Lords Sitting of 28 April 1986

Preamble
The House met at half-past two of the clock: the LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

"Conductive Education"
Baroness Dudley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what plans they have for evaluating "conductive education" for those suffering from motor disorders, now well established in Hungary, and what resources are being made available for backing a conductive education programme.
The Earl of Swinton: My Lords, the Spastics Society has submitted an application for central government funding towards a proposed study of conductive education, and that is at present under close consideration. There are no funds available to the Secretary of State for Education and Science from which he could pay directly for an independent programme of conductive education.
Baroness Dudley: My Lords, will my noble friend say how many people are attending the course that they have in Hungary for conductive education? Is it true that around 70 per cent. of the children learn to walk and go to normal schools within four years?
The Earl of Swinton: My Lords, I honestly do not know the size of that particular school in Hungary. I think that my noble friend's figure of 70 per cent. is right. However, I ought to point out that I also understand that the children are very much selected as to those who are most likely to succeed in walking, before they are taken to that school.
Baroness Fisher of Rednal: My Lords, is the noble Earl aware that Birmingham Education Committee and Birmingham social services are pioneering a scheme for those particular children? An advertisement for a director was placed last weekend. The funding of that centre will be by Birmingham City Council, Dr. Barnardo's, the Parkinson's Disease Society, and the Percy Bilton Fund. That scheme is to be evaluated by Nottingham University. Is the Minister aware of that project, and will he see that some resource is sent there if at all possible, especially in respect of the evaluation of that project?
The Earl of Swinton: My Lords, I was aware of the project but not of quite so much detail as is the noble Baroness, who knows more about it than I do. I understand that the DHSS was approached for funding in respect of the conductive education project in Birmingham but decided after very careful consideration that it would be inappropriate to support that particular project. It was made clear last year to the sponsors of the Birmingham project that the DES would be ready to consider a more limited scheme concerned with producing an effective evaluation of the system of conductive education as practised in Hungary and its transferability to this country. The university has not as yet submitted a formal application along those lines.
Lord Ennals: My Lords, I am grateful to the noble Earl for the answers that he has just given. I wonder whether he or his right honourable friend can look more closely into the Birmingham operation. As the noble Earl said, it is conducted primarily through the University of Birmingham. Is the noble Earl aware that in respect of motor disorders such as cystic fibrosis, multiple sclerosis, cerebral palsy, spina bifida and Parkinson's disease, there has been a tremendous advance by Dr. Andrew Sutton, based partly on the research that has been carried out in Hungary? Is the noble Earl aware also that funding is a major problem? Approximately £300,000 is needed in order to proceed with that absolutely vital research, affecting, as the noble Baroness said, many, many children who are in a very severe condition.
The Earl of Swinton: Yes, my Lords. I assure the noble Lord that we shall be following with interest what goes on. However, we feel that there is a lot more research needed into the subject. That is why the approach now being made by the Spastics Society is being considered with great sympathy. I understand that there is no consensus of opinion about that method of treatment. Some professionals have been very enthusiastic about it, particularly in the field of cerebral palsy and in some aspects of mental handicap and other neurological handicaps. Others in the field, including Her Majesty's Inspectorate, have reservations. They feel that although the method may be considered impressive in respect of movement, it can be at the expense of other areas of educational and social development.
The Earl of Selkirk: My Lords, will my noble friend give the House some picture of the nature of conductive education? It is a subject with which I am not very familiar.
The Earl of Swinton: My Lords, conductive education has been developed in Hungary, where it is used as the main basis for the early education of physically handicapped children and as a method of treating or re-educating adults with major handicaps. The essence of the method is to treat children and others like normal individuals with the object of educating them on general subjects, but incorporating into the general subjects lessons on how to eat, walk, sit and solve problems. Children are allocated to one particular "superperson", who is a cross between a teacher and therapist and is known as a conductor, who takes them through the whole process of education as they grow older.
Baroness Fisher of Rednal: My Lords, is the noble Earl aware that Birmingham City Council is pioneering the scheme and not Birmingham University? It all arose through one of the children in the city who is now in Budapest. The city itself felt, after visiting the centre, that it was a useful exercise, as the noble Earl has said, to see whether the scheme could be put into operation and then evaluated. However, it is not a university scheme.
The Earl of Swinton: My Lords, I bow to the superior knowledge of the noble Baroness in respect of what goes on in and around Birmingham. I am sure that she is absolutely right.

London Road Development:Grants
2.42 p.m.
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether there are any road developments planned in London following the abolition of the GLC which will be eligible for government grants.
Viscount Davidson: My Lords, I understand that a number of boroughs are currently developing plans to
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tackle bad traffic problems in their areas and we shall consider bids for grant assistance when they come forward. This year boroughs are getting £32 million of transport supplementary grant, including support for 23 major schemes, 15 of them new this year. A further £73 million of their expenditure on roads is eligible for block grant support.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Are the grants he mentions for new road schemes only?
Viscount Davidson: My Lords, major road improvements, traffic management schemes and provisions for cyclists are eligible. The latest TSG circular draws attention to this.
Lord Underhill: My Lords, may I ask the noble Viscount about two matters associated with the original Question? First, do not all traffic management schemes on roads that are designated by the Secretary of State have to be vetted by the department and guidance notes issued to the boroughs concerned; and have those guidance notes yet been issued? Secondly, as there is no strategic authority for greater London—Parliament in its wisdom decided not to have one—are there any steps for co-ordination of priorities and overall policies for road schemes?
Viscount Davidson: My Lords, the Department of Transport published guidance to local authorities in Circular 2/86 on 1st April 1986. That has gone to all boroughs. The title is Transport Policies and Programme Submissions for 1987–88. As regards co-ordination between boroughs and the department, the noble Lord will be interested to know that on 14th April Circular 3/86, entitled Highways and Traffic Management in London from 1st April, 1986, sets out full details of the arrangements now in place.
Lord Strabolgi: My Lords, is there any overall plan to deal with the question of the long-distance coaches in London? I do not mean the tourist coaches but the long-distance passenger coaches which at the moment are concentrated on one bus station in Victoria. Is it proposed to have another station in the north of London for the north of England traffic, or is it all to be left to the whim of local authorities?
Viscount Davidson: My Lords, with respect, I feel that that supplementary question is rather outside the scope of the original Question and I shall have to write to the noble Lord.
Lord Avebury: My Lords, can the noble Viscount confirm that the change following abolition of the GLC is from one set of strategic proposals being submitted by the GLC in respect of metropolitan roads to 32 different sets of proposals being submitted by the London boroughs and the City of London? Can he say what increase in staff in the Department of Transport will be necessary to cope with a 32-fold increase in the number of applications?
Viscount Davidson: My Lords, as far as I am aware there will not be any increase in staff, but I shall check with the department.

NHS Immunisation Programme
2.45 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action is anticipated or has been undertaken following the report by the Comptroller and Auditor General on NHS preventive medicine in relation to the minor increases in diphtheria, tetanus and polio and the epidemics of measles and whooping cough which continue to recur.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, the department is fully aware of the importance of immunisation programmes. Since 1983 we have provided special funding to boost the uptake of whooping cough and rubella vaccination and in 1985 we asked health authorities to draw up programmes for increased uptake of childhood immunisations in general. Following the Comptroller and Auditor General's report, we are considering how best further to improve health authorities' performance and our monitoring of it.
Lord Molloy: My Lords, I thank the noble Baroness very much indeed for that reply. She could have added, for example, that there is also an excellent report on how polio and tetanus are being attacked. That, I am sure she will agree, reflects great credit on our National Health Service. The uptake for those measures is now 84 per cent. However, will the noble Baroness be gracious enough to consider the fact that, although a 65 per cent. uptake is recorded for measles and whooping cough, they are both killer diseases and there has been some recurrence of these among children? Will she give this House an assurance that that aspect will be looked at?
Baroness Trumpington: My Lords, I welcome the report and the authors are to be congratulated. With regard to what is being done nationally, my department plays its part in encouraging higher uptake rates by issuing advice direct to doctors and nurses about child immunisation. We are trying to warn parents and, indeed, everyone, of the dangers of not immunising children.
Lord Ennals: My Lords, I am most grateful to the noble Baroness for what she said. May I ask two questions in relation to whooping cough? Is there now a steady increase in the number of parents who are sensibly having their children vaccinated? Secondly, in view of the number of court cases that are to be heard concerning compensation for alleged vaccine damage and the possible effect that a court ruling one way or another may have on public attitudes, is the department prepared with a contingency plan for publicity in case a court ruling should have an adverse effect?
Baroness Trumpington: My Lords, one case is currently before the courts and therefore it is not
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appropriate for me to comment further. However, I think it is worth pointing out on the first part of the noble Lord's supplementary question that fears of vaccine damage led to a sharp fall in uptake from 80 per cent. in 1970 to 31 per cent. in 1978. The uptake has been improving slowly and has now reached 65 per cent. For measles, the level of uptake has only increased from 50 per cent. to the present level of 63 per cent. We cannot emphasise too much the need for parents to take advantage of the vaccination programme.
Lord Molloy: My Lords, will the noble Baroness allow me to take advantage of the very good atmosphere at present to mention the remarkable work which is being done on the preventive medicine side of the National Health Service and to ask whether she will be gracious enough to look at the critical part of the comptroller's report concerning the 60-odd health authorities which in his opinion are not doing enough to combat cervical cancer? Far too many women who are just over 36 years of age are dying and, as the report says, with more intense activity in those health authorities the number could be drastically reduced.
Baroness Trumpington: My Lords, my graciousness does not actually go quite so far as to take cervical cancer into the present context of this Question. But try me again.
Lord Molloy: My Lords, I am quite sure that the noble Baroness has read the report, but that little bit has perhaps slipped her mind. Perhaps I may ask her to get her staff to look at the points that I have raised. I am sure that the country would be very pleased with both of us in our joint endeavours to enhance our National Health Service.
Baroness Seear: My Lords, would the noble Baroness agree with me that the noble Lord, Lord Molloy, needs no encouragement?

Unification Church and Charitable Status
2.50 p.m.
Lord Denning: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they expect a final decision to be made by the courts, including any appeals, as to the charitable status of the Unification Church.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, the Treasury Solicitor estimates that the trial at first instance of the Attorney-General's actions concerning the charitable status of the two trusts associated with the Unification Church is unlikely to be concluded before late 1988 or early 1989.
No reliable estimates can be given for the timing of any appeals. This will depend on a number of factors, including the nature of the appeals, the state of the

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court lists at the relevant time and whether or not the appeals are expedited.
Lord Denning: My Lords, I thank the noble and learned Lord the Lord Chancellor for his Answer, but is it not a fact that a deplorable length of time has elapsed since the decision in March 1981? It is over five years since the Daily Mail exposed the Moonies and their evil practices, and a jury found that the Daily Mail was justified, adding a rider that the tax-free status of the Unification Church should be investigated. That was over five years ago. The present situation is that the Attorney-General has started an action, and in view of what my noble and learned friend has said, is it to take another five years? Would it not be better and quicker to have a short statute that deprived this cult and similar cults of tax-free status and controlled their evil activities?
The Lord Chancellor: My Lords, I think that perhaps my noble and learned friend is straying into a discussion of the merits of a case which is sub judice. Undoubtedly the Daily Mail action stopped in March 1981. As soon afterwards as the 23rd June of the same year the Attorney-General wrote to the Charity Commissioners formally inviting them to remove the two trusts associated with the Unification Church from the Register of Charities. At that stage there was an indication of an appeal in the libel action, which held things up. The Court of Appeal dismissed the appeal on the 20th December 1982.
I think my noble and learned friend will realise that to have proceeded with the Charity Commissioners pending the appeal would have been inappropriate. The commissioners replied on the 20th January, stating that it would be considered an oppressive and unjustifiable use of their powers to institute a formal inquiry into the two charities. On the 7th February 1983 the Attorney-General again wrote to the Charity Commissioners. On the 10th February the commissioners replied that they remained of the conscientious view that on the information before them there was insufficient justification to use their powers under the Charities Act. On the 7th March the Attorney-General formally renewed his request that the commissioners remove the two institutions from the register. On the 17th March they replied that they had no power to do so.
Proceedings take the form of originating summonses directed to the trustees of the two relevant trusts associated with the Unification Church. One is called the Sun Myung Moon Foundation and the other is called the Holy Spirit Association for the Unification of World Christianity. I do not think I can give my noble and learned friend much other information without straying beyond the bounds of the Question.
Lord Allen of Abbeydale: My Lords, am I right in thinking that in addition to the two charitable trusts which have been referred to there are some 90 other organisations of a non-charitable kind connected with the Unification Church, so that a decision five years hence to strike the two charities off the register will not necessarily mean the end of this particular church?
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Whatever one thinks about it, is one not driven back to the point raised by my noble and learned friend that if this church is to be banned, it is a matter for Parliament? Whatever attitude one has to this particular sect, I think that this would raise questions of religious toleration which would not be entirely non-controversial.
The Lord Chancellor: My Lords, I do not think that I have particulars of the 90 other bodies. The period of five years was given by my noble and learned friend, but my original Answer gave the end of 1988 or the beginning of 1989 as a probable date for the end of the first instance proceedings.
I do not know that I can help the House very much on the subject of legislation. Parliament is omnipotent. However, I suppose that any legislation of this kind would be either private or hybrid. The noble Lord and the House will realise the difficulties which sometimes attend these measures. Perhaps I had better not talk about religious toleration.
Lord Avebury: My Lords, will the noble and learned Lord elaborate a little on the reasons why the Charity Commissioners felt that they could not exercise their powers in this instance? In what circumstances are the Charity Commissioners empowered to strike off the register any allegedly non-charitable organisation?
The Lord Chancellor: My Lords, I am not very well briefed in this matter because it is basically a question for the Charity Commissioners and the general law rather than for Her Majesty's Government. I may be wrong, but I think that the question demands an analysis of what on paper are alleged to be the objects of the foundations in question. Should it turn out that I have misled the House, I shall write to the noble Lord.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon my noble friend Lord Belstead will, with the leave of the House, repeat a Statement that is to be made in another place on the agriculture price fixing settlement.
It may be for the convenience of the House if I announce that the Committee stage of the Housing (Scotland) Bill will be adjourned at approximately 7 p.m. for a short period and that during this adjournment the Second Reading of the Armed Forces Bill will be taken.

Latent Damage Bill [H.L.]
2.59 p.m.
Report received.
Clause 1 [Time limits for negligence actions in respect of latent damage not involving personal injuries]:
Lord Hacking Lord Hacking moved Amendment No. 1:
Page 2, line 14, leave out ("any potential") and insert ("the")
The noble Lord said: My Lords, as those Members of your Lordships' House who were present at the Committee stage may remember, the noble and learned Lord cast me—I do not think that we got our biblical roles quite right—as Esau when I moved a similar amendment. Before inviting your Lordships to join the noble and learned Lord and myself again in the Book of Genesis, with the noble and learned Lord, I assume, playing the role of Isaac and myself again cast in the role of Esau, I should like to make some general observations concerning all the amendments that I have tabled for the Report stage.
My amendments, for discussion by your Lordships, are tabled for two principal reasons. The first is an attempt, possibly a forlorn one, to shorten the drafting of the Bill in certain parts in order to increase its clarity. It has been my submission on earlier occasions with earlier Bills that Bills are not improved through being written at too great a length and in too great complexity. While supporting the principle of the Bill and its main effect, I am critical of certain parts of its drafting. For that reason I have tabled the first three amendments.
The second reason for my amendments is to draw attention to the problems of the building and construction industry and, indeed, the professions at large as they face these proposals which will become law when the Bill is passed. There were few Members of your Lordships' House who spoke in support of my amendments or indeed in support of the building and construction industry at Committee stage. The noble Lord, Lord Howie, and myself almost alone carried the banner on behalf of these interests. I therefore hope that at this Report stage there will be more support for the amendments that I am moving.
Before the start of the Report stage I considered where I might find support. We are fortunate in having upon the Woolsack the noble and learned Lord, who has had a long career as a lawyer and as a public speaker and paper writer. It was not difficult, therefore, to discover an example, during the noble and learned Lord's illustrious career, of his espousing the cause of the professions. In 1977, if my information is correct, the noble and learned Lord delivered a powerful speech on behalf of the professions recommending, among other things, that they should be represented by a confederation of British professional associations. The noble and learned Lord then said that the professions should be:
"more united and self-conscious of their separate interests in putting forward their distinctive point of view".
I can do no more than echo and endorse those words of the noble and learned Lord. That is what I have attempted to do at Second Reading, in Committee and now on Report. In doing so I have tried particularly to focus upon the problems of the building and construction industry.
Despite my efforts to gain more support at this stage of the Bill, it is unfortunately the case that several noble Lords with deep experience of the building and construction industry are not able to be present. However, the noble Viscount, Lord Caldecote, the noble Earl, Lord Lloyd-George, and the noble Lords, Lord Mais, Lord McAlpine of Moffat, Lord Kimball and Lord Taylor of Hadfield, all with deep experience within the building and construction industry, have
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kindly agreed that I should mention their names in support of my amendments. This concludes my introductory remarks upon the amendments that I have tabled on Report.
I turn to the particular amendment under discussion. There are, in fact, two amendments concerning which the noble and learned Lord detected at an earlier stage the voice of Jacob behind Esau. The amendments were suggested to me by the Law Society. They concern the identification of the party who has the knowledge for the purpose of the "knowledge tests". In case that sounds a little technical, I should like to explain it in simple terms. One of the major provisions of the Bill is to allow plaintiffs an extended period of time in which to bring their actions, a period based upon the time when the plaintiff knew or should have known that he suffered the latent damage. The counter-balance is the long-stop provision (contained in the proposed Section 14B) which is designed to provide a complete cut-off point after 15 years stemming from the breach of duty. We shall come to that point later. Instead of referring in subsection (5) to the earliest date on which "the plaintiff" first had knowledge—there are then a number of tests upon which I shall later be commenting—the Bill uses the phraseology -any potential plaintiff". This is dissimilar to the Limitation Act. Section 11(4)(b) of the Limitation Act—the equivalent provision concerning personal injury—contains direct reference—
Lord Lloyd of Kilgerran: My Lords, I am sorry to interrupt the noble Lord and I must apologise also because I missed the first three minutes of his speech. The noble Lord mentioned the name of the noble Lord, Lord Howie of Troon, with whom I have been associated in some building activities through the Institution of Consulting Engineers. Is the noble Lord now speaking to Amendment No. 6?
Lord Hacking: My Lords, the answer is simple. I am speaking to Amendments Nos. 1 and 2. I am sorry if I did not make that plain. I regret that the noble Lord missed the first three minutes. I shall not, however, repeat what the House has already heard. I do not intend to have a second run.
I was making the point that the Limitation Act 1980 directed its attention, in an equivalent provision concerning persons who suffer personal injuries that they know not of at the time, to the actual plaintiff. Section 14 of that Act therefore contains an extended period for those persons to bring their actions. This was not the law until 1963. In 1963, however, following the sad case of Cartledge and Jopling, where a number of miners were found to be statute barred and unable to bring an action for damages for severe injuries, Parliament came to the rescue. What was not dealt with by Parliament in 1963 was latent damage—the matter that we are now discussing.
The simple and straightforward point is that this Bill, instead of identifying the actual plaintiff—the only person who is, in the end, concerned—who has brought the proceedings, uses the wider language of "any potential plaintiff". It is true that the noble and learned Lord made plain in Committee that it was the intention of this provision only to identify the plaintiff

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who subsequently brings the action. Thus the noble and learned Lord sought to persuade me that the amendment was not necessary and that the meaning was clear enough from the face of the statute. That is the point of issue between the noble and learned Lord and myself. I would respectfully ask him whether he will be so kind to consider again this drafting matter—it is nothing more—and to consider whether it would not be simpler and easier to refer to "the plaintiff" and to remove altogether the descriptive passage that lies between lines 19 and 23 on page 2 of the Bill. I beg to move.
Lord Denning: My Lords, I should like to support this amendment. As I see it, this is a matter of drafting. Amendments Nos. 1 and 2 put the matter in simple, clear, intelligible language, whereas the Bill, in the proposed Section 14A, seems to me to be obscure and to give rise to many points on which lawyers may disagree.
Let me give noble Lords an illustration from subsection 7:
"The other facts referred to …above are"—
and this is the paragraph which I find difficult—
"(c) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant".
That takes an awful lot of understanding, if I may say so.
The same applies to a lot of this Bill. It seems to me, from reading it, that the amendment put forward by my noble friend Lord Hacking makes it quite clear that it has to be,
"of such facts about the damage … as would lead a reasonable person … to consider it sufficiently serious to justify his instituting proceedings".
In other words, I prefer the simple language of the amendment rather than the complicated language of the original draft although they both come to the same thing. I therefore support the amendment.
Lord Elwyn-Jones: My Lords, was the noble and learned Lord not dealing with the third amendment in his most interesting observation?
Lord Denning: My Lords, I have been trying to speak to all of them.
Baroness Phillips: My Lords, as one who is a layman in these matters, who has tried rather hard to follow this discussion, I wonder whether the noble Lord, Lord Hacking, when he replies can enlighten me about the reference to Esau and Jacob. So far as I can recall, neither was a legislator or a lawyer. I am waiting to learn the erudite connection in his introduction of the amendment.
The Lord Chancellor: My Lords, I am afraid that I am responsible originally for the reference to Genesis. Perhaps I may enlighten the noble Baroness. There is a story in Genesis about when Jacob led his rather blind old father Isaac to believe that he was Esau by tying a goat's skin on to his hands. Isaac was slightly puzzled and said, "The voice is the voice of Jacob but the hand is the hand of Esau", who was a hairy man.
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I am sorry to see that the right reverend Prelate was driven out by that. But, with respect, I think that the noble Lord, Lord Hacking, had the roles wrong; or perhaps I did at the Committee stage. The original purpose of my reference in Committee was to point out that he was speaking in the part of the Law Society rather than in his own character. I believe that clears that matter up.
My belief is that we shall have to deal with Amendment No. 1 now because Amendment No. 2, despite my noble and learned friend Lord Denning's powerful oration, has nothing to do with the point in Amendment No. 1. If Amendment No. 2 were to succeed—I express no opinion as to the probability of that—Amendment No. 3, as a matter of order, could not be called. I think that Amendment No. 3 probably had more connection with Amendment No. 1 than did Amendment No. 2. However, this was discussed at length in Committee, when I perhaps gave too short and cursory a reply because at that stage we had present my noble and learned friend Lord Scarman who was responsible for the report and who spoke against this particular amendment for reasons which I then thought saved me the trouble—
Lord Hacking: My Lords, I apologise for interrupting the noble and learned Lord. It is entirely my fault. The amendments on which I was addressing the House were Amendments Nos. 1 and 3, which are coupled together and which are the Law Society amendments as the noble and learned Lord detected with the voice of Jacob through Esau. If I may, I shall address your Lordships on Amendment No. 2, which is a separate matter, in a moment.
3.15 p.m.
The Lord Chancellor: My Lords, I think that would be the convenient course. It was perhaps my fault that I did not spell out the reasons in detail as to why I did not accept Amendment No. 1 in Committee. Basically it is a drafting amendment and it is based on a false assumption. Those who were responsible for Amendment No. 1 have made the false assumption that the effect of the reference in Section 14A(5) of the proposed new clause to any potential plaintiff is to cause the starting date for the provision to run at large against all potential plaintiffs as soon as any potential plaintiff has actual knowledge that he has suffered damage. The starting date, they say, is the earliest date upon which any potential plaintiff has knowledge of the facts referred to in subsections (5)(a) and (5)(b).
However, those references are to the material facts about the damage and the other facts relevant to the current action, in both cases as defined in the clause. The intention of these provisions, as applied by the proposed Section 14A(6) and 14A(7), is to cause the period of limitation,
"to start to run when the plaintiff knows, or might reasonably be expected to know, that he has suffered such damage as would justify a reasonable plaintiff in initiating the proceedings in hand against the defendant who did not dispute liability and was able to satisfy a judgment".
I take that from paragraph 4.8 of the Scarman Report.
The Law Society founded its argument on knowledge of the existence at large of the tortious act but the clause is founded on the damage in respect of

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which damages are claimed. The material facts concern that damage and his damage is unique to each separate potential plaintiff. The true nature of the test can be brought out by considering the case of a negligent act which may cause damage to several plaintiffs, such as the negligent drawing of a will. When such a potential plaintiff is inclined to proceed his statement of claim will allege (a) that the advice was given (for instance, by the will being drawn); (b) that the advice is beyond correction (as when the testator has died); (c) that the will fails in its alleged purpose to benefit the plaintiff; and (d) that the plaintiff only discovered the damage he has suffered on a date within the Section 14A limitation period.
The defendant, for his part, will challenge as a matter of limitation under (d) above on the proposed subsection (6) ground that a reasonable plaintiff would have commenced these proceedings earlier and that the time has run out. He may even show as a matter of evidence that earlier, albeit separate, proceedings were commenced by a different plaintiff affected by the negligent advice. The example also illustrates the need for some expression such as "potential plaintiff" instead of, as is proposed in the amendment put forward, the word "plaintiff" without the adjective "potential" inserted in advance of it.
For example, in the above instance I gave, if the special period of limitation expired before any plaintiff took action there would have been no actual plaintiff to consider but 10 potential plaintiffs. If an action were brought outside the special limitation period the defendant would be able to show, if such were the case, that the starting date had begun when the actual plaintiff was only a potential plaintiff who might reasonably have been expected to know that he had suffered such damage as would justify a reasonable person in instituting proceedings.
Another case which I could cite in support of the text as drafted is where one or more of the potential plaintiffs has special knowledge or expertise; for instance, he may be a structural engineer or a solicitor. While his expertise may allow him to detect the signs of damage in advance of other plaintiffs, the effect of the proposed Section 14A(6) and (9), as drafted, is to ensure that the other potential plaintiffs are not disadvantaged by this fact.
A defendant to an action brought by a second plaintiff cannot simply escape by saying that more than three years have elapsed since a first plaintiff discovered the signs of damage, if it is not reasonable to impute the first plaintiffs knowledge against the second plaintiff under Section 14A(9) and if the material facts about the damage were not such as to lead a reasonable person to institute proceedings. The reference to potential plaintiffs is also necessary in relation to Clause 3.
The Law Society says that it is difficult to understand why that can be so, since a new cause of action is only created by Clause 3(1) of the Bill where the predecessor in title had not discovered the defect. However, that argument overlooks that there may be several concurrent interests in the property and that the holders of each of these interests may have a separate right of action in respect of the same act of negligence. I could give examples of the transfer of
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freehold land subject to leases or easements, or the mortgaging or chartering of a defectively designed ship. I am afraid that this is not every exciting stuff! However, I must point out that the draftsman, to whom I referred the amendment before, still sticks to her opinion. She is not yet convinced against her will, and I take the same view as she does.
Lord Hacking: My Lords, in moving the amendment it was my purpose to ask the noble and learned Lord whether he would be kind enough to give the matter further consideration. I am not sure whether he has been referring to discussions which have taken place since the Committee stage or whether they took place before the Committee stage. However, I still seek from him the kindness of his offer to give the matter further consideration.
The noble and learned Lord has taken us twice, by a long and complicated journey, through the provisions of the proposed Section 14A, and I shall have much more to say about that when I move the next amendment. However, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking moved Amendment No. 2:
Page 2, line 14, leave out from ("knowledge") to end of line 41 and insert ("of such facts about the damage that was attributable in whole or in part to the act or omission in respect of which damages are claimed, as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings in which such damages are claimed.").
The noble Lord said: My Lords, I shall now be addressing your Lordships—and I feel sure of my ground now I have a numbered Marshalled List in my hand which I did not have earlier—on Amendment No. 2 which stands by itself. I am delighted also that the noble Lord, Lord Lloyd of Kilgerran, is now in the Chamber so that I shall not have to repeat any of my remarks on this amendment.
The amendment is directed to making this part of the statute simpler and shorter. As I have commented, the noble and learned Lord has had to take us twice, by a complicated journey, through these subsections. As I drew attention to your Lordships in Committee—and I do so again briefly for those of your Lordships who were not present in Committee—the Bill sets out to provide a series of tests of the plaintiffs knowledge, or the knowledge that should be impugned upon the plaintiff, for the starting point of this extended period of limitation which will enable him to bring his action three years from the date when he knew or ought to have known that he had suffered latent damage. There are two main tests. The first test appears in subsection (5)(a), which is directed to:
"the material facts about the damage in respect of which damages are claimed".
The second test refers to:
"other facts relevant to the current action".
Having established those two main tests, the statute then goes on to provide a series of subtests. Subsection (6) sets out the material facts and the tests in that regard. Subsection (7) provides the further tests in respect of "the other facts" which are relevant for the test of the plaintiffs knowledge.
I seek only to establish the principle that these subsections could be reduced in size and usefully brought to a position of greater clarity without in any way moving away from the recommendations of the Law Reform Committee. Indeed, the noble and learned Lord, Lord Scarman, who is not with us today but who was with us in Committee, accepted that this amendment was loyal to his committee's report and to the Bill. He sought only to say that the tests themselves were not difficult. Those of your Lordships who were present in Committee will recall that he then went through each of the individual tests.
My riposte then and my riposte now to the noble and learned Lord, Lord Scarman, is that while the tests individually are not complicated—and it was amply illustrated by the noble and learned Lord just now in the submissions which he made on my earlier amendment—on every occasion that the test of knowledge arises, the plaintiff has to go through this complicated journey. He goes through one gate after another, turning left, turning right and then going forward. It is almost like snakes and ladders.
That is not a satisfactory imposition to place upon plaintiffs; it is not a satisfactory imposition to place upon defendants. In other words, it is not satisfactory to have such an imposition upon any party in litigation. Moreover, as I commented in Committee, statutes are not only used in courts and subject to construction by lawyers and judges; statutes are lifted off the shelves by insurance men and by others who want to know the law and the position of their client, whether their client be a plaintiff or a defendant. Surely it all adds up to this: by having longer and more complicated provisions, litigation is encouraged and the efficiency of the Bill is lost. I beg to move.
Lord Denning: My Lords, I was really speaking to this amendment previously. My plea was that we should have the simple language of the amendment instead of the complicated language of the Bill. The language of the Bill is still obscure and it is only matched by the obscurity of the language used by my noble and learned friend the Lord Chancellor on the last occasion. I support the amendment on the ground that, for goodness sake, let us have our legislation in simple, clear language!
Lord Edmund-Davies: My Lords, I should like to identify myself with that view. The proposed language seems to me to be far clearer than that at present embodied in the Bill.
Viscount Esher: My Lords, I am glad to hear that the noble and learned Lord, Lord Denning, supports the amendment. I am sorry that I have been unable to attend earlier debates on the Bill, but I have read them with great care having myself, as a young architect many years ago, been through this mill, and wishing to do what I could to support the position taken by the professional people in the building industry and people speaking for the industry itself.
3.30 p.m.
In the instance I mentioned just now the plaintiff was a government supported development
16
corporation, the contractor was a famous international building firm and the defendants were three young architects, one of whom was myself, paid 10 per house—this was a housing project—in the way of fees, on which we could not possibly carry the insurance needed, nor afford the cost of representation of the quality available to the other parties.
It was the plaintiff and the contractors who had—and I think I quote—"the powerful organisation and articulacy" flatteringly credited to the building professions by noble and learned Lords. In the event we met our half share of the liability by selling my family silver. For those not so fortunate it would have meant bankruptcy and the end of our practice.
I mention this ancient tale because we now have a new generaton of young architects widely admired, I think I am right in saying, not just by architects themselves but by the public in general, yet almost to a man they are what the Victorians used, rather brutally, to call "men of straw". At the other end of the age spectrum, with increasingly early retirement, we are going to have a number of pensioners vulnerable to what are called "stale claims" which the RIBA has shown could be as much as 30 years old even with the long stop proposed in the Bill.
Much has been heard in these debates of discoverability; too little, I would suggest, of insurability. I support this amendment, and in particular its reference to the building industry as a special case, because insurability depends on a clear definition of risks. This is particularly difficult in our industry. The Law Reform Committee referred to the
"time-consuming, expensive and sometimes impossible task of ascertaining exactly when damage occurred".
Lord Broxbourne: My Lords, where does the noble Viscount find in this amendment a reference to the special characteristics of the construction industry? Surely those references come in Amendment No. 6, an important amendment which is awaiting discussion.
Viscount Esher: My Lords, perhaps the noble Lord, Lord Hacking, could make this plain. I hope I am speaking to his Amendment No. 2.
Lord Hacking: My Lords, I hesitate to intervene. It is not for me to decide issues between two noble Lords. However, my amendment particularly directed to the construction industry is indeed Amendment No. 6 and the collateral amendments to it.
Viscount Esher: My Lords, the Law Reform Committee referred to the difficulty of ascertaining exactly when damage occurs, which is critical in this Bill. Noble and learned Lords will be familiar with the Latin maxim "Interest respublicam ut sit finis litium", which although the Latin is a little odd, could be translated as "It is in the interests of society that there should be an end to litigation".
However, it is no good defining the end if you cannot trace the beginning. In all other countries about which I have been able to obtain information, the limitation period runs from the date of completion. Only thus can the building team be properly insured and only thus can the claimant be sure of getting the two things he must have—certainty of compensation

17
and speed of payment—so as to limit the risk he carries.
In the view of the industry the committee's report, and the Bill itself based upon it, contain two fatal flaws. The first is the failure to meet the special needs of the building industry, when on its own admission latent damage concerns the building industry probably more than any other section of society. The second is the neglect of the problem of insurability.
If Ministers in another place insist on having this Bill as it stands, unamended, new legislation is inevitable if we are to protect this country from the insurance famine which has become a major threat to American society. In the event of that legislation, I would suggest that it must contain two components. First, it must be fully compatible with the practices of the European Community, which are, outside the United Kingdom, closely comparable; and, secondly, it must look towards what many of us in the industry see as the only sensible way ahead; the collective responsibility and the collective insurance of the whole building team, consultants, contractors and developers (often in any case one organisation now in the case of design and build contracts) so that we can at last work as a team and not face the expense of spirit and the waste of the time of the courts fighting one another. In other words, in line with modern practice we should move the long stop around to fine leg and get a better wicket keeper.
Lord Elwyn-Jones: My Lords, it is no doubt due to my lack of understanding, but it appeared to me that the noble Viscount was addressing himself to the final amendments, to which we shall come in the fullness of time, and at this rate I do not know when that will be. When two noble and learned Lords find obscurity in the drafting, the provision merits, putting it at its lowest, the most careful examination again by the noble and learned Lord.
I was greatly impressed by the assistance given to us by the noble and learned Lord, Lord Scarman. He reminded us that a committee of very experienced characters considered these problems over the course of four years, went into them carefully and gave their conclusion in paragraph 4.7 that:
"although the proposed amendment has the advantage of simplicity the more complicated formula for which the committee opted gives more guidance to a plaintiff uncertain as to his position than does the simple advantage".
I rather liked his peroration:
"In this case, brevity may be the soul of wit but it is not the soul of explanation".—[Official Report, 8/4/86; cols. 99–100.]
For my part, I am reasonably content with the Bill as it stands.
The Lord Chancellor: My Lords, the Bill contains two principal proposals. One has to do with the principle of discoverability, which provides potential plaintiffs with an "esprit de l'escalier" after the six years is over. The other is the long stop which is for the benefit of architects and others. I must tell the noble Viscount, Lord Esher, that his speech was directed solely to the latter, whereas this amendment is concerned entirely with the former. I promise to deal with some of his points when the latter come into consideration on the later amendments.
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My noble friend Lord Broxbourne was quite right in sounding a minute gun warning in the earlier parts of his speech. But having said that, and after having had the advantage in Committee of the noble and learned Lord, Lord Scarman, and at this stage of the noble and learned Lord, Lord Elwyn-Jones, I must range myself unequivocally on their side in spite of the battery of heavy artillery coming from the Cross-Benches at the other end of the Chamber.
This point was considered very carefully indeed by the Scarman Committee at paragraph 4.5 and going to and including paragraph 4.8 of its report. Broadly speaking, it had to decide as to the application of the discoverability test to a potential plaintiff in one of three alternative ways. One, which it enumerated as three and which it rejected in its entirety, was to disregard constructive knowledge altogether. This amendment follows the Committee's report at least to that extent. That leaves the first two.
The first, it is said, would be to define knowledge fairly generally. That is what this amendment seeks to do. It follows a Scottish model. If my noble and learned friend on the Government Front Bench will forgive me, that is neither an advantage nor a disadvantage in discussing possible changes to the English law.
The second was to adapt the words already present—a factor to which none of the noble and learned Lords on the Cross-Benches referred—in the consolidation Act of 1980. It was after careful consideration that the Scarman Committee in its report and the noble and learned Lord, Lord Scarman, at the Committee stage came down firmly on the side of that second alternative. They gave their reasons at length. My noble and learned friend Lord Denning spoke of cumbersome and complicated language and said that my exposition of the position under Amendment No. 1 came within that definition, to which I willingly plead guilty. I did not know any other way to say what I wanted to say.
The noble and learned Lord, Lord Edmund-Davies, said the same thing, but I remain rather firmly of the same opinion that the noble and learned Lord, Lord Scarman, expressed in Committee (at col. 100 of the Official Report) and the noble and learned Lord, Lord Elwyn-Jones, gave us in his speech this afternoon. The noble and learned Lord, Lord Scarman, observed that there was
"a balance of advantage and disadvantage to be considered"
in defining knowlege for the purpose of the potential plaintiff's extended period of limitation.
The Law Reform Committee's recommendation at paragraph 4.8 of its report, to which subsections (6) to (9) inclusive give effect, provide the plaintiff with more guidance than the amendment now proposed by the noble Lord, Lord Hacking. The noble and learned Lord, Lord Scarman, considered that it was a necessary safeguard for the potential plaintiff, before time had run against him, to be able to establish, first, factual causation, found in subsection (7)(a) of the Bill; the identity of the defendant, found in subsection (7)(b) of the Bill; and, if the breach of duty was that of a person other than the defendant,
"the identity of that person and the additional facts supporting the bringing of an action against the defendant".

19
found in subsection (7)(c) of the Bill.
Then he said—and I would respectfully adopt these words from his Committee speech:
"those details are not difficult and they are not legal jargon; they are indicating to a plaintiff and his adviser the sort of matters which they have to consider in making up their minds as to whether the damage is sufficiently serious".—[Official Report, 8/4/86; cols. 99–100.]
I respectfully suggest to the House that Lord Scarman and his Committee were right. They gave the matter careful attention.
That simplicity, as I think the noble and learned Lord, Lord Elwyn-Jones said, is not necessarily a safeguard against litigation. Rather than the spurious simplicity contained in general words in a sentence or two, the spelling out of guidelines is, in our system—although not, I think, in some Continental systems—a safeguard against litigation. The whole law of negligence in the French civil code is contained, I believe, in a single sentence, but is has not led to any diminution of litigation in French courts.
This is a clear indication of where we should follow the committee and not follow the rather spurious simplicity of the proposed amendment. I am not saying that the world would come to an end if the amendment were passed (except that Amendment No. 3 could not be called, of which it is my duty to remind the House), but I think that the text is better. For that reason, I am unable to accept the amendment.
3.45 p.m.
Lord Hacking: My Lords, I feel a little hurt that the noble and learned Lord referred to my amendment in terms of "spurious simplicity". I should make it quite plain, although I would be more than happy to be associated with Scotland and Scottish law, that the drafting of my amendment does not come from Scotland; it comes from the Bill that your Lordships are considering. It is an attempt, no more and no less, to extract the essential provisions out of these series of texts without inviting plaintiffs or defendants to go through these complicated journeys which were so well illustrated by the noble and learned Lord when he was addressing this House on Amendments Nos. 1 and 3.
Having said that, it is not my intention to press this to a Division. In a moment or two, if no other noble Lords wish to address this House, I shall be withdrawing this amendment, but before I do so I should like to thank noble Lords who have spoken in support of my amendment, and I should particularly like to thank both the noble and learned Lords who spoke from these Benches in favour of this amendment. At least I feel I have a little more support than I had in Committee, and I am very grateful for that.
I am also grateful to the noble Viscount, Lord Esher, for his comments. As was pointed out by the noble Lord, Lord Broxbourne, the weight of Amendments Nos. 4, 5 and 6 is directed towards the problem of the construction industry, but the words that the noble Viscount spoke are also applicable in a more general sense to this amendment, because it is in the interests of the building and construction industries and in the interests of all plaintiffs and defendants that there
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should be greater clarity to this Bill. Without naming those distinguished bodies in the building and construction industries that have viewed this amendment and commented favourably upon it, I should like to record that it has the support of some most distinguished bodies and institutions within the industries.
Having made those comments and having at this stage not obtained the willingness of the noble and learned Lord to give further consideration to the drafting of this part of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 3:
Page 2, leave out lines 19 to 23.
The noble Lord said: I shall not formally move this amendment because now we have the numbering right this was considered when I addressed your Lordships on Amendment No. 1. Therefore, I do not intend to move Amendment No. 3.
[Amendment No. 3. not moved.]
Lord Hacking Lord Hacking moved Amendment No. 4:
Page 3, line 14, leave out ("An") and insert ("Notwithstanding section 14A of this Act no")
The noble Lord said: My Lords, Amendment No. 4 should be considered with Amendments Nos. 5 and 6. They are all directed to the drafting of Section 14B. The proposed Section 14B is the section setting up the proposed long-stop provision. This amendment seeks to place an alternative starting event for the long-stop period. As drafted, although the words are not precisely used in the Bill, the starting period for the long-stop is 15 years from breach of duty. This amendment seeks to give an alternative starting date based upon completion.
In Committee both myself and the noble Lord, Lord Howie, tabled different amendments which were discussed together. The noble Lord, Lord Howie, and I have now joined to move one amendment—not that we were apart before; we were simply examining the problem slightly differently. We were making exactly the same proposal; namely, that there should be an alternative starting date based upon completion, but the time periods were different and the noble Lord, Lord Howie, spread his amendment wider than I did. My amendment was directed just at the building and construction industries, as is this one, but the noble Lord, Lord Howie, based his amendment rather wider.
I should draw to your Lordships' attention that my amendment also seeks to give greater clarity to Section 14A. It seeks to remove some of the longer phraseology contained in the proposed Section 14B. Thus another feature of my amendment is another attempt to give greater clarity to the Bill.
There seems to be a certain activity in the House. I do not know whether any noble Lord wishes to intervene. However, if no noble Lord wishes to intervene, I shall continue with my comments.
This amendment singles out the building and construction industry. It does so for two reasons. The

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first reason is that the building and construction industry is an industry whose activities are dissimilar to other activities also covered by the Latent Damage Bill; such activities as the provision of services and the manufacture of products. Your Lordships may remember this point from Committee. Because of the wide base of this proposed measure, covering all activities, definition is lost. I have tabled and moved this amendment because in those circumstances it seems logical in the construction and building of structures, when it is possible to have greater definition, that that definition should sensibly be included in the Bill.
The other point is that although this Bill, as I pointed out earlier, covers the full range of activities from the provision of services and the making of products, the truth is that it will be used on the great majority of occasions just in the building and construction industries. For that second reason it seems to me particularly important properly to focus on that area of activity in which the Bill has its main concern.
I am still conscious that there is a certain amount of movement in the House.
Lord Mishcon: In your favour.
Lord Hacking: My Lords, if your Lordships wish me to continue, I shall do so, but if I am wanted to give way to more important matters, I should wish to do that.
The problem therefore, when one applies the test of breach of duty as the starting event in the building and construction industry, is that that breach of duty concerning the same defect can occur on a number of different occasions. For example, it can occur when the building was incorrectly designed; when the building although correctly designed was incorrectly drawn on the relevant plans; when plans, either incorrectly designed or drawn, were submitted for the contractor's tender; when the defect was constructed or assembled; when the premises or that part of the premises containing the defect were improperly inspected or when the building is handed over for completion. I have set out six—I could have identified more—different points in time relating to the same defect when the limitation period under the long-stop provision might be activated. It is for that reason that it seems sensible—which is why I am urging this on the House—that, for the building and construction industries, the completion date should be the starting point. When this matter was considered previously Parliament decided that the limitation period should begin in the building industries unequivocally and clearly at the completion date. I refer to the Defective Premises Act 1972 and in Section 1(5) the test for the date for breach of duty is when the building or part of the building has been completed. Thus Parliament has already decided that an action should start in reference to a building on completion.
There is also relevance to what other jurisdictions do. I have carried out a survey and I shall briefly summarise my investigations concerning other jurisdictions, particularly in the EC. The result of my inquiries reveals that while their statutes of limitation are not entirely similar—there are different concept
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sinvolved—they all have a long-stop period, which may be new to English law but not new to European law, based on completion. In Italy it is 11 years from completion. In France, it is 10 years from acceptance. In Germany, depending whether it involves injury to people or things, it is 30 or eight years from acceptance. In the Netherlands it is a long time—30 years from delivery. In Spain it is 15 years from completion. As a matter of interest in the United States of America, in that highly litigious country, I can quote from two states. In Georgia it is eight or five years from substantial completion and under the laws of Massachusetts there is a statute called the Statute of Repose, which operates after the limitation period, within which a plaintiff is entitled to bring an action—in this case three years. The Statute of Repose—the equivalent of our long-stop period—then sets six years from substantial completion. When, therefore, other jurisdictions have considered what should be the appropriate starting date, they come to completion.
For all those reasons I would submit that this should be the appropriate starting point. It is a matter which concerns the building construction industry. Again, I tell your Lordships that a great number of very substantial bodies (and when I say "substantial", I mean substantial in their experience) and worthy institutions in the building industry—and the Royal Institute of British Architecture is one, and the Institution of Civil Engineers, is another; indeed, all the leading institutes—support this amendment and through me they urge your Lordships that this is an important amendment, important for clarity and important for the execution of this Bill. For all those reasons I move this amendment. So that your Lordships are not in any doubt, my arguments are directed to Amendments Nos. 4, 5 and 6.
4 p.m.
The Lord Chancellor: My Lords, I have ascertained that the Statement has been cleared but from what inquiries I have been able to make the consensus, I gather, is that we should continue with this amendment until the end of the debate and take the Statement afterwards. If that is the will of the House, and only if it is the will of the House, I now say that the Question is, That Amendment No. 4 be agreed to.
Lord Howie of Troon: My Lords, as your Lordships will recall, I was associated with the noble Lord, Lord Hacking, in somewhat similar amendments at the Committee stage of the Bill. My amendments were alternatives to his but, as he said a moment ago, we sought the same end ultimately. We have now reached a compromise where we are putting forward and speaking to the same amendment. These amendments really try to seek certainty in the application of the long stop, which is a new matter for English law although, as the noble Lord, Lord Hacking, said a little while ago, it is not unknown elsewhere.
It is fair to say that our compromise amendment does not give the kind of total certainty that I should have liked to see. That could only have been achieved, as the noble Viscount, Lord Esher, said in an earlier debate, by using the time of completion, and that alone, as the beginning of the long stop period. But

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that has proved to be unattainable. We discussed this earlier on with the Government and the Government have been unyielding. We have reached a half-way house in which there are two dates for the long stop. The long stop will reach 15 years from the breach of duty or 12 years from the time of completion.
I think it is fair to say that that is somewhat rough justice but I believe it to be rather less rough justice than the Bill gives us. The point about certainty was touched upon earlier by the noble Viscount, Lord Esher, when he remarked that uncertainty throws undue burdens of insurance on the industry and hence, through that, on to the costs of building in general. It has a further ill-effect on the building industry: that uncertainty on the part of the designer leads him to overdesign and to add further cost to the industry in that way. It also leads him to be somewhat sparing in innovation.
The search for certainty interested the Law Reform Committee as well. In Part 2 of the report the committee was dealing with the present state of the law and with the question of causes of action accruing when damage occurs—no sooner and no later, as the committee says in paragraph 2.1 of the report. After considering that question, the committee gave its view in general terms of the existing law in paragraph 2.12. So far as defendants were concerned, they were faced with great uncertainty and the committee went on to say:
"The courts are now being required to perform the time-consuming, expensive and sometimes impossible task of ascertaining exactly when the damage occurred. We do not think that this situation can be justified".
That is what the committee said. The committee then went on to recommend some changes in the law, including the introduction of the long stop of 15 years, which is included in the Bill. But the weakness of the long stop, as I see it, is that it is measured in the Bill from the breach of duty. Ascertaining when the breach of duty occurs in respect of the long stop is no more certain than ascertaining the time the damage occurred under the present legal conditions. I outlined this problem in some detail in committee, and I shall not go over it again. Noble Lords will remember that I used the example of the foundation of a power station. I demonstrated how there were a number of occasions when the breach of duty could occur and indicated how those occasions could be spread over a considerable number of years. My arguments are to be found in col. 114 of the Official Report for 8th April last. As I have said, I shall not repeat them today.
In fact, the breach of duty can only be determined if the courts are asked to perform time-consuming, expensive and sometimes impossible tasks of ascertaining exactly when it occurred. I suggest to your Lordships that if that could not be justified in connection with the time of actual damage, I do not see how it can be justified in terms of the breach of duty. The committee criticised the uncertainty in one case but the Bill keeps it in the other. I am sure that is not the kind of inconsistency that we should like to see continued.
There is one point that I should like to touch upon briefly. In the course of the Committee stage, in arguing against the amendments put down by the
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noble Lord, Lord Hacking and by me, the noble and learned Lord, the Lord Chancellor listed what he called a formidable list of supporters of the Bill in this connection. It was a formidable list, but who were they? There was of course the committee itself, which deliberated for four years on this matter, as I discovered earlier this afternoon. Four years was either too long or too short: who can tell? The list included the Official Referees, who are a learned and formidable body—learned perhaps more in law than they are in actual construction, though they know a good deal about the law on construction. The rest of the list consisted of other lawyers, accountants, property people, landowners and the Consumers Association.
Out of the 15 or 20 on that list, there were only two who were connected in any close way with the construction industry itself. One of them, I can say without appearing dismissive, was a somewhat small organisation and the other was a somewhat large organisation. I should say that since then the large organisation which featured on the list of the noble and learned Lord the Lord Chancellor has now changed sides and is today supporting the amendment of the noble Lord, Lord Hacking.
During our exchanges in the Committee stage, the noble and learned Lord the Lord Chancellor suggested that we did not want to swap lists of names. I think it was just as well that he suggested that because if your Lordships look through the list of people providing evidence to the committee, you will find that 30 or more were closely connected with the construction industry and they submitted evidence of one kind or another, but there were only two of them that he was able to bring to his aid during the earlier debate, and as I say, one of them has deserted him since then.
The compromise that we suggest has one major difficulty for the plaintiffs. There is no point in glossing over the difficulty—that is, if we have to choose between 15 years from the breach of duty and 12 years from the time of completion, there is the problem of something that occurs right at the end of a contract, where some plaintiffs might feel that in this compromise they were being shortchanged.
I ask your Lordships again to think back to the kind of contract which is really imporant, and that concerns the kind of example I have mentioned and also the kind of example mentioned earlier today by the noble Viscount, Lord Esher, where the likely plaintiff is somebody such as an electricity board or the Department of the Environment—that is, some quite substantial body, and where the project itself is quite substantial. In the kind of substantial project I am thinking about the dangerous period for structural faults—which are the important ones that should worry people, rather than minor ones—is the earlier part of the construction period and not the late part, where this overlap occurs. As I say, there is an element of rough justice but, taking one thing with another, it seems to me that the balance is reasonable.
My last point is this. I ask your Lordships to turn your attention to what 15 years actually means, and to think back to what you were doing 15 years ago. Can you say, hand on heart, that you can actually remember what happened and that there would be

25
good witnesses? Would 15 years add staleness to the memory? I can remember that 15 years ago I was involved in a construction project on the Firth of Forth; but without looking back at ancient records I cannot remember whether the project was in the design stage, whether the tenders had been sent out, whether the contract had been let or whether it was actually started. Somebody may remember, but I cannot do so. What is more interesting is that the senior people who were involved with me in that contract have all now departed from the scene: they have all retired and they are all gone. Fifteen years is a very long time, and some weight should be given to that aspect in our deliberations.
I said earlier that a compromise was rough justice. It is not exactly what the consulting engineers or the architects would want; it is not what the builders or the contractors would exactly want, and it is not what the plaintiffs would want; but it is fairer to everybody than what is provided in the Bill, and it should be supported.
4.15 p.m.
Lord Broxbourne: My Lords, this amendment provides an option which the Bill does not and it takes into account the special characteristics of the construction industry, which the Bill does not. Prima facie, it is therefore an attractive proposition. Of course it is not an open and shut case. Nobody acquainted with the intricacies of building and civil engineering law would expect it to be. For myself, I have spent many interesting, if not exactly hilarious, hours in my forensic capacity on these matters, and even in an editorial capacity, seeking to explain the mysteries of these matters. I refer to what for many years was known by the cold and impersonal title of The Annotation of the Standard Forms of Building Contract. For the new edition, the publishers very kindly renamed it Walker-Smith on the Standard Forms of Building Contract—but your Lordships will note that they waited until I changed my name before they gave it that pleasing description!
We are here concerned in this amendment with two related concepts: the length of the long stop and the starting date. As to the length, this is discussed in paragraph 4.13 of the admirable report (as one would expect from its leading author) of the Scarman Committee. As they indicate, of course there is no absolute solution in mathematical terms. As they say, in the final analysis the question of length is one of judgment. In the event, they rejected 10 years, they rejected 12 years and they rejected 20 years. They recommended 15 years as striking the right balance: a good, pragmatic, British compromise approach.
However, the 12-year period proposed by the amendment is also a compromise approach between the periods of 20 years and 10 years recommended by various responsible bodies. The 20-year period, according to the report, would permit some stale claims and expose many defendants to the risk of litigation for an unreasonable length of time.
The 10-year period was also put forward in responsible and authoritative quarters. It is indeed the long stop period specified in that attractive document, the EC directive on product liability, on which I spent many hours years ago as the then chairman of the legal
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committee of what I suppose we must now call the unreformed European Parliament. Of course, that consideration may not be the only one that leads your Lordships to doubt the validity and correctness of the period there specified. But the 10-year period also suffers from a major defect. It is shorter than the period of limitation under the Limitation Act for contracts under seal, and that covers the great majority of contracts entered into by local authorities. The 12-year period avoids this difficulty and also it much reduces the danger of stale claims.
It has been argued that to shorten the period from 15 to 12 years prejudices the consumer—that is the building owner—but there is this balancing consideration of the insurance factor. The longer the period, the greater the reluctance of the insurer; and indeed there are many cases where claims have not been brought because no effective insurance has been completed. Therefore there is a powerful case. in my submission, for the 12-year period and I come shortly to the related question of the date: completion or date of breach. Here Lord Scarman's report, on page 20, says:
"A number of those who wrote to us—especially those involved in the construction industry—suggested that the date of completion would be even easier to ascertain than the date of breach t duty".
The noble and learned Lord the Lord Chancellor referred to the difficulty of defining the completion date. He referred to that on Second Reading:
"even in relation to the construction industry … Completion is a contractual concept, essentially difficult to apply, and perhaps wholly inapplicable to the law of tort".—[Official Report, 17/3/86; col. 799.]
With great respect and in the presence of so many distinguished noble and learned Lords, I wonder whether the dichotomy is not perhaps overstated. Of course, we are dealing here with tort, but contractual provisions regarding completion would clearly be a help in defining the date of completion. Those are spelt out in some detail and with precision in the main form of contract used—JCT 80—the joint contract tribunal form for those purposes, where clause 1 fixes the date for completion by reference to the date specified in the appendix and later clauses—I shall not weary your Lordships with a recital of them—give effect to that with provisions also covering extension in prescribed cases.
It also prescribes for certification, which reduces the effect of any objection as to imprecision or difficulty of application. The noble Lord, Lord Hacking, rightly drew attention to the importance of certification in an earlier stage of the proceedings. There is then the statutory authority for the completion date contained in Section 1 of the Defective Premises Act 1972 and also, if my recollection serves, in the rating legislation for unoccupied premises. It is not all one way. There can be uncertainty as to the date of breach, as the catalogue of possible dates specified in Committee by the noble Lord, Lord Hacking, showed. Therefore, taking account of all the difficulties and imprecisions of this complex branch of law, there is a case to answer, and possibly a formidable case, on both aspects of the matter—on the starting date and the length of the period.
No doubt further consideration will be given in the light of the observations made at this stage of the Bill

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and will be communicated to the House on Third Reading, when we come to it. I respectfully request that when reporting the result of this further consideration the noble and learned Lord the Lord Chancellor will give further and better particulars of his list of supporters cited in col. 128 on 8th April and will say whether their support precluded the option of the 12-year period. Those supporters whom he catalogued are, in any event, only a relatively small minority of the 100 to 150 consulted by the Law Reform Committee, as set out in pages 31 to 34 of the Scarman Report. I must respectfully inform the noble and learned Lord that most of those he cited have no direct concern with the construction industry.
We await the Third Reading with interest and anticipation. Meanwhile, to end on a non-controversial note, I think that the House would wish to express appreciation to the noble Lords, Lord Hacking and Lord Howie of Troon, for bringing these important matters to your Lordships' attention. In opening, the noble Lord, Lord Hacking, said he hoped that he would receive more support for this matter than he did in Committee. I hope that he will not, in that context and in regard to the support which I have sought to give him now, be tempted to recall the Virgilian lines, "Non tali auxilio nec defensoribus istis".
Lord Denning: My Lords, I should like to commend to the House and to my noble and learned friend the Lord Chancellor close consideration of this amendment. It is sought by the building and construction industry, which is the one most affected by this legislation. It gives full weight to the report of Lord Scarman's committee. It weighed the two alternatives from where the starting point should be. Should it be the date of the breach of duty or the date of the completion of the work? It came to the date of the breach of duty.
Agreeing so far, I should like to point out that we should remove inconsistencies in our law. In the Defective Premises Act 1972 the statute clearly provides:
"Any cause of action … shall be deemed … to have accrued at the time when the dwelling was completed",
and the 12 years runs from that date. That Act deals with the same question: defects in structure of a dwellinghouse when the dwellinghouse is built in such a way as to be not in a workmanlike manner or impliedly not fit for human habitation. The Defective Premises Act 1972 gives a 12-year limitation from the date of completion.
I hope that at least something will be done before the next stage of this Bill to co-ordinate in law all those provisions. There should not be a different limitation period for cases under that Act or under speciality contracts. Many building contracts come under speciality clauses and the limitation was 20 years, although it is now 12. When sued for breach of contract, those contracts had their own limitation periods. I ask only that this provision be considered with the other statutes so as to make them all equal if need be from date of completion, or let us strike out the date of completion in those matters and bring
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them into accordance with this Act. I plead for consistency in statutes relating to this matter.
4.30 p.m.
Lord Mishcon: My Lords, of course the noble Lord, Lord Broxbourne, was right when he said that there are arguments for and against any period of limitation or any long stop period that one cares to choose. I join with him in thanking the noble Lord, Lord Hacking, for the consistent way in which with assiduous skill he has tried to bring many amendments before the House at various stages of the Bill. His intention obviously has been to make this a better Bill. That does not necessarily mean that we must agree with the noble Lord's efforts.
Whatever period, as the noble Lord, Lord Broxbourne said, we choose there can be arguments of hardship for the plaintiff or for the defendant. The one thing that the committee did, bearing in mind, with great respect to the noble and learned Lord, Lord Denning, the Defective Buildings Act 1972 which had been passed before the committee sat and deliberated, was to come to the conclusion that, yes, there were arguments for 10 years, arguments for 20 years and arguments for 12 years, not from the breach of duty but from the completion of a building. The committee decided, with that homely, English sense of compromise to which the noble Lord, Lord Broxbourne, referred and which has stood us in good stead over the years, to make it a clear-cut case of 15 years.
The noble Lord, Lord Howie, made what he believed (rightly so) to be an effective point when he dealt with the question of memory. He asked: can you remember what happened 15 years ago? I turn to him and ask: can you equally remember with great accuracy what happened 12 years ago after the completion of a building? I must say that the difference in my mind, at all events, of what I can recollect 12 or 15 years ago is clouded in mistiness and I do not think that I would be able to point out with clarity a difference in my memories between those two periods.
Lord Howie of Troon: My Lords, I wonder whether my noble friend will say not "with clarity" but "with less unclarity".
Lord Mishcon: My Lords, if my noble friend wishes me to use the words "less unclarity", I shall certainly do so, but the point remains the same—
Lord Boyd-Carpenter: It is horrible English, my Lords.
Lord Mishcon: My Lords, it is horrible construction, if I may say so. That is what we are dealing with today, but in a different sense. Unless you have an overwhelming argument to the contrary, it is a little reckless, when you are discussing something—even if you have considered it for a few hours at Committee and Report stages—to throw overboard the deliberations of four years of a pretty high ranking committee. If we are to get this Bill through—and one hopes that this is not deferred till the Third Reading—then let us try to make up our minds and I suggest that we support that committee on this occasion.

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It is all very well to pass over the question of whether or not completion of a building is a more certain date from which to reckon time than is the breach of duty. I have looked at the wording and I see that it is,
"the date on which such building or structure, or any separate part thereof, was completed".
I must say that I can hear the noble Lord, Lord Broxbourne, with that eloquence to which we became so accustomed in cases of this type and others, delving into the mysteries of a building or any part thereof, or the structure thereof, and making a most uncertain case for when the date of this long-stop provision should apply.
But he quoted quite correctly the noble and learned Lord the Lord Chancellor, who does not need me to aid him in any argument. Indeed, he has remarked in the past that when I have endeavoured to aid him I have had quite the reverse effect on the House. But it so happens that at col. 799, if we are dealing with those who are experienced in these matters, he added a sentence which I hope I heard correctly—and I apologise to the noble and learned Lord if I did not—and which the noble Lord, Lord Broxbourne, did not quote. He said:
"Furthermore, on consultation the suggestion was firmly rejected by the official referees who are perhaps the specialists best qualified to referee this decision." [Official Report, 17/3/86.]
They deal with little else, as the noble Lord, Lord Broxbourne, knows, other than building cases and building disputes and that, we were told, was the definite view of the official referees.
Lord Broxbourne: My Lords, I am much obliged to the noble Lord for his characteristic courtesy. I have great respect for the official referees court, with which I was not wholly unfamiliar. They try many other cases which, I think, loom larger in their calendars—compensation for acquisition of land, landlord and tenant and other such matters. Large building and civil engineering contract cases go normally not to the official referees, because there are built-in arbitration clauses both in the standard forms of building contracts and in civil engineering contracts, as the noble Lord well knows.
Lord Mishcon: My Lords, I am obliged for that intervention. I think the noble Lord, Lord Broxbourne, will be the first to agree with me when I say that they, of all our judges, have the best experience of building cases and if this is the view that they have taken, then I say: so be it.
There is only one observation that I should like to make and I hope that it will be deemed to be a little relevant to what we are talking about on this amendment. In my view when we are dealing with the long-stop provision there is a case for saying, possibly—I underline the word "possibly"—that a plaintiff is the one who is hard dealt by in view of this arbitrary fixing of 15 years, when he might well have a case of hardship which he would want to bring before the court and when the court might be moved with an ultimate long-stop of 20 years.
I mention this only because my noble and learned friend Lord Silkin brought forward such an amendment at Committee stage. But I wanted the House to know, and I know that my noble and learned
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friend Lord Elwyn-Jones wanted the House to know, that our noble and learned friend Lord Silkin is absent abroad and might well have brought this before the House at Report stage. It is relevant to remember in that context, though it must be for him to decide, that there is a further stage of the Bill when he might have an opportunity of bringing that point again before the House.
Lord Howie of Troon: My Lords, before my noble friend sits down will he reflect that when the amendment refers to,
"such building or structure, or any separate part thereof'
it is referring to the fact that in big building contracts there may be several different dates of completion for different parts of the structure?
Lord Mishcon: My Lords, my noble friend Lord Howie has merely underlined the complexity of the definition.
Lord Hacking: My Lords, before the noble Lord sits down I wonder whether I may draw one other matter to his attention. The reference to separate parts is taken from the Defective Premises Act. I should like to say that it was taken from Scotland, but, in fact, that phraseology is taken straight from the Defective Premises Act.
Lord Mishcon: My Lords, I answer the noble Lord, Lord Hacking, only by saying that the fact that there can be complexity in one Act is no good reason for imposing it upon another.
Lord Lloyd of Kilgerran: My Lords, I intervene in this debate on only three grounds, which may he very briefly stated. First, I shall be speaking in the context of Amendment No. 6 without the advantage of having read that exotic volume known as Walker-Smith on Building Contracts, the title of which is, I understand, now to be changed to Broxbourne on Building Contracts. Next, in order to save time, I adopt wholly the facts put before the House today and also the facts put before the Committee, when the noble Lord, Lord Howie, as an engineer, so explicitly pointed out the problems affecting the building and construction industry.
My second reason for interfering—I beg your Lordships' pardon and I should have said intervening; I dare say that both those words are synonymous in the context of the length of the debate—is that I remember the words of the noble and learned Lord, Lord Wilberforce, at the Committee stage, when he said that the terms of reference of the committee of the noble and learned Lord, Lord Scarman, were too narrow.
In my speech at Second Reading I indicated the problems arising for the construction industry and the insurance industry. The distinguished chairman of Lloyd's the noble Lord, Lord Kimball, also referred to that difficulty, and the noble and learned Lord the Lord Chancellor in the course of his speech at Second Reading was good enough to take up my point about insurance problems. If, as I anticipate, for a variety of reasons, the noble and learned Lord who sits on the Woolsack will be rejecting this amendment, may I

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respectfully follow the general theme at the end of the speech of the noble Lord, Lord Broxbourne, when he hoped that something more might be said about the problem which has arisen in the construction industry? Certainly it is clear from these debates that the position of a very influential section of the construction industry, which earns so much money from exports and which would have tremendous difficulties in the interpretation of this Bill, should be considered later.
Therefore, I presume that if for any reason the noble and learned Lord the Lord Chancellor were to reject the amendment, he would assist both the House and many Members of the House who have expressed the difficulties that arise for contractors, consultants, builders and all the people involved in the construction industry. With great diffidence and reluctance, but in the interest of what has been said on behalf of the building industry, I ask the noble and learned Lord either to consider the amendment further or to indicate briefly what action could be taken to help deal with the mischief that the building and construction industry find arises from the Bill.
The Lord Chancellor: My Lords, as to one of the remarks made by the noble Lord, Lord Lloyd of Kilgerran, I heard the noble and learned Lord, Lord Wilberforce, say that the terms of reference were too narrow. However, as they took four years on their existing terms of reference, I shudder to think what would have happened if those terms had been enlarged. I believe that, on the whole, the noble and learned Lord, Lord Scarman, was not unduly constrained by those terms of reference. Indeed, he rather says so in the course of his report, so I do not think that I need trouble too much with that particular point.
Let us try to see the wood for the trees. The Bill was introduced to deal with a difficulty that arises out of the law of tort in negligence. The noble and learned Lord, Lord Scarman, said—and I agree with him—that there were two injustices: one to potential plaintiffs and one to potential defendants. The difficulty with potential plaintiffs he dealt with by introducing the period of discoverability in addition to the normal six years.
The injustice to potential defendants the noble and learned Lord dealt with by the so-called long stop. Do not let us forget that the so-called long stop effectively deprives a plaintiff of what would otherwise be his right for a wrong that has been committed against him. The second point that I hope will not be forgotten, despite the numerous and eloquent speeches that have been delivered on behalf of the construction industry, is that the construction industry is extremely well organised, is extremely articulate, and knows what it wants; whereas the unfortunate victims are not an identifiable body at all.
That is something that has governed my own thinking about this particular Bill more than anything else, because I have to defend those who are not, in the nature of things, able to defend themselves. That point was well made by the noble and learned Lord, Lord Elwyn-Jones, at some stage that I seem to remember, and also by the noble Lord, Lord Mishcon. Let me say
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that I thought that he was right, in view of a remark that fell from the noble Lord a few moments ago.
What is really being said in the amendment is that there is to be one law for the construction industry and one law for everybody else who is a potential defendant. One is first of all depriving an unidentified number of plaintiffs of what would otherwise be their rights. As the noble Lord, Lord Mishcon, reminded the House, the noble and learned Lord, Lord Silkin, told the House on Second Reading of an unfortunate experience of his own after a period of 25 years. Secondly, one is saying that there are to be first-class citizens in the form of the construction industry and second-class citizens in the form of solicitors, accountants and everybody else. One class is to have 12 years and the other is to have 15 years.
To add complexity to that situation of having one law for the construction industry and one law for everybody else, they are to start from different points in time. To add further complexity—and I know that the noble and learned Lord, Lord Denning, is keen on simplicity—not only is there to be a special law for the construction industry as to the date of completion but it is also to be completion not only of the building but also from when,
"further work to such building or structure, or such separate part of such building or structure, to rectify work already done, was completed".
That is not a move in favour of simplicity. I would say to the noble and learned Lord on the Cross-Benches: physician, heal thyself. It was not I who invented that!
4.45 p.m.
Lord Howie of Troon: My Lords, I am sorry to interrupt the noble and learned Lord, but when he speaks about there being one law for the construction industry and another law for the rest—and he mentions solicitors and others—does he not recollect that the amendments I put down at Committee stage were meant to include everybody, but that he threw them out anyway?
The Lord Chancellor: My Lords, I am dealing now with Amendment No. 4, and not with some other amendment that the noble Lord has not thought fit to repeat at this stage of the Bill. I think that that is enough to say in reply.
The first question, therefore, is whether it is right to have two separate laws with two different starting points for two different kinds of potential defendant. The Law Reform Committee recognised in paragraph 4.20 of its 24th report that the majority of claims for latent damage arose out of building and construction work. Having considered the matter very carefully, it did not recommend that there should be any special provision for that or any other particular sector. Indeed, the committee recommended that there should be no restriction in the areas of activity to which its proposed reforms should apply.
I therefore start from the premise that the burden of proof rather lies on those who want to create first-class and second-class citizens rather than against them. The Law Reform Committee considered various dates, but it considered also the possible objections to the concept of breach of duty, which is the concept down on which the committee eventually came. It is,

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as a matter of fact, already well established in English law, both in contract and in tort. It lies at the heart of the tort of negligence, which is what we are discussing.
It was recognised by the Law Reform Committee that in the majority of cases the date of the breach of duty is likely to be reasonably certain, and in all cases it will be capable of being made reasonably certain. The existence of now well-established duty situations and accepted standards of care in regulated activities, including the construction sector, suggest that only in hard cases are problems likely to occur. Indeed, at an earlier stage that point was effectively conceded, I am told, by the Royal Institute of British Architects when the Minister for Housing and Construction met representatives of the construction industry on 16th July 1985.
Such problems as there may be in establishing when breach of duty took place are much more likely to arise in cases of omissions. In such cases, the test of breach is when the duty is no longer capable of performance. Those who are interested will find that in the Midland Bank Trust v. Hett, Stubbs and Kemp, to be found in [1979] Chancery Reports at page 384.
On consultation on the Law Reform Committee's report, there were of course a large number of persons who took various views about it. However, among those persons were not only the Official Referees—to whom the noble Lord, Lord Mishcon, most convincingly made reference a few moments ago—but also (and of this I ask the House to take note) the Consumers Association on the same side. If this series of amendments is passed, then the effect might not be altogether favourable to British architects. It could be that my undertaking to my colleagues that this would be Second Reading Committee stuff in another place and would be uncontroversial might lead to the foundering of the whole Bill, and they might lose their long-stop altogether. Therefore, I think they must be a little careful before drumming up a great deal of support for this kind of amendment.
There are, of course, other matters. I think that one noble Lord—it might have been my noble friend Lord Broxbourne—referred to the EC legislation. That is a quite different cup of tea. That is about liability for defective products. It contains a provision for absolute liability, while this Bill is concerned with negligence, and it extinguishes the plaintiff's right after 10 years and has no direct reference to the law of limitation.
Reference was also made by two noble Lords to the Defective Premises Act. My noble and learned friend Lord Denning was one and I think the noble Lord, Lord Hacking, was the other noble Lord who referred to it. With great respect, this analogy is misconceived. I should like to say a few words on this Act because it is important that one should bear it in mind.
Section 1(5) of the Defective Premises Act provides that any cause of action in respect of a breach of duty imposed by Section 1, a duty to build dwellings properly, should be deemed to have been accrued when the dwelling was completed. It is a much simpler formula than that proposed in the amendment. In other words, it merely provides for the postponement of the cause of action for breach of statutory duty under that Act. It does not provide for taking away from someone who has been wronged a right which he
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already possesses. It emphatically does not provide any precedent whatever for the commencement of the period covered by the long-stop.
Although I think the point I have made is the one I put in the forefront of my argument, I should like to add that the 1972 Act was based on a Law Commission report called Civil Liability of Vendors and Lessors for Defective Premises. The Act was designed to impose on builders of residential property, subject to certain specific exceptions, duties in tort analagous to those in contract. Unfortunately, the Act suffers from serious shortcomings which are gradually coming to light. For a combination of reasons it has never been properly tested in the courts to this day.
As regards the limitation provision to which I have referred in Section 1(5), that essentially contractual provision has now been effectively outmoded by the common law duty of care following the decision of the Court of Appeal in Dutton v. Bognor Regis; secondly, by Section 71 of the Health and Safety At Work Act 1974; and, thirdly, as a result of the decision which has been repeatedly referred to in earlier stages of this debate of Anns v. Merton. Frankly, I should say that this renders the analogy not one upon which it is wise for noble Lords to rely in reaching their conclusion.
I am bound to say that I agree with the conclusion of the Scarman Report at paragraph 4.12. It states:
"A number of those who wrote to us—especially those involved in the construction industry—suggested that the date of completion would be even easier to ascertain than the date of breach of duty. Section 1(5) of the Defective Premises Act 1972, for instance, provides that for the purposes of proceedings under the Act a cause of action shall be deemed to have accrued at the time the dwelling was completed. We are doubtful though whether this is really a satisfactory alternative and in particular we can see formidable difficulties in adapting the concept of completion to all the types of circumstances (other than personal injury) where latent damage might arise. There is also the possibility of injustice to defendants where completion, on a very large project for instance, takes place many years after the relevant breach of duty".
I agree with that. But if the members of the Scarman Committee had been faced with this amendment which has two alternative sets of law—one for the construction industry and one for everybody else—with different termini a quo and with the further complication of the last words of paragraph (b) I have little doubt that they would have rejected the suggestion. That is the conclusion to which I come, and that is the conclusion to which I invite the House to come, too.
Lord Hacking: My Lords, I am grateful to every noble Lord who has participated in this debate. The House has been considering this amendment for just over an hour and I think we have now reached the point in our discussions where it would not be fruitful to go on any further. It would not be fruitful because I doubt whether we will be able to persuade the noble and learned Lord to change his mind and it would not be fruitful because, in any event, we have had a most full discussion. I again therefore thank all noble Lords who have participated.
I shall, therefore, be seeking leave to withdraw the amendment but before I do so I will make two short observations. Once again the noble and learned Lord made a very powerful speech on behalf of the inarticulate plaintiff which, of course, includes big property

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companies as well as persons of more humble origins and less erudition. The noble and learned Lord also said that my amendment would create first- and second-class citizens. It was not my intention to do that, and nor do I believe that I did so in moving the amendment. I am glad to see the noble Lord, Lord Howie, nod his head in agreement. Nor, indeed, in my extensive discussions with the building and construction industries were they in any way trying to seek special advantage for themselves as defendants or for their industries. They were seeking a law which would have easier and clearer application and which would benefit both plaintiffs and the defendants.
I make one final observation before seeking leave to withdraw the amendment. The noble and learned Lord referred to depriving plaintiffs of their rights. However, some questions must be asked, must there not? What right does the plaintiff have when there is such staleness of an action that the defendant no longer exists or cannot be found? What rights does the plaintiff have when the defendant no longer has the money to pay the compensation ordered by the courts in favour of the plaintiff because the defendant is no longer in the same financial condition or is no longer insured? Those are the realities of life and it is with those realities of life that I moved the amendment.
Although I have had good support from your Lordships' House, including support from the noble and learned Lord, Lord Denning, the noble Lords, Lord Broxbourne and Lord Lloyd of Kilgerran, and others, it is clear that we have not persuaded the noble and learned Lord the Lord Chancellor. For that practical reason alone it is time for me to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Chancellor: My Lords, before we have the Statement, does the noble Lord, Lord Hacking, intend to move Amendments Nos. 5 and 6? They have already been spoken to.
Lord Hacking: My Lords, I have already spoken to those amendments which were, of course, linked with Amendment No. 4. I do not intend to move them.
[Amendments Nos. 5 and 6 not moved.]

Agriculture Price Fixing Settlement
5 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, with the leave of the House, I shall now repeat a Statement on the outcome of the meeting of the Council of Agriculture Ministers which is being made in another place by my right honourable friend the Minister of State, Mr. Gummer. The Statement is as follows:
"With permission, Mr. Speaker I will make a Statement about the meeting of the Council of Agriculture Ministers which took place in Luxembourg on 21st to 25th April 1986. I attended this meeting with my right honourable friend the
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Minister, who is unfortunately ill and not able to be present in the House.
"After negotiations which lasted throughout the week, the Council reached decisions on farm support prices and related measures for 1986–1987.
"The basis of the agreement is a freeze in common support prices, with substantial price reductions for certain Mediterranean products, in particular tomatoes and tobacco. Following recent currency developments, some changes in green rates were indicated. It was, however, important that these were not of such a size that they undermined the policy of price restraint. For this reason the United Kingdom supported devaluations of the green pound, the green franc and the green punt, which will increase support prices in national currencies by 2.75 per cent. in the livestock sector and by 1.35 per cent. in the arable sector.
"Turning to specific commodities, the United Kingdom has been particularly concerned about the growing surplus of cereals, and we made it clear at the beginning of these negotiations that we intended to press for effective changes to the existing regime on a fair basis. I am pleased to say that the changes we have agreed in the intervention arrangements and in quality standards, together with the introduction of a 3 per cent. co-responsibility levy, will have the effect of substantially reducing the effective level of support. The co-responsibility levy has been agreed for five years, with provision for a report by the Commission after two years on how the system is operating. As the House knows, we would have preferred a straight cut in the price for cereals. However, the co-responsibility mechanism as agreed is a substantial improvement on and simplification of the Commission's original unsatisfactory proposals. The levy will apply to cereals sold into intervention and act as a direct price cut, with a real effect on the market. The levy will be collected at the processing stage, but cereals processed on the farm will be excluded. We would expect to pay a proportion of the total levy which is close to our share of Community cereals production.
"An aid for small cereals producers will be introduced. The detailed arrangements for this remain to be decided.
"The Commission's original proposals included an unsatisfactory price structure for barley and a big increase in the average threshold price for maize. We secured changes in the Commission's proposals to remove the barley price distortion and to provide for a lower increase in the average maize threshold price.
"The support levels for rapeseed and sunflower seed will also be reduced if the crops in the Community exceed a prescribed maximum guaranteed quantity.
"The reduction in cereal prices will be of particular benefit to pig and poultry producers. The final form of the MCA reductions in this sector has yet to be decided, and the Commission will be submitting proposals on this in the near future. In the meantime, increases in negative MCAs for pigs, eggs, and poultry resulting from the recent realignment will be suspended until 1st June 1986.

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"For milk, I am glad to say that we resisted considerable pressure for a price increase. In addition, the Commission's proposal to change the fat:skiin ratio was dropped. This will avoid adding to the costs of those food manufacturers who use skimmed milk.
"Despite the very real steps taken by the European Community to reduce the milk surplus, culminating in the introduction of quotas, the Community is still a substantial over-producer of milk. The United Kingdom was determined to secure a further reduction and so to cut this surplus. We were, however, insistent that the burden should fall equally on all member states. I am glad to say that, in the face of strong opposition from a number of countries, a further 3 per cent. cut in milk quotas was agreed. This will be effected over the next three years, initially through a Community buy-out scheme, but if this voluntary system is not effective in all member states, it will be underpinned by compulsory reductions. The maximum compensation chargeable to the Community budget for this scheme will be about 18p. per litre over seven years. But each member state will be able to set the rate of payment according to its own circumstances. There is also provision for national schemes to continue alongside the Community scheme. We secured a provision which allows larger dairy farmers to sell part of their quotas under this scheme.
"Additionally, the arrangements to off-set under-production of quota in one region against overproduction in another will continue for a third year. This has given useful flexibility in the United Kingdom in each of the first two years of quotas.
"For beef, we succeeded once again in securing an extension of the beef variable premium scheme unchanged. The maximum rate expressed in sterling will be increased as a result of the green rate devaluation. The Commission's proposals for reforming the regime for beef are to be further studied by the Council with a view to the decisions being taken by the end of this year.
"For sheep, we insisted on the removal of the proposed limit to the number of ewes per farm qualifying for the annual premium. We also secured the removal of the proposal to amalgamate Northern Ireland and the Irish Republic into a single region for the purpose of calculating ewe premium.
"Turning to the budgetary costs, the Commission indicated that the package as a whole will produce a total saving over 1986 and 1987 of 777 million ecu, a saving of 118 million ecu greater than would have been achieved under the Commission's original proposal. There remains, however, a serious problem about the substantial additional costs resulting from changes in the relationship between the ecu and the dollar and from the realignment of currencies. In supporting the settlement we made it clear that its budgetary implications would have to be referred, to the ECOFIN Council. They are being considered today by this council, which my right honourable friend the Chancellor of the Exchequer is attending. We will continue to seek a thorough examination of the scope for savings to minimise any supplementary budget this year.
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"Overall, this price fixing has produced a highly satisfactory outcome and one that follows closely the approach endorsed by the House, without opposition, on 10th March. The pressure on support prices in the Community has been maintained. In particular, the effective reduction agreed for cereals marks an important step in the battle against surplus production. The outgoers scheme for milk is the next stage in bringing about a better balance between production and consumption.
"By devaluing the green pound, we have ensured that our farmers are treated fairly in relation to producers elsewhere in the Community, including particularly France and Ireland. We have removed from the original package those key elements of discrimination to which this House rightly took such exception—the 25-tonne exemption for cereals and the limits on headage payments for beef-cattle and sheep. Moreover, this settlement will have a negligible effect on food prices, which are, in any case, continuing to rise less than the rate of inflation. The package, therefore, represents a further significant step towards improving the common agricultural policy while safeguarding the competitive position of our own farmers. It is therefore good for Britain and good for Europe."
My Lords, that concludes the Statement.
Lord John-Mackie: My Lords, we are very grateful to the noble Lord for repeating the Statement. I am sorry to hear that the Minister is not too well and we hope that he will have a good recovery. He has had a very busy time indeed this last week because I think there have been six solid days of negotiation.
First and foremost, as regards the Statement itself I should just like to mention the euphoria—it is almost euphoria—in the last paragraph. It is perhaps a little too enthusiastic. However, we cannot begrudge the Government a little enthusiasm sometimes.
As regards paragraph 2, I wonder whether the Government have given any more thought to the question of the green pound and the continual adjustments that have to be made. I note that the Chancellor of the Exchequer and the Minister are both keen on joining the EMS, which would solve many of the problems in that respect.
I note that no details of the intervention arrangements have been decided. That is an arrangement which is very important to farmers and rumour has it that there will be no intervention buying from harvest until December. I wonder whether the Minister can enlighten us a little about this.
It is not quite clear exactly how the co-responsibility levy of 3 per cent will work. The Statement says in particular that,
"The levy will apply to cereals sold into intervention"
I presume that this means all cereals sold and not only those sold into intervention. The Statement goes on:
"The levy will be collected at the processing stage, but cereals processed on the farm will be excluded".
Does that mean that they will be excluded if they are processed and sold? I think this is rather important, because if one can process cereals—for example, crush them—and then sell them for horsefeed and so on, there is a very big loophole. I think that is a loophole

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that needs to be explained. It is very good that the Minister has managed to get a fair spread of this levy. The first proposal of 25 tonnes was obviously going to be unfair.
The support levels for rapeseed and sunflower seed, if one reads the sentence carefully, amount to a quota, do they not? Although the word "quota" is avoided, there is no doubt that quite a few people are beginning to think along quota lines. I have no doubt that the poultry and pig production people will be pleased with some of the figures if the price of foodstuffs comes down.
On the important issue of the 3 per cent. cut in milk quotas under the outgoers scheme, I made my opinion known last Monday in the debate and I shall say no more today except to note that, again, it is stated that if this is not a success, it will be underpinned by compulsory reductions. Once more, this is going back to quotas; and it is happening repeatedly. We note that when originally mooted it was going to be nearly 27p a litre. It is now reduced, according to my original copy, to 17p, although the Minister said, I think, 18p. There are a fair number of corrections. I do not believe that this will be anything like the attraction that the EC considered it earlier for people to take the outgoers scheme, especially when it is now obvious that the landlord—this is where the tenants are concerned—will get a fairly large share of it.
The flexibility in the United Kingdom in the first two years of the quota is good. I must congratulate the Minister on the beef premium scheme and the ewes qualifying for annual premium. I note the misprint showing ewes spelt "yews". I wonder whether this relates to thoughts about woodlands that might be planted. I do not know. But that is a Freudian slip.
The overall fixing has produced a highly satisfactory outcome, says the Statement. It goes on to say that this is an important step in a battle against surplus production. I wonder very much whether that is the case. There is nothing significant so far as one can see in what the EC has done compared with its original, not very significant proposals. Its slackening of them now will not do much good at all. I would welcome the Minister's remarks on the questions I have asked.
Lord Mackie of Benshie: My Lords, following, as usual, my noble kinsman, I find he has said much of what I was going to say, including pinching my crack about yew trees that I would have put rather better. I should like to thank the Minister for repeating the Statement. I must say, however, that it is all too late. The Minister has done well in regard to a freeze in common support prices. But we are are up against a curious and difficult situation. If there had been a freeze five years ago, with the farmers of the Continent clearly told what we were going to do and what prices were going to be, we would not be in the mess that we are today. However, it is still better late than never.
It is not, of course, a freeze. We are adjusting the green currency so that there will be a rise in prices in France and Germany, and I see, also here. The paper does not tell all—except to people like myself who know about these things. The intervention arrangements will hit the farmers who can least afford it
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extremely hard. I should like the Minister to say, broadly, what the intention is. I understand from newspaper reports that there will be no intervention until well after harvest. I should have thought that this would mean a drop in the price that the farmer selling off the combine will have to take, when he cannot afford to keep it until November and December, of anything up to £20 a tonne below the stated price.
5.15 p.m.
This sort of device is wrong. We should be fixing a bottom price so that people would know what they were to get. This should be sufficiently low to deter excess production, particularly from the bad lands—the land that should not be growing. It should be coupled with the proposal, which again comes far too late, to assist small producers. The Statement says that detailed arrangements remain to be decided. They will have to be decided fairly quickly before harvest if they are to be any help to the people who will be hit extremely hard by the lack, so far as I can see, of any intervention during the back end of this year. The Minister should, I feel, comment upon that.
I should also like the noble Lord to say whether he thinks that this will result in a drop in cereal production. Will the good lands produce so much more that, despite the fact that people drop out from the bad lands, there will be a further surplus this year? If he can say whether this is likely, it might be useful. I feel that there will still be a surplus.
Taken as a whole, the move is in the right direction. At least some of our Continental partners are beginning to see sense. The Minister should, however, say whether he considers that spending will be kept within the budget. I know that he has passed this matter on to the finance Ministers. But it does not look to me as though it can, particularly with the pending trade war with the United States over the export of cereals.
In short, the Statement goes some way towards correcting many of the acts of foolishness that have been perpetrated owing to the lack of courage shown by the agriculture Ministers, not so much by the Commission. I fear, however, that things are still on course for the production of more surplus food which may well bust the whole system.
Lord Belstead: My Lords, I am grateful to both noble Lords for their reception of my right honourable friend's Statement. The noble Lord, Lord John-Mackie, has kindly said a few words about my right honourable friend, who is not well, which I know he will appreciate. The noble Lord, Lord John-Mackie, put the question as to whether we should now join the EMS. All that I would say on the agro-monetary aspect is that the Community states, I believe, would feel that justice was done.
As the noble Lord will know, there was no scope under the present system for either Germany or, indeed, the Netherlands to have a devaluation of their green currencies. It was, however, open to other countries. When one looks across the board and sees what has been done in other countries, it was right that we should have some devaluation of the green pound and in particularly that the Community should have differentiated between the livestock sector where the

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devaluation is greater and the crops sector. I simply add that devaluation of the green pound is going to be worth about £160 million so far as British producers are concerned. Against that £160 million, however, must be put all the other reductions in prices in the package, so that in the end we have what is in effect a freeze in returns.
The noble Lord, Lord John-Mackie, asked me to say something about intervention, as did the noble Lord, Lord Mackie of Benshie. It has been agreed by the Ministers in the Agriculture Council that there will be no intervention for the months of July and August. Intervention will be available from 1st October, with harmonised periods for payment. It will be available also from 1st September but with longer payment delays which still have to be fixed.
The noble Lord asked me to say a word or two about the co-responsibility levy. We shall have to see the detailed rules which will be proposed by the Commission in due course. However, if I may answer a specific point which the noble Lord, Lord John-Mackie, put to me, the intention is to exclude cereals processed on the farm for use on that farm. It is not intended, as I understand it, to exclude cereals processed for sale, for instance, by farm co-operatives.
The noble Lord was good enough to say that he very much welcomed the removal of the 25-tonne exclusion clause which would indeed have ended up with the United Kingdom paying in co-responsibility some three-quarters of the amount which would be required from the whole of the Community. We now have a fair deal with regard to the the co-responsibility levy. We shall find ourselves paying in levy very much the same sort of percentage as our percentage of production of cereals in the Community.
The noble Lord said that the Statement with regard to rape and sunflower seeds is nothing more nor less than a quota in another name. With respect to the noble Lord, I do not think that I would agree with him. It is a more effective guarantee threshold system which is based on a United Kingdom suggestion and which will ensure that aid levels are reduced proportionately when production exceeds the prescribed threshold. Noble Lords may ask why we have to bring this forward. Did we not already have it? Yes, we did, but the Germans succeeded in removing it at the last price fixing. With regard to rape and sunflower seeds we have succeeded in putting it back in. If I may say so, it is a sensible move.
The noble Lord again on milk, said that he felt this was a move towards quotas. With respect to the noble Lord, whom I normally follow in what he says because of his great experience, what has been put forward is much more refined than that. We shall all want to look to see what the small print says on the Community outgoers scheme.
There are two points that I would make. First, there will be some opportunity for a certain amount of restructuring under the scheme. I shall not go further than that. I think that we shall want to see what the opportunities may be. Secondly, when the noble Lord asked whether the 18p will be enough. I think that with the new provision for part quotas we shall have a good response. I do not think we shall have to resort to compulsory cuts, but this will depend upon producers.
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The noble Lord, Lord Mackie of Benshie, said that this comes too late. There was a great deal, understandably, in this Statement about another place, a very important debate in another place, and other matters. In your Lordships' House we have had three enormously important reports which were produced by the European sub-committees of your Lordships' House and which were debated about a week ago. I remember that one of the main matters which came out of the report on cereals and on the price fixing was the need for consistency. I therefore simply say to the noble Lord that his criticism has weight. As usual, he hits the nail on the head. But I very much hope that this price fixing will be the start of a more consistent policy.
The noble Lord said that he felt that intervention would hit hard the farmers who could least afford it. I hope that I have given the noble Lord the details of what the intervention arrangements are and he may now take a slightly more beneficent view.
The noble Lord asked two further questions. The first was whether cereal production would drop; and, finally, what was the effect from a financial point of view. With regard to production dropping, I must put on record that my right honourable friend the Minister, when he addressed the National Farmers' Union annual general meeting, for the first time put forward the thesis so far as the British Government are concerned that we needed to look for a package in which he believed there might be not only price restraint but also a voluntary set-aside scheme. We are all now anxiously awaiting proposals from the European Commission on structures, which, so we understand, will include some proposals for set-aside. But we must wait and see.
With regard to the financial effects, the noble Lord is absolutely right. There is a great problem regarding the level of the dollar and the movement of European currencies.
I finally make the point that the commissioner confirmed during the Council that the Commission recognises that both the 1986 and 1987 budgets must stay within the 1.4 per cent. ceiling for VAT.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether the Community is still supplying certain foodstuffs at very low prices to Libya, and, if so, whether it has been decided to stop that?
Lord Belstead: My Lords, the Community, so I am advised, has taken on board in the Council of Agriculture Ministers the prevalent feeling about this point. If I may confine myself for a moment to milk products, the terms of any trade with Libya would depend upon offers made by traders. However, I am absolutely certain that the Commission will take account of the current trade relations with Libya, arid the Commission has said that the Community will not be offering any further special deals for Libya.
Lord Cledwyn of Penrhos: My Lords, I congratulate the noble Lord on the cheerful and optimistic way in which he read out the Statement. He has the right kind of temperament to be one of the Ministers of Agriculture.

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I do not want to upset the noble Lord unduly, but may I put one short question to him about the budgetary implications of this agreement? It seems that the new package will add £1 billion to the farm budget. Does he agree that this will inevitably precipitate a fresh controversy on how to prevent the Community going bankrupt in the autumn? Where is the money to come from? As a result of this extra spending the countries of the EC will be forced either to raise the share of VAT—which is now 1.4 per cent., and that goes to Brussels—or to cut spending in other directions, for example, on the regional and social fund.
I am therefore putting three possibilities to the noble Lord: VAT; a supplementary budget of some other kind; or a cut in this fund. If there is a cut, does he not agree with me that there will be considerable protests especially from the two new members of the Community? Will the noble Lord therefore agree with me that we should be very cautious in the way in which we present this agreement?
Lord Belstead: My Lords, I in no way disagree with the noble Lord, Lord Cledwyn, in his last words. He has every right to counsel caution and to warn me that there should be a becoming gravity in these matters. However, I ought to say to the noble Lord that the original proposals which were put forward by the Commission were estimated to produce savings, after taking account of revenue from the cereals co-responsibility levy of 659 million ecu, which is about £410 million. As a result of this Council the savings will be some 777 million ecu, which is the equivalent of about £485 million. Therefore as a result of the deliberations which ended on Friday the savings have been very much increased over and above what the Commission had intended.
In saying that, I take the point made by the noble Lord. It is an extension of what the noble Lord, Lord Mackie of Benshie, asked: "Are not the cards nonetheless stacked up against us?" There is the problem of the level of the dollar, and of the movement in the European currencies despite the fact that they are within the EMS. The noble Lord, Lord John-Mackie, was recommending that the moment may have come for Britain to join that. Perhaps I ought just to say that the commissioner indicated that the agreement reached is consistent with the budget discipline agreement. The Commission takes the view that the forecast overrun of expenditure is the result of extraneous factors related to changes in the ecu/dollar relationship and the realignment of currencies. The budget discipline text provides for such exceptional circumstances to be taken into account, but because this is a very grave matter it is being discussed today in ECOFIN.
I would only add what I said also to the noble Lord, Lord Mackie of Benshie: Namely, that the commissioner also gave an undertaking that he realised that the 1986 and the 1987 budgets had to stay within the 1.4 per cent. VAT ceiling.
Lord Walston: My Lords, I should like to ask the Minister two questions. I am confused about the saving of 700 million ecus. Is it a saving over last year's
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expenditure? Can we now look forward to the agricultural budget being 700 million ecus less than it was last year; or is it a saving over some earlier estimate which was a good deal higher? Can he tell us how much he expects the agricultural budget to be this year in comparison with last year?
Can he also tell us how much he expects the surplus of, for example, wheat, to diminish, if at all, this year as compared with last year? Given the fact that the Minister described it as a highly satisfactory outcome, are we entitled to think that there will be some savings of that nature and some diminution in surpluses?
Finally, on a purely technical point, I should like to know whether the 3 per cent. co-responsibility levy is to be paid only on grain cereals which are sold into intervention; or is it to be paid on all cereals? If the latter, is it 3 per cent. on quantity or 3 per cent. on price? How do you assess such crops as malting barley? Will they have to pay a higher co-responsibility levy than those which are simply sold for grinding?
Lord Belstead: My Lords, the savings to which I have been referring are savings over projected expenditure. Once again, I in no way try to hide the fact that this means that the cost of the Community, from the point of view of agriculture, will continue to rise and that that means that we shall need a consistent policy in order to bring it down.
Secondly, the noble Lord asks whether or not the surplus of wheat will diminish. As the noble Lord knows better than I, all the wheat is in the ground and that will be harvested anyway. However, it will mean about a 6 per cent. cut in returns to producers. I therefore repeat that if producers begin to know that this is the beginning of a consistent policy, they will start to take heed. Incidentally, it is interesting that the only commodities which have received an uplift so far as these negotiations are concerned are, I think, peas and beans for protein.
Finally, the noble Lord asked exactly what the 3 per cent. co-responsibility levy means. It will mean £3·39 a tonne, payable on sales for processing for human or industrial use into intervention or for export. That will be the effect of the levy.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord ask his right honourable friend to find a better name than ECOFIN? It sounds like a ballistic missile!
Lord Belstead: My Lords, it is one of the many matters which I think we shall have to ask the Treasury to deal with, because it is not so much an agricultural as a financial council.
Lord John-Mackie: My Lords, I should like to raise a point for clarification. The Minister referred to 3 per cent. all over and then he said £3 per tonne. It does not seem to add up. Is it £3 per tonne or 3 per cent.?
Lord Belstead: My Lords, I am advised that it is 3 per cent. of the intervention price, and as things stand at the moment it will work out in cash terms at £3·39 per tonne.

Highways (Amendment) Bill
5.35 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Highways (Amendment) Bill, have consented to place their prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Lord Dean of Beswick: My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Dean of Beswick.)
Lord Henderson of Brompton: My Lords, I should like to detain the House for only one or two minutes. I pray in aid the fact that so far the Bill's passage through both Houses of Parliament has taken only 21 minutes. Therefore I hope that one or two minutes extra may not be begrudged me.
First, I should like to join the noble Lord, Lord Dean of Beswick, in the tribute which he paid on Second Reading to Mr. Michael Cocks who is the Bill's sponsor in another place. Mr. Cocks, obviously drawing on his expertise as a Chief Whip, used his legerdemain and "magicked" the Bill through the House of Commons without a word being spoken. I wish that he would impart that secret to some of us who could well use it in other spheres!
My purpose in rising today is partly to recall the fact that this matter was first raised in this House during our debates on the Straw and Stubble Burning Bills which the noble Lord, Lord Alport, introduced in the House in two previous Sessions, but the noble Lord did not finally pursue the matter. However, the question of the danger caused to those travelling on highways by smoke from the burning of straw and stubble was raised in this House and serious attention was paid to it by the noble Lord the Deputy Leader of the House, Lord Belstead, when he was speaking as the responsible Minister answering the debate on straw and stubble burning.
I should like to quote from a letter which the noble Lord, Lord Belstead, wrote to me after the noble Lord, Lord Alport, withdrew his Bill last Session. I pursued the matter with the noble Lord, Lord Belstead, and he acknowledged my letter about the dangers of smoke from straw and stubble burning obscuring visibility on roads. He said:
"As you know, this is a problem which Michael Jopling and I take very seriously. It is not an entirely straightforward matter to tackle through legislation but we are discussing the scope for amending the Highways Act 1980 with Lynda Chalker, and I am hopeful that we may be able to find a practical solution which satisfies all our concerns".
That letter was written on 29th March last year. It is a matter of some congratulation to the Government that they have managed to reach the happy stage when the Bill is about to pass through the second House just over a year after that letter was written. I thought it only right to thank the noble Lord and I am very glad that he is in the House to hear me do so.
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The substantive matter which I wish to raise and of which I have given notice to the noble Viscount, is that I believe it is right that some publicity should be given between now and the next straw and stubble burning season, so that those concerned and the general public know the effect of this small but important piece of legislation.
If we look at the short title of the Bill it merely refers to the Highways (Amendment) Bill. However, if we look at the Long Title it says that it is:
"to amend the Highways Act 1980 so as to impose penalties in cases where a user of a highway is injured, interrupted or endangered in consequence of the lighting of a fire on the highway or elsewhere".
This is a very important matter. It has led to fear and injury, and even death.
Therefore, I make no apology for asking the Minister kindly to tell the House what he has in mind in order to spread the knowledge that this legislation has been passed by Parliament. Farmers are no doubt aware of their responsibilities under the code which has been issued by the National Farmers' Union and no doubt by the by-laws issued by local authorities. But they now ought to know the important consequences for them not just of lighting straw or stubble but of any fire—that it could have the consequences embodied in the Long Title of this Bill. Equally the local authorities and the police should be made aware, and not least the general public, so that they will feel more secure when they travel on the roads during the straw and stubble burning season.
Lord Underhill: My Lords, I too shall not detain the House for long. There is one point to add to the useful comments of the noble Lord, Lord Henderson. As I said at Second Reading, this is a useful Bill which clarifies and deals with an omission in the present law, and I want to do nothing to impede its progress. But if one looks at the Bill one finds that the maximum penalty for lighting a fire on or over a highway, or discharging any firearm or firework within 50 feet of the centre, is on level 3, which I understand is £400.
If one looks at subsection (3), which deals with the lighting of fires on land off the highway, we find that the maximum fine there is on level 5, which I am told is £2,000. The noble Earl, Lord Caithness, at Second Reading on 18th March referred to the present law, and said (at col. 955 of Hansard):
"the maximum penalty under that part of the Act currently stands at £400, and that really is too low given the problems that can arise".
I understand that the Automobile Association wrote to the noble Earl in his position as Under-Secretary of State for Transport on 4th April raising this matter. As I believe no amendment has been passed by your Lordships, this Bill will not go back to the other place, and therefore it cannot be dealt with there. However, may I ask whether there are proposals in mind for dealing with this? It is an anomaly to have a maximum fine of £2,000 for lighting a fire off the highway and £400 on a highway. That ought to be clarified in some way or other.
Viscount Davidson: My Lords, my noble friend Lord Caithness is unable to be present today to represent the Government, and he has asked me to take his place. May I reply to the two noble Lords who have spoken in reverse order? The noble Lord. Lord

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Underhill, raised the question of the disparity between maximum fines for fires started on the road and those started off the road. My noble friend has replied to the AA, in essence, that the reason for this disparity is that fires started deliberately on the roads are very few. They are generally stringently controlled and contained; for example, as part of road maintenance works or in connection with statutory undertakers' apparatus under the road.
These fires will not have the scale or frequency of fires lit away from roads. The exceptional nature of an offence caused by a fire lit away from the road and the need for an effective deterrent against careless burning, particularly straw and stubble burning, justifies the higher maximum fine, which incidentally matches the maximum fine for offences under the Home Office's straw and stubble burning by-laws.
However, I have taken note of the concern expressed by the noble Lord about this disparity. I am not entirely convinced by the arguments now put forward, which might have been discussed fully at an earlier stage, but I shall ensure that they are reviewed when next there is a general highways amendment Bill or a consolidation Bill.
The noble Lord, Lord Henderson, asked me what publicity the Government intended to give to the new provisions of this Bill. I am grateful to him for having given me notice that he was going to do so. We shall issue a press notice at the appropriate time and we shall also be writing to the local authority associations to remind them that the Bill will shortly be coming into effect.
However, I suspect that the noble Lord principally had in mind the farming industry in the context of straw and stubble burning. This is an area to which we attach great importance, and special arrangements will apply. The Ministry of Agriculture, Fisheries and Food will once again be mounting a publicity campaign in the early summer to encourage farmers to burn safely and to use alternatives wherever possible.
Road safety and the new provisions in this Bill will be a prominent feature of this year's campaign, which will be designed to ensure that the message about the Bill reaches all cereal farmers. In addition, I understand that the National Farmers' Union intends to publish a new version of its code of practice which will take full account of the Bill's provisions and will also give them suitable publicity in its journal, which goes to over 100,000 farmers.
So far as those farmers who do not belong to the National Farmers' Union are concerned they should be aware of the Bill through the Ministry of Agriculture's publicity. Although the details of this year's campaign have not yet been settled, I can say that as part of last year's campaign every cereal grower in England and Wales was sent a leaflet reminding them of the advice in the code of practice and of the alternatives to burning. In conclusion, I thank the noble Lord, Lord Dean of Beswick for guiding this Bill through your Lordships' House, I re-emphasise the Government's support for it and I commend it to your Lordships.
On Question, Bill read a third time, and passed.

Housing (Scotland) Bill
5.47 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): 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 Gray of Contin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Extension of right to purchase and of "secure tenancy"]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 1:
Page 1, line 6, leave out subsection (1).
The noble Lord said: It is rather surprising that the most important Scottish Bill of this Session comes on at about 12 minutes to six. It belies the importance of it, but then so too does the Bill itself. The amendment I move is
"Page 1, line 6, to leave out subsection (1)".
I defy anyone, be they in Scotland, England or anywhere else, to know what this means. Clause 1(1) reads:
"In section 1(3) of the 1980 Act (dwelling-houses to which right to purchase applies), for the words 'of paragraphs (a), (b), (c) or (f)' there shall be substituted the words 'paragraph, other than (g),'."
Earlier today, I think it was the noble and learned Lord, Lord Denning, who made a plea for plain English. All we have here is hieroglyphics, and no indication at all of what this means. For my sins I was once given the task of examining Chinese codes and cyphers and making an estimate of how long it would take the Japanese to break them down. I can tell your Lordships that it was easier to break those things down than some of the subsections in this Bill.
What the wording means is that the provision extends the right of mandatory purchase to people living in housing associations in Scotland. Housing associations are relatively young in Scotland. There are one or two quite important ones very much older. I am not talking about Scottish special housing associations, but they were covered in the original Act of 1980.
The housing association movement, which is mainly financed through the Housing Corporation, took quite a time in Scotland to get off the ground, but since about 1974 of the 153 associations most are relatively young. I remember opening one in Ayr, I think it was for the Church association, and I discovered that they had about 57 separate associations throughout Scotland, either completed or started. That is an indication of the need for the kind of middle way between renting and owning that was being provided by the housing association movement in Scotland.
They were left out of the 1980 Act. We had a 1980 amending Act in the same year, and they were not included in that. We had a still further amendment within I think a planning Act, and there was no contact made there. Indeed, the Secretary of State expressed himself in 1984, barely two years ago, as satisfied with

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the way things were working and said that he had no intention of making any change. Then along came this indication in 1985 that they were going to give tenants in housing associations houses the same right to buy their houses.
The purpose of the housing association was to provide rented houses in particular and special cases. Indeed, that led to a special development within our cities whereby a very enlightened group of volunteers came together and started little community associations, taking derelict tenement blocks, redecorating them, and thus doing something to keep people in the centre of cities. But if we give the right to buy and take away control from these people it is going to mean that we might slide back into the same position which created the problem in the first instance. We really have to stop that.
It may well he that the Government are too far down on this road, quite unnecessary for Scotland, and just following the English Act—although they are not quite following the English Act because they will be even harder on future charitable associations than they are at the present time. That is covered in the English Act but not in the Scottish Act. I am trying to take this out altogether here, but I suppose that is going too far. If there were more time I would go on for a considerable length and even probably divide the House on this matter; but I gather we are considering with this amendment an amendment by the noble Lord, Lord Mackie, as well. I do not know whether that is right or not?
Lord Gray of Contin: Yes.
Lord Ross of Marnock: It is right; but we are having the discussion upon this amendment. This amendment will first be put, and then it will be up to the noble Lord, Lord Mackie, as to whether he wants to move his amendment formally and then proceed to a Division. I should like to have the justification of the Government for doing this, as it is quite unnecessary in Scotland. In fact, it is damaging to the movement, and it will completely undermine some of the smaller associations. People will lose heart and say, "Why should we put our efforts into this when the Government are making haste to destroy our efforts?"
It may well be that the noble Lord, Lord Gray, is getting advice to accept this amendment—I do not know why he laughs. He is not neutral on this one, of course. He was not very neutral on the last Bill which we discussed, the one about the Western Relief Road. He let his neutrality slip then in an unnecessary speech, and he is not neutral on this one. He is trying to support the Government. Well, it takes a bit of supporting, but I will leave him to do it. In the meantime, I beg to move the amendment in my name.
Lord Gray of Contin: The noble Lord, Lord Ross of Marnock, has lost none of the persuasive technique for which he is well known; but what he manages to disguise to some extent is that the amendment which he is proposing strikes at the very heart of this Bill. There is no question in this amendment of trying to improve the Bill in any way. This is a wrecking amendment which strikes at the very heart of the Bill.
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One of the important objectives of this Bill is to extend the right to buy to tenants of registered housing associations, and also to tenants of regional councils and related authorities; in our view, it is time for such tenants to be given the same rights as other public sector tenants. This amendment seeks to deny the right to buy to these new categories of tenants; in so doing it would destroy one of the principal purposes of the Bill.
The arguments which led us to accept that housing association tenants should be excluded from the right to buy under the original 1980 legislation no longer carry such force. Scottish housing associations have grown in maturity and in numbers in the intervening years. They now hold a sizeable stock of houses which—and we must not forget this—have been provided with public money. It is difficult to justify continuing to exclude their tenants from the rights which are enjoyed by other tenants in the public sector in Scotland, and indeed by tenants of housing associations in England and Wales.
Moreover, housing associations in Scotland have been given every opportunity to implement a sales policy on a voluntary basis. The fact is that a number of associations have set themselves against sales totally, while others, although they may be prepared to sell to their tenants, are unwilling to offer discount. Up to December 1985, only 69 housing association homes had been sold at a discount, with a further 25 without discount out of a total stock of about 30,000.
I am not impressed by the argument that housing associations are in some way different from other public sector landlords, and that they, uniquely, should be able to go on adding to their stock without any requirement to give tenants an opportunity to purchase their homes if they so wish. In particular, suggestions that sales will somehow seriously weaken the housing association movement are plainly nonsense. I appreciate that associations have a genuine concern for their role in meeting special needs. The legislation, however, will contain adequate safeguards to enable associations to retain sheltered and amenity housing for the elderly. I would remind the Committee that housing association tenants in England and Wales have had the right to buy since 1980; the evidence is clear that sales do not cause the housing association movement to go into any form of terminal decline.
Secondly, the amendments seek to deny the right to buy to tenants of regional councils and of police and fire authorities. Once again, we have been disappointed that regional councils have not been more vigorous in pursuing a voluntary sales policy. Tenants have found it particularly difficult to understand why their landlords were prepared to sell at discounts equivalent to those available under the right to buy in some cases but not in others. This is a position we find very difficult to defend. Tenants of regional councils inevitably compare their position with others in the public sector. We have concluded therefore that tenants of regional councils can no longer be denied the right to buy their homes and that they should be able to exerise that right on the same terms as other public sector tenants.
We believe that tenants of houses who have been provided with public money are entitled to buy their

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homes after a time at a fair price. This right should extend as widely as possible across the public sector. Clause 1 has this effect, by bringing tenants of regional councils and housing associations within the right to buy. I am sure that the present amendment, which seeks to deny the right, will not be welcomed by the majority of the tenants of housing associations and regional councils. I hope that the noble Lord will withdraw his amendment; I cannot commend it to the House.
6 p.m.
The Earl of Selkirk: At the outset I should like to thank my noble friend Lord Gray for the care with which he has provided us with Notes on Clauses. Also he has fully answered two or three very penetrating letters, for which I am extremely grateful. He could not have done more.
I should like to make one comment generally. It does not help housing to have a Bill so complicated that one can hardly understand it. Already housing associations have had to take counsels' advice on the meaning of some of the clauses. I know from a letter that I have received that even the Scottish Office is not fully aware of the implications of some parts of the Bill. Mere complication in itself is not a good thing. It is the complications of rented property over half a century which has brought rented property to its knees.
The noble Lord said that this is a wrecking amendment. I want to know whether the Government are trying to wreck the 1974 Act. Is this the policy of the Government? Does my noble friend remember that Act? It started with a Tory initiative. After the election it was carried through by Mr. Crosland, who was one of the best housing Ministers that the Labour Party has produced. It was then welcomed by Mrs Thatcher, who I think at that time was shadow Minister of housing. She said she would do her utmost to see that it was put on the statute book. This is one of the few Acts in the whole of this century that has been welcomed by both sides. Does my noble friend intend to wreck this?
The one criticism that has been advanced is that not enough houses were sold. There was no attempt to praise the housing associations for the number of very clever systems which they initiated particularly to help those who are weak, such as bells in the house to warn people and arrangements for visitors of one kind or another. These systems have been arranged deliberately.
I take particular joy in Glasgow. I used to look at these great tenements about which the architects said that nothing could be done and they were quite impossible; and the local authority failed. The housing associations have made them into tenantable properties which are eagerly sought to be bought. This is a tremendous step forward in the basic problem of Scottish housing. Is that what the Government want to scrap?
I have heard no criticism except that not enough houses were sold. The noble Lord knows the difficulty, and we must repeat it. If a charity is obliged to sell a house at a discount, the Inland Revenue will declare
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that such an organisation is not a charity. If the noble Lord does not accept what I say, I can read him a letter from the Inland Revenue saying precisely and exactly that. If the charity did not sell it would be hauled before the courts. That is putting charitable associations into a totally impossible position. I cannot believe that it is in the interests of Scotland. Is it really the Government's wish to destroy all the charitable associations in Scotland?
As the noble Lord has said, this is a new role. It has come under the 1974 Act. I should like to cite the 1974 Act in one sentence from Mr. Crosland. He said that it would be an intolerable choice in this country if people were limited to choosing between owner occupation and council houses. I put that to my noble friend. Does he accept that that is an intolerable situation or does he not? The whole purpose of Mr. Crosland's Act, so welcomed by the Tories, was to try to restore a rented section in the central area. Rented property is perfectly respectable and is essential for certain types of people, such as young married people and those who cannot afford to buy houses. They are the people who are least well off.
This Bill is putting the emphasis on those who are rather better off. There is a slight financial division being made which is wholly undesirable. Anybody who listened to the speech made by my noble friend Lord Seebohm on the Duke of Edinburgh's report knows that there is a problem with rented houses. The noble Lord need not worry about owner occupation. It is going ahead like a house on fire, if I may put it wrongly that way. In the last four years the building societies have invested about £5 billion in loans covering 350,000 different properties. We need not worry about this. It is a different proposition.
We want somebody to take the trouble with those who are least well off. This is the sphere into which the housing associations are going. I believe there are 7,000 houses occupied by old people in Scotland that have only an outside lavatory. That is the kind of area that should be tackled. Never mind about owner occupation; that is going well.
Age Concern in Great Britain has given me some details about old people. In this country 1 million people have no regular visitors. It is true that in housing associations there are regular visitors looking after these people. I should not worry greatly (I put this now to the noble Lord) if he said that housing associations could sell under Section 14; the HOTCHA system. If he said that the Secretary of State would give permission for that I should be happy to leave it at that. It is proper that some of the housing associations should be sold. But I object to the wholesale possibility of selling, which would mean, if it was taken advantage of, that half the houses would be sold and the whole movement would fall to the ground. I ask the Minister to think carefully about this. It is something that has gone much too far. I believe it would be contrary to the interests and certainly against the wishes of every single housing association in Scotland. I ask the Minister, please, to think about this more deeply than he has up to now.
Baroness Elliot of Harwood: I should like to support my noble friend Lord Selkirk. I have had some experience, having been chairman of a housing

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committee, and I have had experience, too, of charitable housing associations. I have also had experience of building houses for people who are handicapped in different ways. What my noble friend said is right.
We want people to be able to buy their own houses. That is something we have been urging people to do and they are doing it. We want as many houses as we can possibly have for everybody and we want every type of house, but certain types of houses should be reserved for various necessities, and should not be sold because that would put the housing associations into a difficult position.
I know that it is difficult to differentiate in this way in a Bill, but this gives us an opportunity; I agree with my noble friend that it is an opportunity that we must not let go. We must see that we have a fair deal not only for those who want to buy (I am all for them buying), but for those who want to rent and, above all, for those who need special houses because of the conditions under which they live. I hope that the Minister will consider this, before completely wiping out all these provisions in the Bill.
I also agree with the noble Lord, Lord Ross, because I tried to find out what this meant. I could not understand a single word of it. It was not until he had explained it, and the noble Lord, Lord Gray, had explained it, that I had any idea of what this meant. I think that if we are going to pass Bills, it is terrible to have the kind of wording that is used in this Bill. The noble Lord should do something about it.
Lord Taylor of Gryfe: From these Benches I should like to support the amendment by the noble Lord, Lord Ross of Marnock. I know that the Minister is a very reasonable man and I hope that he will respond to the pleas that have just been made by the noble Earl and by the noble Baroness, Lady Elliot, with her very considerable experience in handling housing problems in local government in Scotland. This is not a doctrinaire matter, this is not a matter in which parties are lining up one against one another. This is a question of developing a housing policy with very serious social implications.
A long time ago I was on the city council in Glasgow. My leader at that time was the father of the noble Lord, Lord Carmichael of Kelvingrove. We were operating in the post-war period in Glasgow when there was a great housing need. The measure of our success seemed to be the number of houses that we could build in a year. That was understandable because of the great need for housing at that time. But we neglected some values in housing administration. We created large ghettos of local authority housing; and the people who lived in local authority housing, the 30,000 or 40,000 people in the Castlemilk and the other local authority areas, had little responsibility within the community in which they lived. The housing was managed for them by the corporation somewhere up there in Glasgow. I came to believe, in the light of experience of Glasgow housing, that there must be diversity in the running of housing management, there must be opportunities for new types of organisations, and in particular there must be opportunities for community involvement in running housing estates.
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The housing associations—which are unanimous in opposing this Bill and in supporting the amendment moved by the noble Lord, Lord Ross of Marnock—are a very interesting part of the diverse pattern of housing administration. They involve local people and, what is more, they involve volunteers in local administration which is also important. I think that we are entitled to encourage them. The noble Lord the Minister said in his opening remarks today that their representations were a lot of nonsense. I do not believe that to be true.
Lord Gray of Contin: The noble Lord is misquoting me.
Lord Taylor of Gryfe: I think that those were the words that were used. I am sorry if I have misquoted the Minister. The word "nonsense" certainly was used in that connection. In any case I cannot believe that the serious people who are involved in a voluntary capacity in helping to develop the local community are guilty of talking nonsense. They are deeply concerned and any wounding of the associations, any reduction of the trust and the authority which they enjoy, will discourage people from local community involvement. For those reasons I certainly support the amendment.
May I say one other thing? I drove through Glasgow yesterday and I looked at some of the rehabilitation that has taken place in the tenement areas. It is a joy to behold. Areas that were written off as derelict now are alive. There is a sense of activity and revival in the Maryhill Road and in Govanhill and other areas where these associations are operating. I would ask the Minister to respond to the views of these people who have provided us with useful information in this regard and to respond to the plea of noble Lords who are traditionally his own supporters on the Government Benches.
6.15 p.m.
Baroness Carnegy of Lour: I think that it is important that we do not get entirely "conned" by this thinking. I have every sympathy with what my noble friends Lord Selkirk and Lady Elliot have said about the wonderful work of housing associations. Of course, they have done splendid work; of course it is the most excellent thing that voluntary people should involve themselves in housing. But there is another side to this. We are not sitting here thinking entirely about the people who have been involved in housing associations and who doubtless will continue to be involved. We are thinking about the tenants, the people who rent the houses which in the case of local authority housing have been entirely provided by public funds.
I remember—and I was not in your Lordships' House at the time—reading in the press of the debates which took place when the right to buy local authority houses was being discussed. The same argument was used then: that so many people have thought so sensitively and well about local authority housing—and they have. Many councillors have devoted a great deal of time to that. I remember my father's attitude to it when he was a county councillor. He felt then very much about local authority housing as people who run housing associations feel now.
Lord Taylor of Gryfe: I am sorry to interrupt the noble Baroness. We are not opposed to the sale of council houses and we had not been opposed to the sale of council houses when those discussions took place. We are discussing specifically the small area of the housing associations.
Baroness Carnegy of Lour: May I continue? I am sorry if I was labouring that point, but I think it rather important because times have moved on and people have begun to want to buy houses. A housing association house has been provided by public money. So far as the tenants are concerned the only point is that the landlords are different. I think that to continue to deny all tenants of housing associations the righi to buy—which is what the amendment of the noble Lord, Lord Ross of Marnock, is suggesting, as I understand it—is very unjust indeed to the tenants. To try to do this is surprising when one knows how many people want to buy.
It may well be that in some of the housing association areas there are houses that will be exempt. Fair enough. It may be that there are many people who will not want to buy. Fair enough. But to suggest that this Bill in 1986 should frustrate the rights of the tenants of housing associations to buy, which is proposed in the Bill—as opposed to the rights of tenants of council houses—seems to be out of date, condescending and absolutely wrong. The people who run housing associations should understand this. There may well be a continuing role for housing associations, but to say that no one who is a tenant of those associations should have the right to buy is totally out of date. I hope very much that the Government will resist this.
Lord Jacques: In England and Wales, and presumably in Scotland, the charitable housing association is quite different from a local authority. The local authority is part of government. It is responsible to the community as a whole and in addition it is inhibited by a waiting list. But a charitable housing association is not part of government. It is an association of individuals who wish to provide housing for rent where they see a need and very often they have, at least in part, financed the whole matter by making cheap loans and cheap share capital available to the association. Furthermore, in almost every association there is a great deal of voluntary service, for which the association never pays. This is part of the charity. Presumably the position in Scotland is the same as that in England and Wales, but I can assure the Committee that in England and Wales the whole of the finance for these houses was not provided by government. Some of the finance was provided by the shareholders of the charitable housing association and their purpose was to build houses to rent.
When they made a contract with the Government to make grants towards houses, it was not a clause in the contract that the tenant would be allowed to buy the house: that was not a clause at the time of the contract. None of us can change a contract once it is made. Once it is made, that is it: we cannot change it. And for the Government to change a contract by the use of parliamentary power is a misuse of that power. In my opinion, that is the main objection to this clause.
Lord Belhaven and Stenton: I want to support the noble Earl and the noble Baroness very strongly indeed in their remarks. I shall not repeat their points, because they have made them far better than I could.
Lord Mackie of Benshie: As we are discussing the two amendments together, I should like to say something about the situation on the first amendment when talking about the second. I must say that the Minister should be thinking seriously about the Government's attitude, because people are talking about their experience and their feelings. I do not think that anyone is really talking in political terms.
When we look at the 30,000 houses in the control of housing associations as against the total, we are not merely talking about breaching an enormous principle. The noble Lord—I think I have said this before—is really being unusually and uncharacteristically doctrinaire in this matter. He ought not to think in terms of black and white but should realise that there are shades of grey which he should note and act on, particularly bearing in mind the very large amount of support coming from all over the Chamber for the first amendment. I admit that though the principle he is upholding is wrong the amendment might perhaps be said (though I doubt it) to be a wrecking amendment. However, I do not think there is any doubt at all that the whole movement in Scotland is in danger of being very seriously disturbed. Indeed, it might well go into a decline after all the valuable work that has been done if this matter goes through without substantial amendment right throughout the Bill.
Certainly, when we come to look at the work of community housing associations in particular areas, for them suddenly to be told that they have got to sell their houses if anyone wants to buy them, at a substantial discount (and, if it happens to be a flat, at a further 10 per cent. discount) would be very disturbing. I should have thought that the noble Baroness, my noble neighbour, was quite wrong when she said that doubtless the housing associations would continue. I do not think it is beyond doubt at all. I think that many of them may be extremely perturbed, particularly the smaller associations and the community ones.
At Second Reading I cited an association which had done work in the Grass Market in Edinburgh. It has 86 houses. A tremendous improvement has been made in the Grass Market. There has been a build-up in the community spirit there and of course also an enormous build-up in the value of the houses. It is in the centre of a city where a seedy area has become, because of the work of the association, a much more desirable area. Then suddenly this body is going to be told that it must sell. No doubt there will be a queue a mile long to buy, because they could not resist the temptation to resell, even after five years.
The same is true of the rural associations. Most of them are very small, and I think that if the Minister is going to insist on principle (though I doubt whether he would carry it on the first amendment) he must look to giving the Committee some satisfaction, in view of the opinions expressed on all sides, when it comes to the detail of this Bill.
The Earl of Dundee: I should like to support the remarks of my noble friend Lord Selkirk and the amendment of the noble Lord, Lord Mackie of Benshie. I believe that in Scotland there are about 30 housing associations which have a stock of less than 50 homes and there are 53 with less than 250 houses. That is out of 153 housing associations. Would my noble friend the Minister agree that the amendment of the noble Lord, Lord Mackie, attempts to achieve a balance between extending the right to buy on the one hand and protecting the small, rural housing associations on the other? No doubt it may be objected that if associations with less than a certain stock of homes are exempted from the legislation, as this amendment seeks to effect, their tenants would be denied a right to buy and would thus be disadvantaged. If so, would my noble friend the Minister consider the expedient that such tenants be entitled to buy at discounted terms elsewhere in the public sector, as my noble friend Lord Selkirk has already suggested?
The Earl of Perth: As I understand it, we are taking Amendments Nos. 1 and 2 together. I think that Amendment No. 1 perhaps goes a little wide. When we come to Amendment No. 2, for reasons which were given not only by the noble Lord, Lord Mackie of Benshie, but also by the noble Earl, Lord Selkirk, and many others, we are getting into what seems to me to be the heart of this matter; namely, that to try to make all housing association houses available for purchase goes too far. The noble Lord, Lord Gray, said that it was a wrecking amendment. Very well; I will accept that, on condition that when we get to the more particular cases such as that of the noble Lord, Lord Mackie of Benshie, the noble Lord and the Government should accept what we are trying to do in our amendments. I have particularly in mind the question of charitable housing, which comes up at a later date.
Therefore I say to the Committee that perhaps No. 1 is going a bit far, but on No. 2 I say, no. Perhaps the noble Lord will also take to heart what so many of us have said; namely, that as it stands at this moment it is really not intelligible, and he ought to give us an undertaking that would help us all in the housing associations, that at Report stage he will introduce a clause that gets away from this rigmarole which nobody understands, and tell us quite clearly and purposefully what he intends to do.
Lord Gray of Contin: I am grateful to noble Lords on all sides who have participated in the debate on this, the first of our amendments. I shall try to deal with the individual points that have been made and to explain where there has obviously been some considerable misunderstanding. For example, the noble Lord, Lord Jacques—and we are delighted that he is intervening in a Scottish debate—obviously misunderstood the situation, because of course the tenants of housing associations in England and Wales have had the right to buy since 1980.
Lord Jacques: Not the charitable housing associations. That was thrown out by your Lordships' House.
6.30 p.m.
Lord Gray of Contin: I shall come back to the noble Lord's point in a moment. If I have misunderstood him, I shall put that right. I should like to deal first with the points raised by my noble friends Lord Selkirk and Lady Elliot. They complained about the complicated nature of the Bill. I am sorry that the Bill is not as clear as they would like it to be. That is almost inevitable when a Bill amends two existing Acts—the Tenants' Rights, Etc., (Scotland) Act 1980 and the Housing Associations Act 1985. We hope that some consolidation will be possible before too long. In the meantime, we have made available in the Library and elsewhere Notes on Clauses, and we have reprinted the 1980 Act in its most up-to-date form. I hope that that has been of some help. We have also gone out of our way, when we have been asked, to explain points specifically to Members of your Lordships' House, and I greatly appreciate what my noble friend Lord Selkirk said at the beginning of his remarks about the letters that I sent to him. I hope that they have been helpful.
The noble Lord asked about the Housing Act 1974. That Act was replaced by the Housing Associations Act 1985, a consolidating Act. The policies remain as before: to support the housing association movement in providing in their special way for Scotland's housing needs. I fully agree with the noble Lord that associations in Scotland have done remarkable rehabilitation work, and we shall continue to support them in that. It seems hardly fair, as some of your Lordships were suggesting (in particular, the noble Lord, Lord Taylor of Gryfe), that in effect discrimination be enforced against that group of tenants. Why should tenants of ordianry council houses be able to buy their houses and yet tenants of housing association houses be excluded?
Lord Jacques: We have told the noble Lord why.
Lord Gray of Contin: I do not accept why, and a great many of the housing association tenants will not accept why.
Lord Ross of Marnock: Why have the Government accepted it for six years?
Lord Gray of Contin: The noble Lord has made his case forcefully, and I shall reply in my own way. The noble Lord, Lord Ross of Marnock, makes his speeches in his way, and I shall make mine in my way. The noble Lord, Lord Taylor of Gryfe, made that suggestion, and I am sure that that is not what he basically has in mind. The effect of his remarks is that he is discriminating against those tenants, as are other noble Lords opposite. The official Opposition will do everything in their power to try to wreck the Bill. That is perfectly fair, but let us not have any doubt as to what they are seeking to do. They would dearly like to take the right away from everybody, or perhaps the noble Lord, Lord Ross, would, but his party would not. His party has come round substantially to accepting the principle of house sales. It is something that it totally condemned a few years ago, but not now. We now hear a different note. That is a change which is at least a change in the right direction. Let us hope that it moves some more in other ways in due course.

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The noble Baroness, Lady Carnegy of Lour, seized upon the point made by the noble Lord, Lord Taylor of Gryfe. The noble Lord pointed out some of the errors which were made immediately after the war at Easterhouse, Castlemilk and other similar schemes in the Glasgow area.
I want to deal first with what my noble friend Lord Selkirk said. He spoke a good deal about charities. The position is not exactly as he said it was, but I do not want to become too involved in an argument on that narrow issue at the moment because we shall come to it in later amendments and I shall deal with it then. The noble Lord spoke about houses for rent. I think my noble friend Lord Dundee, also suggested that the selling of houses would reduce the number of houses available for rent. Sales do not affect the supply of houses for rent. Studies have shown that people who have bought would in any case have been most unlikely to move and thus create vacancies. The noble Lord and the noble Baroness, Lady Elliot, raised a similar point. The housing association movement in Scotland is strong, and is still growing. Not only are new housing associations being developed in rural areas but many associations are developing new forms of provision, in particular, for those with special needs. Increasingly, rehabilitation work in the cities is succeeding in keeping owner occupiers in tenement blocks alongside their renting neighbours.
A measure of sales to sitting tenants will in no way harm those various developments. All it does is to give housing association tenants the same right as council tenants. Surely it is difficult to argue against that. The noble Lord referred to HOFTA—the Home Ownership for Tenants' Associations—and we shall be examining the need for it in Scotland a little later.
The noble Lord, Lord Jacques, also raised the point about houses being provided without public funds. It is true that a few houses were provided using funds other than Government funds, but since then those associations have been supported by public funding. If they have never had any public money, the right to buy does not apply. That is contained in Schedule 1, page 21.
The Earl of Selkirk: This is a terribly important point. Housing associations have had land provided to them at low cost. They have also had public money. The noble Lord has said, "Any public money and they must and can sell". Does he really mean that? Many of these houses have had a mixture of grants—I think the noble Lord knows this—and public money. As I understand it, under this Bill as it stands they are obliged to sell on request. The noble Lord must try to clear up that point. There are many unsatisfactory matters. I do not want to attack the noble Lord's speech, but I cannot accept one or two of the things that he has said.
The movement is not strong. It has 36,000 houses, and the noble Lord wants to sell half of them. In the past four years building societies have helped buy 350,000 houses. There is no difficulty about buying houses. There is a mass of money available; and the noble Lord is taking away this small crumb.
Lord Gray of Contin: I do not think that my noble friend is is being wholly fair. He has stated that he is in favour of the principle of tenants of council houses having the right to purchase their houses, and yet he is saying that he is prepared to deprive housing association tenants from having the same right. If they are among the less well off, they will not be seeking to buy their houses. It is those who have prospered and who have gathered together some money who would like to purchase their houses. Is my noble friend suggesting that they should be deprived of the right which is available, perhaps a few streets away, to council house tenants? That seems a strange argument to me. My noble friend asked me a specific question. I reiterate what I said when I answered his question. By public funding I mean that if they have never had any public money the right to buy does not apply. As regards land being made available to them cheaply, I cannot answer that question without notice but I shall certainly come back to my noble friend—
The Earl of Selkirk: That is the whole point.
Lord Gray of Contin: My noble friend is not being quite fair on this. I have answered his question clearly.
The Earl of Selkirk: May I ask my noble friend this question? I again take the words of Mr. Crosland. It would be intolerable if citizens of this country had only the choice of a council house or owner occupation. What is required is a substantial rented area. That is the purpose of the 1974 Act and that is the point I am emphasising.
Lord Gray of Contin: I accept what my noble friend says and there is no question of the substantial rented area being put at risk.
The Earl of Selkirk: Does the noble Lord realise that the rented sector has practically halved in the last 12 years and is going down steadily?
Lord Gray of Contin: With respect to my noble friend, the housing associations are still growing and new associations are being set up even now. I shall move on to the next point which I want to raise.
The noble Lord, Lord Mackie, said that if there is to be an RTB for housing association tenants we need a series of qualifications to it. But we have already taken care to provide essential qualifications to the right to buy, just as with council houses. For example, hostel places, sheltered houses for the elderly and, with a recent government amendment, neighbour support schemes are all exempt. To these we have added the vast majority of existing charitable associations. Finally, as for council houses, there are also arrangements in respect of houses specially adapted for the elderly or disabled. We shall have an opportunity later to discuss further exemptions in connection with appropriate amendments.
If I may return to the first point of the noble Lord, Lord Jacques, the charitable housing associations in England and Wales are predominantly special needs houses. Scottish charitable housing associations cover a much wider range of provision and a blanket exclusion would not be fair to their tenants. Special needs housing and other classes of stock are subject to specific exemptions—
Lord Jacques: That is a comment made up by the Scottish Office which just does not know what the position is in England and Wales. The position in England and Wales is that the tenant of the charitable housing association does not have a right to buy, because that was rejected by this House. A charitable housing association in Scotland is very much the same as a charitable housing association in England. They are the smaller housing associations to which people other than the Government have contributed money. I cannot accept this distinction which has now been created by the Scottish Office.
Lord Gray of Contin: I am sorry that the noble Lord cannot accept it, but he will have a full opportunity to discuss this matter a little later because there are other amendments which deal with this point. Nevertheless, even if we do not agree, I am glad that the noble Lord has seen fit to participate in Scottish business.
The noble Lord, Lord Mackie of Benshie, was also talking to his amendment which is grouped with this one and out of courtesy it is only right that I should briefly deal with that amendment as well. He explained that the purpose of the amendment is to exclude from the right to buy houses owned by a Scottish housing association with a stock of less than 250 dwellings. The noble Lord will appreciate that, by and large, we are not breaking new ground in introducing a right to buy for housing association tenants in Scotland, but we are extending to additional categories of tenant an already successful policy which has been widely welcomed.
The right to buy was not applied to housing association tenants under the 1980 Act—and I come to the question put to me by the noble Lord, Lord Ross of Marnock—but since then housing associations have grown in maturity and numbers. They now hold a sizeable stock of houses which have been provided with public money, and it is difficult to justify continuing to exclude their tenants from rights which are enjoyed by tenants in the public sector in Scotland and by tenants of housing associations elsewhere in Great Britain. It would be unjust to deny tenants the opportunity to purchase their homes simply because their associations owned a certain number of houses, and I am in no doubt that it would be regarded as unfair by the tenants concerned. I have made that point several times, but nobody has made reference to the tenants.
6.45 p.m.
The main argument advanced against applying the right to buy to smaller associations is that sales would affect their viability. I have to say that, because management allowances are paid on a unit basis, viability, provided that overheads are also in proportion to the stock, is not related to the size of the association. If, particularly where stock numbers are low, even prudent management cannot prevent a genuine revenue deficit, there are avenues through which it can seek assistance to meet that deficit. Nor do I accept that the right to buy would pose significant administrative problems for small associations. Indeed there may be some advantage in sales, albeit small, in that the net proceeds of any sale will be used first to repay any outstanding loan and housing association
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grant on the house, but where the sale proceeds exceed the amount required to satisfy this, the surplus will accrue to the association itself.
Finally, I doubt that the right to buy will impair the development of associations. The suggestion which has been made, that newly formed associations seeking to build up their stock to a reasonable level will have this objective defeated by a rush of right to buy applications, is, I feel, something of a distortion. I find it difficult to believe that a new association operating proper allocation policies would find within its initial tenants a high proportion both willing and able to buy, but that is no reason why we should deprive those who would wish to buy. Even in England where the right to buy has been available since 1980, sales average less than 2 per cent. of the total housing association stock. In addition, a newly formed association is likely to have a significant proportion of newly built or recently built renovated houses where the cost floor provisions will apply.
My noble friend Lord Selkirk said that it would be intolerable if the only choice was council houses or owner occupation. We fully recognise this for the reason that we have consistently given considerable support to the housing association movement. We have made over £600 million available to associations in the last six years. A right to buy may be taken up by a small percentage of tenants but the sales receipts will be available to the movement.
I have some information about the land question which my noble friend raised. Although land may be given cheaply, it costs public money to develop it and that leads to the right to buy. I revert to the early point which I made about public money and relate it to the land, as my noble friend did.
I have listened carefully to the arguments which have been deployed both from the other side and from the Alliance Benches, and I have particularly listened to those of my noble friends on this side who have had some doubts about this question and who may feel tempted to support either of the amendments. I must advise my noble friends that either of the amendments would seriously damage the Bill. Therefore, I hope that my noble friends will think very carefully. I hope also that I have been able to persuade them that the amendments should be rejected.
Baroness Carnegy of Lour: My Lords, before my noble friend sits down, may I ask him to clarify one point? I feel that there is some confusion as to who exactly is affected by the amendment.
As I understand it, the amendment would deny the right to buy to all tenants of housing associations—the hale and hearty ones—that have used public money. I take the point made by my noble friend Lord Selkirk, that land may have been given from private funds and that it would not necessarily all have come from public money. However, looked at from the point of view of the tenant, money that has been provided by the taxpayer has contributed to such houses, as it has contributed to council houses. It has contributed in the same way that it has contributed to housing association houses in England.
The amendment is denying the right of council tenants in Scotland the right that has been given to

63
them already in England and Wales. Am I right in thinking that? Am I right in thinking also that where rented accommodation needs to be extended, if it is not appropriate for housing associations to do that, then that must happen in other ways in future, as it does in England and Wales, through private money?
I appreciate that we shall be coming later to the question of charitable housing associations. It will then be for your Lordships to decide whether you want to do that which the Government are suggesting or that which this House approved in the case of England and Wales; which is, as I understand it, something different. But this amendment concerns all tenants. Will my noble friend the Minister say whether my understanding is correct, so that we may know exactly what it is that we are or are not supporting?
The Earl of Selkirk: My Lords, perhaps I may reply to one point that my noble friend Baroness Carnegy of Lour has made. I wonder whether the Committee realises the seriousness of what my noble friend has said. Any public money given to a house leaves the right to buy. That means that never in future will the Government help rented property—never. We are denying such help completely, and yet everybody knows that rented property is the weakness of all the housing propositions. The proposal that has been made is a very dangerous one.
Baroness Carnegy of Lour: Perhaps I—
Noble Lords: No!
Baroness Carnegy of Lour: I ask the Committee to allow me to say that every council house that is built in future would be Government-built property that would initially—
Noble Lords: No!
Baroness Carnegy of Lour: There are all the categories that are exempt in this Bill. It is completely untrue to say that never will the Government help rented property. That is very misleading.
Lord Ross of Marnock: I believe that it was the noble Baroness who began her speech by saying that the Committee was in danger of being conned. That is the second time the noble Baroness has used that phrase in Scottish debates. Does she remember the last occasion? It was when we asked for a review of the rating system in Scotland. We were defeated by five votes. The next thing that happened was that Mrs. Thatcher went to a Scottish conference and discovered that the whole of Scotland was in uproar because of the rating situation.
I do not know who she is trying to con, but she is not doing so successfully. Even the Minister floundered today. No wonder, because the noble Baroness, Lady Elliot, and the noble Earls, Lord Kintore, Lord Selkirk, Lord Dundee and Lord Perth, were all against the Minister because they realised that the situation here is different. With all due respect to my noble friend Lord Jacques, it is different from the position in England.
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The noble Lord the Minister says that we left out such a provision in 1980 and we left it out later—but now it has matured. Five years' maturity? The actual number of houses is 36,000 or 37,000. At least one-fifth of the associations have houses in groups of about 30. Some have even fewer than that. This is different. Hitherto, it is something that the Government themselves and the Secretary of State, less than two years ago, were proclaiming was worthwhile. It is not good enough. Why not leave well alone?
The man in New St. Andrew's House does not know best on this particular occasion. I am really surprised by the noble Lord, Lord Gray. Someone asked him to look at this in black and white; he was well-named for that. He could not see it in black and he could not see it in white; he could not see it at all. He floundered his way through a Scottish Office brief that was one of the worst I have ever heard. I do not blame the Minister for that, because the House is against him.
I am a reasonable man. The suggestion is that I went far too wide in what I was proposing. I am prepared to withdraw my amendment, to allow the noble Lord, Lord Mackie, formally to move this amendment, and to permit the House to make a decision that will protect Scotland against the kind of misleading Government that we have.
Amendment, by leave, withdrawn.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 2:
Page 1, line 9, at end insert—
(" ( ) In section 1(11) of that Act after paragraph (c) there shall be inserted the following paragraph—
"(d) Where the landlord of a dwelling house is a registered housing association within the meaning of the Housing Association Act 1985 and the housing association total stock is less than 250 dwellings;".")
The noble Lord said: As this subject has been exhaustively discussed and replied to, I have pleasure in formally moving Amendment No. 2.
6.56 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided Their Lordships divided: Contents, 79; Not-Contents, 81.

DIVISION NO. 1

CONTENTS

Airedale, L.

Elwyn-Jones, L.

Amherst, E.

Falkender, B.

Ardwick, L.

Fisher of Rednal, B.

Attlee, E.

Gallacher, L.

Barnett, L.

Galpern, L.

Birk, B.

Graham of Edmonton, L.

Blyton, L.

Grey, E.

Boston of Faversham, L.

Hampton, L.

Bottomley, L.

Harris of Greenwich, L.

Carmichael of Kelvingrove, L. [Teller.]

Heycock, L.

Hooson, L.

Cledwyn of Penrhos, L.

Houghton of Sowerby, L.

Craigavon, V.

Hylton-Foster, B.

Crawshaw of Aintree, L.

Jacques, L.

David, B.

Jeger, B.

Davies of Penrhys, L.

Jenkins of Putney, L.

Dean of Beswick, L.

John-Mackie, L.

Denington, B.

Kilbracken, L.

Donoughue, L.

Kilmarnock, L.

Dundee, E.

Kinnoull, E.

Elliot of Harwood, B.

Kintore, E.

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Lawrence, L.

Ross of Marnock, L.

Llewelyn-Davies of Hastoe, B

Seear, B.

Lockwood, B.

Selkirk, E.

Lovell-Davis, L.

Shackleton, L.

McGregor of Durris, L.

Stedman, B.

Mclntosh of Haringey, L.

Stewart of Fulham, L.

Mackie of Benshie, L. [Teller.]

Stoddart of Swindon, L.

Strabolgi, L.

MacLeod of Fuinary, L.

Strathcona and Mount Royal, L.

McNair, L.

Mayhew, L.

Taylor of Blackburn, L.

Mellish, L.

Taylor of Gryfe, L.

Morton of Shuna, L.

Taylor of Mansfield, L.

Mountevans, L.

Tordoff, L.

Nicol, B.

Turner of Camden, B.

Perth, E.

Wallace of Coslany, L.

Phillips, B.

Wells-Pestell, L.

Pitt of Hampstead, L.

Whaddon, L.

Ponsonby of Shulbrede, L.

White, B.

Prys-Davies, L.

Wilson of Rievaulx, L.

NOT-CONTENTS

Alexander of Tunis, E.

McAlpine of West Green, L.

Allenby of Megiddo, V.

McFadzean, L.

Ashbourne, L.

Macleod of Borve, B.

Belhaven and Stenton, L.

Mancroft, L.

Belstead, L.

Margadale, L.

Boyd-Carpenter, L.

Marley, L.

Brabazon of Tara, L.

Marshall of Leeds, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Butterworth, L.

Cameron of Lochbroom, L.

Merrivale, L.

Carnegy of Lour, B.

Mersey, V.

Cathcart, E.

Montgomery of Alamein, V.

Chelwood, L.

Mottistone, L.

Coleraine, L.

Munster, E.

Colville of Culross, V.

Newall, L.

Colwyn, L.

Orr-Ewing, L.

Craigmyle, L.

Peel, E.

Davidson, V.

Pender, L.

De La Warr, E.

Peyton of Yeovil, L.

Denham, L. [Teller.]

Polwarth, L.

Dormer, L.

Portland, D.

Elliott of Morpeth, L.

Quinton, L.

Elton, L.

Rankeillour, L.

Faithfull, B.

Reay, L.

Forbes, L.

Renwick, L.

Gibson-Watt, L.

Shannon, E.

Gisborough, L.

Skelmersdale, L.

Glanusk, L.

Strathclyde, L.

Glenarthur, L.

Swinfen, L.

Gray of Contin, L.

Swinton, E. [Teller.]

Gridley, L.

Trefgarne, L.

Grimston of Westbury, L.

Trumpington, B.

Hailsham of Saint Marylebone, L.

Vaux of Harrowden, L.

Vickers, B.

Harvington, L.

Vivian, L.

Hooper, B.

Ward of Witley, V.

Kaberry of Adel, L.

Windlesham, L.

Lane-Fox, B.

Wise, L.

Lauderdale, E.

Wynford, L.

Lindsey and Abingdon, E.

Young of Graffham, L.

Long, V.

Zouche of Haryngworth, L.

Lyell, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.4 p.m.
Viscount Davidson: In moving that the House do now resume I suggest that we do not return to the Committee stage before ten minutes to eight o'clock. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Armed Forces Bill
7.5 p.m.
The Minister of State for Defence Support (Lord Trefgarne): My Lords, I beg to move that this Bill be now read a second time.
The Armed Forces Bill is considered every five years and provides for the continuation of each of the three service discipline Acts. The Bill now before your Lordships has already been subject to detailed examination by a Select Committee of another place. At this stage I should only mention that it recommended that the present system of quinquennial Bills continue. Clause 1 provides for this system of parliamentary scrutiny to continue as before, and I commend it to your Lordships.
The other clauses of the Bill contain a number of measures to bring service law more closely into line with civil criminal law and practice, as well as some which are designed to rectify deficiencies or anomalies which have come to light since the previous Armed Forces Act. It does not contain as much in the way of significant innovation as some of its predecessors have done, but it is nevertheless a worthwhile Bill with several interesting points to which I should like to draw particular attention.
Clause 2 of the Bill makes it an offence intentionally to interfere with or impair the efficiency of service equipment, or to modify or interfere with signals being received or transmitted by such equipment, or to do anything likely to produce such results. This new provision has been made necessary by the increasing dependence of the services on computers in both the operational and administrative fields, and it is designed primarily to deal with interference short of actual physical damage; an example might be the alteration of a computer program.
The following clause deals with offences which can be committed in relation to official documents and amends the section of each service discipline Act relating to such offences. Its principal objective is to make it quite clear that the section applies not just to written records, such as books and ledgers, but also to more modern information storage methods such as computer tapes, photographs and microfilm.
I should also draw your Lordships' attention to Clause 7, which removes the three-year time limit normally affecting proceedings under service law. This time limit applies to almost all proceedings under that law, whether before a court-martial, a Standing Civilian Court, or summary proceedings. At present the only cases exempt from the time limit are those criminal cases where the relevant civilian statute otherwise provides and cases involving desertion, mutiny, failure to suppress mutiny, or those civil offences committed outside the U.K. for which the Attorney-General consents to the proceedings. This general time limit has no equivalent in the civil criminal law, although certain statutes impose their own time limits for certain specified offences. The three-year limit has created some difficulties in the past, particularly in cases such as fraud, which require long and complex investigation and preparation before they are brought to trial. This clause abolishes the three-year time limit, but where the general

67
criminal law contains a specific time limit on any particular indictable offence that time limit would of course continue to apply to service law. I believe that this is a sensible measure to bring service law more closely into line with the civilian criminal law.
We should not forget that service law applies not only to our servicemen. Some parts of the service discipline Acts also apply to certain civilians overseas; for example, when they are supporting the services or are part of a serviceman's family. When such people commit offences, their cases may be dealt with by court-martial or by summary proceedings. Additionally, in north-west Europe, those subject to army or air force law may be dealt with by a special court established to deal only with civilians, known as the Standing Civilian Court. It is our firm intention that civilians subject to service law should as far as possible be subject to the same provisions and punishments as apply in the U.K. Clauses 9, 10 and 11 of this Bill are included in furtherance of that aim.
Clause 13 of the Bill stems directly from the 1981 report of the Select Committee of another place which examined the Armed Forces Bill of that year and recommended that consideration be given to providing a legal framework for the transfer of service children at risk overseas into the hands of the United Kingdom welfare authorities. This clause does precisely that, and also allows the service place of safety order on the child to run for a maximum of 24 hours in the United Kingdom (within the overall maximum of 28 days permitted by the 1981 Act). This 24-hour period allows time for the local welfare authorities to make the necessary arrangements to meet the child. I believe that the clause provides valuable extra protection for the child at risk, and I hope that your Lordships will welcome it.
The last clause that I should like to single out is Clause 14. It emphasises the growing importance of the role of women in our armed forces, in this case the army in particular. Clause 14 removes the present statutory obstacles in the way of imposing on regular army servicewomen a regular reserve liability on completion of their active service in the same way as for men. Servicewomen fill many vital roles in the army, and in some of these important areas there are shortages in the reserve. The sensible solution is to allow women to fill them by imposing a regular reserve liability and this is made possible by Clause 14. Those mainly affected will be new entrants, but some existing servicewomen may also be invited to accept the liability, though I should stress that in the case of existing servicewomen there will be no question of compulsion in this matter.
The remaining provisions of the Bill are largely technical and I do not propose to delay your Lordships by discussing them in detail at this moment. Suffice it to say that I believe the Bill contains a number of useful new provisions, together with others which will tidy up the present service discipline Acts. It is our duty to ensure that our volunteer servicemen, in taking on a commitment to serve under the service discipline Acts, are indeed protected by a fair and clear disciplinary system. I believe that this Bill is a valuable contribution to that end and I commend it to your Lordships. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Trefgarne).
7.13 p.m.
Lord Graham of Edmonton: My Lords, I can assure the Minister that there will be no difficulties, though there will be differences between us, in ensuring a speedy passage of this Bill through your Lordships' House, because we on this side of the Chamber, and indeed noble Lords from all sides of the House, recognise that a Bill of this kind is an integral part not only of our legislation but of the proper conduct of discipline in the armed forces. Though this Bill is simply a piece of legislation to us, we believe that it is of vital interest to those who are serving in the armed forces, and, more importantly so far as concerns the Minister, to those whom he seeks to attract to serve.
I was particularly interested—and no doubt we can pursue the matter further at Committee stage—in the intention of the Government to provide those in the armed forces with the kind of rights that are enjoyed by those in civilian life. We recognise the restrictions imposed by the very nature of service in the armed forces and its responsibilities, and I was pleased to hear the Minister refer to particular chapters in relation to this. I do not intend to deal with the whole Bill and its raison d'etre in what may be called a full dress Second Reading speech.
Quite rightly the Minister drew attention to those points which he considered worthy of emphasis as being of special importance. I want simply to say that matters which we consider to be of importance (and we shall return to them at Committee stage) can be identified fairly well as those matters about which the Select Committee desired to hear evidence. Some of the evidence was unsatisfactory and some was disputed; some of the conclusions were dissented from. Colleagues in another place felt that they would like to hear more about matters concerning summary jurisdiction, court martial, the death penalty, terms of service, desertion, absence without leave, homosexuality, drug and alcohol abuse and trade union rights.
It would not be proper to deal with these matters at length at the Second Reading stage and I simply say to the Minister and his advisers that it would not be my intention to use too often the right to produce amendments and initiate debates at Committee stage but to use the question of whether the clause shall stand part of the Bill in order to invite the Minister to say a little more, so as to understand more fully whether there has been a change in thinking since the matter was debated in another place.
My honourable friend Mr. Kevin McNamara highlighted not so much what the Bill encompasses but areas for which the Bill refuses to legislate, despite the powerful arguments at all stages of the Bill in another place. I note from the proceedings in another place that Members were reminded of the dictum of Lord Justice Mansfield in 1812. It is a good dictum so far as this Bill is concerned. He said:
"A person does not, by enlisting in the armed forces, thereby cease to enjoy his rights as a citizen or to be exempt from his liabilities under the ordinary law of the land".

69
I shall touch on some of the matters that we shall return to at a later stage. First of all, there is the question of the rights of homosexuals who are serving in the armed forces. I use as my text evidence given in the report of the Select Committee on page 244. There is a memorandum from the "At Ease" Counselling Service, which states:
"Any homosexual act, or lesbian act, has been classed as illegal in the armed forces of this country for many years, as indeed it was in civilian life until the Sexual Offences Act of 1967. The military were, however, specifically excluded from that reform and as such many thousands of homosexual men and lesbian women serving in Her Majesty's Forces are, through no fault of their own, being subjected to intolerable levels of discrimination, abuse, violence, harassment, interrogation, imprisonment and dismissal."
I do not for a moment lay those pejorative charges at the door of what I call "the authority" or the military, but it is a matter upon which I wish to engage the Minister not at length but in some degree at a later stage.
There is also the question of drugs. I am not sure whether the Minister has seen the Sunday Times issue of yesterday but in it there is an article by Stephen Davis which carries the headline "Army goes into battle on drug abuse in ranks". He may recall that one of the renewal orders was before the House some two years ago. I acknowledged then that it was a difficult situation. Drug abuse in civilian life has permeated many closed institutions—I made reference to the prison service—and it is a problem that they are all trying to tackle.
The article in the Sunday Times states:
"The Army is introducing chemical drug-testing machines in a new drive against drug abuse in the services … The rising trend of drug use in British society, especially among the young, has fuelled concern among the armed forces, which need to recruit 30,000 men and women a year to meet their manpower requirements. About 87,000 of their personnel, 27 per cent. of the total, are aged 21 or under".
When I looked for some reference to the scale of the problem as seen by "the authority", I found on page 157:
"Scale of the Problem in the Armed Forces".
This is a memorandum submitted by the Ministry of Defence. It goes on:
"The precise extent of drug abuse within the Armed Forces is difficult to assess due to its illegal nature which necessarily results in clandestine activity by those involved. Those convicted in past years on drug related offences are shown at Annex A together with provisional figures for the first six months of 1985. In 1984, 353 Servicemen and women were convicted in military and civilian proceedings of drug related offences. This represents just 0.1 per cent. of total Service manpower or around 1 case per thousand personnel. Based on these figures the Services problem with drug abuse could be assessed as relatively minor".
Looking at that in isolation, I could be persuaded that the problem is relatively minor. However, yesterday's newspaper article while giving the figure of 353, also says that this was a rise from 122 in 1982. The trend is of course very important. If there has been an increase of that proportion in two years the Minister has surely a responsibility to say that it is not merely a minor problem but that he appreciates that, should the trend continue, it will represent not 0.1 per cent. but 0.2 per cent. and that will happen not within three years but two. The noble Lord will recognise that this is an issue to which we shall return later.
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Another matter of great concern upon which the Minister touched relates to the detention and treatment of young persons and children. Clause 11 proposes that the power to make custodial orders in relation to civilians should be extended to male offenders between the age of 15 and 17. By this amendment, the military legal system would be accruing to itself powers comparable to juvenile courts and children's panels in Scotland. The At Ease organisation tells me:
"Such an amendment must cause concern for the management of the court hearing for the juvenile and his family. Many adult defendants have remarked upon the intimidatory nature of court martials and the pace at which the proceedings are conducted. There is no suggestion in the Bill that male offenders between the ages of 15 and 17 years should be dealt with by a different coup and procedure than those of 17 years and above".
The organisation says a great deal more. It is neither appropriate nor relevant to make those points here. I would, however, give the Minister notice that if he is unable to say more tonight I shall be returning to this matter in Committee. I shall also be raising on the appropriate clause in Committee the impact of those parts of the Bill that endow the armed forces with what are termed emergency powers, especially as they affect the civilian population. Here again, there is a smack of a desire to leave far too much in the dark concerning matters that can affect those living near military establishments. I expect from the Minister tonight and later the stock answer that the national interest demands secrecy at times, even when disclosure may enlighten and educate those who are directly affected. I shall want therefore to return to the issue of emergency powers.
There is little more that I wish to say at this stage. Within the minimum of procedural time with which we shall be provided to carry out our responsibilities, we shall not impede the passage of the Bill. We shall, however, have some searching questions to ask at later stages.
7.24 p.m.
Lord Mayhew: My Lords, I apologise for the absence of my name from the list of speakers. I should, however, like to associate my noble friends and myself with the general purpose of the Bill, which on balance is a good one. There are a number of clauses that we welcome. These are Clauses 2 and 3, and 9 and 10. But, equally, there are some questions that we shall need to ask at the Committee stage and one or two changes that we shall try to make. We agree with the noble Lord, Lord Graham, that Clause 11 needs a lot more looking at. The noble Lord the Minister will have difficulty in this House over that clause. It is not self-evident at all that a court martial is the proper body to sentence those under 17 to a custodial penalty. It is not self-evident at all. We shall argue from these Benches in Committee that it is wholly inappropriate that a court martial should be given these powers and that different provisions should be made in these cases.
Our approach in Committee, as indeed now, is that we want to respond to genuine demand for change. Where there is no real demand for change and no particular problem to be met and overcome, we shall not press our views. There is a tendency, with great respect to the Labour Opposition, to seek for ideas to impose on the armed services which they quite

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strongly reject and that are not really calculated to solve particular problems. This is always a danger. I sympathise to some extent with what the noble Lord, Lord Graham, was saying about homosexuality in the armed forces, though I could not possibly accept the specific recommendation made by the Campaign for Homosexual Equality on page 233 of the Select Committee report. I shall not deal with that now; it can be done at Committee stage.
We are entitled to ask whether the armed forces are demanding change in this field. Is this the right moment to impose on the armed forces our ideas about what needs to be done? I accept the logical case that homosexual conduct that is prejudicial to good order and discipline should be punished as being prejudicial to good order and discipline and not as a crime. But homosexual conduct between consenting adults that is not prejudicial to good order and discipline should, as in civilian life, go free. That seems logical enough to me. There is also a commonsense view about what needs to be done on which I shall speak at greater length, I hope, at the Committee stage.
I feel rather the same about the problem of NCOs on courts martial. Is there really a demand for it? Is there really a great problem that needs to be solved? I shall listen but I have not seen enough evidence of serious miscarriages of justice or of desire on the part of NCOs or other ranks in the armed services to have NCOs on courts martial.
The noble Lord, Lord Graham, did not mention trade unions. That surprised me. I thought that the noble Lord would make a long speech about the need for highly unionised armed forces in this country. Again, I ask: what is the problem to be solved and what are the demands for change? I do not see a great deal of pressure. My guess is that the trade unions are no less unpopular in the armed forces than they are outside the armed forces. I should be very surprised if it was otherwise. Nor have I heard of any glaring injustices occurring as a result of the little unionisation in the forces. After all, there is absolutely nothing to prevent members of the armed forces joining a union, paying the subscription and paying the political levy. The noble Lord, Lord Graham, should perhaps be content with that. It can, however, be discussed if necessary at the Committee stage.
I do not intend now to make a proper speech but simply to give the general support of the Alliance parties to the Bill and to warn that we shall put down some amendments on one or two matters at Committee stage.
Lord Trefgarne: My Lords, I am greatly obliged to both noble Lords for their constructive contributions to this debate, and above all for giving me some indication of the points that they will wish to raise when we come to a later stage of the Bill. Forewarned is forearmed, and I look forward to debating their amendments with them when the time comes. In the meantime, I beg to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 7.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.31 to 7.50 p.m.]

Housing (Scotland) Bill
House again in Committee on Clause 1.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 3:
Page 1, line 9, at end insert—
("(1A) In section 3A of the 1980 Act (Secretary of State's power to authorise refusal to sell certain dwelling houses provided for elderly persons)—

(a) for subsection (1) there shall be substituted the following subsection—

"(1) This section applies to a dwelling house which—

(a) is particularly suitable for occupation by persons of pensionable age, having regard—

(i) to its location, and

(ii) to its size, design, heating system and other features so far as those have been provided by the landlord or a predecessor of the landlord, and

(b) was let to the tenant or a predecessor in title of his for occupation by a person of pensionable age or a physically disabled person (whether the tenant or predecessor or another person).";

(b) for subsection (3), for the words "specify the facilities and features of design or adaptation" there shall be substituted the words "specify those aspects of the location, size, design, heating system and other features".").

The noble Lord said: This amendment brings the right-to-buy exclusion arrangement for elderly persons' housing in line with those secured on an all-party basis in your Lordships' House during the passage of the English Housing and Building Control Act 1984. I am sure that the Minister will be familiar with these provisions and that when he saw the amendment he recalled that my noble friend Baroness Birk on 28th February moved amendments to the same effect as I am about to move this evening.
Under the right to buy elderly persons' housing is currently excluded if the Secretary of State is satisfied that it meets certain tests. The main test is that the house has facilities which are substantially different from those of an ordinary house and it has been designed or adapted for occupation by an elderly person whose special needs require accommodation of the kind provided by that particular dwellinghouse.
One of the unfortunate matters that has occurred during the operation of this provision is that the Secretary of State has placed a very severe interpretation upon it and authorities are being required to demonstrate that their dwellings meet the detailed design laid down in the Scottish Design Standards Handbook, including even, for example, types of floor covering. That makes it very difficult for older dwellings to be included which were built for elderly persons before the handbook was produced. It almost seems like sleight of hand that the Secretary of State should use such criteria, bearing in mind that when the houses were originally adapted they were perfectly suitable, and that in many cases it is merely because society has moved to a different level that new standards, quite correctly, are set up. However, it does not mean that houses meeting the old

73
standards—until they are improved—are still not perfectly suitable for elderly people, and much more suitable than the average house.
The way in which the provisions have been interpreted recently does not take account of historical circumstances. The handbook—perhaps quite correctly for new build—is very strict on room size, the number of rooms and so on. By far the majority of dwellings submitted to the Secretary of State are being refused exemption, often on very minor grounds of detail. Many of these properties would generally be accepted as elderly persons' bungalows, although for historic and other reasons they do not meet the very special detailed design standards to which I have already referred.
It is also important to realise that, under an equivalent exemption arrangement, 95 per cent. of cases were turned down by the Government in England, and, according to the Institute of Housing—it does not have an equivalent overall figure for Scotland—direct evidence from individual local authorities suggests a similar success rate in Scotland. There is a real shortage of public sector accommodation throughout Scotland for the elderly. That which is available is not easily replaced once it has been sold, especially when one looks at the pressures on the finances of housing authorities at present. Therefore we believe that an essential pool of rented accommodation should be protected; that is, special houses which were built or adapted for a particular purpose.
The amendment proposed borrows the wording from the English changes which won all-party support in your Lordships' House in 1984. It would remove the stringent design tests currently required, and should allow a greater degree of flexibility to be incorporated within the Secretary of State's decisions. The intention is to exclude the majority of purpose-built or converted accommodation for the elderly from the right to buy. If that were to happen, we would also hope that there would be a change in the criteria that would guide the Secretary of State on whether or not he gave exemption from the right to buy.
In simple terms I consider—and the Institute of Housing also considers—that certain principal points should be met before a house is considered suitable for the elderly. There should be easy access on foot to the dwelling. The accommodation, generally speaking, should be on one level, although occasionally if there were a lift involved, perhaps two levels would be acceptable. There should be no more than two bedrooms, because we do not want large houses. There should be some form of central heating. The w.c., bath and shower should be designed for easy and safe use by elderly persons and, of course, working surfaces, shelves, cupboards, electricity sockets and light switches should be set at heights suitable for elderly persons.
It is not intruding too much on the Bill to suggest that the amendment should be accepted by the Government. I cannot see it greatly reducing the number of houses for sale, but it would certainly be a great help in alleviating the pressure on local authorities and housing associations to provide houses for elderly people. It would also mean that the Scottish
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housing associations would be in the same position as the English associations, and that is something which I would hope the Minister would find difficult to resist, especially when one bears in mind that it is obviously better than the situation which we have in Scotland at present. Without the amendment we would be in a worse position than the English associations. I beg to move.
Lord Mackie of Benshie: I should like to support the amendment which is certainly in line with similar amendments to which I gave support in the 1984 Bill. Again, I should like to stress a point regarding the rural areas. One of the things that makes a rural area work is the provision of retirement houses for old people. Certainly in Angus the old county council had a very enlightened policy and said simply that if a farm worker had worked all his days for his own house and never cost the community a penny, he was entitled to a retirement house. They built a lot of retirement houses, and those houses are now available for sale. In my view it is quite wrong because there is an enormous temptation in a rural area. Normally the occupants have sons or daughters who are well-off and working in some other area. The chance to buy a cheap house for them to use as a holiday home is one which has no good social purpose but which is very nice for the family themselves. For that reason alone I think that the Minister should accept the modifications to the specifications as to what should be exempt, as set out in the amendment. Although the Minister is talking about defence or some other subject with the noble Lord, I trust and hope that he will understand that my standing here talking is in support of the amendment and will do something about it.
8 p.m.
Lord Gray of Contin: I apologise to the noble Lord for allowing my attention to wander momentarily during his intervention. I assure him that I fully appreciate the points that he was making in support of the noble Lord, Lord Carmichael.
I am bound to admit that when I studied this amendment a little earlier in the day I was puzzled as to what arguments the noble Lords would produce to support it. In my view the amendment simply offers an alternative wording for Section 3A of the Tenants' Rights, Etc. (Scotland) Act 1980, without in any way altering its effect.
I understand, however, that the noble Lords' purpose is to specify in greater detail what is meant by the words "facilities substantially different from an ordinary dwelling-house". But his concern is unfounded. In practice, I believe that both the Scottish and English provisions are closely similar in their effect. We have never had any complaint from landlords or tenants that they have difficulty in recognising which features might qualify a house under Section 3A. I believe therefore that this amendment is unnecessary.
The criteria which the Secretary of State adopts in deciding whether a house has features which qualify it as being "substantially different from an ordinary dwelling-house" are well known to landlords. There is certainly no secret about them. The Secretary of

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State's decision is taken by reference to paragraph 9.2.1. of Part 5 of the Scottish Housing Handbook. This lists a number of design features appropriate to elderly persons' housing. They include, first, that the house should be provided at ground or first floor level, or in multi-storey developments with lift access (in other words, the English reference to "location"). The remaining specifications relate to space standards, heating standards and the provision of special features such as grab rails, special doors and light switches. These equate to the reference in the English provision (and indeed in the present amendment) to "size, design, heating system and other features".
In deciding whether a house should be exempted from the right to buy, the Secretary of State would normally look for a House to have a majority of the features listed in the Scottish Housing Handbook. The house is by no means required to have all the features, however, and one advantage of the Scottish system is that each case is considered on its merits. The Committee will note that the Secretary of State does not normally look at whether the house is currently let to an elderly person or his successor (which is a requirement of the English provision and the current amendment). In practice, given the type of house, it would be very unusual for the landlord to have let it to somebody other than an elderly person, but this is not something about which we make a requirement in Scotland.
I could understand the case for this amendment if it were argued that the Secretary of State had somehow exercised his power under Section 3A of the 1980 Act in an arbitrary manner. But the Secretary of State's decisions are reached by reference to objective criteria set out in the Scottish Housing Handbook. I appreciate that the Act does not say that the Secretary of State must have regard to the Scottish Housing Handbook, but in practice that is the way that the words "facilities substantially different from an ordinary dwelling-house" are interpreted.
Although the number is not large, the Secretary of State receives a steady flow of applications from landlords under Section 3A. About two-thirds of the applications are accepted and the landlord is then given permission to refuse the sale. I think it is significant that we have never had a complaint either from a landlord or a tenant over an individual decision. Nor indeed has it ever been suggested by landlords, who I am sure would be the first to complain, that they could not understand the basis on which the Secretary of State's decisions are reached or that the criteria he adopts are unfair. In those circumstances, and with that full explanation, I hope that the noble Lord will be prepared to withdraw his amendment.
Lord Carmichael of Kelvingrove: There are two points. There is the point made by the noble Lord, Lord Mackie of Benshie, on houses built for farm workers, when, I imagine in general at a fairly advanced age, they retire and these houses are then taken up profitably for sale as holiday homes.
The other question is on design features. The complaints I have received suggest that the
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interpretation is too strict. Some houses may be traditionally accepted as being for elderly people, with many of the features that the noble Lord, Lord Gray, mentioned—the space standards, the light sockets, handrails, and such things. But others may not because of the period when they were built compared with the period we are in now. Some enlightened authorities were building features into houses which were received with great acclaim 20 years ago, but now we have moved on and they are perhaps not quite enough. Nevertheless they are far more suitable for the elderly than the ordinary house. Since money has been spent on the adaptations, it seems wrong that we should allow these houses to be sold into the open market.
The Minister spoke about the record of the Secretary of State. Instead of merely saying that two-thirds of the applications have been accepted by the Secretary of State, could he stretch a point and give us figures? On some of these Bills we talk about two-thirds one minute and percentages another, and it would be helpful to get the figures. What is it two-thirds of? I should be happier if I could hear these figures.
Lord Gray of Contin: I cannot give the noble Lord that figure off the top of my head. I am afraid that two-thirds is the best I can do for him tonight, but I shall get the figures for him, drop him a note and let him know what they are.
Let me deal with the point raised by the noble Lord, Lord Mackie of Benshie, and the point raised by the noble Lord, Lord Carmichael. First, on the point raised by the noble Lord, Lord Mackie, about retirement homes in rural areas being sold as holiday homes, the 1980 Act has provisions in Section 4 to prevent houses being re-sold as holiday homes.
The noble Lord, Lord Carmichael, raised a point about the Secretary of State's interpretation of Section 3A being severe. That is not my understanding. I do not think that it is any more severe than the recent amendment where houses would also have to qualify in respect of size, design, heating systems and other features. The same features listed in the handbook and presently used by the Secretary of State apply. It is not our experience that there are resulting complaints. I think that the Secretary of State uses the guidelines fairly.
Lord Mackie of Benshie: I accept much of what the Minister says, but if there are 100 objections to the sale of houses from the local authorities or the landlords, whoever they are, and one-third are upheld, that is a fair number. But if that was the case in a rural area, it would be fairly serious. It would be interesting to have a break-down of the figures if that were possible.
Lord Gray of Contin: I shall certainly provide that, and when I write to the noble Lord, Lord Carmichael, I shall make sure that the noble Lord, Lord Mackie, receives a copy. But I think we are talking of relatively small numbers.
Lord Carmichael of Kelvingrove: I thank the Minister for promising to write to me. I think I should

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also say to him that people in Scotland will have read his words and his interpretation of the Act, or they will read them. I find the information as skimpy in some ways as does the Minister, but there is perhaps more excuse for me than the Minister. I shall look forward to hearing his reply, but I should say that I will inquire in Scotland, and I reserve the right to raise the same point in more detail at the Report stage. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Increased discount where dwelling-house purchased is a flat]:
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 4:
Page 2, line 12, leave out ("(2)") and insert ("(3)").
The noble Lord said: For the convenience of the Committee, I think we have agreed that we should deal with Amendments Nos. 4, 7, 8 and 13.
I indicated in introducing our debate on Second Reading that we were giving further thought to the provisions of Clause 2 of the Bill, as a result of pressure which had arisen in another place, and that we would he bringing forward further amendments. The present amendments are the result of that consideration.
It may be helpful if I remind the Committee that a tenant exercising the right to buy is entitled to a discount on the market value of his council home, which is related to the length of time he has been a public sector tenant. In order to buy, the tenant must normally have a qualifying period of at least two years. He is then entitled to a basic discount of 32 per cent., which rises by a further 1 per cent. for each additional year, up to a maximum discount of 60 per cent. after 30 years.
Clause 2 of the Bill, as introduced, proposed that discount should be increased by 10 per cent., where the house being purchased is a flat. People buying a flat would then be entitled, under our original proposals, to a new minimum discount of 42 per cent. after two years, rising to 70 per cent. after 30 years.
We felt that this was necessary because flats had been selling much more slowly than other types of houses under the right to buy. Flats account for almost half the total public sector stock in Scotland. However, in 1984, to take the most recent year, out of more than 16,000 houses sold under the right to buy, fewer than 2,000 were flats. This pattern has been repeated in every year since the right to buy was introduced. Our research suggested that purchasers were apprehensive about the additional costs and responsibilities associated with owning a flat; and this is why we thought it fair to recognise their concerns by the provision of additional discount. I should mention that similar changes to the discount rules for England and Wales were included in the current Housing and Planning Bill.
During the passage of both the present Bill and the Housing and Planning Bill in another place, there was concern that our proposal for an additional 10 per cent. discount did not go far enough and that some further incentive was needed if we were to make the purchase of a council flat an attractive proposition. As a result, we undertook to give further consideration, as
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I indicated on Second Reading, to what might be an appropriate level of discount on flats.
The present amendments therefore provide for a rather better discount for flats. Where somebody is buying a flat, we are proposing that his discount entitlement should rise by steps of 2 per cent. each year, instead of 1 per cent. as at present. A tenant with a minimum two years' standing therefore would be entitled to a discount on a flat of 44 per cent., and the maximum of 70 per cent. would be reached after 15 years.
As a result, the upper and lower limits of the discount scale on flats sold under the right to buy will remain virtually the same as in the Bill as introduced. However, the time required in order to qualify for the maximum discount will be halved. This will benefit the tenants of all types of flats. It recognises that because of the way allocation systems operate, tenants of flats tend to be younger people, and I believe that the amendments will be particularly welcomed by younger purchasers taking their first steps into home ownership.
Perhaps I may say something briefly about Amendment No. 13. This amends Section 9A of the 1980 Act and is consequential upon the other changes we are making to the rules governing discount on flats. Section 9A of the 1980 Act provides that where a person is granted a secure tenancy in pursuance of Section 10(3) of the Housing Defects Act 1984, he does not have to wait the minimum two years, as any other tenant would, before qualifying for the right to buy, but becomes immediately eligible to buy, although starting at a basic 30 per cent. discount. As a consequence of our proposal to increase the minimum discount on flats by 10 per cent., it is necessary' to amend Section 9A to provide that where a person whose house has been repurchased as defective is granted the secure tenancy of a flat, he shall qualify immediately to buy at a minimum discount of 40 per cent. (and then rising by an additional 2 per cent. for each subsequent year of tenancy, as with any ordinary tenant).
These amendments fulfil our undertaking to see whether we could improve on our earlier proposals for discount on flats. They will promote the extension of home ownership to council flats and will be of particular benefit to younger purchasers. I beg to move.
8.15 p.m.
Lord Ross of Marnock: There is no end to the generosity of this Government in respect of the people who used to be very much despised by the party opposite. I remember it being stated that people who lived in council houses were second-class citizens. I think the Member of Parliament who said that is now a Member of this Chamber.
Here, certain flats are being given special bargain rates. I think it is in line with that television programme "The Price is Right"—come on down! Bargains for everyone, at the expense of someone else. It is not the Government who own these houses; the landlords of these houses are the local authorities, the housing authorities, or now included within this—as

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we have agreed to Clause 1—the housing associations. You can well imagine how a housing association which has worked hard on a particular tenement property—and they will be flats—will find that it has to grant a discount of 70 per cent. The tenants may have been in that house for only two years—I hope I shall be corrected if I am wrong—but if they have come from a local authority house before going into that one that counts as waiting time, so they can get a discount of 70 per cent.
I suppose that from her good business sense the noble Baroness, Lady Carnegy, will think this is wonderful, giving them 70 per cent. discount. I think it is robbing the local authorities of their property to do this kind of thing. By the way, I am a little muddled these days so I looked this up, and the proposed change is:
"after the words '32 per cent.' there shall be inserted the words', or where the dwelling-house is a flat 42 per cent,' "
I looked up the Act. That says:
"the discount for the purposes of this subsection shall be— (i) 33 per cent."
It does not refer anywhere to 60 per cent; it refers to 50 per cent. Can we have an explanation as to why we are referenced to a figure in the Act and when one reads the Act it is not there? It does not say "the Act as amended by". This is how it becomes ridiculously complicated for simple-minded Lords who voted the wrong way last time, including the noble Baroness, the con-woman. She is prepared to be conned into anything. If any vote is predictable in this Chamber, it is hers. Never mind, one day she might make it to the Front Bench; but that is not the way to do it. If she wants to make herself invaluable to the Front Bench she should vote against the Government once or twice. She will gain promotion quicker that way. I have had longer experience of the House of Commons and other places than the noble Viscount who has now come to grace the Front Bench. I can tell him that that is the way to achieve that particular ambition.
I cannot see the justification for this clause. I have two amendments down, but the change it makes gives speedier access to the 7 per cent. I am "agin" it. I think the Government are quite wrong. We have had some figures quoted to us about these flats not selling so well. I believe they are selling better in Scotland than they are in England. I believe that about 12 per cent. of these flats have gone in Scotland. I can understand the Government feeling that they are not selling well enough, simply because people have not been buying in Scotland.
To get them to buy we enlarge the carrot. We now have the 42 per cent. for a start, increasing by 2 per cent. and reaching the 70 per cent. much more quickly. What that means to me is that the Government's policy is failing. One can explain the 12 per cent. more easily because there are more of these kinds of flats in Scotland than there are in England: the old four in a block. The Government recognise the failure and in their determination to give this right to buy (which means to reduce the liability of the Government and to reduce the housing grant to local authorities) they are selling these flats at these give-away prices. The generosity of this Government is
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staggering towards people whom so recently they despised.
I could quote yet another, perhaps not a lady on this occasion—she became a Baroness too—but she was a Member of Parliament for a time. As she is no longer with us I do not think I will quote her, but she too had this attitude towards council tenants.
The council tenants whom the Tories so despised are now becoming the people who are given the bargains and the better bargains. I think the Government's policy is wrong. In many cases the policy in respect of local authorities is wrong, bearing in mind that the houses on which people have taken up the right to buy have been the best houses. One can see that all over the place, in Ayrshire, in Kilmarnock, in Glasgow and in Edinburgh. They are the best houses and now when the market is sticking the Government increase the inducement. But they are still giving away houses for which people are waiting on the housing list. If the houses are sold they will not be available. I do not know whether the Minister knows, but there are young people who are subsidising their parents to buy the houses in the knowledge that their aged parents will die and that they will move into them; so the bargain is not even to the tenants but to the sons and daughters. I do not think that is right. People will wait in the queues and will not get in.
The further evil of this is that it will now apply not only to the local authority houses. By virtue of Clause 1 and two votes in this Committee it will apply also to housing association houses. I do not think the Committee can be proud of that. I am sorry, but I cannot support the Government in what they are doing in this amendment.
Lord Gray of Contin: The noble Lord raised one or two points that I should answer. He spoke about the 33 per cent. and the 50 per cent. Those figures refer to discount repayment requirements, not to discount itself. He spoke about sales at discount being at the expense of the landlord. That is not so. The so-called cost floor provisions which we shall no doubt discuss on Clause 3 provide that discount is restricted if the sale price will not be sufficient to cover the outstanding debt on the house.
The noble Lord, Lord Ross, spoke about discount on housing association fiats. While housing association flats will be subject to the same discount as council flats—that is, up to 70 per cent.—it must be remembered that housing association flats are often newly renovated at considerable public cost. In those cases the maximum discount may be limited by the outstanding debt test, the cost floor already in the 1980 Act.
I hope that this clarifies the questions that the noble Lord had and that he may now be prepared to accept the amendment.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Earl Cathcart): In calling Amendment No. 5, I should advise the Committee that if that Amendment is agreed to I cannot call Amendments Nos. 6 and 7.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 5:
Page 2, line 15, leave out paragraph (a).
The noble Lord said: The Bill states:
"In sub-paragraph (i), after the words '32 per cent'."
Subparagraph (i))relates to Section 1(5)(b) of the 1980 Act. That is the Tenants' Rights, Etc. (Scotland) Act 1980. Section I (5) of that Act states:
"Subject to subsection (7) below … the discount for the purposes of this subsection shall be".
There is no figure 32; the figure is 33. May I have that explained? Explain away what is there. What is referred to is in Section 1(5)(b) of the 1980 Act. In that subsection the figure referred to is 33 per cent. Until that is properly explained I do not think we should allow it to go into statute.
Lord Gray of Contin: I am happy to be able to answer the noble Lord's query. Section 1(5)(b) was amended by the Tenants' rights, Etc. (Scotland) (Amendment) Act 1984.
Lord Ross of Marnock: I thought that. In fact, I think I said that, but that was not the explanation given to me by the noble Lord, Lord Gray of Contin, when he replied to my earlier remarks. Perhaps he would like to apologise now.
Lord Gray of Contin: The brass neck of the noble Lord really takes some beating! I have no intention of apologising, but I shall carefully read the record and if I have made any mistake of course I shall acknowledge it to the noble Lord.
Lord Ross of Marnock: The noble Lord sought to explain why the figure was 33. I seem to be referring to an entirely different discount. Now he has the right answer. He should have given me that answer in the first instance. That being so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 6:
Page 2, line 17, after ("flat") insert ("constructed after 1919").
The noble Lord said: This is an amendment which is most important for housing associations, particularly in the large conurbations of Scotland—Aberdeen, Dundee, Edinburgh, Glasgow, Greenock and such places—where the long-established type of housing has been the Scottish tenement, practically all of which were built prior to 1919. The noble Earl, Lord Selkirk, earlier spoke about how attractive these houses are now that they have been cleared up, many of them by housing associations, and how much in demand they are. Housing association rehabilitation work is mainly carried out in areas of mixed tenure tenements constructed prior to 1919.
Housing associations themselves encourage owners to retain and improve their property. Unlike local authority housing schemes, there is an already
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established and often vibrant housing market in and adjacent to the areas where the housing associations are involved. In these circumstances it really seems that there is no requirement to enhance the discount for rehabilitated tenement fiats in such areas. I can speak very srongly of certain areas; for instance, the Maryhill area, and, perhaps even more importantly, the Partick area, of Glasgow where the demand for tenement property is extremely high. There is no difficulty in selling houses in this area.
Therefore, to take from the housing associations houses, many of which were provided through a great deal of voluntary effort and were built before 1919, seems to me to be unfair. It also fails to show any gratitude on the part of the Government and shows a profligate attitude with public money, since there is no difficulty in selling flats of this nature. I hope that the Minister will take this on board and agree with Amendment No. 6. With that amendment perhaps it will be convenient to take also Amendment No. 10. I hope that both will be acceptable to the Government. I beg to move.
Lord Gray of Contin: The effect of these amendments would be to deny particular groups of tenants the same discount entitlement as is available to kindred tenants living in similar properties built after 1919. I have listened carefuly to the arguments put by the noble Lord; I have to say that I consider them unacceptable. The noble Lord has pointed out that the majority of such flats will be owned by housing associations. This may be true, although it should also be remembered that some local authorities also have such tenements in their stock.
It has been argued that housing association flats are likely to have been recently refurbished and will therefore be more attractive to purchasers. This may well be the case. However, the experience among local authorities has been that flats of all types have sold markedly less well than other houses. This is not so much because the tenants do not like their flats, as because they are apprehensive about the associated responsibilities and costs—such as for common repairs—which go with the purchase of a flat. There is no reason to suppose these views will not be shared equally by housing association tenants.
But I believe that this argument is largely irrelevant. The principle of discount is a central feature of the right-to-buy scheme. The basic discount reflects the fact that the house or flat is being sold with a sitting tenant; and thereafter additional discount is granted, reflecting the tenant's tenure of publicly-funded housing. To argue that tenants living in flats built before 1919 should not be entitled to the same discount as other flat dwellers, because their flats are likely to prove more popular, is to misunderstand totally why a discount is given in the first place.
In conclusion, I do not believe that there is any case for different discounts being applied purely on the basis of whether a particular flat was built before or after 1919. The discount reflects the fact that the house is being sold with a sitting tenant and also the period of time over which that tenant has been contributing towards the cost of publicly-funded housing. I must therefore ask the Committee to reject these

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amendments if the noble Lord insists on pressing them.
Lord Morton of Shuna: I have difficulty in understanding the noble Lord, Lord Gray, and I wonder whether he has ever lived in one of the cities. Where are the stone tenements in Scotland built after 1919? There are plenty of council multi-storey flats and one can see why perhaps they have to be made specially attractive. But the whole purpose of the Government's proposal is to make flats more attractive so as to facilitate their sale and to make a distinction. This amendment would remove from that distinction the flats which are already attractive, which are the flats in the old tenement blocks which have been restored. It does not appear to me that the noble Lord has answered the point at all. I certainly know of no tenement flats in the style of the pre-1919 ones that have been built anywhere in Scotland since then. They are a completely different type of flat.
Lord Gray of Contin: I am sorry but I cannot really help the noble Lord very much. He suggested that he did not understand me. I thought that what I said was as plain as a pikestaff. I really cannot understand where he is becoming confused. He asked about flats built after 1919 in local authority ownership; obviously I cannot answer that question off the top of my head. I am advised that such flats exist. But it really is rather a pointless question to ask where they are at this stage of the proceedings. No doubt we shall be able to get the information for the noble Lord if the noble Lord, Lord Mackie of Benshie, keeps speaking for long enough.
Lord Mackie of Benshie: As I understood the noble Lord on the Opposition Front Bench, it was not the plainness that he was complaining about; it was the logic. His argument was perfectly plain to me: that if you knocked 10 per cent. off flats because they were not selling very well, then if you had flats that were selling very well, there was no need to knock off the 10 per cent. As a simple horse dealer that appears to me to be sensible.
Lord Gray of Contin: I am grateful to the noble Lord, Lord Mackie. Edinburgh District Council, I can inform the noble Lord, has tenements in Barony Street, Newtown, Edinburgh, built in the 1930s and other equally attractive blocks built since.
Lord Carmichael of Kelvingrove: I cannot understand the Minister. I can see his point that the whole object was to sell as many houses and flats as possible. But I believe that he is missing, and the philosophy of the Bill is missing, one of the vitally important points of our whole argument. The noble Earl, Lord Selkirk, and others from all parts of the Committee have travelled through some of these cities in the last few years and have seen the enormous improvements that have been made, largely due to enthusiasm by housing associations.
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I know that a very large number of flats were built in places in Glasgow by the old city improvements department, particularly in the central part of the city, but they are now local authority houses and there are fairly big groups of them. They are very desirable houses. The Minister in the earlier Bill has his rights to sell these flats. I am sure that the inquiries will discover that the houses round about Glasgow Cross, High Street, Duke Street and George Street will go very reasonably.
What we are concerned about are the small housing associations, not those with houses of anything like the numbers that I have been speaking about; houses that the old city improvements department bequeathed to the district council. I am talking about relatively small numbers of houses built before 1919. The question of houses, stone-built houses, built after 1919, or built in the same pattern, does not arise.
I am concerned about the old-established Glasgow tenement houses which many people believe represent not a bad way of housing people because some of them are and always were of a very high standard. We are concerned with trying to preserve these houses. A worry that housing associations have is that if they have spent a great deal of money and have improved a number of houses in a block, they can then be bought by people who frequently are afraid of the cost of repair. If enough of the houses are bought, the majority then do not belong to the housing association. Therefore common repairs are difficult and planned maintenance of the houses is not possible because the ownership is so disparate. The housing associations rightly feel that the great work they have been able to do, with the co-operation of all sorts of local people, will go by the board.
If the noble Lord thinks again of some of the streets in the cities, he will realise that in the old days, even before the advent of housing associations, many of our tenements were individually owned. That was the case in my old constituency. But great problems arose over roofs, for instance, with a roof costing several thousand pounds to repair; and it was mainly a Labour Government and local authorities which put money towards repairing the roofs. Goodness gracious, had we not had so many parts of Glasgow renewed over the last 25 years, the houses would have been in an extremely bad state and we should have been much worse off for housing than we are now!
This is an important amendment. It is not asking too much. We are talking about houses that sell readily, but we feel that houses of pre-1919 construction, owned by housing associations, should be exempt from this Bill. I hope that the Minister will look again at it and think more closely before he makes too negative a response to the points I have genuinely tried to put forward tonight.
Lord Ross of Marnock: I think we are hoping to get an answer from the Minister as to whether anything has got through to him. We are not talking about houses built after 1919; we are talking about houses built before. We are trying to rescue something from the generalised power we are giving to tenants of housing association houses. The smaller housing

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associations in Glasgow work on these old tenements. The photographs taken before and after of these old tenement properties are worth seeing. There are just a handful of such properties.
These are the smaller housing associations and we are trying to rescue them. They know quite well that, having renovated these properties at great expense—and the Government have helped, but the labour has been given by the voluntary organisations—if they have to sell some of these rather preciously rehabilitated houses their work is going for nothing.
We are limiting our demand or request—we are almost down on our knees now—to asking for these houses to be saved. These are the houses that the noble Baroness, Lady Elliot, and the noble Earl, Lord Perth, were speaking about. There are only a small number of houses where people have to be manipulated out and then back in. These housing associations have achieved something and they see that achievement going. These houses are all pre-1919; some of them are from 1890. They are such good houses that the National Trust for Scotland has bought one in Glasgow which is now a show house.
The community housing association has rehabilitated these houses and got people into them. They are paying considerable rents for them. The associations have achieved something by keeping people in the centre of Glasgow and retaining architecturally valuable properties. That is the sole purpose of this amendment: it is limited to that. If the Minister says he is prepared to look at that, I think we would gladly withdraw the amendment. Surely his mind is not so closed that he is not prepared to talk this over with his officials.
8.45 p.m.
The Earl of Perth: Having heard the last intervention of the noble Lord, Lord Ross of Marnock, I think it would help us all if the noble Lord, Lord Gray, could tell us the magnitude of what we are talking about. When I hear it said that such things are of importance for preservation reasons, and so on, I think it is hard for the Committee to judge the merits on one side or the other without the facts. If the noble Lord would give us the information for which the noble Lord, Lord Ross, asked, that would be helpful. I understand the amendment will not be pressed if he knows that at the Report stage we shall be given further details.
Lord Gray of Contin: I am grateful to the noble Earl, Lord Perth, and I shall not keep him waiting even till the Report stage: I shall give him the information now. The noble Lord, Lord Ross, was talking about small groups of tenements and suggested that we are talking about a handful of properties. The housing association tenement stock in Glasgow is over 13,000, so—
Lord Ross of Marnock: The local authority's stock in Glasgow is more than half a million.
Lord Gray of Contin: The noble Lord must listen. I did not say the local authority: I said the housing
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association tenement stock in Glasgow is over 13,000. He wants to deprive those tenants of the right which is available to others. I do not, the Government do not and I am perfectly sure the noble Earl, Lord Perth, does not want to do that.
I sometimes despair when I hear noble Lords on the other side talk about people who wish to buy their houses in such terms: whenever the houses are bought they are going to be allowed to get into a state of disrepair. That is what they suggest, but nothing could be further from the truth. When somebody buys his own house he is going to take a pride in it. He is jolly well going to make sure that it does not fail into disrepair. Therefore the wholly political arguments—in disguise, I admit—which are put forward by the noble Lord, Lord Ross of Marnock, do not cut any ice. These people are entitled to the same privileges as local authority tenants. Why should we deprive them of the right to buy their houses?
No, I am sorry. I have listened carefully, as I always do, to the noble Lords, Lord Ross of Marnock and Lord Carmichael, because they are both very experienced in housing matters. They have both been Ministers in another place, and I respect their knowledge. But they also are in Opposition and they have to make their case as best they can. They have not been convincing and I cannot accept their arguments. I am sorry.
Lord Mackie of Benshie: My heart, too, bleeds for these poor people who cannot buy their houses; like the Minister's, it has bled frequently tonight. But many of these amendments are about the 10 per cent. less on flats. We are talking in some cases about the feelings of housing associations which have built up such properties and which know they are extremely attractive. They may have to dispose of them at 10 per cent. less than the price of a house, although some of the flats, particularly the older stone-built ones, when done up are more attractive. I think the Minister should look at this and at least consider the feelings of the people who do the voluntary work in these housing associations.
I know that there are exceptions. I mentioned one of them, and there is another amendment coming up concerning flats in blocks of four, which are extremely effective. I think the Minister might look at this and see whether the feelings are genuine. They are not all political; I can assure him of that.
Lord Gray of Contin: I am sure that the noble Lord is sincere, as were others, but I am afraid that I am not prepared to accept these amendments, nor to take them back, and if noble Lords insist on forcing them, then I must resist.
The Earl of Perth: May I be clear about what the noble Lord, Lord Gray, is saying? As I understand it, he said that there are 13,000 flats which were constructed before 1919. Is that correct?
Lord Gray of Contin: No. If I could explain to the noble Earl, I said that there are over 13,000 houses in the housing association tenement stock in Glasgow. I

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did not say, but I now say, that a great many of them would have been constructed before 1919. I do not say that all those tenements were constructed before 1919.
The Earl of Perth: I still ask the noble Lord whether he could help us with the figures on Report. If only 1,000 or 2,000 of those 13,000 were constructed before 1919, and if they were of a special quality, that makes a difference.
Lord Gray of Contin: The movers of the amendment have this matter within their power. If they care to withdraw their amendment, they can table a similar amendment on Report, but for the reasons which I have given I am not prepared to accept the present amendment. I understand that over 80 per cent. of the 13,000 were built before 1919.
Lord Carmichael of Kelvingrove: If 80 per cent. of 13,000 houses is divided among a fairly large number of housing associations, it means that each of them does not have many pre-1919 houses. If we scale the figures down in that way we realise the effort that has been made by local people in preserving, and making a valuable contribution to, the housing stock. It could not be considered to be massive. The housing is not necessarily the most important part of the contribution, but, as I said on Second Reading, that has had an effect on areas which would not otherwise have been saved.
There is a point which I must take up with the noble Lord the Minister. He was kind enough to say that the noble Lord, Lord Ross of Marnock, and myself had some experience of housing. I never had any experience of housing in government, but I claim a great deal of experience of living in tenement houses in both the East End and the West End of Glasgow. Anyone who believes that there are no problems with houses in closes which are owned by individuals does not know anything about living in tenement property. I have lived in closes where everyone owned their own houses and where getting repairs done was an incredibly difficult job. There had to be meeting after meeting because some people just did not have the money to pay for the repairs; and because the matter was divided equally between all the owners of the tenements there was no majority such as there is with a housing association, which has a majority and can go ahead with repairs and make arrangements with those who are in difficulty about meeting the cost of repairs.
It is sometimes difficult for people to find the money for repairs. Of course people are proud of their houses and do a great deal to them, but when there is a bill for anything up to £20,000 to repair a roof and there are only 12 people living in a close, a big strain is suddenly put on them. I should like to make that clear, because it is something about which I know a little. I believe that the noble Lord the Minister was, if anything, rather harsh and perhaps over-political. This is something upon which we should put down a marker. I hope that the Committee will give an opinion on the amendment. I should like to await the result of a Division.
8.54 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 29; Not-Contents, 46.

DIVISION NO. 2

CONTENTS

Airedale, L.

McNair, L.

Barnett, L.

Molloy, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Crawshaw of Aintree, L.

Mountevans, L.

David, B. [Teller.]

Nicol, B.

Dean of Beswick, L.

Parry L.

Graham of Edmonton, L. [Teller.]

Ross of Marnock, L.

Seear, B.

Hooson, L.

Stoddart of Swindon, L.

Hughes, L.

Strabolgi, L.

John-Mackie, L.

Taylor of Blackburn, L.

Kilmarnock, L.

Taylor of Gryfe, L.

Lawrence, L.

Tordoff, L.

Lockwood, B.

White, B.

Mackie of Benshie, L.

Ypres, E.

NOT-CONTENTS

Allenby of Megiddo, V.

Harvington, L.

Belstead, L.

Hooper, B.

Brabazon of Tara, L.

Kaberry of Adel, L.

Broadbridge, L.

Kintore, E.

Brougham and Vaux, L.

Lauderdale, E.

Butterworth, L.

Lindsey and Abingdon, E.

Cameron of Lochbroom, L.

Long, V.

Campbell of Croy, L.

Lyell, L.

Carnegy of Lour, B.

Margadale, L.

Cathcart, E.

Marshall of Leeds, L.

Coleraine, L.

Mersey, V.

Craigmyle, L.

Montgomery of Alamein, V.

Crathorne, L.

Perth, E.

Davidson, V.

Quinton, L.

Denham, L. [Teller.]

Skelmersdale, L.

Elliot of Harwood, B.

Swinton, E. [Teller.]

Elliott of Morpeth, L.

Trefgarne, L.

Ferrers, E.

Trumpington, B.

Forbes, L.

Vaux of Harrowden, L.

Gibson-Watt, L.

Windlesham, L.

Gisborough, L.

Wise, L.

Glenarthur, L.

Wynford, L.

Gray of Contin, L.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.2 p.m.
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 7:
Page 2, line 17, leave out ("(42)") and insert ("(44)").
On Question, amendment agreed to.
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 8:
Page 2, line 18, after ("(b)"), insert ("in sub-paragraph (ii), after the words "one per cent." there shall be inserted the words ", or where the dwelling-house is a flat two per cent.,";.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Strabolgi): Before I call Amendment No. 9, I must inform your Lordships that if No. 9 is agreed to I cannot call Amendment No. 10.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 9:
Page 2, line 18, leave out paragraph (b).
The noble Lord said: In case anyone is worrying himself sick about Amendment No. 10 not being called, I can tell him that we discussed it along with the earlier one, which was on exactly the same point, and we do not propose to move it.
Amendment No. 9 is to leave out paragraph (b), which refers to "60 per cent." But the phrase "60 per cent." does not appear in the Act. Is the explanation the same as before, that it has been amended by a further Act? If that is the case, could we have an explanation and be told the name of the Act so that we can add it to the bundle of Acts that we need in order to interpret this Bill? I beg to move.
Lord Gray of Contin: Yes, the noble Lord is correct. This is from statutes already in force.
Lord Ross of Marnock: Yes, but which one.
Lord Gray of Contin: I shall have to check that for the noble Lord, but I think it is Section 1(5)(b)(i).
Lord Ross of Marnock: We know it is Section 1(5)(b)(i). I am reading that, but it does not mention 60 per cent.; it mentions 50 per cent. I have already suggested that this has arisen because another amending Act has been passed. I think it was a planning Act of some kind. I just want the reference to it so that we get it right somewhere.
Lord Gray of Contin: It is Statutes in Force, the Tenants' Rights, Etc., (Scotland) Act 1980, Chapter 52, and I am told that the reference of Section 1(5)(b)(i) which I gave the noble Lord is correct.
Lord Ross of Marnock: But which statute made it so different?
Lord Gray of Contin: The noble Lord is nit-picking. This is becoming like Fred Karno's army. It is the Tenants' Rights, Etc., (Scotland) Amendment Act 1984.
Lord Ross of Marnock: That is very different. The reference in Clause 2 of this Bill is:
"Subject to subsection (2) below, in section 1(5)(b) of the 1980 Act".
The 1980 Act does not contain the words "60 per cent.". That was amended by the 1984 Act. If we had had that explanation at the start, we would all have been saved a certain amount of trouble. The Minister looked rather floundered and flustered, and he was leading a Fred Karno's army himself.
Lord Gray of Contin: The noble Lord asked the question.
Lord Ross of Marnock: If you are a good parliamentarian, you never ask a question unless you
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know the answer. After that persuasive reply from the Minister, of course I shall be delighted to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 12:
Page 2, line 26, at end insert ("and that building not having more than three storeys").
The noble Lord said: This amendment is concerned with buildings no higher than three storeys.
Lord Gray of Contin: It has already been spoken to.
Lord Carmichael of Kelvingrove: This amendment was not moved previously but was merely discussed with other amendments. I hope that the Minister, if he is unwilling to accept the amendment, will give some explanation as to why he is unable to accept it. Surely this amendment has to be moved as we reach it.
Lord Gray of Contin: The groupings were agreed to, and this amendment was grouped with three other amendments and has already been spoken to. The normal procedure is that it would not be moved.
Lord Ross of Marnock: If we are taking amendments together, then the normal procedure would be for the Chairman to say which amendments are to be taken together. I presume—though nobody has said this, or nobody heard it—that this amendment goes with Amendments Nos. 4, 5, 7, 8, 9, 11, 12 and 13. That has not been put to the Committee. In any case, Amendment No. 12 has not been moved and we are entitled to move it.
The Deputy Chairman of Committees: Is Amendment No. 12 moved?
Lord Carmichael of Kelvingrove: I should like to move the amendment. Roughly the same argument applies as was put before to the noble Lord the Minister concerning smaller buildings containing four flats or fewer within them. The noble Lord, Lord Mackie of Benshie, has his signature to this amendment as well. They are homes that not only go without trouble but are also in considerable demand. I therefore hope that the Minister will give the Committee a slightly better explanation than he did in respect of the amendment we discussed earlier concerning buildings of no more than two storeys. I beg to move.
Lord Gray of Contin: Amendment No. 12 seeks to provide that tenants shall qualify for extra discount on flats but only if their flat is in a building of not more than three storeys. That would exclude from the additional discount flats in low- and high-rise blocks. But flats in two-storey blocks—commonly known as the four-in-a-block type of house—would qualify for extra discount.

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I confess that in considering this amendment in advance of today's proceedings I found it a little difficult to follow. The mystery deepened on Friday when there appeared on the Order Paper Amendment No. 11 with the exact opposite effect: to exclude from extra discount flats in two-storey blocks but include all others. I concluded therefore that the noble Lord's purpose was no doubt probing.
In proposing additional discount on flats, our purpose is to recognise that the number of flats sold under the right to buy has been disappointing. That applies to flats of all types, and we do not believe that there is any distinction to be made between flats in multistorey blocks on the one hand and flats of the four-in-a-block type on the other hand. It has sometimes been suggested that four-in-a-block flats are more popular and therefore should be excluded from the extra discount. However, the figures do not support that suggestion.
Of all houses sold under the right to buy, only about 12 per cent. have been flats, even though flats account for about half the total stock. Within that total, the difference in popularity between different flat types is nothing like so strong as has been suggested in some quarters. Exact figures are not available because the figures for the stock arise from the 1981 census, whose division of house types did not match in all respects that used for sales returns. It is possible to say that about 2 per cent. of the stock of four-in-a-block flats have been sold, compared to about 1.7 per cent. of the stock of flats of other kinds, predominantly those in higher blocks.
On the basis of those figures, one could not construct a case for excluding tenants of particular kinds of flats from the extra discount provided by the Bill. In the light of that explanation, I trust that the noble Lord will withdraw his amendment.
Lord Carmichael of Kelvingrove: I apologise to the Minister, but on looking more closely at the amendment—I do not have the script but I am sure this was my fault—I find that I have there the word "not", which rather disturbs matters. I apologise to the Committee, because that changes the entire balance of the amendment. It should have read:
"and that building having more than three storeys".
I apologise for that.
The only point I should like to make to the Minister is that I find it difficult to believe that the different types of flats sell proportionately the same, when one considers the number of high-rise flats. By the time we reach Report stage, perhaps the Minister will have some figures from local authorities that have been selling flats, to find out just what proportion of high-rise flats is involved. From my observations and the usual "vibes" one gets when moving around, one reaches the point where one finds that flats of four in a block are obviously much more desirable than most others, except perhaps in local authorities which have the old and much sought after semi-detached house.
It would be helpful if, before we part with this Bill some time in the next month or so, the Minister is able
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to give us the figures showing the actual breakdown, so far as local authorities know, of the number of high-rise flats and other types that have been sold. Having said that, and again with my apologies to the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 13:
Page 2, line 27, leave out ("(Subsection (1)") and insert ("(Subject to subsection (3) below, in section 9A of the 1980 Act (application of Part I of that Act when dwelling-house is repurchased as defective), after the words "'30 per cent.';" there shall be inserted the words "(AA) for the words '44 per cent.' there shall be substituted the words '40 per cent.';".
(3) Subsections (1) and (2)").
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 [Amendment of date after which certain restrictions may apply as regards price fixed for purchase of dwelling-house; and extension of those restrictions]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 14:
Page 4, line 4, leave out from beginning to end of line 6.
The noble Lord said: The purpose of this amendment, and Amendment No. 15, is that the statutory instrument referred to in Clause 3(5) should be dealt with by affirmative resolution of the two Houses of Parliament rather than by negative resolution.
The statutory instrument is covered in subsection (4). If I understand this rather tortuous way of legislating, it deals with the date on which values are to be set; the effective date of the tenancy and matters of value, deductions from the cost of the property and therefore deductions in the extent to which the discount is allowed to be taken off. It appears to me that this would be much better dealt with by affirmative resolution, so that the matter could be discussed, rather than by negative resolution. I beg to move.
However, in moving the amendment perhaps I may take the opportunity of pointing out that Amendment No. 16 deals with Clause 4 and not with Clause 3 as would appear from the Marshalled List.
Lord Gray of Contin: I agree with the noble Lord, Lord Morton, that Amendment No. 16 deals with Clause 4. It is a mistake on the Marshalled List.
Clause 3 has two main purposes. First, it changes the cut-off date for the outstanding debt test. That is the date after which discount may be restricted if it would bring the sale price of a house below the outstanding debt on that house. In 1980, when the right to buy was introduced, that date was set in the 1980 Act at 15th May 1975, which was in fact the date of local government reorganisation. It has not been changed since. We are proposing that the date should now be moved forward three years to 31st December 1978.

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This is a modest change which we are satisfied will not have any adverse financial consequences for authorities but will, we believe, be welcomed as relieving them of some unnecessary work.
Secondly, the clause provides that discount may be restricted if it would bring the sale price below the debt outstanding on recent works to modernise and improve the house. Over the years we have had representations from a range of authorities that they should not he required to sell at less than the outstanding debt on modernisation works. They felt it unfair that cases might arise where a house was expensively modernised and then the authority obliged to sell it to the tenant at a discount; at a price which was insufficient to meet the debt on the modernisation works. We have accepted these arguments and the Bill provides that modernisation costs shall be brought within the outstanding debt test for the first time. I undertand that this change has been welcomed by the Convention of Scottish Local Authorities.
The Bill therefore moves forward the cut-off date by three years and extends the debt test to cover modernisation works. The Secretary of State has always had the power, under the existing Section 1(7), to disapply the outstanding debt test by order, made by statutory instrument subject to negative resolution. As a consequence of the further changes we are making, we are proposing in subsections (4) and (5) of Clause 3 that he should also have power by order to modify the operation of the outstanding debt test and to change the cut-off date.
In future, it is conceivable that it might be desirable to make further changes to the cut-off date and to the terms of the outstanding debt test. We have no immediate plans for such changes; but, if they did seem appropriate, it seems undesirable and unnecessary that they should only be able to be made by primary legislation. That is why we propose that the Secretary of State should have the power to make further changes by order.
The order-making power not only permits the terms of the outstanding debt test to be changed, including the date, but also different terms, for example a different date, to be set for different authorities. It might be felt desirable to set a different date for different housing authorities, for example, to take account of differences in the composition of their stock; or even to set a different definition of the outstanding debt in different cases. It might be, although this is perhaps less likely, that different terms would apply to different types of houses across all landlords. The clause is phrased as it is to provide flexibility, so that if an authority discovers that the terms of the test do not meet its own local situation, and if its representations seem justified to us, we have the power to make adjustments without having to resort again to the lengthy process of primary legislation.
In concluding that negative resolution was the appropriate procedure, we were also influenced by the fact that the Secretary of State already has a power, under Section 1(7) of the 1980 Act, to disapply the outstanding debt test entirely, and that power is exercisable by order subject to negative resolution
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procedure. An order as proposed in the present clause, which merely alters the terms of an existing test, is obviously much less drastic than one which removes the test entirely; and it would seem a little strange to make the less severe type of change subject to affirmative resolution procedure, when the Secretary of State could, if he wished, abolish the test entirely by an order subject to negative resolution.
I fear that I must apologise for trying the patience of the Committee with this lengthy explanation, but I hope that the noble Lord will now feel able to withdraw his amendments.
Lord Morton of Shuna: It was a very long explanation but it was clear and I think that even I managed to understand it. I am very much obliged to the noble Lord. However, as he explained so clearly, the new powers to make regulations cover very much wider areas than the previous powers. Under the last few lines of subsection (4) they cover powers making:
"different provision in relation to different areas, cases or classes of case and may exclude certain areas, cases or classes of case".
I should have thought that, when one is allowing that form of wide discretion, it is much better that it should be by affirmative resolution rather than by negative resolution. But on the understanding that I may return to this point later and in the hope that the noble Lord will consider the matter further, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna had given notice of his intention to move Amendment No. 15:
Page 4, line 8, leave out from ("to") to end of line 9 and insert ("approval by both Houses of Parliament").
The noble Lord said: It follows that I shall not move the amendment.
[Amendment No. 15 not moved.]
Clause 3 agreed to.
Clause 4 [Secretary of State's power to give directions as to conditions in offers to sell]:
The Deputy Chairman of Committees: Before I call Amendment No. 16, I must inform the Committee that at the beginning of the insertion, owing to a misprint, the word "it" should be deleted.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 16:
Page 4, line 18, leave out ("appears to") and insert ("has been shown to the satisfaction of the Sheriff by").
The noble Lord said: I beg to move this amendment. This section gives the Secretary of State power, if he thinks that the inclusion of conditions of a particular kind in offers to sell would be undesirable, to give directions to landlords generally or of a particular description. This is a very wide power to give to the Secretary of State. The amendment is to make the section read:
"Where it has been shown to the satisfaction of the Sheriff by the Secretary of State that the inclusion of conditions".

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In other words, it would be for the Secretary of State to satisfy the appropriate sheriff that the particular conditions would be unreasonable. It appears to me that this would be a very reasonable condition to make because it would mean that the Secretary of State had to satisfy someone else that he was acting reasonably instead of just acting totally off his own hand. I beg to move.
Lord Gray of Contin: Clause 4 enables the Secretary of State to issue directions to local authorities and other landlords concerning the conditions which they may include in future offers to sell under the right to buy. The power is necessary for two reasons. Firstly, there have been allegations that landlords have threatened tenants with onerous conditions, in order to deter them from purchasing. We would be concerned if there were evidence that this was happening on a wide scale, and the clause will give the power to take action to remedy such abuse, saving considerable inconvenience for both purchasers and the Lands Tribunal.
Secondly, the power might be helpful to landlords. We hope that other provisions of this Bill will lead to an increase in the numbers of council flats sold. One of the problems of selling flats is the division of responsibility between landlord and new owners for service charges and common repairs. It may be that some general guidance from the Secretary of State in this area would be of help to landlords and purchasers. Before issuing directions of either type, it would, of course, be our intention to consult with local authorities.
The noble Lord's amendment proposes that, instead of the Secretary of State, the power to issue direction should be given to the sheriff. I must say that I am doubtful whether the courts would welcome this additional work. What is more, it would to my knowledge be without precedent for the sheriff to be given a general power to issue directions to local authorities let alone the public landords. Nor is it clear how the proposal is to work. Are individual sheriffs only to have power to issue directions in their own area, or are their directions to be binding across the whole of Scotland? And how are their directions to be enforced? What if different sheriffs were to issue conflicting directions? Within the realms of the court, it is not unusual to come across controversy over sentences. So what might be the result in this case can well be imagined.
It would be, I believe, a unique step to give the sheriffs power to issue directions to landlords about the general operation of the right to buy. I do not believe that such a power would be practicable. Nor do I think that it would be welcomed by the courts.
Behind this amendment, I suspect, lies a feeling that somehow the Secretary of State is taking a very remarkable and unusual power, and that he may exercise that power unreasonably. I do not accept, however, that this power is so unusual. There are other areas where the Secretary of State is empowered to issue directions to landlords on the operation of their
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statutory duties. In the housing field, the power to issue guidance on the Housing (Homeless Persons) Act 1977 springs to mind. Nor do I accept that the Secretary of State is likely to act unreasonably. If he were to, then there are procedures for judicial review of his actions.
In all the circumstances, therefore, I do not believe that this amendment would be an improvement in the present clause, and I hope that, on reflection, the noble Lord will agree to withdraw it.
Lord Morton of Shuna: As the noble Lord is no doubt well aware, if a potential purchaser thinks that a condition being imposed upon him is unreasonable he can go to the court or to the Lands Tribunal to get it put right. It seems to me entirely unnecessary that the Secretary of State should have to issue directions. However, in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
9.30 p.m.
Clause 5 [Financial and other assistance for tenants involved in proceedings under Part 1 of 1980 Act etc.]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 17:
Page 5, line 21, leave out from ("assistance") to end of line 23.
The noble Lord said: This is another of these unusual amendments. Why should I do work that the Government can do for me? Clause 5 states:
"After section 9A of the 1980 Act there shall be inserted".
I look for Section 9A of the 1980 Act and, surprise, surprise, there is no Section 9A of the 1980 Act. I presume therefore that this is in another amendment somewhere.
This point draws the attention of the Committee to the impossibility of easily understanding this Bill and its meaning. It may well be that the Government barely have time to read the briefs, and do not read them terribly well. I do not blame them for that because the lighting has become dim and I can understand the difficulties in reading the briefs. But for an Opposition, without a Civil Service behind them, to try to understand these matters is shatteringly difficult.
I am concerned that the Government are providing the power that the Secretary of State shall,
"on written application to him by the tenant or purchaser give financial or other assistance … if the Secretary of State thinks fit to do so",
and if the applicant is involved with a local authority or a housing association. The clause provides the power to give financial help and other assistance.
The clause states:
"Provided that assistance under this section shall be given only where the Secretary of State considers—>
(a) that the case raises a question of principle and that it is in the public interest to give the applicant such assistance"—
I should like an explanation of the following words—
"or
(b) that there is some other special consideration".

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Who will determine the other special consideration? Is it once again the Secretary of State? Can we be given any indication of what the other considerations are likely to be?
With regard to legal proceedings we are loading the dice on one side. We have already heard about the difficulties and how undesirable it is that the Government should give tenants money. But here they will give them money and assistance in a legal battle against the landlord. Can the Minister let us know what is in the Secretary of State's mind? Can he tell me what happened to Section 9A? Where did it come from? Where did it go? I beg to move.
Lord Gray of Contin: Clause 5 gives the Secretary of State power to assist tenants or purchasers who may be involved in legal action against their landlords on matters concerning the right to buy, but only if the case has special features; for example, because it raises a question of principle and it is in the public interest that the tenant should be given assistance.
The clause is not a general power for the Secretary of State to get involved in litigation between tenants and their landlords on individual house purchasers. Where disputes of this type arise there are adequate remedies in the Tenants' Rights Act 1980 and at common law. There can be cases, however, which give rise to issues of principle, concerning the interpretation of the Tenants' Rights Act 1980 and where possibly tenants might be unwilling to proceed without assistance; for example, because they do not qualify for legal aid and are concerned about the possible costs. In those circumstances the Secretary of State may judge it in the wider interest that the case should proceed in order to have the principle which is in dispute resolved. It may be that he would judge it necessary to give assistance to the tenant in order to bring this about. Clause 5 gives the Secretary of State a reserve power, therefore, to intervene in these limited circumstances.
The clause inserts a new Section 9B into the 1980 Act. Section 9A was inserted by the Housing Defects Act 1984, Chapter 50. I shall refer to the matter later. Section 9B(1) sets out the power of the Secretary of State to give assistance, provided he considers either that the case raises a question of principle or that there is some other special consideration. The words, "some other special consideration" provide, as it were, a safety net because we cannot at this stage predict all the circumstances in which the Secretary of State might judge it necessary to exercise this power.
I have described the main circumstances in which we think it likely that the power would be used, and I have emphasised that it is a reserve power which the Secretary of State intends to use sparingly. The important point is that the case should have special features, in the sense that it raises a matter of public interest, or has some other special consideration. This is a fairly standard phrase and I do not think that there is anything sinister to be read into it. If Members of the Committee are interested in precedents, then they will find closely similar wording in both Section 75 of the Sex Discrimination Act 1975, and Section 66 of the
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Race Relations Act 1976; both excellent pieces of statute which were, as I recall, introduced when the noble Lord was in office.
Subsection (3) lists the type of assistance which the Secretary of State may give. We envisage that this would most likely take the form of financial assistance. But provision is made so that the Secretary of State may give assistance in the form of arranging for legal representation for the applicant, possibly in the form of advice, which could be advice from his own department. It seemed to us sensible that the forms of assistance which might he given should be drawn fairly widely.
I hope that, in the light of my explanation, the noble Lord may be prepared to withdraw his amendment.
Lord Ross of Marnock: The noble Lord eventually came round to giving an explanation of the words:
"or (b) that there is some other special consideration".
As I understand it, his explanation is that there may well be some other special consideration. In other words, he just repeated the words that are already in the Bill and for which I sought a justification. However, he then tells me that they are well-founded; they are in the Sex Discrimination Act 1975 and the Race Relations Act of, I think, 1979. The noble Lord said that I should know about them because I was in office at the time. With all due respect, I was not in office as regards the second Act. It might have seemed like it, but I was not in office. I do not think that there is very much to justify a comparison with the powers given to somebody else—not to the Secretary of State for Scotland—in either of the Acts, whether or not I was in office.
We are discussing a very considerable power. As I have said, I can understand it if there is something which is fairly obviously a matter of principle. There may be defective drafting in this particular Bill. I would not be the slightest bit surprised if there were defective drafting in the Bill. It will he for the courts to sort out the matter, and the Secretary of State would naturally want to come in on the side of the person who thinks—and who the Secretary of State has led to think—he has a right to buy. However, with all due respect, the phrase, "other special consideration" is rather vague. When it involves the Secretary of State taking sides in a legal battle, we require a little more justification than we have had at present.
I understand the difficulties of the Minister of State in this regard. This is not a subject in which he is well versed; and it may fall much more in the field of the noble and learned Lord the Lord Advocate, rather than the Minister of State. It may well be that at another stage he will be able to give us a better explanation than he has given today. Quite frankly, he has not given us any at all. He just repeated the words that are there. I should have thought that perhaps he might have been able to produce something new.
It is not good enough to have this so-called safety net where no one is ever going to be able to do battle against the Secretary of State and win. He has this safety net where he can come in with all the power of

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the state against somebody who is being beleaguered. It may well be one of these small housing associations in Glasgow, in Edinburgh or somewhere else in Scotland, and it may find that instead of one of the tenants it is up against the Secretary of State. It is not good enough to put this in just like that and say, "Well, it is a safety net". A safety net for whom? It is a safety net purely for the Secretary of State.
We should have left it in the first instance that "the case raises a question of principle and that it is in the public interest to give the applicant such assistance". After all, even in that definition, whch we are prepared to accept, it is the Secretary of State who decides that. I do not think that we have had an adequate explanation yet of this line and a half of print.
The Deputy Chairman of Committees: Is the noble Lord withdrawing his amendment?
Lord Ross of Marnock: Not yet. If there is no explanation forthcoming, I can only presume that there is no explanation. If there is no explanation, then the words should not be here. We are prepared to be persuaded that the Government are right, and yet we get no words at all from them. This is new to Scottish legislation. We have not got such a safety net yet for the Secretary of State. If we let it in this time we shall get it in legislation time and time again, and they will be referring back to the Housing (Scotland) Act 1986, which the House accepted with acclamation; without objection.
There will probably be some objection. If the Minister cannot give me an explanation now, I am prepared to withdraw the amendment and put it down for the next stage of the Bill. That will give him time to get on with it, and I hope that the light will be better so that he will be able to read it a bit better when we get that explanation. In the meantime, it is obvious that I shall need to withdraw the amendment.
Lord Hughes: Before my noble friend withdraws his amendment, as I gathered he said he might do, may I say that these words, which are preceded by the word "or", would seem to indicate that the provision is intended to deal with a matter which is either a question of principle or in the public interest? The very least that the Minister should do is to give an undertaking to my noble friend that he will show how these words can be applied in a way which includes both the public interest and a matter of principle. At the moment it sounds as if it is an alternative.
Lord Gray of Contin: I can clearly see what noble Lords opposite are trying to do. However, I shall try to explain again for their benefit a little more slowly and a little more clearly in the hope that they will understand. The clause inserts a new Section 9B into the 1980 Act.
Lord Ross of Marnock: That we know.
Lord Gray of Contin: It did not sound from what the noble Lord said that he did. If he knew, he certainly did not understand. Subsection (1) sets out the power of the Secretary of State to give assistance.
Lord Ross of Marnock: It is nothing to do with subsection (1).
Lord Gray of Contin: If the noble Lord wants to make yet another speech, I shall give way to him, but muttering there from a sedentary position is no help to anybody.
Lord Ross of Marnock: The amendment is to leave out certain words. It has nothing to do with subsection (1). It has nothing to do with subsection (1)(a). It is related purely and simply to the words:
"or
(b) that there is some other special consideration".
That is all. I want an explanation just of that. I know what subsection (1) says, and I agree with it. I know what it says in subsection (1)(a), and I am prepared to accept that. I am asking for an explanation purely and simply of the words,
"that there is some other special consideration".
and nothing else.
9.45 p.m.
Lord Gray of Contin: The noble Lord has already had that explanation, where I dealt specifically with the words "some other special consideration" providing, as it were, a safety net. That is a term which the noble Lord did not like, but it is not unusual to have a safety net of this kind in legislation, as the noble Lord knows perfectly well, because nobody can predict at this stage all the circumstances in which the Secretary of State might judge it necessary to exercise this power. It is for that reason that that form of wording is applied.
I described the main circumstances in which we think it is likely the power would be used, and I emphasised that it is a reserve power which the Secretary of State intends to use sparingly. I then went on to explain that the important point was that the case should have special features in the sense that it raises a matter of public interest or has some other special consideration. I should have thought that what I have explained was really self-evident. What I have said covers the situation where special circumstances may arise which are not covered by subsection (1)(a) but where the Secretary of State may nevertheless judge it appropriate to assist.
I have made that as clear as I think it is possible to make it, and I cannot give the noble Lord any more explanation than that. In view of what I have said, I hope he will now be prepared to withdraw his amendment. Whether he returns to it at a later stage must be for the judgment of the noble Lord.
Lord Hughes: In putting myself in danger of being regarded by the Minister of State as being of inferior

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intelligence, which was what he seemed to imply, I asked him a question, and he has not answered it. My question was: Does "that there is some special consideration" mean that a question of principle has not arisen, or that it is not in the public interest? Normally if the one is going with the other the word joining them together would he "and", not "or". The word "or" is an alternative. What is the answer to that? If it is necessary for me to repeat it and keep on repeating it until he gets the relevant note, I am quite happy to do so. In the hope that what he has now been given will enable him to answer the question, I shall sit down.
Lord Morton of Shuna: If I can also add myself to those whom the noble Lord, Lord Gray, considers cannot understand what is written, surely the Secretary of State is only interested, or should only be interested, in this matter in questions of principle which are in the public interest. If something is not a question of principle and not in the public interest, what special considerations are there which would justify the Secretary of State doing anything?
Lord Gray of Contin: I am sorry, but I really am not going to bore the remainder of the Committee by going over yet again what "some other special consideration" might be. I have explained it twice already, and if noble Lords are not prepared to accept that explanation all I can suggest to them is that they read Hansard tomorrow and study this again, because it is crystal clear.
Lord Hughes: It will not make a halfpenny worth of difference reading it tomorrow. The Minister of State is refusing to tell us whether in applying (b)—there is some special consideration—it does not cover a matter of principle or it is not in the public interest. All I am asking is: does he mean that the special consideration must be in addition to the matter of principle, or in the public interest; or can it apply when either one or both of those does not apply? Can he answer that now? He has had at least three notes from the Box. Surely they at least are capable of providing an answer to a question.
Lord Gray of Contin: The best I can do is to supplement the great amount of information which I have already given to him. I am not suggesting anything about the noble Lord's intelligence; he did this job and I remember him doing it very well indeed, so he must not feel so sensitive. If he feels sensitive he should sit here for a while.
Lord Hughes: I should be delighted, provided that noble Lords presently there had left.
Lord Gray of Contin: This provision could allow the Secretary of State to assist in cases that do not give rise to issues of principle but have other considerations. It is not only issues of principle. It could apply where other considerations occur. I have already spelt out
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those other considerations loud and clear. I have answered the noble Lord's point, I think.
Lord Hughes: At last!
Lord Gray of Contin: At last?
Lord Hughes: I thank the Minister for confirming that.
Lord Ross of Marnock: In view of that lengths and repeated explanation that took us nowhere, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No 18:
Page 5, line 34, leave out paragraph (a).
The noble Lord said: The purpose of this amendment is to leave out "giving advice" from line 34. All I want to know is this. I do not want the whole clause explained at this late hour of the night. All I want is an explanation of "giving advice". We are talking about legal proceedings.
Lord Gray of Contin: I am grateful to the noble Lord for giving way, but this is the point that we had earlier. This is part of an agreed grouping. This amendment has already been spoken to with an earlier amendment.
Lord Ross of Marnock: Nobody said a word about this amendment. Nobody said a word about the last amendment that the Minister queried. Amendment No. 4 was the head of the group and the person moving that amendment should have said that we were discussing this along with the other eight or nine.
Lord Gray of Contin: I did.
Lord Ross of Marnock: No, with due respect the Minister did not mention any of the others at all. I have a good memory for what is said or not said, even when it is said from a sedentary position and even when it is not reported in Hansard.
I should like to know what kind of advice the Secretary of State will give. It is not usual for the Secretary of State to give legal advice and it must be legal advice of some kind when he is intervening in legal proceedings. It might be non-legal language; it might be very rude language, but we should remember that we are dealing only with special circumstances.
I should have thought that the best thing for the Secretary of State to do would be to get in touch with his law officer and pass over the giving of advice on a legal matter to a legal department. I know that there are lawyers in the Scottish Office, but I do not think this is desirable. I should have thought that the place for advice to be given is under legal aid, rather than for the Secretary of State to give all this under (a), (b), (c), (d) and (e).

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This is strange, but I do not see why giving advice, separate from
"arranging for the giving of advice or assistance by a solicitor or counsel"
should be specially mentioned. I beg to move.
Lord Gray of Contin: Subsection (3) lists the type of assistance that the Secretary of State may give. We envisage that this would most likely take the form of financial assistance, but provision is made so that the Secretary of State may give assistance in the form of arranging for legal representation for the applicant, possibly in the form of advice which could be advice from his own department. It seemed to us sensible that the forms of assistance which might be given should be drawn fairly widely.
Again, there is nothing sinister in this and similar wording will be found in both the Race Relations Act
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and the Sex Discrimination Act to which I referred earlier. It could be legal advice but that would more likely be covered by subsections (3)(c) or (3)(d). Advice under subsection (3)(a) might be in the form of, say, maps or other information which the Secretary of State has in his possession. That is the purpose of subsection (3).
Lord Ross of Marnock: Bearing in mind that this is something of high importance, raising a question of principle or some other unspecified special consideration, I should have thought that maps would hardly enter into it. I just cannot see it. I think we had better return to this. I suggest that the Government look at this and also at paragraphs (a), (b), (c), (d) and (e). In the meantime, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Information from landlords in relation to Secretary of State's powers under Part I of 1980 Act]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 19:
Page 6, line 36, leave out subsection (2).
The noble Lord said: This amendment is to leave out subsection (2) of Clause 6. This subsection says:
"Any officer of the landlord designated in the notice"—
that is the notice given by the Secretary of State—
"for that purpose or having custody or control of the document or in a position to give that information shall, without instructions from the landlord, take all reasonable steps to ensure that the notice is complied with".
That may be all right for a local authority; but has the Minister really considered what happens in a housing association if the provision refers to "any officer of the landlord"? Who—the office boy? What is going to happen? Surely an organisation such as a housing association, a committee in effect, has to have some power of deciding whether to comply or refuse to comply and seek judicial review. It is a very wide-ranging power to say that an officer, any officer, chosen apparently by the Secretary of State in his notice, shall have to do things without reference to his employers. It is a very wide, deep power and there seems to be no necessity for subsection (2). I beg to move.
Lord Gray of Contin: Clause 6 gives the Secretary of State a power to require information from public landlords, where it is necessary in relation to the exercise of his power under Part I of the 1980 Act; that is, under the right to buy. This power is necessary in consequence of Clauses 4 and 5 of this Bill. Clause 5 of the Bill gives the Secretary of State power to give assistance to tenants involved in court proceedings. However, before deciding whether it would be appropriate to exercise this power, it may well be that the Secretary of State will require to obtain certain information from the landlord. Clause 4 of the Bill provides that the Secretary of State may give directions as to conditions included in offers to sell. Again, it may be necessary for the Secretary of State to obtain information from landlords concerning such offers, in order to decide whether it would be appropriate to issue directions.
Subsection (2) provides that any officer designated in a notice served by the Secretary of State and who is in a position to give information shall, without instructions from the landlord, take all reasonable steps to ensure that the notice is complied with. I regret that this provision is necessary. We have, however, had experience of a council withdrawing from its officials the delegated authority to complete, certify and submit returns required by the Government under statute. Subsection (2) is intended to avoid the possibility in future of a landlord engineering a confrontation with the Secretary of State by directing staff not to comply with a notice served under this clause.
10 p.m.
An individual officer of the landlord authority will be placed under a clear statutory duty to comply with
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the requirements of such a notice. The officer named would be likely to be a senior officer, such as a director or a chief executive. It would be unlikely that the Secretary of State would specify an office boy, as the noble Lord suggested—but I realise that he was just highlighting the point he was trying to make. That is the situation. It is sad that we need such a requirement, but I have explained the background to it and I hope that in the light of that explanation the noble Lord might be prepared to withdraw the amendment.
Lord Ross of Marnock: It is a very serious power indeed and I have no doubt that failure to comply with it will carry penalties. The Government already have powers to deal with local authorities and I would be very surprised indeed if they had not powers to deal with a defaulting local authority in this respect, or any other.
It is really an extension of their power to go ahead and get round an unwilling authority, be it a housing association or a local authority, by designating any officer in the notice. I do not know whether the Government will be absolutely right about that. They could nominate someone whom they thought was in control, but he could be easily removed from control. The Government could say, "Well, he was in control but he is no longer. He still has to do what we tell him and give us information behind the back of the local authority"—and it may well be against the will of the local authority.
It is much more likely that the Government will be able to say, "This man has information and he must divulge that information to us". What happens if the man says, "I have not got the information", or, "I have forgotten the information"? What are the penalties? This is a new and serious power—to go behind the back of a local authority to an officer of that authority who may or may not have the information. He is much more likely to have information but not to have actual control of the documents.
I am not entirely happy that the Government need to take this power. I am perfectly sure they could do it in some other way, directly with the local authority, rather than descend to the business of naming an individual who is a municipal servant or a servant of the housing association. I think it is deplorable. It may be all very well for the Minister of State to say that it has happened with one local authority. I do not think it has happened in many cases among all the authorities and among municipal servants sufficiently to justify this action, bearing in mind that I am perfectly sure the Government have got other powers. They may not be quite so handy and they may not be quite so easy to wield as this new power that is given; but I think there is a considerable danger in taking this kind of power, particularly in respect of individuals. I think it is a grave departure from our usual relationship with municipal servants that they should be submitted to this kind of situation. I hope the Government will think again about it.
Lord Gray of Contin: I note what the noble Lord has said. As he pointed out, he is quite sure that the Secretary of State has other powers which he could use

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so far as this is concerned. That is quite true. The Secretary of State already has the power under Section 199 of the Local Government (Scotland) Act 1973 to require authorities to give him information. That power, however, is limited to local authorities and would not cover housing associations. The new power under Clause 6 goes wider in that it extends to all right-to-buy landlords. At the same time, it is more limited in being confined to matters arising out of the right-to-buy provisions. The noble Lord is right. There is that 1973 Act power, but that would cover only local authorities. I hope that I have explained that point.
Lord Morton of Shuna: It is unsatisfactory legislation even if it is necessary. What do you do if you are the employee of a housing association and you are told that you will get the sack if you comply with the order? What sanction does the Secretary of State have? There is no penalty under the Bill. It is unusual to place an obligation on someone to obey the law when there is no penalty. Is the housing association or the individual to be fined? We can deal with the local authority under the 1973 Act but there is no penalty here. The noble Lord would be better to take away this clause and consider where it is leading.
Lord Gray of Contin: If a named person cannot comply because he genuinely does not know, he cannot be in default of the statutory requirement.
Lord Morton of Shuna: What happens if he is in default? Where is the penalty? It is unfortunate that when the Secretary of State has power to issue orders anyone in Scotland can defy him because no penalty can be imposed. It is odd legislation.
The Deputy Chairman of Committees: Is the noble Lord withdrawing the amendment?
Lord Morton of Shuna: I was hoping for an answer. Is there any penalty on the defaulting officer who is not employed by the local authority?
Lord Hughes: While the noble Lord the Minister is waiting for the requisite information to be transmitted across the Floor, perhaps I may ask him a question on a different point. The words that present me with difficulty are:
"without instructions from the landlord".
What is obviously intended by what the noble Lord the Minister said is that the officer concerned does not have to seek instructions from the housing association about giving that information. What happens if when he receives the order he is in possession of instructions from the landlord which are, "Do not give this information"? Does that person have a get out if he can say to the Secretary of State, "But I am not without instructions from the landlord"?
Lord Gray of Contin: The point which the noble Lords, Lord Hughes and Lord Morton, have made is open to question. There is no power against an individual. The power would be against the authority.
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I am prepared to take back this point and look at it, as suggested by the noble Lord, and we can perhaps return to it at a later stage.
Lord Morton of Shuna: It is always surprising but pleasant to have some sign of movement from the other side. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clauses 7 to 11 agreed to.
Schedule 1 [Amendment of 1980 Act]:
The Deputy Chairman of Committees: Before I call Amendment No. 20, I must inform your Lordships that there is a misprint in the wording of the insertion which in line 4 should read "of" instead of "if". I am also bound to say that if Amendment No. 20 is agreed to, I cannot call Amendments Nos. 21 or 22.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 20:
Page 21, line 51, leave out from beginning to end of line 12 on page 22 and insert—

(" (i) the rules of the landlord, registered in terms of section 9 or 10 (registration of rules) of the Industrial and Provident Societies Act 1965, are such as would admit of a claim for, and a grant of, exemption from tax under section 360(1) of the Income and Corporation Taxes Act 1970 (special exemptions for charities); and

(ii) such exemption has been granted (whether or not retrospectively) and is in force; or")

The noble Lord said: I understand that on the groupings—and perhaps for the first time the groupings had better be mentioned, for we did not hear the noble Lord, Lord Gray, mention Amendment No. 4 when he was speaking to various others—I am supposed to be speaking to Amendments Nos. 20, 21 and 22. These amendments come at a very late stage, and it is very unfortunate, when the Committee is sitting late, that this crucial series of amendments should be dealt with at this time.
For some reason the Bill provides that charitable status should apply to housing associations only if they had charitable status from 3rd October 1980. The reason for that date is unclear. Presumably, it is the date of the order bringing in the Tenants' Rights, Etc. (Scotland) Act, which did not apply to housing associations anyway, so its purpose is vague. There is no reason why a charity formed on 4th October 1980 should not get the same benefit as those formed earlier.
There are charities which have been re-arranged since, and, therefore, will not get the benefit. For example, the Servite Housing Association operated long before 3rd October 1980, but it promoted a separate Scottish association which took over its property. It is clearly a charitable organisation. If the parent had not formed a separate Scottish association, its Scottish property would be exempt. But just because of the separation its property is now not exempt. The Kingdom Housing Association was formed before October 1980, but was not registered until after that date. The same situations apply with the Edinburgh association, the Grassmarket Housing Association, to which the noble Lord, Lord Mackie of Benshie, has spoken, because this became charitable after October 1980.
Why is this date chosen? What is the opposition to Amendment No. 21, which would make subparagraph (i) read,
"the landlord has claimed and been granted … under section 360(1) of the Income and Corporation Taxes Act … (special exemptions for charities)"?
What is wrong with that? What is special about 1980?
Similarly, another way of approaching it would be by Amendment No. 20, under which an association's rules are such that it is admitted to exemption from tax under the Act. Amendment No. 22, in the names of the noble Earl, Lord Selkirk, and the noble Earl, Lord Perth, leaving out "3 October 1980," is to the same effect. We have had no explanation as to why 1980 is chosen. I beg to move.
10.15 p.m.
Lord Gray of Contin: I think I might come in at this stage, because what I have to say on this amendment may be helpful to the Committee at this late hour and save time in dealing with this amendment. The excellent work done by the housing associations which operate as charities in Scotland is recognised on all sides of the Committee, and it has been suggested that this work might be impaired by the provisions of the Bill.
Exemptions from the right to buy have to be very carefully considered. When it was brought in in 1980, housing association tenants were excluded because of fears that the development of the housing association movement in Scotland, then not long out of its infancy, might he harmed.
Six years on that is not the case. Now we are extending to tenants of housing associations rights that have been enjoyed by their public sector neighbours for many years. And here is the crux of our present difficulty. There is no reason why tenants of housing associations, which are in most other respects very similar to their local authority tenant neighbours, should be excluded from the right to buy simply because of the constitutional nature of their association. We are therefore concerned to ensure that the right to buy is extended to as many people as possible while, at the same time, protecting the stock of houses required for special needs. However, we recognise that some associations in Scotland that operate under charitable rules and have charitable tax status have considerable stock of both kinds, were set up in a way which did not allow for the introduction of the right to buy, and would now be placed in difficulty if the right to buy were applied to them.
For those reasons the Bill now exempts from the right to buy associations that were formed on a charitable basis and have enjoyed charitable tax status since 3rd October 1980. Amendment No. 20 would, in its first part, remove the requirement that an association should have formed under charitable rules and would allow associations to change their status to that of a charitable association at any time. Clearly that has potential as a device to avoid the right to buy and is unacceptable. Any association that has any serious intention of operating in the charitable field will have formed itself with rules appropriate to that function. Associations that form in the future to carry out some function for which charitable status would be appropriate will almost certainly be operating in the
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field of special needs and here, as your Lordships' Committee knows, special needs stock is exempt in its own right.
The other two amendments proposed by the Opposition Benches and my noble friend would remove the requirement to have obtained charitable tax status by 3rd October 1980. We recognise that that requirement is probably more restrictive than it need he and a small number of associations that formed with charitable rules but did not approach the tax authorities until some later date have been unnecessarily excluded.
In addition, there is a similar small number of associations again having formed with charitable rules which may not even now have approached the tax authorities but may be able to gain tax exemption on a retrospective basis as provided for in the Bill. We therefore have it in mind to bring forward at Report stage an amendment to alter the date for tax status from 3rd October 1980 to 14th November 1985, the date of introduction of the present Bill. We believe that that amendment, if agreed to, would admit a further four associations to the exemption from the right to buy and enable the others who have as yet not considered their tax status to review their position.
It is not easy to see that any further easing of the requirements for exemption from the right to buy for charitable housing associations is necessary or desirable. Associations that we would all regard as having worthwhile charitable objectives do so because they are dealing with the housing of less favoured members of society and for them it is the nature of the stock that determines their exclusion from the right to buy. The present form of the exemption, taking account of both charitable status and special needs stock, is likely to exempt more than 14,000 tenants from the right to buy out of a total housing association stock of some 37,000. Many people whose landlords are housing associations with charitable status will already feel aggrieved that their rights have been taken away simply because of the legal nature of their landlords; I doubt that any wider exemption would be acceptable to such tenants.
I invite noble Lords on both sides of the Committee to withdraw their amendments on the understanding that I will bring forward an amendment of the type that I have promised at Report stage.
Lord Taylor of Gryfe: I have here a brief from the Scottish Federation of Housing Associations. One comment which it makes concerns exemption. I am delighted to hear that the date is to be amended on Report. However, the association makes the very strong point that charitable housing associations which are registered in England and Wales but which operate in Scotland will be exempt. Because of the incompatability of Scottish legislation with English legislation this suggests that an anomaly will arise. Is this true, or will this also be taken care of when the Minister looks at the dates for exemption prior to the Report stage?
Lord Hughes: What the Minister has just said is very important but until we see the nature of the amendment we do not know how valuable it will be. It

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would not be much use to us to receive details of the amendment only two or three days before Report stage. Will the Minister therefore accept that it is desirable—indeed, more than that, it is absolutely essential—that those of us who are particularly interested in the housing association movement should have ample opportunity to look at the amendment to work out its effect on associations before we are asked to divide on it?
Having said that, I must declare an interest. I am president of the Scottish Federation of Housing Associations. The noble Lords, Lord Mackie of Benshie and Lord Campbell of Croy, are both vice-presidents of the federation. I am certain that we should be placed in a impossible position if the federation were to phone us, for example, the day before we are to vote on the amendment to say that it had just learnt of the amendment and to give reasons why it felt that it is half a loaf but better than no bread, or that is is desirable or that it is rotten.
I am not asking that the Minister give this information specially to the noble Lord, Lord Mackie of Benshie, and myself but that it should be published early enough for all who are interested in the matter to have the opportunity to discuss it if necessary. Will the noble Lord undertake to do that?
The Earl of Perth: What we have heard from the noble Lord, Lord Gray, is very important. However, I am not entirely happy that it goes as far as he wants. I say that because, as I understand it, there will still be a difference between the practice in England and Wales and the practice in Scotland, If that is right, I wonder why.
At Second Reading the noble Lord, Lord Gray, said:
"it is wrong to suggest that the Bill prevents the formation of any new charitable housing associations in Scotland".—[Official Report, 18/3/86; col. 946.]
With great respect, even on the basis that the noble Lord has told us there is to be an amendment on Report, that statement is wrong. How can I form a new charitable association for housing if I know that shortly afterwards (the date we were given is 14th November and "shortly after" may be five or six years) the tenants will have the right to buy and that they can buy at a considerable discount?
If I understand charitable law correctly, I think that means that the Inland Revenue would not accept that it was a charitable body. Therefore, as I read this, we are still not where we want to be. In England and Wales charitable housing associations, without any cut-off date, are allowed to carry on, whereas in Scotland that is not to be the case. I do not see the reason for that. I am afraid that the noble Lord is not right when he says that it is wrong to suggest that the Bill prevents the formation of any new charitable housing associations in Scotland for the reasons that I have given. While I am delighted that he will take this amendment away and help in a considerable degree, I beg that he will go even further if the points I have made are correct.
Lord Mackie of Benshie: I shall not detain the Committee for very long. I appreciated the Minister's arguments that any new charitable organisation would
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indeed almost certainly be formed for some special purpose and have some special equipment or special buildings which would exclude it from the necessity to sell houses under the Act. But it is quite possible, and in fact entirely probable, that some proper charitable association could be formed that had houses which did not conform with the regulations required to put them outside the Act. Therefore, I welcome his promise to look at this point again. I think it is necessary that he should look at all aspects of the matter, because it is a very imporant point and the anomalies between Scotland and England are quite unbearable, particularly where charities may operate in both countries.
Lord Morton of Shuna: I think that the best thing I can do is to withdraw these amendments at this stage and wait and see. I must say that I think there are difficulties in the date of publication of the Bill. It may be that it should more properly be the date that the Bill is passed, because that might be more suitable.
There is also a difficulty with the type of charitable housing association that one hopes will be formed in the future, for example, to accommodate people coming out of mental hospitals at their half-way stage, where the whole purpose is that they should be living in ordinary housing with ordinary people. If ordinary people are to have a right to buy, it rises a very great difficulty in that kind of charity running its organisation. But at this stage I beg leave to withdraw the amendment.
Lord Gray of Contin: Before the noble Lord withdraws his amendment, one or two points were raised which perhaps I may answer. The noble Lord, Lord Taylor, asked me about housing associations which are registered with the Charity Commissioners in England. Housing associations which are registered with the Charity Commissioners in England will be exempt from the right to buy in Scotland, to ensure that each single association is treated in the same way both north and south of the Border.
The noble Lord, Lord Hughes, asked me about the timing of the amendment. The amendment will substitute "14th November 1985" for "3rd October 1980" and it is doubtful whether any consequentials will be necessary. However, I have taken note of what the noble Lord has said and I shall see that officials table the amendment in as good time as possible.
The noble Earl, Lord Perth, suggested that the amendment would prevent the formation of new charitable associations in Scotland. It is true that any new charitable association in Scotland would lose its charitable tax status if its stock were eligible for the right to buy, but associations whose stock is for special needs—and most new charitable associations will be in this category—will have their stock exempt for that reason; in other words, by virtue of the physical features of the houses.
The other point raised by the noble Lord, Lord Morton, and other noble Lords was that Servite comes into the exemption under the concession that I shall be making. I thank the two noble Lords for their albeit qualified acceptance of what is on offer. I cannot expect more because they will have to study this issue

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and see the amendment. I am grateful to the noble Lord, Lord Morton, for agreeing to withdraw his amendment.
Lord Morton of Shuna: Now that I have permission to do so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 21 not moved.]
10.30 p.m.
The Earl of Perth The Earl of Perth moved Amendment No. 22:
Page 22, line 1, leave out ("from 3rd October 1980,")
The noble Earl said: I wish to move the amendment, although I shall afterwards withdraw it, because I remain unhappy about the remark of the noble Lord, Lord Gray of Contin, that most charitable organisations would qualify for different reasons. Why only "most"? Why not all? Why are we in Scotland to be treated in a different manner to England? Why should there exist an anomaly whereby, if I start a charitable housing association in England, set up one house there and then devote all my attention to Scotland, I get away with it? I hope that the noble Lord, Lord Gray, will look at this in the broad and realise that it is not enough simply to have a date. Let us get rid of the date! Let us accept that charitable housing associations, be they in England, Wales or Scotland, all enjoy the same advantage. Without that, for the reasons given by several noble Lords, we are in a mess. A great deal of unhappiness will be caused. We shall not be able to set up new charitable housing associations in Scotland, and that will not do. I do not know whether anyone else wishes to make a comment on the amendment, but before withdrawing it, I shall wait and see.
The Deputy Chairman of Committees: Is the noble Earl moving the amendment? He spoke to it earlier but he has not moved it.
The Earl of Perth The Earl of Perth: I am sorry. I move Amendment No. 22.
The Earl of Dundee: I should like to support the remarks of the noble Earl, Lord Perth. There are surely two important reasons why the existing draft regarding charitable status should be amended. First, there is the case in itself already recognised and already the law in England and Wales that properties of associations which are charities should be exempt from the right to buy. Secondly, there is the need to prevent the anomaly whereby this is now accepted in England and Wales but would not be in Scotland except in regard to associations that had existed before October 1980, although, as my noble friend the Minister now says, there would be a different and more generous date.
There are obvious differences in overall numbers and in percentages of association charities between Scotland and England. Arising from a comparison, it might always be that the useful purpose and functioning of Scottish housing associations would not necessarily appear to suffer as and when Scottish association charities were depleted in number. However, would my noble friend the Minister not agree that arising from such a comparison, the reverse is in fact the position? The different numbers and
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proportions in Scotland would surely suggest that it is sensible to exempt housing association charities even if England and Wales had not done so. Conversely, there is surely all the more reason for so doing, given that England and Wales have now done so.
Lord Gray of Contin: The noble Earl, Lord Perth, asks for the date to be done away with and for all charities to be exempt. I am afraid that this cannot be done. To make such a broad exemption would open the way to what would be no more than a device to avoid the right to buy provisions. The whole objective of the legislation is to make sure that the right to buy provisions are extended to tenants of housing associations in the same way that they are, and have been, available to local government tenants. We have been talking about that matter all evening.
In England, the stock of housing is basically special need. Therefore, by virtue of its type, it is exempt. This is why I said to the noble Earl, Lord Perth, and I repeat to my noble friend Lord Dundee, that it is true that any new charitable association in Scotland would lose its charitable tax status if its stock was eligible for the right to buy. But associations whose stock is for special needs—and almost all of them would be in this category—will have their stock exempt for that reason. That is by virtue of the physical features of the houses. That would exempt them.
But the noble Lord is correct that the amendment I shall make will not apply across the board. But it will extend very substantially those charitable associations which will be eligible.
Lord Hughes: The Minister is giving as his reason for not doing what the noble Earls, Lord Perth and Lord Dundee, are asking that it would be an opportunity for associations to be formed for the purpose principally, or perhaps solely, of avoiding the right to buy. Where this position exists, in England is there any evidence—perhaps even where there are local authorities which the Government dislike because of their attitude to sales—that any housing association of the kind that he apparently fears could be created in Scotland has been created south of the Border?
Lord Gray of Contin: Not to my knowledge, hut I could not answer that question without checking my facts. However, this is something to which we can return at a later date.
Lord Hughes: The Minister will investigate to find out whether there is what he would regard as a fraudulent housing association? Let me put this another way. He will investigate to find out whether there is a housing association formed for what he would regard as a fraudulent purpose?
Lord Gray of Contin: The noble Lord must not put words in my mouth. He asked me a question to which I am not able to give him the answer at the present moment. I have said to the noble Lord that we can return to this when we are discussing the matter at a later date. In the meantime, I shall try to find out the situation for him.
Lord Ross of Marnock: Surely at a later date one of the things we shall do is to remove this reference to the date, 3rd October 1980? Why do we not do it now, and then let us argue about what other date will be put in? That would be an earnest of the Government's good faith. Then all they would have to do thereafter would be to convince the Committee that the Government's new date is the right date.
I think that the important matter is to get rid of the reference to 3rd October 1980. The Government say that they have to do that anyway. They want to do that at a later stage. May I suggest that the Government do it now and then put in their idea of a new date later on? We can then see whether or not it is worthwhile. But I think that it would be worthwhile testing the Government's good faith on this as to whether they want to take out "3 October 1980". But that depends not upon me but upon the noble Earl, Lord Perth.
Lord Taylor of Gryfe: The date is important and the noble Lord, Lord Ross of Marnock, has made that point. But even more fundamental is the matter raised by the noble Earl, Lord Perth. It is the fact that the legislation affecting Scotland will be different from the legislation in England. That is a rather fundamental point which might also be tested.
Lord Gray of Contin: I feel that I have been very fair to the Committee tonight. I have made a very reasonable proposition. I wonder whether it is worth making concessions at all. I sometimes think that it is better to put one's head down and drive on because when one makes a concession all that happens is that people come back and say, "That is not enough, we want twice as much again".
Lord Hughes: I shall not be long. I would suggest to the noble Lord that the worst possible thing to do is to put one's head down and drive on. There comes disaster.
Lord Gray of Contin: I have no intention of doing that anyway, the noble Lord will be glad to hear. I have made a suggestion. The noble Lord, Lord Morton, has withdrawn his amendments. I hope that the noble Earl, Lord Perth, will agree to withdraw his amendment. We shall table our amendment in plenty of time. The House will have an opportunity of studying it and of consulting about it, and we can return to it at a later stage. I am not prepared to accept the guidance of the noble Lord, Lord Ross of Marnock, on this occasion. We shall deal with the matter in our amendment.
The Earl of Perth: I have listened to the exchange which has taken place and I am very grateful to the various noble Lords who have spoken in support of the amendment. I do not think at this late hour that it would be right to test the will of the Committee. However, I feel very strongly that before the Report stage the noble Lord, Lord Gray, should find a reason—which I certainly cannot imagine—why Scotland should be treated differently from England and Wales. The noble Lord says that we might misuse our rights, whereas the English and the Welsh do not do so. I am very unhappy with that argument. I hope
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that the noble Lord will do the same for us as has been done by the Government in respect of England and Wales.
I recall, too, that on this issue in respect of the English and Welsh Housing Bill the Government suffered perhaps one of the greatest defeats that they have ever suffered. Scotland is small by comparison, but the principle is the same. I trust the Scots. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: Before I call Amendment No. 23, I have to inform your Lordships that Amendment No. 23 has been misprinted and should read: "Page 22, line 14". I therefore propose, subject to your Lordships' agreement, that we should take it after Amendment No. 24. I therefore propose to call Amendment No. 24, but before doing so I have to inform your Lordships that if Amendment No. 24 is agreed to, I cannot call Amendment No. 23. I call Amendment No. 24.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 24:
Page 22, line 14, leave out ("(not exceeding 14)")
The noble Lord said: I did not propose to move Amendment No 23 anyway. I suggest to the Committee that, together with Amendment No. 24, we should also discuss Amendments Nos. 25, 26, 27 and 29. This group of amendments may seem rather complicated, but it is quite simple. The amendments are designed to give greater flexibility to housing associations and to allow them to cater more adequately for groups within the community.
The original reason for Amendment No. 24 was the limit of 14 houses. That triggered the idea that there was too much rigidity in the whole scheme. In general, although the Government have accepted the principle that there should be houses for people who require special treatment, they have hedged it round with so many safeguards that any initiatives as regards housing for care are greatly limited. The type of definition which the Government introduce is bound to place severe and irrelevant restrictions upon the development of community care initiatives which could be managed according to the needs of the people involved. For instance, one of the amendments which we are dealing with in this group concerns young people. The amendment suggests that the provision should read:
"young persons in need of care or support",
instead of merely referring to young people who had been previously in the care of local authorities. We know that the experience of housing associations working with young people is that many young, single people need social support because they come from a family background which has had a disruptive influence on their development. As they develop into young adults they are as much in need of supported housing as the young people who have previously been in local authority care.
The same applies to older people in the community; the elderly persons in the community who are in need of care and support. The new category proposed in Amendment No. 27, category IV, would allow for

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elderly people in need of care and support. Disabled people and those who need support in their youth, their old age or during any difficult or traumatic period in their life require a supportive community.
Housing associations are in the forefront of new developments in caring for and supporting people in their own homes. Many of these schemes need not only a home for the person with special needs but also a supporting network around them. The sale of houses from housing association stock will lead to a degeneration in care of those most in need. Therefore, we suggest that more flexibility should be brought into the whole question of the number of houses within a group that can be used for those in need of care before the houses become eligible for sale.
We also suggest that, rather than leave a figure of 14 for the Secretary of State as a rigid limit, there should be flexibility. The Secretary of State should be able, as he sees fit, to nominate a limit above 14, but of course a limit which could not be exceeded. I beg to move.
10.45 p.m.
Lord Gray of Contin: These amendments relate to our proposal in the Bill that certain housing association schemes providing neighbourhood support for people with special needs should be excluded from the right to buy. During the passage of the Bill in another place there was concern about the effect of the right to buy on housing associations providing houses for people with special needs. While we believe that the existing safeguards in the 1980 Act relating to special needs housing for the elderly and disabled are working satisfactorily—and they will be extended to cover housing associations by this Bill—we accepted that there was one type of scheme which is unique to the housing association movement and which would not be covered by the present provisions. These are schemes which provide care and support in the community for groups such as ex-offenders and the mentally disabled.
The idea is that selected tenants, who act as what are called "caring neighbours", are allocated ordinary general needs houses, but in close proximity to tenants who require some special support and for whom the ordinary tenants accept responsibility. These schemes are sometimes also known as "neighbour support schemes". We accepted that such schemes should be excluded from the right to buy, and this is achieved by subparagraph (ii)(g) of paragraph 1(f) of Schedule 1 the Bill (that is, lines 13 to 31 on page 22). I should perhaps point out that it is to be all the houses in such schemes which are excluded from the right to buy; that is, both the houses which are let to the disabled people and the houses which are let to the "caring neighbours". The exclusion relates to schemes of not more than 14 houses.
I believe that these amendments are unnecessary. In the first place we are talking about essentially small schemes. We felt it necessary to put a limit on the number of houses because we should not wish inadvertently to find that we had excluded the full stock of an association's houses simply because it included one or two neighbourhood support houses. I think it is important that it is only the houses which actually form part of the neighbourhood support service that are to be excluded from the right to buy.
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In consulting with housing associations on our proposals we concluded that the vast majority of such schemes consisted of 12 houses or fewer, and we set the ceiling in the Bill slightly higher (at 14) in order to correspond with what we understood to be existing practice and to leave associations some flexibility. With that explanation, and in view of what he himself has said, I hope that the noble Lord will feel that I have been able to illustrate that the Government gave a considerable amount of thought to this; and of course it was discussed at some length in another place as well. In view of what I have said, I hope he will be prepared to withdraw this group of amendments.
Lord Ross of Marnock: We are here dealing with quite a number of amendments, and I notice that the Minister of State did not say anything at all about No. 25, for instance. He did not mention No. 25. It is a quite important amendment and its implication would be considerable. I think he was a little unfair. If he is as reasonable as he claims, and if he does not want to be too inflexible, I do not see why he could not have accepted the first amendment and leave out "not exceeding 14" if he says the kind of housing association that he has in mind seldom has as many as that. Such associations may well have 14, 15 or 16. Indeed, at one time I had thought of 20 as being a fairly reasonable number to give the right spread. That is the amendment that was misplaced by virtue of a mistake in putting down "line 4" instead of "line 14".
I am not very happy at what the Government have done here. I know it is fairly late at night, but I can tell the noble Lord that each of these individual amendments is worth a considerable debate. The people are important; their future is important; the people doing the work of the housing associations are important.
I do not think it is giving credit to them and the work they are performing, or to the importance of the subject, that we should be here at eight minutes to eleven in an almost empty Chamber discussing the future of these matters. We did not start this today until about ten minutes to six. I do not think that is treating Scottish business in the right way. I shall certainly remember for a very long time the speech lasting twenty minutes and more that we had from the Minister of State in winding up while a few more Members were dragged in to vote for an amendment on which the Government did not want to be beaten. That is what happened. We are dealing with important matters at this time of night and not giving proper satisfaction to them. There is not a lot between us here, and I should like to think that the Government will have another look at this whole section of amendments.
I wonder what the Government's objection is to No. 24. The words look to be rather otiose but I think they are rather important words too, as no doubt the Minister of State will tell us if he now addresses himself to that particular amendment. I should like to hear what he has to say about No. 24, for instance, but 1 do not think there is very much more to go on.
Are we on No. 29 as well? No. 29 is on an entirely different subject. I do not know who grouped these amendments, but certainly anybody on our side who agreed to them did not know very much about what

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they were doing because No. 29 deals with an order on the part of the Secretary of State in regard to this matter, to amend and make changes. The amendment suggested is to increase the number of dwellinghouses under subsection (2)(g). That is the one we are discussing now. It is an entirely different point to deal with an order in regard to what is a substantial piece of legislation.
Lord Gray of Contin: I am always happy to oblige the noble Lord. I dealt with Amendment No. 24. I dealt with Amendments Nos. 24 and 29. We were not talking to Amendment No. 23 as it was not in order. The noble Lord wanted me to say a word or two about Amendment No. 25. Our proposal is to exempt a housing association type of scheme which deals with people with special needs in a unique way through neighbourhood support. The words "being a landlord so mentioned" mean a landlord who is a registered housing association. They have the effect, therefore, of confining the exemption to schemes of the type specified where the landlord is a housing association. This is because such developments are unique to the housing association movement.
The other amendments were Nos. 26 and 27. It is only right, in view of what the noble Lord said, that I should mention them. Amendments Nos. 26 and 27 seek to extend the list of special needs categories which are covered by the exemption. I believe that this is unnecessary. We accept that it is not possible at this stage to draw up a list of all the categories of special need which may be catered for in neighbourhood support in the future. The development of neighbourhood support schemes is still in its early stages. All we are attempting to do on the face of the Bill is to list the main categories of need that we know to be covered by existing schemes based on our discussions with the housing associations.
We are then taking a power—it is in the new Section 11A at lines 33 to 36 on page 22—to add further categories to the list by order. This means that as proposals come forward to extend the neighbourhood support schemes into other areas of special need we shall have the flexibility to add to the list of exemptions if that seems appropriate. I trust that with these explanations the noble Lord, Lord Carmichael, may be prepared to withdraw his amendment.
Lord Carmichael of Kelvingrove: I thank the Minister for his explanation. I hope he has taken the point both from what I said and from what my noble friend Lord Ross of Marnock said that we want more flexibility. We are not tying the Government down to anything. We want flexibility and that is why I considered that Amendment No. 29 seemed logical, as it gives the Secretary of State power to add to the categories, again giving him flexibility without tying him down. This is something that we should consider on Report to see what the Minister has to say about it then. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
[Amendments Nos. 25 to 29 not moved.]
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 30:
Page 23, line 49, leave out ("that") insert ("the former")
The noble Lord said: This is a minor drafting amendment which I believe, nevertheless, will be helpful in solving a slight confusion that might have arisen over the present wording of the Bill. Paragraph 3 of Schedule 1 refers at lines 48 and 49 on page 23 to
"the date for the time being specified in that subsection".
Somebody referring back to line 47, however, to find out which subsection is intended will discover that there are two subsections mentioned, subsections (7) and (7A) of Section 1 of the 1980 Act. It is intended that the words "that subsection" in line 49 should refer to subsection (7), which is the subsection amended by the Bill. This is, as I have said, a minor drafting amendment, but in its small way it removes a possible area of confusion that might arise in future. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 31 and 32 not moved.]
11 p.m.
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 33:
age 28, line 39, leave out ("payments") and insert ("repayments")
The noble Lord said: This is a very minor drafting amendment which I trust need not detain the Committee long. Paragraph 15 of Schedule 1 amends Section 30 of the Tenants' Rights etc. (Scotland) Act 1980, which sets out the arrangements whereby local authorities determine the rates of interest to be charged on loans granted by them for house purchase and improvement. The new subsection (8) deals with arrangements for varying the amount of the borrower's repayments. Unfortunately, an error has crept into line 39, which speaks of "periodic payments" where, in fact, what is meant is "periodic repayments". This is, as I say, a very minor drafting point, but the amendment puts the matter right. I beg to move.
On Question, amendment agreed to.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 34:
age 29, line 18, after ("stepchild") insert ("or adopted child")
The noble Lord said: This is self-explanatory, and I beg to move that we include "adopted child" along with "stepchild" as one of the family.
Lord Gray of Contin: I am glad to be able to assure the noble Lord that his concern that adopted children may be disadvantaged is unfounded, and that this amendment is unnecessary. The Adoption (Scotland) Act 1978 provides, in Section 39, that children who have been the subject of an adoption order are to be treated for all purposes as if they were legitimate children. It is unnecessary, therefore, to make any further provision in the new Section 82A of the 1980 Act, inserted by paragraph 17 of Schedule 1 to this Bill. The Adoption Act already ensures that an adopted child has the same rights as the natural child of a tenant. In the light of this explanation, I hope the noble Lord will agree to withdraw his amendment.
Lord Ross of Marnock: I am glad to withdraw the amendment, and I am very glad that publicity should

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be given to the fact that people should realise more and more that an adopted child is part of the family and the word "adopted" does not need to be mentioned. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Payments etc. in community-based housing associations]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 35:
Page 10, line 37, leave out paragraph (b) and insert—
("(b) the granting of a tenancy of a dwelling to a person described in section (2) below who is not an employee of the association: but only if the granting of the tenancy is made under the published rules required under subsection (1A) of section 27 of the 1980 Act.")
The noble Lord said: With this amendment, it probably will be convenient for the Committee to take Amendments Nos. 36 and 37. This group of amendments has in my experience in the local areas created more indignation than almost any other single part of the Bill; because the very people who did so much work to establish the associations, and in many cases to save the areas, as well as doing a job in housing, are now feeling that they are being penalised. People who have done a great deal of work on a voluntary basis feel that they are being penalised because it is being considered that the granting of a tenancy, even within the association's published allocation policy, is a benefit.
I understand that it works so unfairly that, even if it were an all-Scottish housing association—and there are one or two—if you were a member of a local association in Edinburgh and you had a daughter, a son or any member of your family in Aberdeen or Inverness, or wherever else the national association happened to have branches, you would be considered as having a benefit by being given a house in these areas, although in every other way you may very well be fully qualified to receive such a dwelling.
I am sure that the Minister has been approached. I and most other Members I have spoken to, both here and in the other place who have any ties at all with housing associations or any knowledge of them, have been deluged by genuine people who feel that they are being unfairly treated. They feel that people in local authorities are not treated in the same way. People in the Scottish Special Housing Association who have relatives who are given houses are not treated in the same way, and they do not see why they, as voluntary people who have been working so hard for their association, should be treated differently.
The important point is that there is a published allocation policy. That can be very easily checked and looked at by the Secretary of State; and of course it will also be accepted by the Housing Corporation and recognised by them. So we are dealing with a very rigid set of rules and regulations; yet we understand that because of the way the Bill is at present worded anyone related in any way—and it can be a fairly far-out relationship—to someone who is a member of a housing association would be deemed ineligible for a dwellinghouse. I am sure the Minister is fully familiar
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with the argument and I just hope he will be able to throw some light on it and give some help to the people who have worked so hard for so long to try to make possible what has become a really important part of our housing scheme. I beg to move.
Lord Mackie of Benshie: I shall take the opportunity to speak to Amendment No. 37. It is a very late hour—far too late an hour to be discussing this extremely important set of amendments—but it will be very interesting to hear what the Minister has to say. We can perhaps get some good sense out of him—perhaps even a concession or an acceptance, though that might be too much to hope for. As the noble Lord, Lord Carmichael, said, these are very important amendments and they have aroused a great deal of heat. One can see the situation quite clearly where a person works for a community association—and these we reckon have done most good in run-down areas. Even the remotest relative is not able to apply for a house, in spite of the stringent regulations which can be enforced to see that there is no jiggery-pokery. This is too much. I feel that if it goes through, it will do enormous harm to a great many associations. If voluntary workers are penalised for doing the work they are doing, obviously they will not remain voluntary workers for very long. I await with interest what the Minister has to say.
Lord Gray of Contin: I thank the noble Lord, Lord Carmichael, for explaining his reasons for tabling this amendment, which, as he has explained, would increase the range of circumstances in which a community-based housing association could grant a tenancy to a voluntary officer, committee member or a close relative of one. In considering the previous amendment mention was made that the allocation of publicly funded housing is an area which is wide open to accusations, justified or otherwise, of injustice and preferential treatment, whether the authority concerned is a housing association or another housing body. Housing associations are particularly susceptible to such accusations, since there is a connection between the authority granting the tenancy and the individual receiving it.
The particular problems of community-based housing associations in relation to the granting of benefits arise from those characteristics which make their contributions so valuable; and their membership and their activities are confined to a specific geographic area. Their renovation programmes must therefore at certain points conflict with the interests of their committee members or their relatives who are resident in the area. In that situation there is a clear need, both operational and on grounds of equity, for the association to be able to buy a house from and offer a tenancy to those people when their houses are directly affected by the renovation programme. The clause as drafted gives associations that ability and the 12-month period makes allowance for people who have moved out of the area recently or on a temporary basis.
The noble Lord's amendment would enable community-based housing associations to grant tenancies to committee members, officers and their relatives who were not currently resident in the area. While that would undoubtedly facilitate the return of

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such people to the community from which they might have moved or been obliged to move some time previously, I have to say that I see that as a distinctly different category of allocation from those provided for in paragraph (b) of new Clause 15A. The same arguments about the direct effect of the development programme on their homes do not apply, and without that distinction they are not in a materially different position from the committee members of any other housing association. There is certainly no operational need or difficulty related to equity there.
The provisions set out in Clause 13 were carefully drawn up to provide a specific solution to a particular problem which is probably unique to community-based housing associations in Scotland. As such, I accept that it merits a solution which is not available to housing associations generally, but only to the extent that the problem is unique. I do not believe that it is necessary or even desirable to widen the scope of the clause in the way proposed in the amendment.
We are also dealing with Amendment No. 36. The effect of Clause 13 will be to permit community-based housing associations in certain specified circumstances to buy a dwelling from, or offer the lease of a dwelling to, a voluntary officer, committee member or a close relative of such a person. Such measures are deemed necessary in order to facilitate the renovation programmes of the associations and to ensure that those persons are treated on the same basis as others who are resident in houses which may be affected by the programme.
The effect of the noble Lord's amendment would be to prevent the close relatives of voluntary officers and committee members of those associations from benefiting from the limited exemptions set out in the Bill. Relatives might include the actual owner or tenant of an affected flat, for example, where a committee member lived with his parents. It is unlikely to be welcomed, therefore, by the persons affected since they will regard it as being unfair, or by community-based housing associations which would be unable to acquire properties from the individuals or to offer tenancies to them in order to advance rehabilitation projects.
The noble Lord, Lord Mackie, who spoke to Amendment No. 37, acknowledged that his amendment goes some way beyond the terms of Clause 13, as it stands, by attaching new provisions to Section 15(2) of the Housing Associations Act 1985. It will enable all housing associations to grant tenancies to and acquire properties from their committee members, officers and employees. It would also have the effect of extending the limited range of permitted benefits listed in Section 15(2) of the 1985 Act to include the granting of tenancies under the terms of published rules governing allocations.
The existing powers of the Housing Corporation, under the Housing Act 1974, were insufficient to cope with those developments and new provisions were introduced in the Housing Act 1980. Those provisions preclude registered housing associations from making any payments other than those specified or granting any other benefits to committee members, officers or employees, persons who had held such positions within the preceding 12 months, close relatives of such
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persons or businesses in which such persons had a direct interest. Those provisions now lie in Section 15 of the consolidating Housing Associations Act 1985.
The restrictions imposed on housing associations by Section 15 of the 1985 Act are designed to ensure that decisions on the use of public funds are taken in a fair and proper manner and that there is no question, real or implied, of a conflict of interest for officers and committee members. The practices which led to the introduction of those restrictions were not universal and they had little impact in Scotland, but there was sufficient evidence of abuse and uncertainty to justify the action taken. It can be argued that measures introduced to cope with the problems of dual interest in relation to payments, consultancies and contracts are not appropriate to the granting of tenancies, but in the granting of individual tenancies, even under a defined and published set of rules, there will always be choices to be made between competing applicants. We all know that the allocation of publicly funded housing is regularly subjected to criticism and accusations of injustice. Where there is a connection between some officer or member of a housing authority and the recipient of the tenancy, suspicions, justified or not, can easily arise. Indeed, it is likely that problems of this kind arouse greater public interest than the wider commercial and accountability issues which rightly concern us here.
I recognise that the measures contained in Clause 13 do not go as far as some associations would have wished and this amendment reflects that. However, I do not think that the case for the more relaxed control suggested by the amendment has been made. Indeed, I think there is a serious risk that the sensible controls introduced in 1980 would be seriously eroded by it. I believe that Clause 13 deals with the distinct problems facing community-based housing associations which are unique to them in a way that they will welcome. Once again, I apologise to the Committee for that rather lengthy explanation, but they are very important amendments which I take seriously. I trust that with that explanation noble Lords will be prepared to withdraw their amendments.
Lord Carmichael of Kelvingrove: I thank the Minister for that very full explanation. I do not think he need apologise for its length because this is a very important subject. I am sure he will equally realise that that sort of reply needs a certain amount of expertise and I do not have the benefit of that to the extent that he does. Perhaps he will accept that if we withdraw the amendment we shall want it looked at by those who are involved and will want to leave ourselves free to bring it back at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 36 and 37 not moved.]
Clause 13 agreed to.
Clauses 14 to 17 agreed to.
[Amendment No. 38 not moved.]
Remaining clauses and schedules agreed to.
House resumed; Bill reported with the amendments.

York City Council Bill [H.L.]
Reported from the Select Committee with amendments, and recommitted to an Unopposed Bill Committee.
House adjourned at nineteen minutes past eleven o'clock.