HL Deb 06 July 1988 vol 499 cc330-78

Consideration of amendments on Report resumed.

Clause 29 [Short assured tenancies]:

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 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 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 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 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—

  1. (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
  2. (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 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 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 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 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 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 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 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 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 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 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 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 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 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 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.

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.
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 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"). 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 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 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 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 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 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 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 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 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 —

  1. (a) may make different provisions for different types of houses, tenancies, landlords and circumstances:
  2. (b) shall impose a duty to comply with the regulations:
  3. (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 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 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 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.

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 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 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.

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 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 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 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 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 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 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 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 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 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 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—

  1. (a) the district or islands council in whose area it stands; or
  2. (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 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 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.

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.

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.

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 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 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 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 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.

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.
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.