Housing Bill

HL Deb 26 October 1988 vol 500 cc1614-83

3.12 p.m.

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

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

Moved, That the Bill be further considered on Report.—( The Earl of Caithness.)

On Question, Motion agreed to.

Clause 92 [Right conferred by Part IV]:

Lord McIntosh of Haringey moved Amendment No. 169A:

Page 70, line 32, at end insert— ("where at least 50 per cent. of those responding to the consultation mentioned in section 101 below have given notice of their wish to transfer to the applicant").

The noble Lord said: My Lords, in moving Amendment No. 169A I should like also to speak to Amendment No. 191. I shall do this at my usual deliberate pace at the beginning of proceedings in order to allow noble Lords on all sides of the House to make an orderly retreat. I rather suspect that if we have any more weeks like this one we shall reduce the audience for the "Parliament Programme" to single figures. We are certainly moving very fast in that direction.

The amendments to which I am speaking now strike right at the heart of the main subject of controversy in Part IV of the Bill, which is concerned with what the Government laughably call tenants' choice. We argued at Second Reading and in Committee that the proposals which the Government make for the transfer of secure tenants from public sector landlords to alternative landlords who may apply to take over their properties are grossly undemocratic. The whole structure of the Bill confirms this.

What the Government in political speeches call tenants' choice turns out, when we go to Part IV of the Bill and to Clause 92, which is the key clause in Part IV, not to be a charter for tenants to have a choice of landlord but a charter for applicants to seek to take over secure tenants in public sector accommodation. There are many bad proposals, but the worst single proposal about this procedure, which is predicated entirely on the rights of applicants rather than the rights of tenants, is the voting procedure. As the Bill passed through your Lordships' House at Committee stage, under this procedure in order for an application not to go ahead 50 per cent. of the tenants concerned with the application had positively to vote against that application.

I must repeat the argument that has been made before but I shall attempt to do so briefly. The proposal means in effect that any tenant who is not able to vote, for any reason whatsoever, whether through being absent, being elderly. not understanding the English language clearly enough or being unavailable for any cause, is counted as voting in favour of the application. That is the fundamental defect of the Government's proposal and it is the way in which the Bill reaches your Lordships' House again on Report after the Committee stage.

There are several government amendments and one in particular makes a minor change to that proposal. But it still leaves the situation that nonvoters are counted as supporting the application. It still leaves that basic denial of democracy unchanged. At Committee stage we moved that a majority of those eligible to vote should be required for an application to go ahead. We argued that the change was so significant, so far-reaching for the tenants in the estates concerned, that every safeguard possible must be provided to make sure that the tenants could not be transferred unwittingly as well as unwillingly. The Committee of your Lordships' House rejected that amendment. We are not putting it forward again. We are putting forward a more modest proposal, which is that 50 per cent. of those actually voting should have to approve the transfer in order for it to take place.

I find it difficult to understand what other definition of democracy there could be than that a majority of those taking part in any voting procedure, whether it is an election for Parliament or for any other purpose, should have to support a change or oppose a change for it to take place or not to take place. Yet the Government have departed in this instance from that principle and are proposing a form of balloting. In this procedure—whatever the minimum turnout figure which is finally agreed by your Lordships' House today there could still be a majority of those voting against a change, and yet the change would take place on the votes of a minority of those voting. That cannot be democratic and it cannot be acceptable.

In this amendment we propose to ignore the votes of those who do not take part in the ballot. That is what happens in all elections. It is not ideal from our point of view because we feel that those who do not take part ought at least to have some safeguard, because many of them are not taking part for very good reasons. Nevertheless, we have come to this compromise which we believe ought to be acceptable to your Lordships' House. I cannot see any defence on democratic grounds for an alternative to this procedure.

I wish to refer to one particular point which was of great concern to the noble Lord, Lord Campbell of Alloway, when we discussed the matter in Committee. He expressed his concern about the voting procedures but felt that his concerns could be mitigated at any rate—and I do not want to put words into his mouth—provided there was an absolutely secure provision that those who had voted against a transfer of estates to an applicant would have the opportunity individually not to transfer.

Lord Campbell of Alloway

My Lords, will the noble Lord give way? It was not "mitigated" but "resolved".

Lord McIntosh of Haringey

My Lords, I am grateful for the elucidation. I was not sure what the noble Lord's final position was and I am glad to have given him an opportunity to express it. I think he would be satisfied with the provision in the Bill which was agreed at Committee stage that the Secretary of State shall make orders so as to secure what he wants. That has satisfied the noble Lord, Lord Campbell of Alloway, but I must say that it does not satisfy us. It was a valuable concession in itself, but I thought that I should refer to this issue because of the objections that we still have to it.

The point that I wish to make is that although we agree that those not voting should not be counted either way in the decision as to whether the estate should transfer, they should still have an opportunity of opting out of the procedure. As the Bill is framed, even after the amendments in Committee, that will not be the case.

I hope that if the noble Lord, Lord Campbell of Alloway, thinks about this again he will consider that the concession that has been made should be extended in that way. But the fundamental point still remains. It cannot be democratic for a majority of those voting to oppose a move and for that move to be forced on that majority by the votes of a minority and the abstentions of others. Whatever the minimum turnout figure, that is a denial of any definition that we can possibly accept of democratic electoral procedures. I hope that the House will consider that this is a realistic alternative to what we put forward in Committee and that it will receive the support of your Lordships' House. I beg to move.

The Earl of Caithness

My Lords, I must say right at the beginning that I fundamentally disagree with the portrayal by the noble Lord, Lord McIntosh, of the present voting system. Rather discourteously in my view, he referred to the major concession offered by the Government in Amendment No. 190—we shall come to that in a minute—as a minor change. It is far from being a minor change. It was as a result of listening to and hearing what the noble Lord had to say that I discussed this matter with my right honourable friend the Secretary of State and put forward this amendment.

Lord McIntosh of Haringey

My Lords, I am sorry that the noble Earl should feel it necessary to accuse me of discourtesy. I was referring to policies, not to individuals who put them forward.

The Earl of Caithness

My Lords, the policy is a major change, not a minor change, as I am sure the noble Lord will admit. Amendment No. 191, which is grouped with Amendment No. 169A, and Amendment No. 181, which we shall be debating separately later although I shall have to touch on it in my reply, would reverse the operation of Clauses 102 and 99, which are the means by which the Bill ensures that qualifying tenants who want to stay with their existing landlords are able to do so.

At present the applicant may but is not obliged to proceed unless a majority of those eligible to be consulted decide to stay with their landlords and no-voters have their homes excluded or leased-back. Amendment No. 191 would require a majority of those voting to vote in favour if an applicant was to be able to proceed and Amendment No. 181, which we will argue later, for automatic lease-back or exclusion of any property whose tenant did not vote positively in favour of transfer.

I have explained repeatedly why the structure of the voting arrangements in Clause 102 and the arrangements in Clause 99 for the exclusion of leaseback of no-voters' homes are as they are. The whole point of tenants' choice is to give a new opportunity to as many tenants as possible in the public sector who may want to go on renting their present house or flat but for one reason or another want a change of landlord.

Sometimes they may feel that the existing landlord is not doing his job properly. Though many local authorities are good landlords, all of us who know anything about the public sector stock know of all too many cases where there is valid cause for tenants to be concerned. Some tenants may be suffering from poor conditions arising from cumulative disrepair and lack of maintenance in the past. Some may simply want better current maintenance or a more effective and faster response to maintenance needs as they arise. Some, whether or not they have problems of this kind, will I hope be excited enough by the opportunities on offer to want to set up in the landlord business themselves by forming a cooperative or a community based housing association with their neighbours; and whether or not individual tenants transfer, competition will be good both for them and for their landlords, promoting better services, more efficient operations and better value for tenants. Surely that is something on which all noble Lords can agree.

There is nothing to stop tenants from looking for a new landlord now. But if they find one they can only go to him if their existing landlord is content to help them. This Bill gives the tenants and responsible new landlords together the power to make tenants' wishes for change stick. That is why it is conceived as a genuine tenants' choice, in effect, a new tenant's right—far from what the noble Lord, Lord McIntosh of Haringey, portrayed it as.

To make this new right a reality we are proposing to equip the Housing Corporation with the powers and resources it needs not only to run a rigorous system of approval to ensure that we get the right landlords but also to give a service of advice, information and assistance to tenants. We can and should ensure that tenants get in a readily understandable form all the information they need to make an informed choice.

But all of this is of little use if we allow indifference, or even apathy, on the part of some tenants to stand in the way of change for those who want and need it. This is why we have provided in the Bill broadly to follow the existing arrangements which apply to disposals of tenanted property by local authorities and provide that the transaction may go ahead if a majority either votes positively to transfer to the new landlord or acquiesces, on an informed basis, by abstaining.

Amendments Nos. 181 and 191 together would leave both the genuinely indifferent and the apathetic in addition to the no-voters as tenants of the existing landlord. By maximising the number of exclusions and minimising the number of the new landlord's own tenants in blocks of flats which transferred, they would to all practical purposes equate abstention with a no-vote by individual tenants and allow indifference and apathy to load the scale against much needed change.

I would remind your Lordships that we have built into the Bill the safeguard of allowing individual qualifying tenants the right to opt to stay tenants of their existing landlord, so that no secure tenant need transfer under tenants' choice against his or her will. That is what is so crucial about our voting procedures. It is very different from the straight proposal that the noble Lord, Lord McIntosh, sought to portray to your Lordships. If there is the choice, a tenant can say that he does not want to transfer to a new landlord. In that case, if he has a house, that house will be excluded. If he is in a block of flats, his flat, if the applicant is successful, will be leased back to the local authority so that that tenant has the local authority as his landlord. That is the important safeguard for the tenant.

Lord Campbell of Alloway

My Lords, while I totally support the attitude of the Government on this, let us not be unmindful of the debt we owe to the Opposition. It was the amendment of the noble Lord, Lord McIntosh—which was the crucial amendment that I supported—which ensured that in no circumstances should the situation arise that a secure tenant should be forced against his will to do anything which he did not wish to do. Although that was part of the concept of the Government, it was not enshrined in the Bill. Although I support the Government on this, I think a debt of acknowledgement should be paid to the Opposition.

Lord Ross of Newport

My Lords, I think we are making an awful complication of something which should be quite simple. That is why I support the amendment from the Opposition Front Bench. Why can it not be the case that if a simple majority of 50 per cent. vote in favour, the deed goes through? I am sure vast numbers of tenants will not wish to transfer to a private landlord, and I cannot see vast numbers of private landlords queueing up to take over the housing estates in the first place. There is so much opposition building up towards some of the new housing associations and the rents that people will be facing that I think the vast majority of' tenants will wish to stay under their local authority landlords.

But, if there are some tenants who desperately wish to transfer to a new landlord, as the Minister has described, when a large number of the other tenants do not wish to transfer, is it true that they have to vote positively against the transfer to stay under their local authority landlord? I hope that the Minister will nod and say that that is correct. They must vote, must they not? If 48 per cent. vote in favour of the change, 2 per cent. vote against and 50 per cent. do not vote, they go over to the new landlord. Am I not right? Why do we have to have this complication? Why can we not just have a simple majority?

3.30 p.m.

Lord Harmar-Nicholls

My Lords, are we not manoeuvring around the procedures which I thought we had agreed? I thought that at Report stage, having had the opportunity to intervene at Committee stage, for common sense and sound reasons once the Minister had replied there would be no further speakers other than those who had proposed the amendment. I know that there is a saving sentence in the procedures which say that if the Minister speaks early it may be possible for others to step in afterwards to ask for an explanation. However we are manoeuvring around that. Contributions are now being made which require a further contribution from the Minister. That is manoeuvring around a sensible procedure that we have agreed upon.

If noble Lords had additional points, they should have made them before the Minister stood up. I believe that we ought to try to keep to our procedures and not to manoeuvre round them in a clever-dick fashion as seems to be happening now.

Lord Stoddart of Swindon

My Lords, I take it that it is in order for noble Lords to make a contribution to this debate in spite of the fact that the Minister of State has made his contribution. I understand that, with the leave of the House, he can make a further contribution. I am not at all sure that he needs the leave of the House. Arising from what he said there are some comments which some of us would like to make.

This has been said before and will be said again, but I have to point out to the Minister that many of us on this side of the House are surprised that the Government—a democratic government—should come forward with an electoral practice of this kind. It is more akin to the actions of some Stalinist clique than of a responsible government. One would not expect Mrs. Thatcher, if she knew what was going on, to agree to such an electoral system.

I understand what the noble Lord said. He said that people who abstain should not be able to nullify the desire of other people to change their landlord. At the same time the reverse must surely apply. Those abstaining should not be able to decide whether an application is successful or not.

The noble Lord believes and wants the House to believe that because individuals have a choice as to whether or not they transfer to a new landlord that is all right and the freedom of the individual is protected. I understand his argument. But I hope that he will accept that some of us believe that it is a faulty argument. It is a faulty argument because the whole status of an estate or block of flats is altered. In the view of many it will be altered to the detriment of the tenants, not only those who have transferred but those tenants who have not transferred.

I shall give an example so that the noble Lord can understand exactly what I am getting at. If only a minority of tenants of a block of flats have agreed to go over to a new landlord but the non-votes of others mean that they must transfer, one could find that the block of flats becomes perhaps one-third occupied by private tenants and two-thirds occupied by local authority tenants. That would create difficulties for the local authority in many ways and in particular in relation to rent collection and repairs. Therefore the status of that block of flats or estate of houses would be affected. That is why it is important that we should ensure that a clear majority vote in favour of a proposition.

Before I sit down I urge the noble Lord even at this late stage to think of what he and the Government are about. The point was put forward—perhaps I said it myself—when questions were raised on the subject: suppose we applied this principle to trade unions in a strike ballot. The noble Lord protests: methinks he protests too much. It is a relevant point and I can assure the House that it will be taken into account by a future Labour Government.

If we were to adopt this principle and in a strike ballot non-voters were added to those who voted in favour of a strike, the Government and the trade union movement would be on a serious course. I urge the Minister to think about that, because I feel quite sure that noble Lords on the other side of the House would protest very loudly indeed if that principle were applied in the case of strike ballots.

Those are my last words to the Minister of State. But I can assure him that in due time, after the next election when a Labour Government are elected, we shall take these moves fully into account in legislation that we may bring forward.

The Lord Privy Seal (Lord Beistead)

My Lords, I should like to say a brief word. I think that my noble friend Lord Harmar-Nicholls was quite right to draw attention to procedure in the sense that we have a very long Marshalled List today. At the same time I do not believe that my noble friend was quite correct in his interpretation of what is contained in the Companion to the Standing Orders. I think that we are in order today. My noble friend the Minister of State spoke immediately after the noble Lord, Lord McIntosh. It is interesting that the Companion talks about a Minister wishing to speak early to assist the House but in fact your Lordships remained silent and so my noble friend more or less had to get to his feet. My noble friend Lord Harmar-Nicholls is right that that will almost certainly mean that the government spokesman will be required by leave to make a second speech. I do not believe that that is desirable. Nonetheless we are in order.

Perhaps I may remind your Lordships, as a valedictory word, that the House agreed in 1977 that arguments fully deployed in Committee of the whole House should not be repeated at length on Report.

Lord Hylton

My Lords, I am at a disadvantage because I was unavoidably prevented from taking part in the Committee stage on this section of the Bill. I am concerned about effective housing management. It appears that the Government are prepared to see the fragmentation of housing estates. That may be acceptable where a housing estate is composed entirely of houses. I cannot believe that it is acceptable in a housing estate comprised mainly of flats or maisonettes.

We all know perfectly well that there have been numerous problems in many places of repairs being carried out three or four years late or not carried out at all. There is a great backlog to be overcome. There are cases of whole blocks needing substantial repair and modernisation. How is that to be carried out effectively if some tenants belong to one authority and some to another landlord?

Lord Campbell of Alloway

My Lords, I am very much obliged to the noble Lord. Surely that is a Second Reading speech. The noble Lord the Leader of the House is present. Although it was perfectly correct for matters to be canvassed as they have been, and indeed I support that, is this not beyond the bounds of what is permitted?

Lord Belstead

My Lords, perhaps if I may say so we ought just to see how the noble Lord, Lord Hylton, goes. However, I beg the noble Lord to remember the words which I read out from the Companion. Whether or not the noble Lord was in the House on a previous occasion, the House agreed that arguments which had previously been gone through should not be gone through at length on Report.

Lord Hylton

My Lords, I undertake to conclude my remarks very briefly. I should like to ask the Government what advice they have received on this point of housing management, from whom they received it and how they propose to deal with it.

Lord Coleraine

My Lords, I should like to refer breifly to the arguments put forward by the noble Lords, Lord Stoddart and Lord Hylton. They are behind the times by a long way. The right-to-buy legislation already gives tenants the right to purchase the leases of flats. Already, it is perfectly possible for a situation to arise in which a block of flats may be occupied by any number of tenants with a rump of tenants still subject to the local authority. To say that a body of tenants should not be entitled to opt for a new landlord does not make sense under the present state of the law.

Lord Donaldson of Kingsbridge

My Lords, I should like to put one question for clarification before the issue is put to the vote because I am not clear exactly on what issue we are voting. If, owing to abstentions, a minority group decide to accept the change, is it or is it not true that anybody who has abstained—that is, unless he voted—is not able to refuse to change his landlord? If that is true then it is perfectly clear that I shall vote against the Motion.

Noble Lords

That is right.

Lord Stallard

My Lords, I support the amendments. I shall not weary the House by repeating the arguments that I put at Committee and a previous stage. However, there is one question that I should like to ask and I should be grateful for a reply from the Minister. He mentioned that a tenant can opt as an individual to stay in the council block when it has been taken over. As I understand it that flat will be leased back by the council and leased to the tenant.

Can the Minister take the reply a stage further? What will happen to the maintenance and service charges imposed on that tenant under the new regime that will exist when the new landlord takes over? Those of us who have a little experience of such matters know that for a whole number of obvious reasons there will inevitably be a big increase in maintenance and service charges.

Lord Murray of Epping Forest

My Lords, my noble friend Lord Stoddart referred to the possibility that an analogy might be drawn between this provision and some possible future amendment to industrial relations law to take into account those trade unionists who do not vote in a strike ballot. With great respect to this House I say to my noble friend that I should be as passionately opposed to such a proposal by a Labour Government as I am to the present proposal.

This is not a matter of the rights of trade unionists or tenants. This provision erodes some very basic principles of democracy which are commonly understood by the people as matters which are either right or wrong. I believe that this proposal is profoundly wrong and can only harm the structure of our society.

3.45 p.m.

Lord McIntosh of Haringey

My Lords, the noble Lord the Leader of the House suggested that the Minister might feel it necessary to reply to the debate which took place after his first intervention. Let me assure him that if he wishes to do so he is at perfect liberty to interrupt me.

The debate has quite reasonably and properly extended into the practicalities of the transfer of properties from public sector landlords to private sector applicants. I believe that that is a quite proper extension. As the noble Lord, Lord Hylton, said, there are implications for successful housing management concerning whether or not the tenants are wholeheartedly in favour of the change. Clearly, housing management will be very much easier if it takes place in an atmosphere of consent with at least the majority of the tenants who are to be transferred having expressed a positive wish to be moved.

That is not just my view or that of the noble Lord, Lord Hylton. It is the view of all those who, as managers of large numbers of estates which are other than in the public sector, have expressed an opinion. In particular it is the view of the National Federation of Housing Associations and the largest housing associations such as the North British Housing Association. They have all expressed the view, as have individual officers of the Housing Corporation, that the transfer of estates under this part of the Bill will simply not work unless the tenants want it to work and have done so from the beginning.

That is a practical consideration; it is not a repetition of anything that has been said to my knowledge very clearly at Committee. However, it needs to be said in the context of the background to the issue that we are debating in these amendments.

I must repeat that the issue is one of almost childlike simplicity. Is it right for those who abstain or who are unable to vote to be conscripted into the "Yes" lobby? Whether it be 1 per cent., 10 per cent. or 50 per cent. of people who are unable or unwilling to vote in the elections, can it be right for them to be conscripted into the "Yes" lobby, changing not only their own position but also that of everybody else?

That is not the democratic system in this country, whether in Parliament or in the trade unions. I am grateful for the words of my noble friend Lord Murray on that point. I repeat that there is not one democratic institution in this country which operates or could operate on the basis that a minority can take precedence over the views of the majority of those voting. It is on that simple issue that the House must make a decision. I am delighted to give way to the noble Earl.

The Earl of Caithness

My Lords, I am grateful to the noble Lord for allowing me to come back to answer some of the points that have been made. Perhaps it would have been easier if your Lordships had spoken before I rose the first time.

Lord Boyd-Carpenter

Hear, hear!

The Earl of Caithness

My Lords, my noble friend Lord Coleraine answered very satisfactorily the question posed by the noble Lord, Lord Hylton. I am able to inform my noble friend of the success of the right-to-buy policy. As a result of that policy, so heavily criticised by the Opposition parties, one million people have now had the opportunity which otherwise they would not have had, to buy their own homes. Moreover, two-thirds of those people never thought that they would be given the opportunity. That is a success story; as indeed tenants' choice will be a success story.

We have not touched upon the matter of the voting procedure. As the noble Lord, Lord Hylton, was not present in Committee I should like to explain that procedure once more very briefly. It is not a vote on one day. It is a vote over a period of time. It gives the opportunity for those who have not voted to have the case presented to them and to be reminded that a vote is going on. So there could be no question of any tenant involved under this procedure not having the full information available to him. That was a point hotly contested by the noble Lord, Lord Stallard. I remember debating with him at length: there was a fair degree of misunderstanding at that stage. However, we have specifically designed the voting procedure to take place over a period of about three weeks. Every tenant will have the chance to realise that a ballot is taking place and to find out where to vote and how to vote. Both sides will be able to present their case.

The noble Lord, Lord Stallard, raised the question of repairs, rent collection, and so on. I do not see that there is a problem for local authorities if they have lease-back tenants in the circumstances described. The local authorities will be able to collect rents in the same way as they do from their tenants at the moment. That will be part of a tenancy agreement. They will be able to do their own repairs to the interior of lease-back flats. And lease-back—its terms will be provided by regulation—will enable local authorities to look to the new freeholder for the structural repairs.

The noble Lord, Lord Stoddart of Swindon, raised the question of union ballots. With respect, the point that the noble Lord made was not a fair one. With a union ballot there can be only one outcome. With tenants' choice every voter individually can have the particular result he wants—either the applicant or the local authority.

Lord Stoddart of Swindon

My Lords, will the noble Lord allow me to intervene? Perhaps he is not up to date with the most recent legislation passed by his own Government. It protects workers who wish to go to work in spite of a strike ballot in favour of a strike.

The Earl of Caithness

My Lords, I am fully aware of that, and I thoroughly support it. However, the point that the noble Lord refuses to acknowledge is that each tenant will have the opportunity to stay with the local authority if that is what the tenant wants. That answers the point of the noble Lord, Lord Donaldson of Kingsbridge. The question that he posed contains a paradox. If the tenant is opposed to change he will use his opportunity to cast his informed vote to make sure that he stays where he wants to stay. He will not be an abstainer in the first place if he feels strongly about it. No secure tenant who does not wish to do so should need to transfer against his or her will. Therefore what the noble Lords opposite are trying to do is to deny the opportunity to the tenants who wish to change that position.

Lord Pitt of Hampstead

My Lords, perhaps I may put this point to the noble Earl before he sits down. Let us suppose that a tenant is a Jehovah's Witness. Jehovah's Witnesses do not vote.

Lord McIntosh of Haringey

My Lords, in his reply the Minister has sought to reassure the House on the basis that the voting procedure will be exhaustive and over a period of time, and that all efforts will be made to secure a high turnout. I shall believe that when I see the Government's response to the amendments we have put down which are for debate later this afternoon. Those amendments seeks to secure, for example, that information about the transfer should be made available in the ethnic minority languages. There are many other examples where we are seeking what the Government claim they wish; namely a high and well-informed ballot.

None of these arguments makes any dent on the basic case which we are putting forward. However high and well-informed the ballot may be, it is still wrong that a minority should overrule a majority. It is not simply a matter of individual tenants and where they live; it is a matter of the transfer of blocks of housing, blocks of estates, neighbourhoods, and tenants and their neighbours. They do not live in isolation. They have a right to vote not only about what they should do but about what should happen to the community in which they live. Unless a majority of those voting has a right to make a decision, democracy is being denied.

3.53 p.m.

On Question, Whether the said amendment (No. 169A) shall be agreed to?

Their Lordships divided: Contents, 113; Not-Contents, 128.

DIVISION NO.1
CONTENTS
Addington, L.	Lawrence, L.
Airedale, L.	Leatherland, L.
Amherst, E.	Liverpool, Bp.
Ardwick, L.	Lloyd of Hampstead, L.
Attlee, E.	Lockwood, B.
Aylestone, L.	Longford, E.
Banks, L.	McIntosh of Haringey, L.
Blackstone, B.	Mackie of Benshie, L.
Blanch, L.	Mar, C.
Bledisloe, V.	Mason of Barnsley, L.
Boston of Faversham, L.	Milverton, L.
Bottomley, L.	Mulley, L.
Bruce of Donington, L.	Murray of Epping Forest, L.
Buckmaster, V.	Nicol, B. [Teller.]
Callaghan of Cardiff, L.	Northfield, L.
Carmichael of Kelvingrove, L.	Oram, L.
Carter, L.	Peston, L.
Cledwyn of Penrhos, L.	Pitt of Hampstead, L.
Cocks of Hartcliffe, L.	Ponsonby of Shulbrede, L. [Teller.]
Darcy (de Knayth), B.
David, B.	Porritt, L.
Davies of Penrhys, L.	Prys-Davies, L.
Dean of Beswick, L.	Radnor, E.
Diamond, L.	Raglan, L.
Donaldson of Kingsbridge, L.	Reilly, L.
Dormand of Easington, L.	Ritchie of Dundee, L.
Ennals, L.	Robson of Kiddington, B.
Ezra, L.	Ross of Newport, L.
Fisher of Rednal, B.	Sainsbury, L.
Foot, L.	Seear, B.
Gallacher, L.	Seebohm, L.
Galpern, L.	Serota, B.
Glenamara, L.	Shannon, E.
Graham of Edmonton, L.	Shaughnessy, L.
Gregson, L.	Shepherd, L.
Grey, E.	Simon of Glaisdale, L.
Grimond, L.	Southwark, Bp.
Hanworth, V.	Stallard, L.
Harris of Greenwich, L.	Stedman, B.
Hatch of Lusby, L.	Stewart of Fulham, L.
Hayter, L.	Stoddart of Swindon, L.
Henderson of Brompton, L.	Strabolgi, L.
Hughes, L.	Taylor of Blackburn, L.
Hunt, L.	Taylor of Gryfe, L.
Hunter of Newington, L.	Tordoff, L.
Hylton, L.	Turner of Camden, B.
Hylton-Foster, B.	Underhill, L.
Ilchester, E.	Vernon, L.
Jacques, L.	Wallace of Coslany, L.
Jeger, B.	Walston, L.
Jenkins of Putney, L.	Wedderburn of Charlton, L.
John-Mackie, L.	Whaddon, L.
Kagan, L.	Wigoder, L.
Kennet, L.	Williams of Elvel, L.
Kilbracken, L.	Winchilsea and Nottingham, E.
Kings Norton, L.
Kinloss, Ly.	Winstanley, L.
Kirkhill, L.

NOT-CONTENTS
Abercorn, D.	Kaberry of Adel, L.
Ailesbury, M.	Kinnaird, L.
Alexander of Tunis, E.	Lauderdale, E.
Alexander of Weedon, L.	Long, V.
Ampthill, L.	Lovat, L.
Arran, E.	Luke, L.
Ashbourne, L.	McFadzean, L.
Auckland, L.	Mackay of Clashfern, L.
Balfour, E.	Malmesbury, E.
Barber, L.	Margadale, L.
Belhaven and Stenton, L.	Marley, L.
Belstead, L.	Maude of Stratford-upon-Avon, L.
Bessborough, E.
Blatch, B.	Merrivale, L.
Blyth, L.	Mersey, V.
Boyd-Carpenter, L.	Monk Bretton, L.
Brookes, L.	Mottistone, L.
Broxbourne, L.	Mowbray and Stourton, L.
Caithness, E.	Munster, E.
Cameron of Lochbroom, L.	Murton of Lindisfarne, L.
Campbell of Alloway, L.	Nugent of Guildford, L.
Campbell of Croy, L.	O'Brien of Lothbury, L.
Carnegy of Lour, B.	Orkney, E.
Carnock, L.	Orr-Ewing, L.
Clinton, L.	Oxfuird, V.
Coleraine, L.	Pender, L.
Colnbrook, L.	Penrhyn, L.
Constantine of Stanmore, L.	Platt of Writtle, B.
Cork and Orrery, E.	Pym, L.
Cottesloe, L.	Rankeillour, L.
Craigavon, V.	Reay, L.
Craigton, L.	Renton, L.
Cross, V.	Rippon of Hexham, L.
Cullen of Ashbourne, L.	Rochdale, V.
Davidson, V. [Teller.]	Rodney, L.
Denham, L. [Teller.]	St. Aldwyn, E.
Dormer, L.	Saint Oswald, L.
Dundee, E.	Salisbury, M.
Effingham, E.	Saltoun of Abernethy, Ly.
Ellenborough, L.	Sanderson of Bowden, L.
Elliot of Harwood, B.	Selkirk, E.
Erroll of Hale, L.	Sempill, Ly.
Faithfull, B.	Sharples, B.
Ferrers, E.	Skelmersdale, L.
Fortescue, E.	Southborough, L.
Gainford, L.	Stanley of Alderley, L.
Gardner of Parkes, B.	Stodart of Leaston, L.
Geddes, L.	Strathcarron, L.
Gibson-Watt, L.	Strathclyde, L.
Gisborough, L.	Strathspey, L.
Glenarthur, L.	Suffield, L.
Gray of Contin, L.	Swansea, L.
Gridley, L.	Swinfen, L.
Grimston of Westbury, L.	Teynham, L.
Grimthorpe, L.	Thomas of Gwydir, L.
Hardinge of Penshurst, L.	Tranmire, L.
Harmar-Nicholls, L.	Trefgarne, L.
Havers, L.	Trumpington, B.
Henley, L.	Ullswater, V.
Hesketh, L.	Vaux of Harrowden, L.
Hives, L.	Whitelaw, V.
Hooper, B.	Wolfson, L.
Ironside, L.	Young, B.
Jessel, L.	Young of Graffham, L.
Johnston of Rockport, L.

Resolved in the negative, and amendment disagreed to accordingly.

4 p.m.

Lord Graham of Edmonton moved Amendment No. 169B:

Page 70, line 32, at end insert— ("where at least 75 per cent. of the those eligible to be consulted as set out in section 101(2) below have expressed their views during the consultation procedures mentioned in section 101(1)").

The noble Lord said: My Lords, we now move on to do what an Opposition to any Bill must do and that is to take advantage of the stages of the Bill in order to see whether, having lost an issue on one occasion (and we have repeatedly lost these issues) there is another means of persuading the Government that there can be common ground in giving effect to the Bill.

The Minister will not need to be reminded that at a previous stage he went further than he had on even earlier occasions. At Committee stage he referred to the numbers who would be required to vote for the vote to be significant and meaningful. He said: applications are likely in the first place to be pursued only where there is a significant body of collective support among tenants for the change. There must be evidence that a large number of tenants want to change". We are on common ground. The Minister has moved from the earlier wording and is prepared to write into the Bill what he means by: evidence that a large number of tenants want to change". Later in the same series of debates the Minister said: Where there was no significant support for any potential applicant, there would be no formal application".—[Official Report, 10/10/1988; col. 661.]

We now envisage that the Housing Corporation will require potential applicants to demonstrate in principle support from at least 10 per cent. of secure tenants before being allowed to go ahead.

There is enormous scope here for agreement. We believe that 10 per cent. is ridiculous. The Minister's first words were that he wanted to see a significant proportion. Others outside the House want to help the Minister in this matter. The ADC, which has an important role in these matters, says that it still considers that a simple majority of those voting should decide the issue. That issue has already been lost on an earlier debate.

Then there is the minimum turnout provision. The ADC in respect of the comments of the noble Earl, Lord Caithness, which I have just read to the House, says: the minimum figure would need to be set at a high level—perhaps 75 per cent. That should also be written into the Bill. From its vast experience the ADC says: Whilst the situation is very different because there the tenant has the safeguard of his own democratically elected council, the ADC does consider that provision should also be made for a majority vote of tenants before voluntary transfer takes place".

We invite the Government to consider yet again that although we believe they will be condemned in total for bringing forward what we believe is a shabby and discredited means of transferring council properties to private owners, we are concerned now about the procedure. I invite the Minister to look at our amendment. We are saying that before a transfer takes place, 75 per cent. of those entitled to vote shall vote. What will that mean in practice? To use the simple analogy of 100 people; we are saying that 75 of that 100 should have expressed a view. If 75 per cent. of those people express a view, 26 per cent. of them with the 25 per cent. who did not vote—that is 51 per cent.—will be counted as being in favour of the proposition.

In analysing what that means, we are saying that even if 65 per cent. of the people who vote are against the proposition they will still lose because the 25 per cent. who did not vote and the 29 people who chose to vote "no" will be counted as a majority.

What is the Minister afraid of? If 75 out of 100 people vote and 65 of those people vote against the Minister the Bill will still win. Ours is a simple proposition. We are inviting the Minister to help to assuage some of the outrage and anger which is felt throughout the country by tenants who feel that they are being given the dirty end of the stick.

There have been a number of protests and expressions of abhorrence not only by politicians but particularly by those who have done a great deal for themselves, their estates and for their country.

There was a protest at this House two or three weeks ago. I met a gentleman who lives in Leeds. We had a great deal to talk about. We were both ex-Servicemen from the Second World War. The name of this gentleman was Mr. Frederick Harrison. He lives at 12 Denbigh Heights Leeds. He gave me his war medals. They are here for the House to see. He was given four medals by this country for having helped to save it for democracy. This is what he has said in a letter which he invites me to read to the House: With much regret and disgust I have decided to hand back my medals. They represented to me the democracy for which I fought for six long years. Unfortunately we are now being denied our democratic rights to a vote. Therefore, to me the medals have lost their meaning". That is what the gentleman wrote. When I pursued the point regarding whether he would still be entitled to vote he said, "Yes, I will vote and if I win in the ballot I can lose my landlordship". By the demonstration I have given he can be one of the majority who votes, yet he will be deemed by the Government and this gerrymandering to have lost the vote. There is passion, there is anger, there is real despair, but what is more important is that there is cynicism about what the Government are doing in this whole shabby, shoddy deal.

If they are concerned about tenants' rights there are thousands of tenants who have expressed their view and who in a democratic vote will win, yet they will find that their landlord has changed. Before the Minister tells the House yet again that if they decide to stay they will still remain as a landlord, why does he not also tell us that changed status of the tenant as a landlord? He will be the tenant of a leasehold property. The freeholder will be able to load on to the local authority charges which will force up their rents. What about the rights of succession——

Baroness Blatch

My Lords——

Lord Graham of Edmonton

In a moment. What about the rights of succession which the present tenant has? The lot of a tenant who remains a council tenant will be weakened.

I say to the Minister with all the reason and passion that I can command that if he accepts the amendment, which will still allow considerable play for his argument, I believe that he will have done a fair, honourable and creditable thing. If he does not accept it, I fear that he will have demonstrated yet again the contempt that the Government have for democracy when it comes to council tenants. I beg to move.

Baroness Blatch

My Lords, I should like to have intervened to ask the noble Lord for an explanation. What did he mean, first, when he spoke about the gentleman who returned his medals being denied the right to vote? Secondly, what did he mean when he said that if the entleman votes he loses and if he does not vote he loses? If he votes for exclusion from transfer he will be granted that as an individual; if he votes for transfer he will be transferred. Therefore, I cannot understand how that gentleman is denied his right to vote. He has a right to vote for or against. He also has a right to abstain but he is warned of the consequences of abstention. I cannot understand what the noble Lord means when he says that the gentleman will be denied his right to vote.

Lord Graham of Edmonton

My Lords, that was not a question; it was an intervention. I shall reply to all speeches at the end of the debate.

Baroness Fisher of Rednal

My Lords, I am a little worried and I am not a council tenant. I do not think that the Minister's remarks have clarified the position in a way that the tenant will understand. Perhaps in the regulations or in the discussions which are now taking place with the Housing Corporation the Minister will give more explicit details. However, the voting system can become almost a charade because of the misconceptions.

I have had dealings with some tenants' associations and they are asking what kind of question will be on the ballot paper. They are asking whether voters will put a cross in the "no" box or a cross in the "yes" box. Such things may make a difference when deciding whether to vote or to abstain or in voting correctly. My noble friend said that misleading information is being given. If that is the case will the Minister give the House the non-misleading information which tenants must receive?

We must clearly recognise the fact that when voting in the election tenants will want to be asked a much simpler question than that which I read in the press this morning and which the Electoral Reform Society was going to use. Council tenants should be asked to vote on a simple question. I suggest that it should be as simple as, "Do you want to stay with the local authority? Put your cross in that box"; and, secondly, "Do you want to transfer to a new landlord? Put your cross in that box". Let us have a simple question that the tenants will understand so that the ballot is fair and we are not faced with the difficulty of counting abstainers as being in favour.

Lord Coleraine

My Lords, ballots are extremely confusing and I should be grateful if in reply the noble Lord will correct me in my understanding of his amendment. I understand it to mean that if 74 per cent. of those eligible to be consulted vote and no more, and they all vote in favour of the transfer, the transfer will not take place. Have I misunderstood the amendment?

Lord Graham of Edmonton

My Lords, I shall reply at a later stage.

The Earl of Caithness

My Lords, in addition to Amendment No. 189 which was moved by the noble Lord, I understand that we are discussing the Government's Amendments Nos. 190, 193 and 194, and that all of those are based on the paving Amendment No. 169B.

When I discussed these matters in Committee I said that I would consider further whether we ought to have a minimum turnout figure in a ballot following consultation under Clause 101 before tenants' choice went ahead. Amendment No. 190, which I ask noble Lords to look at, is the result of that consideration. I confirm that it marks a major concession and shift of policy by the Government. We listened in particular to what was said by the noble Lord, Lord McIntosh of Haringey, and by others in Committee.

Amendment No. 190 would provide that an applicant would be unable to serve a notice of his intention to proceed following the ballot under Clause 101 either if the number of tenants voting to remain with their landlord was more than 50 per cent. of eligible voters; or if the total number of tenants who had voted one way or the other was less than 50 per cent. of those eligible to vote.

This minimum turnout follows the suggestion made in Committee in the amendment of the noble Lord, Lord McIntosh, Amendment No. 135D. It provides an additional safeguard which I hope and believe will be widely welcomed both inside and outside the House. We have already made it our business to ensure, by adopting the tenant consultation criteria which already apply to voluntary sales by local authorities. and by complementing this collective decision-making with individual choice for tenants, that apathy alone cannot tip the balance against change. This amendment, by requiring the minimum turnout which the noble Lord suggested, and following a similar precedent in the Education Reform Act, ensures that there is seen to he no danger of apathy tipping the balance in favour of change.

All our experience with ballots suggests that turnout levels under tenants' choice will meet this test. Certainly applicants will be doing their best to maximise voting. But the amendment will underline the incentives which they will clearly have to win hearts and minds and to persuade tenants to turn out to vote for the terms on offer. Some noble Lords said that they were worried that the voting arrangements as they stood encouraged applicants to aim for a low turnout. In fact applicants will want to encourage as many tenants as possible to turn out to vote. We propose that the ballot will be handled by the Electoral Reform Society, or another independent teller so that prospective landlords could not depress turnout even if they wished. And arrangements in and under the Bill will make sure that tenants, before they vote, get full and understandable material explaining tenants' choice and the applicant's offer. I take the point made by the noble Baroness about simplicity and agree that it is a key issue.

Amendment No. 189 in the name of the noble Lord, Lord Graham, also proposes a minimum turnout. But this turnout—set at 75 per cent. rather than 50 per cent. of eligible tenants—is, I fear, not intended to impose a genuine and reasonable safeguard against apathy. It is intended to make sure that as many applications as possible fall at the final hurdle. For that reason I cannot recommend it to the House.

During the Summer Recess and subsequently I met many tenants and talked to them about their hopes, aspirations and fears. What came through was the fact that they were asking, "Why are the Labour Party trying to thwart out ambitions? It is always erecting barriers making it as difficult as possible for us to break out of the stranglehold which the local authorities have over us". The amendment takes that fear one step further and into reality.

I can best illustrate that by referring to the case of Chiltern District Council, which recently consulted tenants on a proposed disposal to a housing association. Eighty-four per cent. of those who voted, voted in favour. But the turnout of eligible tenants was 71 per cent. So, had that case been a tenants' choice application, the noble Lord would have prevented it from proceeding. I would suggest to your Lordships that that would clearly have been wrong. Moreover, I remind your Lordships that the 50 per cent. test proposed in our amendment in this connection is the same as that proposed by the noble Lord, Lord McIntosh of Haringey in Amendment No. 134D in Committee.

I hope that your Lordships will accept the Government's Amendment No. 190 and the consequential Amendments Nos. 193 and 194 as a genuine attempt to strengthen the safeguards in the Bill and to meet some of the concerns that have been expressed.

Lord Ross of Newport

My Lords, perhaps I can ask the Minister to clarify a matter which has worried me and also, I believe, the noble Baroness on the other side of the House. Is it not true that if an ordinary council house tenant votes against the transfer then that property will remain in the ownership of the local authority and he remains a tenant? It is only as regards flats where there is the lease-back arrangement; is that correct?

Lord Graham of Edmonton

No, no.

The Earl of Caithness

My Lords, that is correct. It is no good the noble Lord, Lord Graham of Edmonton, saying "No". I have repeated it time and time again. If the tenant of the local authority is in a house and he says "No", that house is excluded. I cannot make the matter any clearer. I said that in Committee, I have said it again this afternoon. Because we do not have the same system as Scotland as regards flats and applying freeholds, we cannot have that system; so it must be through lease-back.

Lord Campbell of Alloway

My Lords, as one who supported the Opposition amendment perhaps I may briefly say that the Government amendment greatly eases one's conscience as to how one shall approach this whole problem. I am extremely grateful to my noble friend for having introduced Amendment No. 190.

Lord Graham of Edmonton

My Lords, I apologise because I did not hear the last sentence of the noble Lord. I wonder if he would repeat it.

Lord Campbell of Alloway

My Lords, I am extremely grateful to the Minister for introducing Amendment No. 190 because that greatly eases the conscience of those who wish to support the Government notwithstanding the Government's acceptance of the Opposition amendment to secure that there would always be the right to resile from the decision. I am extremely grateful to the Minister.

Lord Graham of Edmonton

My Lords, if, out of 100 tenants, 50 vote and one is in favour of the transfer and 49 are against, the one wins because the one is aggregated with the 50 who did not vote.

Baroness Blatch

My Lords, perhaps the noble Lord will give way. The 49 per cent. who decided that they would like to remain where they are, in fact, as individuals, get their vote. After all, it is almost inconceivable when one reads the procedures that one has to go through to arrive at this vote that anything like 50 per cent. would not vote other than positive abstainers. Therefore, anybody who votes in this electon wins. It is hard to see who the losers will be.

Lord Graham of Edmonton

My Lords, the noble Baroness has a concept of a council tenant wholly concerned, and only concerned, with his situation as an occupant of his house or flat. A council tenant on an estate is conscious of a great many other things. He is not only voting against the transfer of his house; he is voting against the transfer of the whole estate. He is saying, "I do not like the idea." I do not think that that my arithmetic can be argued against. Given that 100 people are invited to vote and 50 vote, the Minister says that if there is one vote in favour of the transfer, then the one wins over the 49 per cent. because that one is aggregated to the 50 per cent. who for many reasons did not vote. Noble Lords must have a word for that kind of democracy.

The Minister has been quite fair on many occasions in explaining that proper time, papers, documents and so on will be available. However, there is no form of democracy where one vote out of the 100 invited will carry the day with the 50 who did not vote. I defy anyone to tell me any other form of vote of that kind which is considered to be truly democratic.

Earlier, the noble Earl said that if 74 people vote and not 75 then my amendment is not valid. However, in the same way, if only 49 per cent. of the people vote under the Minister's amendment, the same applies. There has to be a minimum of 50. One could argue, as did the Minister, that 75 is too high but he cannot argue against the principle that there has to be a cut-off point. If 100 are invited to vote, then we say that 75 should vote.

It is a question of equity. The Minister says that he has had discussions with people. I respect the fact that, as he did when holding other ministerial portfolios, he does not just read the documents but goes out to speak to people to see what it is all about. But his evidence is contrary to mine. I have lived and worked and continue to go among council tenants. I wonder how many noble Lords opposite consult council tenants on more than the odd occasion when they need to. I wonder how many actually live among them and discuss their problems with them. Many tenants will complain about their landlords. But when it comes to putting their eggs into a private landlord's basket they have very great worries. The Minister has not satisfied me; I intend to press the amendment.

4.27 p.m.

On Question, Whether the said amendment (No. 169B) shall be agreed to?

Their Lordships divided: Contents, 72; Not-Contents, 129.

DIVISION NO. 2
CONTENTS
Ardwick, L.	Kirkhill, L.
Attlee, E.	Lawrence, L.
Blackslone, B.	Leatherland, L.
Boston of Faversham, L.	Llewelyn-Davies of Hastoe, B.
Bottomley, L.	Lloyd of Hampstead, L.
Bruce of Donington, L.	Lockwood, B.
Buckmaster, V.	Longford, E.
Callaghan of Cardiff, L.	Lovell-Davis, L.
Carmichael of Kelvingrove, L.	Mcintosh of Haringey, L.
Carter, L.	Mar, C.
Cledwyn of Penrhos, L.	Milverton, L.
Cocks of Hartcliffe, L.	Monson, L.
Cudlipp, L.	Mulley, L.
David, B.	Nicol, B.
Davies of Penrhys, L.	Northfield, L.
Dean of Beswick, L. [Teller.]	Oram, L.
Diamond, L.	Peston, L.
Dormand of Easington, L.	Pitt of Hampstead, L.
Ennals, L.	Ponsonby of Shulbrede, L.
Falkender, B.	Prys-Davies, L.
Fisher of Rednal, B.	Seebohm, L.
Foot, L.	Shepherd, L.
Gallacher, L. [Teller.]	Stallard, L.
Galpern, L.	Stedman, B.
Graham of Edmonton, L.	Stewart of Fulham, L.
Hanworth, V.	Stoddart of Swindon, L.
Hatch of Lusby, L.	Strabolgi, L.
Hayter, L.	Taylor of Blackburn, L.
Hughes, L.	Taylor of Gryfe, L.
Hylton, L.	Turner of Camden, B.
Jacques, L.	Underhill, L.
Jeger, B.	Wallace of Coslany, L.
John-Mackie, L.	Walston, L.
Kennet, L.	Wedderburn of Charlton, L.
Kilbracken, L.	Whaddon, L.
Kings Norton, L.	Williams of Elvel, L.

NOT-CONTENTS
Alexander of Tunis, E.	Blyth, L.
Alexander of Weedon, L.	Boyd-Carpenter, L.
Arran, E.	Broadbridge, L.
Ashbourne, L.	Brookes, L.
Auckland, L.	Broxbourne, L.
Balfour, E.	Butterworth, L.
Barber, L.	Caithness, E.
Belstead, L.	Cameron of Lochbroom, L.
Birdwood, L.	Campbell of Alloway, L.
Blatch, B.	Campbell of Croy, L.

Carnegy of Lour, B.	Margadale, L.
Carnock, L.	Marley, L.
Clinton, L.	Maude of Stratford-upon-Avon, L.
Coleraine, L.
Colnbrook, L.	Merrivale, L.
Constantine of Stanmore, L.	Mersey, V.
Cork and Orrery, E.	Monk Bretton, L.
Cottesloe, L.	Montgomery of Alamein, V.
Craigavon, V.	Morris, L.
Craigton, L.	Mowbray and Stourton, L.
Cranbrook, E.	Munster, E.
Cross, V.	Murton of Lindisfarne, L.
Cullen of Ashbourne, L.	Norrie, L.
Darcy (de knayth), B.	Nugent of Guildford. L.
Davidson, V. [Teller.]	O'Brien of Lothbury, L.
Denham, L. [Teller.]	Onslow, E.
Dundee, E.	Orkney, E.
Ellenborough, L.	Orr-Ewing, L.
Elliot of Harwood, B.	Pender, L.
Erroll of Hale, L.	Penrhyn, L.
Faithfull, B.	Platt of Writtle, B.
Ferrers, E.	Porritt, L.
Fortescue, E.	Portland, D.
Gainford, L.	Pym, L.
Gardner of Parkes, B.	Rankeillour, L.
Geddes, L.	Reay, L.
Gibson-Watt, L.	Rippon of Hexham, L.
Gisborough, L.	Rochdale, V.
Glenarthur, L.	Rodney, L.
Gray of Contin, L.	Rugby, L.
Gridley, L.	St. Albans, Bp.
Grimston of Westbury, L.	Saint Oswald, L.
Grimthorpe, L.	Salisbury, M.
Hardinge of Penshurst, L.	Sanderson of Bowden, L.
Harmar-Nicholls, L.	Selkirk, E,
Havers, L.	Sempill, Ly.
Henderson of Brompton, L.	Sharples, B.
Henley, L.	Skelmersdale, L.
Hesketh, L.	Southborough, L.
Hives, L.	Stodart of Leaston, L.
Holderness, L.	Strathcarron, L.
Hooper, B.	Strathclyde, L.
Hunter of Newington, L.	Strathspey, L.
Hylton-Foster, B.	Suffield, L.
Ironside, L.	Swinfen, L.
Jessel, L.	Thomas of Gwydir, L.
Johnston of Rockport, L.	Trafford, L.
Kimball, L.	Tranmire, L.
Kinnaird, L.	Trefgarne, L.
Lauderdale, E.	Trumpington, B.
Long, V.	Ullswater, V.
McAlpine of West Green, L.	Vaux of Harrowden, L.
McFadzean, L.	Whitelaw, V.
Mackay of Clashfern, L.	Wolfson, L.
Malmesbury, E.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.35 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 169C:

Page 70, line 32, at end insert— ("where, in respect of each dwelling-house the qualifying tenant has submitted his consent in writing in accordance with section 95(I)(c) below").

The noble Lord said: My Lords, I understand it will be of benefit to your Lordships if we take Amendment No. 169C with Amendment No. 173. The purpose of the amendment is to ensure by using the same words in Clause 58(1)(b) of the Scottish Bill that a tenant has given consent before any application is lodged with the existing landlord. I appreciate that land tenure in Scotland is different from the English system but we do not feel that the English tenant should be penalised if he wishes to exercise his right. I do not doubt that the Government will say that the pre-selection scheme, which does not actually appear on the face of the Bill, will take place prior to application. That was the position of the noble Earl, Lord Caithness, in Committee. This amendment is intended to give some teeth to what would otherwise be a potentially weak procedure, and a potential new landlord will be required to demonstrate quite clearly that he has support for his application from the tenant before the application is made. I beg to move.

The Earl of Caithness

My Lords, Amendments Nos. 169C and 173, to which the noble Lord, Lord Carmichael, has just spoken, do not fit the detailed procedures of Part IV, as we have brought it to your Lordships' House. Perhaps your Lordships will allow me to explain the position, but before doing so I should like to say how pleased I am to be debating again with the noble Lord and how delighted I am that the Opposition have changed their bowling for this particular amendment.

The operational design of the scheme is based on four practical points. First, voting tenants are to have the decisive say over the outcome of an application but the burdens of procedure are to fall, as they obviously must, on applicant and landlord as buyer and seller. Secondly, the Housing Corporation are to carry out approvals and the Secretary of State is to have a consent power to control disposals after transfer. Thirdly, the procedures give one equal chance to both the applicant and the landlord to set out their views on the package for transfer and on its value. Finally, to ensure that progress is made, there are time limits and provision where necessary for binding arbitration on certain disputes.

We want the tenants to be active in the circumstances in which the powers under Part IV will operate. Tenants expressing a general interest in transfer will have access to advice and assistance from the Housing Corporation under Clause 105 to show them how to turn their interest into a practical proposal for change, with the help of a willing landlord. As part of the approval process under Clause 93, the corporation will be able to require an undertaking from any would-be new landlord that he will take part in pre-selection procedures. These will ensure that tenants are always informally consulted before any application affecting them is made. Also arrangements will be made to ensure that tenants will have the chance wherever possible to assess the attractions of alternative applicants, if more than one potential new landlord is interested in applying to take over their home. An applicant must in any event be able to demonstrate that he has the support of at least 10 per cent. of tenants consulted at this stage before he can put in a formal application. Where there are two or more applicants, the one with most support will be able to put in a formal application.

It is just not practical to require the applicant to gain the written consent of each qualifying tenant before putting in an application. Furthermore, it is not necessary. The pre-selection procedure will ensure that applicants do not put in an application without genuine tenant support, while the later formal consultation ensures that the tenants, once fully informed, make the final decision about the acquisition.

I am aware that the equivalent provisions in the Scottish Bill require the applicant to obtain each tenant's consent to his application. That is so because Scottish land law is fundamentally different. It makes it possible to have separate freehold interests within the same building. In effect therefore an applicant makes one application per dwelling, be it a flat or a house, and it is practicable for each tenant to make an individual commitment at the start of the formal procedures. Under English law, where the smallest freehold interest in a block of flats that can be transferred remains the freehold of the entire block it is not practicable to require this prior individual commitment, and we have developed the alternative approach that I have described.

I appreciate why the noble Lord, Lord Carmichael of Kelvingrove, moved the amendment. I thought that it was important to describe to the House the real difference between Scottish law and English law on the matter.

Lord Pitt of Hampstead

My Lords, I am not clear how the Government know that the applicant has substantial support in the estate before proceeding.

The Earl of Caithness

My Lords, it is not up to the applicant to prove it to the Government. The potential applicant has to give proof to the Housing Corporation that he has that support.

Lord Pitt of Hampstead

My Lords, how does he do that'? The method suggested by my noble friend Lord Carmichael of Kelvingrove would enable him to do that. He would have plenty of evidence by way of written consent that people would like a change. What does the corporation demand of the applicant in order to know that there is interest in the change?

The Earl of Caithness

My Lords, I am sorry, I understood that the noble Lord was asking about the Government.

Lord Pitt of Hampstead

My Lords, when I said government I meant the corporation.

The Earl of Caithness

The corporation will have a number of methods of checking that the potential applicant has at least 10 per cent. of the support of the tenants in the area. This could be done through the signing of a piece of paper or writing a letter. We consider that this is an important first step. The corporation will have a close check on it.

Lord Pitt of Hampstead

My Lords, does the Minister realise that he has not answered the question? How does he know that this is so? If the Minister says that evidence must be produced of X having signed, that is straightforward. If the amendment is accepted, the situation is again straightforward. The Minister's answer leaves the matter in the air in saying that the corporation has different or many ways. We are legislating and must therefore lean on some rule. How does the applicant satisfy the corporation that there is this interest?

Lord Donaldson of Kingsbridge

My Lords, it seems to me that the corporation will say, "Give me a list of people who agree with you-, and then send someone round to check.

Baroness Fisher of Rednal

My Lords, I too have been concerned about the matter that my noble friend raises. Is the Minister aware that all kinds of people are going round council houses as prospective landlords and harassing tenants? On an estate that I know, all the tenants have notices in their windows saying, "Nobody is to call here about buying the property". I understand that to be the point of my noble friend. These callers are already on the doorstep trying to get their message over. Does the Housing Corporation know that? if so, it should be doing something about it. This is contrary to what the Government wish. It is going on. I am sure that the Minister would condemn it.

The Earl of Caithness

My Lords, there are also very many tenants who are delighted at the opportunities that they are being given under the Bill. They have wished to get away from the stranglehold of local authorities, but the local authorities have been unwilling to let them go because they do not want any of their empire to disappear.

I say simply to the noble Lord, Lord Pitt of Hampstead, what I have said twice before: the potential applicant has to demonstrate that——

Lord Pitt of Hampstead

But how? That is what I am asking.

The Earl of Caithness

My Lords, I am about to answer the noble Lord. If he would stop interrupting from a seated position, I might be able to finish.

Lord Pitt of Hampstead

My Lords, I raised the matter from a standing position also. The Minister has still not answered the question. He is being asked a straightforward question. How does the applicant demonstrate to the Housing Corporation that there is this interest in buying property? It is a simple question and deserves a straightforward, simple answer. Why does the Minister not answer it?

The Earl of Caithness

My Lords, now that the noble Lord has stopped I shall do so. That is what I was trying to do, but the noble Lord interrupted me.

The applicant has to demonstrate that he has at least 10 per cent. support of the tenants. That will come down to signatures on a piece of paper. That is what I said previously.

4.45 p.m.

Lord Carmichael of Kelvingrove

I think that confusion always occurs when there are cross-references between this Bill and the Scottish legislation. It becomes quite difficult.

I appreciate the difficulties in putting too much on the face of the Bill. If these minor amendments were made, it would solve the matter entirely for the Government. The Minister spelt out clearly what the Housing Corporation will do and how the tenants will he informed. Unless the amendment is accepted, the point of view of the tenants will not be known. In Amendment No. 173 we specify: shall he accompanied by the consent in writing of the qualifying tenants to an approval being made to their existing landlord". I do not think that we are going to get much further with this matter. I shall read what the Minister has said with great interest. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton moved Amendment No. 169D:

Page 71, line 6, leave out ("to") and insert ("7, 9, 10 or").

The noble Lord said: My Lords, in moving Amendment No. 169D I wish to speak also to Amendment No. 173ZA. The Minister is entitled to tell us that these matters have been raised earlier. Under the order of debate, however, that does not preclude our raising them again. Some useful discussions took place on 10th October in which my noble friend Lord Carter, the noble Lord, Lord Renton, and the noble Baroness, Lady Fisher of Rednal, took part.

The amendments are fairly straightforward. When Amendment No. 169D was raised in Committee, the Minister opposed it. He gave as his reason the need to keep specially designed and substantially adapted housing within the control of local authorities. The same reasoning appears not to be important when a HAT is established or when a local authority wishes to transfer its housing stock en masse. If the properties are transferred under Part IV. they will go to approved landlords, who presumably seek to relet them to appropriate tenants. Most disabled tenants of specialist housing may well opt to remain local authority tenants. Because of their disabilities, some may wish to become tenants of a housing association whose management of services they believe will be particularly appropriate to their needs. That I understand. On the other hand, others may wish to change on the same basis that their neighbours do.

The Government have used the same categories of housing that is exempt from the right to buy in regard to the change of landlord provisions. For some categories of housing—for example, tied accommodation—this is clearly sensible; for others the reasoning is less obvious. We recognise the difficulty of the argument on both sides in regard to the right to buy for housing designed for use by disabled people. I know that the Minister is painfully aware—painfully because it must be agony at times—of the difficulties of making decisions in this sensitive area. One argument for the exemption of such housing is that it is in short supply and needs to be kept available for renting by those who need it. Under the change of landlord provision it will so remain.

There are two amendments to which I am speaking. The reason for Amendment No. 173ZA is that there needs to be a firm policy statement by new landlords as regards adaptations which are required over and above the policies that the Minister has stated so far. I believe that there are some powerful reasons why the amendment should be given a fair wind by the Minister. First, existing disabled tenants who need or who anticipate needing adaptations, will want the information. Secondly, existing able-bodied tenants in making a decision on whether to transfer, will probably not think to make inquiries about the future adaptations in the way that they may inquire about rent levels, repair procedures, etc. Thirdly, the service providers such as the social service departments, advice agencies and voluntary bodies, etc., will be able to work more effectively if there is a clear policy statement on adaptations for disabled tenants.

At present, while the arrangements for owner-occupiers and council tenants are usually clear cut, there are frequently cases of uncertainty and delay for tenants of housing associations. As housing associations are likely to figure prominently among those who will become the new landlords I believe that this amendment is also sensible. I beg to move.

The Earl of Caithness

My Lords, these amendments are designed, first, to allow certain disabled tenants living in specialised housing to participate in tenants' choice; and secondly, to ensure that an applicant must include in his application under Clause 95 a statement of his policy for giving disabled people, promptly, adaptations that they might need. These are serious and important matters, and I compliment the noble Lord, Lord Graham of Edmonton, for pursuing them so determinedly. I say that because I believe that we did not vote on these amendments in Committee but we gave our opinion on other amendments that came forward at Report stage. That is the difference.

Taking Amendment No. 169D first, I should remind your Lordships that we originally proposed to exclude from tenant's choice the same categories of specialised housing for the disabled and also for the elderly and others, which were excluded from the right to buy. That was the principle. These categories were set out for the purposes of the right to buy in paragraphs 5–11 of Schedule 5 of The Housing Act 1985. We took the view that, if the public sector landlord needed to retain these special-purpose dwellings, and they were excluded from the right to buy accordingly, we should follow the same line for the same reasons in tenants' choice.

Since our debate in Committee, however, I have agreed that one category of property, namely those dwellings specially adapted for the disabled, covered by paragraph 8 in the schedule to the 1985 Act should be included in the right to buy. I have tabled Amendments Nos. 233A, 233B and 243B which we shall debate tomorrow and which would achieve this effect. Those amendments will have the effect of removing the property concerned from the exemptions to tenants' choice because of their effect on the definition of "qualifying tenants" at Clause 92(4)(b), which includes a direct reference to the schedule to the 1985 Act. So, thus far, we are proposing to do just what the noble Lord, Lord Graham of Edmonton, wants.

As regards property covered by paragraph 6 of the schedule. I am not sure that I can go so far with the noble Lord. These are properties which have had, ever since they were built or provided, special features which make them suitable for the disabled. They are, arguably, even more special and harder to replace, than the paragraph 8 property. For both tenants' choice and the right to buy, I must, I believe, consult widely first before taking any decision to make further changes to the scope of the schemes. I hope that your Lordships will be prepared to wait for the outcome of that consultation, and that as a result there will be no need to press this amendment today. I give this categorical assurance to the noble Lord, Lord Graham of Edmonton, that any change to the right to buy exemptions which may result from the consultations would be followed also for tenants' choice.

Turning to Amendment No. 173ZA, I must say that we and the Housing Corporation have already gone a very long way in the tenants' guarantee to ensure that approved landlords give very full weight to the needs of special groups. Among other things, the guarantee would require approved landlords, as a condition of their approval, to inform tenants about their policies—and I quote from Section G1(g) of the draft of 10th October— for meeting the requirements of tenants and members of their families who become disabled". There in the tenants' guarantee one is taking care not only of those who are disabled at the moment but also those who will become disabled. They will also have to pay attention to the special needs of groups such as the disabled in their allocation policies. That can be found in Section B(3)(1).

But, to meet the noble Lord's concern, I would be prepared to ensure if he will withdraw his amendment that the applicant's policy towards adaptations for the disabled is a matter which is addressed in the offer of tenancy terms which the applicant makes to the tenant in consultation under Clause 101. To the extent that promises are made by the applicant at that stage about meeting the requirements of the disabled in the tenant's household they will be contractually binding. That would actually have much more real significance and effect than the simple statement of policy which the noble Lord's Amendment No. 173ZA would require in the application form. I believe that I have met the noble Lord well on Amendment No. 169D and I have given him an offer which goes further than his Amendment No. 173ZA.

Lord Graham of Edmonton

My Lords, it is an offer that I cannot refuse. I am grateful to the noble Earl for that offer. Though I have the privilege of moving these amendments tonight, as the noble Earl and others will appreciate, my noble friend Lord Carter and other Members of the House have demonstrated, very often from their personal family knowledge, how important it is to try to secure the best possible arrangements for individuals who are disabled. I am very grateful to the Minister for what he said as regards the first amendment. I am very well satisfied because these matters are a question of record. The Minister and his advisers are honourable men. What has been explained to me in the last minute certainly will go a very long way—perhaps further than we want—to ensure that the policies of any new prospective landlord are as sympathetic as possible. In those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 93 [Persons by whom right may he exercised]:

Lord McIntosh of Haringey moved Amendment No. 170:

Page 72, leave out lines 10 and 11 and insert— ("(d) the Housing Corporation shall—

1. (i) inform all tenants of the approved person of the revocation of the approval,
2. (ii) consult the tenants by means of a ballot as to whether they wish to continue as tenants of that person, and
3. (iii) inform the tenants of the implications of the revocation.

(e) if in the ballot, the tenants by simple majority of those voting, express a preference for a transfer to a local authority or to an alternative approved landlord, the Housing Corporation shall make the necessary arrangements for such transfer to that authority or approved landlord.").

The noble Lord said: My Lords, Clause 93 is concerned with the qualities required of applicants and the persons by whom the rights conferred by Part IV to take over public sector housing shall be judged. Clearly, it is necessary for the Bill to say not only what qualities are required of applicants but also what constitutes a bar from becoming an applicant or a private sector landlord seeking to exercise the rights conferred in Part IV of the Bill. Clause 93(5) refers to what may appear to the corporation to be, a failure to honour an undertaking or to meet any criteria or for any other reason". On such a basis: the Corporation may revoke an approval given under this section".

The defect of this provision—we are generally in favour of the provision—lies in lines 10 and 11 on page 72 of the Bill which say: the service of a notice under this subsection shall not affect any transaction completed before the service of the notice". What that means in plain English is that those who are already tenants of this landlord and who have already been through the procedure before the incident, or series of incidents or the lack of them which have given rise to the corporation feeling the necessity to revoke the approval for the landlord, are left high and dry. They are left as tenants of a landlord who no longer has the confidence of the Housing Corporation. It cannot be right that if a landlord falls down on the job—that is the basis on which the Housing Corporation would be impelled to revoke the approval—those tenants have no appeal to the Housing Corporation and are left as tenants of this unsatisfactory landlord.

The amendment states: The Housing Corporation shall—

1. (i) inform all tenants of the approved person of the revocation of the approval,
2. (ii)consult the tenants by means of a ballot as to whether they wish to continue as tenants of that person, and
3. (iii) inform the tenants of the implications of the revocation; (e) if in the ballot, the tenants by simple majority of those voting"—

I hope that that will not raise contentious issues again because that is not the intention of the amendment— express a preference for a transfer to a local authority or to an alternative approved landlord, the Housing Corporation shall make the necessary arrangements for such transfer to that authority or approved landlord In Committee the Minister relied on the fact that tenants of a landlord who is no longer approved will have legally enforceable contractual arrangements. He thought that those were good enough as safeguards. He suggested that we were proposing a long drawn out reverse compulsory purchase procedure. I cannot accept that. The procedure which we are proposing already exists under the Housing Associations Act 1985.

Section 30 of the Act provides that if a registered housing association is found to be guilty of misconduct or mismanagement, it is possible for the committee members to he suspended or removed, for the money or securities to be frozen and for administrative transactions to be restricted. Section 32 provides that if the management of the land belonging to the association would be improved if the land were transferred, the Secretary of State can consent to such a transfer. That procedure is certainly no less long drawn out than the one we propose. I suspect that it could be even more long and drawn out. It is necessary to have a procedure, even if it cannot be made instantaneous, to protect tenants who have already gone over to a landlord who was subsequently proved unsatisfactory. To force tenants to go to law to enforce their legal and contractual rights is not a good enough alternative to what we propose. if they go to enforce their legal rights they may or may not succeed in doing so. I am not enough of an expert to know whether that would be the case. However, they would still be left with a landlord who is probably incapable of being, rather than unwilling to be, a decent landlord. They want an alternative landlord of their own choice, not one who is guilty of mismanagement or is not worthy of the confidence of the Housing Corporation. What we propose is easier and quicker than the legal redress which the Minister suggested.

I hope that he will feel able to look at this again. If I do not have the wording right I hope he will recognise that there is a loophole in the Bill which could cause genuine and justified concern to tenants who find themselves under the control of landlords who have lost the confidence of the Housing Corporation. I beg to move.

5 p.m.

The Earl of Caithness

My Lords, the noble Lord and I have the same aim; to safeguard the interests of tenants who transfer under tenants' choice. We differ only how to do this.

The first objective must be to make sure that the right applicants are approved to take part in tenants' choice in the first place. That is why we have proposed to equip the Housing Corporation with all the powers it will need to run a rigorous and demanding approval regime which will make sure that only responsible, competent and viable bodies which subscribe to the tenant's guarantee as a condition of taking part are approved. If the system does the job we have designed it for, the risk of circumstances arising which require revocations of approval will be minimised. I hope that there will be no such cases. I am confident that there will at most be very few.

Where approval was revoked before transfer, that would be the end of the application. The position where approval was revoked after transfer would be different. But very strong safeguards would be available. The tenant can rely on his tenancy agreement with his landlord, which would be unaffected if approval were revoked, whether because of misfortune, including financial difficulty, or in the unlikely event of misconduct. In some cases where the tenants were in difficulty over ensuring on their own that their contractual interests were honoured, help could he available from the Housing Corporation's powers under Clause 106 to give legal or other assistance to transferred tenants in dispute with the landlords to which they have transferred.

Where the new landlord was a registered housing association, however, as very many will be, the safeguards would be even stronger. In a case where there was "misconduct or mismanagement"—and Clause 49 provides that failure to live up to the tenant's guarantee may, among other things, be taken as evidence of such failings—certain existing powers of the corporation would come into play. These would include powers to change the membership of management committees and to remove officers, employees and agents; powers to control all of an association's financial transactions; and with the consent of my right honourable friend the Secretary of State, powers to direct a transfer to be made to the corporation itself or to another registered association.

Bearing these strong safeguards in mind, I do not think that the noble Lord's approach of retrospectively undoing tenants' choice transactions where an approval was revoked is the right one. His amendment states simply that, in the circumstances he describes, the Housing Corporation would: make the necessary arrangements for such transfer". In this way he glosses over the enormous area of legal and practical difficulties involved in what would in effect be a new compulsory purchase regime. The legal and contractual safeguards I have described are not ony strong hut, unlike the noble Lord's, I fear, workable as well. Nor can I imagine that a ballot giving the option of a return to the local authority would be the answer in tenants' eyes in the case of dispute with their new landlord or difficulty with continuing his operations. If the authority had been a satisfactory alternative, I doubt whether the tenants would have wished to transfer in the first place.

Finally, the noble Lord's amendment would require the corporation to inform all tenants of the revocation of their new landlord's approval. There is at present no requirement on the corporation- to inform individual tenants, though its intention is that it would inform the local authority and tenants' groups, together with any person who had established a special interest, such as an individual tenant who had made a complaint against the landlord. In practical terms, I think that this should be enough to make sure that, as is clearly desirable, all individual tenants affected learn what has happened.

Lord Somers

My Lords, the noble Earl referred to where the landlord is guilty of misconduct or mismanagement. Can he say by what standards those are to be judged, and who is to do it?

The Earl of Caithness

My Lords, I am grateful to the noble Lord for enabling me to elucidate this. It will be the vetting procedure of the Housing Corporation which will have to approve the potential applicant in the first place. The potential applicant will have to satisfy the Housing Corporation as to credentials. It will then be for the Housing Corporation to monitor after that.

Lord McIntosh of Haringey

My Lords, the Minister is correct in saying that we have many of the same objectives. We have supported the approval regime that is imposed on the Housing Corporation. We agree with him that revocation of approval before the transfer is the correct procedure. As he says, what happens afterwards is more complex. I have listened carefully to what he said and I shall certainly have to think about it before deciding what to do. He referred to Clause 104, which as I understand it is mainly concerned with proposed acquisitions, but I do not doubt that he is serious in saying, as I think he said, that help could be available from Housing Corporation powers. That may well be a better advantage than the solution which we have proposed.

I was somewhat worried about what he said in relation to notification to tenants. He said that tenants' organisations and the local authority would be notified if approval had been revoked and that individual tenants who had complained would be notified. I wonder whether he would consider on reflection that revocation of approval is such a serious matter that all the tenants of such a landlord should he notified simply as a matter of justice being seen to be done.

The Earl of Caithness

My Lords, I think that the noble Lord has a point there. Perhaps if he will allow me I will take the matter away and talk to the corporation about it to see what can be done to strengthen the situation.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Earl. We are searching along different roads for the same objective. Therefore it would be proper for me to take the amendment away and read what he has said. I hope that we can reach agreement. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton moved Amendment No. 170A:

Page 72, line 22, at end insert— ("(7A) Notwithstanding that a person is for the time being approved by the Corporation in accordance with subsection (1) above, no such person may make an application under this part in respect of a group of properties to which section 102(7) below applies except where the terms of such an application fall within the conditions specified therein").

The noble Lord said: My Lords, in moving Amendment No. 170A I should like to speak also to Amendment No. 195. The amendment deals with the cooling-off period aspect where an application has been made which has subsequently been rejected. We are concerned—I think the Minister would be too—that the tenants on an attractive estate may be subject time after time to having to go through the various procedures which the Minister has proposed.

We are trying to deal with some of the points which the Minister put quite bluntly when we discussed the matter on a previous occasion. What we are concerned about here is the timescale before there can be any other application either by the same landlord. a new landlord or another—namely, 24 months. We are also talking in terms of exceptions.

On a previous occasion the Minister asked in as many words, "Why stop a landlord applying again for a proportion of the same properties where he has support?" The amendment allows for that situation because we are talking of it being substantially different. The second question was, "Why stop a landlord applying on different terms'?"—in other words, he rejigs his story. The amendment does not prevent this, provided the terms are substantially different. He also said on a previous occasion, "Why stop a tenant's co-operative?"

The amendment is one of the exclusions from the 24-month period. The application will have to be made by a tenants' co-operative and receive the support of not less than 40 per cent. of the tenants concerned. I am absolutely certain that the Minister's brief is headed by the one word "Accept". Therefore, in the hope of that, I beg to move.

5.15 p.m.

The Earl of Caithness

No, my Lords, it is not. It is headed by the word "My" and follows on with the word "Lords". However, I agree with the noble Lord that we have discussed similar amendments before. I can assure him that I have given the matter considerable thought since then. I fully understand and share the concern that tenants should not be pestered by successive applications which they do not want—that was a point which the noble Baroness, Lady Fisher of Rednal, mentioned earlier this afternoon in connection with another amendment. That applies whether they come from the same applicant or from a whole string of them. The procedures which we shall impose with the Housing Corporation will not allow that to happen.

The Housing Corporation will exercise its approval power with care. There will be no free-for-all for repeated trial and error applications by the same or different applicants, even in the unlikely event that applicants might think it advantageous to make them. The pre-selection arrangements moreover will provide that every applicant must be willing to take part in a preliminary competition and must be able to demonstrate the support in principle of at least 10 per cent. of the tenants before they can put in an application. This will ensure that tenants are not bothered with repeated, unwelcome or frivolous applications.

Where tenants do not like a proposal and vote it down in the formal ballot, the corporation will obviously be cautious about an early, subsequent application. But I see no reason why the tenants should be placed in a no-go area for tenants' choice for the next two years. Who is to say whether some or all of them might not prefer another later offer?

The amendments as drafted would make an exception to the two-year embargo for tenants' cooperatives with 40 per cent. of tenant support or for an offer which was substantially different from the one already rejected.

I must say to the noble Lord that there are several problems here. First, if the test for support for a co-operative is to apply in the pre-selection stage, it is much more stringent than the one we propose for applicants of other kinds on their first time round which seems unfair. As for the test regarding terms, it is hard to see how their similarity or dissimilarity to those in an easier application can be assessed before an application is made. The applicant will not actually he able to draw up his offer of terms until after the valuation, when he knows what he will he paying for the property. The data will just not be there for anyone—presumably the Housing Corporation—to reach a view before an application is made; and even if the terms were there to be assessed, what if the tenants wanted substantially the same offer but from a different landlord?

If an applicant can meet the corporation's criteria, including that of demonstrating that he has preliminary support from the tenants, I do not see what business we have preventing him from making his case and letting the tenants vote on it. The hurdle of 10 per cent. prior tenant consent would apply in the normal way. The tenants have the ultimate safeguard of a right to stay with the council if they so wish and of the new 50 per cent. minimum turnout rule. I do not think we should be prejudicing their right to decide for themselves on the basis of the case before them.

Lord Graham of Edmonton

My Lords, the Minister has given me a full—I was almost tempted to say fair— reply. However, I must be careful because I have a reputation to keep up, as he knows. He is saying that provided a landlord is able to demonstrate that there are at least 10 per cent. of the tenants at the preliminary stage who wish to transfer, that is the trigger which he has to achieve. But if he achieves that in the first instance and then there is a negative ballot, he knows that he has the 10 per cent. and that they are not likely to go away. I do not dispute the fact that there will always be perhaps 10 per cent. or even more almostipso facto tenants on an estate who for many reasons want to transfer their landlord. Therefore some intelligence will have been gathered, not only through meetings but during conversations and discussions. It is not a hurdle for the same landlord or a new landlord to get the 10 per cent. I do not think it was in the first instance or subsequently.

The Minister then says that the Housing Corporation will exercise caution before it agrees again. Of course there will be discussions and in the light of a failure—because we are talking about a failure in the first instance—a lot of information will have been gathered. Perhaps the view will have been expressed that if the terms had been different—I am not talking about money, I am talking about services and everything else—they ought to be tried. I can see an embryo or new landlord very quickly rejigging the package which will satisfy the 10 per cent. or even an additional 5 per cent. But then you go through the trauma again.

The amendment seeks to prevent a group of tenants, however big it is, having to face up to the situation time after time. There is such a thing as attrition. Those who at one time were vigorous in their opposition will ask, "What is the point?". They then decide to abstain. Abstention does not mean opposition; it means being in favour. In the amendment we have tried to meet the points made by the Minister at an earlier stage. I do not believe that he will move. We hope, as he does, that tenants will not continue to be got at. My noble friend Lady Fisher with her vast experience and intimate knowledge of the people whom she served so well in another place already has evidence that people are fed-up even before the exercise starts.

I am grateful to the Minister for what he has said. He has taken the amendment seriously, as we have. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 94 [Property excluded from right]:

Lord Graham of Edmonton moved Amendment No. 171:

Page 73, line 10, at end insert ("; and (c) the tenant has within the previous six months informed the landlord that he wishes the dwelling to be included within a management co-operative.").

The noble Lord said: My Lords, we returned to something with which I know the Minister has great sympathy; that is, that all these procedures should do nothing to stultify the formation of tenant management co-operatives. His then ministerial friend in another place, Mrs. Marion Roe, after an exchange gave certain assurances which the Minister and his colleagues fully met in amendments that were before the House at an earlier stage.

The Minister will recall that I said that we were not just concerned about those co-operatives where an agreement had been reached but those that were in the process of reaching agreement. I realise that that phrase is nebulous. It could be seen to be a device used by people who are anxious to be excluded on what might he held to be bogus grounds. The amendment seeks to make a point because when the Minister responded to my queries he said: We are running into severe problems as regards the question of statutory definition". He then went on: I shall be happy to discuss the matter between now and a later stage of the Bill".—[Official Report, 10/10/88; col. 665.]

I invite the Government and their advisers to say that my amendment, which provides an additional paragraph (c), takes account of the bona fides of those who have begun to negotiate. They seriously want a TMC or the negotations would have been broken off by the local authority. I believe that our amendment may be helpful to the Minister. I beg to move.

The Earl of Arran

My Lords, as your Lordships know, we moved amendments in Committee to ensure that as far as possible the tenants' choice procedures cannot cut across the boundaries of an existing tenant management co-operative. The noble Lord expressed concern that this protection would not cover emergent co-ops and we agreed to consider that point further, as he said.

As I explained in Committee, our initial problem was in establishing a legally precise definition which would identify the bodies we wished to protect. As drafted, the Bill offers protection where two requirements are satisfied: first, a body has formally taken over some functions of the local housing authority under Section 27 of the Housing Act 1985; secondly, that body has been designated by the Secretary of State as a TMC for the purposes of tenants' choice.

We fully accept that under these arrangements there is no protection for a co-operative until the Section 27 procedures are formally complete. That is the one legally precise point at which we can say that there is indeed a body lawfully managing the housing. Amendment No. 171 seeks to move the protection to an earlier stage when the body was making progress towards a formal agreement. That would, I fear, to be uncertain for a statutory provision; but there is an administrative way in which we should like to ask the Housing Corporation to go some way towards meeting the noble Lord's intention.

Lord Graham of Edmonton

Good.

The Earl of Arran

It would work like this: before a tenant management co-op can be created, the local authority is required by Section 27(1)(a) of the Housing Act 1985 to consult the tenants. There will be an identifiable point where the authority resolves to put that consultation in hand. Where a resolution of that kind about a proposed management co-op had been made, the corporation would be able to say: "This resolution has been passed: it is a genuine proposal which is being taken forward promptly. Although the statutory arrangements in Clause 95 do not bite because the co-op does not yet legally exist, it would be sensible to make sure that broadly the same rule applies. If a tenants' choice applicant applies for some of the tenanted property where tenants are being consulted about devolution to a co-op, therefore, he must apply for all of it. And he cannot add into his application tenanted property whose tenants are not being so consulted".

That would achieve much the effect that the noble Lord, Lord Graham, wants. It has been mentioned by officials to the National Federation of Housing Co-operatives, which was I understand inclined to regard it as helpful. If the noble Lord will agree to withdraw his amendment, we shall discuss further with the corporation how to achieve the result.

Lord Graham of Edmonton

My Lords, I invite the Minister to cherish this moment. There will be very few like it, and there have not been many previously. Not only is there complete agreement on this side of the House but we fully acknowledge that he has gone as far as he can.

I am happy to rest on tht basis. Even I understand what he has said. The Minister assures me that even those outside the House, whom I have not consulted of late, feel that the suggestion is helpful. He is not giving a statutory cloak to pre-statutory matters but the Housing Corporation will establish the position from the date of the resolution. Serious discussions must be taking place. We are not talking about someone with an airy-fairy idea discussing the proposal. We are discussing the formal procedure which the Housing Corporation is likely to lay down for every local authority to understand. I am grateful to the Minister. I am happy to withdraw the amendment on that assurance.

Amendment, by leave, withdrawn.

Clause 95 [Application to exercise right]:

Lord McIntosh of Haringey moved Amendment No. 171A:

Page 73, line 30, at end insert— (". and (c) shall include an undertaking by the applicant that either—

1. (a) any subsequent disposal shall include, as a condition that the properties transferred shall remain available letting; or,
2. (b) that any application to the Secretary of State in accordance with section 104(1) below shall include an application for such a condition to be applied").

The noble Lord said: My Lords, with this and subsequent amendments we move to Clause 95, which is concerned with any future disposals by an applicant landlord who has taken over from a public sector landlord. It is clearly important, as the Government recognised by inserting the clause in the Bill, that future disposals should be regulated by statute, because the whole basis upon which the transfers will take place is what is called the tenants' guarantee.

If the tenants' guarantee has no lasting value—in other words, it survives only the first applicant landlord who is free to dispose of the properties afterwards—tenants will have no assurance that their rights will be protected indefinitely. They will not vote for transfer in any ballot, however democratically or undemocratically it may be organised.

Amendment No. 171A is in effect a paving amendment for Amendment No. 199. Amendment No. 201 has been grouped with them. In speaking to Amendment No. 199 I should like to apologise for a misprint. The word "concurred" should of course be "concerned": the properties concerned shall remain available for letting".

We have been urging that no subsequent transfer of the properties should involve a loss of the rented accommodation which it is the Government's intention to preserve. I must call this a probing amendment even at Report stage because the Minister said what appeared to me to be two different things in Committee. First, at col. 657 of the Official Report for 10th October he said: The haste point that I am trying to get across is that these properties are for renting in the future". Then he said also at col. 657: It might be that instead of renting … it is agreed that he can dispose of two or three units". I do not quite know what the significance is of "two or three units". Then in col. 658 he said: I reaffirm that our intention is to make sure that those who take on the role of landlord …keep the property as rented property". We are on the same side about this. How are we going to secure it? That is the reason for putting down the amendment. I hope that the Minister will be able to give us a satisfactory reply.

Amendment No. 201 concerns a very much related subject. It is still necessary to reassure the tenants that they are not going into a new regime which could have a finite life and leave them totally unprotected after a period of time. We believe that it is essential that subsequent landlords after these disposals should either be the local authority—and we certainly do not insist on that—or approved landlords. In other words, we believe that the controls exercised by the housing association which we have been debating within the last half hour, with general agreement, should subsist not only for the first new landlord but for subsequent landlords. Anything less would simply mean that tenants who agree to these procedures could easily find themselves unprotected at the end of a finite period.

I know that the Minister will say that the number of future disposals will be limited. I hope so; let us all hope so. A continuous upset and continuing changes of landlord are to nobody's benefit—tenants' or landlords'. However it can and might happen and the Government have provided for it. We ask that the Government should provide for it properly. I beg to move.

5.30 p.m.

The Earl of Caithness

My Lords, I hope that the noble Lord, Lord Graham of Edmonton, is cherishing this moment. Not only was the last amendment one on which we were very close in principle but this is the fourth consecutive amendment on which we have been very close. Thus the moment that he is cherishing will last, I hope, a very long time. I must say that I have considerable sympathy with the general aims and intentions which underlie Amendments Nos. 171A and 199. We have said all along that landlords who acquire housing under tenants' choice should be committed in the long term to making it available for rent to those who need it at rents they can afford.

The first substantive provision of the tenants' guarantee is phrased in comparable terms. It is one of the criteria which the housing corporation will apply to would-be landlords under tenants' choice. I have rehearsed these arrangements for two reasons. First, to underline our genuine concern to ensure that this housing remains available for rent after disposal under tenants' choice. Secondly, to show your Lordships that we have already tackled the objective by other means.

However, I must say, even so, that I do not think that the Bill should fetter my right honourable friend's discretion in the way proposed. There might conceivably be instances, exceptional though they may prove to be in practice, where the "continued letting" condition under Amendments Nos. 171A and 199 no longer made sense in the particular circumstances of the case. There could be circumstances, for example, where the local supply of rented housing exceeded the demand, or where a disposal of untenanted property was proposed for the landlord to reinvest in new provision of a kind which better matched particular local housing need. There might even be—though I hope not—cases where my right honourable friend had to consider disposals of untenanted property or to accept that a landlord's financial viability would be put at risk. These are hypothetical cases, but we should not rule them out now.

We have, I suggest, already discussed the substance of Amendment No. 201 during our Committee consideration of this clause so I shall try to put my principal points more briefly. On Amendment No. 201, I repeat that I expect that the general policy of my right honourable friend would be to favour responsible and viable landlords who were committed to the tenant's guarantee. But I have in mind another hypothetical case where a proposal arises, in entirely reasonable circumstances and perhaps with the explicit support of the tenants, for a disposal of transferred property to a further new landlord. That landlord might be a registered housing association, subject to the supervision of the Housing Corporation and bound by the tenant's guarantee. But it might never have acquired or even intended to acquire property under tenant's choice. If so, approval under Clause 93 would arguably not be appropriate; and the Secretary of State could ensure equally effective safeguards for the tenants without it.

There is therefore no need to draw the net more tightly as the amendment would do in terms of "approved landlords". I know your Lordships would understand if I were to say that it is against the general tenor of Part IV if local authorities were to be enabled to reacquire property. Indeed, we have gone to the lengths we have to try and meet the very concerns that the noble Lord, Lord McIntosh of Haringey, has expressed, because we too are concerned about them.

Lord McIntosh of Haringey

My Lords, I know that the Minister wants what we want. I am far from convinced that the examples he has given are adequate to justify his rejection of our amendments. If he can tell me of any area of the country where there is an excess of rented property, then I shall be delighted to recommend people to move there. I do not think an excess exists anywhere in the country, unless it is simply the case that rents are beyond the reach of ordinary people in that area, but even that I doubt.

The argument about housing associations taking over as successor landlords has some validity. It could well be that it would be an unnecessary procedure for them to go to the Housing Corporation for approval in this way, although I cannot see that they would have any difficulty with it since they have already been approved as housing associations.

I accept that the Minister wants what we want I am sorry that he did not feel able to write into the Bill the more definite assurances which have been given. I am sorry that he has not taken up the offer that he made to the noble Lord, Lord Swinfen, at Committee stage to check on whether the clause needed technical amendments in order to deal with the question of whether there could be covenants which ran with the property and which could not be avoided by future purchasers. I am sorry I should have made this point when I first moved the amendment in order to give the noble Earl an opportunity to reply. I certainly do not expect him to reply to that now. On the basis that we are making small progress towards agreement about the means as well as the ends, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 172:

Page 73, line 30, at end insert ("; and (c) shall be accompanied by

1. (i) evidence of the applicant's participation in a pre-selection procedure as shall be prescribed by the Housing Corporation, and
2. (ii) evidence of the level of support the applicant received, such support not to be less than 40 per cent. of those voting in the pre-selection ballot, and
3. (iii) details of the level of support any other participants in the pre-selection procedure obtained.").

The noble Lord said: My Lords, with Amendment No. 172 we return in a sense to the argument that took place on the amendment moved by my noble friend Lord Carmichael. We talked about the evidence that would be required from an applicant at, I think it is called, the pre-selection stage—although that phrase does not occur anywhere on the face of the Bill—showing that a significant body of tenants supports the change. The Minister said in Committee on 10th October at col. 603 that there should be: a significant body of collective support … for the change". At cols. 661 and 662 he suggested that a large number of tenants—his phrase—could be 10 per cent. I would say "as little as 10 per cent.". We are raising this question because we want the Government to say more precisely than they have done so far what is mean by: a significant body of collective support", as expressed by the Minister at Committee stage.

This is also in a sense a probing amendment. I am not wedded to the figure of 40 per cent. any more than I think the Minister is wedded to the figure of 10 per cent. However we ought to reach agreement about what is meant by "a significant body" and, Parliament having expressed an opinion about the ends, it ought to express an opinion about the means. Parliament should define more precisely what is meant by a "significant body". The matter is of practical significance for applicants because, unless they can be sure of a significant body of support they will not want to go into a situation where they will come up against procedures which will inevitably be time consuming and expensive for them. It would also be undesirable for a local authority to be faced with such a challenge, and for the Housing Corporation to be faced with the expense and complication of issuing approval to an applicant.

The preselection procedure is important in order to short-cut the kinds of difficulties that would arise in the application procedure, if the preselection procedure is not adequate. I hope that the Minister will be able to be more precise as regards defining what a significant body of collective support is than he has been so far. I beg to move.

The Earl of Arran

My Lords, let us take each of the elements in the amendment of the noble Lord in turn. First, however, we should repeat the general point that we made in Committee that, although all potential applicants must be prepared as a condition of their approval to take part in a preliminary competition when requested to do so by the Housing Corporation, there will not be a competition in each and every case. Sometimes only one potential applicant, despite the best endeavours of the Housing Corporation, will be interested. Sometimes it will be so clear what the tenants want—where there is strong local pressure for a co-operative, for example—that a preliminary competition is not appropriate.

Turning to the first element of the amendment, the applicant's notice under Clause 95 will contain evidence of his approval by the Housing Corporation. Since agreement to take part in a preliminary competition when required to do so is to be a condition of approval in all cases, this will in itself be prime facie evidence that any such requirement has been met. If a landlord had any reason to doubt this, a telephone call to the Housing Corporation would, hopefully, resolve the matter in five minutes.

On the second element of the amendment, we have said that no applicant will get the go-ahead from the corporation to make an application unless he can demonstrate prior, "in-principle" support from 10 per cent. of the tenants. This does not necessarily imply a ballot as part of all preliminary competitions. That may sometimes happen, but whether it needs to or not is a matter for the Housing Corporation to decide. We have deliberately left it free to exercise its judgment on such matters in this informal preliminary stage, which calls for flexibility and good sense rather than hard and fast rules.

5.45 p.m.

Lord McIntosh of Haringey

My Lords, before the noble Earl leaves that point, I wish to ask him what he means by "in principle"?

The Earl of Arran

My Lords, "in principle" means what it says. It means that that is the principal point involved.

Lord McIntosh of Haringey

My Lords, the noble Earl means "principal", not "principle". I am delighted to have that confirmation.

The Earl of Arran

My Lords, I retract that. I mean "in principle". I must now continue with the brief. Ten per cent. is a reasonable initial hurdle, given, first, that the prospective applicant will have some way to go to present his case to the tenant; secondly, that there may have been several competing potential applicants in the preliminary competition; and, thirdly, that the tenants cannot yet have seen a binding offer of terms on which to judge. We also need to remember that it may take courage for tenants to put their heads above the parapet at this early and uncertain stage, even if, as will he the case, the identities of those doing so are made known only to the applicant and the Housing Corporation, and not to the landlord.

This arrangement, that I have just outlined, based on "in-principle" support from a proportion of eligible tenants is, in our view, preferable to the noble Lord's proposal for a hurdle based on a proportion of votes cast in a preliminary ballot. As I have explained, a ballot would not necessarily be needed or appropriate. Where an informal ballot did take place under Housing Corporation auspices, the 40 per cent. figure proposed would be meaningless in a two-horse race, where one prospective landlord would by definition receive a higher proportion of votes cast. In a close three-horse or four-horse race, by contrast, it could in theory rule out all the competitors even if 100 per cent. of the tenants had voted for one or other of them.

Turning finally to the third element of the amendment, we do not see why the landlord needs to have details of support obtained by unsuccessful competitors in the preliminary competition. The landlord will know, and can very readily check with the Housing Corporation, that the applicant who has served the notice which he has received has met all the relevant preliminary requirements. It only remains for the landlord to put the procedures into operation.

I hope that those explanations have been helpful. In the light of the explanations, I ask the noble Lord to withdraw his amendments.

Lord McIntosh of Haringey

My Lords, I am grateful for at least part of that reply. I accept that the intention in respect of subparagraph (i) of the amendment is clear, and that if the pre-selection procedure is a condition of approval by the Housing Corporation, that that meets that point. I suspect, although I shall have to read more carefully what the noble Earl has said, that that applies to subparagraph (iii) as well.

I understand the points that the noble Earl has made about ballots. But I am still in some difficulty as regards what is meant by the words "in principle". If the noble Earl means that this procedure is like signing a nomination form in a parliamentary or local election, which means that one is supporting a candidate but as the ballot is secret one can vote against that candidate later on, I can appreciate that that might make sense. But it would require a canvassing procedure which has not been fully explained.

The Government will have to give this matter further thought before they can justifiably think that they have solved the problem. However, on the basis of the assurances given about other parts of the amendment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 173 and 173ZA not moved.]

Lord McIntosh of Haringey moved Amendment No. 173A:

Page 73, line 30, at end insert— ("(1A) An application under subsection (1) above shall include details of provision for the appointment of an independent body to conduct and supervise the consultation process in accordance with section 101(3) below").

The noble Lord said: My Lords, I beg to move Amendment No. 173A and to speak to Amendments Nos. 186 and 187. These amendments give the Government an opportunity to confirm and justify what they were saying when we were debating voting procedures at the beginning of the afternoon.

The Minister said that the voting procedure would take place over a period of time and that there would be as much opportunity as possible to see that the voting procedures were fair and above board. I am paraphrasing the Minister's words; I shall not attempt to quote him. The Minister also said there would be pressure to have a high poll in the ballot and pressure to make good information available to those who were required to take part in the poll. I accept his sincerity in saying that. It would he even better if the Minister went on to agree with these amendments, which seek exactly the same objective as that which he set out in replying to my amendment on the voting system.

Amendment No. 173A is a paver for Amendment No. 186. That latter amendment refers to the form of question on the ballot paper. We agree entirely with what the Minister said this afternoon about making the ballot paper as simple as possible. At the same time it is necessary that the ballot paper should be clear. It should contain a statement of the options available to those consulted, including the option to remain with the landlord, and it should contain a clear statement of the consequences of the options for those consulted.

Since we have unfortunately gone a long way towards resolving the voting procedure, one way of doing that would be to say, "If you do not vote you cannot stay with the local authority". I understand that it is the Government's intention that that will be stated on the ballot paper. To that extent there is common ground. That is what has been done in the recent ballot in Rochford and I understand that it will be stated in the ballot in Gloucester involving voluntary transfers.

The ballot paper must certainly be simple. It must also be explicit. It must say what the options are and what the consequences of the options are. If that is not the case the doctrine of informed consent will not be fulfilled. I understand it to be the Government's intention that that doctrine should be fulfilled and it is certainly our intention.

Amendment No. 187 deals with the issue of independent tellers. The Minister has referred to that this afternoon. We agree that there should be independent tellers and we listened with care, but without commitment, to what he said about the role of the Electoral Reform Society. However, we believe—and this is where the amendment differs from the Government's position—that payment to the independent tellers should come from the Secretary of State rather than directly from the applicant (in other words from one side) in order to ensure their independence. The Secretary of State should then recover the payment from the applicant.

I should have thought that that was a principle which it would be difficult logically to deny. If one has independent tellers and independent supervision of a balloting procedure, the tellers should not be paid by one side, particularly if there is a dispute between one applicant and a local authority. Independence must be secured not only through the nature of the organisation and its approval by the Secretary of State but also through the organisation being paid by the Secretary of State and not by any one side in a dispute.

I hope that we are not too far apart on these amendments. I hope that the Government will feel that there is at least a kernel of good sense in what we propose. I beg to move.

The Earl of Caithness

My Lords, the noble Lord is right. Yet again there is very little between him and ourselves, in particular on the intentions underlying Amendment No. 186.

It is obviously essential that the tenants must have all the information they need to cast an informed vote when it comes to formal consultation. Obviously, that must include full information about the voting options. By that stage in the process I firmly believe that tenants and applicants will be anxious to work together towards the benefits that transfer will bring and that most tenants' concern will be to establish how they can get those benefits as quickly as possible. But it is also central to the safeguards provided under tenant's choice that those who want to stay with their existing landlords are clear as to how they should go about it and that the undecided clearly understand what the implications of abstaining, as well as of a vote either way, would be.

I believe, however, that the noble Lord has not chosen the best place for this information. The amendment would put it in the applicant's offer of terms to tenants, the form of which my right honourable friend would be able to control under Clause 101(1). I agree that we need to consider whether some reference to these matters should be included in the applicant's offer. That we shall do. But the main guidance surely needs to come in the ballot paper itself and the explanatory material about the process which accompanies it, as distinct from the applicant's offer. The form of that balloting material will be prescribed by my right honourable friend not under Clause 101 but under Clause 102(2). It will be sent to the tenants not by the applicant but by the indepedent teller, who, I would remind the House, will operate under contractual terms which the Housing Corporation intends to regulate very closely, in consultation with ourselves, through its approval powers in Clause 93. I can give the noble Lord a categorical assurance that the material provided under Clause 102(2) will contain the statements proposed in his amendment.

Turning to Amendment No. 187, I entirely agree that we must have an independent element in the consultation. That is why my predecessor, in another place, gave the commitment that there would be an independent teller. That teller, who will be paid for by the applicant, will be provided in order to conduct the ballot and to collect and count the votes. I do not think, and I take it that nothing in the noble Lord's amendment is intended to imply, that he should put the applicant's offer of terms to tenants. That is clearly a job for the applicant himself, not the independent teller.

I have already explained how we and the Housing Corporation intend to see that the terms of the contract between applicant and tenants will be set as a condition of the applicant's approval. I do not believe that anything other than bureaucracy will be added to the picture by making the Secretary of State rather than the applicant the other contracting party with the teller, as the noble Lord's amendment proposes.

I part company from the noble Lord also on the question of who should supervise the consultation. Effective supervision of the consultation procedure as a whole will rest with the Housing Corporation. It will be the corporation, not the Secretary of State, that would-he independent tellers will have to satisfy of their capabilities and bona fides. It will be the corporation, not the Secretary of State, which will also have the job of vetting the offer of terms that the applicant makes to tenants for consistency with both legal requirements and the terms of the applicant's approval. I have every confidence in the corporation's ability to fulfil that role efficiently and effectively without the detailed involvement of my right honourable friend.

Baroness Fisher of Rednal

My Lords, before the noble Earl sits down, can he say what qualifications are needed to be a teller?

The Earl of Caithness

My Lords, the main qualification of the teller will be the independence that will be required by the Housing Corporation. The proposed independent teller will have to satisfy the very strict criteria which the Housing Corporation will lay down in order to be satisfied that the teller will be able to complete the contract which he will have to accept from the Housing Corporation. The teller will not be able to make up his own contract. The Housing Corporation will have to vet that person. It will he more than one person; tellers will have to be of the quality of the Electoral Reform Society.

Baroness Fisher of Rednal

My Lords, before the noble Earl sits down again I should like to ask another question. Suppose I were a very good headmistress who had just retired and who joined up with two male colleagues and we believed that we were competent to be tellers. Could we apply to the Housing Corporation to become tellers? With a very good background and an understanding of the requirements; would we be allowed to act as tellers? I should like to know who the tellers will be.

The Earl of Caithness

My Lords, yes. The noble Baroness would certainly be able to apply, but I could not guarantee that she would be accepted by the Housing Corporation.

Lord McIntosh of Haringey

My Lords, the Minister has given a very interesting and complex answer which deserves close study. On the question of the ballot itself, as a market researcher who has been designing questionnaires for 30 years, I would point out to him that it is no good having a simple ballot if the ballot paper refers to all kinds of notes on a separate piece of paper. No one reads them. The argument has to be on the face of the ballot paper if it is to be read. I know that it is nice to keep it simple, but one must put the options and give the warnings on a single piece of paper which people will read. However, I am sure that there are people in the Housing Corporation who will understand that point and will realise that forms with footnotes are filled in badly.

I believe that we must still disagree about the question of who should pay the tellers. At the very least I think that it will cause suspicion if tellers are paid directly by the applicants. However, I have listened carefully to what the Minister said about the form of contract and I do not believe that we are far enough apart to justify pressing the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 p.m.

Lord Graham of Edmonton moved Amendment No. 173B:

Page 74, line 3, at end insert— ("(3A) An application under subsection (1) above shall specify details of provision to he made by the applicant under section 101(3) below to ensure that information shall be made available to tenants in relevant languages spoken by minority ethnic groups").

The noble Lord said: My Lords, in moving Amendment No. 173B I should like to speak also to Amendment No. 188. With this amendment we are making a simple request. We ask the Minister to acknowledge that if he wants to obtain the maximum turnout possible—never mind 50 per cent.—he needs to take account of the ethnic make-up of a council estate. All the information that can be made available should be provided in plain English—I shall not labour that point again—and, in relevant languages spoken by minority ethnic groups represented among qualifying tenants".

The Minister is well aware that in general Asian people are not fluent in English. A survey undertaken by the Policy Studies Institute in 1982 entitled Black and White Britain has some interesting points to make on that subject. I shall not weary the House with statistics but certainly if our aim is to encourage more council tenants from the ethnic minorities to participate, the words in the amendment need to be written on the face of the Bill. I beg to move.

Lord Hylton

My Lords, I should like very briefly to support this amendment. One understands the difficulty experienced by immigrant groups in speaking and understanding "normal" English but when one gets into the technicalities of housing jargon, which speaks of succession rights and so on, then I believe they need a crib in their own language.

The Earl of Arran

My Lords, we understand the points made by the noble Lord, Lord Graham. Applicants will be obliged, by regulations under Clause 101, supplemented as necessary by conditions and undertakings attached to their approval under Clause 93, to ensure that their formal offer is communicated in a comprehensible form to all tenants eligible to be consulted.

Applicants will therefore be required, first, to use plain English in all written material; secondly, where there is a significant, foreseeable demand from tenants to whom written material in English is unlikely to be readily comprehensible, to provide material in languages other than English; and in audio or braille; and thirdly to provide a contact address and telephone number for queries about the applicant himself or about the tenancy terms being offered.

Applicants will be required to retain an independent teller. The teller's contract with the applicant, the contents of which will be determined through the undertakings which the Housing Corporation will be able to require as conditions of approval, will require him to seek to call back to enquire into the reasons for any initial non-response from tenants entitled to vote. Moreover, where it comes to his notice that a tenant's ability to decide on and cast a vote is affected by physical or other handicap or disability, linguistic difficulty or other special factors, he is to provide such assistance in understanding the ballot material as is reasonably possible.

We hope that this will show the noble Lord that we are committed to making the consultation work both effectively and fairly, and I hope therefore that he will withdraw his amendments.

Lord Graham of Edmonton

My Lords, I have to tell the House that the Minister has done it again—he has satisfied me. I am very grateful. He has pointed out quite fairly and reasonably that what we sought to write into the Bill was already in the minds of the Minister and the Housing Corporation in respect of the procedures that he intends to lay down. I am sure that those outside the House who guide us in these matters will understand the wisdom of the Minister's remarks. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton moved Amendment No. 173C:

Page 74, line 3, at end insert— ("(3A) Any application under subsection (1) above shall include an undertaking that the applicant would consult tenants affected by any proposed future disposal, in respect of which consent under section 104(2) below would be required, on the matter").

The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendment No. 200. The background to this amendment is that currently there are no provisions for tenants to be consulted by their new landlord when a future disposal is contemplated. In Committee the noble Earl, Lord Caithness, rejected an amendment tabled by this side of the Chamber by reference to the need for the Secretary of State's consent to be given. As recorded in the Official Report of 10th October at col. 705, he said that it would be wrong for him to fetter the Secretary of State's discretion. That is somewhat puzzling because under the 1985 Housing Act a local authority needs such consent prior to a voluntary disposal. The local authority is required to go through a consultation process with its tenants and the Secretary of State shall not give his consent if it appears to him that a majority of tenants does not wish the disposal to proceed.

When the Government wanted to change the law in 1985, they did not argue that it was fettering the discretion of the Secretary of State. Why hide behind that argument and put it forward as a reason now? I beg to move.

The Earl of Caithness

My Lords, I must begin yet again by saying that we have considerable sympathy with the aims and intentions of the noble Lord's approach to the question of my right honourable friend's consent to disposals under Clause 104. Landlords who take over housing under tenant's choice must be committed in the long term to the provisions of the tenant's guarantee, including the presumption that they will continue to make housing available for rent in the long term to those who need it at rents that the tenants can afford.

As the noble Lord reminded us, I said in Committee that it would be wrong to fetter my right honourable friend's discretion unduly. We must also avoid making the consent arrangements more bureaucratic than they need be by an array of detailed controls. However, I can tell the noble Lord very clearly that I find it difficult to envisage circumstances in which, faced with an application for consent to dispose of tenanted transferred housing, my right honourable friend would not want information about the applicant's consultation of tenants and their responses to be among the relevant information before him. After all, protecting tenants' interests is precisely what Clause 104 is all about.

Lord Graham of Edmonton

My Lords, I am grateful to the Minister for that reply. He made reference to the tenants' guarantee, and I understand that consultation is taking place at the moment with associations and authorities as to what should be contained in it. Can the Minister help by telling us whether the result of that consultation will be available to the House before the Bill leaves Parliament? There is very little time of course; but it may be possible for queries to be raised either in this House or another place. We only have until next week; in two or three weeks from now the Bill will have received Royal Assent and become an Act. The contents of the guarantee are certainly intriguing and, I believe, would be helpful.

I accept what the Minister said about the points I raised. I am perfectly happy to withdraw this amendment, although the Minister will no doubt appreciate that our view is somewhat jaundiced. He seems to be making flesh of one and fowl of the other argument as to whether it suits the Secretary of State to interfere or not. I should be grateful if the Minister could tell us something about the tenants' guarantee consultations.

The Earl of Caithness

My Lords, the tenants' guarantee consultations are being undertaken by the Housing Corporation and not by the department. At this stage of the proceedings I am unable to bring the noble Lord fully up to date without having the up-to-date information from the Housing Corporation. But I want to help the noble Lord. Let me consider whether we may be able to clarify on the face of the Bill by an amendment at a later stage the possibility that my right honourable friend will want this information when considering an application under Clause 104. The noble Lord has a point which I should like to have another look at.

Lord Graham of Edmonton

My Lords, my sense tells me to say no more. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 96 [Information etc. for applicant]:

[Amendment No. 174 not moved.]

The Earl of Caithness moved Amenmdment No. 175:

Page 74, leave out lines 26 and 27 and insert— ("(b) which, on a proposed sale by a willing vendor to a willing purchaser of the the property proposed to be acquired, the landlord, as vendor, would be expected to make available to the purchaser (whether at or before contract or completion).").

The noble Earl said: My Lords, this amendment relates to the provisions in Clause 96(2) and (3)(a) which require the existing landlord to give the applicant information which is reasonably required for the pursuit of the application. As drafted, Clause 96(3)(b) exempts from this requirement any documents disclosure of which is precluded by any duty owed by the landlord. There was some discussion of this point in another place, and in particular about whether this reference to a duty would lead to a conflict between the general safeguards of the Data Protection Act, 1984, (which prevents personal data being released except under certain circumstances) and the specific duty in Clause 96(3)(a).

This amendment clarifies the relationship between this section of the Bill and the Data Protection Act by deleting the reference to "duty". It substitutes a new subsection (3)(b) in Clause 96 which further defines what documents may be reasonably required. The documents are basically those which would normally be made available in a conveyance by a willing vendor to a willing purchaser. This ensures that the requirement to disclose documents which satisfy Clause 96(3)(a) is not overridden by certain requirements as to disclosure under the Data Protection Act.

Further concern was also expressed in another place about just what sort of information would be caught by the requirement to disclose documents. For example, my right honourable friend was asked whether the rent arrears of individual tenants would he disclosed. I am now in a position to answer that. Such information would indeed be subject to disclosure since it is the sort of fact which would normally be made available by a willing vendor to a willing purchaser.

That leads me on to a further point which was again raised in another place. This is to what extent any information gathered under Clause 96 would be protected against disclosure by the applicant to unauthorised people. We have given this matter considerable thought. Originally we contemplated placing a statutory duty on the applicant not to disclose any personal information about the tenants which he received by virtue of this clause. However, as there is no comparable protection for tenants of other landlords in a comparable situation, we were advised that it would be difficult to create an offence that would carry a real penalty for the offender. We have now come to the view that the best way of dealing with this is to direct the Housing Corporation to require, as one of the conditions of its approval, that all approved landlords must give an undertaking to them not to disclose any information acquired under Part IV to any person who does not require it for the pursuit of the application to which it relates. I think this meets the case very well. The effect of this will be that a tenant's rent arrears might reasonably be disclosed to an applicant. But the applicant will be prevented from passing that information to any person who does not require it in order to pursue the application.

I hope your Lordships will agree with me that this is the best approach, and will approve the amendment. I beg to move.

Lord McIntosh of Haringey

My Lords, I am sorry, but I find this aspect very worrying. I fear that it could be a step backwards. I appreciate that it is necessary for an applicant to know the total extent of rent arrears because that is a matter that affects the purchase price and the applicant's judgment as to the possibility of effective management of the properties. I see that it could be desirable, for example, to provide statistical information which said that there are so many tenants of whom so many are in arrears of under three months, under six months, over a year, and so on.

However, why should individual rent arrears be of any significance to the applicant before the deal goes through? I cannot see why that is necessary, or even helpful. The reasons for arrears are varied. If it is through plain neglect by the tenant it requires one particular form of action in order to achieve recovery. If it is through late payment of housing benefit or the breakup of the family it requires different action to achieve recovery. I therefore do not consider it helpful to provide such information.

I do not like the idea that the personal information on these arrears—because there are notes on the files of local authorities about why tenants are in arrears—should also be available to the applicant. I hope that in his reply the noble Earl can reassure me that those provisions will not affect the individual tenant. I can see that the information has to go to the applicant when the application has been approved. But why should it go before it is approved? Why such information should be given before tenants vote—they may subsequently vote to stay with the local authority—is quite beyond me. I find this point extremely worrying.

Lord Trafford

My Lords, I cannot understand part of the noble Lord's argument. If one were making an application one would wish to know not only the statistical distribution of arrears of rent but the types of arrears of rent that might arise. Under these circumstances, the application or the intentions might be changed. In other words, the information might influence the written intentions of the applicant. It does not seem unreasonable to know what one is likely to be bidding for.

6.15 p.m.

Lord McIntosh of Haringey

My Lords, the noble Lord, Lord Trafford, is helping to make my case. Indeed, it is necessary to know why arrears occur. However, this could be provided in statistical or anonymous form, whereas the amendment provides for the details, tenant by tenant, to be provided. For the life of me I cannot see why that is either necessary or helpful. It could be misleading. The applicant needs to know the numbers of tenants in arrears, the extent of the arrears, and the reasons for the arrears—the noble Lord, Lord Trafford, is quite right about that—but not in a manner that identifies individual tenants.

The Earl of Caithness

My Lords, I am grateful to my noble friend Lord Trafford because he put it in the right way. I do not think, with respect, that he supported the assertions of the noble Lord, Lord McIntosh of Haringey, or sought to bolster up his arguments. My noble friend supported the line that I was taking.

We are trying to achieve a situation where the information that would normally pass between a willing vendor and a willing purchaser should be made available in these circumstances. Perhaps I may draw the attention of the noble Lord to something with which I am sure he is familiar: it is the general tenancy inquiries in the printed form, Conveyancing 291. Under the subheading "Disputes", (f)(ii) states: Is the tenant now or has he previously been in arrear in paying rent? That is between a willing vendor and a willing purchaser. Thus we are trying to replicate that under the terms of the amendment. The potential applicant needs to know not only what arrears add up to, but where and by whom they have been accrued. As my noble friend Lord Trafford so rightly said, that will affect both his commercial judgment and management plans. But the clause would not require the landlord to disclose sensitive or confidential information about the tenant's circumstances. We can legitimately divide the two. I agree with the noble Lord, Lord McIntosh of Haringey, that it would be wrong to disclose such sensitive, confidential and personal information. That is not what we seek to achieve.

On Question, amendment agreed to.

Clause 98 [Determination of purchase price]:

The Earl of Caithness moved Amendment No. 175A:

Page 75, line 40, leave out ("section 99(3)") and insert ("sections 99(3) and 102(1)").

The noble Earl said: My Lords, with the leave of the House, I shall speak also to Amendments Nos. 175B, 188A, 193A and 194A.

Although these amendments operate mainly on Clause 102, which contains the majority provisions we debated earlier, these amendments are not about majorities or voting. They are about what is sometimes called a clawback arrangement. This is an arrangement which is often adopted in large-scale disposals of tenanted stock. The point is that sales may take place following transfer. However, because of the tenants' guarantee and my right honourable friend's powers to control disposals they will virtually always be right-to-buy sales in the case of property transferred under tenants' choice.

It is important to stress that because the right to buy that a secure tenant has under the existing legislation will be an asset that he takes with him under the tenants' right to buy. Even an applicant who is successful in the ballot and has gone through all the procedures could still find that he may have a tenant who would exercise the right to buy. A valuer would normally take the prospect of such future receipts into account in valuing the property and the effect would normally be to increase the price.

Clawback is an arrangement under which these hope values—if I may use that term—can be left out of account at the valuation stage. Instead, they are dealt with later on when the hope value is actually realised. What happens is that the buyer—in this case the applicant—covenants to pay a proportion of the receipts he gets from future sales to the seller—in this case the public sector landlord. That might suit both parties. It may suit the applicant because it means that he does not have to pay in advance resources he can perhaps ill spare to reflect the value of sales in the future. It may suit the public sector landlord because what he receives in respect of the future sales is based on the numbers of sales that actually happen and not on an estimate at the time of sale. He can be sure of getting his due, as it were.

These amendments allow my right honourable friend to make regulations, subject to the negative resolution procedure, governing how such a process would work under tenants' choice. The applicant is able to opt to enter into a covenant which would be prescribed at the point when he serves his notice of intention to proceed under Clause 102. This is the appropriate place because it is the point at which it will be known how many dwellings included in the original proposal are to be excluded or leased-back to the landlord. This obviously affects the amount of hope value that the covenant would involve in each particular case. The adjustment to the predetermined purchase price, we propose, will be a job for the district valuer.

These are amendments which are designed to make the practical operation of tenants' choice smoother and more effective. The arrangements they provide could be helpful both to the applicant and the landlord. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 175B:

Page 76, line I, leave out ("section 99(3)") and insert ("sections 99(3) and 102(1)").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 176:

Page 76, line 10, leave out from ("were") to end of line I I and insert ("persons who on that date either were approved under section 93 above or fulfilled the criteria for approval established under subsection (3) of that section").

The noble Earl said: My Lords, I also speak through necessity to Amendments Nos. 177 and 178, if the noble Lord, Lord McIntosh of Haringey, will allow me to do so. I am grateful for his acquiescence.

I am sure that your Lordships will recall from our discussions during Committee the reasons why Clause 98 provides for the valuation of property under tenants' choice to take place at market value subject to tenancy. In essence these come down to the fact that the acquiring bodies will be subject to commercial disciplines and pressures and so should be able to start their ownership of such property on a commercial basis.

However, we also recognise that there would be special constraints on these bodies; namely the constraint your Lordships have approved in agreeing to Clause 93—approval of landlords by the Housing Corporation. To mirror those constraints, Clause 98 (2) imposes a number of assumptions on a valuation. In particular, paragraph (c) requires the valuer to imagine a competing market of all the persons approved by the corporation at the date of the application.

In responding to an amendment moved in Committee by the noble Lord, Lord Graham of Edmonton, which would have extended the number of bidders the valuer would have to consider, I said that I was not entirely sure of the drafting of paragraph (c). I am pleased to say that after further consideration I agree that the noble Lord did indeed have a point. The market could in certain circumstances be too narrow to produce a fair price. I have therefore brought forward Amendment No. 176, which would extend the definition of the "only bidders in the market" to include not only those landlords actually approved by the Housing Corporation under Clause 93 on the date the particular application was made but also those other persons who fulfilled the criteria for approval established by the corporation under subsection (3). I hope that achieves the effect for which the noble Lord was striving.

Amendment No. 178 in the name of the noble Lord, Lord McIntosh of Haringey, would, however, remove altogether another and very important assumption, namely that the applicant would within a reasonable time carry out works which are reasonably required to put the buildings included in the acquisition into the state of repair required by the landlord's repairing obligations. We could not possibly agree to the removal of that assumption for two reasons. First, if a landlord has indeed fallen down on its legal obligations, it, not the applicant, should bear the resulting costs. The financial liability should remain with the body legally responsible for it.

Secondly, and more important, unless tenants' choice applicants are insulated against that liability, they will not be in a position to help the people at the centre of this policy—the tenants. Those tenants will currently be suffering from the poor state of repair. Applicants will want to be able to help them but will have to have the financial margin to do so. If this amendment were approved, it would make it very unlikely that applicants would have that margin. Applicants would then not buy rundown housing.

In effect, Amendment No. 177 would disfranchise from tenants' choice those tenants most in need of its advantages. Amendment No. 178 would require that, irrespective of the effect of all other provisions which it would leave intact, the price should always be a positive sum.

I must say, with the greatest respect to the noble Lord, that we gave a good airing in Committee to both the subject of negative valuations and their implication that the public sector landlord should in the relevant circumstances make a payment to the applicant who was taking off his hands a net financial liability. I trust that your Lordships will allow me therefore to be somewhat briefer on this occasion in opposing Amendment No. 178, which would rule out such payments also known as "dowries"—which are provided for in this part of this Bill under the term "disposal costs" as distinct from the "prices" which would arise under normal conditions.

As Clause 98 makes clear, the abnormal conditions which would bring about a negative valuation relate to the existing landlord's own legal obligations and to its failure to discharge them, in particular by failing to give to the tenants concerned the repairs service for which they were in part paying their rent. It must follow that the landlord should face up to the direct financial consequences of that failure.

It will undoubtedly be a hard lesson for such a landlord, but we decided to bring in tenants' choice in order to open up councils to competition from other landlords and so to gain for all tenants value for the money they pay over by way of rent. I believe that Amendment No. 178 would defeat that object in precisely those cases where the means to achieve it is most needed. It is for those reasons that I cannot commend the amendment of the noble Lord, Lord McIntosh of Haringey, but I hope that your Lordships will be able to agree my amendment, Amendment No. 176. I beg to move.

Lord McIntosh of Haringey

My Lords, I am grateful to the Minister for his explanation of Amendment No. 176. I confess that I had not read it in that light as being a concession to my noble friend Lord Graham. I was puzzled about why the subsection is more widely drafted than originally, but I shall read carefully what he has said and hope that enlightenment will come to me in due course.

I am bound by the grouping to speak also to Amendments Nos. 177 and 178 which are in my name. Amendment No. 177 seems to us to be a matter of good business practice more than anything else. if we take the example of a private sale of a property, the vendor puts a price of £80,000 on the market and the purchaser agrees to accept that price, subject to survey. The surveyor may then say that £10,000 worth of work desperately needs to be done before he can recommend the house for a mortgage. The purchaser may then say that he will pay only £70,000 and that seems to be reasonable. Depending on the conditions of the market, that may or may not work. It may prove that £80,000 is a realistic figure but at least the cost of the repairs is being taken into account in the valuation. I cannot see that happening here. A price is reached by agreement between two people and not one vendor and a range of possible purchasers. After that has been done the cost of repairs is subtracted. That appears to be counting the cost of repairs twice and we can see no justification for it.

As regards Amendment No. 178, we raised the matter because of the support which we were given by the noble Lord, Lord Renton, who, I am sorry to see, is not in his place. The noble Lord did not think that it was right that a public sector landlord should part with land on which houses might be built without receiving a proper consideration. He suggested that the district auditor may have something to say if the consideration was not adequate. He did not receive a satisfactory answer from the Government about that matter. Surely the Government must receive an adequate consideration. The district auditor must be concerned if there is any question of them receiving less than an adequate consideration for the property. I do not believe that it would be appropriate for me to drag the Westminster City Council into the issue but we know that there will be continuing disputes if there are suggestions anywhere that local authorities are disposing of their assets for less than their real worth.

If there is to be a dowry—a negative payment for the property—who will finance that? Will the other local authority tenants finance it through higher rents in order to balance the housing account? Will the Government finance it through grant? The issue is far from clear and the Minister has not clarified it in response to my amendment.

We shall not oppose the government amendment but I believe that the House should give serious consideration to our amendment.

6.30 p.m.

Lord Hylton

My Lords, I am, to say the least, surprised by the contents of Amendments Nos. 177 and 178 and by the explanation which the noble Lord has given in speaking to them. We must envisage the strong possibility of situations arising where properties will have a negative value. I say that, first, because of Clause 98(2)(d), which provides the obligation to put them into a reasonable state of repair; secondly, because there may be massive rent arrears which will deter applicants from submitting bids of any size; and thirdly, because in a number of situations it is likely that one will be faced with only one effective bidder.

When speaking to previous amendments the noble Earl said that that would be so. It may be that the effect of the Government's Amendment No. 176 is to have in the background a larger pool of possible applicants. Nevertheless, they may do nothing; they may not come forward with bids and there may be only one bidder. Therefore valuations will be depressed. There are three factors which could depress the value below zero, but how a negative value will be achieved I do not know. It is an issue that one must face and it arose in our debates on the comparable Housing (Scotland) Bill. I believe that the noble Lord, Lord Carmichael, made such points and it may be that there has been insufficient liaison on the Opposition Front Bench.

The Earl of Caithness

My Lords, with the leave of the House, I should like to take up a couple of points. I may have read the intervention of my noble friend Lord Renton (Official Report, 10/10/88; cols. 636 and 637) rather differently from the noble Lord, Lord McIntosh of Haringey. I understood my noble friend to say that he would be surprised if a public sector landlord would part with houses for less than a proper consideration. I agree with him because the proper consideration may still be a negative value. It would still be the proper consideration although it might not be a plus sign.

With due respect, I believe that the noble Lord, Lord Hylton, misunderstands this section of the Bill considerably. The point of the Government's amendment is that, although there may be only one bidder, the price set by the valuer will be affected in a detrimental way. If one is instructing the valuer and saying, "There may be only one bidder but, in order to value the property, you must assume there is competition and a range of bidders", the value of the property goes up.

On Question, amendment agreed to.

[Amendments Nos. 177 and 178 not moved.]

Lord Dean of Beswick moved Amendment No. 179:

Page 76, line 38, at end insert— ("(7) In the event that the purchase price payable to the landlord is less than the outstanding debt on the dwellings concerned, the Secretary of State shall re-imburse the landlord for any loss by way of a Capital Grant to redeem the debt.").

The noble Lord said: My Lords, I beg to move Amendment No. 179. Its purpose is to ensure that if the price does not cover the outstanding debt a grant is paid to the local authority. We dealt with this facet of the Bill thoroughly in Committee. However, without full cash reimbursement, debt charges will stay on the housing revenue account and be borne by the remaining tenants. It should be noted that it will not be the rate or poll tax payer but the community at large because the Government's proposals for housing finance promise to outlaw subsidies to housing from the rates. That can only mean that the housing revenue accounts must bear the full revenue costs.

In debate the Minister referred once again to the review of subsidy. At col. 679 of the Official Report for 10th October he foresaw: a measure of subsidy continuing for those local authorities that have continuing loan charges". He stated that he hoped to announce the outcome of his review of subsidy. We ask, when? Surely it must be before the Bill leaves Parliament. We are trying to seek from the Government a categoric assurance that tenants and local authorities will not lose out.

I do not wish to spend a great deal of time on the amendment because the subject was fully explained in Committee. However, I am referring to people who will remain in council houses and who, since 1979, have had to bear increases in rent of 250 per cent. No one can take the view that council house tenants are now in any way a protected species living on huge subsidies provided by other sections of the community. The right honourable Michael Heseltine, when Secretary of State for the Environment, set the procedure in motion, although he has since had a change of heart. I indicated some of the areas in the country where the debts are tremendous. People who had little or no part in accumulating the debts in such authorities could find themselves saddled with enormous debts incurred by people in council houses.

I should like to press the Minister to give an assurance that the burdens need not be borne by remaining council house tenants. I am sure that all noble Lords will agree that an increase in rent of over 250 per cent. in 10 years indicates that those tenants have borne the burdens in those areas and they ought not to have done so.

Baroness Blatch

My Lords, I hope that the Minister will not succumb to this amendment. Again, it seems to me that there are a variety of reasons why this situation should come about. One is mismanagement of its stock by the local authority. It seems to me quite wrong that if the particular development does not command a market price which is comparable to its value, and therefore leaves the local authority either in a more favourable financial position or relieving it of its obligation to continue to spend, the Government should pick up the negative bill. For that reason, I hope that the Government will not be persuaded automatically to pick up what may well be a deficit for the local authority.

The Earl of Caithness

My Lords, I am grateful to my noble friend Lady Blatch for what she has said. She has put her finger absolutely on the true reasons why it is difficult to accept the noble Lord's amendment. I do not believe that a 100 per cent. capital grant is the right way to assist authorities who have outstanding debts following the transfer of stock. As I have said, I think the case against it is clear and my noble friend has made it so.

There is another point. I ask your Lordships: from the moment such a rule was announced, what would be the incentive for a local authority to do anything to maintain the value of its stock? Surely it would have no encouragement to do so because it would be confident in the assurance that the financial consequences which it was letting itself and its tenants in for would be met solely by the Exchequer, and that cannot be right.

I should like to be as helpful as I can to the noble Lord, Lord Dean of Beswick, about the review of the subsidy system. I cannot tell him any more than I told him in Committee. I hope to make an announcement shortly about our review of the system and can confirm that we shall be consulting local housing associations on whatever changes we propose.

Lord Dean of Beswick

My Lords, I am rather surprised at the obvious abysmal ignorance of the noble Baroness, Lady Blatch, as to what I was really talking about. I am not talking about buttering up local authorities. The noble Baroness makes the mistake of equating council house tenants with local authorities.

The Government have made it quite clear that eventually they will outlaw rate poundage contributions and some housing revenue accounts are now subventing towards keeping rates low in some areas. I was not making a point about local authorities but about their tenants. Is the Minister saying this? For a person who has been just above the level at which he could receive any housing benefit, who has always had to pay a fully economical rent as determined by the local authority and who has done that religiously, when property is sold and there is a deficit in other areas, his rent will have to be put up to meet that deficit? I am talking about individual tenants and not the local body as a corporate body. We are dealing with individual tenants.

I regret to say that the Minister has not given me any reason to believe that it will be other than those individuals who once again have to pick up the bill for debts that they and their families have in no way incurred. It seems to me a very strange way of doing things. In this case the Government cannot be said to have been even-handed. I hope that the Minister might briefly respond to say that he has taken that point on board and that it will receive the utmost consideration by the Government. If not, in my opinion, it will have been the most unfair act that any government have levelled against council house tenants in a long time. It will underwrite what some of us have suspected for a long time: there are powers in the Government who seem to be involved in a continuing vendetta against council house tenants—even those who have been brave enough to pay their rents.

Baroness Blatch

My Lords, before the noble Lord sits down, I should say that it may be that I misunderstood him the first time round. However, I thought he said that the Government should compensate local authorities if there is a negative situation and the local authority is left with a financial burden after the transfer.

6.45 p.m.

Lord Dean of Beswick

My Lords, we were brought to order earlier in the day by the Leader of the House who told us the rules of debate on Report, and therefore I have no need to reply to the noble Baroness. If the local authorities have to find the money then the Government are trying to ensure that they can only find it in one way; namely, by increasing the rents of the remaining tenants as the Bill stands. That is the argument. I simply ask the Minister to give the most serious consideration to ensuring that that group of people are not once again unfairly punished.

The Earl of Caithness

My Lords, I believe that my noble friend Lady Blatch was entitled to explain, after the remarks made against her by the noble Lord, Lord Dean of Beswick, why she made the intervention. I believe that was perfectly in order, and with the leave of the House I shall respond to the noble Lord, Lord Dean of Beswick, as he has asked me to do.

Of course, we are fully aware of the point he has made about council house tenants. The whole purpose of this section of the Bill is to allow tenants to get out of local authorities from where they have been longing to get out for some years.

Lord Dean of Beswick

My Lords, I shall withdraw the amendment but I do not believe that the Minister could have given me a more unhelpful and negative answer.

Amendment, by leave, withdrawn.

Clause 99 [Tenants continuing as tenants of landlord]:

[Amendment No. 180 not moved.]

Lord Ross of Newport moved Amendment No. 181:

Page 77, line 8, leave out from ("section") to end of line 9 and insert ("does not give notice in such manner as shall be prescribed of his wish to transfer to the applicant.").

The noble Lord said: We are back on the issue on which we voted earlier this afternoon regarding the way of voting and tenants' choice, and the tenants who are being asked to opt out of the management of a local authority to a private landlord.

Like Robert the Bruce—if I may be so bold to say so with a Scotsman present—I was always taught that if you do not succeed you should try, try, try again. I believe that this is the last chance that we have in this Bill to try to write into it a little common sense as regards the voting procedure. As your Lordships will remember on 10th October, and again this afternoon, the system devised by the Government says that tenants who do not actually vote and who abstain will be considered to have voted "yes". I accept that the Minister has gone a little way in that there now have to vote 50 per cent. of those eligible to vote. However, it still remains that if one happens to be in hospital, abroad, or if there has been a family breakdown and for some reason or other one is not occupying the house, cannot be contacted and does not vote then one is considered to have voted in favour.

The amendment says that those who do not vote stay under the auspices of the local authority. There has to be a positive vote in favour of changing the management for that to take place. That is much simpler than the way the Government have it. If one does not vote, stays silent and abstains then one stays under the current administration.

I believe that that is simple and will be understood by the tenants, the general public and this country. I do not believe that this House has lived up to its reputation, as I feel about it, as the conscience of the country. I believe that many people on the Government Benches are uneasy about the way they have voted and I am giving them a last chance. I believe that this is the right way to go about it. I beg to move.

Lord McIntosh of Haringey

My Lords, I should like to support the amendment of the noble Lord, Lord Ross. In doing so, I should like to remind the House of the many and varied reasons which could prevent tenants from voting. Reference has already been made to the principle of informed consent. I think it is important that we should apply this all the way through the process which is being introduced by the Government.

There are of course council tenants who take no interest in the world outside their front-doors and who do not notice what is happening, despite the procedures which the Minister has described as constituting consultation. It is difficult not to think that those who pay no attention whatsoever to the outside world have a certain element of responsibility for what happens to them, and I would not deny that. I do not think that persistent non-voters—those who do not vote in local or parliamentary elections and do not take any part in public life—can wholeheartedly complain if they find that things take place around them which are not always to their advantage.

However, there are going to be a very significant number of tenants who are simply unable to vote in a consultation process of this kind. There are at any one time tenants who are in hospital or who are incapacitated in one way or another; and despite all that has been said, helpfully, about the use of languages other than English, Braille, audio and so on, there will always be those who may not be able to vote. Also there will after all be tenants in prison; let us not run away from that. There will be many occasions when tenants, for reasons which would satisfy even the supervisor of Australian elections (and I would remind the House that voting is compulsory in Australia), will not be able to vote. Is it just that these tenants should be dragged along by the results of such a vote so far as their individual interests are concerned?

I think that the noble Lord, Lord Ross, has put the case clearly and succinctly: it is a different point from the one that we argued earlier today about the voting procedure. However, I think it is important that we should not manhandle tenants into a situation which they do not wish for and which they have played no part in bringing about. I support the amendment.

The Earl of Caithness

My Lords, we now come to this very important amendment which I touched on earlier and to which I had to speak inevitably when putting to your Lordships the argument on Amendment No. 169A. The no majority against test in Clause 102(2) and the leaseback and exclusion provisions in Clause 99 which the noble Lord's Amendment No. 181 would reverse are there for a good reason. That reason goes back to the fundamental purposes for which we are proposing tenants' choice. We are proposing it to give new and genuine choice and opportunities to tenants who want to stay in their present homes but under a change of management, whether because their existing landlord is falling down on the job or for any other reason.

This new choice is desirable because of the chance it offers tenants to escape from inadequate management where it exists; because of the advantages it will bring to transferring tenants in the way of better services and a greater say in the running of their own houses; and because of the influence it will exert on public sector landlords in favour of greater efficiency and improved services through the effects of competition.

But all this would be of little real use if in practice the balance could always be swayed against change by the influence of the apathetic or the genuinely undecided. That is why we started from the no majority against test, which decides whether or not an applicant can proceed following a ballot, taking as our model the consultation requirements imposed by the Housing and Planning Act 1986 on voluntary disposals initiated by local authorities themselves, using disposal powers they have had for many years. To this arrangement we have added the very strong safeguard of individual choice. Let me repeat that no secure tenant need transfer under tenants' choice against his or her will.

The combination of this safeguard, which could hardly be clearer or stronger for the individual, with the 1986 Act criterion allowed us to propose voting and arrangements for leasebacks and exclusion which facilitate transfer for tenants who want and need it, while avoiding any prejudice to the position of individual secure tenants who want to stay as they are. This means giving the applicant the opportunity to become the landlord of those who are prepared to acquiesce in changes even if they do not feel strongly enough to cast a positive vote in favour.

By the time the vote comes to be collected and counted, I have already explained how we shall have ensured that all reasonable and practical steps have been taken to ensure that tenants have all the information they need in an understandable form to come to a view.

These are fair and reasonable arrangements offering very strong safeguards. Those safeguards will now be even stronger following the amendment I have tabled to introduce a minimum turnout requirement of 50 per cent. which must be met before an applicant can proceed to completion and which your Lordships approved earlier this afternoon. The amendments of the noble Lord, Lord Ross, although he has argued them sincerely and ably, would allow apathy or indecision to swing the balance against change by refusing applicants the ability to become the landlord of non-voting tenants, even though it was clear that they were prepared to acquiesce in that change. I have to tell him that I cannot agree with him on this. We are on a fundamental point of difference.

Lord Underhill

My Lords, before the noble Earl sits down, in the light of the point made by my noble friend Lord McIntosh about those who may not be able to vote, the noble Earl made no reference at all to the possibility of absent voting, postal voting or proxy voting.

The Earl of Caithness

My Lords, I am sorry I did not pick up that point. It is something I should obviously like to consider where possible. In particular, the hospital point is a matter I should like to consider.

Lord Ross of Newport

My Lords, the noble Earl has made a concession. I think that is something we ought to look at to make sure that a vote can be given perhaps to people who may be working temporarily overseas and who may be occupying a council house when they are at home. I feel they ought to be able to register their vote by post.

The Earl of Caithness

My Lords, if I may intervene, with the leave of the House, I am grateful to the noble Lord. I have now had it confirmed that the vote could be by post.

Lord Ross of Newport

My Lords, we are getting there slowly. There is a point of difference here. Surely one instance of a tenant transferring against his or her will is one too many. That is the real argument. I would also say to the House that if a tenant who fails to register wishes that he had actually transferred, he is almost certainly going to get a second chance, whereas if it is the other way round he will not get a second chance. That is the difference, and that is why I believe we should pass this amendment. I would ask your Lordships to imagine the outcry if this procedure were applied to compulsory purchase orders. Quite rightly, the newspapers would be filled with horror about it. I must press this to a Division. I understand that the Minister has gone part of the way but he has not gone far enough so far as I am concerned.

6.58 p.m.

On Question, Whether the said amendment (No. 181) shall be agreed to?

Their Lordships divided: Contents, 87; Not-Contents, 89.

DIVISION NO. 3
CONTENTS
Addington, L.	Falkland, V.
Airedale, L.	Foot, L.
Amherst, E.	Gallacher, L.
Ardwick, L.	Galpern, L.
Attlee, E.	Glenamara, L.
Avebury, L.	Glenconner, L.
Banks, L.	Graham of Edmonton, L.
Beaumont of Whitley, L.	Grey, E.
Blackstone, B.	Grimond, L.
Blease, L.	Hampton, L.
Bonham-Carter, L.	Harris of Greenwich, L.
Bottomley, L.	Henderson of Brompton, L.
Carmichael of Kelvingrove, L.	Houghton of Sowerby, L.
Carter, L.	Hunt, L.
Cledwyn of Penrhos, L.	Hylton, L.
Cocks of Hartcliffe, L.	Jeger, B.
Darcy (de Knayth), B.	Jenkins of Hillhead, L.
David, B.	John-Mackie, L.
Dean of Beswick, L.	Kennet, L.
Diamond, L.	Kilmarnock, L.
Donaldson of Kingsbridge, L.	Kinloss, Ly.
Donoughue, L.	Kirkhill, L.
Dormand of Easington, L.	Llewelyn-Davies of Hastoe, B
Elwyn-Jones, L.	Lloyd of Kilgerran, L.

Lockwood, B.	Ross of Newport, L.
Lovell-Davis, L.	Russell, E.
McIntosh of Haringey, L.	Seear, B.
Mackie of Benshie, L.	Seebohm, L. [Teller.]
McNair, L.	Serota, B.
Mar, C.	Stedman, B.
Mayhew, L.	Stoddart of Swindon, L.
Meston, L.	Strabolgi, L.
Molloy, L.	Taylor of Blackburn, L.
Monson, L.	Taylor of Gryfe, L.
Nicol, B.	Tordoff, L. [Teller.]
Oram, L.	Turner of Camden, B.
Pitt of Hampstead, L.	Underhill, L.
Ponsonby of Shulbrede, L.	Vernon, L.
Prys-Davies, L.	Walston, L.
Raglan, L.	Williams of Elvel, L.
Rea, L.	Winchilsea and Nottingham, E.
Ritchie of Dundee, L.
Robertson of Oakridge, L.	Winstanley, L.
Robson of Kiddington, B.	Winterbottom, L.

NOT-CONTENTS
Abinger, L.	Kinnoull, E.
Ampthill, L.	Lauderdale, E.
Arran, E.	Lindsey and Abingdon, E.
Auckland, L.	Long, V.
Barber, L.	Lyell, L.
Belstead, L.	Malmesbury, E.
Blatch, B.	Margadale, L.
Boyd-Carpenter, L.	Marley, L.
Broadbridge, L.	Maude of Stratford-upon-Avon, L.
Brookes, L.
Butterworth, L.	Merrivale, L.
Caithness, E.	Mersey, V.
Cameron of Lochbroom, L.	Milverton, L.
Carnegy of Lour, B.	Monk Bretton, L.
Carnock, L.	Morris, L.
Clinton, L.	Mowbray and Stourton, L.
Coleraine, L.	Munster, E.
Colnbrook, L.	Murton of Lindisfarne, L.
Colwyn, L.	Orkney, E.
Constantine of Stanmore, L.	Penrhyn, L.
Craigmyle, L.	Piatt of Writtle, B.
Craigton, L.	Radnor, E.
Cranbrook, E.	Reay, L.
Croft, L.	Renton, L.
Davidson, V. [Teller.]	Renwick, L.
Denham, L. [Teller.]	Rochdale, V.
Dundee, E.	Rodney, L.
Elibank, L.	St. Davids, V.
Fanshawe of Richmond, L.	Sanderson of Bowden, L.
Ferrers, E.	Skelmersdale, L.
Fortescue, E.	Southborough, L.
Gardner of Parkes, B.	Stodart of Leaston, L.
Gibson-Watt, L.	Strathclyde, L.
Gisborough, L.	Suffield, L.
Glenarthur, L.	Thomas of Gwydir, L.
Gray of Contin, L.	Torrington, V.
Gridley, L.	Trafford, L.
Harmar-Nicholls, L.	Trefgarne, L.
Henley, L.	Trumpington, B.
Hesketh, L.	Vaux of Harrowden, L.
Hives, L.	Vinson, L.
Holderness, L.	Westbury, L.
Hooper, B.	Wise, L.
Killearn, L.	Wyatt of Weeford, L.
Kimball, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

7.5 p.m.

Clause 100 [Tenancies granted after relevant date]:

The Earl of Caithness moved Amendment No. 182:

Page 77. line 41, at beginning insert ("Subject to subsection (4)(aa) below").

The noble Earl said: My Lords, in moving Amendment No. 182 I wish to speak also to Amendment No. 183. These amendments would allow the regulations made by my right honourable friend under Clause 100 to exclude specified descriptions of licences or tenancies from its provisions.

There are at least three such descriptions of tenancies where the requirements described in subsections (2), (3) and (4) will not be appropriate. The first two are the leases which will come into existence where, after the relevant date, a secure tenant completes a right-to-buy purchase of his flat, and where such a tenant completes the purchase of a shared-ownership lease. The third is where a landlord wishes to relet on a new secure tenancy a flat which is in a building covered by the application but which was occupied on the relevant date by a secure tenant who, under Clause 92(4), was not a qualifying tenant because the flat was within certain categories of special property for the elderly and others excluded from the right to buy by Schedule 5 to the Housing Act 1985.

These are the only cases which we currently have in mind, but the amendment proposes a regulation-making power which could accommodate other exemptions from Clause 100 should the need for them become apparent in practice. This is a sensible and prudent amendment which I commend to the House. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 183:

Page 78, line 13, at end insert— ("(aa) excluding from the tenancies and licences to which this section applies a tenancy or licence of a description specified in the regulations").

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 184:

Leave out Clause 100.

The noble Lord said: My Lords, I only half apologise for coming back to this matter having raised it in Committee. The Minister appeared not fully to understand the implications of the amendment that we then moved. His reply contained statements that I wish to challenge now in public. He suggested that the landlord—in other words, the local authority—might try to fill empty flats after receiving an application for the blocks that contained them and thereby influence the decision taken about the transfer to a new landlord. However, this cannot happen. After the date of receipt of the application, new tenants are not entitled to participate in the consultation process. That basic objection to the amendment moved in Committee does not stand up.

The substantive issue remains. If it is not possible for the local authority to fill empty flats in the period of consultation between the date of application and the date when the whole deal goes through—the Minister was unable to deny this when directly challenged in Committee—one runs the risk that there will be a greater number of empty properties than there would otherwise be. Properties that could have been filled were it not for the application will not be filled until the deal has gone through.

The Government make a great deal of play about empty properties in the control of local authorities. When we challenge them on this by proposing penalties on local authorities and other landlords for having empty properties, they run away from the consequence of their attitude. I do not take that attitude too seriously. I take the matter of empty property seriously, but I do not take seriously the Government's political attempts to make capital out of it.

The Minister was unable to deny that there will be more empty properties if the Bill goes through unamended than would otherwise be the case, and that must be so. We are proposing that there should be a continuation of the local authority's policy of filling vacancies in the properties which are the subject of an application and that those tenancies, until the date of the completion of the deal, should be secure. In other words, the tenants whom the applicant takes over on the vesting date, if that is the correct word, should all be on the same footing. There should not be first- and second-class tenants. This seems to us to be common sense. I cannot think why the Government have continued to resist a proposal which is so strongly in line with their own policies and with the claims that they are making about local authority housing. I beg to move.

Lord Trafford

My Lords, there is quite considerable consideration before the first step of the application is taken. Though it may apply to applications, every public sector body and local authority would know that this step was coming. What my noble friend the Minister said may well have been correct. The application is not going to be the first step taken by any putative private landlord. The other point made by the noble Lord would be covered by the regulations

The Earl of Caithness:

My Lords, I am grateful to my noble friend for that very helpful contribution because I believe it begins to put the matter into proper perspective. Clause 100 fills a gap in the procedures of Part IV. It also provides for a necessary defence against obstructive action which, I regret to say, some landlords might be tempted to try once it was clear that an application was going ahead. There will be in some applications, dwelling houses vacant on the relevant date. There will be others which, for a variety of reasons fall vacant between the formal start of an application and its completion. The landlord, rightly, should be able to make use of his vacant properties during that period by granting tenancies or licences to occupy such houses or, more frequently, flats. Clause 100 is needed to make provision with respect to those tenancies or licences.

The issue of any such tenancy or licence could, through error, omission or perhaps sheer malice, put secure tenants into properties which the applicant was entitled to take over with vacant possession. Moreover, if they were vacant on the relevant date that would have been one of the factors taken into account in setting the price that he would have had to pay for them.

Even when the effects of the powers in Clause 104 over disposal and of the tenants' guarantee and its precepts about continued letting were taken into account, that would tend to increase the price. That cannot be right and the clause would ensure that it could not happen. I believe that the clause strikes a balance. It allows a landlord to go on using his property while the tenants' choice procedures take their course. But it ensures that the applicant does not end up with an unfair burden of secure tenants. It means that no obstructive landlord can pick an otherwise largely empty block of flats in order to undermine a successful application.

It equally well permits the landlord and the potential applicant to agree that, if the applicant wants it, the tenancy can be of a more permanent type than I have mentioned. As we have been at pains to stress, the Housing Corporation will be looking at the landlords who are in the long-term renting business.

7.15 p.m.

Lord McIntosh of Haringey

My Lords, of course I am not satisfied with that answer. It does not deal with the fact that there will continue to be voids. The suggestion that there might be agreement between the applicant and the landlord goes entirely against the paranoia of the Government in thinking continually that the landlords8-—in other words, the local authorities—are going to be obstructive all the time. If the local authorities are being obstructive, what confidence does the Minister have that there will be the kind of agreement that he talks about? What we shall have is more empty properties and, if not, we are going to have quite unsatisfactory temporary licences. That is not a suitable way in which to treat housing management. It means that there is a very undesirable interregnum between the local authority regime and that introduced by the applicant. The complication and the length of it is a matter for the Government to secure by regulation. I am quite sure that they will wish to see that it is as short a period as possible. Nothing that the Minister has said has convinced me that there will not be a period in which housing management is in effect in abeyance and during which an effective allocations policy is no longer possible.

It will be even worse if at the end of the day the application does not go through. Then we shall have a backlog of properties to be filled. I have no doubt that Ministers, when they speak at Conservative party conferences and are not subject to parliamentary challenge, will go on making the absurd accusations which they continue to make about local authorities being derelict in their duty as regards empty properties. We have challenged the Government on that matter before and they have backed away from it. We are challenging them on it now. It is now clear that the Government are prepared to countenance an artificial increase in empty properties owned by local authorities. It is unsatisfactory and it is only with the greatest reluctance that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 101 [Consultations by applicant]

Lord McIntosh of Haringey moved Amendment No. 185

Page 78, line 43, leave out ("relevant date") and insert ("date on which the period referred to in (1) above commences").

The noble Lord said: My Lords, this amendment refers to what happens after the application date. On this occasion we are referring to tenants who move out of the property rather than those who move in. I suppose we are criticising the rigidity of the concept of the relevant date which is contained in Clauses 100 and 101. In the previous amendment we accepted that those who come in after the relevant date should not be allowed to vote. Now we are saying that it is an absurdity that qualifying tenants resident at the relevant date can vote even if they move somewhere else or if they exercise the right to buy.

If we are to have effective elections we have to have an effective electoral system. We clearly do not have that after the decisions taken in your Lordships' House. We have to have an effective and relevant electoral register. The electoral register for a vote, a ballot and for consultation on transfer from one landlord to another must be for those tenants who are to be transferred. How can it be for those tenants who have in the meantime decided not to stay in the area or not to become tenants at all?

I find it difficult to say anything further about this subject because the case is so clear and obvious that the Government are wrong on this matter. What answer do they have? Are they seriously suggesting that, having been reminded of the issues, those who are not going to take part in the transfer should have a vote in the consultation process? I beg to move.

The Earl of Arran

My Lords, we oppose the amendment because at best it is unnecessary, and at worst it is not acceptable. As the noble Lord made clear, the objective of the amendment is to extend the category of tenants who on the face of the Bill are given the right to be consulted under Clause 101. It would extend that category provided for in subsection 2(a) to cover qualifying tenants or long leaseholders who had not been in occupation on the relevant date, or, if appropriate, the date on which their home was added to the application under Clause 97(1)(d). We have made it clear all along that we recognise the need to adjust at the margins the range of tenants who are to be consulted under Clause 101, and within that group those whose vote would determine whether or not their home was to transfer. Following the amendment to which your Lordships agreed in Committee, subsection (2) of Clause 101 now enables precisely that to happen.

Under paragraph (a) the applicant must consult the main categories of tenants who will be affected—namely, qualifying, secure tenants and long leaseholders in occupation at the relevant date. Under paragraph (b) he must consult tenants of flats who have been prescribed under Clause 99(2)(b) as able to decide whether or not to have their homes individually leased back to their existing Landlords —for example, people who succeed to the tenancies of qualifying tenants after the relevant date. And under paragraph (c), my right honourable friend can prescribe in regulations other categories of tenants who must be consulted and given a say in the collective decision about the fate of the application as a whole. We shall use those powers to prescribe the additional descriptions of tenants who should indeed be consulted—for example, lawful successors to qualifying tenants who should have the same rights under Clauses 99 and 101 as their predecessors. Furthermore, we shall ensure that tenants whose homes are added at the suggestion of a landlord under Clause 97(1)(d) have the appropriate rights.

This is a carefully constructed set of provisions. It places the core of the electorate (if I may use that term) on the face of the Bill, but allows for the flexibility needed to ensure that each special case outside that core can be suitably treated. Amendment No. 185 would not easily sit with that structure; and from the examples we have given it should be clear that we intend to achieve many of its goals by the use of the powers already provided for. But we detect that the amendment might be an attempt to undo some of the effects of Clause 100, which as your Lordships will recall, we have placed in the Bill to prevent a hostile landlord from packing vacancies arising at or after the receipt of an application in order to prejudice the outcome of the application. We shall not rehearse the arguments already deployed on the need for the clause; but it rightly prevents such late tenancies from being secure tenancies. It would not be appropriate for those tenants to be able to decide the outcome of an application. If that were the intention of Amendment No. 185, I would have to speak more strongly against it.

I hope that we have shown to the noble Lord, Lord McIntosh, that we have put together a considered package to cover all eventualities in an appropriate manner. We hope that he will not press his amendments.

Lord McIntosh of Haringey

My Lords, in his reply the noble Earl has demonstrated that the Government have put together a package which will do what they want it to do. It can be adapted to meet any political or administrative objective. The noble Earl is saying that the basic electorate—if I may continue to use the analogy —is established by statute but that the Government can do what they like by regulation to add or subtract from it. If the Representation of the People Act were being considered in another place and these proposals were put forward for parliamentary or local government elections, any government who proposed them would find their proposals tossed out on their ears.

It is not good enough for matters of this kind, which affect people's futures, livelihoods and homes, to be dealt with by a mixture of statutory provision and regulation. I am not reassured by the noble Earl's attempts to say that the Government will do something about it in regulations. It is significantly worse than anything I had expected, and the justification for the amendment seems much stronger now than when I originally moved it. The Government have not thought this through. They are hiding behind regulation in the face of an administrative and logical problem which they have not thought out properly.

It is a most unsatisfactory reply. I hope that between now and another stage the Minister will read his speech carefully and write to me saying whether he really thinks that the position he has put forward can be rationally defended. I do not think that this is a matter on which I should seek your Lordships' opinion. I am sorry that the apparent amity and common purpose of this afternoon should disappear so rapidly in the face of what is no more than obscurantism by the Government. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments No. 186 to 188 not moved.]

Clause 102 [Notice by applicant of intention to proceed]

The Earl of Caithness moved Amendment No. 188A

Page 79, line 3, at end insert ("and in that notice the applicant, in such circumstances as may he prescribed, may inform the landlord—

1. (a) that he wishes to enter into a prescribed convenant to make payments to the landlord on the occasion of any prescribed disposal (occurring after the date of the acquisition) of a dwelling-house comprised in the properly to be acquired: and
2. (b) that he requires the value of that covenant to be taken into account in reducing the price which would otherwise he payable for the property to be acquired ")

.

On Question, amendment agreed to.

[Amendment No. 189 not moved.]

The Earl of Caithness moved Amendment No. 190:

Page 79, line 5, leave out from("if") to ("of") in line 6 and insert ("in response to the consultation under section 101 above,—

1. (a) less than 50 per cent. of the tenants to whom that section applies have given notice of their wishes in such manner as may he prescribed; or
2. (b) the number of tenants to whom that section applies who have given notice in that manner").

On Question, amendment agreed to.

[Amendment No. 191 not moved.]

Lord Dean of Beswick moved Amendment No. 192:

Page 79, leave out lines 9 to 14 and insert— ("(3) The provisions to be prescribed in section 101(1) above shall include provisions which will determine what should happen to the application where there is a disagreement between joint tenants or between the tenant and his spouse or where one or more joint tenants or a spouse is away from home during the period of consultation.").

The noble Lord said: My Lords, this amendment seeks to require the Secretary of State to make regulations to decide what will happen to the home of people who cannot agree about a transfer, or where one or more of the parties is away from home. The Government must sort out their policy on this issue. They have said that members of each household must make up their minds collectively on what should happen to their home. Let us suppose that they cannot make up their minds, which is not unusual in families. The result of a failure to agree may be that the household will not vote at all. Will this be counted as a "yes" vote?

Each party to a joint tenancy has a legal interest in the dwelling. A non-tenant spouse has an interest as a possible future successor. The interests of these people must be protected. I shall put some examples of what may arise in order to present the Minister with an opportunity to give the Government's thinking on this matter.

What will happen when a husband and wife cannot agree? That is surely not unknown, even if the au pair girl mentioned the other evening by the Minister is not involved.

The Earl of Caithness

Mentioned by the noble Lord!

Lord Dean of Beswick

What will happen when one joint tenant is abroad and cannot be contacted by the other joint tenant? He may have left the incumbent with the responsibility for paying the rent. A woman suffering domestic violence may temporarily have left the matrimonial home. The husband could be suffering domestic violence. A woman may have gone home to mother or be living temporarily in a hostel for battered wives. What will happen in the case of joint tenants who share facilities but do not live as one family? These are everyday happenings and must be taken into account. We should like to hear the Government's thinking on these matters. I beg to move.

The Earl of Caithness

My Lords, Amendment No. 192 would require the Secretary of State to prescribe provisions governing what would happen when joint tenants or non-tenant spouses disagreed about how their household vote should be cast on a tenants' choice proposal. Votes cast in response to consultation under Clause 101 will have two effects. Taken together they will determine whether the applicant is able to complete the acquisition. Individually they will determine the future of individual qualifying tenants' tenancies. Those qualifying tenants who vote to remain with their present landlord will either have their homes excluded from the requisition altogether, in the case of houses, or, in the case of flats, have them leased back to their existing landlord by the applicant. That individual element in the vote means that there must—indeed there can—be only one vote per household.

It must be up to the members of families or households, whether they are spouses or joint tenants, to reach agreement between themselves on how to vote on a tenants' choice proposal. I accept that sometimes it will be easier than others. But I am sure that your Lordships will agree that the circumstances will be no different from those surrounding many other major decisions which families and households of joint tenants have to deal with, and deal with every day.

The amendment of the noble Lord, Lord Dean of Beswick, mentions especially joint tenants or spouses who might be away from home during the consultation period. In Committee I dealt with how we intend to see that all tenants get the opportunity, and the information they need, to vote. The formal consultation stage will not creep up on tenants unawares. They will know clearly that it is coming. Where absences are foreseeable, we shall ensure that arrangements can be made for temporarily absent tenants nevertheless to receive the applicants' offer and the ballot material from an independent teller.

Where absences are unforeseen, it will be possible to make special arrangements during the ballot period itself, whether the absences come to light as a result of callback by the independent teller or as a result of an approach to the teller by the tenant. We shall consult in detail on these and the other arrangements which we propose for the consultation procedures later in the year.

Lord Dean of Beswick

My Lords, I am grateful to the Minister for his reply. Obviously there is some difficulty in the matter, but I do not wish to delay the proceedings any longer. It is almost like opening up a can of worms. I ask the Government what would happen, for instance, where the husband is the tenant and votes for moving but the wife says no. Does the wife then register as homeless on the transfer of the property? Does the local authority, the potential buyer or the potential person who will take control of the property then have to go through a court procedure?

As I said, it is something of a can of worms. I do not know whether the Government have realised that such a situation could arise and might well arise. I conclude by saying that I should like the Minister, if the Government have not already thought about it, to consider the matter as they may have to come back to it at a later stage. I am sure that such a case would not happen in isolation. As I said, if the spouse who is the tenant is determined to move, while the other spouse, the other half of the marriage, is adamant that he or she will not, it could create many problems for the Government. However, on the basis that the Minister will take the matter on board and reconsider the situation to see what can be done in such a case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Caithness

My Lords, I beg to move that further consideration on Report be now adjourned. It has been agreed through the usual channels that we shall resume consideration of the Housing Bill immediately after the Church of England Measure has been dealt with.

Moved accordingly, and, on Question, Motion agreed to.