HL Deb 28 October 1986 vol 481 cc636-77

4.35 p.m.

Proceedings after Third Reading resumed.

Clause 7 [Certificate of fair rent with a view to disposal by public sector body]:

Baroness David moved Amendment No. 3: Page 14, line 26, after first ("a") insert ("tenanted").

The noble Baroness said: My Lords, the amendment seeks to clarify the position with regard to a confusion which has arisen on the Government's new clause concerning, Certificate of fair rent with a view to disposal by public sector body".

That was Amendment No. 27 at Committee stage, and the discussion is reported in cols. 204 to 207 of Hansard on 7th October.

The Minister was good enough to write to me to help to clarify my mind and the position about the new clause. In his letter he stated that this amendment was intended to cover disposal of local authority tenanted accommodation. He said: The first point I would like to make clear is that it is in no way related to our proposals elsewhere in the Bill to extend the assured tenancy scheme. The assured tenancy proposals are confined to the improvement, conversion repair and subsequent letting of empty property by approved landlords". However, we are not convinced that the amended Bill does not apply also to vacant accommodation. Our amendment would specifically prevent application to vacant property.

We would welcome an assurance from the Minister that our amendment is not necessary. If, as we fear, the position is that vacant accommodation is covered by the Bill as amended, then I have to tell the Minister that we do not like it. The point is this: a body considering purchase of a local authority dwelling which is vacant will wish to know what rent can be recouped at fair rent levels, simply as a means of making calculations with a view to determining a tender price. It may then consider that the rent level will be too low in relation to the cost of finance for the scheme. Although the Government's addition to the Bill will not of itself assist transfer to assured tenancies, it may well he used during that process. We seek to close that option.

I remind the Minister that during the Committee stage in another place my honourable friend Mr. Rooker pledged the Opposition to withdraw approved body status from any landlord where public sector dwellings found their way into assured tenancy. The Minister, Mr. John Patten, responded: The honourable Gentleman is right. We should monitor the transfers and we shall build that into next year's monitoring exercise, the results being made publicly available". A little later he went on to say: We have not thought of monitoring and we should have done. I give an assurance that we shall build it into the monitoring exercise". We want to have the position clarified, and perhaps the Minister will he able to say something about the monitoring that the Government intend to do. Our amendment just seeks to have the matter clarified. I beg to move.

Lord Skelmersdale

My Lords, I am sorry, but this amendment would achieve the very opposite of what the noble Baroness has said she would like to see in the Bill. Clause 7 as it now stands enables a local authority to apply to the rent officer for certificates of fair rent in respect of residential properties of which they intend to dispose. We envisage that they will mainly make use of it where they are disposing of tenanted property to another landlord, who will then go on letting it under a regulated tenancy on a registered fair rent—in other words, exactly the circumstances that the noble Baroness quoted from my letter to her of 13th October.

However, it could well be that there will be cases where the disposal consists of a mixture of tenanted and vacant stock—the disposal of a partly tenanted block of flats is an obvious example. In those circumstances I cannot see that it makes sense to enable the local authority to obtain a certificate of fair rent in respect only of the properties which happen to be tenanted, which is what the amendment provides. It would mean that the potential purchaser would be unable to obtain an indication of the fair rent he would he permitted to charge if he relet the vacant property on a regulated tenancy. It would therefore make it less likely that he would be prepared to relet it on a regulated tenancy at a fair rent. He might be persuaded instead to sell the vacant property for owner occupation, or refurbish it for reletting on an assured tenancy.

I am not sure that the noble Baroness intended to put obstacles in the way of landlords wishing to let on regulated tenancies at fair rents, but I must tell her that this is what her amendment would achieve. I should also add that neither is it unfair to people under this situation compared with people where their houses were in the private sector all along. It is clear that where the properly is vacant there is obviously no tenant to put forward an alternative to the landlord's case when the certificate for fair rent application is considered by the rent officer. But equally that has always been the case under the certificate for fair rent procedure, and it has not worked to the detriment of tenants. The incoming tenant will know from the certificate of fair rent what rent the landlord will be permitted to charge, and no doubt this will be a factor in his or her decision to refuse or accept the tenancy.

Clause 7 has nothing to do with assured tenancies. Dwellings let on assured tenancies are at market rents and not fair rents, so the point that the noble Baroness made on monitoring does not arise on this particular subject.

I hope in view of what I have said that the noble Baroness will be satisfied that what we intend to do is not only what we have done, but what it is right to do and that therefore she will withdraw her amendment.

Baroness David

My Lords, I am grateful to the Minister for his explanation. Reading the next few lines in his letter he says: The situation we were dealing with in Amendment 27 is where a local authority is considering disposing of tenanted property". But now it appears that it is a mixture of tenanted and vacant property. I hope that this discussion will have made a little clearer what is intended by the clause, and having had that explanation I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 [Management agreements]:

Lord Dean of Beswick moved Amendment No. 4: Page 27, line 4, leave out subsection (7).

The noble Lord said: My Lords, I understand that we are taking Amendments Nos. 4 and 19 together because basically the same principle is involved. There was some reference to Schedule 1 earlier in the proceedings. Schedule 1 and Clause 10 provide a procedure for consultation with tenants before the Secretary of State can approve a scheme involving the handover of their council homes to a private sector manager or landlord. They also provide that the Secretary of State's approval, once given, shall not be invalidated even if he has not observed these consultation procedures. Surely this undermines the Government's purpose in this schedule and clause, which is to ensure that council homes cannot be handed over to the private sector if the tenants affected have not been fully consulted or if their views have not been properly taken into account by the Secretary of State in approving the scheme.

In a letter dated 21st October to my Front Bench friend and colleague Lady David the Minister denied that that was the case and made two points. First, he said that these provisions would not deprive tenants of legal redress if the consultation procedures had not been followed. The provisions would allow tenants to seek redress for the effects of the Secretary of State's decision and action in damages, but they would not allow the decision itself to be challenged on matters of fact if it had been taken without proper consultation. So the paragraph would seem to preclude effective redress for tenants if their views had been mistaken by the Secretary of State in approving such a scheme.

Secondly, the Minister claimed that the Government are concerned merely to protect the interests of purchasers, not to undermine the consultation process. But these two paragraphs surely go further than is necessary to protect purchasers' interests. They protect not only the purchaser but also the Secretary of State from challenge by tenants if approval has been given to a scheme without the proper consultation. These two paragraphs appear to set an undesirable constitutional precedent for future legislation in the degree to which they exempt the executive from judicial challenge, and that is why we wish to delete them both from the Bill.

In introducing these amendments I referred to the brief exchanges we had previously. It is a fact that the Bill caters solely for the purchaser and the other party involved, but there is no protection whatsoever enshrined in this Bill for the tenants if the Secretary of State fails by accident, or his department defaults, other than by recourse to common law by the individual tenants involved. Anybody who has had dealings with council house tenants knows that the mere mention of the court will frighten to death the overwhelming majority of them, and I do not believe they would pursue such a course.

I think this is the last time that your Lordships' House will have a chance to indicate concern for the protection of individual tenants and their traditional security of tenure in the houses that some of them have occupied for years. On that basis I beg to move.

4.45 p.m.

Lord Skelmersdale

My Lords, although this is the first time that these particular amendments have been proposed, this subject has been raised on several occasions in our discussions on the Bill. We have therefore, as the noble Lord, Lord Dean, said, covered this ground before and I am well aware of the suspicion with which paragraph 6 of Schedule 1 and new Section 27A(7), which is inserted by Clause 10, are viewed by some of the noble Lords opposite. But, as I have said before, there is nothing devious about these provisions.

There is no question of local authorities being able to evade or skimp the consultation requirements. The Bill places very specific duties on the councils in this respect and the Secretary of State will be able to ensure that they comply with their statutory duties in full. The provisions in Schedule 1 and Clause 10 that I have mentioned are necessary simply to reassure private bodies who are considering buying tenanted council housing, or taking over their management, that the transaction cannot subsequently—and this is the important point—be declared void because of a minor flaw in the way in which the consultations with tenants were carried out. Without such a guarantee, such transactions would be unlikely to take place.

I said that I was surprised that certain noble Lords opposite feel that these provisions are unnecessary, because I note that the noble Lord, Lord ElystanMorgan, said at col. 319 at Report stage: 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". He at least was in no doubt about the need for these provisions. He went on to say: Indeed, it would be a difficult circumstance for a solicitor acting for the purchaser to find himself 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".—[Official Report, 22, 10/1986; col. 319.] I apologise to the noble Lord for quoting him at such length, but his words explain as clearly as any of mine, and no doubt with far more eloquence, why these provisions are essential in this Bill. As I have said repeatedly during the passage of the Bill, the Secretary of State will take all possible steps to ensure that there are no shortcomings in the way the consultations are carried out. But if any tenant should feel that there has been any failure by either the Secretary of State or the local authority in this respect, it will still be open to him to apply to the courts for suitable redress.

The provisions we are debating now are not without precedent. Similar provisions are to be found in, for example, Section 23(1) of the Community Land Act 1975, which noble Lords opposite will know well. I hope that they will feel able to withdraw these amendments in the light of the advice given by their noble friend Lord Elystan-Morgan.

Lastly, I invite your Lordships to turn to page 10 of the Marshalled List to the second block of print which forms paragraph 6 of the new schedule proposed by noble Lords opposite. This is the final paragraph of Amendment No. 20, which we shall get on to shortly. I note that that amendment proposes just such a purchaser protection provision in a similar context. Surely if noble Lords opposite recognise that it is necessary in one case, they must accept that it is necessary in another. I hope therefore that they will feel able to withdraw these amendments.

Baroness David

My Lords, as the Minister has made some observations about a later amendment—one to which my name and that of the noble Baroness, Lady Faithfull, has been put—I think I should say that we have a special purpose in putting forward this later amendment and that it will become quite clear why we have put in a provision similar to paragraph 6 in our schedule. But I should like to point out to him that the first words are different. They say, In relation to a purchaser which I think makes quite a considerable difference to that sentence.

The Countess of Mar

My Lords, I have put down my name to the amendment deleting paragraph 6 of Schedule 1. As these two are linked, I think that it would be wise if I spoke now. My main concern is the fact that the Minister has repeatedly said that tenants who are dissatisfied will have recourse to the law, to the courts. As the noble Lord, Lord Dean of Beswick, has said, very few council tenants will be likely willingly to take court action. They will be terrified of the expense; they will have read in many newspapers about the costs of court action. It seems to me that it is totally unfair to put down a whole list of requirements by the Secretary of State and the local authority and then totally negate them in one paragraph.

One of the big problems with this sort of thing is that the Secretary of State is not required to give any reasons for his decision, and if he has not taken the action that is required then nobody knows what are the reasons. The same thing has recently occurred, and has been brought to my attention, under one of the National Health Service Acts. Tenants must feel that they have been given a rightful hearing and that the action has been taken on the basis of their hearing. If the courts take notice only of the Act—for I gather that they do not read Hansard and do not see the assurances by the Minister and that sort of thing—they will take the words of the Act literally and there will be no deviation, no allowances, for what happens to the tenants. Therefore I think that this clause is unnecessary and should be deleted.

Lord Elysian-Morgan

My Lords, may I say how deeply grateful I am to the noble Lord the Minister for the attention that he gave to the humble words which I uttered on an earlier occasion, and how very flattered I am that he should so have concentrated upon them? I should like to make my position very clear, as obviously I could not have succeeded in so doing on the previous occasion. In relation to the second schedule and to paragraph 6 thereof, I expressed what I felt must be the attitude of all reasonably minded persons; that is, that where an innocent, bona fide purchaser for value has purchased that property it really would be invidious in later transactions, when solicitors have to answer requisitions on title, if there was even a scintilla of doubt as to whether or not that transaction could in any way be invalidated and the whole chain of devolution of title thereby shattered.

Having said that, however, I said that what I was desperately thinking about was some compromise that, on the one hand, would protect fully the position of the bona fide purchaser (who may indeed be a purchaser from a purchaser from a purchaser who was involved in the original transaction), and at the same time safeguard, if I may say so, the position of the utterly genuine and bona fide tenant objector. It seems to me that it is a desperately difficult thing for Parliament to he able to achieve both those purposes.

The purchaser for value should be protected because it is wrong that there should be a continuing query, albeit perhaps, in a highly theoretical situation, over the validity of that title. The bona fide tenant objector deserves to be protected because it is nonsense, in my submission, for Parliament to say that it is mandatory that certain measures of a basic nature should be indulged in by a local authority and then to say, "But, if you do not do so, nothing will happen to you". That is the dichotomy which occupied me then and occupies me now.

However, the situation of a management agreement is on rather different grounds. In other words, the subject matter of Amendment No. 4 is very different from that of Amendment No. 19, which deals with paragraph 6. I do not believe there is really any easy answer, but I am sure that the House will agree that it is a matter of fundamental importance.

Lord Dean of Beswick

My Lords, I have no desire to detain the House much longer on this amendment. We all know that the principle involved has had quite lengthy discussion during the proceedings of this Bill at all stages. I think the Minister put the case in a nutshell when he said that the tenants have the fullest protection—or words to that effect—of the Secretary of State if they do not follow the consultations as contained in the clause and in the schedule. That I think I accepted earlier on. What I am asking is this: who protects the tenant if the Secretary of Sate defaults either by accident or by design—though I would not for one moment put that as a possibility? But, on a mistake being made, the tenant has no protection and if it is either the Secretary of State or his department that falls down, then it is hard luck on the tenant but the purchaser retains the fullest protection all along the line. On the basis of that, I do not think I can withdraw the amendment and I should like to test the views of the House.

4.57 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 101; Not-Contents, 111.

Airedale, L. Gallacher, L. [Teller.]
Amherst, E. Galpern, L.
Ardwick, L. Glenamara, L.
Aylestone, L. Graham of Edmonton, L.
Banks, L. Grey, E.
Bernstein, L. Hampton, L.
Birk, B. Harris of Greenwich, L.
Blyton, L. Houghton of Sowerby, L.
Bonham-Carter, L. Hughes, L.
Bottomley, L. Hutchinson of Lullington, L.
Brockway, L. Ilchester, E.
Bruce of Donington, L. Irving of Dartford, L.
Campbell of Eskan, L. Jacques, L.
Chitnis, L. Jeger, B.
Cledwyn of Penrhos, L. Jenkins of Putney, L.
Collison, L. Kilbracken, L.
David, B. Kilmarnock, L.
Davies, L. Kinloss, Ly.
Davies of Penrhys, L. Lawrence, L.
Dean of Beswick, L. Leatherland, L.
Denington, B. Listowel, E.
Devonshire, D. Llewelyn-Davies of Hastoe, B.
Diamond, L. Lockwood, B.
Donaldson of Kingsbridge, I Lovell-Davis, L.
Donoughue, L. McNair, L.
Elwyn-Jones, L. Mais, L.
Elystan-Morgan, L. Mar, C.
Ennals, L. Milford, L.
Ewart-Biggs, B. Molloy, L.
Ezra, L. Morton of Shuna, L.
Falkender, B. Mulley, L.
Fisher of Rednal, B. Murray of Epping Forest, L.
Fitt, L. Northfield, L.
Foot, L. Oram, L.

On Question, amendment agreed to.

Paget of Northampton, L. Stedman, B.
Pitt of Hampstead, L. Stewart of Fulham, L.
Ponsonby of Shulbrede, L. [Teller.] Stoddart of Swindon, L.
Taylor of Blackburn, L.
Prys-Davies, L. Taylor of Mansfield, L.
Rea, L. Tordoff, L.
Reilly, L. Turner of Camden, B.
Ritchie of Dundee, L. Underhill, L.
Rochester, L. Vernon, L.
Scanlon, L. Wallace of Coslany, L.
Seear, B. Wedderburn of Charlton, L.
Sefton of Garston, L. Wells-Pestell, L.
Serota, B. Whaddon, L.
Shepherd, L. Wigoder, L.
Silkin of Dulwich, L. Williams of Elvel, L.
Simon, V. Wilson of Rievaulx, L.
Stallard, L. Winstanley, L.
Alexander of Tunis, E. Lauderdale, E.
Allerton, L. Layton, L.
Alport, L. Long, V.
Ampthill, L. Lonsdale, E.
Auckland, L. Lucas of Chilworth, L.
Bauer, L. Lyell, L.
Beaverbrook, L. McFadzean, L.
Beloff, L. Macleod of Borve, B.
Belstead, L. Malmesbury, E.
Boyd-Carpenter, L. Mancroft, L.
Broxbourne, L. Margadale, L.
Bruce-Gardyne. L. Merrivale, L.
Buckinghamshire, E. Mersey, V.
Butterworth, L. Milverton, L.
Caithness, E. Molson, L.
Campbell of Alloway, L. Monk Bretton, L.
Campbell of Croy, L. Mottistone, L.
Carnegy of Lour, B. Mowbray and Stourton, L.
Carnock, L. Munster, E.
Chelmer, L. Onslow, E.
Coleraine. L. Orr-Ewing, L.
Constantine of Stanmore, L. Pender, L.
Craigavon, V. Peyton of Yeovil, L.
Croft, L. Porritt, L.
Cullen of Ashbourne, L. Portland, D.
Dacre of Glanton, L. Quinton, L.
Davidson, V. [Teller.] Rankeillour, L.
De La Warr, E. Reay, L.
Denham, L. [Teller.] Renton, L.
Dilhorne, V. Rodney, L.
Elliot of Harwood, B. Rugby, L.
Elton, L. St. Davids, V.
Erroll of Hale, L. Salisbury, M.
Fortescue, E. Sandford, L.
Fraser of Kilmorack, L. Sandys, L.
Gainford, L. Selkirk, E.
Gardner of Parkes, B. Sharpies, B.
Geddes, L. Skelmersdale, L.
Gibson-Watt, L. Somers, L.
Glanusk, L. Strathcona and Mount Royal, L.
Gray, L.
Gray of Contin, L. Strathspey, L.
Hailsham of Saint Marylebone, L. Sudeley, L.
Teviot, L.
Halsbury, E. Thorneycroft, L.
Harmar-Nicholls, L. Torrington, V.
Henderson of Brompton, L. Trefgarne, L.
Hesketh, L. Trumpington, B.
Hives, L. Vaux of Harrowden, L.
Home of the Hirsel, L. Vickers, B.
Hooper, B. Vivian, L.
Hunter of Newington, L. Westbury, L.
Hylton-Foster, B. Whitelaw, V.
Kaberry of Adel, L. Wise, L.
Kinnoull, E. Wynford, L.
Knollys, V. Young, B.
Lane-Fox, B.

5.5 p.m.

Clause 13 [Other amendments relating to assured tenancies]:

Baroness Hooper moved Amendment No. 5: Page 32, line 39, leave out from beginning to ("applies") and insert ("The above amendment").

The noble Baroness said: My Lords, on behalf of my noble friend Lord Skelmersdale, I beg to move this amendment. It fulfils an undertaking given by my noble friend that we would table a government amendment to the assured tenancy scheme to prevent contracting out. We are grateful to the noble Baroness, Lady David, for her patience and I am sorry that she has had to wait until Third Reading for our amendment to appear.

The only significant difference between this amendment and what the Opposition proposed is that there is a saving for any cases where contracting out may already have occurred. However, I think the difference is theoretical rather than real, since we are not aware of any cases, out of a very limited number of assured tenancy lettings, where the contracting out provisions have actually been used. Nevertheless, the principle that the status of a tenancy, once granted, ought not to be changed fundamentally by statute is one which we regard as important. Accordingly, we think it right that any assured tenancy already granted which may have relied on Section 38(4) of the Landlord and Tenant Act 1954 should not be affected by these provisions. I beg to move.

Baroness David

My Lords, we are of course very glad to have had the principle of any amendment accepted by the Government and we shall not complain at the small changes which have been made from the original amendment that we proposed. We welcome this amendment.

Baroness Hooper moved Amendment No. 6: Page 33, line 6, at end insert— ("( ) In Schedule 5 to the Housing Act 1980 (application of Landlord and Tenant Act 1954 to assured tenancies), for paragraph 8 (modification of provisions relating to contracting out) substitute— 8. Section 38 applies as if the following provisions were omitted—

  1. (a) in subsection (1), the words "(except as provided by subsection (4) of this section)";
  2. (b) in subsection (2), the words from the beginning to the end of paragraph (b);
  3. (c) subsections (3) and (4)."
The above amendment, so far as it relates to section 38(4) of the Landlord and Tenant Act 1954, does not apply to an agreement both approved by the court under that provision and entered into before the commencement of this section.").

The noble Baroness said: My Lords, I beg to move this amendment on behalf of my noble friend.

Lord Dean of Beswick moved Amendment No. 7: Before Clause 14, insert the following new clause: ("Housing Stress Area.

  1. —(1) The Secretary of State may, upon application from a local housing authority, designate that area a Housing Stress Area.
  2. 645
  3. (2) In reaching a decision, the Secretary of State shall have regard to;
    1. (a) whether more than one half of an authority's lettings to new tenants are made to homeless households; and
    2. (b) the average earnings of those seeking to be housed and the availability and occupational costs of private rented accommodation and dwellings for owner occupation within the area; and
    3. (c) the number of dwellings which are: unfit for human habitation within the meaning of Sections 282 and 604 of the Housing Act 1985; fit for human habitation but lacking standard amenities as defined in the Housing Act 1985 Part XV; in need of repair and renovation; and
    4. (d) the number of households which are overcrowded, require specialist accommodation, and are sharing accommodation.
  4. (3) An area may be designated as a Housing Stress Area for a period of not less than two years and thereafter extended.
  5. (4) Where an authority is designated as a Housing Stress Area, the local authority concerned may:
    1. (a) utilise, in any year, 100% of its capital receipts generated from sales of land and property and repayments of sums advanced, or left outstanding, for housing purposes;
    2. (b) acquire or lease properties, by negotiation, from the private sector;
    3. (c) submit applications to the Secretary of State for approval of schemes to compulsorily acquire private sector properties which have been vacant for more than six months.
  6. (5) Local authorities my submit applications for additional capital and revenue resources to the Secretary of State for special Exchequer funding, as are appropriate to discharge their functions in Housing Stress Areas.")

The noble Lord said: My Lords, this amendment, as your Lordships will be aware, deals with the question of housing stress areas and resources for such places. Obviously we should prefer the Government to respond to the present housing crisis by making far more resources available in all areas. While there is a concentration of problems in inner city areas, we certainly acknowledge that there are very serious problems in rural districts too. However, given that the Government are unlikely to make a significant increase in housing resources available, we see merit in their providing additional resources to the worst affected areas.

Housing stress areas would in any event not be limited to inner city areas because, increasingly, rural and suburban areas are facing more difficulties themselves and are having to house a greater proportion of homeless households. The clause has not been drawn too tightly and the Secretary of State will have discretion. Nevertheless, he will have to have regard to a number of key indicators on which information is readily available and is provided by local authorities in housing investment programme returns and in other returns to the DoE.

Local authorities can already provide a number of housing activities within an area, and the greatest restriction is not in regard to legal powers but the lack of resources. Consequently, subsection (5) is the most important part of this clause because it will allow local authorities to submit applications for additional resources.

However, subsection (4) will allow local authorities to do three things which the Government at present effectively prohibit. First, they will be able to use 100 per cent. of their capital receipts. At present they can use 100 per cent., but only 20 per cent. in any one year and then 20 per cent. of what is left in the following year, and so on. Further, they would be able to acquire and lease properties by negotiation, and this is something which the Government have effectively stopped as they regard it as municipalisation. Also, they would be able compulsorily to acquire vacant properties subject to the Secretary of State's approval.

Your Lordships may think that this clause is far from perfect, but it highlights the very great problems that some authorities face and it would put pressure upon the Secretary of State to take those problems more seriously after enactment. We believe that the housing stress areas of this country are the areas which are literally crying out for cash to halt a very dangerous decline in the housing stock that is already there. This belief is not held by one particular group of people, but has been underlined time after time by reports from various bodies which are not politically motivated but which have expertise in this particular subject. I beg to move.

Lord Skelmersdale

Again, my Lords, I am afraid that this amendment would do no practical good. There are already mechanisms for distributing resources, and they already give priority to the areas with the greatest needs. On the revenue side, £500 million a year of Exchequer housing subsidy is paid to those local authorities which are assessed as having deficits on their housing revenue accounts. Moreover, there is an element in the rate support grant calculations, E7, which works in parallel to channel block grant to authorities which are assessed as needing to make rate fund contributions to their housing revenue accounts.

On the capital side, the housing investment programme allocations for the current year and for previous years have been based to a substantial extent on the generalised needs index. This index, which was devised and reviewed by my department in discussions with the local authority associations in 1986–87, was an attempt to summarise all the relevant aspects of housing conditions. The generalised needs index already takes into account most of the criteria for designation of a housing stress area suggested in subsection (2) of this proposed clause. Particular account is taken of the level of homelessness, the condition of the local authority and private sector housing stocks, and the amount of overcrowded accommodation in the area. The GNI scores for inner city areas are given an additional weighting, and for 1986–87 that weighting was significantly increased, with a consequent increase in the proportion of HIP allocations which they received.

The noble Lord, Lord Dean, has highlighted subsection (4) of the proposed new clause, which outlines the powers that housing stress area status would bestow on a local authority. Taking each in turn, first, the Government have no plans to change the current system of prescribing the proportion of their capital receipts which local authorities may spend in any one year. Such controls are necessary to ensure that the economic effects of the sales of assets are carefully shared over a number of years. Allowing housing stress areas to spend all their receipts in the year in which they were generated would, in any case, only have limited impact on the area's housing problems as such areas would generally be inner city areas which are characterised by relatively low receipts.

Secondly, paragraph (b) is unnecessary. In fact, local authorities are already empowered by Section 17 of the Housing Act 1985 to acquire freehold or leasehold property for housing and they do not need the Secretary of State's consent.

Finally, on paragraph (c), Part II of the 1985 Housing Act already gives local authorities the powers to acquire property compulsorily for the provision of housing accommodation. While we would prefer to see the private owner make effective use of the property, we will consider such compulsory purchase order applications on their merits to ensure, for example, that the property does not stand idle unnecessarily. This was a point that clearly was worrying the noble Lord, Lord Mellish, at Question Time recently. Additional powers are not therefore needed. I submit that this amendment is unnecessary in some respects and inappropriate or ineffective in others. I invite the noble Lord to withdraw it.

Lord Dean of Beswick

My Lords, the Minister once again appears to have defended the financial situation that the Government have imposed on local authorities since they took office—that of increasing resources. However, anyone involved with the situation will know that the housing investment programmes in areas that badly need high housing investment programmes have been cut severely once again this year. When the Minister speaks of government finance on housing, he seems to have invented his own form of political abacus in which he moves the beads to where they suit his own political purposes. Having said that, I do not think we are going to get any sympathy from the Government. In fact, the sums of money required are far in excess of what this particular new clause would achieve, though I think it would benefit some areas. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Baroness David moved Amendment No. 8: Before Clause 14, insert the following new clause: ("Housing the homeless.

  1. .—(1) The Housing Act 1985 shall be amended in accordance with the following provisions.
  2. (2) In section 58 (definition of homelessness) after subsection (2) there shall be inserted the following subsections—
    1. "(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.
    2. (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. (3) For section 69(1) (provisions supplementary to ss.63, 65 and 68) there shall be substituted the following subsection—
    1. "(1) A local housing authority may perform any duty under section 65 or 68 (duties to persons found to be homeless) to secure that accommodation becomes available for the occupation of a person—
    2. (a) by making available suitable accommodation held by them under Part II (provisions of housing) or any enactment, or
    3. 648
    4. (b) by securing that he obtains suitable accommodation from some other person, or
    5. (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, I make no apology for bringing back this new clause, which is concerned with homelessness and trying to put right what we consider to be the wrong done by the Puhlhofer judgment. We brought this amendment forward both in Committee and on Report because we wished to restore the rights of homeless people under the homelessness legislation to those which existed before the judgment in the case of R. v. London Borough of Hillingdon ex parte Puhlhofer. We are now bringing the amendment back because the Minister appears not to have understood the purpose or the intention of Parliament in passing the homelessness legislation.

At Report stage, the noble Lord said that our amendment, in defining the concept of accommodation for the purposes of the homelessness legislation, would not restore but extend the rights of homeless people to help, compared with the situation which existed before the judgment In col. 347 of the Official Report of 21st October he claimed: The homeless persons legislation was intended to provide a long stop for dealing with people who are roofless…not with what this amendment is all about—the standard of their accommodation". This is rather misleading. The intention of Parliament in passing the Housing (Homeless Persons) Act was not just to deal with people who are literally roofless. It was also to provide help for people who do have accommodation but where the premises, for example, are not capable of being occupied by themselves and other members of their household who might reasonably be expected to reside with them, as referred to in Section 75 of the Housing Act 1985.

Clearly the condition of that accommodation is a relevant factor here. The code of guidance which the Department of the Environment issued to accompany the homeless persons legislation underlines this point. It states, for example, in section 2.16 in relation to the condition of accommodation occupied: that local authorities should not treat as intentionally homeless those who have been driven to leave their accommodation because conditions have degenerated to a point where they could not in all circumstances reasonably be expected to remain, perhaps because of overcrowding or lack of basic amenities or severe emotional stress". The code is even more explicit in relation to the duties of local authorities in providing accommodaton for the homeless which the second part of our amendment addresses. It states in section 4(4): Permanent accommodation should be secured wherever possible", and it indicates in section 4(3) that local authorities should have due regard to relevant provisions of general housing and public health legislation. That section requires that premises should not be unfit, overcrowded or below other statutory standards.

Parliament's intention, therefore, was that the homelessness legislation should provide help not simply to people who are literally without a roof over their heads. Parliament expected that local authorities would have due regard to the standards and conditions in which households are living in determining their duties towards them under the homeless persons legislation. The Puhlhofer decision overturned this. The judgment of the noble and learned Lord, Lord Brightman, established that accommodation for the purposes of the Act meant premises physically capable of accommodating the applicant. Such a concept is incompatible with Parliament's original intention confirmed by the code of guidance issued by the department concerning the Act. That is why we bring this amendment forward again. It would not extend but merely restore homeless people's rights to the situation existing before the Puhlhofer judgment.

The Minister has consistently called on us to produce evidence of the adverse effects which the judgment has had on the treatment of homeless people. Although we produced significant evidence at Report stage, we consider the call for evidence to be misleading for, as we have explained, the concept of accommodation established by the judgment is incompatible with that originally intended by Parliament. The incompatability is such that it is necessary to consider preventive action of the modest kind which our amendment proposes. I would remind the House that an amendment similar to this was accepted by your Lordships when the Housing (Scotland) Bill was going through this House. I beg to move.

Lord Skelmersdale

My Lords, this subject is one which the noble Lords who subscribe to Amendment No. 8 have refined over the last three weeks of debate. The Government's position, however, remains that it is at best premature to make any attempt to amend the homelessness legislation in the light of the Law Lords' judgment in the Puhlhofer case.

Last time round at Report stage, we heard a lot about evidence of authorities having changed their policies and what had been submitted to the department. I do not think it would profit us to go over that again in any detail. But I must say, in answer to that remark of the noble Baroness, Lady David, just now, that the important point that emerges is that two out of 366 housing authorities in England—namely, Maldon District Council and South Cambridgeshire District Council—appear on the basis of the correspondence submitted to have changed their policies and one other, Holderness District Council, appears to have been thinking about it.

That is by all accounts little evidence indeed on which to be considering changing the law in the dying days of consideration of a Bill which exists for totally different purposes. It does nonetheless come from Shelter, who seven months ago invited the audience at their campaign forum to seek out and send in such evidence. This has most certainly not resulted in the flood of examples that we were led to expect. We need substantial evidence to justify possible changes in the legislation.

However, our doors and our minds remain open to any further evidence that the voluntary bodies may choose to submit. Meanwhile my department, for its part, is making its own investigations much more actively. We have now started our full postal survey of all authorities and, as the noble Baroness and Shelter will know, this specifically asks about recent changes in authorities' policies. We should have the results analysed by February.

Our case studies of selected authorities will take most of next year, but will give us an opportunity to go over the Puhlhofer ground in detailed discussions along with a lot of other homeless areas. And our regular quarterly statistics should show up any significant changes in authorities' attitudes on whom they count as homeless. These ask about numbers of inquiries and also about numbers "found not to be homeless". Any major change in the proportion is something that we would inquire into further. So far, for what it is worth—and I do not place a lot of reliance on this—our figures for the first full post-Puhlhofer quarter show an overall reduction in the proportion "found not to be homeless" from 29 per cent. to 28 per cent.

Last time round, the noble Baroness seemed to be casting some doubt on the effectiveness of these monitoring exercises. All I can say is that we are doing our best. If the voluntary bodies can think of better ways of monitoring the position, I would expect to have heard from them before now, and even now I would obviously give consideration to them.

Much has been made of the rights of homeless people. The House may like to know that we are currently preparing an official leaflet on these rights for wide distribution to homeless people. We have also increased to over £½ million the grants we are giving this year to Shelter and other voluntary bodies for their housing advice services to the public, which help to ensure that the homeless get their rights and that individual cases are taken up with authorities where appropriate. Noble Lords opposite certainly have no monopoly of concern about the rights of homeless people. The Government are as anxious as anyone that within the framework of the law the homeless should know and receive their rights.

So far as concerns the noble Baroness's point on the code of guidance, I would say that this is quite irrelevant when considering whether a person is homeless. It becomes relevant after a person has been found to be homeless. It is by no means clear that the Puhlhofer case has affected the application of the code in this way. To sum up, if sufficient convincing evidence is produced, either by Shelter or by my department's monitoring exercise, we will have very much stronger grounds to consider changing the law. As matters stand today, these grounds simply do not exist.

Lord Elystan-Morgan

My Lords, I am sure we are grateful to the noble Lord the Minister for the assurances that he has given yet again in this connection. What intrigues a number of us on this side of the House is exactly what is meant by the survey into the question of any change of policy on the part of local authorities in this connection. With great respect, it is not really a change of policy. The question really is the difference between the interpretation which local authorities placed upon the wording of the Housing (Homeless Persons) Act previous to the Puhlhofer judgment and the interpretation placed after the Puhlhofer judgment in the light of the decision of this

House that accommodation should relate only to the capacity of premises, as it were, to hold the persons concerned.

It is not for me to express any view whatsoever as to that judgment. It is, of course, for the House of Lords to decide what the law is and not what the law should be. But what is of great importance is to find the difference between the earlier interpretation and the latter interpretation. It is not at all a matter of policy, and a most searching scrutiny has to be conducted in order to find out exactly how local authorities defined the situation previous to Puhlhofer and what changes there are in that definition post-Puhlhofer.

I am afraid that we do not all share the optimistic view of the Minister that local authorities make these returns regularly and fully. My understanding of the position is that last year over 40 per cent. of local authorities did not make the return at all, and it is unlikely that the remaining 60 per cent. made the return in the fullest and most meaningful way.

Therefore what I respectfully urge the Minister to do is to look yet again at the questions that are asked of local authorities and to ask himself whether it is a sufficiently searching inquiry to reveal the real changes which have come about in train following the Puldhofer judgment.

Lord Pitt of Hampstead

My Lords, I am really disappointed at the reply which we have had again from the Minister, particularly since I am very pleased with him because of the way he has handled the Bill so far, and I am also very grateful to him for Clause 54. Therefore I hate having to stand up now and criticise him, as I am about to do.

We are worried about the interpretation that has been given to the Act. The Government are not prepared to do anything about changing the wording in order that we may have the Act as we thought we had it when it passed through this House a few years ago. But the Government also issued a code of guidance to local authorities and the least I expected from the Minister was a statement that the department is re-issuing the code of guidance.

With the code of guidance, even with the interpretation given by the courts, authorities are guided and will continue to do what they have been doing, which is to regard as homeless people who are living in uninhabitable conditions. That was one of the consequences of the code of guidance. It was not only that local authorities felt the urge to do that; I think that the code of guidance encouraged them to do that. I should have thought that the department could draw their attention once again to the code of guidance, thus underlining the need for them to preserve the highest standards, rather than accept what—if they accept the interpretation of the court literally—would be a lower standard. Therefore, if the Minister has the leave of the House to speak again, I hope that we shall get an assurance along those lines. There does not seem to me much else that we can get.

It would certainly help if the department could reiterate its code of guidance in a way that would allow local authorities to realise that what is expected of them is the higher standard that they were in fact

observing and not the lower standard that they were guided to observe as a result of the literal interpretation of the judgment given by the court. I hope therefore that, as it is obvious that the Government are not prepared to accept the amendment, the Minister will give an assurance along those lines. I invite him to do so.

5.30 p.m.

Lord Stallard

My Lords, I too should like to welcome the noble Lord's statement about the survey and about the monitoring of the results of the Puhlhofer judgment and its effects. Does the Minister accept that the difficulty with the monitoring and the survey is not so much with the local authorities but with the housing aid centres, the law centres and the voluntary organisations which have operated the Puhlhofer judgment to the extent that they no longer refer cases to local authorities for consideration?

How does one monitor that unless one asks those agencies to list the cases that would have been referred under the previous interpretation but which are not now being referred from those agencies under the Puhlhofer judgment? Can the noble Lord give an assurance that that kind of observation and that kind of monitoring process will be included in the survey and that these organisations—the housing aid centres, the law centres and the others I have mentioned—will be asked to list the number of cases that would have been referred had they been operating under the previous interpretation?

Lord Davies

My Lords, having listened long and hard to our many discussions on this subject, I fail completely to understand the grounds of the Government's reluctance to take this opportunity to put matters right. Are they really saying that large numbers have to be found living in sheds or suchlike before this matter is put right, when it could be put right now? If they wait until those figures come before them, it probably will be years before they have another opportunity to bring the matter back before us.

Baroness David

My Lords, I agree entirely with what the noble Lord has just said. We have waited and waited. The opportunity is here now for us to put the situation right and to what everybody thought it was before that judgment; so I should like to press the amendment.

5.33 p.m.

On Question, Whether the said amendment (No. 8) shall be agreed to?

Their Lordships divided: Contents, 109; Not-Contents, 102.

Airedale, L. Banks, L.
Alport, L. Bernstein, L.
Amherst, E. Birk, B.
Ardwick, L. Blyton, L.
Attlee, E. Bonham-Carter, L.
Aylestone, L. Bottomley, L.

On Question, amendment agreed to.

Brockway, L. Mais, L.
Bruce of Donington, L. Mar, C.
Chitnis, L. Molloy, L.
Cledwyn of Penrhos, L. Morton of Shuna, L.
Craigavon, V. Mulley, L.
David, B. Munster, E.
Davies, L. Murray of Epping Forest, L.
Davies of Penrhys, L. Nathan, L.
Dean of Beswick, L. Northfield, L.
Denington, B. Oram, L.
Diamond, L. Phillips, B.
Donaldson of Kingsbridge, L. Pitt of Hampstead, L.
Donoughue, L. Ponsonby of Shulbrede, L. [Teller.]
Elwyn-Jones, L.
Elystan-Morgan, L. Prys-Davies, L.
Ennals, L. Reilly, L.
Ewart-Biggs, B. Rhodes, L.
Ezra, L. Ritchie of Dundee, L.
Falkender, B. Rochester, L.
Fisher of Rednal, B. Rugby, L.
Foot, L. Scanlon, L.
Gallacher, L. Seear, B.
Galpern, L. Seebohm, L.
Graham of Edmonton, L. Sefton of Garston, L.
Gregson, L. Serota, B.
Grey, E. Shackleton, L.
Halsbury, E. Shepherd, L.
Hampton, L. Silkin of Dulwich, L.
Harris of Greenwich, L. Simon, V.
Houghton of Sowerby, L. Somers, L.
Hughes, L. Stallard, L.
Hutchinson of Lullington, L. Stedman, B.
Irving of Dartford, L. Stewart of Fulham, L.
Jacques, L. Stoddart of Swindon, L.
Jeger, B. Taylor of Blackburn, L.
Jenkins of Putney, L. Taylor of Mansfield, L.
Kilbracken, L. Tordoff, L. [Teller.]
Kilmarnock, L. Turner of Camden, B.
Kinloss, Ly. Underhill, L.
Kirkhill, L. Vernon, L.
Lawrence, L. Wallace of Coslany, L.
Leatherland, L. Wedderburn of Charlton, L.
Listowel, E. Wells-Pestell, L.
Llewelyn-Davies of Hastoe, B. Whaddon, L.
Lloyd of Kilgerran, L. White, B.
Lockwood, B. Wigoder, L.
Longford, E. Williams of Elvel, L.
Lovell-Davis, L. Wilson of Rievaulx, L.
McNair, L. Winstanley, L.
Allerton, L. Elliot of Harwood, B.
Arran, E. Elton, L.
Auckland, L. Erroll of Hale, L.
Bauer, L. Faithfull, B.
Beaverbrook, L. Ferrers, E.
Beloflf, L. Fortescue, E.
Belstead, L. Fraser of Kilmorack, L.
Bessborough, E. Gainford, L.
Blyth, L. Geddes, L.
Boyd-Carpenter, L. Gibson-Watt, L.
Broxbourne, L. Glanusk, L.
Buckinghamshire, E. Glenarthur, L.
Caccia, L. Gray of Contin, L.
Caithness, E. Harmar-Nicholls, L.
Campbell of Alloway, L. Hesketh, L.
Campbell of Croy, L. Hives, L.
Carnegy of Lour, B. Holderness, L.
Carnock, L. Home of the Hirsel, L.
Cathcart, E. Hooper, B.
Chelmer, L. Hylton-Foster, B.
Coleraine, L. Ilchester, E.
Colville of Culross, V. Ironside, L.
Constantine of Stanmore, L. Kinnoull, E.
Cox, B. Knollys, V.
Croft, L. Lane-Fox, B.
Cullen of Ashbourne, L. Lauderdale, E.
Davidson, V. [Teller.] Long, V.
De La Warr, E. Lucas of Chilworth, L.
Denham, L. [Teller.] Lyell, L.
Dilhorne, V. McFadzean, L.
Macleod of Borve, B. St. Davids, V.
Malmesbury, E. Sandford, L.
Mancroft, L. Selkirk, E.
Margadale, L. Sharpies, B.
Merrivale, L. Skelmersdale, L.
Mersey, V. Strathcona and Mount Royal, L.
Milverton, L.
Monk Bretton, L. Strathspey, L.
Monson, L. Sudeley, L.
Montagu of Beaulieu, L. Thorneycroft, L.
Mottistone, L. Torrington, V.
Mowbray and Stourton, L. Tranmire, L.
Napier and Ettrick, L. Trefgarne, L.
Onslow, E. Trumpington, B.
Orr-Ewing, L. Vaux of Harrowden, L.
Pender, L. Vickers, B.
Peyton of Yeovil, L. Vivian, L.
Quinton, L. Whitelaw, V.
Rankeillour, L. Wise, L.
Reay, L. Wynford, L.
Renton, L. Young, B.
Rodney, L.

Resolved in the affirmative, and amendment agreed to accordingly.

Clause 19 [Disposal of dwellings in new towns]:

5.41 p.m.

Baroness David moved Amendment No. 9:

Page 35, line 36, after ("person") insert— ("provided always that no such disposal shall take effect unless the terms thereof have been agreed by the Secretary of State and included in an order made by him and approved by resolutions of both Houses of Parliament. () An order under this section shall be exercisable by statutory instrument. () Before agreeing to the disposal of dwellings under subsection (1) above, the Secretary of State shall consult the tenants of such dwellings and the district council in whose area they are situated and shall take account of their views.").

The noble Baroness said: My Lords, we now come to three amendments which concern new towns and the disposal of their houses when the new towns are eventually run down. The noble Baroness, Lady Faithfull, has agreed that we should debate these amendments together. Amendments Nos. 10 and 20 properly go together, and Amendment No. 9 seeks a similar objective but in a different way. I hope that will be acceptable to the House.

I start with Amendment No. 9. This amendment requires that the terms of the disposal of new town dwellings under Clause 19, other than to district councils, should be incorporated in an order by the Secretary of State and be subject to parliamentary approval under the affirmative resolution procedure. It also provides that the Secretary of State must consult the tenants of the dwellings concerned and the district council before laying an order.

Clause 19 was only introduced into the Bill by the Government at the Committee stage in your Lordships' Chamber. It is in the most brief and skeletal form. It has not been the subject of adequate consultation or consideration, and it is not clear how the power to dispose of the dwellings to "any person" will be used. At a meeting with new town district councils on 16th October the noble Lord, Lord Skelmersdale, stressed that he was unable to indicate how the powers would be used as this has not yet been decided. Clause 19 does not provide, inter alia, for the following important points.

The first is the financial terms of any disposal and how much debt might be written off. The second point is the form of any consultation with the tenants of the dwellings to be disposed of; how it would be conducted; whether it would be independently conducted; and whether it would be binding. Clause 19 is in stark contrast to Schedule 1 to the Bill which lays down procedures for consultation with tenants, including a tenants' veto, as we have heard before, (see paragraph 5), in the case where a district council—which, unlike a development corporation, already has democratic input—proposes disposal to the private sector. The third point concerns safeguards for staff, including compensation, pensions and continued employment. The fourth is availability of relets in the stock to district councils to meet housing responsibilities to people on the housing list and for those who are statutorily homeless. In view of these important points it is vital that Parliament should have the opportunity to approve the final arrangements which are made in respect of disposals under this clause.

As regards the third subsection of the amendment, the Secretary of State in his original policy announcement indicated that he would consult tenants and district councils. The amendment seeks to put that on a statutory basis. The Minister has admitted that his knowledge of new towns and the district councils in whose areas they are is not vast. He has admitted that plans have not been properly considered about what is to happen as a result of the new clause. As this is the case, it is surely only right that Parliament should have a further chance to examine the proposals and to discuss them—indeed, to vote on them.

As regards Amendments Nos. 10 and 20, these propose a consultation procedure which is based entirely on the Government's own consultation procedure which the Minister has praised so highly and so often while this Bill has been going through the House. The only changes in the schedule are to insert instead of "local authority" the words, the Commission, a development corporation or the Rural Development Board for Wales".

Therefore, we follow almost exactly the words in the earlier schedule. If it is all right for local authority tenants to be consulted in that way, it seems to me only fair that the tenants of new town dwellings should also have a right to speak on what is going to happen to the houses in which they live. I beg to move.

Baroness Faithfull

My Lords, I rise to support the noble Baroness, Lady David, on Amendments Nos. 9, 10 and 20. The noble Baroness has put the case very fully. Perhaps I may first say how grateful she and I were to my noble friend the Minister for seeing us and discussing with us the whole question of the new towns.

The fact must be faced that the position with regard to the new towns is unique. We are talking about the transfer—or the closure or winding up, if one may put it that way—of the development corporations and the disposal of the properties which come under them. I wish to make two points which have, in fact, already been made by the noble Baroness. First, as regards disposal of the houses, I can see, and I believe it is right, that people should have the opportunity to buy their council houses. Equally, I believe that housing associations should have certain houses if they so wish. But I believe also that the local authority should have a housing stock. I say that for two reasons: first, tenants should have a choice; and, secondly, there is the question of homelessness, which we have discussed in another respect.

Everyone who is on a housing list is not necessarily homeless. A number of people on the housing lists are perhaps living with relatives or friends and are not necessarily homeless. However, there are people who are literally homeless. It is those homeless people whom one is deeply concerned about, where one can see very great distress in families and the effect it has on children. Therefore, I believe that it is right that the local authorities should have a housing stock in order that they may deal with the homeless problem. If they do not have a housing stock, they have no way of coping with that problem.

The second point underlined by the noble Baroness is that of consultation. I support the noble Baroness in that the existing schedule lays down consultation before disposal to the private sector. This applies to local authorities, so why should it not apply in this instance? Therefore, I support the noble Baroness in these amendments.

Lord Skelmersdale

My Lords, these amendments supported en deuxiàme notes by my noble friend Lady Faithfull perpetuate the outdated presumption that new town housing should, in the normal course of events, pass to the local authority. Amendment No. 9 implies that any proposal to the contrary is so controversial and unusual that the full scrutiny of Parliament should be brought to bear. If we did what the Opposition seems to want and let the remaining new town housing transfers proceed by way of schemes under Part III of the New Towns Act, there would be no requirement to consult tenants and no referral to Parliament. The implication is that new town tenants should be happy on every occasion to see their houses transferred into local authority ownership, but that any other arrangements, including arrangements which preserved the tenants' position as secure tenants under the Housing Act, must be submitted to the detailed scrutiny of Parliament. This is illogical. So what do the Government propose?

I have given assurances that we will, through administrative measures, ensure that tenants are consulted on both options, transfer to the council and transfer to non-council owners, wherever that choice exists. I am convinced that this is the right approach. Amendment No. 9 cannot be accepted in its present form, because as drafted it would produce absurd results. For example, every time the commission for the new towns wished to sell a tenanted house to its occupant under their voluntary sales scheme, the requirement for an affirmative resolution order would be triggered. If this amendment is accepted Parliament can expect a plethora of affirmative instruments, many of which would refer to as little as a single dwelling.

The amendment is illogical, unworkable and, I suggest, misconceived. It is principally a device for raising once more the wish of local authorities to be given first refusal on the remaining new town houses regardless of tenants' wishes. That is an outdated attitude. The Government's policy is to ensure that tenants are consulted in all new town housing transfer situations. This is fair to all parties and it works.

I now turn to Amendments Nos. 10 and 20. These amendments apply consultation provisions similar to those provided for by Clause 6 of the Bill to any case of a proposed sale, under the powers specified in Clause 19, as a result of which a new town secure tenant will become the tenant of any other person except a district council taking transfer under Part III". I must ask my noble friend: where is the choice for those tenants who will he transferred to the local authority? Once again, the implication is that the views of tenants do not matter if the proposed transfer is a transfer to a local authority. That cannot be right. Conversely, and unlike the consultation requirements introduced by Clause 6, these same amendments would require consultation even in cases where the new landlord is to be a registered housing association, for example where tenants would remain secure tenants under the Housing Act.

I have given assurances at Committee and at Report that tenants will be consulted on all proposals for transfer of tenanted new town housing to new owners whether these new owners are in the private or the public sector. The relationship between the Government and the new town corporations is a close one, and there is no difficulty in giving effect to those assurances. I cannot anticipate circumstances where it would be necessary to give the corporations a legal direction, but should such circumstances arise in the future to make it necessary the New Towns Act already makes it possible. We have deliberately not attempted anything more by way of amendment of the New Towns Act than the minimum needed to pave the way for simultaneous consideration of Part III and non-Part III proposals for transfer of new town housing where appropriate.

For the reasons I have given, the present amendments, Nos. 9, 10 and 20, are therefore not acceptable, and I must ask the noble Baroness to consider withdrawing them.

Baroness David

My Lords, the Minister is putting words into my mouth. I did not say that we wished all the houses to go to the districts. We want some of them to be able to go to the districts. I must emphasise that the waiting lists at the towns involved are quite considerable: over 5,000 at Basildon; nearly 2,000 at Crawley; over 2,000 at Milton Keynes; 3,350 at Peterborough; 4,517 at Warrington; and nearly 2,000 at Wrekin, which concerns Telford new town. So these districts are already having difficulty in housing the people in their areas who need housing, and this is what we are anxious about. We do not mind at all some houses going to housing associations. We are perhaps worried about their going to private persons, and the new clause, Clause 19, says "any person". That is what lies behind the worries of the noble Baroness and myself. The Minister has given some assurances about the consultations which will take place, but may I take it from him that tenants will be consulted before he comes to any decision? Can he answer that question?

Lord Skelmersdale

My Lords, with the leave of the House, perhaps I may say that I have made it quite clear that where consultation is appropriate—and in any case that I can currently envisage it would be—the tenants will be consulted.

Baroness David

My Lords, in view of the assurances that the Minister has given and in view of what he told both the noble Baroness and the deputation from the new towns that he saw—that their views will be taken into account before anything very drastic happens—I am prepared to withdraw the amendment. I hope that what we have said about the need for these districts to have a proper housing stock will be kept very fully in mind by the Minister, whose responsibility it is to deal with the new towns now; so it will be up to him to make sure that these promises and expectations are lived up to. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 10 not moved.]

Clause 22 [Determination of price for leasehold enfranchisement]:

Baroness Hooper moved Amendment No. 11: Page 39, line 24, leave out ("notwithstanding that") and insert ("where"). The noble Baroness said: My Lords, on behalf of my noble friend, in moving Amendment No. 11, I wish to speak also to Amendments Nos. 12 and 13. Amendments Nos. 11 and 12 fulfil the undertaking which I gave during the debate on Clause 22 at Report stage that the Government would consider further the question of transitional provisions. I first remind your Lordships that the Leasehold Reform Act 1967 originally only gave rights of enfranchisement to leaseholders whose homes were in the lower rateable value bracket. The amendments made to the Housing Act 1974, which was a Bill introduced by a Labour Government, allowed leaseholders in a higher rateable value bracket to enfranchise, but on different terms. Those terms were generally held to be much closer to market value than those applying to houses of lower rateable value.

One of the key differences between the 1967 terms and the 1974 terms, if I may refer to them in that way, was that whereas when enfranchising under the 1967 terms it is assumed that the tenant has exercised his statutory right to a 50-year extension lease whether or not he has actually done so, under the 1974 terms that assumption is not made, with the result that a higher price is payable.

However, the Hickman judgment enables a leaseholder with a house in a higher rateable value bracket to achieve a lower price for enfranchisement if he first applies for an extended lease under Section 14 of the 1967 Act, and then applies for the freehold under Section 8 before the date on which the original lease would have expired. It does not seem very profitable to speculate now on Parliament's intention in 1974, but what one is entitled to say is that the situation revealed by the Hickman judgment, under which there can be two entirely different valuations for the same house depending on the route to enfranchisement chosen by the leaseholder, is anomalous. That being so, once the matter was brought to light by the judgment in the Hickman case, which produced striking differences in valuation depending on which set of assumptions was adopted, it follows that the sooner the loophole can reasonably be closed the better.

We are concerned, however, that any change in the valuation assumptions should not affect cases which, although they may be based on the loophole, are already well advanced. Indeed, this was the issue on which much of the debate at Report stage focused. We acknowledged that Clause 22, as it emerged from Committee, was not acceptable in this respect. Therefore Amendments Nos. 11 and 12 tabled by the Government are intended to deal with cases in the pipeline which are far advanced. These amendments strike a balance between the interests of landlords and tenants. They ensure that any leaseholder in the higher rateable value bracket who has already applied for enfranchisement under Section 8 of the 1967 Act, or who does so by the time this Bill receives Royal Assent, will be able to enfranchise on the Hickman terms. Any leaseholders who apply for enfranchisement after Royal Assent will be subject to the new valuation assumptions unless the landlord and leaseholder reach agreement before commencement, in which case the agreement stands and the case cannot be reopened. With these amendments we have, I think, dealt with the majority of the cases which were causing concern at Report stage.

We have considered carefully the points made by noble Lords who argued that the new valuation assumptions should not apply where a leaseholder had applied for an extended lease under Section 14 of the 1967 Act. Some examples have been drawn to our attention of cases where a leaseholder has been attempting to secure an extended lease for well over a year and has not been able to finalise the matter. Leaseholders in those cases deserve sympathy.

The difficulty that I have with the amendment tabled by the noble Lord, Lord Ezra, is that it does not distinguish those cases from others where leaseholders may have applied for an extended lease recently with the intention of taking advantage of the Hickman judgment. It would be casting the net too wide to take all those cases on board and exempt them from the new valuation assumptions. I beg to move.

6 p.m.

Baroness Hooper moved Amendment No. 12: Page 39, line 26, leave out from ("given") to end of line 27 and insert ("after the passing of this Act, notwithstanding that it was given before the commencement of this section, unless the price has by commencement"). The noble Baroness said: My Lords, I think there may be some discussion on this point. I beg to move.

Lord Ezra moved, as an amendment to Amendment No. 12, Amendment No. 13: Leave out from ("unless") to the end and insert— ("either the tenant or any predecessor in title of the tenant has before 10 October 1986 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 or the price of the freehold has by commencement").

The noble Lord said: My Lords, I should like to express appreciation to the noble Baroness for having carried out the undertaking she gave on Report. There is no doubt that what is proposed by the Government in Amendments Nos. 11 and 12 goes a long way towards solving the problems of retrospection. However, as the noble Baroness remarked, there are still those who have sought to acquire their enfranchisement through the route of extended tenancy believing that to be a valid procedure. That is not dealt with under her amendment. It is for that reason that the noble Baroness, Lady David, and I have moved this further amendment.

We believe that if this provision were added to the government amendment it would entirely cover the point about retrospection, on which I believe the House has strong feelings. There was a debate about the cut-off date. On Report the noble Lord, Lord Coleraine, said that unless we had an early enough cut-off date many people could leap through and seek to take advantage of the alleged loophole. That is why we have suggested in Amendment No. 13 the cut-off date of 10th October. That was the date in Committee when the noble Lord, Lord Coleraine, moved his amendment which is now Clause 22.

I should like to ask your Lordships and, in particular, the Government to reconsider the matter in the light of the evident concern shown by the House on Report on the issue of retrospective legislation. We do not want people to continue to take advantage of a loophole which will be closed, but we want to safeguard those who have properly notified freeholders of their desire to obtain extended leases, with a view eventually to obtaining the freehold, and did so in the knowledge that that appeared to be a proper course at the time. It is for that reason that we advance this further amendment, which I hope will have your Lordships' support. I beg to move.

Lord Coleraine

My Lords, before I refer to the amendments which we are discussing I should like to ask for your Lordships' forbearance while I refer to a misunderstanding which may have been current in the House last week and which was manifested in the speech of the noble Lord, Lord Elystan-Morgan, who took the view, and expressed it fairly forcefully, that what I had called an anomaly or a loophole was Parliament's plain intention. Moreover, he sought to persuade your Lordships that that was manifest from the judgment of Lord Justice Fox in the Mosley v. Hickman case. What the noble Lord then said with regard to the judgment was to the effect that the Lord Justice was clearly saying that what the landlords were objecting to in the Hickman case was not an anomaly as such, but a clear, cold-blooded, clear-headed, deliberate decision of Parliament.

I think that the answer to that is made clear by looking carefully through the judgment. I do not propose to do that now. The judgment of the Lord Justice was to the effect that there were anomalies but that it was up to Parliament and not the Court of Appeal to correct them.

On the point of what Parliament intended, the noble Lord invited me to quote the Official Report of Parliament which supported my contention. At the time, I was unable to do so. The facts are clearly established in cols. 1763–8 of Hansard of 24th July 1974. My noble friend Lady Young at that time moved the amendment which is now Clause 9(1A) of the 1967 Act. Any reading of her speeches will make it abundantly clear that she thought that she was providing enhanced compensation for freeholders of higher rateable value houses.

It is true that at that time the noble Lord, Lord Hughes, for the Government, drew attention to the possibility that the amendment was flawed and would not have the result that my noble friend intended. He did so in terms that made it clear that he did not have in mind the loophole that eventually transpired. There was nothing in his speech to suggest that it was Parliament's intention that the Hickman principle should have effect.

I am for concurring with Amendment No. 12, but I do not accept the force of the arguments put forward by the noble Lord, Lord Ezra, with regard to Amendment No. 13 in so far as it allows in all qualified leaseholders who after the publicity following the Court of Appeal judgment in March of this year served notice under Section 14.

That may not drive a coach and horses through Clause 22 but it throws a substantial wedge into the clause. There are a number of cases where astute lessees, having discovered following the judgment that there was this possibility, served the necessary notice under Section 14. It would not be reasonable to bring those people safely through the commencement provisions of the clause. However, I am persuaded that there are a number of cases—I no not think that they can be counted on the fingers of more than a hand or two—where lessees who served their notices under Section 14 well before the judgment in the Mosley v. Hickman appeal may well be said to have stood by the decision of that judgment and have expected to profit from it when their reading of the law was found to be correct.

The noble Lord's amendment was tabled only late. I did not see it until this afternoon. I suggest to my noble friend that fairness would be done as between tenants and landlords in such cases if the general substance of the noble Lord's amendment were to be put into effect but with the cut-off date put back from 10th October to the day after the Court of Appeal judgment, I believe that was 5th March.

Lord Elystan-Morgan

My Lords, I should like first to deal with the remarks of the noble Lord, Lord Coleraine. I argued on the last occasion that this was no loophole in the sense that Parliament had misconceived the position completely and had passed legislation to an effect wholly different from what it had intended. With the greatest respect to the noble Lord, who has put his case with great fairness and with his usual charm, I still hold to that view. Indeed, with great respect, that was the attitude of the learned Lord Justice Fox and the other judges in the Hickman case. There is nothing in my reading of that judgment to suggest that the court thought that there was post-1974 any dubiety whatever in relation to the law. My reading of the debates of 1974 confirms the view that there never seems to have been any argument at all about the situation. Parliament may or may not have been doing a logical thing. But it knew what it was doing, and it was doing it quite openly and deliberately.

As to the suggestion by the noble Lord on how government amendments Nos. 11 and 12 can be improved, I respectfully suggest that it is illogical for two reasons and that the House should give urgent consideration to supporting Amendment No. 13 moved by the noble Lord, Lord Ezra. It is illogical in my respectful submission for these reasons. First, it is not as if the Court of Appeal in March this year changed the law. Had there been a fundamental change in the law, that would be a significant watershed that could be picked out in this legislation as being the significant date. But that is exactly what the Court of Appeal did not do. It agreed unanimously with the decision of the Lands Tribunal and said, in effect, that the law was what it had always been thought to be for the last 12 years, from 1974 onwards. Therefore, logically, March 1986 has no significance because it changed nothing. It did not create any new scene whatever. It merely endorsed what legal practitioners had thought was the situation over the 12 years from 1974 onwards.

Secondly, it is illogical for a totally different reason. The justification for doing anything to ameliorate what otherwise would be the unfair rigour of Clause 22 as it now exists is retrospection. It is with abhorrence that Parliament has always recoiled from doing something that is retrospective. A citizen who has done something relating to himself or to his property, acting in the genuine belief, fostered by the atmosphere that existed at the time, as to the state of the law at that time, then finds that Parliament by some later Act has changed the whole situation; has leapt over his back, as it were, turned the clock back in time and made his position greatly prejudiced.

Lord Monson

My Lords, will the noble Lord not agree that all the arguments he advances against retrospection could be advanced with equal force against the original Leasehold Reform Act itself?

6.15 p.m.

Lord Elystan-Morgan

My Lords, I accept totally that whenever Parliament changes a law there are going to be people who are disappointed. There are people who will say that the dividing line has been drawn. One cannot pass an Act of Parliament without there being a dividing line. There will be some people who are inches this side of the line and others who will have the good fortune to be inches away from it. But the difference between the situation put by the noble Lord and the situation with which I am dealing is this. When the Leasehold Reform Act 1967 and the Act of 1974 were being considered there was ample publicity in respect of the intention of Parliament to change the law. I do not believe that any freeholder in the United Kingdom could not have known what was likely to happen. I do not cavil for a moment at the great publicity that was properly given to the anticipated decision of Parliament in that connection.

A person who had to make certain vital decisions in the relevant months of 1966 and 1967 would be able to make them in anticipation of what was likely to happen in Parliament at that time. That is not the

situation here. The situation here is that up to a fortnight ago—up to 10th October this year—there was no suggestion that the law was to be changed. An amendment was put down in the name of the noble Lord, Lord Coleraine, to which many persons may not have attended as assiduously as they might. It was well down the order and late into the night. A suggestion was made in the amendment to the Government. It was accepted suddenly and with such alacrity by the Government that it made the conversion on the road to Damascus seem a process of total vacillation. I do not know whether there is to be a similar conversion in respect of the suggestion made by the noble Lord at the moment. But no one can compare the tremendous warning that would have been given to property owners in 1966 and 1967 with the swiftness and suddenness of the government decision a fortnight ago.

One can do one of two things, in my submission, with retrospection. One can either say that one will have nothing to do with it or one can compromise oneself in relation to it. This amendment and the suggestion of the noble Lord is a compromise. It is a compromise that accepts the evil of retrospection. The amendment of the noble Lord, Lord Ezra, is a stance that is to the credit of Parliament, saying that we will have nothing whatever to do with it. I do not believe that the number of cases is very considerable. My advice from practitioners in the field is that there are very few indeed.

I venture to suggest, however, that they form two very meritorious groups. The most meritorious is the person who has said to himself that he will seek under Section 14 of the 1967 Act a new and extended lease. That is not just a case of reaching up to the tree and taking the tremendous bonus that is within his grasp. It is a very deliberate decision that might involve him in paying a very much higher rent—something that he has to do in a most deliberate and cold-blooded way. He may have committed substantial financial resources, tying himself to a lease that has a long time to run. He does so fully intending, some years later, to avail himself of what he regarded as a twin possibility; that is, of enfranchisement. He would not have contemplated for a moment the extended lease were it not for the possibility and, so far as he was concerned, the certainty, of enfranchisement. Does Parliament really say that it should not help that man? Does Parliament say that it should suddenly, after 12 years, change its mind and say to that man, "We are very sorry. You took that decision in good faith. But you are now saddled with it". That, I respectfully suggest, is the evil of retrospection. There is no compromise with it. One either rejects it or espouses it.

The second category is perhaps not quite as meritorious. It is the man who says to himself, "I can do one of two things here, or both. I can have an extended lease, or an extended lease and later enfranchisement. I certainly have not made up my mind as to enfranchisement. I shall have an extended lease first and keep the option open". My sympathies are not quite as considerable in relation to him, but it is nevertheless a meritorious case. In my submission those are two categories of people who do not deserve to suffer from retrospection.

I have been told—I am not in a position to call evidence in relation to this—that in some cases landlords have deliberately slowed down the process in the hope that they would thereby put off a person from having an extended lease. There are cases that have been quoted to me where landlords, believing that they were acting in the best interests of the freeholders, have deliberately delayed matters by making all manner of proposals with regard to an extended lease. If there are such cases—and I put my case very moderately on this basis—the position of the persons in the two categories that I have mentioned is even more meritorious.

I have spoken at considerable length. I am grateful to the House for its attention. At this late stage in the Bill I urge the House to give further consideration to whether it is worth prejudicing its own good record in relation to retrospection by considering this compromise in a situation where no compromise should be contemplated.

Lord Boyd-Carpenter

My Lords, I seek to intervene on one point only. I do so solely because of the way in which the noble Lord, Lord Elystan-Morgan, brushed aside the —I thought—highly pertinent interjection of the noble Lord, Lord Monson. The noble Lord, Lord Monson, on the question of retrospection invited the attention of your Lordships to the original leasehold enfranchisement legislation. As I happened to be the Front Bench spokesman of my party in 1966 when the first Bill was introduced—I see that the noble Lord, Lofd Elystan-Morgan, recalls this—I am pretty familiar with that situation.

One simply cannot brush aside this fact. There were obviously many merits of leasehold enfranchisement. I see my noble friend Lord Thorneycroft is here. He did not altogether share my views at the time on that issue. However, it is a long time ago and he has no doubt forgiven me. But I think that even he will agree, and the noble Lord, Lord Elystan-Morgan, will agree on reflection, that when someone had granted a long lease many years before there was publicity or talk of leasehold enfranchisement, he was entitled to assume that at the end of the lease (perhaps 99 years, which was fairly normal) he would recover possession of the property and be able to grant a new lease at a higher rent, to occupy it or to demolish and rebuild it; he would regain possesion of his own property at the end of the lease which a tenant, or the predecessor of the current tenant, had agreed.

The state came along and in its wisdom, or, as I have always thought, lack of wisdom, years after the original bargain had been made and years after it was too late for the landlord to decide not to grant a lease to the tenant, altered the terms of the bargain. It gave the tenant the right to purchase the premises and to acquire the freehold on terms which were somewhat stringent, and it altered the whole bargain retrospectively.

I do not think therefore that we help counsel on this matter, which is a very much smaller issue that arises on this amendment, by just brushing aside the point of the noble Lord, Lord Monson. It is a valid one. The noble Lord is entitled to suggest that those who get very heated about retrospection in many cases may have responsibility for the biggest retrospection of all in our lifetime—the leasehold enfranchisement legislation.

Lord Elystan-Morgan

My Lords, I wonder whether the noble Lord before he sits down finally will kindly give way. If he is correct in his contention that to change property rights, whether created 20 or 200 years ago, is wrong and therefore retrospective, it would mean—would it not?—that we should still be stuck with the Statute of Mortmain. None of the 1925 legislation would have been passed and the dead hand of previous centuries would still be upon our land. That surely is a proposition which, even for a debater as skilful and brilliant as the noble Lord, is an impossibility.

Lord Boyd-Carpenter

My Lords, even for a debater as skilful and brilliant as the noble Lord, Lord Elystan-Morgan, that is—and he knows it from the expression on his face—a very bad point indeed. We are not involved here in that great measure, the Statute of Mortmain, or others. When we talk of leasehold reform we are involved in interference by the state through legislation in a bargain made between a landlord and a tenant at a time that the landlord, when he originally had made the agreement, could have had no idea what was going to happen, and the position is altered to his disadvantage.

Viscount Brentford

My Lords, let me briefly say that I warmly support Amendment No. 12 moved by my noble friend the Minister. I believe that it gets to the root of the problem. I am very attracted to the proposal made by my noble friend Lord Coleraine to meet the problem of the other category of people who have in good faith initiated their proceedings earlier. I do not know whether there is any way of implementing that at this late stage.

Baroness Hooper

My Lords, as previously, these amendments have inspired a most interesting exchange of views. In spite of the reservations expressed by the noble Lord, Lord Elystan-Morgan, I hope that there is general agreement that the Hickman judgment revealed an anomaly in the Leasehold Reform Act 1967, as amended in 1974, that that anomaly must be removed and that Clause 22 achieves that aim.

I had thought that the question of retrospection had been covered in our discussions at Report stage. I refer the noble Lord to my remarks on that occasion. We believe that Clause 22 is not retrospective even in its present form. It may disappoint tenants' expectations, but that is not the same thing. The difficulty throughout had been how to deal with the cases in the pipeline.

The Government acknowledge that leaseholders whose cases are far advanced ought not to be deprived of the benefit of the Hickman terms. On the other hand, we must also be fair to the freeholders. I do not think it would be reasonable to allow those who have only recently submitted Section 14 notices in order to take advantage of the anomaly to get through. We believe that the Government's amendments deal with most of the deserving cases. However, I accept the point forcefully argued by the noble Lord, Lord Ezra, that there appears to be a handful of leaseholders who applied to extend their leases many months ago in the expectation of being able to benefit from the Hickman terms, and in advance of the judgment. I can see the arguments for trying to deal with these cases.

While I do not think that the amendment of the noble Lord, Lord Ezra, is acceptable as it stands, for the reasons I stated before—because it still casts the net too wide—whether it is another conversion on the road to Damascus or not, I am also attracted by the proposition put forward by my noble friend Lord Coleraine that the cut-off date should be the date of the Appeal Courts' judgment. That would enable the small number of leaseholders who have been negotiating extended leases over a long period to benefit, but would exclude people who have only recently tried to take advantage of the anomaly. The point of using the date of the Appeal Court judgment is that it was only at that point that the anomaly in the Hickman case became widely publicised. As my noble friend has already said, this led a significantly large number of leaseholders to try to take advantage of it.

Therefore, in urging the House to accept the Government's amendments, I suggest that if the noble Lord, Lord Ezra, will agree to withdraw his amendment the Government will consider whether they can introduce in another place an amendment combining the amendment of the noble Lord, Lord Ezra, and the suggestion put forward by my noble friend Lord Coleraine.

6.30 p.m.

Lord Ezra

My Lords, I think we must all have been very impressed by the powerful speech by the noble Lord, Lord Elystan-Morgan. He did make it clear beyond any doubt at all in my mind that the real change that is being introduced in the 1967 and 1974 Acts is by Clause 22, which has been inserted in this Bill, and not by the Hickman judgment, which simply confirmed what was already thought to be the law beforehand. The real change was introduced in Clause 22. It is for that reason that in Amendment No. 13 the cut-off date indicated is the date on which that amendment was proposed and accepted by the Government, namely 10th October. I think that that is the entirely logical and fair position.

Before concluding, perhaps I may make one further point—that the applications for extended tenancies in these cases have been pending a very long time. Those who have sought this two-stage approach to obtaining their freehold at the end of the day probably gained nothing at all, because had they obtained their freehold by the single route earlier, obviously the then standing prices of property would have applied in assessing the price of the freehold. However, as we know, particularly in the London area where most of these cases that we are debating have arisen, there has been a massive inflation in house prices in recent years. I do not think that any benefit will have accrued to these people and they have been delayed for a very long time.

Therefore I should have thought it not at all unreasonable in all the circumstances that the amendment should be accepted. However, the noble Baroness made it clear that she would not go ahead with this proposed modified version in another place unless I withdrew the amendment. I should very dearly have liked to put it to the vote but I should not like to risk the position of those who could thereby be disadvantaged. We are in a great dilemma. Those of us who are totally opposed to retrospection would like to put it to the vote. However, if perchance we have not fully persuaded your Lordships to vote with us—and no doubt the noble Baroness would indicate her view by nodding her head or otherwise—then I take it that the Government will not move their proposed amendment in the other place. I imagine that if we were to lose the vote nothing would be done. Perhaps the noble Baroness would indicate whether or not I am correct in that assumption?

Baroness Hooper

My Lords, yes.

Lord Ezra

My Lords, I am in this grave dilemma. There are people's interests involved here. On balance I have come to the conclusion that because there are people's interests which might be jeopardised—although I totally disagree with that interpretation of retrospection—and on the firm understanding that an amendment on the lines that I have proposed but with a different cut-off date will be introduced at the Commons consideration of this matter on Monday, I beg leave to withdraw the amendment.

Amendment to Amendment No. 12, by leave, withdrawn.

Clause 26 [Power to give assistance]:

Baroness David moved Amendment No. 14: Page 48, line 17, at end insert— ("( ) any other matter which is requisite for the purpose of establishing or maintaining activity providing employment.").

The noble Baroness said: My Lords, we come back again to urban regeneration grants, and my effort to insert something else into the clause about employment. The amendments reads: Any other matter which is requisite for the purpose of establishing or maintaining an activity providing employment".

The problems of the country's inner urban areas are now serious. Unemployment has grown from 9 per cent. in 1981 to 24 per cent. now and it is increasing. The depth of these areas' problems has been highlighted by frequent bursts of rioting over the last six years.

The local authorities in these areas have done everything in their power to promote development. In many ways their work has been similar to what is proposed in this Bill—the provision of factory premises, infrastructure and grants to improve buildings. The persistence of these areas' problems shows that this policy has been only partially successful. Experience suggests that something more than cash is needed to improve infrastructure, buildings and land. There is a crying need for financial support for employment generation. Ideally, the economic and physical regeneration of these areas should proceed together.

The inability of grants for physical regeneration alone to secure actual regeneration is clearly illustrated by the reluctance of the private sector to take up urban development grants even when these are readily available. Indeed, some local authorities have actively advertised the availability of UDGs for their areas in the national press but this has still generated very little interest from the private sector. I fear that the availability of URGs introduced by this Bill will be no more successful in stimulating private sector interest in many of our less attractive urban areas. The absence of any private sector interest in building or renovating property in such areas will effectively mean that they will be unable to benefit from the availability of these grants.

I cannot help feeling that the Government are unaware that the United Kingdom is now two nations—North and South. The contrast between these two areas is epitomised by the differences between Liverpool and London. In the former the availability of grant support from the UDC to renovate dockland warehouses has done little to bring jobs to these buildings, most of which are empty. This has depressed the demand for property, and very little new building is taking place. On the other hand, in London the position is different. The surplus of enterprise coupled with the shortage of suitable property means that the demand for the URG will be fierce. These grants may end up being a way of fuelling the so-called "big bang" by ensuring that most of the available URGs go to building further dealing floors on Canary Wharf or flats for £60,000 a year on the banks of the Thames. Is this what the Government means by urban policy—that those who have should be given more, and those who have nothing should be starved?

In order to avoid the danger of an excessive geographical concentration in the uptake of this grant it is imperative to ensure that eligibility for the grant is drawn as widely as possible to encompass not only remedial works to buildings or improvements to infrastructure and land but any matter which is requisite for the promotion of employment. Such a widening of the eligibility criteria will ensure that the Secretary of State may additionally provide financial support to secure the growth of new businesses in these areas. This is needed to secure the growth of long term employment—real jobs. The type of "one-off-assistance that I have in mind is the provision of finance to enable firms with promising projects to obtain assistance for preparing business plans, employing temporary specialists on production, marketing or technical matters, and limited rate- or rent-free periods. The availability of this form of assistance, which is relatively cheap to provide, often makes the difference between life and death for a new start-up firm.

In limiting the availability of the grant to property-related developments, the Government ignore the fact that it is the use to which the property is put that is important. If new enterprise is supported it may in time create an effective demand for existing and new buildings and lead to the infrastructural improvements in these areas which the Government hope the grants will achieve. I believe the Government have provided support to the wrong side of the equation. What reasons have the Government given for opposing my amendment in the past? To date, a total of four reasons have been given. First, they argued that the improvement of property and infrastructure will itself create jobs and so will the firms which ultimately occupy these premises. I agree that that will be so in the limited number or inner city areas which the private sector finds attractive. However, it will not be so in the less attractive urban areas. There, unemployment will be as high as it has always been, and development as sparse.

Secondly, it has been argued that it is not part of the DoE's remit to run an industrial employment policy. That is a dishonest argument. The DoE is responsible for, first, the Development Commission, which runs COSIRA and actively supports business development in rural areas. Secondly, the DoE is responsible for the existing UDCs on Merseyside and in London's docklands, which actively promote the industrial development of their areas. Thirdly, the department also administers the urban programme, which has a direct economic impact on firms in urban areas. In fact, the department already supports business advice and counselling centres for small firms through this programme. What is entailed by the amendment is well within the DoE's existing remit.

Thirdly, the Government argue that the amendment will duplicate the assistance given by the departments of Employment and Trade and Industry. That is not so. Those government departments do not provide the type of assistance which I mentioned earlier. They do not provide assistance for business plans, rent- or rate-free periods, or help to small firms wishing to employ technical consultants. Those departments more often than not refer firms requesting this type of assistance to local authorities who often do help. Local authorities in metropolitan areas are now suffering constraints under Section 137 and the demise of their local Act powers which restrict the amount of money they can allocate to economic development and to supporting these firms.

The fourth objection that has been put forward is that the broad amendment could be used to finance venture capital investment in firms, which is against the Government's ethos, though everybody else, including Business in the Community, believes that this is in short supply. I reiterate what I said during the Report stage: the Bill as currently drafted cannot be used to take equity in firms, though I have no doubt that the Minister may try to raise that old bogey again.

In using these arguments the Government have missed the whole point of my amendment; namely, that it will give the Minister the opportunity of fostering the development of all metropolitan areas by providing support both for physical regeneration and for the growth of business. The Secretary of State does not have to use these powers. I only wish them to be available so that he may use them should suitable projects be available which need such support and whose success would greatly benefit the inner urban areas. I hope that, having tried, tried and tried again, my third effort will be more successful. I hope that the Minister will this time smile on the amendment. I beg to move.

Lord Boyd-Carpenter

My Lords, as always, the intentions of the noble Baroness are admirable. However, I hope that she will not mind my saying what a pity I thought it was that she introduced the North-South contrast argument which so often is heard from the Opposition Benches. I hope that, on reflection, she will realise the amount of damage done to the developing areas in the North by the placid assumption that while the South is prosperous the whole of the North is a devastated area.

There is no better way of discouraging industrialists who are contemplating where to put their plant than to tell them that a whole area of this country is in a hopelessly bad condition. It simply is not true. There are very considerable developments taking place in the North-East. There are splendid developments going on in Scotland. The noble Baroness quoted Liverpool, but quite frankly the way in which Liverpool and its city council has conducted its affairs is a self-inflicted wound and a special case. I agree with the noble Baroness that no sane industrialist would set up business in Liverpool, but that is not true of the whole of the North. It really is a great pity that someone with the authority of a spokesman—or perhaps I should say "spokesperson"—on the Bench opposite should give support to the thoroughly unsound and unsubstantiated North-South contrast.

As regards the terms of the amendment itself, I doubt whether they would do much harm, because if the noble Baroness looks at the beginning of the clause she will see that the crucial words are: with the consent of the Treasury". If the Treasury were to play on any such proposal, it must have changed very radically indeed since the days when I had some connection with it. Therefore I do not think that if these words were to be included in the Bill they would have any effect. However, that is not an argument for putting them into the Bill. They are, in my view, unduly and excessively wide.

The amendment says: any other matter which is requisite for the purpose of establishing or maintaining an activity providing employment". A pornographic bookshop provides employment and so, I understand, do the sex encounter establishments which in a recent Private Bill, Westminster City Council took powers to license. There are all kinds of thoroughly disreputable activities which provide employment. For the legislature to lay down that any activity—good, bad, indifferent, socially harmful or socially meritorious—should be brought within the scope of grant seems somewhat irresponsible. In my view, the various categories already in the clause are quite adequate. I very much hope that my noble friend will maintain that view as he did at an earlier stage.

6.45 p.m.

Lord Skelmersdale

My Lords, I am grateful to my noble friend Lord Boyd-Carpenter for his comments on what the noble Baroness said as regards devaluing the North. Part III of the Bill does exactly the opposite. Its purpose is to give my right honourable friend a comprehensive power to provide assistanc for the regeneration of the physical fabric of run-down urban areas wherever they might occur in the country. It was not intended to enable him to run training programmes or to provide start-up grants for firms or to arrange for business advice to people thinking of going into business on their own. There are already powers that are available for those purposes.

In her speech just now, the noble Baroness made the perfectly valid point that new or expanding firms often need assistance in preparing business plans or cashflow forecasts or obtaining specialist advice. At this late hour it would not be appropriate to debate the interesting questions raised by the noble Baroness, in moving the amendment, as to whether or not such assistance should be provided by government departments. However, I can assure the noble Baroness that there is already on the statute book a general power for the Secretary of State, and that means—this is an important point—any Secretary of State, to: make provision for the giving of advice…to persons carrying on or proposing to carry on a business". That provision is to be found in Section 11 of the Industrial Development Act 1982 and it is the provision which, for example, my noble friend the Secretary of State for Employment uses to operate the small firms service and to give grants to local enterprise agencies.

As regards business advice, the amendment of the noble Baroness would not give the Government any powers that they do not already possess. The reason Part III of the Bill is needed is that the Government do not at present have general power to assist expenditure on land and buildings. Thus Part III fills a gap in the existing powers. The amendment made to Clause 26 in another place was made to ensure that expenditure on land and buildings could be directed towards creating local employment opportunities—a matter which the noble Baroness and the Government hold very dear.

In my view, the real complaint of the noble Baroness is not that Part III, as it stands, is too narrowly drawn, but that the Government's existing powers to assist firms to provide business advice and to support enterprise have not been administered in quite such a flexible way as she would wish. As I have just said, this is something which we could quite readily debate for hours, but I do not think that it arises on this Bill. Once again, like my noble friend Lord Boyd-Carpenter, I am un-persuaded of the case for the amendment.

Baroness David

My Lords, it would seem that my third try has been no more successful than my earlier efforts in Committee and on Report. However, I rather resent the way in which the noble Lord, Lord Boyd-Carpenter, jumped on one comment that I made and really concentrated on it, which I thought was unfair. I think that almost anyone would agree that the South-East part of England is rather more prosperous than other areas of the country; and house prices would perhaps bear that out.

Lord Boyd-Carpenter

My Lords, that was not what the noble Baroness said. If she had said that, which is a perfectly sensible remark, there would have been no criticism.

Baroness David

My Lords, I did not think that I needed to spell it out, but I shall not pursue it.

I am very disappointed with the response because I think this would have been a useful addition to the clause and might have meant that these grants were taken up more widely. However, at this time of night I have no alternative but to withdraw the amendnent.

Amendment, by leave, withdrawn.

Clause 34 [Hazardous substances—Scotland]:

Lord Skelmersdale moved Amendment No. 15: Page 70, line 12, leave out ("56") and insert ("56AA").

The noble Lord said: My Lords, this is a drafting amendment to make comparative effect in Scotland to the Report stage amendment that your Lordships agreed with the Government should be added to the Town and Country Planning (Scotland) Act which involved a new section on exemption of ecclesiastical buildings. This was misnumbered in the original amendment and this amendment gets it right. I therefore beg to move.

Clause 54 [Discrimination in exercise of planning 'functions]:

Lord Skelmersdale moved Amendment No. 16: Page 102, line 42, after ("1971") insert ("and such other functions as may be prescribed")

The noble Lord said: My Lords, last week I tabled an amendment in response to the noble Lord, Lord Foot, to make it unlawful for local planning authorities to practise racial discrimination in their planning functions. The House welcomed the amendment. However, that amendment referred only to planning functions under the Town and Country Planning Act 1971 and the Local Government, Planning and Land Act 1980. There are, however, provisions for other planning functions in other Acts, such as the National Parks and Access to the Countryside Act 1949, the Caravan Sites and Control of Development Act 1960, not to mention the Electric Lighting Act 1909. This amendment covers the other planning Acts and I beg to move.

Lord Skelmersdale moved Amendment No 17: Page 103, line 2, after ("1973") insert ("and such other functions as may be prescribed")

Clause 56 [Commencement]:

Lord Skelmersdale moved Amendment No. 18: Page 104, line 17, leave out ("and 18") and insert (", 18 and 21").

The noble Lord said: My Lords, this is a simple technical amendment. I beg to move.

Schedule 1 [Consultation before disposal to private sector landlord]:

[Amendment No. 19 not moved.]

After Schedule 4:

[Amendment No. 20 not moved.]

Schedule 5 [Housing: minor and consequential amendments]

Lord Skelmersdale moved Amendment No. 21: Page 129, line 8. leave out from ("In") to ("order") in line 10 and insert ("paragraph 14(2) of Schedule 11 and paragraph 8(2) of Schedule 22 to the Housing Act 1985 (procedure after compulsory purchase")

The noble Lord said: My Lords, this amendment, for which I apologise, makes a further minor correction of a mistake which was made in consolidating the law in the Housing Act 1985. The amendment puts the position back to what it was before the consolidation. I beg to move.

Schedule 9 [Listed buildings and conservation areas]:

[Amendments Nos. 22 and 23 not moved.]

Lord Skelmersdale moved Amendment No. 24: Page 179, line 11, leave out ("different").

The noble Lord said: My Lords, this is a technical Scottish amendment which brings the Scottish provisions fully into line with their English and Welsh counterparts. I beg to move.

Lord Skelmersdale

My Lords, I beg to move that this Bill do now pass.

It was, I must confess, with some trepidation that I opened my mouth to speak on Amendment No. I in Committee on this Bill, only to have it snapped shut by your Lordships with a jar that nearly broke my teeth. My faith in human nature was immediately restored when the House agreed with the Government that it was no longer appropriate to use primary legislation to vary the discount structure which is an integral part of our right-to-buy policy.

I am mindful at this late hour of my remarks to the noble Baroness, Lady David, before we even got into Committee, that the House would be thoroughly bored by the sound of my voice by the end of the first day. Now, some 34½ hours of debate later I can only say that if indeed she felt that, she brought a certain amount of that boredom on herself. What is done however is done, and I am very glad that noble Lords in all parts of the House have made the Government think and think again about their actions.

I am especially pleased that noble Lords on this side of the House and on occasions those on the Cross-Benches and on other sides of the House found themselves able to support the Government on particular amendments.

I particularly remember the whole subject of listed buildings when my noble friends Lord Salisbury and Lord Dilhorne helped me put my new responsibility in this subject into proper perspective. Naturally, I am extremely grateful to the right reverend Prelates the Bishops of Rochester and the Bishop of London for helping the Government come to what we all hope will he a lasting peace on the subject of ecclesiastical exemption. I can claim no credit for this beyond being responsible at the end of a long chain of Ministers of differing political persuasions for actually getting agreed changes on the statute book. Any credit that is due—and I believe it to be a great unsung story—belongs to my noble friend Lord Elton, whose work I merely continued and whose activities in government will I think be missed on all sides of the House.

Noble Lords

Hear, hear!

Lord Skelmersdale

My Lords, before we part with this Bill I must say one last thing. Nothing that I have done could have had a hope of succeeding without the invaluable help of my noble friend Lady Hooper, who displayed the astonishing ability to translate my often unformed thoughts first into words and then actions. My Lords I beg to move.

Moved, That the Bill do now pass.—(Lord Skelmersdale.)

Baroness David

My Lords, we are about to pass a Bill which is very different from the one which was brought from the Commons on 1st May. No fewer than 17 new clauses have been added (the seventeenth having been added this afternoon) as well as two new schedules. In addition, there have been substantial amendments to very many clauses and schedules. We had 354 amendments to discuss at Committee stage-80 per cent. of them from the Government—100 at Report stage, and 24 today. The result has been a very hard three weeks for all concerned with the Bill—I include the staff of the Public Bill Office—without the proper interval of two weekends between Committee and Report stage and without the usual three sitting days between Report stage and Third Reading.

I hope the Government are grateful for the Opposition's co-operation in all this. But I would suggest that this is no way to legislate. The Bill, as I said, reached the House on 1st May. We did not have Second Reading until 30th July, three whole months later, with the result that we have been under intolerable pressure these last weeks with very inadequate time to consider and consult on government amendments and, indeed, to consider and decide on our own. I think it is right to complain of the overcrowded, overladen legislative programme that the Government have imposed on us this Session; it has been legislation that was ill-thought out originally, with drafting a running process.

This point was discussed yesterday when the noble Lord, Lord Peyton of Yeovil, asked his Starred Question and the feelings of your Lordships from all sides of the House were very clear. This Bill, certainly so far as concerns the housing clauses, is based very firmly on the doctrinaire thinking and ideology of the Government, with the implications not fully taken into account.

I admit there have been some improvements to the Bill, notably the acceptance by the House of Clause 1, extending the exceptions to the right to buy in respect of dwellinghouses for persons of pensionable age. I am very grateful for the all-party support this clause had. Of course I hope that the very strong feelings about the proper provision of rented accommodation for the increasing number of elderly in our society will be recognised by the Government and that they will leave the clause as it stands.

The Government have introduced the consultation clause and the schedule (Clause 6 and Schedule 1), as promised by the Minister at Report stage in another place. It would be ungracious not to be grateful for that. But from our repeated and pertinacious efforts at every stage, alas unsuccessful, to improve the schedule, it is clear we are not satisfied that adequate protection has been given to tenants before their homes are either sold to private developers or given over to be managed by private agents.

The vast amount of correspondence and representations we have had on the subject shows how strongly the tenants themselves feel, how dissatisfied they are and how distrustful they are of the promises made by developers. We are particularly disappointed that the right to a public inquiry when a substantial proportion of the tenants are dissatisfied and worried has not been agreed, thus treating public sector tenants in an entirely different way from those living in privately-owned property, who have the right if their homes are to be compulsorily purchased for slum clearance or highway development. We shall of course be collecting evidence on how things work out in practice and how the rights of tenants (about which the Minister seems so confident) are affected under new landlords and new management; and this applies too to what will happen when the new towns are wound up and the houses disposed of.

My noble friend Lady Nicol would have commented on the planning side of the Bill, but unfortunately she is ill today. She would have thanked the Government for the amended clause on opencast coal working and for the new Clause 54, dealing with discrimination by planning authorities. She is disappointed that there was not a more positive response to our amendments and particularly to the one that would have provided additional safeguards to SSSIs yet to be notified or renotified. If the Government are to assume a green image, as we are being led to believe, it would have been an opportunity for them to show their new image and their good intentions. As regards SPZs, we must hope that our fears are unjustified and that they will generate activity and employment and that democratic local control will not be passed by entirely.

I am sorry that the good sense shown in accepting that a new clause was needed to make unlawful discrimination in the exercise of planning functions was not followed by acceptance of the fact that racial harassment should be a ground for eviction. There is a great and very urgent need for action here. I believe the Minister recognises the problem and the need. I think it was a very great shame and pity that in the many months that the Bill has been passing through Parliament the Government have not found a way of doing something to allay the fears and despair of a great many of our fellow countrymen. I was about to say that I am similarly disappointed that we have not persuaded the Government to put back the law in relation to the homeless; but we have—we did that today. I did not think that we should win that and I am delighted that we did so.

I come back to what I said at Second Reading: that this Bill, in spite of its length and of its title, is a gigantic irrelevance in face of the actual situation in the country today. Its provisions do nothing to combat the crisis in housing which this country faces. With local authority waiting lists of over 1 million, and increasing all the time; with new housebuilding in the public sector falling from 133,000 completions in 1975 to 33,000 ten years later in 1985; and with the condition of the housing stocks, public and private, deteriorating and totally inadequate funds going into making improvements, the situation is desperate. The only expenditure on housing that is going up is that on bed and breakfast accommodation; and that is an absolutely ridiculous and wasteful use of resources that the local authorities, if allowed, could spend on creating new homes.

We are not happy with the Bill. However, I must end on a conciliatory note and say that in directing the Bill through Committee, Report and Third Reading the Minister had a huge and gruelling task which he undertook with good humour and great stamina. I congratulate him and the noble Baroness, Lady Hooper, who ably assisted him, on their performance and endurance. I should also like to thank my own noble friends on the Back Benches, and indeed friends on other Benches who have given great support to my noble friends Lord Dean of Beswick and Lady Nicol and myself, for their invaluable help and encouragement.

7 p.m.

Lord Davies

My Lords, I join in thanking the noble Lord the Minister, the noble Baroness and the officials for the most efficient and courteous way in which they have handled this very wide-ranging and complicated Bill. This is the first Bill that I have followed through the House, and I have been most impressed by the efficiency with which so many detailed points have been covered and also by the very considerable stamina which has been required by all concerned with the Bill.

I remain concerned about three matters in the Bill. The Bill sets out to increase the sales of council properties to tenants. Sales of houses will bring much-needed help to their maintenance from the non-bureaucratic private, do-it-yourself sectors. This I applaud. But the same does not apply to high-rise flats where the mix of private and council tenants may well complicate the arrangements over major structural repairs which may become necessary after the five-year initial period, when private owners may not be able to pay their share and when do it yourself would not be appropriate.

Secondly, on the sales of tenanted properties to the private sector, I remain concerned as to what happens to tenants if their new (or indeed subsequent) landlord goes "bust". I understand that the financial standing of the purchaser from the council will be checked by the Secretary of State; but would he, or indeed the tenants, have any say in any subsequent sale to a third party? I understand the point that the rights of the tenants will be preserved through these transactions, but these rights will not be of much use if their landlord is a liquidator with no money. How does the liquidator sell on a property that may become a liability rather than an asset because the necessity for substantial structural repair would become apparent? With some of the high-rise developments, such a possibility is not remote. Perhaps automatic return to the council at nil value in such circumstances would be a solution.

Lastly, I urge the noble Lord the Minister not to be badgered into increasing the amount proposed as the minimum sum for substantial improvements to properties to permit assured tenancies. The amount actually needed to bring the property up to a proper, fit and lettable standard should be decided by the approved landlord. Too high a figure may well make the necessary level of rent too high for prospective tenants.

Lord Dean of Beswick

My Lords, before we finally commit the Bill out of this House, perhaps I may briefly indicate my support for the sentiments expressed by my colleagues behind me, my noble friends Lady David and Lord Davies. I am not too sure, and never have been convinced, that the Bill will achieve what the Government think it will achieve in increasing the sale of council property and that type of thing. I still have one area of deep concern; that is, the question of the rights of tenants in the consultative process. Although the Government carried the day, I think that the size of your Lordships' vote against the proposal is indicative of a great deal of concern still in that area. Only time will tell how it will work out.

However, having said that, I do not think that in praising his predecessor, the noble Lord, Lord Elton, the Minister should in any way devalue his own performance on this Bill. He took over this Bill at a very difficult time. I agree with my noble friend Lady David that we were all lacking in time to deal with the Bill, but that was no fault of the Minister concerned. He acquitted himself excellently, at short notice and with good humour, on a very difficult problem, with the kind of conduct that we all expected from him. I am grateful for the way in which he dealt with some of the points that I raised, though I do not think that I won too much from him. I should like to thank him and the noble Baroness, Lady Hooper, for the way they have conducted the Bill. As I have said, only time will tell whether or not it is a success.

Lord Skelmersdale

My Lords, I think that all that remains for me to do at this very late hour is to stop blushing and to commend the Bill to the House.

On Question, Bill passed, and returned to the Commons with amendments.