Local Government and Housing Bill

HL Deb 11 October 1989 vol 511 cc353-553

5.45 p.m.

House again in Committee on Clause 138.

Lord Graham of Edmonton moved Amendment No. 176G: Page 122, line 42, after ("or") insert ("in respect of an authority subject to limitation of its maximum community charge").

The noble Lord said: The purpose of the amendment is to probe the Government's intention as to whether different charging regimes will be prescribed in regulations in respect of authorities subject to limitation in their community charges. We are dealing with Clauses 138 and 139. Clause 138(2) allows the Secretary of State wide-ranging power to make regulations relating to charges. These powers are not prejudiced either by other limitations within Clause 138 or by the general rules as to regulations laid down in Clause 160.

I remind the Committee that Clause 160(1) already states that the regulations may make different provisions in different cases. Clause 131(2) underlines that by making it clear that the regulation-making power of the Secretary of State is untramelled even by this apparently broad provision.

The amendment, therefore, queries this breadth of action in respect of poll tax capped authorities. The purpose is to seek a commitment from the Government that the powers in the Bill substantially to increase the proportion of local authority services which may be made chargeable in future years, will not be used as a weapon against local authorities which the DoE decides to cap. I heard what the Minister said earlier and I accept his assurances on these intentions—that is, sinister intentions may not be there—but that this is how local authority associations foresee the possibilities.

Once the capping procedure is in place a situation could be envisaged in which heavy pressure is exerted on authorities to increase charges above any prevailing rate, perhaps as part of any negotiations, as to the future capping of the authority in subsequent years. Equally, if the Minister could give a commitment at this stage that the DoE will not start to take into account charging policies, at least other than in extreme cases, in assessing whether to impose community charge capping, that would be helpful. I beg to move.

The Earl of Caithness

This amendment would limit, in the case of fees and charges, the general provisions that regulations made under this Bill may make different provision for different cases, including different provision for different areas, and that different regulations may be made in England and Wales. It would allow such different provisions to be made only in respect of authorities which had had their community charge capped.

As I have already said, the provision is general, applying to all regulations made under the Bill, not just the fees and charges provisions. The Committee may think it unlikely that so far as fees and charges are concerned we would want to make different provisions for different parts of the country. But if it ever were necessary to do so, I do not think that the fact that an authority had had its community charge capped would be a relevant consideration. Certainly I do not think it should be the only criterion for a decision to make different provision for different cases.

The whole point of these clauses is to provide a flexible and simple way of regulating fees and charges in the future. It is important that the Government's hands are not tied in the way suggested by the noble Lord, Lord Graham.

Lord Graham of Edmonton

I hear what the Minister says, that it is there to provide a simple and flexible way to control charges in the future. That is a simple and flexible way for the Government to control charges in the future. What about the Government trusting local authorities to have some sense of responsibility and a sense of balance in these matters? Here we have a Bill which we all understand is designed to turn another ratchet in tightening controls over local government. But in some instances, such as this, the control on charges in the context of the community charge payer may be likely to cause severe problems.

I say sincerely to the Minister that he could go a long way towards winning friends in local government if the words that he uses sounded more sympathetic than they are. However, each person has his own style. His words are very bleak. They do not give any promise to local authorities, whether or not it is clear that he understands. It is too much to expect that he accepts what they are saying, but these are real people with real problems who come from all over the country, from all political councils and who decide that the Bill can be improved at the margin.

I am very disappointed that the Minister cannot see that my colleagues—and I suggest his colleagues—are trying to do a very good job on our behalf out in the sticks, that is, at the coal face of local government. They want fractional easement. The Minister talks in terms that he is not prepared to give the freedom to do this and the ability to do the other. It is ludicrous that the Minister and his advisers can see a Machiavellian imprint on every matter raised from this side of the Committee. However, I believe that the Minister is obdurate on this matter and, therefore, there is no point in pursuing it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 176H not moved.]

Clause 138 agreed to.

Clause 139 [Power to amend provisions about charges]:

[Amendment No. 176J not moved.]

Clause 139 agreed to.

Clause 140 [Interpretation, consultation and commencement of ss. 138 and 139]:

Lord McIntosh of Haringey moved Amendment No. 176K: Page 124, line 29, at end insert ("and colleges of further education").

The noble Lord said: In moving Amendment No. 176K I should also like to speak to Amendments Nos. 176KA, 176L, 176M and 182AZ. I should point out that Amendments Nos. 176L and 176M which appear to be in the name of the noble Lord, Lord Harris of Greenwich, should have been in my name.

We now turn to the issue of exclusions from the provision for charges to be made for local authority services. The noble Lord, Lord Harris, has a number of proposals on this point, as do I with my amendments. The first proposal in Amendment No.176 excludes the possibility of charging for the provision of further education. I should qualify that slightly. The Bill does not say that these functions will necessarily be provided free but that the charging provisions of this Bill will not apply. In particular, Clause 140(1)(a) refers to functions relating to education in schools but of course, as the Committee knows, under the Education Reform Act of last year there was provision for quite a number of additional charges for what had been free services in schools or services which had been charged for but probably charged for illegally.

This amendment seeks to test the Government's view about provisions in further education colleges. The 1988 Act, to which I have already referred, reorganised the system of further and higher education and took much of the higher education away from the control of local authorities; notably, the polytechnics. However, further education, to which this amendment refers, is still in the local authority sector. It would seem to be illogical that where there is a certain regime for charging in schools there should be a different regime, or the possibility of a different regime, in the further education sector. I wonder whether that is deliberate. It could be that it is one of the many hundreds of matters which slip through in the complexity of the legislation with which we have been faced in the past few years.

However, if we look at the matter objectively it cannot be right that further education colleges, which are providing a continuation of the education provided in schools, should run the risk of being on a fee charging rather than a basically free basis. That would not only be against what we on these Benches would wish, but I should have thought that it would be against the wishes of a government who claim to pay such attention to education and training issues. Therefore, we want to be sure as to whether the provisions of Clauses 138 and 139 could be made applicable at some stage in the future to college education. We hope not.

I now turn to Amendment No. 176L which is concerned with the activities of civil defence and fire authorities which are not themselves fire fighting. It is recognised universally—and probably even in the Adam Smith Institute—that there should not be charges for fire fighting itself. However, many of the activities of fire brigades cannot be strictly called fire fighting, yet they should not be on a chargeable basis. Certainly, it would be wildly extravagant to have an accounting section in each fire station which says that a charge for rescuing a cat from up a tree is 17s.6d., or whatever the sum may be. Those services are indivisible in the way in which they are provided. We cannot believe that the Government wish firemen to keep time-sheets which show that one activity was fire fighting but the other was not and then send out a VAT invoice for the portion which does not involve fire fighting. After all, those are humanitarian services and have been recognised as such in many enactments, notably the Fire Services Act 1947.

Amendment No. 176M refers to a matter which is better dealt with by the noble Lord, Lord Harris of Greenwich, who has down his own amendment, No. 176KA. I only indicate to him in advance of what he says that I believe I am likely to agree with him. I beg to move.

Lord Harris of Greenwich

Of course I agree with what the noble Lord, Lord McIntosh, said in relation to some of the amendments which are in my name rather than his. I was interested in what he said about the Adam Smith Institute. This is one of the rare occasions on this particular Bill where I differ from him because he said that it was inconceivable that the Adam Smith Institute would favour charging for fire fighting activities. I should have thought it highly likely that this organisation would come forward with just such proposals. A number of its supporters seem very keen on private policing. Therefore I see no particular reason why they should exclude fire fighting activities from that general approach.

However, the matter which I should like to discuss is a far more limited question; that is, the concern expressed by a number of people involved in the use of historical records. These people include professional historians, students, genealogists and many others. Their principal anxiety is that the inspection—and I repeat the word "inspection"—of historical records held in local authority care should remain free of charge.

Historical records which local authorities hold under the Local Government (Records) Act 1962 should in our judgment be open to inspection by anyone seeking to have access to them who is prepared to inspect them in person. In respect of many kinds of current records which local authorities hold, that principle is already clear, either because authorities have no express authority to charge in any event or, as with the provisions enacted by Mr. Robin Squires' Local Government (Access to Information) Act 1985, the legislation expressly distinguishes between inspection which is largely free, and being supplied with copies, which is not. But that is not necessarily the case in respect of historical records. Under the 1962 Act authorities have a discretion to charge for inspection as well as for copying.

The records principally affected in practice are archives collected and deposited with recognised archive authorities under Section 2 of the Act and other records in the control of a library authority whose use it may be to promote it under Section 1 of that Act. In many cases—notably in the metropolitan areas—original documentary material held for purposes such as local studies is, as a matter of practice, used in and organised as part of the library service. In other words, many libraries hold archives and make them available for study on the premises.

To charge the public at large for access to historical material held at public expense, whether in local studies libraries or in a specialised record office is, I believe, wholly wrong in principle. It is also logically inconsistent with the apparent aims of the present Bill. The Bill seeks to establish that educational facilities, on the one hand, and the basic public library service, on the other, are to be free of charge. Acceptance of that principle makes charging for access to archives highly questionable. It is as essential to secure free access to archives as it is to allow students free run of a reference library. Indeed, most authorities who hold archive collections are, or soon will be, education authorities also and should face up to the responsibilities that will be theirs in that area.

That is the substance of the argument. There are other amendments dealing with other issues involved in this matter. With those relatively short observations I await with interest what the noble Lord, Lord Hesketh, has to say.

6 p.m.

Lord Hylton

I am sure that many Members of the Committee will be in the position of having deposited records of all kinds with local authorities; for example, manorial records, court records, family and genealogical records. I am certainly a person in that position.

I find it extraordinary that it should be possible to charge for inspecting these records when, under Clause 140(1)(b), we see that functions relating to a public library service are specifically exempt. Surely those two aspects must hang together.

Lord Hesketh

These amendment seek to add three functions to the list of excepted functions; that is, functions for which this Bill does not allow provision to be made for fees and charges by means of regulation. Amendment No. 182AZ, tabled by the noble Lord, Lord Harris of Greenwich, seeks to achieve the same effect in respect of public records by means of an amendment to the Local Government (Records) Act 1962. Those functions are: education in colleges of further education; non-fire fighting services provided by a fire authority; and the inspection of documents by members of the public.

I do not for one moment disagree with the noble Lords who have spoken when they say that these are important functions; but I do not agree with them that they should be added to this list. I should like to remind the Committee that the changes made by this Bill are intended to provide a general and flexible framework for the future regulation of fees and charges. The purpose is a general one: to provide that in future, where a power to charge is appropriate, it may be introduced through regulations rather than through new primary legislation. Nothing in this Bill can ever require a local authority to charge for services; it can only empower local authorities to do so if they wish.

Regulations made under the fees and charges provisions of this Bill will be subject to the affirmative resolution procedure. That means that no regulations can come into force without the specific approval of your Lordships' House and the other place. Even so, the Bill provides that for certain basic functions of local authorities, something more than regulations is required. It is right that if charges were ever proposed for any of those services then the proper place for the provisions would be in a Bill which would be subject to even more detailed scrutiny. Clearly, though, if the new arrangements are to be of any practical value, the limits on their use must be kept as few as possible.

We believe that we have got the list of excepted functions right. Important as they are, I do not believe that we should add the functions proposed by the noble Lords who have spoken. That does not mean that we believe charges should be introduced for those functions; but we risk reducing the value of this useful and, I believe, generally welcome measure if we reduce its flexibility by adding further functions.

Local authorities already have the power under the Local Government (Records) Act 1962 to charge, if they wish, for consulting records under an authority's control. The probable intent of Amendment No. 176KA, when taken with Amendment No. 182AZ, is to remove from local authorities that discretion to charge and to prevent the Secretary of State from authorising charges for functions relating to the inspection of records. It is considered right that local authorities should have discretionary power to charge for the consultation of local records where they consider it desirable. For example, they may wish to use their powers to prevent excessive use of fragile documents or to obtain contributions towards the cost of having microform copies made of much consulting material or to finance the buying of additional archives.

The noble Lord, Lord Harris, referred to the amendment tabled in another place and later withdrawn. My right honourable friend the Minister for the Arts gave an undertaking to consider carefully the concerns of those who use local records held on public library premises. He has already written to the secretary of the Royal Commission on Historical Manuscripts and to the Keeper of the Public Records about making proposals in this respect on the contents of the regulations to be made under the library Clause 141. He will consult further on the draft regulations when they are available for consultation.

Fire authorities are already permitted to charge for non-fire fighting services by virtue of Section 3(1)(e) of the Fire Services Act 1947. That same Act prevents fire authorities from charging, save as provided expressly in it. The powers that we are discussing cannot override that prohibition and therefore cannot be used to extend the charging powers of fire authorities. It is not the purpose of these clauses to remove from local authorities discretion which they already have. The purpose is to provide a more flexible mechanism for regulating charging in the future.

As I have explained, it is the basis of these clauses that we should so far as possible provide a uniform approach to all services for which local authorities may wish to charge. The list of excepted functions therefore needs to be limited to the minimum basic functions for which it is appropriate that new primary legislation should be the vehicle for change. That list includes school education but the Government believe that it would not be appropriate to go further than that.

I ask the Committee to accept the fact that a function which is not in the list does not mean that charges will ever be introduced for it. If proposals are made to charge for such a function those proposals will come before your Lordships when the necessary regulations are debated. They will provide a full opportunity for further discussion of the merits of particular cases. The clauses currently before the Committee are intended only as a framework. For those reasons I ask the Committee to resist these amendments.

Lord Harris of Greenwich

What conceivable damage would be done if such amendments were accepted? It is this rigid approach by Ministers on these matters which so prolongs discussion on Bills of this nature. What has the Minister actually said? He made two points; first, that there is nothing to worry about and that the Government are not necessarily terribly committed to the idea of charging in the first place. The Government then say there is nothing to concern ourselves about because there will be some form of affirmative resolution procedure.

We all know perfectly well that that is unsatisfactory. The regulations are almost bound to cover a whole series of propositions. When we discuss a resolution, as the noble Lord knows perfectly well, we are in no position to amend it. Therefore, this is the only opportunity that we have of discussing a matter of considerable importance to a number of highly reputable historians who are concerned about the position.

I urge the noble Lord, Lord Hesketh, to reconsider the matter. There is no great ideological gulf between us but I repeat that there is serious concern among a number of reputable people. The Government would be making no major concession if they agreed to reconsider.

The second point is this. The Minister did not deal with my point relating to reference libraries. It would be inconceivable to charge students, historians or anybody else for the use of a reference library. Why is it conceivable that historians should be charged for looking at an historical document? It seems to me to be extremely difficult to find any kind of justification for this different approach. I repeat that there is no major ideological difference between us on this matter. I very much hope that the Minister will agree to look at the matter again between now and the next stage of the Bill.

Lord Hylton

I wish very briefly to support the plea made by the noble Lord, Lord Harris of Greenwich. The matter has a bearing on tourism because many Americans and Commonwealth citizens come to this country specifically to research their ancestry. They spend a great deal of money here in the process of doing so. It is very shortsighted to discourage them by imposing charges.

Lord McIntosh of Haringey

I hope that the Minister will be able to respond to those very reasonable pleas. I found his answer to this whole series of amendments quite unconvincing. I have seen the mirror image to that argument so many times in official briefs that I was astonished that he could stand up and make it with a straight face. The argument that is usually put forward is that once one has a list of exceptions, as there is in Clause 140, anything that is not on the list is thought to be treated differently. Therefore one avoids having lists. Ministers have stood up time and again (and those facing us now have done likewise) and said that they are not going to make a list because if they do so the implication would be that the items not on the list would be treated differently.

However, Ministers have started a list and they are denying that items such as records and further education are being treated differently because they are not on the list. I shall remember that argument the next time the mirror image of it arises. I feel that we should not let them get away with it. This matter may not appear to be of the first rank in importance and it may be thought that, in my case, we should protect the continuity of further and school education. However, the more I think about it the more I believe it is in the first rank of importance.

The assurance that has been given that there is no present intention of charging, once there is a list of exceptions, could well be given greater force if the Minister were willing to agree that these items that will not cause any difficulty could, without damage, be added to the list. I am glad to give way to the Minister.

Lord Hesketh

I apologise because I have got slightly out of order. I wish the noble Lord, Lord McIntosh, to know that I was proposing to respond to him before he leapt up. As the noble Lord, Lord Harris of Greenwich, fairly pointed out, there is no great idealogical difference here. In certain ways the noble Lord, Lord McIntosh, is aware that where the two little words "shall" or "may" appear closely combined at various points in legislation, Government Ministers take a consistent line.

I was myself rather amazed to find the list, not being a keen list person myself, as he rightly pointed out. It is very important to recognise the fact that we are not proposing any charges in those areas that are not on the list. We are not proposing that central government should have any involvement. We believe in providing flexibility for local authorities into the future. I give one example to the noble Lord, Lord McIntosh. A fire service that is highly successful, professional and competent might at some future point be able to charge for its knowledge on a commercial basis for the benefit both of the fire service and of the local community that funds it. It is for that kind of opportunity, and nothing more, that we feel it is appropriate to have flexibility in the Bill.

Lord Harris of Greenwich

I do not wish to be tediously repetitive. I asked the noble Lord specifically whether he will look at this matter again between now and the Report stage of the Bill. Is the Minister prepared to do that or is he inflexible?

Lord Hesketh

It is fair to say to the noble Lord, Lord Harris, that I shall have to be inflexible in order to remain flexible.

Lord Harris of Greenwich

I am sure that that particular shaft of wit will be deeply appreciated by all the historians concerned, as will the laughter of the noble Earl, Lord Caithness. There are serious people here who believe that there is a serious issue involved and that it is not a matter for mirth. As the Government are inflexible, I agree with the implication of what the noble Lord, Lord McIntosh, has said.

Lord McIntosh of Haringey

I believe that the issues raised by myself and the noble Lord, Lord Harris, show that the Government should be challenged on this aspect of their legislation. We have listened patiently to assurances that one does not have to have a list because leaving a matter off it has some meaning. That assurance should be challenged and the different procedures that are now adopted, despite the friendly words of the Minister, should not be accepted at face value.

6.16 p.m.

On Question, Whether the said amendment (No. 176K) shall be agreed to?

Their Lordships divided: Contents, 69; Not-Contents 96.

DIVISION NO. 1
CONTENTS
Addington, L.	Gladwyn, L.
Airedale, L.	Graham of Edmonton, L.
Alport, L.	Grey, E.
Amherst, E.	Hampton, L.
Attlee, E.	Hanworth, V.
Birk, B.	Harris of Greenwich, L.
Blease, L.	Hirshfield, L.
Bonham-Carter, L.	Hylton, L.
Carmichael of Kelvingrove, L.	Jeger, B.
	Jenkins of Putney, L.
Carter, L.	John-Mackie, L.
Cledwyn of Penrhos, L.	Kilbracken, L.
Cobbold, L.	Kilmarnock, L.
Cocks of Hartcliffe, L.	Kirkhill, L.
Darcy (de Knayth), B.	Lawrence, L.
David, B.	Llewelyn-Davies of Hastoe, B.
Dean of Beswick, L.
Dormand of Easington, L.	Lloyd of Kilgerran, L.
Evans of Claughton, L.	Lockwood, B.
Ewart-Biggs, B.	Longford, E.
Ezra, L.	Macaulay of Bragar, L.
Fisher of Rednal, B.	McIntosh of Haringey, L.
Foot, L.	Mackie of Benshie, L.
Gallacher, L. [Teller.]	Mason of Barnsley, L.
Galpern, L.	Mishcon, L.

Monson, L.	Serota, B.
Nicol, B.	Stallard, L.
Northfield, L.	Stewart of Fulham, L.
Pitt of Hampstead, L.	Stoddart of Swindon, L.
Ponsonby of Shulbrede, L. [Teller]	Taylor of Gryfe, L.
	Taylor of Mansfield, L.
Prys-Davies, L.	Turner of Camden, B.
Rea, L.	Underhill, L.
Robson of Kiddington, B.	Walston, L.
Rochester, L.	Whaddon, L.
Ross of Newport, L.	White, B.

NOT-CONTENTS
Alexander of Weedon, L.	Long, V.
Annaly, L.	Lyell, L.
Arran, E.	McColl of Dulwich, L.
Ashbourne, L.	Mackay of Clashfern, L.
Auckland, L.	Macleod of Borve, B.
Balfour, E.	Margadale, L.
Belstead, L.	Marley, L.
Blake, L.	Merrivale, L.
Borthwick, L.	Monk Bretton, L.
Boyd-Carpenter, L.	Montgomery of Alamein, V.
Brightman, L.	Munster, E.
Brougham and Vaux, L.	Murton of Lindisfarne, L.
Butterworth, L.	Napier and Ettrick, L.
Caithness, E.	Nelson, E.
Carnock, L.	Nelson of Stafford, L.
Clitheroe, L.	Norfolk, D.
Colnbrook, L.	Nugent of Guildford, L.
Colwyn, L.	Onslow, E.
Cowley, E.	Orkney, E.
Cox, B.	Pender, L.
Craigavon, V.	Platt of Writtle, B.
Crickhowell, L.	Porritt, L.
Cullen of Ashbourne, L.	Prior, L.
Davidson, V. [Teller.]	Rankeillour, L.
Denham, L. [Teller.]	Reay, L.
Elibank, L.	Renton, L.
Elliot of Harwood, B.	Saint Albans, D.
Faithfull, B.	St. Aldwyn, E.
Fraser of Carmyllie, L.	St. John of Bletso, L.
Fraser of Kilmorack, L.	St. John of Fawsley, L.
Gainford, L.	Sanderson of Bowden, L.
Gardner of Parkes, B.	Shannon, E.
Greenway, L.	Somerset, D.
Gridley, L.	Stanley of Alderley, L.
Hailsham of Saint Marylebone, L.	Stodart of Leaston, L.
	Strange, B.
Halsbury, E.	Strathclyde, L.
Hardinge of Penshurst, L.	Strathcona and Mount Royal, L.
Harmar-Nicholls, L.
Henley, L.	Strathmore and Kinghorne, E.
Hesketh, L.
Hives, L.	Swansea, L.
Holderness, L.	Swinfen, L.
Hooper, B.	Thomas of Gwydir, L.
Ingrow, L.	Trefgarne, L.
Ironside, L.	Ullswater, V.
Johnston of Rockport, L.	Vaux of Harrowden, L.
Kaberry of Adel, L.	Vinson, L.
Kenilworth, L.	Wise, L.
Lauderdale, E.

Resolved in the negative, and amendment disagreed to accordingly.

6.25 P.m.

[Amendments Nos. 176KA to 176M not moved.]

Lord Graham of Edmonton moved Amendment No. 176MA: Page 125, leave out line 37 and insert—("and (c) such bodies appearing to him to represent users of services affected by the proposed regulations, as appear to him to be concerned.").

The noble Lord said: I should like to speak also to Amendment No. 176N. The purpose of these amendments is to seek some assurances from the Minister as to consultation by the Secretary of State before using the powers contained in Clauses 138 and 139 which introduce charging provisions in respect of various types of service.

Clause 138 gives the Secretary of State powers in subsection (2) to introduce regulations covering charging for a range of services which are not currently subject to a charging regime. Clause 139 allows the Secretary of State by regulation to alter existing charging regimes subject to his not introducing amendments for functions which are excepted under Clause 141. However, no requirements are included in the provisions in respect of consultation, either with local government or with users of services. Amendment No. 176MA would require the Secretary of State to consult users before introducing regulations of either type. This requirement would apply in respect of regulations under either power.

Amendment No. 176N would introduce a slightly different requirement whereby any proposal to change charging regimes in respect of the excepted functions would require prior consultation with the local authority associations. The purpose here is to lay down a marker for the future. Were further primary legislation to be envisaged which would affect any of the excepted functions, or were powers to be used under other legislation relating to those functions, such as the charging provisions of the Education Reform Act, consultations would be required.

In summary, the amendments taken together would require the Secretary of State to undertake consultations on his powers within the Bill, on the exercise of powers under other legislation or where other proposals were to be brought forward relating to charges. The general issue would be satisfied by commitments across these various sensitive areas of charging so that the Government are committed to consultation with local government and with organisations representing users.

It has already been indicated that the purpose of the clauses is to provide the opportunity for flexible response and control. No one, sadly, is in a position to thwart the Minister's intentions in these matters. From time to time the Minister pays lip service to the fact that consultations have taken place. So often when consultations take place we are advised by those who are consulted that what they have said has not been taken into account. We are saying that before the Minister applies the full powers in these clauses he should consult with the people at the sharp end and get their reactions. He can take them into account if he will but then he will be free to exercise his authority. I beg to move.

Lord Hesketh

Amendment No. 176N would require the Secretary of State to consult before taking any action which would affect any charges levied in respect of excepted functions. We believe that this amendment goes too far. So far as concerns excepted functions, charges may be levied only through new primary legislation. The normal consultative procedures would attend that legislation, as seemed appropriate at the time; and of course during the passage of the necessary Bill it would be open to all interested parties to make representations, not just to the Secretary of State but also to Members of your Lordships' House and of another place.

Lord Harris of Greenwich

Can the noble Lord raise his voice a little and speak more slowly? We are trying to follow him.

Lord Hesketh

The amendment does not limit itself to primary legislation. It would require the Secretary of State to consult before taking any action which would affect the levels of charges. I submit that it would be almost impossible for any Secretary of State to comply with such a requirement, and there would be scope for great argument, both before and after the event, whether a particular action could be said to have an effect, no matter how indirect, on the level of charges.

I must ask the noble Lord to accept that the areas he is here concerned with are adequately protected by the fact that primary legislation is necessary before any new charges can be brought in in the subjects specified in this clause. In making any such changes the Government will have a good deal of advice at their disposal, and the local authority associations will certainly be among those from whom it is sought, and certainly among those by whom it will be offered. We believe that the amendment is too widely drawn, and unnecessary.

Amendment No. 176MA would require the Secretary of State to consult bodies representing users of services affected by the proposed regulations. Noble Lords will appreciate that I cannot give any undertaking on behalf of all Secretaries of State who may wish to make regulations under these provisions; but I can give the Committee the assurance that it is the policy of Her Majesty's Government to conduct appropriate consultation before taking any such action as is envisaged. But it would not be appropriate to bind the Secretary of State in the way suggested by the amendment. In many cases it will not be at all apparent that any particular body has a specific interest; and in matters which affect the majority of people there is an almost infinite number of bodies which could be said to be concerned. It must be for the Secretary of State to decide on the appropriate bodies to be consulted in specific cases. For that reason we resist the amendment.

Lord Graham of Edmonton

I accept the fairness with which the Minister explained that what is proposed is not necessary. He is not arguing against consultation, but against consultation of this degree, which he believes is covered at earlier stages of the legislation.

I think that what the Minister said goes a long way towards satisfying me that those outside this Chamber may well be too sensitive as regards their ability to influence to the nth degree precisely every detail of what will flow from these clauses. However, I shall read carefully what the Minister said. I am grateful to him for his full, but not lengthy, reply and I may return to the matter at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 176N not moved.]

Clause 140 agreed to.

6.30 p.m.

Lord Erroll of Hale moved Amendment No. 177. After Clause 140, insert the following new clause:Charges:

temporary traffic. signs.

(" . Notwithstanding any enactment or rule of law to the contrary, or the provisions of sections 138 to 140 above, a highway authority may not impose a charge for permitting temporary traffic signs to be placed on or near any road in their area by an organisation representative of road users under section 65 of the Road Traffic Regulation Act 1984, as amended by the Roads (Scotland) Act 1984 in its application to Scotland.").

The noble Lord said: In moving Amendment No. 177 tabled in my name and that of my noble friend Lord Lucas of Chilworth, I should like to couple it with Amendment No. 190 which is purely consequential. In opening my remarks I should perhaps declare an interest in that I am a vice-president of the Automobile Association and still take an active interest in its affairs. The association has asked me to take part in this debate.

The purpose of this new clause is to clarify the law. It seeks to ensure that highway authorities in England and Wales, and roads authorities in Scotland, do not impose a charge when exercising their statutory power under the Road Traffic Regulation Act 1984 to permit temporary traffic signs to be placed on or near any road in their area by an organisation representative of road users.

Under Section 65 of the RTRA and regulation 27 of the Traffic Signs Regulations and General Directions 1981, a highway authority in England or Wales, and the roads authority in Scotland, may cause or permit temporary traffic signs of a prescribed size, character and type to be placed on or near any road in their area in specified circumstances.

These circumstances include the placing of temporary signs for conveying information to traffic about: the route which may conveniently be followed on the occasion of a function or sports meeting; diversions and alternative routes; future road works; and temporary hazards. Regulation 27(6) provides, among other things, that: there may be incorporated in, or attached to, a temporary sign the arms, badge or device of a highway authority, police authority or an organisation representative of road users". Noble Lords may have noticed that yellow signs are used by the Automobile Association and very attractive blue signs are used by the Royal Automobile Club.

As a result of the above statutory provisions, road user organisations, such as the Automobile Association, the Royal Automobile Club and the Cyclists' Touring Club (CTC), only erect temporary traffic signs after seeking and obtaining the permission of the relevant authority. It is the experience of the AA, the RAC and the CTC that over the years such authorities have not imposed any charge for granting this permission to them; indeed, Section 65 of the RTRA does not refer to the imposition of any charge.

However, earlier this year, one London borough council sought to impose a charge for granting permission for the erection of any temporary non-priority direction notices in its area. The council demanded £10 for each sign that an applicant wished to erect. The borough has now reconsidered its policy with regard to the motoring organisations and has granted them a waiver. Nevertheless, in order to clarify the situation for the future, the AA, the RAC and the CTC are promoting this new clause and the consequential amendment, to which I have already referred, which endeavours to extend the new clause additionally to Scotland.

Those organisations provide a very professional temporary signs service which is of real value in maintaining traffic flow throughout Britain. I should just mention that the AA alone erect some 84,000 of those signs each year. Therefore should the operation of charges become widespread at £10 a time, it would add nearly £1 million to the cost of erecting such signs. The AA, the RAC and, possibly, the CTC may well have to cease operations if such charges were to become universally accepted. It is for that reason that I beg to move the amendment.

Lord Underhill

I rise to speak briefly in support of the amendment. I think that perhaps I should also declare an interest in the matter because I have been a member of the AA for the past 40 years and I have also kindly been granted special membership by the RAC. However, it is not because of membership of either of those organisations that If support the amendment proposed; it is because, frankly, these signs are of benefit to all road users. Surely that is the important consideration.

In the light of the provisions contained in Clauses 138 and 139, and the very limited exceptions listed in Clause 140, in my view there is no reason whatever for the Government not to accept this amendment. As I said, such signs are of benefit to all road users: they give traffic directions and also give directions as regards particular events. I wonder how many noble Lords have appreciated the display of such signs when travelling to a venue; without them they would probably find some difficulty in reaching the venue or would add confusion to the state of traffic on the roads by going around and around trying to find the correct route. This is a simple, small amendment which I hope the Government can accept. I see no reason for it not to be accepted.

Lord Lucas of Chilworth

I am most grateful to my noble friend Lord Erroll of Hale for moving this amendment which is tabled in our joint names. I would not wish to argue with anything he said. I am also grateful to the noble Lord, Lord Underhill, for his support. He underlines the thinking that lies behind this amendment: we are not promoting the maintenance of some advertising medium; we are trying to ensure that the service provided by three motoring organisations is maintained. It is a question of maintenance because when the London borough council imposed the £10 charge at the beginning of the year this put the maintenance of the service at some financial risk.

The service, as the noble Lord, Lord Underhill, so gently pointed out, is not one of necessarily advertising the venue of an event; after all, everyone knows that the Lord Mayor's Show takes place in London and that Wimbledon always takes place at Wimbledon. The service goes a long way towards easing the traffic flow in and around the areas where those events take place.

The local authorities, the police, British Rail and others all use the service to ease traffic. Unless it is made abundantly clear that the use of road furniture for the affixing of a temporary sign is not to be charged for, the service is in some danger.

Notwithstanding what my noble friend the Minister has said in answer to earlier amendments regarding charges upon which the Committee voted, this amendment is different. It deals with a totally different aspect of life: the safety aspect. I expect my noble friend who is to reply to accede to our request and accept the amendment.

Lord Crickhowell

I intervene with particular pleasure to support my noble friend Lord Erroll of Hale because I am a member of the AA committee of which he is a distinguished vice-president. I wish to make a separate and specific point. I am sure that many Members of the Committee have been involved in organising charity events of one kind or another. The open garden scheme is a good example. Such schemes are almost entirely dependent upon signposts of the kind that we have been discussing. I cannot think of anything more disastrous for those charities and organisations —there are many others but I take the example of those who open gardens regularly —than if they were deprived of the kind of signposting that is frequently done by the motoring organisations, or if those charities had to pay the bill for that signposting. It might make all the difference between a successful fund-raising effort and one that was uneconomic.

I and my wife were involved in organising just such an event earlier this year. It was efficiently signposted by the AA. I do not believe that we could have done the job without that signposting. People would not have found their way to the show and we should not have made anything like so much money. For that reason and for all the reasons advanced by my noble friend, I warmly commend the amendment.

6.45 p.m.

Lord Reay

I have listened carefully to the remarks of my noble friends and of the noble Lord, Lord Underhill. I have considerable sympathy with the dilemma which they describe. Undoubtedly, organisations like the AA and the RAC provide a valuable service in supplying and erecting temporary traffic signs. As they say, there is considerable demand for such a service in connection with special events.

Provision is made in the Traffic Signs Regulations and General Directions 1981 for temporary signs to be erected in order to convey information about convenient routes to sports meetings, exhibitions and other public gatherings likely to attract significant volumes of traffic. The consent of the highway authority must be obtained. The Road Traffic Regulation Act 1984 is silent on the matter of whether, in giving its consent, the highway authority is entitled to demand a fee.

The amendment is designed to overcome that uncertainty by putting it beyond doubt that no charge may be made. I appreciate the arguments which have been advanced, but I am not convinced that we need a statutory prohibition on the face of the Bill. There is no widespread practice of charging, at present. Isolated attempts have been made.

One London borough sought to demand a fee from the AA in return for permission to erect temporary signs. The authority claimed that it was partly an administrative charge and partly to compensate for potential damage to the authority's lamp posts. That is the only example I have of an authority attempting to charge motoring organisations for erecting temporary signs. Even in that case, as my noble friend Lord Errol told us, that borough has reconsidered its policy and has applied a waiver. The amendment addresses a potential threat rather than a current problem.

I accept however the concerns over the imposition of charging for these temporary signs if indeed it became widespread, and the charges were substantial. The effect could be to jeopardise a service which is designed in the interests of road traffic and benefits organisations and the motoring public. That would be regrettable. I am not sure that local authorities would want to step into the breach and provide the service themselves if those present arrangements were to come to an end.

However, we already have the means in the Bill to prevent such a situation. Under Clause 139, it is open to the Secretary of State to make regulations removing from local authorities the power to impose charges, where that power exists. If therefore local authorities proceed to levy charges for the erection of temporary traffic signs, action is already possible under the Bill as drafted to put a stop to that.

I am happy to give my noble friends the undertaking that it would be our intention so to act if the practice of charging for temporary signs became prevalent. I hope that, with that assurance, my noble friends will feel able to withdraw their amendment.

Lord Lucas of Chilworth

Before my noble friend finishes, he might appreciate it if I made it clear that in giving its reason for making a charge as damage to its street furniture the London borough council failed to point out that the AA and the RAC contracts with local authorities expressly indemnify the local authorities against any damage to the furniture, persons or anything else. The reason given was a feeble one.

My noble friend said that charging is not widespread at present and that there has been only the isolated charge to which my noble friend and I referred. It is difficult to define what is going to be widespread. My noble friend the Minister said that Clause 139 gives the Secretary of State powers, and he gave an undertaking that the Secretary of State would take those powers if the practice became prevalent. I do not know what my noble friend Lord Erroll of Hale makes of that. I should like my noble friend the Minister to spell out what he means by a "widespread practice" or a "practice that became prevalent". We, and the clubs and institutions supplying the service, would then know at what stage in the chain a charge may be levied. That may dictate how far they continue the service.

I should be happy if my noble friend the Minister were to say, "Just give me a little bit of time to think about that one. I shall talk to you before the next stage". My noble friend Lord Erroll may wish to wait till then. In the light of what the Minister has had to say, that is the only contribution I have to make to the Committee's consideration of this matter.

Lord Boyd-Carpenter

In view of what my noble friend on the Front Bench said a few moments ago as to the intentions of the Government, and in view of the fact that one incident of charging has arisen, can my noble friend tell me what harm would be done by putting this amendment into the Bill? He did not make any criticism of its drafting. He appears to accept its intention. What harm would be done by putting it in?

Lord Reay

The point is that we are reluctant to legislate to deal with a problem which might come about, but which does not exist at the moment. I do not think there is advantage for me in spelling out further what might be meant by "widespread" and "prevalent". They are ordinary words which mean what they say. This is not a practice that the Government wish to see established. If it were to become prevalent, the Secretary of State would take action to see that it was put a stop to. But I am quite willing to take this back and discuss it with my noble friends, and to listen further to what they say. If they are not satisfied we can come back to it at Report stage.

Lord Erroll of Hale

In view of the assurances which the noble Lord the Minister has just given about further conversations, I am very encouraged. For the benefit of those who think that £10 is a relatively small charge, I would just add that it is not. The average cost of erecting a road sign for the Automobile Association is only about £7.50 and even less for large quantities. So the imposition of a £10 fine, so to speak, per sign more than doubles the cost of the whole exercise, which can be very serious in the case of a small rural charity. But in view of the assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness David moved Amendment No. 177A: Page 126, line 26, at end insert— ("(4) Where material is lent otherwise than on any library premises which, if lent on library premises, would be governed by the provisions of subsection (3) above, nothing in any regulations under this section shall authorise any charge to be levied on an individual borrower of that material.").

The noble Baroness said: Clause 41 deals with charges for library services and my amendment, if I may read it out, is self-explanatory. It reads: Where material is lent otherwise than on any library premises which, if lent on library premises, would be governed by the provisions of subection (3) above, nothing in any regulations under this section shall authorise any charge to be levied on an individual borrower of that material.".

We are just anxious that people should not be charged in, for instance, a hospital where library books are often provided. We do not want people who borrow books there to be charged. Or, indeed, sometimes libraries provide books in schools. I am not sure whether tapes lent to blind people by social workers would be covered, or indeed tapes lent to schools for certain purposes.

So I should like a little clarification about this matter, but I hope that the intention of the Government will be not to charge people who borrow written material in any form in these circumstances. I beg to move.

The Deputy Chairman of Committees (Lord Ampthill)

Amendment proposed, page 126, line 26, at end insert the words as printed in the Marshalled List, save that, in the Marshalled List, the penultimate line of the amendment is printed as "change", and the noble Baroness has moved the amendment as "charge".

Lord Hesketh

I understand that the noble Baroness, Lady David, has put down this amendment on behalf of the Library Association. The association wishes to prevent library authorities charging individuals for lending library services provided to the individuals in hospitals, old people's homes, prisons and other institutions.

The amendment has results which may not have been intended. First, it does not prevent any such hospital or other institution passing on to its residents any charges made by a library authority for providing lending library services in an institution. The amendment, however, does prevent a library authority charging individuals who want a lending service when an institution will not pay for the service, or the library authority itself cannot afford to pay for it, to residents of hospitals, old people's homes and other residential institutions. For example, children in schools, whose parents want to pay for them to have a lending library service in such an institution, would be unable to do so.

Although the Government are very sympathetic to this position, and also I am sure that library authorities and other authorities would be sympathetic to their needs, they may not be in a position to provide such special services unless they could recoup at least some of the expenses.

This amendment would also prevent library authorities earning income by providing lending services to people such as consultants who, for business reasons or convenience, want to have books or other materials delivered to their own homes. If we tightened the clause, even by means other than this amendment, we would remove from library authorities discretion to do what they thought was best taking account of local needs and services. This, we believe, would not be entirely desirable, which is why we resist the amendment in its present form.

Baroness David

I thank the Minister for that reply, particularly the last few words saying that the Government, resist the amendment in its present form". It clearly is a more complicated matter than perhaps we had previously thought. I should like to study what the Minister has said and consult with the Library Association. Having done that, I shall probably return at Report stage with a different amendment which might be acceptable. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 177AZ not moved.]

Clause 141 agreed to.

Lord Reay

I suggest that this might be a convenient time for us to adjourn for dinner. I suggest that the Committee stage be resumed at eight o'clock.

[The sitting was suspended from 6.57 p.m. to 8 p.m.]

Lord Hesketh

With the leave of the Committee may I say that my attention has been drawn by the noble Lord, Lord McIntosh, whose eye for detail in this case is keener than my own, to a duplication of numbers in a handful of amendments in the Marshalled List. The duplications are as follows: five amendments on pages 22 to 27 to Clause 142 are numbered 177AA, 177AB, 177AC, 177AD and 177AE, and five amendments on pages 43 to 45 to Schedule 8 have the same numbers.

I suggest that to avoid further confusion the first set of numbers, those on pages 22 to 27, are left as at present, but that the second set have their numbers amended by the addition of the digit 1 in brackets after the existing numbers. Thus they will be numbered 177AA(1), 177AB(1) and so on through to 177AE(1). I hope that this solves the difficulty. I acknowledge that the Marshalled List is, by this stage of the Bill, very complex. Perhaps I may take this opportunity to pay a tribute to the clerks for the processing of a large number of amendments with their usual efficiency and speed.

Lord Graham of Edmonton

May I say before we proceed that of course we recognise that the enormous pressure that the department and the Ministers have been under has made this situation almost inevitable. However, I do not think that by any stretch of the imagination one could either look on the Minister or me as little one or litte two. It is all part of the Minister's "initial" mistakes.

Lord Renton moved Amendment No. 177AY: Before Clause 142 insert the following new clause—

("Duty of local authorities to deal with peacetime emergencies and disasters.

—(1) Each County Council, District Council, Metropolitan District Council, London Borough Council and the Common Council of the City of London shall be responsible for dealing with all major peacetime emergencies and disasters arising in its area or adversely affecting it or any part of it having arisen elsewhere.

(2) In order to prepare for dealing with such emergencies and disasters, each of those Councils shall prepare plans for doing so after consulting representatives of other public services, the armed forces, industries and voluntary services in their area, and if necessary, neighbouring Councils.

(3) Expenditure incurred in preparing such plans and in dealing with such emergencies and disasters may be reimbursed in accordance with the provisions of section 138 of the Local Government Act 1972 (powers of principal councils with respect to emergencies)."

The noble Lord said: I beg to move Amendment No. 177AY. Grouped with it are Amendment No. 177AYA, which is also in my name and that of my noble friends Lord Mersey and Lady Blatch, and two amendments in the name of the noble Lord, Lord McIntosh of Haringey. They are two new clauses that overlap to a considerable extent with my two clauses. I am glad to say that the noble Lord, Lord Graham of Edmonton, will be moving those.

May I deal with my first new clause, Amendment No. 177AY. It places on local authorities a duty to deal with peacetime emergencies and disasters. Local authorities already have a duty to deal with wartime emergencies and disasters, and it may cause surprise and some concern to the Committee, and indeed to the world at large, to find that although we live in a dangerous, peacetime world local authorities are at present under no obligation to prepare to protect the public when major disasters occur in peacetime. That is a serious gap in our legislation. My first new clause is intended to try to fill that gap in the simplest possible way.

It makes local authorities responsible for dealing with all major peacetime emergencies and disasters and to prepare plans in advance for doing so after consulting representatives of other public services and industries and so on in their areas, and if necessary neighbouring local authorities. Subsection (3) of my new clause may not be strictly necessary, but it removes all doubt with regard to the power given to local authorities under Section 138 of the Local Government Act 1972 to incur expenditure in dealing with peacetime emergencies, and to make grants or loans to bodies which help them to do so. It removes all doubt as to whether, when we make this a duty, that opportunity of raising money for the purposes that I have mentioned is there. My subsection (3) makes sure that it will be so.

May I come now to my second new clause, Amendment No. 177AYA. That requires metropolitan fire and civil defence authorities and the London Fire and Civil Defence Authority to co-ordinate the peacetime emergency plans of, respectively, metropolitan districts and London boroughs. Is it not a strange thought that, although these FCDAs have power to co-ordinate their plans for dealing with wartime emergencies, they have no power to co-ordinate the peacetime plans of districts and London boroughs respectively? The Home Secretary agrees that they should have power to do this, but, rather strangely, he does not consider that they should be required to do so. That is what my second new clause proposes that they should have a duty to do.

Subsection (2) of my new clause is perhaps worth your Lordships being so good as to note. That requires the metropolitan districts and the London boroughs to amend their peacetime plans to ensure that they comply with the co-ordinated plans of the FCDAs. Unless they put in something like that, the co-ordinated plans of the FCDAs would not be effective. We need to have in something like that in order to achieve the purpose that surely everybody has in mind.

I turn to subsection (3) of my second new clause. That is necessary because a real problem has already arisen through FCDAs not having power to incur expenditure in preparing their own peacetime plans and attempting to co-ordinate those of their constituent council. By a simple textual amendment, so as to make Section 138 of the 1972 Act refer to FCDAs, we have ensured that the powers in Section 138 of the 1972 Act are available to FCDAs.

My first new clause is, among other things, necessary for making a reality of my second new clause. Unless metropolitan districts and London boroughs are required to make their own plans for dealing with major peacetime emergencies, FCDAs could find that they do not have all the necessary plans to co-ordinate. It would be an absurd position, and one which I should have hoped the Home Secretary would wish to rectify.

As I have said, we live in a dangerous peacetime world. It was only by the grace of God that London did not suffer nuclear fallout from Chernobyl. But, if it had done so, there would have been no advance plans for protecting the people of London, or for that matter of Birmingham, Manchester or Liverpool if the nuclear cloud had fallen out over them.

Other major disasters of recent years have taken our local authorities by surprise and there has had to be belated improvisation in order to deal with them. I therefore suggest to the Committee that these two clear, simple and new Clauses are necessary. I shall briefly mention the two clauses which the noble Lord, Lord Graham of Edmonton, will move. I appreciate his motives for doing so. As I said, they have almost the same purposes as my two except that —this is a rather important exception—they merely give to FCDAs a power to co-ordinate and not a duty to do so. For that reason and also because I feel bound to say, with respect, that both of the Opposition's two clauses contain far too much detail on which it is unnecessary to legislate, I prefer my two short, simple and clear clauses containing the really necessary provisions and I hope that the Committee will feel the same. I beg to move.

Viscount Mersey

I wish to speak briefly in my capacity as president of the Society of Industrial Emergency Services Officers. I am very much in favour of the new clauses of my noble friend Lord Renton. However, I wish to put to my noble friend on the Front Bench a situation which is reasonably likely to occur; that is an aircraft getting into bad trouble over London and crashing. Part of the aircraft might land in one borough, and part of it in another. As things stand at present, there is no duty on the borough of Kensington, for example, and the borough of Westminster to co-ordinate the salvage and rescue operations on such a crashed aircraft. That is a crazy situation. However, having said that, I know we have to get through a great many amendments this evening so I shall say no more.

8.15 p.m.

Lord Graham of Edmonton

I wish to speak to the two amendments which were so ably introduced by the noble Lord, Lord Renton. He and I have discussed the need for this kind of improvement in our national arrangements over at least the past five years. On the occasions we discussed civil defence we recognised that it often got bogged down in the wartime or peacetime and emergency controversy. However, I am delighted, as I am sure the noble Lord is, that good progress is now being made. We must separate civil defence with its military and wartime connotations from the need for the country to have better arrangements in place than exist at present. Although I shall seek to make the case for my amendments, if they are not accepted the amendments of the noble Lord would be very acceptable. I hope that the Minister will be able to state that he recognises that it is right to legislate on this matter. We would rest content if the Minister would agree to bring forward an amendment on Report, or allow us to bring forward better drafted amendments.

The whole matter rests upon the strength of the words, "co-ordinate", "duty" and "power". One of the things which I believe has been missing has been a clear lead by the Government. I note with appreciation that the noble Earl, Lord Ferrers, is in his place. Undoubtedly he will present the Home Office point of view as that office has a prime responsibility in this area. When I researched this topic I was interested to discover that on 5th September the Home Secretary Mr. Hurd spoke on this matter. He stated that it was his intention: to provide a mechanism by which we can improve and develop our response in the light of experience and wider knowledge … In the event of a major disaster in a metropolitan area the emergency services would of course provide the front-line response—as they do throughout the country. They would be supported by the local authority … To achieve this, I intend to give joint Fire and Civil Defence Authorities a power to co-ordinate the planning of the various Boroughs or Districts. I am now looking for a legislative opportunity". I look forward with interest to hearing the Minister's comments about that legislative opportunity.

This is a serious part of the Bill because, sadly, without remotely apportioning blame, we need to discuss the necessity of having better arrangements than exist at present —that is a rather clumsy phrase —to deal with the kind of disasters that have befallen the people of this country over the past two years. Many of us are aware of the disasters at King's Cross, Hillsborough, Lewisham and Deal. During the war I was a Royal Marine and I know Deal very well. It is a desperate picture but, at the end of the day, we who have not suffered personally can stand back and assess how better co-ordination could have been achieved.

Last week I attended a certain event at Brighton. I, together with a great many other people, paid full tribute to the ambulancemen who were pressing the case for a better deal than they have at present. They stated bluntly that it was all very well to remember them and other bodies at a time of disaster and pay tribute to what they do, but we should have better arrangements to ensure that the agony and trauma of disasters for them is lessened.

We are talking here about arrangements for peacetime emergency planning. Disasters can happen at any time. I live right on the edge of the M.25. Stansted Airport has flight paths above that motorway. Disasters can occur anywhere. They can occur in the North Sea and on the railways. I believe the Government should take on board the fact that although undoubtedly money will be involved as regards such bodies as the fire and civil defence associations or local authorities, we want to see that people involved in tragedies are helped in the best way possible.

The Association of Metropolitan Authorities produced last year a document entitled Local Authorities and Peacetime Emergency Planning. The association has played a major part in stimulating the view among its member authorities, which cover the majority of the population of this country, that we ought to make more satisfactory arrangements. On page 11 of that document the association draws attention to central government's recent actions on civil defence, which the association considers makes the position more critical. The document reads: In October 1986, the Home Office circulated the Planned Programme for Implementation' (PP1) to local authorities setting out six monthly targets for the staged preparation of civil defence plans and linking grant approval mechanisms to progress towards the completion of plans which satisfy the Home Office. This monitoring regime serves to further concentrate both FCDA and District emergency planning efforts on civil defence, as opposed to improving procedures and planning for peacetime emergencies and disasters". I have to tell the Minister bluntly that there are those who are just a little concerned that far too much attention has been paid to urging authorities to be ready for disasters in wartime and as a consequence less attention has been paid to preparation for disasters in peacetime. I am not concerned with the nuclear and anti-nuclear arguments which often arise in connection with civil defence. I have evidence (which I do not wish to read into the record) from a number of local authorities which are concerned that there has been a lack of attention in the centre to making such arrangements possible.

The Minister will recognise that there is no great disagreement between the noble Lord, Lord Renton, and myself although I have three pages showing the textual differences between our amendments, carefully prepared by those who advise me. However, I can assure my good friend, the noble Lord, Lord Renton, that we are not too far apart in terms of what we want to achieve, which is a better set of arrangements than we have at present. Whether that involves interfering with powers or laying down a duty is a matter to be resolved.

I hope that the Minister will consider an input into the Bill which will provide for more satisfactory arrangements than we have now and which rely on more than exhortation to do one's duty and make one's preparations. That is where we come to the question of how heavily one wants to lay down duties. I appreciate that when one lays down duties money has to be made available in order to fulfil those duties; otherwise they are meaningless.

I am sure that the Minister will recognise that these questions are raised genuinely and sincerely. We do not want to be as ill-prepared as we have been on some occasions when a major disaster has occurred. Those involved and their families deserve better from Parliament. I am happy to have spoken to my amendments and I look forward with appreciation to what the Minister has to say.

Baroness Elliot of Harwood

I support very strongly the amendment moved by my noble friend Lord Renton. I am a perfectly ordinary citizen and have lived in London for a great part of my life, and I had no idea that there was no organisation which could deal with the disasters which arise all too often and which occurred very recently in London and the metropolitan area and at Lockerbie.

I had always understood that there was an organisation which, through local authorities, would be able to deal with such disasters. I was horrified to hear from my noble friend Lord Renton that there is none. The organisation to deal with wartime crises exists —and pray God we shall never have to use it again —but there is nothing to say that a local authority has responsibility for such disasters in peacetime. Those appalling disasters have shocked everybody and must have been a terrifying experience for those who were unlucky enough to be involved.

It seems quite extraordinary that we do not have a policy and programme to cover such crises, just as we had in wartime. I hope that the Government will take this issue to heart and see that such a policy is carried out. It is incredible that there is no one who is, responsible for dealing with all major peacetime emergencies and disasters arising in its area or adversely affecting it or any part of it having arisen elsewhere". Is nobody prepared to co-ordinate the work? Is nobody prepared to implement a policy before a disaster happens? After it happens it is too late because the disaster is on us.

I hope that the noble Lord who will reply will take this to heart and say that the provision will be incorporated into the Bill. This is an opportunity so to do, and the proposal has the support of everyone in this Chamber. The noble Lord who has just spoken so brilliantly and with great understanding, and all Members of this Committee, are in the same position: we want to do the right thing. Certainly to leave things alone and do nothing is wrong. I hope that the Government will take the issue seriously and include the amendment in the Bill.

Lord Ross of Newport

I should like to support the amendment of the noble Lord, Lord Renton, whose efforts in this direction should be applauded on all sides of the Chamber. In the other place and in this Chamber he has constantly pushed proposals for a proper co-ordination of the various bodies involved in emergency planning.

Nobody would say for one moment that things do not get done now. They do. However, we have been very unhappy with the way in which matters develop. When there was a serious oil spillage in Sandown Bay, off the Isle of Wight, the matter was dealt with by an admiral based at Southampton. I was staggered that there was such a laissez-faire attitude. One had to go through all kinds of bodies in order to get things moving.

No one could criticise the fire brigade and the ambulance service, which, in major disasters, are on the spot in double quick time. But we want to make it totally clear where the responsibility lies and we want a great deal more done at local level. The chief executive of my former county council, the Isle of Wight County Council, John Horsnell, has played a large part in this. He has prepared papers for the county council association on the subject in the past. No doubt those papers are known in the Home Office.

Here is an opportunity to include in legislation a provision very like what the noble Lord, Lord Renton, and the noble Lord, Lord Graham, have proposed in their amendments. I hope very much that we shall not lose that opportunity and that responsibility for emergency planning, which seems to fall between two stools, will be clearly set out. It is the local authorities' responsibility, and their responsibility as the co-ordinating authority should be clearly shown. I am delighted to support the noble Lord, Lord Renton, in the role that he has played in this field.

8.30 p.m.

The Minister of State, Home Office (Earl Ferrers)

My noble friend Lord Renton said in moving his amendment that there was not very much difference between the amendment that he had set down and the amendments tabled by the noble Lord, Lord McIntosh of Haringey, to which the noble Lord, Lord Graham of Edmonton, spoke. I think that that is true. Basically they all cover the same ground. The noble Lord, Lord Graham, also said so, but he then went on to say that he had three pages of differences but was courteous enough not to rehearse them all to the Committee.

I shall not be tempted by my noble friend Lady Elliot of Harwood to challenge her when she said that no one is prepared to co-ordinate and that there is no policy. There is a great deal of co-ordination and a great deal of policy. We have all seen the reactions to the civil disasters and realise that they have been astonishing in their proficiency. The reactions could not have happened without both policy and co-ordination.

However, I realise that the points made by my noble friends Lord Renton and Lord Mersey —both of whom are very much involved in the civil defence area —and those raised by the noble Lords, Lord Ross of Newport and Lord Graham of Edmonton, are important and were raised very genuinely. The noble Lord, Lord Graham, said that he hoped that the Government would take the matter seriously. I can assure him that we do so. We are all concerned to see that our response to those terrible disasters should be as good and as proficient as possible. There is nothing between us on that. The only thing that might be between us is the method by which that comes about, but there is not too much between us on that matter either.

The amendments have two aims. The first is to give local authorities a statutory duty to plan for civil emergencies. The second concerns the co-ordination by the fire and civil defence authorities of planning by the districts. The arguments in favour of a statutory duty on local authorities to plan for peacetime emergencies were extensively discussed during the course of the review of civil emergencies which was carried out recently by the Home Office. In announcing his conclusions in June of this year, my right honourable friend the Home Secretary noted the strongly expressed views of support for such a duty, but said that he was not at that stage convinced of the need for legislation.

Although the law as it stands at present does not require local authorities to prepare for civil emergencies,that does not mean that it is not being done. By and large, it is being done. As we have seen from the response to the recent emergencies, it is being done very effectively. Much work is already going on without a specific duty to do it. My right honourable friend would like to see that line pursued as far as possible as the immediate priority, but he has made it clear that the position will be Kept under review as work progresses, and a judgment will be taken later. I do not think that anything that has happened between June and today justifies a sudden decision now.

The Committee will recall that my right honourable friend announced in June that he intended to appoint a civil emergencies adviser. That appointment is likely to be made shortly. That is exactly the kind of issue to which the civil emergencies adviser will wish to give his attention. At present, my right honourable friend feels that there is no need for a duty. The work is being done without it. However, if after careful inspection the adviser considers that any tightening that may be necessary cannot be done without legislation, he will advise my right honourable friend accordingly. I therefore think —and I hope that the Committee will agree—that we should take the matter one step at a time.

The question of fire and civil defence authorities co-ordinating the planning of their constituent districts or boroughs is something to which my right honourable friend the Home Secretary has already given agreement in principle. There is not, therefore, too much between us, but I recognise that there may be something between us. I share the view of noble Lords who have tabled the amendments that it is important for fire and civil defence authorities to have such a power. But the power is to co-ordinate. There is an important difference between co-ordinating planning—as a way of helping the districts or boroughs —and directing that planning.

The amendments go beyond simply providing assistance. They would in effect give fire and civil defence authorities a power to determine and direct the planning of a given district, but it is only the districts or the boroughs that have the legal functions and resources to respond to an emergency. I do not believe that it would be right for the fire and civil defence authorities, which have none of those functions or resources, to determine how the operational bodies should respond on the day. That would go right against the essential principle of local responsibility for leading the response to an emergency. It would also conflict with the whole principle that lay behind the abolition of the Greater London Council and of the metropolitan counties.

As my right honourable friend the Home Secretary recognised, there is a need for fire and civil defence authorities to provide a co-ordinating planning service —I hope that I take the noble Lord, Lord Graham, with me on that point —in order to help the districts to meet their operational responsibilities in any disaster that may affect a large part of a major city. I think that I can meet the wish of the noble Lord, Lord Graham, that the Government might bring forward an amendment at Report stage. It is our intention to do so. Our amendment will confer that power on the civil defence authorities, but the districts and boroughs will —as they must —have the last word on their own operational plans which involve their own resources.

I hope that I have explained the position to the Committee and that noble Lords will see that there is not much between us on this matter. I hope that my noble friend Lord Renton and the noble Lord, Lord Graham —both of whom put down the amendments —will feel minded to withdraw them in order to allow me to put down a government amendment at Report stage along the lines that I have outlined.

Lord Hylton

It seemed to me that, in replying to the amendments, the noble Earl, Lord Ferrers, took a slightly complacent line. He seemed to imply that everything is marvellously well handled after major disasters. Perhaps I may speak from the experience of a personal friend of mine who was involved as a volunteer in counselling affected people after the Hillsborough football stadium disaster. It seems that it was pretty difficult or perhaps more difficult than it should have been, for relatives and friends of those involved to discover who had been killed and injured. It is also clear that the bereavement counselling of families in one place who had had a relative in hospital in another place left quite a lot to be desired. So I hope that the Committee will not gain the impression that these matters are as well handled as they might be.

Lord Graham of Edmonton

I know that the noble Lord, Lord Renton, is entitled to have the last word before we leave the debate, so I simply wish to make my supplementary comments.

I did not for a moment wish to imply that the Government do not take these matters seriously, but the Minister said that the work is being done without there being a duty. The noble Lord, Lord Renton, shakes his head. He will no doubt put that expression into words when he rises to his feet. The sad thing is that, as long as a major disaster is dealt with as brilliantly as it is, there is a tendency when it is all over to believe that not much more could be done.

However, those who are involved know very well that they could do the job better, quicker, more painlessly and more humanely if there was more of whatever it is they have —more resources, more planning and so on. The Minister then said that he felt that in due course the committee that has been set up will perhaps come forward with recommendations along our lines. But I did not use the word "complacency". The words that I have in my scribbled notes are, "There is urgency". I should like to feel that the Minister and his colleagues accept that this is one of a list of priorities that must be dealt with.

The excellent AMA document quoted the Bradford Disaster Information Seminar and stated: The statutory requirement on local authorities to plan for wartime disaster but not for peacetime disaster except in so far as a hazard came under the … (CIMAH) Regulations was thought to be a deterrent to a uniform level of peacetime planning across all authorities". A seminar of the Association of Directors of Social Services said that, most authorities reported that disaster planning appeared not to take place partly perhaps because many local authorities associated emergency planning with nuclear (war) disasters and many had declined to participate in this". There is a widespread view, it is said, that the preoccupation with civil defence has seriously hindered the development of effective peacetime emergency planning practices by local authorities in Britain. I take the view that through this debate we have a fresh opportunity to remind ourselves of our responsibilities towards those who may in the future be involved in a major disaster. I am well aware of the resources, priorities and inclinations of various authorities but I believe that we shall only serve those people who sadly may be involved in disasters in the future if we leave the Minister with a clear view that this Chamber at this time wants him to be as positive, assertive and authoritative as possible in making sure that those who can carry out these duties at a local level are given the powers, duties and responsibilities.

Lord Renton

I am very grateful to the noble Lord, Lord Graham, for what he has said in both his speeches. I am also grateful to all those noble Lords who have unanimously supported the view which I expressed when moving the first of these amendments. I had read the outcome of the Home Office review. I had read the Home Secretary's two speeches since then. I must say, and it would be hypocritical of me if I did not say it, that I found the outcome of the review and the speeches very disappointing. It was with a view to obtaining something more positive —more urgent, if you like —and to filling a serious gap that I put forward these two amendments today.

Perhaps I may briefly answer points made by my noble friend Lord Ferrers. He said that there is co-ordination when there are disasters. All I can say is that it is generally improvised and is not the result of prior planning. The performance of local authorities in using such powers as they have at present is patchy even in London. I am told by representatives of the London Fire and Civil Defence Authority that some boroughs are very good; others do not want to know anything about co-ordination. To leave matters in that state is not good enough in the public interest.

My noble friend said that local authorities should have power to co-ordinate and threw in the phrase—I do not know whether he meant it but hope he did —"and to direct the boroughs". If that is to be in his amendment I would take some heart from it. Without a power on the part of the people making the co-ordinating plans to insist that the plans they are co-ordinating comply with the overall plan we should be enacting a dead letter and the co-ordinating plan would be ineffective.

So while I welcome the small mercy that we have received —that we shall have a government amendment at the Report stage, which of course we all welcome —I hope that it will be a government amendment which not only gives power to co-ordinate but also power to ensure that the co-ordination is effective by requiring the metropolitan districts and the London boroughs respectively to comply with the co-ordinating plan. Without that one might just as well not have a co-ordinating plan. We shall have to wait to see what happens at the Report stage so far as the co-ordination is concerned.

As to the duty on local authorities, I think it would shock the great mass of people in this country to know that local authorities have no duty and that as a result their performance is very uneven. All one can do is hope that we have made some impact on the thinking of the Home Secretary and the Home Office by this debate. It is not a matter that we can leave alone indefinitely. To wait until the new adviser has taken stock of the situation and advised the Home Secretary that more legislation is necessary would mean that instead of dealing with the matter in this Bill we should have to wait until there was another local government Bill, or another legislative opportunity, jockeying for position in a huge legislative programme in a future Session. That is not good enough.

With those words, about which I must confess I feel deeply, I beg leave to withdraw my first amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

[Amendment No. 177AYA not moved.]

Clause 142 [Emergency financial assistance to local authorities]:

Lord Graham of Edmonton moved Amendment No. 177AA: Page 128, line 8, at end insert — ("(1A) The Secretary of State shall, before establishing a scheme under subsection (1) above, undertake consultation with such representatives of local authorities specified under subsection (4) below as appear to him to be concerned

The noble Lord said: In moving this amendment which has been tabled in the name of my noble friend Lord McIntosh of Haringey I want to speak also to Amendment No. 177AB. This amendment relates to the so-called Bellwin rules. Local authorities have made their opinion of those rules very clear. The amendment should also have dealt with consultation with Scottish authorities.

The recent events at Hillsborough, together with those at Clapham and King's Cross as well as the storm damage in 1987, have highlighted the need for a proper scheme of financial assistance to those authorities dealing with emergency and disaster relief. We have been talking about planning and co-ordination. We are now talking of the extent to which local authorities who carry out their responsibilities, if not duties, and who do a marvellous job are compensated for doing so.

The existing Bellwin rules, which ultimately were modified in respect of the 1987 hurricane only, place a heavy burden on those authorities within whose areas a disaster occurs. Under this system an authority must first spend the product of a penny rate. Only then will the Government provide financial assistance to meet 75 per cent. of expenditure above that ceiling. The rules erroneously assume that authorities have unlimited contingency funds. They require individual councils to meet the costs of national disasters.

We believe that the Bill provides an ideal opportunity to develop a new and more realistic scheme of financial assistance which secures a higher level of central government aid, with particular emphasis on reducing initial local expenditure. Local authorities, who are always in the front line when dealing with emergencies, quite properly will expect to be consulted on any such scheme. The lack of provision for consultation in this part of the Bill is disturbing. It suggests that the Government are not accepting their responsibilities in this area.

Amendment No. 177AB has the purpose of ensuring that grant aid given under any such scheme takes full account of the need to achieve a speedy and comprehensive response. Perhaps I may illustrate that by reference to the storm damage that occurred in the autumn of 1987. The Government finally decided to extend the total expenditure exclusion (which relieved local authorities from block grant loss) to cover all storm-related revenue expenditure above the Bellwin rules threshold. Debt charges on capital expenditure on storm damage on 16th October to the end of March 1989 was also excluded for 1987–88 and 1988–89. This recognised the magnitude of the damage and its disproportionate effect on the southern part of the country including London. Both emergency services and long-term work such as re-planting trees were necessary. The Government's variation to the existing scheme went some way towards recognising this. Amendment No. 177AB would require that in determining the terms and conditions he feels appropriate to any such scheme, the Secretary of State must consider the maximum practicable response. It is not only emergency repairs, for example, but long-term improvements, including substantial repairs to buildings—not just making good —and re-planting trees that are unlikely to be covered by insurance as they were previously in good health. Even the scope of immediate works may be broad ranging.

The experience of the London borough of Barnet of the damage included partial blocking of the A1, the A406 —the North Circular road —and the A41. Other routes were totally blocked. Many routes blocked several times during the first 12 hours of the storm required repeated clearance. In Hendon Park, Brent Park and Oakhill Park 4,500 trees were lost. Damage to roads and footpaths was caused by trees falling and uprooting. serious damage was caused to lamp columns, bollards, road signs and central island beacons. Serious flooding in many areas was averted only by the efforts of the council's own staff and contractors together with help from the Army. Following numerous representations the Secretary of State modified the application of the Bellwin rules. Surely it is quite straightforward to require the Secretary of State to take a wide overview of all aspects of local authority response to disasters in the administration of any scheme to pay for this response. I beg to move.

Lord Renton

First, we should acknowledge that Clause 142 is very helpful. It is something that perhaps we may have borne in mind, to the limited extent to which it is relevant, when discussing the previous amendments just now.

I welcome the amendment moved by the noble Lord and the next amendment to which he spoke. Technically, I would have some doubt about his third amendment. I would want to know what inspired it and what the implications would be. It is a very unusual provision. I am not sure that it is necessary and I would have very grave doubt in supporting that amendment. However, I believe that his first two amendments are helpful.

The Earl of Caithness

I am grateful to my noble friend Lord Renton for welcoming Clause 142. I am also grateful to the noble Lord, Lord Graham of Edmonton, for so clearly explaining the amendments.

Under Section 138 of the Local Government Act 1972 the primary responsibility for dealing with emergencies rests with local authorities which are expected to make provision in their budgets for such events. However, the Government recognise that authorities might sometimes face an undue financial burden if they did not offer relief. The present model scheme under which Ministers may decide to offer relief in exceptional circumstances was set up following the recommendations of a joint government/local authority committee which studied the issue in 1982. The amount of grant which authorities receive is currently based on expenditure above a threshold tied to their penny rate products, as the noble Lord, Lord Graham, explained. With the introduction of the community charge in April there will clearly have to be a different basis for the scheme. We are considering the question of threshold and grant levels at the moment and will then consult the local authority associations. Amendment No. 177AA would require us also to consult the associations each time the scheme is activated. Consultation is a very time-consuming business whereas after any disaster the Government should move rapidly to reassure local authorities. I hope that as we shall already have consulted on the workings of Bellwin under the new financial scheme that the noble Lord will agree that fresh consultation after each emergency is unnecessary.

I also have considerably sympathy with the noble Lord's aim in Amendments Nos. 177AB and 177AC. Authorities should certainly be encouraged to make the most effective response to an emergency. The level of grant should be such that authorities should not be discouraged from undertaking the necessary work, but they should also be encouraged to use the resources available to them, both those provided by grant and those raised from the local taxpayer, in the most cost effective and efficient way.

As I have said, we are currently taking a fresh look at how the Bellwin scheme will work in the context of the community charge. The model scheme will be the subject of consultation with the local authority associations before it is introduced. Let me reassure the noble Lord that the Government also wish to see a scheme which will promote the most efficient and effective response to emergencies on the part of the local authorities. In view of what I have said, I hope that the noble Lord will agree with me that perhaps the best thing to do is to wait until we have had our further thoughts and consultations with the local authority.

Lord Renton

Before the noble Lord, Lord Graham, replies, perhaps I may add this. First, we should be very grateful to my noble friend for the open-minded way in which he has responded to these amendments. I hope that it is not irrelevant for me to mention that whether or not these amendments are accepted, the clause removes any financial excuse there may be which local authorities might use for not making provision for emergency.

Lord Graham of Edmonton

I am grateful, as is the noble Lord, Lord Renton, for the tenor of the Minister's response, which is all important by giving a good or bad impression. The Minister has left a good impression not only that he understands but that he will take on board the gravamen of what we have said. Has the Minister in mind any timescale in which these consultations are likely to take place. I wish to know whether they are in the next month or two, or beyond.

Amendment No. 177AA does not ask for consultation after each disaster but before a funding scheme is established. The Minister was quite right to say that one could not work out such a scheme after each disaster. However, if there are meaningful discussions and compromises are reached in obtaining the views of the Government and the authorities when the funding scheme is created it would assist greatly. I am minded to withdraw my amendment unless the Minister has a comment before I do so.

The Earl of Caithness

I am grateful to the noble Lord. I should like to try to answer the point that he raised. I understand that we hope to have discussions this winter with local authorities.

Lord Graham of Edmonton

I believe that spring will be a little late next year. In that case winter could continue for a long time. I hope that it is not a winter of discontent. Winter could continue until next March or April. We shall have to wait and see. That is the best offer that we have received. I give seasonal greetings to you all! I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 177AB and 177AC not moved.]

Clause 142 agreed to.

[Amendments Nos. 177AD and 177AE not moved.]

Clause 143 agreed to.

9 p.m.

The Lord Advocate (Lord Fraser of Carmyllie) moved Amendment No. 177B: After Clause 143, insert the following new clause:

("Prevention of continuance or recurrence of default of local authority: Scotland

. —(1) Section 211 of the Local Government (Scotland) Act 1973 (provision for default of local authority) shall be amended in accordance with this section.

(2) After subsection (2) there shall be inserted the following subsections— (2A) If the Secretary of State or appropriate Minister—

1. (a) is about to make an order under subsection (2) above; and
2. (b) is satisfied that the failure to which the order relates has continued or recurred,

he may, in that order and without any local inquiry, declare the authority to be in default in respect of the continuance or recurrence of the failure and direct them for the purpose of remedying the default to take such steps and within such time or times as may be specified in the order. (2B) The Secretary of State or appropriate Minister may, in an order under subsection (2) above, notify the local authority that any continuance or recurrence of the failure in respect of which the authority have been declared to be in default happening after the date of the order may be made the subject of an application to the Court of Session under subsection (3A) below.".

(3) After subsection (3) there shall be inserted the following subsection— (3A) If —

1. (a) a local authority have been notified under subsection (2B) above; and
2. (b) there has been any such continuance or recurrence as is mentioned in that subsection of the failure to which the notification relates,

the Court of Session may, on the application of the Lord Advocate on behalf of the Secretary of State or appropriate Minister, order specific performance of the functions in respect of which there has been such continuance or recurrence of the failure and do otherwise as to the court appears to be just.".").

The noble and learned Lord said: I speak also to Amendments Nos. 188RA, 190A and 190F, which make consequential additions to the provisions for commencement and extent in Clause 164 and to the title of the Bill. The purpose of the new clause can be briefly stated. It is to remedy a deficiency in the existing provisions in Section 211 of the Local Government (Scotland) Act 1973.

Under that section, if a complaint is made to the Secretary of State for Scotland that a local authority has failed to comply with a statutory requirement, or if he thinks that an investigation should be made as to whether a local authority has so failed, he may cause a local inquiry to be held. If, after the local inquiry, he is satisfied that there has been a failure to comply, the Secretary of State may make an order declaring the local authority to be in default and requiring it to remedy the default. If it does not, as Lord Advocate I may ask the Court of Session to order specific performance of the function in respect of which there has been default.

Because the default power is infrequently used, it has until recently appeared to be quite straightforward and satisfactory. However, it has now become evident that a default order can only refer to defaults up to the point at which they have been the subject of a local inquiry. If the default continues or recurs after the inquiry, that is a separate matter which would have to be the subject of another inquiry and another default order. The second default order would be able to deal only with what had been considered at the second inquiry. Thus in theory the process could be repeated indefinitely.

The amendment will allow continuing or recurrent default to be dealt with in a more sensible manner. If an inquiry has been held and the Secretary of State is satisfied that the default has continued or recurred after the inquiry and before he makes a default order, he will be able to order the authority to remedy such default. He will also be able to notify the local authority concerned that any further continuation or recurrence of the default after the order may be the subject of an application by me to the Court of Session.

There is nothing remarkable or sinister about these amendments. Scottish local authorities are in general very responsible and law-abiding, and, as I said earlier, the default power in Section 211 is not in frequent use. It is nevertheless obviously unsatisfactory that the existing procedure allows continuing or recurrent default to be dealt with only as a series of unrelated events. The amendments do not substantially add to the powers of the Secretary of State. They simply permit the rational exercise of his existing powers in circumstances which were not originally foreseen when the provisions were enacted. I beg to move.

Lord Carmichael of Kelvingrove

The Committee will be grateful to the noble and learned Lord the Lord Advocate for explaining so fully the new clause, which all of us who are not legally trained are aware is highly technical. We were able to follow the explanation to some extent, but it would have been easier for myself and perhaps other noble Lords if the noble and learned Lord had been able togive us some examples of why or how the deficiency in the law was discovered. When one sees in a new clause that changes to an order can be made without any local inquiry, one is naturally a little concerned.

I understood from the noble and learned Lord's introduction that there could be a continual series of these inquiries, which may be very time-consuming. However, he said that the provision was hardly ever used and that the Scottish local authorities are a law-abiding group. If it is the case that the section is hardly used and that the local authorities are a law-abiding group, I believe that we should be given more reasons that just tidying up the law for such a technical amendment as this, which, without my fully understanding all the legalities of it, strikes me as being a sledgehammer to crack a nut. Is there a reason for this or did it happen merely because someone looked through the Bill and some sharp mind felt that this could cause trouble? Can the noble and learned Lord add just a few words to try to help me out of this difficulty?

Lord Fraser of Carmyllie

I am happy to attempt to elaborate briefly on this matter. However, I emphasise to the noble Lord that by introducing these provisions we are not in any sense depriving local authorities of their right to go to court to have any matters that concern them dealt with by the Court of Session in Edinburgh.

To put it shortly, let us take the case of a local authority in Scotland which has set about doing something which the Secretary of State considers is beyond its powers and accordingly it is in default. He orders an inquiry to be held. The evidence that is brought before the reporter to that inquiry will clearly deal with matters only up to the date of the inquiry. It may take some time subsequently before the reporter reports to the Secretary of State. It may be only a matter of months. Nevertheless, it is a period of time. If the Secretary of State then considers what is before him and determines that the local authority has been in default, a further period of months may have elapsed, while the local authority, believing that what it was doing originally was correct, continues doing it.

If the Secretary of State were then to request of me that I should make application to the Court of Session, that might mean a further six months of activity by a local authority and exactly the same default as that which occurred prior to the inquiry. But that could not be the subject of any consideration by the court. This measure aims to facilitate matters in those circumstances and to ensure that at one time all the activities of the local authority in that same area of default are dealt with in one instance by the court.

The noble Lord talked about a sharp mind. I must confess authorship in this matter. I do not think it is a matter of being sharp. This measure is certainly of value to the Secretary of State for Scotland but it also appears to me, in the circumstances for which we are hoping to provide, that it would be of advantage to the local authority. The local authority would not be faced with a possible repetition of a number of inquiries. If it felt strongly about its view and that it was a matter which should be settled by the court rather than the Secretary of State in a single instance, then it could have that resolved. With that further explanation I hope that the noble Lord will accept that there is nothing sinister in what is proposed.

On Question, amendment agreed to.

Lord Graham of Edmonton moved Amendment No. 177BA: After Clause 143, insert the following new clause—

Lighting of highways: grants

(" . Where a local highway authority decide to execute works to improve the lighting of any highway for which they are the highway authority, and where such improvement will bring the standard of lighting to that highway within the appropriate Code of Practice for Road Lighting of the British Standards Institute, the Secretary of State may make such contributions as he thinks fit towards the expenses incurred by the local highway authority in the execution of those works.").

The noble Lord said: This amendment deals with a very important problem and one which concerns millions of people in this country; namely safety and security in the streets. This amendment seeks to encourage the Government to assist those authorities which are prepared to do rather more than they are doing at present.

I believe that it is well within the knowledge of many people in this Chamber and also outside that the fear of violence is something women face every day of their lives. The possibility that in your community and in mine more vandalism, more mugging and more rapes take place as a result of our streets being less well lit than they might be is a cause for great concern.

I pay full tribute to a body called the Safe Company Campaign. I have some interesting information. It made a survey of women and these are some of the responses which I am sure will be generally accepted as valid by this Chamber and outside. Over half of the women questioned, 55 per cent., have been followed, rising to 63 per cent. if they are slightly built; 33 per cent. were terrified and a further 49 per cent. scared. For the 37 per cent. who have been "flashed" at, the most common feeling is surprise, 45 per cent., and anger, 28 per cent.; 53 per cent. just looked away and did nothing. London seems to be the "flashing capital" of the country. Forty-three per cent. of London women have experienced that at some time.

There are some other interesting statistics and responses from women who have had some very nasty experiences which have been directly attributed to bad lighting.

As a result of a survey into this matter, perhaps I may relate to the Committee an experience from the constituency which I was proud to represent and where I still live in Edmonton. Before improved lighting was installed in Salisbury Road, Edmonton —which I know very well —21 incidents of crime were reported during one week in that road. After installation those were reduced to just three. Before the study 65 per cent. of men and women said they feared for their safety when walking down Salisbury Road. After the study 62 per cent. of men and women said that they felt safer. Better lighting also encourages people to use the streets more and increases the likelihood of eye witnesses to crime.

The relative costs are quite staggering. It costs approximately £400 to £500 to replace one street light. In March 1989 the Home Secretary estimated that it cost £2,000 per day to keep one policeman or policewoman on the beat. Street lighting as a move towards crime prevention seems to be cheap at half the price.

The gravamen of this amendment is to ask the Minister to see sense in making more money available for street lighting so that the authorities improve the standard of their street lighting. No Member of this Chamber would be able to draw up a standard but fortuitously the British standard is already available. British Standard Road Lighting Part 3, Code of practice for lighting for subsidiary roads and associated pedestrian areas states that: The main purpose of lighting for the areas covered by this Part…is to enable pedestrians to orientate themselves and detect vehicular and other hazards, and to discourage crime directed against the person and property. The lighting on roads should provide guidance for motorists, but may be insufficient for revealing objects on the road without the use of headlights". Another part on lighting struck me as eminently sensible: To provide a sense of security it should be possible to recognise, in time to make an appropriate response, whether another person is likely to be friendly, indifferent or aggressive". There is much more and if time permitted I feel the Committee would be interested in hearing it.

I should like to hear from the Minister that he recognises the problems, as I am sure he does, and that he can tell us of the measures that are being carried out. In particular I want him to deal with the benefit that can arise as a result of our roads being better lit. It is as simple as that.

I know that the Minister will say that it is up to authorities as to how much money they ask for, that there are allocations and grants and that if the authorities do not spend on lighting that is up to them. I believe that authorities need to be encouraged. From the London borough of Enfield, which took part in the scheme, I can say that I have already satisfied myself, based on experience, that better lit roads will do much to reduce the worry, particularly of women, who are scared to leave their front doors and walk down the roads. More importantly, it will help to create a better atmosphere in our communities. I beg to move.

9.15 p.m.

Baroness Masham of Ilton

"Crack" is the very dangerous drug which makes those who take it violent and desperate. We have been warned by the Americans to do all we possibly can to avoid the terrible violence connected with that drug. Perhaps better lighting would be one measure that would help overcome the problem. Therefore, I support the amendment.

Lord Reay

This new clause would give the Secretary of State for Transport a discretionary power to make grants to local highway authorities towards the cost of improving street lighting to the latest standards. Since the Secretary of State already has a duty to make grants towards local highway authorities' estimated capital expenditure on highways and the regulation of traffic by virtue of Sections 87 and 88 of the Local Government Finance Act 1988, the new clause proposed by the noble Lord would serve no useful purpose.

Although, in our view, the clause is not needed I would not wish the noble Lord to think that that might mean the Government would not give proper attention to the matter to which he has drawn attention. I should therefore like to take just a few minutes to explain the position in detail. First, I should like to say that the Government fully appreciate the importance of good street lighting. Not only does it improve traffic and pedestrian safety, it has the valuable by-product of improving public safety in general by deterring personal assaults and other crimes.

Turning to the specific question of finance, let me explain how the Government already support local highway authorities financially. As I have said, the Secretary of State already has the power under the Local Government Finance Act 1988 to make grants towards local authority capital expenditure on roads, which implicitly includes the lighting systems. At present the Secretary of State for Transport makes use of that power in paying transport supplementary grant towards the cost of building new roads of more than local importance and also towards the cost of work to improve existing ones. A large part of the grant is allocated to help pay for named major schemes costing over £1 million, but some expenditure on minor schemes (costing less than £1 million) is also accepted for grant. Expenditure on lighting improvements obviously falls into the latter category.

Subject to the enactment of the Bill now before us, from next year local highway authorities will also receive, in addition to any TSG, an annual capital guideline for their spending on roads. The guidelines which each authority receives for all the services it provides will be added together to arrive at, after making an allowance for the authority's ability to finance its expenditure from capital receipts, its credit approval; that is, the limit of its borrowing to finance capital expenditure during the year. That credit approval will be taken into account in calculating the authority's standard spending assessment, and so capital expenditure on roads will be supported not only by transport supplementary grant but also by revenue support grant.

Each year all highway authorities are invited to submit a statement of their transport policies and programmes to the Secretary of State and, as part of these, their bids for TSG and capital cover for the coming year. The bids for 1990–91 are being considered within the Department of Transport now, and it is expected that the Secretary of State's decisions will be announced towards the end of next month.

In their latest bids many highway authorities have drawn attention to the case for higher expenditure on street lighting. It seems that in some areas there are many lighting columns which were erected about 30 years ago and which are now at the end of their serviceable life. When they are replaced by new columns, the authorities will be able to install modern lighting equipment which will perform more efficiently and more effectively than the present systems. If some authorities also wish to install new equipment on existing lamp standards there is no reason why they should not do so within the limits of their resources.

Ministers will take account of highway authorities' bids for expenditure on lighting when deciding on the allocation of TSG and annual capital guideline, but once the block allocations have been made, it will be for authorities to decide for themselves how to use them.

The importance of street lighting was drawn to the attention of the Minister for Roads and Traffic recently by an Adjournment Debate on the subject in another place. He has also recently discussed this subject, among others, with a delegation representing the district councils in Greater Manchester. Over the next few months the Minister will be chairing the annual Regional Consultative Committee meetings which his department holds with local highway authorities to discuss matters of common interest and concern. They will all therefore have an opportunity to bring any special local problems they have directly to his attention.

I hope that the noble Lord will be reassured by what I have said and agree to withdraw the proposed new clause.

Lord Graham of Edmonton

I am most grateful to the Minister and his advisers for taking the opportunity that this amendment has provided to make clear to me and, I hope, others outside that he is anxious to see a better standard of lighting in our streets. I have had access to the report of the debate in another place where the Minister for Roads and Traffic replied to my honourable friend Ms. Walley, the Member of Parliament for Stoke-on-Trent, North.

The reports of that debate and the debate this evening will be read by those in the industry and they will be encouraged. There is a lighting federation industry. Should all the authorities want to improve their lighting will the money be made available? The Minister was careful to say that all is "within limits". The transport supplementary grant, the programmes and the capital allocations are all controlled by the Government. If they want to take an exceptional step with those who wish to improve their street lighting to conform with the BSI standard then the money could be provided.

A great deal of work would be made available besides a great deal of safety, security and peace of mind. It requires the will of the Government to do a little more and to be more adventurous and enterprising. They should act a little out of character in saying that here there is a special problem and that they are prepared to make special money available in order to say to millions of people, particularly women, that the streets of our country should be made as safe as possible.

I am grateful to the Minister because I believe he has dealt with the matter sympathetically. I have taken heart from what he has said. This subject will continue to be debated. In the light of what the Minister has said I hope that I shall not have to raise the matter again in some other form at a later stage.I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 177BAA: After Clause 143, insert the following new clause—

Amendment of Local Government Act 1966.

(". In section 11, subsection I of the Local Government Act 1966—

1. (a) In subsection (1) for the words "in the exercise of any of their functions", there shall be substituted the words "in the fulfilment of their duties under section 71 of the Race Relations Act 1976".
2. (b) In subsection (1) for all words after "within their areas" down to and including "those of the community" there shall be substituted the words "groups of persons distinguished from the majority of the population within the jurisdiction by their race, colour, or ethnic origin."
3. (c) In subsection (1), for the words "(being expenditure in respect of the employment of staf1)", there shall be substituted the words "(being expenditure other than capital expenditure)".
4. (d) After subsection (1), there shall be inserted—

(1A) Subject to the provisions of this section. the Secretary of State may pay to relevant voluntary organisations within the meaning of subsection (1B) below, grants of such amounts as he may with the consent of the Treasury determine on account of expenditure of such descriptions (being expenditure other than capital expenditure) as he may so determine.". (1B) A relevant voluntary organisation, for the purposes of subsection (1A) above means:

1. (a) a body which is a voluntary organisation within the meaning of section 137 of the Local Government Act 1972.
2. (b) a body whose governing instrument specifies objects which seek:
1. (i) to promote the welfare or interests of a group or groups of persons resident within the relevant area with the meaning of subsection (1C) below, who are distinguished from the majority of the population within the jurisdiction by their race, colour or ethnic origin; and
2. (ii) to promote equality of opportunity and good relations between that group or groups and the majority of the population within the jurisdiction; and
3. (c) a body which seeks to further the objects referred to in subparagraph (b) above by the provision of services. facilities, advice, consultancy or support within the relevant area within the meaning of subsection (1C) below."

(1C) The relevant area, for the purposes of subsection (1B) above means the locality or area within which a relevant voluntary organisation seeks to further its objects within the meaning of subsection (1B) subparagraphs (b) and (c) above, whether or not that area is coincident with the area of any single local authority.").

The noble Lord said: This proposed new clause seeks to amend the Local Government Act 1966. In particular, it seeks to amend Section 11 of the Act which deals with grants from the Home Secretary to local authorities to make provision in their areas to meet the needs of, and I quote because it is not quoted in the amendment: substantial numbers of immigrants from the Commonwealth whose language or customs differ from those of the community".

This was certainly a well intentioned measure in its time, but 23 years have passed and a number of changes have taken place in our communities which make necessary a new scrutiny of the provisions of the 1966 Act. Indeed a scrutiny has taken place whose findings were published in July of this year. It pointed to serious failings in the existing provision.

First, there is the restriction of the grant in Section 11 to Commonwealth immigrants. We all know that since then there has been substantial change in the composition of the Commonwealth. At the very least I need only refer to the fact that Pakistan was out of the Commonwealth for a considerable number of years. I am glad to record the fact that it has been readmitted to the Commonwealth within the past few months. We have many citizens of Pakistan resident in our country. It seems absurd that whether or not their country happens to be a member of the Commonwealth should affect any grants which might be made by the Home Office for the benefit of those ethnic communities.

Secondly, the 1966 Act referred to a test of different "language or customs". That now seems less relevant than it was. Many real problems exist when communities are second generation. People whose parents came from other communities but who were born here still suffer prejudice and still have difficulties which could and ought to be dealt with by local authorities and for which Home Office grants should be available.

Thirdly, there is the issue of "substantial numbers of immigrants from the Commonwealth". That is not a very nice provision. The correlation which is implied between numbers and need neglects the fact that there can be intense need among relatively small numbers of people. We think that the grants should not be restricted in this way.

Fourthly, there is the reference to functions. The amendment would require local authorities to devise strategies to meet the needs of ethnic minorities rather than simply deal with problems as they arise on an ad hoc basis. We think that it would be preferable in that way. Fifthly, the existing legislation provides only for grants to local authorities. We think that, under certain circumstances, grants could be made directly to ethnic minority organisations rather than being filtered through the bureaucracy of local authorities.

In all of these five ways we believe that the proposed new clause is superior to Section 11 of the 1966 Act. We very much hope that the Government will be disposed to accept at least the principle of what is now proposed. I beg to move.

Earl Ferrers

The noble Lord raises an important point. Section 11 grant is at present payable in respect of special provision to local authorities to tackle disadvantages which are suffered by the ethnic minorities of Commonwealth origin. It is restricted to the payment of the cost of additional staffing to meet those needs. The scrutiny report which was published in July made some 43 recommendations in all for the improved administration of the grant. It recognised among other things that legislation would be required to effect some of those recommendations, including those concerned with the scope of the grant.

This group of amendments is concerned solely with the scope of Section 11 grant. It does not address the more fundamental issues of the way in which the grant might be more effectively used to meet the needs of the ethnic minorities. I realise that the intention is to take advantage of what might seem a suitable legislative vehicle, but I do not think that the best interests of the communities involved would be served by making alterations to the arrangements in a piecemeal fashion.

When my right honourable friend announced the publication of the report, he said that the Government welcomed it and its thorough analysis of the problem and that he was considering what changes needed to be made in order to improve the effectiveness of help which is to be provided for the ethnic minorities by the Section 11 grant.

Those recommendations for improving the policy framework under which grant is given and resources allocated to meet the needs of the ethnic minorities, and for identifying the most efficient and effective means of ensuring that those resources are properly allocated, are currently under consideration between the government departments. My right honourable friend hopes that it will not be too long before he is in a position to announce the results of that consultation —including the action which ought to be taken in respect of the recommendations for which legislation is required.

I recognise the intentions behind the proposals, but for the reasons which I have given I hope that the noble Lord will consider that it would not be appropriate to press the amendment at this stage and that he will agree to wait until the results of those consultations are available.

9.30 p.m.

Lord Hylton

Before the noble Lord, Lord McIntosh of Haringey, replies, I think it would be appropriate if I drew attention to a recently arrived group of refugees of non-Commonwealth origin. I am referring specifically to about 3,500 people of Kurdish origin from Eastern Turkey who have arrived in this country since the end of April. Those who were not detained and put in prison or in detention centres were boarded out and found themselves sleeping on the floors of church halls throughout Greater London at. very considerable cost both to local authorities and to voluntary organisations. This is a matter of which the Committee should be aware.

The Committee should also be aware that at present one or two cases are pending in regard to which the London office of the UN High Commissioner for Refugees has given its considered opinion that these people are bona fide refugees who face a real threat of torture and other forms of persecution if they are sent back to Turkey. I hope that the noble Earl, Lord Ferrers, who is a Home Office Minister, will draw this matter to the attention of his colleagues —that is both the Minister responsible for immigration and the Home Secretary. It would be a scandal and disgrace if this country were later found to be guilty of the offence of refoulement of a valid genuine refugee.

Lord McIntosh of Haringey

I am grateful for the intervention by the noble Lord, Lord Hylton; he is well-informed about such matters. However, my amendment does not raise the large issues to which he has drawn attention as regards which refugees are entitled to be in this country; it is concerned only with the issue of government and local authority support for communities which already find themselves in the country. Nevertheless, it was as well that he reminded the Committee of this group of people who, as he said, are not from Commonwealth countries. That aspect reinforces one of the points I made.

I was of course aware of—and I welcome —the Minister's immediate response to the scrutiny published in July. I understand the motivation behind the noble Earl's request that I should withdraw the amendment. In fact, I am minded to do so, but I wonder whether he could tell us a little more about the Government's intentions in the matter. They have made a preliminary response to the scrutiny. When are they likely to respond formally to the scrutiny as a whole? Is it possible for the Minister to say anything about what their response is likely to be. Since the Minister has recognised that some of the 43 recommendations would require legislation, what possibility is there of a slot being found in the legislative programme for such of those recommendations as require legislation and have the support of the Government?

Earl Ferrers

It is difficult to say when the Government will announce the results of the consultations until the consultations have been completed. Until they have been completed and the Government have made up their mind as to what course of action should be taken, it is difficult to answer the noble Lord. We must wait until the consultation is completed and the Government have made up their mind as to what ought to be done. We shall then be able to see how much of that, if any of it, requires legislation. The inference is that, to achieve all that is desirable, legislation might be required. I cannot tell the noble Lord at this juncture when that will be.

Lord McIntosh of Haringey

I cannot say that I am happy with that response. The Minister would not expect me to be happy with it. We know the period of consultation. There must be a limit to the amount of time that the Government require to consider the results of the consultation. The Government are already aware, as the Minister has said, that some recommendations, if they are accepted, will require legislation. It would be tragic if we lost the opportunity of the Bill to promote legislation to deal with the more obvious deficiencies of Section 11 of the 1966 Act within the course of the next Session of Parliament. Can he say that he will be pressing for legislation within the next Session of Parliament?

Earl Ferrers

The noble Lord is persistent. I should not dream of pressing anyone for legislation until I knew what the legislation should be. We shall not know that until we have the result of the consultation.

Lord McIntosh of Haringey

I am persistent with good reason. I have already made it clear that the legislation is defective. I am disappointed that the Minister is not prepared to go any further. I shall have to consider whether this is an issue to which we should return at a later stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 144 agreed to.

Lord Hacking moved Amendment No. 177BAB: After Clause 144 insert the following new clause —

("Capacity of local authority to enter into transactions.

. (1) In favour of a person dealing in good faith with a local authority, any transaction decided upon by the local authority, or by a committee, sub-committee or officer of the local authority, is deemed to be one which is within the capacity of the local authority to enter into, and the local authority shall be deemed to be free of any limitation in statute or otherwise in relation to such a transaction.

(2) A party to a transaction so decided on is not bound to enquire as to the capacity of the local authority to enter into it or as to any limitation on its powers, and is presumed to have acted in good faith unless the contrary is shown.")".

The noble Lord said: In seeking to persuade the Committee to accept the amendment, I seek to persuade it to accept a new clause in Part IX "Miscellaneous and General".

I am trying to persuade the Committee to include the new clause at the end of a group of clauses covering "Miscellaneous local government provisions." It would come after a clause enabling local authorities in Wales to be known solely by Welsh language names. If the Government are prepared to accept the principle of the amendment, which concerns interest rate swap transactions, but wish to divide it from local authorities with Welsh language names, I should be more than happy to table it again on Report at a different position in the Bill.

Although of more general application, the need for the new clause arises out of recent difficulties relating to local councils having entered into interest rate swap transactions. With several Members of the Committee having much greater expertise in banking matters and financial transactions, I shall not attempt to explain what interest rate swap transactions are. Suffice it to say that it is a form of funding which enables the borrower to have greater cash liquidity and better management of borrowing.

From time immemorial under English law, a master who gives authority to his agent is bound by the act of his agent. So it is that an agent who enters into a contract on behalf of his master binds his master in that contract. In these more complicated times, it is increasingly difficult to ascertain, particularly in some modern financial transactions, what agent has what authority for what master. Indeed, for incorporated bodies the authority of a director of a company to bind that company in a transaction with another person acting in good faith is now enshrined in statute.

I refer to Section 35 of the Companies Act 1985. By Section 35(1), when a person acting in good faith deals with a company, the transaction, decided on by the directors is deemed to be one which it is within the capacity of the company to enter into, and the power of the directors to bind the company is deemed to be free of any limitation under the memorandum or articles".

Moreover, under Section 35(2) the person dealing with a company for the purpose of setting up the transaction is not bound (I again read from the Act), to enquire as to the capacity of the company to enter into it or as to any such limitation on the powers of the directors, and is presumed to have acted in good faith unless the contrary is proved. Regrettably, this law does not at the moment in statute form apply to unincorporated bodies like local councils.

All would be well if there was the same certainty under the law that officers of local councils and persons in good faith dealing with them were in the same position. But unfortunately, as recent events have shown, this is not the case and the point has been taken that, for example, transactions relating to interest rate swap transactions are ultra vires of the authority of the local council and therefore not enforceable under law.

When deciding to table this amendment, I considered whether the clause should also be deemed to have retrospective application, but I had some hesitancy about that. We have rightly in this Chamber, and in Parliament as a whole, a great reluctance to legislate retroactively. By doing so we can deprive persons of existing rights. I also had hesitancy because a retroactive clause could impugn upon litigation currently taking place relating to this problem. But I am open on this matter and I know that other Members of the Committee, because of the present situation, wonder whether this clause should also have retrospective application. At the moment, as tabled before noble Lords, it does not.

Having explained the issues, I will now leave Members of the Committee who have more expertise in matters of banking to explain the importance of this clause for the banking community, for future local government financing, and indeed for the reputations of the cities of London and Edinburgh as major international financial centres.

Perhaps, however, I may read an excerpt from a very recent letter, written on 4th October, from the British Bankers' Association to its members. This letter ends with the following passage: The fact that participants in the wholesale markets may be acting ultra vires has introduced a new element of legal risk to dealing. Credit counterparty, currency and country risks are accepted and deals are priced accordingly. However, those who deal in good faith and without negligence with parties who purport to have the capacity to enter wholesale transactions do not expect such deals to be liable to be declared void at some future date". That is what is happening, that is why I am moving this amendment, and that is why I am asking that uncertainty in the law be replaced by certainty. I beg to move.

9.45 p.m.

Lord Alexander of Weedon

May I seek to support this amendment? In doing so I declare an interest. I have recently succeeded my noble friend Lord Boardman —to whom if I may respectively pay tribute for his skill, courage and sense of honour —as chairman of Nat West. The present position we have to consider is clearly an anomaly. Under our companies legislation, banks or any contracting party can deal with a company, however small, on the basis that a transaction decided on by directors is within the power of the company. There is no need for the counterparty to read, let alone get lawyers to interpret, the company constitution. By contrast the present position of those dealing with local authorities is impossibly uncertain.

This amendment will not affect cases currently before the courts. Those cases may take a long time to resolve. But what the arguments in those cases indicate is the complete uncertainty that at present exists. I illustrate that by a quotation made by counsel to the court yesterday in one currently pending case. As taken from this morning's Financial Times it reads: In July 1988 the Audit Commission indicated there were three different legal opinions on the subject: that all rate swaps were unlawful; that some might be valid if related to matched transactions, but not otherwise; that they could be lawful if related to debt management". In those circumstances it is an impossible task for those who deal in the money markets with local authorities. They cannot inquire into and check the detailed objectives and motives of the local authority with whom they are transacting business. As the Committee knows, the London wholesale money markets involve speed in their transactions. They involve instantaneous decisions. They have to function on the basis of trust. This is possible in dealings with companies. But, clearly, it is extremely difficult at present in dealings with local authorities.

The recent nature of my appointment means that my own expertise is still very limited. I am told, however, that a growing number of banks have decided that they can no longer do swaps with local authorities. This in turn inhibits the local authorities themselves from access to the market in hedging instruments. They are thus denied the benefits of sensible use of that facility.

The banking community believes that legislation is essential since the outcome of the current case before the courts will in no way eliminate the problem. It may be said on behalf of the Government that the scope of the problem goes beyond local authorities. So it does. It appears to extend to building societies, mutual insurance companies and pension funds. So it may be suggested that a comprehensive solution is called for. I would agree, but I hope that this will not be put forward as a reason for failing to grasp this particular problem now when we have a clear opportunity to do so.

In support of that I would add that local authorities are more active in this market than any of the other kinds of organisations which are affected by the anomaly. To correct the problem in this area would be a clear sign that the Government recognise, and are concerned to deal with, a serious problem. It is important to London as a major financial centre that that message should be given clearly. I urge the Committee to support the amendment.

Lord Cobbold

In rising to support the amendment proposed by the noble Lord, Lord Hacking, I must first declare an interest to the extent that until recently I was responsible for the money market activities of the Trustee Savings Bank, the TSB, one of the 70 banks involved in the recent events referred to by the noble Lord, Lord Hacking, which lie behind the amendment. The TSB incidentally has had a particularly close relationship with the local authorities in financial markets for a long time.

While drafted in response to the recent events, the amendment, as the noble Lord, Lord Hacking, explained, is concerned only with the future working of the marketplace. I should say straight away that I should have greatly preferred an amendment which also addressed the past because I believe that the objectives of the amendment are only fulfilled if the amendment has retrospective effect.

The amendment seeks to clarify the law as it applies to local authorities and to bring the law into line with that applicable to companies, specifically by the introduction of an equivalent clause to Section 35 of the Companies Act 1985. As the noble Lord, Lord Alexander of Weedon, said, financial markets are fast moving. New products and new techniques are invented nearly every day. The professional practitioner is expected to keep pace with these developments and to be able to assess the market risk that each involves. He will also be accustomed to assessing the credit risk, exchange risk, country risk and counterparty risk of those counterparties with whom he deals. He ought, however, to be entitled to assume that his counterparty is dealing in good faith and is legally empowered to enter into the transaction. Access to wholesale financial markets is invariably by introduction or reference and local authorities have been active participants in markets for many years.

In markets where decisions are made instantly over the telephone or by outcry on the exchange floor, it is essential that market participants know each other in advance and can assume that the ostensibly responsible officers with whom deals are done are empowered to transact those deals. A professional market participant can only operate on the basis of confidence and trust, no matter whether he is dealing with a counterparty acting for example on behalf of the 1.8 million shareholders in TSB or the 150,000 inhabitants of Hammersmith and Fulham. The phrase "my word is my bond" is still the rule. Therefore, the Committee can well imagine the concern that is felt throughout the international financial community —this was echoed by the noble Lord, Lord Alexander —at the suggestion that between £5 billion and £10 billion pounds worth of transactions known technically as interest rate swaps and options on interest rate swops that numerous local authorities have undertaken in good faith with some 70 international banks in the management of their interest rate risk, should be declared ultra vires or null and void.

These transactions have been taking place for several years and, typically, have maturities stretching from five to 10 years into the future. Unwinding or replacing the transactions would lead to enormous disruption of markets and unpredictable cost to the counterparties. As the Committee is aware, these matters are now before the courts. However, the courts will arrive at their decision through interpreting legislation enacted long before the present financial instruments were invested. Moreover, the process may take several years of litigation before a decision is arrived at. Meanwhile the financial markets will be severely restricted for local authorities.

I support the amendment which will at least resolve the problem for the future and enable normal business with local authorities to be resumed. I regret, however, that the amendment is not retrospective because it is only confirmation of the validity of outstanding transactions that will repair the damage done to the good name of the financial markets of the City of London, from which this country so massively benefits. I support the amendment and I urge the Government to accept it.

Lord St. John of Bletso

I, too, wish to support the amendment of my noble friend. As has been mentioned, the new clause is intended to remedy the legal uncertainties that have arisen in connection with the use of interest rate swaps by local authorities, building societies, pension funds and non-corporate entities. As has also been mentioned, the amendment is aimed at bringing the proposed legislation in line with Section 35 of the Companies Act 1985.

I wish to express my personal interest in that I am a stockbroker. While I do not have any direct contact with the swaps market, this time of uncertainty over whether or not interest rates will go even higher shows the value of this measure as an important financial instrument for the hedging of portfolios.

Central to the success of London as a major international financial centre is a dependence upon mutual trust between parties. The mere fact that the High Court is considering whether or not Hammersmith and Fulham council's interest rate swaps and options contracts are intra vires or ultra vires should not, in my opinion, result in a postponement of this important amendment. I stress that clear legislation is needed to restore confidence in the stock market. As the noble Lord, Lord Alexander, mentioned, the swaps market has been frozen for local authorities.

There is not much that I can add to what has already been mentioned. The Local Government Act of 1972 made no provision for the introduction of these new financial instruments. Therefore, institutions dealing in good faith and without negligence ought not to be penalised.

I also draw to the attention of the Committee the recent short report issued by the British Bankers' Association setting out the possible results of having no legislation. The noble Lord, Lord Cobbold, mentioned one of those possible results. For those reasons I support my noble friend's amendment.

Lord Hesketh

The scope of the new clause which the noble Lord, Lord Hacking, has put forward is broad. The noble Lord has been most eloquently supported by the noble Lords, Lord Cobbold, Lord Alexander of Weedon and Lord St. John of Bletso.

The clause would at a stroke effectively abolish the structure of checks and balances which Parliament has established to govern the relationship between central and local government. At present local authorities are required to operate within the powers which government has given them. If they step outside those powers and enter into a transaction which they have no powers to enter into, that transaction is rendered invalid. The contract is void. The amendment which has been put forward would abolish that constraint on unlawful action.

We believe that that would not be appropriate. There are good reasons why there need to be practical constraints on the powers of local authorities. Without such constraints Parliament and government would have very limited authority over local authorities. They would, for instance, be unable to safeguard the funds provided by Parliament to local authorities for the services that local authorities are responsible for providing.

I understand that in putting forward this amendment the noble Lord, Lord Hacking, also had in mind the narrower range of concerns arising out of the present court case concerning the London Borough of Hammersmith and Fulham's dealings on the interest rate swaps and related capital markets. That case is concerned with the issue of whether local authorities have powers to enter into such transactions. The BBA has made representations to the Government that a wide range of such transactions should be protected from the vires rules, as the amendment proposes.

It would be entirely inappropriate to address those concerns at this stage, for a number of reasons. First, the court case on the transactions entered into by Hammersmith and Fulham has not yet been decided. The case is still being heard. It is unclear whether the amendment as drafted would validate any existing swap deals, including those of Hammersmith and Fulham, or whether it would apply only to future deals. The Government's view is pat the courts—not the Government —should decide the rights and wrongs of the Hammersmith and Fulham case and that the Government should not make any intervention in this area while those rights and wrongs are undetermined.

Secondly, the experience of Hammersmith and Fulham illustrates that if local authorities were permitted to engage without limitation in interest rate swaps and related deals, they could be laying their ratepayers and their community charge payers open to a very substantial financial risk:. We believe that to validate all transactions, without ensuring any counter-balancing limits on what local authorities ought to do, would be irresponsible.

Noble Lords will understand that it is inappropriate for me to go further and discuss at this stage the Government's views on whether it is desirable or appropriate for the future for local authorities to engage in interest rate swap transactions. For me to do so could be misinterpreted as seeking to influence the outcome of the present court case.

I should simply reiterate that the amendment before us today is technically flawed in that it goes beyond the immediate concerns expressed by the noble Lord, Lord Hacking, and if passed would undermine the system of checks and balances in the relationship between central and local government. But even if those technical faults were addressed —and that would be far from straightforward —the amendment would still be inappropriate.

At the end of the day, a company that acts unwisely and beyond its powers risks only the interests of its shareholders and is subject to the final solution of bankruptcy. A local authority that goes beyond its powers and risks substantial loss puts at risk the interests of all its community charge payers. It has duties to provide services. Equally its inhabitants have no choice but to pay its taxes. We resist the amendment.

10 p.m.

Lord McIntosh of Haringey

This has been a curious little debate. First, its status in the Committee is curious; secondly, its timing is curious; and, thirdly, the content of the amendment is curious.

Perhaps I may deal first with the status of the debate. All noble Lords who have spoken in support of the amendment, except the noble Lord, Lord Hacking, have declared an interest. The noble Lord, Lord Hacking, has not declared an interest and, since he and I have been over the ground already, I take it that he has no interest and that neither he nor any of his partners act for any of those banks or other financial institutions that might be affected. That is the common ground between us.

Other noble Lords have declared an interest, and a very precise interest. I draw their attention to No. (xiv) of the Rules of Debate which state that it is "undesirable" in this House —that is the equivalent of "out of order" in the Commons—for noble Lords who have a pecuniary interest in a matter under debate to promote, support or oppose legislation which affects that pecuniary interest. I ask all noble Lords who have taken part to look at item (xiv) of the Rules of Debate and to consider whether their position justifies them taking part in the debate in the way that they have done.

The second point about the debate that is curious is, as noble Lords have said, that a court case is pending. That court case can have only one of three results: the actions of Hammersmith and Fulham Council will have been found to be ultra vires in total, or they will not, or some will be and some will not be. Nevertheless, whatever the result may be, and subject to the possibility of appeal, the law must be made clear. It is certainly not clear at the moment and it is in the process of being made clear. It seems curious, to say the least, that noble Lords should seek to intervene to replace the existing law, which is still under examination, by new legislation while the court case is still going on.

I do not say that Parliament must refrain from legislation on any matter which is or might be before the courts. That would be an impossible restriction on Parliament, but this is a case in which a great deal of money from many institutions is involved. I am surprised that noble Lords should think it appropriate to raise matters when there is a court case going on which is bound to be resolved —if our legal system is at all efficient —in a reasonably short period of time.

The third issue is that the amendment is not restricted to local authorities, as the noble Lord, Lord Hacking, said. It is not restricted to banks. It covers all financial institutions and the issues could go wider than local authorities. This is the Local Government and Housing Bill, not the Companies Bill. I should have thought that, unless we can be absolutely certain that any proposed amendment refers only to local authorities, it would be quite inappropriate in this Bill in any case.

Lord Hacking

I am reluctant to interrupt the noble Lord, Lord McIntosh. I shall have some words to say about his comments at a later stage. However perhaps he will look at the clause a little more carefully before he makes the point that it is not limited to local authorities. The wording of the amendment refers precisely to local authorities. It is directed to the authority that local authorities should be deemed to have. That is the argument behind my amendment. It does not go wider than local authorities and I should be grateful if the noble Lord would acknowledge that point.

Lord McIntosh of Haringey

I am grateful for that comment. I apologise if I implied that the amendment went beyond local authorities, but the issue clearly goes beyond local authorities. It could cover all kinds of public authorities. It is an important element of commercial transactions.

In commercial transactions there is an element of risk involved. It may be a commercial risk; it may be a legal risk. Those risks which the banks and other financial institutions take are compensated by the profits they get from such transactions. The National Westminster Bank, of which the noble Lord, Lord Alexander, is the new chairman, has lost —written off anyway —or provided for the loss of many hundreds of millions of pounds in debts to the third world. There is no one there to indemnify the National Westminster Bank against debts to the third world. That is the business they are in. They accept it presumably with reasonably good grace.

My view of the City community is not very high anyway, as I think is probably well known. However that may be, it seems to me that those who engage in commercial transactions ought not to accept the profits from those transactions and at the same time ask Parliament to indemnify them against all the risks.

In the circumstances, the very circumspect reply of the Minister to this debate —I wish that the noble Lord had gone further and discussed more of the substantive issues although I understand why he could not do so —seems to me to be wise. It would be wise too for the Committee to reject the amendment.

Lord Alexander of Weedon

Before the noble Lord sits down, while not seeking to comment at all on his views of the City community, to which he is well entitled, perhaps I may ask him to reflect a little upon what he suggested about those of us who have taken part in this debate. Perhaps he can point to any way in which he suggests we acted contrary to Rule (xiv). If he pursues the suggestion I should be grateful if he would do so with a little precision.

Lord McIntosh of Haringey

I do not think that I can be any more precise than the Rules of Debate which state: It is … considered undesirable for a Lord to advocate, promote or oppose in the House any Bill or subordinate legislation, in or for which he is or has been acting or concerned for any pecuniary fee or reward". The noble Lord is a paid chairman of the National Westminister Bank. That bank has a pecuniary interest in this matter and would no doubt benefit if this amendment were carried. Perhaps I may say to the noble Lord, with deep respect for his knowledge of the City, that it is made clear in the Rules of Debate that the participation in debate of any Peer is a matter of personal honour and it is not for any noble Lord to cast doubt on the personal honour of any Peer. I do not do so in any way. However, it appears to me that if amendments are proposed and supported which will bring financial benefit to the employers of those Members who propose and support them, the Rules of Debate do not stop at saying that it is necessary to declare an interest. They go so far as to say that it is considered undesirable for them to take part in such a debate.

Lord Alexander of Weedon

The noble Lord no doubt consulted Rule (xiv) before he raised this point initially. It is the first time that I have had occasion to look at it although I have been informed generally of its contents. As I understand it it falls into two limbs. The first limb reads: if a Lord decides that it is proper for him to take part in a debate on a subject in which he has a direct pecuniary interest, he should declare it". I understand from those words that a Member of this Chamber is free, if it be the case (which it is not in this particular instance), to take part in a debate in which he has a direct pecuniary interest if he declares that interest.

However, as I understand it, the second limb is narrower. It makes it undesirable for a Member of this Chamber to take part in promoting or opposing legislation if the Member has been acting in regard to that legislation or is receiving a specific pecuniary fee or reward. I ask for the noble Lord's confirmation that he is not suggesting that any of us has been acting in regard to the legislation or is concerned in that legislation for any pecuniary fee or reward.

Lord McIntosh of Haringey

The noble Lord has paraphrased Rule (xiv). I have not sought to do so. I simply read it out. I have made it clear that I make no allegations against the personal honour of any noble Lord. I simply draw the attention of all noble Lords who take part in advocating, promoting or opposing legislation to the content of Rule (xiv). It is for Members of the Committee to make their own individual judgment as to whether they consider that being involved in a corporate manner rather than for an individual fee absolves them from the conditions of Rule (xiv). It is not for me to say. It is ultimately a matter for individual noble Lords and for the Chamber. I would not seek to paraphrase or expand in any way upon the rules of this Chamber.

Lord St. John of Bletsoe

In the light of what the noble Lord, Lord Alexander, has mentioned, perhaps I may put the record straight. I am a stockbroker. However, the firm for which I am working has no swap transaction dealings.

The Lord Privy Seal (Lord Belstead)

I have been listening to this exchange and, as Leader of the House, I would say just this. The noble Lord, Lord McIntosh, has quite rightly, in his closing remarks in the exchange, made the point that it is for a noble Lord to decide whether it is proper for him to take part in a debate on a subject in which he has a direct pecuniary interest, and if that is the case he should declare it. Noble Lords who have taken part in this debate have declared the interests which they see that they have. They have been absolutely open with Members of the Committee. Having listened to the debate I think that the standards of this Chamber have been upheld in exactly the way that we would have wished, and that the debate has been absolutely proper.

Lord McIntosh of Haringey

I would only add that whether the standards of this Chamber are upheld is not for me, or even the Leader of the House to say. That is a matter for individual Members who have taken part in this debate to say. That is the tradition and custom of this Chamber.

Lord Belstead

I entirely agree with the noble Lord. If any noble Lord disagrees with what I have interpreted from the rules, I hope that he will now rise and say so.

Lord Hacking

I for one am very happy to leave Rule (xiv) alone. I greatly regret that the noble Lord, Lord McIntosh of Haringey, has again raised this matter in circumstances which do not fairly reflect upon his fellow noble Lords in this Chamber. I shall not comment any further upon the intervention of the noble Lord, Lord McIntosh. However, I seek to make a few comments to the Minister.

The Minister's prime argument was that the amendment upset the balance between central and local government. Yet it is an amendment seeking to create certainty out of uncertainty and seeking to put local councils in the same position as corporate bodies. It is difficult to see how a measure intended to create better law can upset the checks and balances between central and local government.

The noble Lord, Lord Hesketh, argued that there was a possibility that my amendment could disturb the Hammersmith litigation. I had a hesitancy about this and that is why I decided not to make it retrospective. In my opening remarks I suggested that because it was not retrospective the measure could not have any effect upon litigation which does not concern future or present Acts but past Acts. However, we also have had the benefit of the opinion of the noble Lord, Lord Alexander. He said not only that this amendment did not affect current litigation but, more significantly, that the outcome of the present litigation would not solve the problem.

I ask the noble Lord, Lord Hesketh, to look again at this matter in view of all the representations that have been made on it in the Chamber. The measure deserves attention. It deserves the support of government. It is so easy to turn it round and for government to say, "Let the courts solve the problem." The right way round is for the Committee to get the law right, to present it in clear and certain terms and then leave it to the courts to decide. We should not leave the courts uncertain of the law and bring about an outcome which, as the noble Lord, Lord Alexander, said, would not solve the present problem. Having made those observations, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 176D: Before Schedule 7, insert the following new schedule: —

("Compensation Provisions of Landlord and Tenant Act 1954, Part II

1. Any reference in this Schedule to a section which is not otherwise identified is a reference to that section of the Landlord and Tenant Act 1954, Part II of which relates to security of tenure for business, professional and other tenants.

2. —(1) Subject to the following provisions of this Schedule, section 37 (compensation where order for new tenancy precluded on certain grounds) shall have effect with the amendments set out below.

(2) At the beginning of subsection (2) there shall be inserted the words "Subject to subsection (5A) of this section".

(3) After subsection (5) there shall be inserted the following subsections— (5A) If any part of the holding is domestic property, as defined in section 66 of the Local Government Finance Act 1988:—

1. (a) the domestic property shall be disregarded in determining the rateable value of the holding under subsection (5) of this section; and
2. (b) if, on the date specified in subsection (5)(a) of this section, the tenant occupied the whole or any part of the domestic property, the amount of compensation to which he is entitled under subsection (1) of this section shall be increased by the addition of a sum equal to his reasonable expenses in removing from the domestic property.

(5B) Any question as to the amount of the sum referred to in paragraph (b) of subsection (5A) of this section shall be determined by agreement between the landlord and the tenant or, in default of agreement, by the court.

(4) At the end of subsection (8) (definition of "the appropriate multiplier") there shall be added the words "and different multipliers may be so prescribed in relation to different cases".

3. The amendments made by paragraph 2 above do not have effect unless the date which, apart from paragraph 4 below, is relevant for determining the rateable value of the holding under subsection (5) of section 37 is on or after 1st April 1990. 4. —(1) Subject to paragraph 3 above and paragraph 5 below, in any case where —

1. (a) the tenancy concerned was entered into before 1st April 1990 or was entered into on or after that date in pursuance of a contract made before that date, and
2. (b) the landlord's notice under section 25 or, as the case may be, section 26(6) is given before 1st April 2000, and
3. (c) within the period referred to in section 29(3) for the making of an application under section 24(1), the tenant gives notice to the landlord that he wants the special basis of compensation provided for by this paragraph,

the amendments made by paragraph 2 above shall not have effect and section 37 shall, instead, have effect with the modification specified in sub-paragraph (2) below.

(2) The modification referred to in sub-paragraph (1) above is that the date which is relevant for the purposes of determining the rateable value of the holding under subsection (5) of section 37 shall be 31st March 1990 instead of the date on which the landlord's notice is given. 5. In any case where—

1. (a) paragraph 4(1)(a) above applies, and
2. (b) on 31st March 1990, the rateable value of the holding could be determined only in accordance with paragraph
3. (c) of subsection (5) of section 37,

no notice may be given under paragraph 4(1)(b) above.")

On Question, amendment agreed to.

Schedule 7 agreed to.

Lord Ross of Newport moved Amendment No. 177BB: Before Clause 145, insert the following new clause:

("Rental purchase: included in the Housing Act 1988 definition of tenancy.

. —(1) Rental purchase agreements, as defined in Regulation 10(1)(i) of the Housing Benefit (General) Regulations 1987, for so long as the title to the property has not been transferred to the rental purchaser, shall be tenancies within the meaning of the definition in section 45(1) of the Housing Act 1988.

(2) In section 45(1) of the Housing Act 1988 (interpretation of Part I of that Act) after the second reference to 'subtenancy' insert 'and a rental purchase agreement as defined in Regulation 10(1)(i) of the Housing Benefit (General) Regulations 1987, for so long as the title to the property has not been transferred to the rental purchaser.")

The noble Lord said: I have been asked to move the amendment as my name appears with it. We are moving from a debate involving many millions to a debate involving not more than 20 or 30 people at most. By this amendment we seek to bring the method of rental purchase of houses under the provisions of the Housing Act 1988 and the Landlord and Tenant Act 1985. That is covered by the second amendment, Amendment No. 188ZB, to which I am also speaking.

Some Members of the Committee may not know what rental purchase is. I admit that until I had the document from Shelter, I did not know either. It is a form of tenure found mainly in the North-West of England. Rental purchasers have neither the security of owner occupiers nor the rights of tenants. They merely have a licence to live in the accommodation pending completion of the sale. Buying a home on rental purchase quite simply means buying it on hire purchase. Unlike a conventional home ownership arrangement, rental purchase means that a purchaser does not become the owner until the last payment is made. The period of the purchase is normally between 10 and 12 years. The rate of interest payable is usually much higher than on a conventional mortgage —25 per cent. and above is quite common. For rental purchasers who have been in the accommodation since before the Housing Act 1988, a rent officer fair rent cannot be registered unlike with regulated tenancies under the 1977 Act.

Despite the fact that much of the property on offer by way of rental purchase is substandard, the legal remedies available to tenants concerning repairs are not available to rental purchasers. Indeed most rental purchase companies state specifically that the rental purchaser is responsible for all repairs and maintenance. In the cases quoted that I have read this is where things go wrong because very often the property is in a poor state of repair —which has been hidden —and then things start to go wrong when the purchaser has entered into a licence agreement.

Furthermore, there are particular financial problems because many occupiers of these properties are often among the unemployed. Rental purchasers are not eligible for improvement grants, home loss payments or disturbance allowances. Housing benefit is payable on the normal eligibility basis, but because many properties under rental purchase are offered at inflated prices, occupiers often suffer housing benefit restrictions obviously because the payments are way in advance of what the rent officer thinks should be a normal fair rent.

A rental purchaser does not have security of tenure. In almost all circumstances rental companies quickly take action to repossess where there has been default in payment, which unfortunately occurs all too often. Incidentally, they do that much more speedily than building societies. Although, due to a change brought about by the Housing Act 1980, when proceedings are issued against a rental purchaser, the court has power to adjourn the proceedings, or to suspend or postpone a possession order, nevertheless many rental purchasers lose their homes. Unlike an owner occupier, a rental purchaser in arrears does not have the right to sell. That is because he does not own the property until the final payment is made.

One or two companies have been operating in this area in the North-West and their actions have been well tabulated and reported by local authorities in the area, such as Blackburn, Kendal and Preston among others.

The Minister for Housing, Mr. David Trippier, gave a pledge in Committee on this Bill —and, after all, he represents a constituency in that part of the world —that he would look again at the issue of rental purchase when the AMA survey evidence had been received. I am not sure whether that has been received, but it would seem a great pity if we allow this Bill to pass without trying to include an amendment dealing with this matter.

These people are sharp practice operators who are buying rundown properties on mortgage at very low prices —probably £12,000 or something of that order —then doing a sort of licensed deal with unsuspecting people who want a roof over their heads and are probably unemployed or on very low earnings. Those operators are charging extortionate rates of interest. They receive some money. Problems then arise, the property falls into disrepair and falls apart, possession is obtained and they then start all over again. That is a bad practice and it should be dealt with under this Bill. I beg to move.

Lord Graham of Edmonton

I rise very briefly to support the amendment moved so ably by the noble Lord, Lord Ross. I was surprised when he said that this amendment does not deal with millions but possibly only 20 or 30 people. My information is that it affects more people than that. I have information from a survey by Shelter, which it undertook with the AMA, and which states that this practice may involve hundreds of people. At the height of this problem about two years ago there were 1,000 properties involved. As the noble Lord, Lord Ross, said, this practice is principally taking place in one part of the country.

The Minister should take on board what these amendments seek to do. We know that this is a very peculiar and difficult form of ownership and tenure. In essence, the two amendments are seeking to make sure that all rental purchasers who enter into agreements after this Bill comes into force have the status of assured tenants under the Housing Act 1988. The noble Lord, Lord Ross, very fairly pointed out the number of basic rights of which the occupant of a property occupied by virtue of a rental purchase agreement is deprived. If a person has, as the amendments indicate, the status of an assured tenant that would provide some protection until such time as the title of the property is transferred.

The second legislative change we seek on the face of the Bill is to ensure that the rental purchase landlord —and not the rental purchaser as at present —has a statutory duty to keep the property in repair.

Both Shelter and the AMA have done an excellent job. Earlier this year the National Consumer Council produced a special report from a consumer's view on buying a home on rental purchase. It asked for: New legislation —an adequate framework to minimise the potential for abuse, and to provide for more information, advice, access, value for money and redress. Specifically: The addition of rental purchase into the 'assured' tenancy definition". That is what we are asking for. It goes on to ask for: New legislation to compel rental purchaser' companies to obtain valuation for independent surveyors, and give the results to the purchaser". I believe the next matter is of crucial importance. It asks for: DoE guidelines to be issued to local authorities concerning the restriction of housing benefit on all new rental purchases to local fair rent levels (as a means of tracking overpricing)". I received a letter from an organisation called SHOE. It stands for Social Home Ownership Enterprise. It is an interesting letter. The organisation is certainly in favour of a rental purchase arrangement. However, it does, of course, want to see a number of changes in it.

A Mr. F. Heller, who lives in Gateshead, wrote to my honourable friend in another place who represents Tyne Bridge, Mr. Dave Clelland. He makes some interesting points. I should be grateful if the Minister could take on board that this is a sector of the community which often, not recklessly but sometimes fecklessly, wanders into a desperate housing situation which involves the kind of financial nightmare the details of which I have in this report. It is horrifying. Many noble Lords in this Committee have been Members of Parliament. As ex-Members of Parliament we have met the kind of situation where a man, his wife and sometimes the children, have come into our surgeries and explained what has happened to them. One became very angry and despaired of the situation.

Lord Evans of Claughton

No, no!

Lord Graham of Edmonton

The Government may feel that there are not sufficient people involved to take particular note of the situation but I hope that the Minister has taken on board all that the noble Lord, Lord Ross, and myself have said. If he cannot accept the amendments I should like to hear that the Government are pursuing redress for people in these difficult circumstances.

Lord Evans of Claughton

I intervene briefly to explain, first, that my strangled cry of "No, no" was nothing to do with what the noble Lord was saying, but was expressing agreement with the noble Lord, Lord Dean, on another subject. Secondly, I intervene to say that this is a very small problem and I suppose that after the heated and fetid discussions we have had I should declare an interest and say that I am a solicitor in the North of England. I have never in my whole career come across one of these agreements.

However, the fact that it is a small problem does not mean that it is one that should not be resolved. It is a loophole which enables unscrupulous people to take advantage of the disadvantaged. The noble Lord mentioned the Consumers' Association and in this, as in so many other ways, that organisation does a good job. One of the problems of the Consumers' Association is, of course, that it appears to hate solicitors and spends a great deal of its time in attacking them. However, if people went to solicitors about such agreements they would never be advised to enter into them.

Lord Graham of Edmonton

Perhaps I may help the noble Lord in case he pursues that line. I referred to the National Consumer Council, which is quite distinct from the Consumers' Association. The noble Lord may by all means be vituperative but perhaps he should be careful where he is aiming.

Lord Evans of Claughton

The NCC probably hates solicitors, too. The point to underline is that people entering transactions should not only be protected from their own misfortunes, which is what this amendment seeks to do and I support it, but in entering what is perhaps the most important transaction in their lives they should make sure that they know the law and seek protection.

I hope that the Minister does not reply that it is a problem of such minor importance as not to need legislation. A loophole exists and it should be closed. That can be done simply by accepting the amendment.

10.30 p.m.

The Earl of Caithness

As the noble Lord, Lord Ross of Newport, told the Committee, these amendments aim to control a type of property transaction that is most unusual. It is a form of buying property on hire purchase, under which the purchaser does not have the stake in his property that a mortgagor does with a conventional mortgage. Nor does he necessarily have the status of a tenant; he may be a tenant or licensee, depending on the terms of the agreement.

Some unfortunate people have taken out agreements to buy property on rental purchase and find, if they fall behind with their repayments and are faced with eviction, that they have less stake in the equity of the property than someone buying on a conventional mortgage, and less security than certain types of tenant. Concern has been expressed clearly tonight about the unsatisfactory nature of rental purchase. One of the problems in considering whether we need to do something about the system is that we do not know the proportion of rental purchasers who may be encountering problems or how many successfully purchase their houses.

The department received the results of the AMA survey referred to by the noble Lord, Lord Ross of Newport, which found that it was used in four of its member authorities but provided no more detail than that. Shelter also has reported on rental purchase. Its report said that the practice went on in an additional four authorities. It contains estimates of between 460 and 560 properties but does not say how many purchasers failed to complete the purchase. The Shelter evidence suggests that overall numbers are declining, and such evidence as the Department of Social Security has also suggests that.

I should point out the difficulties of legislating as the noble Lord suggests. Rental purchasers enter into contracts to buy their property. They take on the obligations consistent with owner-occupation. Their contracts may take a wide variety of forms, but they may not contain the provisions you expect in a lease. There is no obvious reason in principle why statute should provide that the implied terms and rights which obtain in assured tenancy agreements should apply to contracts to purchase.

I am sure that the noble Lord, Lord Evans of Claughton, will agree with me that it would not be an easy matter to provide for a marriage of the two. Why should someone who has contracted to purchase be subject to the provisions of a regime designed to cater for landlord-tenant relationships?

I would repeat earlier warnings made in this and another place on rental purchase. People considering it should always look very closely at the agreements involved. The issue of rental purchase has now had quite a wide airing, including a television programme devoted to it, and people should certainly be aware that not all rental purchase agreements end with the purchaser owning his property.

I might mention that one of the issues raised in the report by the National Consumer Council on this issue was that of consumer credit licensing of rental purchase companies. The Director General of Fair Trading is aware that problems have been alleged in this respect, and will naturally consider any evidence that is sent to him.

To sum up, I believe the noble Lord's amendments are the wrong way to deal with a problem which is confined in its effect. As I said on a previous occasion when this was debated, rental purchase has been used to obtain more income from a property than the provisions of the Rent Acts would allow. Now that we have deregulated new lettings, the incentive to use this form of evasion is far less.

Having said that, let me make it absolutely clear that I am very sympathetic to those who have entered into disadvantageous agreements. But I cannot agree that the noble Lord's amendments are the right way to solve this problem.

Lord Swinfen

I am not particularly satisfied with my noble friend's response to this amendment. This is a type of housing transaction that I have not come across before. If those who get involved in it, particularly at a time of rapidly rising house prices, are late with the rental part of their payments at any one time there could be a foreclosure and they could lose their home. The individual who does that will start all over again at a higher price with a different person. It may not be a very large problem affecting a large number of people. However, it is a matter which I believe the Minister and his department should look at even if this Bill is not the appropriate place to deal with it.

From what he said I did not gather that that undertaking was given. It seems to me that there is a boil in society here, and a boil can be very painful. It may cover only a very small area but it can be very painful.

The Earl of Caithness

I fully understand the concerns of my noble friend and I apologise if I did not make myself clear. I said that there was a problem and that I was very sympathetic to the plight of people who had entered into a voluntary agreement. I am sure that my noble friend will understand clearly, with his involvement in property, that what the amendments tabled by the noble Lord, Lord Ross, are trying to do is to impose on a purchase agreement a tenancy provision. That is where the difficulty lies in trying to deal with the matter in the way that the noble Lord, Lord Ross, wishes. Nevertheless, I take my noble friend's point. It is something about which we are concerned, but the way in which the noble Lord wants to deal with it is the wrong way.

Lord Graham of Edmonton

I am grateful because the noble Earl and his advisers have taken care. However, I share the Committee's unease. The noble Earl said that he recognises that there is a problem but that this is not the way to deal with it. If he had gone on to say that the Government have a better way of dealing with the problem which they are not able to reveal tonight or in this Bill but that it is coming, I would have been heartened. I honestly thought that the noble Earl had said caveat emptor—let the buyer beware; he should know what he is doing because there has been a programme and a good deal of information.

All the expressions I have used were in his speech. I should hate to feel that the department is saying that the solution lies in people reading the small print and being careful to understand what they are doing. The sad fact is that, because of the housing market and the housing stock, people are driven or drive themselves into making arrangements that a prudent man or woman would not contemplate. They are forced to do it and then find that the small print reveals, horror of horrors, that they are exposed. I should like to hear the Minister say that, while this is not the way to deal with it, it is a problem that can be dealt with and that the Government intend to do it in some other way. Can the Minister help us there?

The Earl of Caithness

What I am not sure of at the moment is whether it can be dealt with in another way.

Lord Graham of Edmonton

So what in effect the Minister is saying is that there is a problem but that this is not the way to deal with it. He has not even said that he is looking for another way of dealing with it. I accept completely that he does not know whether it can be dealt with in another way. Can he say whether he and his advisers are looking to see whether there is another way?

The Earl of Caithness

I shall certainly endeavour to find out between now and Report stage whether there is another way of doing it.

Lord Ross of Newport

I must heartily congratulate the noble Lord, Lord Graham. Nobody tries harder than the Opposition Front Bench to get something out of the Government on occasions such as this. I welcome the noble Earl's last statement and hope very much that we shall hear at Report stage whether it is possible to do something to help these people.

As the noble Lord indicated, when people are desperate they do silly things. If I underestimated the number, I am very sorry. If it is as many as 300 or 400 the problem is far more serious than I had anticipated. We ought to be doing something about it. I say to my noble friend Lord Evans that not everybody thinks of going to see a solicitor. They ought to. A good many of my relations are solicitors. Ethnic minorities and other groups very often do not think that this is the approach they should take. The problem will occur in places where properties are cheap and where large sums of money can be made out of people's misfortune. We ought to take it on board. I withdraw the amendment now and hope to hear from the Minister later.

Amendment, by leave, withdrawn.

Clause 145 [Housing authorities not required to keep a housing stock]:

Lord Dean of Beswick moved Amendment No. 177BC: Page 131, line 11, leave out ("or hold").

The noble Lord said: In its current form Clause 145 amends Section 9 of the Housing Act 1985. Section 9 confers the basic rights of local authorities to provide accommodation through building, converting and acquiring housing. The effect of Clause 145 would be to clarify whether its housing function is a power rather than a duty. It spells out that the authorities need not exercise this power. It has been drafted by the Government because of ambiguity in Section 9, parts of which could be interpreted as leading to a requirement on authorities to hold stock. This amendment seeks to strengthen this latter argument by removing the reference to authorities not being required to hold housing stock.

The main purpose behind the amendment is to open up the debate and ascertain who the Government expect will be required to fill the housing need if local authorities are not necessarily expected to hold stock directly. This is also a chance to make the Government justify their policy, which appears to be to break up local authority housing stock, when all the indicators show that homelessness and other forms of acute housing need are escalating.

We must also address the issue in respect of the number of people involved. Figures have quite recently been quoted in this Chamber as regards the current situation of homelessness and the local authority role in housing the homeless. Existing figures show that councils now rehouse over 120,000 families every year under the homeless legislation. Record numbers of people are now being placed in temporary accommodation —33,750 in the last quarter. Moreover, in London alone there are more than 25,000 families in that position. There are around 7,000 children living in the worst form of temporary accommodation, which of course is bed and breakfast.

With their current stock authorities simply do not have the resources to rehouse these people directly, in spite of increased efficiency in turning over empty property and initiatives by them to use empty private sector property through private leasing schemes.

If local authorities are not to deal with the homeless situation, who do the Government expect will do so? The housing associations deal with such people but to a much lesser degree than the local authority housing departments. There is no way that they could make a much more substantial contribution to dealing with the homeless situation, and one is not being especially critical in so saying.

One can forget the private sector completely when talking in terms of housing homeless people or people one might consider as being in a situation of homelessness. I do not think that there is any need for me to remind the Minister who will be replying to this amendment that one of the younger delegates at the Conservative Party Conference yesterday made a speech which was quite severely critical of the Government. He expressed his disenchantment, and that of a growing number of people in his party, of what appears to be the Government's disregard for the dimension of the homeless problem with which we are dealing.

I know that the subject of homelessness has already been mentioned during these Committee proceedings on the Bill. I also know that there is persistent reference by Ministers to the fact that the Government are waiting for the report on homelessness to be received before they decide upon what further action to take. But what could a report possibly tell them other than the fact that the number of people and families being made homeless each year is increasing in rather formidable percentage terms and that the number of young people living on the streets in London and sleeping out rough at night is also growing considerably day by day?

The amendment seeks to draw the Government's attention to the question of homelessness. Much more could be said on this issue, but as the Committee still has a long way to go tonight I shall not say any more. I have made my point. I understand that I should link Amendment No. 177BD with this amendment as it deals with the same principles in connection with another part of the United Kingdom. I beg to move.

The Earl of Caithness

I listened carefully to what the noble Lord, Lord Dean of Beswick, said. I wonder whether he might not be giving this clause rather more significance than it deserves. It is simply a declaratory provision confirming that, under the law as it stands, local housing authorities are not required to own housing or land in connection with their powers under the 1985 Housing Act (in Scotland, the 1987 Housing (Scotland) Act). As a declaratory provision, it does not change the law at all; it merely states explicitly what is already the position. There is nothing in the clause that forces a council to dispose of all of its housing; it remains for the council to decide whether to do so.

Since the clause itself does not change the existing law, nor will the amendments. These amendments would not have the effect of requiring councils to continue to hold housing.

We oppose the amendments. The wider question which they raise is whether the Government should allow local authorities to divest themselves of all of their housing. It will not surprise the Committee to know that our answer is, "Yes, provided there are satisfactory safeguards". We are encouraging councils to develop an "enabling" role rather than assuming automatically that they ought to provide and own housing themselves. We have set down clear criteria against which we would judge local authority proposals for disposing of all of their housing, before approving them.

I recognise the concern that if a local authority disposes of all its stock it may be less able to cope with its responsibilities to the homeless. I hope to explain why that will not be the case where wholesale transfers happen.

No local authority can sell tenanted housing without the consent of the Secretary of State. If we believed that the disposal would prevent the authority from carrying out its statutory duties towards the homeless, we would not give consent.

I shall put it more positively. We shall give consent only if we are satisfied that the authority can satisfactorily discharge both duties. We made that entirely clear in the guidelines about voluntary disposals issued last year. In those guidelines we said: The authority should be able to demonstrate in its application for consent that it will satisfactorily discharge its continuing statutory obligations, and, in particular, its duties towards those accepted as homeless". That might be done by entering into contracts with landlords in the area, which might well include the purchasers of the council's stock, to provide the necessary accommodation.

The position is not just safeguarded because councils must convince the Secretary of State. The basic safeguard is the same whether or not the council retains the housing. The council has a statutory duty. As we have said before in other contexts, it is primarily for the local authority to ensure that it meets its statutory obligations.

Clause 145 does not confer new powers on local authorities. It is not placing new duties on them. It merely clarifies the law. The rest is up to the individual local authority within the constraints on transfers that we have set.

I am pleased to be able to tell the Committee that two councils have already met the criteria. The tenants and councils of Sevenoaks and Chiltern concluded that this was the best course for them and for future residents of those areas. In principle, there is no reason why others should not follow that path, to the benefit of all concerned.

Lord Dean of Beswick

I am grateful to the Minister for his detailed reply which was somewhat contradictory. Do I take it that the two authorities that the Minister mentioned have divested themselves, at their tenants' request, of all the local authority housing stock, and that there are now no more council houses in Sevenoaks and Chiltern?

The Earl of Caithness

Yes.

Lord Dean of Beswick

It is a myth to think that homelessness is prevalent only in the large conurbations such as London. It is not. There is serious concern in rural areas, the normal hinterland of government support.

Rural local authorities have been beating the drum for some time about the diminishing stock of council houses which are required to deal with housing need. How is it possible for a local authority that has divested itself of all its houses to carry out its obligations under the homelessness legislation? It will have the legal burden without being able to resolve it. That is where the dilemma comes in.

Have the Government given any thought, where local authorities are preparing to divest themselves of the total housing stock, in terms of nominated tenancies for homeless people or a reservoir of housing for homeless people being kept in being? The more local authority housing is transferred into other bodies, be it housing authorities, housing groups or housing associations of any kind, the more that housing goes outside the control of the local authority involved. I say from personal experience, and from knowledge of people involved in housing, that there is nobody in those areas who can possibly pick up the responsibility of even daring to look at the question of homelessness in the area. I do not know whether the Minister has any comments to make, but I do not see any other outcome.

For instance, if the London boroughs were to divest themselves of all their housing, just think of the number of people who would then be on the streets of London. There is now talk of about 10,000 sleeping rough. I think you will be able to put another nought on the end of that figure within a few weeks. The intentions of the Minister and the Government are totally at odds with the reality of the situation which is growing alarmingly day by day. I do not know whether the Minister will respond —obviously, I have no desire to press the amendment —but the Government have not got one iota of this matter right.

The Earl of Caithness

There was a certain logic to the noble Lord's argument, provided that the matter rested where he left it. But, of course, it does not stop there because —and I repeat what I said earlier —local authorities have a statutory duty, and before they can divest themselves of their housing they have to provide appropriate safeguards to convince the Secretary of State that they can meet their statutory obligations. That is exactly what Sevenoaks and Chiltern have done. They have contracted with the purchasing associations to provide housing for those whom they accept as homeless.

I think that I remember correctly the legislation on the homeless —I am speaking without reference to specific notes on it. The noble Lord, Lord Dean of Beswick, gave the impression to the Committee that it was the duty of the local authority to house the homeless. But I believe I am right in saying that it is not a duty of the local authority to house the homeless. It is a duty of the local authority to secure accommodation. That is their statutory duty. It does not have to be in local authority accommodation. But they have that statutory duty, and if they are going to divest themselves of their own housing they must make sure that that statutory duty is safeguarded.

Lord Dean of Beswick

There is a profound difference here. I accept that the legislation on homeless persons means that a local authority will accept responsibility for housing the homeless. It does not necessarily say that they have to do it. But the Minister pulled two rabbits out of the hat when he mentioned Sevenoaks and somewhere else. Will the Minister tell me what undertakings have been given by Sevenoaks and the other local authority that they can take on board their responsibility for seeing that homeless people are housed in one way or another?

The Earl of Caithness

I repeat —and let me make it absolutely clear —that they have contracted with the purchasing associations to provide housing for those whom they accept as homeless.

Lord Dean of Beswick

How can they possibly judge that on the basis of an increasing and unknown number of people who are becoming homeless? How can one write a figure into that? It is quite impossible, because by any statistics over the past two or three years —and I have to say that the trend is increasing—the number of units required to house homeless people is exploding upwards dramatically. So how can the Secretary of State be satisfied today that a local authority, which transfers an estate next week, will be in a position later even to look at the question of homeless people? I shall withdraw the amendment, but what the Minister has said is totally at odds with the facts and I do not accept it as at all logical. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 177BD not moved.]

Clause 145 agreed to.

Clause 146 [Determination of rents]:

Lord Dean of Beswick moved Amendment No. 177BE: Page 131, line 23, leave out from ("should") to the end of line 25 and insert ("be affordable by existing tenants and prospective tenants").

The noble Lord said: I beg to move Amendment No. 177BE standing in my noble friend's name. This clause will require local authorities to have particular regard to the factors which determine rent levels in the private sector when setting council rents. The effect of the amendment is to ensure that future rent levels are affordable and are not driven out of the reach of the existing tenants or those people in housing need.

The responsibility for setting rents rests with the local authority. The level of rents is set with reference to a number of factors, including the cost of management and maintenance, the cost of servicing debt and the amount, if any, of central government housing subsidy. The amendment assumes that councils do not already look at setting different properties taking into account the size of the premises, their location and condition. So, for example, the rent on a two-bedroomed maisonette will be higher than for a one-bedroom flat in a high rise block. Given that this is the position, what exactly is the intention of this clause? What evidence does the Minister have that councils are not setting variable rents for different types of property?

The clause ignores the fundamental principle of the provision of social housing. The primary motive for councils is to ensure that those in housing need are able to gain access to accommodation at a reasonable cost. The private sector is driven by different forces, of course, and housing associations working with a different system of financing also set rent levels with regard to different considerations than those of the local authority.

Does the Minister not feel that this clause ignores these fundamental distinctions? The clause will require local authorities to look at rent differentials in private sector assured tenancies introduced by the Housing Act 1988. Would it not be more appropriate for councils to be able to examine variations in registered rents between pre-Act agreements?

This clause is yet further evidence of the Government's wish to secure increases in rents but lack of commitment to deal with the issue of affordability. I do not intend to go any further into this particular facet or debate regarding rent levels because my noble friend Lord McIntosh dealt with this at length in the earlier stages of the Committee when we were debating the housing revenue account clauses. I should like to hear what the Minister has to say regarding the Government's views on the subject. I beg to move.

11 p.m.

The Earl of Balfour

But surely a tenant on a low income will be eligible for a rent rebate. Does that not cover the point to a great extent? In making rents affordable, we must think of a local authority's management of its houses. It must charge a reasonable rent in order to manage them efficiently. There is a good rent rebate scheme now which covers those on a low income.

Lord Hylton

The last three lines of Clause 146(3) read as follows: should bear broadly the same proportion to private sector rents as the rents of houses of any other class or description". Will the Minister say what that means? I can foresee it leading to a great deal of litigation and difficult cases before the courts. I now turn to the amendment moved by the noble Lord, Lord Dean of Beswick, which seeks to insert in the Bill the words: be affordable by existing tenants and prospective tenants". While I am in sympathy with that principle, the wording of the amendment is not much clearer than the Bill as presently drafted. I say that because we have in this Chamber debated before now what should be understood by affordable rents in the context of housing associations. It would be helpful if the Minister can give a definite assurance that the rents for local authority properties remaining as local authority properties that will emerge once this Bill becomes law will all be covered by the present or future schemes for housing allowances and rebates which make it possible at present for nearly all tenants to pay those rents which they are properly required to pay.

Lord Swinfen

I shall follow on from what the noble Lord, Lord Hylton, said regarding the wording: any other class or description". Surely the intention is that local authority rents should be similar to the rents of comparable accommodation in the private sector. I think the wording needs to be looked at before the next stage of the Bill.

The Earl of Caithness

I hope the Committee will find it useful if I explain in short order what we are trying to do. Clause 146 is about the variation between rents for different council properties within a local authority area. And that is all. The clause does not require councils to set their rents at the level of private sector rents; this clause is not about the absolute level of rents. The point is that councils own a wide range of different types of housing: detached or semi-detached houses, with or without gardens, terraced houses, maisonettes, flats and so on. We are concerned that council rents within a single authority should reflect these differences fairly. At the moment, Section 24 of the Housing Act 1985 allows authorities to: make such reasonable charges as they may determine for their property, and requires them to review those rents from time to time.

Authorities therefore have a very wide discretion in setting rents for different properties. They may choose to distinguish between different types of properties or amenities, or they may not. All that this clause does is to amend the statute by saying that one important consideration to which councils should have regard is that their rents on different properties should vary in roughly the same way as they would do if they were let in the private sector.

I shall give an example. If the rent a council is charging for, say, a two-bedroomed terraced house is 60 per cent. of the rent charged for a similar property by a private landlord, then the rent for a council flat half way up a tower block should also be about 60 per cent. of the rent of a similar private flat. They must bear those relativities in mind when setting their own rents. The actual levels of rents themselves may of course still be well below what the private landlord is charging.

This does not mean that authorities will have to assess exactly the rents that would be settled by the private sector. That would obviously be an onerous and restrictive requirement, and it might well lead to anomalies. The clause only uses the words, "broadly the same proportion".

While I am on the question of wording, I shall of course consider the wording, as my noble friend Lord Swinfen requested, to see whether it is absolutely clear.

Moreover, the authority is not required absolutely to set its rent relativities by that method. The clause makes clear that it is only one of the considerations, albeit an important one, to which councils should have regard. Other relevant considerations might well take precedence for individual authorities, so the clause requires only that authorities think about the question of market-like relativities.

I should like to follow the noble Lord, Lord Dean of Beswick, in saying nothing about the question of affordability because it was covered so well yesterday. I refer the noble Lord, Lord Hylton, to the Official Report of our proceedings. In particular, I refer him to the discussion of Amendment No. 135KA, which was grouped with Amendment No. 134YA. If the Committee would like me to repeat myself, I should be happy to do so; but I am not sure that they would appreciate that at this hour.

Lord Swinfen

I thank my noble friend for agreeing to look at the wording. If Members of your Lordships' Committee are not clear about what the wording means, many local authorities may not be either. The words of my noble friend in this debate are not taken into account by any court when considering the matter.

Lord Dean of Beswick

I am intrigued by the Minister's reply. When I was the chairman of a very large housing authority in Manchester, during the 1970s, there were no private flats or houses with which to compare rents. They had all been sold off, unless they were very high quality, very exclusive, service flats. Most local authorities have always followed a policy of establishing a rent structure for their properties which identified different types of accommodation. The rent for a four-bedroomed house would be substantially higher than for a three-bedroomed house, and so on down the scale.

If local authorities must now have regard to what is happening in the private sector in the area how does that fit in with the Government's intention, which we debated the other day, to move towards capital value rents? Will not the move to capital transfer rents transcend anything else in the rent system? It must. There cannot be two systems.

The Earl of Caithness

All we are asking the local authorities to do is to take into account the fact that rents should vary for different types of property in the same way as they would in the private sector.

Lord Dean of Beswick

We are not going to get any further. I think that that particular aspect is nonsense. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 146 agreed to.

Lord Hesketh moved Amendment No. 177C: After Clause 146, insert the following new clause:

("Exchanges between secure and assured tenants.

(1) Section 92 of the Housing Act 1985 (assignment of secure tenancies by way of exchange) shall be amended in accordance with subsections (2) and (3) below.

(2) At the end of subsection (1) there shall be added the words "or to an assured tenant who satisfies the conditions in subsection (2A)".

(3) After subsection (2) there shall be inserted the following subsection— (2A) The conditions to be satisfied with respect to an assured tenant are —

1. (a) that the landlord under his assured tenancy is either the Housing Corporation, Housing for Wales, a registered housing association or a housing trust which is a charity; and
2. (b) that he intends to assign his assured tenancy to the secure tenant referred to in subsection (1) or to another secure tenant who satisfies the condition in subsection (2)."

(4) In section 117 of the Housing Act 1985 (index of defined expressions for Part IV) before the entry relating to "cemetery" there shall be inserted — assured tenancy … section 622".").

The noble Lord said: The idea behind the new clause proposed in Amendment No. 177C is to enable secure tenants on the one hand and assured tenants of housing associations on the other to be able to exchange tenancies subject to the consent of both landlords. It gives statutory effect to what may now happen contractually. I understand that the clause originated in the National Federation of Housing Associations and that the Housing Corporation welcomes the principle.

During the Bill's passage through another place the Government agreed to consider an Opposition clause intended to give legislative underpinning to the ability of secure and assured tenants to exchange tenancies. The clause offers advantages in terms of enhancing mobility opportunities and the ability of tenants to exercise choice as to where they live.

The amendment is grouped with Amendment No. 178E in the name of the noble Lord, Lord McIntosh, which seeks the introduction of a target number of moves through any housing mobility scheme funded under Clause 149.

Mobility arrangements have been under consideration in the mobility working party which has only recently completed its final report. Final decisions on the future of mobility arrangements have not yet been made. Noble Lords should also be aware that the majority view in the working party was that mobility arrangements should be voluntary. I think I may say with confidence therefore that it would be inappropriate for the Secretary of State to set targets for the number of moves to be achieved by any mobility scheme funded under the clause. I should also make clear that the clause relates to the funding of mobility schemes rather than to the details of how they operate. That is why we shall resist Amendment No. 178E.

Lord Dean of Beswick

I understand that in moving the amendment the Minister said that he was awaiting the report of a working party investigating the question. We shall therefore await the findings of that working party and perhaps, if necessary, come back to the matter at a later stage.

Lord Ross of Newport

I wish to put on record the fact that we welcome this move on behalf of the housing association movement. I think that it is right and I therefore congratulate the Government on having made it.

On Question, amendment agreed to.

11.15 p.m.

Lord Hesketh moved Amendment No. 177CAA: After Clause 146, insert the following new clause:

("Removal of exception to the right to buy.

.—(1) In Schedule 5 to the Housing Act 1985 (exceptions to the right to buy) paragraph 11 (dwelling-house particularly suitable for persons of pensionable age etc.) shall be omitted.

(2) The repeal by this Act of paragraph 11 of Schedule 5 to the Housing Act 1985 does not affect the operation of that paragraph in any case where the tenant's notice claiming to exercise the right to buy was served before the repeal comes into force unless, at that time, no notice in response had been served under section 124 of that Act (landlord's notice admitting or denying the right to buy).

(3) For the purposes of subsection (2) above, no account shall be taken of any steps taken under section 177 of the Housing Act 1985 (amendment or withdrawal and re-service of notice to correct mistakes).").

The noble Lord said: The new clause seeks to extend the right to buy to tenants of certain flats and bungalows which are currently excluded from that right. The clause repeals paragraph 11 of Schedule 5 to the Housing Act 1985, which provides that the right to buy, as enjoyed by most council tenants, does not arise if the property is particularly suitable for occupation by persons of pensionable age and has been let for occupation by such a person or by a disabled person. Paragraph 11 does not apply to housing which is part of a sheltered scheme. There is a separate exclusion for sheltered housing in paragraph 10 of the schedule and the amendment does not affect it.

It may be worth remembering the historical background to the amendment. When the right to buy was introduced, the Housing Act 1980 enabled a landlord, faced with an application to buy a particular property, to seek a determination by the Secretary of State taking it outside the right to buy. The Secretary of State was required to make such a determination if he was satisfied that the house or flat was designed or specially adapted for occupation by people of pensionable age, and that it was the practice of the landlord to let it only for occupation by such people. In 1984 the statutory criterion was modified slightly. The Secretary of State had to be satisfied that the dwelling was particularly suitable for occupation by elderly people, having regard to its location, size, design, heating system and other features, and that it had been let for occupation by an elderly or disabled person.

The Secretary of State disappeared from the picture on 7th January 1987 as a result of an amendment carried against the Government in this Chamber in the Housing and Planning Bill. There is now no need for the landlord to seek a determination by the Secretary of State. If the landlord is satisfied that the property meets the statutory criteria, he can deny the right to buy. An aggrieved tenant can challenge this in the county court, but, not surprisingly, such challenges are rare.

We debated in last year's Housing Bill the provisions under which housing, other than sheltered housing, specially designed or adapted for disabled people was excluded from the right to buy. An amendment to bring such housing within the right to buy was tabled by my noble friends Lord Swinfen and Lady Masham and commanded overwhelming support. It became law as Section 123 of the Housing Act 1988 and opened up the right to buy to disabled tenants who had felt it to be particularly unfair that they did not have the same right to buy as others. So much by way of setting the scene.

The Committee now has before it two amendments. Amendment No. 178C was tabled by my noble friends and follows up last year's change in the law by providing that a property suitable for elderly people can no longer be excluded from the right to buy on the ground that it has been let for occupation by a disabled person. The amendment in my name goes wider and seeks to remove altogether the exclusion from the right to buy of non-sheltered housing particularly suitable for elderly people.

The object of my amendment is to see fair play. The Department of the Environment hears each year from some 300 tenants who have been denied the right to buy under paragraph 11, and it is very difficult to respond convincingly to the complaint that they are being treated unfairly. Last year the Chamber was persuaded that it would be right to put disabled tenants on a par with other people by giving them the right to buy. We still discriminate against elderly tenants, and I find that hard to defend.

It is difficult to know what to say to people like a couple who rent a bungalow at Bilborough from Nottingham City Council. The husband rented a prefab from the council in 1947, but it was replaced by a new bungalow in 1983. The council says that a new tenancy was granted at that time, and since the wife was by then over retiring age it says that the bungalow was let for occupation by a person of pensionable age. The council therefore denied the right to buy under paragraph 11, even though it was quite incidental that one of the occupants was of pensionable age when the prefab was replaced by the bungalow.

If the people who are disadvantaged by a statutory rule cannot see the reason for it and feel that they are being unfairly treated, I suggest that we ought to consider very carefully whether the law is right.

It would be easier to answer the complaints if the right to buy were being denied in respect of housing which is clearly different from the general run of public sector housing. This need not be the case. The legislation only requires the property to be particularly suitable for occupation by people of pensionable age: it does not have to be purpose-built or specially adapted, Paragraph 11, as amended in 1986, lists five particular matters to which regard must be had in deciding whether a dwelling is "particularly suitable"; but a flat or bungalow may pass all five tests without being in any way unusual. It is hardly surprising if tenants are baffled when they are told that their homes fall into a special category which cannot be sold.

It may well be pointed out that the criteria for exclusion from the right to buy were just as broad before 1987. The difference is that the Secretary of State used to act as an independent judge in determining whether a dwelling was particularly suitable for elderly people. Now that the question is at the discretion of the landlord, subject only to the possibility of a reference to the county court, it does not seem acceptable that the test should be so loosely worded.

In fact it is clear from the department's correspondence with local authorities that a bungalow or ground floor flat which has been let to an elderly or disabled person is now very likely to be excluded from the right to buy even if it is not recognisably different from any other ground floor property. I do not propose to take up the time of the Committee in quoting what local authorities have said to the department about the way they operate the legislation, but I am ready to give examples if noble Lords wish.

I do not accuse landlords of behaving improperly if, for instance, they look carefully at all their bungalows and decide that they meet the statutory criteria for exclusion from the right to buy. There are, however, cases in which I am sorry to say it seems that landlords are taking their interpretation of the law to the limits of what is acceptable, and indeed beyond those limits. With the permission of the Committee I shall illustrate that with just two examples.

I referred earlier to five points to which the legislation requires regard to be had in deciding whether or not the exemption applies to a particular property. One of those points is whether, in the case of a flat located above the ground floor, access by lift is available. On 29th December 1988 Calderdale Borough Council wrote to the department about a flat in Halifax saying that while they accept that the flat is located above the ground floor, and confirm that no lift is available, the accommodation is reached by 30 steps divided into four easy rising flights. The authority maintained its view that the flat was outside the right to buy.

Another of the statutory points to be taken into account is that the property should have no more than two bedrooms. This has not deterred the City of Durham from denying the right to buy in respect of a three-bedroomed property.

These are not isolated cases. As I said earlier, I could go on speaking fairly indefinitely in your Lordships' Chamber, which would, I am sure, engage the wrath of the Committee. Let me move from individual cases to the general picture. The Secretary of State for the Environment, while he had jurisdiction, made a total of 519 determinations excluding properties from the right to buy under paragraph 11 or the predecessor provision. Since 1987, local authorities in England have reported denying the right to buy under paragraph 11 to over 6,000 tenants. The true figure may be greater than that, since the returns only go to the end of June. Denials are running at about 3,000 a year.

I do not propose to re-open the debate of 1986 about the way in which the Secretary of State exercised his function for making determinations under paragraph 11. There is room for argument about how narrowly the test of particular suitability should be applied. But on any view of the matter, the total of 519 determinations made by the Secretary of State from the inception of the right to buy stands in stark contrast to the 6,000 denials issued by landlords in just two and a half years. I am ready to be persuaded that it was justifiable to deny the right to buy in all those cases, but, frankly, I should be surprised if this were so.

Can there be any good reason to block the wish of over 6,000 elderly people to stand on their feet and stop being council tenants? I have no doubt we shall be asked to accept that there is an overriding need to retain their homes for re-letting to other elderly people when the present tenants die or move to other accommodation.

I find this argument rather questionable. After all, there are many tenants of ordinary council houses who have reached retirement, and we do not say to them, "By all means buy your home so long as you are young; but once you are old you may not buy, because we want to let your house to someone else when you are no longer with us". If the housing excluded from the right to buy under paragraph 11 were clearly special it would be easier to justify retaining it. But we believe that is not the case. Nevertheless, let us consider the argument on its own terms.

A landlord cannot re-let a house or flat which is subject to a secure tenancy, so a sale to a secure tenant under the right to buy does not of itself deprive the landlord of a vacancy. What matters is the prospect of recovering possession at some point in the future. The department has estimated that, if as many as 5,000 sales took place each year as a result of repealing paragraph 11, there might initially be a total of 125 fewer vacancies coming up for re-letting by English local authorities each year. Over the years the number of vacancies lost would probably rise, to something between 3,000 and 4,000 after 15 years.

Putting those figures into context, English local authorities report that they own over 330,000 houses and flats specially designed or adapted for elderly people. In addition, there are some 137,000 houses and flats for elderly people owned by housing associations, more than three-quarters of them owned by charitable associations and thus not subject to the right to buy. Last year housing associations in England provided over 4,000 new dwellings for elderly people.

Provision of housing by housing associations is on the increase. Expenditure is planned to rise by more than 60 per cent. between this year and 1991–92. What message can we derive from those figures? On a rather extreme assumption about likely sales to elderly tenants if paragraph 11 is repealed local authorities are likely eventually to lose a few thousand vacancies each year, probably less than 4,000. That is less than 1 per cent. of the present stock of public sector housing in England thought to be suitable for elderly people.

Provision of new housing for elderly people by housing associations is already enough to replace the vacancies which would ultimately be lost if paragraph 11 is repealed. Investment by housing associations is planned to rise sharply. It is clear then that extending the right to buy to non-sheltered housing for elderly people will have a very limited effect on the availability of suitable properties in the future.

Before I conclude let me mention the special position of disabled tenants. Last year my noble friend Lord Swinfen and the noble Baroness, Lady Masham, persuaded noble Lords that the right to buy ought to be extended to houses especially designed or adapted for disabled people provided they did not form part of a sheltered scheme. Sadly, that has not proved to be the end of the story because some disabled tenants have been told that they still cannot buy because they live in a bungalow or flat which is particularly suitable for elderly people. I cannot believe that that was what the Chamber intended last year when it welcomed the change in the law proposed by noble Lords.

I recognise and respect the strong feelings which the subject provokes. Nevertheless, the present state of the legislation is hard to defend and gives rise to justifiable complaints of unfairness. In the past two and a half years over 6,000 elderly tenants have been told that they are not to have the same rights as other council tenants for reasons that are difficult for them, or, I might say, anyone else to understand.

It does not seem that repealing the exclusion of their homes from the right to buy would have a serious effect on the ability of landlords to meet the future need for rented housing for elderly people. I therefore invite the Committee to follow up the good work done last year which brought disabled tenants within the right to buy and will bring an end to the continuing discrimination against elderly tenants. I beg to move.

Lord McIntosh of Haringey

Fortunately, we have with us this evening my noble friend Lady Birk who has been involved at a number of stages over a number of years in this sometimes tangled history of the right-to-buy legislation. She certainly can put the matter into perspective much more effectively than I can. She enables me to speak at much shorter length than would otherwise be necessary. However, there are two or three points that I feel I have to make about the situation as we find it now, particularly the situation that we have found since the debates on the right to buy for the disabled last year. I do not intend to go over that ground at all.

The first thing that has to be said about this proposal is that it is brought in at a very late stage in the Bill. It has been brought in without any consultation whatsoever with local authorities, with the National Association of Housing Associations, or with any of the other bodies concerned with housing for the elderly, either in general or in particular. They are deeply offended by this lack of consultation and it contrasts rather badly with the consultation which took place at all times when the right to buy for disabled people was under consideration. The question must be asked —this is a wider question than the number of hard cases which the Minister presented to the Committee —why is it considered proper for this major change in housing legislation (because it is that, let us be quite clear) to take place without the consultation which is not only necessary in itself but is so frequently prayed in aid by government when government do not want to do something quickly? Very often consultation is the excuse for not doing something.

The second point is —and it is not easy to say this without the possibility of giving offence to some people —that there is a major difference of principle between the right to buy for the disabled and the right to buy for elderly people. It is this. If disabled people exercise the right to buy then they are buying houses which are not only suitable for the disabled, but are probably uniquely suitable and have almost certainly been adapted in some way.

The noble Lord, Lord Swinfen, knows far more about this than I do and probably anybody else in the Committee. I shall certainly not cross swords with him about it. The point that he was advancing all the time was that here was a kind of accommodation particularly appropriate for the disabled and therefore presumably the temptation for it to pass out of the reach of disabled people in need was that much less. I did not agree with that. I thought that the loss of accommodation particularly suitable for disabled people was a serious problem. I thought, and I still think, that this is a case of the better off disabled benefiting at the expense of future generations of less well off disabled people. If that argument has any strength for disabled people, how much more is that the case for elderly people?

Let us look not so much at the physical conditions of the accommodation, although that is important, but at the conditions of elderly people. Many of them, probably most of them, have younger family around. It will be an enormous temptation for the younger family, if they can possibly afford it, to provide financial help for these elderly people in order to achieve the right to buy for them. It is not particularly important for the elderly people themselves, because they will stay in the same place anyway as they are secure tenants, but specifically this property of dwellings which are suitable for elderly people, should not pass out of the reach of future generations of elderly people to their younger relatives. This is worse than the better off disabled benefiting at the expense of the less well off disabled because, of course, the disabled are of any age. This is the families of elderly people benefiting at the expense of the less well off elderly people. No elderly people benefit at all. They are in the same property until they die. However, their families will benefit. They will receive a windfall benefit subsidised by the state from the discounts given. Property suitable for people of pensionable age which is always in short supply will no longer be available for those people.

If it is the Minister's case that determination by the Secretary of State should return then he should say so and we would argue it. If it is his case that there are ways in which this particularly suitable accommodation will be replaced —for example, if he said that every time there was a right to buy, there would be a basic capital approval for its replacement by the housing authority —then he should say so and we would argue it. However, to put it in the bald terms of the complete repeal of paragraph 11 seems to us to be going far beyond anything that has ever been considered by government before and seems to us to be taking away a very large part of the capability of local housing authorities and, indeed, non-charitable housing associations to deal with the problems of housing the elderly which face them. I hope that the Committee will resist this amendment with all the strength and voice it has.

11.30 p.m.

Lord Evans of Claughton

I am glad to hear that the noble Baroness, Lady Birk, will speak later because she has reminded me, if I needed reminding, that she has been campaigning against the insidious attempts by the Government, since they came into office in 1979, through their right to buy legislation, to include accommodation of this kind for the elderly.

It is extraordinary that in this back door way they are trying to do once again what they have failed to do so often in the past. I fear that they may get away with it this evening because of the lateness of the hour and because comparatively few noble Lords are present. I hope that we keep this debate going until Members of the Committee opposite get on their coaches to go to listen to their leader, the Prime Minister, in Blackpool and that we perhaps have a vote after they have left.

This is a very serious matter. In the area where I was a council member for many years, it is quite easy to identify the houses for the elderly. They are usually rows of bungalows which were built years ago for the specific purpose of housing the elderly and which have been used as such ever since. It may be said that there are disadvantages to that because the undertaker is visiting the area too often. I accept that there are disadvantages. Nevertheless, there is no difficulty in identifying those properties. On our housing estates, as I suppose is the case in many other urban areas, there are a large number of ordinary houses with bungalows attached for the housing of the elderly —"the granny" accommodation as it were. It all seems to work very well.

I understand the argument of the Government. It is a question of balance of discrimination. One person's privilege in being able to buy his or her house is another person's discrimination. Why should elderly people at the most vulnerable time of their lives —perhaps having lived as tenants in the private sector for many years in inadequate accommodation and unable to afford to buy their own property because the right to buy legislation does not apply to them —not be able to spend the last few years of their lives in decent, modern accommodation built by local authorities specifically for the purpose of assisting and looking after that sort of person? Why should we give a privilege to the kind of person, mentioned by the noble Lord, Lord McIntosh, who persuades Dad and Mum to let them buy the house through them arid then takes over the house for a younger family when it should properly be used by elderly people, and lose that house from the stock of suitable accommodation for the elderly?

I could take noble Lords round large areas of Merseyside where there are still many families of elderly people living in grossly inadequate accommodation without proper washing facilities, with difficult stairs to climb, and so on. Why should this Government be so keen on privileges for some families and at the same time maintain disadvantages of a humiliating kind for many of the elderly who have given a great deal for their country and tried to help their children?

A choice must be made, one way or the other. I know clearly what my choice has been through our discussions on this subject. We should retain accommodation more suitable for the elderly within the public sector so that it can be available for the elderly who are in need. We should not be giving a bonanza to so many younger families and allow them to take over accommodation from the elderly when they could so easily afford to purchase for themselves accommodation of a more normal, semi-detached type, perhaps on a private housing estate.

It is not often that I get angry about such legislation. It does not pay to get angry at this time of night because we shall be here for long enough without extending it, but I feel really angry that this Government should keep coming forward with this measure, one sneaky way after another, to achieve their aims in a back door manner. I oppose this amendment tooth and nail.

Lord Hylton

I rise to support noble Lords who have spoken to this amendment. It is amazing that the Government should seek to introduce this type of amendment at this stage of the Bill after it has passed through another place and at this very late hour.

The Government must surely know by now the views of this Chamber, which have been so clearly expressed on numerous occasions since 1980. We are still in the same situation of having an absolute shortage of suitable flats and bungalows for old people. We know that old people are living longer. Just about any doctor or councillor in this country can quote many examples of old people living in flats with no lifts or in houses where they are either obliged to use the bedrooms when they are not capable of mounting the stairs or else they have to live on the ground floor and the bedrooms go to waste.

The situation has been made worse by the virtual ending of building by local authorities and it has not been materially improved by the emergence of commercial sheltered housing for sale. There will be acute problems in most towns because of the shortage of sites that are on the level and that have access to shops and other amenities that old people need.

I know from my personal experience in Somerset that there is an acute problem in villages. What we all want is for it to be possible for old people who have worked and lived in a particular village to be able to move into suitable smaller accommodation in that same village during the latter part of their retirement. That is not always possible now and it will be less so if this amendment is carried.

The noble Lord, Lord McIntosh of Haringey, quite rightly pointed out the kind of financial consequences that may follow from purchases by old people financed by their relatives. I wish to mention the social consequences that are likely to follow when a two-bedroomed bungalow comes to be occupied by a young family in the midst of a settled population of old people. There will undoubtedly be conflicts between neighbours. Have the Government thought about that?

The Government appear hell-bent on making social housing a purely marketable commodity that can be sold in any direction regardless of the social situation and the needs of particular localities. The noble Lord who introduced the amendment placed considerable reliance on the recent change in the law concerning dwellings for the handicapped. I submit that that was a red herring in this context.

Lord Monk Bretton

I must express some anxiety as regards this amendment very much on the lines of the comments made by the noble Lord, Lord Hylton, particularly with reference to the rural context. It is vitally important —bearing in mind how restricted housing resources are in villages —not to make matters worse for the elderly who wish to remain where they have reason to live. This matter is going to become more difficult. It is the factor that led me not to agree with a previous proposal of my noble friend Lord Swinfen.

I am perhaps straying wide of the present amendment and touching upon one we are about to discuss. I am very glad that the Government intend some help regarding the difficulties of rural housing by looking closely at low-cost housing in villages. That is highly commendable. What we are doing about this amendment appears to cut right across the path of trying to do something to keep village society balanced and in order in the way that we have known it.

The Earl of Kinnoull

This is a sensitive subject for all who have taken an interest in it over many years. It is unfortunate that it should arise at this time of night. I came with an open mind this evening. I recall that in 1985 the Government took a different view. Now they take another. I agree wholeheartedly with the noble Lord, Lord Evans. This is a balance of discrimination. I thought for a moment that the noble Lord, as so often with Liberals, was going to come down on a different side of the argument. I watched the Opposition's face; I am sure that they thought so too.

There is a strong argument for asking: why should elderly people be discriminated against? For instance, what is the definition of an elderly person's home? There is no clear definition. I have not looked back to see what it is. I am involved with housing in a professional way outside the Chamber. It is a very attractive thought that among an elderly community there should be young people as well. They can help elderly people.

I say that quite seriously. I feel that the question of the balance of discrimination is the kernel to this argument. I ask the Opposition whether they really think that because you have reached the age of 70 or 75 you should no longer be entitled to benefit from the major policy of this country in housing which is the ownership of your home and the right to purchase it. Is that fair? Why should there be discrimination? I appreciate that there is housing association housing and local authority housing specifically designed for the elderly. However, that is specific, and we are talking about general law. I thought that my noble friend argued cogently and persuasively that his department has seen that it is difficult to defend this discrimination. I therefore support the Government on this occasion.

11.45 p.m.

Baroness Birk

The Minister explained as cogently and elegantly as anyone could explain something that is extremely squalid and very damaging. The amendment has a history. It goes back long before the Minister's time —he must have been a young man then —and has been referred to by my noble friend Lord McIntosh and the noble Lord, Lord Evans of Claughton.

The story began in 1980 when in this Chamber I moved an amendment to exempt from the right to buy houses that had been specially designed for people of pensionable age. On that occasion the late Lord Amory made a magnificent speech in support of the amendment. He was concerned with housing, not as a party political football but as a means of solving what was and still is an enormous problem. He said that he was convinced by what we were saying about the problem and joined us in the Division Lobby with eight of his colleagues. We won the vote. This amendment would set the clock back. I asked my noble friend who is in charge of the Bill for the Opposition whether he would object if I intervened on the matter because of my strong and passionate feelings about it. I have spent a number of years of my life trying to do something about this problem, although there is a limit to what one can do when the housing problem is so bad.

The story moves on to the Housing and Building Control Act 1984. We succeeded with a more restricted amendment that was won in Committee in 1984 with a majority of 23, a sizeable majority. The amendment which I moved had attached to it the names of the noble Baroness, Lady Elliot of Harwood, and the noble Lords, Lord Evans of Claughton and Lord Hylton. In another place the Government tried to replace our simple, clear and positive amendment. They sent back some discursive proposals on rural areas and pre-emption which did not make logical sense. Everybody was aware of that and said so.

To its credit, this Chamber stuck to its guns and insisted on its amendment being restored. Indeed it was, even though it was by a majority of only one vote. The amendment itself referred to the dwelling-house being designed or specially adapted to make it suitable for occupation by persons of pensionable age and to its always having been the practice of the landlord to let the dwelling-house for occupation by persons of pensionable age. "Designed or specially adapted" meant accommodation built or adapted in accordance with the principles, advice and guidance on the design of elderly persons' accommodation issued by the Secretary of State and available to landlords at the time of construction or adaptation. I agree with the noble Earl; it is not very easy to find a precise definition, but that was the best one available. That is what we have been living with until fairly recently, as the Minister explained.

It is now argued that the provision is unfair and the word "discrimination" has been greatly used in this respect. In fact, the Minister said that his object was to see fair play, But I ask Members of the Committee: is what is proposed unfair when people are living much longer and when many of them could cope in their own homes if they were suitably designed and adapted for them? Is it unfair when these men and women could live fuller and happier lives and save the state or the local authorities the expense of looking after them in residential care or even in sheltered housing? Is it unfair when too many people on low incomes or pensions badly need the special physical features which have been available to them since 1980 in various legislative forms? But of course that does not apply to all of them.

As we know, the biggest growth factor in housing is, unfortunately, homelessness followed by very poor, deteriorated housing. As we are all aware, local authorities are being financially squeezed to death and they are not permitted to use the money derived from their house sales for building new houses. If that were to be allowed, we would be replacing a very depleted housing stock. However, this is the moment the Government decide to take such protection away.

The Government, as we all know —and this applies not only to Members of the Opposition and Members of this Chamber but also to Members of another place and people in the country —are unfortunately pretty short on care and compassion but long on a great many other matters.

In my opinion the most depressing factor is something to which the noble Lord, Lord Evans, referred; namely, that the attitude has worsened. It is certainly quite different now from what it was in the 1980s, as I just pointed out, when a distinguished Conservative —a senior Cabinet Minister —was able to announce to the Chamber that he was going to support the amendment proposed by us and others. In fact, not only did he go into the Lobby but many other people went with him.

I feel both sad and angry in respect of the understanding and morality which motivated many Conservative Members of this Chamber. They saw housing in much wider—human, if you like —terms as a problem. Unfortunately, reading through the Division lists of both 1980 and 1984 it appears that most of them are no longer with us. It is not only sad from an individual point of view, but it is also sad because it indicates that there is a change which is not healthy. It is not healthy in political terms, it is not healthy for our society and it is not healthy that this should be taking a grip because it goes all the way down to younger people.

When we are so short of housing, it would seem to me to be quite wrong to bring in a reversal at this time. We should not be distracted by phrases of "fair play" as though this is really a game which we are playing in which everyone must have this equal right. The world is not like that.

As has been pointed out by almost every speaker, the people living in the houses that they cannot buy know that they have special, comfortable accommodation. We are short of that type of accommodation. It is important that we house as many elderly people as possible, and therefore we cannot afford, in social or housing terms, to take the step now proposed.

As has been said, this is late at night. Everyone has spoken seriously on this matter. Everyone is troubled about it. The Minister should take the amendment away and take the opportunity to discuss it further with my noble friend Lord McIntosh rather than leave it on the false basis of equality.

Lord Ross of Newport

The Government are now, and have been for some time, reviewing the workings of the homeless persons legislation. If the review is concluded, is it intended that in future local authorities will not be responsible for housing the elderly and vulnerable? They are the two classes of people who are entitled to be housed under the homeless persons legislation. Local authorities normally take the age of 60 for women who have a priority for housing under that legislation.

If we sell the bungalows where will those people be housed in the future? The local authorities are not building properties and the Government would be putting them in an even more difficult situation. What are they to do with elderly and vulnerable people who need to be rehoused and who are entitled to be rehoused as a priority? Are we going to put them in multi-storey flats, or something? That cannot be right.

Secondly, what about management? The management of the estates will be broken up if some of the properties are sold. Some of the GLC tenants on the Isle of Wight may well buy a few of the houses. The management is then interrupted.

Finally, if we are talking about discrimination, what about the younger generation? What about my children? They are being discriminated against. They have not been able to rent a property. They either have to go into short-term accommodation, which they cannot acquire, or they have to pay way over the odds to buy a place with a huge mortgage. They are the people in society who are being discriminated against —the 20 to 30-year-olds, the 60 per cent. who have been priced out of the housing market all over East Anglia and in many parts of the South and West. They, more than anyone, are the people we should worry about. Nothing comes from the Government for them.

12 Midnight

Lord Swinfen

My name has been mentioned, particularly in respect of the right to buy for the disabled. I have tabled Amendment No. 178C, to which my noble friend Lady Masham has put her name and to which we are also speaking.

I should apologise to disabled people if it becomes necessary to move that amendment later. I misread the relevant paragraph of Schedule 5 to the 1985 Act. I thought that it referred to elderly people who were also disabled, and not elderly or disabled people. If necessary, we shall deal with that point later this evening.

I give the amendment my warmest support. If people were not allowed to buy their houses on the grounds of colour, race or creed, every Member in the Chamber would be on their feet making terribly emotive speeches. Just because one reaches a particular age is no reason to prevent one buying one's home. It could be just as well said that when you reach the age of 65, 70 or whatever it is, then you cannot buy a motor car because there are already sufficient on the roads. I have had representations from a number of elderly people who wish to buy their homes. I have also had discussions with Help the Aged, and they are in favour of this amendment.

People have said that selling these homes will reduce the number that are available —far less in my view than many people have suggested. Most elderly people. will continue to live in the home that they buy. When they die the home will come on the market. It could be occupied by a young family with very few . children or, probably, a couple with no children. They also need to be housed. There is not a loss of a building by selling it, as is so often intimated.

Baroness Birk

I wonder whether the noble Lord will give way to answer a question. He says that the property will be ocupied. Of course it could be, and of course there is a shortage of housing for young people as well. But will he take into consideration that an extra investment has gone into the houses which have been adapted or designed for elderly people and those will be slipping out of the housing stock? That is an important point.

Lord Swinfen

If the noble Baroness had allowed me to go on I would have come to that point. I said that a number may go to small families, to couples. The vast majority will still be bought by elderly people because they are suitable for them. It does not prevent the need to build. The private sector should be encouraged to build. There is absolutely no reason why the private sector should not build for elderly people as well as for people with families. The mere fact that it is private does not make the building any less suitable for elderly people.

Lord Ross of Newport

I could not agree more. If we can get private property built by individuals to let, that is fine. But what sort of rent does the noble Lord think those properties will require at today's capital values? Does he think most elderly people would be able to pay those market rents?

Lord Swinfen

I do not mind whether they are for rent or for sale; it is the accommodation that is important. There is one point that has not been raised and that is the need for elderly people to be mobile, to be able to move to where their younger relatives are moving. We have a very mobile labour force today and it is often extremely difficult for young people to be able properly to look after their elderly relatives, if their relatives are left in one part of the country and the young people have a job in another. If the elderly are able to buy their accommodation and sell it, they can move on and buy similar accommodation in another area and still be looked after by their relatives.

It has also been suggested that elderly people would be disturbed and disrupted if the accommodation was bought by a family with young children. Do we really want to keep elderly people in ghettos? It would be bad planning to have one group of people in one place the whole time. There should be a mixed grouping of people, so that the young could help the elderly and the elderly could give their wise advice to the young.

I feel also that there will be far fewer sales of this type of property than has been suggested. Elderly people are normally on pension. They may not be able to get the type of mortgage that they require. It has been suggested that their young relatives will be able to finance them, but they are probably paying off a mortgage as well. I think there will be many fewer young people than is thought buying accommodation for their elderly parents. I believe that the Committee should support this amendment.

Lord Carter

I had not intended to intervene on this amendment, but it occurs to me to ask the Minister a question.

If in fact this scheme works and elderly people are enabled to buy their house, there is now the common practice of then re-selling the house to secure an annuity for the old people to live on. Presumably they would be able to do this?

If they bought the house they would be able to sell it on immediately at the market value to the institutions who are prepared to offer this service and secure an annuity on which they could live, and then the house would be lost in the general market on their death.

Baroness Masham of Ilton

I should like to support this amendment. There has been most hurtful discrimination against disabled people who are living in the community and have been denied the right to buy their council houses while other people have been able to buy similar houses. I have files of letters, and I have had desperate telephone calls from people from all parts of the country, and many of these letters I have sent on to the department.

This amendment will put right an injustice. I thank the Government and the Ministers involved. But I hope that the Government will encourage the private sector, along with the local authorities and the housing associations, to build as many suitable houses as possible. The private sector especially has not done enough. They are not catering for all needs in the community. I hope that this amendment will jolt the consciences of all people who build houses.

There needs to be a healthy growth of suitable housing for elderly and disabled people in all sections of housing stock. In the last few years not enough has been done. It has been said that elderly people are living longer; therefore there should be far more suitable housing for them. Would it not be possible to restrict planning permission unless new housing is suitable housing for them? Would it not be possible to restrict planning permission unless new housing is suitable for the elderly and disabled people?

Lord Dean of Beswick

One point that has been missed —and it answers the point made by the noble Baroness, Lady Masham —is that in all the building schemes that were invoked a few years ago when the big building programmes were under way by the local authorities, there was a stipulation made by a succession of governments that 30 per cent. of each contract had to be single-unit accommodation for elderly people.

That was because this country historically did, not build for elderly people. After the war there was hardly any accommodation for elderly couples. Successive Housing Ministers of both governments insisted that we had within all our building programmes a 30 per cent. quota specially built for elderly people to live in, be they types of flats or bungalows.

I do not believe that the governments of those days, both Labour and Conservative, got it wrong. I wish that the case that was being made for this particular exercise was a more creditable one than the noble Lord, Lord Swinfen, has tried to make out. I have never heard such unadulterated rubbish in my life. Does the noble Lord know the cost of buying a two-bedroomed bungalow now? Does he really think that the average person who is in local authority accommodation or other accommodation when they retire can suddenly go into the housing market and purchase a bungalow? The noble Lord is talking absolute rubbish and knows nothing about the housing situation. I know of some bungalows being built on the outskirts of Manchester. They are rather lowly priced by comparison with others at about £45,000 for a small two-bedroomed bungalow. However, when I tried to negotiate one of the bungalows for my daughter and her sons I found that all the people on the list were elderly.

Some of the first debates I listened to in this Chamber concerned this very subject and emotions ran very high. The Minister who tried to get the Government view across at that time was the noble Lord, Lord Bellwin. He pleaded and pleaded with the Chamber, but he did not even manage to convince many noble Lords on his own side of the Chamber. I am sure those noble Lords who objected to the measure would be totally horrified, if they were present today, at what is being carried out and at the hour of the night it is being carried out. I should have expected a genuine case to be made as regards why people should be allowed to buy these properties and take them out of the local authority stock. We are of course undeniably a rapidly ageing population. Therefore it appears we are expected to ask private builders to fill sites with one or two-bedroom bungalows for people of retirement age to buy. That is absolute nonsense. The Government have not made out a case for this measure, and no case has been made out for it tonight. This squalid measure is to the eternal shame of those who are trying to make out a case for it.

Lord Hesketh

I can assure the Chamber that I have already apologised for taking a considerable length of time in deploying the Government's case. Therefore, I shall not repeat it again. However, I wish to reply to certain points that have been raised this evening, the first being consultation. In the ordinary course of events we should certainly wish to consult in the usual way before proposing a change of this kind. It was however only when we came to consider the amendment to paragraph 11 tabled by my noble friend Lord Swinfen and the noble Baroness, Lady Masham of Ilton, that we came round to the view that it would be right to go further than was proposed and repeal the paragraph outright. It is unfortunate that by the time we came to this view there was not more time for consultation.

I was very interested when the noble Lord, Lord Swinfen, pointed out that Help the Aged is in favour of the proposal of the Government. The noble Lord, Lord McIntosh, and many other Members of the Committee pointed to the position which they believe existed. The noble Lord, Lord McIntosh, said that the elderly would not benefit from the measure, as they would only remain in the accommodation until they died. He said the next generation would obtain the benefit. I have read a lot of letters from people who have written to the department stating they wish to acquire their property as they feel they should have a right to do so. The noble Earl, Lord Kinnoull, and the noble Lord, Lord Evans of Claughton, came out with an interesting point at different times. They said there was a level and a balance of discrimination.

Lord McIntosh of Haringey

I am grateful to the Minister for giving way because this was a point on which the noble Earl, Lord Kinnoull, specifically challenged me. He asked me whether I thought there was discrimination against those who were being denied the right to buy. I have to say that whatever one does with housing for the elderly or with housing for anyone in special need, there are bound to be fewer resources than there is demand. But the discrimination which this amendment is supposed to be remedying, and which the noble Earl is so concerned about, is discrimination against a particular subgroup of the elderly and not the elderly as a whole. It is the subgroup least in need. They are least in need first because they already have accommodation which is particularly suitable for them; in other words, they are not living in unsuitable accommodation, for example, up flights of steps or without adequate facilities and, secondly, those who are protesting to the department —I do not deny that the department has received representations —are the least in need of that least in need group. They are the ones who have the money to buy. The role of the private sector has been referred to. Indeed, why do they not buy, for example, the properties provided by McCarthy and Stone and other builders who provide for elderly people?

The discrimination, therefore, is a minor discrimination against the least in need of the least in need. Those to whom nobody supporting the amendment has paid any attention at all are the elderly people who will never have the money to buy and who live in accommodation which is not suitable for elderly people. It is discrimination against them that concerns us. That is what makes me and my noble friends so angry about the amendment.

Lord Hesketh

The noble Lord, Lord Ross of Newport, made the same point. He also made another point which does not relate directly to what we are now discussing but which interested me, concerning the shortage of affordable rental property for the young. The Government's record in recent years on trying to recitify the situation, particularly in terms of encouraging the restoration of private rented property, is something that I hope he would applaud.

The noble Lord, Lord Dean of Beswick, spoke of his experience with quotas. I should like to chide him with a point made by the noble Baroness, Lady Masham. The noble Baroness quite rightly pointed out that the elderly are the fastest growing group in this country and their needs generally will have to be attended to more and more, going far beyond the terms of the debate in your Lordships' Chamber this evening.

The noble Lord, Lord Carter, asked whether a property could be sold immediately. There is a financial requirement for the discount to be repaid in the event of a sale taking place within three years of the purchase.

In closing I should like to say that the noble Baroness, Lady Birk, told the Committee that we should not be distracted by phrases such as "fair play". All I can say is that this Government have been distracted by the phrase "fair play".

12.17 a.m.

On Question, Whether the said Amendment (No. 177CAA) shall be agreed to?

Their Lordships divided: Contents, 29; Not-Contents, 17.

DIVISION NO. 2
CONTENTS
Balfour, E.	Kinnoull, E.
Belstead, L.	Long, V. [Teller.]
Borthwick, L.	McColl of Dulwich, L.
Brougham and Vaux, L.	Mackay of Clashfern, L.
Caithness, E.	Masham of Ilton, B.
Coleraine, L.	Oxfuird, V.
Darcy (de Knayth), B.	Reay, L.
Davidson, V. [Teller.]	St. John of Bletso, L.
Ferrers, E.	Sanderson of Bowden, L.
Fraser of Carmyllie, L.	Strathmore and Kinghorne, E.
Hacking, L.	Swinfen, L.
Henley, L.	Thomas of Gwydir, L.
Hesketh, L.	Trefgarne, L.
Hooper, B.	Ullswater, V.
Johnston of Rockport, L.
NOT-CONTENTS
Birk, B.	Hylton, L.
Carmichael of Kelvingrove, L.	Mcintosh of Haringey, L.
Carter, L.	Monk Bretton, L.
Cocks of Hartcliffe, L.	Ponsonby of Shulbrede, L.[Teller.]
Dean of Beswick, L.
Evans of Claughton, L	Ross of Newport, L.
Falkland, V.	Stanley of Alderley, L.
Graham of Edmonton, L. [Teller.]	Vinson, L.
	Winchilsea and Nottingham, E.
Grey, E.

Resolved in the affirmative, and amendment agreed to accordingly.

12.25 a.m.

[Amendment No. 177CA had been withdrawn from the Marshalled List.]

Lord Stanley of Alderley moved Amendment No. 177CB: After Clause 146, insert the following new clause: —

("Grants to housing associations.

(1) Part II of the Housing Act 1985 (provision of Housing Accommodation) shall be amended by the inclusion of the following section after section 32 — 32A.—No condition shall be attached by the Secretary of State to the payment of grant to a local housing authority, or to the giving of a consent to —

1. (i) the disposal of land or
2. (ii) the use of funds or
3. (iii) the payment of grant to a housing association

by a local housing authority, which would require such authority or housing association to grant occupiers a right to acquire the full equity or any specified share of the equity of any dwelling.

(2) Part II of the Housing Act 1988 (Housing Associations) shall be amended by the inclusion of the following section after section 50 — 50A. —No condition shall be attached by the Housing Corporation to the payment of grant to a housing association or to the giving of consent to the use of funds by a housing association, which would require such housing association to grant to occupiers a right to acquire the full equity of any specified share of the equity of any dwelling."").

The noble Lord said: The purpose of this amendment is to help local, less well paid persons to become part owners of a house in their home village. That kind of person would be the farm worker, district nurse, postman, retired tenant farmer or school teacher. All such persons are vital to any community's wellbeing and are essential to the social structure of any community. Indeed, if we continue to price these people out of their villages because of lack of suitable housing, either rented or part owned, the whole country will suffer socially.

The problem was aired at Second Reading by the noble Lords, Lord Jay and Lord Carter, by my noble friends Lord Middleton and Lady Blatch, and in another place by my right honourable friend Michael Jopling; also, I hasten to add, by my noble friend Lord Hesketh, on behalf of the Government. They all expressed the desire to do something about providing low cost housing for local people.

Therefore, I very much welcome the Government's efforts in this matter and in particular the Secretary of State's announcement in February this year which allowed a housing association the option to repurchase a house for local needs. We are therefore all on the same side. The only problem that remains is how we solve it! It is at this point that those moving this amendment part ways with the Government's scheme. Both the Government's scheme and that detailed in this amendment involve the housing association, aided by the local authority and local land owners, making it possible for suitable local persons to become part owners, with the housing association, of a house.

Obviously part ownership requires less money than does a full mortgage and so opens the door to the people I have mentioned, such as the district nurse, to become part owners in their own particular locality. The main snags to the present government scheme are that up to now the Secretary of State has insisted that first the part owner must be allowed, by purchasing further shares in his house, to become the full owner. That is called staircasing. Secondly, the Government have restricted their scheme to very few rural areas, so avoiding the main problem occurring, particularly in the south where what I may perhaps call the yuppie has moved into the villages, forcing up the price of property beyond the means of the local postman and such people.

Both the Government's scheme and ours as set out in this amendment rely on helpful land owners offering land for a price in excess of agricultural value but very much less than development value. This of course reduces the price of the house by a substantial amount. The landlord will be encouraged to part with the land because it would be land for which he would not normally obtain planning consent. Also, most land owners still have an interest in the social wellbeing of the village and area in which they live.

However, to obtain planning consent the vendor, the housing association and the local authority have to sign a legally binding agreement to ensure that the house in perpetuity will be used by a local person. Quite frankly, I do not see how a responsible local authority could ever sign such a document, because in practice it could force the local authority to find the funds to repurchase the house. What happens, I ask, if the local authority and housing association do not have the cash available at the time of repurchase? If the local authority does not exercise its option, the house will be lost to the local person, so breaking the agreement. If, on the other hand, the local authority cannot repurchase, and will not allow the owner to sell outside, no building society will grant a mortgage in the first place under such vague terms.

The matter still confuses me, particularly since reading yesterday's explanation of the Government's scheme, for I still cannot understand how any party can sign a Section 52 agreement, or sign an agreement that the house will be retained for low cost housing —as detailed in paragraph 5 of that paper which my noble friend issued —when paragraph 9 states that if the housing association does not wish to repurchase the house it may be sold on the open market.

I ask my noble friend to answer that point and to confirm that paragraph 10 of that paper is an absolute guarantee that funds will always be available for the housing association to repurchase. If my noble friend says, yes, perhaps he will explain how, in what form, and at what interest, if any, the Government will continue to make the money available.

I believe that the Government's scheme needs our amendment which will place no restriction on local authorities and housing associations as to where they have such schemes. The Secretary of State will not insist on the part owner being able to staircase up to full ownership. First, that will result in the local authority, housing association and vendor being able to sign a legally binding agreement insisting that the house be returned to the local need. Secondly, more land will be offered by land owners as they will be satisfied that the land that they give —if I may use that word —will always be used for local needs and not exploited. Thirdly, the local authority and housing association will be able to fund more schemes and more ambitious ones. Obviously if the scheme allows a 50 per cent. purchase they will be able to afford roughly twice as many houses than under the Government scheme which allows 100 per cent. staircasing.

I have condensed my remarks as I know that most, if not all, Members of the Committee will have received a brief on this amendment produced by the National Agricultural Centre Rural Trust and the National Farmers Union to which 1 am much indebted. Moreover, I know that noble Lords —in particular the noble Lord, Lord Carter—will tidy up my remarks when they speak. I therefore conclude with the fact that unless the right to staircase is not modified by the Government accepting this amendment, people such as nurses, teachers, agricultural workers, and those working in the less well paid but essential jobs will not be able to find houses they can afford in villages, in particular in the yuppie-invaded villages, to the great detriment of the whole of society.

I am supported in this view by no fewer than 17 organisations closely connected with this problem as detailed in the brief prepared by the rural trust and the NFU. I beg to move.

Lord Carter

I am extremely glad to support the amendment from this side of the Committee. I should declare an interest in the subject from the outset in that the farming company in which I am involved is actively considering the setting up of a low cost housing scheme. The noble Lord, Lord Stanley, has set the scene admirably and I shall therefore be brief.

The argument for the Government's proposals was set out in the Housing Corporation's consultation paper entitled Shared Ownership in Rural Areas which the Minister was kind enough to send to a number of us. I was struck by a phrase in the covering letter stating that it was a consultation paper which set out the background to the Government's decision. So we decide first; then we consult. The paper gives a major role to the Housing Corporation which will have responsibility for providing the funds for repurchase through the approved development scheme. It would help the Committee if Members knew that the Housing Corporation and its chairman fully support the proposals in the consultation paper. Perhaps the Minister will confirm that when he replies.

The basic argument is between those of us who support the amendment and wish to ensure that low cost housing never leaves the low cost housing sector, and the Government, on the other hand, who have a basic belief that every home owner should aspire to staircase his way into the normal housing market. Our proposal is quite clear. By placing a ceiling on the owner's equity in the low cost house we ensure that in no circumstances whatever will a low cost house ever be lost to the sector. A housing association which exists in perpetuity will always have a cost in the equity. We are entitled to ask the Government if they will give an unequivocal assurance that their proposals will have the same effect and that in no circumstances whatever can the repurchase scheme fail to operate and therefore allow the low cost house to pass out of the stock.

The consultation paper, as I said, is entitled Shared Ownership in Rural Areas. Do the Government intend that the repurchase scheme will be available only in the rural areas, as defined, and never be available in the urban areas? The questions that I feel the Minister has to answer on the Government's scheme relate almost entirely to this obligation to repurchase. Does the housing association have an absolute and pre-emptive right to repurchase which it must exercise if the owner requires it to do so? If it has, why, as the consultation paper said, does the housing association need four weeks to confirm its intention to repurchase? Does it need the four weeks perhaps to make sure that the necessary funds will be available? How can we be assured that the Housing Corporation and the housing associations will always have the necessary funds? Has the Treasury really agreed to an open-ended, incalculable and a demand-led fund?

If the repurchase scheme is successful, it is bound to escalate and is essentially uncontrollable. It is liable to completely unpredictable fluctuations; hardly the kind of scheme, one would think, that appeals to the Chancellor of the Exchequer. I find it hard to believe that the advanced development programme of the Housing Corporation is not to be cash limited in some way. What happens if the fund is running out towards the end of the financial year and there is the need to provide the funds to repurchase? Who decides what is the full market value? Suppose that an independent valuer comes up with a higher figure than the housing association is prepared to pay? Can the owner require the housing association to buy at the higher figure?

Perhaps I may return to the fund which is available for repurchase. When the Minister replies perhaps he will be minded to give some assurances that the fund will always be available. I refer to a letter from Mr. Chope on behalf of the department. I have been in touch with a firm of solicitors in Southampton involved in low-cost housing schemes which has been in correspondence with the department. I should like the Minister to comment on the final paragraph of Mr. Chope's letter. I should sound a note of caution at this point. Housing association grant cannot, of course, be available in unlimited amounts for rural shares ownership. Nevertheless, associations wishing to develop the new shared ownership schemes will be able to compete for resources from the Housing Corporation in the normal way and the responsibility for deciding which associations, and schemes to invest in rests with the Corporation. Although the Corporation's investment programme is heavily over-subscribed, I can tell you that, at our request, the Corporation is giving a higher priority to the needs of local communities in rural areas for low-cost housing". There is no way in which that statement can be construed as a categoric assurance that the necessary funds from the Housing Corporation will always be available for repurchase. I should like to ask the Minister how that statement from Mr. Chope relates to the statements in the consultation paper which say that the Housing Corporation will provide any additional grant necessary and which go on to say that the Housing Corporation will give a commitment that the housing associations will have the funds to buy back when they need them.

I have made it clear that our amendment maintains and encourages an increase in the stock of low-cost housing. The Government's proposals do not. We fail to see how funds for repurchase can always be guaranteed. I believe the letter which I have just read confirms that.

I said at the outset that the farming company with which I am involved is currently considering the low-cost scheme. Unless we can be assured that the houses built on the land which we are prepared to give away for the scheme will remain in the low-cost sector for ever, we shall almost certainly not go ahead with the scheme. I know that there are many other landowners who share that view.

Lord Hylton

I should like to pay tribute to the sheer persistence of the National Agricultural Centre Rural Trust in working away on this problem over many years until we have now reached the point where there are successful schemes already built and in existence. I should very much like to congratulate my noble friend Lord Stanley on the great clarity with which he moved this amendment.

The whole purpose of this amendment, as I see it, is to make sure that this latest form of social housing continues to be available for the purpose for which it was originally built and intended. The noble Lord, Lord Carter, explained very clearly the complications which are likely to arise if the agency providing the houses has eventually to repurchase them at full market price. I fear that it is very unlikely that the Housing Corporation or any other lending authority will be prepared to put up the funds to cover that price, which will have risen by inflation, by increase of values and by the acquisition of the whole equity by the occupier.

I should like to mention another practical problem regarding the ultimate replacement of these socially priced houses; namely, that once they are gone and lost on the open market village sewers may well limit the possibility of replacing them where they are still needed. Therefore, I very strongly support this amendment.

Lord Vinson

I should like to support this amendment because I believe it is the only practical solution to provide an adequate provision of low-cost housing in rural areas. I should like to declare an interest as the chairman of the Government's Rural Development Commission. I have been in that position now for nine years. Our task is to encourage jobs and to promote the welfare of communities throughout rural England.

It is encouraging that to date, thanks to the Government's policies, the concern about jobs, while still with us in rural areas, is nowhere near as bad as it was. However, that concern has been replaced by one of equal magnitude. There is no other single issue in rural areas of greater concern than housing and low-cost housing affairs. The fact is that over the past six or seven years, for very good reasons, the Government have turned off the council house building tap and to date have not replaced it with mechanisms that have encouraged an alternative provision of low-cost homes.

Throughout this Chamber and, indeed, in the other place we are all agreed over the needs. The Government have willed the ends and they now need to will the means. Many of us are grateful that the Government have recently modified their policy line but the acid test is, will the new arrangements deliver? I have to say that I have grave doubts that they will deliver. Will, in practice, the bottomless funds be available from the Treasury? While the promise is there one guesses that the execution will be much less positive.

That doubt will undoubtedly, as other noble Lords have pointed out, linger in the minds of others, either private individuals or local authorities, who would normally donate land at low cost to enable the provision of low cost housing. If that doubt is there, that land will not be forthcoming.

I also have grave doubts about the definition of rural areas if this concession is to be solely allowed there. If the definition embraced only the rural development areas in England, for example, it would in no way begin to even approach or tickle the problem. The major housing problem regarding low cost starter homes lies in the marginally less deep rural areas —if I may put it that way —where the pressures of commuters and others have forced out the children of the indigenous population. It is to those as much as to anything that the problem is addressed.

Therefore, I have grave worries about whether the new proposals will deliver. Those worries are, of course, shared by all the agencies ir the field. I should have thought that the Government would have taken on board that extremely powerful expression of doubt that has reached them and indirectly support the measures to prevent full staircasing —not some staircasing —that this clause sets out to achieve.

I have to say as a dedicated Tory who believes in the wider principles of the right to buy that that is an important right, but there are occasions when the right to be housed over-rides the right to buy. This instance is one of them. Therefore, with other noble Lords, I urge the Government to think again and come up with a workable solution that will meet the real needs and concerns of those who live in rural areas and elsewhere.

The Earl of Kinnoull

I support the principle of the amendment but I also feel, as does my noble friend, that there is a minefield of problems. There are two problems which I put to my noble friend who so eloquently moved the amendment.

First, he referred to acquiring the full equity. I understand that to be 100 per cent., but I assume a co-owner could acquire 99 per cent. which would defeat the purpose of the amendment. I have been following for some time the benefits of co-ownership in which I believe strongly. I believe also in the move by building societies towards equity mortgages, which is the same principle but leaves the building societies free to charge less for mortgages and gives the right for them to share in the equity participation.

The second question I put to my noble friend is this: how do you safeguard against a situation where a district nurse genuinely acquires a property on a co-ownership basis and then changes her job? One immediately loses the vital benefits of a district nurse to the rural community. That applies to all those people my noble friend described who are vital in a community. I am not clear on how he safeguards that situation at the same time.

Lord Ross of Newport

I believe that the contribution of the noble Lord, Lord Vinson, should be paid great attention. As I well know, in my part of the world he has done a great deal in the more rural areas in his role as chairman of the Development Commission. Obviously, he is equally worried about the situation relating to rural housing. I very much support the amendment that has been put before us tonight.

On this Bench we have had a letter from a councillor in Westmorland in the Lake District where houses that come onto the market, where perhaps 100 per cent. of the equity has been obtained, are very quickly snapped up. Virtually all the members of the housing committee of the Westmorland & Lonsdale District Council believe that the amendment before us tonight would make an important contribution to keeping a stock of affordable housing for local people in that area.

If the Bill is not amended, as has already been said, starter homes acquired on a shared ownership basis could soon be acquired 100 per cent. by the occupiers and then re-sold on the open market at greatly increased prices. A provision that such property should first be offered back to the local council or housing association would be of little help since it is unlikely that they would be in a position to buy back at full market prices.

I think it is to the credit of a former Cabinet Minister, Mr. Michael Jopling, in the other place, that he moved a somewhat similar amendment, but unfortunately he lost it. At least there was a ex-Cabinet Minister who was prepared to put his name forward. He is right and I think that the Government should carefully consider the amendment that has been put to the Committee and which is supported on all sides.

Lord Hesketh

I have listened with great interest to the points raised on all sides of the Chamber on this important issue which, as Members will be aware, started as a more limited amendment in another place. I make no apology for taking some time to lay out the Government's understanding of the position because I think that there has been a certain amount of misunderstanding of what we propose.

I wish to thank the noble Lord, Lord Stanley, for raising the important subject of low-cost housing, especially in rural areas, through his amendment. I welcome the interest which he and his colleagues are showing in the subject of shared ownership. The Government entirely share the central concern which originally prompted the amendment, which is to provide low-cost housing for those who need it in rural areas. And we agree completely that there needs to be a way to retain shared ownership housing for local needs in many rural areas. I will explain what we are doing to address that concern, which my noble friend so eloquently expressed. We believe that we have an alternative approach which makes the amendment unnecessary.

The special housing needs of rural areas have been preoccupying the Government for the last year. I hope that the Committee will allow me to reiterate some of the steps which we have taken. We have provided the Housing Corporation with the resources to enable it to approve a rapidly expanding programme of rented housing in rural areas by housing associations over the next two or three years. The corporation has also announced an increased programme for low-cost home ownership by housing associations. That programme includes shared ownership.

My honourable friend the Minister for Housing announced in February, in his role as planning Minister, that planning authorities would be empowered to give permission for low-cost housing developments to meet local needs on sites in rural areas where permission for ordinary housebuilding would otherwise be refused.

My right honourable friend the Chancellor of the Exchequer announced in the Budget that gifts of land to housing associations by landowners would no longer be assessed for capital gains tax or inheritance tax as if they had been sold at open market value. We are providing a much-increased grant to the National Agricultural Centre Rural Trust for its work in fostering rural housing associations.

But perhaps most relevant to this debate is the announcement which my noble friend Lord Caithness made on 7th February this year. He said that we had decided to allow housing associations to prevent share ownership housing passing onto the general market in those rural areas where it might be particularly hard to replace it. This would be done by requiring the shared owner to offer the house back to the association when he wished to move on. The association could buy it back from him and reallocate it to another person on shared ownership terms.

The advantage of this approach over the non-staircasing model which has been widely advocated, is that we can retain the house to fulfil local housing needs without having to deny individual occupiers the opportunity to progress to full ownership of their homes. So it preserves the aim of the non-staircasing scheme while also allowing people to become full home owners. If I can persuade the Committee that our scheme will work, I suggest that there is no need for the amendment which we are debating.

One point which has, understandably, concerned some of those with a concern for rural housing is whether we can deliver a scheme. I am pleased to say that the Housing Corporation has been working very hard on it and has now issued a description of the scheme which would be available to associations thinking of working up a project of this kind. The main features are as follows: the housing association will include a clause in the shared ownership lease, giving it right of first refusal.

The Housing Corporation will ensure that an association has sufficient funds for the repurchase. It will recycle grant recovered when shared owners buy extra shares and provide additional grant if required. The repurchase arrangements will apply to schemes in areas eligible for investment under the corporation's special rural programme; or where the site has received planning permission specifically for the development of low cost housing for local needs.

In this respect I should like to remove one misunderstanding that was raised earlier in the debate. It concerned the relationship between Section 52 and the four weeks mentioned in paragraph 8. There may well be a time in the long distant future when there is a surplus of low cost housing in a rural area. The four weeks refers to no more than that and it is simply the opportunity and possibility down the road. The repurchase agreement will apply to a scheme where a private landowner has contributed the site at below market value on condition that it be retained for low cost home ownership. Anyone who wishes to comment on the workings of the scheme should write to the Housing Corporation before 31st October.

I cannot stress strongly enough that there our approach does not allow a windfall to the first shared owner. The benefit of any subsidy by way of cheap land —perhaps provided by a generous local landowner—remains in full to benefit future local people who become shared owners. Each time the shared owner buys a share, he has to pay the full open market value, with no allowance for the fact that the land was cheap. The association retains the benefit of the cheap land and can pass it on in cheaper rent for the next shared owner.

The scheme depends on the ability of the association to afford to buy back the property when the shared owner is ready to sell. I can assure the Committee that we have catered for this in the scheme which was produced yesterday by the Housing Corporation. The corporation will reinstate the grant it originally gave on the property and top it up if necessary, so that once a scheme has received the corporation's approval to participate in this programme in the first place, the association can be confident that it will be in a position to buy back the property. The noble Lord, Lord Carter, referred to the letter of Mr. Chope. That point should be covered. It is the entry into the scheme which then allows the guarantee to become effective. The amendment itself goes wider than rural areas. But the argument for depriving shared owners of their right to staircase is weaker in other areas. Let us be clear that the effect would be to deprive people of a chance to own their own homes. Where there is a reasonable turnover of houses, as is the case in most areas, there is no need for the housing association to buy back the particular house because other suitable properties will be available in the same area. It is only where the turnover of houses is very low that it is important to ensure that the association has a chance to buy back its original shared ownership property. Elsewhere, the association can buy another nearby property using the proceeds from the first property, which has been sold to the original shared owner for the full market value.

We have prepared this scheme because we believe that it is important to retain low cost housing in rural areas for those who need it. It provides a way forward and I hope that the Committee will agree that the amendment is not necessary. I have always been one to listen on this. The consultation document has been in my hands, let alone the hands to which I dispatched it tout de suite and forthwith, for a very short period of time. We are willing to listen. I hope that the arguments I have deployed tonight will have cleared up some of the misunderstandings that exist on the scheme.

I should very much like to read through the points which have been made, especially those made by the noble Lord, Lord Carter. He made a considerable number of important technical points which I should also like to consider. I hope therefore that noble Lords will not press the amendment tonight and that they will feel able to consider where they stand in the light of what I have said.

1 a.m.

Lord Dean of Beswick

I was delighted to hear the Minister's optimism, despite present knowledge, when he expressed the view that in the long-term foreseeable future we may even come into a surplus position in rural areas as regards low-cost housing for rent. I think that that was the term he used. I have tabled a Question for him to answer on Monday on starts and completions for last year and for the nine months of this year. However, in view of what has been said I give him notice now of a further question. When he gives me the figures on Monday, will he tell me —if he possibly can —how many low-cost homes were started in the 12 months of last year and in the nine months of this year? The authorities in those areas are saying that their supply of properties to let has completely dried up. Therefore, if he can tell us on Monday, with some optimism, that such developments are already under way then his remarks that we may see a surplus in the long-term foreseeable future may have some credibility. But if he cannot do so it will not.

Lord Hesketh

Perhaps I may make one small point regarding the long-term future. A s I am sure the noble Lord, Lord Dean of Beswick, is aware, in the Federal Republic of Germany which has very small families and a declining population this phenomenon has already been noticed.

Lord Dean of Beswick

That country already has the houses. That is why it now has a surplus. We do not have any houses from which a surplus could arise. I do not know whether the Minister is expecting a sudden, rapid reduction in the number of ageing people by way of their demise or whether he is expecting a nuclear holocaust; but, I cannot see this happening any other way.

Lord Stanley of Alderley

I thank noble Lords for their contributions to the debate. I thank especially my noble friend Lord Hesketh. I am delighted that he said he was prepared to listen and would read what has been said. I am also pleased that we shall be able to discuss the matter between now and the Report stage in order to iron out our difficulties. Perhaps I may run through a few. However, I shall deal first with the aspects upon which we agree. We agree in principle as to what is needed. We have come a lot closer to solving the problem and bringing it home to the Government—or perhaps the Government have brought it home for themselves—than ever before. Therefore I am rather more hopeful.

We cannot agree at present as to where the area should be. We believe that it should be very much wider than envisaged by the Government's scheme which we believe to be far too narrow. I still cannot understand how the housing association can guarantee funds at the end of the day to buy back these houses. I am afraid that my noble friend did not make that clear. I shall have to follow up the matter with him between now and the Report stage.

There are two vital points in our scheme which I believe are watertight whereas the Government's proposals are not. If there is no guarantee that the house will return to the low-cost housing pool, no landlord will offer land for the purpose. Therefore, the scheme will not work and no responsible local authority will be able to sign a Section 52 agreement. Indeed, no lawyer would let them do so. Neither will a housing association.

Under our scheme —I do not think that this point has been made although I should have thought that it would be of interest to the Chancellor of the Exchequer —once the initial subsidy, which is similar to that given under the government scheme, is granted, no more money at any time will be required for repurchase. However, under the government scheme—indeed, my noble friend admitted this—the housing association, the Treasury or someone will have to find more money. Under our scheme we are home and dry once the first payment arrives. I should have thought that that would be a telling point with the Chancellor.

I am afraid that I found it difficult to hear my noble friend Lord Kinnoull. He did however refer to the question of what happens when a windfall arrives and the recipient changes his job. That is an important point in favour of our scheme. Under the Government's scheme, if he or she becomes rich, what does he or she do —fully staircase 100 per cent. or continue to commute to Birmingham or London, which would apply in the village about which I am thinking, and continue to live in that nice house? In our scheme, if we prevent the purchase of more than 50 per cent. that rich person will say that he wishes to buy a house on his own and will move out. The house will then return to the housing pool. Our scheme has a distinct advantage.

To follow the point made by my noble friend Lord Vinson, of course we wish individual shared owners well. We hope that everybody can become full owners in due course. Surely the more important objective must be to meet the local housing needs of the community rather than those of a few individuals who are rich enough to buy their own homes.

I shall have to come back on this on Report, and I know that my noble friend will want me to do so. I thank him for his remarks. I shall be in touch with him. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 177CC: After Clause 146, insert the following new clause:

("Effect of discount on sale price.

. In section 131 of the Housing Act 1985 (limits on amount of discount), there shall be added after subsection (3) the following subsection— (3A) Any determination under subsection (3) above shall specify that, where the landlord is a registered housing association and the dwelling has been provided either fully or in part by private finance, the discount shall not reduce the selling price by more than the total cost of the provision of the dwelling.".").

The noble Lord said: The amendment deals with an injustice which may seem to be a technical point but which has been causing considerable concern. The amendment relates to Section 131 of the Housing Act 1985. A number of conditions have arisen since that Act was enacted which lead to a difficulty that I wish to explain.

First, non-charitable associations which take over secure tenants, or assured tenants with a preserved right to buy a property which is provided partly by private finance, have difficulty, if that right to buy is exercised, with what is called the cost floor. That means that when there is a mixture of public and private funding, the calculation of the cost floor does not take account of the private sector funding in the calculation of the lower level which is available to meet the discount. That in turn means that such a non-charitable housing association, which uses private funding and finds its property taken over by the right to buy, can land up with an unfunded loss; in other words, it has a loss on property over which it no longer has control or has available for letting.

There is no capital receipt or rent to cover the costs. It may seem a technical point, but it causes concern to non-charitable housing associations. I hope that the Government can put their concerns at rest either by accepting the amendment or by explaining why it is unnecessary. I beg to move.

Lord Hesketh

It may assist the Committee if I begin by setting out the circumstances in which the right to buy will arise in relation to a housing association dwelling which has been provided by private finance. Secure tenants of certain registered housing associations have the right to buy. However, since January this year most new tenancies granted by housing associations have been assured tenancies which do not confer the right to buy, although secure tenants transferred by their landlord to another of its dwellings will remain secure.

To turn to the detail of the provision which the noble Lord is seeking to amend, it is designed to ensure that landlords do not have to sell property under the right to buy at a discounted price which would be less than the costs recently incurred in acquiring, providing or improving the dwelling. The sum of these costs in relation to any dwelling is known as the cost floor, and in consequence the rule is known as the cost floor rule. Some Members of the Committee may recall that we discussed it during the passage of the Housing Act 1988, which provided that only relevant costs incurred from the beginning of the eighth full accounting year before the tenant's application should count towards the cost floor, rather than relevant costs incurred after 31st March 1974, as had previously been the case. Section 131 of the Housing Act 1985 provides for the Secretary of State to determine which costs are to be regarded as relevant for the cost floor. This was last done in 1984.

The current cost floor determination specifies a wide range of costs which are to be taken into account. Costs incurred by the landlord on relevant works are included. In the case of the construction of the dwelling-house, not only the costs of construction but also the costs of site development works and the acquisition of land are to be taken into account. So are major works of improvement. Acquisition of a dwelling-house is also relevant. These rules apply to right to buy sales by housing associations as well as local authorities and other right to buy landlords. If I may summarise them, borrowing the words of the amendment, they are designed to ensure that the tenant's discount does not reduce the selling price below the total cost of the provision of the dwelling.

I am not clear what additional costs the noble Lord would like to have regarded as relevant. The current determination is shortly to be revised, for technical reasons, and we have consulted all right to buy landlords on that revision. I shall of course study carefully what he has said this evening. However, I suggest that it is in any case unnecessary to specify in primary legislation the way in which the power to make a determination for the purposes of the cost floor is to be used. If it is desirable to exclude certain costs from the cost floor, then we can do so in a revised determination.

I hope that in the light of what I have said the noble Lord, Lord McIntosh, may feel able to withdraw this amendment.

Lord McIntosh of Haringey

I shall read carefully what the Minister has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 177CCA and 177CCB not moved.]

Lord Ross of Newport moved Amendment No. 177CCC: After Clause 146, insert the following new clause:

("Security of Tenure. —.(1) In section 82 of the Housing Act 1985 (security of tenure) at the beginning of subsection (2) there shall be inserted the words 'Subject to subsection (2A) below'. (2) After subsection (2) of that section there shall be inserted the following subsection— '(2A) Where the landlord obtains an order for the possession of the dwelling house and the court has under section 85(3) imposed conditions on the stay or suspension of execution of the order or on the postponement of the date of possession, the tenancy ends on the date of execution of the order' ").

The noble Lord said: I beg to move Amendment No. 177CCC, and I should like to speak also to Amendment No. 179ZHZ. This amendment is designed to remedy a defect in the current law on the rights of public sector or secure tenants revealed in the case of Thompson v. Elmbridge Borough Council (1987) 19 Housing Law Reports 526.

It is the common practice of the county courts, where secure tenants are taken to court by their landlords for rent arrears, to make a suspended possession order. Although an order for possession of the property is made in favour of the landlord, the tenant cannot be evicted if, and so long as, he or she pays the current rent and, in addition, pays off the rent arrears in instalments, the amount of which is fixed normally by the court.

In the case quoted, Mr. Thompson lived with Mrs. Thompson, who was the sole secure tenant. In January 1985, the council obtained a suspended possession order in standard terms requiring rent arrears to be paid off in instalments of £10 per week in addition to current rent. In August 1985, the wife left, leaving Mr. Thompson in occupation. She failed to keep up the payments of current rent and of rent arrears required by the court order. The council applied to the court office for a warrant of possession, directing the bailiffs to turn out those in occupation, on the basis that the possession order had not been complied with. The warrant was issued.

Mr. Thompson then applied for the warrant to be suspended and for the secure tenancy to be transferred into his name under the Matrimonial Homes Act 1983. The Court of Appeal rejected both applications, stating that Section 82(2) of the Housing Act 1985 made clear that the secure tenancy ended when the wife, Mrs. Thompson, had first broken the terms of the suspended possession order. There was nothing to transfer to Mr. Thompson; nor did the court have any power to prevent Mr. Thompson being evicted by the court bailiffs. The amendment would reverse the position by making it clear that where a suspended possession order is made, the secure tenancy does not end until the tenant is actually evicted by the court bailiffs.

Amendment No. 179ZHZ seeks to ensure that where a landlord of an assured tenant obtains a suspended possession order —for example, a possession order that will not take effect if, and so long as, the tenant pays current rent and £X off the arrears —the tenant will not lose his or her rights as an assured tenant simply because the order is broken by, for example, the tenant failing to pay an instalment off the rent arrears on time on one occasion. The justification for this amendment is that it is designed to remedy a defect in the current law on the rights of assured tenants again revealed in the case of Thompson v. Elmbridge Borough Council in 1987. The same law reports apply. I shall not bore the Committee with further details of these cases. I think that the Minister will be well apprised of them and I shall listen to his reply. I beg to move.

1.15 a.m.

Lord Hesketh

We believe that Amendment No. 179J is not necessary. The 1988 Act provision follows Section 100 of the Rent Act 1977 which has worked successfully for many years. If a suspended possession order is made subject to conditions and the tenant knows that he cannot keep those conditions he can apply for the order to be varied. If the tenant keeps to the conditions and an appointment is nevertheless made to the bailiff to execute a warrant, the tenant can apply to have the warrant set aside on the grounds that he has met the conditions.

The tenant therefore has opportunities to defer the execution of a warrant in two different ways. We do not need a provision that requires the landlord to get another court order and formally advise him that he is doing so. This would be burdensome on both the courts and landlords. There is of course nothing to prevent the landlord from telling the tenant informally that he is going to go for a warrant.

I am afraid that we cannot accept Amendments Nos. 179L or 177CCC. When possession is suspended subject to certain conditions, the tenancy ends if and when those conditions are breached and the order takes effect. The landlord then applies for a warrant so that he may gain possession. The effect of this amendment would be to give the tenant an extra period with the status of a tenant. It gives him an additional period of security.

Perpetuating the tenant's status could in a few cases complicate the position for the landlord. The landlord would still need to apply for a warrant and then the tenant cannot be evicted until that warrant is executed. The fact that his tenancy has ended does not mean that he is instantly out on the streets. Where the stay of suspension or postponment is not made subject to conditions, the position is as the amendment states, that the tenancy ends on the date that the order takes effect.

The noble Lord, Lord Ross, brought the case of Thompson v. Elmbridge to the attention of the Committee. I recognise that a non-tenant partner in a suspended possession case could be disadvantaged if the tenant breaches the conditions of the suspension. However, the landlord who has applied for possession presumably wants possession, and he should not be penalised by allowing the tenancy to continue until the warrant is executed. If the landlord is content for an innocent non-tenant partner to stay on, it is always open to him to allow that to happen and that non-tenant partner is always best advised to secure his or her rights by getting a joint tenancy. I hope this answers Lord Ross's question.

Lord Ross of Newport

I did not move Amendment 179L. That is Lord McIntosh's amendment.

Lord McIntosh of Haringey

I am not going to move Amendment 179L.

Lord Ross of Newport

I thank the Minister for his reply, which no doubt will be studied by those most interested. It does not always work out that people get joint tenancies. I agree that that is one of the solutions, and I hope that the advice will be taken. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ross of Newport moved Amendment No. 177CCD: After Clause 146, insert the following new clause:—

("Persons qualified to succeed tenant.

In section 87 of the Housing Act 1985 (persons qualified to succeed tenant) in subsection (b) after the words 'resided with the tenant' there shall be inserted '(whether in the dwelling house or elsewhere)'").

The noble Lord said: I have yet another case to bring which relates to Section 87 of the Housing Act 1985. This amendment is designed to remedy a gap in the statutory provisions for succession to public sector (secure) tenancies revealed in the case of South Northamptonshire DC v Power 1987. To qualify to succeed to a secure tenancy a family member must have lived with the deceased tenant for a minimum period of 12 months ending on death. The legislation is not clear as to where the family member must have been living during this period.

In the Power case, Mr. Power had begun to live with the deceased in 1982. In the 1985 they moved to other accommodation with the deceased being the sole secure tenant. Nine months later the tenant died. The Court of Appeal decided that although Mr. Power had lived with the deceased for many years he had not lived the minimum 12 months at that address and so could not succeed. The amendment reverses the Power case so as to make it irrelevant where the family member has been living during the minimum 12 months period. He or she will still have to have lived with the deceased secure tenant for the minimum period of 12 months and to have been in occupation of the dwelling house as his or her only or main home at the time of the tenant's death.

I could also perhaps speak to Amendments 177CCE and 177CCF. These amendments are designed to remedy a gap in the statutory provisions for succession to public sector tenancies. To qualify to succeed to a secure tenancy a spouse needs only to be living in the property as his or her only or main home at the time the secure tenant dies. The word "spouse" does not include a person cohabiting with the tenant. By contrast, any other member of the tenant's family, a term which also includes cohabitees, must also have lived with the deceased for a minimum period of 12 months, ending on death.

The amendments seek to remove the distinction between spouses and cohabitees thus allowing a cohabitee to succeed to the secure tenancy without having to clock up the minimum period of 12 months. They also mean that a cohabitee of an unmarried tenant would be given preference over other members of the tenant's family in deciding who can succeed. Where there are two or more people claiming to be the tenant's spouse, the landlord selects who can succeed in the event of a dispute. I am afraid that these cases are occurring more and more often and no doubt there will be more cases before the courts, so perhaps it would be helpful if the Government would consider taking the amendments on board. I beg to move.

Lord Hesketh

I am shocked and surprised to find an inequity perceived by the noble Lord, Lord Ross of Newport, in South Northants district which is my own home area. However, having recovered from that, I must say that Amendment No. 177CCD is designed to safeguard the position of a member of the tenant's family other than the spouse who has lived with the tenant for a minimum of 12 months but who perhaps has only lived in the dwelling house in question for a few days before the tenant's death.

As drafted, the amendment would enable a partner who had never lived in the property to succeed to the tenancy of a tenant who had been absent from home for a year, or who was retaining it as his principal private home. I am afraid this would open the door to abuse and undermine the principle that tenancies should be allocated as far as possible on the basis of need. I submit that these minimum conditions are too slight to justify his succeeding to the tenancy.

I now turn to Amendment No. 177CCE. It is not common in statute to use both genders as the Interpretation Act 1978 provides that references to "he" covers both genders. There is, therefore, no need for such a redefinition. Amendment No. 177CCF is designed to cater for the situation where the deceased has two or more spouses and throws the onus on the landlord to decide which spouse shall succeed to the tenancy. I suggest that such a dispute in such a situation warrants adjudication by a court rather than a landlord because of the delicacy of the matter and the complexity of marital law. Further, we have no evidence that this situation has presented a problem for secure tenancies in the past. I hope that on that basis the noble Lord, Lord Ross, may feel able to withdraw his amendment.

Lord Ross of Newport

I am sure the Minister's response will be studied with interest by the lawyers who draw up these amendments. No doubt they will want to return to the matter another day. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 177CCE and 177CCF not moved.]

Clause 147 agreed to.

Schedule 8 [Amendments of Parts VI, IX, XI, XVII and XVIII of the Housing Act 1985]:

Lord Hesketh moved Amendment No. 177CD: Page 179, line 6, at end insert ("after the words "dwelling-house", in the first two places where they occur, there shall be inserted "or house in multiple occupation" and").

The noble Lord said: In moving this amendment I wish to speak also to Amendments Nos. 177F to 177H. These amendments make further minor amendments consequential to the amendments to Parts VI and IX of the Housing Act 1985 made in Schedule 8 to this Bill and Schedule 15 to the Housing Act 1988. Amendment No. 177D addresses a technical deficiency in the Act. It is designed to make it clear that the date specified in the repair notice served under Section 190 as the date by which the works must be started cannot be earlier than the twenty-eighth day after the notice has been served. Amendments Nos. 177F, 177G and 177H are technical amendments. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 177CE: Page 179, line 10, at end insert— ("(aa) for the words "a dwelling-house which is a flat" there shall be substituted "either a dwelling-house which is a flat or a flat in multiple occupation"").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 177CF: Page 179, line 16, at end insert— ("(2A) After subsection (1A) there shall be inserted the following subsection — (1B) In the case of a house in multiple occupation, a repair notice may be served on the person managing the house instead of on the person having control; and where a notice is so served, then, subject to section 191, the person managing the house shall be regarded as the person having control of it for the purposes of the provisions of this Part following that section." ").

On Question, amendment agreed to.

Lord Hesketh moved amendment No. 177D: Page 179, line 19, at end insert ("and for the words "seventh day after the notice becomes operative" there shall be substituted "twenty-eighth day after the notice is served"").

Lord Dean of Beswick

That amendment is listed in a separate group with Amendments Nos. 177F to 177H.

Lord Hesketh

In moving Amendment No. 177D I spoke to Amendments Nos. 177F to 177H.

Lord Dean of Beswick

As the Minister said, they are merely technical amendments. However, can he explain why it is proposed that if local authorities serve repair notices the landlord has to act after 28 days instead of after seven as at present? Why has that changed?

Lord Hesketh

I believe that it was thought that seven days was unreasonable.

Lord Dean of Beswick

The Government may think that it is unreasonable but they have not given any evidence to show why it is unreasonable. It is only a technical amendment, but a change from seven days to 28 is a substantial increase. What evidence is there to sustain such a proposal?

Lord Hesketh

If the amendment is read properly it is clear that, the seventh day after the notice becomes operative shall become the, twenty-eighth day after the notice is served", the difference being between the notice becoming operative and the day on which the notice was originally served.

Lord Dean of Beswick

It is as clear as snow, but having heard the explanation I have no desire to oppose the amendments.

On Question, amendment agreed to.

Lord Hesketh moved Amendments Nos. 177DA to 177DE:

Page 179, line 19, at end insert ("and in paragraph (b) after the words "dwelling-house" there shall be inserted "or, as the case may be, house in multiple occupation".

(3A) In subsection (3) of that section—

1. (a) after the words "serving the notice" there shall be inserted "(a)";
2. (b) after the words "building concerned" there shall be inserted "or
• (b) on the person having control of or, as the case may be, on the person managing the house in multiple occupation which is concerned"; and
3. (c) in the words following paragraph (b), as set out above, for the words "or part of the building" there shall be substituted "part of the building or house".").

Page 179, line 23, after ("unfit") insert ("(a)").

Page 179, line 24, at end insert— ("(b) in subsection (1), after the words "dwelling-house", in each place where they occur, there shall be inserted "or house in multiple occupation" and at the end of paragraph (b) of that subsection there shall be added "or, in the case of a house in multiple occupation, the persons occupying it (whether as tenants or licensees)"; and (c) in subsection (1A) after the words "a flat" there shall be inserted "including a flat in multiple occupation" and at the end of paragraph (b) of that subsection there shall be added "or, in the case of a flat in multiple occupation, the persons occupying it (whether as tenants or licensees)" ").

Page 179, line 25, leave out second ("subsection") and insert ("subsections").

Page 179, line 32, at end insert— ("(1C) In the case of a house in multiple occupation, a notice under subsection (1) or subsection (1A) may be served on the person managing the house instead of on the person having control of it; and where a notice is so served, then, subject to section 191, the person managing the house shall be regarded as the person having control of it for the purposes of the provisions of this Part following that section. (3) In subsection (2)(a) of that section for the words "seventh day after the notice becomes operative" there shall be substituted "twenty-eighth day after the notice is served". (4) In subsection (3) of that section—

1. (a) after the words "serving the notice" there shall be inserted "(a)";
2. (b) after the words "building concerned" there shall be inserted "or
• (b) on the person having control of or, as the case may be, on the person managing the house in multiple occupation which is concerned"; and
3. (c) in the words following paragraph (b), as set out above, for the words "or part of the building" there shall be substituted "part of the building or house".").

On Question, amendments agreed to.

[Amendment No. 177E had been withdrawn from the Marshalled List.]

Lord Hesketh moved Amendments Nos. 177EA to 177ED:

180, line 42, leave out ("after subsection (1A)") and insert ("in subsection (1A) after the words "dwelling-house" there shall be inserted "house in multiple occupation" and after that subsection").

Page 180, line 51, after ("section") insert ("the words "(repair notice in respect of unfit dwelling-house)" shall be omitted and").

Page 181, line 5, at end insert— ("(3) In subsection (3B) of that section after the words "dwelling-house", in both places where they occur, there shall be inserted "or house in multiple occupation".").

Page 181, line 17, at end insert— ("6A, In section 193 (power of local authority to execute works), in subsection (4) after the words "dwelling-house" there shall be inserted "house in multiple occupation".").

On Question, amendments agreed to.

PageLord Hesketh moved Amendments 177EE and 177EF:

Page 181, line 28, leave out ("For").

Page 181, line 29, leave out from ("structures)") to end of line 33 and insert ("shall cease to have effect").

On Question, amendments agreed to.

Lord Hesketh moved Amendments Nos. 177EG to 177HU:

Page 181, line 35, after ("(1)") insert ("in the definition beginning "dwelling-house" after the word "flat", in the first place where it occurs, there shall be inserted "other than in the expression "flat in multiple occupation"" and after that definition there shall be inserted—

""house in multiple occupation" and "flat in multiple occupation" have the same meaning as in Part Xl". (1A) In that subsection ").

Page 181, line 51, at end insert—

(""person managing" has the same meaning as in Part XI". (3) In that subsection in the definition beginning "person having control" in paragraph (a) after the words "dwelling-house" there shall be inserted "or house in multiple occupation" (4) In that subsection in the definition beginning "premises" after the words "dwelling-house" there shall be inserted "house in multiple occupation". (5) In subsection (2) of that section after the words "dwelling-house", in the first place where they occur, there shall be inserted "or house in multiple occupation".").

Page 182, line 9, at end insert—

(""house in multiple occupation (and "flat in multiple occupation") … section 345"").

Page 182, line 10, at end insert—

(""person managing … section 398" ").

Page 182, line 17, after ("house)") insert ("and").

Page 182, line 18, leave out from ("broken") to ("there") in line 19.

Page 182, line 21, after ("dwelling-house") insert ("or house in multiple occupation").

Page 182, line 24, after ("dwelling-house") insert ("or house in multiple occupation").

Page 182, line 42, at end insert ("(a)").

Page 182, line 43, after ("flat") insert ("or

(b) a house in multiple occupation which is not a flat in multiple occupation").

Page 182, line 47, at end add ("or house concerned").

Page 183, leave out lines 11 to 16 and insert—

("13A. Section 266 (power to make closing order as to part of building) shall cease to have effect.").

Page 183, line 19, leave out second ("subsection") and insert ("subsections").

Page 184, line 18, after ("dwelling-houses") insert ("or houses in multiple occupation").

Page 184, line 18, leave out ("and").

Page 184, line 19, at end insert ("and

(c) for the word "it" there shall be substituted "them"").

Page 184, line 21, leave out ("and") and insert—

("(aa) for the word "it" there shall be substituted "them", and ").

Page 184, line 34, after ("dwelling-house") insert ("house in multiple occupation").

Page 184, line 44, at end add ("or, as the case may be, where the house in multiple occupation is a flat in multiple occupation").

Page 185, line 2, leave out ("(other than flats)") and insert ("or houses in multiple occupation").

Page 185, line 19, at end insert—

("(ab) take reasonable steps to inform any occupiers of a residential building who do not have such an interest in the building or a flat in the building as is referred to in paragraph (a) of their intention to include the building in the clearance area; and ").

Page 185, line 25, after ("the") insert ("date on which the").

Page 185, line 26, at end insert—

("(2CA) The authority shall, by the steps taken in relation to occupiers of a residential building as mentioned in paragraph (ab) of subsection (2B), invite representations from those occupiers within such reasonable period, expiring not less than twenty-eight days after the date on which the steps are taken, as may be specified by the authority.").

Page 185, line 29, after ("the") insert ("date on which the").

Page 185, line 32, after ("(2C)") insert ("(2CA)").

Page 186, line 41, after ("flat)") insert ("a house in multiple occupation (not being a flat in multiple occupation)").

Page 186, line 44, after ("dwelling-house") insert ("house in multiple occupation").

Page 186, line 46, leave out from ("the") to ("and") in line 47 and insert ("words "a house" there shall be substituted "any premises" ").

Page 186, line 51, after ("dwelling-house") insert ("house in multiple occupation").

Page 187, leave out lines 1 to 5.

Page 187, line 29, after ("dwelling-house") insert ("house in multiple occupation").

Page 187, line 32, after ("dwelling-house") insert ("house in multiple occupation").

Page 188, line 10, after ("dwelling-house") insert ("house in multiple occupation").

Page 188, line 13, after ("dwelling-house") insert ("the house").

Page 188, line 15, after ("dwelling-house") insert ("or house").

Page 188, line 18, after ("dwelling-house") insert ("house in multiple occupation").

On Question, amendments agreed to.

1.30 a.m.

Lord Hesketh moved Amendments Nos. 177J to 177V:

Page 188, line 20, after ("(1)") insert—

("(a) in paragraph (a) the words "or person having control" shall be omitted; and (b)").

Page 188, line 23, after ("improvement") insert ("in subsection (1)").

Page 188, line 37, after ("flat") insert ("except in the expression "flat in multiple occupation"").

Page 188, line 37, ("flat") insert ("except in the expression "flat in multiple occupation"").

Page 188, line 39, at end insert—

("""house in multiple occupation" and "flat in multiple occupaton" have the same meaning as in Part XI"").

Page 188, line 43, after ("dwelling-house") insert ("house in multiple occupation").

Page 188, line 48, at end insert—

("(3) Except where the context otherwise requires, any reference in this Part (other than this section) to a flat is a reference to a dwelling-house which is a flat or to a flat in multiple occupation.").

Page 189, line 12, at end insert—

(""house in multiple occupation…section 322"").

Page 189, line 15, at end insert—

("At the end of section 345 (meaning of "multiple occupation") there shall be added the following subsection— "(2) For the purposes of this section "house", in the expression "house in multiple occupation", includes any part of a building which—

1. (a) apart from this subsection would not be regarded as a house; and
2. (b) was originally constructed for occupation by a single household;

and any reference in this Part to a flat in multiple occupation is a reference to such a part of a building which, by virtue of this section, constitutes a house in multiple occupation."").

Page 189, line 16, leave out ("(6)") and insert ("(1), paragraph (b) and the word "and" immediately preceding it shall be omitted. (2) In subsection (2) of that section the words "or building" shall be omitted and for the words "paragraphs (a) and (b)" there shall be substituted "paragraph (a)". (3) In subsection (3) of that section the words "or building", in each place where they occur, shall be omitted. (4) In subsection (6) of that section").

Page 189, line 30, at end insert— (". In section 349 (steps required to inform public about scheme), in subsection (2), in paragraph (b) the words "and buildings" shall be omitted.").

Page 189, line 32, leave out ("(2)") and insert ("(1) the words "or building", in each place where they occur, shall be omitted. (2) In subsection (2) of that section").

The noble Lord said: I beg to move these amendments en bloc.

On Question, amendments agreed to. [Amendment No. 177W not moved.]

Lord Hesketh moved Amendments Nos. 177X to 177Z:

Page 189, leave out lines 35 to 42 and insert— (". —(1) In section 352 (power to require execution of works to render premises fit for number of occupants), in subsection (1) at the beginning there shall be inserted "Subject to section 365" and for the words from "the condition of a house" onwards there shall be substituted— in the opinion of the authority, a house in multiple occupation fails to meet one or more of the requirements in paragraphs (a) to (e) of subsection (1A) and, having regard to the number of individuals or households or both for the time being accommodated on the premises, by reason of that failure the premises are not reasonably suitable for occupation by those individuals or households. (1A) The requirements in respect of a house in multiple occupation referred to in subsection (1) are the following, that is to say,—

1. (a) there are satisfactory facilities for the storage, preparation and cooking of food including an adequate number of sinks with a satisfactory supply of hot and cold water;
2. (b) it has an adequate number of suitably located water-closets for the exclusive use of the occupants;
3. (c) it has, for the exclusive use of the occupants, an adequate number of suitably located fixed baths or showers and wash-hand basins each of which is provided with a satisfactory supply of hot and cold water;
4. (d) subject to section 365, there are adequate means of escape from fire; and
5. (e) there are adequate other fire precautions."

(2) In subsection (2) of that section, at the beginning there shall be inserted "Subject to subsection (2A)", for the word "premises", in both places where it occurs, there shall be substituted "house" and at the end of that subsection there shall be added— but the notice shall not specify any works to any premises outside the house". (3) After that subsection there shall be inserted the following subsection— (2A) Where the authority have exercised or propose to exercise their powers under section 368 to secure that part of the house is not used for human habitation, they may specify in the notice such work only as in their opinion is required to meet such of the requirements in subsection (1A) as may be applicable if that part is not so used. (4) In subsection (3) of that section for paragraph (b) there shall be substituted— (b) on the person managing the house;"; and in the words following that paragraph after the word "lessee" 'there shall be inserted "occupier". (5) After subsection (5) of that section there shall be inserted the following subsections— (5A) A notice served under this section is a local land charge. (5B) Each local housing authority shall—

1. (a) maintain a register of notices served by the authority under subsection (1) after the coming into force of this subsection;
2. (b) ensure the register is open to inspection by the public free of charge at all reasonable hours; and
3. (c) on request, and on payment of any such reasonable fee as the authority may require, supply copies of entries in the register to any person."

(6) Subsection (6) of that section shall cease to have effect."). Page 189, leave out line 45 and insert ("and"). Page 190, line 9 at end insert— (". In section 353 (appeal against notice under section 352), in subsection (2)—

1. (a) in paragraph (a) for the words "considerations set out in subsection (1)" there shall be substituted "requirements set out in subsection (1A)"; and
2. (b) after paragraph (d) there shall be inserted—

(dd) that the date specified for the beginning of the works is not reasonable". .In section 354 (power to limit number of occupants of house), in subsection (1), in paragraph (a) for the words "considerations set out in subsection (1)" there shall be substituted "requirements set out in subsection (1A)". . —(1) In section 365 (means of escape from fire: general provisions as to exercise of powers) for subsections (1) and (2) there shall be substituted the following subsections— (1) In any case where—

1. (a) the local housing authority have the power to serve a notice under subsection (1) of section 352 in respect of a house in multiple occupation, and
2. (b) the reason, or one of the reasons, by virtue of which that power arises is a failure to meet the requirement in paragraph (d) of subsection (1A) of that section,

the authority shall in addition have the power for that reason to accept an undertaking or make a closing order under section 368 in respect of the house. (2) Where by virtue of subsection (1) the local housing authority have powers in respect of a house in multiple occupation to serve a notice under section 352(1) for the reason mentioned in subsection (1)(b) and to accept an undertaking or make a closing order under section 368, they may exercise such of those powers as appear to them appropriate; and where the house is of such description or is occupied in such manner as the Secretary of State may specify by order for the purposes of this subsection, the authority shall be under a duty to so exercise those powers. (2A) The local housing authority shall not serve a notice under section 352(1) for the reason mentioned in subsection (1)(b) or accept an undertaking or make a closing order under section 368 if the house is of such description or is occupied in such manner as the Secretary of State may specify by order for the purposes of this subsection. (2) In subsection (3) of that section for "366" there shall be substituted "352 for the reason mentioned in subsection (1)(b)". (3) In subsection (4) of that section after "(2)" there shall be inserted "or (2A)" and at the end of that subsection there shall be inserted the following subsection— (5) Nothing in this section affects the power of the local housing authority to serve a notice under subsection (1) of section 352 if the house also fails to meet one or more of the requirements in paragraphs (a) to (c) and (e) of subsection (1A) of that section. . Sections 366 and 367 (means of escape from fire: power by notice to require execution of works and appeals against notice) shall cease to have effect. .—(1) In section 368 (means of escape from fire: power to secure that part of house not used for human habitation), in subsection (1) at the beginning there shall be inserted "Subject to section 365". (2) In subsection (3) of that section for "£5" there shall be substituted "one-tenth of the amount corresponding to that level". (3) In subsection (5) of that section —

1. (a) for the words from "section 265" to "unfit for human habitation)" there shall be substituted "section 264";
2. (b) for the words "the modification that" there shall be substituted "with the following modifications—
1. (a) the reference in section 278(1) (premises rendered fit) to the house in multiple occupation shall be construed as a reference to the part of the house in respect of which the closing order under subsection (4) is made;
2. (b)"; and
3. (c) at the end there shall be added "and

(c) section 279 (substitution of demolition orders) shall be omitted". .—(1) In section 369 (the management code for houses in multiple occupation) at the beginning of subsection (2) there shall be inserted "Subject to subsection (2A)" and after the words "all means of water supply and drainage in the house" there shall be inserted— all means of escape from fire and other fire precautions". (2) After subsection (2) of that section there shall be inserted the following subsection— (2A) The person managing the house shall only be liable by virtue of the regulations under subsection (2) to ensure the repair, maintenance, cleansing and good order of any premises outside the house if and to the extent that he has power or is otherwise liable to ensure those matters in respect of any such premises. (3) In subsection (3) of that section, paragraphs (b) and (f) and in paragraph (c) the words from "and in particular" onwards shall be omitted. (4) In subsection (5) of that section the words "as applied under section 370 in relation to a house" shall be omitted. . Sections 370 and 371 (application of the management code to a house by order of the local housing authority and appeals relating to such orders) shall cease to have effect; and in section 381(4) of that Act "370" shall be omitted. . In section 372 (power of local housing authority to require execution of works to remedy neglect of management), in subsection (1)—

1. (a) the words from "to which" to "management code)", and
2. (b) paragraph (b) and the word "or" immediately preceding it,

shall be omitted. . In section 373 (appeal against notice under section 372), in subsection (2), after paragraph (c) there shall be inserted— (cc) that the date specified for the beginning of the works is not reasonable". . Section 374 (application of code etc. to buildings other than houses) shall cease to have effect.").

The noble Lord said: I beg to move these amendments en bloc.

On Question, amendments agreed to.

The Chairman of Committees (Lord Aberdare)

The numbering of the next five amendments has been duplicated. The numbers should be followed by a figure one.

Lord Dean of Beswick moved Amendment No. 177AA(1): Page 190, line 9, at end insert— ("46A. For section 365 (means of escape from fire: general provisions as to exercise of powers), there shall be substituted the following section— 365. (1) If it appears to the local housing authority that a house in multiple occupation is not provided with such means of escape from fire as the authority consider necessary, the authority shall exercise such of their powers under— section 366 (power to require execution of works), and/or section 368 (power to secure that part of house not used for human habitation). as appear to them to be most appropriate. (2) Before serving a notice under section 366 or accepting an undertaking or making a closing order under section 368, the authority shall consult with the fire authority concerned.").

The noble Lord said: As the Chairman of Committees said, there was some confusion about the numbering, but I hope that we have got it pretty straight. This amendment would change into a duty local authorities' power of serving notices to require fire safety works to be carried out. Most local authorities and all their associations agree that the way to improve conditions in houses in multiple occupation is to give local authorities duties to do so. I understand that the works are optional at present and that they are not being carried out as they should be.

The amendment would also enable local authorities to serve such fire safety notices on the smaller houses in multiple occupation—the ones that the Department of the Environment states are "virtually all" affected by inadequate means of escape from fire. Houses in multiple occupation are a fire hazard. Every year this decade 90 persons have died as a result of fires in houses in multiple occupation. That is three times the number who died in the King's Cross disaster. The department's own research into the problem—the 1985 Physical and Social Survey of Houses in Multiple Occupation states that, 81 per cent. of houses in multiple occupation lack a satisfactory means of escape…Inadequate means of escape affected all those houses in multiple occupation containing fewer than three units.

The Committee may be aware of the national publicity that surrounded this issue in early September this year when 12 survivors of a bedsit blaze in Notting Hill, London, received an out-of-court settlement in compensation from their landlord. However, the fire took place in 1981 when eight people died and 100 were made homeless. If those bedsits had had adequate fire safety precautions, such as fire escapes, the results might have been very different with no lives lost.

The Government have undertaken the principle of introducing a general fitness standard for houses in multiple occupation. The former Parliamentary Under-Secretary at the Department of the Environment, Mr. Trippier, stated that the fitness standard would, include means of escape from fire and fire prevention measures". Those were the comments of Mr. Trippier when he outlined a commitment by the Government to improve conditions for tenants with regard to fire. I beg to move.

The Earl of Balfour

I wonder about the amendment for this reason. The noble Lord, Lord Dean, has repeated Section 365 of the 1985 Act, leaving out subsections (2) and (4). Subsection (2) states: The authority shall so exercise those powers if the house is of such a description or is occupied in such a manner as the Secretary of State might specify by order". Subsection (4) states: An order under subsection (2)—

1. (a) may make different provision with respect to different cases or descriptions of case including different provision for different areas; and
2. (b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament".

I am not sure that those two passages should be cut out of the Housing Act 1985.

Lord Hesketh

The most significant parts of this group of amendments are those which relate to Sections 365, 369 and 372 of the 1985 Act. They are connected with Amendment No. 177X, which we shall be discussing shortly.

Lord Dean of Beswick

I thank the noble Lord for giving way. He said "this group of amendments". I moved only one amendment. May I take it that the Minister is dealing with Amendment No. 177AB? There are some three amendments. Is the Minister dealing with all of them on the same basis in principle?

Lord Hesketh

It was my mistake. The most significant parts of this amendment are those which relate to Sections 365 and 369 to 372 of the 1985 Act, which are connected with Amendment No. 177X (which we shall be discussing shortly), because, as the Committee will be aware, the amendment contains a new fitness standard for HMOs which includes the means of escape from fire.

That has entailed consequential changes to Section 365 and related sections. The amendment ensures that the Secretary of State retains the power to require authorities to serve notices requiring means of escape from fire to be provided on particular categories of HMO.

My right honourable friend proposes to use his power in order to keep the present duty in relation to large HMOs. We do not believe that the duty should apply to all HMOs as the Opposition amendment, Amendment No. 177AA, would provide. As I said, our general view is that the authorities should retain their discretion to take whatever action seems most appropriate to them.

Lord Dean of Beswick

I think that the Minister's final few words indicated what those of us who support this amendment—and it has been a long campaign over a number of years—believe the difference is really about. The Minister says that the local authority ought to be free to take certain types of action. We say that in principle that action ought to be mandatory. Some local authorities are carrying out this function and others are not, and we say that the risk is far too high.

The Minister mentioned a later amendment. If there is some consideration to be given to this subject when that amendment is discussed, naturally I shall wait until it comes along. Perhaps he would tell me the number.

Lord Hesketh

The amendment is No. 177X.

Lord Dean of Beswick

The point I make about this amendment and some of the others that will follow is that we are not satisfied with working on the basis of giving local authorities the chance to do something. We say that they should do something. However, I have no desire to press the amendment. Obviously I shall look at the general subject when we have gone through these amendments and perhaps we may come back at a later stage.

Having said that, I shall move the other amendments later.

Amendment, by leave, withdrawn.

Lord Dean of Beswick moved Amendment No. 177AB(1): Page 190, line 9, at end insert— ("46A. (1) In section 366 (means of escape from fire: power to require execution of works), in subsection (2), after the word "mortgagee" there shall be inserted the words "or occupier". (2) After subsection (3) of that section shall be inserted— (4) The authority shall maintain a register of all notices served under subsection (1) above and this register shall be available for inspection by members of the public free of charge, at the offices of the authority, at all reasonable hours. (5) Any person may make a copy of a register maintained under subsection (4) above, or any part thereof, on payment of a reasonable fee.").

The noble Lord said: This amendment has been tabled in my name and that of the noble Lord, Lord Stallard. It would give tenants of houses in multiple occupation the right of access to information regarding fire safety in their home. Under the present legislation, the only person who has a right to know whether notices regarding means of escape from fire have been served on a property is the landlord of a property who, more often than not, is the last person at risk from fire in the property. He may not even live there.

The amendment requires the local authority to keep a register of all properties where such notices have been served so that tenants and prospective tenants can gain information about the property in which they live. Access to information of this type is extremely important in the effort to reduce the number of deaths in fires that take place on a regular basis in houses in multiple occupation.

Each year in this decade approximately 90 people have died in fires in HMOs. I understand that this proposal was first put forward by Mr. Andrew Smith, Member for Oxford, East, in another place in a Private Members' Bill which was halted due to lack of time. I understand that at that point the Department of the Environment Parliamentary Under-Secretary, Mr. Trippier, gave an undertaking to Mr. Smith that this proposal should go ahead. For this reason I believe that the Government should accept this amendment. I beg to move.

The Earl of Kinnoull

These amendments are connected with fire escape notices and the fact that the noble Lord would like to see mandatory obligations put upon local authorities. What is the evidence that there has been irresponsibility by local authorities on this important issue? It is very disturbing if the noble Lord has evidence.

Lord Dean of Beswick

For over 10 years a campaign has been underway at Westminister. It is not a one-party campaign. I make that quite clear. There have been strong representations by an all-party group called CHAR. There has been a series of appalling tragedies. I do not wish to go through them. They have been mainly in the London area and in such places as Manchester and Leeds. Deaths have occurred on a regular basis and each time somebody has been found at fault through inadequate fire escape facilities, or doors being locked. Such standards have been terribly low.

There was an appalling fire in Finsbury, or Kilburn, about 10 years ago when 11 women died during the night. There has been one in Leeds where three people died. There has been a succession of tragedies.

The Government are tremendously sympathetic. We are not on opposite courses. But as those who support this amendment have said in the past, the Government are moving along the road too slowly. However, it take resources. Some authorities are giving all the necessary guidelines that the Government have issued. I understand—I speak from second-hand information—that the Government have some further guidelines that may be emerging shortly. I hope that when those guidelines emerge they will carry a mandatory duty on local authorities to safeguard people in HMOs in this area. At present they are not mandatory and they are not being carried out in many areas.

I attended a seminar at Leicester University on the subject only last December. I think that another one is being run. The issue is of grave concern to a widespread group of people across the political spectrum.

Lord Hesketh

If the noble Lord, Lord Dean, looks back to Amendment No. 177X he will find that the new subsection (5B) in Section 352 provides for a register of notices to be kept. I hope that answers his question on this point.

Lord Dean of Beswick

It does. Due to the mix-up in the numbers we did not deal with the matter at the time that we should have done so. I have no desire to press the amendment. It will be an ongoing issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

1.45 a.m.

Lord Hesketh moved Amendment No. 177AC(1): Page 190, line 48, at end insert— ("In section 378 (provisions for protection of owners) in subsection (2), for paragraph (b) there shall be substituted— (b) to which regulations under section 369 (the management code) apply". In Section 379 (making of control order), in subsection (1) paragraph (c) except for the final "or" shall be omitted.").

On Question, amendment agreed to.

Lord Dean of Beswick moved Amendment No. 177AD(1): Page 190, line 48, at end insert— ("49A. In section 379 (making of control order), after subsection (4) there shall be inserted the following subsections— (5) Within eight weeks of the date on which the notice was served under subsection (3), the local housing authority shall serve notice on the dispossessed proprietor that they intend to—

1. (a) retain the control order in force; or
2. (b) revoke the control order under section 392; or
3. (c) make a compulsory purchase order under section 394.

(6) Where the local housing authority have exercised their powers under subsection (5), the dispossessed proprietor may appeal within 21 days to the County Court on the grounds that the decision of the authority was unreasonable.").

The noble Lord said: I shall not go through this, but basically I should inform the Committee that this group of amendments will bring in certain other powers, such as control orders and that type of provision. It will extend those, but it will also help to solve the complexity of the existing legislation which was cited by authorities responding to the Manchester survey as a major disincentive to its use.

Briefly, the present powers suffer from various key deficiencies. The first is the cumbersome requirement to prepare a management scheme which may never be implemented. The amendments repeal such schemes. Secondly, there is an artificial distinction between revenue and capital accounting while an order is in force. The amendments propose a single management account. Thirdly, there is a confused relationship between control orders and CPOs: the amendments propose new arrangements after a control order is made. Fourthly, appeals are too frequent and the amendments propose fewer points for appeals.

Under the amendments, once a control order is made, it would remain in force for five years unless superseded by other action. Appeal against a control order in the county court would be retained.

These are complex issues that we feel should be brought before the Committee. I am bringing them before the Committee only in a probing sense tonight, but no doubt we shall come back to them at Report stage. They will be before us time and again until objectives are reached. I should like to hear the Minister's reply, but I have no desire to press this amendment tonight.

Lord Hesketh

The control order procedure was introduced as a draconian measure against the worst sort of landlord, who did not do repairs despite statutory notices, and who harassed his tenants. Since the process was introduced, several significant changes have taken place which affect the sort of property on which control orders could be used. In the Housing Act 1988 we introduced tough new powers for local authorities to get repairs done. We also strengthened the Protection from Eviction Act and introduced the new right to civil damages to help the tenant suffering harassment.

In the Bill we are extending the Housing Act 1985 power to enable a local authority to CPO a property in a renewal area to meet certain objectives related to the management of a property and the well-being of its occupants. We have also amended the Local Government (Miscellaneous Provisions) Act to enable local authorities to deal with the landlord who cuts off the electricity supplies as a form of harassment, and are applying the management regulations direct to all HMOs without the need for a management order.

These measures taken together, and the general dislike of the present complicated scheme, suggest that it is no longer needed in its present form. My department will therefore undertake a review of the role of the control order and its links with compulsory purchase in the light of the recent changes and certain recent court cases, and in due course consult on a reformed system. We have not moved our own amendments because we believe a complete rethink may be necessary. I hope that the noble Lord will accept that this is a sensible course, and that it is not worth tinkering with the system. I hope therefore he will withdraw his amendment.

The Earl of Kinnoull

Before the noble Lord replies, will my noble friend tell me whether there has been much requirement to use what he called draconian powers or has the effect of a reserve power been sufficient?

Lord Dean of Beswick

I think so. I do not want to spend too much time on these amendments, because I am aware of the time factor and the host of amendments that we still have to go through. Unfortunately my noble friend Lord Stallard has had to leave us. He has been one of a number of Members of this House and Members of another place who have followed this issue. Only two years ago a Government Back-Bencher, the noble Baroness, Lady Vickers, introduced a Private Member's Bill at a late stage in a Session in this Chamber dealing with this matter and had complete support. Unfortunately there was no parliamentary time available.

If my noble friend Lord Stallard were here he would cite the cases, chapter and verse, where people have lost their lives because of doors being chained up and by a lack of fire services. Some of the more notorious cases have been dealt with. Nevertheless, the only time one hears of the problems is when there is an appalling tragedy and lives are lost through fire. We know that if regulations are not tightened up and improved, there will be a repetition of those tragedies. Much of what is happening can be prevented. We believe that our proposals should be mandatory for local authorities and that they would go a long way towards helping the situation. Having said that, I withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 177AE(1) to 177AG not moved.]

Lord Hesketh moved Amendment No. 177AH: Page 191, line 4, at end insert— ("In section 400 (index of defined expressions: Part XI), at the appropriate place in alphabetical order there shall be inserted the following entry— flat in multiple occupation …section 345"").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 177AJ: Page 191, line 44, at end insert— (". In Schedule 13 (further provision relating to control orders under Part XI of that Act) in sub-paragraph (4) of paragraph 21—

1. (a) in paragraph (a) the word "366" shall be omitted;
2. (b) at the end of paragraph (a) there shall be inserted "or";
3. (c) paragraph (c) and the word "or" immediately preceding it shall be omitted; and
4. (d) in the words following paragraph (c) the words "or order" shall be omitted.").

On Question, amendment agreed to.

[Amendments Nos. 177AK to 177AR not moved.]

Lord Hesketh moved Amendments Nos. 177AS to 177 AX: Page 193, line 34, after ("(3) insert ("(3A)"). Page 193, line 37, leave out ("in the opinion of the local housing authority"). Page 193, line 44, at end insert— ("(3A) For the purpose of assessing the amount referred to in subsection (3)(a), the rules set out in section 5 of the Land Compensation Act 1961 shall, so far as applicable and subject to any necessary modifications, have effect as they have effect for the purpose of assessing compensation for the compulsory acquisition of an interest in land."). Page 193, line 47, leave out ("sections 2 and 4") and insert ("section 2 and subsections (1)(a) and (4) to (6) of section 4"). Page 193, line 48, after ("shall") insert ("subject to any necessary modifications"). Page 194, line 39, leave out ("following requirements, that is to say") and insert ("requirements in paragraphs (a) to (i) below and, by reason of that failure, is not reasonably suitable for occupation").

On Question, amendments agreed to.

Lord Ross of Newport moved Amendment No. 178: Page 194, line 44, leave out paragraph (d) and insert— ("( ) it has adequate lighting, heating, thermal insulation and ventilation;").

The noble Lord said: Again, I shall move this amendment for my noble friend Lord Ezra. I trust that he is safely in bed. This is to add the words "thermal heating" to Schedule 8. Perhaps I may say to the noble Earl who asked whether these measures are really necessary, that there have been some fires in Newport where at least three people have died in houses of multiple occupation in the past two or three years. I believe that everything said by the noble Lord, Lord Dean, earlier is borne out and that applies not only to London but all over the country. I am afraid that there are quite a few of those properties in my part of the country.

The effect of this amendment is to include in the fitness for human habitation standard the provision of adequate heating and thermal insulation. The fitness for human habitation standard as it is worded at present includes only adequate provision for heating. In some cases that has been interpreted as provision of a 13 amp socket. It is clear that on-peak electric heating is one of the most expensive and least efficient forms of heating available. The provision of such heating, particularly in a dwelling which lacks adequate thermal insulation, is unlikely to result in a home which the occupant can heat to an acceptable standard. In these terms the present fitness for human habitation standard would not produce a dwelling which would be generally considered fit for human habitation in the late 20th century. This amendment would enable properties to be brought up to such an acceptable standard. I hope that for once I may receive a favourable response from the Minister. I beg to move.

Lord Hesketh

Amendment No. 178 would delete the requirement that a dwelling should have adequate provision for lighting, heating, and ventilation to be considered fit for human habitation. Instead it would substitute the much broader requirement of adequate lighting, heating, thermal insulation and ventilation.

On the face of it, that might seem a minor and even desirable form of wording which would acknowledge the importance that should be attached to the extent of thermal insulation in a dwelling. But of course it goes much further than that. The standard of fitness for human habitation is the standard that determines whether a local authority has a duty to take action against a particular property, if necessary against the wishes of the occupant. So, for example, if a dwelling had, in the view of the local authority, less than adequate roof or wall insulation then it could compel the owner to carry out the necessary works. There would be no guarantee either that the owner would be entitled to grant towards the costs of doing so—since grants are mandatory only in so far as the applicant has insufficient resources to pay for the work. That is why we resist the amendment of the noble Lord, Lord Ross.

Lord Ross of Newport

With respect, I cannot say that that is a very satisfactory answer. I thought that for once I might get an amendment accepted. I do not intend to press the matter but it is a shame that the Government are unable to take the amendment on board. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 178ZA not moved.]

Lord Hesketh moved Amendments Nos. 178A and 178AA: Page 195, line 14, leave out ("Notwithstanding that") and insert ("Whether or not"). Page 195, line 26, at end insert— ("(2A) Subsection (1) and, in the case of a flat in multiple occupation, subsection (2) apply in relation to a house in multiple occupation with the substitution of a reference to the house for any reference to a dwelling-house.").

On Question, amendments agreed to.

Schedule 8, as amended, agreed to.

Clause 148 agreed to.

Lord Hesketh moved Amendment No. 178B: After Clause 148, insert the following new clause:

("Reports to tenants etc. on local housing authority functions.

.—(1) In accordance with the provisions of this section, every local housing authority shall, for each year, furnish to each person who at the end of that year is one of their housing revenue account tenants a report containing such information as may be determined by the Secretary of State relating to the functions of the authority as a local housing authority during that year (including functions which in that year were exercised by any other person as agent of the authority).

(2) In the section "year" means a period of twelve months beginning on 1st April; and the report relating to any year shall be furnished as soon as practicable after the end of that year and, in any event, not later than three months after the end of that year.

(3) In this section "housing revenue account tenant", in relation to a local housing authority, means a person who, as tenant or licensee, occupies a house or other property within the authority's Housing Revenue Account; and, in the case of joint tenants or joint licensees, it shall be a sufficient compliance with the obligation under subsection (1) above to furnish each housing revenue account tenant with a report that a single copy of it is furnished to the tenants or licensees jointly.

(4) At the same time as they furnish a report under this section to their housing revenue account tenants, a local housing authority shall send a copy of the report to the Secretary of State.

(5) The power to make a determination under subsection (1) above may be so exercised as to make different provision for different cases or descriptions of cases, including different provision for different areas, for different local housing authorities or for different descriptions of local housing authorities.

(6) The reference in subsection (3) above to a house or other property within an authority's Housing Revenue Account shall be construed in accordance with section 71(6A) above.

(7) In this section "tenant" has the same meaning as in the Housing Act 1985.").

The noble Lord said: The purpose of this amendment is to require local housing authorities to report annually to their customers—their tenants—on their performance as housing authorities. Reports must correlate to the financial year April to March and must be provided to the tenants no later than three months after the year to which the information relates. The Secretary of State for the Environment must be provided with copies of all the reports. Noble Lords will see that the amendment would enable my right honourable friend the Secretary of State for the Environment to make determinations prescribing the contents of reports from time to time. I beg to move.

The Earl of Kinnoull

Perhaps my noble friend can tell me whether this is something that is not already done by local authorities or whether it is widely carried out and only some local authorities do not do it. It is valuable information for the tenants.

Lord McIntosh of Haringey

We certainly do not object in principle to the concept of performance indicators and annual reports on performance indicators, though it is conspicuous that the Government are better at seeking to impose them on other people than taking their own medicine and producing such reports.

I should like to see the same done for the Department of the Environment; in other words, why is it that when Mr. Heseltine was the Secretary of State for the Environment we had an elaborate system to provide some sort of management control in that body but it appears to have been totally abandoned? Certainly the results are not made public as they were at one time and there is nothing comparable to the annual reports now proposed for local authorities.

However, I have one question about the timing. If it is the case, as we understand it, that the determination of resources is only to be made in January in any year, is the local authority then to be required to produce its annual report for all tenants by April? Is that a suitable time in the year, particularly when that is also the time of budget-making for local authorities?

Lord Hesketh

I am sure that the noble Lord, Lord McIntosh, is already well aware—this is also in answer to the question put by my noble friend Lord Kinnoull—that some councils already lead the way in this respect. Many councils already send news-sheets or news-letters to tenants. This information could be a useful addition. This proposal is at present under consultation. I will certainly draw the point concerning dates, raised by the noble Lord, Lord McIntosh, to the attention of that process.

On Question, amendment agreed to.

[Amendment No. 178C not moved.]

2 a.m.

Lord Graham of Edmonton moved Amendment No. 178D: After Clause 148 insert the following new clause:

("Duties of landlord authority.

. For section 105 of the Housing Act 1985 there shall be substituted the following sections —

"."105. (1) Every landlord authority shall within 12 months of the commencement of this section, publish a draft scheme or schemes for consultation with those of its tenants who are likely to be substantially affected by a matter of housing management and such a draft scheme or schemes shall include

1. (a) information describing the method by which the authority's proposals in respect of any matter of housing management are to be communicated to its tenants and
2. (b) information describing the method by which the tenants will be able to make their views on any matter of housing management known to the authority and
3. (c) information concerning the way in which the authority will consider any such views expressed by the tenants and
4. (d) information concerning the way in which the authority will decide upon any matter of housing management

(2) A landlord authority that has prepared a draft scheme pursuant to section (1) above shall

1. (a) place the draft scheme on deposit for a period of not less than twelve weeks and
2. (b) ensure that adequate publicity is given in their area to the draft scheme and to this effect this authority shall have particular regard to the need to inform its tenants of the draft scheme and
3. (c) take reasonable steps to ensure that persons may be expected to desire an opportunity to make representations to the authority concerning the draft scheme are made aware that they are entitled to an opportunity of so doing and
4. (d) take reasonable steps to ensure that all such persons are given an adequate opportunity of making such representations

(3) It shall be the duty of a landlord authority to consider any representations about a draft scheme made to it pursuant to subsection (2) above or otherwise

(4) Subject to subsections (1) to (3) above a landlord authority shall approve a draft scheme with or without modifications

(5)(a) A landlord authority may if it sees fit divide its area into such parts as it considers appropriate for the purposes of this section and may, pursuant to this section, make different schemes for consulting its secure tenants in each of those parts about any matters of housing management and subsections (1) to (4) above shall be construed accordingly (b) Any division of its area made by a landlord authority may be varied by the authority at any time and shall be made if it appears to the authority that a majority of tenants in any area favour such a variation in which case any variation shall as far as is practicable accord with the wishes of the tenants

(6) Every landlord authority shall publish any approved scheme or schemes and a copy of any document published under this section shall

1. (a) be made available at the authority's principal office for inspection at all reasonable hours without charge by members of the public and
2. (b) be furnished on payment of a reasonable fee to any member of the public who asks for one

(7) A landlord authority which is a registered housing association shall, instead of complying with paragraph (a) of subsection (6), send a copy of any document published under that subsection —

1. (a) to the Housing Corporation
2. (b) to the council of any district or London borough in which

there are dwelling houses let by the association under secure tenancies;

and a council to whom a copy is sent under this subsection shall make it available at its principal office for inspection at all reasonable hours, without charge, by members of the public.

(8) Every landlord authority shall take reasonable steps to inform its tenants and all those who have made representations pursuant to subsection (2) above of the arrangements for inspection of such an approved consultation scheme or schemes. 105A. It shall be the duty of every landlord authority before making any decision on a matter of housing management to consider any representations made to it in accordance with any approved scheme made pursuant to section 105 above. 105B. A matter is one of housing management for the purposes of this section if —

1. (a) it relates to the management, maintenance, improvement or demolition of dwelling-houses let by the authority, or to the provisions of services of amenities in connection with such dwelling-houses; and
2. (b) it represents a new programme of maintenance, improvement or demolition or a change in the practice or policy of the authority; and
3. (c) it is likely to substantially affect its tenants as a whole or a group of them; or
4. (d) it consists of a variation in the rent payable or in any changes for facilities provided by the landlord authority concerned in connection with any of its housing accommodation; or
5. (e) a variation in the terms of tenancies; and the variation will affect its tenants as a whole or a group of them.

105C. (1) If a qualifying tenants' association serves written notice proposing a change in a matter of housing management on a landlord authority, the authority shall take the proposal into consideration.

(2) If the authority have not, by the end of the period of six months after service of the notice, accepted the proposal in principle, they shall give the association a written statement of the reasons why they have not done so.

(3) Subject to subsection (4) below, a tenants' association is a qualifying tenants' association for the purposes of this section if

1. (a) it is an association of which at least half the members are tenants of houses specified in the notice and
2. (b) at least half the tenants of the specified houses are members of the association.

(4) For the purposes of a proposal under subsection (1) above a group of tenants shall only be deemed to be a qualifying tenants' association if, in addition to subsection (3) above, membership of the association is open to all who reside in their area. 105D. Section 27C of the Housing Act 1985 shall be repealed and there shall be inserted the following section: 27C (1) If a qualifying tenants' association serves written notice on the landlord authority —

1. (a) proposing that the authority should enter into a management agreement with the association with respect to houses and other land specified in the notice, or
2. (b) proposing that the association should acquire from the authority houses and other land specified in the notice at a specified price,

the authority shall take the proposal into consideration, and in the case of (a) above, the authority shall consent to such a proposal unless there is good reason to the contrary.

(2) If the authority have not by the end of the period of six months after the service of the notice, agreed to the proposal in principle, they shall give the association a written statement of the reasons why they have not done so.

(3) Subject to subsection 4 below a tenants' association is a qualifying association for the purposes of this section if—

1. (a) it is an association of which at least half the members are tenants of houses specified in the notice, and
2. (b) at least half the tenants of the specified houses are members of the association.

(4) For the purposes of a proposal under subsection 1(a) above only, a group of secure tenants shall only be deemed to be a qualifying tenants' association if, in addition to subsection (3) above, membership of the association is open to all who reside in their area.

(5) Without prejudice to the generality of any agreement pursuant to subsection (1) above a landlord authority shall provide any group of secure tenants with whom they have reached agreement with financial resources at least equal to those at the time allocated by the authority to enable it to carry out the housing management function included in that agreement in the area in question.

(6) For the purposes of subsection (5) above a landlord authority shall where necessary when calculating the financial resources allocated to housing management functions include those resources spent on the employment of management, maintenance and any other staff.

(7) Any sums of money provided pursuant to subsections (5) or (6) above shall be reviewed annually for as long as the agreement is in force.

(8) Every landlord authority shall make arrangements for enabling a qualifying tenants' association to appeal against a decision of the authority pursuant to this section.

(9) Any appeal by virtue of this section shall be to an appeal committee established by the authority, consisting only of members of the authority but shall not include any person responsible for the original decision.

(10) The decision of an appeal committee on any such appeal shall be binding on the landlord authority. 105E. (1) A landlord authority which is proposing major works of improvement to dwelling-houses or estates shall carry out a survey of all those who in its opinion are likely to be substantially affected in order to discover their views on design features of dwelling-houses and estates. (2) Without prejudice to the generality of subsection (1) above the matters to be examined in any survey carried out pursuant to this section shall include the following, that is to say the views of the persons being surveyed on

1. (a) the advantages and disadvantages of their present accommodation and
2. (b) the advantages and disadvantages of any previous accommodation they may have occupied

and the authority shall consider the results of any such survey pursuant to subsection (1) above.

(3) Where a landlord authority proposes to provide new housing accommodation in accordance with its powers under Part II of the Housing Act 1985 it shall consider the results of any surveys carried out pursuant to subsection (1) above when designing any such dwelling-houses or estates.

105F. (1) Subject to subsection (2) below a landlord authority shall establish a Tenants Support Service.

(2) A landlord authority shall only establish such a Tenant Support Service where a majority of tenants support such establishment.

(3) For the purposes of determining tenants' support pursuant to subsection (2) above the landlord authority shall hold a ballot of all of its tenants and for the purposes of that subsection a majority of tenants shall be deemed to be a simple majority of those voting.

(4) Subject to subsection (2) above a landlord authority shall impose a levy on the rents of all its tenants and the level of such a levy shall as far as possible accord with the wishes of its tenants and shall be reviewed annually.

(5) All moneys received from a levy imposed pursuant to this section shall only be spent on;

1. (a) the establishment by the authority of a Tenants' Support Service which shall be established as a body corporate; and
2. (b) the running costs of a duly established Tenants' Support Service;

provided that where a qualifying tenants' association serves written notice on a landlord authority, that authority shall pass to the association half of the moneys collected from tenants in accordance with subsection (4) above and those moneys shall be spent in accordance with the wishes of the said association.

(6) The management committee of a Tenants' Support Service shall consist of such persons as in the opinion of the authority have sufficient knowledge of and experience in the various matters relating to tenants as are covered in this Act provided that no more than one third of the management committee shall consist of members or officers of the authority or any of its committees or subcommittees.

(7) The functions of Tenants' Support Service shall include —

1. (a) the provision of information to tenants and to groups or associations of tenants concerning any rights given to them by this or any other enactment;
2. (b) the production of information to tenants and tenants' associations to enable tenants to take up their rights given by this or any other enactment;
3. (c) advice and support to tenants and tenants associations on all matters of concern to tenants;
4. (d) engagement and supervision of staff in order to facilitate the above;
5. (e) making of grants to associations of tenants where in the opinion of the Tenants' Support Service such grants would enable tenants to take up their rights under this Act;
6. (f) encouragement of tenants to form tenants' associations.

(8) A landlord authority and a Tenant Support Service shall keep a separate account of its income and expenditure under this section and any person interested may at any reasonable time and without payment inspect the account and make copies of it or any part of it.

(9) For the purposes of discharging their duties under subsections (5) or (6) above two or more landlord authorities may appoint a joint Tenants' Support Service. 105G. (1) Every landlord authority shall take reasonable steps to —

1. (a) inform all of its secure tenants of their rights under this Act; and
478
2. (b) provide them with such information as is necessary to enable them to take up their rights under this Act; and
3. (c) encourage them to take up their rights under this Act.

(2) A landlord authority may make moneys available to voluntary organisations in order that they may assist with the discharge of those functions listed in subsection (1) above.

(3) Where pursuant to subsection (2) above a landlord authority makes any grants to voluntary organisations then all such grants shall be entered on a register which shall be open to public inspection at all reasonable hours and any member of the public may make a copy of the register or any part thereof on payment of a reasonable fee.

105H. In this section, and in section 27C of this Act —a landlord authority means a local housing authority as defined in Part I of the Housing Act 1985 and an approved landlord as defined in Part IV of the Housing Act 1988; —a tenant means a secure tenant as defined in Part IV of the Housing Act 1985 and an assured tenant as defined in Part I of the 1988 Housing Act.".").

The noble Lord said: I move this amendment standing in the name of my noble friend Lord McIntosh of Haringey. It is a lengthy and important amendment, particularly to tenants of housing associations. The intention is to place a duty and obligation on local authorities and housing associations with regard to tenant participation. It has the support of the AMA. I submit to the Government that it fits in with their intention of furthering tenants' rights. For this reason it ought to be acceptable.

The provisions were formerly included in a tenants' participation Private Member's Bill that never received parliamentary time. The main provisions can be summarised as follows. It strengthens the Housing Act 1985 by placing a duty on local authorities to draw up a scheme for tenant participation following consultation with tenants. The scheme shall be publicised. This scheme will compel the landlord to consult with tenants in line with its provisions before making any decision on housing management matters as specified in Section 105(1)(b) of the amendment.

It strengthens the existing definition by including rent payable as a matter of consultation. If a tenants' association wants to see any change in housing management it places a duty on the landlord to consider the change and to give written reasons for refusal should it not be acceptable. The tenants' association is defined in Section 105C(3). It gives a tenants' association the right to set up a management co-op unless there is a good reason to the contrary, and to receive money from the landlord at least equal to that previously spent on the properties in question. Any adverse decision can be taken by tenants to an independent appeal.

It places a duty on landlords in respect of consultation prior to a major works scheme or a new-build scheme. It obliges the landlord to set up a tenants' support service where it is supported by a simple majority of tenants in a secret ballot funded by a levy on the rent. The functions of the service are listed in Section 105F(7).

If these provisions are enacted they would give real power to tenants and allow tenants' associations to flourish and gain access to financial resources. They would give a boost to management, co-ops as well. They have the support of one major landlord, the AMA. I suggest that the Government should give a reply in detail if they are not prepared to accept this amendment. I beg to move.

Lord Hesketh

There are 11 major requirements in this clause. I say "major" because there are many more changes in this clause consequential upon the 11. And who are the authorities which would be required to carry out these new provisions? With the exception of the substituted Section 27C, the sections introduced by the new clause would on the face of it relate to all housing authorities, all registered housing associations, all charitable trusts, all development corporations, all urban development corporations and the Development Board for Rural Wales. That is some 2,700 housing authorities.

I am entirely in agreement with Members of the Committee opposite that tenants should have the opportunity to participate in the management of their housing, if they wish to do so. There are many excellent schemes in the country where tenants are playing an important role in management, such as the Priory Estates project sponsored by my department. In my view much of this new clause is patronising to tenants, unnecessarily restrictive on authorities and over-prescriptive. The Government do not believe these duties, which are described in great detail and allow little room for participation, would further the cause of increasing participation by tenants in the management. Matters such as tenants' management agreements are better addressed by permission and encouragement.

In any event, the amendment is unnecessary in the case of housing associations, and of associations and other landlords approved to take part in tenants' choice. The Housing Corporation already has power to issue guidance to associations on these matters under Section 36A of the Housing Associations Act 1985, (as inserted by the Housing Act 1988) and power to enforce that guidance. The corporation has already used that power to issue guidance under the title "The Tenants' Guarantee", and also requires that other landlords seeking approval for tenants' choice comply with the same principles.

The guarantee is a very flexible means of ensuring that housing associations which vary enormously in size and type follow best management practice: and it is a far more effective way of proceeding than prescribing in statute, as this amendment seeks to do, an inflexible list of requirements which every landlord, regardless of individual circumstances, would have to meet. The clause is also premature. Members will know that earlier this year, the Government announced their intention of requiring local housing authorities to publish performance indicators relating to their housing management service. Members of the Committee have had the chance to debate the amendment to this Bill which would give effect to our intention for the first time. Tenants will, under these radical proposals, have sufficient information to question decisions taken by their landlord and to judge performance both year on year and against other authorities of a similar type or size. A similar scheme for housing associations proposed by the Housing Corporation will in practice be able to go wider than the proposals in the clause.

The third part of the new clause proposes to repeal Section 27C of the Housing Act 1985 as inserted by Section 11 of the Housing and Planning Act 1986, which concerns the right of a qualifying tenants' association to a reasoned response from its local authority in respect of proposals for co-operative management or ownership. The amendment would strengthen the present right to a reasoned response into a presumption that a tenants' association should have its proposal accepted unless a local authority can show good cause to the contrary.

This issue arose in the context of the housing co-operatives review. The department is now examining further whether current provisions inhibit co-operative development to the extent that stronger legislation is necessary. The amendment, therefore, has pre-empted a full consideration of the issues involved.

The amendment also appears to widen the considerations relevant to the management agreement or acquisition proposed. I accept that they may be pertinent to the terms of a management agreement which the Secretary of State might be asked to approve which, together with the many others required, seem better placed in the agreement itself. The department is presently liaising with the National Federation of Housing Co-operatives in producing a model management agreement. Finally, there are a number of minor consequential changes which the clause would require but with which I shall not bother the Committee at this late hour.

In conclusion, the Government consider that the amendment would be unnecessarily inflexible and inappropriate to primary legislation. I urge the noble Lord to withdraw the amendment.

Lord Graham of Edmonton

Does the noble Lord appreciate that if I had not moved my amendment he would not have had the chance to give us all that good news and information? I shall study with great care what he has said. He has perhaps encapsulated many good reasons why the amendment is not necessary. His advisers take seriously the thrust of the amendment, which seeks to make the Government put their money where their mouth is in regard to consulting tenants and taking notice of what they have to say.

When I study the panoply of powers to which the noble Lord referred, it may well be that I shall agree that the amendment is not necessary. I am grateful to the noble Lord. I managed to keep up with most of what he said. I shall read the rest, not tomorrow but the day afterwards. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 149 [Contributions towards costs of housing mobility arrangements]:

[Amendment No. 178E not moved.]

Clause 149 agreed to.

Lord Graham of Edmonton moved Amendment No. 178F: After Clause 149, insert the following new clause:

("Assistance for owners of defective housing

.—(1) The Housing Act 1985 shall be amended as follows.

(2)(a) Section 528 (designation of defective dwellings by Secretary of State) shall be amended as follows.

(b) In subsection (1), the following paragraph shall be inserted after paragraph (b)— (c) the buildings are defective by reason of subsidence caused by mining or tunnelling.

(c) In subsection (2), paragraph (b) shall be omitted.

(d) In subsection (3), paragraph (a) shall be omitted.

(3) In Part XVI subsequent references to the cut-off date shall be omitted.

(4)(a) Section 569 (contributions by the Secretary of State) shall be amended as follows.

(b) The following subsection shall be inserted after subsection (1)— The Secretary of State shall pay contributions to local authorities for 100 per cent. of the cost of repair of a designated defective home provided the tenant is a tenant of a local housing authority or a registered housing association or a mutual housing co-operative.".

(5)(a) In Schedule 20 (assistance by way of repurchase), Part II (price payable and valuation) shall be amended as follows.

(b) In paragraph 7, after sub-paragraph (2) there shall be inserted the following sub-paragraph — (3) The Secretary of State shall pay contributions to local housing authorities for 100 per cent. of the cost of repurchase of a designated defective home.".").

The noble Lord said: It is a tragedy that an amendment of this kind should be called at seven minutes past two in the morning, after we have been about our business for around 12 hours. I do not intend to go into the detail of the amendment, which owes its genesis to a debate that took place on this matter in another place when the Bill was before it. I had the privilege to serve on this side of the Chamber when the defective Housing Act came before us. We know that the genesis rests on the discovery in the 1960s and 1970s that a great many of the properties that were built by a variety of landlords—substantially public landlords—were defective in their construction and design.

I know the Government's dilemma, which I am sure the Minister will not want to hide. A great many people were persuaded to buy their houses. They had their eyes wide open—caveat emptor—but when they managed to buy them found to their horror that the properties were defective. I know that the Government sincerely wanted to put that matter right. The Act and subsequent changes are designed to do just that. They are designed either to provide for substantial restitution of soundness in the property or to allow the authority to buy back the property. However, the Minister knows that the dreadful straitjacket in which local government finance has been put over the past few years makes it difficult for authorities to contemplate properties. They have to pay 100 per cent. of the value and then put them right. The Minister in another place, Mr. Trippier, who has my respect for his knowledge in these matters, has been very assiduous over the years in trying to meet the problems.

I met many of these tenants. They came to a meeting which was held in June or July this year. I met a number of people who have been writing to me over the years. They left with me some photographs of Peterlee new town, which has many properties. There are many such areas all over the country. Indeed, in Mr. Tripper's constituency there are properties. I understand the problem.

The Building Research Institute has been given the brief in order to examine whether it can be said that the properties fall within the provisions of the Act. The definition of a defective dwelling under Section 528 of the Housing Act 1985 is a dwelling which is or forms part of a building but which is defective by means of design or construction. The reference to those two factors alone makes the case for and against. There is a grave suspicion that there is some form of management of the kinds of properties which are in and those which are out for political and financial purposes.

I want the Minister to take on board the fact that there are wretched people who in essence have been made wretched because they have been encouraged to buy their council properties by this Government as part of their policies. The lady who in the main has kept me fully advised is a Miss G. McCluskey of 44 Hatfield Place, Peterlee. She is the secretary of the Peterlee Council Home Purchasers' Association. She has provided me with lengthy correspondence. Her department and the Minister's civil servants will be well aware of the assiduous manner in which she has sought to represent her views and those of other people.

I should like the Minister to recognise the fact that there is real agony and despair in the minds of thousands of people. Further, to short-circuit what could lead to a lengthy to-ing and fro-ing across the Dispatch Boxes at this time of night, will he give serious consideration to receiving a small deputation of parliamentarians who will be representative of tenants in various parts of the country to see whether something further can be done in the matter?

I know that the Minister will tell Members of the Committee that building societies are beginning to break the backlog and that they are willing to give mortgages on certain properties where previously they were not willing to do so. But the dilemma for many people is that the councils which are involved are really strapped for cash. I therefore ask the Minister to consider what I am saying. I realise that there are problems as regards the amendment. I am not asking him to accept the deputation in order to produce legislation in this Bill; it may be that time is too short. However, if he can give me an undertaking that he is willing to listen to parliamentarians from this Chamber and from the other place who wish to plead the case so that something further can be done, that would ease my mind. I beg to move.

The Earl of Kinnoull

The noble Lord made a very important point. I hope that Members of the Committee will not feel in any way rushed when dealing with the matter because of the time of night. We must give this proper consideration. First, the amendment, as I understand it—although I have not followed all the arguments—indicates that through the Government's policies those who have bought properties from local government have suffered. However, I should have assumed that such people would take professional advice as to the condition of the property and that where it turned out to be defective they surely would have grounds for an action against the surveyor.

Secondly, in the amendment the noble Lord talks about the Government giving 100 per cent. towards the cost of repurchase. The repurchase of what? Is it the original price that the tenant paid or is it the price at which the district valuer now values the property having discovered the defect, which may be substantial and make a 25 per cent. difference? Can the noble Lord explain that point?

2.15 a.m.

Lord Graham of Edmonton

By all means. The problem is that when the properties were purchased from the council it was the council that said that the properties were satisfactory. The latent defects which emerged were not known by the industry. I am not talking about someone who, in a Machiavellian way, sold properties that he knew were defective. The defect emerged later. These are substantially concrete-based or steel-framed properties and the defects resulted from the effect of water on the metal. I do not blame anyone at that stage.

People bought properties for £10,000 or £12,000. The prices were low because they are in the North. Those people want to get out. They cannot sell the houses on the open market because people are afraid that there might be a latent problem, and the authority cannot repurchase them at 100 per cent. of the price because if it does it must provide some of its own money. It would then have a property that has to be put right. Building societies have been saying that they cannot lend people as much as they need because there is a risk.

The amendment is a peg which gives me the opportunity to draw the matter to the Minister's attention on behalf of the wretched people involved. I am happy to listen to the Minister and his advisers at 2 Marsham Street with a few parliamentarians from both Houses to see whether we can profitably spend some time. I am not trying to push the Minister into a corner. I realise all the pressures that exist. I do not want a decision before the Report stage. If the Minister would say that he is willing to receive a small deputation in the near future that would satisfy me.

Lord Reay

The noble Lord, Lord Graham of Edmonton, has introduced a wide-ranging amendment which I am sure he does not expect us to accept. It would extend the housing defects scheme of assistance in ways which would be totally inconsistent with the scheme's underlying purpose and objectives. The scheme is designed to deal with properties with specific fundamental and inherent defects of design or construction so serious that their values have been substantially reduced when this has become generally known.

A "cut-off" date is specified for each designated house type because that is when, in the Secretary of State's opinion, the fact that the houses were defective should have been generally known. Deleting all references to the "cut-off" date which is what the amendment does, would therefore breach the underlying principle that the scheme should help only those owners who could not have been expected to know that the property they were buying was defective and therefore paid a price not properly reflecting the problem.

We see no reason why central government should finance the whole cost to authorities of buying back eligible properties, which was another aspect of the amendment, since in many cases they are acquiring houses which will still have a useful life of perhaps 20 to 30 years without the need for major repair.

Where authorities have particular problems in meeting their house defects repurchase obligations we have done what we can to help through the housing investment programme. This April an extra £15 million was distributed to 75 local authorities with particular difficulties.

Finally, we also cannot accept the proposal in the amendment to make special financial arrangements to pay for the reinstatement of tenanted designated dwellings still in council ownership. Local authorities do not face the same immediate problems as private owners through the loss of value or loss of mortgageability. Most properties are usually quite safe to live in with no need for immediate action. Councils can therefore look at the need for future investment, whether in repair, improvement or renewal, within the context of their normal housing programmes.

I have listened carefully to everything that the noble Lord, Lord Graham of Edmonton, has said. I will read it the day after tomorrow and will draw it all to the attention of my right honourable friend the Minister, including his suggestion that he should receive a deputation. I guarantee to do that, although I cannot answer as to what the reply will be.

With regard to the question raised by my noble friend Lord Kinnoull, about the price at which local authorities repurchase defective houses as an alternative to paying a reinstatement grant, the answer is that the price is a defect-free price. A calculation is made of the market value if it did not have a defect, and 95 per cent. of that is paid to the vendor. I urge the Committee to reject the amendment.

Lord Graham of Edmonton

I am grateful to the Minister and I certainly do not want to press the amendment. In response to the noble Earl, Lord Kinnoull, this is the kind of dilemma that individuals have. That is what I am told by Miss McCluskey. The value to sell is reduced. As a result of such a survey, one house has been sold for cash for £7,000. The original discounted buying price was £11,000. They actually paid £11,000 for it. One assumes the property had a market value of £20,000, and because it was discounted they paid £11,000 and finally sold it for £7,000. There are other illustrations of that kind.

I think that the Minister has gone as far as he can. He will read the report of the debate carefully. The Minister said that he will draw to the attention of his ministerial colleague my rather strong request for parliamentary colleagues to have the opportunity of discussing with the Minister, or with one of the other Ministers here tonight, together with their advisers, to see whether they can find some other way to aid and assist these people who are in deep distress. I am grateful to the Minister for what he has said so far.

Perhaps I may say how sad my noble friend Lord Dormand of Easington must be not to be here this evening. He has had to go, but I know that he was deeply concerned. When on a previous occasion this matter was discussed he took a very prominent part because many people on whose behalf I have spoken tonight were his former constituents. He will certainly wish to be associated with everything I have said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 150 [Powers of local authorities and Secretary of State as respects services etc. for owners and occupiers of houses for work on them]:

Lord Ross of Newport moved Amendment No. 179: Page 135, leave out lines 37 to 39.

The noble Lord said: This amendment seeks to delete sub-paragraph (ii) from subsection (5)(b). To include this final sub-paragraph implies that there is a duty to obtain contributions and charges for these services, which is likely to undo all of the good that the clause itself is intended to do. The wish of the Government is amply given in the preceding clauses and this final emphasis on any eligible body to make charges for their services appears to be unreasonable.

This amendment comes from the National Home Improvement Council which is in an ideal position to comment on this particular clause. The NHIC, with support from the Department of the Environment, is operating some 30 neighbourhood revitalisation services schemes aimed at providing agency services in areas of run down housing stock. This is an experimental programme which, if properly applied, should make a major contribution to renewal areas and other designated areas of housing.

The NHIC has found that the onerous conditions relating to matching funding to provide these services is very restrictive. Unless the relevant authorities recognise that this type of agency services will require a public resource, they cannot make the contribution required of them in assisting those people living in areas of run down housing.

The wish of the Government to obtain payment for services when and wherever possible is abundantly clear throughout the Bill, and it is considered undesirable to re-emphasise this particular aspect which will only serve to restrict local authorities in providing agency services rather than to encourage them.

This minor amendment will in fact improve this clause, which the NHIC welcomes as the Government's intent to encourage agency services as and when required. It would be a pity if the Government's intentions were misinterpreted because of the over-restrictive legislation attached to relevant authorities to charge for all services. I beg to move.

Lord Hesketh

The effect of this amendment would be to remove the duty of a local authority, when considering whether to give financial assistance towards the cost of a housing association, charity or other body providing an agency service, to encourage that body to seek alternative sources of funding. It is not about encouraging them to make charges, although that of course is one possible source of funding. The duty to have regard to a body's charging policy and practice is provided by subsection 5(b)(i). The amendment would not therefore appear to meet the noble Lord's prime concern.

Regarding subsection (5)(b)(ii), we are merely seeking to ensure that bodies such as housing associations, charities or others wishing to provide the type of service for which Clause 150 is designed turn to their own parent organisation, for example, before they seek local authority funding. Even so, the working of the subsection makes clear that this is only in respect of measures that are reasonably available to them. We are not seeking unreasonable measures. That would be self-defeating.

How far is reasonable in the circumstances is something that we shall be discussing with parent organisations and others over the next few months and in the light of the monitoring research which the department has commissioned from the University of Bristol. They will be reporting on the pattern of funding of existing agency services; on the extent to which that funding affected the service they provided; and on the possibilities for other forms of resourcing such services. This will clearly be helpful to the department, local authorities and other bodies as they each consider the way forward.

I trust therefore that I have put the noble Lord's mind to rest on the charging question. We have an open mind on funding generally and there is nothing in the Bill—in particular in this clause—which closes the funding option. We are in discussion with the National Home Improvement Council about how it sees its own future as a funding body for agency services, and clearly we shall listen carefully to what it says. On that understanding I hope that I can persuade the noble Lord to withdraw his amendment.

Lord Ross of Newport

I thank the Minister for that response, which was a little more helpful than usual. There has not been too much glasnost and perestroika on that side of the Committee tonight. Old Gromyko is dead, you know. Sometimes we want an acceptance. However, the fact is that these words will appear in the Bill and unfortunately will probably be interpreted as I suggested when I moved the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 150 agreed to.

Lord Sanderson of Bowden moved Amendment No. 179ZA: After Clause 150, insert the following new clause:

("Powers of local authorities and Secretary of State as respects services, etc., for owners and occupiers of houses for work on them: Scotland.

.—(1) A relevant authority shall have power to provide professional, technical and administrative services for owners or occupiers of houses in connection with their arranging or carrying out relevant works or to encourage or facilitate the carrying out of such works, whether or not on payment of such charges as the authority may determine.

(2) Relevant works are such works as may be specified in regulations made by the Secretary of State and such works may be so specified by reference to such factors (including factors relating to persons of such descriptions as may be so specified) as the Secretary of State thinks fit.

(3) It shall be the duty of a relevant authority exercising any power conferred by subsection (1) above—

1. (a) to consider whether or not to make a charge for exercising it; and
2. (b) to take such measures as are reasonably available to them to secure contributions from other persons towards the cost of exercising it.

(4) A relevant authority shall have power to give financial assistance in any form to —

1. (a) any housing association,
2. (b) any charity, or
3. (c) any body, or body of any description, approved by the Secretary of State,

towards the cost of the provision by that association, charity or body of services of any description for owners or occupiers of houses in arranging works of maintenance, repair or improvement or the encouraging or facilitating the carrying out of such works.

(5) It shall be the duty of a relevant authority —

1. (a) in deciding whether to exercise any power conferred by subsection (4) above in relation to any association, charity or body, to have regard to the existence and extent of any financial assistance available from other persons to that association, charity or body;
2. (b) in exercising any power conferred by subsection (4) above in relation to any association, charity or body; and
3. (c) in exercising any power conferred by subsection (4) above in relation to any association, charity or body —
1. (i) to have regard to whether that association, charity or body has made or will make charges and their amount; and
2. (ii) to encourage the association, charity or body to take such measures as are reasonably available to them to secure contributions from other persons.

(6) The Secretary of State may, with the consent of the Treasury, give financial assistance in any form to any person in respect of expenditure incurred or to be incurred by that person in connection with the provision, whether or not by that person, of services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or in connection with the encouraging or facilitating, whether or not by that person, the carrying out of such works.

(7) The giving of financial assistance under subsection (6) above shall be on such terms (which may include terms as to repayment) as the Secretary of State, with the consent of the Treasury, considers appropriate.

(8) The person receiving assistance shall comply with the terms on which it is given and compliance may be enforced by the Secretary of State.

(9) In this section — charity" means any body, corporate or not, established for charitable purposes; charitable purposes" shall be construed in the same way as if it were contained in the Income Tax Acts; house" has the meaning given by section 338 of the Housing (Scotland) Act 1987; housing association" means a housing association within the meaning of section 1(1) of the Housing Associations Act 1985, or a body established by such a housing association for the purpose of, or having among its purposes or objects, those mentioned in section 4(3)(e) of that Act (providing services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works); relevant authority" means a regional, islands or district council.").

The noble Lord said: I beg to move Amendment No. 179ZA and I shall speak also to Amendment No. 190B. This amendment seeks to make broadly similar provision in Scotland to that agreed for England and Wales, enabling local authorities to provide services for owners or occupiers in arranging for, or encouraging, certain works to be undertaken in their homes. The works in question will be specified in regulations and will have regard to such factors as the category of person for whom the work is to be carried out.

In general, we expect to include works which will enable the elderly or disabled owner or occupier in the private sector to maintain his home at a reasonable standard of comfort and amenity. The authority will be able to impose a charge for its services should it so determine. The new clause will also allow the Secretary of State, with the consent of the Treasury, to give financial assistance to those providing services for owners or occupiers in arranging or carrying out works of maintenance, repair or improvement.

These provisions flow from the practice of local authorities and of the Secretary of State of giving financial assistance to help establish the care and repair advisory services for the elderly and disabled owner or occupier. These provisions will put the basis of such assistance on a clear footing and, as such, will be widely welcomed. I beg to move.

The Earl of Kinnoull

If the Opposition are not welcoming this amendment I should like to ask my noble friend whether there will be a limit on the charge that the local authority may make under the regulations that will be issued. I think that would be of interest because obviously those local authorities which do not wish to provide any services can quote a ridiculous charge. At the moment there does not appear to me to be any indication of a reasonable charge being made.

Lord Sanderson of Bowden

I believe that in the regulations which will be laid it will almost certainly be the case that there will be a limit on the charge.

On Question, amendment agreed to.

Clause 151 [Winding-up of home purchase assistance scheme]:

Lord Hesketh moved Amendment No. 179ZAA: Page 136, line 33, after ("above") insert ("together with any orders and directions made under those enactments").

The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 179ZAB. The first amendment simply clarifies the scope of Clause 151. It will ensure that all subordinate legislation (and the directions and notes of procedure which give details of the homeloan scheme) come within the scope of the Secretary of State's powers to end the homeloan scheme by order.

The second amendment will enable the Secretary of State to commute the payments or repayments which are made under the homeloan scheme. Commutation would be of practical benefit to the participating institutions as well as to the Secretary of State as it will shorten the period required for the close down of the scheme. Without it, this close down period would extend until at least 1998; that is, five years beyond the date of the last loan on 31st March 1993.

We feel it is pointless for sums of money to shuttle back and forth between the department and lending institutions once it can be calculated what the net effect would be. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 179ZAB: Page 136, line 39, leave out ("and") and insert — ("(aa) may vary the terms of advances to lending institutions so as to commute what would otherwise be a number of payments or repayments to or by such an institution into a single payment or a smaller number of payments of such amount and payable at such time or times as may be determined in accordance with the order; and").

On Question, amendment agreed to.

Clause 151, as amended, agreed to.

Clause 152 [Transfer of new town housing stock]:

Lord McIntosh of Haringey moved Amendment No. 179ZABZ: Page 137, line 39, at end insert — ("( ) that the proposed transfer takes account of the desires of tenants as expressed through the consultation;").

The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 179ZAC. Clause 152 is concerned with the transfer of new town housing stock. As the Committee will know, the existing situation is that new town housing stock is normally transferred from development corporations to local councils, or at least they have the first refusals on housing stock. The Government would really like to change this to transfer the stock to housing associations. We state in Amendment No. 179ZAC that that would give tenants only a fair rent and assured tenancies rather than present rent levels and secure tenancies. However, the Government have at the same time made a reference in this clause to consultation. Amendment No. 179ZABZ seeks that proper account should be taken of the desires of tenants as expressed through the consultation.

The difficulty the Government find themselves in, having agreed to consultation, is that almost inevitably where consultation takes place new town tenants prefer to go to local councils where they will obtain existing rents and secure tenancies. That is hardly surprising. The Government want consultation but do not like the result. I can give two examples of this in Wrekin and Peterborough. Although this position has lasted for five years in Wrekin there never has been any proper consultation. Originally there was going to be a ballot offering a choice between the Wrekin council and three housing associations. However, this never took place. In Peterborough tenants had overwhelmingly chosen the local council in the ballot. The result is that the Wrekin council has now started High Court proceedings against the Government for taking what appear to be preliminary steps to freeze it out.

In Amendment No. 179ZABZ we are asking that the consultation should take effect—in other words it should not be meaningless consultation—and that the proposed transfer should take proper account of the desires of tenants. In Amendment No. 179ZAC we are saying, as the tenants would undoubtedly wish if they were asked, that the transfer should retain all the existing rights of the tenants in the housing stock and does not include an increase in the rents payable by the tenants.

I do not know whether the noble Lord, Lord Hesketh, is famous for paying no account to political considerations, which was his claim this afternoon. However, if he wants to lose every vote in the new towns, some of which are marginal Conservative seats, to resist the amendments is a certain way of ensuring that the Conservatives are dented.

Lord Hesketh

I shall, as always, follow the advice of the noble Lord, Lord McIntosh, closely.

Amendment No. 179ZABZ would require the Secretary of State, before giving his consent to the transfer of new town housing, to be satisfied that the transfer took proper account of the tenants' wishes as expressed in the consultation. I can reassure the noble Lord that that is our clear intention. Clause 152(4) refers to the need for the Secretary of State to be satisfied with the arrangements for tenant consultation before his consent to the transfer can be given.

The Government will bring forward regulations which will include the detailed provisions for such tenant consultation. They will include a ballot in which we would expect tenants to be able to choose between the district council and a landlord approved by the Housing Corporation. Tenants would not be given the option of remaining with the new town corporation. It is our intention to honour the tenants' individual choice of the new landlord for their homes. However, if the council makes it known that it does not wish to acquire any of the new town housing, then our intention is that tenants should transfer to an approved landlord. Whether or not the council is involved, tenants would be given ample opportunity to pursue other options if they wished, such as setting up a housing co-operative. In all cases the tenants' wishes would be fully respected.

The Secretary of State will be issuing shortly a consultative document on this important topic which sets out in more detail the Government's proposals. A copy will be placed in the Library of both Houses.

Amendment No. 179ZAC, taken literally, would prevent an increase in tenants' rent, not only on transfer, but at any time in the future. Although I am sure that the noble Lord has the interests of these tenants as his main concern, as we have, I am equally sure that the amendment was not meant to be that generous.

However, even if the amendment were technically correct we could not accept it. The main reason is that to provide for the tenants to retain identical terms on rents and tenancy rights would not be consistent with the basic principles of the transfer proposals.

It is proposed that the tenants would be offered a choice between the local council and an approved landlord as the future owner of their homes. During tenant consultation, which will follow the valuation of the housing, the prospective landlords will be required to provide all the tenants with information on the terms of the tenancy, the services they could provide, the rents they would charge on transfer, and their policy on rental increases in the future. Tenants will then be able to vote for their preferred landlord, and their individual choice will be honoured.

Both prospective landlords must be allowed the freedom, however, to offer their own tenancy and rental terms to tenants, which will be related to their view of the implications for them of the purchase price of the housing. That element of competition will also be beneficial for the new town tenants because the prospective landlords will need to offer attractive terms to encourage the tenants to vote for them. It would negate the competitive factor to require the prospective landlords to offer the same terms as each other. It follows that the terms of a prospective landlord will not necessarily be the same as the tenants' current terms.

I have a slightly cryptic addition to those remarks. Wrekin District Council will be allowed to acquire new town housing in Telford. On the basis of what I have said I hope that the noble Lord, Lord McIntosh, will be able to withdraw his amendment.

Lord McIntosh of Haringey

The critical phrases which I snatched from that reply as it rushed past me with the speed of the Valkyrie was that the tenants' wishes would be respected and that the consultation would include a ballot and the tenants' choice would be honoured. If the remainder of the reply lives up to those phrases it looks as though the problems that have been experienced, particularly in Telford and with Wrekin District Council, may be approaching an end. We and they would be grateful for that.

I should like to read carefully what the Minister has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 179ZAC not moved.]

Clause 152 agreed to.

Clause 153 agreed to.

Lord Hesketh moved Amendment No. 179ZAD: After Clause 153, insert the following new clause:

("Payment of disposal cost by instalments.

.—(1) Part IV of the Housing Act 1988 (change of landlords: secure tenants) shall be amended in accordance with this section.

(2) At the end of section 99 (determination of purchase price) there shall be added the following subsections— (7) In a notice under subsection (1) above or by a separate notice given to the applicant not later than seven days after the date of a determination under subsection (6) above, the landlord may notify the applicant that if there is a disposal cost which is such that, in accordance with regulations under section 104(2A) below, it may be paid by instalments, the landlord intends to pay that cost by instalments. (8) Where the landlord notifies the applicant as mentioned in subsection (7) above, he shall furnish to the applicant, in such form and certified in such manner as may be prescribed, such information as may be prescribed in order to enable the applicant to consider the application of the regulations to the disposal cost and to assess the likely effect of the payment by instalments.

(3) In section 103 (notice by applicant of intention to proceed) in subsection (4), at the end of paragraph (d) the word "and" shall be omitted and at the end of paragraph (e) there shall be added "and (f) if there is a disposal cost attributable to that property and the landlord has notified the application as mentioned in section 99(7) above of his intention to pay the disposal cost by instalments, either a statement of the basis on which, in accordance with regulations under section 104(2A) below, the disposal cost is to be paid by instalments or a statement that the disposal cost is not such that those regulations permit it to be paid by instalments".

(4) In section 104 (duty to complete and consequences of completion) after subsection (2) there shall be inserted the following subsection — (2A) In such cases as may be prescribed and where the applicant has been notified as mentioned in section 99(7) above, a disposal cost may be paid by instalments of such amounts (which may include interest) and payable at such times and over such period as may be prescribed."").

The noble Lord said: In moving this amendment, I should like to speak also to Amendments Nos. 188QA, 188SA and 190EB.

Amendment No. 179ZAD will give help to local authorities which are faced with large "disposal costs" or negative prices on unrepaired housing stock transferring under tenants' choice. It will enable regulations to be made under which local authorities could pay disposal costs in instalments over several financial years.

Amendments Nos. 188QA and 190EB are technical amendments.

Amendment No. 188SA would bring the regulation-making power into force at Royal Assent.

I commend the amendments to the Committee as sound measures to enable local authorities and tenants' choice landlords to plan their future finances with greater confidence.

Lord McIntosh of Haringey

This amendment returns to an issue that we discussed on Monday night—the question of dowries. The government amendment states that, on a tenant's choice transfer, the local authority can choose to pay the dowry. I understand that the period will be for five years. That is the instalment period proposed in the amendment. Surely the Government are being forced to admit that, already, after a very short period—six months' experience—the original legislation was defective. We have discussed the question of the Walterton and Elgin estates in Westminster. The possible cost of the dowry here will be between £15 million and £50 million. Will Westminster City Council be given additional credit approval to fund the dowry? Moving on from that specific point, is it the case that, generally speaking, councils which are facing dowries will be given additional credit approval for that purpose?

Lord Hesketh

Perhaps the noble Lord, Lord McIntosh, will be so obliging as to allow me to write to him on the morrow so that I can provide an accurate answer to his question.

On Question, amendment agreed to.

Clause 154 agreed to.

Lord Sanderson of Bowden moved Amendment No. 179ZB: After Clause 154, insert the following new clause:

("Amendment of definition of occupation for purposes of purchase of house by secure tenant: Scotland.

. —(1) In section 61(10) of the Housing (Scotland) Act 1987 (definition of occupation of house for purposes of purchase by secure tenant) —

1. (a) in paragraph (a)(v) (occupation by member of tenant's family succeeding to tenancy may be treated, at discretion of landlord, as occupation for purposes of right to buy) the words "in the discretion of the landlord" shall be omitted; and
2. (b) in paragraph (b) (rules for determining period of occupation) there shall be added at the end — "and
• (iii) there shall be added to the period of occupation of a house by a joint tenant any earlier period during which he was at least 16 years of age and occupied the house as a member of the family of the tenant or of one or more of the joint tenants of the house.".

(2) This section does not apply in any case where the application to purchase the house under section 63(2) of that Act has been served before the coming into force of this section.").

The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 190C and 190HA. This group of amendments relates to the provisions dealing with the occupation and thus entitlement to purchase and discount entitlement under the right-to-buy legislation.

Amendment No. 179ZB falls to be considered in two parts. The first part seeks to remove the discretion afforded to landlords when calculating time spent in the home as a member of the tenant's family. At present time spent in the house by a child who has succeeded to the parent's tenancy automatically counts towards the child's discount entitlement and entitlement to purchase if he subsequently exercises the right to buy. That applies where the normal continuity arrangements are met. However, in respect of other members of the tenant's family —for example, a niece who eventually accedes to the aunt's tenancy —the landlord has a discretion to allow such periods to count towards the occupancy requirements and hence entitlement to discount. Many authorities do not allow such periods of occupation, regardless of the circumstances.

The second part of Amendment No. 179ZB seeks to protect the interests of members of the family who enter into a joint tenancy with an elderly relative. A number of authorities consider that discount entitlement flows only from the date on which the joint tenancy arrangements were instituted and does not take into account the period of residence prior to the joint tenancy. That is particularly hard in the case of a family member who has put on a formal basis, by means of a joint tenancy, the arrangements made by the family to look after the home. If no such formal arrangements had been drawn up, there would have been no barrier to claiming the full period of residence on succession to the tenancy. The amendment therefore seeks to recognise the position of family members in that situation. I beg to move.

On Question, amendment agreed to.

2.45 a.m.

Lord Sanderson of Bowden moved Amendment No. 179ZD: After Clause 154, insert the following new clause:

("Sale to secure tenants of houses provided for persons of pensionable age; Scotland

. —(1) Section 69 of the Housing (Scotland) Act 1987 (Secretary of State's power to authorise refusal to sell certain houses provided for persons of pensionable age) shall cease to have effect.

(2) Any application under subsection (2) of that section received by the Secretary of State before the date of commencement of this section but in respect of which no offer to sell under section 63 or notice of refusal under section 69(4) of that Act has been served by the landlord by that date shall be treated as if it had never been made.").

The noble Lord said: This amendment seeks to ensure that the Scottish position regarding exemption of housing for the elderly from the right to buy provisions will be the same as that now proposed for England and Wales.

Although there are certain differences at present in the detail of the provisions on either side of the Border regarding the exclusion of housing for the elderly from the right to buy, in general the broad policy intention is consistent. It seems sensible, therefore, to continue in that vein. I believe that it would be hard to justify to elderly tenants in Scotland occupying amenity housing a continued exclusion of such properties from the right to buy when no such restriction exists south of the Border. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 179ZBA: After Clause 154, insert the following new clause:

("Application of secure tenant's right to buy to cases where landlord is lessee: Scotland.

.—(1) In section 76 of the Housing (Scotland) Act 1987 (duty of landlords to provide information to secure tenants) —

1. (a) in subsection (1)(a) —
1. (i) for the word "not" there shall be substituted the word "neither"; and
2. (ii) after the word "house" there shall be inserted the words "nor holds the interest of the landlord under a registered lease of the house or of land which includes it";
2. (b) in subsection (2) for the words "heritable proprietor of the house" there shall be substituted the words "either the heritable proprietor of the house or the holder of the interest of the landlord under a registered lease of the house or of land which includes it; and
3. (c) in subsection (3Xb) at the end there shall be inserted the words "or a local authority is the holder of the interest of the landlord under a registered lease of the house or of land which includes it.".

(2) After section 84 of that Act there shall be inserted the following section —

"Application of right to buy to cases where landlord is lessee,

84A.—(1) Sections 61 to 84 (but not 76 or 77) and 216 (the "right to buy" provisions) shall, with the modifications set out in this section, apply so as to provide for —

1. (a) the acquisition by the tenant of a house let on a secure tenancy of the landlord's interest in the house as lessee 495 under a registered lease of the house or of land which includes it or as assignee of that interest; and
2. (b) the obtaining of a loan by the tenant in that connection,as these sections apply for the purposes of the purchase of a house by the tenant from the landlord as heritable proprietor of it and the obtaining by the tenant of a loan in that connection,

(2) References in the right to buy provisions to the purchase or sale of a house shall be construed respectively as references to the acquisition or disposal of the landlord's interest in the house by way of a registered assignation of that interest and cognate expressions shall be construed accordingly.

(3) The reference in section 61(2)(b) to the landlord's being the heritable proprietor of the house shall be construed as a reference to the landlord's being the holder of the interest of the lessee under a registered lease of the house or of land which includes it.

(4) References in the right to buy provisions to the market value of or price to be paid for a house shall be construed respectively as references to the market value of the landlord's interest in the house and to the price to be paid for acquiring that interest.

(5) References in section 64(1) to the tenant's enjoyment and use of a house as owner shall be construed as references to his enjoyment and use of it as assignee of the landlord's interest in the house.

(6) The reference in subsection (4) of section 64 to an option being offered to the landlord or to any other person to purchase the house in advance of its sale to a third party shall be construed as a reference to an option being offered to have the interest acquired by the tenant re-assigned to the landlord or assigned to the other person in advance of its being disposed of to a third party; and the references in subsections (5) and (9) of that section to an option to purchase shall be construed accordingly.

(7) In this section and section 76 — registered lease" means a lease —

1. (a) which is recorded in the general register of sasines; or
2. (b) in respect of which the interest of the lessee is registered in the Land Register of Scotland

under the Registration of Leases (Scotland) Act 1857; and registered assignation" means, in relation to such a lease, an assignation thereof which is so recorded or in respect of which the interest of the assignee has been so registered.").

The noble Lord said: This is an important amendment and one which I hope will find favour with the Committee.

The existing right to buy provisions in Part III of the Housing (Scotland) Act 1987 presuppose that the landlord is the heritable proprietor of the house concerned. However, a number of representations have been received from tenants whose landlords are not the heritable proprietors of the land in question but hold the ground under a lease. These leases are particularly prevalent in certain parts of Scotland such as Motherwell and Monklands district. In such cases the tenant cannot exercise any right to buy because his landlord is not the heritable proprietor as required by the 1987 Act.

The amendment before the Committee today seeks to remedy that position by giving the tenant a right to acquire his landlord's leasehold interest in the house he occupies. The right to buy arrangements contained in the 1987 Act are established procedures and this amendment therefore extends those procedures to what I might describe as the leasehold situation, making any necessary modifications to the terminology of the existing provisions. I beg to move.

The Earl of Balfour

There is one question that I should like to put to my noble friend. I am sorry that I was rather caught out and did not have a chance to look in detail at the Housing (Scotland) Act. However, what concerns me —and I may be wrong on this point —is the case which involves a tenant farmer. I ask the Committee to forgive me for quoting my own case, but I think it will make the matter a little clearer.

I am the life renter of a property held in trust, and on that property there are one or two tenant farms. The tenant farmer himself is officially the tenant of any of the farm cottages. At one time the average farmer needed two or three families to run his farm; nowadays he may have no more than one man working for him on the farm. I have allowed the man to let his cottages and I must say that I should not like such a sub-tenant to be permitted to buy his property.

Lord Sanderson of Bowden

Perhaps I may remind my noble friend that we are dealing here with the right to buy legislation as it concerns the Scottish scene. I do not think that that has anything to do with the situation relating to a tenant farmer on anyone's property.

The Earl of Balfour

I am most grateful for that reply.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 179ZC: After Clause 154, insert the following new clause:

("Amendment of powers of Scottish Homes to dispose of land.

.—(1) In section 2 of the Housing (Scotland) Act 1988 (which, amongst other things, enables Scottish Homes to dispose of land)—

1. (a) in subsection (2) (powers of Scottish Homes), after "(3)" there shall be inserted "and (3A";
2. (b) in subsection (3)(b)—
1. (i) after "above" there shall be inserted the words ", other than the power under paragraph (h) to dispose of land,"; and
2. (ii) for the word "with" where secondly occurring there shall be substituted the words "between it and";
3. (c) after subsection (3) there shall be inserted the following subsection —
• "(3A) The power conferred by subsection (2)(h) above upon Scottish Homes to dispose of land may be exercised only with the consent of the Secretary of State (which consent may be given in relation to particular cases or classes of case and may be made subject to conditions)."; and
4. (d) subsection (6) (certain land not to be disposed of, without consent, for less than best price) shall be omitted.").

The noble Lord said: This amendment will clarify the involvement of the Secretary of State in the disposal by Scottish Homes of land, which will generally be dwelling-houses inherited from SSHA on transfer to the new body set up by the Housing (Scotland) Act 1988.

By this amendment we shall ensure that the Secretary of State's consent is required before disposal can be undertaken. That consent can be given either in individual cases, or in more general classes of case. This will mean that Scottish Homes will be in the same position regarding disposals as are local authorities. I beg to move.

On Question, amendment agreed to.

Clause 155 agreed to.

Lord Sanderson of Bowden moved Amendment No. 179ZE: After Clause 155, insert the following new clause:

("Duty of landlord to inform secure tenant seeking to buy house about changes in law: Scotland.

. In section 76 of the Housing (Scotland) Act 1987 (duty of landlords to provide information to secure tenants) there shall be added at the end the following subsections — (4) Where—

1. (a) by way of any enactment (including an enactment made under this Act), any change is to be made in the law relating to the calculation of the price at which the tenant of a house is entitled under this Act to purchase it, being a change which does not come into force upon the passing or making of that enactment but which, when it does come into force, will affect the price of the house; and
2. (b) the house is one in respect of which an application to purchase has, in the period ending with the coming into force of the change, been served under section 63(1) and not withdrawn but no contract of sale of the house has been constituted under section 66(2);

the landlord shall, upon the passing or making of that enactment or, if later, upon the service of the application to purchase, forthwith give written notice to the tenant stating the nature of the change and how it will affect the price and suggesting that the tenant should seek appropriate advice. (5) For the purposes of subsection (4), a change in the law will affect the price of a house if, on the day if falls to be calculated under the law as changed, the price will be different from what it would have been that day had there been no such change.".").

The noble Lord said: This amendment seeks to place on landlords a duty to inform persons who have applied to purchase their homes under the right to buy legislation of changes in prospect but not yet brought into force in the provisions for calculating the selling price of a house under the right to buy legislation. The duty will relate only to those applications made up to the point of the change in question coming into force.

It is not the intention that landlords should give information about proposed changes where a contract of sale has already been completed. The duty will be simply to give written notice to a tenant who has applied to purchase his home explaining the proposed change and suggesting that the tenant should seek advice on the implication of the change. The landlord is not required to provide that advice. It will be for the tenant to obtain his own advice.

This amendment will enable tenants to consider whether to proceed with their application to purchase and, if so, price will be calculated in accordance with the provisions in force at the date of the service of the application; or whether to withdraw and reapply when the new price fixing provisions have taken effect. I do not believe that the new duty will prove onerous to landlords. I beg to move.

On Question, amendment agreed to.

Lord Graham of Edmonton moved Amendment No. 179ZF: After Clause 155, insert the following new clause:

("Amendment of s.35 of Housing Act 1988.

. In section 35 of the Housing Act 1988 (removal of special regimes for tenancies of housing associations etc) shall be amended as follows:

1. (a) In subsection (a4)(d) after the words "was a secure tenant" there shall be inserted "or a housing association tenant"
2. (b) In subsection (5) after the words "the interest of a landlord under a" there shall be inserted the words "housing association,"").

The noble Lord said: I beg to move the amendment standing in the name of my noble friend Lord McIntosh.

This is a new clause. The amendment seeks to amend the Housing Act 1988 in two ways. First, it seeks to ensure that where a person who was a licensee of a housing association in shared accommodation but had a fair rent moves to self-contained accommodation, he will be entitled to keep his fair rent and to have a secure tenancy. Secondly, it seeks to ensure that where a fully mutual co-op transfers its properties to a housing association, the co-op's fair rent tenants should be entitled to retain their fair rent and also have a secure tenancy.

The amendment to Section 35(4)(d) of the Housing Act 1988 deals with the case of licensees. Prior to the enactment of the 1988 Act, it was not generally possible for occupants of shared accommodation to be granted a tenancy, even where they had exclusive occupancy of one room. Therefore most occupants of shared accommodation were licensees but in many cases were also housing association tenants under the Rent Act 1977, thus entitling them to a fair rent set by the rent officer.

An anomaly has arisen under the 1988 Act where such licensees are ready to move on to self-contained accommodation provided by the same housing association. Under subsection (2)(b) of Section 35 of the 1988 Act they are entitled to retain their housing association tenancy and thus their fair rent, but because they did not have a secure tenancy with the housing association they are not entitled under subsection (4)(d) to a secure tenancy. Under paragraph 13(2) of Schedule 1 to the 1988 Act they cannot be granted an assured tenancy either. The proposed amendment to subsection 4(d) of Section 35 will enable a secure tenancy to be granted if the person transferring was previously a housing association tenant under the Rent Act 1977 of the same landlord.

The situation regarding the transfer of a fully mutual co-op's property to a housing association is dealt with by the amendment to Section 35(5) of the Housing Act 1988. Under the Housing Act 1985, only tenants of fully mutual co-ops which were not registered with the Housing Corporation enjoyed secure tenancies. Tenants of co-ops registered with the corporation did not enjoy security of tenure but were housing association tenants under the Rent Act 1977 and thus had a fair rent. If the landlord subsequently changes from the co-op to a housing association, the tenancy will continue and will be a fair rent tenancy but will have no security of tenure comparable to that of other tenants of the housing association. It can be terminated following four weeks' notice to quit.

Section 35(5) of the Housing Act 1988 allows a housing association taking over property from a private landlord with a sitting tenant with a protected or a statutory tenancy under the Rent Act 1977 to grant that tenant a secure tenancy. The proposed amendment to subsection (5) extends this ability to grant a secure tenancy to a housing association which takes over property owned by a fully mutual co-op and containing tenants who are housing association tenants under the Rent Act 1977. I beg to move.

The Earl of Caithness

The noble Lord has indicated in moving his amendment that the new status in certain cases should be that of a secure tenant. I have some sympathy with that view in the case of the tenants of a co-operative where there is already something of a parallel in the existing legislation for their being granted secure tenancy status when their homes are taken over by another registered association. The arguments in the other case are less well defined, but I am certainly prepared to consider the option put forward by the noble Lord, Lord Graham of Edmonton. This is, of course, a complex area and I should therefore like the opportunity to consider the details further.

Lord Graham of Edmonton

I am most grateful for that generous offer and the prospect of satisfaction. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton moved Amendment No. 179ZG: After Clause 155, insert the following new clause —

("Information for tenants of housing associations.

. In Part I of Schedule 6 to the Housing Act 1988 (amendments of the Housing Associations Act 1985) —

(a) after paragraph 1 there shall be added the following new paragraph —

"(1A) After Section 2A there shall be inserted the following section — Access to information for tenants of housing associations and housing trusts.

(2B) Schedule 1A shall apply to bodies within the meaning of Sections (1) and (2) above";

(b) after paragraph 26 there shall be added the following new paragraph —

"26A. Before Schedule 1 there shall be inserted the following schedule —

Housing Associations (Access to Information)

1. (a) Sections 100A-D of the Local Government Act 1972 and the equivalent Sections 50A-D of the Local Government (Scotland) Act 1973 (access to meetings and documents of certain authorities) shall apply, subject to paragraph 4 below, to meetings of housing associations as they apply to a principal council, but with the modifications stated in (b) and (c) below.

(b) The rights given by this Schedule are given only to the tenants and licensees of the housing association concerned, and the provisions of the said 1972 Act and the said 1973 Act shall be construed accordingly and any references in those Acts shall not apply to this Schedule.

(c) The proper officer for the purposes of Sections 100B, 100C and 100D of the 1972 Act (Sections 50B, 50C and 50D of the 1973 Act) shall be a person appointed for the purpose by the housing association.

2. Those sections of the 1972 Act and the 1973 Act shall apply also in relation to any committee or sub-committee appointed by a housing association to which this Schedule applies.

3. A housing association to which this Schedule applies shall maintain and keep at the offices of the housing association —

1. (a) a register containing the name and address of every member of the Board of Management of the housing association, and of every committee and sub-committee of the association; and
2. (b) a written summary of the rights of tenants:
1. (i) to attend meetings of the housing association and its committees and sub-committees, and
2. (ii) to inspect and copy, and be furnished with documents relating to such a housing association and its committees and sub-committees which are for the time being conferred by virtue of this Schedule;
3. (c) a schedule of all forthcoming meetings pursuant to sections 1 and 2 above which have been convened by the housing association, including time and place of the meeting;
4. (d) the register maintained by the housing association under sub-paragraph (a) above, the summary kept by it under sub-paragraph (b) above and the schedule kept by it under sub-paragraph (c) above shall be open to inspection by the tenants of the association at all reasonable hours and without payment at the offices of the association subject to section 4 below; and any tenant may, on payment of such a reasonable fee as the association may determine:
1. (a) make copies of or extracts from any such register, summary or schedule kept by it, and
2. (b) require the association to supply him before the end of the period of three days beginning with the day on which the request is made with a photographic copy of or extracts from any such register, summary or schedule.

4. (a) This paragraph applies to a housing association which:

1. (i) has less than 250 units in management, and
2. (ii) its office or principal office is not accessible to tenants of the association at all reasonable hours.

(b) An association which satisfies the criteria of sub-paragraph (a) above may, instead of complying with paragraph (a) of subsection 6 of section 100A (posting of notice of meeting) and subsections (1) and (3) of section 100B of the 1972 Act (sections 50A(6), 50B(1) and (3) of the 1973 Act —availability of agenda and reports), either:

1. (i) send the documents referred to in these subsections to the council of any district, Scottish district or London borough in which there are dwelling houses let by the association, and a council to whom such documents are sent under this subsection shall, on receipt of such documents make them available at its principal office for inspection at all reasonable hours, without charge, by tenants of the association; or
2. (ii) make the documents referred to in these subsections available in any other accessible place open at all reasonable hours, provided that tenants have been informed of these arrangements; or
3. (iii) make such other arrangements as the Secretary of State may determine by regulation after consultation with bodies representative of housing associations.

(c) Where an association satisfies the criteria of sub-paragraph (a) above, the documents referred to in sub-paragraph (d) of paragraph 3 above or subsection (1) of section 100C of the 1972 Act (section 50C of the 1973 Act) shall be taken as being open to inspection by tenants if arrangements exist for their production to tenants as soon as is reasonably practicable after the making of a request to inspect the documents.

5. In this Schedule 'Board of Management of the housing association' means the body of persons for the time being discharging the functions of running or managing the association and includes any 'Management Committee','Board of Trustees' or other body discharging those functions.

6. (a) The Secretary of State may by order make arrangements by which housing associations which are subject to paragraph 4 of this Schedule comply with their obligations under this Act.

(b) Any statutory instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament."").

The noble Lord said: This amendment stands in the name of my noble friend Lord McIntosh. The amendment seeks to reintroduce the provisions of the Housing Associations (Access to Information) Bill which was a Private Member's Bill introduced into the House of Commons in February this year. So far the Bill has failed to receive a Second Reading.

The Housing Associations (Access to Information) Bill —the provisions of which are contained in the amendment —received wide cross-party support when it was introduced in the House of Commons. Over 200 MPs from all political parties signed an Early Day Motion indicating support for the Bill's principles. The amendment, like the Bill, seeks to apply the access to information provisions of the Local Government Act 1972 whereby members of the public are entitled to attend and to receive reports of local authority council and committee meetings to housing associations. The proposed amendment to the 1972 Act would allow housing association tenants and licensees to attend meetings of committees and sub-committees of their association, to be informed of the dates of meetings and to obtain committee reports and background documents. The right to attend meetings and receive information would be restricted to tenants and licensees of the particular housing association and would not extend to the general public and the press, as with the local authority.

In common with the local authority provisions, confidential items could be excluded by resolution from discussion in the open part of the meeting and the reports and background papers relating to such items would not be available either. Thus, for example, items relating to individual tenants or members or staff, estimates of housing scheme costs or details of tenders received would not be discussed in public, nor would documents relating to such items be available.

Although the National Federation of Housing Associations did not sponsor the original Bill, it supports its principles and has been involved in discussions to ensure that the proposals would be both workable for housing associations, particularly small ones, and would not impose an undue burden on them.

I am advised that while the Government blocked the original Private Member's Bill in the House of Commons, they indicated that they were sympathetic to its aims and they have asked the Housing Corporation to investigate ways of implementing the proposals administratively. It is against that prospect and with the hope that the Minister might be able to say something helpful again, for the second time in succession, that I move the amendment.

3 a.m.

The Earl of Caithness

I am always willing to be helpful to the noble Lord, Lord Graham of Edmonton, if I can. I am happy to tell him that the broad intentions behind this amendment are not unwelcome. Indeed given the policy of entrusting much of the responsibility for the future provision of social rented housing to the hands of the housing association movement, it is right that associations should more than ever before observe the principles of openness and accountability to their tenants.

However, I do not think that this amendment is the best way of achieving the desired result. In particular, the Government do not consider it necessary or desirable to impose a complicated piece of primary legislation on the housing association movement in order to promote the principles of openness and accountability.

Housing associations come in many shapes and sizes, and it would be extremely difficult to take account satisfactorily of all the very wide differences between them in primary legislation. This amendment, despite its attempts in paragraph (4) of the proposed schedule, fails in this task. There would be very real difficulties if the amendment was to be accepted —with the many small associations run by a few volunteers, finding the extra demands costly and burdensome. And because housing associations are voluntary organisations, with committees formed from volunteers, there is a real risk that, in some cases, existing and potential members will be deterred from serving at all. I am sure that the noble Lord would not want that to happen.

The Government have already proposed and are implementing a more effective but flexible way of encouraging openness in the housing association movement. As a result of Section 49 of the Housing Act 1988 which the noble Lord will remember discussing, powers already exist for guidance to be issued to registered housing associations in this field. Indeed in England the Housing Corporation is currently working on fresh guidance to associations on wider accountability, taking account of the differences among associations. I hope I have demonstrated that our doubts relate not to the good intentions of the amendment, which we share, but to-its necessity.

Lord Graham of Edmonton

I am grateful to the Minister. He would expect me to read what he said, to take advice, not least from the National Federation of Housing Associations, and 1 may come back to this matter at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 179ZH had been withdrawn from the Marshalled List.]

[Amendments Nos. 179ZHZ and 179ZHY not moved.]

The Earl of Caithness moved Amendment No. 179ZJ: Before Clause 156, insert the following new clause: —

("Power to monitor activities of registered housing associations.

. In Part I of the Housing Associations Act 1985 (regulation of housing associations) after section 27 there shall be inserted the following section —

"Power of Corporation to monitor associations.

27A. —(1) If at any time required to do so by the Corporation, —

1. (a) a registered housing association shall produce to a person authorised in that behalf by the Corporation such 503 books, accounts and other documents relating to the association's business as may be specified by the Corporation; and
2. (b) any officer, employee or member of the committee of the registered housing association shall provide an explanation of any such books, accounts and other documents.

(2) Where, by virtue of subsection (1), any books, accounts or other documents are produced to a person authorised in that behalf by the Corporation, he may take copies of or make extracts from them.

(3) In the application of this section to a registered housing association which is a charity, —

1. (a) the reference in subsection (1)(a) to the association's business shall be construed as a reference to its housing activities; and
2. (b) the reference to a member of the committee includes a reference to a trustee of the association." ").

The noble Earl said: I shall also speak to Amendments Nos. 188ZB and 190DA. This amendment has been brought forward to clarify the detailed powers of the housing corporation in relation to its general statutory duty to supervise and monitor the conduct and management of registered housing associations.

At present, there is no specific statutory provision encompassing this important aspect of the corporation's work. The amendment together with the two consequential amendments will give this activity the specific recognition which it warrants, and I commend it to the Committee.

Lord Dean of Beswick

Obviously the spirit of the amendment moved by the Minister is acceptable. As the Minister indicated, the amendment plugs a gap in the monitoring power of the Housing Corporation in that as the law stands at present it is only able to require the production of documents when conducting an inquiry into the affairs of a registered housing association.

Speaking on the advice of the National Federation of Housing Associations, which says that while, in general, it has no objection to this provision, it would seem reasonable that unless there is good reason for the corporation suspecting misconduct, then reasonable notice of seven days should be given to the corporation. I believe that is a reasonable request, and my own view is that that suspected misconduct should be serious before such action is taken. I should like to hear the Minister on that observation.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 179A: Before Clause 156, insert the following new clause:

("Extension of powers of Housing Corporation and Housing for Wales to give financial assistance.

. For section 87 of the Housing Associations Act 1985 (grants towards expenses in promoting or assisting registered housing associations) there shall be substituted the following section —

"Financial assistance with respect to formation, management, etc., of certain housing associations.

87. —(1) The Corporation may give financial assistance to any person in respect of the following activities —

1. (a) promoting and giving advice on the formation of registered housing associations and co-operative housing associations (in this section referred to collectively as "relevant associations");
504
2. (b) managing, providing services for, and giving advice on the running of, relevant associations; and
3. (c) assisting tenants and licensees of a relevant association to take part in the management of the association or of some or all of the dwellings provided by the association.

(2) Assistance under this section may be in the form of grants, loans, guarantees or incurring expenditure for the benefit of the person assisted or in such other way as the Corporation considers appropriate, except that the Corporation may not, in giving any form of financial assistance, purchase loan or share capital in a company.

(3) With respect to financial assistance under this section, the following—

1. (a) the procedure to be followed in relation to applications for assistance,
2. (b) the circumstances in which assistance is or is not to be given,
3. (c) the method for calculating, and any limitations on, the amount of assistance, and
4. (d) the manner in which, and the time or times at which, assistance is to be given,

shall be such as may be specified by the Corporation, acting in accordance with such principles as it may from time to time determine.

(4) In giving assistance under this section, the Corporation may provide that the assistance is conditional upon compliance by the person to whom the assistance is given with such conditions as it may specify.

(5) Where assistance under this section is given in the form of a grant, subsections (1), (2) and (7) to (9) of section 52 of the Housing Act 1988 (recovery, etc. of grants) shall apply as they apply in relation to a grant to which that section applies, but with the substitution, for any reference in those subsections to the registered housing association to which the grant has been given, of a reference to the person to whom assistance is given under this section.

(6) Section 53 of the Housing Act 1988 (determinations under Part II) shall apply in relation to a determination under this section as it applies to a determination under sections 50 to 52 of that Act."").

The noble Earl said: This amendment stems directly from the findings of a committee set up in 1988 by the then Minister of Housing to review housing co-operatives in England. The committee reported its findings and made recommendations in June of this year. The Committee will recall that I welcomed the report on behalf of the Government and was pleased to accept all of the review committee's recommendations. Indeed, I met the noble Lord, Lord Graham, on this matter.

This amendment allows the Housing Corporation to provide assistance in the form of grants and, in other ways, to existing and intending housing association tenants who wish to set up a local management initiative or another type of tenant participation model as suggested by the review. It also brings the general regime for grants under Section 87 more closely into line with arrangements for grants by the Housing Corporation for associations under Section 50 of the Housing Act 1988.

The grant system proposed not only matches that which is to operate in local authority stock, but it places resources in the hands of housing association tenants for them to select the secondary agent best placed and qualified to help them to develop their participation initiative. The Housing Corporation is now developing their new grant arrangements in close consultation with the Department of the Environment. They propose to embark shortly on a consultation exercise about their proposals with interested parties. I beg to move.

Lord Dean of Beswick

Perhaps I may make the following observation. Once again I am speaking on behalf of the National Federation of Housing Associations. In principle, the federation can see little problem with the proposal for the extension of Section 87 but would welcome, if possible, the Government's assurance that the word "person" includes organisations in this context.

The Earl of Caithness

Yes it does.

Lord Dean of Beswick

I am grateful for that answer as, I am sure, will be the federation.

On Question, amendment agreed to.

Clause 156 agreed to.

Lord Sanderson of Bowden moved Amendment No. 179B: After Clause 156, insert the following new clause:

("Publication of reports of Controller of Audit: Scotland.

. In section 102 of the Local Government (Scotland) Act 1973 (reports to Commission for Local Authority accounts by Controller of Audit —

1. (a) in subsections (1) and (2) there shall, in each case, be added at the end the words "and may send a copy of any report so made to any other person he thinks fit"; and
2. (b) after subsection (2) there shall be inserted the following subsection —

"(2A) A local authority shall, forthwith upon their receiving a copy of a report sent to them under subsection (1) or (2) above, supply a copy of that copy report to each member of the authority and make additional copies available for public inspection.".").

The noble Lord said: In moving this amendment, I speak also to Amendment No. 188AB. This amendment is designed to ensure that reports prepared by the Controller of Audit in Scotland under Section 102(1) and (2) of the Local Government (Scotland) Act 1973 can be put in the public domain if he judges it appropriate. In addition, the amendment requires local authorities in receipt of a Controller of Audit report to forthwith pass a copy to each of their elected members and to make additional copies available for public inspection.

To accommodate this amendment it is necessary to make a minor change to the title of the Bill —to make specific reference to an amendment to Section 102 of the Local Government (Scotland) Act 1973 —and to add a reference to the new clause in Clause 164 in respect of commencement and extent in the application of the Bill to Scotland. I beg to move.

On Question, amendment agreed to.

Clause 157 [Security of tenure on ending of long residential tenancies]:

The Chairman of Committees

I now call Amendment No. 159C. If this amendment is agreed to I cannot call Amendment No. 179D.

Lord Hesketh moved Amendment No. 179C: Page 143, line 16, leave out from ("tenancy") to ("then") in line 20 and insert—

1. ("(a) is in existence on 15th January 1999, and
2. (b) does not fall within subsection (2) above, and
506
3. (c)immediately before that date was, or was deemed to be, a long tenancy at a low rent for the purposes of Part I of the Landlord and Tenant Act 1954").

The noble Lord said: In moving this amendment, I speak also to Amendments Nos. 179E, 179P, 180B, 182C, 185A, 185ZB, 185C, 188CA, 188DA and Amendment No. 179D. These amendments are concerned with the provisions in the Bill which establish a new regime of statutory security for tenants at the end of long residential tenancies. All except No. 179D are government amendments designed to remedy defects in the provisions as they currently stand. In particular, No. 179P inserts a new Schedule 9 in place of the existing one. Amendment No. 179D is an Opposition amendment which would defer —from 1999 to 2019 —the date at which the new regime applies to long tenancies in existence prior to commencement of Clause 157.

We are concerned here with the basis on which a tenant under a long residential tenancy —that is, one of over 21 years —may remain in his home when the long tenancy comes to an end. As the Committee may be aware, the position of such tenants is at present governed by the provisions in Part I of the Landlord and Tenant Act 1954. Under these provisions, the tenant can normally remain in occupation as a statutory tenant under the Rent Act 1977. It would in our view be a total nonsense to perpetuate this regime, given the changes which have been brought in under the Housing Act 1988.

Accordingly, Clause 157 and Schedule 9 together establish a new regime —replacing that in the 1954 Act —under which a tenant whose long tenancy comes to an end will normally be entitled to remain in the property under an assured tenancy at a market rent. The new regime will apply, first, to new long tenancies created after commencement of the clause and, second, to existing long tenancies which are brought to an end on or after 15th January 1999; in other words, 10 years after commencement of the new assured tenancy regime under the 1988 Act.

The government amendments standing in my name involve a complex area of law. The creation of the new security regime has involved a major drafting exercise which we were unfortunately unable to complete prior to the Bill's introduction in another place. Consequently, the provisions as printed are defective in a number of respects. My right honourable friend the then Parliamentary Under-Secretary therefore gave an undertaking that we would take action to remedy the defects and these amendments are designed to honour that commitment.

The bulk of the additional work has been to Schedule 9, which set out how the new regime will operate. Rather than come forward with a host of separate amendments, we concluded that the most helpful course would be simply to withdraw the existing schedule and substitute a new one. This enables the Committee to see how the amended schedule will look and thus how the system will operate. The approach is modelled closely on that in the 1954 Act. Given the lateness of the hour, I do not propose to go into the details unless Members of the Committee wish me to do so.

We are in no doubt that it is right to modify the security regime applying at the end of long tenancies on the lines we are proposing. We are confident that the approach enshrined in the Bill —as amended by the government amendments —will ensure a fair deal for the landlord, while at the same time providing genuine safeguards for the tenant. We believe that the 10-year transitional period is adequate to protect the position of existing tenants. I therefore commend the amendments to the Committee. I beg to move.

Lord McIntosh of Haringey

The Government will not be surprised to learn that we are very unhappy with the effect of Amendment No. 179C in that it would rule out the possibility of our moving Amendment No. 179D. In his speech the Minister referred to a transitional period. It is not really a transitional period in that sense because this is retrospective legislation. What we are concerned about is people who started their existing long leases at a low rent before the new legislation came into effect on 15th January this year. I give as an example a widow aged 60 who in 1985 buys a lease with 20 years to run. Twenty years later she will be 80 and it is still quite likely that she will require the property.

The way the legislation is framed she will lose her rights after 15th January 1999 and the last five or six years of her lease will no longer be protected as they would otherwise have been. Yet the lease started before the legislation was enacted. We do not believe that that retrospective legislation is just and we do not think that agreements entered into in good faith before the Act should be changed in this way.

The choice of the date 2019 is simply to allow 30 years after the original date of implementation of the new Act. We cannot conceive that there will be any significant number of agreements that will have longer to run than that. We do not think that anyone who has entered into an agreement before the enactment should suddenly find that the conditions of the long lease have been altered. Even though I cannot move the amendment I hope the Minister will consider whether there is not some justice in the case.

Lord Hesketh

It is a very late hour. I shall read with care and attention what the noble Lord, Lord McIntosh, has said concerning Amendment No. 179D.

3.15 a.m.

Lord Coleraine

My noble friend has kindly said that he would answer any points that arise on Schedule 9 and the new introductions by the Government. My questions are directed to ascertaining to what extent, if at all, the provisions of Schedule 9 affect 1954 Act leases which have well and truly expired and gone into the continuance period before 15th January 1999. Can the Minister explain the significance of a tenancy which is deemed to be a long tenancy in Clause 157(3)? Are these tenancies deemed to be long tenancies to be found in the 1954 Act?

Clause 157(3) first presupposes a 1954 Act long tenancy in existence on 15th January 1999: then Section 1 of the 1954 Act will cease to apply unless before 15th January 1999 the landlord has served notice under Section 4 of the 1954 Act to terminate the long tenancy before 15th January 1999. But Section 4 of the 1954 Act provides that the date of termination of a long tenancy must be after its term date. Can my noble friend explain, given the provisions I have quoted, how the date of termination of a 1954 Act long tenancy can be before 15th January 1999 for the purposes of Clause 157(3) when the clause postulates that the long tenancy in question will be still in existence, whatever that may mean, on 15th January 1999?

My third question stems from paragraph 3(2) of the new schedule. Can my noble friend explain how this sub-paragraph affects the 1954 Act leases which come to an end before 15th January 1999? This seems at first reading to be inconsistent with the provisions of Clause 157(3), which appear only to subject leases in existence on 15th January 1999 to the schedule. Is a 1954 Act long tenancy which came to an end before 15th January 1999 a long residential tenancy —one to which the schedule applies —so that it can be terminated by the landlord under paragraph 4 if he can establish the appropriate ground for terminating a long residential tenancy under paragraph 5? If so, are there any further consequences of paragraph 3(2)?

For example, the landlord's notice to terminate a long residential tenancy does not have effect unless —this is one of two alternatives —it proposes an assured tenancy. Do this and the succeeding paragraphs in the schedule have the effect that a lease which has expired before 15th January 1999 but continues under Section 3 of the 1954 Act may be converted by the landlord to an assured tenancy under paragraph 3(2) of the schedule? If not, can my noble friend explain what is the purpose and effect of this sub-paragraph?

I do not propose to say very much this evening about the amendments which are grouped together. I am sorry that the noble Lord, Lord McIntosh, is unable to move his amendment. I should like to see this clause removed from the Bill. However, I shall not pursue the matter now save to say that I should be happy to accept the amendment which the noble Lord intended to move.

The clause does not take effect for over nine years; therefore, it seems to me that during this period it will only add to the problems faced by flat owners. I put it to my noble friend that this is really unnecessary legislation and that any change in the rights of flat owners should form part of the comprehensive reorganisation of leasehold law for which many of us have been waiting for a long time.

Lord Hesketh

Perhaps I should say a few words here about the application of the regime to existing tenancies since it is, I know, an aspect which has attracted some concern —not least from my noble friend Lord Coleraine. This is indeed an issue about which we ourselves thought long and hard in preparing our proposals.

As I have said, as things stand existing tenants would ordinarily expect to qualify for a Rent Act tenancy on termination of their long tenancy. We could, it is true, have taken the view that all such tenants should be altogether excluded from the new regime. But bearing in mind that we are dealing with tenancies which can run for 99 years —or even 999 years —a total exclusion would have meant permitting the creation of new Rent Act tenancies on a virtually indefinite basis. This is not an option we would prefer.

On the other hand, we do entirely accept the need to safeguard the position of those who have bought long tenancies with only a few years to run in the expectation of qualifying for a Rent Act tenancy at the end and who have paid a price which reflects that expectation. We therefore decided that the right solution was to allow a transitional period of finite duration within which tenants whose tenancies are terminated will continue to qualify for Rent Act tenancies on the same basis as now.

How long the transitional period should be is obviously a matter of judgment. But it seemed to us that 10 years from the date of introduction of the assured tenancy regime will be sufficient to safeguard the position of those who are expecting to become Rent Act tenants within the near future and have planned their finances on that assumption. Tenants who are not covered by the transitional provision should have adequate time to adjust to the new situation and make their arrangements accordingly.

Further, my noble friend Lord Coleraine asked some probing and extremely interesting technical questions. I hope that he will accept my offer to respond to him wholeheartedly in print tomorrow.

Lord Coleraine

Yes.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 179E: Page 143, leave out lines 39 to 44 and insert — ("(6) Where, by virtue of subsection (3) above, Schedule 9 to this Act applies to a tenancy which is not a long tenancy at a low rent as defined in that Schedule, it shall be deemed to be such a tenancy for the purposes of that Schedule.").

On Question, amendment agreed to.

Clause 157, as amended, agreed to.

Lord McIntosh of Haringey moved Amendment No. 179F: After Clause 157, insert the following new clause:

("Requirement to give written notice.

.In section 21 of the Housing Act 1988, in subsection (1)(b) after the word "months" there shall be inserted "written").

The noble Lord said: In moving Amendment No. 179F I should like to speak also to Amendments Nos. 179G and 179H. These are all amendments relating to the provisions of the Housing Act 1988 on assured shorthold tenancies. Noble Lords may recall that a good deal of concern was expressed about the provisions of this part of the legislation when the Bill was before this Chamber.

Amendment No. 179F provides that where a landlord wants possession at the end of a fixed term shorthold assured tenancy he has to give written and not merely oral notice. That seems common sense and justice.

Amendment No. 179G provides that where a landlord wants possession from an assured shorthold tenant, the notice requiring possession must be given to the tenant at least two months before court proceedings can be started; must inform the tenant that he can only be legally evicted by court order: that the landlord can only go to the court after the notice has run out; and that the tenant can obtain advice from a CAB, a law centre, a housing aid centre or a private solicitor under the legal aid scheme. Again, that is not an unusual provision for tenants' rights, particularly for tenants who have this difficult form of tenure.

Amendment No. 179H provides that even if a tenant is excluded from the Protection from Eviction Act —that is, the landlord is entitled to evict the tenant without obtaining a court order once the tenancy is ended —the notice to quit must be in writing, must tell the tenant that he cannot be lawfully evicted until the notice has ended, and must tell the tenant about his rights and where advice can be obtained.

None of those requirements creates any difficulties for the good landlord, but they ensure that when an assured shorthold tenancy comes to an end those landlords who might be tempted to cut corners cannot do so. I beg to move.

Lord Hesketh

These amendments seek to complicate the duty of the landlord to give notice to a tenant in circumstances where the tenant has limited rights. Amendments Nos. 179F and 179G deal with the shorthold tenant who entered into an agreement having been served a notice telling him it was a shorthold tenancy of a certain duration, The tenant knew then that at the expiry of the initial fixed term, or at some point afterwards, the landlord would have to give him at least two months' notice that he required possession. So when he gets the notice it is only what he should expect.

If he has breached one of the terms of the tenancy before the expiry of the fixed term, the landlord will serve the appropriate notice and that notice will tell him to get advice; but if the only reason for getting possession is that the fixed term has elapsed, the tenant has no long-term security. I should say that the provision in Amendment No. 179G preventing a landlord from applying for a possession order before the notice has expired is contrary to our intentions in the 1988 Act. A landlord may apply to the court as soon as he has served notice, though if the court hearing were to take place before the notice had elapsed the possession order could not take effect until the notice had expired. While any landlord would be well advised to serve notice in writing, we see no need to make it a statutory requirement.

Similarly, an excluded tenant under the 1988 Act has little security of tenure. If we were to adopt Amendment No. 179J, the landlord would have to serve a complicated notice and if he failed could find the tenant he thought he had got rid of had redress against him. It would be a trap for landlords.

A landlord is not exempt from giving notice. The landlord of an excluded tenant must fulfil the common law notice requirement.

We feel that there is no need for the amendment. I hope that the noble Lord will feel able to withdraw it.

Lord McIntosh of Haringey

I did not speak to Amendment No. 179J. It was not part of the group and I was not proposing to move it. However, I was interested to hear the Minister's reply to an amendment which has not been spoken to.

When the Minister referred to the amendments to which I have spoken (Amendments Nos. 179F, 179G and 179H) he confirmed the worst fears that we had at the time of the passage of the Housing Bill 1988. It is increasingly clear that the fixed term assured shorthold tenancy is in danger of becoming a charter for bad landlords, an alternative to a proper tenancy agreement, and of putting a large number of tenants, who do not want a fixed term shorthold tenancy but some security, at substantial risk. It is far too late to divide the Committee. This is a matter to which I shall return at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 179G to 179L not moved.]

3.30 a.m.

Lord Dean of Beswick moved Amendment No. 179M: After Clause 157, insert the following new clause:

("Limitation on increases of rent under assured periodic tenancies.

. In section 13 of the Housing Act 1988 in subsection (1)(b) there shall be deleted the words "will or may be greater than the rent for an earlier period" and there shall be substituted therefor "may be increased to a level which does not exceed twice the amount of the rent at the commencement of the tenancy"").

The noble Lord said: The object of this amendment is to ensure that landlords cannot draft rent review clauses allowing massive increases in rent which have no commercial purpose other than to force the tenant to leave. This amendment is to protect the tenant from rapid increase being enforced which would make the occupation of the premises totally financially unsound and force him to leave. I beg to move.

Lord Hesketh

Under the grouping, Amendment No. 188D is also included. Is the noble Lord, Lord Dean, speaking to that?

Lord McIntosh of Haringey

That is a Government amendment.

Lord Hesketh

These amendments are directed at Section 13 of the Housing Act 1988, which establishes the statutory procedure for increasing the rent under an assured periodic tenancy. As it stands, the procedure (involving a right of access to the rent assessment committee) applies to assured periodic tenancies, other than those for which there is provision in the tenancy agreement itself for increasing the rent. The effect of Amendment No. 179M would be to narrow the exclusion so that the statutory procedure was available in a case where the contractual provision allowed the initial rent to be more than doubled. The effect of Amendment No. 188D would be to extend the statutory procedure to all assured periodic tenancies.

Lord McIntosh of Haringey

The Minister will forgive me. The amendment grouped with this is No. 188DD, not 188D; in other words, the amendment in the name of the noble Lord, Lord Ross, not a Government amendment.

Lord Hesketh

I am very grateful to the noble Lord, Lord McIntosh, for correcting me on that point. I was particularly grateful earlier in the day, when the noble Lord, whose eyesight was particularly good, discovered a duplication in amendment numbers somewhat further back which we had already passed.

Lord McIntosh of Haringey

I should be glad to expound at length on the way in which the numbers of the amendments that we have been dealing with over the past few days have been not in accordance with the somewhat convoluted, but nevertheless previously perfect logic adopted by the Public Bill Office. We have been caused a great deal of difficulty by the numbering of the amendments.

Lord Hesketh

Perhaps we have had the occasional hiccup on this side of the Dispatch Box as well.

With these amendments we turn to an issue that we discussed at some length last year, when the Government's proposals for deregulating private sector lettings were before your Lordships' House. Those proposals have, of course, now been put into effect under Part I of the 1988 Housing Act.

In framing the new assured tenancy regime, we took the very firm view that the rent must be first and foremost a matter for free negotiation and agreement between the landlord and tenant, with statutory rent fixing procedures being reserved only for those cases where it was genuinely needed. We saw this as an essential and entirely proper feature of the free market principle which we wanted to apply to the private rented sector.

Hence we provided in the legislation that in creating an assured tenancy the landlord and tenant are free to agree not only the initial rent but also, if they wish, a contractual provision for reviewing the rent at subsequent intervals during the tenancy. Where they do agree on such a mechanism, that is then binding on both parties, with no provision for it to be overridden by any statutory provision.

We remain firm in our conviction that deregulation represents the effective way of reviving private renting. Although it is of course too early to draw conclusions as to the impact of the 1988 Act, there are a number of indications that it is going to achieve the desired objective of stimulating investment in good quality rented housing. To start modifying the statutory regime now in place would inevitably mean, we believe, jeopardising that success, which is why we resist the amendments.

Lord Dean of Beswick

I do not want to detain the Committee; but it is obvious from the Minister's answer that a chasm still divides the two sides as to what we desire in giving fair protection to the tenant involved. As my noble friend and colleague Lord McIntosh indicated on a previous amendment dealing with this subject, we shall be returning to this at Report stage, proceeding on the same basis as this one. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dean of Beswick moved Amendment No. 179N: After Clause 157, insert the following new clause:

("Democratisation of the Housing Corporation.

—(1) The Housing Act 1988 shall be amended as follows.

(2) In section 59 after subsection (2)(d) there shall be inserted the following paragraph —

(e) amending the membership of the Housing Corporation)")

(3) After paragraph 31(1) of Schedule 6 there shall be inserted the following sub-paragraphs — (1A) Notwithstanding the other provisions of this Part, the Corporation shall include: —

1. (a) a person or persons representative of housing associations;
2. (b) a person or persons representative of the tenants of housing associations;
3. (c) a person or persons representative of local housing authorities; and
4. (d) a person or persons representative of the tenants of local housing authorities.

(1B) The Secretary of State shall make regulations for the purpose of the selection of such persons as are mentioned in paragraph 31(1A) above."").

The noble Lord said: This amendment deals with the question of the people who will be manning the positions on the Housing Corporation. Of course the amendment quantifies that among those persons would be: a person or persons representative of housing associations; a person or persons representative of the tenants of housing associations; a person or persons representative of local housing authorities; and a person or persons representative of the tenants of local housing authorities. The Secretary of State shall make regulations for the purpose of the selection of such persons as are mentioned in paragraph 31(1A)".

This new clause amends Section 59 of and Schedule 6 to the Housing Act 1988 and the relevant provisions of the Housing Associations Act 1985. It has the effect of democratising the Housing Corporation by stating that its membership should include representatives from the above parties that I have quoted. The present situation is that the Secretary of State has a discretion to appoint members of the Housing Corporation. The maximum number of members is 15. The only condition that applies to the appointment is that the Secretary of State must satisfy himself that the person has no financial or other interest that is likely prejudicially to affect the exercise of his or her functions as a member.

There are at present 11 members of the board. Two of them were formerly senior civil servants at the Department of the Environment. Two members are currently involved in banking and two in building societies. Four members are involved in the housing association movement. There is at present no member with any local authority expertise, and no tenant representation from either housing associations or local authorities.

The prime functions of the Housing Corporation are to channel funds to housing associations and to monitor their activities. The Housing Act 1988 gave the Housing Corporation a major new role in assessing the capabilities and monitoring the activities of landlords who want to take over estates. They also have a role in advising tenants on applications under tenants' choice.

Housing associations own and manage an increasing proportion of public sector housing, and one of the main thrusts of recent housing policy has been to expand the role of housing associations as providers of social housing. It is therefore important that the Housing Corporation, which controls and monitors an increasing level of public resources, should be made more accountable. The proposed role of housing associations in taking over from local authorities as providers of housing, and the strategic role of local authorities in assessing and co-ordinating the response to meeting housing needs in their area, should be reflected by having at least one member of the Housing Corporation with local authority experience.

The tenants who are living in a home developed by housing associations should in our opinion be represented in the membership of the Housing Corporation. I do not believe in these days of what ought to be expanding accountability that the suggestions that are being made in this amendment are at all unreasonable. They would damage nobody. In fact, in broadening the composition of the Housing Corporation they would go a long way to perhaps eliminating problems of a minor nature in a variety of areas because the community would see that their people were involved.

If at this time of the morning I have to be a little political, I think that the present Government have made the mistake of having people appointed and not elected. I do not think that they have done their image any good in a general sense, but that is their business. However, I believe that if more people who are at the sharp end of the business were represented on this body it would do no harm to anyone and might well do a lot of good. I beg to move.

Lord Hesketh

There is a ring of familiarity about this amendment. The noble Lord brought forward something similar at the Committee stage of the Housing Bill last year, and then again on Report. The Government were unable to accept those amendments last year and I am afraid are no more inclined to accept the new version being brought forward now. The amendment would mean places on the corporation's board being, in effect, reserved for representatives of particular interests. Our arguments are the same now as they were then and that is why we resist the blandishments of the noble Lord, Lord Dean, on the amendment.

The Earl of Kinnoull

Before the noble Lord replies, I wish to ask my noble friend whether there is at present, or has been in recent times, a lady on the board. Will my noble friend also say how long the appointments last? Are they for three or five years?

Lord Hesketh

I believe there are two ladies on the board. The appointments are for three years.

Lord Dean of Beswick

I am somewhat disappointed and saddened by the negative response. The reasons the Minister gave for not acceding to the request do not hold water. They are not adequate reasons for refusing representation on the board of people who are at the sharp end of the business. While the people who will be appointed may be experts in their own fields of activity they will, in my opinion, be concerned in the main with ensuring that the Housing Corporation is financially sound. The appointment of the type of person we are suggesting in these amendments would go a long way towards making the body more socially sound.

The Government are on record as desiring an expanding role for the Housing Corporation and housing associations. I believe the more the Government keep a noose around the control at the top the more they will create an enlarged bureaucracy at the bottom with no increased representation at the top. I shall not continue but I do not think the Minister has made out any case for refusing this amendment. We may well come back to it on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 179NA not moved.]

Lord Evans of Claughton

In order that the Committee does not lose its way I should point out that in my groupings list it appears that Amendment No. 188ZC will be considered at the same time as Amendment No. I 79NA. That does not prevent me, even at this late hour, from making an impassioned plea for Amendment No. 188ZC. May I receive advice on that point?

The Chairman of Committees

It should come with a later amendment.

Lord Evans of Claughton

I see; it will come later. I am much obliged.

[Amendment No. 179NB not moved.]

Schedule 9 [Security of Tenure on Ending of Long Residential Tenancies]:

Lord Hesketh moved Amendment No. 179P: Schedule 9, page 197, leave out Schedule 9 and insert —

("SCHEDULE SECURITY OF TENURE ON ENDING OF LONG RESIDENTIAL TENANCIES

Preliminary

1. —(1) This Schedule applies to a long tenancy of a dwelling-house at a low rent as respects which for the time being the following condition (in this Schedule referred to as "the qualifying condition") is fulfilled, that is to say, that the circumstances (as respects the property let under the tenancy, the use of that property and all other relevant matters) are such that, if the tenancy were not at a low rent, it would at that time be an assured tenancy within the meaning of Part I of the Housing Act 1988.

(2) For the purpose only of determining whether the qualifying condition is fulfilled with respect to a tenancy, Schedule 1 to the Housing Act 1988 (tenancies which cannot be assured tenancies) shall have effect with the omission of paragraph 1 (which excludes tenancies entered into before, or pursuant to contracts made before, the coming into force of Part I of that Act).

(3) At any time within the period of twelve months ending on the day preceding the term date, application may be made to the court as respects any long tenancy of a dwelling-house at a low rent, not being at the time of the application a tenancy as respects which the qualifying condition is fulfilled, for an order declaring that the tenancy is not to be treated as a tenancy to which the Schedule applies.

(4) Where an application is made under sub-paragraph (3) above —

1. (a) the court, if satisfied that the tenancy is not likely immediately before the term date to be a tenancy to which this Schedule applies but not otherwise, shall make the order; and
2. (b) if the court makes the order, then, notwithstanding anything in sub-paragraph (1) above the tenancy shall not thereafter be treated as a tenancy to which the Schedule applies.

(5) A tenancy to which the Schedule applies is hereinafter referred to as a long residential tenancy.

(6) Anything authorised or required to be done under the following provisions of this Schedule in relation to a long residential tenancy shall, if done before the term date in relation to a long tenancy of a dwelling-house at a low rent, not be treated as invalid by reason only that at the time at which it was done the qualifying condition was not fulfilled as respects the tenancy.

(7) In determining for the purposes of any provision of this Schedule whether the property let under a tenancy was let as a separate dwelling, the nature of the property at the time of the creation of the tenancy shall be deemed to have been the same as its nature at the time in relation to which the question arises, and the purpose for which it was let under the tenancy shall be deemed to have been the same as the purpose for which it is or was used at the last-mentioned time.

2. —(1) This paragraph has effect for the interpretation of certain expressions used in this Schedule.

(2) Except where the context otherwise requires, expressions to which a meaning is assigned for the purposes of the 1988 Act or Part I of that Act have the same meaning in this Schedule.

(3) "Long tenancy" means a tenancy granted for a term of years certain exceeding 21 years, whether or not subsequently extended by act of the parties or by any enactment, but excluding any tenancy which is, or may become, terminable before the end of the term by notice given to the tenant.

(4) A tenancy is "at a low rent" if either no rent is payable under the tenancy or the maximum rent payable at any time is less than two-thirds of the rateable value for the time being of the dwelling-house under the tenancy.

(5) Paragraph 3(2) of Schedule 1 to the 1988 Act applies to determine whether the rent under a tenancy falls within sub-paragraph (4) above and Part II of that Schedule applies to determine the rateable value of a dwelling-house for the purposes of that sub-paragraph.

(6) "Long residential tenancy" and "qualifying condition" have the meaning assigned by paragraph I above and the following expressions shall be construed as follows— the 1954 Act" means the Landlord and Tenant Act 1954; the 1988 Act" means the Housing Act 1988; agreed terms" shall be construed in accordance with paragraph 11(1)(b) below; assured periodic tenancy" shall be construed in accordance with paragraph 9(4) below; the date of termination" has the meaning assigned by paragraph 4(4) below; disputed terms" shall be construed in accordance with paragraph 11(1)(a) below; election by the tenant to retain possession" shall be construed in accordance with paragraph 4(7) below; former 1954 Act tenancy" means a tenancy to which, by virtue of section 157(3) of this Act, this Schedule applies on and after 15th January 1999; the implied terms" shall be construed in accordance with paragraph 4(5)(a) below; landlord" shall be construed in accordance with paragraph 19(1) below; landlord's notice" means a notice under sub-paragraph (1) of paragraph 4 below and such a notice is —

1. (a) a "landlord's notice proposing an assured tenancy" if it contains such proposals as are mentioned in sub-paragraph (5)(a) of that paragraph; and
2. (b) a "landlord's notice to resume possession" if it contains such proposals as are referred to in sub-paragraph (5)(b) of that paragraph;

specified date of termination", in relation to a tenancy in respect of which a landlord's notice is served, means the date specified in the notice as mentioned in paragraph 4(1)(a) below; tenant's notice" shall be construed in accordance with paragraph 10(1)(a) below; term date", in relation to a tenancy granted for a term of years certain, means the date of expiry of that term; and the terms of the tenancy specified in the landlord's notice" shall be construed in accordance with paragraph 4(6) below.

Continuation of long residential tenancies

3. —(1) A tenancy which, immediately before the term date, is a long residential tenancy shall not come to an end on that date except by being terminated under the provisions of this Schedule, and, if not then so terminated, shall subject to those provisions continue until so terminated and, while continuing by virtue of this paragraph, shall be deemed to be a long residential tenancy (notwithstanding any change in circumstances).

(2) Sub-paragraph (1) above does not apply in the case of a former 1954 Act tenancy the term date of which falls before 15th January 1999 but if, in the case of such a tenancy, —

1. (a) the tenancy is continuing immediately before that date by virtue of section 3 of the 1954 Act, and
2. (b) on that date the qualifying condition (as defined in paragraph 1(1) above) is fulfilled,

then, subject to the provisions of this Schedule, the tenancy shall continue until terminated under those provisions and, while continuing by virtue of this paragraph, shall be deemed to be a long residential tenancy (notwithstanding any change in circumstances).

(3) Where by virtue of this paragraph a tenancy continues after the term date, the tenancy shall continue at the same rent and in other respects on the same terms as before the term date.

Termination of tenancy by the landlord

4. —(1) Subject to sub-paragraph (2) below and the provisions of this Schedule as to the annulment of notices in certain cases, the landlord may terminate a long residential tenancy by a notice in the prescribed form served on the tenant—

1. (a) specifying the date at which the tenancy is to come to an end, being either the term date or a later date; and
2. (b) so served not more than twelve nor less than six months before the date so specified.

(2) In any case where —

1. (a) a landlord's notice has been served, and
2. (b) an application has been made to the court or a rent assessment committee under the following provisions of this Schedule other than paragraph 6, and
3. (c) apart from this paragraph, the effect of the notice would be to terminate the tenancy before the expiry of the period of three months beginning with the date on which the application is finally disposed of,

the effect of the notice shall be to terminate the tenancy at the expiry of the said period of three months and not at any other time.

(3) The reference in sub-paragraph (2)(c) above to the date on which the application is finally disposed of shall be construed as a reference to the earliest date by which the proceedings on the application (including any proceedings on or in consequence of an appeal) have been determined and any time for appealing or further appealing has expired, except that if the application is withdrawn or any appeal is abandoned the reference shall be construed as a reference to the date of withdrawal or abandonment.

(4) In this Schedule "the date of termination", in relation to a tenancy in respect of which a landlord's notice is served, means, —

1. (a) where the tenancy is continued as mentioned in sub-paragraph (2) above, the last day of the period of three months referred to in that sub-paragraph; and
2. (b) in any other case, the specified date of termination.

(5) A landlord's notice shall not have effect unless —

1. (a) it proposes an assured monthly periodic tenancy of the dwelling-house and a rent for that tenancy (such that it would not be a tenancy at a low rent) and, subject to sub-paragraph (6) below, states that the other terms of the tenancy shall be the same as those of the long residential tenancy immediately before it is terminated (in this Schedule referred to as "the implied terms"); or
2. (b) it gives notice that, if the tenant is not willing to give up possession at the date of termination of the property let under the tenancy, the landlord proposes to apply to the court, on one or more of the grounds specified in paragraph 5(1) below, for the possession of the property let under the tenancy and states the ground or grounds on which he proposes to apply.

(6) In the landlord's notice proposing an assured tenancy the landlord may propose terms of the tenancy referred to in sub-paragraph (5)(a) above different from the implied terms; and any reference in the following provisions of this Schedule to the terms of the tenancy specified in the landlord's notice is a reference to the implied terms or, if the implied terms are varied by virtue of this sub-paragraph, to the implied terms as so varied.

(7) A landlord's notice shall invite the tenant, within the period of two months beginning on the date on which the notice was served, to notify the landlord in writing whether, —

1. (a) in the case of a landlord's notice proposing an assured tenancy, the tenant wishes to remain in possession; and
2. (b) in the case of a landlord's notice to resume possession, the tenant is willing to give up possession as mentioned in sub-paragraph (5)(b) above;

and references in this Schedule to an election by the tenant to retain possession are references to his notifying the landlord under this sub-paragraph that he wishes to remain in possession or, as the case may be, that he is not willing to give up possession.

5.—(1) Subject to the following provisions of this paragraph, the grounds mentioned in paragraph 4(5)(b) above are—

1. (a) Ground 6 in, and those in Part II of, Schedule 2 to the 1988 Act, other than Ground 16;
2. (b) the ground that, for the purposes of redevelopment after the termination of the tenancy, the landlord proposes to demolish or reconstruct the whole or a substantial part of the premises; and
3. (c) the ground that the premises or part of them are reasonably required by the landlord for occupation as a residence for himself or any son or daughter of his over eighteen years of age or his or his spouse's father or mother and, if the landlord is not the immediate land lord, that he will be at the specified date of termination.

(2) Ground 6 in Schedule 2 to the 1988 Act may not be specified in a landlord's notice to resume possession if the tenancy is a former 1954 Act tenancy; and in the application of that Ground in accordance with sub-paragraph (1) above in any other case, paragraph (c) shall be omitted.

(3) In its application in accordance with sub-paragraph (1) above, Ground 10 in Schedule 2 to the 1988 Act shall have effect as if, in paragraph (b) —

1. (a) the words "except where subsection (1)(b) of section 8 of this Act applies" were omitted; and
2. (b) the words "notice under that section relating to those proceedings" there were substituted "landlord's notice to resume possession (within the meaning of Schedule 9 to the Local Government and Housing Act 1989)".

(4) The ground mentioned in sub-paragraph (1)(b) above may not be specified in a landlord's notice to resume possesion unless the landlord is a body to which section 28 of the Leasehold Reform Act 1967 applies and the premises are required for relevant development within the meaning of that section; and on any application by such a body under paragraph 13 below for possession on that ground, a certificate given by a Minister of the Crown as provided by subsection (1) of that section shall be conclusive evidence that the premises are so required.

(5) The ground mentioned in sub-paragraph (1)(c) above may not be specified in a landlord's notice to resume possession if the interest of the landlord, or an interest which is merged in that interest and but for the merger would be the interest of the landlord, was purchased or created after 18th February 1966.

Interim rent

6.—(1) On the date of service of a landlord's notice proposing an assured tenancy, or at any time between that date and the date of termination, the landlord may serve a notice on the tenant in the prescribed form proposing an interim monthly rent to take effect from a date specified in the notice, being not earlier than the specified date of termination, and to continue while the tenancy is continued by virtue of the preceding provisions of this Schedule.

(2) Where a notice has been served under sub-paragraph (1) above,—

1. (a) within the period of two months beginning on the date of service, the tenant may refer the interim monthly rent proposed in the notice to a rent assessment committee; and
2. (b) if the notice is not so referred, then, with effect from the date specified in the notice or, if it is later, the expiry of the period mentioned in paragraph (a) above, the interim monthly rent proposed in the notice shall be the rent under the tenancy.

(3) Where, under sub-paragraph (2) above, the rent specified in a landlord's notice is referred to a rent assessment committee, the committee shall determine the monthly rent at which, subject to sub-paragraph (4) below, the committee consider that the premises let under the tenancy might reasonably be expected to be let on the open market by a willing landlord under a monthly periodic tenancy —

1. (a) which begins on the day following the specified date of termination;
2. (b) under which the other terms are the same as those of the existing tenancy at the date on which was given the landlord's notice proposing an assured tenancy; and
3. (c) which affords the tenant security of tenure equivalent to that afforded by Chapter I of Part I of the 1988 Act in the case of an assured tenancy (other than an assured shorthold tenancy) in respect of which possession may not be recovered under any of Grounds 1 to 5 in Part I of Schedule 2 to that Act.

(4) Subsections (2), (4) and (5) of section 14 of the 1988 Act shall apply in relation to a determination of rent under sub-paragraph (3) above as they apply in relation to a determination under that section subject to the modifications in sub-paragraph (5) below; and in this paragraph "rent" shall be construed in accordance with subsection (4) of that section.

(5) The modifications of section 14 of the 1988 Act referred to in sub-paragraph (4) above are that in subsection (2), the reference in paragraph (b) to a relevant improvement being carried out shall be construed as a reference to an improvement being carried out during the long residential tenancy and the reference in paragraph (c) to a failure to comply with any term of the tenancy shall be construed as a reference to a failure to comply with any term of the long residential tenancy.

(6) Where a reference has been made to a rent assessment committee under sub-paragraph (2) above, then, the rent determined by the committee (subject, in a case where Section 14(5) of the 1988 Act applies, to the addition of the appropriate amount in respect of rates) shall be the rent under the tenancy with effect from the date specified in the notice served under sub-paragraph (1) above or, if it is later, the expiry of the period mentioned in paragraph (a) of sub-paragraph (2) above.

7.—(1) Nothing in paragraph 6 above affects the right of the landlord and the tenant to agree the interim monthly rent which is to have effect while the tenancy is continued by virtue of the preceding provisions of this Schedule and the date from which that rent is to take effect; and, in such a case, —

1. (a) notwithstanding the provisions of paragraph 6 above, that rent shall be the rent under the tenancy with effect from that date; and
2. (b) no steps or, as the case may be, no further steps may be taken by the landlord or the tenant under the provisions of that paragraph.

(2) Nothing in paragraph 6 above requires a rent assessment committee to continue with a determination under sub-paragraph (3) of that paragraph —

1. (a) if the tenant gives notice in writing that he no longer requires such a determination; or
2. (b) if the long residential tenancy has come to an end on or before the specified date of termination.

(3) Notwithstanding that a tenancy in respect of which an interim monthly rent has effect in accordance with paragraph 6 above or this paragraph is no longer at a low rent, it shall continue to be regarded as a tenancy at a low rent and, accordingly, shall continue to be a long residential tenancy.

Termination of tenancy by the tenant

8. —(1) A long residential tenancy may be brought to an end at the term date by not less than one month's notice in writing given by the tenant to his immediate landlord.

(2) A tenancy which is continuing after the term date by virtue of paragraph 3 above may be brought to an end at any time by not less than one month's notice in writing given by the tenant to his immediate landlord, whether the notice is given before or after the term date of the tenancy.

(3) The fact that the landlord has served a landlord's notice or that there has been an election by the tenant to retain possession shall not prevent the tenant from giving notice under this paragraph terminating the tenancy at a date earlier than the specified date of termination.

The assured periodic tenancy

9. —(1) Where a long residential tenancy (in this paragraph referred to as "the former tenancy") is terminated by a landlord's notice proposing an assured tenancy, then, subject to sub-paragraph (3) below, the tenant shall be entitled to remain in possession of the dwelling-house and his right to possession shall depend upon an assured periodic tenancy arising by virtue of this paragraph.

(2) The assured periodic tenancy referred to in sub-paragraph (1) above is one —

1. (a) taking effect in possession on the day following the date of termination;
2. (b) deemed to have been granted by the person who was the landlord under the former tenancy on the date of termination to the person who was then the tenant under that tenancy;
3. (c) under which the premises let are the dwelling-house;
4. (d) under which the periods of the tenancy, and the intervals at which rent is to be paid, are monthly beginning on the day following the date of termination;
5. (e) under which the rent is determined in accordance with paragraphs 10 to 12 below; and
6. (f) under which the other terms are determined in accordance with paragraphs 10 to 12 below.

(3) If, at the end of the period of two months beginning on the date of service of the landlord's notice, the qualifying condition was not fulfilled as respects the tenancy, the tenant shall not be entitled to remain in possession as mentioned in sub-paragraph (1) above unless there has been an election by the tenant to retain possession; and if, at the specified date of termination, the qualifying condition is not fulfilled as respects the tenancy, then, notwithstanding that there has been such an election, the tenant shall not be entitled to remain in possession as mentioned in that sub-paragraph.

(4) Any reference in the following provisions of this Schedule to an assured periodic tenancy is a reference to an assured periodic tenancy arising by virtue of this paragraph.

Initial rent under and terms of assured periodic tenancy

10. —(1) Where a landlord's notice proposing an assured tenancy has been served on the tenant,—

1. (a) within the period of two months beginning on the date of service of the notice, the tenant may serve on the landlord a notice in the prescribed form proposing either or both of the following, that is to say,—
   1. (i) a rent for the assured periodic tenancy different from that proposed in the landlord's notice; and
   2. (ii) terms of the tenancy different from those specified in the landlord's notice,
   and such a notice is in this Schedule referred to as a "tenant's notice"; and
2. (b) if a tenant's notice is not so served, then, with effect from the date on which the assured periodic tenancy takes effect in possession, —
1. (i) the rent proposed in the landlord's notice shall be the rent under the tenancy; and
2. (ii) the terms of the tenancy specified in the landlord's notice shall be terms of the tenancy.

(2) Where a tenant's notice has been served on the landlord under sub-paragraph (1) above—

1. (a) within the period of two months beginning on the date of service of the notice, the landlord may by an application in the prescribed form refer the notice to a rent assessment committee; and
2. (b) if the notice is not so referred, then, with effect from the date on which the assured periodic tenancy takes effect in possession, —
1. (i) the rent (if any) proposed in the tenant's notice, or, if no rent is so proposed, the rent proposed in the landlord's notice, shall be the rent under the tenancy; and
2. (ii) the other terms of the tenancy (if any) proposed in the tenant's notice and, in so far as they do not conflict with the terms so proposed, the terms specified in the landlord's notice shall be terms of the tenancy.

11. —(1) Where, under sub-paragraph (2) of paragraph 10 above, a tenant's notice is referred to a rent assessment committee, the committee, having regard only to the contents of the landlord's notice and the tenant's notice, shall decide —

1. (a) whether there is any dispute as to the terms (other than those relating to the amount of the rent) of the assured periodic tenancy (in this Schedule referred to as "disputed terms") and, if so, what the disputed terms are;
2. (b) whether there is any agreement as to the terms (other than those relating to the amount of the rent) of the tenancy (in this Schedule referred to as "agreed terms") and, if so, what the agreed terms are; and
3. (c) whether there is any dispute as to rent under the tenancy;

and where the committee decide that there are disputed terms and that there is a dispute as to the rent under the tenancy, they shall make a determination under sub-paragraph (2) below before they make a determination under sub-paragraph (4) below.

(2) If the rent assessment committee decide that there are disputed terms, they shall determine whether the terms in the landlord's notice, the terms in the tenant's notice, or some other terms, dealing with the same subject matter as the disputed terms are such as, in the committee's opinion, might reasonably be expected to be found in an assured monthly periodic tenancy of the dwelling-house (not being an assured shorthold tenancy)—

1. (a) which begins on the day following the date of termination;
2. (b) which is granted by a willing landlord on terms which, except so far as they relate to the subject matter of the disputed terms, are the agreed terms; and
3. (c) in respect of which possession may not be recovered under any of Grounds 1 to 5 in Part I of Schedule 2 to the 1988 Act;

and the committee shall, if they consider it appropriate, specify an adjustment of the agreed terms to take account of the terms so determined and shall, if they consider it appropriate, specify an adjustment of the rent to take account of the terms so determined and, if applicable, so adjusted.

(3) In making a determination under sub-paragraph (2) above, or specifying an adjustment of the rent of agreed terms under that sub-paragraph, there shall be disregarded any effect on the terms of the amount of rent attributable to the granting of a tenancy to a sitting tenant.

(4) If the rent assessment committee decide that there is a dispute as to the rent under the assured periodic tenancy, the committee shall determine the monthly rent at which, subject to sub-paragraph (5) below, the committee consider that the dwelling-house might reasonably be expected to be let in the open market by a willing landlord under an assured tenancy (not being an assured shorthold tenancy) —

1. (a) which is a monthly periodic tenancy;
2. (b) which begins on the day following the date of termination;
3. (c) in respect of which possession may not be recovered under any of Grounds 1 to 5 in Part I of Schedule 2 to the 1988 Act; and
4. (d) the terms of which (other than those relating to the amount of the rent) are the same as —
1. (i) the agreed terms; or
2. (ii) if there has been a determination under sub-paragraph (2) above, the terms determined by the committee under that sub-paragraph and the agreed terms (as adjusted, if at all, under that sub-paragraph).

(5) Subsections (2), (4) and (5) of section 14 of the 1988 Act shall apply in relation to a determination of rent under sub-paragraph (4) above as they apply in relation to a determination under that section subject to the modifications in sub-paragraph (6) below; and in this paragraph "rent" shall be construed in accordance with subsection (4) of that section.

(6) The modifications of section 14 of the 1988 Act referred to in sub-paragraph (5) above are that in subsection (2), the reference in paragraph (b) to a relevant improvement being carried out shall be construed as a reference to an improvement being carried out during the long residential tenancy and the reference in paragraph (c) to a failure to comply with any term of the tenancy shall be construed as a reference to a failure to comply with any term of the long residential tenancy.

(7) Where a reference has been made to a rent assessment committee under sub-paragraph (2) of paragraph 10 above, then, —

1. (a) the rent determined by the committee (subject, in a case where section 14(5) of the 1988 rent Act applies, to the addition of the appropriate amount in respect of rates) or, if there is no dispute as to the rent, the rent specified in the landlord's notice or, as the case may be, the tenant's notice (subject to any adjustment under sub-paragraph (2) above) shall be the rent under the tenancy, and
2. (b) the agreed terms (subject to any adjustment under sub-paragraph (2) above) shall be terms of the tenancy,

with the effect from the date on which the assured periodic tenancy takes effect in possession.

(8) Nothing in this Schedule affects the right of the landlord and the tenant under the assured periodic tenancy to vary by agreement any term of the tenancy (including a term relating to rent).

12. —(1) Subsection (2) to (4) of section 41 of the 1988 Act (rent assessment committees: information powers) shall apply where there is a reference to a rent assessment committee under the preceding provisions of this Schedule as they apply where a matter is referred to such a committee under Chapter I or Chapter II of Part I of the 1988 Act.

(2) Nothing in paragraph 10 or paragraph 11 above affects the right of the landlord and the tenant to agree any terms of the assured periodic tenancy (including a term relating to the rent) before the tenancy takes effect in possession (in this sub-paragraph referred to as "the expressly agreed terms"); and, in such case,—

1. (a) the expressly agreed terms shall be terms of the tenancy in substitution for any terms dealing with the same subject matter which would otherwise, by virtue of paragraph 10 or paragraph 11 above, be terms of the tenancy; and
2. (b) where a reference has already been made to a rent assessment committee under sub-paragraph (2) of paragraph 10 above but there has been no determination by the committee under paragraph 11 above,—
523
1. (i) the committee shall have regard to the expressly agreed terms, as notified to them by the landlord and the tenant, in deciding, for the purposes of sub-paragraph (1) of paragraph 11 above, what the disputed terms and the agreed terms are and whether there is any dispute as to the rent; and
2. (ii) in making any determination under paragraph 11 above the committee shall not make any adjustment of the expressly agreed terms, as so notified.

(3) Where, by virtue of sub-paragraph (2)(b)(i) above, the committee decide under sub-paragraph (1) of paragraph 11 above that there are no disputed terms and there is no dispute as to the rent, the committee shall not continue with their determination under paragraph 11 above and, in such a case, the agreed terms shall be terms of the assured periodic tenancy.

(4) Nothing in paragraph 11 above required a rent assessment committee to continue with a determination under that paragraph —

1. (a) if the long residential tenancy has come to an end; or
2. (b) if the landlord serves notice in writing on the committee that he no longer requires such a determination;

and, where the landlord serves notice as mentioned in paragraph (b) above, then, for the purposes of sub-paragraph (2) of paragraph 10 above, the landlord shall be treated as not having made a reference under paragraph (a) of that sub-paragraph and, accordingly, paragraph (b) of that sub-paragraph shall, subject to sub-paragraph (2) above, have effect for determining rent and other terms of the assured periodic tenancy.

Landlord's application for possession

13. —(1) Where a landord's notice to resume possession has been served on the tenant and either —

1. (a) there is an election by the tenant to retain possession, or
2. (b) at the end of the period of two months beginning on the date of service of the notice the qualifying conditions is fulfilled as respects the tenancy,

the landlord may apply to the court for an order under this paragraph on such of the grounds mentioned in paragraph 5(1) above as may be specified in the notice.

(2) The court shall not entertain an application under sub-paragraph (1) above unless the application is made —

1. (a) within the period of two months beginning on the date of the election by the tenant to retain possession; or
2. (b) if there is no election by the tenant to retain possession, within the period of four months beginning on the date of service of the landlord's notice.

(3) Where the ground or one of the grounds for claiming possession specified in the landlord's notice is Ground 6 in Part I of Schedule 2 to the 1988 Act, then, if on an application made under sub-paragraph (1) above the court is satisfied that the landlord has established that ground, the court shall order that the tenant shall, on the date of termination, give up possession of the property then let under the tenancy.

(4) Subject to sub-paragraph (6) below, where the ground or one of the grounds for claiming possession specified in the landlord's notice is any of Grounds 9 to 15 in Part II of Schedule 2 to the 1988 Act or the ground mentioned in paragraph 5(1)(c) above, then, if on an application made under sub-paragraph (1) above the court is satisfied that the landlord has established that ground and that it is reasonable that the landlord should be granted possession, the court shall order that the tenant shall, on the date of termination, give up possession of the property then let under the tenancy.

(5) Part III of Schedule 2 to the 1988 Act shall have effect for supplementing Ground 9 in that Schedule (as that ground applies in relation to this Schedule) as it has effect for supplementing that ground for the purposes of that Act, subject to the modification that in paragraph 3(1), in the words following paragraph (b) the reference to the assured tenancy in question shall be construed as a reference to the long residential tenancy in question.

(6) Where the ground or one of the grounds for claiming possession specified in the landlord's notice is that mentioned in paragraph 5(1)(c) above, the court shall not make the order mentioned in sub-paragraph (4) above on that ground if it is satisfied that, having regard to all the circumstances of the case, including the question whether other accomodation is available for the landlord or the tenant, greater hardship would be caused by making the order than by refusing to make it.

(7) Where the ground or one of the grounds for claiming possession specified in the landlord's notice is that mentioned in paragraph 5(1)(b) above, then, if on an application made under sub-paragraph (1) above the court is satisfied that the landlord has established that ground and is further satisfied —

1. (a) that on that ground possession of those premises will be required by the landlord on the date of termination, and
2. (b) that the landlord has made such preparations (including the obtaining or, if that is not reasonably practicable in the circumstances, preparations relating to the obtaining of any requisite permission or consent, whether from any authority whose permission or consent is required under any enactment or from the owner of any interest in any property) for proceeding with the redevelopment as are reasonable in the circumstances,

the court shall order that the tenant shall, on the date of termination, give up possession of the property then let under the tenancy.

14. —(1) Where, in a case falling within sub-paragraph (7) of paragraph 13 above, the court is not satisfied as mentioned in that sub-paragraph but would be satisfied if the date of termination of the tenancy had been such date (in this paragraph referred to as "the postponed date") as the court may determine, being a date later, but not more than one year later, than the specified date of termination, the court shall, if the landlord so requires, make an order as mentioned in sub-paragraph (2) below.

(2) The order referred to in sub-paragraph (1) above is one by which the court specifies the postponed date and orders —

1. (a) that the tenancy shall not come to an end on the date of termination but shall continue thereafter, as respects the whole of the property let under the tenancy, at the same rent and in other respects on the same terms as before that date; and
2. (b) that, unless the tenancy comes to an end before the postponed date, the tenant shall on that date give up possession of the property then let under the tenancy.

(3) Notwithstanding the provisions of paragraph 13 above and the preceding provisions of this paragraph and notwithstanding that there has been an election by the tenant to retain possession, if the court is satisfied, at the date of the hearing, that the qualifying condition is not fulfilled as respects the tenancy, the court shall order that the tenant shall, on the date of termination, give up possession of the property then let under the tenancy.

(4) Nothing in paragraph 13 above or the preceding provisions of this paragraph shall predudice any power of the tenant under paragraph 8 above to terminate the tenancy; and sub-paragraph (2) of that paragraph shall apply where the tenancy is continued by an order under sub-paragraph (2) above as it applies where the tenancy is continued by virtue of paragraph 3 above.

Provisions where tenant not ordered to give up possession

15.—(1) The provisions of this paragraph shall have effect where the landlord is entitled to make an application under sub-paragraph (1) of paragraph 13 above but does not obtain an order under that paragraph or paragraph 14 above.

(2) If at the expiration of the period within which an application under paragraph 13(1) above may be made the landlord has not made such an application, the landlord's notice to resume possession, and anything done in pursuance thereof, shall cease to have effect.

(3) If before the expiration of the period mentioned in sub-paragraph (2) above the landlord has made an application under paragraph 13(1) above but the result of the application, at the time when it is finally disposed of is that no order is made, the landlord's notice to resume possession shall cease to have effect.

(4) In any case where sub-paragraph (3) above applies, then, if within the period of one month beginning on the date that the application to the court is finally disposed of the landlord serves on the tenant a landlord's notice proposing an assured tenancy, the earliest date which may be specified in the notice as the date of termination shall, notwithstanding anything in paragraph 4(1)(b) above, be the day following the last day of the period of four months beginning on the date of service of the subsequent notice.

(5) The reference in sub-paragraphs (3) and (4) above to the time at which an application is finally disposed of shall be construed as a reference to the earliest time at which the proceedings on the application (including any proceedings on or in consequence of an appeal) have been determined and any time for appealing has expired, except that if the application is withdrawn or any appeal is abandoned the reference shall be construed as a reference to the time of withdrawal or abandonment.

(6) A landlord's notice to resume possession may be withdrawn at any time by notice in writing served on the tenant (without prejudice, however, to the power of the court to make an order as to costs if the notice is withdrawn after the landlord has made an application under paragraph 13(1) above).

(7) In any case where sub-paragraph (6) above applies, then, if within the period of one month beginning on the date of withdrawal of the landlord's notice to resume possession the landlord serves on the tenant a landlord's notice proposing an assured tenancy, the earliest date which may be specified in the notice as the date of termination shall, notwithstanding anything in paragraph 4(1)(b) above, be the day following the last day of the period of four months beginning on the date of service of the subsequent notice or the day following the last day of the period of six months beginning on the date of service of the withdrawn notice, whichever is the later.

Tenancies granted in continuation of long tenancies

16. —(1) Where on the coming to the end of a tenancy at a low rent the person who was the tenant immediately before the coming to an end thereof becomes (whether by grant or by implication of the law) the tenant under another tenancy at a low rent of a dwelling-house which consists of the whole or any part of the property let under the previous tenancy then, if the previous tenancy was a long tenancy or is deemed by virtue of this paragraph to have been a long tenancy, the new tenancy shall be deemed for the purposes of this Schedule to be a long tenancy, irrespective of its terms.

(2) In relation to a tenancy from year to year or other tenancy not granted for a term of years certain, being a tenancy which by virtue of sub-paragraph (1) above is deemed for the purposes of this Schedule to be a long tenancy, the preceding provisions of this Schedule shall have effect subject of the modifications set out below.

(3) In sub-paragraph (6) of paragraph 2 above for the expression beginning "term date" there shall be substituted — "term date", in relation to any such tenancy as is mentioned in paragraph 16(2) below, means the first date after the coming into force of this Schedule on which, apart from this Schedule, the tenancy could have been brought to an end by notice to quit given by the landlord".

(4) Notwithstanding anything in sub-paragraph (3) of paragraph 3 above, where by virtue of that paragraph the tenancy is continued after the term date, the provisions of this Schedule as to the termination of a tenancy by notice shall have effect, subject to sub-paragraph (5) below, in substitution for and not in addition to any such provisions included in the terms on which the tenancy had effect before the term date.

(5) The minimum period of notice referred to in paragraph 8(1) above shall be one month or such longer period as the tenant would have been required to give to bring the tenancy to an end at the term date.

(6) Where the tenancy is not terminated under paragraph 4 or paragraph 8 above at the term date, then, whether or not it would have continued after that date apart from the provisions of this Schedule, it shall be treated for the purposes of those provisions as being continued by virtue of paragraph 3 above.

Agreements as to the grant of new tenancies

17. In any case where, prior to the date of termination of a long residential tenancy, the landlord and the tenant agree for the grant to the tenant of a future tenancy of the whole or part of the property let under the tenancy at a rent other than a low rent and on terms and from a date specified in the agreement, the tenancy shall continue until that date but no longer; and, in such a case, the provisions of this Schedule shall cease to apply in relation to the tenancy with effect from the date of the agreement.

Assumptions on which to determine future questions

18. Where under this Schedule any question falls to be determined by the court or a rent assessment committee by reference to circumstances at a future date, the court or committee shall have regard to all rights, interests and obligations under or relating to the tenancy as they subsist at the time of the determination and to all relevant circumstances as those then subsisting and shall assume, except in so far as the contrary is shown, that those rights, interests, obligations and circumstances will continue to subsist unchanged until that future date.

Landlords and mortgagees in possession

19. —(1) Section 21 of the 1954 Act (meaning of "the landlord" and provisions as to mesne landlords) shall apply in relation to this Schedule as it applies in relation to Part I of that Act but subject to the following modifications —

1. (a) any reference to Part I of that Act shall be construed as a reference to this Schedule; and
2. (b) subsection (4) (which relates to statutory tenancies arising under that Part) shall be omitted.

(2) Section 67 of the 1954 Act (mortgagees in possession) applies for the purposes of this Schedule except that for the reference to that Act there shall be substituted a reference to this Schedule.

(3) In accordance with sub-paragraph (1) above, Schedule 5 to the 1954 Act shall also apply for the purpose of this Schedule but subject to the following modifications —

1. (a) any reference to Part I of the 1954 Act shall be construed as a reference to the provisions of this Schedule (other than this sub-paragraph);
2. (b) any reference to section 21 of the 1954 Act shall be construed as a reference to that section as it applies in relation to this Schedule;
3. (c) any reference to subsection (1) of section 4 of that Act shall be construed as a reference to sub-paragraph (1) of paragraph 4 above;
4. (d) any reference to the court includes a reference to a rent assessment committee;
5. (e) paragraphs 6 to 8 and 11 shall be omitted;
6. (f) any reference to a particular subsection of section 16 of the 1954 Act shall be construed as a reference to that subsection as it applies in relation to this Schedule;
7. (g) any reference to a tenancy to which section 1 of the 1954 Act applies shall be construed as a reference to a long residential tenancy; and
8. (h) expressions to which a meaning is assigned by any provision of this Schedule (other than this sub-paragraph) shall be given that meaning.

Application of other provisions of the 1954 Act

20.—(1) Section 16 of the 1954 Act (relief for tenant where landlord proceeding to enforce covenants) shall apply in relation to this Schedule as it applies in relation to Part I of that Act but subject to the following modifications —

1. (a) in subsection (1) the reference to a tenancy to which section 1 of the 1954 Act applies shall be construed as a reference to a long residential tenancy,
2. (b) in subsection (2) the reference to Part I of that Act shall be construed as a reference to this Schedule;
3. (c) subsection (3) shall have effect as if the words "(without prejudice to section ten of this Act)" were omitted; and
4. (d) in subsection (7) the reference to subsection (3) of section 2 of the 1954 Act shall be construed as a reference to paragraph 1(6) above.

(2) Section 55 of the 1954 Act (compensation for possession obtained by misrepresentation) shall apply in relation to this Schedule as it applies in relation to Part I of that Act.

(3) Section 63 of the 1954 Act (jurisdiction of court for purposes of Parts I and 11 of the 1954 Act and of Part I of the Landlord and Tenant Act 1927) shall apply in relation to this Schedule and section 157 of this Act as it applies in relation to Part I of that Act.

(4) Section 65 of the 1954 Act (provisions as to reversions) applies for the purposes of this Schedule except that for any reference to that Act there shall be substituted a reference to this Schedule.

(5) Subsection (4) of section 66 of the 1954 Act (service of notices) shall apply in relation to this Schedule as it applies in relation to that Act.

21. —(1) Where this Schedule has effect in relation to a former 1954 Act tenancy the term date of which falls before 15th January 1999, any reference (however expressed) in the preceding provisions of this Schedule to the dwelling-house (or the property) let under the tenancy shall have effect as a reference to the premises qualifying for protection, within the meaning of the 1954 Act.

(2) Notwithstanding that at any time section 1 of the 1954 Act does not, and this Schedule does, apply to a former 1954 Act tenancy, any question of what are the premises qualifying for protection or (in that context) what is the tenancy shall be determined for the purposes of this Schedule in accordance with Part I of that Act.

Crown application

22. —(1) This schedule shall apply where —

1. (a) there is an interest belonging to Her Majesty in right of the Crown and that interest is under the management of the Crown Estate Commissioners, or
2. (b) there is an interest belonging to Her Majesty in right of the Duchy of Lancaster or belonging to the Duchy of Cornwall,

as if it were an interest not so belonging.

(2) Where an interest belongs to Her Majesty in right of the Duchy of Lancaster, then, for the purposes of this Schedule, the Chancellor of the Duchy of Lancaster shall be deemed to be the owner of the interest.

(3) Where an interest belongs to the Duchy of Cornwall, then, for the purposes of this Schedule, such person as the Duke of Cornwall, or other possessor for the time being of the Duchy of Cornwall, appoints shall be deemed to be the owner of the interest.").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 158 agreed to.

Clause 159 (Repeal of Section 2 of the Education (Grants and Awards) Act 1984]:

[Amendment No. 179Q not moved.]

Clause 159 agreed to.

3.45 a.m.

Lord Hesketh moved Amendment No. 179R: After Clause 159, insert the following new clause:

("Grants by Secretary of State towards costs of magistrates' courts etc.

.—(1) Section 59 of the Justices of the Peace Act 1979 (grants by Secretary of State to responsible authorities) shall be amended in accordance with this section.

(2) In subsection (1), in paragraph (a) the words "or this Part" shall be omitted and at the end of the subsection there shall be added "and (c) of their functions under this Part of this Act or, in the case of the Receiver, his corresponding functions".

(3) In subsection (3) after the word "section" there shall be inserted "towards the net cost to a responsible authority in any year of the matters mentioned in paragraphs (a) and (b) of subsection (1) above" and for the words from "the expenditure" onwards there shall be substituted "that net cost".

(4) After subsection (4) there shall be inserted the following subsection — (4A) In determining the amount of the grant towards the net cost of the functions referred to in subsection (1)(c) above, the Secretary of State may disregard, in whole or in part, such items of expenditure as he thinks fit."").

On Question, amendment agreed to.

Clause 160 [Regulations]:

Lord Trefgarne moved Amendment No. 179S: Page 144, leave out lines 46 to 48.

The noble Lord said: On behalf of my noble friend I rise to move Amendment No. 179S and at the same time to speak to Amendment No. 181 A.

The first amendment deletes from the existing clause the provision in Clause 160(2) that the powers to make regulations referred to in subsection (1) can be exercised differently as well as separately for Wales and for England. The provision is to be subsumed in a wider provision enabling the Secretary of State to exercise powers under the Bill differently as well as separately. That wider provision is contained in the second amendment, Amendment No. 181A, which represents the new clause. I beg to move.

Lord McIntosh of Haringey

I do not object to the amendments but I think that we should have been warned that they were to be taken together. They are not grouped.

On Question, amendment agreed to.

The Chairman of Committees

If Amendment No. 180 is agreed to I cannot call Amendment No. 180A.

[Amendments Nos. 180 and 180A not moved.]

Lord Hesketh moved Amendment No. 180B: Page 145, line 4, leave out ("above") and insert ("or Schedule 9").

On Question, amendment agreed to.

[Amendment No. 181 not moved.]

Clause 160, as amended, agreed to.

Lord Trefgarne moved Amendment No. 181A: After Clause 160, insert the following new clause:

("Separate provisions for Wales

.—(1) Where any provision of this Act which extends to England and Wales confers (directly or by amendment of another Act) a power on the Secretary of State to make regulations, orders, rules or determinations or to give directions or specify any matter, the power may be exercised differently for England and Wales, whether or not it is exercised separately.

(2) This section is without prejudice to section 160(1) above and to any other provision of this Act or of any Act amended by this Act by virtue of which powers may be exercised differently in different cases or in any other circumstances.").

On Question, amendment agreed to.

Clauses 161 to 163 agreed to.

Schedule 10 [Minor And Consequential Amendments]:

Lord Evans of Claughton moved Amendment No. 181B: Page 206, line 31, at end insert —

("The Landlord and Tenant Act 1709

No distress for rent shall be levied on any dwelling-house and the application of sections 1, 6 and 7 of the Landlord and Tenant Act 1709, shall be modified accordingly").

The noble Lord said: This is one of a number of amendments I am moving on behalf of the Law Society. It feels strongly that the opportunity presented by the Bill should be taken to deal with several problem areas in housing legislation which are in need of amendment or clarification. I feel that the Bill could effectively address those problem areas, However, I doubt whether, had I known that the amendment would be moved at a quarter to four in the morning, I should have been so enthusiastic in promoting it. It is one of a series of amendments which attempt to deal with sections of various Acts which are gathered together in this schedule.

The amendment deals with distress for rents for residential property. It does not relate to commercial property. The view the Law Society takes, which many noble Lords will also take, is that the remedy for distress has long ceased to be a relevant remedy. It is a barbaric concept. There are sufficient means by which rent arrears can be recovered without having to resort to a remedy going back to 1709.

Section 19 of the Housing Act 1988 allows a landlord to levy distress. We have an opportunity to take that particular form of recovery of rent or action for failure to pay rent out of the list of opportunities available to landlords.

The new broad grants of possession for non-payment or delayed payment of rent in the 1988 Act give the landlord perfectly convenient remedies that any reasonable landlord might require. That, coupled with the fact that distress for rent is a little-used remedy, suggests to me that no substantial inconvenience or disadvantage will be caused and therefore strongly supports the argument for abolition.

The Law Commission regards distraint as: a brutal remedy lacking judicial control, and wholly out of place in a modern legal system". It seems to me that this is the right place and a good opportunity as concerns residential property for abolishing distress as a means of recovery for non-payment or delayed payment of rent. I beg to move.

Lord Hesketh

The very age of the statute to which this amendment refers shows that the law relating to distress for rent is generally rather antiquated. The essential principle of the law, however, is rather simple —that a landlord should be able to take goods from his tenant to offset debts which the tenant owes him. A landlord in the private sector cannot distrain without a court order and very few orders are made each year. Distraint is rather more frequently used by public sector landlords, but, even so, local authorities generally prefer other methods of recovering arrears of rent which are due to them.

The Law Commission looked at the legislation relating to distress for rent in its working paper issued in 1986, and I understand that it is working on proposals which will be published in due course. I cannot anticipate the Commission's findings before deciding what action is needed. I hope that the noble Lord, Lord Evans, will feel able to withdraw the amendment.

Lord Evans of Claughton

I regret the view that the Minister takes, although it does not surprise me. It is in line with the view that he has taken for many hours today. However, I ask him to consider the fact that forcible entry into a person's home and seizure of that person's belongings is an intrusive, harrowing and humiliating remedy which is inappropriate to the latter part of the 20th century. Having said that, there seems no point in pursuing the matter to a Division. I believe that the Government should take the opportunity of legislating and should not use the Law Commission's excuse for putting off what would be a humane piece of housing policy. With those words, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 182: Page 206, line 37, at end insert —

("The Prevention of Corruption Act 1916

. In section 4 of the Prevention of Corruption Act 1916 (short title and interpretation), at the end of subsection (2) (meaning of "public body") there shall be added "and companies which, in accordance with Part V of the Local Government and Housing Act 1989, are under the control of one or more local authorities".").

The noble Lord said: The purpose of the amendment is to include local authority controlled companies as public bodies for the purposes of the Prevention of Corruption Acts 1889 to 1916. The amendment is needed to ensure that the provisions of the Prevention of Corruption Acts are clearly extended to cover local authority controlled companies. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 182A: Page 206, line 37, at end insert—

("The Education Act 1944

. In Part II of Schedule Ito the Education Act 1944 (education committees), after paragraph 5 there shall be inserted the following paragraph —

"5A. —(1) The Secretary of State may by directions to local education authorities require every education committee, or education committee of a description specified in the direction, to include persons appointed, in accordance with the directions, for securing the representation on the committee of persons who appoint foundation governors of voluntary schools in the area for which the committee acts.

(2) The power of the Secretary of State to give directions under sub-paragraph (1) of this paragraph shall be exercisable in relation to sub-committees of education committees as it is exercisable in relation to the committees themselves.

(3) Arrangements approved under paragraph 1 above, orders made under paragraph 3 above and restrictions imposed under paragraph 10 below shall have effect (whether approved, made or imposed before or after the coming into force of this paragraph or the giving of the direction) subject to the requirements of any direction under this paragraph"").

The noble Lord said: The amendment deals with the representation on education committees, and the right to vote, of non-elected members who appoint foundation governors of voluntary schools.

Where religious authorities are involved in providing schools in the area of a local education authority and given the very close relationship between county and voluntary schools, the Government consider it to be essential that such authorities are also involved fully in the strategic planning and decision making undertaken by the education committee which affects schools in the area. The amendment would give my right honourable friend the Secretary of State for Education and Science a power to issue directions to local education authorites to require them to include such persons on their education committees and sub-committees.

Lord McIntosh of Haringey

First, this amendment should not be in the Bill at all. It is an education amendment which should be in an education Bill. It should not simply have been spatchcocked into the Bill from the Department of the Environment. Secondly, even if this were an education Bill and were being properly discussed as such, the amendment is grossly over-prescriptive. Not only for the education committee but for the sub-committees of the education committee the Secretary of State will issue directions about their composition and their additional members. That is a gross intrusion on the responsiblity of education committees.

Thirdly, even if this were the right measure in the right Bill it must be defective because it requires every education committee, to include persons appointed, in accordance with the directions, for securing the representation on the committee of persons who appoint foundation governors of voluntary schools in the area for which the committee acts". There are education committees that have no voluntary schools and no foundation governors. Therefore the provision cannot apply to every education committee. This is a most unsatisfactory amendment and the Government would be wise to withdraw it and think again.

On Question, amendment agreed to.

[Amendment No. 182AZ not moved.]

Lord Hesketh moved Amendment No. 182B: Page 207, line 17, leave out ("16 of the Leasehold Reform Act 1967") and insert("3 of the Leasehold Reform Act 1967 (meaning of "long tenancy"), in subsection (5) after "1954" there shall be inserted "under Schedule 9 to the Local Government and Housing Act 1989". . In section 9 of that Act (purchase price and costs of enfranchisement, and tenant's right to withdraw), in subsection (1A), in paragraph (b) after the word "premises" there shall be inserted —

1. "(i) if the tenancy is such a tenancy as is mentioned in subsection (2) or subsection (3) of section 157 of the Local Government and Housing Act 1989, or is a tenancy which is a long tenancy at a low rent for the purposes of Part I of the Landlord and Tenant Act 1954 in respect of which the landlord is not able to serve a notice under section 4 of that Act specifying a date of termination earlier than 15th January 1999, under the provisions of Schedule 9 to the Local Government and Housing Act 1989; and
2. (ii) in any other case".

. In section 16 of that Act").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 182C: Page 207, line 23, at end insert — (" . In section 22 of that Act (validity of tenants' notices, effect on the 1954 Act and on notices to quit etc. and procedure generally), in subsection (1) after paragraph (c) there shall be inserted the following paragraph — (cc) for adapting the procedure under Schedule 9 to the Local Government and Housing Act 1989, and for the relating to one another proceedings under that Schedule and proceedings under this Part of this Act; and". . In section 37 of that Act (interpretation of Part I), in subsection (2) —

1. (a) after "1954" there shall be inserted "or paragraph 16(2) of Schedule 9 to the Local Government and Housing Act 1989";
2. (b) for the words "that Act", in the first place where they occur, there shall be substituted "the said Act of 1954 or, as the case may be, the said Schedule 9";
3. (c) for the words "that Act", in the second place where they occur, there shall be substituted "the said Act of 1954 or, as the case may be, the coming into force of the said Schedule 9"; and
4. (d) for the words "that Act", in the third place where they occur, there shall be substituted "the said Act of 1954 or, as the case may be, the said Schedule 9".

. —(1) In Schedule 3 to that Act (validity of tenants' notices, effect on the 1954 Act etc. and procedure generally), in paragraph 1, in subparagraph (1) after "1954" there shall be inserted "or paragraph 17 of Schedule 9 to the Local Government and Housing Act 1989". (2) In paragraph 2 of that Schedule —

1. (a) in sub-paragraph (1) after "1954" there shall be inserted "or served under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989";
2. (b) in sub-paragraph (2) after "1954" there shall be inserted "or under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989" and after the word "given" there shall be inserted "or served"; and
3. (c) in sub-paragraph (3—
1. (i) after "1954" there shall be inserted "or served under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989";
2. (ii) after the words "shall be" there shall be inserted —
• "(i) in the case of a notice given under the said Act of 1954"; and
3. (iii) at the end there shall be added —
• "(ii) in the case of a notice served under the said Schedule 9, the date of termination specified in the previous notice or the expiration of the period of four months beginning on the date of service of the new notice, whichever is the later".

(3) In paragraph 3 of that Schedule, after sub-paragraph (2) there shall be inserted — (3) The reference in sub-paragraph (2) above to section 16(2) of, and paragraph 9 of Schedule 5 to, the Landlord and Tenant Act 1954 includes a reference to those provisions as they apply in relation to Schedule 9 to the Local Government and Housing Act 1989. (4) In paragraph 4 of that Schedule, after sub-paragraph (5) there shall be inserted — (6) The references in this paragraph —

1. (a) to section 16 of the Landlord and Tenant Act 1954 and subsection (2) of that section, and
2. (b) paragraph 9 of Schedule 5 to that Act and sub-paragraph (2) of that paragraph,

include references to those provisions as they apply in relation to Schedule 9 to the Local Government and Housing Act 1989. (5) In paragraph 10 of that Schedule —

1. (a) in sub-paragraph (1) —
1. (i) after "1954" there shall be inserted "or under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989"; and
2. (ii) in paragraph (a) for the words "either of those sections" there shall be substituted "any of those provisions"; and
533
2. (b) in sub-paragraph (4) after "1954" there shall be inserted "or under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989".").

On Question, amendment agreed to.

Lord Hesketh moved Amendments Nos. 183 and 184: Page 208, line 5, at end insert— (". In section 80 of the Local Government Act 1972 (disqualifications for election and holding office as members of local authority), in subsection (1) after paragraph (a) there shall be inserted the following paragraph — (aa) holds any employment in a company which, in accordance with Part V of the Local Government and Housing Act 1989 other than section 70, is under the control of the local authority; or" "). Page 208, line 6, leave out ("the Local Government Act 1972") and insert ("that Act").

The noble Lord said: I beg to move these amendments en bloc.

Lord McIntosh of Haringey

These amendments too are quite unsatisfactory. They should not be here at all. They probably belong in Part I; certainly they should be in Part V of the Bill and should not be introduced at this stage to be dealt with in this way. Apart from anything else there are issues relating to Part V which are still outstanding in a consultation paper that we have not seen, although it is still promised before the Report stage.

Again, I do not seem to receive any replies to the criticisms that I make, but it would be wise, I think, for the Minister to withdraw this amendment. He could perfectly well bring it forward in its right place in the Bill at Report stage without any loss. I do not see any reason why he should fail to give me an answer this time, although he failed to answer me the time before. I might be tempted to divide the Committee on this amendment.

Lord Hesketh

I hear very clearly what the noble Lord, Lord McIntosh, says about the consultation document being available before the Report stage. I shall address that point on my return to the Department of the Environment first thing tomorrow —no, this morning.

Lord McIntosh of Haringey

Does the Minister not feel that it would be wise to do what I have suggested? Since there are matters here which are still outstanding for consultation, what loss could there be in withdrawing this amendment and putting it forward again at the Report stage, at the right place in the Bill? I appeal to the Minister and the Government to treat these matters properly. They are not matters which should be dealt with at four o'clock in the morning in the wrong place in a Bill. It is not courteous to the Chamber and not proper parliamentary business.

Lord Hesketh

I always do my very best to accommodate the noble Lord, Lord McIntosh. I do not think that I can go further than to say that this matter will receive my absolute and undivided attention first thing this morning.

On Question, amendments agreed to.

Lord Evans of Claughton moved Amendment No. 184ZA: Page 208, line 23, at end insert— ("11A. In subsection (1) of section 231 of that Act after "order" insert ", requisition" and after "post" insert "or any other means specified by the Local Authority either generally or in relation to a particular description of document", 11B. In subsection (1) of section 233 of that Act after "order" insert ", certificate". 11C. In section 233 after subsection (7) insert — (7A) with the consent of any person on whom a document mentioned in subsection (1) is to be served, or to whom it is to be issued, a local authority may serve or issue such document electronically" ").

The noble Lord said: I understand that the noble Lord, Lord Lloyd of Kilgerran, has told the noble Earl, Lord Caithness, that because of a bereavement he is not able to be present at this time. In his absence he has asked me to move this amendment. In his note to me he says also that the noble Baroness, Lady Blatch, has been delayed. I think we can assume at this hour of the morning that the delay is of a permanent nature. I therefore seek to move this amendment. In doing so I should like to speak also to Amendments Nos. 184B and 188GA. I shall be as brief as possible.

I understand that the Minister's colleagues have been apprised of the amendments, as has the Lord Chancellor's office. Some sympathy has been expressed in informal discussions, I am advised. Quite simply, the amendments are directed at simplifying certain procedures in local government administration. The noble Lord, Lord Lloyd, has received letters from the Law Society and bodies dealing with local authority matters fully supporting these three amendments. In these circumstances, I do not propose to delay the Committee further. I beg to move.

4 a.m.

Lord Hesketh

This amendment has the laudable aim of speeding up the process of conveyancing. These amendments are aimed at allowing search certificates to be issued by the computer holding the register responding to a requisition for a search from a solicitor's computer without need for any action by a local authority employee.

The Government welcome the idea in principle but I regret that I cannot advise Members of the Committee to accept the amendments before us. The amendments fail to deal with important problems. The amendment was first brought forward at such a late stage, and it raises difficult new issues. I cannot give the usual undertaking to take it away and consider it. There are no problems with the principle. However, I do not think that we have sufficient resources to resolve the questions of the kind that I mentioned before the remaining stages of the Bill. What I can suggest is that officials will be glad to discuss the question with the noble Lord's advisers to establish a basis on which progress might be made on some suitable occasion.

Lord Evans of Claughton

I speak as a conveyancing solicitor. I suspect that the offer that the Minister has made would be sufficient. As anyone who has engaged in conveyancing knows, the solicitors always get blamed for the delays caused by searches and the administrative delays at local government level. To give the Committee an instance, it takes between 16 and 18 weeks to obtain a local land charge registry search from the City of Liverpool; it takes three days to obtain the same search from Ellesmere Port Borough Council because they use more up-to-date equipment.

The basic problem is that electronic equipment is not accepted as a search in writing. That is what the noble Lord is trying to ensure: that an electronic representation of a search will be as good in the eyes of the law —if this amendment or a similar one were accepted —as a written reply. I am sure that this very desirable aim can be brought about by discussions between the noble Lord and the appropriate departments. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 184ZB: Page 208, line 23, at end insert— 11A. In section 102 of that Act (appointment of committees) —

1. (a) in paragraph (a) of subsection (1), after "may appoint a committee" there shall be inserted "or a sub-committee"; and
2. (b) in subsection (2), for "the appointing committee" there shall be substituted "the appointing authority or committee (as the case may be)" ").

The noble Lord said: When I was a member of the Greater London Council, at the first meeting after the annual meeting of the council, all the committees and sub-committees of the council were appointed at the same time. In other words, we did not go through the time-consuming and delaying procedure of not appointing sub-committees until the committees had formally met.

The Local Government Act 1972 does not make it clear that that is a proper way to proceed although it is clearly a more sensible way to proceed. The purpose of this amendment is to put beyond doubt that this economic and perfectly democratic procedure is permitted under the Local Government Act. I beg to move.

Lord Hesketh

Under Section 102 of the Local Government Act 1972 sub-committees may be appointed only by a committee of the council. This amendment would enable councils to appoint sub-committees directly if they wished to do so. It is a helpful amendment to the existing legislation which the Government are glad to be able to accept.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 184A: Page 208, line 39, at end insert — ("13A.—(1) In section 42(6) of that Act, in the definition of "Housing Revenue Account dwelling", for the words from "Part XIII of the Housing Act 1985)" to the end there shall be substituted the words "Part VI of the Local Government and Housing Act 1989)". (2) This paragraph has effect for years beginning on or after 1st April 1990 and in this sub-paragraph "year" has the same meaning as in Part XIII of the Housing Act 1985 (general financial provisions).").

The noble Lord said: This is a consequential amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 184B not moved.]

Lord Hesketh moved Amendment No. 185ZB: Page 210, line 27, at end insert— (" . In Schedule 2 to that Act (meaning of "relevant licence" and "relevant tenancy"), in paragraph 2 (meaning of "relevant tenancy") after "applies" there shall be inserted "a tenancy to which Schedule 9 to the Local Government and Housing Act 1989 applies".").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 185: Page 210, line 27, at end insert —

("The Rent Act 1977

("26A. In section 74 of the Rent Act 1977 (regulations made by Secretary of State), in subsection (1), in paragraph (b) (procedure of rent officers and rent assessment committees) after "1988" there shall be inserted "or Schedule 9 to the Local Government and Housing Act 1989".

26B. —(1) In section 116 of that Act (dwelling subject to statutory tenancy: works to which the tenant is unwilling to consent) in subsection (2) for the words from "paragraph (a)" to "paragraph (b)" there shall be substituted "any of paragraphs (a) to (c)".

(2) At the end of subsection (3) of that section there shall be added "or

(c) that the works were specified in an application for a renovation grant, a common parts grant, a disabled facilities grant or an HMO grant under Part VIII of the Local Government and Housing Act 1989 and the application has been approved."

(3) At the end of subsection (5) of that section there shall be added the words "or, as the case may be, with any condition under section 112(2) of the Local Government and Housing Act 1989".").

26C.—(1) In section 137 of that Act (effect on sub-tenancy of determination of superior tenancy), in subsection (5) after the words "a protected tenancy" there shall be inserted "or an assured tenancy, within the meaning of Part I of the Housing Act 1988".

(2) In subsection (6) of that section —

1. (a) in paragraph (a) after "1954" there shall be inserted "or, as the case may be, served under paragraph 4(1) of Schedule 9 to the Local Government and Housing Act 1989";
2. (b) in paragraph (b) for the words "that Act" there shall be substituted "the said Act of 1954 or, as the case may be, paragraph 3 of the said Schedule 9"; and
3. (c) in the words following paragraph (b) for the words "Part I of that Act" there shall be substituted "Part I of the said Act of 1954 or, as the case may be, the said Schedule 9".

The Protection from Eviction Act 1977

. In section 8 of the Protection from Eviction Act 1977 (interpretation), in subsection (1) (meaning of "statutorily protected tenancy") after paragraph (e) there shall be inserted (f) a tenancy to which Schedule 9 to the Local Government and Housing Act 1989 applies".").

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 185B: Page 211, line 26, at end insert—

("Rent (Scotland) Act 1984

. In section 58(7) of the Rent (Scotland) Act 1984 (power to vary sum of £104 specified in phasing formula under section 58(2)) for the words "the sum specified in" there shall be substituted the words "or repealing any of the provisions or.").

The noble Lord said: With this amendment I shall speak also to Amendment No. 193. During the passage of the Housing (Scotland) Act through Parliament last year, we made it clear that we intended to move in stages towards abolition of phasing of rent increases. To achieve that for secure tenancies let by housing associations, it is necessary to amend the rent increase formula in Section 58(2) of the Rent (Scotland) Act 1984. Unfortunately, as it stands at present, my right honourable friend the Secretary of State for Scotland has powers to amend only one element of that formula —the sum specified in Section 58(2). The amendment will allow him to change any part of the formula by order and will bring the phasing of housing associations' secure tenancies into line with the phasing arrangements already in existence for regulated tenancies. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 185C: Page 211, line 26, at end insert —

("The County Courts Act 1984

. In section 77 of the County Courts Act 1984 (appeals: general provisions), in subsection (6) after paragraph (ee) there shall be inserted the following paragraph — (ef) paragraph 13(4) of Schedule 9 to the Local Government and Housing Act 1989; or".").

On Question, amendment agreed to.

[Amendment No. 185D had been withdrawn from the Marshalled List.]

Lord Hesketh moved Amendment No. 186: Page 211, line 31, at end insert — ("31A. In each of sections 47(4) and 48(3A) of that Act (limitation of services charges etc.), after the words "Part XV" there shall be inserted "of this Act or Part VIII of the Local Government and Housing Act 1989".").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 187: Page 211, line 38, at end insert — ("33A. In section 100 of that Act (power to reimburse cost of secure tenant's improvements), after subsection (2) there shall be inserted the following subsection — (2A) In subsection (2)—

1. (a) the reference to an improvement grant under Part XV includes a reference to a renovation grant, disabled facilities grant or HMO grant under Part VIII of the Local Government and Housing Act 1989; and
2. (b) the reference to a common parts grant under Part XV includes a reference to a common parts grant under the said Part VIII."

33B. In section 101 of that Act (rent not to be increased on account of tenant's improvements), after subsection (1) there shall be inserted the following subsection — (1A) In subsection (1) —

1. (a) the reference to an improvement grant under Part XV includes a reference to a renovation grant, disabled facilities grant or HMO grant under Part VIII of the Local Government and Housing Act 1989; and
2. (b) the reference to a common parts grant under Part X includes a reference to a common parts grant under the said Part VIII.".

33C. In section 244 of that Act (environmental works), in subsection (3) after the word "works" there shall be inserted "(a)", after the word "grant", in the last place where it occurs, there shall be inserted "under Part XV" and at the end there shall be added "or (b) which are included in the external works specified in a group repair scheme, within the meaning of Part VIII of the Local Government and Housing Act 1989, in which the person concerned is eligible to participate. (3A) In subsection (3) —

1. (a) the reference to an improvement grant under Part XV includes a reference to a renovation grant, disabled facilities grant or HMO grant under Part VIII of the Local Government and Housing Act 1989; and
2. (b) the reference to a common parts grant under Part XV includes a reference to a common parts grant under the said Part VIII."

33D. In section 255 of that Act (general powers of local housing authority in general improvement areas) after subsection (2) there shall be inserted the following subsection — (3) In subsection (2)(b) —

1. (a) the reference to an improvement grant under Part XV includes a reference to a renovation grant, disabled facilities grant or HMO grant under Part VIII of the Local Government and Housing Act 1989; and
2. (b) the reference to a common parts grant under Part XV includes a reference to a common parts grant under the said Part VIII."")

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 187A: Page 213, line 16, leave out ("individual") and insert ("different corporations or groups of')

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 187B: Page 214, line 12, at end insert— ("51A. In Schedule 16 to that Act (local authority mortgage interest rates), for paragraph 4 there shall be substituted the following paragraph — 4. —(1) The rate declared under paragraph 3(a) or (b) shall be a rate calculated in such manner as the Secretary of State may determine. (2) A determination under this paragraph —

1. (a) may make different provision for different cases or descriptions of cases, including different provision for different areas, for different local authorities or for different descriptions of local authorities; and
2. (b) may be varied or withdrawn by a subsequent determination.

(3) As soon as practicable after making a determination under this paragraph, the Secretary of State shall send a copy of the determination to the local authority or authorities to which it relates." ")

On Question, amendment agreed to.

[Amendment No. 188 had been withdrawn from the Marshalled List.]

Lord Hesketh moved Amendment No. 188ZA: Page 214, line 12, at end insert —

("The Landlord and Tenant Act 1985

51A. In section 14 of the Landlord and Tenant Act 1985 (leases to which section 11—repairing obligations in short leases —applies: exceptions), in subsection (4) after the words "Rent Act 1977" there shall be inserted "or paragraph 8 of Schedule 1 to the Housing Act 1988".

51B. In section 20A of that Act (service charges) after the words "Housing Act 1985" there shall be inserted "or Part VIII of the Local Government and Housing Act 1989" and at the end there shall be added the following subsection—

"(2) In any case where —

1. (a) relevant costs are incurred or to be incurred on the carrying out of works which are included in the external works specified in a group repair scheme, within the meaning of Part VIII of the Local Government and Housing Act 1989, and
2. (b) the landlord participated or is participating in that scheme as an assisted participant, the amount which, in 539 relation to the landlord, is the outstanding balance determined in accordance with subsections (3) and (4) of section 122 of that Act shall be deducted from the costs, and the amount of the service charge payable shall be reduced accordingly."

51C. —(1) In section 21 of that Act (summary of relevant costs for the purposes of service charges), in subsection (5) after the words "Housing Act 1985" there shall be inserted "or Part VIII of the Local Government and Housing Act 1989".

(2) After subsection (5A) of that section there shall be inserted the following subsection —

"(5B) The summary shall state whether any of the costs relate to works which are included in the external works specified in a group repair scheme, within the meaning of Part VIII of the Local Government and Housing Act 1989, in which the landlord participated or is participating as an assisted participant."").

The noble Lord said: Amendment No. 188ZA makes minor consequential amendments to Sections 14, 20A and 21 of the Landlord and Tenant Act 1985. I beg to move.

On Question, amendment agreed to.

[Amendment No. 188ZB not moved.]

Lord Evans of Claughton moved Amendment No. 188ZC: Page 214, line 12, at end insert —

("The Landlord and Tenant Act 1985

In section 8 in subsection 4 of The Landlord and Tenant Act 1985 the words "The rent limit for the application of this section is shown by the following Table by reference to the date of making of the contract and the situation of the premises" shall be omitted.")

The noble Lord said: This is another amendment to deal with Section 8 of the Landlord and Tenant Act 1985 —unfit housing. We seek to restore a remedy to remove the artifically low rent limits above which there is no implied requirement that premises should be fit for human habitation.

Section 8 of the Landlord and Tenant Act 1985 imports into tenancy agreements an obligation on landlords to ensure that premises let are fit for human habitation. I gather that its future has been the subject of consultation by the Department of the Environment over the summer. In theory, it allows tenants the right to take action through the courts to compel their landlords to make premises fit for human habitation and to pay compensation for illness, loss of property and discomfort caused by living in unfit premises. Unfortunately, Section 8 applies currently only to tenancies where the rent is less than £80 per annum in Greater London and less than £52 per annum elsewhere. Despite inflation, those rates have not been increased since 1957. This important section has been in force under previous Acts since the turn of the century and has therefore ceased to be of any practical use to almost all tenants. Therefore, the protection provided by Section 8 needs to be modernised and the limits changed.

It is nonsense that at present the law permits landlords to let premises which are unfit for human habitation. It is worse than nonsense in this day and age that that can be permitted due to the out of date nature of the rent limits. This proposal aims to modernise a useful, important and humane section of the housing legislation. I believe that the Government should be in favour of such a change and should have brought it in themselves. I am suggesting that they may now remedy that defect. I beg to move.

Lord Hesketh

This amendment repeals subsections (3) and (4) of Section 8 of the Landlord and Tenant Act 1985 which restrict the application of that section to certain properties. The Committee will be aware that Section 8 of the Act provides that it shall be an implied term of certain tenancies that the property shall be fit for human habitation at the commencement of the tenancy and throughout the tenancy. It only applies to certain tenancies within very low rent limits.

Following the undertaking given in Committee in another place, my department went out to consultation on various options for amending Section 8. We have received all responses from consultation and are now considering them. A high proportion of the responses were in favour of removing the rent limits altogether, as the noble Lord's amendment suggests. However, we need to consider whether that is the best course of action, particularly in the light of the fact that the Law Commission has announced that it is reviewing the law relating to repairing obligations. I hope the Committee will accept that it is premature at this stage to give a firm undertaking as to our intentions as regards this section of the Act. However, we are very conscious of the need to do something in this area of the law. I hope that the noble Lord, Lord Evans, will accept my assurances and will withdraw his amendment.

Lord Evans of Claughton

I will of course accept the assurance, partly because of the lateness of the hour and partly because I have no alternative. I hope that the Minister's expressed intentions will be realised in legislation early in the new Session. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sanderson of Bowden moved Amendment No. 188B: Page 214, line 17, at end insert —

("The Housing (Scotland) Act 1987

. In section 62(1) of the Housing (Scotland) Act 1987 (price at which secure tenant entitled to buy house to be market value less discount) there shall be inserted after "fixed" the words "as at the date of service of the application to purchase".").

The noble Lord said: This amendment makes clear on the face of the legislation that the price of a house purchased under the right-to-buy provisions of Part III of the Housing (Scotland) Act 1987 is to be calculated at the date of service of the tenant's application to purchase. This is therefore a clarificatory amendment which I commend to the Committee.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 188A: Page 214, line 17, at end insert — (". In section 239A(1) of that Act (directions to prevent duplications of grant), at the end there shall be inserted the words "or are or are not to perform their duties under this Part" ").

The noble Lord said: This amendment will enable the Secretary of State to give directions to local authorities and to Scottish Homes as to the exercise of their duties under Part XIII of the Housing (Scotland) Act 1987 as well as to the exercise of their powers under that Act.

The direction-making power in its amended form will enable the Secretary of State to set out clearly the respective roles of local authorities and Scottish Homes in relation to their duties as well as their powers. I beg to move.

On Question, amendment agreed to.

Lord Evans of Claughton moved Amendment No. 188BB: Page 214, line 17, at end insert —

("Landlord and Tenant Act 1987

( ) In subsection (2) of section 4 paragraph (1) shall be omitted").

The noble Lord said: I am confident, even at this late hour, that the Government will welcome this amendment as it helps their cherished right-to-buy legislation. In fact it closes a loophole in the new tenant's right of first refusal where the freehold of a block of flats is transferred.

The Landlord and Tenant Act 1987, as I am sure the Committee will well remember, passed through Parliament rapidly on the calling of the 1987 general election, thus curtailing full debate and the opportunity to consider detailed amendments. I wonder where I have heard that before! Therefore the Law Society has suggested that this might be an opportune time to put in an amendment deleting paragraph (1) of Section 4(2) of that Act and exempt from the definition of "relevant disposal" the words, where the landlord is a body corporate, a disposal to an associated company".

The right of first refusal therefore does not arise when that kind of disposal is made.

As it stands, this provision creates an avoidance device by which the objectives that the Government intended to put in the Act can be entirely avoided. The unscrupulous landlord has two options. The landlord reversioner can set up a shell associated company, transfer the reversion to it and then sell the shares in it. Alternatively, the landlord reversioner can create an intermediate lease in favour of Z Limited for over seven years to circumvent Section 2(2) which states that where a person who is the immediate landlord is himself a tenant of the premises under a tenancy for a term of less than seven years the superior landlord shall also be regarded as the landlord in relation to those premises.

He would then sell the reversion subject to that short and virtually worthless lease and sell the shares in Z Limited to the intended purchaser. Having thereby created an intermediate lease outside the provisions of the Act, the reversion would not then be the immediate reversion and therefore the tenant's rights of first refusal would not be triggered.

I gather that the Department of the Environment acknowledged that there is a problem, but it has delayed any subsequent legislative action due, it says, to lack of parliamentary time. We now have the opportunity—though perhaps not the time—for legislative action and that is why I have tabled this amendment; to prevent Section 4(2)(1) from being used as an avoidance device. I beg to move.

4.15 a.m.

Lord Hesketh

We accept that this exemption could in theory provide a means of avoiding the right of first refusal. Company landlords could transfer a property to an associated company and then dispose of it by selling that company. However, I have to say that we have yet to see any substantive evidence of such abuses taking place. Quite frankly, it would be surprising if landlords were to think it worth setting up associated companies simply in order to deny tenants the right of first refusal.

The possibility of catching disposals of companies whose assets consisted of a block of flats was carefully considered during the passage of the 1987 Act. However, we were forced to the conclusion that it was simply not practicable to devise a satisfactory way of dealing with this sort of disposal without imposing intolerable interference in normal commercial transactions of all sorts. This amendment would, I am afraid, do just that.

We shall be monitoring the operation of the 1987 Act as a whole and we shall certainly not lose sight of this particular aspect. But, given the practical problems I have referred to —and the lack of evidence of any widespread abuses —I hope the noble Lord will not see fit to press his amendment at this early hour.

Lord Evans of Claughton

I shall not be pressing the amendment at this early hour, but my proposal has the merit of simplicity and I hope that the Government will consider it in their general consideration of the abuse by certain landlords of the tenants' right of first refusal. There is a problem and I hope that the Government will legislate in due course. In a general feeling of possible optimism —or, more probably, light-headedness —at this hour I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 188BA: Page 214, line 40, leave out from beginning to end of line 51 on page 215.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 188C: Page 215, line 51, at end insert —

("The Housing (Scotland) Act 1988

In section 16 of the Housing (Scotland) Act 1988 —

1. (a) in paragraph (b) (ii) of subsection (I) (tenant under statutory assured tenancy not bound by certain original provisions for rent increases)—
1. (i) after the words "specified in" there shall be inserted the words "or fixed by reference to factors specified in"; and
2. (ii) after the words "there specified" there shall be inserted the words ", or fixed by reference to factors there specified,"; and
543
2. (b) after that subsection there shall be inserted the following subsection —

"(1A) The factors referred to in subsection (1)(b)(ii) above must be —

1. (a) factors which, once specified, are not wholly within the control of the landlord; and
2. (b) such as will enable the tenant at all material times to ascertain without undue difficulty any amount or percentage falling to be fixed by reference to them.".

In section 24 of that Act—

1. (a) in subsection (1) (procedure for securing rent increase in assured tenancies) —
1. (i) for the word "an" there shall be substituted the words "a statutory"; and
2. (ii) in each of paragraphs (a) and (b), after the word "was" there shall be inserted the words "at the time of service of the notice".
2. (b) in subsection (5) (saving, from rent increase procedure for assured tenancies, of operation of certain tenancy provisions for such increases)—
1. (i) for the words from "affects" to "tenancy", where first occurring, there shall be substituted the following—
• "(a) extends to a statutory assured tenancy of which there is a term".
2. (ii) after the words "specified in" there shall be inserted the words ", or fixed by reference to factors specified in,";
3. (iii) after the words "there specified" there shall be inserted the words ", or fixed by reference to factors there specified,"; and
4. (iv) there shall be inserted at the end the words "or
• (b) affects the operation of any term of a contractual tenancy which makes provision for an increase in rent (including provision whereby the rent for a particular period will or may be greater than that for an earlier period)"; and
3. (c) after that subsection there shall be inserted the following subsection —

"(6) The factors referred to in subsection (5) above must be —

1. (a) factors which, once specified, are not wholly within the control of the landlord; and
2. (b) such as will enable the tenant at all material times to ascertain without undue difficulty any amount or percentage falling to be fixed by reference to them.".".

The noble Lord said: In moving this amendment I shall speak, with leave, also to Amendment No. 192. These amendments result from our experience of operating the assured tenancy provisions of the Housing (Scotland) Act 1988 since January this year.

In short, the provisions of Sections 16 and 24 of the Act have not operated fully as we had intended. It had always been our objective to ensure that whatever tenancy terms relating to rent increases were agreed between landlord and tenant they should apply as long as the contractual tenancy agreement between them was in force. Only when the tenancy was formally terminated, but the tenant exercised his right to security of tenure —thus making his tenancy a statutory one —did we intend that the special arrangements in Section 24 should come into play if the rent increase provisions in the contract could not be carried through into the statutory tenancy under Section 16.

However, since January some doubt has emerged about whether the provisions as enacted provide for that. In particular some housing associations have taken the view that they must terminate a tenancy before seeking a rent increase to reflect their costs. This is clearly highly undesirable, and so we propose to amend Section 24 to state explicitly that it does not apply while a tenancy is contractual.

The second matter which the amendment addresses is the kind of rent increase formula that should carry through automatically into a statutory assured tenancy. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 188CA: Page 216, line 2, leave out ("21 of the Housing Act 1988") and insert ("7 of the Housing Act 1988 (orders for possession), in subsection (3) for the words "subsection (6)" there shall be substituted "subsections (5A) and (6)". (2) In subsection (4) of that section for the words "subsection (6)"there shall be substituted "subsections (5A) and (6)". (3) In subsection (5) of that section there shall be inserted the following subsection — (5A) The court shall not make an order for possession of a dwelling-house let on an assured periodic tenancy arising under Schedule 9 to the Local Government and Housing Act 1989 on any of the following grounds, that is to say, —

1. (a) Grounds 1, 2 and 5 in Part I of Schedule 2 to this Act;
2. (b) Ground 16 in Part II of that Schedule; and
3. (c) if the assured periodic tenancy arose on the termination of a former 1954 Act tenancy, within the meaning of the said Schedule 9, Ground 6 in Part I of Schedule 2 to this Act."

. In section 15 of that Act (limited prohibition on assignment etc. without consent), in subsection (3) after the words, "which is not a statutory periodic tenancy" there shall be inserted "or an assured periodic tenancy arising under Schedule 9 to the Local Government and Housing Act 1989". . In section 21 of that Act").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 188CC: Page 216, line 5, at end insert — ("59A. In section 34 of that Act (new protected tenancies etc. restricted to special cases) in subsection (1) for paragraph (d) there shall be substituted the following paragraph — (d) it is a tenancy under which the interest of the landlord was at the time the tenancy was granted held by a new town corporation, within the meaning of section 80 of the Housing Act 1985, and, before the date which has effect by virtue of paragraph (a) or paragraph (b) of subsection (4) of section 38 below, ceased to be so held by virtue of a disposal by the Commission for the New Towns made pursuant to a direction under section 37 of the New Towns Act 1981". 59B. In section 35 of that Act (removal of special regimes for tenancies of housing associations etc.) in subsection (2) for paragraph (d) there shall be substituted the following paragraph (d) it is a tenancy under which the interest of the landlord was at the time the tenancy was granted held by a new town corporation, within the meaning of section 80 of the Housing Act 1985, and, before the date which has effect by virtue of paragraph (a) or paragraph (b) of subsection (4) of section 38 below, ceased to be so held by virtue of a disposal by the Commission for the New Towns made pursuant to a direction under section 37 of the New Towns Act 1981". 59C.—(1) In section 38 of that Act (transfer of existing tenancies from public to private sector) at the beginning of subsection (3) there shall be inserted "Subject to subsections (4) and (4A) below". (2) In subsection (4) of that section (special provisions for tenancies held of a new town corporation) after the words "Housing Act 1985" there shall be inserted "and which subsequently ceases to be so held by virtue of a disposal by the Commission for the New Towns made pursuant to a direction under section 37 of the New Towns Act 1981". (3) After subsection (4) of that section there shall be inserted the following subsection — (4A) Where, by virtue of a disposal falling within subsection (4) above and made before the date which has effect by virtue of paragraph (a) or paragraph (b) of that subsection, the interest of the landlord under a tenancy passes to a registered housing association, then, notwithstanding anything in subsection (3) above, the tenancy shall continue to be a secure tenancy and to be capable of being a housing association tenancy." ").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 188CB: Page 216, line 5, at end insert — ("In section 105 of that Act (consent required for subsequent disposals after change of landlords under Part IV),

1. (a) at the end of subsection (4) (consent may be subject to conditions) there shall be added the words "and, without prejudice to the generality of the conditions subject to which consent may be given, a condition may be imposed requiring a payment by the new landlord either to the public sector landlord from whom he or, where subsection (3) above applies, a predecesor of his acquired the property or to such other person as may be specified in the consent"; and
2. (b) in subsection (7) (exempt disposals) in paragraph (b) for the words from "having the right" onwards there shall be substituted "exercising the right to buy it under Part V of the 1985 Act".").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 188D: Page 216, line 6, leave out paragraph 60.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 188DA: Page 216, line 9, at end insert — (" . In Schedule 2 to that Act (grounds for possession of dwelling-house let on assured tenancies), in Part I (grounds on which court must order possession), in Ground 6 in the paragraph following paragraph (c)—

1. (a) after the words "joint tenants", in the second place where they occur, there shall be inserted "of the dwelling-house concerned";
2. (b) for the words "of the dwelling-house concerned" there shall be substituted "or, as the case may be, under a tenancy to which Schedule 9 to the Local Government and Housing Act 1989 applied"; and
3. (c) after the words "earlier assured tenancy", in the second place where they occur, there shall be inserted "or, as the case may be, to the grant of the tenancy to which the said Schedule 9 applied".").

On Question, amendment agreed to.

Lord Evans of Claughton moved Amendment No. 188DB: Page 216, line 17, at end insert— ("( ) In subsection (1) of section 34 of that Act, for the words "cannot be a protected tenancy, unless—", there shall be substituted the words "shall be a protected tenancy, if—").

The noble Lord said: This amendment seeks to protect protected tenants and to make clear that the effect of Section 34(1)(b) of the Housing Act 1988 is to preclude the landlord from granting a new assured tenancy to an existing protected tenant. The concern is that a new tenancy granted to an existing tenant may have expressly to state that it remains a protected tenancy if Section 34(1)(b) is to apply.

Are private tenants only to have the protection if they claim it? It is generally assumed that this section prevents the landlord from granting a new assured tenancy to an existing protected tenant. However, I am advised that the language of Section 34(1) is ambiguous. The words, cannot be a protected tenancy unless are permissive and not mandatory. This amendment would ensure that there was no uncertainty. I shall be glad to know from the Minister what his views are. I beg to move.

Lord Hesketh

The amendment proposed by the noble Lord, Lord Evans, would cause some tenancies covered by Section 34 to be protected tenancies even though they would otherwise be outside the scope of the Rent Act because they did not meet the qualifying conditions. This would have extended Rent Act protection to people who previously did not have it. If the noble Lord intends to achieve by his amendment the certainty that the landlord cannot choose to be in or outside the scope of the Rent Act then we believe that the amendment is unnecessary because we have not repealed the relevant provisions in the Rent Act. That is why we cannot accept the amendment.

Lord Evans of Claughton

That is a fairly clear expression of the views of the Government. I shall take the matter away, think about it and consult those advising me. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Evans of Claughton moved Amendment No. 188DC: ("( ) In subsection (1) of section 5 of that Act at the end there shall be added the words "(and section 45(4) of this Act shall not apply to this subsection)").

The noble Lord said: This is an amendment to confirm that the provisions for relief against forfeiture and re-entry can operate in assured and assured shorthold tenancies. Section 5 of the Housing Act 1988 lists the ways that assured and assured shorthold tenancies can be brought to an end, but Section 45(4) appears by mistake to have excluded forfeiture and re-entry. While landlords would still rely on powers in the tenancy to bring it to an end, the tenant seems to have lost the ancient protection provided by relief from forfeiture.

The confusion is summed up in a number of books on the subject. It is unclear whether Section 45, added on Report in Committee in another place, has the effect of disapplying the whole of the law of forfeiture and reliefs therefrom. That is what it seems to do. I am concerned to try to discover what the effect is and whether the amendment might prove to be the remedy to the problem. If proceedings brought against a fixed term tenant of an assured tenancy during the currency of a fixed term are not forfeiture proceedings, the tenant is not entitled to seek relief from forfeiture. This would be a serious loss of ancient and common law rights. I hope that the Minister can reassure me. I beg to move.

Lord Hesketh

This amendment concerns a landlord's power to determine a fixed term assured tenancy before the expiry of the fixed term. I believe that noble Lords are concerned that since under Section 45(4) a power to determine does not include a reference to a power of re-entry or forfeiture the landlord cannot exercise the power of re-entry or forfeiture under Section 5(1) of the Act.

Section 17(6) of the Act makes it clear that it is possible for a landlord to determine a tenancy during the currency of a fixed term. If a landlord determines the tenancy during the currency of the fixed term, the statutory periodic assured tenancy arises automatically. So long as there is a provision in the tenancy for it to be brought to an end on one of the breach grounds in Schedule 2 the court can make an order for possession. The landlord has no need to exercise the power of re-entry or forfeiture in these cases. He simply proceeds to take the tenant, who is now a statutory periodic assured tenant, to court on whichever ground he is using to prove his case for possession. I hope the Committee will accept that there is no need for this amendment and that the noble Lord will feel able to withdraw it.

Lord Evans of Claughton

I shall consider what the Minister has said when I read it in Hansard. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Evans of Claughton moved Amendment No. 188D: Page 216, line 17, at end insert — ("( ) In section 13 in subsection 1(b) the words "other than one in relation to which there is a provision for the time being binding on the tenant under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period" shall be omitted.").

The noble Lord said: I am sure the Committee will be devastated to know that this is the last in my list of amendments. Its purpose is to ensure that a contractual provision in a lease allowing for a rent increase cannot be used as a means of evading the security of tenure provided for an assured tenant.

Section 13 of the 1988 Act provides a special procedure for the variation of rents from an assured periodic tenancy. The landlord serves notice proposing a new rent which a tenant, if in disagreement, may refer to the rent assessment committee. This statutory review procedure is excluded by Section 13(1)(b), where a periodic tenancy has a rent review clause. In these circumstances, a rent increase is governed by the mechanism provided for in the lease. The danger is that an unscrupulous landlord may insert a rent review clause in the lease in order to exclude access to the rent assessment committee. The landlord is then free to increase the rent with no external checks. If the increase is unreasonably high, it will have the effect of forcing the tenant out.

We have discussed this matter before during the Committee stage. I put this amendment forward in the hope of preventing contractual provisions for increasing rent from being quite wrongly used as a means of avoiding long-term security. I beg to move.

4.30 a.m.

Lord Hesketh

This amendment is directed at Section 13 of the Housing Act 1988, which establishes the statutory procedure for increasing the rent under an assured periodic tenancy. As it stands, the procedure involving a right of access to the rent assessment committee applies to assured periodic tenancies, other than those for which there is provision in the tenancy agreement itself for increasing the rent.

The effect of the amendment would be to extend the statutory procedure to all the assured periodic tenancies. With this amendment we turn to an issue which we discussed at some length last year when the Government's proposal for deregulating private sector elections was before this Chamber. Those proposals have now been put into effect under Part I of the Housing Act.

In framing the new assured tenancy procedure, we took the firm view that the rent must be the first and foremost matter of free negotiation of agreement between the landlord and tenant, with statutory rent-fixing procedures being reserved only for those cases where it was genuinely needed. We saw this as an essential and entirely proper feature of the free market principle which we wanted to apply to the private rented sector. Hence we provided the legislation that in creating an assured tenancy the landlord and tenant are free to agree not only the initial rent but also, if they wish, a contractual provision for reviewing the rent at subsequent intervals during the tenancy. Where they agree on such a mechanism that is then binding on both parties with no provision for it to be overridden by any statutory provision. We remain of the firm conviction that deregulation represents an effective way of reviving private renting. It is too early to draw conclusions as to the impact, but we believe that this is going well and therefore we shall resist this amendment.

Lord Evans of Claughton

If the Minister is going to resist the amendment I think that it is too late at night for me to confront him any further on the matter. I hope that his optimism will not prove to be unfounded. I beg leave to withdraw the amendment at this stage.

Amendment, by leave, withdrawn.

Schedule 10, as amended, agreed to.

Schedule 11 [Enactments Repealed]:

Lord Hesketh moved Amendments Nos. 188E to 188G: Page 216, line 31, column 3, at end insert—

("In section 55, the words from "The term "conservancy authority" "onwards.")

Page 218, line 41, at end insert—

("4 and 5 Eliz. 2. c. 60.

The Valuation and Rating (Scotland) Act 1956.

Section 22(4).").

Page 219, line 36, column 3, at end insert—

("In section 73, subsections (4) and (5).").

On Question, amendments agreed to.

[Amendment No. 188GA not moved.]

Lord Hesketh moved Amendments Nos. 188HA to 188MA: Page 220, line 22, at end insert —

("1979 c. 55.

The Justices of the Peace Act 1979.

In section 59, in subsection (1)(a) the words "or this Part".").

Page 220, line 22, at end insert —

("1980 c. 45.

The Water (Scotland) Act 1980.

Section 40(7).").

Page 220, line 51, column 3, at end insert —

("In section 191(3) the words "(repair notice in respect of unfit dwellinghouse)".".

Page 220, line 57, leave out ("Section") and insert ("Sections 205 and"). Page 221, line 5, column 3, at end insert—

("Section 266.").

Page 221, line 24, column 3, at end insert—

("In section 300, subsection (4).").

Page 221, line 25, column 3, at end insert—

("In section 315(1)(a) the words "or person having control".").

Page 221, line 39, column 3, at end insert—

	("In section 346, in subsection (1) paragraph (b) and the word "and" immediately preceding it and in subsections (2) and (3) the words "or building' in each place where they occur.
	In section 349, in subsection (2)(b) the words "and buildings".
	In section 350, in subsection (1) the words "or building" in each place where they occur.
	Section 352(6).
	Sections 366 and 367.
	In section 369, in subsection (3), paragraph (b), in paragraph (c) the words from "and in particular" onwards and paragraph (f); in subsection (5) the words from "as applied" to "a house".
	Sections 370 and 371.
	In section 372(1) the words from "to which" to "management code)", the word "or" at the end of paragraph (a) and paragraph (b).
	Section 374.
	In section 375, in subsection (1) the word "366".").

Page 221, line 40, column 3, after ("376") insert ("in subsection(1) the word "366"). Page 221, line 43, column 3, at end insert—

	("In section 377, in subsection (1)(a) the word "366".
	In section 378, in subsection (2)(a) the word "366".
	Section 379(1)(c), except the word "or".

	In section 381, in subsection (4) the words "366, 370".
	In section 392, in subsection (5)(a) the word "366".").

Page 222, line 26, column 3, at end insert —

("In Schedule 5, paragraph 11").

Page 222, line 40, column 3, at end insert —

("In Schedule 13, in paragraph 21(4), the word "366" in paragraph (a), the word "or" at the end of paragraph (b), paragraph (c) and the words "or order".").

Page 222, line 46, column 3, after ("(4)(a)") insert ("and paragraphs (c) to (f) of sub-paragraph (8)"). Page 222, line 52, column 3, at beginning insert—

("Section 1.").

Page 222, line 53, column 3, at end insert —

("Section 42(1)(d).").

Page 222, line 54, column 3, at end insert—

("In Schedule 5, sub-paragraphs (1) and (5) of paragraph 10,").

Page 222, line 55, column 3, before ("Section 80") insert —

("In section 61(10)(a)(v), the words "in the discretion of the landlord").

Page 222, line 55, column 3, at beginning insert—

("Section 69.").

On Question, amendments agreed to.

[Amendment No. 188NA not moved.]

[Amendment No. 188NB had been withdrawn from the Marshalled List.]

Lord Hesketh moved Amendments Nos. 188NC to 188R: Page 223, line 25, at end insert —

("In section 44(2), the words from "or" to the end. In section 46(2), the words from "or" to the end.").

Page 223, line 26, leave out ("53(4)") and insert ("77"). Page 223, line 26, at end insert—

	("In section 55(7)(b) the words "at a prescribed rate".
	In section 98(3)(d) the words "and calculated in a prescribed manner".
	In section 99(2)(d) the words "at such rate as may be prescribed".").

Page 223, line 27, column 3, at end insert—

("Section 119.").

Page 223, line 27, at end insert—

("In Schedule 2, paragraph 12.").

Page 223, line 27, at end insert—

("In Schedule 6, in paragraph I the words", and parts of them," and paragraph 4.").

Page 223, line 38, at end insert—

("1988 c. 43

The Housing (Scotland) Act 1988.

Section 2(6).").

Page 223, line 39, column 3, at beginning insert—

("In section 103, in subsection (4), at the end of paragraph (d) the word "and".").

Page 223, line 39, column 3, at beginning insert ("Section 129(5)(b)."). Page 223, line 41, column 3, leave out ("22, paragraph 14") and insert ("25, paragraph 19 and in paragraph 80(2), the words from "to", in the first place where it occurs, to "his power", in the first place where they occur."). Page 223, line 45, leave out ("and the repeal in section 30 of the Social Security Act 1986") and insert (", section 30 of the Social Security Act 1986 and section 129 of the Housing Act 1988").

On Question, amendments agreed to.

Schedule 11, as amended, agreed to.

Clause 164 [Short title, commencement and extent]:

Lord Sanderson of Bowden moved Amendment No. 188RA: Page 146, line 3, after ("134") insert ("[prevention of continuation or recurrence of default of local authority: Scotland]").

The noble Lord said: This is a consequential amendment. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendments Nos. 188S to 188AB: Page 146, line 3, leave out ("149") and insert ("Reports to tenants etc. on local housing authority functions"). Page 146, line 3, after ("149") insert ("to 153, 154") In substitution for amendment 188AA. Page 146, line 3, leave out ("155") and insert ("(Power to monitor activities of registered housing associations) and (Extension of powers of Housing Corporation and Housing for Wales to give financial assistance)"). Page 146, line 3, after ("163") insert ("except in so far as it relates to paragraphs 59A to 59C of Schedule 10"). Page 146, line 3, after ("155") insert ("[publication of reports of Controller of Audit: Scotland]").

On Question, amendments agreed to.

[Amendments Nos. 189 and 190 not moved.]

Lord Hesketh moved Amendments Nos. 190ZA to 190EA: Page 146, line 13, after ("151") insert ("[sale to secure tenants of houses provided for persons of pensionable age: Scotland.]"). Page 146, line 13, after ("143") insert ("[prevention of continuance or recurrence of default of local authority: Scotland]"). Page 146, line 13, after ("149") insert ("[powers of local authorities and Secretary of State as respects services etc. for owners and occupiers of houses for work on them: Scotland.]"). Page 146, line 13, after ("151") insert ("[amendment of definition of occupation for purposes of purchase of house by secure tenant: Scotland]"). Page 146, line 13, after ("151") insert ("[application of secure tenant's right to buy to cases where landlord is lessee: Scotland]"). Page 146, line 13, after ("151") insert ("[amendment of powers of Scottish Homes to dispose of land]"). Page 146, line 13, at end insert ("(Power to monitor activities of registered housing associations)"). Page 146, line 13, at end insert ("[publication of reports of Controller of Audit: Scotland]"). Page 146, line 13, at end insert ("[duty of landlord to inform secure tenant seeking to buy house about changes in law: Scotland]").

On Question, amendments agreed to.

Clause 164, as amended, agreed to.

In The Title:

Lord Hesketh moved Amendment No. 190EB: Line 14, leave out ("and II") and insert ("II and IV").

The noble Lord said: In moving the last block of amendments, I should like to take the opportunity to thank my noble friends Lord Caithness, Lord Arran and Lord Reay, for their help with the Committee stage of this Bill. I should like also to thank the noble Lords, Lord McIntosh, Lord Dean of Beswick and Lord Graham of Edmonton, who bore the brunt of the opposition to the Bill. I should also like to thank the noble Lords, Lord Ross, Lord Evans and Lord Lloyd of Kilgerran, for contributing so much from the Liberal Benches. I should also like to thank my noble friends who supported us so ably and all other peers who contributed to our many and varied debates.

Finally, and most importantly, I should like to thank the members of the staff who have made all this possible even if we have been able to create a new game of discovering mysteries in the Public Bill Office in the Marshalled List. I am sure that I speak on behalf of us all when I thank the staff for the tremendous effort they have contributed during the Committee stage of the Bill. I beg to move.

Lord McIntosh of Haringey

I should like to reciprocate the thanks that the Minister has expressed to him and to all noble Lords, particularly my noble friends who have taken part in the work on the Bill in Committee. It has been a most unsatisfactory Committee stage. The Bill has been used as a dustbin for all sorts of amendments and rethinking which should not have taken place and should not have been necessary. It has been conducted by noble Lords with courtesy and restraint and I am grateful to them for that. I also echo sincerely the thanks which the Minister expressed to the staff and all concerned with helping the Members of the Committee in the consideration of the Bill.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 190F: Line 23, after ("emergencies") insert ("to amend sections 102 and 211 of the Local Government (Scotland) Act 1973;").

On Question, amendment agreed to.

[Amendment No. 190FA not moved.]

Lord Sanderson of Bowden moved Amendments Nos. 190HA to 193: Line 25, after ("stock") insert ("to amend certain of the provisions of the Housing (Scotland) Act 1987 relating to a secure tenant's right to purchase his house"). Line 26, after ("1976;") insert ("to confer certain powers on the Housing Corporation, Housing for Wales and Scottish Homes;"). Line 32, after ("grants") insert ("and in relation to the circumstances in which rent increases under assured tenancies may be secured;"). Line 32, after ("grants") insert ("to make, as respects Scotland, further provision in relation to the phasing of progression to registered rent for houses let by housing associations or Scottish Homes").

On Question, amendments agreed to.

Title, as amended, agreed to.

House resumed: Bill reported with amendments.

House adjourned at twenty-one minutes before five o'clock.