HL Deb 28 April 1986 vol 474 cc48-65

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 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 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.

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 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 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 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.

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.

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 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 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.

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 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: 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.
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.