Housing Bill

HL Deb 11 October 1988 vol 500 cc724-843

3.4 p.m.

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.]

Lord McIntosh of Haringey moved Amendment No. 142: After Clause 115. insert the following new clause:

("Certain tenancies excluded from bankrupt's estate

.—(1) In section 283 of the Insolvency act 1986 (definition of bankrupt's estate) at the end of subsection (3) (property excluded from the estate) there shall be inserted the following subsection— (3A) Subject to section 308A in Chapter IV, subsection (1) does not apply to—

1. (a) a tenancy which is an assured tenancy or an assured agricultural occupancy, within the meaning of Part I of the Housing Act 1988, and the terms of which inhibit an assignment as mentioned in section 127(5) of the Rent Act 1977, or
2. (b) a protected tenancy, within the meaning of the Rent Act 1977, in respect of which, by virtue of any provision of Part IX of that Act, no premium can lawfully be required as a condition of assignment, or
3. (c) a tenancy of a dwelling-house by virtue of which the bankrupt is, within the meaning of the Rent (Agriculture) Act 1976. a protected occupier of the dwelling-house, and the terms of which inhibit an assignment as mentioned in section 127(5) of the Rent Act 1977, or
4. (d) a secure tenancy, within the meaning of Part IV of the Housing Act 1985, which is not capable of being assigned, except in the cases mentioned in section 91(3) of that Act."

(2) After section 308 of that Act there shall be inserted the following section—

"Vesting in trustee of certain tenancies

308A. Upon the service on the bankrupt by the trustee of a notice in writing under this section, any tenancy—

1. (a) which is excluded by virtue of section 283(3A) from the bankrupt's estate, and
2. (b) to which the notice relates,

vests in the trustee as part of the bankrupt's estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee's title to that tenancy has relation back to the commencement of the bankruptcy."

(3) In section 309 of that Act (time-limit for certain notices) in subsection (1)(b)—

1. (a) after the words "section 308" there shall be inserted "or section 308A"; and
2. (b) after the words "the property" there shall be inserted "or tenancy".

(4) In section 315 of that Act (disclaimer (general power)), in subsection (4) after the words "reasonable replacement value)" there shall be inserted "or 308A".").

The noble Lord said: In moving Amendment No. 142 I should also like to speak to Amendments Nos. 174ZA and 175AD. These three amendments result from a commitment given in another place by a Member of the Government Front Bench. They deal with the problem of insolvency and what happens after an insolvency. I can mention this very quickly because I have been assisted by the Government in the formulation of these amendments. I understand that they are non-controversial.

The amendments exclude certain protected and assured tenancies from being vested in the trustee to a bankruptcy. That would clearly be nonsense and it frustrates the purpose of the whole exercise. I am sure that the Minister is far more able to expound upon the niceties of these amendments than I am. I should simply like to express my gratitude to the Government for agreeing to these amendments and for giving me the opportunity to present them to the Committee. I beg to move.

The Chairman of Committees (Lord Aberdare)

It has been drawn to my attention that last night Clauses 114 and 115 were not stood part. Perhaps I may first put the Question that Clauses 114 and 115 stand part of the Bill.

Clauses 114 and 115 agreed to.

The Earl of Caithness

I welcome this new clause, which gives effect to a reform proposed in another place, and the associated consequential amendments to which the noble Lord referred. I believe that a bankrupt tenant whose tenancy has no financial value is put in an even more unfortunate position if he should lose his tenancy too. If he loses his home, he is not going to be in a position to sort out his affairs, nor possibly to use the tools of his trade which the Insolvency Act also allows him to keep. This new clause ensures that tenancies which do have a value, assured tenancies for which a premium can be charged, for example, will continue to vest in the trustees, so that the creditors of the bankrupt will have access to any funds which that sort of tenancy may realise.

I believe this is a worthwhile amendment which could make a lot of difference to some unfortunate tenants, and in welcoming it I pay tribute to the noble Lord, Lord McIntosh of Haringey, and his noble and honourable friends and their advisers in identifying and acting upon this problem.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 142A: After Clause 115, insert the following clause:

("Commons Parts Repairs

. In the Housing Act 1985, art XV (Grants for Works of Repair, Improvement and Conversion)—

1. (a) In section 464A (Preliminary Condition for Application for Common Parts Grant) in subsection (1) delete
2. "(b) has power to carry them out and has a qualifying interest in the building or in a dwelling in the building" and insert instead—
1. "(b)(i) has been given consent to carry them out, and has a qualifying interests in the building or in a dwelling in the building.
2. (ii) for the purposes of this subsection, consent shall not unreasonably be withheld by a landlord to an application for a common parts repairs grant from a person or persons 726 with a qualifying interest; and if withheld other than under the procedure below, shall be treated as given.
3. (iii) for the purposes of this subsection, a landlord who has received a written application for consent to an application for a common parts grant from a person or persons with a qualifying interest, shall within a reasonable time—

(1) give consent, except in a case where it is reasonable not to give consent

(2) serve on the person or persons written notice of his decision whether or not to give consent, specifying in addition

1. (a) if the consent is given subject to conditions, the conditions; and
2. (b) if the consent is withheld, the reasons.".").

The noble Lord said: In moving Amendment No. 142A I should like to speak also to Amendments Nos. 142B and 142C. Although they have not been grouped together, I have also to make some preliminary reference to government Amendments Nos. 153A, 154, 157B and 179A.

These amendments arise because of a decision of the courts in the case of the Pollway Nominees. We are concerned here with the very complex issue of repair notices when these affect the common parts of a building. It became apparent that there is a problem about who should be served with a notice when it comes to repairs of the common parts. The case of the Pollway Nominees established that the notice could not simply be served on the freeholders because they do not necessarily have control of the flats occupied by the leaseholders.

A subsequent case of Clayhope Properties established that notices cannot be served individually on the leaseholders as they do not individually have control over the common parts. I believe that even the law would recognise this as a Catch-22 situation.

The purpose of my three amendments—and they are only probing amendments because it is a clearly complex legal matter with which I am not qualified to deal—is, first, in Amendment No. 142A to clarify on whom the repair notices should be served where these affect the common parts, and to allow the local authority to specify who shall be responsible for the work required to comply with the notice.

Amendment No. 142B allows the leaseholder and tenants of a block to apply for a common parts repairs grant—that is the next stage of the process—to get the necessary work done themselves. It provides that the consent for that should not unreasonably be withheld by the freeholder.

Amendment No. 142C requires that a repairs grant for common parts shall be mandatory if a common part repairs notice has been served. There are government amendments on this point. I have read them; but I cannot claim fully to have understood them or to have fully understood whether they meet all the concerns raised in the amendments. I think it is best if I leave it at that, I beg to move the amendment, having spoken to the other two, and I seek the wisdom of the Minister on this matter in order to see how well these amendments square with the amendments that he has tabled for later in the course of today's business.

The Earl of Caithness

I first deal with Amendment No. 142A. I sympathise with the purpose behind this amendment although I am bound to say that I do not feel that the amendment achieves its aims satisfactorily. In particular, it does not address the problem of landlords who cannot he traced. By replacing the criterion of power to carry out works with that of consent by the landlord, it effectively debars from grant those who have the necessary power, perhaps through the terms of a lease, but who are unable to apply for consent. An application for consent must first have been received by a landlord before a response can be made or a consent deemed to be given. In amending provisions to cover situations where a landlord behaves unreasonably, it is also necessary to protect the rights of those owning property to ensure that works cannot be undertaken without their knowledge.

As I have said, I am sympathetic to the purpose of this amendment but I consider that the difficulty which it highlights should be considered in the broader context of the revisions which we are proposing for the grant system as a whole, referred to in last year's housing White Paper. I assure the noble Lord that we shall bear this in mind in preparing new legislation.

As drafted, the effect of Amendment No. 142B is to provide an extended definition of "person having control" so that in relation to buildings containing flats, the persons who receive or would receive rack rent for the individual flats are collectively held to be the persons having control. I agree that following the legal judgment in the cases of Pollway Nominees Limited v. London Borough of Croydon and R. v. London Borough of Lambeth ex parte Clavhope Properties, which the noble Lord mentioned, there is considerable uncertainty and clarification is necessary. The principal area of difficulty, however, arises in connection with the common parts of buildings containing flats and, in particular with establishing on whom a notice requiring repairs should be served. Amendment No. 142B does not resolve this difficulty because the revised definition is still cast in terms of those who receive or would receive rack rent. As the legal judgments have established this formula cannot be successfully applied to common parts of a building.

In accordance with an announcement made during the Bill's passage through another place, I have tabled the amendments, to which the noble Lord, Lord McIntosh of Haringey, has drawn the Committee's attention. Those are Amendments Nos. 153A and 157B which contain provisions enabling authorities to serve repair notices in relation to the common parts of buildings containing flats. I shall be speaking in detail to those amendments later today; but I hope that the Committee will accept my assurance that this point of concern has been met and that the noble Lord will be able to withdraw this amendment and Amendment No. 142C which is also met in large part by my later amendments.

Lord McIntosh of Haringey

I am grateful to the Minister for his response. Obviously I am disappointed that the point we have attempted to raise in Amendment No. 142A—I accept the criticisms about the difficulties of our drafting—cannot be dealt with in the Bill. We should have preferred the Government to have dealt with the problems at one time and put at rest once and for all the minds of tenants in flats who have had difficulties with repairs and repairs notices. But we must be grateful to the Government for their Amendments Nos. 153A and 157B which, as we understand it—and subject to the explanation which the Minister will give later today—deal with the issues that we have raised in Amendments Nos. 142B and 142C. The wise course would be for me to withdraw Amendment No. 142A and consider further whether there is any possibility of putting an improved version into the Bill rather than delaying it for subsequent legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 142B and 142C not moved.]

Clause 116 agreed to.

Schedule 13 agreed to.

3.15 p.m.

Clause 117 [Rent officers: additional functions relating to housing benefit etc.]:

Lord McIntosh of Haringey moved Amendment No. 143A:

Page 83, line 4. at end insert— ("(d) shall contain provisions for a right of appeal by the administration authority against a rent officer's decision on rent allowance subsidy in any particular case;").

The noble Lord said: It might help the Committee if in speaking to Amendment No. 143A, which is not grouped with any other amendments, I were to say a word or two about the issues raised by Clause 117. This is the clause most concerned with housing benefits. My noble friends Lady Fisher of Rednal and Lord Stallard will be raising particular points on the clause as we go through the amendments on it. However, there is a common thread behind them all which ought to be exposed to the Committee.

Basically, the problem that arises with housing benefits under the regime proposed by the Housing Bill is that the attempt by the Government to encourage private rented housing—I believe this is a non-controversial statement—is likely to result in a larger number of higher rents. In other words, for more properties than before we shall be moving towards assured tenancies which my be assessed by the rent officers on the basis of market rents rather than the controlled rents which have existed in the past. Virtually all of those who are forced to take advantage of the housing benefit scheme (which has been established in this country for many years now) have done so on the basis that their rents have been controlled. There have always been some private tenants who have had to rely on housing benefit virtually to stay alive. But where it has been a scheme for that part of the private sector which deals with controlled tenancies, the scheme has been administered by local authorities, and most of the costs of the scheme have been met by central government subsidies. Until now, and under the system which started on 1st April this year, it has been taken for granted that the calculation of a rent allowance under the housing benefit scheme will be 100 per cent. of the claimant's rent. Above a certain income level there is a sliding scale whereby a smaller and smaller proportion of the rent is paid by the housing benefit scheme. I shall not again raise the issues about the taper and the sliding scale. They are important issues but we are not concerned with them in dealing with the clause.

We have a basic difficulty that the cost of the housing benefit scheme, if it is to be maintained intact—in other words if those in most need of financial support to pay their rent are to be protected—runs the risk of substantial increase. The Government will have to pay much more to achieve the same effect than they would have done when more of the rents were controlled and rent levels generally for people in housing need were lower than they are now. That is not a point of controversy. The Government have always recognised that there would be an increase in the costs of the housing benefit scheme. They have always given assurances that those in most housing need will not suffer. Indeed, we are looking for those assurances not only to he repeated but substantiated.

As we consider the clause and this series of amendments, we are concerned that the assurances given so far are not adequately enshrined in legislation. We are concerned that there is a possibility—even a severe possibility—of hardship if any of the loopholes which we see in the clause are not closed. Moreover we are also concerned if there is a possibility that those in housing need find themselves paying rent which is not fully reimbursed by the housing benefit scheme.

I now turn to deal with the first of the amendments. They have not been grouped together but I felt that that general introduction was necessary. The first is Amendment No. 143A which inserts a new subsection providing that the scheme: shall contain provisions for a right of appeal by the administering authority against the rent officer's decision on rent allowance subsidy in any particular case".

That is necessary because the rent officer will perform a new function. He will be required to determine a proper market rent. Because the local authority has the responsibility of administering the housing benefit scheme it is in its interest to make sure that the awards made by the rent officer are not excessive. It is in the interest not only of the local authority and central government which reimburse the costs of the housing benefit scheme but also in the interests of us all as tax payers who may otherwise be taken for a ride by landlords who achieved a higher rent than would properly be justified.

I hope that the amendment is not controversial because the then Minister of Housing gave a commitment during the Committee stage in another place. I am sorry that I do not have the column number available but he gave an undertaking that the regulations will provide for some sort of appeal by local authorities. At present they do not. I hope that the Government will feel able to accept the amendment which is in line with a commitment made by the Minister's honourable friend in another place. I beg to move.

The Earl of Caithness

Clause 117 is an important clause in the Bill. Like the noble Lord, Lord McIntosh, I believe that it may be helpful to the Committee to offer a few introductory remarks about the general principles underlying the clause before turning to the amendment in question.

It is an integral part of the Government's strategy for deregulating the private rented sector that housing benefit should be available to qualifying tenants paying rents up to the levels set by the market. Let there be no doubt as to our total commitment in that respect. However, given that, under the new housing benefit system once a tenant becomes eligible for benefit he has the whole of any increase of his rent covered by benefit. We take the view that controls are essential to guard against exploitation of the system by landlords, or indeed by landlords and tenants acting in collusion. We do not believe that the Exchequer, which finances the housing benefits schemes up to a rate of 97 per cent., should be expected to underwrite rents which are way above the level of rents paid on the open market by tenants who are not dependent upon benefits. Our intention is that housing benefit should follow the market and not lead it.

That is the objective of the new functions to be given to rent officers under the clause. The rent officer will have the task of verifying that the rent being paid by a private tenant who claims housing benefit is no higher than market level. In other words, no higher than the level being paid by tenants who are paying from their own resources without the assistance of benefit. The rent officer will also verify by reference to criteria laid down by the Secretary of State that the accommodation is not unreasonably large for the claimant's needs.

In a case where the rent officer judges the claimant's rent to be above market level he will assess what a reasonable market rent for the property would he. Where the accommodation is unreasonably large the rent officer will assess what the market rent for a reasonably-sized property would he. In both cases housing benefit subsidy will be available up to the level of the rent officer's assessment. The local authority will have discretion to pay benefit above the level of the subsidy but it will have to fund that excess from its own resources.

The proposed new arrangements have been the subject of extensive consultations with the local authority associations and rent officers. The detailed procedures will be set out in regulations under Clause 117. Members of the Committee will note that the first regulations under the provision will be subject to the affirmative resolution procedure and therefore there will be a full opportunity for Parliament to study and debate what we propose.

I now turn to Amendment No. 143A. The Government have always accepted that the assessments of rent made by rent officers under the new procedures should be subject to independent review—in effect, a right of appeal, to be exercised by the local authority responsible for handling the benefit claim within the framework of the established housing benefit machinery. We have had detailed discussions with the local authority associations and with rent officers as to what form such a right of appeal might best take. The key requirements are, first, that appeals should be conducted in a thoroughly impartial way; secondly, that the decision should be taken on the basis of a proper understanding of the current state of the market; and, thirdly, that cases should be handled speedily.

The Government's conclusion is that these three criteria can best be satisfied if appeal cases are referred to a group of, say, three chief or senior rent officers, two of whom would come from outside the area in which the original assessment was made. The rent officer who made the original decision would not of course be included. We envisage that the procedure will include a facility for the review body to inspect the property and for the local authority to make representations if it wishes. The review body would be required to give reasons for its decision if asked to do so. Where the review process results in a revised assessment of rent, housing benefit subsidy will be available up to that level.

We are confident that this will represent, on balance, the most effective solution. The necessary procedures will be set out in the regulations made under Clause 117. We see no need to include a reference to the appeal procedure on the face of the Bill. The regulations themselves will be subject to affirmative resolution and both Houses will therefore have a full opportunity to examine the appeal mechanism, along with all other aspects of the new arrangements.

I hope that that provides some of the details for which the noble Lord asked as a result of the statement made by my honourable friend in another place.

Lord McIntosh of Haringey

I am grateful to the Minister for that response but it gives rise to two difficulties. The first is the nature of the review body with which he has spoken. The proposal is obviously made with good will. The proposal that there should be a review body and a form of generalised recourse to a panel of senior rent officers is not worthless; I do not wish to dismiss it out of hand.

The first problem is that I do not believe that the proposal addresses the issue with which we are basically concerned; namely that, despite the subsequent reimbursement, the initial responsibility is with the local authority. The initial problem willarise—and I believe rather rapidly as the system comes into effect—with individual rents, individual rent officers' decisions and individual claims for rent allowance subsidy to the local authorities. However efficient and well meaning the review body may be I cannot see that it will provide redress for the local authority, central government or the tax payer as speedily as the measure which we propose in the amendment.

My second objection is that the proposal flatly contradicts what the then Minister of State for Housing said in another place. He said that they would provide for some sort of appeal by local authorities. The Minister is proposing a review body which does not provide for some kind of appeal by local authorities. It provides a more generalised way of seeking to rationalise the process of appeal and the work of the rent officers. That is not the same thing at all.

I am sorry to have to disagree with the Minister at such an early stage of the consideration of the clause. I do not believe that this is a satisfactory answer and I do not believe that it meets the needs of the case. I believe that it would be desirable for the Committee to make a decision in respect of the matter. I commend the amendment to the Committee.

3.30 p.m.

On Question, Whether the said amendment (No. 143A) shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 144.

DIVISION NO. 1
CONTENTS
Addington, L.	Leatherland, L.
Airedale, L.	Listowel, E.
Amherst, E.	Llewelyn-Davies of Hastoe, B.
Banks, L.	Lockwood, B.
Barnett, L.	Longford, E.
Blyth, L.	McIntosh of Haringey, L.
Bonham-Carter, L.	McNair, L.
Boston of Faversham, L.	Mais, L.
Bottomley, L.	Mar, C.
Briginshaw, L.	Mishcon, L.
Callaghan of Cardiff, L.	Molloy, L.
Campbell of Eskan, L.	Nicol, B. [Teller.]
Caradon, L.	Northfield, L.
Carmichael of Kelvingrove, L.	Oram, L.
Carter, L.	Perry of Walton, L.
Chitnis, L.	Peston, L.
Cledwyn of Penrhos, L.	Pitt of Hampstead, L.
Cocks of Hartcliffe, L.	Ponsonby of Shulbrede, L. [Teller.]
David, B.
Dean of Beswick, L.	Rathcreedan, L.
Diamond, L.	Reilly, L.
Donaldson of Kingsbridge, L.	Ross of Newport, L.
Dormand of Easington, L.	Sainsbury, L.
Elwyn-Jones, L.	Scanlon, L.
Falkland, V.	Seear, B.
Fisher of Rednal, B.	Serota, B.
Flowers, L.	Shackleton, L.
Gallacher, L.	Shepherd, L.
Gladwyn, L.	Somers, L.
Graham of Edmonton, L.	Stallard, L.
Gregson, L.	Stedman, B.
Grey, E.	Stewart of Fulham, L.
Grimond, L.	Stoddart of Swindon, L.
Hanworth, V.	Strabolgi, L.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Hatch of Lusby, L.	Taylor of Gryfe, L.
Hayter, L.	Taylor of Mansfield, L.
Hunt, L.	Tordoff, L.
Jacques, L.	Turner of Camden, B.
Jay, L.	Underhill, L.
John-Mackie, L.	Wallace of Coslany, L.
Kagan, L.	Whaddon, L.
Kearton, L.	White, B.
Kinloss, Ly.	Williams of Elvel, L.
Kirkwood, L.	Winstanley, L.
Lawrence, L.

NOT-CONTENTS
Abinger, L.	Ampthill, L.
Airey of Abingdon, B.	Arran, E.
Alexander of Tunis, E.	Ashbourne, L.
Allerton, L.	Balfour, E.

Belstead, L.	Margadale, L.
Bessborough, E.	Marley, L.
Birdwood, L.	Marshall of Leeds, L.
Blake, L.	Maude of Stratford-upon-Avon, L.
Borthwick, L.
Boyd-Carpenter, L.	Melville, V.
Brookeborough, V.	Merrivale, L.
Brookes, L.	Mersey, V.
Brougham and Vaux, L.	Middleton, L.
Broxbourne, L.	Monk Bretton, L.
Butterworth, L.	Montgomery of Alamein, V.
Caithness, E.	Mottistone, L.
Camden, M.	Mountgarret, V.
Cameron of Lochbroom, L.	Moyne, L.
Campbell of Alloway, L.	Munster, E.
Campbell of Croy, L.	Murton of Lindisfarne, L.
Carnegy of Lour, B.	Nelson, E.
Carnock, L.	Nelson of Stafford, L.
Cathcart, E.	Northesk, E.
Chelwood, L.	Nugent of Guildford. L.
Coleraine, L.	O'Brien of Lothbury, L.
Colville of Culross V.	Orkney, E.
Cottesloe, L.	Orr-Ewing, L.
Craigton, L.	Peel, E.
Cranbrook, E.	Platt of Writtle, B.
Daventry, V.	Porritt, L.
Davidson, V. [Teller.]	Portland, D,
De Freyne, L.	Portsmouth, E.
Denham, L. [Teller.]	Pym, L.
Donegall, M.	Reay, L.
Dundee, E.	Renton, L.
Effingham, E.	Rochdale, V.
Ellenborough, L.	Richardson, L.
Flies, B.	Rippon of Hexham, L.
Elliot of Harwood, B.	Rodney, L.
Enniskillen, E.	Romney, E.
Erroll of Hale, L.	St. Aldwyn, E.
Ferrers, E.	St. Davids, V.
Fortescue, F.	Saint Oswald, L.
Fraser of Kilmorack, L.	Saltoun of Abernethy, Ly.
Gainford, L.	Sanderson of Bowden, L.
Gridley, L.	Savile, L.
Grimthorpe, L.	Selkirk, E.
Hailsham of Saint Marylebone, L.	Sempill, Ly.
Hardinge of Penshurst, L.	Sharples, B.
Harmar-Nicholls, L.	Skelmersdale, L.
Harvington, L.	Southborough, L.
Havers, L.	Stanley of Alderley, L.
Henley, L.	Strange, B.
Hesketh, L.	Strathclyde, L.
Hives, L.	Strathcona and Mount Royal, L.
Hooper, B.	Strathspey, L.
Hunter of Newington, L.	Sudeley, L.
Hylton-Foster, B.	Suffield, L.
Ingrow, L.	Swinfen, L.
Johnston of Rockport, L.	Swinton, E.
Joseph, L.	Taylor of Hadfield, L.
Killearn, L.	Terrington, L.
Kimberley, E.	Teviot, L.
Lauderdale, E.	Thomas of Gwydir, L.
Long, V.	Torphichen, L.
Lonsdale, E.	Trafford, L.
Lothian, M.	Tranmire, L.
Lyell, L.	Trefgarne, L.
McAlpine of Moffat, L.	Ullswater, V.
McFadzean, L.	Vaux of Harrowden, L.
Mackay of Clashfern, L.	Waldegrave, E.
Macleod of Borve, B.	Whitelaw, V.
Manton, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.38 p.m.

Lord McIntosh of Haringey moved Amendment No. 143B:

Page 83, line 4, at end insert— ("(d) shall require the rent officer to reconsider his decision following any change in rent levels;")

The noble Lord said: This amendment follows on a similar tack to the previous amendment. It is still concerned, as was the previous amendment, with the content of the regulations which the Secretary of State is to lay before Parliament. However, it has a slightly different emphasis. We are saying that the regulations: shall require the rent officer to reconsider his decision following any change in rent levels".

The purpose of this amendment is to ensure that the system set up by regulations shall be flexible enough to keep pace with the changes in rent levels as they take place. I hasten to say that that could be in either direction. That does not necessarily mean a saving to the public purse or that reconsideration is going to result in a reduction of rent levels. However, as the Minister was trying to say in his response to the previous amendment, we hope that gradually rent levels will settle down and there will he a body of case law, so to speak, on market rents and it will become easier and easier for rent officers to set realistic levels.

We proceeded with the previous amendment because it did not seem to us that this would happen fast enough to achieve what we wanted—the immediate righting of a wrong when it came to a mistake by the rent officer. The Committee has taken its view on that matter. I should like now to think again about whether there is a way of achieving both what the Minister wants and what we wanted in moving that amendment.

Returning to Amendment No. 143B, we think that it adds to the flexibility of the process. It does not involve any significant increase in the administrative burden and we hope that it will commend itself to the Committee. I beg to move.

Lord Ross of Newport

Before the Minister replies, may I put a question to him? There have been cuts in the number of rent officers in this country. For example, we no longer have a rent officer resident within the Isle of Wight but the population is increasing substantially. We rely on rent officers from either Portsmouth or, I suspect, Southampton and Winchester. They tend to have separate levels of determination. The rents on which they base their information—presumably some from the Isle of Wight but others from the Portsmouth area—tend to be somewhat different from those from rent officers who come from Southampton. This was reported to me by the director of our housing association, of which I am a member.

May I take it that that situation will be looked into and that a rent officer will be returned to us? There may be other places in the country where the rent officer has been made redundant and a similar position applies. The rent officer has an important role to play. Every case will be referred to him (will it not?) where new rents are to be determined, not only in housing associations but by private landlords if they take over. I suggest—I think the Minister will agree from his professional knowledge—that it is important that someone should have local knowledge of rents pertaining in that area.

If there are these variations which have been reported to me, depending on whether the rent officer comes from Portsmouth or Southampton, I think it is important to get our own rent officer back. There must be cases elsewhere and perhaps the Minister will deal with that point when he replies.

3.45 p.m.

The Earl of Caithness

I first deal with the question raised by the noble Lord, Lord Ross of Newport. This morning I looked into this matter in preparation for today's debate and I know that in certain areas we do not have the numbers that we would like. That is why we are recruiting in order to strengthen the rent officer force.

I should like to say to the noble Lord—the Committee will know he is also a chartered surveyor—that if you are to carry out a valuation or rent assessment outside the areas you know best, you make sure you know the area and obtain your comparables first. As we have just discussed on the previous amendment, there will be a right of appeal, and if the rent officer does not get his facts right that may come forward as one of the matters that go to appeal.

I believe that the rent officers will take particular note, if they have to move out of their own areas, to look at different comparables and find different rent levels to make sure that they have the knowledge they require in order to obtain an accurate reflection of the market.

Turning to the points raised by the noble Lord, Lord McIntosh of Haringey, we envisage that, as a general rule, once the rent officer has made an assessment of rent under the new procedures no increase in the rent for that particular property will be accepted for housing benefit subsidy purposes for a further 12 months. Accordingly, no further referral to the rent officer ought normally to be required during that 12-month period.

This proposal rests on the assumption that a tenant will apply for housing benefit on the basis of the rent currently payable and that this rent, having once been assessed for subsidy purposes, will then hold good for a reasonable period thereafter. We have chosen 12 months for this purpose on the argument that this is consistent with the interval between rent reviews under the majority of tenancy agreements and indeed with the provisions as to access to the rent assessment committee under Part I of the Bill. We entirely accept that the 12-month restriction cannot be a hard and fast rule. One can envisage a number of circumstances in which there could be good reason for the rent to increase within 12 months of the rent officer's assessment. These include the situation where there has been a material improvement in the condition of the property or a change in the terms of the tenancy, or where the rent subsequently increases under a contractual rent review provision in the tenancy agreement. In such cases there certainly will be provision for the increased rent to be referred back to the rent officer for reassessment, notwithstanding the 12-month rule.

If the rent changes as a result of reference to the rent assessment committee under Clause 13, subsidy will be payable on the rent fixed by the committee which will supersede the rent officer's assessment. However, the noble Lord's amendment would involve a rather more openended requirement on the rent officer to reconsider an earlier decision on grounds considerably less specific than the ones we have in mind. Such a requirement could mean that the rent officer was subjected to more or less permanent pressure to review decisions he had only recently made on the argument that the market had moved. That does not seem to us to be reasonable, and in practical terms if large numbers of landlords and tenants tried to exploit the system in that way it would not be able to cope.

I hope the noble Lord will accept that our procedures will make provision for such situations where there may he genuine grounds for reconsidering an earlier decision and that he will therefore consider withdrawing his amendment.

I confirm that there will be an opportunity for both Houses to consider our detailed proposals on this point when the affirmative resolution regulations are made under Clause 117. We hope to lay them in the new year.

Baroness Carnegy of Lour

Before my noble friend sits down, can he explain to me one aspect which I do not think I understand, though I may be stupid in not doing so? The amendments concern the interests of the local authorities. What will happen if, for example, a tenant takes a house at above the market rent from, say, a private landlord? The tenant perhaps has a good job and feels able to pay that rent and particularly wants the house. If he then becomes unemployed he will receive benefit only at the level fixed by the rent officer—the market rent—and may well have to fund the difference.

How will such a tenant know when first taking the lease that that may happen? Will information be available to tenants to explain that if they go above what is likely to be the market rent they may be placed in that difficult position? That could occur; or do I have the position wrong?

The Earl of Caithness

My noble friend raises an important point, because one can imagine circumstances where there is a shortage of accommodation and a tenant who is in a well-paid job is prepared to pay above the market rent for a tenancy in order to obtain occupation of the premises. Such a person will no doubt be aware that a considerable amount of literature is available on this point. He can go to the DSS or the local authority, both of which have literature which is widely available. Although one would regret circumstances such as those described by my noble friend, I am sure that such a person would have ready access to the literature to help him in such an unfortunate situation.

Lord McIntosh of Haringey

I am grateful to the noble Baroness, Lady Carnegy, for giving me an opportunity to correct a misapprehension which I seem to have placed in her mind. She appears to think that our amendments are designed to protect the local authority. I have already explained, as the Minister confirmed, that the interests of the local authority are, in effect, also those of central government, who pay, as the Minister said, up to 97 per cent. of the cost of the housing benefit scheme, and therefore of all of us as taxpayers.

It goes further than that. The interests of the local authority are also the interests of the tenants because, as the noble Baroness has rightly indicated, the tenants must be concerned that they are not put into a position whether through ignorance or misfortune, where they find themselves paying a rent which will not be covered adequately by the rent allowance scheme under the housing benefits scheme. Therefore, not only is it important, as the noble Baroness said, that there should be adequate information available to tenants, but it is also important that the scheme itself should be watertight. The amendments tabled by my noble friends Lady Fisher and Lord Stallard seek to secure that.

Baroness Carnegy of Lour

Perhaps I may ask the noble Lord a question. In fact his amendment does not address the question that I have just asked. The question I asked concerns a matter of information and the need to know what the situation is before taking any steps. I do not believe that it has very much to do with the content of the amendment. I used it as an excuse to ask my noble friend a question which I do not believe he has answered very well for the moment. I shall pursue it later on.

Lord McIntosh of Haringey

It is the noble Baroness herself who says that the question was outwith the scope of the amendment and not me. I am not responsible for the noble Baroness keeping within the rules of order, but I am glad that she asked the question and was able to do so. If she is not satisfied with the answer she received about information, I hope that she will pursue the matter. I agree with the thrust of her question.

Turning to the Minister's reply to the amendment, there are clearly points that he raised about the review of the decisions of rent officers—perhaps not in every single case as we are suggesting in the amendment—which deserve careful study. I wish to give the Minister's reply that careful study. There is an indication that he is at least prepared to go part of the way with us and there is also an indication that there may be defects in the procedure that we are proposing in the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 143C:

Page 83, line 4, at end insert— ("(d) shall require that no reduction in an authority's subsidy entitlement take effect prior to a date seven days after the rent officer's decision is received by an authority;")

The noble Lord said: In moving this Amendment I speak also to Amendment No. 143D. We are again concerned in these amendments as is so often the case in this Bill, with the issue of timing. Amendment No. 143C says that the regulations, shall require that no reduction in an authority's subsidy entitlement take effect prior to a date seven days after the rent officer's decision is received by an authority".

The point is that we are here very definitely protecting the local authority. The local authorities should continue to receive central government subsidy on benefit that they have paid and will have to pay prior to the decision of the rent officer to ensure that the claimants and the local authority are not penalised just because the rent officer service has been subject to delay.

In response to the noble Lord, Lord Ross of Newport, the Minister said that he was aware that the rent officer service was under strength and that his department was taking steps to see that it was brought up to strength again. I believe that merely emphasises the force of my point that there are bound to be delays in the operation of the rent officer service while it is under strength whether it be in the Isle of Wight or in any other part of the country. It would be quite wrong for claimants and local authorities to suffer in respect of the subsidy they receive from central government because of defects and delays which are outwith their power to control.

Amendment No. 143D states that the regulations, shall require the rent officer's decision to take effect six months after the date the application was referred to him".

This is perhaps another way of putting the same point. We are saying that there must inevitably he a settling down period after a decision has been made. It seems right for the claimant, the local authority and central government as the payer of the subsidy, to have an opportunity to consider the decisions of the rent officers before they actually take effect.

I emphasise that all of these measures are not necessarily intended to be long-term commitments on the face of the Bill. It would be possible for the Government to find ways of meeting the requirements of these amendments because after a period of time (a year or two perhaps) when the assessment of rents by the rent officer service has settled down, they could amend the regulations accordingly and seek the approval of Parliament to amend the regulations. I hope that is within the spirit of the way in which the Government are approaching this legislation. We are not seeking to do other than to specify matters which the regulations shall include. We are certainly not saying that the regulations shall exclude any other matters which the Secretary of State thinks fit. There is still a good deal of scope for the Secretary of State, in forming his regulations and in amending them subsequently if that seems appropriate, to advise Parliament on what the regulations contain. These are not revolutionary amendments; they are genuinely intended to he helpful. I beg to move.

The Earl of Caithness

I believe that the words that stood out in the speech of the noble Lord, Lord McIntosh of Haringey, were when he said that the amendments should not be long-term on the face of the Bill. In that case one would need primary legislation in order to remove them because they would be there on the face of the Bill until another piece of legislation came along. That is why we believe, as the noble Lord rightly drew to the attention of the Committee, that the regulation procedure allows the flexibility that both the noble Lord, Lord McIntosh of Haringey, and we want.

As I said regarding an earlier amendment, discussions are continuing between the Department of Social Security and the local authority associations. This is one of the subjects of those discussions. I believe that it would be wise to await the outcome of the total discussions that incorporate not only what we have discussed previously, but the issues that the noble Lord has raised as well as a variety of other points. I confirm to the Committee that I shall draw to the attention of my right honourable friend the Secretary of State for Social Security the points that the noble Lord has made. I hope that Members of the Committee will agree that the right way to proceed is to look at the regulations when they are presented to you.

Lord McIntosh of Haringey

We had a substantial debate yesterday on the issue of the words "may" and "shall". At one stage the Government were arguing that "shall" is really no different from "may". Although I maintain the view that "may" is different from "shall", on reflection I take the view that my amendments should have said "may" so that they could be amended, rather than "shall". I believe that the Minister's criticism of me in that respect is correct. I wish to seek leave to withdraw the amendments, but I do not wish to do so without saying that I welcome what the Minister said concerning the discussion that is to take place on these matters. We shall be happy to take any part that seems appropriate in the discussions. I know that the local authorities and the very many professional bodies concerned with housing, will also be keen to do so. I am sure that they will be as glad as I am to have heard what the Minister said.

The Earl of Caithness

I am grateful to the noble Lord. It allows me to thank him for what he has just said and also to comment on one other point about the rent officer service. Although we are aware that we need to recruit more people, it is not because the rent officer service is under strength at the moment for the job that it is doing; we require extra people for the enhanced role of the rent officer service.

Lord Harris of Greenwich

As I understand what the Minister has said, the service is up to establishment. Is that correct?

The Earl of Caithness

I said that the service is not under strength for the job that it is doing now, but we need more people for its enhanced role.

Lord Harris of Greenwich

Perhaps before the next stage of the Bill the noble Earl will be good enough to answer the question I have just put; namely, whether the rent officer service is or is not up to establishment. Perhaps he will deal with that in writing.

The Earl of Caithness

I thought I had answered the noble Lord. The answer is yes.

Lord McIntosh of Haringey

I hope that we shall not be deceived into thinking that the rest of this afternoon's and this evening's business will proceed with the degree of sweetness and light that has been apparent so far. Matters of substantial disagreement will arise very soon. However, we feel that some progress has been made as a result of the Minister's reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 143D not moved.]

4 p.m.

Baroness Fisher of Rednal moved Amendment No. 144:

Page 83, line 15, after ("may") insert ("not").

The noble Baroness said: With the leave of the Committee I should like to speak also to Amendment No. 145. The amendments seek to help the elderly and disabled. At the moment the housing benefit regulations provide safeguards for certain groups of claimants, including the elderly and the disabled. They ensure that local authorities do not use their powers unreasonably. If a local authority wants to, it can decide that the rent allowance is too high. It can clamp down on an elderly or disabled person and tell him that he must move out. A local authority would not normally do that but if the Bill is not amended an authority might have to do so in the future.

The Minister has given some assurances this afternoon about rent allowances. He referred to the market rent, but it is difficult to understand the terms "market rent", "unreasonable rent" and "fair rent". I do not know who will decide the eventual nomenclature, but if the rents are unreasonable the Minister has said that action will have to be taken. Such action arises with the rent stop. Clause 117 sets the maximum rent level that will count for rent allowance and this has been colloquially called the rent stop. Local authorities will be placed in a difficult position when dealing with an elderly person living alone in a house that is too large for him. A disabled person may be left in his parents' home which is too large for him. Unless the local authority satisfied him completely he would continue to live in the parents' home, or, in the case of the elderly person, in his own home.

In those circumstances any increase that was not met by the Government would have to be paid by the local authority. The Government through their rent officers impose a rent ceiling. If the reasonable rent is higher than the rent officer's figure the person involved will either have to move out of the property and into something completely unsuitable, or perhaps go into arrears. This may mean that some elderly people will go without essential food items. The number of people involved is not large but they arc an important group.

I appeal to the sympathy of the Committee in regard to this clause. If a local authority finds that the premises should still be used for the elderly person or for the disabled person but the rent is higher than what the rent officer has decided, it can decide on humanitarian grounds that the person should stay there. Local authorities can do that, but if they do so the responsibility must rest with them. The local authority through its rates, or in the future through the community charge, will have to find that amount. That is unreasonable. The Government are not accepting their responsibility. When no alternative accommodation can be provided for an elderly or disabled person and the local authority uses its discretionary powers, an exception should be allowed. That is the purpose of the two amendments. Amendment No. 144 seeks to ensure that the rent stop power is not used and to provide authorities with the discretion to meet the full rent when it is appropriate. Amendment No. 145 seeks to ensure that authorities are not penalised for carrying out their legal duty after exercising their discretionary powers in order to meet the genuine needs of elderly or disabled claimants. I beg to move.

The Earl of Caithness

The noble Lord, Lord McIntosh of Haringey, said when withdrawing a previous amendment that not all the progress today would he sweetness and light. I fear that on this amendment we have struck the first of the areas where the approach is contrary to that of the Government.

In a case where the rent officer judges the rent paid by a benefit claimant to be above market level or considers his accommodation to be unreasonably large by reference to the specified criteria, the rent officer will assess what a reasonable rent for the property would be, or, alternatively, what the rent for a reasonably-sized property would be. Housing benefit subsidy will then be available up to the level of the rent officer's assessment. In these cases the local authority will, at least for the time being, be free to pay benefit above the level of subsidy, but only if it is prepared to bear the cost from its rate fund. However, we have always made clear our intention in clue course to place limits on housing benefit itseIf—that is, not just subsidy—in cases where a claimant is occupying unduly expensive accommodation of a kind which the vast majority of people could not expect to afford.

In the course of our debates yesterday the right reverend Prelate the Bishop of Southwark, who I am sorry to see is not in his place at the moment, emphasised the importance of directing housing benefit to those who are in genuine need. I can reassure the Committee that the Government entirely support this objective. Hence the need, in our view, for a restriction in respect of accommodation that is clearly at the very top of the market. We propose to introduce such a restriction as and when adequate evidence on open market rents is available. We have also indicated that we would consider wider restrictions on benefit at a later stage should that prove necessary.

Clause 117(4) thus provides an enabling power for the Secretary of State to make regulations requiring housing benefit to be restricted by reference to rent officers' determinations under the new procedure. By negativing the provision Amendment No. 144 will strike at a key element in our strategy for preventing abuses of the housing benefit system and it is therefore unacceptable to us.

Amendment No. 145 is also completely at odds with the basic approach we are adopting on housing benefit. Our view is that the rent officer will be best placed to decide whether or not the rent paid by a benefit claimant is reasonable by reference to the open market and, if it is not, to decide what a reasonable rent would be, as I have made clear. Benefit subsidy will then be available up to the level determined by the rent officer. The amendment, however, would allow the local authority to superimpose its own judgment on that of the rent officer and to pay benefit up to whatever level it thought fit, with subsidy payable in full. That would be quite unacceptable. We accept that authorities should have discretion to pay benefit above the level of rent set by the rent officer but we do not believe that such excess payment should be underpinned by subsidy.

The noble Baroness expressed particular concern about how the proposed restrictions on benefit, especially the restrictions in respect of over-large accommodation, will apply in the case of an elderly widow or widower who is left to live alone in the family home. That is a most important issue. We entirely accept that such situations need to be considered most carefully. Indeed they are being fully examined at present in the detailed discussions which are taking place between the Department of Social Security and the local authority associations. Members of the Committee will be advised of the outcome of those discussions when it becomes available.

I put it to the Committee in this way. Where one has an international market such as that which exists in central London, is it right that the state should, for instance, fully subsidise the housing benefit of someone living in a penthouse flat in Mayfair? That is the kind of criteria we are looking for.

Lord Stallard

I must say that I welcome the statements which have been made, especially the reference to old age pensioners and the disabled living in accommodation which is larger than they may need for many reasons. Indeed the Minister outlined one or two such reasons. However, he then spoilt it all by referring to a gentleman living in a penthouse. In all my years of experience in dealing with housing I have never heard of a fellow living in a penthouse in Mayfair claiming housing benefit. Of course I may be wrong, but I shall be interested to hear whether the Minister can supply details of the number of such cases. I shall be quite happy if he wishes to enlarge upon the "Mayfair" case.

The Earl of Caithness

I stated that case as an example of a situation which could arise. As the noble Lord knows, it is entirely possible, indeed it follows on from the situation that my noble friend raised in respect of the last amendment.

A noble Baroness

The amendment is not about that issue.

4.15 p.m.

Lord Stallard

I must say that it was a good try by the Minister to clarify the situation but it did not convince me. Further, I do not think it will convince the noble Baroness, Lady Carnegy of Lour, who made a most excellent point about something which also worries me. As I read the existing legislation, if someone is unfortunate enough to find himself in such circumstances he will ultimately be evicted should the matter progress through the usual procedures. He will not be able to pay the rent.

As I understand it, if the rent officer fixes a rent under the new powers. that will not necessarily be the rent. That is a different situation to now, where the local authority can refer cases for controlled tenancies to the rent officer and receive a rent which is agreed and which will be paid. It will now lose that power. Even when the rent officer fixes what he considers to be a reasonable rent, that may not necessarily be the rent which will ultimately be charged because there is still scope for the landlord to charge what he considers to be a reasonable rent. Indeed the rent can be, and perhaps will be, above what the rent officer maintains is a reasonable allowance to attract housing benefit.

Therefore the case put forward by the noble Baroness would fall into that category; that is, that the high rent will stand as fixed and the unfortunate fellow who cannot meet it and who may be unemployed or sick, will have to find other ways of doing so. He can apply for housing benefit and he might be allowed such benefit up to the level that the rent officer agrees, but not above that figure. Therefore, if he was still unable to pay, the matter would go through the legal process and he would eventually be evicted. That is what would happen under these procedures.

It is quite clear that the Government are determined—no one will deny it—totally to deregulate rented accommodation. That has always been their aim and indeed they have introduced many Bills to try to bring that situation about. On this occasion they have used two methods. First, they are setting maximum rent levels, using the rent officer service to set levels that will count for rent allowance. In other words, the rent officer is now allowed to calculate housing benefit, or the allowance which will apply for housing benefit.

It is a brand new role for rent officers and it is something which bothers me and leads me to my opposition to the whole rent stop procedure. Such a function was never envisaged as a role for the rent officer. Moreover, he will not even have that role completely; even when he has fixed the rent, as I have already said, there is still provision for the rent to be raised yet higher. Therefore the rent officer service has been totally destroyed by this provision. He will become a tool, so to speak, in the process of deregulation by helping the Government to achieve their deregulatory procedures.

It is for that reason that I oppose rent stops generally, but especially in regard to the cases which have already been mentioned—cases which would have attracted housing benefit when local authorities had discretion on such matters. Indeed the national scheme set out discretionary powers for local authorities. It provided local authorities with increased incentives in addition to discretionary powers under the old housing benefit schemes to reduce a rent allowance if the rent payable was unreasonably high or if the claimant occupied a dwelling larger than was reasonably required. They had those discretionary powers, but they have now gone under the new rent officer proposal.

In such circumstances it is inevitable that elderly people will suffer because local authorities may not be able to accept the penalty. The incentive is now for local authorities to opt out of paying the extra high rent or rents which are deemed to be above the theoretical market value. They will now say, "We can't take on this extra burden of housing benefit for rents which we would have considered to be eligible for housing benefit under the old scheme". They can no longer do so because of all the restrictions and financial restraints placed upon them, plus those proposed under the poll tax—if and when it is introduced. That situation must worsen the conditions of existing tenants who are on housing benefit and some who are in accommodation where the rent would be deemed to be above market value. The tenant's income is still the same, and indeed the rent will still be the same or slightly higher, but because of the new procedures it will be outwith the local authority's discretionary powers to pay the housing benefit and the tenant will have to find the difference. One does not have to be a mathematical genius to understand that there are few tenants in such circumstances, whether they be pensioners, disabled or handicapped, who will be able to find the money needed to finance the extra payments for rent because their housing benefit has now been drastically reduced.

That is why I support the amendments so ably moved by my noble friend Lady Fisher. She appealed for sympathy, but I cannot see that she will receive any, as I have not yet seen any sympathy from the Government in the matter. However, I appeal for common sense. We are building up many problems which we shall not be able to solve, and they will become worse.

Indeed, many other difficulties will arise. For example, social difficulties in relation to benefits and all kinds of other problems will arise the minute we start approaching rents from this level. It is a punitive level which punishes tenants and which is intended to punish local authorities. It will eventually ensure that three, four, five or even more different rent levels and rent schemes exist alongside each other in any one area at a time. There will be local authority rents, controlled rents, decontrolled rents, housing association rents, new private landlord rents and many other kinds of rents floating about. The powers, regulations and rules that most people understood under the rent officers' powers will now be swept away and the rent officer will just become a tool in the deregulatory process which the Government are determined to set up. I should like to support the amendment.

Lord Harmar-Nicholls

I think the movers of the two amendments are making their efforts at the wrong point in the Bill and in matters that go along with the Bill. There is no doubt that, under the terms of the Bill as it would stand with the amendments, while we may not know anybody living in a penthouse in Mayfair who might benefit we know that there would be people living in unnecessarily expensive housing. That would be unreasonable.

I make an appeal to the noble Baroness and the noble Lord who are moving the amendments. One recognises the force of the argument, and I have no doubt that they have specific cases in mind in putting their points, but the time to put those is when we are dealing with the regulations which will flow from this Bill. My noble friend is absolutely right that to put this in the Bill itself would be perpetuating in the Bill matters which could well turn out to be unreasonable and expensive. I am sure that is not what the noble Lord intends in moving the amendment.

When we come to the regulations which will help the implementation we can get down to the details which have been raised, and we can ensure that the regulations specifically deal with the points without opening the door wide for all sorts of anomalies.

Lord Stallard

Before the noble Lord sits down, the argument about regulations is one that we constantly have, whether it concerns social security or any other matter. We never see the regulations. They are never produced in time for us to look at them with the Bill, or even shortly after the Bill at any stage.To say that we have to wait until the unknown regulations, which may contain all sorts of ridiculous and outrageous propositions, are available before we can comment on what we think ought to be stated in the Bill is ridiculous.

Lord Harmar-Nicholls

The noble Lord may say that, but Parliament has to work. Building up a statute book such as we have is not as easy as the noble Lord implies. If these amendments were in the Bill it would leave wide open opportunities for anomalies, which I know the noble Lord would not want. When one has to get down to the details it is quite proper to deal with specific points in the regulations. We have been told that early next year the regulations, which will need the affirmative approval of this Chamber before they can be attached to the Bill, will be available. That is the time to argue these points.

At this stage I do not want to cross swords with the feeling behind the amendments as they have been expounded by the noble Lord and the noble Baroness, but I am saying that there is no point in ruining the Bill when the matters which they have in mind can be dealt with when we have the same power in affirming the regulations that we have within the Bill.

Lord Stoddart of Swindon

Will the noble Lord give way? The noble Lord has mentioned regulations and has said that we shall have an opportunity to discuss them. However, we shall not have an opportunity to amend them. We can either agree them or disagree with them. Indeed, it would be odd for this Chamber to disagree with them in any event. If we had draft regulations surely he would agree that at that stage at least there would be an opportunity to have some influence on the final regulations which were made and brought before this place. We have not had that opportunity. Would he at least support a call to have draft regulations brought forward before this Bill completes its passage through this place?

Lord Harmar-Nicholls

We have to have some confidence in the government of the day, whoever they are—not this particular Government; the government of the day—if we want to be a legislative Chamber or part of a legislative Parliament. I do not object to the noble Lord and the noble Baroness making the points they have made at this stage, but they should have enough confidence to know that my noble friend and his department generally will listen to their points and take them into account when they are formulating the regulations, which will have to have the affirmation of this place before they can be accepted.

To have a Bill which would be as untidy as this would be if these matters were included in the main body of the Bill in anticipation of all sorts of extreme things that might or might not happen is not good parliamentary procedure. At the end of the day I do not think it is possible for governments to govern with that sort of restriction placed upon them.

Lord Stallard>

Before the noble Lord sits down, may I#—

Lord Ross of Newport

I think the noble Lord has had a fair go.

In reply to the noble Lord who has just sat down, very obviously the Government having totally lost confidence in local authorities have some discretion. That is what we are arguing about. We want still to have that discretion and have some chance of claiming finance back from the Government, at least for a period.

I think the Minister said in an earlier answer in one of our debates that discussions were taking place at the present time with the Department of Health and the Department of Social Security on this problem. We see headlines in newspapers such as the Sun and the Star about people who are being forced out of accommodation because they can no longer afford it. I am not talking about penthouse flats but about quite simple accommodation. The noble Lord may have seen a comment in the Daily Telegraph the other day that a rent officer in Buckinghamshire reckoned that the average market rent there was £800 a month. If that really was the going rate for rented accommodation, obviously most people would think that was totally out of court; but possibly it is true.

The Minister knows that it will take time for the situation to settle down. He knows also that from these Benches we rather want the Government to succeed in bringing private rented accommodation back on to the market. People want to see it happen, as I said earlier. There will be teething problems, and in spite of what the Chancellor of the Exchequer has said about the raising of interest rates steadying the housing market everybody believes that the house they bought three months ago is worth at least £10,000 more now. I can tell you that for a fact. It will take a long time before it sinks in that people are not going to make increasing profits out of the houses that they bought not very long ago. People must face the fact that the market will settle down, and possibly there will be some fall in values; but it will take time.

The same applies with rents. We are entering a new area where one is looking for comparisons in unfurnished rented accommodation. Therefore, if the Minister could say at this stage that he is perfectly prepared to consider that position and to leave some discretion to local authorities in cases of hardship, such as those which have been so vividly described by the noble Baroness, Lady Fisher and others, at least it should be possible to claim back in certain cases where it is seen that they have behaved properly, and they do not have to take the can back. It will undoubtedly rebound on them in publicity if they refuse to assist people who find themselves evicted.

I just wish to put it to the noble Lord that I think there has to be a phasing-in period, and that should be met in some way in those regulations.

Lord Trafford

If I may take up the point which was made, and return to the specific amendments, I have some sympathy with the arguments put forward by those who have moved the amendments, but the weakness of the particular way in which they have been written. apart from anything which my noble friend Lord Harmar-Nicholls said, is that they are asking for two things to happen. One is for an open-ended commitment, which is always very difficult to give wisely in such a large field; and, secondly, to perpetuate some of the problems which have arisen over the years in the field of renting—namely, distortions.

We have just heard from the noble Lord, Lord Ross of Newport, about distortions in house prices which will take time to decline. They have been fuelled in a similar way, one might say, by an open-ended commitment, though in this case it was not a question of housing benefit or anything else, but it has happened and I agree that it will take a little time for that to be sorted out. In both those situations it seems to me that we are asking for both these contradictory things to happen at the same time in terms of the specific amendments; namely, an open-ended commitment, which is in our power to give but we would probably be unwise to give, and an encouragement to a distortion.

I would not go so far as my noble friend. I think he hinted in a veiled sense at the fact that you could rig the market if you were a tenant and an unscrupulous landlord and there was an open-ended commitment. Assuming that most people are honest—I hope that is true, but experience suggests that it is not always so—that would not happen, but it must be regarded as a possibility. Although I have great sympathy with the arguments put forward by the noble Baroness and the noble Lord, it is the open-ended nature, the possibility of distortion—we must consider the possibility of fraudulent distortion of the market—that would give me some concern with respect to the amendments.

Of course, were my noble friend the Minister to make a point about the regulations—although I fully take the point made by the noble Lord, Lord Stoddart, that we can only reject or accept but not modify—and to say that the point would be included in the type of discussions which will be undertaken, that might better answer the question than the amendments.

4.30 p.m.

Lord Stewart of Fulham

The noble Lord, Lord Harmar-Nicholls, has urged us to wait for the regulations. However, he will have heard it argued in this place, as the rest of us have, that this place is not entitled to say no to regulations or other secondary legislation which has been approved by the other place. That is a disputed point, but if that view is correct proposals that we can have another go because the matter will come before us in regulations are worthless, because the point will have been decided before the regulations arrive here.

I do not know whether the noble Lord can give me an absolute assurance that I am mistaken on that point and that we have a right. However, with great respect, I should not be satisfied if he could. We should need an undertaking from the Government that when the regulations come before this place it is within our power, if we wish, to say no. We should know about that point before we are asked to put any further trust in regulations.

Lord Harmar-Nicholls

Under its distinct rules, this place may not be able to do what the noble Lord said, but Parliament can, and the other place is listening, and the Government are represented in both places. If the point is made at this stage, it can, and I have reasonable confidence that it will, be taken into account when the regulations are drafted. If this place, because of its narrow powers in relation to regulations, cannot deal with the point, Parliament can and we are part of Parliament.

Lord Stoddart of Swindon

The noble Lord raises an important point. However, as my noble friend has pointed out, it is not traditional for this place to disagree with and vote down regulations that have been made by another place. That point is indisputable. The noble Lord will recall—I believe he took part in the discussions—that during the course of the Gas Bill, in which I played some part, we were given a draft licence, although not the whole and final licence, which was to apply to the newly privatised gas industry. This place was able to comment upon the draft licence. As a result of comments and perhaps even votes in this place, the licence was amended. What is being requested is that we should see the draft regulations first. We may then be able to have some influence upon them.

The noble Lord says that we should trust government. The fact that we are here implies that no one ever trusts government. Therefore, we should see the regulations before they are published and we should then be able to help the Government to draft them properly.

Lord McIntosh of Haringey

I should hasten to get in before the Minister comes back on this point so as to give him an opportunity to improve on his earlier reply, which struck chill into my heart. When it becomes known to those who have to be on housing benefit, it will strike a chill into their hearts, the hearts of those in most housing need. The Minister did not simply defend Clause 117 as drafted, he said that if we did no achieve the restriction of expenditure on housing benefit which was sought there might have to be further regulations and action by the Government to ensure that we achieved it. That cannot be achieved without some hardship to those who are in the impossible trap between high rents, which are the only properties available to them, and low incomes, which is why they are in that position in the first place. Our prime concern at all times must be to avoid that hardship.

Let us try to start with some common ground. We do not disagree, and I have never said that we disagreed, with the provisions of the housing benefit regulations of April 1988 which seek to avoid abuse of the rent allowance scheme. The 1988 housing regulations, which were introduced only six months ago and therefore have hardly had a chance to be fully implemented, gave a discretion, as my noble friend Lord Stoddart said, to local authorities to reduce a rent allowance if the rent payable is unreasonably high or if the claimant occupies a dwelling larger than is reasonably required. What more can we ask than that? The local authority has a discretion and an incentive, because, if it does not avoid paying unnecessarily high amounts, it will lose the difference in subsidy. If we have both a discretion and an incentive to local authorities to see that the scheme—a scheme which was only introduced by the Government six months ago—works properly, why are the Government now seeking to go back on that arrangement and to introduce into the Social Security Act 1986 totally new provisions, by regulation, to toughen the position and make it more difficult and increase the risk of hardship? That is what it will do, and that is what the amendments are about. Let us be clear about that.

There are a few ways only in which those people who are subject to the rent stop can get out of their position. When I say "subject to the rent stop", I hope that the Committee knows what I mean. I mean that their income is not high enough to allow them to pay their rent; they have to pay a rent higher than is permitted for the rent allowance scheme; and therefore out of an inadequate income they have to pay extra money in order to be housed. If people are in that position, what can they do? They can go without food, heat or other essential items in order to pay the rent. They can go into arrears while they are looking for cheaper accommodation, or they can go into arrears and in the end land up homeless. That is what will eventually happen.

I said yesterday that I did not accuse the Government of seeking changes to the law which will immediately substantially increase the number of homeless, but over a period of time the rigid application of the procedures which are now to be made possible in Clause 117 will inevitably increase hardship, poverty, malnutrition, and the number of those who ultimately land up homeless. That is what my noble friend's amendments are about. That is why they deserve support, and that is why no smokescreen about regulations on parliamentary procedure should divert the Committee's attention and that of the wider world from the full implications of Clause 117.

We already have regulations which permit the Government's objectives of securing the efficient operation of the rent allowance scheme. We have that in regulations which they introduced only six months ago. Clause 117 goes back on those regulations. It introduces new possibilities for the Government to save money at the expense of the needy, the disabled and the elderly. We should oppose them, and the way to oppose them is to support my noble friend's amendment.

The Earl of Caithness

I am grateful to all noble Lords who have taken part in the debate. I reassure the Committee again that what has been said will he taken into account in the discussions. My noble friend Lord Skelmersdale has listened throughout the debate on housing benefit. I know that he will take hack what your Lordships have said and discuss it with our right honourable friend the Secretary of State.

I wish to thank my noble friend Lord Harmar-Nicholls for what he said. I thought that he put in a very succinct way what I was trying to say about the possibility of the system being abused.

The noble Lord, Lord Ross of Newport, raised an important point about phasing in as we enter a new era. I assure him that this is one of the items currently under discussion between the local authority associations and the Department of Health and Social Security. We are already acutely aware of many of the points raised in the debate.

I should like to pick up one point made by the noble Lord, Lord Stallard, about the assessment of the rent officer being binding on the landlord. Under the clause the rent officer's assessment will not be binding on the landlord and tenant. These procedures are not designed as a form of statutory rent control; they are designed to ensure that the taxpayer is not called on to underwrite rents that bear no relation to the general market rent.

Lord Stallard

I hope that the Minister will accept that that is what I said, or meant to say. One of' the problems is that this will not in future be recognised as the acceptable rent for housing benefit and the rent can go sky high. The figure is almost immaterial now.

The Earl of Caithness

I am glad that we agree.

As to the other point that the noble Lord raised, we accept that the interaction between the subsidy controls and the need for local authorities to consider the position of elderly and disabled claimants who might find it difficult to move to smaller or cheaper accommodation has to be very carefully considered. However, the noble Lord will know as well as any of your Lordships that the housing benefit regulations made under the Social Security Act 1986 limit authorities' rights to restrict benefit in certain areas of this kind. I repeat that the Department of Health and Social Security is discussing these issues with the local authority associations. This will be brought before your Lordships in the form of the regulations.

I wish finally to pick up one point made by the noble Lord, Lord McIntosh of Haringey. It is not the Government's intention at present to impose a limit generally on housing benefit paid to claimants with deregulated lettings. We think that there should be a rent stop, to use the noble Lord's term, in the case of over-expensive accommodation in the way that I described earlier today. We are simply trying to prevent both exploitation of the system and the bill for that, which would have to be picked up by central government.

Baroness Fisher of Rednal

I am very disappointed by the Minister's reply. Those about whom I spoke, the elderly and the disabled, are not the people who will exploit the Bill. Members of the Committee will remember that I specifically spoke about the disabled and elderly who are living in accommodation which is now unfortunately too large for them. This may be for many reasons—families may have left home or father and mother have died and the disabled son or daughter is left. Rather than exploiting the system, they are the people who need help from the system, whether in the form of housing benefit or attendance allowances.

I was concerned that the Minister in his reply even used the word "abusing". In regard to the local authority superimposing something on what the rent officer does, as my noble friend Lord McIntosh of Haringey said, under the present safeguards the housing benefit regulations allow this to happen. We are ensuring that it continues in future. If the amendment is not carried, those benefits for elderly and disabled will go. I note that the Minister shakes his head, but there was nothing in his reply to assure us that that would not take place.

We must wait for the regulations. As the noble Lord, Lord Ross of Newport, and my noble friend Lord McIntosh of Haringey said, the new housing benefit regulations have been in operation for six months only. However, they are already causing a great deal of concern in the very groups of people about whom I am speaking, the elderly and disabled. Under the new social service regulations, the Government are giving with one hand and taking away with the other.

As to what the noble Lord, Lord Harmar-Nicholls, said, at the time of our discussion of the community charge or poll tax, we heard from him about the elderly widow who was living alone paying as much as the man next door who was earning £6,000 a year and had four sons earning £5,000 a year. The noble Lord pleaded on behalf of that person who would benefit under the proposed poll tax.

As I have said, the Government are giving with one hand and taking back with the other in the matter under discussion. So strongly do I feel for the elderly and the disabled in the community—they must have champions against the Government—that I wish to press the amendment.

4.48 p.m.

On Question, Whether the said amendment (No. 144) shall be agreed to?

Their Lordships divided: Contents, 96; Not-Contents, 165.

DIVISION NO. 2
CONTENTS
Addington, L.	Kagan, L.
Airedale, L.	Kearton, L.
Amherst, E.	Kilmarnock, L.
Annan, L.	Kirkwood, L.
Ardwick, L.	Listowel, E.
Attlee, E.	Llewelyn-Davies of Hastoe, B.
Banks, L.	Lockwood, B.
Barnett, L.	Longford, E.
Blackstone, B.	Lovell-Davis, L.
Blease, L.	McIntosh of Haringey, L.
Bonham-Carter, L.	McNair, L.
Bottomley, L	Mishcon, L.
Callaghan of Cardiff, L.	Molloy, L.
Campbell of Eskan, L.	Mulley, L.
Caradon, L.	Murray of Epping Forest, L.
Carmichael of Kelvingrove, L.	Nicol, B. [Teller.]
Carter, L.	Northfield, L.
Chitnis, L.	Oram, L.
Cledwyn of Penrhos, L.	Paget of Northampton, L.
Cocks of Hartcliffe, L.	Parry, L.
David, B.	Perry of Walton, L.
Davies of Penrhys, L.	Peston, L.
Dean of Beswick, L.	Pitt of Hampstead, L.
Diamond, L.	Ponsonby of Shulbrede, L.[Teller.]
Donaldson of Kingsbridge, L.
Dormand of Easington, L.	Rathcreedan, L.
Ewart-Biggs, B.	Ritchie of Dundee, L.
Falkender, B.	Ross of Newport, L.
Falkland, V.	Scanlon, L.
Fisher of Rednal, B.	Seear, B.
Flowers, L.	Serota, B.
Gallacher, L.	Shackleton, L.
Galpern, L.	Shepherd, L.
Gladwyn, L.	Stallard, L.
Graham of Edmonton, L.	Stedman, B.
Gregson, L.	Stewart of Fulham, L.
Grey, E.	Stoddart of Swindon, L.
Grimond, L.	Taylor of Blackburn, L.
Hampton, L.	Taylor of Mansfield, L.
Hanworth, V.	Tordoff, L.
Harris of Greenwich, L.	Turner of Camden, B.
Hatch of Lusby, L.	Underhill, L.
Hunt, L.	Wallace of Coslany, L.
Hunter of Newington, L.	Whaddon, L.
Jacques, L.	White, B.
Jay, L.	Williams of Elvel, L.
Jeger, B.	Winchilsea and Nottingham, E.
Jenkins of Hillhead, L.
John-Mackie, L.	Winstanley, L.

NOT-CONTENTS
Airey of Abingdon, B.	Caccia, L.
Alexander of Tunis, E.	Caithness, E.
Alexander of Weedon, L.	Camden, M.
Allerton, L.	Cameron of Lochbroom, L.
Ampthill, L.	Campbell of Alloway, L.
Arran, E.	Campbell of Croy, L.
Ashbourne, L.	Carnegy of Lour, B.
Balfour, E.	Carnock, L.
Bathurst, E.	Cathcart, E.
Belstead, L.	Clinton, L.
Bessborough, E.	Coleraine, L.
Birdwood, L.	Colnbrook, L.
Blake, L.	Cottesloe, L.
Blatch, B.	Craigavon, V.
Blyth, L.	Cranbrook, E.
Borthwick, L.	Daventry, V.
Boyd-Carpenter, L.	Davidson, V. [Teller.]
Brookeborough, V.	Denham, L. [Teller.]
Brougham and Vaux, L.	Dundee, E.
Broxbourne, L.	Elibank, L.
Bruce-Gardyne, L.	Ellenborough, L.
Butterworth, L.	Elles, B.

Elliot of Harwood, B.	Nelson, E.
Elliott of Morpeth, L.	Nelson of Stafford, L.
Enniskillen, E.	Newall, L.
Erroll of Hale, L.	Northesk, E.
Faithfull, B.	Nugent of Guildford, L.
Fanshawe of Richmond, L.	O'Brien of Lothbury, L.
Ferrers, E.	Orkney, E.
Forester, L.	Orr-Ewing, L.
Fortescue, E.	Peel, E.
Fraser of Kilmorack, L.	Peyton of Yeovil, L.
Gainford, L.	Platt of Writtle, B.
Gardner of Parkes, B.	Porritt, L.
Gormanston, V.	Portland, D,
Grantchester, L.	Portsmouth, E.
Greenway, L.	Pym, L.
Gridley, L.	Reay, L.
Grimthorpe, L.	Renton, L.
Hailsham of Saint Marylebone, L.	Richardson, L.
	Rippon of Hexham, L.
Hardinge of Penshurst, L.	Rochdale, V.
Harmar-Nicholls, L.	Rodney, L.
Harvington, L.	Romney, E.
Havers, L.	St. Davids, V.
Hemphill, L.	St. John of Fawsley, L.
Henley, L.	Saint Oswald, L.
Hesketh, L.	Saltoun of Abernethy, Ly.
Hives, L.	Sanderson of Bowden, L.
Holderness, L.	Savile, L.
Hood, V.	Seebohm, L.
Hooper, B.	Selkirk, E.
Hylton-Foster, B.	Sempill, Ly.
Ingrow, L.	Shannon, E.
Johnston of Rockport, L.	Sharples, B.
Joseph, L.	Simon of Glaisdale, L.
Kinloss, Ly.	Skelmersdale, L.
Lawrence, L.	Somers, L.
Long, V.	Southborough, L.
Lonsdale, E.	Stanley of Alderley, L.
Luke, L.	Stoddart of Leaston, L.
Lyell, L.	Strange, B.
McAlpine of Moffat, L.	Strathclyde, L.
McFadzean, L.	Strathcona and Mount Royal, L.
Mackay of Clashfern, L.
Macleod of Borve, B.	Strathspey, L.
Malmesbury, E.	Sudeley, L.
Manton, L.	Suffield, L.
Mar, C.	Swansea, L.
Margadale, L.	Swinfen, L.
Marley, L.	Swinton, E.
Marshall of Leeds, L.	Taylor of Hadfield, L.
Maude of Stratford-upon-Avon, L.	Teviot, L.
	Thomas of Gwydir, L.
Merrivale, L.	Torphichen, L.
Mersey, V.	Trafford, L.
Middleton, L.	Tranmire, L.
Monk Bretton, L.	Trefgarne, L.
Montgomery of Alamein, V	Trumpington, B.
Mottistone, L.	Vaux of Harrowden, L.
Mountgarret, V.	Weir, V.
Moyne, L.	Whitelaw, V.
Munster, E.	Wyatt of Weeford, L.
Murton of Lindisfarne, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.57 p.m.

[Amendment No. 145 not moved]

Lord McIntosh of Haringey moved Amendment No. 145A:

Page 83, line 30, at end insert— ("(8) At the end of section 21(6) of the Social Security Act 1986 (regulations prescribing maximum family credit and maximum housing benefit) there shall be added the words "and the regulations shall prescribe that in determining the rent for housing benefit purposes the authority shall treat the rent officer's decision of a reasonable rent under section 117 of the Housing Act 1988 as the minimum eligible rent less any deductions specified elsewhere in regulations".")

The noble Lord said: Amendment No. 145A is the last of our amendments on Clause 117. We are of course deeply disappointed that Clause 117, which will cause so much hardship and so much resentment among the most needy in our society, has so far gone through without significant amendment. This is the last chance for the Committee to redeem its position on the deeply offensive Clause 117.

Amendment No. 145A seeks to insert the following subsection at the end of Clause 117: ('(8) At the end of section 21(6) of the Social Security Act 1986 (regulations prescribing maximum family credit and maximum housing benefit) there shall be added the words "and the regulations shall prescribe that in determining the rent for housing benefit purposes the authority shall treat the rent officer's decision of a reasonable rent under section 117 of the Housing Act 1988 as the minimum eligible rent less any deductions specified elsewhere in regulations'.)

I am sorry that the noble Lord, Lord HarmarNicholls, is not in his place at this moment. Our amendment seeks to specify what regulations shall include rather in the same form that the Government seek to specify what regulations shall include.

It will be clear to the Committee that what we are trying to do here is to remove a local authority's discretion to pay anything other than the minimum rent which has been settled by the rent officer for the purpose of housing benefit and the rent allowances. This is by no means as much as we would wish to do. We have already sought to persuade the Committee that it would be right for the actual rent to be paid and for there to be no rent stop on the difference between the actual rent, which the rent officer, as we know, cannot control, and the rent on which a rent allowance is paid.

But at least we should ensure that authorities pay benefit on the reasonable rent levels that arise out of the decontrol of the private sector, which is the theme of this Bill, and that they do not exercise their discretion unreasonably to restrict rents at below the prevailing market level. If we were to achieve those objectives we should at least remove one possible cause of hardship; namely, the meanness of the local authority—I can only put it that way—in failing to recognise that reasonable rents as assessed by the rent officer ought to be the basis for rent allowances paid under the housing benefit scheme.

I believe that this amendment is significantly less controversial than the previous amendments moved by my noble friends. I believe that it is not only less controversial but also less party political and less subject to widespread disagreement. I should hope that, having rejected the other amendments which we have proposed to this clause, the Government and the Committee would feel that it is right in the last stages of our consideration of the clause to agree this safety net precaution. I beg to move.

The Earl of Caithness

I must confess to the noble Lord that I had some difficulty in understanding the purpose of his amendment. However, I believe that as he has elucidated it to the Committee, I have interpreted it correctly. As I understand it, the effect of the noble Lord's amendment would be to require that the local authority treats the rent officer's assessment of a reasonable rent as the minimum eligible rent for housing benefit purposes.

So far as concerns the great majority of cases, such a provision would hardly seem necessary, as I am sure Members of the Committee would agree. Once the rent officer has made his decision on the benefit claimant's rent, the local authority will be able to pay benefit up to the level set by the rent officer in the confidence that the benefit award would attract full subsidy. In those circumstances, a local authority would not normally have any reason to base the award of benefit on a lower level of rent than that determined by the rent officer.

However, special considerations will arise in a case where the claimant is occupying accommodation which is at the top end of the market even though the rent for that property may be perfectly reasonable. As I have already reminded the Committee, the Government's view is that people ought not to be living in such accommodation with the support of housing benefit. We therefore intend, as soon as the necessary market evidence is available, to introduce formal restrictions in such cases. In the meantime, we propose to institute an informal procedure whereby the rent officer will notify the local authority in a case where a benefit claimant is living in a property at the top end of the market even where he assesses the rent as reasonable for that property. The local authority would then be able to use the discretion it already has under existing legislation to restrict benefit to below the level of rent which the claimant is paying or which the rent officer has himself set.

The trouble with the noble Lord's amendment is that it would preclude the local authority taking such action in the circumstances which I have mentioned. That is why I have difficulty with it.

Lord McIntosh of Haringey

I am afraid that once again we find the Government's determination to stamp out what we consider to be imaginary or insignificant abuses is firmer than their determination to maintain protection against hardship for those most in need in our society. No doubt somewhere in the country there are people living in property which is too large for their needs. I am sure that that is the case: but property that is too good for their needs, property that deserves a higher reasonable rent? There may be elderly people who have lived in the same property all their lives and whose economic circumstances have become worse as they have grown older. Who are we to say what is too good for their needs?

If the property is too large I accept that there is an argument. That has been a theme of the housing benefit regulations which were brought into force in April this year. We did not and do not oppose those changes. However, for local authorities to have the power which is granted under Clause 117 to go further and say that a property is too good for someone receiving housing benefit strikes a chill into my heart, as has much of what the Minister has said during our consideration of this clause.

I am in favour of discretion but I am not in favour of discretion being exercised in this way. I do not believe that the Minister has adequately answered the question which is raised here. I do not think that we have dealt adequately with the threat to those in housing need which is imposed by the new conditions of Clause 117.

However, I think that we should consider all of the debate which has taken place over the past two hours or so, and that we should think again about our approach to it as. a whole and not in relation to individual amendments. I believe that we should seek to persuade your Lordships' House at a later stage that there is a way to preserve the humanity of our society in dealing with housing hardship and yet achieve the objectives which we all share of avoiding extravagance in housing benefit payments.

The Earl of Caithness

I am grateful to the noble Lord for giving way. Of course I too shall read what has been said. I know that my noble friend Lord Skelmersdale has also noted what noble Lords have said. The very points which the noble Lord has mentioned concerning the elderly or the widow who has always lived in a house are the very points that I picked up myself when I first replied to the noble Baroness, Lady Fisher of Rednal, in her amendment. These are the people about whom we are very concerned. It is the most difficult area and it is the area to which a great deal of consideration is being given in the consultations to which I have already referred.

Baroness Fisher of Rednal

Perhaps the noble Earl will bear in mind the fact that there are people who receive excessive amounts of income tax relief because they live in houses which are very much larger than they really need. They receive benefit from the public purse which is not given to those who really need it. Tax relief on mortgages often goes to people who live in very large houses. On the one hand, one can argue that people are forced to live in large properties because there is nowhere else for them to go, perhaps because they are sick or disabled. When looking at housing in the future on a global basis perhaps the Minister's argument should be considered in relation to the special rebates granted through the tax system to those who are better off and living in premises which are much larger than they need, and those people should be equated with those at the lower end of the scale.

Lord Swinfen

I am sure that the noble Baroness will realise that there is a maximum amount of tax relief—I believe it is £30,000-that anyone can claim on any one dwelling, no matter what its size. Of course one needs to have a large enough income to take advantage of that relief. However, over a very large part of this country a mortgage of £30,000 is now needed to buy a property. With the greatest respect, the size of the dwelling has nothing to do with it.

Lord Renton

Before the noble Lord withdraws his amendment, as I believe he will since he has kindly said that he would like to give this matter further consideration, perhaps he would bear in mind the paradox which has arisen. That is that he, as a dedicated socialist, is suggesting that money—which would often be public money—should be paid to people who may not need it whereas my noble friend on the Front Bench is adopting the kind of attitude which I believe Members on both sides of the Committee would expect; namely, that we must be very careful about using public money in cases where it may not be needed.

I would ask the noble Lord to bear in mind a further thought. If he really thinks that we should pursue the matter on the lines of his amendment, he would be adding.further complication to what, under the Bill, is already a fairly complex situation.

The Earl of Caithness

I am grateful for the remarks made by my noble friends and in particular for what my noble friend Lord Swinfen said about the limit to mortgage tax relief. I am sure that the noble Baroness too is aware that the total sum applied to mortgage tax relief in 1987–88 was less than the total paid in housing benefit and rent rebate.

Lord McIntosh of Haringey

This has been a most valuable exchange and I am glad that I sat down and enabled it to take place. First, I am grateful to my noble friend Lady Fisher for pointing out the contradictions in the Government's subsidy policy for housing. The intervention of the noble Lord, Lord Swinfen, does not help his case very much. The point about tax relief for mortgage payments is that it is given to those who are earning at least £10,000 a year—that is required in order to obtain a mortgage of £30,000-and therefore to those who are by definition better off than the people of whom we are talking, who are in need of housing benefit.

The situation is worse than that, however, because those who pay tax at a higher rate, who earn more and who are less in need of subsidy, enjoy a greater subsidy from the taxpayer. I do not think that the noble Lord should pursue that line of the justice of tax relief for mortgage repayments as an argument against us when we talk about housing benefit.

I am grateful also to the noble Lord, Lord Renton, for his intervention. He seems to have forgotten—and he gives me an opportunity to make it clear—that housing benefit is paid only to those who are in need; in other words, to those whose income is so low that they cannot be expected to meet that charge on their income. Therefore it is very directly untrue that in this amendment, or in any of the other amendments to Clause 117, we are arguing for indiscriminate payments to anyone regardless of need. We remain always within the conditions of the housing benefit scheme and the rent allowance payments, which, as my right honourable and honourable friends and also my noble friends said when the housing benefit scheme was introduced in April this year, are already extremely severe.

The point at which people have to start paying a contribution towards their rent is low. The taper by which they have to pay an increasing amount as their income becomes higher is very severe. In its first draft it was so severe that, under pressure from Conservative Back-Benchers in another place, it had to be changed. We are not talking about indiscriminate subsidy but about help for those who are most in need in our society. Let us be clear on that point. It is true at every stage of our discussion when we speak about Clause 117.

I do not in any way regret having tabled my amendments nor do I regret having given my support to the amendments of my noble friends. I simply say as a reason for withdrawing this amendment that there ought to be scope for us to come a little closer together than we have at the present time. There ought to be some way to avoid the hardship which in our view will inevitably arise from Clause 117 as it has been drafted. I hope that in civilised discussion and negotiation with the Government before this Bill concludes its passage through this Chamber we shall be able to do so. It is on that basis that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 117 agreed to.

Clause 118 [Variation of cost floor for right to buy discount]:

[Amendments Nos. 145E and 145C not moved.]

5.15 p.m.

On Question, Whether Clause 118 shall stand part of the Bill?

Lord Graham of Edmonton

Notice has been given that these Benches intend to oppose the Motion that Clause 118 shall stand part of the Bill. We touch here on what I am sure the Minister appreciates is a vexed question; namely, that of trying to reconcile the desire of the Government to assist tenants to become owner-occupiers, the desire of a tenant to purchase a property on advantageous terms (which he may very well quickly sell once he has become the owner of it), and the dilemma of a council with a heart that wants to perpetuate its role in housing and wishes to be the main provider of housing in the rented sector.

To put the matter in context, the Government introduced their right-to-buy legislation in the early 1980s and there were adjustments over a period of time in the percentage discount allowed according to the length of time that a tenant had occupied the property. Some remarkable situations were thrown up. If one were exercising the right to buy without a cost floor one could find that a council, in accepting the terms of right to buy, would receive for that house less than it had cost to build.

I do not think that there is any dispute that one needs to have a cost floor. I know that at one time it was thought that the cost floor should perhaps be removed completely. However, on reflection, that has been seen to be not only unfair but, as the noble Lord, Lord Renton, said in an earlier debate, one needs to take into account the need to obtain value for money when spending from the public purse. Certainly when giving away public assets one has to keep that very much in mind.

However, the Minister and his advisers should recognise that there are disparities in the application of the clause as it stands. The argument is as follows. The law came into effect in 1981–82 and if the floor was pitched at the costs of 1974, i.e., eight years previously, then one ought to keep that figure as the kind of back period over which the right to buy should not be taken into account; in other words, the right to buy should not bring in less than the property had cost the council in that period. Some interesting situations arise by virtue of changing the law in the way suggested by this clause.

Let us take for example my home town of Newcastle-upon-Tyne. A three-bedroomed house on the Byker Estate which was built in 1979 at a cost of £19,000 is currently valued at £19,250. Before the Minister—as I did—says, "Surely something that was built nine years ago is worth a lot more now", I can tell him that I have checked those figures. They are the market values of properties of that kind in that part of Newcastle. I am sure that he will accept those as bona fide figures. At a maximum discount of 60 per cent. such a house would sell for £7,700, which would leave the remaining council tenants of Newcastle to pay through higher rents the outstanding bill of £11,300. The Minister must tell the Committee why he believes that council tenants in Newcastle, who are already paying as much as they can afford in rent, should have to pay even higher rents in order to permit someone to buy property at a 60 per cent. discount.

Another illustration is that of a four-bedroomed house in Newcastle built in 1979 at a cost of £20,390. It is currently valued at £20,000. At an average discount of 49 per cent. the selling price would be £10,200, which leaves the Newcastle tenants with an outstanding debt of £10,190.

If the Minister accepts those figures, and as always they are subject to correction and validation, and agrees that that is the effect of changing the law in this way, surely he will know that it is wrong. There are pockets of the country where the values of properties have not risen as much as elsewhere. The Minister may argue that with the increase in the value of housing, the council is left with 40 per cent. of an enhanced value, and it will be able to extinguish its debts. These are illustrations. They may not be typical. They may not have a wide application. However, if the law results in such a situation we have to consider it.

The Minister must also consider this. In carrying out its normal letting reallocation policy, the council may know of someone who is ideally suited to move into a property. However, it may understand that that person is anxious to exercise his right to buy. If, by moving a person who needs to be moved on social and housing grounds into a property that he will then buy, the result achieved is a net loss to the ratepayers and to the taxpayers, the council may hesitate to do so.

For those reasons I ask the Committee not to allow this clause to stand part. I shall listen carefully to what the Minister has to say in support of the clause and in defence against the arguments that I have put forward. I beg to move.

Lord Renton

Before my noble friend replies, perhaps I may say this. This is not a branch of the law with which I am familiar. There have been times therefore when it has been quite an effort to understand some of the clauses of this Bill. This clause is a very baffling one. It is legislation by reference. We cannot complain about that because to set out the previous law, and to repeal and re-enact it as amended, would have been a very lengthy affair. Amendments have been done textually, which is the right way. However, when we have a clause of this kind which is incomprehensible in itself, and is only comprehensible by turning up all the previous law, one would hope that some explanation of it would be given in the statutory memorandum to the Bill.

It is a most unfortunate tendency—if I may say so to my friends on the Front Bench, and I hope that they will take note of it—that as our Bills become longer the statutory memoranda become shorter. Instead of having explanations of individual clauses which require explanation, we have a memorandum which refers to Part I and each of the chapters in it—but refers very little to clauses—and to Part II, Part III and Part IV.

In addition to the usual supplementary clauses about the short title, commencement and extent, Part V, Miscellaneous, has 11 clauses of substance involving change. It would have been most helpful to Members of the Committee, and I am sure to those in another place, in understanding the effects of the Bill if the explanatory note relating to Part V had given us more explanation. By studying that memorandum carefully one sees that PartV—but with no reference to Clause 118—modifies the cost floor rules for sales to secure tenants under the right to buy. It does not state how, or in what way, to what extent it does so. The memorandum then continues, it allows certain public sector landlords to place restrictions on subsequent licences and lettings of dwellings in certain rural areas". That is a separate point, moving on, before the point to which I first referred has been explained.

Although I do not agree with him upon the substance of the matter, the noble Lord has therefore performed a service by inviting our attention to this clause. When answering, I hope that my noble friend will say whether the noble Lord, Lord Graham of Edmonton, has presented the effect of the clause as it is intended. Will he give us more explanation than we have been given so far on exactly how the cost floor rules have been altered.

Lord Boyd-Carpenter

On the merits of the clause, as described by the noble Lord, Lord Graham of Edmonton, I am wholly in favour. However, I rise only to support what my noble friend Lord Renton has said on the complexity and difficulty of understanding not only this clause—although this is a good example—but a good many parts of the Bill.

This is a clause which will be of great practical importance to a great many people and to their legal advisers. It will be of great importance to local authorities and to their legal advisers. It is very difficult—as it has proved even for my noble friend Lord Renton—to follow the clause as it stands. In other statutes which seek to achieve their effect by amending previous ones, there have been printed at the end what are called Keeling schedules. These set out the effect of the earlier statutes as amended by the current one, thereby enabling people to see the legal effect of the change.

Keeling schedules were named after a very distinguished Member of another place whom some noble Lords will remember, Sir Edward Keeling. They resulted after years of agitation by him on this very point. Between this stage and the next, will the Minister have a look, not only at this clause (although this clause is a good example) but at other clauses in the Bill, to see whether great help could not be given to the citizen, as well as to the legislator, by the introduction of Keeling schedules setting out the cumulative and final effect of the law as amended by the clause? I hope my noble friend will take this very seriously to heart. I speak as one who supports this clause, in so far as I understand it.

Lord Harris of Greenwich

I rise to agree with much of what the noble Lord, Lord Boyd-Carpenter, has said. I am glad that the Leader of the House is here, because this problem extends well beyond the Bill that we are discussing at the moment, as the noble Lord, Lord Renton, has pointed out.

This clause is to me entirely incomprehensible. This is something which has become increasingly common with governments of different political persuasions in approaching legislation in this way. As the noble Lord, Lord Belstead, is with us, I suggest that it is a matter that can be discussed in Cabinet committee, and in particular the committee on legislation, when legislation is being considered by Ministers on a collective basis. I do not think that we should cheerfully accept legislation put before us in this form when Members of the Committee must be wholly unaware of the issues involved in such legislation.

5.30 p.m.

The Earl of Caithness

I feel duly chastised by my noble friends Lord Renton and Lord Boyd-Carpenter and indeed by the noble Lord, Lord Harris of Greenwich. I am grateful that my noble friend the Leader of the House is here to listen to their comments with me.

Lord Boyd-Carpenter

I hope my noble friend will forgive me. I was not seeking to chastise him, because I was not going to accuse him of having drafted the Bill.

The Earl of Caithness

My noble friend is very kind, but I feel responsible for the Bill. If it is not in the form that the Committee likes, then I feel that is partly my responsibility. I shall discuss what my noble friends have said with my noble friend the Leader of the House and with my Bill team and our legal advisers to see whether we can elucidate matters for the Committee.

Of course, noble Lords have had the advantage of the Notes on Clauses, which I made sure were put in the Printed Paper Office, but I realise that those who pick up the Bill as it will finally be enacted will not have that benefit. This is obviously a point going far beyond the scope of the Bill and is more general.

Lord Renton

Will my noble friend forgive me for intervening'? Within very strictly defined limits, Notes on Clauses can be helpful in understanding a Bill, though they are not always so. But my point is that in the Chamber at the moment there are about 60 noble Lords. I doubt whether there are 60 copies of the Notes on Clauses in the Printed Paper Office, but in any event the point that my noble friend Lord Boyd-Carpenter has made is that it is not only the legislators who have to study the Bill. Also concerned are people who take note of its contents from the moment it is first published on its introduction into one or other House. Ultimately, when it becomes an Act of Parliament, it is most essential that it should, so far as is possible, be comprehensible within its own four walls.

Lord Graham of Edmonton

Before the noble Earl continues his reply, I simply remind the Committee that those who follow these matters closely are well aware of the purport of the clause. I am looking forward very much to the Minister dealing with the content of the clause.

Lord Renton

I am sure we all are.

The Earl of Caithness

I am coming to the content of the clause, but I thought it would be wrong for me not to answer the specific points raised by my noble friends and by the noble Lord, Lord Harris of Greenwich.

Clause 118 amends the cost floor rule under the right to buy. Many council tenants feel that this rule is unfair because it restricts the discount available if the local authority has recently incurred expenditure on the dwelling in question. As the Committee will be aware, it was because of this that in last year's housing White Paper and at Second Reading of the Bill in another place we proposed to abolish the rule, as the noble Lord, Lord Graham of Edmonton, has reminded us.

As the noble Lord has also reminded the Committee, we have received many representations, in particular from local authorities and housing associations, opposed to outright abolition of the rule. Their concern was that they would incur a loss if they were forced to sell at the full right to buy discounted price. They were also worried that landlords would be reluctant to carry out improvements to their stock which would make them more attractive to buy and that the scope for attracting private sector finance into the housing association sector might be diminished.

We listened carefully to these objections and, as my predecessor the then Minister of Housing explained in another place, we produced the compromise now set out in the clause. The amendment replaces the fixed cut-off date for relevant costs at 31st March 1974 and instead provides that only costs incurred in the period eight years prior to the sale can be taken into account. The right to buy discount will not be able to bring the price below this level of costs. The general inflation in house prices should ensure that in the vast majority of cases the discounted sale price will be enough to cover relevant costs incurred by the landlord more than eight years before the sale.

Now I turn specifically to the example that the noble Lord, Lord Graham, gave us of the houses in Newcastle. On the figures that he gave the Committee, the authority is already incurring a loss if it is not charging high enough rents to service the known debt charge. That means that already there are others in Newcastle who are supporting these houses. The real answer is one of equity. Why should Tenant A lose a discount while Tenant B has a full discount simply because of costs incurred so long ago? I should also point out to the Committee that the proposed eight-year period of protection is longer than the original six years available when the right to buy was introduced in 1980, when the cut-off date was 1974. So the clause does not propose anything new or radical.

This change will obviously be welcomed by a number of tenants who will no longer be caught by the rule. When it was introduced in another place it was also welcomed by the local authorities. The Association of District Councils went so far as to issue a press notice saying that an eight-year period was both workable and met much of its concern. It was, therefore, with not a little surprise that I learnt that the noble Lord opposite had expressed his opposition to it. Although, as I have said, the choice of eight years as a cut-off period is very much a matter of judgment, I believe that we have struck a reasonable balance between the interests of the tenant and the interests of the landlord. I commend the clause to the Committee.

Lord Graham of Edmonton

I am disappointed with the reply. The Minister has quite fairly said that he has listened to the voice of the tenants. The tenant faced with the prospect not only of becoming the owner-occupier but of becoming the owner-occupier at a very cheap price is having to bear some of the burden of ensuring that under existing legislation there is what I consider to be a modest cut-off.

I have every sympathy with people becoming owners of the house they occupy or of another house. I do not want to enter into a sterile debate on the principle of the right to buy, but the Minister knows that I have little sympathy with those who argue that in order to sell a council house one has to give the size of inducement which the Government and the legislation have given. I am more concerned about those who do not have a house to live in and those who are paying exorbitant rents.

The Minister tells us that Newcastle has the answer, but the question of the level of rents has nothing to do with the legislation upon which the right to buy is based. He has introduced a red herring. The only basis for the right to buy legislation is the cost to the council from the time when it purchased the house and what has been added to it. The Minister has failed to take into account the effect on a council like Newcastle. That is not an isolated case. I think the Minister will acknowledge that I was not making a majority case. What he says in equity is good, even though he shrugged his shoulders and said that there would be detriments. He did not accept the detriment, and said it did not exist. I believe it does exist. I believe that the clause as drafted is wrong and I intend to press this matter.

5.38 p.m.

On Question, Whether Clause 118 shall stand part of the Bill?

Their Lordships divided: Contents, 151; Not-Contents, 69.

DIVISION NO. 3
CONTENTS
Aldington, L.	Hooper, B.
Alexander of Tunis, E.	Hylton-Foster, B.
Allerton, L.	Ilchester, E.
Ampthill, L.	Ingrow, L.
Arran, E.	Johnston of Rockport, L.
Balfour, E.	Joseph, L.
Bathurst, E.	Lauderdale, E.
Belstead, L.	Leathers, V.
Bessborough, E.	Long, V.
Blake, L.	Lonsdale, E.
Blatch, B.	Luke, L.
Boardman, L.	Lyell, L.
Borthwick, L.	McAlpine of Moffat, L.
Boyd-Carpenter, L.	Mackay of Clashfern, L.
Brabazon of Tara, L.	Macleod of Borve, B.
Brookeborough, V.	Malmesbury, E.
Brookes, L.	Margadale, L.
Brougham and Vaux, L.	Marley, L.
Broxbourne, L.	Marshall of Leeds, L.
Butterworth, L.	Maude of Stratford-upon-Avon, L.
Caithness, E.
Camden, M.	Merrivale, L
Cameron of Lochbroom, L.	Mersey, V.
Campbell of Alloway, L.	Monk Bretton, L.
Campbell of Croy, L.	Mottistone, L.
Carnegy of Lour, B.	Moyne, L.
Carnock, L.	Munster, E.
Cathcart, E.	Murton of Lindisfarne, L.
Coleraine, L.	Napier and Ettrick, L.
Colville of Culross, L.	Nelson, E.
Cottesloe, L.	Nelson of Stafford, L.
Craigavon, V.	Newall, L.
Craigmyle, L.	Northesk, E.
Cranbrook, E.	Nugent of Guildford, L.
Cullen of Ashbourne, L.	Orkney, E.
Davidson, V. [Teller.]	Orr-Ewing, L.
Denham, L. [Teller.]	Peel, E.
Dundee, E.	Peyton of Yeovil, L.
Elibank, L.	Platt of Writtle, B.
Elles, B.	Portland, D.
Elliot of Harwood, B.	Portsmouth, E.
Elliott of Morpeth, L.	Pym, L.
Elton, L.	Reay, L.
Enniskillen, E.	Renton, L.
Erroll of Hale, L.	Renwick, L.
Faithfull, B.	Richardson, L.
Ferrers, E.	Rippon of Hexham, L.
Forester, L.	Rochdale, V.
Fortescue, E.	Romney, E.
Fraser of Kilmorack, L.	St. Davids, V.
Gardner of Parkes, B.	Saint Oswald, L.
Gormanston, V.	Saltoun of Abernethy, Ly.
Grantchester, L.	Sanderson of Bowden, L.
Gray of Contin, L.	Savile, L.
Gridley, L.	Seebohm, L.
Grimston of Westbury, L.	Selkirk, E.
Hailsham of Saint Marylebone, L.	Sharples, B.
	Skelmersdale, L.
Hardinge of Penshurst, L.	Somers, L.
Harmar-Nicholls, L.	Southborough, L.
Harvington, L.	Stanley of Alderley, L.
Havers, L.	Stodart of Leaston, L.
Hayter, L.	Strange, B.
Hemphill, L.	Strathclyde, L.
Henley, L.	Strathcona and Mount Royal, L.
Hesketh, L.
Hives, L.	Strathspey, L.
Holderness, L.	Sudeley, L.
Hood, V.	Swansea, L.

Swinfen, L.	Trefgarne, L.
Swinton, E.	Trumpington, B.
Terrington, L.	Vaux of Harrowden, L.
Teviot, L.	Weir, V.
Thomas of Gwydir, L.	Whitelaw, V.
Torphichen, L.	Wise, L.
Trafford, L.	Wyatt of Weeford, L.
Tranmire, L.	Young, B.

NOT-CONTENTS
Ardwick, L.	Listowel, E.
Attlee, E.	Llewelyn-Davies of Hastoe, B.
Blackstone, B.	Lockwood, B.
Blease, L.	Longford, E.
Bottomley, L.	Lovell-Davis, L.
Brooks of Tremorfa, L.	McIntosh of Haringey, L.
Campbell of Eskan, L.	Mishcon, L.
Caradon, L.	Molloy, L.
Carmichael of Kelvingrove, L.	Monson, L.
Carter, L.[Teller.]	Mountevans, L.
Cledwyn of Penrhos, L.	Mulley, L.
Cocks of Hartcliffe, L.	Murray of Epping Forest, L.
David, B.	Nicol, B.
Davies of Penrhys, L.	Northfield, L.
Dean of Beswick, L.	Oram, L.
Dormand of Easington, L.	Paget of Northampton, L.
Ewart-Biggs, B.	Parry, L.
Falkender, B.	Peston, L.
Fisher of Rednal, B.	Pitt of Hampstead, L.
Fitt, L.	Ponsonby of Shulbrede, L.
Flowers, L.	Rea, L.
Gallacher, L.	Serota, B.
Galpern, L.	Shackleton, L.
Graham of Edmonton, L. [Teller.]	Shepherd, L.
	Stallard, L.
Gregson, L.	Stedman, B.
Hanworth, V.	Stewart of Fulham, L.
Howie of Troon, L.	Stoddart of Swindon, L.
Jacques, L.	Taylor of Blackburn, L.
Jay, L.	Taylor of Mansfield, L.
Jeger, B.	Turner of Camden, B.
John-Mackie, L.	Underhill, L.
Kagan, L.	Wallace of Coslany, L.
Kearton, L.	White, B.
Kilmarnock, L.	Williams of Elvel, L.

Resolved in the affirmative, and Clause 118 agreed to accordingly.

5.47 p.m.

The Earl of Caithness moved Amendment No. 146: After Clause 118, insert the following new clause:

("Right to buy: tenant's sanction for landlord's delays

. After section 153 of the Housing Act 1985 there shall be inserted the following sections—

"Tenant's notices of delay

153A.—(1) Where a secure tenant has claimed to exercise the right to buy, he may serve on his landlord a notice (in this section referred to as an "initial notice of delay") in any of the following cases, namely:

1. (a) where the landlord has failed to serve a notice under section 124 within the period appropriate under subsection (2) of that section;
2. (b) where the tenant's right to buy has been established and the landlord has failed to serve a notice under section 125 within the period appropriate under subsection (I) of that section;
3. (c) where the tenant has claimed to exercise the right to be granted a shared ownership lease and the landlord has failed to serve a notice under section 146 within the four weeks required by that section;
4. (d) where the tenant's right to a shared ownership lease has been established and the landlord has failed to serve a notice under section 147 within the eight weeks required by that section; or
5. (e) where the tenant considers that delays on the part of the landlord are preventing him from exercising expeditiously his right to buy or his right to be granted a shared ownership lease.

(2) An initial notice of delay—

1. (a) shall specify the most recent action of which the tenant is aware which has been taken by the landlord pursuant to this Part of this Act; and
2. (b) shall specify a period (in this section referred to as "the response period"), not being less than one month, beginning on the date of service of the notice, within which the service by the landlord' of a counter notice under subsection (3) will have the effect of cancelling the initial notice of delay.

(3) Within the response period specified in an initial notice of delay or at any time thereafter, the landlord may serve on the tenant a counter notice in either of the following circumstances—

1. (a) if the initial notice specifies any of the cases in paragraphs (a) to (d) of subsection (1) and the landlord has served, or is serving together with the counter notice, the required notice under section 124, section 125, section 146 or section 147 as the case may be; or
2. (b) if the initial notice specifies the case in subsection (I)(e) and there is no action under this Part which, at the beginning of the response period, it was for the landlord to take in order to allow the tenant expeditiously to exercise his right to buy or his right to be granted a shared ownership lease and which remains to be taken at the time of service of the counter notice.

(4) A counter notice under subsection (3) shall specify the circumstances by virtue of which it is served.

(5) At any time when—

1. (a) the response period specified in an initial notice of delay has expired, and
2. (b) the landlord has not served a counter notice under subsection (3),

the tenant may serve on the landlord a notice (in this section and section 153B referred to as an "operative notice of delay") which shall state that section 153B will apply to payments of rent made by the tenant on or after the date of the service of the notice.

(6) If, after a tenant has served an initial notice of delay, a counter notice has been served under subsection (3). then, whether or not the tenant has also served an operative notice of delay, if any of the cases in subsection (1) again arises, the tenant may serve a further initial notice of delay and the provisions of this section shall apply again accordingly.

Payments of rent attributable to purchase price etc.

153B.—(1) Where a secure tenant has served on his landlord an operative notice of delay, this section applies to any payment of rent which is made on or after the date of the service of the notice and before the occurrence of any of the following events (and, if more than one event occurs, before the earliest to occur)—

1. (a) the service by the landlord of a counter notice under section 153A(3);
2. (b) the date on which the landlord makes to the tenant the grant required by section 138 or, as the case may be, section 150;
3. (c) the date on which the renant serves notice under section 142(2) (claiming to be entitled to defer completion);
4. (d) the date on which the tenant withdraws or is deemed to have withdrawn the notice claiming to exercise the right to buy or, as the case may be, the notice claiming to exercise the right to be granted a shared ownership lease; and
5. (e) the date on which the tenant ceases to be entitled to exercise the right to buy.

(2) Except where this section ceases to apply on a date determined under any of paragraphs (c) to (e) of subsection (1), so much of any payment of rent to which this section applies as does not consist of—

1. (a) a sum due on account of rates, or
2. (b) a service charge (as defined in section 621A),

shall be treated not only as a payment of rent but also as a payment on account by the tenant which is to be taken into account in accordance with subsection (3).

(3) In a case where subsection (2) applies, the amount which, apart from this section, would be the purchase price or, as the case may be, the tenant's initial contribution for the grant of a shared ownership lease shall be reduced by an amount equal to the aggregate of—

1. (a) the total of any payments on account treated as having been paid by the tenant by virtue of subsection (2); and
767
2. (b) if those payments on account are derived from payments of rent referable to a period of more than twelve months, a sum equal to the appropriate percentage of the total referred to in paragraph (a).

(4) In subsection (3)(b) "the appropriate percentage" means 50 per cent. or such other percentage as may be prescribed.").

The noble Earl said: I beg to move Amendment No. 146 and speak to Amendments Nos. 155,182 and 183. Amendments Nos. 146 and 155 have been prompted by the serious difficulty which a number of local authorities, especially London boroughs, have had in recent months in dealing with applications from tenants exercising the right to buy their homes. The number of such applications has increased dramatically since early last year, and there have been delays even on the part of those local authorities which encourage sales. I have to say also that some authorities have been slow to organise themselves to cope with the influx of applications. The amendments are, however, not brought forward in any spirit of retribution; they are designed to offer landlords practical help as well as to give tenants fair compensation for the delays they suffer.

Amendment No. 146 deals with compensation for tenants. In brief, if a tenant's purchase under the right to buy is held up by the landlords failure to get on with the sale, the tenant will be entitled to have the price of the house or flat reduced by the amount of the rent paid during the period of the delay. In order to measure the length of the delay there is a simple procedure. The tenant serves notice complaining of the delay. The landlord then has a month to deny that it is holding up the sale, or to take the next step in the process. If the landlord does not put itself in the clear, the tenant can serve a further notice, and the rent paid from that date will be deducted from the purchase price. When the landlord takes the next step in the sale process the rent will stop accruing to the tenant's credit, but the amount already clocked up will be deducted from the purchase price. If there is further delay the tenant can repeat the whole process. It is rather like a statutory chess clock.

I hope that Members will agree that the amendment is fair. If a tenant has been waiting for, say, six months for the landlord to deal with the purchase—and I am sorry to say that there are plenty of tenants in that position—this means that he or she has been paying rent for six months instead of getting on with paying off a mortgage. It also means that the tenant has spent an unnecessary six months being dependent on the council, and not free to get on with improvements to the home. It seems right that the tenant should receive modest compensation by having the rent paid set against the price of the property. In particularly bad cases where the delay adds up to more than a year, the amendment provides for the deduction from the price to be one and a half times the rent accrued.

It may be helpful if I briefly clarify two points. First, the landlord would be able to serve a counter-notice denying that it is at fault if there is no action which it was required to take and which has not been taken. However, the amendment does not allow the landlord to offer excuses for failing to play its part. If the sale has been held up and the ball is in the landlord's court it is surely right for the tenant to be compensated, even if the landlord faces genuine difficulties such as shortage of staff.

Secondly, there is the question of how the amendment would apply to tenants who have applied to buy their homes but have not completed their purchases when the legislation comes into force. Amendments Nos. 182 and 183 provide for the new clause to be brought into force on a day appointed by order. It is envisaged that the commencement order will apply the new procedure to cases in the pipeline, so that tenants whose purchases are held up will be able to serve notice on their landlords. But the legislation is not retrospective: there will be no deduction of rent in respect of any delay which has already occurred before the procedure comes into force.

We propose to make one change in the provisions I have described. The effect of the amendment as it stands is that where the landlord fails to meet a statutory deadline for delivering notices the rent cannot begin to be credited against the purchase price for at least a month, because the tenant has to serve an initial notice, give the landlord time to reply and then serve an operative notice of delay. Thus the statutory deadlines in the legislation would in effect be extended. On reflection we think it would be right to provide that, once an operative delay notice has been served, the rent to be deducted from the purchase price should be reckoned from the statutory deadline rather than from the date of the operative delay notice. This is, however, subject to what I have just said about transitional provisions: rent would in no case be reckoned back to a date before commencement. We shall bring forward in amendment at a later stage to give effect to this change.

I turn now to Amendment No. 155, which is designed to help local authorities avoid getting into a position where their tenants invoke the delay procedure. When local authorities receive capital money, such as the proceeds of housing sales, they may use it only for purposes to which capital money can properly be applied. I understand that the conventions of local government accounting are such that the proceeds of sale of a house or flat cannot be used to cover the administrative costs of the sale. This means that an authority with an active sale programme bringing in a healthy stream of receipts may nevertheless have difficulty in equipping itself to handle the sales because its revenue budget is under pressure. The amendment therefore provides that the proceeds of housing sales can be applied to the administrative costs of such sales. I hope that this modest measure, originally suggested by Islington Borough Council, will commend itself to the Committee.

I should add that the Government propose to bring forward at a later stage a consequential amendment to provide that, where a local authority chooses to use part of the receipts of housing sales to cover the administrative costs, the capital receipts credited to the authority for the purposes of the capital expenditure control system are reduced accordingly, I beg to move.

Lord McIntosh of Haringey

The Minister has presented a complex series of amendments in a very clear and beguiling way. Perhaps I may begin by stating what we agree with because I am afraid that we cannot go along with him on some aspects of this series of amendments.

First, it was helpful to have the Minister's reminder to the Committee that the increased delays which are being experienced are not simply, as propaganda would have it, in local authorities who are opposed to the right to buy and are actively trying to frustrate it. It is worth reinforcing what the Minister told us—that there were authorities which had always supported the right to buy that were having difficulties in keeping to a reasonable timescale because of the vastly increased numbers of applications.

It is worth reminding the Committee that the number of applications is partly increasing not because of any magical conversion to the right to buy by those who had not been attracted by it a few years go but because of the increasing difficulties and insecurity of being a council tenant; in other words, what is happening to them is the them is the stick and not the carrot. That does not fulfil the Daily Mail or Daily Express leader writers' prayer of a nice, clear, partisan issue which will go down well at the Conservative Party conference.

Secondly, we fully support Amendment No. 155. It goes some way to relieving the difficulty which the Minister described, that capital receipts cannot be used to fund administrative expenses. That means that the ratepayers have no way of making the system more efficient by increasing revenue expenditure when they are already at the risk of being ratecapped and losing grant for revenue expenditure, even though their capital receipts may, as the Minister rightly said, be healthy.

However, the clause does not seem to prevent cross-funding so that one disposal which results in a capital receipt can fund the administrative costs of a negative cost disposal. Perhaps the Minister would care to look at that matter to see whether anything further can be done on that point.

Where we part company is not so much on the issue of justice to the tenant. We agree that those tenants who suffer delays should in principle be compensated for them, but we are concerned in particular about the provisions for appeal against deduction from the price—in other words, one and a half time the rent loss. It must be remembered that the money which is being deducted from the purchase price of these properties is not coming as manna from heaven. It is being paid by the local authority from the rates and by the ratepayers and those who are remaining as local authority tenants. That seems to he loading the dice in favour of those who are willing and able to use the right-to-buy procedures as against those who are unable or unwilling to do so. It does not seem to us to be even-handed and we believe that the Government have gone significantly too far in that direction.

We are ending up with a situation where it is becoming more and more difficult to be a council tenant because of threats of insecurity of tenure, threats about what is laughably called tenant's choice and increased rents. That leads to an increased number of right-to-buy applications, which in turn. as the Minister acknowledged, leads to further delays, which lead to more penalties and inevitably to further increases in rents, because the money has to come out of the housing revenue account of the local authority. In those respects we believe that the Government have gone much too far in penalising people who remain as council tenants because that will be the main effect of this group of amendments. I am not saying that we shall pursue our opposition, qualified as it has been, to a vote, but it is necessary to express our concern about these aspects of the Government's proposals.

The Earl of Caithness

I take note of the points made by the noble Lord and I shall look at one or two points in particular.

Lord McIntosh of Haringey

I forgot to ask the Minister one question to which I should like to give him the opportunity to reply. It is a question that has been raised by the National Federation of Housing Associations, in particular with reference to Amendment No. 155 but probably also to Amendment No. 146. Do those provisions apply to housing associations as well as to local authorities?

The Earl of Caithness

No, they do not; they apply to local authorities. I hope that that clarifies the point. I shall read what the noble Lord has said and look at one or two points which he has particularly asked me about. Tenants are severely disgruntled about the attitude of some local authorities where a delay is taking place. Indeed, I am being pressed at the moment to tighten up this procedure quite dramatically. I know that the noble Lord will know that we have had representations that there should not even be a month for the landlord to serve a counter-notice and that there should at the end of a statutory limit automatically be a penalty. We believe that we have struck a fair balance in allowing the landlord one month to refute the allegations of the tenant, but we also think it fair that where the landlord cannot refute the allegations of the tenant the rent should be deducted from the purchase price for the period in question from the date that the first notice was served.

6 p.m.

Lord Harris of Greenwich

I note what the noble Earl said and certainly I am aware, as many are, that a small number of local authorities have been extremely tiresome in that respect. The noble Earl is entirely right. However, I am slightly worried about the possible use of penalties in the future. It is necessary to look at this matter in a balanced way. Many people seeking to buy houses in the private sector in London encounter substantial delays through the local authorities. Therefore, I hope that the noble Earl will be cautious before moving further to impose penalties in one area of local authorities' activities—in housing—and not in others.

The Earl of Caithness

I take that point. We have looked at the matter in a balanced way and I only sought to explain to the Committee that there was considerable pressure to go further than we have already gone.

On Question, amendment agreed to.

Lord Swinfen moved Amendment No. 147:

After Clause 118, insert the following new clause:

("Amendment of Housing Act 1985.

.—(1) Schedule 5 of the Housing Act 1985 (Exceptions to the right to buy) shall be amended in accordance with this section.

(2) Paragraphs 6 and 8 shall be omitted").

The noble Lord said: In moving Amendment No. 147 I should like to speak also to Amendment No. 180. When the 1985 Housing Act was going through Parliament I was not in favour of disabled people having a right to buy specially designed and adapted accommodation. However, since then I have changed my mind because I do not see why disabled people should be put into a special category which means that everyone else can have sweets on Sunday but they cannot. A disabled person can also have a sweet tooth.

I should point out that the amendment does not affect dwellings that have special services. That was deliberate drafting because otherwise we could have a block of, say, 12 flats with a warden to help the disabled occupants but where the flats are gradually sold off, leaving perhaps one flat containing disabled people with a full time warden employed for that flat.

It has been suggested that the sale of specially designed or adapted accommodation would mean a loss of such accommodation to the disabled community. That may be so, but in my view it would not be a greater loss than can already happen. Often the tenant is not the disabled person in the family. When the disabled person either dies or moves away the family may not need, and probably does not want, many of the special features and they are taken out either all at once or gradually. That is a loss of that dwelling to the community.

There seems also to be considerable difficulty with housing authorities deciding the special features that are substantially different. It varies from place to place. For example, much accommodation is now being built, particularly under Housing Corporation instructions, to mobility standards. The national Housebuilding Council recommends the same standards but unfortunately private industry is not yet building to the same standards because of the cost. I wish it would do so. With mobility standards houses have wider doors and wider corridors. Lavatories are on the same level as the living accommodation.

If a member of the family has to move around in a wheelchair he or she is obviously disabled and the housing authority states that there is special accommodation and therefore refuses the right to buy. The next door property with exactly the same design may have an occupant who has some difficulty moving around but who does not use a wheelchair. He may use a Zimmer frame which also needs a wider doorway. However, that person may not be a registered disabled person, and may not be classed as a disabled person by the local authority and therefore has the right to buy although there is no difference between the two properties. To my mind that is completely unfair.

I give an example of one individual who has been refused the right to buy. He has been told that he has a specially designed kitchen because the work surfaces are lower than average. However, the work surfaces in my kitchen are lower than average, too. My wife is not very tall. I think she is a delightful size, but that is my view and it is favouritism. Nevertheless, by no means is she disabled. One can get kitchens built to suit the individual. Tall people can have kitchens with high work surfaces.

In this example the wall between the living room and the porch has been removed. The council say that it is a special improvement because the man is in a wheelchair and needs the extra space. However, what happened was that there was a leak in the porch roof so that water seeped in and mould grew in the wall. Spores grew from the mould and affected the individual's chest with the result that he became ill. It was decided that the only way to get rid of the mould was to remove the wall. That was done for medical reasons not because of his physical disability. The authority is now saying that it is a special improvement to assist in his disability whereas it was done to prevent serious and continuous chest illnesses.

This person also has an integral garage which is taken to be a special feature because he is disabled. I am sure that there are a number of able-bodied Members of the Committee who have integral garages which are not a special feature because of disability. It so happens that this person has a van with a roof which has been adapted so that the van can take his wheelchair and consequently it cannot fit into the garage. Therefore, the fact that he has an integral/garage is absolutely pointless. The local council was not prepared to raise the height of the garage entrance because it was too expensive to do so. Therefore, according to the council, he has an integral garage because he is disabled but he leaves his car outside in the road.

As a matter of interest, the next door property, a bungalow of similar design, has been purchased by an able-bodied tenant. The kitchen is larger. When this disable person visits his next door neighbour he can turn his wheelchair round in the kitchen. In his own kitchen if he goes in forwards he has to come out backwards because, although he has the specially low kitchen units, he cannot turn round in his kitchen. If the bread from the bin is left at the wrong end of his kitchen he has to back up to it. The situation is quite ridiculous.

I have had numerous letters from disabled people complaining about how unfair it is that they are not allowed to buy their property just because they are disabled. I am sure that other Members of the Committee have also received such letters. I shall not read them out to the Committee because time is moving on and I would be on my feet for some time if I did so. One letter I can quote from memory, and it is the shortest of them all. It says: Dear Lord Swinfen, Why are disabled people discriminated against? Yours sincerely".

I believe that says it all. I beg to move.

Baroness Masham of Ilton

Over the past year, as I said at Second Reading, I have had several exasperated disabled people contact me who have wanted to buy their council houses which they have lived in for many years so that they can improve the properties and have some security for themselves and their families. Perhaps disabled people more than any others should be helped to do this.

Ever since the well-meaning but fateful amendment agreed in this Committee to the last Housing Bill, disabled people, who are responsible people but who cannot afford to go into the open market to buy a house, have been totally discriminated against in the most unfair and cruel way by councils which just could not care less about the needs and dignity of individual disabled people.

At the time of the unfortunate amendment the late Lady Lane-Fox and I tried to alert your Lordships' Committee to the demoralising and damaging effect it would have on physically disabled people denied the right to buy their houses. We were right. Several families and other people who have worked hard and paid their taxes have already missed out on benefits that other more fortunate and able-bodied tenants have had. My noble friends Lady Darcy (de Knayth) and Lord Ingleby and the noble Lord, Lord Swinfen, now understand the plight that this amendment caused.

Not only do disabled people feel discriminated against. Many have told me that, because their houses may be the only ones owned by the council in a street where all other houses have been sold, they cannot get the council to undertake decent repairs and upkeep. They feel isolated and neglected. These are the very people the Government have said for years that they wanted to encourage to be self-sufficient and responsible for their own houses. Because a small section of people are disabled they are thought not to be worth bothering about as responsible members of society. They are being kept down with those people who have no intention of taking up their responsibilities as house owners. It is just not fair.

It is a defeatist attitude to say that there are not enough adapted houses. What has happened is that the pool of suitable houses has become stagnant. Councils have not bothered to build much-needed houses suitable for disabled people who have to use wheelchairs. Hospital beds have become blocked with patients needing suitable houses and with nowhere to go. What is needed is the building of more suitable houses. Councils and housing associations need encouragement to build more. Over this matter of housing the Government are not taking seriously Care in the Community.

There are many different sections of disabled people; as President of the Spinal Injuries Association I know this full well. Disability must be the civil servant's nightmare. These people do not fit into neat categories. Some of our members are well off, with big compensation payments from injuries at work or traffic accidents. Others are poor and do not have the will to work, so they have to be helped with social support. There is a middle group of people, some of whom are real triers. They may have had an accident for which they were not insured or compensated. They may have had an illness leaving them with a disability. They work and try to be self-sufficient and they pay their taxes. They live in council accommodation and a few of them would like to buy their houses. These people are now being ostracised and they feel despised and rejected for trying to help themselves.

These are the people about whom we heard yesterday, and they will again be discriminated against further if they are not given a vote and allowed to choose a landlord. This is a very serious situation. Have physically disabled people ever before been denied the right to vote?

An accident or illness could cause any Member of this Committee to be disabled in a fraction of a second. With the lack of young people and the growing elderly population, we need more suitable housing for all sections. Choice must give satisfaction. The aim of the International Year of Disabled People in 1981 was integration and participation. I hope that my noble kinsman the Minister will help disabled people to make a move forward and not to push them back further into the slough of despond in the 1990s.

6.15 p.m.

Baroness Macleod of Bone

I should like very briefly to thank the noble Baroness and my noble friend Lord Swinfen for so ably putting forward this amendment. I believe that few people who are able-bodied have any idea of the problems of those who are physically disabled. Not only is it very expensive to be physically disabled, but when it comes to not being allowed by Parliament and by law to buy your own house, you feel, as many people have said to me in letters, that you are an outcast; the noble Baroness also said this. You feel that you are a nuisance not only to the local authority; sometimes you feel that you are a nuisance to your friends and relatives. At the same time such people are being disfranchised and made to feel second-class citizens. I do not believe that this situation can continue. I am therefore very grateful to the noble Baroness and to my noble friend Lord Swinfen for what they have said on behalf of disabled people.

Lord Carter

It may surprise the Committee to know that some of us on this side of the Chamber have been active as regards a number of Bills which have appeared before the Committee concerning disability. We have some difficulty with this amendment and I wish to explain why.

The arguments for disabled people having the right to buy are well known and they have been set out excellently by the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham. To stop them having this right amounts to discrimination against disabled people. On the other hand, if disabled tenants are given the right to buy this will reduce the stock of adapted housing. I wish to remind the Committee of the size of the problem. I take the figures from an article which appeared in the Guardian last June quoting a report prepared for Shelter called Freedom to Lose; Housing Policy and People with Disabilities.

The report pointed out as background that homelessness has risen far faster among the disabled than in the general population. In London the increase between 1980 and 1986 was 121 per cent. for the physically handicapped and 146 per cent. for the mentally ill, compared to a 70 per cent. overall increase in the country as a whole. The article continued by saying: In the late 1970s, the Department of the Environment estimated that 61,420 homes suitable for wheelchairs and 460,650 for people with other disabilities were needed". Since that time local authorities and housing associations have built only 8,519 houses for people with wheelchairs, which is about 12 per cent. of the requirement and that 44,125 houses, which is less than 10 per cent. of the requirement, have been built for people with other mobility problems. This is the problem that we face. If we give the right to buy we reduce the stock of housing that is adapted for disabled people. In an ideal world a government would place the requirement on local authorities to replace the adapted house which has been bought by another adapted house from the stock of money which we know that local authorities are sitting on from the sale of council houses.

With that in mind, a number of us have put our names to Amendment No. 152A which deals with what is usually known as a transferable discount. Under this system a disabled tenant is given the amount of money that is required to enable him to buy an adapted house outside the public sector, thus leaving the adapted house for another disabled tenant. If they had the choice, some disabled tenants would choose to buy their current homes; some would choose to move to private housing elsewhere; and some would remain as tenants. The number of tenants who would opt for a transferable discount might well be quite small, but at just over 200 so is the number of new wheel-chair adapted houses built in the public sector for rent in the past few years.

With all this in mind, I hope that the Minister will agree to take away the amendment. I am not sure whether it is within the rules of the Committee for me to withdraw an amendment before I have moved it, but the noble Earl is aware of the arguments for the transferable discount. I hope that he will agree to take away Amendment No. 152A and to come forward at Report stage with a government amendment to deal once and for all with the right to buy and the transferable discount. We would all agree that in an ideal situation it is well within the powers of government to provide the funds to enable the disabled tenant to exercise the right to buy, to place the obligation on the local authorities to replace adapted housing so that another disabled tenant could come into it, and to have a system of transferable discounts in those circumstances where the right to buy is not applicable.

Lord Monson

My difficulty in supporting the amendment introduced so well and so movingly by the noble Lord, Lord Swinfen, and by my noble friend Lady Masham, is that I have always believed the phrase "the right to buy" to be an essentially bogus one. To be able to acquire any asset—be it a house, a car, a television set or a washing machine—for less than 50 per cent. of the market value is not a right at all as the word "right" is commonly defined. It is a privilege, and a privilege inevitably exercised at the expense of other people, whether directly or indirectly. However, having said that, if the majority of people in this country who are 100 per cent. fit and able-bodied are allowed this financial privilege, surely there is no logical or moral reason why disabled people should not also be allowed to benefit from the same privilege—sweets on Sunday, as the noble Lord, Lord Swinfen, described it. For that reason I certainly support the all-party amendment, Amendment No. 152A, which I assume is the alternative to Amendment No. 147. However, I am afraid that I cannot support Amendment No. 147 because it is surely essential not to diminish the pool of specially-adapted housing.

Lord Hayter

I find myself in some difficulty. Amendment No. 152A is not in point of fact an all-party amendment. The name of the noble Viscount, Lord Ingleby, is attached to both, as is the name of the noble Lord, Lord Swinfen. Is the noble Lord proposing both, or are they alternatives?

Lord Swinfen

They are not alternatives. I would rather speak to Amendment No. 152A when we get to it.

Lord McIntosh of Haringey

We are in danger of causing some confusion not only in the mind of the noble Lord, Lord Hayter, but in the minds of many more of us. The amendments may not be alternatives in the mind of the noble Lord, Lord Swinfen, but it is possible to argue, as the noble Lord, Lord Monson, and my noble friend Lord Carter, have argued, that Amendment No. 152A is preferable to Amendment No. 147.

Amendment No. 147 was moved with great passion and skill by the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham of Ilton. I do not in any way challenge what they said about how disabled people feel on this matter. Nor do I challenge the illogicality of the case described by the noble Lord, where a local authority seems to be behaving in an unnecessarily restrictive and pettifogging way. I am sure that those on this side of the Committee would support any move to ensure justice in the case which the noble Lord described.

The difficulty is that this is not simply a matter, as some people seem to think, of discrimination against the disabled on behalf of the able-bodied. As the noble Lord, Lord Monson, said very clearly, if we pass Amendment No. 147 there will inevitably be a decline in the number of properties suitable for disabled people who have no alternative but to live in council properties. I refer to those who have fewer resources than those who will exercise what is called the right to buy. That is the difficulty. It is a question not of disabled against ablebodied but of one group of disabled people against another group.

Unless it can be shown that there is some Deus ex machina that will magically do what the noble Baroness, Lady Masham, quite rightly wanted—a great increase in the number of dwellings suitable for disabled people—we shall have to deal with the housing stock as it is. We are dealing with the housing stock being increased at the very slow rate described by my noble friend Lord Carter. If that is the case it is a matter of plain fact that as disabled people exercise the right to buy and as they die and their relatives inherit their properties the properties will no longer be held by disabled people and will therefore no longer be available in the pool of dwellings suitable for disabled people. That is the fundamental difficulty set out much more succinctly by the noble Lord, Lord Monson. That is the difficulty with Amendment No. 147 and that is why I cannot urge my noble friends to support it.

Lord Stoddart of Swindon

I hope that my noble friend will think again. I seldom disagree with what he says but I must disagree with him on this point. I understand perfectly well the point he makes about disabled people's accommodation. There is a dearth of it. If disabled people were allowed to buy, they might sell to a non-disabled person and the house could be lost to the stock of houses for the disabled for evermore.

However, the same argument applies to four-bedroomed houses. Some families in this country may have eight or nine children. They too want accommodation. They are not disabled but they are nevertheless a special case. They need four-bedroomed or five-bedroomed accommodation but the law does not say that four-bedroomed accommodation may not be sold because there could be a shortage of such accommodation for large families in the future. At present time there is discrimination against disabled people. There ought not to be such discrimination. The right answer to the problem with which my noble friend dealt is to ensure that there is always an adequate supply of rented accommodation. It is no good asking, "How do we do it?" That is a problem which we should give to the Government and to the local authorities. If you debar disabled people from buying their accommodation—which is something everyone else is entitled to do—you will make it easy for the Government to discriminate against one particular section of the population. That cannot be right in equity and I hope that my noble friend will rethink his attitude on the matter.

6.30 p.m.

Lord McIntosh of Haringey

Perhaps I may be allowed to try to resolve this fraternal disagreement in which we find ourselves. The most important thing I should like to say to my noble friend is that there is an alternative which does not involve discrimination and that is the one contained in Amendment No. 152A which was moved by his and my noble friend Lord Carter. If there is any degree of discrimination against disabled people under the present law—I accept what he says that as the situation stands there is a degree of discrimination—it can be resolved by the transferable discount which gives disabled people the right to buy a council property or a property with the kind of discount that they would have received on their own property. That proposal removes the discrimination and removes 99 per cent. of the objections that there may be to the existing situation. The 1 per cent. it does not remove concerns bloody-minded local authorities such as those described by my noble friend, Lord Stoddart of Swindon.

Therefore my noble friend must take his own position on the matter but I shall not be asking him to go into a Division Lobby against Amendment No. 147. However, I hope he will bear in mind that there is a realistic alternative which does not discriminate between one body of disabled people and another; but I fear that Amendment No. 147 does.

Baroness Masham of Ilton

Before the noble Lord, Lord McIntosh of Haringey, sits down, perhaps I may ask him whether this would be a suitable alternative. If a council sells a house to a disabled tenant, could it not build another house and thereby increase the pool of houses for disabled people?

Lord McIntosh of Haringey

Nothing would please me more than if the Government were to make money available to local authorities to build not only a replacement dwelling for disabled people but indeed many more. As my noble friend Lord Carter said, with progress being made at a level of less than 10 per cent. a year we are a long way off achieving adequate accommodation for disabled people. However, that situation must arise in any event and must be in addition to everything else we do. What is proposed by way of Amendment No. 147 does not produce a single extra unit of property suitable for disabled people. Indeed, in the medium and long term, it actually diminishes the pool. Surely we should be building more properties for disabled people on top of the maximum number rather than on top of a diminished number. That is why I am worried about Amendment No. 147.

Baroness Elliot of Harwood

I should like to express my support for the amendment because I have had some experience of local authorities building and adapting houses for disabled people. So far as I know, it does not interfere with the building of houses for ordinary people. I think it is most important. People on county council committees, and so on, do not realise that we can do something about the problem. It is not an enormous problem; it is something which can be divided up into all the areas and dealt with.

I speak specifically about Birmingham because I happen to know the district. Indeed I was responsible for a college for handicapped and non-handicapped people in that city. As a result of establishing that college, the Birmingham Housing Committee, or the Birmingham Health Authority, converted a number of flats so that those people who leave that college and can look after themselves have somewhere to live. The scheme has been a huge success. I cannot see why it cannot be done elsewhere, as long as it is done in co-operation with people and does not interfere—as the noble Lord said—with the building of houses for people who are not disabled. We must do something for disabled people, otherwise they will be isolated as they were in the past but which—thank goodness—they are not now.

Lord Dean of Beswick

I did not want to intervene in the debate but I shall do so very briefly because as a former chairman of housing in Manchester in 1971 I must point out that we were one of the first authorities which started to observe in full the provisions of the Alf Morris Act. We started to adapt housing for disabled or handicapped people and built houses at what we considered a reasonable level.

I must correct a statement made by my noble friend and colleague Lord Carter when he asked whether local authorities could build more houses for disabled people, or adapt them, and use the money which they have been sitting on. He must have been in the Chamber when on numerous occasions people on both sides have castigated the Government for sitting on that money—not the local authorities.

Lord Carter

I understand the problem entirely. I was asking the Minister to give local authorities the power to release the money.

Lord Dean of Beswick

With respect, that is not what the noble Lord said. He said that local authorities were sitting on the money. However, I see an aspect of the matter which is worthy of consideration by those who have proposed the amendment. I do not oppose the amendment in principle, but in order not to diminish the stock of houses that have been adapted and built, would it not be worth considering at a later stage of the Bill's proceedings the introduction of a further amendment in respect of such public buildings which have been bought with the privilege of a discount? Would it not be possible to consider a further amendment which provides that on the death of the person who bought the house, which has been built or adapted for the handicapped, the local authority should be given first option to buy it back? Therefore it would be kept in that pool of properties and would be available for the purpose for which it was built and adapted, instead of being lost for ever in the general pool of housing. In my view that is an objective observation and one worthy of consideration. On that basis you would not diminish the housing in the public sector which has been built for handicapped and disabled people.

I must say that if people are genuine in what they say about handicapped people—and I believe that they are—this provision may well cater for the next generation of handicapped people—not only the present one. That is my personal observation on the matter.

Lord Boyd-Carpenter

Is not the difficulty of the suggestion which the noble Lord has just made that a handicapped person under his proposal would still be discriminated against because whereas everyone else is in a position to buy their house absolutely, and pass it on in due course to their children and grandchildren, the disabled person would only be buying a tenancy for life? I wonder whether that proposition is anything like as attractive to anyone who is interested in house purchase as real purchase for all time. That is the difficulty about his ingenious idea.

I should also like to ask one question of the noble Lord, Lord Carter, as regards Amendment No. 152A which we seem in a way to have been discussing. If I read the amendment correctly, the problem is that although you give a disabled person the discount, which if he were not disabled he would be able to obtain on the sale of his house, you do not seem to be giving him the necessary opportunity to buy another house suitable for occupation by disabled people. If he can purchase the house in which he is living, which has been adapted for a disabled person, he then automatically receives a house which meets his needs.

However, if I understand Amendment No. 152 correctly—if I am mistaken I apologise to the noble Lord—all you are giving the disabled person is a discount to buy a house. The great majority of houses are not equipped for disabled people and therefore you are giving him a much emasculated right, as compared with that which everyone else receives. That seems to be the difficulty in the noble Lord's otherwise very ingenious proposal.

Lord Carter

The object of the exercise would be to enable the disabled person to move to another house and then obtain all the help he needed to get the adaptations made. The object is to preserve the stock of adapted housing in the hands of the local authority. I see the point which the noble Lord is making, but we are only talking about the transferable discount applying to perhaps 200 or 300 such buildings in the whole country if this proposal was accepted.

Lord Boyd-Carpenter

If the noble Lord will allow me to say so, under his proposal the person can buy another house which normally speaking will not be specially adapted. Therefore he will still have to find some funds to make the necessary adaptations. First of all, the house may not be suitable for conversion. Its layout, the position of lavatories and so on, might be quite unsuitable. Equally, it could also be very expensive. It seems to me that there is a very real practical difficulty in this very well-intentioned amendment.

The Earl of Caithness

Perhaps I may interrupt. We shall come to Amendment No. 152A and I do not wish to speak to it now, but it has been useful to trailer it almost to the extent of overtaking the amendments before us. If my noble friends and the noble Lord, Lord Carter, would wait, it is only one group of amendments away.

I have listened with considerable interest and sympathy to the arguments advanced in support of Amendments Nos. 147 and 180. The Government remain anxious, as they have always been, that as many tenants as possible in the public sector should have the right to buy. People with disabilities are no exception to this. As has so often been pointed out in your Lordships' House, they have quite enough difficulties to contend with in life. We have always sought to restrict the categories of homes which are excluded from the right to buy to those which it is necessary to exclude for the benefit of those disabled people who, for whatever reasons, are unable to buy or who do not wish to do so.

One category of property which would be brought within the right to buy by these amendments is dwellings which have been the subject of certain adaptations. These are dealt with in paragraph 8 of Schedule 5 to the Housing Act 1985. As some of your Lordships may recall, this originated in an amendment to the Housing and Building Control Bill 1984 moved by the noble Viscount, Lord Ingleby, and carried by your Lordships' House against the advice of the Government. My noble friend Lord Bellwin said on that occasion that he feared that the provision would perpetuate the sense of injustice and discrimination among disabled people.

My noble kinswoman, Lady Masham, reminded us of what she and indeed, our late noble friend Lady Lane-Fox both said in brave speeches supporting my noble friend Lord Bellwin. My noble friend Lady Lane-Fox was right at that time—and how I wish she were here to take part in this debate because she would be vindicated!

It has been made abundantly clear today that that feeling is real. The Government would be delighted to see the repeal of the exclusion of adapted dwellings which had not initially been purpose-build for disabled people but adapted for this purpose. There are tenants of these dwellings who have, we know, been particularly aggrieved at not being able to buy their homes.

I quite understand that the sense of grievance and frustration is shared by those who live in dwellings which were from the start purpose-built for the disabled. I must however sound a note of caution in reacting to the proposal that dwellings that have been specifically designed for the disabled people should be included in the right to buy. That would mean deleting paragraph 6 of Schedule 5. The conflict is between the quite legitimate aspirations of disabled people that they should have the same rights as others to buy their homes and the need to ensure that there is an adequate supply of suitable housing for disabled people who do not wish to buy, or do not have the means. Specially designed dwellings for the disabled have been excluded from the right to buy from the outset for this reason. I think that what I have just said somewhat supported what the noble Lord, Lord Carter said.

The number of houses and flats we are talking about is not great: there are in all some 40,000 public sector dwellings in England and Wales which are specially suitable for the disabled. The sale of even modest numbers under the right to buy could have very damaging effects on the availability of suitable homes for letting to new tenants with disabilities.

The Bill as brought from another place contained no provisions concerning the right to buy for tenants of housing suitable for people with special needs. The legislative proposals on which the Government sought the views of interested bodies did not include any such proposals, and as a result we have no formal expression of the views of organisations representing disabled people, the local authority associations or the Housing Association movement. It seems to me that it would be wise for us to extend the right to buy to the tenants of purpose-built housing for disabled people without going through the usual processes of public consultations and weighing up the arguments, which are finely balanced—

Lord McIntosh of Haringey

I wonder whether the noble Lord would read that sentence again. I thought I heard him say it would be wise for us to do that.

The Earl of Caithness

I said that it would be wise to go to consultation, because that is the usual process. That is exactly what we did before we brought in the 1984 Act, where we proposed the right to buy for premises that were adapted, not specifically designed. In order to make myself absolutely clear, what I am saying to the noble Lord is that I think it would be unwise to extend the right to buy to tenants until we have gone through that consultation, because we need that first.

I was disappointed that the noble Lord, Lord McIntosh of Haringey, was against both parts of Amendment No. 147. I welcome very much what the noble Lord, Lord Stoddart of Swindon, said. I am glad that he, like my noble friend Lord Swinfen, has been converted on this matter.

To sum up, I would ask my noble friend Lord Swinfen to withdraw the amendments on two understandings: first, that an amendment is accepted to delete paragraph 8 of Schedule 5 so far as concerns disabled people; and secondly, that we go out to formal consultation with all those interested on the effects of repealing paragraph 6 of the schedule, so bringing purpose-built housing for disabled people within the right to buy. On that basis, I hope that my noble friend will withdraw the amendment.

6.45 p.m.

Lord McIntosh of Haringey

Before the noble Lord considers what to do, since I was specifically referred to, perhaps I may say that I think he has given the Committee good advice. It is right that there should be consultation. We shall consider the point that he makes about the difference between paragraph 6 and paragraph 8 before the matter comes back at a later stage.

Baroness Masham of Ilton

Can I just say to my noble kinsman that I served for many years on two new town corporations. I can tell him that I had great difficulty persuading and cajoling them to build suitable houses for either disabled or elderly people. They do not like building one-storey accommodation. If we lived in Canada, New Zealand or Australia there would be no problem because there they build that type of house; but in this country it is very difficult. If the Minister asks local councils, I think the answer will be that they do not want the proposal that the noble Lord, Lord Swinfen, and I are now proposing. They would prefer to discriminate against disabled people. Sadly, that is the problem with local authorities and housing corporations at this time.

The Earl of Caithness

I fear that my noble kinswoman is right. Of course some local authorities will be against this. Some local authorities are still against the right to buy. That does not mean that they won the argument.

Lord Boyd-Carpenter

As I understand my noble friend's offer, and it seems to be a very generous response to the noble Lord, Lord Swinfen, whatever the result of the consultation, the matter will come back at the next stage, and it will be for your Lordships then (no doubt paying full attention to what the consultation has produced) to take a decision. If I am right about that, I very much hope that my noble friend Lord Swinfen will accept the Minister's very generous offer.

The Earl of Caithness

I can say to my noble friend that I do not see any way in which the formal consultation will be carried out by the next stage. I have no doubt that it will come back before your Lordships, whether it is brought forward either by the Government or as an amendment to another Housing Bill, which I am sure your Lordships will be pleased to look at in future sessions; but to give my noble friend any assurance that we could complete the formal consultations by the next stage would be something with which we could not comply.

Lord Boyd-Carpenter

I understand that; but I hope that I also rightly understand my noble friend to be saying that whatever the outcome of the consultations, your Lordships will have a chance to consider the matter and to see whether or not they accept any objections which local authorities or others may produce. I am simply asking that there be another chance if my noble friend Lord Swinfen accepts my noble friend's offer.

The Earl of Caithness

I find it difficult to add to what I said without my noble friend the Chief Whip being available, but my noble friend knows that this is a matter which is of serious concern to the Committee. I have no doubt that after the formal consultations have been concluded and we have received replies, the matter will come before this place in one form or another.

Lord Carter

It would help if the Minister would say that in addition to consultations with organisations concerned with the disabled he would include consultations with the Treasury and other departments to see whether the rules about the expenditure of local authority funds could be relaxed to enable the local authorities to build houses to replace those which might be bought.

The Earl of Caithness

I deliberately refrained from entering into that argument because Members opposite will know what I am going to say—we want diversity of housing. We do not necessarily want the housing built by local authorities, although they have an important part to play as enablers. We have the existing local authority stock, the housing associations and encouragement to the private sector to invest in rented housing. In view of what I said about tenants' choice yesterday and the need for housing associations to take account of those with special need, need I say more?

Lord Swinfen

To help me make up my mind, as I raised this matter on Second Reading nearly four months ago, will my noble friend the Minister tell me whether he has started any consultations or whether it was a last minute matter towards the end of the Recess?

The Earl of Caithness

How could my noble friend suggest that it was a last minute matter? Perish the thought! We have not yet started formal consultations. It is for the Committee to decide upon the amendment, but I can assure my noble friend that if he withdraws the amendment we shall proceed as I suggest; that is, by accepting the deletion of paragraph 8 at another stage and conducting formal consultations on paragraph 6.

Lord Swinfen

I thank my noble friend for that answer. Perhaps I may thank all who have taken part in this useful short debate. I share with other noble Lords concern over a potential reduction in the stock of special housing for physically disabled pople.

If the amendment were to be accepted today it might cause a slight reduction in the stock. There is an easy method of overcoming that for the vast majority of disabled people who need special accommodation. There could be some amendments to the building regulations to ensure that on at any rate the ground floor, or a level floor, doors are wide enough for wheelchairs (32 inches instead of 29 inches or whatever the metric equivalent is); that the corridor is wide enough and that there is a ground floor or level floor shower with a lavatory. That would not require a great deal of extra space. Once the building trades manufacturing industry gets into the habit of making its standard doors and door frames to the right size the costs would considerably decrease.

It is a relatively simple matter, but the building industry will not do that itself because for a short time there would be an increase in cost. However, in our medieval housing our doorways were a great deal smaller. They have grown to fit today's bigger people. Cannot we make them grow still more to fit disabled people? We have an increasing disabled population because people are living longer and our doctors are doing marvellous work keeping alive sick and injured people with disabilities whom we must not ignore.

The majority of other special needs can be catered for merely by good design. Not many houses need special lifting equipment installed. I strongly agree with the noble Lord, Lord Stoddart, that a possible reduction in the number of special units is an excuse not to sell. After all, if one wants a new car, as most of us in this place do from time to time, and one wants a British car and the numbers are running out and one is told, "You cannot have a British car" one can wait and insist on having one. There is no reason why disabled people should not be able to buy their own home.

The noble Lord, Lord Dean of Beswick, suggested a right of pre-emption on the death of the purchaser. That could be complicated because the purchaser may not be the disabled person in the family. The purchaser could be the husband with a disabled wife or a father and mother with disabled children. If they die are we going to buy back the property and make the children or the widow or widower tenants again? That idea needs a little more thought. I see the point but I do not believe that it is the answer. There is also the question of the proper valuation, because everyone else who buys would then be able to sell on at the open market value whereas we should he restricting the market value for the disabled person.

I am delighted that my noble friend the Minister and the Government are agreeable to the repeal of paragraph 8 of Schedule 5 to the Housing Act 1985. I am not happy that my noble friend does not want to repeal paragraph 6. That matter needs some careful thought. I shall not read the whole of paragraph 8 but it provides that a dwelling house shall not be available to sell to the tenant if additional space of not less than 7.5 square metres has been provided or there has been the provision of an additional bathroom or shower room or the installation of a vertical lift. On my reading, that could all be included in paragraph 6. I hope my noble friend will take on board that point and will be prepared to discuss the matter with me before Report stage so that we can come back with a properly designed amendment.

There is no point in removing paragraph 8 only to find that local housing authorities then say, "Paragraph 8 has gone, but you still cannot buy your dwelling. You are caught under paragraph That possibility is worrying. We must get the provision right or we shall be wasting not only the time of this place but the time of a great many other people.

With the undertakings that have been given by my noble friend and with, I hope, the agreement of my noble friend Lady Masham, whose name is also down on the amendment, perhaps we can come back to the point at the next stage and take it further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 119 [Restriction on letting etc. of certain houses in National Parks etc.]:

The Earl of Caithness moved Amendment No. 148: Page 84, line 29, at end insert ("or by a person whose only or principal home is and, throughout the duration of the tenancy or licence, remains the house.").

The noble Earl said: I shall speak also to Amendments Nos. 149, 150, 151 and 152.

The amendments make small changes to Clauses 119 and 120, which are concerned with conditions which may be imposed by local authorities and some other public sector landlords when selling homes in certain rural areas. Clause 119 and 120 are the result of concern, particularly in the Lake District, that some former council homes were being let out permanently by their owners, who were using the rent to support a mortgage on another home.

The Housing Act 1985 already provides for restrictions on resale of former council and housing association homes sold in national parks, areas of outstanding natural beauty and areas designated as rural by the Secretary of State. Section 37 of the 1985 Act relates to voluntary sales and section 157 to right to-buy sales. A covenant may be included requiring the purchaser and his successors to obtain the former landlord's consent to a freehold sale or the grant of a long lease of the house. Consent may not be refused if the proposed disposal is to someone who has lived or worked for the preceding three years within the county, national park or area of outstanding natural beauty in which the dwelling is situated. In the case of a right-to-buy sale, the landlord may instead reserve a right of pre-emption (a right of first refusal) for a period of 10 years from the original sale. Clauses 119 and 120 supplement those provisions by extending them to disposals of lesser interests.

Clause 119 relates to voluntary sales and Clause 120 to right-to-buy sales. Both would give landlords power to control disposals by way of tenancy or licence where the dwelling ceases to be the owner's only or main residence and the disposal is to someone who has not lived or worked in the same county, national park or area of outstanding beauty for the preceding three years. Clause 120 also provides that, where the landlord has reserved a right of preemption, any proposal for a short lease or licence (whether or not to a local person) would require the owner to offer the house back to the former landlord, who would have one month to offer to repurchase the dwelling at market value.

My right honourable friend the Secretary of State foreshadowed the amendments now before your Lordships' Committee in accepting these clauses in another place. Amendments Nos. 148 and 150 give effect in a slightly different form to the intention of the final two subsections in each of Clauses 119 and 120, which is to ensure that lettings by owners whose only or principal home is and remains the house in question are not subject to control. This limitation is important; without it an owner who wished to let his house for a short period while he himself was on holiday or temporarily absent because of the duties of his employment would have to go along to the former landlord for consent. The intention of the authors of these clauses was to restrict permanent use for letting. We accept that point but we are anxious that the rights of those who have bought their council homes are not fettered more than is absolutely necessary.

Amendments Nos. 149 and 152 delete the subsections which currently refer to a definition of "only or main residence" in capital gains tax legislation which has been repealed and which is not in any case appropriate for this purpose. "Only or principal home" is the term used in the Housing Act 1985 in the description of the tenant condition necessary for being a secure tenant. I am also advised that the drafting of the subsections is less than perfect; I do not of course blame the honourable Member who moved them for that.

Amendment No. 151 would remove a local authority's right to exercise a right of pre-emption where an owner who had bought under the right to buy applied for permission to let his home, which seems to the Government an unnecessarily draconian power. Local authorities choosing to reserve a right of pre-emption would therefore have no control over short-term lettings and licences. However, since the restrictions on lettings and licences are to apply only where the sale by the public sector landlord takes place after the passsage of this Bill, a landlord who is concerned to have some control will be able to do so by choosing the alternative of being able to veto lettings to people not having a local connection. I apologise for the length of my explanation of these basically simple amendments. I beg to move Amendment No. 148.

7 p.m.

Lord McIntosh of Haringey

We welcome the amendments. Any amendment that helps to maintain our national parks, areas of outstanding natural beauty and similar areas, as economic communities—in accordance with the definition in the Housing Act 1985—places where people live and earn their living rather than a glorified Disneyland accessible only to people wanting holiday accommodation or second homes—is to be welcomed. In so far as the amendments help to achieve that—I think that they do—we welcome them.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 149: Page 85, leave out lines 4 to 9.

On Question, amendment agreed to.

Clause 119, as amended, agreed to.

Clause 120 [Restriction on disposal of dwelling-houses in National Parks etc. acquired under the right to buy]:

The Earl of Caithness moved Amendment No. 150: Page 85, line 17, at end insert ("or by a person whose only or principal home is and, throughout the duration of the tenancy or licence, remains the dwelling-house.").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 151: Page 85, leave out lines 22 to 24.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 152: Page 85, leave out lines 41 to 46.

On Question, amendment agreed to.

Clause 120, as amended, agreed to.

Clause 121 agreed to.

The Minister of State, Scottish Office (Lord Sanderson of Bowden) moved Amendment No. 152AZ. After Clause 121 insert the following new clause:

("Preservation of right to buy on disposal to private sector landlord: Scotland

. After section 81 of the Housing (Scotland) Act 1987 there shall be inserted the following section—

"Preservation of right to buy on disposal to private sector landlord

81A.—(1) The right to buy provisions shall continue to apply where a person ceases to be a secure tenant of a house by reason of the disposal by the landlord of an interest in the house to a private sector landlord.

(2) The right to buy provisions shall not, however, continue to apply under subsection (1) in such circumstances as may be prescribed.

(3) The continued application under subsection (1) of the right to buy provisions shall be in accordance with and subject to such provisions as is prescribed which may—

1. (a) include—
2. (i) such additions and exceptions to, and adaptations and modifications of, the right to buy provisions in their continued application by virtue of this section; and
3. (ii) such incidental, supplementary and transitional provisions as the Secretary of State considers appropriate;
4. (b) differ as between different cases or descriptions of case and as between different areas;
5. (c) relate to a particular disposal.

(4) Without prejudice to the generality of subsection (3), provision may be made by virtue of it—

1. (a) specifying the persons entitled to the benefit of the right to buy provisions in their continued application by virtue of this section;
2. (b) preventing, except with the consent of the Secretary of State, the disposal by the private sector landlord of less than his whole interest in a house in relation to which the right to buy provisions continue to apply by virtue of this section;
3. (c) ensuring that where, under ground 9 of Schedule 5 to the Housing (Scotland) Act 1988 (availability of suitable alternative accommodation), the sheriff makes an order for possession of a house in relation to which the right to buy provisions continue to apply by virtue of this section and the tenant would not have the right under this Part (other than this section) to buy the house which is or will be available by way of alternative accommodation, these provisions as so continued will apply in relation to the house which is or will be so available.

(5) In this section—

1. (a) "secure tenant" means a tenant under a secure tenancy;
2. (b) "private sector landlord" means a landlord other than one of those set out in sub-paragraphs (i) to (iv) and (viii) and (ix) of paragraph (a) of subsection (2) of section 61;
3. (c) the "right to buy provisions" means the provisions of this Act relating to the right of a tenant of a house to purchase it under this Part and to his rights in respect of a loan.".").

The noble Lord said: The new clause seeks to establish arrangements under which a tenant's right to buy will be statutorily preserved where he ceases to be a secure tenant as a result of his local authority landlord disposing of his house to the private sector. Clause 123 of the Bill deals with the disposal of local authority stock and, as a general introduction to this amendment and other Scottish amendments which we will be considering later, it might be helpful if I emphasise a number of important points.

Clause 123 refers to voluntary disposals by local authorities of some or all of their housing stock. There is no compulsion on a local authority to sell its housing. While the Government are in favour of diversification of tenure and the breaking up of monolithic local authority housing estates, nothing in Clause 123 or in the amendments that we are discussing tonight will oblige the local authority to make such transfers.

Secondly, it is important to realise that powers already exist for local authorities to dispose of housing, subject to the Secretary of State's approval, under Section 12 of the Housing (Scotland) Act 1987. These powers date back many years—at least as far as 1955, I believe—and the new provisions in this Bill are intended to clarify for local authorities, tenants and prospective purchasers the criteria which the Secretary of State will take into account in determining whether to issue approval.

Thirdly, it is possible at present for local authorities to seek approval to disposal of stock, and for the Secretary of State to give this approval, even though tenants may be opposed to the sale. It is extremely unlikely that the present Secretary of State would approve any proposal by a local authority to sell stock unless he was convinced that the majority of tenants were not opposed, but there is no statutory bar on the Secretary of State doing so. The amendment I shall be introducing later this evening on consultation with tenants will strengthen tenants' rights in this regard.

Amendment No. 152AZ before us now, however, offers a further protection of tenants' rights where transfers are voluntarily initiated by the local authority. It seeks to preserve the right to buy on a statutory basis for those tenants whose secure tenancy is ended by a transfer to a private sector landlord. Subsection (1) of the new Section 81A to be introduced into the Housing (Scotland) Act 1987 enshrines this right.

The detailed arrangements for preserving the right to buy for such tenants will be set out in regulations to be made under subsections (2) and (3) of the new Section 81A, which will allow the prescription of circumstances in which the right to buy will not be preserved and for the continued application of the right to buy to be subject to such additions, exceptions, adaptations and modifications as may be prescribed. However, the intention is that, in disposals of housing initiated by the local authority the regulations should provide that a tenant who has the right to buy before the transfer should have a preserved right to buy on similar terms (for example, relating to discount) after the transfer.

The intention to bring forward this provision was signalled by the Minister with responsibility for home affairs and the environment at the Scottish Office in debate on Report of this Bill in another place. Moreover, mention of our intention to introduce this amendment to preserve the right to buy was also made in the information paper issued to housing authorities and other interested bodies at the end of September on the way in which the Secretary of State proposes to operate the powers set out in Clause 123 of this Bill. The new provisions in this new clause will, I believe, be welcomed by all who are concerned to see tenants' rights preserved. I commend the new clause to the Chamber. I beg to move.

Lord Carmichael of Kelvingrove

I thank the Minister for his explanation. I also thank him for having sent on a copy of the report of the SDD. In some ways it is a pity, although in others perhaps it is a good thing, that the Scottish Office was not as sharp as it normally is and only decided to include this clause on the rights of tenants on Report. If the Scottish Office had thought of it earlier, we would not have had the pleasure of listening to this most interesting debate as regards the rest of the country. That would have been a great pity.

I also thank the Minister for giving me prior notice of this matter. However he must be aware, although it is not his fault or the fault of his department, that I have had little time to undertake consultations on this rather important subject. The notice I received was unfortunately a little short because of the Recess.

In the course of his speech the Minister said that local authorities would not be forced to sell housing and that all sales would be voluntary. That is true to an extent, but the Minister must be aware that the Government have rather starved local authorities of money and therefore authorities are in some cases forced to get rid of their stock in order to make the butter spread a little thicker.

A problem arises in connection with this matter although it is dealt with to some extent in paragraph 18 of the report that the Minister issued. I am referring to the question of the difference between the tenants' purchase price and the total block purchase price for any purchaser who wishes to buy a number of tenanted properties. I have not had enough time to study this matter in detail and take advice on it. However, it seems to me that it would be rather a difficult matter to balance the rights of a local authority if houses which were sold subsequent to a transfer obtained a price which was different from that which a local authority would have expected to obtain otherwise. Paragraph 18 of the report touches on that. The Minister may be able at some time to explain that point in greater detail.

The most difficult point concerns the question of houses being sold off as a whole block when tenants are in occupancy. Again I think the report refers to this matter, but the difficulty concerns whether money can be easily raised to purchase such a block of properties. Will that block of, say, 100 houses, be a good risk for someone to buy, if in future 50 of them could be removed from the rented sector as the tenants had the right to buy at a later stage? That situation could lead to certain difficulties in terms of a body being able to raise the money to purchase the housing.

The report also deals with the restrictions that the Secretary of State will be able to impose and the examinations he will be able to carry out as regards the kind of people who will be allowed to buy the houses. It is noticeable that the one group—and this answers many of the questions raised in the previous debate on disablement—who will not be able to repurchase a house will be those who are not totally independent of a local authority. That point partly exemplifies the Government's attitude to local authorities.

The statements in paragraph 5 of the SDD report are highly subjective. The report states that the people who may buy blocks of houses will be considered by the Secretary of State by no known criteria. Perhaps the Minister will be willing, either now or later, to mention actual criteria. The only criteria recorded so far is that the people concerned must be independent of a local authority. We need a clearer statement from the Government on that matter.

Although we disagree with the basis of selling local authority housing because it reduces the housing stock, it would be very unfair for a tenant to find that because his dwelling had been taken over in a block purchase arrangement the rights that he enjoys at present to own his own house had been taken away from him. To that extent we accept this amendment although, as I have tried to explain, we have one or two very grave doubts about the operation of the new clause. I hope that at some stage the Minister will expand considerably on what he has told us.

7.15 p.m.

The Earl of Selkirk

I, too, wish to thank the Minister for his explanation. I also wish to thank the Scottish Office for the very clear note that it has issued explaining what the Bill seeks to achieve. The Bill contains a mixture of Scots law and English law in a manner which is extremely complex. The Bill is a reflection on the manner in which this Chamber carries out its work. To understand the Bill one must have access not only to a library of English law, but also to a library of Scots law. If one does not have at least some training in law, one simply cannot understand the Bill. My own feeling is that we are going too far in not making Bills readable to the general public.

About 500 years ago we started writing Bills in English rather than Latin. But to many people this Bill will be just as incomprehensible as if it were written in Latin. I do not wish to press these points, but I believe in time that we shall have to take that matter on board very much more seriously than we do at present.

It has been the custom in Scotland that titles for land have public register in the Register of Sasines. That probably goes back some 400 years. If Scottish Homes places certain criteria on houses bought by approved bodies, will those criteria appear in the Register of Sasines? I think it is important that they should do so, as anyone who is interested in one of the houses or who is buying one of them should know the terms of tenure. There is a long established practice in Scotland, which England is now copying, I am glad to say, that the public register of titles has always been in existence. I should like to hear the Minister's comments on that.

Further, as far as I know, the terms which Scottish Homes imposes in what is called the criteria apply to the original purchaser and to the second purchaser. What happens after that? Do they disappear or are they a continuous burden or servitude—whatever words one likes to use—on that particular property? I make those points because I think they are very important.

Are there any houses belonging to local authorities which do not contain the right for the occupier to purchase them? There was some question of secure houses. Does that mean that houses which are not secure cannot be purchased? I put these questions merely to clarify these issues because I think it is very important that the ability to acquire a house, which is everyone's most important possession, should be understood by the general public as fully as possible.

Baroness Carnegy of Lour

Before my noble friend replies, can he tell us the extent to which he intends advertising these provisions to tenants once they are incorporated in the Scottish legislation? I spoke earlier in another context about the importance of tenants understanding the arrangements. It is clearly very important also in the English legislation that tenants understand what is going on. It is important as regards both the English and the Scottish legislation that tenants should appreciate how they are affected when a new landlord seeks to take over houses from a local authority when perhaps the local authority is not very keen on the proposition. It is equally important that when the local authority wants to transfer the houses the tenants should know exactly what the arrangements are and that their rights will be preserved.

My noble friend Lord Selkirk resents somewhat the fact that changes to Scottish legislation are being made in the course of an English Bill. He always sticks up for our rights in this House. We were warned that that would happen in this way. It is absolutely excellent and I welcome it. However, I should be glad to know from my noble friend how he will make sure in this case that tenants are made fully conversant with the arrangements.

Earl Bathurst

Perhaps I may ask my noble friend Lord Selkirk and my noble friend behind me what they mean by a secure house. Does it mean a house that has a good front door with a lock? Does it mean a house in which the chimney will not fall in, or is it what some of us down here would understand as a secure house? If we are to have clarification in the Scottish Bill and the English Bill perhaps my noble friend ought to say exactly what he means by a secure house.

The Earl of Selkirk

I am sure that my noble friend will explain it much better than I can.

Lord Sanderson of Bowden

I thank all those who have spoken about our proposals. I should particularly like to thank the noble Lord, Lord Carmichael, for, as I understand it, generally welcoming what we are dealing with. I should emphasise that we are dealing with a much narrower point than I believe my noble friend Lord Selkirk addressed. We are dealing with the narrow position dealt with by the Scottish Office and my right honourable friend the Secretary of State for Scotland in relation to the voluntary sale of local authority houses which have to come within his orbit. We are dealing with that and that alone in this set of amendments.

Lord Carmichael of Kelvingrove

Am I correct in thinking that we are dealing with only one amendment? The Minister mentioned a set of amendments.

Lord Sanderson of Bowden

Yes, indeed, we are dealing with the right to buy. We shall come to the question of consultation later. However, the debate which has taken place has gone rather wide of the provision which we are dealing with here, which is the right to buy in connection with local authority voluntary sales. I shall address the points relating to consultation raised by my noble friend Lady Carnegy of Lour when we come to that particular amendment. If my noble friend will forgive me I would rather deal with it then. However, in relation to the publication of details I can assure her that that will be the case.

Baroness Carnegy of Lour

I am sorry to interrupt my noble friend, but I was speaking to this specific amendment.

Lord Sanderson of Bowden

Perhaps I may deal with that point. We have issued an information paper to local authorities on the subject of the voluntary proposals, as the noble Lord, Lord Carmichael, has said. We shall of course issue information on tenants' choice when the Scottish Bill comes into effect. Scottish Homes has power to publicise tenants' rights and will be invited by my right honourable friend so to do. I think that that answers that particular point.

Turning to the points raised by the noble Lord, Lord Carmichael, he talked first about local authorities and starvation of money, which is a subject on which I have heard him speak before. Capital allocations to local authorities for work on their own stock are up by more than 90 per cent. over the past four years. Although I see what he is getting at, I think that we need to put that point in perspective.

The noble Lord also mentioned the independence requirement in the criteria. That is not the only criterion. While he says that the criteria are that any organisation which offers to purchase stock should be independent of the local authority, if he turns to the paper he will see under paragraph 5 that there are two other provisions. It will have to be committed to providing a good service to the tenants—which seems utterly reasonable—and, under paragraph 5.2, which is perhaps the most important one, it must be able to demonstrate that it is a stable and responsible organisation with a long-term commitment to the provision of rented housing for those who need it. I hope that the noble Lord appreciates that we have tried to be as far-reaching in that respect as we can. My right honourable friend undoubtedly will take those other points into consideration when he has to decide on any proposals put to him by a local authority.

In his usual way my noble friend Lord Selkirk has raised one or two very important points. He talked about Scottish Homes' conditions and the registry of those conditions. Those conditions ought to appear as a real burden on the title in accordance with good conveyancing practice. I share his problem with this kind of legislation, and although I studied Latin at a younger age I too find some of the legislation quite difficult to follow. We do our best to make it as clear as possible and I thank him for his kind words about the Scottish Office and its lucid explanations of what we have brought before the Committee.

In relation to the point which my noble friend raised about houses not attracting the right to buy, sheltered housing and certain houses held for education purposes in the island areas are among those where no right to buy exists. He also mentioned Scottish Homes' criteria. I believe he is referring to the tenants' choice provisions in Part III of the Scottish Bill which we debated at great length in the summer.

Finally, my noble friend talked about the Bill being readable. I hope that the amendments before the Committee tonight make clear the textual amendments to the consolidated 1987 Act. We are adding complete new sections to that Act.

In conclusion, I believe that one comment was made by my noble friend about conditions. There are certain rights attaching to local authority tenants who are described as secure tenants, as indeed are tenants of the Scottish Housing Association and so on. We debated security and secure rights at great length during the passage of the Scottish Bill through this House. I do not think that I need add to that debate at this stage.

The Earl of Selkirk

I asked whether the criteria which Scottish Homes laid down would be made public. Normally they would be made public in the register. Is it the intention that that should he so or will they be publicised in some other way?

Lord Sanderson of Bowden

I should like to study what my noble friend has said and come back to him in writing to ensure that I do not admit to something we are not going to do. However, I have said that the criteria ought to appear as a real burden on the title in accordance with good conveyancing practice. I should like to check up on the point he makes about Scottish Homes and the criteria which will apply and write to him accordingly.

The Earl of Selkirk

Perhaps I may ask one other question with regard to private owners. When ownership has changed once Scottish Homes will remain an owner; when it has changed twice it will remain under Scottish Homes. If ownership changes three times what happens?

Lord Sanderson of Bowden

We debated at great length how far the Government and Scottish Homes would have powers over first, second and subsequent sales. After the property has transferred a first time Scottish Homes still has an interest. After it transfers for a second time Scottish Homes still has an interest. After that, no.

On Question, amendment agreed to.

7.30 p.m.

Lord Carter moved Amendment No. 152A: After Clause 121, insert the following new clause:

("Transferable discounts in respect of houses excluded from the right to buy.

.The Secretary of State shall have powers to promote home ownership among disabled people and in pursuance of these powers shall, within a period of twelve months beginning with the day on which this Act is passed, issue regulations to enable a sum at least equivalent to a right-to-buy discount to be made available in prescribed circumstances to a tenant of a house referred to in paragraphs (6), (7) and (8) of Schedule 5 of the Housing Act 1985.").

The noble Lord said: I shall be brief in moving this amendment because I believe that we have already discussed it when we debated Amendment No. 147. During the discussion on that amendment I was glad to note that the Minister accepted the advice which came from some Members to take back Amendment No. 147 for consideration and consultation.

The arguments for a transferable discount are well known. It leaves the adapted housing for rent still in the public sector. This measure would end the discrimination against the disabled that arises from their exclusion from the right to buy. Indeed, I fail to understand why any sensible person—or sensible government—would resist the argument for the transferable discount in this case.

I should be interested to hear the Minister's arguments. Perhaps he would like to consider this proposal alongside those in Amendment No. 147 for the right to buy and come forward with a considered view on the whole package involving the right to buy and the transferable discount. I am sure that if the package is considered in depth it will be bound to include some movement towards a system of transferable discounts. I beg to move.

Lord Swinfen

Briefly, I support the amendment of the noble Lord, Lord Carter, and I should also like to hear what my noble friend the Minister has to say on the subject of tenants of charitable housing associations who do not have the right to buy having a transferable discount. When we were discussing Amendment No. 147 my noble friend said that he was in agreement with part of my amendment but not with the whole of it. That will leave a certain number of people in specially designed accommodation for the disabled without the right to buy unless there can be an agreement that all disabled people should have the right to buy. I feel that they should be able to obtain a transferable discount so that if they so wish they can buy another property. That would still leave the property in which they were before available for reletting.

There is another point that I should like to raise concerning the right to buy and the transferable discount. When a person becomes disabled the accommodation that he or she first goes into may not remain suitable. It is not uncommon to have a progressively disabling condition and what is convenient when a person is slightly disabled ceases to be convenient after a few years. The local authority may well have considerable difficulty in finding suitable accommodation which is more conveniently situated. The disabled persons themselves may need to move because of their disability or, if they are married with children, in time the family will grow up and have different needs. It is all right for people who are able-bodied. They may use a car or go on a bus to satisfy their needs. Families which include a disabled person cannot always do that.

With a transferable discount, disabled people may be able to move to accommodation that is more convenient for them. Admittedly it will cost them more since they themselves will have to put in the aids which they need, although they can receive grants in that respect. I shall be very interested to hear what my noble friend has to say.

Baroness Masham of Ilton

Before my noble kinsman rises I should like to ask a few questions. What percentage of discount are we considering? I think that that could be a complication. Moving house is a very expensive business for disabled people in particular, who may have to move pieces of equipment. Moreover, they may have friends who help them in the locality in which they live, and that is why I support them being enabled to buy their council house—a property with which they are familiar in a locality which they know. They already know the snags and the good points.

There can be many problems when one buys a house. One can run into debt with architects' and solicitors' fees and so on. The whole thing may be too complicated and too expensive for many disabled people who wish to buy their own house.

The Earl of Caithness

I fully recognise that the intention behind the amendment is to help tenants who do not have the right to buy because they live in special housing for disabled people. As my noble friend Lord Swinfen said, there is a precedent for such assistance in what is known as the HOTCHA scheme (Home Ownership for Tenants of Charitable Housing Associations). This was introduced in 1984 to help housing association tenants who do not have the right to buy because their landlord is a charity. Further, Clause 122 of the Bill would give local authorities a power to assist their tenants to find homes of their own. I am not sure whether a clause which we have yet to debate can be called a precedent, but at least it shows that our minds are running on similar lines.

There are, however, significant differences between the amendment, the HOTCHA scheme and Clause 122. The HOTCHA scheme is operated under statutory provisions, currently in Section 45 of the Housing Associations Act 1985, which do not entitle tenants to any payment at all. The provisions merely empower my right honourable friend the Secretary of State to fund HOTCHA discounts with housing association grant. Naturally, a tenant who qualifies for assistance under the scheme is treated as if there were a statutory entitlement, but payments are subject to the availability of funds. When the scheme was introduced it was thought that only a small minority of tenants of charitable housing associations would take advantage of it, but in fact demand has greatly exceeded the resources available and tenants have had to wait.

The present amendment would leave it to the Secretary of State to prescribe the circumstances in which a tenant should be entitled to a sum in lieu of right to buy discount. I imagine, however, that the amendment intends that tenants who qualified for payments should receive them promptly and not have to join a queue. It would hardly be satisfactory to make regulations which gave someone a right to a sum of money but allowed payment to be delayed indefinitely. At the same time, however, if tenants of special housing for disabled people are to be entitled to a payment in lieu of their discount, at once, this would be putting them into a better position than other tenants. There are other exceptions to the right to buy—for instance, tenants of leasehold property where the landlord is not in a position to grant a sub-lease of reasonable length; and there are tenants who have the right to buy but have no wish to buy their present home because they do not like it or the neighbourhood. Such tenants would have no portable discount. I fear that, if tenants of special housing for disabled people had a statutory right to portable discounts, this would be discriminatory.

I also have to express concern about cost. The amendment does not say who would fund the payments. Payments under HOTCHA are funded centrally. An alternative possibility for disabled persons' housing excluded from the right to buy would be to require the landlord to pay. Either way, however, we would be faced with demand-led expenditure. This could have very serious financial implications, especially when one considers that a house which had been vacated by a tenant who received a payment under the terms of the amendment could be let to another tenant who followed suit soon after. By contrast, the discount to which the tenants are entitled under the right to buy does not cause the landlord to incur expenditure. The tenant must still pay for the house, and the discount only represents an abatement of the purchase price.

Lord McIntosh of Haringey

Before the noble Earl continues with his argument, I was staggered to hear him say that the expenditure involved would be demand-led expenditure. The whole of the right-to-buy programme is demand-led expenditure, is it not?

The Earl of Caithness

The noble Lord was so keen to interrupt me that he failed, I believe, to listen to the last part of my argument. One is demand-led expenditure in cash; the other is demand-led expenditure in an abatement of the purchase price. They are two very different things.

Clause 122 is, similarly, very different from the amendment and, as I said earlier, from the HOTCHA scheme. Local authorities would have power to assist their tenants to buy homes on the open market, but no authority would be obliged to make such payments, and they would not be linked to discount under the right to buy. We envisage that payments would be pitched at whatever was the appropriate level to enable tenants to find homes of their own, taking account of local house prices. Assistance under the new power is not meant to be a substitute for the right to buy. At the same time, tenants of homes excluded from the right to buy would of course not be precluded from receiving assistance; and if an authority had people with special needs on its waiting or transfer list it might be particularly interested in helping tenants of suitable houses to move out and buy homes of their own.

Let me summarise my misgivings about Amendment No. 152A. First, I fear that it could prove expensive, and that expenditure would be uncontrolled because tenants would be entitled to payments in lieu of discount forthwith. Secondly, we should be giving tenants of certain houses excluded from the right to buy the right to a payment in lieu. But other tenants excluded from the right to buy for other reasons would not have the same right to a payment. This seems unfair and arbitrary. When my noble friend Lord Swinfen spoke to Amendment No. 147, he said, "I do not see why the disabled should be put in a special category." In this instance he is putting them in a preferential, and therefore a special, category.

This is an important amendment. I am happy to take up the offer of the noble Lord, Lord Carter, to consider it again with the other matters that we shall also discuss between now and another stage on Amendment No. 147. I hope that he will read carefully what I have said because I am sure that it will have a strong bearing on our discussions. On that basis, I hope that he will feel able to withdraw his amendment.

Lord Carter

I am extremely grateful to the Minister for his reply. I am sorry that he is bound by the Treasury convention that an abatement of the purchase price is not the same as a cash discount. In old-fashioned accounting outside the public sector it certainly is, I can assure him. I am not sure that it is correct that the disabled should not have some positive discrimination in this field because of the particular nature of the housing with which they have to deal. I appreciate his offer to discuss the matter. On that basis I withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Arran

Perhaps this might be a convenient moment at which to break for dinner. I suggest therefore that we return to the Committee stage of the Bill at 8.30 p.m.

[The sitting was suspended from 7.43 to 8.30 p.m.]

Clause 122 [Schemes for payments to assist local housing authority tenants to obtain other accommodation]:

Lord Dean of Beswick moved Amendment No.152B:

Page 86, line 38, at end insert— ("priority being given to those persons who, in the opinion of the local authority, would be unable to acquire an interest in a dwelling house were it not for the payment of a grant under this subsection,").

The noble Lord said: I understand that with this amendment we are to discuss Amendments Nos. 152C to 152F.

Amendment No. 152B relates to evidence gained from research in Bromley and Brent referred to under IOH 4. It indicates that in the schemes with which the clause deals relatively few of the households which took advantage of the schemes would have been able to purchase without assistance from the grant. Nevertheless the clause as drafted allows local authorities a wide discretion to target suitable properties for inclusion in the scheme, whether or not existing occupiers need financial help to move. The inclusion of the amendment would provide some protection for public funds.

The purpose of Amendment No. 152C is to initiate a discussion on the appropriate levels of grant to be given to applicants under the so-called transferable discount scheme, in particular to stimulate a debate on the dangers of pushing people into marginal owner occupation. The transferable discount scheme has been operating for some time in the London boroughs of Bromley and Brent. Clause 122 is a device for embodying the scheme in legislation. The scheme as operated in those two boroughs provides for tenants living in accommodation most needed for homeless families to be offered grants to assist them to purchase or to extend properties in the private market. The schemes in Bromley and Brent have recently been extensively researched on behalf of the Department of the Environment. The research findings show that nearly all the heads of grant-purchased households were in full-time work.

In 60 per cent. of the households in Brent and 44 per cent. in Bromley there were two persons in paid work. The average total household earnings were the equivalent of about £13,000 a year in Brent and £12,000 in Bromley. This compares with a figure of £17,000 which was the average income for first-time buyers in Greater London. Information concerning weekly earnings of household heads confirmed that grant-purchasers had below average incomes which were £155 in Brent and £174 in Bromley, compared with average weekly earnings for employed men working full-time in Greater London of £255. Grant purchasers obtain larger mortgages relative to income to finance the purchase than Greater London first-time purchasers as a whole. The average advance was, in fact, £36,000.

Nearly half the grant-purchasers in Bromley and nearly one-fifth in Brent reported that they had no savings to put towards a house purchase, and only 20 per cent. in Brent and 11 per cent. in Bromley had saved more than £5,000. In Brent 29 per cent. had borrowed from relatives and 18 per cent. from friends to help finance the purchases. With rising interest rates, repossession of homes by building societies and others when purchasers fall into debt is increasing. Loss of home because of mortgage debt is now the fastest growing cause of homelessness. Some 8 per cent. of homeless acceptances by local authorities now fall into that category. It would be ironic if a measure designed to alleviate homelessness actually encouraged households into overreaching themselves financially. The percentage limit is designed to encourage prudent use of the measure by local auhorities.

Concerning Amendment No. 152E, under Section 155 of the Housing Act 1985 purchasers of council property under the right to buy are normally obliged to repay one-third of the discount granted to them for each year less than three years, if they sell a property within that time. The intention is to slow down the loss of property on to the open market. The effect of this amendment is to introduce a similar provision in respect of grants by local authorities under the transferable discount scheme. The provision should not act as a disincentive. There is no evidence that it does so under the right-to-buy provisions. However, it would introduce a measure of responsibility into the actions of would-by applicants under the scheme.

If the Minister is unwilling to concede the amendment, is he prepared to give an undertaking that the repayment of grant in such circumstances should normally be included as a condition of approval by the Secretary of State under Section 122(1)?

The purpose of Amendment No. 152D is to ensure that vacated premises are let in line with normal priorities and not sold. The clause as drafted gives local authorities a very wide discretion, subject to ministerial approval, to use the transferable discount scheme as they wish for a variety of purposes. The original schemes in Brent and Bromley were specifically aimed at dealing with homelessness. The amendment should tease out from Ministers their present intentions with regard to the scheme. We are proposing this group of amendments to find out what the Minister has to say. The Government may now see the provision being used as an aid to local authority disposal of dwellings as much as an aid to dealing with homelessness. For example an authority wishing to dispose of dwellings under Clause 123 may use the provisions to encourage tenants wishing to purchase other properties to do so. The vacated properties could then be sold.

The purpose of the last amendment in this group is to ensure that there is monitoring of the scheme. Authorities are offered a wide discretion under the scheme to use it for a variety of purposes. The original intention was to use it to combat homelessness and to target it at those who would otherwise not be able to purchase. The production of annual reports would provide some indication as to whether the scheme was indeed being so used. The scheme is also partly experimental. Its effectiveness as a more economical means of providing accommodation for the homeless than bed and breakfast accommodation requires validation. We all know the costs of that. I beg to move.

The Earl of Caithness

The object of Clause 122 is to give local authorities a new management tool to help them make the best use of their housing stock. It would confer on them express powers to give financial assistance to tenants who would like to move out of their present rented homes and buy homes of their own elsewhere. The Government have decided to put forward legislation for this purpose in the light of the encouraging results achieved by the London boroughs of Brent and Bromley in schemes operated under general powers.

We recognise the contribution which schemes of this kind can make to easing the problem of homelessness, and so we propose that authorities should have clear powers to grant financial assistance to help tenants buy homes of their own.

The clause represents a novel departure, and it has seemed right to proceed cautiously. That is why the clause requires local authorities which want to grant financial assistance to tenants to put forward schemes for approval by the Secretary of State. The chief matters to be covered in a scheme are mentioned in subsection (2) of the clause, but this list is not exhaustive.

There is one simple point that I should draw to the attention of the Committee. Clause 22 would confer a new power upon local authorities; but would not place them under any duty to make use of it. No authority will be obliged to prepare a scheme for assisting tenants to buy homes elsewhere.

Amendments Nos. 152C to 152E would specify in the legislation certain matters on which the clause is silent. The effect would be to circumscribe the freedom of local authorities in putting forward for approval schemes tailored to the particular needs and circumstances of their areas. I must confess to being a little puzzled that the noble Lord, Lord Dean of Beswick, should wish to tie the hands of the local authorities in this way.

Amendment No. 152B would require authorities to give priority to tenants who could not afford to buy homes of their own unaided. Do we really need to spell this out in legislation? Local authorities will not wish to waste their money by assisting tenants who do not need help, and in considering schemes submitted for approval my right honourable friend the Secretary of State will certainly look carefully to see that help is targetted at those who need it. The Government certainly accept the thinking behind the amendment, but I hope that in view of what I have said the noble Lord may agree that it is unnecessary.

Amendment No. 152C provides that a tenant should not receive assistance worth more than 30 per cent. of the cost of the new home. This too is a point which my right honourable friend will be looking at when vetting proposed schemes. However, it does not seem to me to be appropriate to write a figure into the legislation: there must be some danger that the statutory maximum would come to be regarded as the norm. Further, I should have thought 30 per cent. was on the high side. I would invite the noble Lord to trust the local authorities and the Secretary of State to ensure that the assistance given does not represent too high a proportion of the cost of the new house.

Amendment No. 152D would require the authority to relet the property in accordance with its published allocations priorities. One would naturally expect this to happen without express provision, given the requirements of Section 106 of the Housing Act 1985 for local authorities to publish details of their allocation arrangements. A specific provision thus seems unnecessary.

Amendment No. 152E requires a tenant receiving assistance to covenant to pay some or all of it back if the new home is sold within three years. The precedent for such a requirement is of course the requirement to repay right-to-buy discount if the former tenant disposes of the property within three years. I recognise that the amendment is closely modelled on the right-to-buy legislation.

The clause as it stands is silent about repayment of grants, but it will be open to the local authority to provide for this when submitting a scheme to my right honourable friend for approval. We would not necessarily expect authorities to insist on a repayment covenant, because the position of a tenant who accepts assistance under the new power will be significantly different from that of a tenant exercising the right to buy.

First, the new power is designed both to help tenants become home owners and to help local authorities secure vacancies for reletting. Once a tenant moves out and buys a home on the open market the local authority has its vacancy—it has what it paid for.

Secondly, unlike the right-to-buy legislation, the clause does not lay down any fixed rule to determine how much assistance authorities should offer. They will have to judge how much they need to pay in order to enable tenants to move out, and authorities will not be helping people to buy palatial new homes which could be sold for a handsome profit. The research into the Brent and Bromley schemes confirmed that tenants who received assistance bought modest houses.

I would not rule out the possibility that an authority may think a repayment covenant desirable in the particular circumstances of its area. I doubt, however, whether such a covenant would always he appropriate, and I would therefore advise against amending the clause to require repayment covenants in every case.

Finally, Amendment No. 152F provides for my right honourable friend to require authorities to make annual reports in prescribed form on the operation of their schemes, and the Secretary of State would make an annual report to Parliament summarising the results. The Government are at one with the noble Lord, Lord Dean of Beswick, on the need for formal monitoring of approved schemes.

However, we have not thought it necessary to provide for a formal report by the Secretary of State to Parliament. Information about the operation of schemes will of course be made available very readily to noble Lords on request in response to questions or letters, and similarly in another place. I would suggest, however, that it would be disproportionate to single out this particular aspect of local authority housing management for statutory reports to Parliament.

I hope that I have answered most of the points raised by the noble Lord, Lord Dean of Beswick, and I hope that he has received comfort from some of the words that I said in respect of the amendments.

8.45 p.m.

Lord Dean of Beswick

I am grateful to the Minister for his detailed reply and in some respects for the sympathetic points that he made in reply to this clutch of amendments. One of the main worries with which we are all faced—and I am sure that the Minister is as aware of it as anyone—is what appears to be the present unstoppable increase in homelessness. It is manifesting itself in inner London more than anywhere else. Reports have been submitted from independent bodies based in London which have the question of homeless people at heart. They state that, unless there is an arresting of the figure and positive attempts are made to use every means possible to try to ameliorate the situation, by the turn of the century London may be in the same situation as New York, with 30,000 people sleeping on the streets. They do not all flood in on trains. Many do so but some are indigenous to London. Some have lost their homes for a variety of reasons; an inability to pay, and so forth.

The Minister has replied in detail and this is a complex situation. I hope to read what he has said and I hope that those involved will read it. We may wish to come back at a later stage, but I am grateful to the Minister for the detailed and courteous response that he has given. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 152C to 152F not moved.]

Clause 122 agreed to.

[Amendment No. 153 had been withdrawn from the Marshalled List.]

The Earl of Caithness moved Amendment No. 153A: After Clause 122, insert the following new clause:

("Repair notices

.—(1) Part VI of the Housing Act 1985 (repair notices) shall have effect subject to the amendments in Schedule (Repair notices: amendments of Housing Act 1985, Part VI) to this Act.

(2) In section 604 of that Act (fitness for human habitation) after subsection (1) there shall be inserted the following subsection— (1A) In the application, for the purposes of Part VI, of subsection (1) to premises consisting of a flat, within the meaning of that Part, regard shall be had not only to the condition of the flat itself but also to the condition of any other part of the building as it affects the flat and, accordingly, the flat may be deemed to be unfit by reference to the defective condition of a part of the building outside the flat (whether or not that part is itself used, or suitable for use as a dwelling).

(3) The amendments in subsection (2) above and Schedule (Repair notices: amendments of Housing Act 1985, Part VI) to this Act do not have effect in relation to any repair notice, within the meaning of the said Part VI, served before this section comes into force.").

The noble Earl said: In moving amendment No. 153A I should also like to speak to Amendments Nos. 157B and 179A. These three amendments replace Amendments Nos. 143 and 153 to which I referred in replying to my noble friend Lady Faithfull when she moved Amendment No. 92 on 25th July. They include all the measures covered in the previous amendments with the addition of certain measures which were promised in an announcement made during the Bill's passage through the other place.

The amendments consist of a new clause and schedule designed to strengthen local authorities' powers to serve and enforce repair notices under Part VI of the Housing Act 1985. Repair notices are the principal means by which local authorities can take action against properties which are either unfit for human habitation or in serious disrepair. The amendments cover five main areas: penalties for noncompliance with a notice; expedited powers to carry out works in default; improved powers to recover the expenses of such works, including measures to prevent evasion of notices by sale or transfer of properties; enhanced powers in relation to tenanted properties; and powers to serve notices in relation to buildings containing flats.

Amendment No. 179A inserts a further repeal in Schedule 15 of the Bill: Sections 199 to 201 of the 1985 Act. These are replaced by the extended appeal provisions I have just described.

Taken together these provisions represent a significant strengthening of local authorities' powers to take action against those people who deliberately ignore and evade their responsibilities to maintain property in repair. At the same time they provide safeguards for those people, the majority, who are conscientious and responsible. I beg to move.

Lord Graham of Edmonton

I have been asked by my noble friend Lord McIntosh, who is temporarily absent from the Chamber, to say how grateful he is for the Minister's action. I refer to his letter to my noble friend dated 6th October which sets out faithfully the kind of thinking which was in my noble friend's mind. The new clause is eminently satisfactory.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 154: After Clause 122, insert the following new clause—

("Letting conditions applicable to improvement grants etc.

.—(1) With respect to applications for grants approved after the commencement of this Act, Part XV of the Housing Act 1985 (grants for works of improvement, repair and conversion) shall have effect subject to the following provisions of this section.

(2) In each of the following provisions—

1. (a) section 464 (preliminary condition: certificates as to future occupation) in subsection (5) (certificate or availability for letting), and
2. (b) section 501 (condition as to availability for letting) in subsection (2) (the terms of the condition),

in paragraph (a) after the word "holiday" there shall be inserted "on a tenancy which is not a long tenancy and".

(3) After the words "Rent (Agriculture) Act 1976", in each place where they occur in—

1. (a) section 464(5),
2. (b) section 501(2), and
3. (c) subsection (2)(d) of section 503 (restriction on imposition of further conditions in relation to certain grants),

there shall be inserted "or is occupied under an assured agricultural occupancy, within the meaning of Part I of the Housing Act 1988".

(4) In section 504 (further conditions as to letting of dwelling), at the beginning of subsection (1) there shall be inserted the words "Subject to subsection (1A)"; in paragraph (a) of that subsection after the word "letting" there shall be inserted "on an assured tenancy which is not a long tenancy or"; and at the end of that subsection there shall be inserted the following subsection— (1A) Paragraphs (d) to (f) of subsection (1) do not apply in the case of a dwelling which is or is to be let or available for letting on an assured tenancy.

(5) In subsection (2) of section 504 (definitions) after the words "subsection (1)" there shall be inserted "and subsection (1A)" and before paragraph (a) there shall be inserted the following paragraph— (aa) "assured tenancy" means a tenancy which is an assured tenancy within the meaning of Part I of the Housing Act 1988 or would be such a tenancy if paragraphs 3, 6, 7 and 10 of Schedule I to that Act were omitted".

(6) In section 526 (index of defined expressions in Part XV), after the entry relating to "local housing authority") there shall be inserted— long tenancy section 115".

(7) Without prejudice to subsection (1) above, where an application for a grant—

1. (a) was made but not approved before the commencement of this Act, and
2. (b) was accompanied by a certificate of availability for letting in a form which does not take account of the amendments of section 464(5) by subsections (2) and (3) above,

the certificate shall be treated as if it were in a form which takes account of the amendments made by those subsections.

(8) Without prejudice to subsection (1)) above, where a grant has been approved before the commencement of this Act and—

1. (a) section 501(2) applies to impose a condition of the grant, or
2. (b) conditions have been imposed in terms of section 504(1), the condition or conditions shall have effect as if it or they were in a form which takes account of the amendments made by subsection (3) or, as the case may be, subsections (4) and (5) above.")

The noble Earl said: The purpose of this amendment is threefold. First, it meets our commitment to ensure that home improvement grants are available to landlords who intend to let on the short tenancies provided for in Part I of the Bill. Secondly, this amendment clarifies provisions in the Housing Act 1985 relating to undertakings to let so as to make plain that home improvement grants are not available to developers who intend to make a substantial profit by selling improved properties on a long lease. Thirdly, subsections (7) and (8) provide transitional arrangements for circumstances where certification of an intention to let has been given or letting conditions have already been approved.

The amendment will enable local authorities to give grant aid to those who wish to improve their properties with a view to making them available for letting at market rent, while at the same time preventing grant from being used to subsidise property speculators. I would just reaffirm that conditions affecting owner-occupiers will remain unchanged. I beg to move.

On Question, amendment agreed to.

Baroness Gardner of Parkes moved Amendment No. 154A:

After Clause 122, insert the following new clause—

("Local Authority duty to homeless persons.

.—(1) No local authority (hereinafter called "the placing authority") shall seek to fulfil its statutory duties towards homeless persons under the Housing Act 1985 (or any Act amending or replacing the same) by placing such homeless persons in accommodation within the area of another local authority (hereinafter called "the Licensing Authority") except under and in accordance with a Licence granted by the Licensing Authority.

(2) The Secretary of State shall make regulations providing for the form that such a licence application shall take; the matters to be taken into consideration by the Licensing Authority in determining such a licence application; grounds for refusal of a licence application and any other matter in connection with such a licence application as he sees fit.").

The noble Baroness said: This new clause which I have set out here as Amendment No. 154A is self-explanatory and perhaps introduces a new element into this Bill. However, I believe that this is an occasion on which we can look at attempts to find an answer to the problems of homelessness and the effects that exist particularly in London where each area is tending to put its homeless people into someone else's area. Sometimes that is by chance and sometimes it is because that is the only place where accommodation is available.

Whatever the cause—and of course I am not going into the question of homelessness itself, which is a desperately tragic situation and I want to see everything possible done to help those who are homeless—if a local authority suddenly finds that without its knowledge another 50 homeless families suddenly appear in its area it may not be able to provide the necessary educational and back-up services which are so important to those families. This licensing that I suggest here—and I suggest it in order to see whether the Government can come up with a better answer—would mean that one would know how many homeless people were coming in and what provisions needed to be made.

Throughout London some boroughs are particularly good at sending their social service workers to other boroughs to help the families and so social services are not as big a problem. It is more the local health and education services and general facilities which are a problem. It is very important that whatever properties homeless people are occupying, they should be kept up to standard. If a local authority knows that homeless families are in a certain part of the borough it can thoroughly inspect those premises and be sure that standards are maintained. It is hard enough to live in a bedsitter or bed and breakfast hotel for homeless people but to live there with the feeling that no one either knows or cares you are there because you were put there by someone far away is not good.

This amendment attempts to find a solution. Funnily enough, some boroughs would think it was not a good solution because they think the answer is to buy a property wherever possible, whether in the country, in the next borough or wherever, and put a whole group of homeless families there. However, in social services terms it has been established that it is better for homeless people not to be together in large groups. They have a much better chance of integrating into the community if they are in smaller groups.

The aim of this amendment is to look at those possibilities. I should be interested to hear what other Members of the Committee have to say on this amendment and indeed what the Minister says about it because I have an open mind on the matter but I believe it is a subject worth looking at and worth considering in detail. That is why I have tabled this amendment. I beg to move.

Lord Graham of Edmonton

I rise to say to the noble Baroness, Lady Gardner of Parkes, that I fully understand what she is trying to do. By one means or another she is trying to force the Government to face up to the problems which arise from homelessness, particularly in London. I am sure that the Committee share her belief that the Government should do something.

The noble Baroness has invited us to give to every London borough the power of veto over another borough to stop it moving its homeless people into their borough. I had the good fortune some weeks ago, although it was a saddening experience, to go to Bayswater. That will be more familiar to the noble Baroness than to me because she knows that area very well. I met the people who form the Bayswater Hotel Homelessness Project. Astoundingly, I found that 25 of the 32 London boroughs use hotels for homeless families, It is certain that one borough sends its homeless into another borough while that borough sends its homeless into the other borough. It is a chaotic nightmare.

The Government know about that, and they have promised that they will produce a report on homelessness which we are all desperately anxious to see. In his reply I should like the Minister to tell us more about their thinking. We understand that they may be thinking of narrowing the range of people who can be classified as homeless. Whatever the justification for that, if families are homeless and they fail to be classified as homeless and therefore lose certain rights then they are on the streets.

It is no good saying, "get on yer bike", or "find a place to live". I have a letter which is a good illustration from someone in the Bayswater Hotel Homelessness Project. It is from a Mr. E. He says: My wife had a serious accident and I stayed off work to look after her. I lost my job as a result of this, I couldn't meet the rent, there was a court order and I became homeless. I am trying to get another job, but people won't employ you when you have a hotel address. I have been trying to get private accommodation. Last week I tried 30 phone numbers from Dalton's Weekly, and I've got papers from outside London. The rents are in the region of £130 a week for 2 bedroom flats. It's impossible to find out how much housing benefit I would be able to get at the kind of wages my wife and I will earn. As soon as you say you have children, they say they don't want to know. In the two cases where they said they would consider me the rent in advance and deposit came to over £1,200. That is on the light side for some of the horror stories that we know exist. I should like the Minister to recognise this. If I am asked for priorities, my priority is not to sell to people in good council accommodation the house which they are in at discounts or the other range of matters that the Government put forward and say is their housing policy. My priority is to house the people who have no home at all.

I am afraid that the Government are so concerned with putting up a facade of a global housing policy that these people who are at the bottom end will suffer. The councils have the statutory job of finding places for them to live. They are desperate. I am not discriminating between councils of a different political colour; but councils and officers must be desperate at the plight of some of their residents. They must ask themselves where they are to put them. I know that the noble Baroness, Lady Gardner of Parkes, with her special interest at Westminster, must appreciate that her borough has more homeless families in a concentrated area than anywhere else in the country.

The noble Baroness spoke about the drain upon the services and it being all very well depositing families but what about health, education and social services? All those aspects are there; but the solution I ask the noble Baroness to accept is not to put a ring fence around every borough and say, "You cannot send people in without our permission or licence". The solution is for the Government to tackle the basic problem that in every borough throughout England there are homeless people, and the wretched councils have the job, statutorily, of finding a place to put them.

I should be interested if the Minister can tell the Committee what is the Government's thinking on their current homelessness review. When are we likely to see something done about it? How quickly does the Minister believe that resources will be made available to the boroughs who have the extremely difficult job of housing their own homeless people inside their own boroughs?

9 p.m.

The Earl of Caithness

My noble friend Lady Gardner of Parkes was certainy right in saying that the amendment introduced a new element into the Bill. It is an important element and I know that it is not the first time that we have discussed homelessness in repect of this legislation now before the Committee.

I sympathise with the intention behind this amendment. I listened with care to what has been said by both my noble friend and the noble Lord, Lord Graham of Edmonton. From representations made to the Government from a number of local authorities we are well aware that the present practice of some authorities in securing accommodation outside their areas, particularly temporary accommodation, can cause difficulties for them and impose financial burdens on authorities such as Westminster, Kensington and Chelsea with large numbers of bed and breakfast hotels.

It is also unsatisfactory for the families concerned who are separated from family and friends. This is therefore one of the issues which is being addressed in the current review of homelessness legislation. As I have already said, and as I am sure my noble friend has heard me say in respect of this Bill, the review is still a long way from reaching any conclusions, and to recommend changes at this stage would therefore be premature and inappropriate. Much as I should like to answer the noble Lord, Lord Graham of Edmonton, I cannot because I do not know when the review is likely to be completed. We are working on it and I have looked at some of the work recently. I hope that the review will propose answers to some of the questions posed by my noble friend and by the noble Lord. They are intensely difficult questions to answer; but I am sure that the noble Lord would prefer that we take a little longer to get the right answers rather than hurry the report merely to get a report out.

Lord Graham of Edmonton

Before the noble Baroness responds, may I say that I understand the difficulties of the Minister. However, the situation must be seen against the background of nine years of his Government. The position has not been suddenly sprung upon the Government this year or last year. It has been a mounting problem.

The London boroughs in the year 1987–88 will spend more than £50 million in housing the homeless. My own borough of Enfield will have budgeted for more than £1 million of ratepayers money for 200 families to augment whatever money there is from elsewhere in order to find places outside Enfield. The council are sending people into Haringey and Haringey are sending people into Enfield. It is absolutely ludicrous and is part of a housing strategy. So while I understand that it is not the Minister's problem I hope he will use what has been said here tonight to inject some urgency into the position. There are 30,000 families in London who are homeless and who have been housed in more wretched accommodation than the Minister or anyone else can envisage.

Baroness Gardner of Parkes

I thank the noble Lord, Lord Graham of Edmonton, for his comments. I am interested in what he had to say. He is not necessarily right in saying that my amendment is a ring-fencing measure. In reading my amendment I think that the ring-fencing would depend on the terms of the licence and the terms under which licences are granted. It would not necessarily exclude other people. Therefore, the ring-fencing element might not be the right attitude and not be implicit in my amendment. If my noble friend the Minister is thinking that it is, that might be turning him off what might have a grain of something in it.

If, as my noble friend says, the whole question of homelessness is to be considered, then I shall await the results of that consideration; but I hope that I will not have too long to wait. It is not only the vast cost of homelessness to each local authority that is relevant, but it is the desperately sad situation for the people who are in such accommodation and who are faced with these problems in life. That is the situation what must be resolved. It will at the same time of course save local authorities some expenditure if a solution can be found. However, it is a type of problem to which money is not the answer. There must be some other answer. I hope that my noble friend the Minister will bring forward proposals eventually, if not in this Bill in his review of homelessness. Therefore, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ross of Newport moved Amendment No.154B:

After Clause 122, insert the following new clause:

("Housing the Homeless.

. In the Housing Act 1985, Part III (Housing the Homeless)—

(a) insert after section 63 (interim duty to accommodate) the following words—

Section 63A

If an applicant appeals to the county court pursuant to section 64A below (Appeal from a decision of a local housing authority), the local authority shall secure that accommodation remains available for his occupation on interlocutory application to the county court, pending the hearing of the appeal.

(b) delete section 64(4) (notification of decision and reasons and insert the following words—

"(4) If the local housing authority notify the applicant—

1. (a) that they are not satisfied that he is homeless or threatened with homelessness, or
2. (b) that they are not satisfied that he has a priority need, or
3. (c) that they are satisfied that he became homeless or threatened with homelessness intentionally, or
4. (d) that they have notified or propose to notify another local housing authority under section 67 (referral of application on grounds of local connection)

they shall at the same time notify him of their reasons and of his right of appeal pursuant to section 64A below (Appeal from a decision of a local housing authority).";

(c) delete section 64(5) (notification of decisions and reasons) and insert the following words— (5) The notice required to be given to an applicant under this section shall be given in writing and shall, if not received by him, be treated as having been given to him, only if it is made available at the authority's office for a reasonable period of not less than 28 days for collection by him or on his behalf, and, of the purpose of section MA below (Appeal from a decision of a local housing authority) the time available for an applicant to appeal to the county court shall not run until the expiry of 28 days from the date on which the notice was made available at the local authority's office or the date on which the applicant receives the notice, whichever is the earlier.

(d) insert after section 64 (notification of decisions and reasons) the following words: (Appeal from a decision of a local housing authority)

64A.—(1) An applicant notified by a local housing authority under section 64 above of their decision on the question whether he is homeless or threatened with homelessness, their decision on the question whether he has a priority need, their decision on the question whether he has a priority need, their decision whether he became homeless or threatened with homelessness intentionallly and whether they have notified or propose to notify another local housing authority under section 67 may within 21 days of notification appeal to the county court.

(2) On an appeal the court shall consider—

1. (i) whether the decision by the local housing authority was made in accordance with the law and
2. (ii) any fact relied on by the local housing authority as to the circumstances of the applicant's homelessness whether as a result of the local authority's inquiries under section 62 or otherwise and
3. (iii) any fact relied on by the applicant and set out in the applicant's Notice of Appeal.

(3) On an appeal the court may make such order either confirming, quashing or varying the decision of the local authority as it thinks fit." ").

The noble Lord said: I begin by saying (as the noble Baroness, Lady Gardner of Parkes, leaves the Chamber) that I was very much heartened by her comments on the homelessness situation. The noble Baroness is very knowledgeable on the subject. If she feels as I do, then she wants to get home quickly because I have been here for a long time. I apologise to the Committee that I shall speak at some length. I apologise because I realise that we have not progressed very far with the Bill this evening.

However, I must point out to the Minister that the position of the homeless is weakened under this Bill. I should like to read out to the Committee paragraph A.1 from an annex entitled Meeting Housing Demand, from the Housing Corporation's tenants' choice document dated 3rd August. It states that, Tenants' Choice landlords are expected"—

it says no more than that— 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 market.

Only yesterday in the Daily Telegraph there was a comment on a report by an outfit called Reward stating that in London if council house tenants are to maintain their current standard of living they need an average income of £11,387, and £9,000 elsewhere. That applies to tenants of a typical council house. There are not many people in typical council houses earning £9,000 a year, let alone £11,387.

If we take the situation outside London for maintaining the standard of living in a semidetached, three-bedroomed house, the figure is no less than £15,399 or £21,904 in Greater London. I quote those figures because I am convinced that homelessness will get a darn sight worse rather than improve. I welcome the fact that the Government are looking into the whole question of homelessness and at a way in which they can help rather than weaken the present position. However, I warn the Minister that this is a matter that will not go away but will be repeated time after time. More and more people are going to be on the streets unless we take action.

My amendment is to provide a right of appeal for homeless people to the county court. It would introduce a quick, cheap, local and easily accessible procedure whereby homeless people who have been wrongly refused housing by the local authority can appeal against that refusal. I do not make any excuses for Tower Hamlets and I understand the dreadful position that it is in. It has a large number of Bangladeshi families with no houses in which to put them. I believe it was wrong in the attitude that it took, which was condemned in subsequent reports. Nevertheless, one understands the problems that local authorities are faced with at this time, with a legal responsibility to house the homeless and with no houses in which to put them. As the noble Lord, Lord Graham, said, it is costing vast sums of money.

At the moment the only redress is an appeal to the High Court and not to the county court. When I introduced the homeless persons legislation which is now part of the Housing Act 1985 it was believed that the code of guidance spelt out how local authorities exercised their discretion to help the homeless. If that failed there then could be a judicial review. Recent happenings have shown that this is no longer good enough. In this amendment we are suggesting that appeal should be to the county court. The court would review the local authority's reasons for refusal to house the applicant and it would then make an order either confirming that decision or substituting its own decision for that of the authority. The procedure is modelled on the existing county court right of appeal for landlords against repair notices served by local authorities as provided under Section 191 of Part IX of the Housing Act 1985.

This Housing Bill fails to address the rising level of homelessness and contains no measures to relieve it. As I have said, the plight of homeless people is becoming increasingly desperate. Gaps are appearing in the protection. Homeless people wrongly turned away without help from the local authorities may now find themselves without redress through the courts. It is for this reason that a right of appeal for the homeless is needed so that the Act provides the safety net intended.

Parliament introduced the present homeless legislation which is now Part III of the Housing Act because local authorities had too wide a power to refuse to house homeless people which I described yesterday. The law now places duties on local authorities to help the homeless while leaving them considerable discretion over the level and nature of the help that they can provide according to the circumstances of the applicant. At present no right of appeal is included in that legislation because, as I said earlier, the code of guidance spelt out how local authorities should exercise their discretion to help the homeless.

The courts have removed these failsafes for applicants, and I shall quote a few cases in this respect. In the case of de Falco it was decided that local councils could themselves interpret their discretion to refuse to house the homeless. In that case it was decided that the code of guidance was not mandatory. In the famous case of Puhlhofer it was decided that a judicial review should only exceptionally be available to correct any injustice where councils refused to house the homeless. The courts would not intervene if the refusal was wrong on the facts but only if it was wrong in law or entirely absurd.

Before the case of Puhlhofer no more than a handful of homeless people who were refused housing by local authorities were able to get that refusal reconsidered by way of a judicial review. Since that case virtually none can obtain redress by that means. Recent research shows that the proportion of homeless people refused leave for a judical review has doubled since the case of Puhlhofer and the number of homeless people applying for leave halved because legal aid is now regularly refused since that decision.

Again local authorities have too great a power to refuse to house the homeless and this must undermine the morale of those who administer the legislation. Those forced to take hard decisions on a day-to-day basis at a time when the resources to house the homeless are limited will want those decisions seen to be fair. They will support a right of appeal. The lack of such an appeal is unfair to housing officers and it places them under too heavy a burden of making a correct decision under pressure. It is also unfair to homeless people who may be refused housing due to a misunderstanding or a false impression. Yet one cannot get the decision reviewed unless it is wrong in law or unsupported by any fact.

These points were raised in this Chamber when the last Housing Bill was debated in October 1986, which was certainly long before I came here. On that occasion Ministers promised to consider the need for an appeal for the homeless as part of their review of civil protection. They invited suggestions on how this might be achieved. The report of the Civil Justice Review Body published in July accepted the arguments for the creation of an appeal for the homeless yet it failed to recommend this on the grounds that it was not within the remit of the review. However, that is no reason to miss the opportunity which the Housing Bill now presents to introduce such an appeal. That is why I am bringing the amendment before the Committee tonight.

The report of the Review Body on Civil Justice accepted that judicial review has never been a satisfactory remedy for homeless people wrongly refused housing by a local authority to get that decision urgently reconsidered. Judicial review, as we know, is slow, costly, highly centralised and inaccessible to homeless applicants. Following Puhlhofer, its scope is also highly restricted. What surely is needed is a quick, cheap, local and easily accessible procedure whereby homeless people can get a refusal of housing reconsidered on findings of fact as well as on points of law. The review body accepted the argument that such an appeal could be achieved by placing jurisdiction over homelessness disputes in the county court. The procedure which is proposed in the amendment would work as follows.

If a local authority decides to refuse to house a homeless person it must notify the applicant giving reasons and stating that he has the right to appeal within 21 days. The applicant may then appeal on that refusal if he thinks it unfair by application to the county court. In his application he must set out the grounds of his appeal, including any point of law or finding of fact relied on. Interlocutory procedure allows him to seek temporary housing, pending the hearing, if the court thinks fit. In response the local authority will either reconsider its decision or apply to the court setting out its grounds. The court will then consider all the evidence and make an order either confirming the refusal or substituting its own decision for that of the local authority. This appeal is based on the precedent in the Housing Act, whereby landlords may appear against the service of repairs notices to the county court. I have an example of how it might operate in practice.

The proposal follows the logic of the decision of the noble and learned Lord, Lord Brightman, in the Puhlhofer case. I do not wish to delay the Committee unduly by explaining how the whole procedure might work. Many people support the idea of an appeal to the county court—the Women's Aid Federation; Welsh Women's Aid; voluntary agencies such as SHAC, Shelter, the Catholic Housing Aid Society; housing law practitioners; the Law Society; the Law Centres Federation; the professional body of housing officers (the Institute of Housing); and the Association of Metropolitan Authorities.

The Review Body on Civil Justice reported that an appeal of this kind was considered feasible and had support among the Association of County Court judges. It remains for the Minister to support this amendment by accepting its inclusion in the Housing Bill to ensure that homelessness legislation continues to provide a safety net for those who have to rely on it. The amendment would provide a modest improvement in that legislation; but one which is urgent, long overdue, and at very modest cost.

I have read at some length because my notes have put the case very much better than I could have put it, ad libbing from this standing position. All Members of the Committee must realise that we are moving into a new ball game under this Bill and that the position of the homeless will be weakened. There is no question of that. We know that the Government are reviewing the present homelessness legislation. We suspect that they may be looking possibly to lessen the responsibilities of local authorities in regard to the homeless. God knows, the numbers of people protected under the Act are few enough. The single homeless receive no help at all.

It is a disgrace in our society that in 1988 100,000 people are homeless and that the number will undoubtedly increase. The Minister should not be looking at ways in which to lessen the responsibilities of local authorities but should be trying to tighten that legislation and providing the necessary finance to make sure that these people get a decent roof over their heads at night. All Members on this side of the Committee (and I am sure many on the other side) very much welcome the Prime Minister's conversion to environmental concern. The speech she made the other day was greatly welcomed. I very much hope that the Minister will be able to persuade the Prime Minister that the problems of the homeless are equally important and that they will be given the priority they desperately need. I beg to move.

Lord Pitt of Hampstead

I hope that the Government will accept the amendment. It is important to a great many people. According to my figures, between September 1986 and September 1987 225,000 people applied to their local authorities to be regarded as homeless. One hundred thousand of those were accepted as homeless but 125,000 people who regarded themselves as homeless were rejected by their local authorities. That is a big problem. People who are in that position feel rejected in more ways than one, not just because they do not know where to go, where to stay or how to adjust their lives; but they also have a feeling of not being cared for in any way.

At the moment the only recourse they have is judicial review. As the noble Lord, Lord Ross of Newport, has pointed out, it is not only a very limited weapon, it is also a difficult one to use. On the other hand, the county court is available to everyone and people are accustomed to using it. It is easy for people to make appeals there.

I know that there are already local authorities which are sufficiently concerned about the matter to have created appeal machinery within the council, with three senior members of the council acting as an appeal board. By way of the amendment the noble Lord, Lord Ross of Newport, is asking that legal machinery should be established for people who feel that they have been rejected in this way.

Many such cases have been brought to my attention and the interesting aspect about them which I think ought to appeal to the Minister and the Members of the Committee sitting behind him is that many of those cases concern people who have in fact bought their homes and fallen down on their mortgage repayments. Their homes have subsequently been repossessed and the local authority has said that they were "intentionally homeless".

One can judge the matter either way. What we require—and I hope that the Government will think seriously about this—is a court which could look at the facts of the case in respect of each person in such a situation in relation to the law (the Housing (Homeless Persons) Act) and judge whether that person is genuinely homeless. In other words, it will decide whether such a person made himself intentionally homeless according to the law.

It must be said that sometimes circumstances have made the person homeless. For example, if you are working and you take on a mortgage but subsequently you cannot pay the mortgage because you have lost your job, you will be carried for a period of time by the building society. It will allow you to pay reduced mortgage repayments. But after a while you may not be able to meet even that payment. It is at that stage that foreclosure proceedings take place and people find themselves without a home.

I know that councils vary in their approach to the problem—I am sure we all know that—and the way in which they interpret the situation. Some councils say "Yes, you should have made your mortgage your main priority instead of spending money on food, clothing, and so on. You have made yourself intentionally homelsss. We cannot rehouse you". People in such a position need some redress and the obvious—I use the word advisedly—form of redress is to give them an appeal to the county court where the presiding judge will decide the matter on the facts and merits of the case in relation to the law. He will decide whether to overrule the local authority's decision. I sincerely hope that the Government will seriously consider the matter because it affects many people.

Earl Russell

I should like briefly to support my noble friend's amendment. I should like to say first that the law on unintentional homelessness is an area of quite exceptional difficulty. I have read a great many cases in The Times Law Reports in which the courts clearly had a great deal of trouble in deciding whether the person concerned was intentionally homeless or not. This is an area where the right of appeal is of particular importance.

My second point is that if you are—to understate the case a little—down on your luck, a right of appeal to the High Court is not a right of very great value. It is a right whose price tends far to exceed its value.

My third point, if I may call it that without being too grandiloquent about it, I should describe as a constitutional one. It is vitally important to the running of democracy that people should believe they have the possibility of redress within the system. With people who are down on their luck it is particularly hard to get this point across, even where an effective right exists. A right of appeal to the High Court is not an effective right. It is important that one should be able to tell homeless people that there is something effective they can lawfully do, because there are other things that they may do, of which squatting is only one, which would not be nearly so pleasant for all parties concerned.

Lord Graham of Edmonton

I rise from these front Benches to say that we very much support the thrust of the amendment. There may be better ways of dealing with the problem, but it rests upon indications that have been made by the Government that they recognise the problem and are considering it and many other aspects of homelessness.

I should like the Minister to accept fully that of all the groups of people who deserve help from the Government the homeless form the group which deserves it most. I would cheerfully given away the rights of other groups to the homeless because of the wretchedness of their circumstances. The damage to the quality of their lives and the lives of their families not only needs to be seen to be believed but when one sees it one weeps at the fact that here in our rich society we are still able to tolerate and walk by on the other side while there are men, women and especially children who live in such wretched circumstances.

The thrust of this amendment is to give a little more hope, but it adds to the authorities' burden. If the appeal procedure succeeds and more people achieve the right, the authority will have a responsibility and a duty to satisfy that right.

When we were discussing the amendment of the noble Baroness, Lady Gardner of Parkes, she said that the solution was not to provide more money. I say to the Minister that, so far as the homeless are concerned, the solution is to provide more money in the right way to the right people in order to build and to provide more homes. The solution for the homeless is to provide more homes in which they can live.

9.30 p.m.

The Earl of Caithness

I have listened with very great care to what has been said tonight. I would take issue with the noble Lord, Lord Ross of Newport, on one point in particular: that is that the position of the homeless will be weakened under this Bill. I do not agree with him on that. I know we shall differ on that, but, looking at the total picture of what the Government are doing, I do not believe that that accusation stands up. I would just draw to your Lordships' attention the last clause we debated—Clause 122—which will enable local authorities to give grants which can be used in a helpful way for the homeless.

I agree with the noble Lord, Lord Graham of Edmonton, that this is an immensely complicated problem. It varies from area to area. It is particularly acute in the South-East with bed-and-breakfasting, but it is not just a question of money as the noble Lord, Lord Graham of Edmonton, has suggested; it concerns a better utilisation of our existing housing stock. One sees the Audit Commission report. If the average time for reletting by local authorities of properties of which they have vacant possession were three instead of six weeks, a further 20,000 properties a year would be produced for letting. That would be of immense advantage to those at the lower end of the spectrum, and that is what we are talking about. The problem is complicated. The solution cannot be singled out as being merely the provision of more money, which is why we are conducting a comprehensive review.

I am grateful to the noble Lord, Lord Ross of Newport, for speaking at length on the amendment. It will help me when I judge the review. I hope that I shall be able to talk to him about the homeless because he has a vast knowledge of the subject.

Under existing legislation, it is left to the discretion of individual authorities to determine whether an applicant is homeless; whether that homelessness is intentional; whether an applicant falls within one of the priority need categories specified in the Housing Act 1985; and whether to refer his application to another authority.

I shall read carefully what the noble Lord, Lord Ross of Newport, said. I should also like to hear what further evidence he has that authorities are abusing that discretion and that an appeals procedure is now necessary, notwithstanding the fact that some authorities have their own informal procedures. We can perhaps discuss that outside the Chamber.

The Committee will also be aware, as the noble Lord pointed out, that an authority's decision is subject to judicial review by the High Court provided that the applicant obtains leave to bring such proceedings. I do not believe that one can dismiss that procedure lightly, as he did. The applicant has a genuine opportunity to use that process.

I can see adantages and disadvantages, as the Committee probably can, but, in view of the fact that a comprehensive review on homelessness legislation is under way, it would be premature to introduce the amendment into the Bill. That is not to say, however, that it is unimportant or that I am dismissing it. It is something I should like to take into consideration in the review.

The Lord Bishop of Gloucester

Before the Minister sits down, perhaps I may press him to say something more about the review. I have listened to the whole debate because of the Church's concern for the homeless. The problem is a blot on the nation. One recollects that only yesterday when we were debating blasphemy we claimed to be a Christian nation. None of us can be comfortable with the homelessness figures, which are not confined to London but are also known in provincial cities. They concern us all.

The situation is complex, as has been rightly said. I do not want to take a one-sided view of the problem in any sense. The chilling thing about the promised review is that there does not seem to be any urgency. It is at an early stage but one senses, perhaps unworthily, that infinite postponement lies along the way before something will happen. Will the Minister say a word to encourage us that something is in sight or at least just over the horizon?

The Earl of Caithness

The problem is not on the back burner. It has received enormous consideration, especially during the past three weeks. Numerous papers on it have passed through my hands. I discussed it only recently with my right honourable friend the Secretary of State. As I told the noble Lord, Lord Graham of Edmonton, earlier, I cannot give a precise timing for the review. We know that recent reports, including the Shelter/SHAC report that has just come out, will play an important part in our considerations. I assure the Committee that this is not on the hack burner, and it will come forward.

Lord Ross of Newport

I believe that the Minister is a compassionate man and I hope that what has been said in earlier discussions of the Bill will bring home to him the serious situation of the homeless that many of us feel is developing. It is becoming steadily worse. I genuinely wish that I could believe that the Bill will result in more property coming on the market. When it does come on to the market, however, I think that it will be way beyond the ability of the homeless ever to consider paying the price.

I welcome quite a lot of what is contained in the Bill and the attempt to bring back a rent sector. I agree that this may be the result in the long term, but it is very far off. What will happen in the interim? That is what we wish to get over to the Minister. Many of us are concerned about what will happen in the next five to 10 years. Local authorities are desperate. They are losing their housing stock, yet they have a legal and statutory responsibility to house the homeless. Was it really the intention that people coming from Bangladesh should be homeless? This has been seriously criticised. I accept that the authority in question is controlled by my own party, and I am not very proud of that. Nevertheless, I understand the pressures under which the chairman and officers of the housing committee have been working.

It is true that there are different approaches. It is right to give Haringey a pat on the back. It has set up its own internal appeals system with councillors. That is an option. Most people who have considered the matter would feel that that is the right, cheap, quick way to go in the case of applicants who have been turned down on various grounds. I owe a lot to Nick Raynesford, who held my hand all the way through in putting the homeless persons legislation on to the statute book. It was very sad when he lost his Fulham seat. He knows this matter inside out.

I take on hoard what the Minister has said. I hope that his door is open. We on this side, like many Members on the Government Benches, are keen to resolve the problem of the homeless, given the great expenditure on bed and breakfast accommodation —and what shady accommodation it is. I have seen some of it in my own constituency. People make large sums of money out of those who are out of work and children who have left home at the age of 16, who in the main are girls. This is at great cost to the state, and the Government are right to try to tackle it. The money should be put to much better purpose.

I believe that in the end it comes down to bricks and mortar and some kind of licensing system, as suggested by the noble Baroness. I shall not press the matter to a vote because I recognise what the Minister has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause123 [Consents to disposals of housing stock and application of receipts]:

Lord Dean of Beswick moved Amendment No. 154C:

Page 87, line 45, leave out from beginning to end of line 3 on page 88.

The noble Lord said: As we are approaching the closing stages of Committee, I do not intend to go into the great detail that I have available on the amendments. In moving Amendment No. 154C, I think that it is in order to speak also to Amendment No. 154D.

The effect of the amendment is to delete the independence criteria for landlords. The Government, in a recently published set of guidelines entitled Large Scale Voluntary Transfers of Local Authority Housing to Private Bodies, set out three main concerns regarding independence of the new landlords. Those concerns were that council membership or shareholding in a purchasing body, whether direct or indirect, should be a minority interest and should not be set at more than 20 per cent.; that consent to disposal would not be forthcoming where it was proposed that the council should provide services to the new landlord, or that the new landlord should provide services to the council. For example, the guidelines stated: the Government generally considers it inconsistent with independence of the new landlord for the Council to retain nomination rights and would not expect the local authority to continue to maintain a waiting list where it disposed of its entire housing stock".

Further, the guidelines state that selection of staff by the new landlord should be at its own discretion.

The purpose of the amendment is to secure debate and clarification by the Government of the extent to which they would expect these criteria to be used. Amendment No. 154D seeks to prevent the need to demonstrate competition and the breaking down of local authorities' stock, allowing discretion to the local authority to decide based upon positive tenants' choice, rather than the Secretary of State.

The Government have so far indicated that consent is unlikely to be given to a disposal to a single purchaser of more than 5,000 to 10,000 properties. Authorities within that range will need to demonstrate in the words of the guidelines that 'there are clear advantages" in selling to a single purchaser. The problem here is that while this may be administratively convenient for the Government, it takes no account of the fact that tenants themselves may have preferences for one landlord rather than another. What, for example, would happen where a group of tenants objected to disposal to one particular landlord and indicated that they would prefer to be taken over by another landlord who already had more than 10,000 local authority properties transferred to him? Would the Government veto the transfer?

These are just some of the points that arise. I said that I would refer to them as briefly as possible, but perhaps the Minister could enlighten us as regards the Government's views on the subjects covered by the two amendments I have mentioned. At this stage they are really in the nature of probing amendments. I beg to move Amendment No. 154C.

The Earl of Caithness

This debate takes place against a background of widespread interest from local authorities in transferring their housing to new organisations—usually housing associations. It was because of the prospect that some local authorities might wish to apply for the Secretary of State's consent to such a transfer that we introduced Clause 123.

In guidelines which we issued on 8th June this year, and of which the noble Lord, Lord Dean of Beswick, made mention, we made it clear that we were sympathetic to these large-scale voluntary transfers in principle, if they were on the right terms. We spelt out the criteria which we would normally adopt in the guidelines. The disposals would take place under existing powers. However, the powers were not drafted with large-scale transfers in mind and it is not entirely clear that they enable us to adopt all the criteria which we believe to be important. The purpose of Clause 123 is to clarify the Secretary of State's powers to take into account all of those criteria.

Amendment No. 154C would delete the provision in subsection (2) of the clause which allows the Secretary of State to take into account the extent to which a purchaser is independent of the council. If a council wants to dispose of its stock, it surely should make a clean break. The transfer of ownership would be a charade if the new landlord was tied to using council services and run by a council-dominated board. That is not to say that we oppose the notion of local involvement on the board of the purchasing body. There is no reason why the board should not contain a tenant representative, local people with legal or financial experience and so on. But we think a limit of 20 per cent. on council representation is appropriate.

Amendment No. 154D would remove the provision in subsection (2) which allows the Secretary of State to take account of the extent to which the disposal made the purchaser the main or a substantial landlord in the area. The reason for that provision is to prevent large public housing monopolies simply becoming large private housing monopolies. There is another reason. We would prefer to see a number of new organisations taking over a council's housing so that people will enjoy a choice of organisations letting private rented housing in their area in the future. They would be able to compare rent levels and quality of service of the different organisations providing rented accommodation. Good landlords would find their services in demand and the competition would motivate landlords to provide a good service or be faced with losing their tenants to a competitor.

We believe that these are necessary preconditions for allowing a council to take the radical step of opting out of direct housing provision.

Lord Dean of Beswick

I said that I would speak briefly to the amendment. The Minister's response gives an indication of the Government's views on these matters. I think that he will understand if I say that I should like to read more closely what he has said in conjunction with the information which my colleagues and I have at hand. We may wish to come back at a later stage. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 154D not moved.]

9.45 p.m.

Lord Dean of Beswick moved Amendment No. 154E:

Page 88, line 18, at end insert— ("(4C) Disposal may only take place to a landlord approved by the Corporation under section 93 of the Housing Act 1988").

The noble Lord said: This amendment is to be taken with Amendments Nos. 154G and 154J.

The Earl of Caithness

And Amendment No. 154H, I hope.

Lord Dean of Beswick

And Amendment No. 154H, I am sorry. I hope that the Committee will understand if I deal with these amendments in a similar manner to the previous group of amendments because of the time factor. That is not in an attempt to skim these matters, but the Opposition wish to see what the Government intend.

Turning to Amendment No. 154E, in Part IV of the Bill the Government have been anxious to demonstrate that tenants of public sector dwelling disposed of to private landlords through the tenants' choice mechanism will be protected against abuse. I should think that we are all in favour of that.

Under Section 93 of the Bill all landlords receiving such properties must be approved by the Housing Corporation. The corporation has established detailed criteria for the approval of landlords which are currently the subject of consultation. They will include demonstration that the applicant is operating on a sound and proper financial basis, has access to professional skills relevant to the acquisition, management, maintenance or repair of housing, has an intended level of activity which is appropriate to his size and the resources available to carry out those functions, retains dwellings acquired for letting at rents affordable to those in low paid employment, complies with detailed guidance on housing management and submits an annual return to the Housing Corporation.

However, where local authorities dispose of their property to other landlords under the powers granted under Clause 123 no such safeguards are established. The purpose of this amendment is to ascertain the Government's views as to whether this part of the Bill ought to be strengthened.

The purpose of this Amendment No. 154G is to ensure "positive voting" in the voluntary disposals procedure. One of the most objectionable aspects of the tenants' choice procedures in Part IV of the Bill is that under Clause 102 a so-called "negative" voting procedure is proposed. An application fails only if more than 50 per cent. of the eligible tenants object to the transfer proposal.

A similar situation also holds good for voluntary disposals by local authorities to private landlords. Under Schedule 3A to the Housing Act 1985 the Secretary of State shall not give his consent to the voluntary disposal if it appears to him that a majority of the tenants of the dwelling houses to which the application refers do not wish the proposal to proceed.

The procedure is, if anything, even more objectionable than in Clause 102. At least here the Housing Corporation will lay down guidelines for approved landlords as to the format of consultation and voting (in languages other than English, voting by post if necessary, etc.). Under a voluntary disposal no such safeguards are provided. Objection has to be in writing to the Secretary of State. The effect of this amendment is to introduce a positive voting procedure.

As regards the final amendment of this group, its purpose is to give tenants the "right to remain" in line with Part IV of this Bill when a disposal goes ahead, whether or not there is positive voting. Under Part IV of the Bill the Government have allowed individual tenants who register an objection to transfer to a private landlord to remain as tenants or sub-tenants of the local authority. No such procedure operates in the case of the voluntary transfer. This amendment would put that situation right and on that basis we believe that it is specially justified. I beg to move.

The Earl of Caithness

In considering these amendments, we need to remember that we are talking about a situation where the local authority itself will have made the choice to transfer its housing to a new body.

Amendment No. 154E would give the Housing Corporation a similar role in vetting purchasers of council housing as it has in the case of tenants' choice. However, it overlooks a crucial difference. In tenants' choice the idea is to allow council tenants to opt for a new landlord whether or not the council is favourably disposed to the idea. The transfers to which Section 32 disposals relate are, by definition, voluntarily undertaken by the local authority.

In such cases the council itself is the instigator. It is surely right to give it the responsibility for ensuring that the housing is going to a suitable, respectable landlord. As we made clear in our June guidelines, the Secretary of State will act as a long stop to ensure that the housing does go to that kind of landlord. It would not be sensible to bring in yet another control where it is not necessary.

Amendments Nos. 154H and 154J would give individual tenants a veto over a council's decision to opt out of providing housing. It may be that some authorities conclude that they could fulfil their housing role best by opting out of providing council housing directly. We are sympathetic to that proposition but the effect of these amendments would be to prevent them from doing so.

It is one thing to say that such a transfer should not happen in the face of overwhelming opposition from tenants. We agree with that. But it is quite another matter to force a locally elected authority to continue being a landlord against its will if it has decided to opt out of direct housing provision; met the criteria laid down by government; and explained its proposal clearly to tenants and persuaded most of them that there is no reason to object.

Amendment No. 154G takes us back to debates which took place two or three years ago when the 1986 Housing and Planning Act was passing through Parliament. The question of tenant consultation was thoroughly examined then and Parliament passed the schedule, including the provisions which this amendment would remove.

It is right that there should be safeguards for tenants and here I agree with the noble Lord, Lord Dean of Beswick, but I would remind him that we have provided them. The 1986 Act spells out the requirements for consulting tenants: the authority must give the tenants enough information about its proposals for them to take an informed view; and if a majority oppose the transfer, then it will not go ahead. So there are safeguards. A transfer cannot happen unless tenants are fully and properly consulted and it cannot happen if a majority of tenants objects. But as long as there is that long stop we accept that a local authority may opt out of the direct provision of housing.

Lord McIntosh of Haringey

I am genuinely puzzled by the Minister's answer in respect of one aspect only of this matter. He will have recognised that the wording of Amendment No. 154H is taken directly from Clause 99 of the Bill. Yesterday, after considerable debate, the Government amended Clause 99 of the Bill to strengthen the right of tenants to opt out of a mass transfer of ownership of their properties. Yet here, just because it is the council ] which is taking the decision to transfer the properties he not only fails to adopt the strengthening of the opting out provision to which he agreed on Clause 99 but denies that there should be any such provision at all. I find that strange.

I find that the Government are discriminating between those tenants who are subject to the tenants' choice procedure and those cases in which the local authority has taken a prior decision. There may be differences politically between the two but they are not differences which will become apparent to the tenants. They will feel, if they wish to opt out, that they are being unfairly discriminated against.

The Earl of Caithness

The differences of emphasis between the noble Lord and myself is demonstrated when he uses the words "just because". That is the key to the difference concerning tenants' choice, about which we were talking yesterday. One may have a situation where tenants wish to have an alternative landlord to the local authority. It may be against the wishes of the local authority. It may be that they wish to retain their housing stock, maintain their empire and their monolithic blocks. In those circumstances, where it has been put forward by the tenants, and one has tenants' choice, those who do not wish to go to a new landlord can opt back.

Today we are talking about completely different circumstances where the local authorities, as providers of the housing, are saying, "We want to move out". We are therefore talking about such different circumstances that different rules can apply. "Just because"—which the noble Lord, Lord McIntosh of Haringey, mentioned—becomes a vital ingredient.

Lord Dean of Beswick

I am a little disappointed by the Minister's reply. We have heard this week from various parts of the Chamber criticisms of the activities of local authorities. Such criticisms may have been rather more general than is the reality. The alleged behaviour of some local authorities has been given as the reason for some of the conditions that are being imposed in the Bill and the amendments that have been moved and accepted.

Today we have debated the case of disabled and handicapped people. People were going out of their way to berate local authorities without producing evidence. The Government appear to be bending over backwards to protect the interests of local authorities in this situation. However, I refer to something that I mentioned briefly yesterday. Before the Recess, I asked a Question on the activities of a particular London borough and the displacement of 300 to 400 families to make way for a road access somewhere in the dockland area. In his Answer to my Question on that day the Minister said that everyone was in agreement including the local authority. In my supplementary question I stated that I was interested not in the views of the local authority but in those of the individual tenants. The Minister said that he would remind me of that statement during the passage of this Bill.

I am sorry that I have to fall back on that position and remind the Minister that this is a situation where the Government can demonstrate that they are more concerned with the tenants in council houses than the councils. The councils do not own the properties; the councils own them on behalf of the people who populate the area. It is a public asset that they manage on behalf of the community.

I do not wish to press this matter to a vote tonight. However, I quoted yesterday an area in Essex where a group of people in a local authority with just over 2,000 houses were concerned about the activities of their local authority, and the way in which they were being dealt with without adequate consultation.

I shall look at what the Minister has said although I am disappointed in his reply. I know from the comments of my noble friend Lord McIntosh of Haringey that he is also disappointed. I beg leave to withdraw the amendment. We may wish to come back to it at a later stage.

Amendment, by leave, withdrawn.

10 p.m.

Lord Stanley of Alderley moved Amendment No. 154F:

Page 88, line 18, at end insert— ("(4C) In determining whether to give consent, the Secretary of State shall have regard to the extent (if any) to which the proposed disposal would prejudice the ability of the local housing authority to fulfil its duty to provide suitable alternative accommodation for occupiers of dwelling-houses required for housing persons employed in agriculture under Part IV of the Rent (Agriculture) Act l976.").

The noble Lord said: I ask the Committee to consider the special case of the homeless agricultural worker. I am still concerned that the effects of the Bill will mean that some local authorities may not be able to rehouse agricultural workers, despite the fact that the Government are on record as saying that they wish that to be done as it has in the past under the provisions of the Rent (Agriculture) Act 1976.

I accept the point made by the noble Lord, Lord Ross, that the numbers involved will be very small, and if the agricultural depression continues to deepen, the numbers may become even smaller. But that does not alter the fact that we should consider their position. I am still not happy about the effectiveness of the words "best endeavours", but my concern in the amendment is to make certain that the Secretary of State has the powers he needs to ensure that local authorities realise their responsibilities to provide accommodation for homeless agricultural workers in the future.

Clause 123 does not do that, for it refers only to Sections 32 and 34 of the Housing Act 1985, which deal with the terms of tenancy. It has absolutely nothing to do with the need to rehouse. I have therefore to ask my noble friend to look again at the Government's response in col. 74 of Hansard of 25th July and at the very kind letter sent to me by my noble friend on 28th July, both of which—unless I have misinterpreted them—imply that the clause would allow the Secretary of State to make sure that local authorities were able to fulfil their statutory duties to rehouse homeless agricultural workers.

I am advised that the clause does not do that, so I have proposed the amendment, which will make it possible for the Secretary of State, before giving consent for disposal of housing by a local authority, to ensure that the local authority is able to rehouse agricultural workers in the future under the terms of the Rent (Agriculture) Act 1976 as it does today. I beg to move.

The Earl of Caithness

As my noble friend will know. Part IV of the Rent (Agriculture) Act 1976 requires local authorities to use their best endeavours to provide alternative accommodation for displaced agricultural workers. It is interesting to hear my noble friend still talking about "best endeavours". It takes me back 12 years, but I am glad that he said that he would not mention it very much more this evening.

As I understand it, my noble friend is worried that the Secretary of State, in giving consent to a large-scale disposal of council housing, will not make sure that authorities can still fulfil that obligation. I hope that I can persuade him that his amendment is not necessary. We have made it clear, in responding to proposals from a number of authorities, that we have no intention of relieving them of their statutory housing duties.

The first thing to point out is that Section 28 of the Rent (Agriculture) Act does not require authorities to use their own housing to rehouse those who have been displaced. Subsection 13 states that,; In this section …references to the authority providing housing accommodation are references to its provision by any means open to the authority, whether direct or indirect". Since the section clearly envisages that the authority may, in some circumstances, fulfil its obligation indirectly, there is no reason in principle why an authority should not be able to discharge the obligation once it has disposed of all its stock.

In the guidelines about large-scale council housing transfers which we sent to local authorities in June—which I am sure my noble friend has read, learnt and inwardly digested—we made it clear that before he gave consent the Secretary of State would have to be satisfied that an authority could continue to fulfil its statutory duties, including those under the Rent (Agriculture) Act.

Clause 123 lists a number of criteria which the Secretary of State will wish to take into account. At the end of that list is a phrase requiring the Secretary of State to have regard to any other matters which he considers relevant. This general duty means that the Secretary of State would be required to have regard, among other things, to the effect of a disposal on the local authority's ability to carry out duties under Section 28 of the 1976 Act. In other words, we have no doubt that this is a relevant consideration. We have said that we shall need to be satisfied that the duty can continue to be fulfilled; but even if we had not chosen to set this rule for ourselves, the law as it stands would require us to have regard to the matter.

I sympathise with my noble friend's motives in tabling this amendment. But I can assure him that the effect which he seeks to achieve is already achieved by the clause as it stands.

Lord Stanley of Alderley

My noble friend will not be surprised to hear that I do not agree with him in the least. He says that section D provides that any other matters, whatever he considers relevant, will deal with the problem that I have raised. It will not. With the greatest respect, the whole clause deals with Sections 32 and 34 of the Housing Act dealing with the terms of the tenancy. If a lawyer is thinking about the terms of a tenancy, he will not think about the need to rehouse. I cannot agree with my noble friend. I am advised by my lawyers that they would not think in that way; they would think as I have done. That is my first difference of opinion.

My second difference of opinion is that, although we are both on the same side, my noble friend accepts that the homeless workers should be rehoused. Therefore no question of principle is involved but only a question of detail. I do not see any of the points that he has raised. I know that he has written to local authorities but it is not on the face of the Bill. At the end of the day it will be on the face of the Bill that local authorities will judge their responsibilities.

I am sorry to say that I am not happy with my noble friend's reply and I shall return to the matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 154G to 154J not moved.]

Clause 123 agreed to.

The Earl of Caithness moved Amendment No. 155:

After Clause 123, insert the following new clause: ("Application of capital money to meet costs of disposals of land.

At the end of section 430 of the Housing Act 1985 (application of capital money received on disposal of land) there shall be inserted the following subsection— (3) In the case of capital money received by a local authority in respect of—

1. (a) disposals of land held for the purposes of Part II (provision of housing), and
2. (b) any other disposals of land made by virtue of Part V (the right to buy) which do not fall within paragraph (a).

the reference in subsection (1) to any other purpose for which capital money may properly be applied includes a reference to the purpose of meeting the administrative costs of and incidental to such disposals; and, accordingly, the reference in subsection (2) to subsection (1) includes a reference to that subsection as extended by virtue of this subsection." ").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 156:

After Clause 123, insert the following new clause:

("Codes of practice in field of rented housing.

.—(1) Section 47 of the Race Relations Act 1976 (codes of practice) shall he amended in accordance with the following provisions of this section.

(2) In subsection (1) for the words "either or both" there shall be substituted the words "all or any" and at the end there shall be added the following paragraphs— (c) the elimination of discrimination in the field of housing let on tenancies or occupied under licences ("the field of rented housing"); (d) the promotion of equality of opportunity in the field of rented housing between persons of different racial groups".

(3) In subsection (3), after the words "code of practice" there shall be inserted "relating to the field of employment" and after that subsection there shall be inserted the following subsection— (3A) In the course of preparing any draft code of practice relating to the field of rented housing for eventual publication under subsection (2) the Commission shall consult with such organisations or bodies as appear to the Commission to be appropriate having regard to the content of the draft code".

(4) In subsection (4) for the words "the draft" there shall be substituted "a draft code of practice".

(5) In subsection (10) after the words "industrial tribunal" there shall be inserted "a county court or, in Scotland, a sheriff court" and after the words "the tribunal" there shall be inserted "or the court".").

The noble Earl said: I beg to move Amendment No. 156 and also speak to Amendment No. 156DC. As I said at Second Reading, Amendment No. 156 is one of a number of measures we are bringing forward to prevent racial discrimination in housing.

The Commission for Racial Equality already has the power to issue codes on employment under Section 47 of the Race Relations Act 1976 and the employment code which came into operation in 1984 is being increasingly referred to in industrial tribunal cases. The new clause would make codes in the field of rented housing statutorily admissible in court proceedings under the 1976 Act in the same way. This will help to strengthen the Act.

Because of the rules of relevance, we can only cover in the present Bill housing that is rented, leasehold or occupied under licence. Our aim is to extend the provision to cover the rest of the housing field when a suitable opportunity arises. As I said at Second Reading, we hope that this will be possible in the next Session. I commend the amendment to the Committee.

I now turn to Amendment No. 156DC, tabled in the name of the noble Lord, Lord McIntosh of Haringey, because it is relevant to our discussions so I am afraid that I will slightly pre-empt him. Section 71 of the Race Relations Act 1976 currently applies just to local authorities and requires them to carry out their various duties with a view to ensuring that unlawful discrimination is eliminated and that equal opportunity and good race relations are promoted in their areas.

We have taken the view that the responsibilities arising from Section I should be taken on board not only by local authorities but by other bodies with responsibility for overseeing the provision of housing. That is why we brought forward in another place amendments now incorporated in the Bill which apply Section 71 to the Housing Corporation and housing action trusts.

The noble Lord would wish us to go further and apply Section 71 to individual associations, co-ops and tenants' choice landlords. We are not persuaded that this would be appropriate. There is a strong promotional flavour to Section 71 so that bodies to which it applies have a duty not only to perform their own functions in a non-discriminatory way but also to take wider steps to secure good race relations and equal opportunities. This is not something we would think it right to impose on bodies often small and voluntary in nature and with a relatively narrow range of activities.

Of course that is not to say that we consider it unimportant for these landlords, or others, to conduct their affairs in a just and non-discriminatory fashion. They are already subject to provisions in the 1976 Act which make it unlawful to discriminate in the provision of services and accommodation and the granting of membership. And registered associations and co-ops and tenants' choice landlords will, as I have said, be subject to oversight by the Housing Corporation, which will be operating with the strengthened responsibility for ensuring nondiscriminatory behaviour which the Bill now gives it. The corporation will in particular be requiring landlords under the tenants' guarantee to observe housing codes issued by the Commission for Racial Equality. This will be strengthened by our proposals in Amendment No. 156 for giving such codes statutory backing. On this basis I ask the Committee to accept Amendment No. 156 and reject Amendment No. 156DC. I beg to move.

Lord McIntosh of Haringey

I must immediately express our appreciation not only of the new clause, Amendment No. 156, but for the changes which the Government introduced in another place to strengthen the powers of Section 71 of the Race Relations Act and apply them to the Housing Corporation and the housing action trusts. Indeed, it is appropriate that that should be the case because, after all, this Bill seeks a very major shift of responsibility for public housing from local authorities to the Housing Corporation and through the Housing Corporation to individual housing associations and co-operatives as well as to housing action trusts and, indeed, to any person who is an approved landlord under Part IV of this Bill.

It is valuable that the provisions of Section 71 of the Race Relations Act will now be admissible in evidence in a county court and sheriff's court in Scotland, although I note that breach of the code is not an offence in itself. We would still prefer the code of practice to be legally enforceable in itself and we still believe that it would be preferable if the obligation applied directly to housing associations and housing co-operatives rather than applying to them through codes of practice laid down by the Housing Corporation. However, we shall look at the rules which the Housing Corporation sets up to apply to individual corporations. I hope that the Minister is right and that they will prove adequate. On the basis of what he said about them I think that it is appropriate that I indicate not only our support for Amendment No. 156 but also that I shall not move Amendment No. 156DC.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 156A

After Clause 123, insert the following new clause:

("Consultation before disposal: Scotland.

.—(1) In Part III of the Housing (Scotland) Act 1987 (rights of public sector tenants) after section 81 there shall be inserted the following section—

"Consultation before disposal to private sector landlord

81 B. The provisions of Schedule 6A have effect with respect to the duties of—

1. (a) a local authority proposing to dispose of houses let on secure tenancies;
2. (b) the Secretary of State in considering whether to give his consent under 12(7) to such a disposal.

to have regard to the view of tenants liable as a result of the disposal to cease to be secure tenants (that is to say, tenants under secure tenancies).".

(2) After Schedule 6 to the Housing (Scotland) Act 1987 there shall be inserted, as Schedule 6A, the Schedule set out in Schedule [Schedule to be inserted in the Housing (Scotland) Act 1987: Schedule 6A: Consultation before disposal to private sector landlord] to this Act.

(3) The amendments made by this section apply to disposals after the commencement of this section.")

The noble Lord said: In the new Section 81B, a new Schedule 6A which we are suggesting should be added to the Housing (Scotland) Act 1987, we are proposing provisions which will require local authorities to consult with tenants affected. Local authorities will be required to have regard to the views which tenants express before the Secretary of State considers any application by the authority to dispose of any of its tenanted housing stock to the private sector. These provisions will also oblige the Secretary of State to withhold approval if the majority of tenants are opposed to the transfer.

Current legislation in Scotland—Section 12(7) of the Housing (Scotland) Act 1987—allows an authority to dispose of stock, with the consent of the Secretary of State; and this consent may, under Section 13 of the Act, be subject to conditions. But the legislation is silent on the question of consultation with tenants or on the weight to be attached to tenants' views. Legislation south of the Border, however, is very specific on the nature of the consultation to be undertaken.

The new clause and schedule before us today seek to make similar provision for Scotland by putting in place statutory arrangements for consultation with tenants; and they will further strengthen tenants' existing rights by ensuring that the Secretary of State's approval to disposal must be withheld if it appears to him that a majority of tenants affected do not wish disposal to proceed. The Secretary of State will be able to withhold consent if he is not satisfied about the general level of support for the transfer from tenants; or indeed for any other reason. I can assure the Committee that each case will be looked at very carefully on its individual merits.

During the discussion in another place of amendments to clarify existing provisions on voluntary transfers of local authority stock (now in Clause 123 of the Bill) my honourable friend the Minister for Home Affairs and the Environment at the Scottish Office gave notice that we would be tabling these amendments; and the information paper recently circulated by the Scottish Development Department on the way in which the Secretary of State proposes to exercise the powers clarified by Clause 123 of the Bill also indicated our intention to strengthen tenants' rights in this way. I hope noble Lords will agree that these amendments are desirable, and helpful, and that they will be prepared to support them. I beg to move.

10.15 p.m.

Lord Carmichael of Kelvingrove

It would be churlish not to say that the Minister has gone some way towards satisfying some of the worries that were expressed in the other place. Nevertheless, the amendment reinforces the criticism made of the boast that the Bill is a tenants' choice. It is not; it is a group tenants' choice. The tenant who is in a minority and says that he does not want to go under another landlord has no choice; he must go.

We do not yet know whether the decision will be by a majority of all tenants or only of all tenants who vote. We do not know how empty houses in a block will be treated. We do not know whether individual tenants will be given any additional rights. However, from my reading of the information paper that was given by the SDD the position now seems to be rather better than we expected.

There is a further point that I hope the Minister will accept, and know that a promise was made in the other place. We have some difficulty with such a huge new schedule. The noble Earl, Lord Selkirk, is not present but he has always complained, correctly so (and he is a reasonable man) about the difficulty of reading the law. It is not only the law, because there are also about three books to read. Could it not be added as an appendix to the next edition of the 1987 and 1988 Scottish Acts? That would save a great deal of trouble.

We will probably come back to this matter when we have the reaction of some of the housing authorities on the question of tenants' choice, but in the meantime I accept that the Minister has gone a little way towards making the Bill slightly more democratic than when it first came into this Chamber.

On Question, amendment agreed to.

Lord Dormand of Easington moved Amendment No. 156B:

After Clause 123, insert the following new clause:

("Compensation for defective houses.

.—(1) This section has effect for the purpose of facilitating the sale or improvement of defective dwellings belonging to a class eligible for designation under Part XVI of the Housing Act 1985.

(2) In subsection (4) of section 528 of that Act (Designation of defective dwellings by the Secretary of State) for the words "subject to that, a designated class shall not" there shall be substituted the words "and where the Secretary of State considers it appropriate, a designated class may".

(3) In subsection (1) of section 559 of that Act (Designation of defective dwelling under local schemes) after the words "one or more dwellings" there shall be inserted the words "and subject to receipt of notification under section 561 below, an authority shall make such a designation".

(4) At the end of subsection (3) of section 561 of that Act, the following words shall be inserted "and in making any designation or variation, the Secretary of State shall notify the authority in writing of the equivalent variation in its Housing Investment Programme allocation for any financial year in respect of which expenditure is intended to he incurred.").

The noble Lord said: This amendment is intended to rectify an injustice which affects thousands of families throughout the country. I have particular knowledge of the problem as it affects my own area—the northern region.

It concerns the difficulties experienced by people who have purchased defective housing from local authorities. The Government have recognised the problem as a general principle in that they have made grants to some local authorities where the difficulties exist. I understand that as recently as May of this year a further sum of £20 million was made available to some councils.

Two criteria have to be met in order to qualify for assistance. First, house types—I stress "types"—have to be designated as, Defective by reason of their design or construction".

Secondly, because these defects have become generally known, the house value has been substantially reduced. Where these two criteria are met, the Secretary of State can provide assistance under Section 528 of the Housing Act 1985.

The Secretary of State may not describe a designated class of property by reference to the geographical area in which the house is situated. The designation must apply to every property of that particular class in the country as a whole. However, there is another way in which the house owners may be helped. Under Section 559 of the Housing Act 1985 a local authority may designate defective dwellings in its own area provided they meet the same two conditions which I described a few moments ago.

These two sections of the Housing Act 1985 and the provisions of the housing defects legislation suggest that the Government have taken a generous view of the problems faced by the purchasers of defective local authority property. On the whole I think that is true. For that reason I find it difficult to understand why some categories of such property do not qualify for assistance. I give one specific example which I know well though I am sure that there are other types that present the same difficulties to their owners. I refer to the SKARNE type of construction which is one of the several types of prefabricated concrete section housing.

The Committee will probably know that this kind of housing is usually referred to as LPS dwellings, those letters standing for "large panel sections". I am no expert on technical building matters, but two reasons prompt me to comment. First, the building research establishment report on LPS houses, in dealing with the appraisal of such houses, says that a visual inspection should be sufficient. I dealt with this matter when I was in another place. I visited literally dozens of these houses. In the new town of Peterlee, which is in what was my constituency, there are no fewer than 1,226 SKARNE-type houses and the problems—probably even the dangers—were quite evident even to a non-technical eye such as mine.

The second reason is even more compelling and that is the simple fact that hundreds of these owners find it impossible to sell their properties. To compound the difficulty the financial institutions refuse loans either to renovate the house or to fund new buyers. To a Government who constantly make clear their support for market forces I hope that this aspect of the problem is sufficient proof of the case that I am making.

I mentioned earlier that local authorities can play a part in assisting these families and some do, to their credit. I find it extremely puzzling why some councils can interpret the legislation in a different way from others. Where local authorities help it is of the utmost importance—I need to stress this—that any of that expenditure should he the subject of an additional grant from the Government. I stress this by including it in subsection (4) of my amendment. I need hardly remind the Committee of the drastic cuts which have been made in local authority housing investment programmes in recent years. In my view it would be unfair in the extreme to expect local councils to provide for this kind of work out of their housing allocation.

I wonder whether at some point the Minister could refer to a recent High Court ruling against Thamesdown council in Wiltshire. I have read only a brief newspaper report of the case, but the decision could force Thamesdown to buy back all of the defective houses from former tenants. The implication of the decision appears to be much wider than the action we have seen so far with this problem. The ruling could transform the position. If the Minister does not have information on this matter I should be grateful if he could investigate it and write to me.

I hope that the Government will give sympathetic consideration to correcting what is something of an anomaly. We are entitled to know in specific terms why a SKARNE-type house is not included in the provisions of the Bill. Great hardship is being caused to the families concerned and the amount of money that is necessary for the relief of the problems is small in relation to the expenditure now being incurred on housing provision. The difficulty has existed for far too long and the time has arrived for sympathetic action. I beg to move.

Lord Graham of Edmonton

I rise to support my noble friend's case. I can recall that it was the noble Lord, Lord Skelmersdale, who took the Bill through the Chamber and I responded from this side. I was much more familiar with the detail. I can also recall the category of housing that concerned the constituents of my honourable friend Mr. Terry Davis. I think it was Smith's houses. There are 30 or 40 different types of house. I can understand the Government's dilemma in dealing with the matter in a blanket fashion. I can understand that they designate types almost on a hierarchical basis. They have all been proved to be defective and the Government's dilemma is that unless they take the lot they have to have some kind of a queue.

I look forward to what the Minister has to say about the SKARNE-type house. I met representatives of the authority in Peterlee and they showed me a graphic dossier. Without making a political point, individuals were prevailed upon to purchase houses. They were not large expenditures in themselves but to the individuals involved, they were large sums. I can remember other categories of houses that were built by the National Coal Board. The Government have discretion. My noble friend Lord Dormand has put forward a worthy case. A local authority may be prepared to buy back and may be prepared to ask the Minister to take into account the moneys involved when its HIP allocation is being determined. The Minister may say that if the money is given for one thing it cannot be given for something else. The position as I see it is that the Government give very little in the way of HIP allocations these days by comparison with even three or four years ago. HIP allocations have been slashed more than many other sectors of public expenditure.

I think that the Government have the opportunity here; it is not a compromise; it is a way out. I listened very carefully to what my noble friend Lord Dormand of Easington said and I understand that some councils are willing to do this but others are not. The council on whose behalf I am certain my noble friend has been approached are saying that they want to do justice to their local people. I think that the Minister has some responsibility here to help not only my noble friend but also many councils which are distressed.

We have also heard much anxiety expressed as to how we can improve the housing of people, and the homeless have been referred to. If we are talking about priorities in expenditure, there are a range of considerations and I would not begin to invite the Minister to say where his priorities lie. However, this is a good case and I hope that the Minister will respond helpfully to it.

10.30 p.m.

The Earl of Caithness

I understand what is in the mind of the noble Lord, Lord Dormand of Easington, but it is a fundamental principle of the legislation that dwellings should only be designated as inherently defective where, as a type or category, wherever they are situated, they all exhibit the same major inherent defect of design or construction. If that requirement were altered, as the clause proposes, by allowing designation by reference to the area in which the buildings are situated it would give small groups of owners privileged treatment by grant aid or repurchase while denying assistance to others living elsewhere in properties of the same type.

I think that the proper way to assist individual owners who need help to deal with problems in particular properties is by reforming the repair and improvement grant legislation. Members of the Committee may be assured that we intend to bring forward proposals for that at the earliest possible opportunity.

I would not agree that local designations should be linked to specific future allocations under an authority's housing investment programme. Again, I can understand the concern which local authorities may feel about the relationship between commitments and resources. But such allocations are necessarily made on a yearly basis, with the Secretary of State taking full account of all the authority's projected expenditure needs. Those needs will inevitably change from year to year, and it would be quite wrong—and indeed not to local authorities' advantage—for the Secretary of State to try to predetermine funding in advance of any firm knowledge of future requirements and responsibilities.

The noble Lord has expressed his own concern for home owners in Peterlee who have found difficulty in selling their SKARNE type houses. I appreciate that concern. But I have to say that the proposed amendments would not, so far as I can see, assist those owners in any real way. However perhaps I may remind the noble Lord that it does remain open to Easington District Council to make a local designation under the housing defects legislation covering houses of this type. But I think the council now acknowledges that this does not look to be the sort of case which is appropriate for action under that legislation: the problems are not of that type. Instead, I am glad to say, the council has already taken up my department's offer of consultation with the lending institutions to see if we can help to resolve any difficulties with the mortgageability of those properties. I am sure that that proposal offers the best way forward for home-owners in Peterlee, and indeed it was one of the points raised by the noble Lord.

With regard to a further point raised by the noble Lord in relation to the Thamesdown case, I do not have the details with me but of course I shall write to him when I have investigated the matter.

Lord Dormand of Easington

I must say to the Minister that not only is that a most disappointing reply but it also seems to me that he has not understood the main thrust of the argument. I think I am right in saying that from time to time the Government have designated different—or perhaps I should say, new—types of such housing; namely, the large panel section types. But we simply have not had an explanation as to why SKARNE has been excluded.

I must also say that, although the Minister has referred to Peterlee—because I happened to mention it, as I have direct experience of it—it is certainly a fact that that kind of building exists in other parts of the Northern region and I should be most surprised if there are not SKARNE houses in other parts of the country. That is really the point which the Government and the Minister in particular ought to be addressing.

The Minister also made no reference to something which I feel is of considerable importance. He may consider it a political point. I certainly do not. I hope he will forgive me for repeating this, but is it not a fact that there are literally hundreds of people who cannot sell their houses because it is so manifest and so well known that the structures are bad? I think there is even a possibility of danger with some of them. Is that not sufficient proof that the houses are in such a state and the construction is so poor that they cannot be sold? Is the Minister shaking his head? It seems to me that that is evident. I said it was part of the political philosophy of his Government. That is something to which he has to refer.

I am glad he has mentioned Thamesdown. I think that was worth mentioning. I have no more information than that which I have seen in a brief newspaper report, but the implication of it is quite clear, that where such housing, including SKARNE type, is in existence local authorities will have no choice but to buy those houses from the tenants.

The Earl of Caithness

I am grateful to the noble Lord for giving way. I think the noble Lord was right to say that I did not cover one of the points as fully as possible, and perhaps this gives me the opportunity to do so. The real point of what the noble Lord, Lord Dormand of Easington, was saying was that he acknowledges that the problems of SKARNE houses are obvious on survey. That is the key. The key point is that designation under the Housing Defects Act has to be reserved for serious inherent defects that an owner or an authority could not have known about on survey or sale or purchase.

I can confirm to the noble Lord that no large panel system houses have been designated. I can also increase the knowledge of the Committee about Thamesdown. I said I would write to the noble Lord about that. I think I should withdraw that as I have now been informed that Thamesdown may be appealing, and it would therefore be wrong of me to write to the noble Lord.

Lord Dormand of Easington

I find the first part of the Minister's statement extraordinary. I would obviously have to have a second look at the first part of his statement; but having been involved for a number of years with large panel section houses, I am astonished. My noble friend Lord Graham of Edmonton mentioned Peterlee. I do not want to keep mentioning Peterlee as the situation is country-wide; but it is something about which we happen to have direct experience.

Lord Graham of Edmonton

Before my noble friend sits down, I would ask him to pursue vigorously the question of whether the issue is not one in which the Government are resisting the equity of the case because of the cost of meeting it. I recall the debates, and visiting some of the houses and listening to people who came to see me. It is transparent to the council, to councillors, to tenants, to building societies and prospective purchasers, against the background which is rich in this Chamber of what we did in local authorities in the 1950s and 1960s to get these kinds of concrete houses built and that we are faced 20 years later with the consequences. I very much hope that the authority, together with other authorities, will press the Government by saying it is not right that they should find a means, either by designation or a way round it, of avoiding accepting responsibility, which could very well be because it is costing the Government money.

Lord Dormand of Easington

I could not have put the case in summing it up more comprehensively than my noble friend Lord Graham of Edmonton has just put it. In those circumstances, I hope that the Minister will have another look at it, particularly in relation to the Thamesdown case. I am glad to have that information about an appeal being made. It seems to me that all of these factors are very relevant indeed; but having regard to that, I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

Lord Coleraine moved Amendment No. 156C:

After Clause 123, insert the following new clause:

("Tenants' rights of first refusal 1987 c. 31.

In section 3 of the Landlord and Tenant Act 1987 (tenants qualifying for right of first refusal on disposal by landlord), in subsection (2) sub-paragraph (ii) of paragraph (a) shall be omitted.").

The noble Lord said: I should like the Committee to consider for a moment the Landlord and Tenant Act 1987. As the Committee will recall, that Act was railroaded, with the best possible intentions of the Front-Benchers concerned, through this place without a Committee stage debate in the concluding hours of the last Parliament before the general election.

On Second Reading, I and other noble Lords, including the noble and learned Lords, Lord Denning and Lord Wilberforce, suggesed strongly that the Bill contained matter which should not be allowed through this place without detailed consideration in Committee. So it is that tonight I make no apology for having what is the first Committee stage debate on that Act.

The Act enacted many of the Nugee Committee's recommendations (the Department of the Environment's inquiry into the management of privately-owned blocks of flats). Part I of the Act gives to tenants the right of first refusal when their landlord comes to sell his interest. There is however a need for each tenant to be a qualifying tenant, as defined, before he is entitled to be offered the right of first refusal. The definition of "qualifying tenant" in the 1987 Act is now widely seen to be unfortunate. Section 3(2) provides: A person is not to be regarded as being the qualifying tenant of any flat … if he is the tenant of any such flat solely by reason of a tenancy under which the demised premises consist of or include—…the flat and any common parts of the building".

The reference to "common parts" contains the problem. There are two points to be made. First, "common parts" in relation to a building as defined in Section 60 includes the structure and exterior of that building … and any common facilities within it".

Flat leases often include any one or more of those components.

My second point is that certain blocks—I have in mind certain converted houses—are let on terms where the lease of each flat includes the common parts, as we normally understand the expression, the ground floor taking in the foundations and the top flat the roof.

The landlord in a typical case will retain merely the reversion to the whole building when the leases eventually fall in. There is no doubt that the tenants of such flats should have the right of first refusal. I put down a Question asking the Government whether there were any proposals to give the right of first refusal to tenants whose flats included common parts. My noble friend's Written Answer was: We have no plans to do so. Section 3(2) of the Landlord and Tenant Act 1987 is intended to prevent tenants who are intermediate landlords from taking advantage of the right of first refusal. There is no simple way of distinguishing between such tenants and other tenants whose interest in a property which contains flats goes wider than an individual flat because it is expressed so as to include common passages and staircases".—[Official Report, 12/5/88; col. 1356.]

I leave open the question of whether it matters that some intermediate landlords have or do not have the right of first refusal. I have tabled this probing amendment which is intended to give occupying tenants rather than intermediate landlords the right of first refusal in the cases with which I am concerned. The amendment asks for the deletion of the subsection in the 1987 Act which provides that a tenant is not a qualifying tenant whose flat lease includes common parts. I should like to assure the Committee that the point is not an academic one. It is important. There is a real problem.

I stayed in Wales last weekend. On Saturday morning my host received a long letter from a prominent firm of solicitors who were advising the tenants of flats in a converted house. The gist of the advice was as follows. Because of the obscure drafting of the Act, in particular the definition of qualifying tenants in relation to common parts, the legal profession was having to advise clients to steer clear of much of the Act for the time being for fear of costly litigation.

The definition problem in relation to common parts and qualifying tenants crops up elsewhere in the Act. I have confined the amendment to tenants' rights of first refusal in Part I of the Act in the hope that I may have the encouragement of my noble friend and that other problems can be dealt with on Report. I beg to move.

The Earl of Caithness

I listened carefully to what my noble friend said on the issue. I appreciate that it is a point to which he has drawn our attention in the past. I am rather persuaded by his argument and therefore welcome the amendment. Indeed, we were already thinking on similar lines ourselves as a result of correspondence from him and others and following discussions with the Law Society. In the light of these discussions, we think that Section 3(2) could be considerably tidied up, in addition to dealing with the common parts point. The tenants we want to exclude are those who are in effect intermediary landlords. We want to achieve a similar result to that which my noble friend wishes to achieve, but to make a slightly wider ranging amendment. Moreover, if the definition of a qualifying tenant is changed for the purposes of Part I, similar considerations should apply in Parts III and IV dealing with the acquisition of the landlord's interest and the variation of leases. If my noble friend will agree to withdraw the amendment, we will consider for Report stage a set of amendments to cover not only the omission of the reference to common parts, but also the other points to which I have just referred.

Lord Coleraine

I am grateful to my noble friend for his acceptance of the amendment and, indeed, for going further than I had anticipated. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 156D not moved.]

Lord McIntosh of Haringey moved Amendment No. 156DA:

After Clause 123, insert the following new clause:

("Grants to voluntary organisations.

.—(1) The Secretary of State shall make such grants as are necessary to voluntary organisations to meet any reasonable expenditure that is attributable to the training of and the provision of information to advisers as to the meaning, application and implications of this Act.

(2) In this section "voluntary organisation" means a body other than a public or local authority body the activities of which are not carried on for profit and is concerned with the giving of advice on matters connected with housing, and "adviser" shall be construed accordingly.

(3) Subsection (1) shall cease to apply twelve months after the commencement of this Act.").

The noble Lord said: In moving Amendment No. 156DA, I wish to speak also to Amendment No. 156DB. The first amendment was debated in Committee in another place and the second, as far as I am aware, has not been debated, although I believe that it was set down for debate.

The object is to recognise that the Bill involves enormous changes in the lives of a large number of people. In this country there are approximately 5 million council tenants. A large number of these, even if they do not land up as tenants, are liable to be approached to become tenants of someone else and to have propositions put to them which they will often find very difficult to understand.

The question of tenants is the significant point here as it affects far more individuals and families than any other part of the Bill. If tenants are to make reasoned decisions on matters put to them, they should be able to make an informed choice after receiving a proposal from a landlord. They must understand the implication of the many new words that are being introduced into the law, such as "assured tenancy" and "shorthold tenancy". They will want to know the implications for rent, security of tenure, repair obligations and so on. All these matters will be unclear to them even if they have well understood the previous regime.

I said that Part IV of the Bill was the most significant part; but when one comes to think of it, all parts of the Bill affect very large numbers of people. The part of the Bill which concerns housing benefit, which we have been debating today, raises questions. What is tenants' entitlement to housing benefit when new rents are being negotiated? What are the long-term implications of changes from a local authority to a housing association landlord? What opportunities exist under the new legislation for tenants to participate in the management of their own homes? I can assure the Committee that I have only been given examples of the kind of questions which are already arising and which have already been put to bodies such as the National Association of Citizens Advice Bureaux and the Federation of Independent Advice Centres.

There has already been a dramatic increase in the number of housing and housing-related inquiries put to voluntary bodies, which are often set up with the support of Government to give advice to people on housing and other citizenship matters.

The National Association of Citizens Advice Bureaux and the Federation of Independent Advice Centres have already put applications in to Government, and to the Housing Corporation, I believe, for support for this immensely increased work load. They have not yet received a reply. I fear there is a risk that even if the Government agree to these amendments now, or indicate that they will support or draft similar amendments for a later stage of this Bill, for some of these people the expenditure has already been incurred and they have not had any recompense for it. For some of these people it is already rather late for this amendment to be put down.

The matter of the first amendment to which I referred—Amendment No. 156DA—was, as I said, debated in Committee in another place. The amendment was proposed by a Conservative Back-Bencher and was supported by at least one other Conservative Back-Bencher. It was withdrawn after assurances from the then Minister responsible for housing that the Government were aware of the need for information, and that they would be expanding the role of the Housing Corporation; and indeed that they would be publishing sufficient information themselves to explain the new rights, particularly under Part IV. But I do not think, with hindsight, that those were good enough assurances to justify the withdrawal of the amendment. I think that these are extremely serious matters which affect bodies which have been performing sterling service and which need further support to meet the increasing challenges which are being placed before them. I beg to move.

The Earl of Caithness

We recognise—as indeed my honourable friend the then Minister for Housing and Planning said more than once in another place—that there is a need to provide advice and information on the effects the legislation will have. The department has already gone to considerable lengths to make leaflets on the contents of the Bill freely available. Once the Bill has received Royal Assent, we shall be taking further steps to ensure that people understand the legislation, including the very points that the noble Lord has mentioned. For example, the department will ensure that leaflets explaining the changes for private sector tenants and landlords are available in libraries, post offices, and other public places; there will also be a poster campaign to alert tenants and landlords to the importance of the changes.

On tenants' choice we have given assurances that the Housing Corporation will provide an information service for tenants. It will be a condition of approval that an applicant landlord will have to give an undertaking to the corporation to keep the tenants informed at all key stages of the process. Regulations will set out the consultation requirements for the applicant to make sure that tenants are informed about the consequences of the vote. We want tenants to take informed decisions, and we will make sure we do all we can to make that possible.

The important role of voluntary organisations in helping to provide advice is well recognised by the Government. My department funds some of these information services and voluntary organisations, and is considering bids for additional funds from such bodies. We are looking at these bids sympathetically. But these amendments would require the Government to meet any claims for funds from any advice group or voluntary organisation. The Committee will, I am sure, agree that the Government could not agree to make an open-ended commitment. I therefore invite the noble Lord to acknowledge the Government's genuine desire to see that adequate public information is made available about the contents of the Bill and our willingness to consider reasonable bids for funds.

Lord McIntosh of Haringey

I think that the Minister's most encouraging words were a recognition that the Government are receiving bids from voluntary organisations and that those bids will be considered sympathetically. I merely ask him whether for heaven's sake his department will hurry up, because it is already happening; the demands are already being placed on the voluntary organisations. It is not good enough for the Government to wait until the Bill receives Royal Assent to put out publicity material: it ought to be done before then.

On the basis of what the Minister has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 156DB and 156DC not moved.]

Lord McIntosh of Haringey moved Amendment No. 156DD:

After Clause 123, insert the following new clause:

("Empty property use orders.

.—(1) Where the Secretary of State is satisfied that—

1. (a) any house or self-contained flat within a house, which is empty, or
2. (b) any building which contains residential accommodation comprising one or more separate dwellings which are empty,

and is in the ownership of a local authority and has remained empty for a period of at least six months, he shall serve on the authority a notice requiring it to submit proposals for bringing it into residential use.

(2) A local authority upon whom a notice is served under subsection (1) above shall within 21 days submit to the Secretary of State proposals to bring the property into residential use.

(3) The Secretary of State may make an order under this subsection to be known as an Empty Property Use Order with regard to any empty residential accommodation within their district if the local authority having control of that accommodation has failed to provide satisfactory proposals or has failed to implement such proposals.

(4) The Secretary of State shall after service of the Order enter on the premises and take all necessary steps to render the premises capable of providing residential accommodation.

(5) Any property rendered capable of providing residential accommodation under subsection (4) above shall be let on a tenancy to which paragraph 6 of Schedule 1 to the Housing Act 1985 shall apply.

(6) In this section "local authority" has the meaning given in section 1 of the Housing Act 1985." ").

The noble Lord said: I put down this amendment because I have become increasingly fed up with the vapid propaganda which comes from many government sources—I am not referring specifically to this Minister or to any other Minister—about empty local authority properties.

It occurred to me that the best way to show that we are by no means inclined to excuse local authorities when we feel genuinely that they are doing something wrong is to demonstrate how much we care about the problem of empty properites and to propose a remedy. That is something the Government have never chosen to do. They have chosen instead to allow some of their spokesmen to repeat quite unnecessary and often inaccurate allegations about empty properties in local authorities as if somehow to solve the problem of empty properties would solve the housing problem and relieve the Government of their responsibility.

The truth of the matter is that the 1987 HIP returns for England only showed that local authorities had 2.5 per cent. of their stock vacant, housing associations had 2.7 per cent. of their stock vacant, other public sector housing had no less than 5.8 per cent. of its housing stock vacant—and that includes the Ministry of Defence, the police and other central government housing—and the private sector had 4.1 per cent. vacant. The allegations which are so frequently made are simply not justified by the facts. In so far as there is property held by local authorities which is unnecessarily empty I invite the Government to take positive steps to do something about it instead of putting about wild accusations and to accept this amendment.

The Earl of Caithness

Of course we all want to see the number of empty council houses and flats reduced, but in accusing us of being vapid I think the noble Lord uses perhaps the wrong adjective, or the wrong noun depending on how he used the word at the time.

The latest estimate, of 1st April 1988, shows that the total is down by about 9,000 on the previous year's figures. I am sure that all Members of the Committee would agree that it should be further reduced, but not in the way proposed in this amendment. Local housing authorities are statutorily responsible for managing their housing and I could not recommend this sort of direct intervention by the Secretary of State. It would allow no account to be taken of an authority's other plans for empty dwellings—for example sale or demolition—and would require the Secretary of State to pay a cost (of making property habitable) which should be borne by the authority.

I said "premature" just now because the Secretary of State has already promised (on 22nd June in another place) to put forward proposals for legislation in a later Session to make best use of local authority stock. His promise followed the undertaking given by the previous Minister for Housing (when the Bill was discussed in another place) to look very carefully at ways of reducing the number of empty council properties.

To assist in the preparation of any legislative proposals we need better information about empty stock. We are in discussion with the local authority association and hope to undertake a joint exercise with them across all sectors of public subsidised housing. Empty council housing must be returned into use but I am sure we all agree that that should be done in the right way and not by force in the way that is proposed in this amendment.

Lord McIntosh of Haringey

This amendment invited the Government to put up or shut up. They have refused to put up. I suggest that the Minister invite his less scrupulous friends to shut up. If he can come back from having attended the Conservative Party Conference in Brighton and assure me that nobody at that conference has repeated the slanders about empty properties under local authorities, I shall eat a copy (made on rice paper) of my amendment.

Lord Sanderson of Bowden

That is not a good enough offer!

Lord McIntosh of Haringey

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 124 and 125 agreed to.

11 p.m.

Clause 126 [Amendments and repeals]:

The Earl of Caithness moved Amendment No. 156E: Page 89, line 17, after ("Act") insert ("and the Housing (Scotland) Act 1988").

The noble Earl said: In moving Amendment No. 156E I should like at the same time to speak to Amendment No. 157C, which is a long and technical amendment but potentially very worth while. It concerns what we hope will never happen in the future. However, it is something that we must do now; namely, protect the position of the reserve forces who may be called up during wartime to serve their country. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 157: Page 89, line 23, leave out from ("to") to end of line 25 and insert ("any provision at the end of that Schedule and to any saving in Chapter V of Part I of or Schedule 14 to this Act").

The noble Earl said: In moving Amendment No. 157 I shall speak at the same time to Amendments Nos. 180A and 181. These are straightforward transitional provisions to protect the position of those who before commencement had entered into certain types of agreement which will no longer be possible when this Bill is enacted. I beg to move.

On Question, amendment agreed to.

Clause 126, as amended, agreed to.

Lord Sanderson of Bowden moved Amendment No. 157A: Before Schedule 14, insert the following new schedule: