HL Deb 10 October 1988 vol 500 cc592-648

3.25 p.m.

The Minister of State, Department of the Environment (The Earl of Caithness)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 92 [Right conferred by Part IV]:

The Chairman of Committees

In calling Amendment No. 125F, I have to inform the Committee that if this amendment is agreed to I cannot call Amendments Nos. 125G or 125H.

[Amendment No. 125F not moved.]

Lord McIntosh of Haringey moved Amendment No. 125G:

Page 69, line II, after ("person") insert ("(a)").

The noble Lord said: In debating Amendment No. 125G—and as usual I shall treat this with ponderous care to allow those noble Lords who do not wish to take part in the debate to leave quietly—we are moving to perhaps the most important single part of this important and complex Bill. We are concerned with the issue which the Government, in their own proposals, dignified with the name "tenant's choice-. In Amendments Nos. 125G, 125H and 136D, which are to he debated with this amendment, we are challenging the whole claim that the Government are making that this is anything whatever to do with tenant's choice.

We seek to convince the Committee, as most council tenants throughout the country are already convinced, that, as presented by the Government, this is an issue of landlord's choice and not of tenant's choice. All of the democratic safeguards which are commonly found concerning the livelihood, the security of tenure and the rents paid by council tenants, are put at risk, and are to be thrown into the melting pot. They ought not to be treated in the cavalier way in which they are treated in the Bill.

The essence of the argument which we must face today is as follows. The Government are saying that when a proposal comes to a local authority from some other putative landlord (whether it be a private landlord, a housing association or any other type of non-local authority landlord) in order for that change of landlord to go through it is sufficient for a minority of the tenants to approve of such a change. However, it is necessary, in order for it to be prevented, that a majority of all eligible tenants vote against it—including those who do not vote or who are unable to do so. In other words as the National Consumer Council has said very succinctly what we are dealing with is a form of inertia selling.

I give the Committee a couple of examples of the way in which that might work. Let us suppose that we have an estate of 100 houses. A putative landlord says to the local authority that he wants to exercise his rights under Part IV of the Housing Act 1988. Some 30 of the 100 tenants on that estate agree that they would like to go along with that suggestion. Let us say that 49 per cent. agree that they want to stay with the local authority as the landlord. I will explain in a moment why, surprising as it may seem to those who hear horror stories about local authorities as landlords, there may be very good reasons why tenants would wish to stay with local authorities. The remainder of the tenants on the estate for one reason or another do not vote.

What could the reasons be for not voting? They could be that between the date of the first application and the date of the vote such tenants have moved away, are no longer interested or concerned with the vote. The tenant may be old, sick or disabled and therefore unable to register a vote. From the profile of council tenants in this country, it can be seen that there could be a substantial number of such cases. The tenant may speak a foreign language and not English and does not understand the issue. The tenant could be away on holiday or business at the time when the issue comes to be decided. Whatever the reason may be and however valid the reason for not voting, in order for the putative landlord to achieve agreement to the transfer of the property it would be sufficient if he secures that not more than 50 per cent. positively vote against the transfer of tenancy. That is not merely a denial of democracy, as was agreed by the Committee as recently as July when considering the question of housing action trusts (at that time it was agreed that a majority of tenants eligible must vote for the creation of a housing action trust for it to take place) but it is in conflict with all government legislation of which I am aware.

The Housing (Scotland) Bill, which is going through the House at present allows an application to be made for the transfer of tenancy only with the written consent of tenants. The Education Reform Act, which is concerned with the transfer of schools from local authority-controlled to grant-maintained status, requires a majority of parents to agree to that transfer in order that it can take place. A further safeguard is provided whereby a majority votes. If less that 50 per cent. take part in the ballot, a further ballot must take place within 14 days.

All of the many trade union Acts which have seen their passage though your Lordships' House in recent years have been based on the principle of majority voting. In other words, for something to take place a majority must be in favour of it. That is the simplest numerical, mathematical and arithmetical definition of democracy that one can envisage. Yet, for some reason—and we must explore why— the Government are departing from that principle in order to give putative landlords the right to take away from local authorities the control of housing estates even when more of the tenants in those estates vote to stay with the local authority than vote to move.

A moment ago I said that the general image of local authorities is not very good. There is a lot of truth in that. It is true that. in general, large authorities which deal with a mixture of properties, many of which are old, decrepit and in need of substantial investment to put them into decent order—investment which is very difficult for them to obtain—fall down on their duties as landlords. There is no doubt about that. The tenants who arc protesting to us about that particular element in the Bill are afraid that, however defective their relationship may be with the local authority as landlord, the move into the non-local authority sector—be it the private or housing association sector—will put them at risk in two important and vital ways. First, it will put at risk their controlled rents. They will run the risk that when they move out of their particular dwelling, or change a landlord, they may find themselves with what is laughingly called an "assured tenancy". In reality it is nothing of the kind; it is an unassured tenancy. It will mean that their rent will be increased to a market level rather than be at the level to which they have been accustomed. Secondly, they are afraid that the change will weaken their security of tenure.

Members of the Committee who, like me, have the advantage of being owner occupiers, ought not to underestimate the strength of feeling, indeed passion, for security of tenure among those who are not owner occupiers. They wish to be sure that, unless they fall down on their payments or for some other reason, they will not be at risk of being thrown out in the street and at the mercy of any landlord, whether from the public or private sector. If we are owner occupiers who have, by definition, security of tenure so long as we keep up with our mortgage payments, it would ill become us to weaken the security of tenure of those who do not have our advantage as owner occupiers. I am aware that a number of my noble friends who are not owner occupiers will say that with great force because I know that they feel as strongly as I about the issue.

We find ourselves in the extraordinary position where in respect of every other item of legislation put forward by this and previous governments it has been accepted that the will of the majority of those eligible to vote, or at least the majority of those voting, should be taken into account when considering a major change to the livelihood and quality of life of the people of this country; in this case our council tenants. For some reason which is incomprehensible to those who have heard the argument so far, the Government have turned the argument on its head. They have produced a system of voting which makes it far easier for a minority to hold sway over a majority and make it inevitable that those who do not have the opportunity to vote at any particular time will be counted in a way which does not consult their own interests or opinions.

In consonance with the decision which the Committee made about housing action trusts in July of this year, and in consonance with all the principles which were enunciated when considering comparable legislation on many subjects, including housing, I ask the Committee to approve these amendments and to return the state of the law to where it ought to be: a state which recognises the principles of democracy. I beg to move.

3.30 p.m.

Lord Campbell of Alloway

I should like to say a brief word in opposition to these amendments. I shall take the two main points made by the noble Lord, Lord McIntosh of Haringey, and respectfully seek to try to answer them. The first point is the majority voting procedure and the second is the fact that tenants are apprehensive about the risks to their security of tenure.

If I understand the machinery of the Bill correctly, on analysis neither objection is valid. The proof of consideration is that the choice always belongs to the tenants. It gives as many secure council tenants as possible the right to seek a new landlord if they so wish—that is, a new landlord approved by the Housing Corporation who will be obliged in terms to honour the tenants' guarantees. There will be formal consultations with tenants who will be balloted under the supervision of an independent teller.

In those circumstances, as I understand it, the scheme can go ahead only if supported by a majority. However, if the transfer proceeds, no individual secure tanant who wishes to stay with the council can be compelled to transfer against his will. If, on objective analysis, that is a true interpretation of the Bill, where is the objection? Where is it founded against the majority voting procedure? On patient if somewhat laborious analysis there is no question of the home being sold over the tenant's head.

I agree with the noble Lord that this is a serious matter. I agree that housing—and in particular rented council accommodation—is a question of prime importance to a great mass of our people. Irrespective of any political affiliation or none, those people are tied to councils. Again I agree with the noble Lord in that some of those councils fail patently and miserably to discharge their duties to tenants in that regard. The state of repair of much council accommodation is a sheer disgrace. Statistics are not interesting; but, as the Committee well knows, there is much vacant council accommodation which could be put on the market for better use.

The new assured tenancies under Part I of the Bill will confer long-term security of tenure. That brings me to the noble Lord's second point. I respectfully suggest, on analysis, that that is not well-founded because they will confer long-term security of tenure at rent levels which, as I understand this fairly complex matter, have to be offered before the balloting process takes place. In any event, housing benefit will be available for those who qualify, as before.

If I have fairly met the noble Lord's objections, then why should a great mass of our people be saddled with councils as landlords if such is not their wish?

Lord Ross of Newport

I wish the case was as put by the noble Lord who has just sat down. All that we are asking for in these amendments is that the majority of those who are eligible to vote should be clearly seen to vote and vote in favour of change. There should be a majority of at least 51 per cent. of all those eligible to vote before a change takes place.

In speaking to Amendment No. 136D, we are concerned that as this Bill proceeds without amendment it is quite clear that some tenants will have their homes transferred over their heads. I suggest that that would be extremely serious. The transfer would be irreversible. They would have no choice. They would lose statutory tenants' rights, and the new landlord may charge rents which they can ill-afford for services that they do not want. That is happening already; therefore let us not say it is not going to happen. The North British Housing Association purchased all the ex-GLC properties from the Residuary Body. Some 100 or more of those properties are in my part of the world in the Isle of Wight. Already they are seeking to register rents with the rent officer with an increase of something like £11 per week. Tenants had a £2 per week increase just over a year ago. We are now talking in terms of rents of around £30 per week. Rates are paid in addition to that in these cases. They are also trying to change the terms of those agreements, so it is actually happening.

Tenants are concerned, and naturally so. In that instance they were consulted when the sale took place. We are seeking to have everything fully explained to them. We know that a number of local authorities wish to sell their housing stock. We also know—and perhaps we shall be updated by the Minister when he replies—that there are problems over that matter. The Charity Commissioners have expressed anxieties about sales to charitable housing associations. Perhaps we shall receive some information on that matter before the Bill leaves Committee.

Some of the bigger housing associations are now getting very big indeed, and they are getting pretty aggressive. I think that they will be the private landlords of the future. I think it is important that local councils should consult with their tenants. Not all local councils are doing so. They do not have an obligation to do so at the moment, and they are not necessarily doing so. Other councils of all parties are quite rightly doing so and are telling the tenants exactly what they have in mind for the future; whether they intend to form housing associations themselves or whether they are going to seek a takeover by a local housing association or possibly outside landlords.

I think that it is important that all tenants should be fully consulted, and then there should be a vote. Too many of our fellow-countrymen do not follow what is going on half the time, and they do not take an interest if something comes through the door on a voting procedure. They do not take it up and do not bother to vote. Therefore we have this nonsense that they are automatically said to have voted in favour of the change. We are seeking that there will be a clear majority of the tenants of that estate voting, and voting in favour of the change. It is as simple as that.

The Government conceded in the education Bill that there should perhaps be a second poll. I hope to goodness that they are going to concede that in this instance. It is surely only democratic that they should do so.

3.45 p.m.

Lord Renton

Quite apart from the merits of the detail which have been well-argued by my noble friend Lord Campbell of Alloway, I should particularly regret the passing of the first of these amendments on the Marshalled List because it would remove from the Bill words which plainly declare the intention of Parliament regarding this part of the Bill. Some of us spend some time clamouring for the intention of Parliament to be clearly stated; and here we have it most beautifully clearly stated. However, the noble Lord on the Opposition side wants those words to be left out. That would be very regrettable.

I should like to invite the Committee's attention to what the noble Lord proposes to leave out. He is letting the first line stand: This Part has effect for the purpose of conferring on any person The noble Lord wants to leave out: a person who has been approved under section 93 below the right to acquire from a public sector landlord.

Lord McIntosh of Haringey

Amendment No. 125F to which the noble Lord appears to be speaking was not moved. I am speaking to amendment Nos. 125G, 125H and 136B.

Lord Renton

I apologise to the noble Lord. Perhaps I may congratulate him on allowing those words to stand. The fact that they are to be allowed to stand indicates that there seems to be no difference between us as to the main purpose of Part IV of the Bill. So be it.

Lord McIntosh of Haringey

I shall not respond in detail to the noble Lord's attempt to put words into my mouth; but I shall have a later opportunity to do so. I think it would be convenient for the Committee if we did not go backwards and forwards on each item as it is raised.

Lord Stallard

I intervene briefly mainly to ask a question of the noble Lord, Lord Ross. Can the noble Lord give some indication of the Government's thinking? I find it extremely difficult to believe that they have waited until this moment to give us any information on the question of Charity Commissioners' reports and statements recently published. I do not know whether the Minister saw the report in the Independentnewspaper of Friday 7th October. It stated: The Charity Commission has warned the Department of the Environment that housing associations, which have charitable status, would be precluded from taking over large amounts of council housing because this would not be considered as a charitable act. Since 80 per cent. of housing association stock is owned by associations with charitable status, ministers are urgently trying to find a way round the problem to prevent pick-a-landlord or tenant's choice from becoming a lame duck". If the Charity Commissioners' report is upheld, then we ought to be looking at a different Bill entirely. If the housing associations cannot take over the local authority stock, then who will? As I understand it, the whole ethos of the Government's intentions was to transfer the bulk of council housing over to housing associations. I understand that any tenant could challenge the validity of the taking over by a housing association of estates. If that is not going to be legally possible, we ought to he discussing that situation before we go into the details of the tenants' choice. I hope that the Minister will be able to give us that kind of reply before we proceed any further with some of the more important points which have been raised.

I should like to make one very brief point on the contribution by the noble Lord, Lord Campbell of Alloway. He said that people were "tied to councils", and later he said that they were "saddled with councils". I feel very strongly about this. Most of us here have been involved in one way or another with tenants, with local authorities, with voting procedures and with the whole democratic process. We think we understand it far better than those who may not have been involved in any of those aspects of life. I can tell the noble Lord that there are thousands and thousands of people who opted to be "saddled", as the noble Lord said, with councils, rather than be saddled with Rachman or with any other private landlords.

Perhaps I may say that the whole emphasis as regards the contribution of the noble Lord, Lord Campbell, was that these people who are tied to councils now want to be rid of them. That is not true, as is shown by the petitions which are coming in here every day—we have all had petitions; I have handed in petitions—from thousands of people up and down the country who are opting to stay with the councils. They want to be saddled with the councils because they know the alternatives. I hope that the Minister will reply to me on one of the alternatives; namely, the housing associations. If they are now going to be illegal it makes the alternative even more frightening than appears as the Bill stands.

Lord Campbell of Alloway

Perhaps I may just answer the noble Lord as we are in Committee. This business of saddling, which is the term I used, means that if they do not want to be saddled with the council then they do not have to be; but if they do, as the noble Lord, Lord Stallard, says, then they can remain with the saddle. I cannot see that the noble Lord is meeting the substance of the problem.

Lord Stallard

I can understand that the noble Lord cannot see the point. I said that. There are a number of people who cannot understand what the Bill is about and why tenants should be worried about it. I accept that. There are people who do not understand how or where council tenants live and how they feel.

Another aspect of this saddling procedure is that they are saddled and landlords now have a vested interest in interfering with the voting procedure. It would be to the landlords' advantage to obtain as many abstentions as possible. Therefore the whole procedure is open to all sorts of unscrupulous dealings. Do not tell me that landlords have never been unscrupulous in their attempts to get their hands on property. Those are real fears. I suggest that Members of the Committee opposite should give deeper consideration to council tenants and where they live.

Lord Stoddart of Swindon

I have listened to the debate so far and, in particular, to the remarks of my noble friend and also the remarks of the noble Lord, Lord Campbell of Alloway, in relation to councils and the way in which they administer their estates.

I have a background in local government and service in another place. Certainly as a councillor, as a chairman of a housing committee and indeed as a Member of Parliament I received many complaints. I received many complaints about my councils. I also received many complaints about private landlords. There was one difference; namely, that I could do something about complaints about the council administration but invariably I could do nothing about complaints about the private landlord.

Therein lies the difference. Local authority tenants have some public redress. Private tenants have no public redress. That is why many tenants—indeed, the majority of tenants—do not want to transfer from an organisation over which they have some say and control to an organisation or private individual over whom they can have no control or influence. That is the difference between the two forms of tenure.

Lord Harmar-Nicholls

Will the noble Lord tell me what he could do as a Member of Parliament to a council which he could not do to a private landlord?

Lord Stoddart of Swindon

I found that if ever I wrote to the chairman of a housing committee or indeed to the housing manager, action followed very quickly indeed.

Noble Lords


Lord Stoddart of Swindon

It may very well be that the noble Lord has a different experience, but we are different people who are perhaps able to have differing influence on different people. However, that is by the by. I am sure the noble Lord would agree that housing under public control is amenable to pressure from public representatives.

Perhaps I may make the further point that I find it most remarkable that a Conservative Government would wish to interfere with normal voting practices. One criticism which I have never particularly made about the Conservative Party is that it wishes to undermine established constitutional practice. I always believed that the Conservative Party was there to uphold normal, understood and well-practised constitutional principles.

However, it seems that things have changed. First, they have changed in relation to legislation on trade unions where, in order to maintain a closed shop, there has to be an 80 per cent. vote in favour. I disagreed profoundly with that and I thought that it was most unfair. We now have a situation where the "don't knows" or perhaps even "don't cares" are going to be added to the "Ayes". I find that very strange. Indeed, if it was practised in normal elections we would have a very peculiar situation. For example, let us suppose that all the "don't knows" were added to the incumbent Member of Parliament. Those already in power would have a very long lease of life.

However, there is another instance which comes to my mind. I was a Whip in another place when we had the referendum in Scotland on devolution. If that system had applied in relation to the referendum for devolution in Scotland, Scotland would now be devolved although the majority of "noes" and "don't knows" were against it. I hope that the Minister will take those matters into account about the desirability of introducing alien, unsatisfactory and unacceptable voting procedures into any part of our national life.

Lord Bottomley

My noble friend Lord Stallard referred to petitions. I am sure that many have been presented to Members of this Committee. About an hour ago I was called out by 50 people from Middlesbrough—my old parliamentary constituency—who said that the tenants there felt very strongly and they had been sent down specially to let me know. In so doing, they asked me to let Members of the Committee know their feelings. They presented a petition. I am sure that my experience is shared by many other Members of the Committee and I hope that the amendment of the noble Lord, Lord McIntosh, will be accepted.

Lord Callaghan of Cardiff

. I believe that this is not only a very serious matter but one in which the Government are failing to take into account both the history of landlord and tenant and the experience of a great many people. In a way, we are all dogged by our experience of these matters. For myself, I never lived in a house which I could call my own, subject to a building society, for about the first 30 years of my life. However, it is not my personal experience with which I am concerned.

I say to Members of the Committee of all parties—and it may be that the Government are going to carry this—that/to/interfere, in any way, to appear to interfere or to give an apprehension to people about the security of the homes in which they live is one of the worst things that can be done to them. Without any propaganda from anybody in particular, this Bill is causing a great deal of anxiety. I believe—I hope that Members of the Committee opposite may still consider this—that it would be better to require a positive majority of people in favour of a change of ownership. If that is not done, I can see a tremendous amount of trouble coming.

I take an elitist view on this matter, and I am not sure what support I shall get from the Committee as a whole. In my 42 years as a Member of Parliament I had what is called a working-class constituency. I represented an area containing people who were never likely to get a job even with full employment. I believe that we have a responsibility for such people. They are not the people who will go to vote. To reply to the noble Lord opposite, they will not even bother to say that they want to stay under the council. They are the people who are of such a character—the Committee may accuse me of elitism—that they are not fully able to look after their own lives.

I have seen a number of people who drift into petty crime not because they are criminals in the sense that we all understand the word but because they are incapable of managing their affairs in any way. I fear that those are the people who will suffer. Those are the people who, in the end, society will find we have pushed out of the general consensus that we have in this country. Therefore I speak for those people.

I believe that they are a minority, and of course the Government are right to say that we must teach people to be responsible for their own affairs. We are all responsible for our own affairs and Members of this Committee are quite capable of doing so. However, there is a section of our society which is not yet able to do that. That situation has existed during my lifetime as a Member of Parliament. Therefore I shall vote for these amendments because that is the best way of protecting such people.

Lord Renton

Before the noble Lord sits down, has he borne in mind, in making those interesting remarks, that this part of the Bill applies only to secure tenants?

4 p.m.

The Earl of Caithness

It would be helpful if I prefaced my response to this, our first debate in Committee on Part IV of the Bill, with some general remarks about the general objections to what has become known colloquially as tenants' choice.

Well before introducing these provisions we featured tenants' choice prominently in our election manifesto. We sought and obtained a mandate for council tenants to be able to ask other institutions to take over their housing, but we promised that tenants who wish to remain with the local authority will be able to do so. That is clear in the Bill.

The proposal arose out of problems which are all too obvious in some, I agree not all, of the council housing stock. Many councils have virtual monopolies of rented housing in their areas. By no means always but too often, these large stocks are badly run. This has been possible in the past largely because council housing has been a closed world to which tenants have been unable to choose an alternative. We believe that these stocks require the spur of competition to promote better services for tenants, whether through transfer under this part of the Bill to a new landlord or, in the case of those tenants who remain with public sector landlords, by the beneficial effects of competition on their operations.

The mere threat of our proposals and policies in this Bill has already led to an improvement in council house management. One has seen it regularly in reports. I saw a report recently concerning Birmingham—the noble Baroness, Lady Fisher of Rednal, will no doubt have seen it—where the council house authorities are taking a new attitude to their tenants and looking after them as customers. That is to be welcomed. That situation has arisen solely because of the provisions included in this Bill.

We are in something of a dilemma with these amendments. The noble Lord, Lord McIntosh of Haringey, sought to link Amendment No. 136D with Amendments No. 125G and 125H, although there is no connection between the last amendment and the first two. That takes us into another area—the whole question of voting—which the Committee will know from reference to the Marshalled List embraces other amendments which are not grouped with these. I refer to Amendments Nos. 132ZC and 136C in the name of the noble Lord, Lord Ross, and Amendments Nos. 135D, 135E and 136F. All those amendments deal with voting. I had hoped that we would either lump all of them together or deal with Amendments Nos. 125G and 125H by themselves and deal with Amendment No. 136D when we came to vote. The Committee is therefore having, as it were, a split debate.

It would be wrong for me not to answer the debate in general that we have had on the voting system. I first deal with Amendments Nos. 125G and 125H. This was a device that the noble Lord, Lord McIntosh, brought into the Marshalled List in order to bring forward the debate. They are a simple reference forward to the fact that the right under Clause 92 is subject to the majority provision in Clause 102(2). But that is already clear from the reference in Clause 92(1): subject to and in accordance with the provisions of this Part". Therefore Amendments Nos. 125G and 125H add nothing. Needless to say, Amendment No. 136D adds a considerable amount, as do the other amendments which are not being discussed now.

However, there is one matter in the area we are discussing on which we are at one. The procedures to allow tenants affected by a proposed transfer to affect its outcome and the future of their own tenancies if it goes ahead are at the very heart of tenants' choice and Part IV. I know that many people in this Chamber, and elsewhere, are concerned about the majority requirement under Clause 102. I hope I can reassure them and the Committee that, although later this evening we shall discuss further, more technical amendments that stand in my name, the principle of the provision in the Bill distributes the onus of proof reasonably as between the opponents and the proponents of change among the tenants affected. It is underpinned by arrangements which safeguard fully the interests of individuals and is duly precedented.

Perhaps I may say to the noble Lords, Lord Stallard and Lord Callaghan, that the prime safeguard for the interests of the individuals is that no secure tenant who does not wish to transfer can be obliged to do so against his or her will. We need to bear that individual safeguard clearly in mind when considering how the outcome of an application as a whole is collectively decided by the tenants. As for the collective decision, the system of landlord approval together with the proposed informal preliminary competition between the prospective landlords which the Housing Corporation will run will ensure that applications are likely in the first place to be pursued only where there is a significant body of collective support among tenants for the change. That is the first point. There must be evidence that a large number of tenants want to change.

Applicants will also be required, as a condition of their approval to take part in the scheme, to keep tenants informed about the application and its progress. In addition, regulations governing consultation under Clause 101 will ensure that tenants are given both full and understandable information about the process itself and a contractually binding and comprehensive offer of new tenancy terms. Moreover, the ballot itself will be run by an independent teller, such as the Electoral Reform Society, paid for by the applicant, who will be able to chase up any tenant entitled to vote who does not initially do so and assist him to register a view.

Perhaps I may dwell on that aspect for one moment. This is not a ballot that takes place on one day. We envisage a period of about 13 weeks or so in which the first part will be the period in which the information will be given by the applicant and by the landlord—the local authority. The tenant will therefore receive both views. There will then be a period of about three weeks in which the voting takes place. Therefore it does not take place on one day but over a period of time. Consequently the very tenants whom the noble Lord, Lord McIntosh of Haringey, is concerned about will have the opportunity to be consulted, can be chased up by the Electoral Reform Society and will therefore have little excuse to say that they did not know or have the opportunity to vote. If a tenant misses the opportunity on one day, there will be a further opportunity. By the time the vote is reached it is difficult to envisage any normal circumstances in which tenants have not had both the information and the opportunity to register a view if they have one.

In those circumstances, and remembering the availability of the individual opting out, it is surely reasonable not to allow the abstention of those who do not feel strongly enough, after all the information and explanation I have described, to vote about whether they want a transfer to deny much-needed change to other tenants who may desperately want it.

Baroness Seear

I am grateful to the noble Earl for giving way. On a point of information, I believe he said that tenants would be chased up by the Electoral Reform Society. That seems to me to be very odd. Surely the Electoral Reform Society, as the impartial handler of the vote, would not be in a position to chase up voters. I very much doubt whether it has the staff to chase up voters. Is what the noble Earl said really correct?

The Earl of Caithness

Yes, indeed. This is the point that has perhaps not been understood. The Electoral Reform Society will be paid by the applicant to record the votes. There will be a period over which the voting takes place. If the tenants in a particular flat or house, or the tenants in that area, have not voted, it will be for the Electoral Reform Society to go to those tenants and say "You have the opportunity to vote and would you like to vote?" It will be up to the applicant and the landlord to put before the tenant the choices available to him.

The majority provision in Clause 102 facilitates transfer for those who want it while allowing individual safeguards for those who do not. In our view this is a perfectly right and fair approach. We have heard suggestions that some tenants might be transferred against their will through ignorance or inadvertence. I do not believe that those suggestions ring true.

Lord Stallard

Perhaps I may raise a point on the role of the Electoral Reform Society because it seems that we are just glibly passing over the matter. It would appear that the Electoral Reform Society is now working for the landlords or for the applicants. Its representatives will go and see the tenants, canvass them and collect the votes on behalf of the applicant. I point out to the noble Earl that there are cases at present where landlords have started canvassing applicants. There is already pressure being put upon tenants to abstain or not to vote or to vote the way they do. How will those same applicants or landlords employ the Electoral Reform Society and what will he the employment relationship between the society and the landlords? Why have not the tenants access to the same organisations?

The Earl of Caithness

If I can help the noble Lord further I shall try. The point is that the independent tellers—I quoted the example of the Electoral Reform Society—will be independent of the applicant or the landlord. Their duty will be to collect and record the votes in an independent way. They will also have the opportunity to go to tenants, because it is phased over a period of time, to say "You realise a vote is going on and this is your opportunity to vote." That is why it is a different process from what I believe the noble Lord thought before I had a chance to explain it to him.

Lord Mayhew

I speak as a very old member and supporter of the Electoral Reform Society. Is the noble Earl telling us that this detail has been agreed with the society? Is he aware that even if the society made the surely grave mistake of agreeing to this procedure, it is out of court and quite wrong? One does not want the Electoral Reform Society doing what is called "knocking up".

The Earl of Caithness

As I understand it, the Electoral Reform Society has agreed to it and whether or not it is against the noble Lord's best judgment that is the situation. We believe that is the fairest way and that is why we believe that this phased voting system with that ability gives every tenant the opportunity.

Baroness Fisher of Rednal

Does the noble Earl agree that if a group of persons living in the area did their own canvassing—it might be the tenants themselves who went around, having formed their committee, and canvassed to get their own conclusions—the result might be not to go to a private landlord? Would that be equal to what the Electoral Reform Society would be doing? It is important that both sides should have the option of voting on the basis of the way in which the case is presented to them. In the same way in any election the Conservatives, the Liberals and the Labour Party come knocking on the door and one makes a choice afterwards. Although it is important that the Government will be setting up schemes in the New Year to fund groups that will be putting over the case for the landlord, it is also important that the tenants should be able to carry out their own ballot and to present that as their findings.

4.15 p.m.

The Earl of Caithness

I thoroughly agree with the noble Baroness that it is absolutely vital that both sides put their case. All I was saying about the independent tellers was that they have the opportunity to go back to someone who has not voted and say "There is a vote going on and now is your chance to vote". It is not up to them to put the case for the applicant or the landlord. I very much hope that some of the tenants that the noble Baroness spoke about will get together and form tenants cooperatives and become suitable proposed landlords for the housing corporations.

Lord Parry

The noble Earl caught so many of us by surprise despite the nationwide concern that has been shown over this issue for months. Did he tell us that the Electoral Reform Society would be paid to carry out this work? By whom will it be paid, what are the funding arrangements and how much will it all cost?

The Earl of Caithness

Yes, it will be paid. The applicant will be responsible for the cost of the independent teller.

Lord Stoddart of Swindon

I can hardly find words to express what I feel about this. Is the noble Earl absolutely sure that the Electoral Reform Society, which is concerned with fair representation and fair methods of voting, has actually agreed to this system and also agreed to operate it on behalf of landlords or the Government or whoever it may be? I am sure that the noble Earl is telling the truth as he sees it, but Members on this side of the Committee find it difficult to believe that the Electoral Reform Society would accept such a thing as this.

Baroness Blatch

I happen to come from a part of the country where this system is already in operation. The objective of the exercise is to see that the maximum opportunity is given to every single individual to exercise his vote. It is possible that, when such individuals are called upon by that independent body, they will say that they have positively chosen not to vote and that is an end to it. It may well be that a particular tenant has not received a ballot form, in which case it will be up to the Electoral Reform Society to see that he or she receives a ballot form. It may well be that the tenant does not understand how to exercise the vote. This covers the point mentioned earlier by Members of the Committee who are worried about the inadequacy of people in connection with knowing how to exercise their votes. It is not concerned with canvassing or the presentation of a case because all that goes before the vote. The system has worked perfectly properly and people did vote as a result of being called upon independently by the Electoral Reform Society which saw to it that everyone had a chance to exercise the vote.

The Earl of Caithness

I am grateful to my noble friend who perhaps explained the position better than I. The Electoral Reform Society is not there to put views on behalf of the applicant or the landlord: it is there to collect the vote and to make sure that everyone has the opportunity to vote. Surely that is right for the tenants so that they all know what is going on. If they do not happen to be there on a particular day it does not mean that they do not have the opportunity to vote. Our proposals allow an independent teller to go back to a person and to tell the tenant that there is the opportunity to vote. Does the noble Lord object to that?

Lord Jay

Can we be absolutely clear about one fact! Did we rightly understand the noble Earl to say that the Electoral Reform Society will be paid by the applicant? Presumably the applicants in this case are the relevant landlords. Surely it would be grossly improper for one of the parties to the argument to be paying the independent body which is supposed to be conducting the election. Although I am sure that the Electoral Reform Society is the most independent and honest authority that we have, a great many people will not believe that this is a system of which Parliament could approve.

Lord Harmar-Nicholls

I do not know whether it is deliberate or inadvertent, but Members of the Committee on the other side of this Chamber are making a meal out of something that does not exist. They are viewing this proposal as though it were a general election or a local council election. If that were true, their reactions would be sound; but this is not a general election. Many people will not know that there is to be a vote as to whether a block of property is to be taken over. There will be no headlines in the newspaper. There will be no television broadcast to alert people to the election. I should have thought that the Government's proposal carries out what Members opposite have said they wish to ensure; that is, if people do not want to leave their local authority landlord they need not do so.

If people feel strongly about the matter and know that there is an election, they may want to vote so as to achieve a big majority and gain their objective. The election will not be well known. It will be sectional. It may not raise a ripple outside those involved. If there is to be a genuine decision the Electoral Reform Society, or anyone who is to count the votes, will have a duty to let those allowed to vote know that there is to be a vote. What happens afterwards will be nothing to do with the Electoral Reform Society. It will be concerned with the decision only. Members of the Committee, whether by accident or design, should not approach the detail, and it is only detail—

Lord Graham of Edmonton

Not to the tenants.

Lord Harmar-Nicholls

It is only a detail. People who do not want to change need not do so, but those who do want to change can. Noble Lords should not view this proposals as though they were fighting an election.

Lord Stoddart of Swindon

Perhaps I may reply to the question that the Minister asked as to whether I objected to the Electoral Reform Society letting people know that there was a vote, and so forth. I have not objection to that, but I am surprised that the Electoral Reform Society would agree to have anything to do with such a tainted electoral system.

The Earl of Caithness

The contract into which the Electoral Reform Society will enter with the applicant will be the same as the contract into which it enters with trade unions when it comes to a ballot.

Noble Lords

No, no.

The Earl of Caithness

That is absolutely true. A trade union pays the Electoral Reform Society, but that does not threaten the society's independence. I cannot see why an applicant paying for the same contract should threaten its independence.

Lord Underhill

Can the Minister give me one example of the Electoral Reform Society following up members of a trade union who have not taken part in a ballot?

The Earl of Caithness

As I understand it, the contractual relationship will be no different from that with trade unions. There will be an opportunity to vote over a period. There will be every opportunity for the vote to be drawn to the tenants' attention. We do not want, as the Committee does not want, tenants in an area that an applicant wishes to purchase from a local authority to find that there has been a ballot without their having had an opportunity to vote.

Baroness Seear

The Minister's analogy with a trade union is a false one. It is fine for a trade union as such to pay the Electoral Reform Society; it is not right for one of the contestants to do so. That is the difference. In this case. one of the competitors pays the Electoral Reform Society. It is the union as a whole that pays, not Mr. Scargill against whatever his name was. It would have been extraordinary if it had been Mr. Scargill who paid the Electoral Reform Society. The Minister is proposing that Mr. Scargill should pay the Electoral Reform Society. The whole of this Bench would object to that.

The Lord Bishop of Southwark

There is one aspect of this matter that it is important to bring out. I may have misunderstood the argument, which I find difficult and confusing. if I have read the proposed legislation correctly, Clause 102 states that people who do not vote shall he taken to have accepted. That provision puts this exercise into a different category because, contrary to what is being said, it means that urging people to vote may not necessarily be in the best interest of the applicant who proposes to take over the housing. We must be clear that this is not a straightforward you win he loses proposition. That is the point that many of us find difficult to understand and accept.

I can understand the argument that where there is a vote there should be a majority of those voting. When the issue is important and we want to make a substantial change, in our Church we say that a two-thirds majority must be secured because it must carry the good will of a large number of people. We accept that those who do not vote do not do so for reasons that we cannot fully understand or explain. They may not be bothered or they may be unable to do so. They may only be a relatively small number of people, but to say that those who do not vote shall be counted as having voted in favour is a different matter. It is that issue which bothers many people. It bothers those who understandably have enormous fear about security of tenure and affordable rents, because neither matter is as firmly dealt with on the face of the Bill as many of us would like.

Baroness Denington

It is obvious that great concern is felt on this side about the principle we started to discuss some time ago—the kind of vote that is to be taken and how it is to be taken. The concern felt here represents the concern of hundreds of thousands of people. There are hundreds of thousands of tenants who are as concerned as anyone in this place. That concern is felt not only on this side of the Chamber but on the other side as well.

We are talking about democracy. We are talking about people's lives. We are talking about ordinary people to whom the landlord is of considerable importance. He influences their lives. They look to him to fix the rent. We all know that for ordinary people their rent is a basic and important factor in their lives. People hope that their landlord will consider their circumstances and help. Rents are going up. That is another factor which should be in all our minds. Rents are bound to go up under the Government's legislation. That will be a matter of concern.

What worries me is that unless the vote—this is where we started this afternoon—is the ordinary democratic process of a majority vote, what will be said—surely the Government do not want this—is that there has been gerrymandering. Do the Government really want to start on this basic change for thousands of people with an undercurrent that will become a most powerful one and an accusation that they have simply gerrymandered the whole proposal? I beg the Government to think hard about this matter.

As many Members of the Committee know, I have spent many years working in local government housing. On ceasing to be a member of the GLC I still loved housing. I feel that it is a basic and important factor in everyone's life—as indeed it is. We all know that it is. I therefore became a member and was active on the committee of a number of housing associations. I say a number because there are small associations and large ones, and I wanted to see how the whole range operated.

I beg the Government to think again about this matter, even if it means taking it back today to be reconsidered. I say to them: do not start a new and perhaps very important experiment—I think it is important—in housing on the wrong footing affecting such issues as whether it should be run by local authorities, by housing associations, or whether housing associations should be allowed to grow as large as local authorities—a point that also worries me—because that is what they are doing.

4.30 p.m.

The Earl of Caithness

I should like to answer the right reverend Prelate and the noble Baroness who both raise important points. Although the argument of the noble Baroness carried much force, she ignored one vital point. That is the great difference between what we are talking about today and, for example, what we discussed when the education Bill was before the Chamber; namely, that the vote is not binding on those who do not want it. They have the opportunity to opt back.

For example, if, as tenant of a council house, an application is made for that house and you say "No, I do not want it", your house will be excluded from the proposal. In other words, it will not be transferred and you will still be a direct tenant of the local authority. However, in a block of flats the situation will be different. We do not have flying freeholds in England. In that case, if the vote is for a transfer but you say that you do not want it, the applicant will take over the freehold and give a lease back to the local authority from whom you will take a lease. Therefore your lease will remain under the control of the local authority. So, either way, whether you are the tenant of a flat or house you do not need to transfer to a local authority if you do not wish to do so. That is the great difference. That is the true democracy of the voting system that we have proposed.

Lord Ross of Newport

Will the Minister answer a point to which I wish to come back? Is he aware that meetings are already taking place which are turning into political dog fights and that tenants are becoming totally turned off and leaving them? Surely those are the people who will abstain. The Minister is telling the Committee that people who abstain, when the majority of those voting choose to change the landlord, will go automatically but that if they wish to stay with the council they must positively vote and say that they wish to do so. I say to him that many people will be turned off because of the dog fights which will take place. These may not happen between political parties; they could involve a council and private tenants. So there will be a great battle. There will be persuasion, knocks on doors and people saying, "Come on, come our way". There may even be a few bribes about. We do not know. Therefore, such people will say, "I do not want anything more to do with this. I am fed up with it and I shall not vote". By so doing, they automatically vote in favour of the proposal. That is the truth of the matter. Surely, if they do not vote they should be taken as having voted against the proposal.

The Countess of Mar

I have listened most carefully to the debate. There are two points I should like to raise with the Minister. First, I have not understood why the Government object to a simple majority in favour of changing a situation. If we draw an analogy with the argument of the noble Lord, Lord HarmarNicholls, when he said that the Opposition Benches were arguing on the basis of a general election, can he say what board of directors would throw the chairman off the board on the number of "Don't know" votes, including them with the "Yes" votes if that happened to produce a majority?

Secondly, the noble Earl said that those council tenants who do not wish to be transferred need not be. In that case, why on earth must we have this rigmarole? Why does the applicant not go and knock on the council tenant's door and say, "Do you want to be transferred to me?" If the council tenant says, "No", he simply goes away; but if the council tenant says "Yes", he takes over the lease?

The Earl of Caithness

I wish the solution were as simple as that. Indeed, as the noble Lord, Lord McIntosh of Haringey, knows only too well, it is not so simple. It is right that both sides should have the opportunity to put a fair case to the tenant. As the noble Lord, Lord Callaghan, said, perhaps in some unfortunate cases people need to be told clearly and in simple terms what the consequences are. That is absolutely right: both sides should have an equal opportunity to do so. However, it is also right and surely the fairest solution in such a situation where one has a group of tenants—one has to start with a group of tenants who wish to transfer and move out of local authority control—to encourage those people, but at the same time give the true democratic choice to those who do not wish to do so. So that having given them all the information they have the right to say, "No I have heard what you say and I want to stay with the local authority". That is what the Bill provides. Surely that is the right way forward.

I turn now to a point that I wish to look at most carefully. It arose as a result of remarks by the noble Lords, Lord Ross of Newport and Lord McIntosh of Haringey. I should like to consider further whether we ought to have a minimum turn-out figure before tenants' choice is implemented. It is an aspect I should like to look at because that, combined with the safeguards which we have provided for in the Bill and by regulations, will, I am sure, give the tenants the rights which they all deserve.

Lord Parry

A few moments ago when I gave way to the right reverend Prelate I heard him say that he was confused and could not understand aspects of the matter. We have also heard a former Prime Minister speak most movingly about the people in his former constituency. I have been approached by several councils in the rural areas of Wales who are equally concerned. It seems most astonishing, in view of the amount of information being given to us, that we should all be so surprised. I even gained the impression that the Minister was thinking on his feet when responding to the questions raised. If that is the case, surely the people living in council houses who are approached during various elections by many people, at a time when the appearance of someone at your front door is not something you take lightly, will be confused and bothered.

Perhaps I may also respond to the analogy with government and local government elections which I think is perfectly made in this gender. If the teller of local government elections was seen to be paid by one of the political parties contesting them, would our system of democracy be held to be as fair as it has always been?

Lord McIntosh of Haringey

We have had a long debate on this matter during which four major strands have emerged with which I shall deal in order of increasing importance. First, there is the question of the propriety of the grouping of the amendments. Second is the issue of the independent tellers in any ballot. Third is the issue as to whether individual tenants can in fact opt out of any decision which has been taken. Fourth—which I still feel is the most important—is the question of the way in which the ballot is decided.

I shall deal first with the doubts which the Minister raised concerning the propriety of dealing with the question of the ballot under Clause 92. As I said earlier, the Government's proposals were advertised a year ago under the heading Tenants' Choice. That is not what the Bill says. It states: This Part has effect for the purpose of conferring on any person who has been approved under section 93"— in other words, the putative landlord— the right to acquire from a public sector landlord various properties. In other words, what was advertised as being tenants' choice turns out to be landlords' rights—a switch sell if ever there was one.

Clause 92 implies that Clause 93, which is about the persons by whom such a right may be exercised, is so important that it ought to be referred to in the first clause of the part. We think that there are various other safeguards which are also so important that they should be referred to in this clause of the part. One of them is the question of the ballot, which we are debating now. The second, which we shall be debating under Amendment No. 125J, is the question of what happens when you have an area of great homelessness or particular housing need. The third is the question of whether those who want to stay with the local authority have a secure right to do so. The fourth, which is under Amendment No. 125L, is the question of whether there is actually going to be any money paid to a local authority by the people who are taking over the properties.

We think that all of those are as important as the question of the persons by whom the right may be exercised, and it is the only way in which there can be any serious attempt to justify the title of the Government's Green Paper of a year ago. If it is to be really tenants' choice, in our view all of those things must be safeguarded, and they must be safeguarded in the first clause in the part where the whole issue which the Government are putting before us is contained.

The second issue is that which has become the question of the Electoral Reform Society, although I do not think the society would like it to be seen in that way. I do not want to follow the Minister into the pit which he has dug for himself, but there are a number of questions still unanswered by this debate. What is it that the Electoral Reform Society has agreed to do? What is it that the Electoral Reform Society has agreed with? Has the Electoral Reform Society positively agreed with the voting procedure being put forward in this Bill? I doubt it. The Minister used the words "chase up". Has the Electoral Reform Society or any other body of independent tellers agreed to chase up non-voters when they are being paid for by one side in the argument?

If that is the case, I think the Minister will wish to make a more definite statement which he will no doubt agree with the Electoral Reform Society before making it. I believe he will wish to do so before we come back to this matter at Report stage because he has left this Committee with a thoroughly confused impression—and to some extent the confusion must be in his mind as well as in the minds of other noble Lords—about what the Electoral Reform Society has said, what the Electoral Reform Society should say, and whether it is supporting these aspects of the Bill.

The third matter is one to which great attention was paid by the noble Lords, Lord Campbell of Alloway and Lord Renton, and indeed by the Minister in his reply. They said, "It's all right. It doesn't matter if this is a totally new way of conducting a ballot. It doesn't matter if you are counting all the 'don't knows' in with the 'yes's' because the individual tenants have the right after the ballot to opt out".

That is not what the Bill says. In Clause 99 the Bill says: The Secretary of State may make regulations imposing the following requirements in relation to any acquisition". That is the exclusion from the acquisition. If the Minister and the noble Lords, Lord Campbell of Alloway and Lord Renton, are saying that "may" should read "shall", we welcome them to our side and welcome their support for Amendment No. 132V, which says exactly that. Even if we achieve agreement to Amendment No. 132V—and it looks as though we are going to, so we shall make some progress—I do not accept that we have a right to introduce a totally unprecedented form of balloting.

That brings me to the fourth and most important part of my argument, because it is quite clear from what has been said that those not voting for whatever reason—whether it is because they are sick, old, disabled, or have moved away; or they could be Jehovah's Witnesses and not wish to take part in any ballot—are going to be deemed to have voted for the change. The noble Countess, Lady Mar, asked whether that would be appropriate in the election of the chairman of the board of a public company. I ask Members of the Committee whether it would be appropriate in the voting in this Chamber. We spend more time in the "Contents" Lobby than noble Lords opposite. We should be very happy if those who had not voted were deemed to have voted with us, content for any change in the legislation. No, this simply will not wash. One cannot introduce a new system of voting which puts the onus of defence on those who wish to stay where they are in this way.

4.45 p.m.

The Earl of Caithness

Perhaps on the question of precedent the noble Lord would remind the Committee of the voting procedures in Section 5 of the Housing and Planning Act 1986.

Lord McIntosh of Haringey

I should be delighted if the noble Earl, who is clearly better briefed than I am, would care to do so. He might also like to remind us about the conditions in the 1980 Act which I think are also relevant.

The Earl of Caithness

I said right at the beginning that the process we had proposed was precedented. It was precedented in the Housing and Planning Act 1986.

Lord McIntosh of Haringey

That is a statement; it is not a defence, is it? Since I do not have the papers in front of me I am bound to accept that there may be some precedent for it. It does not make it right. Clearly the views that have been expressed from many sides of the Committee show that this is an unsatisfactory procedure, one which is a denial of democracy and one which has caused justified fear among many millions of people—and here I agree strongly with my noble friend Lady Denington—who know that a rent is an important part of their income and that security of tenure is an important part of the quality of their life. I think it would be irresponsible of me if I did not seek the opinion of the Committee.

Lord Parry

On the matter of precedent-I am sorry; I obey my noble friend on the Front Bench.

4.48 p.m.

On Question, Whether the said amendment (No. 125G) shall be agreed to?

Their Lordships divided: Contents, 136; Not-Contents, 183.

Addington, L. Leatherland, L.
Airedale, L. Listowel, E.
Allen of Abbeydale, L. Llewelyn-Davies of Hastoe, B.
Amherst, E. Lloyd of Kilgerran, L.
Ardwick, L. Longford, E.
Attlee, E. Lovell-Davis, L.
Aylestone, L. McCarthy, L.
Banks, L. McIntosh of Haringey, L.
Barnett, L. Mackie of Benshie, L.
Beaumont of Whitley, L. McNair, L.
Blackstone, B. Mais, L.
Blease, L. Mar, C.
Blyth, L. Masham of Ilton, B.
Bonham-Carter, L. Mayhew, L.
Boston of Faversham, L. Mishcon, L.
Bottomley, L. Molloy, L.
Briginshaw, L. Moran, L.
Brooks of Tremorfa, L. Mulley, L.
Callaghan of Cardiff, L. Murray of Epping Forest, L.
Carmichael of Kelvingrove, L. Nicol, B. [Teller.]
Carter, L. Oram, L.
Cledwyn of Penrhos, L. Parry, L.
Cocks of Hartcliffe, L. Peston, L.
Craigavon, V. Phillips, B.
Croham, L. Pitt of Hampstead, L.
Dacre of Glanton, L. Ponsonby of Shulbrede, L. [Teller.]
David, B.
Davies of Penrhys, L. Porritt, L.
Dean of Beswick, L. Prys-Davies, L.
Denington, B. Rea, L.
Diamond, L. Reilly, L.
Donaldson of Kingsbridge, L. Richardson, L.
Donoughue, L. Ritchie of Dundee, L.
Dormand of Easington, L. Rochester, L.
Elwyn-Jones, L. Ross of Newport, L.
Ewart-Biggs, B. Rugby, L.
Ezra, L. Sainsbury, L.
Falkender, B. Scanlon, L.
Falkland, V. Seear, B.
Fisher of Rednal, B. Seebohm, L.
Fitt, L. Serota, B.
Gallacher, L. Shackleton, L.
Galpern, L. Shannon, E.
Gladwyn, L. Shaughnessy, L.
Gloucester, Bp. Shepherd, L.
Graham of Edmonton, L. Simon of Glaisdale, L.
Greenhill of Harrow, L. Somers, L.
Greenway, L. Southwark, Bp,
Gregson, L. Stallard, L.
Grey E. Stedman, B.
Halsbury, E. Stewart of Fulham, L.
Hampton, L. Stoddart of Swinton, L.
Hanworth, V. Strabolgi, L.
Harris of Greenwich, L. Taylor of Blackburn, L.
Hayter, L. Taylor of Gryfe, L.
Houghton of Sowerby, L. Taylor of Mansfield, L.
Hunt, L. Tordoff, L.
Hylton-Foster, B. Turner of Camden, B.
Irvine of Lairg, L. Underhill, L.
Jacques, L. Wallace of Coslany, L.
Jay, L. Wedderburn of Charlton, L.
Jeger, B. Whaddon, L.
Jenkins of Hillhead, L. White, B.
Jenkins of Putney, L. Williams of Elvel, L.
John-Mackie, L. Willis, L.
Kearton, L. Wilson of Rievaulx, L.
Kennet, L. Winchilsea and Nottingham, E.
Kilmarnock, L.
Kinloss, Ly. Worcester, Bp.
Abinger, L. Auckland, L.
Alexander of Tunis, E. Balfour, E.
Alexander of Weedon, L. Barber, L.
Allerton, L. Bathurst, E.
Arran, E. Beaverbrook, L.
Ashbourne, L. Beloff, L.
Belstead, L. Lothian, M.
Bessborough, E. Lyell, L.
Birdwood, L. McAlpine of Moffat, L.
Blatch, B. McFadzean, L.
Boardman, L. Mackay of Clashfern, L.
Borthwick, L. Macleod of Borve, B.
Boyd-Carpenter, L. Malmesbury, E.
Brabazon of Tara, L. Manton, L.
Brightman, L. Margadale, L.
Brookeborough, V. Marley, L.
Brookes, L. Marshall of Leeds, L.
Brougham and Vaux, L. Maude of Stratford-upon-Avon, L.
Broxbourne, L.
Bruce-Gardyne, L. Merrivale, L.
Butterworth, L. Mersey, V.
Caithness, E. Middleton, L.
Camden, M. Monk Bretton, L.
Cameron of Lochbroom, L. Montgomery of Alamein, V.
Campbell of Alloway, L. Morris, L.
Campbell of Croy, L. Mountgarret, V.
Carnegy of Lour, B. Mowbray and Stourton, L.
Carnock, L. Moyne, L.
Carrick, E. Munster, E.
Carthcart, E. Murton of Lindisfarne, L.
Chelmer, L. Nelson, E.
Chelwood, L. Norfolk, D.
Clinton, L. Northesk, E.
Clitheroe, L. Nugent of Guildford, L.
Coleraine, L. Orkney, E.
Colnbrook, L. Orr-Ewing, L.
Cottesloe, L. Peel, E.
Craigmyle, L. Pender, L.
Crawford and Balcarres, E. Penrhyn, L.
Cullen of Ashbourne, L. Peyton of Yeovil, L.
Daventry, V. Platt of Writtle, B.
Davidson, V. [Teller.] Portland, D.
Deedes, L. Portsmouth, E.
Denham, L. [Teller.] Reay, L.
Digby, L. Renton, L.
Donegall, M. Renwick, L.
Dulverton, L. Rippon of Hexham, L.
Dundee, E. Rochdale, V.
Elibank, L. Rockley, L.
Ellenborough, L. Rodney, L.
Elles, B. Rollo, L.
Elliot of Harwood, B. Romney, E.
Elliott of Morpeth, L. Rootes, L.
Elphinstone, L. Rotherwick, L.
Enniskillen, E. Sackville, L.
Erroll of Hale, L. St. Davids, V.
Faithfull, B. St. John of Fawsley, L.
Fanshawe of Richmond, L. Saint Oswald, L.
Ferrers, E. Saltoun of Abernethy, Ly.
Fortescue, E. Sanderson of Bowden, L.
Fraser of Kilmorack, L. Savile, L.
Gainford, L. Selkirk, E.
Gardner of Parkes, B. Sempill, Ly.
Gridley, L. Shrewsbury, E.
Grimthorpe, L. Skelmersdale, L.
Hailsham of Saint Marylebone, L. Southborough, L.
Stafford, L.
Harmar-Nicholls. L. Stanley of Alderley, L.
Harvington, L. Stevens of Ludgate, L.
Havers, L. Stockton, E.
Hemphill, L. Stodart of Leaston, L.
Henley, L. Strange, B.
Hesketh, L. Strathcarron, L.
Hives, L. Strathclyde, L.
Holderness, L. Strathspey, L.
Home of the Hirsel, L. Sudeley, L.
Hood, V. Suffield, L.
Hooper, B. Swansea, L.
Ingrow, L. Swinfen, L.
Ironside, L. Swinton, E.
Jenkin of Roding, L. Terrington, L.
Johnston of Rockport, L. Teviot, L.
Joseph, L. Teynham, L.
Killearn, L. Thomas of Gwydir, L.
Kintore, E. Torphichen, L.
Kitchener, E. Torrington, V.
Lauderdale, E. Trafford, L.
Long, V. Tranmire, L.
Trefgarne, L. Westbury, L.
Trumpington, B. Wolfson, L.
Ullswater, V. Wyatt of Weeford, L.
Vaux of Harrowden, L. Young of Graffham, L.
Waldegrave, E.

Resolved in the negative, and amendment disagreed to accordingly.

4.57 p.m.

[Amendment No. 125H not moved.]

Lord McIntosh of Haringey moved Amendment No. 125J: Page 69, line 12, after ("landlord") insert ("in a designated area").

The noble Lord said: With Amendment No. 125J I should like to speak also to Amendment No. 130A. However, before doing so perhaps I may follow up a point which arises from the preceding debate. I suggested to the Minister that it would be appropriate, in view of the concern that had been expressed about the role of the Electoral Reform Society, that he should seek the opportunity to make a statement to the Committee before the matter comes back at the Report stage, and that such a statement should have the agreement of the Electoral Reform Society. Perhaps the Minister will indicate whether such a statement can be made and be good enough to respond to that question now.

The Earl of Caithness

I can tell the Committee that we have had discussions with the Electoral Reform Society on the practical aspects of the consultation and voting systems. The society is content to take on the operational role that we have in mind and we welcome its co-operation and the practical advice it has given us on this matter.

Lord Mayhew

I wonder whether the Minister will bear in mind that it might easily be that the Electoral Reform Society has not fully understood the significance of what it has taken on. Perhaps if it were shown the debate we have had this afternoon in the Committee it might wish to reflect on its position. All of us who have had to fight parliamentary or local government elections may have the advantage of the Minister here. We know that a big poll always helps one side or the other. We also know that there are certain sections of the constituency where one wants a big poll and certain other areas of the constituency where one wants a small poll. I think this is a commonplace to all old hat politicians, of whom, if I may say so, there are many, at least on this side of the Chamber.

I therefore ask the Minister—I speak also as a member and supporter of the Electoral Reform Society—whether he will draw the attention of the society to the discussion we have had this afternoon and come again before the Chamber with a statement.

The Earl of Caithness

We shall naturally be holding discussions with the Electoral Reform Society. I am sure that the society will read what the Members of the Committee have said with interest. We do not want the society involved in any political role as regards the applicant or the landlord. We want the society to be an independent vote-taker. But I am sure that this matter will come up again at a later stage.

Lord McIntosh of Haringey

I am grateful to the Minister for the normal courtesy of his reply. He goes a very small distance along the way I was urging him to move. I think it is right that before we come to consider Part IV of the Bill on Report the Committee should be in no doubt whatsoever as regards what the Electoral Reform Society has agreed to, what its role should be and how it should be exercised, as well as who pays the society. I do not want to bring the Minister to his feet again unless he wishes to add anything further—

The Earl of Caithness

Just to put the matter in perspective, I mentioned the Electoral Reform Society but I qualified that by the words "independent teller". It may be the Electoral Reform Society but that is not necessarily the case. I simply wished to clarify that point for the Committee.

Lord McIntosh of Haringey

In view of all of that, I think it is appropriate that I should give the Minister notice that I shall seek some way of providing on the Order Paper an opportunity for the Chamber to debate this matter, perhaps in the form of an Unstarred Question, before the Bill comes back on Report. At that stage the Minister will be able to consider his response perhaps more than he has been able to now.

I wish to speak to Amendment No. 130A with Amendment No. 125J. Amendment No. 125J is another of our attempts to qualify Clause 92. As I have said, Clause 92 gives rights not to tenants but to putative landlords; those who want to apply for the right to take over housing estates from secure tenants in local authorities. We believe that this right being given to landlords, as against the rights of secure tenants, is so wide reaching and so important that it should be qualified in this clause. We hoped that the Committee would agree that it should be qualified as regards the nature of the ballot on which it is to be based. But, unfortunately, we saw again that a number of Members of the Committee who are not perhaps all that frequent attenders of the Chamber were persuaded to come and vote on this matter and that, despite the very good vote that we secured for our amendments, the Committee did not see fit to agree to them.

I think that anybody who has had the close connection with local authority housing which a number of my noble friends and a number of other noble Lords have had will appreciate this. It is of very great importance indeed that nothing should be done to make more difficult the responsibilities of local authorities in areas of housing stress when they deal with the problems of homelessness, problems of shortages of available housing for rent and problems of very high housing need. We are proposing in these amendments that there should be an exclusion from the provisions of this part in the case of those areas where an authority is experiencing homelessness above the national average, where housing need is above the national average and where the available housing for rent is below the national average. In Amendment No. 125J we are calling those areas "designated areas". I apologise to the Committee for that shorthand definition.

Nevertheless it is clear that there are very great differences between one housing authority and another, not only in terms of the size and the quality of the stock which they can command but in terms of the need for public sector housing which exists in those areas. It is also clear that the two very often go together; in other words in the areas of the worst housing, the greatest gross deficiency in dwellings to the number of households and where the condition of housing is the worst, the greatest housing need exists because those are the areas of greatest social need. The two go together. Our poorest people live in areas which have historically the worst housing. As we know, they have much greater housing need.

Local authorities already have unequal resources to deal with these problems. One of the difficulties we have been facing in housing policy ever since the war is the inequalities of responsibilities, of opportunities, of resources as well as the demand between one local authority and another. But at least when we are dealing with local authorities there is some attempt in the government assessment of the grant to be given from central government to local authorities to rectify these imbalances. Government grant is given in accordance with general need in an area and not just in accordance with housing need. What is missing entirely from the Bill is any such safety net for the new landlords who will be taking on the responsibility not only of existing secure tenants but ultimately, in due course, of rehousing and the new nominations.

We are putting down these new amendments because we are concerned about what will happen to the homeless under these circumstances. What will happen to those who lose their right to a secure tenancy and who are no longer able to pay the rents which are now to be demanded, whether they are housing association rents on the existing basis or housing association rents on the basis which will be possible under Part III of the Bill? No duties are placed on the new landlords to rehouse the homeless. All that is suggested in a circular from the Department of the Environment is that local authorities may wish to make arrangements with the new landlords or the housing associations or whoever it may be to make provision for the homeless and those in the most desperate housing need. But from where will the money come? To whom will it be paid? How will it be allocated? How much money will there be for this purpose? Those are all questions on which the Bill is completely silent.

It is quite inadequate for a statement of intent, such as is contained in Clause 92, to be silent on this matter. If it is accepted that where there are areas of above average need and below average provision a local authority is to continue to have responsibilities, even if exercised indirectly through these new landlords, would it not be much more efficient and effective for local authorities to continue to exercise those responsibilities directly? In other words, as these amendments say, should not areas of high housing need, areas of high homelessness and areas of below average housing provision be excluded from these clauses?

Let us at least give the Government the benefit of the doubt. Let us tell them to carry on with their proposals where they do not pose a serious risk to people's livelihood and quality of life. But let us not tell the Government to here and now take risks with the quality of life of those who are in most need in our society. We do not think that the Government would seriously wish to take those risks and we cannot believe that the Government would seriously wish to resist these very reasonable and modest amendments. I beg to move.

Lord Campbell of Alloway

What is to happen to those on the housing list? I have sent a private note to my noble friend, but he probably will not have had time to read it. That is a matter of some concern.

Quite apart from the concept of designated or non-designated areas, the amendment raises a matter of general concern. I have been unable to discover in the Bill how this problem is to be dealt with. Is it to be assumed for example that there are to be some kind of transitional provisions on humanitarian grounds? How are they to operate? Will those on a housing list be entitled to be consulted in a ballot? I assume that those on a housing list will be offered accommodation as council tenants when the time comes, but is that right? Is that a correct assumption? How is one to marry the type of dual control between those to be housed by the council and those to be housed by other means? Will not the stock of housing available for those seeking to get on to housing lists become depleted?

I only ask those questions because I am sure that my noble friend the Minister has a perfectly satisfactory answer. No doubt the Government have given consideration to all those aspects of the problem. I hope that my noble friend the Minister will be able to fill in the gaps in my knowledge of the problems. It is a matter which was touched upon and spoken to by the noble Lord, Lord McIntosh of Haringey. Quite apart from the question of designated or non-designated areas, the amendment raises a question of general concern.

Lord Ross of Newport

The noble Lord, Lord Campbell of Alloway, is right to raise those questions. However, I do not for one minute expect an answer from the Minister because I do not believe that there is an answer at present. We are just not building enough houses to rent.

I welcome the amendment because it is at least an attempt to achieve what some of us involved in housing—from all political parties—have been pressing for. In the other place I and colleagues from both the Conservative and Labour Parties suggested that we ought to consider housing on a regional basis and identify the areas of greatest need. The greatest need at present is in London, the South and the West of England. I do not say that there are not other areas where there are housing needs; people could probably point to East Anglia and no doubt there are other areas. But in parts of the North of England there is less of a problem. Not so very long ago one could get a council house in Durham immediately. There are areas where there is not the great pressure on housing that there is in this part of the country in particular. It seems to me totally wrong. We have not had an answer, and I do not believe that we shall get an answer. I do not believe that the Minister will accept the amendments. What will happen to the homeless?

I hope and trust that the Minister has just received a copy of the SHAC and Shelter booklet entitled An Act of Compromise which is taken from something which I said when I sponsored the Homeless Persons Bill. I was not satisfied with it. It was an act of compromise. People to the left of my political views did not think that I had gone far enough and a large number on the other side thought that I had gone far too far. In fact the Act has stood the test of time despite the promises of the former Secretary of State for the Environment, Mr. Michael Heseltine, to review it. He reviewed it and left it largely alone. It is apparently under review again and I am worried that it will be weakened.

How on earth does one deal with the 100,000 or more people who are now homeless? I heard the debates which took place in this House when I first entered it. I remember the noble Lord, Lord Soper—I do not believe that he is present now—making great speeches on the issue, and quite rightly so. Homelessness has doubled in the past 10 years. We read today that Mr. Peter McGurk, Director of the Institute of Housing, thinks that between 50,000 to 75,000 more people will become homeless over the next few years after the Housing Bill becomes an Act.

I hope that I am not alone in saying that I am not prepared to live in a country where I shall see people on the streets and begging. That is the point that I used to put to those who opposed me when I was trying to put the Housing (Homeless Persons) Act on the statute book. I asked whether chairmen of housing in places such as Bournemouth or Edinburgh were prepared to see people out on the streets. That is a question which we have to consider very seriously.

I believe that the Government want local authorities to have responsibility for those who are homeless and who have priority—those with children, the elderly or those who for some other reason are unable to look after themselves. They will be put into bed and breakfast accommodation. What happens after that? Who pays the bill? Who will pay the huge sums of money which will be needed under housing benefit?

Earlier in the debate this afternoon I related what is happening in my part of the world where the North British Housing Association has taken over the old GLC properties. The people who occupied those properties in the London area were given the opportunity to live in the country in places like the Isle of Wight. Some opted to go and already had connections with the area. The other day when I was collecting for the blind I met one of those people who was a former Ford worker at Dagenham. He moved about 10 years ago. He has looked after himself; he has a pension from the Ford Motor Company and an old age pension. A year ago when the cuts were made he lost what little housing benefit he received. He now faces a rent of over £30 a week. That would come to about £35 a week if it was registered under the new regime in the North British Housing Association. That will take between 35 per cent. and 40 per cent. of his net income. Will he be able to claim that from housing benefit? We do not know.

How long will the Treasury stand the huge demands that will be made on housing benefit? I do not believe it will do so. We are now being told that local authorities have money in their coffers from the sale of council houses. That money must go towards the paying of housing benefit. Are we to make hundreds of thousands of people queue for housing benefit because they will be priced out of the market?

In my part of the world, and no doubt in other areas, the cheapest property is probably a one-bedroomed flat at about £38,000. A terraced house now costs anything over £50,000. Those prices will not come down. That puts the opportunity of buying property out of reach of my own son earning £10,500 a year, even if his wife managed to pick up some money too, although they have two small children. It excludes vast numbers of the younger generation from the property market. They cannot afford to buy, or if they are stupid enough to buy (and I see that the Leeds Building Society will lend up to three and a half times one's net income) it is very dangerous when interest rates are so high. I regret the pressures placed on people to buy property.

Now we also see the elderly facing huge rent demands. If the amendments are not accepted the country will face a very substantial housing problem. Some people, young and old alike, will face a desperate situation. Therefore I support the amendments, because they are an attempt to put the resources where the need is greatest. We will have to build houses. I am sorry for the Minister who now has responsibility for housing because it will have to be done with public money in one way or another. That money should be put into bricks and mortar instead of used to pay out a great deal of benefit.

Let us build the houses and cure the problem once and for all. We know that the birth rate has fallen and that there will be fewer people requiring housing over the next few years. We have a real chance of solving our housing problem in this country. If we were to proceed on a reasonable basis I think that we might succeed. I beg the Minister at least to listen.

The Earl of Caithness

The noble Lord, Lord Ross of Newport, knows that I have listened very carefully to what he has said. I look forward to the opportunity of having a discussion with him and indeed with all Members of the Committee in a general debate on this subject in the future. We can then discuss housing in its broadest sense. I disagree fundamentally with some of the assumptions of the noble Lord, Lord Ross, in justifying his case.

Addressing the amendment of the noble Lord, Lord McIntosh of Haringey, I believe that there are a number of unspoken assumptions in his proposed new subsection (6). I believe that he highlighted some of those in the arguments which he put forward. It is assumed that as a consequence of tenants' choice homelessness will increase, less housing need will be met, and the proportion of housing available for rent will fall. First, I cannot stress too strongly that tenants' choice will not make anyone homeless.

As regards existing tenants, it is a clear and central principle of the scheme that no secure tenant who does not wish to do so will have to transfer against his or her will. Those who do transfer will do so to assured tenancies which give security of tenure; and they will transfer only after they have seen a contractually-binding offer from the applicant about the rents he is asking them to pay after transfer and the arrangements for reviewing them. There is not the remotest threat here of homelessness. I stress this again because unfortunately many tenants—including elderly people and others who could well do without needless worry—have been unnecessarily alarmed by misinformation which they have been given on this point.

Baroness Seear

Perhaps I may interrupt the noble Earl on this question of assured tenancies. Is it not the case that they are only assured if the tenants can pay the increase in rent which the landlord is entitled to introduce after a short period of time? That is "assured" in inverted commas, if I may say so.

The Earl of Caithness

I intended to come to the question of rent in a moment. We do not believe that the tenant's choice will reduce the availability of rented accommodation to house homeless persons or others in the future. It is a firm principle of the scheme that transferred housing should in all normal circumstances be retained for continued renting to people who need it at prices that they can afford. Perhaps that covers the point raised by the noble Baroness.

Perhaps I may explain further how these principles will be put into practice. Clause 93(3) requires the Housing Corporation, and in Wales, Housing for Wales, to establish criteria that candidates for approval under the scheme must meet. These criteria, on which the corporation, as many noble Lords will know, consulted interested parties in draft on 3rd August, will include a requirement for applicants to undertake to retain dwellings acquired under tenants' choice for letting at rents affordable by those in low-paid employment.

The draft criteria would also require applicants to comply with the corporation's guidance for tenants' choice landlords on housing management practice; in other words, the embodiment for such landlords of the tenants' guarantee that we have been developing on a broader front from housing association tenants. This guidance confirms the approach to rents in the criteria themselves, acknowledging that rent levels will often need to be below market levels. It confirms: Tenants' choice landlords are expected to retain their housing stock for letting, and to dispose of it only in particular circumstances, which require the consent of the Secretary of State". The reference to consent here is to the Secretary of State's powers under Clause 104.

The draft guidance, moreover, includes clear expectations about the part that applicants must play in meeting housing demand, including the kinds of allocation policies that they will be expected to pursue.

I now come to the points raised by the noble Lords, Lord McIntosh of Haringey and Lord Ross of Newport, and indeed the point raised by my noble friend Lord Campbell of Alloway about waiting lists. The draft guidance states: Tenants' choice landlords are expected to provide accommodation for those who are inadequately housed or homeless and whose housing requirements cannot be met at prices within their means, or at all, elsewhere in the local market".

Lord Campbell of Alloway

Perhaps I may interrupt the noble Earl.

The Earl of Caithness

May I just finish the quotation? In determining their priorities for the provision of accommodation and the offer of tenancies, they are expected to take account of housing demand and conditions in their area. This will involve consulting the local strategic housing authority".

Lord Campbell of Alloway

I am so sorry and I apologise to my noble friend, but can he say from where that quotation comes? From which document is my noble friend reading? Is it part of a statute or a regulation? What is it?

The Earl of Caithness

As I have said, it is part of the draft guidance upon which the Housing Corporation has consulted very widely. It was published on 3rd August. The list of organisations includes bodies such as Shelter, the National Federation of Housing Associations, the Commission for Racial Equality, all the local authority associations that I can recall, the British Property Federation and national tenants' associations. So this document has been circulated widely.

Lord Campbell of Alloway

May I ask my noble friend whether these measures will have statutory force and effect by regulation?

The Earl of Caithness

I should like to take legal advice upon that point. Perhaps I may just add something to what the guidance says when dealing with allocation policies. The guidance makes clear: The Housing Corporation expects [them] to be clear; to be based upon an applicant's housing needs, not for instance upon the date of application; and to provide equality of opportunity to all sections of society, taking particular account of the race relations and the sex discrimination legislation". These expectations will be binding on all tenants' choice landlords, under the sanction of loss of their approved status. That would abort any applications in train and prevent any new ones. In the case of registered housing associations also—and many tenants' choice applicants will be registered housing associations—the corporation will, as a consequence of Clause 49 of the Bill, also have more direct powers under Part I of the Housing Associations Act 1985 to ensure that the guidance is observed.

I turn briefly to the question of homelessness, which I have covered in part, but I think it worth reminding the Committee that the noble Lord, Lord Ross of Newport, is correct. We are undertaking a review of the homelessness legislation and we shall of course be taking into account the recent reports published by the Institute of Housing and the Shelter/SHAC report which I am reading at the moment with great interest. I can confirm what I said a moment ago to my noble friend Lord Campbell of Alloway: the tenants' guidance will not be legally binding but it will be a condition of approval under Clause 93. I repeat that the sanction will be the revocation of approval, which means that they will not be approved by the Housing Corporation.

Lord Campbell of Alloway

I am very much obliged.

Lord Stallard

The noble Earl constantly mentioned in his reply, though he did not do so when replying to my previous question, that housing associations will be the alternative landlords. Is it not relevant for him to say whether or not it will be legal for housing associations to buy up chunks of council property? If it is illegal for housing associations to buy up such property, as was suggested by the Charity Commissioners, then this whole argument and every reference to housing associations are surely invalid. I ask the Minister: can he now tell me whether it is legal for housing associations, which are registered charities, to engage in the wholesale buying up of property that is inhabited by people who are not in need of housing but who are already housed?

The Earl of Caithness

I thought I had a note on that point which would answer the noble Lord, but I cannot find it at the moment. I promise, however, that I shall answer him.

Lord Swinfen

Before my noble friend sits down, can he confirm that generally speaking it is easier for a local government housing authority to obtain possession from a defaulting tenant than for a private landlord to do so?

The Earl of Caithness

I bow to my noble friend's greater experience on this subject.

Baroness Fisher of Rednal

I do not think that the noble Earl has answered many of the points made by my noble friend on the Front Bench. The people about whom we are speaking are the homeless; they are registered on a local authority's housing list and all local authorities have waiting lists. The latest publication of the ADC shows increasing numbers on their housing lists because of the housing for sale policy through which many people in the villages have lost their houses. The ADC is also bringing forward from the districts the problem of homelessness. Those of us who have lived in large cities are not exactly used to homelessness but are aware that it has been a problem for a long time. Homelessness, however, is now being felt all over the country, and as the noble Lord, Lord Ross, so clearly spelt out, what we want is more houses. We do not want simply to juggle landlords about, whether councils, private landlords or whatever. That will not solve the problem of homelessness. It will not solve the problem that there are not enough properties to go around. If there were, people would be living in those properties. I hope that the Minister does not give us the number of council properties that are empty. The figures have been published. The largest number of empty properties—double those in local authority ownership—are owned by the Government.

We cannot dismiss homelessness by saying that private landlords will rehouse. We know very well that they will not rehouse most of the registered homeless. Those who have been involved in housing for a long time know that when these private landlords take over they will pick and choose their tenants in a very selective way.

In his reply, the Minister spoke of housing benefits being kept up and people having their money paid. It would all be part of assured tenancies. However we now have the new consultation paper on housing finance in the 1990s. The Minister is saying that if the housing finance proposals come about in the 1990s, housing benefit will be very seriously in danger. A worrying suggestion for council tenants is that they will have to take responsibility for housing subsidy in the case of those who cannot pay. In other words, council tenants who can afford to pay the rent will have to pay the subsidy for those who cannot afford it. These thoughts are in the housing consultation paper. That policy will not solve anything for the homeless.

We have a Housing Bill that is against local authority housing. That is deplorable. All the innovations that have taken place in housing have come through the local authorities. It was the local authorities that started to build bungalows for aged persons. It was the local authorities that started sheltered housing. It was the local authorities that put in all the facilities for the disabled. This Bill is not providing one more house for anybody who is on a housing register or who is homeless. It is simply destroying local authority housing.

5.30 p.m.

The Lord Bishop of Southwark

I am nervous that we return to a possibly sterile argument between those who are anxious to break up what they see as the log-jam state of municipal housing in some parts of the country—with all the difficulties that have arisen over management and so on—and those who defend municipal housing for all the good reasons that the noble Baroness has just described.

As I understand it, the philosophical point is this. If one allows free market forces to have their play one will have more demand and the matter will begin to balance. But even the most earnest of free market advocates have always recognised that there is a point beyond which the market does not always meet the needs of some people. It is not an absolutely efficient instrument. There are certain kinds of need that have to be met by state intervention and support. I should have thought that this was particularly so with housing because it is so expensive. I am sorry to return to a very obvious point but it is one which we seem to allow to slip away in these debates. Housing is extremely expensive particularly in a cold climate. That is why one has to face the fact that one cannot do it on the cheap.

I was a member of the national housing inquiry chaired by the Duke of Edinburgh. We wrestled extremely hard with the basic problem of whether one subsidises the building or the person. We were absolutely clear that one cannot get away with subsidising neither. One may make different decisions. On the whole we came down in favour of subsidising the person. That means that in areas of shortage where rents will rise—because rents rise in a free market when there is a shortage—one will have to pay high housing allowance or benefit. That is the absolutely core problem that any government face. It will help me enormously in considering the rightness or wrongness of different elements in this Bill if we can have a more clear-cut assurance that in areas of high housing shortage, where there will be high rents and where the market is allowed to operate fairly freely, housing allowance and benefit for those who are genuinely in need will also be raised.

We have heard a certain amount about secured tenants. The point about homeless people is that they are not secured tenants. They are not tenants. They need to be rehoused. If the local authority has little or no housing and, under the draft guidance, turns to the people to whom those houses have been sold and says, "You have a duty to allow us to nominate some homeless people", the new landlord will say, "Yes, but the registered rent is £60 a week." Perhaps it could be £45—

Lord Graham of Edmonton

It will be £60.

The Lord Bishop of Southwark

It will probably be £60, because we shall be using a property that does not have a tenant in it. The homeless person or family is almost certainly in the category which cannot afford that sum. If we are then going to say, "I am very sorry but housing benefit can only rise to a certain level and will not meet rents above that level", what happens next?

This is a key problem. I am not going entirely off the point because I am concerned with what happens to homeless families and homeless people if the responsibility for housing them is held by one group and when others who could provide the housing cannot do so at a price that they can afford because a third group—central government—say, "You cannot have the money".

I hope that the Minister will help us to address this problem and give some assurance that we do not get into that intolerable position. We are quite near it in some places.

The Earl of Caithness

The right reverend Prelate has made a fascinating speech. I was particularly interested when he reminded the Committee that he had come down in favour of helping the person rather than giving grants for bricks and mortar. This is a problem with which I have been wrestling since I took over the portfolio on housing that I am lucky enough to have been given. We appreciate the great difficulties. Where there is a shortage of housing it happens to be where it is most built up at the moment—in the cities, where there are perhaps no more sites available. However, I would stress to the right reverend Prelate that where one is giving people tenants' choice which is the link to the amendment we are considering, one of the criteria that a tenant's choice landlord—it may well be a housing authority—will have to fulfil is to provide accommodation for those on below-average incomes; that is, the homeless and those at the bottom of the ladder.

We realise that more rented accommodation is required. We want more rented accommodation. We want a greater diversity of rented accommodation. When one looks at the grants given to the housing associations, one can see that, rather than making a true cost of the land and development in the form of rent, we are able by grants to subsidise the land and the development cost to achieve a rent that is affordable. That is a subject to which we are paying great attention.

However, I would make it absolutely clear that as a result of the change in the rules in housing benefit in April, those at the lowest end of the scale, those least able to afford it, will receive 100 per cent. of housing benefit payment. So we are attacking it from two directions. It is a very serious problem and one with which we continue to wrestle. We have two principles. One is to get the rent to an affordable level for those at the lowest end and the second is to back that up with the higher housing benefit.

I have found the bit of paper that I was looking for to enable me to reply to the noble Lord, Lord Stallard. The final situation is not resolved, but he, as well as the rest of the Committee, will know that housing associations, including charitable associations, have already acquired blocks of tenanted dwellings from the public sector bodies, particularly in the new towns in the past. However, I shall inform the Committee as soon as I hear the result of the present discussions that are going on with the commissioners and my department.

Lord McIntosh of Haringey

The right reverend Prelate the Bishop of Southwark was surely right to warn us of sterile ideological debate. It is simply not good enough for any of us to say either "private sector housing bad, public sector housing good" or "public sector housing bad, private sector housing good". It is not like that. There clearly have to be both sectors in any decent range of housing provision if we are to meet the housing needs of this country.

However, I believe that the right reverend Prelate oversimplifies a little if he thinks that it is possible to put all the public financial support for housing for those most in need on to the individual rather than on to the property. I should have thought—I say this with great respect for the work with which he has been involved and the work of the many commissions that have been involved—that one has to do both. There have to be housing authorities, those responsible for providing housing who have obligations put upon them to meet those in the greatest housing need—above all the homeless—as well as a requirement for housing benefit which meets the financial needs of those in the greatest need. That has always been recognised in our legislation, particularly in the legislation that was so ably helped by the noble Lord, Lord Ross of Newport, in another place.

The Lord Bishop of Southwark

One important reason why people tried to get away from that solution to subsidise the building was that, if one is not careful, one would perhaps be subsidising people who did not need subsidy. That is the free market argument. I am only saying that I think the noble Lord is right in terms of the situation in which we find ourselves, but in theory, following more freemarket philosophy, it would be better, more logical, to subsidise only those who have need of subsidy.

Lord McIntosh of Haringey

I appreciate the force of that argument and I would modify what I have said to the extent of saying that in addition to an adequate housing benefit scheme—we shall be considering tomorrow whether the housing benefit scheme to come out of this Bill will be adequate—there must be, if not subsidising of bricks and mortar in a crude way, some responsibilities on those providing housing to see that the nominations go to the people in need.

That is what these amendments are concerned with. We are not arguing for a general subsidy on bricks and mortar which, as the right reverend Prelate correctly says, goes to those least in need. We are arguing that this change should not take place in local authorities' areas which have exceptionally high levels of homelessness or exceptionally high levels of housing need. We believe that the safeguards provided by the Government, on which the Minister dilated at some length, are not adequate.

In response to questioning by his noble friend Lord Campbell of Alloway, the Minister admitted that in the Bill there are no statutory obligations, no duties on new landlords to rehouse the homeless or to take nominations from the homeless. He put up instead the quite irrelevant Aunt Sally as if we had been claiming that this part of the Bill would automatically throw a lot of people out on to the street and create many new homeless. That is not what we said. What we said is that the obligation to house the homeless and to deal with those in greatest housing need is a continuing obligation.

The draft guidance which the Housing Corporation has produced, after consulting but without necessarily securing the agreement of many bodies in the housing field, is not good enough. It states that the new landlords will be expected to take account of the needs of the homeless and the requirements of those in greatest need. What it does not say is that there will be a duty to provide for them. It is the duty to provide for them which is the ultimate sanction on local authorities, thanks to the noble Lord, Lord Ross of Newport, in part—I shall gladly give way to him in a moment—but it is that duty which will be lost if a significant part of our housing stock is transferred from local authorities who have a duty to new landlords who will not have a duty.

Lord Ross of Newport

Will the noble Lord agree that what is really happening is that we are returning to a pre-1974 situation before the Housing (Homeless Persons) Act 1977 in Conservative Party thinking? At that time the then Minister for Housing, Mr. Hugh Rossi, introduced two circulars. One was in 1974; I forget the date of the other. They asked local authorities to do exactly what the Minister seems now to be asking private landlords and others to do. He asked them to do it, but it was not a statutory obligation. Eventually legislation was needed to make it a statutory obligation.

What I am hoping to do by my intervention is to impress upon the Minister to consider the previous situation in 1973–74. Quite rightly the Government at that time brought this forward. I believe they expected local authorities to follow it, but unfortunately many did not. That was the reason for the ultimate production of the legislation.

Lord McIntosh of Haringey

I am grateful for that intervention because the noble Lord has much more experience in these matters than I have. He has made the point more clearly than I could have done. It has been our experience over the years that if there is to be anything approaching adequate treatment of the homeless and those in greatest housing need—heaven knows the treatment given to them now is not adequate—there has to be a duty on somebody to house them. Somebody has to have a duty to be concerned for them. A draft or even a finalised guidance which states that the new landlords have to take account of those needs is not good enough. I hope the noble Lord will agree with me that on the basis of the Minister's reply it would be quite wrong for us to withdraw the amendment. I commend it to the Committee.

5.47 p.m.

On Question, Whether the said amendment (No. 125J) shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 160.

Addington, L. Falkland, V.
Airedale, L. Fisher of Rednal, B.
Amherst, E. Fitt, L.
Ardwick, L Gallacher, L.
Aylestone, L. Galpern, L.
Banks, L. Graham of Edmonton, L.
Barnett, L. Greenway, L.
Beaumont of Whitley, L. Grey, E.
Blackstone, B. Hampton, L.
Blease, L. Hanworth, V.
Bonham-Carter, L. Harris of Greenwich, L.
Boston of Faversham, L. Hatch of Lusby, L.
Bottomley, L. Hunt, L.
Brooks of Tremorfa, L. Irvine of Lairg, L.
Callaghan of Cardiff, L. Jacques, L.
Caradon, L. Jay, L.
Carmichael of Kelvingrove, L. Jeger, B.
Carter, L. Jenkins of Hillhead, L.
Cledwyn of Penrhos, L. John-Mackie, L.
Cocks of Hartcliffe, L. Kilmarnock, L.
David, B. Kirkhill, L.
Davies of Penrhys, L. Listowel, E.
Dean of Beswick, L. Llewelyn-Davies of Hastoe, B.
Diamond, L. Lloyd of Kilgerran, L.
Donaldson of Kingsbridge, L. Longford, E.
Donoughue, L. Lovell-Davis, L.
Dormand of Easington, L. McIntosh of Haringey, L.
Elwyn-Jones, L. Mackie of Benshie, L.
Ennals, L. McNair, L.
Ewart-Biggs, B. Mais, L.
Ezra, L. Mar, C.
Falkender, B. Mayhew, L.
Meston, L. Seear, B.
Molloy, L. Serota, B.
Mulley, L. Shackleton, L.
Murray of Epping Forest, L. Shepherd, L.
Nicol, B. [Teller.] Stallard, L.
Ogmore, L. Stedman, B.
Oram, L. Stewart of Fulham, L.
Parry, L. Stoddart of Swindon, L.
Peston, L. Strabolgi, L.
Phillips, B. Taylor of Blackburn, L.
Pitt of Hampstead, L. Taylor of Gryfe, L.
Ponsonby of Shulbrede, L. [Teller.] Taylor of Mansfield, L.
Tordoff, L.
Prys-Davies, L. Turner of Camden, B.
Rea, L. Underhill, L.
Ritchie of Dundee, L. Wallace of Coslany, L.
Rochester, L. White, B.
Ross of Newport, L. Williams of Elvel, L.
Rugby, L. Willis, L.
Russell of Liverpool, L. Winstanley, L.
Abinger, L. Gardner of Parkes, B.
Aldington, L. Gridley, L.
Allerton, L. Grimthorpe, L.
Ampthill, L. Hailsham of Saint Marylebone, L.
Arran, E.
Balfour, E. Harmar-Nicholls, L.
Bathurst, E. Harrowby, E.
Beloff, L. Harvington, L.
Belstead, L. Hemphill, L.
Bessborough, E. Henley, L.
Blatch, B. Hesketh, L.
Boardman, L. Hives, L.
Borthwick, L. Holderness, L.
Boyd-Carpenter, L. Home of the Hirsel, L.
Brabazon of Tara, L. Hood, V.
Brookeborough, V. Hooper, B.
Brookes, L. Ingrow, L.
Brougham and Vaux, L. Ironside, L.
Broxbourne, L. Johnston of Rockport, L.
Butterworth, L. Joseph, L.
Caithness, E. Kenilworth, L.
Camden, M. Killearn, L.
Cameron of Lochbroom, L. Kintore, E.
Campbell of Alloway, L. Kitchener, E.
Carnegy of Lour, B. Lauderdale, E.
Carnock, L. Long, V.
Carthcart, E. Lyell, L.
Charteris of Amisfield, L. McFadzean, L.
Chelmer, L. Mackay of Clashfern, L.
Chelwood, L. Macleod of Borve, B.
Clinton, L. Malmesbury, E.
Clitheroe, L. Manton, L.
Coleraine, L. Margadale, L.
Cottesloe, L. Marley, L.
Craigavon, V. Marshall of Leeds, L.
Craigmyle, L. Maude of Stratford-upon-Avon, L.
Crawford and Balcarres, E.
Daventry, V. Merrivale, L.
Davidson, V. [Teller.] Mersey, V.
Deedes, L. Middleton, L.
Denham, L. [Teller.] Milverton, L.
Digby, L. Monk Bretton, L.
Donegall, M. Montgomery of Alamein, V.
Dulverton, L. Morris, L.
Dundee, E. Mountgarret, V.
Elibank, L. Mowbray and Stourton, L.
Elles, B. Moyne, L.
Elliot of Harwood, B. Munster, E.
Elliott of Morpeth, L. Murton of Lindisfarne, L.
Elphinstone, L. Napier and Ettrick, L.
Enniskillen, E. Nelson, E.
Erroll of Hale, L. Northesk, E.
Faithfull, B. Nugent of Guildford, L.
Fanshawe of Richmond, L. Orkney, E.
Ferrers, E. Orr-Ewing, L.
Forester, L. Peel, E.
Fortescue, E. Pender, L.
Fraser of Kilmorack, L. Penrhyn, L.
Gainford, L. Peyton of Yeovil, L.
Platt of Writtle, B. Stanley of Alderley, L.
Portland, D. Stevens of Ludgate, L.
Portsmouth, E. Stodart of Leaston, L.
Reay, L. Strange, B.
Redesdale, L. Strathcarron, L.
Renton, L. Strathclyde, L.
Renwick, L Strathspey, L.
Ridley, V. Sudeley, L.
Rippon of Hexham, L. Suffield, L.
Rochdale, V. Swansea, L.
Rodney, L. Swinfen, L.
Rollo, L. Swinton, E.
Romney, E. Teviot, L.
Rootes, L. Thomas of Gwydir, L.
St. Davids, V. Torphichen, L.
St. John of Fawsley, L. Trafford, L.
Saint Oswald, L. Tranmire, L.
Sanderson of Bowden, L. Trumpington, B.
Savile, L. Ullswater, V.
Shrewsbury, E. Vaux of Harrowden, L.
Skelmersdale, L. Waldegrave, E.
Southborough, L. Wyatt of Weeford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.57 p.m.

Lord Graham of Edmonton moved Amendment No. 125K:

Page 69, line 12, leave out from ("to") to end of line 13 and insert ("regulations made under section 99(1) below").

The noble Lord said: In moving Amendment No. 125K, I wish to speak also to Amendment No. 132V. This should be a short debate. The gravamen of the amendment is to invite the Government to put clearly on the face of the Bill, once and for all, the fact that a tenant, in accordance with the words in Clause 99 at page 74 of the Bill, has given notice, in such manner as may be prescribed of his wish to continue as a tenant of the landlord".

In other words, in respect of the tenants who object strongly to transfer, who exercise their rights in a ballot and who say that they do not wish to be transferred, the Minister and his supporters have said in this Committee and elsewhere not only that there is no intention but also that the tenants shall ipso facto remain tenants of the local authority. Yet, when one looks at the words which give effect to that, one sees, under the heading "Tenants continuing as tenants of landlord", The Secretary of State may make regulations imposing the following requirements".

I hope that there will be no dubiety about the fact that the word "shall" is much more positive than the word "may". If the Minister argues that "may" means "shall" we should prefer the use of the word "shall" which is more positive.

Why have the Minister and his advisers chosen the word "may" to describe the intention "shall"? I believe that it is because there is some dubiety about the ability. The Minister shakes his head. In that case, he can put that dubiety out of the window. We are talking about people who may, in accordance with the Minister's view, be over-sensitive about the nuances and meanings of words. The Minister does not need to be told that, whether or not they have security of tenure, for many people the quality of their landlord and their rights are central to the quality of their life. The Minister will be doing his case, and the case that led many of his supporters into the Lobby with him in the earlier votes, a lot of good and will be putting at rest the minds of thousands if not millions of people if he says that if they choose to exercise their right and say no, even though by the ballot rigging procedures that are applied their freehold may be transferred to someone else, they have the right to remain as a tenant.

The gravamen of these amendments is that we are simply saying to the Minister: put at rest the minds of many people. I am not going to get into the argument about extremes or agitation, or about being led to believe otherwise. It is a simple amendment and I hope the Minister will accept it in a simple and straightforward way. I beg to move.

Lord Campbell of Alloway

I support these amendments if only to retain a measure of credibility in the Chamber for what I said on a previous amendment, and which I understood to be the policy of the Government, and to ensure that "shall" and not "may" appears in Clause 99.

With respect, it is not fair to charge my noble friend the Minister or his department with dubiety, because there is a curious esoteric form of draftsmanship which parliamentary draftsmen will use at times. The Committee has heard the noble and learned Lord, Lord Scarman, speak of many occasions when the Appellate Committee of your Lordships' House interprets "may" as "shall" and vice versa. Of course, the whole thing is a nonsense. Over teatime I sought the advice informally of a noble and learned Lord who had been listening to the debate and who had read Clause 99. He took the view that without any shadow of doubt it was, in its present form, permissive and not mandatory: hence the importance of this amendment, which clears up the whole question that lies at the fundamental basis of my support for the Government.

The Earl of Caithness

I should like first to speak to Amendments Nos. 125K and 128A. As I understand them, the amendments seek to clarify that the applicants' right to acquire is limited by the right under Clause 99(1) for certain tenants' homes to be excluded from the acquisition or leaseback to the existing landlord.

I am advised that the drafting of Clause 92 achieves precisely that effect. It provides: the right to acquire…subject to and in accordance with the provisions of this Part". Those words quite plainly mean that an acquisition must go through all procedures laid down in the part. I can assure the Committee that it must conform to Clause 99(1) and have excluded from it or lease back the homes of tenants who vote to stay with their existing landlord and of tenants excluded from the right by Clause 92(3) in particular.

I can go on to assure the Committee that the regulations needed to implement Clause 99(1) will be made by my right honourable friend if Parliament grants him that power. We have promised all along that tenants should have the individual right to opt out of a transfer. We regard that as an essential and wholly democratic feature of our proposals, and we will see that it is properly implemented.

I turn to the third amendment grouped with Amendment No. 125K; that is, Amendment No. 132V. I understand that the arguments I have put forward to the Committee for Amendments Nos. 125K and 125A also apply to Amendment No. 132V, but I rather prefer "shall" to "may" and I will accept that one.

Baroness Fisher of Rednal

Will the Minister please explain why he said that the Secretary of State may make regulations? I understand that he is now going to say "shall". The noble Earl explained during a previous debate on ballots that at present some regulations are being seriously considered. I wonder whether he can give us some idea of what those regulations may be, as he has done with regard to the opting-out procedure. This is almost in the same category as opting out. As the noble Earl said, there is a misunderstanding in that people feel they have got to vote. Will there be any different regulations as distinct from the opting-out regulations where they definitely have to say no?

Lord Campbell of Alloway

I am most grateful to my noble friend the Minister for his openmindedness. Once Clause 99 is amended in this Bill it casts an entirely new light on the voting procedures because, although the procedures are novel, the fact of the matter is that it is now enshrined, or will be, in the statute that those who do not want to go along can opt out. That draws a distinction constitutionally between this type of voting procedure and other types of voting procedure. Therefore it is no longer right in this context to refer to these voting procedures as tainted or suspect. They are just different. This is relevant to the voting procedures.

The Earl of Caithness

I should like to thank my noble friend for his last intervention. I think that that was extremely helpful and supported what I said earlier. I am not sure that I fully understood what the noble Baroness was getting at. The regulations will be laid before Parliament and will be considereed in that context.

Lord Graham of Edmonton

I am grateful for the Minister's reply with regard to Amendment No. 132V. As a result of the fact that the Minister and the Government were reluctant until three minutes ago to acknowledge the concern of those who wanted the positive right written on the face of the Bill, there has been some uncertainty and disquiet; in fact, I would use the word "distress".

I am grateful for the support of the noble Lord, Lord Campbell of Alloway, for the central piece of these amendments. Of course the procedure is different. It is still wrong. The noble Lord said that it was not tainted, but it is still tainted. There is no procedure that says that a minority of those who are entitled to vote can aggregate to their vote all those people who did not vote and ipso facto turn a minority into a majority. There is no procedure unless your name is Gerry Mander. That is what happens because a minority of the people entitled to vote will pick up, for whatever reason, the votes of those who have not voted, add them to theirs and then outweigh a number that was in excess of theirs.

The noble Lord has underlined the crucial importance for people who wish to remain tenants of their local authority of being able to opt out. By opting out, in effect they are voting yes, but this recognises that by voting no they could very well form the majority of the people who vote. If it is a majority of those entitled to vote, then the whole of their estate will not be transferred to a new landlord. To that extent, whether it is a concession, a clarification, a revision or an assurance, we on this side of the Committee are grateful for the Minister's intentions as regards Amendment No. 132V. In those circumstances, I willingly and readily beg leave to withdraw the amendment that we are now debating.

Amendment, by leave, withdrawn.

6.15 p.m.

Lord Dean of Beswick moved Amendment No. 125L:

Page 69, line 13, at end insert ("and after payment of a positive sum to the vendor").

The noble Lord said: I understand that we arc also speaking to Amendment No. 132T. The amendments before the Committee try to ensure that the local authorities receive some justice as regards the question of transfer of assets and so on. Amendment No. 132T ensures that local authorities will not be forced to pay applicants a form of dowry to go with the transfer of stock. Under the Bill that is a possibility and I suggest that would be grossly unfair.

The consultation paper stated that: In some cases, the obligations of ownership will he such that application of the principle of market value subject to tenancy will result in a payment by the existing landlord to the new landlord rather than vice versa".

Some years ago the right honourable Peter Walker MP said that they, meaning the councils, should give the houses away. It is alarming to see that this view has now been overtaken. It is bad enough to leave the remaining public sector tenants with outstanding debt charges on the properties transferred but to expect those tenants to contribute to the profit margins of those new landlords with whom they had and have no connection is scandalous. In a competitive market the buyer must beware. That concept of negative valuation appears to be turning that age old consensus upside down.

If that exercise is carried through it will place another grossly unfair charge on the remaining council house tenants. Perhaps I may give some examples of what previous legislation in the last few years has done. Members of the Committee on all sides and Members in another place are aware that substantial properties are being demolished, mainly in the inner cities—properties that have been in existence for less than 20 years. The amount of blame as regards those properties which can be laid on the local authorities is absolutely minimal. A succession of governments of both colours, both Conservative and Labour, insisted on particular types of properties being built.

I cite Leeds with which I had a connection as a Member of Parliament for some years. It has had to demolish a property known as Hunslet Grange which comprises over 1,000 units of housing with approximately 40 years outstanding debt charges which have to be met from the rest of the council house rents in Leeds. I do not have the figures available but I should think it would be safe to say that Manchester's problem is three times greater than that. Most of those properties in Manchester were known as The Forts. Some have been demolished, most are empty and they illustrate a previous criticism of planners and architects who do not now have to pick up the bill. Under present legislation it is council house tenants in the remaining properties who have to pay although they have had nothing at all to do with the building of those houses. In Leeds alone it is costing the housing revenue account £750,000 each year for a mistake which was not of their doing.

If one wants further to illustrate the position I believe that the Government are getting themselves into a situation where council house tenants who wish to remain council house tenants will believe that the Government, by legislation over the years, are conducting some sort of vendetta against them.

I remember in another place initiating the first debate on the consequence of industrial housing. I believe that I received a measure of support from all sides of the House. There were a number of Conservative Members—for example, the present Member for Bath, Mr. Patten—who spoke quite forcefully in the debate. We all agreed that it was a situation that should be corrected. However, many of the Members concerned were not quite on the same slant as I in that particular debate. They were worried about former or present council house tenants who had bought industrialised housing which was, at that time, showing serious defects.

Therefore, to their credit the Government responded and a particular type of house—I think it was called the Orlit house—was picked on and it was decided that people who had bought an Orlit house from the local authority could obtain a maximum of £9,000 per house to put the house into a reasonable state of construction and repair. I am now speaking without notes but I believe that gradually that system had other systems added to it. However, what was grossly unfair—and I came across this in Leeds—was that people had bought industrialised or semi-industrialised houses but on resale found that they had an asset which they could not realise because nobody wished to buy even though they were valued downwards by as much as 30 per cent. and were in good condition. Nobody was interested in a second purchase.

The Government then came along with the idea that the person who bought the house at a considerable discount could make the local authority buy the house back and at an enhanced price. However, the point is this: who had to find that money? Of course, it was the remaining council house tenants who had no dealing whatever in any of those particular transactions. That is one reason why in some areas, the council house rents have risen fairly dramatically by any standards.

Council house tenants who remain in those industrial houses cannot get their repairs carried out. That is not because, as the noble Lord, Lord Campbell of Alloway, said to an earlier amendment the local authorities are neglectful. I am not defending local authorities because some have left a lot to be desired. I believe that at one time Manchester was the third biggest landlord in the country and that only the GLC and Birmingham, where the noble Baroness, Lady Fisher, was chairman of housing were larger. I do not sit down and accept the criticism that the tenants in Manchester were not looked after. They were looked after. We made some mistakes but to ascribe the dereliction or the lack of maintenance of council houses today as the sole responsibility of local authorities is absolutely bunk and the Minister knows that.

Successive reports from non-political bodies, such as that from the Institute of Policy Studies, the BEC and Mr. Howard Davies and his group of officers all arrive at the same conclusion: the necessity to spend not substantial sums of money but absolutely huge sums of money on upgrading and repairing council houses because of the dereliction that has already taken place by the withdrawal in many cases of Government subsidy. Therefore, the myth that over 100,000 council houses (I may have the figure wrong but I am not far out) could be made habitable ought to be laid. I maintain that the overwhelming number of those could be made habitable if the Government allowed many local authorities to have access to the capital assets raised by the sale of other houses. Most of that funding is still frozen by the Government, so the Government do have a strong role to play.

It is no secret that over the past 10 years homelessness has doubled because those houses are empty. That is not the sole reason, but it is a factor. It is no good the Government saying that the Bill will correct the position. I suggest that if the Bill is unamended it could well be that a local authority, or the local authority tenants (that is who we are talking about) who in many cases are paying financially balanceable rents (I am not saying market rents, but realistic rents) will be asked to fund a takeover by someone who may well be, despite the safeguards the Government have attempted to put in the Bill, a property speculator of the worst kind. On that basis, I commend the amendments and await the Minister's reply. I beg to move.

Lord Renton

Is it not unthinkable that a public sector landlord would part with houses or with land on which houses might be built without receiving a proper consideration? Even if the houses are, as the noble Lord suggested might be the case in some areas, in a dilapidated state and costly to the local authority, I should have thought that the district auditor—quite apart from the Secretary of State, the ratepayers or anyone else—would have something to say if an adequate consideration is not paid.

The noble Lord is attempting to get round a difficulty and uncertainty—and I appreciate what he said—by moving an amendment which requires payment of a positive sum to the vendor. Frankly, the expression "positive sum" is one that I find uncertain in itself. The word "positive" seems to be unnecessary. Either one pays a sum or one does not. I do not now what a "positive sum" would mean in these circumstances. In view of what I have said, I would be surprised if my noble friend is prepared to accept the amendent.

Lord Dean of Beswick

As we are in Committee, perhaps I may deal with one point raised by the noble Lord. He implied that no local authority, certainly with the intervention of the district valuer, would dispose of properties at a loss. However, he should know that over the past few years there has been protection for local authorities which mainly applied in London where because the cost of building was so high the actual cost had to be reflected in the selling price. However, the Government legislated some time ago to remove that protection. There are now local authorities in London who have had to dispose of substantially good houses, fairly recently built, at less than replacement value. It is not entirely true to say that a local authority will always come out on the right side. In some areas of London a substantial deficit has been incurred where newly-constructed houses have been sold.

Lord Renton

I take the point about replacement value, although I did not specifically mention it. However, even where property is sold below the original cost because of circumstances which have caused a decline, councils must still receive an adequate consideration, in spite of what the noble Lord said.

Lord Swinfen

The market value of a property is not necessarily the replacement value. If one tried to insure one's house for what one paid for it, the insurance company would, so to speak, probably do it for nothing. The replacement value of any property or item is not necessarily what it cost to build.

I suggest that the meaning of, after payment of a positive sum to the vendor does not entirely mean what the noble Lord intends. I think the positive sum of £1 could be what is meant, and accepted as what is meant, but I do not think that that is the intention of the noble Lord and his colleagues.

The Earl of Caithness

Amendment No. 125L would, like Amendment No. 132T, mean that tenants' choice transactions could only take place at positive valuations. I believe that is what lies behind the amendments spoken to by the noble Lord, Lord Dean of Beswick. That means it is with a payment in every case to the landlord by the applicant at completion.

In the papers which preceded and accompanied the Bill my right honourable and honourable friends made very clear three points about the valuation of property under tenants' choice. First, property is to be transferred without subsidy from the public to the independent rented sector. The landlords in that sector are engaged in the market place. Accordingly, the right approach to valuation enshrined in Clause 98 is the market value subject to the existing tenancies.

Secondly, if the landlord has fallen down on his statutory and contractual obligations, his payment should be reduced accordingly. Thirdly, if after allowing for reasonable repair costs the reduction leaves no value in the property, then it must be right for the landlord to pay a so-called dowry or, in the draftsman's words, a disposal cost to the applicant. This clear point of principle has an important practical implication. Regrettably too many council tenants live in run-down properties. Tenants' choice is meant to help them as much as those in good, well-maintained housing. Our provision for negative valuations will mean that independent landlords will be ready to take on such run-down housing. The results of Amendments Nos. 125L and 132T would close that avenue of hope for tenants in the worst council housing.

I repeat to the noble Lord, Lord Dean of Beswick, that new landlords will be vetted by the Housing Corporation. They will not be property speculators of the worst kind. They simply could not afford to help the tenants in some cases even if the property transferred was at a nominal positive sum of, say, £1,

I hope the Committee will consider this point. Surely we cannot leave tenants in such properties without the practical hope of change that tenants' choice provides.

Lord Stoddart of Swindon

I listened to the Minister with great interest, and I understand the point he makes, However, at the same time we must have some regard to values. A great part of the value of any property is the land upon which it stands. From whatever point of view—whether that of a housing association or a private person—the investment in that land is a long-term investment.

The housing price spiral or boom—call it what you will—has rolled out from London to the rest of the country and in many areas where hitherto the value of property has been low the position has now reversed. In places even as far north as Durham property values have escalated by up to 60 per cent. In East Anglia they have risen by 64 per cent. in the past year. As 40 per cent. of the value of a property is in the land, that means that the land value in many of those areas has increased considerably and is a substantial asset.

I believe that the Minister and the Government have to take note of those new situations. When the Bill was published my guess is that the average price of a house in Manchester was perhaps £18,000. That is possibly a good guess. I believe that the value of a house in Manchester now would be in the region of £35,000 to £40,000. The value of the land upon which that house stands has therefore increased four or five times, and in the case of a house valued in the region of £35,000—if I can do the arithmetic while on my feet—it amounts to £14,000. Therefore it may very well be that though we are handing over a dilapidated property, at the same time we may be handing over a very positive asset within the land that is handed over with that house.

I do not know whether that is clear to the Minister, but I hope it is clear to the Committee because I feel quite sure that all of us, whatever side of the Committee we may be on, wish that the public gets a fair deal and a proper value and price for assets which are transferred to individuals, associations or whatever. I beg the Minister to consider the new situation which has arisen as regards land and house values since this Bill was conceived and published.

6.30 p.m.

The Earl of Caithness

I totally agree with the noble Lord, Lord Stoddart of Swindon, that it is essential for the public to get a fair deal. That is where the district valuer, if necessary, can be brought in to safeguard the interests. I disagreed with him when he said that 40 per cent. of the value of any property is in the land. I was a valuer for many years and I know that my noble friend Lord Swinfen is a current valuer. I have never been able to value land and property as accurately as that, and I certainly have never used that yardstick.

Lord Stoddart of Swindon

Perhaps I may say to the noble Earl that the rule of thumb has altered. At one time it was 20 per cent.; two or three years ago it was 30 per cent. Now, in some parts of the country, it is 40 per cent. of the total value of the completed property.

The Earl of Caithness

I cannot disagree with the noble Lord that in some instances it might be; but as a rule of thumb, no.

Lord Dean of Beswick

I shall deal with the point raised by the noble Lord, Lord Swinfen, regarding the forced disposal of a house by the local authority at less than the replacement cost. I may have omitted to make the case, but there may be some argument there that the local authority need not build a replacement house. There are numerous cases of local authorities in London where they have been forced to sell houses at less than the construction costs to sitting tenants who are not long term tenants. The burden of the debt charges on those particular houses has had to be carried by the remaining tenants in the London area. I do not know the particular areas in London; but a peculiar situation has arisen in the London area because of deliberate legislation by the Government.

I have listened seriously to what the Minister had to say regarding the particulars of this amendment and his reply to it. I am not satisfied that what the Minister has said will prevent the type of situation that I suggest may happen. I did not say in the initial stages that I questioned the quality of the landlords. I said eventually. Property is not under anyone's control for time immemorial. When the Minister speaks about dilapidated properties, I have to be a little careful about what I say. In many areas of the big cities some pockets of those cities have substantial rented debts. I know all local authorities pool rents; but I suspect that the massive debts of most areas are in the social stress areas, and that goes without saying. Going back about 10 years, in some parts as many as 50 per cent. of tenants in certain local authority areas were receiving some form of housing benefit.

I was recently reading in the Manchester Evening News(having moved back to that area just before we broke for the Recess) what had happened to rent arrears since the new housing benefit regulations came in. In every one of the 10 metropolitan districts that constitute the Greater Manchester Metropolitan Authority there has been a substantial increase in rent debts since the Government's legislation. The point is that if one has 50 per cent. of the houses within a tightly drawn city such as Manchester receiving substantial housing benefits and debts also accruing, where would the money come from to buttress a particular deal to make it attractive enough for someone to wish to buy them? It certainly could not come from the local authority because it does not have the money; it certainly could not come from the general rate fund because if one considers the global situation for that kind of exercise, taking the country as a whole, it would be a tremendous sum of money to find. The point I am making is that if such an exercise developed once again the pbi of the housing section would be the housing tenant who has always been fortunate enough economically and socially to pay the rent the local authority set for him.

However, in view of what the Minister has said, I consider it to be a very involved subject. I ask the Minister to look a little deeper into my further remarks and I would not wish him to answer tonight. I believe the problem is much more involved as regards the transfer of property in some of the socially deprived areas than anyone has thought through. On that basis, I prefer to withdraw the amendment and perhaps wait to hear what the Minister has to say in conversation with me at some future time and then to return at Report stage in order to look at this matter further.

Amendment, by leave, withdrawn.

The Earl of Caithness moved Amendment No. 126:

Page 69, line 14, leave out ("any freehold") and insert ("the fee simple estate in any").

The noble Earl said: In moving Amendment No. 126, I speak at the same time to Amendments Nos. 127, 128 and 129. We have, of course, made it clear all along that tenants' choice should apply, in this Bill, to freehold, tenanted housing. Leasehold property will have to wait for a later Bill. Unfortunately, scrutiny in another place has revealed a difficulty where a public sector landlord owns a freehold but for historical reasons is also a leaseholder.

An example of the kind of thing I mean may help. A local housing authority owns the freehold of a block. Some years ago, it let the whole building to another landlord, a housing association, for instance. The second landlord has let some of the flats on its own account on secure tenancies but leased some back to the freeholding authority, which has let them to its own secure tenants.

If we imagine that an applicant buys the freehold, which is the only kind of interest that the tenants' choice provisions in the Bill deal with, what would be the result? Though the identity of the freeholder would change, the tenants would still be the tenants of the local housing authority and the housing association by virtue of the intermediate interests they held in the property.

Those problems may sound far-fetched; but they are drawn from real life. We therefore need to ensure that they do not arise. Amendment No. 129 accordingly makes it clear that the public sector landlord must be a freeholder letting direct to a secure, qualifying tenant or tenants.

Amendment No. 129 also clears up a possible anomaly by ensuring that a qualifying tenant must be a tenant of the relevant public sector landlord, and not of any other intermediate landlord, able to grant secure tenancies under the Housing Act 1985.

The remaining changes are for drafting purposes only. I beg to move.

Lord Renton

I appreciate the problem to which my noble friend has drawn attention. Subject to the use of the expression "fee simple estate" it is solved by Amendment No. 129. The replacement of the word "freehold" by the words "fee simple estate" does not help him to solve his problem. It might be unfair to press my noble friend on this matter at the moment because he may wish to take further advice.

Subject to that advice, I should have thought that the word "freehold", which nearly every lay person understands, is preferable to the expression "fee simple estate" which is understood by lawyers but not by many other people. It is a misleading expression. First, it is not a fee. Secondly, it is not always simple, and my noble friend has drawn attention to circumstances in which it is not. As to the use of the word "estate", that is an ambiguous word in our law. There are various kinds of estate, but there is only one kind of freehold—that is, freehold or, in other words, absolute ownership, subject to certain overriding conditions which sometimes arise of which my noble friend has given an example.

While I sympathise with my noble friend, my suggestion is that either he does not press the amendments at this stage or he gives an undertaking that if the Committee agrees to the amendments, he will consider further on Report whether it would not be wise after all to retain the better understood expression "freehold".

Lord Swinfen

If after further consideration my noble friend still decides to talk about "fee simple estate" should not the expression be "an estate in fee simple'"?

Baroness Fisher of Rednal

Will the Minister explain to those of us, including myself, who are not lawyers, estate agents or chartered surveyors what "fee simple estate" means?

The Earl of Caithness

My noble friend Lord Renton struck a chord with me because I was educated by him during our debates on the Criminal Justice Bill that Bills should be written so that lay people rather than merely lawyers can understand them. As he will be aware, lawyers will be the first to unravel language into layman's terms and so defeat the object of the legislation.

Lord Renton

Why pay lawyers to unravel things when a word such as "freehold" can be used which does not need to be unravelled by lawyers?

The Earl of Caithness

I was coming to the point about "freehold" and "fee simple estate". I was talking in general terms about the drafting of legislation. Both my noble friends Lord Renton and Lord Swinfen commented on that point. The word "freehold" describes the tenure in which the land is held. The expression "fee simple" describes one of the freehold estates which is capable of existing in law.

In Clause 92 we describe the interest or estate owned by the landlord and therefore the words "fee simple" are the more accurate. It is also the expression used in Clause 103 to describe the interest which is conveyed.

I hope that the Committee will accept the amendments. I will look at the point raised by my noble friend Lord Renton between now and another stage.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 127 and 128:

Page 69, line 16, after ("tenants") insert ("of the public sector landlord").

Page 69, line 17, leave out ("any freehold") and insert ("the fee simple estate in any other").

On Question, amendments agreed to.

[Amendment No. 128A not moved.]

The Earl of Caithness moved Amendment No. 129: Page 69, leave out lines 28 and 29 and insert— ("(3) Subject to subsection (3A) below, a secure tenant of a public sector landlord is a qualifying tenant for the purposes of this Part if (and only if) his secure tenancy is held directly from the landlord as owner of the fee simple estate and, in relation to any acquisition or proposed acquisition under this Part, any reference in the following provisions of this Part to qualifying tenant is a reference only to a qualifying tenant of the public sector landlord from whom the acquisition is or is proposed to he made. (3A) A secure tenant is not a qualifying tenant for the purposes of this Part if").

On Question, amendment agreed to.

6.45 p.m.

Lord Carter moved Amendment No. 130:

Page 69, line 33, leave out ("to") and insert ("9, 10 or").

The noble Lord said: I shall speak also to Amendments Nos. 132, 136 and 137. This group of amendments is intended to probe the Government's view about the position of disabled tenants who face a change of landlord.

Amendment No. 130 deals with what appears to be an anomaly in the Bill. I should be grateful if the Minister would clarify the position. As drafted, the Bill appears to provide that certain disabled people may be discriminated against by not being allowed to change their landlord. Indeed, their presence in a property might result in everyone in that property being excluded from the right to change their landlord. Disabled tenants might wish to join their neighbours in deciding on another landlord. As drafted, the Bill appears to prevent that action. I am not concerned with the rights and wrongs in principle of a transfer; I wish to discover the Government's view about the rights of disabled people if a transfer is to take place.

Amendments Nos. 132 and 136 deal with a prospective new landlord's policy and intentions with regard to adaptations and alterations for disabled people. The new landlord may not be willing to accept the responsibility for adaptations if the tenant becomes disabled after the landlord takes over. We therefore feel that prospective landlords should be required to set out their policy in that respect. That would help tenants to make up their minds about the new landlord. It would also help tenants to consider the policies of their existing local authority landlord on adaptations and disability and to compare them with the stated policy of the potential new landlord as required under the amendment. Similar provisions should exist for tenants who are already disabled and who need adaptations or alterations to their homes.

Amendment No. 137 is designed to discover whether the Housing Corporation has the power to stop a proposed acquisition by a new landlord proceeding if the corporation is not satisfied with the new landlord's policy towards adaptation for existing disabled people or tenants who may become disabled. Will the new landlord be required by the Housing Corporation to have the duty that local authorities have regarding the provision of adapted housing for disabled people?

This group of amendments is intended to ensure that all tenants, especially disabled tenants, are fully informed about the attitude of prospective new landlords to disability and the provision of adapted housing. I beg to move.

Lord Swinfen

I shall be brief because the noble Lord, Lord Carter, has explained the series of amendments extremely well. The Government should bear in mind that with a gradually ageing population there will be, as time goes on, a greater number of people disabled through age quite apart from illness and accident. In addition, doctors keep injured people with disabilities alive whereas a few years ago they were unsuccessful.

Disability is a problem which could increase. Therefore it is much more important that landlords should make known to their tenants their policies on disability. It would be a terrible pity if the only people who were prepared to produce proper accommodation for physically disabled people were local housing authorities and housing associations. Housing associations obtain their money from the Government through the Housing Corporation. Housing authorities obtain their money, when they receive any, from the Housing Corporation.

We should bear in mind that standards are improving all the time; but it is essential to keep the private landlords up to the same standards as everyone else. It will do them no harm and cost them no money to tell their tenants what their policy is and then the tenant will know that he or she is secure; in other words, should they become disabled they will not have to move elsewhere.

Baroness Fisher of Rednal

I should like to support the amendment which has been so ably moved by my noble friend. However, I should like to ensure that those who are suffering from sensory handicaps are also catered for. With all the electronic equipment available in this new technical age there is much service being given to those living in the community who are deaf and blind. One would like to feel that such people are included, as well as those who suffer from physical handicaps.

Lord Renton

I too should like to express my support for the amendments. As my noble friend Lord Swinfen has said, there are many disabled people in this country. Indeed there was a recent survey carried out—the findings of which I must say I find hard to accept—claiming that 6 million of us are disabled. Of course it all depends on what one means by disabled. However, here we are dealing specifically with the physically disabled. It has been acknowledged by Parliament in statutes that public authorities have a duty to do what they can to help such people overcome their physical disabilities. Moreover, we have many voluntary organisations working to the same end.

As we are dealing with a new attitude towards housing, even though it is limited to secure tenancies, I think that we should seriously accept the strong reasons which were given by the noble Lord, Lord Carter, and my noble friend Lord Swinfen. Therefore I hope that my noble friend Lord Caithness will give a sympathetic answer to what has been said.

Baroness Elliot of Harwood

I should like to add one word to the discussion. I was for a long time—10 years, I think—chairman of a housing committee and that was one of the aspects that I was most keen about: that where houses are let to disabled people, the matter should be properly dealt with so that they can live like ordinary human beings, perfectly happily. It can be done, and indeed it was done. However, it was a new idea for many people—and I am talking about a long time ago. But now I think it is done rather hurriedly. It is most important that this provision should be part of any housing Bill, especially a new one.

Baroness Masham of Ilton

I too should like to support these amendments, as does my noble friend Lady Darcy (de Knayth) who is not too well at present. On the issue of housing, I must say that many disabled people have had a raw deal. My noble kinsman the Minister knows full well about such problems. Therefore I hope that he will give the Committee a sympathetic and helpful answer because many disabled people will be watching what is done by the Committee in respect of this matter.

The Earl of Caithness

I must say that I am sorry to hear that the noble Baroness, Lady Darcy (de Knayth) is not well and I am sure that all Members of the Committee will wish to join me in sending her our very best wishes for a speedy recovery.

Noble Lords

Hear, hear!

The Earl of Caithness

These amendments seek to impose two main changes to tenants' choice. First, to allow disabled tenants living in special housing to participate in tenants' choice; and, secondly, to ensure that applicant landlords must keep tenants, and the Housing Corporation, informed of their proposals and of their policy towards the disabled and that the policy should be a factor in deciding whether or not an application may proceed.

Amendment No. 130 would remove the exemption for tenants' choice of all tenants living in housing specially adapted for the disabled. It would leave unchanged the exemption of housing specially suitable for the elderly. Members of the Committee may ask why the disabled should be excluded from our tenants' choice initiative. In principle tenants' choice is aimed at opening up to competition the closed world of local authorities' general purpose rented housing. The housing covered by the paragraphs of Schedule 5 to the Housing Act 1985, which would be affected by Amendment No. 130, is by definition very specialised. Therefore we decided that specialised housing should not be open to purchase under tenants' choice, even though the purchasers would be approved social landlords who would subscribe to the tenants' guarantee.

I am sure the Committee will appreciate the tension here. We wish to give existing disabled council tenants full and equal rights with the able-bodied. However, there is a case for saying that housing authorities should be able to decide whether to retain specialised housing for those who need it in the future. We decided to follow the arrangements for the right-to-buy scheme. But I am willing to weigh the matters again, especially in the light of our future deliberations on Amendments Nos. 148 and 180, when we shall look at the right-to-buy precedent again. I believe we shall reach that stage tomorrow and as we wish to keep these two opportunities for tenants on parallel lines, perhaps we can return to the matter at a later stage in the Bill's proceedings when I shall be happy to discuss it with the noble Lord, Lord Carter.

I turn now to Amendment No. 132. The amendment would require that when an applicant landlord makes an application he must offer a statement of his policy towards the disabled. Amendment No. 137 would allow the Housing Corporation to prevent the applicant from serving a notice of intention to proceed, unless it is satisfied that the statement of policy will meet the needs of the disabled.

We believe that the two amendments are not needed. First, an applicant must be formally approved by the Housing Corporation before he puts in an application under Clause 95. The Housing Corporation will take into account many factors in deciding whether or not to grant approval. We shall ensure by issuing direction to the corporation that one of the conditions of any approval will be an undertaking from the applicant to abide by the tenants' guarantee.

Among other things, we intend that the tenants' guarantee will require landlords to pay special attention to the specific housing difficulties experienced by particular groups, such as the disabled. Perhaps I may quote from the draft document, from which I read earlier this afternoon, which was issued by the Housing Corporation on 3rd August. It has gone out for consultation to organisations, including those who represent the disabled. The passage is contained in Annex A3: Tenants' Choice landlords are expected to pay special attention to the specific housing difficulties experienced by particular groups including ethnic minorities, women suffering domestic violence, the disabled, and carers. Therefore it is set out clearly before us. The corporation will take into account an applicant's policy intentions, and in monitoring performance it will take account of his execution of those intentions. If the corporation becomes dissatisfied with his performance—for whatever reason—in the course of an application, it could revoke approval and prevent the application from proceeding. The corporation can already do this under powers on the face of the Bill. It is unnecessary to give it explicit powers to do so in relation to a specific requirement when a whole structure already exists to allow the corporation to do it in relation to a wide range of exhaustive requirements which we wish to impose. So I would ask Members of the Committee to agree with me that these provisions simply duplicate existing controls and by doing so might be thought to devalue the force of the many other provisions which are in the guarantee but are not stated on the face of the Bill.

Finally I turn to Amendment No. 136. This would require all disabled tenants to be told by the applicant about his proposal and especially about his proposals in relation to property adaptations or alterations for the disabled. I must emphasise that one other undertaking required by the corporation will be the requirement to keep tenants—whether disabled or not—informed at all stages of the tenants' choice procedures and timetable. Moreover, the applicant will, in setting out his proposed tenancy terms before them, make his intentions clear about the way he proposes to run the property, and about any improvements. Any offer he makes at this stage will be contractually binding. Once again, I see no need to duplicate requirements already met by other means.

Lord Renton

Before my noble friend leaves the point, perhaps I may ask this question. Can he say whether that is something which is just hoped and believed that the applicants will do, in a way which includes the needs of physically disabled tenants, or will there be an obligation to refer to their needs in the course of the statement that will be made?

7 P.m.

The Earl of Caithness

The wording is: Tenant's choice landlords are expected to pay special attention to the specific housing difficulties". It will be for the housing corporation to vet potential alternative landlords to the local authority and to make sure that they take account of a wide variety of people who need low-cost housing and who have particular problems—indeed, I mentioned some of them.

We believe that the specific points raised by the noble Lord, Lord Carter, and by my noble friends are catered for under the guidance given by the Housing Corporation. I shall come back to Amendment No. 130 (and that depends on our consultations tomorrow) but the gist of what I am saying is that this is a very important area for the disabled. We believe that it is already covered in the tenants' guidance. There are other important matters that are also covered by tenants' guidance, but to put the disabled on to the face of the Bill, although it is an important matter, would in fact devalue the other matters which the future applicant landlords will have to take into account.

Lord Renton

Before the noble Lord, Lord Carter, replies, I wonder whether I may draw attention to the following. My noble friend has said that guidance given by the Housing Corporation would be as effective as a statutory provision written into the Bill as a result of these amendments. Speaking for myself, I find that rather hard to accept.

The Earl of Caithness

I am sorry if I gave that impression. That is not what I meant to say. What I meant to say and what I hope I did say was that the very anxieties that have been expressed are already taken care of by the document which the Housing Corporation has produced. As I said to my noble friend Lord Campbell of Alloway earlier this afternoon, that document does not have the force of law, but at any time during the consultation exercise the Housing Corporation can withdraw its approval of a proposed landlord if he does not meet the stringent tests that the Housing Corporation sets out. Moreover, if that transaction has gone through it can monitor that new landlord at any time and may withdraw the approval that he has.

Lord Swinfen

Before my noble friend sits down, would he consider asking the Housing Corporation to make it mandatory for the proposed new landlord to set out what his ideas and proposals would be towards helping a person who becomes disabled—not someone who is disabled now but someone who becomes disabled later while a tenant of the new landlord? Particlularly as regards people who are past middle age and becoming elderly, there is a greater chance of their becoming disabled in one way or another, and therefore this is of great importance to them.

While I am on my feet I should like to mention one small point. My noble friend talked of the disabled. People who are disabled like to be known as people and prefer to be called disabled people. In working with disabled people this point has been brought home to me many times in the past, and I do not see why it should not be given wider prominence.

The Earl of Caithness

I shall certainly look at the point which my noble friend has raised, which is the valid point concerning not only those people who are already disabled people but those people who might become disabled people.

Lord Carter

I am grateful to the Minister and to other noble Lords who have spoken on this. I understand that the Minister is in difficulty on Amendment No. 130 and why he wishes to reserve his position until the discussions tomorrow. As to the rest of it, I have to say that in our discussions of a number of Acts and Bills we always hear the words: "It is all looked after. It does not need to be on the face of the Bill. The intentions are there". Those are fine words, but they do not adapt many houses.

I am not entirely satisfied with the draft guidance, which does not make it mandatory for a new landlord to carry out improvement, as the noble Lord, Lord Renton, has said. It is virtually left to his good intentions. I should like to read very carefully what the Minister has said and then consider what amendment is required on Report. I beg leave to withdraw the amendment.

The Earl of Caithness

Perhaps I could offer the noble Lord the opportunity to come and discuss it with me at any time. I should be happy to do so between now and another stage.

Lord Carter

I am grateful to the noble Earl.

Amendment, by leave, withdrawn.

[Amendment No. 130A not moved.]

Clause 92 agreed to.

The Earl of Arran

I think that this might be a convenient moment to break for dinner. I suggest that we return to the Committee stage of the Bill at 8.5 p.m.

[The Sitting was suspended from 7.5 to 8.5 p.m.]

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