Housing Defects Bill

HL Deb 17 July 1984 vol 454 cc1423-48

8.56 p.m.

Lord Skelmersdale

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Skelmersdale.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL CATHCART in the Chair.]

Clause 1 [Designation of defective dwellings]:

Lord Stallard moved Amendment No. 1: Page I, line 15, leave out from ("which") to ("is") in line 16 and insert ("is a building in a class designated under this section and where defects attributable to "the qualifying defect" have become evident and are substantial").

The noble Lord said: I beg to move, on behalf of my noble friend, the amendment standing in our name on the Marshalled List. It seems to us that the clause as it stands is far from clear. If anything, it would mean in our view exactly the opposite to what it ought to mean. The present clause—and it is worth reading it—says, Any dwelling which a building in a class designated under this section consists of or includes is referred to in this Act as a 'defective dwelling'; and in this Act in relation to such a dwelling"— and so it goes on. That would appear, in our view, to mean that any building in a class designated under this section would qualify. Our amendment would make it clear that local authorities are expected to give assistance where the dwelling is actually defective and not simply because it is in a class designated as defective. It is quite a different interpretation. We feel that if this amendment is not made, local authorities will be inundated with applications even though no defect has yet emerged and there is no need yet for assistance.

Under the Bill as it stands resources would be directed to dwellings where little or nothing is wrong with them at the expense of other priorities. In our view, the amendment is consistent with Government's thinking. Ministers in another place and here have said that defects may not emerge for as long as 10, 20 or even 30 years and they have said that local authorities will be able to spread the financial burden over a number of years. This being the case, no assistance should be given until it is necessary to give it.

If the Ministers remain concerned about those owners who wish to move—and that may be in the Minister's reply—but where the class of dwellings is unmortgageable, then we should be invited to make a further amendment which makes it clear that the assistance is for reasons of mobility and not because of the defects. I hope that the Minister will consider that point. If the Government consider that to be the case then a further amendment should be forthcoming from the Minister himself to say that these provisions are being made for reasons of mobility, because then repurchase could be undertaken by the local authorities with full compensation if that were the case.

It seems to us perfectly reasonable to move an amendment couched in the terms that we propose to clarify the situation, as I said at the beginning, because it seems that otherwise local authorities will be in real trouble far earlier than necessary. I beg to move.

Lord Skelmersdale

No, my Lords. I am afraid that I must tell the noble Lord, Lord Stallard, that this amendment is not consistent with Government thinking on this Bill. Indeed, the amendment undermines the fundamental purpose of the Bill. It is true that the prefabricated reinforced concrete dwellings with which we are concerned in this Bill may well not show visible or evident signs of structural defects for perhaps 20 years or more and that the dwellings will continue to provide good housing during the intervening period. In terms of structural stability and safety there is no immediate problem. But the amendment closes its eyes to the cardinal point that there is nevertheless an immediate problem for owners of these dwellings.

The findings of the Building Research Establishment indicate that the houses which use prefabricated reinforced concrete load-bearing components—which we have said we intend to designate under the Bill—are all subject to deterioration which will inevitably lead to serious structural damage well within the period of further life which the building societies require if they are to lend on mortgage. The effect is not overnight to render the dwellings unsafe, but to reduce overnight substantially their value. This is the problem which faces the owner and which the Bill is designed to deal with.

It matters not that the damage has not yet appeared; the owners of these dwelling will have bought them in good faith from the public sector on the basis of a defect-free value. Often they will have sunk all their resources into the venture, and indeed will have committed themselves for the next 20 years or so in terms of mortgage repayments and so on. They now find their homes are worth substantially less than they paid for them because of the discovery of those defects in their design and construction. The houses are unmortgageable, certainly at anything like their defect-free value. For people who are required to sell their homes, perhaps to move to another area for employment reasons, it is nothing short of disastrous; they either cannot sell their homes or only at a defective value, incurring a considerable loss on the price they originally paid and—I say it again—through no fault of their own.

In this Bill the Government, on behalf of the public sector which originally sold the dwellings, are recognising their responsibility towards these people who purchased in good faith. The Bill provides that the basic criteria should be that the dwelling is defective by reason of its design or construction in that its value has been substantially reduced, as a result of the defects becoming generally known. Having said that, I must say that this is my first reaction to the noble Lord's amendment, and I shall most certainly want to read carefully what he has said in moving it.

Lord Stallard

I am very grateful to the Minister for his last statement. Until then I thought I had opened the Committee proceedings on a reasonable note by saying that I thought I understood the Government's thinking. I obviously did not. I had hoped I understood any reasonable Government's thinking. If they were saying the defects would not appear for 10, 20 or 30 years, why then erect a panic situation where people will be demanding their compensation long in advance, perhaps, of its being necessary? Would it not have been far more sensible had the Government been thinking, as I anticipated or accused them of thinking—God help me!—that it may have been easier to allow local authorities and tenants to plan this matter on a phased basis, or some other basis, but certainly not to rush in on a panic basis and create what could well be a chaotic situation so far as local government finance is concerned?

I shall have to read carefully what the Minister said; he read it fairly fast, and I am not criticising him for that, but I got the impression that there were a number of contradictions in his reply in relation to the clause and amendments. I would certainly want to read his reply and I reserve my position for the next stages of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Stallard moved Amendment No. 2: Page 2, line 38, at end insert— ("() No designation or variation or revocation of a designation shall take place under this section unless there has been full and proper consultation with the local authority Associations and such other persons and bodies as the Secretary of State thinks fit.").

The noble Lord said: This amendment seeks to insist on or enforce some consultation with the local authority associations and such other persons and bodies as the Secretary of State thinks fit before any designation or variation or revocation of a designation takes place. Again, it would seem to us a very sensible thing to do, because at least 90 per cent. of the defective dwellings are in local authority ownership, and in some cases many more. Only 10 per cent. of these dwellings have been sold, and therefore it is the local authorities who are most aware of the extent of the defects and the necessary remedial works.

With regard to the prefabricated reinforced concrete dwellings which the Secretary of State has announced he is designating under this Bill, there has been no formal consultation with local authority associations, nor, therefore, with the local authorities themselves. We have not been given the opportunity either inside or outside this House to say whether the dwellings should be so designated. The Building Research Establishment has conducted a random sample of these dwellings, but this is small in relation to the total number and takes little account of the relative priority of these dwellings compared with other types in local authority ownership.

Local authorities are, of course, extremely worried about future designations; of course, there is no certainty that the Building Research Establishment will undertake any sort of survey on any new types. Whether or not this work is done by the BRE, we feel on this side of the Committee that it is essential that local authorities are consulted and allow the opportunity to give details of the extent of the defects of the dwellings in their ownership and of those that they have recently transferred.

Surely, to make a designation without consultation is not only unreasonable, it is almost verging on the irresponsible, because the Association of Municipal Authorities, in reports both in 1983 and in 1984 which noble Lords will have read, examined this situation and came to the conclusion that a more thoroughgoing and comprehensive study is now needed.

Having listed a whole number of faults and defects that local authorities had found in existing structures, I felt that this was a case needing urgent consultation. The local authority experience, the experience of thousands and thousands of tenants, the consultations that have taken place with those tenants and residents and their organisations and with the voluntary organisations, Shelter and other people who have been involved in this, must be tapped. There must, in our view, be consultation if we are to get the best solution possible for everybody concerned. Therefore, before any further dwellings are designated, we think it is a perfectly reasonable thing to have this kind of consultation. I beg to move.

Lord Graham of Edmonton

In order to be helpful to the Minister, who I know wants to be helpful to the Committee and to those who are concerned, may I make an additional comment to augment those made by my noble friend Lord Stallard? What we are worried about in this clause, and also in these amendments, is, quite frankly, the dilemma which faces not only the Government but particularly local authorities. We made the general case at Second Reading that the designation places an unfair burden on local authorities. We shall have arguments and perhaps more news about that later. The dilemma for local authorities, quite frankly, is this. While they are not looking for trouble, when people are in trouble—like the Minister on this particular point—they are anxious to try to meet the case.

Perhaps I may remind the Minister of the case that I raised on Second reading in respect of my honourable friend Mr. Terry Davis, the Member for Hodge Hill. This was about the Smith houses, and the fair point that was made by the Minister. Not only were they not designated, but, in order to merit, one also has to be satisfied that there was not only a local circumstance but a national circumstance, or certainly more than a local circumstance. I want to say that, in the diligent way in which my honourable friend Mr. Terry Davis goes about his work, he draws my attention to a Question for Written Answer that was put down in the other place on 5th July by a political friend of the Minister, Sir Reginald Eyre. He asked the Minister to list the constituencies in which Smith houses have been reported to have defects. The constituencies that were listed then were: Birmingham, Hall Green, Hodge Hill, Northfield and Yardley, Ashfield, Amber Valley, Leicester East and Cardiff West. That is a fair geographical spread: it covers Birmingham, the Midlands, and down to Cardiff. My honourable friend Mr. Terry Davis also mentions the constituency of Aldridge-Brownhills, if that is the right designation. The point I want to make is that there is a dilemma and a maximum need for consultation in that particular way.

In addition, I should like to ask the Minister to take on board the question for consultation, because I have a letter here, written by the Deputy City Housing Officer of the City of Birmingham, referring to the problems facing an authority in this matter. The letter was written to my noble friend Lady Fisher, who had intended to be present, but unfortunately has suffered a broken ankle—she is out on a limb, not for the first time—otherwise she would have been taking part in the debate. However, she has sent on her letter, and this is what Mr. Clive Pickering wrote to her: In many ways, what is more alarming, is that many other properties, not classified so far by the Secretary of State, are in the same, if not worse, condition than those which have been recognised. For example, the Bill ignores what, to us in Birmingham, is a far greater problem—that of Smith's Construction houses. There were 1,525 of these properties built in Birmingham, of which 550 have been sold. The properties are constructed of concrete blocks"— And then he goes into details of the construction, of which we are well aware. The letter then continues, giving a list of what the City of Birmingham Housing Department would like. It certainly wants consultation but it wants, The ability of the Local Authority to classify properties as being defective and described within the Bill and to receive the same funding arrangements as identified in the Bill. They also want: Additional capital resources allocated separately by the Government to enable Local Authorities with such structurally defective properties to effect repairs in the same way as is envisaged for owner occupiers. I can assure the Minister that we shall spend some time on a limited number of these amendments and others we shall skate through: but this is a crucial point. There is satisfaction, from the local authority's point of view, that the HIP allocations in the future take fully on board any additional burden which flows from their obligations to complete the Bill. Those are the points from Birmingham.

Earlier this evening I was speaking to my honourable friend Mr. Jack Dormond, the Member for Easington. He was immediately agitated in the knowledge that your Lorships were discussing this Bill. When I was in another place, I spoke on the new towns for the Opposition, and that context I was made well aware of the enormous problems which have come to new towns as a result of defective buildings over the 1950s and 1960s—houses built by new town corporations which, when the transfer of properties took place, meant that they were saddled with enormous burdens. I can say that the Minister's honourable friends in another place recognised part of the problem, but new towns have got a major burden.

My attention as been drawn to a body that goes under the pseudonym of PROBE (Private Residents Overlooked by Easington). I do not know whether "overlooked" means a geographical location or whether it means that their views are not taken fully into account. These residents in fact are in the same kind of circumstances. I also plead in aid the problems of owner occupiers whose houses are not designated, and the houses that we are talking about in that case are called Skarne Pre-cast Reinforced Concrete—not yet designated, but the problem might come. I know many members of the Easington District Council and I know they are very diligent, very concerned and anxious to help; but they have their own problems and their own priorities. The Chief Executive, Mr. Conyers Kelly, has written to Mr. Dormond, and he says: In recent months the Council have had a number of letters from owner/occupiers in Peterlee again asking if any form of financial help can he offered. As your Lordships know, the council cannot offer any help. In the supporting document, Mr. Kelly says: In recent times the bad design and construction problems have been aggravated by the discovery of asbestos in a large number of houses. The cost of the removal of the asbestos alone will average 1,500 per dwelling. Again no special financial help has been offered to either the Council or owner/occupiers. Another paragraph reads—and this is most important for the Minister and his advisers, so I should like them to take particular note— With the continuing high unemployment in the area and the Council embarking upon its approved programme of remedial works to its own properties, the inability of some owner/occupiers to afford to carry out remedial works has quite apart from the financial plight of owner/occupiers created a visually detrimental effect in the Peterlee New Town. I am asking for the understanding of the Minister when the HIP allocations are made. I hope that the Minister will understand, by the care we have taken to draw these illustrations, the need for consultation. Whatever there has been in the past—and we are making no point about that—it is crucial in the future. The Minister should consult before adding to his list, which will be an easement to owner/occupiers, but a burden to the council and the generality of the ratepayers and other tenants. We are simply asking the Minister in these two amendments: please take on board consultation with the proper associations and recognise that, if a further burden is to be laid upon local authorities, the money must be provided, or there must be access to the money over a period of time, in order that they may discharge their responsibilities.

Lord Skelmersdale

I should like to start by conveying the Committee's regards to the noble Baroness, Lady Fisher, and regretting that on this of all subjects she is not here to join us in our deliberations today. I should also like to make the general point that the Government, as represented on this occasion by myself, have no horror at all of consultations with the local authorities. I do not want to make political points on this subject any more than the noble Lord, Lord Graham, does, but I have said before, and I am quite ready to say it again, that we are prepared to consult on any occasion with anybody who wants to consult with US.

It is a little unfair for the noble Lord, Lord Stallard, to say that there has been a lack of consultation so far on the provisions of this Bill or on the subject with which it deals. Throughout the preparation of the Bill—and in setting up the discretionary scheme of assistance for owners of Airey houses which preceded this Bill—there have been continual and I must say constructive consultations with the local authority associations and others.

I refer in this connection to the consultative document issued to all local authority associations on 10th November 1983, and the outcome of the responses from this consultation paper is the Bill before your Lordships today. The proposals themselves were put to the local authority associations following the Government's announcement. To illustrate to your Lordships that this consultation has not merely been a matter of form, I point out that the Exchequer contribution in repurchase cases of 75 per cent., as the Committee will know, of the difference between the price paid to the owner and the defective value of the dwelling was introduced only after representations by the associations. Our original intention was that there should be no Exchequer contributions in repurchase cases.

There have been meetings between Ministers and representatives of the local authority associations on the question of resources—these were very properly referred to by the noble Lord, Lord Graham—and the Committee will be aware of the Government's discussions with the Building Societies Association and the National House Building Council.

So far as the specific problems of HIPs are concerned, the noble Lord, Lord Graham, knows as well as I do that HIPs are based on the planned spending of local authorities. Of course, there is always argument between what the local authorities as a group want and what the Government as a provider of resources are prepared to give in any one year; and this depends, of course, on the general economic situation.

But where local authorities already had definite plans for spending on these houses and on other defective dwellings, such as some Bison schemes, the department's regional controllers took these into account in distributing the local discretionary element of HIP resources at the regional level. We have said that when we know exactly what local authorities want to do—and we will know this only as a result of consultations with them—we will take account in our future HIP provisions of the planned spending that they intend to make. I really cannot go any further than that.

While I am answering the noble Lord, Lord Graham, I should say that, so far as Smith houses are concerned, I cannot at this moment stand at this Dispatch Box and say that they will be added to the list of 28 houses which I mentioned in my Second Reading speech on this Bill. But the noble Lord knows, because I said it on Second Reading, that we are considering this matter urgently with that possible end in view.

Lord Graham of Edmonton

Shortly.

Lord Skelmersdale

Exactly. The noble Lord has a good memory, as well as being able to read. I have given examples of what the Government have done so far by way of consultation in the preparation of the scheme. This illustrates the importance which we attach to the co-operation of all interested parties in the operation of the scheme. It is our intention to continue along the path we have already taken in this respect. I cannot give an absolute, categorical assurance that there will be discussion with all parties on every aspect of a particular designation, simply because there are occasions when central Government not only can move with the speed of light, but actually do move with the speed of light. It might well be appropriate to have a special, urgent designation where there simply is not time for consultations. However, apart from that, consultations will continue to be entered into.

Lord Stallard

I have listened very carefully to what the noble Lord the Minister and my noble friend have said. We are at cross-purposes. My amendment seeks consultation, but not on a general basis. I accept that there has been some consultation, but we are asking for consultation before the designation of any new classes or before any revocation of a designation under this clause. That is slightly different. The Minister said at the end of his remarks that he could give no guarantee. He mentioned that the Government sometimes move at the speed of light. Not many people would agree with that statement. The speed of light has certainly slowed down, according to the Minister's interpretation, unless he is referring to GCHQ, where the Government move at a much faster pace than they do in local government.

I am far from satisfied with the Minister's assurance. He has not assured me that there will be what we consider to be essential consultation with the people most directly involved; namely, the local authorities and the associations representing the tenants and the thousands and thousands of people who will remain in these kinds of dwellings, irrespective of what happens to the Bill.

I do not intend at this stage to go down the road the Minister travelled in connection with financial resources. These are the subject of further amendments, and I have no doubt that my noble friend Lord Graham of Edmonton will return to that aspect. I shall consider what the Minister has said. He has not moved in any way towards the kind of consultation we are seeking before any new designation or variation is made under the Bill. Therefore, reserving again my position for the future stages of the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.23 p.m.

Lord Stallard moved Amendment No. 3: Page 2, line 38, at end insert— ("() No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate.").

The noble Lord said: I beg to move the last amendment in a group of three amendments. It refers to the resources which were touched on by the Minister in his reply; but he did not reply specifically to this amendment. According to our reading of the Bill, it is based upon the assumption that only 28 types of prefabricated reinforced concrete dwellings will be designated. The Government have estimated that the cost to local authorities will be £250 million. During the Second Reading debate I mentioned that this is not the general understanding of the Association of Metropolitan Authorities and others. The problem will be much bigger than that. In this connection may I quote from Shelter's document which deals with the Bill. They say: Even within its own terms, the Bill is partial. The Government says, that 16,500 owners will be eligible for assistance—suggesting that it sees the Bill's provisions as limited to 26"— I assume they mean 28, but I am not quite sure— house types it has already named as potentially defective. Yet the Association of Metropolitan Authorities has identified 167 house types dating from the same period (the 1940s and 1950s) which could also suffer from design and construction faults. Will these other house types be excluded? They continue: In all, the number of 'non-traditional' and industrialised dwellings in the country has been put at 1.5 million. Over 300 different types of construction technique are involved. Although not all these dwellings may be defective, the figures give an indication of the scale of the problem. If the Housing Defects Bill is only to deal with 16,500 dwellings, its impact on the defective housing problem will be minimal. The Government must back up the Bill with adequate resources and special measures to help tenants as well as owners". The Bill, however, deals only, as has been said, with 16,500 dwellings in private ownership and then does not deal with the costs of repairing the dwellings once they have been transferred back to the local authorities, which is another major problem. The costs therefore only refer to the giving of the reinstatement grants and the cost of the limited repurchase grants to local authorities. We shall develop that in further amendments.

However, there will still be 150,000 prefabricated reinforced concrete dwellings remaining in local authority ownership and probably most of the 16,500 currently in private ownership will be transferred back to local authorities. On this assumption, therefore, and using the Department of Environment's own figures for the cost of reinstatement, local authorities will incur expenditure of no less than £1.5 billion in the future as dwellings deteriorate and need to be repaired. The very existence of this Bill is a recognition of the central role played by all governments in the development of these dwellings and an acknowledgment of the problems that were so created. I enlarged on that at Second Reading. I do not intend at this stage to rehearse the way in which these problems were created and the kind of encouragement that governments gave to local authorities to embark on these programmes. But it must therefore be reasonable in the light of all those circumstances to accept the case for adequate financial assistance to be made available to local authorities confronted with these problems. The discrimination in this Bill therefore cannot be justified.

Unfortunately this Bill is being discussed at a time when housing investment has been put under even more stringent control. The noble Lord the Minister mentioned HIP. He did not say that these programmes are being quite drastically cut in many instances and subsidies are being reduced. We know that rate capping has been introduced to make the situation worse still, so much so that—as we pointed out in Second Reading—many local authorities are experiencing great difficulties in funding the cost of repair and remedial programmes of existing stock within their HIP allocation. We gave examples again from research documents supplied to noble Lords on that score.

The Association of Municipal Authorities has estimated that the cost of dealing with defects in the post-war housing stock will be at least £10,000 million. Bearing in mind the prefabricated reinforced concrete dwellings built before 1960 will cost at least £1.5 billion, our estimate is unlikely to be excessive. Therefore we know that more and more designations will have to take place under this Bill in the future. That is perfectly obvious to all of us who have discussed these matters with local authorities and have some experience of the problems that have existed and have been created. It is almost certain that more and more dwellings will have to be designated. But the Bill fails to acknowledge the size and enormity of the problem. Obviously we on this side are extremely concerned that the provision has only been made for £250 million (and that is not absolutely certain; there seems doubt about that sum) but it may ultimately entail much greater expenditure for which no provision has been made. This amendment would therefore make the provision of such resources a statutory responsibility. I beg to move.

Viscount Hanworth

I think on the whole I would support this amendment. Our problem today is that we just do not have enough money to do what we would like in the housing field. It is no use preferring one section of housing people to another. This amendment is really saying that if a local authority cannot afford to cope, and the situation is not extreme, and the Government are not willing to help, then perhaps one cannot undertake this at that moment at all. That is what I understand by this amendment. If I am right, then I think the amendment is reasonable.

Lord Skelmersdale

The noble Lords are quite right. We can justify at the moment only 28 types, to which I have already referred, but the Bill is deliberately drawn wide enough to include others, if necessary. The other side of the Committee have asked, "How do we know that funds will be available for this purpose?". I have explained already that HIP funds cannot be made available until there is a planned expenditure by local authorities; not before then will the matter be considered and will my honourable friend the Minister for Housing take it to his other Government colleagues.

I know that at the moment discussion is going on. I have no idea what will be the result. It might be appropriate (and I know that my honourable friend is very much of this view) that the general needs index of local authorities should be revised to take account of the problems we have just been discussing in this Committee. I can give absolutely no clue as to how that consultation is progressing. I can say that consultation is progressing, but obviously I cannot prejudge the outcome, even if I knew what it was.

I take the basic point. The basic point of Amendment No. 3 is not for the Bill at all; it is for any extra work that local authorities may have to undertake for any purpose. It might not be through a designation of central Government. It might be a sudden crisis with their own housing stock, which has absolutely nothing to do with central Government.

The real question is this: in those circumstances, can the local authorities afford it? I have already referred to the special notice we are taking of the need for extra resources under this Bill. So far as the Bill is concerned, I cannot go any further than the Bill does. But the noble Lords are absolutely right when they say that this is a matter for general discussion, and it is being taken forward.

Lord Stallard

I am again grateful to the noble Lord for his reply and I am glad to hear that this matter is being taken forward. However, I was a little worried by his remark that there may well be another 50 or more types, "if necessary". He said that it might be necessary to designate another 50 types.

Lord Skelmersdale

I am sorry, but the noble Lord really did mishear me. I said that we can justify only 28 types at the moment, but that the Bill is deliberately drawn wide enough to include others, if necessary. I did not mention a figure; not one, not 50, not 80.

Lord Stallard

That makes it worse. The figure could be anything up to 187 types, or 300 types, necessary to be designated. When the noble Lord uses the words "if necessary" I assume that they mean, if the Treasury agrees. In the previous amendment the noble Lord seemed to pour cold water on the consultative process with local authorities and to reserve the right for simply the Secretary of State and, no doubt, the Treasury to deal with the question of further designations.

Again, for the noble Lord to say that it would give local authorities carte blanche is, if I may say so with respect, to misunderstand the amendment. The amendment is quite specific. We propose adding to the end of Clause 1 the words: No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate". That is fairly specific.

We are saying that there ought not to be further designations until the resources are available. That again is a perfectly reasonable expectation to those of us who understand local authorities and how they function. To say the least, it is irresponsible, and certainly unreasonable, to expect local authorities to do otherwise than see that the resources are available before they embark, or are forced to embark, on massive works of the nature specified by the Bill.

In withdrawing the amendment, I again express my disappointment. I shall read carefully what the Minister has said and, if necessary, raise the matter again at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 [Eligibility for assistance]:

9.35 p.m.

Lord Skelmersdale moved Amendment No 4: Page 3, line 25, at end insert— (" (3A) A person who holds a relevant interest in a defective dwelling is not eligible for assistance in respect of the dwelling at any time when that interest is subject to the rights of a person who is a protected occupier within the meaning of the Rent (Agriculture) Act 1976 or a statutory tenant within the meaning of that Act.").

The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 18, 19, 20, 21 and 22 in Clause 8. Amendment No. 18: Clause 8, page 13, line 31, leave out from ("tenancy") to ("and") in line 33. Amendment No. 19: Clause 8, page 13, line 42, leave out paragraph (b). Amendment No. 20: Clause 8, page 14, leave out lines 9 and 10. Amendment No. 21: Clause 8, page 14, line 13, column 2, leave out from ("Act") to end of line 14. Amendment No. 22: Clause 8, page 14, leave out lines 16 and 17.

As the Committee will be aware, certain agricultural workers enjoy protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976. They are usually associated with their terms of employment.

As drafted, the effect of the Bill would be, in the case of a repurchase of such a dwelling by a housing authority, to remove the protection offered to such occupiers by the 1976 Act. On the other hand, the housing authority would be obliged to offer them a secure tenancy. But the terms of the secure tenancy (especially as regards rent) are likely to be less advantageous than those enjoyed under the 1976 Act—in particular, the rent might be much higher without any necessary compensating increase in wages—and there could be complications involving other terms of the worker's employment, with which we do not think it right that we should interfere.

It is also clear that the farmer who has let a dwelling as tied accommodation has done so for the purposes of a business. Our purpose in the Bill is to assist the owner-occupier, or his trustees or personal representatives, and not businesses.

We propose, therefore, that owners of dwellings which are subject to protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976 should not be eligible for assistance under the Bill. It would of course still be open to a farmer who owned a defective dwelling as an individual, and not through, for example, a limited company, to obtain assistance under the Bill if he obtained vacant possession of the dwelling in question: for example, by providing alternative tied accommodation for his employee. Other solutions would, as I have said, be very much more complicated.

I hope that I have managed to explain the purpose of these amendments. I beg to move.

On Question, amendment agreed to.

Lord Graham of Edmonton moved Amendment No. 5: Page 4, line 36, leave out paragraph (b).

The noble Lord said: The amendment seeks to place a tenant in a position on all fours with the owner-occupier of a house which could very well be designated by type, so that the tenant of a council house would have the same rights to reinstate his house to a satisfactory condition as the owner-occupier. This is another route to get rid of the disparity that exists between the 16,500 owner-occupiers who will benefit from the Bill—and we do not cavil at that—and the generality of council tenants.

I must admit that the amendment is a device for a short debate and an invitation to the Government to express their views in respect of tenants' rights. At present, tenants are entitled to improvement grants, although it is acknowledged that relatively few exercise that right. In my view, a reinstatement grant is similar in concept. There is no justification for specifically excluding council tenants from that entitlement.

We recognise that the Bill deals specifically with assistance to private owners and that the deletion of the subsection will not achieve our aim of making reinstatement grants generally available to tenants. But, before we let this clause pass, we want an explanation from the Government. In many instances a tenant may live next door to an owner-occupier whose house may be reinstated with public money. The council tenant will therefore be put in what I would say is an invidious position. I beg to move.

Lord Skelmersdale

The amendment in itself would be of little benefit for the purpose which the noble Lord, Lord Graham, has in mind; and he explained it to the Committee. It would, if accepted, make only very few local authority tenants eligible for assistance under the Bill—those who are secure tenants and who fulfil the conditions of Clause 2(8) of the Bill. There are probably very few such cases, but it is possible for them to arise in the case, for instance, of certain leases terminable on death where the tenants have not purchased their interests.

The noble Lord, in moving the amendment, has made a case for extending the Bill for those who have remained as tenants of these defective dwellings. It is an issue which has already been debated at some length in another place and it is an issue we touched upon at Second Reading. I must again repeat that there is no need in this Bill to take steps to provide assistance for local authorities, or their tenants, or indeed other public sector tenants who live in buildings of a designated class. Such tenants and the buildings in which they live are the responsibility of the landlord authorities. There is no reason why such authorities should not continue to maintain these buildings through regular and considered programmes. I have already said that considered programmes are the basis for the HIP allocation. Repeated assurances have been given on the availability of resources in determining the overall total for housing capital expenditure and individual HIP allocations. As I have said, the Bill is designed to deal with a quite different problem.

I know that this theme is going to recur throughout the Committee stage and perhaps it may save a little time if I say now that the Government are fully seized of the problems and the points that have been made by noble Lords as far as HIP allocations are concerned with respect to defective dwellings. It will only weary the Committee if I go on again and again saying that when we have the properly formulated plans of local authorities that will be the time to consider increasing the HIP allocations for this purpose.

Lord Graham of Edmonton

I am grateful to the Minister for repeating that more than once. I promise I shall try to avoid the necessity for him to do it again. It is interesting that the authorities we consult say that although when discussions take place their point of view is taken on board, they are baffled when the allocations are made. They are unable to identify within the global sums allocated to them a figure which takes account of any particular circumstance.

For example, I am prepared to believe that there would be sympathy when the authorities say that there are so many thousands of houses they wish to take account of and they look at each individual council's needs and requirements and they make their plea. There are generalities in allocation and there is great difficulty in the authority being able to arrange precisely that there is built into their global figure a precise overlay to take account of a special problem. In fact, what happens, as the Minister knows, is that each local authority is given its global sum which is made up on assurances and programmes and it is up to the local authorities to decide how much to spend on improvement grants, how much to spend on buying land, how much to spend on building houses and how much on improving council estates, and so on. We are fearful that, in order to meet this additional obligation, some of those other heads will suffer.

I am satisfied with the Minister's reply at this stage and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2, as amended, agreed to.

Clause 3 [Entitlement to reinstatement grant or repurchase]:

Lord Skelmersdale moved Amendment No. 6: Page 4, line 42, after ("below") insert ("and section [modification of Act in relation to shared ownership leases](3) of this Act")

The noble Lord said: This amendment is a minor paving amendment to the new clause to be inserted after Clause 16 (Amendment No. 49) to which with the leave of the Committee, I shall address my remarks. There are also two consequential amendments to Clause 17 (Nos. 50 and 52). Amendment No. 49: After Clause 16, insert the following new Clause— ("Modification of Act in relation to shared ownership leases. —(1) The Secretary of State may by regulations provide for this Act to have effect, in its application to any case in which a person is eligible for assistance in respect of a defective dwelling and his interest in the dwelling is either—

1. (a) a shared ownership lease, or
2. (b) the freehold acquired under the terms of a shared ownership lease,

subject to such modifications as may be specified in the regulations. (2) Regulations under this section may (without prejudice to the generality of subsection (1) above)—

1. (a) require an authority receiving an application under section 3 of this Act by a person who—
1. (i) is eligible for assistance in respect of a defective dwelling, and
2. (ii) holds an interest falling within paragraph (a) or (b) of subsection (1) above,

to determine under that section that he is entitled to assistance by way of repurchase, and (b) make any provision that may be made by an order under section 3(6A) of this Act. (3) An authority shall not entertain an application under section 3 of this Act by a person whose interest in the defective dwelling concerned falls within paragraph (a) or (b) of subsection (1) above unless regulations under this section are in force at the time of application in respect of that interest. (4) In this section "shared ownership lease" means—

1. (a) a shared ownership lease within the meaning of Part I of the Housing and Building Control Act 1984,
2. (b) a lease of a dwelling-house granted otherwise than in pursuance of that Part which contains provision to the like effect as that required by paragraph 3 of Schedule 3 to that Act,
3. (c) a lease of a description specified by the regulations, or
4. (d) a lease determined, or falling within a class determined, by the Secretary of State to be a shared ownership lease;

but where a lease becomes a shared ownership lease by virtue of regulations under this section or a determination under paragraph (d) above, that shall not affect the operation of the provisions of this Act in relation to a person who is eligible for assistance in respect of a defective dwelling if application for assistance in respect of the dwelling has previously been made by him under section 3 of this Act. (5) Regulations under this section may make different provision for England, Scotland and Wales and for different descriptions of shared ownership lease.") Amendment No. 50: Clause 17, page 21, line 1, after ("order") insert ("or regulations") Amendment No. 52: Clause 17, page 21, line 7, at end insert— ("(2A) A statutory instrument containing regulations under section (modification of Act in relation to shared ownership leases) of this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.")

The purpose of the new clause is to enable the provision of the Bill to be applied in cases where the owner of a defective dwelling who is eligible for assistance in fact holds a shared ownership lease of the dwelling or has acquired the freehold by means of shared ownership leases and where the acquisition of shares in that lease has straddled the cut-off date. The Committee will recall from our recent consideration of what was then the Housing and Building Control Bill, the complexities of provisions dealing with shared ownership leases.

As the Committee would imagine, it would be very complicated to tailor the Bill to provide for a solution where the form of assistance is by way of reinstatement grant, and we believe the appropriate solution would be that, like owners of flats, owners of shared ownership leases should be assisted only by way of repurchase. Where such dwellings are repurchased, the provisions of the Bill will need to be adapted, for example, to relate the purchase price to the fact that some shares may have been purchased at defective value and others not, and, given the complicated nature of the modifications required and the likelihood that very few, if any, shared ownership leases of PRC houses will have been granted, we propose that the Secretary of State should be given a power to adapt the provisions of the Bill by order subject to negative resolution as and when cases of this kind emerge, which we fully expect to be very rare.

In the circumstances, I am sure that this is the right way to approach the complex question of shared ownership leases and the application of the Bill in such unfortunate cases. I beg to move.

On Question, amendment agreed to.

9.46 p.m.

Lord Stallard moved Amendment No. 7: Page 5, line 19, leave out sub-paragraph (ii).

The noble Lord said: The reasons for the amendment are simple. We say that sub-paragraph (ii) should be deleted because it is impossible for a local authority to say that an individual acquiring a freehold would be likely to be able to arrange a mortgage. Building societies are outside the control of local government and local authorities. As we know, they have been reluctant to lend on any of these properties. Certainly, local authorities have no control over building societies.

As we know—the Minister has already referred to this in reply to a previous amendment—some discussions have taken place between the building societies and Department of Environment officials. There have also been discussions, I understand, with the National House Building Council. However, what the Minister did not say was that those discussions had failed to produce any agreements. It would seem to us that the Government are therefore now attempting to put the onus onto local authorities in this regard. In view of the fact that local authorities will be completely unable to say that an individual is likely to arrange a mortgage, most private owners will be able to insist that the local authority repurchase the dwelling under the provisions of Clause 3. If this subparagraph remains, the vast majority of tenants will be able to insist on repurchase, and the cost to local authorities of repurchase and subsequent improvements will rise substantially.

The only way, in our view, that this matter can be resolved is through an agreement with the building societies at national level. It is therefore a matter on which the Minister and the Government should take the initiative. In the meantime, in our view, this subparagraph should be deleted. I beg to move.

Lord Skelmersdale

The Committee will be aware that it is not the Government's intention to encourage the re-acquisition by the public sector of houses sold into the private sector. I am sure that it is right that, wherever possible, these houses should remain in the private sector; that is what the great majority of owners will want, provided that they can be sure that when repaired, their houses will be saleable at full value and hence become mortgageable for the new owners. We have therefore decided that the main form of assistance under the Bill should be grant-aided towards the cost of reinstating the defective dwellings wherever the dwellings concerned can be satisfactorily repaired.

Equally, noble Lords will be as aware as I am that the key requirement, if reinstatement is to be an effective means of assistance, must be to ensure that the owner of the house can sell it at a defect-free value once the repair is completed. Without this, the problem which confronts the private owner—namely, the devaluation of his asset—will remain, and the primary purpose of the Bill will be frustrated.

We have therefore provided in paragraph (b)(ii) of subsection (4), which the amendment which we are discussing seeks to delete, that, unless the authority making a grant is satisfied that the reinstatement work to be grant-aided is likely to make the house mortgageable in the private sector, it shall purchase that house. That seems to me a perfectly reasonable provision.

The noble Lord also misunderstood the onus on the local authorities when he said that they had to decide whether individuals were unlikely to arrange a mortgage. Clause 3(5) provides for the local authority to repurchase the house where it is unreasonable to expect the owner to arrange or wait for reinstatement; in other words, what I was talking about earlier this evening, and indeed on Second Reading—that the need to move is much more a criterion than the possibility of arranging a mortgage. It is this assessment which the local authority has to make.

Viscount Hanworth

I oppose this amendment. It seems to me that the Opposition is really tumbling over to help the local authorities. Surely we have got to strike a balance between their interests and those of the tenant. In this case I should have thought that the Government are right in what they have said, and we should give the benefit to the tenant. Therefore, this amendment should not be accepted.

Lord Graham of Edmonton

We are not talking about a tenant; we are talking about an owner-occupier. If we are concerned about the interests of tenants, then, of course, we are concerned about the local authority, because the people we are concerned with in this Bill are people who once were tenants. They exercised their right to buy. They did so in the knowledge of caveat emptor—let the buyer beware. They find that the property they bought, which at the time was valued at £20,000 but which they bought for £10,000, by virtue of the discounts, has now got defects which neither they nor the authority knew about at the time.

The Bill provides a very satisfactory outcome to the dilemma they have come across as owner-occupiers, not as tenants. They have ceased to be tenants. I take to heart what the noble Viscount, Lord Hanworth, said about the need to be concerned about tenants. In this situation the tenants are the tenants of the authority who, on the margin, will have to bear some of the cost of helping to bale out the previous tenant, who becomes an owner-occupier. To that extent, I am grateful for the support which the noble Viscount has given us on this point.

Lord Stallard

I, too, am grateful for what the Minister has said, and for the remarks of the noble Viscount, Lord Hanworth. I can assure him that we are very conscious of the need to maintain this balance. As my noble friend Lord Graham has pointed out, we are very much concerned with the owner-occupiers, and, of course, with the tenants, and therefore with the local authorities. In view of the reply the Minister has made, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 8: Page 5, line 45, at end insert— ("(6A) The Secretary of State may by order amend subsection (4) above (whether as originally enacted or as previously mended under this subsection) so as to modify any of the conditions there mentioned or to add or substitute for any of those conditions other conditions; and an order under this subsection—

1. (a) may make different provision for different classes of case,
2. (b) shall not affect the operation of this section in relation to applications made under this section before the order comes into force.")

The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 51. Amendment No. 51: Page 21, line 3, at end insert— ("(1A) No order shall be made under section 3(6A) of this Act unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.")

These two amendments are designed to provide a sort of safety net against unforeseen circumstances in the operation of the scheme of assistance provided by the Bill. Entitlement to reinstatement grant under the Bill is normally to be dependent on the conditions set out in Clause 3(4). There are particular cases in which these may not produce the intended result; in particular, they may lead to money being spent on reinstatement grant when it is not a sensible use of public money.

For example, where a compulsory purchase order has been made which affects the defective dwelling, an application for assistance, if pursued, could lead, under the existing conditions, to the conclusion that reinstatement was the means of assistance, but such reinstatement would entail expenditure if compulsory acquisition was to take place within a relatively limited period thereafter. This problem could be overcome by amending the conditions provided for in Clause 3(4) for such circumstances.

We think, therefore, that it would be prudent to take a power to amend the conditions by order so that we can take steps to make the scheme work more effectively in those cases. We have provided that such an order should be subject to affirmative resolution of both Houses, so that the closest scrutiny can be given to any proposals the Secretary of State may have in mind to amend the conditions in Clause 3(4). I should have thought that that would be something that would be welcomed by your Lordships. I beg to move.

Lord Graham of Edmonton

I shall be brief and I do not expect the Minister to reply. I certainly take the point not that we are covering uncharted territory, but that there will be circumstances which the Minister and his colleagues anticipate and some which they do not anticipate. I listened very carefully to the Minister when he said that there may well be cases in respect of which matters will not work out as they intend. I asked the Minister for an illustration and he gave the illustration of the compulsory purchase order where the follow through was not the purpose for which the Bill was designed. Therefore, what we are being asked to approve here is that, in the light of the need to seek variations, the Minister will come forward with an order which will need to be argued in the light of the then experience, in which case we shall have the opportunity of recognising that it is fair and equitable. In those circumstances we shall certainly not oppose the amendment.

On Question, amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 agreed to.

Clause 5 [Reinstatement grant]:

Lord Skelmersdale moved Amendment No. 9: Page 9, line 11, leave out subsection (6).

The noble Lord said: I beg to move Amendment No. 9 and, with the leave of the Committee, I should also like to speak to the new clause which the Government propose should be inserted after Clause 12, and that appears as Amendment No. 25. Amendment No. 25: After Clause 12, insert the following new Clause: ("Reinstatement of defective dwelling by appropriate authority .—(1) Where a relevant interest in a defective dwelling has been disposed of by a public sector authority, then (without prejudice to any of their other powers) the appropriate authority may before the end of the period within which a person may seek assistance under this Act in respect of the dwelling enter into an agreement with any person holding an interest in the dwelling or any person who is a statutory tenant of it to execute at his expense any of the work required to reinstate the dwelling. (2) For the purposes of subsection (1) above, a disposal by or under any enactment of an interest in a dwelling held by a public sector authority is to be treated as a disposal of that interest by the authority. (3) In this section "statutory tenant" is to be construed in accordance with section 2 of the 1977 Act or, as the case may be, section 3 of the 1971 Act.")

Clause 5(6) of the Bill already provides that the local authority may by agreement do works for a person entitled to assistance at his expense. But there will be cases where the owner of a dwelling which is a defective dwelling under the Bill is not entitled to assistance, or where there is a statutory tenant of the dwelling, and it would be in his interest for the authority to be able to do works on his behalf by agreement at his expense. We have received representations on this issue from a number of Members of Parliament—including the honourable Member for Pontefract and Castleford, whom noble Lords opposite will know well, and also from local authorities. There are doubts in the minds of some authorities about their powers to do such works.

The new clause puts the question beyond doubt and provides that local authorities may undertake works by agreement as agent on any defective dwelling so long as the agreement is made before the end of the period during which owners may seek assistance under the relevant designation under the Bill. The present Clause 5(6) therefore becomes superfluous and is deleted by Amendment No. 9. I beg to move.

Viscount Hanworth

In general we must be thankful to the Government for having shown flexibility in this Bill, which is not always apparent. However, having said that, I think that one can draw only two conclusions: either that there was inadequate consultation or thought by the Government beforehand, or that those whom they consulted did not give serious consideration to the matter beforehand, because we should not really have this amount of change at this stage of the Bill. Nevertheless, I hope that that does not spoil my congratulations to the Government for at this stage being flexible enough to alter the Bill in this way.

Lord Graham of Edmonton

Like the noble Viscount Lord Hanworth, we consider this amendment helpful, but I wonder whether we can pursue the possibilities? I am very much concerned with the opportunity for a council's direct labour organisation to be involved in these matters. Can the Minister and his advisers address themselves to the situation of a council which has a direct labour organisation which is carrying out work to one of its own properties which is next to a council house which comes within the provisions of this Bill—in other words, which has been sold and which requires reinstatement work to be carried out? Can the Minister deal with that situation?

As I understand it, the power to carry out work as an agent clearly envisages the possibility of a council's direct labour organisation being involved in these matters. The Minister is aware of the prohibition currently on councils' direct labour organisations to undertake work which is not part of their own work—in other words, it is private work, and as I understand it, outwith the powers.

If we can be assured that the point which was raised by Mr. Lofthouse is fully met by this amendment we shall be satisfied. As a result of a little research, my information is that the illustrations which bothered Mr. Lofthouse in another place and which caused the Minister and his advisers to see whether the point could be met, are not fully met. I should be grateful if the Minister could help me.

Lord Skelmersdale

Perhaps I can encapsulate the answers that were given on this subject in another place, because I understand that it is somewhat complicated. The rule about direct labour organisations is that they can do anything which the local authority has power to do itself. This Bill gives them the power to operate under certain circumstances. Therefore, if the circumstances are fulfilled, the direct labour organisation in the case cited by the noble Lord can do the work.

On Question, amendment agreed to.

Clause 5, as amended, agreed to.

Clause 6 [Repurchase]:

Lord Skelmersdale moved Amendment No. 10: Page 10, line 20, after ("Act") insert ("(except paragraph 3B)")

The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 11, 54 and 59. Amendment No. 11: Clause 7, page 11, line 41, leave out ("paragraph 4") and insert ("paragraphs 3A and 4") Amendment No. 54: Clause 20, page 24, line 30, after ("21") insert ("and paragraph 3A of Schedule 2") Amendment No. 59: Schedule 2, page 30, line 34, at end insert—

("Effect of acquisition.

3A.—(1) Where an interest acquired in pursuance of section 6 of this Act is or includes a dwelling in relation to which a grant has been paid under Part VII of the Housing Act 1974—

1. (a) any conditions imposed under or by virtue of that Part of that Act as conditions of the grant shall cease to be in force with respect to the dwelling with effect from the time of disposal of the interest, and
2. (b) the owner for the time being of the dwelling shall not be liable to make in relation to the grant any payment under section 76 of that Act (repayment of grant on demand following breach of condition) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above— dwelling" has the same meaning as in the Housing Act 1974; and owner" has the same meaning as in Part VII of that Act.

3B.—(1) Where an interest acquired in pursuance of section 7 of this Act is or includes a house in relation to which a grant has been made under Part I of the Housing (Scotland) Act 1974—

1. (a) observance with respect to the house of any of the conditions specified in section 9 of that Act (conditions to be observed with respect to a house in respect of which a grant has been made) shall cease to be required with effect from the time of disposal of the interest and paragraph 7 of Schedule 2 to that Act (requirements as to records when observance of conditions ceases to be required) shall apply as it applies in the case there mentioned; and
2. (b) the owner for the time being of the house shall not be liable to make in relation to the grant any payment under Schedule 2 to that Act (consequences of breach of conditions) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above— house" has the same meaning as in the Housing (Scotland) Act 1966; and owner" has the same meaning as in Part I of the Housing (Scotland) Act 1974.").

There will be cases where a person who has received a repairs, improvement, or intermediate grant under Part VII of the Housing Act 1974 in respect of a dwelling is eligible for assistance by way of repurchase of that dwelling under the Bill. The authority making the grant may under Part VII of the 1974 Act impose certain conditions relating to the use of the dwelling, for example, on availability for letting. Breach of such conditions may render the owner for the time being liable to repayment of the grant: this liability runs with the land and could arise, say, if the house were sold again under the right to buy after repurchase and repair.

The purpose of these amendments is to provide that, upon acquisition under the Bill, any such conditions shall cease to have effect and to prevent any liability to repayment from arising (by reason of a demand made after the acquisition) in respect of a breach of the conditions before acquisition. The amendments operate on both Clauses 6 and 7 reflecting the different repurchase provisions applying in England/Wales and Scotland. I beg to move.

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 [Repurchase in Scotland]:

Lord Skelmersdale moved Amendment No. 11:

[Printed above.]

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

Lord Skelmersdale moved Amendment No. 12: After Clause 7, insert the following new Clause—

("Purchase of certain land by authority possessing compulsory purchase powers.

.—(1) In any case where—

1. (a) there was a disposal of an interest in a defective dwelling, being an interest held by a person (in this section referred to as the "owner") who immediately before the time of disposal was eligible for assistance in respect of the dwelling,
2. (b) the disposal was made to an authority possessing compulsory purchase powers otherwise than in pursuance of section 6 or 7 of this Act,
3. (c) on the disposal, the authority acquired an interest in any affected land, that is to say, the defective dwelling and any garage, outhouse, garden, yard and appurtenances occupied with and used for the purposes of the dwelling or any part of it, and
4. (d) the amount paid as consideration for the disposal did not include any amount attributable to the owner's right to apply for assistance in respect of the dwelling,

the owner is entitled, subject to subsection (4) below, to be paid by the housing authority the amount (if any) by which ninety-five per cent. of the defect-free value exceeds the amount of compensation for the disposal.

(2) For the purposes of this section, the amount of compensation for the disposal is—

1. (a) the amount that would have been the proper amount of compensation for the disposal (having regard, where any relevant determination has been made by the Lands Tribunal or the Lands Tribunal for Scotland, to that determination), or
2. (b) if greater, the amount paid as the consideration for the disposal,

but excluding any amount payable for disturbance or for any other matter not directly based on the value of land; and in this section the "defect-free value" means the amount that would have been the proper amount of compensation for the disposal (excluding any amount so payable) if none of the defective dwellings to which the designation in question related had been affected by the qualifying defect.

(3) For the purposes of this section—

1. (a) it is to be assumed that the disposal occurred on a compulsory acquisition (in cases where it did not in fact do so), and
2. (b) where the compensation for the disposal fell to be assessed by reference to the value of the land as a site cleared of buildings and available for development then, for the purpose of determining the defect-free value, it is to be assumed that the compensation did not fall to be so assessed,

and, for the purposes of subsection (1) above, the amount of compensation for the disposal shall be reduced by the amount of any payment made in respect of the defective dwelling under section 30 or 60 of the Housing Act 1957 or section 30 of the Housing (Scotland) Act 1974.

(4) A housing authority are not required to make a payment to any person under this section unless he makes a written application to them for the payment before the end of the period of two years beginning with the time of disposal.

(5) Where a housing authority refuse an application for a payment under this section on the grounds that the owner was not eligible for assistance in respect of the defective dwelling at the time of the disposal, they shall give to the applicant a notice in writing stating the reasons for their view.

(6) Any question arising under this section as to the amount of compensation for a disposal or defect-free value shall be determined by the district valuer if the owner or the housing authority so require by notice in writing served on the district valuer.

(7) Before making a determination in pursuance of subsection (6) above, the district valuer shall consider any representation by the owner or the authority made to him within four weeks from the service of the notice under that subsection.

(8) A person serving a notice on the district valuer under subsection (6) above shall serve notice in writing of that fact on the authority or, as the case may be, the owner.

(9) In this section— authority possessing compulsory purchase powers" has the same meaning as in the Land Compensation Act 1961 or the Land Compensation (Scotland) Act 1963; district valuer" has the same meaning as in paragraph 3(1) of Schedule 2 to this Act; and housing authority", in relation to a defective dwelling, means the housing authority in whose area the dwelling is situated.

(10) In this section—

1. (a) references to the owner include a reference to his personal representatives; and
2. (b) the reference to appurtenances occupied with and used for the purposes of a dwelling or any part of it is, in Scotland, a reference to pertinents belonging to or usually enjoyed with the dwelling or any part of it.")

The noble Lord said: I hope that in moving this amendment I do not get the same side swipe from the noble Viscount, Lord Hanworth, as I did on a previous one. With the permission of the Committee, I should also like to speak to the consequential amendments, Nos. 26, 27, 29, 31, 32, 33, 41, 43 and 45. Amendment No. 26: Clause 13, page 18, line 10, after ("1(6) ") insert ("(Purchase of certain land by authority possessing compulsory purchase powers) (6) ") Amendment No. 27: Clause 14, page 18, line 32, after (" 1(6) ") insert ("Purchase of certain land by authority possessing compulsory purchase powers (6) ") Amendment No. 29: Clause 15, page 19, line 6, after ("authority") insert ("(a)") Amendment No. 31: Page 19, line 9, at end insert— ("or (b) in making any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act.") Amendment No. 32: Page 19, line 13, leave out ("as the case may be") Amendment No. 33: Page 19, line 14, after ("completed") insert ("or in which the payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act was made, as the case may be") Amendment No. 41: Page 19. line 27, after ("given") insert ("or payments made") Amendment No. 43: Page 19, line 39, leave out ("and") Amendment No.45: Page 20, line 5, at end insert— ("and (c) in the case of any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act, the amount of the payment")

The purpose of the new clause, which is to be inserted after Clause 7, is to make provision in the Bill for cases where defective dwellings are acquired by compulsory purchase or by agreement where a compulsory purchase order would otherwise have been made. As the Bill and the relevant compensation provisions stand at present, the terms on which properties are acquired compulsorily would mean that the owner of a defective dwelling will be compensated on the basis of the defective value of the property, and, wherever the value element of the compensation is less than 95 per cent. of defect-free value, the intervention of purchase under the compensation code would have the effect of depriving the owner of assistance under the Bill. These amendments are designed to protect that owner's position. I am sure that within the general framework of the Bill, which I have already outlined, the Committee will approve of them. I beg to move.

On Question, amendment agreed to.

Clause 8 [Secure tenancies]:

Lord Skelmersdale moved Amendment No. 13: Page 12, line 10, leave out ("with") and insert ("immediately before").

The noble Lord said: Amendments 13, 24 and 57 are all pure drafting amendments—if you can have such things. Amendment No. 24: Clause 11, page 16, line 38, leave out ("or grants"). Amendment No. 57. Schedule 2, page 29, line 11, leave out ("the landlord's") and insert ("pay for outstanding").

I beg to move.

On Question, amendment agreed to.

10.6 p.m.

Lord Skelmersdale moved Amendment No. 14: Page 13, line 8, after ("shall") insert ("except where the circumstances fall within paragraph 2 of Schedule (Alternative accommodation) to this Act,").

The noble Lord said: With this amendment I should like to take also Amendments Nos. 15, 16, 17 and 61. Amendment No. 15: Page 13, line 8, leave out from ("be") to first ("the") in line 10. Amendment No. 16: Page 13, line 11, leave out from ("period") to end of line 14 and insert ("and where the circumstances fall within that paragraph shall be another dwelling-house which, so far as is reasonably practicable in the case of that authority, affords accommodation which meets the requirements for suitability set out in paragraph 3 of that Schedule.") Amendment No. 17: Page 13, line 21, at end insert— (" (7A) An authority receiving a request under subsection (7) above shall, as soon as it is reasonably practicable to do so, give notice in writing to the person making the request stating—

1. (a) whether or not in their opinion the circumstances of his case fall within paragraph 2 of Schedule (Alternative accommodation) to this Act, and
2. (b) if their opinion is that they do—
1. (i) which of the Cases specified in that paragraph is applicable to those circumstances, and
2. (ii) the effect of subsection (6) above and Schedule (Alternative accommodation) to this Act.")

Amendment No. 61: After Schedule 2, insert the following new schedule.