HL Deb 28 April 1988 vol 496 cc297-327

3.15 p.m.

The Minister of State, Scottish Office (Lord Sanderson of Bowden)

My Lords, I beg to move that the House do 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 62 ["Cost floor" limit on discount on price of house purchased by secure tenant]:

Lord Carmichael of Kelvingrove moved Amendment No. 71: Page 37, line 22, leave Out ("5") and insert ("8").

The noble Lord said: This amendment seeks to bring a Scottish Bill, which proposes a five-year cost floor limit, into line with the Housing Bill for England and Wales which provides for a rolling period of eight years' cost floor limit. This is for houses eligible for purchase under the right-to-buy legislation.

The "cost floor" means the price below which the discounted sale price cannot fall. The amount is based on the cost of provision incurred in a five-year period prior to the sale. If the Government wish to opt for a rolling cost floor rule, the timescale is crucial. Clause 62 was a new clause introduced by a government amendment tabled at the Report stage in another place. The present law provides that the discount shall be restricted so that the price is the lesser of the market value and any outstanding debt incurred after 31st December 1978. The proposed clause gives a rolling date for the cost floor—the beginning of the financial year five years before the right-to-buy application is made.

The proposed clause introduces the English concept of historic cost—expenditure in recent years rather than outstanding debt incurred in recent years. This makes it even more important that the Scottish Bill should change from the five years' basis to the eight years' basis as in the English Bill. It is even more important that the eight years should apply in Scotland given that houses in Scotland do not increase in value at the same rate as they do in many parts of England. In some areas of Scotland house prices are falling. I am thinking of some of the large developments associated with the oil industry. This five-year rule will cause capital losses for authorities and affect modernisation for some of their tenants.

Angus District Council completed a housing development of 103 houses in Montrose in 1987. The cost of providing the houses was £2.9 million. The current market value is of the order of £2 million. In 1991–92 the value that will be placed on the development is likely to fall significantly, house prices in that area having suffered considerably as a result of the setback in the oil industry. The figure may fall as low as £1.45 million compared with the original cost of £2.9 million. Thereafter, the houses will be available for sale at a discounted market value. The outstanding debt on the development at 1st April 1991 could be £2.6 million. I hope the Minister will accept that that is a fair point.

When it was suggested in another place during discussion of the English Bill that the period should be 10 years rather than five years, Mr. Waldegrave agreed that five years would be too little. He thought that 10 years would be too much and that eight years would be just right. I agree and that is why I have tabled the amendment. I beg to move.

Lord Sanderson of Bowden

Let me assure the noble Lord, Lord Carmichael of Kelvingrove, that there is nothing sinister about the use in Scotland of a five-year rolling cost floor and in England an eight-year period. In the Housing (Scotland) Act 1987, Clause 62, the cut-off date for the present Scottish outstanding debt test is 31st December 1978. In the Housing Act 1985, however, Section 131 sets the relevant date for the cost floor in England at 31st March 1974. There is therefore already a difference of four years and nine months. Our proposals narrow this differential to three years.

The Government took the view, as set out in the respective White Papers for England and Scotland, that the discount restrictions which are imposed by the outstanding debt test in Scotland and the cost floor arrangements in England were a serious disincentive to many tenants planning to exercise the right to buy. The White Papers therefore suggested that these restrictions be abolished.

However, in the light of very careful and sympathetic consideration of the representations we received, we decided that something less than complete abolition of these restrictions was in order. We decided therefore to reduce the period over which they would apply, and in Scotland to simplify the arrangements to replace the outstanding debt assessment (which some authorities had had difficulty in applying) with a cost floor calculation, which should be much easier to operate. However, as I have said, the provisions in England and in Scotland are at present different; and we see no reason why they should necessarily conform after the change is made.

The Committee will note too that it is possible under Clause 62(2), which introduces a new subsection (6A) to Section 2 of the 1987 Act, for the Secretary of State by order to amend the relevant period from five years to some other figure.

The effect of this provision on housing associations has been queried. The noble Lord did not refer to that but I should like to clarify this point. It has been suggested that housing associations are very upset about the provisions that we propose to bring forward in Clause 62. Let me attempt to put the record straight. The bulk of housing association development work carried out since 1978 has been funded by a combination of the loan from the housing corporation and the housing association grant from the Government.

On average, the housing association grant covers just over 90 per cent. of the total cost of providing houses, leaving the housing associations with a loan of less than 10 per cent. of the capital cost. Therefore, the first call on the money brought in by selling a house would be the repayment of the loan held by the housing association. As this is for an extremely low percentage of the total cost it is extremely unlikely that a house will be sold for less than the amount of the loan. The consequence of a sale below the cost of providing a house would simply be that the Government would recover less housing association grant than they had given to the association.

Finally, it is useful to bear in mind that one consequence of the introduction of assured tenancies for all new lettings is that new tenants of housing associations will not have the right to buy. I wanted to cover that point as I know that many people are concerned about it.

I turn now to the point made by the noble Lord, Lord Carmichael, about Angus district. I am aware, as no doubt the noble Lord is also aware, that there have been representations to my right honourable friend the Secretary of State about the situation in Angus district. I understand that that district contacted the Scottish Office some weeks ago seeking guidance on whether the Secretary of State will be prepared to make an order under Section 62(7) of the 1987 Act requiring the selling price of new houses in a particular new development in Montrose to be no less than the debt outstanding on those houses. This is because the market value of those houses as confirmed by a number of valuers is now much less than the cost of constructing the houses because of the effect of the rundown of oil-related development in the area, as the noble Lord, Lord Carmichael, said.

However, the department informed Angus district that the Secretary of State would be unlikely to make an order. That is because it would not be equitable to expect any tenant exercising the right to buy to pay more than the current market value of the house. Nobody should be asked to pay an amount greater than the true value of a house.

The new rules introduced by Clause 62 of the Bill will not immediately affect the position here. The tenant will continue under the cost floor rule to have to pay full market value without discount at the present time. It may be that after the five-year period over which the new cost floor will apply the council will require, if the tenants exercise the right to buy, to sell these houses for less than the historic cost of providing them. That is because, even with inflation in the interim, the market value will not have risen much beyond the historic cost and the discount will of course reduce the sale price.

However, let me emphasise that sales of this kind will be the exception. In all authorities I expect that substantially more houses, as is being proved, will be sold under the right to buy at prices well above the debt outstanding than are sold below that figure. I have looked very carefully at this situation. I believe the new rules introduced by Clause 62 are entirely reasonable. They reflect points put to us by local authorities and others. We do not see any need for the period in which the cost floor operates to be the same in Scotland as in England. But if experience shows that a change is needed in the Scottish rules or in the English rules for that matter there are powers to make the necessary amendments by order.

As I said earlier, in all authorities we expect the majority of right-to-buy sales to continue to be at prices well above outstanding debt levels. Therefore, I hope that in the light of what I have said the noble Lord will consider withdrawing his amendment.

The Earl of Selkirk: I should not dare to criticise the Government but I simply do not understand the situation which has been envisaged by this provision. I hope that the Minister is right in saying that the housing associations will not suffer. They are deeply concerned that they may and will suffer. I can do no more than accept what the Minister has said as regards housing associations not suffering under this provision. I take it that if they do suffer or show a likelihood of suffering the Secretary of State may use his powers to remove this provision.

I may have misunderstood the Minister, but I thought he said that the right to buy of housing association tenants had been taken away. I do not know what the reaction of the noble Lord, Lord Carmichael, will be to this matter, but I shall not press it at present. I am frankly relying on the Minister's judgment on a matter which I do not understand. If the Minister says that this provision is all right, I must accept that. But I shall hold him to ransom if in future that view is found not to be correct.

Lord Sanderson of Bowden

I shall try to reply to my noble friend Lord Selkirk by saying that the people who will really lose are the taxpayer and the Government and not the housing associations themselves, bearing in mind the financial arrangements under which they operate. That should be sufficient assurance to my noble friend on that point relative to housing associations.

My noble friend also asked about the position in housing associations after the enactment of this Bill. I know that the right to buy is a point close to his heart. I remember that in the debates that went on at great length about charitable housing associations in Scotland my noble friend was very successful in pressing that point. I am sure he will be very relieved to know that when this Bill becomes an Act the right to buy for housing association tenants will not continue.

The Earl of Selkirk

If I have understood the position correctly, this provision really does not apply to housing associations at all.

Lord Sanderson of Bowden

I accept that remark.

Lord Carmichael of Kelvingrove

I had hoped that the Minister would do better on this matter than Lord James Douglas-Hamilton, the Parliamentary Under-Secretary of State for Scotland, did in another place. The Minister has perhaps spoken a little more, but like the noble Earl, Lord Selkirk, I am not absolutely sure about this provision. A great deal needs to be taken on trust.

In another place the Parliamentary Under-Secretary of State for Scotland said: The Hon. Gentleman asked why the situation was different from that in England. The answer is that it has been different for many years. The cut-off date at present for Scottish outstanding debt is 31st December 1978. In England it is March 1974, so there was a considerable discrepancy in dates long before the statement today … We do not have to do everything exactly the same as in England". If there is anything being done in England that would be beneficial to the Scots, I want it to be done in Scotland. I hope that the Minister feels the same way. I take the point about the housing associations. We shall have to look at that to see whether or not they will lose out through this provision.

However, I am still not happy. I thought that the Minister was slightly offhand, perhaps even reaching the point of smugness, when he said that there will be a balance in each area because most of the houses will be sold at an enhanced price even though some may be sold at a lower price.

We are dealing with a big area when we speak of Angus. It was badly hit by the downturn in world oil prices, which could not have been anticipated. The Minister must be aware that the keys to a large number of houses have been given back to the building societies. In some parts of the west Highlands there were similar developments related to oil prices and there are other examples as well.

We should like to know whether the Minister believes that there will be a rough balance between the swings and the roundabouts for single areas and not just for the whole of Scotland. The people of Angus may be badly hit and at the same time the people of Strathclyde may be all right. If there is no rough balance, will the Government have the power to help out if there is obviously a very severe anomaly? Other than that, the Minister seemed—

3.30 p.m.

Lord Sanderson of Bowden

Before the noble Lord decides what to do with the amendment, perhaps I may make one or two further points. I should like to clarify the position for the noble Earl, Lord Selkirk, concerning the right to buy. I want to make that matter absolutely clear. That right continues for existing housing association tenants as distinct from the charitable housing associations. However, it will not exist for new housing association tenants. I wish to make that clear.

Turning to the question of what the effect of the legislation will be, it is impossible to say exactly how many houses will be affected by the change in the cost floor arrangements which we propose. The discounted price of any house, ignoring any cost floor which may apply, depends on the individual tenancy record, and statistics are not available relating the length of tenancy to age of houses or improvements carried out to them. However, the numbers involved are relatively small. Some 36,000 houses were built in the period affected and 1,000 of those have already been sold. Some 200,000 public sector houses were in some way improved between 1979 and 1983. However, very few tenants in those houses will be affected by the new rule. In most cases, the oustanding debt on the improvements will already be below the market value, less the maximum discount level.

I appreciate that the noble Lord, Lord Carmichael, is concerned about the matter. I am also concerned about any effect on any particular area. However, having looked into it, I feel that the arrangements which we propose under the clause will be satisfactory for the situation in Scotland.

Lord Carmichael of Kelvingrove: The Minister is doing his best to explain a complicated matter. However, he still has not answered the question which I put when I gave the example of Angus. He used that example and he must therefore be aware of it. The outstanding debt on the development in Angus in 1991 is projected—I am sure the figures have been well checked, although there is a certain amount of guesswork involved—as being £2.6 million. That is a large sum of money for a place like Angus. It is very worrying.

The Minister seemed to be making some clarifications during his speech. We shall read that speech in Hansard and perhaps return to the matter. Perhaps the noble Earl, Lord Selkirk, will get together with me concerning exactly what the alterations are. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 agreed to.

Clauses 63 to 65 agreed to.

Clause 66 [Rent officers: additional functions relating to housing benefit etc.]:

Lord Taylor of Gryfe moved Amendment No. 72: Page 40, line 10, at end insert ("and (d) shall not specify individual grounds on which the Rent Officer shall make a determination.").

The noble Lord said: Clause 66 refers to the powers and responsibilities of rent officers. It also deals with the related subject of determination by rent officers of housing benefit. The purpose of the amendment, which may enable the Minister to deal in general terms with the whole subject of the powers of rent officers, is to limit the power of those officers in determining an individual's entitlement to housing benefit.

That subject is very important in the light of recent discussions and changes in housing benefit entitlement. As I understand it, the purpose of the Bill is that the letting of houses in both the public and the private sectors should be based on an income which will be adequate to support them with a minimum of public subsidy. The policy papers which preceded the Bill frequently referred to the level of rents required and stated that the rents should be economic, sensible or affordable. However, there was little that was specific in that regard.

What is known about the general thrust of the Bill is that the Government intend to depart from the concept of fair rents and let them rise to market levels. In Scotland, the majority of tenants cannot afford rents without subsidies. CoSLA has expressed concern that the Government's proposals will exacerbate that problem, particularly in the light of recent changes restricting eligibility for housing benefit. Subsequent amendments are also related to the amendment. Therefore, I would appreciate a reply from the Minister on the point.

Lord Sanderson of Bowden

I am grateful to the noble Lord for putting the argument forward in his amendment. As he rightly says, the matter will also come up in subsequent amendments and we shall no doubt have further discussions. However, at this stage perhaps I may emphasise that Clause 66 is designed purely and simply to prevent abuse of the housing benefit system. I am sure that the Committee supports that aim.

It also makes sense to make use of the expertise of rent officers to ensure that abuse does not take place. There is nothing sinister about the power under which my right honourable friend the Secretary of State will give guidance and information to rent officers. We should remember that the function to be given to those officers is a new one and that there will be a need to ensure consistency of approach throughout the country. The guidelines to be issued in determining rents and levels of reasonable accommodation will be the aim.

I recognise that the concern of the noble Lord and others outside the Chamber is to ensure that the new role of the rent officer is properly thought through. It is for that reason that government departments, local authority associations (including CoSLA) and rent officers are involved in discussions on the details of how the new arrangements will work. We intend there to be nothing draconian about the new procedures and rules to be followed by rent officers. They will be applied fairly and with discretion. The guidance to be issued by my right honourable friend the Secretary of State will be designed only to help ensure that.

I hope that with that explanation, and knowing that others will wish to discuss the clause later, the noble Lord will consider withdrawing his amendment.

Lord Taylor of Gryfe: I very much welcome the Minister's assurance that this will be the subject of continuing discussions with CoSLA. In the event of CoSLA's concern being dealt with I would propose to withdraw the amendment. I sincerely hope that the discussions and negotiations will be clarified before we conclude discussion on the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 73: Page 40, line 17, at end insert— ("( ) After section 30(2) of that Act there shall be inserted— (2A) The local authority shall have the right to appeal within one month to the Secretary of State against a determination made by the rent officers in exercise of functions transferred by section 64 of the Housing (Scotland) Act 1988. The Secretary of State must reconsider the original determination having due regard to the representations made by the local authority.—').

The noble Lord said: This amendment arises from the argument put forward by the noble Lord, Lord Taylor of Gryfe, on the earlier amendment when he stressed that the two roles of rent officers in any individual case will almost certainly conflict with each other. It is inevitable, I believe, that there will be a conflict. The amendment would allow some form of additional help in assessing rents. We believe that the legislation as drafted is not complete because it does not allow for local authorities to make representations based on their knowledge of local circumstances and needs.

Rent officers will face a difficult and not very pleasant task in determining rents. Some of their determinations might very well be unjust. But the right of appeal by local authorities would ensure that such cases could be reviewed and that local authorities' knowledge of particular cases could be taken into consideration. We consider that to be the minimum defence required to allow for natural justice given the dual role of the rent officer.

I know that there could be a plague of appeals by local authorities; but perhaps the Minister will be able to define parameters within which local authorities would not be able to appeal. No government want every decision of the rent officer to be challenged by local authorities. Nevertheless, there must be some right for the people living in the area, who know the area and who are perhaps dealing with hundreds of houses, to make an appeal on behalf of their area. I beg to move.

Lord Sanderson of Bowden

I am grateful to the noble Lord, Lord Carmichael, for putting down the amendment. I recognise that local authorities are concerned that they will lose subsidy when they pay benefit above the level of rent determined by the rent officer. This could arise when a claimant who is dissatisfied with the amount of housing benefit he receives makes use of his existing right—which will be unaltered—to have the decision reviewed.

Because the circumstances in which local authorities could lose subsidy under the new arrangements are complex, they are being considered carefully by working parties which, as I have already said to the noble Lord, Lord Taylor of Gryfe, at present include representatives from the Scottish Office, CoSLA and the Institute of Rent Officers, as well as the DHSS whose prime responsibility the subsidy arrangements are.

I can inform the Committee that the Government accept that local authorities should in principle have a right to seek a review of the rent officer's determination in certain circumstances. However, the best way for such a review to take place has not yet been agreed. Various options are being considered—among them, using the rent assessment committee, a team of senior or chief rent officers, an independent valuer or something less formal. The precise circumstances in which such a review can be requested also need to be decided. I can therefore assure the Committee that local authorities should have some right of appeal but would hope that the Committee agrees that the detailed arrangements should be set out in regulations rather than on the face of the Bill since those details are yet to be finalised.

The noble Lord, Lord Taylor of Gryfe, asked whether discussions with local authorities will include CoSLA and when those discussions will finish. The discussions are still at a relatively early stage. They do not need to be completed until assured tenancies come into effect, which is likely to be early next year. I can assure the Committee, however, that details of the new functions will be included in a parliamentary order which means of course that Members will have an opportunity to consider them if they so wish.

I hope that the noble Lord, Lord Carmichael, is satisfied with that assurance and that he will consider withdrawing his amendment.

Lord Carmichael of Kelvingrove

In the circumstances, the good faith of the Minister cannot be doubted. I have great pleasure in asking leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 66 agreed to.

3.45 p.m.

Lord Morton of Shuna moved Amendment No. 74: After Clause 66, insert the following new clause:

("Rent officers: additional functions. Where a rent officer has made a determination of a market rent in exercise of functions conferred by section 66 of this Act, that determination shall have effect as if it were a determination of rent by a rent assessment committee under section 25 (for assured tenancies) or section 31 (for short assured tenancies) except that the determination shall have effect from the date of reference to the rent officer.").

The noble Lord said: In speaking to the amendment in the name of the noble Lord, Lord Taylor of Gryfe, and my noble friends Lord Kirkhill and Lord Carmichael, it is necessary to try to set the scene for the purpose of the amendment. On this side of the Chamber we agree that there have been abuses of the housing benefit system and of the rent allowance subsidy. Too high rents have been charged so that a relatively small number of unscrupulous landlords have been subsidised. However, the effect of the Bill is that the rent control merely saves public money. The rent officer's fixing of the determination covered in Clause 66 merely restricts the amount of housing benefit and rent allowance subsidy that is payable; it does not affect the amount of rent that the tenant is required to pay. Of course, this situation affects only the very poor elements in society who are entitled to rent subsidy, housing benefit or rent allowance subsidy.

Therefore, if somebody who is entitled to housing benefit—if I may refer to housing benefit only— enters into a lease with an unscrupulous landlord for a very high rent, housing benefit is restricted to what the rent officer considers is a market rent but the tenant is liable to pay the balance. That necessarily means that the rent is way above the market rent because the rent officer has fixed the market rent.

The purpose of the amendment is to make it the case that for people receiving housing benefit and rent allowance subsidy, where and only where the rent is fixed at the market value for the purpose of housing benefit for the public side, it shall also be fixed for the tenant at that market value.

So far as we can understand, according to the Government's intentions, the market value will be based on appropriate yields which might be expected from investment in the private rented sector. If one considers the type of people (unfortunately, a fairly large class) who are entitled to housing benefit, they include people who are not very well up in knowing what the market rent is for any property. They are often those most anxious to have some sort of roof over their heads and on low incomes. That is a necessary assumption from their being entitled to housing benefit. Therefore it seems strange that the state is protected in respect of rents payable on housing benefit, but not the poor. This amendment is moved in order to protect the poor while still enabling the landlord to receive the benefit of a full market rent.

Perhaps I may give some examples. If you have a 17 year-old girl on income support looking for a bedsitter in Edinburgh, she may find accommodation at, say, £45 a week. The rent officer may decide that the rent should have been £38 a week. She requires then to find an extra £7 a week out of her income because her housing benefit would be restricted to that £38 a week. She is unlikely to be the sort of person who would know market values and be able to exercise the full market choice that seems to be intended.

Another example is that of a young couple on income support who are renting a flat at, say, £300 a month. If they miscalculate what the rent officer would fix as the market rent, they may find a considerable difference—something like £12 quite easily—in their weekly income, which for a young family with children could be a disastrous situation.

I am sure that that is not the Government's intention. This is one of the misses that have occurred in this very complicated legislation. I am sure that the Minister never intended all the harshness to fall on the poor. It would be perfectly easy to keep the legislation fair by saying the landlord is entitled to market rent as fixed by the rent officer. Housing benefit is limited to market rent, so the state or the local authority do not have to pay too much and the tenant is limited to market rent, so that he or she does not have to pay too much. That would seem to be reasonable. It does not require any additional rent determination system; it only applies to tenants eligible for housing benefit; and it will not affect the supply of rented accommodation.

Landlords, on the premise on which the whole Bill is drafted, will be charging market rent anyway, so it will not hold down rents. It will only disadvantage those landlords who are charging what rent officers consider to be excessive rent. If the Government intend to support them exclusively, I should be very surprised; in that case no doubt they will say so and I shall put this amendment to a vote. However, I hope that the amendment will be accepted by the Government. I beg to move.

Baroness Carnegy of Lour

This is a rather complex matter and it is difficult to understand how Clause 66 works. I hope the Committee will forgive me if I have misunderstood, but it seems to me that, as the Bill stands, the success of this measure depends on the tenant not agreeing to a rent which is in excess of the figure that the rent officer will eventually fix. Is the noble Lord, Lord Morton, going to put me right on this?

Lord Morton of Shuna

It is the other way about: the tenant fixes a rent with the landlord and, the tenant being in receipt of housing benefit, automatically the rent officer comes round. There is already an existing contract between the landlord and the tenant for rent. Then the rent officer comes round, looks at it and says, "Oh, no, that is excessive. Housing benefit will only be at the lower level".

Baroness Carnegy of Lour

I am grateful to the noble Lord. I think that is my understanding, but it seems to me that if the Bill is to remain as it is—and I have not yet heard my noble friend's argument for or against this amendment—somehow the tenant, in fixing the rent with the landlord in the first place, must be able to know fairly well what will happen when the rent officer comes to assess it. It seems to me that my noble friend has to explain to me how the tenant is to know that. That has perhaps put in layman's terms what the noble Lord, Lord Morton, said to me.

I hope that my noble friend will be able to explain that to me when he gives his point of view about this amendment.

Lord Sanderson of Bowden

I will now try to explain this very complicated part of the Bill. This amendment, if accepted, would be contrary to one of the central themes of the Bill: that rents payable under assured tenancies are to be freely negotiated between landlord and tenant. This is recognised in Clause 25, which makes it clear that for assured tenancies the rent determined by the rent assessment committee need not be the rent finally charged. The only exception to that general rule is in the case of short assured tenancies where tenants have additional rights of rent control reflecting their reduced security of tenure because of the time-limit on that type of tenancy.

As has already been explained, the rent officer's function under Clause 66, as I said to the noble Lord, Lord Taylor of Gryfe, is strictly related to the assessment of the housing benefit subsidy. I think we are agreed on that. If it were to be the case that the level of rent determined for that purpose was to become the rent payable, we should be in a position of having the rent officer setting rents in all cases where housing benefit was payable. Clearly, this would be going back down the road of rent controls from which this Bill is seeking to move away in the interests of tenants and landlords alike.

The Government have made it very clear that it is our view that only by giving landlords a fair return on their investment will there be the incentive to let, which is a prerequisite to the expansion of the private rented sector. By introducing an extra element of rent control, this amendment would put that objective in jeopardy. There is another danger. If it were the case that landlords were faced with a rent determination by rent officers in cases where housing benefit was paid to the tenant, landlords would be more reluctant to let to such tenants, who would therefore find private sector accommodation much harder to obtain. I am sure this is not what noble Lords wish to achieve.

I should also stress that the rent officer's determination for the purpose of housing benefit subsidy does not mean that the local authority cannot pay a higher level of housing benefit to the tenant. The authority may well do so if it chooses, though it will lose subsidy on the excess.

My noble friend Lady Carnegy asked how the tenant would know. My right honourable friend the Secretary of State for Scotland will issue guidance to rent officers on the principles to be adopted in assessing whether or not a rent is reasonable.

The rent officer will take the market rents as the basis for his assessment, comparing the rent with evidence of bargains freely struck between the landlord and tenants paying from their own resources. If there is insufficient market evidence for a rent officer to make such an assessment, my right honourable friend will give guidance on the procedure to be adopted. This will include advice on appropriate yields which might be expected from investment in the private rented sector taking into account the contribution to the yield likely to be made by capital appreciation on the house.

I have to say that this amendment—I know that this will be disappointing to the noble Lord, Lord Morton of Shuna—runs counter to the underlying purposes of the Bill. I am afraid that I cannot accept it.

The Earl of Selkirk

The Minister has answered as I expected. I must say that quite frankly, and I can understand it. But he has not replied to the story told by the noble Lord, Lord Morton. The young student wants accommodation—at Edinburgh University or wherever. What he wants to know is the benefit he is going to get if he lives in a particular house. I know what I should do; I should get in touch with the rent officer and ask him what benefit he could give me. I should not make an agreement with the landlord until I knew the degree of my benefit. That seems to me to be something that will inevitably happen.

It may be illustrated by the situation in which a tenant is told, "If you come to this house you will get a benefit of £x." Surely that is what will happen to many people. I wonder whether the noble Lord has thought of that. A student with practically no means would not go into a house at a rent of, say, £50, to find he only gets a benefit of £35. He just would not do it. One has to face up to the fact that such a connection will become necessary.

4 p.m.

Baroness Carnegy of Lour

Before my noble friend replies, I point out that the noble Earl's question was linked with a point that I did not fully understand. In striking the deal with the landlord, the student or the person who is entitled to the benefit has to know that the deal will work for him before he strikes the deal. We heard my noble friend amplify the fact that the local authority can pay more than the benefit. That is an important point. However, in making the deal in the first place the potential tenant has to know what that figure is likely to be— or am I misunderstanding the point? How does one find out whether one is a potential tenant in that position? I can see that the amendment will not work. It will spoil the intention of the Bill. But how will the tenant know what deal to strike?

Lord Sanderson of Bowden

I understand the aim of my noble friends Lady Carnegy of Lour and Lord Selkirk. A student must know, before making an arrangement with a landlord, what his liability is. First, landlords will quickly realise that they can charge only market rents if they are to obtain tenants. Secondly, they will be able to find out the general level of housing benefit in those circumstances. I do not think that I can go further than that.

Lord Morton of Shuna

The Minister has gone a great distance in what he has just said. If he means that landlords can charge only market rents, and if, as I understand it, the rent officer is to fix what are to be reasonable rents based on market rents—which is a distinction I do not see—I fail to see why it destroys the basis of the Bill that the tenants should be able to restrict the rent they pay to market rent. That is all that we are asking. We ask that the rent payable should be restricted to what the rent officer determines is market rent. That is the basis on which the housing benefit and the rent subsidy allowance can be paid.

Perhaps I may make a subsidiary point. It is all very well for the Minister to suggest that local authorities can pay additional allowances. He may have heard—if not I shall willingly tell him—that there is an office in St. Andrew's House which on occasions has restricted local authority spending and, for instance, practised rate-capping. If a local authority spends too much it takes even more away in the way of grants. Disincentives are applied at an office that the Minister on occasions visits. That was not a very good answer.

There is another point that seems to me to be absurd. The noble Earl, Lord Selkirk, asked how the student is to find out. We are not dealing only with students. They receive a lot of housing benefit. We are also dealing with people and families with very low incomes, some of whom do not have the intellectual attainment to be students. The Minister said that guidance from the Secretary of State would be available to rent officers. Assuming that one of these poor families obtained the rent officer's guidance, would they possibly understand it, or would it be like the schedules that we are discussing—understandable only to a valuer? The benefit issue is very important. I cannot see why this amendment is so disastrous. It is fixing the rent at the market rent. The noble Baroness wishes to intervene.

Baroness Carnegy of Lour

As the noble Lord spoke, I thought that I began to see how the arrangement might work. The amendment suggests that rent should also be limited by the tenant to the market value. Let us suppose that the tenant is not then paid benefit. That may easily happen if somebody takes a house when he is unemployed and then obtains a job. The rent is set at a wrong amount. That must surely be part of the argument also, must it not?

Lord Morton of Shuna

That would be dealt with by market forces— if I may pray them in aid. We are dealing with the market rent for the house. That does not depend on the type of tenant. As I understand it, the rent officer is fixing the market rent of the house. In the cases with which we are dealing, we are assuming that the landlord is charging, and the tenant has originally agreed, something above the market rent for the house. I see no reason in effect why anybody—even if he later obtains employment—should be bound to pay more than the market rent.

Baroness Carnegy of Lour

If I am unemployed, I would have every hope that I should obtain a job within the year, and I am capable of earning a reasonable salary. In the meantime I am entitled to benefit. I might well take on a house at a somewhat higher rent in anticipation but then this situation may arise, in which case the amendment of the noble Lord would not hold good.

Lord Morton of Shuna

We are at cross-purposes. It may be a minor point. The noble Baroness is talking of someone anticipating the type of rent that he can afford to pay if he has a job. He might be able to pay a rent of, say, £20 a week. If that were an excessive rent for that property, it would not matter whether the person was able to pay £1 million a week: it would still be above the market rent for that property. That is the distinction. It is the market rent for the property that is being discussed in this amendment.

In those circumstances I have to ask the view of Members of the Committee.

4.7 p.m.

On Question, Whether the said amendment (No. 74) shall be agreed to?

Their Lordships divided: Contents, 69; Not-Contents, 105.

Attlee, E. Lloyd of Hampstead, L.
Aylestone, L. Longford, E.
Banks, L. Mackie of Benshie, L.
Basnett, L. McNair, L.
Birk, B. Molloy, L.
Bonham-Carter, L. Morton of Shuna, L.
Bruce of Donington, L. Mountevans, L.
Campbell of Eskan, L. Nicol, B. [Teller.]
Carmichael of Kelvingrove, L. Paget of Northampton, L.
Chilston, V. Peston, L.
Cledwyn of Penrhos, L. Pitt of Hampstead, L.
Cocks of Hartcliffe, L. Ponsonby of Shulbrede, L.
David, B. Prys-Davies, L.
Dean of Beswick, L. Rea, L.
Dormand of Easington, L. Ritchie of Dundee, L.
Elwyn-Jones, L. Sainsbury, L.
Ennals, L. Seear, B.
Falkland, V. Serota, B.
Fisher of Rednal, B. Shackleton, L.
Fitt, L. Stallard, L.
Gallacher, L. Stedman, B. [Teller.]
Graham of Edmonton, L. Stewart of Fulham, L.
Grey, E. Strabolgi, L.
Grimond, L. Taylor of Gryfe, L.
Hampton, L. Underhill, L.
Hanworth, V. Wallace of Coslany, L.
Harris of Greenwich, L. Wells-Pestell, L.
Houghton of Sowerby, L. White, B.
Irving of Dartford, L. Williams of Elvel, L.
Jay, L. Willis, L.
Jeger, B. Winchilsea and Nottingham, E.
Kagan, L.
Kilmarnock, L. Winterbottom, L.
Lawrence, L. Wise, L.
Listowel, E. Young of Dartington, L.
Aldington, L. Butterworth, L.
Alexander of Tunis, E. Caithness, E.
Alport, L. Cameron of Lochbroom, L.
Ampthill, L. Campbell of Croy, L.
Arran, E. Carnegy of Lour, B.
Auckland, L. Cathcart, E.
Balfour, E. Coleraine, L.
Bauer, L. Colnbrook, L.
Beaverbrook, L. Constantine of Stanmore, L.
Belhaven and Stenton, L. Cornwallis, L.
Beloff, L. Cottesloe, L.
Belstead, L. Cowley, E.
Blatch, B. Cox, B.
Boyd-Carpenter, L. Craigton, L.
Brabazon of Tara, L. Crickhowell, L.
Broadbridge, L. Cross, V.
Broxbourne, L. Davidson, V. [Teller.]
Bruce-Gardyne, L. De Freyne, L.
Denham, L. [Teller.] Mowbray and Stourton, L.
Dundee, E. Moyne, L.
Effingham, E. Napier and Ettrick, L.
Elles, B. Nelson, E.
Elliott of Morpeth, L. Newall, L.
Erroll, E. Nugent of Guildford, L.
Ferrers, E. Onslow, E.
Fortescue, E. Orkney, E.
Fraser of Kilmorack, L. Orr-Ewing, L.
Gainford, L. Oxfuird, V.
Greenway, L. Porritt, L.
Gridley, L. Rankeillour, L.
Grimston of Westbury, L. Reay, L.
Hailsham of Saint Marylebone, L. Reigate, L.
Renton, L.
Halsbury, E. Rodney, L.
Hesketh, L. Rugby, L.
Hives, L. St. Davids, V.
Hooper, B. Saltoun of Abernethy, Ly.
Hylton-Foster, B. Sanderson of Bowden, L.
Joseph, L. Sandford, L.
Kinnaird, L. Selkirk, E.
Kinnoull, E. Shaughnessy, L.
Long, V. Skelmersdale, L.
Mackay of Clashfern, L. Somers, L.
Macleod of Borve, B. Swansea, L.
Malmesbury, E. Terrington, L.
Marley, L. Thomas of Gwydir, L.
Massereene and Ferrard, V. Thorneycroft, L.
Merrivale, L. Trafford, L.
Mersey, V. Trefgarne, L.
Monk Bretton, L. Vaux of Harrowden, L.
Montgomery of Alamein, V. Ward of Witley, V.
Morris, L. Windlesham, L.
Mottistone, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.16 p.m.

Clause 67 agreed to.

Lord Taylor of Gryfe moved Amendment No. 75: After Clause 67, insert the following new clause:

("Grants to voluntary organisations.

—(1) The Secretary of State shall make such grants as are necessary to voluntary organisations to meet any reasonable expenditure that is attributable to the training and provision of information to advisers, landlords and tenants, as to the meaning, application and implications of this Act.

(2) In this section voluntary organisation means a body other than a public or local authority body, the activities of which are not carried on for profit and is concerned with the giving of advice on matters connected with housing and adviser shall be construed accordingly.").

The noble Lord said: The debate that we have just had illustrates the complexity of the Bill. I am sure that the noble Baroness, Lady Carnegy of Lour, was not alone in finding it difficult to follow the detail of the previous amendment and its implications for the Bill. Therefore if we find it difficult, having read the Bill, digested the amendments and discussed them, how will the ordinary citizen in Scotland understand the Bill?

It is anticipated that directly or indirectly the Bill will affect over half the households in Scotland. At the present moment the voluntary agencies in Scotland respond to 500,000 inquiries each year and with the new burden of interpreting and advising on the Bill, their burden will be increased substantially. As we said at the outset, we wish the Bill to succeed, but it will succeed only if it is understood. The amendment makes a plea for increasing grants to the citizens' advice bureaux and the advisory agencies so that they may be in a position to guide.

There are questions of tenants' rights, rent levels, landlords' rights; all of these are difficult within the provisions of the Bill. I suggest that this be written into the Bill as a firm commitment to the voluntary organisations that are defined in the amendment. It should be written into the Bill that they should be given the necessary resources to carry the burden. I beg to move.

Lord Grimond

It may indeed seem sad and shocking that this type of new clause should even be contemplated. It means that Parliament is now passing legislation of such complexity and indeed of such confusion that we have to contemplate training people to understand it.

This legislation will affect thousands of people, yet the noble Earl, Lord Selkirk, described one schedule in the Bill as totally incomprehensible and later as nonsense. The Government appear to doubt whether they can do anything about it. The noble Earl, as we all know, is a very distinguished lawyer and Queen's Counsel: a man of great experience and ability. If he cannot understand the Bill and says that part of it is nonsense, what chance has the ordinary tenant in Scotland of making head or tail of it? The first plea I make to the Government is that they should pay some attention to the constant criticism not only from the noble Earl but from the Scottish judges and many Members of this Committee about the state of parliamentary draftsmanship and the legislation that they produce.

This is not merely an academic matter. There has been considerable confusion in Shetland over the rights of tenants and their position in regard to the two public housing authorities which operate there. I realise that the present position will be altered by the Bill but it is apparent that the Bill will make the matter no clearer. In the light of the confusion that has arisen in Shetland under the present conditions, the Bill is likely to make matters worse. I think that it is totally regrettable that this kind of new clause should be necessary. However, if the Government are to resist it, I believe that they must give an undertaking either that they will look at the more unintelligible parts of it with great care and attempt to make them clearer—and I doubt whether they can do that with a Bill of this length during the time that is left—or that they will write in new provisions affecting the local authorities and possibly the new housing authority. They must lay a duty on those bodies to explain the Bill and to provide the necessary advice. I do not believe that that can be left entirely to the existing voluntary organisations, excellent as they are. Before the complication of the Bill has taken effect, there is in Shetland a clear need to advise tenants not only about the proposed changes but the whole process in which they may become involved when the Bill takes effect.

Lord Carmichael of Kelvingrove

I support the amendment tabled by the noble Lord, Lord Taylor of Gryfe. I should like to point out that my noble friend Lord Kirkhill, who has added his name to the amendment, is unable to be present. I sometimes feel sorry for the way in which we throw brickbats at the parliamentary draftsmen. Perhaps it would be nice to give them a couple of fallow years of legislation and a chance to carry on with their crafts and skills.

As has been said by the previous speakers, Clause 74 was an excellent example of the difficulties. Knowledge and understanding of the Bill will be one of the most important issues. I am sure that the Government do not wish to have an unpopular Bill hanging around their neck in the future. Unless there is knowledge of the way in which the Bill will operate in individual cases, there will be a possibility of openings for Rachmanism. There are already certain people in my part of the world who are more expert than Members of the Committee in seeing their way through housing legislation and finding loopholes. Over the years there have been many unbelievably clever ways of obviating rent restrictions. I hope that the Government will look seriously at that issue.

I am not in total agreement with the comments made by the noble Lord, Lord Grimond, about the role of voluntary organisations. I believe that a point is reached where people have more faith in voluntary organisations for obtaining certain types of information. As long as they are doing the job I hope that they will be given the tools with which to do it. Rather than the Government spending a great deal of money on advertising the effects of the Bill, I should like to see it given to some of these excellent organisations to which people can go for an explanation of their particular case. It means that those who are providing that service within the voluntary organisations must be given special coaching. The Government may be able to handle the difficulty by giving volunteers an understanding of the way in which the Bill will operate. Then perhaps they could come back and tell us.

The Earl of Selkirk

I have great sympathy with what has been said by the noble Lord, Lord Carmichael of Kelvingrove. Two or three fallow years without housing legislation may produce something positive, although I know not. I do not doubt for one moment that my noble friend will earnestly say that he must do this. However, we should like to see some substantial evidence of exactly what he will do. I do not believe that one can expect the people of Scotland to understand the Bill. Unless I am much mistaken there are at least nine or 10 forms of tenancy which can arise in different circumstances. I do not claim to understand them for one moment, but the people want to know the facts about the tenancies and there should be simple access.

The Bill has added greatly to the complication of life for a large number of people. The answer is to ensure that the citizen' advice bureaux, or whatever, which are splendid organisations, will have the means of explaining it to people and making their lives simpler. It is a straightforward proposition. I am sure that the noble Lord will agree with me—I am confident of it—but will he agree to an adequate supply of money to provide the means by which it can be carried out?

Baroness Carnegy of Lour

My noble friend has put his finger on the point of the discussion. I do not imagine that the noble Lord, Lord Taylor, believes that a clause such as this will be included in the Bill. Presumably this is a probing amendment because I do not imagine that one would agree to legislation to: make such grants as are necessary to voluntary organisations to meet any reasonable expenditure". Doubtless the noble Lord will explain that when he replies to this short debate.

Some extremely good material must be produced in respect of this Bill once it becomes law. Many of the 500,000 queries received by voluntary agencies, as mentioned by the noble Lord, Lord Taylor, are in respect of existing housing and benefit systems. Therefore they will be replaced by new queries about the new system. However, change as radical as this will be difficult for people to understand. People such as those working in citizens' advice bureaux must inform themselves as to the way in which the system works. The discussion in respect of Clause 66 is a good example of something which must be expressed clearly in the information material which must be produced by the Government.

What will be the financial situation for voluntary organisations? I know that some already receive considerable grant aid from the Government. I believe that the citizens' advice bureaux receive a large sum of money from the Government but I am not sure how much. Perhaps my noble friend can tell us. They do a wonderful job but they will need the material and information with which to work. I do not know whether they will need extra grant aid but I am sure that if they have the extra material they will become very important to people, as will the officials who will also explain the Bill. However, I do not believe that an amendment to the Bill is a way of arriving at that.

4.30 p.m.

Lord Sanderson of Bowden

I thank all Members of the Committee who have taken part in the debate on this issue. I should like to begin by underlining two points which I have made during the course of the Bill. In reply to the debate on Second Reading I said that in relation to publicity we shall consider what further publicity is necessary in due course. As Members will understand, I was referring to publicity after the passing of the Bill because the Government can present the case only after the Bill is passed. I also said that a great deal of discussion has taken place in the press, radio and television—as those of us who live in Scotland know only too well—about the consequences and the very real points which are being considered as we consider this Bill for the people of Scotland.

I should also like to say to the noble Lord, Lord Grimond, that I fully understand the complexity of housing legislation; and indeed I gave a commitment to my noble friend Lord Selkirk. The draftsman is no doubt working now on Schedule 6 and the consequences of any amendment which we may bring forward on Report to enable, if we can, people to understand better this legislation and what is meant. I gave that commitment and I stand by it.

I now come to the substance of this particular amendment. It is not often that we see an amendment tabled to a Bill which has the potential for uncontrolled draining of the public purse that this one has. Taken at face value, this new clause would require—I repeat, would require—the Secretary of State to make grants to voluntary organisations to meet such expenditure as they choose to incur on training and information about this Bill. There is no discretion for the Secretary of State to say no, whether or not it can be afforded; and although the provision refers to "reasonable expenditure", there is no test of what can be considered reasonable. I find that very strange, coming from the noble Lord, Lord Taylor of Gryfe. Certainly the Secretary of State would have no right to consider the quality of the activity he would be required to pay for.

I understand that the amendment arises from suggestions which I have read made by the Scottish Association of Citizens' Advice Bureaux. In their supporting material SACAB says that they receive increasing demands for help and that housing advice is one component of that demand. I am sure there is no Member of the Committee who is not aware of the valuable service which CAB supply. Part of their appeal lies in the broad range of problems in which they deal. It is surprising therefore that they should promote a funding arrangement confined only to matters within this Bill.

Perhaps I should say to my noble friend Lady Carnegy of Lour that the amount of money which is devoted this year from the taxpayer to the Scottish Association of Citizens' Advice Bureaux is almost £1 million a year in Scotland alone, which is a very nice proportion of the whole.

Before I finish, I should perhaps refer to Shetland because the noble Lord, Lord Grimond, mentioned it. I am well aware of the situation in Shetland; but the confusion about legislation has not played a part in that particular situation. As I understand it, the situation in Shetland is one which we were discussing yesterday; namely, whether local authorities should become the landlords of even more tenants.

I am sure that the noble Lord, Lord Carmichael, in speaking to this amendment, understood very well what the consequences could be. The Secretary of State already has a power, in Section 197 of the Housing (Scotland) Act 1987, to give grants to voluntary bodies providing advice or training. That power is extensively used at present.

In addition, the Government intend that Scottish Homes will provide training, education and publicity over a wide section of issues in housing. Scottish Homes will also be able to assist others providing services of this sort, whether financially or in some other way—by, for example, providing premises. The new policies which this Bill will implement will, we recognise, require greater information to be available to tenants and landlords. That is common ground on all sides of the Chamber. Scottish Homes' powers will be ample for this purpose. It will be open to SACAB and any other body intending to provide a housing-related information or advice service to approach Scottish Homes for assistance.

I am sure that the noble Lord, Lord Taylor of Gryfe, having heard what I have said, will realise that this particular amendment is unnecessary in these circumstances and that it is one that no Secretary of State could possibly accept and nor could I.

Lord Harris of Greenwich

I am very surprised that the noble Lord, Lord Taylor of Gryfe, is satisfied with that reply because I doubt if anybody in the Chamber is satisfied with it. The noble Lord told us that the Government are being astonishingly generous in finding the sum of about £1 million for the citizens' advice bureaux and other organisations in Scotland to provide information. That is the cost of a number of houses in the West End of London. The noble Earl, Lord Selkirk, pointed out that the voluntary organisations in Scotland are facing a very substantial additional burden. The noble Lord spent a great deal of time in expressing doubt about the drafting of the amendment and he expressed deep shock at the failure of the amendment to give discretion to the Secretary of State. If he had said that, despite that, he would produce an amendment on Report to deal with the defects of this amendment, we should have been more satisfied.

Perhaps I can specifically ask the Minister a fairly simple question: what additional resources are the Government going to give as a result of the passage of this exceptionally complicated piece of legislation? How much extra money are they intending to provide to the voluntary organisations in Scotland if the Chamber does not adopt this amendment?

Lord Sanderson of Bowden

I am grateful to the noble Lord for intervening at this particular stage in the Bill in the way that he has. I find it very interesting that he should suddenly take an interest in this particular point. I shall not go any further than I have done regarding funds which will be available to Scottish Homes to deal with the major problem of explanation of this Bill and the consequences of it. It will be provided by the Secretary of State at the appropriate moment in the appropriate way in the appropriate amount.

Lord Harris of Greenwich

Perhaps I may ask the noble Lord whether he will answer the specific question which I asked. I shall repeat it. Are the Government prepared to give any additional assistance to citizens' advice bureaux in Scotland as a result of the passage of this legislation? Yes or no?

Lord Sanderson of Bowden

I shall not give a yes or no answer to that; I cannot. I intend to be sure that everything is done through every voluntary agency in Scotland and through Scottish Homes so that people understand the consequences of the Bill when it is passed.

Lord Taylor of Gryfe

The last reply of the Minister has been a little more forthcoming than earlier replies. He said that the amendment almost amounted to a blank cheque to the organisations; but it states: The Secretary of State shall make such grants as are necessary to the voluntary organisations to meet any reasonable expenditure". That surely retains judgment in the hands of the Secretary of State as to what is necessary and reasonable. To that extent it is not a blank cheque for every voluntary organisation to receive unlimited resources. If we consider the burden that will now be carried by these organisations, and particularly the Citizens' Advice Bureau, for them to have almost £1 million at their disposal to deal with current problems is not a frightening sum in my book.

I recommend that the Minister should have a quiet talk with the Secretary of State for Trade and Industry—or is it the department for enterprise?—to see how much money is being spent on government publicity in order to promote his department and his objectives. It amounts to millions of pounds. It is the greatest godsend to the advertising industry. I am not suggesting that we should go overboard in this connection.

Lord Sanderson of Bowden

I do not believe that we can have it both ways. The noble Lord wants publicity for the difficulties faced by tenants under this new Bill and yet he is saying that the Government are spending too much money through the department for enterprise. I cannot understand it.

Lord Taylor of Gryfe

That is not what I am saying. I am suggesting that the noble Lord should have a quiet talk with the Minister in charge of promotion of government enterprise, because the sum of almost £1 million for the citizens advice bureaux is a drop in the bucket compared with his budget. Perhaps the noble Lord, Lord Young, understands the greater importance of communicating and explaining. I was commending the Minister to have a further look at the situation because we are talking about rather poor people who are living in a new situation with new regulations about changing one's landlord; about the fairness of rents and about the ability to transfer one's tenancy. Those are complicated matters for ordinary people to understand.

I do not know how much the recent publicity from the Secretary of State in connection with the poll tax amounted to, but every household in Scotland received an explanatory document on the subject. Incidentally, it did not explain that in the City of Glasgow it is now calculated that the poll tax will be about £520 per person. That fact was not explained in the document but it is the latest figure. I do not want to drag a political argument into the debate at this stage, but people need help and guidance on matters which affect their whole daily living. Voluntary organisations are entitled to ensure that such assistance is readily available. As has been said so often, this is a very complex Bill which affects the lives of many poor people who are not perhaps experts in the field, but it affects them deeply.

I do not propose to take the amendment to a Division. However, I look for a more acceptable undertaking from the Minister at some stage as to how much and how this complex Bill is going to be explained to the public in Scotland. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 68 agreed to.

Schedule 7 [Minor amendments to the Housing (Scotland) Act 1987 (c. 26)]:

Lord Carmichael of Kelvingrove moved Amendment No. 76: Page 63, line 13, at end insert— (". In subsection (3)(b) of section 24, for the words "some other person residing in it or to threats of violence from some other person residing in it and" there shall be substituted the words "a spouse, ex-spouse, partner, ex-partner or member of the family or to threats of violence from a spouse, ex-spouse, partner, ex-partner or member of the family who is' ").

The noble Lord said: In moving the amendment, it may be for the convenience of the Committee if we also take Amendments Nos. 77 and 78. These are amendments which relate to domestic violence and are aimed to close what has now become a loophole in existing legislation for the housing of battered women. The introduction of the Matrimonial Homes (Family Protection) (Scotland) Act aimed, among other things, to give women suffering from marital violence additional protection if they wished to remain in the matrimonial home through, for example, an exclusion order on their husbands. It was never intended to be used as an alternative to re-housing under the homelessness legislation if the latter is what the woman chose, having taken into account all the relevant factors including the safety of herself and her children and also the urgency of the matter. That fact was made clear during the Matrimonial Homes (Family Protection) (Scotland) Act as it went through Parliament.

However, since the Act came into force, two problems have emerged concerning women who wish to be rehoused. The first is the definition of homelessness. There are many established and erudite arguments on the definition of homelessness. Section 24 states that, a person is homeless for the purpose of this Act if he has no accommodation, and a person is to be treated as having no accommodation for those purposes if there is no accommodation … which he … has a right or permission, or an implied right or permission to occupy.".

In conjunction with the rights contained within the Matrimonial Homes (Family Protection) (Scotland) Act that provision has resulted in some local authorities refusing to house women under the homelessness legislation, unless they have first sought to exercise their right under the Matrimonial Homes (Family Protection) (Scotland) Act regardless of their wishes and also, obviously by definition, regardless of their safety. That practice can only have been reinforced by a Court of Session decision; namely, MacAlinden v. Bearsden and Milngavie District Council. The judge upheld the local authority's decision not to classify a cohabitee as homeless after she had to leave her partner's house. Lord McDonald found that the pursuer had, retained an implied right to occupy Manly's house notwithstanding that, at that date, he had withdrawn any permission to occupy he may have granted. She had a clear right under section 18 of the 1981 Act to seek a grant of occupancy rights. She was thus not homeless.

The Scottish code of guidance on the Housing (Homeless Persons) Act and the Scottish Development Department circular make it clear how local authorities should respond to battered women who seek rehousing. Nevertheless, some local authorities continue to ignore that and thus legislation is required to ensure that battered women are not forced into a course of action which would put them at risk. We believe that this group of amendments will provide the necessary framework of legislation. I beg to move.

4.45 p.m.

Lord Sanderson of Bowden

I am grateful to the noble Lord, Lord Carmichael, for suggesting that we take Amendments Nos. 76, 77 and 78 together. I have listened carefully to what he said and of course I have knowledge of the case to which he referred.

Let me first comment on Amendment No. 76, and state immediately that I understand the concern and difficulties experienced by persons who fear so much for their safety that they feel they can remain no longer in the family home. This amendment seeks to extend the scope of the current legislation to allow a person to be accepted as homeless, even though he or she has accommodation, if he or she cannot occupy it for fear of violence not only from someone resident in the house (as the 1987 Act at present provides) but also from a non-resident spouse, partner or family member. This amendment would, in other words, remove the occupancy criterion in such circumstances.

I am aware that during this Bill's consideration in another place a fairly similar, but wider, amendment was tabled. However, the Minister responding to the debate could not recommend acceptance of that amendment as it would have unreasonably extended local authorities' duties. It would have obliged them, for example, to rehouse residents in areas with a reputation for violent behaviour.

Although Amendment No. 76 before us today is much narrower, I am disinclined to recommend it to the Committee, I believe that we should be looking to the police, and to the criminal law generally, to offer the householder protection against acts of violence, no matter whether they are perpetrated by a resident family member or otherwise. This should not be the role of housing departments through their responsibilities under the homeless persons legislation. For this reason, therefore, although I accept the reasons for the noble Lord proposing the amendment, I am unable to agree to it. However, I will look at what the noble Lord said and I may return to the matter at a later stage.

Lord Morton of Shuna

Before my noble friend considers what he will do with the amendment, does not the Minister accept the point that it is impossible for the police to watch over a person who is in fear of violence? It just cannot be done. You cannot place a policeman outside each house to see that the wife, husband, daughter, son—or whoever it may be—does not come to visit. The exercise is far too costly and the police manpower is not available to carry it out.

Lord Harris of Greenwich

I wholeheartedly agree with the noble Lord, Lord Morton of Shuna. Such disputes are undoubtedly some of the most difficult cases with which the police have to deal. Domestic violence of one kind or another creates immense problems for the police. As we know, they have substantial pressure upon their resources at present.

However, the noble Lord indicated that he was prepared to look at the matter between now and the next stages of the Bill. I hope that he will do so and, if necessary, discuss the matter with the Scottish Association of Police Officers which I am sure will echo what I have just said.

Lady Saltoun of Abernethy

It is not just a case of placing a police officer outside a house. It may be a case of placing a police officer inside a house.

Lord Carmichael of Kelvingrove

I am very grateful to the noble Lady. That was a point of which I too was thinking. It would be much better to give the spouse a house than to go to the extent of stationing a police officer inside, both in terms of peace of mind and also probably in purely economic and financial terms.

I am grateful that the Minister has taken the burden of the amendment and will look at it.

Lord Sanderson of Bowden

I was dealing with the first amendment, which is quite important and the one at which I wish to have a close look. Perhaps I may now turn to Amendments Nos. 77 and 78.

I am aware that a new clause on these lines was discussed in another place. The amendments seek to prevent a local authority refusing to class a person as homeless (or classifying him as intentionally homeless) solely because he does not intend to seek to exercise the rights conferred by the Matrimonial Homes (Family Protection) (Scotland) Act 1981. The 1981 Act, however, provides a useful first remedy for spouses or partners to seek to gain occupancy of the accommodation they had shared but no longer wish to share. In general I do not believe it is right to seek to bypass the provisions of the 1981 Act, which can result in the non-applicant spouse being excluded from occupancy. It is my belief that the 1981 Act should be tried as a first step in attempting to resolve domestic difficulties of the kind with which this amendment is concerned.

I do not believe it would be right for us to put into statute provisions which could oblige a local authority, if a person declares himself or herself unwilling or unable to pursue the remedies available under the 1981 Act, and if it believes the applicant to have a priority need for accommodation, to secure accommodation for that person. I accept that there may be occasions when for good reasons it would be unreasonable to expect the person concerned to follow the 1981 Act procedures. In such circumstances it could be correct for the local authority to look on that person as homeless and not intentionally homeless in terms of the 1987 Act provisions. But I suggest it should be left to the local authority in carrying out its duty under Section 28 of the 1981 Act to make inquiries as to whether an applicant is homeless or threatened with homelessness, to look at the circumstances which apply in relation to the use or otherwise of the 1981 Act remedies and to reach a judgment accordingly. I do not believe we should fetter the local authority's discretion in the way that Amendments Nos. 77 and 78 suggest.

In conclusion, I say to the noble Lord, Lord Carmichael, that I shall look very carefully at the first amendment that he proposed. I regret that I cannot accept the other two.

Lord Carmichael of Kelvingrove

I can understand the noble Lord's reluctance to accept the other two amendments. I think we should be grateful that he has gone as far as he has on Amendment No. 76, after taking advice on whether there is any overspill effect from Amendment No. 76 on to Amendment No. 77. Perhaps that will give some reassurance to certain people. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 77 and 78 not moved.]

The Earl of Dundee moved Amendment No. 79: Page 63, line 23, at end insert— ("5A. In section 151 (interpretation of Part VII) in subsection (2) for the words "139(3), 140(1) and (2) and 144(1) and (2)" there shall be substituted the words "139, 140 and 144".").

The noble Earl said: Amendments Nos. 79 and 80, to which I shall speak as well if your Lordships will permit me, are of a purely drafting nature to correct the consolidation measure, the Housing (Scotland) Act 1987. In that regard I am grateful to my noble friend Lord Balfour for bringing these points to our attention. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 80: Page 64, line 30, at end insert— (24A. In section 299 (jurisdiction of sheriff) in subsection (2)(b) for the words "paragraph (9) of Schedule 21" there shall be substituted the words "paragraph 11(1) of Schedule 20".").

The noble Earl said: I beg to move.

On Question, amendment agreed to.

Schedule 7, as amended, agreed to.

Schedule 8 [Miscellaneous Amendments to the Housing (Scotland) Act 1987 (c. 26)]:

Lord Morton of Shuna moved Amendment No. 81: Page 64, line 44, at end insert— (". In Section 106 (power of Local Authority to arrange for the execution of works of improvement by agreement with the owner) after the word "applies", insert "or any works of improvement or repair or other services which are to be carried out to or relate to a house sold under the provisions of Part III of this Act or Part III of the Housing (Scotland) Act 1988. The Local Authority may make such reasonable charge as it thinks fit for its services."").

The noble Lord said: This is a straightforward amendment. Under the existing law the local authorities have certain powers to carry out, with the agreement of private owners, repairs to the private owners' houses and to charge for them. Some of those services are confined to substandard houses. Others, such as non-grant-aided repair and improvement work, would be covered by competitive tendering and would be in exactly the same position as any other form of building work. The purpose of this amendment is to make sure that district councils are allowed, with the agreement of the other landlord or co-operative, to carry out the work if it is desired on all sides that they should do so. This is just an enabling power. I beg to move.

The Earl of Dundee

I am grateful to the noble Lord for his explanation, but I think that this amendment would considerably extend the types of works for which local authorities' direct labour organisations could submit tenders. It would expand the direct labour organisations' potential workload far beyond what they were originally established to do to a quite unreasonable extent. As a result, I cannot accept the proposal.

The right to buy provisions of Part III of the Housing (Scotland) Act 1987 and the tenants' choice provision in Part III of the Bill certainly mean a reduction in public sector housing. This will have implications for the size and structure of direct labour organisations, but the fact that there will be less work in future for direct labour organisations in their traditional roll does not mean that we should artificially seek to give them new functions, particularly since to do so would be likely to damage employment prospects in the private sector.

Lord Morton of Shuna

I do not think I said anything about direct labour organisations being deprived of work. Nor would I wish that the private sector should be deprived. I was merely suggesting that if its tender were cheaper than others it should be allowed to do the work; and if the Government's aim is market forces, why not? If the direct labour organisation happens to put in a cheaper tender than anybody else, why are the private builders to be protected from fair competition?

The Earl of Dundee

In a sense I take the noble Lord's point. If anybody tendering for a job of work is able to be cheaper than somebody else, if we believe in competition and if we want the job of work to be done as efficiently as possible, we cannot rule that out. Nevertheless I must refer him to the remit of local authorities over commercial and competitive work.

We believe that local authorities should engage in commercial activities only to the extent necessary to discharge their statutory functions. In general they should not supply goods or services to others unless they are statutorily required to do so. I have little doubt that if that general principle were to be breached for the purpose of houses transferring to the private sector there would inevitably be further pressure for other exceptions for works related to other services transferred to the private sector. We must draw the line somewhere and I believe that the general principle I have just explained strikes the right balance.

In this case, the amendment would very significantly alter the relationship between direct labour organisations and private sector contractors, particularly small local firms. I do not believe that this would be in the best interests of consumers. In the light of that explanation I wonder whether the noble Lord might see fit to withdraw his amendment.

5 p.m.

Lord Morton of Shuna

I am always interested in the theory of competition. It appears that if there is an efficient direct labour organisation that can undercut and supply to the consumer cheaper services, it is not to be allowed to do so by the Government as a matter of principle because it would interfere |with| the small builder. In a sense that is what the Minister has just said. If he does not agree with that, no doubt he will say so.

The other point is that one can easily visualise a situation where one has a group of houses—a small scheme or several streets in a large scheme—and an arrangement that they will be improved. While that is being planned, part of it is transferred to Scottish Homes and part stays with the local authority. Why is it to be prohibited that the transferred homes should get their repairs done, as originally planned under competitive tendering, by the direct labour organisation? It seems to me that it is denying competition.

I do not wish to delay the Committee. If through these kinds of political principles which seem to deny the market economy and fair competition the Government intend to continue their war against local authorities, perhaps this is not the issue upon which to press it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 8 agreed to.

Schedule 9 [Minor and consequential Amendments]:

The Earl of Dundee moved Amendments Nos. 81A to 94:

Page 67, line 5, at end insert—

("Land Compensation (Scotland) Act 1973 c. 56

1A. In section 27(4) (right to home loss payment) after paragraph (b) there shall be inserted the following paragraph—

"(bb) a right to occupy the dwelling as a statutory assured tenant within the meaning of the Housing (Scotland) Act 1988;".").

Page 67, line 5, at end insert—

("Local Government, Planning and Land Act 1980 c. 65.

1B. In Schedule 28, in paragraph 10 (urban development corporations, displacement of persons), after the words "Rent (Scotland) Act 1984" there shall be inserted the words "or the Housing (Scotland) Act 1988".").

Page 67, line 5, at end insert—

("Matrimonial Homes (Family Protection) (Scotland) Act 1981 c. 59

1C. In section 22 (interpretation) in the definition of "tenant" for the words "Rent (Scotland) Act 1971" there shall be substituted the words "Rent (Scotland) Act 1984 and a statutory assured tenant as defined in section 16(1) of the Housing (Scotland) Act 1988".").

Page 67, line 13, after ("10(2)") insert ("— (a) in paragraph").

Page 67, line 15, at end insert ("; (b) after paragraph (b) there shall be added the following paragraph—"; or (e) as respects Scotland, a letting of land under an assured tenancy or under what would be an assured tenancy but for any of paragraphs 3 to 8 and 12 of Schedule 4 to the Housing (Scotland) Act 1988." ").

Page 67, line 36, at end insert— ("4A. In section 55 (no subletting by secure tenant without landlord's consent) for the words ", nor shall Part VII of that Act" there shall be substituted the words "or an assured tenancy within the meaning of the Housing (Scotland) Act 1988, nor shall Part VII of the said Act of 1984".").

Page 67, line 47, at end insert— ("5A. In section 103 (certain provisions of Rent (Scotland) Act 1984 not to apply) after "1984" there shall be inserted the words "or in Part II of the Housing (Scotland) Act 1988".").

Page 67, line 47, at end insert— ("5B. In section 128 (recovery of possession of house to which Rent (Scotland) Act 1984 applies) after "1984" there shall be inserted the words "or in Part II of the Housing (Scotland) Act 1988".").

Page 67, line 47, at end insert— ("5C, In section 145 (recovery of possession of overcrowded house that is let) after "1984" there shall be inserted the words "or in Part II of the Housing (Scotland) Act 1988".").

Page 68, line 3, at end insert— (6A. In section 180 (effect of control order), in subsection (4)—

  1. (a) after the words "the Act") there shall be inserted the words "and paragraph 11 of Schedule 4 to the Housing (Scotland) Act 1988 (which excludes lettings by local authorities from being assured tenancies within the meaning of the Act)";
  2. (b) after "1984" where a second occurs there shall be inserted the words "or an assured tenancy within the meaning of the Housing (Scotland) Act 1988,";
  3. (c) for the words "protected or statutory" where they second and third occur there shall be substituted the words "protected, statutory or assured".
  4. (d) for the words "that Act" there shall be substituted the words "those Acts".").

Page 68, line 3, at end insert— ("6B. In section 311 (interpretation of sections 308 to 310), in subsection (2), in the definition of "interest" after "1984" there shall be inserted the words "or of a statutory assured tenant within the meaning of the Housing (Scotland) Act 1988".").

Page 68, line 3, at end insert— ("6C. In section 328 (duty to inform tenant of assignation of landlord's interest), in subsection (6), after "1984" there shall be inserted the words "and a statutory assured tenancy within the meaning of the Housing (Scotland) Act 1988".").

Page 68, line 3, at end insert— ("6D. In section 338 (interpretation), in subsection (1) in the definition of "tenancy" after the word "applies" there shall be inserted the words "and a statutory assured tenancy within the meaning of the Housing (Scotland) Act 1988".").

Page 68, line 3, at end insert— ("6E. In Part II of Schedule 3 (suitability of accommodation), in paragraph 1(a) after "1984" there shall be inserted the words "or under an assured tenancy within the meaning of the Housing (Scotland) Act 1988".").

The noble Earl said: With the leave of the Committee, I should like to deal with Amendments Nos. 81A to 94 en bloc. Though the above list of amendments to Schedule 9 looks a little formidable, these are simply consequential amendments which insert references to assured tenancies in earlier legislation, notably the Matrimonial Homes (Family Protection) (Scotland) Act 1981 and the Housing (Scotland) Act 1987. I beg to move.

The Earl of Balfour

Perhaps I may make one short comment here, partly to support the remarks made earlier by my noble friend Lord Selkirk. I am intrigued as to why in Schedule 8 we have, Miscellaneous Amendments to the Housing (Scotland) Act 1987", and then in Schedule 9, Minor and consequential Amendments". Paragraphs 5 and 6 of that schedule apply to the Housing (Scotland) Act 1987. Furthermore, the amendments which my noble friend Lord Dundee has moved, including Amendments Nos. 86 to 94, also apply to the Housing (Scotland) Act. Would it not have been rather easier for the people who have read the Bill and understood it for all the amendments to the Housing (Scotland) Act to be in the one schedule? That is my only question.

Lord Morton of Shuna

I raise the same point that was raised on Tuesday by the noble Earl, Lord Selkirk, about the way in which this legislation is now being drafted. If one were to set out to make the Bill as un-understandable as possible, it would be difficult to improve on what has been done with the schedules. I take up the point made by the noble Earl, Lord Balfour. I find it fascinating that, first of all, we have minor amendments to the Housing (Scotland) Act; then we have miscellaneous amendments in Schedule 8 to the Housing (Scotland) Act; and in Schedule 9 we have minor and consequential amendments to the Housing (Scotland) Act.

Surely, there could have been a more reasonable way of dealing with it. What is the difference in the same Act between minor and consequential amendments, miscellaneous amendments, and minor amendments? What is the difference in classification? Can that matter be explained?

Lord Campbell of Alloway

Having listened to what has been said, surely in the name of sanity my noble friend can take advice from his department as to whether this can be made a little more readily intelligible. It can be done quite simply. It is a matter of collecting the various consequential amendments and putting them in a schedule. It is true that some legal adviser might have to work for eight hours to do it—it could not take him longer—but I believe it would be worth the candle to do that.

The Earl of Dundee

I am very grateful to my noble friend Lord Balfour. He has written to me and to my noble friend Lord Sanderson with several further amendments to the Housing (Scotland) Act 1987 which he proposes should be made in Schedules 7 and 8. We are having his suggestions looked at. I will write to him once we have given them proper consideration.

Perhaps I may comment that Schedule 9 flows from the main provisions of the Bill and Schedule 8 is connected but not consequential. Schedule 7 is retrospective and Schedule 8—

Lord Morton of Shuna

Would the noble Earl explain what "connected but not consequential" means?

The Earl of Dundee

We are in areas of drafting which—

Lord Morton of Shuna

With respect, we are not in areas of drafting; we are in areas of English—

Baroness Seear

Or Scottish.

Lord Morton of Shuna

The language is English, but we shall willingly go into the Scottish language if necessary. We got into rows about ish and various other matters earlier on. Surely in this Committee we can get something which is explainable in simple English. Sir Ernest Gowers wrote a book on the subject some years ago. Please may we understand what the Government are trying to do?

The Earl of Dundee

I am all for being assisted by Sir Ernest Gowers and even by Dr. Johnson himself. This is certainly what we shall endeavour to do. I am very happy to take back the comments of all noble Lords and to see in what way we can improve and put right what may need to be put right.

Perhaps I may comment that Schedule 9 flows from the earlier provisions of the Bill. The sense in which the word "connected" is used here concerns a matter not flowing directly from earlier provisions. "Consequential" is used in the sense of a matter that does so flow.

Lord Morton of Shuna

Does that mean that if a matter is not flowing directly it is disconnected and therefore you call it connected? Is that what is meant?

The Earl of Dundee

I hesitate in making direct connections from what the noble Lord has just said. I believe that it may not be profitable to prolong this discussion. As I say, I am very happy to take back all the contributions which have been made to the Committee and see if something can be done which will meet with the approval of Sir Ernest Gowers and Dr. Johnson.

On Question, amendments agreed to.

Schedule 9, as amended, agreed to.

Schedule 10 [Repeals]:

The Earl of Dundee moved Amendment No. 95: Page 68, column 3, leave out lines 49 to 52.

The noble Earl said: This amendment simply brings that part of the repeal schedule in line with Clause 64, to which it relates. I beg to move.

On Question, amendment agreed to.

Schedule 10, as amended, agreed to.

Remaining clauses agreed to.

House resumed: Bill reported with amendments.