§ 7.55 p.m.
§ Consideration of amendments on Report resumed on Clause 102.
§ The Deputy Speaker (Lord Murton of Lindisfarne)
My Lords, I suggest that Amendments Nos. 193, 193A, 194 and 194A be agreed to formally en bloc.
§ The Earl of Caithness moved Amendments Nos. 193, 193A, 194 and 194A:
§ Page 79, line 17, leave out from ("have") to ("above") in line 18 and insert ("given notice as mentioned in subsection (2)(b)")
§ Page 79, line 27, after ("acquired") insert ("disregarding any reduction by virtue of such a covenant as is referred to in subsection (1) above)")
§ Page 79, line 34, leave out ("(2)") and insert ("(2)(b)")
Page 79, line 43, at end insert—
("(7) Regulations prescribing any of the matters referred to in subsection (1) above shall also make provision with respect to the determination of the amounts which are to be payable on the occasion of prescribed disposals: and the amount of any reduction in the price payable for the property to be acquired which is attributable to such a covenant as is referred to in that subsection shall be determined by the district valuer.")
§ The noble Earl said: My Lords, with the leave of the House, I beg to move Amendments Nos. 193, 193A, 194 and 194A en bloc.
§ On Question, amendments agreed to.
§ [Amendment No. 195 not moved.]1689
§ Clause 103 [Duty to complete and consequences of completion]:
§ Lord Dean of Beswick moved Amendment No. 196:
Page 80, line 3, at end insert ("; and
(c) the applicant shall pay the landlord a proportion of the rent arrears owing by tenants who have been transferred, such proportion to he agreed between the landlord and applicant but shall not be less than 35 per cent.")
§ The noble Lord said: My Lords, the purpose of this amendment is to ensure that at least a proportion of arrears goes to the applicant. I pursued a similar amendment in Committee. I pointed out that as drafted the Bill presents an opportunity for tenants with arrears to opt out, leaving the local authority with a debt which realistically it will not be able to recover. Only a current landlord can use the effective sanction of the courts, so it is surely in the interests of good management practice to transfer the debt.
§ At that time the Minister failed to address the issue of how much a debt would be pursued by the local authority. I regret that once again he appeared to be quite unfairly critical of local authorities when he confirmed that this would be the case except when the arrears were due to mismanagement on the part of the existing landlord. I refer your Lordships to col. 672 of Hansard for 10th October 1988. I think this is a rather unnecessary and unfair further attack on local government. I pointed out during the exchanges at the Committee stage that I had recently seen a report showing that on a national basis there had been approximately a 10 per cent. increase in rent arrears in local authority housing since the Government introduced their new housing benefit regulations and the new system. I do not think any part of that can be ascribed to the local authorities being involved in mismanagement. It is about time that we had fewer attacks on local authorities. They have made mistakes but all the people involved in the housing field in general are very quick to make people aware that in the main local authorities have performed a tremendous service over many years. I am talking not only about my own party but about the local authorities which have been controlled by the Conservative Party and other parties. Where there have been council houses they have fulfilled a tremendous need. In most cases they are very well managed on behalf of the tenants. That is why I have made the point and I hope that the Minister will be able to give some comfort to us in his reply. I beg to move.
§ The Earl of Arran
My Lords, given what we said in Committee when moving the amendments which added subsection (4) to Clause 103, it will come as no surprise to your Lordships if we say that we must oppose Amendment No. 196. Subsection (4) provides that rent arrears built up under the management of existing landlords shall remain debts owed to that landlord for it to recover in the usual way for civil debt. It does not let the tenant off the hook; he is still liable to pay that debt. The subsection, we readily concede, removes from that landlord's armoury of weapons for debt recovery the threat of eviction. But where a landlord has convinced a court before the relevant date that possession is the only answer, that tenant is excluded from tenants' choice.
1690 On the other hand, where the tenant is able to transfer and so bring subsection (4) into play, it must be clear that the threat of eviction was not exactly a substantial one. Either the landlord did not wish to go down that road or the courts were prepared to allow the tenant time to pay.
Under all the circumstances, we consider that it is right for the landlord to be left with the debts it is owed. Amendment No. 196 will cut across that. In addition, it also produces an obvious unfairness. While requiring the applicant to pay a proportion of the arrears to the former landlord, it leaves the right to recover the arrears with that landlord alone. I hope that the noble Lord, Lord Dean of Beswick, will understand the points I am making and in those circumstances agree to withdraw this amendment.
§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for what he has said. I have some sympathy with his point of view. Unfortunately it will not work out as he thinks it will. If the local authority is left with the debt, it has three ways of raising or obtaining the money. One is by grant from the Government in the rate support grant, which it will not get. The only two remaining possibilities are to load it on to the authority's own rates, which will shortly, I understand, be made illegal. Once again we fall back on the existing council house tenant, who will have to meet the debt. The Minister talked of local authorities going to court and evicting tenants. Local authorities are very reluctant to do that, as they are only loading themselves with another problem of creating homeless tenants. I do not say this with my tongue in my cheek, but the overwhelming number of families who hold debts in local authority housing will never meet them. A large percentage of the debt is I believe irrecoverable. I do not know how it would be possible to create a system to collect the money.
But nevertheless, when the Bill becomes an Act and the various clauses start to function, some of the worst fears on this side of the House will be realised. I foresee a time in the not too distant future when the Government will have to come back with legislation to try to correct some of the mistakes that are being made now. However, on that basis, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 104 [Consent required for subsequent disposals]:
§ 8 p.m.
§ The Earl of Caithness moved Amendment No. 197:
§ Page 80, line 25, after ("Part") insert ("(in this section referred to as "the new landlord")").
§ The noble Earl said: My Lords, I beg to move Amendment No. 197 and with the permission of your Lordships speak to Amendments Nos. 198 and 202. These amendments are designed to make the safeguards provided by Clause 104 more effective. Clause 104, which requires my right honourable friend's consent to disposals of property by a person who has acquired it under tenants' choice, is there to look after both the public's and the tenant's interests. In the public interest it provides a means of giving 1691 extra teeth to the tenants' guarantee requirement on landlords to keep transferred property available for letting. In the tenants' interest, it means that a firm measure of control is available over any proposals to dispose of their homes after transfer to a new owner under Part IV.
§ It may help to explain how these improvements work. The proposed new subsection (4A) deals with "exempt disposals". All of the "disposals", in inverted commas, listed are disposals in a technical and legal sense, and so would, as the Bill stands, have required consent. But they are all transactions—grants of leases-back under Clause 99 right-to-buy sales, mortgages, grants of assured tenancies and so forth—which do not need to be controlled in either the public or the tenants' interest. Any later disposal where those interests are involved, and particularly freehold or long leasehold disposals of tenanted or untenanted transferred property, remain subject to strict control. The result of subsection (4A) is simply less bureaucracy.
§ The proposed new subsections (1A) and (1B) deal with another kind of circumstances, again in a way which is in the interests both of the public and the transferred tenants. Subsection (1A) deals with those cases where a person who is not the applicant is able to dispose of the property, although it does not belong to that person. The cases are those of the mortgagee who may exercise his power of sale and the person who has a charge over the property giving a similar power. Such a mortgagee or chargee will need the Secretary of State's consent to disposal. Subsection (1B) covers cases where the property passes to a person who is not the new landlord without the volition of the new landlord. It will cover, for example, the passing of property to a trustee in bankruptcy. The effect of subsection (1B) is that, if I can put it in layman's terms, a real non-exempt disposal by such a person is subject to control in just the same way as a similar disposal by the new landlord would have been.
§ These amendments build on and strengthen existing safeguards and I hope will be welcome on that basis. We have already discussed government amendments to Part III to make subsequent disposals by a post-HAT landlord subject to control similar to that provided by Clause 104 as we propose to amend it; and we shall debate tomorrow analogous proposals in the context of tenanted property which has been disposed of voluntarily by local housing authorities.
§ On Question, amendment agreed to.
§ The Earl of Caithness moved Amendment No. 198:
§ Page 80, line 27, leave out from ("to") to end of line 28 and insert ("an exempt disposal, as defined in subsection (4A) below.
- (1A) Where an estate or interest in property acquired by the new landlord has been mortgaged or charged, the prohibition in subsection (1) above on disposal of the property without consent applies also to a disposal by the mortgagee or chargee in exercise of a power of sale or leasing, whether or not the disposal is in the name of the new landlord.
- (1B) In any case where—
- (a) by operation of law or by virtue of an order of a court property which has been acquired by the new landlord passes or is transferred to another person, and
- (b) that passing or transfer does not constitute a disposal for which consent is required under subsection (1) above,
§ On Question, amendment agreed to.
§ [Amendments Nos. 199 to 201 not moved.]
§ The Earl of Caithness moved Amendment No. 202
Page 80, line 39, at end insert—
("(4A) In this section an "exempt disposal" means—
§ On Question, amendment agreed to.
§ Lord McIntosh of Haringey moved Amendment No. 202A:
After Clause 104, insert the following new clause:
("Tenants' choice—Co-operative disposals: Scotland.
After subsection (4)(c) of section 53 of the Housing (Scotland) Act 1988, there shall be inserted—
(d) which is subject to an approved co-operative management agreement unless the right is being exercised in respect of all the houses subject to the agreement and in which the public sector landlord is the heritable proprietor.
(5) For the purposes of subsection (4)(d) above, an approved co-operative management agreement is an agreement which is made with the approval of the Secretary of State under section 22 of the Housing (Scotland) Act 1987." ").
§ The noble Lord said: My Lords, it is with considerable trepidation that I rise to move this amendment on behalf of my noble friend Lord Carmichael of Kelvingrove. Housing is bad enough, but housing north of the Border is even worse. At least my family came from Jedburgh, which is only 11 miles from the English Border at Carter Bar. Therefore, we had an escape hole if things got difficult. I fear that I have no such escape hole here.
§ As I understand it, this amendment is about the exercise of tenants' choice—again, I think that the phrase "tenants' choice" should be put in quotes here, as it should throughout this Bill—as it applies to co-operative disposals in Scotland. As I understand the issue, what is being proposed is that where under Scottish tenure there are a number of different tenants who share a dwelling in which they have their own rights—my noble friend has described this as being as many factors as there are tenants—they should all have to agree before a disposal is acceptable. My noble friend feels that that is in accordance with what should happen in such areas of Scotland as Glasgow, where this is a very common form of tenure. He hopes, and I hope, that it will commend itself to the Government.1693
§ The Minister of State, Scottish Office (Lord Sanderson of Bowden)
My Lords, I welcome the noble Lord, Lord McIntosh of Haringey, to matters concerning our affairs north of the Border. I too live near Jedburgh, 11 miles away from the Border, so I know what he is talking about. The difference between Jedburgh and Haringey is very obvious.
I listened carefully to what the noble Lord said. I am afraid that I shall have to disappoint him. However, I shall explain very carefully the reasons why. The new clause seeks to introduce into the Scottish tenants' choice provisions (in Part III of the Housing (Scotland) Bill which we considered in this House before the Recess) the concept of block transfer where a house or flat involved in a transfer is under the management of a tenant co-operative. However, the tenants' choice provisions in Scotland are framed on an individual tenant basis.
The remarks made by my noble friend Lord Caithness apply (as the noble Lord noted) in relation to the proposals in Part IV of this Bill, which deals only with England and Wales, under which a whole building, for example containing flats must—not "could" as has been suggested—be acquired. The need to acquire the whole building in this way reflects English land tenure arrangements, and the system of ballots which this Bill introduces in England and Wales takes account of this fact. In Scotland, however, individual flats are transferred on an outright purchase basis, not on leasehold, and as a result our system is simple and we think straightforward. Each tenant has the option of exercising tenants' choice individually, and no votes or ballots are required. We do not believe in the Scottish circumstances, therefore, that there is any need for tenants of houses managed by a management co-operative to have to decide the future ownership of their houses collectively in the way this amendment suggests.
That is not to say that we do not recognise the value of tenant management co-operatives. Nothing could be further from the truth. The Government firmly believe that tenant management and ownership co-operatives can make a significant contribution to the diversification of housing tenure and choice. Indeed, the progression from being the tenant of a local authority direct, to participating in a tenant management co-operative and then in a tenant ownership co-operative is one which we have seen already in Glasgow. As the noble Lord mentioned Glasgow, I should like to emphasise that. It may well be repeated elsewhere. But as regards 1694 Scotland, to introduce a provision into the tenants' choice legislation requiring block transfers to take place, even in limited circumstances, would run quite contrary to the general policy of individual transfers.
In conclusion, I would say that we debated Part III of the Housing (Scotland) Bill at quite great length earlier on in this Session. I believe that this issue was thoroughly aired at that time. I am afraid that I have to resist the amendment.
§ Lord McIntosh of Haringey
My Lords, I am sure that my noble friend will read the Minister's words with great attention. If he feels it necessary to come back at a later stage he will exercise his rights within the rules of debate and within the rules of order of the House. In the meantime I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 113 [Interpretation of Part IV]:
§ The Earl of Arran moved Amendment No. 203:
Page 84, leave out lines 6 and 7, and insert—
(""qualifying tenant" shall be construed in accordance with subsections (3) and (4) of section 92 above:").
§ The noble Earl said: My Lords, Amendment No. 203 is consequential on our amendments in Committee to Clause 92. Those amendments extended the definition of "qualifying tenant" in that clause, and Amendment No. 203 now similarly amends that definition in Clause 113.
§ I ask your Lordships to accept this simple amendment. I beg to move.
§ On Question, amendment agreed to.
§ Moved accordingly, and, on Question, Motion agreed to.