HL Deb 26 April 1988 vol 496 cc122-90

3.7 p.m.

Lord Sanderson of Bowden

My Lords, I beg to move that the House to now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Sanderson of Bowden.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 12 [Assured tenancies]:

Lord Taylor of Gryfe moved Amendment No. 17: Page 9, line 15, at end insert—

  1. ("(3) (i) It shall be the duty of the landlord under an assured tenancy to provide a written lease at the commencement of the tenancy, containing such information as may be prescribed by the Secretary of State.
  2. (ii) In subsection (3)(i) above "prescribed" means prescribed by regulations made by the Secretary of State by statutory instrument, and a statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.
  3. (iii) Regulations under this section may make different provision in relation to different circumstances.").

The noble Lord said: We opened the batting yesterday on this Bill at a late hour on an amendment which affects the provision of accommodation for the homeless. I regarded that amendment as extremely important. Today we are similarly addressing very important matters in Amendments Nos. 17 and 18 which are being taken together.

Perhaps I may say at the beginning of our proceedings that it is our intention to be as helpful as possible in the passage of this Bill. This is not a serious matter of party political conflict. Some aspects of the Bill are extremely welcome. We support the setting up of Scottish Homes, so I suspect that we can discuss the Bill in a fair, reasonable way this afternoon.

That should apply particularly to the amendment which is now before the Committee. Its purpose is to ensure that future housing association tenants' rights are not less than those conferred on housing association tenants by the Tenants' Rights Etc. (Scotland) Act 1980. I suspect that this cause is dear to the heart of the Minister because of his own interest and experience in housing associations. Indeed, at the Second Reading of this Bill the Minister of State, Scottish Office, Lord Sanderson, said: The Bill builds on the policies successfully introduced in the Tenants' Rights Etc. (Scotland) Act 1980. That Act gave public sector tenants rights … which they had not had before. This Bill safeguards those rights and adds to them".—[Official Report, 11/4/88; col. 935.]

But, sadly, this does not apply to housing association tenants. This Bill does not add to their rights at all nor does it build on the important rights in the 1980 Act. For future housing associations the Bill in fact undermines the cornerstone of the principles on which those rights were founded, and future housing association tenants will be specifically excluded from those statutory rights which have been enjoyed since 1980 by existing housing association tenants.

Future housing association tenants will be assured tenants under the terms of Part II of the Bill, which represents a substantial reduction in the rights of the future tenants of housing associations and certainly diminishes the rights which they presently enjoy. The statutory rights which were given to housing associations in 1980 are at risk of being lost to any tenant who rents his home on an assured tenancy, and the Scottish Federation of Housing Associations feels very strongly about this issue.

One of the features of this right of security of tenure was the test of reasonableness with regard to proceedings for recovery of possession. In the 1987 Act there are 16 grounds on which a court may order possession against a secure tenancy. The Committee will be glad to know that I do not propose to read the 16 provisions that are mentioned, but there is a provision that the sheriff shall only make an order if it is reasonable to make an order and if suitable alternative accommodation will be available or if both the above factors apply in the case of ground No. 16 being satisfied.

The sheriff acts as the final arbiter and can only make an order for possession subject to certain conditions. The safety net of the test of reasonableness is one of the cornerstones of the security of tenure granted under the 1980 Act. This safety net would largely be lost if the Bill is enacted in its present form. I shall be happy to hear the Minister explain this provision. We must keep in mind the importance of the housing associations, for if there has been one bright spot in the development of housing policy it has been the building up of community housing associations where people have given voluntary service in this area. It seems rather sad that in the new housing revolution that is envisaged in this Act the rights in this area should be diminished. I beg to move.

Lord Morton of Shuna

I strongly support this amendment and Amendment No. 18, with which it is grouped. It seems to me quite extraordinary that where there is an assured tenancy the possibility still exists that anyone could consider that one did not need the lease to be in writing. A more obvious example of future confusion about who the landlord is, who the tenant is, what the subjects of the lease are, what they extend to, and whether the garden hut is covered could hardly be imagined.

I hope very much that the promise to consider the matter which was made in another place will be taken a bit further today so that we shall have the situation which we already have as regards the statutory sector under the Housing (Scotland) Act 1987. Under that Act the lease has to be in writing. I would suggest that that is the only way that one avoids interminable trouble about what are the terms of the lease.

On Amendment No. 18, I agree with everything that the noble Lord, Lord Taylor of Gryfe, has said. It is crucially important that the benefits that were given to tenants of housing associations in 1980 and consolidated in the 1987 Act should not now be taken away by a Bill which the Government say is aimed at improving the position of tenants. It would seem to me wholly wrong that these tenants and future tenants, by the back door, so to speak, should lose rights which this Chamber even last year considered it appropriate for them to have.

Baroness Carnegy of Lour

I wish to back up what the noble Lord, Lord Morton of Shuna, has just said about the question of the written lease for assured tenants. Some of the aspects of this Bill I find quite hard to follow. This one I do not find hard to follow at all. I am myself accustomed when letting houses or indeed when I have leased a house to require a written lease and to supply a written lease. I agree with the noble Lord that it is the only way to avoid trouble. I shall be interested to hear what my noble friend has to say about this, because it seems strange to me that we have not got any further on this particular aspect when the issue appears to be pretty clear. I hope that he will be able to make some encouraging noises on this issue. If not I shall be rather concerned.

3.15 p.m.

Lord Hylton

I should like to put down a marker, which is that these two amendments are likely to have very considerable significance for England and Wales. At the present time I understand that discussions and negotiations are going on to work out a form of secure housing association tenancy for England and Wales.

This is of considerable importance, as it would in my view be a great mistake to create two classes of housing association tenants—one the old kind with security of tenure and the other a new kind without that security. I do hope that the Government will be able to advance on what they have apparently already said in another place and that we shall be able to make some headway on these two amendments.

Lord Goold

First, I should like to apologise for my unavoidable absence during Second Reading. Secondly, perhaps I may declare an interest as a director of a house building company in Scotland. On Amendment No. 17 I am inclined to agree with Members of the Committee who have suggested that we should have something in writing. I hope that when the Minister replies he will mention this.

On Amendment No. 18 I am concerned at the suggestion that there should be security of tenure to the extent that is being suggested, because I think it is very important to attract new investment so that we can encourage more housing of the type that is so urgently required. But I fear that this investment will not come if succession is unlimited. I think that in this particular area we should be careful that we do not inhibit investment.

Lord Morton of Shuna

In Amendment No. 18 the security is restricted to tenants of housing associations. It does not apply to tenants at large.

Lord Goold

Yes, I am aware of that. But, as I say, we do not want to encourage housing associations into letting. We want to encourage new money for investment and I think that that could be inhibited if succession was unrestricted.

Lord Hylton

With respect to the noble Lord on the Government Benches who has just sat down, I think 1 am right in saying that succession rights apply only lo the tenants of private landlords and not to those of housing associations. It has of course been a practice of most housing associations to give another tenancy to a close relative living with a tenant at the time of his death.

Lord Hughes

I regret that the noble Lord, Lord Hylton, is not correct in connection with the rights of housing associations. Those rights are available at the present time according to the information which I have. On this question of succession the Minister when speaking on Second Reading pointed out that this was a follow-up to the Act of 1980, which was consolidated in the Act of 1978.

When the Secretary of State was speaking on the Tenants' Rights Etc. (Scotland) Bill on 4th March 1980 he used these words: We feel it would be inappropriate to provide a secure tenancy which could in effect be terminated without any legal recourse and without any impartial observer being able to judge the basis on which the landlord was bringing the secure tenancy to an end". What is being proposed in the Bill is a total about-turn on the stated policy, which undoubtedly meant a considerable improvement in the rights of tenants. What was given in 1980 is being taken back eight years later. In fact, one might go further and say that it was taken back a year later because it was included in the consolidation provisions of last year.

I therefore hope that the Minister will follow up what my noble friend believes was stated in another place by giving further consideration to those matters. Generally speaking, housing associations—I declare an interest by saying that I speak as the president of the Scottish Federation of Housing Associations—are interested in protecting the rights of their tenants. They do not like the idea of making any of the grounds for termination of a tenancy mandatory.

The noble Lord, Lord Goold, said that private investors might not like the idea of an assured tenancy held in perpetuity. However, that is not the position. Succession can be stopped by the sheriff if he is satisfied that that is the proper course to take. The proposals made by the Secretary of State in 1980 were achieved because 16 grounds were listed under which a tenancy could be terminated. The main test that the sheriff had to apply was the reasonableness of termination of a tenancy in all the circumstances. That seemed to be a good basis in 1980. The housing associations of Scotland believe that it remains a good basis. They do not suggest that there are no circumstances in which a tenancy should be terminated. However, as the Secretary of State then said, it is good that an impartial observer should make the decision, rather than one who is servile to the interests of either the tenant or the landlord.

I hope that the Minister will tell us, in the light of what has been said here and what was said in another place at a later stage, that he will have another look at the matter and hopefully return to the status quo. I hope that he will say that such terminations will be at the discretion of the sheriff in every case or, at worst, that mandatory grounds should be reduced to the lowest possible level.

Lord Mackie of Benshie

I support the amendments. Perhaps I may say that an assured tenancy is a misnomer. What is meant is very short tenancies. However, the two amendments give some assurances to the tenant and I hope that the Minister will regard them favourably.

Lord Sanderson of Bowden

Perhaps I may first say to the noble Lord, Lord Taylor of Gryfe, that I am delighted that he approaches the Bill in his customary spirit of co-operation. I hope that when I have finished my rather long statement—I apologise to the Committee for its length—he will see that the Government have been doing a lot of thinking since the Bill left another place.

I think it would be appropriate at this point if I were to fulfil my promise at Second Reading to inform the Committee of the outcome of the Government's consideration of the rights of future housing association tenants. It is relevant to both amendments which we are discussing at present.

It may be helpful if I rehearse briefly the events which have preceded this announcement. Various amendments relating to the rights of future housing association tenants were discussed at Committee stage of the Bill in another place. My honourable friend the Minister for Home Affairs and the Environment gave an undertaking that Scottish Office officials would undertake discussions with the Scottish Federation of Housing Associations, together with the Housing Corporation in Scotland, to clarify the issues and the views of housing associations in relation to those issues.

Those tripartite discussions took place on 29th February and proved extremely useful. I wish to record my appreciation of the helpful and constructive contribution made by both the Scottish Federation of Housing Associations and the Housing Corporation in Scotland.

Turning to the issues, the Bill as originally drafted provided for those who were tenants of most registered housing associations at the date of the commencement of the Bill and their statutory successors to retain their existing tenancy status for as long as they remained living in the same house. All future housing association tenants and existing tenants who moved to a different house would become assured tenants. Their rights, other than those relating to security of tenure, would be a matter of contract rather than statute.

The tripartite discussions addressed a number of areas for modification of the original position. Both the Scottish Federation of Housing Associations and the Housing Corporation in Scotland attached considerable importance to the retention of existing tenancy status for housing association tenants who move from one house to another within an association's stock. They emphasised the importance of such moves to housing associations' ability to manage their stock to maximum advantage and set out the case against burdening tenants with a change of house and a change of tenancy status simultaneously.

There was a very detailed discussion of the comparison between the position of future tenants under the terms of the Bill and that of existing tenants under the Housing (Scotland) Act 1987. The position is well summarised in the briefing note on Amendment No. 18, which many Members of the Committee will have received from the Scottish Federation of Housing Associations. It says: Comparisons between the rights conferred by the existing legislation (Part III of the Housing (Scotland) Act 1987 and those proposed in Part II of the Bill are far from straightforward. That is a fair-minded acknowledgement by the federation that the comparison of the two frameworks of rights is not as black and white as it has often been portrayed. Comparison of the two sets of provisions dealing with security of tenure—that is, the safeguards against a tenant being evicted from his or her home—is particularly complicated.

The tripartite discussions also covered the general question of providing rights by contractual, as compared to statutory, means. In this context, the Housing Corporation in Scotland offered the view that there would be scope for a model tenancy agreement for housing association tenants. It has offered to draw up such an agreement in consultation with housing associations through the federation as the representative body for the associations.

I turn now to the Government's decisions, some of which have already been given effect at Report stage in another place. I shall deal with those first. We have accepted the advice of the federation and of the Housing Corporation in Scotland in relation to existing tenants who move from one house to another within the stock of the same housing association. Clause 40 of the Bill now provides that such tenants will carry their existing tenancy status with them to their new house. We have not restricted this to tenants who move in furtherance of the interests of the housing association in the good management of the stock. It applies also for tenants moving to suit their own preferences. As well as being of practical assistance to housing associations and their tenants, this change reduces the number of people who will be affected by the change from the 1987 Act tenancy framework to the new framework introduced by the Bill.

In relation to that new tenancy framework, important changes were made to the security of tenure provisions relating to assured tenancies. One of the points which most concerned the Scottish Federation of Housing Associations, speaking on behalf of future housing association tenants, was that the availability of suitable alternative accommodation was a mandatory ground for possession. That could have meant in theory that a tenant could be moved to a suitable alternative accommodation without good reason. I say "in theory" because in this, as in other respects, we must bear in mind the high standards of housing associations as landlords and the improbability of a housing association seeking to move a tenant from his or her home without good reason. However, we responded to that anxiety by moving the relevant ground for possession from Part I to Part II within Schedule 5. That has the effect of making any transfer of a future tenant from one house to another subject to the sheriff's view as to the reasonableness of the move. That is in addition to the stringent and extensive requirements as to what constitutes suitable alternative accommodation which take up Part III of Schedule 5.

We have also moved another of the grounds for possession which concerned the federation—persistent delay in paying rent—into Part II of Schedule 5 so that it too will be the subject of sheriff's discretion rather than being mandatory.

As I have already said, comparison of the security of tenure provisions of the Bill and the 1987 Act is very complicated. Each set of provisions contains individual provisions giving a housing association the ability to obtain possession of one of its houses which are not contained in the other set of provisions. Whether or not one set is more favourable to an individual tenant than the other set is purely a matter of his or her circumstances. However, there is no doubt that the changes made in another place have brought the two sets of provisions much closer together. In the Government's view they are now broadly similar in effect.

I note what has been said about the Scottish Federation of Housing Associations' continuing reservations about the detail of the security of tenure provisions and I have read its briefing note myself. I think that its own statements illustrate that in practical terms its remaining reservations are overstated. For example, in relation to Ground 6 of Schedule 2 to the Bill it says that tenants should only be moved to allow demolition or reconstruction if suitable alternative accommodation is available and that, It would be contrary to the aims and objectives of housing associations to exclude this requirement". It is surely clear that, given the very strong view taken by housing associations as to their duties towards tenants, there will be no practical disadvantage to future tenants arising from the Bill's provisions.

Similarly, the federation's briefing note suggests that, in relation to tenants with more than three months' rent arrears: Discretion by the sheriff is the most appropriate way of dealing with the difficult problem of rent arrears". I beg to differ. The most appropriate point for the exercise of discretion appears to me to be the point at which the housing association decides to begin legal proceedings for possession. It is best placed to know whether there are problems with housing benefit or other mitigating circumstances. If, knowing all the facts, it decides that it should seek repossession I remain firmly of the view that it is important that it is certain of obtaining it. Smaller housing associations, in particular, could not be expected to cope with significant amounts of unpaid rent which they would be powerless to do anything about.

My general point is that we should not leave the nature of housing associations and the trust which is rightly placed in them to be good landlords out of account in considering the right structure for our legislation.

This principle is important in relation to the remaining questions about future housing association tenants' rights. The starting point for that consideration must be that nothing in the Bill prevents housing associations from conferring on their tenants whatever rights they think appropriate. The question is not what rights future housing association tenants should have. It is the mechanism through which rights should be provided and the degree to which statutory intervention in the dealings between housing associations and their future tenants is appropriate.

The tripartite discussions were useful in clarifying that the Scottish Federation of Housing Associations does not consider that all of the rights available under Part III of the 1987 Act should attach to future housing association tenants. It indicated in the discussions that it does not consider that housing associations wish either the right to buy or the right to be reimbursed for carrying out repairs to continue. It is therefore common ground between the federation and the Government that we should be concerned with choosing which among the rights in Part III of the 1987 Act it is appropriate to incorporate on a statutory basis into assured tenancies.

The Government have decided that one important area for statutory provisions is that dealt with by Amendment No. 17 relating to written leases. We shall bring forward amendments at Report stage to provide that tenants under assured tenancies are entitled to a written statement of the conditions of the tenancy. That will provide a framework for all other discussions about rights and ensure that both landlord and tenant are clear about their respective rights and responsibilities. I know that Members of the Committee opposite, and indeed on the Benches behind me, share the Government's view that this is a particularly important aspect of future tenants' rights. I am sure they will be pleased that we have reached a common view in this respect.

We shall also bring forward at Report stage amendments which will give the spouse of a tenant who dies the right to continue an assured tenancy. We have been impressed by arguments that this is a right of such importance that it needs to be incorporated in statute rather than left to contractual arrangements between landlords and tenants. I am quite sure that housing associations and landlords generally would not seek to evict widows and widowers. However, I accept that even the remote possibility of such a thing is likely to prove very upsetting to someone whose spouse has died or is near to death. We do not wish to deprive widows or widowers of peace of mind about their housing. This is a humanitarian question rather than a matter of the strict logic of the landlord-tenant relationship. Providing for their spouses is something which it would be logical for tenants to do when agreeing their terms of tenancy, but the figures concerning those who die intestate indicate that logic does not always prevail when it involves contemplating one's own death.

We believe that the right of persons other than spouses to continue an assured tenancy should be left to contractual agreement between landlord and tenant. It is something which will vary greatly in importance from one tenant to another and one landlord to another which is one criterion for those matters which we consider it sensible to allow to be dealt with on a contractual basis. The other matters to be dealt with on that basis, out of those which the federation wishes to continue on a statutory basis, are the sub-letting and assignation of houses and the physical alteration of houses. The relevance of those could vary from association to association. I think it is possible to envisage circumstances in which a special needs housing association, for example, might want special safeguards in relation to the future use of its houses incorporated into its tenancy agreements in a way which a general needs association might not. An element of flexibility would be useful without impinging unreasonably on tenants' interests.

In discussing our criteria for these decisions, I should comment briefly on the emphasis which the federation has placed on the introduction of private finance as a factor in our thinking. This was referred to by my noble friend Lord Goold.It would be wrong to leave the Committee to suppose that that was our only consideration. However, in so far as it is a factor, I think that the federation may be over optimistic in its view that the private sector's willingness to lend to housing associations would be wholly unaffected by a level of statutory rights which could diminish the ability of a housing association to manage its stock over time. As far as I am aware there is no firm evidence upon which to base such judgments.

As I have said, our decisions have been based on wider criteria. There is a case for a degree of flexibility. These are not uncharted waters. It is often overlooked that co-operative housing associations—Glasgow has some—which are springing up fast in the worst council housing estates, are not within the framework of Part III of the 1987 Act just as they will be outwith the assured tenancy arrangements. They already rely on contractual arrangements, and this has not harmed their popularity with tenants nor led to any significant diminution of rights. They are proof that the absence of statutory requirements is not a barrier to good arrangements.

In the same vein, I attach importance to the offer by the Housing Corporation in Scotland to produce a model tenancy agreement for housing associations in consultation with the Scottish federation. I believe that that will be extremely useful and will provide a solid foundation for discussions about contractual rights. I believe that the federation is missing the point in its assertion that any model tenancy agreement needs to have legal force. A model tenancy agreement may go well beyond the rights and responsibilities currently regulated by statute and I think there is little doubt that flexibility will be necessary in the interests of housing associations.

I have spoken largely about housing associations because I have been fulfilling a specific undertaking. I should make it clear that we intend to extend the provisions dealing with a written statement of tenancy conditions and with the continuation of a tenancy on the death of a spouse to all assured tenancies. Those changes will not be confined to housing associations.

The Government have considered these matters very carefully over several weeks. We have made, and have undertaken to make, very substantial revisions to the Bill to meet the concerns expressed on behalf of future housing association tenants.

I believe that we have now arrived at a proper balance between statutory change and the ability of housing associations and their tenants to proceed by contractual agreement. I hope that on that basis Members opposite will agree to withdraw Amendments Nos. 17 and 18.

Lord Morton of Shuna

Before the noble Lord, Lord Taylor, tells us his intention in regard to Amendment No. 17, and because I also have put my name to the amendment, perhaps I may thank the Minister and the Government for at last yielding to pressure from this side of the Chamber and in another place which has convinced them of the need for a written lease. In effect, the Minister has given us a very long statement and I think that we should all like to study it to see exactly what it contains.

Lord Taylor of Gryfe

Like the noble Lord, Lord Morton of Shuna, I very much welcome the response of the Government to some of the points that have been made during the course of our discussion, which has certainly been worthwhile. The assurance provided by Amendment No. 17 in connection with a written lease is very welcome and I am sure that it will satisfy the noble Baroness, Lady Carnegy of Lour, who raised that specific point. If I understood it correctly, the statement regarding the succession of tenancy on the death of a spouse was also welcome, but it will require to be studied.

I wonder whether the Minister will look at the comment of the Scottish Federation of Housing Associations in connection with the model assured tenancy which he seemed to feel was perfectly adequate. Indeed, he thought that it was rather stronger than the provision in the Bill. The federation says: if this were not legally binding, then the principle of a Model Assured Tenancy is undermined and … if it were to be legally binding then there would be no reason for the provisions contained in it not to be statutory". I think that this is an area in which there might be some agreement between the federation and the Government. However, as the Minister said, he gave a very long and involved statement and he rightly made no apology for that because the subject is a very complex one. It would only be right and proper for those who moved the amendment on this side of the Committee to say that we shall study the statement with very great care in view of its implications and if necessary we shall come back to it. However, I assure the Minister that we welcome the reasonable manner in which he presented his proposition. I beg leave to withdraw the amendment.

Lord Hughes

Before the noble Lord withdraws his amendment, perhaps I may say a few words. The statement made by the Minister sounded extremely favourable throughout but like other Members of the Committee I should like to read it tomorrow. It is not that I suspect that somewhere within it there is something in small print that cancels out other points but rather because some of the views that have been expressed may be capable of further discussion.

Another point which occurred to me and which has not escaped the notice of the federation is that at the present time housing associations are non-profit-making organisations. However, we cannot be certain of the direction in which the housing association movement will go in the future. For instance, the long-established building societies are now considering becoming public limited companies. It is not impossible that in the foreseeable future there may be housing associations that have a profit-earning motive. There is no guarantee that what one used to expect almost automatically from our present type of housing associations will necessarily result from a change in their nature.

That all justifies looking carefully at what the Minister has said, but my first impression was that his statement was conciliatory, helpful and generally favourable. I hope that my reading of it in Hansard will confirm that impression in its entirety.

Amendment, by leave, withdrawn.

Lord Taylor of Gryfe had given notice of his intention to move Amendment No. 18:

Page 9, line 15, at end insert— ("(4) Where under an assured tenancy the interest of the landlord belongs to a registered housing association, sections 44 to 60 of the Housing (Scotland) Act 1987 shall apply. References in that Act to a secure tenancy are, for the purposes of this Act, references to an assured tenancy under which the interest of the landlord belongs to a registered housing association.").

The noble Lord said: This amendment is related to my previous amendment. I shall not move it.

[Amendment No. 18 not moved.]

Clause 12 agreed to.

3.45 p.m.

Schedule 4 [Tenancies which cannot be assured tenancies]:

The Earl of Dundee moved Amendment No. 19: Page 55, line 10, after ("period") insert ("— (a)").

The noble Earl said: In moving this amendment, with the leave of the Committee I shall speak also to Amendments Nos. 20 to 22. These amendments are required to ensure consistency of treatment between paragraphs 9(3) and 9(5) of Schedule 4.

At present under paragraph 9(3)(c) a period of not more than 24 months following the death of a resident landlord is not to be regarded as a breach of the conditions under which the tenancy is to be considered to be with a resident landlord. This amendment and grouping of amendments will ensure that similar circumstances apply upon the death of a person whose interest as landlord was held for him in trust but who nonetheless qualified as a resident landlord through being in occupation of the building. I commend this clarification to the Committee.

On Question, amendment agreed to.

The Earl of Dundee moved Amendments Nos. 20 to 22:

Page 55, line 11, leave out ("(a)") and insert ("(i)"). Page 55, line 13, leave out ("(b)") and insert ("(ii)"). Page 55, line 16, at end insert— ("(b) of not more than 24 months beginning with the date of death of the occupier referred to in sub-paragraph (a)(ii) above and ending with the date of occupation of the house by any other person who is entitled to the liferent or to the fee or to a share of the fee of that interest,").

On Question, amendments agreed to.

Schedule 4, as amended, agreed to.

Clauses 13 to 19 agreed to.

Schedule 5 [Grounds for possession of houses let on assured tenancies]:

Lord Sanderson of Bowden moved Amendments Nos. 23 and 24:

Page 57, line 38, after ("possession") insert ("or a superior landlord").

Page 57, line 41, leave out from ("fulfilled") to end of line 7 on page 58 and insert ("(and in those conditions the landlord who is intending to carry out the demolition, reconstruction or substantial works is referred to as "the relevant landlord")—

(a) either—

  1. (i) the relevant landlord (or, in the case of joint relevant landlords, any one of them) acquired his interest in the house before the commencement of the tenancy; or
  2. (ii) none of the following persons acquired his interest in the house for value—
    1. (A) the relevant landlord (or, in the case of joint relevant landlords, any one of them);
    2. (B) the immediate landlord (or, in the case of joint immediate landlords, any one of them), where he acquired his interest after the commencement of the tenancy;
    3. (C) any person from whom the relevant landlord (or any one of joint relevant landlords) derives title and who acquired his interest in the house after the commencement of the tenancy; and

(b) the relevant landlord cannot reasonably carry out the intended work without the tenant giving up possession of the house because—

  1. (i) the work can otherwise be carried out only if the tenant accepts a variation in the terms of the tenancy;
  2. (ii) the work can otherwise be carried out only if the tenant accepts an assured tenancy of part of the house; or
  3. (iii) the work can otherwise be carried out only if the tenant accepts either a variation in the terms of the tenancy or an assured tenancy of the house or both, and the tenant refuses to do so; or
  4. (iv) the work cannot otherwise be carried out even if the tenant accepts a variation in the terms of the tenancy or an assured tenancy of only part of the house or both.").

The noble Lord said: These two amendments are required to clarify the conditions which must be fulfilled if a landlord is to gain possession under ground 6 of Schedule 5. The first amendment makes it possible for a superior landlord to gain possession under ground 6. This is to cover a situation where, for example, a local authority lets a property to a housing association for sub-letting but then requires possession for redevelopment. I am sure the Committee will agree that this is fair and reasonable.

The other more complex amendment consists of a redraft of the sub-paragraphs to ground 6. This is necessary to cover two main issues. First, the amendment makes it clear that neither any immediate nor any superior landlord should have acquired the property after commencement of the tenancy whether or not that landlord is the one seeking possession. Secondly, our intention is that the landlord should be able to obtain possession under ground 6 in order to demolish or reconstruct the house; but only if he has offered the tenant a reasonable opportunity either to vary the terms of the tenancy, or to accept a tenancy of only part of the house, or both as circumstances dictate. The redrafted provision is designed to achieve this, which the original version does not quite manage to achieve.

I commend these amendments to the Committee. I beg to move.

Lord Carmichael of Kelvingrove

Again I shall want to read the Minister's statement of explanation, but perhaps I may ask him a very quick question. When a superior landlord requires the tenancy of a house, who will judge whether the alternative accommodation offered is suitable, be it in another part of the house, another part of the building or perhaps in a different house altogether? Who will judge whether it is suitable or reasonable to ask people who already have an assured tenancy to go to other accommodation?

Lord Sanderson of Bowden

I shall have to find out the answer to that question and inform the noble Lord in due course.

On Question, amendments agreed to.

The Earl of Dundee moved Amendment No. 25: Page 58, line 12, after ("landlord") insert ("(or, where there are joint landlords, any of them)").

The noble Earl said: Under ground 7 the sheriff must grant possession if the tenant has died and has been succeeded by another person who has inherited the tenancy under the will of the original tenant, but only if the landlord begins proceedings for possession not later than 12 months after the death of the original tenant or, if the sheriff so directs, not later than 12 months after the date when the landlord becomes aware of the death.

This amendment has the effect that in the case of joint landlords the 12-month qualifying period will begin when the sheriff decides that any one of them became aware of the death of the original tenant. I trust that Members of the Committee will be able to support this amendment. I beg to move.

Lord Carmichael of Kelvingrove

Can the Minister explain whether this in any way contradicts or makes more difficult our proposal in later amendments to extend the succession period to two years, if it is not a spouse, with regard to an assured tenancy. The Bill provides for a six-month period of residence for the person in the house who had been living with the assured tenant before death. However, if it were a two-year tenancy would the landlord have any right to go to the sheriff to obtain possession within the two-year period, if the period were changed to two years?

Perhaps I did not explain that very clearly. As the Bill now stands, the period is six months where a relative had been living with the assured tenant before the tenant died. If the amendment that the Minister has put forward is accepted it would provide a 12-month tenancy before the sheriff had power to change the tenancy. On the other hand, our amendment provides for a period of two years to be allowed. Possibly the Minister is receiving advice; perhaps I have not grasped the point. I am looking at it very carefully. In explaining it I see that it is very complicated. I can perhaps return to the matter later.

The Earl of Dundee

I am grateful to the noble Lord. I appreciate the point he is making. If he is happy to do so, perhaps it would be best to wait until a later stage of the Bill and tie the two matters together at that moment.

On Question, amendment agreed to.

The Earl of Balfour moved Amendment No. 26: Page 58, line 22, at end insert—

("Ground 8A

The house was at any time occupied by a person under the terms of his employment as a person employed in agriculture and the house has been let on an assured tenancy and—

  1. (a) the tenant neither is nor at any time was so employed by the landlord and is not the widow of a person who was so employed, and
  2. (b) not later than the commencement of the tenancy, the tenant was given notice in writing that possession might be recovered under this Ground, and
  3. (c) the court is satisfied that the house is required for occupation by a person employed or to be employed by the landlord in agriculture;
and for the purpose of this Ground "employed", "employment" and "agriculture" have the same meanings as in the Agricultural Wages (Scotland) Act 1949.").

The noble Earl said: This is the first of two amendments to preserve the special provisions that have existed for a long time in the rent Acts enabling farmers to regain houses when required from employees employed in agriculture.

Agriculture is going through a period of great uncertainty. We farmers cannot forecast what crops or livestock we shall be producing five years from now. There is genuine uncertainty about what labour force will be required. Although the Bill, in paragraphs 5 and 6 of Schedule 4, contains provisions excluding tenancies of agricultural land and holdings from being assured tenancies, there is nothing in Clause 18 to instruct a sheriff to look at Schedule 4. The only way a landlord can gain possession of any house is, quite rightly, by a court order.

My proposed Ground 8A is taken from Case 17 of Schedule 2 to to the Rent (Scotland) Act 1984. Amendment No. 30 proposes Ground 18, taken from Case 7(a) of the same schedule. Paragraph (b) of Case 7 is incorporated in Ground 17 of the Bill. No farmer or laird wants to turn an old employee out of his house when he retires. However, if the farmer or laird cannot offer a house to a new employee, he is unlikely to get the employee he wants. Perhaps I may remind Members of the Committee that, as stated at Second Reading, this Bill phases out the rent Acts.

I have been asked to group Amendment No. 31 with Amendments Nos. 26 and 30 although it relates to a different subject. It is not good that any house should remain empty. Most private landlords or tenant farmers wish to have every habitable house occupied. However, tenants can be strange people. And, unfortunately, some apparently good people can behave in most strange ways. I have had tenants—I am sure that I am not the exception—who lived in a cottage for two years, have then removed most but not all the furniture and have literally disappeared. Amendment No. 31, proposing Ground 19, is taken from Ground 5 of Schedule 3 to the Housing (Scotland) Act 1987 and is designed to meet this case. It is a problem that could also face housing associations, discussed earlier. I beg to move.

The Earl of Dundee

With the leave of the Committee, I should like to speak to Amendments Nos. 26, 30 and 31. I have listened very carefully to my noble friend's exposition of these amendments. They touch on matters of importance. However, while I believe there is much in what my noble friend says, I do not consider that the amendments are necessary.

In coming to this conclusion I should explain first that one of our central aims to Schedule 5 has been to reduce the number and complexity of grounds for repossession. In doing so, I would argue that we make it much clearer and simpler for tenants and landlords to understand the conditions which are to be fulfilled if repossession is to take place.

Turning to these proposals, my noble friend's first two new grounds are both essentially designed to ensure that a landlord farmer can take into possession agricultural houses or the like for use by his employees who are to be employed in agricultural activities. I accept that in some cases a landlord may not be able to predict a future need for housing for employees but, generally speaking, this should be something that can be foreseen. Thus the landlord will be able to protect his right of possession by writing an appropriate condition into the tenancy agreement or by taking advantage of the short assured tenancy option provided by the Bill. This he can do with confidence in his ability to regain possession at the end of the tenancy. He may, of course, find that his expected need for the property does not materialise. If this happens he can allow the short assured tenancy to run on. I believe that the circumstances outlined by my noble friend can therefore be fully met by the Bill as it stands. Indeed, the examples discussed serve to illustrate the strength and flexibility of the short assured tenancy concept.

With regard to the third proposed ground, this would result in Ground 5 of Schedule 3 to the Housing (Scotland) Act 1987, which applies to public sector tenants, being applied to assured tenancies. Again, I do not believe that it is necessary. If a tenant is absent from a property to the extent that it is no longer his principal home it means that the tenancy is no longer an assured tenancy as defined by Clause 12(1)(b). In cases where there is dispute as to whether a house is a tenant's principal home, a landlord could seek to persuade a sheriff that the tenancy should no longer be assured. It is unlikely many cases of this nature will arise. I hope that these remarks will reassure my noble friend about the cases he outlined.

Most long periods of absence will be for a good reason (for example, a tenant in hospital) or will be accompanied by non-payment of rent which will allow repossession under grounds 8, 11 or 12. In the light of this explanation of how the cases described by my noble friend are already catered for, and in the interests of keeping the grounds for possession simple, I hope my noble friend will not press his amendment.

The Earl of Balfour

I should like to ask one further question. I should hate a worthy tenant, if just granted a short assured tenancy, to feel that he was likely to be turned out, say, at the end of a couple of years, other than perhaps in the case of an unfortunate accident on a farm where somebody is killed. Unfortunately, farming does not have the best record. I might be in the position of knowing that a tenant could have the house for five or eight years. I have always managed to hold on to my employees satisfactorily for a long time. I hope that continues. We have good relationships.

However, there is uncertainty that I feel because I should not like to have to go to court to get a house back if there does not seem to be any other way to have the house restored. My sole reason for needing the house would be that I required a new employee. The Bill is not quite clear enough in specifying that the only occasion when I would want the house back would be for a new employee. That is all.

The Earl of Dundee

I note what my noble friend says. I hope I can reassure him when I remind him that in cases of short assured tenancies the landlord is always in a position to regain possession owing to the finite nature of short assured tenancies.

The Earl of Balfour

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4 p.m.

The Earl of Balfour moved Amendment No. 27: Page 59, line 19, after ("residing") insert ("or lodging with him").

The noble Earl said: In moving Amendment No. 27 1 should like to speak also to Amendment No. 29. Both amendments attempt to insert the words "or lodging with him" into the schedule. These words have also been taken from cases 2 and 4 of Schedule 2 to the Rent (Scotland) Act 1984. I consider that there is a distinct difference between a friend or relative residing with the householder and the comparative stranger who lodges with the householder. The friend or relative probably does not pay any rent, but the lodger usually does.

I have been asked to group with these amendments Amendment No. 28, which seeks to remove the words "in the opinion of the sheriff ' from the first line of Ground 16 because these grounds are those on which a sheriff may order possession. He does not have to do so. If the landlord has to get a sheriff's officer out to look at the furniture, in my opinion that is an additional expense when it is more than likely that the sheriff would take no action for many months after the case comes to court. I beg to move.

Lord Sanderson of Bowden

I have listened to what my noble friend said. I have looked carefully at his amendments and I am happy to accept them. They ensure consistency of terminology both within the Bill and with earlier legislation.

On Question, amendment agreed to.

The Earl of Balfour moved Amendment No. 28: Page 59, line 24, leave out ("in the opinion of the sheriff").

Lord Sanderson of Bowden

I accept Amendment No. 28.

On Question, amendment agreed to.

The Earl of Balfour moved Amendment No. 29: Page 59, line 26, after ("residing") insert ("or lodging with him").

On Question, amendment agreed to.

[Amendments Nos. 30 and 31 not moved.]

The Earl of Dundee moved Amendments Nos. 32 and 33: Page 59, line 36, leave out ("Ground 1") and insert ("Ground 9"). Page 59, line 46, leave out ("Ground 1") and insert ("Ground 9").

The noble Earl said: These amendments pick up consequential changes required as a result of an amendment made in another place.

On Question, amendments agreed to.

Schedule 5, as amended, agreed to.

Clause 20 [Extended discretion of court in possession claims]:

The Earl of Selkirk moved Amendment No. 34: Page 14, line 4, after ("under") insert ("sections 1,2,3 and 18 of).

The noble Earl said: This is a small point, but it seems to me that the matters concerned should be identified by section. Otherwise one merely refers to the Act of Parliament and one has to read all the way through to understand which part applies. My amendment identifies what is concerned. It is not an important point, but I think it is in the interests of clarity. I shall have more to say about clarity in a few minutes. I beg to move.

The Earl of Dundee

I have listened to my noble friend's case for this amendment. However, as my honourable friend the Scottish Office Minister for Home Affairs and the Environment explained in another place, we are satisfied that any doubts about whether cohabitees will be covered are entirely unfounded. The provision in the Bill applies to, any person having rights of occupation under the Matrimonial Homes (Family Protection) (Scotland) Act 1981". That will ensure that cohabitees will be covered in the same way as spouses, as my noble friend wishes.

On the basis of my explanation, I hope my noble friend will feel able to withdraw his amendment.

The Earl of Selkirk

I see no reason at all to withdraw the amendment. I never mentioned cohabitees. The mere fact that the Bill states that the Act is included covers cohabitees in Clause 18. I really cannot see why the noble Earl will not accept my amendment. It is to clarify the purpose so that people know exactly what part of the Bill they should read. The answer the Minister has given does not seem to me to be an answer at all. I should like the noble Earl to think a little more about the matter.

The Earl of Perth

I should like to support the noble Earl, Lord Selkirk. It is asking a lot of many people to have to go all through the Bill to find out what it is all about. All they would have to do, if the amendment were accepted, would be to take Sections 1, 2, 3 and 18. I hope that, as the noble Earl said, in the interests of general drafting and clarity these words—which in no way change what is proposed—will be accepted for that purpose.

Lady Saltoun of Abernethy

I too should like to support the noble Earl, Lord Selkirk, and the noble Earl, Lord Perth, in this matter.

The Earl of Dundee

I am again grateful not only to my noble friend Lord Selkirk but to the noble Earl, Lord Perth, and the noble Lady, Lady Saltoun. As my noble friend requests, I shall take this matter away and have it looked at again. I apologise for assuming that the noble Earl had in mind what was discussed in another place when similar words were used. I give that reassurance to my noble friend and I shall see whether in the interests of clarity we can do a bit better.

Lord Carmichael of Kelvingrove

I congratulate the Minister on coming back and the other noble Lords, particularly the noble Earl, Lord Selkirk, for persisting. On behalf of everyone who has to plough through Bills and spend much time in the Library tracing things, perhaps I may say that it would be a great help if matters were clear. Who knows—in this Bill we may make a blow for clarity of legislation.

The Earl of Selkirk

I shall not press the matter to a Division, although I believe that we might even win a Division on this. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sanderson of Bowden moved Amendment No. 35: Page 14, line 15, after ("on") insert ("the ground specified in section 30(1) of this Act or on").

The noble Lord said: This amendment is designed to remove an anomaly in the Bill as currently drafted. The amendment ensures that a sheriff may not sist, suspend or postpone proceedings or an order for possession when a short assured tenancy is concerned. This simply brings the treatment of short assured tenancies in this respect into line with that of the other mandatory grounds for possession in Schedule 5. Landlords who let on a short assured tenancy basis do so because they wish to be certain of regaining possession at the end of the tenancy; for example, because they expect to be returning from abroad then and need to be able to re-occupy their house. Tenants who accept short assured tenancies will be well aware of the period of their tenancy and will have no expectation of being able to retain possession thereafter. In those circumstances a landlord who seeks an order for possession should not have to wait indefinitely for the possession order to be granted or to take effect. I trust that Members of the Committee will agree that this is fair and reasonable and that the amendment should be accepted.

Lord Hughes

The way in which the Minister has put forward the amendment makes it sound totally reasonable, and I thought that he would proceed to an amendment dealing with Clause 30(1)(a). I am certain that not every Member of the Committee from south of the Border will understand it. It reads: that the short assured tenancy has reached its ish". Perhaps the words that the Minister has used may be more appropriate to include in the Bill instead of that obscure legal term.

Lord Sanderson of Bowden

I note what the noble Lord has said. The point of the amendment is important but I shall read what he said to see whether there are grounds for including the wording in the Bill. At this stage I can give no assurances.

On Question, amendment agreed to.

Clause 20, as amended, agreed to.

Clauses 21 and 22 agreed to.

Clause 23 [Limited prohibition on assignation etc. without consent]:

On Question, Whether Clause 23 shall stand part of the Bill?

The Earl of Balfour

I have read the clause most carefully and have had a short discussion with the Minister. However, I ask Members of the Committee to look at the words "prohibiting or" in line 9. Subsection (1) deals with tenancies which have been sublet or assigned. Subsection (2) reads: Subsection (1) above does not apply if, under the terms of the tenancy, there is a provision prohibiting … assignation". I believe that that cancels out subsection (1). Will my noble friend look at the drafting of this clause between now and the Report stage? I believe that if the words "prohibiting or" were removed I should be happy with the clause because it would then be for the landlord to create his own terms.

Lord Sanderson of Bowden

I thought that when my noble friend came to see me I had convinced him that he should not concern himself with this point. However, I am prepared to look at the matter again and come back to him.

Clause 23 agreed to.

Clauses 24 to 28 agreed to.

4.15 p.m.

Lord Taylor of Gryfe moved Amendment No. 36: After Clause 28, insert the following new clause:

("Premiums for assured or short-assured tenancies.

It shall be unlawful for any premium, fine of other like sum or any other pecuniary consideration in addition to rent, to be charged to a tenant prior to or on creation of an assured tenancy or a short-assured tenancy, save that a deposit not exceeding one month's rent may be charged.").

The noble Lord said: This is a simple amendment and its terms explain its purpose. It provides that it shall be unlawful for any premium, fine of other like sum or any other pecuniary consideration in addition to rent to be charged, other than the one month's rent as deposit. The amendment was prompted by representations made to me by the Scottish Council for Single Homeless. It believes that the practice of charging key money is undesirable and is generally recognised as being so.

I understand that in Scotland it has been a crime to charge a premium or key money since 1971. I was not aware of that and I suspect that in many cases the law was not observed. It has been unlawful in most cases since 1920. The Government's proposals seek to remove from the category of a criminal offence the charging of premiums for assured and short assured tenancies. The wording of the amendment contains the definition of the word "premium", which is used in Section 90 of the Rent (Scotland) Act 1984. I hope that the Minister and other Members of the Committee will recognise the practice as being undesirable and will accept the amendment which stands in my name. I beg to move.

Lord Goold

I share the concern expressed by the noble Lord as regards key money. I ask the Minister to take this matter away and reconsider it.

Lord Carmichael of Kelvingrove

I hope that the Minister will accept the amendment. We consider it to be a matter of great importance. Those Members who have had a great deal of experience at weekly surgeries know the difficulties which arise as a result of this, particularly in cities where there are a high number of single room lettings. The single homeless are frequently in difficulty as regards raising even quite small sums of money and the cycle of visiting money lenders goes on.

The provisions for the charging of key money were changed in 1971 when problems then arose due to the introduction of various clever forms of rental purchase. Those tenants interested in buying property lost their house if they missed one week's rent after paying for perhaps a year or two. We believe that the request for key money should be returned to its criminal category and that that would help people in dire circumstances, particularly the single homeless.

Baroness Carnegy of Lour

I agree with what has been said about key money. My experience does not enable me to know whether this provision must be included under the new circumstances created by the Bill. Where the market price is set for rent does the situation arise in the same way as it has in the past? The system may be self-regulating. I should like to be sure that what is feared is not possible. I agree with the noble Lord that people may be at the mercy of a landlord when they are cornered into doing something which they cannot afford. I hope that my noble friend will explain why it is necessary to include this provision in the Bill having regard to the new atmosphere that we are now creating.

The Earl of Balfour

Although I sympathise with the idea behind the clause I am thinking of a case where someone may be asked for a substantial deposit for a flat which is comprehensively furnished. The furniture may be valuable and it could be seriously damaged by an unworthy tenant. In such cases it is not uncommon for a hefty premium to be charged and one month's rent may not cover the deposit.

Lord Sanderson of Bowden

It may help the Committee at this stage if I explain why the Government did not include a prohibition on premiums in the Bill. As noble Lords are aware, premiums are prohibited for regulated tenancies under the Rent (Scotland) Act 1984. That is necessary because the 1984 Act controls the rent of such tenancies and were premiums permitted landlords might use them simply to make up the difference between the controlled and the market rent.

However, Part II of the Housing (Scotland) Bill allows landlords to charge as the rent for an assured tenancy whatever the market will bear. This is the point which was mentioned by my noble friend Lady Carnegy of Lour. Thus the incentive for landlords to charge premiums to give them a reasonable return will be gone. Indeed, as our policies bear fruit and more accommodation becomes available for private letting, any landlord charging a premium will be at a disadvantage against others, since prospective tenants will simply go elsewhere. That is the case against banning premiums—that it should be left to the market—as rents are to be.

However, I know that there are other views, and some of them have been expressed in the Committee this afternoon. I must say I have been struck by the strength of feeling expressed from the Benches behind me and also from those opposite. I have to say that the new clause we are discussing might not achieve precisely what Members of the Committee wish as regards this particular amendment. For instance, it would not prohibit the charging of a premium when a tenancy is assigned from one tenant to another rather than created. Nevertheless, in the light of what has been said, if the noble Lord will withdraw his proposed new clause I would be prepared to look again at the matter and come back to it at a later stage.

Lord Taylor of Gryfe

I beg leave to withdraw the amendment in view of what the noble Lord says.

Amendment, by leave, withdrawn.

Clause 29 [Short assured tenancies]:

Lord Mackie of Benshie moved Amendment No. 37: Page 17, line 18, leave out ("six") and insert ("twelve").

The noble Lord said: This amendment is simple. It is to double the period from six months to one year. The reasons again are obvious. A six months' tenancy is really not a tenancy at all. The tenant has hardly settled in and proved whether he is a good or a bad tenant in that time. Also the period could be used by unscrupulous landlords simply to have a long series of six-monthly tenancies during which time they could raise the rent if they thought the market would bear it.

The snag in the explanation just given by the Minister before his very kind assurance that he would look again at the previous amendment—that the market would regulate this situation—would not apply unless the policy was successful and there was plenty of accommodation to rent. That is certainly not the case at present. For this simple reason a 12-month tenancy would be fair. It would give the tenant some chance to look around and give some security in regard to a so-called assured tenancy. I beg to move.

The Earl of Dundee

I listened carefully to what the noble Lord said about setting the lower limit for short assured tenancies at 12 months. However, I am not convinced. We must bear in mind that the aim of the short assured tenancy is to give people the chance to let their house for a precise period, with an absolute guarantee of regaining possession at the end of that period. I accept that that consideration could be consistent with any period one might think of, but any minimum period inevitably will be somewhat arbitrary. Some people will want to let their houses for less than 12 months; for example, when on an extended holiday or when working abroad. That is why we have settled on six months as the minimum period. I hope the noble Lord will accept this explanation and feel able to withdraw his amendment.

Lord Mackie of Benshie

I am not sure that the explanation is a good one, but I will look at this again and consult further. It is true that there are occasions such as when people go on holiday and wish to let their house, but on the other hand the period allows opportunities for an unscrupulous landlord to take advantage of it in a far more long-term way by a series of short tenancies. I should like to look at this again, but in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 29 shall stand part of the Bill?

The Earl of Balfour

Might I just ask my noble friend whether the wording could be amended? In subsection (5), after the words "Section 25", could be at the next stage insert the word "above"? This would conform to the rest of the Bill. Thus the wording in line 45 would be: (5) Section 25 above shall apply in relation to".

Lord Sanderson of Bowden

I shall certainly look at what my noble friend has suggested and if it is sensible we shall do what he asks, but not otherwise.

Clause 29 agreed to.

Clause 30 agreed to.

Clause 31 [Reference of excessive rents to rent assessment committee]:

The Earl of Dundee moved Amendment No. 38: Page 18, line 35, leave out ("of similar tenancies").

The noble Earl said: As now drafted Clause 31(3)(a) requires a rent assessment committee to make a rent determination for a short assured tenancy only if there is a sufficient number of similar tenancies of similar houses in the locality. This might well be interpreted to mean that comparison only with other short assured tenancies would be permitted.

As was pointed out in Committee in another place, in some areas, particularly rural areas, there may not be enough short assured tenancies to fulfil this requirement; and in any case the evidence of the rent under any assured tenancy is relevant to the rent under a short assured tenancy. As a consequence of this, the rent assessment committee would not be able to make a determination and tenants would not be able to exercise their right to have a market rent determined even when there was evidence from rents of other assured tenancies that their rent was excessive. The amendments recognise this potential difficulty by making it possible for the rent assessment committee to take into account the level of rents of all assured tenancies in similar houses in the locality. It will of course also bear in mind that rents for short assured tenancies should normally be lower than those for ordinary assured tenancies. With that explanation, I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 39: Page 18, line 36, after ("locality") insert ("let on assured tenancies (whether short assured tenancies or not)").

The noble Earl said: I beg to move Amendment No. 39 formally.

On Question, amendment agreed to.

[Amendment No. 40 not moved.]

Clause 31, as amended, agreed to.

Clauses 32 to 42 agreed to.

The Earl of Selkirk moved Amendment No. 41: Before Clause 43, insert the following new clause:

("Replacement of Schedule 1 to the 1984 Act.

.—(1) Schedule 6 below replaces Schedule 1 to the Rent (Scotland) Act 1984.

(2) The provisions of Schedule 6 below shall have effect for determining what person (if any) is the statutory tenant of a dwelling-house at any time after the death of a person who immediately before his death was either a protected tenant of the dwelling-house or the statutory tenant of it or the assured tenant of the dwelling-house or the statutory assured tenant of it.").

The noble Earl said: The only point of this amendment is to try to clarify a Bill which I must say I do not think has been devised in the best and clearest way that it could have been. Added to that, there have been a number of previous Bills which from time to time are referred to and—something I have never known in the history of statute law—two consolidation Bills within something like three years. I do not know whether that has ever happened before: I have never seen it. This is the state we have got into and here I am taking a small step to try to clarify part of the Bill.

I am dealing with Schedule 6. In case anyone should doubt what I have said I beg them to look at that schedule to see whether they can make head or tail of what it says. If that is not posssible, it proves that it is totally illiterate and incapable of explanation. One has to buy a copy of the 1984 Act at a cost of £.6.90 and when that has been done one can apply Schedule 1 of that Act to the amendments in Schedule 6 to this Bill. I believe that would take an ordinary person an hour and a half to do. It is quite a complicated operation and is something which is totally unreasonable to expect the assured tenant to do. Not only that but it is a very important matter. People regard it as most important to know who will succeed them in an assured tenancy. It is a rather complicated system and I am not sure I would do it in that way myself, but that is not the point.

I am not seeking to alter the Bill. I am purely seeking to make the matter clearer for assured tenants to see how they stand. I want them to be able to see that from the Bill. I believe it will help everybody if the noble Lord will agree to this. If the Minister wishes to alter certain words—the clause is no more than an introduction—because I may not have used terminology which is exactly what he would like, then I would accept that. However, I should like him to agree to a full Schedule 6 which explains to an assured tenant the situation as regards succession. I believe that if he does that he will be doing a good service to assured tenants. I beg to move.

4.30 p.m.

Lord Morton of Shuna

I strongly support the drafting proposed by the noble Earl, because the Bill is absolutely impossible to follow. It is fairly easy for government departments, which have all the Bills available to them and can put them on to word processors and carry out the changes in that way. However, for anybody who does not have that facility, it is quite impossible to follow the type of amendment which Schedule 6 creates without going back, cutting up and sticking pieces of paper on and then trying to see if one has it right.

In the Copyright Bill, which was in this House last month, we had the facility of a schedule which printed out the effect of the amendments carried by the Copyright Bill to the Registered Trademarks Act. That was very useful. If I understand the noble Earl, that is what the noble Earl is trying to do here. I suggest that that is extremely helpful, as is anything which makes legislation more comprehensible.

At times there seems to be an intention in the drafting of Bills to make them as difficult as possible for any, so to speak, lay person to understand. In this House we should be very strongly in favour of exactly the opposite and we should try to make Bills as readily understandable as possible even if it means adding a sheet or two of paper to the Bill.

Lord Hughes

I should like to support the noble Earl, Lord Selkirk. I pray in aid something which the Minister said which I thought was a new and refreshing statement of government policy. In replying to his noble friend Lord Balfour, he said: If it is sensible we will put it in". Governments have not always done that, and the noble Earl, Lord Selkirk, has quite obviously put his finger on something in the Bill which is anything but sensible and has suggested a simple way of achieving exactly what the Government want.

The noble Earl was extremely fair and said that he would not exactly stick to the wording which he used. He wanted the principle that anybody who wished to know what was going on could discover that from the Bill rather then looking at various bits and pieces of another Act. Therefore, I hope that the Minister will accept his own advice and put this in, because it is sensible.

Lord Kirkhill

I also should like to join with others in supporting the remarks made by the noble Earl, Lord Selkirk. I do that for two reasons: first, the noble Earl, through the Committee stages of much Scottish legislation other than this particular Bill, has always sought to emphasise the very point that he has made this afternoon as it relates to this Bill and as it related to others. The truth of the matter is that the ordinary citizen, were he to look at the Bill in order to discover his position as an assured tenant would probably not find exactly how he stood in the matter. If some sort of redrafting as suggested by the noble Earl is taken up by the Minister, then surely those most affected by the Bill will know where they stand. That will be an improvement and also an improvement in government communication.

The Earl of Perth

I should like to support all those who have spoken. I have seen the noble Earl, Lord Selkirk, at a table surrounded by all sorts of reference books trying to solve the sort of problem we are discussing today. I believe that he and all of us should be absolved from that. The only body which I can think will benefit from the present obscurity is HMSO, which receives £6.90.

Lord Sanderson of Bowden

During our Second Reading debate my noble friend raised the possibility of incorporating in the Bill the revised Schedule 1 to the Rent (Scotland) Act 1984 which results from the amendments we proposed to make to it. I can but admire the effort he must have put in to produce the version we see in Amendment No. 43, which deals with Schedule 6. However, I am afraid that I must disappoint him: his revised schedule would not have the effect that our amendments are designed to achieve.

As I promised my noble friend at Second Reading, I have looked carefully at Schedule 6. The difficulty is that the amendments made by Schedule 6 have to take account of three separate sets of circumstances. I shall just explain them to the Committee. The first is when the original tenant is alive at the Bill's commencement; the second when the original tenant has died but a first successor is alive at the Bill's commencement; and the third when both the original tenant and a first successor have died at commencement. Clause 43 applies different parts of the amendments in Schedule 6 in each of the three sets of circumstances.

Briefly, in the first case, we intend to allow succession by the original tenant's spouse as a statutory tenant, as at present; but a second succession will only be possible by someone who is a member of both the original tenant's and the spouse's family, and who has lived with the spouse—the first successor—for two years before that first successor's death. Such a second succession will be to a statutory assured tenancy.

Another member of the original tenant's family may succeed to the tenancy if there is no qualifying spouse and if he has lived with the tenant for two years. But a first successor in these circumstances will succeed to a statutory assured tenancy, and there will be no right of second succession.

In the second case that I mentioned, where the original tenant dies before commencement, the first successor, whether spouse or another member of the tenant's family will have a statutory regulated tenancy. In this case second succession—but to a statutory assured tenancy—will be possible for someone who was a member of the family of both the original tenant and the first successor, and who has lived with the first successor for two years before his or her death. Finally, in the third of the cases that I listed, where a second successor already holds the tenancy, we do not intend to make any change to their position.

I apologise to the Committee for having explained the position at some length. But I think it will have shown your Lordships how complex the provisions are, and why the valiant attempt by my noble friend Lord Selkirk does not fully deal with the problem.

As I indicated at Second Reading, I share his desire to make legislation self-standing as far as possible—and I may say that I think that Members of the Committee will find this Bill rather better in that respect than the Housing Bill for England and Wales, which has yet to arrive in this Chamber. However, that is for the judgment of the House at the appropriate moment.

On this occasion, I fear that we must live with the way in which Clause 43 and Schedule 6 have been drafted. To do otherwise would in fact be likely simply to complicate further already complex provisions. However, having listened to the noble Lord, Lord Morton of Shuna, and my noble friend Lord Selkirk—and they are both lawyers and I am not—I am prepared to have another look at this situation, though, as I said at Second Reading, the matter is not quite so easy as it seems.

Lord Morton of Shuna

Perhaps the Minister would consider what I understood is called a Keeling schedule; that is, to have another schedule after Schedule 6 setting out the result of the amendments carried in Schedule 6 to Schedules 1 and 2 to the Rent Act (Scotland) 1984. This would then all be in one document. That is what was done and what I intended to refer to in the Copyright Bill. I should have thought that it was quite easy, and it would cost only a little more.

Lord Sanderson of Bowden

I had intended to mention that we were going to have a close look at what has been said about the Copyright Bill to see whether we could learn any lessons from it, and then come back.

The Earl of Selkirk

The Minister, with great care and trouble, has underlined the very statement that I made: the Bill is totally incomprehensible. I do not pretend to be a man of learning, but I did my best to make sense by putting the two schedules together and I have failed. If I have failed, perhaps it is not unreasonable to assume that other members of the community may fail to make common sense out of utter nonsense. It is a disgrace that, with the best will in the world, one cannot make sense of two schedules.

The noble Lord, Lord Morton of Shuna, has kindly suggested the Keeling schedule, which is a possible way out. I beg the Government to be sensible. It is outrageous to offer to the country a provision that is incomprehensible as it stands. Even if one takes a great deal of trouble, it does not make sense. This will affect those people concerned about who will succeed them when they die. It is a sensitive point. Indeed, many great novels have been written round the story. We should ensure that this is put right. By report stage, noble Lords must have before them some provision that can be regarded as sensible. I hope to have the Government's assurance that that will be the case.

Lord Sanderson of Bowden

I am prepared to look at this again and consider whether we can perhaps help the noble Lord with the problem that has been raised. I warn the Committee that, as a result of the request, there may be three new schedules. I shall look at what has happened in regard to the Copyright Bill and at what has been said today by the noble Earl. He has the advantage of being a lawyer and I do not. I understand the position that he is trying to relate to the Committee and how difficult it is to follow some of the legal arguments.

I must dispute one matter, however. We are not talking nonsense; we are endeavouring to put in place a law that will be effective and will improve housing in Scotland. That is what both the Scottish Office and I are attempting to do. I will not have it said that this is nonsense. We shall consider whether there is a better way of putting it into print.

Lord Hughes

I think that it would be acceptable for the Minister to come back with three schedules that were understandable—the Selkirk version in triplicate, if I may so put it; but not, for heaven's sake, the drafter's version in triplicate.

The Earl of Selkirk

I accept what the noble Lord has said. However, I must say bluntly that Schedule 6 as it stands is nonsense. I challenge anyone to deny that. One has only to read it: it means nothing by itself. Although it does not matter about me, it is unfair on the public. Members of the public ought to understand what it says. If the Minister can put this matter right, I shall be very grateful and I believe that he will thereby do a good service to the country. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

Clause 43 [Statutory tenants: succession]:

Lord Taylor of Gryfe moved Amendment No. 42: Page 27, line 42, at beginning insert—

("(a) In section 3(1)(a) of the Rent (Scotland) Act 1984 after the words "protected tenancy" here shall be inserted the words "or assured tenancy", and after the words "protected tenant" there shall be inserted the word "or assured tenant";


The noble Lord said: In moving Amendment No. 42, I shall speak also to Amendments Nos. 44 and 47. These related amendments extend succession rights to cover assured tenants. In the clause as presently drafted, such tenants would have no succession rights at all. The amendments would rectify that position. I beg to move.

Lord Morton of Shuna

I support the amendment. I am not certain where the long answer on Amendment No. 18 takes us in relation to this amendment. I have not yet had the opportunity to read what the Minister said about succession to assured tenancies. I know that he said something, but that is as far as I am prepared to go. It is important that there should be succession rights. I therefore support the amendment.

Lord Kirkhill

If the Government were to accept the amendment, it would at least give some sense of security to those who are affected. The Minister has just been saying how much he wants the Bill to find common acceptance. Here is an opportunity for him to show willing.

Baroness Carnegy of Lour

I think that this is an amazing amendment. The concept of making it possible for the market to operate and for new money to come into housing, which is fundamental to the Bill, will be undermined if previous succession rights are to be restored.

The noble Lord, Lord Morton of Shuna, said that he had not quite heard what my noble friend the Minister said.

Lord Morton of Shuna

I did not say that I did not hear; I heard perfectly well. I did not fully take in and understand the effect on the Bill of what the Minister was saying in regard to the amendment.

Baroness Carnegy of Lour

The noble Lord is an experienced lawyer and knows this subject in great detail. I thought that my noble friend the Minister said that spouses would have succession. That was new in the long statement that he made. Apart from that, the amendment would change the fundamental concept of the Bill and surely cannot be accepted by the Government. Unless my noble friend the Minister suggests otherwise, I shall have to oppose it.

Lord Mackie of Benshie

Perhaps the Minister would clarify the point put by the noble Baroness, Lady Carnegy of Lour. As I understand it, the amendment would simply ensure the succession for the period of the assured tenancy. That is an old principle of Scots law. If that is so, it appears to be perfectly reasonable.

Lord Goold

I am not sure whether I have misunderstood. I share the fear of the noble Baroness. If the amendment were accepted, it would detract from the purpose of the Bill and prevent the investment in new housing for which we look. We must have some assurance that succession will not be unlimited. In my view, this would be destroyed by the amendment.

Lord Sanderson of Bowden

Whatever the intention behind the amendment, it would largely defeat much of the object of the Bill, as my noble friends Lady Carnegy of Lour and the noble Lord, Lord Goold, have pointed out.

The amendment, if passed, would mean that when an assured tenancy was terminated the tenant would be entitled not to a statutory assured tenancy, as the Bill provides, but to a statutory regulated tenancy, as provided for in the Rent (Scotland) Act 1984. Quite apart from the question as to whether a clause dealing with succession rights is the right place to introduce such an amendment, I have to say to the Committee that the effect of the amendment would be anomalous, not to say bizarre.

It would mean that when an assured tenant's tenancy was terminated, but the landlord did not have immediate grounds for possession, the tenant would at once have the right to have a rent registered. That would in many cases be lower than the rent freely negotiated between landlord and tenant at the start of an assured tenancy. I can think of few things more likely to deter potential landlords from letting than a likelihood that after the initial period of the lease they will have no option but to allow a tenant to continue to live in their house but at a lower rent than they have received until then.

However, Amendment No. 42 would have other effects as well. It would mean that many of the grounds for possession in Schedule 5 could never be invoked—even when the landlord had overwhelming reasons for so doing—since, by virtue of Clause 18, most of them could only be invoked in respect of statutory assured tenancies. Furthermore, any of the cases on which possession must be granted under the Rent (Scotland) Act 1984 and for which notice must be served on the tenant, could not be invoked for one of these tenancies created by this amendment.

In short, the amendment would kill off assured tenancies before they are horn. That would be a tragedy for those people who find private rented accommodation best suits their needs. It would dry up the supply of private rented property and probably lead to increased problems of homelessness.

The noble Lord, Lord Morton of Shuna, asked what was the connection between my statement and this particular amendment. By creating regulated tenancies on succession instead of assured tenancies this amendment would seriously undermine the future position of housing associations and their long-term financial interests. With those comments, I hope that the Committee will see fit to reject this amendment.

Lord Taylor of Gryfe

In the light of what has just been said I do not propose to press the amendment to a vote. Once more I should like to read and study what the Minister has said. He seemed to be very persuasive, and at least he has persuaded himself. I shall look at the matter as fairly as possible and I may return to it. However, I do not propose to press the amendment at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43 agreed to.

Schedule 6 [Amendments to Schedule 1 to Rent (Scotland) Act 1984 (c.58)]:

The Deputy Chairman of Committees (The Earl of Listowel)

If Amendment No. 43 is agreed to I cannot call Amendments Nos. 44 to 47.

[Amendments Nos. 43 and 44 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 45: Page 62, line 8, leave out sub-paragraph (b).

The noble Lord said: This is an amendment which we consider to be very important as it relates to people in a social and a family context. I am sure that the Minister is very familiar with it. We are not trying to protect a tenancy in perpetuity. As the noble Lord, Lord Goold, suggested earlier, that would be dangerous, and I agree that that would be so. However we are trying to get a little fairness into the situation.

Schedule 6 (6) states, Where a person who—

  1. (a) was a member of the original tenant's family immediately before that tenant's death, and
  2. (b) was a member of the first successor's family immediately before the first successor's death,
was residing with the first successor in the dwelling-house at the time of, and for the period of two years immediately before, the first successor's death, that person".

and so on. From representations which have been made to us by housing associations, those interested in housing, citizens' advice bureaux and also as a result of our own experience, and I am sure that of a great many Members of the Committee, we believe that in some parts of the country it is very common for ailing people to be looked after at home by the family. Perhaps it is not as common as it should be and I believe that the Government would like to make it more so. Frequently the family home may be the best place to nurse an elderly parent. Perhaps a daughter or a son and his wife would give up their home to live with the parent in order to nurse him. One hopes that that would be for quite a long period and for at least two years. There would be no question of succession if they were actually living with the elderly parent and if the parent was able to survive for two years.

That is not always the case. People are being asked to do a good deed—namely, to provide home nursing and to allow the elderly parent to live in a family atmosphere, which is most appropriate. It would be more appropriate if it were in that parent's own home. The immediate relatives undertaking this are being asked to take a big chance in giving up their own house and moving in with an elderly relative. They hope that this will be for two years but they will not know how much time they have to look after the elderly parent. They probably hope for a great deal more than two years, but it puts a great strain on the young people.

We do not believe that a great number of people will be involved, but for the sake of giving those people peace of mind the period of two years should be reduced to six months. I believe that the Minister feels that two years is sufficient. However, I believe that the original period was a much longer one. It was said at Second Reading in another place that five years was just a little too long; my right honourable friend in another place suggested that five years was too long. I believe that the Minister has come a long way in suggesting two years, but even that is too long. A period of six months has been suggested by people with experience; namely, citizens' advice bureaux and other groups. Perhaps the Minister would consider another figure other than six months but certainly under two years. If that is possible we would certainly go away and consider it. We believe that two years is a very long time, particularly under the circumstances that I have tried to outline. People who undertake to nurse old people are taking the great risk of perhaps being left homeless at the end of the time.

The rest of Schedule 6 gives ample security for the owner or the factor of the house to repossess the house in most cases. There are one or two situations which may cause great tragedy. I hope that the Minister will yield a little on this question. I beg to move.

The Earl of Dundee

Amendments Nos. 45 and 46 appear to alter the residence requirement for someone other than a spouse to succeed to a tenancy. The Government are convinced that the six months' qualification in the existing legislation is too short. It allows someone with very little real link with a house to take over the tenancy of it. As the Committee may be aware, when the Bill was introduced in another place, it proposed that the residence requirement should be five years. The noble Lord, Lord Carmichael, has alluded to that. However, having listened to strong representations from honourable Members in another place, my honourable friend the Scottish Office Minister for Home Affairs and the Environment agreed to reduce that period to two years. I am satisfied that we now have it about right. Two years is long enough to ensure that anyone succeeding to a regulated tenancy has developed real links with the house concerned, but does not impose an unreasonable requirement.

Perhaps I may refer to Amendment No. 25, which I moved earlier, and in doing so confirm to the noble Lord, Lord Carmichael, that the amendment has nothing to do with succession to regulated tenancies. The period of residence applies only to such tenancies. I should also like to refer to the area of transitional arrangements. We feel it is right that the position of people who move into a tenant's house before the Bill comes into effect, and who have lived there for six months or even more but not two years when the tenant dies, should be considered. Having said that, I do not expect those circumstances to arise in many cases. Nevertheless, the position of such people needs to be clarified. I should like to give notice to the Committee that we intend to bring forward proposals to cover that point at a later stage. I hope I have said enough to persuade the noble Lord not to press the amendment.

Lord Carmichael of Kelvingrove

I am grateful to the Minister for the last point he made. However, I feel that the issue before us is important. There has been strong pressure and the matter is one at which we must look more thoroughly. If the Government get their way the working of the Bill will prove to be a great problem for local councillors, citizens advice bureaux, Members of another place and Members of this Chamber. Therefore, in order to make the Government see how seriously we treat it, I should like to test the opinion of the Committee.

5.2 p.m.

On Question, Whether the said amendment (No. 45) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 148.

Amherst, E. Jeger, B.
Ardwick, L. John-Mackie, L.
Attlee, E. Kirkhill, L.
Banks, L. Leatherland, L.
Basnett, L. Listowel, E.
Birk. B. Lloyd of Kilgerran, L.
Blackstone, B. Lockwood, B.
Blease, L. Longford, E.
Bonham-Carter, L. Lovell-Davis, L.
Bottomley, L. McIntosh of Haringey, L.
Briginshaw, L. Mackie of Benshie, L.
Brooks of Tremorfa, L. McNair, L.
Bruce of Donington, L. Mar, C.
Carmichael of Kelvingrove, L. Mason of Barnsley, L.
Carter, L. [Teller.] Molloy, L.
Cledwyn of Penrhos, L. Morton of Shuna, L.
Cocks of Hartcliffe, L. Nicol, B.
David, B. Pitt of Hampstead, L.
Davies of Penrhys, L. Ponsonby of Shulbrede, L. [Teller.]
Dean of Beswick, L.
Donaldson of Kingsbridge, L. Prys-Davies, L.
Elwyn-Jones, L. Rea, L.
Ennals, L. Ritchie of Dundee, L.
Ewart-Biggs, B. Seear, B.
Ezra, L. Serota, B.
Falkender, B. Shackleton, L.
Falkland, V. Shepherd, L.
Fisher of Rednal, B. Stallard, L.
Foot, L. Stedman, B.
Galpern, L. Taylor of Blackburn, L.
Gladwyn, L. Taylor of Gryfe, L.
Glenamara, L. Taylor of Mansfield, L.
Grey. E. Tordoff, L.
Grimond, L. Turner of Camden, B.
Hampton, L. Underhill, L.
Harris of Greenwich, L. Wallace of Coslany, L.
Hatch of Lusby, L. Wells-Pestell, L.
Houghton of Sowerby, L. Whaddon, L.
Hughes, L. Williams of Elvel, L.
Hylton, L. Winchilsea and Nottingham, E.
Jay, L.
Airey of Abingdon, B. Brougham and Vaux, L.
Aldington, L. Bruce-Gardyne, L.
Alexander of Tunis, E. Butterworth, L.
Allenby of Megiddo, V. Caithness, E.
Allerton, L. Cameron of Lochbroom, L.
Ampthill, L. Carnegy of Lour, B.
Arran, E. Carnock, L.
Auckland, L. Cathcart, E.
Balfour, E. Cawley, L.
Bauer, L. Chelmer, L.
Beaverbrook, L. Chelwood, L.
Belhaven and Stenton, L. Coleraine, L.
Beloff, L. Colnbrook, L.
Belstead, L. Constantine of Stanmore, L.
Bessborough, E. Cork and Orrery, E.
Birdwood, L. Cottesloe, L.
Borthwick, L. Cowley, E.
Boyd-Carpenter, L. Cox, B.
Brabazon of Tara, L. Cross, V.
Brookeborough, V. Cullen of Ashbourne, L.
Dacre of Glanton, L. Milverton, L.
Davidson, V. [Teller.] Monk Bretton, L.
Denham, L. [Teller.] Montgomery of Alamein, V.
Dilhorne, V. Mottistone, L.
Dundee, E. Munster, E.
Eccles, V. Nelson, E.
Ellenborough, L. Nelson of Stafford, L.
Elliott of Morpeth, L. Norfolk, D.
Erne, E. Nugent of Guildford, L.
Erroll, E. Onslow, E.
Faithfull, B. Orkney, E.
Fanshawe of Richmond, L. Orr-Ewing, L.
Ferrers, E. Oxfuird, V.
Fortescue, E. Pender, L.
Gainford, L. Perth, E.
Gisborough, L. Polwarth, L.
Glenarthur, L. Porritt, L.
Goold, L. Prior, L.
Gray of Contin, L. Pym, L.
Gridley, L. Rankeillour, L.
Hailsham of Saint Marylebone, L. Reay, L.
Rees, L.
Halsbury, E. Renton, L.
Hardinge of Penshurst, L. Renwick, L.
Harmar-Nicholls, L. Rippon of Hexham, L.
Havers, L. Rodney, L.
Hayter, L. St. Aldwyn, E.
Henley, L. Saltoun of Abernethy, Ly.
Hesketh, L. Sanderson of Bowden, L.
Hives, L. Sandford, L.
Holderness, L. Seebohm, L.
Hood, V. Selborne, E.
Hooper, B. Selkirk, E.
Hunter of Newington, L. Sharples, B.
Hylton-Foster, B. Skelmersdale, L.
Johnston of Rockport, L. Slim, V.
Joseph, L. Somers, L.
Killearn, L. Stodart of Leaston, L.
Kimberley, E. Strange, B.
Kinloss, Ly. Strathcarron, L.
Kitchener, E. Strathclyde, L.
Layton, L. Strathcona and Mount Royal, L.
Lloyd of Hampstead, L.
Long, V. Swinton, E.
Lucas of Chilworth, L. Terrington, L.
Lurgan, L. Teviot, L.
Lyell, L. Thomas of Gwydir, L.
McFadzean, L. Thorneycroft, L.
Mackay of Clashfern, L. Trafford, L.
Macleod of Borve, B. Vaux of Harrowden, L.
Margadale, L. Westbury, L.
Marley, L. Whitelaw, V.
Massereene and Ferrard, V. Windlesham, L.
Merrivale, L. Wise, L.
Mersey, V. Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.11 p.m.

[Amendments Nos. 46 and 47 not moved.]

Schedule 6 agreed to.

Clauses 44 to 52 agreed to.

Clause 53 [Right conferred by Part III]:

Lord Carmichael of Kelvingrove moved Amendment No. 48: Page 30, line 42, after ("Homes") insert ("or public sector landlord").

The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments No. 49 and 57. The amendments seek to address the principles of choice. They aim to give tenants of public sector landlords and approved landlords equal rights when they choose a new landlord. This part of the Bill is all about tenants' choice. The exclusion of public sector landlords from becoming receiving landlords surely undermines the declared object of giving tenants choice.

District and island councils in Scotland are experienced landlords. They have managed about 840,000 properties for a long time. They have vast experience of landlord-tenant relations. Their housing departments offer vast areas of expertise. In the past 10 years they have become even better because they are much more professional. They have become computerised, and the allocation system, although every attempt was made to make it fair before, has become fairer and a bit easier because of the application of modern management techniques and the computer.

Tenants are keen to be able to have a public sector landlord. The Minister may be aware that in a recent poll of Scottish Special Housing Association tenants in Stirling district 92 per cent. of those who responded (80 per cent. of all SSHA tenants in the area) wanted their local authority added to their choice of prospective landlords. The Minister may be aware of that figure and I am sure that he has paid attention to it. Two other surveys of new town tenants were also carried out recently. The result was that 91.3 per cent. of Cumbernauld Development Corporation tenants surveyed said that they wanted the choice of being able to move to the district council under the tenants' choice proposals. I think that I have a communication from Irvine District Council in the welter of paper that I have. I am not sure whether it was from Irvine, but 88 per cent. of its tenants said that they wanted the choice of being able to move to the district council under the tenants' choice proposals. I also know that tenants in East Kilbride new town would like the choice of moving to the public sector when they move from East Kilbride Development Corporation.

More explanations about choice may be given. Scottish Homes may speak to the tenants and send the material to them to show how much better it would be to go to one of the big landlords whom I am sure the Minister hopes will take over. If wide choice is to be available to existing public sector tenants they should not be denied being able to choose their local authority in preference to their current landlord.

Equally, if tenants of approved landlords are dissatisfied with their service they should be allowed to have a genuine choice, and to transfer to another landlord. As the Bill is presently drafted, if the approved landlord decides to sell the acquired property to another landlord, the tenants affected will be given no choice. The tenant has only one choice; that is, the choice on the first transfer. Even that choice is curtailed. East Kilbride is an old new town now. The people there may always have lived under the aegis of the East Kilbride Development Corporation as their landlord. They will have only one choice—to move to Scottish Homes. They will not be able to move to a local authority. They will be able to go to Scottish Homes or some other body. They will not be able to stay with a public sector landlord. After that, there is no choice.

There is something slightly—dishonest is an improper word—unfair about the idea of calling the proposal tenants' choice, whereas tenants have one choice only—like the Queen bee or the drone bee—and then they are dead. Their choice is probably not as easy as the drone's choice. I hope that the Minister will accept the point. I hope that he knows the feeling that is being stirred up among SSHA tenants and those of the new town developments about the lack of opportunity to move to a local authority.

I am sure that the Minister is aware of the good relationship that exists, which has taken a long time to build up, between SSHA tenants and local authorities. It is now difficult to tell which are which. If they could, a large number of SSHA tenants would opt for the local authority. I beg to move.

Lord Sanderson of Bowden

I am afraid that I cannot recommend that we accept Amendments Nos. 48, 49 or 57. The wording proposed would allow transfers to take place to public sector landlords, as the noble Lord, Lord Carmichael, said. That is directly in opposition to our policy. As I acknowledged on Second Reading, there has been much debate in another place and elsewhere on the point that transfers under the provisions of Part III of the Bill should be allowed to local authorities or back to local authorities. However, I stressed then, and I repeat now, that transfers to local authorities would do nothing to add to the diversity of provision and nothing to ease the burden on local authorities.

In some areas local authority housing forms as much as 80 per cent. of the total housing stock. For instance, in Monklands 79 per cent. of the stock is local authority housing in a population of 109,000. In Motherwell 78 per cent. of the stock is local authority housing, where the population is 150,000. In many other areas well over 60 per cent. of the housing stock is in the hands of the local authority.

Because of the size of that stock, local authorities face a substantial task. While some local authorities cope well with the problems, others are less effective. I do not believe that we should open up the possibility of increasing the scale of local authorities' operations and therefore I consider that the amendment is unacceptable.

I shall continue by emphasising two further points. First, in Scotland, the provisions of Part III do not involve compulsion. No tenant will be forced to change his landlord under the tenants' choice arrangement. The tenant will have to consent to the new landlord approaching his existing landlord (Clause 55(1)(b) refers) and to the terms of the lease he is offered by the new landlord before the transfer can proceed (Clause 57(2)); and by withdrawing consent he can abort a transfer at any time before the sale takes place (Clause 55(4)(b)). Thus all tenants to whom Part III extends can remain as tenants of their public sector landlords if they wish. There will be no compulsion on them to change.

Secondly, although the Bill as drafted precludes the transfer of a house to a local authority under the tenants' choice arrangements, nothing in the Bill will prevent transfers of stock between public sector landlords, or acquisition, for example, by local authorities of private sector stock under other statutory or administrative provisions. Under Section 12(7) of the 1987 Act, for example, the Secretary of State can approve proposals by local authorities to sell their stock to other bodies. This section has been, for example, relevant in the recent sales of stock by Glasgow District Council to community co-operatives and, in Castlemilk, to the SSHA. Also, it is possible for SSHA (and will be possible for Scottish Homes) to seek the Secretary of State's approval, under its administrative rules, to dispose of property.

In the other direction, Sections 2(1)(c) and 9 of the Housing (Scotland) Act 1987 make it possible for a local authority, without requiring the consent of the Secretary of State, to acquire property if it wishes to do so, provided it is prepared to give priority within its capital allocation to the purchase. It would be possible for property acquired in this way to include tenanted property, and any such transfers would in practice require the tenants' consent. I repeat, therefore, that transfers of stock to a local authority, under other statutory provisions, are not ruled out by the Bill before us today.

Finally, the amendment before us would enable a public sector landlord to require another to transfer property to it, if the tenant agreed. After such a transfer had been completed, the tenant, who would of course still be a tenant of a public sector landlord, would be able immediately to exercise tenants' choice again, and so on and so on. The scope for a merry-go-round of transfers is, I believe, a prospect not to he welcomed, particularly by the local authorities themselves. No sooner would one transfer be completed when another would start. The management difficulties which could be caused are easily imagined.

I believe this amendment to be wholly wrong and I must ask the House to reject it.

Lord Taylor of Gryfe

It is extremely difficult to resist the comment that the Minister speaks very rapidly about these complex problems and when he gives assurances one does not have the time to absorb the implications of the statement.

The amendment seeks to address the principle of choice, which is important. It aims to give tenants of public sector landlords and approved landlords equal rights when choosing a new landlord. The exclusion of the public sector landlords from becoming "receiving" landlords surely undermines the declared objective of tenants' choice. This is the point which the noble Lord, Lord Carmichael, was trying to make, and I must say in response that, while I am impressed by the comprehensive reply which has been given, I am not quite sure that I fully understand all the implications. It is extremely difficult to say whether one accepts it or does not accept it or will vote against it under these circumstances.

I feel that the only comment I can make is that I shall try to read the Minister's reply and understand it and perhaps come back to the Minister if I find that it does not address the subject of the amendment which is before us.

Lord Carmichael of Kelvingrove

I agree with most of what the noble Lord, Lord Taylor of Gryfe, has said. I am interested in the point the Minister made that the public sector could still become landlords of houses transferred in the future. I suppose that had to be put into the Bill of necessity for a landlord who had the machinery and apparatus hurriedly to take over houses.

What I cannot understand is that choice is being given and the terms of the Bill are very much concerned with tenants' choice. Here we have overwhelming numbers of tenants who wish to stay with the local authority, but one of the worries raised a number of times on Second Reading is just how easy it will be, when the Bill becomes an Act and begins to work through the system, for tenants genuinely to have a choice so that they need only transfer if they wish. There may be various pressures which will arise and about which we need to be very careful. I think that the local authority tenants and the SSHA tenants, as well as the new house tenants, have given a surprising affirmation of their faith in local authorities as landlords—surprising to many people. Particularly in recent years, anyway, they have recognised the fairness of the housing allocation policy, which is not something which should be talked down at all.

As the noble Lord, Lord Taylor of Gryfe, indicated the Minister has said a great deal and my noble friend, who has a great deal of experience, would like to add something. However, unless some other matter arises, I shall ask leave at a later stage to withdraw the amendment.

Lord Kirkhill

I wanted to make one point to the Minister. On a number of occasions this afternoon he has expressed his desire that tenants should have a very extensive choice. Why that choice should preclude the re-affirmation of local authorities as landlords, I cannot quite understand. I suggest that, although a tenant may not be under compulsion, when he finds others round about him opting for, say, Landlord A, it may well be because the landlord concerned has said that he will rapidly modernise the properties by a given deadline. Peer pressure develops in such a situation.

I myself should have thought that to relocate with the local authority in such circumstances would be a very useful safety valve. If the Minister were to say to me, "Ah, well, but at the end of the day the tenant has to sign his agreement before a commitment sustains in law", I should quite understand that. I should retort that in my experience, which stretches over many years as a local councillor in the city of Aberdeen, where I was ultimately Lord Provost, the tendency is to go with the majority in the area where one lives. That will be a very dangerous situation.

Lord Sanderson of Bowden

Perhaps I may come back for a moment at a slightly slower speed so that the noble Lord, Lord Taylor, can understand what I am talking about on this matter. Surely the whole point must be that, as I have said, the provisions of Part III do not involve compulsion. But I think that when noble Lords see figures such as I have quoted of local authority work in the housing area of 80 per cent., and not much less in some other authorities—and I quoted 79 per cent. for Monklands—they will feel that the local authority housing departments have a tremendous load already.

Quite frankly I have heard about the polls which the noble Lord, Lord Carmichael, has pointed out to us this afternoon. I have to say that I do not believe the result of every poll, looking at some of the polls on this matter and the way in which they were conducted. The scare stories which went around were such as would have made me frightened of moving from a local authority house to one with someone else as landlord.

What we must do is to go ahead with the plans as the Government wish—that is, to spread the opportunity. I say again, very slowly, to the noble Lord, Lord Taylor of Gryfe, that the provisions of Part III do not involve compulsion.

Lord Carmichael of Kelvingrove

The Minister was speaking of polls and I know what he means. I do not always believe them myself or I should be very unhappy. As regards polls, I think the Minister totally misunderstands the folk feeling towards private factoring in Scotland. This is a terribly important matter. I do not know whether the Minister has lived with a private factor, but so many people have that in their folk memory. I hope that that phenomenon never comes back but it is a very powerful memory. Therefore I am not at all surprised at this figure. I think that the figure of 91 per cent. is quite genuine in the present circumstances. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 49 not moved.]

5.30 p.m.

The Earl of Selkirk moved Amendment No. 50: Page 30, line 44, after ("proprietor") insert ("or leaseholder").

The noble Earl said: This amendment is, I am afraid, wrongly drafted. My amendment seeks to establish that the Scottish have the right to acquire from a public sector landlord any house which is occupied by a qualifying tenant and of which on that date the landlord is the heritable proprietor.

But what happens if the landlord is not the heritable proprietor? Let us suppose that he is the leaseholder, as I believe is the case in a number of local authorities. Does this provision exclude leaseholders or is there some more complicated arrangement whereby the private proprietor could take over the leasehold? I do not know what is in the Government's mind. I am only asking whether that has been considered and what solution, if any, the Government have been able to find. I beg to move.

The Earl of Dundee

I am grateful to my noble friend for his question. Indeed, as he has mentioned, in some parts of Scotland, particularly in Lanarkshire, local authorities do not hold houses as outright owners but on long leasehold tenure. For tenants' choice to operate in such cases would require an assignation or partial assignation of the landlord's interest in the lease. I understand that in most cases this would be either impossible or impracticable.

Even if this were possible I should not have thought that any prospective new landlord would want a leasehold interest. With this in mind we therefore brought forward in another place amendments which were agreed and which specifically ruled out tenants' choice applying to houses held on lease by public sector landlords. I believe that this is a wholly sensible exclusion and that Part III should apply only where the public sector landlord is the heritable proprietor. I hope that explanation may be of some help to my noble friend and that he may see fit to withdraw his amendment.

The Earl of Selkirk

I thought that that was probably the answer I would receive. That means that unless one is a heritable proprietor this particular branch of Part III does not apply at all. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove had given notice of his intention to move Amendments Nos. 51 and 52: Page 31, line 44, leave out ("may") and insert ("shall"). Page 31, line 44, leave out ("only").

The noble Lord said: In looking at Amendment No. 51 I felt that I had been wrong in not suggesting earlier, when the Minister told us of the possible groupings, that it should be grouped with Amendment No. 56. I am sorry that it is not. However, to me this is a paving amendment for Amendment No. 56. I may be quite wrong in that regard but in these circumstances I shall not move the amendments at this stage.

[Amendments Nos. 51 and 52 not moved.]

Lord Mackie of Benshie moved Amendment No. 53: Page 31, line 45, leave out ("one-third") and insert ("one-fifth").

The noble Lord said: We come now to what is really rather an old friend which we discussed a great deal during the previous housing Bill. A good deal of experience has been gained by councils in rural areas since then.

I may be able to explain this provision quite simply by saying that what we want is that, instead of one-third of the houses having to be sold under the terms of the Act before a council in a rural area so designated is able to retain them, another figure should be substituted. We think that a figure of one-third would be a disaster and that a figure of one-fifth is still a fairly serious amount.

The Bill states in regard to the proportion of houses sold that in addition the Secretary of State must be satisfied that an unreasonable proportion of the houses have been sold not as principal homes but as holiday houses. One of the great troubles, as all of us who live in rural areas know, is that there is a big shortage of houses to rent. Normally in rural areas the gross or individual incomes are not up to the level of the incomes in more prosperous urban areas or areas situated near to urban centres. Therefore the need to retain the working population in the countryside by means of rented accommodation is very much greater.

Other factors are now creeping into this. To ask that we define the number of homes sold and limited as holiday homes to one-tenth would be also quite reasonable because nowadays a very large number of houses in the country are sold to people who, for example, have houses in London which have so swollen in value as to be worth a quarter of a million or even half a million pounds. With that kind of figure people who are retiring can sell their houses in London, move to a country house and live in great comfort on the extra capital which they have acquired. Such a house does not count as a holiday home but it still has exactly the same effect on the number of homes to let in the country areas.

We regard this as a very serious problem. The Government have agreed the figure of one-third. They have agreed that there is a problem. We wish to reduce the figure of one-third to one-fifth. I shall be most interested to see whether the Minister can give us figures for houses which have been sold in these areas. We think that one-fifth is a very reasonable figure and that even that one-fifth could do great damage to the economy. We want to define the figure which would apply as one-tenth. We wish also to make that figure an alternative and not an addition to the one-third. I shall say no more just now because I am sure that the Minister, who knows the problems in the country, will have applied his common sense to this matter and will be able to give a satisfactory answer or a promise. I await that with interest.

Lord Hylton

I am bound to say that I am somewhat encouraged by reading Clause 53. It makes me think that perhaps the Government have begun to learn something from the experience in England. They were warned time after time during the course of the Housing Act 1980 in England that there would be serious problems in English rural areas. Those warnings were borne out in practice. I imagine that exactly the same situation applies in Scotland.

It is encouraging that at last the Government appear to have taken this problem on board. As regards the amendment of the noble Lord, Lord Mackie of Benshie, I am delighted that it draws further attention to what is a very acute and serious matter, as I know from Somerset and as all my rural colleagues tell me from all over the shop, particularly in national parks, in areas of outstanding natural beauty and other such areas. The famous Sandford amendment of 1980 did not by any means solve that problem.

This is a serious matter and I hope that the Government will look very carefully at this amendment.

Lord Sanderson of Bowden

I have listened carefully to what the noble Lord, Lord Mackie of Benshie, has said. I am not surprised that he has moved this amendment. However, before the Secretary of State can designate an area as a rural area and thus exempt houses from the tenants' choice provision in Part III of the Bill, two processes have to be gone through. First, one-third of the total public sector housing stock in the area before the right to buy came into effect must have been sold under the right to buy, tenants' choice or otherwise. Secondly, the Secretary of State must consider whether, in his view, an unreasonable proportion of houses which have been sold have been resold and are not owner-occupied or rented in the normal way; in other words, they are used as holiday homes.

I know that a number of district councils have argued that it will be so difficult to satisfy both of those criteria that in practice no designation orders will ever be made. That point was also raised in another place. However, I believe that the provisions in Clause 53 and in the right-to-buy provisions in the 1987 Act are more flexible than Members of the Committee who have spoken may realise.

The word "area" in Clause 53(4)(c), which is to be found at page 31, line 33 of the Bill, is deliberately not defined. A local authority could apply to the Secretary of State for a designation of an area covering all of the particular district council or a particular town, village or group of houses. The first test which must be fulfilled before an order can be made—that is, that one-third of the houses in the area have been sold—therefore presents much less of a difficulty to authorities than they may have appreciated because the definition is flexible.

I believe that Clause 53 as it is presently drafted is sensible. I give noble Lords the assurance which was given to Members of another place that any applications received from local authorities for areas to be designated under the provisions will be looked at very carefully. We shall consider each application carefully on its merits. I hope that with those assurances the noble Lord will be prepared to withdraw the amendment.

Lord Mackie of Benshie

I understand that a district authority could ask for a parish to be designated. That was not my understanding previously and I am grateful to the Minister for pointing that out. Perhaps I may ask him whether he has any figures for numbers of houses sold in particular areas which have gone as holiday homes or been taken up as retirement homes, which is just as important. Those figures would be very useful in considering certain areas.

As the Government have acknowledged, the problem is very real. I think that the figure of one-third must be far too high for a parish area. I can think of parishes where, if one-third of district council houses to let had been sold, there would be grave trouble in manning the services in the area. Perhaps the Minister can give some indication of those figures.

The Earl of Selkirk

Perhaps my noble friend will also clarify what houses are included. There is always a disagreement as to whether housing association homes are publicly owned. Does the provision include Scottish Homes, the Housing Corporation and local authority housing? What is included?

Lord Sanderson of Bowden

First, I do not have the figures. Perhaps the noble Lord, Lord Mackie, will look at what I have said. I shall look most carefully at what he has said to see whether some basis of agreement can be arrived at. However, we are in the very early days so far as concerns the right to buy.

As regards housing stock which must be considered, local authority housing and housing association houses are included in the figures which must be submitted to the Secretary of State. However, if the noble Lord, Lord Mackie of Benshie, is looking to a provision which will have an "either/or" operation, as he indicated and as is mentioned in one of the amendments, I believe he will find that the Government will resist that strongly. I suggest that he looks carefully at what I have said about the area to see whether that is the way in which district councils should address the problem.

Lord Mackie of Benshie

The Minister not only appears reasonable; he often is reasonable. With those assurances and the knowledge that we can come back to the matter, I shall look at it again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 54 and 55 not moved.]

5.45 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 56: Page 32, line 11, after ("house") insert ("excluding those as defined in subsection (4) above").

The noble Lord said: I hesitate to move into this area again because those who have spoken on it are very knowledgeable about country areas and country life. Amendment No. 56 is another facet of the discussion which we have just had. I intervene only because I have received a number of representations from local authorities. I feel it is fair to let the Minister know that. It might have been more suitable to put all the related amendments in one group. However, that was not done. In fairness to those who have taken the trouble to approach Members of the Committee, I feel that we should look at the matter.

One area, the Minister may be interested to know, as it is not far from his home, is that of the Ettrick and Lauderdale District Council. The district council of Bearsden and Milngavie, which is not far from my home, and some of the Western Isles councils have also written. The Ettrick and Lauderdale District Council makes a number of points which I think are relevant and which the Minister should take away, if only to help in the writing of future White Papers. In paragraph 1.29 of the White Paper, Housing: The Government's Proposals for Scotland, it is pointed out: The Government's objectives are equally applicable to the rural areas". No indication was given of the manner in which due regard was to be paid to the circumstances in rural areas. Perhaps it was fairly late at night and whoever was writing the White Paper did not know what to say and simply put that down.

There is a strong feeling in the correspondence I have received that rural areas are not getting the consideration they should. It is very difficult when people, in the circumstances pointed out by the noble Lord, Lord Mackie, sell a house in London and move to a rural area. I can see how the local economy may be distorted. Anyone living in a London house long enough can buy almost any house they wish in Glasgow because of the increased values of London property.

I speak only to emphasise the widespread feeling of disquiet. Perhaps none of us has answers other than designating local areas and finding a formula which will be accepted for designating rural areas. I hope that the Minister will realise that concern is felt not only by those in rural areas but also by the rest of us.

The Earl of Dundee

I am grateful to the noble Lord. He is right in saying that we must do everything we can for rural areas and isolated communities. However, I believe that the amendment which he has brought to our attention, so far as it relates to all houses covered by Clause 53(4), would confuse the statutory position and make its interpretation extremely difficult. That is so because subsection (4)(c) refers to houses in an area which the Secretary of State has already designated as a rural area. I am not sure whether the noble Lord, Lord Carmichael, intended to include subsection (4)(c). It may be that he was seeking to ensure that the same houses are not counted twice if a local authority seeks to have the Secretary of State designate as a rural area an area including, as a part, an area already designated. I think I see the noble Lord nodding his head. If so, however, there is nothing in the Bill as at present drafted which would prevent the local authority applying to the Secretary of State to designate as a rural area only the additional parts of the area the local authority has in mind. In the circumstances, I believe that in its present form the amendment is confusing and that it makes an unnecessary reference to subsection (4)(c).

Although I can appreciate the basic arguments and concerns which the noble Lord has deployed on excluding special needs houses from the calculation which determines whether the one-third threshold has been reach, I believe that my previous point on the choice of "area" is again relevant.

The word "area" in subsection (4)(c) of Clause 53 which reads through into subsection (6) is not defined. That is deliberate. In that way, a local authority could seek designation for the whole area of the authority, or for a parish, town, village or indeed group of houses. It would not seem, therefore, beyond the ingenuity of a local authority to exclude from the "area" chosen in its application special needs houses as covered in subsection (4), particularly those groups of houses in subsection (4)(a). Therefore, I believe, that the amendment is unnecessary in that the effect it is designed to produce can already be achieved by a local authority by shrewd delineation of the area in question.

I hope that those few remarks will be of some help to the noble Lord and that he will see fit to withdraw his amendment.

Lord Carmichael of Kelvingrove

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 53 shall stand part of the Bill?

Lord Hylton

Once again I should like to thank the Government for Clause 53(4). It shows that the very long debates we had in your Lordships' House in 1980—and I think on one or two subsequent pieces of legislation—have sunk in. We now have a clear exception for sheltered housing and special provision even for houses, bungalows and so on specially designed for persons of pensionable age and for disabled people. I hope that this will prove a good precedent, an omen, for the English legislation that has yet to reach us.

I do not know whether the noble Lord would like to be drawn on that point. If he feels like being drawn perhaps he would also say something about houses in rural areas in England.

Lord Sanderson of Bowden

I certainly do not want to be drawn. I talked earlier today at Question Time about the English educating the Scottish. However, I have no doubt at all that any Bill that is passed through your Lordships' House dealing with housing in Scotland will be taken due note of by the Government in relation to their responsibilities in the Department of the Environment.

Clause 53 agreed to.

Clause 54 [Persons by whom right may be exercised]:

[Amendment No. 57 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 58.

Page 32, line 44, at end insert— ("( ) For the purpose of inquiry into the affairs of approved persons or any subsequent purchaser, sections 28 to 32 of the Housing Associations Act 1985 shall apply as if approved persons or any subsequent purchasers were a registered housing association and as if this section was contained in an Act in force immediately before the commencement of this Act").

The noble Lord said: We are proceeding rather more rapidly than I have been able to keep pace with. The Minister is aware of that.

The purpose of the amendment is to extend to Scottish Homes the same rights to inquire into the affairs of an approved person and to take any necessary subsequent action as are currently available to the Housing Corporation in respect of housing associations. The Housing Associations Act of 1985 at present gives the Housing Corporation general powers to inquire into the affairs of housing associations, to take action to sort out their management or to transfer their assets to other associations or to the Housing Corporation. The Bill is silent about the rights of Scottish Homes to intervene and rectify management problems of an approved person. The amendment is a means of securing a degree of supervision of all approved landlords in the same way as can currently be exercised in relation to housing associations.

The amendment gives expression to all the worries that I have had about private landlords. I should like the Bill to succeed. As I have said repeatedly and as I continually maintain, I do not care who owns houses so long as people are able to have a suitable roof over their head at a rent they can afford. However, the Minister should not underestimate the great problems that there have been with private landlords in Scotland. Therefore, he has to make very sure that any bad apples are pulled out of the barrel immediately.

If we are to have decent private rented accommodation, the factors who run it must be of the very highest standard in every way. I believe that this is a very important amendment for the sake of the success of the Minister's own Bill. I beg to move.

Lord Sanderson of Bowden

This amendment seeks to apply to receiving landlords, under tenants' choice, the powers of the Housing Corporation in relation to registered housing associations which were designed for use in extremis. I think that the Committee will readily see that that would be inappropriate and would have unacceptable potential consequences.

I have said that those powers are designed to be used in extremis. They are the ultimate sanction. To put that into context, none of the powers in Sections 29, 30 or 32 has ever been used. Section 28 has been used only on one occasion in recent years. As a technical point, Section 31 does not apply to Scotland. I think that the reason for that lack of use will be clear to the Committee if I elaborate on the nature of those powers.

Section 32 of the 1985 Act enables the Housing Corporation to require a housing association to transfer its entire housing stock to somebody else. Applied to a receiving landlord under tenants' choice, that would quite simply be confiscation by the public sector of private property. Section 30 of the 1985 Act enables the Housing Corporation to order a bank where a housing association has its account not to part with any of the money, to direct an association as to the transaction which may or may not be entered into, or to remove members of the association or sack any of its employees. In our view it would be entirely wrong for those powers to be exercisable in relation to a private company which has been approved as a tenants' choice landlord. That is an important point.

We intend that approvals of receiving landlords should be subject to control by more appropriate means. Where appropriate Scottish Homes has power to attach conditions to its approval of a landlord. Such conditions would normally be expected to require a landlord to give Scottish Homes information sufficient to enable the progress of the transferred houses to be monitored—by making an annual report, for example. Such conditions could be adjusted to the needs of different forms and standings of landlord. Scottish Homes will monitor landlords and use its best offices to ensure that the promised services are delivered by receiving landlords.

I am very glad to hear that the noble Lord, Lord Carmichael, wishes the Bill well. Indeed, so do we all on this side of the Chamber. There is a very important job to be done. It underpins the point I made at Second Reading that the importance of Scottish Homes should not be underestimated and that the power and influence that it will bring to bear in Scotland is something we look forward to seeing. We hope that it will do for Scottish housing what the Scottish Development Agency has done for industry.

Lord Hylton

In his reply the Minister drew our attention to certain safeguards which, he says, will be built in when houses are transferred. However, I wonder whether these are likely to be sufficient. There have been cases of housing associations getting into difficulties and having to be bailed out by the Housing Corporation or merged with other associations or taken over. We have also had experience of building society fraud, and it would not surprise me at all to learn that one or two tenants' co-operative associations had found themselves in financial difficulty.

If bodies of that kind can get into difficulties, how much more likely it is that private landlords, whether or not they are companies, will also over time find themselves in speculative positions or illiquid or something like that, which would have very prejudicial consequences for their tenants. I think that the noble Lord who moved this amendment has done a real service and I hope that the Government will give the matter further thought.

Lord Carmichael of Kelvingrove

I have listened to the Minister and I think that we are all trying to do what is right. I hope that when reading the record of our discussion I shall remain convinced. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 p.m.

Lord Morton of Shuna moved Amendment No. 59:

Page 32, line 44, at end insert— ("( ) An approval under this section shall be subject to the adoption by the approved person of a Code of Practice in such form as may be prescribed by regulations made by the Secretary of State by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament; and failure to conform with this Code of Practice shall be grounds for the revocation by Scottish Homes of the approval.").

The noble Lord said: This amendment, tabled in my name and those of my noble friend Lord Carmichael of Kelvingrove and the noble Lords, Lord Taylor of Gryfe and Lord Mackie of Benshie, is intended to qualify the conditions under which the landlord can be approved by Scottish Homes for the sake of the transfer of tenancies. The idea behind the amendment is that the Secretary of State should prescribe a code of practice so that adherence to the code will be the criterion upon which Scottish Homes will or will not approve any potential landlord.

As the Bill stands, there is provision for the approval of landlords by Scottish Homes, but the Bill is quite silent on the conditions or criteria to be used in granting approval. So far as one can see, Scottish Homes could adopt a procedure to approve, for example, red-haired landlords but not anybody else. That would obviously be absurd. The concerns expressed about the tenant's choice arrangements have concentrated on the lack of control of the new landlords other than housing associations and the fear of malpractice and maladministration. Tenants who exercise their right to choose an alternative landlord lose the range of rights that they were given in 1980 and which were consolidated in 1987.

It cannot be the intention of the Government—I hope it is not—that the tenants should be disadvantaged. The loss of tenants' rights would act as a powerful disincentive to tenants considering transferring to an alternative landlord. For those who exercise their rights the realisation of the weakening of their statutory position may come too late and the opportunity to transfer back to a secure tenancy does not exist.

We consider that a statutory code of practice, which of course has been attacked in various ways and in different situations in other Bills, is a means of simultaneously securing control by the Government, through Scottish Homes, of the practices adopted by approved landlords and the terms of tenancy under which they make rented property available. In this way the Government can be seen to be protecting the interests of tenants. Responsible landlords would not be deterred by a code of practice provided that it did not undermine the financial basis of their involvement. Thus the adoption of a code can be seen as making easy rather than impeding transfers of tenancies.

The principle of a statutory code is similar to the social landlords' charter which was promised by a Minister during the Committee stage of the Housing—and I should like to add (England)—Bill. The Minister in charge of that Bill in another place said that he wanted to introduce some sort of statutory code that would bite by means of contracts to tenants and would apply to various landlords judged to be decent participants in the newly defined social sector, but that promise has not yet found expression in the legislation. It is essential that the code has statutory force. It cannot be left to a set of model rules or recommendations. Public sector tenants enjoy statutory rights and safeguards at present. Anything short of a statutory code would undermine their position and therefore make them very unwilling to transfer to a new landlord.

It would of course be preferable for the detailed contents of a statutory code—or at least the principles—to be specified in primary legislation, but we appreciate that it is not possible to insert that in this Bill given the stage that it has reached. Therefore as a second best we suggest that this should be left to the Secretary of State. The intention is that the code should cover minimum criterion standards to be adopted by landlords. It could be used to require landlords to conform with minimum standards of accountability and availability of information and enable tenants to exercise choice in an informed manner. It could also be used to oblige approved landlords to consult with local authorities in their strategic capacity in order to ensure that landlords' activities could be co-ordinated as part of an overall housing strategy.

On the other hand, the code would re-establish in law the terms of tenancy currently contained in Part III of the Housing Act 1987 and thus preserve rights which would otherwise be lost by tenants transferring to a new landlord. Those terms include the right (which was introduced in 1980) covering security of tenure, the right of succession, the right to a written lease, and the right to undertake repairs and improvements. It is doubtful whether the right to buy could be included without discouraging potential landlords from seeking approval.

If a landlord failed to conform with such a code, approval could be revoked by Scottish Homes, thus excluding him from further participation. I suggest that this amendment is a convenient method of safeguarding tenants' rights and securing minimum standards. I hope and trust that the Government will accept it. I beg to move.

Lord Mackie of Benshie

I should like to say a few words in support of the amendment which has been so ably moved by the noble Lord. The code of practice offers protection not only for the tenants; it is certainly a protection for the landlord. As the noble Lord, Lord Morton, implied, Scottish Homes could take a dislike to bald-headed landlords, and that would be a disaster. It is necessary to lay down some code of practice. The Minister may not agree with everything that the noble Lord said but the principle must be right, because at the end of this clause the Bill states quite clearly: An approval under this section may be revoked by Scottish Homes, but without prejudice to any transaction previously completed". The power is there. This amendment simply asks for the conditions to be defined. I should have thought that potential landlords would welcome a code because it gives them a basis on which to work and certainly a basis on which to argue if they come into conflict with Scottish Homes. I hope that the Minister will accept this amendment.

The Earl of Selkirk

Whether or not the Government want to accept this amendment and have a code of practice, if Scottish Homes is to fulfil its task it is necessary that there should be some kind of inspection. I made a suggestion of that sort rather more specifically on subsection (2) but the Minister did not like it at all. Of course I accept that. But is it intended that there should be a degree of inspection of Scottish Homes? If not, whether or not there is a code, no one will know what is happening. There is nothing to indicate it in this Bill although no doubt there are deep thoughts in the mind of the Minister. I should be interested to know what they are.

Lord Sanderson of Bowden

I recognise the concerns that have been expressed here, the deep thoughts by many noble Lords on all sides of the Chamber on this matter. I know that in another place this matter was debated. There have been entirely misconceived scare stories of old-style private landlords in precarious financial circumstances offering a poor quality of service to tenants who have been coerced from the safety of the public sector.

Scottish Homes will have ample powers to ensure that this will not be the case. Many of the landlords to which it gives approval will be familiar and respected names. Housing associations, landlord arms of building societies, and other major financial institutions are likely to be prime choices by tenants. Other landlords are likely to include those formed by the tenants themselves, such as co-operative or housing associations; and here again a general purpose code seems inappropriate.

The question of ensuring that landlords—who are in receipt of public money and who are approved for the purposes of tenants' choice—provide a good housing service to their tenants was discussed on several occasions in another place. There is a variety of ways of achieving this, and different methods may be appropriate for different circumstances. For example, it may be sensible to have different mechanisms relating to registered housing associations, such as the model tenancy agreement that I mentioned in relation to Amendment No. 18 earlier today.

I refer to the remark of the noble Lord, Lord Morton of Shuna. I am aware that there have been various proposals discussed in England but I think that it would be sensible, given our Scottish Homes proposal, to consider separately the right approach for Scotland. Scottish Homes will be able to give approval, subject to conditions, that could include conditions as to practice, management, or any other term that a code might include. Contractual conditions of this kind can be tailored to the individual landlord and the needs of the transferring tenant in a way that a code cannot. Landlords will no doubt wish to remain able to receive further groups of tenants. It will therefore be in their own interest to provide a good service. Otherwise tenants will not choose to go to them and Scottish Homes will withdraw approval.

Although I believe we share the view that receiving landlords should have integrity, provide a good quality of service and be financially sound, I do not see this amendment contributing to the attainment of that aim. I understand the strong feelings on this matter but I hope that the noble Lord will agree to seek leave to withdraw his amendment for the reasons that I have specified.

Lord Morton of Shuna

I am disappointed. Up to now I have found the Minister's contributions to this Bill helpful. What he has said now in my view is complete rubbish. He is saying in effect that Scottish Homes is to be given power to approve of those of whom it cares to approve, to disapprove of those of whom it cares to disapprove and any potential landlord is to have no standard, and no method of challenging such disapproval. That seems to me to be basically unjust.

There is a complete carte blanche. Whether one chooses red-haired people (I was taking the example from a 1947 case), or bald-headed landlords (as suggested by the noble Lord, Lord Mackie of Benshie), it is quite open under Clause 54 to be completely irrational in one's approval or non-approval. There must be some standard set.

Scottish Homes is given no standard upon which to act except what it considers best. If we are to have a statutory body—which is what Scottish Homes will be—controlled by the Secretary of State, and therefore by the Government, we must ensure that it has some standard upon which to act. To have complete freedom to do what one likes, and then for any government to say, "This is not a government body; it is taking an independent choice," seems to me to be entirely wrong. Some standard must be laid down. It may not be a code of practice but it must be some standard, and not a complete piece of waffle.

I shall withdraw the amendment at this stage but I can assure the Minister that we shall return with some definition. I suggest that he reads what the Minister from the Department of the Environment said in another place.

Lord Sanderson of Bowden

Before the noble Lord sits down, perhaps I may respond to him. I very much hope that we shall not suspect Scottish Homes of abuse of its powers before it comes into existence. Surely the remedy for any landlord who feels aggrieved about the propriety of the basis of Scottish Homes's decisions must be to leave the correctness of those decisions to judicial review. Am I not right?

6.15 p.m.

Lord Morton of Shuna

That is fine, but judicial review—as the Minister knows full well—is only a review of administrative action. The person administering the review has to decide on the powers that are given to the body, the Minister, or whatever, that is being challenged. Has the body, the Minister, or whatever, acted within those powers? Let us look at Clause 54. There is no way that anybody can say that a matter is outwith the body's powers. It has power to do anything. That is what is wrong.

Lord Taylor of Gryfe

Before the amendment is withdrawn, perhaps I may press the Minister a little further. The changes involved in this Bill are important. We shall have a new organisation, Scottish Homes. No one knows it at the moment; it is a new quango. It has to establish its authority and credibility in relation to the public. Therefore I suggest that to lay down a code, or to set out criteria on which it would make judgments in this matter, would be to its advantage.

A point was made by the noble Lord, Lord Carmichael, with his experience of Glasgow and the west of Scotland. Traditionally in Scotland there is a kind of class war attitude that the landlords are all evil-doing, rapacious people. This goes back in folklore. It is part of the thinking in the west of Scotland. I do not say it is the thinking of the noble Lord.

Lord Carmichael of Kelvingrove

I hope my noble friend will accept that while I deplore the attitude in many ways, I deplore the reason it started—because those facts were true.

Lord Taylor of Gryfe

I am saying that it is a fact of life. It is important, if this new coalition of housing interests is to work, that we should establish a new climate in tenant landlord relationship. I suggest that accepting this amendment and laying down a criterion on which we judge good landlords could be to the advantage of this Bill and its acceptability to the Scottish public.

Lord Mackie of Benshie

On the same point, will the Minister tell me whether I am right? In his explanation he said that the tenants would be protected by the contracts between Scottish Homes and the landlord. If that is the case, obviously the Minister, or someone, is laying down criteria for the contracts to be drawn up. It therefore strengthens the case for guidelines that will be known to both parties.

Lord Sanderson of Bowden

We have had a very useful exchange on this matter. I see very clearly the point the noble Lord, Lord Morton and others are aiming at. Scottish Homes would be subject to the general duty to act reasonably. However, I shall study what the noble Lord and others have said on this issue. I have no doubt that we shall return to it.

Lord Morton of Shuna

I am very glad that the Minister has had reason returned to him after a short interval when it was away. I hope he will give favourable consideration to this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 54 shall stand part of the Bill?

Lord Hylton

I have looked carefully at the Bill, thinking that I might find somewhere in it a reference to housing action trusts in Scotland. These are proposed in the Bill for England still in another place. It is known that in England there is a vast backlog both of repairs and improvements to local authority housing estates, particularly in large cities and industrial areas. I should have thought that it was likely that similar conditions apply in certain parts of Scotland.

In my own experience—having spent one night on a housing estate in north Edinburgh about six years ago where half at least of the flats and maisonettes were boarded up—conditions seemed to be getting into a worse state by the month. It may have been righted by now. But that seems one possible place where a housing action trust could have operated.

Will the Minister say, if these trusts are not to be included in the Bill, whether they will be brought in under some other legislation or by some other means? Will they be included in the general category of "approved persons"?

The Earl of Dundee

It may be helpful to the noble Lord, Lord Hylton, if I were to tell him that we have included as approved persons the housing associations, the building society landlords and the co-operatives formed by tenants associations and by tenants themselves and also responsible private landlords. There are no categories as such. And, unlike England, there will be no housing action trusts in Scotland. I hope that will be of assistance to the noble Lord.

Lord Hylton

Is the noble Lord suggesting that he does not think they are necessary in Scotland?

The Earl of Dundee

In no way is it to be inferred that such trusts are not necessary. But we have a different system in Scotland of achieving the same effect.

Lord Morton of Shuna

Perhaps the Minister will enlighten the Committee rather more, because we have housing action areas which local uthorities may define. There are some in Edinburgh and no doubt quite a few in Glasgow. Is it not possible to have housing action trusts? I do not know, but perhaps the Minister will be able to enlighten us. Are local housing action areas to be dealt with only by the local authorities or housing associations? What is the Government's position?

The Earl of Dundee

Scottish Homes, the establishment of which is not paralleled in the English Bill, should be able to achieve all that housing action trusts will do on the basis of voluntary co-operation. I believe that local authorities in Scotland would not welcome housing action trusts.

Clause 54 agreed to.

Clause 55 [Application to exercise rights conferred by this Part and offer to sell]:

Lord Carmichael of Kelvingrove moved Amendment No. 60: Page 33, line 31, at beginning insert ("the price being the higher of').

The noble Lord said: This amendment concerns an area that local authorities are concerned about. It has been suggested that the amendment be grouped with Amendment No. 61.

The reason for the amendment is that it would be unreasonable for recently built or modernised houses—those that will be the most popular and which people will be most anxious to have transferred—to be sold at less than the cost incurred by the original landlord in respect of the house in the last five years. The result would be that the original landlord's remaining tenants would be paying off the balance of debt in the house. That is the only way I can see the original landlord selling at less than the cost had been to him. The remaining tenants would be paying off the debt and therefore subsidising either the new landlord or the tenants of the landlord, if he was very generous—or perhaps a hit of both.

If transfers take place on a substantial scale, the financial implications for those tenants who remain with the council could be serious. Fewer and fewer tenants would be servicing the remaining debt. Tenants who choose to remain with the council should not be expected—I believe the Minister agrees that it would be unfair—to finance improvements for those who choose to leave.

Using the district valuer's value is not sufficient. There should be included the costs incurred in respect of the house or houses as defined in Clause 62(2) of the Bill. That is what is proposed by Amendment No. 61. Both amendments together will solve a problem which, unless the amendments are accepted, could make it extremely difficult for tenants who, by definition, will be in the less desirable houses in an area. They would be subsidising tenants in the newer and better repaired houses. I beg to move.

The Earl of Dundee

Although I understand the arguments which the noble Lord, Lord Carmichael, has deployed, I believe that they may stem from a misunderstanding. In the right-to-buy scheme the result of the transaction is that the house becomes owner-occupied rather than tenanted. The price at which this transfer takes place is basically market value with vacant possession less a discount reflecting the time the individual tenant has spent as a tenant of publicly rented 'accommodation.

The result of the transaction which will take place under Part III of the Bill, however, is that the house will move from the public rented sector to the private rented sector. The tenant will remain a tenant. The valuation, as the Bill sets out, will be market value, subject to tenancy. There is no question of any discount reducing the price to the receiving landlord.

As there is no discount, there is no discount to restrict and no justification for any cost-floor arrangement—which is a means by which discount is limited when the right to buy is exercised. Under the tenants' choice provisions as under the right to buy, the price to the purchaser will not be higher than market value. In the tenants' choice case, the price will be at market value. I can understand the argument that individual councillors and local authorities will be concerned at the prospect of selling property without realising from the sale sufficient funds to extinguish any remaining debt on the property. In purely financial terms, however, what matters is the anticipated flow of rental income from letting the house, compared with the flow of costs which will have to be incurred on management, maintenance and repair. These flows will be an important factor in the district valuer's assessment of market value.

Let me assure the Committee also that where transfers take place but the amount of debt outstanding is not extinguished, authorities receiving housing support grant will, under the housing support grant formula, be compensated for the loss. Where an authority does not at present qualify for housing support grant, if sufficient sales take place at below outstanding debt levels significantly to push up loan charges per house, and hence rents, these authorities could once again qualify for housing support grant. The maximum loss to an authority and its remaining tenants is therefore limited.

I do not believe that it would be sensible or logical to introduce any cost-floor restriction on the price of property transferring under Part III of the Bill. In the light of that explanation I hope that the noble Lord, Lord Carmichael, will see fit to withdraw his amendment.

Lord Carmichael of Kelvingrove

I shall need to read the Minister's speech carefully, particularly his remarks about there being no floor price for a house and the allowances for repairs. I believe that the matter will be dealt with in a subsequent amendment, but it is an important responsibility for local authorities. In the hope that there may be greater clarification as we deal with this group of amendments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 61 not moved.]

6.30 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 62: Page 33, line 46, leave out paragraph (c).

The noble Lord said: The amendment questions the whole matter of market values. How can there possibly be a true market value if the only prospective purchasers are Scottish Homes and those approved by it? I believe that it is unrealistic to assume that the only prospective purchasers were in the market for the house and that competition in the open market would not result in a higher transfer value. As written, the clause is inconsistent with comparable council house sales' legislation, which assumes an element of competition under Section 62 of the Housing (Scotland) Act 1987. The Bill will result in unrealistically low transfer values and a loss of resources to the local authority.

I consider that this is a dubious business. The district valuer is supposed to assess rents on the basis of a free market and that the number of houses available is almost in equal balance with those seeking tenancies. I believe that there are too many suppositions and hopes to achieve a real value. However, this provision is even worse because there is only one prospective purchaser. It is not as though the district valuer is making an assessment and then advertising the house for sale in a local newspaper in order that many people may apply. He is making a valuation for Scottish Homes and only for Scottish Homes. He knows that it is the only body involved. In these days of competitive thinking there will be no competition in an assessment made for only one person. I hope that the Minister will look carefully at this issue, give it some thought and perhaps even accept the amendment. I beg to move.

The Earl of Dundee

Amendment No. 62 seeks to remove, from the factors to be taken into account by the district valuer when he determines the value of a property for transfer under the provisions of Part III, the assumption that only persons approved as receiving landlords will be prospective purchasers. Clause 54 of the Bill, however, rightly ensures that only suitable persons or bodies—that is Scottish Homes itself or persons approved by Scottish Homes—can acquire property from the public sector under the tenants' choice arrangements.

It must be right, therefore, to carry through this restriction on the range of prospective purchasers to the arrangements for valuation. It would be quite illogical, in my view, for the Bill to place restrictions on one aspect of the provisions, namely, on the type of landlord who can acquire property, while on the other hand allowing valuations to be carried out on the assumption that other non-approved landlords were in the market. To delete the provisions of Clause 55(6)(c) from the Bill, as this amendment requires, would be to import double standards.

The suggestion has been made that, because of the restriction in the number of landlords assumed to be in the market, the property to be transferred may be undervalued. The criticism might particularly apply, it is suggested, when the tenants' choice provisions first come into force and few landlords have received Scottish Homes' approval. I believe, however, that this concern is not well founded. District valuers, who will make the valuations, are highly expert, independent professionals, and there would have to be very few landlords approved indeed for district valuers not to be able to envisage a bidding situation between them. But even at the very early stages when, say, Scottish Homes is the only purchaser in the market, district valuers' professional expertise and techniques will allow a valid market value to be calculated by assessing the capital value of the flow of rents (if the property were to continue with the secure tenancy) against the anticipated flow of management, maintenance and repair costs. I believe therefore that fears expressed that there will be under-valuations in an artifically thin market are unjustified.

The Bill, as drafted, seeks to maintain a balance between guiding district valuers in their task yet at the same time avoiding being too prescriptive. To delete the provisions of Clause 55(6)(c) would, in my view, upset that balance. While I appreciate the concerns expressed by the noble Lord, Lord Carmichael, I am unable to accept the amendment.

Lord Grimond

Before the noble Lord who moved the amendment decides what to do, I hope that the Government will give an undertaking to look at the matter again at continuing stages. It appears to be quite apparent that if a property is withdrawn from the open market—which is the effect of the Bill—it will restrict the possible purchasers. It will be another case of moving into some form of monopoly which appears to be much favoured by the Government. It must have an effect on the local authorities and on the housing market. I do not see how the district valuer can overcome that. Surely his business is to value property on the basis of its value on the market. I do not see how he can make allowances for other matters and how he will reach a reasonable valuation. Therefore I hope that the Government will look at the matter again.

Baroness Carnegy of Lour

I do not know whether I have understood the issue, but I should like to point out that when a valuation is put on a property the potential area of available purchasers is taken into account. Surely it is essential that the district valuer should take note of the fact that this is a restricted market. That is stated in the Bill. Is this not a perfectly reasonable clause? I do not fully understand what the noble Lord, Lord Grimond, is worried about. One cannot consider the market to be fully open when it is not.

Lord Grimond

Perhaps the noble Baroness will allow me to say that if that is the case, and it may well be so, I am not clear that this subsection is necessary. If in any event the district valuer will take into account the fact that a possible purchase will be restrictive, I do not see why the clause is needed in the Bill.

The Earl of Dundee

I appreciate the concern expressed by the noble Lord, Lord Grimond, as regards monopolies. It must be admitted that there will be monopolies in respect of Scottish Homes, but I do not believe that it is one which will give us cause for concern. As I said earlier, district valuers are highly expert in their job and can easily envisage a bidding situation. I believe that, if we were to go along the lines suggested by the noble Lord, Lord Carmichael, in his amendment, we should be applying double standards. On the one hand we shall be limiting the category of receiving landlords while on the other hand saying that, as regards valuations, we must take into account everyone else whom we have not especially cordoned off.

Lord Mackie of Benshie

Is it not a fact that the Bill provides that: the district valuer shall have regard to the price which, on the relevant date, it would realise if sold on the open market by a willing seller on the following assumptions"? The Bill then totally denies the existence of a free market by providing: that the only prospective purchasers were Scottish Homes or the persons who, on that date were approved … Surely it is a complete denial of the principle of valuation by independent people if you deny them the right to value on the open market and say that the consideration must be lined up with the fact that it is a monopoly buyer.

The Earl of Dundee

I think the valuation criteria set forth in subsection (6) give rise to more complicated problems than the Government have yet acknowledged. For instance, we have this problem of what happens if the sum realised is less than the loan outstanding. We are told that this will have to be made good by housing support grant, but do we really want a kind of open, limitless tap in this direction?

Secondly, if, as appears likely and particularly in unfashionable areas, some very low valuations emerge, will this not encourage speculative builders, some of whom may succeed in getting themselves designated as approved persons, by one wangle or another?

Lord Carmichael of Kelvingrove

I think that the Minister has heard from the Committee and particularly from the contribution by the noble Lord, Lord Hylton, just what the feelings are on this subject and the worries that are involved. It seems to me to be simple and straightforward, in that, if the valuation does not cover the money already spent and the outstanding debt on the house, that is something very serious. The idea of a local authority using some sort of roundabout way to get money, I would say, first, would have something wrong with it somewhere: perhaps as regards the district valuer's valuation. However, we shall go further into this subject in the next amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 63: Page 34, line 1, leave out paragraph (d).

The noble Lord said: This amendment shows some of the difficulties and weaknesses of this part of the Bill. I am suggesting that, on page 34, lines 1 to 3 should be omitted. The subparagraph (d) concerned states that the assumption of the district valuer is to be that the applicant will, within a reasonable period carry out such works as are reasonably necessary to put the house into the state of repair required by the landlord's repairing obligations". I consider that the existence of this assumption within the statutory formula for evaluating the market value is unnecessary. That is because the market value should already have taken into account the state of repair of the house. If you go to buy a house and realise that a damp course will be needed, unless you work on the assumption that the present owner will put in a damp course for you, you will not pay for the house as if there was a damp course there. So this is unrealistic, first, because it is difficult to see how the district valuer is to be satisfied that work is needed to put the house into a reasonable state of repair required by the landlord's repairing obligations. This could give rise to considerable dispute between an applicant and a local authority landlord.

Secondly, it is not clear that applicants shall within "a reasonable period" carry out any works to any house which they are able to acquire under the terms of this part of the Bill. Thirdly, it could be argued that a strict interpretation of this part of the Bill, when applied to certain problem properties in areas of low amenity, could result in a negative value and perhaps a payment by local authorities to the approved landlord where the market value was particularly low and a considerable amount of repair work was necessary to fulfil the landlord's repairing obligations.

As written, this subsection would mean that tenants who remain with the council would pay for the cost of transfer. In the first place, the remaining tenants would continue to service the outstanding debt on the transferred property. They could also be liable to pay part of the renovation costs on the transferred property, already assumed in the transfer value. The intention of this clause is perfectly good but I believe that the implications of it leave much to be desired. I believe that Amendment No. 63 is one which is well worth accepting in order to try to make the clause more reasonable. I beg to move.

6.45 p.m.

The Earl of Dundee

I have listened carefully to what the noble Lord, Lord Carmichael, has said in support of his amendment, which seeks to remove from the factors to be taken into account by the district valuer when determining the value of a property the assumption that a prospective landlord will put in hand, within a reasonable period, works necessary to bring the property in question up to standard.

I believe we should seek in the Bill to provide guidance to district valuers in their task of assessing the value to be attached to a property, without being too prescriptive. In my view, the provisions of Clause 55(6)(d) are necessary to make it clear that, while the price on transfer reflects the current state of the house to be acquired, the new landlord will be expected to effect the necessary improvement works in early course. This expectation has been carried forward into the factors which the district valuer is to take into account when determining the value of the property. If the property has been well maintained, the cost of necessary improvement works should be minimal and will have little impact on the valuation of the property. Nonetheless, I believe it is only fair to all parties involved in the transfer that the valuation assumptions should put no obstacle in the way of prospective landlords carrying out early repair works to the property, once acquired.

On the point raised by the noble Lord, Lord Carmichael, about relative values, I can assure him that it is possible that properties will be valued by the district valuer at negative figures. Certainly we need to take that into account; but as regards the thrust of his amendment I hope he may possibly allow himself to be persuaded by the case I have put forward and feel himself able to withdraw the amendment.

Lord Mackie of Benshie

Looking at this, I find that it could be interpreted in two ways. Is the Minister saying that, if the valuer is to take into account that the applicant would carry out the necessary repairs, that would put the price up? Or would it put it down? This could be interpreted both ways. The district valuer is to have regard to the price which the property will realise when sold on the open market on the assumption that the landlord carries out the repairs: that would put the price up. Is that what it means—that the district valuer will put the price up because repairs have been carried out?

Lord Swinfen

Before my noble friend answers, may I say that any valuer worth his salt—and I speak as one who has been a valuer—will take the condition of the property into account when deciding its value. When the Minister last spoke he gave me the impression that he was trying to insist on the purchasing landlord putting the property into a reasonable state of repair. If that is his intention, it is expressed in a rather ungainly manner in the Bill. I suggest that it should be put in, as a separate clause; that it he part of the purchaser's obligations. I suggest that should be spelt out very much more clearly.

The Earl of Dundee

I am grateful to my noble friend and I will certainly consider the point he has raised and whether we can do as he suggests. However, we believe that the assumption will be fulfilled and that repairs which need to be carried out will be carried out. Applicants will be reputable approved bodies which will be unlikely to dishonour the terms of any deal struck on repairs in the course of consulting tenants. Scottish Homes will monitor landlords' standard of performance for maintenance and repairs. In a sense, I take the point of the noble Lord, Lord Mackie of Benshie, but the need to put right deterioration and repairs is as it is. It is something which is either attended to or not attended to. If it is attended to in the right way it must involve costs and hence the influence for the district valuer.

Lord Carmichael of Kelvingrove

I did not read as carefully as I should have liked this section of the Bill when it was discussed in another place. However, the Minister must realise that in a very rational Chamber there has been grave scepticism from almost every quarter. The noble Earl, Lord Dundee, spoke about good faith and responsible people doing repairs, and that sort of thing. Someone still has to judge whether repairs are adequate or correct. If he thinks for one moment, he will realise that there have been many disputes among reasonable people as to whether the repairs were properly done or skimped.

I believe that the Minister, in his own interests, should take this section, which has been looked at in a rather cool manner by the Committee, and have another look. However, in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman (Lord Hayter)

I call Amendment No. 64 which is similar to Amendment No. 65.

Lord Morton of Shuna moved Amendment No. 64:

Page 34, line 3, at end insert— ("( ) Where a landlord disputes the market value determined by the District Valuer, the landlord may at any time within two months after service of the application refer the matter to the Lands Tribunal for determination. Where such a reference has been made, the landlord need not serve on the applicant an "offer to sell" within two months after service of the application. In proceeding under this subsection the Lands Tribunal may as it thinks fit vary the market value. Whether or not the market value is so varied the landlord shall within two months after the determination by the Tribunal serve on the applicant an "offer to sell" notice in terms of subsection (5) by stating the market value as determined by the Lands Tribunal.").

The noble Lord said: Perhaps I may move Amendment No. 64, which is grouped with Amendment No. 65, in the name of the noble Lord, Lord Taylor of Gryfe. Amendment No. 64 is in the name of my noble friend Lord Carmichael and myself. As the Deputy Chairman said, it appears that they are more or less aiming at the same thing.

The purpose is to give the landlord a right to go to the Lands Tribunal if he disagrees with the district valuer's valuation. The Bill imposes statutory restrictions on what is meant by market value of houses transferred under this part. The Bill proposes to require forced sales of individual houses initiated by approved persons or Scottish Homes to be effected at the price determined by the district valuer, who is an employee of the Inland Revenue, with no right of appeal by public sector landlords to an independent tribunal or arbiter. That has a patent unreasonableness and is contrary to natural justice.

In theory, it allows the district valuer to set unrealistic values which will deprive public sector landlords of resources which could have been applied to the improvement and repair of retained public sector stock. I also suggest that it does not allow any mistake to be put right. Disputes about the level of compensation payable to the owner of land or property being acquired compulsorily by Scottish Homes is dealt with under Clause 2(5) except for the case of public sector houses. That is dealt with in the usual way by arbitration and then the Lands Tribunal. Why should public sector landlords be denied the same right of appeal which is applied to other landowners who are having their property acquired compulsorily?

As the Minister will be well aware, at present the law about the transfer of public sector stock between different aspects of the public sector or different public sectors is governed by the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947, which allows, if necessary, an independent assessment to be made by the Lands Tribunal. The application of this legislation to transfer of individual houses is effectively blocked and nobody has any right of appeal. Even the determination of a market value provided by Section 62(2) of the Housing (Scotland) Act 1987, which provides for the landlord and tenant to have an independent valuer approved by both to set the figure, is not allowed.

That is not a theoretical aspect. There was a case recently in Castlemilk where a large body of houses was being transferred to the Scottish Special Housing Association from Glasgow District Council. The district valuer fixed market values determining the price, ignoring the fact that a large number of the houses had vacant possession and taking it on the basis that they had secure sitting statutory tenants. Of course that made a considerable difference to the value. It appears to us on this side of the Committee that there is a strong case for a normal appeal to the Lands Tribunal if the Government are to get out of any possibility of being accused of merely acting against local authority landlords out of a desire to treat them differently. If they want to treat them the same as everybody else, they should give the same right of appeal to the Lands Tribunal. I beg to move.

Lord Sanderson of Bowden

I cannot recommend acceptance of Amendments Nos. 64 and 65, which seek to give the Lands Tribunal, presumably the Lands Tribunal for Scotland, an appeal function if a public sector landlord disputes the valuation reached, in accordance with the provisions in the Bill, by the district valuer.

I am aware of exchanges between the Scottish Development Department and Glasgow District Council, which takes the view that the district valuer is not sufficiently independent to carry out this task. I emphatically do not subscribe to Glasgow's view. The district valuer acts in the public interest in the widest sense. I do not mean that he acts to further the policy of the government of the day. Rather, he acts in the interest of the public as a whole who pay for and use the services of central and local government authorities and bodies enjoying statutory rights. The district valuer ensures on behalf of the public generally that the particular interest of one body does not prevail over another in matters of valuation. Not only do I firmly recognise the independence of the district valuer; I also am conscious of the depth of experience amassed by the Valuation Office. In my opinion the involvement, as proposed, of the district valuer will lead to a high degree of consistency in valuations; and it will make an appeal mechanism unnecessary.

Under this part of the Bill the Lands Tribunal for Scotland will be given an appeal role in a number of matters relating to the process of transferring property. These duties are modelled largely on the role discharged by the tribunal in right-to-buy cases. That legislation makes no provision for an authority to refer to the tribunal disputes over valuations of property in right to buy applications. I can see no reason why the tenants' choice provisions should impose a duty on the Lands Tribunal which does not exist in the otherwise broadly similar framework for processing right to buy applications.

This amendment could in practice be a wrecking amendment, because of the delays which could be introduced if an appeals mechanism was to be introduced. I agree that in compulsory purchase cases disputes over valuations of property can be determined by the Lands Tribunal for Scotland. But in compulsory purchase cases it is possible to do this because title to the land can be taken and the acquiring authority can get on with the works while leaving the compensation, or the exact amount of the compensation, to be settled at a later date. Sometimes in fact the final amounts may be settled years later.

However, under tenants' choice, where a new lease is involved and where, for example, the level of rent payable by the tenant to the new landlord will be critically dependent on the acquisition price, the final price must be determined before the lease can be agreed and the transaction completed. To allow appeals to the Lands Tribunal could significantly stem the timescale for tenants' choice and in practice mean that very few potential landlords or tenants would be willing to exercise their new rights.

I believe therefore that it is essential for a final price be determined quickly and impartially. I stress again the complete independence of the district valuer and the high regard in which the valuation office is held generally. To add the possibility of appeal against the district valuer's determinations would be unnecessarily and damagingly time-consuming and bureaucratic. I therefore urge the noble Lord to withdraw the amendment.

Lord Mackie of Benshie

Is the Minister saying that district valuers are infinitely more competent than Her Majesty's judges, who are subject to appeal?

7 p.m.

Lord Sanderson of Bowden

Where we are dealing with valuations, the prices of property and the speed with which one is able to carry through the operation—that is an important part of the whole—I happen to think that we are dealing with experts in the field in which they operate.

The Earl of Selkirk

The applicant is surely free to accept the price or not. He does not have to accept what the district valuer says; if he does not like it, he says no; is that not correct?

Lord Sanderson of Bowden

I think that the noble Earl is right on that particular point, but we are dealing with a slightly different point. The amendment, I understand, concerns valuations of transfers from local authorities.

Lord Morton of Shuna

That is a marvellous way of not answering the question. Let us consider the case where Scottish Homes, or some other potential landlord, makes a requirement on a local authority to sell transferred houses to, say, Scottish Homes. As I understand it, no answer has been given to the noble Earl's question. If a district valuer fixes a price that Scottish Homes—to take that as an example—does not like, can it refuse to accept the valuation?

Lord Sanderson of Bowden

As I understand the point of the noble Earl, he asked whether the tenant has a right to refuse the district valuer's valuation. The answer is that the tenant always has a right to accept or to reject.

Lord Morton of Shuna

If the Minister will not recognise the question put by the noble Earl, I shall put the question myself. If the district valuer sets a price that Scottish Homes as the potential purchaser considers excessive, has Scottish Homes the right to say that it does not want the property?

Lord Sanderson of Bowden


Lord Morton of Shuna

Then why is it that a local authority has no right to reject the price that the district valuer has set and, even in the case where the district valuer has made a mistake, is not permitted to appeal to the Lands Tribunal! However much expertise the district valuer may have, I think that the Lands Tribunal would regard itself as having as much expertise. The Lands Tribunal for Scotland has a higher standing in questions of setting values in such situations. I do not understand why, in the case of purchases from local authorities, the Government insist that the purchasers can say that they do not like a price, but a local authority is unable to do so, and has no right of appeal against the price, even in the case of the most blatant mistake.

I think that this matter must be looked at again. The Government appear to have it wrong, and I hope that they will reconsider it.

Lord Sanderson of Bowden

I draw to the attention of the noble Lord, Lord Morton of Shuna, the exchanges that took place in the House over the right-to-buy legislation in Scotland. Noble Lords clearly approved of the right-to-buy legislation, which does not allow appeal to the Lands Tribunal in Scotland in matters of valuation.

The noble Lord, Lord Morton of Shuna, asks why a purchaser can reject a price. An approved landlord will base his decision not on the accuracy of valuation but on his ability to pay. I come back to the most important point. We have a precedent in the legislation that we passed in 1980; that is, the right-to-buy legislation for Scotland. I do not see why there should be a different set of rules and regulations in this Bill when in the right-to-buy legislation there is the clear provision not to allow appeal to the Lands Tribunal in regard to valuation.

Lord Morton of Shuna

The difficulty is surely that most tenants buy only one house, especially tenants exercising a right to buy. There is not much difficulty in valuing one house. People know roughly the value of a corporation house. If the purchase is of 1,077 houses in Castlemilk, there may be a high level of dispute about the value of the block of houses with, say, half or 40 per cent. of them empty. It is with that type of issue that we are concerned. As I said, we are not discussing a tenant buying one house.

Rather than continue the argument, I shall read with care what the Minister has said, although he has not convinced me. I hope that similarly he will read what I have said and consider whether there may not be some merit in it. In the hope that he will do so, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Taylor of Gryfe moved Amendment No. 65:

Page 34, line 3, at end insert— ("( ) Where a landlord disputes the market value determined by the District Valuer, the landlord may at any time within two months after service of the application refer the matter to the Lands Tribunal for determination. Where such a reference has been made, the landlord need not serve on the applicant an "offer to sell" within two months after service of the application. In proceeding under this subsection the Lands Tribunal may as it thinks fit vary the District Valuer's determination of the market value. Whether or not the market value is so varied the landlord shall within two months after the determination of the Tribunal serve on the applicant an "offer to sell" notice in terms of subsection (5) by stating the market value as determined by the Lands Tribunal.").

The noble Lord said: This amendment is almost precisely the same as that which we have just considered. I do not propose to go over the ground so ably covered by the noble Lord, Lord Morton of Shuna. I was rather persuaded that he has an argument.

In Scotland we accept the valuation of the district valuer more or less all the time, just as we accept his professionalism and his independence. However, we are legislating perhaps for the exceptional case, and the right to appeal to the Lands Tribunal should surely be respected. This will not arise every day. It need not delay the general thrust of the Bill. As the noble Lord, Lord Morton of Shuna, has withdrawn his amendment, perhaps I should follow the same course. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 55 shall stand part of the Bill?

Lord Hylton

I wish to make two brief points. Clause 55(6)(d) deals with the applicant putting a house into the state of repair required. Does "repair" include improvement? If so, it would make a difference. I am encouraged to ask the question because the noble Earl, Lord Dundee, used the word "improve" in his reply. I realise that that may have been a slip of the tongue, but equally it may have been in his brief.

Secondly, the clause specifies the criteria that the district valuer will have to take into account. I wish to go beyond that and ask whether conditions concerning repairs and improvements will be included in the contract and conveyance of property to be sold. That would be a means of achieving greater certainty in what is a complex matter.

The Earl of Dundee

I am grateful to the noble Lord, Lord Hylton. I shall certainly look into the matter which he has drawn to my attention. I cannot answer him now. I shall either write to him or bring back something later on.

The Earl of Selkirk

Perhaps I may bring to the attention of my noble friend subsection (8)(b), which states: the applicant to receive a good and marketable title to the house". I drew the attention of my noble friend to the importance of that provision under Clause 3 when it was being discussed. I hope he will bear that in mind because if a house is not marketable Scottish Homes is going to get into a great deal of trouble.

Lord Sanderson of Bowden

I gave an answer to my noble friend Lord Selkirk yesterday on the question of title and I said that we were looking very closely into the fact that a real title must be transferable. I said that we shall come back at the next stage of the Bill with the answer to that point.

Clause 55 agreed to.

Clauses 56 to 59 agreed to.

Clause 60 [Consent for subsequent disposals]:

Lord Carmichael of Kelvingrove moved Amendment No. 66: Page 36, line 22, after ("Act") insert ("including any person who acquires any property under this section").

The noble Lord said: This is another safeguarding amendment. Having looked at it, I believe the intention being put forward by one of the responsible bodies advising us is to make sure that a person other than Scottish Homes who acquires any part of a property shall not dispose of it under this provision. If any other person acquires under this clause any property that is passed on from Scottish Homes—that is the second person who acquires it—he shall also require the consent in writing of Scottish Homes. In other words, the first person shall obviously require the consent of Scottish Homes and it should always be aware of where the property has gone and who is the second or perhaps third or fourth landlord. I beg to move.

Lord Sanderson of Bowden

I have heard quite clearly what the noble Lord, Lord Carmichael, has said. Clause 54 of the Bill provides that the right to acquire property under the tenants' choice provisions can only be exercised by Scottish Homes, or by a person approved by Scottish Homes. We believe this approval mechanism is necessary to safeguard the interests of the tenant who may contemplate changing his landlord. Clause 60 provides that property which has been transferred under the provisions of Part III—that is, where the tenant has exercised tenants' choice and transferred to a new approved landlord—can only be disposed of by the new landlord if that new landlord obtains Scottish Homes's approval.

We believe that this mechanism for approving first subsequent disposals is necessary to prevent any possible collusion, however unlikely, between an approved landlord and another which Scottish Homes has not approved as a receiving landlord. I accept that any such circumvention of the mechanism under which landlords are approved is unlikely, as Scottish Homes would, almost by definition, be unlikely to approve a landlord which would act in this way. But in including the Clause 60 approval to disposal arrangements, we have sought to make absolutely certain that the tenant's position is protected.

However, we do not believe that it is reasonable to require Scottish Homes to be associated with the future ownership of the property for all time, as would be the case if the amendment we are considering were to be accepted. Let me repeat that the tenant concerned has chosen to transfer his tenancy from the public sector, and that no tenant will be forced to move against his wishes. The transferring tenant has elected to join the private sector, and I do not believe that, having done so, and having gained the advantages which attracted him to transfer in the first place, he can or should, after the first subsequent disposal, be in any different position from any other private sector assured tenant.

I do not believe it is right that Scottish Homes should be involved with all transferred property for ever and a day. I doubt whether the Committee would relish the idea of a never-ending bureaucratic control of this kind. I am certain that once Scottish Homes is set up it would not wish to be involved in that way for ever. Therefore I cannot recommend that this amendment be accepted.

7.15 p.m.

The Earl of Selkirk

Perhaps I may ask my noble friend what limitation there is. We know what has already happened in that people are bribed to come out of a house. When the tenant is out of the house and it is free, it may be that the house has a much higher price than it would have with the tenant still in it. We know that is going on already. It is very difficult to stop and I do not know what precautions the Government are taking in this particular case.

Lord Sanderson of Bowden

I hoped that I had explained that Scottish Homes in the first instance has to approve the landlord. At the first sale thereafter Scottish Homes is involved. After that the tenant is definitely in the private sector and like anyone else has to stand in the private sector. I hope that I made myself clear in my explanation. What I am trying to say is that the system we wish to bring in under this clause means that there is control and a means whereby Scottish Homes has control of the approved landlords for a sufficient time.

The Earl of Selkirk

If I understand my noble friend correctly, the situation is that if he misbehaves himself he will be scratched off the list.

Lord Carmichael of Kelvingrove

That is most interesting and I am grateful to the noble Earl for bringing out that matter. I do not know whether it says in the Bill that a landlord will be scratched off. We have been trying to have that measure included in the Bill, as the Minister knows. There is the great worry of vacant possession. We endeavoured to get a bad landlord's register at some point. I accept that there are difficulties and no one wants Scottish Homes to be a nanny all the time. However, it is a little stronger than the average tenant who is caught up with a landlord.

I know that most of them will be large, responsible landlords, but the bottom end of the market will slip into the hands of the less scrupulous landlords whether the Minister likes it or not. We seem to have a housing Bill every year so perhaps the matter can be reviewed then. In 10 years' time there will be a number of houses which have slipped into the bottom of the market. The landlords may not all be as angelic as the Minister seems to suggest. I hope that he will keep his eye on this problem, because we certainly shall. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 67:

Page 36, line 23, at end insert— ("( ) The consent of Scottish Homes under subsection (1) above shall only be granted where the disposal is to an approved person, under the terms of section 54 of this Act.").

The noble Lord said: In many ways this amendment is tied up with Amendment No. 66 and I hope that the Minister will see the connection. Perhaps his explanation will go a little further than the explanation we were able to get from him as regards Amendment No. 66. Again, I can see the difficulty and I do not want Scottish Homes always to be responsible for every piece of property it has bought. I believe that it has a responsibility to approve the kind of people who are going to be factors in the property. I beg to move.

The Earl of Dundee

Clause 60 is designed to prevent possible abuses of the right to acquire by ensuring that it is not possible to circumvent the provision that all transfers under tenants' choice should be to landlords approved by Scottish Homes or to Scottish Homes itself. By requiring Scottish Homes to approve the first disposal by a receiving landlord of property transferred under the tenants' choice provisions, possible collusion, however unlikely, between an approved landlord and a second landlord who might not have attracted the approval of Scottish Homes will be prevented. The clause, therefore, will operate to the benefit of the transferring tenant.

Amendment No. 67 would, however, compel Scottish Homes only to approve first disposals of property transferred under Part III of the Bill to other "approved" landlords. This is an unnecessary restriction. I do not believe that the house should necessarily have to remain in the private rented sector. For a number of good reasons the house may become vacant following acquisition—for example, if the tenant dies or voluntarily ends his tenancy. We should not rule out the possibility of the landlord selling the house for owner occupation provided Scottish Homes's approval is obtained.

I should like to assure the Committee that Scottish Homes will look very carefully indeed at the local renting market before deciding whether to approve a sale of property which transferred under the tenants' choice arrangement. There is no question of landlords enticing tenants to transfer their houses to them, then selling the property with vacant possession for substantial capital gains.

First, Scottish Homes will approve under Clause 54 only reputable landlords as receiving landlords. It is very unlikely indeed that any landlords out to make a fast profit will receive approval. Secondly, tenants transferring under tenants' choice will have the protection of their tenancy arrangements, and the anti-harassment laws will apply equally to them as to other private sector tenants. Landlords, therefore, will secure vacant possession only in circumstances where the tenancy comes to an end for good reason. Thirdly, as I have indicated, Scottish Homes will take into account all relevant information and the local circumstances before approving the disposal of property, whether tenanted, or available for rent or for sale. If the disposal is to a new landlord, the identity and standing of the new landlord will be relevant and important considerations.

This amendment is therefore unnecessary in the sense that the fears which may have prompted it are unfounded, and it is undesirable in that it would unreasonably fetter Scottish Homes's discretion in the process of approving disposals of property which transferred under Part III. I hope that the noble Lord will see fit to withdraw the amendment.

Lord Carmichael of Kelvingrove

The Minister has been a little more reassuring. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 68 and 69 not moved.]

Lord Taylor of Gryfe moved Amendment No. 70:

Page 36, line 27, at end insert— ("(3) Before giving consent under this section, Scottish Homes shall take such steps as it considers appropriate to secure that the tenants occupying the properties which are the subject of the proposed disposal are made aware of the proposal to dispose of the properties, and are made aware of the proposal to dispose of the properties, and are made aware that they have an opportunity to make within such time as may be specified, representations to Scottish Homes with respect to these proposals; and Scottish Homes shall consider any representations made within the time specified.").

The noble Lord said: I have already commented on the fact that the Minister reads his briefs so rapidly. The noble Earl, Lord Dundee, seems to be similarly affected. I did not quite gather the references to the protection of tenants in the speech he has just made. Perhaps he will reiterate what the protection is, as the amendment provides that tenants should be informed and consulted about disposal plans and have their views taken into account by Scottish Homes in the granting or withholding of consent.

The wording of the proposed subsection is derived from Clause 59(3) of the Housing Bill regarding disposals by housing action trusts, but it is equally appropriate in the Scottish context. Without this subsection the tenants' wishes can be entirely ignored. Perhaps the Minister can give us an assurance that that is not so. They need not even be aware of the planned disposal. That position is at variance with the Government's stated objective of encouraging greater individual control over the conditions in which people live. I look forward to receiving an assurance from the Minister. I beg to move.

Lord Sanderson of Bowden

As usual I listened carefully to what the noble Lord said in connection with the amendment. I shall try to speak slowly so that he hears the assurance that I am about to give him. The amendment seeks to place a requirement on Scottish Homes to take appropriate steps to ensure that tenants are advised of any proposal to dispose of the property they occupy and to have regard to tenants' views on the proposed disposal. I can assure the Committee that, before deciding whether to approve the disposal of property acquired under the tenants' choice provisions, Scottish Homes will be expected to take all relevant factors into account. The views of tenants on the proposal will be one such factor and an important one.

I do not believe, however, that there should be a statutory obligation on Scottish Homes to inform tenants, or to ensure that they are informed, or to carry out consultations in any particular way. Scottish Homes, which will be a highly responsible body, should be left to exercise its discretion on how it informs itself on the suitability and acceptability of a landlord's application to transfer the property he has acquired under the provisions of this part of the Bill.

On the noble Lord's point about the protection of tenants, I would point out that there are anti-harassment provisions—for example, in Clauses 33 and 34—and Clause 35 creates a new offence of harassment. At this stage I shall give what I think the noble Lord is asking for. I give an assurance that the administrative rules to which the Secretary of State will oblige Scottish Homes to adhere in the exercise of its functions will require Scottish Homes to satisfy itself that it is fully aware of the views of tenants occupying the property before it reaches a decision on any application to dispose of a property which an approved landlord has acquired under the tenants' choice provisions of the Bill. With that assurance, I hope that the noble Lord will seek to withdraw his amendment.

Lord Carmichael of Kelvingrove

The Minister continually comes back to the claim that Scottish Homes will be a highly responsible body. We hope and assume that it will be, and we know that the Government will take great care in that regard. There will also be a great necessity for Scottish Homes to keep its tenants informed. That is not always the case with quangos, which sometimes find it difficult to speak the same language as the people with whom they are dealing. A great deal of effort will have to be put into this. At the same time there will be an unprecedented growth in local activity. Local organisations and associations, citizens' advice bureaux, law centres and political surgeries of all parties will be trying to help tenants before they make up their minds whether to transfer to Scottish Homes and warning them if Scottish Homes intends to pass them on. We hope that the provisions will work out in the first few years; but 10 years from now the position may be very difficult.

I am glad the Minister made the reply that he did. I think he hopes for too much in believing that the responsible position and civic attitude of Scottish Homes can be taken for granted. However, I am happy with the answer he has given. I do not know whether the noble Lord, Lord Taylor of Gryfe, has anything to add.

Lord Grimond

Before the Committee passes on from this amendment, I should like to emphasise that this is a matter of great importance for many people. Will we have an opportunity to see the rules or the reference which he gives Scottish Homes on this matter? The methods of consultation are important. It may have to go on for some time because these matters may take some time to finalise. We are all grateful for the undertaking that the Minister gave, but perhaps he can be a little more explicit. Where will we see the rules and what will they contain?

Lord Sanderson of Bowden

It is difficult to give an assurance that administrative rules which will be drawn up by a body which is not yet in being can be brought before the House. I understand the feelings about the matter. The noble Lord, Lord Carmichael, understands as well as I do that Scottish Homes is responsible to the Secretary of State. I have given an assurance in the name of the Secretary of State that the administrative rules, which he will have to approve, will be brought forward. The Secretary of State will have to satisfy himself that the views of tenants occupying properties are taken fully into account. At this stage I do not think that I can go any further than that in answer to the noble Lord.

Lord Taylor of Gryfe

I thank the Minister for the assurance he has given. I should naturally have preferred to see that important obligation in the statute but, nevertheless, the Minister has given his assurance in the name of the Secretary of State for Scotland, and I accept it in that way. I should not expect to see all the administrative rules laid down and approved by the House, because we might then have another long debate on the subject.

I want the organisation to succeed. It will succeed through its fairness and the credibility that it will build up. One of the essential elements will be the taking into account of tenants' wishes and the effect of the policies on tenants. In view of the generous assurance that has been given, I beg leave to withdraw the amendent.

Amendment, by leave, withdrawn.

Clauses 60 and 61 agreed to.

The Earl of Dundee

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.