HL Deb 20 July 1988 vol 499 cc1313-53

3.1 p.m.

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

Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report. —(Lord Sanderson of Bowden.)

On Question. Motion agreed to.

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

Lord Carmichael of Kelvingrove moved Amendment No. 56: Page 33, line 48, leave out from ("above") to end of line 3 on page 34.

The noble Lord said: My Lords, this is a small amendment but it carries considerable significance. Subsection 6(d) states: that the applicant would, within a reasonable period carry out such works as are reasonably necessary to put the house into the state of repair required by the landlord's repairing obligations". The existence of this assumption within the statutory formula for completing the market value is unnecessary. It is unnecessary because the market value should already have taken into account the state of repair of the house.

It is unrealistic because it is difficult to see how the district valuer is to be satisfied that works exist that, are reasonably necessary to put the house into the state of repair required by the landlord's repairing obligations". That could give rise to considerable dispute between an applicant and the local authority landlord. In addition, it is not clear that applicants shall, within a reasonable period. carry out any works to any house under the terms of the Bill.

The Minister sought to clarify that earlier by stating that valuations will be carried out on a new capital value basis rather than the customary and straightforward basis of valuation by comparison with the market transactions for similar houses in the area and that negative values arc expected to result. That renders this clause particularly damaging to the interests of the transferring local authorities.

Written as it is, this subsection would result in tenants who remain with local authorities in local authority housing paying for the cost of the transfer. The remaining tenants would continue to service the outstanding debt on transferred property and they could also be liable to pay part of the renovation costs on the property already assumed in this transfer value.

I should have said earlier that it has been agreed between the Minister and this side of the House that with Amendment No. 56 we should take Amendments Nos. 57 and 58. Therefore, perhaps 1 may speak briefly to Amendment No. 58. As well as imposing statutory restrictions on the market value of houses transferred under Part III, the Bill proposes the enforced sale of individual houses, initiated by approved persons or by Scottish Homes, to be effected at a price determined by an employee of the Government; that is, the district valuer would make the valuation for a branch of the government. We believe that that is patently unreasonable and contrary to natural justice.

This potentially could allow the district valuer to set unrealistic values and that would deprive public sector landlords of resources which could have been applied to the improvement and repair of the retained public sector stock. There could be disputes about the level of compensation payable to the owner of land or property being acquired by Scottish Homes compulsorily under the powers in the Bill. Why should public sector landlords be denied the same right of appeal when the provisions of the change of landlord scheme are applied?

One reason has been given. In Committee the noble Lord, Lord Sanderson, said in reply to a comparable amendment that it would be a wrecking amendment because of the delays which would be introduced with an appeals mechanism. We feel it to be an unusual innovation that potential delay is considered to be a reason to perhaps permit an injustice to a party whose assets are being transferred. I can think of no other example where it is the case that delay is a good enough reason to deny an appeal. I hope that the Minister has reflected on what he said earlier, that he will give some thought to this amendment and perhaps make some concessions. I beg to move.

Lord Morton of Shuna

My Lords, I speak in support of this group of amendments and deal specifically with Amendment No. 57. Due to the rules of the House it appears that it is not proper to speak after the Minister has spoken. Therefore, the Minister will speak last to his amendment, which seems a curious way to proceed.

There is considerable difficulty about the provision regarding valuation. It appears to be foreseen that in certain cases local authority houses will he valued at a negative value, or nil. That means that the local authority is to pay someone to take the houses away—in this case, Scottish Homes. The difficulty is that it leaves the local authority with the debt on the houses. In a case which no doubt the Minister has seen in today's Scotsmanthe point is raised that this might, in one instance in Edinburgh, result in about £4 million of debt left with no assets relating to it. That would mean either an extremely large increase on the rents of local authority homes in Edinburgh which are not being transferred to Scottish Homes or to sell to the private market instead of Scottish Homes. The private market, having a different valuation process, would be prepared to pay what could be called the proper market value.

The position here is that the market value as proposed, as we understand it and on the information with which I have been supplied, is on something known as the rent capitalisation technique. No doubt the Minister is fully aware of that. It is a method which has not been used in valuing local authority houses until now. It is of very dubious value, if I may use that word, when one has a situation where other people are prepared to pay quite considerable sums for blocks of houses which, under this valuation technique which the district valuers apparently intend to use, produces a negative value.

I suggest that there is something wrong when big private enterprise companies like Wimpey and others are prepared to pay millions for something as regards which the district valuer says that the local authority should pay millions for someone to take it off its hands. Therefore, there is a considerable worry that the technique which is being brought forward by the Government is grossly unfair to what at the moment are the local ratepayers who will be saddled with the Bill and the payers of business rates and the poll tax. What we are suggesting is a far better method with some appeal provision so that in a case of dispute the value can be considered by the Lands Tribunal. That is a method used in the Bill under Clause 2(5) for compensation payable to owners of land and other property being taken over by Scottish Homes if they are not local authorities. It seems to me absurd that it is not proper to use the same method when Scottish Homes are taking over from a local authority. Presumably the Minister, whom I know to be usually a very reasonable person, will agree and will accept our amendment.

Lord Hughes

My Lords, I have never heard of the procedure to which my noble friend Lord Morton of Shuna has referred. Was it under this kind of procedure that certain cemeteries were sold for 15 pence and which almost immediately had a value of several million pounds?

Lord Taylor of Gryfe

My Lords, on the face of it I should like to support the proposition put forward on the question of valuation by the noble Lords, Lord Carmichael and Lord Morton of Shuna. I am sorry to say that, despite the anger which was expressed in the columns of the Glasgow Herald by the leader of the city council and the fact that a lobby of Peers was to be organised to resist the inequities of the Government's proposal, the lobby did not reach me and neither was I briefed by the city council. It appears that it uses rather exclusive channels in expressing its anger and disappointment.

I refer to the statement made by Councillor Lally in which he said: Central to the amendment is a new valuation"— which is part of this discussion— which would create negative values for council houses. For example, he quotes the case of a house valued at £2,000 but requiring £10,000 worth of repairs. He continued by saying that: improvements would have a negative value of £8,000. Councils would then require to pay this sum to the new landlords when the house transfers.". On the face of it that represents to me a very considerable and undesirable burden on a local authority in disposing of a property as suggested in the Bill. I very much welcome the Minister's comments on that case.

3.15 p.m.

Lord Sanderson of Bowden

My Lords, in speaking to this amendment I also speak to Amendment No. 57. I begin by dealing with Amendment No. 56 which corresponds to amendments which have been discussed at earlier stages in the passage of the Bill through this House and another place. Subsection 55(6)(d) is I believe necessary to make it clear that, while the price on transfer should reflect the current state of the house to be acquired, it should also assume that the new landlord will, within a reasonable period, carry out works reasonably necessary to put the house into the state of repair required by the landlord's repairing obligations. Where a house has been properly maintained by the local authority, very little or no work will be necessary, and there will be a correspondingly minimal (or nil) effect on the valuation. But if the property is in a run-down state, I believe it right that the valuation assumptions should take the works necessary properly into account.

The legal effect of Clause 55(6)(d) is to require the district valuer to assume for valuation purposes that the applicant acquiring the property will reasonably promptly carry out works reasonably needed to fulfil his general repairing obligations under the Housing (Scotland) Acts, which apply to landlords of all kinds, plus any specific repairing obligations in the tenants' existing tenancy agreements with the landlord.

District valuers will take these obligations into account without the need for legislation, but only up to a point. Left without subsection (6)(d) it is possible that prices will be increased and would reduce the applicant's ability to remedy any legacy of disrepair left by the previous landlord. The new landlord would need to spend more to take over the property and would have less resources available for the necessary rehabilitation. As noble Lords will realise, therefore, Clause 55(6)(d) is largely a technical provision. However, I believe it is a necessary and useful part of this valuation clause.

I have, however, studied the briefing which CoSLA has provided to noble Lords, in particular the points made by Glasgow district council. As regards the point of the noble Lord, Lord Hughes, I have listened carefully to the arguments put forward in the House today against the idea of valuations being carried out on a capital value basis. In the light of the points made, and of recent further discussions between my department and the Inland Revenue valuation office, I have to say that in Scotland the capitalisation of rents of let houses is not an appropriate means of assessing market value. In practice, the fundamental basis of compensation for compulsory purchase of one kind or another under statute and case law since 1845 has been "value to owner". This concept is preserved in Clause 55(6), in the wording, … the price which on the relevant date the house would realise if sold on the open market by a willing seller". I would like, therefore, to correct previous references to valuations on a capital value basis and to put on record now that we will be inviting district valuers to follow the "value to owner" approach on tenants' choice valuations. I believe that this course of action will be welcomed by councils. I hope that noble Lords opposite will study what I have said in this regard and realise what announcement I am making today on this particular issue.

The purpose of Amendment No. 57 is to make clear that the property transferring under the tenants' choice provisions in Part III can have not only a positive or zero value, but also a negative value. While most houses in the public sector in Scotland have been maintained to a reasonable standard, there are some tenanted properties where this is not so. These properties now need significant renovation to bring them up to the desired standard. The cost of bringing such property into a reasonable state of repair may exceed the value of the property after the necessary rehabilitation work has been completed. In other words, if the new landlord were to pay any price for the property, or even if it was transferred to him at nil cost, he would face making a loss on the transaction. In such circumstances, no new landlord is likely to be willing to participate in the purchase of public sector housing under the powers in Part III of the Bill, or he would only be willing to do so in return for rent payments well above the going rate for such housing, and therefore well above the level which the tenant will be prepared to pay.

We see the tenants' choice provisions in the Bill being particularly attractive to those tenants in the minority of local authority housing which is in a had state of repair and who are therefore least satisfied with the service provided by the local authority. We believe that there should be no artificial impediment to such tenants changing landlords. If we did not specifically permit negative valuations, and if we did not oblige local authorities to make payments equivalent to the amount of the negative valuation, the result would indeed be an impediment to transfers.

This proposal has been described by some as asset stripping. I cannot agree. If a house is in such a poor state of repair that it would cost more to rehabilitate than the house would be worth when the work is done, the house in its present state is a liability to an authority, not an asset. In such circumstances rent payments are probably insufficient to cover the cost of the maintenance work necessary to prevent the house deteriorating further. The local authority would inevitably very soon have had to spend substantial sums to bring the property up to scratch. By transferring the house to a new landlord the local authority is relieving itself of the liability to meet such costs. The concept of negative valuation is therefore sensible and fair to all parties. I commend this amendment to the House.

There has been a certain amount of discussion about the cost of this matter to local authorities. I have been asked how authorities will be expected to treat payments to prospective landlords where a property has been valued in negative terms. I would expect authorities to make payments from their HRA capital account. The loan charges resulting will be taken into account in the determination of housing support grant, and thus where an authority is eligible to receive HSG it will recoup its costs.

Finally, perhaps I may return to Amendment No. 58, in the name of the noble Lord, Lord Carmichael. I have again considered carefully the thrust of the amendment but I cannot recommend its acceptance. It would give the Lands Tribunal for Scotland an appeal function if a public sector landlord disputed the valuation reached by the district valuer. I know that Glasgow District Council believes that the district valuer is not sufficiently independent to carry out the task set by the Bill. That is not a view I share. The district valuer acts in the public interest in the widest sense and I am completely satisfied as to the impartiality and independence of district valuers in matters of this kind. Moreover, there will be an undoubted benefit to the district valuers undertaking all valuations under the tenants' choice provision as this will lead to a high degree of consistency in valuations.

All these factors will combine to make an appeal mechanism wholly unnecessary. In addition, if we were to accept the amendment it would build into the procedure quite unacceptable delays, as has been mentioned by the noble Lord. Lord Morton of Shuna, and as such would seriously dissuade persons from seeking to exercise their rights. I cannot therefore accept this amendment. I have given it consideration. I believe I am right in saying that at the previous stage of the Bill I said I was looking at the matter in the light of the 1980 Act in a discussion in which I recall the noble Lord, Lord Galpern, took part. During the passage of that Bill the question of appeals on valuations in right to buy cases was raised. While the Lands Tribunal is being given an appeal role in a number of matters relating to tenants' choice provisions, its locus will closely parallel the role it discharges in right to buy cases.

I see no change in the situation from that date when my noble friend Lord Mansfield pointed out that the tenant could choose whether to accept the local authority's choice of valuer or the district valuer. Once the tenant had done that and the valuer had made his valuation it would be beyond appeal; so said my noble friend Lord Mansfield at that time. I see no good reason for giving the Lands Tribunal a wider role in the tenants' choice legislation, particularly as no volume of evidence has built up to suggest that the operation of the right to buy legislation is hindered by the absence of an appeal provision.

However, I am quite prepared to take the matter away. I shall consider whether at Third Reading I might bring forward amendments to bring the valuation procedures under tenants' choice more closely into line with those in the right to buy legislation in as much as they make provision for valuations to be undertaken by an agreed private valuer or the district valuer. This could allow some flexibility in valuation procedures. With this assurance I hope that the noble Lord, Lord Morton, will consider withdrawing his amendment.

Lord Carmichael of Kelvingrove

My Lords, it would be churlish not to be grateful for the Minister's statement that he has given the matter considerable thought. From what he said, it seems possible that some of our representations have not fallen on stony ground. For that we are extremely grateful. The noble Lord will also realise that as this is extremely complicated legislation we shall want to study his words carefully, see exactly what they mean in practice and naturally have some assessment from outside experts on the full potential of his words.

In these amendents. and particularly in Amendment No. 58, we are dealing with an important matter. I am glad that the noble Lord said that he will have another look at the question of appeal. He suggested that there had been few appeals under earlier legislation. In this respect we are not necessarily dealing with troublesome people. After all, the local authorities are advised by their own professional valuers who are not likely totally to disregard the assessmentof the district valuer. I have had dealings with district valuers. I used to telephone them and ask them to have another look at a problem. I think in particular of a local gasworks of which we were disposing. It was rather important that the district valuer took a look at the potential use of the ground.

I can give one example in Glasgow which became a quite notorious case. A block of houses was ultimately demolished, perhaps rather sadly. The value given by the district valuer was not very high, and a housing firm offered a slightly better figure. The district valuer is by no means infallible. However, with the promise the

Amendment by leave, withdrawn.

Lord Sanderson of Bowden moved Amendment No. 57: Page 34, line 3, at end insert— ("( ) Where the circumstances are such that, on the relevant date, a house, if offered for sale in accordance with subsection (6) above, would not realise any price then—

  1. (a) for the purposes of that subsection, the price shall be taken to be—
    1. (i) such amount as would require to be paid to Scottish Homes or a person who, on the relevant date, was approved under section 54 above in order that it or he would willingly so acquire the house, expressed as a negative: or
    2. (ii) where Scottish Homes or that person would willingly so acquire it for no consideration, nil;
  2. (b) the market value of the house may he determined under that subsection to he a negative value or nil;
  3. (c) where the market value is so determined, the reference in subsection (5) above to a price equal to the market value shall be construed accordingly and references in this section to selling a house and the purchaser of it shall he construed respectively as references to disposing of it and the acquirer of it: and
  4. (d) where, by virtue of paragraph (c) above. the price of the house is in the negative. the obligation to pay shall be upon the landlord.").

On Question, amendment agreed to.

[Amendment No. 58 not moved.]

Clause 60 [Consent for subsequent disposals]:

Lord Morton of Shuna moved Amendment No. 59: Page 36. line 22, after ("Act") insert ("including any person who acquires any property under this section").

The noble Lord said: My Lords, it is suggested that along with this amendment we discuss Amendments Nos. 60. 61 and 62. These amendments seek to enhance the safeguards available to tenants who exercise their right to choose an alternative landlord under Part III of the Bill. The Minister responsible for the Housing Bill in another place spoke of the need to ensure that houses which are disposed of under tenants' choice remain available for letting and that tenants' rights are safeguarded. The best way to secure these objectives in this Bill is to give Scottish Homes greater control over the disposals by approved landlords of the houses it acquires under tenants' choice.

As the Bill stands, the consent of Scottish Homes is necessary before any property is disposed of but there are no explicit criteria for the granting or withholding of this consent. Consent can be given for classes of disposals, thus making it unlikely that each case will be examined on its merits. Disposals in particular areas can be given blanket consent. The administration of consent in such a fashion provides few safeguards to tenants. There is no statutory requirement that Scottish Homes should seek and consider the views of the tenant. It is these problems which the amendments seek to remedy.

The first amendment, Amendment No. 59, is an attempt to bring this Bill into line with the Housing Bill. One of the difficulties with which we have to deal as regards this Bill is that the Housing Bill is going through the House on different days, it has reached a different stage of its proceedings, and has different provisions. However, the point of the amendment is to bring this Bill into line. It omits mention of class consents and thus obliges every case to be considered on its merits. Without this provision, other measures to provide safeguards for tenants would be difficult to apply.

The next amendment provides that consent for disposals will he given only to approved landlords. This is most important because as the Bill stands it only appears to deal with the initial change of landlord and not with subsequent landlords. Tenants may be put in the position of opting for a landlord approved by Scottish Homes, only to find that the approved landlord disposes of the house to a non-approved landlord and thus the safeguards fly off.

In the fourth amendment, Amendment No. 62, the aim is to provide that tenants should he informed and consulted about disposal plans and that their views are taken into account by Scottish Homes in the granting or withholding of consent. The wording of the subsection is derived from Clause 64(3) of the Housing Bill which refers to disposals by housing action trusts. 1 trust that the Minister knows more about those provisions than I do, but it may be that we are both equally at sea on that issue. However, it is equally appropriate in the Scottish context because without this the tenants' wishes could be entirely ignored and that, we understand, should not be the purpose of the Bill. The Government's clear, stated objective of, encouraging greater individual control over the conditions in which people live"— which is a quotation from Housing: the Government's Proposals for Scotland—would appear to be relevant here. For those various reasons I beg to move Amendment No. 59.

3.30 p.m.

The Earl of Dundee

My Lords, like the noble Lord, Lord Morton of Shuna, and with the leave of the House, I shall address my remarks to Amendments Nos. 59, 60, 61 and 62. I have listened carefully to the arguments put forward in support of this group of amendments, all of which were tabled during the Committee stage of the Bill's proceedings. I am aware that the amendments have the backing of the Institute of Housing in Scotland.

As the noble Lord, Lord Morton of Shuna, indicated, his amendments are linked by a common theme. The basic argument is that tenants' rights would be better safeguarded if Scottish Homes were given greater control over the disposal by approved landlords of houses they acquire under the provisions in Part III of the Bill.

I cannot recommend that these amendments should be accepted. I believe we must strike a balance in which we take into account the interests of tenants, the willingness of new landlords to be involved in taking over public sector houses under the tenants' choice provisions, and the need for involvement by Scottish Homes.

The first of the amendments suggests that Scottish Homes' approval should be necessary for all subsequent disposals of property transferred under Part III. That seems to me to be particularly undesirable. We believe, as 1 said previously, that there must be some mechanism to ensure that it is not possible to circumvent the approval process however unlikely any landlord whom Scottish Homes is prepared to approve as a receiving landlord would be to pass on houses taken over to another owner soon afterwards. We have considered again the points made in Committee on this issue while also taking on board the noble Lord's comments today. But I still believe that we should not impose a requirement that Scottish Homes should be associated with the future ownership of the property for all time. We must remember that any tenant who transfers to a new landlord under the provisions in Part III has chosen to do so. He has seen advantages in moving from the public sector and he has done so under his own free will to gain advantage from what the private sector has to offer. Therefore he is in much the same position as any other private sector assured tenant.

However, there is the control of the first subsequent disposal, which is an additional safeguard. In considering applications for approval, Scottish Homes will have regard to much the same conditions as apply in approvals under Clause 54. But, as I say, I believe that we must draw the line after this first subsequent disposal. I do not think that it is necessary, desirable or sensible for Scottish Homes to be involved thereafter with all property which happens at one time to have been transferred under Part III.

Nor do I believe that Scottish Homes should be obliged only to approve first disposals if the purchaser is another "approved landlord". Although under normal circumstances I would expect Scottish Homes only to consent to a disposal if the house were to continue to be available for rent at rent levels within the reach of those with income levels characteristic of that half of the population currently housed by the public sector, I do not think that it would be desirable to rule out the possibility of a house being sold into owner-occupation.

My noble friend Lord Sanderson gave assurances before, and I repeat now, that Scottish Homes will look very carefully indeed at the local demand for and supply of rented accommodation before deciding to agree to any disposal for owner occupation. The fact that consents have to be obtained to the initial transfer from the public sector, and also to the first subsequent transfer, means that there is no question whatever of landlords being able to make a quick profit by taking on public sector houses and selling them quickly with vacant possession on the open market. The protection is given not only by the necessary Scottish Homes' approvals, but also by the normal tenancy agreements and the strengthened anti-harrassment procedures. On the other hand, if a tenancy falls vacant for good reasons—for example, if the tenant decides to move, or if the tenant dies and there are no successors—it may make eminent good sense for a landlord to be able to rationalise his holding of rented property by selling the vacant property on the open market. But let me emphasise again that Scottish Homes approval will be required for such first disposals. That will allow and require Scottish Homes to be very closely involved in the market for rented housing in the area.

The third of this group of amendments seeks to rule out the possibility of class approval to subsequent disposals. I can assure noble Lords that there is nothing sinister in the provisions in subsection (2) of Clause 60. The provisions allow, but do not require, Scottish Homes to give class approvals. Noble Lords will note that such approvals can be subject to conditions. We have already considered the example of sales of houses to sitting tenants. Just as local authorities have what might be termed a class approval to dispose of housing under the right to buy, so I believe it could be sensible for Scottish Homes to give similar class approvals to sales to sitting tenants in transferred properties. There could also be good arguments for giving class approvals to subsequent disposals through sales to, for example, registered housing associations, so long as the stock held by such associations did not exceed numbers which in Scottish Homes' view were manageable. I do not therefore believe that the House should accept Amendment No. 61, as this could lead to extra and unnecessary administrative effort and cost for Scottish Homes without any return for the tenant.

Finally, I should like to say a word on the last of the amendments tabled in the name of the noble Lord, Lord Morton of Shuna, which concerned consultation by Scottish Homes with tenants. The noble Lord may have had in the back of his mind the worry that this is something which is being emphasised for the English Bill and therefore that we, in our Scottish provisions, should be similarly aligned. Let me emphasise that the situations are not parallel. In Scotland, under tenants' choice, no tenant will require to change his landlord against his will; but in England, where a housing action trust is set up, tenants will inherit the housing action trust as their new landlord whether they want to or not. The English provision refers to housing action trusts only and not to tenants' choice transfers. In such circumstances, the extra safeguard of a statutory requirement to consult the tenant for the first time seems only reasonable. However, I hope—

Lord Grimond

My Lords, I apologise for interrupting the Minister, but I think he said that no tenant would be forced to change his landlord against his will. Surely that is exactly what is happening in the Shetlands. There, the tenants wish to go to one landlord and are being told that they cannot do so. Therefore that seems to me exactly what is happening. However, perhaps I have misunderstood the Minister?

The Earl of Dundee

My Lords, with respect, I think that perhaps the noble Lord misunderstood me in regard to Shetland, although I did not mention Shetland just now. As I believe my noble friend Lord Sanderson made clear the other day, no tenant in Shetland will be forced against his will in the way that the noble Lord intimated and fears.

I was comparing the English and Scottish provisions. I hope that your Lordships will feel able to accept that the position for tenants' choice transferees in Scotland is different, and that with the assurance that my noble friend Lord Sanderson gave in Committee, which I now repeat—that under Clause 60, in practice, Scottish Homes will consult the tenants involved—there is therefore no need for a statutory provision of this type in the Scottish Bill.

Lord Morton of Shuna

My Lords, I am always suspicious of an assurance that there is no need for a provision saying that someone will do something, because in practice they will. If there is nothing in the Bill, in practice they may not. If that is to be the practice, what is the Government's objection to putting it into the Bill and making it a duty? That is the difficulty the Government never seem to face up to. Time and again they come forward with the idea that we do not need a provision in the Bill, because it will be the practice. I have never yet heard them give a satisfactory answer to that conundrum. If something is to be the practice, I still do not understand why the Government do not say that it will be the practice and put it into the Bill.

My second point is that we discussed earlier on Report the meaning of Clause 42. There remains a distinct difference of view among various people as to whether there is individual tenant's choice or a situation where the majority of tenants can force the minority to change landlords. That aspect may only be resolved later in the courts. I do not wish to return to it except to point out that there is a difficulty.

It is absurd that one has an assurance from the Government that tenants are getting some assurance of tenancy when we now know that Scottish Homes can transfer to an approved landlord and the next day the approved landlord can transfer to someone else, who may be the worst type of Rachman-like landlord. I regret to say that I found the Minister's reply unsatisfactory, and I should like to test the opinion of the House.

3.42 p.m.

On Question, Whether the said amendment (No. 59) shall be agreed to?

Their Lordships divided: Contents, 74; Not-Contents, 135.

Addington, L. Banks, L.
Airedale, L. Blease, L.
Ardwick, L. Bonham-Carter, L.
Aylestone, L. Boston of Faversham, L.
Briginshaw, L. Lawrence, L.
Broad bridge, L. Leatherland, L.
Bruce of Donington, L. Longford, E.
Carmichael of Kelvingrove, L. Mackie of Benshie, L.
Carter, L. Masham of Ilton, B.
Chitnis, L. Milverton, L.
Cledwyn of Penrhos, L. Molloy, L.
Cocks of Hartcliffe, L. Morton of Shuna, L.
Davies of Penrhys, L. Nathan, L.
Diamond, L. Peston, L.
Donaldson of Kingsbridge, L. Ponsonby of Shulbrede, L. [Teller.]
Dormand of Easington, L.
Elwyn-Jones, L. Prys-Davies, L.
Fitt, L. Rochester, L.
Foot, L. Sainsbury, L.
Gallacher, L. [Teller.] Seear, B.
Galpern, L. Shackleton, L.
Glenamara, L. Stallard, L.
Graham of Edmonton, L. Stedman, B.
Grimond, L. Stewart of Fulham, L.
Halsbury, E. Stoddart of Swindon, L.
Hampton, L. Strabolgi, L.
Hanworth, V. Taylor of Gryfe, L.
Harris of Greenwich, L. Taylor of Mansfield, L.
Henniker, L. Tordoff, L.
Hughes, L. Turner of Camden, B.
Hylton, L. Underhill, L.
Jeger, B. Vernon, L.
Jenkins of Hillhead, L. Walston, L.
John-Mackie, L. Wells-Pestell, L.
Kagan, L. White, B.
Kilbracken, L. Winchilsea and Nottingham, E.
Kinloss, Ly.
Kirkhill, L. Winstanley, L.
Alexander of Tunis, E. Eden of Winton, L.
Allerton, L. Effingham, E.
Alport, L. Elibank, L.
Ampthill, L. Ellenborough, L.
Arran, E. Elliot of Harwood, B.
Atholl, D. Elliott of Morpeth, L.
Auckland, L. Faithfull, B.
Balfour, E. Ferrers, E.
Bauer, L. Fortescue, E.
Beaverbrook, L. Gainford, L.
Belhaven and Stenton, L. Gisborough, L.
Bellwin, L. Gray of Contin, L.
Beloff, L. Gridley, L.
Belstead, L. Hailsham of Saint Marylebone, L.
Bessborough, F.
Blyth, L. Hankey, L.
Borthwick, L. Harmar-Nicholls, L.
Boyd-Carpenter, L. Harvey of Prestbury, L.
Brabazon of Tara, L. Hayter, L.
Brightman, L. Hesketh, L.
Brookehorough, V. Hives, L.
Brougham and Vaux, L. Hooper, B.
Broxbourne, L. Hunter of Newington, L.
Bruce-Gardyne, L. Hylton-Foster, B.
Burton, L. Jenkin of Roding, L.
Caccia, L. Johnston of Rockport, L.
Cameron of Lochbroom, L. Kaberry of Adel, L.
Campbell of Croy, L. Kimball, L.
Carnegy of Lour, B. Layton, L.
Carnock, L. Lloyd of Hampstead, L.
Cathcart, E. Long, V.
Chelwood, L. McAlpine of Moffat, L.
Colnbrook, L. McFadzean, L.
Constantine of Stanmore, L. Mackay of Clashfern, L.
Cork and Orrery, E. MacLehose of Beoch, L.
Cranbrook, E. Macleod of Borve, B.
Cullen of Ashbourne, L. Mancroft, L.
Dacre of Glanton, L. Marley, L.
Davidson, V. [Teller.] Massereene and Ferrard, V.
Denham, L. [Teller.] Merrivale, L.
Dilhorne, V. Mersey, V.
Dormer, L. Middleton, L.
Dudley, B. Montgomery of Alamein, V.
Dundee, E. Morris, L.
Eccles, V. Mowbray and Stourton, L.
Munster, E. Saint Oswald, L.
Nelson, E. Sanderson of Bowden, L.
Newall, L. Secbohm, L.
Northesk, E. Shrewsbury, E.
Nugent of Guildford, L. Skelmersdale, L.
Onslow, E. Somers, L.
Orkney, E. Stockton, E.
Orr-Ewing, L. Stodart of Leaston, L.
Peel, E. Strathcona and Mount Royal, L.
Ponder, L.
Peyton of Yeovil, L. Sudeley, L.
Porritt, L. Swansea, L.
Rankeillour, L. Swinfen, L.
Reay, L. Swinton, E.
Renton, L. Terrington, L.
Richardson of Duntishournc, L. Thomas of Gwydir, L.
Thomas of Swynnerton. L.
Rippon of Hexham, L. Torphichen, L.
Rochdale, V. Trafford, L.
Rodney, L. Ullswater, V.
Romney, E. Wedgwood, L.
Roskill, L. Whitelaw, V.
Rugby, L. Wynford, L.
St. Davids, V. Young of Grafffiam, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.50 p.m.

[Amendments Nos. 60 to 62 not moved.]

Clause 62 ["Cost,floor" limit on discount on price of house purchased by secure tenant]:

Lord Carmichael of Kelvingrove moved Amendment No. 63: Page 37. line 23, leave out ("5") and insert ("8").

The noble Lord said: My Lords, the purpose of this amendment is to have some harmonisation between the Scottish and the English in terms of the time after which a property can be sold when repairs have been executed. We are grateful that in Clause 62 the Minister or the Government have brought the operative date forward to 1983. Instead of having a single cut off date, the Government are now proposing a rolling period of five years during which the discount is restricted on a house sold by a local authority.

While we are grateful for this, we in Scotland still feel that we are being slightly cheated because in England the period is eight years. To some extent we have been through this before but during the Committee stage of the Bill the noble Lord, Lord Sanderson, said that: the provisions in England and Scotland are at present different: and we see no reason why they should necessarily conform after the change is made…. We do not see any need for the period in which the cost floor operates to be the same in Scotland as in England".—[Official Report, 28/4/88; cols. 299 and 300.] Lord James Douglas-Hamilton said basically the same thing in Committee in the House of Commons on 1st March 1988 at col. 1123 of the Official Report: The hon. Gentleman asked why the situation was different from that in England". Again he said that the answer was that they would not need to do exactly the same as in England. We accept that, except when it is a disadvantage to Scotland and then we want to do things the same way as in England.

These comments confirm that there is no logical and straightforward reason for this discrepancy of five and eight years on the rolling programme of the sale of houses. Furthermore, this rule introduces a concept that is used in England of historic costs expenditure rather than outstanding debt incurred in recent years. That makes it all the more difficult to justify the difference between five years in the Scottish Bill and eight years in the English Bill. It is even more important that the eight year rule should apply in Scotland, given that house prices in Scotland do not generally increase in value at the same rate as they do in most parts of England. There are also areas in Scotland where house prices are decreasing. This five-year rule will cause capital losses for authorities and affect modernisations for some of their tenants.

It amazes me that the Government have not so far accepted the amendment which is very simple. We have already had some good news from the Minister and perhaps we may have more. The amendment seeks to have the five-year rule extended to eight years, as in England and Wales. At the very least this will allow more time for house sale prices to grow and reduce the capital losses which would otherwise be incurred by the authorities after houses are modernised. I beg to move.

Lord Taylor of Gryfe

My Lords, this is a matter on which I have received representations from CoSLA and also the Scottish Federation of Housing Associations. Their concern in this matter has been expressed by the noble Lord, Lord Carmichael. Basically it is the difference between the eight years in the English Bill as against five years in the Scottish Bill. This is a case where I have argued for uniformity on a number of matters affecting Scotland and England, particularly as regards rating. I now wish to have a degree of uniformity with the new legislation proposed for England. Both CoSLA and the National Federation of Housing Associations are not opposed to the principle of a rolling cost floor but they are concerned about the timescale. For local authorities, for example, the five-year rule will be an inadequate period for price increases to offset the remaining debt. It may also inhibit local authorities from carrying out modernisation work or even new build projects if the possibility exists for tenants to buy these houses five years later with the full discount entitlement.

In the case of the housing associations, whose cause is dear to the heart of the Minister, their concern is slightly different. Their major concern is viability. It is not in the interests of housing associations which are trying to attract private finance if their viability is founded on an asset base which is eligible for sale to sitting tenants who could receive up to 70 per cent. discount.

It occurs to me that this is not a violent political matter at all. It is a matter of accommodation. I accept that Scottish housing is different from English housing in some respects, but in regard to this case I think that there is a very strong claim for uniformity. That would be well received by the representative organisations I have quoted.

Lord Hylton

My Lords, I should like to underline the very important point which the noble Lord, Lord Taylor of Gryfe, has just made.

Lord Sanderson of Bowden

My Lords, I apologise for not rising, I thought I was going to hear a longer speech. This matter has been debated at length in another place and an identical amendment was discussed here in Committee.

It appears that the main purpose behind the noble Lord's amendment is to bring the English and Scottish proposals on this matter into line. As noble Lords will know however, there are already differences in the legislation north and south of the Border on this issue.

We believe that in the case of public sector landlords such as local authorities a five-year rolling cost floor arrangement is sensible and workable. It will mean that, unless the full market value itself is lower than the cost, no authority will be required to sell immediately a new build or newly improved property for less than the cost of providing or modernising it. Nor should an authority be tempted to allocate to newly built housing only tenants with relatively short periods as public sector tenants, therefore with a relatively low discount entitlement. Moreover, if we make reasonable assumptions on house price inflation—and I shall come back to that in a moment—and if we allow for the likelihood of a range of discount entitlements among the tenants who exercise the right to buy these new houses and the probability that all tenants will not exercise the right to buy immediately the five-year period comes to an end, any supposed losses which local authorities might sustain by selling houses will in our view be small. Most houses which are purchased under the right to buy will, I am sure, continue to be sold at prices above the cost of provision.

I should assure noble Lords that the remaining tenants of these local authorities selling houses for less than the debt outstanding on them are unlikely to have to meet any substantial additional costs through their rents. Where an authority at present receives housing support grant (that is direct housing subsidy from the Government) the formula for this subsidy will act to compensate the authority for any loss sustained. If an authority is not at present "in" housing support grant, but the sales at below outstanding debt cause loan charges per remaining council house to rise, and hence rents to rise above the figure which the Secretary of State takes as the threshold for housing support grant, then this grant will once again become payable. For remaining tenants therefore any rent increase as a result of sales will be limited. I remain convinced that these proposals, based on a five year cut-off period represent a satisfactory compromise.

Any move to an eight year cut-off period would, in the short term at least, be of little benefit to tenants in Scotland. Indeed given that we are moving away from a reducing outstanding debt component replacing it with a fixed historic cost amount, there could he cases where an eight year cut-off period would be a disadvantage to tenants seeking to purchase.

At the previous stage of the Bill the noble Lord, Lord Carmichael, talked quite a lot about Angus district and the problems of house prices in Montrose going down and the problems that that would cause. I made it my business to look into the overall situation in Angus district. I gave the noble Lord the Scottish figures for which I believe he is grateful. But he said that that did not affect Angus district and he wanted to know about the situation there.

I can tell the noble Lord, Lord Carmichael, that in 1987 the average selling price of a house purchased under the right-to-buy provisions in Angus district was £10,720, representing a discount on average of 48.7 per cent. But the important thing is that the amount of outstanding debt per house held on the authority's housing revenue account was £2,888. Sales are therefore well above the outstanding debt level generally, and in this case some £8,000 above it. I hope that helps to convince the noble Lord that while there may be cases such as on the East coast of Scotland where the depression in the oil industry presents problems, I do not think that in the overall context, even in the case of the district council of Angus, this provision should present an overwhelming problem. However, I recognise the point that the noble Lord made at the previous stage of the Bill.

In answer to the noble Lord, Lord Taylor of Gryfe, as regards housing associations (in which I am extremely interested), I would say that we discussed this matter in Committee. I see no grounds for anxiety. As I said at that time, any loss is directly borne by the Government. As a general rule, housing associations' debt is only 10 to 20 per cent. of the capital cost and discounted selling prices can hardly fail to cover that. In this case, as regards housing associations, this is not a relevant matter. I must therefore resist the amendment standing in the name of the noble Lord, Lord Carmichael.

4 p.m.

Lord Carmichael of Kelvingrove

My Lords, I am grateful for the trouble the Minister has taken to explain the Government's thinking once again in the light of some of the points that were made in Committee, when he said that he would look into the cost floor. The amendment was not moved with any purely chauvinistic thoughts in mind. It was moved as a result of a very practical consideration. Local authorities were concerned that they would be selling houses where the outstanding debt was considerably more than the price that they were able to secure for the houses.

The Minister raised a number of new points. I do not know whether we shall be coming back to them; but after sober consideration, we may decide that we want further explanation of the new points. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sanderson of Bowden moved Amendment No. 64: After Clause 62, insert the following new clause:

("Schemes for payments to assist local authority tenants to obtain other accommodation.

62A.—(l) In accordance with a scheme made by a local authority and approved by the Secretary of State under this section, the authority may make grants to or for the benefit of qualifying tenants of the authority with a view to assisting each person to whom or for whose benefit a grant is made to obtain accommodation otherwise than as a tenant of the authority either—

  1. (a) by acquiring an interest in a house; or
  2. (b) by carrying out works to a house to provide additional accommodation; or
  3. (c) by both of those means.

(2) A scheme under this section shall contain such provisions as the local authority considers appropriate together with any which the Secretary of State may require as a condition of his approval and, without prejudice to the generality, a scheme may include provisions specifying, or providing for the determination of—

  1. (a) the persons who are qualifying tenants for the purposes of the scheme;
  2. (b) the interests which qualifying tenants may be assisted to acquire;
  3. (c) the works for the carrying out of which grants may be made;
  4. (d) the circumstances in which a grant may be made for the benefit of a qualifying tenant;
  5. (e) the amount of the grant which may be made in any particular case and the terms on which it may be made;
  6. (f) the limits on the total number and amount of grants which may be made; and
  7. (g) the period within which the scheme is to apply.

(3) The Secretary of State may approve a scheme made by a local authority under this section with or without conditions and, where a scheme has been approved, the authority shall take such steps as it considers appropriate to bring the scheme to the attention of persons likely to be able to benefit from it and shall take such other steps (if any) as the Secretary of State may direct in any particular case to secure publicity for the scheme.

(4) The Secretary of State may revoke an approval of a scheme under this section by a notice given to the local authority concerned; and where such a notice is given, the revocation shall not affect the operation of the scheme in relation to any grants made or agreed before the date of the notice.

(5) Where a scheme made by a local authority under this section has been approved, a person dealing with the authority shall not be concerned to see or enquire whether the terms of the scheme have been or are being complied with; and any failure to comply with the terms of a scheme shall not invalidate any grant purporting to be made in accordance with the scheme unless the person to whom the grant is made has actual notice of the failure.

(6) In this section, "local authority" and "house" have respectively the meanings assigned to those expressions by section 338(1) of the Housing (Scotland) Act 1987.").

The noble Lord said: My Lords, in moving Amendment No. 64 I wish to speak also to Amendment No. 102. New Clause 62A would give local authorities, with the consent of the Secretary of State, specific powers to make payments to their tenants to help them to obtain other accommodation. I hope and believe that this clause will be welcomed by the House. It is an enabling provision, designed to allow the local authorities to draw up schemes—which will require the Secretary of State's approval under which they will be able to offer payment to tenants to move out of their council houses. Such payments would, for example, be used as deposits on the purchase of houses in the private sector. The resulting council house vacancy will then be available for letting to, for example, homeless families or to people on the waiting list.

As the new clause says, the local authority may include in such a scheme such provisions as it believes appropriate. The Secretary of State may also, in considering whether or not to approve such schemes, take into account and make as a condition of approval, the following factors: which tenants should be eligible for such payments; what property tenants moving out should be eligible to acquire or adapt; the amount of grant which might be paid to any tenant and under what conditions; the limits on the total number and amounts of grants which may be made; and the time within which the scheme should apply.

The new clause will also require an authority where a scheme has been approved to bring the scheme to the attention of those who might benefit from it.

Subsections (4) and (5) are included to protect the tenants involved. Subsection (4) allows the Secretary of State to revoke any approval given, but without prejudice to any payments made by the authority prior to such a revocation. Subsection (5) is a standard provision to ensure that if a local authority fails to comply with any of a scheme's requirements, an innocent recipient of assistance does not have to repay grant.

I believe the attractions of this new enabling provision are obvious. The tenant is helped with a payment from the local authority to get started on the owner-occupation ladder. The local authority obtains a vacant house at the price of a payment which will be less than the cost of building a new house. The accommodation available for the homeless, and to those on the council's waiting list, will be increased. Indeed, relief of homelessness, which we have debated throughout the course of the Bill in this House, is the main justification as we see it for bringing forward this new provision. The Secretary of State will have particular regard to the levels of homelessness in an area when he considers whether or not to approve a scheme of this type; and he will of course wish to be satisfied that value for money will be obtained for the payments made by the local authority.

Noble Lords may know that a number of authorities in England have run pilot schemes of this type. My right honourable friends the Secretaries of State for the Environment and for Scotland have looked particularly at schemes which have been operated in the London boroughs of Brent and Bromley, whose findings have now been published. They showed that relatively modest payments to tenants could secure a useful number of vacancies which could then be used, directly or indirectly, to house homeless families in proper, permanent homes rather than in unsatisfactory bed-and-breakfast accommodation. It is interesting that all but one of the 72 houses in the scheme which were vacated in Brent and two-thirds of the 92 houses in Bromley were relet to homeless households. Most grant recipients were under the age of 40 as opposed to the right-to-buy applicants who were, in the main, over 50.

Our consideration of these experimental schemes has led us to believe that local authorities should be given specific powers to make such payments. A similar provision was introduced in the Housing Bill in another place. Tenants who receive cash payments to move will, for example, be able to choose new accommodation in areas more in accordance with their own preferences and requirements. The new clause specifically provides that payments may be for an extension to an existing house as well as towards purchase. This could allow a grant to he given, for example, where an elderly person wished to live with a son or daughter and it was necessary to extend a home or build a "granny flat".

Let me emphasise that the new clause would not oblige local authorities to offer cash incentive payments. Nor would it give tenants a right to a payment. Nor will any tenant be forced to move. Local authorities will be able if they wish to come forward to the Secretary of State seeking approval to schemes for making such payments. The nature and extent of cash incentive schemes will be for local authorities themselves to devise. However, I have outlined the sort of matters the Secretary of State would expect to see covered in such schemes.

It will need to be made clear which tenants are eligible (perhaps tenants with more than a certain period of public sector tenancy), and what size of payments can be made. With value for money very much in mind, it will also be necessary to ensure that cash assistance to move goes to those tenants who do not have the resources to buy property without such assistance. However, I emphasise that we do not propose to set hard and fast rules. It will be up to each local authority which may be interested to justify the details of any scheme it puts forward. The new powers will I am sure be welcomed by all those who share our concern to reduce the problems caused by homelessness. I repeat that, with this purpose particularly in mind, authorities where the homelessness problem is most acute will have the strongest case for having cash incentive schemes approved.

This new clause is not the complete answer to the problem of homelessness which we have debated at great length. It was one of the major factors in the discussions in this Chamber on this Bill. The effect of cash incentive schemes may not, in itself, be huge; but I believe they will make a useful contribution. So will the new measures in Part II of the Bill which concern the private rented sector and which will encourage private sector landlords to make more accommodation available for letting. I am convinced that the Bill as a whole will have a substantial positive impact in alleviating homelessness. With that in mind, I have pleasure in commending the new clause to the House.

Lord Carmichael of Kelvingrove

My Lords, the explanation of the clause which the Minister has given is of great interest. However, by the nature of things he was not able to give us as much detail as we should like. We welcome anything which brings flexibility in dealing with housing to let. The earlier suggestion of the building of granny flats was very acceptable.

One of the problems raised by the new clause concerns tenants who have been in a house for a considerable time and the matter of the 70 per cent. discount. It is possible that such a tenant might not have the available cash for even 30 per cent. of the price. Would a cash amount which might be paid in such circumstances take account of the long-term tenancy? Would that entitle the tenant to the discount? The assumption is that there will be houses available for such people to move to. I believe that the Minister will agree that the schemes in Brent and Bromley are still in the early stages and that the numbers involved are small. However, it is helpful to have evidence that people may be able to choose the houses they want.

The biggest single worry of many of us who live in industrialised areas with a high percentage of local authority housing is the possibility of ending up with ghetto housing. It is possible that people will be only too pleased to move out of the less desirable parts of an area and leave houses behind for the use of those who were previously homeless. While the crude belief is that someone who has been homeless will accept any accommodation, I am sure that the Minister will know that that is not true. People may feel trapped in the housing machine when they have been offered a large number of houses in an area and have not accepted any of them.

There are many good points in the new clause and it would be churlish not to accept that. Many of the comments which have been made in this House and in another place must be taken into consideration. Having said that, I give a guarded welcome to the new clause.

Lord Hylton

My Lords, there are cogent arguments to he made in favour of the new clause. If it comes into effect and succeeds in reducing homelessness and the use of bed-and-breakfast accommodation, that will be a step forward. Nevertheless, I believe that the clause has implications for housing management. I hope that lessons will he learnt from the experiences of the past—in particular that it is a great mistake to concentrate families and tenants with numerous personal problems in one district or area. In the past. I stayed on a housing estate in north Edinburgh where one could see exactly what had gone wrong and how potentially good housing had been reduced to an almost unlettable condition.

The other matter that concerns me is that there is no guidance given as regards the amount of grant or loan which may be made. That is to be arranged at some future date between the local authority and the Secretary of State. Tenants of charitable housing associations in England could ascertain the amount of their portable discount in advance. Therefore, there was some certainty. I hope very much that under this clause there will be equal treatment for people in equal circumstances.

4.15 p.m.

Lord Hughes

My Lords, like my noble friend Lord Carmichael, I find much of the new clause attractive. The Minister made reference to the pilot schemes in two London boroughs. In doing so, he indicated a difference between age groups. He said that the people who exercised their right to buy with a discount tended to be older. The limited evidence from the two London schemes indicates that it is generally people under the age of 40 who take advantage of such schemes.

Am I correct in thinking that the new proposals will be of particular advantage to people who wish to own a house but do not wish to buy the house in which they are living and who will therefore not receive the benefit of a discount? Alternatively, will people who live in a house and wish to be the owner-occupier of it qualify for a discount only at the lower level? Assuming that the clause is in operation, presumably such people will expect to receive a payment for acquiring another house which will be greater than the discount which they would have acquired if they had bought their current residence. Will payment for an acquisition of another house or for the adaptation of an existing house be more advantageous financially than acquiring the house in which those people are currently living?

Baroness Carnegy of Lour

My Lords, perhaps I may say a word about people who are living in the council housing of rural local authorities. I believe that the provisions of the clause will be extremely helpful and attractive if the council housing in which they live is not where they wish to stay indefinitely or housing which they wish to buy. It is possible that many people will wish to buy a house in another area. The new clause may even enable people to buy houses on farms which are no longer required and which farmers wish to sell but which may need a lot of money spent on them. It may be possible to receive a grant in those circumstances. Such a scheme would be attractive to a rural local authority because it would enable the authority to free houses for the use of homeless people or those on waiting lists.

Perhaps the Minister can tell the House whether the dwelling for which a person obtains a grant must be situated in the same local authority area. I think that that question will arise when people hear about these provisions. I see no mention of that matter in the new clause.

Lord Mackie of Benshie

My Lords, I believe that, on the whole, the scheme is very good. The danger must be the possibility of ghetto housing where people do not wish to buy a house in an area which is undesirable but will accept a grant to move out.

It must be a good thing if people in their forties who could not afford a deposit for a house can receive a grant which will start them off in buying a house outside the area. However, I still think that the Minister ought to touch on the question of the creation of a ghetto, which appears to me to be likely in some cases.

Lord Sanderson of Bowden

My Lords, I thank all noble Lords and my noble friend Lady Carnegy of Lour for their contributions to the debate. I look forward to studying the points that they have made. The general concept has been welcomed. We are perhaps breaking new ground: all we have to go on at this particular stage are the experiments in Brent and Bromley; and it is very difficult to draw conclusions on such a narrow base.

Turning to the possibility of the worst council houses being vacated, most of the houses vacated in Brent and Bromley were either flats or maisonettes. Only one-in-six of those receiving grants said that their council homes were in poor repair. Approximately 60 per cent. said that their council homes were in fairly good repair, and about a further 25 per cent. said that they were in very good repair. In Brent 67 per cent. of grant purchasers had full central heating in their council homes while in Bromley approximately 60 per cent. had central heating.

I well understand the points made about ghettos. That is obviously something that the local authority will have to consider. It should be remembered that it is on the local authority's initiative that any policy decision is taken. The authority will have at its command knowledge of its own area and the likely effects of such decisions. In putting up a scheme to my right honourable friend the Secretary of State, local authorities will no doubt bear that in mind. Certainly it is something that the Secretary of State would have to be very clear about when giving approval.

Lord Hughes

My Lords, will the Minister give way? Would that mean that a local authority could put forward a scheme relating to a certain part of the housing stock, or does it have to apply to the whole of the housing stock at one time?

Lord Sanderson of Bowden

My Lords, with the leave of the House, it is my understanding that it is up to the local authority to bring forward a scheme of its choosing. It gives it the power to decide exactly what to bring forward to the Secretary of State. It does not apply to the whole of the housing stock.

As I have said before, we do not intend to set hard and fast rules. It will be for the local authority to justify the details of any scheme, as I think the noble Lord, Lord Hughes, understands. However, experience in the experimental schemes in Brent and Bromley suggests that, in Scottish conditions at least, authorities might wish to consider payments of several thousand pounds, perhaps between £5,000 and £10,000, in individual cases. Amounts might, for example, vary according to the time a tenant has spent in public sector accommodation, much on the lines of the discounts available under the right-to-buy scheme.

The Government definitely wish to try to alleviate some of the problems in relation to homelessness which have been raised by noble Lords. If this amendment presents a way forward and is one that can be cost-effective—and we think that local authorities when they study the scheme will understand that it can be cost-effective—then I believe that there is a real chance that we shall be able to tackle some of the problems of homelessness in Scotland.

Baroness Carnegy of Lour

My Lords, with the leave of the House, perhaps I may ask my noble friend if he can answer my question about the area in which the house has to be located.

Lord Sanderson of Bowden

My Lords, with the leave of the House, I apologise. The answer is no not necessarily.

On Question, amendment agreed to.1336

Clause 63 [Abolition and capitalisation of certain subsidies and contributions]:

The Earl of Dundee moved Amendment No. 65: Page 38, line 25, leave out ("instalments") and insert ("payments").

The noble Earl said: My Lords, the amendment simply achieves consistency with the other references to "payments" rather than "instalments" in subsection (3) of the clause. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 66: Page 38, line 44, leave out ("Board") and insert ("Commissioners").

The noble Earl said: My Lords, Amendment No. 66 is a purely drafting amendment. It will produce a reference to the Public Works Loan "Commissioners" rather than "Board", which is the more usual expression in legislation. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 67: Page 39, line 21, leave out subsection (8) and insert— ("(8) Paragraph 1(b) of Schedule 16 to the Housing (Scotland) Act 1987 (duty of local authority to credit slum clearance subsidy to slum clearance revenue account) shall cease to have effect on 1st April 1989.").

The noble Earl said: My Lords, in moving Amendment No. 67, I shall also speak to Amendments Nos. 97 and 100.

Under paragraph 1(b) of Schedule 16 to the Housing (Scotland) Act 1987, local authorities are required to credit to their slum clearance revenue account payments of slum clearance subsidy. However, under the provisions of this clause the only payments to be made to local authorities in respect of expenditure on slum clearance on or after 1st April 1989 will be capital payments made under subsection (3). Slum clearance subsidy itself will disappear. Such capital payments will be credited to the appropriate capital account and not to a revenue account. Amendment No. 67 therefore replaces the existing subsection (8) with a more definite provision to remove the duty on local authorities to credit subsidy payments to the slum clearance revenue account with effect from the beginning of April 1989. Amendment No. 100, as a consequence, adds paragraph 1(b) to Schedule 16 to the repeal schedule. The repeal will take effect from the beginning of April 1989. Similarly, Amendment No. 97 amends Section 207 of the 1987 Act, which at present refers to Section 200 of that Act, so as to import the relevant parts of Section 200, which is being repealed, explicitly into Section 207.

In summary, the points are therefore technical and consequential on the rest of the clause. I commend the amendments to your Lordships. I beg to move.

On Question, amendment agreed to.

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

Lord Sanderson of Bowden moved Amendment No. 68: Page 40, line 5, after ("instrument") insert ("which, except in the case of the first order to be made, shall be").

The noble Lord said: My Lords, in moving Amendment No. 68, I shall also speak to Amendment No. 69.

Before going on to explain the need for the Amendments, I should emphasise that Clause 66 is simply an enabling power allowing my right honourable friend the Secretary of State for Scotland to make orders related to the work of rent officers in carrying out their new functions in connection with housing benefit subsidy.

Your Lordships will be aware that, as currently drafted, Clause 66 provides that the orders to specify the functions of rent officers in relation to housing benefit subsidy are to be subject to negative resolution of either House of Parliament. On reflection, and following strong representations from honourable and right honourable Members in another place, the Government have decided that the first order, which will detail exactly how rent officers will carry out their new task, should be subject to affirmative resolution. Any subsequent order will, however, be subject to negative resolution. That is the purpose of the amendments and I commend them to your Lordships. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 69: Page 40, line 10, at end insert ("; and the first order under this section shall not be made unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.").

On Question, amendment agreed to.

The Earl of Dundee moved Amendments No. 70 to 72: Page 40, line 10, at end insert— ("( ) At the end of section 21(6) of the Social Security Act 1986 (regulations prescribing maximum family credit and maximum housing benefit) there shall be added the words "and regulations prescribing the appropriate maximum housing benefit may provide for benefit to be limited by reference to determinations made by rent officers in exercise of functions conferred under section 66 of the Housing (Scotland) Act 1988"."). Page 40, line 11, leave out ("the Social Security Act 1986") and insert ("that Act"). Page 40, line 24, leave out ("the Social Security Act 1986") and insert ("that Act").

The noble Earl said: My Lords, with the leave of the House, I shall move Amendments Nos. 70, 71 and 72 together. Amendment No. 70 brings the Scottish Bill into line with the English one. This is necessary since the housing benefit system, with which the rent officers will become involved through Clause 66, covers the whole of Great Britain.

The effect of the main amendment is simply to allow my right honourable friend the Secretary of State for Social Services to take into account the determinations made by rent officers under Clause 66 if he makes regulations limiting the maximum amount of housing benefit that may be paid in certain circumstances.

It clearly makes sense to allow my right honourable friend to use the information arising as a result of Clause 66 in this case: not to do so would require wasteful duplication or lead to unacceptable inconsistency.

Amendments Nos. 71 and 72 are simply consequential drafting points. I beg to move.

On Question, amendments agreed to.

4.30 p.m.

Clause 68 [Amendments to the Housing (Scotland) Act 1987 and other enactments and repeals]:

The Earl of Dundee moved Amendment No. 73: Page 40, line 44, after second ("Act") insert ("(being, respectively, amendments connected with the consolidation of enactments effected by that Act and minor amendments)").

The noble Earl said: My Lords, with the leave of your Lordships, I shall speak to Amendments Nos. 73 and 75 together. During consideration in Committee of Schedules 7 to 9, my noble friend Lord Balfour and other noble Lords suggested that the presentation of consequential, miscellaneous and minor amendments in these three schedules was confusing. As I explained at that time, there is need for the Bill to show clearly which amendments flow directly from and are therefore consequential on earlier provisions and which, although connected, do not arise as a direct consequence of provisions in the Bill. I hope that these amendments, which include an explanation of the purpose of the schedules in the body of the Bill, will clarify the matter. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 74: Page 41, line 1, leave out ("set out") and insert ("specified").

The noble Earl said: My Lords, this amendment brings the wording of Clause 68 into line with similar references elsewhere in the Bill. I beg to move.

On Question, amendment agreed to.,

The Earl of Dundee moved Amendment No. 75: Page 41, line 2, at end insert ("(being amendments consequential upon the provisions of this Act and other minor amendments").

The noble Earl said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 70 [Short title, commencement and extent]:

Lord Sanderson of Bowden moved Amendment No. 76: Page 41, line 10, after ("force") insert ("as follows—

  1. (a) section 65 and section 68 (so far as relating to Schedule 7) and this section and that Schedule, shall come into force on the day this Act is passed;
  2. (b) sections 33 to 37, 62, 63 and 67 and section 68 (so far as relating to Schedule 8 and to the entries in Schedule 10 in respect of—
    1. (i) sections 62(11) to (13), 151, 200, 254, 255, 296 and 297 of; and
    2. (ii) provisions of Schedules 13 and 14 to,
    the Housing (Scotland) Act 1987), and Schedule 8 and, in Schedule 10, those entries shall come into force at the end of the period of two months beginning with the day on which this Act is passed;
  3. 1339
  4. (c) section 68 (so far as relating to the entry in Schedule 10 relating to paragraph (1)(b) of Schedule 16 to the Housing (Scotland) Act 1987) and that entry shall come into force on 1st April 1989;
  5. (d) the remaining provisions shall come into force.").

The noble Lord said: My Lords, this amendment provides specifically for certain sections of the Act to come into force at certain times. This has the advantage of giving those who have an interest more notice of the commencement dates than would be possible if commencement were determined by a statutory instrument.

It commences, immediately the Act is passed, those sections which correct errors made in earlier enactments and which have retrospective effect for that reason. It commences at the earliest reasonable date thereafter, which we consider to be two months after the passing of the Act, those sections which we see no good reason to delay. These are: the sections which provide further protection for tenants against illegal eviction and harassment; the section which makes change to the cost floor limit on discount on right to buy houses; the section which abolishes certain specific exchequer subsidies to be replaced by support through the rate support grant system; and the section which extends the powers of development corporations to dispose of housing land; as well as associated minor and consequential amendments to other enactments.

Finally the amendment provides for the commencement of the repeal of that section of the 1987 Act governing the payment of slum clearance subsidy on 1st April 1989 after which time support will be provided through the rate support grant system. I am sure your Lordships will agree that this is a sensible timetable for the introduction of these provisions. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee moved Amendment No. 77: Page 41, line 17, leave out from ("or') to ("extend") in line 20 and insert ("sections 3 and 68 and Schedules 2, 9 and 10 as relates to enactments extending to England and Wales, section 4 and Schedule 3").

The noble Earl said: My Lords, with the leave of your Lordships I shall speak to Amendments No. 77 and 98 together. These amendments remove from this Bill certain references to and repeals of the Housing Associations Act 1985, rendered unnecessary as a result of amendment to the Housing Bill made in another place. I am sure your Lordships will agree that it is sensible to bring together in that Bill those amendments to the 1985 Act which arise out of the establishment of both Scottish Homes and Housing for Wales. I therefore commend the amendments to your Lordships and beg to move.

Lord Morton of Shuna

My Lords, this amendment, as the last words indicate, deals with Schedule 3. Perhaps the Minister can explain what is happening to Schedule 3. In Clause 59(4) of the Housing Bill there is the remarkable assertion: Without prejudice to the operation of Schedule 3 to the Housing (Scotland) Act 1988 in relation to anything done before the day appointed for the coming into force of this section, for the purpose of giving effect to the amendments in Part 1 of Schedule 6 to this Act, the said Schedule 3 shall be deemed never to have come into force". Exactly what are the Government playing at? It is extraordinary to have a schedule coming into force on the date to be appointed by the Secretary of State and then—perhaps we shall be discussing this point tomorrow—to have a provision that the schedule is never to have been in force or is to be deemed never to have been in force at all. That demands some explanation and perhaps the noble Earl will give one.

The Earl of Balfour

My Lords, I should like to take up the remarks of the noble Lord, Lord Morton. Perhaps I may also point out that the amendments in Schedule 3 to the Housing Associations Act are very different from the amendments which are in Schedule 6 to the Housing Bill that is also before us, so that again there is confusion. I wonder which will affect what. If Schedule 3 is to apply only to Scotland, some amendments to that effect need to be tabled in relation to this Bill or equally to the English Housing Bill. Something needs to be cleared up.

I have always felt that in studying legislation it is important to consider also the amendments to existing legislation in the schedules. Wherever the two contradict, it is very complicated for anybody who wishes to understand the legislation to know what is what. I should like to give your Lordships one example. At the top of page 51 of the Housing (Scotland) Bill there are emendations to Section 15A of the Housing Associations Act which was introduced because of the Housing (Scotland) Act 1986. The English Bill introduces a completely new Section 15A, although I admit it is under the same title. I find that sort of thing extremely confusing and so, no doubt, do other people who are supposed to understand the legislation.

For that reason, I feel that some explanation needs to be put forward and that both the English and the Scottish Bills should make absolutely clear which amendments affect what. This is particularly important for an Act such as the Housing Associations Act 1985, which is bound to concern a great many charitable organisations and others. It is something that I find totally mystifying at the present moment.

The Earl of Dundee

My Lords, I am grateful to both the noble Lord, Lord Morton, and my noble friend Lord Balfour for their interventions on this matter at this stage. To the noble Lord, Lord Morton, I can say that this provision is intended to avoid the need for a complex series of amendments to amendments. In practice, it is not intended that Schedule 3 to this Bill should come into effect before the Housing Bill provisions. As I said, I am grateful to the noble Lord. I shall read what he has said and come back to him on any implications of his remarks that we should take into account.

In answer to my noble friend Lord Balfour, the Housing Bill will apply to Scotland as well as to England and Wales. It is intended to reproduce the effect of Schedule 3 to this Bill which it will render redundant. My noble friend Lord Balfour gave the House the specific example of Section 15A. The Housing Bill reserves the effect in Scotland of Section 15A, even though the drafting may have been tidied up, in the same way that consolidation Bills do.

Lord Morton of Shuna

My Lords, I do not understand this. We shall shortly deal with Schedule 3. The Government are putting forward amendments to Schedule 3. We are told that the schedule will never be brought into force. Why then are we bothering? If it is intended that the schedule will never be brought into force, why is there not an amendment to take it out? If the schedule is to be enforced, what is the point in having the provision even for a week or so when at some later date a court will look at it and say that it shall be deemed not to have come into force? If someone acts on the provision in Schedule 3, if it is ever enforced, and Schedule 6 to the Housing Bill is eventually brought into force and, with retrospective effect, abolishes Schedule 3, what is a court to do? Is it to say that the person acted on something that it now deems never to have existed? This is a ridiculous position.

Lord Hughes

My Lords, perhaps I may refer to another point that the Minister made. There are provisions affecting Scotland in the Housing Bill before the House. When a Scottish Bill is going through its stages in the House, should not everything affecting Scotland be in that Bill rather than partly in the Bill now under consideration and partly in another Bill? After all, there is another stage yet to be taken in this House, and it should not be impossible for the Government to include provisions in the Scottish Bill and take them out of the English Bill.

The Earl of Balfour

My Lords, if Schedule 3 shall be deemed never to have come into force in the English Bill. there must surely be an amendment to the Scottish Bill that Schedule 6 of the English Bill shall never come into effect in Scotland. As it is, the situation is very complicated. I entirely support what has been said by the noble Lord, Lord Hughes. When I looked through the English Bill I was surprised by the number of references made to Scotland in regard to Scottish Acts and the Housing (Scotland) Bill. In the area of housing there are quite a number of differences between England and Scotland. Let us not make the differences even more confusing than they already are.

The Earl of Dundee

My Lords, I shall reply first to the noble Lord, Lord Hughes. The explanation for the apparent anomaly to which he has drawn attention is that the other place wished to have time to discuss matters first. The noble Lord, Lord Morton of Shuna, asked why, if Schedule 3 is not intended to come into effect, the provision is necessary. The answer is that it is just in case everything does not proceed as planned.

As I said earlier, I am grateful to all noble Lords for their contributions on the matter at this stage and for drawing attention to possible anomalies. I shall look at the matter again and see whether we can effect any improvement before Third Reading.

Lord Morton of Shuna

My Lords, I wonder whether the Minister will consider the phrase in the Housing Bill to the effect that the schedule shall be deemed never to come into force. If the schedule comes into force and Parliament subsequently approves legislation which provides that the schedule is deemed never to have come into force, can the Minister explain how a court will interpret it and how a person will act on a schedule which at some later date will be torpedoed apparently by executive action and deemed never to have existed? It is difficult to see what a person acting on Schedule 3 when it is in force will do when it is taken out of force.

On Question, amendment agreed to.

Schedule 1 [Scottish Homes]:

Lord Sanderson of Bowden moved Amendment No. 78: Page 43, line 52, at end insert ("or loss or diminution of emoluments").

The noble Lord said: My Lords, paragraph 10(3) of Schedule 1 permits Scottish Homes to compensate employees who suffer loss of office or employment by way of payment of pension, allowance or gratuity. The amendment is designed to extend the paragraph to pay compensation to those employees who suffer loss or diminution of emoluments. It brings the wording of the paragraph into line with the equivalent paragraph of the new schedule to the Housing Bill setting up housing for Wales. I commend the amendment to the House.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 79: Page 44, leave out lines 26 and 27.

The noble Lord said: My Lords, we debated Amendments Nos. 79, 80 and 81 in Committee and a reply was read to us by the Minister which unfortunately seemed not very satisfactory. I therefore return to the problem. In moving Amendment No. 79, 1 shall speak also to Amendments Nos. 80 and 81.

All the amendments deal with the question of employees who transfer from the Scottish Special Housing Association, and more particularly the Housing Corporation. Paragraph 1 1 of the schedule provides that Scottish Homes shall make an offer of employment to each person employed immediately before such date as the Secretary of State may determine, and any question as to the persons to whom an offer of employment is to he made under this paragraph shall he determined by the Secretary of State". In Committee I raised the question of why those lines were included. I was told it was intended that every person employed would be given an offer of employment. We queried why the Secretary of State should determine the question. If an individual considers that he or she is a person who should have been made an offer, what does the individual do? Does he or she write to the Secretary of State or have the right of appeal? How is the question to be decided by the Secretary of State?

The provision seems unnecessary. However, if it is to exist, people should have the right to appeal to the courts to decide whether they fall within or outwith the right. The position concerns particularly a small number of people who are in what is called the registration supervision division of the Housing Corporation. They are classified as outposted staff. They work in Scotland, but are outposted from the head office of the Housing Corporation in England. Are they intended to be classified as working in Scotland? It is not clear.

Amendments Nos. 80 and 81 relate to a rather peculiar position. These people having received an offer of employment have three months in which to accept it. If they do not accept, they have three months dating from the date of the offer to apply to a tribunal. The normal industrial provisions specify that it should be three months after the cessation of the employment or six months from such a notice. It appears reasonable that there should be three months after the cessation of the offer in which to lodge the appeal.

No satisfactory answer was given in Committee. Therefore, the amendments come forward again. If a person has until midnight on 31st March to accept an offer, it seems ridiculous that he or she is required to have delivered an appeal to the industrial tribunal before 5 o'clock on 31st March, which is effectively what he would have to do under the provision. Therefore my amendment seeks to increase the period to six months from the offer so as to make the position logical and in line with employment law in general. I beg to move.

Lord Sanderson of Bowden

My Lords, these amendments were debated in some detail (as the noble Lord, Lord Morton of Shuna, knows) during Committee stage. I have listened carefully to the points made by him then and today; but I am still of the view that these amendments are both unnecessary and undesirable.

One general and important point which I should make on all three amendments is that the Scottish Office have received no approach whatsoever from representatives of the staff of the Housing Corporation or the SSHA suggesting that there are any practical grounds for anxiety arising out of the Bill as drafted. However, in view of what the noble Lord, Lord Morton of Shuna, has said about outposted staff, I shall immediately look at the situation in relation to those personnel now that he has raised it; but it is the first time that it has been brought to my attention or to the attention of my department. It would in my view be wrong to amend the Bill to meet theoretical problems when, if there were genuine fears of practical problems. It would have been perfectly possible for the staff or their unions to have raised those problems with us. I would have hoped that this might have taken place at any point during the months leading up to this moment and this stage of the Bill. However, turning to the technicalities raised by these amendments, I deal first with the Secretary of State's role—

Lord Morton of Shuna

My Lords, does that mean that if I raise something in Committee in this House it is of less significance than if a member of the union raises it in another place? Do I understand that because I raised it and the unions have not raised it that it was of no significance? I can assure the noble Lord that I raised it because the union raised it with me. It seems unnecessarily complicated that there should have to be two occasions. I understood that this place was of significance to Ministers of the Crown; but perhaps I am wrong.

Lord Sanderson of Bowden

My Lords, I believe that snide remarks of that kind do not do much to further the cause of the Bill in this Chamber. So far as I am concerned, 1 believe that those who have a proper problem to raise usually face it up fairly early when they know the circumstances. However, now that it has been raised by the noble Lord, Lord Morton of Shuna, I treat the matter extremely seriously. It will receive my extremely careful consideration, and extremely careful answers will be given to those affected.

Turning to the technicalities raised by these amendments, I shall deal first with the Secretary of State's role in determining questions arising as to the person to whom an offer of employment should be made. It is obviously much more convenient, less costly, and quicker for all concerned if such determinations are made by an administrative agency, such as the Secretary of State, rather than by the courts, and I see no good reason to believe that it is any less appropriate. It is worth noting that a similar provision is included in the Housing Bill, referring questions arising out of offers of employment by Housing for Wales, to the Secretary of State for Wales.

To return to practicalities, my colleagues and I have given unequivocal undertakings about offers of employment, and I am not aware of any employee of the Housing Corporation or the SSHA whose circumstances would give rise to any difficulty in determining whether or not an offer of employment for Scottish Homes would be appropriate.

Turning now to Amendments Nos. 80 and 81, which propose the extension of the time limit for acceptance of an offer of employment for Scottish Homes from three to six months—

Lord Morton of Shuna

My Lords, I am sorry to interrupt again, but my amendment is not intended to do any such thing. It is intended to leave the three months for acceptance of the offer but to give a further period of three months for the lodging of an appeal to the industrial tribunal.

Lord Sanderson of Bowden

Yes, my Lords, we are dealing with the timescale for an appeal as well as the lodging of the offer. I know that there are other statutory provisions which contain a six months' time limit. The choice of time limit must depend on the circumstances in which it will have to be applied. But in returning to my general point, no one has suggested as a matter of practicality in relation to the absorption of the Housing Corporation in Scotland and the SSHA into Scottish Homes that three months is in any way inadequate. Finally, we must bear in mind that the three-month period is not absolute because it can be extended if an industrial tribunal is satisfied that it was not reasonably practical for complaint to be presented before the end of the period of three months. I hope that that answer will satisfy the noble Lord Lord Morton of Shuna.

Turning to registration and supervision staff, my department is well aware of the position of the staff concerned and I understand that there is no practical doubt about their future. Those employed on this work in Scotland will be offered employment by Scottish Homes. In view of these explanations I hope that the noble Lord, Lord Morton, will seek leave to withdraw his amendment.

Lord Morton of Shuna

My Lords, I am glad that these points are now to be considered seriously. I shall shortly ask leave to withdraw the amendment. Before doing so, I should point out that the words "reasonably practical" that occur in the provisions about the extension of time are borrowed from the employment legislation. There is a vast amount of case law on what is and what is not "reasonably practical" and it is interpreted very strictly indeed. One has to be laid up in hospital with both arms in a sling before it is "reasonably practical" not to have complied with a time bar. I may return to this at a later stage, but in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 80 and 81 not moved.]

Schedule 2 [Amendments consequential on establishing of Scottish Homes and abolition of SSHA]:

Lord Sanderson of Bowden moved Amendment No. 82: Page 48, line 35, at end insert—

("Local Government Act 1988.

16. In section I (1)—

  1. (a) after paragraph (j) there shall he inserted the word "and";
  2. (b) paragraph (1) and the word "and" immediately preceding it shall cease to have effect.

17. In Schedule 2, the words "The Scottish Special Housing Association" shall be omitted.").

The noble Lord said: My Lords, in moving this amendment, I also speak to Amendment No. 101. These amendments will ensure that Scottish Homes does not inherit the application to the SSHA of the wider competition requirements to be introduced in the course of 1989 by the Local Government Act 1988.

The competition requirements are intended primarily for local authorities but apply to some bodies which are very similar to local authorities, as the SSHA is at present. They do not apply to the Scottish Development Agency or the HIDB and they are inappropriate to a wide-ranging body like Scottish Homes. This amendment will simply put Scottish Homes on the same footing as the SDA in this matter. I beg to move.

On Question, amendment agreed to.

Schedule 3 [Scottish Homes: Amendments of Housing Associations Act 1985]:

Lord Sanderson of Bowden moved Amendment No 83: Page 50, line 5, at end insert— ("(3) In subsection (4) of that section, after paragraph (a) there shall be inserted the following paragraph— (aa) a grant or a loan under section 2(2) of the Housing (Scotland) Act 1988;"").

The noble Lord said: My Lords, this amendment corrects a technical omission in the Bill.

Section 6 of the Housing Associations Act 1985 allows a registered housing association to request its removal from the register of housing associations presently maintained by the Housing Corporation on condition that the housing association has not received certain payments of grants or loans.

Paragraph 4 of Schedule 3 amends the 1985 Act to apply Section 6 to the register which will be maintained by Scottish Homes. It does not, however, extend the provisions of that section to refer to grants or loans which may be paid to a housing association by Scottish Homes. This amendment rectifies that omission by adding to the list of restrictions the receipt of a grant or loan from Scottish Homes under Clause 2(2) of the Bill.

I am sure your Lordships will agree that this is an entirely sensible amendment which will ensure that Scottish Homes maintains proper control over housing associations in receipt of public funds. I beg to move.

The Earl of Balfour

My Lords, I should like to ask my noble friend shortly to look at what is being said in the English equivalent Housing Bill. This subsection has been amended quite dramatically in a different way; just another example of the differences between England and Scotland.

Lord Sanderson of Bowden

My Lords, 1 am always ready to listen to what my noble friend said. I shall look at this and write to him.

On Question, amendment agreed to.

5 p.m.

Lord Sanderson of Bowden moved Amendment No. 84: Page 50, line 48, leave out ("15(3)") and insert ("15—

(a) in subsection (2) at the end there shall be added the following paragraph— (f) in the case of housing associations registered in the register maintained by Scottish Homes, payments made or benefits granted by such an association with the approval of Scottish Homes (which approval may be given only in relation to a class or classes of case).

(b) in subsection (3)").

The noble Lord said: I am very pleased in moving Amendment No. 84 to speak also to Amendments Nos. 96 and 99. When I announced at Committee stage the Government's views on various matters concerning tenancies let by housing associations, I indicated that there was one point of considerable concern to housing associations on which I was not in a position to report the Government's conclusions. We have now reached a decision on that point, the granting of tenancies and other benefits to those involved in the running of housing associations or their close relatives. This amendment gives effect to that decision.

Amendment No. 84 will enable Scottish Homes to define classes of case in which the granting of benefits will be allowed. It is a flexible power which will enable Scottish Homes to use the close knowledge of the affairs of housing associations which it will inherit from the Housing Corporation in Scotland to balance the need for some relaxation of existing controls against the continuing need for safeguards against abuse.

This is a very important balance. The safeguards against abuse introduced in 1980, and consolidated in Section 15 of the Housing Associations Act 1985, were brought in for very good reasons. There had been instances of abuse in England about which the Public Accounts Committee had rightly expressed grave concern and this Government acted to clamp down firmly on any possibility of further abuse. The safeguards have proved very effective and it is important that we maintain that effectiveness.

On the other hand, the blanket safeguards as originally introduced in 1980 have been shown to inhibit some perfectly above-board actions by housing associations. They are also seen to be increasingly in conflict with the move towards tenants' participation in the management of their own homes.

This Government introduced some changes as regards Scotland in 1986. I well remember the noble Lord, Lord Carmichael, taking part. Granting of tenancies was allowed for committee members, or close relatives of such, of designated community-based associations. However, that relaxation did not entirely remove the restriction on perfectly proper actions by associations, particularly those which are not community based. No doubt several noble Lords have received representations, as have I, from individual housing associations drawing attention to deserving cases and to the unfortunate effects which the existing restrictions can produce. In particular, dedicated voluntary committee members of associations have found themselves forced to stop making their contribution to the wellbeing of the community in order to ensure that they did not debar a member of their family from a housing choice which was freely available to others.

In the light of this experience, it is apparent that there is a case for some further relaxation. It is also apparent that there is a need for the mechanism for allowing that relaxation to be a flexible one, so that we can avoid going either too far or not far enough. This amendment, by giving Scottish Homes the power to designate classes of case where benefits and payments may be permitted, will allow it to introduce exceptions to the general prohibition which are tailored to particular circumstances as they emerge. By confining this power to classes of case, rather than applying it to individual cases, we are ensuring the evenhanded treatment of those closely involved in the running and decision-making of individual housing associations. That will be of potential benefit to voluntary committee members, employees of associations and close relatives of either group.

I know that this subject has concerned noble Lords and members of all parties in another place and I am very pleased to be able to meet the concern which has been expressed. The chairman of the Scottish Federation of Housing Associations has written expressing its satisfaction with the amendment. It may be helpful if I quote from his letter. He says: The amendment which the Government has proposed for the Report Stage in the House of Lords will, we believe, serve to terminate the difficulties which housing associations and co-operatives have experienced over this issue".

Amendments Nos. 96 and 99 are essentially technical amendments. Part of the effect of Section 15A of the Housing Associations Act 1985 is to allow community-based housing associations to make payment to a committee member, or a member of his or her family, where the association is purchasing the house owned by that person for improvement. Section 15 of the 1985 Act would otherwise prohibit such payments.

As it stands, Section 15A provides that a payment can only be made where the improvement project is to receive housing association grant. There are two reasons for dispensing with this detailed qualifying condition. First, it is probably of little or no practical effect since there have been, and are unlikely to be, housing association rehabilitation projects which involve no housing association grant at all. Secondly, housing association grant will not be a term which has a statutory meaning in Scotland once this Bill comes into effect. It will continue on an administrative basis, within the terms of subsection 2(a) of Clause 2, but that is not an adequate basis for a reference of this kind. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, I should be churlish not to be grateful to the Minister for having at long last persuaded the Government to accept the amendment. He has a great deal of experience of housing associations and therefore I know that he supported the proposals put forward in the Housing Bill, of which he spoke earlier, and which we raised in the earlier stages of this Bill.

He will realise that a number of points arise. He was fortunate in finding a way of tabling such an amendment; I could not find a method of doing so. As soon as the amendment was tabled we were approached by the housing associations and the Scottish Federation of Housing Associations. They had a number of questions and I am sure that the noble Lord is aware of them.

The first question is not theirs but occurs to my noble friend Lord Morton and myself. Is the condition now incorporated in Schedule 6 to the Housing Bill? That is a technical point but it is important. I should like to ask whether reasons will be given as regards the classes of cases. Will a schedule or a codification be available to housing associations for their guidance which will not be kept too secret so that associations' affairs will be as open as possible?

Finally, I should like to point out that the implementation of the proposal must wait until the establishment of Scottish Homes. That will not take place until nine months from now—in April 1989—and therefore some associations believe that it would be helpful if the proposal could be put into effect as soon as the Act is on the statute book. I know that when one is thinking of long-term legislation although I have the feeling that little housing legislation is long term and I know that that view is shared by most Members of both Houses—it may appear that April 1989 is no time away.

However, if you are waiting for a house and believe that you have all the qualifications and that you should have a house; if the housing association has reached its last two or three modernisations or new-build projects; if then you realise that you will be missed out only because of the date; and that if you had been slightly earlier you would certainly have been seriously considered, that period becomes a very long wait. Perhaps the Minister will look into that matter and let us know his views at the next stage of the Bill.

Other than that, I am pleased to accept the amendment and I am grateful to the Minister. I am sure that it has given some help to some housing associations.

Lord Hughes

My Lords, I speak as president of the Scottish Federation of Housing Associations. I am glad to say that the chairman—who is a different person and who does all the work—has written to say how acceptable the amendment is. It will definitely remove from housing associations a matter which was a source of earlier grievance on the part of people who were working hard for that movement.

Let me add that I should have welcomed the explanation had the Minister thrown away the brief and put it into his own words. I am certain that in two or three sentences he would have convinced the House of the value of the amendment.

Lord Taylor of Gryfe

My Lords, like other noble Lords who have spoken I should like to congratulate the Minister on achieving this result. It may be recalled that the question was aired at Second Reading. Most noble Lords who are close to the Scottish housing scene realised what an important contribution housing associations have made. Their contribution to community involvement has been invaluable. It was wrong and unjust that they should suffer from any disqualification.

Like the noble Lord, Lord Carmichael, I tried to find an appropriate amendment in Committee but found it difficult. With his abiding interest in the welfare of housing associations and his experience in the field, the Minister has managed to do so. We must all be pleased that that has been accomplished. Moreover, it is a tribute to the value of this House in discussing the provisions of this housing Bill that an amendment of this kind can be accepted here. 1 support and congratulate the Minister.

Lord Sanderson of Bowden

My Lords, with the leave of the House I should like to thank those noble Lords who have helped me to achieve this result. I should say to the noble Lord, Lord Hughes, that I would be delighted to throw away my brief but I am not a lawyer. We have to he very careful to get everything just right.

Lord Hughes

You will gain more courage when you have been longer in the job.

Lord Sanderson of Bowden

This will do much for housing associations in Scotland. Of that I am absolutely convinced.

On the points made by the noble Lord, Lord Carmichael, about the housing Bill, the answer to his first question is: not at present. Secondly, in relation to matters raised by the Scottish federation in a letter which I have seen concerning the classes and the definition of classes, I envisage that that will be arranged in discussion between Scottish Homes and the federation. Of course, we hope that they will come to suitable conclusions which are in the interests of both bodies.

The date of implementation is not something which we can readily bring forward. I realise that it is nine months away; but the noble Lord, Lord Carmichael, started this discussion in 1986. Therefore, I hope he does not mind waiting because we are going to get it right. I am sure that it will do a great deal of good for the housing association movement in Scotland.

On Question, amendment agreed to.

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

Lord Sanderson of Bowden: moved Amendments Nos. 85 to 91: Page 57, line 49, after ("or") insert (", where the immediate landlord is a registered housing association within the meaning of the Housing Associations Act 1985,"). Page 58, line 7, leave out ("commencement") and insert ("creation"). Page 58, line 14. leave out ("commencement") and insert ("creation"). Page 58, line 17, leave out ("commencement") and insert ("creation"). Page 58, line 22, at end insert ("and the tenant refuses to do so"). Page 58, line 24, after ("house") insert ("and the tenant refuses to do so"). Page 58, line 27, after ("or) insert ("part or).

The noble Lord said: My Lords, perhaps I may move Amendments Nos. 85 to 91 en bloc. They make relatively minor but nonetheless important adjustments to the drafting of Ground 6 to Schedule 5.

First, Amendment No. 85 limits the circumstances in which a superior landlord may repossess a property using Ground 6. Your Lordships may recall that during the Committee debate on the Bill I gave as an example of a superior landlord wishing to gain repossession the local authority which sub-lets an empty property to a housing association but later decides to redevelop. This is a legitimate and acceptable reason for a superior landlord to seek repossession but the current drafting of the ground goes wider. The Government have therefore decided to limit repossession by superior landlords to that case only where the immediate landlord is a registered housing association.

Secondly, Amendments Nos. 86 to 88 replace the word "commencement" in paragraph (a) of Ground 6 by the word "creation". This is partly to achieve consistency with drafting elsewhere in the Bill but it is also to close a possible loophole. The policy intention behind this part of Ground 6 is to ensure that a landlord wishing to repossess under Ground 6 should not have bought his interest in the property after the start of the tenancy since this would unreasonably prejudice tenants' security. As currently drafted it is possible that a landlord could have bought his interest in the house after creation of the tenancy agreement but before its formal commencement. In those circumstances the landlord could circumvent the restriction intended in Ground 6. By substituting "creation" for "commencement" that possibility is removed.

Finally, Amendments Nos. 89, 90 and 91 restore unintended omissions from the ground. I beg to move.

On Question, amendments agreed to.

5.15 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 92: Page 58, leave out lines 48 to 50.

The noble Lord said: My Lords, this matter has been discussed before but I hope the Minister may think again about Ground 9 and the re-possession of a property or house. The problem is that with all the other available grounds for taking over a property, a further one is added that is all-embracing. Under the heading, Grounds on which Sheriff may order Possession the Bill states: Suitable alternative accommodation is available for the tenant or will be available for him when the order for possession takes effect". That is an extremely wide power given to the landlord, despite the fact that one has to go before a sheriff. If one thinks of the test of reasonableness which has to be applied by the sheriff and given the other grounds available, it cannot be considered reasonable to move tenants for no stated reason. That being the case, this ground should be deleted to avoid wasting the valuable time of the sheriff's courts and creating undue anxiety for tenants. That is the brief of the Scottish Council for Single Homeless who have considerable experience of that.

It must be the case that tenants are allowed to consider the rented house their home and feel that they have some sort of permanence. To have spelled out in the tenancy agreement the likely reasons for repossession and then suddenly to be asked to move because the landlord wishes a transfer is quite wrong.

I believe that all of us involved in the earlier housing Bill who heard about the case in the High Court relating to the definition of homelessness and the suitability of a home must be rather wary of anyone making a subjective decision on suitable alternative accommodation. I cannot remember the pronunciation in that case; perhaps the Minister can. It became quite famous in our debates. The judge decided that strictly according to the reading of the Act, accommodation could be anything so long as it was wind and water tight. There was a repossession in the Feltham area of London on that basis.

We feel it is unnecessary to add that particular ground for repossession and we are rather concerned about the interpretation of suitable alternative accommodation. Perhaps the Minister can reassure me and the single homeless on this point. I beg to move.

Lord Sanderson of Bowden

My Lords, I have to admit that I was surprised to see this amendment on the Order Paper. In another place Members on all sides argued strongly that this ground for possession—that suitable alternative accommodation is available—should be discretionary rather than mandatory. The Government responded to those arguments and, as your Lordships are aware, the ground is now subject to the sheriffs discretion.

In those earlier debates, no one argued that the ground should not be available at all. I have of course listened carefully to the noble Lord, Lord Carmichael, and to those who have brought forward the idea of this amendment. However, I have not been convinced that the ground should be dropped. There are many conceivable circumstances in which a landlord could not invoke any of the other grounds but could have a reasonable case for repossession. I am thinking for example of a landlord with a relative who, perhaps because of a serious accident, needs to move closer to the landlord so that he or she can better be looked after. In those circumstances I would consider it eminently reasonable for the sheriff to grant possession so long as the tenant had suitable alternative accommodation to go to. On the other hand, I am quite satisfied that making the ground subject to the sheriff's discretion properly protects tenants against unjustified evictions.

The noble Lord, Lord Carmichael, talked about suitable alternative accommodation and the definition thereof. The definition of suitable accommodation in Part III of Schedule 5 is very tightly drawn so that the ground is not as wide-ranging as the noble Lord, Lord Carmichael, suggests. 1 hope that I have convinced him that having been over this matter in another place at an earlier stage, when we put this measure in on a discretionary rather than mandatory basis, he will see fit to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, did the Minister say ground 3 of Schedule 5?

Lord Sanderson of Bowden

My Lords, I said Part III.

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister. I certainly understand the examples he gave. There was the possibility of a landlord having a reasonable right to suggest alternative accommodation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Lord Sanderson of Bowden moved Amendment No. 93: Page 62, leave out from beginning of line 2 to end of line 4 on page 63 and insert—

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