HL Deb 13 May 1986 vol 474 cc1052-93

4.2 p.m.

Report received.

Clause 1 [Extension of right to purchase and of "secure tenancy"]:

Lord Carmichael of Kelvingrove moved Amendment No. 1:

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: My Lords, I make no apologies for bringing forward as Amendment No. 1 an amendment almost identical to one that was discussed in Committee. I want to make a final plea to the Minister, while hoping that he will have looked very carefully at the debate we had in Committee. He will have been aware of the very widespread view that was obvious then, particularly among Scottish Peers, about the importance of this amendment. As I say, I hope that at his leisure he has studied that debate and has gained some appreciation of the uniqueness of the Scottish community-based housing associations—I emphasise, community-based housing associations.

I make no apology for trying to get special treatment for these associations. In the old areas of the country and in the big cities, one of which I represented, we owe them an enormous debt. To digress slightly, before the advent of the associations—which were the result of enlightened thinking on housing generally and desperation over housing generally—the planners wanted to demolish acres and acres of that area of Glasgow called Partick and they finally did demolish acres of another area called Maryhill and many other parts of the city. But the housing associations, based on the caring, concerned and energetic local people, with little experience, got to work and helped in the rejuvenation of these run-down city areas.

The confidence in the whole areas increased. As I said at Second Reading, we reached the situation where the building societies, which previously had marked lines round certain parts of the inner cities within which no loans would be possible, began to rub out those lines so that it became possible in these rehabilitation areas for people to get loans to buy privately-owned houses. This was a great boost to the whole area. The building societies were a great help and new owner-occupiers were able to move in.

We ask in the amendment specifically for the smaller associations to be exempt from the right to buy. The noble Earl, Lord Dundee, speaking at the Committee stage gave figures for the Scottish community-based housing associations. In Scotland we have 195 associations with 25,000 houses. That is an average of 128 houses per association. I know that averages are very wild, but they give an indication that when you are looking at Scotland and think of the Scottish housing associations you are dealing with a quite different sort of animal from the English associations. There are 2,450 associations in England owning something around half a million houses. This gives an average of 204 houses per association. But, as I have said, averages are dangerous things to play with; for in Scotland there are 30 associations which have under 50 houses and 53 associations which have fewer than 250 houses.

As to these small associations particularly—since I believe that the Minister has possibly closed his mind to the idea of any exemptions for the larger associations—any loss of housing stock would in many cases cause them to become unviable. We are talking about associations with a very small number of houses. Not only would that affect their viability. As to whatever was left of the housing stock that was available to the associations, available for people who were involved in providing houses to rent at reasonable and just rents, people who had given enormous amounts of their time, energy and ability would just lose interest in the whole association. I believe they would not accept the fact that the result of all their time, sweat and labour was suddenly taken out of the rental market.

With great seriousness I ask the Minister to look at this particular problem. As I say, I have no apologies for bringing it back. I think the results of the last discussion that we had on this, and the widespread support that it received, should be enough to make the Minister think again. I hope that he has done so in the period since the Second Reading. I beg to move.

Lord Mackie of Benshie

My Lords, I do not think there is a great deal more to be said about this, except that I hope the Minister has had second thoughts. The case has been put from all parts of the House and put very reasonably. We are talking about 5,000 houses and not about a tremendous amount. We are not breaching any principle. In fact, we are making the principle sounder by providing for exceptions. All reasonable people will realise that there are exceptions to every rule; and I am sure that the Government are much more reasonable than they were a few days ago.

Perhaps the Minister will open his heart and listen to the arguments and give way on this small point which, nevertheless, as the noble Lord, Lord Carmichael, has said, will make a tremendous difference to a whole lot of public-spirited people who are working very hard for an objective which only a short time ago was praised by the Secretary of State. He then spoke very much about the success of community housing associations. I do not think that this is the time to ruin them. I hope that the Minister will discard the brief that he is looking at so intently and give way with the good grace of which he is capable.

The Earl of Dundee

My Lords, I should like to support the remarks of the noble Lord, Lord Carmichael, and the noble Lord, Lord Mackie of Benshie. I believe that the amendment offers necessary protection to small rural housing associations without going against the principle of the Bill. Would not my noble friend the Minister agree that such a balance would be particularly evident if tenants of the small housing associations concerned were entitled to buy at discounted terms elsewhere? Yet why should it be necessary to protect small and rural housing associations at all; or conversely, if there is no attempt to protect them, what effect will that have on various considerations, including unit management costs, the continuing willingness of local voluntary management committees and related employment opportunities?

Would my noble friend not accept that it is in fact those aspects which stand to suffer and therefore that protection should be given in this case?

The Minister of State, Scottish Office (Lord Gray of Contin)

My Lords, I have listened very carefully to what has been said by all noble Lords who have participated in this debate. The noble Lord, Lord Carmichael, pleaded with me to think again. He hopes that I read the record and that I may be persuaded by what is revealed there and also by what has been said here today. However, I would remind the noble Lord that I listened very carefully at the Committee stage and that the Committee, on a Division, rejected this very amendment. However, I have no complaints at all about the noble Lord bringing it back. I would, perhaps, have been particularly willing to be persuaded had compelling new arguments been put forward, but I am afraid that that is not the case. Just as my brief is the same as it was at the Committee stage, so the arguments put forward are identical to those which were put forward at the Committee stage. Therefore I am afraid that I am not persuaded by anything which has been said.

I told your Lordships on the previous occasion that we are not, by and large, breaking new ground in introducing a right to buy for housing association tenants in Scotland, but we are extending to additonal categories of tenant an already very successful policy which has been widely welcomed. The right to buy was not applied to housing association tenants under the 1980 Act, but since then housing associations have grown in number and they have matured. They now hold a sizeable stock of houses which have been provided with public money—a point which we must never forget—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 clearly unjust to deny tenants the opportunity to purchase their homes simply because their associations owned a particular number of houses, and I am in no doubt that it would be regarded as very unfair by the tenants concerned.

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 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 may seek assistance to meet that deficit.

Nor do I accept that the right to buy will pose significant administrative problems for smaller associations. Indeed, there may be some advantages 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 in the past, that newly-formed associations seeking to build up their stocks to a reasonable level will have that objective defeated by a rush of right to buy applications is, I feel, an exaggeration—indeed, a distortion. I find it difficult to believe that a new association, operating proper allocations policies, would find within its initial tenants a high proportion of tenants both willing and able to buy.

All in all, I do not believe that the amendment would serve any purpose other than to alienate the tenants concerned. I invite the noble Lord to withdraw the amendment.

4.15 p.m.

Lord Mackie of Benshie

My Lords, before the Minister sits down, will he tell me how a smaller association with one permanent employee can cut its overheads if half of its houses are sold?

Lord Gray of Contin

My Lords, I am not suggesting that a particular association with one permanent employee would have a great deal of scope for cutting its overheads. However, there are other associations with rather more, who would have scope.

The Earl of Selkirk

My Lords, perhaps I may make a few comments. I am perhaps not surprised to hear what my noble friend has said. There was a striking lack of novelty in the remarks which he made. However, what is being put forward is an effective suggestion. The general view is that unless there are about 250 houses, the cost of management is excessive. Indeed, that is recognised in England because extra allowances are provided for the management costs of the smaller associations or societies. Therefore I should have thought that allowing the societies to have up to 250 houses was an economical way of using public money. Indeed, the noble Lord has an advantage in this respect. If any society goes above 250, they will be free to purchase. However, as it is, we are undermining to some degree the efficiency which those organisations can achieve.

The noble Lord talked about it being unfair. He talked about the right to buy. It is far more unfair not to have accommodation at all. I suggest to the noble Lord that this slightly political shout of "right to buy" is rather like the Americans saying "Life, liberty and the pursuit of happiness", as if that were the principle upon which life existed. It is not. At present, according to figures which I think were put forward by the Government, there are about 17,000 people who are homeless. Those people are far more important than the odd person who wants to buy.

As I have said previously, home ownership is going ahead very well. I cannot be accused of not being in favour of home ownership. I have been with the building societies for some 20 years doing what I can in some way to raise the standard. Now nearly two-thirds of the population of this country own their homes. The need today is different: we need rented property, and the noble Lord knows that perfectly well. That is the real need which we must face.

I am sorry to have to say that the noble Lord has not been very kind either today or in the Bill to the work that housing associations are doing. There was no consultation at all before the Bill came forward. The noble Lord talks about abuses. Is he able to tell me now of any abuse that has taken place by a charitable organisation either in Scotland or in England? Those are deprecating words which are unfortunate.

We are not satisfied with what we have heard. We run into danger when we constantly change housing policy. Any worthwhile housing policy must operate for some 20 years or more. However, the Government come in and are obsessed with some idea. I ask the noble Lord to think very hard about this matter. This is a mild measure which could be accepted without any difficulty.

Lord Wilson of Langside

My Lords, unhappily I was unable to be present either during Second Reading or at the Committee stage of this not unimportant Bill. I must say that I came here this afternoon expecting a sympathetic, warm and more considered response to a number of amendments which have been put down, including the present amendment. I found the Minister's reply not only to the presentation of the amendment by the noble Lord, Lord Carmichael of Kelvingrove, but also to the question asked by my noble friend Lord Mackie of Benshie a moment or two ago, profoundly unconvincing and certainly disappointing. It suggests to me, if I may say so without offence, that the Minister is unwilling to open, as the noble Lord, Lord Mackie of Benshie, hoped he might, either his heart or his mind to this matter which is so important to the housing associations.

Lord Gray of Contin

My Lords, by leave of the House may I make one or two comments on points made since I last spoke. I fully appreciate the great interest that my noble friend Lord Selkirk has always taken in housing associations. I know that on this issue he speaks from the heart. But that does not change the position. He, probably inadvertently is seeking to deprive genuine people who might wish to own their own homes of that right. This is already available to those who live in local authority houses, perhaps in the next street, and it seems to me outrageous that people in this House, of all places, should try to deprive those who seek to own their own homes of the right to do so.

I should like perhaps to correct my noble friend on one point of detail. I think he said—and he will correct me if I am wrong—that two-thirds of the people in this country own their own homes. That is certainly not the case in Scotland; I only wish that it were so. The figure is nothing approaching two-thirds. The noble Earl also made the point about small associations and deficits. If deficits occur, they can be remedied through revenue deficit grant. No association should run into trouble as a consequence of sales alone.

Perhaps I may add to what I have said already to the noble Lord, Lord Mackie of Benshie, who asked me about how savings could be made with a small association with only one employee. It might be possible—I am not saying that it necessarily would be—that they could share staff with other associations, or use the agency services of associations. That might be a possibility.

I do not think that we are going to move very far in our views on this. People have taken up fairly entrenched positions. However, before the noble Lord, Lord Carmichael, winds up I should like to say that the truth of the matter is that Ministers have been expressing concern about the operation of the voluntary code at regular intervals over a number of years. In a speech to the federation's annual conference in June 1982 my honourable friend the then Minister for Housing in Scotland expressed disappointment with the progress that had been made in implementing the voluntary code and warned the movement that it was essential for associations to adopt a positive stance in their sales policy. He subsequently discussed this matter with the federation when he met its representatives in January, 1983.

No, my Lords, there are involved people who wish, and who might wish, to own their own homes, and I think it totally wrong of us in this House to try to deprive them of this privilege.

The Earl of Selkirk

My Lords, may I remind the noble Lord that in the autumn of 1984 the then Secretary of State stated that the voluntary code was working very well indeed?

Lord Mackie of Benshie

My Lords, may I also remind the Minister that his indignation at our seeking to deprive people of this advantage is really somewhat synthetic, as all we are doing is proposing exceptions to the rule? The Government themselves have already allowed exceptions in the case of the charitable associations and many others where, for example, there is a contract to live in a house. All these are exceptions. We are not abrogating the principle but only making sensible exceptions.

Lord Carmichael of Kelvingrove

My Lords, I was disappointed at the Minister's reply—he will not be surprised to hear that—when he said things such as that the selling off of houses will not impair the viability of the associations. When it is realised that we are looking at housing associations with less than 250 houses I do not think that he is right at all. I cannot believe that small associations, particularly the ones mentioned earlier—and the figures were given by the noble Earl, Lord Dundee, at the last stage of this Bill—such as the 30 associations with less than 50 houses would not be affected. If these houses begin to be unavailable because people buy them, obviously that will be important. But even more important than the stock of houses will be the effect on people who have given their time to set up the associations to try to save a bit of their community.

We must register our feelings in the House. We have lost the big right-to-buy argument on association houses, but we have listened to the small associations and put down these amendments. I feel that your Lordships should listen to them as well and I therefore ask for your views by putting the matter to the vote.

4.27 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 112; Not-Contents, 97.

DIVISION NO. 1
CONTENTS
Airedale, L. Carmichael of Kelvingrove, L.
Amherst, E. Chitnis, L.
Ampthill, L. Cledwyn of Penrhos, L.
Ardwick, L. David, B.
Attlee, E. Davies of Penrhys, L.
Aylestone, L. Dean of Beswick, L.
Banks, L. Denington, B.
Barnett, L. Diamond, L.
Blease, L. Donaldson of Kingsbridge, L.
Boston of Faversham, L. Dundee, E.
Bottomley, L. Elwyn-Jones, L.
Brooks of Tremorfa, L. Ennals, L.
Bruce of Donington, L. Ezra, L.
Caradon, L. Falkland, V.
Fisher of Rednal, B. Parry, L.
Gallacher, L. Perry of Walton, L.
Galpern, L. Perth, E.
Gladwyn, L. Phillips, B.
Glenamara, L. Pitt of Hampstead, L.
Graham of Edmonton, L. Ponsonby of Shulbrede, L. [Teller.]
Grey, E.
Grimond, L. Prys-Davies, L.
Hampton, L. Ritchie of Dundee, L.
Hanworth, V. Rochester, L.
Harris of Greenwich, L. Seear, B.
Hatch of Lusby, L. Seebohm, L.
Hayter, L. Selkirk, E.
Heycock, L. Serota, B.
Hirshfield, L. Shaughnessy, L.
Hooson, L. Shepherd, L.
Houghton of Sowerby, L. Silkin of Dulwich, L.
Hunt, L. Simon, V.
Hutchinson of Lullington, L. Soper, L.
Hylton-Foster, B. Stallard, L.
Irving of Dartford, L. Stedman, B.
Jacques, L. Stewart of Fulham, L.
Jeger, B. Stoddart of Swindon, L.
Jenkins of Putney, L. Strathcona and Mount Royal, L.
Kennet, L.
Kilbracken, L. Tanlaw, L.
Kilmarnock, L. Taylor of Blackburn, L.
Kintore, E. Taylor of Gryfe, L.
Kirkhill, L. Taylor of Mansfield, L.
Lauderdale, E. Tordoff, L. [Teller.]
Listowel, E. Turner of Camden, B.
Llewelyn-Davies of Hastoe, B. Underhill, L.
Lloyd of Hampstead, L. Wallace of Coslany, L.
Lloyd of Kilgerran, L. Walston, L.
Longford, E. Wells-Pestell, L.
Mackie of Benshie, L. Whaddon, L.
McNair, L. White, B.
Mar, C. Williams of Elvel, L.
Mayhew, L. Wilson of Langside, L.
Mishcon, L. Winchilsea and Nottingham, E.
Molloy, L.
Munster, E. Winstanley, L.
Nicol, B. Winterbottom, L.
Oram, L.
NOT-CONTENTS
Alexander of Tunis, E. Gisborough, L.
Allerton, L. Glenarthur, L.
Alport, L. Gray of Contin, L.
Auckland, L. Gridley, L.
Bauer, L. Hives, L.
Beaverbrook, L. Hooper, B.
Belhaven and Stenton, L. Inglewood, L.
Beloff, L. Kimball, L.
Belstead, L. Kimberley, E.
Bessborough, E. Kinnaird, L.
Boyd-Carpenter, L. Lane-Fox, B.
Brabazon of Tara, L. Layton, L.
Brougham and Vaux, L. Long, V.
Caithness, E. Lucas of Chilworth, L.
Cameron of Lochbroom, L. Lyell, L.
Campbell of Alloway, L. McAlpine of Moffat, L.
Carnegy of Lour, B. McFadzean, L.
Cawley, L. Macleod of Borve, B.
Cayzer, L. Mancroft, L.
Constantine of Stanmore, L. Margadale, L.
Cox, B. Massereene and Ferrard, V.
Craigavon, V. Maude of Stratford-upon-Avon, L.
Cromartie, E.
Cross, V. Melville, V.
Cullen of Ashbourne, L. Merrivale, L.
Davidson, V. Mersey, V.
De Freyne, L. Mottistone, L.
Denham, L. [Teller.] Mowbray and Stourton, L.
Derwent, L. Murton of Lindisfarne, L.
Digby, L. Norrie, L.
Drumalbyn, L. Orkney, E.
Ellenborough, L. Pender, L.
Elliot of Harwood, B. Peyton of Yeovil, L.
Elton, L. Portland, D.
Fortescue, E. Rankeillour, L.
Gainford, L. Renton, L.
Rodney, L. Swinton, E. [Teller.]
St. Aldwyn, E. Terrington, L.
Saint Brides, L. Teviot, L.
St. Davids, V. Thorneycroft, L.
Sandford, L. Trumpington, B.
Sandys, L. Ullswater, V.
Sempill, Ly. Vaux of Harrowden, L.
Shannon, E. Vickers, B.
Sharples, B. Vivian, L.
Slim, V. Westbury, L.
Soames, L. Wynford, L.
Stodart of Leaston, L. Young, B.
Sudeley, L. Zouche of Haryngworth, L.

Resolved in the affirmative, and amendment agreed to accordingly.

4.35 p.m.

Clause 2 [Increased discount where dwelling-house purchased is a flat]:

Lord Carmichael of Kelvingrove moved Amendment No. 2:

Page 2, line 24, at end insert ("and unless owned by a community based housing association as defined by the Housing Associations Act 1985")

The noble Lord said: My Lords, with this amendment it would be perhaps convenient to take Amendment No. 3. I should point out that unless I am wrong in my reading of the Bill, I think there has been a printing mistake and Amendment No. 2 should read "page 2, line 24" and not "line 20".

The amendment concerns discounts to encourage tenants to purchase these properties. I thank the Minister for giving me some of the figures he promised last time. Through no fault of his (for I know that the pressure is very great) I received them only today. I should like to make one comment on the figures. I was concerned about having the figures for flats and maisonettes with lifts and the high-rise flats. Out of the total of 78,000 houses sold up to December 1985 the number given by the Minister for flats and maisonettes that require access by lifts was only 235, which is a very tiny percentage as the Minister will agree.

I cannot accept that maisonettes with a lift are related in any way to high rise flats. There are very many relatively low rise, with two, three or four storeys, many of them built for older people, which have lifts. That proves the point that the houses that are selling are the semi-detached and the terraced houses. Out of the total of 78,000 houses, 68,000 of them are semi-detached or terraced.

My point about the housing association inner area houses is that it is really not necessary to give tenants a large discount to encourage the purchase of the older property. There is plenty of housing available in many of these areas. They have become more desirable partly because of the work of the housing associations. In some areas I know prices are higher than the prices advised by the district valuer for these houses. These are houses with vacant possession, with no discount; and there is still a very great demand for them.

There is no need to go to the length of giving for this type of house the same kind of discount that the Minister believes is necessary. I agree with him that if we decide on a policy of selling for some of our multi-storey flats, we would need to give very high discounts. I feel it is unnecessary to give these discounts, and I hope that houses and flats of more than four storeys will be exempted from the Bill; and also houses owned by housing associations, the vast mass of which are low rise, with three or four storeys if one includes the ground floor.

The Minister made a point in his speech on 28th April to which I feel I should refer. He said with some indignation, which I always like to see from him: 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"—[Official Report, 28/4/86; col. 86.]

I really feel that if the Minister has not observed this he could not have been associated with the problems that many people find themselves faced with, especially in the inner-city areas (though it could happen anywhere), particularly concerning the tenement type of property. The housing associations are faced with many problems when people purchase houses, using just about all the capital they have. It is not wilful neglect; it is not something that they want to do. They are not saying, "We will just forget about repairs". The fact is that they are frequently greatly stretched. They may reach a point where perhaps there is illness in the family or unemployment or a reduction of earnings. Probably the worst thing of all is when people retire and suddenly find that their income has fallen. I can assure the noble Lord, from the many surgeries that I had, that terror hits people who have bought their own house and who find that in their retirement they get large bills which they just cannot cope with.

What tends to happen is that there is neglect of repairs to the fabric. The houses may look very good and people may go to a lot of trouble to make the appearance good, but sometimes they just cannot afford the kind of money that is required for fabric repairs. I was not criticising them in any way. It is just a statement of fact: this becomes too much for many people. The Minister should know that, as regards old property in Scotland, had it not been for various governments bringing forward repair grants to owner-occupiers we would now be in a very sad state. Therefore I want to clear up that point.

The Minister may think I am being unfair. I am sure that he did not mean to be unkind but he seemed to suggest that I and one or two of my noble friends were making a statement that when people bought their own houses they just ignored them and were feckless. We were saying that repairs are frequently left because the money is just not there to be used. I hope I have cleared that up and that the Minister will think very carefully about these two amendments. Though they are much the same as the amendments which were put forward last time, there is at least a new element in that the Minister was kind enough to write to me and give a little more information, part of which I have digested. I shall look at the rest of it some time later. I beg to move.

4.45 p.m.

Lord Gray of Contin

My Lords, may I first of all reassure the noble Lord, Lord Carmichael, that of course anything I said was not in any way intended personally? I was generalising because it comes across, whether or not that is the intention, from many Labour spokesmen throughout the country that they are implying that maintenance will not be maintained in privately-owned housing to the standard which has in the past been maintained where there has been either a local authority or a housing association involvement. However, I fully accept the noble Lord's explanation and perhaps I may add that it will be open to new owners to invite the housing associations to continue to factor the block for them, if that is the wish of those who make their own purchases.

The effect of this amendment would be to deny to a particular group of tenants the same discount entitlement as is available to local authorities and other housing association tenants living in similar properties. I have again listened very carefully to what the noble Lord has had to say but I really do not think his arguments are sustainable. He has said that the majority of such flats will be tenement properties, and that is true. It may well be true that community-based housing associations own a substantial stock of those, but so also do local authorities and other associations. In Glasgow, for example, I pointed out previously, and I repeat for the benefit of your Lordships, that the district council holds some 5,500 flats in pre-1919 tenements, some 2,500 of which have been rehabilitated.

The argument that housing association flats are likely to have been recently refurbished and will therefore be more attractive to purchasers is difficult to sustain, given that the experience among local authorities has been that flats of all types have sold markedly less well than other houses. That is not so much because the tenants do not like their flats as because they are apprehensive about the associated responsibilities and costs—which the noble Lord was highlighting—such as for common repairs, which go with the purchase of a flat. There is no reason to suppose that those views will not be shared equally by housing association tenants.

However, 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 owned by community-based housing associations (towards 18,000 houses) 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.

The noble Lord's amendment also raises a problem of definition. No one has yet come up with an acceptable definition of "community-based association", and I note that the noble Lord has not attempted it today.

In the light of those considerations, I do not believe that there is any case for different discounts being applied purely on the basis of whether the activities of the landlord of a particular flat are confined to a particular community. The discount reflects the fact that the house is being sold with the sitting tenant and also the period of time over which that tenant has been contributing towards the cost of publicly-funded housing. In view of my comments, I wonder whether the noble Lord would be prepared to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, I have listened with great care to what the Minister has said. I was rather surprised that he could not find a definition for "community-based associations"—not because I have one that I can pluck out of the air. It is one of those things that I always thought I knew what it was but may be rather like a camel—you know what it is and you can describe it but that is about all. I am sure that we could find a definition. I could have understood that there might be problems about defining what actually constitutes four-storey property; there could be problems there. I am disappointed that the Minister has not taken this point.

I can thoroughly appreciate, as I said earlier, the question of large discounts for multi-storey flats. There are problems associated with them of which we are all reasonably well aware; but as regards the relatively low four in a block type, I was rather surprised at the figure that he gave. From local experience that I have, I am trying to work out the reasons why they have been slow to sell. I do not believe there is any comparison at all. Taking both ends of the scale—the three and four-storey housing association house or the old city improvement houses in parts of the central areas and the 32-storey blocks in a certain part of Glasgow or the 28-storey blocks you have in other parts of the country—I do not see any association whatever with them. However, I appreciate that it is unlikely that we would be able to get much further with the Minister on this particular amendment. Therefore I thank him for what he has said and I will with great care read the information that he has given. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Lord Gray of Contin moved Amendment No. 4:

After clause 9, insert the following new clause:

("Removal of restriction on security of tenure.

. In Schedule Ito the 1980 Act, paragraph 1 (tenancy not to be secure tenancy if for period exceeding 20 years) shall cease to have effect.").

The noble Lord said: My Lords, it might be for the convenience of the House if I take Amendments Nos. 12 and 13 along with Government Amendment No. 4. Amendments Nos. 4 and 13 repeal paragraph 1 of Schedule 1 to the Tenants' Rights, Etc. (Scotland) Act 1980. At present paragraph 1 of Schedule 1 has the effect of providing that a tenancy shall not be a secure tenancy—and therefore the tenant does not have the right to buy—if it is for a period of more than 20 years. These amendments provide that in future tenants who have such long leases will nevertheless be secure tenants and will enjoy the other rights which go with security, including the right to buy, no matter whether they entered into their long lease before or after the date when this Bill comes into effect.

Amendment No. 12 is a saving amendment to avoid any potential conflict of statutory provisions. It provides that nothing in the Land Tenure Reform (Scotland) Act 1974 shall prevent a tenancy being a secure tenancy under the 1980 Tenants' Rights, Etc. (Scotland) Act, but equally nothing in the 1980 Act shall prevent the granting of a decree of removing under Section 9(1) of the 1974 Act.

If I may explain in a little more detail, the reason for excluding tenancies of more than 20 years from the right to buy in 1980 was that such leases were thought to be closer to the concept in English law of leasehold purchase than to the tenancy as it is normally understood. However, this does not in itself appear to be a very strong argument for excluding such tenancies. It was thought in 1980 that there would be very few, if any, local authority tenants who held their tenancies on leases of more than 20 years and that the creation of any new tenancies on such a basis was virtually excluded by the Land Tenure Reform (Scotland) Act 1974. However, Section 8, when read in conjunction with Section 9 of the 1974 Act, does not wholly rule out the possibility of long leases for residential property, although these are voidable by the landlord.

Within the past few weeks it has come to our attention that Central Regional Council has been seeking to persuade its tenants, who it should be remembered do not at present have security of tenure, to enter into 21-year leases or else to buy their property at a 10 per cent. discount. The purpose is plain. It is to prevent these tenants from having security of tenure and the right to buy at full discount when this Bill comes into force.

On the face of it Section 8 of the 1974 Act, which provides that it shall be a condition of every long lease that no part of the property shall be used as a private dwellinghouse, should rule out the council offering a long lease on houses which have clearly been, and are to continue to be, residential properties. I believe therefore that the tenants affected could pursue in the courts with reasonable prospects of success an action on the grounds that the council is acting unreasonably in seeking to have them sign long leases.

These amendments demonstrate the Government's determination that regional council tenants shall have the right to buy where their houses are not essential for operational purposes at discounts equivalent to those enjoyed by other public sector tenants. The action of central region illustrates the deep-seated opposition of certain councils to the idea of selling at discount and demonstrates why the provisions of this Bill are necessary. I commend these amendments to the House. My Lords, I beg to move.

Lord Carmichael of Kelvingrove

My Lords, there is little in the Government's views on this matter to which we could honestly object, though we object to the general principle. Since we were talking earlier about definitions, may I ask whether there is a definition of what used to be called an essential worker, someone who had to have accommodation close to his work? The noble Lord may remember that on one of the earlier Scottish Bills we discussed education property in island communities, and I think we had to win a vote in order to get the accommodation of the Government, so that a house necessary for educational purposes on an island was not able to be sold. I wonder whether in this case there is a simple definition.

The Minister will no doubt be aware of the rather interesting amendment which the noble Lord, Lord Mackie of Benshie, has put down for consideration later. But there must be a definition somewhere of an essential local authority worker who must have a house close to his work. There is a desire on the part of most employees, who were previously always considered to have a tied house, not to have a tied house now. I rather agree with that, because I have never liked the idea of a tied house, though I accept that it is sometimes essential. I shall be very grateful if the Minister can give us the definition.

The Earl of Selkirk

My Lords, may I ask one question? I believe that long leases are not very common in Scotland, but does my noble friend have any idea how many there are? I imagine that the number is pretty small. May I continue the point which the noble Lord, Lord Carmichael, raised? I see in one of the many useful pieces of paper which my noble friend has been good enough to send me these words: Any house let to an employee of the landlord as a condition of his employment". Is that in any way undermined by the amendment, and how is a condition of employment created? Is it simply a matter of putting it into the lease? Can anybody lay down a condition? Is that condition in any way undermined by the amendment which my noble friend has moved?

Lord Gray of Contin

My Lords, by leave of the House perhaps I may deal with those points. The noble Lord, Lord Carmichael, asked me about the definition of essential workers. Essential workers are not defined as such, but Schedule 1 to the 1980 Act as amended by the Bill excluded many houses required for operational purposes which, in essence, is the same thing. My noble friend Lord Selkirk asked me about long leases, and he is correct in saying that they are relatively rare. Central Region, is, I believe, trying to issue long leases to between 100 and 150 tenants. My noble friend also asked me about the provision, as a condition of his employment". This is not affected by the present amendment.

On Question, amendment agreed to.

Clause 13 [Payments etc. in community-based housing associations]:

Lord Carmichael of Kelvingrove moved Amendment No. 5:

Page 10, line 37, leave out paragraph (b) and insert— (" (b) the granting of a tenancy of a dwelling to a person described in subsection (2) below who is not an employee or the close relative of an employee of the association; but only if granting of the tenancy is made under the published rules required under the Housing Associations Act 1980.").

The noble Lord said: My Lords, this is an amendment to which we and, in particular, housing associations attach considerable importance. We share the Government's concern over committee members benefiting from the very fact of their membership of an association's committee. We believe that the Government are basically correct in being concerned about this matter. The general public would he very rightly annoyed if there was any thought of queue jumping. Nobody wishes this, least of all the people in housing associations. Nevertheless, as the Bill is at present worded, there is an element of unfairness.

I should like to give an example. A close relative living outside an association's area may wish to be housed in an association house. The person mad have left that area, which was his home territory, in order to get accommodation when he married, but always wanted to return. This is very common. People frequently want to return to where they came from. It would be impossible for the person to get a house in a housing association area from an association if a relative of his was a member of the committee or had been a member of the committee less than 12 months previously. This is putting a punishing penalty on people's voluntary contribution to the associations.

5 p.m.

Conversely, a son or daughter of a committee member resident in the family home may be given a tenancy but—and this is another anomaly—if this son or daughter moved across the boundary of the immediate area, for however short a period, he or she would be barred from tenancy if their parents or close relatives were members of the committee of the association.

These restrictions apply only to housing associations. They do not apply to local authorities. I accept the fact that there are strict regulations in local authorities. I know that in my own local authority there is a special review in the case of any house given to a member of the local authority's immediate family. This is looked at by a special committee. But we have rules for the housing associations as well. We have a code of practice and a code of conduct for the housing associations. There are plenty of checks and regulations to prevent abuse where a close relative is a member of the association committee

People who get involved in housing associations put a lot of energy and enthusiasm into the work. The present proposals are deeply resented. I have had a fair amount of mail on this matter and certainly I have had representations at home. People have been working for many years in the associations. Before they began to see the fruits of their labours and gain some satisfaction from it, they worked because they wanted to do it for the area. They now find that by their participation and continued membership of the association committees they are penalising their children and close relatives. It is wrong that the children should be penalised for their public spirit.

Lord Gray of Contin

My Lords, before the noble Lord continues perhaps he will clear up a point for me. My list indicates that we are considering Amendments Nos. 5 and 6 together. Is that correct?

Lord Carmichael of Kelvingrove

Yes, my Lords; I am sorry. Perhaps I should have started by saying that. I am now going to deal very briefly with Amendment No. 6. This is the amendment of the noble Lord. Lord Mackie of Benshie, and he will speak to that.

We are talking about lay members, unpaid voluntary members of the associations. We are not speaking about employees of the associations, because they have a relationship to the associations slightly different from the lay members. Staff members are employed but they are tied to the association not by their residence but by their employment. It would perhaps be stretching things a little too much if they had the same rights as the voluntary members of the association. They do not need to live in the area, whereas in almost all cases voluntary members are in the association because they live in the area, because they want to live in the area and because they want to improve the area.

All questions of tenancy must be within the published rules of the association. The Minister is familiar with the type of energetic people who become involved in these associations. He will know that they themselves will be capable of not breaking the rules or not allowing anybody else to break the rules. If the rules are known to the public, many of them will know what is happening in confined areas and will be good watchdogs. I hope that the Minister will look at this amendment, which from the point of view of the driving force of many of these associations is very important. I beg to move.

Lord Mackie of Benshie

My Lords, as we are speaking to Amendments Nos. 5 and 6, perhaps I may say frankly that I accept that Amendment No. 5 is probably slightly better than Amendment No. 6. But there are arguments on both sides and I think that the prohibition is far too strict. It does not apply in the case of local councils that own houses, so why should it apply to housing associations? I do not really know. If anything, the committee of a local housing association will be infinitely stricter in examining the claims of relatives than the people employed by a large council. The committee will know more about them, and I should say that in nearly every case an application will be scrutinised much more closely if it is from a relation of an employee or of a committee member than if there is no such connection. That is normally the way it works with a voluntary association.

Many ludicrous examples have been given to us. We have a nice one here about a housing association which employed a relief warden in Corstorphine. The mother-in-law lived in Forfar and applied for a place in a sheltered housing scheme run by the same housing association. She was a native of Forfar and there was no other suitable sheltered housing. As her surname was different from that of her daughter-in-law it was by accident that the relationship was discovered. Under this legislation she could not get a place. There are many other rather ludicrous examples of the same kind of thing.

I have another example which is particularly applicable to both these amendments. A person who would have been quite excellent on a committee was asked to join it but refused because her parents had had their name down for a house with the association for many years. If she joined the committee they would be debarred from obtaining a house. It is quite possible, particularly with regard to housing associations, to devise any number of safeguards against the form of corruption of which I know we have had examples in council housing in Scotland and elsewhere. It is much less likely in a housing association. To quote the Minister's own argument, how appalling it is that we should deny the relations of voluntary workers the same privilege that we do not deny to the relations of councillors. It is quite illogical. I have much pleasure in supporting Amendment No. 5 and in recommending Amendment No. 6.

The Earl of Selkirk

My Lords, I should like to support what has been said on this subject by the noble Lord, Lord Carmichael. I think that there is someone in the Scottish Office who has a gift for insulting housing associations. People have written to me and said that they are greatly insulted by the words of this clause. I really do not see why it is necessary. It is common knowledge—I think my noble friend knows it—that members of a committee have resigned because if they did not do so some relative of theirs could not get a house.

As I understand it, at the present time virtually all housing associations have long lists of applicants. Most of the housing associations have closed their lists because they cannot take any more. The applicants are examined closely. They are given points. Those arrangements are approved by the housing associations, which also approve the rules by which people are allowed into houses. I really do not see why this kind of regulation should be laid down by statute.

It is not for me to encourage the Scottish Office to make regulations. I have expressed my view frequently on that subject on other occasions. Surely this is a case of a code being required that can be reasonably altered to fit the circumstances. For example, I may ask what is meant by a "close relative"; at what point does a cousin become a close relative? Is it when he is once removed, or twice removed? It is a phrase that I can see being discussed at great length in the High Court in Scotland. I do not know any legal definition of that phrase.

Frankly, I would like to see Clause 13 right out of the Bill. I do not disapprove of what the noble Lord has said. I would like to see that clause replaced by a code that can be adjusted and—something that a statute cannot be—a code of honour. A code of honour is something that cannot be put into a statute. I should like to see this clause taken right out of the Bill and replaced by a provision, in simpler language, that will be applicable to the situation.

I readily understand the desire of the Scottish Office that there should be no hanky-panky. Incidentally, has there been any abuse? Has any abuse been reported? Everything goes to the Housing Corporation and such a report could be available to the noble Lord so that he would know. So far as I know, there has been no abuse whatsoever during the last 10 or 20 years during which such organisations have been in operation. Clause 13 has been of great annoyance to many people. It is unnecessary, and I believe that the matter could be very much more easily placed within a code that stated precisely what is wanted.

Lord Gray of Contin

My Lords, your Lordships will be aware that the allocation of publicly-funded housing is an area that 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 allocation of tenancies was one of the factors that persuaded the Government to introduce in 1980 the restrictions now contained in Section 15 of the Housing Associations Act 1985.

Those restrictions preclude a housing association from granting any payment (other than those specified in Section 15(2)) or any benefit to a person who is a committee member, officer or employee, or has held such a position within the preceding 12 months, or to the close relatives of such persons. They 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 that 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.

The measures introduced in 1980 were correct, justified and have worked well but Ministers were persuaded that they posed particular problems for community-based housing associations in Scotland. Those stem from the way in which committee members of such associations and their relatives live, more often than not, in the area in which the association works. That means that the development programmes of those associations almost inevitably come to have a direct effect on the houses of committee members and their relatives. Clause 13 seeks to reduce the restrictions by permitting associations to acquire houses from those people in the course of rehabilitation projects and to grant tenancies to them. Those are the two areas where the problems are particularly acute and where they differ materially from those experienced by housing associations generally.

I will have something to say about the detail of the noble Lord's amendment in a moment, but it 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 such people to the community from which they might have moved—or been obliged to move—some time ago, I have to say that I see this as a distinctly different category of allocation from those provided for in paragraph (b) of the 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 here.

5.15 p.m.

The amendment of the noble Lord, Lord Mackie of Benshie, to which the noble Lord spoke, is very similar and perhaps I may comment upon it. Section 15 of the Housing Associations Act 1985 (formerly Schedule 16 to the Housing Act 1980) precludes a housing association from granting any payment, other than those specified, or any benefit to a person who is a committee member, officer or employee, or has held such a position within the preceding 12 months. The bar extends to close relatives of such persons and businesses in which such persons have a personal interest. That restriction was introduced in 1980 as a result of indications of abuse (albeit not in Scotland) of the more relaxed arrangements then applying and as a safeguard against the possibility of similar occurrences in the future.

Ministers have recognised for some time that the current legislation affects community-based housing associations particularly because of the congruence of the area of operation of such associations with the area of residence of the bulk of the management committee and voluntary officers. The renovation programmes of such associations will therefore touch on the interests of their committee members, voluntary officers, or their relatives who are resident in houses which may be affected by the programme. In that situation there is a clear need, on grounds of equity, for the association to be able to buy a house from, and offer a tenancy to, those people when their existing houses are directly affected. Clause 13 of the Bill gives associations that ability and makes allowance for people who have moved out of the area recently, or on a temporary basis.

I recognise that there will be occasions when voluntary officers and committee members of housing associations and their close relatives feel that they are disadvantaged in comparison with members of the general public on account of those provisions. But housing associations, in common with all organisations which receive substantial sums of public funds, must be seen to be fully accountable for their actions and be above any suspicion.

I cannot accept the amendment proposed by, the noble Lord, Lord Mackie of Benshie, since I believe that the sensible controls introduced in 1980 would be seriously eroded by it. I believe that Clause 13 deals with the two distinct problems facing community-based housing associations, which are unique to them, in a way that they will welcome. The fact that the legislation takes precautions against abuse does not of course, carry any implications, whatsoever that abuse is taking place. I make that absolutely clear. Indeed, I wish to reaffirm the Government's confidence in and, indeed, gratitude to all those who work for the betterment of Scottish housing through voluntary effort.

I return to the amendment of the noble Lord, Lord Carmichael. The amendment could not be accepted even if I was of a mind to do so, because in its present form it is technically flawed. The new sub-paragraph (b) that is seeks to substitute in place of the existing terms of the proposed Section 15(A)(1)(b) of the 1985 Act, begins in line 37 of the Bill and not in line 27 as stated in the amendment. More importantly, it is the Tenants' Rights, Etc (Scotland) Act 1980, not the Housing Associations Act 1980, that requires housing associations to publish the rules that they adopt in considering the admission of applicants to housing lists, priority of allocation of dwellinghouses, transfer of tenants to houses owned by other bodies, and exchanges of houses. Moreover, the Housing Associations Act was enacted by Parliament in 1985 and not in 1980. I know that the noble Lord will realise that I am not nit picking or trying to be difficult, and acknowledge that such a flaw is not something that could be accepted.

One or two quick points were made which I shall now deal with. My noble friend Lord Selkirk spoke about a code. There has been abuse in England. A code would not provide a sufficient safeguard for public funds, nor real accountability. We take the view—and, on reflection, I do not think my noble friend will disagree—that it is essential that people who are engaging voluntarily in these activities should be protected. What we are seeking to do we see as a protection much more than as a special discipline for the effect suggested.

My noble friend also asked about the definition of "close relative". There is no statutory definition. Such a definition would perhaps create as many uncertainties and anamolies as it would resolve, but I do not believe any of us need to think very long or hard to define "close relatives" within our own minds.

The noble Lord, Lord Carmichael, said that restrictions do not apply to local authorities. As the noble Lord said, local authorities have very strict rules to prevent abuse. In addition, local authority members are accountable directly to the electorate.

In view of the defects in Amendment No. 5 and for the reasons I have outlined regarding Amendment No. 6, perhaps the noble Lord will be prepared to withdraw the amendment.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for that reply, and particularly for pointing out my mistake in the wording of the amendment. I shall certainly look at that with great care. Obviously it is not an amendment that could be accepted in its present form, but I give notice to the Minister that I shall pursue the matter.

I can see the Minister's problem. He is definitely trying to be honest about how houses are allocated. I am not being personal, but it seems to go back to the fact that we do not trust too much people who are in housing. All of us who have had experience know that the temptations of being able to help people—close relatives or whoever—are very great. With local authorities there have been all sorts of wild accusations in that regard, but considering the thousands and thousands of local authority houses let over the past 20 years it is remarkable how few dishonesties have been brought to light, or which have actually occurred.

I am very much persuaded by the noble Earl, Lord Selkirk, on the question of a code of practice. I hope the Minister will pay a great deal of attention to that proposal. This provision is causing offence among many people in the housing associations. I have had a number of letters from people who are giving up this work, as have other noble Lords. We must have better objective criteria than at present we have been told about, and a code of practice might provide that. For instance, in many cases people have friends to whom they are much closer than they are to their so- called—by any definition—close relatives. I am sure this applies to all of us. I seldom see some of my close relatives and no doubt keep a good relationship with them because of that. There is a temptation with very close friends; and therefore we must provide something which is objective. It is quite wrong, with all the wit of the Minister and his colleagues in the Scottish Office, that we cannot provide some sort of code of practice that will help to get over this sticky problem. It is a human problem, not a political one.

I hope that the Minister will take seriously what has been said in this debate. For the sake of the people who approach me, I shall find it impossible to allow this to go through without at least registering a protest on Third Reading if the Minister is not able to offer us something.

The Earl of Selkirk

My Lords, before the noble Lord withdraws his amendment, I should like to be quite certain of what I heard my noble friend say: that there is no report of abuse in the housing associations in Scotland. Can I be quite clear that that is what my noble friend said?

Lord Gray of Contin

Yes, my Lords; I indicated to my noble friend that there had been abuse in England but that there had not been abuse in Scotland. My noble friend heard me correctly.

The Earl of Selkirk

My Lords, I thank my noble friend.

Lord Carmichael of Kelvingrove

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 7:

After Clause 17, insert the following new clause:

("Scottish Housing Advisory Committee.

. There shall be appointed by the Secretary of State a committee to advise him on Scottish housing. The committee to be known as the Scottish Housing Advisory Committee shall consider the problems related to housing in Scotland and make recommendations to the Secretary of State. The subjects studied and reported on shall be at the request or with the approval of the Secretary of State. Its reports shall be made to the Secretary of State and shall be published.").

The noble Lord said: My Lords, this amendment was tabled in Committee and withdrawn because of pressure of time. The idea behind it is that we do not seem to be very good in Scotland—and this goes across the party spectrum—at anticipating housing needs and planning far enough ahead in a coherent way for housing problems. We tend perhaps to be a little airy-fairy and put the right solutions in the back of an envelope when in opposition—this applies to both sides—and do not think them out as well as we ought to.

The amendment, therefore, takes the opportunity of this Bill to propose that a group of people, who will have varied experience, be set up as the Scottish Housing Advisory Committee. I am not speaking of a highly paid group of experts, a quango, sitting permanently. I am talking about a group of part-time people—perhaps with a small secretariat—who would be able to assist the Secretary of State to look at housing across the whole spectrum in Scotland.

This would be an outside advisory body, not tied to the Scottish Office or to the Scottish Home and Health Department, taking the long view on demographic, economic and other tendencies of the population of Scotland generally. It would look at housing stock and at the future of housing stock, its state of repair, age, value of refurbishment, and all such factors. The group would be working for the Secretary of State either at high pressure or, at other times, perhaps at a slightly more leisurely pace.

The proposal is based to some extent on the debt we owe to the Cullingworth report from which so much of our housing thinking has come. The Cullingworth report was produced in 1967, which is nearly 20 years ago. The Minister, who has been very closely involved in these matters for a long time now, will no doubt pay tribute to the work of Cullingworth and will realise that many of the things we are doing in housing now is due to Cullingworth. I notice from my copy of the Cullingworth report how far back it goes. It cost 10s. 6d. in 1967, which is a long time ago. We are still using it fundamentally. It was this report which sparked us off. We should consider whether we need another Cullingworth report.

I suggest that the Minister should take away this amendment and consider the possibility of setting up a small Scottish housing advisory committee to look at the problem in a general way, and also recommend to the Secretary of State that a more powerful and a deeper study of Scottish housing problems should be made. This proposal is made in a non-party spirit. I beg to move.

5.30 p.m.

Lord Taylor of Gryfe

My Lords, I should like very much to support the amendment in the name of the noble Lord, Lord Carmichael of Kelvingrove. I realise that in their election manifesto the Government at one stage promised the abolition of quangos, or at least a reduction, and they have had some success in that regard. However, some quangos are of great value. They enable the Government to tap the knowledge and resources of people who would not normally be elected by the political processes of local authority elections.

I regard the housing problem of Scotland as of such significance that the Government would do well to call on the knowledge and experience that is available in this field, and which is concerned to offer them advice. There are plenty of precedents. For example, the Government obtain valuable advice from the Economic Committee. Some of us were members of that committee some years ago when we helped to guide the Secretary of State for Scotland—or at least offered advice to him—on Scotland's economic problems.

The housing problem is a very important one, as the Minister well knows, and involves the whole problem of urban renewal. The fact is that the Scottish housing scene is now entirely different from what it was, say, 20 or 30 years ago when there was a sharp division between those on one side of the political fence who were all in favour of building local authority housing, and those on the other side who preferred the extension of private ownership of housing. For example, as a result of the examination of this Bill, the great variety of different systems used in running housing estates has become apparent. We see that there are housing associations and that many local authority estates are now divided between private ownership and local authority rented property. I think that developing a sensible and worthwhile housing policy can make some contribution to Scotland's welfare.

I must say that following the local authority elections last week I doubt whether there is any one local authority in Scotland on which the Government have a majority. There may be a small one which the noble Baroness, Lady Carnegy, may know about, but I suspect that the entire body of local authority representatives is opposed to the Government. When such a thing happens, entrenched attitudes for and against the Government tend to develop in politics.

The noble Lord, Lord Carmichael, suggested that this matter should be taken out of the area of political confrontation. He suggested that we should look at this great social problem of urban renewal and the deterioration of the housing stock in cities such as Glasgow with the benefit of a housing advisory committee If I were the Secretary of State for Scotland I should welcome very much my ability to call on the experience of some people who are not involved in the day-to-day conflict of local authority versus government politics. I very much support this amendment and I hope that it finds acceptance in the same spirit with which it was moved by the noble Lord, Lord Carmichael.

The Earl of Selkirk

My Lords, I should like to support what the noble Lord has said. If we look back 65 years to when for the first time the Government of this country began to make themselves responsible for housing, I think we should not regard this programme as very successful. I think that most of us would be disappointed that during the whole of that period we were not more successful in clearing out the debris from the centre of our cities.

What is the reason for that? It was touched upon by the noble Lord, Lord Carmichael. When any party is in opposition it thinks about housing and devises a plan. Sometimes it is a wild plan and sometimes it is a good plan. However, the point is that if a housing plan is changed every four or five years it will never work properly. A housing plan must work for a steady 20 years before one can say whether it is good or bad. I believe that something such as is now proposed, a continuing body that reviews housing (which is inevitably intensely political) over a wider and broader atmosphere would be of enormous help to the Secretary of State and would be of exceptional help to this country in keeping the essentials straight. I shall say a little more about this subject presently, but I believe that this suggestion should not be turned down lightheartedly. I am given to understand that there was a housing advisory council until about 1980, though I am not quite sure. I think that this proposal should not be thrown aside as just offering a wild quango. There is room here for a broad non-political policy which could he of lasting benefit to this country.

The Earl of Kintore

My Lords, I should like to support this idea but I would point out that it sometimes takes five or six years to put in the services required for houses. Wild ideas about building houses here, there and everywhere are very apt to come out, but this pays no regard to the services and the cost of putting in those services, which is a very great fraction of the total cost. I think that this is an excellent idea but that services should very definitely be considered.

Lord Gray of Contin

My Lords, I have listened with great care to the noble Lord, Lord Carmichael, and I am afraid that I do not find his arguments convincing. When noble Lords have heard what I have to say I think that they will agree with me. I also listened very carefully to the noble Lord, Lord Taylor of Gryfe, who is certainly not without experience in these matters, and again I think that some of the points he made are worth commenting upon. I shall do so in a moment or two.

The Housing (Scotland) Acts between 1935 and 1980 required the Secretary of State to appoint a committee such as is suggested here. Section 75 of the Tenants' Rights, Etc. (Scotland) Act 1980—my noble friend is perfectly correct—abolished the requirement in Section 167 of the Housing (Scotland) Act 1966. What is proposed in the new clause that is before us would more or less take us back to the position before 1980.

I accept that the new clause proposed would leave to the Secretary of State the decision on what the new committee would study, and thus the new body's powers would be less wide than those of its predecessor. This restriction, however, to some extent highlights, I believe, why a reactivated Scottish housing advisory committee is unnecessary. The Secretary of State can, and indeed does, take steps to seek advice on current topics of housing interest without the need for a statutory committee and the administrative back-up which this requires.

Let us look for a moment at what happened in the 1970s. The then committee met very infrequently indeed during that decade, under both Conservative and Labour administration. Indeed, for a time between July 1977 and March 1978 the membership term of members of the committee had expired, and the then Labour Government had not seen fit to make new appointments. So during that period the committee could not meet. Moreover, much of the best output of the committee in its pre-1980 incarnation was the production of reports on current issues. Those reports emanated largely from subcommittees set up for the purpose which consisted largely of co-opted members. They were therefore virtually ad hoc committees.

In 1980 the Government took the view that the sensible way to deal with pressing problems of public importance was to set up ad hoc inquiries, and that remains their view. I believe that the arguments deployed then are at least as strong now. Since 1980 we have seen the Select Committee on Scottish Affairs look at housing (for example, condensation and dampness), and if there was felt to be a need for it to study other housing problems, it could of course do so. Furthermore, since 1980 the system of consultations between the Secretary of State and CoSLA has greatly developed. The Minister for local government and the environment meets CoSLA's housing committee twice annually, primarily to discuss housing support grant matters. However, these discussions traditionally extend much more widely into any aspect of housing which the convention wishes to cover. The Secretary of State is therefore kept very closely in touch with the views of local authorities and the issues of the day generally.

We do not need an additional quango and its attendant bureaucracy. We do not need to have a statutory body advise the Secretary of State. There are many and varied sources of advice available to Ministers. If there are gaps, ad hoc committees can be formed. It is better, however, to disband these committees when their work is complete, rather than to have a standing body.

The noble Lord, Lord Carmichael, spoke about anticipation of housing needs and problems and the housing plan system under which local authorities, in consultation with other organisations like the Scottish Special Housing Association, set out their priorities for housing provision at regular four-yearly intervals. I believe that that is an effective means to anticipate housing needs and problems. I do not believe that we need a seperate committee—an extra structure—on top of that.

The noble Lord, Lord Taylor Gryfe, spoke of the wide range of expertise that could be brought in to advise the Secretary of State on housing policy. I do not disagree with that, but that wide range of expertise is there anyway. Indeed, there was the distinguished membership of the Scottish Housing Advisory Committee prior to 1980, but, as I outlined a little earlier, although it was distinguished, it was not active.

I accept the suggestion in the spirit in which it is made; it is purely non-political. But I do not think that it would be an improvement on what is available to the Secretary of State at the moment, particularly with the Select Committee system that we have in operation which has the power to look at pretty well anything that it wants within Scotland and with the facility for ad hoc committees to be set up from time to time for various purposes. I think that the position is well taken care of, and I ask the noble Lord to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, the Minister will realise that I am a little disappointed with his reply. He said that the Secretary of State had plenty of expertise to help him look at current problems. We are not desperately concerned about that. We know that there is plenty of expertise to look at current problems, but frequently a solution is found that is neither long term nor lasting, nor even at the end of the day economic. The matters that concern me are, for instance, the replacement of about 16,000 houses a year in order just to stand still, let alone build for new stock.

The noble Earl, Lord Selkirk, took up the point that I made about the quick work done by one political party, with a change of plans by the next. He said that housing was a highly political subject and we cannot put an end to that. By and large, I suggest that it is the money aspect that is highly political. There is plenty of scope for a purely technical and sociological consideration of the massive housing problems. Whatever government happen to be in power could then decide their priorities within the plan. That is not a perfect solution, and there would be ragged edges, but that is roughly the way that I see it.

I was not calling for a permanent quango with a large staff. I suggested a much smaller group. After a preliminary or pilot scheme to look at the long-term prospect for Scotland and Scottish housing, the Secretary of State may think that deeper consideration of the housing problem and the way to give people decent accommodation is required. I am disappointed with the Minister's reply. I hope that this is the beginning of a long struggle to set up an organisation to establish long-term future planning for Scottish housing. I should be only too pleased to participate in the struggle towards a more rational look at housing policy. In the meantime, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Lord Mackie of Benshie moved Amendment No. 8:

After Clause 19, insert the following new clause:

("Functions of local authorities with respect to persons who are homeless or threatened with homelessness.

Amendment to Housing (Homeless Persons) Act 1977

.—(1) The Housing (Homeless Persons) Act 1977 shall be amended in accordance with the following provisions of this section.

(2) In section 1(2) (homeless persons and persons threatened with homelessness) after paragraph (c) there shall be inserted the following paragraph— (d) it does not provide the ordinary facilities of a residence and it is inappropriate for his needs, or it is unreasonable for him to continue to live in it".

(3) In section 4 (duties of housing authorities to homeless persons and persons threatened with homelessness) after subsection (6) there shall be inserted the following subsection— (7) Where a local authority has a duty under (4) and (5) above either to secure that accommodation does not cease to be available or to secure that accommodation becomes available for the applicant 'accommodation' shall be defined as a separate dwelling house that shall conform to section 89 of the Housing (Scotland) Act 1966 and section 14 of the Housing (Scotland) Act 1974.

(4) In section 21 (citation and extent) after subsection (4) there shall be inserted the following subsection— (5) Sections 1(2)(d) and 4(7) shall extend only to Scotland.

The noble Lord said: My Lords, this amendment stands in my name and that of the noble Lord, Lord Carmichael. This matter was brought to our attention by Shelter in Scotland. We are trying by this amendment to put right in Scotland at least an extraordinary situation that has arisen by a legal judgment of your Lordships' House. It has given the word "accommodation" a definition which apparently means accommodation and little else. That has done a great deal of damage to the Housing (Homeless Persons) Act 1977, although the judgment was given no doubt absolutely correctly. We should like to insert a new clause so that in Scotland the Act can operate as it did before that decision.

I must say a little about the decision. The Puhlhofer family and their two children lived at a guesthouse in one room which contained a single bed, a double bed, a baby's cradle, a dressing table, a pram and a sterilising unit. There were no cooking or washing facilities in the room, and the three bathrooms in the guesthouse were shared by 36 people. The Puhlhofers had to eat out and to wash their clothes in a launderette, and it all had to be paid for from £78 per week state benefit.

The judgment, which was supported by all the noble and learned Lords who were sitting, stated that that was accommodation and that the local authority had no need to rehouse or otherwise assist the family. "Accommodation" needs to be defined rather more widely in the Act. In Scotland we have an opportunity to put that right. The judgment states: it might in certain circumstances be unfit for human habitation for the purposes of Part II of the Housing Act 1957 or might involve overcrowding within the meaning of Part IV". A legal definition has been given that makes nonsense of the Act that was passed in 1977 for the benefit of homeless people.

I do not think that I need say much more at this time as a number of other noble Lords will speak on the matter. This is a chance at least in Scotland to put right a terrible anomaly. Apparently accommodation even worse than that described would not make people homeless. I am sure that in common sense sour Lordships will agree that a change in the law is necessary. We have a chance to do that here. I hope that the Minister will give us a proper reply, as he may be becoming more reasonable. I am sure that he will want to make up for his terrible Freudian slip when he asked the noble Lord, Lord Carmichael, to withdraw his—that is, the noble Lord the Minister's—amendment. This would be a suitable chance for urn to make up for that. I beg to move.

Lord Elwyn-Jones

My Lords, I rise to support the amendment. The case in question arose from proceedings by way of judicial review of a decision of the Hillingdon Council. The noble Lord, Lord Mackie, has described the conditions in the accommodation that was provided for the family of four. They had one room. Unfortunately, we are not told the size of the room. Their sole provision was a double bed for the husband and wife, a single bed for the four-year old baby, and a baby's cradle. The remainder of the provisions were a dressing table, a pram and a steriliser unit. The family had no cooking or washing facilities, as the facts show. There were three bathrooms in the guest house which accommodated 36 people. The conditions were of the utmost squalor, and inevitably so. The family had to eat out and use the launderette for their washing. The expense of doing those things absorbed their state benefit of £78 a week.

The noble and learned Lords who determined the case had of course to interpret the Housing (Homeless Persons) Act 1977 as they found it. It was not accommodation in any real, acceptable sense of modern living conditions. "Accommodation" is not defined in the Act and now is the opportunity for the House to put the matter right by attempting a definition of "homelessness' which would enable a family to apply for accommodation and would impose an obligation upon the local authority to treat it as homeless and place the local authority under an obligation to find accommodation.

What is proposed in the amendment is that there should be inserted in the definition of "homelessness" the words that the accommodation: does not provide the ordinary facilities of a residence and it is inappropriate for his needs, or it is unreasonable for him to continue to live in it. If those tests were applied to the facts of the case, I submit that a court would inevitably say that that was a homeless family which should have proper provision made for it. Parliament now has an opportunity to put the law right in that regard.

The Law Lords have to apply the law as they find it. They unanimously found and came to the conclusion that the noble and learned Lord, Lord Mackie—he sounded so learned in his discourse that the compliment fell easily from my lips—described. The Law Lords came to the conclusion that in the interpretation of the language of the Act, that family could not be described as homeless within the meaning of the Housing (Homeless Persons) Act or be entitled to look to a local authority for accommodation. If that decision were applied generally it would be a mask for a great deal of genuine, hopeless homelessness. I think therefore that this is a good opportunity to put the matter right.

I do not know where the matter stood in another place. The eminent and highly reputable newspaper the Scotsman reports: The Scottish Housing Minister, Mr. Michael Ancram, is considering the impact of this ruling and deciding whether or not he should amend the homeless persons Act in such a way as to restore its original intentions. We take hope from that observation that the sympathetic heart and mind of the noble Lord the Minister will move in a similar direction and reform the law to make it more suitable and civilised for the homeless persons of Scotland so that they too may receive proper shelter and accommodation.

Lord Gray of Contin

My Lords, the noble Lord, Lord Mackie, used all his powers of persuasion, even to the extent of suggesting that I make good an earlier error and accept this amendment, and the noble and learned Lord, Lord Elwyn-Jones, also used all his legal techniques to try and persuade me. I can tell noble Lords that I am not beyond being persuaded on this issue which is causing a great deal of anxiety to many people.

The new clause seeks to amend the Housing (Homeless Persons) Act 1977 to take account of the alleged implications of the Law Lords' recent judgment. The noble and learned Lord, Lord Elwyn-Jones, commented on the matter. As I understand it, the noble and learned Lord, Lord Brightman, in his judgment did not say that any accommodation would be adequate to render the applicant outside the scope of the Housing (Homeless Pesons) Act. As I recall it, he said that the accommodation would have to be capable of accommodating. There is still an element of discretion to be exercised by the local authority. I do not want noble Lords to think that I am nit-picking, because this is an important matter, but where we are suggesting a change in the law I know that your Lordships would be as anxious as I am that we get it right.

Lord Elwyn-Jones

My Lords, the mere physical capacity to accommodate those four people—a room in which they could all be contained—we submit is not a proper test of whether it is a home and prevents them from being called homeless. That is the snag.

Lord Gray of Contin

My Lords, yes, I take the point which the noble and learned Lord made. As noble Lords may be aware, the matter was raised when the Bill had its Report stage in another place early in March. It is also a matter which I understand is of some concern to Shelter which has been in correspondence with us on the point. When the matter was raised with us two months ago, we indicated that we wished to take it away for further consideration and advice. In the interim, we have been looking closely at the implications of the judgment and we shall be writing shortly to Shelter to let it know of our conclusions.

Having considered the implications of the judgment carefully, we have come to the conclusion that it would be premature to consider the possibility of amendments to the Housing (Homeless Persons) Act unless and until it is demonstrated that local authorities are taking a different approach to the discharge of their responsibilities to homeless people. Accordingly, we shall monitor the position through the regular quarterly statistics and other information that comes to hand. We should, of course, welcome any supplementary evidence which Shelter or any other voluntary body may care to submit to us.

I do not know whether the noble Lord, Lord Carmichael, has had an opportunity to consult the local authorities about his proposal. If he has, it may be interesting to hear their views. Having said that, I have also to deal with the technical difficulty of the amendment. Indeed, I believe that it would achieve quite the opposite effect to that which the noble Lord has in mind. This is because the amendment says that, 'accommodation' shall be defined as a separate dwelling house that shall conform to section 89 of the Housing (Scotland) Act 1966". However, Section 89 of the 1966 Act defines a house that is overcrowded. The amendment is therefore saying that the accommodation shall be overcrowded. Presumably, what is intended is that the accommodation should not be overcrowded as defined in Section 89. But this is not what the amendment says. The noble Lord will appreciate that it would be wrong for me to encourage him to move forward with it. In the circumstances, particularly with regard to the technical defects of the amendment, I wonder whether I may ask the noble Lord to withdraw it. Your Lordships will probably wish to consider the matter a little further. All of us, I believe, seek to move forward in the best possible way here. Certainly our advice at the moment is that we should go with care.

6 p.m.

Lord Carmichael of Kelvingrove

My Lords, I can certainly understand the Minister's problem here. I am, of course, aware, too, of the other problems that have been faced by local authorities since the Act was originally put on the statute book. This case has shown a gross mistake in the Act. There is no question of the Law Lords doing other than what was absolutely correct from the point of view of the sheer definition of accommodation. However, the decision in this case has been much tighter than anyone has envisaged. According to the papers that I have before me, the noble and learned Lord, Lord Denning, and the noble and learned Lord, Lord Wheatley, before appeal, took much the same view—what I would perhaps call the commonsense view taken by the rest of us.

It was arising from the gross anomaly that appeared following the highest legal interpretation of the Act that this amendment was put down. I accept that it will not meet the Minister's needs. Having also read what was stated by Mr. Ancram in another place, I realise that it must be withdrawn, although that is not my job. The amendment was moved by the noble Lord, Lord Mackie of Benshie. We are therefore aware of the problem. Nevertheless, we are now at the Report stage in the House of Lords. This matter first appeared at the Committee stage in the House of Commons. It has been pushed back and forth since then. We want reassurance that some action will be seen either at Third Reading or in another place when the Bill goes back there for consideration of the amendments that we have made.

Lord Stodart of Leaston

My Lords, I found a little discouraging my noble friend's remarks about monitoring by the local authorities. This could seem to take us into the far distance. I was hoping, having heard the facts of what seems to be an extremely strong case for the amendment, that my noble friend would be able to go as far as saying that his ministerial colleagues would come to a conclusion before the Bill has its Third Reading.

Lord Mackie of Benshie

I am extremely disappointed in the Minister. I shall not mince my words. It is scandalous, when the evidence is clear and following the feeling expressed in the House, that he should not promise to consider the arguments and to bring forward an amendment that is technically correct. Here we have a case in which a local authority has already gone to the House of Lords and has taken advantage to appeal when it is obvious to everyone in the House that there is gross overcrowding and that the accommodation is grossly unfit for a family to live in. For the Minister to say that he wants to test it further shows an insensitivity that I did not think him capable of. I shall certainly withdraw the amendment. There will, I trust, be two amendments put forward at Third Reading. Certainly there will be one from myself and my noble friends on this side. I hope and trust that the Government will also have the good sense to put one forward. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Wells-Pestell)

My Lords, in calling Amendment No. 9 of the noble Earl, Lord Selkirk, I have to point out to your Lordships that if the amendment is agreed to, I cannot call Amendment No. 10.

Schedule 1 [Amendment 1980 Act]:

The Earl of Selkirk moved Amendment No. 9:

Page 21, line 51, leave out from beginning to end of line i2 on page 22 and insert—

  1. ("(i) the rules of the landlord, registered in teens of sections 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
  2. (ii) such exemption has been granted (whether or not retrospectively) and is in force; or")

The noble Earl said: My Lords, in this very obscure Bill and this even more obscure schedule a fundamental change is sought to be brought out. It seeks to say that at no time in the future will it he practical to form a charitable housing association in Scotland. The reason is simple. If such a charitable association were formed, it would be compelled under the Bill to sell at a discount. I shall read from an Inland Revenue letter about what happens when you sell at discount. This is a communication following a society's request for advice about its charitable position. As there are no charity commissioners in Scotland, direct contact has to be made with the Inland Revenue. The Inland Revenue claims branch states: In response to the two points raised by you, the Inland Revenue Department would have no objection to such sales so long as the sales are at not less than market value".

This means that if any charity accepts a sale at discount, it ceases to be a charity. As, under the Bill, they have an obligation to do so, this means that if they refused to sell, they would be hauled before the court and made to sell. The effect, hidden in a distant schedule that should, to my mind, have formed a major part of the Bill, is that no future housing charity will be formed in Scotland. This is a serious matter. No one will make a private donation to anything except a charity. This is therefore cutting off any sort of assistance from the outside.

I was struck by the opening words of my noble friend on Second Reading that the Bill contains no new principle. Has the noble Lord never studied how the Housing Corporation started? It was way back in 1961, with a further development in 1964, until it finally became a big organisation in 1974. It was clearly laid down that the aim was houses and hostels to let. What are the Government doing? They are arranging to sell these properties—the very opposite to the purpose for which the Housing Corporation was formed. It represents a complete turn round of policy. It is the sort of situation—I say this with great respect to the noble Lord, Lord Carmichael—in which an advisory council would say, "You cannot turn housing policies upside down and expect nothing to happen". This is breaking the basis on which the policy was established. Noble Lords may recall the words spoken by Mr. Crosland—that it was intolerable that the country should only have a choice between owner occupation and council houses. What has happened? The noble Lord replies that we spent £600 million on the corporation last year. He did not mention that this was across Great Britain, not just Scotland.

We are building the equivalent in Scotland of about 3,000 houses a year. In an answer given to me by the noble Lord, Lord Elton, it was said that since 1979 we had lost 400,000 houses to let. If you built 3,000 houses for 130 years you would get to something like 400,000. The purpose of this Bill has been completely twisted. The Government have tried to make one thing matter—the right to buy. We must recognise that it is the better-off people who can buy and that there are many who can never even hope or look to buy. They are the people who need our attention above all else. Anyone who has seen a housing association at work knows the quality of the work. The associations have done things, for instance in tenement houses in Scotland, which the local authorities have failed to do and could not do. But the housing associations did them on a smaller scale with the utmost success and they should remain able to do them.

I was at Leith last weekend, talking to one of the household managers. He knows quite a bit about it. He said, "I am staggered at the number of people who want rented property". That is the position. Their numbers are enormous; and they will not be able to buy. That is why I object to selling houses which were originally built and intended, under the housing corporation, for rented property.

He went on to say something else which I thought was strange. He said: "Those who own flats come to me and say, 'Will you please buy them? We'd rather be renting property. We can't afford the charge'." We must face the fact that there is an increasing number of people who are unable to face the mortgage charge. That is a regrettable feature, because 20 years ago the number of people who failed to pay the charge was statistically unpresentable due to the fact that it was so small. It has grown recently, To my mind, it is not wise or proper to offer too much encouragement to people to take on too heavy a burden.

There is another matter. What about the racket? I wonder whether your Lordships realise what is offered by the Government. You build a house, you put in a tenant for a preliminary period of two years; he then buys the house at half price. He lives there for three years and then probably sells it at three times the price that he gave for it. People who are more interested in money than in houses already have cottoned on to this system. They are starting already. I have been told of four or five instances where this has already happened.

There is no queue waiting to buy houses. You can get a mortgage straightaway today. Of course you have to pay the full amount; I quite agree. But queues exist, so far as I know, in every housing association in Scotland. At every one there are 50, 100 or perhaps 1,000 waiting to come in. That is what they want; that is what the country wants. If I may say so, that is really the popular thing that the Government should do. Popularity is not something to be ignored entirely; and it would be quite wrong to do so. I ask for a very small item. I am not asking the Government to change their whole policy, but let us please keep the charitable houses as such—the houses which deal with charitable purposes and which are accepted by the Inland Revenue as charitable. Let those people buy who really want to buy—and there are many. I do not want to discourage them. They can get houses without difficulty. But do not let them take houses away from the number which are specially required for people for rent.

There is one statement about which I must reproach the noble Lord. He said that charity is a device to avoid selling. Please let us hear the noble Lord repudiate that statement. It was not his fault; it was no doubt part of the brief that was given to him somewhere in the depths of the Scottish Office. But it is a wicked statement which should never have been made. I beg to move.

6.15 p.m.

Lord Carmichael of Kelvingrove

My Lords, I should like briefly to say something on this point. The noble Earl, Lord Selkirk, has made a powerful case. The point he made that worried me most was that if charities were selling off their houses, if they were forced to do so because they were being asked by the tenants, there would be no incentive for anyone thereafter to buy blocks or build blocks for charities. One housing charity—I do not know the status of it but I have some association with it—is Christian Action. It has a very special kind of use for its houses. It is not just a case of trying to solve someone's housing problem. It uses its houses to try to solve a much wider problem than just the housing problem—a much wider family problem. Its houses, I should think, are really worth much more to it than they are to any one individual family.

I think that the Government must look very carefully at the whole question of charitable status—obviously at a charity such as Christian Action which is already established but also at any new group that may come along; perhaps a specific group dealing with alcoholics or with another form of the Link project. They would not be able to do it because they would not have the status and certainly they would not raise the money if people thought they were going to recondition property which, in a couple of years, would be bought by whoever was put into it. I hope that the Minister has a good answer to this problem. I think that we are all grateful at least for his extension to November 1985 in Amendment No. 10. It is a good effort but it is not really quite enough. We want something a little more permanent than that.

Lord Mackie of Benshie

My Lords, I think that the logic of this amendment is inescapable. Nobody really can foresee the future so far and so clearly as to say that there will not arise a cast-iron case for a charity to deal with a hundred different kinds of needs in housing. Certainly no charity could possibly embark on their schemes if they knew that these houses would be bought under this Act by the tenants after a certain time. I think the logic is there. The Government have given way; and when I say they have given way I mean that they have very sensibly taken it up to 1985. The charity can be examined with great care and I think it is absolutely logical that you cannot prevent a charity from doing good in the future in the housing field.

The Earl of Perth

My Lords, the noble Lord, Lord Mackie of Benshie, said the Government have given way. I am afraid that I cannot go along with that. I support wholly the reasons that the noble Earl, Lord Selkirk, has given for his amendment. I recall that at the Committee stage I moved an amendment asking that the date be removed because it seemed to me that to withdraw the right of any philanthropist in the future to help set up a charitable housing association was something which was totally wrong. The noble Lord, Lord Gray, the Minister, speaking in Committee—and I refer to col. 114 of the Official Report of 28th April last—said: To make such a broad exemption"— that is, for charitable housing— would open the way to what would be no more than a device to avoid the right-to-buy provisions". I find that that remark is really one that should not be made. It is allowed to England and Wales but not to Scotland. Is the noble Lord seriously saying that we will cheat but that the English and the Welsh will not? I find that this is something which should not be said by a Minister. After all, he is a Minister—often a very good one—for Scottish affairs. At the same time, he went on to say that it is all right if there are special needs. It will extend very substantially to those charitable associations that would be eligible; but not to all of them. The noble Lord admits that any new charitable association in Scotland would lose its charitable tax status if the stock was eligible for the right to buy. This is a tragic example of going halfway to meet what we want. I very much hope that the House will go along with the noble Earl and his amendment.

I am not sure whether I should bring personal considerations into the matter, but I came down from Scotland this afternoon for this one purpose; for this one amendment. It happens that today is also my birthday. If the amendment is accepted, I shall have had the best birthday present possible!

Baroness Carnegy of Lour

My Lords, before the Minister replies, perhaps I may say that we require an explanation from him about why the Government are arguing that, whereas tenants should have the same rights in Scotland as they do in England to buy their houses, it should be less possible in Scotland to set up a charitable housing association than it is in England. Why should we be denied that right just because the definition of a charity and the way in which a charity is established, is different? If there are technical problems, then we must hear about them and think about how they can be overcome.

My noble friend Lord Selkirk has made a major point. It is a completely different one from the general housing association point where the tenant's right to buy is, to my mind, the overriding consideration. We are thinking about a very particular field of charitable activity and it is something about which I am sure Members of your Lordships' House feel the same concerning Scotland as they do for England. I hope the Minister will give us a very detailed reply.

Lord Gray of Contin

My Lords, I shall certainly give a detailed reply if that is the wish of the House. However, perhaps I may first deal with one or two of the points raised by the noble Earl, Lord Selkirk. With this amendment we enter a field in which emotions have run high. Noble Lords have spoken both here and in Committee in terms which imply that the present Bill will damage housing associations' work for the most needy sections of the population. We have considered the effect of the right to buy on the housing association movement most carefully, and the Bill now before your Lordships with Amendment No. 10, which I shall be moving shortly, makes provision for exemption for the vast majority of cases where the right to buy would not be appropriate.

The noble Earl, Lord Selkirk, made one or two statements which I think I must correct. He said for example, that tenants can buy recently-built houses at half price. That is simply not so. Discount is restricted on newly-built or modernised houses to prevent their sale at less than the landlord's debt in providing the house. The noble Earl also raised the question of rented versus owner-occupier property. People ho can and want to buy should be able to do so. The resources released can be used to provide houses for renting. The noble Earl also suggested that people are selling in order to realise profits on houses bought under the right to buy. We have absolutely no evidence from our research or otherwise that people are exercising the right to buy for that purpose.

I also suggest that the argument that right-to-buy sales would have a serious effect on the rental stock has been advanced since legislation was first introduced in 1980 to give secure tenants in the public sector the right to purchase their homes. However, it is not borne out by the facts. The research report Council House Sales in Scotland, published in May 1985, found that the vast majority of tenants who bought their houses did so because they wished to continue living in them, and only 2 per cent. of buyers quoted the ability to move subsequently as one of the reasons for buying. Very few houses would therefore have become available for re-let in the normal course of events even if they had remained in public sector stock.

There is no reason to believe that the position will be materially different in the housing association field, especially since associations are expected to work in consultation with local authorities in allocating tenancies. However, many houses provided by housing associations are for people for whom more care is needed. They may be old, or disabled in some way. They may be younger, just starting out and still requiring a caring environment. In all these areas, housing associations operate with tremendous success and I pay tribute to them. Many of these associations operate on a charitable basis which gives them a variety of benefits. They gain exemption from liability to tax; local authorities may reduce or disapply their rates and perhaps most important they can receive charitable funds as donations from benefactors or other charities. The Bill exempts charitable housing associations from the right to buy with one or two minor restrictions, and these I shall come to in a moment or two.

The other criteria in the Bill—the requirement to have obtained charitable tax status—is designed to prevent the abuse of new associations being formed expressly to escape the right to buy. We recognise that new associations, whose activities will deal with the disadvantaged will be formed, and will need to he formed, and for them charitable status would be appropriate. For them the wide range of exemptions related to stock—those houses specially adapted or in the integrated care schemes introduced in this Bill—should enable them to obtain charitable tax status.

We must remember that the houses owned by charitable associations are often no different at all from neighbouring houses which may be owned by the district council, the Scottish Special Housing Association, non-charitable associations or even owner-occupied houses. Local authorities have rights of nomination of tenants to housing associations in their areas. So a person applying for a council house may instead be allocated an association house—and as I have said that might be the same kind as the council would have given him. We must therefore be wary of assuming that we know what a house belonging to a charitable housing association and its tenant happen to look like.

We must remember, too, that the housing association movement is dynamic. The picture painted of associations being brought to their knees by sales is simply not realistic. Sales of the kinds of house held by associations normally thought of as charitable will not be high because the tenants, the beneficiaries of charity (and I make this point particularly for my noble friend Lord Selkirk), will not have the means to buy. However, they must feel equal to their fellows. They must have the right to buy. Why—because they do not have the means at the time—should they be deprived of the right which is available to neighbours a street or two streets away? Where a sale occurs, associations must see that as another person helped on their way by the intervention of the association, and the resources released can go back to help another.

However, the crucial matter is this. Let us look at the scene which might result from this amendment being carried. A large number of tenants would lose the right to buy, a right which they had come to expect. We would have to give serious consideration to the scheme known as HOTCHA, which stands for Home Ownership for Tenants of Charitable Housing Associations. This scheme, which operates now in England and Wales, is a cumbersone one. In principle, a tenant who cannot buy his own home because his landlord is a charitable housing association is assisted to buy a house owned by another non-charitable housing association. Because that would deplete the resources of the non-charitable association, and because the charitable one cannot recompense the selling one, it would be necessary for the Government to pay housing association grant to the selling association. This money would have to come from the overall allocation to the movement and would reduce the work which could be done. HOTCHA operates in England, and considerable sums of money are involved; but there are still many tenants who wish to buy who cannot do so until further grant can be found. Such a scheme will be necessary in due course for those associations in Scotland already exempted. But those associations at present have a relatively low proportion of tenants wishing to buy.

6.30 p.m.

The overall level of resources may not matter immediately to individual associations. They believe that if they can gain exemption from the right to buy then life can go on as before. I have to say that this seems doubtful. This is important.

Associations have had a very free hand in determining the kinds of project they take on and the tenants they aim to provide for. As a result, we have had some very imaginative projects of the type we have discussed at earlier stages. Other associations have moved into the general needs field under the advantages of charitable status. But if the right to buy is not to apply to such houses I doubt very much whether the Housing Corporation would be able to continue funding their development. At the moment the corporation has a considerable degree of discretion in such matters: I can envisage that their approved development programme might come under much closer scrutiny to ensure the proper targeting of resources. This amendment will not preserve the status quo; it will jeopardise the continued successful development of a vital sector of the movement.

Charitable housing associations play, and will continue to play, an important part in the spectrum of housing provision in Scotland. But to do so their work must be of a nature that is readily understandable as charitable. I am sure that those who desperately need the kind of care and protection which the movement can provide will not understand how families on good incomes living in houses provided by, for example, the largest housing association in Scotland can need charity. That association has a stock of 2,100 houses, over 1,800 of which are general needs houses. We can quibble about numbers, but the charitable status of this association must rest on just 140 special needs houses they own.

The rest are houses no different from any other ordinary public sector houses. If those houses are sold, the resources released might solve the housing problem of the disadvantaged man and give him the housing rights many others now enjoy. We are anxious to protect the legitimate interests of the charitable housing association and we believe that the Bill does so for the great majority.

The noble Baroness, Lady Carnegy, raised a question which had been raised by the noble Earl, Lord Perth. I am sure that I speak for everybody in the House when I extend to him our warmest good wishes on this, his birthday. I am sorry that he seeks such an unusual—and I hope unattainable—birthday present. However, I shall do my best to try to persuade him that a celebratory refreshment with me on the success against the amendment might be more appropriate.

The noble Baroness asked about Scotland and England. In Scotland housing associations have developed since 1980 when the right to buy was first introduced; but they have developed separately from their counterparts in England who have been subject to the right to buy since 1980. The charities legislation is different north and south of the Border. Charities in England are controlled by the Charity Commissioners under the Charities Act 1960, and there is no equivalent legislation in Scotland. The reasons for there being no Scottish Act are not now clear. We would need a major Bill for which there is no clear need. It is only on occasions like this that we come across instances where such a piece of legislation would be useful.

The noble Baroness also asked why there is no room for future charitable associations. I accept the noble Baroness's concern that there should be scope for future charitable housing associations to be formed. This is something that I am prepared to consider, but at the moment I must try to persuade your Lordships that I feel that the amendment proposed by the noble Earl, Lord Selkirk, if accepted by the House would have serious implications, and ones which I am sure many of the housing associations would not seek.

I have tried to explain why this would be so. I am not persuaded by the arguments that the noble Earl has put forward, although I realise that, with his great experience in this subject, he seeks improvement. I am not persuaded that the way he is approaching this Bill at this stage would achieve the improvement that he seeks.

Lord Grimond

My Lords, I do not know what effect that answer will have on the noble Earl, Lord Selkirk, who made such a powerful speech in moving this amendment. No doubt his clearer mind than mine will have understood what the Minister is saying. I have been left in considerable doubt. At one point I thought that the Minister more or less categorically said that there is no reason in the future why more charitable housing associations should not be formed. But then in answer to the noble Baroness who speaks from the other side of the House he said that he would look at this matter again.

Can the noble Lord tell us whether it is his view that the Bill, as drafted at present, will prevent the formation of further charitable associations, or does he take the view that they can be formed despite the Bill? This would seem to be an extremely important matter raised by the noble Earl, Lord Selkirk, who told us that in his view it would be impossible in the future to form these associations.

There is another point on which I am not sure about the Government's attitude. I should have thought that it is now apparent that there is a great need in Scotland, and indeed all over Britain, for more accommodation to rent. Up to a certain point, I am in favour of local authorities selling houses. However for various reasons, and reasons of a quite wide spectrum it is generally agreed that there is now—and this point was made forcefully by the noble Earl—a great need for more rented accommodation. Do the Government share that view? If they share it, do they think that the Bill as it stands is going to encourage it? These are two fundamental matters, and I am not clear what the answer of the Government so far has been.

The Earl of Selkirk

My Lords, we must try not to be emotional about this. It worries my noble friend. We must be very matter of fact and down to earth when we are talking about this. The most interesting thing was something that my noble friend did not say. He did not mention the fact that the Housing Corporation had been turned upside down; that the purposes for which it was originally formed had disappeared. The noble Lord does not want it. All he wants is housing ownership. I have already said that house ownership is going ahead extremely well. What we need is rented accommodation.

As the noble Lord has said—and he let the cat out of the bag—he is angry, or his office is, with one housing association, the Link. The Link will sell as much as you like, my Lords; but it does not sell at a discount because it has ceased to be a charity. That is something that we should not allow to affect every other housing association in the country. It is totally unnecessary. There are plenty of ways of dealing with the Link. They can deal with the HOTCHA system (which is quite satisfactory) if they want to, as the noble Lord said himself. I am delighted that he mentioned it, because it is an important system.

I do not think that we, as a House, can agree that no future charitable housing association can practically he formed. The noble Lord, Lord Grimond, asked that question. The answer is that of course you can form a charity if you like; but you will not get very far because in a short time you will be made to sell your houses at a discount. You will then cease to be a charity. If you refuse to do that you will be run into the courts. I think that is a wrong principle. From the beginning it has always been regarded that charity is an integral part of the welfare state. It is now and it always will be. I beg to move.

6.40 p.m.

On Question, Whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 117; Not-Contents, 76.

DIVISION NO. 2
CONTENTS
Airedale, L. Graham of Edmonton, L.
Amherst, E. Grey, E.
Ampthill, L. Grimond, L.
Ardwick, L. Hampton, L.
Atholl, D. Hanworth, V.
Attlee, E. Harris of Greenwich, L.
Bernstein, L. Hatch of Lusby, L.
Birk, B. Henderson of Brompton, L.
Blease, L. Hertford, M.
Boston of Faversham, L. Heycock, L.
Briginshaw, L. Hirshfield, L.
Brooks of Tremorfa, L. Hylton-Foster, B.
Caradon, L. Irving of Dartford, L.
Carmichael of Kelvingrove, L. [Teller.] Jacques, L.
Jeger, B.
Carnegy of Lour, B. Jenkins of Putney, L.
Chitnis, L. Kennet, L.
Cledwyn of Penrhos, L. Kilbracken, L.
Coleraine, L. Kilmarnock, L.
Craigavon, V. Kinloss, Ly.
Craigmyle, L. Kinnaird, L.
Crawshaw of Aintree, L. Kinnoull, E.
Cromartie, E. Kintore, E.
David, B. Kirkhill, L.
Davies of Penrhys, L. Lauderdale, E.
Dean of Beswick, L. Lovell-Davis, L.
Denington, B. Mackie of Benshie, L.
Diamond, L. MacLehose of Beoch, L.
Donoughue, L. McNair, L.
Elliot of Harwood, B. Mar, C.
Elwyn-Jones, L. Mishcon, L.
Ennals, L. Molloy, L.
Ewart-Biggs, B. Mulley, L.
Faithfull, B. Munster, E.
Falkender, B. Napier and Ettrick, L.
Gallacher, L. Newall, L.
Galpern, L. Nicol, B.
Gardner of Parkes, B. Norrie, L.
Glenamara, L. Northfield, L.
Oram, L. Stoddart of Swindon, L.
Parry, L. Strabolgi, L.
Perth, E. Swinfen, L.
Pitt of Hampstead, L. Taylor of Blackburn, L.
Ponsonby of Shulbrede, L. Taylor of Gryfe, L.
Rhodes, L. Taylor of Mansfield, L.
Richardson, L. Tonypandy, V.
Ritchie of Dundee, L. Tordoff, L.
Rochester, L. Turner of Camden, B.
Russell of Liverpool, L. Underhill, L.
Seear, B. Vaux of Harrowden, L.
Seebohm, L. Wells-Pestell, L.
Selkirk, E. [Teller.] Whaddon, L.
Serota, B. White, B.
Shannon, E. Wigoder, L.
Shaughnessy, L. Wilson of Langside, L.
Shepherd, L. Wilson of Rievaulx, L.
Simon, V. Winchilsea and Nottingham, E.
Stedman, B.
Stewart of Fulham, L. Young of Dartington, L.
Stodart of Leaston, L.
NOT-CONTENTS
Allerton, L. Layton, L.
Ashbourne, L. Lindsey and Abingdon, E.
Bauer, L. Long, V.
Belhaven and Stenton, L. Lucas of Chilworth, L.
Beloff, L. Lyell, L.
Belstead, L. McAlpine of West Green, L.
Birdwood, L. McFadzean, L.
Boyd-Carpenter, L. Macleod of Borve, B.
Brabazon of Tara, L. Mancroft, L.
Brougham and Vaux, L. Margadale, L.
Broxbourne, L. Marley, L.
Caithness, E. Marshall of Leeds, L.
Cameron of Lochbroom, L. Maude of Stratford-upon-Avon, L.
Campbell of Alloway, L.
Cathcart, E. Merrivale, L.
Cox, B. Mersey, V.
Cullen of Ashbourne, L. Mottistone, L.
Davidson, V. Murton of Lindisfarne, L.
Denham, L. [Teller.] Onslow, E.
Drumalbyn, L. Orkney, E.
Elliott of Morpeth, L. Orr-Ewing, L.
Elton, L. Pender, L.
Fraser of Kilmorack, L. Portland, D.
Geddes, L. Rankeillour, L.
Glenarthur, L. Renton, L.
Gray of Contin, L. Renwick, L.
Grimston of Westbury, L. St. Aldwyn, E.
Hailsham of Saint Marylebone, L. St. Davids, V.
Sharples, B.
Harris of High Cross, L. Sudeley, L.
Harvington, L. Swinton, E. [Teller.]
Hives, L. Teynham, L.
Holderness, L. Tranmire, L.
Hooper, B. Ullswater, V.
Inglewood, L. Vickers, B.
Kaberry of Adel, L. Vivian, L.
Kimball, L. Whitelaw, V.
Kimberley, E. Wynford, L.
Lane-Fox, B. Young of Graffham, L.

Resolved in the affirmative, and amendment agreed to accordingly.

[Amendment No. 10 not moved.]

6.49 p.m.

Lord Mackie of Benshie moved Amendment No. 11:

Page 29, leave out lines 38 to 48 and insert— (" (b) section 10(2)(i) of this Act and—

  1. (i) the tenant is a member of a Fire Brigade, maintained in pursuance of the Fire Services Act 1947, who occupies the dwelling house in consequence of a condition in his contract of employment that he live in close proximity to a particular fire station; or
    2. 1092
  2. (ii) in a case where (i) above does not apply the tenant is let the dwelling house expressly on a temporary basis pending its being required for the purposes of such a Fire Brigade; or
  3. (iii) in any case, where the dwelling house is held by the Fire Authority for the operational purposes of its functions and is required for the accommodation of a person who is or will be employed by the Fire Authority for those purposes and the Chief Fire Office has issued a certificate in writing to that effect to the tenant.")

The noble Lord said: My Lords, the Minister will be relieved to hear that I want information and that no more virtue will be forced upon him today. The fact is that certain provisions have been made for the Islands authorities which should apply to the Highland areas and perhaps to the Borders as well. I put down this amendment which applies to the fire brigade officers, but it applies also to police houses, certainly to teachers' houses and to a number of other people. These houses are very often not let as tied houses without rent, but simply are available as ordinary authority houses to essential people such as fire brigade officiers, teachers and the police. They are essential to the running of the communities, and it is true that the Act says that the following are exempt: a member of a fire brigade who occupies a dwelling house in consequence of a condition of this contract of employment that he live in close proximity to a particular fire station. In actual fact in a Highland region there is no such contract of employment. The same applies, of course, to the other people I mentioned.

I do not want to labour this. I think the Minister understands perfectly that it is very important for the Highland region and indeed for the Borders. I should like an explanation from him as to how he thinks the situation would be overcome if members of the fire brigade, the police or teachers actually had a right to buy these houses, which are kept in order to attract new applicants for these very necessary posts. I beg to move.

Lord Gray of Contin

My Lords, in this Bill we are extending security of tenure and the right to buy to tenants of regional authorities, including police and fire authorities. When this Bill had its Report stage in another place, however, concern was expressed on behalf of the Highlands and Islands Fire Board that our proposals to exclude houses required for the purpose of a fire authority might still not be sufficient to enable the board to refuse applications by certain officers in locations where the board felt it would be difficult to make available suitable replacement housing. I may say that this was the first we had heard of these anxieties, but we undertook to look into them carefully to see whether any further amendment to the Bill was needed.

We looked into the matter very carefully. On investigation it turned out that they were in fact only five houses in the Highlands and Islands area about which the board felt concern. They are not houses which the board is required to provide. Furthermore, they are in centres of population such as Invergordon, Kirkwall and Stornoway. They are not in isolated locations. However, having taken advice, it is our view that if the board were faced with an application to buy one of these five houses it might refuse the application on the ground that the officer required to occupy the house as a condition of his own employment and that therefore the house was excluded under Schedule 1 to the 1980 Act.

My honourable friend the Minister for Local Government and the Environment, Mr. Ancram, wrote on the 25th April to Members who had intervened in the debate in another place, setting out these conclusions. I believe therefore that the noble Lord's amendment is unnecessary. It is also, I must say, unwelcome. It would give a public authority whose tenants are being given security and the right to buy under this Bill the power to revoke those rights simply by writing to the tenant and telling him that he is not a secure tenant. In my view, this would make a nonsense of what we are trying to do in the present Bill. It would be tantamount to saying to the tenant, "We will give you certain rights to buy but only if your landlord says you may." That does not appear to me to be any advance on the present position.

In conclusion, I repeat that the Bill makes provision to exclude houses let to serving fire officers in connection with their employment or in other circumstances where they may be required by fire authorities. We have looked very carefully into the particular concerns of the Highlands and Islands Fire Board, but have concluded that they are unfounded. In the light of this explanation, I trust the noble Lord will accept that his amendment is unnecessary and will agree to withdraw it.

Lord Mackie of Benshie

My Lords, the explanation is a little like the curate's egg: good in parts. I think the Minister has had enough of a bashing, so I will consider his reply and in the meantime beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Schedule 2 [Minor and Consequential Amendments]:

Lord Gray of Contin moved Amendment No. 12:

Page 30, line 43, at end insert—

(" The Land Tenure Reform (Scotland) Act 1974 (c. 38)

. In section 8(7) of the Land Tenure Reform (Scotland) Act 1974 (saving)—

  1. (a) for the words "1971" there shall be substituted the words "1984 or a secure tenancy within the meaning of the Tenants' Rights, Etc. (Scotland) Act 1980"; and
  2. (b) for the words "that Act" there shall be substituted the words "either of those Acts".")

The noble Lord said: My Lords, I beg to move this amendment formally. I have already spoken to it.

On Question, amendment agreed to.

Schedule 3 [Repeals]:

Lord Gray of Contin moved Amendment No. 13:

Page 32, line 30, column 3, at end insert ("In Schedule 1, paragraph 1.")

The noble Lord said: My Lords, I beg to move this amendment formally. I have already spoken to it.

On Question, amendment agreed to.