposition. Secondly, there is a certain meretricious attraction in this suggestion. I am not suggesting that the noble Lord is putting foward the idea of a pre-emption right in order to dazzle the movers of the amendment into a false sense of security, but this pre-emption right will not be of much value because of the very severe limitations which Her Majesty's Government are imposing upon public expenditure in every sector.

Lord Bellwin

The question of estate agents does not arise. It is the local authority—the landlord—who, as previously, would have the pre-emption right to buy back. It does not apply to estate agents.

Lord Swinfen

Before the noble Lord sits down, what would be the position where the disabled purchaser is survived by an able-bodied spouse who then takes out all the special features?

Lord Bellwin

It would depend on the extent of the original adaptation. We are speaking of homes upon which considerable sums of money have been spent. This almost touches upon the debate as regards the right to buy, the elderly, and the rest generally. The fact is that we are speaking of what happens to that dwelling, who occupies it, who will continue to occupy it and who will have the right to buy. We are told that profits will be made after the person dies. That is one side of the case. Surely some credit must be given to the other side of the argument which was put forward by my noble friends Lady Lane-Fox and Lady Masham of Ilton. We are trying to look at this matter fairly and properly. There is another side to the argument. Disabled people are disadvantaged and are discriminated against. We are trying to draw a balance between that and recognising that there is a case on the other side. I believe that our proposal is a very fair one, and I hope that my noble friend Lord Ingleby will feel the same.

Lord Kaldor

The Minister referred earlier to the law of supply and demand and said that just because a property has been acquired by a disabled person, it is thereby withdrawn, so to speak, from the available houses for disabled people—whereas it is perfectly possible for the house to be sold to another disabled person. That is possible, but it is also possible that the house will be bought by a non-disabled person. That is, unless the noble Lord assumes that disabled people by their very nature have more purchasing power than non-disabled people.

Lord Bellwin

With great respect, the noble Lord just was not listening. I am talking about giving a pre-emption right. A pre-emption right means a right of the local authority to buy back at the exclusion of somebody else who might buy the property back. There is a whole difference.

Baroness Seear

The Minister has not answered this question: if the disabled person leaves the house to an able-bodied spouse or son, does that spouse or son have to offer it to the local authority for sale or may they keep it? If they can keep it, the house has gone out of the stock for the disabled.

Lord Bellwin

That is a fair point, and we will have to think about it.

Noble Lords

Oh!

Lord Bellwin

I thought we were talking about this seriously, and we are talking about it seriously. If the family continue to live in the house—and this point has been made, and it has been made by my noble friend Lord Swinfen—as opposed to selling the house again, the argument being that it is then lost to the disabled community (and that is the point the noble Baroness is making), then that is a point we shall have to think about. When we come back at Report, we may have a view on that. I do not want to decide today what it will be. If what we come hack with is not acceptable to the noble Baroness and others, then they will know what they have to do. But to decide now is to decide not knowing what the offer is. I believe that pre-emption is the only fair way to take account of the problems and real anxieties felt by a whole sector of the community. Why are we so intent on discriminating against people who are already discriminated against in so many other ways? I am astonished that this is the feeling of some of your Lordships.

Lord McIntosh of Haringey

I, too, believe that this matter should be treated entirely seriously. But to put it kindly, the Minister has not completed the case for the pre-emption argument. It is the question of the price, to which the noble Lord refused to reply, that concerns me at this time. If the price is that at which the disabled person bought the property, then the disabled person will not get any benefit from that purchase. The disabled person will be discriminated against in just the way that the Government are complaining about now.

If the price of the property is significantly higher than that at which it was bought, then the local authority or the landlord will have to pay a higher price for adaptations or improvements which were incorporated for the benefit of the disabled. There is no escape from that dilemma. Either the price is the same—in which case there will be no benefit to the disabled person—or the price will be significantly higher—in which case the authority will be losing and its incentive to continue providing accommodation for the disabled will be weakened.

Viscount Ingleby

I have talked to a number of tenants of these houses. Not one of them expressed any sense of grievance to me at not having the right to buy. Indeed, the Minister in a letter informed me that he had received only 100 representations—or a figure of that order—about this matter. Many of them would of course have been concerned with minor adaptations rather than with the major adaptations about which we are talking at this time. Indeed, several of the tenants went so far as to say that in their view when they no longer needed the houses they should be available for other disabled people. This is the basic question we are discussing. I am not very impressed with the pe-emption arguments but certainly we could listen to them at the next stage. At this stage, I propose to press my amendment.

5.35 p.m.

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

Their Lordships divided: Contents, 136; Not-Contents, 104.

DIVISION NO. 2
CONTENTS
Airedale, L.	Hale, L.
Ardwick, L.	Hampton, L.
Attlee, E.	Hanworth, V.
Aylestone, L.	Harris of Greenwich, L.
Banks, L.	Hatch of Lusby, L.
Beaumont of Whitley, L.	Hayter, L.
Beswick, L.	Henderson of Brompton, L.
Birk, B.	Henniker, L.
Bishopston, L.	Houghton of Sowerby, L.
Blyton, L.	Hughes, L.
Boothby, L.	Hutchinson of Lullington, L.
Boston of Faversham, L.	Hylton, L.
Bottomley, L.	Hylton-Foster, B.
Brockway, L.	Ingleby, V. [Teller.]
Brooks of Tremorfa, L.	Irving of Dartford, L.
Broxbourne, L.	Jeger, B.
Bruce of Donington, L.	Jenkins of Putney, L.
Burton of Coventry, B.	John-Mackie, L.
Caradon, L.	Kaldor, L.
Carmichael of Kelvingrove, L.	Killearn, L.
Chichester, Bp.	Kilmarnock, L.
Chitnis, L.	Kinloss, Ly.
Cledwyn of Penrhos, L.	Kinnoull, E.
Collison, L.	Kirkhill, L.
Congleton, L.	Lawrence, L.
Cornwallis, L.	Listowel, E.
Craigavon, V.	Liverpool, Bp.
Croft, L.	Llewelyn-Davies of Hastoe, B.
Cullen of Ashbourne, L.	Lloyd of Hampstead, L.
David, B.	Longford, E.
Davies of Penrhys, L.	Loudoun, C.
Dean of Beswick, L.	Lovell-Davis, L.
Delacourt-Smith of Alteryn, B.	McGregor of Durris, L.
	McIntosh of Haringey, L.
Denington, B.	Mackie of Benshie, L.
Diamond, L.	McNair, L.
Donaldson of Kingsbridge, L.	Mishcon, L.
Donnet of Balgay, L.	Molson, L. [Teller.]
Elliot of Harwood, B.	Monson, L.
Elwyn-Jones, L.	Mulley, L.
Elystan-Morgan, L.	Nathan, L.
Ennals, L.	Nicol, B.
Evans of Claughton, L.	Northchurch, B.
Ewart-Biggs, B.	Norwich, Bp.
Ezra, L.	Ogmore, L.
Falkender, B.	Oram, L.
Fisher of Rednal, B.	Phillips, B.
Fortescue, E.	Pitt of Hampstead, L.
Gaitskell, B.	Ponsonby of Shulbrede, L.
Gallacher, L,	Prys-Davies, L.
Gladwyn, L.	Raglan, L.
Glenamara, L.	Rochester, Bp.
Graham of Edmonton, L.	Rochester, L.
Grantchester, L.	St. Davids, V.
Gregson, L.	Seear, B.

Seebohm, L.	Stoddart of Swindon, L.
Sefton of Garston, L.	Stone, L.
Segal, L.	Strabolgi, L.
Selkirk, E.	Strathspey, L.
Serota, B.	Swinfen, L.
Shackleton, L.	Taylor of Blackburn, L.
Shannon, E.	Taylor of Gryfe, L.
Shinwell, L.	Tordoff, L.
Southwark, Bp.	Underhill, L.
Spens, L.	Wallace of Coslany, L.
Stallard, L.	White, B.
Stedman, B.	Wigoder, L.
Stewart of Alvechurch, B.	Winstanley, L.
Stewart of Fulham, L.

NOT-CONTENTS
Abinger, L.	Lyell, L.
Airey of Abingdon, B.	McAlpine of Moffat, L.
Alexander of Tunis, E.	McAlpine of West Green, L.
Allerton, L.	Mackay of Clashfern, L.
Auckland, L.	Macleod of Borve, B.
Avon, E.	Mancroft, L.
Belhaven and Stenton, L.	Margadale, L.
Bellwin, L.	Marley, L.
Beloff, L.	Masham of Ilton, B.
Belstead, L.	Massereene and Ferrard, V.
Blake, L.	Maude of Stratford-upon-Avon, L.
Boardman, L.
Bruce-Gardyne, L.	Merrivale, L.
Cairns, E.	Mersey, V.
Campbell of Alloway, L.	Morris, L.
Carnegy of Lour, B.	Mottistone, L.
Cathcart, E.	Mowbray and Stourton, L.
Cockfield, L.	Murton of Lindisfarne, L.
Coleraine, L.	Nugent of Guildford, L.
Cottesloe, L.	Onslow, E.
Cox, B.	Orkney, E.
Croham, L.	Pender, L.
Daventry, V.	Perth, E.
De Freyne, L.	Portland, D.
Denham, L. [Teller.]	Radnor, E.
Dilhorne, V.	Rankeillour, L.
Drumalbyn, L.	Renton, L.
Effingham, E.	Richardson, L.
Elgin and Kincardine, E.	Ridley, V.
Ellenborough, L.	Rochdale, V.
Elton, L.	Salisbury, M.
Enniskillen, E.	Saltoun, Ly.
Erroll, E.	Sandford, L.
Faithfull, B.	Skelmersdale, L.
Fraser of Kilmorack, L.	Stamp, L.
Gainford, L.	Stodart of Leaston, L.
Geoffrey-Lloyd, L.	Strathclyde, L.
Glanusk, L.	Sudeley, L.
Gray of Contin, L.	Suffield, L.
Hailsham of Saint Marylebone, L.	Swansea, L.
	Swinton, E. [Teller.]
Halsbury, E.	Terrington, L.
Home of the Hirsel, L.	Thorneycroft, L.
Ingrow, L.	Tranmire, L.
Kaberry of Adel, L.	Trefgarne, L.
Kemsley, V.	Trenchard, V.
Kilmany, L.	Trumpington, B.
Kimberley, E.	Tryon, L.
Kinnaird, L.	Vaizey, L.
Lane-Fox, B.	Vaux of Harrowden, L.
Lauderdale, E.	Vickers, B.
Long, V.	Wise, L.
Lucas of Chilworth, L.	Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.

5.45 p.m.

Lord Bellwin moved Amendment No. 11: Page 3, line 11, leave out from ("dwelling-houses") to ("those") in line 12 and insert ("in order to assist").

The noble Lord said: I shall briefly explain the amendments to Clause 2 which relate to sheltered housing. I shall reserve my more general remarks about housing for the elderly until after your Lordships have spoken to the next amendments on the Marshalled List.

Sheltered housing for the elderly and physically disabled has always been excluded from the right to buy under paragraphs 3 and 4 of Schedule 1 to the 1980 Act. These amendments will not alter that basic rule. They will, however, clarify the application of the rule and extend it in one important respect. First, the extension. New paragraph 3A provides that sheltered accommodation for the mentally disordered will in future be excluded from the right to buy. Although there are not many schemes of this kind, I believe it will be generally agreed that these schemes should be excluded from the right to buy along with schemes for the disabled and the elderly; and I do not think I need say anything more about that particular point.

Secondly, the clarifying amendments. Clause 2(2)(b) of the Bill already amplifies paragraph 3 of Schedule 1 to the 1980 Act, to make clear that sheltered accommodation for the physically disabled is excluded from the right to buy. It has been put to us that the wording used there is unduly restrictive in one respect, in that it requires that the "social service or special facility" provided for the residents must be "for the only or main purpose of assisting those persons". There are cases where a sheltered scheme for the disabled is sited alongside another unit such as a residential home or a day centre for the disabled and common facilities are shared by both residents and non-residents. We should not want the sheltered accommodation brought within the right to buy simply because the common facilities are shared in that way. Hence our amendment which would remove the words "for the only or main purpose".

I should have said earlier that I am also speaking to Amendments Nos. 12, 14 and 144.

Amendment No. 12: Page 3, line 12, at end insert— ("2A) For paragraph 4 of that Part of that Schedule there shall be substituted the following paragraphs— 3A. The dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons who are suffering or have suffered from a mental disorder (within the meaning of the Mental Health Act 1983) and a social service or special facilities are provided in order to assist those persons. 4. The dwelling-house is one of a group of dwelling-houses which are particularly suitable, having regard to their location, size, design, heating systems and other features, for occupation by persons of pensionable age and which it is the practice of the landlord to let for occupation by such persons or for occupation by such persons and physically disabled persons, and special facilities are provided in order to assist those persons which consist of or include either—

1. (a) the services of a resident warden; or
2. (b) the services of a non-resident warden, a system for calling him and the use of a common room in close proximity to the group of dwelling-houses." ")

Amendment No. 14: Page 3, line 19, leave out from ("the") to ("above") in line 20 and insert ("amendments made by subsections (2) and (2A)") Amendment No. 144: Page 90, line 58, at end insert ("The repeal of paragraph 5 of Part I of Schedule 1 to the Housing Act 1980 has effect subject to section 2(4) of this Act.")

Lord Simon of Glaisdale

May I ask the noble Lord whether the amendment at the top of page (3) is Amendment No. 12? I think my copy of the Marshalled List may be defective.

Lord Bellwin

Yes, that is so. I turn now to new paragraph 4, which deals with sheltered housing for the elderly. It may be helpful if I first quote in full the terms of the present paragraph 4. This says: the dwelling-house is one of a group of dwelling-houses, which it is the practice of the landlord to let, for occupation by persons of pensionable age, and a social service or special facilities are provided in close proximity to the group of dwelling-houses, for the only or main purpose of assisting those persons". The new definition introduces three main changes. First, the present paragraph 4 includes no requirement that the individual dwellings should be physically suitable for the elderly. The new definition will remedy that. The same test of suitability will have to be applied as is to he applied under Clause 7, in deciding whether a pre-emption covenant can be imposed, when a non-sheltered dwelling for the elderly is sold.

Second, it has been put to us—notably by the Royal Association of Disability and Rehabilitation (RADAR)—that it is not uncommon for landlords to accommodate disabled people within a sheltered scheme for the elderly. Under the present definition, which refers only to the elderly, it is not absolutely clear that all such schemes would fall outside the right to buy. We think they should be excluded, and this new definition will remove any doubt on the point.

Finally, we have expanded the reference to, a social service or special facilities", in the present definition to clarify what facilities we expect to be provided in a sheltered scheme for the elderly. This is probably the most important change we are making, and I should explain briefly why we think it is necessary.

The traditional form of sheltered scheme is the group of dwellings with resident warden. I do not think there will be any disagreement that such schemes should he excluded from the right to buy. New paragraph 4(a) provides for that. But times are changing. For various reasons—partly economy, partly new trends in methods of caring for the elderly—resident wardens are becoming less common. Instead, old people's dwellings are increasingly being fitted with intercom or call systems, by means of which the residents can summon help from a mobile warden service not tied to any particular group of dwellings.

Call systems of that kind can, I am sure, be of great help to elderly people. But they are not a feature of grouped, sheltered housing only. The same call system and mobile warden service can serve a large number of dwellings scattered over a wide area. Indeed, we know that some local authorities now have hundreds, if not thousands, of houses throughout their areas fitted with call facilities of this kind. They can of course be fitted in privately owned dwellings, as well as in council owned housing.

We have concluded that the presence of a call system as such is not sufficient to qualify a scheme as a sheltered housing scheme. Where the warden service is not a resident service, therefore, we have provided, in new paragraph 4(b), that there must also be a common facility in the form of a common living room—a lounge, TV room or something similar. This is the facility most frequently provided in traditional sheltered schemes.

We have consulted the local authority associations in drawing up this new definition. They have argued—as has Age Concern—that its effect will be to extend the right to buy to some sheltered schemes at present excluded. We do not think that is the case. It may be that some landlords have regarded some groups of dwellings with neither a resident warden, nor a common room, as excluded under the Act. But the definition which has been in force since 1980 has required that, a social service or special facilities must be provided in close proximity to the dwellings". If there is no warden and no common room, what service or facilities are provided in close proximity to the group of dwellings which can properly bring the dwellings within the definition of sheltered housing? Our view is that we are not significantly altering the scope of the definition in a way which will bring any truly sheltered scheme within the right to buy.

I think that our intentions regarding the extensions to the exclusions and to the clarification to which I have referred illustrate our wish to be absolutely fair about this matter. Equally, I hope it will be accepted that our new definition of, social service or special facilities", is also fair and logical.

There are also two minor consequential amendments, one to subsection (4) of Clause 2 and the other to Schedule 11. I beg to move.

Baroness Birk

May I thank the Minister very much for his explanation of this clause. It is clear in the drafting but it was not quite clear what was meant by it. I agree with what he said at the beginning. My noble friends and I should like the opportunity to read what he has said, and if we have any points that we want to raise, such as on the common room, to come back on Report.

Baroness Fisher of Rednal

May I thank the noble Lord the Minister. This is one of the points that I raised on Second Reading. I feel sure that the points that I raised were echoed by many local authorities with similar schemes throughout the country. We should welcome the Government's attitude. We hope that the people leaving our mental hospitals and coming into the community will also be accommodated under these arrangements for care in the community. Following what I said on Second Reading, I welcome the proposal.

On Question, amendment agreed to.

5.54 p.m.

Lord Bellwin moved Amendment No. 12:

[Printed earlier: col. 1200.]

The noble Lord said: I beg to move.

Lord Broxbourne

May I make a few comments on Amendment No. 12 which I understand is now the subject of discussion and which deals with the very important matter of the right to buy? This is the third kite at the cherry within a relatively short distance of time—the provisions in the Housing Act 1980, the provisions in the Bill as given at Second Reading on 30th January and the provisions produced in Amendment No. 12.

Before putting the few comments and queries that I have on Amendment No. 12, which are mainly of a drafting nature, may I say one particular word of welcome? I was the Minister responsible for introducing and putting on the statute book after long and laborious days what is now the Mental Health Act 1959. My noble friend Lady Faithfull looks with some surprise, as if to wonder why I am still alive. If she looks up the relevant passages in Hansard, they will confirm what I say. Therefore, I should like to give a special word of welcome to new paragraph 3A and its extension to mental disorder.

The 1959 Act proclaimed what was then a fairly novel principle of the duality of health—the so-called psychosomatic elements of health. It was, I think, an omission from the original Act—the Housing Act 1980—and from the Bill as read a Second time that there was no reference to that. I am grateful, as I am sure will be many others, that that omission has now been rectified.

I come briefly to comment on paragraph 4 of Part I of Schedule 1 to the Housing Act 1980. That paragraph has been read, albeit somewhat rapidly, by my noble friend the Minister, evidencing perhaps some natural desire to get this Bill over and done with in view of the circumstances and events of today. The Bill, as read a second time, at Clause 2, although amending paragraphs 1, 2 and 3, and repealing paragraph 5, did not at that stage amend paragraph 4 in regard to the elderly; and my noble friend the Minister has very properly introduced this amendment in an attempt to remedy that deficiency.

In the Housing Act 1980 there were only two criteria for excepting from the right to buy. First, one had to establish that it was the practice of the landlords as to letting; and, secondly, there was the provision of social services or special facilities. To these the amendment adds a third criterion which has indeed pride of place: The dwelling-house is one of a group of dwelling-houses which are particularly suitable, having regard to their location, size, design, heating systems and other features, for occupation by persons of pensionable age". I am certainly pleased, if somewhat surprised, to find this addition, particularly in view of the observations of my noble friend the Minister in regard to matters of design in the Second Reading of this Bill. On 30th January at col. 455 of Hansard he said: The assumption is that such dwellings can be distinguished from others by the presence of special, and clearly identifiable, physical features. But in fact that is simply not the case". Then he went on: I would argue [there is] no way of refining the present rule in order to produce a more satisfactory test of what constitutes an elderly person's dwelling". Presumably the presence of the word "design" means that my noble friend has undergone a welcome conversion and no longer thinks that it is an impossible concept to equate design with the features of elderly persons' dwellings.

The amendment goes on to refer to, design, heating systems and other features". Perhaps my noble friend will indicate what kind of features these other ones will be. No doubt he has regard to the perils of the ejusdem generis rule, which would limit their interpretation. Can he also tell the Committee what will be the position where there is a subsequent modification of design after the material date?

The remaining criteria are substantially similar to those in paragraph 4 of Schedule 1 to the Housing Act 1980, with the additional words specifying more precisely, and helpfully, what "special facilities" I means. On the face of it this is good but presumably, as I am embarked upon this Latinity there is no danger of the exclusio alterius rule coming to limit the application here. The other change that I note is the omission of the words "a social service", and perhaps my noble friend the Minister can give us the reason for that.

I come to my final question. We now have three-and-a-half years' experience of the 1980 Act; that is, from eight weeks after 8th August 1980, which by Section 153 of that Act, was the date of its coming into operation. During the Second Reading my noble friend the Minister said that there had been no challenge of paragraph 5 decisions—that is, paragraph 5 of Schedule 1 to the Housing Act—in the courts. Does that mean that there has been no interpretation at all in the courts in those three-and-a-half years of any of those key phrases in the statute? The kind of phrases I have in mind are, "the practice of landlords", "group of dwelling houses", and one or two more.

If I look at the Bill with the eye of a lawyer rather than a legislator, I think that it would not be beyond the bounds of ingenuity and possibility to raise queries as to the interpretation and application of some of these phrases. Whether that has yet been done I do not know, but I should be grateful if the Minister could address himself to these few points which I have raised.

Lord Bellwin

My noble friend is too modest when he talks about "these few points". There are just two observations that I want to make, and then, as the noble Baroness very fairly said she would want to study what I have said, I, too, shall want to study what my noble friend has said. If it is necessary, as I am sure it will be, to talk about this matter again, I should be glad to reply to my noble friend on that occasion, or possibly write to him beforehand, because at the moment notes are coming to me too quickly for me to refer to them and I should prefer to handle this matter in an orderly manner.

However, there is one thing I should like to say. My noble friend pointed out that we have introduced a design test into paragraph 4. I would point out that that is correct, but that is the provision which deals with the sheltered housing. My remarks on Second Reading were concerned with paragraph 5, which we are to debate very shortly.

As to whether or not the wording has been tested in the courts, to the best of my knowledge the answer is that, no, there has been no test in the courts of paragraphs 4 or 5. Indeed, that was one of the points that I made when I spoke on Second Reading in order to illustrate the strength of the case. But clearly I want to consider carefully the points that my noble friend has raised and possibly write to him as well as make further reply as we proceed through the various stages of the Bill.

Baroness Fisher of Rednal

Before the noble Lord sits down, and bearing in mind that he is going to look at what has been said, I should like to draw his attention to the phrase "persons of pensionable age". We have an Equal Opportunities Commission and I wonder whether we should be discriminating against males if we were to leave in the phrase "persons of pensionable age". I should not want the males to be handicapped in any way.

Lord Bellwin

There is no way I would concur in discriminating against males.

Baroness Denington

While we are talking about the word "design" I should very much like to discharge an undertaking which I gave to the noble Lord the Minister when he was winding up the Second Reading debate. At that time he rather challenged me. I should like to quote from the Official Report of 30th January. At col. 510 the noble Lord, Lord Bellwin, said: We talk about a house specially designed for the elderly, but I do not know of a house specially designed for the elderly". A few lines further on he said: There may well be houses—if the noble Baroness, Lady Denington says there are such houses, I shall now give way for her to define exactly a house built for the elderly". Truly I replied as I did because I did not think that I had made such a reference in my speech, and in fact when I read it I found that I had not. So that is why I replied: My Lords, it would be in the interests of the House if I were to wait until we deal with the amendments to the Bill". I should like to say that I have pursued this point and I have consulted my friends in the RIBA. They assure me that the word "design" not only covers the facade and the interior planning of the dwelling, but also embraces its setting, its aspect, and in a large scheme, its relation to other dwellings in the scheme and to shops and so on. I must say to the noble Lord that I have always understood that to be the interpretation of the word "design", and I preferred to make the point at this stage rather than in the speech that I propose to make on the next amendment.

Lord Bellwin

I hear what the noble Baroness says. I should not want to get into a semantic discussion on this question. It was not quite the point that I had in mind when I raised the matter but, frankly, since we have so much to deal with, if' the noble Baroness will allow me to say so, I think we should perhaps proceed. We shall probably come to that point in another context on the next amendment.

On Question, amendment agreed to.

[Amendment No. 12A not moved.]

6.8 p.m.

Baroness Birk moved Amendment No. 13:

Page 3, line 13, leave out subsection (3) and insert— ("(3) For paragraph 5 of Part 1 of Schedule I to the 1980 Act (circumstances in which the right to buy does not arise) there shall be substituted the following paragraph— 5. The dwellinghouse is designed or specially adapted to make it suitable for occupation by persons of pensionable age, and it has always been the practice of the landlord to let the dwellinghouse for ocupation by persons of pensionable age; and in this paragraph "designed or specially adapted" means accommodation built or adapted in accordance with the principles of advice and guidance on the design of elderly persons' accommodation issued by the Secretary of State and available to landlords at the time of construction or adaptation." ").

The noble Baroness said: We are now to discuss an issue which transcends party political and other sectional boundaries. It is an issue which we considered only three-and-a-half years ago, in July 1980, when we were discussing the Housing Bill, which became the Housing Act 1980. At that time I really would not have thought that we should now again be discussing the question of whether the elderly should be exempted from the right to buy. As noble Lords will remember, at that time we in your Lordships' Chamber, by a decisive vote of nearly two to one, put in the exemption of specially designed or adapted dwellings for people of pensionable age which it is the practice of the landlord to let for occupation by such persons. The amendment gained the support of many noble Lords opposite, both temporal and spiritual, including the late Lord Amory.

What then happened? One would have thought that that was the end of the question, certainly for another decade at least, or until the entire housing situation in the country had changed very largely for the better. However, just before Christmas, on Report stage of this Bill in another place, the Government abruptly reversed that clear-cut decision of your Lordships' House and reintroduced the proposal to extend the right to buy to all non-sheltered old people's accommodation. There was no time for proper discussion and several Conservative Back-Bench Members of Parliament expressed their bewilderment and dislike of what had been done. The reasons that convinced a sizeable majority of your Lordships' House in 1980 have not changed now, except to make the exemption more necessary and more urgent. Even more people than in 1980 are living to an older age. The cuts in public expenditure are more severe. Housing has taken the largest share of these cuts. Fewer houses, especially those with particular adaptations, are being built. In the second half of 1980, 7,772 dwellings specially designed for the elderly were completed. In the first half of last year, the figure was just 3,497, less than hall. An authority has to sell at least five houses in order to build one new house and that does not include special design, which costs more.

The trend, socially and economically, these days is to help people and encourage them in every possible way to live in their own home. That means that their own homes should be both comfortable and adapted for them to live in. To achieve this, there must be a pool of rented accommodation always available for the elderly. In the same way that this principle applied to the previous amendment on the disabled, may I say again that if there was no shortage in supply in both urban and rural areas, then there would be no need to exempt those elderly who want to buy their own homes. But there is a great shortage. It has been reliably estimated that there are about 300,000 people on the waiting list for elderly people's accommodation. In small rural areas, the situation is particularly bad. The demand may be in double figures, but the supply is in single figures—or in no figures at all. The smooth working of the 1976 Rent (Agriculture) Act depends upon the existence of a pool of rented accommodation for retired agricultural workers.

A group of rural organisations such as the Council for the Protection of Rural England, the Country Landowners' Association, the National Association of Local Councils, the National Council for Voluntary Organisations, the National Farmers' Union, the National Federation of Women's Institutes, the National Federation of Young Farmers' Clubs, the Agricultural and Allied Workers' National Trade Group and the Standing Conference of Rural Community Councils would not normally—with the exception of the Agricultural and Allied Workers—find themselves within huffing distance of my noble friends and myself. Yet they support the amendment. In addition, it is supported by RADAR, the organisation for the rehabilitation of the disabled, the National Housing and Town Planning Council, the AMA, the Association of District Councils, Age Concern and the National Town Planning Association. I could go on endlessly, but I have already given far too long a list.

This all-party amendment is, I have to say with regret, more restrictive than the one that was passed in 1980 since it provides that the dwelling-house has always been let for occupation by persons of pensionable age rather than that it is the practice of the authority. This was done very deliberately to try to meet the objections of the Government and to obviate the need for determination by the Secretary of State which was inserted in another place after our amendment had left here. The other place insisted on back council minutes being meticulously examined to ensure that the dwelling had not been let at any time to any one except a pensioner.

On Second Reading, the Minister said that the Secretary of State's determination in this field cost in the region of £150,000 a year. Under the more restrictive amendment that many of us are not particularly happy about but regard as better than what is in the Bill at the moment, this would he saved. In addition, the situation would be even clearer than under the old paragraph 5. The Government have made a great deal of the figures which show only a comparatively small number of appeals under that paragraph. Most have been successful. This is an argument. I would say, not for doing away with the paragraph but for tightening it up in the way that my friends and I myself, who have put our signatures to the amendment, are proposing.

It is clear that most tenants in these houses will be eligible to receive the maximum 60 per cent. discount because they will presumably have built up a long period of eligibility through living in either the one house or in other council or housing association housing. In buying their homes, they will be assisted in many cases by their children who will put up some of the money in anticipation of making a capital gain when they inherit. That is no judgment. It is just a question of fact. Indeed, Section 4 of the 1980 Act allows tenants to buy their home jointly with up to three others. With this sort of encouragement, there will naturally be a substantial demand.

Unfortunately, the restrictions that the Government have built into the scheme will be of little protection because local authorities will have the right to buy back within 21 years but only if the house is sold and not inherited and only at full market value. Most local authorities will simply not have the money. If, however, the children or whoever inherits, do not want to sell, certainly within the five years, then they can use these places in rural areas as second homes or let them as holiday accommodation. That may be something that they choose to do according to what circumstances suit them best.

There is another point which was raised on Second Reading but perhaps in another context by the noble Earl, Lord Selkirk. The noble Earl found that he had objection to what he felt was the bribe—I think that that was the word that he used—of the incentive of very high discounts which encourage people to take on commitments, as he put it, that they cannot then maintain. I fear that this is also applicable in the case we are now discussing. People are being encouraged to undertake something which often they find they cannot manage. Alternatively, it is being done for them by other people. Again the point arises that, as we need this stock of rented accommodation in order that more elderly people can use it, it is essential that this accommodation should be exempted, as I have already explained, in what would be almost a straitjacket way.

The Government clearly accept that there is a great danger that the whole pool of elderly people's dwellings will disappear. Otherwise, they would not be introducing the concession of pre-emption covenants in Clause 7, a little later in the Bill, where local authorities will have the right to buy back within 21 years, not the 10 years which was suggested in the 1980 Bill, but only, of course, if the house is sold, not if it is inherited, when it is up to the people who have it to do what they like with it. The local authority will have to pay the full market price and most of them will simply not have the money. Nor will they have the land or the money to be able to replace these dwellings. One of the important things about old people's dwellings is that they should be in towns, be near facilities, be near the shops, be near doctors, be near other people; and in the country they should be near transport, and it should be sheltered accommodation. Here I must say there is no validity, in our view, in exempting sheltered accommodation and not exempting accommodation which is for the elderly of pensionable age.

I do not think that the Government can possibly deny that this proposal must lead to a steady and substantial dropping out of accommodation to a very great extent from the pool of rented accommodation. Once these houses are sold they are lost to the elderly in need forever; they are not going to be replaced when their original purchasers have died. Statistics show that people do not live in these houses for many years. By the time they have managed to get one it is only a few years before they unfortunately either die, go into residential care or go to live with a relative.

It could be said that this is discrimination but again it is a discrimination which occurs through need, and where it is our job to look at legislation and decide what should be done for the benefit of the people who really are in need. This is what this amendment seeks to do.

In 1980 we took the lead and we did something which was very much appreciated all over the country. I can only say I had letters from people in voluntary organisations, from councillors and other people in Conservative councils in the country who wrote to say how pleased they were, how worried they had been and what a headache it had been for them. I hope that tonight we are going to repeat what we did in 1980. We were going to behave logically and compassionately. I hope we do what we did then, which is absolutely essential: to see that in this country we do preserve a pool of rented accommodation for those elderly people who need it.

6.22 p.m.

Lord Evans of Claughton

I should like briefly to support what the noble Baroness has said. She put the case I think exceptionally well and very clearly and it needs very few words of amplification. The case is very clearly made. It was made in 1980 and is equally true today.

I think the first thing I would say is we on these Benches are not opposed to the principle of the right to buy, but in some areas—and this is one of them—it is going far too far towards almost forcing people to buy accommodation very often when they are not themselves going to get the benefit of it. I can well understand the case where a middle-aged couple who have lived in a council house for some time would like to buy, take advantage of the very generous 60 per cent. discount and benefit from it when they resell it. I can see that that as a principle of a property-owning democracy is a perfectly sound and valid idea.

I do think in cases like this, where properties are specifically designed and used for the elderly, that windfall profits to their families of quite phenomenal amounts running into perhaps two, three or four hundred per cent. of the price paid, will come in a very early course not to the elderly people themselves who may have gone into homes or died but, as the noble Baroness has said, to the inheritors and members of the family, who will either sell the house and make a very considerable windfall profit which they have not earned by living in the house; or they will use it, if it is in an area of beauty such as Wales or the Lake District or other parts of the country as a holiday home or for letting to friends.

The problem is particularly bad, I think, in the country areas. This was touched on. There is very little accommodation of this nature in rural areas. Such little of it there is, is going to be very difficult to replace because of the restrictions there are on building in areas of natural beauty. One might find in a very short time indeed that such little accommodation for the elderly as there is in areas of natural beauty will have disappeared completely and be used as holiday homes or for some other purpose.

As far as old people's accommodation in towns and cities is concerned, I have lived in a large conurbation all my life and I think the most tragic feature of all is that very often the very worst accommodation is lived in by the old. The very worst possible accommodation in many parts of the area I used to represent on the local authority was occupied by people over 65 who had lived in the houses for perhaps very many years—usually private houses—and were now living in extreme squalor in the last days of their lives. If we take out of the accommodation provided in the past by the local authority for people of this nature and make less and less available, I fear it is not going to be replaced by the local authority because, as the noble Baroness said, it is very expensive to replace and there are heavy restrictions on public expenditure under this Government.

There will be even less accommodation available so that the elderly cannot live out their remaining days in the community they know among people they like. It seems to me these are two very serious points: the rural deprivation and the urban deprivation. I do beg your Lordships' Committee to restore the position as near as we can to the position we managed to persuade the House to accept in 1980 and to support the amendment.

Baroness Elliot of Harwood

I should like to support this amendment as well. This is, as I think the noble Baroness said, an all-party amendment. I am speaking now as someone who has spent 29 years on a county council, as chairman of the housing committee for quite a while, and chairman of the social welfare committee for I do not know how many years, and I know how difficult it can be to get the kind of accommodation that you want for old people. Far too often they have to go into community homes or old people's homes long before they need to do so for the simple reason that there is nowhere else for them to go. I fought all the time I was on the county council for accommodation for old people where they could live on their own and in a community, as the noble Lord, Lord Evans, said. We do not want them isolated. If they are in a rural area then we want them in the villages; if they are in towns, we want them to be part of the community and not isolated and pointed out as being in an area for old people. They are part of the community and we have to keep them as part of the community. It is very difficult to do so when there is a rising number of old people and a lower number of houses being built.

I realise that the economic situation is extremely difficult; I appreciate that and I understand it perfectly. However, the fact is that it is not going to be improved by losing the old people's houses on purchase or sometimes simply because they are very old and shabby—as Lord Evans said—and they just fall down and are not replaced. It is I think vital that we should put into this Bill that the old people have the same treatment and privileges as we have just been discussing for the handicapped and others. It is simply a question of treating them the same as you are treating other people in the community.

I hope the Government will realise that this is something we feel terribly strongly about, and we want to see that they get every facility and every help they can. If you allow the houses to be bought by people who are not old but who are just in a position to buy them, or if you allow them be bought to be sold at a much higher price, you are doing something which is going to injure the whole community. I hope that the Government realise that this is something about which we care tremendously.

The noble Baroness, Lady Birk, has mentioned a lot of organisations. I have not received as many letters as the noble Baroness, but I have received a good many; and certainly I have heard from all the agricultural organisations to which I belong. People feel very strongly about this matter. It is not a party matter. This amendment will improve the Bill. It has nothing to do with whether one is Conservative, Labour, Liberal or whatever. If this amendment will improve the Bill and make it more valuable, then I beg the Minister to consider it very carefully indeed.

6.31 p.m.

Lord Simon of Glaisdale

It is with very great temerity that I intervene in a Committee of such experts, particularly when your Lordships are exercising your expertise for the third time as regards this immediate area. Of course, as a Member for an industrial constituency, I had housing problems brought to me; but they were not at all the particular problems that arise on this amendment. Nevertheless, there are two reasons why I venture briefly to address your Lordships. The first is that I was a close ministerial colleague of the late Lord Amory for whom I had the most profound admiration and affection. It seems to me that the arguments which he advanced and which commended themselves to your Lordships in 1980, are just as cogent and just as unanswerable today as they were then.

The second reason is that by a quirk of local government reorganisation I find myself with Scarborough as my local authority, and the provision in the Bill gives Scarborough a particular problem. I say a "quirk" of reorganisation, because it was the Government's third thought. Their second thought was to do something that would disfranchise all the boys of Middlesbrough from playing cricket for Yorkshire, so that was very quickly dropped.

The position of Scarborough is that it has a rural hinterland. Both of the noble Baronesses have already covered the problem and the noble Lord, Lord Evans, I am sorry to say, did not include the North-East as one of the areas of outstanding beauty—he must come and see it. The other problem is that Scarborough is a particularly attractive seaside resort. So as long as the provision remains in the Bill where by the right of pre-emption does not apply when the vesting is under a will or under an intestacy, there is an almost overwhelming incentive on those who might inherit, to provide the money for the initial acquisition. The noble Earl, Lord Selkirk, gave an example of the type of figures that might be involved—an infinitesimal sum to procure a vast advantage.

My second view of the provisions of the Bill as a background for this amendment and the provision it seeks to amend, is that five years is far too short. I think that it was the noble Baroness, Lady Denington, who gave figures on Second Reading as regards the normal period of occupation. I was not sure whether she was talking about sheltered accommodation. I see that the noble Baroness is shaking her head. She said five to seven years. If that is right, and if it applies to this non-sheltered accommodation—and the noble Baroness is now nodding her head—then obviously a period of five years is much too short; it ought to be upwards of seven years—and probably well upwards of seven years.

The particular problem of a town like Scarborough is that it has a very high proportion of elderly people. The elderly population comprises 25 per cent. of the total population of the area, as against a national average of 16 per cent. Therefore, so long as the right to buy back, even at the full price, is prevented by a vesting, by will or on an intestacy, they are very rapidly going to see their stock of houses which are suitable for the elderly, disappearing and being let out as holdiay homes, rented out as holiday homes or just taken by people who, very sensibly, like living at Scarborough.

The noble Lord the Minister on Second Reading was inclined—and I think rightly—to play down the difference between accommodation that is suitable for the elderly, and accommodation that is suitable for other people. He is right in the sense of course that accommodation which is suitable for the elderly is likely to be perfectly suitable—indeed, attractive—to the ordinary people. But that is really an argument against the position that he was putting forward, because it means that there would be that additional incentive for the stock of houses that are suitable for the elderly, to pass out of stock and become available to the community generally.

It seems to me that the only argument against this provision is the argument that it discriminates against the elderly, and the noble Baroness, Lady Birk, accepted that. It seems to me that there are two reasons why that is acceptable, in addition to the reasons that have been given. The first is that the elderly who occupy this accommodation are already enjoying a favourable social benefit, and it is not extravagant to expect them to share it with others with similar disabilities. Secondly—and I think that this one is even stronger—one of the big arguments for the right to buy was that our present housing law, with its rent restrictions, is a positive disincentive to social mobility at a time when, with rapidly changing technology, we want to encourage social mobility. But that applies very strongly to the young; it does not apply at all to the elderly, the pensionable, who are in retirement. Therefore, so far as I am concerned, I shall support the noble Baroness in this amendment if she presses it to a Division.

The Earl of Caithness

I am not terribly pleased with the amendment because I do not think that it goes far enough. However, I have taken a great deal of note of what my noble friend Lord Bellwin has said and of the fact that he has found paragraph 5 of Schedule 1 expensive to administer and unsatisfactory in other ways. It was for that reason that I did not move my Amendment No. 12A. I should have liked that amendment to have been accepted by the Committee. However, I accept what my noble friend and others have said and therefore I will happily support this amendment because of my very great concern for the rural areas.

As the noble Baroness, Lady Birk, pointed out, in order to ensure the smooth running of the Rent (Agriculture) Act, we do need in the rural areas a supply—a pool—of rented accommodation so that the farming communities adjacent to the villages can continue to perform the duties expected of them. It is interesting to note that it is in these very areas that the sale of council houses has been the largest. The councils are selling more in the villages than they are in the towns. Therefore, the whole problem is now being compounded to a much greater extent than we thought could happen in 1980. In Clause 7 the Government have brought in some sort of brake whereby the landlord can purchase the property back within a period of 21 years. But, frankly, I do not think that any local authority will do this; I do not think that it is a feasible proposition. That is why I could not support my noble friend when he offered a similar type of arrangement on an earlier amendment, although on that occasion I abstained. I do not think that it would work in practice. I am very concerned about this clause and will support it in the Lobbies.

Lord Hatch of Lusby

As one who took part in the protection of the elderly in the 1980 Act, I think it only remains for me to underline one or two points that have already been made by previous speakers. However, I want to emphasise the fact that this is a non-party amendment, that it does not involve the principle of the right to buy, but that it is a crucial amendment so far as the whole of rural Britain is concerned.

I speak as one who lives in rural Britain, and I am sure that I speak on behalf of Members on all sides of the Committee when I say that there is a great deal of concern and worry about the insertion of this clause by the Government at the very last minute when the Bill was before another place. Everybody in this Chamber who comes from or who knows anything about rural Britain knows that we are talking about people who have given a lifetime's work to their countryside and who are usually very valuable members of those rural communities. They are looking to us for protection in their old age. We are not talking about a few people. It is reckoned that 220,000 non-sheltered units are affected by this clause. In one part of the country, in North Wales, a survey was conducted to discover what happens to old people's homes when the tenancy is terminated. It was found that over 30 per cent. of them were terminated within three years and over 60 per cent. within six years. These are the figures with which the Government have to deal when they are considering what will be the effect of the clause which they inserted too late.

As the noble Lord, Lord Evans, pointed out, the future for old people in the rural areas, who normally live in unsheltered accommodation in small units which do not have wardens, and who therefore are affected by this clause, is that they will have to live in squalor in old dwellings, be forced to live with their children, or be put in homes. I suggest that, as we did in 1980 on all sides of the Committee, we think of the old people of the rural areas of this country and we ask the Government to think again before they come back to us with this part of the Bill.

Lord Collison

I feel that I must say at least a few words about this amendment. As your Lordships know, I come from an agricultural background, and for most of my life I have represented the interests of agricultural workers and indeed others in the industry. I do not think it is possible for me to add anything further to the arguments that have been put by my noble friends on the Front Bench and by others; therefore, I shall not waste your Lordships' time in that sense. But I thought it was important for me to say something. Indeed, I would have been rather looked at askance if I had not risen to my feet in order to give my own personal support to this amendment, which I now do.

Baroness Denington

I shall try to be brief because I notice that time is passing quickly and we have a long way to go through this Bill. However, I want to quote what the noble Lord, Lord Bellwin, said in his speech on Second Reading, when he referred to the fact that we were not talking about these particular bungalows and flats—sheltered housing. That is agreed; we are not. He said: We are talking about bungalows, flats, and so on, which have been provided for elderly people as part of the general housing stock".—[Official Report, 30/1/84; col. 455.] The noble Lord may be pleased to know that I completely agree with him. Of course they are part of the general housing stock, but so are dwellings for the disabled and sheltered dwellings—they are all part of public housing stock and the stock of this nation.

I do not know what happens in other authorities, but I have been to the GLC and have obtained copies of a few of the plans that were produced at the time I was chairman of the Housing Committee. These are plans of housing for the elderly, and on them it says "old persons' bungalows"—"GLC—old people's dwellings"; the next one says "OPDs", which stands for "old people's dwellings". Those dwellings were built specially for the elderly. I agree that the dwellings are not sheltered housing. They were built to meet the needs of people going on to a pension and then wanting to move out of their large accommodation, which is too expensive to heat, and so on, and into something smaller. These people do not yet want sheltered accommodation and a warden because they are still able-bodied; they are in the age range of 60 to the early 70s. That is the group about which we are talking.

If these dwellings are frittered away—because if they are sold, that is what they will be—today they will not be replaced. The local authorities do not have the money to replace them. The dwellings are located on sites near shops, buses and other facilities and those sites were carefully harboured and collected, and would not be available anymore. Once these dwellings have gone, who will house this section of our community? I do not know where they will be housed. The local authorities and the housing associations will not be able to house them; and, as noble Lords have already said, these people will be forced into old, dilapidated housing. Those of us who work in this field know that the older people become the cheaper the accommodation they require, and so they end up right at the top of a flight of 60 stairs in some of London's old houses, with no facilities at all. That is the reality of the situation about which we are talking.

I do not want to speak for too long, but it is absolutely essential that these dwellings are preserved for that section of the community who cannot afford to buy, who will never be able to afford to buy, and who—alas!—will always be with us: the low paid and the poor. Noble Lords know exactly the sort of people I am talking about. We in this country are a fair people and we like fair play. If we support my noble friend Lady Birk on her amendment, then the people who live in these dwellings will not be able to buy them which may make them sad because no doubt some of them would wish that they could do so. But one must surely always put the needs of the community before the desires of the individual.

6.50 p.m.

Lord Northfield

When the noble Lord, Lord Bellwin, replied to the last amendment, he said—we all admire his patience and skill in dealing with the matters—that we were on difficult issues on which we were seeking the balance of argument. This is supremely the case on this matter. Briefly, I wish to consider the conflicting considerations which must be in all our minds before adding some new points to the debate.

The Government's case is a strong one. It is that the right to buy applies to everybody else and why should we stop short of elderly people for whom often it is a greatly-cherished hope, perhaps a part of their lives beyond their reach, to own their own homes? It is a strong point that we should not forget.

The second point in the Government's case, is that even if the people are tenants of these bungalows for a short time—five to seven years is the accepted time—almost certainly in most cases they have been tenants of the local authority or new town housing corporation for a large part of their lives. In that sense they are as deserving as anybody else, despite their short occupation of a bungalow, to own their own homes. If this right is being given to other people why should it not belong to them? Why should they be discriminated against?

The third point in the Government's case is that the matter of undeserving heirs is not much of a starter because we faced and decided that already under the general issue of home ownership. There will be undeserving heirs who will inherit council houses. We have already said that the right for people to own and save up to buy overrides the problem of the undeserving heirs. In that sense the Government's case is strong. I want to preserve the right of elderly people to buy their own homes.

I am being brief, but against that we have the devastating case made by my noble friend Lady Birk. It was devastating case; well-argued and well-documented; I thought a brilliant performance. What her case boils down to is this shortage. I almost took down her words, because indeed she went so far as to say that if there were no shortage we should not be making this case today.

Why do we not use this amendment and this situation to smoke the Government out on this issue? The Government are saying that they want the right to buy to override even the question of shortage. If the Government want to go that far they have to come some way in talking to all of us about shortage. I speak in all friendliness to the noble Lord, who knows that I share many of his views about the needs of people in such cases, but the fact is that the Government do not have a real policy in housing the elderly. This is the tragedy and is what is leading to the shortage.

I put what happened under three headings. When the Government came to power, in their exuberant enthusiasm for ending the public sector they took a broadside across the lot. They said that private builders should supply most to the housing needs of this country. That was the first mistake. The cuts that were made in the public sector provision of old people's dwellings were wrong, in my view. The Government's exuberance in ending the public sector should not have taken them that far.

My second point is to ask what could the Government offer us today which would be of use to any of us who would dearly like to support their objective of enabling elderly people to have this right to buy? The first offer the Government could make would be to say that, in so far as old people's dwellings are sold in this way and the public stock starts to be depleted, the Government will ensure that there is a policy which replaces that stock as it disappears—a beginning of a housing policy to replace the stock of houses or bungalows of this kind that are sold.

There is a precedent for this. On 23rd December, or whenever it was, the Government announced that they would be finding extra money to give to the tenants of charitable housing associations to buy a replacement house, now that the Government were taking away their right to buy a charitable association house. That would be extra money. It is in the noble Lord's winding up speech where he said that the housing associations would be provided with extra money, and that has been taken into account in providing the extra money needed partly to cover the extra expense of helping the tenants of charitable associations to buy a house. The Minister could say the same thing today—that, in so far as the stock begins to be depleted by the sales, the Government will find extra money to replace it.

The second offer that the Government could make would be to agree that the private sector should be providing more of the housing accommodation for the elderly. But we all know that that can only be done for the better off among the elderly. The Government could say that they are prepared to talk with the private sector more strongly and openly than they have done so far about the problems of land prices for housing for the elderly, about the problems of providing warden services where housing for the elderly needs it and it is partly paid for by the people, and perhaps, even further, they could consider some form of equity sharing that would enable the local authority to keep the responsibility for the exterior maintenance of the house in return for some share in the growth of the equity in it.

All I am saying, and I shall be as brief as I can and conclude on this note, is that we should not reject the Government's policy out of hand. It has immense merits in it. We should ask the Government instead to say that they are prepared to have a stronger, more active, more rational and more comprehensive policy for housing the elderly and stopping the stock of local authority or publicly provided housing in this sector from falling any lower than it is today. That would enable me with good heart to go into the Lobby with the noble Lord.

Lord Monk Bretton

I also feel considerable concern about the rural situation. I am not sure that I agree with the noble Lord, Lord Northfield, that a policy for the aged will necessarily solve the problem in villages. What I think is wrong with where the Bills gets us now is that it leaves rural areas with warden accommodation which is more centralised and, by my analysis, I think the pressure of demand is not so much upon that as upon local unwardened accommodation in smaller groups in villages near the rest of the elderly person's family. This consists of the odd bungalows and ground floor flats that exist in villages. There are not many of them so there is little choice. They are scarce and are difficult for local government or anybody else to replace in rural areas. That is where the difficulty lies.

Lord Bellwin

It has been, as I anticipated it would be, an interesting debate. I shall try to respond in detail to the various points which have been raised.

First, I shall make one general point. It is not lightly that we stir up the hornet's nest of Lady Birk and her supporters on this issue. The issue was debated at length in 1980 and it would have been all too easy to do nothing more. Let me explain, therefore, why it is that we have felt compelled to bring this matter back again, albeit with important changes to the additional proposals. Despite what has been said, your Lordships always listen carefully to a contrary point of view. I hope that, if your Lordships feel the balance of argument is with the Government, you will support them. We come back to this subject because, as I will show, there is simply no justification in logic or in equity in the present situation. This Government care about elderly people. I care about elderly people. I was brought up to have a love and a reverence for elderly people. I lived with my grandparents from the day I was born and I saw the way that my parents revered them. That is exactly how I have behaved the whole of my life towards elderly people. Therefore, I give way to no one in the compassion which I feel for elderly people. I could not make the case I do now if I did not feel as I do about them.

When I say that this is about equity for them, I mean it very sincerely indeed. We care about their rights and we care that they should not suffer discrimination. There is no doubt that there is discrimination in the present position in so far as they are concerned. It is not enough just to say that you care. You want to show and to do something to show them that you care. That is why we are taking the apparently perverse step of opening up this question again. The honourable compromise which was worked out in 1980 in this House and in another place simply has not worked. The Act requires a dwelling to meet a test of design or special adaptation and a test of letting practice if it is to be excluded from the right to buy.

Our experience over the past three and a half years has shown that these tests have produced no workable distinction between dwellings which should be excluded from the right to buy and those which should be included. The noble Baroness, Lady Birk, said that people do not live in these houses for many years.

Let me give your Lordships one or two of many illustrations—and I do mean many, my noble friend Lord Ingleby referred to a hundred; I am not talking of hundreds but of many, many more than that—of the kind of applications that we have had under paragraph 5. One letter from a tenant in an industrial city in the North (and I ask you to accept from me that these are typical letters) reads: I am now aged 72. I became the tenant of the above property in 1943 when I was 31 years old. At that time I had five children and I subsequently gave birth to two more. The flat opposite to mine is identical to the flat that I occupy and has recently been sold to the tenant. There are no alterations or adaptations to the flats to make them suitable for use by persons of pensionable age". So much for that home for the elderly. Another letter from a town in the North-West: The dwelling has been occupied by our client consistently for a period of 15 years. When she entered into the property it was neither designed nor specially adapted for occupation by a person of pensionable age. Furthermore, her husband, now deceased, was aged 42 and herself aged 39". Just one more of what I can assure you are many—a letter from Cornwall: It has not been the practice of the landlord to let either 19 Bowling Green or the other dwellings on this estate only for occupation by elderly persons. This is proved by my own case as the property was first let to me in July 1956 when I was 47. When the tenancy commenced the propery was new". These are only illustrative examples which show vividly the confusion and uncertainty which has arisen for tenants as a result of the working of the 1980 Act. Both design features and letting practice have turned out to be so variable that in very few cases have both tests been met. The Secretary of State has had to reject some 1,450 of the local authority applications that he has received while only 160 have been found to meet the tests approved in 1980. I could go on with many examples, but I think I have illustrated with just these few the absurdities which have arisen.

What on earth is going on when local authority landlords block their tenants' wish to buy by asserting in cases such as these that the provisions of paragraph 5 of the Act are met because these are homes for the elderly? The general effect when paragraph 5 procedure is operated is that, at the cost of delay and correspondence which has often been bewildering and worrying to the elderly tenants, the right to buy can go ahead in the vast majority of cases. I am afraid that that is not the end of the problem. There is evidence that the present position has created great uncertainty in elderly tenants' minds as to whether or not they have the right to buy. Worse, there is evidence that some authorities have taken advantage of this uncertainty to discourage applications from elderly tenants and that others have deliberately misled their tenants into believing that they have no right to buy.

I quote one instance. In 1982, we discovered that for two years it had been the policy of an authority not to sell bungalows or ground-floor flats. When tenants applied to buy they were simply told that it was not the council's policy to sell. In other words, they lost their statutory rights. Only those who went to their solicitors and began to threaten court proceedings were then allowed to buy.

A very striking fact emerges from our experience over the past three and a half years. Over that period roughly one-third of all local authorities have not made a single application to the Secretary of State for permission not to sell houses to the elderly. Let me illustrate that fact more vividly. By 30th June 1983—and we are constantly being told that it is apolitical and nothing to do with politics—a group of 20 local authorities had between them a total of 56.000 applications to buy from all categories of tenant. What is striking is that these 20 authorities had between them not made a single application to the Secretary of State to have an elderly person's dwelling excluded from the right to buy. Their attitude to the right to buy ranged from reluctant acquiescence to downright hostility. I am not going to go on making much of this but it is very apposite.

So I sum up our experience of operating paragraph 5 so far. Where councils sell willingly, it is not needed. Where it is operated, it causes delay and uncertainty with only a tiny number of exemptions resulting. Where it is abused, there is manifest injustice which cannot be tolerated. I cannot recommend acceptance of the amendment in the name of the noble Baroness and others. It does not begin to tackle the problems I have described. In fact, it actually makes them worse.

The two-fold test of design and letting practice which they propose would perpetuate and intensify the difficulties that tenants have faced over the past three and a half years. I do not need to point out what the consequences would be of leaving the application of the test in the hands of the sort of authorities whose behaviour I have just been describing. It is no solution at all. One thing has to be emphasised. I should like to remind your Lordships of exactly what we are proposing, because I am firmly of the view that this has been much misunderstood. I must stress that it is simply not correct to describe our proposals as extending the right to buy to elderly people's housing. The vast majority of elderly tenants in non-sheltered housing effectively have the right to buy already.

Only a tiny number of dwellings have been exempt under paragraph 5. In other cases, if elderly tenants believe that they do not have the right to buy, that is the result of misunderstanding or, as I have pointed out, in some cases misrepresentation. What we are now proposing is the removal of a provision which has proved totally unsatisfactory, which has given rise to widespread uncertainty and misunderstanding and which has led to denials of that statute-given right. So we are clarifying the situation.

In future it will be clear beyond doubt that elderly tenants have the right to buy, that they qualify under the normal rules and I believe that that will be an enormous gain. Tenants will know where they stand. I do not believe that there is anyone in your Lordships' House who would resist the proposal that tenants should be able to understand and exercise their statutory rights. As it so happens, what we are proposing actually has great advantages for landlords, too. The reality of the present situation is that very few dwellings have been categorised by the Secretary of State as not to be sold. Local authority landlords must sell to elderly tenants with the right to buy; otherwise, in effect, they are cheating them. However, the current position is that once dwellings are sold landlords have no means of recovering them. Our proposal will change that. In future, any dwelling that, in the opinion of the landlord, meets the criteria embodied in Clause 7 can be sold, but subject to a pre-emptive provision which will require it to be offered back on resale. The right of pre-emption will be 21 years—more than twice as long as the pre-emption period which in 1980 was considered appropriate for rural areas. I entirely reject the argument. It is not true that we are dismantling something in the 1980 Act which has been of real benefit to landlords. We are actually providing something much better and giving them a more effective safeguard than they have had up to now.

The three main criticisms which have been made about the proposals are as follows. It has been said that in the light of public expenditure restrictions and other shortages, it will be too costly and authorities simply will not have the money to buy back these dwellings: therefore pre-emption will not be of practical use. May I say, first, that I believe the difficulty over repurchasing what in most cases will be a very small number of old persons' houses each year is being exaggerated. For most authorities the cost involved will not be significant, especially in the context of the capital receipts they obtain from these and other sales.

Secondly do not let us make the assumption that repurchase will always be necessary. The pre-emption provision is a safeguard but many authorities may find that they neither need nor want to use it. Many are selling willingly already, and they can of course use capital receipts to adapt other houses for the elderly rather than buying back.

Thirdly, where an authority does wish to replace a house that has been sold to add—I repeat "add"—to their housing stock, what choice have they at present, except in certain rural areas? Their only option is to build a new house. That is the real comparison that we should be making between the cost of building new houses and the cost of repurchasing existing ones. Surely it is not suggested that repurchase in any circumstances will be more expensive than new building. And if the pre-emption covenant is so worthless, why have rural authorities been so keen to avail themselves of the provision in Section 19 of the 1980 Act which permits pre-emption covenants to be imposed in rural areas? No fewer than 128 authorities have applied to the Secretary of State for designation under that section. We have had no complaints in that context that the lack of resources makes the safeguard useless.

Several comments have been made about the benefits which are likely to accrue to younger relatives of elderly people. I would ask: is it wrong for elderly people to buy at a discount and leave the property to their children who, it is suggested, will then stand to make what the noble Lord, Lord Evans, called "a windfall gain". It is somewhat astonishing that the principle of inheritance should be questioned in this Chamber. If younger tenants—

Lord Simon of Glaisdale

Surely a contract to leave property by will is a perfectly valid contract.

Lord Bellwin

If the noble and learned Lord will bear with me, I made a note of the points that he made and I am coming to them shortly. If younger tenants buy and do indeed at some point reap the value of their discount, some people will say that would be called a windfall, as I have said. But why should an older tenant not have the satisfaction of ownership, for however brief a period, after having paid rent for many years? Still more, why should he not have the satisfaction of being able to pass on a tangible asset to his children? What greater comfort and peace of mind could there be to elderly parents? Is this such a sinister and undesirable thing to happen? I would reply, "Not in my book".

It is also suggested that younger relatives would put up the money to enable their parents to buy precisely in order to obtain this windfall gain. No doubt there will be cases where children assist their parents: I hope there will. But how many children, most of them with families and mortgages of their own, will have substantial additional sums to spare for this purpose? Precisely the same allegation was used against the general right-to-buy legislation; but experience has shown that there is just no evidence over the past three and a half years to give ground for this fear.

Lord Molson

Will my noble friend give way?

Lord Bellwin

I did not interrupt a single person who spoke earlier: I make it my way not to do so. It is very difficult to develop an argument if I am always being interrupted. Of course I give way to my noble friend—briefly, I hope—and then may I please ask your Lordships to at least allow me to finish my speech.

Lord Molson

I very much appreciate my noble friend's courtesy. Does he draw no distinction between inheritance of what has been acquired in the ordinary market and acquisition which is facilitated by legislation?

Lord Bellwin

As I said to the noble and learned Lord, Lord Simon of Glaisdale, a moment ago—I now make the same point to my noble friend—I am just about to reach that very point. I do ask to be allowed to make it in my own way. The fact is that inheritance, in the Bill as drafted, would not count as a disposal, triggering the pre-emption covenant; so the inheritor (most probably a son or daughter) could take over, say, a bungalow without having to offer it back to the local authority but could move in or let it or use it as a holiday home. In the one situation where pre-emption has been in place these last few years—that is, the rural areas—experience has in fact shown up no such thing, and that must be a far better guide to likelihood than any theoretical arguments. Most families simply will not be in a position to let a bungalow or keep it as a holiday home. When the time comes they will want to sell, and when they do sell the pre-emption covenant will come into play. Where relatives are already living in the house it is surely entirely right that they should be able to stay on. In many cases, such relatives—even children—will themselves be in their 50s and 60s by the time they inherit.

Nevertheless, in view of the strength of the views expressed on this point both on Second Reading and again today, I am prepared to look at this again. I am prepared to look at the possibility of tightening the present rules so that local authority landlords would have the opportunity to buy back where the dwelling would otherwise pass to a relative or other inheritor who is not himself or herself living in the dwelling. I will consider whether amendments on this point may be brought forward at Report stage.

Finally, I want to turn to the doubts that have been expressed on our proposals in the rural areas. We have always recognised that there are particular housing problems in these areas, and I can assure your Lordships that the Government have no wish to make them any worse—quite the opposite. That is why I repeat again that our proposals, as I said earlier, are not understood in this connection.

I should like therefore to make two points. First, many rural areas are already willing sellers of council houses, and I could give a long list of them. I can only assume that not only do these people not object to sales but actually encourage them. However, I want to go on because I think there is a case here for further reconsideration. I am prepared to say that in all the circumstances, recognising the special problems particularly in the most remote rural areas where the only provision for the elderly may be a small group of bungalows in an isolated village, where sheltered accommodation may be completely unavailable even in the case of Scarborough (which I know very well, as the noble Lord knows) I think we need to look at this aspect again.

I give an undertaking that the Government will look again at these proposals as they would affect rural areas to see whether we cannot bring forward suitable amendments at Report stage to provide additional safeguards in those areas. Having said that, I hope that at least my noble friend Lord Caithness will now feel able to support the Government and also my noble friend Lord Monk Bretton. Also—who knows?—possibly, in view of my remarks about inheritance, I could aspire to the support of the noble and learned Lord, Lord Simon of Glaisdale.

To make a last comment, it has been said that this matter transcends all party boundaries—and when the noble Lord, Lord Hatch, says that, I always start to worry. I do not think there is any objection to my saying that, just as the noble Baroness, Lady Birk, said on television the other night that this Government are obsessed with seeking to give the right to buy to people, she will not mind my saying that she and her noble friends are equally obsessed with denying that right to those who wish to buy. It is a political issue; but, as I said at the start, it is also about caring.

My old mother used to say to me: "It's no good to grow old" and I used to say to her: "Mother, it's no good not to grow old". In fact we were both right; but as I get older I find that she was more right than I was. Certainly, I understand her point of view better. There are enough restrictions and limitations on what the elderly can do, where they can go, what they can have and to what they can aspire. We tried to do something to ease these restrictions in the 1980 Act and it has not worked as it should. I said a few moments ago that probably not many elderly people will want to buy their own homes, but that really does not matter. The point is that one is concerned about the right to buy. When, in 1968, I introduced selling and the right to buy in Leeds, I was told that nobody would buy. I said. "I don't care if not a single person wants to buy. I want them to have a right." In the event, thousands did buy. But that is not the point. I do not want the elderly to be discriminated against.

The one factor that has been raised and which has troubled people most of all is: what will happen to the housing stock, if people sell the houses? But we now have the experience of some 700,000 or so houses having been sold and that has not had the devasting, adverse effect upon the housing stock that we were told, again and again, in 1980 would be the case. My noble friend Lord Broxbourne and the noble Baroness, Lady Denington, asked: what is a house for the elderly? I ask Your Lordships to think about it carefully. It is the same house that the young people have. I have given illustrations of it. You can argue, with the noble and learned Lord, Lord Simon, that it makes the case against us, but it also makes the case for us, because we are talking about the totality of the housing stock. The noble Lord, Lord Northfield, in his very fair and balanced speech, was anxious about a shortage, but I, too, am anxious about a shortage. I was anxious about a shortage 20 years ago, when I first went into local government. I was anxious about the elderly persons' housing stock. I agree with the noble Lord that that is where there must be a great deal of emphasis, but that is for another occasion.

I finish by saying that I have undertaken to look again at the need for special safeguards in the rural areas. I have undertaken to take back the question of inheritance. So we are not inflexible, as compared with the hard experience of what has actually happened in the last three and a half years. In my opinion, noble Lords opposite have not made the flimsiest case to justify their arguments. I appeal to noble Lords on all sides to say that the elderly are entitled to the same rights as anyone else. This amendment is wrong, it is discriminatory and, above all, it is unjust. It condemns the elderly to be second-class citizens and I ask your Lordships to vote against it. Let us show in deeds, not in words, that this Committee and your Lordships' House are for, and not against, the rights of older people.

Baroness Birk

I listened very carefully to what the Minister said, against the awful odds that he faced from all sides of the Committee. It was rather unfair of him to refer only to noble Lords opposite him. There were as many noble Lords behind him who spoke up strongly for the amendment as there were on this side. His offer is a sincere one. Nevertheless, it does not deal with the core of the matter. What all those who have spoken have been concerned about is the basic question that elderly people, pensioners in this category, which has been very tightly drawn, whose houses have always been let to pensioners and are specially designed and adapted, should be exempted from the right to buy. What the Minister may be coming forward with is only a sincere straw which he has clutched at and it will not deal with the basic problem. Therefore—I am sorry to say this, because the noble Lord is making an effort—as this is a central matter of principle, I must ask the Committee to express its opinion.

7.24 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 113; Not-Contents, 90.

DIVISION NO. 3
CONTENTS
Ardwick, L.	Hylton, L.
Attlee, E.	Ingleby, L.
Aylestone, L.	Irving of Dartford, L.
Banks, L.	Jeger, B.
Burnett, L.	Jenkins of Putney, L.
Beaumont of Whitley, L.	John-Mackie, L.
Beswick, L.	Kilmarnock, L.
Birk, B.	Kinnoull, E.
Bishopston, L.	Kirkhill, L.
Blyton, L.	Kissin, L.
Boothby, L.	Lawrence, L.
Boston of Faversham, L.	Listowel, E.
Bottomley, L.	Llewelyn-Davies of Hastoe, B.
Brockway, L.	Longford, E.
Brooks of Tremorfa, L.	Lovell-Davis, L.
Burton of Coventry, B.	McIntosh of Haringey, L.
Carmichael of Kelvingrove, L.	Mackie of Benshie, L.
Chitnis, L.	McNair, L.
Cledwyn of Penrhos, L.	Masham of Ilton, B.
Collison, L.	Molson, L.
Craigavon, V.	Monson, L.
Croft, L.	Morris of Kenwood, L.
David, B.	Moyne, L.
Davies of Penrhys, L.	Mulley, L.
Dean of Beswick, L.	Napier of Ettrick, L.
Delacourt-Smith of Altervn, B.	Nicol, B.
	Ogmore, L.
Denington, B.	Oram, L.
Diamond, L.	Phillips, B.
Donaldson of Kingsbridge, L.	Pitt of Hampstead, L.
Elliot of Harwood, B.	Ponsonby of Shulbrede, L. [Teller.]
Elwyn-Jones, L.
Elystan-Morgan, L.	Prys-Davies, L.
Ennals, L.	Raglan, L.
Erroll, E.	Rochester, L.
Esher, V.	Saint Oswald, L.
Evans of Claughton, L.	Sefton of Garston, L.
Ewart-Biggs, B.	Serota, B.
Falkender, B.	Shackleton, L.
Fisher of Rednal, B.	Shannon, E.
Fortescue, E.	Stallard, L.
Gallacher, L.	Stedman, B.
Glenamara, L.	Stewart of Alvechurch, B.
Graham of Edmonton, L.	Stewart of Fulham, L.
Grantchester, L.	Stoddart of Swindon, L.
Greenwav, L.	Stone, L.
Hall, V.	Strabolgi, L.
Hampton, L.	Swinfen, L.
Hanworth, V.	Taylor of Blackburn, L.
Harris of Greenwich, L.	Taylor of Mansfield, L.
Hatch of Lusby, L,	Tordoff, L. [Teller.]
Hayter, L.	Underhill, L.
Henderson of Brompton, L.	Wallace of Coslany, L.
Henniker, L.	White, B.
Houghton of Sowerby, L.	Winchilsea and Nottingham, E.
Howie of Troon, L.
Hughes, L.	Winstanley, L.
Hutchinson of Lullington, L.	Winterbottom, L.

NOT-CONTENTS
Airey of Abingdon, B.	Colwyn, L.
Allerton, L.	Cork and Orrery, E.
Auckland, L.	Cottesloe, L.
Avon, E.	Cox, B.
Belhaven and Stenton, L.	Daventry, V.
Bellwin, L.	Denham, L. [Teller.]
BelofF, L.	Drumalbyn, L.
Belstead, L.	Effingham, E.
Blake, L.	Ellenborough, L.
Boardman, L.	Elton, L.
Broxbourne, L.	Enniskillen, E.
Bruce-Gardyne, L.	Faithfull, B.
Cairns, E.	Gainford, L.
Carnegy of Lour, B.	Glanusk, L.
Cathcart, E.	Glenarthur, L.
Cockfield, L.	Gray of Contin, L.

Grimston of Westbury, L.	Mottistone, L.
Hailsham of Saint Marylebone, L.	Murton of Lindisfarne, L.
	Northchurch, B.
Halsbury, E.	Nugent of Guildford, L.
Hanson, L.	Orkney, E.
Hylton-Foster, B.	Rankeillour, L.
Inglewood, L.	Renton, L.
Ingrow, L.	Ridley, V.
Kaberry of Adel, L.	Rochdale, V.
Kemsley, V.	Rockley, L.
Kilmany, L.	Salisbury, M.
Kinloss, Ly.	Saltoun, Ly.
Lane-Fox, B.	Sandford, L.
Lauderdale, E,	Selkirk, E.
Lindsey and Abingdon, E.	Skelmersdale, L.
Long, V.	Stamp, L.
Loudoun, C.	Stodart of Leaston, L.
Lucas of Chilworth, L.	Sudeley, L.
Lyell, L.	Suffield, L.
McAlpine of West Green, L.	Swinton, E. [Teller.]
Mackay of Clashfern, L.	Thorneycroft, L.
Maclcod of Borve, B.	Tranmire, L.
Mancroft, L.	Trefgarne, L.
Margadale, L.	Trenchard, V.
Marley, L.	Trumpington, B.
Massereene and Ferrard, V.	Tryon, L.
Maude of Stratford-upon-Avon, L.	Vaizey, L.
	Vaux of Harrowden, L.
Merrivale, L.	Vickers, B.
Mersey, V.	Vivian, L.

Resolved in the affirmative, and amendment agreed to accordingly.

Lord Lucas of Chilworth

I beg to move that the House do now resume.

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

House resumed.

Lord Lucas of Chilworth

My Lords, I beg to move that the Committee stage of the Housing and Building Control Bill be adjourned until half-past eight.

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

[The Sitting was suspended front 7.33 until 8.30 p.m.]

House again in Committee on Clause 2.

Lord Bellwin moved Amendment No. 14.

[Printed earlier: col. 1200.]

The noble Lord said: I spoke to this amendment with Amendment No. 11. I beg to move.

On Question, amendment agreed to.

On Question, Whether Clause 2, as amended, shall stand part of the Bill?

Baroness Faithfull

I wonder whether I may ask my noble friend the Minister for some help? Under Schedule 3(3) to the Housing Act 1980, a letting to an employee of residential accommodation within a social services or educational establishment is not a secure tenancy. Under Clause 55 of Part IV of the Bill we are now dealing with, as I read it, Schedule 3(3) to the 1980 Act is repealed. May I know from my noble friend the Minister whether Clause 2 of the Bill takes care of that?

My noble friend will remember that in the passing of the 1980 Act the directors of social services through- out England were extremely worried because they found that they would have to let accommodation to residential staff of residential establishments such as children's homes and old people's homes. My noble friend the Minister changed that obligation under Schdule 3(3). May I know whether that position is still safe?

Lord Bellwin

The Local Government, Planning and Land Act 1980 came into effect after the Housing Act 1980. As a result, it was necessary to make provision in the local government Act to apply the provisions of Chapters I and II of the Housing Act to urban development corporations. This Bill proposes certain amendments to the Housing Act so that there will be a reference to urban development corporations on the face of the housing legislation.

Clause 3(3)(c) in particular is relevant, as is paragraph 32(2) of Schedule 10. Certain provisions in Section 156 of the Local Government, Planning and Land Act as a result become redundant. Schedule 11 provides for their repeal.

These amendments are essentially technical and I can confirm that certain urban development corporation tenancies will remain subject to the provisions of Chapters I and II of the Housing Act 1980. Corporation tenancies however will be subject to a set of provisions common to new town development corporations and district councils, among others, excluding from security of tenure and/or the right to buy certain dwellings which are needed for operational purposes.

I hope that helps my noble friend Lady Faithfull. If she would like to have greater clarification, I shall be pleased to write to her.

Baroness Faithfull

I thank my noble friend the Minister for that reply. I will read Hansard very carefully and if I do not understand what I read, then perhaps I may come to see him.

Clause 2, as amended, agreed to.

Clause 3 [Further periods to count for qualification and discount]:

Baroness Fisher of Rednal moved Amendment No. 15: Page 3, line 28, leave out ("two") and insert ("three").

The noble Baroness said: In moving Amendment No. 15, we are really asking the Government: why are they reducing the number of qualifying years from three to two, hearing in mind the success of the Government's programme up to the present? They seem to be extremely satisfied, and although I do not wish to go into pros and cons of selling houses, the figures being produced on the number of houses sold makes it seem as though the scheme is living up to the Government's expectations.

In view of that, why do the Government need to think about reducing the number of years which a person needs to be a tenant? One should hear in mind also that some people may have spent only a very short time in a particular area anyway before being allowed to make a purchase. Why reduce the period from three years to two when the sales are already good?

Lord Simon of Glaisdale

May I ask the Government not to accept this amendment, even though I have no doubt that the noble Lord, with his usual courtesy, will answer the question asked of him? I suggested earlier that one of the grave disadvantages of our housing law was its built-in system, which has now subsisted for so long, of rent restriction, which precludes or at any rate inhibits the kind of mobility that we need in our industries. It seems to me that the reduction of the period from three years to two giving rise to the right to buy is a counter indicator of that and is of value in itself.

Lord Bellwin

I thank the noble Lord, Lord Simon of Glaisdale, for his helpful comments. I believe he will be particularly interested when we reach that part of the Bill which refers to the right of exchange, where the whole question of mobility is clearly highlighted. I hope that the noble Lord will be pleased with what is proposed there. One purpose of Clause 3(1), as has been said, is to reduce the residential qualifying period from three years to two. The amendment seeks to retain the present three years' rule. The right to buy applies only to secure tenants. Secure tenants are people who have been granted a tenancy of a house or flat on a long-term basis. They will be entitled to remain in that dwelling for the rest of their lives. In some circumstances, the tenancy will pass on to their successors.

When a dwelling is let on a secure tenancy the landlord or authority must expect and accept that the tenant to whom the letting is made may be there for a very long time. It is only that category of tenant which has the right to buy. Instead of occupying his home as a tenant, he occupies it then as the owner. When the right to buy was introduced in 1980, the three-year rule was not fixed as the result of some magic formula but was an arbitrary period designed solely to establish that the right to buy applies only in the case of bona fide tenants. We could well have chosen a period of two years. Indeed, one might ask: why have a residential qualifying period at all, given that only tenants granted a tenancy on a long-term basis can have the right to buy anyway? The noble Baroness, Lady Fisher of Rednal, asked why we have decided now to reduce the qualifying period when, as she fairly said, the whole policy has been and is being very successful in terms of numbers.

The answer is simple. We believe, for the reason I have given about permanency, that the three-year period is too long. We have to look at the practical effect of our proposal. It will be, we estimate, that up to a quarter of a million tenants will be able to buy their own homes a year earlier. I do not believe that would be a bad proposition, although I appreciate that the noble Baroness may feel otherwise. If we accept this amendment, it would require those tenants to wait for another year. We cannot agree to that because, even apart from the point made by the noble and learned Lord, Lord Simon of Glaisdale, which I must admit is rather a spin-off benefit, we think that it is not necessary to stay the extra time.

Lord Graham of Edmonton

The Minister has given a predictable response. He wants to speed up in any way and in every way that he can the disposal of public assets which are represented in publicly owned housing. He makes no secret of the fact. If one is doing a certain amount of selling off of public assets by the inducement of selling them at half price—that is, a 50 per cent. reduction—what is wrong with making it 60 per cent? In a year or two's time if the supply of applicants is not what it was, why not increase it? If one of the benchmarks is that one must have been a tenant for three years and it is doing very well but the Government want to speed it up, why not make it two years? As the Minister said, there is nothing magic about two years. That means that in two or three 'ears' time we might have legislation reducing the time to one year. The Minister makes his case. He said he is not too sure whether there should be any qualification at all.

The Committee should take very carefully on board that what the Government are doing is not just disposing of public assets—not just millions or hundreds of millions but thousands of millions of pounds of publicly-owned assets. We are not talking about what I would call hard done by people. As the Minister rightly pointed out, we are talking about people who already have a great benefit. First of all, they are council tenants and that in my view is a benefit. We have publicly-owned property for which they are paying a fair and reasonable rent—we are not arguing about rent increases—and in this instance they also have the security of knowing that providing they are reasonable tenants, they have security for life. On top of that, the Government say, "Although you are in a good position by comparison, for example, with millions of others who are on the waiting list or who are poorly housed in private housing, you are in the good position of being a secure council tenant and also have the benefit of being able to buy your £30,000 asset for £15,000. All you have to do is maintain your tenancy for three years." We are talking about the generality of council tenants and many of them automatically qualify.

Besides all those great benefits, the Government want to make it even better. I do not for one moment blame any tenant, faced with the prospect of having a beneficent Government and a willing council —whether the council is willing or not is now immaterial, the tenant has the right to buy—because he knows for a certainty that he will get his £30,000 house for £15,000, but he has to wait a little while. What a penalty! What a burden! Now the Government want to make it even easier. I fail to see why the Goverment are so concerned with this particularly specially privileged class of tenant. They have seen earlier this evening an attempt to deal with some other classes, yet they continue to completely ignore a class of tenant which in my view deserves some consideration—that is, the tenant of the private landlord. The Government are keen to give to tenants the right to buy their own house, whether the council want to sell or not. But they have been very chary and have completely ignored and put up no answer at all to the question: why, while heaping even more upon those who have already got—the council tenants—they are not prepared to consider forcing the private landlord to do anything like that proposed for the public landlord?

The Minister's case is a very thin one. When one shears away what he has said, it is apparent that he simply wants to speed up and make even more attractive a scheme that he has said—and I believe fairly—is a popular scheme. There is no argument about that. There is no doubt that there has never been an unpopular man who has wanted to give away money or assets. Council tenants who wanted to buy have been satisfied and grateful. The Minister will no doubt say that they responded at the ballot box in elections to demonstrate that they like the policy. Of course they like the policy. What we do not like is that the councils and the councillors are left with the worries. I know that the Minister, like many here, is well aware of the pressures on individual councils and councillors in the housing field. The quicker one releases public assets, although one may satisfy more and more people, the more one leaves more and more worries for those who have the responsibilities.

Frankly, we are certainly opposed, not to the principle of the right to buy, but to what we believe are the grossly inflated discounts which are given and also to the speeding up of terms whereby people can enjoy those benefits.

Baroness Faithfull

I am hound to say that I am surprised at the noble Lord, Lord Graham of Edmonton. The amendment says leave out "two" and insert "three". On his arguments I should have thought he would suggest leaving out "two" and putting in "10". What is the difference between "two" and "three" except for 12 months?

Lord Graham of Edmonton

The reason is that we believe that the Bill as at present drafted does not need alteration. We are not in the business of altering the "three" to any figure at all; but if the Minister wants to alter the "three" to "two" we are in the business of putting the "three" back. If the noble Baroness wants to extend the period and cares to move something on Report we would probably support it. However, with this amendment we are only concerned with keeping the Bill as it stands; that is, with the three years and not the reduction to two years as the Bill has come to us from another place.

Lord Molson

I think this is relevant to the general matter we are discussing. Did the Minister see an item in The Times last week relating to the cost of compensating tenants of charitable trusts who are not now able to buy their houses as a result of the decision in this House in the last Parliament not to allow tenants of charitable trusts to exercise what the Government call the right to buy but which I prefer to call the privilege to buy?

In The Times—in a paragraph which bore all the signs of being well-informed—it was stated that the Government had just learned after an investigation by the Civil Service that they had let themselves in for a very serious liability. During the Second Reading debate my noble friend the Minister said that on Report the Government intended to introduce a new clause the idea of which was that a subsidy should be paid to make up to those tenants who would have been able to buy from charitable trusts if this House had not decided otherwise. Apparently a well-informed correspondent of The Times said that as a result of the investigation that had been made the Government had been advised that the cost of this concession—this uncalled for and unnecessary concession—might amount to as much as £600 million.

I am sure my noble friend will be glad to dispose of that and either confirm or deny it. Of course, he may say that it is only an estimate and that he does not propose to commit himself at the present stage on what this concession may involve. I only warn him that I am quite sure the Committee will want to know when this new clause is introduced in Committee what the cost to the Exchequer will be.

8.49 p.m.

Lord Bellwin

First of all, I say to the noble Lord, Lord Graham of Edmonton, that he is really debating the whole theology of the right to buy. We went through it all in 1980. Even those of your Lordships who have spoken and voted against the Government on the other amendments accept that this is now a fact of life. It is a very popular idea in the country, even among those who have not bought. People are content to know that they have the right if they so wish. If pressed, I shall be happy to go over all the arguments. Believe me, I need no notes to do that. I could talk for perhaps an hour.

I was one of the first in the country to be involved in the selling of some thousands of council houses in the late 1960s. When the arguments were presented to me as to why it was so dreadful and wicked, I went through the matter item by item and point by point to show that that was not so in theory or in experience and practice. Everything that has happened since the 1980 Act has confirmed that what I said was right. As I say, unless pressed, I shall not subject the Committee to that argument. What the noble Lord said is right. We seek to make the process easier if we can. We believe deeply in the idea, and that is why we are carrying it out.

May I respond to the point made by my noble friend Lord Molson in regard to the article in The Times and his letter to The Times? I shall try very hard to contain myself. A more fatuous article I have rarely seen. I am told that it is from a well-informed source. In the main, the author is a very responsible writer. I thought that this point might come up so I prepared carefully for it. Let us see what he actually says. The man who is writing this well-informed article makes an assumption that up to 100,000 tenants may be eligible for this scheme. I quite agree. Perhaps 100,000 tenants will be eligible. He then goes on to produce numbers, giving an average discount, he says, of £6,000. He multiplies that by the whole of the 100,000 and comes up with a figure of £600 million which he says it may cost. It is almost like playing, "Think of a number and double it".

I remind the Committee that this scheme applies only to the tenants of charitable housing associations—associations which by their rules are obliged to let to people in necessitous circumstances whose needs conform to the objects for which the association was established. They will tend to be elderly, poor or disabled. How likely is it that a high proportion, let alone the whole 100,000, will be able to afford to buy, even with the help of discounts, quite apart from the fact that many—you could say the vast majority—will not wish to move from their present dwelling?

If my noble friend is interested, I tell him that our estimate of the likely cost is that the scheme will not cost £600 million in 1984–85 but more likely about £10 million. That is a slight difference. As I indicated at Second Reading, this £10 million was taken into account in setting the cash limit for the Housing Corporation's approved development programme for 1984–85 and will be again taken account of in future years. I suspect that that matter will be of some concern to some of my noble friends when we come to that particular amendment, and I shall elaborate on it at that time.

Lord Graham of Edmonton

As I understood the position, this was not the place in the Committee for this point to be raised, but the Minister fairly takes it on because it was raised from another quarter. We are now told that £10 million is the estimate. The Minister has discounted the other estimates and adopted his own. If his estimate is wildly out, as is possible, in effect, this will be a proscription on the number of applications. If we find that it is an underestimate, will other sums be required?

Lord Bellwin

If only the noble Lord had allowed me to finish, I should have come to his point. Unlike the suppositions in the original article, our £10 million was not plucked out of the air. We estimated the likely cost of the scheme by taking a look at the actual take-up of the right to buy among tenants of non-charitable housing associations. In the first three years of the operation of the right to buy, around 4 per cent. of eligible tenants exercised the right to buy. Given that the tenants of charitable housing associations are generally older and poorer than those of non-charitable housing associations, there seems no reason to expect the take-up for this scheme to be any higher. I believe that our estimate for the cost of the scheme for next year is realistic, and I do not expect the figure to be significantly exceeded. But the noble Lord is right: that really is for another occasion. I can only respond as I did to the other point which he made.

The Earl of Selkirk

In the two or three years concerned, has the tenant to be resident in his house or does he just have to have the lease in his name?

Lord Bellwin

In the case of the charitable housing associations that we are referring to, he certainly has to have the lease in his name. Indeed, he would only have such a lease if he was the resident. If my noble friend fears that there may be some jiggery-pokery, I shall he glad to pursue that point. I think that I should he able to satisfy him on it either now or on another occasion.

Baroness Fisher of Rednal

Does the noble Lord the Minister agree that practically every tenant who is granted a council house or flat becomes a secure tenant on the granting of that tenancy? Therefore, to use the argument about a person becoming a secure tenant after two years seems to be rather spurious. If the Government feel so strongly about selling more and more houses, why not offer them for sale as soon as the person becomes a secure tenant? The period has been three years; now it is two years. One obviously supposes that the regulations will be changed again and the period will be one year. The argument about a secure tenancy is not a real argument, because the tenancy becomes secure as soon as it is taken up.

Lord Bellwin

The noble Baroness is basically correct. It is almost like saying, "Make me an offer". I said that it is true that once a person is a secure tenant no one can move him or her out of that dwelling. There is logic in what she says. I promise her that I shall consider it and discuss it with my friends.

On Question, amendment negatived.

8.58 p.m.

Baroness Fisher of Rednal moved Amendment No. 16: Page 3, line 32, leave out subsection (2).

The noble Baroness said: This amendment would increase the discount that is offered. At present we find that the average claimed is 40 per cent. A 60 per cent. increase in the maximum will most likely take us up to an average of 50 per cent. To allow people to purchase houses with that kind of discount is really giving away public assets. No wonder the Government are able to sell houses. Because they are now able to sell them so easily, one again has to ask why they need to increase the discount.

A person employed by one of the well-known High Street stores came into Government to advise the Minister. I have never seen that store cut the price of any of its commodities when they have been a fast selling line. The only time that that store offers anything at a cheap price is when it has bought something that has been a bad buy. So it is important to remember that the thoughts of that business, which have been used so many times by the Government, have been brought into the thinking on this issue.

Are the Government expecting sales to drop off? Obviously with higher unemployment there will be fewer people who are able to buy. Today we have had a lot of discussion on the right to buy, whether it involves the handicapped or the elderly. But the unemployed people in this country are being denied the right to buy. They are not unemployed because they do not like work or are workshy. It is part of the Government's programme not to do anything to increase employment, and so a great number of people who are unemployed are denied the right to buy and they will gain nothing from the proposal to increase the discount to 60 per cent.

When is the Minister going to be able to offer a 100 per cent. discount? All those people on housing benefit would then gain an advantage. The Government could get rid of the housing benefit because people would be living rent free. Another thought for the noble Lord the Minister to take back to his friends is that the Government could save millions in housing benefit by giving the houses away, which is what a 100 per cent. discount would amount to.

I want to raise another point with the Minister. Not only are we now to give 60 per cent. discounts: it has been reported in the press that a local authority, which has a very good record of selling houses, is to start giving them away. The authority is running a raffle. As a prize it will give a tenant the council house he lives in if he is able to state good reasons why he should be able to purchase it. Before concluding, I should like to ask whether that is legal, since housing revenue finance is being used. Can that finance be legally used to run what is purely a lottery?

I should also like to ask the Minister to tell us whether we ate to continue to have increases in the maximum discount, bearing in mind how cheap a 60 per cent. discount makes a house. There is hardly any need for me to give examples of what that means, but, for instance, with a 60 per cent. discount, a £30,000 house would sell for £12,000. That is a bargain in anybody's money, and no wonder the Government are able to attract buyers.

Lord Simon of Glaisdale

When I first addressed your Lordships today I apologised as a neophyte addressing a committee of experts. So I am sure that your Lordships will know the answer to the question that I am now going to ask, which, I know, I ought to be able to answer myself were I not virtually innumerate. Will the noble Lord the Minister let me know what is the period to be taken into account to obtain the maximum discount? I thought that in the Act it was either 17 or 20 years and in the Bill either 28 or 30 years. But it is rather important when one considers that it may be a number of years before anybody can earn the maximum discount.

Lord Hylton

The Bill that we are considering tonight comes from a Government, and their predecessors, who have very serverely cut the local authority capital housing programme despite enormous, backlogs of repairs and despite system-built housing collapsing all over the place. As if that were not bad enough, they have cut the housing association capital programme despite endless evidence to show what a good job that is doing, in particular in inner city areas and housing action areas. Now this year the Government propose to reduce housing benefit to people who are eligible, just at the same time as they increase the upper limit for mortgage interest relief.

Now we find that in the Bill the Government are enlarging the maximum discount, raising it to 60 per cent at the top level. It seems highly inappropriate. Not satisfied with just selling off valuable community assets, as has been suggested, the Government now propose virtually to give them away. This is a Government who favour those with resources against those who have few or no resources.

In a statement quite recently, the Irish Commission for Justice and Peace made the following observation: When claims of different groups clash, priority should be given to the needs of the weak over the demands of the powerful". I should like very strongly to support the amendment and to urge the Government to think again.

Lord Monson

I, too, should like to support the amendment. As I said on Second Reading, I fully accept that the vast majority of people in this country approve the principle of the right to buy, or as the noble Lord, Lord Molson, said, entirely accurately in my opinion, the privilege of buying. However, I do not believe that any but a small minority approve of vast discounts ranging up to 50 per cent, and to propose a 60 per cent maximum discount at the expense of other people as my noble friend Lord Hylton has just pointed out, merely compounds the error.

Lord Northfield

There are two points I should like to mention. First, we should bear in mind that the original cost of a house is a floor through which the price cannot go. So let us not exaggerate the effect of the discount. In other words, the effect of the discount does not allow the authority to sell the house below the original cost. That is an important point to bear in mind, and so we should not exaggerate on this.

Secondly, with great respect, I do not think that we should go on talking about these questions as though the only issue were the bonanza that the proposal is supposed to be creating for the tenants. It actually helps landlords, public corporations like my own, to be disposing of these houses. We have estates that, in the very real sense of the word, were becoming difficult to manage. Indeed, in some cases, because of their deterioration, particular houses, particular streets, or corners of the estate were difficult even to let. What is happening in those estates—I can take people to see them—is that by a process of selling, we have rejuvenated them. We have again made them a place of which people can be proud. They contain houses that people are proud to live in and proud to own. I do not wish to exaggerate the other way either, but I beg noble Lords not to keep pretending that this is simply a bonanza for the tenant. In many cases, it happens to be good landlordism.

9.9 p.m.

Lord Bellwin

I am grateful to the noble Lord, Lord Northfield, I have seen some of the situations he has described. And, my goodness, I have duplicated that all round the country. I see the tremendous pride that people now have in their homes. You can walk round these housing estates, these massive—I hate to use the word but I do—ghettos of vast housing estates. Then you see some 600,000 or 700,000 privately owned dwellings, which stand out like beacons. What is more they lift up the whole level of the housing around them. And, yes, the occupants are painting the doors different colours. They are fitting their own doors. The gardens are a delight to see. People are doing this themselves. They are not waiting, as they always had to do, for the authorities, every now and then, to send someone round. This has done more to give a lift to the quality of housing around our country than anything else. I did not want to get involved in this—

Lord Graham of Edmonton

But you have.

Lord Bellwin

—but I have, because I was provoked. When noble Lords opposite complain about the implications of the right to buy, may I remind them that it is they who constantly tell us about the need for greater equalisation of the wealth of the country. What could there ever have been that was more effective in equalising wealth than to give 600,000 or 700,000—it will not be long before the figure is a million—families an actual capital stake of their own which they would never otherwise have had. I could give a whole string of benefits that flow from the sale of council houses accruing, not least, as the noble Lord, Lord Northfield, says, to the authorities themselves. They have today in their coffers some £2,000 million, a big part of which they can apply to whatever they like in housing. That is something they have never had before. They can use it for repairs, new building, or whatever.

Let us keep a sense of proportion about this whole business. Yes, it is a great boon to tenants. They love it, and why not? It is also a great boon to everyone else. I was asked specifically about the amendment. With my noble friend Lord Denham sitting near me, I know that he will be wondering why I am not addressing myself to it. I shall do so briefly. I wish to answer the question raised by the noble Lord, Lord Simon of Glaisdale, by saying that it will take 30 years to achieve the point where you will be liable for the 60 per cent. of the discount. The discount starts at 32 per cent. after the two years and increases by 1 per cent. for each year of public sector tenancy in excess of two. That is how the figures work out. We estimate that there are 400,000 tenants who have over 20 years' tenancy to their credit. We see no good reason why 20 to 30 years as a tenant should not be treated in the same way as two to 20 years. We have made a firm commitment to increase the maximum discount.

I am aware of the anxieties of noble Lords opposite, who do not like the whole policy. I understand that. The fact is that it is right, in our view, on every single count. Had the noble Baroness, Lady Fisher, been in her place, I would have wanted to talk about what she said in regard to Government policy on unemployment and the economy. As she is not able to be here—

Baroness Birk

I should like to explain that my noble friend Lady Fisher asked me to convey her apologies as she had to catch a train. She was not simply leaving the Chamber for no good reason.

Lord Bellwin

I thank the noble Baroness. If anyone is able to sympathise with the noble Baroness, Lady Fisher, for leaving in such circumstances, it is I myself. I seek often to do the same, but do not succeed too frequently. However, that is really the point that I want to make. I recognise that an extension is involved, but we believe deeply in the policy. We think that it is effective, that it is working and that it is good.

Lord Hylton

Perhaps I can commend to the Minister working paper No. 39 from the School of Advanced Urban Studies at the University of Bristol. It seems that this study confirms what a number of us foresaw and indeed mentioned in 1980—that the houses that would be sold would be semi-detached houses and end terrace houses, the best of the bunch. The houses would sell far more than flats.

Lord Bellwin

If I may just answer that, this is exactly what they said to me in 1968 and 1969. If I took the noble Lord round Leeds, which it would be my very great pleasure to do, I should show him houses of all types bought in every single part of the city, and I think he would be very impressed not just by what he saw but by what the people who bought them actually said to him about their purchases.

Lord Graham of Edmonton

Not for the first time the Minister has taken the opportunity of putting up a very stout, robust, vigorous and, I am sure, pleasurable defence of the principles of the right to buy. When we try to keep to the amendment precisely the Minister is tempted to stray, and if he does so we shall expect the same rights. We have a very heavily weighted agenda with proper opportunities, and each side should recognise that there will be full debate. We were not looking—at least on this occasion—to go into the whole philosophy.

The Minister failed in an earlier debate to answer one of my central points, which was: what is the Government going to do about the equality of tenants—not tenants of public properties but of private properties as well? Perhaps he might take the opportunity here. If not, he will provide me during the debate with the opportunity frequently to raise the issue. I think we are entitled to say when we are looking at beneficial treatment to council tenants that, outside the principle of the right to buy, they are more generously treated by the Bill which is before us. We are entitled to say. "Stop, before the House passes even greater benefits to some who are being benefited already". What is the Government's policy to some who by comparison could say, "We are aggrieved, we are angry, we are distressed"? In other words that the Minister has used tonight, they are discriminated against.

The Minister, of course, gives it all away when he talks in terms of the amount of money which has gone into council coffers from the sale of property. The capital receipts element in the housing finance of the Government has become pretty clear, and I think that the Minister would come clean if he were to say that it is quite clear that the receipts which councils have had for the past two or three years, look on a forecast to be drying up, because the better properties that were for sale have been sold—the point made by the noble Lord, Lord Hylton—and what the Government are trying to do is to find a fresh impetus for the sale of council houses. That is why the period has been reduced from three years to two to qualify; that is why the ultimate benefit from 50 per cent. to 60 per cent. discount has come about.

So far as we are concerned, there are one or two intriguing questions. Can the Minister tell us what in actual fact happens to those who bought very recently under the old terms and who now find that by comparison with the new terms they bought too soon? In other words, there will be some people who will say, "What a pity!" The Minister has pointed out, I believe, that there are 400,000 tenants who have got in excess of 20 years' qualification. Does that mean to say that if they had waited three or four years they would have benefited? And what are the Government going to do for people who feel they have been disadvantaged in that particular way?

Lord Bellwin

The noble Lord makes so many points that he must not really accuse me of taking time in diverting from the main thrust of the amendment. The noble Baroness, Lady Fisher, was talking about the Government's employment policies. Various other matters have been raised by the noble Lord, Lord Hylton. Others have asked different questions. It would be very easy for me, to use a colloquialism, to "sling a deaf 'un" and to take no notice, but I tend to try not to do that.

The noble Lord reveals in everything he says his dislike of what we are doing in this whole policy. If I do not agree with him, at least I respect his honesty as to that. The fact is that what one seeks to do with money which has been put up by the public is a totally different thing to what one does with people's private money and private property. If in this country we ever get to the day where any Government is to say to private people with their own money and resources what they may or may not do with them, all I can say is, "Heaven help all of us!"

Amendment, by leave, withdrawn.

Clause 3 agreed to.

9.19 p.m.

Lord Bellwin moved Amendment No. 17: After Clause 3, insert the following new clause:—

("Inclusion of land let with or used for purposes of dwelling-house.

.—(1) For the avoidance of doubt it is hereby declared that in Chapter I of Part I of the 1980 Act "dwelling-house" has the meaning given by section 50(2) of that Act as extern-led by section 3(4) of that Act.

(2) For subsection (4) of section 3 of the 1980 Act (land used for the purposes of dwelling-house) there shall be substituted the following subsections—

"(4) There shall be treated as included in a dwelling-house any land which is or has been used for the purposes of the dwelling-house if—

1. (a) the tenant, by a written notice served on the landlord at any time before he exercises the right to buy, requires the land to be included in the dwelling-house; and
2. (b) it is reasonable in all the circumstances for the land to be so included.

(4A) A notice under subsection (4) above may be withdrawn by a written notice served on the landlord at any time before the tenant exercises the right to buy."

(3) Where, after the service of the notice under section 10(1) of the 1980 Act, a notice under section 3(4) of that Act is served or withdrawn, the parties shall, as soon as practicable after the service or withdrawal of that notice, take all such steps (whether by way of amending, withdrawing or re-serving any notice or extending any period or otherwise) as may be requisite for the purpose of securing that all parties are (as nearly as may be) in the same position as that in which they would have been if the notice under section 3(4) had been served or withdrawn before the service of the notice under section 10(1).").

The noble Lord said: With Amendment No. 17, I should like to deal also with Amendments Nos. 132 and 133.

Amendment No. 132: Schedule 10, page 84, line 1, at end insert— ("3A. Subsections (4) and (4A) of section 3 of the Housing Act 1980 (meaning of "house", "flat", "dwelling-house" etc.) shall have effect as if any reference to the right to buy included a reference to the right to be granted a shared ownership lease. 3B. In section 5(2) of that Act (notice claiming to exercise the right to buy) for the words "three years" there shall be substituted the words "two years".")

Amendment No. 133: page 84, line 2, leave out ("the Housing Act 1980") and insert ("that Act") The new clause deals with the inclusion of land in right to buy sales. In this context, "land" includes garages, and it is particularly in connection with the sale of garages that problems have arisen, although there have also been difficulties over the inclusion of gardens.

By virtue of Section 27(1) and 50(2) of the 1980 Act a tenant has a right to buy any land which is "let together with" the dwelling-house. He may also, under Section 3(4), buy any land which is "used for the purposes of" the dwelling, provided the landlord is willing to sell. There has been a considerable amount of argument since the 1980 Act came into operation about the circumstances in which a tenant has a right to buy his garage as well as his home. We have come across some bizarre cases.

One authority refuse to sell garages let to the tenant under his secure tenancy; they argue that Section 50(2) does not apply to Chapter 1 of the 1980 Act. Another authority have refused to sell a garage which is within a few feet of the back door of the house and which the tenants have rented since they originally took the letting of the house. In defending their refusal to sell the garage, the council pointed to the fact that two separate tenancy agreements cover the house and garage and that, while the tenancy of the house was in the name of husband and wife, the tenancy of the garage was in the husband's name only. Another authority are refusing to sell a garage which is actually an integral part of the house in question; they rely on the fact that the garage was until recently rented by a person other than the tenants of the house. Can your Lordships imagine buying a house with an integral garage, but being told that the garage in fact belongs to someone else and therefore you have no access to or control over it?

These arguments have been the subject of lengthy correspondence with local authorities and the need to clarify the position came to a head at the end of last year. That is why we have brought forward these amendments at this stage. The new clause is intended to remove the uncertainty and to avoid the type of nonsensical situations that I have just described. I would be glad to expand on the situation and to give more detail if your Lordships request it, but meanwhile I beg to move.

Lord Monson

I am sorry to have to take issue yet again with the noble Lord, Lord Bellwin, for whom I have the greatest respect and who has done a truly magnificent job this evening in defending with all sincerity what many of us, with equal sincerity, believe to be the indefensible. I fully take his point about garages, but surely the effect of the amendment as drafted would be to enable tenants to purchase at a large discount houses with gardens or with land attaching of as much as two acres. From looking up the 1980 Act, that would be the effect of the amendment. Of course, there may not be many local authority or housing association houses with as much as two acres of land attaching, but certainly in rural areas there are many council houses with very large—by urban standards—vegetable gardens attaching to them.

It seems to me, therefore, that the consequences of this amendment, if it goes through as it stands, would be twofold. The first consequence would be that the local authority would be deprived of a valuable building plot or plots on which rented accommodation might be built, to the benefit of the whole community. The second consequence is that the purchaser—that is to say the former tenant—would be able to sell off the surplus land for a private building plot or plots at a huge capital profit. That surely goes beyond anything that the Government actually intend.

Therefore, would it not be sensible for the Government to withdraw this amendment now and to reintroduce it at the Report stage with some limitation as to acreage—in other words, to insert not the two acres to which the 1980 Act refers, but some maximum in the region of perhaps one quarter of an acre?

Lord Northfield

Before the Minster replies, I should like to point out that I suspect that the point which the noble Lord, Lord Monson, is raising is covered in paragraph (b) which refers to whether: it is reasonable … for the land to be so included". Can the Minister tell us, in that context, the interpretation of "reasonable"? How would the decision as to what is "reasonable" be made in the case of dispute in exactly the type of case that the noble Lord has made out?

Lord Bellwin

The situation that the noble Lord, Lord Monson, has described is, indeed, the position as it is now. I wonder how many council houses have two acres of land attached to them. If there are such houses, the position is that that land would be valued and the tenant would have to pay for the "hope" value. It would all be part of the valuation. But as the noble Lord, Lord Monson, fears, the reason it has not come about can be answered by the question: how many council houses are sited in two acres of land?

Lord Monson

I am grateful to the noble Lord for that explanation, but would the land he valued at potential development value? That is the point.

Lord Bellwin

It would indeed have to be valued by the district valuer, or whoever was dealing with the valuation. It is done in different ways by different authorities. The noble Lord is absolutely right.

Lord Northfield

Perhaps I may press my point. What is the test of what is reasonable?

Lord Bellwin

What is reasonable is for the DV to say in his judgment, but if it is felt that that is not a reasonable judgment or if, say, one of the houses in the noble Lord's new town was to be under-valued, then I am sure it would be open to him to say—am I missing the point?

Lord Northfield

The noble Lord is missing my point. The test of whether or not the land shall be included shall be if the tenant serves the notice and: (b) it is reasonable in all the circumstances for the land to be so included"; in other words, that is the test of whether he can have that extra piece of land. Who is to pronounce on what is reasonable?

Lord Bellwin

I now understand, and it is a totally different point. I would take a reasonable assessment of that as to what would be reasonable. I suspect that the noble and learned Lord, Lord Simon of Glaisdale, who has been so interestingly involving himself in this, would give a far better definition than either I or the noble Lord. Lord Northfield. But, clearly, this is a point on which I had better write to the noble Lord.

Baroness Birk

I was rather relieved to find that other noble Lords are also slightly mystified about this and it has raised a number of queries. My noble friend Lord Northfield has raised this matter but I was also about to query what "reasonable" means. There seems to be a lack of understanding about this new clause and to the best of my knowledge I do not think we have a note on it. Noble Lords opposite have the answer, do they?

Lord Bellwin

Yes.

Baroness Birk

I was about to suggest to the Minister that, in order to help both him and this side of the Committee, we delay further discussion until the Report stage and perhaps it would be possible for us all to have, not just a copy of the letter which he intends to write to my noble friend, but an explanation of exactly what this means, because it is rather complicated language. A number of comments have been make about it, and I have ringed the word "reasonable". I am still not sure that the points made by the noble Lord, Lord Monson, have been adequately answered. However, I doubt whether we could sort this out at this time of night across the table.

Lord Simon of Glaisdale

Perhaps I may reinforce what the noble Baroness has just said. May we all know the answer? I was about to ask the same question as the noble Lord, Lord Northfield, and particularly I wanted to know who the adjudicator will be. I took it to be a county court, but that may be quite wrong. If it is a county court the problem of what is reasonable is the sort of problem with which a court has to deal every day.

Lord Bellwin

Just as I might have expected and, indeed, as I forecast, the noble and learned Lord. Lord Simon of Glaisdale, has it exactly correct. I am told that ultimately it would be a question for the courts to decide under Section 86 of the 1980 Act. But, clearly, as this is a matter of some concern both to the noble Lord and to the noble Baroness, Lady Birk, and because of the noble and learned Lord's interest, I propose to write a much more detailed clarification of this point to them.

On Question, amendment agreed to.

Schedule 2 [Schedule inserted after Schedule 1 to 1980 Act]:

9.29 p.m.

Lord Bellwin moved Amendment No. 18: Page 60, line 35, at end insert ("of").

The noble Lord said: In moving this amendment, I should like to speak to Amendments Nos. 22, 23, 130 and 135. Amendment No. 22: Page 8, line 38, leave out ("here") and insert ("there"). Amendment No. 23: Page 9, line 29, leave out ("disposed") and insert ("disposal"). Amendment No. 130: Page 83, line 14, leave out ("subsection") and insert ("subparagraph"). Amendment No. 135: Page 84, line 9, leave out ("17") and insert ("18"). I think that we can dispose of this group of amendments fairly quickly. They are all drafting amendments or are necessary to correct printing errors. They have been proposed at the request of officials of the House. Apparently if a printing error results in a complete word, for example "disposed", the correction must be made by amendment, even though it is no fault of the Government. I beg to move.

On Question, amendment agreed to.

Schedule 2, as amended, agreed to.

The Earl of Kinnoull moved Amendment No. 19: After Schedule 2, insert the following new Schedule—

("SCHEDULE

SCHEDULE INSERTED AFTER SCHEDULE 2 TO 1980 ACT

SCHEDULE 2A

PROVISIONS APPLICABLE TO PURCHASE OF SUPERIOR INTEREST

1. A notice under section 24F(3) may be withdrawn at any time by notice in writing.

2. The price payable for a relevant interest on a conveyance or grant in pursuance of section 24F of this Act s the amount which, under this Schedule, is to be taken as its value at the relevant time.

3. The value of a relevant interest at the relevant time shall be taken to be the price which, at that time, it would realise if sold on the open market by a willing vendor to a willing purchaser on the assumption that the Housing and Building Control Act 1984 had never been passed.

4. Where a notice has been served under section 24F(3) of this Act, the recipient shall, subject to section 24F(6) of this Act, as soon as practicable, serve on the person who served the notice a reply describing the relevant interest and stating—

1. (a) the price to which, in the opinion of the recipient of the notice, the person who served the notice is entitled as consideration for having the freehold conveyed or, as the case may be, the long lease granted from him; and
2. (b) the provisions which, in the opinion of the recipient of the notice should be contained in the conveyance or grant.

5. Any question arising under this Schedule as to the value of a relevant interest at the relevant time shall be determined by the district valuer in accordance with this Schedule.

6. Either party may require that value to be determined by a notice in writing served on the other party.

7. Before making a determination in pursuance of this Schedule the district valuer shall consider any representation made to him by either party within 4 weeks from the service of the notice under paragraph 8 above.

8. Where a notice has been served under section 24F(3) of this Act, the recipient shall be hound, subject to the following provisions of this Schedule and to section 24F(6) of this Act to receive from the person who served the notice a grant of the relevant interest as soon as all matters relating to the grant have been agreed or determined.

9. If, after all those matters have been agreed or determined, the person who served the notice does not take all steps necessary to complete the transaction, the recipient of the notice may serve on him a notice requiring him to complete the transaction within a period stated in the notice, but the period stated in the notice shall not be less than 28 days.

10. If the person who served the notice does not comply with the notice under paragraph 11 above, the notice claiming to require the purchase shall be deemed to have been withdrawn at the end of the period stated in the notice under that paragraph and no further notice claiming to require the purchase shall have effect.

11. The duty imposed on the landlord by paragraph 10 above shall be enforceable by injunction.

12. A conveyance of the freehold executed in pursuance of this Schedule shall conform with Parts I and II of Schedule 2 to this Act and a grant of a lease so executed with Parts I and III of that Schedule and Part IV of that Schedule applies in relation to certain charges, as if references in that Schedule to the landlord and to the tenant were references to the vendor and purchaser respectively.

13. Section 123 of the Land Registration Act 1925 (compulsory registration of title) shall apply in relation to the conveyance of a freehold or grant of a lease in pursuance of this Schedule whether or not the relevant interest is in an area in which an Order in Council under section 120 of that Act is for the time being in force.

14. If the relevant interest is not in registered land, the vendor shall give the purchaser a certificate stating that the vendor is entitled to convey the freehold or make the grant subject only to such incumbrances, rights and interest as are stated in the conveyance or grant or summarised in the certificate.

15. A certificate under paragraph 16 above—

1. (a) shall be in a form approved by the Chief Land Registrar; and
2. (b) shall be signed by such officer of the vendor or such other person as may be approved by the Chief Land Registrar.

16. The Chief Land Registrar shall, for the purpose of the registration of title, accept such a certificate as sufficient evidence of the facts stated in it; but if, as a result, he has to meet a claim against him under the Land Registration Acts 1925 to 1971, the vendor shall be liable to indemnify him.").

The noble Earl said: In moving this amendment I should also like to speak to Amendment No. 29. Amendment No. 29: after Clause 11, insert the following new clause:

("Right to require purchase of superior title.

.—(1) After section 24E of the 1980 Act (vesting orders) there shall he inserted the following section— Right to require purchase of superior title. 24F.—(1) This section applies where the landlord does not own the freehold of the dwelling house. (2) In any case where this section applies, where a lease has been granted to a tenant under this chapter, the owner of the freehold or anyone claiming title under him (except the landlord and the tenant) may exercise the powers of this section. (3) A person exercising the powers of this section may serve notice on the person holding title immediately from him stating that he is willing and able to sell his relevant interest to him and requiring the recipient of the notice to acquire that relevant interest, and subject to this section the recipient shall acquire the relevant interest from him and for that purpose the provisions of Schedule (Schedule inserted after Schedule 2 to 1980 Act) to this Act shall apply. (4) The recipient of a notice under subsection (3) above may, within 21 days of the receipt of the notice, serve a counter-notice on the person who served the notice objecting to the requirement to purchase the relevant interest and stating that the exercise by the tenant of the right to buy under this Chapter does not materially affect the capacity of the person who served the notice under the said subsection (3) above to exercise his rights in the relevant interest stated in the notice. (5) The question whether the exercise by the tenant of the right to buy under this Chapter does materially affect the capacity of the person who served the notice under the said subsection (3) above to exercise his rights in the relevant interest stated in the notice shall he referred to the tribunal. (6) If on such a reference to the tribunal, the tribunal determine that the exercise by the tenant of the right to buy under this Chapter does not materially affect the capacity of the person who served the notice under the said subsection (3) above to exercise his rights in the relevant interest stated in the notice the recipient of the notice shall not be required to acquire the relevant interest from him and the provisions of Schedule (Schedule inserted after Schedule 2 to 1980 Act) to this Act shall not apply. (7) In this section and in Schedule (Schedule inserted after Schedule 2 to 1980 Act) to this Act "relevant interest" means any interest of the person who serves a notice under subsection (3) above in any property or where all or any part of parts of that property are the subject of the exercise of a right to buy under this Chapter. (2) After Schedule 2 to the 1980 Act there shall be inserted, as Schedule 2A, the Schedule set out in Schedule (Schedule inserted after Schedule 2 to 1980 Act) to this Act.".

First of all I should make a short apology for these two lengthy amendments, particularly after the brevity of Amendment No. 18. I have never inflicted on any Committee of this House such comprehensive amendments before. Perhaps one gets more daring as one gets a little older. Nevertheless, the principles behind the amendments are important and I hope my noble friend's patience and sympathy have not been exhausted after the battering he received during the earlier debate and for which no Minister in my view could have received a more unjust attack on such compassionate shoulders as his. Having said that, I might add that I have not always voted on his side.

The two amendments deal with a relatively simple problem. It is the problem that crops up under urban renewal schemes, particularly with joint partnerships between the public and private sectors. Urban renewal schemes, as my noble friend only too well knows, tackle the many neglected derelict areas of our towns and cities and are a vital aspect of any housing policy. My noble friend's department has not been slow to make considerable achievements in this. I remember an announcement that my noble friend made in December when he announced that 80 derelict land schemes had been approved and 43 concerned housing. It is interesting for the Committee to note that of those schemes £40 million of public sector money was involved and £262 million of private sector money. Private sector money, as my noble friend knows, is long-term money in these schemes invested by institutions based on security of the land and the legal agreements between local authorities. Many of these legal agreements could, under the provisions of this Bill, be broken unless one can amend the Bill in some way.

The cases that could arise are such where the private sector has led the development and has taken the freehold, particularly of the housing element within the scheme, leaving the local authority to take a long lease to provide local authority housing. It is an arrangement that has often in the past been entered into and has worked well. The freehold investment is secure, the provision of the local housing authority is achieved and the scheme works extremely well. Under the Bill the local authority basically loses its lease from the tenants who can purchase long leases; and in the case of houses, as against flats, the tenants can then enfranchise their interests. Indeed, the freeholder is then left with a considerable loss on the original valuation of his interests.

The British Property Federation helped to draw up these long yet simple amendments. This body, as my noble friend knows, represents the majority of the private sector expertise and I am sure my noble friend accepts that it is a responsible body. It has given me three examples of major urban housing schemes promoted with local authorities, all of which would show a major loss to the private freeholder if nothing is done. In view of the time of the evening, I do not intend to go through those in detail, but I shall be very happy to furnish my noble friend with examples later.

The solution of the British Property Federation is, I suggest, a refreshing and honourable one. It is simply that where a private residential freeholder can demonstrate a substantial loss under this Bill because the local authority is the major long-term tenant, then he should have the right to serve a purchase notice on the local authority to buy out the freeholder's interest at market value, assuming the Bill did not exist. In other words, where a legal contract between a public body and a private interest is being shattered by another public body, the Government, then the public body should pick up the pieces. That is the thought behind the principle.

Amendment No. 29 which is the major amendment gives the right-of-purchase notice. Amendment No. 19 governs the terms of compensation. I think that my noble friend understands the principle of this important amendment and I would again stress to him that it would be very sad if these joint partnerships were in any way endangered when they do so much to create housing. I beg to move.

The Earl of Radnor

I should like to support this amendment. It seems that at last we have come round, after speaking, quite rightly, for a long time about the tenant and the charities, to what I might call the ordinary commercial freeholder, who in this instance it seems is going to suffer financially if the tenant enfranchises the landlord, so to speak, gets at him in that way causing financial loss. As the noble Earl, Lord Kinnoull, has just said, large sums of money are involved. I am not an expert, as he is and as is my noble friend on the Front Bench, on these matters but it strikes me that this would be a very un-English performance. It seems to be a gross unfairness.

I am afraid that I am reminded of a rather unwise amendment that I put some days ago in an agricultural affair where part of the argument related to retrospection. Here once more it rears it head. Retrospectively, presumably, the freeholder entered into a bargain in all good faith and might now suddenly find himself (or the company might, or whatever you like) in a difficult or even embarrassing situation. It does seem absolutely correct that he should have this ability to get the cheque, so to speak, picked up by the landlord when the enfranchisement is taking place. It seems unfair, it seems wrong, as it is now; and I think it is absolutely reasonable that this amendment should be accepted. I hope it will be accepted.

9.38 p.m.

Lord Bellwin

Might I say that I will look forward to receiving the correspondence and detail that my noble friend Lord Kinnoull will send me? When I receive that I shall want to look into its implications. But I think I ought to put on the record—because it would be helpful to him, to the BPF and to my noble friend who has just spoken—exactly what the position is and why the Government feel that they have difficulty in accepting these amendments. There has been a considerable amount of correspondence between Ministers and the BPF on the points of concern which we thought we had been able to deal with satisfactorily. They are points which my noble friend Lord Kinnoull has raised again today. The BPF fears that the limitation on the ground rent payable by the right-to-buy leaseholder to £10 per annum in cases where the local authority is contractually obliged to pay the freeholder a higher amount could considerably reduce the value of the freeholder's interest since the rent will be therefore secured not any longer on the property but on the goodwill of the local authority.

The fact is that the local authority is contractually obliged to pay the rents to the freeholder. This is specifically reinforced in the Bill in paragraph 10(4) of Schedule 1, which provides for an implied covenant by the landlord with the tenant to pay the rent reserved by the landlord's lease. As for making good the discrepancy between the ground rent received from the right-to-buy leaseholder and that payable to the freeholder, the local authority will receive a premium for the sublease granted to the tenant and that premium is likely to be higher in recognition of the fact that the ground rent is fixed as low as £10 per annum. I do not believe, therefore, that the freeholder's interests are likely to be adversely affected by the provision relating to ground rents.

Another concern that BPF have expressed and which my noble friend Lord Kinnoull touched upon is what is claimed to be the negative effect of the Bill upon partnerships between the public and private sectors in the whole area of urban renewal—as my noble friend said, that is one thing which is very close to my heart—and in particular also on the prospect of future mixed residential and commercial developments, where flats provide part of a shopping scheme, they claim that redevelopment will not be possible if tenants purchase a long lease of the flats and that the management of such schemes will be adversely affected.

But, as your Lordships know, rights of enfranchisement do not arise in the case of flats and the freeholder can be assured of the reversion on the expiry of the landlord's lease since any sub-leases that are granted will be for a shorter term. There is therefore no question of Clause 1 denying freeholders the reversion which they consider important for redevelopment prospects in such cases. Moreover, the fact that sub-leases are granted to tenants under the right to buy will not affect the landlord's own lease, which will remain in place. The authority will continue to be answerable to the freeholder for its obligations under that lease, and this is specifically provided for in paragraph 10(4) of Schedule 1 to the Bill and the latter's normal right to enforce covenants against the authority will remain.

A further factor is that, where the local authority is required to grant long leases under the right to buy, it will be entitled to include in the lease: such covenants and conditions as are reasonable in the circumstances". That is in paragraph 5 of Schedule 2 to the 1980 Act. This will enable local authorities to make reasonable provision in the leases they grant for future management of the property and to have regard to the particular considerations which arise in the case of mixed leasehold development, among which will be the terms of the local authority's own head lease. As your Lordships know, substantial numbers of flats are being sold under the right to buy and the situation in which some flats in a block are being sold on long leases while others remain let on secure tenancies is one which is increasingly familiar to authorities and should not in itself present novel management problems.

The new clause and schedule tabled by my noble friend Lord Kinnoull are designed to require local authorities to acquire the interest of the freeholder if the latter believes that interest to be adversely affected by the acquisition of a sub-lease by a tenant exercising the right to buy under Clause 1. For the reasons I have outlined, the Government do not believe that freeholders' interests will be affected to anything like the extent feared, and they do not believe that the procedure proposed by the clause and schedule is justified. Indeed, we are anxious that such a scheme would cut across the basic provisions of the Leasehold Reform Act, which deals with the rights of enfranchisement, the circumstances in which they arise and the basis of compensation. We do not feel it would be right to introduce a separate procedure for a very small group of freeholders.

I have gone into some detail because I felt that BPF was entitled, through my noble friend, to have this on the record, and deliberately so that they could come back and talk to us about this, which I suspect they would like to do. We shall be very happy to talk to them if they so wish, because clearly the points that my noble friend has made are valid and we do not want to do anything that would in any way inhibit the rather splendid partnership which is now growing up between the public and the private sectors. Indeed, in terms of urban renewal, I feel that this is one of the greatest hopes for the whole future—I almost feel that it is the only hope—and nothing must be allowed to prejudice that. So I hope that my noble friend will come back, based upon what I have said, and will recognise why, for the time being, I cannot accept this amendment.

Lord Monson

I should like to support the noble Earl, Lord Kinnoull, leaving aside for the moment all arguments about the morality or otherwise of compulsory leasehold enfranchisement. The British Property Federation, as I understand it from my brief conversations with them, take the view that if a Conservative Government with a truly massive majority—an almost unprecedented majority—in the House of Commons turn out to lack all sympathy for the very genuine problems of property developers, then there is absolutely no point in entering into large urban development schemes ever again, as any subsequent Government that we are likely to have are likely to be even more unsympathetic towards the problems of property developers.

Whatever our personal views as to the aesthetic merits or otherwise of certain big redevelopment schemes, we must surely all agree that they have been of enormous benefit to the community at large. I was encouraged by what the noble Lord, Lord Bellwin, has said about wanting to co-operate with the British Property Federation and I hope that, having heard what has been said in Committee this evening, he will truly try to reach some accommodation with them.

The Earl of Kinnoull

I am grateful to both noble Lords and to my noble friend for supporting the amendment. I was sorry that the Opposition was silent, though on second thoughts I am glad that they were. I am grateful to my noble friend for a most encouraging and sympathetic reply which I know will be welcomed, and I look forward to discussing this point at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.48 p.m.

Clause 4 [Repayment of discount on early disposal]:

On Question, Whether Clause 4 shall stand part of the Bill?

Lord Simon of Glaisdale

May I raise one substantial point on this clause, some drafting points and a protest against the way in which this clause and so much else in the Bill is drafted, with as urgent a plea as I can make for consolidation at a very early date? I can deal with the really important point very quickly. It is on the new subsection (3A)(b) on page 5, line 5, the vesting under a will or on an intestacy. It has been dealt with a good deal.

The real gravamen has now gone with the noble Baroness carrying her amendment about elderly persons' accommodation, and perhaps it is hardly worthwhile troubling the Minister if the Government are going to accept that amendment with a good grace. But if the Government are going to try to reverse it, I think your Lordships will want to know what the noble Lord meant when he was so forthcoming about reconsidering the question of the vesting of the dwelling-house in a person taking under a will or on an intestacy, which comes under the heading of the circumstances where the discount is not forfeited.

Of the drafting points, one arises on that, but I think I have to go back to page 4, line 34, whether the disposal is of the whole or part of the dwelling-house. That reproduces the existing wording of the principal Act. But thereafter there is a new test in the discount not forfeited. In each case, it must be the whole of the dwelling-house. Perhaps the Minister will be able to tell us why that is so. I can give one example where it seems to work out oddly, although this applies to all of the paragraphs. Paragraph (c) says: it is a disposal of the whole of the dwelling-house in pursuance of an order under section 24 of the Matrimonial Causes Act 1973". Let us suppose that one has a dwelling-house which is easily divided into two and that the court orders that half of it should he vested in the wife and that the other half should be sold, the proceeds to be divided between husband and wife. Why, in those circumstances, should the discount not be forfeited? That is only one example. As far as I can see, it would apply to all of the paragraphs. Looking further down page 5, at line 21 I am not clear why subsection (3B) applies only to subsection (3A), paragraphs (d) or (e). One would expect it to apply to all of the preceding paragraphs.

There is another small point. At the bottom of page 4, again discount not forfeited applies to the whole of the dwelling-house, whether the conveyance of the leasehold or the assignment of the lease. We see, leaving out some of the words: the persons to whom it is made—is the person … by whom it is made". I can see the draftsman's difficulty, but so far as I know you cannot make a valid assignment to yourself or a valid conveyance to yourself. Perhaps the Minister would be good enough to look at that point, too.

My main point on the clause, however, is the way in which it is constructed. I doubt whether anyone, on a first reading of the clause, realises that the new subsection (3A) is a deduction from the new subsection (3). It seems to me to be a very odd way to draft it. The Minister complained of recalcitrant local authorities and seemed to me to make out a very powerful case; but it is just playing into their hands if one has obscurity of drafting of this kind.

I listened very much with approval to the tirades of the noble Baroness, Lady Birk, on the drafting of the National Heritage Bill and her plea for consolidation of that measure, which I do not believe has taken place. But at least that Act is directed at highly qualified persons who are experts in the field of legislation. This Bill affects the lives of some of the humblest of our fellow citizens. It will have to be translated for them by the volunteers in the citizens advice bureaux. One does not wish them all to be rushing to solicitors who, I venture to think, will find themselves in grave difficulty in construing this subsection. It is not only that subsection (3A) involves a double negative, being a subtraction from subsection (3). But if one looks at page 8 of the Bill, one will find there yet more negatives. Clause 7(2) states: The limitation is that, until the end of the period of twenty-one years beginning with the conveyance or grant, here will be no relevant disposal which does not fall within section 8(3A) of this Act"— so one has there two more negatives referring back to something that was already a subtraction from a positive. Two lines on, there is another example. In line 40, one finds the word "unless".

When one considers to whom this legislation is addressed, I urge the noble Lord to see that there will be consolidation at least. I believe that this clause needs redrafting anyhow, but there must surely be consolidation before people can understand what this Bill does. I know from my noble and learned friend Lord Brightman that the consolidation committee is very fully booked this Session—completely booked. It may mean that some of the measures put before the consolidation committee—and the noble and learned Lord got his today, so he will not mind—will have to be dropped. They seem much less important than this Bill.

I know that the noble Lord cannot give an answer today and that the Law Commission will have to be consulted. But consolidation can take place this Session coincidentally with a Bill going through. We did that in 1975 with the social services legislation. I ask the noble Lord if he will consider that way of dealing with the matter.

Lord Bellwin

I am sure that, despite the hour, the Committee listened with as much fascination as I did to the way in which the noble Lord went to considerable trouble to examine the nuts and bolts of the Bill's wording. I assure him readily that I will have all this discussed in great depth, and that every word of his on the record will be one to which I will respond in written form, as I am sure he would expect me to do.

Perhaps I may make just two observations on the generalities of the points that the noble Lord has made. Inheritance has always been exempted from discount clawback—but the noble Lord knows that. The noble Lord spoke of something depending on what the Government will do regarding the decisions of the Committee earlier. Clearly, I am not in a position to say tonight. I should just like to make the observation to noble Lords and to the noble Baroness opposite that it may well turn out to be a pyrrhic victory because the concessions which we were considering, and which I frankly believe will no longer apply, would have been very significant. I said in good faith that I sincerely believed that they would have been far more beneficial to the cause which they espouse than what they achieved by their decision. However, that is not for me to say tonight. It is an observation I make en passant. Meanwhile, I am grateful to the noble and learned Lord. Lord Simon, for his observations and I promise him a very detailed response in every way.

Clause 4 agreed to.

Clause 5 agreed to.

Clause 6 [Terms of conveyance or grant]:

10 p.m.

Lord Bellwin moved Amendment No. 20: Page 7, line 40, after ("declared") insert—

1. ("(a) that nothing in paragraph 8 of that Schedule shall be taken as affecting the operation of paragraph 5 of that Schedule; and
2. (b)").

The noble Lord said: This is a minor amendment which we have brought forward at the request of the local authority associations. It is extremely technical. I beg to move.

Baroness Birk

We certainly agree with this amendment because, so far as I can gather, it is a clarification point and anything that clarifies something in this Bill must be a good thing.

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 [Dwelling-houses suitable for occupation by persons of pensionable age]:

Lord Bellwin moved Amendment No. 21:

[Printed earlier: col. 1183.]

The noble Lord said: This amendment was taken with Amendment No. 5. I beg to move.

On Question, amendment agreed to.

Lord Bellwin moved Amendment No. 22:

[Printed earlier: col. 1240.]

On Question, amendment agreed to.

Lord Bellwin moved Amendment No. 23:

[Printed earlier: col. 1240.]

On Question, amendment agreed to.

On Question, Whether Clause 7, as amended, shall stand part of the Bill?

Baroness Birk

I think we now come to a rather difficult point because, with the passing of the amendment on Clause 2, looking hard at Clause 7 I am doubtful whether it now has any life at all. Either it has been completely wiped out or there are only some peripheral edges to it. I did not interrupt when the Minister moved the three amendments to it because they seemed to be completely semantic and it did not matter one way or the other, but when we get to the substance of the clause, taking it in conjunction with the amendment, passed earlier, it seems to me, certainly at first and second glance, to be enveloped by what happened earlier today. I do not know whether any of us has had a chance to go into it in great detail but it does not seem to be something that we can discuss with great knowledge now. It appears that substantially there is not much left. If, as we have done, we are making a group of housing exempt from the right to buy the whole pre-emption clause goes. It cannot possibly apply.

Lord Bellwin

I agree with the noble Baroness that Clause 7 is bound up with Clause 2 and, in view of the Committee's earlier decision, we shall need to look at both before Report. There is probably little point in debating Clause 7 tonight. I hope that we can leave it at that for the moment until we see what is to happen.

Lord Northfield

I am sorry to intervene, but I was a little upset with what the Minister said when he talked about a Pyrrhic victory on Amendment No. 13. I do not know whether the Committee had time to take in what he said, because he said it rather quickly, but I press him not to reconsider the offer he made. He said that if the Government did try to overturn the decision of the Committee they might also at this point forget the offer they had made about looking into the idea of increased powers of pre-emption in order to satisfy some of the concern in the Committee. I hope that he will not stick to the immediate points that he made then.

I have another point that I should like to make. If the Government want to try to overturn the Committee's decision, it would be helpful if the Minister had ready the other possibility in case he wins. If I may say so, I think that it would be wrong to withdraw that because of the defeat.

I want to make another point to him very carefully, calmly and quietly. I hope that he will look at the other points that I have put to him. As an alternative to pre-emption, or together with it, the Government should say that they now have to look at the whole area of public sector housing for the elderly and come forward with a much more concrete and rounded policy.

The Earl of Selkirk

I should like to support what the noble Lord, Lord Northfield, said. I suggest that we ask him to have a conference with the Minister. If I may say so, previous to this he made an extremely impressive speech. If the noble Lord has these ideas, I think that a conference might be of some value. As he has pointed out, this is a difficult problem. It will be much to our advantage if we can find something that we are fully agreed on. I am worried about what the other place will say to some of our amendments. I must say, and I should much rather have something which has the force and strength of the Government behind it.

Lord Bellwin

I do not seek in any way to anticipate what the reaction of my colleagues will be following the matters that took place earlier. I do not want to go into detail, but what I meant earlier was that I thought that the suggestions I was making as part of that debate, or part of the package that we were then proposing, were extremely helpful. But there is no point in going over that now.

I hear what the noble Lord, Lord Northfield, says. I promise my noble friend Lord Selkirk that I talk regularly to the noble Lord about such matters; and I shall be only too glad to discuss them at any time with any noble Lord. But until I know the suggestions of the noble Lord, Lord Northfield, I can make no comment on them. But as the noble Baroness, Lady Birk, said, I do not think that there is any merit in pursuing a discussion on Clause 7 tonight.

Baroness Birk

I just want to make it clear and have it recorded that what happened this afternoon was that an amendment was passed by the Committee. It was not something that was just put forward by the Opposition; it was an all-party amendment passed by the Committee.

The proposals of my noble friend Lord Northfield were very much long term. What he suggests is one thing, but I do not think that it is quite in order to discuss the whole question as though what happened this afternoon had not in fact taken place or was not a definite action by the House. That would be incorrect. I am sure that neither my noble friend nor the noble Earl, Lord Selkirk, would want to be discourteous to the House. I had the uneasy feeling that flying over my head it was being said that what had happened had not in fact happened or that we were merely in a consultative stage. As the Minister said, we are all free beings and can consult with whom we like. Tonight, and speaking from our Front Bench, I am concerned about what happens to Clause 7 now. That is the point.

I think that in the Minister's place I should have felt the same way. He was naturally not very happy at what happened this afternoon. He said—as he rightly believed from his position—what he would have proposed would have been better. Unfortunately, we did not know what he was going to propose until very much the last moment, and by then the die was cast. I think that we have to keep to the events that have occurred. We are now discussing Clause 7. I am not sure of the procedure at the moment—whether we have to leave Clause 7 standing part of the Bill or whether we just leave it in limbo.

Lord Northfield

I do not want to prolong this discussion, but I think that my noble friend has perhaps slightly misunderstood what I have said. When the noble Lord, Lord Bellwin, talked about a Pyrrhic victory he was almost hinting—and he has now said that he heard what I said—that he would not come back with a revised Clause 7, giving greater control over pre-emption to the local authorities, if at the same time the Government decided to try to overturn the decision of the Committee. All I am saying is that I hope he will still go on with the thoughts that he ventured to the Committee about an improved Clause 7.

Clause 7, as amended, agreed to.

Clause 8 agreed to.

Clause 9 [Secretary of State's power to give directions as to covenants and conditions]:

10.11 p.m.

Lord Graham of Edmonton moved Amendment No. 24: Page 11, leave out lines 38 to 44.

The noble Lord said: I promise that this will be the last amendment that I shall speak upon this evening. This is an important amendment because it deals with the very thorny prospect of retrospection. Both Houses have always been very suspicious and chary about any legislation which has in it a retrospective element. I should like to remind the Committee of the views of the present Secretary of State, when he spoke in the other place, a long time ago, on the War Damage Bill. As reported at col. 1178 of the Official Report, on 3rd February 1965, he described that Bill as, "a very nasty little Bill". He said, at col. 1183: The real mischief of the Bill, as so many honourable Members have said, is its retrospective element. Parliament is supreme, but this carries with it a corresponding duty upon us to act with extreme circumspection".

The Minister is well aware that what has been sought on the face of the Bill, and what we are attempting to remove, are the powers which the Secretary of State has taken unto himself retrospectively to interfere in a great many arrangements which have existed, and still exist, which the Association of Metropolitan Authorities thinks can do great damage.

I know that the Minister has received representations from the association. In its representations the association said that it was reasonable to require purchasers to remain connected to district heating schemes where removal would affect the viability of such schemes. In order to help the association's case, evidence was provided of similar requirements in the private sector. I am told that first of all the Government would not accept those arguments and threatened to intervene under the right to buy, but after meetings with Ministers it was conceded that the conditions would be reasonable in many circumstances.

We share the apprehension of the Association of Metropolitan Authorities. We believe that the whole of Clause 9, let alone the parts that we are seeking to remove—Section 24B(1)(a) and (b), at the bottom of page 11 and the top of page 12—give the Secretary of State the opportunity to set conditions for sale considerably more favourable to a purchaser of a property in the public sector than would be the case in the private sector. No such powers of redress exist for private sector purchasers, who must use the courts. We are not satisfied about the situation in all instances where purchasers are aggrieved. We think provision should be made with regard to their going to the courts, rather than the Secretary of State have the powers which are proposed. I beg to move.

Lord Bellwin

The effect of this amendment would be to delete that part of Clause 9 which will enable the Secretary of State to direct the removal or modification of covenants and conditions in right-to-buy conveyances or leases. That is the effect of it so far as I am aware. The noble Lord, Lord Graham, has made much of interfering retrospectively with legal transactions which have already taken place. I respect that concern. Nevertheless, I believe that it is right to retain this "retrospective" element in the proposed provision, and I have explained why. The proposed power of direction will apply only in limited circumstances. Perhaps I may try to explain why in those circumstances it may on occasion make sense to apply the effect direction equally to future and completed sales.

The purpose of Clause 9 as a whole is to give the Secretary of State the power to direct landlords not to include certain covenants or conditions in right-to-buy conveyances or leases if it appears to him that conveyances or leases containing such conditions would not conform with Schedule 2 to the 1980 Act.

Among other provisions, Schedule 2 provides that a conveyance or grant may include such covenants and conditions as are reasonable in the circumstances. It is our view that some of the covenants and conditions that have been included in right to buy sales have not been reasonable and are therefore contrary to tenants' entitlement. When confronted with an unreasonable covenant, a tenant may in theory challenge it, taking the landlord to court, if necessary. But court action is an expensive and protracted business. It is not a practical proposition for more than a tiny minority of right to buy purchasers. In practice, the majority choose to accept even those covenants and conditions that are far from reasonable. That is why we are proposing this new power for the Secretary of State to take action on their behalf.

I should stress that the power of direction will apply only in respect of covenants and conditions that are clearly at odds with the legislation. In exercising this power, the Secretary of State's decisions will themselves be subject to judicial review. This is no carte blanche for the Secretary of State to interfere with covenants and conditions of sale at his whim. He will be empowered to direct that they are modified or removed only where they are manifestly unreasonable. In reaching a decision to make a direction, he will need to take account of varying circumstances in individual cases.

In considering this amendment therefore the question that we must ask ourselves is whether conditions that are manifestly unreasonable should be allowed to stand in existing conveyances and leases. I can see no justification for allowing them so to stand. In the event of a dispute about their enforcement, we can assume that a court would not uphold them. In the absence of litigation, however, they will be a continuing source of difficulty and uncertainty. One former tenant may be bound by a condition while his neighbour, buying after a direction has been made, is not. A former tenant may have considerable difficulty finding a buyer for an interest cluttered up with onerous covenants even where their enforceability is in doubt. If we are to make directions outlawing certain covenants, I believe that it must be right to delete those covenants also from existing leases or conveyances. Again, I must emphasise that the power will arise only in relation to covenants and conditions that are at odds with present legislative requirements. I ask the noble Lord if he will withdraw his amendment.

Lord Graham of Edmonton

I shall go so far as to say that I will want to study carefully what the Minister has said. I am certainly pleased, in general, to know that the Minister shares our abhorrence of any retrospective element in legislation. It requires to be looked at carefully. The Minister has made a contribution of reasonable length. I shall want to study it and perhaps come back on Report. However, in view of the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

Clause 9 agreed to.

Clause 10 [Secretary of State's power to obtain information etc]:

[Amendment No. 26 not moved.]

Clause 10 agreed to.

Clause 11 [Secretary of State's power to give assistance]:

10.18 p.m.

Baroness Birk moved Amendment No. 27: Page 14, leave out lines 44 to 47.

The noble Baroness said: This clause gives the Secretary of State powers that are pretty well unprecedented over and above the strong powers already available in the 1980 Act. The powers enable him to make available public resources to tenants he considers to he having difficulties with local authorities in exercising their right to buy. Under the clause, the Secretary of State can give assistance to tenants by advice or by arranging for solicitors or counsel, arranging for representation by a solicitor or counsel, or any other form of assistance that the Secretary of State may consider appropriate. When he explained the new clause in Standing Committee in the Commons, the Minister said that he hoped its use would be limited and that solicitors or counsel would be made available where the Secretary of State considered it important for legal precedents to be determined. It was also made clear in another place that the terms on which assistance is offered will be decided by the Secretary of State. He may, for example, require that action is brought to the High Court rather than the County Court in order that test cases can be brought.

Legal advice and representation will be organised through the Treasury Solicitor. The cost of meeting this advice will be met from monies provided by Parliament or the Legal Aid Fund. Authorities will have to pay the costs if they lose the case.

In the view of some of the local authority associations and in our view on these Benches, there is no evidence of undue difficulty with the right to buy, and there are already in existence powers under the 1980 Act to allow the Secretary of State to intervene and sell houses, and he has, as we know, exercised that power. We are particularly concerned about the constitutional aspects of the use of the Treasury Solicitor and the Legal Aid Fund to help tenants take court cases against local authorities at the instigation of the Secretary of State.

It is interesting that there is no comparable assistance available for the private sector. For instance, owner occupiers on short leases who have difficulty securing enfranchisement under the Leasehold Reform Act 1967 have no recourse to public monies or the Legal Aid Fund in order that they can pursue the claim for an extension of their lease.

What we are trying to do is to delete the right to legal aid in the clause. I feel personally rather strongly about this because legal aid is really in very short supply over a very wide field, and sitting in the courts or exercising any other judicial function—which many of us do—we are very conscious of how the legal aid resources are stretched. It does seem to me in that context that it is wrong to indulge this particular area with legal aid when there are a number of areas where legal aid is badly needed, and where we have been told on many occasions in a quite different context that there are not the resources for it. I beg to move.

Lord Bellwin

This amendment, as the noble Baroness says, seeks to delete subsection (5) of Clause 11. That subsection in fact does no more than dictate the priority of charges where a tenant/purchaser has received both legal aid and assistance under the proposed new clause 11 power. In such cases, both the Legal Aid Fund and the Secretary of State will have a claim against any costs or expenses payable to the tenant/purchaser as a result of court action or a compromise settlement. The subsection provides that the Legal Aid Fund shall have priority in such cases. I see nothing to be gained by deleting it.

There has been some confusion between the proposed new power of assistance in Clause 11 and the financial aid available to litigants under the legal aid scheme. This may be what lies behind this amendment. The two schemes are, in fact, quite separate. The circumstances in which the Secretary of State may assist will he limited by the terms of new Section 24D(1). He will he able to do so only where he considers that the case raises a question of general principle, where a case is so complex that an individual could not reasonably be expected to tackle it on his own, or where some other special consideration arises. These grounds for assistance follow the precedents in the equal opportunity and sex discrimination legislation. As in that legislation, they are geared to very particular problems that have arisen. The power will complement, rather than in any sense replace, the far wider-based legal aid scheme.

There may, nevertheless, be exceptional cases where a tenant purchaser benefits both from legal aid and from assistance under Clause 11. Legal aid could be withdrawn, for example, following a change in the tenant purchasers' circumstances. The Secretary of State might, nevertheless, wish to assist the tenant in pursuing his case if it raised an important issue of principle with implications for tenant purchasers more generally. Subsection (5) is a minor but helpful provision which will clarify the priority of the respective claim against any costs awarded in such a case.

I should just like to remind the Committee that the provisions in Clause 11, including subsection (5), are precedented in Section 66 of the Race Relations Act 1976 and Section 75 of the Sex Discrimination Act 1975. This is a technical subject. I do not know whether the noble Baroness wishes to pursue it at some length tonight or whether she wishes to consider what I have said. However, I know that she will understand when I say that I cannot accept the amendment.

The Earl of Selkirk

In subsection (3)(d) it says: a solicitor or counsel may be used in the steps preliminary or incidental to any proceedings". I take that to mean that counsel will not be employed in court. I only ask for information for clarity. I wonder whether my noble friend can confirm that.

Lord Bellwin

I am not certain. I think that that is right; but clearly I shall have to confirm it, and I shall do so both to my noble friend and to the noble Baroness, Lady Birk, for her record.

Baroness Birk

I certainly do not intend either to press the amendment or to lengthen the debate much tonight. I am very sorry that when we began discussing this amendment the noble and learned Lord was not in his place. I am not sure whether he would have supported me or the Government, but he certainly would have said something useful in clarifying this particular point.

I do not agree that the examples of the Race Relations Act and the Sex Discrimination Act are on a par with what we are discussing in the Bill. Giving legal aid in cases like that is entirely different from this sitution. Frankly, it is a different type of animal, but that is my view. I shall read what the Minister has said and have another look at the situation. If necessary, I shall return to the matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

10.27 p.m.

Lord Coleraine moved Amendment No. 28: After Clause 11, insert the following new clause:

("Exclusion of right to enfranchise etc.

After section 24D of the 1980 Act there shall be inserted the following section— Exclusion of right to enfranchise etc. 1967 c 88. 24E. The provisions of Part I of the Leasehold Reform of right to Act 1967 (enfranchisement and extension of long leaseholds) shall not confer on a tenant occupying a dwellinghouse under a lease granted in accordance with the provisions of this Chapter any right to acquire the freehold or an extended lease of the dwellinghouse.".")

The noble Lord said: This amendment in no way undermines the theology of the right to buy. It provides that when a long lease has been granted to a secure tenant in accordance with Clause 1 of the Bill, the secure tenant will not thereafter have the right to expropriate the freeholder under the provisions of the Leasehold Reform Act 1967.

Clause 1 of the Bill has the incidental hut thoroughly intended effect of creating long leases which qualify for enfranchisement. Enfranchisement involves the tenant acquiring the freehold against the will of the freehold owner, on terms which have always been considered by Conservatives to verge on the confiscatory. Anyone who doubts this need only read the Second Reading debate on the Leasehold Reform Bill 1967 in another place. The House divided on a Conservative Opposition amendment which accepted the particular case for leasehold enfranchisement, but declined to give a Second Reading to a Bill: which seeks to provide leasehold enfranchisement on confiscatory terms". That is what Clause 1 will achieve, and no provision in the Bill is required.

In point of fact, the enfranchisement provisions of the 1967 Act are even slightly extended by the Bill. To qualify for enfranchisement under the 1967 Act, a tenant's lease must have been granted for a term of years exceeding 21 years. This is modified by the Bill, so that leases of just under 21 years can be enfranchised. This modification is to be effected by paragraph 1 of Schedule 10 of the Bill, which provides that a lease granted under Clause 1 will be a long lease for the purposes of the 1967 Act even though granted for a term not exceeding 21 years.

I do not propose to dwell at any length tonight on the question whether this Government, of all governments, should be interfering with contractual arrangements reached between private landlords and public sector lessees, in order to effect a capricious readjustment of money and property rights, to the disadvantage of the private freeholders. I would point to the circumstances in which the 1967 Act came to be passed, and ask the question whether similar circumstances existing today provide reason for saying that a secure tenant who has bought a lease under Clause 1 of the Bill ought, for the righting of some wrong or the alleviating of some disadvantage, to have the right to go on from there to enfranchise.

This is a point which the noble Baroness, Lady Nicol, touched on in speaking to Clause 1. I can see no such circumstances, and I would submit to your Lordships that if there is no ground of social need to account for the inclusion of the right to enfranchise, then there is every good reason for excluding enfranchisement. It may be that there are anomalous cases. In any debate turning on questions of where to draw lines there are bound to be anomalies, but I cannot accept that the existence of anomalies justifies the otherwise unwarranted usurpation of private rights.

My main concern tonight is with the price for which a tenant under a lease granted in accordance with Clause 1 of this Bill will be able to acquire the freehold interest in his house. The formula is to be found in Section 9 of the 1967 Act. There are strictly two formulae. The second, relating to houses with rateable values greater than £500—£1,000 in Greater London—was added by the Housing Act 1974 in order to tilt the basis of valuation some way towards the freeholder in the case of more expensive properties. It is likely that only the first formula will apply to the valuations needed on enfranchisement of the leases with which we are concerned, and my argument assumes that the original formula, contained in the 1967 Act as originally passed, will apply to all valuations.

What has to be found by valuation is the value of the freehold reversion at the end of the lease, as between a willing buyer and willing seller, disregarding the tenant's occupation, but subject to the artificial assumption that the lease will have been extended by 50 years, and that during this extended period the tenant will pay a market rent for the ground on which the house stands, and no rent at all for the house. It is to be assumed that this rent will be fixed at the beginning of the 50 years, and reviewed after the first 25 years.

It is this assumption which has always been seen as imposing unfair compensation terms on the freeholder. I do not propose to weary the Committee with the arguments about this tonight. I believe that the principal beneficiaries of tenants having the right to enfranchise, will turn out to be the public sector landlords. The secure tenant acquiring a long lease under Clause I will find that he pays more for it because of the right to enfranchise which will go with it. Part of the increase in the price will come back to the tenant in his discount. The balance will be a windfall for the public sector landlord.

If we assume that the Bill is passed in its present form, there will be a time lag of not less than three years between the granting of a long lease under Clause 1 and the eventual enfranchisement of that lease by its tenant under the 1967 Act. One of the conditions of enfranchisement is that the tenant shall occupy the house for three years under the lease which is to be enfranchised. The tenant will have paid over the odds for his lease, as it were, because of his expectation of finding treasure at the end of his particular rainbow three years later.

It follows from this that once the decision is taken and enfranchisement is allowed, and tenants have paid for leases under Clause 1, it will be difficult later to backtrack on enfranchisement without unfairness to those tenants. On the other hand, if my amendment were accepted, leases would be granted at prices not inflated by expectations of enfranchisement. This would be for the immediate benefit of tenants. It is true that public sector landlords would not receive their windfalls at the expense of the freeholders. This, I take it, would not necessarily be out of line with the prices paid to public sector landlords under right-to-buy provisions generally. In the meantime, time would be running under the leases, and if within three years the decision was made to allow the tenants to enfranchise, legislation to that end could be passed and no tenant will have been prejudiced by the delay alone.

I know that there is an element of wishful thinking about all this, but I make this last point to the Minister because I know that he cannot recommend acceptance of my amendment. I understand that a more general consideration of landlord and tenant law is going on in high places. I hope that something better may come out of discussions than the present confiscatory provisions of the Leasehold Reform Act 1967. In my view, it would be a pity to prejudice this possibility by injudicious legislation now. I beg to move.

Lord Monson

I should like to support this amendment. The Government defend their extension of the principle of leasehold enfranchisement on the ground that the principle has already been accepted. This is only true in the sense that the principle of nationalisation has already been accepted. Earlier governments introduced many measures of nationalisation but this Government do not say, "This is now the law. We had better go on and nationalise all the means of production, distribution and exchange." On the contrary, they are busy denationalising certain industries.

Leasehold enfranchisement, as it has evolved in practice in this country, undoubtedly involves confiscation, or expropriation if one prefers. It was, among others, Mr. John Peyton (as he then was) who so severely castigated the zeal of the then Government in 1967 for expropriation. Expropriation is morally wrong. I believe that people of all political persuasions, whether they be Conservative, Independent, Liberal-Social Democrat or non-Marxist Labour believe this to be so.

Indeed the European Convention on Human Rights specifically prohibits arbitrary confiscation. It stands to reason that any extension of enfranchisement in its present form, that is to say on the basis of the formula in the 1967 Act, must be morally wrong. Not only is it morally wrong, but a free market economy—indeed the capitalist system as a whole—cannot work properly where the sword of Damocles of confiscation overhangs it.

The reason is that nobody knows where they stand. No long-term planning is possible if there is a good reason to think that solemn contracts between willing seller and willing buyer freely entered into may be effectively torn up by ostensibly moderate governments in a few years' time.

This does not necessarily hinder what Mr. Heath once called the "unacceptable face of capitalism". Speculative gains will still be possible. Making a fast buck will still be possible. But what might be described as steady, dull, responsible capitalism of the type which takes the really long view will receive a grievous blow to its confidence if this is not put right. Potential investors from overseas may have second thoughts and all in all it will do this country's international reputation and its future no good at all. I urge the Government to think again.

Lord Bellwin

I ought really to apologise to my noble friend Lord Coleraine because I jumped the gun earlier when, in connection with Amendments Nos. 1 and 2, as long ago as that was, I responded to this because at the time I thought we were grouping this amendment with the earlier ones. However, rather than go again over what I said earlier—clearly the record will show what I said—I want to read carefully what he said which I thought was interesting. I am not without sympathy to some of the underlying theology to which he referred. Therefore I hope he will allow me tonight—indeed the same applies in responding to the noble Lord, Lord Monson—to say that we want to read the careful observations which he made. He knows that I have been in correspondence with him on these matters. One tries to get out exactly what is required and to see how far, if at all, one can go and that I undertake to do. I think he knows I could not accept this amendment as it is but I am happy to pursue the matter with him.

Lord Coleraine

I should like to thank my noble friend for what he has said. It is clear that we belong to a broad church and I suspect that we may belong to more or less the same wing of it. I should also like to thank the noble Lord, Lord Monson, for his contribution and his support of my amendment. In view of what my noble friend has said, I willingly ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 29 not moved.]

Schedule 3 [Terms of a shared ownership lease]:

Baroness Birk moved Amendment No. 30: Page 67, line 2, at end insert—

("Right of Pre-Emption on Disposal

.—(1) The lease shall contain a covenant binding on the tenant and his successors in title that prior to any disposal falling within section 8(3) of the 1980 Act where the tenants total share is less than 100 per cent. then the tenant shall first offer in writing to the landlord to dispose of his share to the landlord and such offer shall remain open for acceptance for one month from the date thereof. If the offer is not accepted then the provisions of paragraph 7 of this Schedule shall apply. The amount payable under the covenant shall he determined by the formula — P=V(100-S)/100 where P = the amount payable under the covenant— V = the amount agreed between the parties or determined by the District Valuer as the amount which under this paragraph is to be taken to he the value of the dwelling house at the time of the offer; S = the outstanding share expressed as a percentage.

(2) The value of the dwelling house at the time of the disposal shall be taken to be the price which, at that time, the interest of the tenant would realise if sold on the open market by a willing vendor on the assumption that any liability under the covenants required by paragraph 6(1) and sub-paragraph (1) above would be discharged by the tenant and disregarding any improvements made by the tenant and any failure by the tenant—

1. (a) where the dwelling house is a house, to keep the dwelling house in good repair (including decorative repair);
2. (b) where the dwelling house is a flat, to keep the interior of the dwelling house in such repair.")

The noble Baroness said: This amendment, which is very fearsome looking with all its symbols, is put forward because we believe that in shared ownership schemes the local authority should have the option of first refusal when the owner or tenant wishes to sell up and move. The amendment sets out one way in which this objective might be achieved. Shared ownership means that the local authority has a continuing interest in the property of 50 per cent or less. The situation is clearly different from one where the purchase is outright. The proposed amendment does not interfere in any way with the right of shared ownership and would help by retaining accommodation in those authorities with pressing homelessness and waiting-list problems. Many authorities which already voluntarily operate shared-ownership schemes have a buy-back clause in the lease. In fact, the DoE model on voluntary shared ownership contains provisions for the local authority to have first refusal when the property is sold. What we are asking is that the same option should be available with the right to buy shared ownership arrangements. I beg to move.

Lord Bellwin

I noted that the noble Lord, Lord Graham of Edmonton, supported an identical amendment last year in another place and in his previous incarnation. But I have heard nothing which convinces me that this amendment is any more acceptable now than it was then. The philosophy underlying the Housing Act 1980 and this Bill is that, where the right to buy exists, restrictions on resale should he kept to an absolute minimum. It is true that we have made two exceptions: one in the case of sales in national parks and other rural areas, and the other in the case of dwellings particularly suitable for the elderly, under Clause 7 of this Bill. But in both instances the right to buy back is justified by special considerations relating either to the character of the dwelling itself or to its situation. There is just no reason why there should be a general right to buy back in the case of shared ownership sales, because no similar considerations arise. Why should someone be subject to this restriction on resale simply because he is buying his home on shared ownership terms? It has been suggested that his landlord should have the right to repurchase his home so that it can be resold on shared ownership terms. Authorities can already buy properties by agreement with their owners—whether former council tenants or not—for resale either outright or on shared ownership terms; so I do not find that argument very convincing.

I am of course aware that, under the Ministerial General Consents, authorities have been given discretion to impose pre-emption covenants under their voluntary shared ownership schemes; but the disposal arrangements adopted in the Bill make the inclusion of such a pre-emption clause unnecessary.

Under voluntary schemes, a shared owner who wishes to sell must either buy the outstanding shares and sell on the open market on a 100 per cent. basis, or attempt to sell his part interest in the property. Since, in the latter event, the shared ownership arrangements would be perpetuated, it was reasonable to give landlords the option of purchasing the shares themselves before allowing the shared owner to offer them on the open market.

But these unnecessarily complicated arrangements have not been followed in the Bill. Instead, we have made it possible for a shared owner, who wishes to sell without first having to buy the outstanding shares, to offer his home for sale on the open market for its full, 100 per cent. value. He is then required, when he sells, to pay the landlord the value of the outstanding shares. Consequently, the shared ownership arrangements in the lease will cease to have any effect when a shared owner resells. There is no reason to differentiate between these cases and the resale of dwellings bought outright under the right to buy, by imposing a preemption clause in one case but not in the other. I wonder whether the noble Baroness has considered that aspect. I am sure that she will know that these are the reasons why we cannot accept the amendment, which, in fact, is actually technically defective.

Baroness Birk

I am sure it is defective. Practically everything is. Why should this be different? It is getting rather late and we are tired anyhow. I will read what the Minister has said. But it does certainly seem to make a certain amount of sense, when there is shared ownership, for the authority to have the first option to buy it back, and then it would have the complete house. If it wants to sell it as a complete unit or in the meantime let it again, it has the property. The Minister explained the matter very carefully, but I am afraid that perhaps I did not take it in as carefully as I should have done; so unless he has something to add, I will read what he has said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Schedule 3 shall be agreed to?

Lord Monson

I must apologise: the complexity of this Bill is such that I did not fully grasp what the noble Lord, Lord Bellwin, said in reply to an earlier question about the 10 per year maximum ground rent, which appears in paragraph 5(2) of this schedule. Did I understand correctly that he was making the point that the British Property Federation had fears on this score over something called the Holly Lodge Estate which were in fact groundless?

Lord Bellwin

I do not recall the particular instance that the noble Lord mentions being specifically referred to. My noble friend Lord Kinnoull said he would write to me with details and when I received them I said I would be glad to look at them carefully and comment upon them. If the noble Lord, Lord Monson, is interested, I will happily make the same information available to him.

Schedule 3 agreed to.

Clause 13 [Notice claiming exercise of right]:

Lord Bellwin moved Amendment No. 31: Page 16, line 24, leave out ("(6)") and insert ("(6B)")

The noble Lord said: This is a minor drafting amendment consequential upon amendments based on Section 16 of the 1980 Act by Clause 5 of this Bill; and it is necessary to correct a previous oversight. It makes no material change to Clause 13. I beg to move.

On Question, amendment agreed to.

Clause 13, as amended, agreed to.

Clauses 14 to 17 agreed to.

Clause 18 [Recovery of service charges]:

Lord Bellwin moved Amendment No. 32: Page 12, line 35, leave out ("1957 Act") and insert ("Housing Act 1957 (in this Part of this Act referred to as "the 1957 Act")")

The noble Lord said: This is just a tidying-up amendment. I beg to move.

On Question, amendment agreed to.

Clause 18, as amended, agreed to.

Schedule 4 [Service charges in respect of certain houses]:

Lord Bellwin moved Amendments Nos. 33 and 34: Page 72, line 17, leave out ("except a Scottish firm")

Page 72, line 24, at end insert— ("( ) A Scottish firm is a qualified accountant, notwithstanding sub-paragraph (2)(a) above, if each of the partners in it is a qualified accountant.")

The noble Lord said: I should like to move these amendments together. As your Lordships will be aware, Schedule 4, together with Clause 18, extends to purchasers of public sector houses certain protections with regard to service charges. I beg to move.

On Question, amendments agreed to.

Schedule 4, as amended, agreed to.

Clause 19 [Vesting of mortgaged dwelling-house in local authority etc]:

Lord Bellwin: moved Amendment No. 35. Page 22, line 8, leave out from ("the") to ("a") in line 10 and insert ("1957 Act")

On Question, amendment agreed to.

Lord Bellwin moved Amendment No. 36: Page 22, line 11, after ("section") insert ("18A(2) or")

The noble Lord said: This is also a minor amendment consequential upon the introduction of the right to impose a pre-emption covenant in respect of the sale of a person's dwelling. It is a tidying-up amendment. I beg to move.

On Question, amendment agreed to.

Clause 19, as amended, agreed to.

Schedule 5 agreed to.

Clauses 20, 21 and 22 agreed to.

Schedule 6 [Amendments of sections 104B and 104C of.1957 Act]:

10.50 p.m.

Lord Bellwin moved Amendment No. 37: Page 75, line 4, after ("persons") insert ("(within the meaning of Chapter II of Part I of the Housing Act 1980)")

The noble Lord said: As your Lordships know, the purpose of Schedule 6—together with Clause 22—is to apply to the voluntary sales the changes made to the provisions governing right to buy sales by Clauses 4 and 8 of the Bill. This particular amendment relates to the addition of other categories of disposal to those which are exempt from discount clawback, and from the restrictive disposition covenants which may be imposed in national parks and areas of outstanding natural beauty, et cetera.

One of the additional categories of disposal to be exempt from such covenants is a disposal between members of the same family who have lived in the dwelling for 12 months prior to the disposal. The purpose of this amendment is merely to ensure that "member of the family" has the same meaning in both the right to buy and voluntary sales context. It is a technical amendment and I ask your Lordships to agree to it. I beg to move.

On Question, amendment agreed to.

Lord Bellwin moved Amendments Nos. 38 to 41 en bloc: Page 75, line 42, leave out ("in pursuance of section 104 of the 1957 Act") and insert ("under section 104 of the 1957 Act or section 122 of the 1980 Act") Page 75, line 44, leave out ("that Act") and insert ("the 1957 Act") Page 76, line 25, leave out ("in pursuance of section 104 of the 1957 Act") and insert ("under section 104 of the 1957 Act or section 122 of the 1980 Act") Page 76, line, 28 leave out ("that Act") and insert ("the 1957 Act")

The noble Lord said: These are minor technical amendments to apply the changes made by Schedule 6 to pre-commencement sales by registered housing associations. I beg to move.

On Question, amendments agreed to.

Schedule 6, as amended, agreed to.

Lord Bellwin moved Amendment No. 42: After Schedule 6, insert the following Schedule—