Lords Sitting of 6 July 1988

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business, take the opportunity to inform the House that I have accepted an invitation to formally open the new Crown court in Swansea on Friday, 8th July. Accordingly, I trust that the House will agree to grant me leave of absence for that day.

Channel Tunnel: Customs Clearance
2.36 p.m.
Viscount De L'Isle Viscount De L'Isle asked Her Majesty's Government:
Whether a decision has been reached to arrange on-train clearance only for passengers travelling from the Continent beyond London for immigration and Customs services, and whether it is still their intention to erect an airport-style clearance building at Waterloo for similar purposes for passengers travelling to London.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Government's view remains that the most convenient and practicable option for Waterloo trains is a quick and effective airport-type Customs and immigration control at the station.
Viscount De L'Isle: My Lords, while thanking the noble Lord for his reply, does it signify that up-to-date Customs clearance for passengers to London on the fast rail link will not be in place by the time that link comes into service? If so, are we to expect the institution of an archaic post-journey system at the London terminal, a system which has long since been superseded on Continental cross-border trains?
Lord Brabazon of Tara: My Lords, the plans are that there should be airport-style controls at Waterloo station similar to those in operation at airports and seaports at the present time. We do not accept that these controls will cause significant delay because the time taken to get through Customs and immigration is normally minimal.
Lord Strabolgi: My Lords, what is to happen on the French side between the coast and Paris? Will there be on-train clearance?
Lord Brabazon of Tara: My Lords, obviously, I cannot speak for the French Government. But if the trains are to be non-stop from Waterloo through to Paris, then they will have to arrange something at the Paris end.
Lord Peyton of Yeovil: My Lords, would my noble friend not agree that a combination of timeconsuming procedures and inappropriate formalities on the one hand and inadequate, slow-moving rail facilities on the other would be a singularly poor contribution on the part of this country to a very important project? Does my noble friend further agree that there is a great burden of responsibility upon the Government to see that this does not happen?
Lord Brabazon of Tara: My Lords, the Government are well aware of the situation. At present we are awaiting a report from British Rail on the capacity constraints between London and the Tunnel. We expect the report to be published very shortly. That will clarify the situation as to whether there is a need for a new high-speed link. I cannot anticipate the conclusions of that report at the moment.
Lord Carmichael of Kelvingrove: My Lords, I believe the House will recall that we debated this matter very fully during the passage of the Channel Tunnel Bill. I believed that the Government were coming round to the on-train clearance system. We know that there is a problem between British Rail, the Department of Transport and the Treasury. Can the Minister say whether this problem is any closer to resolution? We know that for very many years now the French and the Continentals have been operating a system with the minimum of carriage space. However, I understand that if there is on-train clearance the Treasury requires one-and-a-half carriages which seems to be quite excessive. Can the Minister tell us anything about the negotiations with the Treasury as regards this matter?
Lord Brabazon of Tara: My Lords, talks between British Rail and the Treasury—not forgetting immigration and its controls—are still continuing with regard to the provision of on-train controls for services going beyond London to the North. I know that was a subject that greatly concerned your Lordships when the Bill was passing through this House. At that time the Government agreed to facilitate on-train controls for those trains.
As regards the number of carriages for these facilities which the noble Lord mentioned ߞnamely, one-and-a-half per train—it is far too early to say what the realistic requirement is likely to be. This matter is being discussed by British Rail and the authorities at the moment. I would be surprised if the figure needed to be anything like the one mentioned.
Lord Orr-Ewing: My Lords, is my noble friend aware that the planned speed of the train to the Channel Tunnel in France is 125 miles per hour but that in this country it will work out at 53 miles per hour? This seems an enormous disparity even before one adds the delays caused by immigration and Customs controls at the end of the journey. As there is an immense investment in hardware both by ourselves and the French, is it not worthwhile spending a little more time, energy and money on making sure that the immigration and Customs controls, which will exist on trains going around

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London and travelling south and west and to the north of England are extended once that principle has been proved so that they may be operated on the Channel to Waterloo line as well as on the round services?
Lord Brabazon of Tara: My Lords, it is really a matter of convenience to people. I do not accept that any significant delays will be caused. Delays at airports are generally caused by people waiting for their baggage. Once they have it they normally pass through immigration and Customs extremely quickly unless there are suspicious circumstances. Of course we still need controls, and we shall continue to need them, to deal with drugs and terrorism and so on.The alternative of on-train controls for the Waterloo services would require travelling Customs and immigration officers; it would be quite an expensive use of manpower. Furthermore, it would mean that people were approached in the middle of their lunch, for instance, when they might prefer to have these matters dealt with on reaching Waterloo. There is an argument for Waterloo.
Lord Tordoff: My Lords, is the noble Lord aware that the cost of setting up airport-type facilities at Waterloo far exceeds the cost of having people working on the trains? Is he further aware that I tried to move amendments to the Channel Tunnel Bill for on-train Customs and immigration facilities from Waterloo as well as the rest of the country? I am delighted to find so many noble Lords now coming round to support that view.
Lord Brabazon of Tara: My Lords, the cost of the Customs hall at Waterloo will be between £4 million and £5 million. That is a one-off cost for building it, whereas keeping Customs and immigration officials on the trains is an ongoing cost.Furthermore, even if there were on-train controls there would still need to be facilities for the Customs and immigration services at the terminal at Waterloo, so they would not all be new costs.
Lord Tordoff: My Lords, perhaps I may just follow up that point.How many Customs and immigration officials can be employed and for how long for £4 million or £5 million?At the time the Bill was going through the House the cost was expected to be £8 million.How many people can be employed and for how long for that cost?
Lord Brabazon of Tara: My Lords, I cannot honestly give an answer to that question.Quite a number of trains will be operating on the line at the same time.I do not know what the figure will be, but each train will have to have its own number of people.It is not possible for me to give an answer to the noble Lord's question.
Lord Barnett: My Lords, are the Government truly committed to the internal market in 1992?If so, why will there need to be any Customs officials?
Lord Brabazon of Tara: My Lords, we are fully committed to reducing the barriers to trade within
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the EC so far as possible by 1992; but as I said earlier we will still need controls against drugs, terrorism and so on.That is well understood and I hope accepted by noble Lords.
Lord Jay: My Lords, is the Minister aware that a great deal of money has been raised for this project on the basis of promises about times and speeds which cannot possibly be carried out without a great deal of expenditure of public money? Would it not have been rather better to have studied all these facts before the money was raised and the promises given?
Lord Brabazon of Tara: My Lords, I think that all the facts were studied carefully before the money was raised.Indeed, I do not think the money would have been raised unless the investors knew what they were letting themselves in for.

Archbishop Thomas Cranmer: Quincentenary
2.45 p.m.
Lord Sudeley Lord Sudeley asked Her Majesty's Government:
Whether they plan to make representations to the British Railways Board to mark the quincentenary of the birth of Archbishop Thomas Cranmer in 1489 by naming a locomotive in his honour.
The Earl of Arran: My Lords, we have no such plans.These are matters for the judgment of the British Railways Board.
Lord Sudeley: My Lords, I thank the Minister for that Answer.Does he think it would be of benefit to the British Railways Board in these ecumenical times to commemorate a man who might be regarded as the founding father of worship in our mother tongue and the moving spirit of a book quoted as much as the Authorised Version.bearing particularly in mind that a locomotive has already been named after John Wesley?
The Earl of Arran: My Lords, my noble friend is quite correct.A locomotive has already been named after John Wesley; and indeed one has been named after Charles Wesley.We understand that representations have been made to the British Railways Board to commemorate Archbishop Thomas Cranmer on a name plate.The board, which has a long waiting list, has decided that the case does not readily meet its criteria.
Lord Parry: My Lords, may I therefore put in a request on behalf of John the Baptist?
Lord Kinnaird: My Lords, one cannot say what Archbishop Cranmer would think of having a locomotive named after him.However, with all due respect to the right reverend Prelate, it might be much more interesting today if we could know the views of the Archbishop on the ordination of women as priests.
The Earl of Arran: My Lords, I think we are going off the track into a siding.
The Lord Bishop of Blackburn: My Lords, before we run into the buffers, will the Minister welcome the assurance given in another place about the proposal to hold a major exhibition to commemorate the quincentenary of Thomas Cranmer'? That exhibition will be held in the Great Hall of Lambeth Palace in September of next year and will be preceded by two public lectures to be given by Dr.Peter Brooks of Robinson College Cambridge.
The Earl of Arran: My Lords, I am perfectly certain that the whole House is delighted to hear that.

General Teaching Council: Proposal
2.47 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they will establish a general teaching council.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, the Government have consistently made it clear that they are prepared to consider the case for a general teaching council in England and Wales but only on the basis of a specific proposal likely to command widespread support and serve the interests of relevant parties; that is, parents, pupils and employers as well as teachers.No such specific proposal has been received.
Lord Dormand of Easington: My Lords, I give a cautious welcome to that Answer.Does the Minister agree that a general teaching council would raise and maintain standards in the teaching profession, just as the General Medical Council and the Bar Council do in their professions?Does she not further agree that the two prerequisites of a successful general teaching council would be, first, that it should be a completely independent body; and secondly, that it must consist entirely of representatives of the teaching profession?
Baroness Hooper: My Lords, as a solicitor and therefore a member of the Law Society, I recognise the value of this type of organisation.I recognise that teachers perform an important job.I am happy to take the opportunity of paying a tribute to teachers.We are convinced that the vast majority of teachers do an important job in a dedicated manner, sometimes in difficult circumstances.I should particularly like to pay tribute to the way in which they have coped with the introduction of the GCSE and to say that by introducing the national curriculum we hope we are providing them with another exciting challenge to their professional commitment.I recognise that teachers would find a useful role on a general teaching council and would use it as a vehicle.But, as I said in my original response, we believe that it must also serve the interests of the wider community.
Lord Beloff: My Lords, is my noble friend aware that the proposal for a general teaching council was urged in 1973 upon Sir Keith Joseph, the then
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Secretary of State, by a group of educationists all of whom were members of my noble friend's party with quite precise ideas as to how such a council might be constituted?When the Bill is through, if the Minister were to go back through the archives of the department she would not be able to say that no precise proposals were on the table.
Baroness Hooper: My Lords, as I understand it successive governments have received various proposals.The last formal proposal was contained in A Teaching Council for England and Wales, a report from the Weaver working party which was published in 1970.Unfortunately, as the proposal did not receive backing from all teaching unions, the government of the day took no further action.As regards any subsequent proposals which have been made, I understand that there has still not been wholehearted commitment from all the unions or all the parties concerned.
Baroness Blackstone: My Lords, does the Minister not agree that it is vital to restore the morale of the teaching profession at a time of great educational change and that a general teaching council might be a most constructive move in that direction?Would it not bring teachers collectively together to participate in the implementation of the new legislation?Can the noble Baroness also say why the Government are insisting that pupils should be involved in such a general teaching council—I think I heard her correctly—when the Government have resisted the participation of pupils even at sixth-form level in governing bodies?
Baroness Hooper: My Lords, I shall answer the last point first. I must emphasise that what I said is that we should like to ensure that it would serve the interests of the relevant parties. It is in that context that pupils will figure. As I have said, the Government will consider any specific proposals that are put forward. I do not believe that it would be helpful for the Government to be seen to be imposing a general teaching council. If it is to be successful, it must have the widespread support of the professionals and of the other parties concerned. I understand that not even the Opposition education spokesman in another place, who recently announced this idea as new party policy, wanted such a body to be imposed by statute.
Lord Peston: My Lords, while I thank the Minister for what I take to be a sympathetic answer, would the Government, if one of the great foundations were to finance a pilot study into a general teaching council, give a fair wind to such a study or, at least, support it without necessarily imposing it?
Baroness Hooper: My Lords, I am quite sure that the Government would be quite happy to give a fair wind to that, as indeed they did in the case of the Weaver working party which was in fact set up by government. It is true to say that a general teaching council could be set up in any event. But, obviously, it would he useful to have government recognition and support for such a project.
Lord Parry: My Lords, would not a splendid initiative be for the Government to invite the teacher unions to meet the Secretary of State to discuss the concept anew in view of the history of the matter and also of the fact that most teachers—whatever the institute in which they were trained—are conscious that their basic training is insufficient for the demands of the present day? They have been trying by way of in-service education and postgraduate courses through the Open University to improve their lot as teachers so as to be able to cope.
Baroness Hooper: My Lords, there are certain individuals in the country who are most keen on promoting this idea: one is Professor Ross of Lancaster University who is in touch with the department. The department is being kept fully informed of developments on that front. Certainly the various initiatives that the department is taking in relation to both initial training and in-service training are, I believe, evidence of the value which the department places on this matter and the importance which it must bear for the future of the teaching profession.
Lord Orr-Ewing: My Lords, if a teaching council was set up, can my noble friend say whether it would cover physical education and sporting activities? If pupils were taught to play cricket rather more efficiently in future in the schools, we might then not have to eat humble pie.
Baroness Hooper: My Lords, I can see absolutely no reason why not.
Lord Annan: My Lords, if a teaching council were to be set up, could it perhaps address itself to the problem of how to teach mathematics from the ages of 16 to 18 to those who have no mathematical talent? It is most important that this should be done if we are to address ourselves to the problems which Continental countries have resolved.
Baroness Hooper: My Lords, I feel sure that the Government will bear that in mind when considering any possible specific proposal which may emerge.

The Sharpeville Six
2.55 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What action they are taking to save the Sharpeville Six from execution.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we have joined in appeals for clemency by foreign ministers of the Twelve on 14th June, by the Security Council on 17th June, and by heads of government at the Toronto Economic Summit on 20th June and at the European Council on 28th June.Recently we have again raised the issue directly with the South African Government.
Lord Hatch of Lusby: My Lords, I asked the noble Lord what action the Government are taking in the matter. Is the Minister not aware that there have been appeals, representations and diplomatic approaches for many years now and the only result has been increased oppression and brutality by the South African state? Is it the case that at the EC summit in Hanover, which took place a week ago, it was only the British foreign minister who stood out against the desire of the rest of the Twelve to warn the South African Government that if the Sharpeville Six were executed they could expect an increase in economic sanctions against that country and, possibly, also diplomatic sanctions?
Lord Glenarthur: My Lords, no: that is not the case. It is not true that the United Kingdom is isolated among the Twelve on the possible response if the six were executed. Our partners in the Twelve are not united on how to respond to what I have to stress to the noble Lord is at present a hypothetical question.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that supplementaries such as those posed by the noble Lord, Lord Hatch, are not very helpful in this context?
Lord Glenarthur: My Lords, it is certainly true, as my noble friend suggests, that the legal process as regards the Sharpeville Six is not yet exhausted.
Lord Cledwyn of Penrhos: My Lords, we fully support the representations made by Her Majesty's Government, in concert with others, from the summits which the Minister has described and also the unilateral representations. Can he say whether there has been any response from the South African Government to those representations? Can he also say a little more about the unilateral action taken by Her Majesty's Government?
Secondly, in view of the petition, or appeal, which is now being made to the chief justice of South Africa against the execution of the Sharpeville Six, can he say what further action Her Majesty's Government will take if the appeal should fail? Would the Prime Minister, who is reputed to have some influence in Pretoria, herself make representations—if necessary, by telephone—to Mr. Botha?
Lord Glenarthur: My Lords, the fact is that the stay of execution is in force until 19th July.I understand that defence lawyers lodged a petition on 4th July—to which the noble Lord referred—asking the South African acting chief justice to grant leave to appeal for a retrial. Should the petition be unsuccessful, defence lawyers can then address a fresh appeal to President Botha asking for clemency. Our understanding is that the stay of execution would he extended while the President considered the appeal.
As regards any response to the representations which we have made, those representations have been noted, as the noble Lord will have imagined, by those concerned. Our ambassador raised the issue of the Sharpeville Six bilaterally with the director general of

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the South African Department of Foreign Affairs on 22nd June and the director general of the South African Department of Justice on 28th June. We have drawn recent statements to the attention of the South African ambassador here.
As regards the future, as I have said, it is hypothetical. However, my right honourable friend the Prime Minister said in another place on 30th June that if the result is that the Sharpeville Six are condemned to death, we shall repeat our call for clemency.
Lord Bottomley: My Lords, have the Government considered asking the Archbishop of Canterbury, Cardinal Hume and the Chief Rabbi whether they have thought to make joint representations to the South African authorities about the six?
Lord Glenarthur: My Lords, I feel quite certain that the universal concern which is felt about the Sharpeville Six will have been well noted by the most reverend Primate.
Lord Hatch of Lusby: My Lords, I welcome what the Minister has said about the representations that are being made. However, I have to repeat that representations have been made to the South African Government for years.The only consequence has been that they have been ignored and that the oppression has increased.
Is it not the case that in the United States one of the main presidential candidates has described the South African Government as "racist"and the other main candidate has described it as "terrorist"? Both of those terms will imply further measures if either of these gentlemen is elected. Are Her Majesty's Government prepared to remain as the only known friend of the South African apartheid regime when the United States, the EC and the Commonwealth are all pressing for more action and in some cases taking more action—action not words?
Lord Glenarthur: My Lords, what the noble Lord fully fails to take account of is the fact that punitive sanctions already imposed have failed to speed up reform. They have reduced external influence and to some extent they have strengthened the right wing. I should have thought that we ought to try to strive to work for peaceful change through dialogue and negotiations, contact, pressure, advocacy, persuasion, dialogue and aid. That is the kind of action that will achieve what the noble Lord wants to see.

Business
3.3 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Skelmersdale will, with the leave of the House, repeat a Statement that is to be made in another place on the Cleveland Child Abuse Report.
It may be for the convenience of the House if I announce that the Report stage of the Housing (Scotland) Bill will be adjourned at approximately 7 p.m.for approximately one hour and that during
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that adjournment the Antarctic Treaty (Agreed Measures) (No.2) Order 1988 and the Education (Assisted Places) (Amendment) Regulations 1988 will be taken.

Harwich Harbour Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Environment and Safety Information Bill
Read a third time, and passed, and returned to the Commons with amendments.

British Steel Bill
3.4 p.m.
Report received.
Clause 1 [Vesting of property etc.of British Steel Corporation in a successor company]:
The Earl of Perth The Earl of Perth moved Amendment No.1:
Page 1, line 14, at end insert —
("( ) The successor company shall not dispose of any property or plant whether by sale or long lease in Scotland without giving the Secretary of State for Scotland opportunity to comment.").
The noble Earl said: My Lords, I beg to move the amendment standing in my name. Perhaps 1 may first recall the amendment which I moved at the Committee stage. In that debate I asked that any sale of anything by the British Steel Corporation out of Scotland should first be referred to the Secretary of State for Scotland for his approval. During the debate various noble Lords suggested that I had gone too far in asking for such a commitment. On the other hand, many of your Lordships recognised that there was a very grave problem here for Scotland because, after all, steel is a basic industry and is fundamental to its wellbeing.
Noble Lords further accepted that profit should not be the sole criterion in a case such as that. Your Lordships will recall that, despite our efforts to find common ground, we went to a Division. The Division was close but we lost. It therefore occurred to me that we ought to try to find something which was not quite so restrictive. That is what this amendment does. It asks that there should be no disposition of plant, machinery or property in Scotland without discussion with the Secretary of State for Scotland.
I and the other noble Lords who have subscribed to this amendment feel that this is something which it is proper to ask. While it does not give the Government any power of veto over the sale, it gives them a chance to make comments, in a manner that does not in any way upset the private activities of the British Steel Corporation. It does not take away from the corporation's powers but it ensures that it will talk to the Secretary of State for Scotland before it acts.
There is a further point that I want to develop and I think it is of almost equal importance. Noble Lords

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may recall that in the previous debate it was mentioned that the Secretary of State for Scotland, on the very day when we were having our debate on the amendment, had sent me a letter. I had not received it by the time the debate took place. I do not wish to go into that happening at the moment. I wish to quote from the letter because it is public knowledge; it was placed—and I fully agree now that this should have been done— in the Library.
In that letter, dated 20th June, the Secretary of State said to me:
"the Corporation"—
that is, the British Steel Corporation—
"has also indicated that, even if it should wish at some stage, because of market conditions, to close its steel making facilities at Ravenscraig, it would consider, on a commercial basis, any wholly private sector offer for those facilities as an alternative to closure".
That is of tremendous importance. If it could in some way be substantiated—that is the wrong word—or inserted, for example, in the prospectus, I for one should feel very much happier about how things stand. That would dispel my great fears—which I know are shared by many of your Lordships—that otherwise something like what happened in the case of the British Sugar Corporation and the closure of Cupar might take place. Noble Lords will recall that the British Sugar Corporation closed Cupar and blocked the possibility of the Scottish farmer ever growing sugar beet again. That was to the advantage of the British farmer, but it really was not good enough. The profit motive was the only factor involved and we had no chance to arrange for a sale elsewhere.
The point made in the letter is a very valuable one. I very much hope that something of its essence can be incorporated in the prospectus. People may say that the British Steel Corporation, after all, has already made all these statements. They may wonder why we are asking for anything else. But, clearly, the answer is very simple.Whatever statements the corporation may have made, and whatever its real intentions at present may be, it cannot bind its successor. But if something is put in a prospectus, the situation is different.
I move the amendment standing in my name and those of the other noble Lords whose names are down to it on the Marshalled List. But at the same time I ask the Government whether they will incorporate the sentence which I quoted from the letter of the Secretary of State of 20th June in any prospectus for the new corporation. I beg to move.
Lord Grimond: My Lords, I support the noble Earl, Lord Perth. I do not intend to repeat the positive arguments for the amendment which he outlined in Committee, and which he has deployed today in support of a rather different amendment. However, I think it aims to achieve much the same result.
The only points I wish to make are that I very much agree with the noble Earl as regards the letter of the Secretary of State, which I think is of great importance. But the noble Earl rightly points out that whatever the Secretary of State may write in a letter it is not the same as having it written into a Bill or
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Act. Therefore, to my mind, although the letter of the Secretary of State is welcome, it does not remove the necessity for the amendment.
I point out to noble Lords that the amendment is exceptionally mild. It does not threaten the Government or the British Steel Corporation in any way. It merely states that the Secretary of State for Scotland should be given an "opportunity to comment". That cannot be said to be a wrecking amendment, or even a revolutionary amendment. But I think that it is a reasonable suggestion as regards a matter that, were it to happen, would be of vital importance to Scotland.
I shall try to answer the main objection which, as I understood it, was made to the rather more drastic proposal of the noble Earl in Committee; namely, that if any such provision as this was written into the Bill, it would deter people who may be inclined to put in an offer for the British Steel Corporation when it is privatised. I do not think that that argument can be sustained. In several Bills concerned with privatisation there have been provisions for a "golden share." That clearly gives the Government power to intervene, if necessary, in the national interest. That has not prevented privatisation going forward. It has not deterred people who thought they could make a profit from coming forward and making a bid.
Further, I understand that several countries have provisions by which the assets of their companies cannot be disposed of simply at the whim of a foreign take-over. I think that at this moment there is a prospect of a Finnish company coming to the Stock Exchange and making an issue in this country in which, either through its articles of association or through Finnish law, it is laid down that 50 million shares will be held in Finland. I understand that no one feels that that is a complete bar to a successful issue in this country. There are other companies which, either through their articles of association or through the law of their domicile, have restrictions of some kind.
Finally, I point out that should there be any question of the sale or long lease of property or plant in Scotland, it is almost bound to involve the Government. At this very moment the Government—although no doubt they hope to keep out of the matter—are in fact becoming involved in the controversy between British Coal and the South of Scotland Electricity Board. Therefore they would be bound to become involved in such an issue. It seems to me much better that notice should be given so that the whole matter is not left to the last moment, so that it can be properly discussed and various alternatives suggested, or, if it becomes necessary to close down a plant with subsequent absolute loss of employment in a certain area, steps can be taken to lessen the blow.
I finish by pointing out that this does not prevent either the steel company from ceasing to manufacture or ultimately from disposing of its property. The amendment by itself only states that before that happens the Secretary of State for Scotland shall be given an "opportunity to comment". Surely, that is reasonable.
3.15 p.m.
Lord Stodart of Leaston: My Lords, I read the amendment on the Marshalled List with some interest. My immediate reaction on reading it was to ask myself whether it in any way was comparable with what took place with regard to the closing of the British Sugar Corporation factory at Cupar. I was immensely interested to discover that the noble Earl, Lord Perth, was so far obviously on the same wavelength on this subject as myself.
I was a Minister at the sponsoring department of the British Sugar Corporation in those days—the Ministry of Agriculture. I remember the chairman of the British Sugar Corporation, Sir Gerald Thorley, saying that he wished to close down, for economic reasons, the sugar factory at Cupar in Fife. As the noble Earl has said, it thereby became no longer possible for farmers in Scotland to grow sugar beet.
In passing, I should say that I think that one would find hardly a farmer within the orbit of that sugar factory at Cupar who would not say what a blessing it was that it was closed. The farmers would also say that it has enabled them to grow far more profitable crops than uneconomical sugar beet, such as vegetables for human consumption. But that is by the way.
But if anyone imagined that the intended closure of the sugar beet factory at Cupar would go unnoticed by the Scottish Office, he can quickly disabuse himself. The red telephones started ringing at frequent intervals and the Scottish Office was understandably extremely concerned about the matter. That is why, although I totally accept the description of the noble Lord, Lord Grimond, of the amendment—that it is extremely moderate—I say to him with the greatest respect that it is unnecessarily moderate. I cannot conceive with the little experience that I have had, and which I have described to your Lordships, that such an amendment is necessary at all.
Lord Morton of Shuna: My Lords, I do not have the recollection or the detailed knowledge of farming of the noble Lord, Lord Stodart of Leaston, to enable me to talk about the sugar factory at Cupar. But I know of a more recent closure of a factory where the Government had invested a vast amount of money and where the Secretary of State was suddenly taken by surprise at the decision to close it. That was the Caterpillar company where, much to the annoyance of the Secretary of State, a closure decision was implemented. Perhaps it is that kind of situation that we wish to prevent happening in this case.
Certainly the British Steel Corporation has received a certain amount of public money in the past and there is a need to take the social consequences into account, as the Secretary of State tried to do in the case of the Caterpillar company. However, he could do nothing to prevent that closure as he had not been informed of it before the decision was taken. I support the amendment.
Lord Trafford: My Lords, I spoke at Committee stage on this matter and I shall not repeat my comments. However, there are several points which are worth making on the new amendment. I agree
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that it is very moderate—so moderate as to be almost unnecessary. It is practically inconceivable to me that such a major change could take place in Scottish industry without the Secretary of State for Scotland either being aware of or being forced to comment—most probably over and over again—on the matter.
I shall not repeat previous arguments which have been put forward about the problems of the sale of British Steel with its ankles shackled and so on. That does not arise with this amendment. However, I wish to raise two points. First, when the noble Earl, Lord Perth, introduced the amendment he commented on the fact that the Secretary of State would have to have the opportunity to make remarks about the sale of property, plant or machinery. That seems to me to be an extensive range of affairs for a Secretary of State to comment on. Apparently even bits of machinery could not be sold without the Secretary of State becoming involved in some way. I am also unsure about what the term "long lease" means in the amendment. That is an arguable proposition.
I accept that those are relatively minor technical points dealing with the wording of the amendment. I do not wish to debate the question of what they mean. However, I wish to pick up a point which was raised by the noble Lord, Lord Grimond, when he referred to previous privatisations and the so-called golden share. To me that seems to be a different kettle of fish to what has been proposed in previous amendments or in some respects what is proposed in this amendment. The fact that there are major or large shareholders is a different matter from that of attempting to tie into an Act of Parliament specific prohibitions on a company. It is for those reasons that I have made my comments today.
Baroness Elliot of Harwood: My Lords, I support the amendment moved by the noble Earl, Lord Perth. It would mean that the authority which we wish the Secretary of State for Scotland to have would be mentioned on the face of the Bill. If that were not the case, the company might by subjected to the kind of takeovers which go on all the time these days, which I find difficult to follow and often disagreeable. The amendment simply states that the Secretary of State shall have the final word in such matters. The amendment should be supported wholeheartedly.
Lord Taylor of Gryfe: My Lords, the question of the golden share has been introduced in our debate. It would give veto powers to the Government as holders of the share. That is not implied in the amendment which is now before us. The amendment suggests that the Secretary of State should be made aware of any drastic or fundamental changes in the private company and given the opportunity to comment on them. Members of your Lordships' House may feel that he will have the opportunity to comment in any case. If that is so, why should not we write it into the Bill? The noble Lord, Lord Morton of Shuna, has described instances where decisions affecting the Scottish economy were made in Detroit or elsewhere and in which the Secretary of State for Scotland had a substantial financial interest but was not invited to comment. A case in point is that of the Caterpillar factory.

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Overshadowing our discussion on the amendment is the Ravenscraig question and the future of the Scottish steel industry. Perhaps I may say to the Government that Ravenscraig has attained a symbolic importance in Scotland. It represents one of the monuments of Scottish industry. The fact that the fate of that important and basic industry could be decided without comment from the Secretary of State for Scotland is unacceptable in Scotland. In the last few years the Government have attempted to better their miserable electoral performance in Scotland. Rejecting this amendment will do nothing to help that cause.
It was said earlier in your Lordships' House that if the provision was written into the Bill, and subsequently into the prospectus which will be isssued to attract investment to the privatised company, it will inhibit private investment in the industry. However, in the privatisations of both British Telecom and British Gas it was stated in the prospectuses that if there was a change of government, the Labour Party was committed to the rcnationalisation of the industry. That is a fairly drastic comment to make in a prospectus for an industry which is about to be privatised. It is much more drastic than the moderate amendment of the noble Earl, Lord Perth, which simply says that the Secretary of State for Scotland will be invited to comment on any fundamental change in the Scottish ecomomy which involves the steel industry. I therefore suggest that the amendment would do no harm and, if I may help the Government in this matter, there might be a great advantage to them in terms of their political fortunes in Scotland in accepting the amendment.
Lord Gray of Contin: My Lords, I have listened with great care to the noble Lord, Lord Taylor of Gryfe.I suggest that, whatever the failings of the Conservative Party in Scotland, it does not need guidance from his party as to how to put things right.I was particularly interested in the point he made about previous nationalisations.He may well be right.However, he is vastly experienced in the world of finance.Over the years I have no doubt that he has given valuable advice to many companies.Wearing that other hat, I wonder what his advice to a company that was interested in purchasing British Steel would be in terms of having to contend with the stipulation which the noble Earl, Lord Perth, seeks to include in the legislation.I venture to suggest that he would tell his client to go very cannily and he would be right to do so.
The main point at issue is the principle of privatisation.Those who have spoken against the amendment are opposed to that principle, whether it be the privatisation of steel or of any other industry.The noble Earl, Lord Perth, who in Scottish terms is a bonnie fighter, was bound to return at Report stage with an amendment slightly diluted from that which he had proposed at the Committee stage.I suggest that the arguments which he puts forward are very similar to those which he put forward earlier when his amendment was worded rather more strongly.
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We should pay great attention to the excellent contribution made by my noble friend Lord Stodart of Leaston, who has a wealth of experience in the farming industry. He highlighted just how ridiculous it would be to make any comparison between what the noble Earl, Lord Perth.seeks to do now and the question of farmers growing sugar-beet in Scotland.I thought that that point was made most effectively.
For my part I see no point in accepting the amendment. It will unquestionably weaken the legislation.It will prejudice the ultimate success of the company. Therefore, I hope that my noble friend will resist the amendment.
3.30 p.m.
Baroness Strange: My Lords, I rise to support my noble kinsman and clan chief the noble Earl, Lord Perth. It seems to me that it would be a very small concession from Her Majesty's Government for the Secretary of State to be allowed to comment on any future sale of property or other assets by British Steel. This is a free country and we are all entitled to free speech. Surely the Secretary of State for Scotland should also be entitled to free speech.
I believe that this is not a wrecking amendment, but indeed a very helpful one. I hope that Her Majesty's Government will see it in that light.
Baroness Carnegy of Lour: My Lords, I do not believe that the Secretary of State for Scotland requires any prompting from this House or by the Bill to take the opportunity to comment on any question of the closure of Ravenscraig or the sale of any piece of machinery owned by British Steel in Scotland. It is rather strange that many noble Lords have spoken this afternoon in a rather negative and frightened way about the future. I am not sure whether or not it is appropriate to mention that British Steel has announced its profits today. It has doubled its profits and is now the most profitable steel industry in Europe. It seems to me that we should be talking positively about the contribution of we Scots to the manufacture of steel in Europe and in the world.
The amendment would write into the Bill that our Secretary of State alone—not any other Secretary of State; not the Secretary of State for Wales, for Trade and Industry or for Employment—should be allowed to comment.He may say that he does not want something to be so. But that is all that he would be able to do— to comment. It seems to me a somewhat trivial amendment; but it was moved, I know, with no trivial purpose at all. Nor was the previous amendment moved with any trivial purpose. The intention is to speak up for Scotland in your Lordships' House and in the country. I wish to be second to none in fulfilling that aim. However, I do not want to act in a negative way. We should all be proud of what the steel industry has achieved today and want to see Scotland playing its major part in the future.
The Earl of Selkirk: My Lords, this is an immensely crucial point in the history of Scotland. It was about 120 years ago that steel became the central feature of the industrial development which has taken place.

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Now that local supplies have disappeared raw materials will come from abroad. That is a very big change, the extent of which I do not think can readily be foreseen.
Perhaps I may remind the House that there was a time when Coatbridge was the vulcan of Great Britain. It was an extremely unpleasant experience; the sun was never seen at all. Equally, nearly half the boats in the world were built on the Clyde. That was an immensely formidable element in the country.
Why is that important? The first reason is that changes of ownership cannot take place secretly without anyone knowing. I do not know whether it is an absurd story, but certainly it was gossip when I was at the United Nations. It was said that the site and the building of the United Nations was all settled in a night club in Philadelphia. That kind of thing can happen. There is nothing in company law to stop it if that is what is wanted. What we are saying is that it must be known.
Why is it important that it should be known? Perhaps I may put it in this language. There are two approaches to industry in Scotland. One is the pure economic approach: success at any price. The other is the recognition that all industry has a social basis and that if it does not have a social basis it will not succeed economically. That is a distinction which divides the country and has done so for many years. I think both are wrong. No industry can succeed purely on economic grounds or purely on social grounds. There should be a combination of the two. That is what we have tried to achieve in the country in a great variety of ways. It is of the utmost importance.
That, as I understand, is the motive of my noble friend Lord Perth in putting forward this amendment. He is saying that anything which fundamentally affects steel is of immense social importance to the country. That is the implication of the amendment. It does not matter how it works; that is what it means. It is a warning that the social implications of any change in the steel industry will be of great moment to the whole country.
That is why I think that it is worthwhile to make a comparison with the golden share. It is perhaps a rather distant comparison but it has the same implications. The disposal of property is something that cannot be allowed to slip past without the officer in charge, the Secretary of State, recognising all its implications for employment and labour. One may say that he will know about it. I have given one example to show that he might not know; it might be sprung on him. The amendment represents a small step. I believe that it is worth the Government's while to recognise that it is one which should not be overlooked.
Lord Hughes: My Lords, I should also like to support the amendment and to comment briefly on some of what has been said by its opponents. For instance, the noble Baroness, Lady Carnegy of Lour, referred to the profits announced by British Steel today of some £400 million. Although a substantial part of that follows government example in the disposal of profitable assets it remains a very substantial increase in the normal profits of the enterprise.
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The noble Baroness went on to say that Scotland would wish to play a part in the continuing prosperity of the steel industry. It has been made abundantly clear that the interest of those of us who support the amendment is in the future of Ravenscraig. If Ravenscraig is disposed of, Scotland will have no opportunity to play any part in the steel industry, because the last of it will have gone. It may be that at the end of the day that will happen. But, as the noble Earl, Lord Selkirk, has said, it ought not to happen secretly.
The noble Lord, Lord Gray, has rather changed his statements on this matter. On the last occasion he argued against the previous amendment because of the possibility that the next Labour Government would have Mr.Benn as its Prime Minister. That possibility did not seem to raise many hackles on either side of the House.
The noble Lord, Lord Marsh, in a thundering speech against the amendment, said that if the previous amendment of the noble Earl had been carried one could not give away British Steel to private interests. That would seem to indicate that in his view the part that Ravenscraig is playing and would play in the enterprise was such a major part that its possible retention would kill the chance of privatisation. I think that the results indicated today of a profit of £400 million would certainly make that extremely unlikely.
I served for a spell of some seven years as a Minister in the Scottish Office. The then Secretary of State, the late Lord Ross of Marnock, gave me a very free hand in deciding what I should do with amendments because I had very little Back Bench support in this House and almost had to attempt to achieve some kind of Scottish coalition to get legislation through the House. One thing I never accepted was to put forward the argument which so frequently appeared in the brief prepared by the civil servants: "This amendment should be resisted because it is unnecessary. The Secretary of State would do this in any event". I used to argue that if the Secretary of State was willing to do it or would do it that was the best possible reason for accepting the amendment.
In those days amendments along these lines came from this side of the House, which was occupied by the people who at the present time sit on that other side of the House. I hope therefore that if the Minister is not to accept this amendment, he will find a better reason than to say that it is unnecessary because the Secretary of State would do it in any case.
Lord Carmichael of Kelvingrove: My Lords, in the short time that we have been debating this amendment perhaps more Scots have been brought into the discussion than have spoken in any other debate that I have known in this House. As has been said by a number of speakers, the reason is that in Scotland this is an emotive subject. There is much reason for it to be so. The industrial revolution in Scotland was built largely on steel. That steel should be seen as important is extremely pertinent to the psyche of Scotland. While we do not believe that therefore we should have steel for ever, there is a feeling of betrayal when such an important industry

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is suddenly whipped away without any thought or representations being heard from the body of people who are in charge of the political machinery in Scotland.
It is interesting that, as I reckon it, 12 people from Scotland, including myself, have already spoken on this Bill, and one noble Lord from Wales has also contributed to the discussion. The proportions are something like eight to four. Almost as many people spoke in favour of this amendment as the Government have Members from Scotland in the other House.
This is an extremely modest amendment but that does not mean that it is not important to Scotland. None of us doubts that the Secretary of State will know what is happening; it is unlikely that such an organisation would suddenly close down without his knowledge, although my noble friend Lord Morton of Shuna raised the question of Caterpillar. More than one government were rather let down by what happened at Linwood. The various groups who came into Linwood did not co-operate as well perhaps as they should have done, even in terms of giving information to the Government. Singer in Clydebank came as a fairly sudden surprise. After having been in Scotland from, I think, 1890, the company suddenly decided to pull out. The decision that it would no longer stay in Scotland was made in somewhere like Milwaukee.
There is a feeling that the fate of many important industries is decided without any reference to the social background and the circumstances in which they were built. I believe that it was the noble Earl, Lord Selkirk, who said that economic and social forces must go together and that the one is dependent upon the other. To run something purely on a profit-and-loss account basis for any length of time with a sustained effort can lead to great difficulties. It is quite true that some of the most successful companies in Britain over the past 100 years have been those that paid particular attention to the community in which they operated and to the welfare and betterment of their employees. With the more enlightened companies perhaps that era is returning.
It has been repeatedly said that this is not anything like as draconian an amendment as the one moved earlier by the noble Earl, Lord Perth, which was only lost by 11 votes. I think that it was suggested during the debate that the amendment gives the Secretary of State the right to interfere even if small pieces of machinery were to be sold. The noble Earl, Lord Perth, made quite clear in his earlier speech that he was speaking about fairly large sums of at least £100, 000. We are all intelligent people; we do not expect the Secretary of State to be bothered with the sale of the occasional winch or narrow-gauge locomotive. We are talking about fairly big money and fairly big decisions. They are decisions in which the Secretary of State should he involved because they will affect the fabric of the country.
If, after having discussed the matter, the Secretary of State feels that there is nothing that he can do—which may very well be the case, because if a decision has been firmly made he may not be able to
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advance any arguments to persuade the people who are running the operation in a purely commercial way to act otherwise—nevertheless some time will have been gained.Surely the Secretary of State will always be able to influence matters—for instance, the run-down towards closure—so that some amelioration can take place or use his offices to find other outlets for the work.
What has come through the whole of this debate—and I am sure that noble Lords from parts of the country other than Scotland must be aware of it—is that a great deal of heat has been generated on this subject in Scotland. That is for very important, historic and indeed punishing reasons. I have a great respect for the noble Lord, Lord Gray of Contin, who comes from the north, but I only wish that he had as much feeling for the lowlands of Scotland as the lowlanders have for the highlands of Scotland, because this is an emotional subject. That is why we should feel a great deal better, as I am sure would the people of Scotland, if this mild but rather important amendment were included on the face of the Bill. I certainly give all my support to the noble Earl, Lord Perth.
3.45 p.m.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, before turning to the subject of this debate, I should like to apologise to the noble Earl, Lord Perth, for making public reference during the Committee stage debate to the Secretary of State's letter to him on this matter before he had received it. I shall not go into the reasons, but I can assure him that this will not be a precedent either for my department or for the Government. I apologise to him unreservedly.
Much concern has been expressed during this debate about the future of the corporation's Scottish facilities after privatisation. I understand that Ravenscraig and the other associated Scottish steel plants hold an important place in Scotland, as indeed the noble Lord, Lord Carmichael has said. The corporation, which is a responsible employer, recognises the place which Ravenscraig holds in the community. The corporation has also placed clearly on the record the important place which Ravenscraig holds in its business. The chairman of the corporation issued a major statement on 3rd December last year in respect of British Steel's five integrated plants. Noble Lords will be familiar with its content but I shall repeat it because it is an important statement and this is an important debate.The chairman said that:
"subject to market conditions, the corporation expected that there will continue to be a commercial requirement for steelmaking and continuous casting at the corporation's 5 integrated plants for at least the next 7 years".
Such a statement would have been inconceivable just a few years ago. The corporation's present confidence is the product of a sustained effort by its management and workforce to turn the business into a viable, competitive enterprise. The results of that effort are apparent in the corporation's latest annual results that have been announced this morning. The corporation has made a net profit of £410 million in its last financial year. Its turnover has risen to more than £4 billion.

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I have to say to the noble Lord, Lord Taylor of Gryfe, when he talks about miserable performances that he might like to have a look at the miserable performance of a loss of £117 million in 1976–77, a loss of £513 million in 1977–78 and a loss of £357 million in 1978–79.
Lord Taylor of Gryfe: My Lords, I am sorry to interrupt the Minister but I can recall no reference to "miserable performances" in anything that I said. Perhaps I may just say to him, while he is committing the corporation to seven years of Ravenscraig, that that commitment does not necessarily fall on the new company which is being formed.
Lord Sanderson of Bowden: My Lords, the British Steel Corporation and its chairman issued a statement on 3rd December as I have stated. I believe that the British Steel Corporation chairman and his board are people of honour and of their word. I accept of course what the noble Lord said about miserable performances. He was talking about the political miserable performances of some political parties in Scotland. I am referring to the result of the Conservative Government's efforts to turn the British Steel Corporation round into a profitable company which these results truly demonstrate. I warmly congratulate the corporation's management and workforce on that excellent achievement.
Ravenscraig has played a full part in those results. It has made a full contribution to the corporation's success. I find it curious that against that background—strong profits, healthy demand and assurances about the future from the corporation—noble Lords should choose to cast doubts on the future of Ravenscraig.
Lord Morton of Shuna: My Lords, does that mean that the Government and the British Steel Corporation are withdrawing their threat that the hot strip mill at Ravenscraig is guaranteed only until next year?
Lord Sanderson of Bowden: My Lords, the noble Lord, Lord Morton of Shuna, asked a question about the hot strip mill at the Committee stage. I repeat the assurance that the British Steel Corporation gave: namely, that until next year, 1989, there will be a continuance of the hot strip mill at Ravenscraig. The noble Lord knows that as well as I do.
I have to say that highlighting Ravenscraig in this way does it a positive disservice. It implies that the plant is unable to stand on it own feet; that it needs special treatment. That approach would be a great mistake. If there had been special treatment for privileged parts of the corporation during the last few years, it would never have emerged from the perilous situation it was in at the start of this decade. The only criterion that an industrial business can have for the continued operation of a plant is that that plant remains competitive and makes a positive contribution to the organisation as a whole. That has been the position of Ravenscraig during the past financial year and the corporation expects, subject to market conditions, that that will remain the position
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for at least seven years from December 1987. I do not think we can ask for more than that.
This amendment has been presented to the House as a moderate proposal which asks very little of the Government. At first sight it may seem innocuous enough. But when I listened to the arguments put forward in its support it became clear to me that the real aim of those who support the amendment is to provide some form of special protection for Ravenscraig by imposing a measure of political involvement in its future.
The aim of privatisation is to return British Steel to the private sector where it should operate on the same terms as other private companies. If another private sector company wished to dispose of property in Scotland it would not have to refer its plans to the Secretary of State for Scotland for comment before going ahead. Why should British Steel be subject to different treatment? There are many other firms with an important presence in Scotland. We do not accept that singling out Ravenscraig in this manner is conducive either to the future of Ravenscraig or to the Scottish economy as a whole. Furthermore, it is no use pretending that by restricting the Secretary of State's power of intervention to one of comment only, the amendment does not impose much of a restriction on the freedom of action of the successor company. In practice, it would be taking the issue out of the commercial domain and into the political one. British Steel has suffered too much from that approach since nationalisation in 1967.
What I find particularly disappointing is the belief, which clearly underpins this amendment, that it is within the power of governments to reverse unfavourable economic tends simply by telling companies what to do. The Government do not wish to act as the corporation's alternative management: far from it. The consequences of that approach would be calamitous. It is for the company to formulate and carry through plans according to the commercial situation in which it operates. At present the corporation judges that there is a continuing commercial requirement for steelmaking at all its five integrated sites. That is a commercial judgment and it is a much better indication of the future for Ravenscraig than it has been possible to make before.
British Steel has gone even further than that in an effort to reassure those who are concerned about Ravenscraig. As my noble friend the Secretary of State for Trade and Industry told your Lordships on 3rd December, the corporation has also indicated that even if it should wish at some stage because of market conditions to close its steelmaking facilities at Ravenscraig it would consider, on a commercial basis, any wholly private sector offer for those facilities as an alternative to closure.
I do fully understand the noble Earl's concern to safeguard the Scottish interest. The Scottish economy has faced major restructuring over the past decade and I recognise that this has in some respects necessarily been a very painful process. But Scotland is now increasingly sharing in the national prosperity brought about by this Government's economic policies. Today's results prove that. British Steel is playing its part, as today's excellent results amply

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demonstrate. A short time ago British Steel was a massive drain on the nation's resources, as I have indicated. Now it is a symbol of national regeneration. I believe that for the Government to attempt to influence the corporation's activities in Scotland would be wrong. I understand why some noble Lords wish to do so, but I believe that to be a misplaced concern. The future of Ravenscraig is now much brighter as part of a competitive, enterprising organisation than it was a while ago as part of a loss-making industry. I am confident that British Steel will do well in the private sector and that Ravenscraig has a key part to play in this. The noble Earl, Lord Perth, has made his point with great conviction, but I hope that he will understand that the amendment is not acceptable to the Government. Therefore I must ask the House to reject it.
Lord Hughes: My Lords, perhaps I may ask a question before the noble Lord resumes his seat. I popped up quickly so that I could ask my question while he was still on his feet. I did not want to interrupt him while he was making his statement because he had already been subjected to two interventions. However, twice during his remarks he emphasised the fact that the British Steel Corporation a year ago said that Ravenscraig would continue for seven years. Assuming—as I believe I am right in assuming—that the Government intend to privatise some time before that six years has elapsed, what effect would the remaining period mentioned in the British Steel Corporation's statement have on the successor company?
Lord Sanderson of Bowden: My Lords, as I understand it, I believe that the noble Lord, Lord Hughes, with leave of the House, is asking what guarantees there are that the privatised company will fulfil the obligations which are implicit in the statement of 3rd December 1987— not a year ago. When the prospectus for the new privatised company is produced—and this is on record—the statement which was made on 3rd December will be reflected in the prospectus.
The Earl of Perth: My Lords, first. I thank the noble Lord, Lord Sanderson, for his apology about what happened last time. I had had it already in writing from him and the Leader of the House had also written. I did not want to go any further except for one matter and that has now been met. I was most anxious that it should not be a precedent for the future. The Government have given that undertaking and so on that basis let us forget it and let me say "thank you".
I first wish to thank all those who have supported my amendment. I could not have done half as well myself or thought up so many excellent arguments as they have produced. It would be invidious to say which of the many points made was the most forceful; they all were.
I must comment on what the noble Lord, Lord Stodart, said, which was that farmers are so glad that they no longer have to grow sugar beet. That is not my experience and I must declare an interest for I
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used to grow sugar beet and many round me were of the same opinion. I do not know whether the noble Lord ever goes to Cupar these days but it is a sad sight. There is that great factory lying idle. To the noble Lord, Lord Gray, I would say that I am not against privatisation. I do not think he has any right to say that many of the other speakers are of that opinion.
I should like to suggest what might be a possible way of obtaining what we ask for in the amendment and perhaps even more. The noble Lord, Lord Sanderson, drew attention to the various statements and safeguards that have been made by the British Steel Corporation over the last several months and years. He referred in particular to the statement of the Secretary of State for Trade and Industry on 3rd December. It is a vital statement about the British Steel Corporation being ready to consider offers in the event of its having to close. I agree with many noble Lords that we should not he too pessimistic. Never mind, one must think of good times as well as bad.
What I have mind is this. Is it possible for the Secretary of State for Trade and Industry, with all his skills of advocacy, to talk with the chairman of the British Steel Corporation and find a form of words which will give effect in the prospectus to all the recent reassurances? That would include the fact that the Secretary of State for Scotland must know what is happening? If that can be done, as was hinted by the noble Lord, Lord Sanderson, in reply to the noble Lord, Lord Hughes; if it can be made clear that there will be no closure; if all the other good statements made by the British Steel Corporation can be included in the prospectus in an appropriate form of words, perhaps we shall obtain what we want.
If the noble Lord, Lord Sanderson, is able to help me in that respect I believe that we should consider whether that half a loaf, three-quarters of a loaf or perhaps a whole loaf may mean that we need not press for a Division.
Lord Sanderson of Bowden: My Lords, with the leave of the House, I should like to repeat what I said to the noble Lord, Lord Hughes. I can assure the House that the terms of the corporation's 3rd December statement with regard to its integrated plants will be reflected in the prospectus which will be issued at the time of privatisation. The undertaking given by the corporation to consider on a commercial basis any wholly private-sector offer for steel-making facilities at Ravenscraig as an alternative to closure is clearly on the record.
The noble Earl, Lord Perth, asked whether the Government will be ready to discuss with the chairman of the British Steel Corporation the inclusion of various parliamentary undertakings being in suitable terms incorporated in the prospectus. I can say that if the noble Earl is prepared to withdraw his amendment I shall be happy to give that undertaking to him on behalf of the Government.
Lord Grimond: My Lords, is it in order for me to ask the Minister a question?
Noble Lords:Yes
Lord Grimond: My Lords, as someone ignorant of the law I should like to ask the Minister whether he can assure the House that a requirement in a prospectus is binding in law on those who accept the prospectus and bid for the company.
Lord Sanderson of Bowden: My Lords, with the leave of the House, I need to take advice on that matter because there is a question as regards what is included in the prospectus. However, at this stage I am saying that the Government will discuss the issue of the various undertakings being incorporated in the prospectus in suitable terms. It is an offer to discuss, as the noble Earl, Lord Perth, wishes. I have given that undertaking.
Lord Hughes: My Lords, with the leave of the House, I should like to remind the Minister that, irrespective of how binding an undertaking may be, one can look hack to what Guinness undertook to do of its own volition and how speedily it abandoned that thereafter.
The Earl of Perth: My Lords, I believe that what the noble Lord, Lord Sanderson, has said, goes a long way. The question raised by the noble Lord, Lord Grimond, is one of law. I am quite clear that if one has an undertaking in the prospectus one will follow it through. I believe that we should be well advised to accept the offer of the Government, knowing the powerful advocacy of the Secretary of State and that he will act in the spirit of what we want and what appears here. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

The Cleveland Inquiry
4.5 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, with the leave of the House, I shall now repeat a Statement which has been made in another place by my right honourable friend the Minister for Health on the Cleveland Report. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a statement about the report by Lord Justice Butler-Sloss on the findings of her inquiry into the handling of suspected child abuse cases in Cleveland in the early part of last year. Her report, and her own short version of it, are available in the Vote Office, as is a statement she is making in Middlesbrough this afternoon.
"Mr. Speaker, the whole House will be united in its condemnation of sexual or other abuse of children, and in its support for proper action to protect children from it. But it will be no less united in insisting that this must be achieved in a way which does not trample on the rights of parents and inflict unnecessary distress on the very children we wish to be helped.
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"It is clear from the report that this balance was not achieved in Cleveland during the period in question, even though many children received the protection they needed. The House would wish me to express the deep regret of all of us to those who have suffered as a result. It is perhaps hard to imagine the shattering effect on those parents who were innocent and on the children.
"The report contains substantial criticism both of individuals, including the consultant paediatricians, Dr. Higgs and Dr. Wyatt, the police surgeon, Dr. Irvine, and the child abuse consultant, Mrs. Richardson, and of important aspects of the managerial response to the situation as it developed. It confirms that there was an overall failure to achieve essential communication and co-operation between police, health and social services.
"It is for the authorities involved in the first instance to address these criticisms and take the necessary action. The Government expect that action to be thorough, speedy and effective. The help of the Government's own medical advisers, of the Social Services Inspectorate and of Her Majesty's Inspectorate of Constabulary will, of course, be made available to assist those authorities.
"At the same time, Mr. Speaker, the Government are taking immediate action to ensure that the more general lessons of the report are applied not only to prevent a recurrence of similar events but to improve the handling of child abuse throughout the country.
"First, as I have already said, the report confirms the fundamental importance of the professional people and agencies concerned with child abuse working closely together within agreed guidelines. It underlines the need for a balanced assessment of different strands of evidence, and for action to be judged in the light of all the circumstances of the family as a whole. It stresses the need to listen carefully to what the children have to say and to take it seriously. And it re-emphasises the need for parents to be kept informed, consulted, and given reasonable access to their children unless this would be against the best interests of the child itself.
"These lessons, including the report's recommendations for the creation of special assessment teams, are reflected in comprehensive guidance which is being issued today by my department and the Welsh Office. Guidance circulars are also being issued today to the police by my right honourable friend the Home Secretary and to the education service by my right honourable friend the Secretary of State for Education and Science. Detailed professional guidance on social work practice is now being tested in the field and will be issued shortly.
"On the specific point of ensuring effective co-operation between different agencies, I am also publishing today a survey by the Social Services Inspectorate of current arrangements. I am glad to say that it shows a generally satisfactory picture. In the few cases where this cannot be said, we are

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asking the inspectorate to monitor the position closely and see that it is improved.
"Secondly, the report indicates that medical examination is only one aspect of assessment, and in particular that the test of reflex anal dilatation should not on its own be taken as conclusive evidence of sexual abuse. That view is confirmed by the report of a sub-committee of my right honourable friend's Standing Medical Advisory Committee, which we asked to consider these matters in parallel with the inquiry. Its guidance for doctors on the diagnosis of child sexual abuse is being published today and sent to every practising doctor in the country.
"We are also publishing today and distributing to the nursing profession guidance for senior nurses on the management of child abuse work from my right honourable friend's Standing Nursing and Midwifery Advisory Committee. Copies of all the reports and guidance to which I have referred have been placed in the Library.
"Thirdly, the report shows a clear need for better training for those who handle child abuse work. We have already included in the Health and Medicines Bill new powers to cover specific grants for social work training in this field. I can tell the House now that we intend to make available in 1989–90 a grant of 70 per cent. in support of expenditure of £10 million. We shall ensure that this major new programme means not merely more training but better training which takes account of all the lessons learnt from the report.
"Lastly I am glad to say that the report gives general support to the proposals for reforming the law contained in the Government's White Paper on the law on child care and family services published last year. The aim of the proposals is to make the law simpler and clearer and to strengthen the rights of parents and children. They include the replacement of place of safety orders by a new emergency protection order with stricter criteria and more limited duration. In addition, where an emergency protection order is obtained without the parents being involved, they will have a new opportunity to challenge the order after 72 hours.
"The Government are firmly committed to a Bill to implement the White Paper proposals, modified as may be agreed in the light of the report. The Bill will be brought before Parliament at the earliest practicable opportunity.
"What I have announced covers the great majority of the report's recommendations. Others are being examined urgently. In particular, my noble and learned friend the Lord Chancellor intends to issue a consultation paper before the House rises on the report's suggestion for an Office of Child Protection, with powers which could include scrutiny of local authority applications in care proceedings and calling for additional investigation or reports.
"We are extremely grateful to Lord Justice Butler-Sloss for the thorough and comprehensive work she has done, and to her three assessors—Professor Hull, Mr. Chant and Mr.
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Soper—who have supported her in her conclusions and recommendations.
"The issues with which they have had to deal are immensely complex, and the report reflects the inescapable fact that there is no single simple answer. In acknowledging that, it is right also to balance the picture which has emerged from Cleveland with recognition of how much valuable and successful work is done in this difficult field by doctors, nurses, social workers and police throughout the country. But the plain fact is that what happened in Cleveland should not have happened, and must not be allowed to happen again. The measures announced today are designed to see that it does not".
That concludes the Statement, my Lords.
4.14 p.m.
Lord Ennals: My Lords, I thank the Minister for repeating the Statement made by his right honourable friend in another place and for its very balanced tone. Perhaps I may also add my warm congratulations to Lord Justice Butler-Sloss on her thorough, sensitive and painstaking report, which carries with it a deep understanding of the appalling damage which is now being done to young children and their families on a previously unrecognised scale.
As a result of this report, we can all face more realistically the appalling challenge to society of child sexual abuse. It took many years and many notable cases from Marie Colwell and Kimberley Carlile before even the professionals, the doctors, nurses, social workers and police, came to accept the level of physical abuse, neglect and emotional stress on a wide scale in modern society. Experts who had become accustomed to seeing physical signs of beating found it difficult to accept sexual abuse where there was no clear physical evidence. It is no surprise that at the heart of this report is the problem of effective diagnosis by doctors and other professionals.
Therefore, I welcome the Minister's announcement about the new guidance note to doctors and no less the guidance note to nurses and midwives. The revised version of the multidisciplinary approach to child sex abuse is also warmly welcomed.
Cleveland has taught us all the degree of pain which is involved in sexual abuse for the child at the time, sometimes over a period of years, and of course in years to come: and, indeed, also for the innocent parents. The events have thrown up the question of which is more damaging: to take a suspected child sex abuse victim from his or her family and then find that there is no abuse but the family is torn apart, or, on the other hand, to leave a suspected victim at home with the family, limiting the possibility that the child will reveal what has happened, and then to find later that further abuse has occurred which could cause permanent damage to the child.
Some judgments will inevitably prove wrong. No one can be sure of what will happen. What is essential—and seems now to be happening in Cleveland—is that the professionals, including the police, should and will co-operate together. That is

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something which clearly did not happen in the Cleveland situation and is a lesson which the report wisely points out.
There is clearly broad agreement with the conclusion in the report that the most important of all those involved is the child itself, for whom communication is most difficult and who too often is not believed when a statement is made. As in previous inquiries, crucial to the tragedy is a breakdown in communication between those involved. Clearly that has happened in Cleveland.
I should like to put a number of questions to the Minister on his Statement. First, is it not essential that a full study should be set up by the Government, involving professionals and organisations such as the NSPCC, the Children's Society and Dr. Barnado's, to assess the size of the problem that society now faces and to analyse anything that can throw light on the reasons for this happening?
Secondly, in the light of the size and nature of the problem is the Minister satisfied with his right honourable friend's rejection of the case for a three-year training course for social workers proposed by CCETSW? Will he look again at the position? Is he really satisfied with the announcement made in the Statement that £7 million will be made available for training? I quote:
"a grant of 70 per cent. in support of expenditure of £10 million,"
will be made available in England for the purpose. Is that not a modest sum? Are we not entitled to expect a larger response in terms of training and is not the figure of £40 million, which is what was rejected by the CCETSW proposal, more reasonable in view of this problem? In his Statement—and perhaps he can clarify this—the Minister did not refer specifically to child abuse in this training grant. Is he satisfied about the provision for the training of doctors and nurses in this respect?
Thirdly, should there not also be an in-depth study of motivation of this form of sexual deviation? Is this something which is linked with the violence which has become a feature of contemporary society? Is it more likely to be found among those who were themselves abused in childhood? To what extent can any part of the blame be placed on social work being inadequately funded in the work of social service departments?
Finally, will the Minister further comment on the contents and timing of the child care legislation'? I welcome his Statement that it will soon be before the House, but when'? It is now 18 months since the Government published their White Paper. It could be argued that if the proposed legislation had been law the events in Cleveland might not have been so tragic. Will he confirm that the law will aim to put the interests of children first, try to keep families together wherever possible, give parents a right of appeal against care orders by local authorities and give more support to those staff working with suspected abuse cases? Can he confirm that this legislation will be presented in the next Session of Parliament? In any case is it not a good idea that we should have an early opportunity to debate this very important report?
Baroness Seear: My Lords, we on these Benches wish also to thank the noble Lord for repeating the Statement on this very important report. We should like to add our congratulations to Lord Justice Butler-Sloss on the work that she has done, which I think will command great admiration everywhere for its skill and thoroughness in an extremely difficult situation. It must have been a very difficult job, both intellectually and emotionally, to tackle the inquiry and report. We should like to pay a tribute to her.
Following the noble Lord, Lord Ennals, I should like to suggest that this is a matter which requires a debate later on in more considered time. A reply to a Statement is not the moment in which to produce all the ideas that we should like to put forward in this connection. I should like merely to raise a very small number of points which I hope can be developed more fully when we have had the opportunity to absorb the report and to think more about the implications.
Clearly, as the Statement says, there is a problem here with training. These are extremely difficult cases. I should like to follow what the noble Lord, Lord Ennals, said, in asking the Government to look again at their rejection of the three-year training programme for social workers, or at least for social workers of the level who will be called upon to tackle these cases. Having myself seen the training of social workers, which was carried out extensively at the London School of Economics, I know how much has to go into the training of social workers for the skilled levels of the work. I think the Government are unwise to turn down the idea that there should be a third year. No doubt it may have to be of a rather different kind from the training that has been given in previous times. But the need for high levels of skill and knowledge in this field cannot be denied; and this report underlines it. There is far too great a tendency for people to continue to think, strange though it may seem, that social work is just a matter of common sense, good will and kindliness. It is no such thing. Anybody studying these cases must realise that, while common sense and kindliness are of great importance, a great deal more is required. The training needs to be of a high order.
I should like to suggest also that there should be training together in some of these areas for all of the professions concerned. Sending out circulars is fine, but it is no substitute for training. Quite clearly one of the problems arising from this report is that there is a lack of understanding, communication and collaborative thinking among the police, social workers and doctors. Surely the best way to do this is to organise some common training. The training of all those groups has grown up from different bases, with different assumptions of what their work is to be. The only way that one can overcome this is to try to organise training on a multi-professional basis so that they can begin to understand the problems which they have in common and those which are different. That will lead to much easier communication among the groups concerned.
With more hope than expectation perhaps I also urge that somehow or other the media should behave in a different way in reporting such cases. I know that it is in no way in the hands of the Minister to deal with

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this. But the temptation for the media to make headlines out of cases of this kind must be very difficult to resist. However, it does the greatest possible damage. It makes it extremely difficult for social workers to do their job. They are the people who have to go into the houses, as the noble Lord, Lord Ennals, said and we have also said in this House on other occasions. If they take action, they are wrong; if they do not take action, they are wrong. Either way one can make a highly coloured media story out of it. We implore the media to act responsibly in backing up the difficult job that the social workers have to do and not undermine their confidence in attempting to do it.
I gather that there is a suggestion that there should be established an Office for Child Protection. That might well be a very good step to take. At this stage I have no idea. If Lord Justice Butler-Sloss has made the suggestion, it probably is right, but only if the office is well staffed and has the resources to act quickly. I can imagine nothing worse than yet another level of bureaucracy which encourages buck passing and holds up decisions where delay may greatly increase the harm that is being done.
Finally, does this not point again to the need for speedy establishment of the family courts for which we have asked for so long?
Lord Skelmersdale: My Lords, I am extremely grateful to both the noble Lord, Lord Ennals, and the noble Baroness, Lady Seear, for their sympathetic and understanding reception of this report on such a serious matter. I note that they join me in expressing our thanks and admiration to Lord Justice Butler-Sloss and her assessors for the thorough and authoritative report that they have produced. I believe that it is incumbent upon us now to ensure that the lessons to be drawn from the mistakes made in Cleveland are applied urgently.
As the Statement made clear, the Government therefore responded immediately to the report by publishing today guidance on inter-agency co-operation in the handling of child abuse, by issuing authoritative guidance to doctors on diagnosis of child sexual abuse and by making available a new grant of 70 per cent. in support of £10 million of expenditure on training to deal with child abuse.
As the Statement made clear, in addition we intend to reform the law on child care and family services at the earliest practical opportunity. In answer to a point of the noble Lord, Lord Ennals, I regret that I cannot change those words. I am sure that the House will understand that I cannot anticipate what may be in the gracious Speech this year. All these factors show our determination to act quickly and decisively to ensure that what happened in Cleveland is not repeated.
In Cleveland—the noble Lord, Lord Ennals, is quite right—there was appalling damage to children and their families in some cases, but not in all cases. There in lies a difficulty. So far as concerns future and indeed current law, I think the correct approach is to make sure that there is a right and proper balance
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between the needs of children, the needs of families and—a factor which is sometimes forgotten—the needs of society at large. Although the noble Baroness is quite right, there is absolutely nothing that I can do to control the press—and I do not think the House would want me to even if I could—the media have a great responsibility in this area and neither they nor we should undermine the incredibly difficult role of social services personnel.
I was asked various direct questions to which I can respond. The first was from the noble Lord, Lord Ennals, on the data and analysis of cases of sexual abuse round the country. The noble Lord will know that until now such statistics have not been held centrally. However, my right honourable friend announced on 9th July that we would arrange with local authorities for the collection of national statistics on child abuse drawing on the special experience of the National Society for the Prevention of Cruelty to Children in maintaining child abuse registers in various parts of the country. We have sent questionnaires to all local authorities seeking the information and we expect the results to be finalised in the spring of next year. Based on experience with that survey, we intend to introduce an annual statistical return.
Training is obviously very much an issue. Both the noble Lord and the noble Baroness mentioned my right honourable friend's decision not to agree with CCETSW on three-year training. I would point out that once one has read the report in detail, as I perforce have done, one becomes aware that the training that is needed is not basic training but postgraduate training. So I suggest that whether the training is for two or three years is immaterial.
As to multi-disciplinary training, our guidance to authorities stresses the importance of inter-agency multi-disciplinary training for all those dealing with child abuse. We have under way already a number of central initiatives to promote multi-disciplinary training. The 70 per cent. support for the 10 million is a very significant additional sum for social services training which will be used specifically in the child care field.
I should like to add something about research. We have already identified this as a priority theme for research. My department expects to spend a total of £157,200 in 1988 on research into child abuse generally. Almost £90,500 will be spent on two projects concerned only with child sexual abuse; £ 16,000 on a project concerned with physical abuse, and £50,000 on three projects researching both types of abuse.
Not surprisingly, both the noble Baroness and the noble Lord finally concentrated on the Bill to be produced at the first legislative opportunity. I would suggest very gently that there is an enormous amount of reading in the various papers to which I have referred. Perhaps, when those have been assimilated by noble Lords, that will be the time either to discuss a future Bill or, indeed, to arrange for a debate through the usual channels. I must confess that in my view the prognosis of such a matter before the State Opening of Parliament is extremely unlikely.
4.30 p.m.
Lord Elton: My Lords, is my noble friend aware that the words "failure to achieve essential communication and co-operation" are sickeningly familiar'? Some such words have occurred in every case that I am aware of since that of Maria Colwell right up to the case of the death by starvation of a child which was given publicity a few days ago. The communication is not simply between police, health and social services. There are other agencies—voluntary agencies, teachers and others—who have a locus in this, and such communication is exceedingly difficult to administer. I hope that my noble friend will pay close attention to the view of the noble Baroness, Lady Seear, on training, which he has just accepted, and that he will also hear in mind that where matters are as complicated as this it is perhaps advisable not only to train people jointly but also to make sure that one of the trained persons eventually acts as a clearing house for the information of the others. That may well not have been the intention of the setting up of an office of child protection, but it would perhaps put a focus on where matters could be dealt with by a person who viewed every case as urgent even if it did not immediately appear to be so.
Lord Skelmersdale: My Lords, I certainly agree with my noble friend, but the initial responses of the Government to the report as regards training are to be found in the document Working Together, a Guide to Arrangements for Inter-ageney Co-operation for the Protection of Children from Abuse. That covers the statutory agencies. However, I very much take my noble friend's point that there is also a need, as in other personal and social services areas, to involve the various non-statutory organisations. In this case the NSPCC would be one such, but I hasten to say that it is by no means the only one.
Viscount Tonypandy: My Lords, throughout the House there will be noble Lords who are concerned with various children's organisations. It is my privilege to be linked with the National Children's Home. I have not read the report but having listened to the Minister this afternoon I too should like to express deep gratitude to the learned judge and her colleagues. My heart goes out to the people of Cleveland who, I am sure, are no different from those in the rest of the country. They have been singularly unfortunate to have had a shadow cast over them which no other part of the United Kingdom would wish to have. I hope that after a reasonable period, when we have had a chance to consider the report in detail, we shall have an opportunity for debate in your Lordships' House.
Before I resume my seat, I should like to say that if family life is undermined the damage cannot be measured. This is a complicated issue on which there will be many points of view. It is one which cannot easily be resolved—not even by the learned judge. We can only hope to do our best. I join with the noble Baroness, Lady Seear, in expressing the hope that the media will realise that the family unit is essential if we are to maintain our heritage in this land.
Lord Skelmersdale: My Lords, I would certainly agree with the noble Viscount in everything that he has said. Of course the structure of the family is fundamental to society in this country, and the Government will do all in their power to keep it that way.
Baroness Faithfull: My Lords, my colleague social workers throughout the country will welcome the outstanding report made by an outstanding judge. I appreciate that my noble friend the Minister cannot elaborate too much on the Bill which will have to be in the Queen's Speech; therefore, he is in some difficulty. But having read carefully the White Paper on which we hope the Bill will be based, I should like to say, first, that we welcome the whole question of consolidating the 17 Acts of Parliament relating to families and children which will make for clarity and consistency. We welcome the recommendations in the White Paper on the rights of parents which we hope will figure in the Bill. We would also welcome in the Bill the recommendations with regard to the welfare of children.
I should like to raise a point which my noble friend may be unable to answer. The White Paper recommends an emergency protection order, which is an order of' eight days, instead of the place of safety order. I hope that when the Bill is brought before your Lordships' House it will be realised that resources will be needed. Unless the Government are really going to be able to produce the resources to carry out the provisions of the Bill it is rather pointless to introduce it. The eight-day protection order will need more resources. Indeed in social services departments throughout the country resources are needed which are not there at the moment.
Secondly, I wonder whether I might mention to my noble friend the Minister the question of training. He has given outstanding help in the £10 million that will be allowed for the training of those working in child abuse cases. However, if one thinks about it, I wonder whether this is right and sufficient. To train as a doctor, one has a general training and one specialises afterwards. The doctor's training is five years with specialisms afterwards. To train as a nurse, one has a three-year training. To train as a health visitor, one has a further training after that. If one is a teacher, one trains for three years. If one is to specialise in anything, one has a further training after that.
Social workers throughout the years have had a two-year training only. That is to cover not only child care but five different spheres of work, work with the mentally handicapped and the mentally ill, children, the homeless, the elderly and the handicapped. It simply cannot be done. One cannot train for child abuse only. One would not train a doctor to deal with eyes only if he had not had a general medical training. To be effective social workers must have a general training first on general principles and training on specialisms afterwards.
I therefore very much welcome the £10 million that will be given. However, all social workers will be visiting families and, if they have not had a good basic training and specialist training, they will not recognise the cases to refer to the special unit. I think that such cases must be recognised just as a general

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practitioner must be able to recognise specialist problems from his general practice.
I hope that the Government will think again about the three-year training to which the noble Lord, Lord Ennals, referred. It is a serious problem. We are in great difficulties because social workers throughout the years have not been properly trained. To be properly trained they must be trained in the law. This was brought out in the case that Mr. Blom-Cooper investigated, that of Kimberley Carlile. In the days when I trained we had one lecture on law every week for two years. The social work courses up to date have had about three lectures in two years, and that is all. I think that the serious disadvantage of social workers in this respect is not recognised in the country.
For my colleagues, I have to say that they do a magnificent job of work. To keep the situation in perspective, considering the number of children in the country, the number reported to be abused is a small proportion. It is a significant and important proportion, but it is small. I pay tribute to the social workers for the work that they do.
Viscount Davidson: My Lords, I regret having to interrupt my noble friend. I know that this is a subject with which your Lordships are very concerned. We have now spent 30 minutes in discussion on the Statement. Under Standing Orders, discussion on Statements should not exceed 20 minutes. When my noble friend has finished, perhaps we may return to our other business.
Baroness Faithfull: My Lords, I have said all that I wish to say. I want to underline that I hope that the Government will understand the whole position with regard to training and not just with regard to training in one area.
Lord Skelmersdale: My Lords, it is clear from the report that the problems in Cleveland were failures in practice. While I acknowledge some weaknesses in correct child care law, I do not believe that this was the cause of the Cleveland events. With the best will in the world, legislation cannot ensure good practice. However, the current legislation and the guidance published today provide a sound framework for good practice. When my noble friend studies the report, she will find that the learned judge makes reference to the limited knowledge of and access to the law. When the Bill comes forward, I understand my noble friend will look critically at the financial and introductory memorandum.
As to the training of social workers, my right honourable friend has stressed the need for a balanced programme of improvements in social work education and training for all personal social services staff. This includes those without basic training qualifications, those needing further post-qualifying studies, which I mentioned earlier, and those who need to bring their training up to date. The training support programme is a measure intended to contribute towards this balance.
Lord Bottomley: My Lords, as the Member of Parliament for Middlesbrough for 21 years, I know
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from personal experience of the high standards of performance of the National Health Service and of the social services in Cleveland. I could cite many cases of commendation. The same is true of the police. If one bears in mind that over the last five years the National Society for the Prevention of Cruelty to Children has drawn attention to the ever-increasing numbers of child abuse cases, the Government themselves surely cannot be free from criticism for failing to take action earlier.
Lord Skelmersdale: My Lords, I do not think that in the circumstances that is a particularly fair response. The moment that this catastrophic situation came to light my right honourable friend the Secretary of State decided to set up this inquiry. The moment that the report was received, we had arrangements made for it to be printed and presented to both Houses at the earliest possible opportunity. During this time the various publications to which I have referred were prepared, and are being issued today. On this occasion at least. I do not think that comment can be made upon the laxity of government effort.

British Steel Bill
4.47 p.m.
Consideration of amendments on Report resumed.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 2:
After Clause 3. insert the following new clause:
("Articles of Association of British Steel plc.
. The Articles of Association of the successor company shall be as set out in Schedule (Articles of Association of British Steel plc) while the Company is wholly owned by the Crown. and thereafter until altered under the provision of section 9 of the Companies Act 1985").
The noble Lord said: My Lords, in moving Amendment No. 2, I shall speak also to Amendments Nos. 8 to 15.
Amendment No. 2 is to state after Clause 3 that the articles of association should be printed in the schedule. Amendment No. 8 concerns the articles made available by the Government and lodged in the Library of the House. Amendments Nos. 9 to 15 are amendments to the articles suggested by my noble friend Lord Williams of Elvel. Perhaps I may leave aside any question of commenting on his amendments to the articles until he has moved them.
In principle, the articles should be in the Bill. Without the articles of association Parliament does not know what it is doing. It is a criticism of the way that the Bill has been presented, I think, that it has been through both Houses and reached this stage before we have had a chance to see the articles of association proposed by the Government. The noble Lord, Lord Beaverbrook. no doubt recollects that he had a slightly uncomfortable time in the absence of the articles when we discussed the position in Committee. The Committee made it clear that it was essential for the articles to be made available.
In the discussion on Amendment No. 1, reference was made to promises and assurances being given in the prospectus. With such knowledge of the law as I have, I am of the view that whatever is put in a prospectus does not hind the purchasers of the shares. If one wishes a matter to have any binding force at all it has to be in the articles of association.

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Therefore one hopes that the assurances given by the Government as regards Scotland and Ravenscraig will appear in the articles when they come forward. No doubt the Minister will give that assurance.
The fact that the articles should be in the Bill is obvious, because when they are just sitting in the Library of the House the Government can change them at any time before bringing the Bill into force. Therefore, we do not know in this House or in another place what it is that the Government are bringing into effect. I fully accept that in the matter of detail the Government may consider it necessary to amend the articles of association before they put the Bill into effect and create this company wholly owned by the Crown. If that is the position I would have no objection to the Government putting forward an amendment giving themselves power by order to make alterations to the articles of association provided that Parliament has a chance to discuss them. That would seem to be the way to deal with the matter.
I suggest that the articles should be part of the statute as long as the company is wholly owned by the Crown. Without that, we do not know on what basis the company is to be privatised. Amendment No. 2 allows the customary power to shareholders to amend the articles by special resolution. That is the reference to Section 9 of the Companies Act. In those circumstances and without boring your Lordships by reading through the short Amendment No. 8, I move Amendment No. 2.
Lord Williams of Elvel: My Lords, the House will be grateful to my noble friend for moving this amendment. It will be more grateful to him that he has not sought to read out the whole of his amendment; otherwise we might have been here well into the early hours of tomorrow morning. I follow my noble friend in speaking to Amendment No. 2 and Amendments Nos. 8 to 15. These amendments and the amendments I have tabled to my noble friend's amendment, allow us for the first time to duscuss what I regard as being the guts of this Bill. As your Lordships may recall, at Second Reading I said that without the articles of association we could not engage in a proper discussion about what the successor company was meant to be doing.
I repeated that assertion when your Lordships were in Committee on this Bill and a number of noble Lords were kind enough to support that. I am grateful to noble Lords opposite because, as a result, last Friday, 1st July I received from the noble Lord, Lord Beaverbrook, a copy of the draft articles which he, as my noble friend said, placed in the Library. I wholly support my noble friend's thesis as regards the main amendment he is moving, that unless the articles of association of the successor company are in the Bill itself, the Government can change their mind at any time between when the Bill is enacted and the time of vesting.
As we at present have it, Parliament has no right at all to comment upon any change of mind that the Government may have. Of course there is a let-out in my noble friend's Amendment No. 2 once the successor company has ceased to be wholly owned by the Crown. It is then quite proper that the shareholders of the company, as they then will be, should be able to pronounce upon any changes in those articles by the normal resolutions under the
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Companies Act in the manner of shareholders in any public limited company. On the main amendment that my noble friend is moving, he has our wholehearted support.
Your Lordships will see that Amendment No. 8 is a long schedule. In addition to what my noble friend said, I merely add that these are the draft articles produced by the Government. These are not articles drafted by my noble friend Lord Morton of Shuna, skilled as he is in drafting company articles. As I understand from the noble Lord, Lord Beaverbrook, at early stages of the Bill they have been the subject of intense discussion between government lawyers and those of the British Steel Corporation.
In Amendment No. 8 your Lordships have before you today the product of the work of those legal experts. Clearly it will need to be cleaned up before the Bill is enacted. There is a device which lawyers frequently use and it is a perfectly sensible one; that is to have square brackets where the text is not yet finally certain. When the time comes, the square brackets have to be removed and a text, with certainty, has to be produced.
The amendments that I move to my noble friend's amendment are of a more serious nature. I wish to introduce to your Lordships some sub-groupings, because I am speaking to the whole range of amendments. My Amendments Nos. 9 and 10, which your Lordships will find on the last page of this rather long Marshalled List, I shall speak to as one sub-grouping. My Amendments Nos. 11, 12, and 13 I shall speak to next. Amendment No. 14 I shall speak to after that and then to Amendment No. 15.
Amendments Nos. 9 and 10 seek to bring the articles of association of the successor company into line with what I understand to be the stated view of the Government. It was stated by Mr. Kenneth Clarke in a press release dated 17th May 1988 and, though the wording is not quite the same as the press release, it was confirmed in a Written Answer which he gave to a Member of another place. The press release states:
"The Government will hold the "Special Share" for five years from privatization".
I remind your Lordships that this is the first occasion upon which we have the real text of the special share provision. In his Written Answer to a Member of another place, the Chancellor of the Duchy of Lancaster said:
"It is the Government's intention that these arrangements would last for live years from the date of privatization".—[Official Report, Commons, 17/5/88: cols. 383–4.]
Perhaps I may refer your Lordships to page 5(E) of the Marshalled List. I shall read out the text for your convenience:
"The Special Share may be redeemed at par at any time prior to 31st December, 1993 by agreement between the board and the Special Shareholder".
This seems to introduce a new concept which Mr. Kenneth Clarke failed to put before the public and before a Member of another place in his reply on 17th May. Either the Government will hold the special share for five years or they may well, with agreement between themselves and the board of directors of the successor company, have that share redeemed. Those two propositions are not consistent one with another.
Under the articles as we have them in my noble friend's amendment, the special share will allow the

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Secretary of State—I do not mean the Secretary of State in person because I am sure he is an honourable man, but any other Secretary of State to go to the board of the company straight after vesting, and say, "Do we now agree that the golden special share will he redeemed?" If the board and the Secretary of State agree, under the provisions of the articles as we have them the golden share will be redeemed. As I understand it, that is not what Mr. Kenneth Clarke meant when he said:
"It is the Government's intention that these arrangements would last for live years from the date of privatisation".
So my first two amendments, Amendments Nos. 9 and 10, are designed purely to bring the articles of association that we have in front of us into line with what is the Government's stated intention. If the articles are wrong, and if it is not the Government's stated intention to hold this special share for five years, I think your Lordships would wish to know that from the noble Lord the Secretary of State today. If the stated intention is to hold the share for five years, I think your Lordships will agree that my amendments to the articles of association, Amendments Nos. 9 and 10, will be easily acceptable to the Secretary of State as they simply embody what the Government have apparently said.
To date I have simply concentrated on Amendments Nos. 9 and 10 which seek to bring the articles into line with what I believe the Government, if they are not seriously misleading us, have said. I move now to Amendments Nos. 11, 12 and 13. It is an odd proposition that the date on which the special share is to be redeemed should be fixed in time. It is perfectly clear from the way things work that if the articles of association of the company say that on 31st December 1993 the special share will be redeemed, at that point, Article 46, to which I shall come in a moment, falls and at that point the company is available for acquisition by any third party without the protection of the special share and consequential Article 46. That I understand is the intention of the Government.
To put a firm date on this seems to be quite absurd. If there is a date of 31st December 1993 beyond which the ball game is open, any operator will try, prior to 31st December 1993, to accumulate 14.9 per cent. of the company and he will then be in a position to put the company in play as it is known in current jargon. He will have a large shareholding at that point, and when the special share is redeemed he can use that shareholdiong to bargain his way into a takeover. It is a common practice, alas, nowadays, and it would be wrong for your Lordships to ignore it.
The purpose of Amendments Nos. 11, 12 and 13 is not only to ensure that there is a definite five years during which the Government will hold the golden share, but also to ensure that thereafter the redemption of the golden share should be not on a definite date but by agreement between the board and the special shareholder. If the special shareholder and the board agree that an acquisition is desirable in certain interests—we do not know what they will be—the special share can be redeemed and consequential arrangements made.
Amendment No. 14 seeks to provide that, even after the special share is redeemed, Article 46, which
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prevents any individual shareholder from getting more than 15 per cent. of the company, should continue to operate. I have not moved a consequential deletion of paragraph 46(S) on page 22 of the Marshalled List as I do not want to weary your Lordships with too many amendments. We propose that even though the golden share may be redeemed the company should still have the right to activate Article 46. Only if the shareholders decide through a special resolution, which is defined in Section 378 of the Companies Act, to delete Article 46—in other words, 75 per cent. of the shareholders decide that that is the right thing to do—can an acquisition take place.
We have had many debates in the House about the devices used by various companies—in the United Kingdom, Switzerland, the United States and so on—to ensure that if an acquisition is to be made it is made in proper circumstances and with the proper approval of shareholders. I do not seek in the amendments to defy that. I simply say that if British Steel plc's successor company is to be taken over, it should be taken over with the consent of 75 per cent. of its shareholders. That is the thrust of Amendment No. 14.
Amendment No. 15 is a simple one. It seeks to determine that it is the Secretary of State while he is the special shareholder who is reponsible for finding out all the information rather than the board of the company. If the Government are to hold a golden share in the company it is up to them to find out, on the advice of the board and using all the possibilities outlined in the article, who is doing what in terms of concert parties and so on. It should not be left to the board of the company while the Secretary of State is still the special shareholder. After he ceases to be the special shareholder, it will be for the board of the company to take on that responsibility. That is the object of Amendment No. 15.
I have taken this time because, as I said at the outset, this is the first opportunity we have had to debate the golden share, the consequences that flow from its redemption and the abolition of Article 46, which prevents a takeover by a company without the procedures that are triggered by the articles. I hope your Lordships will recognise that I have been moderate in what I have said. I have not tried to introduce new ideas about how the goldern share might operate. At such a late stage in the Bill it is not appropriate for the Opposition to bring forward ideas other than those which are consistent with what the Government are trying to say. I rest my case on Amendments Nos. 9 and 10, which seek to bring the Government into line with what Mr. Kenneth Clarke said on 17th May. I ask the Secretary of State to accept Amendmnts Nos. 9 and 10 in order to avoid the possibility that the Government could been to be misleading Parliament.
Lord Hughes: My Lords, I am certain that what I am about to say will not in any way divert the attention of the Secretary of State from the admirable remarks of my noble friends Lord Morton of Shuna and Lord Williams of Elvel. During the discussion on the previous amendment I spoke about the profits of the British Steel Corporation being in excess of £400

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million. I added that a substantial part of those profits came from disposing of assets in the same way as the Government have been doing. The Secretary of State did not contradict me other than to shake his head.
The shake of his head caused me to look again at today's Evening Standard. I find that I was wrong. I was quoting not from the profit statement of British Steel but from that of British Rail. I therefore wish to take this opportunity to correct a misleading statement and hope that nothing else I said fell into that category.
Lord Ezra: My Lords, the amendment moved by the noble Lord, Lord Morton of Shuna, and supported by the noble Lord, Lord Williams of Elvel, raises some very important issues. The noble Lord, Lord Morton of Shuna, said that so long as the company remains in the ownership of the Government the articles—that is, the conditions under which the company should operate—should form part of the Bill. As he pointed out, there is a risk that if that is not so, then we could be passing a Bill which could become law, and the articles (which lay down the basis upon which the company should operate) could be altered at will. We are entitled to know precisely what the basis is upon which the company should operate so long as it is owned by the Crown. Therefore. I fully support the first contention.
I also support what the noble Lord, Lord Williams, said about the special share. The position as regards the special share should be much clearer than it is. The fact that there is a special share, but that that special share could be done away with at will at any time seems to me to negate the whole principle. The noble Lord, Lord Williams, in his inimitable style, presented some most cogent arguments whereby we should be much clearer about the status and importance of the special share. It cannot be something which is introduced on the one hand and then is capable of being abrogated, at will, on the other hand, so that we would not know where we stand. Thus, on those two issues, I fully support the amendment which has been put forward.
5.15 p.m.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, I am most grateful to the noble Lord, Lord Morton of Shuna, for introducing these amendments. However, I fear that I shall have cause to correct the noble Lord on just one point which I am sure he will regard as merely a point of detail. Careful perusal of Hansard shows that during the Committee stage on the Bill in your Lordships' House there were many who requested that the articles be produced. However, from the record, the amendment was put to the vote and subsequently lost. Nevertheless, I still felt that since there were one or two noble Lords who wished to see the articles that we should have an opportunity to examine them today.
I must start by pointing out that the articles which have been provided are in draft form and will of course he subject to change. They have been drawn up by the corporation and its legal advisers, in
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consultation with my department. With the exception of Articles 5 and 46, which deal with the special share and the limit on shareholdings, the articles are intended to be similar to those of any other large private sector company. Further, I am given to understand that they reflect the best private sector practice of the day.
Articles 5 and 46 are intended to implement the arrangements announced by my right honourable friend the Chancellor of the Duchy of Lancaster in another place on 17th May, to which the noble Lord, Lord Williams of Elvel, referred. Article 46 restricts individual shareholdings in the company to a maximum of 15 per cent. of the equity. That provision is protected by the special share in the company that will be held by the Government under the terms of Article 5. The drafting of these articles is based on the precedent of similar articles used in the case of other privatised companies such as the British Airports Authority.
Before turning to the detailed points made in this debate about the articles (and in particular about the terms of the special share), I should like to respond briefly to the amendment that has led to this debate. The amendment would have the articles of association set out in a schedule to the Bill until after privatisation has taken place. I have to say that that would be unacceptable to the Government. As I have said, the articles at this stage are only a draft. They have for example yet to be submitted to the Stock Exchange for approval prior to the admission of British Steel shares to the official list. It would be an unnecessarily time-consuming and cumbersome procedure if every amendment to the articles had to be cleared by Parliament in the run up to privatisation and could, at an extreme case, lead to privatisation itself being delayed. For the most part, the articles are uncontroversial, and largely a matter for British Steel—and, ultimately, its shareholders. So far as the articles dealing with the special share are concerned, to which I shall turn in a moment, our policy is very clearly on the record, and I believe is reflected in the current draft of the articles.
The noble Lord, Lord Williams, has tabled a number of amendments to the two draft articles that contain the provisions relating to the special share and the limitation on shareholdings. The amendments are largely concerned with the five year time limit placed on the two articles. They would result in the special share and the limitation of shareholdings continuing indefinitely, unless the board of the company consented to the special share being redeemed.
So in considering these amendments, I should like to start by reminding the House that these particular articles place certain rules on the operation of the company which do not in general apply to companies operating in the private sector. Such special rules may, on occasion, be justified, and have been applied, on a case-by-case basis, in a number of previous privatisations. But they should not be imposed lightly. The purpose of privatisation is to put the company on all fours with other private sector companies so far as possible. It would be quite wrong in principle for the Government to retain powers for

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itself over privatised companies without very good reason, merely because there was the opportunity to impose such rules prior to privatisation.
As my noble friend Lord Beaverbrook explained during the debate on this issue in Committee, the Government consider that mergers and acquisitions can exert a beneficial effect, and are inevitable in a competitive economy. Unless the possibility of takeover existed, a company's management could become complacent and inefficient. We recognise that the transition of a nationalised industry to the private sector imposes heavy burdens on management in the early years. That is why we have put in place the time-limited anti-takeover provisions that are being debated today. We do not, however, consider that there is any reason to afford the company indefinite protection from takeover. We judge that five years is adequate. Beyond that time, it should be a matter for the shareholders of the company to judge the merits of any takeover proposal, bearing in mind the performance of the existing management.
I turn now to Amendments Nos. 9 and 10 which are tabled in the name of the noble Lord, Lord Williams of Elvel. The provision that the share may be redeemed early is subject, as the articles state, to the agreement of the Government and the board of the company. The Government's present intention is, as stated, that the special share will remain for five years from the date of privatisation. It is, however, desirable to retain a degree of flexibility in the matter. The board of the successor company may at some time consider it desirable before the end of the five-year period for the special share to be redeemed. For example, to take a fanciful—
Lord Williams of Elvel: My Lords, I am sorry to interrupt the noble Lord. However, how does he square what he is saying now with the detailed press release, which says:
"The Government will hold the "Special Share" for five years from privatisation"?
Lord Young of Graffham: Very simply, my Lords. What we are saying is that the Government will hold the special share from privatisation. All we are doing is giving a certain amount of flexibility if the board deems it desirable to allow—if the noble Lord will permit me to finish the point—a shareholder to hold more than 15 per cent. of the shares. What we want it a flexible future wealth and not an inflexible future wealth. For example, it is quite possible—I presume—as the Government is the holder of the golden share to consent to any takeover within the five-year period; it is not an inviolate bar. That will allow the situation to take place at the request of the board. I believe that that is surely something which all Members of your Lordships' House would accept is a sensible and prudent arrangement in order to allow flexibility for the board of the newly-privatised company—should they so wish it—within the first five years.
As regards the other amendments tabled in the name of the noble Lord, Lord Williams of Elvel; namely, Amendments Nos. 11, 12 and 13, of course
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the date of 31st December 1993 does give any predator the opportunity to build up a holding—should there be such a predator. But the noble Lord, Lord Williams of Elvel, has little confidence in the management of the newly-privatised company always to assume that there are predators about. However, surely any predator can take the date of privatisation, add five to the number of the year, and work out when that five-year period will expire. It will make little difference if we set a certain date in the Bill or if we set five years as being five years from the date of privatisation, assuming of course that there is privatisation within a reasonable period after 1st December 1988.
Lord Williams of Elvel: My Lords, I apologise if I am contravening the rules of Report, but I hope that the noble Lord understands that this is the first time we have had a debate and if I resort slightly to Committee procedures I hope that he will forgive me. Amendments Nos. 11, 12 and 13 are designed to remove that five-year fixed date. It is five years definite and after that it is optional. There is no fixed date before which there could be a removal of the special share.
Lord Young of Graffham: My Lords, I am grateful for the explanation given by the noble Lord, Lord Williams. It removes my final doubt that Amendments Nos. 11, 12 and 13 should be resisted. We have clearly given a five-year period for the board to mark the transition from the public sector to the private sector. After that, it is in the interests of the company and the shareholders to ensure that the possibility of take-over exists for fear, as I have already said, that any company's management in protected circumstances could be complacent or inefficient.
I fear that the noble Lord has related Amendment No. 15 to the wrong definition. He may have intended to relate it to the definition of "a relevant person" on the following page. That is properly a matter for the directors of the company who hold the share register; it is not an issue for the Government. I shall have a more detailed look at that point and write to the noble Lord. I will have a copy of the letter placed in the Library. If the noble Lord wishes to continue with that point and fails to agree with our version, I am sure that we can consider it again.
I hope that in the light of all my comments the noble Lord will withdraw his amendment. If not, I fear that I shall have to ask the House to resist it.
Lord Morton of Shuna: My Lords, it may come as little surprise to your Lordships if I say that I found the amendments tabled by my noble friend Lord Williams to my Amendment No. 8 convincing and that I am minded to accept them.
It is also perhaps of little surprise that I find the Secretary of State's answers wholly unconvincing. I confess that I remain utterly astonished that Parliament agreed to discuss the Bill right through to this stage without seeing the articles of association. It is clear that Parliament was being asked to buy-in a pig in a poke, carefully wrapped up and tied in its sack, and that the Government were determined that we should not see what was happening.

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Now that we have the articles of association, the Government resist the idea of putting them into the Bill so that they can alter them at will. I confess that I find it difficult to understand how, if the Government insist that they will hold a special share for five years, they take power in the articles of association to sell it within 12 hours of the company's formation, which is precisely what 5e of the articles of association does.
The Secretary of State made a valiant attempt to persuade the House that black was white and white was black, and failed utterly. In addition, from the discussion on a previous amendment, it seems that the articles are where the references to the assurances that the Government have given as to Scotland and the obligations to take account of the effect of the steel industry on the economy of Scotland should be place. They are not there. We have had assurances that they will be in the prospectus. I fail to see that the prospectus will bind the shareholders. Without going into Guinness or any of the other undertakings that may have been given, the only way to give effect to those assurances is to put them into the articles of association.
I repeat the submission I made to the House earlier: the articles should be part of the statute so long as the company is owned by the Crown. Nothing that we have heard in any way alters the position I attempted to put, and I press the amendment.
5.25 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 88; Not-Contents, 115.

DIVISION NO. 1

CONTENTS

Airedale, L.

Hatch of Lusby. L.

Amherst, E.

Houghton of Sowerby, L.

Ardwick, L.

Howie of Troon, L

Barnett, L.

Hughes, L.

Bleasc. L.

Irvine of Lairg, L.

Bonham-Carter, L.

Jacques, L.

Boston of Faversham, L.

Jay, L.

Bottomley, L.

Jeger, B.

Broadbridge, L.

Jenkins of Hillhead, L.

Bruce of Donington, L.

Jenkins of Putney, L.

Carmichael of Kelvingrove, L.

John-Mackie, L.

Carter, L.

Kagan, L.

Chitnis, L.

Kennet, L.

Cledwyn of Penrhos, L.

Kilbracken, L.

Davies of Penrhys, L.

Kirkhill, L.

Dean of Beswick, L.

Leatherland, L.

Donaldson of Kingsbridge. L.

Listowel, E.

Dormand of Easington, L.

Lovell-Davis, L.

Elwyn-Jones, L.

McIntosh of Haringey, L.

Ewart-Biggs, B.

Mackie of Benshie, L.

Ezra, L.

McNair, L.

Falkender, B.

Mason of Barnsley, L.

Falkland, V,

Meston, L.

Gallachcr, L.

Molloy, L.

Galpern, L.

Morton of Shuna. L.

Gladwyn, L.

Mulley, L.

Graham of Edmonton, L.[Teller]

Nicol, B. [Teller.]

Oram, L.

Grimond, L.

Parry, L.

Hampton, L.

Perry of Walton, L.

Hanworth, V.

Peston, L.

Harris of Greenwich, L.

Pitt of Hampstead. L.

290

Ponsonby of Shulbrede. L.

Taylor of Gryfe., L.

Prys-Davies, L.

Taylor of Mansfield, L.

Raglan, L.

Underhill. L.

Rea, L.

Wallace of Coslany. L.

Robson of Kiddington, B.

Wedderburn of Charlton. L.

Rochester, L.

Wells-Pestell, L.

Sefton of Garston. L.

Whaddon. L.

Scrota, B.

White. B.

Shackleton, L.

Williams of Elvel, L.

Shepherd. L.

Willis, L.

Stedman, B.

Winchilsea and Nottingham. E.

Stewart of Fulham, L.

Stoddart of Swindon. L.

Winterbottom, L.

NOT-CONTENTS

Abinger, L.

Macleod of Borve. B.

Alport, L.

Malmesbury, E.

Ampthill, L.

Mancroft, L.

Arran. E.

Margadale. L.

Astor. V.

Marley, L.

Auckland, L.

Marsh. L.

Beaverbrook, L.

Merrivale, L.

Belhaven and Stenton, L.

Mersey, V.

Belstead, L.

Middleton, L.

Blatch, B.

Montgomery of Alamein. V.

Blyth, L.

Mottistone, L.

Bolton, L.

Mowbray and Stourton. L.

Borthwick, L.

Moyne. L.

Brahazon of Tara. L.

Murton of Lindisfarne, L.

Brougham and Vaux, L.

Newall, L.

Buxton of Alsa, L.

Norfolk, D.

Caccia, L.

Norrie. L.

Caithness, E.

Orkney. E.

Campbell of Croy, L.

Orr-Ewing, L.

Carnegy of Lour, B.

Pender, L.

Carnock, L.

Pennock. L.

Chelwood, L.

Platt of Writtle, B.

Clitheroe, L.

Plummer of St. Marylebone, L.

Coleraine, L.

Colwyn, L.

Portland, D.

Cornwallis, L.

Rankeillour, L.

Cox, B.

Reay. L.

Craigavon, V.

Rippon of Hexham, L.

Cross, V.

Rodney, L.

Davidson, V. [Teller.]

Russell of Liverpool. L.

Denham, L. [Teller.]

Saint Brides. L.

Derwent, L.

St. Davids, V.

Elliot of Harwood, B.

Sanderson of Bowden, L.

Elliott of Morpeth, L.

Selkirk, E.

Faithfull, B.

Skelmersdale, L.

Fanshawe of Richmond, L.

Slim, V.

Fencers, E.

Somers, L.

Gardner of Parkes, B.

Stodart of Leaston, L.

Glenarthur, L.

Strange. B.

Gray of Contin, L.

Strathcona and Mount Royal, L.

Gridley, L.

Hardinge of Penshurst, L.

Sudeley, L.

Havers, L.

Swansea, L.

Hayter, L.

Swinfen, L.

Hesketh, L.

Swinton. E.

Hives, L.

Terrington, L.

Holderness, L.

Thomas of Gwydir. L.

Hunter of' Newington, L.

Thurlow, L.

Hylton-Foster, B.

Trafford, L.

Johnston of Rockport, L.

Ullswater, V.

Kaberry of Adel, L.

Vaux of Harrowden. L.

Killearn, L.

Wedgwood, L.

Kinloss, Ly.

Westbury, L.

Lauderdale, E.

Wise, L.

Lawrence, L.

Yarborough, E.

Layton. L.

Young, B.

Long, V.

Young of Graffham, L.

Luke, L.

Zouche of Haryngworth, L.

McAlpine of Moffat, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.33 p.m.
Clause 6 [Target investment limit,for Government shareholding]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 3:
Page 4, line 48, at end insert—
("( ) Notwithstanding any of the provisions of this section, the provisions of section 8 of the Industrial Development Act 1982 shall continue to apply.").
The noble Lord said: My Lords, I beg to move Amendment No. 3 standing in my name. In discussion in Committee on Clause 6 we touched on the interaction between the Industrial Development Act 1982 and the Bill which is at present before your Lordships. As a result of that discussion, the noble Lord, Lord Beaverbrook, was kind enough to write to my noble friend Lord Morton of Shuna confirming what he had said in Committee, that the operation of Clause 6 did not vitiate the operation of Sections 7 and 8 of the Industrial Development Act 1982, which would continue to apply.
The noble Lord's letter raised one or two consequential questions and I have therefore tabled an amendment which I ask your Lordships to accept as being of a probing nature. Clause 6, in allowing the Secretary of State to set a target investment limit for the Government shareholding, becomes difficult to operate, as I argued in Committee, when and if British Steel plc, when privatised, wishes to turn to the Government for financial support and wishes that financial support to be given in the form of government subscription to new ordinary shares—in other words, subscription to equity rather than a straightforward loan. I understand from the letter of the noble Lord, Lord Beaverbrook, that this would not be impeded by any measure which is in the present Bill and that, under the Industrial Development Act 1982, the Government would be able to subscribe to shares if the provisions of Sections 7 or 8 of that Act applied in the successor company.
The consequential questions which I have are these. The Industrial Development Act demands the agreement of the company in question. In other words, the Government cannot give financial assistance to a company in difficulties unless there is agreement between the Secretary of State and the company. Yet the Act refers to financial assistance in the form of guarantees by the Government of facilities provided by third parties to give finance, perhaps in the form of the purchase of new ordinary shares.
We therefore have the possibility that an institution—perhaps we should say a bank—might be invited by the company to take up shares, the bank being perfectly properly guaranteed by the Government under the Industrial Development Act. The company and the Government agree that that is the right way to do it. My question is, what then happens if the result is in breach of Article 46 of the Articles of Association which we have just been discussing and the bank ends up with more than 15 per cent. of the company?
A consequential question is, how does the company actually agree to this formula? The
292
Industrial Development Act simply says that there is agreement between the company and the Government. Does that mean that we have to have an ordinary resolution of shareholders? Does it mean that the board has to take powers from shareholders? Does it mean that we have to have some amendment to Article 46, which we know cannot be waived—it either has to be in place or not in place? What are the consequential problems which may arise if British Steel plc, as it will then be, gets into financial difficulties? All things are possible, we can never tell what will happen in this world, so let us suppose that the company gets into difficulties and asks the Government for support and decides that the way which I have just described is the way in which that support should be given. It seems to me that there is an area here which is somewhat less than clear. For that reason I have tabled this amendment. I beg to move.
Lord Young of Graffham: My Lords, I am grateful to the noble Lord, Lord Williams of Elvel, for constructing a rather hypothetical situation, if the noble Lord will allow that description. It provided for an outside body, a bank if you please, secured by a guarantee under the Industrial Development Act. As I understand it, the bank would acquire, directly or indirectly, a number of shares in a company. Then perhaps by virtue of exercising that guarantee it would actually attempt to take ownership of those shares. How would that affect the position, if the shares were more than 15 per cent. of the share capital?
The Government could give its consent as a special shareholder to a holding of more than 15 per cent. If the circumstances—hypothetical as they may be—were as the noble Lord describes, then presumably that guarantee under the Industrial Development Act would have been given with the consent of the Government. No doubt the Government would, in the fullness of time, give its consent to a shareholder for more than 15 per cent. in those circumstances. This is a hypothetical situation. The Government are free to use their powers under the Industrial Development Act 1982 to acquire the share capital, or part of the share capital, of the successor company with its consent. But the significant difference is that in that case it is with the consent of the board of the successor company.
Lord Williams of Elvel: My Lords, the noble Lord has just said that it is with the consent of the board of the successor company. That is the answer to one of my questions: it is not the consent of the company; it is the consent of the board. I hope that I did not misunderstand the noble Lord. The board, of course, is not the company.
Lord Young of Graffham: My Lords, I was describing two hypothetical situations which the noble Lord advanced. I repeat again that they are hypothetical. One was where an outside body, a bank, gave guarantees and as a result of exercising those guarantees it acquired more than 15 per cent. of the shares, or could acquire more than 15 per cent. of

293
the shares. The noble Lord asked me how they could be registered. The answer is that they can only be registered with the consent of the special shareholder.
The other situation occurs under the Industrial Development Act 1982 where the Government would be free to use their powers under that Act to acquire share capital of the successor company with its consent. That is normally taken to be the consent of the board, but it may well be the consent of the shareholders. The Government are not now in the process of renationalising the old privatised industries. I find those circumstances to be somewhat fanciful but, as the noble Lord said, they were hypothetical.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord for what I think is a partial explanation of my problem. I shall read what he has said, and I hope that he in turn will read what I have said. I hope that if the noble Lord has any comments he will kindly let me have them in writing.
I was not suggesting particularly that this Government, with the noble Lord as Secretary of State, would wish to renationalise British Steel unless if found itself in the same position as Rolls-Royce found itself under a previous Conservative Administration. In those circumstances the noble Lord might change his mind. I was simply trying to point up certain problems that arise when legislation is drafted and consequential problems arise as a result of other legislation which has already been passed.
I do not think that this is an easy problem in the way in which the noble Lord seems to think it is. I do not necessarily believe that although the situation is hypothetical at this stage it may not become actuality. As we know, the steel industry is a cyclical industry and will always remain so. But in the light of what the noble Lord has said—I shall want to read rather carefully what he has said in the Official Report—I beg leave to withdraw the amendment.
Amendment, by leave, withdraw.
Clause 7 [Financial structure of the successor company]:
5.45 p.m.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 4:
Page 5, line 1, leave out subsection (1).
The noble Lord said: My Lords, the amendments that I have tabled to Clause 7 are, to a great extent, technical and of a probing nature. I beg to move Amendment No. 4 standing in my name on the Marshalled List. The question of the reserve which is being set up under the Bill has caused a certain amount of comment both in Committee in this Chamber and also in another place. It has been represented that this reserve is analogous to a share premium account. A number of Ministerial statements have been made to that effect.
The share premium account in a public company cannot take revaluation deficits. If property values fall or production lines or plant are written down due to obsolescence or loss of market or for whatever reason, under normal company rules the write-down
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would be charged to revaluation reserve, if there is a temporary loss of value. However, if there is a permanent loss of value it would pass through the profit and loss account: The effect of it passing through the profit and loss account under the Companies Act is to reduce the company's ability to pay a dividend. It cannot pay a dividend until it has cleared up any deficit on its profit and loss account.
I should like the Secretary of State's comments on this. The effect of what the Government are trying to do, as I understand it, is to make sure that even if there is a revaluation of the assets of British Steel and that shows a substantial deficit, calculated we know not how, and that is charged against the reserve, the successor company to British Steel will start off in a dividend paying situation. That is my understanding of what this part of the Bill means. It seems to me rather odd that we should be allowing a revaluation—what amounts to a devaluation—of asset values, writing asset values right down, without that having any consequential effect on the profit and loss as would be the case in any normal public company. For that reason I beg to move the amendment.
Lord Young of Graffham: My Lords, my noble friend Lord Beaverbrook explained in some detail in Committee why a statutory reserve was provided for under subsection (1) of Clause 7. It is required to ensure that the balance sheet of the successor company to BSC balances after the assets and liabilities of BSC have been vested into the new public plc. As the Bill makes clear, it will be equal to the difference between the amount of public dividend capital extinguished under subsection (3) of Clause 2, and the total nominal value of securities issued to the Government under Clause 3.
As your Lordships will be aware, a balance sheet has two sides—on the one hand are the total assets and on the other are the capital and reserves—and the two have to balance. The net assets of British Steel will be unchanged by vesting. All that will be different is the mix of capital and reserves on the other side of the balance sheet—the total of the capital and reserves will remain the same.
The creation of a reserve is inevitable if the balance sheet is to balance. That is because the nominal value of the securities issued to the Government will be less than that of the public dividend capital being extinguished. It is common practice for the sale price of shares to be set at a level significantly higher than their nominal value. For example, it would not be unusual for shares with a nominal value of 25 pence to be sold for £1, and so a company seeking to raise £1 million might issue shares with a total nominal value of only £250,000. In the case of British Steel we shall have to decide, nearer to the time of flotation, what value investors are likely to place on the business, and then how many shares of what nominal value to issue, bearing in mind the price at which we hope to sell them. It is those decisions that will determine the size of the statutory reserve.
The reserve is also necessary during the period in which British Steel remains wholly Government owned, again to ensure that the balance sheet balances. During that period British Steel is likely to

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have only a fairly small amount of share capital until close to the date of privatisation, when further shares may be issued under the provisions of Clause 3 to make up the number that it is decided to sell to investors. Again the balance will be provided by the statutory reserve.
It has not yet been decided whether any revaluation will be undertaken. If it is, as the Government explained when this clause was debated in another place, it is not expected that there will be any material change in the basis on which British Steel's fixed assets are recorded. It is therefore unlikely that the revaluation would have any material effect on its total asset values.
Any revaluation will have to be conducted by professional valuers who will assess the value of all the company's fixed assets to conform with Section 275 of the Companies Act 1985, if it is to lead to an unrealised loss that can subsequently be written off against the statutory reserve. I can assure your Lordships' House that it is not the Government's intention to make large and unjustified write-offs under this provision, as the noble Lord, Lord Williams of Elvel, may fear. Any reduction in asset value is likely to be relatively small and will be fully in accordance with normal accounting procedures. For those reasons I hope that the noble Lord's mind is set at rest.
Lord Williams of Elvel: My Lords, I am grateful to the Secretary of State, particularly for the last 90 seconds of his intervention. For the first few minutes, he simply repeated what the noble Lord, Lord Beaverbrook, said in Committee. If I may say so, I understood what was said at that time because I understand balance sheets and I understand that they must balance.
The point which I believe I succeeded in making to the Secretary of State is that under normal circumstances any revaluation of a nature described in the Bill, if it is a permanent loss in value will go through the profit and loss account and will diminish the ability of the company to pay dividends. It is not a question of a balance sheet; it is a question of where the profit and loss reserve will be. However, I hear what the noble Lord says. He has given us an assurance that revaluation, if that occurs, will not be consequential and will not have a material effect either on the reserve or, were it treated in a proper accounting manner as any plc would have to treat it, a consequential effect on the dividend paying capacity through the company's profit and loss. I shall read what the noble Lord said in the last 90 seconds of his intervention. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 5:
Page 5, line 23, at end insert ("or if the interests of creditors are thereby damaged.").
The noble Lord said: My Lords, this is a technical amendment. Under the Bill as drafted, the Secretary of State has the right to reduce the capital of the successor company by direction. I regard that
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procedure as being parallel to a reduction of capital in a normal plc which is supervised by the courts. Under a reduction of capital which is supervised by the courts, there are measures which are taken to ensure that the creditors of the company are not damaged by the capital reconstruction. There is no such safeguard in the Bill as it is presently drafted. The Secretary of State can write down the capital without regard to the interests of the creditors. It is for that reason that I introduce the amendment. I beg to move.
Lord Young of Graffham: My Lords, the provisions of subsection (2) of Clause 7, to which this amendment would apply, are concerned with the application of the statutory reserve, at the direction of the Government, for two specific purposes. Under paragraph (a) of the subsection, it may be applied in writing off unrealised losses of the company arising from a revaluation of fixed assets. I hope that the noble Lord, Lord Williams of Elvel, will be satisfied on that point. Under paragraph (b) of the subsection it may be applied as if it were profits available for distribution—in other words, it may be, to the extent directed, placed in a revenue reserve.
My noble friend Lord Beaverbrook explained at Committee stage why this provision is in the Bill. So far as the creation of a revenue reserve is concerned, British Steel is now a very profitable company and would have been able to credit its recent profits to a revenue reserve had it been able to carry out the capital reduction provided for under Clause 2 of this Bill at an earlier stage, as a private sector company certainly would have done. As my noble friend said, any revenue reserve authorised under this clause will do no more than reflect the profits the corporation has earned in recent years.
That will have no effect on the position of creditors. The creation of reserves does not affect the amount of the assets of the company. The revenue reserve is not a pool of cash and will not enable the successor company to pay dividends out of capital or borrowing. In any case, that would be illegal under the Companies Act 1985. British Steel will only be able to pay dividends out of cash arising from retained profits. It will be subject to the provisions of Part VIII of the Companies Act like all other Companies Act companies. The provision under subsection (3) of Clause 7 which the amendment relates to is not concerned with the reduction of capital, which comes under Clause 2(1).
Lord Williams of Elvel: My Lords, may I have a clear assurance from the noble Lord that if the Secretary of State directs a reduction in capital, he will do so having regard to the interests of creditors at the time of the direction?
Lord Young of Graffham: My Lords, I have no doubts at all about giving that undertaking.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord. That is the assurance which I sought. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 6:
Page 5, line 24, leave out ("no part or).
The noble Lord said: My Lords, in moving the amendment I shall, with the leave of the House, speak to Amendment No. 7. I am perplexed by Clause 7(4). I understand that it continues the dividend theme. However, the statutory reserve will not, in the language of the dividend rules contained in the Companies Act 1985, be a reserve, the distribution of which is restricted by another Act or clause in the memorandum and articles. There are, for instance, property companies which frequently restrict the treatment of gains in property values by stating that such profits must be transferred to a capital reserve rather than being credited to a profit and loss account and thus made available for dividends.
The reference to the memorandum and articles in the Companies Act which is reflected in the Bill before us is presumably intended to clarify that it would not be possible for a successor company, on its own initiative and by amending its memorandum and articles, to release the statutory reserve for payment of dividend. I hope that my understanding is correct. While removing those restrictions, for reasons which I do not quite understand the clause reimposes another restriction by stating that, to the extent that it is not changed into distributable profit by a specific direction from the Secretary of State, it will be treated as an unrealised profit. I cannot understand why the Government have chosen that particular very convoluted formula to establish what seems to me to be a very simple principle which is enshrined in the Companies Act. I shall be most grateful for any help which the Secretary of State can give me on that matter. I beg to move.
Lord Young of Graffham: My Lords, I shall endeavour to give what help and comfort I can to the noble Lord. Subsection (4) of Clause 7 is a largely technical provision that follows the precedents of previous privatisation Acts. Its purpose is to define how that part of the statutory reserve which is not applied in the ways specified in subsection (2) of the clause is to be regarded for Companies Act purposes.
Section 264 of that Act, in subsection (3), sets out four categories of undistributable reserve—a share premium account; a capital redemption reserve; accumulated unrealised profits so far as they exceed unrealised losses; and any other reserve which a company is prohibited from distributing. Subsection (4) of the Bill specifies that the statutory reserve is, for the purposes of Section 264, to be treated as unrealised profits rather than simply as a reserve that the company is prohibited from distributing.
As I have said, that is in accordance with precedent, and is largely to provide a clear definition of the statutory reserve and the uses to which it can be put. Apart from my power to direct certain applications under subsection (2) that we have just discussed, the reserve is very similar to a share premium account, but offers the additional facility of being able to offset unrealised losses arising, for example, from revaluations.
The statutory reserve cannot, as the noble Lord's amendments suggest, be defined by relation to two
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alternative Companies Act categories at once. But I can assure him that, except to the extent directed under subsection (2)(b) of this Bill, it will be an undistributable reserve falling into subsection (3)(c) of Section 264 of the Companies Act 1985. I hope that in the light of that very clear explanation the noble Lord will feel able to withdraw the amendment.
Lord Williams of Elvel: My Lords, the explanation was extremely clear. It set out what I knew already. The only new element in what the noble Lord has said is that it has happened before and therefore it will happen again. I always take a slightly suspicious view of precedent when it comes to the drafting of new Bills on privatisation.
Before the noble Lord explained it, I understood what the clause said. I remain unconvinced that this is the right way to achieve the objective, and I think that the department ought to have another look at whether this is the right way. It makes all kinds of twists in what I regard as a relatively simple situation. There is no particular difference between me and the noble Lord on this particular issue. However, I have no doubt that he and his officials will read what I have said and I shall read what he has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 to 15 not moved.]

Housing (Scotland) Bill
6 p.m.
Report received.
Clause 1 [Scottish Homes.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 1:
Page 2, line 13, at end insert—
("( ) assessing the extent of the need for, and promoting and developing the provision of, housing for community care throughout Scotland in conjunction with relevant bodies.").
The noble Lord said: My Lords, the purpose of the amendment is to give Scottish Homes a specific strategic or national role in promoting and developing housing for community care projects.
At the Committee stage of the Bill the noble Lord, Lord Sanderson, said:
"We are not arguing that Scottish Homes should not play a part in this. I am arguing on the point that was put to me: that it should play a central role". [Official Report, 25/4/88; col. 86.]
The amendment does not suggest that Scottish Homes should take the overall lead for community care development in Scotland. It recognises that housing is a basic resource necessary for community care. Health and social work services depend on housing as a basic and principal community resource. Scotland, frankly, has a very poor record on developing a co-ordinated and concerted approach to community care. The situation is considerably worse in Scotland than it is in England. The establishment of Scottish Homes gives us the opportunity, which I think we should take, to tackle a part of the problem.
It is extremely important that housing providers should become involved in any national initiatives. Health board and housing authority areas normally do not coincide with both board and individual long stay hospitals covering several district council areas geographically. The world is not a perfect place. It is therefore appropriate that Scottish Homes, which has responsibility throughout the whole of Scotland, should have the role of taking an overview to complement the work of local authorities and health boards merely in order to make them aware of what is required.
It may be that because there is not currently an active housing association in a particular area, local needs are not fully addressed. Local needs are met more in response to the level of activity of local housing associations and voluntary groups than on the basis of an objective overview of an area's housing needs. Such an overview would best be undertaken on an all-Scotland level. We believe that Scottish Homes is an ideal partner to assist the many other bodies involved in the network which is necessary for effective planning of community care.
The amendment is fully supported by a very large number of organisations in Scotland which are involved in community care. I shall not read out the names of all the organisations, but there are about 20 ranging from the Social Services Research Group, Age Concern Scotland, Dr. Barnado's Scotland, the Psychiatric Nurses' Association, Richmond Fellowship, etc.
We are not trying to place a particularly heavy load on Scottish Homes. We are saying merely that it is the body to undertake that role. One of the good things that could come out of the Bill when it becomes an Act would be if there were one body with responsibility for taking an overall view and directing the other bodies into the correct channels to avoid duplication of effort. Perhaps more energy could be put into some of the areas than at present if Scottish Homes took that overall view. I beg to move.
Lord Sanderson of Bowden: My Lords, the amendment was debated in some detail during Committee consideration of the Bill. I am aware of the concern of the Scottish Council for Single Homeless, and others, that the development of community care policies in Scotland should not be ignored by those bodies that are best able to promote those policies.
There is no danger of Scottish Homes ignoring community care. The issue raised by the amendment is whether Scottish Homes should be given a statutory role which would give it greater responsibility for community care than the health and social work authorities.
The noble Lord, Lord Carmichael, talked about a central role. I am afraid that the amendment could not do other than give Scottish Homes a central role. It would be the only agency with a statutory duty of that kind, which would inevitably push it into the lead.
I can assure your Lordships that the Government have every intention of pursuing wholeheartedly the
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care in the community policy which has enabled many people to live within their families and their communities rather than be confined to long term residential establishments. But the factors of primary importance to this policy are the availability of carers in the community and of adequate care support services. In many cases those support services are of a specialist nature. It is therefore important that the policy is co-ordinated by those who are best able to judge and to provide for the needs of the people involved. The health boards and social work authorities have already a sophisticated and effective system of establishing their requirements, in co-ordination with other bodies as appropriate. It would be misguided to force change in that system by making the role of the health and social work authorities subordinate to that of Scottish Homes, as this amendment would undoubtedly do.
The establishment of Scottish Homes, as a single door through which housing inquiries can be made and housing advice given, will be a valuable contribution to this co-ordinated approach to care in the community. But we consider that it is important for the leading statutory responsibility to rest firmly and clearly with the health and social work authorities. It will not assist those who need better arrangements for care in the community to confuse the picture by giving the impression that a housing agency is better placed to bring about improved arrangements than the health and social work authorities.
I hope that the noble Lord, Lord Carmichael, will be assured of the Government's intention that Scottish Homes will play its proper part in community care without the need for specific statutory references, and that he will therefore seek leave to withdraw his amendment.
The Earl of Selkirk: My Lords, if the amendment is withdrawn, will Scottish Homes provide an assessment of the extent of the need—in other words, say what is really needed? Will it give a picture in its annual report of what it considers should further be provided, whether for special care or for other purposes?
Lord Sanderson of Bowden: My Lords, with the leave of the House, the remit of Scottish Homes is very wide. In this particular case we are talking about the problems relating to community care. As the successor to the Housing Corporation, Scottish Homes will have a part to play. Where the Government are at odds with the noble Lord, Lord Carmichael, in respect of this amendment is that we do not believe that Scottish Homes should have a central role.
The Earl of Selkirk: My Lords, my point was simply whether Scottish Homes will make a report as to what is wanted. How many more houses are required, here, there and elsewhere is what people would like to know. Will something of that sort happen?
Lord Sanderson of Bowden: My Lords, again with the leave of the House, we are in the process of setting up Scottish Homes. After the Bill becomes an Act,

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and once it is in being, I am certain that the matter to which the noble Earl, Lord Selkirk, alludes will be one of its priorities.
Lord Carmichael of Kelvingrove: My Lords, I am most grateful to the Minister for that reply and even more grateful to the noble Earl, Lord Selkirk, for pointing out the approach that Scottish Homes could give. I think that it is not like any other body that has ever been established, which is something of which I am sure the Minister is proud. Scottish Homes has a special role, in that it will be the one body outside the local authorities which will know exactly what is happening in Scottish housing. I hope therefore that, when it is set up, it will take on that social responsibility that we spoke of in the debate on British Steel earlier today and that it may widen its sphere. I think that it will need to build up its reputation, which may prove very important to it.
I was also interested when the Minister spoke of the idea of having a single-door approach. I think it should be on the record that we hope that Scottish Homes will ultimately become a single-door approach. I know of social workers in Scotland who spend all day for several days on the telephone trying to obtain accommodation for individuals. It would be wonderful if, incidental to their major job, there was the way of simply approaching Scottish Homes.
I hope that between the noble Earl, Lord Selkirk, the Minister and myself we have been able to lay down some aims for Scottish Homes which it may find itself only too pleased, in the nature of its work and in order to improve its image, to implement or at least to investigate. Therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [General functions of Scottish Homes]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 2:
Page 4, line 19, at end insert—
("( ) Section 71 of the Race Relations Act 1976 (local authorities: general statutory duty) shall apply to Scottish Homes as it applies to a local authority.").
The noble Lord said: My Lords, Section 71 of the 1976 Race Relations Act places local authorities under a statutory obligation to carry out their duties with regard to the need to eliminate unlawful discrimination and to promote equality of opportunity and good relations between persons of different racial groups. The Government agree wholeheartedly with the terms of this section and consider that the new housing agency, Scottish Homes, should be subject to the same provisions. I commend this amendment to your Lordships and I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I am most grateful to the Minister for having tabled this amendment and for taking on the duties that are already on the shoulders of local authorities. Perhaps in Scotland we pretend that we have better community relations than in fact is the case. There are, however, great hopes in that direction. I myself had a constituency with a very mixed community
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whose origins lay in all parts of the world and all parts of Scotland. I can assure the Minister that it is very important that in this respect we continue to do everything we can and do as much as possible by statute. Statutes make that much easier what is perhaps the most important function in this field—convincing people and educating their minds. I am very pleased that the Minister has seen fit to include this provision in the Bill.
Lord Hughes: My Lords, as we are discussing Clause 2, I notice that subsection (1) states that:
"Scottish Homes may do anything, whether in Scotland or elsewhere, which is calculated to facilitate or is incidental or conducive to the discharge of its general functions".
and at the end of the clause it is stated in subsection (10) that:
"The Secretary of' State may give Scottish Homes directions".
If it should prove desirable to do something along the lines which my noble friend Lord Carmichael sought to do in the previous amendment, on which the noble Earl, Lord Selkirk, intervened, and if it proved necessary to draw attention to community care, would it be possible for the Secretary of State to handle this matter under those two provisions of Clause 2?
Lord Sanderson of Bowden: My Lords, with the leave of the House, we have spoken earlier this afternoon about the powers of the Secretary of State to intervene. In this case I am perfectly certain that, if he felt strongly that Scottish Homes was not carrying through one of the main objectives—for instance that community care was falling by the wayside and something of a policy nature had to be undertaken—the answer would undoubtedly be yes.
Lord Hughes: My Lords, I am grateful to the Minister.
On Question, amendment agreed to.
6.15 p.m.
Clause 4 [Regulation of housing associations in Scotland and transfer to Scottish Homes of certain property, rights, liabilities and obligations of Housing Corporation]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 3:
Page 5, line 27, after ("with") insert ("—
(a) ").
The noble Lord said: My Lords, in moving Amendment No. 3 I should like also to speak to Amendment No. 4. These amendments have been tabled to correct an omission and are principally of a technical nature.
The Bill as it stands transfers to Scottish Homes all rights, liabilities and obligations relating to registered housing associations to which the Housing Corporation is entitled or subject, in cases where an association is based in Scotland.
However, the corporation also has certain obligations in relation to land held by unregistered housing associations and these obligations should

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also be transferred to Scottish Homes in cases where the land is in Scotland. These amendments will have that effect. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 4:
Page 5. line 28. after ("applies") I nsert (": and
(b) land in Scotland held by unregistered housing associations:).
On Question, amendment agreed to.
Clause 16 (Security of. tenure):
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 5:
Page 10, line 40, after first ("subsection") insert (", subsection (1) of section (Right of succession of spouse) below.").
The noble Lord said: My Lords in moving Amendment No. 5, I should like to speak also to Amendments Nos. 18 and 20, the latter amendment having been tabled by the noble Lords, Lord Carmichael of Kelvingrove and Lord Morton of Shuna.
When we introduced this Bill we felt that succession rights, like other terms of a tenancy, should be left to be negotiated between the tenant and the landlord. We still hold that to be the right approach in general, and I am sure that many landlords letting on an assured tenancy will be ready to include such terms in their leases.
However, the Government have listened very carefully to the arguments of noble Lords, Members in another place, and other individuals and organisations, that the spouse of a tenant is in a particularly vulnerable position following the death of the tenant. That is why, as I announced during our debate in Committee, we are providing a statutory right of succession in those circumstances. The right is limited, and I should explain to your Lordships three important characteristics.
First, it will only apply when the spouse was occupying the house as his or her principal home immediately before the death of the tenant. Secondly, normally, of course, if someone inherits a tenancy the landlord will be entitled to invoke Ground 7 of Schedule 5 to gain possession of his house following the tenant's death. But when a spouse succeeds to the tenancy, either under this new provision, or by the will or intestacy of the tenant, Ground 7 will not be available for use.
Finally, the right of succession by the spouse will be limited to the spouse of the original tenant rather than the spouse of someone who had, himself or herself, succeeded to a tenancy. This limitation is necessary to ensure that the landlord does not find his property being passed on several times because surviving spouses re-marry.
The Government believe that this new provision for succession by spouses improves the Bill through recognising in a fair and reasonable way the rights of both landlords and tenants. The amendment in the names of the noble Lords opposite would extend succession to assured tenancies too far, and I must say to the noble Lord, Lord Carmichael, that I
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cannot support it. I hope that the noble Lords, Lord Carmichael of Kelvingrove and Lord Morton of Shuna, will feel able to withdraw it. That is for them to decide, but I hope that your Lordships will agree that the Government's approach, in trying to reach a fair result, strikes the right balance. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, we could not but be grateful to the Minister for at least extending the right of succession to the spouse, although it was an appalling omission from the Bill originally. The idea that the spouse is vulnerable is a matter of which we are all very much aware but I think that our Amendment No. 20 extends just a little further the statutory right of succession from an assured tenant to a member of the tenant's family who has been living with the tenant in cases in which there is no spouse who could succeed. The new clause is based largely on the existing legislation of the Housing (Scotland) Act 1987, which limits succession in the public sector including housing association tenancies.
I must emphasise that the effect of our amendment is to allow one succession and one only. We accept that there will still be difficult cases. We accept the Minister's point that succession could go on indefinitely if it were merely a question of the spouse remarrying. We are not suggesting that. We believe that would be wrong. However, in allowing that position, there might be one or two difficult cases. We are concerned with one succession only to an assured tenancy. Our amendment would allow the right of succession to the spouse in the first instance, but, if there is no spouse, to a member of the tenant's family who has lived with the tenant for a year preceding the tenant's death.
This amendment will not alter the principle of a single succession which has been accepted by the Government. But it will enable other close relatives of a tenant to benefit from the peace of mind which the Government—quite rightly, and I think very humanely—acknowledge as desirable at the time of a tenant's death.
It would be quite inappropriate to guarantee a statutory right of succession to spouses of tenants but not, for example, to brothers or sisters. We all know of families where unmarried brothers and sisters live together for many years. The Minister is suggesting—though I am sure his heart is not so hard—that, if one of them dies, the other be turned out into the snow. I hope that the Minister will be able to push what he has given us that little bit further. We are not saying that there should be another step in the tenancy. We are saying that, if the spouse dies, there should be a succession to the remaining spouse and that, if the close relative of the family is the successor, he or she should be given the tenancy and it should then stop. There is no attempt to try to move it on. It stops at that point, no matter what happens.
I hope that the Minister will take this issue on board. If he cannot do so now, pehaps he can consider it again. We have the privilege in this House that further consideration can be given at Third Reading.
Baroness Fisher of Rednal: My Lords, I rise to support my noble friend. There is a point that one has to consider. Very often a son or daughter will have been living at home. First the mother dies. Then the father dies. This person will have been caring for an elderly parent for a considerable number of years. He or she may have given up many opportunities of working and have become a full-time carer for his or her elderly parents. Does that mean that on the death of the last parent there will be no chance of succession for that person? He or she will have saved the local authority or hospital service, or whatever it may be, a great deal of money by caring voluntarily for parents in the proper way that we all like to think children do. We should like to understand that such people will have a succession to the tenancy after such service.
Baroness Carnegy of Lour: My Lords, the noble Baroness, Lady Fisher, is describing a scene which occurs quite often. However, as I understand the amendment of the noble Lord, Lord Carmichael, someone could move in a year before the tenant died and could inherit the lease. Was it for one year?
Lord Carmichael of Kelvingrove: My Lords, only once would someone be able to move in, and that would be it.
Baroness Carnegy of Lour: My Lords, I thank the noble Lord. I understood that. It seems absolutely admirable and necessary that the spouse should be able to inherit. That is a different issue altogether. However, for somebody to be able to move in for one year and then to have the tenancy for the whole of his or her life—which could happen very often—frees the position too much and militates against what the Bill is trying to achieve. It is going too far. One has to draw the line somewhere.
From the point of view of a caring son or daughter who is living with the parents, he or she will know that that is the position. They will not be surprised by it. It will be quite plain that that is the position. In a more open market,which we hope we shall gradually develop, it may be possible to negotiate a new lease of the same house.
I believe that the line is drawn in the right place. I know that it has never been the view of the party of the noble Lord to see the position in that way, and it is a legitimate point of view. However, in the context of what this Bill is trying to achieve, for the spouse, but not the children to be able to inherit is the correct position. I hope that the amendment will not be pursued.
Lord Morton of Shuna: My Lords, I hope that the remarks of the noble Baroness will be read widely in Scotland. The number of children, especially women, who look after aged parents for years and who, under this Bill and the provision that the noble Baroness supports, would be thrown out—is tremendous. I hope that what the noble Baroness has said will receive wide publicity.
Lord Hughes: My Lords, the second part of Amendment No. 20, which my noble friend has spoken to refers to,
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"where the tenancy was held jointly by two or more individuals, a surviving tenant where the house was his only or principal home at the time of the tenant's death".
Obviously, if the joint tenants are husband and wife, on the death of one of the joint tenants, the spouse's right would cover that. But it is not uncommon for a house to have been occupied for many years by two spinster sisters. They are joint tenants. Do I understand that the effect of the amendment proposed by the noble Lord, Lord Sanderson, would mean that the second sister would not have the assured tenancy which she had enjoyed jointly with the sister during these preceding years?
Lord Howie of Troon: My Lords, I was greatly impressed by the remarks of the noble Baroness, Lady Carnegy, when she drew attention to the possibility of people moving in and then obtaining a tenancy. It seemed that she was right in suggesting that there was a problem there which somewhat weakens the amendment of my noble friend. However, his amendment refers to a member of the family moving in. It is not just anybody moving in. That puts a gloss on the matter which is totally different from what the noble Baroness, Lady Carnegy, was saying.
I am sure that my noble friend Lord Carmichael has the right position in essence. Whether he is right in detail on the point raised I am not sure. But it is certainly wrong that someone in the second generation beyond the spouse who has for a lengthy period regarded as his or her home a house held on a tenancy should be seriously deprived in this way. This is something which cannot merely he left to the bargaining of the market. I do not think that that is right. I believe that my noble friend's amendment ought to be accepted in general terms. If there are details in it which are not quite right they could be ironed out. As my noble friend said, there is Third Reading to come. At Third Reading a compromise situation could be arrived at which would give justice to this second generation without distorting entirely the principle of the Bill.
Lord Mackie of Benshie: My Lords, I merely wish to say that I thought the noble Lord, Lord Carmichael, said it all and did the right thing when he suggested that the onus of consideration of this situation of two sisters or a devoted daughter who may have been there for a long time should be thrown at a sympathetic Minister who is doing rather well in listening to the Opposition. I believe that is right and I am content to leave the matter to the Minister.
Lord Kirkhill: My Lords, I confine my intervention to one remark. The noble Baroness, Lady Carnegy, alleged that my noble friend Lord Carmichael, although his point of view was tenable, had drawn the line at the wrong point. The Government's position draws the line in the wrong place and is another example of the thrust of this Administration: their sheer lack of compassion and humanity is a diabolical disgrace to a civilised community. This is another example of it.
6.30 p.m.
Lord Sanderson of Bowden: My Lords, with the leave of the House I should like to reply to some of those remarks. I had thought that in Committee the importance had been recognized—as indeed the noble Lord, Lord Carmichael, recognized—of the amendments that were put forward. As the noble Lord, Lord Kirkhill, will know, as regards rented accommodation one has to seek a balance. There is nothing to stop succession, as was referred to, such as two sisters or a brother or a sister living together, being written into a tenancy agreement. As my noble friend Lord Selkirk said at Committee stage, it is up to the Government to publicise the new rules on tenancy. That is indeed the Government's priority. There is nothing to stop a joint tenancy agreement being written—an agreement between the landlord and the tenant—which answers the point of the noble Baroness, Lady Fisher, about a joint tenancy agreement with another member of the family.
In answer to those various points, there is a remedy to the undoubted fear that some noble Lords opposite have that the ground is shifting too much. I must say that there is an answer to which we shall come later. The Government have accepted that a written lease is important and the terms of the written lease are most important. Indeed, that will answer the fears that have been expressed, particularly by the noble Lord, Lord Hughes, in this debate.
Lord Carmichael of Kelvingrove: My Lords, from our point of view it would be silly to vote down this amendment in case we were not able to win Amendment No. 20, which I feel sure the House will be sufficiently kindhearted enough to support. I propose that we accept this amendment with the opportunity of voting later on Amendment No. 20.
On Question, amendment agreed to.
Clause 17 [Fixing of terms of statutory assured tenancy]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 6:
Page 11, line 16, after ("below") insert ("in the prescribed form").
The noble Lord said: My Lords, in moving Amendment No. 6 I also speak to Amendment No. 10 which is in similar terms.
Clauses 17, 24 and 31 all allow for applications to be made to the rent assessment committee. Clauses 17 and 24 apply to statutory assured tenants, and Clause 31 to short assured tenants. However, as currently drafted only Clause 31 specifies that applications to the committee should be in a form prescribed by regulations. In order to make it easier for tenants and landlords to know how to go about submitting an application, we believe that it would be helpful to set out in regulations the details required under Clauses 17 and 24 as well. I hope that your Lordships agree. I beg to move.
On Question, amendment agreed to.
Clause 19 [Notice of proceedings for possession]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 7:
Page 13, line 28, at end insert—
("(7) A notice under this section shall cease to have effect 6 months after the date on or after which the proceedings for possession to which it relates could have been raised.").
The noble Lord said: My Lords, this is a relatively straightforward amendment designed to ensure that both tenant and landlord are clear that when a landlord gives notice that he intends to seek possession, he must then apply to the court under that notice within a reasonable period of time. When this issue was discussed in another place. my honourable friend, the Scottish Office Minister for Home Affairs and the Environment explained that, normally, the Government would expect notices of proceedings for possession to lapse in any case after a time, since the circumstances giving rise to them would have ceased to apply. However, on reflection we have concluded that it is better to provide in the Bill for a fixed time limit. This will ensure that landlords are not misled into thinking that a notice served some time before can be relied on to raise proceedings at a much later date; and it will also give tenants certainty at any given time about whether they may face proceedings.
We have set the limit at six months from the earliest date on which proceedings could be raised. This is the same as the limit applying to notices served on public sector tenants under Section 47 of the Housing (Scotland) Act 1987. Effectively it means a maximum lifespan for a notice of eight months, since a period of two months or two weeks, depending on the ground for possession specified in the notice, must elapse before proceedings can begin.
I should like to draw your Lordships' attention to the fact that it is true that a landlord could issue a series of notices, and so, as it were, keep a tenant under constant threat of proceedings. But, if a landlord is so minded, at least this amendment puts him to the trouble of issuing a notice every six months. It would not be possible simply to prohibit the issue of a new notice, because there are many circumstances in which issuing a new notice would be perfectly reasonable—for example, if the tenant falls again into rent arrears, or indeed in general where a ground for possession applies, ceases to apply, then comes to apply again.
I hope nevertheless that your Lordships will agree that this amendment does improve the tenant's position even slightly and therefore deserves support. I beg to move.
Lord Morton of Shuna: My Lords, the difficulty has been pointed out by the Minister that the notice can be given by the landlord time and time again on whatever specious grounds he may put it. Therefore he can threaten the tenant all the way through by always having a notice available. There are landlords who are not quite as straightforward as I have no doubt the Minister would be if he were a landlord, but we have to deal with that situation. Therefore, I hope that the Minister will look again at this to see whether he can tighten up the amendment so that the

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landlord's right to serve a notice expires at six months on that ground and he has to start again on a new ground with a new notice. I believe that could be done by careful drafting and I hope that the Minister will consider that again.
Lord Sanderson of Bowden: My Lords, with the leave of the House, I can say that I am prepared to look at this. I understand exactly what the noble Lord. Lord Morton of Shuna. is attempting to achieve. I shall certainly look at it in that way and if there is any way of tightening it up I shall certainly see whether we can oblige.
On Question, amendment agreed to.
Clause 20 (Extended discretion of court in possession claims):
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 8:
Page 14. line 3, leave Out ("rights of occupation under-) and insert ("occupancy rights under section I or 18 or).
The noble Lord said: My Lords, in moving Amendment No. 8 I shall also speak to Amendment No. 9. During the Committee stage of the Bill, my noble friend Lord Selkirk, having in mind the ease of use and clarity of the Bill, tabled an amendment designed to make more specific the reference in Clause 20 to the Matrimonial Homes (Family Protection) (Scotland) Act 1981, by identifying the particular sections of the Act which confer occupancy rights.
I agreed at the time to give consideration to the matter and I have concluded that the Bill should be amended along the lines he suggested. Amendment No. 8 therefore introduces a reference to Sections I and 18 of the Act. They are the only two sections which need to be mentioned as they are the only two which confer occupancy rights. I am grateful to my noble friend for his suggestion.
Amendments Nos. 8 and 9 replace the term "rights of occupation", which is an English term, with "occupancy rights" which is a Scottish term. I am sure that your Lordships will approve the step to protect the integrity of Scottish legislation. I beg to move.
The Earl of Selkirk: My Lords, I should like to thank the noble Lord because he has done a great deal for the Bill. This House has done far more for the Bill than the other place was able to do. For that reason, I believe that we should warmly thank the noble Lord for the attention that he has given to the remarks that we have made in this House.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 9:
Page 14, line 12, leave out ("rights of occupation") and insert ("occupancy rights").
On Question, amendment agreed to.
Clause 24 [Increases of rent under assured tenancies]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 10:
Page 15, line 29, after ("committee") insert ("in the prescribed form).
The noble Lord said: My Lords, I beg to move this amendment. It was spoken to with Amendment No. 6.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 11:
Page 15. line 33. leave out subsection (4) and insert—
("(4) Where a notice is served under subsection (1) above but the rent under the tenancy has previously been increased (whether by agreement or by virtue of a notice under subsection (1) above or a determination under section 25 below) the new rent shall take effect not earlier than the first anniversary of the date on which that increase took effect.").
The noble Lord said: My Lords, this amendment is designed to plug a loophole in Clause 24. As it currently stands, Clause 24(4) allows a landlord to serve a notice proposing an increased rent only once every 12 months. This was intended to ensure that rent increases under this procedure could be obtained only once a year.
On reflection, the Government have decided that it is more straightforward to make that intention explicit, instead of relying on a control over the issue of notices. That is what the amendment achieves, and I commend it to your Lordships.
On Question, amendment agreed to.
Clause 25 (Determination of rent hr rent assessment committee]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 12:
Page 16. line 19. at end insert—
("(3A) Where any rates in respect of the house concerned are borne by the landlord or a superior landlord, the rent assessment committee shall make their determination under this section as if the rates were not so borne.").
The noble Lord said: My Lords, in moving the amendment, I should also like to speak to Amendments Nos. 15 and 22. The Government are now working on the basis that Part II of the Housing (Scotland) Bill may come into force well before 1st April 1989, when domestic rates are to be abolished. From that date of the coming into force of Part II of the Bill the standard form of new letting for private sector rented housing will be the assured tenancy or short assured tenancy.
However, as currently drafted, there are no references in the Bill to rates. The possible earlier introduction of Part 11 means that some references to rates are necessary. They are important in relation to the provisions concerning the determination of rents by the rent assessment committees. Amendment No. 12, which introduces new subsection (3)(a), requires the rent assessment committee to make its determination of a market rent, exclusive of rates. That is in line with practice under the existing rents

311
legislation and ensures that a tenant will not find himself paying an element attributable to rates after domestic rates are abolished.
Amendment No. 15 ensures that during the period up till 1st April 1989, a tenant whose rent has been determined by a rent assessment committee may also he required by his landlord to pay the rates for the house. I hope that your Lordships will support the amendments. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 13:
Page 16, line 19, at end insert—
("(3B) in any case where—

(a) a rent assessment committee have before them at the same time the reference of a notice under section 17(2) above relating to a tenancy (in this subsection referred to as "the section 17 reference") and the reference of a notice under section 24(1) above relating to the same tenancy (in this subsection referred to as "the section 24 reference"); and

(b) the date specified in the notice under section 17(2) above is not later than the first day of the new period specified in the notice under section 24(1) above; and

(c) the committee propose to hear the two references together,
the committee shall make a determination in relation to the section 17 reference before making their determination in relation to the section 24 reference and, accordingly, in such a case the reference in subsection (1)(b) above to the terms of the tenancy to which the notice relates shall be construed as a reference to those terms as varied by virtue of the determination made in relation to the section 17 reference.").

The noble Lord said: My Lords, in most cases where a rent assessment committee is asked to make a determination of a market rent for an assured tenancy under Clause 25 it will be quite clear what tenancy terms should be taken into account under Clause 25 (1)(b). However, it is possible that at more or less the same time as a tenant is seeking a rent determination from the rent assessment committee either the tenant or the landlord may have referred proposed and disputed changes in tenancy terms to the rent assessment committee under Clause 17. Obviously it makes sense for the committee to hear the two references together.
In such cases, the committee should resolve the issue of what variation in tenancy terms is appropriate before considering the level of market rent to be determined. Therefore the amendment makes it clear that whatever notice is received first, the committee should first determine the terms of the tenancy and that the subsequent rent determination should take account of the revised terms. It is arguable that this could be left to common sense; but, on balance, we believe that it is better to have the position on the face of the Bill so those who are involved are clear from the outset. With that brief explanation I commend the amendment to your Lordships. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 14:
Page 16, line 20, leave out ("(2)") and insert ("(1)").
The noble Lord said: My Lords, Amendment No. 14 corrects an error of drafting. A reference under
312
Clause 25(4) should be a notice served under "Section 24(1)" and not "Section 24(2)". I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 15:
Page 16, line 22, after ("committee") insert ("(together with. in a case where subsection (3A) above applies, the appropriate amount in respect of rates)").
The noble Lord said: My Lords, I spoke to this amendment when speaking to Amendment No. 12. I beg to move.
On Question, amendment agreed to.
6.45 p.m.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 16:
Before Clause 27, insert the following new clause:
("Prohibition of premiums etc. on assured tenancies.
. Sections 82, 83 and 86 to 90 of the Rent (Scotland) Act 1984 (which make it an offence to require premiums and advance payment of rent in respect of protected tenancies and make related provision) shall apply in relation to assured tenancies as they apply in relation to protected tenancies (including protected tenancies which are regulated tenancies), but with the following modifications—

(a) section 83(5) shall not apply; and

(b) section 88(1) shall apply as if for the references to 12th August 1971 there were substituted references to the date of commencement of this section.").

The noble Lord said: My Lords, Amendment No. 16, is the new clause which I am proposing. It has a similar aim to that proposed in the name of the noble Lord, Lord Mackie of Benshie. It is to continue the prohibition on charging premiums in connection with residential tenancies in Scotland which has effectively been in force since 1920.
During the Committee stage I was impressed with the obvious strength of feelings among your Lordships in respect of this issue. It is in response to that and to other representations that we have received from a wide range of opinion throughout Scotland that we are bringing forward the amendment. It applies the relevant provisions in Part VIII of the Rent (Scotland) Act 1984 to assured tenancies in addition to regulated tenancies. We believe that this is the right way to achieve our aim. Prohibition on premiums for regulated tenancies is well understood and so it seems sensible to us to continue the same arrangements for the new assured tenancies.
The amendment tabled in the name of the noble Lord, Lord Mackie of Benshie, appears to have the advantage of simplicity, but it would not fully achieve its purpose. Although it would make it unlawful to charge a premium, it does not define what is a premium nor does it prescribe any penalty for a landlord who charges a premium. Therefore, I hope that your Lordships will agree to the Government amendment, and that the noble Lord will be prepared not to pursue his amendment. I beg to move.
Lord Mackie of Benshie: My Lords, I am grateful to the Minister for producing what he says is a better amendment. I am sure that he is right. It is an

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example of how he should always continue to improve our amendments. He has done extremely well and we are grateful for that.
The Earl of Selkirk: My Lords, I should like to ask whether this is the final death of key money.
Lord Taylor of Gryfe: My Lords, I recall that in Committee I moved an amendment similar to that tabled by the noble Lord, Lord Mackie. I should like to take the opportunity of echoing the sentiments of the noble Earl, Lord Selkirk, in so far as the Minister has listened to the argument and made an appropriate amendment. I am sure that it will be welcomed by all the bodies in Scotland which made representations to me and to the Minister. I appreciate it.
Baroness Carnegy of Lour: My Lords, the Scottish Council for the Single Homeless was kind enough to write to me about the matter. I believe that it represents the interests of a number of other bodies. Although the amendment is somewhat different from that which it was backing —that of the noble Lord, Lord Mackie—I am sure that it will be most pleased to find that key money will be illegal.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 17:
After Clause 28, insert the following new clause:
"Duty of landlord under assured tenancy to provide written tenancy document and weekly rent book.
.—(1) It shall be the duty of the landlord under an assured tenancy (of whatever duration)—

(a) to draw up a document stating (whether expressly or by reference) the terms of the tenancy;

(b) to ensure that it is so drawn up and executed that it is probative or holograph of the parties; and

(c) to give a copy of it to the tenant.

(2) On summary application by a tenant under an assured tenancy, the sheriff shall by order—

(a) where it appears to him that the landlord has failed to draw up a document which fairly reflects the existing terms of the tenancy, draw up such a document or, as the case may he, adjust accordingly the terms of such document as there is; and

(b) in any case, declare that the document (as originally drawn up or, where he has drawn it up or adjusted it, as so drawn up or adjusted) fairly reflects the terms of the assured tenancy;

and, where the sheriff has made such a declaration in relation to a document which he has drawn up or adjusted, it shall be deemed to have been duly executed by the parties as so drawn up or adjusted.
(3) A tenant shall not be required to make payment in respect of anything done under subsection (1) above.
(4) Where, under an assured tenancy, rent is payable weekly, it shall he the duty of the landlord to provide a rent book.
(5) A rent book shall contain such notices which shall be in such form and shall relate to such matters as may be prescribed and otherwise shall comply with such requirements as may he prescribed.
(6) If, at any time, the landlord fails to comply with any requirement imposed by or under subsections (4) or (5) above he and any person who on his behalf demands or receives rent in respect of the tenancy shall be liable, on summary conviction, to a tine not exceeding level 4 on the standard scale.
(7) Where an offence under subsection (6) above committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or a person purporting to act in any such capacity, he, as well as the body corporate. is guilty of an offence and liable to be proceeded against and punished accordingly.").
The noble Lord said: My Lords, during the Committee stage of our deliberations I announced that we would bring forward an amendment on Report to ensure that tenants under assured tenancies are entitled to a written tenancy document setting out the conditions applying to the tenancy. This new clause fulfils that commitment and also provides that, if under an assured tenancy rent is payable weekly, then the landlord must provide the tenant with a rent book.
I am sure that this new clause will meet with your Lordships approval. In an ideal world there would, I suggest, be no need for legislation to make it a duty on a landlord to provide a written document. As my noble friend Lady Carnegy said during the Committee stage, most responsible landlords would provide a written statement as a matter of course. However, as has been stressed by many organisations concerned with housing matters, and some noble Lords, not every private landlord is as responsible as he should be, and therefore the Government agree that there is a need to make it clear that a landlord has a duty to provide the tenant with a written statement of the terms of the tenancy which will he drawn up at no cost to the tenant. This provision will give private sector tenants a similar right to that of public sector tenants.
Although the right to a written statement of the terms of the tenancy— which will include rent —should provide adequate protection for tenants, the Government have also given further consideration to the question of rent books. Again, there has been a strong body of opinion that tenants should have the added protection of a rent book recording the amounts of rent they had paid. On reflection we have decided that there is a good case for giving the right to a rent book to the same group of tenants who are so entitled under the existing Rent Act; namely, those who pay weekly. Subsection (4) to (7) of the new clause provide that right.
I hope your Lordships will find this new clause acceptable. I beg to move.
Lord Morton of Shuna: My Lords, I rise only to say that we are very grateful. It is an almost unique experience in this Government to find a Minister who is prepared to listen and then act on what he has listened to. It is a very encouraging habit.
Lord Hughes: My Lords, I agree with the remarks of my noble friend Lord Morton of Shuna and I hope that it does not have the effect of making the Minister an endangered species.
The Earl of Selkirk: My Lords, when one talks of a written lease, does that also include the legal terms of the lease; that is, the whole question of succession? Will that be included in the lease or will it be left out?
Lord Sanderson of Bowden: My Lords, with the leave of the House, we are talking about the actual written document between landlord and tenant. However, I feel I should explain the matter as I know of my noble friend's interest. We have not required the landlord to give the tenant a written lease but a document setting out the terms of the tenancy.
If we required a written lease to be provided for every assured tenancy, there would be a danger that an unscrupulous landlord—and unfortunately there are some—would deliberately fail to provide a written lease and, as a result, the tenancy would be void and the tenant would lose the protection, particularly the right to security of tenure, provided by the Bill. I believe the approach in the new clause avoids this potential difficulty. I hope that that explains to my noble friend why we are formulating the clause in the way in which we have. I feel that that is essential.
As to the wider question of succession, we shall be talking about that under Clause 43 and Schedule 6 and trying to write the relevant matters into the Bill in as plain English as we can. Subsequent to that, we hope to be able to provide guidance to people in a form which they can readily understand, and we shall widely publicise that.
Lord Carmichael of Kelvingrove: My Lords, I apologise to the House for rising at this late stage in the Bill. The noble Earl, Lord Selkirk, raised a point to which the Minister replied. My memory is that often conditions were written onto the rent hook, and that raises the question of whether there is a definition of a rent book. I have seen some fairly tatty rent books bought in a corner shop which gave no feeling of security to the tenant. Those circumstances could apply to the type of person about whom the noble Lord was talking and who it is important to catch. Perhaps some thought could be given to that matter.
The Earl of Selkirk: My Lords, I raise this matter because many tenants will not have read this statute and have no idea what is an assured tenancy. I believe that that should be communicated to them and the place in which to do that is either the rent book or some other document which is to be drawn up.
Lord Sanderson of Bowden: My Lords, perhaps I may say to my noble friend that the document will include the terms of the tenancy including any matter relating to succession, which I believe was the point he was making.
Lord Taylor of Gryfe: My Lords, this amendment deals with the important question of tenants' rights. Your Lordships may recall that in Committee an amendment was moved in relation to the publicity and explanations which would be given to the public so that they may understand their rights under this Bill.
We did not table an amendment today but we emphasised that this is a complex Bill. It involves new relationships in this sphere and we in this House find it difficult to understand all its implications. We asked for assurances from Ministers that citizens' advice bureaux, which give a great deal of advice in this area, could be adequately staffed and financially supported so that tenants understand their rights under the Bill. At this stage I would welcome an assurance from the Minister that the matter of tenants' rights will be communicated to the people in
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Scotland who are affected by this legislation so that they understand it. I further hope that advice through the CABs and other channels will be discharged effectively.
Lord Sanderson of Bowden: My Lords, with the leave of the House, this is a very important point whether those concerned are citizens' advice bureaux, Scottish Homes or whatever. The Government are well aware that tenants' rights are a very important aspect and are not always understood. They are sometimes deliberately misunderstood and particularly by some landlords, as we have said, as to what the assured tenancies will be. I give the noble Lord my assurance that the Government are well aware of this matter and that it is necessary to explain, once the Bill has become an Act, what has happened so that everyone understands what are their rights.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 18:
After Clause 28. insert the following new clause:
("Right of succession of spouse.
.—(1) in any case where—

(a) the sole tenant under an assured tenancy dies; and

(b) immediately before the death the tenant's spouse was occupying the house as his or her only or principal home; and

(c) the tenant was not himself a successor as explained in subsection (2) or (3) below,

the tenant's spouse shall. as from the death and for so long as he or she retains possession of the house without being entitled to do so under a contractual tenancy, be entitled to a statutory assured tenancy of the house.
(2) For the purposes of this section, a tenant was a successor in relation to a tenancy—

(a) if the tenancy had become vested in him either by virtue of this section or under the will or intestacy of a previous tenant; or

(b) if he was a statutory assured tenant by virtue of section 3A of the Rent (Scotland) Act 1984; or

(c) if at some time before the tenant's death the tenancy was a joint tenancy held by him and one or more other persons and, prior to his death, he had become the sole tenant by survivorship; or

(d) in the case of a tenancy hereinafter referred to as ("the new tenancy") which was granted to him (alone or jointly with others) if—

(i) at some time before the grant of the new tenancy he was, by virtue of paragraph (a), (b) or (c) above, a successor to an earlier tenancy of the same or substantially the same house as is let under the new tenancy; and

(ii) at all times since he became such a successor he has been a tenant (alone or jointly with others) of the house which is let under the new tenancy or of a house which is substantially the same as that house.

(3) No order for possession under Ground 7 of Schedule 5 to this Act shall be made—

(a) in relation to a case to which this section relates by virtue of subsection (1) above; or

(b) where the tenant's spouse succeeds to the tenancy under the will or intestacy of the tenant.

(4) For the purposes of this section a person who was living with the tenant at the time of the tenant's death as his or her wife or husband shall be treated as the tenant's spouse.").
On Question, amendment agreed to.
[Amendment No. 19 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 20:
After Clause 28, insert the following new clause:
("Passing al assured tenancy.
.—(1) On the death of a tenant under an assured tenancy, the tenancy shall pass by operation of law to a qualified person, unless—

(a) there is no qualified person, or the qualified person declines the tenancy under subsection (4); or

(b) the tenancy is terminated by operation of subsection (5).

(2) For the purposes of this section, a qualified person is—

(a) a person whose only or principal home at the time of the tenant's death was the house and who was at that time either—

(i) the tenant's spouse; or

(ii) living with the tenant as husband and wife; and

(b) where the tenancy was held jointly by two or more individuals, a surviving tenant where the house was his only or principal home at the time of the tenant's death;

(b) where there is no person falling within paragraph (a) or (b), a member of the tenant's family who has attained the age of 16 years where the house was his only or principal home throughout the period of 12 months immediately preceding the tenant's death.

(3) Where there is more than one qualified person, the benefit of the provisions of q subsection (1) or, as the case may be, of subsection (6) shall accrue—

(a) to such qualified person; or

(b) to such two or more qualified persons as joint tenants. as may be decided by agreement between all the qualified persons or failing agreement within 4 weeks of the death of the tenant, as the landlord shall decide.

(4) A qualified person who is entitled to the benefit of subsection (1) may decline the tenancy by giving the landlord notice in writing within 4 weeks of the tenant's deah, and—

(a) he shall vacate the house within 3 months thereafter;

(b) he shall be liable to pay rent which becomes due after the said death only in respect of any rental period (that is to say, a period in respect of which an instalment of rent falls to be paid) during any part of which he has occupied the house after the said death.

(5) An assured tenancy which has passed under subsection (I) to a qualified person shall not, on the death of a tenant (or one of the joint tenants) so pass on a second occasion, and accordingly the assured tenancy shall be terminated when such a death occurs; but the provisions of this subsection shall not operate so as to terminate the assured tenancy of any tenant under a joint tenancy where such a joint tenant continues to use the house as his only or principle home.
(6) Where an assured tenancy is terminated by operation of subsection (5) and there is a qualified person, he shall be entitled to continue as tenant for a period not exceeding 6 months on terms agreed between himself and the landlord.").
6.58 p.m.
On Question, Whether the said amendment (No. 20) shall be agreed to?
Their Lordships divided: Contents, 67; Not-Contents, 97.

DIVISION NO. 2

CONTENTS

Airedale, L.

Dean of Beswick, L.

Ardwick, L.

Dormand of Easington, L.

Avebury, L.

Ewart-Biggs, B.

Blackstone, B.

Falkender, B.

Blease, L.

Falkland, V.

Blyth, L.

Fisher of Rednal, B.

Brooks of Tremorfa, L.

Fitt, L.

Bruce of Donington, L.

Gallacher, L.

Carmichael of Kelvingrove, L.

Galpern, L.

Carter, L.

Graham of Edmonton, L. [Teller.]

Cledwyn of Penrhos, L.

Cocks of Hartcliffe, L.

Grey, E.

Davies of Penrhys, L.

Grimond, L.

318

Harris of Greenwich, L.

Oram. L.

Hatch of Lusby, L.

Parry, L.

Houghton of Sowerby, L.

Peston, L.

Howie of Troon, L.

Pitt of Hampstead, L.

Hughes, L.

Ponsonby of Shulbrede, L.[Teller.]

Irving of Dartford, L.

Jay, L.

Robson of Kiddington. B.

Jeger, B.

Serota. B.

Jenkins of Hillhead. L.

Shackleton, L.

Kilbracken, L.

Stedman, B.

Kirkhill, L.

Stewart of Fulham. L.

Lloyd of Hampstead, L.

Stoddart of Swindon, L.

Longford, E.

Taylor of Gryfe. L.

Lovell-Davis, L.

Taylor of Mansfield, L.

Mackie of Benshie, L.

Underhill, L.

McNair, L.

Wallace of Coslany. L.

Masham of Ilton. B.

Walston, L.

Mason of Barnsley, L.

Whaddon. L.

Morton of Shuna. L.

White. B.

Mulley, L.

Willis, L.

Murray of Epping Forest, L.

Winchilsea and Nottingham, E.

Nicol, B.

NOT-CONTENTS

Abinger, L.

Lauderdale. E.

Ampthill, L.

Layton, L.

Arran, E.

Lindsay. E.

Ashbourne, L.

Lindsey and Abingdon, E.

Astor of Hever, L.

Long, V.

Beaverbrook, L.

Lucas of Chilworth, L.

Belstead, L.

Lyell, L.

Blatch, B.

Macleod of Borve, B.

Borthwick, L.

Marshall of Leeds. L.

Boyd-Carpenter, L.

Merrivale, L.

Brabazon of Tara. L.

Mersey, V.

Broxbourne, L.

Mowbray and Stourton, L.

Butterworth, L.

Murton of Lindisfarne, L.

Caccia, L.

Nelson, E.

Caithness, E.

Newall, L.

Cameron of Lochbroom. L.

Norrie, L.

Campbell of Croy. L.

O'Brien of Lothbury, L.

Carnegy of Lour, B.

Orkney, E.

Cathcart, E.

Orr-Ewing, L.

Coleraine, L.

Oxfuird, V.

Cowley, E.

Pender, L.

Cox, B.

Platt of Writtle, B.

Craigavon, V.

Rankeillour, L.

Cross, V.

Redesdale, L.

Cullen of Ashbourne, L.

Robertson of Oakridge, L.

Davidson, V. [Teller.]

Rodney, L.

Denham, L. [Teller.]

Saltoun of Abernethy, Ly.

Dilhorne, V.

Sanderson of Bowden. L.

Dundee, E.

Selkirk, E.

Elliot of Harwood, B.

Sharpies, B.

Elliott of Morpeth, L.

Slim, V.

Elton, L.

Stodart of Leaston, L.

Faithfull, B.

Strange, B.

Fortescue, E.

Strathclyde, L.

Gainford, L.

Strathcona and Mount Royal, L.

Gardner of Parkes, B.

Glenarthur, L.

Sudeley, L.

Goold, L.

Swinfen, L.

Gray of Contin, L.

Swinton, E.

Greenway, L.

Teviot, L.

Gridley, L.

Thomas of Gwydir. L.

Hacking, L.

Torrington, V.

Havers, L.

Trafford, L.

Hesketh, L.

Trefgarnc, L.

Hives, L.

Vaux of Harrowden, L.

Holderness, L.

Windlesham, L.

Hylton-Foster, B.

Wise, L.

Kaberry of Adel, L.

Young of Graffham, L.

Kinnaird, L.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Dundee: My Lords, your Lordships may feel that we have reached a suitable moment at which to break with a view to returning to the

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business not before 8.5 p.m. If so, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Antarctic Treaty (Agreed Measures) (No. 2) Order 1988
7.6 p.m.
Lord Glenarthur Lord Glenarthur rose to move, That the draft order laid before the House on 16th May be approved [26th Report from the Joint Committee].
The noble Lord said: My Lords, this order is made under Section 6 of the Antarctic Treaty Act of 1976. The Joint Committee on Statutory Instruments has considered the order and it received the approval of another place on 17th June.
Your Lordships will be aware of the many unique life forms existing in Antarctica, but less well understood is the fragile nature of the Antarctic environment. For this reason we attach importance to maintaining a proper balance between the interests of those scientists and tourists who work in and visit that beautiful continent while at the same time providing the maximum protection for the delicate eco-system.
The Antarctic Treaty Act 1967 is concerned with giving effect to measures agreed by the contracting parties to the Antarctic Treaty, measures which are designed to protect Antarctic flora and fauna from unnecessary human interference. These agreed measures have been amended so as to oblige participating governments to prohibit entry by their nationals without a permit into any designated specially protected area.
This amendment has been reflected by the amendment to Schedule 2 to the Act made by Article 2 of the Antarctic Treaty (Agreed Measures) Order 1988, which came into force on 22nd April. The purpose of the order which is before us now is to give effect in our law to the prohibition required by this amendment. It specifies the necessary new offences under the Act and the maximum penalties that may be imposed in each case.
Article 3 of the draft order will make it an offence for a British national to enter into a specially protected area without a permit. Specially protected areas are those designated as such by orders in council under Section 7 of the Act. Seventeen such areas are at present so designated. Article 4 makes provision for the issue of permits authorising British nationals to enter specially protected areas and makes it an offence to fail to comply with the reporting requirement imposed by a permit or to make a false statement in a report in pursuance of such a requirement. Article 5 specifies a maximum fine of £400 on summary conviction of an offence under Articles 3 or 4. Since 1961 the contracting parties to the Antarctic Treaty have collaborated closely to develop effective and adequate environmental safeguards for Antarctica. A responsible attitude towards the environment is one of the tenets which underpin the Antarctic Treaty
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system and one which this order will reinforce. I commend it to your Lordships and I beg to move.
Moved, That the draft order laid before the House on 16th May be approved [26th Report from the Joint Committee].
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord for his explanatory introduction to the debate.
We welcome and support the order. While it is a very short order, it is also part of a structure of international laws and agreements that have profound implications for the world, and especially for this country and others who have subscribed to those laws. The implications are both scientific and political, and they are far-reaching. The Falklands conflict gave us a taste of some of the political aspects, and the debates among scientists and others about the stratospheric ozone layer and the ecosystem generally have taught us that it is essential for all countries to show a healthy respect for the Antarctic and not to exploit it for short-term material gain or territorial aggrandizement. I do not pretend to be an expert upon the subject, but I have read the treaty and looked at the relevant Acts. I am glad that my noble friend Lord Shackleton, who is an acknowledged expert, is present and proposes to speak in the debate.
The countries that subscribed to the Antarctic Treaty have worked closely together to develop proper safeguards for Antarctica. We passed the 1967 Act referred to by the Minister as part of this cooperative effort. We also followed the very important meeting that took place in Wellington, New Zealand, with great interest. The objective of that meeting is an Antarctic minerals regime, and differing views have been expressed about it. On the one hand Mr. Marshall, the New Zealand Foreign Minister, has said that the aim is not to open up the continent to mining but to fill a gap in the 1959 treaty, which declared Antarctica a demilitarised and non-nuclear zone but which did not prohibit prospecting and mining. On the other hand environmental groups are arguing that a convention would allow commercial exploitation of the Antarctic. They fear that oil, gas and minerals will be mined very soon. We know that Britain was represented at the conference in Wellington. I understand that our representatives made a valuable contribution to the debate. Perhaps the Minister can give us a synopsis of that view and tell us what procedures will follow agreement at Wellington. I assume that there will be legislation in every one of the 37 countries and the need for ratification of the convention.
These therefore, are early days, but we must be sure that we are on the right track. Our own record in the observation of international treaties is a good one, but there are countries that are not quite so fastidious. The fear of course is that a breach by one country could lead to a scramble.
The Economist of 28th May said that, while the present system has worked,
"it is showing signs of strain. The region's commercial potential is gradually becoming apparent and conflicts of interest are stirring. To prevent these shattering the treaty, its signatories are trying to devise means of sharing out Antarctica's spoils without awakening nationalistic claims".

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Those are very disturbing words. I shall be glad to have the noble Lord's reaction to them.
The order is a step in the right direction, but it is modest and one wonders how it would stand against a powerful multinational combine—it would not worry about a fine of £400! I hope that I am being less pessimistic than realistic, and I think that thus far things have gone reasonably well, but the crucial moment will come in 1991 when the treaty comes to be reviewed.
A leading article in The Times on 6th June discussed the pros and cons of the position. It thinks that
"prospecting for oil and minerals will no doubt take place".
It goes on to say that the most important safeguard included in the convention is that of "good housekeeping". It also refers to the fear of the environmentalists that the world's "last great wilderness" will be polluted. The environmentalists want to see the whole continent preserved as a world park out of bounds to commercial activity. There are strong arguments for that. The leader's final words are worth quoting:
At present the Antarctic is virtually untouched by direct pollution. This makes it a unique laboratory for the study of the world's atmosphere. Such a laboratory may be crucially important for future generations of scientists. It is irreplaceable and must not be spoiled. To the extent that the new Antarctic mining convention commits a group of nations to making that less likely, it is a considerable achievement".
We can agree with those words, but also hope that the final sentence is not too optimistic.
I think that, in view of this country's close involvement we should in due course have a full debate on the Antarctic and all its problems. In the meantime, we support the order.
7.15 p.m.
Lord Shackleton: My Lords, I am grateful to the noble Lord, Lord Glenarthur, for his short but well-informed introduction. I hope that he will give us some more information when he replies.
I support my noble friend, Lord Cledwyn of Penrhos. I think that I should correct him on one point, which the Minister perhaps can confirm. The Antarctic Treaty is not up for renewal in 1991. As I understand it—and experts no doubt will be able to inform the noble Lord—it is open for members to ask for amendments or indeed even to ask to withdraw. However, if my recollection is correct, they cannot withdraw for two years. In any case, the treaty is virtually a perpetual treaty. if a number of countries sought to pull out, of course, that would have a serious effect on what is undoubtedly the most successful international territory treaty in my lifetime.The Antarctic Treaty is a great triumph. It is nearly 40 years, I think, since I wrote an article saying that the Antarctic ought to be internationalised and come under the UN—because we believed in the UN in those days—and that it would be a good practice for when man went into space.
The Antarctic Treaty—I shall not spend too long talking about it—has been very successful in many ways. This order and the accompanying order that does not require parliamentary sanction are a step in the right direction. I should like to ask the Minister some questions about this.
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The areas marked for protection are very few—although I am not complaining—only 13 or maybe 17. I have not put them all on a map. The majority seem to be in the Antarctic peninsula area where the British, Argentine and Chilean claims are located. There are some over on the east—Ross Island and so on. There will of course be a need for many more.
I am not an Antarctic man—if anything, I am an Arctic man. I spent many months in the Arctic, which we must not forget is an area that also needs good conservation. I was lucky to go to the Antarctic. There are a number of areas of complete fascination like the dry valleys where there is no snow at all in the summer and little lakes that are frozen. One in particular, Lake Vanda, thaws for a while. It is very cold at the top, but that does not stop the British having a Lake Vanda swimming club, although the temperature at the bottom of the lake is something like 25 degrees centigrade for reasons that I have never quite discovered. I should have thought that practically the whole area ought to be marked a conservation area, if only because there is a little band of moss running below the glacier. Indeed, to put it delicately, one is unable to perform one's natural functions in the area for fear of pollution.
It is very interesting to note the importance which is attached by scientists to the preservation of this area in pristine beauty. It is already subject to some pollution, and I fear it may continue, regardless of what is done in the Antarctic unless the world is able to do more about it. I should be interested if the noble Lord could expand a little upon these special areas and whether there is a need for wider areas, larger than the present ones, which will be protected in one form of another. As I understand it, these areas may occur anywhere, including the Australian and New Zealand sections. British nationals will be forbidden to go into an area in any other territory, whether or not we have claimed it. I do not believe that we shall ever make good our claims. There is one area where there is no national claim at all. I have been unable to look at a map but some of the special zones are liable to occur there.
This is a measure both of the value of the Antarctic and of the quality of the work that the British have done out there. The work is something of which this country can be completely proud. We are grateful to the Government for the support they have given to British Antarctic Surveys. I am even prepared to give praise to the Prime Minister who has taken an interest in this area. British Antarctic Surveys are undoubtedly the most cost-effective of all the scientific bodies that operate there.
This treaty and its operation depend a great deal upon that work and also upon the Polar region section of the Foreign and Commonwealth Office. I have spoken with some of the international scientists involved like Mr. Beeby and others who are full of praise for the work of people like John Heap, who is himself an Antarctic man, and others.This is a matter that I wish to put on the record because I believe it to be extremely valuable.
I am tempted to follow my noble friend in discussing the minerals regime. I am not sure that I shall be in order, but it is relevant. I believe the

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minerals regime is a good one. I do not believe that it will be possible—this is my personal aim—for anyone effectively to carry out mineral exploration in the near future in the Antarctic. I agree with my friend Peter Scott. I should like 100 years at least of protection for the Antarctic. I should also like it to be a permanently protected area. The question is, what is the art of the possible in all this? I believe that the critics have been unfair to the provisions of the Antarctic treaty. It will be a great deal more discouraging for dangerous multinationals to go effectively into the Antarctic area.
What is important is that there should be continued scientific work, that it is properly controlled and does not pollute. Non-scientists are not alone in causing damage and pollution. Here again the standards of the British Antarctic Surveys are very important. I hope the noble Lord will comment on the Antarctic treaty. It is a subject that we ought to discuss at some stage. There is criticism that the advisory committee does not carry a total veto. Who would expect such a committee to do so? I hope that those who believe that it is important to conserve the Antarctic will support practical measures.
One of the troubles as regards the Law of the Sea Convention, which alas we still have not signed, is that the regime was an almost unworkable one. I did not mind it being unworkable. It is a great pity. There is more to be gained in the Antarctic area in the surrounding seas, and by wholehearted support of the Law of the Sea, than simply protection on land of the islands and the mainland. I believe this order to be important and useful. It is one that we shall wish to continue to monitor and I hope that the noble Lord will be able to provide a little more information. I envisage thousands, if not millions, of specially protected areas in the Antarctic unless we can establish a more firm and general agreement between the nations.
It is worth remembering that 60 to 70 per cent. of the consultative members comprise not just the Western countries, but the Soviet Union, Poland, China, India and the South American countries. Also a number of members are fully able to take part in and listen to the discussions upon the minerals regime though their signatures are not relevant. I strongly support this order and I congratulate those who are responsible for it.
The Viscount of Falkland: My Lords, we on these Benches welcome this order with enthusiasm. We wish to echo the remarks made by the noble Lord, Lord Shackleton, that a great deal of praise must be directed at the Government for their enthusiasm in taking part in the international efforts to preserve this unique part of the world. In Antarctica some 10 per cent. of the earth's surface provides an extraordinary and unique environment, with the very special role that it plays in the ecology of the world. At first sight it appears to be somewhat restrictive. Any scrutiny will show that this is a very valuable order concerned with preserving the beauty and the flora and fauna of one of the few areas of the globe untouched by man.
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I suppose that it will be viewed as a small measure; but nevertheless we consider it a very valuable one when added to some of the other protective measures passed over the years such as the agreed measures of 1964, with attempts to regulate the environmental nature of human activity in Antarctica. In addition there was the Convention for the Conservation of Antartic Marine Living Resources, with its concern for the eco-system as a whole.
We are particularly concerned with the protection of wildlife. The unique environment of Antarctica must be a priority. The order specifically refers to Section 7(a) of the Antarctic Treaty Act 1967, part of which is concerned with seals which are totally protected by the agreed measures. I need not stress that we are also concerned with other animals and wildlife, particularly birds such as the albatross, penguins, petrels, skuas and fulmas. We also welcome the recognition that this order gives to the specially protected areas where vehicles cannot be driven and where plants cannot be collected. We also welcome the fact that where entry is restricted, it is further enforced by this order. In this way insensitive human impact on the unique eco-system of Antarctica is to be limited.
Where areas are declared as specially protected, they should remain so and not be redesignated as less restricted sites of special scientific interest where human interests often clash with environmental ones. On these Benches we are much concerned, as your Lordships will know, with the ecology of the planet as a whole. We feel that we must go all out to protect the fragile environment. We are very heartened to see that in the press the attention of the public is being drawn more and more to the very fragile state of the environment of our planet.
Where rare plants and animals thrive, human activity must be looked at most carefully where it appears to be invasive and destructive, particularly to an area like Antarctica with the implications of interference on the biosphere of the earth as a whole. The depletion of the ozone layer over the Continent is now receiving much publicity. This is a further indication of the importance of Antarctica's preservation. So as a general principle, tourism, scientific research and mineral exploitation—in fact, all activity, including, as the order specifies, the movement of humans in Antarctica—must be carefully regulated.
There is certainly a case, as Greenpeace has suggested, for declaring the continent an Antarctic world park, with strict regulation, or for the development of an Antarctic conservation strategy, as recommended last May by the European Parliament's Committee on the environment, public health and consumer protection.
In conclusion, we feel that Antarctica cannot be viewed—and is not viewed, as people become better educated about this astonishing area covering some 13 ·5 million square kilometres—as a barren, cold, ice-covered area but as an area where wildlife, flora and fauna flourish. Its role in the regulation of heat exchange and the circulation of atmospheric and marine currents is absolutely vital. In this context its preservation is paramount. We welcome the order with enthusiasm.
7.30 p.m.
Lord Glenarthur: My Lords, I am most grateful to those noble Lords who have spoken on the order, and for their encouraging welcome to it. Only a month or two ago I was in New Zealand where I was briefed for the first time on Antarctica. The place has not ceased to fascinate me ever since. There was enormous interest in the work of the noble Lord, Lord Shackleton, and all that his father did there.
Perhaps I may deal first with the points raised by the noble Lord, Lord Cledwyn. The order before us is not directly concerned with the minerals convention which was taking place while I was in New Zealand. The order is concerned with the control of trespassers. Designated specially protected areas enjoy special protection in the minerals convention which is something rather different.
I very much agree with the noble Lord, Lord Shackleton, that future exploitation of Antarctic minerals is a pretty speculative matter. It will not be practicable in the foreseeable future. Views may differ but that is the general opinion among those who are involved in it. Negotiation of the minerals convention is driven by foresight and the need to put environmental and other controls in place before activity, whether economic or otherwise, takes place and before the technical feasibility is developed to take advantage of any resources there may be. The convention has removed the last serious risk of tension within the Antarctic treaty system. We would expect all parties to abide by international obligations, but until the convention comes into force there is a moratorium on any commercial minerals activity.
I can confirm to the noble Lord, Lord Cledwyn, that legislation would be required in the United Kingdom and almost certainly in all other Antarctic treaty states. The convention is now being studied. If the Government decide on ratification, it is unlikely that the parliamentary process will begin before the spring of next year. This will provide an opportunity for debate. Although the noble Lords, Lord Shackleton and Lord Cledwyn, have suggested an alternative time, I suspect that that may prove a good opportunity when it reaches us. Any debate will be a matter for the usual channels, but I certainly note the interest which the noble Lord expresses.
Although it is slightly wide of the topic, the minerals convention is a significant development. It adds to the protection of Antarctica and ensures that the peace of the past 30 years will continue. It reduces the likelihood of significant change to the Antarctic treaty after 1991.
There are 17 designated specially protected areas at present. Three of the previously designated areas have been redesignated as sites of special scientific interest and are no longer covered by the Act. I disagree with the noble Viscount, Lord Falkland, when he suggested that they were of a lower order. They are a particular category where scientific experiment rather than flora or fauna requires attention. It is not true to say that they form a lower order. It is just a different means for a different purpose.
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Specially protected areas are generally adopted by the Antarctic treaty on advice of scientific experts of the International Scientific Committee on Antarctic Research. No more are likely to be added at present. I suspect that the noble Lord, Lord Shackleton, has a list of them. They are set out in Annex B of the 1967 Act, as amended by a number of other orders. I do not think the noble Lord will wish me to give a full list because apart from anything else the list sets out a good many latitudes and longitudes which might be rather wearisome to read out.
I am grateful to the noble Lord for the tribute that he paid to the British Antarctic Survey. I agree that it is a most worthwhile body. It does a great deal of work, and from what I have heard it is held in high regard internationally among others who carry out research in that part of the world. I am grateful too for his tribute to the polar region section within the Foreign and Commonwealth Office.
The noble Lord, Lord Shackleton, was quite right when he spoke about the Act itself. It is based on nationality, not on territoriality. This therefore covers the unclaimed sector and elsewhere as regards British nationals. Parts of the dry valleys are designated SSSI. There are more than two dozen at present, which goes some way to showing that a good deal of the area is protected. The suggestion by the noble Viscount of a world park to some extent mirrored the remarks of the noble Lord, Lord Shackleton. It is an interesting concept. There are those who feel that it is based more on emotion than on a rational scientific and political approach. There is some doubt that it would be clearly enough defined or even that it would be widely enough respected. There would be no bar to unilateral exploitation, as I understand it. Against this background, we and our treaty partners opted to develop an internationally-recognised and acceptable system of conservation measures which we believe will he the most practical and effective way of protecting Antarctica's environments and resources.
The noble Viscount also referred to the effect of tourism on the environment. Any individual scientist, tourist or explorer is free to visit Antarctica provided that his respective activities are consistent with the objectives of the Antarctic treaty. However, people are responsible for their own safety and protection and they are also responsible for the protection of the environment. A heavy burden lies upon them. The position is regularly discussed under Antarctic treaty auspices.
The treaty provides for review after June 1991 if requested by a consultative party. Review is not an automatic requirement, and we have no plans at present to seek one. The 14th consultative meeting of treaty parties took place in Rio de Janeiro last October. It was one of the regular biennial series of meetings to consider the Antarctic housekeeping affairs—for example, to monitor and regulate man's impact on the environment— and agreement was reached on key environmental impact assessment procedures.
What I have said broadly covers the main points which have been raised. I agree with all those who have spoken about the importance of this part of the

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world. It is an area in which many of us take a keen interest because it has not been exploited in the way that so many other areas have. I am grateful for the welcome that has been given to the order.
On Question, Motion agreed to.

Education (Assisted Places) (Amendment) Regulations 1988
7.41 p.m.
The Earl of Arran The Earl of Arran rose to move, That the draft order laid before the House on 13th June be approved [29th Report from the Joint Committee].
The noble Earl said: My Lords, the assisted places scheme was established in 1981 for the purpose of widening the educational opportunities of able children from less well-off families. It provides their parents with assistance towards the fees of some of the best independent schools in the country. The assistance is on a sliding scale depending on parental income, and the amending regulations before your Lordships are mainly concerned with the annual revision of those scales.
In the past we have also taken this opportunity to make various small amendments for which experience of the scheme has suggested a need. This year such an amendment takes account of cases where court orders for payment of school fees are in force. I venture to suggest, however, that all of the amendments—which I shall describe in a moment—are relatively straightforward.
Regulation I is concerned with title and timing and will not require any detailed comment from me. Regulation 1(2) allows bursars to use the new parental income scales ahead of the start of term for determining a child's eligibility and assessing fee remission questions for existing assisted pupils.
Regulation 2 introduces a new condition of eligibility for the assisted places scheme. This is that a child, all of whose school fees are required to be paid under a court order, may not be selected for an assisted place. It also removes entitlement to remission of any part of school fees required to be paid under a court order. The latter provision will apply in the case of a child who is about to join the APS or is already the holder of an assisted place. Any portion of fees which is required to be paid under a court order will no longer attract fee remission.
Regulation 3 arises from the Finance Act 1987 and the Finance (No.2) Act 1987 and brings up to date the references to the relevant income tax legislation in Schedule I to the principal assisted places regulations. Deductions from total income in respect of increased personal reliefs for those aged 80 or over and contributions to personal pension schemes are not to be made in calculating relevant income for the purposes of assessing fee remission.
Draft Regulation 4 provides for the updating of the income scale used for assessing the amount of parents' contributions towards the fees. The threshold at or below which parents pay nothing towards fees is raised from £6,972 to £7,258.
The amendments I have just described are essentially necessary revisions for the continued smooth running of this successful scheme. I beg to move.
Moved, That the draft order laid before the House on 13th June be approved [29th Report from the Joint Committee.]—(The Earl of Arran.)
Lord Peston: My Lords, I thank the noble Earl for his explanation of the technical side of the amendments and the regulations. As he has himself taken the opportunity to say a few words about the assisted places scheme generally, I shall also take the opportunity to say a few—words although, they will be of a different kind—to remind the noble Lord that those of us on this side of the House do not approve of the scheme. We regard it as divisive and damaging to the maintained sector. Since we see no public good resulting from the scheme, we also regard it as a misuse of public money. We would certainly feel able to outline higher priorities for the use of such public money if it were available for education more generally. As I believe the noble Earl is well aware, we would ease out the scheme if we were in a position to do so.
Perhaps I may ask a question about the scheme to which I do not necessarily require an answer at the moment. I should like to know whether any study has been undertaken on the effects of the scheme, in particular whether there is any research that shows that it raises standards. I should also like the noble Earl to remind your Lordships what the current total cost of the scheme is and what the total number of pupils involved is; moreover, within that, what share of the total intake to the independent schools the assisted places scheme now comprises and what share of their total income public expenditure now comprises.
On the technicalities of the amending order, I entirely accept the noble Earl's remarks. However, there is one thing that intrigues me a little as regards Paragraph 4—which is the updating of, as it were, the nominal amounts of money—and in particular in relation to the figures for the level at which there is total remission of fees. If those figures are characteristic of all the updating then that seems to be an updating of just over 4 per cent. which is, if anything, slightly lower than the rate of inflation. In my view it is certainly lower than the rate of inflation which will pertain when the regulations come into force. I wonder whether it is the Government's view that this slightly less than inflation-proofing was intended.
I can do no better than conclude my remarks generally by quoting my noble friend Lady David, who to my great regret is not here at this moment, when she said that this is yet another example of the Government's practice of loading the dice against the maintained system, it is certainly a practice we do not approve of.
Lord McNair: My Lords, I should like to join the noble Lord, Lord Peston, in thanking the noble Earl for explaining the scheme to us. On the assisted places scheme in general, I have very little disagreement with the noble Lord. When this order was thrust into my

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hands not very long ago and I read it quickly, I was rather puzzled about the court orders. It may be obvious to everybody else, but I should like to know what kind of court orders they are, and in what circumstances they are made. Are they likely to be made in the matrimonial courts, or is it a matter of juvenile delinquency? I am still in doubt about that. But, apart from that, I have no doubt that the order makes sense.
The Earl of Arran: My Lords, I am not totally surprised that the reception from the Opposition Benches is not exactly exhilarating. But I just want to put once again the Government's point of view about the assisted places scheme and at the same time answer some of the questions raised by the noble Lords, Lord Peston and Lord McNair.
The assisted places scheme is now in its seventh successful year. I can assure noble Lords opposite that any doubts which they may have about it are not shared by the many parents whose children have benefited and will continue to benefit from it.
I think I am right in saying that the noble Lord, Lord Peston, was asking whether we have any evidence about the success or popularity of such a scheme. I can inform him that a survey conducted in 1986 showed that 72 per cent. of the public approved of the APS. When broken down by voting intentions, support for the scheme was as follows: Conservative voters 86 per cent. SDP/Liberal voters 74 per cent., Labour voters 60 per cent., and 70 per cent. of trade unionists also expressed approval. The sample size was 1,907.
There are now more than 27,000 pupils in the assisted places scheme, of whom about three-quarters come from families with incomes under £11,500 per annum. The scale for determining the amount of fee remission is an intentionally demanding one. Only those families with incomes currently below £6,972 qualify for completely free places. Even so, in the current school year 37 per cent. of all assisted pupils are eligible for full remission of fees.
It is clear that the scheme is working to the advantage of those less well off families for whom it is intended. Furthermore, the scheme is not a means of supporting those families whose children would have entered the independent sector without the aid of an assisted place. Under the principal regulations, participating schools must ensure that at least 60 per cent. of all their assisted pupils attended state schools immediately before taking up their assisted place. In practice and with a few exceptions, that requirement has been easily met.
The assisted places scheme is plainly achieving its objective of opening up some of the best independent schools to children who almost certainly would not otherwise have been able to look to them as an option. That can only be to their and to the nation's advantage.
The noble Lord, Lord Peston, asked about the cost of an assisted pupil and of the scheme. The cost of the scheme in the current financial year is likely to be about £55 million. While not an insignificant sum, it should perhaps be noted that the Government's planned local authority spending on the secondary
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sector in 1988–89, as announced in the public expenditure White Paper is over £5,000 million. The cost of the assisted places scheme is, in my view, more than justified by the significant increase in opportunities for able children from less well-off families which it has brought about.
The average cost of an assisted pupil in the current academic year is £1,952, made up of £1,867 on fees and £85 on incidental expenses (uniform and travel grants). In addition, the average parental contribution towards fees is £479.
The noble Lord, Lord McNair, asked about the situation surrounding court orders. We think it important that taxpayers' money should not be used to discharge an obligation which already rests with one of the parents as the result of a court order. There may be cases where one parent cannot persuade the other to discharge his or her legal obligation to pay school fees; but if the scheme is allowed to act as a safety net in those circumstances, such default is only encouraged.
In the case of a stable family, the child depends upon the willingness of both parents to meet the cost if he is to enjoy the benefit of an assisted place. It is equally reasonable in the case of divorced parents to expect both to meet their basic obligations before the question of an assisted place or of fee remission can be considered. I commend the regulations to the House.
On Question, Motion agreed to.
Viscount Davidson: My Lords, I beg to move that the House do now adjourn during pleasure until five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.53 to 8.5 p.m.].

Housing (Scotland) Bill
Consideration of amendments on Report resumed.
Clause 29 [Short assured tenancies]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 21:
Page 17, line 45, after ("25") insert ("above").
The noble Lord said: My Lords, I doubt whether Amendment No. 21 needs much explanation. It simply ensures consistency of drafting in the Bill. I am grateful to my noble friend Lord Balfour for his suggestion, and commend the amendment to your Lordships. I beg to move.
On Question, amendment agreed to.
Clause 31 [Reference of rents under short assured tenancies to rent assessment committee]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 22:
Page 19, line 8, after ("(3)") insert ("(3A)").
The noble Lord said: My Lords, I spoke to this amendment when moving Amendment No. 12. I beg to move.
On Question, amendment agreed to.
Clause 33 [Damages for unlawful eviction]:
The Earl of Dundee The Earl of Dundee moved Amendments Nos. 23 to 25:
Page 19, line 27, leave out ("with intent") and insert ("knowingly or having reasonable cause to believe that the conduct is likely").
Page 20. line 16. after ("believe") insert ("(a)").
Page 20. line 20. at end insert—
(": or
(b) that, where the liability would otherwise arise by virtue only of the withdrawal or withholding of services. he had reasonable grounds for withdrawing or withholding the services in question.").
The noble Earl said: My Lords, the Government are unequivocally opposed to harassment and unlawful eviction of tenants by landlords. It is for that reason that the Bill strengthens the protection given to tenants against the minority of landlords who would wish to act outside the law.
An important right embodied in Clause 33 is the right of an occupier to claim damages from his former landlord equivalent to the gain the landlord has made as a result of evicting the occupier. Damages can be claimed if the tenant leaves his house as a result of action which could be regarded as harassment taken by, or on behalf of, the landlord. However, as currently drafted Clause 33 will require a tenant seeking damages on this ground to prove that the landlord's actions were taken with the intention of causing him to leave his home. That has been difficult to prove in similar cases under existing legislation and therefore Amendment No. 23 brings the provision into line with the form of words used elsewhere in Clauses 33 and 35, by making the landlord liable in cases where he knows, or has reasonable cause to believe that the actions taken by him, or on his behalf are likely to cause the occupier to give up occupation or to refrain from exercising his rights. I believe this is a significant additional measure of protection for tenants and one worthy of your Lordship's support.
Amendments Nos. 24 and 25 are of a different nature and in effect give an additional defence to a landlord who faces a claim for damages under Clause 33. As it currently stands, subsection (7) of Clause 33 allows that in proceedings to enforce a liability a landlord may defend his actions by proving that he believed or had reasonable cause to believe that when they took place the occupier no longer stayed in the House.
These amendments now also provide a similar defence which will apply if the liability arises because of withholding or withdrawing of services. In such cases, the landlord will have a defence if he can show that he had reasonable grounds to withdraw or withhold the services. This might apply, for example, if the landlord was genuinely of the opinion that the tenant had left the house to work elsewhere for a period or that he had made alternative arrangements to receive the services in question, or that a one-off form of service, for instance repairs, had been carried out to the tenant's satisfaction and no further work was needed. Ultimately, the facts of each case are, of course, for the sheriff to judge upon. The three amendments to which I have spoken I think improve the clarity of Clause 33. I ask your Lordships to support them. I beg to move.
The Deputy Speaker (Lord Renton): My Lords, I propose to put this amendment and the next two amendments together, if your Lordships agree.
On Question, Amendments Nos. 23 to 25 agreed to.
Clause 34 [The measure of damages]:
The Earl of Dundee The Earl of Dundee moved Amendment No. 26:
Page 21, line 3, leave out from first ("any") to end of line 5 and insert ("substantial development of any of the land in which the landlord's interest subsists or to demolish the whole or part of any building on that land.").
The noble Earl said: My Lords, Clause 34 sets out the basis on which the sheriff is to assess damages when a tenant has been illegally evicted. As it stands, the damages will be calculated as the difference between the value of the property in the open market with a sitting tenant and the value with vacant possession. In his assessment, the sheriff is to exclude any development value of the property. In other words, he is to assume that the property will remain in residential use.
Concern has been expressed that this limitation means that there is not a sufficient deterrent to landlords tempted to evict illegally in order to redevelop their property. It is in response to that that the Government are proposing these amendments which allow certain development value to be taken into account in the sheriff's assessment. This increases the illegally evicted tenant's right to compensation.
The amendments will mean that a landlord who evicts illegally will be liable to lose any profit he might have hoped to make if he redevelops the property for other residential use. This is directed, for example, at landlords who might otherwise be tempted to evict their tenants illegally so as to convert the property into flats for sale.
I hope your Lordships will agree that these amendments offer a useful element of additional deterrence to illegal eviction. No doubt some would have preferred us to go even further, but I believe that the amended provision strikes a fair balance which should moderate the behaviour of unscrupulous landlords and offer tenants an added measure of protection. In view of that, I beg to move.
On Question, amendment agreed to.
The Earl of Dundee The Earl of Dundee moved Amendment No. 27:
Page 21 line I I, leave out subsection (5) and insert—
("(5) The reference in subsection (2)(c) above to substantial development of any of the land in which the landlord's interest subsists is a reference to any development other than—

(a) development for which planning permission is granted by a general development order for the time being in force and which is carried out so as to comply with any condition or limitation subject to which planning permission is so granted; or

(b) a change of use resulting in a building on the land or any part of such a building being used as, or as part of, one or more dwelling-houses;

and in this subsection "general development order" has the same meaning as in section 40(3) of the Town and Country Planning (Scotland) Act 1972 and other expressions have the same meaning as in that Act.").
On Question, amendment agreed to.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 28:
After Clause 35, insert the following new clause:
("Housing Tribunals.
In the Housing (Scotland) Act 1987, after section 113 there shall be inserted the following section—
Housing Tribunals
113A—(1) The Secretary of State may by regulations make provision for the establishment of tribunals, to be known as housing tribunals, to exercise the jurisdiction conferred on them by subsection (2) of this section.
(2) A complaint may be presented to a housing tribunal by the tenant of a house to which Schedule 10 of the Act applies against his landlord that the said landlord has failed to carry out his obligations under paragraph 3 of the said Schedule.
(3) Where on a complaint under this section the housing tribunal finds that the grounds of the complaint are well-founded, it shall make an order requiring the landlord to carry out such of his obligations under the said Schedule as it thinks fit and may make an order requiring the landlord to pay to the tenant compensation of an amount corresponding to any damages he would have been ordered by a sheriff court to pay to the tenant for his failure to carry out the aforesaid obligations.
(4) The tenant or the landlord may, within a period of 28 days beginning with the date of any decision of a housing tribunal, appeal to the sheriff on a question of law arising from such a decision.
(5) The Secretary of State may by regulations make provision for proceedings before housing tribunals." ").
The noble Lord said: My Lords, I beg to move this amendment, which is an attempt to simplify and put right the great difficulties that many corporation tenants have found themselves in. Now that we are going, perhaps rightly, to extend the number of landlords and number of bodies, tenants need a simple method of appeal against failure to carry out repairs, and any other difficulties they may have with their landlords.
As a Member of Parliament some years ago, the majority of complaints that I received concerned the failure of a corporation to carry out necessary repairs such as damp-proofing. That caused a tremendous amount of bad feeling and great discomfort and danger to health on the part of the tenants.
A tribunal or going to arbitration are established methods of obtaining justice rather than going to court. It would be a very simple matter to establish housing tribunals. Tribunals are commonplace. There are industrial tribunals, social security appeal tribunals, children at risk tribunals and children's hearings. But there is no such tribunal for housing, which is one of the most important matters in the country. Most complaints in the housing field have been dealt with internally. That is quite unsatisfactory.
Tribunals are a cheap method of dealing with complaints. They could save a great deal of trouble and a great deal of money. They might apply to and help to fulfil the terms of the amendment that has just been moved by the Minister where he has to protect tenants against the deliberate failure of a landlord to carry out improvements in order to drive the tenants out.
The courts would have a role, in that there must be an appeal from the tribunal to the court. But tribunals would simplify matters enormously in this very important field of housing. As I have said before, the failure by landlords to carry out repairs is the most common reason for complaint. On the part of
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the landlord, that failure to carry out repairs is the most common method of getting rid of a tenant if he wants the house for another purpose.
The mechanism already exists, in that there are rent assessment committees which deal with fair rents in the private sector. There should be a big reduction in their workload after the implementation of this Bill. Therefore, they should be able to cope with the new function. I think this is a sensible suggestion and I hope that the Government will be able to look at it with some favour. It appears to simplify matters, and the courts in this country are already overloaded. I shall be most interested to hear what the Minister has to say. I beg to move.
8.15 p.m.
Lord Morton of Shuna: My Lords, I support the amendment and I agreed with the noble Lord, Lord Mackie of Benshie, when he said that the courts in Scotland were overloaded. No doubt the Minister is fully aware of that. Further, it is a matter which can be dealt with very quickly. It is very difficult for certain tenants to get into court. If they do not satisfy the legal aid requirements—certain tenants do not—the cost of fighting over whether the landlord or the tenant should have carried out repairs is a prohibitive expense for them to undergo in enforcing their rights under their lease.
Speaking as a resident of Edinburgh, which had the misfortune to have a Conservative administration for some time, I can tell the House that until 1984 there was much difficulty in a considerable number of litigations against the Conservative-led administration as regards its failure to keep up to its legal obligations. That necessitated a number of litigations in the sheriff court which were wholly unnecessary. I should have thought that a tribunal could deal with such complaints much more easily. I therefore support the amendment.
The Earl of Dundee: My Lords, I am grateful to the noble Lord, Lord Mackie of Benshie, for his comments on tribunals. In many cases it is undoubtedly the position that they have the advantage of greater simplicity and lesser costs for the tenant than going to the courts.
Schedule 10 to the Housing (Scotland) Act 1987 contains important rights for tenants. It imposes various obligations on a landlord to repair and maintain the property which he has let. The Government recognise the importance of Schedule 10, and that is shown by the fact that in this Bill we are—in Schedule 8 to the Bill—introducing changes which will reactivate paragraph I of Schedule 10 and which will extend the landlord's obligations to include such things as common heating plant which may be outside any individual house.
As regards tribunals, I do not think that the new clause proposed by the noble Lord is necessary. Tribunals are established where there is a need for some special professional knowledge which may not be available to a court. No such special knowledge is involved in forcing a landlord to carry out his repair obligations. A court is well equipped to enforce those. There already exists an effective enforcement agency for the landlord's obligations under Schedule

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10—the sheriff court. If a landlord fails to meet the requirements of Schedule 10, any aggrieved tenant can apply to the court, not only for damages but to have him ordered by the court to do so. There is no need to invent a completely new kind of enforcement mechanism —the "Housing Tribunal" —for that purpose. The sheriff is already there and I can see no advantage to the tenant in removing his jurisdiction.
Lord Grimond: My Lords, will the Minister answer the point that has been made about the delay and the overloading of the courts? It seems to me that it is all very well to say that there are perhaps remedies, but certainly in some parts of Scotland tenants have great difficulty in activating those remedies. Surely a tribunal could speed up the process and relieve the courts of a burden. Perhaps the Minister can answer those points.
The Earl of Dundee: My Lords, in general terms I can only agree with what the noble Lord, Lord Grimond, said. The courts are under great pressure and in many cases tribunals perform a useful function in speeding up matters. However, for the reasons which I have given, it is more appropriate in this case to leave the remit of the sheriff's court as it is rather than to attempt to replace it with a tribunal.
Lord Morton of Shuna: My Lords, before the noble Earl sits down, perhaps he will deal with the matter of costs. The cost of litigating in a sheriff's court is considerable in relation to a failure to carry out repairs. I am endeavouring to raise that major point. The cost for someone who is not entitled to legal aid —legal aid limits have been tightened recently —is very heavy. There is a severe disadvantage for anyone who wishes to recover through a sheriff's court that to which he is entitled in law. A tribunal would avoid that problem. Perhaps the Minister will consider that point.
The Earl of Dundee: My Lords, I am grateful to the noble Lord. The question of cost is very important. If we had evidence that the cost of having recourse to a sheriffs court was significantly greater and proved to be a disincentive to ensuring that the remedy was effective, that would be a matter for our attention. However, there is no reason why costs should be high before the sheriff. Costs are very high before many tribunals. In order to have grounds for replacing the role of the sheriff's court, we would have to have substantial evidence that the costs of tribunals were significantly lower. I do not believe that that evidence exists.
Lord Morton of Shuna: My Lords, I apologise to the House for interrupting. However, the noble Lord must consider that the cost of an application to, say, an industrial tribunal is very low compared to the cost of taking the same case to the sheriffs court if the litigant is not entitled to legal aid. The cost of taking a fairly simple case to a tribunal dealing with rents is very low indeed compared with the cost of raising an action in the sheriff's court.
Whatever advice may have come via messenger to the Minister, I believe that I can claim rather more
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experience of sheriff's courts than he has and I profoundly disagree with his advice. We must arrive at a cheap method of enabling people to solve their differences without making the situation too complicated. At the moment, the cost of going to court is so high -that someone who is not entitled to legal aid under fairly restrictive limits will give away his remedy because he cannot afford to litigate.
Lord Hughes: My Lords, perhaps the Minister can answer two other points. Is it possible, in a matter which goes before a sheriff's court, for a person to appear without legal assistance? If so, would be have the help of the sheriff in pursuing the case or, alternatively, could it be pursued through the small claims procedure?
Lord Taylor of Gryfe: My Lords, I am impressed by the case made by the noble Lord, Lord Morton of Shuna. He made two very important points about cost and delay. Perhaps the Minister can indicate what delays are to be encountered in proceedings of that kind before sheriff's courts in Glasgow and Edinburgh. I believe that courts are overburdened and that delay is undesirable. A tribunal is a simplified system and would appear to me to be much more efficient in dealing with such matters.
Lord Mackie of Benshie: My Lords, the Minister must be impressed, as I was, by the arguments put forward by a lawyer against feeding his own profession more money. We are dealing with a serious point. A tribunal is not expensive and it has been pointed out that we shall have underworked tribunals. They do not require specialist knowledge. Both landlord and tenant are protected by an ultimate right of appeal to the sheriff's court. Surely the Minister must take the matter away and look at it again. All the evidence produced from this side of the House contradicts his answer, which does not appear to make the case against the amendment at any point. Perhaps the Minister will give me an assurance that he will do that.
The Earl of Dundee: My Lords, I shall take the matter away and look at it. I am impressed by what the noble Lord, Lord Morton of Shuna, has said, based on his personal knowledge of costs and efficiency. I have had no direct experience in the matter. However, I should repeat that many tribunals are expensive and many sheriff's courts are not expensive. In any case, costs follow success. However, the noble Lord, Lord Mackie of Benshie, has a point and it could be that in this case we shall find that there is sufficient evidence to replace sheriff's courts with tribunals. The noble Lord, Lord Morton, will not mind my saying that I suspect that when we look into the matter we shall find that the evidence is insufficient. Nevertheless, I am happy to take the matter away and consider it.
Lord Hughes: My Lords, perhaps the Minister could answer my questions. The answers might influence his decision.
The Earl of Dundee: My Lords, I apologise to the noble Lord, Lord Hughes, for not answering his questions. I shall look into those matters and write to him.
Lord Mackie of Benshie: My Lords, with those multiple assurances I am happy to withdraw the amendment. I reserve the right to return to the matter at the next stage.
Amendment, by leave, withdrawn.
Clause 37 [Cases excluded from sections 23 and 24 ut Rent (Scotland) Act 1984]:
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 29:
Page 22, line 12, after ("persons") insert ("provided that there are not more than two household units in addition to the owner or a member of his family.")
The noble Lord said: My Lords, Amendment No. 29 is a simple one. Exceptions are rightly provided in the Bill for people who have genuine lodgers in their houses. My amendment ensures that the lodgers are genuine and that the landlord who has people residing in a house where he himself resides is not running a business. It is a straightforward safeguard and would provide the people in occupancy of a house where there are more than two households with some form of protection. That is only right and proper.
Amendment No. 30, which is grouped with Amendment No. 29, simply defines a household unit. It appears to me that there is a loophole in the Bill which ought to be closed. The amendment closes that loophole and would stop the landlord running a business and taking advantage of the Act. I beg to move.
8.30 p.m.
Lord Carmichael of Kelvingrove: My Lords, I am only too pleased to have added my name and that of the noble Lord, Lord Morton of Shuna, to these two amendments. The Scottish Council for Single Homeless, which has very wide experience of these matters, takes the view that it is not unreasonable for a landlord to have two lodgers. It has supported the concept of the tenants' rights legislation. A "household unit" has been employed to cover the range of size of household that a lodger or occupier might represent. A lodger household could be a single person, a single person plus a cohabitee, a married couple, a single parent, etc.
If a resident landlord has more than two households in addition to his own family on the premises, it is reasonable to consider, as the noble Lord, Lord Mackie of Benshie, has suggested, that he or she is running a commercial business. In such circumstances at the very least occupiers should have the limited protection of the short assured tenancy.
I should add that from information I have received the definition of household unit is broadly based on that contained in Sections 24 and 25 (Homeless Persons) of the Housing (Scotland) Act 1987. The two amendments have the support of Shelter (Scotland) and the Association of Citizens' Advice Bureaux, bodies which have a great deal of daily experience of this matter. I am very happy to be able to support the amendment.
Baroness Carnegy of Lour: My Lords, I shall be very interested to hear what my noble friend says about the amendment. I do not know enough about the technicalities to know how it would work, but I know that there is a problem, particularly in university towns such as Edinburgh and Glasgow, where rooms are let to students.
I believe that in another place an undertaking was given that something would be done about this situation; but nothing has been done. I wonder why it has been left to the noble Lord, Lord Mackie, to put down an amendment, and why we have not so far had a government amendment. Perhaps they have had second thoughts.
The Earl of Dundee: My Lords, I have listened with interest to the arguments which have been deployed. I am grateful to the noble Lord, Lord Mackie, for introducing the amendments. I fully appreciate the important points he makes; but nevertheless I cannot agree with the amendment.
One of the aims of the legislation we are considering is to encourage more people to let empty rooms in their houses. This is a simple and straightforward way of increasing the supply of accommodation, particularly for single people. One factor which deters people from letting their empty rooms is the fear that they will not be able to evict an unsatisfactory tenant easily. The wish to be able to do so is understandable when someone is offering to share their house.
I believe that all of your Lordships accept that some such exemption for genuine resident landlords is desirable. The concern which has arisen repeatedly during the Bill's passage both here and in another place has centred round how to ensure that only genuine resident landlords benefit from the exemption. In response to that concern, we have significantly tightened up the definition of resident landlord both in Clause 37, which we are now discussing, and in Schedule 4.
The amendment put forward by the noble Lord, Lord Mackie, would go further and limit resident landlords for the purposes of Clause 37 to those who let to no more than two household units. But such a restriction would bite very heavily indeed. It would, for example, remove the exemption from a landlord letting spare rooms in his house to three students. I am afraid that any figure we might suggest would be arbitrary and would lead to unfair treatment of genuine resident landlords. I therefore stick to the view that the Government's approach —to ensure that the definition is such that it covers only genuine resident landlords —is the right one. I therefore hope the noble Lord will feel able to withdraw his amendment.
Lord Mackie of Benshie: My Lords, I totally agree with the Minister that a government does great harm if they produce legislation which makes it impossible for a private landlord to let a room or makes it impossible or very difficult for him to get rid of a tenant. However, in this case we are talking about households —two households not three students. I

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am not sure that one could not put a figure on it. Perhaps the Government would like to extend the number to three households.
There is nothing to prevent someone from taking, say, a small hotel, letting it out as a business and saying that it was his place of residence and that he was merely taking in lodgers. I think that we have a point. I think that the Government might well take another look. I accept the argument that in the past some legislation covering furnished accommodation reduced the amount of accommodation available for single people and others. However, I think also that we have a point here to cover instances (which may be quite numerous) of people trying to take advantage of this loophole in the Act.
In withdrawing the amendment, I hope that the Government will take a look at the situation: but I reserve the right to bring this matter forward again at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Clause 42 [Transfer of existing tenancies]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 31:
Page 27, line 2 at end insert —
(": and
(c) the tenant has given his consent in writing for the interest of the landlord to cease to be held by a public body or the tenant has concluded a lease under the provisions of section 57(2) of this Act.").
The noble Lord said: My Lords, we now come to the most important amendment that we have to consider tonight —at least in relation to the volume of correspondence that we have received. The amendment we propose is to add that:
"the tenant has given his consent in writing for the interest of the landlord to cease to be held by a public body or the tenant has concluded a lease under the provisions of section 57(2) of this Act".
As I shall endeavour to explain, there is a view held by a considerable number of tenants of public authority housing that the Government have gone back on assurances that they have given.
The purpose of the amendment is to ensure that all secure tenants of public sector landlords retain their existing right to remain secure tenants and cannot be forced against their will to become assured tenants. Clause 42(1) and (3) provide that where the interest of a public sector landlord in a secure tenancy ceases to be held by that landlord, the tenancy can no longer be a secure tenancy unless it passes to a second public sector landlord. In other words, a secure tenancy is automatically terminated by virtue of a change of ownership from a public landlord to a private one. Those provisions appear to override the secure tenant's existing legal right not to have his secure tenancy terminated except in specific circumstances laid down in Section 46 of the Housing (Scotland) Act 1987, and the change of landlord is not one of those conditions.
Clause 42 also appears to override an important principle of security of tenure, which is that a change of ownership of a tenant's home cannot force a
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change to the tenant's existing security of tenure. The effect of the clause is to leave secure tenants with no statutory right to object to the termination of their secure tenancy should their public sector landlord decide to transfer them to another landlord.
The amendment seeks to ensure that where a public landlord proposes a change in ownership of a house which would result in a change of security of tenure, it can only be done with the full agreement of the individual tenant concerned and not the majority of the tenants of that class of house.
The most important public sector tenant's right is the right to a secure tenancy which was introduced by this Government in the Tenants' Rights Etc. (Scotland) Act 1980, which is now in the Housing (Scotland) Act 1987. The most important aspect of the secure tenancy, naturally enough, is the security. Fundamental to that security are the statutory limits imposed by the 1980 Act on the circumstances in which a secure tenancy can be terminated. Those limits are now in Section 46 of the 1987 Act and are very specific.
Under that Act a secure tenancy can he terminated if the landlord and tenant agree in writing to terminate the tenancy, if the tenant gives the landlord four weeks' notice of his own intention to terminate or the tenant dies leaving no successor. The landlord can only terminate the tenancy if the tenant has abandoned the house or an order for repossession has been granted on one of the grounds in Schedule 3. The landlord cannot terminate the secure tenancy simply by virtue of selling the house to another landlord, but this is what the Bill appears to do.
That raised considerable doubts with the National Federation of Scottish Special Housing Association Tenants Associations. On 28th September 1987 the Minister's right honourable and learned friend the Secretary of State wrote to Mr. Reynolds, the chairman of the Steering Committee for the National Federation, saying specifically —and I quote from that letter which I assure the Minister has been delivered to the recipient:
"The first point which I emphasised was that SSHA tenants will not lose any of their legal rights when they become tenants of Scottish Homes. They will continue to have security of tenure, the right to succession, the right to buy and all the other statutory rights which this Government gave to SSHA tenants, and to other public sector tenants, in the Tenants' Rights Etc. (Scotland) Act 1980, for which I had personal Ministerial responsibility. Those rights will remain guaranteed by existing legislation and therefore it will be impossible for anyone to deny tenants their rights".
The basic purpose of the amendment is to ensure that those rights remain. If the Bill had incorporated what the Minister's right honourable and learned friend had said, that would be fair enough and we should have no objection. Unfortunately, Clause 42 denies the existing rights of secure tenants by providing that a secure tenancy is automatically terminated when a change of landlord takes place. This clause needs to be read in conjunction with the existing powers of public authorities to transfer ownership of all or part of an estate to another landlord and the similar powers which the Scottish Homes will inherit from the SSHA.
Section 12 of the Housing (Scotland) Act 1987 gives local authorities these powers and under the formal agreement between the Secretary of State and

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the special housing association, the housing association has equivalent powers. Scottish Homes will inherit the SSHA's powers under Clause 2(2) of the Bill. In order to dispose of all or part of an estate the public authority needs to obtain the consent of the Secretary of State. Under the existing legislation these powers simply mean that the landlord can change, as ownership is changed, with the approval of the Secretary of State but the rights of the secure tenants cannot be changed by the simple change of landlord. The purpose of this amendment is to make sure that the change in landlord and therefore the change in security can only be acquired with the individual tenant's written agreement.
In the other place the Secretary of State said on 1lth January that:
"There is not and never has been any proposal whatsoever to impose any degree of compulsion on any individual SSHA tenant". —[Official Report, Commons, 11/1/88; col. 45.]
He challenged the Opposition to state one single way in which tenants will be compelled to obtain new landlords. Again, at the Report stage another Minister said that:
"No solution will be forced on anyone against his or her will". — [Official Report, Commons, 293/88; col. 1003.]
There is not a word of compulsion for public sector tenants. However, then on 28th June of this year the Minister concerned was reported in the Glasgmv Herald newspaper and in The Scotsman as saying:
"In large scale disposals, although a majority of tenants would have to be in favour before the Secretary of State could agree to an authority's proposals…it is possible that a minority might have to transfer against their will".
That is the point of this amendment; it is to deal with the situation where obviously the Government have changed their mind. Instead of saying that each individual tenant with a public authority as landlord will have the right to retain security of tenure, they now say that so long as a majority (51 out of 100) decide that they want to transfer to someone else, the minority (the other 49) have no option whatever: they will have the terms of their tenancy changed without in any way being in favour of it or consenting to it. That is the point of the amendment. It is a clear breach of the undertaking of the Secretary of State in the letter of 28th September 1987 to the Scottish Special Housing Association Tenants Associations that I quoted. That is the purpose behind the amendment. I beg to move.
8.45 p.m.
Lord Mackie of Benshie: My Lords, I do not dare add anything to what the noble Lord, Lord Morton, has said. He has put the case absolutely clearly. I merely say that I support the amendment on grounds of the principle that the minority must be protected. In this case the minority is put at grave risk by a vote of the simple majority. It is against assurances given by the Government that I trust and hope that the Minister will be able to give a satisfactory reply to this enormously serious point.
The Earl of Selkirk: My Lords, I cannot add much to what the noble Lord, Lord Morton, has said except to say that I have throughout this Bill sought to establish clarity. I believe that it is of the utmost
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importance. Tenants should understand their position clearly and fully. I cannot reconcile this clause as it stands at present with, for instance, Section 54 of the Housing (Scotland) Act 1987 which states:
"Notwithstanding anything contained in the tenancy agreement, the terms of a secure tenancy may not be varied except… by agreement between the landlord and the tenant".
I do not see how those words can be reconciled with the present drafting of the Bill. I believe that my noble friend will seek to reconcile them and may very well find a way to do so, but so long as those sections are at sharp variance, I think that they are not a desirable way of enforcing certain relationships on tenants in Scotland.
So far as I can understand, the Government are trying to say that a secure tenancy can only be held with a public authority, of which a description has already been given. That, I believe, is what the Government want to do. If they want to do that, they should make it clear that the provision is confined to that and does not contain other elements.
Section 54 of the Housing (Scotland) Act 1987 deals with this perhaps even more clearly. It states that notwithstanding any provision contained in the tenancy agreement, a secure tenancy may not be brought to an end except —and one can see what has already been referred to. I find this terribly difficult to reconcile. I believe that confusion is the worst of all evils in a housing Act. Tenants must know where they stand. It is our business as a revising House to do our utmost to ensure that they do.
Lord Taylor of Gryfe: My Lords, the noble Lord, Lord Morton of Shuna, has dealt at great length with the arguments which have been produced by the various organisations concerned in this matter. I do not propose to reproduce the excellent brief which I have received from Shelter and other bodies which feel strongly about this. I ask the Minister only to reply on one basic and fundamental point. I quote from the Shelter representation, which says:
"Despite contrary claims by the Scottish Office, the passing of clause 42 unamended will result in the loss of a secure tenant's right not to move to a private landlord without his individual consent".
There is a matter of fundamental importance.
"Clause 42 will also cause a secure tenancy to automatically cease to be a secure tenancy at the moment of sale to a private landlord".
That strikes me as being the crux of the issue and makes it extremely difficult to defend the existing provisions of Clause 42. I would welcome from the Minister some assurance in this connection.
Lord Hughes: My Lords, the case has been stated so well by my noble friend Lord Morton of Shuna that I do not think it necessary or desirable that I seek to gild the lily in any way.
However, I am interested in the point raised by the noble Earl, Lord Selkirk, about this provision in the previous Act. I have been considering the Schedule 6 amendments to the previous Act, both apparently major and minor amendments. At a quick glance I cannot see anything about that previous provision being repealed. The noble Earl, Lord Selkirk, is so infrequently wrong on such matters that he picks up that we are entitled to know where in the Bill the

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Government are creating a set of conflicting provisions.
Lord Carmichael of Kelvingrove: My Lords, as my noble friend Lord Morton of Shuna and other noble Lords have said, they have had much correspondence on this issue from individuals, small housing groups, tenants' associations and the larger bodies representing groups of tenants' associations, and it causes a great deal of anxiety. It makes one realise that there is a great deal of worry about the loss of representation by either the SSHA or local authorities. People knew where they were then. If things went wrong they knew to whom they could go. I do not say that they were totally satisfied with what they did, but at least they knew on which door to knock, and it gave them a little security.
Here they are entering an unknown world with, as has been pointed out, the loss of secure tenants' rights. The Minister may be able to reassure us on this. However, it seems as though they go from secured to assured tenancy the moment they are transferred. They are not allowed to sign a document. The moment that they are transferred they go from secured tenure to assured tenure.
I do not understand why the Government are so adamant on this. Surely the secured tenancy will work itself out in a fairly short time, almost certainly within a generation, which in terms of housing is nothing. It would be a very progressive step if all the tenancies under Scottish Homes were assured tenancies. There is a very natural resentment among people that their houses should be transferred or sold under them without their having any part to play in it. Unless the Minister has something very important to say, I support the amendment in my name and that of my noble friend Lord Morton of Shuna.
As I am sure the Minister is aware, we have received well-informed letters of complaint. People have gone to the trouble of going to organisations which know about housing law. They have secured background information from them and have written these letters. It is a great, and I think an unnecessary, worry. I ask the Minister to concede what is contained in the amendment. Perhaps he will explain more fully the point that was raised by the noble Lord, Lord Taylor of Gryfe, on whether tenants move from a secured to an assured tenancy. I support this amendment.
Baroness Carnegy of Lour: My Lords, I was not going to intervene because what I know about this issue I have read in the press. I saw an article in today's Scotsman shortly before we began this Report stage. The noble Lord, Lord Carmichael, was addressing the doubt of people as to what would happen to them if the majority wanted to change and they were left behind. I should like to have heard my noble friend's answer before I spoke because I should like to hear all the arguments. However, it seems to me that what my noble friend Lord Selkirk said about the clarity of the situation is absolutely crucial.
As I understand it, if the Secretary of State for Scotland is saying that the rights which the person
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would have under the new arrangement are as good as the rights that he had before, and if he knows that, then the fear of the change of landlord would be enormously lessened. But it is the doubt that is worrying Shelter. I read that it has taken legal opinion about this. It seems to conflict with the Government's legal advice, if I understand aright.
Perhaps my noble friend could say something about the clarity of understanding of the situation for the individual tenant. That is a very important issue. It is not simply whether matters remain the same but whether the rights all transfer. I hope that my noble friend can help me on that issue.
Lord Sanderson of Bowden: My Lords, I think it is very important to be clear about the point at debate in relation to this amendment. It is not about whether the Government are taking away a right of veto by individual tenants over the transfer of their houses from one landlord to another. I know that the briefing material supplied by Shelter (Scotland) gives this impression, but there is not and has never been such a right of veto. This is not point which is affected by the opinion of counsel, to which I shall come in a minute. It is a matter of fact that Clause 42, whether amended or unamended, has no bearing at all on the powers of public housing authorities to transfer houses to other landlords.
There is a point in this debate, quite different from the question of veto of transfer, which involves an issue of interpretation of the existing statute. The point at issue concerns the tenancy status of tenants after they have transferred, not whether they should transfer. The question of interpretation is whether Clause 42 has a different legal effect from the existing statutory provisions, which derive from the Tenants' Rights Etc. (Scotland) Act 1980 and have been consolidated into Part III of the Housing (Scotland) Act 1987. My right honourable friend the Secretary of State has made clear that Clause 42 is intended as a restatement of the existing statutory position. The Government believe that the existing statutory position is that where the landlord under a particular tenancy changes from being a public body to a private sector body the nature of that tenancy changes with the change in landlord. The change is from a secure tenancy to the appropriate type of private sector tenancy. At present the type of private sector tenancy which results is a protected tenancy and in future it will be an assured tenancy, since assured tenancies are replacing protected tenancies.
My right honourable friend's view of the existing statutory position reflects the fact that he was the Minister who piloted the Tenants' Rights Act onto the statute book, as well as the legal advice available to him from the Scottish Office, which was corroborated by an opinion which the Scottish Special Housing Association sought from senior counsel in April 1987. Shelter (Scotland) takes a different view and I understand that it has in the past few days obtained an opinion from counsel which supports its interpretation.
Clearly it will serve little purpose in this debate to bandy alternative counsel's opinions. There is an honest difference of view. I accept that Shelter (Scotland) genuinely holds its view. I regret that there

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has been a lack of similar recognition in some quarters. That is as may be. The accusation of bad faith which has been levied against my right honourable friend the Secretary of State is quite baseless. Those who have suggested that have debased the debate. It does not add to the genuine difficulties we have to face and try to resolve.
The issue at the heart of this debate is whether a secure tenancy should carry over where the new landlord is a private body. There are two reasons why it should not. First the workings of secure tenancies are in some detailed respects tailored directly to the circumstances of public housing authorities and would be anomalous if applied to other housing bodies. Secondly, and more important, it is not necessary for a tenancy to continue to be a secure tenancy in order to protect tenants' rights.
I want to explain this second point more fully. We have indicated that we shall he taking steps, including amendments to the Housing Bill when it reaches your Lordships' House —the English Housing Bill, for clarification —to ensure that changes of landlords cannot take place where a majority of tenants are against the change. This will put tenants collectively in a position to insist on the rights which they want, which may in some respects go beyond their existing rights. Given that they will have that power, there is no need for their tenancies to continue to be secure tenancies rather than assured tenancies.
To answer my noble friend Lord Selkirk. who raised the question of Section 54 of the 1987 Act, I believe that the man in the street would regard it as common sense that if somebody becomes the tenant of a private body, the normal landlord and tenant law applies to that person. This is the basis on which the Tenants' Rights Bill was drafted in 1980 and we are in no doubt that it achieves that effect. I am advised that Section 54 of the 1987 Act consolidated from the 1980 Act does not put that in doubt. Neither the nature of the tenancy nor the nature of the landlord are terms of the tenancy. I should be happy to write to my noble friend on this matter.
In relation to what the noble Lord, Lord Morton, said, just as the 1987 Act does not terminate a tenancy if the landlord changes, neither does Clause 42. It provides for the nature of the continuing tenancy to be appropriate to the private sector; that is, an assured tenancy. I hope that by trying to elucidate these points I have been able to explain what I perceive to be a genuine difference of view. I trust that your Lordships are made the wiser by it.
Lord Morton of Shuna: My Lords, I am very much obliged to the Minister, but he has made the confusion worse. Do I understand that we are to wait until we see the English Bill when it eventually comes to this House and then, having already passed this Bill, we shall know what it means? There is something coming in the Housing (England) Bill, if I may put it that way, that if the Government can get it through will affect the Housing (Scotland) Bill. It is a most unsatisfactory position, if I may say so quite bluntly. We are to consider something which we know nothing about, apart from what the Minister has said. We are to have an amendment to this Bill which is still before the House and could be amended by the
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Government at any time. The Marshalled List shows that one or two of these amendments have come from the Government; I should have thought the great majority. But there is to be another amendment that will affect this Bill coming in another Bill that is still to have a Second Reading before this House. We do not know the detailed terms of it. I can hardly think of anything more unsatisfactory.
All we are told is that the majority of tenants are to have the say. Are the minority to have no rights? We are considering individual families, individual tenants and each individual tenant at present has a secured tenancy.
It is strange indeed to be addressing a Conservative Government trying to assert the rights under contract and under statute of individuals against the state. The Government are saying that by passing the Housing (Scotland) Bill they are taking away rights which this 1980 Conservative Government gave to those tenants. They are taking away by Act of Parliament rights about which the tenants can do nothing. The position is totally unsatisfactory. I hope that the Minister will consider taking this away and thinking about it.
As he fairly said, there are two legal views at least. I do not wish to be thought to be giving a legal view. I am giving my own view. I cannot say whether that is legal or illegal as I am not quite certain, but it is my view speaking from this Bench. I should have thought that the Government could at least have considered taking this away. having another look at it and perhaps taking legal advice. They have a considerable amount of legal advice available to them. Is the Minister prepared to consider that rather than to have me force a Division at this time of night?
The Earl of Selkirk: My Lords, I hope that the noble Lord will consider the point further. There is a conflict. It is no good getting away from it because it is as clear as crystal. The words:
"Notwithstanding anything contained in the tenancy agreement, the terms of a secure tenancy may not he varied except".
are pretty clear cut. The simplest individual can understand the nature of what is being said. There may be a way round; it may be that the law should be changed. Maybe those words should be rescinded from the 1987 Act. It puts us in a most embarrassing position and I ask for the noble Lord's help.
Lord Sanderson of Bowden: My Lords, I understand the difficult situation in which some noble Lords find themselves in relation to this clause. Of course I am prepared to read and see the case that has been made by the noble Lord, Lord Morton of Shuna. Of course I shall do so and if I believe that the clause needs to be examined in any way we shall certainly do so.
I must repeat what I said. It is the Government's firm view that the clause does not need amending. Without commitment at the next stage of the Bill I shall look at what has been said and if I and my colleagues believe that something must be done that will happen. I can give no assurance that I shall bring forward amendments at the next stage, but I shall look at what has been said.
Lord Morton of Shuna: My Lords, I should have thought —perhaps "hoped" is a better word —that the Government would look at anything that was said in any debate and consider it. I hoped that the Minister meant more than that on this occasion. However, if he does not —and I understand from his view that he does not and that this is merely a formal, "I shall read Hansard" —then in the circumstances I regret to say that I must ask for the opinion of the House.
9.10 p.m.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 22; Not-Contents, 49.

DIVISION NO. 3

CONTENTS

Ailesbury, M.

Nicol, B.

Airedale, L.

Parry, L.

Buckmaster, V.

Pitt of Hampstead, L.

Carmichael of Kelvingrove. L.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Falkland, V.

Robson of Kiddington, B.

Grimond, L.

Saltoun of Abernethy, Ly.

Hughes, L.

Selkirk, E.

Jay, L.

Taylor of Gryfe, L.

Mackie of Benshie, L. [Teller.]

Underhill, L.

McNair,L.

White, B.

Morton of Shuna, L.

NOT-CONTENTS

Abinger, L.

Johnston of Rockport, L.

Arran, E.

Kinnaird. L.

Beaverbrook, L.

Lauderdale, E.

Beloff, L.

Limerick, E.

Belstead, L.

Lindsay, E.

Blatch, B.

Lindsey and Abingdon, E.

Boardman, L.

Long, V.

Borthwick, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

Macleod of Borve, B.

Cameron of Lochbroom, L.

Mersey,V.

Carnegy of Lour, B.

Montgomery of Alamein, V.

Newall, L.

Craigavon, V.

Oxfuird, V.

Cullen of Ashbourne, L.

Rankeillour, L.

Davidson, V. [Teller.]

Redesdale, L.

Denham, L. [Teller.]

Sanderson of Bowden, L.

Dundee, E.

Skelmersdale, L.

Elliot of Harwood, B.

Strange, B.

Elton, L.

Swinfen, L.

Ferrers, E.

Torrington, V.

Glenarthur, L.

Trafford, L.

Goold, L.

Trefgarne, L.

Gray of Contin, L.

Trumpington, B.

Gridley, L.

Hives, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.18 p.m.
The Earl of Dundee The Earl of Dundee moved Amendments Nos. 32 to 39:
Page 27, line 22, leave out ("it belongs to").
Page 27, line 23, at beginning insert ("it belongs to").
Page 27, line 27, at beginning insert ("it belongs to").
Page 27, line 30, at beginning insert ("it belongs to").
Page 27, line 34, at beginning insert ("it belongs to").
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Page 27, line 35, at beginning insert ("it belongs to").
Page 27, line 36, at beginning insert ("it belongs to").
Page 27, line 37, at beginning insert ("it belongs to").
The noble Earl said: My Lords, I readily confess that at first sight this group of amendments may look rather strange. Nonetheless, I can assure your Lordships that the amendments are necessary. First, I should explain that the original need to amend the clause arises because we had failed to extend the provisions of Clause 42 to Crown tenancies. Amendment No. 32 achieves this aim.
However, this amendment has repercussions for the drafting of the clause and Amendments Nos. 32 to 39 are needed to maintain the grammatical integrity of the Bill. I commend this group of amendments to your Lordships.
Lord Hughes: My Lords, at first sight this seems to be the biggest piece of rubbish which has been brought forward in this Bill. One is taking out the words, "it belongs to" at the end of the preliminary part of the clause and then sticking them in front of (a), (b), (c) and so on. I assume that the reasoning is that if they are not inserted all over the place they might be thought to apply only to subsection (a) instead of applying to each of them. However, I do not see how that interpretation could possibly have been put on it because if one reads the Bill as it stands it states:
"an islands or district council… or (b) a regional council…or".
It then continues with a number of "or"s. This would have read exactly the same if, instead of putting in (a), (b), (c), (d), (e), (f) and (g), it had been one long and difficult-to-follow paragraph with the word "or". I cannot see that the first "or" is any different from the last "or" in paragraph (a). As it stands, it means that this provision applies to all or any of the sections.
We are frequently told that we should not be putting in words to lengthen a Bill unless it is absolutely necessary. In any reading of English, even in the convoluted intepretation which legal people may use, I cannot see that there is any doubt that "it belongs to" as it stands applies to every one of these sections. May we be told what advice, if any, was given as to why it was necessary to substitute one such expression by seven?
The Earl of Dundee: My Lords, I have sympathy with the sentiments behind the remarks of the noble Lord, Lord Hughes. I can assure him and your Lordships that the introduction of eight new references to "it belongs to" is not a frivolous one; nor is it because, as your Lordships might say, the Government like to say something eight times instead of only once. The amendment is needed to maintain the grammatical integrity of the Bill.
As your Lordships will recall, in the final day of the Committee debate on the Bill many references were made to grammatical integrity. Indeed, the names of Sir Ernest Gowers and Dr. Johnson were mentioned more than once. I have little doubt that these amendments would meet with the approval of Sir Ernest Gowers, although I have to admit that they might not have met with the approval of Dr. Johnson, who, even though he would have said they made

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matters clear, often had his own reasons for disagreeing with matters. Be that as it may, I hope that the noble Lord, Lord Hughes, will feel that we have made an improvement here which leads to greater clarity.
Lord Hughes: My Lords, if the noble Earl thinks he can get me to say that, it means he is inviting me to stand on my head. I have no intention of doing so. I am not prepared to accept that. When the Question comes, I shall say "Not-Content"; but I shall not take it any further than that, and I shall not divide the House. It is nonsensical for this to be in the Bill; but it would be even more nonsensical to divide the House on the matter.
On Question, amendments agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 40:
Page 27. line 37, at end insert ("; or
(h) it belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department.")
On Question, amendment agreed to.
Clause 43 [Statutory tenants: succession]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 41:
Page 27, line 42. leave out subsection (1) and insert ("(1) In section 3 of the Rent (Scotland) Act 1984 (which makes provision as to statutory tenants and tenancies) in subsection (1) after the word "sections" there shall be inserted "3A,".").
The noble Lord said: My Lords, in speaking to Amendment No. 41, I wish to speak to Amendments Nos. 42, 93 and 95.
During the Committee debate on the Bill, my noble friend Lord Selkirk tabled an amendment to clarify the presentation in statute of the Government's proposals on succession to regulated tenancies. His arguments were supported by a number of your Lordships to the effect that Schedule 6, as introduced by Clause 43, was complicated and not a satisfactory way of presenting the rather complex changes which we were proposing to the succession rules. I promised to look again at the matter; but I gave notice that because we were dealing with complex matters, any other approach would be likely still to pose some difficulties to the casual reader. Also, I explained that alternatives to the standard textual amendment procedure employed in the drafting of the legislation might lead to three new schedules being added to the Bill.
Since the Committee debate we have put considerable effort into producing a formulation of Schedule 6 that would meet your Lordships' concerns. As a result of the amendments, Clause 43 will amend Section 3 of the 1984 Act so that it now introduces different schedules which will come into play in different circumstances. Schedule 6 becomes the vehicle for importing two new schedules to supplement Schedule 1 of the Rent (Scotland) Act 1984, which will remain in its present form subject to a minor drafting change.
Briefly, under the revised format, Schedule 1 of the 1984 Act will continue to apply to succession in cases
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where the original tenant or the first successor to a regulated tenancy dies before commencement of Part II of the Bill. Schedule I A, as set out in Schedule 6 of the Bill, will apply to succession in cases where the original tenant of a protected tenancy dies after commencement of Part II of the Bill. Schedule 1 B, as set out in Schedule 6, will apply to succession in cases where someone who was a first successor to a regulated tenancy dies after commencement of Part II of the Bill.
I am grateful to your Lordships, and especially to my noble friend Lord Selkirk, for bringing about this improvement to the Bill, making it more readily comprehensible. Together with the information booklet which will be available, it should make it easier for tenants and landlords alike to know where they stand.
I should also draw your Lordships' attention to the fact that the new Schedules 1A and 1B incorporate the transitional provisions which the Government promised to introduce in Committee. The provisions, which are set out in paragraph 3(a) of Schedule 1A and paragraph 3(i) of Schedule 1B, provide a right of succession to a statutory assured tenancy for members of a tenant's family who have already lived with the tenant for six months at the commencement date of the Bill. They will not have to fulfil the new two-year residence requirement.
Finally, the amendment to Schedule 9, which amends Schedule 1 of the Rent (Scotland) Act 1984, is purely a drafting one.
The Earl of Selkirk: My Lords, I thank my noble friend warmly for this improvement. It greatly adds to the ease of understanding by many people of this very important Bill. I believe that the Bill is richer and nobler for what the Minister has done. I thank him sincerely.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 42:
Page 28, line I, leave out subsections (2) to (4) and insert —
("(2) After section 3 of that Act there shall be inserted the following section—
"Statutory tenants and tenancies: further provision as to succession
3A. —(1) Where the person who is the original tenant, within the meaning of Schedule 1 to this Act, dies after the commencement of section 43 of the Housing (Scotland) Act 1988, the provisions of Schedule 1A to this Act shall have effect for determining what person (if any) is entitled to a statutory or statutory assured tenancy of the dwelling-house.
(2) Where subsection (1) above does not apply but the person who is the first successor, within the meaning of the said Schedule I, dies after the commencement of the said section 43, the provisions of Schedule 1B to this Act shall have effect for determining what person (if any) is entitled to a statutory assured tenancy of the dwelling-house by succession.
(3) In any case where, by virtue of any provision of the said Schedules IA or I B to this Act, a person becomes entitled to an assured tenancy of a dwelling-house by succession, that tenancy shall be a statutory assured tenancy arising by virtue of the said section 43.".
(3) Part I of Schedule 6 to this Act shall have effect for the purpose of inserting new Schedules 1A and 1B into the Rent (Scotland) Act 1984.").
On Question, amendment agreed to.
Clause 46 [Information as to determination of rents]:
The Earl of Dundee The Earl of Dundee moved Amendment No. 43:
Page 29, line 6, leave out from ("information") to end of line 8 and insert ("as may be so specified with respect to rents under assured tenancies which have been the subject of, or taken into account on, references or applications to, or determinations by, rent assessment committees.").
The noble Earl said: My Lords, as currently drafted, Clause 46 enables the Secretary of State to specify what sort of information concerning market rent determinations may be kept and made publicly available by the rent assessment panel, but the information is limited to that relating to actual determinations made by rent assessment committees for assured tenancies. This will be a useful source of data for rent assessment committees when considering other applications for rent determinations for assured tenancies and of use to members of the public who wish to check if the rent that they are paying is in line with the market rent.
The amendment is designed to improve those data. It does so by enabling my right honourable friend the Secretary of State to ensure that the rent assessment panel keeps information derived not only from an application which results in a rent determination but also from an application which does not. As your Lordships will be aware, there are three circumstances in which no determination will be given: first, when the application is withdrawn, presumably because landlord and tenant have reached an amicable agreement; secondly, in the case of a short assured tenancy, when there are insufficient similar assured tenancies in the area for the rent assessment committee to make comparisons, and thirdly, when it is clear that the rent sought by the landlord for a short assured tenancy is not excessive in relation to rents for similar properties in the area.
As currently drafted, Clause 46 might not allow the information derived from such applications to be kept by the rent assessment panel. However, the information could be very useful to rent assessment committees considering future applications for rent determinations and to landlords and tenants seeking information about the appropriate level of rent for a tenancy. The amendment is therefore designed to ensure that this extra information will also be kept. I hope that this explanation will enable your Lordships to support the amendment and to agree that it is desirable. I beg to move.
9.30 p.m.
Lord Carmichael of Kelvingrove: My Lords, in general I agree with what the noble Earl has said. Perhaps I may take the opportunity to ask him a question. Throughout the Bill there are so many references to "as may be so specified", "which will be specified" or "should be specified". Can the Minister give some indication when these matters will be specified? There is a tendency to be thankful to leave a Bill and there may be a great many loose ends. I am sure that in time they are tidied up. I am sure that these matters would send the noble Earl, Lord Selkirk, into a real tizzy in trying to work his way through all the promises that have been made. It is a
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criticism of legislation in general. I believe that recently we have had rather a good deal of it because there seems to be a number of holes in legislation which have to be filled by specification or some other order. Can the Minister say when he believes these steps will be taken? Will it be before the Royal Assent is given? The Bill will be rather meaningless otherwise.
The Earl of Dundee: My Lords, in answer to the noble Lord, Lord Carmichael of Kelvingrove, all forms to be specified will be in regulations subject to the negative resolution. We hope to have them ready to lay before the House this autumn.
On Question, amendment agreed to.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 44:
After Clause 52 insert the following new clause:
("Code of Practice for landlords
. —(1) The Secretary of State may by regulations contained in a statutory instrument prescribe a Code of Practice for the purpose of ensuring that the landlord, other than a landlord specified in subsection (3) below, of a house which, or a part of which, is let as residential accommodation observes proper standards of management, maintenance and repair.
(2) The regulations —

(a) may make different provisions for different types of houses, tenancies, landlords and circumstances:

(b) shall impose a duty to comply with the regulations:

(c) shall designate an appropriate body to monitor the operation of the Code of Practice, receive complaints about breaches of the Code of Practice and take appropriate action to ensure that the Code of Practice is enforced.

(3) The regulations shall not apply to a registered housing association where it is subject to supervision and control by Scottish Homes under section 1(e) of this Act or to any of the public sector landlords mentioned in section 61(2)(a) of the Housing (Scotland) Act 1987 of a housing trust which was in existence on 13th November 1953.
(4) If a person knowingly contravenes or without reasonable excuse fails to comply with the Code of Practice in relation to any house or tenancy he shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.").
The noble Lord said: My Lords, we have reached one of the important amendments to the Bill. I hope that the House will bear with me if I am fairly detailed. I know that it is a cause of great anxiety for many people and therefore I should like to have a fairly full answer from the Minister. A new clause is to be inserted after Part II of the Bill. The purpose is to enable the Secretary of State to draw up a statutory code of practice to ensure that private landlords conform to minimum standards of management and maintenance of the homes of tenants.
This code of practice will apply only to those landlords who are not already subject to some form of registration, monitoring or approval under this Bill. The purpose of the code of practice is to provide some minimum management standards once the private rented sector is deregulated. Without such a code of practice the Government will have no means of ensuring that landlords do not exploit the deregulated market by providing poor quality accommodation and poor standards of management. We shall still not have a balance between the level of demand and supply. The market will still be very much in favour of the landlord. Sadly, I can see that

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for quite a long time to come that situation will remain.
The deregulated market could provide poor quality accommodation and standards of management unless some new provision is made. The amendment has been widely drafted to allow the Secretary of State flexibility in making different provisions for different kinds of houses, tenancies and landlords in order to meet the various circumstances one encounters in a community.
The Government's stated objective in deregulating the private rented sector and introducing assured tenancy is to expand and improve the supply of rented accommodation. They have rejected the proposal supported by a wide range of other housing organisations, including Shelter, that all landlords offering assured tenancies should be subject to some form of registration in order to protect tenants from the worst landlords. Practically all groups involved in housing believe that there should be some protection. This proposal is consistent with the original concept of assured tenancies introduced in England and Wales under the 1980 Act, whereby landlords could operate assured tenancies only with the approval of the Secretary of State.
We still believe that a registration scheme would be the most effective means of ensuring that an expanded private rented sector operating assured tenancies offers good quality management and standards. The Government have accepted the desirability of a registration and monitoring system for housing associations and of a system of approval by Scottish Homes for landlords taking over public sector housing under Clause 2. Likewise landlords seeking to take over public sector housing under Part III would be subject to the approval of Scottish Homes, and Scottish Homes may revoke its approval if the landlord proves unsatisfactory.
As in all these cases the only landlords operating in a deregulated system who will not be subject to any form of scrutiny are arguably those who are most in need of control —private and, for the most part, very small or individual landlords who are currently operating under the existing system and of whom a significant minority are characterised by an inability to offer reasonable management or decent housing standards. All of us have come across this frequently. While Part II of the Bill offers some limited individual right to the tenant, this is no argument against the proposal for a code of practice. Even with the existing protection of the Rent Act, the individual tenant is all too often deterred from seeking to enforce his rights because the process of enforcement proves too intimidating and costly. The code of practice proposed in the amendment would assist the individual by providing a mechanism by which the tenant could take his complaint to a third party.
The amendment allows the Secretary of State to appoint an appropriate body to monitor the operation of the code of practice, to receive complaints about breaches of the code of practice and to ensure that it is enforced through the courts if necessary. In the view of a number of organisations, including Shelter, the most appropriate body would be the local authority. In some parts of the country
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Scottish Homes would quite definitely be the appropriate body. A code of practice would provide a landlord with guidelines as to the reasonable management of his property. Responsible landlords should welcome this guidance. It would make competition a great deal fairer and would not permit the landlord to allow his property to deteriorate, which in the short term might be a good thing from his point of view. The content of a code of practice would be for the Secretary of State to determine, but we would envisage that it would contain guidance on management, repair and maintenance standards and on tenants' and landlords' rights and obligations.
My introduction of the amendment has been long. I am grateful to those organisations which provided advice. It is an important amendment for the tenant, especially for the small tenant not living in property owned by one of the larger organisations such as a local authority or Scottish Homes, and who is therefore more likely to be open to exploitation. I beg to move.
Lord Sanderson of Bowden: My Lords, before I answer, may I ask the noble Lord, Lord Carmichael, whether he was also speaking to the other amendments in the group?
Lord Carmichael of Kelvingrove: My Lords, yes. I should have said that I was also speaking to Amendments Nos. 52 and 53.
Lord Sanderson of Bowden: My Lords, I am most grateful to the noble Lord. I am sure that your Lordships will not he surprised when I tell the House that I shall not accept the amendments. However, I shall probably speak for even longer than the noble Lord, Lord Carmichael.
We believe that it is both unnecessary and contrary to the central principles of the Bill to impose a code of practice upon landlords, when there is already adequate provision to protect the interests of both private sector and tenants' choice tenants. It seems to me that the new clause set out in Amendment No. 44, proposing a code of practice, reflects the unjustified view that all private landlords need to be subject to onerous checks and controls on their activities.
The fact is that the vast majority of private landlords fulfil all their responsibilities adequately, and the Government, through the Bill before your Lordships, are taking active, positive steps to deal with bad practice where it arises. We are, for example, reactivating and strengthening the landlord's repairing obligation set out in Schedule 10 to the Housing (Scotland) Act 1987. We are also giving every assured tenant a right to a written statement of the terms of his tenancy, which will ensure that both landlord and tenant are clear about their respective obligations, and will make it easier to enforce them should a dispute come to court. The fundamental aim of Part II of the Bill is to revitalise the private rented sector. By enabling landlords to receive a proper rate of return, we shall ensure that they receive enough in rent income to keep their property in a proper state of repair. The removal of rent control will also encourage a better balance between supply and demand in private renting. This

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will put more power into the hands of the tenant —the consumer —thus forcing on bad landlords the choice of either improving the service they provide or failing to let at all.
I am convinced that this straightforward approach will effectively oblige landlords to fulfil their responsibilities. This should be contrasted with the code of practice proposed, I fear, by this amendment. It would tackle in a very heavy-handed way the problem of a relatively small number of private landlords who do not fulfil their repair and maintenance obligations.
As regards Amendment No. 52, I support the principle that landlords approved as receiving landlords for the purposes of tenants' choice should, so far as it is reasonable in the circumstances, cooperate with local authorities in the discharge of their functions relating to homeless persons under Part II of the Housing (Scotland) Act 1987. But I believe that Scottish Homes should, and will, have regard to local authorities' capacity for carrying out their functions relating to homeless persons when it considers applications for approval by prospective new landlords.
Scottish Homes will want to be satisfied on a wide range of other points before such approval is given. However, I believe that it should be left open to Scottish Homes to take into account such factors as it considers reasonable in each case before it issues any approvals under Clause 54. I do not believe we need —or should spell out —such factors on the face of the Bill, or that we should in any way seek to restrict Scottish Homes's discretion. I suggest therefore that the amendment is unnecessary. It is also undesirable, in my view, because it would tend to highlight just one of the many points to which Scottish Homes might have regard in reaching its decision.
I do not think that amending Clause 54 would be the right way to give statutory expression to the policy intention here. It would be simpler and more direct to amend Section 38(a) of the Housing (Scotland) Act 1987 to include approved tenants' choice landlords as bodies which should have an obligation, if requested, to co-operate with local authorities in exercise of their duties under the homeless persons legislation.
I remind the noble Lord that tenants' choice is all about individual tenants opting for a new landlord. Therefore in Part III of this Bill we are not talking about large-scale disposals of local authorities' housing stock; we are talking about transfers of individual tenanted property. In so far as the transferring tenants remain in the property, it will not be relevant in the local authority's search for accommodation for people it determines are homeless. However, where a transferred property becomes vacant, it will be in the interest of the new landlord to ensure that it is soon re-let. It would, therefore, also be in his interest to make the accommodation available to house homeless persons if the local authority needs the accommodation at the time.
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I believe therefore that mutual self-interest will, in practice, help to deliver the type of co-operation which the amendment suggests and which I would support. With that in mind, there is no need to set out in Clause 54 or Section 38 of the 1987 Act a requirement of the type suggested. I hope that from what I have said your Lordships will understand that, whereas I fully appreciate the concern felt about codes of practice and what should be put into practice, we feel that to include the requirement in the Bill is not the way to go about the matter.
I am aware that Amendment No. 53 has been suggested by the Scottish Institute of Housing, which is concerned that new landlords might offer transferring tenants a poor quality of service. The fears expressed by the institute and by the noble Lord, Lord Carmichael, that the absence of any statutory code of practice will lead to malpractice and maladministration are wholly misconceived. I say that for several reasons. First, I must emphasise that under the terms of Clause 54 Scottish Homes will have to approve all receiving landlords. I can guarantee that Scottish Homes will be a highly responsible body. Moreover, it will be subject to guidance and administrative rules and, as necessary, directions by the Secretary of State. Scottish Homes will therefore have the necessary powers to ensure that only landlords offering an acceptable level of service become approved landlords. In addition, the Secretary of State will be able to ensure through his oversight of how Scottish Homes exercises its functions that it undertakes its approval role sensibly and properly.
I can assure noble Lords that before Scottish Homes approves a landlord as a receiving landlord under Clause 54 it will wish to be satisfied that it is a stable and responsible organisation with a long-term commitment to the provision of rented housing for those who need it, and to a good level of service to tenants, and that when a vacancy arises it would normally be prepared to keep the stock available for renting at rent levels within the reach of those with income levels characteristic of that part of the population currently housed by the public sector.
I say "normally" because there may be occasions when it will be entirely sensible, for example, for a landlord to sell the property. The Clause 60 requirement for Scottish Homes's approval for first disposal will be an effective safeguard. However, all that can be achieved without a code of practice as such and without such a code being enshrined in statute. If Scottish Homes is to carry out, in the most effective way possible, its functions of approving receiving landlords, it must have flexibility and freedom of action. It would be unreasonable to expect the same criteria to apply when Scottish Homes comes to consider applications for approval from, let us say, private sector companies, or cooperatives or community housing associations set up by the tenants themselves. Nor would it be sensible for universal hard and fast rules to be laid down, for example, for rent and service levels and on rights of succession, exchange, and tenant participation.
Let me repeat that under the tenants' choice provisions in Part III no tenant will be pressed into

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changing his landlord against his will. The tenant will need to approve the initial approach by the prospective new landlord to his existing landlord and the lease which the prospective new landlord offers him before the sale can go ahead.
Once the lease has been agreed, it cannot be changed without the tenant's agreement. One of the factors which Scottish Homes will take into account before approving a landlord will be the level of information and advice he is prepared to make available to assist tenants in reaching a decision. Of course Scottish Homes will have an important role to play in providing information to tenants. In practice therefore several protections for the tenant are built into the procedures. To impose a statutory code of practice over and above those safeguards is unnecessary and undesirable. I hope and believe that when considering the assurances that I have given about the way Scottish Homes will go about the approval process and the guidance which it will receive from the Secretary of State, noble Lords will agree that the amendment is undesirable and should be withdrawn.
I have gone on rather a long time, but I feel that this is an important area which I know was discussed at length in Committee. While I am rejecting the amendment, I hope that from the answers that I have given noble Lords will understand the spirit with which we propose that Scottish Homes should advance.
4.45 p.m.
The Earl of Selkirk: My Lords, I agree with the noble Lord that Schedule 10 of the 1987 Act is a pretty full schedule. I should not have thought there was any complaint about that. But a point was raised earlier by the noble Lord, Lord Carmichael, on how the tenant enforces the provisions of Schedule 10. I shall not say that they are all ill-tempered landlords or ill-tempered tenants, but such landlords and tenants exist on both sides. What means does the tenant have? Has he got to go to the sheriff or will Scottish Homes help the enforcement of such repairs as may well be absolutely necessary and necessary in haste?
Lord Taylor of Gryfe: My Lords, I am sure that with the representations that have been made to many of us, notably from the Institute of Housing in Scotland, people will be somewhat reassured by the statement which has just been made by the Minister. The only point of doubt is this. All right, the guidance will be given; directions may be issued by the Secretary of State to Scottish Homes. But there are no criteria in these general statements against which the landlords will be judged.
Although the Bill as it stands provides for the approval of landlords by Scottish Homes, it does not provide specific criteria. The general statement that has been made is extremely welcome. I wonder whether the Minister might think it could be more satisfactory and allay the concerns of the Institute of Housing if criteria were established which could offer guarantees of decent treatment to tenants. I am not suggesting that all landlords are rogues, although
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there is a tradition in Scotland which assumes that. I am not arguing that point at this moment. I am simply saying that the Minister should give due weight to the very deep-rooted concern of the Institute of Housing, which is not a party political body. Then people will know what are the criteria on which these approvals will be judged. That is all.
Lord Sanderson of Bowden: My Lords, by leave of the House, of course I think I see what the noble Lord, Lord Taylor of Gryfe, is aiming at. I had hoped that by the long statement I made he would understand that we are just as keen to deal with the situation to which he refers as he is. But it is all in the method of doing it.
I think that both at Committee stage and on Report we have a genuine difference. The criteria which the noble Lord mentions against which matters should be judged will be mentioned in the individual approvals. Any criteria designed to cover every possible transfer would be too general, I fear, to be effective.
Perhaps while I am speaking I might answer my noble friend Lord Selkirk, who asked me how a tenant enforces Schedule 10. The answer is that it is up to the tenant to take action himself through the sheriff court.
Lord Carmichael of Kelvingrove: My Lords, I think the Minister did his best to try to satisfy some of the points which were raised. He must be thinking that there is something wrong with the Bill in that it does not completely satisfy everyone. I believe that part of the problem is that the whole Bill is based on the idea that supply will meet demand. We are a long way from that. Although the Minister is smiling and thinking that when this Bill goes through the demand will be met, I think it will need a few more Bills in this House and in another place before the supply and demand in Scotland are in any way balanced. In some ways people go for the standard of living, and the demands of people increase.
The problem about this Bill is that, as I said, I would be happy if Scottish Homes was responsible for monitoring the code of practice in certain areas. In other areas it would be the local authority. Plenty of flexibility is allowed for in the amendment which we have put down. Therefore, it is rather disappointing that the Minister did not look a bit more closely at it, or at least that he was not willing to concede anything.
We certainly accept that Scottish Homes is a responsible body. If it is not a responsible body, our housing situation will become even worse in the next decade or so than it is now. The entire Bill assumes that people will be responsible. Even in his last intervention the Minister suggested that people who felt that they were hard done by by a landlord should take him to the sheriff court. But we are trying to deal with peripheral people, the people on the edge. They do not want to go to the sheriff court. It would be far too expensive for them.

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The Minister has already rejected the idea of a housing tribunal as suggested by the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Morton of Shuna. At some point we shall need to get down to establishing the old wind and waterproof kind of system because there are too many houses still
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outwith the good public sector. I include the SSHA in that. There are still too many houses in many parts of our inner cities that are so abominable that they require a code of practice. I am sorry that we have not been able to go further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 [Right conferred by Part III]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 45:
Page 30, line 42, after ("Homes") insert ("or public sector landlord").
The noble Lord said: My Lords, the amendment seeks to address the very principle of Part III of the Bill —the principle of choice. The amendment aims to give the tenants of public sector landlords and approved landlords equal rights when choosing a new landlord. The exclusion of public sector landlords from becoming receiving landlords undermines the declared objective of tenants' choice. I am sure the Minister must have read the many submissions and the analyses that have been written about the desire of the vast majority of public sector tenants to stay with their local authority landlord, or, if they are moving from the SSHA, particularly in the new towns, to move to an approved public sector landlord.
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. But the principle of choice should not be the ability of local authorities to acquire other property. That is not the issue. The issue is the ability of any public sector tenant to choose the local authority as his new choice of landlord. The choice is supposed to be for the tenant.
Recent surveys of tenants in Scotland, as I mentioned earlier, show that in the Scottish new towns an overwhelming majority would wish to have the choice of moving to a local authority landlord with tenants' choice proposals made quite clear. If widespread choice is to be available to tenants in the public sector, they should not be denied the right to choose their local authority. Equally, if tenants of approved landlords are dissatisfied with their services, they should be able to have a true choice and be able to transfer to another landlord, either an approved landlord or a public sector landlord. As the Bill is presently written, if an approved landlord decides to sell acquired properties to another landlord, the tenants affected will have no choice in the matter. That destroys the whole principle of freedom of choice for tenants.
The Minister will have seen comments on this matter in the press. He will be aware that the results of polls of new town tenants showed that overwhelming majorities were in favour of coming under the local authority rather than under private landlords or Scottish Homes. In Cumbernauld there was a majority of 91 per cent.; in Irvine there was a majority of 88 per cent. I hope that the Minister is aware of those polls and believes that the people of Irvine, Cumbernauld and Kilsyth have a right to free choice. I beg to move.
Lord Grimond: My Lords, I am not sure that I have any standing in this matter. I do not fully understand
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the delightful anarchy under which your Lordships' House operates. It has come to my attention, as they say in legal circles, that the grouping of these amendments is not accepted. I am prepared to speak on this amendment so long as I am able to move my amendments. If that is inconvenient —
Lord Sanderson of Bowden: My Lords, as I understood it, the noble Lord, Lord Carmichael, was speaking to Amendments Nos. 45, 46 and 51. I believe that we shall be taking Amendments Nos. 54 and 55 separately.
Lord Carmichael of Kelvingrove: My Lords, the usual channels made the recommendation that Amendments Nos. 54 and 55 were important enough to be considered separately. I should have mentioned that matter. However, the negotiations had not quite finished when I stood up.
10 p.m.
Lord Sanderson of Bowden: My Lords, I have listened with interest to what the noble Lord, Lord Carmichael, has said concerning the amendments. The matter was fully considered in another place and in your Lordships' House in Committee. I continue, however, to be unable to recommend that any of these amendments be accepted.
The first three amendments would have the effect of allowing transfers to take place to, or back to, a public sector landlord. As I have previously stated in the House, such a provision would be wholly out of line with government policy, which is geared towards easing the burden on local authorities —a burden exacerbated by the sheer size of stock already within the public sector. Indeed, the figures were mentioned at Committee stage.
If the amendments were to be accepted, we should be adding to the problems at present being experienced. It has been argued that, by not extending the provisions of Part III of the Bill to public sector landlords, the declared objective of giving tenants a choice is undermined. I do not accept that. These provisions will in practice give qualifying tenants an additional right to transfer to a new landlord if they so wish, and will give them the opportunity to negotiate, for example, the terms of the lease on offer by the new landlord. I repeat that there is no element of compulsion. The tenant will be able to withdraw his consent at any time before the sale takes place. These amendments would in my view totally reverse the policy to which we are committed and which we have made clear at all stages of this Bill. We do not want to increase local authorities' near-monopoly of housing stock in some areas. Our aim is to see a diversification of tenure.
Let me turn to the detail of the amendments. Amendment No. 45 would enable one public sector landlord to require another to transfer property to it. But the uncertainties which would arise, the management problems which local authorities could face and the general merry-go-round of transfers

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Which might result would be intolerable. No sooner would a tenant have transferred than he would be eligible to transfer again.
The right to acquire property under Part III of the Bill extends to property occupied by qualifying tenants under Clause 53(1)(a) who are secure tenants. But once tenants transfer under these provisions, they will be assured tenants. If, as Amendment No. 46 suggests, we add the words "or approved landlord" in line 42 on page 30, there would be no effect unless and until the definition of qualifying tenant was also amended. In practice, therefore. it would not be sensible to add the words suggested to the Bill because they would have no effect and would obscure the meaning of the clause concerned.
However, technicalities apart, the purpose of the amendment is clear. The intention is that tenants of approved private sector landlords should have the right to transfer to other approved private sector landlords (or Scottish Homes). Indeed, read with the previous amendment, the intention may have been to allow transfers hack to the public sector after the tenant has transferred under the Part III provisions from, say, a local authority to a private sector landlord.
I am, however, very concerned at the situation which would arise if this amendment was accepted. First, an approved private sector landlord would have the right to acquire a house from another approved private sector landlord if the tenant agreed. Can I emphasise that the selling landlord in this situation would be in the private sector. The selling landlord could, for example, be a tenants' co-operative, a housing association, or a building society. Although this body would own the property, it would be obliged, under this statute, to transfer it if the receiving landlord wished and the tenant agreed. It is a very different matter, I suggest, from our legislating here to determine the future of publicly owned property, now to suggest that privately-owned houses should be transferred without the agreement of the owner. I believe this is totally unacceptable, and that the House will agree with me on this.
Moreover, the wording suggested would have very wide repercussions. Not only would it cover houses transferred to approved landlords under the Part III provisions, but it would also apply to other houses owned by approved landlords. I doubt if anyone in this House would wish to undermine the position of non-public sector landlords in this way.
For these reasons, therefore, I strongly oppose this amendment. If it were agreed, there would be unacceptable instabilities in the housing market, even greater prospects of an accelerating merry-go-round of property transfers, and very considerable problems for both public and private sector landlords in managing and maintaining their stock. I hope therefore that noble Lords will be prepared to withdraw the amendment.
Finally, Amendment No. 51 is consequential on Amendments Nos. 45 and 46. It again attempts to widen the scope of Part III of the Bill to enable
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islands and district councils to acquire stock from others in the public sector. The same arguments against its acceptance apply.
There is a point which I should like to raise which I feel is quite important. That refers to a quotation attributed to me in a document produced by CoSLA. I wish to make the point about the briefing which was circulated by CoSLA for this debate. It attributes to me at Committee remarks which, as Hansard shows, I did not make. I strongly deprecate that particular reference to me, which both misrepresents me and may have misled your Lordships. It refers to remarks attributed to me about polls but which I think if one reads Hansard, should probably be attributed to the noble Lord, Lord Carmichael.
Lord Morton of Shuna: My Lords, before the noble Lord sits down perhaps I should make it clear that I have a copy of the CoSLA briefing. I do not know whether the Minister has a copy. I am looking in vain for any reference to the noble Lord having said anything about polls. Therefore he has a different brief from the one which I have. The only reference to the noble Lord is a quotation from what he is alleged to have said beginning:
"Sections 2(1)(c) and 9 of the Housing (Scotland) Act 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".
I think that that sounds like something that the Minister may have said, without having an absolute recollection of what he did say.
I should like to ask the Minister whether the freedom of tenant's choice is rather like the freedom which the original Model T Ford gave to its purchasers — they could choose any colour so long as it was black. This is really the same situation. A tenant may want to transfer, say, from a new town to a local authority and the local authority may be willing to accept him, but that freedom of choice is being denied by the Bill. Perhaps the noble Lord can explain why that is so necessary.
Lord Sanderson of Bowden: My Lords, I must make it clear that I now have the document from CoSLA in front of me. It is in connection with Clause 53, page 30, line 42. It says:
"When this amendment was tabled during Committee stage the Minister. Lord Sanderson of Bowden, said: 'Recent surveys of tenants in Scottish new towns show an overwhelming majority would wish to have the choice of moving to their local authority under tenant's choice proposals ".
That I did not say.
Lord Morton of Shuna: My Lords, perhaps the noble Lord will give way for a moment. He has a different brief from that with which I have been provided by CoSLA. I think that we had better leave the matter there.
Lord Sanderson of Bowden: My Lords, I should like to make that point absolutely clear and put it on the record. So far as concerns the question of choice, I think that we have made it very clear. Indeed, at Committee stage I was able to give figures about

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various local authorities where the public sector housing stock in such places as Monklands district was very high indeed.
It is the Government's wish to let people of their own volition have further choice; that is, to move outwith the local authority and into any other housing that they would like. That is the view that we take in this Bill. It was implicit both at Second Reading and at Committee stage. Now again at Report stage it is clear that that is the Government's view. Under those circumstances I have to reject this amendment.
On Question, amendment negatived.
[Amendment No. 46 not moved.]
The Earl of Arran The Earl of Arran moved Amendment No. 47:
Page 31, line 3, at end insert—
("( ) In subsection (1) above, "heritable proprietor" includes any person entitled under section 3 of the Conveyancing (Scotland) Act 1924 (disposition by uninfeft person) to grant a disposition.").
The noble Earl said: My Lords, this amendment covers a technical conveyancing point. It is intended to ensure that the expression "heritable proprietor" for the purposes of the tenants' choice provisions will properly cover all public sector landlords who are or may be in conveyancing terms "uninfeft proprietors". That is to say, they have become proprietors by Act of Parliament but have not completed title in their own name in the Register of Sasines or land registers. A similar definition applies for the right to buy in Section 82 of the Housing (Scotland) Act 1987 and I believe it is right to keep the two procedures in parallel as far as possible. I beg to move.
On Question, amendment agreed to.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 48:
Page 31, line 44, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, I have again tabled this amendment because it is a good one. It arises out of my concern for the way that things are shaping in many rural areas of Scotland with regard to housing for the people who live and work there or who wish to do so.
As is the case in so many areas, districts and parishes of Scotland, a number of people in agriculture live in tied houses. It is still a very necessary feature of the whole industry. The people who work on the farms and live in the tied houses in effect provide their own housing all their lives without receiving any subsidy from the Government. In the main they are satisfied to do so and it increases the efficiency of the industry.
However, it is necessary that they should have a house to which they can retire. In my area the old county council of Angus recognised that need and built a number of small houses for retired workers, and rural workers who have lived in tied houses have preference in the number of points allotted when it comes to retirement. That creates great stability in the industry and gives security to the people working in agriculture and living in tied houses. That is a very important point.
In the previous housing Bill the Government refused absolutely to disallow the sale of retirement houses. The only possible reason for a person wishing to buy a retirement house is so that their heirs can sell it after the parents die. In order to get out of that situation, the Government said that if the houses were fitted with certain fitments for the benefit of old people, such as rails and a bathroom and so on, they would then be regarded as a special case. Again, the Minister very kindly sent me a letter providing more information, showing that no district in Scotland had reached sales of one third of their houses in the rural areas. That appeared to me a strong argument for the one-fifth position. However, I was glad to have the information.
More and more people need reasonable housing in rural areas. Because of the high prices of houses, a great many people in London and in the high-priced areas sell their houses there and are able to purchase houses in the country areas. They do them up and make very fine houses out of them, but they make them unavailable for the local people. I know that the Government recognise that factor. I should like the Minister to give the assurances that he kindly gave me in a letter. That comforted me a little. It would be nice if he repeated them here. The main assurance was that the Secretary of State would consider the whole district down to village level. While that does not answer my amendment, it is a considerable concession. Although it would be far better to take the amendments as a whole, I hope that the Minister will he able to satisfy the House that he is at least doing something to alleviate the undoubted troubles which the new circumstances are bringing to country areas. I beg to move.
10.15 p.m.
Baroness Carnegy of Lour: My Lords, I shall listen with very great interest to what my noble friend says when he replies to the noble Lord, Lord Mackie. I too have our homeland of Angus in mind where there have been groups of houses built in quite small clusters and in particular in villages where people who are retiring from working in the countryside wish to go. The nature of these clusters of houses is extremely important to the way that people live. I have not seen the details of the letter. I do not know what my noble friend has said about small areas coming within the one-third figure. If so, those small clusters could probably be protected in the way that the noble Lord, Lord Mackie, has in mind. I shall listen to the reply with much interest. It sounds extremely important to me.
Lord Sanderson of Bowden: My Lords, I have listened carefully to what the noble Lord, Lord Mackie of Benshie, has said. Indeed, I am sure that with his permission I shall be able to send a copy of the letter that I wrote to him to my noble friend Lady Carnegy of Lour.
As I understand it, the intention of these amendments is to make it easier for areas to be designated as rural and thus be taken outwith the scope of the tenants' choice provisions. Amendment No. 49, however, simply appears to dilute the clarity of the current provision. The Secretary of State

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would continue to have the discretion implied by the word "satisfied" on page 32, line 1, and I cannot recommend that it be accepted.
Amendment No. 48 seems intended to place an obligation on the Secretary of State to make an order designating an area as rural when more than some fixed proportion—at present one-third, but one-fifth is suggested in the third of these amendments—of relevant houses have been acquired or purchased. However, the second requirement before an order can be made—that is, that the Secretary of State should be satisfied that an unreasonable proportion of houses sold are being used for such purposes as providing holiday accommodation—remains in place. So the change suggested, from "may" to "shall", would in practice be meaningless, again because the Secretary of State would still have the discretion to make, or not to make, an order as at present.
Amendment No. 50 would replace the present proportion of one-third of relevant houses with one-fifth in the first stage of the process of determining whether an order should be made. I believe that this desire to reduce the threshold is based on a mistaken idea of what is meant by the term "area". The noble Lord, Lord Mackie, referred to that. As I said at an earlier stage of the Bill's consideration, we deliberately did not define that term in order to achieve as much flexibility as possible. Thus "area" could be district-wide or as narrow as the smallest hamlet, as the noble Lord said. It will be for local authorities to determine how and where they wish to draw the boundaries; and the present requirement that one-third of the houses must be sold should not be an insuperable problem given the flexibility of the term "area".
I hope that, having heard what I have been able to repeat and what I wrote to him, the noble Lord will understand th4t the Government are serious about this problem, understand it and, I hope, are measuring up to it.
Lord Mackie of Benshie: My Lords, I have listened to the Minister with great interest and understanding. I am glad that he understands the problem. Certainly the terms that he has laid down will do a great deal to alleviate the problem in rural areas. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 49 and 50 not moved.]
Clause 54 [Persons by whom right may be exercised]:
[Amendments Nos. 51 to 53 not moved.]
Lord Grimond Lord Grimond moved Amendment No. 54:
After Clause 54, insert the following new clause:
("Rights of Scottish Special Housing Association Tenants.
.—It shall be the right of any tenant of the Scottish Special Housing Association whose home is transferred to Scottish Homes under section 3(1) above to decide whether his home shall continue to be vested in Scottish Homes or whether it shall be transferred to—

(a) the district or islands council in whose area it stands; or

(b) any approved landlord.").

The noble Lord said: My Lords, this amendment arises out of certain difficulties in Shetland which are well known to the Government. I wish to make two major points. The first is that the amendment concerns choice. We have already discussed choice this evening. I very much agree what was said by the noble Lord, Lord Morton of Shuna, that, when it comes to the practicalities, choice to the Government appears to mean, as it did to Ford, that you can have any colour so long as it is black. Here is a clear occasion where local people have expressed a strong choice, but the Government appear to be dragging their feet. I do not understand why, and I hope that the Minister will be rather more sympathetic and forthcoming.
My other point is that this concerns a situation that occurs in Shetland. They are islands and it is not always convenient for the bodies on the mainland to exercise their authority in fairly remote islands. The genesis of the trouble is that some houses in Shetland belong to the Scottish Special Housing Association. The SSHA leaves their administration to the local authority. This has not proved an altogether satisfactory arrangement and the Scottish Special Housing Association now want to get rid of these houses.
I stress that it was clearly understood that there are options in the letter which the SSHA wrote to the tenants concerned. It set out a number of options. I am referring to a letter dated 18th December 1987. One of the options was to hand over the houses to the Shetlands Islands Council. There is no doubt that the option which the SSHA hoped the tenants would accept was to transfer the houses to the Hjaltland Housing Association—I spell that for the benefit of those who are not familiar with the old Norn language. It is a Shetland housing association; the word "Hjaltland" meaning "Shetland". However, when a vote was taken after various delays and some confusion, of the number who voted (only 57 per cent.), 70 per cent. wanted to transfer to the local authority as tenants; 20 per cent. wanted to stay with the SSHA; and no one explicitly said that they wanted to transfer to the Hjaltland local association.
I should like to make clear the fact that I do not believe that that implies any criticism of the association, the chairman of which is a fine man and I have no doubt that it is a good association. Nevertheless, there was a clear choice and a clear answer. The great majority of tenants wanted to be administered locally by their own local authority. They may have been right or they may have been wrong. I hold no particular brief for local authority housing; I believe that in certain cases it is right but that in others a change is perhaps due. However, there is no doubt that that is what the tenants wanted.
I understand that the reason for objecting to putting the decision into operation is that the Government have now suggested that if it were done the resources of the local authority would be overstretched. It has been said that the administration of the houses which are already in the hands of the local authority has not been perfect. That might be a problem if nothing was done to meet it but, no doubt, if the houses were transferred to the local authority it

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would take on new staff or whatever was necessary to discharge its obligations as a landlord.
On the other hand, we are now told that the SSHA, which clearly wishes to withdraw from Shetland and was going to do so, has now said that it will stay on. It is widely believed that that has been done only because of the embarrassing situation in which it did not receive the answer which it wanted and in which the Government are being embarrassed by being forced to deny people what is clearly their first choice. In any event, the SSHA cannot stay in Scotland for ever and it admits that it is not in a very good position to look after the houses. In fact, it has never tried to do so, because it delegated administration of the houses to the local authority.
I should like to draw the Government's attention to the fact that they have said that they do not have a blanket approach to such matters. If ever there was a case for making an exception to the general rule surely it is Shetland. I do not deny that my new clause is. so to speak, a gloss on Clause 54. However, Shetland and other islands are in a different condition to the mainland. I believe that a large bulk of the island area is in a somewhat different position to that of the mainland of Scotland.
I have no particular views about the amendment. If anyone wishes to strike out the words "district or" that is acceptable so far as I am concerned because it will not affect Shetland. However, I am concerned because I do not understand why the Government have raised difficulties in this respect. On their own showing, they want choice; they continue to talk about choice. They admit that Shetland is in a difficult position. They admit that mistakes have been made and that far too little time was given to consult the tenants. Surely they must admit that, if there is any danger of the local authority being overstretched, there is an even greater danger of the SSHA or its successor being overstretched. I hope that they will look at the matter again. I beg to move.
Lord Morton of Shuna Lord Morton of Shuna moved, as an amendment to Amendment No. 54, Amendment No. 55:
In paragraph (a), leave out ("district or").
The noble Lord said: My Lords, the amendment is designed to confine the issue to Shetland. That is not to say that I or my noble friends Lord Carmichael and Lord Hughes have any objection in principle —
Lord Kirkhill: My Lords, I have no objection.
Lord Morton of Shuna: My Lords, nor, as I understand it, does my noble friend Lord Kirkhill have any objection to giving the tenants the choice of transferring to a district council if they wish to do so. However, obviously the Government do not regard "choice" as meaning "choice" but regard it as meaning something different. The choice is free so long as you decide to go to where the Government decide you should go. In this amendment we are trying to help the Government to allow the Shetland tenants of the Scottish Special Housing Association to do what they wish to do.
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The results of the recent survey were quite astonishing. According to the figures I have, a majority is given which makes the Government's majority in another place look rather silly because of the 130 houses, there are 117 tenants who wish to transfer to the Shetland island council. Of course, that is what is forbidden by the Government because that is a local authority and they are not to be allowed to do so. Three of them want to transfer to the housing association (which not being a Shetlander I shall not try to pronounce) and 10 of them were either undecided or could not be contacted. That shows a very decisive figure of choice which I suggest that the Government would ignore at their peril were it not for the fact that the prospects of anywhere returning more Conservative Members of Parliament seems to be rather restricted. No doubt the noble Lord, Lord Goold, has hopes but they are rather less high than Ben Nevis!
The position is obvious. The Scottish Special Housing Association has totally failed to provide a service which the tenants in Shetland regard as satisfactory. They want to do something. There is no reason, apart from the Government's obduracy, that they should not be permitted to do so. Shetland is rather far away even from Edinburgh and certainly from London. I should have thought that there is a great deal to be said for allowing the tenants of the 130 houses do what they wish to do. Otherwise we shall have a 1984 view of freedom of choice which is that you can do anything you like as long as you do what I like. For those reasons, I beg to move the amendment.
10.30 p.m.
Lord Hughes: My Lords, I support Amendment No. 55. I should like to make it perfectly clear that that is not because I would not have been happier still to see carried Amendment No. 54. However, the rejection of Amendment No. 45 means that Amendment No. 54 could not carry the district council part of it. As the noble Lord, Lord Grimond, has made perfectly clear, his intention in tabling the amendment was to state the position in Shetland.
During the war I was in the Orkneys for a time. When I was a Minister I was in the Faroes for a time. However, to the best of my recollection in the interval I have never been to the Shetland Islands. My only ground for supporting the Shetland Island's ideas is because, along with other Members of your Lordships' House, I met a delegation which included representatives of the island council and of the tenants of the SSHA. If I wanted to wish the Minister a tough time on the subject of Shetland, I would wish that he would meet those representatives because he would be a bold man if he insisted that he was not going to comply with their wishes.
However, the figures which were quoted by the noble Lord, Lord Grimond, have been updated by my noble friend. This was a survey which I believe was carried out at the beginning of the year. Since then the figures have changed slightly. The number of houses which the SSHA owns in Shetland has fallen from 130 to 125. So another five houses have been sold during the course of this year.

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I was in touch with the SSHA by telephone today to find out exactly what the long-standing position has been. They originally built 169 houses in Shetland. That compares with more than 2,000 which have been built by the islands council. So the argument which the Minister put forward; namely, that it would be putting an intolerable burden on the local authorities to transfer the houses which were referred to in Amendment No. 45, certainly does not apply in Shetland, because I am quite sure that to increase 2,000 houses by a further 169 could not be considered to be an intolerable burden.
Of the original 169 houses built, 44 have since been sold, so there are now 125 left in the ownership of the SSHA. Of those, about 80 per cent. are in Lerwick, that is 136 houses, and the other 33 were spread over a number of small sites throughout the main island of the Shetlands.
As I understand the position, a number of years ago the Scottish Special Housing Association would have been delighted if it could have transferred the houses to someone else. As it is, the factoring of the houses is done on its behalf by the islands council. I was told by a representative of the islands council that the sum it was being paid for factoring the houses fell far short of its actual expenditure, and it is negotiating an even higher factoring fee, which makes the position even less attractive to the SSHA.
One of the reasons why the tenants decided in such overwhelming numbers to transfer to the islands council was that as regards collecting rents the islands council looked much more like a landlord than somebody miles away in Edinburgh. But there were other reasons which made them aware of the fact that they were not islands tenants: first, their rates were higher than those which the islands council charged, and, secondly, the arrangements for repairs to their houses were much less satisfactory because the islands council did not have sole discretion in the matter when it was a question of a major repair, and the reference back to Edinburgh inevitably meant delays. For those reasons the tenants think they would be much better off if the houses were owned by the islands council in addition to being factored by them.
As has been made quite clear by the Ministers in replying to Amendment No. 45, that would be contrary to their primary purpose which is, notwithstanding tenants' choice, to reduce the number of houses in local authority ownership. However, I would suggest that there is no comparison between the situation in Shetland and the situation in the district councils throughout Scotland. There is a strong case for giving different treatment to the islands. After all, the very existence of the islands council was a recognition of the fact that the islands are different from the rest of Scotland. When local government was reorganised—and I was involved in that at one stage—the recommendations of Wheatley were overturned so that island councils would in fact be set up as all-purpose authorities. Although the cities of Edinburgh, Glasgow, Dundee and Aberdeen all wanted to be all-purpose authorities, that was denied.
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Because the island situation is totally different, an all-purpose authority was granted. I do not expect that the Minister will change his mind at this stage even for these very special conditions in Shetland. I hope that the Secretary of State may be able to use the provisions referred to in the rural areas in considering the situation there, including Lerwick, together with a little Scottish Office judgment, so that the area can be excepted from the general provisions of the Act.
I apologise for having spoken at length, but I gave an undertaking to these people that I would put their case to the best of my ability in the hope that we might extract from the Government some undertaking to consider ways of dealing with this special situation. Out of the hundreds of thousands of publicly owned houses in Scotland, 125 in Shetland seek that special consideration be applied to them. I hope that the Minister's smile and the fact that his head is nodding up and down and not from side to side is an indication that he may be able to offer them something at the end of the day.
Lord Taylor of Gryfe: My Lords, the Shetland islanders must be proud at the weight being given to their representations in the House at this late hour. It is a reflection of the seriousness with which they view their position as an island community. I too receive representations from Shetlanders and should like to associate these Benches with them. I hope that their special case will receive special consideration from the Minister.
Lord Sanderson of Bowden: My Lords, I have been very interested in the contributions to the debate. Indeed, I am happy to answer on this matter which is obviously of great concern to the people of Scotland. My reply is quite full, because I think the subject has to be understood clearly by all concerned.
I have made clear in our discussion of Amendments Nos. 45, 46 and 51 that the proposal that tenants' choice should be extended to cover transfers to local authorities is unacceptable. We have already debated that. I am particularly concerned at the proposition in relation to SSHA tenants for two reasons. One is the difficulties that local authorities and their existing tenants might face if substantial numbers of tenants whose landlord at present is the Scottish Special Housing Association were to decide that their homes should be transferred to the district council for the area.
The Government have made it clear that the first priority is to ensure that local authorities give a better service to their existing tenants. To add to the management tasks of local authorities, some of which are not coping very well at present, we believe would be a move in the opposite direction.
My second concern is that the SSHA tenants have been subjected to a long campaign of misinformation and scandalmongering, which is the worst possible background to make important decisions about their future position. We have consistently made it clear that one of the important features of tenants' choice is that tenants should be presented with full and accurate information about any option that they are considering. I repeat that our aim in Part III of the Bill is to extend tenants' choice and to do this in a way

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that will tend to diversify ownership rather than concentrate it in one body. If we were to permit SSHA tenants to opt for the district or island council as their landlord, the percentage of stock in an area owned by the district or island council could, at least in some cases, increase substantially. This would contract rather than expand the diversity of choice available and would be undesirable as a general rule.
I believe, too, that the new clause as drafted may go rather further than the noble Lords intend. Under the tenants' choice provisions in Part III of the Bill, before a transfer can take place there needs to be a willing tenant and a willing new landlord. The wording of the new clause before us, however, would in practice oblige the district or islands council in paragraph (a) or the approved landlord in paragraph (b) to accept the transfer. This would be compulsory purchase in a somewhat unusual form. I very much doubt if all approved landlords would be willing to take on any and all ex-SSHA houses where the tenant wished to transfer to them.
To summarise, I believe this new clause is unacceptable both in principle and in a technical drafting sense. I hope that the noble Lord will not press it.
I now turn to the amendment to the amendment proposed by noble Lords opposite which affects Orkney, Shetland and the Western Isles. The noble Lord concentrated upon Shetland and made reference to discussions which have taken place on the future of SSHA houses in Shetland. The circumstances of this case where, as the noble Lord will know, special considerations apply, have been fully debated in another place. I will not therefore detain the House by reiterating the history at length but I wish to emphasise a number of key points. First, the Secretary of State's role in his relationship with SSHA in this matter is a limited one; namely, the question of agreeing or disagreeing where the SSHA seek consent to the disposal of any of their properties to other landlords.
The SSHA's initial proposal was to withdraw completely from owning their relatively small stock of houses in Shetland, and to achieve this by transferring the stock to—I cannot pronounce it—the housing association. If a majority of their tenants favoured transfer to Hjaltland Housing Association, the SSHA wished to provide an alternative for any minority of tenants who were not willing to transfer to that housing association. In the local circumstances it was considered that this could only be the local authority. However, I must stress that this was intended to enable the SSHA to achieve complete withdrawal and not a free-standing option.
The consultation with its tenants conducted by SSHA demonstrated that a large number of tenants are not currently interested in a transfer to that housing association as the noble Lord, Lord Grimond, made clear. In the light of the tenants' response, SSHA concluded that it could not withdraw from Shetland. Consequently, those tenants who are not prepared to transfer to that housing association will simply continue to be tenants of the SSHA and, in due course, of Scottish Homes.
10.45 p.m.
Lord Grimond: My Lords, will the noble Lord give way? The organisation will be wound up—will it not?—but they will continue to be tenants of a non-existent body.
Lord Sanderson of Bowden: My Lords, when I have finished my story I believe that the noble Lord will understand one or two of the points which have not been clear until now. Given these changed circumstances, further consideration of transfer of SSHA houses to Shetland islands council does not arise.
Turning from the history of recent events in Shetland, I do not necessarily include the islands council in the category of local authorities which do not give a satisfactory service to their existing tenants. I am unaware of evidence one way or the other. However, I embrace Shetland within my remarks about tenants having been subjected to misinformation about Scottish Homes. I do not believe that it would be right to introduce this new clause which will be likely to foster more misinformation which we have already seen.
I am aware that the tenants residents group in Shetland has carried out a further survey, which is claimed to suggest that many tenants are in favour of transfer to the islands council. I have serious reservations about the work of this further survey. First, there has been a lot of canvassing in Shetland on this issue in the last three months and it seems unlikely in present circumstances that tenants were well placed to offer fully informed views in the present climate.
Secondly, the residents group's questionnaire contains at least one serious error of fact, which will have misled tenants about the impact of the Bill. I shall make that point very clear now. The questionnaire says that the Bill makes it impossible for tenants to transfer to the islands council. That is simply not true. Scottish Homes has power under Clause 2 of the Bill to sell its houses provided it is done in accordance with arrangements made with the Secretary of State. This is the same position as prevails in relation to the SSHA and its tenants at present. No existing possibility is being closed off. Being told that transfer would be impossible in the future is bound to have influenced the views of tenants. This is important because the clear indication from the SSHA's consultation with its tenants at the turn of the year was that a very large proportion of tenants felt that they did not wish to be forced to take any decision at present.
The questionnaire is in other respects completely devoid of proper information about the implications for tenants of the choice canvassed. Full information is very important in cases such as this, and we have emphasised that it will be a requirement in relation to tenants' choice. The Shetland survey demonstrates a general problem in using short questionnaires which do not give tenants all the information they need to make a fully informed decision.
Scottish Homes will no doubt want to review in due course—this is the point made by the noble Lord, Lord Hughes—the arrangements for the

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management of its stock across Scotland as a whole, including Shetland. Within that review I expect that particular consideration will be given to the future management of properties which are factored by local authorities on the SSHA's behalf.
As the noble Lord, Lord Hughes, made clear in what was an extremely useful contribution to the debate, it is important to realise that SSHA tenants in Shetland are not managed from Edinburgh. The houses are managed by the island council. The current question is not about the management of the houses but about their ownership. Even if at some future date Scottish Homes decides to change the management arrangement, it is important to remember that there is a clear commitment that Scottish Homes will have a decentralised structure. If Scottish Homes took over the management of the houses, they would be managed from the appropriate local office. I hope that as a result of the way I have gone through this important point—and as I have responsibility for the islands and highlands I have a special interest—noble Lords who raised the matter understand the position clearly and can draw their own conclusions.
Lord Hughes: My Lords, before the noble Lord sits down, will he repeat what he said about the tenants being misinformed? I thought he said that the SSHA could transfer at this time to the island council. I may have misheard. Will he read that again?
Lord Sanderson of Bowden: My Lords, with the leave of the House, I was referring to the questionnaire which was sent out in the tenants' survey. The words were:
"This group, SSHARG, is concerned that tenants had to make decisions about transferring to a new landlord very quickly and feels that those tenants who opted for the Shetland Islands Council should be allowed to do so before the new Housing Bill makes it impossible".
I was trying to answer the point in regard to "makes it impossible". The questionnaire says this and it is wrong. Scottish Homes has power under Clause 2 of the Bill to sell its houses provided it is done in accordance with arrangements made with the Secretary of State. This is the same position as prevails in relation to the SSHA and its tenants at present.
Lord Hughes: My Lords, does that include selling to the island council?
Lord Sanderson of Bowden: My Lords, with the leave of the House, under the present arrangements which the SSHA operates, which will be transferred straight across to Scottish Homes, if a case is made to the Secretary of State under Clause 2 this could be possible with the Secretary of State's agreement.
Lord Morton of Shuna: My Lords, I find the noble Lord's information quite contrary to the information which I have been given. My information is that the Member of Parliament for Orkney and Shetland, Mr. Wallace, and others have been fighting for a long time
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for tenants to be allowed to transfer to the Shetland Islands Council. It is strange that the Minister says that this is perfectly possible subject to the approval of the Secretary of State. One can only assume that the Secretary of State has not given approval. As I understand it, the SSHA was eventually persuaded to visit Shetland and to hear the tenants' views. In April agreement was reached that the SSHA would approach the Government to allow at least the 55 tenants who had previously expressed a wish to transfer to transfer to the Shetland Islands Council. They were told that the Government had refused this proposal. Perhaps that information is incorrect, but that is the information I have had.
As regards the issue of percentages, I am told that the question which the tenants were asked by a Glagow-based advisory service was,
"If you had a completely free choice of landlord, who would you choose?"
and 117 people out of 130 chose Shetland Island Council. If the Minister is at all concerned about choice—or freedom of choice—and is not really living in a sort of George Orwell world, I should have thought that that might at least receive some consideration. But, as my amendment is rather restrictive, I ask leave to withdraw it in favour of the amendment tabled in the name of the noble Lord, Lord Grimond. No doubt the noble Lord will decide what to do with his amendment.
Lord Sanderson of Bowden: My Lords, before the noble Lord sits down, perhaps I may make something absolutely clear. What has to happen first is that SSHA has to produce a scheme which will be presented to the Secretary of State. The SSHA Chairman has made it clear to tenants that he did not recommend sale to the Shetland Island Council, but the option is open to SSHA—as it will be to Scottish Homes—to present a case if it wishes, having taken everything into consideration. I have no doubt that Scottish Homes will do so in its review of the arrangements of management. If that happens, then of course there is a way forward which may be the course that SSHA, and its successor body, Scottish Homes, will wish to adopt. Obviously this is something they would have to study and take due consideration of tenants' views.
Amendment to Amendment No. 54, by leave, withdrawn.
Lord Grimond: My Lords, perhaps I may now deal with Amendment No. 54. To begin with I must say that I do not accept the view that the Shetlanders have been misled by some conspiracy on the part of the local authority. First, the Shetlanders are not very stupid people; they are most unlikely to be taken in over the period of a year or more during which this matter has been copiously debated.
Secondly, if there was any attempt to bounce anyone, it was done by the people from SSHA who said that they must have an answer within a month—a position from which they had to withdraw. So I frankly repudiate that explanation. I return to the point—which I shall not labour because everyone

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who has been able to has spoken to it—that really this makes nonsense of the Government's protestations about choice.
Thirdly, the real reason why I wish to press this is that, if the matter was confused before—as the Minister has suggested it may have been—it is far more confused now. As I understand it, he said at the beginning that it was a matter of principle for the Government that no one could transfer from a private to a public landlord. He laid that down as an absolute principle. Then at the end he said that, if the Secretary of State agreed and it was recommended by Scottish Homes, they could do so.
The implication is that no Conservative Secretary of State would agree. Therefore we would have to wait at least until a change of government took place, because unless they were prepared to go against what the Minister has laid down as an absolutely firm principle, they could not agree to this. So I think that he is treating the Shetlanders with some lack of seriousness. He is not holding out any hope that they will get what they want—until at least we get a change of government or his Government change their ideas. I am afraid that I do not think that it is good enough to leave it at that and therefore I propose to test the opinion of the House.
10.59 p.m.
On Question, Whether the said amendment (No. 54) shall be agreed to?
Their Lordships divided: Contents, 12; Not-Contents, 27.

DIVISION NO. 4

CONTENTS

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Dean of Beswick, L.

Parry, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Falkland, V.

Ponsonby of Shulbrede, L. [Teller.]

Grimond, L. [Teller.]

Hughes, L.

Taylor of Gryfe, L.

Kirkhill, L.

NOT-CONTENTS

Ampthill, L.

Goold, L.

Beaverbrook, L.

Hooper, B.

Belstead, L.

Johnston of Rockport, L.

Blatch, B.

Long, V.

Borthwick, L.

Lyell, L.

Brabazon of Tara, L.

Mersey, V.

Cameron of Lochbroom, L.

Montgomery of Alamein, V.

Carnegy of Lour, B.

Renton, L.

Davidson, V. [Teller.]

Sanderson of Bowden, L.

Denham, L. [Teller.]

Selkirk, E.

Dundee, E.

Skelmersdale, L.

Elliot of Harwood, B.

Trafford, L.

Ferrers, E.

Trumpington, B.

Glenarthur, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Dundee: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at six minutes past eleven o'clock.