HL Deb 22 October 1986 vol 481 cc274-301

3.5 p.m.

Report received.

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 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.

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 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 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 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.

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.

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.
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.
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 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 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 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.

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 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 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 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 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 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 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 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 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.

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 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. 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 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 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 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 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 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.

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.
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.
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.

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