ALTERNATIVE ACCOMMODATION

HL Deb 17 July 1984 vol 454 cc1448-67

Interpretation

1. In this Schedule—

1. (a) "dwelling-house" has the same meaning as in section 8 of this Act,
2. (b) "prospective tenant" means the person who is to be granted a tenancy under that section, and
3. (c) "current dwelling-house" means the dwelling-house which, on the assumption that the circumstances do not fall within paragraph 2 below, would be required to be let to the prospective tenant under that section.

Cases where change of dwelling-house is necessary

2. Circumstances fall within this paragraph if either of the following Cases is applicable to them—

Case 1

By reason of the condition of any building of which the current dwelling-house consists or of which it forms part, the dwelling-house may not safely be occupied for residential purposes.

Case 2

The appropriate authority intend, within a reasonable time of the completion of their acquisition of the interest concerned—

1. (a) to demolish or reconstruct the building which consists of or includes the defective dwelling in question, or
2. (b) to carry out work on any building or land in which the interest concerned subsists,

and cannot reasonably do so if the current dwelling-house remains in residential occupation.

Suitability of accommodation

3. The suitability of accommodation is to be assessed by reference to the following matters, that is—

1. (a) whether it is similar as regards extent and character to the accommodation afforded by the current dwelling-house;
2. (b) whether it is reasonably suitable to the means of the prospective tenant and his family; and
3. (c) whether it is reasonably suitable to the needs of the prospective tenant and his family having regard to proximity to place of work and place of education.")

These amendments are, in part, in response to a point made in the proceedings on the Bill in another place by the honourable Member for Norwood about the extent of local authority discretion contained in the Bill. They are also intended to clarify the position of the owner in repurchase cases and the criteria to which the authority must have regard when granting him a secure tenancy under Clause 8 of the Bill.

As drafted, Clause 8(6) gives the authority discretion as to whether the secure tenancy should be of the dwelling of which the applicant is the occupier or of another dwelling, and discretion as to what constitutes a suitable alternative dwelling if that route is chosen. These decisions could not be reviewed in the county or sheriff court under Clauses 13 or 14 respectively. Normally, we would expect the repurchased dwelling to be suitable for continued occupation for a number of years, and assuming of course that the applicant wishes to take a secure tenancy—he may well opt to buy in the private sector with his proceeds of sale—he should normally be allowed to remain in that dwelling.

In most cases it will have been the family home for a number of years. We propose therefore that the applicant should be granted a secure tenancy of the repurchased dwelling-house except where, first, the state of the defective dwelling is such that there is a risk to the life or limb of the occupier in question and other persons living in the dwelling; or, secondly, the appropriate authority intends, within a reasonable time of repurchase under the Bill, to demolish or reconstruct the defective dwelling, or to carry out work on that defective dwelling being acquired under the Bill, and cannot reasonably do so with a tenant in possession of the defective dwelling under a secure tenancy.

If the applicant is to be granted a secure tenancy of another dwelling, that other dwelling should be, as far as practicable, similar in extent and character to the house being purchased, and be reasonably suitable to the means of the person to be granted the tenancy and of his family, and to his needs and those of his family as regards proximity to place of work and education. In other words, the ex-owner and new tenant is to be in circumstances as similar as previously as the wit of man and the local authority can devise. I am sure that this is fair all round. I beg to move.

Lord Graham of Edmonton

There is only one point I should like to raise. Will the Minister recall the illustrations I gave of the Southcote Residents' Association in Reading, who have been in touch on a range of matters? I am sure that they will have seen some relief in this Bill. I recalled, as the Minister was speaking, that one of the points they raised dealt with the situation of a person who has to leave a property while it is being reinstated and the costs he faces through having to leave. It may well be that the person would be housed in some other council accommodation, but even if he were, consequential costs could fall on him. The Minister is painting an attractive picture to the effect that if a person buys a £20,000 house for £10,000 and finds it is defective, under the Bill he is entitled to plead with the authority for either reinstatement or repurchase. The Minister is saying that in certain circumstances a person having lived in a reasonable house ought to be reasonably well looked after.

Are the Minister and his advisers saying that there is any element in the understanding—it may be part of the Bill, or an interpretation of it—whereby the additional but not punitive costs legitimately incurred, and which can be validated by an occupier who is an owner-occupier who is in this transitional period, can be met by the council, by the Government, by a grant or in some other way?

Lord Skelmersdale

Whenever one moves house, whether from a rented dwelling to a rented dwelling, from a rented dwelling to an owned dwelling or vice versa, costs are inevitably incurred. The consequential costs mentioned by the noble Lord, Lord Graham, are not included in this Bill because it would be unfair to do so. On this occasion, it is unfair to the local authority to do this at the expense of other occupiers of property, whether owner-occupiers or tenants, who would not have the same resource to draw upon.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendments Nos. 15 to 17 en bloc.

[Printed above.]

On Question, amendments agreed to.

Lord Skelmersdale moved Amendments Nos. 18 to 22 en bloc.

[Printed earlier: col. 1436.]

The noble Lord said: I spoke to these amendments with Amendment No. 4.

On Question, amendments agreed to.

Clause 8, as amended, agreed to.

Clause 9 agreed to.

Clause 10 [Designation under local schemes]:

Lord Graham of Edmonton moved Amendment No. 23:

Page 16, line 12, at end insert— ("(10) Where a designation has been made under this section by a housing authority and subject to (6)(a) and (b) above the Secretary of State shall make available to the housing authority an additional contribution to expenditure under Clause 14 of this Act.")

The noble Lord said: Local authorities may designate classes of dwelling within their own area as defective, but, in so doing, should be able to ensure that the appropriate resources are made available by central Government. I do not want to go over the allocation argument. The Minister has satisfied me that it is his intention that that be done.

Central Government have already agreed, by virtue of this Bill, to make available resources for the PRC dwellings. Therefore, if they accept that local authorities can designate further types as defective, they should also be willing to meet the costs. It should be borne in mind that under Clause 10(6), the Secretary of State has the right to veto a local authority's designated scheme within 28 days. Therefore, if he does not accept that a local authority is acting reasonably, he can take appropriate action. In other words, if the local authority does not wish to designate for a multitude of reasons—which can all be summed up in the one word "money"—then the Minister can take action. We are therefore only asking for additional financial help in circumstances where the local authority is seen to be acting reasonably by responding to defects in its own area. This could be the circumstance of the Smith houses and others that we referred to. I beg to move.

Lord Skelmersdale

To cut my response short, the question at issue is whether the Secretary of State should contribute towards the cost of repurchasing dwellings designated locally under Clause 10. The question is the proper balance of responsibility. The power of local authorities to make local designation under Clause 10 is designed to enable them to give assistance to owners who have bought dwellings which are now found to be defective by reason of design or construction faults that are peculiar to dwellings in that authority's area or in the area of only a few authorities—in other words, where there is no national problem. It must follow that those faults are the results of decisions taken at a local level as to the design or methods of construction of particular dwellings. In those circumstances, it is right, in principle, that the costs of giving assistance to owners to help them with consequences of those local decisions or practices should be borne locally and should not fall on the central taxpayer. It is this principle that is reflected in Clauses 10 and 15 in the Bill as drafted. I do not think that we should depart from it.

As a matter of fact it would be consistent with this basic principle if the Secretary of State were not to make the contributions under Clause 15 towards reinstatement grants given under local schemes made under Clause 10. We are not pressing that principle to that point and propose to take power in Clause 15 to make contributions towards expenditure on giving grants under local schemes. Reinstatement grants under this Bill have a family relationship with repairs grants under the Housing Act 1974 generally. In view of that, we think it right that we should not try to distinguish between reinstatement grants given in pursuance of a designation under Clause 1 and those given in pursuance of a designation under Clause 10.

Where grants are given under Clause 10, the Secretary of State will make a contribution to the local authority's expenditure at a rate of 90 per cent. This is a generous arrangement. If, as we hope, reinstatement is the main means of assistance under the Bill, the Secretary of State will contribute substantially to expenditure incurred as a result of local designations. As I said at the beginning, we do not believe it to be right for the central taxpayer to bear the entire responsibility for decisions taken at a local level. I hope the amendments will be withdrawn. If not, I must invite your Lordships to reject them.

Lord Graham of Edmonton

The noble Lord tempts me at this time of night. But I have been round the tea rooms quietly and there are more of them than there are of us—and there are very few of them. It is an interesting proposition that many local authorities who genuinely accept the equity of the need to designate where the Minister has not designated will be literally torn in their discussions as to their need to look after their local people and the additional burdens that will be borne upon them. The Minister rests on this on the premise that the houses that have the defects were taken on a narrow local basis, and therefore the local people, 20 or 30 years later, as the general taxpayers in need of housing, will have to pay more of the burden. It is rather sad and it is one of the unhappy aspects, because although the right to designate locally is provided for in the Bill, because of the need to look after other interests as well as the shortage of money I forecast that very few authorities will add that additional burden to the load they are already carrying. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 agreed to.

Clause 11 [Notices]:

Lord Skelmersdale moved Amendment No. 24:

[Printed earlier: col. 1448.]

The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 13.

On Question, amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 agreed to.

Lord Skelmersdale moved Amendment No. 25:

[Printed earlier: col. 1443.]

The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 9.

On Question, amendment agreed to.

Clause 13 [Jurisdiction of county court and rules of procedure]:

Lord Skelmersdale moved Amendment No. 26:

[Printed earlier: col. 1447.]

The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 12.

On Question, amendment agreed to.

Clause 13, as amended, agreed to.

Clause 14 [Jurisdiction of sheriff in Scotland]:

Lord Skelmersdale moved Amendment No. 27:

[Printed earlier: col. 1447.]

On Question, amendment agreed to.

Clause 14, as amended, agreed to.

Clause 15 [Secretary of State's contribution to expenditure]:

Lord Graham of Edmonton moved Amendment No. 28: Page 19, line 4, leave out ("may if he thinks fit") and insert ("shall").

The noble Lord said: Clause 15 begins: The Secretary of State may if he thinks fit"— there are draconian powers and there is real power— in any case contribute towards the expenditure incurred". We really want to probe the Minister. May I remind the Minister that, in discussions that we had with him outside the Committee, I was concerned to understand fully the circumstances in which the Minister, if he thought fit, would withhold his permission. What we are seeking here to do is to say that the Secretary of State shall in any case contribute; because, as we are under the impression, once a designation has been made and once the conditions under which the reinstatement grant or the repurchase can take place are fully met by the authority and the prospective seller of the house to the council, there ought to be no circumstances in which the Secretary of State is capable of withholding his authority.

We shall be satisfied if the Minister can tell us that this is a stop-gap, one cannot envisage any circumstances in which it would take place. But we certainly want the Minister to tell us under what circumstances, when his draftsman drafted this amendment, he could see it was possible for the present statutory right to be varied so that the Secretary of State would exercise his discretion.

We really want to know whether there is any need for this amendment and whether the Minister would assist the local authorities and others to help him to carry out the provisions of the Bill and certainly ease the minds of prospective sellers of houses. People may be advised that they conform in every circumstance, but some estate agent or solicitor, or some council, may say, "Well, it's all very well; you have gone as far as you can; but it is quite possible that the Secretary of State, for some reason that we don't know, might withdraw this power". We really want to know under what conditions that could occur.

Lord Skelmersdale

This is an issue which occurs in practically every Bill which comes before your Lordships, albeit in not quite such a form. I remember in the past having voted on such Bills as the Bees Bill to turn "may" into "shall", and I am sure we shall be doing the same sort of thing again.

Clause 15(1) provides that the Secretary of State "may if he thinks fit" make a contribution towards expenditure incurred by local authorities under the Bill. The noble Lord has expressed concern that this contribution should not be left to the discretion of the Secretary of State but should be mandatory; and this of course is the effect of the amendment, as he said.

I have already explained to the noble Lord outside the Chamber, and I am happy to do so today, that Clause 15(1) is drafted in the form of a discretionary power, but this is the customary form of such provisions. The drafting is based on Section 78(1) of the Housing Act 1974, which I need hardly remind the Committee was enacted by a Labour Government and which gives the Secretary of State power to contribute towards expenditure by local authorities in making grants under Part VII of that Act. Indeed, in response to an earlier amendment, I mentioned that same Part VII.

I am happy to give the noble Lord the assurance I believe he is seeking from the Government this evening, namely, that it is the Government's firm intention that the Secretary of State should make contributions under Clause 15 towards expenditure incurred by local authorities under the Bill. In view of this, I hope the noble Lord will be able to see his way to withdrawing the amendment.

Lord Graham of Edmonton

I am most grateful to the noble Lord. I picked up very carefully that it is the Government's "firm intention", and I understand that the noble Lord is unable to accept the amendment because it changes the very nature of the commitment from being discretionary. But in effect the Minister has defined "discretionary" in such a way that I am sure those outside the Committee will understand that there will be very rare exceptions, if any at all, under which an exception would be involved. I am not putting words into the Minister's mouth; I am using those words myself. I am very happy indeed to accept the reassurance that the noble Lord gives, that the fears which have been expressed to me may very well be groundless. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 29:

[Printed earlier: col. 1447.]

On Question, amendment agreed to.

[Amendment No. 30 not moved.]

Lord Skelmersdale moved Amendments Nos. 31 to 33.

[Printed earlier: col. 1447.]

On Question, amendments agreed to.

10.25 p.m.

Lord Skelmersdale moved Amendment No. 34: Page 19, line 19, leave out ("and")

The noble Lord said: In moving this amendment, I think it would be appropriate if I confessed to a sin. I am frequently asking your Lordships not to ask me to pre-empt decisions and discussions that are being made by my colleagues in Government, and I regret that inadvertently I have pre-empted remarks which may or may not be made by the noble Lord, Lord Graham, and indeed by my noble friend Lord Sandford. In speaking to this amendment I think it would be appropriate if I spoke also to Government Amendments Nos. 35, 36, 38, 39 and 40.

Amendment No. 35: Page 19, line 20, after ("repurchase") insert ("or of any payment under section (purchase of certain land by authority possessing compulsory purchase powers) of this Act, being a case in which there has at any time been a disposal of a relevant interest in the defective dwelling concerned by the housing authority or any authority being their predecessor")

Amendment No. 36: Page 19, line 20, at end insert— ("and

(c) in any other case of repurchase or payment under that section, 100 per cent.

Amendment No. 38: Page 19, line 21, leave out ("either case") and insert ("any of those cases")

Amendment No. 39: Page 19, line 23, leave out ("or any class of assistance") and insert ("or payments, or any class of assistance or payments")

Amendment No. 40: Page 19, line 24, after ("given") insert ("or made")

I also think it would be helpful to the Committee if, with this group, we could discuss Amendments Nos. 44 and 46, standing in the name of the noble Lord, Lord Graham of Edmonton.

Amendment No. 44: Page 19, line 43, leave out from ("Act") to the end of line 5 on page 20.

Amendment No. 46: Page 20, line 5, at end insert— ("and

() in the case of repurchase of dwellings owned previously by a public sector authority, not being the present housing authority or predecessor to that authority, the price paid for the acquisition of the interest concerned, together with any amount reimbursed under section 9 of this Act.")

All these amendments are concerned with the operation of the percentage of expenditure incurred by local authorities to be met by the Exchequer under Clause 15.

As I have said, I do not wish to anticipate what noble Lords may wish to say in speaking to their amendments, but I would hope that they might see their way not to move them, in the light of what the Government amendments propose.

Under Clause 15, subsection (5) limits, the Exchequer contribution to local authorities' expenditure in cases of repurchase would be a contribution equal to 75 per cent. of the price paid to the owner, less the defect value of the dwelling repurchased. The amendments tabled by noble Lords opposite seek to remove the defective value of the dwelling repurchased from the calculation of the Exchequer contribution: in other words, they seek to make that contribution 75 per cent. of the amount paid to the owner.

The first Opposition amendment, No. 44, would apply to all cases of repurchase and the second amendment only to repurchases of dwellings not sold originally by the housing authority: for instance, a house originally provided and sold by the National Coal Board.

The Government cannot accept these amendments. In both cases they ignore the fact that the housing authority will be acquiring an asset worth the defective value of the dwelling they repurchased. While that asset is retained, it will usually be capable of gaining rent without anything having to be spent on it for some years. It is right, therefore, that that value and stream of income should be taken into account in deciding the appropriate scale of the contribution by the taxpayer.

I would also remind the Committee that where the housing authority originally sold the dwelling, they will often have received a capital receipt from the sale. We do accept, however, that this will not have happened in those cases where they are purchasing dwellings originally sold by another public sector body. I quoted earlier the example of a National Coal Board house.

We feel that a strong case was put to me on Second Reading and subsequently followed up in discussions between myself, the noble Lord, Lord Graham, and representatives of the Association of Metropolitan Authorities and the Association of District Councils. We feel that this has great merit. The Government amendments have been brought forward in the light of those discussions. They provide that, where housing authorities are obliged under the Bill to repurchase a dwelling which was originally sold by another public sector body, the Exchequer contribution under Clause 15 will be 100 per cent. of the difference between the amount paid to the owner and the defective value of the dwelling repurchased.

I think the Government have gone some considerable way towards meeting the concern of local authorities in this matter, and I hope that noble Lords will recognise that where the local authorities put up a genuine and reasoned case they will be listened to. I hope that noble Lords opposite will agree that we have taken a reasonable attitude and, as I have suggested, will not move the amendments tabled in their names. But I shall be most interested to hear their reactions to what I have just said in moving my amendment.

Lord Sandford

Before the noble Lord, Lord Graham, indicates what he wishes to do with his amendment, may I say, on behalf of the Association of District Councils, that we welcome the Government's recognition of the special case that arises where the local authority is having to deal with houses which were provided in the first place by other public bodies such as the National Coal Board, the Atomic Energy Authority and so on?

In those cases, there really is no case for the local authority having to meet any part of the cost, and I was glad that my noble friend did not claim to have gone all the way to meet us, because if he had done so he would also have accepted the case that there is for the local authority being paid a fee for dealing with these particular houses. There are cases, in mining towns in particular, where these properties, which were provided in the first instance by the Coal Board, have to be dealt with quickly, because this is an urgent matter in the case of private owners. They cannot be part of the local authority's planned expenditure, because the houses have nothing to do with their housing stock. They have to be dealt with while there are other houses designated as defective, and therefore felt by their tenants to be defective, which cannot be dealt with because the authority is acting as agent in respect of these houses provided by other public authorities. I am sorry that my noble friend was not able to go that far, because this still leaves the housing authorities with something of a problem. But he has met the main point, which is that there should be 100 per cent. grant in these cases, and we are grateful to him for that.

Lord Graham of Edmonton

I want to say immediately that I fully share the satisfaction of the noble Lord, Lord Sandford, with the manner in which the Minister and his colleagues have sought to go a considerable way on this aspect of the Bill. I think it has been done genuinely, on the basis of looking at the special inequity that would flow to authorities who, through no fault of their own—not having bought the houses, and not having had any capital receipts—are faced with what we consider to be some of the liabilities.

I am very grateful to the Minister for Housing himself, who took a special interest in this matter and who arranged for very fruitful discussions to take place with the Association of District Councils and the Association of Metropolitan Authorities, together with the Minister and myself. The outcome of those discussions was the move towards the present situation. When I look at the authorities which are likely to be assisted, I see that some will be assisted considerably. For example, when I look at the document which was issued by the department last November (the blue book) I see, so far as the known extent of the problem is concerned, under the heading "Owned by other Public Bodies" that in Leeds there are 210, in Rotherham 361, in Wakefield 230, in Mansfield 144, in Colchester 130, and in Huntingdon 462. There are other statistics which clearly indicate that some authorities will be substantially benefited by the movement that the Minister has made.

Therefore I am not inclined to be churlish—I am certainly not churlish at any time—or to be dog in the mangerish about some other matters for which we should have liked to see some easement. The Minister has satisfied many people, not least the authorities and the councils that they represent. Certainly, he has assisted the passage of the Bill and therefore we are very pleased indeed not to move our amendments. So we are very grateful to the Minister for the action he has taken.

Lord Skelmersdale

I am most grateful to both noble Lords. I am reminded of Pooh, who always wanted more honey, of Oliver Twist, who asked for more, and of the young girl who went home and assured her mother that she had not gone all the way. So far as a fee to local authorities is concerned, which was raised by my noble friend Lord Sandford, this would involve a precedent which I have a feeling local authorities themselves would not like in other parts of their relationship between local and central government. So it might be appropriate at this moment if we left the discussion there.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendments Nos. 35 and 36:

[Printed above.]

On Question, amendments agreed to.

10.35 p.m.

Lord Graham of Edmonton moved Amendment No. 37: Page 19, line 21, leave out ("other") and insert ("higher").

The noble Lord said: If the Minister can reassure us on this matter, we shall be happy to withdraw the amendment. We are talking in terms of the percentages which are applicable and are saying that page 19, line 21, of the Bill should read: or such higher percentage as (in either case) the Secretary of State may with the consent of the Treasury by order specify". We are uncertain about the percentages which will be engraved upon the hearts of borough treasurers and individuals who seek advice and guidance. If there is no intention to reduce the figure, we are saying that if there is a variation it can only be increased. In times of financial stringency, or for any other reason, we should not want there to be a watering down or a dilution of the benefit which appears on the face of the Bill. I beg to move.

Lord Skelmersdale

I have already given half of the assurance for which the noble Lord was looking on a previous amendment. I can assure the Committee that the Government have no intention of reducing the percentage contribution from that stated on the face of the Bill.

Lord Graham of Edmonton

With that assurance—which I accept is very fair and clear—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendments Nos. 38 to 40:

[Printed above.]

The noble Lord said: I beg to move Amendments Nos. 38, 39 and 40 which were spoken to with Amendment No. 34.

On Question, amendments agreed to.

Lord Skelmersdale moved Amendment No. 41:

[Printed earlier: col. 1447.]

On Question, amendment agreed to.

Lord Graham of Edmonton moved Amendment No. 42: Page 19, line 30, at end insert ("provided that such provision is at all times higher than that described in subsection (3) above")

The noble Lord said: I beg to move Amendment No. 42 which gives to the Minister the opportunity to repeat the assurance which he gave on Amendment No. 37: that there is no intention to do other than give effect to what appears on the face of the Bill. I should like to hear the Minister say that again, because the words are lovely‡

Lord Skelmersdale

To save time, perhaps I might say "Ditto".

Lord Graham of Edmonton

I beg to leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 43:

[Printed earlier: col. 1447.]

The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.

On Question, amendment agreed to.

[Amendment No. 44 not moved.]

Lord Skelmersdale moved Amendment No. 45:

[Printed earlier.]

The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.

On Question, amendment agreed to.

[Amendment No. 46 not moved.]

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 47: Page 20, line 5, at end insert— ("and () in all cases of repurchase, the cost incurred by the housing authority in rectifying the qualifying defects and associated works; the costs incurred in design, supervision and administration; and all other reasonable costs.")

The noble Lord said: In rising to say that I do not intend to move this amendment, I should point out that this is part of the HIP allocation syndrome. We are saying that councils should have reimbursed to them the cost of repairs after repurchase. However, the Minister has satisfied me that the intention is to make provision for this, and that the money required for the purpose will be taken into account when the HIP allocations are made. All I wish the Minister to do is to raise his eyes and nod his head. He has done so and the record will show that the Minister has indicated that my understanding is at one with his.

[Amendment No. 47 not moved.]

Lord Graham of Edmonton had given notice of his intention to move Amendment No. 48: Page 20, line 16, at end insert ("save that for the avoidance of doubt it is hereby declared that payment by the Secretary of State under this section shall be payable notwithstanding that the Housing Revenue Account of the recipient authority is not in deficit.")

The noble Lord said: This amendment is on a par with the earlier amendments. Therefore I do not intend to move it.

[Amendment No. 48 not moved.]

Clause 15, as amended, agreed to.

Clause 16 agreed to.

Lord Skelmersdale moved Amendment No. 49:

[Printed earlier: col. 1439.]

The noble Lord said: I spoke to this amendment with Amendment No. 6. I beg to move.

On Question, amendment agreed to.

Clause 17 [Rules and orders:]:

Lord Skelmersdale moved Amendment No. 50:

[Printed earlier: col. 1439.]

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 51:

[Printed earlier: col. 1442.]

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 52:

[Printed earlier: col. 1439.]

On Question, amendment agreed to.

Clause 17, as amended, agreed to.

Clause 18 [Expenses]:

Lord Stallard moved Amendment No. 53: Page 21, line 15, at end insert ("and the expenses incurred by the Secretary of State under this Act and any increase attributable to this Act shall be in addition to the Housing Investment programme allocation made available to local authorities for 1984–85 and additional to the published expenditure plans for future years").

The noble Lord said: Notwithstanding the atmosphere that has prevailed for the past few minutes, I think that I ought to move this amendment, however briefly, in the hope that the noble Lord the Minister will repeat some of the assurances he has already given us. In moving this amendment it is appreciated that it can never be certain that any monies made available through the housing investment programme are genuinely additional.

However, the clause as it is worded gives us no assurance whatsoever that the money incurred by this Act will in any way be additional. Indeed, on the investment programme allocations for 1984–5, and those proposed for future years, the Government have continued to cut the housing capital programme, and the money provided for defective dwellings is simply having to be made available by local authorities from the expenditure which would have gone on other heads. We have already mentioned a number of these aspects in previous amendments. Unless additional resources are made available therefore other areas of housing activity will suffer. Bearing in mind that housing investment programmes have already been cut by the present administration by 45 per cent. since 1979 in real terms local authorities are simply unable to cope with any additional responsibilities without additional resources.

We know already that new housebuilding has suffered and suffered quite dramatically in many areas. Council repair programmes have been sadly neglected and the results of this can be seen in any inner city; and certainly in London. Great areas in London stand neglected because of this. In the present 1984–5 HIP negotiations I understand that the Government have shown a willingness to redistribute resources between authorities, and that is completely different to giving additional monies. As I understand the situation, it is simply a redistribution of the existing monies between local authorities.

But the Association of Municipal Authorities have found in their discussions with local authorities that authorities with known large defects problems have actually received a decrease in allocations. In other words, this redistribution has resulted in some authorities with huge problems receiving less in their HIP allocation than they are entitled to. Our purpose therefore in moving this amendment is to ensure that not just a redistribution takes place but more additional resources outside the existing framework is necessary if local authorities are going to have to take on the extra duties and burdens provided for in this Bill. I beg to move.

Lord Skelmersdale

There is really very little, if anything, that I can add on housing investment programme allocations and the local authorities' expenditure which has not been said before. What I think I can say is that I am horrified—and I am sure the noble Lord, Lord Sandford, who regrettably has left the Committee—by the suggestion—I think it was originally from the noble Lord, Lord Graham—that there should be divisions into sections of the global HIP. I cannot believe that any sane local authority would want this because it would mean that they were not able to transfer the money to where they very properly feel it needs to be used in their own area after the HIP allocation has been given to them.

I do not believe that this is appropriate. If I was the Minister for Housing—noble Lords will welcome the fact that I am not, and I rather think that I might join them—then I should say that this was a non-starter. When there is something that I can add to what I have said on HIPs—not just in respect of this matter but generally—then either I or my noble friend Lord Bellwin will come to the House and tell your Lordships.

Viscount Hanworth

There is only one thing that can be said about this. It seems that the Government are introducing legislation—the Housing and Building Control Bill was another instance—which requires extra expenditure, all of which presumably comes out of the same Vote in the end, without any guarantee that this Vote will be increased. One must point this out again and again and again.

Lord Graham of Edmonton

May I respond to what may very well have been a misunderstanding arising from my earlier remarks? When the HIP allocation is made, the Ministry (which means the officials) need to be satisfied what it is that the bid is designed to meet. There may be a bid of £10 million, for instance. They will need to ask, "What do you intend to spend the money on?" The council may reply that it has a problem with three big council estates which need completely rewiring, and that together with work on two other estates, £6 million is needed for that. The council may also have a need to take account of other repairs and to build certain houses. In this instance, the council may need to take account of the fact that it has so many houses which are defective. The council may need £15 million for those purposes. In addition, it may need to make allowance for improvement grants.

One of the problems in Birmingham which I well recognise is that there is an enormous backlog of improvement grant demands. When the council in Birmingham calculates its needs, it has to ask, "How do we satisfy the needs of a growing list of people who want legitimately to tap a legal source of public funds to improve their houses?" One of the problems which Birmingham will have to face is that there will be an additional head under which to start to built up the council's case for the global sum involved.

The Ministry then has to make a decision in the light of its overall restrictions. It will say, "Here is an authority that needs £15 million and which has a case for £15 million. But we are going to allocate £9 million because that is fair in our view". What I am really saying is that of course it is right that the Ministry do not have to allocate that sum and say that £4 million is for one purpose and £3 million is for another. An authority is free to exercise virement across the board. It has the £9 million and can spend it all on one of its needs rather than on another. But we are saying that the authority needs to be satisfied that there is a sum of money which has been clearly given, and which is understood by both the authority and the Ministry as being designed to meet this additional burden.

Having said that, a local authority might very well decide that it was not going to meet its commitment under a certain head because, as I believe the Minister said, no one has an absolute right to insist that the authority shall give them a reinstatement grant, et cetera. All we are saying is that the Minister should take on board the problem that an authority which wishes to meet all its obligations has; that there will be a further problem in addition to all the problems it has now.

Lord Skelmersdale

Yes, but what I was saying was that if the local authorities go too far along that road, as the balance, if one likes, there will have to be a direction from central government that the local authority will at the end of the day spend that money on those particular projects. It is that which I suggest is not in the interests of local authorities. But I take the point that the noble Lord has made.

Lord Stallard

I have listened to the Minister. We have repeated in a number of the amendments the question of the HIP allocations. I do not doubt that we shall return to that at a later stage of the Bill. I think that it represents one of the two most controversial elements—the discriminatory nature and partiality of the Bill and the lack of adequate resources. The noble Viscount, Lord Hanworth, underlined that fact perfectly well. The Government seem intent on introducing new measures at a time when local authorities are probably suffering the most stringent financial controls that they have ever suffered. We have listed the restrictions, cuts and restraints on local authority expenditure. As I have said, I have no doubt that we shall return to this issue at later stages of the Bill. For the time being, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 agreed to.

Clause 19 agreed to.

Clause 20 [General interpretation]:

Lord Skelmersdale moved Amendment No. 54:

[[Printed earlier: col. 1445.]

On Question, amendment agreed to.

Clause 20, as amended, agreed to.

Clause 21 agreed to.

Clause 22 [Short title, commencement and extent]:

Lord Graham of Edmonton moved Amendment No. 55: Page 26, line 40, after ("appoint") insert ("but not earlier than 1st April 1985").

The noble Lord said: This amendment may well have been overtaken by earlier amendments and particularly the concession that the Minister has given us, for which again I express our appreciation. In this amendment we are concerned to try to rationalise the period that the authority will need before beginning operations. For instance, an allowance cannot possibly be built into the HIP allocation for the current year to take account of that. The Bill will go from this place to another place, and then receive Royal Assent. One assumes that within a matter of weeks after that it will be enacted; the appropriate orders will begin to flow, and then the moneys to be made available by central government and the local authority will need to be found.

We seek to make the Bill effective from 1st April next year, when an HIP year begins. If the Minister can tell us that, if the Bill comes into operation before that, there is a mechanism built-in, if not retrospective, at least for next year's allocations, to make provision to meet the financial obligations, I am sure that that will satisfy those outside who asked me to put forward the amendment. I beg to move.

Lord Skelmersdale

I can tell the noble Lord that the first alterations that may be necessary to HIPs are already under discussion. Indeed, the few dwellings that will be involved in the remaining months up to 1st April have already been taken into account in setting this year's HIPs, so we are in advance of the situation that he warns us of.

Further than that, as I have said again and again, the real point of the Bill is to help poor, unfortunate people who are in this position through absolutely no fault of their own. The sooner that we can get it onto the statute book, the sooner they will be helped.

Lord Graham of Edmonton

I appreciate that. When a local authority asks me where it is to get the money from. I shall answer, "You have already had it." If it was built into this year's HIP and it was possible to forecast the extent to which it was needed then, in effect, local authorities have already had in this year's HIP a notional figure based on a hypothesis. Let us hope it was right. In that circumstance there is no need for this amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Schedule 1 agreed to.

Schedule 2 [Repurchase]:

10.56 p.m.

Lord Stallard moved Amendment No. 56: Page 28, line 32, at end insert (", less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned.")

The noble Lord said: It appears that the amendment as printed on the Marshalled List contains a typographical error in that the word "than" after "less" should not be there. In other words, the amendment should read: less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned". The word "than" should not be in the amendment, as it gives it totally the opposite meaning.

I think the purpose of the amendment is reasonably obvious. We say that the discount should be repaid. It was given in the first instance to encourage tenants into owner-occupation and if they return to rented premises, the discount should be returned. It seems perfectly reasonable to suggest that.

The cost-flow provisions of the Housing Act 1980 and the second discount entitlement provisions of the Housing and Building Control Act 1984 are not adequate protection against financial exploitation, particularly if the dwelling is repurchased in the future by another member of the household. We shall develop that point in a number of other discussions.

We suggest, too, that if the amendment is successful—and I hope the Minister will accept it—perhaps the Minister himself might move a further amendment to allow a tenant a completely new and unfettered discount in the fresh circumstances on any new or subsequent purchase. I would also point out that this amendment will give an incentive to the present owner to buy another house and remain in owner-occupation, rather than exercise his easy option of becoming again a tenant paying rent. For those obvious reasons, I beg to move.

Lord Skelmersdale

I must say I am rather surprised by the amendment moved by the noble Lord, Lord Stallard. It is so uncharacteristic of him. It is sniping at a small section of those people who have exercised their right to buy which has been given to them after, I should be the first to admit, quite a struggle in debates in Parliament on two occasions—in 1980 and again this year.

What the noble Lord is seeking to do is to disadvantage the ex-owner of the defective house which is repurchased by the local authority at the expense of another owner who is very much better off and who can sell his non-defective house, which he has bought under the right to buy, on the open market and then apply to become a tenant again. Obviously he will not go into a high position on the council waiting list, but there is no earthly reason why he should not get on to the council's waiting list and start the process again, if that is his wish. In this I think that the noble Lord's amendment is, as I said, disadvantaging the ex-owner of a defective house as against somebody in the open market. I do not think that is what the noble Lord intended.

Lord Stallard

I certainly had no intention of sniping. That is not our intention, but I take the point the Minister makes. In the amendment that I shall be moving in a few seconds' time, the motive will perhaps be clearer. In the meantime, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 57:

[Printed earlier: col. 1448.]

On Question, amendment agreed to.

Lord Stallard moved Amendment No. 58: Page 29, line 22, at end insert— ("(f) that a reduction in value be made where, in accordance with section 2(3)(c) of this Act, the price for disposal took some account of the presence, or latent presence, of the qualifying defect.")

The noble Lord said: This is a slightly different argument. I am sure that the noble Lord the Minister will notice the difference without my making a long speech. Where the original disposal has taken some account—even though it may not be adequate—of the defective nature of the type of dwelling, that part should be reimbursed. This is a fairly straightforward amendment. If the price was reduced to some extent by the public sector authority because of the defects, the value upon repurchase should be reduced by a commensurate amount. I beg to move.

Lord Skelmersdale

As the noble Lord explained, although not quite so specifically as I shall, Clause 2(3)(c) provides that one of the conditions of eligibility is that the price paid by the owner should not have taken any, or any adequate, account of the defect. It is theoretically possible that an owner will be eligible for assistance and that the price paid by him took some account of the defect. I say "theoretically" because I think that that is so rare a possibility that one can for all practical purposes discount it.

The condition in Clause (2)(3)(b) provides that the owner must have been unaware of the defect when he purchased the dwelling. If he knew of the defect he is not eligible, so I see no scope for abuse of the provision. We have, however, included the provision in Clause 2(3) (c) to cater for the possibility that the price may have been agreed at a level which reflected, to some extent, the existence of, perhaps, what was considered to be superficial damage but in reality has emerged to be a serious structural fault that we have been talking about throughout our consideration of the Bill. The reduction in purchase price would obviously be totally inadequate to deal with that major defect. Obviously, in such cases, it would be right to reduce the repurchase value under the Bill.

I think that we have covered, albeit in a slightly different way, the point that on this occasion has been worrying the noble Lord. I hope that in those circumstances he will feel able to withdraw the amendment.

Lord Stallard

I am grateful to the noble Lord for that reply. When he says that these will be exceedingly rare circumstances and, therefore for that reason he cannot accept the amendment, I would have thought that if they are to be that rare he could equally accept it. I am prepared to read what he says and take advice on it because he has covered different ground. Perhaps we shall then come back to the matter at the next stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 59:

[Printed earlier: col. 1445.]

On Question, amendment agreed to.

Lord Stallard moved Amendment No. 60: Page 31, line 1, leave out paragraphs 5 to 9.

The noble Lord said: This part of the schedule—the start of the word "schedule" would be pronounced as "sk" where I come from, but that is another matter—runs entirely contrary to all established practice and imposes an unacceptable obligation on local authorities to discharge all existing charges that would have been created by the private owner. All of us know the existing situation and that local authorities have never been expected to accept this burden previously.

In normal circumstances, when a purchaser is buying a house, it is up to the existing owner to discharge his responsibilities for mortgages, legal expenses and so on, whereas this Bill expects local authorities to take such responsibility. While the owner would retain a personal liability, the local authority would have to pursue this against him without any security at all. This runs contrary to all existing practices and procedures that have lasted for a long time. With those few remarks, I hope that the noble Lord the Minister will be able to accept our proposal. I beg to move.

Lord Skelmersdale

The noble Lord, at the last moment of tonight's Committee stage, has hit upon a very complicated problem. I hope therefore that he will not mind if I spend a little time on my answer. The purpose of Part II of Schedule 2 is to ensure that an interest in land acquired by an appropriate authority is unencumbered by any charge—typically a mortgage—to which that interest was subject immediately before its acquisition. Many of the dwellings acquired in pursuance of Clause 6 will be mortgaged. Some bought under the right to buy will also be subject to a charge to secure the repayment of discount. Where an interest in land subject to a mortgage or other charge is being sold, there are two possibilities: either the mortgagee or the chargee can release that interest from the charge, on payment of the sum due, before the sale takes place, or the interest passes to the new owner subject to the mortgage or charge which binds the interest in the hands of the new owner.

Further, where an interest in a defective dwelling is acquired in pursuance of Clause 6, it could as a result of various actions by the owner he mortgaged for an amount which exceeds the price payable under Part I of Schedule 2. In such a case the mortgagee or chargee—or more than one of them if there are several charges—may not on the sale be able to recover all the money owed to him. The purpose of Part II of the schedule is to ensure that a mortgagee cannot prevent or delay an acquisition in pursuance of Clause 6, that an interest in land acquired under Clause 6 is free of any such charge in the hands of the appropriate authority, and that the purchase price is applied in paying off the charges according to their priority.

It is possible that, where a mortgage or charge is discharged by virtue of these provisions, a mortgagee will find that the interest in land is discharged from his interest and that he receives less than the sum due under the mortgage. However, the mortgagee will have received more money than he could have expected had he exercised his power of sale; and, indeed, more money would be available for the redemption of charges than the security is actually worth. Even after the charge on the interest in land has been discharged, the mortgagee would still have an action to recover the debt against the mortgagor on his contract.

In a conventional sale of a dwelling-house under English law the mortgagee is represented when the transaction is completed, and on payment of the sum due to him he releases his charge on the land. Nothing in Schedule 2 will prevent this happening where agreement can be reached. Paragraph 8 of the schedule preserves the position in this respect.

Paragraph 6 of Schedule 2 secures the discharge of an interest from a relevant charge. Paragraph 7 ensures that the purchase price is paid to the mortgagees for the purpose of redeeming the charges rather than to the mortgagor, so the mortgagor cannot simply disappear with the money; and if the authority do not either apply the money in redeeming the charges or pay it into court under paragraph 9, the charge on the land is not discharged. The effect of paragraph 8 has already been described. Paragraph 9 deals with the case where it is difficult to ascertain how much is payable, or to whom, in relation to any charge; in such a case the money or part of it may be paid into court.

These provisions are complicated, as I said, but I hope the Committee will agree that the policy is desirable and that they do justice in a case where there may not be enough money to go round. The provisions are not unprecedented—surprise, surprise‡ There are similar provisions in the Leasehold Reform Act 1967 relating to the discharge of charges on the landlord's interest.

Part II does not apply to Scotland. Instead, Clause 7(3) requires that the seller offers a good and marketable title to the defective dwelling. This is the normal conveyancing position in Scotland and it is not necessary to devise similar provisions for Scotland.

I do not possibly expect noble Lords opposite to take a decision tonight on this matter, but I hope they will read very carefully what I have said; and, if necessary, I shall come back to them in correspondence.

Lord Stallard

I am grateful to the noble Lord the Minister for that explanation. He will not be surprised if I say that I expected him to say that. I daresay that all noble Lords present will have understood completely and totally the burden of his reply. Certainly we will read with great care what the Minister has said; and no doubt, as he will accept, we will return to this at later stages of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2, as amended, agreed to.

Lord Skelmersdale moved Amendment No. 61:

[Printed earlier: col. 1448.]

The noble Lord said: I spoke to this amendment with Amendment No. 14. I beg to move.

On Question, amendment agreed to.

Schedule 3 agreed to.

House resumed: Bill reported with the amendments.