Lords Sitting of 22 October 1986

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

Energy Act 1983: Schemes
Lord Ezra: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider that the Energy Act 1983 has been effective.
Viscount Davidson: My Lords, the Government believe that it is still too early to evaluate the effect of the new opportunities which the Energy Act 1983 has opened up for operators of economic private generation. However, it is encouraging that the number of private generators selling electricity to boards in Great Britain, which had previously been falling, has risen since the Act came into effect from 59 in 1983–84 to 93 at the end of September this year.
Lord Ezra: My Lords, will the noble Viscount not agree that another of the objectives of the 1983 Energy Act was to stimulate combined heat and power projects? Is it not the case that we are lagging behind many other European countries in this development? What is the policy of the Government towards expediting it? To what extent has the electricity supply industry conducted the policy laid down in Section 19 of the 1983 Act to adopt and develop such schemes?
Viscount Davidson: My Lords, the Government last year offered grant-aid of £250,000 each to consortia in Belfast, Edinburgh and Leicester for the preparation of prospectuses for combined heat and power district heating schemes. I understand that Leicester expects to finalise its studies in December, while the other two hope to complete their work by next March. I believe that work on evaluating possible schemes is also continuing in Sheffield, Tyneside and London.
The various electricity boards are actively supporting these efforts to develop economic combined heat and power schemes and are in some cases full members of a consortia.
Lord Stoddart of Swindon: My Lords, is the noble Viscount aware that his honourable friend the Minister for energy efficiency, in opening the Unilever Merseyside power station, said that this system, CHP, allows the company to extract over 75 per cent. of the energy from the fuel it burns compared with about 35 per cent. in conventional power stations? Is that not an enormous saving? In Energy Efficiency Year should not the Government be giving a good deal more encouragement to CHP schemes? Above all, ought they not to be saying to the CEGB, particularly where it is proposing to construct new power stations near population centres, that they should be constructed only on the basis of combined heat and power?
Viscount Davidson: My Lords, the Government are giving full support to combined heat and power schemes, but it is primarily a matter for the boards themselves. I understand that since May 1983 boards in England and Wales have appraised 19 potential combined heat and power projects, of which six remain under active consideration.
The chairman of the Electricity Council has indicated that boards will continue their efforts to identify economic combined heat and power projects in line with the provisions of the Energy Act 1983 and their other statutory duties.

Straw and Stubble Burning
2.39 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to take further steps to reduce the nuisance caused by straw and stubble burning.
Lord Hesketh: My Lords, over recent years the Government have taken a number of steps to reduce the nuisance that can be caused by careless or inconsiderate burning of straw and stubble. The indications are that there have been fewer problems during this year's harvest season. A combination of strengthened by-laws, the publicity campaign mounted by the Government, the code of practice issued by the National Farmers' Union and the introduction of the Highways (Amendment) Act 1986 will undoubtedly have contributed greatly to this improvement.
Moreover, as the results of our continuing research and development work on alternative methods of disposal have been made known to the industry, an increasing number of farmers have been able to avoid straw and stubble burning altogether. These are encouraging trends, but we shall keep the matter under review.
Baroness Nicol: My Lords, I am very grateful to the noble Lord for that very full reply. I should like to welcome him on the occasion of his first appearance at the Dispatch Box.
Noble Lords: Hear, hear!
Baroness Nicol: My Lords, is the noble Lord aware that in Cambridge, although there may have been some reduction in the nuisance, it has not appeared so? We have had many complaints this year about it. Can the noble Lord say whether, among the alternative uses that he has mentioned, there is one to convert straw into paper? Does he recall that in January of this year the noble Lord, Lord Belstead, gave me a hopeful answer on that? Can the noble Lord say whether any progress has been made?
Lord Hesketh: My Lords, first, I thank the noble Baroness for her very kind remarks. I hope that they are justified.

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I am well aware of the remarks made by the noble Lord, Lord Belstead, earlier. Perhaps I may first address the problem of straw-burning in Cambridge, and particularly on the A.45. The local ministry office has not had that drawn to its attention. I should be very grateful if the noble Baroness would give me the details so that the matter can be investigated further.
The Ministry has looked thoroughly at the possibilities for paper-making. There is no doubt that the technology to do it is available, as evidenced by plants that exist on the Continent. However, the paper industry would need to make a very large-scale investment in straw-pulping facilities. In present circumstances it is uncertain whether there would be sufficient economic and technical benefit to justify such an investment.
Lord Alport: My Lords, perhaps I may ask my noble friend whether he is aware that a substantial number of farmers have given up straw-burning due to a sense of responsibility to the public interest. They have found that incorporation is much less expensive and can be achieved much more efficiently than originally thought. In those circumstances, as a large number of farmers have given up straw-burning, does he not think that it is time that the farmers who have not shown the same responsibility should be compelled to do so by legislation? Will my noble friend and his right honourable friend consider this situation and perhaps in the next Session of Parliament help to introduce a Bill to end stubble-burning by 1990? Alternatively, perhaps he will support a Private Member's Bill if that were introduced.
Lord Hesketh: My Lords, I am afraid the short answer to that question is no. There have been most encouraging improvements. In 1983 37 per cent. of the straw that was available in this country was burnt. That figure fell to 27 per cent. last year and I hope it will continue to fall. It is far easier for some farmers to cease straw-burning because of the nature of the ground that they farm. There are many farmers in this country who would find it impossible to cease and to move directly to incorporation of straw.
Lord Ezra: My Lords, the noble Baroness in her supplementary question referred to the possible use of straw for other products; namely, paper. However, I should like to ask the noble Lord whether the Government are supporting projects for converting straw into building board. I believe that there are very satisfactory technological processes for this conversion and it would appear to be a very useful alternative role for the surplus straw.
Lord Hesketh: My Lords, the Government are spending £2 million annually considering alternative uses for the remaining 5 million tonnes of straw, which is what the problem is all about. The Government are certainly looking at building board. However, one of the great difficulties that has occurred with that alternative use has been the collapse in the price of oil, which has proved a number of the avenues of research to be less attractive than they were a short while ago.
Lord John-Mackie: My Lords, apart from congratulating the Minister as a Member of this House on his first appearance, I should like to congratulate him as a farmer on his reply, which will be very well received. Is he aware that, although the technicalities of incorporating straw, mainly on lighter land, have been solved—perhaps I may add on this point that they have been solved by the Scottish NIAE, which the Government have taken in hand almost to abolish—the burning of straw has always proved a sanitation action against straw-borne diseases? However, we still do not know whether the steady incorporation of straw year by year creates a problem of which we are not yet aware. I think the Minister's reply will be welcomed by farmers. After all, it is a very sick code indeed, and I think he will be aware of the difficulties it sometimes raises. Nevertheless, farmers have been much better in attending to it this year.
Lord Hesketh: My Lords, perhaps I may first thank the noble Lord for his very kind remarks. I particularly accept his statement concerning diseases in the ground. We are well aware that, for example, in heavy clay soils there are serious potential disease problems.
Lord Walston: My Lords, I should like to associate myself with the first comments of the noble Baroness congratulating the noble Lord and continue by congratulating him on the actual content of his Answer. As a Cambridgeshire farmer, may I disagree strongly with the noble Baroness concerning the impact of straw-burning in that county this year? I ask the noble Lord whether he agrees that the amount of straw burnt both statistically and from casual observation has turned out to be very much less than in previous years.
Lord Hesketh: My Lords, perhaps I may thank the noble Lord very much for his kind remarks. We do not have the figures for 1986. However, from 1983 to 1985 the figures have fallen by the equivalent of 25 per cent., and there is every reason to believe that they will continue to fall.
Lord Paget of Northampton: My Lords, I should like to take the opportunity to congratulate the noble Lord in this third generation on his promotion and appearance before us. Perhaps I may point out to him that our farmers have produced the most efficient agricultural industry in the world. This has been a great achievement and they are in considerable trouble through difficulties which are not their own. Perhaps when people are put to the rather minor inconvenience involved here they should comfort themselves that it will soon be over.
Lord Hesketh: My Lords, again I thank the noble Lord for his very kind remarks. I am sure that everyone in this House agrees that it is an industry which in some ways has been the victim of its own success. However, I believe that the farming industry as a whole is making a tremendous effort to remove this problem, of which it is becoming more and more aware. The Ministry and the National Farmers' Union have done a great deal of work to make the farmers responsible.
Lord Hunt: My Lords, without dissenting in any way from the question put by the noble Lord, Lord Walston, and joining in the chorus of congratulations to the noble Lord himself, may I ask him to bear this in mind? I know he is aware that straw-burning, even though it may be on a small scale, creates a hazard not only as a smoke screen but also to wildlife, animals, birds and even insects. That strengthens the case for limiting, or even putting an end to, straw-burning wherever it may be going on.
Lord Hesketh: My Lords, I thank the noble Lord for his kind remark. However, the evidence is that wildlife is having a better and better time with the regulations that have been introduced, and the by-laws of 1984 and 1985. If I was living in a hedgerow I should be very happy about the way things are looking!
Lord Stanley of Alderley: My Lords, before my noble friend considers any alteration to the very successful straw-burning rules, will he consider the knock-on effects that this could have? For instance, what would we do with the 5 million extra tonnes which would be wandering around? An alteration to the rules would inevitably increase both bankruptcies among farmers and the use of precious fossil fuels; it would also increase the nitrogen level in some of our waters. Finally, I congratulate my noble friend on tackling such a hot number on his first appearance at the Dispatch Box.
Lord Hesketh: My Lords, again, I should like to thank my noble friend for his kind remarks and take the opportunity of agreeing with much of what he said. That is why the Government do not propose to ban straw-burning at this time.
Lord Mackie of Benshie: My Lords, will the noble Lord agree that to burn straw is a thoroughly bad farming practice and that farmers who use the monoculture method would have no disease problems if they returned to the system of rotation of crops?
Lord Hesketh: My Lords, I wish that I was as good a farmer as the noble Lord, Lord Mackie, so that I would know about the finer points of his question.

Telephone Bill Vouchers
2.51 p.m.
Lord Monson: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that numerous small shareholders in British Telecom have forfeited a minimum of £18 each in consequence of the limited validity of the telephone bill vouchers issued to one third of the non-institutional share applicants, and whether they will ensure that any similar schemes being devised as a feature of forthcoming privatisation measures are made more flexible.
Lord Beaverbrook: My Lords, the rules relating to the BT telephone voucher scheme were set out clearly in the prospectus at the time of the offer for sale. The rules were designed to ensure that shareholders had sufficient quarterly bills against which vouchers could be used before the vouchers expired. It has emerged that a small proportion of shareholders have not made use of all their vouchers. It is clear that in the great majority of these cases shareholders have simply forgotten to use their vouchers. The Government will naturally take account of the experience gained from operating the BT scheme in putting forward similar schemes in future.
Lord Monson: My Lords, I am most grateful to the noble Lord for that satisfactory reply. Will the noble Lord not agree that when vouchers are sent out in pairs to the customers and the first voucher cannot be used for several weeks and the second cannot be used for several months, it is almost inevitable that a proportion of customers will either have mislaid them or forgotten about them by the time the telephone bill arrives, and once the Bill is paid the vouchers effectively become worthless? Will the noble Lord not agree that in order to avoid any accusations of sharp practice, in this instance it would pay British Telecom to extend the life of the vouchers, particularly as the value of each voucher declines month by month in line with inflation?
Lord Beaverbrook: My Lords, the first batch of vouchers expired in April 1986. A total of 926,000 were issued, of which 889,000 were cashed and 37,000, or only 4 per cent., remained uncashed. These probably belonged to about 25,000 shareholders. Figures for the second batch, which expire tomorrow, are not yet available, but we expect the success rate to be broadly similar.
As regards the noble Lord's second supplementary question about the cost to these voucherholders, British Telecom is required to keep its prices to 3 percentage points below the rate of inflation. Perhaps the Government's record in keeping down the rate of inflation will demonstrate that very little has in fact been lost by these people.
Lord Monson: My Lords, I am grateful to the noble Lord for having given so much detail, but will he not agree that the figures he gave prove that British Telecom has made an unexpected extra profit of at least £500,000 as a result of its customers-cum-shareholders having mislaid or forgotten about their vouchers? Would it not be fair for British Telecom to agree on an ex gratia basis to extend the life of the vouchers and return this money to the customers/shareholders?
Lord Beaverbrook: My Lords, no; the rules of the scheme were clearly set out in the prospectus, and all shareholders invested on that basis. The Government cannot alter the rules after the event. I should perhaps point out that the vouchers are a government, not a British Telecom, responsibility.

University Staff
2.54 p.m.
Baroness Lockwood: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action the Secretary of State for Education and Science proposes to take to enable universities to recruit and retain high quality staff who can produce graduates of the calibre that this country will need in the 1990s.
Baroness Hooper: My Lords, constructive proposals for reforming the salary structure of university academic staff have been drawn up by the employers and the Association of University Teachers. Those will be further considered in the light of decisions to be arrived at in the near future on university funding for 1987–88.
Baroness Lockwood: My Lords, I should like to thank the noble Baroness for that reply. May I take it that the proposals put forward by the two sides will be favourably considered by the Government? Is the noble Baroness aware that the competitive position of university teachers and lecturers has deteriorated over the past three years in relation to the position in industry and even in other spheres of the public sector because the university pay settlements have been at a much lower level than those in the private sector and in the public sector? Is this a situation which the Government believe the country can afford to tolerate, with its consequent brain-drain of people from the universities to industry and even to other countries?
Baroness Hooper: My Lords, the Government certainly recognise the importance of the universities for the future of the country. I cannot give the noble Baroness an assurance that the Government will consider the proposals favourably, but, as I have said, they are very important and constructive proposals. However, if inflation is to be curbed, pay negotiations must be constrained by what employers can afford, together with salary levels that are adequate to recruit, retain and motivate staff of appropriate quality. Any discussion about comparability cannot be the main criteria. If it were, all groups would press for a return to best-point relativities, leading to spiralling inflation and repeated erosion of relativities.
Lord Grimond: My Lords, perhaps I should declare an interest in that I am Chancellor of a university. Unfortunately, the pay of chancellors is what today is called "zero rated". However, will the Government agree that the standard of teaching in the universities is extremely high and that they are getting excellent staff extremely cheaply, particularly when compared with salaries paid in the City and in advertising? Will they bear in mind that the reason they are unable to get these staff is due to the high standing of our universities? They must ensure that the universities are supported to the full, or there may be a general falling off in the standards of further education.
Baroness Hooper: Yes, indeed, my Lords. I shall certainly convey the noble Lord's specialised knowledge and the points he has raised to my right honourable friend the Secretary of State. We are certainly bearing these matters very much in mind in considering the proposals that have been put forward.
Lord McIntosh of Haringey: My Lords, will the Government not agree that the question of the retention of good university staff goes beyond the question of salaries to the funding of universities as a whole? Universities cannot be funded with widely varying support from year to year. They do not recruit staff year by year; they do not maintain their premises year by year; and they do not have their students year by year. Will the noble Baroness not agree that, unless the Government can give security of funding into the future, there will be no long-term solution to the recruitment of first-class university staff?
Baroness Hooper: My Lords, in relation to funding in the longer term, the Secretary of State has told the Committee of Vice-Chancellors and Principals very recently in Edinburgh that his long-term concerns were how to increase participation in higher education in order to meet the future needs of employers and how to fund such an increase. The Government are considering possible sources of private finance for higher education, including, for example, the introduction of a loan element in student support. However, the important factor of the proposals now under consideration is that they include greater proposals for flexibility for individual universities.
Lord Hunter of Newington: My Lords, I should like to ask the Minister whether the miserable business about clinical academic salaries has been resolved. Recruitment of staff to the medical schools is extremely difficult when the consultants there, who are also consultants in the National Health Service, are not receiving the same salaries.
Baroness Hooper: My Lords, again, the Government are conscious of this problem. The Secretary of State explained the Government's undertakings to the Committee of Vice-Chancellors and Principals at a meeting on 13th October. I hope that, in the light of that, they will now feel able through the Clinical Academic Staff Salaries Committee to bring about a speedy settlement for the clinical academics.
Lord Roberthall: My Lords, would the Minister agree that the most serious aspect of this matter is the drain to the United States, where the salaries and conditions are so much better than they are in this country?
Baroness Hooper: Certainly, my Lords; and the Government's intention is to improve conditions for academic staff as much as is possible within the financial constraints about which we are all aware.
Lord Beloff: My Lords, would my noble friend the Minister agree that one of the things which attracts people to teach in the universities is the prospect of

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able and well-prepared students? In that regard, with particular reference to faculties of engineering and applied science, ought we not to take an early opportunity of welcoming the Government's proposals for city technical colleges, rather than opposing them, as appears to be the ignorant intention of Her Majesty's Opposition?
Baroness Hooper: My Lords, I can only say "Hear, hear" to that.
The Earl of Halsbury: My Lords, would the noble Baroness accept that the key to all recruitment is the morale of the body to which they are going to be recruited, and that the fostering of morale is important whether it is the Brigade of Guards or an academic university, of which I also happen to be a chancellor?
Baroness Hooper: Yes, indeed, my Lords.
Baroness Seear: My Lords, would the noble Baroness not agree—I am sure she will not, in fact—that 20 technical colleges is a totally inadequate approach to the present problems? What we need, throughout the education system, is a lift in the level of training in science and technology; and not only in science, but a great improvement in schools as a whole. It is camouflage to put the money into 20 technical colleges.
Baroness Hooper: My Lords, the Government are working hard in order to achieve an overall improvement in education and education facilities. I should have said that the introduction of 20 new such technical colleges was a good start.
Lord Cledwyn of Penrhos: My Lords, is the noble Baroness aware that the swingeing cuts imposed by this Government on the universities have created acute problems for them—worse problems than they have encountered throughout the whole of this century? Would she specifically say a word about the work of the universities in seeking to balance their books by travelling round the world to get overseas students into British universities? What is the policy of the Government towards this? Are the Government in favour of 20 per cent. of the university population being from overseas or are the Government now hoping to get more than 20 per cent.? Is there not a danger that the composition of the universities will change radically if the Government's policy gets its way?
Baroness Hooper: My Lords, I would not wish to comment on the actual figures that the noble Lord quoted. All I can say is that the Government view as important an element of international involvement in our universities both on the pupil side and on the teacher side; and I should have thought that this added a great deal of spice to our university circles.
Lord Cledwyn of Penrhos: My Lords, in order to make it absolutely clear, is the noble Baroness aware that in fact we on this side support overseas students in this country? But is she also aware that if this matter goes beyond a certain point it will create an imbalance
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in British universities, the object being to save money for the Government?
Lord Nugent of Guildford: My Lords, is my noble friend aware that some universities, in particular the University of Surrey, with which I have some association, are making a strong response to the Government's recent move that universities should find more finance themselves by support from industry? In particular, by the development of research parks, universities can not only strengthen the academic side by the interplay between the workers in these industry research units and their own staff, but can also raise substantial sums of income by the development of the research parks to add to their own resources. This makes for a splendid spirit of enterprise throughout the whole university.
Baroness Hooper: My Lords, the Government have indeed welcomed the many initiatives in this field, and not least because this can often lead to an increasingly improved job ratio at the end, because of the contact between private industry and the individual university.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that at a convenient moment after 3.30 this afternoon my noble friend Lady Trumpington will, with the leave of the House, repeat a Statement that is to be made in another place on social security benefits uprating.

Housing and Planning Bill
3.5 p.m.
Report received.
Baroness David Baroness David moved Amendment No. 1:
After Clause 1, insert the following new clause:
("Compensatory Resources.
—(1) The Secretary of State shall prescribe regulations within 3 months of the date of the coming into operation of the first part of this Act making provision for a reimbursement scheme, from a special Exchequer fund, to provide additional resources to local housing authorities where properties have been sold under the Right to Buy Scheme.
(2) The regulations shall reflect, to some extent according to a scale, based upon an assessment of housing need, the difference between market value and the discounted sale price. The scale shall also provide for a minimum reimbursement of 1 per cent. and a maximum of 100 per cent. of the difference, to reflect the need for expenditure on the provision of public rented stock within the area, for homeless persons and such other persons in evident need of rehousing.
(3) In drawing up the regulations, the Secretary of State shall consult the local authority associations.").
The noble Baroness said: My Lords, I think everyone is well aware of the housing crisis in this country: the lack of houses for almost all kinds of people, the numbers of homeless, and the lack of finance to produce those homes either for rent or for sale. At the same time, local authorities have £6.5 billion in their coffers which they are not allowed to

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spend, or only at a trickle, and there are 400,000 building workers (I think that is the figure), who are unemployed. Therefore, what we are trying to do in this new clause is to get a little more money back into the system so that more houses could be built.
We want the level of resources made available to all local authorities to be greatly increased. Properties are being sold by the local authorities under the right-to-buy scheme at very low prices. Not only do local authorities receive far less than the current replacement value, but initially they can spend only 20 per cent. of the capital received. This amendment does not challenge the right to buy but it ensures that the Government begin to realise the enormous cost implications for local authorities.
Local authorities are attempting to deal with bigger and bigger problems from smaller and smaller resources. Central government should therefore be prepared to foot the bill for their policy, at least in part. The new clause is limited and it leaves the Secretary of State some discretion. But it would at least establish the fact that local authorities have resource problems, and that they should be compensated to an extent that reflects not only their losses through sales but also the needs of their areas.
The money would be used exclusively for housing, housing repair and renovation. The amendment may be technically not quite right, but I hope that the spirit behind it will be recognised by the Government and that we may have a sympathetic response. I beg to move.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, I rather think that the noble Baroness was as surprised as I was when she moved that amendment. However, I shall do my best to answer it. I must congratulate her on raising the question of the financial effects of council house sales under the right to buy, because this is a matter that has not been raised very much in our debates so far. I agree with her that no one could doubt its importance. Over 1 million sales have taken place, and there are more to come. Clearly, then, we must consider the consequences.
As I understand it, the noble Baroness's argument is not about total housing stock available in an area. We all know that sales under the right to buy do not reduce the total number of houses available. Her argument is about the effect of sales on the local authority stock, and about the need to replace houses sold under the right to buy. Her point is that the effect of granting discounts off market value is to reduce the resources available to local authorities for replacement. She suggests therefore that some reimbursement is necessary.
With the greatest respect, I believe that this argument is misconceived. It appears to be based on the assumption that there should be a one for one replacement of houses sold. But the actual level of sales is no measure of the effect in the short to medium term of the local authority's ability to meet the housing needs in its area. The real question is whether sales have an effect on the availability of council houses for reletting.
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Undoubtedly there is some effect. It would be absurd to deny that some of the houses sold might otherwise have become available for reletting. But the effect is much less than the total level of sales. Our information shows that the typical right-to-buy purchaser is someone in his forties or fifties, who is probably well past the age when he would consider moving out of his council home to buy in the private market. In other words, had he not had the opportunity of the right to buy, he would have remained a council tenant, probably for another 20 or 30 years.
If that sort of tenant is the typical right-to-buy purchaser, the reduction in relets resulting from right-to-buy sales will only be a fraction of the total level of sales, and receipts should be more than adequate to cover replacement if authorities judge that to be necessary.
The noble Baroness referred to the 20 per cent. rule on the reinvestment of capital receipts. I believe that there is still considerable misunderstanding about this rule. The Government have never taken away from authorities the receipts they have obtained from right-to-buy sales. What we have done, and we freely admit it, is to phase their release. In other words, what we are saying is that in normal circumstances authorities should not spend more than 20 per cent. of any receipts in any one year. That rule we still believe to be necessary for macro-economic reasons to avoid the inflationary effects of the immediate recycling of sales receipts into reinvestment. But the rule does not deprive an authority of the capacity to reinvest from receipts over a period of years.
I accept that the situation will vary from area to area. The level of sales currently ranges from under 2 per cent. in one or two London boroughs to almost 30 per cent. in some other areas. There are bound to be different effects on relets from such different levels of sales, but generally I do not believe that the noble Baroness has made out her argument that reimbursement over and above receipts is necessary if councils are to be able to meet local needs.
I believe the reality is the exact opposite. Authorities which take a positive attitude to the right to buy can augment their resources by encouraging sales and increase their ability to help those in greatest need. I do not accept the assumption incidentally that authorities should concentrate on the idea of replacing houses sold. They should be thinking much more flexibly about modes of provision—not just building houses themselves but encouraging and facilitating other forms of provision.
A good example is low cost home ownership. The more we can encourage provision of this kind for young families the less pressure there will be on the council's waiting list. A point which I do not believe is sufficiently widely appreciated is that the 20 per cent. rule on reinvestment of capital receipts does not apply to low cost home ownership schemes. Receipts from such schemes are reimbursable at 100 per cent. in full immediately and without restriction. That is the sort of scheme we want authorities to consider.
The Government reject the argument underlying this new clause, that some reimbursement is necessary to offset the effects of council house sales. The

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reimbursement is the sale price and any imaginative authority can do a very great deal with the receipts being obtained from sales. They are, as the noble Baroness said, massive. Since 1979 local authorities have obtained more than £6 billion in receipts. That is not a depletion of resources; it is releasing resources which would otherwise remain tied up in housing occupied by relatively well-off tenants. It is an opportunity. That is the way we should be looking at the issue and not in the negative terms of compensation and reimbursement. I therefore invite the noble Baroness to withdraw the amendment.
3.15 p.m.
Lord Dean of Beswick: My Lords, is it not a fact that a large part of the case that the Minister has put forward for the withholding or freezing of these sums of money that belong to the local authorities is very spurious indeed? Only two years ago the present Chancellor halved the amounts of money that were made available during a year when council house activity in general—building, repairs and so on—was reduced to its lowest level since the first world war. Where is the Minister's proof that the release of increased and absorbable amounts of money—and putting that figure back to the amount the local authorities were asking for two years ago—would overheat the building industry, when it is stagnant and people are still being laid off in increasing numbers in the public sector?
Is it not a fact that report after report from non-political bodies such as the commission chaired by the Duke of Edinburgh, Faith in the City, various other reports and the department's own report on the state of housing in this country indicate the need for increased amounts of money to be made available? No evidence has been produced either in your Lordships' House or in another place that would indicate that if the figure were put back to 40 per cent. for some sums of money and 30 per cent. for others it would have anything but a beneficial effect on a housing situation that by anybody's standards is deteriorating alarmingly week by week.
The Minister could do a power of good for the Government, for people in council houses and for people who are badly housed or not housed at all by reinstating these cuts forthwith.
The Lord Bishop of Birmingham: My Lords, in the City of Birmingham, my see city, I find that as more and more people become unemployed there is a greater need for housing. I appreciate what the Minister said about the fact that many people who buy their houses may stay in them. I take his point. But I find it very hard, unless I have not followed his reasoning correctly, to see why he should withhold his consent to this amendment in the light of the fact that certainly in my see city the lists of people wanting houses are increasing.
With an increasing number of unemployed, people cannot buy houses. They are forced to go for public authority housing or such small amounts of housing that come on the market through housing associations; but they have far more applicants than they can possibly cope with. Unless I have
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misunderstood him I do not feel that the Minister has addressed himself to the problems of the increasing number of people requiring houses and the increasing number of unemployed who are bound, if they are to be housed, to be in local authority housing.
Lord Skelmersdale: My Lords, with the leave of the House, I should point out to the noble Lord, Lord Dean, that it is now a well accepted economic fact that large amounts of spending power released rapidly are inflationary. I should point out to him that 20 per cent. of £6 billion is £1·2 billion, which the Government regard as an acceptable level of non-inflationary allowance.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for giving way on this point, but is it not a fact that since this Government came into office in 1979 they have cut far in excess of that from the amount being funded by the Chancellor of the Exchequer to the building programme? Why is the Minister saying that such action would be inflationary? It would only be inflationary relatively because the Government have savaged the building programme. All that the local authorities are asking for is the money that belongs to them. They should be allowed to use it in place of the money that the Government have withdrawn from supporting them.
Lord Skelmersdale: My Lords, I was about to go on to complete my sentence. Perhaps I should point out to the House that this is Report stage. In 1981 when I first became a spokesman for the Government the capital receipt allowance was 45 per cent. Should it have remained at 45 per cent. today that would mean that local authorities would be able to spend £2·7 billion a year of their own receipts. There is no doubt in the Government's mind that this would be inflationary.
The noble Lord says: "Since 1979, have not the Government cut large amounts of money from the housing programme?" There have been some cuts in the housing programme, but the noble Lord and the House should realise that this money, the capital receipt money that we are talking about, is over and above the allocated housing investment programme, so in fact we are talking about extra money. If the noble Lord compares year for year, I think, without having the figures in front of me, that he will find that with the 20 per cent. allowance the money actually available to local authorities for housing, if they choose to use it in that way, has not been cut.
The right reverend Prelate asked about my response to this amendment. What I was doing in my response was to consider the amendment as printed on the Marshalled List which provides for a direct reimbursement scheme out of the capital receipts money, if you like. That is a different argument from the argument which I think he was presenting, which was that there should be more money in general, and especially in specific places—and he mentioned his own see city of Birmingham. That is a slightly different point which I would not address in regard to this amendment; but it is something that we could quite realistically discuss in another context.
Baroness Fisher of Rednal: My Lords, it is a little worrying when the Minister gives us the kind of reply that he has given this afternoon. When one sees television and reads the newspapers as well as all the material that is issued by various organisations, including the CBI, the building trade and all kinds of bodies, it is worrying to hear the noble Lord say that there is sufficient money, or that there ought to be sufficient money, because of what the Government are doing, to provide housing for those people who have no alternative but to live in rented accommodation.
It is strange that the Minister has answered specifically my noble friend Lady David regarding the spending of the profits from the sale of council houses because, as the noble Lord is fully aware, or should be aware, one of his honourable friends in another place has been reported in the press for the last two days on exactly the same point. It is not only the large authorities that are concerned about it; we now understand that the rural authorities are becoming more and more concerned that they are not able to spend the money which they have raised from the sale of council houses.
Perhaps the noble Lord remembers that when he explained to us about the sale of council houses, we were all left with the impression that the more the local authorities sold, the more they would have to invest in new housing. That was the answer to us when we were saying that we should lose a number of rented properties. The Minister was saying then, "You will not do so because you will get the sale money to rebuild and replace those that are taken off the rented market".
What he is saying this afternoon is, "What I said two or three years ago is not applicable any more because it so happens that the local authorities wanted to spend that money". As the right reverend Prelate the Bishop of Birmingham so aptly pointed out, in the very large cities it is almost impossible for local authorities to do any new building. I could give your Lordships figures (as I have in the past) for what Birmingham is doing. They are building only a few hundred houses at present because there is not the capital there. They are now not able—and I know this from personal experience—to provide money for accommodation for the frail, the elderly and the blind, yet they promised two years ago to make special provision for these categories. The Housing Corporation is not able to help in regard to this facility either.
Can the noble Lord explain to the House why the local authorities can spend their capital receipts in a different way? I ask this because I understand that with the Housing Corporation, when they sell their properties, the resources arising from the sale act as a substitute source of capital. In other words, the more they can sell, the more they can rebuild; because this is the amount of money which they are using for capital. If that is correct—and I understand it is—will the noble Lord say why the local authorities are penalised while the Housing Corporation are dealt with in an entirely different way?
Lord Pitt of Hampstead: My Lords, before the noble Lord replies, may I say that I am always disturbed at the economic argument being used about housing. We are selling these houses at a discount, but then we are
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not allowing the sale proceeds to be used for building houses. Yet at the same time the Government are reducing the allocations that are made to local authorities for building houses. I should have thought it inevitable that there should be a shortage of housing—which, of course, is what we are seeing.
Every time we raise the debate on this particular issue the Government argue about it being inflationary and say that it would be inflationary for the local authorities to use the moneys that they have to build the houses that are required. At the same time the local authorities are spending large sums of money—in fact, if you relate capital to revenue, very much larger sums of money—in putting up people in bed and breakfast accommodation, and are paying for that out of revenue. It seems to me that somehow or other, somewhere, we have got this wrong. It must be more sensible to use the money that you have as capital to build the houses which are needed rather than put those people who are homeless into bed and breakfast accommodation on which you spend millions and millions of pounds every year. If somebody can explain to me how what is going on makes sense, I shall be very grateful.
Lord Skelmersdale: My Lords, I think that this must be the last time that I seek the leave of the House to respond to this amendment. This amendment, as I sought to point out to the the right reverend Prelate, has absolutely nothing to do with the total level of housing investment. It is about the effect of council house sales upon an authority's ability to meet its responsibilities. The suggestion is that authorities should be reimbursed for sales. I would suggest that the House sticks to that point.
Are noble Lords opposite suggesting that sales require one-for-one replacement? If that is the case, I think it is only fair for them to tell us. Do they have evidence that relets are being depleted by sales? That is the issue—and not the general evidence of housing needs.
I was asked about the Housing Corporation's programme. The corporation's approved investment programme is set from year to year following consultation between the department and the corporation, taking into account relevant factors, including the level of receipts. Local authorities are in a rather different relationship with the Government and the rules are set out in regulations. These are exactly the rules which noble Lords opposite have been complaining about this afternoon.
Baroness David: My Lords, I think we have had a thoroughly unsatisfactory reply. Really, the Minister's response shows a total misunderstanding of the housing situation. We are not asking for a one-for-one replacement. The amendment asks for a minimum reimbursement of 1 per cent. and a maximum of 100 per cent. of the difference. If the Government want to go on and have all council houses sold, that will be the end of council housing. The point is that the waiting lists are growing and there are no houses to put these people into. As my noble friend Lord Pitt said, more and more people are having to go into bed and breakfast accommodation at a most enormous cost.

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This is a very modest amendment. I had not thought to press it, but I am so displeased at the response that I shall do so.
3.30 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided; Contents, 99; Not-Contents, 108.

DIVISION NO. 1

CONTENTS

Amherst, E.

Listowel, E.

Ardwick, L.

Llewelyn-Davies of Hastoe, B

Avebury, L.

Lloyd of Hampstead, L.

Banks, L.

Lockwood, B.

Beswick, L.

McIntosh of Haringey, L.

Birmingham, Bp.

Mackie of Benshie, L.

Blease, L.

McNair, L.

Blyton, L.

Manchester, Bp.

Bonham-Carter, L.

Mar, C.

Boston of Faversham, L.

Milverton, L.

Bottomley, L.

Mishcon, L.

Brockway, L.

Molloy, L.

Bruce of Donington, L.

Morton of Shuna, L.

Burton of Coventry, B.

Mulley, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Parry, L.

David, B.

Pitt of Hampstead, L.

Davies, L.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

[Teller.]

Diamond, L.

Rathcreedan, L.

Donaldson of Kingsbridge, L.

Rea, L.

Elwyn-Jones, L.

Reilly, L.

Elystan-Morgan, L.

Rhodes, L.

Ewart-Biggs, B.

Roberthall, L.

Ezra, L.

Rochester, L.

Fisher of Rednal, B.

Ross of Marnock, L.

Fitt, L.

Sainsbury, L.

Foot, L.

Serota, B.

Gallacher, L.

Shannon, E.

Galpern, L.

Shepherd, L.

Glenamara, L.

Silkin of Dulwich, L.

Graham of Edmonton, L.

Stallard, L.

[Teller.]

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Grimond, L.

Strabolgi, L.

Hampden, V.

Taylor of Blackburn, L.

Hampton, L.

Taylor of Gryfe, L.

Hayter, L.

Taylor of Mansfield, L.

Hunt, L.

Tordoff, L.

Hunter of Newington, L.

Vernon, L.

Hutchinson of Lullington, L.

Wallace of Coslany, L.

Jacques, L.

Walston, L.

Jeger, B.

Wedderburn of Charlton, L.

Jenkins of Putney, L.

Wells-Pestell, L.

John-Mackie, L.

White, B.

Kennet, L.

Williams of Elvel, L.

Kilbracken, L.

Winchilsea and Nottingham, E

Kilmarnock, L.

Kinloss, Ly.

Winstanley, L.

Leatherland, L.

Young of Dartington, L.

NOT-CONTENTS

Ailesbury, M.

Bessborough, E.

Aldington, L.

Blanch, L.

Alexander of Tunis, E.

Boyd-Carpenter, L.

Allen of Abbeydale, L.

Brabazon of Tara, L.

Alport, L.

Brentford, V.

Ampthill, L.

Brougham and Vaux, L.

Auckland, L.

Caithness, E.

Bauer, L.

Cameron of Lochbroom, L.

Beaverbrook, L.

Campbell of Alloway, L.

Belhaven and Stenton, L.

Carnegy of Lour, B.

Beloff, L.

Carnock, L.

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Cobbold, L.

McAlpine of Moffat, L.

Constantine of Stanmore, L.

McFadzean, L.

Cork and Orrery, E.

Macleod of Borve, B.

Cottesloe, L.

Margadale, L.

Cullen of Ashbourne, L.

Merrivale, L.

Dacre of Glanton, L.

Mersey, V.

Davidson, V. [Teller.]

Morris, L.

De L'Isle, V.

Mountgarret, V.

Denham, L. [Teller.]

Norfolk, D.

Denning, L.

Norrie, L.

Dilhorne, V.

Nugent of Guildford, L.

Effingham, E.

O'Brien of Lothbury, L.

Ellenborough, L.

Onslow, E.

Elton, L.

Orkney, E.

Fanshawe of Richmond, L.

Orr-Ewing, L.

Fortescue, E.

Pender, L.

Fraser of Kilmorack, L.

Polwarth, L.

Gainford, L.

Porritt, L.

Gardner of Parkes, B.

Portland, D.

Gibson-Watt, L.

Reay, L.

Gisborough, L.

Rodney, L.

Glenarthur, L.

Saint Brides, L.

Gray of Contin, L.

St. Davids, V.

Greenway, L.

Salisbury, M.

Gridley, L.

Saltoun of Abernethy, Ly

Hailsham of Saint

Seebohm, L.

Marylebone, L.

Sharples, B.

Halsbury, E.

Skelmersdale, L.

Henderson of Brompton, L.

Slim, V.

Hesketh, L.

Stanley of Alderley, L.

Hives, L.

Sudeley, L.

Holderness, L.

Terrington, L.

Home of the Hirsel, L.

Teviot, L.

Hood, V.

Tranmire, L.

Hooper, B.

Trefgarne, L.

Hylton-Foster, B.

Trenchard, V.

Inglewood, L.

Trumpington, B.

Kaberry of Adel, L.

Vaux of Harrowden, L.

Lane-Fox, B.

Vivian, L.

Lauderdale, E.

Ward of Witley, V.

Layton, L.

Wilberforce, L.

Long, V.

Wise, L.

Lothian, M.

Young, B.

Lyell, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.39 p.m.
Clause 4 [Service charges and other contributions payable after exercise of right to buy]:
Lord Mulley Lord Mulley moved Amendment No. 2:
Page 4, line 42, at end insert ("and full particulars of any order or determination under section 131 of the Housing Act 1985 concerning the property").
The noble Lord said: My Lords, I beg to move Amendment No. 2, and in doing so I should make it quite clear that I express no views about whether or not council houses should be sold—indeed, I think an unrestricted sale is to be regretted—nor do I express approval of the particular rates of discount. In these modest amendments, I am concerned to try to give some equality to all those who apply to buy their residences, which is not the case at present. I am also concerned to draw your Lordships' attention to what I regard as a scandalous example of extreme delegated legislation: Section 131 of the Housing Act 1985. As we know, that was a consolidating Act.
The origins of this clause come from the 1980 Act. But I cannot believe that it was debated seriously by either House of Parliament because it gives powers to the Secretary of State to determine any price for a residence and to decide whether there should be a

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discount. It is true that it gives a guide to say that he should take into account the expenditure that might have been made in respect of the property after 31st March 1974. I imagine that date is retained because it covers the period of the Labour Government, when local authorities had money to spend on housing. It may be—I do not know—that that date has already been changed, but I prescribe in Amendment No. 3 (which I think it would be convenient to discuss with this amendment) for a later date.
The mischief is that any costs regarded as relevant in the subsection can permit a determination to remove, if necessary, the total amount of discount. There is no guidance on which matters may or may not be relevant. What I feel is extremely significant is that orders made under the final section are subject to statutory instrument procedure but determinations are not. Determination is specifically excluded from the parliamentary power. What is absolutely unclear is who determines the determination. The Secretary of State, with the best will in the world, cannot have a view about the value of every property that falls within the provisions of the Act.
My attention was particularly drawn to a recent case in Westminster where a tenant applied under the existing provisions to purchase a flat. The tenant received the response of the local authority that the value in round terms was £35,000 but because he was a long-standing tenant of over 20 years the discount was the maximum 50 per cent.; namely, the amount was £17,500. The response went on, with no explanation whatever, "But the amount you have to pay because of a determination is £25,000". Amendment No. 2 is a very modest one to require the local authority at least to give some explanation when such a different price from that worked out already as a result of the discount is the amount that has to be paid.
In fairness to the Government, they have in the Bill very properly made substantial provision for more information to be given to tenants on all manner of relevant matters when they respond to an application to buy property. Amendment No. 1 asks merely that included in such information, if appropriate, should be information where Section 131 operates to reduce the amount of discount.
The real mischief is not only the unfettered powers of the Secretary of State—and I very much hope that the noble Lord will tell us what powers are made, how they are exercised and why the Government presumably want to keep them—but the fact that, by its very nature, such a provision is most hard and most unfair on those who have been tenants of a local authority for a long period, because they are the ones who will be entitled to the top levels of discount and are, therefore, much more likely to be chopped off.
For example, in the case that I mentioned, if the tenant had been there only five or six years, he would not have had any reduction—because I understand, on inquiry, that no relevant expenditure had been made on the property—by an unexplained, naked figure; "Okay, forget about the discount and the provisions that Parliament has made, some unknown, anonymous person decides that you pay £25,000
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instead of £17,500". That seems to me a monstrous way of going on, not least because in the Bill, as I understand it, the Government are seeking to make more information available and generally seeking to give a better rather than a worse deal to those who seek to buy their houses. As I say, whether that is a good or bad thing is not the concern of the amendment.
Apart from anything else, I should have preferred to get rid of the mischief of this section. It is a classic case of delegated legislation that ought not to be allowed and against which noble judges, academic writers and others have fulminated over the years. I should have preferred to repeal it root and branch, but I have an instinct that that might not commend itself to the Government whereas I hope that my modest amendment may. I seek, in other words, a crumb of amendment rather than a loaf of rhetoric.
3.45 p.m.
Lord Skelmersdale: My Lords, I am grateful to the noble Lord, Lord Mulley, for the way that he moved the first amendment and spoke to the second and for giving me the opportunity to try to explain the matters that he has raised. I am at one with the noble Lord in wishing to ensure that tenants exercising the right to buy are fully informed about the way in which the purchase price quoted to them has been worked out so that they can query anything that looks wrong.
Section 125 of the Housing Act 1980, however, already requires the landlord in the notice setting out the terms of sale to tell the tenant what discount has been allowed against the market value of the property. Moreover, where the discount has been limited in accordance with the cost floor rule or the prescribed maximum, the notice must make this clear. There is admittedly no requirement at present for the Section 125 notice to give details of the cost floor determination or the maximum discount order.
The order is brief and easily summarised. It limits discount to £25,000. In debating this matter in Committee on an amendment by my noble friend Lord Coleraine, I explained that this limit was currently under review. The cost floor determination, however, is not so short and simple: it runs to no fewer than seven pages of typescript. Much as I applaud the enthusiasm of the noble Lord, Lord Mulley, for introducing the general public to the pleasures of reading subordinate legislation, I am not sure that the inclusion of copies of these documents, or even summaries of them, in the notices served on tenants would be particularly welcomed.
Speaking more seriously, it seems to me that the interests of tenants are already sufficiently protected by the requirement that, where a tenant's discount has been reduced by the cost floor or the prescribed maximum, he or she shall be told of this. There is also an explanation of the discount rules on pages 12 and 13 of the right-to-buy booklet produced jointly by the Department of the Environment and the Welsh Office. The tenant can easily obtain further details, if necessary, from the landlord or from one of those departments. I hope that the noble Lord will agree upon reflection that this is about as far as the Government should properly go.

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Turning to the other amendment, I assume that it was prompted by the understandable frustration that tenants feel on learning that their full percentage discount is not available to them because of the operation of the cost floor rule. The details of the rule are rather complicated and, as I said, it runs into some seven pages of typescript. However, in essence it is fairly simple.
The object is to ensure that sales at a discount under the right to buy cover the historic costs incurred in providing the house or flat in question. I must promptly qualify that simple statement in two respects. First, a sale may fail to cover costs because the cost of providing it was greater than its current market value. The cost floor rule is only concerned with making sure the sale does not take place at a loss because of the tenant's discount. Secondly, Section 131 of the Housing Act 1985 provides for costs incurred before 31st March 1974 to be disregarded. Costs incurred so long ago will normally be covered by right-to-buy sale prices anyway, even after discount, and it would be burdensome for local authorities to have to search out records of costs incurred before the reorganisation of local government, which is the date involved.
The amendment would bring the cut-off date forward to 31st March 1983. It would also change the operation of the cost floor rule so that a tenant was no longer liable to lose the whole of his or her discount. At most, one-fifth of the discount would be forfeit.
The effect of this amendment is that landlords who had incurred major costs in respect of a property before 1983 could nevertheless be required to sell it at a full discount, and even costs incurred since the new cut-off date would not necessarily be covered in full. The Government have always taken the view that it would be inappropriate to require local authorities and other public bodies to sell at a discount, if this meant that they incurred a loss on the costs which they had incurred in providing the house or flat. That remains our view. It may at some point be right to bring forward the cut-off date.
There is already power to do so by order, as the noble Lord, Lord Mulley, said. When that power was confirmed in the Housing and Building Control Act 1984 an assurance was given in another place that the cut-off date would not be brought forward in such a way as to increase the number of sales at a loss. In the event, the power has not yet been exercised. We are always ready to consider whether it might be appropriate to bring the date forward in order to make it unnecessary for landlords to consult old cost records. But I think it is clear that if the cut-off date was 31st March 1983 there would be a significant number of discounted sales which would fail to cover the cost of provision of the property. Could it be right, for example, for a local authority, which built a house in 1982 for £30,000, to be obliged to sell it now for perhaps half that sum?
The noble Lord, Lord Mulley, asked about determinations in Section 131. These are made by the Secretary of State and not by the local authority. The noble Lord is, I suspect, confusing the Secretary of State's determinations, which set the rules for calculating cost floors, with the landlord's calculations
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of the cost floor for a particular property. I hope that that explains the position and I urge the noble Lord to withdraw the amendment.
Lord Mulley: My Lords, I am most grateful to the Minister for the explanation. However, it does not seem to me to be in accord with the policy that the Government propound; namely, propagandising the great merits of selling properties with large discounts to long-standing tenants. Obviously, if a house had been built in 1982 it is possible (though I think it very unlikely) that the occupant seeking to buy it would qualify with the maximum amount of discount. I should have thought it was the case in the whole concept of selling council properties at large discounts that there shall be losses incurred, because clearly public assets are being sold at a fraction of their proper price.
The arrangements as they are, while I accept they are not subject to any parliamentary supervision, provide that a stroke of the pen by the Secretary of State (admittedly, in signing a seven-page document) sets the ground rules, and subsequently an official in the local authority office actually determines the minimum amount for which they will sell. There is no requirement that this is expenditure; it is anything which is relevant in the section and there is no guidance whatever about what that may be. Regarding these arrangements, in other respects Parliament goes into the minutest detail, and giving these wide powers seems to me to be totally unsatisfactory.
I hope that as a result of my raising this matter some publicity will be given to it, and perhaps clear instructions will be given to local authorities that they should at least give tenants seeking to buy, who are affected by these arrangements, some indication as to how the floor is calculated and not simply tell them that their floor will be X thousand pounds. In view of that, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Baroness David Baroness David moved Amendment No. 4:
After Clause 5, insert the following new clause:
("Dwelling houses situated within the cartilage of a building or land.
.—In Schedule 5 to the Housing Act 1985 (Exceptions to the right to buy) after paragraph 5 (Dwelling-houses let in connection with employment) insert—
Dwelling-houses situated within the curtilage of a building or land.
5A. The right to buy does not arise if the dwelling-house—
(a) forms part of, or is within the curtilage of, a building which or so much of it as is held by the landlord, is held mainly for purposes other than housing purposes and consists mainly of accommodation other than housing accommodation, or is situated in a cemetery; and
(b) has not been, or cannot easily be made, separate and distinct from the curtilage of the building or land within which it is situated; and where the sale might reasonably be expected to give rise to a loss of amenity or significant management or operational problems might result.").
The noble Baroness said: My Lords, perhaps I may say that I am not the noble Lord, Lord Broadbridge, whose name appears above Amendments Nos. 1 and 4 on the Marshalled list. There were mistakes in the Public Bill Office, but one cannot altogether blame

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them as we know what an enormous amount of work they have had to do. There are further mistakes later on in the Marshalled List, but anyone collecting a supplementary list will find that those have been corrected.
The new clause proposed by Amendment No. 4 is primarily designed to deal with dwelling-houses situated within a park, but it would also apply to other land where there were fire stations or a cemetery. Local authorities, mainly for financial reasons, have found themselves unable to reappoint park keepers or similar caretaking officials to each and every park, cemetery and so forth, and have therefore set up a system of roving officials. A park keeper's house may then be used for housing people from the waiting lists, or even employees having some small duties to perform in relation to the park where those duties cannot form part of the contract of employment.
In those cases, the right to buy would have to be admitted, but it could result in quite unmanageable situations if privately-owned homes were within park grounds. There would be conflicts of interest and there might also be security problems where access must be maintained to particular houses even when a park is closed. The new clause recognises that in some circumstances there would be no problems and the local authority would be open to challenge where no problems could be expected to result. Indeed, each case would have to be considered on its merits, but it would allow sensible decisions to be made to protect the wider public interest.
This is a matter which has been discovered in the course of the right-to-buy situation being considered, and it was possibly not envisaged by the Government or indeed by authorities when the legislation was brought in. However, I think it is worth drawing the matter to the attention of the Government and I hope we shall get an interesting response. I beg to move.
Lord Skelmersdale: My Lords, I can readily understand the objective of the noble Baroness in tabling this amendment, and I have some sympathy with its purpose. We are concerned here with houses and flats located within cemeteries or within what I may perhaps be allowed to call operational buildings—buildings such as schools—which are not there to serve housing purposes. As the law stands, if a public sector landlord lets a house or flat falling into this category to an employee in consequence of his or her being an employee, the tenancy may well be secure but the right to buy does not arise. However, if the letting is to an ordinary tenant the right to buy will arise unless one of the various exceptions to security of tenure or the right to buy applies.
If I understand correctly the intention of this amendment, it is to enable a landlord to let one of the houses or flats in question to an ordinary tenant without the right to buy arising if the nature of the property is such that that would cause problems. Let me say that I understand that the noble Baroness's amendment arises from a concern to enable local authorities and other public bodies to put surplus occupational properties to good use. If, for instance, a school caretaker's house is no longer needed, it should
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ideally be sold. However, if sale would present serious practical problems it is clearly better for such property to be let to a tenant even if the tenant has no connection with the school or cemetery. The amendment seeks to meet the objection that such a tenant would normally have the right to buy. Having said that, up to a point, I sympathise with the thinking behind the amendment, I am afraid that I do not think it succeeds in its objective.
The second leg of the new paragraph, subparagraph (b), seeks to define those cases where the house or flat in question could not be treated as a separate entity from the rest of the site and difficulty would be likely to arise if it were sold. The trouble is that the words used to define these cases need to be clear enough for landlords and tenants to know where they stand.
I fear that the words in the amendment would be liable to lead to disputes in litigation. For instance, what is meant by property being "separate and distinct" from the rest of the site in which it lies? Who is to judge whether it could easily be made separate and distinct? Again, who would judge whether sale would give rise to a loss of amenity or operational problems? In the last resort the courts would decide, but it is highly desirable not to overburden the courts by enacting legislation which is calculated to lead to disputes and—I am not making a silly point—I am sure that this was not the noble Baroness's intention.
In any case, I am not convinced that the amendment is wholly logical. The right to buy can be exercised only by secure tenants. The problem which the amendment seeks to address will therefore only arise once the house or flat has been let on a secure tenancy. This means that the landlord will already be unable to gain possession of the property, except on one of the grounds set out in Schedule 2 to the Housing Act 1985, and on the death of the tenant the tenancy may pass to a member of the family.
The assumption behind the amendment is that serious difficulties may arise if the secure tenant buys and perhaps sells one of the properties. It is not clear, however, what difficulties might arise as a result of the sale of the property which could not equally arise as a result of the granting of a secure tenancy. It is true that the secure tenancy might include suitable terms regulating such matters as access and the parking of cars. A right to buy a conveyance or lease may equally, however, include such covenants and conditions as are reasonable in the circumstances.
The London Boroughs Association, I am advised, has put forward some examples of dwellings in public parks about which it is concerned, but it has not produced examples which fall within the amendment as drafted; that is, dwellings within a cemetery or within the curtilage of operational buildings. The point on which the noble Baroness may have been advised does not arise under this amendment, because I understand that the amendment as drafted does not apply to dwellings in public parks but only to dwellings, first, within the curtilage of an operational building and, secondly, within cemeteries.
I hope that the noble Baroness will not think I am raising mere technical objections to the amendment. I recognise that it is a serious attempt to enable public bodies to improve the utilisation of surplus

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operational properties. I fear, however, that the amendment would create more problems than it solves. I therefore invite the noble Baroness to withdraw it.
4 p.m.
Baroness David: My Lords, I am grateful to the Minister for recognising that there can be problems for authorities which have had to let these houses on what they hope will be a temporary basis; and it is quite clear that the wording of my amendment is far from satisfactory. I think that the best we can do is to take it away and hope that we can get the wording better and, with the sympathy that has been expressed for it, bring it back at the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Consultation before disposal to private sector landlord]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 5:
Page 106, line 30, leave out lines 30 to 39 and insert—
("5.—(1) Consultation required under this Schedule shall culminate in a postal ballot and it shall be the responsibility of the local authority to organise and fund such a ballot.
(2) The ballot form shall be accompanied by all information relevant to the tenant regarding the protection afforded to the tenant by previous Acts of Parliament and which shall no longer pertain in the event of the proposals being accepted.
(3) If any of the information required under sub-paragraph (2) is withheld the proposals shall be negatived.
(4) In the event of a majority of tenants voting against the proposals the Secretary of State shall have no power to approve the proposals.")
The noble Lord said: My Lords, let me first apologise if the drafting leaves something to be desired. Because of the time factor the amendment was drawn up rather quickly, but I think most noble Lords can understand the point I am making.
During the Committee stage of the Bill, we discussed at great length the retention of the right of tenants to play a major part in determining what happens to their homes. What is the Government's present housing policy regarding council houses? They have a declared policy, which they have carried out, of giving any council house tenant the legal right to purchase his house at a discount. This amendment is an attempt to give those tenants who do not wish to purchase their houses the same rights to determine the future of their homes as the council house tenant who purchases his home.
I know that a lot was said during the Committee stage about consultation. I also know that the Minister tried very hard then to convince us that there is provision—which there is in the Bill—for consultation with the tenants, the local authority and, of course, the developer concerned. But we are of the opinion that under the Bill as it stands there is no guarantee that at the end of the day the tenants will have their historical rights to decide the basis of what they will occupy in the future; in other words, a tenancy can be sold above their heads.
I have no desire to interfere with the consultative procedures that are contained in the Bill. But I would draw your Lordships' attention to the heading of the
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paragraph on page 106 with which I am dealing. That reads:
"Consent to be withheld if majority of tenants are opposed".
I contend that my amendment guarantees absolutely that in the final analysis the will of the tenants will prevail, because it gives them the right to determine whether they wish to be part of a scheme which will transfer their tenancy. During the Committee stage we talked at great length about this and about the question of a public inquiry, but I think most noble Lords were of the opinion on that day that they were not prepared to go down that road.
The amendment ensures that tenants will be kept totally informed when a ballot takes place. I see nothing at all wrong with a postal ballot, because it will mean that many tenants are enabled to vote and the fullest possible knowledge will be gathered by the local authority as to what its tenants want, rather than having to send people around on a public relations exercise asking them at the doors. A postal ballot will reach the maximum of the tenants involved and there will obviously be the fullest possible ballot.
My amendment also contains the proviso that the tenants involved will receive the fullest knowledge about what any changes in their tenancy by a private developer would mean in the loss of historical rights under the housing Acts, some of which have been set up under this existing Government.
I do not want to delay the House on this amendment, because it is also linked with Amendment No. 6A, which goes into more detail. But I should like noble Lords to understand—and I repeat it once again—that before this Bill came to your Lordships' Committee I was inundated with letters from middle-aged people who had been tenants of council houses since the war. For the first time in their lives they are frightened, because their main asset—though it is not in their ownership—is being able to live in peace in council houses for years. They are scared to death that this Bill will take away the right of security of tenure which they have had.
I contend that the principles involved in my amendment will give those tenants the right to express their views. If in a ballot a majority of tenants are against the proposals, the proposals will fall. It is also said that after such an exercise the Secretary of State will have no power to intervene because the tenants will have made their own decision.
Throughout the Committee stage of the Bill the Minister repeated the theme that the Bill was not about property and houses but about tenants. I contend that my amendment gives tenants the right to decide the future of their own homes on the basis of a simple majority being either for or against. I submit my amendment to your Lordships and I hope it will command support.
Lord Ezra: My Lords, I should like to support the amendment proposed by the noble Lord, Lord Dean of Beswick. What he has suggested would enable the Secretary of State under paragraph 5 of Schedule 1 effectively to carry out what is proposed therein. How is the Secretary of State to find out what the majority of the tenants feel on the subject other than by consulting them? It seems to me that to do it by a postal ballot

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would be the most effective way of proceeding. I should therefore like to support the amendment.
Lord Stallard: My Lords, I, too, should like to participate in the debate, since my amendment, Amendment No. 6A, is linked to Amendment No. 5. I had a few reservations about Amendment No. 5 when I first read it. Although I have no objection to the postal ballot (and I have been participating in postal ballots for many years as a member of my trade union) I had reservations about the efficiency—and I put it no higher or lower than that—of some local authorities to conduct a postal ballot of the kind that would be necessary.
A postal ballot would have to pose the right questions and would have to be preceded by the right information. Therefore it would require resources. So I am a little worried in this regard unless the consultative process is spelled out. I concentrated on this point in Committee when I pointed out to the noble Lord the Minister the lack of detail in the consultative process—the kind of detail that would be essential if tenants were to make up their minds on options, the kind of detail that would be necessary if there were to be a referendum or a ballot. While the noble Lord the Minister made some constructive remarks in his reply none is contained in the Bill.
I have always understood from my experience of local authorities that at the end of the day what matters is not what the Minister says but what is contained in the Bill. After the arguments and debates have long since ceased we are left with the printed word in the statute. The Minister's words therefore are not always entirely relevant. It was with that thought in mind that I sponsored this amendment. It has the support of voluntary organisations such as Shelter and the Institute of Housing, which have argued almost since the beginning—and I have certainly supported them—that there must be more consultation.
At the Committee stage I gave two examples of the lack of consultation, and they are still relevant. I refer to the Waterlow estate in Tower Hamlets and to the Hadrian estate in the East End of London where the tenants and their representatives had to take the local authority to court before they had any semblance of consultation. Perhaps I may say that I was completely happy that that borough should conduct a postal ballot—but on what? There has to be something before the ballot—and that is the consultation.
The latest position in Tower Hamlets, after all this hassle between the tenants who are being deposed and the local council, is that the local council has now written to tenants; and if this is consultation, it is very interesting. The letter will take only a minute to read. It says:
"As you will be aware the Bethnal Green Neighbourhood Committee is currently considering options for the renovation of the Hadrian Estate. One of the options, as agreed by the Committee … was as follows:
'That officers pursue an open market disposal linked to a barter arrangement, whereby the whole estate would be refurbished at minimum cost to the Council, and a mixture to tenure of both rented and affordable homes for sale to local people be achieved'."
That is the only option mentioned.
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The letter continues:
"Should it be decided to adopt this approach, existing tenants on the estate would be offered a number of alternatives as follows:
"1. A transfer to suitable alternative accommodation elsewhere in the Borough.
"2. An offer of suitable rented accommodation on Hadrian Estate.
"3. The opportunity to purchase a modernised dwelling on Hadrian Estate.
"I have been requested to write to all tenants on the estate to determine how many would wish to remain on the estate, and how many would wish to be rehoused elsewhere in the Borough. I would be grateful if you would complete attached form and return it … If I do not hear from you, I will assume you wish to be rehoused elsewhere in the Borough".
That is the end of the consultation. It is obviously entirely inadequate. It is quite significant that in the course of the proceedings of the Bill, in the course of the Committee and in the course of today's discussion we have dealt with consultation at both ends of the spectrum. We have the home owners who on a large scale are seeking consultation before one of their homes is registered as a listed building. They are seeking consultation, and there may well be a strong argument that they ought to be consulted before their buildings, their castles or their homes are listed.
At the other end of the spectrum we have to battle to get the minimum amount of consultation for people who have no other home and who, as I have said before, have waited many years for their present home. It is interesting to see the approach to the matter in this House. On the one hand, a new clause has been inserted into the Bill virtually overnight; on the other hand, we have still to battle for what I think are the minimum rights to which tenants are entitled.
I want strongly to recommend that the procedure I have laid down and have tried to set out in the amendment should be accepted. A quick comparison between the amendment itself, which outlines the kind of consultation that is necessary—from sub-paragraph 3(a) to (g)—and the amount of information that is contained in the Bill on page 106 in paragraph 3(1) shows the case to be unanswerable—the case for an elaboration of that consultative process and for the inclusion in the consultation of the real elements that worry tenants. There has to be a timescale so that tenants can make their views known.
My amendment would make available to tenants the right of consultation. It would give tenants the opportunity to agree or disagree, or even suggest modifications to a scheme, with a duty placed on local authorities to obtain those views. That duty is set out in paragraph 4 of the amendment. The process would proceed only if the majority of tenants had agreed in writing to the scheme after a consultation period of not less than 12 weeks. That introduces a timescale which gives tenants and their representatives time to muster their arguments and their case against.
It is a perfectly reasonable amendment, on which we have had a great deal of discussion. I hope that the noble Lord the Minister has had time to look at the discussion we have had in Committee, and since, and will perhaps give a more positive response and accept the amendment.
Lord Broxbourne: My Lords, perhaps I may briefly reiterate and reinforce the doubts that the noble Lord

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so well expressed as to the practicality of the mechanism of the amendment proposed by the noble Lord, Lord Dean of Beswick, and in particular in regard to sub-paragraph (2) thereof. This reads:
"The ballot form shall be accompanied by all information relevant to the tenant regarding the protection afforded to the tenant by previous Acts of Parliament and which shall no longer pertain in the event of the proposals being accepted".
Those are very wide, general, comprehensive and, if I may say so, rather imprecise words. The particulars will of course vary in each individual case, and each individual case will require a considerable cerebral professional exercise to get the wording right.
I can visualise those happy days when I was confronted with these problems in my chambers and asked to settle the necessary form. Having looked at its complexity and difficulty, I should immediately have asked for the assistance of my learned junior, confident that he knew more about it than I did. He, in turn, no doubt would have delegated the first consideration to his pupil, and from there we should move on——
Baroness Faithfull: Or back, my Lords.
Lord Broxbourne: My Lords, or back, as my noble friend Lady Faithfull says. It would be a very difficult exercise, varying in each case. Paragraph 5(1) in the amendment states:
"it shall be the responsibility of the local authority to organise and fund such a ballot".
The noble Lord, with his customary breadth of approach and delicacy of feeling, did not address himself to the sordid question of finance, but it all must be paid for out of public funds, including the fees of learned counsel sitting at their desks, as I have visualised. They will be the beneficiaries of the noble Lord's amendment; but as we did not have the advantage of having the noble Lord included in our professional ranks, I must acquit him of any consideration in that regard. It will be a very complicated exercise.
I see that the noble Lord shakes his head, but I am not wholly inexperienced in these matters and I must tell him that I think he is wrong. It will be a very difficult, complex and effective exercise. That is the advice I respectfully give to your Lordships. It is advice which I think is right. It suffers from the disadvantage that all free advice, it is said, is worth about what you pay for it; but unlike my clients of yesteryear, your Lordships have the benefit of my advice, if benefit it is, for free. I give that advice and respectfully commend it not only to my noble friend the Minister but to the receptive minds of noble Lords and noble Baronesses on the Front Bench opposite.
Lord Elystan-Morgan: My Lords, the noble Lord, Lord Broxbourne, is a person of immense distinction in this and other fields and brings the great weight of his massive experience in this connection to bear on two matters upon which he has advised the House. The advice that the noble Lord gives concerns, first, sub-paragraph (2), which reads,
"The ballot form shall be accompanied by all information relevant to the tenant regarding the protection afforded to the tenant by previous Acts of Parliament and which shall no longer pertain in the event of the proposals being accepted."
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The noble Lord's advice is that it is broad and imprecise and that it is extremely difficult to know whether or not the local authority has carried out its statutory obligation. I think I correctly summarise the noble Lord's argument.
I do not for one moment pretend that this is an easy matter, but on looking at the schedule in its present form and at the obligations on local authorities, at the top of page 106, paragraph 3(1) reads:
"The requirements as to consultation referred to above are as follows.
(2) The authority shall serve notice in writing on the tenant informing him of"—
and there then follow these words:
"(a) such details of their proposal as the authority consider appropriate."
Is it possible to imagine anything that is wider in its scope than that? Would anyone in this House argue but that the obligations set out in that particular subsection are infinitely more imprecise than the wording of the provision that is proposed in the amendment?
The second criticism of the noble Lord is to the effect that the amendment will be expensive as regards public funds. An obligation is already placed upon the Secretary of State to satisfy himself that this information has been communicated, and to satisfy himself to such degree as he wishes that the tenants take a certain view on the proposal. That is not going to be done without the expenditure of public moneys. Therefore it seems to me that all the amendment does is spell out one reasonably practical way of ascertaining what the views of those tenants may be.
In short, much as the House at all times welcomes the advice of the noble Lord, I invite the House to say that it is without substance in that his criticism of imprecision pales into insignificance compared with the imprecision which exists in the schedule as it stands. Secondly, as regards cost, all that the amendment does is deal with a specific expenditure that is already the obligation of the Secretary of State in Schedule 1.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord Elystan-Morgan, founded the startling argument that because the schedule as it stands, if complied with, will involve some public expenditure it is a rather good thing to add more by way of the amendment. That is absolutely characteristic of the attitude of the party opposite to public expenditure. I am sure that we are much indebted to the noble Lord, Lord Elystan-Morgan, for displaying that with his characteristic honesty and frankness.
There is also a considerable difference, apart from expenditure, between the provisions of the first sub-paragraph of the schedule and the provisions of the second sub-paragraph of the amendment. My noble friend Lord Broxbourne, with his characteristic concern not to consume much of the time of the House, did not mention that there is a very formidable third sub-paragraph in the amendment which states:
"If any of the information required under sub-paragraph (2) is withheld the proposals shall be negatived".
Could anyone devise a better method of ensuring prolonged and expensive litigation than that? One is

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asking for protection afforded not by specific Acts but just by previous unspecified Acts of Parliament, and which would no longer operate, and then saying that, if you fail to give that, the proposals shall be negatived. That is simply asking for further litigation.
Although my noble friend Lord Broxbourne may not necessarily at one time have thought that to be a disadvantage, it seems to me to be adding to the cumbrousness of this whole amendment. I am bound to say that the schedule as it stands is perfectly adequate and that to accept the amendment would be to add a complicated, elaborate, rigid and expensive addition. Indeed, the only satisfaction I get from contemplating this amendment is to observe, with happy pleasure, the conversion of noble Lords opposite to postal ballots, for which, in another context, they have not always shown enthusiasm.
Lord Stallard: My Lords, with the leave of the House, may I reply to that last point made by the noble Lord, who never gets his facts right about trade unions? I said during my remarks that as a member of an engineering union I have been participating in postal ballots for many years. I have participated in more postal ballots than has the noble Lord, and I say that without fear of contradiction. I feel that he ought to get some facts right before he produces data in this authoritative tone as though they were facts when they are not.
4.30 p.m.
Baroness Fisher of Rednal: My Lords, I feel that there are two points which it is important for us to stress. So easily these matters take on a legal aspect. I think that we have all listened quite adequately to the discussion of points that could arise if litigation should take place and lawyers are brought in, but I think that what my noble friend was saying was that these are people who at the present moment are living or will be living in rented flats or houses in the main. All that is asked is that they should have the opportunity of deciding their fate.
Let us be quite truthful. Their fate is bound up with what will happen to them when the local authority decides to sell to a developer or to do anything other than keep them in the rented tenant category under the local authority with all the protection that they have been given under the Tenants' Charter. I do not think any noble Lord will feel that it is wrong for tenants to be given this opportunity and to have all the information that is available, because they will have their homes taken away from them. I feel sure that noble Lords in this House would be the first to make applications to the Secretary of State and all his worthy friends if it were intended that a building should be put up which would possibly block the view from the house in which they live.
These people are only asking for the chance to be given the fullest oppportunity to decide their fate. Perhaps if they are elderly—and there are many elderly people living in council properties—it is a serious matter for them to be uprooted and placed elsewhere. If the situation is explained to them in a proper manner and they are able to understand fully
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what will happen to them perhaps they will be able to take the change more easily. However, there are other people who may be working in an industry adjacent to their homes who might be moved 30, 40 or even 50 miles away, and who knows whether they will be able to afford the cost of travelling. Ordinary people are being given the opportunity to vote when they have been given all the information. Is that not something that we can give to those people who can only afford to live in rented properties?
A little later, as my noble friend Lord Stallard said, we shall be asking for people in a different category—the owner-occupier category—to have this privilege. Surely we ought to be able to accede quite easily to this amendment. As my noble friend Lord Dean said, the amendment might not be worded in exactly the required legal jargon but nevertheless the sentiments behind it are those that all noble Lords ought to be able to accept.
Lord Skelmersdale: My Lords, in this amendment the noble Lord is seeking to tighten up the consultation provisions in the Bill, and after the hours, or so it seems, that we have spent in Committee on this subject I am very sorry that he should have seen fit to bring up the matter again. My noble friend Lord Boyd-Carpenter is absolutely right. Schedule 1 already sets out in clear and concise terms the consultation arrangements which are to apply when a council wishes to dispose of tenanted dwellings to a private sector landlord.
I shall repeat a point that I made several times in Committee, which is that it is always the council which sets the ball rolling. In preparing Schedule 1, the Government have been conscious of the fact that it must cater for a wide variety of circumstances ranging from the sale of just one tenanted property to the transfer of an entire council estate, in some instances possibly involving a special company that has been formed by the tenants themselves.
The noble Lord, Lord Stallard, spoke about a particular and peculiar case in, I think, Golders Green. Whatever one may think about that case, the Bill is quite clear. I refer to Schedule 1, paragraph 5(1) at page 106, which reads:
"The Secretary of State shall not give his consent if it appears to him that a majority of the tenants of the dwelling-houses to which the application relates do not wish the disposal to proceed".
The arguments that have been produced by noble Lords opposite centre around how the Secetrary of State will reach that decision.
The amendments that we are now being asked to consider seek to require a postal ballot to be held and to require a council to send information on every conceivable detail or permutation that could arise to each and every affected tenant. However, Schedule 1 already provides for the tenants affected by a proposed disposal to a private landlord to be given full details of the proposal including any likely consequences, such as the loss of statutory rights, and for them to be able to lodge objections direct with the Secretary of State.
Since the Secretary of State must be provided with copies of the documents sent to tenants by the council under the Bill, he will be able to ensure that no important facts or details are omitted. He will have the

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power to require the council to carry out further consultations and if necessary he can reject the council's application for his consent. I can assure the House that the Secretary of State will be most concerned to ensure that such consultations are always carried out properly and in strict accordance with the statutory requirements, not least because it has already been the subject of considerable debate in Committee, as your Lordships will be aware.
Paragraph 5(1) of Schedule 1, which I have just read out, provides that the Secretary of State will not be able to give his consent if the majority of tenants indicate that they are opposed to the disposal. In essence therefore what is proposed in these amendments is already adequately covered in Schedule I of the Bill as it stands. The noble Lord, Lord Stallard, has twice advocated the holding of a postal ballot in order to ascertain the tenants' views on the proposal to which Clause 6 and Schedule 1 apply. I must express my surprise at this.
During the Committee stage of the Bill the noble Lord said:
"But is it not true that a lot of ballots of this type are affected by what is put on the ballot paper?".[Official Report, 9/10/86; col. 379]
Perhaps the noble Lord remembers saying that. We believe that it is far better to leave some flexibility in the way in which tenants can express their views for and against a proposal. The important point, and I am sure that the house will agree with me here, is that they should be consulted fully and have the opportunity to make their views known. Schedule 1 as it stands already provides for this.
The noble Lord, Lord Dean, has also pressed for an exhaustive list of the details which must be sent to tenants to be included in Schedule 1. Like other noble Lords, I enjoyed the exchange between my noble friend Lord Broxbourne and the noble Lord, Lord Elystan-Morgan. I shall not attempt to comment on each item individually. I fear in any case that we should be here for hours if I did. However, it would, for instance, specifically require a council to inform the tenants of the opportunities that would exist for them to continue to rent or purchase their own dwelling-houses or others in the scheme and on what terms. But as your Lordships are aware, the tenants would on transferring to a private landlord have security of tenure under the Rent Act and would have the preserved right to buy provided for in Clause 8 of this Bill.
These are factors which both the local authority and the prospective private sector purchaser will be anxious to bring to the attention of the tenants in order to secure their support for the scheme, and so there is no need to make this a specific requirement. It would be absurd to clutter the legislation with such details.
I felt that the noble Baroness, Lady Fisher, was using the particular to prove the general. There will be many cases where people in a particular house do not have to move from their dwelling at all even though the landlord changes. But it would be only fair to say that noble Lords opposite have attempted to gild the lily in other ways. Under these amendments a council would be prevented from applying for the Secretary of State's consent unless a majority of the tenants had agreed in
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writing to the scheme, following a consultation period of at least 12 weeks. In addition, a consultation exercise would be invalid if less than half of the tenants affected had responded in writing within a further period of at least eight weeks. It is not clear precisely how that is intended to work. Presumably those periods would run consecutively.
The principle of requiring people to object to a proposal to test its acceptability is repeated throughout the legislation. To require that they must also respond in some way when they are not opposed to a scheme is a new and unusual requirement and one that is unnecessary.
The matter does not end there. Even if that further requirement is satisfied, the council will be required to serve yet another notice informing tenants of any significant changes in the scheme and of their temporary powers to prevent the sale.
"following the procedures set out above".
What that seems to be saying is that the council must start the whole consultation process again with all the delay and uncertainty, and, as my noble friends have said, with all the cost that that would involve with no clear way of bringing the matter to an end.
Finally, where a local authority wants to dispose of houses to the private sector the tenants must participate in a full and proper consultation. I hope that the message will go out from this House loudly and clearly that tenants are not disadvantaged if their landlord changes; in other words, if their landlord becomes a private sector landlord instead of a public sector landlord. They exchange the security of the Housing Act for security of tenure under the Rent Act. I do not think that that is sufficient justification for this revamping of Schedule 1.
Lord Ross of Marnock: My Lords, I have listened and I was prepared to be persuaded that the Government were being fair to the tenants by giving them opportunities for consultation and everything else. I was happy, but I took the trouble to read the Bill properly. That is probably a mistake. The Minister tells us that everything will be fair. The Secretary of State and the local authority will do such and such and we should not burden them with detail, and so on. I do not know why the noble Lord even spoke. He need not worry about the Secretary of State.
After having dealt with requirements as to consultation, the power to require further consultation and the withholding of consent if the majority of tenants are opposed to the proposals, we have paragraph (6), which provides:
"The Secretary of State's consent to a disposal is not invalidated by a failure on his part or that of the local authority to comply with the requirements of this schedule.".
That is a gift. It enables the local authority and the Secretary of State to do as they like. We go to a great deal of trouble over the schedule and then we say that it does not really matter whether or not they carry out the requirements because the Secretary of State can still give his consent.
What does the noble Lord, Lord Broxbourne, with all his legal experience and authority, have to say about that? How fair and right is it for such a provision

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to appear in any statute? There is a lengthy schedule which provides:
"The Secretary of State's consent to a disposal is not invalidated by a failure on his part or that of the local authority to comply with the requirements of this schedule.".
That is utterly disgraceful and it should never have come near this House.
Lord Dean of Beswick: My Lords, I am grateful to my colleague for that intervention.
Lord Ross of Marnock: My Lords, it does not apply to Scotland, by the way.
Lord Dean of Beswick: My Lords, I can assure my noble friend that we gave that point some mileage in Committee. I do not for one moment wish to take part in a jousting contest with legal giants such as the noble Lords, Lord Broxbourne and Lord Boyd-Carpenter. The noble Lord, Lord Boyd-Carpenter, sometimes has a habit of firing bullets that turn into boomerangs. He challenged me and my colleagues about our position on trade union ballots. In Committee, he introduced the subject of subsidies to the mining industry. What the two things have to do with housing legislation, I do not know.
Let us look at trade union ballots. I have voted in trade union ballots since 1937, when I joined the AEU as a boy. The Conservative Government are so much in favour of ballots for trade union members that they are prepared to fund them. Why is the noble Lord, Lord Boyd-Carpenter, prepared so wholeheartedly to support a privilege for individual trade unionists, a privilege with which I agree, but is not prepared to extend the same privilege to council house tenants?
I have accused the Government before of treating council house tenants differently from other citizens by giving them fewer rights. I think that this proposal is a perfect example of that. The noble Lord, Lord Broxbourne, said that such a provision would diminish public funds. We need to return to who will initiate the proposals. It will not be the tenant; it will be the local authority.
When I moved the amendment I said that I was aware that it was probably flawed. I do not have the legal training to table an amendment of the quality of those tabled by either of those two noble Lords opposite or by my noble and learned friends. But I have just as much sense of what is fair and just for the individual. I have no desire to interfere with any of the consultative processes mentioned in Schedule 1. I wish to ensure that mistakes are not made and that the tenants' views are paramount.
If the amendment needs altering, it can be taken away and redrafted. I see no reason for changing my mind on the basic principle of the amendment that I have moved. The Minister, again, is trying hard to convince us that Schedule 1 will defend all tenants through thick and thin. The majority of council house tenants will probably not write in, but a bigger percentage would probably respond to a postal ballot which was returnable in a prepaid envelope. That would be the fairest way of finding out the view of the overwhelming majority of council house tenants involved. I see no reason to accept the Minister's assurance or to withdraw the amendment.
4.47 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided; Contents, 95; Not-Contents, 117.

DIVISION NO. 2

CONTENTS

Amherst, E.

Kirkhill, L.

Ardwick, L.

Leatherland, L.

Banks, L.

Listowel, E.

Beaumont of Whitley, L.

Llewelyn-Davies of Hastoe, B.

Beswick, L.

Lockwood, B.

Blease, L.

Lovell-Davis, L.

Blyton, L.

Mackie of Benshie, L.

Bonham-Carter, L.

McNair, L.

Boston of Faversham, L.

Mar, C.

Bottomley, L.

Mayhew, L.

Brockway, L.

Mishcon, L.

Bruce of Donington, L.

Molloy, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L.

Mulley, L.

Chitnis, L.

Nicol, B.

Cledwyn of Penrhos, L.

Northfield, L.

Collison, L.

Oram, L.

David, B.

Parry, L.

Davies, L.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.

Diamond, L.

[Teller.]

Donaldson of Kingsbridge, L.

Prys-Davies, L.

Elwyn-Jones, L.

Roberthall, L.

Elystan-Morgan, L.

Rochester, L.

Ezra, L.

Ross of Marnock, L.

Fisher of Rednal, B.

Sainsbury, L.

Fitt, L.

Serota, B.

Foot, L.

Shackleton, L.

Gallacher, L.

Shepherd, L.

Galpern, L.

Silkin of Dulwich, L.

Glenamara, L.

Stallard, L.

Graham of Edmonton, L.

Stedman, B.

[Teller.]

Stoddart of Swindon, L.

Gregson, L.

Strabolgi, L.

Grey, E.

Taylor of Gryfe, L.

Hampton, L.

Tordoff, L.

Harris of Greenwich, L.

Turner of Camden, B.

Hayter, L.

Vernon, L.

Houghton of Sowerby, L.

Wallace of Coslany, L.

Hughes, L.

Wedderburn of Charlton, L.

Hunt, L.

Wells-Pestell, L.

Hutchinson of Lullington, L.

Whaddon, L.

Jacques, L.

White, B.

Jeger, B.

Wigoder, L.

Jenkins of Putney, L.

Winchilsea and Nottingham, E.

John-Mackie, L.

Rennet, L.

Winstanley, L.

Kilbracken, L.

Winterbottom, L.

Kilmarnock, L.

Young of Dartington, L.

NOT-CONTENTS

Aldington, L.

Carnock, L.

Alexander of Tunis, E.

Coleraine, L.

Allen of Abbeydale, L.

Colville of Culross, V.

Ampthill, L.

Constantine of Stanmore, L.

Auckland, L.

Cork and Orrery, E.

Bauer, L.

Cottesloe, L.

Beaverbrook, L.

Craigavon, V.

Belhaven and Stenton, L.

Cullen of Ashbourne, L.

Beloff, L.

Davidson, V. [Teller.]

Bessborough, E.

De La Warr, E.

Boyd-Carpenter, L.

De L'Isle, V.

Brabazon of Tara, L.

Denham, L. [Teller.]

Broadbridge, L.

Dilhorne, V.

Broxbourne, L.

Duncan-Sandys, L.

Butterworth, L.

Ellenborough, L.

Caithness, E.

Elton, L.

Cameron of Lochbroom, L.

Faithfull, B.

Campbell of Alloway, L.

Falmouth, V.

301

Fanshawe of Richmond, L.

Milverton, L.

Fortescue, E.

Monk Bretton, L.

Fraser of Kilmorack, L.

Monson, L.

Gardner of Parkes, B.

Montagu of Beaulieu, L.

Gisborough, L.

Montgomery of Alamein, V.

Glenarthur, L.

Morris, L.

Gormanston, V.

Norfolk, D.

Gray of Contin, L.

Norrie, L.

Gridley, L.

Nugent of Guildford, L.

Grimthorpe, L.

O'Brien of Lothbury, L.

Hailsham of Saint

Orr-Ewing, L.

Marylebone, L.

Pender, L.

Halsbury, E.

Polwarth, L.

Hampden, V.

Porritt, L.

Harvington, L.

Portland, D.

Henderson of Brompton, L.

Reay, L.

Hesketh, L.

Rodney, L.

Hives, L.

Salisbury, M.

Holderness, L.

Saltoun of Abemethy, Ly.

Home of the Hirsel, L.

Sharples, B.

Hood, V.

Skelmersdale, L.

Hooper, B.

Slim, V.

Hunter of Newington, L.

Somers, L.

Hylton-Foster, B.

Stanley of Alderley, L.

Inglewood, L.

Sudeley, L.

Kaberry of Adel, L.

Swansea, L.

Kimball, L.

Terrington, L.

Lane-Fox, B.

Teviot, L.

Lauderdale, E.

Thorneycroft, L.

Layton, L.

Torrington, V.

Long, V.

Tranmire, L.

Lothian, M.

Trefgarne, L.

Lyell, L.

Trenchard, V.

McAlpine of Moffat, L.

Trumpington, B.

McFadzean, L.

Vaux of Harrowden, L.

Macleod of Borve, B.

Vivian, L.

Mancroft, L.

Ward of Witley, V.

Margadale, L.

Westbury, L.

Maude of Stratford-upon-Avon, L.

Whitelaw, V.

Wise, L.

Merrivale, L.

Young, B.

Mersey, V.

Resolved in the negative, and amendment disagreed to accordingly.

Social Security Benefits: Uprating
4.55 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, with the leave of the House I shall now repeat a Statement being made in another place by right honourable friend the Secretary of State. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement about the next uprating of Social Security benefits, which will take place in the week beginning 6th April 1987.
"This will be the third increase over 16 months and covers the eight months from January to September 1986. It will complete the process of transition to the new timetable for benefit upratings which, in future, will take place annually in April. This will ensure that pensioners and other beneficiaries receive increases in their resources at the same time as most other financial changes take place.
"The Government are pledged to increase pensions and other linked long-term benefits in line with the rise in prices. The retail price index published last Friday showed a rise between January and September 1986 of 2.1 per cent. Accordingly,
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the retirement pension for a married couple will rise from £61.95 to £63.25, an increase of £ 1.30 a week, and for a single person the pension will go up from £38.70 to £39.50, an increase of 80p per week. Widows' pensions and invalidity benefit will also be increased by the same percentage, as will public sector pensions.
"In the 16 months of the transitional period the pension for a couple will have risen by £5.95 a week as a result of the three upratings and that for a single person by £3.70 a week.
"Turning to benefits for families, the Government have made it clear that in considering the uprating of child benefit account must be taken of priorities within the social security budget—every 10p increase costs over £50 million a year. We have decided that child benefit will go up from £7.10 to £7.25 a week, which is fully in line with the increase in prices. The Government also remain committed to the protection of low-income families with children. The prescribed amounts in family income supplement will therefore rise by between 2·1 and 2·3 per cent, depending on the age of the child. This increase will ensure that low-income working families with older children on FIS have seen the real value of their benefit increased by some 20 per cent. since 1978.
"Over the eight months period for this uprating the retail price index excluding housing costs rose by 2 per cent., almost the same as for the RPI. The short-term rate of supplementary benefit will therefore increase from £48·40 for a couple to £49·35, a rise of 95p. There will be corresponding increases in the other scale rates. Additional requirements in the supplementary benefit scheme will be increased in line with appropriate elements of the retail price index. The cost of fuel and light has remained stable, and so there will be no change in heating additions. But dietary additions will be increased—by 10p a week for someone receiving the higher rate of addition.
"As in July I have decided to link the increase in the basic needs allowance for housing benefit to the cash increase in the basic retirement pension and in child benefit. This will ensure that virtually all pensioners do not lose housing benefit as a result of the increase in retirement pensions. It will also minimise the operational problems for local authorities next April. Full details of the increases in the housing benefit needs allowance and nondependent deductions, together with the other benefit changes, are set out in a schedule which I have placed in the Vote Office.
"I am also proposing to adjust the rent taper for relatively better off housing benefit recipients—those with incomes above the needs allowance—from 29 per cent. to 33 per cent. Those at supplementary benefit level and some way above it will not be affected. This change is subject to consultation with the relevant organisations. The amount of earned income which is ignored in the housing benefit calculation will be held steady for the second uprating in succession. This will ensure that those on low earnings continue to benefit from last April's tax reductions.

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"Benefits payable to sick and disabled people, including sickness benefit, invalidity benefit, severe disablement allowance and invalid care allowance, will all rise by 2.1 per cent. So too will attendance allowance and mobility allowance. I am also taking the opportunity to make a further change. Funeral expenses will be paid in respect of war pensioners who die as a result of their accepted disablement whether the funeral is arranged privately or by the War Pensioners Welfare Service.
"The House will shortly have an opportunity of debating these changes. I should add that they will apply in Northern Ireland as in the rest of the United Kingdom.
"The changes I have just announced will add over £700 million to the social security budget next year, on top of the £420 million from the July uprating. Since 1978–79, spending on pensions has grown in real terms by over 25 per cent. at an additional cost of £4 billion a year. About £1¾ billion of this reflects an increase of 850,000 in the number of pensioners; the remainder represents a real improvement in the value of the pension.
"The new rates will mean that the retirement pension has more than doubled in cash terms since November 1978; and that we have protected the position of other beneficiaries, including low income families with children, and the sick and disabled."
That my Lords, concludes the Statement.
Baroness Jeger: My Lords, I should like to thank the Minister for repeating that Statement. I hope that there will be Members on more than one side of the House who agree with me that it would be useful if the logistics of the repetition of Statements could be altered. I do not think that the business of your Lordships' House is helped very much by the introduction of Statements when we do not know at what time or what will happen. I do not know the answer and I should not presume to suggest one. However, I know that many noble Members on both sides of the House with whom I have discussed this problem feel that we are not dealing very efficiently with this aspect.
I thank the noble Baroness for repeating the Statement, as I said. However, I wish to ask her a few questions, although I assure her that I shall stick to the traditions of the House and not initiate a debate. I am very glad that she said there would be a debate. She said that the Government are pledged to increase pensions in line with the rise in prices. I should like to ask her whether the practice of the previous Labour Government of linking the increases to incomes would have brought about more generous increases. I am told that if that had been done the increase would have been about 10 per cent. instead of 2.1 per cent.
I should also like to ask the noble Baroness whether the Government have given serious consideration to the question of linking retirement pensions to the retail price index? I ask this question because for some reason which I do not understand I have read the Department of Employment's Retail Prices Index Advisory Committee report, which I hope we shall
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have the opportunity to debate at some time. At Page 17 of that report it states:
"Pensioner households are defined for index purposes as those deriving at least three-quarters of their total income from state pensions and benefits, and such households are excluded from the coverage of the general index".
If these pensioner households are excluded from the general index, why does their pension have to be linked to the general index? I ask this question in a not unfriendly way. I do not understand arithmetic, but it appeared to me, having read this boring document, that I should ask someone about it.
I also understand that the general index of retail prices does not include housing. The advisory committee has suggested that it should. Housing is one of the most sensitive and expensive elements in any family budget. We know that repossession of housing, because of failures in mortgage repayments, has become a very serious social problem. I am not sure whether the Government have taken on board the expense of housing, particularly at a time when mortgage rates are going up. Is the increase in mortgage rates to be reflected in the retail price index, and if so, when?
I should like to ask the noble Baroness a question, which we discussed before during the passage of the Social Security Bill, concerning the Government's pledge that only 50 per cent. of mortgage payments should be made to unemployed people during the first six months when they are trying to keep their heads above water. In view of the present situation with increasing mortgage rates, will the Government do anything to be more generous about this?
Perhaps I may ask about the severe weather payments, as this is something we have often discussed. I have found that in the Library there is a paper from the Social Security Advisory Committee which I understand is not generally available. I think perhaps I spend too much time in the Library. However, as the paper is in the Library one must be able to use it. This paper suggests that there should be standard single payment of £5 each week in any local office area where the temperature averages minus 1.5 Celsius, or less.
Lord Harmar-Nicholls: My Lords, I may be wrong, but the questions that the noble Baroness has asked so far seem to bear no relation whatever to the Statement. They are general arguments on the whole picture. Should we not confine our questions to the Statement itself, when it has been passed on to us from the other place?
Baroness Jeger: My Lords, I thank the noble Lord, with whom I have had a happy relationship for many years. I did not think it was out of order to ask why something was not in a Statement, as I know that many pensioners and many people who are looking after them are concerned about hypothermia and all the problems of severe weather. When we have a Statement which does not mention this matter I am entitled to ask why it is not mentioned especially when I find that there is an enormous piece of paper in the Library telling me of the submission from the Social Security Advisory Committee and when I ring up the department I am told they have nothing to say about

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it. If the Social Security Advisory Committee has submitted this Statement and the department has nothing to say about it, I think that I am perfectly in order to ask the noble Baroness, with her usual courtesy, to tell me something about it.
In case other noble Lords have not bothered to go to the Library and find these papers, I shall, briefly, point out that the suggestion is that there should be a heating allowance of £5 a week where the temperature is 30 degrees Fahrenheit—I shall not mention Celsius because I do not understand it. That is the department's definition of "cold". Some noble Lords might be too hot and some might be too cold, but I am told that the temperature in this Chamber is on average 75 degrees Fahrenheit.
Lord Wallace of Coslany: My Lords, it is hot air!
Baroness Jeger: My Lords, it might be too hot, but I suggest that 30 degrees Fahrenheit is too cold for people, and this is no way to deal with the problem. Nor can I find any help in the Statement for people who have prepayment meters or who buy coal in advance. The Statement contains nothing about the problems of the old regarding the cold or hypothermia which caused so much anxiety last winter.
I have said that I shall not extend this exchange into a debate, but I should like to make one or two very brief points. We understand that, because of the Social Security Bill, from next April there will be a reduction in benefits and that the death grant and certain maternity grants will be abolished. There are suggestions that 20 per cent. of the rate bill will have to be paid by individuals. Therefore, I have to ask whether we are right in relating these increases only to the retail price index, as the poorest people in our country will be deprived because of the reductions in social security payments which will be introduced next April. Therefore, the relevance of the retail price index becomes less important in as much as it relates to the family budgets of these people.
I know that, with her usual courtesy, the noble Baroness will give answers to all these questions, and I look forward to a debate when we can go into them in greater detail.
Lord Banks: My Lords, I should like to join in thanking the noble Baroness for repeating the Statement made in another place. It would appear that this is a fairly routine uprating Statement compensating for the 2·1 per cent. increase in inflation. On previous occasions we have made it clear from these Benches that we support the move of the uprating date to April.
I am glad that child benefit has been increased in line with prices. However, last year's loss has not been made good, and that I regret. I should like to ask the noble Baroness whether the Government propose to restore that loss at some time in the future. There have been some suggestions in the press that an attempt was made by the Treasury to reduce the increase in child benefit this year to below the increase in prices, and one wonders whether there is to be a battle of this kind every year. It would be reassuring if the noble Baroness could say that it was the Government's intention to maintain the real value of child benefit.
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Perhaps the noble Baroness can give the amount of the saving to be made by the adjustment of the "taper" for rent in housing benefit. Is this not a case of reducing the benefit of some who are not far above the poverty line? Do the relevant organisations, to which this particular proposal is to be referred, include the Social Security Advisory Committee?
Have the Government thought any further about the level of the basic pension? Although there was some increase in real value in the first years of this Government's period of office, is not the position that, with the break in the link with earnings, to which the noble Baroness, Lady Jeger, referred, and with earnings increasing faster than prices, pensioners are now being left behind earners? When will the pensioners be permitted to catch up? If they are not so permitted, is it not a fact that eventually the pension will almost entirely consist of the earnings-related portion, to the detriment of the poorest? Is it also not a fact that virtually all benefits are falling behind as a percentage of average earnings?
We shall certainly want to consider this uprating carefully and discuss it further when the appropriate orders come before the House.
5.15 p.m.
Baroness Trumpington: My Lords, if I agree with nothing else that the noble Baroness, Lady Jeger, has said, I certainly agree with her about the temperature of this Chamber, which seems to be overly warm this afternoon.
The noble Baroness raised several points and I shall do my best to reply to them. With regard to the increases in relation to earnings, the noble Baroness asked what the uprating would have been. The uprating would indeed have been higher if it had been linked with earnings, but the Government have to take account of what the country can afford. Each 1 per cent. increase in benefit rates costs over £400 million, and unfortunately the Government do not believe that a higher increase can be afforded at this time.
The noble Baroness asked why we use the historic method. The actual figures for inflation provide a much more reliable guide than the forecast method which was favoured by the Labour Government, which was wrong five times out of seven. The pensioners' price indices cover only those pensioner households in which at least three-quarters of the total income comes from state pensions or benefits. That rules out 60 per cent. of retired people. Because of technical difficulties the indices do not include the housing costs which most pensioners have to face. The indices are not considered to provide a better indication of the spending patterns of pensioners in general than that provided by the retail price index. In recent years at least the PPIs have anyway tended to rise less fast than the RPI or pension rates, and pensioners have done better with the RPI.
Perhaps the noble Baroness may have misunderstood some aspects of RPI and the separate pensioners' price index, which concentrates on poorer pensioner households and does not include housing costs because they are generally met by benefits for such households. However, I shall gladly write more

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fully to the noble Baroness about the points she has raised concerning the RPI.
There is quite a lot that I should like to say about the question of the winter premium. Our main help with fuel costs for those in receipt of supplementary benefit is through the weekly scale rates. Extra weekly heating additions are not being increased because, as the Statement said, the fuel price fell by 0·1 per cent. between January and September this year. That means that all heating additions are now worth more in real terms than they were in April, when benefits were last uprated.
We are very concerned about the dangers of hypothermia, and we are investigating the increase in references to hypothermia on death certificates last year. In the meantime we are concentrating extra help with fuel costs during periods of very cold weather on the groups most vulnerable to hypothermia—households with someone over the age of 65 or under two years old or with sick or disabled people. The Labour Party's winter premium idea, put forward at the Labour Party Conference, of a £5 winter premium for poor pensioners and widows on supplementary benefit, plus another million slightly above that level, would cost about £150 million. There were a lot of promises made by the Opposition. But the most important thing for everybody to whom these uprating measures apply is that this Government have kept down inflation, which is the best means possible for increasing the general wellbeing of these people.
The question of mortgage interest and supplementary benefit was raised by the noble Baroness. The Government's main proposal is to limit the mortgage interest payable with supplementary benefit to 50 per cent. for the first six months on benefit for all under 60. The change was foreshadowed in both the Green Paper and the White Paper on social security reform. It is planned to save around £30 million of the current expenditure of £150 million in a full year, and to affect 90,000 claimants at any one time of the £9 billion paid in mortgage interest to building societies alone by 6 million borrowers.
Two proposals will help home-owners to adjust to the change. First, a special disregard will enable those with mortgage protection policies to use the income to meet the balance of their mortgage payments. Secondly, those who stay on benefit after six months will be eligible to receive help with the extra interest on a loan which has been rescheduled by a lender to incorporate arrears arising out of the six months' limitation.
The noble Lord, Lord Banks, asked about child benefit. We are increasing child benefit by 2·1 per cent. from £7·10 to £7·25 in line with inflation. The level of benefit has to reflect the ever-increasing size of the social security budget, in the context of which the Government have channelled resources in the most effective way. The universal nature of child benefit attracts a high cost, and yet despite competing demands on the available resources we have been able to retain child benefit as a valuable, non-means tested and non-taxable contribution to the cost of bringing up children.
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With regard to housing benefit, the housing benefit needs allowances are the starting point for calculating housing benefit for those not on supplementary benefit. They are usually set via a formula which would have taken account of last April's rent and rates increases. The needs allowances are being increased. They are not being increased by as much as they would have been. The point I wish to make is that we are not altering the fact that rent and rate increases will feed into the housing benefit calculation in the normal way next April. Those increases will normally outweigh in cash terms any losses arising from the two savings measures.
The other point I should like to deal with that the noble Lord, Lord Banks, mentioned was the question of the break in links with earnings. When will pensions be able to catch up? The noble Lord's question deals with a very long timescale. It would not be responsible to move to a system which would result in substantial increases in real terms in future years irrespective of the country's ability to pay for them, but we shall continue to honour our pledge to increase in line with prices, which we are already doing. I hope I have answered the questions of the noble Lord and the noble Baroness. If not, of course I shall write to them.
Lord Boyd-Carpenter: My Lords, arising out of my noble friend's last few sentences, can she bring out that any attempt to link social security benefits with wage levels would undoubtedly be frustrated by the substantial increases in wage rates taking place at the moment? Can she, with all the authority of her office, emphasise that those who push these substantial demands are jeopardising the position of those who depend on social security?
On a separate point, can she amplify a little her reference to both war pensions and war widows? Can she confirm that the traditional policy of her department, going back many years, of giving priority to war pensioners still remains, in view of the fact that many of us feel that they have the highest of all claims on the national conscience?
Baroness Trumpington: My Lords, with regard to the first point made by my noble friend, I think he has said it all himself, and I gladly agree with his words. On the second point, as the person responsible for war pensioners I am particularly pleased to have noted in the Statement—and I hope that other noble Lords and noble Baronesses will echo my great pleasure—that the worries of the charges for a funeral, and having to have it done through the department, have now been relieved. That is a step that I know my friends in the war pensions world will greatly welcome.
War pensions are going up by 2.1 per cent. A 100 per cent. disabled former private soldier will receive an increase of £ 1.30 a week from April 1987. This means a rise in his weekly payment from £63.20 to £64.50, tax free. The main allowances payable with war pension will also be increased.
The standard rate for war widows—and I know that my noble friend is interested in this situation as well—will be increased from £50.30 to £51.35, tax free. The maximum rate of rent allowance payable to a widow with dependent children is being raised to £19.55 a week. There are currently 215,000 war

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disablement pensioners, and 63,000 war widows, mainly from the two world wars.
Allowances such as comforts allowance, age allowance, clothing allowance, which are available only to war pensioners, are being increased. The war widow's differential over the national insurance widow will go up to £11·85 a week. Under the war pensions scheme, all disabled ex-servicemen and widows of ex-servicemen receive the same standard rate of pension, irrespective of when service ended. I think that that gives as full an answer as I can give. I am sorry that I get carried away, but they are so near and dear to my heart.
Lord Stallard: My Lords, perhaps I may also thank the noble Baroness for repeating the Statement. At the same time, I should like to indicate my support for the initial remarks of my noble friend Lady Jeger when she protested about the way that these important Statements are introduced into this House; and particularly today when it is sandwiched in the middle of a debate on linked amendments. That cannot be good for the best management of the House.
However, the noble Baroness will be glad to know that I cannot go into detail on this matter because I have not seen the Statement, and I should like to read it. I therefore welcome her indication that there will be an early debate, when we shall be able to participate.
Baroness Trumpington: My Lords, I did not say that.
Lord Stallard: My Lords, the noble Baroness says that she did not say that. May I ask her to say it? She ought to have said that there will be an early debate on such an important matter as this; and perhaps she can say it. The noble Baroness will recall that in all the discussions we have had on upratings there has always been a great point made of the fact that the increase was announced in the Budget, for a number of obvious reasons, but it was never paid until November, by which time it had been gobbled up by all sorts of other increases; and there were arrangements made to take care of that.
I have always argued that there should be a biannual increase—twice a year. In the days of computerisation that ought not to be beyond us, and it would at least take care of some of those arguments. But if we are now to see the announcements in November—perhaps the noble Baroness will tell us that will be the norm; that the intention of the Government is to make the announcement in November for April—we are back to that position.
I understand from the Statement that the increase was based on inflation at 2·1 per cent., when it is now over 3 per cent. and still rising. Again the up-rating will already have been gobbled up before it is received next April. The 25p pensioners were given last July has long since disappeared and that, when added to the 80p envisaged in this uprating, £1·05, will certainly not compensate for the increases between last April and next April. Will the noble Baroness say what consideration has been given to the proposal still on the table for a bi-annual announcement?
Finally, on the same point I feel very strongly about the staff who have to deal with the numerous changes,
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procedures and introductions of up-ratings on a wide range of benefits. They are always on the receiving end. The people on the receiving end to whom I have spoken do not blame the Minister; they blame the fellow up in the office. They have had a difficult period over the last couple of years or so. I hope that the noble Baroness will join me in congratulating them on how they have coped so far and will perhaps commiserate with them on how they might be asked to cope with any future increases.
Baroness Trumpington: My Lords, I was rather puzzled when the noble Baroness, Lady Jeger, spoke about my having said there would be a debate, because at that time all I had done was to repeat a Statement. In no way could I have said that there was to be a debate. That does not lie in my gift anyway. It is a matter for the usual channels.
Baroness Jeger: It says so here, my Lords.
Baroness Trumpington: My Lords, the same point applies to the way that Statements appear before your Lordships. That, too, is a matter for the usual channels. This year we have effectively had two up-ratings in a year and it is for that reason that the level of the up-rating is less than the 3 per cent. annual rate of inflation that the noble Lord, Lord Stallard, quoted. It was for only eight months, as was the July increase.
The noble Lord, Lord Stallard, gave me one very welcome opportunity and that was to thank and to congratulate the staff who work untiringly and loyally in offices throughout this country. It gives me very great pleasure to be able to pay a warm and deserved tribute to all those people.
Lord Wallace of Coslany: My Lords, I can understand my noble friend Lady Jeger misunderstanding the situation. The Statement said that the House would shortly have an opportunity to debate these changes. However, that applies to another place. But what applies to another place must surely apply to us, because for the last three weeks we have been trying to keep the Members of that place straight by working longer than they have.
In view of this anticipated debate there is one point which I wish to put to the noble Baroness and that is the question of the retail price index increase of 2·1 per cent. and the retail price index itself. My impression is—I think I am right—that a number of housewives believe it is a fiddle and a majority of them do not understand it, probably including myself! If we have this debate, as indeed we should, can the noble Baroness say whether the House will be provided with a breakdown of exactly how this index is constituted item by item and its application to pension payments? That is all I am asking for at the moment, but the public at large do not understand the retail price index. They are very suspicious.
Baroness Trumpington: My Lords, I can only repeat that it is not in my gift to talk about future debates. I feel sure that the noble Lord, Lord Wallace, will speak to the usual channels and it will be arranged in that way.

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I have been given a note from on high which says that the retail price index is the average of 130,000 items. If the noble Lord, Lord Wallace, understands that, good on him.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that if the Opposition want to debate the subject they can have a debate by giving up their own time? They are allocated time and they can choose to take this subject. I rather suspect they will not use their time for it because my noble friend has repeated an excellent Statement, which reflects so much credit on the Government that the Opposition are not likely to want to emphasise that.

Housing and Planning Bill
5.35 p.m.
Consideration of amendments on Report resumed.
Baroness David Baroness David moved Amendment No. 6:
Before Clause 7, insert the following new clause:
("Preservation of rights of secure tenants.
.—In section 32 of the Housing Act 1985 insert—
"(6) Where a disposal is subject to an existing tenancy or tenancies, the Secretary of State shall not give any consent for the purposes of this section unless he is satisfied that agreement has been reached as part of the disposal arrangements to secure the preservation and continuation in force after such disposal of the rights granted to secure tenants by Part IV of this Act").
The noble Baroness said: My Lords, we come back to the Housing and Planning Bill. The purpose of this amendment is to insert a new clause after Clause 6. Council tenants were granted important rights by a Conservative Government under the Tenants' Charter laid down in Part IV of the Housing Act 1985. These rights include the right to buy their home at a discount and the right to a council mortgage; the right to be consulted about matters affecting their home or tenancy; the right to receive information about tenants' rights and their council's obligations as landlord, for example, to keep tenants' homes in good repair; the right to be reimbursed for certain repairs to the home under the tenants' right-to-repair scheme; the right to take in lodgers, to exchange the home and to sub-let; and the right to make improvements to the home. None of those rights exists in statute for the tenants of private landlords, and so what will become of the Tenants' Charter rights if council homes are disposed of to a private landlord?
Clause 8 of the Bill protects council tenants' rights to buy their home and their right to a council mortgage if their home is transferred to a private landlord. But all the other rights listed above which council tenants have under the Tenants' Charter could be removed since they will not be protected in statute by the tenants' new private landlord.
The purpose of this amendment is to ensure that arrangements would be made to protect all the council tenants' existing rights under the Tenants' Charter—not just their right to buy or their right to a council mortage. We brought forward this amendment in Committee because we wished to protect the rights that council tenants have under the charter if their
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homes were handed over to a private sector landlord. Now we are bringing it back for further consideration on Report because we considered that the response the Minister gave was unsatisfactory.
Though the Minister rejected our amendment as unnecessary and claimed it could "frustrate the wishes of council tenants" (that was in Hansard on 9th October at col. 377), his arguments were extremely unconvincing. First, he argued that council tenants' rights would be substantially unaffected if their homes were handed over to a private sector landlord. The rights they would have under the Rent Act would be "very little different" from the right under the Housing Act, he claimed (that was at col. 380). But this is simply untrue.
Private tenants have no statutory rights to exchange their home, to take in lodgers or to sub-let. They have no statutory right to improve their home or to be reimbursed for repairs under the right-to-repair scheme. They have no statutory right to receive detailed information about the terms of their tenancy or about their landlord's obligations towards them (for example, to maintain their home in good repair) and they have no statutory right to be consulted by their landlord about matters affecting their home or tenancy. Council tenants have all those rights.
Clearly tenants' rights could be substantially reduced if their council homes were handed over to a private sector landlord. That is why we have brought forward our amendment; to ensure that their rights would be protected following transfer.
Secondly, the Minister argued that if secure tenants' rights were protected in statute, following disposal of their homes this could "deter potential private sector purchasers" of tenanted council property (that was at col. 379). But it is difficult to see why if such purchasers wished to take over the management of council homes in the interest of tenants, they would be deterred by the protection of tenants' rights in statute—for example, their rights to information and consultation about the way their homes are managed on transfer. The Government have decided under Clause 8 to protect the right to buy, which clearly could deter prospective private sector purchasers. Why then should council tenants' other rights under the charter not be similarly protected in statute?
Thirdly, the Minister interestingly argued that our amendment could frustrate the wishes of tenants. If tenants wish to risk the loss of their statutory rights involved in the disposal of their council homes to a private sector landlord, why, he asked, should we seek to prevent this? He argued that tenants can weigh up for themselves the advantages to be derived from the disposal of their homes against any loss of rights that they may incur. That was in col. 377 of Hansard. This overlooks a fundamental principle in consumer law which is that the protection afforded by the consumer's statutory rights cannot be removed by the consumer opting out of such protection. A disposal would moreover risk the loss not only of an individual's statutory rights but the rights of all other tenants affected by the scheme.
The Minister is arguing not only that tenants should be able to opt out of their own statutory rights but that they should also opt out of other people's statutory

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rights at the same time. The Minister justified his position by comparing a tenant's vote on the disposal of a council estate to a vote at a general election. He pointed out that the party taking power may not have the consent of the majority of the electorate. But voting in a general election does not involve the loss of one's statutory rights if the party that one voted against gains power.
We consider the Minister's replies to be extremely unconvincing. Parliament granted council tenants the Tenants Charter rights because it was believed that council tenants should enjoy such protection in statute against arbitrary decisions by their local authority landlord. Why should such rights not be protected on the disposal of their homes to another potentially much less accountable private sector landlord? I beg to move.
Lord Skelmersdale: My Lords, noble Lords opposite have rightly stressed the importance of full and detailed consultation with council tenants about matters affecting their homes. We need no reminding of this. Indeed, before the Statement we had a Division on just this point. It has always been this Government's policy to ensure as far as possible that such consultations are held. That is why we have introduced the new consultation requirements now contained in Clauses 6 and 10 of the Bill—to strengthen further the right of council tenants to be consulted about plans affecting their homes.
Under Clause 6 and Schedule 1, tenants must be advised in writing of the details of a proposed disposal and must be informed specifically of its likely consequences for them if it proceeds. Clearly, the extent to which they would cease to enjoy rights comparable to those in the Tenants' Charter under Part IV of the 1985 Act would be just such a consequence. It would therefore be a matter which the council would be required to bring to their attention. As the Secretary of State must be supplied with copies of the information the council sends to the tenants, he will be able to ensure that this is done properly.
Thus, the tenants will always be in a position to weigh for themselves the advantages and disadvantages of a proposed sale. And if the majority are unhappy with the scheme—for whatever reason—they will have the power to make their wishes absolutely crystal clear. But I would stress that as private sector tenants they will have certain rights under the Rent Acts which are at least comparable to their equivalents under Part IV of the Housing Act.
The noble Baroness challenged this in her speech. Perhaps I may run through various rights which the two sets of tenants would have. I never claimed that the two were totally parallel in every respect. Secure tenants are mostly the tenants of local authorities and other public sector landlords. Those tenants' rights include the right to buy (which we all know about); security of tenure under Part IV of the Housing Act, which includes one succession; the right to repair; the right to exchange; the right to carry out improvements and the right to take in lodgers.
The private sector tenants (that is, the regulated tenants) would come under the Rent Acts. Secure tenants, if privatised, will be in this position. Their
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rights include the right to buy (for ex-secure tenants, the preserved right to buy as defined in the Bill); the security of tenure under the Rent Act, which includes not one succession but two successions; and the right to repair. I freely admit that there is not a comparable thing in the private sector unless (and I think this is important) it is permitted by the tenancy agreement, which on several occasions does happen.
The same applies to the right to exchange. This can be permitted by the tenancy agreement. On the right to take in lodgers, again, this is not applicable under the Rent Acts unless permitted under the tenancy agreement. I must question the noble Baroness's comment that the right to carry out improvements does not apply in both cases. In fact, I am assured that it does. That can be found in Section 81 of the Housing Act 1980. The private sector tenant has one quite unique advantage; that is, that fair rents are registrable under the Rent Act. We all know what that means. This amendment would deny them rights which, albeit different, are in many respects the same and, in that one particular case, superior. Therefore, I hope that the noble Baroness will agree with me that this amendment is not desirable.
Baroness David: My Lords, I cannot say that I am altogether satisfied with the answer, though there are one or two points the Minister has made which I should like to read about and think about before deciding whether or not this is the end of this matter. For the moment I should like to reflect, and I shall withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Lord Stallard Lord Stallard moved Amendment No. 6A:
Before Clause 7, insert the following new clause:
(" .—(1) In Schedule 1 to this Act (consultation before disposal to private sector landlord), delete all after sub-paragraph one and insert—
Application for Secretary of State's consent.
2.—(1) The Secretary of State shall not entertain an application for his consent to a disposal to which this Schedule applies unless the local authority certify that the requirements of paragraph 3 as to consultation have been complied with.
(2) References in this Schedule to the Secretary of State's consent to a disposal are to the consent required by section 32 or 43 (general requirement of consent for disposal of houses or land held for housing purposes).
Requirements as to Consultation.
3.—(1) The requirements as to consultation referred to above are as follows.
(2) The authority shall not apply to the Secretary of State unless a majority of all the tenants included in the scheme have agreed in writing to the scheme, following a consultation period of not less than twelve weeks from the point at which full details of the proposed redevelopment have been made available on an individual basis to the tenants concerned.
(3) For the purposes of consultation the authority shall serve notice in writing on the tenant of each house to which the proposed scheme relates informing him of—

(a) the details of the proposal including the developer or developers involved, the extent and nature of works including any demolition or building, the proposed tenure mix, the details of those who may be displaced, the estimated timescale and the particular proposals for that tenant's dwelling-house;

(b) for each tenure category in the scheme, the likely costs of occupation following disposal, estimated rent levels and the estimated sale price of dwellings to be sold;

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(c) the details of who will be eligible to apply for occupancy of dwellings included in the scheme including the opportunities for existing tenants either to continue to rent, or purchase their own dwelling-houses, or others in the scheme, and on what terms;

(d) the details of any rented properties that are to be available within the scheme including estimated rent levels, security of tenure arrangements, opportunities for transfer and mobility and the effect on any rights the tenant currently enjoys under Part IV of the Housing Act 1985;

(e) the details of any safeguards for tenants, including rights currently enjoyed under Part IV of the Housing Act 1985, which may be incorporated in subsequent disposals;

(f) the location, size and type of any alternative accommodation to be provided by the authority for those who may be displaced by the scheme including arrangements for compensation and assistance with removal costs;

(g) the effects of paragraph 3(2) (scheme not to be submitted unless a majority of tenants agree) and paragraph 5 (consent to be withheld if the majority of tenants are opposed).

(4) The authority shall make suitable and sufficient arrangements to ensure that tenants' written agreement, non-agreement or suggested modifications to the proposals are obtained within such reasonable time period, being not less than 8 weeks, as may be specified in the notice and the consultation process shall not be valid unless a majority of those tenants included in the scheme have submitted their views in writing within the period prescribed.
(5) The authority shall consider any representations made to them within that period and shall serve a further written notice on the tenant, following the procedures set out above, informating him of any significant changes in the proposal, and informing him of the effects of paragraph 3(2) (scheme not to be submitted unless a majority of tenants agree) and paragraph 5 (consent to be withheld if the majority of tenants are opposed).
Power to require further consultation.
4. The Secretary of State may require the authority to carry out such further consultation with their tenants, and to give him such information as to the results of that consultation, as he may direct.
Consent to be withheld if majority of tenants are opposed.
5.—(1) The Secretary of State shall not give his consent where the majority of the tenants of the dwelling-houses to which the application relates do not with the disposal to proceed; but this does not affect his general discretion to refuse consent on grounds relating to whether a disposal has the support of the tenants or on any other ground.
(2) In making the decision the Secretary of State may have regard to any information available to him; and the local authority shall give him such information as to the representations made to them by tenants and others, and other relevant matters, as he may require.").
The noble Lord said: My Lords, I beg to move this amendment. I think it is in order for me to move this amendment now, though I said a few words on it during the previous debate when it was linked with another amendment. However, for that reason I will not have to detain the House for very long. I certainly do not intend to reply to the purely party points that were introduced by the noble Lords, Lord Boyd-Carpenter and Lord Broxbourne, who did not really address the detailed consultative points that I was trying to introduce in my amendment but rather set up a hare in another direction.
The point raised by the noble Lord, Lord Ross, was very relevant and it is a point that I had already made in a previous Committee session about the right of the Secretary of State to opt out. Even after all the alleged consultative processes have taken place, he can still invalidate the decision of the tenants or the people involved. But what puzzles me is that during the course of that debate and in replying to some of the remarks that I had made in a previous debate, the
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noble Lord the Minister was at pains (as he was in a previous debate) to say that tenants would not be disadvantaged when they were taken over by the private sector. Those were his words: that they would not be disadvantaged.
However, he himself has just listed some of the possible disadvantages that exist between the public sector and the private sector. There were three in the list that he gave. He tried to imply that they were not really disadvantages, though he did not go that far. Certainly, to those of us who were listening, he left it without any misunderstanding that they are disadvantages so far as concerns the public and the private sectors. I would say that the noble Lord certainly has not replied to what I thought was a very constructive criticism from this side on the lack of detailed proposals for consultation in the schedule and a lack of adequate provision for assessing the tenants' views and opinions on the proposals or other proposals that they may wish to put forward. I am dissatisfied with the noble Lord's reply so far but I am hoping that he will be able to add something even in the last few minutes of this debate.
Lord Skelmersdale: My Lords, I am grateful to the noble Lord, Lord Stallard, because he enables me to respond to a point made by his noble friend Lord Ross of Marnock some 45 minutes ago. He and his noble friend again expressed concern about paragraph 6 of the new Schedule 3A, which provides that a disposal is not invalid if a council has failed to consult its tenants properly. I repeat that there is nothing sinister or devious about these provisions.
Local authorities will be under a statutory duty to consult their tenants, and to suggest that they would wilfully ignore that duty is quite absurd. Furthermore, it ignores the role that the tenants affected and the Secretary of State will play. Both will have the means to ensure that the statutory consultation arrangements are applied. But of course mistakes can happen. It is possible, for instance, that the tenants may erroneously be allowed only 27 days instead of the statutory minimum of 28 days in which to lodge any final objection direct with the Secretary of State.
Paragraph 6 of the schedule is therefore necessary to provide reassurance for private sector purchasers of tenanted council houses that the deal cannot subsequently be declared invalid because of, for instance, some minor flaw in the way in which the consultation with tenants was carried out. But it will be open to tenants who consider they are aggrieved by any failure on the part either of the local authority or of the Secretary of State in giving his consent to apply to the court for suitable redress.
The noble Lord, Lord Stallard, questioned the advantage and disadvantage to tenants in having private sector and public sector landlords. My memory is not quite as good as it might have been had I been in this job for a few weeks longer, but I seem to remember noble Lords opposite getting terribly excited when the Government brought in the right to repair. Did we not divide on that some two or three times? Have they changed their view on this?
Lord Stallard: My Lords, the noble Lord asks me the question. I do not think we have changed our view.

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However, that is not the point. He mentioned in his previous remarks the right to take in lodgers; that is not a right in the private sector. He referred to the right to an exchange; that is not a right in the private sector. Also, the right to transfer is not a right in the private sector. He conveniently skips the disadvantages and concentrates on what he thinks might be debating points on the other issues.
No matter what he says about paragraph 6, I have to remind him that there are noble Lords and Baronesses in this Chamber, certainly on this side, who have experience of almost every form of tenancy that there is: council, private, rented, leasehold and so on. Probably there are people here who have had experience of all those and most of us have dealt with constituents who have experienced them. Maybe we have that much of an advantage in our understanding of what local authorities can do, what they actually do and what we suspect they often do or do not do in their dealings with tenants. The noble Lord ought to take that into consideration when we express our discontent at the words—the words are quite clear.
Paragraph 6 says:
"The Secretary of State's consent to a disposal is not invalidated by a failure on his part or that of the local authority to comply with the requirements of this Schedule".
That is absolutely specific: there is no dubiety about it. That means that whatever has gone on before is useless if the Secretary of State decides otherwise. Again I express my dissatisfaction with the reply of the Minister, who has made noble attempts but has not succeeded, in my view, in answering criticisms or in reaching the nub of the argument about the need for detailed consultation. Certainly I am "not-content" with the noble Lord's reply.
On Question, amendment negatived.
Baroness David Baroness David moved manuscript Amendment No. 6B:
Before Clause 7, insert the following new clause:
("Public Local Inquiry
(1) Where a local authority intends to sell, transfer, or devolve management of land held for housing purposes which is subject to an existing tenancy or tenancies, to another person or body, the Secretary of State shall cause to be held a public local inquiry where one or more tenants may object, in writing, to the proposals.
(2) subsections (2) and (3) of section 250 of the Local Government Act 1972 (giving of evidence at inquiries) shall apply to such a public local inquiry.").
The noble Baroness said: My Lords, I apologise for this being a manuscript amendment. It was taken to the Public Bill Office in time to be printed but by accident was left off the Marshalled List.
Our amendment would give tenants the right to demand a public local inquiry if their council proposed compulsorily to dispose of their homes to the private sector. Our reasons for bringing back an amendment providing for public local inquiries are two-fold. The first is that the rights of consultation set out in Clauses 6 and 10 fail to ensure that tenants will have a real say in any decision by their landlord to hand over their homes to a private sector manager or landlord.
The Government's amendments fail to provide tenants with rights of access to relevant information
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about their council's proposals. They fail to ensure that tenants have resources with which to present their case. They fail to ensure that answers will be given to any objections tenants have to their council's plans. They fail to require the council either to present to tenants alternative options for the future of their homes or to consider seriously any alternative options put forward by tenants; and they fail to provide for independent assessment of the council's proposals where a significant minority of tenants object. If a public local inquiry had to be held when any tenant objected to the council's plans, that would provide tenants with all those rights. It would provide a genuine mechanism for tenants to have a say in decisions being taken about the future of their homes which Clauses 6 and 10 do not provide.
Our second reason for bringing back an amendment providing for a public local inquiry is that Clauses 6 and 10 only provide tenants with strengthened rights of consultation in certain quite restricted circumstances. They would not apply in the most common circumstances so far where tenants' homes are being disposed of to the private sector; namely, where a property developer refurbishes under licence an estate for sale or for letting. We believe that tenants should have the right to demand a public local inquiry where it is proposed compulsorily to dispose of their homes to the private sector, just as private owners have the right to demand a public local inquiry where it is proposed compulsorily to acquire their homes into the public sector. Highways and road improvements of all sorts may be involved.
The Minister has so far failed to say why the rights of tenants and the rights of owners should differ in this way. We have taken into account of the points raised by the Minister and have revised our amendment accordingly. A public local inquiry would not have to be held in every case, but simply where one of those tenants who would be affected objected to the proposal. We also note the point raised by the Minister that it is the Secretary of State who determines what action should be taken on the recommendations of an inquiry and not the tenants affected.
One of our objections to the consultation procedure set out in Clauses 6 and 10 is, equally, that it is the Secretary of State who determines in the final instance whether a disposal or management agreement should proceed and not the tenants affected.
Our amendment would not preclude a right for tenants to ballot on the recommendations of the inquiry. Indeed, the reason we are proposing this amendment is that we would favour a right of ballot provided that tenants have full information on which to take such a vote. The Government's amendments do not provide for this. A public inquiry procedure would ensure that tenants were in possession of all the relevant details before taking such an important decision about the future of their homes. I beg to move.
6 P.m.
Lord Skelmersdale: My Lords, I think we ought to be clear what the issue is here. We are not talking about tenants losing their homes. They will continue to live in the same house, but with a different landlord.

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We are not talking about the loss of the right to buy their homes. That right is to be preserved. Nor are we talking about tenants losing their security of tenure. That also will continue.
What we are concerned with is whether the ownership or management of the tenant's home should be transferred to another body. That, of course, is an important matter about which the tenants should have a say. They may well have to assess for themselves the balance regarding the advantages—the noble Lord, Lord Stallard, insists on calling them disadvantages—of a new landlord against the loss of certain limited rights they currently enjoy as secure tenants, such as the right to sublet and take in lodgers, which we discussed just now.
That is why we have already provided in the Bill for the tenants to be consulted fully about such a proposal. Councils will be required to give tenants full details, including details of any likely consequences for the tenants. The tenants will, therefore, be in a position to form a judgment about the proposals and will be able to make their views known to the council.
If the council and third party involved fail to resolve any objections raised by the tenants, there will then be a further period of at least 28 days in which the tenants can convey their objections direct to the Secretary of State. If the majority of tenants object to the scheme, then, in the words of Schedule 1, the Secretary of State shall not give his consent to the disposal.
The amendment suggests that a public inquiry should be held, although on this occasion, and unlike previously, there must be at least one objector to the proposal; but the Bill already makes adquate provision for tenants to make their views known about a particular proposal. I simply do not accept the implication of the amendment that an inquiry is more likely to represent the true feelings of tenants on this issue than the invitation to send in written comments to the Secretary of State either singly or jointly.
It is quite unnecessary to go through the public inquiry procedure, with all the expense, delay and increased anxiety that this would cause for the tenants. I hope that the noble Baroness will not press the amendment again.
Lord Elystan-Morgan: My Lords, I very much hope that the Minister will give the matter further consideration. The amendment is put forward very much in the light of the Government's anticipated decision in relation to paragraph 6 which means that, even if the local authority has broken all the rules stipulated, it does not affect the validity of the transfer to the purchaser of that particular estate.
Speaking as a lawyer, and particularly, if I may say so, as one who was a solicitor for many years before being a barrister and who was a conveyancer, I can well understand the need to protect the purchaser for value in such a situation. Indeed, it would be a difficult circumstance for a solicitor acting for the purchaser to find himself in in advising as to whether or not the title of the purchaser was valid, because all manner of requisitions would have to be raised as to exactly the procedure adopted by the local authority in relation to these provisions.
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On the other hand, I am sure that the Minister well appreciates the motivations of those on this side of the House who consider that there are here deep fundamental principles that have to be observed. In my submission, it is not asking for a very great deal to allow for, in circumstances which possibly should be made stricter than those set out in the amendment—perhaps on the basis of requirement by a certain proportion of tenants, let us say onethird—for a public inquiry to be held. The structure of the planning Acts for decades has allowed public local inquiries to be held in relation to relatively trivial matters that affect the life of the community, some as trivial as a new access, or even perhaps putting up a hoarding or sign, or making a fairly minor alteration to one's property. Governments of both parties have come to the conclusion that these are matters that affect the property to a sufficiently high degree to allow the question to be the subject of a public local inquiry.
Where there is the transfer, as will happen in many cases, of hundreds of houses on an estate, affecting the whole of the community in itself, in my submission it is nothing more than to act in accordance with the principle, well accepted, that there should be a searching inquiry into the matter. I ask the Minister to consider, accepting for a moment that it is inevitable that there should be full protection to the purchaser as set out in paragraph 6, that the corollary to that is that there should be the willingness to hold a public inquiry.
I wish to ask the Minister one specific question. If the amendment does not succeed, does he say that there should be no discretionary power in the Minister to hold an inquiry, where appropriate, in any event?
Lord Skelmersdale: My Lords, if I may speak with the leave of the House and answer the points of the noble Lord, Lord Elystan-Morgan, my concern is that this is not a properly comparable case for the full panoply of public inquiry, and I sought to make this clear to noble Lords opposite in Committee. The amendment has been drafted, in part at least, with the comments that I made then very much in mind.
I have repeatedly said that the Secretary of State will be able to ensure that the council carries out the consultation procedures properly. If it does not, the Secretary of State will withhold his consent. I have to remind the House again that it is the local authority—which noble Lords opposite are convinced has its tenants' best interests at heart—which has to set this particular ball rolling.
The noble Lord, Lord Stallard, just now spoke about options. The local authority in the first instance has to choose which option to pursue, and decide on the basis of the one which it chooses. If the consultation procedures are not carried out properly, the Secretary of State will withhold his consent. There is no question of the consent being given when the Secretary of State is aware of any short-comings in the way the consultations were held.
I do not see this in the same light as the noble Lord did in his direct question; that is, a discretionary power of the Secretary of State. However, I am perfectly prepared to look into the whole subject again totally without commitment, because I know it is a subject on

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which noble Lords opposite have been exercising their minds.
Lord Graham of Edmonton: My Lords, I very much hope that the Minister not only will do that, but will take fully into account that there are interests other than the altruistic one of being satisfied that consultation has taken place. Let me give the Minister an illustration of an event that took place almost exactly a year ago tonight, on 23rd October, 1985. The development committee of Tower Hamlets council voted in secret to sell the Waterlow Estate, Bethnal Green, to Barratts. This was a package deal involving Barratts handing back some of the refurbished flats to the council. After that a proportion of the flats were to be redeveloped for shared ownership by a housing association, and the rest would be for sale at estimated prices of £28,000 to £39,000. It was proposed that a private company would take over the management of the whole estate.
The decision to sell to Barratts was supported by the housing management committee the following Wednesday. It was reported that the committee was impressed by the fact that the lucky tenants to be allocated the council's share of the refurbished flats had been promised a Barratts fitted kitchen, with fridge and so on, and carpeted stairwells.
Other than the hype which is contained in that description, what is the reality? The scheme involves the loss of 250 to 300 rented homes, or over three-quarters of the homes on the estate. Yet that same council, having agreed to sell three-quarters of the estate, is in desperate need of rented accommodation. There are 300 applicants joining the waiting list every month and millions of pounds have been spent by that council in the last six months in paying for bed and breakfast accommodation for homeless families.
Shorn of the verbiage that the Minister used in saying that no council would proceed in this way without consultation or without taking tenants fully into account, the reality, in the light of the housing shortage in places like Tower Hamlets, is that there will be a further break-up of estates. I am simply saying to the Minister that he should arm himself with illustrations of this kind which I believe are numerous before he looks at these matters in the abstract.
I am asking him not to trust to his belief that there are councils, whether Labour, Conservative or Alliance, which will be driven not by the force of what they consider to be their best interests but by what is very much against the interests of tenants. That is why tenants are entitled to have these matters exposed and scrutinised by the public gaze, and why they must have an opportunity to ask questions.
I believe my noble friend Lord Stallard said that not all council tenants are articulate or minded to put pen to paper; but they can go to meetings and hear cases argued. If they then feel that they have had a fair crack of the whip and if they believe that someone (and I do not mean a councillor) has stood up on their behalf, they will be better sastisfied. Public inquiries in this and other instances would be a very good thing.
Lord Davies: My Lords, this amendment revolves around the question of whether information to
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tenants will be sufficient and, tied to that, whether the tenant will be disadvantaged or advantaged by a change to the private sector. One matter which has not been raised is the fact that in the private sector landlords may go bust and this may be brought on by the properties in question being in a worse condition than anticipated at the time of sale. Could the Minister advise what would happen in that circumstance? This amendment would allow such matters to be brought forward and properly explored.
Lord Skelmersdale: My Lords, with the leave of the House, those were a couple of quick, sharp exchanges which I was not expecting—especially the one from the noble Lord, Lord Davies. However, I shall respond to him in public on this point as I have already responded to him in private. I hate to drive a wedge between the noble Lord, Lord Stallard, and the noble Lord, Lord Graham——
Lord Graham of Edmonton: You never will!
Lord Skelmersdale: No, my Lords, I am sure I never will; but I should point out to both noble Lords that the noble Lord, Lord Graham, at the end of his remarks produced a very good reason for not accepting the amendment which the noble Lord, Lord Stallard, proposed earlier on postal ballots. Be that as it may, I can assure the noble Lord, Lord Graham, that when he referred to the case in Bethnal Green he gave me the impression, as I am sure he intended to, that it was done without proper consultation and that the tenants in that respect were bounced. Do I have the right end of the stick?
Lord Graham of Edmonton: My Lords, what I was saying was that by glibly accepting the word "consultation" we should not ignore the reality beneath. It can, in fact, result in the sort of conditions I pointed out in regard to that case. It resulted in three-quarters of an estate being sold over the heads of the tenants.
Lord Skelmersdale: My Lords, I am grateful to the noble Lord for that extra explanation. The whole point of what I have been saying today and in Committee is that the Bill says firmly that the Secretary of State must not only know of the consultation process but must understand how it is being used, how it is carried out, what information has been given to the tenants, and so on. The Secretary of State, if he is not satisfied, can direct the council to do it over again. He has the ultimate power and he is the ultimate conscience of the consultation process. I do not think that this is wrong.
The noble Lord, Lord Graham, talks about the Bethnal Green case. Obviously in his view, and I think also in mine, proper consultation did not take place there. However, that could not have happened if this Bill had been on the statute book; I am firmly convinced of that.
My answer to the noble Lord, Lord Davies, is that if a private sector landlord goes into liquidation or bankruptcy, this does not affect the right of the tenants. The receiver or liquidator would normally take over the landlord's interests, but that would make no difference to the tenants' rights. In other words,

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tenants' rights in all cases would be preserved, albeit under a new and different landlord.
Lord Davies: My Lords, perhaps I may ask for clarification on one point. Rights may be preserved, but if a building is falling down around someone's ears, who is going to mend it?
Lord Skelmersdale: My Lords, the tenancy agreement would be exactly the same whether the landlord went bankrupt or not.
6.15 p.m.
Baroness David: My Lords, that is a curious answer. I think the anxieties which have been expressed on all these amendments which we have considered recently show that we are still not happy about the arrangements proposed and we are worried about the rights of the minority. That is where a public inquiry would satisfy everyone. However, the Minister did, I understand, give some sort of undertaking to my noble friend Lord Elystan-Morgan, and since he has given some undertaking I think it would be only right to withdraw this amendment and examine what has been said in order that we may come back on Third Reading. We are still not happy about this situation. I should like to add one point. The Minister said that tenants would not lose their homes as a result of a disposal to a private landlord. This can happen, and has in fact happened. I think he was wrong about that. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Preservation of right to buy on disposal to private landlord]:
Baroness David Baroness David moved manuscript Amendment No. 6C:
Page 20, line 42, leave out ("disponor") and insert ("disponer").
The noble Baroness said: My Lords, this is a bit of light relief. This amendment would require in Clause 8 on page 20, line 42, to leave out "disponor" and insert "disponer". Your Lordships may remember that I raised the question at Committee stage, when we were discussing the amendment which contained this word, and asked whether disponer and disponor were words generally used in Acts of Parliament. I was told they were legally used. However, having examined the Oxford English Dictionary, I discovered that "disponor" should be spelled "disponer". I thought it was right that the spelling should be correct in this Bill. I hope that this is an amendment which will be accepted and I beg to move.
Lord Skelmersdale: My Lords, I am very glad the noble Baroness finds this amendment light relief. I, too, was somewhat relieved to be able to delve into a dictionary rather than into endless, dry and dusty lawbooks which, during the course of my researches on this Bill, have not been allowed to gather any dust, principally due to the noble Baroness's and her noble friends' castigations—or perhaps exposure of my knowledge. Perhaps there is a simpler way of putting that, but I am not with it at the moment. However, I
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am with what "disponer" and "disponor" mean and are all about. I readily accept that the Oxford English Dictionary refers to "disponer" and that the word in the present legislation is spelt "disponor".
The noble Baroness, as regularly happens both to her and to me, is half right. She is right so far as the dictionary is concerned, but she is not right so far as legislation is concerned, which I shall go on to explain. Reference was made to "disponor" in the Income and Corporation Taxes Act 1970. It has also been spelt in that way in numerous judgments in the courts, including a case heard in 1979 by noble and learned Lords in this House acting in their judicial capacity. If the noble Baroness wants to look this up, it is the case of Inland Revenue Commissioners v. Plummer. I hope that that satisfies her.
Baroness David: My Lords, I am not altogether satisfied, but I am interested. The next thing I shall have to do is write to the editors of the big Oxford English Dictionary and tell them that they had better add something to their present information. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Redevelopment of dwelling-house subject to secure tenancy]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 7:
Page 22, line 14, leave out ("or variation of a scheme") and insert ("of a scheme or variation").
The noble Lord said: My Lords, this is a drafting amendment to ensure that there is no ambiguity over the meaning of subsection (2). I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 8 to 10 not moved.]
Clause 10 [Management agreements]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendments Nos. 10A and 10B:
Page 25, line 42, leave out from beginning to end of line 22 on page 26 and insert—
("(a) the details of the proposal including the number and address of the dwellings to be included in the agreement, the identity of the person who is to be the manager under the agreement, the arrangements with respect to the future management and maintenance of the dwellings to be included in the agreement, the period of time over which the agreement will be in force and such other terms and conditions of the agreement as may be available,
(b) the details of rent fixing arrangements and the likely effect of these with respect to future rent levels, arrangements for the carrying out of the authority's repairing obligations including tenant improvements, arrangements for transfer and mobility and any arrangements with respect to local policies and practices of the authority on housing management matters which are, or could have been of benefit to the tenant, and
(c) the effect of the provisions of this section and that notice shall make suitable and sufficient arrangements to ensure that the tenants written agreement, non-agreement or suggested modification to the proposals are obtained within such reasonable time period, being not less than 8 weeks, as may be specified in the notice.
(2) The authority shall consider any representations made to them within that period and shall serve a further written notice on the tenant informing him—

(a) of any significant changes in their proposal, and

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(b) that he may within such period as may be specified (which must be at least 28 days after the service of the notice) communicate his agreement, non-agreement or further suggested modifications to the proposal and informing him of the effect of subsection (5) (approval to be withheld if majority of tenants are opposed).").

Page 26, line 35, leave out from ("approval") to ("wish") in line 38 and insert ("unless a majority of the tenants of the houses to which the agreement relates").
The noble Lord said: My Lords, with these amendments I shall also speak to Amendment No. 10C as they are generally interlinked. These amendments are supported by the Association of Municipal Authorities, the Institute of Housing and also, in principle, by the organisation Shelter. We believe that the consultation arrangements set out in Clause 10 are insufficient for the following reasons.
First, there is insufficient detail made available to tenants on important matters such as rent levels, repairs, local management and the nature and extent of a scheme. Secondly, the arrangements are passive and there is no process to ensure a good response from tenants or that they can have a direct vote on the proposals, supporting or rejecting them. Tenants may make representations to the local authority. Thirdly, a scheme will go ahead unless a majority of tenants are, in the view of the Secretary of State, opposed (subsection (5), page 26). As there is no process to obtain views on a consistent basis, it is highly unlikely that 50 per cent. of tenants will vote to reject a scheme. It is not proper or effective consultation. Objections may be sent individually to the Secretary of State (subsection (2)(b), page 26). This places further difficulties in the way of tenants. Overall the present framework is wholly insufficient for proper consultation to take place.
We believe that the amendments proposed would have the following effect. First, much fuller details would be available to tenants under the proposals set out in the first three paragraphs of Amendment No. 10A; that is, rent arrangements, repairs, terms and conditions, transfer and mobility. Secondly, the consultation letter would give tenants an opportunity to agree, disagree or suggest modifications to the proposals, with a duty placed upon an authority to make proper arrangements to obtain those views. Thirdly, the scheme would proceed only if a majority of tenants were, through the consultation procedure, in favour of it, as opposed to the current arrangements where a majority have to be opposed to prevent it proceeding.
Those are the reasons why I move these amendments and I should like to hear the Minister's response. I beg to move.
Lord Skelmersdale: My Lords, I always respond to the noble Lord's amendments. He does not always like the response, but nonetheless I propose to do so again. There are three points here: the attempt to list information that must be given to a tenant about a proposal to delegate management; the proposed requirement that a majority of tenants positively endorse the proposal; and the deletion of the provision about technical invalidity.
On the question of tenant's positive agreement, I am afraid that I must tell the noble Lord that this just is not practical and would effectively bring a halt to the
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setting up of tenant-management co-operatives and other forms of delegated management. It is very difficult, as noble Lords opposite well know, to get people to register their opinions unless they feel strongly. But why on earth should the Secretary of State not approve a proposal that is enthusiastically supported by a large minority of the tenants, that is not actively opposed by a single tenant and that has the silent acquiescence of the remainder? Yet that would not be possible under the proposed amendment.
We have discussed the validity of agreements in the context of Clause 6. The sole purpose of new Section 27A(7) in Clause 10 is to prevent contracts—for example, for repairs or employment—being invalidated because of a technical flaw in the proceedings leading to agreement. Management agreements can in practice be terminated quickly and the local authority remains throughout responsible for the actions of its agent. The local authority remains the owner.
On the other limb of the amendments, I share the general wish to ensure that tenants are properly informed, but we have approached the problem rather differently. Section 27A(1)(b) provides that the landlord informs the tenant of the likely consequences of the agreement for the tenant, which already encompasses all the items listed in the noble Lord's amendment. Section 27A(4) enables the Secretary of State to call for such further consultation as he considers necessary. We shall be issuing guidance to local authorities on what the Secretary of State will expect to see covered in consultation and in agreements. I think that our approach both gives flexibility and provides adequate safeguards. I hope the noble Lord, Lord Dean, will agree with me that there is no indication of need for the proposal in the amendments and I urge him to withdraw them.
Lord Dean of Beswick: My Lords, if the Minister dealt with financial matters in the way that he calculated his percentages in that answer he would be a financial wizard. He has just made 100 per cent. of the minority on a council estate. What he said was that if only a minority on a council estate—which could be as low as 10 per cent. or 25 per cent.—bother to reply, it will be taken that the silent 75 per cent. or so are deemed to be in favour. I do not believe it works like that. That is why a short time ago my noble friend Lord Stallard and I were asking for a specific form of approach by letter from the local authority when the final decision was to be taken. I still do not believe that you will ever get a true picture of what the majority of tenants want by the procedures that the Minister is explaining, hard though he is trying. But having said that, I beg leave to withdraw the amendments.
Amendments, by leave, withdrawn.
[Amendment No. 10C not moved.]
Clause 12 [Extension of assured tenancies scheme to cases where works have been carried out]:
6.30 p.m.
Baroness David Baroness David moved Amendment No. 10D:
Page 29, line 17, leave out ("is (or was) fit for human habitation"). and insert—
("has (or had) a certificate of good repair").

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The noble Baroness said: My Lords, in moving Amendment No. 10D I shall also speak to Amendments Nos. 11A and 11B. We come now to assured tenancies. The condition of unrehabilitated property will vary considerably. Accordingly, the amount which will have to be spent on it to bring it up to an acceptable standard will vary a great deal.
There are two requirements in relation to the rehabilitation of acommodation. The first and most important, the very one which the Government have almost completely ignored in their proposals, is the quality of the accommodation after works have been carried out. The second is how much money it will cost to bring the accommodation up to an acceptable standard. On this issue the Government are guilty of penny-pinching. The net result of this mixture of unconcern and underestimation of cost is likely to be poor quality accommodation subject to almost no checks by any responsible body. This is not an acceptable basis for policy.
Our amendments seek to impose an acceptable standard of accommodation. The Government's proposal—based on the basic fitness standard, a relic from an earlier age—is unacceptable. Our proposal, for a certificate of good repair, is firmly based on the "full standard" set out in Section 234 of the Housing Act 1985 which is the standard applied to improvement notices under Section 209 of that Act. How can the Minister say that this standard is not acceptable—is too high—for assured tenure? It merely encompasses a building to be provided with all the standard amenities, for the exclusive use of its occupants; to be in reasonable repair (disregarding internal decorative repair) having regard to age, character and locality; to conform with the Secretary of State's requirements for thermal insulation; to be in all other respects fit for human habitation; and to be likely to be available for use as a dwelling for a period of 15 years. On this last point we have moved from our previous position. In Committee we proposed a life of 30 years. We replaced that with a term of years matching that relating to the "full standard".
We also seek through amendment to ensure that before a property can be let under the expanded assured tenure scheme it is properly certificated. We cannot accept the position whereby it is left up to the approved body to decide whether or not to apply to a local authority for a certificate that the property has reached the required standard. This scheme is supposed to break new ground, to involve high standards. It is sound common sense that such claims should be tested by mandatory certification—or how else, looking at it from the Government's position, will it be possible to judge the success of the scheme in terms of quality of the accomodation? We contend that this scheme, without considerable strengthening, could result in cheap, corner-cutting works, and a poor quality product—all unchecked by any responsible body, while approved body status continues to apply to the perpetrators. In return the landlords will have the benefit of an inferior form of security of tenure and market rents. It simply is not good enough.
There is a further issue. The Government rely on their minimum expenditure proposals. On present evidence these are pitifully inadequate, and the way in
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which this matter has been delayed during the passage of the Bill leaves much to be desired. We are now told that public consultation (which we welcome) will not be completed until the Bill has received Royal Assent. The sums decided upon will then be introduced by way of an order, subject to the negative procedure. This is not a satisfactory approach to the issue. The debate should have been held, and decisions made, before Royal Assent, not after. There has been plenty of time for a consultation exercise during the passage of the Bill. We are in effect being asked to give carte blanche to the Government in the absence of adequate information.
Since the time we came into this Chamber to start discussions on the Report stage there has arrived on my desk a letter from the Minister which I have not had time to study properly. But I see that the sums being proposed, which we had thought were £6,000 in London and less elsewhere, are to be £5,000 in Greater London and £4,000 in the rest of England. Those sums appear to be inadequate.
The 1981 House Condition Survey indicated that 340,000 dwellings rented from private landlords were classified as needing repairs costing £7,000 or more—and that was at 1981 prices. There were in total 1 million dwellings needing that level of expenditure and 1.1 million unfit dwellings. In addition, 196,000 vacant dwellings were classified as unfit. It is clear that many properties will require much more spent on them than the minimum set down by the coming order. This may well result in shoddy works—and it is no use the Minister telling us that if found out, and a building is classed as unfit, they would be left with a Rent Act tenancy, as he did at col. 411 of the Official Report for 9th October. Is the Minister claiming that it is acceptable for a Rent Act tenancy to occur in an unfit property? If an approved body let unfit property would it be removed from the list of approved bodies? Will his department give a pledge that it will in future monitor the quality of housing let? We need answers to these questions, for the Government are being far too complacent about the standards of accommodation required under the scheme.
The Government have so far refused to give any indication of how they arrived at the figure. We now know it is £5,000 and it may be that the document which arrived on my desk in the middle of the afternoon gives some information on this, but I am afraid that I have not been able to assimilate it yet.
The Minister said in Committee in another place on 25th March 1986:
"The weighted average of estimated expenditure on grant-aided repairs and improvements in England in 1984–85 was £6,000. As that is the weighted average, the prescribed amount might be set slightly below that figure at £5,000, for example, with a higher figure in greater London".
He then said that the Government would "think again" on these amounts because,
"honourable Members do not consider that level to be high enough".
That was a quotation from the Minister in another place.
It is worth noting that the grant-aided works average covers a lot of different types of work, of varying degree of expenditure. Many of these grants will be for the provision of basic amenities—often a single basic

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amenity—and the expenditure involved will be well below £1,000. This can only have the effect of distorting the average and making it almost meaningless when used for the present purposes. The Government, when setting grant-aid for the purposes of mini-HAG (housing association grant) via the Housing Corporation have set only a slightly lower figure of around £3,000 for very basic works indeed, where the property, after works, is expected to have a useful life of only five years.
The essential point is this. What do the Government intend—long-life high quality homes, or short-life low quality homes? We need an answer. The standard of the accommodation produced is of the first importance—the amount to be spent should follow, not lead, the process—and in many cases the works required to achieve acceptable standards will cost two or three times the amount of expenditure the Government seem prepared to consider. They have the issue the wrong way round, and have severely underestimated the levels of expenditure required. The problems that this approach will store up for the future will be exacerbated by the Government's failure to insist that no letting is possible unless and until a certificate of repair has been obtained. It is a certificate of good repair we want. I beg to move.
Lord Dean of Beswick: My Lords, the noble Lord the Minister will recall that I dealt with this part of the Bill in Committee. I am firmly of the opinion that when he answered the Minister gave the impression to the Committee, either intentionally or unintentionally, that the figure of £6,000 was being reconsidered. Most noble Lords who were present took that to mean that it was being reconsidered in order to be moved upwards, as the point had been raised in another place. The figure of £6,000 was the one bandied about in another place. The Minister for Housing in another place indicated that he would look into the point being raised by the Opposition that probably twice that amount would be required—£12.000 for London and a scaled down figure for other areas in the country. Can the Minister say why there has been a change of heart; or did we misunderstand him at the Committee stage?
Lord Skelmersdale: My Lords, I enjoy watching the noble Baroness moving, however little motion she makes! What the amendments entail is certification by local authorities in every single case where an improved property is to be let on an assured tenancy, the formulation of an entirely new property standard just for the purposes of the assured tenancy scheme, and a duty on the landlord to maintain the property to that standard throughout the period of the assured tenancy letting.
This really is a case of taking a sledgehammer to crack a nut. I know that the Opposition's intention is to see that the extended assured tenancy scheme operates under adequate safeguards; but the safeguards are effectively already there. An assured tenancy can only be let by an approved body—by definition a landlord body which has shown itself both to the Secretary of State and to Parliament to be reputable, trustworthy and reliable. Landlords apply for approval under the assured tenancy scheme
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because they are prepared to commit new investment to privately rented property. Indeed, under the proposals in Clause 12 they will be required to spend a substantial amount on a property before it can be let on an assured tenancy. Is it really likely therefore that they will be putting substandard property on the market?
Although the Government's proposals set a minimum standard—the fitness standard—this is only a safety net to catch the occasional extreme case. In reality, property let by approved landlords will be well above the fitness standard; and compulsory certification is not the answer to catch the rare property which may fall below that standard. Any landlord who is considering letting a property on the borderline of the fitness standard runs the risk that he may in fact be creating a regulated tenancy, subject to a fair rent. There is therefore a very real discipline within the system for the landlord either to improve the property so that the question or fitness is put beyond doubt or to apply to the local authority for a certificate of fitness.
As the Bill now stands, the fitness standard is a once and for all test which the property must satisfy before it can be let on an assured tenancy. It has no relevance to the condition of the property after it has been let. In other words, it is a glasshouse situation—it is for one moment and one moment only. Again, we have to remember that assured tenancies are lettings by reputable approved bodies who will have committed substantial investment in their properties. I cannot see why they would be prepared to see their investment suffer by allowing the property to fall into disrepair.
The Opposition's belt and braces approach, under which the landlord would be under an obligation to maintain the property to the prescribed standard throughout the life of the assured tenancy, is therefore unjustified, and could conflict with Section 11 of the Landlord and Tenant Act 1985 which lays down statutory repairing obligations for short leases. In the case of an assured tenancy let on a long lease, the landlord's position would be vulnerable, under what the amendment proposes.
We have to be honest and admit that so far the assured tenancy scheme has made very disappointing progress. After six years in operation, there are only some 600 assured tenancy lettings. The provisions of this Bill are intended to give the scheme a much-needed fillip. The Opposition parties in another place appeared to share our view that that is what it needed. The fact remains, however, that landlords are not exactly falling over themselves to let on assured tenancies. If we extend the scheme, and yet at the same time tie it down with further unnecessary and highly bureaucratic controls, I fear we may be losing a very real opportunity for reputable landlords to provide the country with much-needed rented accommodation.
Under Section 57 of the Housing Act 1980—and this answers the question asked by the noble Lord, Lord Dean—if a landlord has his approved body status withdrawn (and that can and would happen) he is prevented from creating any further assured tenancies but he is not penalised in respect of any existing assured tenancy lettings. He is allowed to continue those lettings but on assured tenancy terms.

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I hope that those comments show that I have endeavoured to understand the concern of the noble Baroness, but I do not think that this is the right amendment to satisfy that concern.
Lord Dean of Beswick: My Lords, before the noble Lord sits down, can he deal with the point I made as to why it is now £5,000 and £4,000? I am sure that your Lordships' House understood that the figure of £6,000, which was being tentatively used in another place, was to be reviewed to take into account the overtures made by the Opposition in another place that the £6,000 would be inadequate.
Lord Skelmersdale: My Lords, I shall have to speak entirely from memory, which is why I did not respond to the point made by the noble Lord. In particular, I do not have a copy of the relevant column of Hansard in front of me. I know that the housing Acts state somewhere that this is done by order. Consultation is therefore still going on and in due course we shall be laying an order before (I think I am right in saying this) both Houses, so there will be an opportunity to discuss this matter if we get it wrong.
Baroness David: My Lords, I fail to see why, if these houses are going to be of a decent standard, as the Minister says, he cannot accept our amendment that they should have a certificate of good repair. That seems very strange. However, I shall read the Minister's reassurances and, again, if necessary I shall come back on Third Reading. However, for the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Baroness David Baroness David moved Amendment No. 11:
Page 30, line 6, at end insert—
("( ) Section 38(4) of the Landlord and Tenant Act 1954 shall not apply in the case of assured tenure.").
The noble Baroness said: My Lords, I think that I am perhaps going to hear some good news on this amendment, so I shall not waste much time in moving it. The amendment will prevent an approved body contracting out of tenancy safeguards. During the Committee stage on 7th October, the Minister gave an undertaking, reported at col. 416 in Hansard, to look at this matter and consider whether the Government could come back with an amendment of their own at a later stage. There has been no such amendment, so we have tabled this amendment again. However, I await what the Minister has to say. In the meantime, I beg to move.
Lord Skelmersdale: My Lords, this is one of the few times that I am delighted the noble Baroness continues to bully me. When we debated this subject in Committee I said that the Government were sympathetic to what the "amendment was seeking to achieve. I undertook to look into the point to see whether we could come back with an amendment of our own at a later stage.
I can now tell the House that the Government accept that contracting out ought to be prevented
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under the assured tenancy scheme and that we are preparing a government amendment to that effect. I am only sorry that it was not possible to have our amendment ready for debate today. However, I promise that we shall table it for Third Reading.
Baroness David: My Lords, I am grateful to the Minister for that assurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 11A and 11B not moved.]
Baroness David Baroness David moved Amendment No. 12:
After clause 12, insert the following new clause:
("Removal of Landlord from list of approved bodies due to unacceptability.
. (1) In Section 57(1) of the Housing Act 1980, after "Section 56(4) of the Act, then" insert "subject to subsection (2) below."
(2) In Section 57(2) of the Housing Act 1980, at the end insert—
"(b) the landlord has been removed from the list of approved bodies because it is no longer considered acceptable as an approved body.").
The noble Baroness said: My Lords, this amendment aims to remove a landlord from the list of approved bodies because of unacceptability. It aims to protect tenants where the landlord has lost approved body status due to unacceptable practice. At the moment, the Bill allows such a body, in effect, to retain its approved body status for any existing lettings. The Minister has just mentioned this. We find that to be unacceptable.
I hope that we are talking about rare occurrences and serious offences against rules of conduct set by the Government for approved bodies. In such circumstances, it cannot be unreasonable to expect the tenants to receive rent Acts protection; for how can a body which is no longer considered worthy to let under the assured tenancy scheme for future tenancies be deemed adequate as a landlord for assured tenancies? I beg to move.
Lord Skelmersdale: My Lords, I am genuinely sorry that the noble Baroness has chosen to pursue this amendment, which, as I endeavoured to explain in committee, is damaging to the interests both of approved landlords and, perhaps more importantly, of their tenants. Under existing law, if a landlord loses his approved body status he is prevented from granting any further assured tenancies—as I said just now to the noble Lord, Lord Dean—but any tenancies granted up to the point where approval is withdrawn remain as assured tenancies.
The noble Baroness is trying to alter the situation by converting existing assured tenancies into Rent Act tenancies in those circumstances. From the landlord's position he needs reasonable certainty that having once created an assured tenancy he will be permitted to continue letting it on those terms. If approved bodies do not have that certainty and instead face the prospect that their assured tenancies may be converted into tenancies to which the Rent Act applies, they will be discouraged from investing in assured tenancies. I thought that it was the policy of the Opposition to support and encourage investment in assured tenancies.

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From the tenant's position the amendment looks just as bad. He may well have taken an assured tenancy on the basis that his lease was freely assignable. If he then finds that his tenancy has become a regulated tenancy he will lose any right he may have to assign it at a premium. If the tenant himself has already paid a premium for the lease he will therefore suffer a financial loss. I can only repeat my plea to the noble Baroness that she withdraws this amendment in the best interests of all concerned.
Baroness David: My Lords, before he sits down may I just ask the Minister this question? If a landlord, because of unacceptable practice, has ceased to be an approved body surely he is not then a fit person to be the landlord of an assured tenancy property, is he?
Lord Skelmersdale: My Lords, that is not quite what I said. I said that if a landlord loses his approved body status he is prevented from granting any further assured tenancies. It would be the most tremendous penalty if we prevented him from letting at all, and I am sure that this is not what the noble Baroness wants.
Baroness David: Well, my Lords, I shall have another think about it. In the meantime, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 13:
Before Clause 14, insert the following new clause:
("Grounds for possession: Racial Harassment.
.—In Schedule 2 to the Housing Act 1985 (grounds for possession of dwelling houses let under secure tenancies), in Part I (grounds on which court may order possession if it considers it reasonable), at the end of ground 2 (nuisance or annoyance to neighbours) add—
"or has committed direct acts against a person or persons of a different racial or ethnic origin residing within the local authority area within which the dwelling house is located, and those acts have interfered with that person's enjoyment of their dwelling house or have been calculated to deter the person from occupying a particular dwelling house.").
The noble Lord said: My Lords, I think that the Minister and those members of your Lordships' House who were present during the Committee stage of this Bill will recall that the amendment dealing with this facet of housing was reached rather late on Thursday evening. The Minister gave us some hope when he said:
"My department is involved in the Local Authorities' Joint Working Party on Housing and Racial Equality which has been looking at the issue in relation to local authority housing as has the Commission for Racial Equality. The results of both bodies' investigations should be available soon".—[Official Report, 9/10/86; col. 454.]
I have to tell the Minister that I think "urgently" should be substituted for the word "soon". In view of what is happening in the country I do not think we can wait much longer to deal with the problem.
The amendment that I have down on the Marshalled List is supported by the Association of Municipal Authorities, the Institute of Housing, Shelter, the Federation of Black Housing Organisations and in principle by the Association of District Councils. During the Committee stage the Minister raised a number of points of concern on the more detailed amendment that was put down at that
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time. They are set out in the proceedings for 9th October, Vol. 480, No. 147, cols. 449 to 455. He spoke about the general problems of getting witnesses to appear in court for cases of possession which involve disputes between neighbours or harassment.
Also, it was thought that the amendment did not go far enough, in particular in dealing with the use of the term "neighbours", which was considered to be too restrictive to deal with separate blocks or adjoining estates (cols. 454 and 455); and that current grounds may be sufficient to deal with the matter (col. 455). However, the Minister gave a generally positive response, stating that he would examine the current grounds to see whether changes were necessary. The current amendment attempts to take some of these points into consideration and it extends Ground 2, as suggested by the Government, rather than forming a new ground. It removes the word "neighbour" and substitutes "person". This may be considered too wide but it answers the Government's point about the word "neighbours" being too restrictive. The amendment is much simplified compared with the list and schedule that I moved at the Committee stage.
Turning to the Government's point about the difficulty of witnesses appearing in court, this is a general problem with possession cases but it is not an argument for not extending Ground 2 to include racial harassment. We agree that the operation of the grounds for possession as a whole is in need of review. Ground 2 deals with nuisance or annoyance to neighbours. Neighbours' disputes are not racial harassment, which involves specific acts against people of a different racial or ethnic origin. Harassment by such acts as racist graffiti, hostile reception committees, racially motivated assaults, verbal racial abuse, etc., is a very different matter from the problem of noise and normal differences between neighbours. Therefore, to answer the Minister's point (col. 455), an extension of Ground 2 is required. Racial harassment is a serious matter which needs urgent action. One small contribution to dealing with the situation is to modify the grounds for possession of public sector landlords as set out in the amendment.
We ask the Government whether they are prepared to look seriously at this amendment with a view to accepting it or possibly whether we are near to the point where discussions between various Ministers and bodies dealing with racial harassment will produce some recommendations. Perhaps the Minister can tell us, because, as I said, the situation is reaching a critical point in some parts of the country. During the debate on the Public Order Bill yesterday I was on the Front Bench and heard the discussion between some distinguished and learned Members of your Lordships' House on the subject of graffiti. I was sorry that the amendment on that point was lost. It was only a simple amendment which would have made the local authority mandatorily responsible for removing graffiti, offensive or otherwise.
One hears now all too frequently an increasing use of the phrase "race relations in reverse". I think we have to be careful that our slowness in moving in this matter does not engender such activities, because, as I understand it, in certain parts of London and elsewhere in the country racial abuse has become so regular and so much the order of the day that ethnic

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minorities are starting to think that people do not particularly care. I am not for one moment criticising the police. It is not a criticism, but I have to say that because they are so busy when such things are reported to them unfortunately they must come at the bottom of the queue. There is not a great police response. I do not make this comment as a criticism of the police because they are doing all that they can. However, I believe that nuisance caused to neighbours because of their ethnic origin—which makes their life a total misery—can be dealt with on an increasing scale by housing authorities if they are given the power to act more quickly on the basis of racial harassment. I beg to move.
Lord Skelmersdale: My Lords, I hope that by the time we go to bed tonight I shall have proved to the House that I am no sluggard in considering race relations issues. I recognise that this amendment is a valiant effort to meet the points that I made in Committee. I regret to say, though, that the amendment illustrates just the problem I referred to then; namely, the difficulty in amending the present ground in a way that remedies the shortcomings while not making local authority tenants subject to their landlord's authority more than is necessary to enable their landlords to carry out their functions properly. In my view this is too complicated and sensitive an area of law to amend overnight without proper consultation of all the interested bodies.
The amendment would enable a local housing authority to seek to evict a tenant for "direct acts"—and those words present difficulties of interpretation—against anyone else in the same borough that interfered with that person's enjoyment of his home or prevented him from occupying a particular house. The victim need not live on the same estate and need not even be a fellow local authority tenant. Such a provision goes way beyond what could be justified in terms of the local housing authority's landlord interest in ensuring that tenants can live peacefully together in a block or on an estate.
Another thought occurs to me. The amendment would not help deter reception committees in cases where the prospective tenant is not resident in the borough. That could well be the case if the prospective tenant were in temporary accommodation or being nominated under a mobility scheme.
Discussions are proceeding. The Government are expecting a report shortly on this whole matter from the Commission for Racial Equality and the local authority working party on housing and racial equality. The noble Lord, Lord Dean, mentioned the Association of District Councils. I know that there is an agreement in principle on this matter, but it is not the principle that is the problem; it is how on earth we draft the legislation so as to achieve what we want. When we have decided how to do that, I have absolutely no doubt that I or one of my noble friends will bring the matter before the House.
I am convinced that we risk doing more harm than good by rushing into legislation on this issue, tempting though it is to do something to show our total abhorrence of these appalling acts. However, the
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House must not misunderstand me. Where it is possible and practical to do something about race relations matters we have done so and we are doing so. I refer to government Amendment No. 85, which covers similar issues in planning legislation. In view of what I have said, I ask the noble Lord to withdraw the amendment.
7 p.m.
Lord Elystan-Morgan: My Lords, I am sure that we on this side of the House appreciate totally the Minister's obvious sincerity with regard to this matter. We also accept that there may well be difficulties with the form of words set out in the amendment. Before the House agrees completely with what the Minister says, it is right that the House should remind itself of the words which exist in ground 2 of Schedule 2 to the Housing Act 1985. As the House will remember, that is the schedule which sets out the eight deadly sins which a tenant can commit and thus make himself liable to lose his secure tenancy. Ground 2 reads as follows:
"The tenant or a person residing in the dwelling-house has been guilty of conduct which is a nuisance or an annoyance to neighbours, or has been convicted of using the dwelling-house or allowing it to be used for immoral or illegal purposes".
The second part is a simple issue of fact as to whether there has been a conviction for those offences. The first part has all the problems inherent in it which the Minister claims in relation to the amendment. It refers to "neighbours". The lawyer in the parable of the Good Samaritan asked the question "Who is my neighbour"? Lord Atkin, one of the greatest jurists of this century, in perhaps the best known case in civil law, Donoghue v. Stephens in this House in 1925, asked the same question. He did not come to the same answer as the lawyer in the New Testament, never the less it was an answer which was all embracing in relation to the problems of modern life. Is that to be the situation here? Who is a neighbour? What is an act of nuisance? That may be defined by resort to the narrow definition in the law of tort. What is an annoyance?
The amendment has been carefully drafted. It has its difficulties, but there will always be difficulties. There will never be a perfect form of drafting. I venture to suggest to the Minister, much as I respect his total sincerity and his commitment to this matter, that the amendment could stand side by side with ground 2, which at present is incorporated in the schedule.
Lord Skelmersdale: My Lords, with the leave of the House, I do not have ground 2 in front of me, although the noble Lord, Lord Elystan-Morgan, obviously has. The amendment deals with the opposite of what ground 2 seeks to do. I was not trying to pull the wool over anyone's eyes or anything like that. I was making a genuine attempt to show willing.
I should ask the noble Lord, Lord Elystan-Morgan, or the noble Lord, Lord Dean, whether they have discussed this amendment with those people who are important in this case—namely, the Commission for Racial Equality—and whether they have had any comments from any of the local authority associations which would have to operate it?
Lord Elystan-Morgan: My Lords, with the leave of the House may I deal with one point, which is whether the amendment is contrary in any way to what is contained in ground 2? I am sure that my noble friends can deal with the wider question of whether there has been consultation with the bodies involved.
Ground 2 deals with the person—I am dealing only with the first part and not with the conviction—who has been guilty of conduct (which presumably does not mean a conviction) which is a nuisance or an annoyance to neighbours. The amendment deals with a person who has committed direct acts against a person or persons of a different racial or ethnic origin residing within the local authority area within which the dwelling-house is located.
Lord Skelmersdale: My Lords, I wonder whether I may be allowed to interrupt the noble Lord. I think that we are about to start talking at cross purposes at great length. The point that I was making is that the subject of ground 2 is the tenant whereas the subject of the new ground proposed under the amendment is anyone but the tenant. I hope that I have now explained the matter correctly and that the noble Lord will take the point on board.
Lord Elystan-Morgan: My Lords, I do not think that is so. The person who stands to lose his tenancy under Schedule 2 must of course be the secure tenant. As I understand it, that is the position under the amendment; in other words, the only person who may transgress both under the amendment and under ground 2 is the tenant.
The short point that I wish to make, and I am grateful to the Minister for allowing me to make it, is that under the amendment one is dealing only with the species of nuisance or annoyance that is referred to in ground 2; in other words, one is not breaking new ground but only extending the ground which is incorporated in the schedule.
Lord Dean of Beswick: My Lords, I am grateful for the assistance of my colleague on the Front Bench for pulling that part of the matter together. I was sorry to hear the Minister in his opening remarks say that he was not a sluggard in his dealings with race relations. I hope that I did not convey the impression that I thought that he was.
The point I was making was that the longer we take to deal with this matter the more the people who are at the receiving end of the legislation and who we hope will benefit from it will despair. They do not think that enough is being done at present.
With regard to the Minister's question as to whether the views of the Commission for Racial Equality and the appropriate bodies have been sought, my present information is that that they support the amendment and what it hopes to achieve. I can say no more about that at the moment.
I accept the Minister's good intentions when he said "soon" but I do not think that "soon" will be enough. If we are talking about bringing in legislation to deal with the matter, we are talking about the next Session of Parliament. I do not think that is soon enough. To show that your Lordships are deeply concerned about
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this facet of what is happening and want to do something about it, I am sorry, but on this occasion I cannot comply with the Minister's request and withdraw the amendment. I beg leave to test your Lordships' views.
7.9 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided; Contents, 46; Not-Contents, 73.

DIVISION NO.3

CONTENTS

Airedale, L.

Mar, C.

Brooks of Tremorfa, L.

Molloy, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Cledwyn of Penrhos, L.

Nicol, B.

David, B.

Northfield, L.

Davies, L.

Oram, L.

Dean of Beswick, L.

Phillips, B.

Donoughue, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

Prys-Davies, L.

Elystan-Morgan, L.

Rhodes, L.

Ezra, L.

Ripon, Bp.

Gallacher, L. [Teller.]

Ritchie of Dundee, L.

Galpern, L.

Ross of Mamock, L.

Glenamara, L.

Stallard, L.

Graham of Edmonton, L.

Stedman, B.

Grimond, L.

Stoddart of Swindon, L.

Hampton, L.

[Teller.]

Houghton of Sowerby, L.

Taylor of Mansfield, L.

Hughes, L.

Turner of Camden, B.

Kennet, L.

Wells-Pestell, L.

Kilmarnock, L.

Williams of Elvel, L.

Kirkhill, L.

Wilson of Rievaulx, L.

Listowel, E.

Winstanley, L.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Auckland, L.

Inglewood, L.

Beaverbrook, L.

Kimball, L.

Beloff, L.

Kinloss, Ly.

Brougham and Vaux, L.

Lauderdale, E.

Broxbourne, L.

Lawrence, L.

Caithness, E.

Layton, L.

Cameron of Lochbroom, L.

Lindsey and Abingdon, E.

Campbell of Croy, L.

Long, V.

Carnegy of Lour, B.

Lyell, L.

Carnock, L.

Macleod of Borve, B.

Clinton, L.

Margadale, L.

Coleraine, L.

Maude of Stratford-upon-Avon, L

Colville of Culross, V.

Colwyn, L.

Merrivale, L.

Cox, B.

Mersey, V.

Davidson, V.

Monk Bretton, L.

Denham, L. [Teller.]

Montagu of Beaulieu, L.

Dilhorne, V.

Montgomery of Alamein, V.

Elliott of Morpeth, L.

Morris, L.

Elton, L.

Mottistone, L.

Faithfull, B.

Mountevans, L.

Falmouth, V.

Newall, L.

Fortescue, E.

Nugent of Guildford, L.

Gormanston, V.

Pender, L.

Hailsham of Saint Marylebone, L.

Reay, L.

Rodney, L.

Harmar-Nicholls, L.

Russell of Liverpool, L.

Harvington, L.

St. Albans, Bp.

Hayter, L.

Salisbury, M.

Hesketh, L.

Sandford, L.

Hives, L.

Skelmersdale, L.

Holderness, L.

Somerset, D.

Hooper, B. [Teller.]

Stanley of Alderley, L.

Hylton-Foster, B.

Swinfen, L.

339

Tranmire, L.

Vaux of Harrowden, L.

Trefgarne, L.

Vinson, L.

Trenchard, V.

Young, B.

Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.17 p.m.
Lord Skelmersdale: My Lords, I beg to move that further consideration on Report be now adjourned until a quarter past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.18 to 8.15 p.m.]
Consideration of amendments on Report resumed.
Baroness David Baroness David moved Amendment No. 14:
Before Clause 14, insert the following new clause:
("Housing the homeless.
.—(1) The Housing Act 1985 shall be amended in accordance with the following provisions.
(2) In section 58 (definition of homelessness) after subsection (2) there shall be inserted the following subsections—
"(2A) A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy.
(2B) Regard may be had, in determining whether it would be reasonable for a person to continue to occupy accommodation, to the general circumstances prevailing in relation to housing in the district of the local housing authority to whom he has applied for accommodation or for assistance in obtaining accommodation."
(3) For section 69(1) (provisions supplementary to sections 63, 65 and 68) there shall be substituted the following subsection—
"(1) A local housing authority may perform any duty under section 65 or 68 (duties found to be homeless) to secure that accommodation becomes available for the occupation of a person—

(a) by making available suitable accommodation held by them under Part II (provision of housing) or any enactment, or

(b) by securing that he obtains suitable accommodation from some other person, or

(c) by giving him such advice and assistance as will secure that he obtains suitable accommodation from some other person.

and in determining whether accommodation is suitable they shall have regard to Part IX (slum clearance), X (overcrowding) and XI (houses in multiple occupation) of this Act." ").
The noble Baroness said: My Lords, this amendment is called the Puhlhofer amendment. It deals with homelessness, and what has happened as a result of the judgment in the case of R v. London Borough of Hillingdon ex-parte Puhlhofer. We brought forward this amendment in Committee because we wished to restore the rights of homeless people under the homelessness legislation to those which existed before the judgment in the case to which I have just referred. We are now bringing back the amendment as the Minister's response in Committee may have misled the House. He said (at col. 402 of the Official Report of 9th October) that our amendment was unnecessary because he had no substantial evidence that the Puhlhofer judgment was having an adverse effect on the treatment of homeless people. However that would appear to be inaccurate.
In July the Ministers met to discuss the effect of the Puhlhofer judgment with Nick Raynsford MP, Robin
340
Squire MP and Stephen Ross MP. During that meeting those Members drew their attention to evidence supplied by Shelter which suggested that this judgment is having an adverse effect on the treatment of homeless people. The evidence related to the practice of local authorities as well as to the courts' interpretation of the homelessness legislation following the Puhlhofer decision.
I have here the evidence which was supplied to the MPs by Shelter, and if the Minister wishes to look at it later he may do so.
The evidence suggests two things about local authority practice following the Puhlhofer decision. First, it suggests that the judgment has encouraged a number of local authorities to interpret the concept of accommodation which it is reasonable to occupy in a very restrictive way. Now, they are not taking account of the condition of the accommodation occupied in determining how reasonable it is for people to stay. For example, information on the current practice of Holderness and South Cambridgeshire District Councils suggests that these authorities are now following the Puhlhofer decision, and refusing to consider whether households forced to live in bed and breakfast accommodation might be homeless, regardless of the condition in which they are living or the security of that accommodation.
Secondly, the evidence suggests that, following Puhlhofer, some local authorities are now interpreting their duties under the Homeless Persons Act as merely to secure accommodation of a temporary rather than a permanent kind for households accepted as homeless. Information on the current practice of Maldon District Council suggests that that council believes an offer of a place in a women's refuge is sufficient to fulfil all its duties under the homelessness legislation.
The evidence supplied to the MPs concerned not only local authority practice, but also the way the courts are interpreting the legislation. It indicates that the only available remedy for homeless people who believe they have been denied their rights—namely, to challenge the local authority decision by way of judicial review—has become much more difficult. In one case supplied to the MPs by Shelter, R. v. Crawley Borough Council ex-parte Green, Mr. Justice Simon Brown refused the application for judicial review stating that the application under the 1977 Act was:
"not properly arguable in the light of the House of Lords' decision in Puhlhofer".
In another case supplied by Shelter, R. v. Strathkelvin ex-parte Mackenzie, Lord Mayfield suggested that he was "completely bound by Puhlhofer," and,
"as I read that case it does limit the powers of judges very considerably".
Following the meeting that Ministers had with MPs concerning the effects of Puhlhofer, further evidence has become available to the department concerning the adverse effects of that judgment for the rights of homeless people.
First, there is further evidence concerning the interpretation of the concept of accommodation in the homelessness legislation. For example, in the House of Commons on 2nd July, as reported at col. 1076 of the Official Report, Donald Dewar cited the case of

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London Borough of Wandsworth ex-parte Lindsay. In that case, Mr. Justice Brown said that prior to Puhlhofer, the local authority had a duty under the homelessness legislation to ensure that the accommodation offered to homeless people was appropriate. But,
"Puhlhofer makes plain that this is not so",
said Mr. Justice Brown.
"On the contrary, accommodation within the meaning of the Homeless Persons Act, whether for the purpose of Section 1, Section 4 or Section 17—and there may well be other relevant sections—need only be premises properly so describable even if in certain respects they are unfit, inadequate or otherwise unsuitable.".
Secondly, there is further evidence of the effects of the Puhlhofer decision on the remedies available to homeless people denied help by local authorities. For example, in May 1986 Lord Clyde in Catherine Stewart v. Monklands District Council refused an application for judicial review. In so doing, Lord Clyde referred to the Puhlhofer decision and reformulated Lord Brightman's comments on local authorities' discretion simply as to whether an authority was entitled to reach its decision. Lord Clyde is suggesting that the wide discretion available to local authorities made clear in the Puhlhofer decision may itself have been described too narrowly.
Therefore, following the Puhlhofer judgment, a decision by a local authority—although it may be wrong in fact—is seemingly unchallengeable in the courts unless the council can be shown to have abused their power. The Act was originally introduced because local authority discretion to refuse help to the homeless was too wide. Following the Puhlhofer decision, too wide a power is once again in the hands of local authority housing officers. At the moment, homeless people wrongly refused help by the housing authority have no effective remedy.
In the light of this evidence—and I am sorry to have given so much; but the Minister said that there had been none, so I felt obliged to produce plenty on this occasion—we should like to hear what the Minister has to say on the following points. First, on the issue of changes in local authority practice, does the Minister not agree that the evidence which I have quoted suggests that some local authorities may have substantially altered their practice as a result of the Puhlhofer judgment? If not, what evidence do the Government consider would be required before determining whether to take action as a result of the decision?
Secondly, is the Minister satisfied that his department's monitoring exercise which he mentioned in Committee will be adequate? For example, he mentioned that the DoE would want to look closely at local authorities' regular quarterly homelessness statistics to see what change could be detected. But last year 40 per cent. of authorities failed to respond to the department's quarterly homelessness questionnaire.
The Minister also mentioned a postal survey. What information has this so far elucidated? Surely local authorities who may have changed their practice following Puhlhofer would be reluctant to state this to the department on paper? What further monitoring is the department planning?
Thirdly, do the Government not consider that, following the Puhlhofer decision, there is now no
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effective mechanism for appeal against the day-to-day decisions of local government officers in homelessness cases? Do the Government not consider that the appeal procedure under the Act needs to be revised if homeless people are to enforce their rights under the homelessness legislation? Has the department submitted anything on this matter to the civil justice review, and, if so, what?
Fourthly, the Minister referred in Committee to the wide discretion that local authorities have under the homelessness legislation. We should like to hear the Minister confirm that the department's view of the homelessness legislation is that it is to give homeless people rights to help; and the issue we are concerned with is whether those rights are being denied as a result of the Puhlhofer judgment.
Therefore that is why we have brought back this amendment. We now have plenty of evidence to give the Minister. I should also like to remind him of what I said in Committee: that the noble and learned Lord, Lord Wheatley, said that he strongly supported our amendment. I beg to move.
Lord Skelmersdale: My Lords, the noble Baroness has such a nice way of calling me disingenuous that I always find it flattering. In moving this amendment, the noble Baroness quite rightly said that we debated an amendment in identical terms during the Committee stage. I am sure that it will not come as a surprise to the House to learn that we have undergone no sea change in our views in the past fortnight. Our position remains that we would regard as at best premature any attempt to amend the homeless legislation in the light of the Law Lords' judgment in the Puhlhofer case.
As a result of my comments in Committee, we have now received from Shelter details about cases in which individual authorities appear—and I stress the word "appear"—to have changed their policies in the light of that judgment rather than merely citing that judgment to support already existing policies. In Committee, the noble Baroness asked, no doubt rhetorically—and the reference is col. 399 of the Official Report—whether we wanted six, 60 or 600 cases. We have not yet reached her lowest figure. The noble Baroness has offered me evidence and I assume that it comprises more than six cases. I shall look at it with great care.
If contemplating changes to the legislation, we really need a much more substantial body of evidence than we have had up to now. In the Lindsay case, for example, the court merely accepted a concession by the applicant. The point was not argued as to the extent to which Puhlhofer applied in respect of those found to be homeless. Shelter has also sent us a comment on the Green case and I am advised that it is insufficient to indicate the reason for the court's judgment in that particular case.
Debate about the legal implications of the Puhlhofer decision is best left, as I am sure the noble Baroness will agree, to the courts, and of course relevant decisions will be considered as part of our comprehensive monitoring exercise.

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The only case that I know of from Shelter at this moment is the Morden and South Cambridgeshire case, which the noble Baroness mentioned, and which I would say provides the only clear example that authorities have changed their policies as a result of the Puhlhofer judgment. The other three or four examples—I mentioned two just now—given by Shelter are by no means clear evidence of the facts that the noble Baroness adduces.
I have in front of me a note of the meeting between the Members of Parliament, to which the noble Baroness referred, and my erstwhile colleague, Sir George Young. I am advised that no such evidence was presented at that meeting. As the noble Baroness has said, the Members of Parliament took the line that the judgment had a profound impact on the definition of "homelessness". From looking very quickly at the note of the meeting, the Members of Parliament concerned at that meeting seem to have agreed with that point of view.
The noble Baroness suggested that the Puhlhofer case deprives people of their rights. I really do not see how that can be so. The judgment defines those rights in the light of relevant legislation. Moreover, it does nothing to remove people's rights to apply for judicial review in cases of abuse by local authorities.
It would be right, as the noble Baroness thought it was right, to comment on the subject of judicial review generally, and this was one particular aspect of the Law Lords' judgment. The question of how far the exercise of an authority's discretion should be open to judicial review goes much wider than homelessness. As I read the Law Lords' view that it should be used only to monitor the actions of authorities "in exceptional cases" and where there is "an abuse of power", it means bad faith, a procedural irregularity, unreasonableness verging on an absurdity, and so on.
Those comments were intended to apply in a much wider context than the homelessness issue. Judicial review was never intended to be used as a substitute for the appeals procedure under the homelessness legislation, an appeals procedure having been specifically rejected by Parliament during the passage of the original Bill.
I should, however, point out that the way housing cases are handled by the civil courts is being looked at as part of the Lord Chancellor's review of civil justice. A consultation document is to be issued at the beginning of next year. It will be open to the noble Baroness, Shelter, and other interested parties, in response to that document, to let the Government have their views on the best means of handling all types of housing cases, including homelessness cases.
I hope that this will not be another occasion like the one before dinner when the noble Baroness seemed to be unable to accept that we were working on this matter; but the amendment is far in advance of reasonable thoughts. I hope that on those grounds she will be prepared to withdraw it.
8.30 p.m.
Lord Pitt of Hampstead: My Lords, I do not know what the noble Baroness will do about her amendment, but I must say that I am disappointed in
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the Minister's attitude. I heard his speech in Committee and I have heard him again now. The department seems to be hiding behind this question of evidence. What we have is what I should call a potential danger. It is a potential danger we can do something about at this moment.
The judgement now suggests that even though somebody may be living in accommodation which is in fact uninhabitable within the terms of the Act, that person is not necessarily homeless and the local authority does not have to regard them as homeless and does not have to rehouse them. That, in layman's terms, is the implication of the judgment.
That is not what we intended when we passed the Homeless Persons Act. We intended that people who were homeless—not only those who were on the streets but also those who were living in accommodation which was in fact regarded as not habitable—should be rehoused by the local authority. Until the judgment local authorities did in fact take that on board. There was a steady flow of action by local authorities and people who were living in uninhabitable conditions were accepted on their lists as homeless, and treated as such.
The judgment has changed that. This amendment is merely to try to put that back. I cannot understand why the Government sofirmly resist it, saying that they need more evidence. What do they suggest—that they need to have a lot of people living in uninhabitable conditions, not rehoused by their local authority, and that until they have that they are not prepared to remedy the situation by saying that if a person is living in accommodation not regarded as habitable, he should be rehoused?
This is all we are asking in this amendment. All we are trying to do is to restore what we and most local authorities thought was the law; and they were acting in that spirit. We now have a judgment which changes that. We are asking the Government to restore the situation. Why the resistance?
Lord Carmichael of Kelvingrove: My Lords, I am surprised that when he was speaking to this amendment the Minister did not make reference to the fact that this House—whatever happened at the other end—made a firm decision on an amendment to the Housing (Scotland) Bill on this subject. Many of the discussions we have had, and many of the arguments put forward on this Bill both at Committee stage and tonight, have been on the lines of the amendment carried by this House on the Scottish Bill.
I know that the other House has overturned that. But in this House we are still in a position to say that we are in favour of an amendment that considerably changes the meaning of the Bill and gives a new interpretation to "homelessness". It is a simple change in the interpretation from that given by the Appeal Court in Puhlhofer.
The Minister said that that case referred to the relevant legislation. What we are trying to change is the current legislation. As my noble friend Lord Pitt of Hampstead said, and as was said during the Scottish Bill, practically every local authority in the country, practically every Member of your Lordships' House

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and of the other place, believed that they knew what was meant by "homelessness".
Undoubtedly when it went to the higher court they had to look at the exact words and had to say that it was not necessary to define "satisfactory". All that was required was "accommodation", and that was the end of it. I think that someone in the debate said that strictly speaking Diogenes in his barrel, in the terms of the Act, would be considered to be accommodated, and yet that obviously goes beyond common sense.
This House carried an amendment—not one of mine, although I was involved with the Bill—from the noble Lord, Lord Mackie of Benshie. The amendment carried by this House would have cleared up the point, made it reasonable, and returned the intention of the law to what everyone believed it was. I find it difficult to agree when the Minister says that we must have a Lord Chancellor's committee before we can make a decision on this. Surely there is a quicker way of polishing up this piece of legislation and returning the position to what everyone thought it was without having to go to the length of a special Lord Chancellor's committee.
I think the Minister said that a judicial committee of the Lord Chancellor was going to look at this definition. I think that is a sledgehammer to crack a nut, and I hope that the Minister will at least give us some indication that he will take away this point and think about it before the next stage of the Bill.
Lord Stallard: My Lords, I want to make two short points on the Minister's remarks in reply to the noble Baroness, Lady David. First, he refuted the argument that the Bill as it stands takes away the rights of people; in other words, we were trying to restore their rights, and he contested that. In support of the noble Lords, Lord Carmichael and Lord Pitt, I have to say that prior to the Puhlhofer case there had been the case of Brown v. Hamilton District Council—I know Hamilton very well; I came from there—and when that judgment reached the House of Lords the noble and learned Lord, Lord Fraser of Tullybelton, said that he entirely accepted that the accommodation provided must be reasonable. It was on the basis of that judgment that local authorities had acted until the Puhlhofer case.
We have two variations; we have two judgments. Those people who had operated on the first judgment felt that the Puhlhofer judgment took away the rights that homeless people had enjoyed under the previous judgment until then.
What we are trying to do now is to restore the situation. The amendment to which my noble friend Lord Carmichael referred attempted to restore to people like the Puhlhofers the rights they had enjoyed prior to the second judgment, the Puhlhofer judgment. The noble Lord should accept the views of those of us who took an interest in the case. I was chairman of CHAR in those days and my noble friend Lord Dean was closely connected with the same organisation. We were very much involved in the original Brown case, the judgment that ensued from that and the situation that obtained. When the noble Lord said that he could not believe there were any cases as there is no case law, I accept that. But what has happened is that housing
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aid centres and voluntary organisations which, until the Puhlhofer judgment, had been able to exercise some kind of restraint on local authorities and impose on local authorities the duties as they saw them then, can no longer do that.
It is difficult to measure how many cases did not go through as a result of that restraint and what has been the effect. Those of us who know the position on the ground know that there has been an effect. The minute that kind of avenue is withdrawn from housing aid centres and one or two organisations one closes off a whole area of activity. It is difficult at the moment, but I imagine that evidence will be brought forward to give chapter and verse of some cases. I put those two ideas to the Minister in reply to the points he made on the same subject so that he may reconsider what he said in their light.
The Countess of Mar: My Lords, I support this amendment particularly in the case of young people. I am very concerned about what is happening these days with youngsters. It seems to me natural that when boys or girls reach the age of 16 or 18 they will want to feel their wings. There are bound to be rows at home. There are situations such as we have in the nearest town to where I live, Kidderminster, where mother and father are both unemployed, where there are two or three children in the house, all getting under one another's feet. The kids leave school. It was a carpet manufacturing town but very few carpets are now made there because of competition from abroad. The disputes within the family make the situation absolutely untenable for children so they leave home.
With the girls, their let-out is to become pregnant, then the local authority houses them because they have a baby and they have to have someone to care for them. The boys very often go to one of the big cities like Birmingham or London. I have heard that even Worcester, a shire city where one would think that everything would be fine, has had a 50 per cent. increase in its homeless in the last 12 months.
There must be something wrong in our judgment of homelessness if we allow young people to live on the streets. The noble Lord asked for evidence. He only has to walk up to Trafalgar Square at night to see what is happening. He only has to walk to Piccadilly at night to see what is happening. He only has to go to see the Salvation Army or Shelter to get the evidence. It is all very well waiting for Shelter or the Salvation Army to write to him. Why does he not go to see for himself the evidence of homelessness in our cities and towns? It is atrocious that this kind of thing should be happening in this day and age when our basic rights are a roof over our head, clothes on our back and food in our belly. There are a lot of people who do not have any of those.
We must do something about the housing situation now and make the local authorities provide housing instead of pushing people from one pillar to another post and back again. It is a very sad society that we have now.
8.45 p.m.
Lord Skelmersdale: My Lords, with the leave of the House, while I agree with 95 per cent. of what the noble Countess, Lady Mar, has just said, we have gone

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an awfully long way from the amendment on the Marshalled List that we are supposed to be discussing.
The homeless persons legislation was intended to provide a long stop for dealing with people who are roofless—exactly the cases that the noble Countess has brought before the House—not with what this amendment is all about, the standard of accommodation. I readily admit that it is open to local authorities to act more generously, but that is not the law under the homeless persons Act.
One noble Lord—I think it was the noble Lord, Lord Carmichael—made an interesting comment on Diogenes. I am advised that Diogenes would not have been accommodated. He would, however, been intentionally homeless and so would not have been covered by the Act at all.
I fully agree with the noble Countess, Lady Mar, that, yes, the evidence that she is talking about I could get by going down to Waterloo Station when the House rises (at something like 4 o'clock tomorrow morning at this rate). I could get it by going up to Trafalgar Square or by going to Worcester. But it is not the subject of this amendment.
I have said that this is a subject which the Government are considering in the course of the review into allied matters being undertaken by my noble and learned friend the Lord Chancellor. The review goes far, far wider than housing policy. Therefore I suggest, as I suggested in Committee, that we should be allowed to follow the advice of the noble Lord, Lord Elystan-Morgan, who said in column 404:
"I have little doubt that my noble friends on this side will regard that"—
in other words, what I have just said—
"as a reasonable undertaking in the circumstances".—[Official Report, 9/10/86; col. 404.]
I hope that the noble Baroness and her noble friend will continue to take that view.
Baroness David: We do not, my Lords. We have had a lot of support for this amendment. It is not trying to do anything really new: it is trying to restore the situation to what it was before Lord Brightman's judgment. That is all we are trying to do.
We have produced evidence tonight and the Minister appears not to be satisfied with it. He is stalling again—we are waiting for working parties, reviews or whatever. It is always putting off the moment when decisions are taken. Here is the opportunity. We have a housing Bill. We can do something about this situation, which is really serious. I shall, of course, not try to divide the House at this time of night, but I shall certainly come back with this at Third Reading when I have studied what the Minister has said. I shall try to find out a little more about the meeting that there was with MPs. It is no use the Minister saying that this must be left to the courts. We know now what the courts will do. They have to abide by the judgment in the Puhlhofer case, so things will not be changed until the law is changed, until we have asserted what we want to assert, which we are trying to do in this amendment.
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I am not at all convinced. We shall certainly come back, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 15 not moved.]
The Deputy Speaker (Lord Hayter): My Lords, in calling the next amendment I have to point out that the last figure of Amendment No. 16 is wrong. It should read "35" not "36".
Schedule 3 [Common parts grant]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 16:
Page 115, line 34, leave out from ("out") to ("and") in line 35.
The noble Lord said: My Lords, Clause 14 and Schedule 3 introduce a new form of home improvement grant, the common parts grant, for the common parts of buildings containing flats. An amendment was agreed in Committee which has the effect of enabling a tenant or leaseholder to apply for a grant even if the work is the responsibility of the freeholder. This amendment makes a further consequential change to Schedule 3. I beg to move.
On Question, amendment agreed to.
Clause 15 [Housing management grants]:
Baroness Hooper Baroness Hooper moved Amendment No. 17:
Page 33, line 16, leave out ("make grants") and insert ("give financial assistance").
The noble Baroness said: My Lords, in moving this amendment, I should like to speak also to Amendments Nos. 18, 19, 20, 21 and 22. These are technical amendments to ensure, as was always intended, that the powers provided by the clause encompass contractual payments and financial assistance as well as grants and that potential recipients can include a wider class of bodies providing services in connection with housing management. Such payments and some such bodies do not fall within Clause 15 as presently drafted. The last two amendments simply make provision with regard to the terms on which payments may be made subject to Treasury consent. I beg to move.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendments Nos. 18 to 22:
Page 33, line 19, leave out from ("persons") to end of line 20 and insert ("seeking to facilitate or encourage improvements in, or providing services in connection with, the management of such housing").
Page 33, line 20, at end insert ("; and may, with the like consent, make payments otherwise than by way of financial assistance in pursuance of arrangements made with any such person.").
Page 33, line 36, leave out ("make grants") and insert ("give financial assistance").
Page 33, line 42, at end insert ("; and may, with the like consent, make payments otherwise than by way of financial assistance in pursuance of arrangements made with any such person.").
Page 34, leave out lines 1 to 8 and insert—
("(4) Financial assistance given by the Secretary of State under subsection (1) or (3) may be given in any form, and may in particular be given by way of grants, loans or guarantees or by incurring expenditure for the benefit of the person assisted; but the

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Secretary of State shall not in giving such assistance purchase loan or share capital in a company.
(5) Financial assistance may be given and other payments made on such terms as the Secretary of State, with the consent of the Treasury, considers appropriate; and the terms may, in particular, include provision as to the circumstances in which the assistance or other payment must be repaid or otherwise made good to the Secretary of State and the manner in which that is to be done.
(6) A person receiving financial assistance under this section shall comply with the terms on which it is given and compliance may be enforced by the Secretary of State.").
The noble Baroness said: My Lords, may I move Amendments Nos. 18 to 22 en bloc? I beg to move.
On Question, amendments agreed to.
Clause 19 [Disposal of dwellings in new towns]:
Baroness David Baroness David moved Amendment No. 23:
Page 35, line 21, at end insert—
("Provided always that if a district council is willing to enter into a scheme under this Part of this Act no such disposal shall take place contrary to the wishes of the majority of the tenants of such dwellings in the district voting in a secret ballot independently conducted.
( ) For the purposes of a ballot under subsection (1) above the tenants shall be offered the alternative of transfer of their dwellings to the district council and the underlying financial terms and conditions of disposal to the district council shall not be less favourable taken as a whole than are available to the prospective alternative transferee.
( ) Where dwellings which are managed by the district council as agent for the Commission, a development corporation or the Development Board for Rural Wales, are disposed of under the powers mentioned in subsection (1) above, then such district council shall be indemnified by the owner against all financial loss incurred as a result of the establishment or termination of such management agency.").
The noble Baroness said: My Lords, this is an amendment to do with the amendment brought in by the Government at Committee stage. That altered the disposal of houses which new towns were going to get rid of when they were run down. Previously it was expected that the district councils would take over those houses, but according to that amendment (which is now a clause in the Bill) the houses can be disposed of to any person. This is causing a good deal of despondency and uncertainty within the district councils involved because they were expecting something quite different. They think that there have been misapprehensions and misunderstandings about the district housing situation. I know that the Minister has met a number of representatives of the new towns since the Committee stage, and so I hope that he is now a wiser man than he was and will be more understanding of their problems.
I am very glad to say that the noble Baroness, Lady Faithfull, is supporting me in this amendment. One of the matters which the councils think is misunderstood is the way they run their housing services. They think that perhaps they are being mixed up with some perhaps not very good districts. Let me quote one or two examples of how they are run and what has been said about the way they are run. Milton Keynes, for instance, has been running the corporation housing stock through a management agency for four years. In that time the opportunities for economies of scale and the introduction of sound management disciplines have resulted in substantial improvements in efficiency and significant cost reductions in many
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areas. These have been particularly marked in housing repairs and maintenance, re-letting of vacant property and arrears recovery.
Wrekin had a poll conducted by MORI which showed that there was very strong support (87 per cent.) for the council's plans to decentralise the housing service and again support for the district taking over the service. It was going to decentralise to units of about 5,000 and I think that this is what most people are looking forward to. Birmingham, for instance, is decentralising to units of 20,000, which is very much greater. I think that this general programme of having smaller units is very good.
Peterborough city is in a similar situation to Milton Keynes, having taken over the management of the stock two years ago. In Warrington, the Audit Commission has shown that the district council has one of the best housing management records in the North-West. The council's rent arrears record is one of the best in the country and consequently management costs and therefore rents are kept to a minimum.
The Minister admitted in Committee that he was new to the new town scene and that he had not yet visited new towns. But we feel it is a pity that these very important decisions are being taken before he has had the experience of seeing what is going on.
The other point I want to make is that local councils have been making their own housing schemes over the last number of years on the assumption that they would be getting the corporation houses and their plans for the housing of the elderly and other groups have been based on what they are expecting to get. They have not duplicated the corporation programme. They are trying to complement it.
I think that the noble Baroness is going to speak on the homeless and the young. I shall not mention those groups because I do not want to take up the time of the House. New town local authorities are not opposed to the principle of housing associations. What they want is for the tenants to have a choice. They want tenants to be able to put their point of view forward. They want the same treatment as any other association, developer or whatever would have if they had to give up what they were expecting—which was to assume the management of the local corporation properties.
New town local authorities want to be treated on the same terms. I think the Minister perhaps misled the Committee a little on that in suggesting—when I think I raised the question of the capital debt—that the Government are proposing to offer the houses with a substantial write-off (if they do not go to the district) of capital debt to housing associations. The Minister's reason is that they are not eligible for housing subsidy. That is true, but they are eligible for housing association deficit grant from the Government. The district councils want to be treated fairly in the matter of finance.
I also mentioned last time the question of staff who have been taken over from the corporations, particularly in the case of Milton Keynes and Peterborough. The local authorities want those staff to be treated fairly. I think this time we have put forward a very reasonable amendment. I hope that the Minister can find his way to accepting it and relieving a great many people's minds. I beg to move.
Baroness Faithfull: My Lords, I rise to support the noble Baroness, Lady David, in this amendment. I want to say quite categorically that I agree with the policy of Her Majesty's Government of the right to buy. Also, as the noble Baroness has said, I support to the full the work of the housing associations. But I also believe that there must be choice and there must be balance. Therefore, local authorities must have an adequate housing stock.
Having said that I wonder whether I may go back in history. There was a time when I was a children's officer in Oxford. We had a terrible problem of homelessness. I have a deep affection for the new towns because in my travels I found that Telford had a lot of empty houses at that time. Every person who came to me who was homeless in Oxford I directed to Telford. Gradually Telford realised it was getting a number of people from Oxford and wondered why. It telephoned me to ask "What is this stream of people coming from Oxford to Telford?".
I had to do that because at that time the Housing (Homeless Persons) Act had not been passed and children's departments were responsible for homeless families. Later on it was discovered that children's departments had no housing stock and therefore it was quite wrong that they should be responsible for housing the homeless. The only thing that they could do was what I did—discover where in England there were empty houses. Later there was the Housing (Homeless Persons) Act whereby local authority housing departments had to house the homeless; and of course we come back to the homeless.
My contention here is—and in very many of the amendments we have debated the whole problem of homelessness—that the new towns ought to have housing stock in order to house their homeless. I have looked at the figures and, for instance, Basildon has 7,000 on the waiting list. Altogether there has been a rise in homelessness of 42 per cent. overall during the past two years. I am not for one moment saying that some houses should not go to the housing associations or indeed that some houses should not be sold; but I am saying that the bulk of the houses should go to the local authority in order that they may deal with their homeless.
If I may say so, we are in great difficulties over this question of homelessness, because it is a duty laid by Westminster on local authorities to house the homeless, and if we do not make it possible for them to do that we are conniving at local authorities not doing their duty. I think that is an extraordinarily difficult thing.
I make one final point, and it is this. Many of us grieve about the condition of our inner cities. I contend that for the district authorities which we are dealing with—the new towns—the conditions are not now those of the inner cities. It would not be right for us here in Parliament to legislate in a way which would lead new towns to develop the poor conditions of the inner cities. Therefore I believe that we ought to see to it that a great many of the houses go back to the district authorities in order that they may deal with the duties that we have laid on them.
9 p.m.
Lord Skelmersdale: My Lords, I have to report that I had a very helpful meeting with representatives of the new town local authorities last week, but I was not surprised, in the light of that discussion, to see this amendment come forward. It is in such similar terms to that moved by the noble Baroness, Lady David, in Committee that I find it a little difficult to discover something new to say.
I can understand and to some extent sympathise with what the amendment seeks to achieve, but it is going about it in the wrong way. Clause 19 is deliberately very limited in scope. It is designed to do the minimum necessary to ensure, in line with the announcement made by my noble friend Lord Elton in his Written Answer in March, that consideration can be given to a non-council option for the transfer of a new town corporation's housing in parallel with the option of transfer to the council.
The amendment tags on to our deliberately straight-forward Clause 19 some potentially complicated provisions. First, it raises the matter of tenant consultation. For our part, we did not attempt in the time available to set out a statutory framework for consultation, but we have given several undertakings that consultations will take place, and we are still considering exactly what form consultations should take. We shall of course take the views of the relevant housing authorities. When we have reached a conclusion on this, all the necessary arrangements can be made administratively. For these reasons, I cannot recommend to the House that this aspect of the noble Baroness's amendment should not be accepted. However, I can repeat my assurance given in Committee that the views of tenants will be fully taken into account in deciding to whom new town housing shall be transferred.
Secondly, the amendment seeks to ensure that the financial terms available to the council and to the alternative transferee are equally favourable. On this point, I cannot add anything to what I said in Committee. It is our intention that any transferee of new town housing, of whatever institutional type, should be in a position to take on the housing and manage it properly without the risk of creating endless complications and rigidities. Finally, the amendment raises again the matter of the agency arrangements under which the housing at two new towns, Milton Keynes and Peterborough, is managed by the councils there. Both agreements envisage the possibility of termination other than in the context of a transfer of the housing to the councils.
As I said at the meeting to which I referred at the beginning of my speech, no decision has been made; nor will it be until not only I but also the Minister for Housing have been to at least some of the new towns. I hope that will be at least a little comfort to the noble Baroness opposite.
I suggest that the next step would be for the parties to try to reach a mutual understanding of what is said or implied in the agreements about the circumstances in which compensation may be payable by the corporations to the councils. If the councils are still concerned that the agreements, in their view, make inadequate provision for that possibility, I should be

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prepared to consider the matter further. At present, however, I regard the provision in the amendment as at least premature.
My noble friend Lady Faithfull spoke as though these were empty houses that were being transferred. I see from the shake of her head that that was not the impression she ment to convey, but that was the impression she meant to convey, but that was the impression she conveyed to me. In fact, it is quite tenanted for a number of years. To that extent, I think they may be regarded in the same light as the considerations we have just been having about local authority stock.
I also got the impression that the numbers of houses my noble friend thought existed were exceedingly large; whereas, for example, in Basildon there are 1,150 new town shared ownership houses and the local authority has within the designated area 4,250. In Warrington, the figures are 950 and 13,675 respectively. I can tell your Lordships that this list is available. If it is not already in the Library, it very soon will be. It is in the new town management accounts for 1985.
I regard the proposal in this amendment as premature at present; and for all the reasons that I have given I ask the noble Baroness not to pursue it.
Baroness Stedman: My Lords, before the noble Lord sits down, can he give us some indication about the compensation that may be payable to staff? As I understand it, in the case of Peterborough—and presumably Milton Keynes will be the same—where the agency agreements are going, the staff have been transferred from being new town staff to being district council staff. I understand that they had rather better prospects for compensation or redundancy terms if their job ceased as a new town employee than they have as a district council employee. If the Minister cannot give us that information now, perhaps he will let us have it before Third Reading.
Lord Skelmersdale: My Lords, with the leave of the House, I should like to answer the noble Baroness, Lady Stedman. We are well aware of the assumed lack of protection for new town housing staff in a case where the housing is not going to a local authority. There is clearly an argument that the statutory position for staff should be the same, regardless of the destination of the housing they have been managing. However, I should point out that staffing was not in practice a problem at Central Lancashire New Town where the new town housing was sold last year to four housing associations. I think that the staffing implications of future transfers to owners other than councils can be left to be resolved by sensible local negotiation against the background of the employment legislation which applies to the non-housing staff of new town corporations affected by transfers of assets and wind-up.
Like the noble Baroness, Lady Stedman, I, too, shall study in Hansard what I have just said.
Baroness Stedman: My Lords, the Minister anticipates.
Lord Skelmersdale: Of course I anticipate. If I need to correspond with the noble Baroness further, I shall of course do so.
Baroness David: My Lords, perhaps I, too, may have a copy of the letter.
Once again, we have heard that the proposal is premature. I made the point on the last amendment that we are always waiting for something. This is a very modest amendment. It states in the first part that,
"no such disposal shall take place contrary to the wishes of the majority of the tenants of such dwellings in the district voting in a secret ballot independently conducted".
We have been hearing time and again today what the Government are intending to do about the disposal of public sector housing to the private sector. If it is all right there, why is it not all right here?
The Minister also said that not all that many houses are involved, but there are, I understand, 60,000, which is quite a substantial number.
There is no question of the district saying that it has to have them. The tenants will have a vote on whether the houses should go to the district or elsewhere, and that is likely to be the housing associations.
I am not at all satisfied with the answer given. I notice that the noble Baroness, Lady Faithfull, also shakes her head. We shall have to study all that has been said and we shall certainly be back again on Third Reading, if not with the same amendment, at any rate with something else because left as it is the situation is not satisfactory. I hope that the Minister will increase his knowledge of the new towns between now and next week, as I think he still needs to know a little more about the way they operate and how efficiently many districts conduct their housing services. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 [Determination of price for leasehold enfranchisement]:
9.15 p.m.
Lord Ezra Lord Ezra moved Amendment No. 24:
Page 39, line 13, leave out subsection (3) and insert—
("(3) The above amendments do not apply in respect of any house where before the commencement of this section the tenant or any predecessor in title of the tenant has given a valid notice under section 14 of the Leasehold Reform Act 1967 (notice of desire to have an extended lease) and such notice has not been abandoned, whether or not an extended lease has been granted pursuant to the said notice and whether or not notice under section 8 of the Leasehold Reform Act (notice of desire to have the freehold) has subsequently been given.").
The noble Lord said: My Lords, in moving this amendment I wish also to take into account Amendments Nos. 25, 26, 27 and 27A, which all refer to the same clause and which grouping, I understand, has been agreed.
I should like first to make it clear that I am chairman of a leaseholders' association, and I am fairly familiar with this ground. I wish to raise two points in connection with the clause we are now debating. The first is of a general nature and the second of a more specific nature.
The general nature of my comment is that there has been much uncertainty and litigation generated by the Leasehold Reform Act 1967, as amended by the Housing Act 1974, and the uncertainty has not been limited to the landlords and the freeholders, but has extended to leaseholders also. I think that the interests of both parties need to be taken into account.
What disturbs me about the introduction of this clause into the Bill at the Committee stage is that there has been insufficient time for all the parties involved to state their position in regard to it. As I understand it, it was not specifically intended to be dealt with under this Bill; nevertheless it was introduced at the Committee stage. Bearing in mind the importance of this issue and the number of people who have leasehold accommodation in various parts of the country, particularly in London, a full opportunity should be afforded to those people to put across their point of view. When this issue is next considered in the House and, indeed, in another place, there should be a balanced approach to it, taking account of the views of all parties concerned.
Personally I believe that the best solution to the problem would be to remove this clause at this stage and come back to it again when the views of all parties have been properly explored as a result of a full consultative process. I remind your Lordships that the whole objective of the legislation in question—that is, the Leasehold Reform Act—was to facilitate the purchase of a freehold by leaseholders. I think that at the very least, when introducing a clause of this sort, the views of the leaseholders should be fully obtained. I put that point as a general one and I feel should be glad to know what the Government feel about it.
Secondly, and more specifically, I am concerned about subsection (3) of Clause 22. This introduces a measure of retrospection into the whole issue. There has been a certain degree of litigation connected with this issue. The Hickman case in particular was referred to by the noble Lord, Lord Coleraine, when he introduced this amendment at Committee stage, which led to this clause being incorporated in the Bill. The leaseholders of houses which were higher rated than those originally included in the 1967 Act were thereby able to move to the purchase of their freehold by a two-stage process. This was uncertain but it was approved up to the Court of Appeal. I understand that this matter may well be brought to the House of Lords in its judicial sense.
It seems to me extraordinary that we should be introducing legislation at this stage when the judicial process has not been completed. I should have thought that at the very least we should have an amendment to subsection (3). Amendment No. 24 is the amendment which I have proposed.
Those who are familiar with this issue will know how long it has taken individual leaseholders to obtain their freeholds. The process has been very lengthy indeed. The landlords have much at stake and they are very large organisations with large legal services to support them, whereas the leaseholders are individuals having to pay their way through the courts. This has led to much delay and I think it would be most unreasonable if leaseholders who are going through the
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pipeline at the moment, and acting in good faith in the light of the law as it now stands and in the light of the judgments so far reached, should be jeopardised in this manner through this retrospective measure.
Generally speaking, I believe that your Lordships are against retrospective legislation. It seems to me that this is a pretty virulent form of that disease, particularly when the judicial procedure has not been completed.
I make these two points. First, I believe that we should have a full reconsideration of the 1967 and 1974 Acts in so far as they refer to leasehold enfranchisement. I do not believe that they should be dealt with in this way, by an insertion into a Bill which deals generally with other matters. Secondly, if that cannot be done, I believe that at the very least the amendment which I have proposed to subsection (3) should be accepted in order to avoid the degree of retrospection that is included. I beg to move.
The Deputy Speaker (Lord Renton): My Lords, I should point out, as Amendment No. 26 is being referred to, that the word "not" has been omitted in the penultimate line of the amendment before the word "apply".
Viscount Colville of Culross: My Lords, I do not wish to participate in the discussion on the political merits of this matter, either with respect to the landlords or with respect to the tenants, save to say that this House has been over a very similar point before. On this occasion the political problem—if I may put it that way, with a small "p"—is that, as a result of what the Court of Appeal has decided, the tenants will be getting their freeholds cheaper than the landlords would like.
In 1969 there was a case before the Lands Tribunal which was called Curtins. That had exactly the opposite effect of allowing the tenants to get their freeholds but at a greater expense than the then Government thought was right. The noble Lord, Lord Kennet, who was a Minister in that Government moved amendments (which had a checkered parliamentary history) to put that right in the Housing Act 1969. Some noble Lords were, I think, at that time in another place, including my noble friend Lord Broxbourne. Perhaps the noble Lord, Lord Winstanley, will remember this. The fact of the matter is that these things get put into housing legislation and we must deal with that situation on its merits.
I do not wish to say anything further about it, except that I had a certain amount of sympathy with my noble friend Lord Coleraine when he put down an amendment which includes the terms of subsection (3) as it stands in the Bill. All he did was to pick up the proviso in what is now Section 82 of the Housing Act 1969, which was also retrospective in that it cut short various processes of negotiation which could currently have been either in terms of arbitration or in terms of litigation before various tribunals. It was done as a proviso.
I do not know why nobody in this House picked it up. I observe that I voted against the clause on Third Reading. But I looked at the reports of debates and nobody picked up the element of retrospection. If I

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may suggest it, it is time we did so. My noble friend cannot be blamed for following the precedent, because there it was. But I think it is a serious issue. The problem, as it seems to me, is at what point you draw the line so that the law may be fairly changed to deal with situations which may very well have taken a long time to develop but to deal with them at a time which is fair to all parties.
There are two steps in the matter that is currently in Clause 22: first, the extension of the existing lease so that it goes on for another 50 years; and, secondly, the conversion of that into a freehold. With respect, I would prefer not to deal with the former, but simply to stay with the issue which arises when a tenant, whether or not he has succeeded in extending his tenancy for a further 50 years, embarks upon the process of acquiring a freehold and takes a conscious decision: "Yes, I shall now go for a freehold".
At that point he employs professional advisers, surveyors and solicitors and he embarks upon a process which, if all does not go well—and it has not gone well in some cases, like Mosley v. Hickman—will lead to litigation, which can go a very long way. He embarks upon it on the basis of the law as it is at the time that he does so. If he cannot do that, if he is going to embark upon a process which will involve him in costs, professional advisers, litigation up to your Lordships' House and up to the European Court, or whatever it is, and then have the law changed in the middle of the game, that is something of which I believe your Lordships would never approve.
It does not matter whether it has to do with leasehold enfranchisement. It does not matter whether we agree with the judgment in Mosley v. Hickman. It is a matter of general principle that we must not move the goalposts in the middle of a commercial transaction. It is perhaps difficult to decide where exactly to put the block, as it were; where to choose to draw the line as to the position that has to be held in terms of avoiding retrospection. I should prefer not to do it at the stage when people are considering whether or not to extend their franchises. I should prefer to do it at the moment when they say "Yes" or "No, I shall go for my freehold". That, I think, is what Amendment No. 27 does.
Quite apart from the merits of leasehold enfranchisement, whatever they may be—and I do not want to embark upon those—we ought not to do what we did in 1969. We ought to stand absolutely firm that Parliament will not go in for retrospective legislation of this kind and that we will change the law so that it does not affect people who have already embarked upon a course of conduct relying on the law as they thought it to be.
At the very least I hope that my noble friend Lady Hooper will give some consideration to Amendment No. 27. It is the same in effect as Amendment No. 26 in the name of the noble Lord, Lord Broadbridge, who is not here to move it. It comes to the same thing. If my noble friend has not already done so I would ask her to seek the opinion of our noble and learned friend the Lord Chancellor or of the Law Officers, because this is a matter of general consideration and something that matters a good deal as a precedent in Parliament.
Lord Elystan-Morgan: My Lords, perhaps I may follow the sentiments expressed so lucidly and powerfully by the noble Viscount, Lord Colville of Culross. This matter touches upon a number of most delicate and fundamental legal issues. I agree with the noble Viscount that this matter should be studied deeply and carefully by the noble and learned Lord the Lord Chancellor and by the Law Officers before the Government come to a final decision.
As far as my own instinctive attitude is concerned, perhaps I may express a mildly heretical sentiment in that I genuinely believe the Committee to have been mistaken in accepting the amendment proposed by the noble Lord, Lord Coleraine, on the 9th of this month. That view can be sustained on two very strong grounds; the first, as has already been mentioned by the noble Viscount, is that Clause 22(3) of the provision was plainly and blatantly retrospective in its effect. There may be situations when Parliament must act retrospectively, but they are very few. They are normally situations which involve perhaps some sudden, almost catastrophic development in the international field where all the other alternatives are worse and less appropriate; but they should be limited almost entirely to that area. Certainly there is no earthly justification for retrospective action here. But I understand from my noble friends that the Government are probably going to take a benign view of the opposition to retroactivity. I see the noble Baroness nodding (and I am glad that that is the case), so there is no need to push any more at that opening door.
The second reason is that, with the greatest respect to the noble Lord, Lord Coleraine, it seems to me that the basis upon which the amendment was proposed on 9th October was fallacious. The noble Lord said then at col. 447:
"In this amendment I am asking the Committee to put right an anomaly in the Leasehold Reform Act 1967 which arose as a result of the amendment to that Act made by the Housing Act 1974".
As Dr. Joad might have said, what do you mean by an anomaly? If the noble Lord meant that it could be argued that that provision might or might not have been totally consistent with other provisions in the Leasehold Reform Act 1967 and the amending Acts, there may be an argument; but consistency is not of necessity perfection in such a context. If, on the other hand, the noble Lord was saying that Parliament in 1967 and particularly in 1974 intended to take a certain course and genuinely believed that a certain course had been taken, but that it now occurs in the light of the Hickman decision earlier this year that Parliament failed to put into legislative effect that which it intended, I believe, with the greatest respect to the noble Lord, that he is wrong. In my submission, there is nothing that was said on either of those occasions in 1969 or 1974 that would justify such a view being taken.
Furthermore, I read carefully the report of that decision of the Court of Appeal. It was a unanimous decision of their Lordships—Lord Justice Fox, Lord Justice Mustill and Lord Justice Stocker—in March of this year. There is nothing in the judgment of the court, as delivered by Lord Justice Fox, to suggest that they had thought that Parliament could misconceive the situation in any way at all.

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The issue is as simple as this, as I understand it. In the 1969 Act when it came to the question of valuing a freehold it was assumed for purposes of valuation that the person who sought enfranchisement had already applied for and had been granted a new tenancy. Section 118 of the Housing Act 1974, in the light of the changed rateable value levels, said that, in so far as properties in Greater London between £1,000 and £1,500 rateable value were concerned, if the person who wished to enfranchise had in fact applied for a new tenancy—but only if he had done that—then the valuation should be on the basis of the new tenancy: in other words, that the words imported into Section 1 of the 1969 Act, the "existing tenancy", should mean the tenancy then existing; that is, the new tenancy and not the earlier one. The issue is as simple as that.
However, if Clause 22 is to stand unamended—that is, the first two subsections of it, since the Government, happily, are now dealing with the question of retrospection—it will mean that a great injustice will be done to leaseholders. The situation was put in that way in the judgment of Lord Justice Fox. I quote the passage concerned, which is a brief one. The learned Lord Justice said:
"Mr. Wood, for the landlords says that if 'the tenancy' is read as 'the existing tenancy' and unacceptable anomaly arises in that the tenant who chooses to take an extended lease prior to making his request for the freehold will pay a substantially lower price than the tenant who has failed to do so.
"But that anomaly does not, in my view, justify the court in departing from the clear language of the statute. The practical result of which the landlords complain is really the consequence not so much of section 9(1A) but of the fact that Parliament chose to confer on the tenants of those houses a right to extend their leases for a substantial period at ground rents, and without premiums".
In other words, the learned Lord Justice is saying quite clearly that what the landlords were objecting to in the Hickman case was not any anomaly as such but the clear, cold-blooded, clear-headed, deliberate decision of Parliament in that particular regard. The judgment goes on to say:
"Mr. Hague for the tenants is, I think, correct when he says that if we adopt the landlords' construction, we are introducing another anomaly, namely, that Parliament having conferred on the tenant the right to extend the tenancy (which is obviously a valuable right) should, when it comes to a valuation of the reversion, disregard the exercise of that right by language which is quite inappropriate for such a course".
I can do no better than adopt the proposition of the learned Lord Justice that if this course is taken clearly the lessee will be placed in an extremely anomalous and unjust position. Furthermore, I believe that there was great force in the argument put forward by the noble Lord, Lord Ezra, in proposing the amendments, when he drew the attention of the House to the fact that it may well be that this House in its judicial capacity may yet have to adjudicate upon the issue in the Hickman case.
Therefore on these Benches we urge, first, that the House should await the Hickman decision. It should wait until the case is finally adjudicated upon or until all rights of appeal to this House are extinguished. In the light of the situation then prevailing it should think hard and long upon the issues, it should consider what the intention of Parliament clearly was in 1969 and 1974, it should bear in mind that that undoubtedly
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was understood by all petitioners to be the law for a period of 12 years, it should consult all interested bodies, and then if needs be it should consider whether any change is necessary, avoiding of course the plague of retrospection. It is in the light of those considerations that we on these Benches wholeheartedly support the amendment moved by the noble Lord, Lord Ezra.
Lord Winstanley: My Lords, I have no wish to prolong this discussion but I hope that the noble Lord, Lord Elystan-Morgan, is right in reading in the countenance of the noble Baroness a favourable response which we are shortly to receive, because I feel that unless we have a favourable response there will be grave disquiet not only in certain parts of your Lordships' House but outside it as well. I believe that many people feel that the whole of Clause 22 was perhaps rather hastily introduced without proper consultation with the various parties who will clearly be affected and I think that there is a great deal of disquiet about the element of retrospection.
I accept what the noble Viscount, Lord Colville of Culross, said. I was present during the passage of the Act of 1969 and I did not wholly realise at the time quite what we were doing, but I am sure that those who did it meant to do it. However, on this occasion I think we have to think carefully before we accept an element of retrospection of this kind in a clause that has been introduced hastily at such a late stage. We should think carefully and be wholly satisfied that there is some compelling need for it. Without a compelling need I think that we should be most unwise to accept it. I hope that the noble Lord, Lord Elystan-Morgan, was correct in what he read in the noble Baroness's countenance.
Lord Broxbourne: My Lords, I do not want to take up too much of your Lordships' time when the case has been put so admirably in the clear and powerful speeches to which we have been privileged to listen. I rise only to ask a question following the remarks of the noble Lord, Lord Elystan-Morgan, to whom I listened with great respect and attention as always. I should like clarification of the position in regard to the possibility of further proceedings before the Appellate Committee. The noble Lord referred to that possibility. My copy of the judgment of the Court of Appeal ends with the words:
"The appeals were dismissed with costs. Leave to appeal to the House of Lords was refused".
I am not aware that the Appeals Committee of this House then granted any leave in supersession of the order of the Court of Appeal. Perhaps the noble Lord could——
Lord Elystan-Morgan: My Lords, I am most grateful to the noble Lord for giving way. That, too, was my understanding and I believe the position to be that that avenue is totally exhausted, but I have seen a document today which referred to an extant petition to this House. It is out of an abundance of caution, in case in some way or another that appeal has been revived, that I mention it. However, if I am wrong and that avenue has been exhausted, all the other arguments remain about looking at the situation in the light now of the decision of the Court of Appeal.
9.45 p.m.
Lord Broxbourne: My Lords, I am obliged to the noble Lord for that explanation and clarification. If it be the case, as we all think it is—I see in the Chamber the noble and learned Lord, Lord Ackner, who of course is in a better position than any of us to know about these esoteric matters—then the comment of Lord Justice Fox stands, does it not? He said:
"Any anomalies which result from the construction which I have adopted of the words 'the tenancy' can, I think, only be corrected by Parliament".
By "Parliament" he is not referring to the Appellate Committee of this House; he is referring to Parliament as a sovereign legislature.
Lord Coleraine: My Lords, Clause 22 arises from an amendment which I moved in Committee on 9th October and which your Lordships then accepted, as has been stated. The amendment does no more, in my view—I say this advisedly—than put right a valuation anomaly arising under the Leasehold Reform Act 1967 as a result of amendments made to that Act by Section 118 of the Housing Act 1974.
The noble Lord, Lord Elystan-Morgan, queried the use by me in Committee of the word "anomaly". He asked two questions as to how it might have been used. If I understood him correctly, I used the word in both the senses to which he referred. I took the view that it was appropriate then, and notwithstanding what he has said tonight I still take the view that that was the appropriate way of describing the situation.
Having said that, the amendment is intended to correct a valuation anomaly. Your Lordships will understand that I answer with those words the general point raised by the noble Lord, Lord Ezra. His general point was that this was a large matter which had to be discussed by all the interested parties before any action was taken. I considered that it was only a small anomaly which we were correcting and that these wide-ranging discussions as to what should happen were not called for.
I had been advised by the Association of Land-owning Charities that its members, including the Oxford and Cambridge colleges and the central London freeholders, found themselves very much at risk as a result of the Lands Tribunal decision which was confirmed by the Court of Appeal in the case of Mosley and others v. Hickman, to which reference has been made. The risk, now a certainty, was that a loophole had been discovered and that lessees of high-rated houses could adopt a device whereby they might enfranchise on the almost confiscatory terms originally provided by the 1967 Act rather than on the enhanced terms which had been provided by the 1974 Act when the right to enfranchise was extended to more expensive and valuable houses.
The effect of the operation of the loophole can easily seen by considering the valuation figures in that case and the two other cases consolidated with it. They affected three large houses off Kensington High Street. The valuation figures had been agreed by the parties for the use of the Lands Tribunal and the agreed compensation payable for the three houses, if the loophole existed, as was found to be the case by the Court of Appeal, totalled £150,500. That was less than half the compensation totalling £346,500 which
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would have been payable had there been no loophole. Those figures show the seriousnesss of the problem affecting freeholders.
Clause 22 has been criticised today because it is retrospective. I accept that a fair case has been made out that that is so. The amendment of the noble Lord, Lord Ezra, Amendment No. 24, and the amendment of the noble Lord, Lord Broadbridge, Amendment No. 25, provide in effect that any long lessee who has rights under the Leasehold Reform Act should be allowed to take full advantage of the loophole so long as he takes at least the initial step of applying for the extended lease in the months that remain before the clause takes effect.
The second amendment of the noble Lord, Lord Broadbridge, Amendment No. 26, and the amendment of the noble Viscount, Lord Colville, Amendment No. 27, are more restricted in their effect. They would permit tenants under extended leases only to serve notice of desire to acquire the freehold under Section 8 at any time between now and the commencement of the section. The two disparate sets of amendments and the speeches of tonight make it clear that legislation is seen as retrospective to a greater or lesser degree depending upon who is affected and through whose eyes the legislation is viewed. Amendments Nos. 24 and 25 are very wide-sweeping. They illustrate in a most cogent way the undoubted fact that from one point of view almost any long lessee will feel that he has been retrospectively affected by the clause if only because the rights which he had, and for which he may have paid, will be taken from him if the clause is enacted. Amendments Nos. 24 and 25 are designed in my view simply to wreck the clause.
The question is where to draw the line between the different cases in order to establish fairness. The argument I have to put forward is that there is neither common sense behind, nor authority for, the contention that once an intention to close a loophole in the law is known and publicised those persons who stand to be enriched by the loophole must be allowed to continue to take advantage of it down to the passing of the Act or the later commencement date.
The first point I make is that the commencement provisions in subsection (3) have clear precedent closer to hand than that which my noble friend Lord Colville has drawn to our attention. The very short Leasehold Reform Act 1979 was passed to close a loophole which had been discovered and exploited by certain freeholders. Section 1(3) states that the provisions of that Act should apply to any claim made on or after the passing of the Act and to a claim made before that date unless by then the price has been determined by agreement or otherwise. These provisions may be said to be even more retrospective than Clause 22 because they bite from the passing of the Act rather than from the laying of the commencement order subsequently.
Both the Leasehold Reform Act 1967 (which introduced leasehold enfranchisement) and the Housing Act 1974 (which extended it to houses of higher rateable values) operated retrospectively against the vested rights of freehold owners. I would ask your Lordships to consider exactly what is the right of lessees which, it is said, is being taken away retrospectively. It is a right of recent origin, granted to certain well-to-do lessees by the Housing Act 1974 at

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the expense of freeholders whose long-standing rights were intended to be retrospectively diminished and were further diminished as a result of the loophole.
I submit that the leaseholders whose rights were originally acquired as a result of retrospective legislation, and then augmented by what I believe were drafting errors in legislation, ought not to expect the cry of "retrospection" or "retrospective" now being made in their names to bring tears to too many dry eyes tonight. In whatever way the loophole is closed there will be retrospective effect against some leaseholders. I believe that the balance of reasonableness, both on the grounds of precedent and of fairness between the parties, lies with the clause rather than with any of the amendments. I think that the amendment should be opposed by your Lordships.
However, having originated the amendment, and having heard the debate and the arguments of other noble Lords, I should welcome time in which to consider one aspect arising out of what has been argued; namely, that put forward by my noble friend Lord Colville. Basically, that is whether the rights of lessees who have obtained extended leases and who have already served Section 8 notices should be looked at further. I cannot say what conclusion I would reach. However, I am tentatively wondering whether this point could be dealt with by the addition at the end of subsection (3), a saver for those lessees in some such words as:
"but do not apply in any case where the tenant's notice under Section 8 was given before 10th October 1986",
that date being the day after the introduction of Clause 22 of the Bill in Committee here.
On the amendment, I should also like to say that I am advised that quite apart from question of fairness, all the amendments seeking to leave the door open for further Section 8 notices to be served leave room for considerable uncertainty as to the position of enfranchising lessees between now and the commencement of the section. The Mosley v. Hickman case illustrates, if illustration were needed, the problems which arise on enfranchisement as the result of the drafting of this legislation. What is feared by those who advise me is that to allow further Section 8 notices between now and the commencement date would be to lay the way open for some essentially vexatious applications by lessees seeking to benefit from the loophole, with the strong possibility of further litigation. There may not after all be very many potential cases, but as the valuation figures which I have already quoted make clear, the stakes are high.
For all the reasons I have given, I hope that noble Lords will not press their amendment today.
Viscount Colville of Culross: My Lords, before the noble Lord sits down, will he accept from me that if he is thinking about this again he will have my support in advocating the earliest possible commencement for this provision if it is to go in the Bill? At the very least in the 1969 case that particular clause (it was only one of three) came into effect on Royal Assent. If that were to be done in this case we have only to wait a fortnight.
Lord Elystan-Morgan: My Lords, before the noble Lord replies to the noble Viscount, Lord Colville of Culross, perhaps I may put this point to him. His argument is that this is a loophole founded upon a mistake. I am sure that he has read carefully the debates both in another place and in this House in 1974. I should like to ask him courteously whether there is any passage in that debate to which he cares to point to suggest that Parliament had an intention different from the conclusion to which the Court of Appeal came in the Hickman case. My reading of the debates and of the Hickman case is that Parliament, whether or not one agrees with it, had a firm intention in mind and expressed itself clearly, and that the law has been understood for 12 years since 1974 to be exactly the same as the Court of Appeal interpreted it to be. There is no question of a loophole.
Lord Coleraine: My Lords, some time ago I read carefully the debates of your Lordships' House. At this moment I cannot give the noble Lord the quote that he would wish. However, if the situation had been as he described it, I think that those debates would have made clear that this particular way round the amendment was apparently being provided in order to afford enhanced compensation. I am grateful to my noble friend Lord Colville for the point he has made.
10 p. m.
Baroness Hooper: My Lords, in endeavouring to demonstrate the Government's balanced approach for which the noble Lord, Lord Ezra, called at the outset, I trust that your Lordships will forgive me if I cover some ground already covered in the learned contributions of many of your Lordships.
Clause 22 amends the provisions in the Leasehold Reform Act 1967 which specify the assumption to be made in determining the price to be paid for enfranchising a leasehold house in the higher rateable value bracket (between £500 and £750; or in Greater London between £1,000 and £1,500) where the applicant has first opted for an extended lease under the 1967 Act. It deals with the consequences of the Hickman case, which revealed that long leaseholders in the higher rateable value bracket could obtain significantly advantageous terms for the enfranchisement of their leases if they had first obtained an extension lease. Subsection (3) of Clause 22 deals with cases already in the pipeline at the time the clause is commenced.
The extension of the scope of the 1967 Act to houses in a higher rateable value bracket introduced by the Housing Act 1974 does not seem to have taken into account what happens if a leaseholder in the higher rateable value bracket first opts to extend his lease and then, as he is entitled to do, opts to enfranchise, provided that he does so before the date when his original lease would have expired. In other words, the provisions of the Act were not crystal clear.
The situation was not tested in the courts for a number of years. However, it was brought before the Lands Tribunal following the application of three leaseholders on the Phillimore estate in Kensington to enfranchise, having first extended their leases. That is the Hickman case.

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The question was essentially whether the valuation of the enfranchisement price should take account of the extension lease. The two possible approaches produced quite startling differences in the valuation figures. Depending on whether the extension lease was taken into account, the figures were between £45,000 and £56,000 if the tenant's view was adopted, or between £98,000 and £137,000 if the landlord's view was adopted. It seems to me that this constitutes the anomaly in the situation. This is not a satisfactory position and there is no reason to suppose that it was intended in 1974.
It seems inequitable that there should be alternative ways of assessing the valuation of a property for the purposes of leasehold enfranchisement depending on which of two routes the applicant chooses to use. The attractions to leaseholders of the route of extension followed by enfranchisement were only fully revealed as a result of the Hickman judgment, but the Government had accepted for some time before that decision that if the outcome revealed that there was a problem in interpreting the valuation assumptions for houses in the higher rateable value bracket, the Government would seek an opportunity to put it right. Indeed, as I said during the Committee discussion, my noble friend Lord Bellwin, at the time of the Housing and Building Control Bill in 1984, when my noble friend Lord Coleraine first referred to this point, said that if a case was brought before the courts and the outcome revealed that there was a problem, we would consider what should be done. The amendment of my noble friend Lord Coleraine provided that opportunity.
Having accepted that there is indeed a flaw in the 1974 Act, the Government consider that it should be put right as quickly as possible. I think that on the whole in the debate that we have had this evening there has not been too much opposition in principle to the amendment. Therefore, subsection (3) as it stands attempted to do this by providing that the revised valuation assumption should apply to cases in the pipeline if no price had been determined by agreement or otherwise. This followed the precedent of the Leasehold Reform Act 1979 which, as my noble friend Lord Coleraine has already mentioned, stopped another, different, loophole.
However, since we now know that the Hickman case cannot be regarded as finally settled—and I understand that a petition has been presented to the House of Lords—and in view of the points made so forcefully in the course of the debate this evening, the Government accept that subsection (3) as it stands cannot be supported. If noble Lords will agree to withdraw their amendments, the Government will consider the question of transitional provision further. It may be that, as my noble friend Lord Colville suggested, we should take advice from my noble and learned friend the Lord Chancellor and the Law Officers.
However, we have not done this so far because we believe that there is no true issue of retrospection at stake. Any new law is liable to affect existing cases and this does not necessarily make it retrospective. In fact, we accept that it changes the law in a way that may disappoint people's expectations. But if the change to
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the Leasehold Reform Act did not take effect until all those currently hoping to take action but who had not actually done so had completed their enfranchisement, it would be a long time before it could have effect. We accept, however, that it is difficult to know what the cut-off date should be.
Before sitting down perhaps I should deal with one or two other specific points raised. Although I have touched on it, Lord Ezra's point about the cases in the pipeline and how they should be defined perhaps needs a little clarification. In undertaking to look again at the transitional provisions in subsection (3) the Government are prepared to try to ensure that the clause does not apply to leaseholders such as those in the Hickman case who have already given notice under Section 8 and may be some way into negotiations. But they believe that Clause 22 should apply when no Section 8 notice has been submitted before the cut-off date.
Further consideration needs to be given to what the cut-off date will be, but it may be that Royal Assent looks the most likely choice. Going wider than this by accepting Lord Ezra's Amendment No. 24 could allow substantial numbers of leaseholders to take advantage of this loophole which, in turn, could be unfair to landlords.
On Lord Ezra's other general point about the Leasehold Reform Act, the Government are aware that various other problems have arisen under the 1967 Act and have emerged in the 20 years of its operation, though these are thought to be less serious than the loopholes revealed in the Hickman cases. The Government are keeping these under review and will deal with them if a suitable legislative opportunity occurs.
Going into a little more detail on the point raised by the noble Lord, Lord Elystan-Morgan, if the House of Lords in its judicial capacity deals with the Hickman case it would be on the basis of the law before the amendment. The clause in the Bill changes the legislation. This is a different question entirely. The question is what the law should be in the future, and the Government take the view, and made it clear in 1984, that the law should be changed.
It was apparent in 1974 that the valuation basis for houses in the higher rateable value band was to be on the assumption that the right to extend the lease should not be taken into account. It cannot be right that tenants should be able to put themselves into a different position by actually exercising that right. If noble Lords will agree to withdraw their amendments, then we shall reconsider the position and bring forward alternative proposals at Third Reading, if that is acceptable.
Lord Ezra: My Lords, I am sure that all who have participated in this debate—and many words of wisdom have been uttered—will be pleased to have heard what the noble Baroness has just said, that the Government will come forward with an amended subsection (3) at the Third Reading. Before withdrawing my amendment I should like to emphasise, among the many words of wisdom uttered,

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those of the noble Viscount, Lord Colville of Culross. He said that he thought it would be wrong in legislation to jeopardise the position of one who involved himself in a commercial process based on the law as it stood at the time. I think that that is important.
I was sorry to note that in the noble Baroness's remarks she said that those in the process of negotiating the extension of their leases would not be included, because the understanding of the law on the part of those who are doing so at the present time was that in due course they would be able to negotiate the purchase of the freehold. I think it is very important to take this into account. We are either trying to treat
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people fairly or we are not. The fair way to treat them is to say that those who entered a process believing the law to be what it had been confirmed to be by the Court of Appeal at the time they did it, should not be jeopardised.
This raises the question of the cut-off date, and I should certainly be agreeable to a relatively early cut-off date. We are not arguing about that. I feel it would be hard on those who are pursuing a course which they thought to be right to find themselves retrospectively affected. I hope that that can be taken into account; and with those remarks I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 25 to 27A not moved.]
Baroness David Baroness David moved Amendment No. 28.
After Clause 22, insert the following new clause:
("Amendment to the Landlord and Tenant Act 1985.
. In section 8 of the Landlord and Tenant Act 1985 (implied term as to fitness for human habitation) in the Table contained in subsection 4 after

"on or after 6th July 1957

In London; £80

Elsewhere: £52"

insert "on or after June 1985

In London: £4,000

Elsewhere: £3,000"").

The noble Baroness said: My Lords, the purpose of this amendment is to update the rent limits which govern the applicability of Section 8 of the Landlord and Tenant Act 1985. This section implies into tenancy agreements an obligation on landlords to ensure that the premises let are fit for human habitation. At present it only applies to tenancies where the rent is less than £80 per annum in Greater London and less than £52 per annum elsewhere. Despite inflation those rent levels have not been increased since 1957, even though the provision was re-enacted only last year. This important section, which has been in force in previous Acts since the turn of the century, has accordingly ceased to be of any practical use to almost all tenants.
In the debate on 9th October the noble Baroness, Lady Hooper, said that the provisions of Section 8—I do not know whether she is listening: she is clever to do two things at once—had been overtaken both by changes in housing conditions and by Section 11 of the Landlord and Tenant Act, formerly Section 32 of the Housing Act 1961. This is not the case, as was shown graphically by Quick v. Taff-Ely in which the Court of Appeal considered landlords' repairing obligations in relation to a small house built in the early 1970s and rented by an unemployed couple with four daughters.
It was accepted that for many years the house had suffered from severe condensation and dampness, causing bedding. clothes and other fabrics to become mildewed and rotten. In winter the house was virtually uninhabitable, wallpaper peeled off the walls and ceilings, woodwork rotted and fungus and mould growth appeared, particularly on windowsills. Lord Justice Dillon described the conditions as appalling, hut the Court of Appeal held with some regret that the provisions of Section 32 of the Housing Act 1961, now Section 11 of the Landlord and Tenant Act, did not place the landlord under any obligation to remedy the defects or to compensate the tenants.
Lord Justice Lawton expressed his surprise that Section 6 of the Housing Act 1957, the precursor of Section 8, did not apply and said that new rent limits were needed. Conditions such as those in the Quick case are not uncommon, particularly in post-war, system-built constructions or rehabilitations. The National Consumer Council in a 1980 survey found that one-third of tenants suffered from condensation or damp, or both. Part of the cause is that, although Section 8 is the only provision that allows tenants to take action themselves through the courts to compel landlords to make dwellings fit for habitation, the rent limits are completely out of date. This amendment seeks to remedy that defect.
Other points in reply to what the noble Baroness said to me in Committee are, first that Section 11 of
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the Landlord and Tenant Act does not apply to tenancies created before 1961. Secondly, it is hard to believe that the Government believe that Section 8 has been superseded by Section 11. In 1985 both were re-enacted in the same Act. Local authority powers to take action in relation to unfit premises have existed since 1868. Sections 5 to 11 of the Artisans and Labourers Dwelling Act then came in. It is therefore wrong to state that the original predecessor of Section 8, Section 75 of the Housing of the Working Classes Act 1890, was the only measure to remedy unfitness when it was first enacted. The implied covenant now contained in Section 8 and local authority powers have existed together since 1890. Local authority powers alone are plainly not sufficient, as the extent of the problem shows. I beg to move
Lord Skelmersdale: My Lords, the origins of Section 8 of the Landlord and Tenant Act 1985 go back 100 years or more. Section 8 provides that in any contract for the letting of a house at an annual rent not exceeding a specified amount, and subject to certain other conditions, there is an implied condition that the house is fit for human habitation at the start of the tenancy and that the landlord will keep it so during the term of the tenancy. The present rent limits date from 1957. Section 11 of the Landlord and Tenant Act 1985 dates from 1961. It places a statutory obligation on the landlord to keep the dwellinghouse in repair. It is a much more exacting requirement than that in Section 8. All short leases of property let after 1961 in both the public and private sectors have the protection of Section 11, and the protection offered by Section 8 is not relevant.
However, Section 8 was not repealed in 1961 and has not been repealed since because there may still be some pre-1961 leases to which Section 11 does not apply and to which Section 8 may still apply. It is not relevant for most leases granted after 1961. It is therefore not necessary to amend the rent limits.
The noble Baroness is trying to argue that Section 8 has not been overtaken by Section 11. If this is so, we should ask why the noble Baroness's own party did not extend its application by updating the rent levels when they were in office from 1964 to 1970 and from 1974 to 1979? Is it not more likely that they came to the same conclusion as we did—that the provisions are effectively out of date? On this basis, I urge the noble Baroness to withdraw her amendment.
Baroness David: My Lords, I do not see why a Labour Government not having taken some action in a period of 10 years when they could have done so prevents this Government from taking action now when these figures are clearly ridiculously out of date. Will the Government be prepared to look at this again in the light of what I have said and after they have had time to read and study it, because I do not think that really all that much attention was being paid just now?
I should be grateful if the Minister would agree to look at this again because it seems to me that the figures are so ludicrously out of date that it is stupid to keep this provision on the statute book. It seems

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sensible that they should be updated. On the other hand, if the figures of £4,000 and £3,000 are not liked, they could be amended, or we could have no figures shown at all. Perhaps the noble Lord will reply on that.
Lord Skelmersdale: My Lords, I know that at this time of night we are all becoming rather tired. The noble Baroness appears to have taken up my last remarks without putting them into the context of the remarks that I made immediately before that. I suggest that we both go away and read what we both said.
I am prepared to consider this matter further, but, to be honest with the noble Baroness, I rather suspect that my consideration will extend rather beyond Tuesday next and might result in my repealing Section 8 altogether, in which case the figures would be a total nonsense. I shall undertake to consider this matter further, but not at the great speed which perhaps the noble Baroness was hoping for.
Baroness David: My Lords, I think that repeal is perhaps a possibility. I should like to think about that, but of course I shall read very carefully what the Minister has said and try to direct my mind very positively to it at a better time of day. With the assurances he has given me that he will look at this matter again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 [Minor and consequential amendments; repeals]:
10.15 p.m.
Baroness David Baroness David moved Amendment No. 29:
Page 39, line 41, leave out paragraph (h).
The noble Baroness said: My Lords, in moving Amendment No. 29, I shall speak also to Amendment No. 32. These are two tidying-up amendments resulting from your Lordships having accepted our new clause, which now stands as Clause 1 of the Bill. I beg to move.
Lord Skelmersdale: My Lords, I accept that the noble Baroness's amendments are a necessary consequence of the implantation of Clause 1 into the Bill. As such, I have no wish to make an issue of either of these amendments, but I should stress that does not imply that we accept Clause 1 as it stands.
This is an important, difficult issue. It is a matter to which many of your Lordships attach considerable importance and it is one which has given rise to repeated difficulties over the past six years. If at all possible, I want to avoid a situation in which there is continuing dissatisfaction with the operation of the test, of the kind that has been evident over the past two years. That is why we must look at the matter afresh in the light of the noble Baroness's amendment, accepted in Committee. We shall make our response as soon as possible.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 30:
Page 39, line 43, at end insert—
("( ) grants for affording tax relief to housing associations;").
The noble Lord said: My Lords, this amendment is a further provision to facilitate shared ownership schemes by housing associations. With the leave of the House, I should like to speak also to Amendments Nos. 33 and 90. Those registered housing associations which are subject to general tax legislation normally have their tax payments reimbursed under the provision in Section 62 of the Housing Associations Act 1985. That section refers to reimbursement in respect of their letting function, and there are uncertainties as to whether that term includes the grant of a shared ownership lease on property expressly provided for disposal by that means. The effect of this amendment is to ensure that it does. I beg to move.
On Question, amendment agreed to.
Baroness David Baroness David moved Amendment No. 31:
Page 39, line 45, at end insert—
("( ) the grounds on which the court may order possession if suitable alternative accommodation is available").
The noble Baroness said: My Lords, in speaking to Amendment No. 31, I should like to speak also to Amendment No. 35. Much concern has been expressed about the possible abuse of the new ground for eviction provided by Clause 9 of the Bill. Ministers have stressed in Committee that they would want to look very carefully at any scheme submitted for their approval by a council wishing to evict tenants simply to hand over their homes for refurbishment for sale by private developers.
However, a number of councils are satisfied that they already have a right in law to evict tenants from their homes for sale, without needing to use Clause 9 and avoiding any safeguards which Ministers may wish to attach to its use. They have obtained counsel's opinion that they could use the existing Ground 10 in the Housing Act for this purpose. This ground allows a landlord to seek possession of tenants' homes if it intends to demolish or improve the property. Counsel's opinion is that a council could seek possession under Ground 10 if it wished to hand over tenants' homes to private developers and the council claimed that it intended to improve the property for sale, using Barratt or Regalian as its agent.
Several councils have already threatened their tenants with eviction under Ground 10 in order to empty their estate for refurbishment for sale by developers. Langbaurgh council threatened to evict tenants on its Spencer Beck estate under Ground 10 for their homes to be done up for sale by Barratt. Tower Hamlets council has constantly threatened tenants on its Waterlow estate at Bethnal Green with eviction for their homes to be done up for sale by Barratt, acting as the council's agent in improving the property.
The amendment would ensure that councils would be unable to evict tenants from their homes for sale to developers under Ground 10. It would require the council to make available for letting under secure tenancies any property improved after possession had been obtained under this ground. Parliament never

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originally envisaged that Ground 10 should be available to councils wishing to privatise their estates. The amendment ensures that councils could not avoid government scrutiny of any cases where they wished to evict tenants for this purpose as provided in the Bill in relation to Clause 9. It is to ensure that the landlord's future use of the premises is to provide security of tenure accommodation, and this will prevent acquiring possession simply for the purpose of subsequent sale.
Lord Skelmersdale: My Lords, we seem to be returning to the noble Baroness's determined restriction on the way in which local authorities can manage their stock. Ground 10 has been in force for a number of years with no evidence of abuse and with no moves to change it. No attempt was made in drafting Ground 10 to restrict the use to be made of properties after work has been carried out on them, because it was envisaged that Ground 10 would cover a variety of situations. It is for the local authority as landlord to judge in each particular case how best to use its redeveloped stock. For example, I think it quite likely that from time to time a landlord will wish to carry out work which falls under paragraph (b) of Ground 10 and then use the property for housing purposes which do not involve the grant of secure tenancies. For example, the local authority may consider that an appropriate use for the reconstructed building would be a hostel, student lettings or even a children's play centre. The amendment would prevent that.
Where major works are to be carried out, the work required may well count as reconstruction and so fall under paragraph (a) of Ground 10, but this may not always be the case. I can see the analogy with Clause 9, where the Secretary of State's approval would be required for schemes involving both redevelopment and disposal, but Clause 9 adds to the existing provisions in Schedule 2 to the Housing Act. It does not, I must emphasise, replace them.
It seems to me that the amendment will have little benefit in practice and will unnecessarily restrict local authorities' abilities to manage their housing stock. I hope that, on those grounds, the noble Baroness may see fit to withdraw the amendment.
Baroness David: My Lords, I think the Minister said there had been no evidence that authorities had under this ground got rid of tenants for other purposes. I have quoted the Spencer Beck estate and the Waterlow estate in Bethnal Green so in fact it can be used for this purpose.
However, once again—and particularly at this time of night—I think I shall have to read what the Minister said and consider whether I need to come back on Third Reading. An awful lot is going to be returned to on Third Reading, it seems to me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 5 [Housing: minor and consequential amendments]:
Baroness David Baroness David moved Amendment No. 32:
Page 127, line 13, leave out paragraph 8.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 33:
Page 127, line 25, at end insert—
("Grants for affording tax relief to housing associations.
8A.—(1) In section 62 of the Housing Associations Act 1985 (grants for affording relief from tax), after subsection (1) insert—
"(1A) In subsection (1)(a) 'letting' includes—

(a) in England and Wales, the grant of a shared ownership lease;

(b) in Scotland, disposal under a shared ownership agreement."

(2) In section 73 of the Housing Associations Act 1985 (the index to Part II), at the appropriate place insert—
"shared ownership section 106"" agreement (in Scotland)
The noble Lord said: My Lords, I spoke to this with Amendment No. 30.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 35:
Page 128, line 10, at end insert—
("Grounds for possession.
.—In Schedule 2 to the Housing Act 1985, Ground 10, after "dwelling-house" insert—
"and in the case of (b), the landlord proposes to let the dwelling-house under a secure tenancy".").
The noble Lord said: I spoke to this Amendment with Amendment No. 31.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 34:
Page 128, line 19, at end insert—
("( ) In sections 207 and 322 of the Housing Act 1985, in the definition of "person having control" for "house" substitute "premises".").
The noble Lord said: My Lords, I refer here to Amendments Nos. 34, 36 and 37. These amendments correct errors in the Housing Act caused by the speed of consolidation. I can explain them in more detail if the House requires it, but, hearing a deathly silence, I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 36:
Page 129, line 6, at end insert—
("11A. In Schedule 22 to the Housing Act 1985 (compulsory purchase orders in connection with clearance areas), in paragraph 8(2) (procedure after order has become operative), for "a copy of the notice" substitute "a copy of the order".").
The noble Lord said: My Lords, I spoke to this with Amendment No. 34.
On Question, amendment agreed to.
Clause 24 [Simplified planning zones in England and Wales]:
Baroness Nicol Baroness Nicol moved Amendment No. 37:
Page 40, line 28, after ("desirable") insert ("provided that such part or parts of their area are designated in the relevant Local Plan or Structure Plan as suitable for development.").
The noble Baroness said: My Lords, the noble Lord, Lord Kennet, moved an amendment similar to this at Committee stage, but that amendment sought to confine SPZs to inner urban areas. The noble Lord, Lord Skelmersdale, declined to accept the amendment on the grounds that it was an over-tight restriction

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preventing the generality of local authorities from taking advantage of SPZ provisions.
This amendment meets those concerns without threatening sites that are intended to be kept free from development. Simplified planning zones could only be set up where development was planned to be sited and not where it was not planned to be sited. If the Government resist this amendment we are left to conclude that they are willing to contemplate the possibility of SPZs on sites, including greenfield sites, which have been specifically safeguarded from development in statutory plans.
This amendment has the support of the local authority associations, the Royal Town Planning Institute and the Council for the Protection of Rural England. I should like to quote some of the arguments from the CPRE, which is concerned about the amendment and makes a very good case for it. It says:
"The amendment has the … advantage of ensuring that SPZs support the forward plan system rather than detract from it. It is CPRE's understanding that the Government wishes to see development take place in accordance with these approved statutory plans".
If the Government have moved away from that position, I hope the Minister will tell us so.
"SPZs could be set up where local plans showed land allocated for development (or in the absence of local plans"—
which I am aware do not extend to many rural areas—
"where structure plans gave a general indication of a preference for development)".
It ends by saying,
"The Council for the Protection of Rural England remains most concerned that as the Bill stands there remains a threat to the proper planning of development in the countryside as a whole. Acceptance by Parliament of the amendment proposed would remove that concern".
These are legitimate concerns. I beg to move.
Lord Skelmersdale: My Lords, I hope from what I said in Committee that it is clear to the House that the Government are not persuaded to find a way of restricting the application of the SPZ provisions beyond what is already in the Bill. The noble Baroness mentioned environmentally sensitive areas. We have an amendment to cover that point in just a few minutes, and so I shall reserve my comments until that moment in view of the lateness of the hour.
This is a matter of principle and not of detail. The provisions are robust enough as they stand to prevent abuse. If it were just a matter of detail, I have to say I find the amendment lacking on that score, too.
From the noble Baroness's point of view, and indeed that of the CPRE, whose views she has just quoted, the sad truth of the matter is that development plans, be they structure plans which are not precise enough or local plans which either may be out of date or do not exist at all—and the House should know that only one-quarter of the country has local plans in force at the moment—cannot be relied upon to identify all the likely development opportunities which would be suitable for SPZ designation. By their nature, structure plans are broad and only give a general indication. They are also quite often out of date.
Local plans are discretionary and give only partial coverage. There could be quite serious gaps in just
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those areas where local plans might be needed as a basis for SPZs. Where they have been prepared, local plans may well have allocated new sites for development. But it is questionable whether they have set out clear enough guidelines for urban regeneration.
Even taken together, I fear that structure and local plans cannot be said to provide a comprehensive, up-to-date and clear framework for establishing an SPZ. They might even be a hindrance on occasion. Plans cannot always be the leaders they are intended to be. Events and circumstances change rapidly. So on both counts of principal and detail I am afraid that I cannot accept this amendment.
10.30 p.m.
Baroness Nicol: My Lords, I must answer some of the points that the Minister has made. He said that local plans and structure plans are not up to date. That can be true. It is also true that many of them are up to date, having been just completed, and though local plans cover only a portion of the countryside, structure plans cover all of it. They are not detailed—we are aware of that—but they indicate quite clearly where development is expected to take place and where it will be encouraged, which, in itself, should be enough to provide a basis for the investigation of an SPZ. As for being out of date, simplified planning zones themselves will be out of date, as out of date as most of these other provisions, after they have been in existence for two or three years. Is the Minister saying that they should then cease to exist, because they are out of date, or that they should be reviewed?
Your Lordships may remember that at Committee stage we moved from this side an amendment which said that the life of an SPZ was too long. We wanted it changed from 10 years to five years. Now the Minister is saying that perhaps even in five years they may be out of date. I am sorry, but I cannot accept that argument at all. It seems to me that the Government are saying—though the Minister ltd not answer that point—that they now have very little regard for structure plans; because he seemed to be saying that, whatever the structure plan has said, if a developer wants an SPZ established it does not matter where it is—the Government will look kindly on it. I am very disappointed at the reply but I see no point in pursuing the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Baroness White): My Lords, I think that at this point we have to revert to Amendment No. 35. There is a misprint on the Marshalled List. This amendment should have been moved by the noble Baroness, Lady David.
Baroness David: My Lords, I spoke to it with Amendment No. 31, so what I should have done when it was called—if it had been in my name—was not move it.
[Amendment No. 35 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 38:
Page 43, line 3, leave out ("A scheme's ceasing to have effect, or").
The noble Lord said: My Lords, I beg to move Amendment No. 38, and I shall speak also to

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Amendment No. 42. Amendment No. 38 is technical, removing words which are superfluous following the amendment of new Section 24D(6) of the Town and Country Planning Act 1971 in Committee. Amendment No. 42 does the same for Scotland. I beg to move.
On Question, amendment agreed to.
Baroness Nicol Baroness Nicol moved Amendment No. 39:
Page 43, line 11, leave out ("may") and insert ("shall").
The noble Baroness said: My Lords, I wish to move Amendment No. 39 and at the same time speak to Amendments Nos. 40, 41, 43, 44 and 45. Perhaps it would be helpful to your Lordships if I pointed out that Amendments Nos. 43, 44 and 45 refer to the Scottish legislation and are equivalent to Amendments Nos. 39, 40 and 41, so there, will be no need to go over the arguments twice because the wording is identical.
I shall start with Amendment No. 39; and I am afraid that I must go into a little detail with these amendments. The amendment seeks to leave out "may" and insert "shall". We believe that it must be a mandatory requirement to exclude from SPZs land in the five categories concerned: national parks; conservation areas; areas of outstanding national beauty; green belt; and sites of special scientific interest. To allow discretion as to whether they can or cannot be left out of SPZs is flying in the face of the Government's own commitments. If there is to be any real presumption against damaging any of these areas, it must be expressed very firmly in legislation.
It is interesting to note that in his press release fairly recently on the subject of green belt Mr. Waldegrave was very firm in his resolve to protect green belt. He stated so clearly. To my knowledge that is about the third time the Government have said so recently. Legislation passed at this time should reflect Mr. Waldegrave's determination and the stated determination of the Government.
I now move on to Amendment No. 40. We discussed on Second Reading the question of sites of special scientific interest which had been in existence at the time of the Wildlife and Countryside Act but were due under that Act to be renotified before they could be fully protected. Because of the shortage of cash and staff at the Nature Conservancy Council many of those sites have not been renotified. I believe that several hundred are still outstanding. So they are unprotected except by the earlier legislation to which the noble Lord, Lord Elton, referred on Second Reading.
But that legislation is not satisfactory because, as your Lordships will be aware, by its very nature a site of special scientific interest is fragile. It is quite often very small, and it is certainly irreplaceable. While the protection under that earlier legislation is being sought it would be possible, as has happened already, for SSSIs to be destroyed. The spirit of what the noble Lord, Lord Elton, said is accepted. The Government, certainly so far, have been quite firm in their resolve that SSSIs should be protected. This seems to me to be an occasion when the legislation should reflect the spirit and the letter of the assurance given by the noble Lord, Lord Elton.
The effect of this amendment is limited to the SSSIs awaiting notification at present and therefore it would not go on indefinitely being considered in relation to SPZs because it would end as soon as those SSSIs awaiting renotification had been renotified. I hope that the Minister will look kindly on this amendment because the Government's "green" reputation, new and shining as it is, will stand or fall by what they say on it.
Finally, we come to Amendment No. 41. This is, as it were, the icing on the cake. It gives a prompt and due justification for the Secretary of State to intervene with an order to exclude among other things new SSSIs from existing SPZs. It is assumed that in the process of consultation preceding the notification of a relevant SSSI discussion will have taken place between the NCC, the local planning authority and the planning sections of the Department of the Environment, with a view to excluding the new SSSI from the SPZ. I am sorry that I use all these initials; I do so for speed, though I know how irritating it can be. The powers presently available under the Bill would be, first, alteration of the SPZ by the local authority under Schedule 6(2) and, secondly, an order by the Secretary of State under Clause 24C(3). This new provision would help the process. I beg to move.
Lord Skelmersdale: My Lords, I would be the first to agree with the noble Baroness that we need to make sure, as far as we are able, that there are no loopholes which would undermine our objective of preventing SPZs from being set up in inappropriate areas. These include national parks, areas of outstanding natural beauty, green belts, conservation areas, national scenic areas and, of course, sites of special scientific interest.
First, let me assure the House that when the Bill uses the word "may" in these clauses it does so in a mandatory and not a permissive sense. That was the first point raised by the noble Baroness. Thus, where the Bill prescribes that SPZs "may not" be set up in the areas listed it means that SPZ schemes "cannot" be so established. I am advised that there is no cause for concern on that point. However, I shall take up the matter with parliamentary counsel. I assure the noble Baroness that my honourable friend Mr. Waldegrave and I work hand in glove on the green belt issues.
I assure the House that SSSIs notified under the National Parks and Access to the Countryside Act 1949 are already protected from the prospects of SPZ. The noble Baroness drew attention to this matter at Second Reading. My noble friend Lord Elton responded in a way that I regularly do and he seldom did—in a rather off-the-cuff manner. I am now advised that Section 28(13) of the Wildlife and Countryside Act 1981 contains a provision which effectively means that any 1949 Act sites remain notified until such time as they are re-notified, or possibly de-notified, under Section 28(1) of the 1981 Act. Therefore, for the purposes of stopping SPZs being set up in SSSIs, sites notified under either Act are safeguarded, albeit indirectly in the case of the 1949 Act sites. Had it not been for that advice I would gladly find this amendment acceptable. As it is there seems to be no need for it.
Finally, I confess a little confusion about the proposal to insert a new subsection making it a legal

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requirement for the Secretary of State to consider excluding SPZs from future protected areas. By definition, such cases are for the future. Future national parks, areas of outstanding natural beauty, green belts, conservation areas, national scenic areas and SSSIs are given automatic protection under the Bill. Any areas so designated, either from day one or in the future, are protected from any new SPZ.
The only problem that might occur is where one of these environmentally sensitive areas was to be extended or established and the area to be included contained an existing SPZ. Such schemes would not be automatically extinguished by new designations. It would need the Secretary of State to make an exclusion order, which has the effect of withdrawing the SPZ permission, and the Bill provides for this.
I note the amendment would simply oblige the Secretary of State to consider the desirability of using this power in these circumstances. I can assure the House that the Secretary of State would consider more carefully the desirability of making an order under these powers if an SSSI or other sensitive area was created or extended into an area covered by an SPZ. As a matter of policy and good practice such consideration would need to be given to the merits of terminating any existing SPZs in such areas. I do not think we need to legislate for that.
Your Lordships will, I hope, detect my sympathy for these amendments, but also understand my reluctance to accept them. I should like to re-assure the House that the clauses as they stand are strong enough for their purposes.
Baroness Nicol: My Lords, I am very grateful for the full reply that the Minister has given and I am encouraged particularly about "may" and "shall", which is new to me. Obviously I shall have to study very carefully what the Minister has said, but in the meantime I beg leave to withdraw Amendment No. 39.
Amendment, by leave, withdrawn.
[Amendments Nos. 40 and 41 not moved.]
Clause 25 [Simplified planning zones in Scotland]:
10.45 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 42:
Page 46, line 35, leave out ("A scheme's ceasing to have effect, or").
On Question, amendment agreed to.
[Amendments Nos. 43 to 45 not moved.]
Schedule 6 [Simplified planning zones: further provisions]:
Baroness Nicol Baroness Nicol moved Amendment No. 46:
Page 136, line 26, leave out from ("he") to end of line 21 on page 137 and insert ("shall be deemed to have submitted, at the date of the refusal or on the expiry of the period of three months, an application for outline planning permission in accordance with section 42 of this Act for any class or classes of development specified in his request to the local planning authority").
The noble Baroness said: My Lords, I think that this amendment is an improvement on the one that we put
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forward at Committee stage. It still has the aim of removing the Secretary of State's power to override the wishes of democratically elected local councils by directing authorities to make SPZ schemes against their wishes when they refuse to do so following a request from a member of the public to prepare such a scheme for their area and to substitute for this the existing procedure under Section 42 of the Town and Country Planning Act 1971 whereby a person who fails to persuade a local planning authority of the need to prepare an SPZ scheme for its area may apply for outline planning permission for the proposed development.
This amendment ensures that the local planning authority, on receipt of such an outline planning application, carefully considers the proposal and fully justifies any decision that it may make. Should it refuse to grant outline permission, the applicant has the right of appeal to the Secretary of State against the local planning authority's decision. The Secretary of State may then adjudicate in the light of the planning inspector's report.
It seems to us that this is a more logical procedure than that currently proposed in the schedule as it is based on existing planning procedures and ensures that the Minister's decision is unbiased, being based on the independent finding of the planning inspector's report. I beg to move.
Lord Skelmersdale: My Lords, while I appreciate the noble Baroness's efforts, I am afraid that I cannot see that this is an advance on her previous proposals. I am sure that in drafting these amendments she had the intention of trying to ensure that no worthwhile request from an applicant would be dismissed summarily by a local authority. Under the amendment the authority would be forced to take a second look. But I cannot see how that will help matters. What is needed is—in medical parlance—a second opinion, and that is what the Secretary of State will provide with his reserve powers. In the unlikely event of a direction being discharged, the intervention of the Secretary of State to make or alter a scheme himself will be more fruitful than an attempt to enforce the direction by an order for mandamus. I am convinced that this is overstating the problem because I think that there will be only a tiny minority of cases where this arises; for example, where an authority has, for whatever reason, overlooked development potential which would be of use to their area.
I also have some practical objections. A suggestion for an SPZ is unlikely to form suitable material for an outline- planning permission. For example, it is likely to cover a wider range of suggested land uses, which is a point to which I made reference at Committee stage. The developer, who has in mind a very specific requirement for planning permission, will probably decide anyway to apply for conventional planning permission rather than an SPZ.
This brings me to Amendment No. 47, which I take to be a "belt and braces" amendment to ensure that the Secretary of State has no reserve powers in relation to the SPZ provisions and cannot follow up any directions which he may issue to a local authority. Default powers are, of course, a standard matter in most legislation, and these are no exception. Their

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main purpose is to ensure that where an SPZ is being prepared the due processes are adhered to. For instance, the provisions contain extensive requirements for the general public to be consulted about SPZ proposals. There are other ways for the Secretary of State to ensure that these rights are not infringed; for example, if he considers that publicity and consultation on a scheme is not adequate, he can direct that it be withdrawn and readvertised. The default powers in paragraph 12 are very much a last resort and are not directly relevant to the day-to-day use of this legislation.
Amendment No. 49, as the noble Baroness said, concerns the provisions for SPZs in Scotland. It is subject to the same objections as those to Amendment No. 46. While taking away the Secretary of State's powers to issue an SPZ direction, it merely ensures that a local planning authority will consider any proposal put to it. But it will do that anyway. The amendment also requires the authority to give reasons for its refusal in writing. That is only common courtesy, and again I am sure it is something that local authorities would do anyway. This amendment is therefore unnecessary.
In conclusion, I cannot agree to any amendments such as this which take away essential back-up measures which will make an important contribution to the success of SPZs. I can see no value in a request for an SPZ scheme being treated as an application for outline planning permission. Without the back-up of the Secretary of State's power of direction, the potential developer with a genuine and sensible proposal can easily be strangled at birth. I do not think that either the noble Baroness or I would like that.
Baroness Nicol: My Lords, before the noble Lord sits down, I am puzzled by his reference to Amendment No. 49. I did not speak to Amendment No. 49 and was not intending to move it.
Lord Skelmersdale: My Lords, I am sorry. I assumed that the grouping at the beginning of the afternoon was being kept to. I was obviously wrong. I thought that the noble Baroness was speaking to Amendments Nos. 46, 47 and 49. In that case, I have covered Amendment No. 49. If any noble Lord wishes to move it, he will receive a silent response from me.
Baroness Nicol: My Lords, I am grateful to the noble Lord for that clarification. Naturally, I am disappointed although not at all surprised by the Minister's reply. We seem to spend a great deal of time trying to defend what we consider to be the vulnerability of local democracy in this legislation, but the Minister appears not to see it that way. I shall have to read carefully what he said and think again about the matter. I beg leave to withdraw Amendment No. 46.
Amendment, by leave, withdrawn.
[Amendment No. 47 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 48:
Page 143, line 43, leave out from ("procedure)") to the end and insert (", after "section" insert "24E,".").
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The noble Lord said: My Lords, this is a drafting amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 49 not moved.]
Clause 26 [Power to give assistance]:
Lord Ezra Lord Ezra moved Amendment No. 50:
Page 48, line 1, after ("incurred") insert ("or likely to be incurred").
The noble Lord said: My Lords, my purpose in moving this amendment is to draw attention to two issues. The first is the proliferation of grant systems directed towards urban renewal. Hitherto there has been a lack of clear guidelines and a protracted system of allocating money to particular schemes. Let us hope that the introduction of yet a further grant system will simplify matters and lead to moneys being made available more quickly where projects are approved.
My second purpose is more specific. It is that in a number of these projects a certain amount of up-front finance is required. If that is not forthcoming to some degree from government sources, projects can be held up and become increasingly expensive as time develops.
There was a report in the Financial Times of 13th October that Sir Nigel Broackes, the chairman of Trafalgar House, who had much to do with the docklands development, withdrew from a similar project to cover other parts of the country, known as the Phoenix Initiative, for a number of reasons, but among them was the stated reluctance of the Government to make money available up front. Clearly here is someone who has had great experience in stimulating such developments and who is concerned about the way in which allocated funds are being made available. The purpose of this simple amendment is to ensure that moneys can be made available for projects where expenditure is incurred or likely to be incurred. I beg to move.
Lord Skelmersdale: My Lords, the objective of Part III of the Bill is to provide a flexible enabling power rather than to lay down in precise detail how assistance under Clause 26 is to be given. Thus this part indicates the purposes for which assistance may be given, the types of expenditure which qualify for assistance, and the form that assistance may take. It does not seek to lay down the detailed administrative rules under which payments may be made.
The timing of grant payments is one example of how the clause as it stands provides a considerable flexibility; indeed, "elasticity" might be a better term. Consider, my Lords, the example of a project consisting of the reclamation and servicing of some land and the building of factory units. Let us suppose that this project was not commercially viable without some grant from the Secretary of State under Clause 26. It would be possible to pay grant only when the project had finally been completed. That is the basis on which many government grants have been paid in the past. While the recipient will have to arrange bridging finance, this method effectively safeguards the taxpayer, in that the grant is paid out only if the project is satisfactorily done.

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It would also be possible to pay the grant pro rata to progress with the project as a whole. Thus, at each stage the recipient gets a proportion of his expenditure reimbursed. That is the basis on which urban development grant is normally, but not invariably, paid.
Thirdly, it would be possible to pay the grant pound for pound against the initial reclamation and infrastructure costs, up to whatever amount of grant had been approved. I am told that this is called "upfront" payment; and the noble Lord referred to this. Urban development grant has occasionally been paid in this manner.
What Clause 26 as it stands does not permit and is intended not to permit is the payment of grant before—and I emphasise the word "before"—the recipient has become legally liable to incur the expenditure in respect of which the grant is being given. It is not surprising that it does not do so, because I think that eyebrows would be raised if the Government were to write out cheques in the hope that the recipient would in due course incur expenditure on urban regeneration, without being satisfied that he had in fact done so, or was legally obliged to do so.
The noble Lord will have guessed from that preamble that I am about to advise him that the effect of his amendment would merely be to empower the Secretary of State to make payments in advance of any liability of the recipient to incur expenditure. That is indeed my advice. I would add that it is not a power that my right honourable friend would wish to have. Indeed, in a world in which the Public Accounts Committee exists I doubt whether the Minister would ever wish to use such a power. I therefore hope that the noble Lord will not press his amendment.
The noble Lord spoke about a plethora of grants for this purpose. The objective of the new Part III grant, as I understand it, is to make the grant-giving power more precise and it will encompass many of the grants which have been payable up until now. If I am wrong, I shall write to the noble Lord.
Lord Ezra: My Lords, in the hope that the grant system now introduced in this legislation will be more flexible than hitherto (which I gather was the purport of the remarks of the noble Lord) and in the hope also that the provision of finances will be handled more expeditiously than hitherto, (which I believe he also said) I am ready to withdraw my amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David moved Amendment No. 51:
Page 48, line 17, at end insert—
("( ) any other matter which is requisite for the purpose of establishing or maintaining an activity providing employment".).
The noble Baroness said: My Lords, I think the Minister will not be surprised that I have returned with this amendment at Report stage because there was previously quite a lot of sympathy in this Chamber for it. I feel that there was some misunderstanding, perhaps even on the part of the Minister. The noble
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Lord suggested that I had put it in the wrong clause. However, I have looked at it carefully and I do not think I did. I think that it was in absolutely the right part of the clause.
This amendment simply extends the list of the categories of expenditure which qualify for assistance under Clause 26 to include the provision of any other form of assistance,
"requisite for the purpose of establishing or maintaining an activity providing employment".
It follows on the phrase in subsection (1) of the same clause which says, "providing employment for people", and that was introduced at Report stage in another place.
As the clause is drafted the only activities which qualify for support are the acquisition of property and various practical and physical improvements to land, premises and infrastructure. The successful regeneration of the inner cities depends on more than the physical improvement of property. It must rest on the creation of a vibrant economy which can provide employment for the people who live there.
The type of assistance envisaged under this head, which would make a significant impact on employment growth in the inner cities, includes the provision of finance to enable firms with promising projects to obtain assistance in preparing business plans, cash flow forecasts, employing specialists on production, marketing or technical matters, and limited rate or rate-free periods.
The availability of such assistance often makes all the difference between the success or failure of a business, and the benefits for the local economy are out of proportion to their financial cost. It is, in fact, a pump priming exericse.
The private sector is currently very reluctant to develop or invest in enterprises in the inner cities; and those new and indigenous firms which wish to locate or expand there, generally lack sufficient capital or the necessary expertise. The availability of this form of assistance in the inner cities would help both to increase the attractiveness of these areas as locations for new enterprises and to secure the growth of the areas' existing firms.
This amendment will ensure that the economic and physical regeneration of the inner cities proceed in tandem. Like all other assistance under these provisions of the Bill, it would be in one of the forms listed in Clause 27(2) and not by way of the purchase of debentures or share capital, which I think the Minister suspected me of proposing when I moved this amendment in Committee. I hope that with this further explanation he will feel that this is a very simple amendment which could easily be accepted. I beg to move.
11 p.m.
Lord Ezra: My Lords, I should like to support the amendment proposed by the noble Baroness because I think there is great merit in subsection (2) of Clause 26 being drawn as widely as possible. It does not necessarily commit the Secretary of State to do any of these things. It means that he can look at schemes which come within a very broad perspective in these urban areas. I think that he ought to have the freedom

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in the wording of the Bill to choose such schemes as he feels would be suitable for financing in the ways proposed.
Lord Skelmersdale: My Lords, I must confess I lost my ability to be surprised some hours ago. I observed in Committee that the following clause, now Clause 27, ruled out the classic method of doing this—the purchase of share or loan capital. I accept the point made in that debate by the noble Baroness that such finance could in theory be provided either by grants or loans, both of which are allowed by Clause 27.
I am afraid that I cannot agree that the amendment would be appropriate in this Bill. The noble Baroness recognised in the debate in Committee that Part III of the Bill is concerned with the acquisition and improvement of property and infrastructure. I would add land to that list. Indeed, in talking about the list of qualifying authorities, I said at the time:
"There is a common theme; all items concern land and buildings".
I fully accept that one of the overall objectives set out in Clause 26(1) is the provision of local employment. But the whole point of Part III is that employment and the other objectives set out in Clause 26(1) should be provided through work associated with land and buildings. The employment created can be both short-term, through the work involved in reclamation, redevelopment and so on, and long-term, through the jobs housed in the buildings or attracted to the area by its physical regeneration.
The provision of venture capital to industry is not and was not intended to be within the scope of Pat III. To include this amendment would alter the whole thrust of Part III and take it into territory already covered by statutes on assistance to industry and employment creation. It might be very exciting for the Department of the Environment to run an industrial policy in rivalry with the Department of Trade and Industry, and an enterprise policy in rivalry with the Department of Employment, but that is not a field into which my right honourable friend would wish to venture.
I therefore invite the noble Baroness to withdraw the amendment.
Baroness David: My Lords, it seems ridiculous to accept an amendment on Report in another place to insert,
"providing employment for people who live in the area",
in subsection (1) of that clause and not to accept this amendment. In fact, I confess myself thoroughly irritated by the Minister's response, but I know that I shall do no good by dividing the House at this time of night. I am very grateful to the noble Lord, Lord Ezra, for his support. I think that the Government have given a very pathetic answer, but at this stage I do not think that I have any alternative but to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 38 [Abolition of Secretary of State's power to authorise opencast working, & c]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 52:
Page 90, line 33, leave out ("to 3") and insert ("and 2").
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The noble Lord said: My Lords, I beg to move Amendment No. 52, and I shall speak also to Amendments Nos. 53 and 92. During the Committee stage, I undertook to bring forward government amendments to retain the obligation on the National Coal Board to have regard to the preservation of amenity when formulating proposals for opencast coal working and carrying out site restoration. I trust that these amendments will meet the concern of the House, and I commend them to your Lordships. I beg to move.
Baroness David: My Lords, in the absence of my noble friend Lady Nicol, I should like to welcome these amendments very much indeed. My noble friend moved amendments at the Committee stage about the opencast coal clause, and I know that she will be very relieved that this amendment has been put forward by the Government. I should like to express our gratitude.
On Question, amendment agreed to.
Schedule 8 [Opencast coal: miscellaneous amendments]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 53:
Page 156, line 17, at end insert—
("( ) The following section shall be substituted for section 3—
("Preservation of amenity.
3.—(1) Where the Board are formulating any proposals as to the working of coal by opencast operations or the carrying out of operations incidental to such working, the Board, having regard to the desirability of preserving natural beauty, of conserving flora, fauna, and geological or physiographical features of special interest, and of protecting buildings and other objects of architectural or historic interest, shall take into account any effect which the proposals would have on the natural beauty of the countryside or on any such flora, fauna, features, buildings, or objects.
(2) The provisions of the preceding subsection shall also apply, with the necessary modifications, where the Board are formulating any proposals as to the restoration of land affected by the working of coal by opencast operations or by operations incidental to such working.".").
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 54 to 59:
Page 163, line 7, after ("notice") insert ("in the prescribed form").
Page 163, line 18, leave out ("first").
Page 163, line 27, at end insert—
(" (2A) The period within which objections may be made expires when the period specified in the last publication of the notice expires; and any period specified in earlier publications is to be treated as extended accordingly.").
Page 163, line 43, at end insert ("and a copy of their notice under subsection (1) above").
Page 163, line 46, after ("way") insert ("a notice giving in the prescribed form the prescribed").
Page 164, line 24, after ("notice") insert ("in the prescribed form").
The noble Lord said: My Lords, I beg to move Amendments Nos. 54 to 59 en bloc. These are all technical amendments which enable the Secretary of State to prescribe the forms of notice that British Coal must publish to advertise their intention of applying to the Secretary of State for an order under Section 15 of the Opencast Coal Act 1958 suspending a public right of way and clarifying the period of objection to be allowed for the application for the order. Effectively, they repeat powers currently contained in Schedule 1

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to the 1958 Act, which is repealed by this Bill. I beg to move.
On Question, amendments agreed to.
Clause 39 [Listed buildings and conservation areas]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 60:
Page 91, line 20, at end insert—
(" ( ) the scope of the exception for urgent works to a listed building;").
The noble Lord said: My Lords, I beg to move Amendment No. 60, which is a technical amendment. Unfortunately, the need for a reference in Clause 39 to the amendment in Schedule 9 to Section 55(6) was overlooked when the amendment was tabled at the Committee stage. This amendment corrects the omission. I beg to move.
On Question, amendment agreed to.
The Deputy Speaker: I now call Amendment No. 61.
Lord Skelmersdale: My Lords, I seem to have lost my notes on this amendment.
The Deputy Speaker: My Lords, according to the groupings, Amendment No. 61 is to be taken with Amendments Nos. 67, 68, 71, 77 and 78.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 61:
Page 91, line 24, at end insert—
(" ( ) the extent of the exemption accorded to ecclesiastical buildings;").
The noble Lord said: My Lords, I am grateful to the noble Baroness. These amendments, which were extensively trailed in Committee, give an enabling power to make orders subject to negative resolution to restrict or exclude the operation of the exemptions from listed building control at present given by Sections 56(1) and 58(2) of the Town and Country Planning Act 1971. They implement those parts of the agreement reached with representatives of the Church of England and the Churches Main Committee over the future of the ecclesiastical exemption from listed building control, which needs statutory force.
As I said at Committee stage only two of the agreed proposals fall into this category. The first is the acceptance by the Churches Main Committee, on behalf of all churches and religious organisations which it represents other than the Church of England, of normal listed building control over the major partial demolitions of a non-Church of England church. Such churches already need consent for their total demolition. We are grateful to all the churches and organisations represented by the committee for willingly accepting this proposed curtailment of the exemption.
The intention is that consent should be required for the partial demolition of the church if it would materially affect the architectural or historic interest of the building, such as the removal of a spire, tower or cupola, or if the works were otherwise to affect the interests of the building to such an extent that its value as a listed building, or the contribution an unlisted
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church makes to the conservation area, is brought into question. The department is to have discussions with the Churches Main Committee, the Historic Buildings and Monuments Commission and the local authority associations to try to reach agreement over the way this objective should be expressed in the order.
The second item which would need statutory powers if it is to be implemented is the restriction of the exemption to what is generally considered to be the church building itself and not to ancillary buildings forming part of the church complex or within the curtilage. There are two reasons for this proposal. The first is to help define what is a major partial demolition. If the difference between major and minor is to be assessed by volume, you need to know exactly which buildings are to be included in the calculation. We need more discussions before we can be sure of the formula that will be used.
More importantly we need to look at those cases where the services are transferred to either another part of the church complex, perhaps an adjoining hall or Sunday school, or a free standing building within the curtilage, and then everything that most people think of as the church could be demolished, because under the present exemption the ecclesiastical use can be said to extend to the curtilage buildings. How this can be achieved is going to be difficult, but we hope that discussions with all the churches, the commission and the local authority associations will find an acceptable solution.
Because we made it plain that there are to be further discussions before any order is drafted, and given that we obtain the enabling power and that the final form of the order cannot be accurately forecast at present, we need flexible enabling powers which will cover any likely contingency. I should like to reiterate that it is our present intention only to use the statutory powers in respect of curtilage buildings and the partial demolition of non-Church of England churches.
I am aware of the criticism of the limited scope of the proposed changes. But, as I stressed before, we want to proceed by agreement. These proposals should be given a fair trial. Good will is needed—as I said in Committee, and the right reverend Prelate the Bishop of London agreed with me—on all sides to make them work. I hope that it will be forthcoming, and I beg to move.
Lord Kennet: My Lords, this is the first of a whole run of amendments, Nos. 61, 63, 66, 67, 68 and 69, some from the Government and some from these Benches, which are designed to rectify this or that perceived shortcoming in the present law and in the non-statutory package deal outlined by the noble Lord, Lord Skelmersdale, at Committee stage. They are hard to follow.
Can the noble Lord tell the House whether all of them are at least potentially binding on churches belonging to the Church of England and all other denominations or whether some of them are binding only on non-Church of England churches? I am sorry that this is so complicated, but if we get one answer which goes right through the run of amendments it will be of great help. Also, are they binding on those Church of England churches which have been declared redundant under the pastoral measure?

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If that is an impossible request, perhaps the noble Lord could tell us the answer to those two questions when we come to each of the amendments. For instance, he has told us that Amendment No. 61 is potentially, though not immediately, binding on the Church of England. Would it have effect with regard to redundant churches belonging to the Church of England under the pastoral measure?
Lord Skelmersdale: My Lords, I am desperately trying to look at the Marshalled List or in my notes for the main government amendment in this block. I think I am right in saying that it is Amendment No. 68. I can do no better than quote from the amendment, which refers in subsection 2(b) to the general enabling power it provides to,
"make different provision for buildings in different areas, for buildings of different religious faiths or denominations or according to the use made of the building".
In my opening remarks just now I said that this proposal was potentially very wide indeed, but I said that no order would be laid under it without further extensive consultations. I also said that it would not in any event apply to the churches of the Church of England until or unless the concordat which I announced in Committee, and which the right reverend Prelates were good enough to agree with me about, had demonstrably failed. That is the position I am in today.
On Question, amendment agreed to.
11.15 p.m.
Baroness David Baroness David moved Amendment No. 62:
Page 91, line 29, at the end insert—
("( ) the power of a local authority or the Secretary of State to carry out works reasonably necessary for the proper preservation of a listed bulding);").
The noble Baroness said: My Lords, Amendment No. 62 is a paving amendment for Amendment No. 70. These two amendments are based on the Committee stage Amendments Nos. 232 and 233. In the new version, all the criticisms made in Committee by the Minister of the earlier amendments seem to me to have been met. I shall not again recite the powers now available under Section 101 in the 1971 Act or the wider powers to be made available under the new version of Section 101 and the new Section 101 A as provided for in the Bill. It is all there in Hansard.
Suffice it to say that they provide powers in respect of urgent repairs, to quote the sections. We should think of them more as emergency repairs, but only to unoccupied listed buildings and to the unoccupied parts of partly occupied listed buildings. Not only the existing Section 115 but also my new version of subsection (1) in that section, my new Section 115A, covers the same field—listed buildings—but in that field a wider spectrum of repairs, those reasonably necessary for the proper preservation of a listed building; and in that spectrum a significantly wider range of occupancies of such buildings, be they unoccupied, partly occupied or, most important, even fully occupied.
I should perhaps clarify the position further. The Minister seems to have said of Amendments Nos. 232 and 233 in Committee that they covered unoccupied and partly occupied buildings but not occupied
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buildings, and that was incorrect. However, there is some confusion, at least in Hansard, in the middle of col. 629, for he is reported there as having spoken of Section 11A. If he was speaking of my Amendments No. 233, as I believe he was, he should have said "Section 115A". If he was speaking of the section that does not cover occupied buildings then he should have said "Section 101A".
The essence of the matter is that we are now dealing with all listed buildings and most particularly with those that are occupied. As I said in Committee, the only sanctions now available to induce recipients of repair notices made under the existing Section 115 to put their listed buildings into proper repair are the compulsory purchase provisions in Secton 114. That is a generally ineffective sanction, being inappropriate in most situations and too expensive to use except in exceptional cases.
Compulsory purchase may sometimes be the right tool but much more often it would be a sledgehammer to crack a nut. Granted, there may be some circumstances where compulsory purchase may be appropriate, for example, where there is a heritage trust waiting to buy, repair and sell on to new users. But such trusts are not to be found waiting in the wings and flush with funds.
However, the Minister said that a local authority should serve a repair notice and follow it up with a compulsory purchase order. What he failed to mention was that it would then be left with the building in its own hands and all the bills as well. The Minister said that this was what it should do if all else failed. We may well ask him what else there is to try other than polite persuasion. There is no other sanction, hence the bringing forward of this amendment.
To suggest the use of a compulsory purchse order is frankly ridiculous in many situations. Do the Government seriously suggest that local authorities should use their powers to dispossess, say, aged owners who may well have the resources but not the will to do what may be quite minor repairs, which, if they are left undone, will lead to serious defects and damages that may put the building seriously at risk?
Would the result of compulsory purchase not be that the repairs would have to be carried out at the local authority's own expense, as well as leaving the aged owners dispossessed? No wonder repair notices and compulsory purchase are so seldom used; no wonder that so many neglected buildings continue to rot. The HBMC has estimated that there are 40,000 buildings which are already listed, or shortly will be listed, at risk. This gives some measure of the size of the problem. I suggest that in the great majority of those cases compulsory purchase is inappropriate and the Minister's attempted rebuttal of the case for a new sanction falls to the ground in the great majority of cases.
A new sanction is needed but with due safeguards, and I turn to them. The first criticism raised by the Minister was that by including a reference to unlisted buildings in conservation areas the provision was enlarged to cover:
"a vast number of unlisted buildings in conservation areas".
The Minister's advisers seem to have ignored the fact that such buildings are only covered by Section 101

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only where they have been the subject of a direction under subsection (1) and that such directions can only be made by the Secretary of State.
I had not envisaged the Secretary of State ever making a vast number of such directions. To be realistic, rather than thinking in terms of a vast number of buildings drawn into the scope of repair notices, we should be thinking of the very few important but unlisted buildings in conservation areas on which such directions might just conceivably be made. However, we let the Minister off the hook and in a spirit of reasonable compromise it will be seen that the current amendment leaves out buildings subject to directions made under Section 101(1), and so that criticism, even had it been sound, cannot be levelled at the amendment now under discussion.
The noble Lord spoke of the onus of court action being on the poor owner, when it should be on the local authority. That point is well taken. Accordingly, the amendment as now drafted introduces an extra stage of entry-to-do-works procedure. A second notice has now to be served under the amendment and, after due notice and examination, this has to be confirmed by the county court before the local authority can move in to do the works.
It may be that the Minister will say that to introduce this new reference to the county court would be too onerous on the county court system and that the Lord Chancellor will not allow it at any price. But if property and privacy rights are to be safeguarded so that over-zealous local authorities are to be restrained, who better than the county court?
Granted, the reference to the court is not quite what the department seemed to favour when they consulted the national amenity societies on this very question in 1982 and on Ministers' agreement to do so at that. They then favoured just a right of appeal against the repairs notice. But, in his reply to my speech on Amendment No. 232, the Minister made it clear that he wanted the burden of proof to be not on the owner but on those seeking to do the works. And that is how the matter now stands in my amendment. If his position has been misunderstood, the Minister will doubtless put that right now, so that the appropriate amendment can be brought forward for Third Reading.
The Minister also said that the Government were extremely reluctant to allow a new right of entry—and so should we all be without the fullest safeguards. However, those are now provided in the amendment. He seemed to jib, as though some great new precedent were being set. Does he now admit that there are sound precedents such as those I quoted to him in Committee? Those were under the public health and housing Acts. They are precedents to which he made no reference in his speech in Committee. In all cases the precedents include rights of entry and recovery of costs.
Another criticism raised by the Minister was that Amendment No. 232 did not allow an owner time to do the work himself. Regrettably, the Minister's advisers seem to have missed the provision in Amendment No. 233, as was—now Amendment No. 70—under which a two months' period was
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written in for that very purpose. Obviously he would forestall action by the local authority to enter and do the repairs if he got on with them himself in that interval: so that criticism was not sound.
Even so, in effect an extra month has now been written in. The period has been extended to three months, for a month has to elapse after the service of notice under subsection (2) before the court can confirm such a notice. Obviously the court will not confirm such a notice if it is told that works are in progress.
All these details apart, the Secretary of State is required to compile lists of buildings of special architectural or historic interest. Having listed them, surely he cannot be suggesting—as he will if he rejects these amendments—either that a full quiver of powers is already provided or that he need not now provide this reasonable new sanction for local authorities' use, and his own, to make it possible to induce the reasonable repair of such listed buildings now that the inappropriateness of compulsory purchase in most situations has been drawn to notice. It is a matter of all-party concern that a real sanction, with due safeguards as are provided under the amendment, is introduced to strengthen the repairs notice procedure. I beg to move.
Lord Skelmersdale: My Lords, I realise that the noble Baroness has taken account of some of the points I made at Committee stage, and that the clause has been substantially revised. I thank her for that. I note that the scope of the powers sought has been restricted to listed buildings. I accept that the fact that the notice would have to be confirmed by the county court before the works could be carried out by the authority or Secretary of State does give more protection to the owner. However, at the risk of repeating what I said in Committee, the effect of the clauses will be to impose a potential liability on owners of listed buildings of all kinds to carry out works for the preservation of their buildings if the authority and the courts so require.
Many owners take pride and pleasure in caring for their buildings, but as the number of listed buildings increases and the types of building included become even more diverse, we must be careful not to impose onerous liabilities, not on the courts but on the owners, as otherwise people will think it is a penalty rather than a privilege to own buildings of interest. I therefore maintain my objections to the amendment.
Moreover, in the procedures suggested, there is an awkward relationship between Sections 115 and 115A. It appears that the owner is first to be served with a notice under Section 115, requiring him to carry out the work specified within two months, but before that time is up the authority or the Secretary of State may serve a notice on the owner, saying that they intend to carry out the works. It is clearly a nonsense to serve two such contradictory notices on the owner.
The clause places the duty of deciding whether the works are reasonably necessary for the proper preservation of the building on the county court—a judgment which is going to involve questions of architectural history and architecture and what are the appropriate works to be carried out on the building to

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preserve its features of interest. This type of task is more suitable for the Secretary of State. He is given the task of deciding whether the recovery of costs is reasonable in the context of their recovery after the court have given their opinion on reasonableness at an earlier stage. I understand that it is quite unsuitable to require the courts to become involved in what effectively amounts to the supervision of repair works such as envisaged by subection (5). Also it is not clear whether an important point such as the means of the applicant is a factor which the courts or the Secretary of State may take into account in exercising their respective functions.
I think these proposals need a great deal of thought before we put them on the statute book, even if I do not have the fundamental objection to the concept of the proposals which I stated originally. I therefore ask the noble Baroness to withdraw the amendment.
11.30 p.m.
Baroness David: My Lords, I am disappointed with that reply because I thought we had gone a long way to meet the objections made in Committee. The only conclusion one can draw is that Ministers are happy to see some of the occupied listed buildings deteriorating, as inevitably they must if some action is not taken. At this late stage of the day I shall say merely that I shall read what the Minister said and decide whether to come back on Third Reading with yet again an amended version of the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kennet Lord Kennet moved Amendment No. 63:
Page 91, line 34, at end insert—
("() the compulsory acquisition of listed ecclesiastical buildings in need of repair").
The noble Lord said: My Lords, this amendment goes with Amendment No. 69. What I hope they do is to bring listed churches into the same position as all other listed buildings as regards compulsory purchase. The amendment, for which I am indebted to the Association of County Councils, would make it possible for a local authority compulsorily to purchase a church in the case of a neglect of repairs on the same terms and in the same way as it can compulsorily purchase any listed building at present. It could do so at what is properly described as current use value as opposed to development value. Of course, in all listed buildings the difference is very wide between the current use value and demolition and development value of the site. I think this is probably not an ideal way to tackle the problem. It is tabled as a probing amendment.
Let me now turn to what the problem is and see whether we can find a better way. At the last stage of the Bill—and we have already referred to it this evening—those speaking for the state on the Government Front Bench and those speaking for the Church—namely, the right reverend Prelates among us today—announced and agreed to a non-statutory package deal to bring the demolition of listed churches under the influence of the state, but not under the statutory power of the state. That deal was in my opinion, and in the opinion, I think, of all of us on this
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side of the House, most satisfactory and a great step forward.
In studying the text later we have come to the conclusion that there is one loophole—perhaps loophole is too strong a word, one ragged edge at the end of the procedure which could be tidied up. It is this. The Church Commissioners undertook to abide by the ruling, decision or opinion, (call it what you will) of the Secretary of State in the case of a listed church which they wished to demolish but which any or all of the local authority, the advisory board on redundant churches or the national amenity societies thought should not be demolished. The Secretary of State would then hold an inquiry or proceed otherwise and come to an opinion which the Church would abide by so long as that opinion was that the church was to go to the Redundant Churches Fund for maintenance as a redundant church indefinitely. If, on the other hand, the Secretary of State decided that it should not go to the fund, the situation was slightly different. Now why might he decide that it should not go to the Redundant Churches Fund?
The other part of the package deal, as we all remember, was that the state is going to undertake to provide a more regular and more generous supply of money through the Redundant Churches Fund for the upkeep of redundant churches. If, in a given case, the Secretary of State and everyone else thought that a church was well worth preserving but was going to cost a great deal to restore, the money might not be found to make that possible. In that case, he would be compelled by a shortage of funds to say, "No, it cannot go in the Redundant Churches Fund". In that case it would come back to the hands of the Church Commissioners and the diocese who agree to search once more for an alternative use, but this time in co-operation with the Secretary of State. If they fail to find such a use, at the end of the day they are as free as they have always been to demolish that listed church despite everyone's opinion, including that of the Secretary of State, that it is worth preserving. That is the loophole or loose end.
The best way of halting this would be for Church and state to now agree that the concordat should be extended to cover such an unfortunate case as well. It is worth pointing out that the present arrangement—which results in freedom at the end of the day for the diocese or Church Commissioners to demolish a listed church against the will of the Secretary of State, the relevant local authority, their own advisory board on redundant churches and the national amenities societies—might in the future cause those responsible for the upkeep of a given church deliberately to let it decay. The financial incentive to do so would be very strong in the case of a large building on a valuable city site that was expensive to maintain. There are such cases already and there may well be more in the future. I submit that it is wrong to let the concordat go with an inbuilt financial incentive to the wrong solution.
There is also an inbuilt financial deterrent to the Secretary of State looking after the church under the concordat, which is the money it would take to restore it if it has been neglected. The worse the neglect has been, the more it costs to restore such a church, the greater the deterrent to the Secretary of State giving it

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to the fund and the greater the temptation to future generations of ecclesiastical landlords to demolish the church.
I repeat that this is a probing amendment. I shall hope to hear from the Minister that it is, or will be, possible to extend the concordat in order to look after this last and most unfortunate case. Having gone 95 per cent. of the way, I hope that the last 5 per cent. may prove possible. I beg to move.
The Lord Bishop of Rochester: My Lords, my understanding is that the agreement with the Government is that in such circumstances there would be further consultation with the Secretary of State before using the pastoral measure's powers to demolish. I think I am right in saying that the Minister went on to say that he proposed to make further inquiries with the intention that they should be broadened in consultation with the Church Commissioners before any actual implementation took place. I hope that the noble Lord, Lord Kennet, will feel that the concordat in fact provides what he wants.
Lord Skelmersdale: My Lords, I can confirm straight away that the right reverend Prelate has it absolutely spot on. However, I am sure that all the right reverend Prelates were as disappointed as I was to hear the noble Lord explaining his reasons for the amendment and illustrating his profound mistrust of the Church's motives when it comes to the care of its listed buildings. Of course there are times when it is very tempting for the owner of any building—not only a church—to think how much money can be made by selling the site. Many churches of all denominations have great difficulty in finding the money for repairs but most of them are remarkably successful in raising funds.
Indeed, one of the objections that was frequently raised to the repeal of the exemption was that this would make voluntary giving towards the maintenance of the church dry up. I do not accept that just because the churches are to retain a certain measure of exemption from listed building control they are going to start a campaign of deliberate neglect just to let their churches rot to the point when it is not economic to save them.
I do not therefore think that it is appropriate to remove the bar on making a compulsory purchase order on a church in use. I can see that some people might find it convenient to pass the bill for repairs on to the local authority or the Secretary of State as long as they could continue to worship in the building, but to most the idea would be an anathema. Important though it is to safeguard our listed buildings, this step is one that I would not be prepared to contemplate. I therefore ask the noble Lord to withdraw the amendment.
Lord Kennet: My Lords, I have said that this is a probing amendment. It has been disappointing to hear the right reverend Prelate the Bishop of Rochester and the Parliamentary Under-Secretary at the Department
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of the Environment merely repeat the concordat. The concordat we understood clearly last time and we understand it again now.
Of course, consultation between the Church and state in the case that we are talking about is a very different thing from the Church agreeing to accept the Secretary of State's opinion, as it has agreed to do in every other case, and this is the point on which I was hoping to get some advance. It is not a question of having a profound mistrust of the Church's motives. That, I think, was putting it a little too strongly. Possibly, the use of the word "anathema" was also putting it a little too strongly.
We have to face the fact that 70 listed churches have been demolished by the church authorities in the last 17 years. They have been demolished for many different reasons. I suspect that if there were not 70 different reasons for those 70 churches being demolished, there were probably 60 different reasons. Each case varies and it is not a question of mistrust. It is a question of fact to anybody who works in this field that there have been cases.
There is one at the moment where the site value is well-known and very large and where the church authorities have found it worth undertaking large legal costs in the evident hope of being able to get rid of the building and have the site value. To say that is not to adopt or proclaim any general profound mistrust of the Church. I must absolutely deny that.
I see that we are not going to get an advance on the concordat and we still have Amendment No. 68 dealing with the order-making powers to come. In the hope that we can get progress on that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 64 not moved.]
11.45 p.m.
Viscount Dilhorne Viscount Dilhorne moved Amendment No. 65:
Page 91, line 34, at end insert—
("( ) appeals against including a building in a list.")
The noble Viscount said: My Lords, I beg to move Amendment No. 65 and with your Lordships' permission I shall speak to Amendment No. 76. My noble friend Lord Mottistone will speak to his Amendment No. 74 and my noble friend Lord Salisbury will speak to his Amendment No. 75. I do not propose to repeat what I said at the Committee stage or many of the arguments that were well rehearsed by other noble Lords at that stage.
This amendment is simply drawn, easy to understand and generally proposes, first, that when a building is listed the Secretary of State is bound by statute to notify the owner or occupier of the fact that the building is included in his list; and, secondly, that he has to afford the owner an opportunity to make representations in writing to a person appointed for that purpose. "Representations in writing" means just that. It does not mean an appeal hearing which would be exceedingly cumbrous, very long and inevitably expensive with many people giving their views. It is a communication from the person whose building has been listed to the Secretary of State after due thought has been given to the reasons that the building has

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been listed. If there is this form of appeal the Secretary of State will be well informed and will be in full possession of the facts.
The "person appointed for the purpose", referred to in Amendment No. 76, would be an independent inspector in exactly the same way that one is appointed for normal planning appeals, but of course the submissions would be limited to written submission only. There is a record. If the Secretary of State proposes to accept this amendment there will then be written documents. If the matters go wrong there are grounds then on which to seek judicial review. There is evidence on which such an application to the court could be made. If there are just administrative arrangements, such administrative arrangements can be changed very quickly with little notice. A statutory instrument is not needed to pass them.
The general feeling of many noble Lords on this side of the House was that the existing procedures were undemocratic and unfair. It is true that under Section 54(7) of the present Act the local authority is required to pass on the decision of the Secretary of State that a building has been listed. This can take up to six months and can take in excess of six months. Sometimes it may not happen at all.
As the law now stands, there is a right of appeal, but there seemed to be a great deal of confusion at the Committee stage as to the way this right of appeal operates. It arises only on the back, so to speak, of a planning decision. You have to make a planning application; that planning application has to be refused; and then you can appeal the planning application. At the same time, one of the permitted grounds of appeal is that the listing is wrong and that the property, the building or whatever has been listed, should be delisted. It does not arise in vacuo. By that I mean there is no statutory right for anybody to appeal against the listing when the listing has been made by itself. This amendment remedies that deficiency.
It was also said at the Committee stage that listing affects property rights and creates liabilities. That is absolutely true; but looking through the speeches at the Committee stage, I do not think that the particular aspects of the liabilities were stated. Those are substantial. First of all, in the planning sphere, any change materially affecting the character of the building has to have planning permission; it is required before any type of alteration inside the building or outside the building can be made. There are no permitted development rights without that planning permission. Those two provisions are time-consuming and expensive and directly interfere with the rights of the owner or the occupier. I hasten to add that I am not against the general principle of listing—not at all—but I am against the consequences of listing without some form of recognised procedure which everybody can understand and to which everybody can resort—something more than administrative acts.
There are other liabilities. If an unoccupied building is listed the local authority, as we well know, can serve a repairs notice. That imposes a duty to repair. In this Bill unoccupied wings of dwelling-houses are included for the first time. That is a further liability imposed on owners or occupiers.
There are one or two other matters. I refer to costs of an appeal. That is a matter on which some noble Lords have expressed concern. The costs of an appeal would certainly be high if it is a hearing. That is why I have not proposed that. If there was a hearing with all the heavy preparation and costs, there would be on all occupiers and owners an inducement perhaps to try to appeal. It would be an inducement and they might feel it could prejudice subsequent owners if they did not take advantage of it. They might prejudice them by taking advantage of it, but there would be an inducement to appeal.
If there are written submissions from the owner or the occupier such a temptation is reduced. The costs of that are not going to be very heavy. During the Committee stage my noble friend on the Front Bench listed the number of appeals, I believe proposing an argument slightly the converse of the one I am now propounding. It seemed to me that it was something of a two-edged weapon because the cost would not be great.
Further concern has been expressed about the potential damage that could be inflicted on buildings at this time if there is a notification. This amendment proposes that the Minister should list and as a consequence of listing, as part of the package—to use a present day term—include notification and a right to appeal in that way.
This amendment attempts to recognise all the difficulties and all the rights while giving owners rights to contest the building listing promptly. The costs of having to keep the building in repair are great. At present these are imposed by administrative action with little recourse to anybody other than the department. The department sits as judge and jury in its own case. Unless there is legislation of the kind proposed by this amendment what one is left with, as I have said, are such acts. Therefore I urge that this amendment be accepted by my noble friend on the Front Bench and by the Government. I beg to move.
Lord Mottistone: My Lords, I should like to follow on from my noble friend and speak to my Amendment No. 74. I make it clear that I am backing my noble friend's Amendment No. 76 in preference to this one. As your Lordships know, I am advised by the CBI and I shall be putting the view of industry in relation to this point.
The law on listing is concerned purely with the architectural and historical interest of buildings. Members of the CBI have a particular concern to maintain and develop a competitive economy; and there is a contrast there which is fundamental to this. It is a contrast which represents in the case of industry what is the underpinning of the wealth of this country with which these buildings can be preserved.
New products and new techniques demand constant changes in the form and use of buildings. In normal circumstances, and especially in a large industrial site, these changes can often be made within the provisions of the general development order without even the need to apply for specific planning permission. But the listing of a building, often in a strategic location on an industrial site, creates extensive delay and may prejudice redevelopment to the grave financial

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disadvantage of the company and possibly to the employment disadvantage of the locality.
Perhaps I may give your Lordships three examples of what happens. There is a company called Freemans in Clapham Road, Stockwell, which planned to redevelop its site, which it urgently needed for new office building. In March 1984 it applied for listed building consent for the demolition of a decrepit house. Seventeen months later, in August 1985, consent was refused, and so the company appealed. Fourteen months later, in late 1986, the appeal is being heard. The cost to date is £235,000. If the appeal fails, the additional costs will be in the order of £100,000 to reinstate a house of little value on the open market, as well as the costs of redeployment to Peterborough and loss of employment in Lambeth, whose council wants Freemans to stay. That is the consequence of listing a building—and there is no argument about the part of the building which faces the public.
Another example is the Birmingham Mint, which supplies coins overseas and operates in a very competitive area. In July 1982 its building was listed. In June 1983 the building was held to include the whole of the 1860 building, which included a courtyard that had in fact been lost in a maze of extensions and alterations over the many years between 1860 and now. The company is willing to preserve the front offices and facade, which alone are visible to the general public, but wishes to create modern factory space behind. The local authorities wish to see the courtyard buildings restored to their original form if any alterations are undertaken, and that is a totally uneconomic proposition for the company, which I remind your Lordships is in an international, very competitive market. The result is patchwork repairs, redevelopment elsewhere and ultimate closure, with a loss to local industry and local employment and all that goes with it.
When my noble friend the Minister was giving his reply to Amendment No. 51, I noted that the kind of things of which I am talking and the long delays I mentioned were working against the purpose of Part III of this Bill, which is seeking to enable urban districts to be refinanced and helped. It is all very well to list buildings which are special or unique and which are one example of several, but in this country we do not want a lot of ancient buildings left standing just because they happened to be nice looking at the time. It is not right to waste space which should be used for industrial development, prospering and earning a living for this country in the world markets.
My third example is that of a major company which must remain anonymous because an appeal is pending. It illustrates the interconnecting hurdles of ordinary planning and special listed building controls. The firm concerned has a major redevelopment plan. In August 1985 a 1930s office block on the site—I was 10 years old in 1930, and the building is not ancient—was listed just where the highways authority had insisted that the new development should include a new access road. The January 1986 planning application was ignored for nine months. The company appealed in September against "deemed
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refusal" and does not expect its appeal to be heard until the turn of the year.
Planning permission is a desirable argument to have when seeking consent to the demolition of a listed building. That is the next hurdle. This provision will cause delay. It is a waste of money and a waste of an opportunity to manufacture goods for us.
The code of practice for resurvey teams, which I have had the privilege of seeing, while an improvement on previous practices for enlightening persons or companies that listing is under consideration, does nothing to achieve the official notification of listing approval which is what my noble friend's amendment seeks. It does nothing to provide a right of appeal, such as my noble friend's amendment seeks, and it does nothing to obviate the appalling commercial penalties which my three examples reveal.
Amendment No. 76 would allow a company to put forward the need to develop a site without harm to the public facade of the building, and would give the company the opportunity to develop that part of its site which will not be visible to anybody else. I hope that my noble friend will take his amendment to a Division if my noble friend does not give us a satisfactory answer.
I had occasion to write to my noble friend and say that the discussions that took place during the summer with the CBI and the CLA were, in the CBI's opinion, not handled in the normal way. There was no real discussion and no working towards a solution to satisfy both sides. The CBI's views were not answered at the appropriate time. The whole summer was wasted on this matter. I hope that it was not wasted on purpose. I strongly support my noble friend's amendment.
12 midnight
The Marquess of Salisbury: My Lords, I support the amendment moved by my noble friend Lord Dilhorne. I speak also to my amendment, Amendment No. 75. I do not intend to cover the ground covered by both noble Lords who have just spoken or to repeat what I said on Second Reading and in Committee.
I want to emphasise what seems to me to be an important part of what is perhaps a minor subject. What is happening under this Bill, and what has happened before, is that an owner can be subjected to an order to maintain his property, but he has no right of appeal. The beginning of the process is the listing of the building. It is important that an owner should be able to make his feelings known at that point.
As was pointed out in Committee, the owner is probably the person who knows most about the building and who can give a great deal of help on whether the building is worth listing. The nub of the matter is the cost and the onerous conditions that can be placed on an owner. I note that in Committee the Church did a deal with the Government by which financial matters can be considered in relation to an application for demolition. So far as I know, that does not apply to secular buildings. A new principle seems to have been established and it should be extended to secular buildings.

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It is important that the owner should have the power to resist listing, because he will often have to spend a great deal of money. He can be ordered to do so. The local authority can enter the building. The owner has no rights in the matter. When he was at the ministry the noble Lord, Lord Elton, wrote to me saying that although the ministry was responsible for listing it had no power or authority to give grants. But it did not prevent it taking its pound of flesh—if I may put it that way—by ensuring that VAT was raised on the maintenance of the building. It seems to me that it got out of any obligations, but it still scored heavily in the process.
These are all very important issues for the owner. I hope that we may get some support if—as I hope he will—my noble friend takes this to a Division.
Lady Saltoun of Abernethy: My Lords, I should like to support the noble Lord, Lord Mottistone, the noble Viscount, Lord Dilhorne, and the noble Marquess, Lord Salisbury, in this amendment for the following reason. If one is the owner of a listed building one may be, and probably will be, obliged in the event of fire or other disaster to reinstate or repair it. Therefore owners of such buildings have to insure against those contingencies. It seems to me only right that the owner should be both informed of the listing, and given an opportunity to protest against it should it be unfair or wrongly listed for any reason. I therefore support this amendment.
The Earl of Halsbury: My Lords, I rise to support the noble Viscount, Lord Dilhorne, the noble Lord, Lord Mottistone, and the noble Marquess, Lord Salisbury, on this amendment. I think that it is against the principles of natural justice that a person on whom an obligation is placed should not be given the right of reply to it. I very much support what my noble friend Lady Saltoun has said. I imagine a situation in which a mere bureaucrat could turn to the noble Duke, the Duke of Northumberland, and say, "You must accept the obligation to restore the Robert Adam decorations in Syon House", in the event of a fire which damaged them. For a mere bureaucrat to reschedule a house as a work of art which, with no right of reply, the noble Duke has to insure against the hazards of fire, seems to be absolutely and completely wrong. I shall follow the noble Viscount, Lord Dilhorne, into the Division Lobby if he cares to divide the House.
I would hope that on Third Reading of the Bill we may possibly consider an amendment in which the owner and occupier could be coupled possibly to an intermediate lessor, but I realise the difficulties of drafting this and I must leave this problem to the noble Viscount who is responsible for the amendment. In the meantime, I can only assure the noble Viscount that he has my support.
Viscount Falmouth: My Lords, I am full of sympathy with the amendment of the noble Viscount and its purpose—to give some right of appeal in some way or other against the listing of a building.
I had prepared some notes but I shall not weary your Lordships with a speech at this time of the evening. I have an interest in listed buildings, owning many myself. My noble friend quoted a judgment of Lord
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Justice Lawton, who criticised the history of a listed building in some particular case. I am going to go back much further in history and quote a well-known judgment of about 86 years ago in a case dealing with metropolitan ratings, not with listed buildings—they did not exist in those days.
Mr. Justice Bowen, a very well known judge at that time, said this:
"In a free country the very essence"—
this is dealing with rating appeals—
"of such a system must be that there should be an appeal to somebody who can say whether these officers are doing what is just. If no appeal were possible I have no hesitation in saying that this would not be a desirable country to live in where every parochial officer might do as he liked in this matter. It is quite true that there is enough difficulty in appealing as it is: but if there is to be no appeal at all possible, this system would be intolerable. Therefore it is of the essence, the pivot of the system, that there should be a right of appeal."
Those are words of a long time ago dealing with taxation. Here we are dealing with the listing of buildings. The subject matter of those two points is different, but the principle of appeal is the same. The subject should not be denied the right of appeal.
Lord Kennet: My Lords, I think the noble Lord is losing sight of the origin of the system. It arose during the Second World War when we were losing much of our architectural heritage at the hands of Hitler. After the end of the war, it looked as though we were going to go on losing it at the hands of developers and neglectful landlords and owners. The system was thereby introduced.
Perhaps I may declare an interest. Unlike all noble Lords who have spoken so far, with one exception, I declare an interest. I have been perfectly happy that the factual question of whether or not they are of architectural and historical interest should be settled by a mere bureaucrat; and an expert bureaucrat is quite good at that. I do not think it necessary that my right to address a letter to the Secretary of State should be given statutory recognition.
What a thin end of a wedge! In time, would this not result in nobody being permitted to write to the Secretary of State about a matter of fact, unless his right to do so was enshrined in an Act of Parliament? What kind of precedent is this? Communication is free. I have written to the Secretary of State to point out errors. He has written back, sometimes denying them, sometimes admitting them, and the list has been adjusted accordingly. I believe this is the common experience of the now 240,000 listed building owners in the country, over the past 40 years. I see no justification for changing statute law after two generations of successful experience.
Lord Montagu of Beaulieu: My Lords, I do not intend to repeat the arguments I set out at Committee stage against the need for a formal appeals procedure against listing. However, as chairman of English Heritage, whose duty it is to advise the Secretary of State on listing, I remain convinced of the validity of those arguments. I should like to reassure the House that the system is operating conscientiously and fairly, and provides adequate safeguards for aggrieved owners and occupiers. However, I admit that aggravation may have been caused in one or two cases in the past.

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Perhaps I may give my noble friend some facts. The present situation is that without any laborious inquiries or appeals, in the past year 707 buildings have been removed from listing and 36 appeals have been upheld.
I listened with interest to the speech of my noble friend Lord Mottistone about factories. However, I believe he was talking about the problem of listed building consent, rather than the subject of appeals against listing.
The present resurvey is leading to the addition of a substantial number of historic buildings to the statutory lists, but only a very small number of owners ask for their buildings to be reassessed and removed from the lists. In this day and age, we have to take some notice of industrial archaeology; that must be our duty. After all, Ironbridge is one of the greatest international choices of churches today, and where would we be if it did not exist?
As the Minister stated at Committee stage, there were some 3,000 such appeals last year, the great majority of which did not lead to any revision of the initial decisions. Nevertheless, this informal appeals procedure is conducted carefully and thoroughly, involving, for example, a re-examination of the case by a more senior inspector of English Heritage. We are willing to look at ways in which the openness of this informal procedure could be improved.
I should like to underline the paucity of complaints and criticisms, especially when measured against the size of the listing programme. Many of the complaints we receive are from owners who ask why their buildings have not been listed. It is widely acknowledged that owners derive contentment and pleasure from the knowledge that they live in a protected historic building, and to judge from the property advertisements it is not foreseen as a financial burden. Owners and occupiers also benefit from the VAT regulations, which look favourably upon listed buildings. In my estimation, the demand to have buildings listed is greater than the demand to have them de-listed.
However, as the Minister explained to the Committee last week, neither the department nor English Heritage is complacent about the operation of the listing system. We have responded positively to the criticisms of the CBI and the CLA by making a number of improvements in the administration and presentation of the system. We have promulgated a code of practice for fieldworkers, which I think that several noble Lords have seen today, and in the last few days the Chief Inspector of Ancient Monuments has reminded all fieldworkers of the main features of the code. Copies of his letter and the code are available in the Printed Paper Office for those noble Lords who are interested.
In accordance with the code, great efforts are made to inform local people about the process and implications of listing before fieldworkers begin to operate in an area. As the Minister explained in Committee, once a listing has been made the department sends an immediate formal letter to the owner notifying him of the fact, and this will in future explain the listing legislation and his right to ask for the listing to be reconsidered.
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We believe that the listing procedure, with the benefit of the above improvements, is fair, accountable and open. A formal appeals system would be bound to add to the cost and delay of the system without, I submit, any palpable effect on its result.
I recognise that the noble Marquess, Lord Salisbury, has tabled a new amendment which would introduce a building preservation notice-type procedure into listing. I am glad that the noble Marquess has dropped his earlier demand for a formal right of appeal, but I still see difficulties with his amendment. A building preservation notice-type procedure would introduce additional steps into listing for all properties and increase the administrative burden.
I hope noble Lords agree that I have sought to show that very few owners object to the listing and there is a satisfactory method of dealing with these cases. In some ways I believe that these amendments are a very large sledgehammer to crack a very small nut. However, basically in the last 40 years the listing procedure has resulted in the wonderful creation of historic buildings in this country which is the envy of the world. I should not like to see anything which would destroy that.
12.15 a.m.
Lord Elton: My Lords, I had not intended to intervene in the proceedings on this Bill at all. My noble friend Lord Skelmersdale now has the responsibility and has already demonstrated his considerable ability in managing the Bill. I do not want to interfere in any way, but, having been referred to in this debate, I wish to place before your Lordships what I perceive is the pattern within which this argument is taking place.
On the one hand, there is the planning system, with its apparatus of appeals to ensure that justice is always done. My noble friend Lord Mottistone has pointed out that it may be a laborious process and it has its expenses, but it is not one with which we can dispense. On the other hand, we have the listing procedure which, as the noble Lord, Lord Kennet, pointed out, was instigated in order to protect a diminishing stock of valuable property of a particular character which could not be replaced. The character was its historic or architectural value. The purpose of listing is simply to place a label on a building which is of such historic or architectural value that that value should be weighed against other considerations at the planning stage if it is wished to alter it.
What is proposed in these amendments in various ways is to introduce an appeal system at the initial stage of listing in anticipation of the appeal system operating at the latter stage—the planning stage. This must in some sense be a duplication. I recognise—and I recognised when I wrote the letter which my noble friend Lord Salisbury quoted—a feeling, which was eloquently referred to by the noble Earl, Lord Halsbury, that there must be an appeal against a wrong decision to list. Such an appeal already exists. My noble friend Lord Montagu of Beaulieu has already told your Lordships how frequently it operates. It operates swiftly and without expense.
I ask your Lordships to compare that with the system at the planning stage, which it is now proposed

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in some sense to duplicate, which, as my noble friend Lord Mottistone has said, is expensive, cumbrous, and slow. It seems to me that the department offers and supplies an efficient and just system, and I hope your Lordships will not press my noble friend too hard to add to the expense and repetitiveness of this process. Beyond that I leave it to his efficient hands to conduct the argument, and I hope not to intervene again in the process of this Bill.
Lord Mottistone: My Lords, before my noble friend sits down, would he not agree that if a factory is not listed, it does not have to be subjected to the complicated planning appeals because the general development order will deal with its problems? Therefore, if it is spared being listed, it is going to be spared the delays of which I gave examples.
Lord Elton: My Lords, I thought I made it clear that the listing process is a trigger for the latter processes. But if my noble friend's managing director, or chairman of directors, felt that the listing was unjust, he had but to write to my noble friend to have his reasons considered. In many cases the reasons prevail over the recommendation of the inspector and the building is struck off the list. That is much quicker than going to the High Court.
Lord Margadale: My Lords, it is very late and I want to say only a few words. I agree with the first three noble Lords who spoke, and in particular the speech—if I may say so without decrying the others—of the noble Viscount, Lord Dilhorne, potted the situation better than any other. The main trouble—and I am afraid I must disagree with the noble Lord, Lord Montagu, in what he said—is that the way listing is done upsets people to start off with.
If somebody snoops around a garden and the owner is not even told about it, and they do not ask either the owner or anybody in the village about it, they get it all wrong. This must be expensive. In my case, as I said earlier in the debate, a lot of people were sent down from Yorkshire to go over a property in Wiltshire, which is quite ridiculous.
Lord Skelmersdale: My Lords, I am grateful to my noble friends for putting down these amendments. They cover matters that were touched on in Committee and which I undertook to consider in some depth. I must add that I have also spoken to my right honourable friend the Secretary of State about them on no less than three occasions. I am glad therefore to be able to report back on my researches into the difficult subject of how we should control the adaptation and demolition of our finest buildings.
This method of control, my Lords, is peculiarly British, and up to the Second Reading of this Bill had not seriously been questioned by anyone. I might add that it is the envy of many other nations whose marking and protection of their built heritage is considerably inferior to ours. Let me therefore describe very briefly the arrangements that have been built up ever since 1947 when the listing sytem got under way.
In the first instance buildings are inspected by the Historic Buildings and Monuments Commission and
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by their agents in local authorities and selected private architectural practices. They are architectural historians, and they make recommendations to the Secretary of State about the buildings they consider listable. If he accepts this advice he is under a statutory duty to list the buildings in question.
I must emphasise to the House that listing is not conducted as a matter of whim; the fieldwork is carried out by reference to a published set of criteria by experts, who report to the Secretary of State. He is legally bound to list those buildings he considers to be of special architectural or historic interest. It is in this context that I believe we must view my noble friends' wish to institute a whole new parallel system. Quite simply, the grounds for making an appeal are very limited. It is not a question of judgment or interpretation of a structure or local plan, as is the case in a planning appeal. It is a question of fact that has to be decided and can be decided without recourse to a full-blown appeals mechanism. I accept that there must always be an element of subjective judgment in the selection of buildings: but in practice, we find that appeals against listing are mostly based on matters of fact rather than interpretation. I am not saying that we cannot improve the administration of our listing system. The overwhelming majority of people are perfectly happy to have their properties listed—a point that has been made this evening—in the case of householders not surprisingly, as it tends to enhance property values. But there are some who are less happy and whose feelings have been well expressed by my noble friend this evening. It is to those owners that my right honourable friend the Secretary of State and I have been directing our attention in recent months.
As a result of representations made to us, chiefly but not entirely by the Country Landowners Association and the CBI, we have prepared what I believe will turn out to be a much better administrative system. It was, for example, clearly unsatisfactory that the department's letter informally notifying owners of a listing should in some cases have come through the letter box like a bolt from the blue without explaining in sufficient detail what listing was and what it meant for the householder. This letter referred rather stiffly to the fact that the Secretary of State for the Environment had,
"authorised a survey of the area with the object of revising the statutory list of buildings of special architectural or historic interest."
The owner was informed from on high that,
"the above-named building has proved to be of the necessary quality and has today been included in the statutory list".
This rather wooden letter was followed by an even more legalistic statutory notice of listing from the local authority. We have corrected this.
We now have, in the phrase that my noble friend Lord Mottistone used in the jargon, a "user friendly" letter written in plain English and accompanied by a helpful guide to listing legislation, which was previously sent to the owner by the local authority some months after listing had taken effect. We are going to look again at the guide with the object of providing something even more attractive and useful to the owner.
The second action we have taken is to publicise our informal appeals procedure against listing. As I have

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explained to the House, the grounds for such an appeal are limited to matters of architectural or historical fact. We now refer to this right in the letter we send to owners and in the accompanying guide. And we are issuing a guidance note, which we have discussed with the CBI and the CLA, which explains to potential appellants the sort of evidence they will need to give. We have no wish to be secretive about the listing system. The guidance note will explain in some detail and in layman's language what the listing criteria are and how they apply to individual buildngs. It will also explain that list descriptions of individual properties can be obtained from the local planning authority or on request from my department.
The third action we have taken is to issue a code of conduct for resurvey fieldworkers. That document was also discussed with the CBI and the CLA and is available to any noble Lord who cares to ask me for a copy. I am sorry if my noble friend Lord Mottistone is aggrieved that we felt unable to take all the CBI's points on board. But I do not, as I said in Committee, regard the discussion on this document as yet finished. My feeling is that we have not yet got the code quite right, and I shall be happy to have the comments of any noble Lord on how we might improve it. The code is mindful of the feelings many property owners have at the thought that a fieldworker has been trespassing on their land. The code tells fieldworkers:
"Make yourself known to the owner and occupier of the property you are inspecting"—
a point that will attract my noble friend Lord Margadale.
This is not practicable in every case: some owners are rarely at home in working hours. Some less than scrupulous owners would demolish a building if they thought it likely to be listed. But as a general rule, we feel it can only be helpful for owners and fieldworkers to speak to one another; and where entry on private land is required, we tell the fieldworker specifically—and again I quote:
"Do not trespass on private property and always seek an owner's permission before going inside a building".
If an owner says that it is an inconvenient time to inspect the building, the fieldworker must offer to make an alternative appointment and he is told "Always carry your identity card".
I have considered the amendments proposed by my noble friends Lord Mottistone, Lord Salisbury and Lord Dilhorne and I am afraid I cannot accept them. The amendment from my noble friend Lord Mottistone seeks to answer the technical objections that were raised at Committee stage to a similar set of proposals from my noble friend Lord Salisbury. But I must tell my noble friend that his attempt to link provisional listing to the powers of a building preservation notice is still unsatisfactory. The fact is that service of a provisional listing notice by recorded delivery would still not help in those cases where we have to list very urgently—sometimes within minutes of demolition starting, sometimes, alas, even when it has begun. It would not have saved the Firestone factory, which was demolished just ahead of its listing, over a Bank Holiday.
Moreover, by linking provisional listing to a building preservation notice, my noble friend would
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give the department a maximum of six months in which to decide an appeal. This would be fine for the majority of cases, but what if the matters of fact were complex and controversial? What if the owner chose not to lodge his appeal until the fifth month and the 29th day? I fear we should be out of time and that demolition could ensue.
My noble friend Lord Salisbury has also proposed a provisional listing system linked to the power of a building preservation notice. That is open to the objections I have already outlisted. In addition he has suggested that such a notice must be served before an inspector may enter land to look at a building. As I said at Committee stage, that is putting the listing cart before the inspection horse. It means a lot of owners would find their properties needlessly subjected to listed-building control while an inspector decided whether they should be permanently listed. My statutory advisers in the Historic Buildings and Monuments Commission tell me that about 20 per cent. of the buildings they inspect closely turn out to be not listable. That means 5,000 or so owners a year would be subjected to listed building control only to be told subsequently that their properties were not listable. That seems to me to be an infringement of justice.
I turn to my noble friend Lord Dilhorne. He, even with all his expertise, confused the non-statutory right of appeal on being listed in the first place with a planning inquiry which accompanies listed-building consent. That is required when the owner of a listed building wants to change it in a material way. My noble friend Lord Elton pointed to this fact and I am grateful to him for it.
My noble friend Lord Dilhorne proposed a right of appeal by means of written representations once a listing has taken place. That is exactly the way in which our non-statutory appeals system works now; and if my noble friend will forgive my saying so, it works without any procedural rules or legal framework, which I believe might actually put off some appellants. Even so, I must try my noble friend's patience with some statistics. Last year, my department listed 23,000 buildings. There were three dozen appeals against listing. Five were successful. This does not signal to me the need to construct a new appeals system.
Lest I confuse anyone, my noble friend Lord Montagu also produced some figures and his figures reflect the total numbers of buildings de-listed, including buildings no longer regarded as listable because of works carried out to them subsequently. My figures reflect the numbers of buildings de-listed simply because the fieldworker got his facts wrong—which is the case that I understood my noble friends were interested in. In either event, both sets of figures rather suggest that our present procedures will be sufficient to cover the position.
I think we also want to ensure that an inspection on appeal is conducted by a genuine second opinion, preferably of senior rank. I should even be prepared to involve officials and, where occasion demanded, Ministers in defending their decisions openly. I am all in favour of debate. My right honourable friend has asked me to say that our informal procedures can no

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doubt be improved still further and that he is happy to consult my noble friends on how this can be achieved.
I believe that the present system has worked in general very well over the past 40 years and that the procedural changes we have introduced over the past year should be given a chance to prove themselves over the next two years or so. I am loath to introduce expensive new statutory procedures which I believe the facts show to be unnecessary.
I think we must get the problems which have been outlined today into perspective—a point made by the noble Lord, Lord Kennet. Listing alone places very little on an owner by way of obligation. It is a register. It says, "This building is special and the case for its conservation must be examined before it is demolished or altered."
I took very much to heart the remarks of my noble friend Lord Mottistone this evening. I am sorry if he feels that industrial development is endangered by listing. The listed building consent procedure exists to weigh in the balance the interests of conservation and redevelopment. It is important that old buildings should be kept in use wherever possible, and it is not my department's intention—it never has been—that they should be fossilised. I hope my noble friend will acknowledge that the Government are committed to lifting the administrative burden from industry; where constraints such as the listed building consent procedure exist, they do so for a purpose. It is no part of our policy to constrain industry unnecessarily. My noble friend will realise that I am unable to comment on individual cases that have to come to the Secretary of State or which may do so. We are making every endeavour to speed up the planning appeals system, and that will involve appeals on listed building consent cases as well.
My noble friend has not advanced a case against original listing but only against the consent system; and I must advise him that one can appeal against the failure of the local planning authority to give a decision within eight weeks of the date of the receipt of the application. There is no need to wait for 14 months; but I think it would be unreasonable if I were to comment any further on that particular case.
While I am talking about the consent procedure, I should advise my noble friend Lord Salisbury that financial considerations are taken into account in the secular case where listed building consent is sought. The authority for this statement is in Circular 23/77, paragraph 63(c).
With all that I have referred to and all that is going on my right honourable friend is prepared to investigate to see whether we can improve the system in a non-statutory way. I must urge the House to reject the amendments. I shall, as part of my ministerial responsibilities, keep the operation of our listing system under continuous review, and I shall urge my officials to talk to all those groups who feel they have an interest in listing. But, having looked at the evidence closely since the Committee stage, I can find no case for amending the present legislation.
Viscount Dilhorne: My Lords, in view of the lateness of the hour I shall make a genuine effort to be as brief as possible; but I want to deal with the points my noble
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friend the Minister has raised. The first point I wish to make is that change is obviously needed; my noble friend has said so. It is his proposals for this change that my amendment disagrees with. But of course I should like—I should have done this earlier—to thank my noble friends and other noble Lords for the support they have given me over this amendment, and also to thank other noble Lords who have not given me their support for the particular vigour with which they have presented their views.
There are two particularly glaring points, two mistakes, made by my noble friend Lord Elton and in respect of which my noble friend the Minister has agreed that I have made the mistake. I would, with great respect, totally disagree. To say that delisting, as I understood my noble friends to say, is an appeal is an abuse of language. It is not a statutory appeal. What I have said is absolutely accurate. There is an appeal, but it is triggered by the planning notice. There are no procedures laid down for what is loosely termed the appeal to the Secretary of State. That is just a view taken by the Secretary of State to delist a building.
It is very encouraging to hear that there is now going to be a code of practice, but before one shouts with joy or expresses great cheer, there are a number of questions that need to be asked about it. What would happen if there was non-compliance with the code of practice? What rights does an owner or an occupier have if that is not complied with? What guarantee does he have that it will be complied with?
A lot was made of the likely expense that would be incurred in having a written appeal. That written appeal acts as a safety valve, a safeguard. If one is content with the listing, it will not be invoked. It is there to be invoked only if things go wrong and one does not get satisfaction. Nothing that my noble friend the Minister has said—I am very disappointed about it—represents anything more than a series of administrative palliatives to owners and occupiers; there is nothing of substance. It would be so easy to put the proposed wording of my amendment into the Bill and enact it. It would not cost an immense amount. The appeal—and it would be a genuine appeal with procedures laid down that are already hallowed and established—would be brought by the person whose property had been listed. He would not bring that appeal unless there were very good grounds, because there would be the inevitable incurring of expense, though it would not be anything like as heavy as the expense that one would incur in a hearing. It would be quickly done because it would be part of the package that I have proposed.
It is not just a question of saying that, because these things have worked, we should not have this right. The right must be there in order to prevent things that have gone wrong from going wrong again—natural justice, my Lords.
There is one further point that I wish to add. I understood that my noble friend the Minister said that the detailed reasons for listing under his procedure would be given by the local authority. That seems to me to be very strange. It is the Secretary of State who lists. It is he who has the authority for it. It seems strange that he should delegate it to the local authority to give the reasons for the decisions that he has made.

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I should have thought that there would have been some cost savings, if that is of such concern, in the Secretary of State giving the reasons directly himself.
I have said enough. I said that I would be brief. My feeling is that I should like to test the opinion of the House on Amendment No. 65, which I have taken with Amendment No. 76.
12.45 a.m.
On Question, Whether the said amendment (No. 65) shall be agreed to?
Their Lordships divided: Contents, 14; Not-Contents, 35.

DIVISION NO. 4

CONTENTS

Congleton, L.

Margadale, L.

De La Warr, E.

Monk-Bretton, L.

De L'Isle, V.

Monson, L.

Dilhorne, V. [Teller.]

Mottistone, L.

Falmouth, V.

Pender, L.

Forester, L.

Salisbury, M. [Teller.]

Halsbury, E.

Saltoun of Abernethy, Ly.

NOT-CONTENTS

Beaverbrook, L.

Hooper, B.

Brabazon of Tara, L.

Kennet, L.

Brougham and Vaux, L.

Kimball, L.

Caithness, E.

London, Bp.

Cameron of Lochbroom, L.

Long, V.

Carnock, L.

Mackie of Benshie, L.

Chichester, Bp.

Montagu of Beaulieu, L.

Colville of Culross, V.

Newcastle, Bp.

Craigmyle, L.

Nicol, B.

David, B.

Pitt of Hampstead, L.

Davidson, V. [Teller.]

Ponsonby of Shulbrede, L.

Denham, L. [Teller.]

Rochester, Bp.

Elliot of Morpeth, L.

Sandford, L.

Elton, L.

Skelmersdale, L.

Elystan-Morgan, L.

Stedman, B.

Glenarthur, L.

Trumpington, B.

Hesketh, L.

Whitelaw, V.

Hives, L.

Resolved in the negative, and amendment disagreed to accordingly.
12.52 a.m.
Lord Kennet Lord Kennet moved Amendment No. 66:
After Clause 39 insert the following new clause:
("Repeal of s. 2 Redundant Churches etc Act 1969
—Section 2 of the Redundant Churches and Other Religious Buildings Act 1969 is hereby repealed.")
The noble Lord said: My Lords, this amendment would have the effect of bringing redundant churches of the Church of England under the necessity of having listed building consent in the case of demolition, just like all other listed buildings in the country. We put it down at the Committee stage of this Bill in the hope that it would help to produce a non-statutory agreement between Church and state. Whether or not it did I do not know, but a non-statutory agreement there was which for, as I said just now, 95 per cent. of the way is satisfactory. Five per cent. of churches remain uncovered by the non-statutory agreement and they are the most vulnerable ones, because they are the big and expensive ones.
We put the amendment down again at this stage in the hope that its reappearance might just facilitate the extension of the non-statutory agreement—the so-called concordat—to take in the last 5 per cent., so that all listed churches would now be, one way or another, subject to the opinion or the assent of the listed building process as embodied in the Secretary of State.
I believe I am right in saying that there are present in the House today men who could if they wished, even at this late stage, just look at each other, nod and extend the system to cover all the churches in question. That, I submit, would be a much fairer start, a much better start and a more generous and wholehearted start for the new system than the rather niggling exception which is so far facing us. I beg to move.
Lord Skelmersdale: My Lords, the ink is scarcely dry on the non-statutory agreement which I announced both at Committee and earlier this evening; or was it yesterday?—I am not quite sure. I do not think it is right that I should break it unilaterally at the Dispatch Box.
I am fully aware that the non-statutory agreement is only 95 per cent. of what the noble Lord, Lord Kennet, would like. I referred in my reply earlier to subsection (2)(b) of new Section 58AA in Amendment No. 68. I pointed out that that subsection, if it is approved by the House, will make different provision for buildings in different areas for buildings of different religious faiths or denominations or according to the use made of the buildings. I pointed out that this is a very wide enabling power and that no part of it can be brought in without the negative order which the amendment also proposes and against which any noble Lord has a statutory right to pray if he so wishes. I also made it perfectly clear that the Government had no present intention of producing a negative order to lay before either House of Parliament which would cover the Church of England.
As the ink is scarcely dry on the non-statutory agreement, and as I am not one for strangling babies at birth, I must reject the noble Lord's amendment.
Lord Kennet: My Lords, the noble Lord is muddying the waters by referring to a future amendment which does not have the same effect and does not cover the same ground. Nobody would expect the noble Lord the Minister to strangle the agreement at birth or unilaterally to declare it dead. What I was hoping for, and I invited those concerned to do it, was for both the parties (the noble Lord represents only the Government)—the Church and the state together—to agree to extend even now the non-statutory arrangement which cannot be embodied in any amendment to the Bill before us as it does not depend on the Bill in the first place. But I suppose that we shall have to have to admit that that is not going to happen—the right reverend Prelates are not speaking to this amendment—and our hopes of seeing a complete non-statutory arrangement, at any rate for the moment, must be dashed. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 [Listed buildings and conservation areas]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 67:
Page 98, line 24, at end insert—
(" ( ) the extent of the exemption accorded to ecclesiastical buildings;")
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 61. I also spoke to Amendment No. 68 with Amendment No. 61. I beg to move.
Question, amendment agreed to.
Schedule 9 [Listed buildings and conservation areas]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 68:
Page 169, line 43, at end insert—
("Extent of exemption accorded to ecclesiastical buildings.
—(1) After section 58A of the Town and Country Planning Act 1971 insert—
Power to restrict exemption of certain ecclesiastical buildings.
58AA.—(1) The Secretary of State may by order provide for restricting or excluding in such cases as may be specified in the order the operation in relation to ecclesiastical buildings of sections 56(1) and 58(2) of this Act (buildings excepted from provisions relating to listed buildings and building preservation notices).
(2) An order under this section may—

(a) make provision for buildings generally, for descriptions of building or for particular buildings;

(b) make different provision for buildings in different areas, for buildings of different religious faiths or denominations or according to the use made of the building;

(c) make such provision in relation to a part of a building (including, in particular, an object or structure falling to be treated as part of the building by virtue of section 54(9) of this Act) as may be made in relation to a building and make different provision for different parts of the same building;

(d) make different provision with respect to works of different descriptions or according to the extent of the works;

(e) make such consequential adaptations or modifications of the operation of any other provision of this Act, or of any instrument made under this Act, as appear to the Secretary of State to be appropriate.".

(2) In section 287 of the Town and Country Planning Act 1971 (regulations and orders)—

(a) in subsection (4) (orders to be made by statutory instrument), after "55(3)" insert "58AA".

(b) in subsection (5) (orders subject to negative resolution), after "section" insert "58AA".")

(c) in subsection (9) (power to include supplementary and incidental provisions), after "section" insert ("58AA")

On Question, amendment agreed to.
[Amendments Nos. 69 and 70 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 71:
Page 172, line 27, after ("56C") insert ("58AA")
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 61. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 72 to 76 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 77:
Page 177, line 24, at end insert—
("Extent of exemption accorded to ecclesiastical buildings.
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.—(1) After section 56 of the Town and Country Planning (Scotland Act 1972 insert—
"Power to restrict exemption of certain ecclesiastical buildings.
56AA.—(1) The Secretary of State may by order provide for restricting or excluding in such cases as may be specified in the order the operation in relation to ecclesiastical buildings of sections 54(1) and 56(2) of this Act (buildings excepted from provisions relating to listed buildings and building preservation notices).
(2) An order under this section may—

(a) make different provision for buildings generally, for descriptions of building or for particular buildings;

(b) make different provision for buildings in different areas, for buildings of different religious faiths or denominations or according to the use made of the building;

(c) make such provision in relation to a part of a building (including, in particular, an object or structure falling to be treated as part of the building by virtue of section 52(7) of this Act) as may be made in relation to a building and make different provision for different parts of the same building;

(d) make different provision with respect to works of different descriptions or according to the extent of the works;

(e) make such consequential adaptations or modifications of the operation of any other provision of this Act, or of any instrument made under this Act, as appear to the Secretary of State to be appropriate.

(3) This section is without prejudice to the Church of Scotland Act 1921.".
(2) In section 273 (regulations and orders) of the Town and Country Planning (Scotland) Act 1972—

(a) in subsection (4) (orders to be made by statutory instrument), after "53(3) " insert "56AA";

(b) in subsection (5) (orders subject to negative resolution), after "1(3) " insert "56AA";

(c) in subsection (9) (power to include supplementary and incidental provision), after "section" insert "56AA," ")

The noble Lord said: My Lords, I spoke to Amendments Nos. 77 and 78 with Amendment No. 61. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 78:
Page 179, line 21, at end insert ("and 56AA").
On Question, amendment agreed to.
Schedule 10 [Local plans and unitary development plans]:
1 a.m.
Baroness Nicol Baroness Nicol moved Amendment No. 79:
Page 182, leave out lines 29 to 41.
The noble Baroness said: My Lords, at this late hour I shall be as brief as I can, but this is an important amendment in its own context. I have been advised on this amendment by the Council for the Protection of Rural England and I understand it has the full support of the Association of District Councils and the Association of Metropolitan Authorities.
The purpose of the amendment is to remove the extra powers for the Secretary of State to direct the making and changing of local plans. Your Lordships will be aware that the part of the Bill to which I refer—Schedule 10(11 B)—gives the Secretary of State considerable powers. The amendment aims to restrict undue interference by central government in local affairs. This has been the theme of a number of amendments we have moved during the passage of this

415
Bill. We are concerned at the constant erosion of local government powers.
Schedule 10(11B), as it stands, allows the Secretary of State to initiate, rather than just respond to, proposals for the making, altering, repeal or replacement of a local plan. In some respects, this block of powers is unnecessary and undesirable. First, the Secretary of State already approves structure plans in very great detail and local plans must conform with them. Revised proposals are to be re-enacted in paragraph 15. There should, therefore, be no need for much attention to local plans by the Secretary of State.
Secondly, the Secretary of State already has powers, to be re-enacted in paragraph 14(4), to require reconsideration of a local plan before its adoption. He has further powers in paragraphs 14A and 14B to call in and approve, as he sees fit, local plans with which he is not entirely happy. There is no need for him to have yet further powers subsequently to alter an adopted plan after he has been through the whole procedure and has had several looks at it.
Thirdly, the Secretary of State proposes to control local planning schemes, which effectively gives him total control over the making and replacement of local plans. He has further powers to make clear, when he approves structure plans, what further local plans are required. The proposed powers in paragraph 11B are therefore unnecessary. In any case, its is questionable whether central government should take such sweeping powers to control the forward planning of what are really local matters. I beg to move.
Lord Skelmersdale: My Lords, I am surprised that the noble Baroness has tabled this amendment, especially as she says that she has been advised by the CPRE. What she seeks to do is repeal part of existing law which the Bill merely restates; namely, the power for the Secretary of State to direct a local planning authority to make alterations, repeal or replace local plans for its area, or part of it. This is not a new power. The provisions in the Bill carry forward similar provisions in present legislation which were introduced in the 1968 Act when local plans were first introduced. Indeed, there was a similar provision for development plans before that.
It was never the intention, as I understand it, that the power of direction would be used frequently. Indeed, it has never been used up to now. But I should like the House to accept that that is no reason to dispose of it. For example, it might be needed where there is undue delay on the part of a local planning authority in bringing forward proposals to alter a local plan which is not in general conformity with the structure plan the alteration or replacement of which has been approved by the Secretary of State. In such a situation, the lack of conformity of the local plan could cause problems for the exercise of development control.
I also point out to the House that the power can only be used after consulting the local authority; so it would have every chance, if it so wished, to take the appropriate action and avoid the need for the Secretary of State to issue a direction. I hope that, with the explanation that the Government are not creating a new power, the amendments will be withdrawn.
Baroness Nicol: My Lords, I am relieved to hear that there is not a new power, though the Bill reads very much like that. However, I accept the Minister's explanation. I shall read what he said and check with my advisers. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 48 [Minor and consequential amendments; repeals]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 80:
Page 97, line 38, at end insert—
("( ) the operation of the Use Classes Order on the subdivision of the planning unit;").
The noble Lord said: My Lords, in moving this amendment I speak also to Amendments Nos. 81, 82 and 84. This amendment is intended to clarify the circumstances in which planning permission is required to divide buildings and land. Our aim is to provide more certainty for developers who wish to know what changes can be made to non-residential property without the need for permission. The amendment was foreshadowed in a parliamentary Answer in your Lordships' House by my noble friend Lord Elton in June this year. It forms part of the Government's initiative to modernise the Town and Country Planning (Use Classes) Order and was described in the consultation paper published on 16th June outlining proposed changes to the order.
I could dilate at great length on these changes. In fact I have sent the noble Baroness, Lady David, a letter setting out why they are necessary. If any noble Lord requires it, I can go into great detail, but for the moment I think it would be safest just to move the amendment. I beg to move.
Baroness Nicol: My Lords, perhaps I may ask the Minister to come back a little on this. Although he says in the letter, which I have seen, that this difficulty is mostly grammatical, the view of the Association of District Councils is that it is considerably more than that. It comments that the amendment has been introduced at short notice and though the Minister's remarks would seem to indicate that there had been consultation, it feels that opposition to it is likely to be very strong.
If he comes back with the leave of the House, I wonder whether the Minister can say what difficulties have been caused by the present legislation and why he felt that this amendment was necessary. The proposed relaxation on sub-division within use classes could have an unfortunate impact on the surroundings in many cases. For example, let us suppose that an underused industrial site changes hands. Perhaps it is an older site surrounded by Victorian or Edwardian houses. The sub-division into a variety of uses within its class could lead to an intensification of traffic and car parking, which could lead to severe loss of amenity for the surrounding residents. There should be some attempt to limit the intensification of use of some sites, but this amendment would appear to do away with any attempt at that.
Can the Minister say how far intensification goes before it becomes change of use? Has the draft of this amendment been circulated? I wonder whether the

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Minister sought views, other than a general comment, on the wording of the amendment and if so what representations were made. In its present form not only the Association of District Councils but also the Association of Metropolitan Authorities are very uneasy about it.
Lord Skelmersdale: My Lords, although this amendment arose from a grammatical defect in Section 22 of the Town and Country Planning Act 1971, the fact is that changes of use of buildings and land where both the existing and the proposed uses fall within the same class of the use classes order is already allowed. We have considered carefully the representations of those responding to our consultation paper on the use classes order.
I think it unlikely that any public body, society or whatever was actually consulted on the wording of the amendment, but this is perfectly normal form, especially when amendments come forward rapidly between one stage of a Bill and the next. I have no doubt that if there are bodies outside this House which do not approve of it they will get in touch with either me or the noble Baroness to tell us incredibly rapidly exactly what they think of it and what they would like one or the other of us to do about it.
There seems to be some misunderstanding about how we propose to deal with the sub-division problem. First, let me make it perfectly clear that we propose to maintain the existing requirement for planning permission for the conversion of a house into flats; our concern here is only with non-residential property. Secondly, it has never been our intention that all subdivision of commercial and industrial premises should be removed from planning control. In particular, planning permission will continue to be required when the sub-division is associated with an intensification of use sufficient in itself to amount to a material change of use. If the noble Baroness studies what I have said in the cool light of day, she may find the answer to her question. How long is a piece of string?
Planning permission will continue to be required to sub-divide a shop with an incidental office use into separate shop and office units, because the use of one part of the sub-divided premises, the office part, does not fall within the same use class as the original shop use. On the other hand, case law has made it clear that planning permission is not necessarily needed at present to sub-divide premises where the use does not change. That will be a matter of fact and degree in the particular case. For example, if I own a factory making widgets, I can sub-divide it so as to produce two factories making widgets.
The only case affected by our amendment is where the sub-division is accompanied by a change of use confined within one of the classes of the use classes order. Thanks to the amendment, I should be able to sub-divide my target factory without the need for specific permission so as to produce one factory making widgets and another making "blogets", if such things exist.
This relatively technical amendment and the equivalent Scottish amendment are important to clarify the circumstances in which planning applica-
418
tions are needed. I therefore urge the noble Baroness and the House to accept the amendment.
On Question, amendment agreed to.
Clause 52 [Minor and consequential amendments; repeals]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 81:
Page 101, line 5, at end insert—
("() the operation of the Use Class Order on the subdivision of the planning unit")
The noble Lord said: My Lords, I spoke to this with Amendment No. 80. I beg to move.
On Question, amendment agreed to.
Schedule 11 [Planning: minor and consequential amendments]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 82:
Page 190, line 15, at end insert—
("Operation of Use Classes Order on subdivision of planning unit
. In section 22(2) of the Town and Country Planning Act 1971 (operations and changes of use not amounting to development), in paragraph (f) (use of same prescribed class as existing use) for "the use thereof' substitute "the use of the buildings or other land or, subject to the provisions of the order, of any part thereof'. ",)
The noble Lord said: My Lords, I spoke to this with Amendment No. 80. I beg to move.
On Question, amendment agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 83:
Page 190, line 27, leave out sub-paragraph (2)
The noble Baroness said: My Lords, at this hour of night I shall be as quick as possible. It is a complicated subject. At present the Secretary of State is obliged to give to local highway authorities the power to issue directions to local planning authorities. That is done through development orders. However, paragraph 2 of Schedule 11 would mean that the power given to the Secretary of State would be discretionary and not a duty. My amendment aims to preserve the status quo.
At present the local highway authority may issue a direction when someone applies for planning permission to do something affecting a classified road. It may be an existing road, one that it is proposed should be built, new or altered access or any obstacles to the construction or improvement of the road. It may mean that different kinds of traffic will be entering, leaving or using the road.
Copies of the planning applications go to the local highway authority. Where that authority has a power of direction, the local planning authority must hear from the highway authority before it comes to a decision on the application. The local highway authority can then direct the planning authority to refuse permission or put conditions on the permission to be granted or it can tell the planning authority that it does not wish to make any direction.
It would seem from the wording in the schedule that the Government are perhaps under a misapprehension that in some cases that power of direction is exercised too rigidly or that unduly onerous or expensive access arrangements are required which can lead to developments being frustrated and new job opportunities lost.
I believe such criticisms are unjustified. The Society of County Surveyors issued a questionnaire recently.
Each county recorded the number of planning applications received by the district councils in its area and the proportion of those applications which were referred to the county council as the highway authority, and out of such cases the percentage in which the county council responded within 28 days. The great majority of those percentages were in the upper nineties.
The present power of direction cannot therefore be hindering any economic activity or regeneration. It is not being used to impose unreasonable requirements. A prospective developer has the right of appeal against the refusal or the conditions which stem from the highway authority's directions. If the highway authorities were acting unreasonably that would show with a poor record of such appeals being lost. It was not so, as the responses to the questionnaire issued by the Society of County Surveyors showed. The vast majority of the appeals have been dismissed, which would seem to imply that the directions imposed under the present system are generally being judged by the Department of Transport as a necessary safeguard for traffic flow and safety.
I would accept that in some of the larger districts which act as agents for the county the necessary expertise is probably available. But in the great majority of districts this will not be so. Many districts without the existence of a power of direction might be tempted to allow an otherwise desirable development, perhaps one that is prestigious or lucrative to that district, to go ahead despite any harmful effects to the traffic flow and safety.
The government proposals are causing concern to the county councils. They would be unable to ensure that developments do not prejudice road safety, disrupt traffic conditions or create environmental problems. Perhaps even more importantly, they lose the only means now available to them as a strategic planning authority to ensure that the structure plan transport policies are not undermined. Perhaps I may ask the Minister what has changed since provision was made for highway directions in the early days of planning. Why is the case for highway authorities, alone among the statutory consultees having an overriding power, any weaker than it was in the first place? Has the Minister considered the financial implications of his proposals? Without the power of direction the council will have no real negotiating position and no guarantee that the district councils would be willing to try to obtain contributions from the developers to the improvements that are proposed, especially as they do not have to bear the cost of the essential highway improvement. The county council also has an over-view of standards. What means would there be of ensuring that there were consistent standards applied to highway provision, or could the standards be undermined by different district influences?
Many of the districts at this point of time do not have the extensive technical knowledge that is required on highways. They do not have the experience or the expertise to judge the highway advice. Surely this can only mean an increase in overall local authority staffing and spending to obtain the necessary skills. I hope that the Minister can give
420
some satisfactory answers. If not—I am an eternal optimist—perhaps the noble Lord will take this away and look at it before Third Reading. I beg to move.
1.15 a. m.
Lord Skelmersdale: My Lords, the present power of direction enjoyed by highway authorities allows the views of one interested party to prevail, and denies the local planning authority its role as arbiter between different interested groups. Its existence assumes that in the last resort the subject matter of the direction is something which the local planning authority cannot decide. They thus have a power of veto over the local planning authority. Naturally, as far as highway matters are concerned, we recognise the special contribution that highway authorities have made to the planning system. Over the years, however, the competence of local planning authorities has increased to an extent where they now have the expertise necessary to take decisions on highway matters in respect of classified roads if they have first taken the views of highway authorities. There is now no reason why those views need to be binding on the local planning authorities. I do not make those remarks, nor does the Bill propose this relaxation, in a vacuum.
The Department of Transport has put the competence of planning authorities to the test by relaxing its own powers of direction in respect of trunk roads and giving greater freedom to authorities to decide a wider range of applications. It found that local planning authorities' decisions did not lead to a detectable worsening of road safety or traffic interruption, which of course are the concerns which gave rise to the power of veto in the first place. Our experience is that local planning authorities fully recognise the importance of the views they obtain through the consultation process and reflect them in the decisions they make. There is no continuing justification for the views of the highway authority to have any special status over and above the views of other statutory consultees. I must ask the noble Baroness why highway authorities? Why not water authorities, for example?
The replacement of the power of a direction with a right to be consulted and to make representations will require an amendment to the General Development Order. However, such an amendment cannot be made in respect of authorities outside Greater London without first removing the 1972 Act requirement for that order to contain a power of direction for highway authorities and replacing it with a requirement for the Secretary of State to make such provision as he thinks fit. Paragraph 1(2) is the paving measure, therefore, for the necessary amendment to the general development order. The noble Baroness has a deservedly great expertise in this House on planning matters, and I must say that I am very surprised that in this amendment she seeks to devalue the competence of the planning authorities.
The noble Baroness asks me what has changed? The change is that local planning authorities have grown up and come of age. I am advised there are no financial implications in the arrangements I have described.
There is no doubt in my mind that local planning authorities are more capable than the noble Baroness

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gives them credit for. In any case we have made it plain that they will still be under a duty to consult the highway authorities, as they do any other pertinent body and to weigh up the results of all these consultations before coming to a final decision. The time has long since passed when highway authorities should be able to exercise a veto in planning proposals, and I must therefore urge the noble Baroness to withdraw this amendment.
Baroness Stedman: My Lords, I am grateful to the noble Lord for that lengthy reply. It is obvious that my powers of persuasion are not at their best at this hour of the night. That being so, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 84:
Page 201, line 11, at end insert—
("Operation of Use Classes Order on subdivision of planning unit")
In section 19(2) of the Town and Country Planning (Scotland) Act 1972 (operations and changes of use not amounting to development), in paragraph (f) (use of same prescribed class as existing use) for "the use thereof" substitute "the use of the buildings or other land or, subject to the provisions of the order, of any part thereof'.")
The noble Lord said: My Lords, I spoke to this amendment when I dealt with Amendment No. 80. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 85:
After Clause 53, insert the following new clause:
("Discrimination in exercise of planning functions.
—In Part III of the Race Relations Act 1976 (discrimination in fields other than employment), after section 19 insert—
"Planning
Discrimination by planning authorities
19A.—(1) It is unlawful for a planning authority to discriminate against a person in carrying out their planning functions.
(2) In this section "planning authority" means—

(a) in England and Wales, a county, district or London borough council, a joint planning board, a special planning board or a National, Park Committee, and

(b) in Scotland, a planning authority or regional planning authority,

and includes an urban development corporation and a body having functions (whether as an enterprise zone authority or a body invited to prepare a scheme) under Schedule 32 to the Local Government, Planning and Land Act 1980.
(3) In this section "planning functions" means—

(a) in England and Wales, functions under the Town and Country Planning Act 1971, and

(b) in Scotland, functions under the Town and Country Planning (Scotland) Act 1972 or Part IX of the Local Government (Scotland) Act 1973,

and includes, in relation to an urban development corporation, planning functions under Part XVI of the Local Government, Planning and Land Act 1980 and, in relation to an enterprise zone authority or body invited to prepare an enterprise zone scheme, functions under Part XVIII of that Act.".")
The noble Lord said: My Lords, at Committee stage in response to the noble Lord, Lord Foot, I undertook to table a revised amendment with the objective of making racial discrimination in planning unlawful. Amendments Nos. 85, 89 and 91 cover this
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commitment. The revised amendment embraces the intention of the original amendment. It goes further and applies to Scotland and for the purposes of consistency includes planning functions of urban development corporations and enterprise zone authorities. As such, I believe that these are a complete set of amendments to cover the point. I beg to move.
Baroness Stedman: My Lords, my noble friend Lord Foot, who is unable to be here this evening, has asked me to express his thanks to the Minister and to say how pleased he is that these amendments are to be part of the Bill.
Baroness David: My Lords, perhaps I may also say that we are very pleased to see this amendment introduced in the Bill. I think it is excellent and I congratulate the Government.
On Question, amendment agreed to.
Clause 55 [Commencement]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 86:
Page 102, line 31, at end insert—
("section 20 (effect of resolutions relating to housing action area or general improvement area);").
The noble Lord said: My Lords, local authorities declare housing action areas and general improvement area under Part VIII of the Housing Act 1985 in order to secure housing and environmental improvements in a defined area. The legal position is that declarations may only be expressed to come into effect immediately. Some declarations by local authorities are not valid because they purport to declare an area to come into effect at some future date.
The purpose of Clause 20 of the Bill, which was inserted at Committee stage, is to prevent the problem of invalid housing action areas and general improvement areas arising in the future and to validate existing invalid ones. In view of the unsatisfactory position at present, it is necessary for these provisions to come into force as soon as possible and local authorities have been told that this will be at Royal Assent. The amendment secures this. I beg to move.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 87:
Page 102, line 32, leave out ("10 to 12") and insert ("10, 11, 11A and 12").
The noble Lord said: My Lords, this is a consequential drafting amendment arising from the insertion of Clause 51 at the Committee stage. Before begging to move the amendment, since this is the last time I shall speak, perhaps I may thank the House for the courtesy that it has shown in this very lengthy Report stage. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 88:
Page 102, line 36, at end insert ("(termination of grants for redevelopment in Scotland)").
On Question, amendment agreed to.
Clause 56 [Extent]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 89:
Page 103, line 20, after ("53") and insert ("(Discrimination in exercise of planning functions)")
The noble Lord said: My Lords, I spoke to this amendment when I dealt with Amendment No. 85. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 90 to 92:
Page 103, line 24, after ("paragraphs") insert ("8A,").
Page 103, line 34, after ("53") insert ("(Discrimination in exercise of planning functions)")
Schedule 12, page 214, line 10, leave out ("to 3") and insert ("and 2")
The noble Lord said: My Lords, I have already spoken to Amendments Nos. 90, 91 and 92 on previous amendments. I beg to move these amendments en bloc.
On Question, amendments agreed to.

Education Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.
House adjourned at twenty-six minutes past one o'clock.