Lords Sitting of 3 November 1988

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Manchester): The Chairman of Committees on the Woolsack.

Mathematics Tuition
Baroness Blackstone Baroness Blackstone asked Her Majesty's Government:
Whether they intend to accept the recommendations of the subject working group on the curriculum with respect to mathematics.
Viscount Davidson: My Lords, my right honourable friends the Secretaries of State for Education and Science and for Wales published proposals for attainment targets and programmes of study for mathematics in mid-August. Their proposals were based on the mathematics working group's advice but identified certain aspects which required, in their view, further examination. The proposals are currently the subject of consultation.
Baroness Blackstone: My Lords, I am grateful for that reply. However, is the Minister aware that the Secretary of State recommends that 10 per cent. of time in the school week should be allocated to mathematics whereas the working group recommends a higher proportion? Is the Minister further aware that in Japan as high a proportion as 20 per cent. of the school week goes to mathematics? Does not the Minister agree that it would be retrograde to reduce the amount of time available for this extremely important subject in the new national curriculum?
Viscount Davidson: My Lords, I am aware of that. The proposals of my right honourable friend, based on the working group's advice, are now the subject of wide-ranging consultations conducted in England by the National Curriculum Council. The Government have expressed their views: the consultation exercise has allowed others to express theirs. In its report the NCC is bound to summarise all the views expressed in the consultations alongside its own advice on the proposals.
Baroness Seear: My Lords, are the Government prepared to take notice of the differential performance of girls and boys in mathematics and of the urgent need to bring pressure to bear to improve girls' performance if they are to have any hope of playing a part in the economy in future?
Viscount Davidson: Yes, my Lords.
Lord Annan: My Lords, if the proposals in this document are in any way to be implemented, is it not
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necessary to have a major programme for increasing the number of teachers who can teach mathematics? Does that not also mean that there will have to be a differential scale of payment for such teachers, regardless of what the unions may say?
Viscount Davidson: My Lords, I agree that there are at present shortages of mathematics teachers. But we have an energetic action programme to boost recruitment and to update and reinforce under-qualified existing teachers. Future demands will be less than many people claim. Secondary pupil numbers will continue to fall until 1991 and will remain below present levels until the year 2000.
Lord Peston: My Lords, is the Minister aware how discouraging that last answer was? Is he aware—he surely must be—that so many young people are put off mathematics because of the poor teaching they receive? Does he not agree that the highest priority—this applies to women as well as to men—must be given to providing an ample number of first-class maths teachers? In that case, it seems to me to be inconceivable that we could have too many.
Viscount Davidson: My Lords, I thought that I had given an encouraging reply in my last answer. Perhaps the noble Lord would like to read it again in Hansard tomorrow.
Baroness Blackstone: My Lords, is the Minister also aware that the time available for preparing in-service training courses for existing teachers of mathematics is extraordinarily short? Can he reassure the House that the Secretary of State will do something about providing both increased resources for teacher training in this area and more time for the preparation of courses? Can he also reassure the House that the whole issue of a profile component in the practical application of mathematics will be looked at again by the Secretary of State who is currently rejecting that proposal of the working group?
Viscount Davidson: My Lords, as regards the latter part of the question, that, I am sure, is one of the matters that the National Curriculum Council will be taking very seriously on board. As to whether teachers can cope, in the first instance I should tell the House that only teachers of five and 11 year-old pupils will be affected. Those teachers will have about six months to familiarise themselves with the new attainment targets and programmes of study. Various kinds of support will be provided—new books, equipment and teaching materials through education support grants; in-service training through the LEA training grants scheme; and additional guidance and support through LEA advisory services. But, in any case, teachers will find that many of the new requirements simply reinforce what is already happening in good classrooms.

Ford Engine Plant: Regional Assistance
3.5 p.m.
Lord Bruce-Gardyne Lord Bruce-Gardyne asked Her Majesty's Government:
What requests have been received from the Ford Motor Company for selective financial assistance from public funds towards the cost of its projected new engine plant in South Wales; and what consultations have taken place with the EC Commission.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, the company has been offered regional selective assistance of £26 million towards the costs of its new engine plant developments in South Wales. Consultation with the European Commission was not required.
Lord Bruce-Gardyne: My Lords, I am most grateful to my noble friend for that helpful and informative reply. I am sure your Lordships hope that this compulsory punt on behalf of taxpayers will prove cost-effective. Will my noble friend tell us how this piece of selective assistance compares, both absolutely and also as a proportion of the total investment by Ford, with the selective assistance given to the same company for its original engine plant investment in South Wales 10 years ago?
Lord Trefgarne: My Lords, the assistance to which I have referred today amounts to about 5 per cent. of a project costing something like £550 million altogether. The earlier project to which my noble friend referred cost £270 million altogether, of which the then government provided £73 million, representing about 27 per cent. of the cost of the whole project.
Lord Callaghan of Cardiff: My Lords, is the Minister aware that those figures are totally irrelevant? It is a fact that the guarantees that were then given on behalf of the workforce of South Wales have been more than justified, and it is because Ford's expectations have been exceeded that it has now brought this tremendous new venture, which is of the greatest significance and will provide for the production of 850,000 engines every year, to South Wales. If we can spend money at that rate as a sprat to catch a mackerel, let us have many more sprats.
Lord Trefgarne: My Lords, it is certainly the case that the earlier investment to which I referred, and which the noble Lord will no doubt also recall, presumably tempted Ford to proceed with this further investment. This latter investment has been, I believe, the result of a team effort, both by the official organisations involved, the Welsh Office and the local authority, and the trade unions which have persuaded Ford that their industrial relations record is such as to justify this further investment.
Lord Morris: My Lords, I wish to ask my noble friend about something that has always puzzled me and, I suspect, a lot of people. Why is it that the Ford Motor Company, with its massive resources and its
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massive leverage, needs recourse to taxpayers' funds in order to take investment decisions of this kind? How is it that such huge organisations can lean on government to use public funds in order to assist their development in any part of the country?
Lord Trefgarne: My Lords, the fact is that the Ford Motor Company, like the rest of us, operates in the real world. In the real world, grants or this kind are available not only from places within the United Kingdom but also from other places in Europe and elsewhere. The Ford Motor Company is therefore able to shop around.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that, against a worrying industrial and employment background in Wales, we welcome very warmly indeed this development which will bring 700 jobs to the Bridgend area and I understand 2,300 jobs in factories producing component parts throughout the whole of the United Kingdom? Is he further aware that the subsidy to which he has referred is modest compared with the benefits which will be derived from it? Is the Minister also aware that we are grateful to my noble friend Lord Callaghan for the intervention which he made in 1977 when he was Prime Minister which first brought Ford to the Bridgend area? Therefore as Shadow Welsh Spokesman in this House it gives me great pleasure to thank everyone concerned.
Lord Trefgarne: My Lords, it is certainly the case that this new investment will lead to a number of important employment opportunities in the area concerned. That is very much to be welcomed.
Lord Diamond: My Lords, has the Minister by any chance worked out a cost-benefit analysis of the amount and, if so, can he give the House a rough indication of what it is?
Lord Trefgarne: Yes, my Lords, we have calculated that from the Government point of view the investment represents a cost of just over £10,000 per job created.
Lord Bruce-Gardyne: My Lords, notwithstanding the supplementary questions which my noble friend has answered so effectively, is it not apparent that the sprat in this case was very much smaller to catch a very much larger mackerel? Does that not reflect the lesser gullibility of Her Majesty's present advisers compared with those of 10 years ago, or the better investment climate for inward investment which prevails today, or, as I suspect, a combination of the two?
Lord Trefgarne: My Lords, I think that it is important to point out that the decison that Ford has taken in respect of this latest investment very much reflects its confidence in the likely success of the venture in South Wales. That relates not only to the money which the company will receive from the Government in support of the venture but also, as I said just now, the greatly improved industrial relations atmosphere in that part of the country, which has made an important contribution to the decision-making process.
Lord Callaghan of Cardiff: My Lords, if I may mix the cooking metaphor, does it not also show that in addition to the fact that sprats can catch mackerel, the proof of this pudding has been in the eating and that it is the success of the first venture which has brought the second?
Lord Trefgarne: My Lords, I believe that the noble Lord is right in saying that the success of the earlier venture has contributed to the Ford decision on this occasion. Having said that, there was fierce competition for the Ford plant and I am very pleased that the decision has gone the way of South Wales.
Noble Lords: Hear, hear!
Lord Rugby: My Lords can the Minister tell me whether or not the engines will run efficiently on unleaded fuel?
Lord Trefgarne: My Lords, I think that production of the engines will begin some time in 1994. I am certain that by that time they will be able to run on the unleaded fuel to which the noble Lord refers.

Battersea Bridge
3.14 p.m.
Lord Blyth Lord Blyth asked Her Majesty's Government:
What is the extent of the damage to Battersea Bridge and when they expect the necessary repairs to be completed and the bridge to be fully operational.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the London Borough of Wandsworth is responsible for Battersea Bridge. The bridge suffered significant structural damage when it was struck by a barge being towed upstream at 14.30 hours on 14th September 1988. I understand that two of the seven cast iron girders in the central span were severely damaged. Some transverse bracings were distorted and one was broken. Repair work is due to begin tomorrow. No firm date can be given for its completion.
Lord Blyth: My Lords, I should like to thank the noble Lord for that comprehensive answer. Will he bear in mind the fact that the present traffic situation on the bridge is causing considerable problems for people using buses who live to the west, on the Morgan's Walk side? Will he use his best endeavours to ensure that the work is carried out as quickly as possible?
Lord Brabazon of Tara: My Lords, I am aware that considerable inconvenience is being caused. I understand that a number of warnings and diversion signs have been erected on both sides of the river to try to alleviate the problem. I cannot give a firm date for the completion of the repairs until further structural tests and the consequent further repair work which may be needed have been completed. It is hoped that the bridge will open early in the New Year.

Air Traffic Control: ECAC
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they will make a statement on air matters discussed at the meeting of the European Community Transport Ministers' Council held on 26th October, with particular reference to the proposal on air traffic control tabled by the Commission.
Lord Brabazon of Tara: My Lords, no air matters were discussed. The Commission did not in the event table proposals; it simply said it would send the Council a report on aviation matters, that has not yet been received. We understand that the report may include a draft directive on personnel licensing and a memorandum on air traffic system capacity problems.
Baroness Burton of Coventry: My Lords, is the Minister aware that that is a most disappointing and unsatisfactory Answer? I hope that he thinks so too. As the air traffic control system in Europe and the United Kingdom has come close to breaking point and as there is growing recognition of the inadequacy of capacity both in the air and on land, does the Minister not think that air transport should have been discussed on 26th October? Does he agree that this is a European problem and that a Europe-wide air traffic control system is now a matter of the most urgent necessity?
Lord Brabazon of Tara: My Lords, I am sorry that my Answer disappointed the noble Baroness. However, what the Commission does is something over which I have no control. The noble Baroness will be aware that a good deal is going on concerning air traffic control in Europe. At the most recent meeting of the ECAC a United Kingdom proposal for a central air traffic flow management system was accepted and I hope that work will go ahead on that. It will be discussed at the EUROCONTROL meeting on 22nd November. There is a good deal of European co-ordination in that area.
I believe that action needs to go beyond the 12 member states of the EC. ECAC has 22 member states and involves countries outside the EC.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether or not his European colleagues, either at the October meeting or any other, have indicated that they are seriously tackling the frequency of industrial disputes among their air traffic controllers which inflicted so much misery on our fellow citizens last summer?
Lord Brabazon of Tara: My Lords, industrial disputes in other countries are not something in which we can become involved. I know that the matter was on the agenda of the ECAC meeting and I hope that those countries which have had problems, particularly Spain and Greece, will do their very best to sort the situation out before next year as it is in their own interests to do so.
Lord Underhill: My Lords, does the Minister appreciate that we have congratulated him on the initiative which he has shown in the development of EUROCONTROL and that we are pleased that his proposals have been accepted? But does he also appreciate the point raised by the noble Lord, Lord Boyd-Carpenter, that the problem created by the shortage of air capacity is exacerbated by industrial disputes, not necessarily in this country; and that we were very disappointed with the reply that he gave to my noble friend Lord Carmichael on 18th October that that was a matter entirely for the countries concerned? Does he recall that my noble friend asked that there should be discussions with the trade unions in the EC to discuss the matter because we do not know whether the problem concerns wages, man-hours or equipment? Is that not therefore a matter which ought to be discussed by the Council of Transport Ministers?
Lord Brabazon of Tara: My Lords, I am afraid that I do not agree. I am grateful for the noble Lord's first remarks, but industrial relations problems can only be sorted out by the employers of the air traffic controllers in the countries concerned, which is the state.
Baroness Burton of Coventry: My Lords, in view of the reply which the Minister gave me on 19th October and in view of his disappointing reply today, can he tell me whether the Transport Ministers are hoping that for their next meeting on 8th and 9th December the Commission will have tabled—as it indicated in advance that it would—its proposals on air traffic control and its amendment to the 1983 Directive on the Inter-regional Air Services Agreement?
Lord Brabazon of Tara: My Lords, I certainly hope that the proposals concerning the Inter-regional Air Services Agreement will be tabled in time for discussion at the December meeting. We should certainly like to see some progress made on that matter. So far as concerns air traffic control measures, obviously if the Commission has proposals to make we should be interested to see them. However, I emphasise that we do not want to divert scarce resources and have too many people becoming involved in this matter. We already have Eurocontrol and ECAC.
Baroness Burton of Coventry: My Lords, surely the Minister is not telling the House that it is a sideline to consider the matter of air traffic control, in view of what happened this summer. Is he not aware that on the 19th he told me that this matter would be discussed on the 26th? I realise that the Minister is not responsible for the fact that the Commission has not tabled that report, but surely he is not now suggesting that their proposals for air traffic control should not be available by 8th December, is he?
Lord Brabazon of Tara: My Lords, on the 19th I said that it was the intention of the Commission to table proposals. The fact that it did not get around to doing so cannot be put down to me. As I said, we have a number of organisations involved in air traffic
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control in Europe, principally Eurocontrol and ECAC. We shall obviously be interested to see what the Commission has to propose, but I think that primarily those two organisations should be in the lead on the matter.

London Docklands Railway (Beckton) Bill
3.20 p.m.
Read a second time, and committed to a Select Committee.

British Railways (No. 2) Bill
Read a second-time, and committed to a Select Committee.

British Railways (Penalty Fares) Bill [H.L.]
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Promoters of the Bill have leave to suspend any further proceedings thereon, in order to proceed with the Bill, if they shall think fit, in the next Session of Parliament, provided that notice of their intention to do so be lodged in the Office of the Clerk of the Parliaments not later than three o'clock on the day before the close of the present Session, and that all fees due thereon up to that period shall have been paid;
That such Bill shall be deposited in the Office of the Clerk of the Parliaments not later than three o'clock on the third day on which the House shall sit after the commencement of the next Session of Parliament, with a declaration annexed, signed by the Agent, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present Session;
That the proceedings on such Bill shall, in the next Session of Parliament be pro forma only in regard to every stage through which the same shall have passed in the present Session, and that no new fees be charged to such stages.
That the Standing Orders by which the proceedings on Bills are regulated shall not apply in the next Session of Parliament to such Bill in regard to any of the stages through which the same shall have passed during the present Session.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a message be sent to the Commons to acquaint them therewith.

London Regional Transport Bill
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Promoters of the Bill have leave to suspend any further proceedings thereon, in order

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to proceed with it if they shall think fit, in the next Session of Parliament, provided that notice of their intention to do so be lodged in the Office of the Clerk of the Parliaments not later than three o'clock on the day before the close of the present Session, and that all fees due thereon up to that period shall have been paid;
That, if the Bill is brought from the Commons in the next Session, the Agent for the Bill shall deposit in the Private Bill Office a declaration, signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Commons in the present Session;
That the proceedings on such Bill shall, in the next Session of Parliament be pro forma only in regard to every stage through which the same shall have passed in the present Session, and that no new fees be charged to such stages.
That the Standing Orders by which the proceedings on Bills are regulated shall not apply in the next Session of Parliament to such Bill in regard to any of the stages through which the same shall have passed during the present Session.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a message be sent to the Commons to acquaint them therewith.

Housing Bill
3.22 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that Her Majesty and His Royal Highness, having been informed of the purport of the Housing Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 1 [Assured tenancies]:
The Minister of State, Department of the Environment (The Earl of Caithness)The Minister of State, Department of the Environment (The Earl of Caithness) moved Amendment No. 1:
Page 2, line 23, after ("effect") insert ("subject to subsection (4A) below").
The noble Earl said: In moving Amendment No. 1, with the leave of your Lordships I shall speak at the same time to Amendments Nos. 2, 16, 17 and 34.
We are concerned here with tenancies where the landlord is a fully mutual housing association, usually referred to as a housing co-operative. Schedule 1 to the Bill provides that such tenancies cannot be assured tenancies. We have included this provision on the argument that a statutory regime designed to regulate the relationship between landlord and tenant really has little relevance in a situation where, as is the nature of a co-operative, the interests of landlord and tenants as a whole are in effect indivisible. This remains the Government's
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view. It is a view which, I can assure your Lordships, has the support of the National Federation of Housing Co-operatives.
It has nevertheless emerged that a small number of co-operatives are at present letting on the basis of old-style tenancies under the Housing Act 1980. The Bill provides that such tenancies will ordinarily be assimilated into the new statutory regime. However, the fact that co-operatives will in future be precluded from granting assured tenancies would mean that, as matters stand, tenants who currently have protection under the old style tenancy scheme would have no statutory protection at all once the Bill takes effect.
As I have suggested, the existence of such protection must be seen as being of largely theoretical value, given the essential nature of the co-operative. Nevertheless, the view has been put that it would be wrong, as a matter of principle, to deprive tenants of rights which they now have. The Government accept the force of this argument.
The first three amendments in this group—Amendments Nos. 1, 2 and 16—deal with the problem by providing that an old-style assured tenancy under which the landlord is a fully mutual housing association will become, on commencement of the Bill, a new-style assured tenancy. I emphasise that this is essentially a transitional provision applying only to tenancies which are already in existence when the Bill takes effect. The general exclusion on co-operatives granting assured tenancies will be unaffected.
I hope your Lordships will agree that this represents the most sensible way of resolving matters. The other two amendments in the group are simply drafting amendments which have the effect of transferring the definition of fully mutual housing association that is at present in Schedule 1 to Clause 45, which is the general interpretation clause for Part I of the Bill. I commend the amendments to your Lordships. I beg to move.
Lord McIntosh of Haringey: My Lords, in rising to speak to this amendment I should like first of all to offer my congratulations to the noble Earl on achieving today the mature age of 40. It has not yet turned him grey, despite the fact that this 40th year must have been one of the most strenuous in his life, starting with matters of criminal justice and ending with the varied activities of the Department of the Environment. I promise him that we shall try to make his 41st year as stressful as his 40th year!
Those of your Lordships with sharp eyes will have seen that these amendments appeared in my name on the Marshalled List at Report stage. I did not move them because of a last minute doubt about their wording. I apologise to the House for wasting its time then and now. I am now satisfied that the wording is as it should be and I am happy to offer our support to the amendments moved and spoken to so ably by the noble Earl.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. Yes, my hair has not gone grey; it has just fallen out.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 2:
Page 2, line 26, at end insert—
("(4A) In any case where—

(a) immediately before the commencement of this Act the landlord under a tenancy is a fully mutual housing association, and

(b) at the commencement of this Act the tenancy becomes an assured tenancy by virtue of subsection (3) above,

then, so long as that association remains the landlord under that tenancy (and under any statutory periodic tenancy which arises on the coming to an end of that tenancy), paragraph 12 of Schedule 1 to this Act shall have effect in relation to that tenancy with the omission of sub-paragraph (1)(h).").
On Question, amendment agreed to.
Clause 7 [Orders for possession]:
The Earl of Arran The Earl of Arran moved Amendment No. 3:
Page 6, line 43, at end insert ("but nothing in this Part of this Act relates to proceedings for possession of such a dwelling-house which are brought by a mortgagee, within the meaning of the Law of Property Act 1925, who has lent money on the security of the assured tenancy").
The noble Earl said: My Lords, this is a useful technical amendment and I commend it to your Lordships' House. I beg to move.
On Question, amendment agreed to.
Clause 13 [Increases of rent under assured periodic tenancies]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 4:
Page 10, line 13, leave out from second ("tenancy") to end of line 17.
The noble Lord said: My Lords, for the convenience of your Lordships we shall deal also with Amendments Nos. 4, 6 and 8. These three amendments—
The Earl of Caithness: My Lords, if the noble Lord will forgive me, the amendments are Amendments Nos. 5, 6 and 8.
Lord Dean of Beswick: My Lords, with that correction from the Minister I think we may now proceed. This issue was debated at great length at the Report and Committee stages of this Bill. I have to say that I believe the Minister was completely wrong about the effect of the Act, and these amendments are designed to bring into effect what the Minister said the Act would in fact mean.
These are some of the most important amendments in this part of the Bill. They aim to ensure that if a rent assessment committee determines the rent, that should become the maximum rent chargeable. This is a logical, sensible and essential portion to take. If the Government continue to take the view that landlords should be free to persuade tenants to pay a rent which is higher than the one which has been determined or recommended by the rent assessment committee, a great number of tenants who are forced to rely on housing benefit will find themselves in an absurd position. Their housing benefit will be calculated on a rent lower than that which in fact they have to pay.
At Report stage, as recorded in the Official Report, for 24th October at col. 1366, I said:
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"There will be people who will not be reimbursed for the X factor"—
as I termed it—
"which is the difference between what the rent assessment committee says and what the landlord demands. Inevitably … that will have an adverse effect on the figures of homelessness and drive those figures upwards"
With your Lordships' permission I quote also from col. 1367 of the Official Report. The Minister replied:
"My Lords, I should like to comment on one aspect of what the noble Lord has said. I believe that there is a fundamental flaw in his argument with respect".
The Minister referred to my saying that there might be a landlord who under certain circumstances found that the rent determined by the rent assessment committee was not acceptable.
The Minister, still referring to my remarks added:
"He went on to say: 'Then the landlord wants more. How is the tenant going to pay the X factor, the amount of money between what the rent assessment committee determines and what the landlord wants?' There is no X factor because the rent determined by the rent assessment committee will be the statutory maximum recoverable".
I have not argued that. Of course that will be the maximum that can be recovered. That is not the point that I was making.
I was arguing that the provision would leave an X factor which, under the Bill as it stands, the tenant cannot recover. He will have to meet the full cost. I believe that the Minister was wrong in his assessment. If he was given a brief, it was the wrong one. Those are the provisions of the Bill as it stands and as it will operate.
I then repeated the facts of the case. To my distress, the Minister, I believe unintentionally, misled the House before it voted. I do not say that it was deliberate because I know him far too well to think that he would be involved in such a course. However, the Minister got it wrong; I did not. As I have stated the position, that is how the Act will operate. That is how the tenants will understand the position. It will mean that the tenants who undertake these agreements who are just above the lower earning bracket and who will not be able to afford these rents will be driven into penury. I believe that it will have a terrible effect on the homeless people in this country.
The Minister repeated this on the second occasion that we discussed the issue. I do not understand how the two of us can be so far apart on interpretation when one considers the expert advice that I am being given and the advice from civil servants that the Minister is given. I am 100 per cent. convinced that I am right. There will be tenants who will not be reimbursed in some cases for large sums of money because the figure that the landlord will finally determine is the rent that he wants unless the amendments are accepted and the sum that the rent assessment committee recommends becomes the rent.
The Bill does not provide that. It states that the landlord can still pursue a rent in excess of the recommendation of the rent assesssment committee because, as I understand the Bill, it is not i n a position to make an arbitrary decision that such a figure is the rent. It does not have that power.
These amendments seek to give statutory force to what the Minister claims is the position under the

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Bill, and which, in our view, should be the position. We urge the Minister to accept the amendments based on what he stated at Report stage.
I repeat, and stand by, my argument. If the Minister says once again that I am wrong, I have to tell him that in the not too distant future he will have to come to the Dispatch Box—when tenants are having to find these sums of money which will not be reimbursed through housing benefit—to tell the House that he was wrong. I have stated what could happen with the present housing situation. We are approaching Christmas. There are numbers of homeless people who will have no home in which to sit on Christmas day. I hope that the Minister will give great consideration to what I have said. If he wishes the Bill to operate as he stated at Report stage, I hope that he will accept these amendments in the good faith in which they are offered.
3.30 p.m.
The Earl of Caithness: My Lords, as the noble Lord, Lord Dean of Beswick, said, with these amendments we return to issues that were debated at some length at both Committee and Report stages and clearly the divergence of view between each side of your Lordships' House will be no less wide today than on the earlier occasions.
As noble Lords will by now be well aware, we on this side of the House start from the proposition that the rent for an assured tenancy should be first and foremost a matter for free negotiation and agreement between the landlord and the tenant. That, in our view, is a necessary and entirely proper feature of the free market principle which we are seeking to apply to private rented housing.
Thus under the new regime the landlord and tenant will be free to negotiate not only the initial rent for the tenancy but also—if they wish—a contractual procedure for reviewing that rent at subsequent intervals. In cases where they do agree on such a procedure, that procedure will be binding on both parties with no provision for it to be overridden by statute. The primacy of contract is absolutely fundamental to our thinking in this respect. Amendment No. 4—which would allow the statutory procedure to operate regardless of any contractual provision—is thus, I am afraid, wholly inconsistent with our approach.
Amendment No. 5 which is presumably designed to allow unrestricted access to the rent assessment committee is open to objection on the same grounds.
Equally important in our view is the freedom of landlord and tenant to make changes in the rent by agreement without resorting to statutory means. We accept that a statutory procedure for increasing the rent needs to be available but we do not believe that it should get in the way if the landlord and tenant prefer to resolve matters independently. As I said to the House on an earlier occasion, there is plenty of evidence to suggest that the majority of landlords and tenants are perfectly able and willing to sort out their affairs by amicable negotiation and we are determined that the law should not operate in a way
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which makes it harder for them to do so. Amendment No. 5 would have precisely that effect.
Amendment No. 8 would have the effect of making the rent determined by the rent assessment committee for an assured tenancy the statutory maximum rent recoverable from the tenant. This again is incompatible with our view that statutory procedures should not normally contrain the freedom of landlord and tenant to settle their affairs by agreement. Let me make it absolutely clear to the noble Lord, Lord Dean of Beswick, that where the rent assessment committee determines a rent for an assured tenancy that rent will become the rent payable under the contract and it will—I emphasise—not be open to the landlord to require the tenant to pay a higher rent. But we do believe it is right that the landlord and tenant should be free to agree—and I stress the word "agree"—on a different rent from that set by the committee if they prefer to do so. Amendment No. 8 would remove that freedom.
We believe that the statutory rent-fixing procedure we have designed will ensure adequate protection for tenants in those situations where it is needed. But we are quite determined that the law should not at any stage get in the way of people who are perfectly capable of sorting matters out between themselves.
Let me recapitulate and make the position clear once more to the noble Lord. Where the rent assessment committee determines a rent, that will be the rent payable under the tenancy unless the landlord and tenant agree on a different figure. The tenant cannot be compelled to pay more than the rent assessment committee's determined rent. I repeat to the noble Lord: there is no X factor.
Lord Dean of Beswick: My Lords, we now have a clearer picture of what the Minister stated last time. On behalf of my colleagues on this side of the House, I am delighted to know that the recommendation of a rent assessment committee is binding on both parties. We are not disagreeing with the fact that there may be some argument for two parties to negotiate a settlement or agreement for rent.
I do not wish to delay noble Lords any longer because the issue has been well debated. We have argued that with the tremendous housing shortage in the main areas about which we are talking, the strongest negotiator will be the landlord and not the tenant. But we have argued that in the past. We cannot pursue it today and do not wish to do so. But if the Minister is saying that a rent assessment recommendation or a rent set is binding on the landlord, I am quite happy to accept that. I still believe that there will be an × factor because in a tremendous housing shortage there will be desperate tenants. These are the people I am concerned about; people just above the public benefit sector who are perhaps low wage earners, not on such a high income or perhaps on some form of housing benefit already.
They may in desperation agree to a higher rent than might normally be expected. Whether the Minister likes it or not, those people will have an × factor that they will have to swallow. I can only see it resulting in more people joining the homeless

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queue. I believe that the Minister will eventually have to defend an ever-increasing upward spiral of homeless people in this country.
I believe that we have had a good debate on this subject and by leave of the House I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
Clause 14 [Determination of rent by rent assessment committee]:
[Amendment No. 6 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 7:
Page 11, line 15, leave out ("5") and insert ("6").
The noble Lord said: My Lords, with this amendment, and Amendments Nos. 36 to 42, which I propose to speak to at the same time, we return to the issue of the landlord's right to possession of a dwelling at a time of redevelopment. The House will recall that when we debated this matter at Report stage we sought to give the courts the right not to give the landlord possession if they considered that was appropriate. We felt that the mandatory possession, which is where Ground 6, the redevelopment ground, occurs in Schedule 2 of the Bill, is unsatisfactory because of the difficulty of keeping landlords to the exercise of a genuine right to possession at a time of redevelopment, as opposed to the risk that they might use the redevelopment clause as an opportunity to gain possession by unfair means.
We are still extremely concerned that landlords could drive a coach and horses through the Bill on this ground and that they might gain access to property using the redevelopment ground quite unjustifiably. The amendment to Clause 14 is merely a consequential amendment because all references to Ground 6 have to be amended if we are to deal with the substantial issues in Schedule 2. The same is true of Amendments Nos. 40, 41 and 42, but Amendments Nos. 36, 37 and 38 deserve a little more attention.
Amendment No. 36 is concerned with the issue of whether the redevelopment condition can be used at a time when the tenant is not aware that development is a possibility when he took on the tenancy. I debated the matter with the Minister on this point on Report and he was good enough to write to me subsequently to say that he thought there was an issue when the assured tenant is the successor to the statutory tenant under the Rent Act where the landlord had bought the building over the head of the statutory tenant. I understood him to agree that this was a risk and that he was tabling an amendment to this effect. If I am right, that is Amendment No. 35, which we are not debating with these amendments. We shall listen to the debate on it with attention later.
As it stands, we do not feel that adequate protection is given. We believe that it ought to be a principle of natural justice—no more and no less than that—that redevelopment clauses cannot be implemented after the tenancy has started and if no notice had been given at the time of the tenancy.
Amendment No. 37 deals with the issue of suitable alternative accommodation. We are proposing that the landlord should be obliged to offer the tenant suitable alternative accommodation which is available or will be available when the order takes effect. As it stands, this part of the Bill is unsatisfactory. The Government have refused to make its use subject to court discretion, as I have just been saying. They have made it mandatory for the courts to give possession. It seems to us only too likely that a minority of unscrupulous landlords—nevertheless probably a significant minority—could offer to make accommodation available which did not turn out to be available when the order took effect. That means in reality that the tenant would be on the streets and the landlord would secure his possession regardless.
Amendment No. 38 refers to the danger of landlords gaining possession by persuading sitting tenants to move to different parts of the building. There are some safeguards in Ground 6 about that, but we do not believe that they are enough to prevent a developer using Ground 6 and persuading a tenant to take a new tenancy in the other accommodation and then claiming that it was granted after he had bought the freehold and after he had given notice of his intention to use the redevelopment clause.
Amendment No. 39 is a consequential amendment and does not need further attention. I describe these amendments even at this late stage as probing amendments. With the amendments we are looking for a recognition by the Government that Ground 6 on its present drafting, and with the condition that it is mandatory for the courts to grant possession under Ground 6, is not adequate for the purpose, does not protect tenants adequately and further protection is required along the lines of Amendments Nos. 36, 37 and 38. I beg to move.
3.45 p.m.
The Earl of Caithness: My Lords, it may seem a slight thing to create a prior notice requirement for Ground 6 when that requirement already exists for Grounds 1 to 5, as the noble Lord, Lord McIntosh of Haringey, has sought to argue. But I contend that Grounds 1 to 5 are much more limited and specific. An owner-occupier letting his property, a property subject to a mortgage or a letting of property which is normally used for holiday or student lets or for use by a minister of religion are all precise cases in which the landlord will know that he is likely to want the property back, probably within a known timescale. It is right that the tenant should specifically be advised of the fact.
I contend that Ground 6 is rather different from these other grounds, for which there is already a prior notice requirement. Ground 6, as the noble Lord, Lord McIntosh of Haringey, said, is the development ground. It is designed to facilitate legitimate development which cannot be undertaken with the sitting tenants in place. We do not want to put so many restrictions on this ground that it cannot be used at all.
A landlord who buys a property may not know what his long-term intentions are. It may be clear that

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there are development possibilities, or it may be an extremely remote prospect. A new tenant who takes on an assured tenancy takes it on against this background. It is one of the grounds for repossession which could be used in certain circumstances. A tenant will make his own assessment of the likelihood of its being used and he can be confident that it cannot be used if there is a possibility of doing the development work around him. If we were to make prior notice a condition of this ground, I believe that it would be served in every case just so that the landlords covered the possibility of redevelopment. Thus it would become meaningless, and I contend to your Lordships that it would also become alarmist.
I do not see Ground 6 as akin to Grounds 1 to 5. It is a carefully drawn ground to facilitate development of a kind that cannot be done with the tenants in occupation. It applies only to post-commencement tenancies. It is a factor which tenants must take into consideration when deciding whether to accept a tenancy, not a specific event which they must inevitably accept will happen.
The noble Lord, Lord McIntosh, rightly drew attention to the fact that the power could be abused by some landlords. I draw attention to the fact that we have considered the matter and made provision for it in the Bill. If a landlord goes to court to obtain possession on those grounds, and does not give the right evidence or pursue through the development project, then under Clause 12 of the Bill compensation will be paid to the tenant for misrepresentation or concealment. Therefore we have taken into account what a bad landlord could do by way of abuse and we have included a safeguard for the tenant.
Amendments Nos. 37 and 39 have been discussed previously. The ground is not intended to be so restrictive as to hinder development. If a landlord had to find suitable alternative accommodation for every tenant whom he was forced to displace, I should contend that the ground would be unusable and that a development would never take place which cannot be in the long-term interest of providing accommodation. If a landlord has suitable alternative accommodation, and if he is a major developer, he could use the ground. We believe that Ground 6 strikes the right balance at the moment. It protects the tenant from being displaced where the proposed development is such that it can be carried out around them but it does not stand in the way of major projects.
As the noble Lord, Lord McIntosh, said, Amendment No. 39 is consequential to Amendment No. 37 to which I have just spoken.
Finally I turn to Amendment No. 38. I fully appreciate the intention behind the amendment to Ground 6. It attempts to deal with a problem of which we are well aware. It is that a company of dubious standing might attempt to evade the provisions of the ground which do not apply in respect of a tenancy already in existence when the landlord acquired his interest by creating a subsidiary company which could then grant a new tenancy to the sitting tenant.
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The problem lies in trying to draft a provision which is sufficiently comprehensive to cover all the options. It is in the nature of shady organisations that if you leave a loophole they will find it. That means in practice, I fear, that if you go for economical and elegant drafting you leave a loophole. If you try to cover all the options you have lengthy, complicated provisions and you completely distort the ground.
This amendment, I am afraid, leaves loopholes. For example, it does not cover partnerships which I am sure that the noble Lord would like to cover. In common with any provision which relates to formal arrangements, such as companies, it does not cover the purely informal arrangements whereby the interest in the tenancy could be transferred as a gift between friends, for instance. Finally, it would also catch quite legitimate transfers of interest between, for example, companies in the same group.
I hope that the noble Lord will accept my assurances that we were alert to the problem but decided that there was no straightforward, manageable way of tackling it comprehensively. Even the noble Lord, using all his abilities, has not been able to produce an amendment which achieves that; it leaves many loopholes.
The noble Lord, Lord McIntosh, was right to draw your Lordships' attention to Amendment No. 35 standing in my name and which I believe will help the Bill. However, for the reasons which I have given I cannot accept Amendment No. 7 tabled by the noble Lord.
Lord McIntosh of Haringey: My Lords, the Minister finds himself in the curious position of agreeing with much of the argument yet rejecting the conclusion. I find it unsatisfactory that, at Third Reading of a Bill which has been around for most of the year, the Minister should be confessing on behalf of the Government an inadequacy in the drafting capacity of his department and of parliamentary draftsmen. If he recognises the issue it is his responsibility to deal with it and not mine. I appreciate his tributes to my ability but I do not have his resources.
He has confirmed more clearly than I had thought possible the justification for our amendments. There are already loopholes in the legislation. They might have been overcome more simply if the Government had accepted our amendment tabled at Report stage. It removed the matter to the discretion of the courts and stopped it being a mandatory ground for repossession. It would have removed all their drafting difficulties by enabling the courts to make a decision about the right solution in any case. The Government rejected that amendment and put themselves in the position of having the Minister face your Lordships confessing that his department and the Government as a whole do not have the capacity to produce the Bill which he wants. That is not good enough at Third Reading.
The position is as he confirmed. There is a small minority of unsatisfactory landlords who will use the redevelopment ground in order to exploit their tenants. That is now common ground between us. It is only because we have the loopholes in the drafting

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of our amendment, and which I acknowledge, that I am obliged to seek your Lordships' leave to withdraw. However, I certainly do not withdraw any of the arguments that have been made. I shall be glad to give way.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. He will appreciate that I cannot agree with his summing-up of the Government's position. As I made clear in my explanation for resisting Amendment No. 38, the more that the noble Lord tries to complicate the issue the more complicated the procedure becomes. We shall end in the situation which the noble Lord's party tried to rectify with the Rent Acts which tried to protect tenants. As noble Lords are aware, they did nothing of the kind. They were a contributory factor to the exploitation of tenants by landlords who wished to exploit them. To go down the route which the noble Lord wanted to go down would only encourage that. I believe that the Government's position is wholly tenable.
Lord McIntosh of Haringey: My Lords, I do not believe that noble Lords will consider that tu quoque is an adequate response to the charges that have been made about the drafting and effects of the Bill. The noble Earl rests his case on the need to secure that redevelopment and rehabilitation take place and are not prevented by law from doing so. We agree with those objectives. We are not trying to secure that all rented properties stay frozen without dramatic improvement in many cases. However, the effect of the legislation is that improvement will take place at the expense of the tenants and to the profit of the landlords. Unless the provision for suitable accommodation in particular is rigorously enforced—and we do not see how it can be under the present drafting—what I suggest will inevitably result. The landlords will benefit, the tenants will not benefit and more redevelopment will not necessarily take place. Redevelopment is intended to provide better homes, not simply profits for landlords. I am most dissatisfied with the responses of the noble Earl. If this were an earlier stage I should certainly wish to return to this most important issue. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Clause 27 [Damages for unlawful eviction]:
The Earl of Arran The Earl of Arran moved Amendment No. 9:
Page 20, line 40, leave out ("by") and insert ("to").
The noble Earl said: My Lords, I should like to speak also to Amendment No. 53. Both amendments make a small but useful drafting amendment to this Bill and to the Scottish Bill. They provide that where the court decides that there is a case for mitigating damages under Clause 27(7) it may reduce those damages to, rather than by, an appropriate amount. Effectively, the wording makes the job of the court in calculating the damages rather simpler and there may he county court judges who are grateful for the revised wording, which potential obviates the need for some sums to be done. I beg to move.
On Question, amendment agreed to
Clause 31 [Excluded tenancies and licences]:
4 p.m.
The Earl of Arran The Earl of Arran moved Amendment No. 10:
Page 24, line 40, after ("if") insert ("(a)").
The noble Earl said: My Lords, in moving Amendment No. 10 I shall speak also to Amendment No. 11 These amendments arise as a consequence of a commitment I gave to the noble Lord, Lord Meston, on Report. We undertook tc bring forward an amendment to provide that where a landlord or licensor enables a tenant or licensee to live rent free, then that tenancy or licence will be excluded under the terms of Clause 31 and it will not be necessary to obtain a court order to evict him. As the noble Lord said, there is a world of difference between a licensee or tenant who occupies premises and pays something to cover costs and the non-paying guest who lives completely rent free. I think there are very few people in this category, but I do not think it should be necessary to get a court order to evict them. I beg to move.
On Question, Amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendment No. 11:
Page 24, line 42, at end insert ("or
(b) it is granted otherwise than for money or money's worth").
On Question, amendment agreed to.
Clause 34 [New protected tenancies and agricultural occupancies restricted to special cases]:
The Earl of Arran The Earl of Arran moved Amendment No. 12:
Page 27, line 22, leave out ("has ended") and insert ("ended before the commencement of this Act").
The noble Earl said: My Lords, in moving Amendment No. 12 I shall also speak to Amendments Nos. 13 and 14. These amendments clarify the position as regards existing shorthold tenants who are granted new tenancies by their landlords. It was our intention that an old-style shorthold tenant who stayed on in the property after the expiry of his old-style shorthold lease should come automatically into the new system as a shorthold tenant. If the landlord granted a new tenancy by granting a new-style shorthold, the position would of course be clear. However, a landlord could inadvertently create a new tenancy by varying the terms of the old tenancy or, say, increasing the rent. In such circumstances, he might imagine that his tenant was still a shorthold tenant, but without this amendment the position would not be straightforward. Amendments Nos. 12 and 13 make it quite clear that an old-style shorthold tenant who stays on after the expiry of his lease becomes a new-style shorthold tenant without the landlord needing to serve notice to that effect. It avoids a trap for landlords. Amendment No. 14 caters for the position where there are joint tenants one of whom was not party to the original tenancy agreement. In this case, when the tenancy agreement is subsequently varied the new tenancy will not automatically be a new-style assured shorthold. I beg to move.
On Question, amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendments Nos. 13 and 14:
Page 27, line 23, after ("which") insert ("at that commencement").
Page 27, line 35, at end insert ("and
(c) the landlord and the tenant under the tenancy are the same as at the coming to an end of the protected or statutory tenancy which, apart from subsection (2) above, would fall within subsection (1)(b) above".
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 15:
Page 28, line 5, at end insert—
("( ) In Part IV of Schedule 15 of the Rent Act 1977 there shall be added after paragraph 4(2):—
"(3) For the purposes of sub-paragraph (1)(b) a tenancy which is an assured tenancy within the meaning of Part I of the Housing Act 1988 shall not be treated as affording the required security by reason only of the fact that the tenancy is an assured tenancy within the meaning of the Housing Act 1988." ").
The noble Lord said: My Lords, Amendment No. 15 was moved in Committee. When we moved it we received recognition from the Minister that there was something in the case that we were putting. He said:
"There is no doubt that the noble Lord has hit on a good point here. We accept the principle behind the amendment. If he will withdraw it at this stage we will deal with the point at a later stage".—[Official Report, 25/7/88; col. 123.].
On Report the noble Earl, Lord Arran, moved Amendments Nos. 96 and 100, which purported to deal with the points which we were making; namely, that assured tenants should have the right to suitable alternative accommodation and that right should be extended to those who have assured tenancies within the meaning of this Act as well as within the meaning of previous Acts. On Report (at col. 1456) I said that although I was grateful to the noble Earl for clarifying the amendments, they did not really meet our point. The point I made then, which we again have to make by re-introducing our Committee amendment, is that there is no guarantee that the Bill as amended does not leave the way open for a court to decide that an assured tenancy offered as alternative accommodation is the equivalent of a protected tenancy and therefore is suitable just because it is an assured tenancy.
The suitability of alternative accommodation not only relies on the physical quality of the accommodation. It also requires adequate security of tenure; otherwise it is not a suitable alternative. In fact the tenant is going downhill and losing his rights rather than retaining them, which is what we thought the Government recognised was necessary. Therefore, there are occasions when the matter will be all right. There will be occasions when the quality of the tenancy as well as the quality of the accommodation will be good enough. There are other occasions when it will not be and everything will depend on the quality of the contractual terms on offer.
With this amendment we have taken the wording from the Government's own Housing and Planning Act, which states:
"The assured tenancy shall not be treated as affording the required security by reason only of the fact that it is an assured tenancy".
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We want to make that clear to the county court. We believe that our amendment does that. We believe that it is in accordance with the Government's intentions as expressed to us in Committee. We hope that they will feel that we have properly returned to this matter, because consideration on Report was not adequate and they would be best honouring their commitment by accepting the amendment which I now move. I beg to move.
The Earl of Caithness: My Lords, as the noble Lord said, Amendment No. 15 is based on the premise that amendments made to Clause 34 have not gone far enough to meet the commitment given in Committee to clarify the point that in certain circumstances an assured tenancy offered as alternative accommodation might not be sufficient security to a tenant if he or she is a former Rent Act tenant.
With respect to the noble Lord, I can assure him that they do. It has never been the case that where a court ordered possession from a protected tenant under Section 98 of the Rent Act on the grounds that suitable alternative accommodation was available, that accommodation had to be let on a protected tenancy. Provided that the contractual terms of the new tenancy gave the tenant reasonably equivalent rights, the court could order possession if the new tenancy was not protected. In the Housing and Planning Act 1986 we provided that a tenancy should not be regarded as suitable under Section 98 merely by reason of being an old-style assured tenancy, but it might well be suitable given the right contractual terms. Although the provision in this Bill is not identical to the provision in that Act, we believe the amendments we have moved have the same effect.
Perhaps I can just expand on that, because the noble Lord was concerned that the wording of this Bill does not replicate the wording of the Housing and Planning Act. The context of the references in the two pieces of legislation is not the same. The wording of the 1986 Act was part of a consequential amendment to Schedule 15 of the Rent Act made by that Act. The wording of this Bill is part of a description: the types of tenancies which can be protected tenancies after commencement. In both cases, although the wording is different, the effect is that the court is not to assume automatically that an assured tenancy affords the required protection. Legal advice is that the shorter wording of the amendment we moved on Report achieves the required effect. I hope the noble Lord will accept my assurance on that.
Lord McIntosh of Haringey: My Lords, clearly I shall have to read carefully what the noble Earl said. It was worth reviving this matter in this way because that was not said so clearly on Report. That may have been my fault for not drawing it out adequately, because it is always a matter of mutual responsibility between the two Front Benches. However, on the face of it the assurances given by the noble Earl are adequate for my purpose and I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 37 [No further assured tenancies under Housing Act 1980]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 16:
Page 30, line 47, at end isert ("and, if the landlord granting the tenancy is a fully mutual housing association, then, so long as that association remains the landlord under that tenancy (and under any statutory periodic tenancy which arises on the coming to an end of that tenancy), the said paragraph 12 shall have effect in relation to that tenancy with the omission of sub-paragraph (I)(h)").
On Question, amendment agreed to.
Clause 45 [Interpretation of Part I]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 17:
Page 35, line 41, at end insert—
(" "fully mutual housing association" has the same meaning as in Part I of the Housing Associations Act 1985").
On Question, amendment agreed to.
Clause 74 [Transfer of land and other property to housing action trusts]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 18:
Page 58, line 26, at end insert—
("(4A) Without prejudice to the generality of subsection (4) above, the Secretary of State may issue guidance to local housing authorities as to:—

(a) the likely basis for the financial terms on which property will be transferred under this section, including the date or dates on which any sum payable to or by the local authority will be paid; and

(b) the procedure to be adopted for the adjustment by him of amounts prescribed under Part VIII (Capital Expenditure of Local Authorities etc.) of the Local Government, Planning and Land Act 1980 for local authorities to which property is transferred under section 84 below.").

The noble Lord said: My Lords, this amendment has been tabled because the situation has substantially changed since Report stage, when we queried whether the Government had actually provided sufficient finance for the acquisition of the housing action trust properties.
The House will recall that in a Statement in July, when the HAT programme was announced, a budget of £125 million was proposed for the housing action trust programme. The assumption was that the money was for the rehabilitation work and no specific reference was made to the cost of acquiring the properties. We queried that at the time because we felt that if the Government were serious about paying a proper sum to local authorities for the estates taken over by the housing action trusts, the public expenditure programme should provide the capital finance for that.
We also queried this matter on Report because we were not given adequate assurances that the money paid to local authorities for the properties in the housing action trust areas would be paid over, as is normal commercial practice, when the properties changed hands. We queried that in Committee, saying that 100 per cent. of the money should be paid over as the properties change hands. The Government did not like that so we came back and said that if they wanted to make staggered payments
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by agreement that would be acceptable; but again the Government refused to accept that.
That left us with the only possible implication that the Government are not prepared to make adequate financial provision in public expenditure for the housing action trust programme and that they were proposing to force local authorities to receive the money staggered over a period of time, which could be years. That is certainly not in accordance with normal commercial practice and in some circles might be considered to be sharp practice, particularly since the Government were studiously silent about the implications of what they were saying.
Since Report stage we have had the Chancellor's Autumn Statement. We now know the position for public expenditure, not only for this financial year but for the years 1989–90 and 1990–91. Significantly, there appears to be no reference to the resources for the acquisition of the proposed housing action trusts areas. Therefore, I ask the Minister: where will this money come from? If it is not in the Autumn Statement, where are we to find it? On Report the Minister said that it was not provided for in public expenditure but that it would be. I have given the Minister notice of this question so there is no reason why we should not have a clear and unequivocal answer.
Is the Minister able to confirm that none of the £50 million earmarked for next year will be allocated for acquisition? Is it the Government's intention to provide for enforced staggered payments to local authorities rather than pay money on the nail, as it should be paid? What is meant by taking account of other resources and by giving 100 per cent. approval for buy-back proposals under Clause 84?
Those questions are central to government financial responsibility. There must be good and clear answers to them if we are to appreciate what the Government actually mean by the housing action trust programme. As matters stand we have no such security. We have no such clear understanding and we have no confidence that the Government are prepared to put their money where their mouth is in regard to housing action trust areas. I beg to move.
4.15 p.m.
The Earl of Caithness: My Lords, in this amendment the noble Lord has returned to two issues which we have already discussed in Committee and during Report stage; namely, the financial arrangements for transferring property to HATs and for repurchases by the local authorities from HATs. The noble Lord's amendment invites the Secretary of State to issue guidance to local housing authorities on these matters.
The noble Lord did not specifically mention repurchases from local authorities this afternoon, though he did so at earlier stages, but it may be helpful if I expand on what I say to include that aspect. There is very little I can add to what I have said in earlier discussion on these matters. So far as concerns the transfer stock from local authorities to HATs, Clause 75 places a clear duty on the Secretary of State to consult the local authorities on the properties to be transferred and on the terms of the

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proposed transfer. The local authorities concerned will therefore have a full opportunity to express their views on the financial terms, including the date or dates on which any sum payable to or by the local authority should be paid.
I do not believe that it would be right to circumscribe these consultations in advance. Indeed, it is impossible to talk about the timing of payments in the absence of detailed information on the valuation of properties. Our consultations with the local authorities concerned must take account of individual circumstances of transfer.
I should add a further point. We announced in another place that we would be undertaking a review of the housing subsidy system as it applied to large-scale disposals of stock, including transfers to HATs. We are close to completing that review and we shall shortly be publishing a consultation document about the subsidy arrangements for dealing with outstanding loan debt left with local authorities when tranfers take place to a HAT. I hope that reassures the noble Lord.
The noble Lord expressed concern about whether the Government have proper provision for transfer payments. As an astute reader of the public expenditure White Paper for 1988, the noble Lord will have noted that the provision is exclusive of transfer costs, as he surmised when he moved the amendment. So also is the revised provision announced on 1st November by my right honourable friend the Secretary of State. This approach is necessary because we do not at this stage know which HATs will be established, let alone have detailed information about the valuation of properties to be transferred.
I can, however, give the noble Lord a categorical assurance that when these figures are known an adjustment will be made to the HATs' external finance limit to enable them to meet whatever is the purchase price. The receipts of local authorities will of course rise by the same amount, which is why an in-year change of this kind is possible.
As regards the second part of the noble Lord's amendment, I find it difficult to understand why it formed part of the amendment. I gave the necessary assurance in my press notice on 7th October and my honourable friend the Parliamentary Under-Secretary of State wrote to the leaders of the local authorities concerned at the same time. I repeated that assurance during the Report stage only last week.
Let me reiterate the position to make it absolutely clear. The Government have said that authorities which wish to repurchase HAT property when a Housing Action Trust has completed its improvement work will be given the necessary approvals to enable them to raise sufficient funds for acquisition. Under the present system, there would be an in-year addition to the council's housing investment programme allocation. Under the proposed new financial system, set out in our consultation paper Capital Expenditure and Finance, a supplementary credit approval would be issued. Unless the local authority is clearly in a position to
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raise part of the costs from within its existing credit limit or from its own resources—that is, from its past or estimated future receipts—the credit approval will cover 100 per cent. of the repurchase price. That was the part of the amendment that the noble Lord did not speak to, but I believed that it was worth reiterating what I said in order to put it on the record.
The price at which local authorities will repurchase HAT stock will be based on tenanted market value. This valuation basis will enable the purchaser, over time, to meet the loan charges from net rental income without having to increase rents above what can be afforded by those in lower paid employment.
Lord McIntosh of Haringey: My Lords, will the Minister permit me to intervene? I am following with great attention and interest what he is saying and I like what he has said about the 100 per cent. Can he tell me why there is a reference in Clause 84 to taking account of other resources before giving 100 per cent. approval?
The Earl of Caithness: My Lords, I had hoped that I had made that clear. It is because the local authority may be in a position to raise some or a great part of the cost from within its existing credit limit or from its own resources. That is the reason.
Lord McIntosh of Haringey: My Lords, with the leave of the House, can the local authority be forced to do that if the department decides that it is able to do so, or can the local authority decide whether it is able and willing to do so? I can quite understand the latter case, but it is the former that worries me.
The Earl of Caithness: My Lords, I fully appreciate that the noble Lord would prefer to have full credit approval of 100 per cent. in each and every case. However, I am sure that he will agree that if the local authority can afford it from its own resources which it and the department know that it has, surely it is right to ask the local authority to use some of its own resources.
Perhaps I may continue on the point of repurchasing. In principle there is therefore no need for any revenue subsidy. That was a point raised earlier in our debate on this question. However a local authority borrowing on conventional terms may find that loan charges necessarily exceed net rental income in the early years with a corresponding surplus in later years. Any such surpluses and deficits will be taken into account in calculating annual subsidy entitlement under the new HRA arrangements being introduced in 1990. We are in discussion with the local authority associations about these arrangements.
Your Lordships will be aware from what I have said that there has been some confusion about the financing of HATs and about the possible repurchase of HAT stock by a willing local authority. I felt it right to get that matter clearly on the record for your Lordships. I cannot agree that there is no confidence in the Government providing the money for HATs. If your Lordships look at the Autumn Statement made by my right honourable friend the Chancellor of the Exchequer, it will be seen that the budget for HATs has gone up.
Lord McIntosh of Haringey: My Lords, the only thing I can say about that reply is that it is good in parts. I return briefly to the issue which obliged me to intervene during the Minister's statement. He replied to me again by saying that if the local authority can afford it and the department also knows it can afford it, then there may be a contribution from the capital resources of the local authority rather than a contribution of 100 per cent. from the department.
That leaves open the fundamental question of who says that the local authority can afford it. If the Minister means by saying that the authority knows and the department knows that it requires both that the authority knows, recognises and agrees and that the department knows, recognises and agrees, I suppose that is an adequate answer. However, that is not quite what the Minister said. It still leaves open the possibility that the department may make a judgment about the authority's capital resources which leads the department to offer less than 100 per cent. The local authority may disagree and believe that there are other things upon which it should be spending its money rather than the repurchase of estates from the housing action trusts. I suspect the words were not taken directly from his brief, but I believe that if the Minister reads his words carefully he willing recognise that at the very least there is an ambiguity which I am sure he will wish to avoid.
The Minister has still not answered some of the other questions I asked and of which he was given notice. The most important question of all that he has not answered is whether it is the Government's intention to force local authorities toaccept staggered payments for the estates. I am speaking about the original transfer. Alternatively, is it the Government's intention to pay the cash on the nail unless they agree with the local authority that there should be staggered payments?
I did not sense an adequate answer to that point in what the Minister said. I am still not satisfied that the provision for the receipts that come in as an in-year addition to the housing investment programme and the provision as regards supplementary credits are adequate for the purpose.
These are complex matters, as many noble Lords will recognise. I believed that we had asked simple questions. We obtained one or two clear and straight answers regarding supplementary estimates. There are other matters which are still unclear and which will cause considerable concern to local authorities. I have no doubt that they will return to the Minister and the Secretary of State for further clarification of what was said on 1st November and what is being said today.
I do not believe it is appropriate for us to pursue this matter in the context of the Third Reading of the Bill, but I do not believe that the questions I raised have been adequately resolved by the answers given by the Government. But it is better that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 81 [Consent required for certain subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 19:
Page 64, line 2, at end insert—
("(4A) Before giving consent in respect of a disposal to which subsection (3) above applies, the Secretary of State—

(a)shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any house proposed to be disposed of; and

(b)shall have regard to the responses of any such tenants to that consultation.")

The noble Earl said: My Lords, I shall also speak to Amendments Nos. 28 and 32. They have a common purpose and origin in a commitment I made during our consideration on Report of Part IV. Your Lordships will recall that during discussion of what is now Clause 105, we considered the question of how tenants might be brought into the process of controlling subsequent disposals of former public sector housing acquired under tenants' choice.
During that discussion I said that my right honourable friend would be likely to require information from any person seeking his consent to a disposal about the nature and results of any consultation of the tenants of the housing proposed for disposal. But I went on to say that I would consider whether there should be a statutory right on the face of this Bill for such tenants to be consulted. I have considered the matter, including the arguments put to me by the noble Lord, Lord Graham of Edmonton. I concluded that it would be appropriate to secure a right for tenants to be consulted by including it in Part IV of the Bill. Moreover, I also decided that it should apply in addition to tenants of housing disposed of by a HAT under Part III of the Bill or by a local council under its existing powers in the Housing Act 1985.
Hence, I have brought for your Lordships' consideration the three amendments in this group. True to their common origin and purpose, they take on a common form. They place the duties on my right honourable friend rather than on the applicant for his consent. That reflects the reality that the sanction against failure to carry out the consultation is in the hands of my right honourable friend who would withhold his consent to the disposal, which could not then take place. Amendment No. 19 requires my right honourable friend to satisfy himself that any person seeking his consent to a disposal has consulted the tenants in the property proposed for disposal. It also requires him to have regard to the responses of the tenants concerned.
I would make only a few comments on these provisions. It is, as I have said, for the landlord to take the appropriate steps to consult his tenants. The steps will vary in particular circumstances and we would not want to be prescriptive about what they should be. But my right honourable friend will certainly want a coherent and convincing account of what those steps were before he could possibly satisfy himself, as the amendments require. He will also have to have an account of the tenants' views collected in that process before he could, as required, have regard to them before making his decision. I suggest that the amendments make a flexible but tight, effective and

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worthwhile safeguard for tenants in property acquired under the various disposal regimes established in, or regulated by, Parts III, IV and V of the Bill. I beg to move.
4.30 p.m.
Lord McIntosh of Haringey: My Lords, we generally welcome Amendment No. 19. It leaves the discretion of the Secretary of State all powerful in any dispute between a tenant and an undesirable landlord. We have not yet provided a veto under Section 106A of the Housing Act 1985 but this goes some way towards meeting what we are looking for. Amendment No. 28 is a concession to an amendment which we moved at Report stage. As the noble Earl reminded the House, he gave an undertaking to my noble friend Lord Graham to see whether he could clarify the matter on the face of the Bill.
I am bound to ask some questions. First, why does the provision fall short of the provision in Schedule 3A of the Housing Act 1985 which governs the consultation requirements when a local authority wants to dispose to a private landlord? What are the "appropriate steps" referred to in the amendment? The requirements for consultation in the 1985 Act are what the local authority should follow. Surely they should be on the face of the Bill. Surely, they should be on the face of the Bill in Part IV for the Part IV landlords. The 1985 Act provides that the Secretary of State shall not give his consent if it appears to him that a majority of tenants do not wish the disposal to proceed. Surely this should apply also to disposals by housing action trusts and Part IV landlords; it should be on the face of the Bill. This is the only veto that tenants will ever have: it is important that it should apply throughout our housing legislation. If the noble Earl can give answers to those questions, we shall not oppose the amendments.
The Earl of Caithness: My Lords, I had a nasty feeling that however generous I was to the noble Lord, Lord McIntosh of Haringey, I would never satisfy him fully. However, I feel that I fulfilled the commitment I made to the noble Lord, Lord Graham. I said that I wanted to look at the matter. On consideration I felt that it was appropriate to put this provision on the face of the Bill.
Through the mechanisms in the amendments before your Lordships my right honourable friend must satisfy himself that the tenants have been properly consulted and have regard to the reactions of the tenants. The noble Lord used the word "veto". That is not a word the Government have used, but we shall be discussing that point at some length later on. I am delighted to see the noble Lord, Lord Graham of Edmonton, back in his place. I know that he will be delighted by the amendments which satisfy the point that he made at an earlier stage.
Lord Graham of Edmonton: My Lords, will the noble Earl note that I am delighted with his delight?
The Earl of Caithness: In which case, my Lords, we are all delighted.
The noble Lord, Lord McIntosh, asked me why the provisions fall short of the detailed requirements in the 1985 Act. Those are appropriate to disposals by a public authority. They are not appropriate to the market-type constraints which will apply to independent approved landlords. We have gone as far as we can to meet the concerns of noble Lords. I believe that the Bill will be better for the inclusion of the amendments.
On Question, amendment agreed to
Clause 84 [Provisions applicable to disposals of dwelling-houses subject to secure tenancies]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 20:
Page 67, line 29, at end insert—
(" IA) The Secretary of State shall lay down regulations which—

(a) shall enable secure tenants of housing action trusts to indicate that they do not wish their houses to be disposed of by the housing action trust to a person as described in subsection (1) above; and

(b) shall direct the housing action trust not to proceed with the disposal of the houses of such tenants who have given such indications.").

The noble Lord said: My Lords, with this amendment we return to an issue which caused a certain amount of contention at Report stage. I refer to the issue of the assurances given to tenants in housing action trust areas about the disposal of their properties when the housing action trusts have completed their work. At Report stage I reminded the House that early in October the Parliamentary Under-Secretary of State, Mr. David Trippier, had written to all the occupiers in the housing trust areas. The letter was appended to a press release issued by the Minister on 7th October. I questioned whether the Bill provided the assurances which the Minister and Mr. Trippier were offering to tenants. In particular, I was referring to Mr. Trippier's letter. I shall quote again from the letter to see whether we can be adequately assured that the point has been dealt with.
Mr. Trippier wrote about choice of landlords. He said:
"Second, tenants are also worried about how much choice they will have about who their landlord will be after the Trust has carried out improvements. You need have no fear".
"You" is the "Dear Occupier" in the housing action trust area. The letter continued:
"You will be given a choice by the Trust about who you would like to see managing your home. And you will be able to make your own suggestions".
To me, that means two things. First, it means that the tenants will be consulted; in other words, they will be able to make their own suggestions. And, secondly, it means that the process will go beyond consultation to saying that they have a choice—in other words, they will be the ones to make a decision. At col. 1590 of the Official Report of 25th October, the Minister said:
"I am very happy to stick by the news release … I can tell the noble Lord … that that release has received some very favourable comments from tenants".
However, that is not what he said at an earlier stage of the debate. At col. 1586 he said that tenants will

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have a wider range of disposal options. There is nothing wrong with that, but it is not the same as giving them the choice. "A wider range" does not necessarily mean a range including the choice that tenants themselves want to make. The Minister also said at col. 1586 that housing action trusts,
"will have to take into account the wishes of any tenant who wants to return to a willing local authority, propose an alternative landlord or stay with the HAT".
That, again, is consultation; but it is not giving the tenants the choice. Finally, he said that the housing action trusts,
"will give remaining tenants a final choice between as many as possible of approved landlords, including housing associations and tenants' co-operatives, or the local authority if it is willing".
Saying "as many as possible" is not saying unequivocally, as Mr. Trippier said in his letter, "You will be given a choice by the Trust". What the Government are saying is that they will try to give a choice but that they will not necessarily achieve it.
Those things are different. No assurance appears either in the Bill or was given in the statements of Ministers at Report stage that tenants will have a choice as proposed by Mr. Trippier. We table these amendments in order to give effect to the undertakings of the Minister in his press release and by Mr. Trippier in his letter to tenants. I say that they are in honour bound to adhere to the undertakings given both generally in a press release and specifically in a letter to each tenant. Tenants must have a choice. That is what they were told.The Bill does not say it. If the House accepts the amendment, the Bill can say it. The House has an opportunity to remind the Government of their obligations. I beg to move.
Lord Pitt of Hampstead: My Lords, I wonder whether I may use this opportunity to raise a matter with the Minister that I mentioned on Report and for which I hope he has an answer. He may remember that I raised the question of the worry of the charitable housing associations that they have been informed—I think perhaps "advised" is the word I should use—that they may be ultra vires of the provisions of their charitable trusts if they grant succession rights over and above those provided by statute.
When I raised the matter previously, the Minister said that he would look into it. I am using the amendment as a connection, although it is a somewhat tenuous one, because the amendment refers to disposal of houses that are assured tenancies. If someone is having his assured tenancy transferred, that person would like to know whether the new landlord provides succession rights. So I think that there is a tenuous connection here.
However, I am really using the opportunity to ask the Minister whether he has in fact looked into the matter, and if he has done so, what his legal advice has been in this regard. The housing associations which have been in contact with me are still quite worried about the whole situation. They inform me that the Government are encouraging them to go ahead as is; but they are being told by the charity commissioners that they may in fact be ultra vires if they do so. I should like to know what the position is.
The Earl of Caithness: My Lords, perhaps I may answer the noble Lord's question, even if the connection between charitable housing and HATs is rather tenuous. They may be the same thing from the tenant's point of view, but I accept the tenuous connection that the noble Lord, Lord Pitt, has made. Unfortunately, I cannot tell him anything definite, but I can tell him that I have looked into the matter. We are taking the best advice that we can, and so far that advice seems to give me grounds for hope that the situation will result in a satisfactory outcome.
Obviously the noble Lord realises that I cannot go further than that at present. However, I am progressing with all due speed because it is a matter which needs to be resolved. I hope that it will end up as satisfactorily as we would all wish.
I return now to the amendment under discussion. As the noble Lord, Lord McIntosh, indicated, this is again well trodden ground. However, it might be helpful if I reiterate some of the main points about the process we envisage HATs going through when they transfer tenanted properties.
Within the constraints of HATs being short-life bodies to be wound up once their objects are achieved, tenants will have access to a wide range of disposal options. All HAT tenants will retain their right to buy even after transfer to new andlords. Any HAT tenant will be able to find himself the landlord he wants, either through tenants' choice provisions or by proposing an approved landlord to the HAT. HATs will foster tenant co-operatives and facilitate transfer to them. HATs will have to consult every secure tenant before transferring ownership of their homes to another landlord. And they will have to take into account the wishes of any tenant who wants to return to a willing local authority, propose an alternative landlord or stay with the HAT. When it appears to the HAT that its objects have been satisfactorily achieved, it will give remaining tenants a final choice between as many as possible of approved landlords, including housing associations and tenants' co-operatives, or the local authority if it is willing.
Clause 83 gives a right to detailed consultation: a right to receive the information they need to make informed choices; and a right to seek a return to a willing local authority or another landlord or to say that they want to stay with the HAT if they do not like a landlord offered by the HAT prior to its meeting its statutory requirements under Clause 87.
We are committed to seeing that those rights are honoured. We shall make that clear in the Secretary of State's management guidance which will be published. In addition my right honourable friend the Secretary of State has reserve powers of direction to make it stick; and of course disposals will only be allowed if the Secretary of State consents after he has received details of the representations made by tenants about the HATs proposals and a statement of the consideration given to those representations.
I should also point out that subsection 7 of Clause 83 gives the Secretary of State a specific power of direction to require a HAT to carry out further consultation with tenants about any proposed disposal. He might choose to exercise this power if he

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felt that a housing action trust's consideration of the representations it had received from tenants was inadequate.
Moreover, where tenants clearly indicated their dissatisfaction with a proposal the Secretary of State would, if he felt the situation warranted it, withhold his consent. So, as noble Lords will recognise, we have already built into Clause 87, an extra safeguard for tenants to ensure that their views are given proper weight by the HAT.
I was pleased that the noble Lord, Lord McIntosh of Haringey, used much more of the wording contained in the letter of my honourable friend the Parliamentary Under-Secretary when he mentioned the word "choice". On Report, the noble Lord talked much more about the "tenant veto" which, as I said in respect of the last amendment, were his words rather than the Government's words. What we said in our press statement and in the letter which my honourable friend the Paliamentary Under-Secretary sent to each occupier in one of the possible HAT areas that we are considering at the moment is entirely consistent. It gives the tenants a great deal more choice than they believed that they had at the time.
4.45 p.m.
Lord Ross of Newport: My Lords, I hope that I am in order if I speak now before the Minister sits down. Surely it would be the wish of the Government to wind up a HAT after it had done its job. Then, if the local authority has disposed of all its properties, surely the tenant has only the choice of whoever is taking over those properties from the HAT. It does not mean that the tenant can really stay with the HAT if it has been wound up.
The Earl of Caithness: No, my Lords. The point that the noble Lord, Lord Ross of Newport, missed, with respect, was that the tenant could stay with the HAT until it has fulfilled its obligations. That was the point I was making. The HAT may be disposing of part of its estate and, if the tenant wants to stay with the HAT for the time being, the provision will allow him to do so.
The noble Lord is absolutely right to say that these are short-life bodies. We do not intend them to be landowners for any great length of time. They will have a very definite task to go into an area, improve it and close themselves down. It is at that stage that we also want as many choices for the tenant as possible.
Lord McIntosh of Haringey: My Lords, I have to say that that was a disgraceful answer. I am not imputing anything personally against the Minister, but that reply is a denial of what in plain English was said to tenants by the Parliamentary Under-Secretary of State.
The Minister gave us a lot of talk about the management guidance which will be issued. He talked about the Minister's reserve powers; he talked about consideration given to representations by tenants; and he talked about the power of the
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Secretary of State to withhold consent. He talked as if somehow the sentence:
"You will be given a choice by the Trust about who you would like to see managing your home."
means something different from what in plain English it is clear that it does mean. It means that tenants are to be given a choice and if they do not like what is offered to them in terms of a landlord, then they can choose not to take what is offered. What else can it mean?
Is the Minister seriously suggesting that what Mr. Trippier meant was, "You will be given a choice about who you would like to see, but that choice won't necessarily be implemented". Is that what he is saying? If that is so, the people who have received that letter will feel that they have been conned. There is no other word for it. If I am told that I shall be given a choice, I expect that to mean that my choice will have effect; not that it will simply be taken into consideration, that the reserve powers will be used and that I will be assured that I am being consulted. It is an abuse of the English language. What the Minister is saying is in contradiction to what tenants were told.
I warn the Minister that it will fare very badly against him in the housing action trust areas when it is realised that the tenants will not have the opportunity to decide which landlord they are to go to when the HAT is wound up.
The Earl of Caithness: My Lords, with the leave of the House, the noble Lord totally misrepresents me again. I am amazed that the noble Lord could use such language. He has taken the twisting of words to a ludicrous extent. I hope that he will read with great care what I said. How the noble Lord summed up my words was totally different from what I actually said.
Lord McIntosh of Haringey: My Lords, what the Minister has not said—and I challenge him again so that he has an opportunity to say it—is that the sentence,
"You will be given a choice by the Trust about who you would like to see managing your home",
means that that choice will have an effect. In other words, that the tenant will actually choose and his choice will be brought into effect. If the noble Earl means that, that is fine, and I shall withdraw the amendment with pleasure. Does the noble Earl mean that?
The Earl of Caithness: My Lords, of course it means that the tenant will be given the choice. That is exactly what I have been saying all the way along.
Lord McIntosh of Haringey: My Lords, and that choice will be carried into effect, and there will be no cases of tenants being allocated to landlords whom they have not positively chosen? Is that what the Minister is saying?
The Earl of Caithness: My Lords, the noble Lord is now using a very wide phrase in order to make a certain set of assumptions. What I have said is that there will be choice for the tenants. But the noble Lord, Lord Ross of Newport, was absolutely right

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when he said that the HAT will be of limited duration. That is the key point that the noble Lord seems to forget from time to time, with respect to him.
It is at that stage that the HAT will want to give as much choice to the tenants as possible. They have a duty to be a short-life organisation. There are the reserve powers, as I said, clearly under Clause 83 for my right honourable friend the Secretary of State to give a direction to a HAT to carry out all the necessary consultation to be certain that the tenants' feelings and concerns are taken into account.
That of course will lead to presenting to the tenants as wide a choice as possible of landlords, and of course if the tenants have a preference for such a landlord, then I am sure that the HAT will be only too glad, providing that it is an approved landlord, for the tenants to transfer to that body.
Lord McIntosh of Haringey: My Lords, that is not what the letter says. The letter says that not only will you be given the choice. I forgot to read further down, where it says:
"You will be able to refuse any landlord the HAT offers you that you do not like".
The issue of the short life of the HAT has nothing to do with it. "You will be able to refuse any landlord". This is not consultation. What does that mean except a tenants' veto? In plain English, the Government must recognise that it is wrong, and that they are not enacting what the tenants have been told.
The rules of the House do not permit me to continue with this, but the issue cannot be clearer than it is now. If the Minister will stand up and say to me a last time that tenants will be able to refuse any landlord the HAT offers them that they do not like, then I shall sit down for the last time. The noble Earl has failed to do that. He has failed to meet the undertaking given by Mr. Trippier to all of the tenants.
The Earl of Caithness: Not at all.
Lord McIntosh of Haringey: My Lords, it is not appropriate for this House to pursue the matter in this way; but it will be pursued. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 100 [Tenants continuing as tenants of landlord]:
Lord Seebohm Lord Seebohm moved Amendment No. 21:
Page 80, line 42, at end insert ("or who gives notice of such a wish under section I02(5A) below").
The noble Lord said: My Lords, I wish to include Amendments Nos. 23, 24, 25 and 26 with Amendment No. 21. Before I start, I should like to correct a misprint in the Marshalled List, which I hope will be accepted. When Amendment No. 21 refers to "section 102(5A)" it should read "103(5A)". I hope that that may be accepted without further ado.
The main amendment here of course is Amendment No. 24, and that is the amendment to
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which I shall be speaking. This arises from that part of the Bill where a local authority will be selling tenanted property to another landlord. Quite rightly, the spirit of the Bill is of course that tenants should have tenants' choice and tenants' rights, and so they are going to be allowed to vote whether the transfer should take place or not. They are also allowed to stay put if they wish, and not be transferred whatever way the voting goes. The people who are left out are those who do not vote. They in fact in the Bill will be assumed to have voted for the change in favour of the purchaser.
This seems to me to be improper. I find it obnoxious that this inertia voting should be incorporated and enshrined in an Act of Parliament. However, I recognise a brick wall when I see it, and I know that we cannot pursue that particular argument any further. Actually the brick wall is not quite as thick as I thought it was. When we put Amendment No. 181 to your Lordships at Report stage it was defeated by only one vote. There are a great number of people, probably on all sides of the House, who agree that that aspect is unjust. Certainly people outside your Lordships' House—the local authority associations, the NFHA, t he NCVO, the Consumer Council—have all come out strongly against it.
The object of this amendment is quite simple. After a vote has taken place, and presumably if a change has been accepted, then the non-voters should be approached, should be visited, the result explained to them, and the implications explained to them so that they can then make their own voice, their own opinion, their own choice heard whether to move to the new landlord or not.
Of course we do not know why people do not vote, but there may be good reasons. They may be in ethnic minorities who do not understand, they may be sick, or they may have been away. There are all sorts of reasons. It is only fair that they in fact should be allowed to have this particular choice, It ties in with what the noble Earl has said many times: that the right of every tenant to stay put will remain.
I do not believe that this is going to be a delaying procedure. It should be quite simple. The applicant or his agent will be able to explain the implications clearly to the tenants who have not voted, and I believe that this will also more or less take away what I call the sting of the injustice imposed on them by the Bill. I believe for strong reasons that this House today should in fact accept this amendment. The opinion that I am expressing is not only held in this House, but right through the country. Everybody I have spoken to outside your Lordships' House agrees with this amendment. I hope that it will be accepted. I beg to move.
Lord Ross of Newport: My Lords, I rise in support of the amendment moved by the noble Lord, Lord Seebohm. We have discussed this issue on a number of occasions. As the noble Lord rightly said, I think that the matter has sunk in more and more both inside the House and certainly outside the House that the current situation set out in the Bill is unsatisfactory. That one person who does not vote

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should be transferred against his will or knowledge, or should find himself transferred, is one too many. Here we are introducing a fall-back situation. It will be left to the regulations to lay it down.
I beg the House to give this serious thought. It is not a just situation at the moment to say that people who, for some reason or another, have not voted on the change of landlord should suddenly find that they are under a totally new regime. We all know many cases where people will suddenly wake up and find out far too late, and that is not right. We ought to have this chance to go back and go round those who have not voted to explain exactly what is at stake. I believe that it is the Minister's birthday, and therefore I suggest that he might give us a reverse birthday present and accept this amendment.
5 p.m.
Lord Boyd-Carpenter: My Lords, as it is the Minister's birthday I should have thought on the contrary that that was a reason for not pressing him too hard on an amendment, particularly, if I may be allowed to say so, if it is a very odd amendment indeed. The concept that a person who abstains from voting when a vote is taken can suddenly say three weeks later that he would like to vote is a novel one.
Noble Lords: No!
Lord Boyd-Carpenter: If it applied at a parliamentary general election, it might have startling consequences. If it had applied in 1974 it might have resulted in a change in the decision of the electorate a week or two later. It seems very odd to complicate the procedure under the Bill by saying that a person who has not bothered to vote, for whatever reason, should suddenly be given a new vote in what I suppose amounts to a second ballot.
The problem surely is that if there is anything in this—personally, I have little sympathy with it, as I have said—it is a principle that may well be extended into other important matters. I hope that your Lordships will think carefully before going on.
Lord Seebohm: My Lords, the noble Lord, Lord Boyd-Carpenter—I am sure unintentionally—is completely misleading the House. There is no question of voting again. It is simply that the choice given to every other tenant to stay put is extended to those who did not vote.
Lord Boyd-Carpenter: My Lords, in other words, having declined to vote the first time, he is effectively being given a second vote. It is no use the noble Lord, Lord Seebohm, trying to run away from it. I thought that he was trying to get some merit out of it. As it is, he is abandoning his own thesis.
Lord Seebohm: That is not so.
Lord McIntosh of Haringey: My Lords, there are two important aspects to the amendment, and the noble Lord, Lord Boyd-Carpenter, has both wrong.
The first is his claim about those who abstain or refrain from voting. As he well knows, there are many
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reasons why people are unable to vote just as there are many reasons why they abstain from voting. I am sure that he is also well aware that those who are unable to vote often have opinions that are just as strong as the opinions of those who are able to vote. Earlier in the Bill we discussed people who may be in hospital or away. The Minister on Report made a useful manuscript addition to the interpretation of the Bill by saying at the very last minute there would be a postal ballot if necessary. We welcome that addition.
The fact remains that there will still be tenants who are unable to vote and who—
Lord Boyd-Carpenter: My Lords, if the noble Lord will study the amendment he will see that it is not restricted to those unable to vote; it deals also with those who do not vote, which is a very much wider category.
Lord McIntosh of Haringey: My Lords, I did not claim that it was restricted to those who were unable to vote. It was the noble Lord himself who claimed that it was restricted to those who refrained from voting. Of course the amendment covers both those who refrain from voting and those who are unable to vote. The noble Lord's strictures on the amendment apply perhaps with some minor force to those who refrain from voting; they certainly do not apply to those who are unable to vote.
The second way in which the noble Lord has the amendment wrong has already been corrected by the noble Lord, Lord Seebohm. This does not affect the ballot in any way. The ballot has taken place and it is closed. If the majority is in favour under the peculiar rules governing how the ballot is to be conducted—and we do not wish to raise that issue again—then the ballot is finished and there is no further effect.
The amendment provides that for those individuals who did not take part in the ballot, for whatever reason, there remains a choice but not for anyone else. They are not affecting the ballot; they are not delaying the decision or affecting the Government's intention in promoting what is called "tenants choice". Not only are they no longer conscripted into the "Yes" lobby—we made that argument and we lost—but they conscript themselves into the transfer, which they may not wish. If the noble Lord is correct and they have refrained from voting because they do not care and are happy but idle, that is fine: they will refrain from taking advantage of the opportunity given to them by the amendment, and no harm is done to the Government or to the democratic practice. The ones genuinely unable to vote—those who at the end of the process may feel that they did not understand the issues before them or the effect on themselves—will not influence the ballot in any way. They will simply have a final right to protect themselves and to opt to stay with the local authority.
This is a modest amendment; indeed, it is an impeccable amendment on Third Reading. It raises options that have not been raised before. It accepts the will of the House as expressed both in Committee

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and on Report. It cannot in any way endanger the Government's intentions, but it provides a valuable and necessary safeguard for a considerable number of individuals—tenants who may otherwise feel that it is not only their voice that has been conscripted but also their home. I hope that the House will support the amendment.
The Earl of Halsbury: My Lords, in supporting my noble friend's Amendment No. 24, I wish to draw a parallel with a situation that arose on the Education Reform Bill when we were faced with a choice after the first decision by a majority of those present and voting being parents. The solution, we found, was to have a second confirmatory vote when a majority of those present and voting as opposed to a majority of all parents carried the day.
All the situations are not identical; they are analogous to one another. We must cater for the fact that the community includes what I call the weaker brethren, people who really do not take in written documents. I do not mean that they are illiterate. But they become puzzled, flustered and frightened at having to take decisions in writing.
It is reasonable that the weaker brethren in this respect shall be given a second chance based not on the written word but on the spoken word after the situation has been explained to them. I think that that is in accordance with the kind of sociological situation that we would wish to see prevailing in the country. If my noble friend cares to divide the House, I shall follow him into the Lobby.
Lord Jenkin of Roding: My Lords, I hope that your Lordships will not be beguiled by some of the arguments in favour of the amendment. I wish to make a brief point that has not yet been argued. It is of course right that efforts should be made to ensure that everyone asked to cast a vote in a matter that is obviously of some importance to them should understand what it is all about. As I understand it, the procedures have been designed to that effect.
In fact, it goes further than that. People will have three weeks in which to decide to record their vote. If somebody who is eligible to vote has not yet done so, I believe that I am right in saying that he would then be called upon by an independent teller to make sure that the voting paper had reached him and that he understood what was happening.
The amendment seems to carry paternalism to the point of absurdity. A tenant who has already been called on and who has been given an explanation but who nevertheless decides not to vote will be given a further opportunity to decide whether he wishes to do so. This is piling Pelion upon Ossa; it is making the procedure so drawn out as effectively to frustrate, or to risk frustrating, the whole exercise.
I happen to regard this provision as one of the most important in the Bill. Four years ago when I was Secretary of State for the Environment, I made a speech to the Institute of Housing in which I questioned whether it made sense for us to be the only country in Europe with enormous local authority housing estates which to a large degree had not been a great success. It is surely right to offer tenants the
426
opportunity to opt out. The Opposition have posed obstacles to prevent this taking place at every stage of the Bill. I hope that the amendment will be thrown out.
Lord Somers: My Lords, I cannot help feeling that that argument is misleading. The choice is not as to on which day we will have a flower show or something like that; it is a highly important choice that will affect not just the tenant but the whole neighbourhood. It is highly important that the Minister should have not just a majority opinion but an accurate opinion of all the tenants before any proceedings are taken.
Baroness Fisher of Rednal: My Lords, the noble Lord, Lord Seebohm, moved the amendment in a manner which was easily understood by us all. What worries me more than anything is the fact that Conservative Members of the House do not realise that we are talking about people's homes. In their view, they may be humble homes, but they are their homes. At present they are terribly worried about what will happen. As the noble Lord from the Cross-Benches said in a rather nice phrase, we should be thinking deeply about our weaker brethren. Let us have a little humanity. Let us have a little of the Christianity that was used in the Education Bill. Let us remember that we are talking about people's homes. They are of the most importance to the majority of the people of whom we are talking this afternoon.
The Earl of Caithness: My Lords, the debate has raised some important issues, most of which we have covered before, but I say to the noble Baroness, Lady Fisher of Rednal, that one thing that we are giving in Part IV, and for the first time, and which must surely be welcomed by many tenants, is the opportunity to choose a new landlord. That is something which has been denied to them for far too long.
These amendments would add a new procedural stage to the tenants' choice process in Part IV. After consultation under Clause 102 had given the applicant the ability to serve a notice of intention to proceed under Clause 103, there would be a new round of consultation, confined to eligible tenants who had abstained in the Clause 102 ballot. My noble friend Lord Boyd-Carpenter was absolutely right to say that they would have another chance, if they wished, to opt to remain a tenant of their existing landlord.
The principle underlying these amendments is not a matter of dispute between the noble Lord, Lord Seebohm, and the Government. Tenants entitled to vote must have every chance to do so. In practice, however, the arrangement here would add nothing to what we have already because it duplicates what will already have happened during the original consultation period under Clause 102.
As I explained on Report, we envisage that tenants will initially have three weeks to return their ballot papers when consultation takes place under Clause 102. We shall consult on this arrangement, which will be set out in regulations. If a tenant who has a vote to cast fails to register it during those three weeks, or

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returns an ineffective ballot paper, the independent teller will call back. His job will be to make inquiries and to help tenants, if they want to do so, to cast an effective vote. This call-back will not be at the option of the applicant, although it will be he who pays for the teller's work. The requirement will be part of a contract which the Housing Corporation intends to require all applicants to enter into with the tellers: this will be a condition of applicants' approval. Nor will it be any part of the independent teller's job to advise tenants on whom he calls back about the merits or otherwise of the applicant's case. He will be there to collect and count the vote; and to ensure that the ballot works smoothly and fairly.
So, by the time that stage in the process has been reached, tenants will have had their chance to vote, together with the information they will need about the process and about the applicant's offer to make sure that their vote can be an informed one. They will have been approached by the teller, if they have initially abstained, who will have checked that their abstention is deliberate and will offer any necessary practical help with casting a vote if it is not. No secure tenant need transfer against his or her will. These effects are the very aims of the noble Lord's amendments and I hope that, in the light of what I have said, he will accept that they are not necessary. The high aims of the noble Lord's amendments are exactly what the Government have in mind.
The noble Earl, Lord Halsbury, drew a parallel with the Education Reform Act. With respect, I beg to differ with him. For one thing, tenants' choice allows individual choice which, I am sure the noble Earl will recall, is not the case with the Education Reform Act. Only a whole school can decide to remain with its local education authority or to transfer. Therefore, a second ballot on the model that we propose is not appropriate.
I should like to say a word more about the information that tenants will need. The conditions of an applicant's approval will oblige them to keep tenants informed about progress with the application as the procedure works through. When the time for formal consultation arrives, tenants will have a contractual offer of new tenancy terms from the applicant. At the same time, but separately, from the independent teller they will have their ballot form accompanied by comprehensive and understandable information about the process, including the consequences of voting either way or of abstaining.
The form of the information that the teller and the applicant provide will take account of any significant foreseeable special needs that the tenants may have; for instance, Braille material or languages other than English. We have again heard suggestions that tenants will be transferred against their will through ignorance or inadvertence. I believe that the arrangements I have outlined for keeping tenants informed and for running the ballot through an independent teller should be successful in avoiding that difficulty in all reasonably foreseeable circumstances.
It is with some irony that I recall that some noble Lords opposite were surprised that we had provided
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for the independent teller in the first place. They were alarmed at the thought of the independent teller being able to call back and check with the person who had abstained. On mature reflection, I believe that noble Lords opposite see distinct advantages in that system. I repeat, what the noble Lord, Lord Seebohm, wants is exactly what the Government want and what the Government have already provided for.
5.15 p.m.
The Earl of Halsbury: My Lords, before the Minister sits down will he please confirm that I never said that the procedure was parallel or identical with the Education Reform Act; I merely said that it was analogous in the sense that people could rethink what they had said.
The Earl of Caithness: My Lords, with respect to the noble Earl, I shall rephrase my words and say that the analogy is not a strict one because this time one has individual choice.
Lord McIntosh of Haringey: My Lords, I was going to rise on the same point before the Minister sat down. Will he confirm that there is a difference between this Bill and the Education Reform Act other than that to which he referred in responding to the noble Earl, Lord Halsbury? The difference is that in the Education Reform Act the ballot does not rely upon those who abstained or who are unable to vote as being counted as in favour of the transfer.
The Earl of Caithness: My Lords, with the leave of the House, that point covers the ground that has been discussed at all stages of the Bill. We are offering indvidual choice for the tenant. We are not allowing tenants to be transferred against their will. We are making every effort during the consultation period, which will be a total of about 13 weeks in all, three weeks of which will be available for the independent teller to return to those who have abstained, to ensure that the tenants fully understand the implications of abstaining.
Lord Ross of Newport: My Lords, has the Minister canvassed any big blocks of flats, for example in the east of London, where time after time knocking on the door brings no response? People will not even open their doors there at night. That is the problem we are facing. Tellers can go back time after time, but very often they will not find a tenant.
The Earl of Caithness: My Lords, now the noble Lord is arguing against what the noble Lord, Lord Seebohm, and the Government want. The Government want exactly what the noble Lord, Lord Seebohm, seeks in his amendment; the only difference is that we have provided for it.
Lord Seebohm: My Lords, I am afraid I am unconvinced by the arguments of the Government. There is a principle here which I still cannot stomach. I propose to divide the House.
5.20 p.m.
On Question, Whether the said amendment (No. 21) shall be agreed to?
Their Lordships divided: Contents, 99; Not-Contents, 109.

DIVISION NO. 1

CONTENTS

Addington, L.

Jeger, B.

Airedale, L.

John-Mackie, L.

Allen of Abbeydale, L.

Kearton, L.

Ardwick, L.

Kilbracken, L.

Attlee, E.

Kilmarnock, L.

Aylestone, L.

Lawrence, L.

Banks, L.

Llewelyn-Davies of Hastoe, B.

Beaumont of Whitley, L.

Lloyd of Hampstead, L.

Birk, B.

Lockwood, B.

Blackstone, B.

Longford, E.

Blease, L.

McIntosh of Haringey, L.

Bonham-Carter, L.

McNair, L.

Bottomley, L.

Milner of Leeds, L.

Broadbridge, L.

Monson, L.

Bruce of Donington, L.

Mulley, L.

Callaghan of Cardiff, L.

Murray of Epping Forest, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Carter, L.

Northfield, L.

Chandos, V.

Ogmore, L.

Cledwyn of Penrhos, L.

Peston, L.

Cocks of Hartcliffe, L.

Pitt of Hampstead, L.

Craigavon, V.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Diamond, L.

Prys-Davies, L.

Donaldson of Kingsbridge, L.

Rea, L.

Dormand of Easington, L.

Reilly, L.

Ennals, L.

Ritchie of Dundee, L.

Ewart-Biggs, B.

Ross of Newport, L.

Falkender, B.

Rugby, L.

Falkland, V.

Sainsbury, L.

Fisher of Rednal, B.

Seebohm, L. [Teller.]

Fitt, L.

Sefton of Garston, L.

Gallacher, L.

Serota, B.

Galpern, L.

Shannon, E.

Gladwyn, L.

Shaughnessy, L.

Graham of Edmonton, L.

Somers, L.

Greenhill of Harrow, L.

Stallard, L.

Gregson, L.

Stedman, B.

Grimond, L.

Stewart of Fulham, L.

Halsbury, E.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Thurlow, L.

Hart of South Lanark, B.

Tordoff, L.

Hooson, L.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Hunter of Newington, L.

Wallace of Coslany, L.

Hylton, L.

Wigoder, L.

Hylton-Foster, B.

Williams of Elvel, L.

Jacques, L.

Willis, L.

Jay, L.

Winterbottom, L.

NOT-CONTENTS

Arran, E.

Cameron of Lochbroom, L.

Auckland, L.

Campbell of Alloway, L.

Bauer, L.

Campbell of Croy, L.

Belhaven and Stenton, L.

Carnegy of Lour, B.

Belstead, L.

Carnock, L.

Blatch, B.

Cathcart, E.

Blyth, L.

Clitheroe, L.

Borthwick, L.

Colville of Culross, V.

Boyd-Carpenter, L.

Constantine of Stanmore, L.

Brabazon of Tara, L.

Cottesloe, L.

Brougham and Vaux, L.

Cranbrook, E.

Broxbourne, L.

Crickhowell, L.

Bruce-Gardyne, L.

Croft, L.

Butterworth, L.

Davidson, V. [Teller.]

Caithness, E.

Denham, L. [Teller]

Camden, M.

Dundee, E.

430

Eden of Winton, L.

Murton of Lindisfarne, L.

Elibank, L.

Napier and Ettrick, L.

Elliott of Morpeth, L.

Nelson, E.

Elton, L.

Newall, L.

Fortescue, E.

Nugent of Guildford, L.

Fraser of Kilmorack, L.

O'Brien of Lothbury, L.

Gainford, L.

Orkney, E.

Gisborough, L.

Orr-Ewing, L.

Grimthorpe, L.

Oxfuird, V.

Haig, E.

Pender, L.

Hailsham of Saint Marylebone, L.

Pennock, L.

Penrhyn, L.

Hardinge of Penshurst, L.

Peyton of Yeovil, L.

Havers, L.

Portland, D.

Hesketh, L.

Rankeillour, L.

Hives, L.

Reay, L.

Home of the Hirsel, L.

Rees, L.

Hood, V.

Reigate, L.

Hooper, B.

Rochdale, V.

Jenkin of Roding, L.

Rodney, L.

Johnston of Rockport, L.

Romney, E.

Joseph, L.

Rootes, L.

Kimball, L.

St. Davids, V.

Lauderdale, E.

St. John of Fawsley, L.

Lewin, L.

Sanderson of Bowden, L.

Long, V.

Skelmersdale, L.

Lucas of Chilworth, L.

Strathclyde, L.

Lurgan, L.

Strathspey, L.

Macleod of Borve, B.

Swinfen, L.

Malmesbury, E.

Thomas of Gwydir, L.

Margadale, L.

Thorneycroft, L.

Marley, L.

Trafford, L.

Merrivale, L.

Trefgarne, L.

Milverton, L.

Ullswater, V.

Monk Bretton, L.

Vaux of Harrowden, L.

Montgomery of Alamein, V.

Waldegrave, E.

Mowbray and Stourton, L.

Wolfson, L.

Moyne, L.

Wynford, L.

Munster, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.29 p.m.
Clause 102 [Consultations by applicant]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 22:
Page 82, line 35, after ("acquisition") insert ("and continued to occupy the dwelling during the period referred to in subsection (1) above").
The noble Lord said: My Lords, with this amendment we return to the issue of who is qualified for the ballot on transfer of local authority estates. I am glad to say that the two sides of the House are moving somewhat closer together on these matters. We, for our part, are agreed that it would be inappropriate for those who move in after the relevant date—that is, the date when the consultation procedures begin—to have a vote. What we are now seeking to secure by this amendment is that those who move out after the relevant date should not have a vote; in other words, that the voting should be by those who are tenants when the consultation procedure starts and who continue to be tenants, who do not move away from the area or exercise the right to buy.
This has implications for the ballot in two senses. In one sense, if those who move out are excluded, it decreases the likelihood of there being people who do not vote, because those who move away are clearly not going to vote. They will not be interested in voting and they may be available to vote. In that sense, since the Government have accepted that there

431
should be a 50 per cent. turn-out in order for the vote to be effective, the process of transfer will be helped by our amendment.
In the other sense, those who do not vote because they have moved away or have exercised their right to buy will be counted in the "yes" lobby, as we have debated throughout the course of the Bill. To that extent the possibility of the transfer will be increased if those who move away or exercise their right to buy are excluded from the ballot.
The political effects work in both directions. Noble Lords must make their own judgments about that. I am not moving the amendment on the basis of its effect on the ballot. I am moving it because it seems to me simple common sense that those who will not be there when the transfer takes place or who are not affected by the transfer because they have exercised their right to buy, should not take part in a ballot with which they are not concerned. The electorate should be those who will be affected by the decision.
The Minister has been good enough, within the last 48 hours, to write two letters to me on this matter. I hope that the effect of those letters will be that he will see the point behind my argument. I commend the amendment to the House. I beg to move.
5.30 p.m.
The Earl of Caithness: My Lords, the noble Lord, Lord McIntosh of Haringey, wants to ensure that qualifying tenants who were in residence on the relevant date do not have a vote on the future of their former homes if they have moved out before the consultation. He also wishes to ensure that those who complete the purchase of their own houses under the right to buy between the relevant date and consultation do not have a vote. I quite agree with his aim, and I am happy to be able to say that the Bill as drafted achieves it almost completely.
I should like to clarify that under Clause 103 only "tenants" are able to vote. The categories of eligible tenants are defined in Clause 102. Under Clause 102(2)(a) the test for entitlement to vote which applies to qualifying tenants is indeed that they must have occupied a dwelling house proposed to be included in the acquisition on the relevant date. But the second part of the test is whether at the time of consultation they remained qualifying tenants (as defined in Clause 93(3) and (4)). To be a qualifying tenant they must still be a secure tenant who satisfies Clause 93(3) and (4).
Because the majority calculation in Clause 103(2) is couched in terms of
"those to whom section 102 applies."
tenants who, before consultation, depart and who are no longer qualifying tenants, or who exclude their house by buying it, are disregarded for the purposes of the collective vote.
On careful consideration, however, it seems to us that one restricted anomaly of the kind that the noble Lord, Lord McIntosh of Haringey, had in mind would perhaps be a possibility. As drafted, Clause 102(2)(a) could arguably result in a person who had moved to a different dwelling owned by the same
432
landlord between the relevant date and consultation having a vote, although the second dwelling did not form part of the property included in the application.
Like the noble Lord, I want to avoid that. His amendment is on the right lines, and I invite your Lordships to accept it. I should enter the caveat that we shall want to look further very carefully at the way the amendment fits with the drafting of Part IV as a whole and that we may want to consider a little fine tuning at a further stage in another place. But any such fine tuning would be technical and practical in nature and would not prejudice the basic principle.
I am grateful to the noble Lord for identifying the need for the amendment.
Lord McIntosh of Haringey: My Lords, I wish to thank the Minister without reserve for what he has just said. I accept that it may be necessary to improve the drafting in another place. I am sure that we shall not object to any of the fine tuning to which the noble Earl referred. I am grateful for the recognition of the validity of the argument we have put and for the kind words the Minister has used in agreeing to the amendment.
On Question, amendment agreed to.
[Amendments Nos. 23 to 26 not moved.]
Clause 104 [Duty to complete and consequences of completion]:
The Earl of Arran The Earl of Arran moved Amendment No. 27:
Page 84, line 9, after ("determined") insert ("and, where appropriate, any determination has been made under section 103(7) above").
The noble Earl said: My Lords, Amendment No. 27 is consequential on the clawback provisions inserted by government Amendments Nos. 175A, 175B, 188A, 193A and 194A on Report. It will ensure that where there is a clawback determination the duty to complete imposed by Clause 104 does not apply until that determination has been carried out. I beg to move.
On Question, amendment agreed to.
Clause 105 [Consent required for subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 28:
Page 85, line 11, at end insert ("but, before giving any such consent, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of the whole or any part of the property proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

On Question, amendment agreed to.
Clause 121 [Rent officers: additional functions relating to housing benefit etc.]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 29:
Page 93, line 5, leave out from ("to") to end of line 6 and insert ("criteria drawn up after consultation with such organisations as appear to the Secretary of State to be concerned").
The noble Lord said: My Lords, this amendment is in exactly the same terms as Amendment No. 128A which I moved at Report stage and which I withdrew. Unfortunately, it is necessary to bring the matter back because of the Minister's statements at Report stage, which I found not unhelpful.
With this amendment we are concerned with Part V of the Bill and housing benefit. Throughout the passage of the Bill we have been concerned with two issues. First, whether housing benefit will be adequate to meet the rents being paid by tenants—in other words, we are concerned that tenants who arc already poor will not become poorer as a result. Secondly, we are concerned that, because the housing benefit scheme is administered through local authorities, local authorities should pay housing benefit in full and not withhold any part of it—again leaving those tenants who are already poor even poorer—and that they should not find that they are not reimbursed by Government in accordance with the conditions of the scheme, with the result that the local authority and its ratepayers or community charge payers end up poorer.
It is common ground between us that the effect of the Bill will be to increase rents. The Government have recognised throughout that when rents are increased those who are in receipt of housing benefit will need to have their benefit increased accordingly. The Government have always recognised—and I pay tribute to them for it—that that will cost a great deal more money. Without having studied the public expenditure statement of 1st November in detail, I have no doubt that further provision is made for that in the estimates.
However, two queries remain, to only one of which we now return at Third Reading. The query to which we return is whether the housing benefit to be paid will be sufficient to cover the rent paid. When I asked the Minister specifically at Report stage whether he could give me an assurance that no one in need of housing benefit would be worse off because housing benefit was being paid at a lower level than the free market rent, he did not say that he could not give me that assurance. He said—and I paraphrase because I do not have the Official Report before me—"I shall have to think about it". He did not make any offer and did not undertake to change his mind, but he said that he would have to consider what had been said.
I am an optimist. I like to think that Ministers can change their minds and see the force of arguments. Indeed, we have just seen an example of that. I am grateful for that whenever it happens. I wanted to give the Minister an opportunity to share his thoughts with the House since he made that statement at Report stage. I should like him to have a chance to say to the House that rents which are free market rents—that was his phrase—or rents in a free market will be recognised for housing benefit purposes, that they will be paid in full under the housing benefit and that (to repeat my phrase) those who are already poor will not be made poorer as a result of this legislation.
If he can share that position with the House I am sure that not only will noble Lords on this side be grateful but the many people who are in receipt of
434
housing benefit and who are worried by the risks for them that are involved in this Bill will be greatly relieved. I beg to move.
The Earl of Caithness: My Lords, let me start by reaffirming once more what has already been emphasised many times in the course of debate in your Lordships' House and in another place and indeed outside Parliament as well: housing benefit will continue to be available to those who genuinely need help with their housing costs. That includes private tenants paying rents up to open market level. Let there be absolutely no doubt at all about the Government's commitment in this respect.
In giving rent officers the new function of scrutinising the rents being paid by private tenants who claim benefit, we are simply seeking to ensure that those rents are not above market level; in other words, that they are no higher than the rents being paid by tenants who are paying out of their own pockets without the aid of benefit. The procedure is there to guard against exploitation of the system. It in no way represents a weakening of the firm commitment we have made on the availability of benefit.
However, we have also made quite clear our view that housing benefit should not be used to allow claimants to live in the sort of housing which the vast majority of people could not reasonably expect to afford. We have therefore said that we will in due course—as soon as the necessary evidence on open market rents is available—impose limits on the housing benefit payable in a case where the claimant is living in accommodation which is at the top end of the market within the area concerned.
Our intention is to give rent officers the task of identifying such upmarket accommodation—against criteria laid down by the Secretary of State—alongside the function of assessing rents in the way that I have already described. The primary purpose of Clause 121(4) is thus to provide for the making of regulations which limit benefit by reference to the determinations which rent officers make. Let me stress that the Secretary of State already has power under the Social Security Act 1986 to place limits on housing benefit. Clause 118(4) merely enables him to impose such limits by reference to the determinations made by rent officers. The provision does not therefore represent any radical new departure.
The amendment moved by the noble Lord, Lord McIntosh, would remove the provision as drafted and substitute a far less specific formula which referred merely to criteria drawn up in consultation with interested organisations. As I made clear when he moved an identical amendment at Report, there will be a full process of consultation before any restrictions on benefit are introduced.
My right honourable friend the Secretary of State for Social Security is in fact under a statutory requirement to consult the local authority associations on any regulations which he proposes to make under the Social Security Act. But we are fully committed to the role of the rent officer in relation to the proposed restrictions on benefit and therefore to

435
the enabling provision contained in Clause 121(4). There is thus no prospect of our accepting the alternative approach reflected in the noble Lord's amendment.
Lord McIntosh of Haringey: My Lords, I made clear that this amendment was tabled in order to give the Minister an opportunity to share his thoughts with the House. I pay tribute to him; he has done so. He has attempted to make clear the situation in which tenants will find themselves and by implication he means, I take it, that local authorities will have the resources to do what he said.
One of his phrases in which I took particular interest was that local authorities should pay housing benefit up to the level of rent which was comparable to rent paid for comparable property by those who are not in receipt of housing benefit. He made the very proper exception, which we have always accepted, that there may be extreme cases—the example has always been that of a penthouse in Mayfair—in which someone on housing benefit is living in property that is quite unsuitable to his or her station in life. That is the way, I suppose, that people in this Chamber would put it.
We accept that at the extreme there could be abuses and even agreement between landlord and tenant to charge a higher rent in order to attract higher housing benefit. We have never disagreed with that argument and have never felt that there should not be procedures to avoid such abuses, though we claim that such procedures exist in the housing benefit procedures that were introduced in April this year and indeed existed in a less effective form in earlier housing benefit legislation. So to some extent the penthouse in Mayfair is something of a red herring and ought not to have the emphasis that it has been given by Government Ministers over recent months.
However, the acceptance that the Minister has just expressed—namely, that the rent should be paid up to the rent officer level or the rent assessment committee where that is appropriate; I take it that he would accept that —is a very valuable one. It helps to ensure that the intention, which we all have, of not penalising those in greatest need—in financial need which makes them in need of housing benefit—should be paramount.
At the end of this discussion let us he clear where we stand. Local authorities will not be able to pay less in housing benefit than the rent officer limit or the rent set by rent assessment committees and local authorities will not be penalised by central government when they use their discretion in ways in which they are legally required to use it; for example, when they pay housing benefit to someone over 60 when there is no alternative accommodation. On the basis that my understanding of the Minister's words confirms those two points—I hope I am right—I have pleasure in begging leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Clause 123 [Amendment of Housing Act 1985]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 30:
Page 94, line 13, at end insert—
("(3) The repeal by this Act of paragraphs 6 and 8 of Schedule 5 shall not affect the operation of either of those pararaphs in any case where the tenant's notice claiming to exercise the right to buy was served before the repeal comes into force unless, at that time, no notice in response had been served under section 124 of the Housing Act 1985 (landlord's notice admitting or denying right to buy).
(4) For the purposes of subsection (3) above, no account shall be taken of any steps taken under section 177 of the Housing Act 1985 (amendment or withdrawal and re-service of notice to correct mistakes).").
The noble Earl said: My Lords, I beg to move Amendment No. 30, which is consequential on the amendments moved by my noble friend Lord Swinfen on Report and which were accepted by the House. The effect of those amendments was to remove the exclusion from the right to buy of certain dwellings constructed or designed for the disabled.
The new subsections (3) and (4) to be added by the amendment now before your Lordships are a transitional provision to provide that the change shall have effect in relation to applications made before commencement where the landlord has not formally responded to the application by admitting or denying the right to buy at that date. Under Clause 141, Clause 123 will come into force two months from the date of Royal Assent. This transitional provision will mean that tenants who have already applied to buy will not have to make a fresh application in order to take advantage of the change in the law, provided the landlord has not formally responded to their application by the date of commencement. I beg to move.
On Question, amendment agreed to.
Lord Carter Lord Carter moved Amendment No. 31:
Page 94, line 13, at end insert—
("(3) After section 157 of the Housing Act 1985 there shall be inserted the following section—
157A.—(1) Where in pursuance of this Part a conveyance or grant is executed by a local authority, a housing association, a Housing Action Trust, a Development Corporation or the Development Board for Rural Wales ("the landlord") of a dwelling house which—

(a) has features which are substantially different from those of ordinary dwelling houses and are designed to make it suitable for occupation by physically disabled persons, and

(b) it has had those features since it was constructed or, where it was provided by means of the conversion of a building, since it was so provided,

the conveyance or grant may contain a covenant limiting the freedom of the tenant (including any successor in title of his and any persons deriving title under him or such a successor) to dispose of the dwelling house in the manner specified below.
(2) The limitation is, subject to subsection (4), that until such time (if any) as may be notified in writing by the landlord to the tenant or a successor in title of his, there will he no relevant disposal which is not an exempted disposal without the written consent of the landlord; but that consent shall not be withheld if the disposal is to a person satisfying the condition stated in subsection (3).
(3) The condition is that the person to whom the disposal is made, or a member of his household is a disabled person within the meaning of section 29(1) of the National Assistance Act 1948 and the dwelling house is considered to be suitable for his requirements.

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(4) If the Secretary of State or, where the landlord is a housing association, the Housing Corporation, consents, the limitation specified in subsection (2) may be replaced by the following limitation, that is to say, that until the end of the period of ten years beginning with the conveyance or grant there will be no relevant disposal which is not an exempted disposal, unless in relation to that or a previous such disposal—

(a) the tenant (or his successor in title or the person deriving title under him or his successor) has offered to reconvey the dwelling house, or as the case may be surrender the lease, to the landlord for such consideration as is mentioned in section 158, and

(b) the landlord has refused the offer or has failed to accept it within one month after it was made;

(c) a disposal in breach of such a convenant as is mentioned in subsection (1) is void.

(5) A disposal in breach of such a covenant as is mentioned in subsection (1) is void.
(6) Where such a covenant imposes the limitation specified in subsection (2), the limitation is a local land charge and the Chief Land Registrar shall enter the appropriate restriction on the register of title as if application thereof had been made under section 58 of the Land Registration Act 1925.
(7) An order under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament." ").

The noble Lord said: My Lords, your Lordships will recall that at Committee stage we accepted an amendment moved by the noble Lord, Lord Swinfen, which extended the right of disabled tenants to buy local authority housing that had been substantially adapted for disabled people or was substantially designed for them. It ended the discrimination against disabled people who had previously been excluded from the right to buy.
The amendment that stands in my name, if passed, would ensure that when the specially designed housing—which we have all agreed is in short supply is sold, it is sold to a disabled person or a person whose household contains a disabled person. Alternatively, it gives the local authority the first option to purchase it at the going market price. The amendment does not impose any restrictions on the disabled person or his family as the house would have to be sold at the market price, thus ensuring that there is no financial loss involved. The amendment ensures that in future specially designed housing will continue to be occupied by disabled people.
We are all agreed that housing designed for disabled people is in short supply and that rented housing represents the only opportunity for many disabled people—the great majority of disabled people—to obtain the accommodation in which they can live with the maximum independence. Perhaps I may remind noble Lords of the figures that I gave at Committee stage. There are some 40,000 houses which have been adapted and specially designed. There is a waiting list of 18,000. In the 1970s the Department of the Environment estimated that there was a requirement for 460,000 houses. Perhaps I may also remind noble Lords that recently the first part of the OPCS survey on disabled people was published. It indicates that the number of disabled people in the community is much greater than was thought. It could well mean that the demand for this housing is even greater than we had formerly considered.
This clause is an attempt to reconcile the equality of opportunity for disabled people—and end the discrimination against them—with the needs of disabled people and their families who will be seeking housing in the future. In doing so it adopts the same approach used for housing in national parks and in rural areas. Indeed, in agriculture we are familiar with a restriction on farm housing which limits it to agricultural use. Tenants will be able to buy their homes. However, when they or their heirs decide to sell it, they will either have to sell it to a disabled person or to a person whose household contains a disabled person, or give the local authority the first option to purchase it at the going market price. The local authority can waive the condition. Indeed it does not have to impose it in the first place. The local authority would also have to make its decision extremely quickly on whether it should exercise its option to repurchase. The proposal does not appear to impose onerous restrictions on existing tenants or their families. It increases the possibility that in future the houses concerned will continue to be used by disabled people.
To turn briefly to the technicalities of the amendment, the effect is to insert two clauses of restrictive covenant into the disposal or properties which are built for the disabled which have been acquired under the right to buy. The restrictions apply only to dwellings which have had special features incorporated into them when they were built or converted. They do not apply to dwellings which were adapted after they were built.
The first class of restrictive covenant which the landlord may insert without the consent of the Secretary of State is a prohibition on disposal without the consent of the landlord. The second class of restrictive covenant may be inserted only with the consent of the Secretary of State or Housing Corporation. These covenants can be included only in place of, and not in addition to, the restrictive covenants which I have already mentioned. They consist of pre-emption clauses lasting for a period of 10 years from the date of conveyance or grant.
Neither class of covenant can be applied to exempted disposals. These are disposals which include situations where one joint purchaser decides to sell to another joint purchaser, or the owner disposes of the dwelling—by inheritance, for example—to a spouse or former spouse, or where a member of the family who has been living with the owner for a period of at least a year before the disposal, inherits the property.
The restrictive covenants are analogous to those which currently operate in the national parks and areas of outstanding natural beauty. The amendment represents a reasonable compromise solution to a very difficult problem and attempts to balance the rights of the disabled against the perceived need of the increase in supply of adapted housing to rent. I beg to move.
Lord Swinfen: My Lords, I understand the desire of the noble Lord, Lord Carter, to ensure that there is a sufficient supply of suitable accommodation for physically disabled people. However, this is not the

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route through which one should achieve this objective. The real route is, as I have said before in your Lordships' House, to amend the building regulations so that far more newly buillt accommodation is suitable, and easily made even more suitable by the simple addition of the necessary handgrips, and so on.
My amendment at both Committee and Report stages was designed to remove discrimination from physically disabled people and to put them in the same position as able-bodied people. Your Lordships were good enough to accept that amendment. I am afraid that the amendment of the noble Lord, Lord Carter, which we are now discussing, reverses that position. After the relevant period, which I believe is three years, an able-bodied purchaser can sell the dwelling that he has bought to anyone on the open market. Restricting the term to 10 years adds a possibly onerous burden on people who buy this accommodaton who have a disabled member in their family. By adding the right of pre-emption, they are restricting the market to one: that is, the housing authority from whom the property was bought in the first place. That is certainly not an equal position with able-bodied people.
The noble Lord said that this applied to specially built accommodation. I gave examples at Committee stage, and others at Report stage, where local housing authorities have sold accommodation to able-bodied people but where exactly similar accommodation has been occupied by a disabled family they have used certain identical features as grounds for refusing the sale. This would continue. Housing authorities would be able to say that certain features—such as wide doors, wide corridors, low kitchen units—were special features which are now being included in all purpose-built, modern property built with Housing Corporation funds. The height of kitchen units sometimes can be higher to suit particularly tall women, or men who like to cook for their wives.
This amendment is a retrograde step. If the noble Lord takes it to a division, I should not be able to go with him into the Lobby; I should have to go into the opposing Lobby.
Baroness Masham of Ilton: My Lords, the noble Lord, Lord Carter, is usually a great friend of disabled people. In this matter he would not be a friend. This amendment is discriminatory and complicated. Disabled people are against all types of discrimination, however big or small. I should like to take this opportunity to say that I hope more suitable housing for disabled people will be built by corporations, local authorities and all people building houses throughout the country. A house suitable for a disabled person can be used by any family.
6 p.m.
Lord McIntosh of Haringey: My Lords, although I fully appreciate the sincerity behind the last two speeches, and the feelings which give rise to them, I fear that they do not represent the situation. The
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noble Lord, Lord Swinfen, talked as though this amendment would reverse the decision taken by the House last week. I do not see that that can be the case.
Lord Swinfen: My Lords, the noble Lord will forgive me. I did not say that it would reverse the decision, but that it was a retrograde step.
Lord McIntosh of Haringey: I stand corrected, my Lords. When the noble Lord refers to the need for amendment of building regulations one can readily agree with him. When the noble Baroness, Lady Masham, refers to the need for more suitable housing for disabled people, one can only agree with her. But surely we should be seeking to find more suitable housing for disabled people from whatever source and we should be adding the best possible number of houses suitable for disabled people to the existing houses available for the disabled. Additions to the stock of housing suitable for the disabled are, by definition, only at the margin. If we produce even 10 per cent. of the stock in any one year, it will take 10 years to make up the stock. It is more likely that we shall be producing 1 per cent. of what is required rather than 10 per cent., although I do not know the figures.
The noble Lord, Lord Swinfen, spoke as if, because there is only one purchaser, this was discrimination against the disabled. There are two purchasers proposed in the amendment: one is another disabled person and the second is a local authority. The amendment makes it very clear that the local authority will have to pay the market price, so that there is no financial discrimination whatsoever against disabled people as a result of this. The payment of the market price by somebody under pre-emption rights is a well established principle in housing legislation. It has not caused any great difficulty in other areas and there is no reason why it should cause difficulty now.
Behind all this I must return to the fundamental point which we have to consider. There is not a single interest of all disabled people. There are disabled people with different needs and different interests. We have to consider them all. Last week your Lordships took the decision to pay scrupulous attention to those disabled people who are living in council housing and who wish to exercise the right to buy. So be it. The amendment does not seek to reverse that decision in any way, but it looks to another group of disabled people, a very much larger group of the disabled, who are in need of suitable housing but who are unable to find it because it is in too short a supply for them to reach the top of the council waiting list. Without in any way damaging the interests of the first group, the amendment seeks to protect the interests of the second group by not putting to waste—because specially adapted houses go to waste if they are not used by the people for whom they are adapted—the significant part of the housing stock which has been subject to the right to buy.
I cannot see how there is any serious loss to the rights of disabled people and it seems to me that a very large and important group, those disabled people who are living in unsuitable accommodation because they cannot find adapted housing, will be

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helped by the amendment. I hope that noble Lords, on whichever side they voted last week, will feel able to support the amendment moved by my noble friend.
Lord Boyd-Carpenter: My Lords, the amendment moved by the noble Lord, Lord Carter, is obviously well intentioned. It is put forward against the dilemma which has confronted all your Lordships at earlier stages of the Bill when the discussion took place on the ability of disabled people to have equal rights with able-bodied people over the purchase of their homes. There is a real dilemma. Either one discriminates in one way or another against the disabled or one risks reducing the stock of suitable accommodation for other disabled people. There is no avoiding that dilemma, although I believe the amendment is intended to seek to find a way of so doing.
I am afraid I must agree with my noble friend Lord Swinfen that the effect of the amendment, however well intentioned, is to restore a degree of discrimination against the disabled which the House decided at the earlier stage should not be allowed to continue. In particular, there is the point which my noble friend has already mentioned, that disposal cannot be after the three-year provision, under which an ordinary purchase can be passed on, but a 10-year period is inserted.
Secondly, I should like to put to the noble Lord, Lord McIntosh, the difficulty which one faces in the argument that a disabled person can dispose of a house at market price. What is "market price" in these circumstances? Let us suppose there are two houses, one of which can be disposed of entirely freely without limitation or restriction after three years, but the other house can only be disposed of to a limited category of people, either another disabled person or the local authority. Surely in any ordinary sense of the term the market price of the house subject to that limitation is a good deal lower than that of the house which can be freely disposed of to any purchaser. Anyone who has studied the housing market, or any other market, can have no doubts about that.
Therefore, if your Lordships accept the amendment, though the disabled will be able to purchase their homes, they or their successors will not be able ultimately to dispose of the home at the same price to those who are not disabled. That seems to me to go against the decision which, after a good deal of agonising, we made. Many of us were very worried about which way the earlier decision should go. One is forced to the conclusion, however well intentioned, that the noble Lord's amendment quite substantially goes back on the decision that the disabled should not be discriminated against. It introduces some discrimination but not anything like as much as there used to be. For that reason I am against the amendment.
Lord Tordoff: My Lords, although it is probably true to say that the amendment is flawed, I do not think it is flawed for the reasons that the noble Lord, Lord Boyd-Carpenter, has adduced. It seems to me
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that it is possible for a local authority to repurchase a house at a market price. There are many mechanisms for doing that. District valuers can produce figures which are perfectly equitable so that somebody disposing of a house in such admittedly restricted situations may still he able to obtain the price that they would have obtained if the house were on the open market. It is no good the noble Lord shaking his head because it is perfectly possible to do that.
Lord Boyd-Carpenter: My Lords, I put it to the noble Lord that a house which can be disposed of to anybody must receive a higher market price than a house that can only be disposed of, albeit otherwise a similar house, to a limited category of people. In other words, the phrase "market price" has no meaning whatsoever.
Lord Tordoff: My Lords, the fact is that where compulsory purchase is carried out by local authorities this is a perfectly normal situation. It is possible to achieve a market price in these circumstances.
I think the amendment may be flawed. It is a very complex amendment and is difficult to draft suitably, but we must try to bear on this enormous problem with which we are faced in the dilemma to which the noble Lord, Lord Boyd-Carpenter, has rightly referred. We were forced to choose the other night—I have to say that I voted against the noble Lord. Lord Swinfen, and advised my colleagues to do the same—not because we wished to discriminate against the disabled, very far from it, but because the danger of going down that road was that adapted housing would disappear from local authorities.
How local authorities can be expected to adapt housing which they know will disappear from their stock on a regular basis is beyond me. This is a mechanism whereby the local authorities can retain adapted housing within their stock. Therefore, without discriminating against the right of disabled people to buy council houses and resell them, this mechanism allows them to retain that right and the local authority to maintain a stock.
I am not sure that this is the right way of achieving it but I hope that the Government will understand that this is a possible mechanism for getting us out of that dilemma. In that sense I support the principle of the amendment.
Lord Trafford: My Lords, when debating a similar amendment last week I did not agree on the grounds that we would reduce the adapted housing stock and discriminate against those who did not have housing for the disabled.
I understand why the Front Bench opposite has suddenly jumped on the bandwagon of the amendment. It is because they would like to give back the housing stock to local authorities after it has been used by the disabled person who bought it. That will increase the stock of available housing for the disabled, for those who have become disabled in the meantime or who are on the waiting list.

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I appreciate and understand that, but two issues make me feel differently about this amendment. However one looks at the matter, it is a form of discrimination. It limits the right of sale for the disabled person. Last week we took a clear decision with which I then did not agree. This House took the decision not to discriminate against the disabled in this respect and I believe that the matter should have been left there. The amendment is too complicated and it partially discriminates.
I accept what was said by my noble friend Lord Boyd-Carpenter. It is extremely difficult to create a market price when there is no market. If one has thousands of people to whom one can sell a product one automatically has a price mechanism and market. I shall not go further than to say that it is more difficult. There are mechanisms. However, I do not like the example used by the noble Lord of the compulsory purchase order. My experience of those whose property has been compulsorily purchased is that they think they have been done. I do not believe that it is the equivalent of a market price.
I fully understand and in many ways sympathise with the intentions behind the noble Lord's amendment. However, I do not believe that it is the right way forward and I regret that I must oppose the amendment.
The Earl of Lytton: My Lords, I hesitate to step into the debate but there has been a great deal of discussion about market price and other matters concerned with property valuation. I thoroughly endorse the comments made by the noble Lord, Lord Boyd-Carpenter, and I should like to go one step further. If we are talking about a property with a fairly, high cost input and one which has an open market value restricted as it must be by straight-forward interpretation of the legal parameters on the one hand and the extent of the market place on the other, that will produce a conflict and an unnecessary complication. It is outside the present processes of valuation for such a purpose, as I understand it. I see great difficulties arising.
The proposal put forward by the noble Lord, Lord Carter, sets out to impose by statute a restriction which I believe is already covered to a large extent in the planning occupancy restrictions already imposed by local planning authorities. He cited the example of agricultural dwelling houses. From that point of view it is unnecessary, particularly as it would take outside the orbit of local control and local decision-making process the future of such premises, which may change over a period of time. The perception of the property may alter because of town centre redevelopment or because of whatever may happen during the passage of time.
Lord Carter: My Lords, will the noble Earl give way? He cited the analogy that I drew with agricultural property. Is he saying that he will be happy if all housing which is specially designed or adapted for disabled people has the planning restriction that we have in agriculture and that it can be occupied only by disabled people? If that were the case I should be extremely happy to accept it.
6.15 p.m.
The Earl of Lytton: My Lords, that is an issue which must be dealt with by the local planning authority. If in its wisdom it gives consent for property for a specific purpose it is up to the authority to enforce that. We have a well-established procedure in planning law for dealing with that. It is not for me to say that all properties which are adapted or constructed for disabled persons should be subject to that restriction, any more than I am saying that every property built in the open countryside should be subject to an agricultural restriction. I made no further comment but I point out that the mechanism exists.
The loss of the stock of houses to disabled people has been raised. I fail to understand why it is that when a disabled person purchases a house or flat from the council and remains living in it, it somehow ceases at a stroke to be a property which is adapted for use and beneficial occupation by disabled persons. Clearly it is not. It remains in the occupation of that person—
Lord Tordoff: My Lords, will the noble Earl give way? The point is not the present occupancy but the next generation of occupancy. When the disabled person dies or moves on the property then moves out of the occupancy of a disabled person to a second generation of the family, or right outside.
The Earl of Lytton: My Lords, the noble Lord is quite correct. However, that causes speculation as to the time-scale over which the first purchaser will remain in beneficial occupation. That may be a matter of 10, 20 or 30 years, or it may be a relatively short time. We are dealing with a small market place, a point already touched on by the noble Lord, Lord Boyd-Carpenter. We have a net deficit of suitable properties available for disabled people. The noble Lord, Lord Swinfen, touched on that issue. I support him in his assertion that we need more such properties and that that is the real solution to the problem.
The degree of adaption of such properties that I have experienced—I shall not say that it is great—is not such as to make the building a wholly different type. It still has 8-feet high ceilings and 11-inch cavity walls. I believe that the degree of adaptation that is found in practice is not tremendous except in respect of a building which is constructed for institutional purposes. Therefore it is occupied on a different basis from a property which is occupied by a disabled tenant of a local authority.
I am afraid that I cannot support the amendment put forward by the noble Lord, Lord Carter. However, I echo what has been said by other noble Lords in that I recognise that his motives are well-intentioned.
The Earl of Caithness: My Lords, I understand the concern expressed by the noble Lords, Lord McIntosh and Lord Tordoff, who have spoken in support of the amendment. Having decided that tenants of housing particularly suited for the disabled should no longer be excluded from the right to buy,

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it would he unfortunate to fetter the freedom which those who have purchased can reasonably expect to enjoy and to dispose of the dwellings as they wish.
The amendment tabled by the noble Lord, Lord Carter, would involve a large amount of bureaucracy, difficulty and confusion for those who wish to buy housing specially suitable for the disabled. As my noble friend Lord Swinfen and the noble Earl. Lord Lytton, said, there will firstly be arguments over what features make a dwelling house "substantially different", which would be the test for deciding which dwellings could be sold subject to conditions. My noble friend Lord Swinfen and my noble kinswoman Lady Masham have described eloquently at earlier stages of the Bill the disputes which have arisen on this point in determining which dwellings are excluded from the right to buy. This amendment would perpetuate that.
Once that point had been settled, the local authority would be able to impose a condition on sale that the dwelling could not be resold without its consent. The amendment provides that consent may not be refused if the sale is to a person who is disabled and for whose needs the dwelling is considered suitable. Alternatively, the purchaser might have such a disabled person as a member of the household.
The amendment would allow the landlord to reserve a requirement for his consent to resale. Consent could be refused unless a prospective purchaser was a disabled person or intended to share the house with a disabled person. What would happen if there was no such buyer in the market for the house in the area in question? Households with a disabled member which had bought their homes would find that, when they wanted to move, they either had to find a family with a disabled member to buy it, or go cap in hand to the former landlord for permission to sell to someone else. If there did not happen to be a qualifying purchaser in the market, and the former landlord said "No" to any other prospective buyer, they would be stuck in accommodation which perhaps no longer met the needs of the disabled person.
The amendment also provides that consent could be refused unless the house was considered suitable for the requirements of the new disabled person. Who would be the judge of that? One can readily foresee the disputes which would arise. My noble kinswoman Lady Masham suggested forcefully on Report that the exclusions which your Lordships agreed should be repealed were disciminatory. The arrangements proposed in the amendment would, in my view, be much worse.
The noble Viscount, Lord Ingleby, raised a particular point with me in correspondence about the application of Section 3 of the Chronically Sick and Disabled Persons Act 1970 to housing action trusts. Perhaps this is the opportunity to deal briefly with that point, as we are talking about disabled people. Your Lordships will recall that on Report we introduced an amendment empowering the Secretary of State to apply Section 3 by order. I assure your Lordships that I expect that in all but the most exceptional circumstances my right honourable friend would propose to apply Section 3 in this way.
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The thought which motivated your Lordships' House in deciding to repeal the current exclusions from the right to buy of dwellings for the disabled was the unfairness in not giving those households with a disabled member the right to buy. If it is right, as your Lordships decided, to give them the right to buy as with other tenants, it is surely consistent to give them that right without the unnecessary complications.
Lord Carter: My Lords, I am grateful to all your Lordships who have spoken in this debate. Not everyone who has spoken seems to have completely understood the amendment on the Marshalled List. The points about the district valuer, the market price and the difficulty in obtaining the market price are answered every day by district valuers. I have already been involved professionally in the valuation of a farm tenancy which is owned by a company. There is no buyer or seller but there has to be a valuation for taxation purposes. Planning law on the matter is clear. One assumes a willing buyer and a willing seller. That is how the problem is solved. It happens every day with district valuers in all sorts of capacities.
The idea that one cannot find a market price is not true. The point which the Minister made—and he has been involved professionally in these cases—that it is a restricted market and therefore a price cannot be reached is just not true. The district valuer would be able to fix a price on the basis of a willing buyer and a willing seller.
Lord Jenkin of Roding: My Lords, will the noble Lord give way? I apologise for intervening. If a valuer is seeking to put a value on a property which is itself subject to a continuing restriction, is the noble Lord saying that the valuer will leave that factor out of account when he puts a value on the property? Of course he will not. It is bound to depress the value, and that is the basis of the arguments of a number of noble Lords.
Lord Carter: My Lords, the continuing restriction is that the local authority is buying it back at the going market price to let it to a disabled person. That is the point. The district valuer has to fix a fair price on the basis of a willing buyer and a willing seller; so that can be done.
The Earl of Lytton: My Lords, perhaps the noble Lord will give way. That presupposes that the disabled person, if he is able to sell at a valuation determined by the district valuer at the time when that date comes, has purchased the house at a similarly discounted value in the first place. I was trying to make the point that that leaves us with expensively adapted properties which are being sold at a depressed value subject to that restriction. Can the noble Lord answer that point?
Lord Carter: My Lords, I am not sure that the noble Lord has understood the amendment at all. That is not the case. The amendment makes it extremely clear how the system will work, and I do not propose to repeat it.
Lord Stoddart of Swindon: My Lords, perhaps my noble friend will give way. Although I do not support the noble Lord's amendment, is not the answer in relation to that particular point on valuation that all local authority houses which are sold are valued on the basis which he has just put forward?
Lord Carter: My Lords, I am grateful to my noble friend. I apologise that this is turning into an argument about valuations and not about disabled people. My amendment as tabled was supported by the Royal Association for Disability and Rehabilitation, RADAR. That should be made clear. I do not wish to detain your Lordships. I do not intend to press the amendment to a vote. However, I should say to the noble Lord, Lord Trafford, that to accuse my noble friends on the Front Bench of jumping on the bandwagon was, to say the least, unworthy.
I repeat that there is a waiting list of 18,000 people who wish to rent these adapted houses. This amendment tries to deal with the problem of the restriction of supply. We have already had similar examples with the national parks and areas of outstanding natural beauty and in rural housing. I hope that in future when those who oppose this amendment see a specially designed house which is not being occupied by a disabled person, they will hear in mind their opposition to this amendment which has brought about that situation.
I do not wish to go on. The Minister said that the dwelling will he sold as the owner wishes. That means that the supply of disabled houses to rent will be reduced if the owner is able to sell to whomever he wishes. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 133 [Consent required for certain subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 32:
Page 104, line 45, at end insert—
("(4A) Before giving any consent required by virtue of this section, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any land or house proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

On Question, amendment agreed to.
Clause 134 [Consent required for certain subsequent disposals: Scotland]:
The Minister of State, Scottish Office (Lord Sanderson of Bowden)The Minister of State, Scottish Office (Lord Sanderson of Bowden) moved Amendment No. 33:
Page 106, line 5, at end insert—
("( ) Before giving any consent for the purposes of subsection (1) above, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any land or house proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

The noble Lord said: My Lords, in moving Amendment No. 33 I wish to speak also to
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Amendment No. 55. I believe that these amendments will be welcomed by this House and by local authority tenants in Scotland.
The amendments relate to the Scottish provisions on first subsequent disposals. Amendment No. 55 applies where a house was transferred to a private sector landlord under the tenants' choice provisions in Part III of the Housing (Scotland) Act 1988. Amendment No. 33 applies where property was transferred voluntarily by a local authority, with the approval of the Secretary of State under the powers in Section 12 of the Housing (Scotland) Act 1987 as clarified by Clause 132 of this Bill. The effect of these amendments will be that tenants will have to be consulted by their new landlord before he seeks approval to dispose of the property. Where tenants express views, the Secretary of State, or Scottish Homes as appropriate, will require to take these into account before giving consent to the proposed further transfer.
We are therefore building into the procedures for both tenants' choice and voluntary disposals a second safeguard for tenants. As noble Lords know, no tenants' choice initial transfers in Scotland can take place without the individual tenant's agreement; and we have already introduced into this Bill, at Clause 135, a requirement that tenants be consulted fully before any voluntary disposal takes place. By bringing forward these amendments today, we are ensuring that tenants will be consulted also if and when the new landlord wishes to seek approval in some way to dispose of the property.
These amendments will ensure that there will be no reason for doubt on how landlords should discharge their responsibilities to their tenants. The House has already considered and agreed similar amendments under which tenants will require to be consulted before first subsequent disposals in England and Wales. I believe the House wishes to see this further strengthening of tenants' rights also for Scotland. I therefore commend these amendments to the House. I beg to move.
6.30 p.m.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for these amendments and I thank him also for giving me some background notes. There is no doubt that he has gone some way towards what we were suggesting in earlier stages of the Bill, and for that everyone will he happy.
Clearly the tenant will nevertheless lose what was originally a secure assured tenancy, but in the circumstances and knowing the Government's general thrust in the Bill I must be grateful to the Minister for what he has conceded.
On Question, amendment agreed to.
Schedule 1 [Tenancies which cannot be assured tenancies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 34:
Page 111, line 22, leave out from ("association") to ("or") in line 23.
On Question, amendment agreed to.
Schedule 2 [Grounds for possession of dwelling-houses let on assured tenancies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 35:
Page 116, line 11, at end insert ("and
(c) the assured tenancy on which the dwelling-house is let did not come into being by virtue of any provision of Schedule 1 to the Rent Act 1977, as amended by Part I of Schedule 4 to this Act or, as the case may be, section 4 of the Rent (Agriculture) Act 1976, as amended by Part II of that Schedule.").
The noble Earl said: My Lords, this amendment arises from a point raised on Report by the noble Lord, Lord McIntosh of Haringey. It is of course our intention that the development ground for possession should not be used where the landlord purchases the property with a sitting tenant. It will apply only in respect of tenancies granted subsequent to the purchase.
However, the successor to a Rent Act tenant could be granted a new-style assured tenancy which would be a new tenancy but springs from an existing Rent Act tenancy. It would not be right for the landlord to be able to avail himself of this ground in such a case, and this amendment makes clear that he will not be able to do so. I am grateful to the noble Lord, Lord McIntosh, for drawing this point to my attention and I hope that as a result he will welcome the amendment. I beg to move.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for introducing this amendment and for the terms in which he introduced it. When we put forward this point our intention was that all assured tenants who are sitting tenants at the time the developer buys the property should be covered. I think and hope that that is what this amendment means, but before I shout "Content" I should he grateful if the Minister would confirm that.
The Earl of Caithness: My Lords, I do not think the amendment means exactly what the noble Lord, Lord McIntosh, asked me to confirm. Perhaps he would be good enough to read what I said in the Official Report. I realise that this is the last stage of the Bill in this House and it therefore makes it more difficult for him to do so. The amendment covers the main point that he made earlier but I do not think it goes as far as he has now asked me to go.
On Question, amendment agreed to.
[Amendments Nos. 36 to 42 not moved.]
Schedule 4 [Statutory tenants: succession]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 43:
Page 122, line 38, after ("years") insert ("or I year in the case of a person who has been making a substantial contribution in money or money's worth towards the reasonable needs of the tenant").
The noble Lord said: My Lords, I hope the noble Lord, Lord Boyd-Carpenter, will agree that this is an appropriate amendment for Third Reading. Although we are returning to the issue of the succession rights of carers we are doing so in what I believe is a preferable way to our approach in earlier stages.
Noble Lords who were present will recall that we suggested there should be a shorter period of time in which relatives who are looking after tenants need he resident, performing their caring functions, before they are protected in the right of succession to the tenancy. It was pointed out to us that many of these relatives who move in might not be carers and that it might be a way of ensuring a succession which was contrary to the Government's intentions in the Bill, thus frustrating the free market mechanisms which the Government wish to achieve, because the definition of carers was too vague.
We come back with a definition from the Inheritance (Provisions of Family and Dependants) Act 1975, which is someone making a substantial contribution in money or money's worth. I understand that the phrase "money's worth" means care towards the reasonable needs of the tenant. I hope that will overcome this major and reasonable objection to the amendments we put forward earlier.
We are now saying that a genuine carer—a relative who moves in with the tenant, looks after the tenant, helps financially or with the caring—has to be in that position for only one year before he or she has the right to the succession. It is a limited provision and these will not be millions of cases, but it is of deep concern to those who happen to be affected in that way. After all, there are many council tenants who need the support of their children in their declining years to enable them to stay at home rather than go into institutions. I suggest that the amendment is therefore very much in line with government thinking about care in the community.
We are proposing a modest change which will help care in the community and perhaps stop unnecessary and undesirable commitment to institutions, particularly of older people. We all agree that aim is desirable. I hope we have found a way of achieving it by framing these amendments. I beg to move.
The Earl of Caithness: My Lords, alas, the noble Lord has not, and for this reason. The amendment as drafted does not cover just those people the noble Lord wanted to cover—the carers he so eloquently described. Unfortunately, it also covers any qualifying family member who moves in with the tenant and makes a contribution to his or her living expenses. Indeed, the amendment goes so wide as to cover cases where the tenant is hale, young and healthy, as well as cases where the tenant is infirm and in need of attention. Although I appreciate what the noble Lord is seeking to do for carers, the amendments go very much wider and include many other cases.
Lord McIntosh of Haringey: My Lords, I am bound to yield to the greater knowledge of the Minister's parliamentary draftsmen. I am sorry that we have failed in our objectives. However, since the Minister appeared to rely on our drafting failure in his opposition to the amendment perhaps we can persuade him to draft a better amendment for consideration in another place.
The Earl of Caithness: My Lords, with the leave of the House, I do not think it is within my remit to

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suggest what the other place should do. It is strictly controlled on consideration of amendments by this House and it could be difficult for the other place to add to the Bill.
I reassure the House that we are of course concerned with provision for carers. As the noble Lord, Lord McIntosh, rightly said, it fits in with our wider policy of care in the community.
Lord McIntosh of Haringey: My Lords, I understand that the Minister cannot intervene in the procedures of another place. However, he is the Minister for Housing and he may have a political influence even if he does not have a direct legislative influence.
May I make a further suggestion? Why does not the Minister accept these amendments and improve the drafting in another place? Well, your Lordships cannot blame me for trying. However, the drafting is defective. I apologise, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 44 to 46 not moved.]
Schedule 5 [Housing for Wales]:
The Earl of Arran The Earl of Arran moved Amendment No. 47:
Page 125, line 12, leave out ("officer") and insert ("executive").
The noble Earl said: My Lords, this amendment is a very minor amendment indeed. It has been tabled to ensure consistency in the references to the chief executive of Housing for Wales in Schedule 5 to the Bill. I beg to move.
Lord McIntosh of Haringey: My Lords, I am deeply suspicious of anything that is called "a very minor amendment indeed".
On Question, amendment agreed to.
Schedule 6 [Amendments of Housing Associations Act I985]:
Lord Carter Lord Carter moved Amendment No. 48:
Page 137, line 53, at end insert—
(" In Schedule 6. paragraph 3(3)(b) shall be omitted.").
The noble Lord said: My Lords, I can assure your Lordships that this amendment will not take as long to deal with as my last amendment. It is an amendment that I know the Government will be able to accept. It is to remove from Schedule 6 to the Housing Associations Act 1985 the disqualification for membership if a member is incapacitated by physical or mental illness. This is a clause we have had removed from the education and the housing Bills. In fact it was the Government that earlier in this Bill moved the amendment to remove the provision from the Housing for Wales constitution. In that light I am sure that the Government will be able to accept the amendment. I beg to move.
The Earl of Arran: My Lords, the noble Lord, Lord Carter, is a little pre-emptive on this matter and he has some reason to be so. Noble Lords will recall that
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at Report stage my noble friend Lord Trefgarne moved an amendment to meet the concern expressed by the noble Lord, Lord Carter, in Committee about the Secretary of State's proposed power to remove members of Housing for Wales and housing action trusts from office on the grounds of physical or mental incapacity. Having now had the opportunity to consider the effect of applying a similar amendment to the constitution of the Housing Corporation we are happy to commend it to your Lordships.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether this measure includes Scotland, too? England and Wales have been mentioned and, being a Scot, I just wondered whether Scotland was included.
The Earl of Arran: My Lords, certainly Wales has been mentioned because I referred to the Principality. We are not absolutely certain whether Scotland is included. I understand that we may bring this matter forward as a Commons amendment.
On Question, amendment agreed to.
Schedule 7 [Housing action trusts: constitution]:
The Earl of Arran The Earl of Arran moved Amendment No. 49:
Page 138, line 45, at end insert—
(" and with that approval the Secretary of State may undertake to meet any liabilities arising in respect of such pensions, allowances or gratuities after the dissolution of the trust").
On Question, amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendment No. 50:
Page 139, line 21, at end insert—
("and with the approval of the Treasury the Secretary of State may undertake to meet any liabilities arising in respect of such pensions, allowances or gratuities after the dissolution of the trust").
On Question, amendment agreed to.
6.45 p.m.
Schedule 13 [Amendments of Landlord and Tenant Act I987]:
Lord Coleraine Lord Coleraine moved Amendment No. 51:
Page 164. line 40, leave out paragraph 5 and insert—
("5 In Part IV of that Act (variation of leases), in section 35 omit subsections (6) and (7)").
The noble Lord said: My Lords, in moving this amendment I speak also to Amendment No. 52, which is a fall-back, second-best amendment to my first amendment, and cannot be moved if the first amendment is accepted.
Schedule 13 to the Housing Bill, as your Lordships will know, amends the Landlord and Tenant Act 1987 in a number of ways. That Act enacted some of the recommendations of the Nugee Committee report on the Management of Privately Owned Blocks of Flats. My amendment relates only to those parts of the Landlord and Tenant Act that deal with variation of defective leases. Schedule 13 to the Bill was inserted by an amendment moved by my noble friend the Minister at Report. It came as the result of

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pressure from the Law Society and also followed an amendment that I had moved at Committee but withdrew when I learned that my noble friend intended himself to legislate.
While I welcomed the schedule at Report I expressed reservations and some concern about the matters dealt with in these two amendments. I have had a letter today from my noble friend dealing with the points that I made at Report and, while I accept that his points are good, I consider that the points I have to make are better.
I believe that I can best explain these amendments by asking your Lordships to envisage a block of eight flats, all let on long leases. Flat 1 is a normal residential flat. Flat 2 is also a normal residential flat, but it contains computer terminals at which the lessee sits and runs his business. Flats 3, 4 and 5 are let by one long lease to one lessee. Flat 3 is lived in by the lessee; flat 4 by his mother and flat 5 may be sub-let on another long lease or it may be let to an American company for six months.
Flats 6, 7 and 8 were originally let by three separate long leases, but these leases are now owned by one person. I do not feel that I need to detail what subleases may derive from them. On the street floor, also belonging to the freeholder, are a tobacconist's shop and a hairdresser's. These premises were let on long leases but I am glad to be able to say that, because they are not flats as defined in the Act, their leases fall together outside the Act, and neither of my amendments will apply to them.
The freeholder manages and repairs the building and the various leases make provision enabling him to recoup his expenses from the leases. The leases are in a standard form, but the percentages of expense incurred by the landlord and recoverable under the leases add up not to 100 per cent. of the total expense incurred, but to 120 per cent. of the total expense. Section 35(4) of the Act deals exactly with this situation and provides that such leases are defective for the purposes of the Act and may be subject to an application for variation by the tenants. Unfortunately, in my opinion on a lessee's application to vary these leases, and if Schedule 13 is not amended, the court will only be able to vary the lease of flat 1.
The lease of flat 2 would not be variable because Section 35(7) of the Act provides that in general the variation of lease provisions do not apply to tenancies to which Part II of the Landlord and Tenant Act 1954 applies. Section 23 of that Act provides that Part II is to apply,
"to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and so occupied l'or the purposes of a business carried on by him or for those and other purposes".
That would cover the high-technology business run in a corner of the dining room or indeed anyone who works from home; he would be unable to apply to vary his lease.
The lease of flats, 3, 4 and 5 is not variable because Section 35(6) of the Landlord and Tenant Act 1987 provides that a long lease is not to be regarded as a long lease where the demised premises consist of or include,
"the flat and one or more other flats".
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It would have been possible for the lessee to apply to vary the leases of flats 6, 7 and 8, but Schedule 13 is intended to put an end to this. It would do so, moreover, in such a way as to preserve the right of the freeholder to apply for a variation while precluding the lessee from doing so. This appears to me to he grossly inequitable and the kind of bias between landlord and tenant which only promotes bad feeling and which should not be in any legislation.
My second amendment, which I consider a second best, simply seeks to put back the law as regards flats 6, 7 and 8 to what it was before the recent amendment incorporating Schedule 13 into the Bill.
If my noble friend will recommend acceptance of the first amendment, and the House agrees to it, that will cover also the situation envisaged by the second amendment. The first amendment does away with the restricted definition of "long lease" and all unnecessary restrictions on applications to vary defective leases. Where there is a long lease of a flat or flats, and that lease is defective, either the landlord or the tenant would, under the amendment, be entitled to apply for a variation. There seems to be no reason in principle why any defective long lease of a flat should not be made subject to an application to vary, and I say this, and move the amendment, in the genuine hope of improving the operating systems of the 1987 Act, notwithstanding in my personal opinion that the substantive parts are sadly flawed. I would mention that the exclusion of seven of the eight flats to which I have referred from the right to vary provisions does not follow from anything recommended in the Nugee Report.
I hope that my noble friend, with all his practical experience of the subject, will see the difficulties I have outlined and will be able to recommend acceptance of the amendment. I beg to move.
The Earl of Caithness: My Lords, I have listened carefully to my noble friend's comments on the procedure for the variation of long leases of flats which was introduced in Part IV of the Landlord and Tenant Act 1987. Our starting point, like that of the Nugee Committee on whose recommendations the 1987 Act was based, was that such a procedure should be primarily for the benefit of the individual residential flat owner, whose amenities and living conditions would suffer if the lease failed to make proper provision for the management of the block.
My noble friend's starting point is somewhat different. He is concerned that there should be a procedure to put right all defective leases in a block irrespective of whether the leaseholder is an individual or someone with a wider interest in the block as a whole.
In Amendment No. 51, my noble friend seeks to remove the provisions in Section 35 of the 1987 Act which exlude leases covering more than a single flat and flats held on business tenancies. This is a very wide-ranging amendment, which would significantly affect the way that the Act would operate, and goes much further than the amendments introduced at Report stage which were intended essentially to tidy up the restriction in the Act as it stood produced by the reference to "common parts". I therefore hope

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that my noble friend, having aired these wider-ranging issues which are obviously of concern, will not seek to press the amendment.
Amendment No. 52 is intended to ensure that a tenant with a series of individual leases of flats is not excluded from the variation procedure. The reasons why we had included this was not simply in the interests of tidiness. There could be situations where an individual tenant subsequently built up an interest in a block by acquiring other leases from the leaseholders. This seemed to us closely akin to the sort of commercial interest in parts of a block which we have sought to exclude from the 1987 Act procedures generally. The effect of Amendment No. 52 would be to widen the availability of the variation procedure by making it available to tenants who had a number of individual leases all of which were defective. Having listened carefully to my noble friend and considered further the points he raised at Report stage, which he developed further in subsequent correspondence, I am happy to accept his argument that applications from the holders of such leases should not he excluded from the procedure, and I recommend to your Lordships acceptance of Amendment No. 52.
Lord Coleraine: My Lords, my noble friend and I do not see synoptically on the general provisions but I am grateful to him for the introduction of Schedule 13. I certainly agree that while the opportunity was here I have tried to extend it a little further than perhaps I could reasonably expect your Lordships to sympathise with. I am grateful to my noble friend for what he said about Amendment No. 52. In the meantime, I beg leave to withdraw Amendment No. 51
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 52:
Page 164, leave out from beginning of line 49 to end of line 4 on page 50.
On Question, amendment agreed to.
Schedule 17 [Minor and consequential amendments]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 53:
Page 190, line 48, leave out ("by") and insert ("to").
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 54:
Page 190, line 48, at end insert—
(" .In Schedule 4 to that Act (tenancies which cannot be assured tenancies) after paragraph II there shall be inserted the following paragraph—
"Accommodation for homeless persons
11A. A tenancy granted expressly on a temporary basis in the fulfilment of a duty imposed on a local authority by Part II of the Housing (Scotland) Act 1987." ").
The noble Lord said: My Lords, noble Lords may recall that at Report stage the House agreed to an amendment excluding from the definition of assured tenancy in England and Wales those tenancies let on a temporary basis by a private sector body, but by
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arrangement with a local authority in discharge of its homelessness duties. That amendment sought to bring the position where an authority uses private sector accommodation into line with that which applies where the authority houses a homeless person temporarily in one of its own houses. This amendment seeks to introduce a similar provision into the corresponding Scottish legislation. It will exclude from the definition of assured tenancies those tenancies expressly let on a temporary basis as part of the authority's homelessness duties. I am sure that this amendment will be welcomed both by local authorities and by private sector landlords which make available accommodation of this type. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 55:
Page 190, line 48, at end insert—
(" In section 63 of that Act (consent for subsequent disposals) after subsection (2) there shall be inserted the following subsection—
"(2A) Before giving any consent for the purpose of subsection (1) above, Scottish Homes—

(a) shall satisfy itself that the person who is seeking the consent has taken appropriate steps to consult the tenant of the house (or, as the case may be, each house) of which the property proposed to be disposed of consists; and

(b) shall have regard to the response of such tenant to that consultation." ").

On Question, amendment agreed to.
7 p.m.
The Earl of Caithness: My Lords, I beg to move, That the Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Caithness.)
Lord McIntosh of Haringey: My Lords, this is a bad Bill. It bids fair to be five bad Bills. There are five parts of it, all of which are deeply objectionable and are all based on a false analysis of the housing crisis in our society. The assumption is made that our problem is lack of private rented accommodation brought about because private sector landlords do not have a sufficient financial incentive to expand private rented accommodation. From that assumption flow many effects in the Bill, all of which are deeply damaging despite the changes that have been made as the Bill has passed through your Lordships' House.
Part I does two things to help landlords. It increases rents and reduces security of tenure. There is no reference to the fact that this must inevitably lead to an increase in homelessness. Indeed, homelessness is conspicuous by its absence from the Bill. The effect of Part I will be higher rents, more difficulties for people to afford them, greater insecurity of tenure and greater uncertainty in the housing market. This is the result of an economic theory which is beloved of the so-called radical right, but which has been rejected in the past by all sensible governments of all political persuasions.
Part II of the Bill is an attempt to increase the amount of rented accommodation quite artificially by forcing housing associations which do not want to

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be part of the private sector into the private sector. They will have to offer to new tenants—not to the existing tenants—poorer terms of security, poorer terms of succession, and in all probability higher rents as well. That is a statistical way of increasing the private rented sector. It is not a way of providing a single property for rent and it is not a way of increasing the housing stock.
Part III is concerned with housing action trusts. As the Bill has passed through the House, the HATs have been revealed as a gimmick to exploit the general paranoia of the Government in respect of local authorities. It is argued that local authorities are such bad housing managers that everybody will be delighted to get out the worst estates and move to other landlords. Because the Government are unwilling to provide the financial resources to local authorities to actually improve the properties themselves, they will take them away quite undemocratically and parcel them off to other landlords, not even necessarily with the consent of the people living there.
I am glad to say that the House passed an amendment which stated that there shall be a vote on the matter. I sincerely hope that the Government will see the wisdom of that and also see the danger that there would be if the vote were reversed in another place, because tenants in the housing action trust areas have already shown their strong disagreement with the HATs proposals despite the honeyed words which have been expressed to them by Government Ministers both in press releases and in letters to individual tenants.
Part IV of the Bill is another attempt to increase the private rented sector artificially by taking housing away from local authorities and allocating it to approved landlords. If that were simply a matter of breaking up large local authority estates and giving them to housing associations I think that there are many local authorities, of all political persuasions, which would go along with that proposal. But the whole issue has been bedevilled by an undemocratic voting procedure which conscripts the non-voters into the yes lobby and has predictably caused the strongest possible objection among council tenants to what is proposed. Indeed, the Government have not heard the last of those objections, and will certainly not have heard the last of the difficulties which they will face in trying to implement these proposals.
Part V of the Bill deals, among many other matters, with housing benefit. In our view, despite some of the assurances which have been obtained from Ministers, it still contains a risk that the higher rents and lower security will lead to hardship for those who find themselves in need of housing benefit. We hope that we are wrong about that. We have listened with great care to the Minister's words on the matter this afternoon. However, if we are right, we will again see an increase in hardship for those most in need in our society. That is a wrong prescription and the wrong way to go about it.
Although the Bill is altered in many minor ways, it has not been altered in the way we should have liked to see it altered. Therefore it is with a heavy heart that I speak to the Motion that the Bill do now pass.
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I also speak in admiration of the noble Earl, Lord Caithness, for the way he has conducted the Bill through its various stages. He has had a shifting team of colleagues. I did not say "shifty"; I said "shifting". He has deprived of the help of the noble Lord, Lord Hesketh, halfway through the Bill's proceedings. The noble Lord was ably replaced by the noble Earl, Lord Arran. The Minister was also ably assisted on Scottish matters by the noble Lord, Lord Sanderson of Bowden. I should like to express our appreciation of his and their courtesy and consideration at all stages of the Bill's proceedings.
We have disagreed most strongly on some matters. We have had occasion to come to what were very nearly hard words. However, let me assure the Minister that our objection to the Bill concerns the Government's policies and not the advocacy of the noble Earl and his colleagues. We are grateful to them and to all those who have taken part in the debates. We are also grateful to the staff of the House who have assisted us, often until late into the evening, as the Bill has progressed through your Lordships' House.
Lord Tordoff: My Lords, perhaps I may begin by offering an apology on behalf of my noble friend Lord Ross of Newport. He has had to attend a longstanding engagement which is associated with a trust for the homeless. I am sure that noble Lords will excuse him on that ground. As we all know, it is a subject which is very close to his heart.
As someone who has only touched on the Bill peripherally, I should like to echo many of the remarks made by the noble Lord, Lord McIntosh of Haringey, especially in relation to the way in which the noble Earl and his colleagues have conducted the Bill in its passage through the House. I endorse everything that was said in that respect. I am especially grateful that one of my amendments was accepted; namely, the extension of the access to personal files, which was a peripheral matter. On that subject, I should like to say that I understand in relation to a question which I raised when I moved the amendment that the Department of the Environment has now started a consultation process in regard to that part of the Bill. I am most grateful for that.
Like the noble Lord, Lord McIntosh, we on these Benches cannot be happy with the Bill. It is a piece of political philosophy with which we totally disagree. That is not to say that one would not like to see a healthy private rented sector, because I think that we certainly would; but not at the expense of the local authority sector which has for many years and in many places provided excellent housing. We know that there have been many problems, but I do not believe that this Bill is the way to go about solving them.
The strange democratic processes, pseudo-democratic processes, which have been brought into play in relation to tenants' ballots are something that I hope we never see repeated in any other Bill. We are extremely worried about the impact of the Bill on homelessness, which like the noble Lord, Lord McIntosh of Haringey, I am sure, will increase as a

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direct result of the Bill. However, I desperately hope that I am wrong in that belief.
Finally, it has been put to me by my noble friend Lord Meston that perhaps the Government ought now to consider some sort of consolidation process for landlord and tenant legislation, because there is an awful lot of it scattered about. I am sure that I shall earn the undying gratitude of the noble and learned Lord, Lord Simon of Glaisdale, for suggesting that the Government might look at the matter with some degree of urgency.
Again, I must say that this is a Bill with which we are not at all happy. However, that in no way restricts our admiration and thanks for the way in which the noble Earl has conducted the Bill through the House.
Lord Boyd-Carpenter: My Lords, unlike the noble Lord, Lord McIntosh, I think that this is a good Bill. I think that it must be a good Bill to have been able to stand up to the bombardment to which it has been subjected, notably by the noble Lord, Lord McIntosh. I hope he will allow me to say that he has shown himself to be the most formidable, skilful and adroit critic of a government that I have heard in either House for a great many years. The fact that the Bill has emerged virtually undamaged, after being dealt with in the way he dealt with it, is perhaps paradoxically an indication that it is a rather good Bill.
At this stage I should like to say just one thing about the Bill. There is a difference of philosophy between noble Lords opposite and noble Lords on this side of the House. I believe—this is based on some experience—that a good deal of the housing problem, especially the shortage of rented accommodation, is a direct consequence of much of the landlord and tenant legislation which has been enacted since the war.
I recall that when some years ago I was a director of a property company—I hope noble Lords opposite will not hold that against me as almost a confession of crime—because of the restrictions imposed we sold the flats and houses which previously we had been renting as a matter of policy because in the interest of our shareholders there was no other course open to us. I suggest to your Lordships that that has been a very widespread tendency as a result of the restrictive aspects of landlord and tenant legislation over the years. Indeed, some of us would have been glad to see the Bill go a bit further in reversing that process.
However, the Bill makes a substantial change and I believe that it will help to increase the amount of accommodation available for rent. It will not be an immediate or dramatic process, but, over the years, it will alter the bias of the system so that it tends to encourage rather than discourage provision of that rented accommodation.
Finally, I join with other noble Lords who have spoken in saying how much I have admired the way that the noble Earl of the Front Bench has conducted this measure. On his fortieth birthday one could wish him perhaps another 40 years of similar hard labour. He is apparently wholly tireless, immensely
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courteous, and with a knowledge of the Bill and of the whole housing problem which is quite remarkable. I think he has deeply impressed all your Lordships on both sides of the House.
Therefore, I should like to give the Bill my best wishes for its going into effect and for effecting the good which all of your Lordships in all parts of the House want to see in the infinitely difficult and delicate subject of the accommodation problem in our country. I hope and believe that it will make its contribution.
Lord Swinfen: My Lords, I should like to take this opportunity to thank my noble friend, not only personally but also on behalf of his noble kinswoman, for the courtesy that he has shown both of us in discussions on the right to buy between Committee and Report stages. My noble friend Lord Ingleby has also asked me to pass on his thanks for the words that the noble Earl had to say on the working of the Chronically Sick and Disabled Persons Act in relation to this Bill.
7.15 p.m.
The Earl of Caithness: My Lords, when on 11 th July the Bill, already heavily amended in another place, had its Second Reading in your Lordships' House, I pointed out that it represented the Government's measured response to the need for change in the rented housing market. I said that our central aims were to stimulate choice and competition in a vital area of housing which has for decades been in decline and, wherever possible, to involve the private sector in meeting housing needs. I believe that these central aims of our policy have been endorsed during the detailed scrutiny that the Bill has undergone in this House. But I also believe the Bill represents a better balanced and more comprehensive set of measures than it did when we began our consideration nearly four months ago.
I am grateful to all your Lordships for the constructive approach that has generally been adopted during the passage of the Bill. At Second Reading I did of course outline a number of the major changes to the Bill to be made in your Lordships' House. I also observed that some of your Lordships might have new proposals and that we would certainly listen carefully to any positive ideas put forward. I am sure noble Lords would agree that that is just what we have done. Excluding Second Reading, there have been around 60 hours of debate over 11 days, including today, with over 20 Divisions. Over 700 amendments have been tabled, of which about 300 have been accepted by your Lordships. We have examined the Bill thoroughly but have still managed to retain our traditionally courteous approach to business. Because we on the Government Bench have been willing to listen to your Lordships' views, and because of the constructive nature of much of the debate, we have been able to move or support almost all the amendments made to the Bill.
It is perhaps worth highlighting some of these. There are the changes to the provisions relating to compensation for illegal eviction, on which I was able to respond to concerns expressed by my noble friend

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Lord Jenkin of Roding among others. The courts are now being given the power to mitigate the damages in certain limited circumstances, including where a tenant has seriously misbehaved towards the landlord before the eviction. I was also pleased to be able to respond to concerns expressed by the noble Lord, Lord Meston, by changing the date of liability for damages, to remove liability where a tenant is reinstated before the court case is concluded, and to exclude bare tenancies and licences from the requirement for a court order. We were grateful to my noble friend Lord Coleraine for his amendments clarifying the definition of actions constituting unlawful eviction.
It is also worth highlighting that we have imposed controls on further disposals of property transferred under housing action trust, tenants' choice or large-scale voluntary transfer arrangements; and, in response to concerns expressed by the noble Lord, Lord Graham of Edmonton, at Report, we are requiring tenants to be consulted before such disposals can be made. We have also protected management co-operatives under the tenants' choice arrangements.
There is probably no need to remind your Lordships that we have accepted quite a number of amendments from the noble Lord, Lord McIntosh of Haringey, or have tabled amendments in response to his concerns. We have, for instance, made clear that a landlord must give particulars of his grounds for possession in the notice; we have stipulated that an assured tenancy is not to be suitable alternative accommodation merely because it is an assured tenancy; and that the development ground may not be used in the case of a new tenancy granted to an assured tenant who is a Rent Act successor.
We have accepted amendments tabled by the noble Lord, Lord McIntosh, which change the Insolvency Act to prevent bankrupts from losing their tenancies in certain circumstances; allow a court to transfer an assured tenancy to a spouse following a divorce; and give a tenants' choice applicant four weeks instead of two in which to notify his or her objections to a local authority landlord's valuation notice. Perhaps the most significant change on Part IV of the Bill is that, following the suggestion of the noble Lord, Lord McIntosh, made during the lengthy debate in Committee on the voting question, we did, of course, insert a requirement that at least 50 per cent. of eligible tenants must vote in the tenants' choice ballot if an application is to proceed.
Following cogent representations from my noble friend Lord Swinfen, my noble kinswoman Lady Masham and the noble Baroness, Lady Darcy (de Knayth), and others we have allowed properties constructed or adapted for the disabled henceforth to be eligible for the right to buy and tenants' choice. We have been able to respond to concerns expressed by the noble Viscount, Lord Ingleby, the noble Lord, Lord Carter, and others, by excluding disability from the grounds for dismissal from the boards of HATs, the Housing Corporation and Housing for Wales; and we have enabled the Secretary of State to apply Section 3 of the Chronically Sick and Disabled Persons Act to HATs by order. We have accepted
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the amendment of my noble friend Lord Trafford extending the right to buy delay procedure by providing for the three-year discount repayment period to be back-dated. As the noble Lord, Lord Tordoff, said, we accepted his amendment applying the Access to Personal Files Act 1987 to housing action trusts. And, in response to the concerns of my noble friend Lady Faithfull and others, we have specified that the Housing Corporation may appoint local authorities as agents for paying grant.
I think your Lordships have every right to be pleased with the way we have gone about amending the legislation and to be satisfied with most of the results. Perhaps the most obvious area of concern between the noble Lord, Lord McIntosh of Haringey, and myself concerns housing action trusts where again we had tough words to say to each other today. May I just repeat to the noble Lord that we have never intended to mislead, and indeed never have misled anybody. Tenants will have the choice, but there must, as the noble Lord is aware, be a willing landlord. HATs are short term and therefore there cannot be an indefinite tenant veto. Our policy and intentions are clearly on the record.
Unfortunately, because of the major redrafting required, there has not been time to bring forward amendments to Part I of the Landlord and Tenant Act 1954. We had hoped to provide long leaseholders whose leases come to an end with the protection of an assured tenancy under Part I of this Bill rather than a statutory tenancy under the Rent Act. However, as my noble friend Lord Boyd-Carpenter will be pleased to hear, it is still our intention to put these provisions into effect at a suitable legislative opportunity. Meanwhile, long leaseholders whose leases expire after the commencement of this Bill will continue to get statutory tenancies under the Rent Act as at present.
My very special thanks are due to the noble Lord, Lord McIntosh of Haringey. Despite our obvious and fundamental differences in outlook he has led his party with distinction during our very thorough assessment of the Bill. He, together w.th his Front Bench colleagues, the noble Lords, Lord Dean of Beswick and Lord Graham of Edmonton, have yet again helped demonstrate the value of debate in your Lordships' House on such weighty matters of national importance. I do not think that the noble Lord ever ceases to amaze your Lordships with his talent for bringing forward, or delaying, debates to prime time. No one can say that the major issues have not been fully debated. For example, three times we have had major debates on tenants' choice voting procedures.
I am pleased to be able to say that our Bill has been improved in some respects because of the experience that has been brought to bear from the Opposition Benches. I should like to pay tribute to the contribution of all your Lordships who have taken part, and particularly the noble Lord, Lord Ross of Newport, who, we fully understand, is not able to be with us. I should also like to thank all those on the Benches behind me who have taken part, and whom I cannot mention by name because they are so numerous. I should also like to thank my right

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honourable friend the Secretary of State and my predecessor, William Waldergrave, as Minister for Housing, who together did so much to develop the policies in the Bill. My thanks go also to my team of officials, advisers and all those outside the House who approached us about the Bill's provisions.
I take the Bill away from your Lordships' House with an even greater feeling of personal responsibility than when I introduced it to your Lordships. However, I should add that it is in no small part due to your Lordships that I now much better understand the intricacies of the policies involved, even though I remain unaltered in my original views about the underlying wisdom and rationale behind those policies. Only this week we have demonstrated quite forcefully that we are prepared to provide the finance to back up our commitment. The Autumn Statement of my right honourable friend the Chancellor of the Exchequer shows that gross expenditure by the Housing Corporation is planned to rise to £1,328 million by 1991–92. This 80 per cent. increase on the 1988–89 figure is a measure of our commitment.
I therefore remain convinced that we have to tackle the deep-rooted failings in the rented housing market in the thorough-going yet sympathetic way entailed in the Bill. If we do not, we let a rare opportunity slip
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to help solve some of this country's most serious housing problems. I am therefore pleased to be able to say that the Bill leaves your Lordships' House in almost all respects a better Bill than when it arrived. It is a good Bill because of the choice of opportunity that it gives tenants. I beg to move that the Bill do now pass.
On Question, Bill passed, and returned to the Commons with amendments.

Firearms (Amendment) Bill
Returned from the Commons with the amendments agreed to.

Greater Manchester (Light Rapid Transit System) (No. 3) Bill [H.L.]
Reported from the Select Committee with amendments, and recommitted to an Unopposed Bill Committee.
House adjourned at twenty-two minutes past seven o'clock.