Lords Sitting of 25 October 1989

Preamble
The House met at half—past two of the clock: The CHAIRMAN OF COMMITTEES On the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury.

Class Action Procedures
Lord Mishcon Lord Mishcon asked Her Majesty's Government:
Whether a reference has yet been made to the Law Commissions for England and Wales and for Scotland on the question of amendments to court procedure to provide for a class action; and, if so, in what terms, and when it is expected that their reports will be received.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, following the recommendation of the civil justice review that one of the law reform agencies should carry out a study into representative or class actions, the possibility of such a study being undertaken by the Law Commission is under discussion. As was announced by my right honourable friend the Secretary of State for Scotland on 26th July 1988, the Scottish Law Commission has accepted a reference from my predecessor as Lord Advocate to consider the provision in Scottish civil procedure of a more effective remedy in situations where a number of persons have the same or similar rights. I understand that they have prepared a discussion paper which they expect to issue in the New Year.
Lord Mishcon: My Lords, I thank the noble and learned Lord the Minister for that reply. Does he recollect that some 18 months ago at Committee and Third Reading of the Legal Aid Bill, in response to an amendment that I had the privilege of moving, the Minister's noble and learned friend the Lord Chancellor said that these references would be considered? This is an urgent matter which, if grappled with, will save administrative and judicial time. The Law Commission for Scotland has already accepted the reference. Will the Minister inform his noble and learned friend the Lord Chancellor that one hopes that the English and Welsh Commission will follow the example of the Scottish Commission and speedily accept this reference?
Lord Fraser of Carmyllie: My Lords, as I have indicated, discussions are already being held. I understand that that follows upon the exchanges to which the noble Lord has referred during the passage of the Legal Aid Bill. Clearly, it is a project of major proportions. I am aware that the Scottish Law Commission—which is some way ahead in its consideration of the project—has already recognised that while the focus of public interest is in relation to personal injuries, the issue of representative or class actions has a wider application and may be of particular worth in the field of administrative law.
Lord Morris: My Lords, regarding the second part of the Question asked by the noble Lord, Lord Mishcon, can my noble and learned friend say when it is expected that the report will be received?
Lord Fraser of Carmyllie: My Lords, I believe that my noble friend is referring to the Scottish Law Commission when speaking of the second part of the Question. The Commission is hoping to publish a discussion paper on class action procedures early next year. As I have indicated, as regards the Law Commission for England and Wales, it is still a matter of discussion on what shall be the scope and nature of the inquiry, particularly bearing in mind the very important priorities that it otherwise has to meet.

Noxious Weeds on Set—Aside Land
2.46 p.m.
Lord Nugent of Guildford Lord Nugent of Guildford asked Her Majesty's Government:
What new measures they are taking to prevent the spread of noxious weeds in the countryside from fields which have been set-aside.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, since set—aside is novel, farmers will need time to develop the best management techniques, which will vary from farm to farm. We are monitoring the position carefully and would be prepared to consider further measures if these appeared necessary.
Lord Nugent of Guildford: My Lords, I thank my noble friend the Minister for her slightly emollient Answer. Is she aware that there are to be seen around our fields increasing patches of these noxious weeds, the seeds of which are blowing around to plague the fields and gardens of neighbours? Is my noble friend aware that no one likes to be the recipient of their neighbour's wild oats? Would my noble friend consider making the control of these noxious weeds one of the conditions of continuing to pay the £80 per acre for set—aside land?
Baroness Trumpington: My Lords, I take the point raised by my noble friend about not liking other people's wild oats, though I hazard a guess that both he and I have sowed a few in our time. The advice I have from ADAS is that there is no evidence that set—aside is leading directly to the increased spread of weed infestation except for thistles. Under the Weeds Act farmers have an obligation to prevent the spread of thistles. Perhaps I may commend to my noble friend, and anyone else who is interested, the publication A Practical Guide to Set—Aside. In that guide I have noted the words:
"In the first year or two, the set—aside area will be weedy, but with suitable management you should be able to develop a perennial vegetation which will be dominated by wild grasses but with a range of flowering plants, with conservation gains".
Lord Mackie of Benshie: My Lords, is the Minister aware that this problem is widespread, even in

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Scotland? Can she say whether the Government have any plans to produce a sensible scheme? Set—aside is essentially a stop—gap measure. I know that in Scotland money is being put up to investigate organic farming. I consider that to be a sensible move. Is there any move to replace set—aside in the country as a whole with a scheme which will further extensive farming regarding grassland instead of simply wasting that land in the way that is taking place at the moment?
Baroness Trumpington: My Lords, I do not want to go down the organic lane. In this Question we are talking about weeds. The correct management of set—aside land is in the interests of the participants themselves because that practice preserves the value of the land. The Government give advice notably in the practical guide to which I have referred. Fallow land should not be treated as a soft option. Those taking part in the scheme should act responsibly to avoid problems on their own or neighbouring land. Payments will be withheld if the management rules are not met.
Lord Gallacher: My Lords, does the noble Baroness recall that a year ago your Lordships' Select Committee on the European Communities looked at the first draft of proposals by the Commission for set—aside and produced a report on the subject? In that report some of the difficulties mentioned in the Question were addressed, and some solutions to those difficulties were proferred. Unfortunately, but not surprisingly, not a great deal of notice was taken of the report.
In the light of what is now developing, will the noble Baroness have another look at the summary of conclusions and recommendations in the report in order to see whether or not modifications can be made, including the rotational fallow which was put forward in the report at that time? The amount of land so far set aside amounts to only 3 per cent. of the total arable land eligible. I gather that this year not a great deal of land has been added. Thus the supervisory problem which was held to be an impediment to novel schemes is much less now than was originally anticipated. In the light of all this, is there not a case, as the noble Lord, Lord Mackie of Benshie, suggested, for a look at the whole scheme to see whether, if it is to be a permanent scheme, it cannot be suitably modified so that it is more environmentally sensitive?
Baroness Trumpington: My Lords, the total uptake for 1988–89 is 110,000 hectares, which is about 2.4 per cent. of the United Kingdom eligible area. Set—aside was never intended to act as a total means of eliminating overproduction. It was meant to help certain farmers. Local ADAS experts are available to give advice, and work currently being undertaken on our experimental husbandry farms will give the basis for further and more accurate recommendations in the future. I very much hope that they will look at the same time at the EC recommendations. As I said in my first reply, the scheme has been going for just one year. And so it is early days.
Lord Lyell: My Lords, while leaving the wild oats to my noble friend, can she say whet her farmers can obtain advice on other aspects of set—aside such as those to do with the environment?
Baroness Trumpington: My Lords, from the point of view of environmental top—up, the Countryside Commission, in consultation with the Ministry of Agriculture, is offering additional payments to farmers in the eastern counties to manage their set—aside land in ways that produce specific benefits for the environment. Some of these options involve more frequent cutting. But where a specific objective is to favour birds—for instance, the stone curlew—and other wildlife, more frequent cutting than once a year is specifically excluded.
Lord Moyne: My Lords, is the noble Baroness aware that a greater danger than thistledown is ragwort, which is known in Scotland as Stinking Willy? It causes death by convulsion in horses and otherwise in cattle. Sheep survive because they do not live long enough for the poison to build in them.
Baroness Trumpington: My Lords, I am extremely interested in the information provided by my noble friend. I can add that for spear thistle, creeping or field thistle, curl dock, broadleaved dock and ragwort or other serious infestations of wild oats, couch, black—grass or cleavers, special permission can be obtained in certain limited circumstances for the use of herbicides.
Lord Mackie of Benshie: My Lords, is any work being done on a more long—term scheme for better use of the land?
Baroness Trumpington: My Lords, various other forms of diversification are already in hand. For instance, one need not leave land as green fallow. One could have a golf course or one could have horses grazing on it. One could have caravans. There are several options. We are monitoring the position carefully. The main way to bring down the overproduction of cereals is through price.
Lord Craigton: My Lords, the noble Baroness referred to a monitoring scheme conducted by ADAS. If my information is correct, 'will she ensure that the priority given in this monitoring scheme to wildlife will be equally applicable in the case of these noxious weeds?
Baroness Trumpington: My Lords, I did not say that ADAS is conducting the monitoring. I said that our experimental husbandry farms are undertaking work which will provide the basis for further and more accurate recommendations in the future. I am quite sure that they are looking at all these points in the face of a new scheme. Obviously, we want to get it right.
Lord Borthwick: My Lords, perhaps I may mention herbs of the deep—rooted variety. In certain parts of the Alps, both in Germany and in Switzerland, these deep—rooted herbs are improving the quality of cattle and other stock. In addition, deer and many other

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wild animals roam. Does my noble friend not agree that such a situation would be welcome here?
Baroness Trumpington: My Lords, we went for the option of non—grazed set—aside because we were worried about upsetting the balance of livestock for our sheep and cattle farmers now. Therefore we did not take up that option. However, I am most interested in my noble friend's remarks.

Northern Ireland: Education Reform Order
2.50 p.m.
Lord Hylton Lord Hylton asked Her Majesty's Government:
Whether, in view of its constitutional and other implications, they will apply Bill procedure to the draft Education Reform Order (Northern Ireland).
The Parliamentary Under—Secretary of State, Northern Ireland Office (Lord Skelmersdale): My Lords, this legislation, as is the general case with such legislation for Northern Ireland during the period of direct rule, will be effected by Order in Council, subject to affirmative resolution in both Houses.
Lord Hylton: My Lords, I thank the noble Lord for his reply. Is it not very frustrating that this order, which will provide the framework for the educational future of 1.5 million of United Kingdom citizens, cannot be amended in Parliament? Further, does he appreciate that the order contains something which is quite new; namely, provision for a new funding and a new status for integrated schools?
Therefore could not this new framework be got right as nearly as is humanly possible in Parliament from the very start?
Lord Skelmersdale: My Lords, I was interested to note that the noble Lord said "from the very start", which in this case was March 1988. The substance of the draft order has already been the subject of extensive public consultation beginning with the publication of a consultation paper on that date. That was followed in October 1988 by the announcement of preliminary decisions in The Way Forward document, which is the equivalent of a White Paper.
The latest stage was publication of the proposal for the draft order in June of this year, for which a consultation period of over 15 weeks was allowed. Thus there has been extensive consultation over an 18-month period. Moreover, at each stage modifications have been made to the proposals in the light of the comments received.
Many noble Lords will no doubt feel rather jealous of this particularly elongated preparation of legislation.
Lord Cledwyn of Penrhos: My Lords, I support the noble Lord, Lord Hylton. Moreover, is it not the case that out of 25 Orders in Council affecting Northern Ireland 12 have gone through this House and Parliament without debate of any kind? Is that not a thoroughly undemocratic process? Therefore
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should not the Government consider introducing Bill procedure as suggested by the noble Lord?
Further, is it not the case that the noble Lord's honourable friend Dr. Mawhinney in the Northern Ireland Office has been discussing with all the parties involved the possibility of increased devolution, which is at the root of the problem? Can he also say what progress Dr. Mawhinney is making in the matter?
Lord Skelmersdale: My Lords, the noble Lord the Leader of the Opposition is right on almost all counts. The Government have no doubt that the ideal way to legislate for transferred matters in Northern Ireland is by discussions in a devolved government. Indeed, that is what we have all been working for over the past 18 years with varying levels of success, as the House will know.
However, while the present political climate continues, Westminster is the only place to legislate. As the noble Lord will be well aware, Parliament is nearing the end of an especially heavy legislative Session. I cannot believe that any noble Lord would welcome a full programme of legislation for Northern Ireland being grafted onto it. I believe that it would place an impossible burden on both Houses. The only alternative would be to demote Northern Ireland and that would result in a loss of much valuable legislation tailored to the needs of the Province.
Having said that, as the noble Lord is aware from the answer to one of his supplementary questions, the Government are pursuing what future there may be within a legislative arrangement which is suitable both to the people of Northern Ireland and to Parliament. I repeat now that we are always willing to hear any workable suggestions.
Lord Boyd—Carpenter: My Lords, if orders have gone through without having been debated, is that not largely due to the inaction of the Opposition?
Lord Skelmersdale: My Lords, I was rather surprised to hear the claim from the Leader of the Opposition and I must therefore confess that I rather ignored it. To the best of my knowledge and belief, Orders in Council are always subject to affirmative resolution. If that is the case, I think that my noble friend has a point.
Baroness Faithfull: My Lords, can the Minister say whether there is consultation in Northern Ireland at the initial stages when a Bill is going to come before this House? Is he aware that when I was last in Belfast I talked to the head of one of the teacher training colleges and he told me that he had not been consulted in any way concerning the last Education Bill which came before this Chamber?
Lord Skelmersdale: My Lords, consultations often happen in parallel with legislation which is to come before this House. There is then the extended proper consultation period where parties are of course informed by debates in Parliament which are widely publicised in Northern Ireland. As I say, there are various legislative steps to be taken before a draft Order in Council is laid.
Lord Cledwyn of Penrhos: My Lords, although I appreciate that the noble Lord, Lord Boyd—Carpenter, can never avoid making a party political point, even at the extremes, would the noble Lord not agree that the Opposition have been assiduous at all times in debating Northern Ireland matters? Will he also agree that that which precluded the possibilities has been the very point he made; namely, the overloading of work in this House, which is indeed the responsibility of Her Majesty's Government?
Lord Skelmersdale: My Lords, I do not think I had better move into that argument. However, as I say, to the best of my knowledge and belief these Orders in Council are dealt with by affirmative resolution. Therefore it is up to any noble Lord to contribute to the debate which must indeed be held.
Lord Tordoff: My Lords, is it not the case that if Members of your Lordships' House attempted to amend such an order, or indeed to vote against it, the noble Lord, Lord Boyd—Carpenter, would be one of the first to bound to his feet to inform us of the constitutional impropriety of such action? Although I deny that we have the right to follow the course which he would undoubtedly urge upon us, nevertheless, that is the convention of this House.
Lord Skelmersdale: Yes, my Lords; the convention of this House is exactly that. As we all know, no affirmative or indeed negative order can be amended.
Lord Prys—Davies: My Lords, the Minister referred to consultations which have taken place in Northern Ireland in respect of this order. However, he will know that there is still widespread and severe criticism of the order because it amounts to no more than a rehash of the provisions which apply to England and Wales and does not address itself to the problems of Northern Ireland. Would it therefore not increase the legitimacy of the order, and its acceptability to the people of Northern Ireland, if it were to be introduced through the Bill procedure so that Parliament could debate, test and, it is to be hoped, improve the terms of the order?
Lord Skelmersdale: My Lords, I do not think that the noble Lord's claim can be substantiated. I say that because, for example, the opting out of grant—maintained schools was dropped, except in relation to integrated schools, which are peculiar to Northern Ireland, and integrating the education package was not proposed originally but was introduced in the current proposal.
Further, so far as concerns the common curriculum, it was made much more flexible as a result of consultation because areas of study were introduced rather than a definitive list of subjects. However, I have no doubt that these are matters that we shall be debating when we receive the order, which I hope will be laid early next month.
Lord Prys—Davies: My Lords, the point is that orders can be debated but they cannot be amended.
Lord Skelmersdale: My Lords, no, they cannot be amended. As the noble Lord will be well aware, the Bill procedure is used for matters which are unique to Northern Ireland, such as fair employment. The education reform proposals differ slightly, in the ways that I have just described, from those in the Education Reform Act which was fully debated by Parliament. Issues which are unique to Northern Ireland, such as integrated schooling, form a small part only of the overall legislation and would not warrant the exceptional use of the Bill procedure.
Lord Hailsham of Saint Marylebone: My Lords, of course my noble friend is right when he says that when an Order in Council comes up for affirmative resolution it cannot be amended. However, on the assumption that there was a debate, as there is entitled to be, and that the draft resolutions then under discussion came in for serious criticism from any quarter of the House, is it not possible for the Government thereafter to introduce an amending Order in Council of their own? Would not that be the way forward?
Lord Skelmersdale: My Lords, yes. I am sure that my noble and learned friend will rem ember the end of one bitterly fought Session when our noble friend Lord Cockfield withdrew a Treasury order which was an affirmative instrument.
Lord Blease: My Lords, is not part of the problem the fact that we are overloaded with business in both Houses of Parliament? My second point is that we have the 1974 Act on the statute book. It lays down a procedural arrangement. Has the Minister not identified the problem as being mainly at the draft or consultative stage of the order? If there were more effective consultations at that stage of the legislation that might help to ease the problem. May I follow the noble and learned Lord and attempt to make a suggestion which may meet some of those problems in Northern Ireland? Would it not be possible, under the Northern Ireland Act 1974, to have draft orders more effectively and constructively considered at public sittings in the Parliament building in Stormont, under the consultative committee procedure, and chaired by the Minister dealing with the particular order?
Lord Skelmersdale: My Lords, in theory of course the thinking behind the suggestion by the noble Lord, Lord Blease, is right. However, currently there is not much likelihood of elected representatives sitting down together to form such a desirable committee. As I said earlier, the Government are open to all suggestions and I shall take up and pursue that suggestion with my right honourable friend.
Lord Mishcon: My Lords, further to the helpful suggestion made to the Minister by the noble and learned Lord, Lord Hailsham, that the Government would always listen to substantial opinion expressed in the House and would then amend things, and the Minister's happy acceptance of that proposal, may we take it that in future if the Government receive a majority of 25 or less on any amendment moved from these Benches, they will consider accepting the amendment?
Lord Skelmersdale: My Lords, I rather thought that the whole of this lengthy exchange on the Question asked by the noble Lord, Lord Hylton, was about inconsistencies and the impossibility of making comparisons. The noble Lord has therefore just achieved the impossible.

Computer Misuse: Law Commission Report
3.4 p.m.
The Lord Campbell of Croy The Lord Campbell of Croy asked Her Majesty's Government:
Whether they will consider urgently the recent report of the Law Commission on theft and wilful damage carried out through computers.
Lord Fraser of Carmyllie: My Lords, my right honourable friend the Secretary of State for Trade and Industry announced last week that, subject to the views of interested parties, he was inclined to accept the Law Commission recommendations. He added that he was currently seeking those views and that his department would be directly consulting individuals and organisations known to be interested. That consultation is also to be carried out in Scotland.
Lord Campbell of Croy: My Lords, I thank my noble and learned friend who will know that the Scottish Law Commission had already reached the same conclusion and prepared a draft Bill. As other countries have been legislating in that field, does not the United Kingdom risk losing valuable business when robberies on a massive scale and destruction of records can be perpetrated without entry into premises and, in most cases apparently, without breaking the law?
Lord Fraser of Carmyllie: My Lords, the Scottish Law Commission did a considerable amount of work on this subject in 1987 and proposed a statutory offence. The Law Commission report, which came two years later, took into account a great deal of further evidence that has emerged on the fast—moving issue of computers, and recommended two further statutory offences. It would be eminently sensible to follow the line suggested by the Law Commission for England and Wales, that it would be desirable that the criminal law in relation to unauthorised access to computers should be uniform throughout the United Kingdom. It expressed the hope that that end would be achieved by uniform provisions in legislation both sides of the Border.
The Earl of Lauderdale: My Lords, are we going to have a Green Paper and, if so, when?
Lord Fraser of Carmyllie: My Lords, there has already been one report north of the Border and a recent one this side of the Border. My right honourable friend has said that he is inclined to accept the proposals, subject to further views. I should have thought that the balance of interest and opinion was that this matter has already been considered for long enough and that if any further
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step is to be taken it should be by legislation rather than further detailed consideration.
Lord Peston: My Lords, I thank the noble and learned Lord for the last part of his answer which overrode what he said earlier about seeking the further views of interested parties. The report is outstanding and I hope that he will convey to the Law Commission the views of, I assume, most noble Lords that it is a fascinating document. Is not the report so definitive that what is now required is an urgent move towards legislation, both on the general ground that this is prima facie a criminal offence and on economic grounds? It will be in the national interest to move rapidly. Is the Minister aware that some of us were rather dismayed by the report in yesterday's Daily Telegraph that the Government were thinking of further delaying? Surely that would be a bad thing.
Lord Fraser of Carmyllie: My Lords, I am grateful to the noble Lord for his kind words about what is an excellent and full report. However, as I have already sought to indicate, it is desirable to achieve uniformity in this matter both sides of the Border. The Scottish Law Commission recommended only part of what is now proposed for England and Wales. It would seem sensible to make a further attempt to bring the Scottish proposals up to date. I do not envisage that that will be a difficult or lengthy procedure. My right honourable friend the Secretary of State for Trade and Industry has said that legislation should be brought forward when a suitable opportunity arises. I am sure the noble Lord appreciates that, as always, I will not pre—empt what might be in the Queen's Speech and the Government's programme thereafter.
Lord Hailsham of Saint Marylebone: My Lords, while I am not in any way inciting my noble and learned friend to anticipate the Queen's Speech, will he convey to his colleagues that there are many of us who would like to see more uncontentious law reforms rather than items of contentious legislation in the new programme?
Lord Fraser of Carmyllie: My Lords, I am willing to convey my noble and learned friend's view on that matter. I have noted with approval that it appears to enjoy almost universal support in the House.
Lord Campbell of Croy: My Lords, my noble and learned friend may recall that when I raised the subject at Question Time in the summer I accepted the need to restrain the amount of legislation coming forward. That appeared to be echoed in your Lordships' House. Does he agree that a Bill on this subject is unlikely to be political or contentious and need occupy only a limited amount of parliamentary time?
Lord Fraser of Carmyllie: My Lords, so far as I can gauge from what has been said in the House this afternoon, it would not appear to be an issue which would arouse much controversy. However, as I indicated, I think it is desirable that we should tidy

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up what differences there may be between England and Wales and Scotland. Thereafter, as my right honourable friend the Secretary of State for Trade and Industry said, this is a matter which should proceed to legislation.

Business
3.10 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Report stage of the Local Government and Housing Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Merchant Shipping Act 1988 (Amendment) Order 1989 will be taken.

Local Government and Housing Bill
3.11 p.m.
The Parliamentary Under—Secretary of State, Department of the Environment (Lord Hesketh): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report. —(Lord Hesketh.)
On Question, Motion agreed to.
Schedule 5 [Local Government Finance Act 1988: Amendments]:
Lord Hesketh Lord Hesketh moved Amendment No. 125A:
Page 184, line 10, leave out ("The following subsections shall be substituted for section 2(5)") and insert —
("(1) Section 2 (persons subject to personal community charge) shall be amended as follows.
(2) The following subsection shall be inserted after subsection (1)—
"(1A) But a person cannot be subject to a charging authority's personal community charge on a day which falls before 1st December 1989."
(3) The following subsections shall be substituted for subsection (5)").
The noble Lord said: My Lords, this is a purely clarificatory amendment but necessary in the light of the small number of representations received by the Government to the effect that Section 6 of the Local Government Finance Act 1988 is capable of sustaining an alternative interpretation to that which is intended. That section provides for the registration officer in each charging authority to compile and maintain a register of those subject to the charge and subsection (3) states that the register shall contain an item in respect of each community charge of the authority to which a person becomes subject on or after 1st December 1989. However, by virtue of Section 2 of the 1988 Act, most of the adult population of England and Wales has been subject to the community charge, though not liable for its payment, since the enactment of that Act.
By reference to the Act in general, and in particular Section 6(2) which states that registers must be compiled on or before that date, it is clear that the
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intention of the Act is that, on 1st December, the register should already include items for all charges to which a person is subject and that the register should be extended as required in the light of changing circumstances after that date.
I have to say immediately that it is the Government's view that, in the context of the legislation as a whole, there is little likelihood that the Act could be interpreted in any way other than in line with this intention. However, it is right that any possible uncertainties in this area should be cleared up.
These two amendments ensure that no person can become subject to the community charge before 1st December. Their effect is to make clear that comprehensive registers should be in place by 1st December. It is important that any misapprehensions on this point are laid to rest. I beg to move.
On Question, amendment agreed to.
3.15 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 125B:
Page 184, line 27, at end insert —
("—. In section 3 (persons subject to standard community charge) the following subsection shall be inserted after subsection (5)—
"(6) Notwithstanding anything in subsections (1) to (5) above, a person cannot be subject to a charging authority's standard community charge on a day which falls before 1 December 1989.
In section 5 (persons subject to collective community charge) the following subsection shall be inserted after subsection (1)—
"(1A) But a person cannot be subject to a charging authority's collective community charge on a day which falls before 1 December 1989."—").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 126:
Page 184, line 27, at end insert—
(". The following section shall be inserted after section 13 —
"Reduced liability.
13A. —(1) The Secretary of State may make regulations as regards any case where —

(a) a person is liable to pay an amount to an authority in respect of a personal community charge as it has effect for any chargeable financial year which is prescribed, and

(b) prescribed conditions are fulfilled.

(2) The regulations may provide that the amount he is liable to pay shall be an amount which—

(a) is less than the amount it would be apart from the regulations, and

(b) is found in accordance with prescribed rules.

(3) This section applies whether the liability to pay the amount mentioned in subsection (1) above arises under section 12 above or arises under that section read with section 13 above.
(4) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the following —

(a) rates for a period before 1 April 1990;

(b) the circumstances of, or other matters relating to, the person concerned;

(c) an amount relating to the authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;

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(d) such other amounts as may be prescribed or arrived at in a prescribed manner;

(e) the making of an application by the person concerned.

(5) the rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (4)(a) to (d) above.
(6) Without prejudice to the generality of section 143(2) below, regulations under this section may Include—

(a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each charging authority;

(b) provision requiring him to lay the report before the House of Commons;

(c) provision for the review of any prescribed decision of a charging authority relating to the application or operation of the regulations;

(d) provision that no appeal may be made to a valuation and community charge tribunal in respect of such a decision, notwithstanding section 23(2) below.

(7) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may —

(a) include in regulations under this section such amendment of any social security instrument as he thinks expedient in consequence of the regulations under this section;

(b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section.

(8) In subsection (7) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986."
In section 16 (joint and several liability: spouses) in subsection (1)(b) for "(read with section 13 above, where it is appropriate)" there shall be substituted "(or that section read with section 13 or 13A above, or both)".").
The noble Lord said: My Lords, in moving Amendment No. 126, I propose to speak to Amendment No. 154 at the same time. These amendments relate to the Statement which I made to the House on 11th October, when I announced the Government's plans to introduce a scheme of transitional relief to assist former ratepayers and their partners, and pensioners and disabled people, for whom the community charge (based on the Government's assessment of spending) would be substantially higher than their former rates bill.
Amendment No. 126 provides a regulation—making power which allows the Secretary of State to provide that where prescribed conditions are fulfilled a person's liability to pay a personal community charge may be reduced by an amount to be found in accordance with prescribed rules. The conditions for relief may be prescribed with reference to factors which the Secretary of State may prescribe, and the amendment lists in particular some which may be used.
They include rates before 1st April 1990 to enable relief to be based on a comparison between rates and community charges. Subsection (4)(b) refers to the circumstances of, or matters relating to, the person concerned. This will enable us to make special provisions for pensioners and disabled people, as I announced in my Statement.
The factors specifically mentioned include an amount relating to the authority concerned set out in a report to be laid before the other place. This is to enable the comparison for relief purposes to be
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based not on the actual community charge for the authority, but on a charge based on the assumption that the authority concerned spends in line with the Government's proposals for total standard spending as announced on 19th July. We cannot determine precisely what the figures will be until early next year; but figures will be available in early November which will allow authorities to take preliminary steps towards calculating entitlement to relief.
Among other matters the new power provides that an appeal on a decision relating to relief will not lie to a valuation and community charge tribunal. This does not reduce the grounds on which a person may appeal to a tribunal. It is, however, more appropriate that an appeal on relief should be examined by special review bodies, and this will be provided for in the regulations. This is the way in which benefit decisions are reviewed, and these decisions are similar to benefit decisions in character.
Amendment No. 154 allows for the payment of a grant to local authorities in respect of the relief scheme. This grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief and administrative costs to the authority of setting up and administering the relief scheme. As I made clear in my Statement, the Government will meet in full a reasonable level of administrative costs. We are discussing these matters with the local authorities, and we are also commissioning a study by consultants to advise on the cost implications of the new scheme.
As I announced to the House on 11th October, the Government intend to use these powers to prescribe a scheme under which former ratepayers and their partners will, in the first year, lose no more than £3 a week, or £156 a year, as a result of the change from rates to the community charge, provided local authorities spend in line with the Government's assumptions. In addition we will provide that disabled people and pensioners who are not former ratepayers or partners of former ratepayers will be able to apply for relief to ensure that they pay no more than £3 a week in community charge, with the same proviso. We have been discussing the precise details of the scheme with the local authorities, and full details will be announced early next month when the consultations have concluded. I beg to move.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved, as an amendment to Amendment No. 126, Amendment No. 126A:
Line 3, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, in moving Amendment No. 126A, I should like to speak not only to the two government amendments but to my Amendments Nos. 126A to 126G, 154ZA, 154ZB, 157A and 159A.
In this deceptively low key manner, the Minister has in effect introduced a new Bill. It has been introduced at virtually the last stage, certainly the last stage at which, even by the most rigid interpretation, it would be procedurally proper in this House.
What is now being proposed is a series of major amendments. I do not think that the Government would deny that they are major amendments, not only to the 1988 poll tax legislation on which your Lordships spent so much time last year, but also to this Bill and to amendments introduced by the Government in Committee on this Bill only two weeks ago. If ever there was an example of a Government thinking on the run, it is this Government.
As we know very well, the occasion for this is that the Minister responsible had to make a speech to the Conservative Party conference two weeks ago, at which he had to appease the Tory shires and Sir Rhodes Boyson. They had suddenly come to realise that the Act which they applauded in 1988 would not be the unmixed blessing that they thought it would be. It would not provide the replacement for what was described in the Statement as a discredited method of raising local government expenditure. It would produce quite unintended and unexpected results, which would mean that some Conservatives might suffer.
The Government cannot have their own voters suffering, can they? That would not be proper. Everything has to be put on to the people who are poorer, less able to pay. That is the principle on which this Government work. Anything which does not adhere to that principle has to be corrected at the Conservative Party conference and we have to bear the burden of putting it into law. That is what is being demanded of us with this series of amendments, and that is what we shall be concerned with this afternoon.
The Minister and the circulars from his department state that the new proposals have the benefit of simplicity. They may well do. Certainly these are far from being the longest amendments from the Government that we shall have to consider this afternoon. However, they have the benefit of simplicity at the expense of equity, as I shall show, because they are riddled with defects, some of which are deliberate no doubt and some of which have not even been thought out properly.
The Government amendments propose the end of what was to be called the safety net. Noble Lords will recall that the safety net meant that those areas which benefited enormously from the poll tax, which were basically as one might expect Conservative areas, would have to contribute on a diminishing scale over a period of three or four years to the pain suffered by those areas, which were largely poorer Labour controlled areas, which would suffer from the poll tax. Now what is being proposed is that the same diminution of the pain of the poorer areas will be continued but that it will be paid for after the first year by taxpayers as a whole out of Exchequer money rather than by the richer areas which are to benefit from the poll tax. So that is Sir Rhodes Boyson's pay—off.
Now we come to a much more significant element of the proposals. For the first time the Government have recognised that the poll tax is inequitable not only as between areas —that has been clear right from
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the very beginning —but also as between individuals and households in areas. In other words, they are now recognising what we said right at the beginning and what we said all the way through the passage of the local government finance legislation in this House, which was that the effect of the poll tax would be to make the rich richer and the poor poorer. The Government comprehensively and inaccurately denied that but they are now admitting that that is the case. They are now admitting for the first time that they have to introduce a new kind of relief for individuals and households which suffer rather than just for areas which suffer.
However, they are not introducing a relief which will result in the suffering being removed altogether. Oh no; what they are saying instead is that the remedial action to deal with suffering on the part of poorer people in our society will take place on a transitional basis; in other words, it will start in 1990 to 1991 but will disappear in a further three years. All that is happening is that, instead o f the increased poll tax bills for individuals and households being increased indefinitely, the increase will now be restricted to £3 a week. Those people such as pensioners or disabled people who are neither ratepayers nor the partners of ratepayers will have their poll tax limited to £156 a year, or again £3 a week. Those people will be paying for the first time, as they have never paid rates before.
The transitional relief operates only in 1990–91, 1991–92 and 1992–93. These are all matters, according to the amendments, to be introduced by regulation. The Secretary of State may introduce regulations but there is no compulsion on him here. There is no indication of how long, if at all, the transitional relief will be extended.
Let us first of all celebrate the recognition for the first time by the Government that the poll tax is a grossly unfair tax which will hit those most in need most heavily. If the Government had not admitted that, they would not be introducing this scheme. But now let us look at the nature of the scheme to see whether what they are proposing, quite apart from the fact that it is only transitional, will work. I suggest a number of ways in which it will not work.
The proposals for dealing with the inequity are based on a comparison between the notional rates bill in 1989–90 and the notional community charge bill in 1990–91. The great difficulty is that the notional rates bill for 1989–90 is not comparable and cannot be compared either theoretically or practically with the 1990–91 calculations. Apart from anything else, the computer system which has been set up by local authorities to implement the poll tax in 1990–91 will not speak to the computer system which already runs the rates. These are separate programmes and are very often produced on different machines by different people. That has been encouraged by the Government. Anyone who knows anything about computers knows that merging programmes which have not been designed to be merged is one of the most technically difficult things to do. I can tell the Government now, without fear of contradiction, that that system will not work.
Further, even if that system could be made to work, the nature of the rates bill and the rates

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calculations means that large numbers of people who are not at present rated will lose out on the transitional relief. I shall give the House a few examples. There are the people who pay inclusive rents and rates in houses in multiple occupation where the parts of the house in multiple occupation do not have separate rateable values. The suggestion is that somehow a notional rates bill will be calculated for those houses in separate multiple occupation. Who is going to do that? Who will do that between now and 1st April, or such shorter time as is necessary to get the community charge bills out to the electorate? That is an impossible task.
Also, people who live in hostel accommodation, like nurses in nursing homes or students in halls of residence, pay an accommodation charge in which rates are included. There is no notional rates bill for them and there cannot be a notional rates bill for them. They cannot benefit from the transitional relief which is provided.
Moreover, there are people who live in tied accommodation, for example, where the rateable value of their home forms part of the rateable value of a hospital, a school or an office block. This includes such people as caretakers. These people do not have a notional rates bill for 1989–90 and cannot benefit from the transitional relief. Then there are military personnel and other people in the services who live in barracks. These people do not pay rates now and cannot benefit from the transitional relief. These are not wealthy people who can afford to do without the transitional relief, which the Government recognise. These are the people most in need and the people who need particular attention but who will not receive it. At the very least this concept of a notional rates bill in 1988–89 with secondary ratepayers will not work.
Let us look at the notional poll tax bills in 1990–91. I apologise for the length of what I have to say but, as I have said, this is a new Bill and it deserves the proper attention of this House. It will receive that attention from this side of the House. On 19th July 1989 the Government with their outline rate support grant statement indicated what the standard spending assessment would be for 1990–91. They said at one stage that on their calculations a standard level of service would require a levy of £275. However, that is not the figure that is being used to calculate transitional relief.
The Government are now saying that what they will take into account is the 1989–90 spending, with an addition of 3.8 per cent. I leave on one side, although I do not see why I should, the fact that 3.8 per cent. is only precisely half the year on year rate of inflation at this time, so it is clear that there will be a considerable decrease in the ability of local authorities to provide their services from that figure alone. Even if that were so, we do not yet know what the expenditure of local authorities is for 1989–90. We never know until after the end of a year the expenditure of local authorities in a given year. There is no possibility whatsoever of council treasurers making sensible decisions about what they have to spend and making sensible budgets on the basis of such entirely theoretical calculations.
We do not know what the final figure will be. The only thing of which we can be absolutely certain is that it will not be enough. We can be quite certain that the honeyed words of Ministers in proposing the transitional relief will not be reflected in practice because the standard spending assessment will be lower than actual expenditure and transitional relief will not be available on the difference.
As I said, the proposal is riddled with anomalies, quite apart from the case of the secondary ratepayers. Consider the case of somebody whose partner dies on 31st March 1990; the survivor does not get transitional relief. In identical circumstances somebody whose partner dies on 1st April receives transitional relief. Is that just? Consider the position of people who become pensioners or become disabled after 31st March. Before 31st March they receive relief; after 31st March they do not. Consider the case of disabled people who are not ratepayers. A disabled person who is not a ratepayer, or the spouse or partner of a ratepayer, can receive more relief than a disabled person who is a ratepayer or the spouse or partner of a ratepayer. Is that fair? Is that just? Has that been properly thought out?
Somebody who moves house after 1st April 1990 loses transitional relief, even if forced to move by compulsory purchase order or some other outside obligation. Somebody who receives housing benefit and who lives in a house in multiple occupation will have had his benefit reduced to 80 per cent. of the notional value by the Social Security Act 1986 because he is deemed to be paying rates. However he is not a ratepayer for the purpose of qualifying for transitional relief, so he does not receive transitional relief.
Households which contain a pensioner or disabled person who is not the spouse or partner of a ratepayer where the ratepayer is on housing benefit will have their housing benefit reduced to take account of the contribution deemed to have been made to rate bills by non-dependants in the household. It is certainly not clear whether those deductions mean that those people themselves will be considered as pensioners or disabled ratepayers. How are authorities to know whether pensioners or disabled people are the spouse or partner of a ratepayer? Inquiries on the community charge forms which have gone out have not asked that question. How is that now to be determined?
I turn now to the worst example of all. Somebody who is wealthy and of pensionable age but still working and who has an occupational pension will receive transitional relief if he is not a ratepayer. A young adult who just misses qualifying for a poll tax rebate could end up paying 10 per cent. of his income on poll tax with no transitional relief because he is not a local tax payer.
Those are the defects of the proposals in terms of what they would achieve even if the arrangements could be completed. However, it should be remembered that councils are still carrying on with their rating obligations. They still have their responsibilities for council housing and for assessing the rateable value of council properties, under a part of the Bill which we debated yesterday. They are concerned with all the preparations for the poll tax.

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They are dealing with the new and increasingly complex regulations for rebates. I very much doubt whether it is practicable for local authorities to succeed with all those tasks at the same time.
I have explained the difficulty of doing so from the point of view of the computer programmes concerned. How are the councils to contact potential claimants, process and verify the claims? How are they to deal with the fact that a poll tax bill —and remember that computer programmes have been produced for a single poll tax amount —will now have to take account, totally unexpectedly, of varying amounts of poll tax for different people? No one can do that in the time that is available.
Local authorities have been encouraged to undertake major publicity campaigns on the poll tax in order to encourage people to register and to make use of their rebates. Now those campaigns will have to be changed to cover transitional relief, particularly since it is likely in some authorities that only people occupying very low rateable value properties will benefit. Councils will have to encourage the take-up of pensioner and disabled relief.
Quite apart from the practical impossibility, even if all that were possible it would result in immense administrative costs. We all know that the poll tax will cost at least twice as much to collect as rates, and probably more. All those additional regulations are now being added. The local authorities will have to bear that administrative and financial burden. Even if treasurers had a blank cheque to provide the necessary money, the staff and the technology are not available to do the work.
I turn now, briefly, to the many amendments that we have had to put down to the government amendment. Amendment No. 126A refers to the fact that the regulations "may" be made by the Secretary of State. We do not even know whether the amendments will be made. At least if they are going to do so let them say so and let us know what the damage will be.
Amendment No. 126B refers to the fact that there is no clear statement in the Government's proposals as to how long the transitional period is to last. We suggest that the Government ought to come clean and make it clear what their position will be. We certainly think that the period should be longer than three years. Poll tax will be no fairer in 1994, or indeed in 2001, than in 1990.
Amendments Nos. 126C and 126D refer to the fact that the transitional relief, which has been presented by Ministers—I do not say by this Minister—all over the country as a remedy for injustice. It will only affect those who pay the personal community charge. It will not affect the secondary ratepayers I have been talking about, who will pay their poll tax under the collective community charge provisions. That fact has also to be provided for.
Amendments Nos. 126E and 126F refer to the cases that I have already mentioned of people who are secondary ratepayers who will not benefit from transitional relief: nurses in nursing homes, students
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in halls of residence, occupants of hostels, people living in housing in multiple occupation, and so on.
Amendment No. 126G proposes that the right of appeal should be to a body set up by the local authority. It should be comparable to the provisions of this Government in respect of housing benefit. Amendments Nos. 154ZA and 154ZB change the form of words in the government amendment to make it clear that reimbursement is the criterion for financial assistance and not a reasonable estimate of costs. Nobody knows what the costs will be. It is clear that the Government do not know what the costs will be. Making a reasonable estimate at this time would simply mean that treasurers would have to provide for a great deal more additional cost than they ought to. It is the Government's own tergiversation which has put them in that position.
Finally, one must conclude, as Amendment No. 159A indicates, that, whatever the justices or injustices of the proposal —and I have shown that it is unjust—it cannot be done in 1990. It has to be put off for a year to enable the procedures to be gone through. It is an abuse of this House that measures of such complexity should be brought in at this stage. It is an abuse of Parliament that they should be brought in with inadequate time for the other place to consider them in Standing Committee. It is an abuse of the political process as a whole that the bad and inadequate thinking of the Government in 1988 and 1989 should be altered in this drastic way simply to satisfy the baying hordes at Tory Party conference. I beg to move.
Lord Somers: My Lords, when we discussed this matter last week I asked the Minister to let me know exactly what allowances were proposed for the elderly and the disabled. He apparently did not know at the time. If he still does not know, perhaps I may ask him to please find out and let me know. He may not realise that this aspect is extremely important to the people who come within those classes. I come within at least one of them. The measure will mean that certain people will find it extremely difficult to understand their situation so I should like to know exactly what the provisions are.
Lord Taylor of Gryfe: My Lords, the noble Lord, Lord McIntosh of Haringey, may be excused for making what was almost a Second Reading speech on the poll tax. He may be excused at Report stage because what we have before us is, as he said, a new Bill introduced at Report stage of the Local Government and Housing Bill. To that extent the House is indebted to the noble Lord for denouncing the provisions of what is disguised as an amendment but which introduces new principles into an Act; namely, the poll tax legislation which we have already disposed of.
I subscribe completely to the views expressed by the noble Lord, Lord McIntosh, in which he opposed the Bill on several grounds. First, there is the question of the immorality of the principle of making the rich richer and the poor poorer by this provision. I suggest to noble Lords on all sides of the House that they examine their consciences in relation to the moral principle involved in the provision.

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Secondly, as a businessman, I am inclined, in looking at operations in any of my businesses, to keep a sharp eye on costs. If any of my managers were to bring forward a proposal to collect the same amount of money and double the costs of collection, he would not be long in business. That is exactly what is happening, and I prophesy that the cost of collection in this case will not be double the existing collection charge for rates; it will be more than double. I say that on the basis of our experience of the poll tax for the past year.
I have no desire to keep the Government in office any longer than we must, but, in the light of the Scottish experience, perhaps I may say to them quite seriously that this is a totally unpopular and unacceptable piece of legislation. It is no accident that Scotland is practically a Thatcher-free zone.
I have one or two questions in connection with the provisions. When the Minister made his statement on the subject last week I asked what would be the implications for the existing position in Scotland. So popular is the tax that so far 20 per cent. of the people who became liable for it in April have not paid. Of course, some of them will be exempt and some normally run rates arrears, but that is nevertheless some indication of the problem. It is not only a problem of the reaction of people to the poll tax: 718,000 people have not paid. It also indicates —
Lord Campbell of Croy: My Lords, I am most grateful to the noble Lord. However, like me, he will have seen the reports in Scotland which show that that figure is not very dissimilar from the number of people in years past who had not paid their domestic rates by this stage of the year.
3.45 p.m.
Lord Taylor of Gryfe: My Lords, I think I said to the noble Lord that rates arrears tend to accumulate at this time, but it indicates that the new revolution in taxation, in which it is claimed that the people will feel more responsible for local government, is not having that effect. I suggest that Scotland was regarded as a guinea pig for the legislation. We have sufficient evidence from the test on the guinea pig to indicate that this is an unacceptable poll tax.
I am happy to see a Scottish Minister on the Government Front Bench. If the amendments are now being progressed in respect of the English legislation, how will the changes be effected in Scotland where the same anomalies as exist in the amendment have become apparent among the separate regions? I assume that some kind of change must be made in the poll tax legislation for Scotland which will iron out the anomaly between the less favoured areas, such as Grampian and the Borders, and other areas such as Strathclyde region. Some people feel that the Scots are occasionally a bit tiresome. They feel a little neglected now and again. But it is fair to point out that the amendments emerge only when the English experience is before us, yet the same anomalies have existed in Scotland for the past year without any attempt by the Government to make the appropriate amendments.
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I say to the Government that it is perhaps not yet too late to take us out of this most undesirable provision, even in the Government's own interest of political survival. I say quite seriously, on the basis of the Scottish experience, that this will not contribute to their existence as a government.
Baroness Carnegy of Lour: My Lords, I must follow the noble Lord because he has talked about Scotland and I live there too. The evidence is that at this moment on average 85 per cent. of those who are due to pay the community charge have done so, and in some areas the figure is 95 per cent. The local authorities say that the process is going smoothly. The Member of Parliament for Dundee, East, Mr. John McAllion, who was the chairman of the first campaign to stop people paying, has himself admitted that that campaign has failed. The people of Scotland have caught on to the way that the system works. They see what their obligations are. My experience is that many parents are extremely glad that young people now contribute to the community charge. I simply do not think that what the noble Lord has said is the case.
So far as concerns the safety net and the amelioration for people south of the Border—amelioration of the sudden change that they are likely to experience —I should point out that the situation was quite different in Scotland. To begin with, the sorting out of the differences between rating levels in Scotland, when we had the revaluation which originally triggered off the whole operation of the design of the community charge, took place in the year after the immense rate rises occurred. The noble Lord knows that perfectly well. That happened before the community charge was instituted so there was not the same need to operate a safety net. There had to be a certain shift of funding between the regions of Scotland through the Government part of the funding of local government last year. That happened. It was explained to the people of Scotland and they understood it. They have accepted it. It is complete nonsense to go on talking about how Scotland is complaining about being a guinea pig. That is not the case.
As to what is now proposed my one regret is that through it there is a compromise of the principle that everybody pays. I am rather sad about relating the relief to the number of people in the house because I do not think that that has anything to do with the community charge. I believe that it should happen only during the transitional period and the shorter the period the better. It is clear that in Scotland the new principle is understood. I should be very sorry were noble Lords to think otherwise.
Lord Ross of Newport: My Lords, we should express our condolences to the many rating authorities in this country which are faced with these major changes at so late a stage. The bureaucracy and changes involved are absolutely mind-boggling. If I were a rating officer in local government I should be longing for retirement. I do not think it is fair of central government to change schemes so late in the day.

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It is not only the bureaucracy that is mind-boggling. There are still many anomalies. For instance, someone who moves house after 1st April does not receive the transitional relief and some disabled people do not get the relief to which they are entitled. The publicity that local authorities intended to send out has now to be cancelled and they must start all over again.
Quite honestly, it is not good enough. It is about time that this Government realised that they cannot continue to use local authorities in the country as a kind of doormat and walk all over them.
Baroness Fisher of Rednal: My Lords, I should like to remind the House that in discussing this Bill we have referred to what we consider in our minds to be the poll tax but what is called the community charge. As the noble Baroness, Lady Carnegy, spelled out, the principle was that everyone should be liable to pay the tax. The reason behind that principle was that every tax payer would then be able to control his or her local authority. As noble Lords on the opposite Benches said, we had to control the spendthrift local authorities and a community charge was brought in to do it.
As my noble friend Lord McIntosh so eloquently said, this is not the same community charge Bill. This is a completely different community charge Bill. We are spending hours discussing it not only in this Chamber but also in the other place. It is a completely new community charge Bill. In it we see not that each individual is responsible but that the Treasury intends to give tax payers' money to help certain areas of the country. The figures that I have are quite substantial. To prop up this tax the Treasury will be paying out in 1991–92 a total of £400 million; in 1992–93, £200 million and in 1993–94, £85 million. That makes a total of £685 million.
Yesterday we discussed housing. It seemed that there was not any money available to put further cash into the capital accounts so that local authorities could do more repairs. However, we find now that the Treasury has some money that it can pay out. As has been said by other noble Lords: to those that hath shall be given.
The noble Lord said—I think these were his words—that no individual or couple would be more than£3 a week worse off in 1990–91. So it is £3 a week worse off if you are an old age pensioner and £3 a week worse off if you are disabled. They will be £3 a week worse off. That is a phenomenal amount for them. The Minister spoke as though he were distributing great largesse to those people. He appeared to be saying, "We only want £3 a week from you. We were going to ask for more but we shall settle for £3".
Lord McIntosh of Haringey: My Lords, perhaps my noble friend will give way. The Government are asking for a lot more than £3. The sum of £3 only applies where the local authority can keep to the standard community charge, not where the local authority in fact performs its obligations to its electorate.
Baroness Fisher of Rednal: My Lords, I am glad that my noble friend has intervened. That was going to be my next sentence—and I am not using the same brief. It does not alter the point I am making which is that those people will be much worse off.
My noble friend spoke about the abolition of the safety nets and the local authorities which would come into that category. The contributions to the national safety net arrangements will be abolished from 1991–92 onwards. We find that 236 local authorities, including Birmingham and the whole of the West Midlands districts, will have to make their contributions. That includes Dudley, which has an urban development corporation that is trying to get people back into the area because of the closure of the steel mills, and Sandwell, which had a HAT put on it under the last housing Bill. They will have to make their contributions. They do not escape the safty net contributions which can be as much as £75 per adult in those areas. The figure of £75 has been put forward in the case of Birmingham. It will mean that £65 million is being paid out to keep down the charge bills in other areas.
Noble Lords might have thought that the Government were being very gracious and trying to help those areas which need help, such as the West Midlands and others in the north. That is not so. Birmingham and the six West Midlands districts are all losers and will have to pay for the safety nets.
There is relief on the community charge in cases where there are more than two adults in a household, and the residents are pensioners or disabled. But what will happen to the larger households of an extended family? I know from my own experience in Birmingham that there are a very large number of people whom we might call our ethnic minority who have extended families living together. The owners of the house, perhaps Mr. and Mrs. Singh, have their brother, sister, grandmother or grandfather living with them. In some cases there may be up to seven or eight adults living in the one property. They are not living in overcrowded conditions but in houses in which there is enough accommodation for them.
Are all those people except for two persons not to get any relief at all? Does it mean that the other six adults in the house will each have to pay the full charge? That can confront certain classes of people with a very difficult set of circumstances. I ask the Minister to look not simply at the numbers of people who live in what may be called lodging houses or hostels but those living in extended family circumstances.
On administrative costs, as my noble friend has said, local authorities had been doing their best to ensure that everything was on the computer by the end of the year so that next year they could send out the bills. There is now a delay; there is further expense. It is important that if the Government are making a new provision, they should take over not the reasonable costs of the change but the whole cost falling on local authorities. We need an assurance from the Minister that payment for this extra work will not be the responsibility of the local authority but of the Government.

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It is to be hoped that we shall receive a pamphlet with information about where old-age pensioners and disabled people live, because local authorities have to find that out. They could not be included on the poll tax forms when they were sent out. It is important that the Government recognise that television is a marvellous medium. We have heard of the many thousands of pounds spent on trying to sell off water. At a cost that would be small in comparison the Government should launch a television campaign to ensure that people know that they can benefit if they made applications in time.
One is horrified that in a Bill on housing and local government we have further poll tax legislation. We can disregard calling such a tax a community charge in the future.
4 p.m.
Lord Boyd-Carpenter: My Lords, the debate on the amendment has taken two separate and distinct forms. The noble Lord, Lord McIntosh of Haringey, has raised the point about the inconvenience of the introduction of a major amendment at this stage. There has been a general discussion of the merits or demerits of the community charge. Indeed the noble Baroness, Lady Fisher of Rednal, in a sense—although perhaps she did not realise it—was justifying the Government's action in putting such an amendment into the Bill. If she will allow me to say so, she made a number of very practical and helpful suggestions in respect of the community charge and its administration to which I hope my noble friend and his department will pay attention.
However, unless one is to take advantage of a Bill going through Parliament to insert amendments to the earlier Act, one cannot act on these suggestions. Therefore, there is a real conflict in the criticism of the amendment. The conflict is between those who wish to make even further adjustments to the community charge—and with a major change of this kind it is very understandable that there should be many people so doing—and those who object to that being done in this way. I am sure that noble Lords were interested and encouraged to hear my noble friend Lady Carnegy of Lour pointing out how well—despite the gloomy prognostications—the community charge is operating today in Scotland. I do not propose to be led into a general argument about the community charge because one could very easily go on all night about it. I am one of those who believe that in substance, in place of rates, it is the right step to take.
I wish to deal with the objection of the noble Lord, Lord McIntosh, to the introduction of such a major amendment—no one has the slightest doubt that it is a major and important amendment—at this stage into the Bill. I ask the noble Lord to put himself—it is a rather active feat of imagination—in the position of being in government. I ask him to consider that towards the end of the Session when major changes are taking place anyhow, one finds that there are improvements and mitigations which can be made in the community charge system. I am sure that the noble Lord would not suggest that the Government should nonetheless do nothing about it. If one is near the end of the Session with such a Bill, the only
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practical way to make these improvements is by inserting such an amendment into the Bill.
I wholly sympathise with the noble Lord that it is extremely inconvenient for those of us who are taking part in the debate. It is particularly inconvenient for those who have the responsibility of maintaining opposition to it, with all the difficulties that opposition have. I have experienced them. I fully understand that. I hope however that the noble Lord will not feel that because of those inconveniences—the Government being convinced of the need for these improvements, which will ease the introduction of the community charge for certain less fortunate people in this country—Ministers should have held back and not taken the action that they have.
I fully support the amendment. It is the only practical way of making these improvements and of making them in time. I hope, after consideration and despite the inconvenience caused, the House will support my noble friend's amendment.
Lord McIntosh of Haringey: My Lords, before the noble Lord sits down, let me assure him that I would wish in other circumstances to reply immediately to the direct challenge that he has put to me. However, I understand that the Minister will reply to the debate before formally putting the amendment. That will give me an opportunity to come back after he replies to the debate. If that procedure meets with the approval of the House it would be more appropriate for me to reply then to the noble Lord and also deal with other points made in debate.
Lord Boyd-Carpenter: My Lords, I am sure that the noble Lord is right.
Lord Hesketh: My Lords, I shall tread carefully in order to get the procedural part correct. It may help the House if I intervene at this stage.
We have had a broad and wide ranging debate. Before replying to the specific amendment of the noble Lord, Lord McIntosh, perhaps I may deal with some of the points that were raised. The noble Lord, Lord Somers, inquired about the details concerning the disabled and pensioners. When I made the Statement on 11th October, I drew the attention of the noble Lord to the copy with examples laid out that was in the Library. However, I undertake now to arrange for that material to be dispatched directly to him. With regard to the disabled, those who count under the scheme will be people who are disabled and receiving mobility allowance, mobility supplement, severe disability allowance, attendance allowance, invalidity pension and those who are registered blind.
The noble Lord, Lord Taylor of Gryfe, as always, drew aspects of Scotland to the attention of your Lordships' House with regard to the proposals. As the noble Lord correctly observed, my noble friend Lord Sanderson of Bowden will be dealing later with these matters. My noble friend Lady Carnegy of Lour has drawn to your Lordships' attention the fact that in Scotland all is not as it would appear if one listened to the Opposition Benches when assessing the success of the community charge.

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The noble Lord, Lord Ross, was concerned with the additional burden for local authorities. We have already begun to discuss the problems with local authorities. We welcome the practical approach that has been adopted by the practitioners in the discussion. We know that there are problems and I assure your Lordships' House that we recognise that fact.
The noble Baroness, Lady Fisher of Rednal, and my noble friend Lady Carnegy drew the House's attention to the principle of the community charge and of everyone paying. It is important to remember that we already have a rebate scheme which, together with family income supplement, is worth approximately £2.5 billion and has not yet been mentioned this afternoon. That establishes the principle of helping those who are worst off in the community. All that is happening here today is that we have extended the principle by introducing a transitional relief scheme. The idea that there was no difference across the scale before the arrival of the transitional relief scheme is not true, because the rebate scheme was already in existence.
The noble Baroness, Lady Fisher, also inquired about the position of larger households. On 20th October the Government announced their proposals on transitional relief for households containing three or more persons. The noble Baroness referred to them as households which could be described as an extended family. In general, it is proposed that the transitional relief for such households should be calculated on the basis of two notional community charges.
I now address an area where I know that the noble Lord, Lord McIntosh, and I will disagree—particularly having regard to this position on a certain committee of your Lordships' House—regarding computing and the interface. We are holding discussions with the computer companies and local authorities. Preliminary indications show that the appropriate software can be designed to make rating lists and the community charge systems compatible.
I turn to Amendment No. 126A standing in the name of the noble Lord, Lord McIntosh, which is an amendment to my amendment, No. 126. It would place a duty on the Secretary of State to make regulations rather than an enabling power. I can assure your Lordships' House that his amendment is unnecessary. The Government have made it quite clear that they will be introducing a scheme of transitional relief, and I ask your Lordships to accept the undertaking given in my Statement of 11th October on this point.
Amendment No. 126B would provide for the regulations to make provision for transitional relief in every financial year from 1990 to 2000. Again we have made it clear that this is intended to be a scheme of limited life providing relief for ratepayers, pensioners and disabled people over the first three years of the community charge. A 10-year period would be simply too long.
Amendments Nos. 126C and 126D would extend the relief scheme to the standard and collective
1390
community charge. In the case of the standard charge—which the House will recall is levied in respect of property (such as second homes) which is not used as anybody's sole or main residence—local authorities already have discretion to provide relief. They have the option of levying the charge at a zero rate if they wish. As a result of amendments made during the Committee stage of this Bill, authorities have much greater flexibility to set different rates for different classes of property. The Government take the view that decisions on the level of charge to be levied on unoccupied property are properly taken by local authorities in the light of local circumstances. We believe that it would not be right for the Government to undermine this discretion by providing additional relief.
As regards the collective community charge, it would be quite wrong to include it in the transitional relief scheme. The collective charge applies in buildings where people stay for only short periods, and where it would not be practicable to register them individually for the personal charge. The Government have made it clear that relief will be available only for as long as an individual is resident in the property where he lived under the rating system. In the case of an itinerant population it would mean that relief, if it were to be given, would cease very quickly for the majority of people, and the amount of relief to which each individual was entitled would be very small. Administratively, it would also be almost impossible for local authorities to grant relief to contributors who, by definition, are not registered for the community charge and are therefore not known to the local authority. This—taken together with the fact that many community charge properties will, because of their size, have high rateable values and are therefore unlikely to qualify for relief—has led u s to conclude that it would be neither appropriate nor practicable to provide relief for contributors.
Amendment No. 126E would impose a duty on the Secretary of State to limit himself to the factors listed in the amendment which are of course rather different from those listed in Amendment No. 126. In particular, it refers to rates "paid or payable" in 1989–90, whereas the Government's amendment refers merely to "rates for a period before 1st April 1990". I can assure the noble Lord that our formulation can include both rates paid and rates payable; and the period can be that mentioned in his amendment. There is therefore no advantage in replacing it.
Similarly there is nothing in the Government's formulation which would prevent relief being given to students, nurses and people living in tied accommodation. Many such people will be entitled to relief under our proposals if they are living in a separately rated hereditament. If they are not, then they will not be eligible for relief. But I hat does not mean to say that no help is available to them. We should be clear about exactly what the Government are doing here. We are giving additional relief to people for whom the change from rates to the community charge would mean a significant increase in outgoings. This scheme is over and above the protection which is already built in to the community

1391
charge. We are not reducing the existing provisions which apply to students and people on low incomes. Students already enjoy automatic relief of 80 per cent. of the community charge. Nurses who are part of Project 2000 will also enjoy this student relief. Nurses and student nurses who are salaried will be eligible for rebates if their income is low enough to qualify them.
The protection for students and nurses which has always been built into the system will therefore continue. As regards our system of transitional relief, the local authorities will not thank us if we devise a scheme which is all-inclusive and complex. Our proposals are intended to provide additional help to certain groups of people. It is not intended to be a universal scheme and I make no apology for that.
The amendment would require the Secretary of State to take into account the circumstances of the person including age, disability and income. On the first two we have already announced to the House that special provisions will apply to pensioners and disabled people and I can give the House an assurance that the scheme will reflect that announcement. As regards income, it is the job of the rebate system to link the community charge to ability to pay and this will be the case under our new provisions. Where a charge payer is entitled to relief, and that relief is given, he may, depending on his income, still be entitled to a rebate on the amount remaining to be paid.
Amendments Nos. 126F and 126G would remove the provision allowing for special provisions for special review, and preventing appeals on such decisions being made to a valuation and community charge tribunal. I explained the Government's view on this point when speaking to Amendment No. 126.
Amendment No. 157A would require the regulations setting out the relief scheme to be the subject of affirmative resolution rather than negative resolution. This would be unusual in the context of the community charge where all the regulation-making powers are exercisable by way of instruments subject to the negative resolution procedure and even more so in the case of a transitional provision. If noble Lords think that the regulations should be debated when they are made, I have no doubt that the appropriate Motion will be made.
Amendments Nos. 154ZA and 154ZB seek to replace the provision for the Secretary of State to pay grant to local authorities in respect of revenue forgone and administrative costs with a duty to reimburse the costs certified by the chief financial officer as having been incurred.
I said in my Statement on 11th October, and I repeat now, that the Government will met 100 per, cent. of the relief actually paid to individuals. On the costs of administration we are making arrangements to meet 100 per cent. of a reasonable level of costs. This is a generous arrangement. It offers substantially more than the contribution the Government made to community charge preparation costs where the specific grant rate was 55 per cent.
1392
We are commissioning a study by consultants on the cost implications of the new scheme, and we are discussing the question of costs with the local authority associations. The Government will ensure that adequate funds are made available to meet legitimate expenditure. The Government cannot accept, however, an open-ended commitment to reimburse whatever costs an authority incurs regardless of the necessity of those costs. No government could exercise their duty towards public funds in such an irresponsible fashion.
Finally, on the night before I made the Statement on 11th October there was a plea from the Benches opposite for the Government to provide some form of transitional relief for the disabled. It was not made with respect to the Statement I made the following day but it gave me great pleasure to be able to answer that plea and to answer it positively. Here we are providing additional help. It is not novel. We already have the rebate scheme ready to go. This is to provide help where we believe that it is most needed.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for responding to my amendments and thereby giving me an opportunity to respond to them and to those aspects of the debate which relate to them. They are rather wide-ranging because my amendments and the government amendments together necessitate a cold look at poll tax legislation as it is now proposed. It is not a matter where one can say that an opposition amendment says one thing which must be considered by itself and a government amendment says another which must also be considered by itself. If we are to act responsibly in this House we must ask how that leaves the poll tax legislation. When I look at the legislation I find that it leaves us a very long way from the claims made about it when it was first introduced in this House on Second Reading in 1988.
The principal claim made for the poll tax in 1988 was that we were to achieve a higher degree of accountability by local authorities to their electorate than had existed under the rating system in the past. Indeed, that was repeated most recently by Mr. David Hunt speaking to the Conservative Party Conference two weeks ago when he said:
"Very soon we will have a simple, clear and fair way of determining local bills for local services. At last we shall have the community charge".
We need only list very briefly the items which detract from the simple, clear and fair relationship between local expenditure and the community charge bill which community charge payers will actually pay to realise how far we are from that ideal and that claim.
First, because this is what we are debating today, we have the safety nets. They existed in the Bill as it went through this House last year but they have been, as everybody has recognised, radically changed. Secondly, we have the transitional protection for areas with low rateable value which we have debated this afternoon. Thirdly, we have the additional help for inner London boroughs. Fourthly, we have individual transitional relief which again we have debated this afternoon. Fifthly, we have the rebate system which we debated last

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year when the Bill first went through and also as this Bill has proceeded through your Lordships' House. Sixthly—and perhaps this is the most important because it is as yet unknown—there is the decision to be announced on need assessment grants.
Therefore, we are as far as it is possible to be from a simple, clear and fair relationship between local authority expenditure and the bills which the commmunity charge payers will pay. It is not just—although it is of great importance—that central government are now determining three-quarters rather than a half of the expenditure of local authorities. It is three-quarters, as noble Lords will know, because half the expenditure is in the form of grant and another quarter in the form of nationally determined non-domestic rates, so that only a quarter of local authority expenditure can actually be called to account by local inhabitants against the expenditure of their council.
It is not just that. Every single complication, every single new regulation and new provision which is made—and I do not deny that some are with good intentions; the Minister made his claim for transitional relief for the disabled and I do not deny that the intention behind that is admirable—removes further away the ideal of accountability, which was the main justification for the Bill in the first place.
I spent quite a long time—and I did not and do not apologise for that—introducing my amendments and responding to government amendments. I did not go far enough in my attacks. I completely neglected the point made so effectively by my noble friend Lady Fisher about the impossibility of dealing with this transitional relief, which is restricted to two adults in the many households where there are more than two adults. She talked about the extended family. If it is amicable, an extended family may well be able to reach an arrangement that they will share the benefit of the transitional relief accorded to two out of the six, seven or eight of them. That is a possibility.
However, let us think about houses in multiple occupation where for rating purposes in 1989–90 it is only one hereditament. Those people do not live with each other in any real sense and they must sort that matter out between themselves. They must fight it out as to who will receive the transitional relief. That is not just an administrative nightmare; it is a family or household nightmare. I cannot believe that the Government have even started to think about the implications of that restriction, which is very much played down in ministerial statements about the supposed change.
The second point on which my noble friend Lady Fisher helped the House is the £3 per week limitation. She pointed out, as I should have done, that even if it were only £3 a week—and it will be a lot more than that in many cases—it would be a very severe cut in the standard of living for many people; for example, pensioners, the disabled, the unemployed and the poorest people in our society. To us£3 a week may be the price of a couple of drinks but for those people who are most affected it
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is the difference between poverty and despair in many cases.
The noble Lord, Lord Boyd-Carpenter, chided me for complaining about the late introduction of the amendments and he talked sympathetically about the inconvenience particularly for the Opposition Front Bench. I am grateful to him for that recognition. However, I must say to him that the necessity for these amendments was obvious to the Secretary of State or the previous Secretary of State many months ago. They could have been introduced at any time.
The real reason for this timing has nothing to do with thinking in the department or thinking by Secretaries of State. It is very clear: the amendments had to be introduced as pressure built up in the Conservative Party to abolish the safety net as soon as possible and to absolve those who gain most, the Tory shires, from the extra payments which they would have to make in the short term.
That sort of pressure was sheer greed. Those are people who are already better off and who will be even more better off as a result of government legislation passed by the people who represent them and not the poorer areas. The have the nerve to come forward and press on the government that transitional relief and a transitional change between being very well off and very much better off should fall on all the taxpayers and not on them. That was sheer greed, which came to a head in the run-up to the Conservative Party Conference at the beginning of October, At that stage and only at that stage the Government yielded to that political pressure and paid that political debt.
The legislation that we shall be left with if these amendments are passed—which we already have in most of its major aspects—is something which, as I said at the outset, makes the rich richer and the poor poorer. It is a paying of political debts at the expense of the poorer people in our society. That may be in the short-term interests of the Conservative Party, although I notice that most of its representatives do not think so. But the British public knows that that is unjust and that these amendments and this legislation should be resisted. I beg to move Amendment No. 126A.
4.30 p.m.
On Question, Whether the said amendment (No. 126A) to Amendment No. 126 shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 126.

DIVISION NO. 1

CONTENTS

Addington, L.

Bruce of Donington, L.

Airedale, L.

Campbell of Eskan, L.

Alport, L.

Carmichael of Kelvingrove, L.

Amherst, E.

Ardwick, L.

Cledwyn of Penrhos, L.

Attlee, E.

Cocks of Hartcliffe, L.

Blackstone, B.

Darcy (de Knayth), B.

Blease, L.

David, B.

Bottomley, L.

Dean of Beswick, L.

Broadbridge, L.

Donaldson of Kingsbridge, L.

1395

Dormand of Easington, L.

Northfield, L.

Ennals, L.

Oram, L.

Ewart-Biggs, B.

Parry, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L. [Teller.]

Foot, L.

Gallacher, L.

Prys-Davies, L.

Galpern, L.

Rathcreedan, L.

Glenamara, L.

Ripon, Bp.

Graham of Edmonton, [Teller.]

Ritchie of Dundee, L.

Rochester, L.

Grey, E.

Ross of Newport, L.

Grimond, L.

Sainsbury, L.

Hampton, L.

Salisbury, Bp.

Hatch of Lusby, L.

Seear, B.

Henniker, L.

Sefton of Garston, L.

Hooson, L.

Serota, B.

Hughes, L.

Shepherd, L.

Irving of Dartford, L.

Simon, V.

Jacques, L.

Somers, L.

Jay, L.

Stallard, L.

Jeger, B.

Stedman, B.

Jenkins of Hillhead, L.

Stoddart of Swindon, L.

Kagan, L.

Strabolgi, L.

Kilmarnock L.

Taylor of Gryfe, L.

Leatherland, L.

Taylor of Mansfield, L.

Llewelyn-Davies of Hastoe, B.

Thomson of Monifieth, L.

Tordoff, L.

Lloyd of Kilgerran, L.

Turner of Camden, B.

Lockwood, B.

Underhill, L.

Longford, E.

Walston, L.

Macaulay of Bragar, L.

Whaddon, L.

McIntosh of Haringey, L.

White, B.

Milverton, L.

Williams of Elvel, L.

Molloy, L.

Winstanley, L.

Nicol, B.

NOT-CONTENTS

Airey of Abingdon, B.

Gisborough, L.

Alexander of Tunis, E.

Goold, L.

Allenby of Megiddo, V.

Gridley, L.

Annaly, L.

Hailsham of Saint Marylebone, L.

Arran, E.

Auckland, L.

Halsbury, E.

Belstead, L.

Hardinge of Penshurst, L.

Bessborough, E.

Harmar-Nicholls, L.

Birdwood, L.

Harvington, L.

Borthwick, L.

Havers, L.

Boyd-Carpenter, L.

Henley, L.

Butterworth, L.

Hesketh, L.

Caithness, E.

Hives, L.

Campbell of Alloway, L.

Home of the Hirsel, L.

Campbell of Croy, L.

Hood, V.

Carnarvon, E.

Hooper, B.

Carnegy of Lour, B.

Hylton-Foster, B.

Carnock, L.

Killearn, L.

Carr of Hadley, L.

Kinloss, Ly.

Chelmer, L.

Kinnaird, L.

Clanwilliam, E.

Knollys, V.

Clitheroe, L.

Lauderdale, E.

Cockfield, L.

Long, V.

Coleraine, L.

Lucas of Chilworth, L.

Colnbrook, L.

Lyell, L.

Constantine of Stanmore, L.

McColl of Dulwich, L.

Cork and Orrery, E.

Malmesbury, E.

Cottesloe, L.

Manchester, D.

Craigton, L.

Mancroft, L.

Cullen of Ashbourne, L.

Manton, L.

Davidson, V. [Teller.]

Margadale, L.

De La Warr, E.

Marley, L.

Denham, L. [Teller.]

Maude of Stratford-upon-Avon, L.

Dilhorne, V.

Dulverton, L.

Merrivale, L.

Eden of Winton, L.

Mersey, V.

Elibank, L.

Monk Bretton, L.

Ellenborough, L.

Morris, L.

Elliot of Harwood, B.

Mottistone, L.

Erroll of Hale, L.

Mowbray and Stourton, L.

Ferrers, E.

Moyne, L.

Fortescue, E.

Munster, E.

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Gainford, L.

Nelson, E.

1396

Norrie, L.

Skelmersdale, L.

O'Brien of Lothbury, L.

Stanley of Alderley, L.

Orkney, E.

Stodart of Leaston, L.

Orr-Ewing, L.

Strathcarron, L.

Oxfuird, V.

Strathclyde, L.

Pender, L.

Strathcona and Mount Royal, L.

Porritt, L.

Pym, L.

Strathmore and Kinghorne, E.

Rankeillour, L.

Reay, L.

Sudeley, L.

Renton, L.

Swinfen, L.

Renwick, L.

Terrington, L.

Romney, E.

Teviot, L.

Rugby, L.

Thomas of Gwydir, L.

St. Aldwyn, E.

Thomas of Swynnerton, L.

St. Davids, V.

Thurlow, L.

Salisbury, M.

Tranmire, L.

Sanderson of Bowden, L.

Trefgarne, L.

Seebohm, L.

Trumpington, B.

Shannon, E.

Ullswater, V.

Sharples, B.

Vaux of Harrowden, L.

Resolved in the negative, and amendment to the amendment disagreed to accordingly.
4.38 p.m.
[Amendments Nos. 126B to 126G not moved.]
On Question, Amendment No. 126 agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 126H:
Page 184, line 34, leave out paragraph (b).
The noble Lord said: My Lords, these amendments make small but important changes to the powers in the 1988 Act relating to information. They make it clear that the definition of information covers accounts, estimates and returns and enables us to ask authorities and community charge registration officers to make estimates of data where they have not yet done so.
There are a variety of powers in the 1988 Act which refer to information. Some relate to information which individuals are required to give to the community charge registration officer, others to requests from the Secretary of State for authorities to provide him with the data he needs to operate the revenue support grant system, for example. Usually, the information to be provided will be something which is already to hand and which is a matter of fact—the number of people living at an address, or the number of miles of road in the area.
But in certain cases, where something is a little uncertain, the authority or the CCRO are well placed to make an estimate, and the Secretary of State may wish to ask them for their estimate. We will need to make such a request, for example, to get estimates of the number of people who will make contributions to collective community charges, which are needed to calculate relevant population figures. Amendment No. 161A makes it quite clear that a power which enables a person to seek information enables him also to seek accounts, estimates or returns.
Amendments Nos. 126H and 154B both delete a requirement that the information sought should be in the possession or control of the authority or CCRO. Clearly, there is little purpose in trying to get information from a person or body which that person or body does not have. The deletion of this provision does not mean that we will attempt anything like that. The difficulty is that where we

1397
seek estimates, the present limitation means we could only ask for the estimates that have already been made. But it may be that an authority has not yet got round to making its own estimate of the matter, though it may have to hand all the data it would need to do so.
We would want authorities or CCROs in those circumstances to give us not only the estimates they have already made but, where necessary, estimates freshly made, but using only information they already have. We expect that all the matters on which we would seek estimates will be matters about which the authority or CCRO would have made an estimate anyway in due course. This power should cause little, if any, additional work.
The interaction of all these provisions can seem complex, but your Lordships will appreciate the importance of ensuring that the information needed for all those concerned to operate the system properly can be provided in the most sensible manner. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 127:
Page 185, line 3, at end insert—
(" .—(1) Section 30 (students) shall be amended as follows.
(2) The following subsection shall be inserted after subsection (1)—
"(1A) For the purposes of this Part a person shall be treated as undertaking a qualifying course of education on a particular day if (and only if) he fulfils such conditions as may be prescribed by regulations made by the Secretary of State."
(3) In subsection (2)—

(a) for "The regulations" there shall be substituted "Regulations under this section", and

(b) after "(1)" there shall be inserted "or (1A)".

(4) In subsection (3) for "The regulations" there shall be substituted "Regulations under subsection (1) above".
(5) The following subsection shall be inserted after subsection (3)—
"(3A) Regulations under subsection (1A) above must be so framed that undertaking a qualifying course of education for the purposes of this Part."
(6) In subsection (4) for "The regulations" there shall be substituted "Regulations under this section".
(7) The following subsection shall be inserted after subsection (5)—
"(6) A course of higher education is a course of any description mentioned in Schedule 6 to the Education Reform Act 1988." ")
Lord McIntosh of Haringey: My Lords, I did not know that the noble Lord was going to move this amendment formally. In the absence of any statement from him I welcome the amendment. As far as students are concerned, this concession reflects many of the matters that we have been putting forward as the poll tax legislation has been proceeding. We believe it to be a significant change and we are grateful for it.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 128:
Page 185, line 4, leave out from beginning to end of line 5 and insert—
(" .—(1) Schedule 1 (exemption) shall be amended as follows.
1398
(2) The following paragraph shall be substituted for paragraph 5 (children)—
"5. A person is an exempt individual on a particular day if the day falls within a week for which—

(a) a person is entitled to child benefit in respect of the individual, or

(b) a person would be entitled to child benefit in respect of the individual but for paragraph 1(c) of Schedule 1 to the Child Benefit Act 1975."

(3) The following paragraphs shall be substituted for paragraph 6 (students)—").
The noble Lord said: My Lords, I apologise to the noble Lord, Lord McIntosh, as regards the last amendment. I confused it with the grouping for the previous amendment which is why I moved it without any recognition of him. I hope that he will accept my apology.
Paragraph 5 of Schedule 1 of the Local Government Finance Act 1988 provides for all children, in respect of whom a person is in receipt of child benefit, to be exempt from the personal community charge. By using this universal benefit in this way the intention was to bring all individuals under the age of 18 within this exemption. However, child benefit is not paid in respect of children who have been taken into local authority residential care. It is clearly anomalous that such children should not be exempt. This amendment therefore extends the exemption to this group of individuals. The intention of the provision is unchanged and I commend the amendment to your Lordships. I beg to move.
Lord McIntosh of Haringey: My Lords, this amendment is also welcomed and we are grateful for it. It goes perhaps 1 per cent. to one-and-a-half per cent. of the way that is necessary in order to remedy the injustice that is being done by the Government in refusing to upgrade child benefits for three years running.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 129:
Page 185, line 9, leave out paragraph (b) and insert—
("(b) on the day he is resident in Scotland or Northern Ireland for the purpose of undertaking the course."").
The noble Lord said: My Lords, the intention of paragraph 4 of Schedule 5 of the Bill is to ensure that those students who are resident in Scotland or Northern Ireland for the purposes of attending a full-time course of education are, for the duration of their residence there, exempt from the personal community charge in England and Wales. However, there is some doubt as to whether the provision does achieve this object. This amendment clarifies the position and brings this provision into line with that at paragraph 2 of Schedule 5 of the Bill which sets out the way in which a student's place of residence will be determined while resident in England or Wales. I beg to move.
Lord McIntosh of Haringey: My Lords, the noble Lord is familiar with the 99 and the one. I do not believe I need go further than that.
On Question, amendment agreed to.
4.45 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 130:
Page 185, line 12, at end insert—
("6A. A person is an exempt individual on a particular day if—

(a) he is aged under 20 on the day,

(b) the day falls within a period in which he is undertaking a qualifying course of education, and

(c) the course is not undertaken in consequence of an office or employment held by the person."").

On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 131:
Page 185, line 13, leave out ("In Schedule 2 (administration) for") and insert ("Schedule 2 (administration) shall be amended as follows:
(1A) The following paragraphs shall be substituted for paragraph 2(2)(1)—
"(1) that a notice must be in a prescribed form,
(1a) that a notice must contain prescribed matters,
(1b) that a notice must not contain other prescribed matters,
(1c) that where a notice is invalid because it does not comply with regulations under paragraph (1) or (1a) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (f) or (k) above shall nevertheless have effect as if the notice were valid,
(1d) that where a notice is invalid because it does not comply with regulations under paragraph (1) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to issue to the chargeable person a document in the form which the notice would have taken had it complied with regulations under paragraph (1) above,
(1e) that where a notice is invalid because it does not comply with regulations under paragraph (1a) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to inform the chargeable person of such of the matters prescribed under paragraph (1a) above as were not contained in the notice,".
(1B) In paragraph 2(2)(m) the words from "and" to the end shall be omitted.
(1C) For").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendments Nos. 133, 134, 149, 219 and 220. These amendments deal with administration of community charges and non-domestic rating. They substitute and amend certain provisions in Schedules 2 and 9 to the Local Government Finance Act 1988, so that regulations made under those schedules may make provision that where there is a failure of a charging authority to issue community charge or non-domestic rate demand notices in the prescribed form or containing prescribed matters, the requirement to pay the amount payable under the notice is not affected. They provide also the manner in which the regulations may prescribe the action which is to be taken to remedy the failure in such circumstances, and that failure to supply prescribed information with the notices shall not in itself invalidate those notices.
Amendment No. 133 deals with the provisions which may be made in the regulations in respect of community charge demand notices, and the information which is to accompany a notice. Amendment No. 149 deals with those which may be made in respect of non-domestic rate notices.
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Amendments Nos. 133 and 134 are consequential on Amendment No. 131. Amendments Nos. 219 and 220 make repeals consequential on Amendments Nos. 131 and 149 respectively.
As the Act currently stands, paragraphs 2(2)(1) of Schedule 2 and 2(2)(g) of Schedule 9 do not allow the regulations to provide for the circumstances where there is a failure to issue notices which are in the prescribed form or ones which include the prescribed matters, but where, notwithstanding that those notices are invalid, the cause of that invalidity is not sufficiently material to warrant rendering invalid the requirement to pay, which could create major difficulties for authorities.
The new provisions provided respectively by Amendments Nos. 131 and 149 mean that the regulations can provide that in such circumstances, for instance where something has gone wrong with the printing or where there has been some other purely administrative failing in the preparation of the notices, the requirement to pay is unaffected, but the charging authority must remedy the failure by sending the charge or rate payer a revised form of the notice or the matters which should have been issued or included, in such manner as may be prescribed.
Noble Lords will appreciate that we seek by these amendments to provide a reasonable and practicable framework for the administration of community charges and non-domestic rates. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 131A:
Page 186, line 5, at end insert—
("( ) In that Schedule, the following sub-paragraph shall be added after paragraph 8(5).
"(6) The regulations shall not enable the Community Charge Registration Officer to require information from an employee of a body corporate where—

(a) the body corporate holds a lease or under-lease of the property or owns the property; and

(b) the employee does not hold a lease or under-lease of the property or own the property".").

The noble Lord said: My Lords, I hope that this amendment is an improved version of an amendment which my noble friend Lord Graham of Edmonton moved at the Committee stage. It arises from the provision in Regulation 4 of the Community Charges Administration and Enforcement Regulations 1989 which empower the community charge registration officer to require information from a responsible individual. When the poll tax Bill was going through this House I understood a "responsible individual" to refer to somebody in the household, in other words, someone who appears to the registration officer to be the most suitable person to give information about the household.
It has come to our notice that there are community charge registration officers who are proposing to use the description "responsible individual" to refer to an employee of a landlord organisation. By such an organisation we mean principally housing associations because they form the largest group of landlord organisations which may be concerned. It

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seems to the housing association movement that it should not be saddled with the responsibility, I nearly said, of being coppers' narks. It is not quite like that, but very nearly.
The relationship with their tenants is not enhanced by a requirement by a community charge registration officer that an employee should have to give information about the household. Employees of housing associations do not necessarily have to know about the composition of the household, and in many ways it is right that they should not have to know. They are not in loco parentis for their tenants. Their tenants are individual adults in households and are responsible for their own destiny. I do not know whether the practice of demanding information is widespread but it ought not to be allowed. The amendment would prohibit it. I hope that the Government will find some sympathy for its purpose. I beg to move.
Lord Hesketh: My Lords, as the noble Lord pointed out, a similar amendment was moved by the noble Lord, Lord Graham, in Committee. The amendment concerns the ability of a community charge registration officer to obtain information from corporate bodies on those people who are tenants or who sub-lease accommodation from that corporate body. Regulation 4 of the Community Charge (Administration and Enforcement) Regulations 1989 allows community charge registration officers to designate only individuals, aged 18 or over, not corporate bodies, as being responsible for providing information in respect of such properties. Consequently, the effect of this amendment would be to prevent community charge registration officers receiving any such information from corporate bodies.
The Government do not accept such a restriction on the information which can be made available to a community charge registration officer. There may be situations where an individual not in residence in a particular property is, nonetheless, the person best placed to answer for the occupants of that property. The owner or leaseholder of the property may be a body corporate and, consequently, an employee of that body may be the most appropriate, or indeed, the only appropriate individual to designate in respect of that property.
The legislation does provide protection against the unreasonable use of the power to designate individuals. Section 23 of the Local Government Finance Act 1988 provides that any person who is aggrieved by being designated as a responsible individual may appeal against the designation: first to the registration officer; and, if the decision is not revoked, to an independent valuation and community charge tribunal. If the designation is unreasonable it will not survive this appeal process.
In view of its effects, and bearing in mind the protection afforded to individuals already successfully enshrined in the legislation, the Government have no alternative but to resist the noble Lord's blandishments.
Lord McIntosh of Haringey: My Lords, the position as I now understand it is worse than it appeared to be in Committee. At that time the noble Lord appeared to be under the impression that a responsible individual could only be an individual aged 18 or over. He resisted the notion that a responsible individual could be an employee of a body corporate such as a landlord organisation. When pressed by my noble friend Lord Graham, he went on to say that he would be happy to hear any evidence of the kind of abuse we had referred to. The National Federation of Housing Associations replied to this invitation on 17th October—only a week after the Committee date. It has not had a reply so far as I know. Is the Minister able to say whether a reply has been prepared and what the reply contains?
Lord Hesketh: My Lords, I can assure the noble Lord that it will be receiving a reply. It will be based on the answer I have given this afternoon to the noble Lord's amendment. We believe that the protection in the Bill is satisfactory.
Lord McIntosh of Haringey: My Lords, the protection on which the Minister is now relying is the protection of the appeals procedure. That was not the burden of the complaint. The burden of the complaint is that employees of housing associations are being required to report on the family composition of their tenants. It is none of their business, and they do not think that it is any of their business to report on the family composition of their tenants. The appeals procedure has nothing to do with it. It is not a question of the quality of the information they provide. It is a question of the intrusion into the personal privacy of the tenants of housing associations. That is an unsatisfactory response.
I hope that by the time we come to Third Reading there will have been a proper reply to the National Federation of Housing Associations. If that reply appears to be as inadequate as the answer we have been given today, we shall have to act further at that stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 132:
Page 186,1ine 6, leave out ("In that Schedule the") and insert—
("In paragraph 9 (information) in sub-paragraph (1) for "is mentioned in sub-paragraph (2)" there shall be substituted "falls within sub-paragraph (2) or (2A)".
(2A) In paragraph 9, in sub-paragraph (2) after "The information" there shall be inserted "falling within this sub-paragraph".
(2B) In paragraph 9, the following sub-paragraph shall be inserted after sub-paragraph (2)—
"(2A) The information falling within this sub-paragraph is information whether, on any day specified in the request, any person so specified is undertaking a qualifying course of education."
(2C) The").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 133:
Page 186, line 20, leave out ("In that Schedule").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 134:
Page 186, line 21, leave out ("In that Schedule").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 135:
Page 190, line 3, at end insert—
("(16) The Secretary of State may by order amend subsection (11) above by the insertion of such additional factors as he thinks fit." ").
The noble Lord said: My Lords, the House may welcome a little background to this amendment. Section 40 of the Local Government Finance Act 1988 makes provision for multipliers, up to a maximum of two, to be applied to the standard community charge on the basis of classes of property defined by the Secretary of State in regulations. However, local authorities have found these arrangements too rigid to enable them to classify properties in a sufficiently flexible manner to meet their needs.
Consequently, as noble Lords are aware, amendments to Section 40 were introduced, and agreed to, in Committee. These give local authorities the ability to specify their own classes of property for the purposes of defining multipliers for the standard charge, but only on the basis of certain factors specified in the provision. The Secretary of State retains the power to define maximum multipliers on certain classes of property but the local authorities may charge up to twice the standard charge on those classes which they themselves define.
The purpose of this simple amendment is to give the Secretary of State the ability to define additional factors in relation to which the local authorities may specify classes. It does not enable the Secretary of State to remove or amend any factors already contained in the provision. The power may be used only to increase the factors authorities can take into account, and its purpose is to enable him to respond if it becomes apparent that the existing factors are insufficient to allow local authorities to exercise their discretion in cases where it would be entirely appropriate for them to do so. I beg to move.
On Question, amendment agreed to.
The Paymaster General (The Earl of Caithness)The Paymaster General (The Earl of Caithness) moved Amendment No. 135A:
Page 190, line 13, leave out ("In section 44 (occupied hereditaments: supplementary) in") and insert (".—(1) Section 44 (occupied hereditaments: supplementary) shall be amended as follows.
(2) In").
The noble Earl said: My Lords, with the leave of the House, I should like to speak to Amendments Nos. 135B, 136, 137, 139, 162, 216A and 216B. Section 44 of the 1988 Act contains a power which it was intended should be used to make rules providing for charging authorities to reduce the rate bill of a property which is partly occupied. The intention was broadly to follow the provisions of Section 25 of the General Rate Act 1967. However, the regulation power was found not to be wide enough. Amendments Nos. 135A and 135B therefore introduce a new section in the 1988 Act which makes the appropriate provisions.
Amendments Nos. 137, 139 and 162 make provision for charging authorities to serve completion notices on the owners of new buildings when the building is complete or where in the authorities' opinion the works remaining to be done can be completed within three months. The notice can be withdrawn where agreement on a completion date is reached with the ratepayer and there is a right of appeal to the valuation and community charge tribunal for the ratepayer where he disputes the date in the notice. These provisions generally follow those which apply under the General Rate Act 1967.
Amendments Nos. 216A and 216B are amendments to the repeals in Schedule 12 to the Bill consequent on Amendment No. 135B. Amendment No. 136 is a drafting amendment.
These amendments will enable unoccupied property rating under the Local Government Finance Act 1988 to work properly. They largely replicate provisions in existing legislation which is to be repealed when the 1988 Act takes effect. They are the result of extensive discussions with the local authority associations and the professions. I commend them to the House. I beg to move.
On Question, amendment agreed to.
5 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 135B, 136 and 137:
Page 190, line 14, at end insert —
("(3) Subsection (3) shall be omitted.
The following section shall be inserted after section 44 —
partly occupied hereditaments.
44A. —(1) Where a hereditament is shown in a charging authority's local non-domestic rating list and it appears to the authority that part of the hereditament is unoccupied but will remain so for a short time only the authority may require the valuation officer for the authority to apportion the rateable value of the hereditament between the occupied and unoccupied parts of the hereditament and to certify the apportionment to the authority.
(2) The reference in subsection (1) above to the rateable value of the hereditament is a reference to the rateable value shown under section 42(4) above as regards the hereditament for the day on which the authority makes its requirement.
(3) For the purposes of this section an apportionment under subsection (1) above shall be treated as applicable for any day which—

(a) falls within the operative period in relation to the apportionment, and

(b) is a day for which the rateable value shown under section 42(4) above as regards the hereditament to which the apportionment relates is the same as that so shown for the day on which the authority requires the apportionment.

(4) References in this section to the operative period in relation to an apportionment are references to period beginning—

(a) where requiring the apportionment does not have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day on which the hereditament to which the apportionment relates became partly unoccupied, and

(b) where requiring the apportionment does have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day immediately following the end of that period and ending with the first day on which one or more of the events listed below occurs.

(5) The events are —

(a) the occupation of any of the unoccupied part of the hereditament to which the apportionment relates;

(b) the ending of the rate period in which the authority requires the apportionment;

(c) the requiring of a further apportionment under subsection (1) above in relation to the hereditament to which the apportionment relates;

(d) the hereditament to which the apportionment relates becoming completely unoccupied.

(6) Subsection (7) below applies where —

(a) a charging authority requires an apportionment under subsection (1) above, and

(b) the hereditament to which the apportionment relates does not fall within a class prescribed under section 45(1)(d) below.

(7) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)—
"(2) A is such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament. (2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(l) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day."
(8) Subsection (9) below applies where —

(a) a charging authority requires an apportionment under subsection (1) above, and

(b) the hereditament to which the apportionment relates falls within a class prescribed under section 45(1)(d) below.

(9) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)—
"(2) A is the sum of —

(a) such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament, and

(b) one half of such part of that rateable value as is assigned by the relevant apportionment to the unoccupied part of the hereditament.

(2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(1) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day."
(10)References in subsections (1) to (5) above to the hereditament, in relation to a hereditament which is partly domestic property or partly exempt from local non-domestic rating, shall, except where the reference is to the rateable value of the hereditament, be construed as references to such part of the hereditament as is neither domestic property nor exempt from local non-domestic rating."").
Page 190, line 14, at end insert —
(" . —(1) Section 45 (unoccupied hereditaments: liability) shall be amended as follows.
(2) In subsection (1)(d) for "description" there shall be substituted "class".
(3) The following subsections shall be inserted after subsection (8)—
"(9) For the purposes of subsection (1)(d) above a class may be prescribed by reference to such factors as the Secretary of State sees fit.
(10) Without prejudice to the generality of subsection (9) above, a class may be prescribed by reference to one or more of the following factors —

(a) the physical characteristics of hereditaments;

(b) the fact that hereditaments have been unoccupied at any time preceding the day mentioned in subsection (1) above;

(c) the fact that the owners of hereditaments fall within prescribed descriptions" ").

Page 190, line 16, at end insert —
(" . The following section shall be inserted after section 46—
"Unoccupied hereditaments: new buildings.
46A. —(1) Schedule 4A below (which makes provision with respect to the determination of a day as the completion day in relation to a new building) shall have effect.
(2) Where—

(a) a completion notice is served under Schedule 4A below, and

(b) the building to which the notice relates is not completed on or before the relevant day,

then for the purposes of section 42 above and Schedule 6 below the building shall be deemed to be completed on that day.
(3) For the purposes of subsection (2) above the relevant day in relation to a completion notice is—

(a) where an appeal against the notice is brought under paragraph 4 of Schedule 4A below, the day stated in the notice, and

(b) where no appeal against the notice is brought under that paragraph, the day determined under that Schedule as the completion day in relation to the building to which the notice relates.

(4) Where—

(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and

(b) the building is not occupied on that day,

it shall be deemed for the purposes of section 45 above to become unoccupied on that day.
(5) Where —

(a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and

(b) the building is one produced by the structural alteration of an existing building,

the hereditament which comprised the existing building shall be deemed for the purposes of section 45 above to have ceased to exist, and to have been omitted from the list, on that day.
(6) In this section —

(a) "building" includes part of a building, and

(b) references to a new building include references to a building produced by the structural alteration of an existing building where the existing building is comprised in a hereditament which, by virtue of the alteration, becomes, or becomes part of, a different hereditament or different hereditaments."").

On Question, amendments agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 138:
Page 190, line 27, leave out paragraph 20.
The noble Earl said: My Lords, in moving this amendment, I shall, with the leave of the House, speak also to Amendments Nos. 138A, 138B, 140, 142 and 143. This group of amendments are minor drafting amendments. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 138A:
Page 191, line 26, at end insert —
("(3A) In subsection (7)(b) the words "at a prescribed rate" shall be omitted.").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 139 and 140:
Page 192, line 37, at end insert —
(". The following Schedule shall be inserted after Schedule 4 —
"SCHEDULE 4A
NON-DOMESTIC RATING: NEW BUILDINGS (COMPLETION DAYS)
Completion Notices
1. —(1) If it comes to the notice of a charging authority that the work remaining to be done on a new building in its area is

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such that the building can reasonably be expected to be completed within 3 months, the authority shall serve a notice under this paragraph on the owner of the building as soon as is reasonably practicable unless the valuation officer otherwise directs in writing.
(2) If it comes to the notice of a charging authority that a new building in its area has been completed, the authority may serve a notice under this paragraph on the owner of the building unless the valuation officer otherwise directs in writing.
(3) A charging authority may withdraw a notice under this paragraph by serving on the owner of the building to which the notice relates a subsequent notice under this paragraph.
(4) Where an appeal under paragraph 4 below has been brought against a notice under this paragraph, the power conferred by subparagraph (3) above shall only be exercisable with the consent in writing of the owner of the bulding to which the notice relates.
(5) The power conferred by subparagraph (3) above shall cease to be exercisable in relation to a notice under this paragraph once a day has been determined under this Schedule as the completion day in relation to the building to which the notice relates.
(6) In this Schedule "completion notice" means a notice under this paragraph.
2. —(1) A completion notice shall specify the building to which it relates and state the day which the authority proposes as the completion day in relation to the building.
(2) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is not completed, the authority shall propose as the completion day such day, not later than 3 months from and including the day on which the notice is served, as the authority considers is a day by which the building can reasonably be expected to be completed.
(3) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is completed, the authority shall propose as the completion day the day on which the notice is served.
Determination of completion day
3. —(1) If the person on whom a completion notice is served agrees in writing with the authority by whom the notice is served that a day specified by the agreement shall be the completion day in relation to the building, that day shall be the completion day in relation to it.
(2) Where such an agreement as is mentioned in subparagraph (1) above is made, the completion notice relating to the building shall be deemed to have been withdrawn.
4. —(1) A person on whom a completion notice is served may appeal to a valuation and community charge tribunal against the notice on the gound that the building to which the notice relates has not been or, as the case may be, cannot reasonably be expected to be completed by the day stated in the notice.
(2) Where a person appeals against a completion notice and the appeal is not withdrawn or dismissed, the completion day shall be such day as the tribunal shall determine.
5. Where a completion notice is not withdrawn and no appeal under paragraph 4 above is brought against the notice or any appeal under that paragraph is dismissed or withdrawn, the day stated in the notice shall be the completion day in relation to the building.
Position pending appeal
6. —(1) Where an appeal under paragraph 4 above is brought against a completion notice, then in relation to any day on which the appeal is pending section 45 above shall apply by virtue of section 46A(4) above as if the day stated in the notice had been determined under this Schedule as the completion day in relation to the building to which the notice relates.
(2) The Secretary of State may make regulations providing for the making of financial adjustments where subparagraph (1) applies but the day stated in the completion notice is not actually determined as the completion day in relation to the building to which the notice relates.
(3) Regulations under subparagraph (2) above may include—

(a) provision requiring payments to be made,

(b) provision requiring payments to be made together with payments of interest, and

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(c)provision as to the recovery(by deduction or otherwise)of sums due.

(4) For the purpose of deciding, for the purposes of this paragraph, whether an appeal is pending on a particular day, the state of affairs existing immediately before the day ends shall be treated as having existed throughout the day.
Duty to inform valuation officer
7. —(1) A charging authority shall supply to the valuation officer a copy of any completion notice served by it.
(2) If a charging authority withdraws a completion notice, it shall inform the valuation officer of that fact.
(3) A charging authority shall supply the valuation officer with details of any agreement to which it is a party and by virtue of which a completion day is determined under this Schedule in relation to a building.
Supplementary
8. Without prejudice to any other mode of service, a completion notice may be served on a person —

(a) by sending it in a prepaid registered letter, or by the recorded delivery service, addressed to that person at his usual or last known place of abode or, in a case where an address for service has been given by that person, at that address;

(b) in the case of an incorporated company or body, by delivering it to the secretary or clerk of the company or body at their registered or principal office or sending it in a prepaid registered letter or by the recorded delivery service addressed to the secretary or clerk of the company or body at that office; or

(c) where the name or address of that person cannot be ascertained after reasonable inquiry, by addressing it to him by the description of "owner" of the building (describing it) to which the notice relates and by affixing it to some conspicuous part of the building.

9. —(1) This paragraph applies in the case of a building to which work remains to be done which is customarily done to a building of the type in question after the building has been substantially completed.
(2) It shall be assumed for the purposes of this Schedule that the building has been or can reasonably be expected to be completed at the end of such period beginning with the date of its completion apart from the work as is reasonably required for carrying out the work.
10. —(1) Section 46A(6) applies for the purposes of this Schedule.
(2) In this Schedule —
"completion notice" has the meaning given by paragraph 1(6) above;
"owner", in relation to a building, means the person entitled to possession of the building;
references to the valuation officer, in relation to a charging authority, are references to the valuation officer for the authority." ")
Page 192, line 38, at end insert —
("(1A) In paragraph 7 (agricultural buildings) in each of subparagraphs (1)(b) and (3), for "(together with the body".").
there shall be substituted "or are together with the body".").
The noble Earl said: My Lords, these amendments have already been spoken to and therefore I beg to move.
On Question, amendments agreed to.
Lord Colnbrook Lord Colnbrook moved Amendment No. 140A: Page 192, line 38, at end insert—
("(1A) In paragraph 5(1)(a) after "livestock" insert "or the breeding or rearing of horses and ponies").
The noble Lord said: My Lords, in moving this amendment, I should like with the leave of the House to speak also to Amendment No. 141A. I do not think that I need detain your Lordships very long in discussing this amendment because we had considerable discussions about the rating of stud

1409
farms in Committee and on Report when dealing with the Local Government and Finance Bill 1988. However, I shall explain why I am returning now to the point.
Perhaps I may remind the House briefly how the matter arose. For over half a century it was accepted by successive governments and by no fewer than 13 Parliaments that the law classed the breeding and rearing of horses and ponies as an agricultural activity which was therefore exempted from paying rates. It was not until the 1980s that an attempt was made to test this interpretation of the law in the courts. It was only in December 1987 that it was decided by this House that the law was not in fact as everyone had believed it to be for so long and that stud farms had to pay rates.
Amendments to the Local Government and Finance Bill in precisely the same terms as in Amendment No. 140A were moved in Committee by the noble Lord, Lord Mason of Barnsley, and on Report by me. They attracted support from a considerable number of your Lordships. The Government, while professing themselves unable to accept the amendment, acknowledged that there was a case. They indicated that they had in mind to exempt at least the small breeder of horses and ponies and said that they would consult with the representatives of the horse and pony breeding industry as to how this could best be achieved.
These consultations have been continuing now for 16 months, but the Government have still not reached any conclusion. Paragraph 31(9)(2A) in Schedule 5 to the present Bill states that the Government will do something by Order in Council, but they do not as yet know what that will be. The simplest and best action for them to take is for them to accept Amendment No. 140A. That would not only restore the position to that which they, their predecessors, the breeders of horses and ponies and everyone else, were content with for over 50 years, but it would also have two other advantages.
First, it would keep this country more in line with other European Community countries. With the Government so keen on progressive harmonisation in the period up to and beyond 1992, this must be a step which they would welcome.
Secondly, the government are encouraging farmers to develop alternative uses of their land. An increasingly popular activity in the country is the riding of horses and ponies. Indeed, the Government actually give grants from public funds to encourage pony trekking. It seems hardly consistent, to say the least, that they should give public money to encourage the use of horses and ponies and at the same time impose large rate bills on those who breed the animals.
However, if the Government will not accept Amendment No. 140A, I hope that they will accept Amendment No. 141A. It will be seen that this amendment simply writes into the Bill the precise size of establishment which will be exempt, rather than leaving it to the Minister to produce an unamendable Order in Council at a later stage. In my view, this is a much better way of legislating.
I do not think that the Minister will seriously quarrel with the figure that I have put in the amendment —that is, a floor area of 500 square metres. In the consultations to which I have referred, I think it has been made clear to the Minister's officials that all those who actually breed and rear horses and ponies regard this as the minimum they need if they have two brood mares and their followers. I am encouraged in this belief by what his honourable friend Mr. Michael Howard, the then Minister for Local Government, has said in letters, especially one dated 25th July last year addressed to Sir Charles Morrison the Member for Parliament for Devizes. In the letter he agrees that what the Government seek to do is to exempt from payment of rates buildings used for the keeping and breeding of horses up to a maximum consistent with the keeping of two horses. I assume —and I should be grateful if my noble friend would confirm—that he means two mares because you do not breed from a gelding.
Mr. Michael Howard then went on to say in the letter that the Government's intention is to reassure the great majority of breeders that they will not have to pay rates. That is a valuable assumption. Again, I hope that my noble friend will repeat that that is still the Government's intention. Of course, the matter will be placed beyond doubt if the Government accept Amendment No. 140A or, as a fallback position, Amendment No. 141 A. I hope that they will do so. I beg to move.
The Earl of Caithness: My Lords, there are many of us in the Chamber today who will remember the extensive discussions we had both in Committee and on Report while discussing the Local Government Finance Act 1988 regarding a similar amendment to that moved by my noble friend this afternoon. At the conclusion of those debates I conceded that where farmers kept one or two horses for their own enjoyment or for breeding on a small sicale, largely as a hobby, rating could be an unwelcome additional burden as well as presenting some practical valuation problems.
At this point I should stress the word "hobby". It is exactly the same word that I used during earlier discussions. This is where my noble friend and I start to have different points of view. He was clearly not talking about the hobby breeder, whereas the Government have said all along during the discussions on the 1988 Act, and again now, that we are talking about the small scale hobby breeder.
Having made those comments, we recognised that there may be better ways of approaching the definition of the de minimis exemption We proposed. We undertook to examine the problem in conjunction with representatives of the horse breeding industry and to bring forward legislation at a later date. On that basis both sides agreed to withdraw their amendments.
Discussions have taken place and this Bill provides for the deduction of a standard amount from the rateable value of buildings associated with the breeding and rearing of horses and ponies where that activity is carried out in conjunction with an agricultural operation on agricultural land. Your

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Lordships will find that in Schedule 5(31)(9). Those proposals go considerably further than extending the exemption to the farmer who breeds horses as a hobby. They also extend to the horse breeder who farms. We have deliberately left the amount of the reduction to be set by order so that we can set it at a level consistent with values being determined for stud buildings in the present revaluation of non-domestic property and so that it can be updated in line with future revaluations. There have been several discussions with the breeders about the proposed amount and we shall consult them further before choosing a final figure. We asked the Valuation Office to carry out a survey of the likely rateable values of stud buildings in the new rating list in order to inform the decision, and that information has been passed to the breeders. We shall have the opportunity to consider our proposals further, if we wish, when the statutory instrument containing our proposed figure is laid. That seems to me to be a wholly reasonable position.
I have listened carefully to what my noble friend has said about the historic position of stud farms and I have not heard anything that has not previously been said in this House. Stud farms have not been derated as a matter of law as my noble friend implied yet again. If they were not assessed or were taken out of assessment, that practice grew up on a misunderstanding of decisions in the 1930s which were either not binding in law or were given in a context other than a rating one. The ruling of your Lordships' House in the Whitsbury Farm and Stud Ltd. appeal case showed that the breeding of horses and ponies is not an agricultural activity for the purposes of the General Rate Act 1967. That is the starting point of our consideration. There is nothing to be gained from rehearsing arguments about past practice.
The commercial breeding of horses and ponies is a business like any other. Some horse breeding businesses may be extremely lucrative, others may not be so. That situation is no different from any other class of business. Whether horse breeding is carried out commercially on a large scale or on a small scale in the hopes of producing a Derby winner or successful eventer, like any other business it benefits from local authority services and like any other business, from the department store to the corner newsagent and the industrial conglomerate to the village blacksmith, it should pay its fair share of rates.
Any new exemption means a greater burden on other ratepayers and community charge payers. I can see no reason why they should be asked to subsidise the horse breeding industry. It cannot be justifiable totally to exempt the horse breeding industry from rates when large numbers of small corner shops will face considerable increases in rate bills purely as a result of the revaluation of non-domestic property. I cannot believe that your Lordships would wish to produce such an injustice.
I can however appreciate some of the concerns that my noble friend has expressed and which give rise to Amendment No. 141A. The definition of agriculture varies throughout legislation for the different purposes of income tax, land use planning,
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rating and agricultural grants. Stud farms fall within the definition in some cases because the operation is similar to and subject to the particular problems of farming. In other cases they are excluded, because of their intensive use of buildings or because the business is not concerned primarily with the production of food for human consumption. I can assure my noble friend that the definition of agriculture contained in our proposed provision has been drafted in such a way that it applies only to that provision. It has no implications for the manner in which stud farms will be treated under other provisions in the Local Government Finance Act or any other legislation.
My noble friend has proposed that the amount of reduction in rateable value should be based on an area of 500 square metres. That could work out at a figure of £7,000 or more in the major breeding centres. Viewed against the background of our original commitment to provide a de minimis exemption, that is a considerable sum. It means that many perfectly viable commercial breeding establishments will not make any contribution towards the cost of local government services from which they benefit along with may other small businesses. The basis on which the reduction is determined is more complex than the deduction of a standard amount of rateable value and also adds an unwelcome additional burden on the valuation office by requiring it to measure all stud buildings. That would be a particularly onerous task in the largest establishments, which will benefit only marginally from the reduction. Our proposal has all the merits of a fair system and is one that can be easily understood by breeders.
Let me repeat an assurance given by the then Minister for Local Government in a letter dated 25th July 1988 to my honourable friend the Member for Devizes, Sir Charles Morrison, to which I know the breeding industry attaches importance. We recognise that there is concern among the very large numbers of breeders who keep only one or two horses and who breed on a small scale. We have proposed that buildings used in conjunction with agricultural land for breeding and rearing horses and ponies should be exempt provided they do not have a rateable value larger than a figure (to be set by order) consistent with the keeping of two horses. The Government need to consider what figure would be justified and we hope to announce shortly what that will be.
5.15 p.m.
Lord Colnbrook: My Lords, will my noble friend allow me to interrupt him? When he says two horses, he means two mares, does he not?
The Earl of Caithness: My Lords, there could be one mare and one gelding.
Lord Colnbrook: My Lords, in that case it sounds very much—I hope that I am wrong—as though my noble friend is taking something back. Is he saying that the only exemption is for someone who keeps just one mare? That is a very small breeder. It is not what I understood, although I may have

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misunderstood the matter. Is he saying that the exemption would be only for the accommodation required for one mare and its followers? That is much less than I expected. I believe that others felt the same. I hope that he will be able to say that a small breeder is someone who has one or two mares. That is not much.
The Earl of Caithness: My Lords, that is what I said about a minute ago. I said that we recognised that there is concern among a large number of breeders who keep one or two horses only and breed on a small scale. My noble friend then asked me whether that would be two mares. I said that it could be a mare and a gelding. That is still one or two horses. We are talking about a small point. I do not believe that my noble friend has anything to fear. I hope that what I have said will reassure the great majority of breeders that they will not have to pay rates.
Lord Colnbrook: My Lords, there is still a little confusion. I accept that the Government will still not accept Amendment No. 140A, which would restore the position to what everyone believed it to be. I am glad that they are still prepared to have further discussions about the exemption with those engaged in the breeding of horses and ponies. I want to make it clear that a great deal hinges on the definition of a small breeder. I know that it is difficult to define.
If the Government were to say that the definition is limited to someone who has one mare only, that is the smallest exemption they can give. I do not believe that that is what they want to do. Accommodation for two horses could be for two mares—it does not have to be all the time, but it could be—and their followers. That is a small breeder. Those who breed horses and ponies—I do not myself—believe that that is normal for someone who breeds horses or ponies for his own amusement and pleasure. I hope that I am right in my belief that that is what the Government mean. On the assumption that it is, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 141:
Page 193, line 42, at end insert —
("(4A) In paragraph 2, in subparagraph (6) for the words from "day the alteration" to the end there shall be substituted "material day."
(4B) In paragraph 2, the following subparagraph shall be inserted after subparagraph (6)—
"(6A) For the purposes of subparagraph (6) above —

(a) where the determination is occasioned by a proposal for an alteration disputing the accuracy of a previous alteration to the list, the material day is the day by reference to which the matters mentioned in subparagraph (7) below fell to be assessed when determining the rateable value with a view to making the disputed alteration;

(b) where the determination is occasioned by any proposal for an alternation other than one disputing the accuracy of a previous alteration to the list, the material day is the day the proposal is made;

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(c) where the determination is occasioned otherwise than by a proposal for an alteration, the material day is the day the alteration is entered in the list." ").

On Question, amendment agreed to.
[Amendment No. 141A not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 142 and 143:
Page 195, line 24, leave out ("and 2A" ") and insert ("to 2B" ").
Page 195, line 26, leave out ("and 2A" ") and insert ("to 2B" ").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 144:
Page 195, line 38, at end insert—
("(1A) In paragraph 7(1) for the words from "Regulations" to "that" there shall be substituted "In relation to a relevant financial year the Secretary of State may make regulations providing that".
(1B) In paragraph 8(3) for "section 57" there shall be substituted "paragraph 7".").
The noble Earl said: It may be for the convenience of the House if I speak also to Amendments Nos. 145, 146, 147, 148, 156, 157, 158, 159 and 218. These are clarifying and technical amendments. I can of course go into details if your Lordships wish. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 145:
Page 197, line 29, leave out from beginning to ("year") in line 30 and insert—
("(1) Subparagraph (1A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year exceeds the base liability for the hereditament for each day in the year.
(1A) The appropriate fraction for the hereditament for each day in the").
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 145A:
Page 198, leave out lines 3 to 14.
The noble Lord said: My Lords, in Amendments Nos. 145A and 147A, as well as the following amendment, Amendment No. 147B, we deal with the introduction of the non-domestic rate. Noble Lords may recall, although I do not suppose any noble Lords present will do so, that: when the Government made the Statement on the phasing which was to take place over the introduction of the non-domestic rate they decided to phase it in over five years. As the Minister himself has just said, some shopkeepers and factories in the south of England will face some quite traumatic increases. The fact is, however, that certain parts of the country will obtain reductions, particularly the Midlands and the North-West.
The amendments came from the Merseyside Chamber of Commerce which would obviously welcome the reductions as a chance to restore the industrial base which has been hit so hard in those parts of the country. Members of the chamber of commerce are incensed at the fact that their

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reductions will be the second phase; they will not receive the benefit immediately the new lists come into effect next year.
The effect of Amendment No. 145A—I hope this will be the effect because Schedule 5 is very complicated—is to delete paragraphs (6) and (7) on page 198. We presume that these concern the powers of the Secretary of State to determine the rate of phasing for those whose rate bills should be reduced. That is where the NCA is less than the BL, the BL being the base liability and the NCA being the notional chargeable amount. I prefer the following amendment on the issue which covers much the same point. I therefore give notice that I do not intend to press Amendment No. 145A but I shall raise the matter again on Amendment No. 147B.
Amendment No. 147A is linked with this amendment but it is rather more important. Without it, the charge for the properties which would have phased reductions or increases in rate liability in 1990 will be based on a property which has been reduced in size and value prior to 1990. There are cases where properties are being demolished at this time or reconstituted or reduced in size. Valuation officers are only human, they cannot possibly be expected to serve proposals to reduce assessments in all such cases before 31st March 1990, even as they know about them.
This is an attempt to cover those properties where demolition has either been completed or where they are undergoing complete reconstruction. I think that is worthy of note by the Government who ought to try to do something about it. I beg to move.
The Deputy Speaker (Lord Alport): My Lords, I have to advise your Lordships that if this amendment is agreed to I shall not be able to call Amendment No. 147.
The Earl of Caithness: My Lords, the first amendment, No. 145A, would remove the provisions which enable the Secretary of State to set the limits on annual reductions in rate bills by order. As your Lordships will know, we have just considered the Government's own minor amendments to these provisions, including amendments to clarify the purpose of this order-making power.
It is important to all businesses expecting rate reductions that the Secretary of State should retain maximum flexibility to set the annual limit as high as possible in the light of the best information available, consistent with the requirement that the transitional scheme should be self-financing. I have assumed that the purpose of this amendment is to secure that the percentage limits placed on the reductions in rate bills are the same as those on increases in bills.
The Secretary of State intends to set the limits as high as possible. He has indicated in another place that on the basis of the latest information these will be around 15 per cent. for small premises and around 10 per cent. for large premises. But the final percentages can only be set when the cost of protection against increases is known.
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The reason why the percentage limits on gains will be lower than those on increases is simply that gainers have on average larger rate bills than losers. The figures chosen must ensure that the non-domestic rate pool balances each year. It is for that reason that I cannot accept the amendment of the noble Lord, Lord Ross, in which he argues for effectively arbitrary limits which would prevent a transitional scheme operating, as I have just outlined.
The noble Lord may feel that the taxpayers should make good any shortfall. This is a point which I shall address when we come to Amendment No. 147B, when it arises in a somewhat starker form.
The second amendment, Amendment No. 147A, alters the provisions for determining the rateable value used for the purposes of calculating the baseline rate bill on which businesses' entitlement to transitional relief is assessed. Under paragraph 6 of Schedule 7A, the baseline bill is to be calculated by reference to the rateable value on 15th February 1989 or the date on which the property first entered the valuation list, whichever is later. The only exceptions to this rule are where the rateable value changes as a result of a proposal by a valuation officer to alter the list, regardless of when the proposal is made; or where it changes as a result of a proposal made by someone else, provided that the proposal was received by the valuation officer before 15th February.
The reason for this restriction on proposals by other people was to prevent ratepayers from mounting spurious appeals to try to better their position under the existing rating system purely in order to benefit from transition. The Government were in fact aware that some firms of private surveyors were encouraging businesses to mount such appeals on a "no win, no fee" basis. If this possibility had not been blocked, the valuation courts and the valuation office might have been overwhelmed with the volume of appeals which would have been generated, putting the timetable for the revaluation at risk and delaying appeals against the 1990 list. Many of these appeals would have been against values which had been challenged unsuccessfuly before, or which had stood unchallenged for 16 years. However, it was not intended to block ratepayers' rights to make proposals generally. They can still make proposals for change if they wish, but the changes will only have effect for determining their liability for rates for 1989–90, not for transitional purposes.
The effect of the amendment would be to allow a revised rateable value to be used in calculating the baseline bill in cases where an owner or occupier of a hereditament makes a proposal following physical changes to the property before 31st March 1990. However, there is nothing in the amendment to indicate the kind of physical changes which would trigger the right to propose a change of value.
Even the most minor change would seemingly qualify. This amendment, if carried, would therefore open up the very floodgates regarding appeals which the Government have been so anxious to keep tightly shut, for the reasons that I have already stated.

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Of course, I realise that ratepayers whose property has changed significantly would have cause to feel aggrieved if they were unable to secure a change in its rateable value and were held to an unrealistic baseline level. But it is open to them to ask the valuation officer to make a proposal to alter the value in such cases. Valuation officers have a duty to maintain the rating list and would be expected to make such a proposal if they thought that the change warranted it. In addition, we would intend to use the proposed regulation-making power under paragraph 11 of Schedule 7A to ensure that where valuation officers are unable to take account of changes which occur close to the 31st March 1990 qualifying date for transition then they will be able to certify what the value would have been, had they been able to make proposals in time. This certification will be subject to appeal to a valuation and community charge tribunal.
In conclusion, the Government feel that the amendment is largely unnecessary because the matters it seeks to address can better be dealt with in other ways.
Lord Ross of Newport: My Lords, I am grateful to the Minister for the second part of his reply. He may have set a few minds at rest. There are some people who suspect that they could be losers in a situation where they make structural alterations to property which might reduce the rateable value. The Minister has covered that position very fully and therefore I shall not move Amendment No. 147A and beg leave to withdraw Amendment No. 145A.
Amendment, by leave, withdrawn.
The Earl of Caithness: moved Amendments Nos. 146 and 147:
Page 198, line 3, leave out subparagraph (6) and insert —
("(6) Sub-paragraph (6A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year does not exceed the base liability for the hereditament for each day in the year.
(6A) The appropriate fraction for the hereditament for each day in the year shall be such as is —

(a) specified for the case by order made by the Secretary of State, or

(b) found in accordance with rules prescribed for the case by order so made.").

Page 198, line 9, leave out ("deciding whether to make, and in making,") and insert ("making").
On Question, amendments agreed to.
[Amendment No. 147A not moved.]
5.30 p.m.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 147B:
Page 200, leave out lines 1 to 37.
The noble Lord said: My Lords, this amendment comes back to the issue which we dealt with very briefly on Amendment No. 145A. It is the question of those who will gain, and there will be some, from the revaluation. The Government have not been explicit about their treatment to date. In outline we understand that the Government's plan is to hold
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back the gains to occupiers of property who find that their rate bills will go down. Some of this money will then be used to fund the limitation on losses for those whose bills will go up.
The Government cannot specify the abatement of gains until details of the rating revaluation are known later this year. As I said earlier, the type of property likely to have gains slowed down is industrial property in the North and in the Midlands. Those are just the areas where we should encourage further employment and industrial growth. Those areas will be paying for the relief to city centre shops, new warehouses and light industry in other parts of the country, particularly in the South-East.
The Government should be warned that there are many pitfalls, injustices and anomalies with the nationally nominated non-domestic rate, as there are with the poll tax. The slowing down of gains to pay for losers could be the first issue to cause an uproar when ratepayers wake up to it. They will do so when the lists are published at Christmas and they start to understand just what has hit them.
It was a colleague of the noble Earl who said at Blackpool that the gainers should not subsidise the losers. I believe that he expected me to throw that at him and I am doing so right now. Those who will have the benefit of this measure have waited long enough for it. The constant postponement of revaluations going back to 1972 has meant that in some parts of this country industrialists and others have had to pay rates based on a higher assessment than should be the case. When there is a benefit due to them, they should be entitled to receive it in full and not have it phased in slowly to lessen the impact of increases elsewhere. I beg to move.
Lord Sefton of Garston: My Lords, I feel I am an unsuitable person to speak to this amendment because I believe that it is the first time in my life that I have ever supported a chamber of commerce in its desire to improve things for its members. In this regard I speak not only on behalf of the Merseyside Chamber of Commerce and Industry but also the national association of chambers of commerce.
The Government have lectured to us today about fairness, equity and the common sense of introducing correct methods of expenditure into our national life. I have been told over the past eight to nine years how much money has been granted to Liverpool by this Government in order to improve the commercial standing of Merseyside and how all that money would help Merseyside to provide more jobs and contribute to the welfare of the nation. I accept that perhaps that was the intention, but it has not been very successful. I regret that the money has not achieved those objectives. One of the reasons why it has not assisted in any way in improving the situation of Liverpool is the fact that the Government give with one hand and take away with another.
It is a longstanding complaint of mine that one way in which the Government take away from the North and give to the South is through the subsidies that they give to the South as regards London weighting and through the overloading of the economy of the South with government activities.

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The net effect of those activities is to worsen the situation in the South-East with regard to congestion, while leaving the northern regions devoid of any investment at all.
Millions were spent on the Albert Dock. One would have expected the Government to go beyond that and help Merseyside further along the line towards regeneration. However, all they did was to enable the Merseyside development corporation to provide a lot of open vacant space inside many buildings that were tarted up from the outside. Unfortunately not many jobs came out of the exercise.
One of the difficulties that commerce has battled against in Liverpool is the fact that rateable values have been exaggerated in a way that never should have happened. When the Government stopped the revaluation in 1982, we had to search for a reason for that as we were not given a proper explanation. However, it is evident when one considers the matter that the revaluation was stopped because most of the commercial businesses in the South-East would have been hit very badly indeed, while the commercial businesses in the North would have been helped.
Now the Government are going further. They are not attempting to redress the balance in any way but rather to worsen the situation in that areas like Merseyside and Newcastle are now to be made to pay benefits to the South. Under this part of the Bill or rather under the powers that the Minister takes in this part, the Government will prevent the South-East and the wealthier parts of the country from losing out and restrict the gains that would have occurred in places like Merseyside and Newcastle. What is worse still, the Government do not in this case, as they do with the poll tax in order to pacify the mouthy Conservatives at their conference, decide that they will pay for the relief in the South or in the wealthier parts. Oh no, that will not happen, but the Government will take the money from the poorer parts of the country and use it to pay for the relief to the wealthier parts.
I shall give the House an example of what will happen to two different companies in Merseyside. One is a large manufacturing company with a current rateable value of £400,000 and the other is a medium-sized company with a current rateable value of £46,000. The new rate payable without phasing in the case of the large company would be £245,000. With the phasing that is now proposed by the Government, it would be £1,350,000. So at one fell swoop they will take from that large company in Liverpool over £1 million, which it should gain if correct rateable values were levied all over the country. The Government will not put that money in the Exchequer. They will use that million pounds to pay for people, mainly in the South-East, who will be classified as the losers. That is what will happen to that large company. I have no doubt that that large company also has interests in the South-East and in other wealthy parts of the country, so to some extent it will be taking the money out of one pocket and putting into another. But the Government have spent a long time putting money into places like
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Liverpool in order to allow smaller companies to grow.
The medium sized company which is probably based and, has interests only in Merseyside will pay under the new rate without the phasing £38,500 a year. With phasing the rate would be £160,000. If that kind of difficulty were visited upon everyone, I should not object. But that company in Liverpool will pay about £120,000 a year in order to assist people in more affluent areas. That estimate of the effect of the introduction of the unified business rate was made by the Merseyside Chamber of Commerce, which is perhaps a little biased.
I have a commentary by Michael Postlethwaite, Partner, Matthews and Goodman of Liverpool, a firm which has business all over the country and would not wish to be biased. It would like to get the figures right. It says in 1989–90 the rate for a modern office in Liverpool or Newcastle would be £4.14 per square foot. Without phasing in 1990–91 it would be £2.14; with phasing it would be £3.91. That estimate cannot be said to be biased or to have been formulated by myself or by the Merseyside Chamber of Commerce. It is a rational explanation of what will happen.
If they know what is to happen, I cannot understand why noble Lords on the other side of this Chamber can go even half way to accepting it. They have lectured us about the need to assist small companies and to give them a fair break. The noble Lord, Lord Hesketh, boasted today about the £2.4 billion that is to be given in relief to ordinary people in respect of the poll tax. I have no objection to that. However, I should like to see sufficient employment in places like Merseyside for the poll tax not to bear so heavily upon people. We could have such a situation if the government were really intent on helping small businesses to grow in Merseyside, but it is evident that they are not.
It is evident that the pressures that have been brought to bear on the Government in the South are such that they have closed their eyes to the retrogressive effect of the measures. It is no use lecturing Merseyside, Newcastle, the North-East or the rest of the country about how they should pull themselves up by the bootstraps if the Government pursue a policy which takes the boots away from them, let alone the bootstraps. That is what is happening.
I should like to make one more point about the question of the assistance that the Government have given to the North-West. Perhaps I may take as an example the place that I know best, Merseyside. Two years ago I asked the Government, in this House, whether they had considered the auditor's report on the Merseyside Dockland Development Corporation. That report said that because of the economic pressures and built-in growth element in the South-East the London Dockland Development Corporation was a success but because there was no inbuilt growth in Merseyside it was doubtful whether the Merseyside Development Corporation should go ahead. That was two years ago. The Government are still considering that auditor's report. Just before the House rose for the Summer Recess I asked the same question. There was no reply.

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It is quite evident that the Government could not care less about people north of Watford. When the impact of the Channel Tunnel is taken into account, and considering all the money that has been ploughed into transport infrastructure in the South-East and the impact of this particular tax on small companies in Liverpool, this can be seen to be one of the most unjust actions that the Government have ever taken. Worse still, it will be uneconomic and it will be bad government.
I thought that we should have opposed the clause in the Bill which gave the Minister power to introduce the scheme. I was advised that this was the best place to oppose the measure. In effect, we are appealing to the Government to follow the same principles that they say they are following in respect of the poll tax. If there is to be relief for a hard-done-by area then that relief should be provided out of the pool of government funds. The money should not be taken from the poorer elements of the economic community in order to benefit those who are much better off, mainly because of the inbuilt growth in London and the South-East. That is our plea.
Before I sit down I should like to ask the Minister to tell the House honestly whether or not he sees the justice of what I have said, regardless of the briefs which he receives from the department. If the losers under the unified business rate are to be assisted, is it right that that assistance should come from the gainers? Is that morally justified? Is it economically justified?
5.45 p.m.
Lord McIntosh of Haringey: My Lords, in responding to the previous amendment moved by the noble Lord, Lord Ross of Newport, the Minister described Amendment No. 147B as putting the issue in starker terms. It does indeed, as noble Lords who have already spoken to it have made clear. My noble friend Lord Sefton asked what the principle could be in treating the national non-domestic rate differently from the poll tax when, as we all know, £685 million from the Exchequer is to be given in the form of the new transitional relief—plus probably about £200 million in transitional relief in the first year to London boroughs in respect of ILEA. Altogether, nearly £900 million is to be given from the Exchequer in relief for individual poll tax payers in more wealthy areas.
It is no good asking for principle. In asking for principle my noble friend Lord Sefton is speaking into a void. The question that we have to ask ourselves is: cui bono? Who benefits? The concession of nearly £1,000 million of public money is made to protect Conservative voters. Will something now be done to protect industry and commerce in the north, north-east and north-west of our country where the need for industry and for employment and jobs is most desperate?
The Earl of Caithness: My Lords, the effect of the amendment is to remove from the basic transition scheme for the new non-domestic rating system the provisions which govern the limit on gains for those
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who stand to benefit from the changes. The intention is to enable gainers to have their gains immediately.
While I have sympathy with the motive which lies behind the amendment it is difficult for me to recommend it to the House. It is necessary to keep in mind that rate bills will change under the new system for two reasons: the introduction of the uniform business rate poundage and the first non-domestic revaluation for 16 years. In some cases, those factors will reinforce each other to the disadvantage of the ratepayer; in others, they will both work to the ratepayer's benefit. And in yet other cases the two changes will run in opposite directions and will cancel each other out to a lesser or greater extent.
Because of that combination of circumstances,the particular position of any individual ratepayer is, to some extent, fortuitous. We think it right that the more fortunate should help pay for those who are less fortunate. The arrangements we have put forward in the Bill do just that. If the amendment before us is accepted, however, the cost of helping the losers would have to come from elsewhere.
There is, of course, more than one way in which the cost of paying for losers might be met. One option would be to ask the taxpayer to foot the bill. But the cost of allowing gainers to have their gains immediately would be some £1.1 billion in the first year, and a further £2 billion in the next four years. I see no reason why the contribution from businesses should be reduced by such an amount. In addition, most taxpayers will already be paying a contribution to the cost of local authority spending through their community charge. I am sure that noble Lords are not suggesting that they should also pay part of the business contribution on top of that.
The other option would be to put a premium on the non-domestic rate poundage using our powers under paragraph 7 of Schedule 7 to the 1988 Act. The Government considered that option very carefully, but our conclusion was that, in order to keep the non-domestic rate pool in balance, the poundage in the first year would have to be set at a level some 25 per cent. or more above the level at which it might otherwise have been set. That would have diminished the gains of the main beneficiaries of the new system, would have turned many gainers into losers and would have exacerbated the position for losers.
In conclusion, adopting the amendment proposed would, in the Government's view, leave the transitional scheme with considerable disadvantages over the arrangements that we have proposed.
Noble Lords have suggested that, because the Government have agreed to fund the transitional relief scheme for the community charge and, from the second year, the area safety net as well, they should offer similar assistance to businesses. The Government do not accept that the two cases are comparable. Overall, business is getting a good deal from the new rating system. The yield from business rates is to be held broadly constant in real terms between 1989–90 and 1990–91, and in future years the poundage cannot go up more than the RPI. I am sure that the noble Lord, Lord Sefton of Garston,

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will be pleased to hear that in view of some of the increases that have been suffered in his area. We do not see why business should expect, over and above that, a substantial cut in its aggregate rates burden.
Secondly, the bulk of the shift in rates burden which will take place after April is attributable not to the uniform business rate, which is certainly a new initiative, but to revaluation which is a necessary feature of the rating system and is long overdue. I put it to the House that business should not expect a handout from the taxpayer on that account. Quite apart from that, we on this side of the Chamber know that the taxpayer's pocket is not bottomless. The Government have to decide priorities for expenditure between competing claims and in this case we felt that the easing of the impact of the introduction of the personal community charge was the right way to use available resources.
Lord Sefton of Garston: My Lords, before the Minister sits down, perhaps he will say whether he agrees with me that, since 1982 in particular and well before, the companies to which I referred have paid more than they should have done if re-rating had taken place over the whole of the country? What does he say about the money that they have lost in that regard? Does he not think that someone somewhere has a right to compensation?
The Earl of Caithness: My Lords, if my memory serves me right, both the previous Labour Government and this Government did not carry out the revaluations. That is one of the causes of the problem. It is some 16 years since there was a revaluation. That exacerbates the distortions already in the system from the previous revaluation. I agree with the noble Lord on that.
Lord Ross of Newport: My Lords, I am grateful for the support of the noble Lord, Lord Sefton of Garston, who spoke with personal knowledge of Merseyside. I apologise for the fact that my noble friend Lord Evans of Claughton cannot be here today. I know that he spoke to the noble Lord, Lord Sefton, about the amendment.
I suspect that by next April, when the valuation list comes into effect, industry and much of commerce will be knocking hard at the Government's door saying that they have to do something rather more than just phase in the new rating over five years if they are to stay in business. I suggest that much of industry in this country is already starting to face real difficulties. Certainly, the building industry in particular and much of commerce, including smaller shopkeepers, are also facing great difficulties, as we have seen. The receivers are being called in in quite a substantial number of sizeable chains of shops. We shall face a serious situation if interest rates remain as high as they are at the present time.
One of the facts that the Government will have to face is that they must bring in some industrial concessions. We should divide the House on the issue because here was a chance for the Government to do something realistic for those areas of the country which are still suffering high rates of
1424
unemployment —18 per cent. and above in some parts. It seems only equitable to me that the provisions for the poll tax payer should also come in for the commercial ratepayer.
5.54 p.m.
On Question, Whether the said amendment (No. 147B) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 116.

DIVISION NO. 2

CONTENTS

Airedale, L.

Lloyd of Kilgerran, L.

Amherst, E.

Lockwood, B.

Ardwick, L.

Longford, E.

Attlee, E.

Macaulay of Bragar, L.

Birk, B.

McGregor of Durris, L.

Blease, L.

McIntosh of Haringey, L.

Bottomley, L.

Mackie of Benshie, L.

Broadbridge, L.

Molloy, L.

Campbell of Eskan, L.

Nicol, B.

Carmichael of Kelvingrove, L.

Northfield, L.

O'Neill of the Maine, L.

Cocks of Hartcliffe, L.

Oram, L.

David, B.

Parry, L.

Donoughue, L.

Prys-Davies, L.

Dormand of Easington, L.

Robson of Kiddington, B.

Ennals, L.

Rochester, L.

Ewart-Biggs, B.

Ross of Newport, L. [Teller.]

Falkland, V.

Seear, B.

Fisher of Rednal, B.

Sefton of Garston, L.

Foot, L.

Serota, B.

Gallacher, L.

Shepherd, L.

Galpern, L.

Simon, V.

Glenamara, L.

Stallard, L.

Graham of Edmonton, L. [Teller.]

Stedman, B.

Stoddart of Swindon, L.

Grey, E.

Taylor of Blackburn, L.

Grimond, L.

Taylor of Gryfe, L.

Hampton, L.

Taylor of Mansfield, L.

Hatch of Lusby, L.

Thomson of Monifieth, L.

Houghton of Sowerby, L.

Tordoff, L.

Irving of Dartford, L.

Turner of Camden, B.

Jacques, L.

Underhill, L.

Jay, L.

Walston, L.

Jeger, B.

Whaddon, L.

Jenkins of Hillhead, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Kennet, L.

Winstanley, L.

Listowel, E.

Winterbottom, L.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Ailesbury, M.

Cork and Orrery, E.

Alexander of Tunis, E.

Cornwallis, L.

Allenby of Megiddo, V.

Cottesloe, L.

Alport, L.

Craigavon, V.

Arran, E.

Craigton, L.

Ashbourne, L.

Cranbrook, E.

Belstead, L.

Davidson, V. [Teller.]

Blyth, L.

De La Warr, E.

Boardman, L.

Denham, L.

Borthwick, L.

Dormer, L.

Boyd-Carpenter, L.

Eden of Winton, L

Caithness, E.

Elibank, L.

Campbell of Croy, L.

Elliot of Harwood, B.

Carnegy of Lour, B.

Erroll of Hale, L.

Carnock, L.

Faithfull, B.

Carr of Hadley, L.

Ferrers, E.

Chelmer, L.

Fortescue, E.

Clanwilliam, E.

Fraser of Kilmorack, L.

Clitheroe, L.

Gisborough, L.

Coleraine, L.

Gray of Contin, L.

Colnbrook, L.

Greenway, L.

Constantine of Stanmore, L.

Gridley, L.

1425

Hailsham of Saint Marylebone, L.

Onslow, E.

Orkney, E.

Hardinge of Penshurst, L.

Orr-Ewing, L.

Harvington, L.

Oxfuird, V.

Havers, L.

Pender, L.

Henley, L.

Platt of Writtle, B.

Hesketh, L.

Pym, L.

Hives, L.

Rankeillour, L.

Home of the Hirsel, L.

Reay, L.

Hood, V.

Renwick, L.

Hooper, B.

Rugby, L.

Hylton-Foster, B.

St. John of Bletso, L.

Killearn, L.

Salisbury, M.

Kimball, L.

Sanderson of Bowden, L.

Kinnoull, E.

Scebohm, L.

Knollys, V.

Skelrnersdale, L.

Long, V. [Teller.]

Somers, L.

Lucas of Chilworth, L.

Stanley of Alderley, L.

Lyell, L.

Stodart of Leaston, L.

McColl of Dulwich, L.

Strathclyde, L.

Malmesbury, E.

Strathcona and Mount Royal, L.

Margadale, L.

Marley, L.

Strathmore and Kinghorne, E.

Maude of Stratford-upon-Avon, L.

Sudeley, L.

Merrivale, L.

Swinfen, L.

Mersey, V.

Teviot, L.

Milverton, L.

Thomas of Gwydir, L.

Monk Bretton, L.

Thomas of Swynnerton, L.

Morris, L.

Thurlow, L.

Mottistone, L.

Tranmire, L.

Mowbray and Stourton, L.

Trefgarne, L.

Moyne, L.

Trumpington, B.

Munster, E.

Ullswater, V.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Nelson, E.

Vinson, L.

Norfolk, D.

Wise, L.

Norrie, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.2 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 148 and 149:
Page 201, line 32, after ("provision") insert ("is a provision").
Page 202, line 35, leave out ("in paragraph 2 (collection and recovery) the ") and insert ("paragraph 2 (collection and recovery) shall be amended as follows.
(2) The following paragraphs shall be substituted for subparagraph (2)(g)—
"(g) that a notice must be in a prescribed form,
(ga) that a notice must contain prescribed matters,
(gb) that a notice must not contain other prescribed matters,
(gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid,
(gd) that where a notice is invalid because it does not comply with regulations under paragraph (g) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to issue to the ratepayer a document in the form which the notice would have taken had it complied with regulations under paragraph (g) above,
(ge) that where a notice is invalid because it does not comply with regulations under paragraph (ga) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to inform the ratepayer of such of the matters prescribed under paragraph (ga) above as were not contained in the notice,".
1426
(3) In subparagraph (2)(h) the words from "and" to the end shall be omitted.
(4) The")
On Question, amendments agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 149A:
Page 203, line 18, leave out ("believes will assist him in") and insert ("requires for the purposes or).
The noble Lord said: My Lords, this concerns a problem faced by the Brewers' Society. The Minister may recall that I raised this matter when the Local Government Finance Act 1988 was passing through this House. Brewers were particularly concerned about what is now paragraph 5 of Schedule 9, which in substance reproduces Section 82 of the General Rate Act but gives the valuation officer power to serve a notice asking for such particulars as may be required. The word "required" is no longer modified by the word "reasonably".
I raised that matter previously and received an assurance from the Government that there was no intention on their part to slip through unnoticed an extension to the power of valuation officers in cases in which they are assessing public houses. That assurance was given in June last year.
However, in paragraph 39 of Schedule 5 to this present Bill there is an amendment to paragraph 5(1) of Schedule 9 which empowers a valuation officer to serve a notice on an owner or occupier of a hereditament,
"requesting him to supply to the officer information … which is specified in the notice, and … which the officer reasonably believes will assist him in carrying out functions conferred or imposed on him"
in connection with the making of valuation lists. Clearly the amendment provides valuation officers with very wide-ranging powers to request information backed by penal sanctions.
I shall not delay the House any longer than need be. However the fact is, as the Minister well knows, that quite a deal of correspondence on this issue has taken place between the brewers and the Department of the Environment. I should like to quote from a letter of 25th May addressed to a Mr. Town at the Department of the Environment in which a suggestion was put forward by the brewers that,
"If the Secretary of State exercised his regulation-making powers in such a way as to ensure that returns relating to public houses were not admissible in evidence [to valuation courts] the problems of confidentiality in connectin with disclosure before the tribunals would no longer arise".
In response to that letter a reply was sent by Miss Lorraine A. Reid on 3rd August 1989, in which she said:
"We appreciate that the circumstances under which returns should be admissible in Valuation and Community Charge Tribunal (VCCT) proceedings is a sensitive issue and have therefore decided that this matter should be specifically addressed in the forthcoming consultation paper covering the procedure once an appeal is referred to a VCCT. In reaching a conclusion on this matter we will of course be taking account of the points which you [the brewers] raise and any made in response to the consultation paper".
I move this amendment in the hope that the Minister will be able to bring us up to date on this issue and elucidate the matter further, or, if he

1427
cannot do so, at least accept the amendment. I beg to move.
The Earl of Caithness: My Lords, I am sure that noble Lords will recall as well as I do the discussions that the noble Lord, Lord Ross of Newport, and I had on 13th June 1988. I refreshed my memory by reading Hansard this morning.
In proposing these amendments the noble Lord, Lord Ross, in effect seeks to negate the intention behind paragraph 39 of Schedule 5. While I can understand the concerns raised by the noble Lord I do not feel that they need give rise to such an amendment. In our view, paragraph 39 represents no real departure from the intention behind existing provisions. It allows the valuation officer to seek information that he believes will assist him in his assessment rather than merely the information which he requires. It has been argued that the information actually required for a valuation is very limited and in any case no more than has been used in past assessments. We feel that it would be reasonable to allow the valuation to be based on the best information available.
Concern has been expressed at the possibility that the valuation officer would take this power as an invitation to go on a fishing expedition; that is to say, seeking information on topics which go much beyond his statutory responsibilities. Of course I understand the concerns of those who have raise this matter with the noble Lord, in particular the Brewers' Society.
I can assure your Lordships that not only is this not what we have in mind but also that we believe it would be impossible to use the power in that way. Like any public servant, the valuation officer is under a duty to act reasonably and in a way that supports his public role. Were he to stray outside his remit and seek non-relevant information, he would, I believe, find it difficult to use his statutory powers to obtain that.
Concern has also been expressed over the confidentiality of the information that the valuation officer may obtain through the proposed power as set out in paragraph 39 of the schedule. It is to safeguard the confidentiality of such information that the valuation officer is currently drawing up—and agreeing with the industries concerned—a code of practice that will safeguard the proper interests of the ratepayer, while at the same time allowing proper use of the evidence to be made. That will give guidance on when information is or is not to be made available to third parties, or produced at a tribunal.
Amendments Nos. 149A and 149B are negative in intent. I can assure your Lordships that the powers contained in paragraph 39 will not be used improperly to expose commercially sensitive information and ratepayers who are properly assessed have nothing to fear from it.
Lord Ross of Newport: My Lords, I am grateful to the Minister for his reply. No doubt those who are interested in the subject will study with interest what he said. It is a pity that we removed the word "reasonably" from the Bill last year. It is too late
1428
to restore that now. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 149B not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 150:
Page 206, line 21, at end insert —
("1A) In subsection (2) after "require" there shall be inserted "the Secretary of State or".").
The noble Earl said: My Lords, with the leave of the House I speak also to Amendments Nos. 151, 152 and 153. These are broadly technical amendments and enable the 1988 Act to work better by enabling charging authorities to comply with their duties to issue community charge and rate notices in prescribed form. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 151 to 153:
Page 206, line 22, leave out ("subsection") and insert ("subsections").
Page 206, line 25, after ("require") insert ("the Secretary of State or").
Page 206, line 28, at end insert —
("(2B) Where any person other than the Secretary of State fails to supply information to a charging authority in accordance with regulations by virtue of subsection (2) or (2A) above he shall be liable to indemnify the authority against any loss or damage which the authority sustains in consequence of the failure." ").
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved as a manuscript amendment, Amendment No. 153A:
Page 207, line 30, at end insert —
("51A. —(1) Section 84 (special provision for transitional years) shall be amended as follows.
(2) In subsection (3) the following paragraphs shall be substituted for paragraphs (b) and (c) —
"(b) may contain provision for one transitional year, or for more than one, as the Secretary of State thinks fit;
(c) may make different provision for different authorities;
(d) if it contains provision for more than one transitional year, may make different provision for the different years."
(3) In subsection (5) after "transitional year" there shall be inserted "for which the report contains provision".").
The noble Lord said: My Lords, the amendment relates to the transitional arrangements for the introduction of the community charge. It deletes the requirement in Section 84 of the Local Government Finance Act 1988 for the transitional report to make adjustments to the grant settlement for the next four years. This is a consequence of my announcement on 11th October, and after the first year the transitional safety net will be abolished. Subsection (3)(b) of Section 84 of the 1988 Act requires that a transitional period report should set out the adjustments to be made for the settlement for the next four years. The result of my announcement is that we shall not need to make any adjustment after the first year.
There is an element of doubt as to whether this will be possible under the provision as it presently stands. The amendment avoids the small element of doubt and makes it clear that there is no need for safety net adjustments after the first year.
I apologise that your Lordships did not have notice of the amendment. The need for it emerged as we began to prepare the statutory document necessary to put our proposals into effect. It contains no element of new policy and is merely intended to ensure beyond doubt that the proposals announced on 11th October can be implemented. That does not prevent me from apologising to the House for its late arrival. I beg to move.
Lord McIntosh of Haringey: My Lords, we accept the assurances of the Minister that the amendment does not contain new policies. It is not easy to verify it ourselves in the time available. On behalf of these Benches, we accept the apologies that he has offered to the House for the submission of a manuscript amendment. He is aware that it causes difficulties for us. On the other hand, since the Government have spent the whole afternoon—indeed, much of the last four days of business—introducing amendments which at the very last minute correct their earlier mistakes, I do not suppose it is all that surprising. It is the general procedure and the way in which this Bill is being put forward and amended at a late stage that is unacceptable to us, not the transgression for which the apology has been offered.
On Question, amendment agreed to.
6.15 p.m.
Lord Hesketh Lord Hesketh moved Amendment No. 154:
Page 207, line 34, at end insert —
("52A. The following shall be inserted after section 88 — "Community charge grants
Community charge grants.
88A. —(1) If regulations under section 13A above have effect as regards a chargeable financial year the Secretary of State may, with the consent of the Treasury, pay a grant to a charging authority as regards that financial year.
(2) The amount of the grant shall be such as the Secretary of State may with the consent of the Treasury determine.
(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may with the consent of the Treasury determine.
(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may with the consent of the Treasury determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of—

(a) any amount which, in consequence of the regulations, the authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges as they have effect for the financial year concerned, and

(b) any administrative expenses the authority might reasonably be expected to incur, or to have incurred, in giving effect to the regulations in their application to the financial year concerned." ").

[Amendments Nos. 154ZA and 154ZB as amendments to Amendment No. 154 not moved.]
On Question, Amendment No. 154 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 154A:
Page 209, line 9, at end insert —("57A.
("57A. The following section shall be inserted after section 117—
Termination of occupier's liability to rates
"117A —(1) After Section 3 of the Landlord and Tenant Act 1985 there shall be inserted the following section—
Liability with respect to rates
(1) This Section applies to any landlord who is under express or implied obligation to pay rates on behalf of an occupier of any premises let by him as a dwelling and where the rent lawfully recoverable from the occupier includes an amount attributable to rates.
(2) Not later than 31st March 1990, a landlord to whom this section applies shall serve on the occupier a written notice in a form prescribed by the Secretary of State which shall contain the following details —

(a) the amount of the rent payable in respect of rates;

(b) the termination of the occupier's liability to make payments under subparagraph (a) above to the landlord as from 1st April 1990, it shall be an offence for any landlord to whom this Section applies to collect from any occupier any amount previously attributable to rates as identified in subparagraph 2(a) above.

(4) If any landlord to whom subsection (3) applies fails to comply with the provisions of subsections (2) and (3) he shall commit a summary offence and be liable on conviction to a fine not exceeding level 4 on the standard scale.
(5) The Secretary of State may by order make regulations modifying or extending the provisions of subsections (1) to (4) above and such an order shall not be made unless a draft of it has been laid before, and approved, by a resolution of, each House of Parliament".").
The noble Lord said: My Lords, the House will be aware that on an earlier occasion we discussed this vexed question of tenants who by intent or design may find that they are paying not only their current rent and rates but also their community charge. The Minister was sympathetic to the point. We wish to avoid this unfairness. We know it has been estimated that in Scotland £40 million is being filched from the pockets of tenants and landing substantially in the pockets of landlords. Much of that money is not tenants' money but government money by way of grants.
The matter of the unfairness and the need to make the provision clear on the face of the Bill was raised at an earlier stage. We wish to avoid a landlord receiving more than he is entitled to, and the tenant having to pay more than he is obliged to do.
In the Official Report on 11th October, at col. 308, the noble Lord, Lord Campbell of Croy said:
"I agree, in principle, with what the noble Lord said".
The noble Lord, Lord Coleraine, said that he shared the concern of the noble Lord, Lord McIntosh, at the situation. Quite decisively the noble and learned Lord, Lord Brightman, put the matter to the noble Earl, Lord Caithness, at col. 316:
"I cannot believe that a provision to achieve this justice would be beyond the skill of the parliamentary draftsman".
The noble Lord, Lord Harmar-Nicholls, contributed to the debate by saying that it would be grossly unfair for the legislation to relieve the landlord of the rates and not pass this benefit along.
I know that there has been correspondence between the noble and learned Lord, Lord Brightman, and the Minister about the way in which

1431
it can be achieved. The amendment seeks to give effect to that. It may not be the best drafting, but that can be improved. Perhaps I may remind the Minister that when my noble friend Lord McIntosh raised this issue the Minister said at col. 318:
"I am taking the matter away with the best will so that it may be looked at again. If Members of the Committee are disappointed it will not be because of my lack of trying".
I know that at times the Opposition are very trying to the Minister. We wish yet again to give him an opportunity to put right what we believe is an injustice and an unfairness. I very much hope that the Minister will accept the amendment. I beg to move.
Lord Campbell of Croy: My Lords, I took part in the debate at Committee stage on a similar amendment. I should like to ask noble Lords on the Opposition Bench this question. Am I not right in thinking that there is a misprint in line 2 of subsection (2) as it appears on the Marshalled List? Should not the word "be" be omitted? I shall proceed on that basis.
Lord McIntosh of Haringey: My Lords, yes, that is so.
Lord Campbell of Croy: My Lords, I must thank the noble Lord, Lord McIntosh, for the kind words that he said about me at the end of our last debate. At Committee stage I offered some information from experience in Scotland, where the community charge has been in effect for just over six months.
I informed your Lordships that on my small estate in Scotland I had done what the noble Lord had advocated. Some weeks before 1st April I informed my tenants that on 1st April their rents would be reduced by the exact amount of the domestic rates in the previous year. The noble Lord, Lord Graham, overlooked the fact that my purpose in intervening on the last occasion was to say that during the past six months I have realised that I may have made a mistake for the reason which I shall explain again. It is because unexpected extra expenditure is arising for landlords of private tenancies in Scotland as a result of the interpretation of the Scottish Act. They arise from the imposition of the standard community charge on the property at times in addition to the personal community charge which the tenants are paying.
I gave a personal example of a strange interpretation by the Highland regional authorities. Although a cottage was let under a lease during the period in question and the lease required at least two months' notice, a standard community charge was suddenly imposed for two months. I am glad to tell your Lordships that the matter was resolved last week. If the authorities' original interpretation had been maintained I should have been tabling amendments to the Bill at this late stage or seeking to promote a private Peer's Bill in order to clarify the situation. That interpretation was certainly not what we intended when we in this House considered the Scottish Bill.
While I acted in the way advocated by noble Lords opposite and reduced the rents, I believe that it
1432
would be a mistake to impose a duty on landlords as proposed in the amendment. I believe that for reasons which I gave and for others which I shall now give. First the words:
"the amount of rent payable in respect of rates",
appear in the amendment and the amount must be notified. It is impossible to know the amount for the year in question and I challenge anyone to do so. The best that one can do, as I did, is to take the amount for domestic rate bills in the previous year—
Lord McIntosh of Haringey: Will the noble Lord give way?
Lord Campbell of Croy: My Lords, I shall continue for a while and then give way because I shall refer to the noble Lord's earlier comments.
The domestic rate bills for 1990–91, were they to be prepared, are unlikely to be exactly the same as those for the previous year—they could be more or less. For one or two properties on my small estate there were smaller rate demands for the year immediately following the Scottish revaluation five years ago although their valuations had been doubled. That is an interesting reflection on the confusion that existed among those unfamiliar with the rating system between valuation notices and annual rates bills. It caused most of the trouble which existed in Scotland at that time.
The amount mentioned in subsection (2)(a) of the amendment is impossible to calculate. Only the previous year can be inserted, and that is not a precise exercise.
When speaking to Amendment No. 126A the noble Lord, Lord McIntosh, pointed out the difficulty in relating the equivalent of the local councils' expenditure and total rate demands for 1989–90 with those to come in 1990–91. Were the system to continue the bills for domestic rates in 1990–91 could be estimated only roughly. I give way to the noble Lord.
Lord McIntosh of Haringey: My Lords, with all due respect, the noble Lord is under a misapprehension. The amendment refers to Schedule 5, which is concerned with the English and Welsh but not the Scottish legislation. Subsection (2) provides that a notice shall be served not later than 31st March 1990. In England and Wales that is the year in which rates are payable and refers to the current year. Therefore it refers to a year in which rates are payable so the difficulty to which he refers in Scotland does not arise. If the amendment is agreed similar amendments must be moved for Scotland.
Lord Campbell of Croy: My Lords, I still believe that it is difficult to know what the domestic rates would have been during the year in which they would have been paid were it not for the fact that the system had changed.
Lord McIntosh of Haringey: With respect, we know the domestic rates for 1989–90 because we are paying them.
Lord Campbell of Croy: My Lords, then it is the following year in which there would be a change. The point must arise when one changes from one system to another.
I shall move on to another objection to the amendment. It is that landlords may meet the extra expenditure arising from the standard community charge. I recognise that the situation is different in England and Wales because the new legislation is now going through, whereas we are living with legislation which came into effect on 1st April. However, in matters of taxation I believe that the basic principles should be the same over the whole of the United Kingdom. Therefore, I suggest that landlords in England and Wales should watch the way in which the Scottish Act is being interpreted and be ready for similar interpretation. It will mean that suddenly they will be paying the standard charge during periods when the dwelling is not let.
For example, when a tenancy is changed after a letting of several years it is normal and correct practice for the landlord to carry out repairs and redecoration before reletting. With the best planning, availability of builders and painters and quick advertising there may be an interval of up to three months. In Scotland local authorities propose to impose the standard community charge for that period. That was not the intention when the Scottish Bill passed through Parliament. Our purpose was to levy a charge on second homes.
However, officials concerned with registration and collection appear to view any residential dwelling as being revenue-producing throughout the year, as was the case with domestic rates. When tenants have left, the personal community charge is no longer forthcoming. If the tenants leave a local authority's area their monthly payments are lost to it. The view appears to be that the dwelling should, when empty, contribute the standard charge during the interim period. That interim period between tenancies is a normal part of providing rented accommodation because during it there is a proper overhaul. If the standard charge is to be imposed during that required and normal break, landlords will have to make provision for the extra expenses. Unfortunately, if such an interpretation prevails rents must be higher than they need be. The proposal in the amendment does not take that point into account.
Again I have referred to the Scottish legislation because the present legislation is still under consideration. However, as regards short lets in Scotland the 1987 Act places a responsibility for the community charges on the landlords and not the tenants. Therefore, those holding a short tenancy could find themselves not responsible for the charges and could leave and the landlord could find himself responsible. However, short tenancies provide a useful service in Scotland as well as in England and Wales. In fact, the country benefits from the willingness of those who are prepared to live an unsettled existence as a result of employment. I believe that similar provisions should be made in England and Wales in order to ensure that those extra charges are considered and do not fall upon the landlord in an unexpected manner. I urge Ministers
1434
concerned with Scotland and England and Wales to examine those points in the best interests of orderly private letting and reasonable rents for tenants. Surely that should be separated from the designation of second homes.
I have great sympathy with all the officials in Scotland who are bringing in this new system of local government taxation, which is an immense task. My home is in what was my constituency and I have been helping former constituents to fill in the forms and commiserating with the officials whom I have known in the past who are coping with the introduction of this new system.
6.30 p.m.
Lord Monson: My Lords, as I was not here when we debated this matter in Committee, perhaps I may say that I strongly support the principle of this amendment, whatever technical defects there may or may not be in the drafting. I believe that it would be utterly immoral if landlords were allowed to pocket moneys paid to them by tenants in respect of rates which are no longer due.
Lord Coleraine: My Lords, I remain in support of the principle behind this amendment, but as in Committee, I feel disturbed by the actual terms of it. I believe I am right in saying that subsection (3) of the new clause which the noble Lord proposes has disappeared from the Marshalled List. However, if this follows the clause before us in Committee —that is, to provide that it would be an offence for the landlord to collect an amount previously attributable to the rates—I should be inclined to continue my reservations as to the actual terms of the amendment.
This afternoon I should like to remind my noble friend that my concern in Committee was on behalf of private tenants who had no right of recourse under either the Rent Act or the Housing Act as assured tenants because they may have been above the Rent Act limits or because they were living in flats made out of converted houses in which the landlord was living.
I assume from the fact that no amendment in my noble friend's name appears on the Marshalled List that he has found it difficult to produce an acceptable amendment. I hope that when he explains the position to us he will deal with the situation of private tenants to which I have just referred.
Lord McIntosh of Haringey: My Lords, although my noble friend Lord Graham moved the amendment, it is in my name and I owe an apology to the House. As the noble Lord, Lord Coleraine, rightly pointed out, subsection (3) of the amendment is missing from the Marshalled List. That makes the amendment hopelessly defective, and without waiting for the Minister's response it is better to withdraw the amendment as noble Lords have not had an opportunity to see the amendment as it was drafted. Therefore, it would be impossible for me to ask noble Lords to take a decision on this matter. I believe that the only right thing for me to do is to withdraw the amendment.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. I fully appreciate that that is a most honourable course to take.
I should like to say to the House that in Committee the noble Lord, Lord Northfield, raised the question of whether we could go further as regards putting a booklet into libraries, and so on. The noble Lord suggested that we should draw attention to tenants' possible rights to a rent reduction in the literature which accompanies the first community charge bills next April. I am pleased to be able to tell the House that, as so often, we have been persuaded by the elegant argument of noble Lords opposite and this time by the noble Lord, Lord Northfield. We have taken on board his suggestion. My right honourable friend the Secretary of State proposes to include reference to those rights and the availability of the explanatory booklet in the notes which charging authorities will be required to attach to community charge bills under regulations to be laid prescribing the form and content of those bills. I hope that that is helpful to the noble Lord, Lord McIntosh, when he considers this matter for another stage.
Lord McIntosh of Haringey: My Lords, I am grateful for that. I believe that we must be careful not to trespass on the time of the House since the amendment is defective through my fault.
Lord Northfield: My Lords, before my noble friend withdraws his amendment perhaps I may say that I am grateful to the noble Earl for taking on board my suggestion. He tries to be helpful to the House within the limits of government policy, and that is half a loaf. However, I am sure he will recognise that in Committee we said that we preferred an amendment to the statute rather than the suggestion he has now made. I thank him very sincerely, but perhaps he will take on board that we hope that on Third Reading he will still consider an amendment to the law. If the noble and learned Lord, Lord Brightman, can help us to produce a succinct amendment for Third Reading, that will be very good. However, that does not detract from my thanks to the noble Earl for trying to be helpful on this occasion.
Lord McIntosh of Haringey: My Lords, I believe that both interventions have been helpful in enabling us to decide what to do to correct our mistake on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 154B:
Page 209, line 34, leave out paragraph (b).
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 155:
Page 210, line 20, at end insert—
("England and Wales: separate administration
. — (1) Section 140 (separate administration in England and Wales) shall be amended as follows.
(2) In subsection (1) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".
(3) In subsection (2) the word "and" at the end of paragraph (e) shall be omitted, and after paragraph (f) there shall be inserted "and
(g) separate reports under Schedule 12A below shall be made."
(4) In subsection (3) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".").
The noble Earl said: My Lords, I shall speak also to Amendment No. 217. In Committee we introduced amendments to add a new Schedule 12A to the Local Government Finance Act 1988. These are minor amendments to Schedule 12A to allow the Secretary of State to make separate population reports for England and Wales. I commend them to your Lordships. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 156 and 157:
Page 212, line 28, leave out ("(9A)") and insert ("(9B)").
Page 212, line 28, at end insert —
("( ) In subsection (4) the words "57 or" shall be omitted.").
On Question, amendments agreed to.
[Amendment No. 157A not moved.]
Lord Hesketh Lord Hesketh moved Amendments Nos. 158 and 159:
Page 212, line 31, leave out first ("subsection") and insert ("subsections").
Page 212, line 32, leave out ("(9A)") and insert—
("(9A) The power to make an order under paragraph 5 of Schedule 7A below shall be exercisable by statutory instrument, and no such order shall be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.
(9B)")
On Question, amendments agreed to.
[Amendment No. 159A not moved.]
Lord Hesketh Lord Hesketh moved Amendment No. 160:
Page 214, line 47, after ("which") insert ("is a notifiable authority and which").
The noble Lord said: My Lords, I shall speak also to Amendment No. 161. These amendments delete the requirement for the Secretary of State for the Environment in England and charging authorities in Wales to notify parish councils in England and community councils in Wales of the relevant population of charging authorities on which they precept.
Under Schedule 12A to the Local Government Finance Act 1988, the Secretary of State for the Environment must notify relevant authorities in England of the figure which he has calculated for their relevant population. A similar duty is placed on charging authorities in Wales. This is necessary for the purposes of apportioning precepts and levies. However, where the relevant authority is a parish council in England or a community council in Wales, relevant population plays no part in the apportionment of their precept. Therefore they do not need to know this information and it serves no purpose for them to be notified of it. I commend these amendments to your Lordships, and I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 161:
Page 215, line 11, after ("which") insert ("is a notifiable authority and which").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 161A and 162:
Page 215, line 32, at end insert —
("Information
64A. In section 146 (interpretation) the following subsection shall be inserted after subsection (5)—
"(5A) Unless the context otherwise requires, "information" includes accounts, estimates and returns." ")
Page 215, line 34, leave out ("In Schedule 11, in") and insert ("Schedule 11 (tribunals) shall be amended as follows.
(2) In paragraph 2 (jurisdiction) the following paragraph shall be inserted at the end—
"(c) paragraph 5 of Schedule 4A above."
(3) In").
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 163A:
Page 216, line 30, leave out paragraph 68 and insert —
("68. —(1) Paragraphs 3, 8, 45, 47, 49 and 57 above shall come into force at the expiry of the period of 2 months beginning on the day this Act is passed.
(2) Paragraphs 42(3), 52 and 54 above shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and

(a) different days may be so appointed for different provisions or for different purposes;

(b) section 187(3) of this Act shall apply to an order under this subparagraph as it applies to an order under section 187(2)

(3) The 1988 Act shall be treated as having been enacted with the amendments made by this Schedule, except in so far as the amendments are made by paragraph 6, 50, or 59 above or any of the paragraph mentioned in subparagraph (1) or (2) above.").
The noble Lord said: My Lords, I beg to move Amendment No. 163A which has been substituted for Amendment No. 163. We now come to the final amendment on Schedule 5. This is purely a technical amendment which revises the provision for the commencement of Schedule 5. The effect is to bring into force those provisions mentioned in sub-paragraph 68(1) two months after Royal Assent. Those in sub-paragraph (2) will be brought into force by order when it is appropriate to do so. The remaining amendments will, from the date of Royal Assent, be treated as having always been part of the 1988 Act. However, for those provisions mentioned in sub-paragraph (3), the degree of retrospective effect will be circumscribed in the way those paragraphs provide. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 164:
After Clause 139, insert the following new clause —
("Reduced liability for personal community charges: Scotland.
. —The following section shall be inserted after section 9 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—
"Reduced liability for personal community charge.
9A. —(1) The Secretary of State may make regulations as regards any case where —

(a) a person is or was liable to pay, in respect of any time in such financial year as is prescribed, the personal
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community charge determined by a local authority in respect of that year; and

(b) prescribed conditions are fulfilled.

(2) Regulations under this section ma) provide that the amount of a person's liability in respect of personal community charge shall not be such amount as it would be apart from the regulations or, as the case may be, such amount as it was, but instead such smaller amount as is arrived at in accordance with prescribed rules.
(3) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors .as the Secretary of State sees fit; and in particular such factors may include all or any of the following—

(a) rates for a period before 1 April 1989;

(b) the circumstances of or other matters relating to the person concerned;

(c) an amount relating to the local authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;

(d) such other amounts as may be prescribed or arrived at in a prescribed manner;

(e) the making of an application by the person concerned.

(4) The rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (3)(a) to (d) above.
(5) Without prejudice to the generality of section 31(2) of this Act, regulations under this section may include —

(a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each local authority;

(b) provision requiring him to lay the report before the House of Commons;

(c) provision for the review of any prescribed decision of a local authority relating to the application or operation of the regulations.

(6) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may—

(a) include in regulations under this section such amendments of any social security instrument as he thinks expedient in consequence of the regulations under this section;

(b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section;

and any such amendments or provision may be deemed by the regulations or, as the case may be, instrument to have come into effect prior to the date of coming into force of the regulations or instrument.
(7) In subsection (6) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986." ").
The noble Lord said: My Lords, I beg to move Amendment No. 164. I shall speak also to Amendment No. 165. We have already had under a previous debate amendments enabling a scheme of transitional community charge relief to be introduced in England. I do not intend to go over much of the same ground again, because my right honourable friend the Secretary of State for Scotland has already made it clear that the Scottish scheme will encompass many of the same details as that which is proposed for England, both in relation to the people targeted for relief and the threshold at which relief will become payable.
Where the Scottish provision differs from the English is that it has been drafted to allow for the scheme to be made retrospective in Scotland and thus applied in respect of the financial year 1989–90. As my right honourable friend has made clear, we

1439
are undertaking detailed discussions with the Scottish local authorities before we decide finally on the details of the scheme that we will adopt. The new clause contained in Amendment No. 164 has been drafted so as not to inhibit the scope of these discussions.
My colleagues and officials have already met with CoSLA and further meetings have been arranged. Following these discussions we will be reaching decisions on a number of outstanding issues, including the financial years in respect of which the scheme will operate. These decisions will be made very shortly.
Amendment No. 165 makes similar provision to the English Amendment No. 154 and allows for the payment of grant to local authorities in respect of the relief scheme. The grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief, and administrative costs to the authorities of setting up and administering the scheme. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for his explanation, particularly for the fact that the payments will be retrospective. He gave a fairly reasonable explanation and has written to me. I am grateful to him for his help.
Baroness Carnegy of Lour: My Lords, I listened carefully to what the Minister said and, of course, these provisions are welcome in Scotland. Could he just tell me what is the effect of all this on the Scottish version of the safety net? He did not mention that. Could he enlighten the House?
Lord Sanderson of Bowden: My Lords, I am grateful to the noble Lord, Lord Carmichael of Kelvingrove, and also to my noble friend. If I may enlighten her as regards the safety net, in the light of the announcement made by my noble friend Lord Hesketh in your Lordships' House on 11th October, my right honourable friend the Secretary of State for Scotland has been considering the position north of the Border where a safety net has been operated on a self-financing basis during the current year. My right honourable friend will make a detailed announcement about this matter as soon as possible. But his broad intention is that there should be comparable arrangements north and south of the Border, taking account of the fact that the community charge was introduced 12 months earlier in Scotland. I hope that with that explanation my noble friend will understand the situation.
On Question, amendment agreed to.
6.45 p.m.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 165:
After Clause 139, insert the following new clause—
Community charge grants: Scotland.
(" . The following section shall be inserted after section 23 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—
PART IIIA
COMMUNITY CHARGE GRANTS
Community charge grants.
. 23A —(1) If regulations under section 9A have effect in respect of a financial year, the Secretary of State may, with
1440
the consent of the Treasury, pay a grant to a local authority in respect of that year.
(2) The amount of the grant shall be such as the Secretary of State may, with the consent of the Treasury, determine.
(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may, with the consent of the Treasury, determine.
(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may, with the consent of the Treasury, determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of —

(a) any amount which, in consequence of the regulations, the local authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges in respect of the financial year concerned; and

(b) any administrative expenses the local authority might reasonably be expected to incur, or to have incurred, in respect of the financial year in giving effect to the regulations." ").

On Question, amendment agreed to.
Schedule 6 [Amendment of Scottish Enactments]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 166:
Page 218, line 9, at end insert —
("Application of regulations about determination of net annual value
In section 6 of the Valuation and Rating (Scotland) Act 1956, after subsection (8B) further provision as to regulations relating to determination of net annual value) there shall be inserted the following subsection—
"(8C) For the purposes of subsection (8B) above, cases may be defined, described or classified by reference to such factors as the Secretary of State thinks fit.
(8D) Without prejudice to the generality of subsection (8C) above, a case may be defined, described or classified by reference to one or more of the following factors —

(a) the physical characteristics of lands and heritages;

(b) the fact that lands and heritages are unoccupied or are occupied for purposes prescribed by the regulation or by persons of descriptions so prescribed." ").

The noble Lord said: My Lords this amendment is necessary in order to make clear that, in prescribing the levels of decapitalisation rate to apply to the 1990 revaluation, classes of property can be defined in regulations in terms of the physical characteristics of the subjects and by the nature of the occupier. Your Lordships in Committee agreed a parallel provision for England and Wales. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for that explanation. All I should like to say is that we look forward to the revaluation of 1990.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 166A:
Page 219, line 41, at end insert—
(" . In paragraph 4 of Schedule 1A to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 (exemption of the

1441
severely mentally impaired) there shall be added at the end the following subparagraphs —
"(6) Regulations under subparagraphs (5) above may provide that, in the circumstances set out in the regulations, a certificate given for the purposes of subparagraph (1)(c) above shall continue to have effect for the purposes of this paragraph notwithstanding that the definition of severe mental impairment upon which the certificate proceeds has been substituted by the regulations.
(7) Regulations under subparagraph (5) above made in respect of the financial year 1989–90 may provide that a person—

(a) who was not within the old definition of severely mentally impaired but who, being within the new definition of that expression, is exempt; and

(b) in respect of whom such conditions as are prescribed are fulfilled

may be treated as having been exempt as from such date prior to the coming into force of the regulations as may be provided for in the regulations.
(8) In subparagraph (7) above, the "old" definition is the definition in force immediately before the coming into force of regulations under subparagraph (5) above and the "new" definition is the definition being substituted for the old definition by regulations under that subparagraph." ").
The noble Lord said: My Lords, your Lordships will recall that my noble friend Lord Hesketh announced to the House on 11 th October that we had decided to extend the exemption from the community charge for people who are severely mentally impaired so as to include people who are impaired as a result of a degenerative brain disorder or mental illness. The changes necessary to implement these proposals will be made by regulations made under existing legislation. The amendment we are now considering, is by way of a Scottish consequential and is necessary to take account of the fact that the community charge is already operating in Scotland. It makes provision to allow people who become exempt as a result of the new regulations to have their exemption backdated; and it ensures that those who are already exempt, who will have had to obtain a certificate from a doctor saying that they are severely mentally impaired, do not have to apply again for a new certificate when the new definition of severe mental impairment comes into force.
These may seem quite minor adjustments in comparison with much of what your Lordships have been discussing in the context of this Bill, but they have been sought by Scottish local authorities and will be welcomed by a wide range of people, particularly those who are themselves responsible for the care of a severely mentally impaired person in the community. I beg to move.
Lord Carmichael of Kelvingrove: My Lords, again I must thank the Minister for his statement and for putting down this amendment. One should not look a gift horse in the mouth, but we discussed this very thoroughly during the passage of the Scottish Bill and it is a pity that it was not included then. Perhaps we could have saved some time both then and in respect of this Bill. Late though it is, we are grateful for the amendment.
Lord Lloyd of Kilgerran: My Lords, I join the chorus of thanks to the Minister. In their absence, I
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am sure that I can say on behalf of my noble friends from Scotland that they join me in thanking him for his explanation.
Lord Sanderson of Bowden: My Lords, I thank noble Lords. The solution to the problem was difficult to find. Once we had hit on it so far as attendance orders were concerned, we were able to move quite quickly. I thank both noble Lords for the contribution.
On Question, amendment agreed to.
Clause 141 [Special grants]:
Lord Hesketh Lord Hesketh moved Amendment No. 167:
Page 132, line 8, leave out from ("grant") to end of line 22 and insert (" (in this section referred to as a "special grant") in accordance with this section to a charging authority.
(2) Before making any one or more special grants, the Secretary of State shall make a determination stating, with respect to the special grant or, as the case may be, each of the special grants—

(a) to which authority it is to be paid,

(b) the purpose for which it is to be paid, and

(c) the amount of the grant,

and that determination shall be made with the consent of the Treasury and shall be specified in a report (to be called a special grant report) which shall contain such explanation as the Secretary of State considers desirable of the main features of the determination.
(3) A special grant report shall be laid before the House of Commons and, as soon as is reasonably practicable after the report has been so laid, the Secretary of State shall send a copy of it to any charging authority to whom a special grant is proposed to be paid in accordance with the determination in the report.
(4) No special grant shall be paid unless the special grant report containing the determination relating to the grant has been approved by a resolution of the House of Commons.
(5) A special grant report may specify conditions which the Secretary of State, with the consent of the Treasury, intends to impose on the payment of (or of any instalment of) any special grant to which the report relates; and the conditions may require the provision of returns or other information before a payment is made to the local authority concerned or relate to the use of the amount paid, or to the repayment in specified circumstances of all or part of the amount paid, or otherwise.
(6) Without prejudice to compliance with any conditions imposed as mentioned in subsection (5) above, a special grant shall be paid at such time or in instalments of such amounts and at such times as the Secretary of State may, with the consent of the Treasury, determine.
(7) For the purposes of this section each of the following is a charging authority —
(a) a district council").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 223. It may help the House if I explain first the background and the reasons why these amendments have been brought forward. Clause 141 provides a power for the Secretary of State to pay grants to charging authorities. It was envisaged that the power would be used to pay grants to local authorities towards the cost of implementing the community charge. the Government have made available £55 million towards expenditure of this activity in 1989–90. Following recent developments, it is now proposed to use this power as the basis for paying some other grants also.
As the House will know, my right honourable friend the then Secretary of State for the

1443
Environment announced in July in another place that as part of the 1990–91 grant settlement for local authorities there would be two new, transitional specific grants. One is to be paid to local authorities in inner London which will be taking over from ILEA responsibility for education from next April. ILEA currently spends considerably more than the Government assess that it needs to.
In the longer term the successor authorities (that is the inner London boroughs) should be able to make substantial improvements in efficiency and should be able to secure economies in provision which will bring expenditure down to more reasonable levels. It will, however, take some time for those savings to come through. In order that charge payers will not face too high a burden in the meantime, the Government have announced a transitional grant over five years which will be worth £100 million in the first year.
The other transitional grant is for areas where domestic rateable values have been very low. People in these areas will face proportionately the largest changes as they adjust to the new local government finance system. We have therefore proposed an extra grant over and above the protection these areas will already receive from the area safety net to cushion the impact. This grant is again expected to be worth about £100 million in the first year.
The House will also be aware from my statement on 11th October that the area safety net introducing the community charge is to be abolished after the first year. We have, however, promised that the areas which would have received protection from the safety net in the three later years will have that protection provided by a specific grant.
It is proposed to use the power in Clause 141 as the statutory basis for making payments of all these grants. The bulk of government support for local authorities will continue to be provided through the revenue support grant system, set out in Part V of the Local Government Finance Act 1988 and distributed in accordance with reports made under these powers. The new grants which have been proposed are all supplementary to rate support grant and are intended to deal with particular problems during the transitional period.
From what I have said it will be clear to the House that the Government are proposing to make rather more extensive use of the power than had orginally been envisaged. We have therefore thought it right to bring forward this amendment. The main effect of the amendment is to require the approval of another place before grants can be paid under the power. It is right that Parliament should have the means to scrutinise and control expenditure on grants such as these. The amendment requires the Secretary of State to set out the purposes for which the grants are being paid and the amounts in a report which is to be laid before and approved by another place. In this way proper accountability will be maintained. I commend the amendment to the House. I beg to move.
Lord McIntosh of Haringey: My Lords, I do not wish to sound ungrateful but this is only a framework
1444
for grants and no indication of the level of grants. The Minister has mentioned figures in his speech but they do not appear anywhere in the legislation. We do not disapprove of the statutory provision or of the fact that another place should be consulted. But it must not be claimed that there is any substantial statutory increase proposed.
On Question, amendment agreed to.
Schedule 7 [Compensation provisions of Landlord and Tenant Act 1954, Part II]:
[Amendment No. 168 had been withdrawn from the Marshalled List.]
Lord Reay Lord Reay moved Amendment No. 168A:
Page 224, line 39, leave out ("subsection (5A)") and insert ("subsections (5A) to A5D)").
The noble Lord said: My Lords, Schedule 7 concerns the compensation provisions for business tenants of mixed hereditaments under the Landlord and Tenant Act 1954, Part II, in consequence of the abolition of domestic rates. The purpose of these amendments to the schedule is to include those business tenancies which will have no rateable value as from 1st April 1990 because they will be classed as domestic property. Only a small number of cases will be involved but they concern, for example, the tenant of a house in which he lets bedsits as a business. Another example is that of a block of free-standing garages which a tenant lets out. Such premises will be classed as domestic property in future and therefore not be rated.
We propose that compensation for loss of tenure should be based on a notional rateable value where a holding is of wholly domestic property. The notional rateable value will be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year. Any dispute is to be referred to the Commissioners of Inland Revenue for decision by a valuation officer with appeal to the Lands Tribunal, as is customary in such disputes under Part II of the 1954 Act. The proposal is to be subject to the same transitional arrangements detailed in Schedule 7. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 169:
Page 224, line 41, leave out ("any").
The noble Lord said: My Lords, in moving the last amendment I should have said that I was also speaking to Amendment No. 169. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 169A:
Page 225, line 7, at end insert—
("(5C) If the whole of the holding is domestic property, as defined in section 66 of the Local Government Finance Act 1988, for the purposes of subsection (2) of this section the rateable value of the holding shall be taken to be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the holding in a state to command that rent.

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(5D) The following provisions shall have effect as regards a determination of an amount mentioned in subsection (5C) of this section—

(a) the date by reference to which such a determination is to be made is the date on which the landlord's notice under section 25 or, as the case may be, subsection (6) of section 26 of this Act is given;

(b) any dispute arising, whether in proceedings before the court or otherwise, as to such a determination shall be referred to the Commissioners of Inland Revenue for decision by a valuation officer;

(c) an appeal shall lie to the Lands Tribunal from such a decision, but subject to that such a decision shall be final.").

The noble Lord said: My Lords, I spoke earlier to this amendment also. I beg to move.
On Question, amendment agreed to.
[Amendment No. 170 had been withdrawn from the Marshalled List.]
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 171:
After Clause 147, insert the following new clause:
("Charges: temporary traffic signs
Notwithstanding any enactment or rule of law to the contrary, or the provisions of sections 145 to 147 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: My Lords, I beg to move this amendment which stands in my name and that of my noble friend Lord Errol of Hale. We discussed the substance of this amendment during the Committee stage. During that discussion my noble friend the Minister said that he was quite willing to take the amendment back and discuss it. My noble friend Lord Errol then withdrew the amendment.
I am grateful to my noble friend the Minister because he has had further discussions both with my noble friend and others and within the department. I shall be looking forward to hearing from him the outcome of those discussions. It is perhaps only necessary to remind the House that this amendment, which introduces a new clause, seeks to clarify the law. It attempts 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.
The difficulty here is that, while one London borough has waived charges that it sought to impose on one of the motoring organisations in respect of the erection of temporary traffic direction signs, there is no certainty that other local authorities, highway and roads authorities may not seek to introduce charges. It is this uncertainty that gives rise to the thought that the motoring organisations such as the Automobile Association, the Royal Automobile Club and in certain circumstances the Cyclists' Touring Club may reduce their service in this direction. If such charges were introduced the whole scheme would become uneconomic.
Furthermore, these organisations erect traffic direction signs free of charge particularly for the
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Metropolitan Police on such occasions as the state opening of Parliament, the Trooping of the Colour and the Remembrance Day service, in fact on any occasion where there is likely to be a large concentration of people and where traffic needs to be diverted.
There is another problem. My noble friend the Minister gave an assurance that were these charges to become widespread or prevalent the Secretary of State would take powers to prevent the charges. All this would take possibly a year because the system would have to be monitored, proof would have to be raised, and then the necessary regulations made, all of which would take a long time. It seems to my noble friend and me, and indeed others in your Lordships' House, that it would be better if we were, so to speak, to lock this stable door before the horse actually bolts. That is what the amendment seeks to do. With that explanation, I hope that my noble friend the Minister will feel convinced of the rightness of the amendment and that your Lordships will see fit to accept it. I beg to move.
7 p.m.
Lord Underhill: My Lords, perhaps I may, as I did at the Committee stage, support the noble Lord in his amendment. I am not going to repeat all the arguments I put forward on that occasion. I think that the Committee generally recognised that there were important reasons why we should have an amendment of this kind. However, there are two questions I should like to put to the Minister.
The Minister said that the Road Traffic Regulation Act 1984 gave authority to highway authorities to give consent for the erection of these signs, but that it was silent as to whether a charge should be made. The amendment refers to Clauses 145 and 146 of this Bill. So far as I can see, Clause 145 empowers the Secretary of State to
"make regulations providing that a charge may be imposed in respect of anything".
Has such a regulation been made in respect of signs? If not, the local authority that made a charge did so illegally.
In addition the noble Lord, Lord Reay, said that if this became prevalent then action would be taken to stop it spreading. Can he say under what subsection—I presume of Clause 146, which gives power to the Secretary of State to amend provisions regarding charges—the Secretary of State would have power to prevent such a thing? I am anxious to see that no authority is permitted to make such charges for the erection of these signs. Therefore, would it not be more sensible to argee to what most noble Lords said, and put this in the Bill, and then there will be no need to worry about it at all? Further, the answers to my two questions need not be given.
Lord Errol of Hale: My Lords, I should like to add a few I hope somewhat different words from those I used when I proposed this amendment at the Committee stage of the Bill. There is absolutely no logic for a local authority to make such a charge for permitting temporary direction signs to be erected. The local authority does not plan where they shall be sited; it does not produce signs itself or paint on

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the directions; it does not erect them or take them down afterwards; it does not provide posts or fittings where the existing street furniture is inadequate. It does nothing except sign a routine authority for the work to be done by the RAC, the Automobile Association or the CTC.
Really this is simply an attempt to raise additional revenue by any means that the local authority can think of. If started by one local authority, as has been attempted, it could quickly spread to other local authorities as a useful source of supplementary revenue that the council can obtain without any effort on its part: for the charge is not in connection with the signs or their erection, it is just, if I may say so, a bogus charge. Once it had caught on, however hard the Secretary of State tried to prevent it in future—and the powers that we are going to learn about make it possible that he can stop it—the local authorities would argue that they were being deprived of a useful source of revenue, and a nasty row could develop over their being deprived of what had become an acceptable form of revenue.
This may seem a small matter in terms of a charge of £10 per sign, which was what was proposed by this local authority. But the Automobile Association, for example, put up 84,000 signs last year, charging about between £7 and £8 a sign. The true cost of them of course is subsidised by the AA as a service to the road-using public. To add £10 a sign as a form of local tax would increase the total charge to the Automobile Association by nearly £1 million a year. The AA itself could not afford to meet this, and it is likely that organisations would either reduce the number of signs well below the numbers required, or small organisations, especially rural charities, would probably drop out altogether.
The AA and the RAC might have to withdraw the service, which, incidentally, as my noble friend said, is provided free to the Metropolitan Police for a number of national events in the metropolis. It is highly unlikely that local authorities could provide a comparable service at such a low cost. I doubt if they would try. The road-using public would be the losers. Before sitting down, I should like to thank the Minister for his courteous reply in the earlier debate and for showing such considerable sympathy for these views in our subsequent talks with him. I hope that he will now be able to accept this amendment.
Lord Reay: My Lords, as my noble friend Lord Lucas of Chilworth pointed out we discussed these matters at some length in Committee on 11th October. Since then we have been able to reflect further on the matters raised on that occasion. I appreciate the strength of the arguments and also the strength of feeling of my noble friends on this matter. Before stating the Government's position I should like to make one point. We are concerned that the proliferation of signs by the motoring organisations should not depart from the general principle that they are for traffic-regulation purposes and not intended as a commercial venture.
I hope that the motoring organisations will be prepared to co-operate together with the local
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authority associations in the development of a code of practice governing these matters. On the basis of that expectation, and after careful consideration, I am happy to tell my noble friends and the House that the Government are willing to accept these amendments. In view of that, I think that, as he acknowledged, the second question of the noble Lord, Lord Underhill, does not need to be answered. With respect to the first question asked by the noble Lord, Lord Underhill, no regulation was made and I believe that in that case the AA received the legal opinion that the charges had not been made legally.
I should like to add one minor caveat. We are having a further look at the wording of Amendment No. 171. I am led to believe that there might be technical defects in the drafting. If there are, we shall bring forward a government amendment at a later stage. With those remarks, I am sure that the House will welcome these amendments without further ado.
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend—and I am sure that the House is grateful also—for this decision. I noted carefully—and I have little doubt that my noble friend Lord Errol also noted carefully—the Government's general view on signing and the expectation they have. I feel sure that the motoring organisations concerned will tomorrow read in Hansard what the Minister has said, and I would be confident that they would take heed of what he has said in this regard. I beg to move.
On Question, amendment agreed to.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that further consideration on Report be now adjourned until 8.10 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Merchant Shipping Act 1988 (Amendment) Order 1989
7.10 p.m.
Viscount Davidson Viscount Davidson rose to move, That the draft order laid before the House on 17th October be approved [28th Report from the Joint Committee].
The noble Viscount said: My Lords, this order gives effect to an interim order of the President of the European Court of Justice made on 10th October 1989. The interim order by the court requires the United Kingdom to suspend until judgment in the main proceedings the application of the British nationality requirements for registration of certain British fishing vessels set out in Section 14(1), (2) and (7) of the Merchant Shipping Act 1988. The affected fishing vessels are those which were fishing under the British flag up to 31st March 1989 with a licence granted under the Sea Fish (Conservation) Act 1967.
The court order is in restricted terms. It requires the United Kingdom to suspend the application of the British nationality requirement as a condition for the registration of fishing vessels as British fishing vessels to the extent that, at present, the owners,

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charterers, managers and operators of such vessels must be either: British nationals, or in the case of a company, have at least 75 per cent. of its shares legally and beneficially owned by British nationals and at least 75 per cent. of its directors as British nationals.
The benefit of the court's order is restricted to nationals of the European Community. It does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Moreover it does not affect the requirement that the vessels should be managed and their operations directed and controlled from within the United Kingdom. We do not know how many additional fishing vessels will now become eligible for registration on the United Kingdom fishing vessel register. That will depend on how many have been ineligible for registration by reason only of the nationality requirements that are changed by this order.
It may help if I fill in some of the background here. Part II of the Merchant Shipping Act 1988 introduced a new register of British fishing vessels. The main intention of this register was to restrict sea fishing rights so that the fishing quotas granted to the United Kingdom under the common fisheries policy benefited the genuine United Kingdom fishing fleet and the British communities dependent upon fishing. There were at the time a large number of fishing vessels which were fishing against the United Kingdom quotas, operating largely out of Spanish ports and which had only a nominal British connection.
The fishing vessel register came into full effect on 1st April 1989, but vessels could transfer to it from old registers on or after 1st December 1988. Since then the overwhelming proportion of the United Kingdom fishing fleet numbering more than 10,000 vessels has been registered in circumstances where my right honourable friend the Secretary of State has been satisfied that they comply with the requirements of the Act. One hundred and twenty-one have been refused registration primarily because they have not been able to demonstrate that beneficial ownership is British or that the vessels are managed, directed and controlled from the United Kingdom.
In the meantime the European Commission on 10th August 1989 instituted an action under Article 169 of the EC treaty alleging that the United Kingdom had, in its imposition of the nationality requirement in Sections 13 and 14 of the 1988 Act, failed to fulfil its obligations under the EC treaty. The United Kingdom is defending these infraction proceedings.
The Commission also brought an application for interim measures under Article 186 of the treaty asking the court,
"to order the United Kingdom to suspend, as regards nationals of the other Member States, the nationality requirements enshrined in sections 13 and 14 of the Merchant Shipping Act".
Judgment in respect of that application was delivered on 10th October and this order concerns that judgment alone. My honourable and learned friend the Solicitor General robustly argued the case for the United Kingdom on a number of grounds.
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Among other things, he submitted that interim relief ought not be ordered where a Commission's case on the incompatibility of the nationality conditions with Community law was weak. In particular, he argued that a state has the right and duty under international law to prevent the abuse of its flag and to lay down the conditions for registration of ships which will fly its flag.
He further submitted that the nationality requirements at issue were both consistent with international law and were necessary to uphold the system of national quotas under the common fisheries policy, which are based on nationality. The House will remember that the common fisheries policy was negotiated in minute detail by Ministers from each member state in a whole series of monthly meetings in Brussels when this system was set up in 1982–83. However, the court accepted the Commission's view that there was a prima facie case against the United Kingdom on the nationality issue and also that in the meantime certain "quota hoppers", particularly Spanish vessels which had hitherto fished against United Kingdom quotas, were suffering loss. The court, therefore, made its interim order to limit the loss of these fishermen pending the outcome of the main action—provided that they were able to satisfy the other conditions for registration to which I have already referred.
The United Kingdom is now obliged to give effect to the European Court order, which is why this order is before the House for approval. It is, as I said earlier, not certain what precise effect the relaxation of the nationality requirement will have. It may be very little since, as was recognised by the Commission itself, no more than a few fishing vessels are considered likely to be able to meet the other requirements which remain in force.
I refer to the requirements for residence and domicile in the United Kingdom and direction and control of operations from the United Kingdom, which will still need to be satisfied. It is of course possible that certain Community nationals might decide to take up residence in the United Kingdom, but this would require positive action, which would include setting up their permanent home here. In any event, it would continue to be necessary in all cases to establish that beneficial ownership, management and direction and control of vessels rests within the United Kingdom. It would not be enough merely to have token representation in this country.
The Government's objective remains to take all proper steps to ensure that the benefits of the United Kingdom quota under the common fisheries policy accrue to the genuine United Kingdom fishing fleet—but, of course, all such steps must be in accordance with EC law. The European Court of Justice has required, on an interim basis, that that portion of the 1988 Act concerning the nationality requirements for registration be suspended pending full argument and the final decision in this case.
Before I move the Motion, I feel that it would be helpful and would perhaps save some time if I answered more fully some of the points which were raised last week on the occasion of the Question of the noble Lord, Lord Stoddart of Swindon. He asked

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whether it was not intolerable that a court sitting in a foreign land could instruct the British Parliament to alter an Act of Parliament. I cannot accept this. The relationship between Community and national law was considered at the time of our accession. In joining the European Community we accepted an obligation to comply with Community law. This includes compliance with orders from the European Court of Justice. It is now a fact of life within the Community that Community law prevails over any conflicting provisions of national law. The European Communities Act 1972 provides machinery for giving effect to Community law. Hence the draft Order in Council that we are debating tonight.
I hope that I have already gone some way towards answering the points raised by the noble Lords, Lord Jay and Lord Underhill, about the effect of the order on the British fishing industry. I do not believe that the order would let in an armada of quota hoppers.
My noble friend Lord Campbell of Croy asked how the fishing quota system could continue to operate if the European Court's decision were to allow fishing boats to change their nationality at will and with ease. The interim order by the European Court is a very limited change. It does not change the existing requirements on residence and domicile, and it should have no effect on the common fisheries policy quota system.
The noble Lord, Lord Tordoff, asked me to consider the implications of the order for shipping safety and the dangers of over-fishing, particularly in the seas around Cornwall. On safety there should be no implications since all vessels fishing against the United Kingdom's quota will continue to have to be registered in the United Kingdom and will therefore be subject to the United Kingdom's statutory safety requirements. There should also be no effect on fish stocks. The order will have no effect on the EC fishing quotas and, as I have indicated earlier, the order is unlikely to lead to any significant increase in the number of vessels eligible to fish against the United Kingdom's quota—whether around Cornwall or elsewhere.
I hope that I have now answered the questions which were put to me last Thursday. I ask the House to approve the order. I beg to move.
Moved, That the draft order laid before the House on 17th October be approved [28th Report from the Joint Committee].—(Viscount Davidson.)
Lord Underhill: My Lords, the House is grateful to the noble Viscount for explaining this order and for dealing with some of the points which were raised during Question Time last Thursday. Perhaps I may say at the outset that I am still unhappy with the order but that I appreciate the attitude taken by the Government in resisting the application made by the Commission to the European Court. I think that the Government took the right stance. The attitude I should like to take up in this matter is that of my party in relation to accepting the position of Britain within the EC.
The Minister has explained that it was the European Commission which sought the declaration from the Court of Justice. He dealt with some of the
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provisions of subsection (1) of Section 14 around which the whole case revolves. The court document sets out the history of fishing quotas and that of the Spanish fishing vessels which noble Lords will recall was the subject of very detailed consideration during deliberations on the Bill which is now the Merchant Shipping Act 1988.
Paragraph 15 of the court order sets out the agreed transitional system which limits the number of fishing vessels flying the Spanish flag which may fish in waters of member states to 300 vessels of which only 150 may pursue fishing activities at any one time. Paragraph 21 of the court document is most important. It points out that under the articles of the Rules of Procedure, an interim judgment may not be given,
"unless there are circumstances giving rise to urgency".
As I mentioned in one of my supplementary questions last Thursday, the issue of "urgency" must be examined. The legal arguments are set out in a document and, as the noble Viscount said, the court found that the requirement of a prima facie case is settled.
The following paragraphs in the document deal with the matter of urgency. They state that the Commission informed the court that the British conditions had had the effect of forcing the entire Anglo-Spanish fleet to remain idle which had led to serious financial damage.
In the circumstances I must repeat some of the questions which were put last Thursday. I must also comment upon some of the points made by the noble Viscount. The news release of MAFF of 11th October quoted a comment on the judgment by Mr. David Curry, the Government's fisheries Minister. It reads,
"The Court's Order only requires us to suspend temporarily the nationality restrictions of Section 14 … the requirement that owners of British fishing vessels shall be resident and domiciled in the UK remains, as does the need for the vessels to be controlled and managed from here".
In my view the Minister's comments which were quoted in the release do not bring out an important point: Articles 3 of the order now before the House makes clear that a vessel must be "Community-owned" and not "British-owned" as at present set out in Section 14(1)(a) of the Act. This emphasis on Community ownership is repeated in relation to Sections 2 and 7 of the Act. Moreover, the explanatory note to the order further emphasises that point. The explanatory note also explains that the court ruling relates to,
"vessels which were fishing under the British flag up to March 31st 1989 and were owned by nationals of member States of the European Communities".
These vessels will be allowed to fish under the British quota but the noble Viscount has said that only a few will be involved. However, he cannot give any actual figures or say how the situation could develop. Is this part of the explanatory note in accordance with the president's order which is set out at the end of the court document? For the benefit of noble Lord, and with the leave of the House, perhaps I may be permitted to read that order. It says:
"Pending delivery of the judgment in the main proceedings"—
which, incidentally, we are told may take two years—
"the United Kingdom shall suspend the application of the nationality requirements laid down in Section 14(1)(a) and (c)

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of the Merchant Shipping Act 1988, read in conjunction with paragraphs (2) and (7) of that section, as regards the nationals of other Member States" —
noble Lords will note that there is no comma or full stop here—
"and in respect of fishing vessels which, until 31st March 1989, were pursuing a fishing activity under the British flag and under British fishing Licence".
I have no knowledge of the law. But does that not mean that the position of the vessels which were fishing until 31st March are covered by this order and that their activities—which were denied by the Act—must be continued? Moreover, what about the reference to,
"as regards the nationals of other Member States".
Does this mean that provided they fulfil other requirements they can fish in British waters? In my view that point is rather important.
The European Court made its ruling as a matter of great urgency. If the Minister is correct in stating that the interim ruling will have little effect, and if the noble Viscount is correct in repeating that statement, where does the court's argument stand on the question or urgency? Surely the matter of urgency does not then arise.
If many vessels are involved this could lead to a situation as regards quotas whereby British fishermen could be out of work. Surely that is a matter of urgency for the United Kingdom. Therefore the question regarding the number of vessels involved, and the number that will be involved, is rather important. Moreover, even if only a few vessels are affected, as Section 14 (1)(b) of the Act still stands under the court order, could not these Community owners arrange for their vessels to be controlled and managed within the United Kingdom? Thus, despite the court ruling, more Spanish vessels and more vessels of other Community states could be allowed to fish to the detriment of British fishermen. In my view this point was not clarified in the statement made by the noble Viscount this evening.
I should like to follow briefly an issue raised by the noble Viscount as regards international law. From the legal advice given to the Government I should like to know, despite our acceptance of the Community treaty, whether that can obviate the right of any nation to decide under international law what should be the basis of registration of a ship and the entitlement to fly that flag. We are told that the conditions which the Government thought were the basis of international law are those imposed by other member states for flying their flag. Is that, or is that not, the position? If it is the position, then obviously it is one of great seriousness.
I noticed that an article which appeared in The Times on llth October stated that this case sets an important legal precedent in that it appears to be the first time that the Commission has suspended a new British law before taking a decision on its incompatibility with Community legislation. I should like to know whether that statement is correct? I think that that is one point which must be settled.
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If the Commission is so urgently concerned with discrimination and if only a few vessels are involved—although that point has still to be clarified—would it not be advisable for the Commission to spend its time dealing with the opening of cabotage to merchant shipping of all member states? Should it not also take action against the fiscal advantages and discrimination practised by many Community states in support of their merchant shipping and port industries?
It must be proved to us first that only a few vessels are involved; and secondly, that this is a matter of great urgency. If it is not a matter of great urgency, then I suggest that the points I raised at the end of my remarks are ones of greater urgency to member states and especially to the merchant shipping of this country.
7.30 p.m.
Lord Campbell of Croy: My Lords, I thank my noble friend for explaining the order. I also understand the unease about the suspension of part of a British statute which was expressed in Question Time last week and which will no doubt be expressed again this evening. I propose to draw attention to a general matter, which I find most disquieting, which looks to the future, far beyond the order. Of course, I shall not discuss the case which is now before the court, but the fact that the action has been brought at all by the Commission raises questions for the future.
The action relates to a dispute between the United Kingdom and owners of certain fishing boats about eligibility for the new United Kingdom register for fishing vessels. If the EC is to proceed towards interchangeability of nationality, that may be a desirable aim. I, for one, do not object to it in principle. It is, however, completely inconsistent with the regime devised as the cornerstone of the EC common fisheries policy—the system of national quotas agreed from time to time for individual member nations' nationally registered fishing boats.
Under the common fisheries policy, the fishermen's boats are treated in accordance with their nationality, and the quotas of scarce or conserved fish (those much in demand) are divided accordingly. That system, negotiated with great difficulty, could not be continued and would have to be changed to something different if the separate nationalities are to become merged or interchangeable through everyone eventually assuming similar rights in one another's countries within the EC. The two policies are contradictory. They are both being pursued at the moment, and the Commision is the agency.
The part of the Commission which is concerned with fisheries has the duty of supervising the operation of the quota system, relying entirely upon different nationalities. The part of the Commission concerned with establishment matters, and rights of participation in the capital of companies, is no doubt doing its duty as it sees it, to reduce restrictions arising from nationality within the EC.
It is probably not the Commission's fault that, unless the situation is taken in hand, the result of both those activities could be chaos. The situation

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may be worrying for other industries apart from the sea fish industry and in other areas of activity. It is developing into a minefield for the sea fishing industries. I put that in the plural because it is not just the British industry. There are others in the EC who will find the decision disrupting. They will be damaged if the quota system is made useless and inoperative.
The Spanish fishermen's organisations, based in Spain, have been in touch with me from time to time. They deplore the attempt at quota hopping, as it is called, of the boats which try to disguise themselves as British. The genuine Spanish fishermen do not sympathise with their renegade colleagues because they undermine agreements which have been reached and make for bad feeling between Spanish and British fishermen.
It might be argued that the quota system could still work, with allowance made for additional boats which have changed their flag; but it would be difficult to keep abreast of numbers. Four years ago there were about 50 Spanish boats which had established themselves and registered at British ports. From my latest count a few months ago, the figure is now 150; it may be more. If it becomes easy to adopt a new nationality within the EC, or nationalities are virtually pooled so that everyone can assume the rights of other nationals within other countries, changes of flag could be frequent and unpredictable; in other words, when skippers of fishing boats can change their flags as often as their shirts or socks, the whole basis of the common fisheries policy will collapse. Confidence within the various fishing industries will evaporate. Scarce fish will become scarcer.
Noble Lords will be aware that the species under threat around our shores and in EC fishing areas is haddock. They are disappearing and need special conservation measures which have been extremely hard on the fishermen involved. For a period in the recent past, the herring had to be protected from extinction. There was a total ban on fishing for herring in some areas.
The quota system has played, and continues to play, an essential part in all that as a fair and orderly control over the modern, effective catching power of the fishing fleets. It will not be easy to devise and reach agreement upon a new common fisheries policy. I am sure that the Government agree that if the quota system had to be scrapped it would be a formidable task to replace it.
I have seen the policy develop from close at hand. I was the Minister most concerned when the United Kingdom joined the EC in 1972–73. I was a close observer of the later negotiations, the enlargement of the Community with Spain and Portugal joining, and the problems of the fishing industries involved at that time.
I fully support the Government in the attitude that they have taken—I made that clear, as others of your Lordships did, when Part II of the Bill was going through your Lordships' House—and I must give a warning that the pursuit of EC objectives in one area may bring tumbling down EC achievements in other areas.
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I thank my noble friend Lord Davidson for his assurance tonight and his response to the supplementary question that I was able to put last week. This evening I have set out my concerns about the more distant future if apparently conflicting policies are pursued within the EC.
Lord Stoddart of Swindon: My Lords, like my noble friend Lord Underhill, I cannot see why there is such urgency about bringing forward the order. It appears that other people in another place are of the same opinion, because this afternoon the question of whether the order should be proceeded with was raised by Mr. Taylor, the honourable Member for Southend, East.
I had hoped, because I listened to that exchange, that the Government were listening. The Leader of the other place was present. I assumed that his silence implied consent; that is, consent to the arguments which were put by Mr. Teddy Taylor, but it seems that I was completely wrong and that the Government have decided to press on regardless, despite the serious constitutional issues which arise from the court's judgment and the implications for British fishermen and their livelihoods.
My views on the EC, I hope, are well known and, of course, correct. I cannot help but be contemptuous of the obsequious alacrity with which the Government appear to accede to every whim of the EC and its institutions. The order, for example, was prepared within seven days of the court's edict. No wonder the court and the Commission see this country as a soft touch. What other item, say of domestic legislation, would be dealt with within seven days? We should be shouting "hooray" of course if it were; but here we have an order from the EC which is processed and put into the system within seven days of the edict delivered by the court. As I say, no wonder they think in Europe that this country is a soft touch.
It is remarkable that we should be such an easy touch. Only in 1988 the Government were urging the Merchant Shipping Act on Parliament. I must quote from the speech of the then Minister, Mr. Channon, during the Second Reading of the Bill in the House of Commons on 28th January 1988. He said:
"Part II deals with the very serious problem of foreign-owned fishing vessels registered in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. We are introducing stringent new eligibility requirements for the registration of fishing vessels in the United Kingdom. A fishing vessel would need to be beneficially owned as to at least 75 per cent. by British citizens resident and domiciled in the United Kingdom or wholly owned by a qualified company. There will be powers to specify additional eligibility requirements.
"These are stringent requirements, but we believe they are essential—"
let me underline that—
"if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them".—[Official Report, Commons, 28/1/88; col. 5]
Bearing in mind that strong support of Part II of the Act, why do we give in so easily to an edict from the European Court which, perhaps even in just a small measure, will hurt our British fishing industry?

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As I said last Thursday, only months after that speech was made and the Act came into operation, we are told by this court sitting in a foreign land that from an Act of Parliament passed by both Houses of Parliament, with agreement largely on all sides, we must remove any reference to vessels having to be British-owned. We must write into the Act a provision which removes the rights and privileges and which affects the livelihoods of British fishermen so that they now have to be shared with the nationals of 11 other nations. There are no comparable rights for British nationals in other EC countries. There are no reciprocal arrangements. British fishermen cannot go to Spain and do the same as the Spanish can here.
Why then do the British Government give in so easily, if there are no reciprocal arrangements? The fact is that the British Government and, it seems, the British courts appear to be less ready than other EC countries to protect the fundamental rights of their nationals. Perhaps I may quote from an article which appeared in the Financial Times on 13th April 1989 and which supports that contention:
"In the face of the overconfident and extremely free interpretation of European Community law by the EC Commission and the European Court, the attitude adopted by the UK courts appears distinctly diffident and timid".
Those are not my words but the words of the Financial Times. The article continues:
"This contrasts with the attitude of German courts which provide Luxembourg judges with more references than courts of any other member state, but jealously guard the fundamental rights of German nationals and residents.
"The French courts have a different solution to the problem: they see no need of asking the European Court for interpretation of Community laws and regulations, the meaning of which seems clear to them".
So there is a contrast between the way in which we deal with and protect the interests of our nationals and that of other members of the EC.
It is quite ironic that the first Queen Elizabeth, 400 years ago, defeated and sent packing the Spanish Armada, but now, in the reign of the second Queen Elizabeth, a Spaniard in the form of Senor Marin—the fisheries commissioner—can come to the Queen's realm and tell British fishermen, as he did in Aberdeen on 6th April, that their fishing fleets will have to be cut by up to 22.5 per cent. in the coming years.
In my view the constitutional position is very serious indeed, as I made clear last Thursday. The matter was raised again in the House of Commons today and from that it would appear that the position is even worse than I had realised. It now seems that, in the light of other references which were made to the court in Strasbourg, we in this country may very well find that the traditional situation whereby Parliament legislates and the courts administer will change and the courts of this land will be allowed, under a Brussels edict, to set aside Acts of Parliament.
In conclusion, there is a convention that the House of Lords does not vote on orders. Generally speaking, I agree with that convention. However, I understood that the House of Lords was supposed to look after constitutional matters and had a role in protecting
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the constitution. In matters of this kind, I believe that the convention that the House of Lords ought not to vote on orders should be set aside. I do not know that we, or I, shall test the matter tonight. However, the noble Lord, Lord Tordoff, raised a very serious question regarding the lights of this House. The more we have orders of this kind the more we shall have to consider exactly what the role of this House is.
7.45 p.m.
Lord Jay: My Lords, the Minister said that it was necessary to look at the background of the order. However there are some facts in the background which he did not mention. One is that had this country never accepted the common fisheries policy, we should still have—as Norway does—a 200-mile fishing zone of our own. Norway has successfully preserved its zone. That was not done here. As a result of the common fisheries policy, this country contributed something like three-quarters of the total stock of fish to the pool. I understand that under the British quota the British fishing industry is only able to take out about 16 per cent. as opposed to the three-quarters put in. Those are the basic facts to the background.
In addition, it is apparently true—and the Minister will say if I am wrong—that of the fishing vessels entitled to draw on the British quota, about 10 per cent. are now Spanish owned. I believe it is also true that the present fisheries commissioner in Brussels is Spanish. If that is not correct, the Minister will tell me.
On top of all that, we now find that the interests of the British fishing industry are to be even further damaged by this provision forced on our legislation so that we cannot in effect mention the fact of British citizenship in a piece of legislation of this kind. The Minister, brushing this aside, said that all these matters were discussed when the EC legislation was passed, and that was the end of it. However, I cannot recall that the public were told at the time of the referendum, or indeed in debates in the House of Commons, that membership would make it impossible for the British Parliament to mention British citizenship in an Act of the British Parliament. If my memory is at fault there, the Minister can say so.
When one turns from those considerations to the practical effect of what is now proposed, and how many vessels will be affected and what the consequences will be for the British fishing industry, it seems to me that we are left wholly in the dark. We are told that there still has to be a residential qualification for the owners of the vessels in question. It seems curious that one cannot mention nationality and the matter of citizenship, but one is still allowed to mention nationality, apparently, when it is a question of ownership and residence. Surely what matters from the point of view of practising fishermen is how many vessels will be affected by the change. If it is now true that some 10 per cent. of the vessels which are entitled to draw on the British quota are Spanish owned, will this residential qualification reduce that 10 per cent. to 7 per cent., 5 per cent. or even less, or will it,

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numerically, have only a completely negligible effect? I should have thought we were at least entitled to know that. So far we have not been told.
I wish to put the assertion of my noble friend Lord Stoddart of Swindon in the form of a question. Is it the case that this measure is not reciprocal? Is it a fact that for some obscure reason it is not possible for British fishermen, presumably by acquiring a residence in Spain, then to draw on the Spanish quota in the same way as the latter will be allowed to do in regard to our quota? I must confess that, even after hearing the Minister who did his best with the brief he has, I find deplorable the situation into which step by step we have now been pushed. If no further information can be given, I should very much deplore it if this order had to be passed by both Houses of Parliament.
Lord Parry: My Lords, I am grateful to the noble Lord, Lord Tordoff, who has allowed me to speak before him. I wish to declare an interest as the chairman of the Milford Docks Company, from which role I draw a profit. The House will be aware that some time ago I warned that there was a danger that the Government would find themselves in a position of illegality in regard to the general law of the EC over this exclusivity issue. I do not rise tonight to say "I told you so", and nor do I dissent from some of the difficulties faced by my noble friends.
I was an opponent of our entry into the EC and I am sceptical about the EC at the present time to say the least. Yet ironically I find myself with a wholly different problem for the Minister. I must remind him that the port of Milford Haven was the base of the Welsh fishing fleet at a time when it put some 100 ships to sea. At present the indigenous fleet at Milford Haven is down to between seven and nine vessels, of which about half a dozen only are at sea at any given time. Over the course of our lifetimes we in Wales have seen the decline of a basic part of the economy of Wales, and particularly of West Wales. We regret that deeply.
I have always supported the indigenous fishermen. I wish to protect them and ensure that they get the opportunity to fish. Nevertheless, times change and we have entered the EC. We are almost on the eve of 1992 when some of the arguments that have been presented here this evening will have taken their place in the history of the evolution of Europe.
I have already put to the noble Viscount, Lord Davidson, the fact that a part of the fleet at Milford Haven is Spanish. However, I must repeat that for the record. The fleet is Spanish in the sense that some of its operators were originally Spaniards who came to settle in Milford Haven. The Couceiro family have worked for a long time to obtain a proper right to fish as British nationals within the British system. The father of that family has been a citizen since about 1955. His son has been a citizen for at least 15 years and the other son who is a participating partner is a British born citizen. That family can in no sense be called quota hoppers or renegades either to their nationality or to the work they are trying to do. Without picking up a specious
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issue, I simply wish to point out that we are talking here about people who have tried to make their way within the British system and to obtain British nationality.
If this decision were clear cut, I do not think many of us would have much trouble with it. However, unless the Minister can give me some satisfaction later this evening, I must contend that it is not. Twelve modern vessels, each worth anything from £300,000 to £500,000, owned by one Spanish-Welsh or Welsh-Spanish family, whichever way one cares to look at it—I am conscious that a lot of time has been taken over this issue but it is vital to put the Welsh issue on the record—have been tied up for seven to eight months at the wall at Milford Haven. During that time the company in which I have declared an interest built a new ice factory to service the fishing industry to try to keep it alive and sought and obtained support for funding it from the Welsh Office. We have spent nearly £½ million on the provision of new facilities to strengthen the whole fleet; that is the indigenous fleet and those who are able to fish within the limit.
The land based employees at this one company amount to 12 people. The indigenous fishing people ashore adds up to a similar number and the sea based members of the fleet would number 50 if they were all at sea. If a willing seller made these ships available to a willing buyer at this time, the seller would have a valuable asset which would command a global sum of about £2 million. However, the vessels are tied up at the wall at a cost of £400 a day. Although my noble friends are right, given their concerns, to argue that there is no great haste for the decision to be clarified, the sooner the matter is clarified and resolved the better it will be for fishing in West Wales.
The figures that I have quoted have been certified on affidavit before the courts. We now have a potential fleet of 12 boats of the Couceiro family and six to nine boats from the indigenous fleet. One could add to that the fisherman, Ramon Ileria, who sought British nationality because he wished to live and to trade within the regulations. If we added up all those boats, we would have the beginnings of a modern fleet and Milford Haven could offer a modern facility of value to Wales.
The noble Viscount, Lord Davidson, was not certain about the precise effect of the order. My noble friend Lord Underhill also raised that issue. Is the Minister able to confirm that his right honourable friend the Secretary of State for Transport has appointed an inspector who will investigate the issues affecting the registration of the Couceiro fleet and others at Milford Haven and has asked the inspector to report to him? I realise that the Minister may need to take advice on that, and I shall be only too happy to receive an answer either directly or indirectly. It does not matter to me how I receive it as long as I receive one. In the meanwhile I ask the Minister to impress upon his right honourable friend, if there is such an inspector and if the intervention of the inspector is likely to be a lengthy process, the need for haste to a good decision on the issue with regard to that fleet.

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I say again to the Minister and to the House that if British nationality and British control requirements are satisfied, since there are only two years to go to 1992 and an open seas policy, in this case I should welcome a decision.
Earl Attlee: My Lords, I shall be exceptionally brief in order to give time for the noble Lord, Lord Tordoff, to wind up and for the noble Viscount to reply.
I support what the noble Lord, Lord Underhill, said about cabotage. I also support the noble Lord, Lord Stoddart, who pointed out that the Spanish can fish in our waters but we cannot fish in theirs.
8 p.m.
Lord Tordoff: My Lords, I shall also be extremely brief. This has been a fascinating debate. We have heard the Teddy Taylor appreciation society and the anti-European monarchist party speak. We have heard challenges to the rights of the European Courts. The question of Community law versus domestic law has been raised. We have to take the rough with the smooth. Many of us, particularly on this side of the House, are grateful to the Courts in Europe for preserving human rights in this country when the present Government are trying to erode them, particularly in the area of individual freedom.
From these Benches, as committed Europeans, it is easier for us to be critical of the Community when it makes mistakes. We believe that the Community is making a mistake in this case. There is a widely held view that Spanish fishermen are cheating. It is very difficult to pin it down precisely, but the quota system is being nibbled away at the edges by some fishermen. However, I take the point of the noble Lord, Lord Parry, that those who have come to settle here and who have provided a certain amount of inward investment are greatly to be appreciated and should be supported.
If the Commission is acting unfairly, as many speakers tonight believe it is, it should be made clear to the Commission that it is in its interests to see that the quota system is applied properly. As the noble Lord, Lord Campbell of Croy, said, fishing quotas have been a very important means of dealing with extremely difficult problems relating to national demands on fish. They have also provided a basis for some conservation of fish stocks.
Reference was made to the years when herring disappeared from the North Sea. I well remember that. I remember being at a party conference many years ago at which a trawlerman who was speaking in a debate pulled a herring out of his pocket, flung it into the audience and said, "Pass that round. It might be the last one you see". For many of us it was the last one that we saw for several years. The herring stocks in the North Sea reached the point almost of no return. Fortunately the situation has recovered. However, there is no doubt that fishing quotas have been an important factor in preserving stock.
The Government ought to be saying to the Commission, "You have agreed national quotas.
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They have been agreed over a long period. It is up to you to defend those quotas when there are genuine problems". That there is a genuine problem in this case there can be no doubt. As the noble Viscount said, his right honourable and learned colleague in another place has been defending the position before the European Court and, from what he said, has been putting the case very well.
It is to the Commission that we should say that we are being treated unfairly. Not only are we being treated unfairly but there are also problems in other countries. One of our difficulties is that we normally address the Commission in such strident terms—like a collection of fishwives, if I may use the expression, although on the whole fishwives are rather more polite than our present Prime Minister. If we stopped shouting at the Commission, started to talk to it and explained our problems we might make more progress.
There is a genuine problem here. It is not restricted entirely to this country. Like the noble Lord, Lord Underhill, I have before me the MAFF news release which said that Mr. Curry had just returned from a fact-finding visit to the German fishing industry and that support for the UK's position had been expressed by his colleagues in Germany, Ireland and Denmark. It also said that other member states would be arguing for stronger rules to protect their fishing industries. I should be glad to know whether the noble Viscount can tell us whether there have been further discussions with other European Community countries because that seems to me to be the way forward.
I am most grateful to the noble Viscount for his answers to the supplementary question that I raised to a Question last week. I am perfectly satisfied with what he said. On the assurance that little change will take place as a result of the interim order we would certainly not push our objection further. However, the Minister and his colleagues in the Government must recognise that there is genuine concern in this House, as in another place, even among those Members who are fervent believers in the European Community. Genuine criticism from them might be listened to more sympathetically than from those who are diametrically opposed to the whole concept of Europe.
Viscount Davidson: My Lords, I am most grateful to noble Lords who have taken part in the debate on the order. We are a little pressed for time but I shall do my best to answer as many of the points raised as possible.
On a general point I must emphasise that it is a fact of life in the Community that Community law prevails over any conflicting provisions of national law. The European Court of Justice has now required the UK to suspend the nationality provisions of the Merchant Shipping Act pending final judgment on their compatibility with EC law. Of course we argued before the Court against suspension. But I must say to the noble Lord, Lord Stoddart, that we take our obligations seriously, including European Court of Justice judgments, because we believe that it is in the UK's interest for the Community to have strong institutions and a sound framework of law. So we intend to implement the Court's ruling. I do not

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wish to continue the debate as to whether or not we should have joined the Common Market.
I must emphasise that the European Court of Justice works within the confines of the treaties. It is an independent and impartial court and has by no means always decided in favour of the Commission.
The noble Lord, Lord Underhill, referred to a statement in The Times to the effect that the Court had made a ruling requiring a change in the law without there being any determination that UK law was in breach of Community law. Such a ruling is in the nature of an interim measures ruling. As the noble Lord has pointed out, the Court has to be satisfied only that there is a prima facie case before it will be entitled to grant interim measures. The purpose of such an order is not to determine the rights of the parties but to hold the position pending final determination.
Regarding urgency, the rule of Community law, a well established rule as the European Court of Justice has itself said on a number of occasions, is that,
"The implementation of a judgment has to be commenced immediately and must be completed as soon as possible".
In this case the urgency arose because the owners of the vessels which will benefit from the order could go bankrupt very swiftly. For them, therefore, the matter is urgent. It is in relation to them that the Court—and I repeat, the Court—considered the matter urgent. Of course I am not in a position to speak on behalf of the Court.
The noble Lord, Lord Underhill, said that the requirement that beneficial ownership be vested in persons domiciled and resident in the United Kingdom remains. Therefore present owners could not just arrange for their vessels to be controlled from the UK; they would themselves have to become resident and be domiciled here. I might write to the noble Lord to explain more fully what "resident" and "domiciled" mean. I would have said so now but I am trying to hurry.
Concerning cabotage, I can confirm that it is still the Government's intention to secure freedom of cabotage within the European Community. That is why we took the power to control cabotage in the 1988 Act. However, that issue is outside the scope of the order and would be better discussed on a more appropriate occasion.
My noble friend Lord Campbell of Croy spoke about the conflict of EC policies. We agree that there is a conflict between the EC policy on fishing quotas and the interim order of the court. However, that is a wider question than the one we are considering tonight. I can assure my noble friend that we shall continue fighting the issue in the context of the court action.
The noble Lord, Lord Jay, was correct on one point; namely, that the EC Fisheries Commissioner is Spanish. The UK contributes 75 per cent. of the fish but has only 37 per cent. of the quota. Only one per cent. of the UK fleet is Spanish-owned and the Fisheries Commissioner is Spanish.
The noble Lord, Lord Stoddart of Swindon, spoke about the UK being called—I believe that this is
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what he called it—a soft touch. The UK is indeed the first country against which infraction proceedings have been introduced by the Commission, although I understand that proceedings have been instituted against Ireland in a related matter. We understand that infraction proceedings will be opened in the very near future—within three months—against the fishing vessels legislation of six countries, namely, Belgium, Denmark, Germany, Spain, France and Ireland. The decision on proceedings against another four countries—Greece, Italy, the Netherlands and Portugal—is to be taken within one month.
The noble Lord, Lord Tordoff, asked about discussions with the other member states on quota hopping. The fisheries Minister will be holding such discussions over the next few months.
The noble Lord, Lord Parry, asked about an inspector being appointed by my right honourable friend. I can tell him that Clearmaine has now been informed that the Secretary of State has appointed an inspector to investigate the eligibility of the vessels for registration. That seems the best way of dealing with the case. The inspector will take account of the Order in Council once it is approved by both Houses of Parliament and made by the Privy Council.
Lord Jay: My Lords, before the Minister sits down, will he say whether British fishermen will have corresponding reciprocal rights in Spanish waters?
Viscount Davidson: Not at the moment, my Lords.
On Question, Motion agreed to.

Local Government and Housing Bill
8.12 p.m.
Consideration of amendments on Report resumed.
The Minister of State, Home Office (Earl Ferrers): moved Amendment No. 172:
After Clause 149, insert the following new Clause—
("Contingency planning and co-ordination in respect of emergencies or disasters.
—(1) In section 138 of the Local Government Act 1972 (powers of principal councils with respect to emergencies or disasters) after subsection (1) there shall be inserted the following subsection—
"(1A) if a principal council are of the opinion that it is appropriate to undertake contingency planning to deal with a possible emergency or disaster which, if it occurred,—

(a) would involve destruction of or danger to life or property, and

(b) would be likely to affect the whole or part of their area, they may incur such expenditure as they consider necessary on that planning (whether relating to a specific kind of such possible emergency or disaster or generally in relation to possible emergencies or disasters falling within paragraphs (a) and (b) above)."

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

(a) for the words from the beginning to "authorise" there shall be substituted "Nothing in this section authorises"; and

(b) for the words "the power conferred by that subsection is" there shall be substituted "the powers conferred by subsections (1) and (1A) above are".

(3) At the end of the section there shall be added the following subsections—
"(5) With the consent of the Secretary of State, a metropolitan county fire and civil defence authority and the London Fire and Civil Defence Authority may incur expenditure in co-ordinating planning by principal councils in connection with their functions under subsection (1) above.
(6) In this section "contingency planning" means the making, keeping under review and revising of plans and the carrying out of training associated with the plans."").
The noble Earl said: My Lords, in moving this amendment, it may be for the convenience of the House if I speak also to Amendments Nos. 172A to 172G, 221 and 224, all of which relate to the same subject.
At the Committee stage, I undertook to bring forward a government amendment following the discussion on amendments tabled by the noble Lord, Lord McIntosh, and by my noble friend Lord Renton and others. Further amendments have now been tabled by several noble Lords and, as I suggested, it would be helpful if we could take all those together.
The government amendments now before your Lordships' do two things: they extend the powers already available to local authorities under Section 138 of the Local Government Act 1972, and they give new powers to fire and civil defence authorities to co-ordinate borough or district emergency planning.
The first point is essentially a clarification of the existing powers. Under Section 138, a local authority may incur expenditure—these are the words of the Act—
"where an emergency or disaster involving destruction of or danger to life or property occurs or is imminent or there is reasonable ground for apprehending such an emergency or disaster".
That would allow an authority to plan, for example, to deal with a river that has a history of flooding, but it might not allow an authority to incur expenditure on making contingency plans against the possibility of a disaster which could not be foreseen such as that which occured in October 1987, which was a one-in-300-years storm. In many cases, of course, planning on that basis already takes place. The purpose of the amendment is to confirm that it is lawful, not to signal a government belief that the total expenditure level in that area should necessarily rise.
With regard to subsection (3) of the new clause, which covers the new powers for fire and civil defence authorities, I listened carefully to the arguments of the noble Lord, Lord McIntosh, and of my noble friend Lord Renton when they introduced their amendments in Committee and I have reflected on them since. There is, I think, broad agreement that fire and civil defence authorities should have a co-ordinating power in relation to emergency planning by the boroughs or districts. But the difference, between us, such as it is, lies in whether the fire and civil defence authorities on the one hand or the boroughs on the other should have the duty and therefore the last word. The amendments of the noble Lord, Lord Graham of Edmonton, and of my noble friend Lord Renton seek to give the fire and
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civil defence authorities, and indeed other local authorities, a duty to plan and to require the boroughs to comply.
Perhaps I may return to the duty point later, but, however we look at it, we come back at the end to the fact that action in a disaster—for instance, providing emergency accommodation—is the legal function of the boroughs and requires the use of their resources. It could not be right that fire and civil defence authorities, which have neither those functions nor those resources, should ultimately be able to determine how the boroughs conduct what is by law their business.
But the noble Lord, Lord McIntosh, included in his amendment at Committee stage a number of detailed proposals which largely reflect how we would like to see the new provisions being operated. Similar points are included in the amendment of the noble Lord, Lord Graham today. I have thought about those points carefully, but I do not believe that it is necessary to spell out in the statute arrangements which can be established administratively.
We would of course expect fire and civil defence authorities to consult the districts or boroughs in drawing up their co-ordinated plans. It would indeed be difficult to see how it could reasonably be done otherwise. Similarly, we would expect the boroughs to co-operate in the provision of the necessary information. This is clearly an area of common interest. Both sides of the equation will be concerned to make the planning for emergencies as effective as possible.
In turn, the Government will be concerned to see that that commonsense approach is taking place. The expenditure by fire and civil defence authorities requires the consent of the Secretary of State, and we shall be looking to ensure that their proposals recognise the legal responsibilities of the boroughs and districts and take into account the co-ordinating which may already exist, and to ensure that, as far as possible, they have the support of the boroughs or districts.
That is why it would be difficult to advise noble Lords to accept the suggestion of the noble Lord, Lord Graham, to delete the requirement for the Secretary of State's consent. If, on the other hand, a particular borough sees no apparent need for the co-ordination of its plans with those of others, I am sure that the new civil emergencies adviser would want to look carefully at what was going on, find out why a local authority takes such an apparently insular view and see whether or not that reflects the best practice that is carried out elsewhere.
We believe that in that way we can ensure that the new powers are used sensibly. The funding for that co-ordinating work is through the precept mechanism. Existing civil defence resources may already be used under the Civil Protection in Peacetime Act 1986, and the main expenditure will relate to staff time. The effect of the precept by the fire and civil defence authorities on any one borough or district will be minimal and it can, we believe, be met within the existing resources of the boroughs or districts. There may even be some offsetting savings for boroughs or districts in terms of work which is

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done by fire and civil defence authorities and which is ultimately to their benefit.
The new clause, which is in the name of my noble friend, widens the scope of sensible emergency planning. Given common sense, I think that it can make a significant difference to the quality of planning in our major cities. The amendment to Clause 187 allows the Secretary of State to appoint a day for the provisions to come into force, and Amendment No. 224 allows the Long Title to be altered in order to reflect the substance of the new clause.
I come now to the question of duty and whether it is desirable to have a statutory duty. I listened carefully at Committee stage to the arguments made by various noble Lords that we should go further and impose a general duty on all local authorities to plan for civil emergencies. I realise the attraction of that course and have considered the amendments that have been tabled by various noble Lords this evening.
In view of the concerns expressed by your Lordships, we have looked again at this matter with some care. I understand, and have a great deal of sympathy for, those concerns but I believe that we need a more detailed assessment of precisely what local authority needs are in this area. The area of local authorities' powers, their duties and responsibilities, is a complicated one. If there is a need for a duty to plan, should it be just that and no more? Or should it be, as the noble Lord, Lord McIntosh, suggested in his amendment, that the Secretary of State should have a power to prescribe what should be included in those plans and to assess the quality of those plans? These are important issues that must be determined if we want to take the right decision.
My right honourable friend the Home Secretary and I will therefore be asking the new adviser to tackle this issue as a matter of priority. We shall want him to look closely at what is happening in practice on the ground and talk to individual chief executives, county emergency planning officers, local government organisations and the emergency services. He will be asked to advise on what is necessary and what is desirable for local authorities to have or be told in order to achieve proper effective emergency planning. We shall want him to report on that aspect of his responsibilities as soon as practicable. I think it is important that we get this matter right.
I can well understand the view that has been expressed by my noble friend Lord Renton and other noble Lords—to put it simply, if the local authorities have a duty to prepare for war which is unlikely to happen, they ought to have a duty to prepare for peacetime emergencies which we know are happening with an all too hideous frequency. The whole question is posed not because there are no preparations being made; indeed there are. The question is whether a duty is the best or indeed the only way of ensuring that emergency planning by local authorities is as effective as it possibly can be. That is what I want to find out.
Even if I knew the answers to those questions—and with respect I do not think that your Lordships know them either—there would not have been time between Committee stage and now to clear all the hurdles and draft an amendment which would stand the test of time, or indeed the scrutiny of my noble friend Lord Renton, which might be an even more monstrous hurdle to overcome.
I hope that your Lordships will accept that I have taken on board the anxiety of my noble friend Lord Renton and other noble Lords and that we intend to take action on this issue. I hope that noble Lords will consider that the amendments in the name of my noble friend Lord Hesketh are a step in the direction in which we all wish to travel and will approve of them. I beg to move.
Lord Graham of Edmonton: moved, as an amendment to Amendment No. 172, Amendment No. 172A:
Line 5, leave out from beginning to ("which") in line 7 and insert ("Where an emergency or disaster is possible").
The noble Lord said: As well as to Amendment No. 172A I should like to speak to Amendments Nos. 172B, 172C, 172D and 172E. I am flabbergasted that the Government, when they want to, can draft a whole Bill and spatchcock it into the current Bill in respect of the poll tax, but when it comes to a matter of producing something positive in the field of emergency planning in peacetime the Minister can spend ten minutes to tell the House how difficult it is. So be it. I shall not waste the time of the House by either answering in detail the arguments of the Minister or even putting forward our arguments, because the attitude of the Minister and the Government says it all.
Of course the amendment tabled in the name of the noble Lord, Lord Hesketh, is a tiny step in the right direction, but the Minister knows—because the information that I have is the same information as he has—that there is a dreadful sloth around when it comes to finding the funding and making plans. Sadly, whenever an emergency arises people ask, "Why were we not better prepared for it?" The Minister knows, because he follows these matters very closely, that that is the moment when people realise that it is too late.
The Minister and the Government have on their shoulders an enormous responsibility and, as a consequence, after this Bill is enacted, a dreadful responsiblility for failing to take the opportunity presented by this Bill figuratively to kick the backsides of some local authorities and others to encourage them to do what we all know will need to be done at some time in some future emergency.
I do not intend to take more than two or three minutes on this point because it is an exercise in futility. We should literally be wasting the time of the House because the Minister has indicated that he will call for reports, ask for consultation and be satisfied that there is a need and a will and so on. In my view all that is simply procrastination. I am very disappointed with the scene that the Minister has set for what could have been a very enterprising and innovative section of the Bill. I beg to move.
Lord Renton: My Lords, I wish to refer to the first of the amendments set down in my name; namely, Amendment No. 172F. This amendment stands also in the name of my noble friends Lord Mersey and Lady Blatch. It is a simple amendment to the Government's amendment. It would have the effect of putting beyond doubt that the FCDAs would have the power which the Government say they ought to have, think they are giving to them and which we all want them to have.
I have listened carefully to the words of my noble friend Lord Ferrers this evening. He again repeated what he said at Committee stage—that the FCDAs should have co-ordinating power. I think there is still a doubt as to whether the government amendment gives them that co-ordinating power.
In the new subsection (5) which is to be added to Section 138 of the Local Government Act 1972—that new subsection (5) is on page 25 of the Marshalled List—we find that the FCDAs:
"may incur expenditure in co-ordinating planning by principal councils".
It may be that my noble friend is absolutely confident that that gives them the power but I say that by accepting my simple amendment he would achieve legal certainty and put the matter beyond doubt.
What I am saying at the moment is purely technical. But of course this evening we are discussing something more important than the mere technicality of achieving what we all want. As I explained at Committee stage, and as the noble Lord, Lord Graham of Edmonton, mentioned this evening—and indeed as I thought my noble friend mentioned when referring to the consent of the Secretary of State—it is not enough for the FCDAs to have power to co-ordinate unless they can be sure that the people whose plans they are supposed to be co-ordinating have an obligation to prepare such plans.
One of the worst things that Parliament can do is to enact a dead letter—a nullity. There is a risk that in relation to some of the councils concerned—not all, but some—that is just what we shall be doing. I do not want to take up time with this matter. Because I am a very keen supporter of this Government and a great admirer of the Home Secretary and of all that is being done by him and my noble friend Lord Ferrers, I simply say that I am surprised that the opportunity is being missed. We are dealing at length with a 300-page Bill but we are not prepared to add just one page to it. We are adding half a page: we might just as well have added a page and have done the thing properly.
It is obvious that we shall not achieve what we want tonight. I hope that the step-by-step approach on which the Home Secretary has embarked will produce something as soon as the people require. The people of this country know about the risk of peace time disasters. They are not content with clever improvisation when a disaster occurs. They feel that the plan should be fully prepared and should be good and that the local authorities should have a duty to be ready. I hope that we shall not have to wait many Sessions of Parliament before the full result is achieved.
8.30 p.m.
Earl Ferrers: My Lords, I am grateful for the views, which I always respect, of my noble friend Lord Renton. I was astonished by the outburst of the noble Lord, Lord Graham. He said that the Government can alter everything, with reference to the poll tax, so why on earth can we not alter this aspect? He castigated me for speaking for 10 minutes. I agree that it was a long time to speak. However, I thought that it is a serious subject about which the noble Lord, like my noble friend Lord Renton, was concerned. I tried to put the Government's view as carefully as possible. The noble Lord, Lord Graham, castigated me. He and his colleagues have spent their time castigating the Government over this Bill, describing it as ill thought up. The noble Lord, Lord McIntosh, said that it was legislation being done on the run. As soon as I say to the noble Lord that he has made a very serious point, as has my noble friend Lord Renton, and that we are considering it and trying to find the best way to put this into operation but that when it is in operation we wish to ensure that it is right, the noble Lord accuses me of procrastinating. I do not think that he can have it both ways.
Lord Graham of Edmonton: My Lords, I did not castigate the Minister for taking 10 minutes; I castigated him for telling us in some detail at the end of 10 minutes why one needed to exercise care, to consult, to examine, to revise and, ultimately, to be sure, before putting forward such a measure. I simply pointed out that five hours ago this House was faced with a new Bill in relation to the poll tax. The argument that one needs to be careful when drawing up legislation goes out of the window when it suits the Government's macro-economic policy on the poll tax.
If I gave the Minister the impression that I did not respect the fact that he had taken a long time to explain the Government's policy, I apologise. What I said was that the Minister had explained the Government's policy but it did not amount to a row of beans.
Earl Ferrers: My Lords, I cannot castigate the noble Lord again. I shall tell him as politely as possible that he is out of order because he is speaking twice on Report stage. However, we shall let that pass.
I accept my noble friend's reservations. I know that he is concerned. He believes that if his words were inserted it would make it clear that the FCDAs should have a power. My noble friend says that the words that we have in the amendment do not give that power—that power is merely implied. My noble friend Lord Renton is a distinguished lawyer and a very astute draftsman. He knows that if we put provisions into the Bill which are different from those already in the Act people will draw comparisons. If my noble friend looks at Section 138 he will see the wording:
"the council may incur such expenditure".
Those are almost exactly the same words as used here, namely:
"may incur ‖expenditure".

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If we were to insert the words which my noble friend proposes for clarification—which I quite understand—we would be drawing a distinction between the powers that the FCDAs would now have and the powers which the local authorities have. As he knows, lawyers ferret around in Acts of Parliament to note differences. I hope that my noble friend will accept that it would be better to follow the format used previously.
My noble friend said that people want to know that we are well organised for peace time disasters; he argued that there is a duty for us to be ready. I believe that the response to peace time disasters has been remarkable. A great deal of planning is going ahead. There is no clear view, for instance, among local authorities of the need for a power. Indeed, the Association of County Councils does not want one. It does not see that it is necessary.
I have given your Lordships an assurance that it is a matter on which we are greatly concerned. It is one that we intend to pursue. I hope that even the noble Lord, Lord Graham of Edmonton, will not consider that in that matter we are procrastinating.
Lord Graham of Edmonton: My Lords, in view of what the Minister has said, I shall withdraw my amendment in favour of that of the noble Lord, Lord Renton.
Amendment to the amendment, by leave, withdrawn.
[Amendments Nos. 172B to 172E not moved.]
Lord Renton Lord Renton moved, as an amendment to Amendment No. 172, Amendment No. 172F:
Line 26, after ("Authority") insert ("shall have power to coordinate and").
The noble Lord said: My Lords, having moved the amendment I shall immediately withdraw it. In doing so I have to say that I do not accept the technical explanation given by my noble friend. However, if he thinks that it is all right I suppose that we must agree that it stand. I beg leave to withdraw the amendment.
Amendment to the amendment, by leave, withdrawn.
On Question, Amendment No. 172 agreed to. [Amendment No. 172G not moved.]
[Amendment No. 173 had been withdrawn from the Marshalled List.]
Baroness Blatch Baroness Blatch moved Amendment No. 173ZA:
After Clause 150,
("Electronic transfer of Documents.
The Local Land Charges Act 1975)
.—(1) In subsection (2) of section 9 of the Local Land Charges Act 1975, the words "A requisition under this section must be in writing, and" shall be omitted.
(2) In subsection (2) of section 14 of that Act after the word "include" there shall be inserted "(a)", and at the end of that subsection there shall be inserted the following paragraphs—
(b) provision for the use of electronic means in the making of requisitions for, and in the issue of, official search certificates, notwithstanding subsection (3) of section 231 of the Local Government Act 1972 (service of docucments on local authorities):
Provided that—

(i) such rules shall not provide that a requisition is duly made by electronic means, except where the local authority to whom it is made consents to the use of those means, or that an official search certificate is duly issued by electronic means, except where the person requiring the search consents to the use of those means; and

(ii) such consent may be given either generally or in relation to a specified document or description of documents, and either before or after the making of the requisition or the issue of the certification; and

(c) provision to modify the application of sections 10 and 11 above in cases where—

(i) the rules provide for the making of a requisition for, or the issuing of, an official search certificate by electronic means, and

(ii) there has been any error or failure in those means.").

The noble Baroness said: My Lords, I offer the apologies of the noble Lord, Lord Lloyd of Kilgerran, who is not present. I hope that the House will understand that he cannot be present for this amendment. I should also like to record my thanks to him for his unstinting efforts and support in preparing the amendment which I believe will help local authorities to be more efficient and to improve their service to the consumer.
The need for the amendment arises from the increasing use of computers by local authorities. There is no doubt that the electronic transfer of documents and information has become more common place. The advantages of using technology are well established. It reduces costs and provides a better and more efficient service. More enlightened local authorities are constantly looking for new ways to apply technology. However, current legislation often provides obstacles. The purpose of this amendment is to remove some of them.
One area which lends itself to the use of technology is that of land charge services which are part of every conveyancing transaction. Delays when buying a house can be troublesome to the consumer but more importantly they can cause serious delays in the mobility of the housing market. A new company has been formed to enable local authorities to provide searches electronically so reducing delays and providing a better and more efficient service. I know that the work carried out by the Land Charges Company Limited has the support of Ministers.
There is a more general need to allow for the electronic transfer of information documents. I hope that it will not be long before the Government look at current legislation and find the areas which inhibit progress.
The amendment is deliberately limited in scope. Having discussed the matter with the departments it is not timely for a more general amendment to be tabled. It is known to be supported in principle. It is enabling only—an important point to make at this time. It allows for the making of rules to allow local authority searches to be sent and received electronically. It does not prevent any local authority from continuing to write documents by hand and to send them manually. I am convinced that it will improve the service. I know that the amendment has the support of the Law Society, the Society for Computers and Law and various local government organisations.
It is important to note that the amendment also allows for the rules to make provision for suitable means of verification of electronic messages. For a long time that has been a stumbling block in the minds of many people but verification is an important point. Finally, it will apply only where the parties have agreed to use electronic communications. I beg to move.
Lord McIntosh of Haringey: My Lords, if it is in order I should like to speak from the Dispatch Box, as chairman of the computer sub-committee of your Lordships' House. In doing so I support most strongly the amendment moved by the noble Baroness. It is minimal at the present time. However, weekly we are installing new fax machines in various offices in the Palace, and when even the Public Bill Office has a machine, surely the time has come for them to be recognised in local government. I hope that it will be a beginning in the breakthrough of recognising the possiblities of modern technology.
Lord Reay: My Lords, Amendment No. 173ZA would amend the Local Land Charges Act 1975 so that requisitions for searches and search certificates could be made and issued by computer. As my noble friend Lord Hesketh made clear in Committee, the Government welcome the thought behind the amendments. We accept that in a small way they will help to speed up conveyancing. We could not then offer drafting resources to produce an acceptable version but we offered discussions with officials to see how progress could be made. We are grateful to the noble Lord, Lord Lloyd of Kilgerran, and his advisers for their efforts to make progress.
The noble Lord, Lord Lloyd, and my noble friend Lady Blatch have offered the House the option of including the main amendment either as a new clause or in Schedule 11. The Government believe that it is more appropriately included as a new clause. We also believe that the drafting of the amendments needs some improvement and in consequence propose to bring forward drafting improvements at a later stage.
We are glad to accept Amendment No. 173ZA. When we reach the point we shall be happy also to accept consequential Amendment No. 212A. It will not then be necessary to move Amendment No. 200A.
Baroness Blatch: My Lords, I am enormously grateful to my noble friend for his reply. I am also grateful for the co-operation of the department.
On Question, amendment agreed to.
8.45 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 173A:
Before Clause 153, insert the following new clasue—
("Housing accommodation
.—(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:
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(i) the disposal of land, or

(ii) the use of funds, or

(iii) the payment of grant to a housing association

by a local 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 which is constructed in a rural parish with a population of 3000 people or less."
(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 or any specified share of the equity of any dwelling which is constructed in a rural parish with a population of 3000 people or less." ").
The noble Lord said: My Lords, in order to set the scene I must spell out again the main plank of the amendment. As I explained in Committee, its purpose is to help local, less well-paid persons to become part owners with a housing association of a house in their village or vicinity. The type of person we have in mind would be a district nurse, a farmworker, a postman or a retired tenant farmer. All such persons are vital to the community's well-being. Indeed, if we force those people out of our villages and replace them with rich commuters or second-homers the whole of our society will suffer.
I am happy to say that in their consultation paper issued last week the Government most certainly accepted that point. Their scheme and that outlined in our amendment involve the Secretary of State, aided by the local authority, giving to a local owner planning permission in respect of land which would not normally receive approval for the building of part-owned houses for local persons by a housing association. So far, so good; we are all in agreement.
It is on the question of how to get the houses funded and built that those supporting the amendment part company with the Government's scheme. The Government insist that every part-owner must be allowed to staircase up to 100 per cent. full ownership. Unless that is allowed no grant will be paid. The problem with that idea—noble Lords opposite might use the word "dogma"—is that there is a great danger that the house will be lost to any further local person.
I am pleased to say that in the Government's new proposal the housing association will have a right to repurchase its house so that it can be used for the next local postman or similar local person. However, the trouble is that the Government's scheme, good though it is on intention, just will not work. I am still supported in that statement by 19 organisations involved in the matter.
The Government's scheme will not work because, first, there will be a need for top-up funds when the occupier sells to the housing association. That top-up fund will come from the housing association's approved development programme, thus leaving fewer funds available for replacement role houses. Our scheme would require no such top-up fund.
Secondly, under the Government's scheme the occupier will have a right to sell in the open market,

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thus losing the house for a new local person, if the housing association does not repurchase within four weeks of being notified. With that condition I do not believe that any lawyer will advise a landlord, housing authority or local authority to sign a binding0020Section 52 agreement ensuring that the land will return to local use. Therefore, the land will not be forthcoming and I have received a number of letters from prominent landowners stating just that. I received letters yesterday, since the Government announced their new scheme.
Thirdly, the Government will not be able to guarantee funds in perpetuity to meet their obligation to repurchase the houses. Indeed, I must quote from the letter of my honourable friend Mr. Chope on the matter which was brought to your Lordships' attention by the noble Lord, Lord Carter, in Committee. My honourable friend said:
"I should sound a note of caution at this point".
He was talking about money.
"Housing association grant cannot, of course, be available in unlimited amounts for role-shared 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 responsibility for deciding which associations and schemes to invest in rests with the corporation, although the corporation's investment programme is heavily oversubscribed".
Do I need to say more to convince your Lordships that the Government's scheme will not work? But if some noble Lords are still not entirely persuaded they must accept that the categoric statement made by my honourable friend Mr. Chope will mean that housing associations will be very reluctant indeed to commence building the houses in case no funds are available for repurchase. When could anyone at any time rely on continual Treasury funding? Pigs really will fly when that day comes. In contrast to the Government's scheme our amendment would, first, require no further government funding after the similar initial grant given in the government scheme. Secondly, landowners would be confident that the houses would return to the local postman, for example, and so would offer more land. Thirdly, there would be a quicker turnover of houses. Fourthly, our scheme would prevent what I call windfall success or money allowing a local person to become a yuppie—I must use the word—or second home owner living in a low cost, fully owned house in a beautiful village.
I must conclude, but before doing so I should like to thank my noble friend Lord Hesketh and his advisers for seeing the noble Lord, Lord Carter, who sadly cannot be here today, and myself and our advisers, and for the courtesy that they have shown. As a result, we have narrowed our amendment and I still hope, against all the odds, that my noble friend on the Front Bench may see his way to accepting our new amendment. The government scheme accepts the problem and perhaps puts the key in the door. Our amendment would unlock it, and I commend it to your Lordships. I beg to move.
Lord Hylton: My Lords, I rise to support my noble friend Lord Stanley on this amendment, which he has so clearly moved. I should like to recount some
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personal experiences which I have recently had in connection with low cost housing.
I was invited to a meeting in the southern part of the county of Avon which adjoins the city of Bath and which has a number of thriving and prospering towns within it, as well as many villages. I thought it was to be a general, open meeting. To my surprise, I found myself closeted with the chief executive and his principal officers. They explained to me their difficulty, faced with a very small housing investment programme and with the sale of many council houses from their previous stock. They simply asked me whether I was in a position to provide, within their district, any site on which this sort of low cost housing could be built. I said that I would try.
Equally, in the next-door county of Somerset I am in the preliminary stages of negotiation with the English Villages Housing Association about providing a site adjoining an existing rural village. However, I assure the Government and the House that I should be extremely hesitant and doubtful about proceeding if the Government have their way and it is not clear that the houses to be built will remain in perpetuity available for the class of people for whom they are intended.
We all want to make sure that a social asset remains for the benefit of a particular place. The question is: how do we ensure that? We want that to happen, as my noble friend Lord Stanley pointed out, for the sons and daughters of local people, for incoming key workers and especially for the lower paid in whatever category who cannot buy houses on the open market.
Therefore, we are faced with a choice of two methods. The Government suggest repurchase, and in this amendment we suggest a ceiling to the amount of equity which the individual can buy. If we take the repurchase road, there are many variables. For example, there is the willingness or otherwise of purchasers to buy more than 50 per cent. There is the question of future inflation, future rises in house prices which may be more or less than inflation, and future interest rates. All those factors make forecasting extremely difficult.
In that context I must ask: have Her Majesty's Government sought the views on these matters of the Housing Corporation? I ask that because of the ways in which the Housing Corporation and the Treasury have always worked and still work. I very strongly suspect that the Housing Corporation will be in favour of a ceiling, which is the method advocated in this amendment.
I can see only one way in which the Government could in future satisfy the rather varying requirements of the providers of land, the housing associations who will build and manage the houses and the future purchasers. That would be to establish a separate pot of money—let us call it that—for low cost housing which would have to be replenished annually so that the production of houses could continue and which would also, in my view, need to benefit from any windfall receipts which might accrue. To the best of my knowledge, the Government have not offered such a solution and it

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would be completely unprecedented were they to do so. That is why I commend this amendment to your Lordships as a far more certain remedy.
Lord Dean of Beswick: My Lords, I rise very briefly to support this amendment so ably moved by the noble Lord, Lord Stanley of Alderley, supported by the noble Lord, Lord Hylton. I believe that they have covered all the arguments for this amendment in a very constructive and acceptable way. On that basis, I rise to support it on behalf of the Members on this side of the House.
Lord Milverton: My Lords, I hope that Her Majesty's Government will be able to accept this amendment. I rise to give my support to it. From material I have received dealing with the matter with which we are concerned, I believe that the amendment is right, good and proper, and I sincerely hope that the Government can accept it. As the noble Lord opposite said, the movers have covered all the points. I hope that this time Her Majesty's Government will be able to be flexible and not just say that it is a good idea but that they accept it.
The Lord Bishop of Salisbury: My Lords, this amendment is of particular interest to the Church of England because many of the 43 English dioceses have between them considerable and well-distributed parcels of land in small communities, many of which could be of great potential help to the rural housing shortage.
In my own diocese and others in the South-West region, there has already been a good deal of stocktaking to see which land could be released for this purpose. Next month in London there is to be a national conference for representatives from all the dioceses to encourage and advise us on how to do more for the specific need of low cost housing in rural areas.
However, the Church shares the view of landowners mentioned by the noble Lords, Lord Stanley of Alderley and Lord Hylton. Before releasing land which it may have held for centuries, even for a cause as good as this, it will want assurance that such action will not run to waste, as would be the case if houses built on such land were in the relatively short term to be sucked into the vortex of the free housing market. There is no doubt in my mind that valuable land resources can be, and will be, forthcoming from the Church if there are strong enough guarantees that the initial good intention will be carried through for a reasonably extended future. For this reason, I am sure I speak for many dioceses in the Church in supporting this amendment.
9 p.m.
Lord Northbourne: My Lords, the noble Lord, Lord Stanley, has put the case very well. I want to take up only a couple of minutes of your Lordships' time, because I am myself involved in a scheme of this nature with the Samuel Lewis Housing Trust and a group of landlords, including the Church Commissioners, in the eastern part of Kent. The problem with this scheme is that you cannot make the figures stack unless you have free, or virtually
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free, land and a grant from the Housing Corporation. If you have a grant from the Housing Corporation, you are then subject to the staircasing provision as it stands at the moment.
I very much welcome the Government's proposals, because obviously they show an intention to support the objective of providing cheap starter homes in the countryside. The trouble is that as the matter stands at present the proposals will not work. I say this with some authority, because I have talked to the Samuel Lewis Housing Trust, in the light of the new proposals which came out after the. Committee stage, and they have told me that they absolutely could not on the basis of those proposals give an assurance to the landowners that this land would in perpetuity, or even for a period of 21 years, be used exclusively for the purpose of cheap housing for starter homes for people living in the countryside. They could not do it, because they could not be sure that they would have the money available to operate the Government's buying-in proposals.
There is another problem, because in many cases these schemes are put together on the basis that the council will give permission under a Section 56 notice, planning by exception, on land which would not be available for normal housing needs. The Dover District Council have assured me that they could not give permission under the Government's proposals because again they could not be sure that the land would continue to be used for the purpose of inexpensive starter homes.
There are therefore two great difficulties. I should like to be able not to support the amendment. But the Government must give absolute assurances, and there has to be an assurance that the Housing Corporation would enter into a binding contract with housing associations to make the money available for the repurchase within the four weeks which are available, and outside their agreed development programme. If it was inside the ADP, the difficulty would be that a housing association would have to hold money back, because they could not be sure when one of these options would suddenly be offered to them. So the money available through the Housing Corporation must be outside the ADP.
In addition, one would want an assurance that under this arrangement the Housing Corporation would not severely restrict the number of schemes in order to avoid their liability. Unless the Minister can give these assurances, I think that the amendment is the best solution.
Lord Gisborough: My Lords, I do not want to take up the time of the House, but I should like to support my noble friend and I hope that the Government will accept this amendment.
Lord Dormer: My Lords, I also heartily support the amendment moved by the noble Lord, Lord Stanley of Alderley. From my own experience, I know what real anxiety there is in rural areas as the retiring age approaches. Many worthy people indeed from all walks of life who have spent their lives in the rural areas naturally wish to remain in those areas in the future and view with great distaste any removal elsewhere. I should like to support the amendment.
Lord Vinson: My Lords, I broadly support the purpose of this amendment. With other noble Lords, I remain deeply unhappy about the right to full staircasing. I personally should like to see it limited to a lower level. Without that, I fear that, despite the assurances of the CLA, many owners will be unwilling to release land for low cost housing and local authorities will be unwilling to grant exceptional planning consents.
The key point, the acid test, remains as to whether the Government's new proposals giving pre-emption rights to housing associations to buy back shared equity property are, in fact, sufficient comfort to encourage landowners to come forward. By and large, houses built under equity arrangements are not the cheapest housing in the accepted sense of the word, but middle priced housing, to enable people on lower incomes to take the first step on the house purchase ladder.
Of course, many of those earning low incomes in rural areas are simply not able to afford to enter the housing market via the shared equity route and depend on truly low cost housing to rent. This being so, in future owners of land for their own comfort will be inclined to put a restrictive covenant on land they make available for local needs, specifically tying that land to rented accommodation. Thus the very development we want to see—a mixture of rented and shared equity housing—simply will not happen. The opportunity will be denied to many rural people to take that first step on the housing ladder.
This is precisely the opposite of the Government's intentions. The Government have indeed gone some way to meet the general concerns with their proposals for buy-back, but they will not get the results they really want without some limit of full staircasing. I hope that the Government will give further thought to this matter when considering the debate.
Lord Ross of Newport: My Lords, very briefly may I support the right reverend Prelate, because I was a founder member of the Isle of Wight Housing Association in 1974. I attacked the Church at that time, because they wanted to build executive-type homes in the grounds of our rectory. As I was a sequestrator for 15 years, I fought that very hard and then the archdeacon at the time said "Form a housing association". We did so and he became our first chairman. The first four and a half acres was glebe land at a place called Chale Green in the Isle of Wight, where we built housing to rent for people in lower income groups. At that time, the option of buying was not available to them.
I know that the Church has glebe land in this country which could be made available. The noble Lord, Lord Vinson, spoke with conviction and he knows. He has chaired the development commission and looked after the rural areas. We have to do something about this. Where I live, in a very rural part of Shropshire, people of retirement age would like to play a part in setting up some sort of housing association that would provide homes for sons of the families in those areas. But they will not do it unless they have some guarantee that those properties will remain and be available to their successors. I beg the Government to accept this amendment or come up with something like it.
Lord Henniker: My Lords, I strongly support everything that has been said. I am chairman of a rural housing association. I do not have a direct interest in shared ownership, but it puts a much heavier weight on those of us who have to provide rented housing if all the schemes in my own county for shared ownership are held up by this uncertainty over staircasing. My own feeling is that it is quite impossible that a pre-emption clause will ever meet the case.
I am a landlord, and over the past years I have put a pre-emption clause on every house that I have sold. When it came time for me to redeem the pre-emption clause it was a farcical operation because the price had risen 10 or 12 times. The Government are being asked for an assurance that they will fill a bottomless pit. This is a most important amendment. My whole life is taken up with trying to provide rural housing for people with low incomes, of whom there are many in my county of Suffolk. Wages in the county have not gone up as fast as perhaps they should. What happens with this amendment will have a very great effect on the whole of the rural housing movement. I know that the Government are anxious that rural housing should be provided. I know that those who have been strenuously involved with the rural housing movement will be deeply disappointed if this amendment is not accepted by the House.
The Lord Bishop of Worcester: My Lords, I cannot go back to Worcester in the course of duty without saying that I greatly hope that the reassurance will be given. This amendment has been effectively supported by all sides of the House. One must remember that the matter concerns communities as well as individuals. I can take noble Lords to villages in Worcestershire where young people can live no longer. They are very close to retirement communities where it is not worth while having a shop, a school or a pub. There has been a flight from the countryside. People cannot find low cost housing and have to live in the town and commute to the country.
The Government have already seized this problem and have recognised it to some extent. I hope that they will give the required assurance because we are talking not only about people's homes and their work but also about communities of a balanced and cross-section nature. We want balanced communities. We do not want a flight from the countryside.
Baroness Blatch: My Lords, I believe this amendment started life as the Jopling amendment. It found considerable support in the other place and in this House. There is no doubt that there is widespread support from all parties to resolve the rural housing problem. I do not wish to sound a dissenting note, but I wish to pose some questions to my noble friend the Minister. I hope he will deal with them when he replies.
I have been trying to work out in my mind the difference between the government's scheme as it has been set out and what is proposed in this amendment. One of the arguments used concerns

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repurchasing costs and where the money will come from. Whether one repurchases a home under the government scheme or through some limited staircasing scheme, there will be repurchasing costs. These may vary from 60 per cent. to 100 per cent. The housing association will have to take back the house. I note that the noble Lord, Lord Stanley, is unhappy about what I am saying.
Lord Stanley of Alderley: My Lords, I shall deal with the point in summing up.
Baroness Blatch: My Lords, if a purchaser is staircasing a home, it will need to be repurchased for it to be sold to somebody else, who will then have the benefit. Therefore, there will be repurchasing costs. The costs will come from a housing association or a local authority. They will be competing for resources that could be spent for the development of other properties. I am trying to work out in my mind whether we are talking about the difference between the limit on staircasing and what would be the 100 per cent. figure.
There is a difference in the frequency of turnover. One of the arguments in favour of having some limit on staircasing is the fact that there will be a faster turnover and local authorities will have young or disadvantaged people coming into occupation of these houses more quickly. As I understand the government scheme, pre-emption rights remain. There are no windfall gains other than to the housing association or the local authority. Therefore, the benefits from any cheap land that is offered remain with the authority. That benefit can be retained and possession of the house can go to the kinds of people we have been talking about this evening.
I am in some difficulty in deciding what is the particular factor that is at stake. I am not sure whether we are talking about the degree to which one would have to repurchase the home or whether we want some firmer guarantees from my noble friend the Minister when he replies as regards the reoccupation of such homes being undertaken by the people we wish them to go to; namely, the disadvantaged, the needy and young people in rural areas. It is important that possession of these houses goes to the right people and that they do not find their way on to the open market.
There is a question-mark overhanging the matter of four weeks for someone to respond to the sale of a home. It seems to me to be a very short period in which to decide whether there are the funds to repurchase and the ability to do so. Therefore, I wonder whether any flexibility can be offered on the timing of that. The objective is universal across the House that there needs to be a resolution to the problem of providing low-cost homes in rural areas. I support the principle, but I should like to know the distinction now between what the Government have on offer and what is offered by the amendment moved by the noble Lord, Lord Stanley of Alderley.
9.15 p.m.
Lord Cornwallis: My Lords, I also should like to support the amendment. Recently in our local area we produced a questionnaire which was delivered to
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every house in the village. We received a 78 per cent. response to it. The biggest worry from everybody was the lack of rural housing. It is quite the most burning question in local politics—and there I mean politics with small "p" and not with a capital "p".
I welcome the fact that the Government have recognised the situation, but I wonder whether the present scheme that the Government are proposing was—as I believe the noble Lord, Lord Hylton, was also speaking—drawn up by the Housing Corporation. Can the Minister tell the House whether the Housing Corporation preferred the scheme as envisaged by this amendment rather than the one put forward by the Government?
This question was asked by the noble Lord, Lord Carter, who said at the Committee stage:
"It would help the Committee if Members knew that the Housing Corporation and its chairman fully support the proposals".—[Official Report, 11/10/89; col. 443.]
Sadly, the Minister did not reply to the noble Lord, Lord Carter. I think he owes it to the noble Lord to give us an answer tonight. If he does not, perhaps the noble Lord, Lord Stanley of Alderley, will press him to do so. I support the amendment.
Viscount Bledisloe: My Lords, at the Committee stage the noble Lord, Lord Carter, declared an interest on the grounds that he was, or was associated with, a landowner who wished to provide land for one of these low cost housing schemes. It seems to me a little curious to declare an interest in the sense that one wishes to give away something for less than its value, but, in so far as that is an interest to declare, I likewise declare it. I also have been actively seeking to pursue a low cost housing scheme in our village from land that I am very willing virtually to give away, provided that the situation and the conditions are such that it can remain within the community.
The law as it at present stands does not allow that. I have to say that the law as the Government intend it to be equally does not convince me to pursue that scheme. It is no good the noble Lord, Lord Hesketh, or the Government pursuing the logic of their scheme if that logic does not in fact convince the donor landlord that it will work, and "it don't convince me". If it "don't convince me" and landowners in my situation, it is no good that it is logically right, because the scheme will not happen.
Lots of reasons have been advanced to explain why it does not work logically, but I have to say that I also think that the government scheme is remarkably naive. Offers of first refusal mean that you have to match the offer that you are told has been made. It is not very difficult to conceive of somebody who is in one of these house's finding a yuppie friend and saying to the Housing Association, "I have been offered this fancy price. Are you going to match it?" The Housing Association either says, "That is all bluff, and we won't match it", or it says, "All right. That seems awfully large but I have to keep it in the community and I match it", and the pair of them are laughing all the way to the bank to split the spoils.
First refusal, as the noble Lord on my right said, does not work when you cannot say to the person

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who has proposed the offer, "If I don't match it, you are bound to buy", and there is no way the government scheme can say that. Quite apart from the logical differences, this is shot through with impracticalities. I have to say—and a large number of non-party and non-committed landowners are with me—that the government scheme just does not carry them with it. If it does not carry them, then it does not matter whether it is logically sound, because it will not work.
Lord Monk Bretton: My Lords, I suspect that my noble friend Lord Stanley may be right about this matter. Low cost housing in rural areas is certainly the most explosive rural issue. It closely concerns all those who live and work in the countryside and it closely concerns the maintenance of the social structure of our villages as we have known them. I am heartened indeed by the Government's interest in this issue but I am not absolutely sure that they are right in taking staircasing the whole way. I am very much influenced by the views of the National Agricultural Centre Housing Trust. I set great store by and pay credit to the work of Moira Constable of that organisation.
It appears to be the view of the NAC Housing Trust that the noble Lord, Lord Stanley, is right. In fact I think it is the view of just about everyone with experience in this area except the Government that my noble friend's amendment is right. That point weighs heavily with me. It is absolutely vital that the low cost housing scheme should make its mark and be a success in the countryside. I also remember what the noble Lord, Lord Carter, asked the Minister in Committee. It was not clearly answered as regards the views of the Housing Corporation. My noble friend the Minister owes the House an explanation about that.
Lord Hesketh: My Lords, I must congratulate my noble friend Lord Stanley and other noble Lords and right reverend Prelates on the persistence with which they have all returned to this important subject of low cost housing in rural areas. I welcome the opportunity to restate the Government's position because it is clear that there was a considerable misunderstanding of what was being proposed when we considered the issue in Committee.
There is no dispute between us on the central concern which underlies this amendment—the need to provide low cost housing to those who need it in rural areas. We agree completely that there needs to be a way to retain shared ownership housing for local needs in many rural areas. I set out to the Committee the steps that the Government have taken over the past year to meet the special housing needs of rural areas—the provision of additional resources to the Housing Corporation; our initiative on planning permission specifically for low cost housing developments; the changes that my right honourable friend the Chancellor of the Exchequer announced in the Budget in respect of gifts of land to housing associations; and our increased support to the National Agricultural Centre Rural Trust.
The proposal contained in the amendment, as my noble friend Lord Stanley made clear, is that shared
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owners in rural areas should not necessarily be able to staircase the full ownership of their properties. Instead local authorities or housing associations would be able to impose an arbitrary ceiling on the amount that they should own. I must say that this causes us difficulties. The right to home ownership is a fundamental plank of the Government's housing policies. The imposition of an artificial limit on staircasing cuts across it.
If it were a matter of choosing between the two policies—that is, the need for low cost accommodation in rural areas and the promotion of home ownership—we would be on the horns of a dilemma. However, that is not the position. It is possible to have both.
My noble friend Lord Caithness announced on 7th February that we had decided to allow housing associations to prevent shared ownership housing phasing passing on to the general market in those rural areas where it may be especially hard to replace. Let me reiterate the essence of what is proposed. This will be done by requiring the shared owner to offer the house back to the association when he wished to move on. The association would buy it back from him and reallocate it to another person on shared ownership terms. That is the way we can retain the house to meet local housing needs without having to deny individual occupiers the opportunity to progress if they so wish to full ownership of their homes.
Mention has been made this evening of the four-week period. I feel that I must reiterate to the House that this was included in the discussion document for no reason other than the possibility that at some future date, no matter how far away, the position may be reached where the housing association's job has been done and there is no requirement. That is all that it ever was or ever would be intended for.
Great play has been made of the fact that there is in some way a sinister plan whereby the four-week period actually imposes a restriction on the scheme we propose. Nothing could be further from the truth. The Housing Corporation is at present consulting widely on the details of the scheme. It would apply not just in areas where it may be especially hard to replace shared homes but where planning permission had been given on the basis that the site would be available solely for low cost housing or where a private landowner had made land available at below market cost for that purpose.
I was interested to hear the suggestion of the noble Lord, Lord Vinson, concerning restrictive convenants. That is what this proposal and the consultation period is for. Indeed, at this moment we are having consulations. It was clear during the course of the debate in Committee that many noble Lords had not had sufficient opportunity to study the proposals which the corporation had brought forward and that there was concern lest they fall short in some respect of the assurances which your Lordships were seeking.
I hope that I can remove that concern. The main worry was on the grounds of cost. Perhaps I may repeat now in terms that the Housing Corporation

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will provide any additional grant which is necessary. The noble Lord, Lord Stanley, referred to my honourable friend Mr. Chope. I should like to make it absolutely clear that what Mr. Chope was referring to was the entry into the scheme; he was not referring to the further funding which will be guaranteed once a scheme has been accepted. That is an important difference.
We shall be looking to enable associations to exercise their pre-emption rights in respect of properties falling within the scheme. They will do so by making housing association grant available to top up the funding which the association requires. There was concern about the unpredictability of the demands that the scheme would place upon them. However, repurchases will not happen overnight. As with any property transaction, there will be a period while lawyers carry out their work and so in practice there will be no difficulty about making funds available as part of the normal management of the approved development programme.
The amount of money required is small in the size of the whole programme, a programme which upon present plans is set to expand from £800 million this year to 1.3 billion in 1991–92. I must make it absolutely clear that once a property has been accepted within the scheme the funding will be available.
Concern has been expressed by some that that is not necessarily the best use of public moneys. They would prefer shared ownership to exist as a form of ownership in its own right, with grant available at a set percentage and the owner not able to purchase additional shares. It has been suggested that that would be a more cost effective use of public moneys. I have to say that the calculation is one that it is impossible to do with certainty. Under their proposals grant would be locked into the scheme. Under our proposals grant is repayable each time a shared owner buys an additional tranche of equity which can then be recycled to other projects, enabling others to buy.
It is arguable that the government scheme will provide more rather than less flexibility, as is being proposed in the amendment. Whatever the balance of advantage, the fact is that such schemes do not meet one of the Government's prime objectives, which is the right to own one's own home.
Now I do not wish to give the impression that the Housing Corporation scheme is set in aspic. That is why it is now the subject of consultation. Consultation is taking place. The noble Lords, Lord Hylton and Lord Bledisloe, asked what the Housing Corporation's view is. Discussions are taking place with Ministers. Those discussions are private. We expect the Housing Corporation to have a point of view. We expect many outside your Lordships' House to contribute to a document which will provide a satisfactory answer to the problem.
Lord Stanley of Alderley: My Lords, perhaps I may interrupt my noble friend on that important point. The noble Lord, Lord Carter, raised it in Committee, and so my noble friend has had plenty of time to
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think about it. The noble Lords, Lord Hylton, Lord Cornwallis and Lord Monk Bretton, raised it. Does the Housing Corporation like the government scheme as much as mine? Can my noble friend get on the Dispatch Box and say yes?
Lord Hesketh: My Lords, I do not want to upset the Box Protection Society and damage Her Majesty's property! I answered my noble friend's question by saying that we have a period of consultation which is being run by the Housing Corporation, which of course has a point of view.
A particular issue here will be the areas to which the scheme should apply. The proposals the Housing Corporation has put forward are in line with its proposals for the special rural programme. That is targeted primarily on settlements in rural areas with a population of less than 1,000, a lower figure than that proposed in the amendment. The other two categories—where planning permission is given specifically for low cost housing for local needs or landowners make land available at below market value—could of course be in any rural area, regardless of population or proximity to a larger settlement or town. The process of consultation may throw up anomalies or other areas that should be included. Indeed, that is one of the attractions of an administrative scheme; such changes can be made quickly and easily.
The important point is that whatever limits are set the areas concerned should be ones in which there are genuine difficulties in securing an adequate supply of low-cost housing for local needs. Where the turnover of housing is reasonable there will be a supply of other property that the association can buy to replace any that has been purchased outright by the shared owner. It is only where turnover is low and it would be difficult to get planning consent for new build that it is important to ensure that property can be bought back to maintain the local housing stock. We shall look carefully, with the corporation, at the points made in tonight's debate.
In the Government's view therefore the amendment is unnecessary. The scheme that my noble friend Lord Caithness announced in February provides the assurance to housing associations that funds are now available for pre-emption and the assurance local planning authorities and landowners need that they can go ahead without fear with schemes for low cost housing. Indeed I was most pleased to hear from the Country Landowners' Association that it has been reassured now that details of the repayment scheme are available. Their president informs me that, provided there is no impediment to a landowner when making a gift of land insisting that a housing association should exercise its right to repurchase—and that is a matter between the landowner and the housing association—the repurchase scheme appears to deal with the problem in a satisfactory manner. They tell me that they therefore no longer support an amendment on these lines. I very much welcome that statement of support from the Country Landowners' Association.
I am in any case also advised that the amendment put forward by my noble friend Lord Stanley is

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somewhat defective. It is unclear whether it is aimed at conditions formally attaching to a consent or to what is in the Secretary of State's mind when formulating his policy on whether or not to grant consent. That is not quite all. There is also no definition provided in the amendment of "rural parish" and there is no current definition of the expression. Existing rural parishes became simply parishes on local government reorganisation in 1974.
However, I repeat that we are not absolutely wedded to every detail of the scheme on which the Housing Corporation is consulting. We are willing to consider the changes in its operation which are suggested, as I pointed out earlier on the points which the noble Lord, Lord Vinson, made with regard to restrictive covenants.
I urge all who are concerned about this issue to look carefully at the paper and to let the corporation have their comments. I do not believe that the amendment before your Lordships tonight will in any way provide a satisfactory solution. I go further than that and say that no proposal that is before your Lordships—be it the Government's or the amendment tonight—will provide an immediate satisfactory solution to a problem which is very difficult to solve in rural areas.
Viscount Bledisloe: My Lords, before the noble Lord sits down perhaps I may ask this. He has referred to a decision of the Country Landowners' Association. If tomorrow at its council meeting the association reverses that decision, will the Minister undertake that on Third Reading the Government will support the amendment?
Lord Hesketh: My Lords, I thought that I referred to the president rather than to an officer. However, it is fair to say that the noble Viscount would not expect me to speculate until presented with hard and firm evidence.
Lord Stanley of Alderley: My Lords, I wish to thank all noble Lords for their contributions. With so much support throughout the House, it was an enormous privilege to move this amendment.
Perhaps I may deal with the slightly sensitive problem of the opinions of the officials of the Country Landowners' Association. They have every right to change their minds, but I suggest to my noble friend and to your Lordships that we should be well advised to treat the views of those officials with suspicion until the membership decides. I could read out to your Lordships a number of letters from prominent members of that association, but I shall not do so for two reasons. First, the Anglo-Saxon language might offend the delicate sensibilities of your Lordships. Secondly—a much more important and serious point—the vital matter to which we must address ourselves tonight is whether your Lordships agree with the amendment which I have had the privilege to move. I wonder whether noble Lords agree with the 19 organisations that still support it, or with the one black sheep which has jumped over the fence. Perhaps I should go to collect that black sheep back in order to keep the right reverend
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Prelates happy. I shall try to do so in the coming months.
We now come to the serious matters. The financial points were clearly stated by my noble friend Lord Hylton. I could go over them again for my noble friend Lady Blatch, but this is a complicated subject. Suffice it to say that perhaps I could add a little, although I do not know how I can do so after the very careful explanation of my noble friend Lord Hylton. At the end of the day, although we may have made savings by staircasing and we may have collected that money back, the way in which the Treasury and the Government work is that the money will go into a central pile.
At the end of the day when one comes to look for more money one has to indent—that is old Army language—each year for that sum. The Treasury will not take into account as regards the amount it gives up the fact that one has handed money back in previous years. The Treasury has other concerns, such as hospitals, on which to spend money. The Housing Corporation will not know what its liability is at the beginning of the year. That brings me to my next point. I fully accept what my noble friend on the Front Bench says as regards the Government guaranteeing to repurchase property involved in any scheme brought into being. However, no schemes will be initiated as bodies will be too frightened to do so, as noble Lords have said.
My noble friend said that the Government had made more money available. That is true and I am most grateful for that, but I come back to the statement of my honourable friend Mr. Chope, who said that the money had to spread over a wide sea. We all know there is a desperate need for a vast amount of money.
I shall leave the matter of the four-week period, although I have to say that the document states quite clearly that property would have to be repurchased within four weeks of being put on the market. I think that will have to be changed, although I accept the assurances given by my noble friend on the Front Bench.
There is the vital point of what the Housing Corporation thinks about the measure. The corporation proposed the scheme that the Government are discussing today, but it was ordered so to do. My noble friend was unable to tell your Lordships, despite being pressed by four or five noble Lords, whether the corporation was in favour of this scheme. I have to draw the conclusion that it is not. I am only sorry that we could not telephone Sir Hugh Cubitt, who is chairman of the corporation, as he is in Australia.
As regards the amendment being defective, that is an old hardy perennial. We shall of course put that right or the Government will put it right at the end of the day. I conclude that the Government have merely shifted the goal posts as regards the scheme; they have not widened them. I commend the amendment to your Lordships.
9.43 p.m.
On Question, Whether the said amendment (No. 173A) shall be agreed to?
Their Lordships divided: Contents, 111; Not-Contents, 38.

DIVISION NO. 3

CONTENTS

Addington, L.

Longford, E.

Airedale, L.

Lovell-Davis, L.

Attlee, E.

Macaulay of Bragar, L.

Avebury, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

Mayhew, L.

Bledisloe, V.

Meston, L.

Blyth, L.

Milner of Leeds, L.

Bonham-Carter, L.

Milverton, L.

Borthwick, L.

Monk Bretton, L.

Broadbridge, L.

Monkswell, L.

Callaghan of Cardiff, L.

Moyne, L.

Campbell of Eskan, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Murray of Epping Forest, L.

Nicol, B.

Cocks of Hartcliffe, L.

Northbourne, L.

Cornwallis, L.

Northfield, L.

Craigavon, V.

Ogmore, L.

Darcy (de Knayth), B.

Oram, L.

David, B.

Parry, L.

Dean of Beswick, L.

Peston, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Dormer, L.

Ponsonby of Shulbrede, L.

Ennals, L.

Prys-Davies, L.

Ezra, L.

Rea, L.

Falkender, B.

Reilly, L.

Falkland, V.

Robson of Kiddington, B.

Fisher of Rednal, B.

Rochester, L.

Fitt, L.

Ross of Newport, L.

Foot, L.

Russell, E.

Forester, L.

Salisbury, Bp.

Gallacher, L.

Seear, B.

Galpern, L.

Sefton of Garston, L.

Gisborough, L.

Serota, B.

Gladwyn, L.

Shepherd, L.

Graham of Edmonton, L.

Simon, V.

Grey, E.

Somerset, D.

Hampton, L.

Stallard, L.

Harris of Greenwich, L.

Stanley of Alderley, L. [Teller.]

Hatch of Lusby, L.

Henderson of Brompton, L.

Stedman, B.

Henniker, L.

Stoddart of Swindon, L.

Hooson, L.

Strabolgi, L.

Houghton of Sowerby, L.

Teviot, L.

Hughes, L.

Thomson of Monifieth, L.

Hylton, L. [Teller.]

Tordoff, L.

Irvine of Lairg, L.

Turner of Camden, B.

Irving of Dartford, L.

Underhill, L.

Jay, L.

Walston, L.

Jenkins of Hillhead, L.

Wedderburn of Charlton, L.

John-Mackie, L.

White, B.

Kilbracken, L.

Williams of Elvel, L.

Kilmarnock L.

Wilson of Rievaulx, L.

Listowel, E.

Winstanley, L.

Llewelyn-Davies of Hastoe, B.

Wise, L.

Worcester, Bp.

Lockwood, B.

Young of Dartington, L.

NOT-CONTENTS

Arran, E.

Henley, L.

Belstead, L.

Hesketh, L.

Blatch, B.

Hives, L.

Boardman, L.

Hooper, B.

Caithness, E.

Kimball, L.

Carnegy of Lour, B.

Kinnoull, E.

Carnock, L.

Long, V.

Coleraine, L.

Lucas of Chilworth, L.

Colnbrook, L.

Lyell, L.

Cullen of Ashbourne, L.

Morris, L.

Davidson, V. [Teller.]

Mountevans, L.

Denham, L. [Teller.]

Norfolk, D.

Elles, B.

Oxfuird, V.

Ferrers, E.

Pender, L.

1490

Reay, L.

Swinfen, L.

Renton, L.

Thomas of Gwydir, L.

Sanderson of Bowden, L.

Trefgarne, L.

Strathclyde, L.

Trumpington, B.

Strathmore and Kinghorne, E.

Westbury, L.

Resolved in the affirmative, and agreed to accordingly.
Clause 156 [Removal of exception to the right to buy]:
9.51 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 173B:
Page 145, line 10, leave out ("be omitted") and insert ("apply to a dwelling-house as thereunder determined by the Secretary of State only where such a dwelling-house was completed before the date of Royal Assent, or such other date thereafter as the Secretary of State may specify.").
The noble Lord said: My Lords, in moving this amendment I should like to speak also to Amendment No. 173BA, in the name of the noble Lord, Lord Vinson; Amendment No. 173C; Amendment No. 173D, in the name of the noble Lord, Lord Monk Bretton; and Amendment No. 215A.
With this amendment we return to an issue that was raised very belatedly in Committee in this place only two weeks ago. I do not think that I have ever been conscious of an issue on which there was more strong feeling that something slightly out of place was being done. The matter has been debated in this House on many occasions over the last nine years. Indeed, my noble friend Lady Birk, whose name is to the amendment and who will speak on it, has been involved in most of the debates on the issue. I do not therefore think that it would be appropriate for me to take up too much of the House's time in rehearsing the arguments, but there are two kinds of arguments here.
The first point on which I know that many noble Lords felt strongly is that it was wrong for the Government to introduce—late at night on the last day of the Committee stage of a Bill which had already completed virtually seven days of Committee consideration in this Chamber and several months of consideration in another place—an issue which had no particular relevance to the necessary substance of the Bill. It introduced into the Bill a completely new element which had not been raised at any stage before and which could have been raised by the Government or by any noble Lord at any stage during the consideration of the Bill in this House; yet it was introduced without warning, without notice, at that very late stage.
That was the issue which I know caused deep offence to many noble Lords who are not particularly party political—it is one of the advantages of this place that there are many who are not party political—but who are jealous of the privileges and rights of the House and of Parliament. They felt it was wrong that such an element should be introduced. The Minister did not claim that any new facts had come to the Government's notice. He just said that they had thought about the issues of the

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right to buy and that they thought it was an appropriate time to introduce a new amendment. So that is the issue of procedure, if one likes to call it that. I attach to it the same importance which other noble Lords have given it. I think that it is of considerable but not overriding importance.
The second issue is that of substance. I am aware that on this matter there are very strongly held views. In particular noble Lords whom I much respect, who have defended and still defend in this House the rights of disabled people, feel very strongly that the right to buy ought to have been extended (and indeed was extended) to housing designed for the disabled. They draw the analogy that it ought to be extended to housing developed and intended for elderly people, people of pensionable age. I understand and respect their feelings.
However, as I have said on a number of occasions, I think that they are wrong because I believe that the balance of our concern, consideration and compassion ought not so much to be with the minority of disabled or elderly people who live in accommodation which is suitable for them (they are fortunate to do so) and also have the resources to exercise the right to buy, even if at a discount (they are fortunate to have those resources), but with the very much larger number of disabled and elderly people who do not live in housing that is appropriate to their condition and capabilities or who, if they do, are nowhere near having the resources to enable them to take advantage of the right to buy. I suggest that particularly in the case of the elderly the balance must lie there. There is a very much larger number of people in the second and third categories. The balance must be with those people who are more in need and need our compassion, concern and protection more than the others.
There is no perfect answer to this problem. Nothing will ever resolve all the difficulties and achieve all our desires. If there were an unlimited supply of housing designed for the disabled and for the elderly we should not be at odds on this issue. We should be able to agree with the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham, who supported the Motion in Committee. Unfortunately it is not so. The fact of the matter is that there is a desperate shortage of housing particularly suitable for those of pensionable age. That housing must be preserved for those who do not yet have it and those who need to come into it and have it when it becomes available.
The Government's amendment which was carried at Committee stage means that that housing will no longer become available. It will go out of the stock of housing suitable for elderly people. Indeed in many cases it would be available to people who not only would not need it themselves but who would in fact disturb the enjoyment of that housing by the elderly people in their blocks.
There are a number of amendments on this issue before the House. Our amendment does not in any way seek to bend the rules of the House. We do not
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propose to reverse the decision which was taken in Committee. Our amendment is much more limited. We believe that such a provision should apply to a dwelling-house:
"only where such a dwelling-house was completed before the date of Royal Assent, or such other date thereafter as the Secretary of State may specify".
In other words we are providing—and I should have thought that it as a legislative principle of great importance—that this legislation should not be retrospective. I believe that this is a modest amendment. I do not think that it goes as far back toward justice as we wish. However, I commend it to the House and hope that it will achieve the agreement not only of the House but of the Government as well. I beg to move.
10 p.m.
Lord Callaghan of Cardiff: My Lords, I happen to be patron of a housing association in Cardiff and I should just briefly like to tell the House that this matter is arousing considerable feeling. There is a feeling that sharp practice has been involved here. It seems to me to be utterly wrong to introduce this measure so quickly and, I am told, without consultation. I do not know whether that is true but that is what has been reported to me.
I wish that my noble friend's amendment went further. Frankly, I think that it is too modest on the basis of what I have been told. As I understand it, we are having great difficulties in the housing associations because we have to increase rents. We may well find ourselves unable to provide accommodation for those groups for which we should provide accommodation. I understand that accommodation provided for elderly people which will have a warden will still be exempted. That is good. However, I believe that about 50,000 houses providing accommodation which have been reserved so far for elderly people's needs will now become available for sale. I cannot understand why ideology should be carried to this limit.
If what I am told is true—and I am relying on the information that I am given because as a patron I do not have first-hand acquaintance—it seems to me almost a scandal that these houses should now be removed from protection. If I am wrong I shall be corrected. If they are now to be sold off, it is highly unlikely that they will again become available for letting to elderly people. There is a great shortage of accommodation for elderly people, as I know from my experience in Cardiff.
I look for an explanation from government. I cannot understand why in the very last stages of the Bill they have included a substantial number of houses in the category which is to be made available for purchase. I hope that the explanation from the Government will be more satisfactory than the information that I have been given. I am told that no assessment has been made of the overall impact of this change. I hope that my noble friend will push the amendment to a Division. If he does, I shall walk through the lobby with enthusiasm.
Baroness Birk: My Lords, I rise to support what has been said by the noble Lords, Lord McIntosh and Lord Callaghan. The housing world reacted with alarm and tremendous concern directly after the inclusion was announced in the Bill of Clause 156. It was announced in this House late at night, without warning, with no consultation and without proper explanation. The issue came up just before midnight at the Committee stage two weeks ago. It has been extensively debated in this House for nearly 10 years. During that time I was involved in the discussions. I did not see the result as a triumph—neither a personal triumph nor a triumph for the Opposition—but a triumph for good sense, a triumph for this House and a triumph for spreading more adequately the housing that is needed for elderly people.
What has changed since we managed to have the provisions changed in 1980 and 1984? The exemption was won on all these occasions, although there were certain people who were against it. What viable explanation can the Government give to justify reversing the position on a controversial question of enormous significance to future generations? We have had cries of discrimination. This point has been made every time the question has been brought up in order to justify the case. It was mainly the argument on which the Minister leaned when he replied two weeks ago at Committee stage.
Age Concern, which is the largest body working for the elderly, acknowledges that in one sense excluding these properties is discrimination and that in an ideal world it would not be necessary since there would be sufficient housing for everyone. However, it states that, although it has not received any inquiries from tenants who feel that they have been unfairly denied the right to buy, it accepts that there may well be tenants whose applications have been turned down and who may feel discriminated against. The organisation goes on to state that it receives daily inquiries from elderly people who need alternative rented housing which meets their special needs. If the stock begins to be sold, availability of such rented accommodation will become even more scarce. The present low level of building by local authorities means that most properties sold under the right to buy schemes are not being replaced.
That is the view of other social and housing organisations which are concerned about the matter. Those most concerned with providing homes for the elderly in urban and rural areas are looking to this House to do again tonight what it has done so many times before and of which it has been justly proud. They are looking to this House to safeguard purpose built and adapted housing for future generations of the elderly. And, remember, we are an ageing population. We have a priceless asset—an investment in houses which cannot be replaced. Let us be quite clear that the practical effect of the Government's proposal will he that virtually no such housing is built in the future.
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I agree with my noble friend that our amendment is far from perfect and that it is very modest, as was pointed out by my noble friend Lord Callaghan. However, at least it safeguards the existing stock. It is a modest amendment which the House, for the sake of its reputation, should support.
Lord Ross of Newport: My Lords, our support for the amendment was clearly stated by myself and by my noble friend Lord Evans in Committee. I believe that there are times when this House must act as the conscience of the nation and I hope that it will do so tonight in respect of this issue.
Lord Irving of Dartford: My Lords, I should like to intervene on behalf of local authorities. Many authorities such as Dartford have spent a great deal of money installing dispersed alarm systems and central heating in one-bedroomed flats and bungalows which are suitable for the elderly but not part of designated sheltered housing schemes. The clause is a threat to such investment—past, present and future—aimed at adapting the local authorities' housing stock to cope with the rapid growth in the frail elderly which is forecast to take place between now and the end of the century. If that need is to be met the investment must continue. Under the Bill it will be impossible.
Lord Hylton: My Lords, I have added my name to the amendment. I shall speak briefly, endeavouring not to repeat myself. Tonight noble Lords must decide whether they wish to retain the social assets of bungalows and flats for the purposes for which they were built. The question is: should those social assets be preserved or should they become market commodities perhaps with futures attached?
Many noble Lords will be familiar with the concept of trusteeship. I submit that Parliament is the trustee of the social assets of the whole community. We shall be neglecting our duty if we prefer the financial interests of the present occupants of old people's housing to the remaindermen. By that I mean future generations of retired and elderly people. For that reason I commend the amendment to your Lordships. It is a considerably better amendment than that tabled by the noble Lords, Lord Vinson and Lord Monk Bretton, which, in my view, is far too limited.
Lord Murray of Epping Forest: My Lords, I should like to put forward for consideration one small but significant factor. During this time of an ageing population many district councils have houses with two or three bedrooms being occupied by old people who have lived there all their lives and whose families have grown up and left. They are stuck there. They are not necessarily going to move unless they can be offered smaller and more convenient accommodation of the sort which is the subject of this amendment.

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My experience of my own local authority is that it is extraordinarily valuable to be able to free and make available larger houses which can then be taken up by younger and growing families. To put a stop to that would ossify matters and would freeze the occupation of many of these large houses. I should have thought that that would run counter to what is clearly a government objective which all of us would share.
Baroness Darcy (de Knayth): My Lords, this amendment worries me because, as I read it, it would once more make it possible to refuse the right to buy to people with disabilities.
Along with the noble Lord, Lord Swinfen, I was originally opposed to giving disabled people the right to buy, albeit reluctantly because it was discriminatory. I took that view because we needed to retain the small and valuable stock of purpose-built and substantially adapted houses. We both changed our minds last year because of what had happened and I should like to tell your Lordships what that was.
Some of your Lordships may remember when the noble Lord, Lord Swinfen, moved his amendment last year which allowed disabled people the right to buy their purpose-built and substantially adapted homes, he cited the case of a disabled man whose house was by no means substantially adapted; for example, he could not turn round in the kitchen in his wheelchair or fit his adapted car into the garage. However, he had been refused the right to buy on the grounds that it was substantially adapted although his able-bodied neighbour down the road had an almost identical house—and I say "almost identical" because the neighbour had a kitchen big enough for the man to turn round in his wheelchair.
The amendment was carried and we thought that gave disabled people the unfettered right to buy. But what has happened? This man is still being refused the right to buy on the grounds that his house is exempted under Schedule 5(11). The Government put that right in Committee. If this amendment is carried, as I read it, this man will once more be unable to buy his house, which differs very little from that owned by his neighbour except that his neighbour's house is more suitable. If I have misread the amendment, I am sure I shall be corrected.
As I read it, the Housing Act 1985, when amended by the Housing and Planning Act 1986, in Schedule 5 (11)(1)(b) states that the right to buy does not arise if the dwelling house was:
"let to the tenant or a predecessor in title of his for occupation by a person of pensionable age or a physically disabled person".
I hope that I am wrong and I shall be delighted if I am told that. However, as it is, I believe that this is unacceptable discrimination and I cannot support the amendment.
Lord Swinfen: My Lords, perhaps I may begin by correcting the noble Lord, Lord McIntosh of Haringey, on one point. He said that Schedule 5(11) to the Housing Act 1985 was mentioned for the first time when the Government brought forward their amendment in Committee. In fact, I mentioned that
1496
paragraph in my speech on Second Reading earlier this summer. Admittedly I mentioned it not in relation to elderly people but in relation to physically disabled people.
The noble Baroness, Lady Darcy (de Knayth), who has just spoken, is quite correct in telling your Lordships that, if this amendment is agreed, it will leave in the 1985 Act a badly drafted piece of legislation which, in my view, was designed to prevent the sale at that time of local authority housing which was particularly suitable for elderly people who were also physically disabled.
Last year your Lordships agreed to give physically disabled people the right to buy. At that time the amendment which I moved was very ably supported by certain noble Lords on the other side of the Chamber. A number of them came into the Lobby with me when the Committee divided. I do not know whether the noble Lord, Lord McIntosh, in his amendment, means to reverse that decision. But that would be the effect of this amendment, because there are a large number of local authorities who, despite the decision of Parliament last year to allow the right to buy to physically disabled people, are now denying that right to buy using paragraph 11 of Schedule 5 to the Housing Act 1985, as subsequently amended. A number of them have actually changed their reasons for refusing the right to buy following the decision made last year.
Should the House agree the amendment this evening, I shall have no alternative but to bring forward at Third Reading the amendment that I had tabled for discussion at Committee stage, but which I was unable to move because it had already been overtaken by acceptance of the Government's amendment. My amendment was to deal specifically with the case of physically disabled people.
We spoke at length at Committee stage about the question of discrimination and whether or not elderly people should have the right to buy. I personally think they should, but it is getting late so I shall not go further into that matter tonight. But I must advise the House that, if necessary, I will definitely bring forward the amendment that I had previously tabled to ensure that the right to buy for physically disabled people continues.
Lord Graham of Edmonton: Minister!
10.15 p.m.
Lord Hesketh: My Lords, I can assure the noble Lord, Lord Graham, that I still have eyes in my head. In 1986 in your Lordships' House the noble Baroness, Lady David, successfully moved an amendment to the Housing and Planning Bill taking away the jurisdiction of the Secretary of State. The reason given was that the Secretary of State had taken too severe a view of what constituted housing particularly suitable for elderly people. How ought the Secretary of State to deal with applications for determinations in the future if these amendments were accepted?
One possibility is that he would approach the task in much the same way as before from the inception of the right to buy in 1980. When he lost his

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jurisdiction, he had made a grand total of some 519 determinations on properties on the right to buy. I wonder whether the noble Lord, Lord McIntosh, envisages that the Secretary of State will be equally selective in future.
Alternatively, the Secretary of State could follow what appears to have been the practice of local authorities who have been making their own decisions since January 1987. Faced with an application for determination he could ask: Is this a flat or a bungalow? Does it have easy access and proper heating? Are there no more than two bedrooms? Is it reasonably near shops and buses? Was it let for occupation by an elderly person? If the answer to all these questions was yes, he might agree to exclude the property from the right to buy unless there was some special reason not to do so. We know that this approach works. It has led to over 6,000 tenants being denied the right to buy in less than three years.
The noble Lord may say that this is a middle way, that he expects the Secretary of State to be more ready to exclude properties from the right to buy than he was formerly, but not so ready as local authorities have been. In that case, we need to know how the Secretary of State is to achieve that balance. If he is asked to make a statutory determination he must consider the case on its merits. He cannot have a target of making a certain number of determinations each year, and refuse to make any more once the quota is used up. I can offer no assurance that the Secretary of State would find it possible to make determinations in greater numbers than in the past.
In Committee I invited your Lordships to support the repeal of paragraph 11 for the sake of fairness to elderly and disabled tenants who cannot understand why their homes should be treated differently from other council properties. If their homes clearly belonged to a special category of special housing which needed to be retained for renting I am sure that the tenants would accept this, but if such a category exists no one has yet succeeded in defining it in a way that is generally acceptable.
The noble Lord, Lord Callaghan, asked a question at the introduction of Clause 156. I repeat what I said in Committee. We were prompted to consider this subject by the amendment tabled by the noble Lord, Lord Swinfen, and the noble Baroness, Lady Masham, as regards amending the law concerning elderly persons' housing occupied by disabled people. We conceded and felt that outright appeal rather than modification was the right way. That is how we came to have Clause 156.
There are two other matters which it is important to remember. I stress again that Clause 156 is not about sheltered housing. It is designed to confer the right to buy on tenants of individual houses or flats with no special facilities or support. Paragraph 10 of Schedule 5 to the Act is specifically aimed at sheltered homes and schemes with a resident warden or a non-resident warden and a common room. Those schemes remain outside the right to buy. If the wording of paragraph 10 needs reconsideration we can certainly look at it.
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There is another factor which we believe it is important to take into account. Not so long ago life expectation was not so great but today there are many elderly tenants of 60 or 62 years of age who can quite easily look forward to another 20 years in the house which they feel they have a right to acquire.
In conclusion, there is a fact that we must face. We believe that there is an inherent unfairness. The noble Baroness, Lady Birk, suggested earlier this evening that there was little evidence of the desire for the right to buy by such people. The Department of the Environment has very considerable evidence. The noble Baroness is quite entitled to say "He would say that, wouldn't he?" On Monday I saw the noble Baroness, Lady Masham, who told me that since last week her mailbag had been filled with letters from elderly people who were very pleased to hear the news.
Baroness Birk: My Lords—
Lord Hesketh: Perhaps I may return to the remarks made by the noble Baroness at the Committee stage of this Bill. She said that we were not to be led in this House by any cries of fairness. As long as it is my honour to stand at this Dispatch Box for this Government, we support the cause of fairness for the elderly, who wish to have the same rights as everybody else.
Lord McIntosh of Haringey: My Lords, I am sorry to say that the Minister has repeated the arguments that he put forward in Committee. I do not believe that he has added anything new. However, there is a very valid and important point which has been raised by the noble Baroness, Lady Darcy (de Knayth), to which I wish to reply quite specifically. She has done what nobody else has done and that is to look at the detail of paragraph 11 of Schedule 5 to the 1985 Act. That part of the Act refers not only to persons of pensionable age but also to those who are physically disabled.
In correcting the wrong that was done at the Committee stage, it would not be right to neglect the fact that the Chamber has already taken a considered view with a much larger vote than was available at 12.17 a.m. two weeks ago as regards the physically disabled. I undertake on behalf of the noble Baroness that if this amendment is carried now I shall bring forward an amendment or amendments at Third Reading which will see to it that the protection which is given to physically disabled persons under paragraph 11 of Schedule 5 will be restored in full.
When I looked at the Housing Act 1985 I found a spelling error. There appears the word "predessor in title" instead of "predecessor in title". I wonder whether anyone has noted that. The Minister has not done so because he seems to give the impression that this measure applies only to individual houses. I remind the House that the paragraph refers to housing which is particularly suitable for occupation by persons of pensionable age having regard to, first, its location, and, secondly, its size, design, heating system and other major features. That means that the paragraph is widely drawn and covers a large amount of housing designed for elderly people, much

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of it in special locations with special courtyards, and so on.
The argument has been well rehearsed. We do not need to go into it any further. I wanted to respond to those points made in debate. In view of the fact that this matter has been considered so many times in your Lordships' House, we would wish to proceed to a Division.
10.26 p.m.
On Question, Whether the said amendment (No. 173B) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 36.

DIVISION NO. 4

CONTENTS

Addington, L.

Lovell-Davis, L.

Attlee, E.

Macaulay of Bragar, L.

Avebury, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Blease, L.

Meston, L.

Bledisloe, V.

Milner of Leeds, L.

Blyth, L.

Milverton, L.

Bonham-Carter, L.

Monkswell, L.

Broadbridge, L.

Monson, L.

Callaghan of Cardiff, L.

Mountevans, L.

Campbell of Eskan, L.

Mulley, L.

Carmichael of Kelvingrove, L.

Murray of Epping Forest, L.

Cledwyn of Penrhos, L.

Nicol, B.

Cocks of Hartcliffe, L.

Northbourne, L.

Craigavon, V.

Northfield, L.

David, B.

Ogmore, L.

Dean of Beswick, L. [Teller.]

Oram, L.

Dormand of Easington, L.

Parry, L.

Ennals, L.

Peston, L.

Ezra, L.

Pitt of Hampstead, L.

Falkender, B.

Ponsonby of Shulbrede, L. [Teller.]

Falkland, V.

Fisher of Rednal, B.

Prys-Davies, L.

Fitt, L.

Rea, L.

Foot, L.

Reilly, L.

Gallacher, L.

Robson of Kiddington, B.

Galpern, L.

Rochester, L.

Gladwyn, L.

Ross of Newport, L.

Graham of Edmonton, L.

Russell, E.

Grey, E.

Salisbury, Bp.

Hampton, L.

Seear, B.

Harris of Greenwich, L.

Sefton of Garston, L.

Hatch of Lusby, L.

Serota, B.

Henderson of Brompton, L.

Shepherd, L.

Henniker, L.

Simon, V.

Hughes, L.

Somerset, D.

Hylton, L.

Stoddart of Swindon, L.

Irvine of Lairg, L.

Strabolgi, L.

Irving of Dartford, L.

Thomson of Monifieth, L.

Jay, L.

Tordoff, L.

Jenkins of Hillhead, L.

Turner of Camden, B.

John-Mackie, L.

Underhill, L.

Kilbracken, L.

Wedderburn of Charlton, L.

Kilmarnock, L.

White, B.

Listowel, E.

Williams of Elvel, L.

Llewelyn-Davies, of Hastoe, B.

Wilson of Rievaulx, L.

Winstanley, L.

Lockwood, B.

Young of Dartington, L.

NOT-CONTENTS

Arran, E.

Caithness, E.

Belstead, L.

Carnock, L.

Blatch, B.

Clanwilliam, E.

Boardman, L.

Coleraine, L.

Borthwick, L.

Colnbrook, L.

1500

Cork and Orrery, E.

Lyell, L.

Darcy (de Knayth), B.

Morris, L.

Davidson, V. [Teller.]

Oxfuird, V.

Denham, L. [Teller.]

Pender, L.

Elles, B.

Reay, L.

Ferrers, E.

Renton, L.

Gisborough, L.

Sanderson of Bowden, L.

Henley, L.

Strathmore and Kinghorne, E.

Hesketh, L.

Swinfen, L.

Kimball, L.

Thomas of Gwydir, L.

Kinnoull, E.

Trefgarne, L.

Long, V.

Trumpington, B.

Lucas of Chilworth, L.

Ullswater, V.

Resolved in the affirmative, and agreed to accordingly.
10.34 p.m.
Lord Vinson Lord Vinson moved Amendment No. 173BA:
Page 145, line 10, at end insert—
("The Secretary of State shall make determinations excluding from the right to buy dwelling-houses that are particularly suitable for and which it has been the practice of the landlord to let for occupation by persons of pensionable age. Such determinations shall only be made in areas referred to in section 157(1) of that Act and shall be made in such a way as to enable local authorities in rural areas to meet their statutory obligations to rehouse elderly agricultural and other workers.")
The noble Lord said: My Lords, I hope it will assist the House if I explain the purpose of the amendment. Whether it has been negatived by the result of the Division we have just had I cannot say, but I do not think that that is the case because it applies to specialist housing, both built and as yet unbuilt.
Like many in the House, I wholly support the philosophy that lies behind the right to buy legislation. However, at the same time I recognise the inadequacy of the present housing market and feel that for several sectors of society the right to be housed is the greater priority for the time being. I wholly accept that the Government are leaving in place some constraints on the right to buy which may have been overturned by the recent Division; namely, by withholding the right from those of pensionable age living in sheltered housing which has a warden or a common room. I accept that the Government have made a modest gesture to meet this problem. However, I do not believe that it goes far enough, particularly in rural areas which have a different problem from urban ones.
Over the past years, local authorities have built for old people many homes which do not have a full-time warden or share a common room. Indeed, why should they have either? As other noble Lords have pointed out tonight, plenty of people who retire at 65 are perfectly capable of looking after themselves and, it is to be hoped, will not need extra care of that kind for many years. There is thus a substantial stock of pensioner housing that will no longer remain excluded from the right to buy unless the clause on which we have just voted is enacted fully. It is precisely this stock in rural areas which the amendment sets out to safeguard.
The houses in question are often very attractive, in or on the edges of villages, and if sold to the existing occupants would at once command a very useful premium on the open market as wholly desirable residences. There is indeed an increasing

1501
demand for pensioner housing. If this is to be met, it means replacing the stock by new building at a much higher rate. Frankly, this would be daft. While housing authorities and housing associations in urban areas have a mountain of problems, they do at least administer a reserve stock that is broadly in the same locality. However, in rural areas the loss of pensioners' homes in a village would often mean the total loss of such homes in that immediate locality.
Old people who had hoped to be rehoused in the community in which they had lived would in practice have to be offered homes many miles away from their social links and often in an urban environment. This would be quite contrary to the Government's expressed desire to encourage care in the community. Noble Lords will also be aware that in rural areas local authorities have a statutory obligation to rehouse elderly agricultural workers and their wives if they are displaced through the loss of tied cottages.
This amendment seeks to make a half-way position between the current law on the right to buy in rural areas and that which the Government are proposing unless they drastically alter their position in view of the proceedings just now. My proposals would not affect the right to buy of the physically disabled and would still leave the determination as to what is qualifying accommodation entirely in the hands of the Secretary of State. In practice, these proposals are a compromise Clause 11. If they were adopted he would have to agree with local authorities what the need is for such pensioner housing, and what it is likely to be. This is likely to be based on the availability of those houses that traditionally have been earmarked for persons of pensionable age and are currently excluded from the right to buy. It would be paradoxical if the Government stimulated the disposal of the very homes that local authorities need to meet their statutory obligations, not least when there is a substantial waiting list for such properties.
This amendment does not open the floodgates that would enable recalcitrant local authorities to stick a bell on the wall and call it an old people's home, but it would reduce the possibility of more well-heeled incomers moving into highly desirable housing with a resultant loss of retirement homes which are badly needed and consequent damaging effects on the balance of communities that this would bring. I hope my noble friend will consider that there is merit in the amendment. I beg to move.
Lord Monk Bretton: My Lords, in Committee I said that the repeal of paragraph 11 of Schedule 5 to the Housing Act 1985 would create difficulties in the context of smaller rural communities. I was extremely worried about that. The repeal was put through at short notice. It seems that the position has been somewhat, though not altogether, changed.
Because things happened so quickly there was not much time to find suitable amendments to put down at Report stage. I put down an amendment and then also put my name to the amendment of my noble friend Lord Vinson because I felt that we wanted more shots to the bow. This action is one which
1502
might be described as a "Committee stage activity" and, indeed, one would rather have done this in Committee. I must therefore apologise; but the truth is that there was simply no time available in Committee.
It is my intention to refer to both amendments in my remarks. As a matter of fact I am prepared to accept the arguments of my noble friend Lord Hesketh in the main. Giving the elderly the right to buy will not deplete the reletting vacancies of English local authorities by quite as much as some people originally thought. He made those points in Committee and I think that he was right.
However, what I cannot accept is the argument that this proposal will be the answer to the problem in all areas, especially rural areas. I say that because in those rural areas, and in small communities, averages will prove misleading. Moreover, my noble friend was really dealing with averages when he advanced the whole theory behind this proposal. We cannot rely upon increased housing association activity to solve every problem in small villages.
It should be mentioned that last year 600 dwellings were built under the housing, association scheme—that is, in rural areas—for the whole of England. Under half of that figure were for elderly people. Therefore, even if there is a good increase in the building of that kind of housing, it will have to be pretty big before it will have much impact on the situation.
The Government's theory on the matter seems to presuppose a continuous increase in the supply of housing to let which will enable the selling-off proposals to work. Of course, in smaller villages things do not happen quite like that; at best, they happen in fits and starts—if they happen at all. Moreover, proposals to build further houses in small rural communities very often run up against the most appalling planning opposition, and so on. Indeed, that can happen in villages both in and out of national parks and areas of outstanding natural beauty. It is not an easy matter.
It also appears that the building of this low-cost housing is to depend upon gifts, or near gifts, of land in those villages and that it is not certain where they will be—whether there will be such gifts or such land available in every village. It should also be mentioned that in small villages it is now prettty well known that the right to buy is exercised more rapidly than is the case elsewhere, especially in what I would call "rural suburbia"; for example, places like Surrey where it happens even faster.
I must now return to the matter of the two amendments in hand. I shall not say much about Amendment No. 173D because I think that it is the least appropriate at present. I say that because I am not satisfied with it as it is. Moreover, it would definitely need limiting to rural areas in some way or another. I commend to the House Amendment No. 173BA moved by my noble friend Lord Vinson. It has certain advantages of flexibility. It relates to villages in areas of outstanding natural beauty and national parks, but its successful operation depends upon the Secretary of State's willingness to designate other areas sufficiently widely. I attach great

1503
importance to achieving that aim, although I am not sure whether the amendment will be sufficiently effective. The designations must be extensive enough to provide local authorities with the means adequately to meet their statutory obligations. Housing authorities in rural areas have rather more statutory duties in that respect than those in other areas.
I hope that my noble friend the Minister will take the amendment away and consider it further. I do not want to make an issue of the matter now but it is of sufficient importance that we may have to divide on it sooner or later. Now would not be a suitable occasion in view of the rushed way in which we have had to deal with it.
This is an old battleground. During the passage of the Housing and Building Control Bill in 1984 the House insisted on an amendment relating to housing for the elderly. Housing in smaller parishes has not changed sufficiently since then to enable a different view to be taken.
10.45 p.m.
Lord Hesketh: My Lords, perhaps I may interrupt my noble friend because it may help the House. The effect of the amendment which has just been carried, as I understand it, is to restore to the Secretary of State the task of deciding whether or not individual houses or flats should be excluded from the right to buy. That will be the case in all parts of England and Wales. The present amendment would restore that jurisdiction to certain rural areas only. That appears to be subsumed within the amendments of the noble Lord, Lord McIntosh, which have just been carried. For that reason I feel that it would probably be more suitable for my noble friend to withdraw the amendment.
Viscount Bledisloe: My Lords, is that correct? The amendment which has just been carried applies only to houses which have already been built whereas the amendment moved by the noble Lord, Lord Vinson, would apply to houses constructed in the future.
Lord Northfield: My Lords, that is one reason why I wanted to intervene. I refer to the position in the private sector. When my company is planning new settlements in the countryside we are under considerable pressure, which we happily accept, to offer land at low or nil value to local authorities in those rural areas so that they can fulfil their statutory obligations to house elderly people, retired agricultural workers and so on. It will be difficult for us to continue to make those offers of land if we find that the result is that the right-to-buy provisions apply and the elderly person sells the house, bungalow, or whatever it is, for which we have given the land. This is a difficulty because what will happen will be that in planning any settlement we shall have to charge rather more for some building lots for other people in order to subsidise these ones for the retired. Then we shall find that that retired person goes off with the swag. That is impossible.
All the amendment is doing, very helpfully, is saying to the Minister, "When you look at the rural
1504
areas as a whole and take into account the obligations to house the elderly and retired in these categories, you must be careful to make sure that they can carry out those obligations. You must not push the right to buy so far that they cannot do it". That would be a help to the private sector in planning the future in the way we wish. It would help to get a balanced community when we build in the future.
Lord McIntosh of Haringey: My Lords, as the person who moved the original Amendment No. 173B, which has just been agreed to, I must confirm what was said by the noble Viscount, Lord Bledisloe, and my noble friend Lord Northfield. The amendment which has been carried refers only to housing completed before the date of Royal Assent or at such later date as the Secretary of State may specify. Therefore, as my noble friend Lord Northfield says, it does not apply to future dwellings built in rural areas.
The amendments moved and spoken to by the noble Lords, Lord Vinson and Lord Monk Bretton, add to and are complementary to what has just been agreed. I claimed to speak to them when I moved Amendment No. 173B. I thought that they had been debated, although the noble Lords concerned did not intervene. I should have thought that the right course would be that since I claimed to speak to them, since they were grouped and nobody challenged the grouping, they should now be accepted, as Amendment No. 173 will be accepted.
Lord Renton: My Lords, I have said nothing in relation to all these amendments so far. I voted with the Government on the amendment of my noble friend Lord Stanley and I voted with the Government just now on that of the noble Lord, Lord McIntosh. It seemed to me that the amendment moved by my noble friend Lord Vinson had, as the noble Lord, Lord McIntosh, pointed out, virtually no time limit. The power which it contains can be carried into the future and it seems to me to deal with the crux of the matter:
"dwelling-houses that are particularly suitable for … occupation by persons of pensionable age".
Such determinations shall be made only in rural areas, to enable local authorities,
"to meet their statutory obligations to rehouse elderly agricultural and other workers".
I personally regret the acceptance of the last two amendments. But I think the best way of rectifying the matter might well be to accept the amendment moved by my noble friend Lord Vinson.
Lord Hesketh: My Lords, I certainly do not agree with the noble Lord, Lord McIntosh. Every list of groupings that I have seen today differs from the presentation which he has just given to suggest that the amendment we are now on and the amendment that follows it should be included in the decision on the previous amendment.
The amendment tabled by my noble friends would restore in certain rural areas the Secretary of State's function of determining which properties should be excluded from the right to buy as being particularly suitable for occupation by elderly people. The rural

1505
areas in question would be national parks, areas of outstanding natural beauty and rural areas designated by the Secretary of State under Section 157 of the Housing Act 1985. So the intention of my noble friends, as I understand it, is that the tenants of non-sheltered housing for elderly people should generally have the right to buy, but that in certain rural areas the Secretary of State should have the power to exclude properties at the landlord's request.
In speaking to the amendments moved by the noble Lord, Lord McIntosh, I explained why it did not seem right to restore the Secretary of State's jurisdiction. I have to say that those reasons still seem to the Government to hold good, even if the jurisdiction were only to be exercisable in certain rural areas. If that is the case, we have a fundamental problem in deciding what we mean by housing which is particularly suitable for elderly people outside sheltered schemes. That problem does not go away just because we confine our attention to rural areas. The problem may be smaller but it is still there.
The amendment would specifically require the Secretary of State to make determinations in such a way that local authorities were enabled to rehouse elderly agricultural and other workers. Local authorities are required by the Rent (Agriculture) Act of 1976 to use their best endeavours to provide suitable accommodation for retiring agricultural workers who are required to leave their present homes. I understand the point that my noble friends have in mind, but it would be difficult for the Secretary of State to take that into account in considering an application by a local authority to have a specific property excluded from the right to buy. There would not, we believe, be a way of knowing when that property might be available for reletting to a retired worker if the present tenant did not buy it.
The case which my noble friends have put forward for retaining homes for reletting in rural areas is one that is sometimes made with respect to right to buy sales generally. To meet concerns of these kinds without making tenants in rural areas second-class citizens the legislation already allows local authorities and housing associations selling housing in certain rural areas to impose restrictions on resale. Section 157 referred to in the amendment allows them to reserve rights of pre-emption or a power to refuse consent to resales unless the new owner is to be a person with a local connection. I do not think it would be right to say in addition that a rather strangely defined category of dwellings let to elderly tenants should not be eligible for the right to buy at all if they happen to be in rural areas.
However, I have listened closely and I recognise that there is a real concern on the part of my noble friends as regards the housing needs of small rural communities. I shall be happy to discuss this matter with them and explore what ways there may be of meeting their concern. On that footing, I hope that my noble friend may see fit to withdraw his amendment.
Lord Vinson: My Lords, I am grateful for the significant support that this amendment has received from all sides of the House. In the general hubbub
1506
following the last Division I said I hoped that the measure had not been negative as it applied to houses both past and future. However, I fear the Minister did not hear that. Obviously, the whole matter is very much back in the melting pot. It would be wrong to press this amendment when to a great degree it has been overtaken by the recent Division. I am grateful for the reassurances given by the Minister. I shall not press the matter further at this stage. However, I look forward to hearing his modified proposals on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 173C:
Page 145, line 11, leave out ("repeal by this Act of") and insert ("operation of subsection (1) above in relation to").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 173D not moved.]
Schedule 9 [Amendments of Parts IX, XI, XVII and XVIII of the Housing Act 1985]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 173E:
Page 231, line 15, at end insert ("and for the words "in default of the person on whom the repair notice was served" there shall be substituted "in a case where the repair notice has not been complied with" ").
The noble Lord said: My Lords, this clutch of amendments, Nos. 173E, 173F, 177ZA to 177ZC, 215B and 215C, refer to the problem of houses in multiple occupation. This matter was referred to both on Second Reading and in Committee when certain amendments were suggested.
If an authority serves a notice under Section 352 requiring works to be carried out on houses in multiple occupation and the recipient of the notice fails to carry out the works, the authority can then do so itself and recover the expenses from the person on whom the notice was served. Amendments Nos. 173E, 173F and 177ZA to 177ZC widen this power to enable the expenses to be recovered from the person having control of or managing the house in multiple occupation. That would aid local authority enforcement and bring the provisions covering houses in multiple occupation into line with those for ordinary tenanted properties.
Amendments Nos. 215B and 215C remove redundant references to Section 366, which is repealed by paragraph 54 of Schedule 9 to the Bill. I beg to move.
11 p.m.
Lord Reay: My Lords, the amendments make small and important changes to the processes by which local authorities enforce notices on houses in multiple occupation and recover their expenses. It has in the past been difficult for local authorities to enforce notices on houses in multiple occupation where changes of ownership take place, and the

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amendments make technical improvements to the process. I know that the noble Lord, Lord Dean of Beswick, has waged a long campaign to reform the law relating to houses in multiple occupation and I pay tribute to his efforts in that area. I believe that he supports many of the changes that we are making in this Bill. The amendments tighten up the processes set out in the Bill, and I am glad to accept them.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for his reply and for his generous tribute to me and to the campaign in which I have been involved. It would be remiss of me not to mention that a great many Members on all sides of your Lordships' House and in another place have given the cause their total support. I can say on behalf of all the individuals and organisations involved that they will accept the amendments, minor though they appear, very gratefully as a step in the right direction. Once again I express my sincere thanks to the Minister.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 173F:
Page 232, line 7, after ("control" ") insert ("for the words "subject to section 191(3A)" there shall be substituted "subject to sections 189(1B), 190(1C) and 191" and ").
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendments Nos. 174 and 175:
Page 240, line 12, after ("constructed") insert ("or subsequently adapted").
Page 240, line 14, leave out from ("to") to ("constitutes") and insert ("a part of a building which, whether by virtue of this subsection or without regard to it").
The noble Lord said: My Lords, these amendments make two minor but important changes to the definition of "house in multiple occupation" in Section 345 of the 1985 Housing Act which now includes a "flat in multiple occupation".
Amendment No. 174 widens the definition to allow for cases where a multi-occupied flat has been provided by conversion of a larger property rather than being originally constructed as a flat. Amendment No. 175 makes it clear that any reference to a flat in multiple occupation covers multi-occupied parts of buildings whether they fall within the definition in the subsection or not.
These are useful technical amendments to ensure that a local authority is not prevented from acting on multi-occupied property which may not fall within the most usual categories. I beg to move.
On Question, amendments agreed to.
Lord Reay Lord Reay moved Amendments Nos. 176 and 177:
Page 243, line 32, leave out ("and other") and insert ("and all apparatus, systems and other things provided by way of ").
Page 243, line 32, at end insert ("and at the end of that subsection there shall be added the words "and to ensure that all means of escape from fire are kept clear of obstructions".").
The noble Lord said: My Lords, these two amendments expand slightly the definition of those matters about which the Secretary of State may make management regulations under Section 369 of the
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Housing Act 1985. Those regulations, which are being updated for issue next year, will apply automatically to all houses in multiple occupation.
At present managers are required to ensure the repair, maintenance, cleansing and good order of facilities in the property. We added "adequate other fire precautions" to the standard in an earlier amendment at Committee, but it is not clear that that is sufficiently precise to enable the regulations to cover all aspects of maintenance of anti-fire devices. Amendment No. 176 accordingly makes it clear that those will be within scope by inserting the words,
"all apparatus, systems and other things provided by way of fire precautions".
Amendment No. 177 also amends Section 369 by providing that the regulations may ensure that managers keep all means of escape from fire clear of obstructions. These are useful, technical amendments. I beg to move.
Lord Graham of Edmonton: My Lords, we on this side of the House appreciate very much the sense of the amendments. We certainly think that they are sensible. The great problem is enforcement. The Government are making provision in the Bill for proper and better management in an area where there may be disaster after disaster. Those can be avoided if the Government will just bear in mind that it is one thing to lay down duties and responsibilities but another to make sure that the people who have the function of carrying them out have the resources to do so. I appreciate that that is not the function of the amendment or of the Bill, but it is a point that should be borne in mind.
On Question, amendments agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendments Nos. 177ZA to 177ZM:
Page 243, line 49, after ("code)") insert ("in the first place where they occur").
Page 244, line 37, leave out from ("works") to end of line 38 and insert ("in a case where the notice referred to in subsection (1) has not been complied with").
Page 245, line 12, leave out ("paragraph 5") and insert ("in paragraph 1 (introductory) for the words "in default of the person on whom the notice was served" there shall be substituted "in a case where the notice has not been complied with".
(1A) In paragraph 2 of that Schedule (recovery of expenses), in sub-paragraph (1)—

(a) in paragraph (a) after the words "dwelling-house" there shall be inserted "house in multiple occupation"; and

(b) for paragraph (b) there shall be substituted—

"(b) where the works were required by a notice under section 352 or 372 (notices relating to houses in multiple occupation), from the person having control of the house or the person managing the house, as the authority think fit;".
(1B) Paragraph 5 of that Schedule").
Page 249, line 43, leave out from ("(1)") to ("in") in line 44 and insert ("applies").
Page 249, line 46 at end insert —
("(3A) Subsection (2) applies in relation to a flat in multiple occupation with the substitution for any reference to a dwelling-house which is a flat of a reference to the flat in multiple occupation.").
Page 250, line 10, leave out from ("dwelling-house") to ("is") in line 11 and insert ("house in multiple occupation or building").
Page 250, line 23, after ("dwelling-house") insert ("house in multiple occupation").

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Page 251, line 20, after ("dwelling-house") insert ("or house in multiple occupation").
Page 251, line 36, after (" "flat" ") insert ("except in the expression "flat in multiple occupation" ").
Page 251, line 37, leave out from ("(2)") to end of line 38 and insert—
(""house in multiple occupation" and "flat in multiple occupation" have the same meaning as in Part XI;").
Page 251, leave out line 48.
Page 251, line 50, at end insert—
(""flat in multiple occupation section 623"
"house in multiple occupation section 623"").
The noble Lord said: My Lords, I beg to move these amendments en bloc.
On Question, amendments agreed to.
Clause 159 [Reports to tenants etc. on local housing authority functions]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177NZ:
Page 148, line 19, leave out ("three") and insert ("six").
The noble Lord said: My Lords, prior to publishing a consultation paper on the introduction of performance indicators to the local authority housing service on 10th October, the Department of the Environment held a series of meetings with housing practitioners and representatives of the relevant professional bodies. I understand that the point was made during that pre-consultation exercise that it will be impossible for local authorities to supply and publish information within three months of the conclusion of any financial year, as it would be for central government. I understand that the Department of the Environment has therefore conceded that point. I also understand that it agreed that six months is a more reasonable period for the presentation of the reports to tenants. Will the Government be prepared to accept the amendment?
Lord Hesketh: My Lords, I am happy to accept the amendment.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177A:
Page 148, leave out lines 30 to 34.
The noble Lord said: My Lords, once again I shall be as brief as possible. The amendment will delete subsection (5), which states:
"The power to make a determination under subsection (1) above may be so exercised as to make different provisions 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."
In other words, a Secretary of State may require different local authorities to provide different information on the housing service on different days of the week. This is an unnecessarily general and strong new power that the Secretary of State is giving himself. The different cases or descriptions of cases might, for instance, all be Labour-controlled authorities or inner London boroughs or metropolitan districts. The Government should at
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least be strongly encouraged to give a clear statement of why the subsection is included in the Bill. I beg to move.
Lord Hesketh: My Lords, the effect of the amendment would be to prevent Her Majesty's Government from making determinations which could allow different provision to be made to cater more closely to differing needs of authorities because of, say, size or location. I do not think that that would make much sense.
In particular, local housing authorities in Wales experience different conditions and circumstances from their counterparts in England and we would want to ensure that we had sufficient flexibility to enable that to be recognised. It would be quite wrong for the provisions in the Bill not to allow enough room for manoeuvre should the Secretary of State for Wales and the Welsh housing authorities decide that different reports to tenants are needed in Wales from those that are wanted in England.
Nor would it be right for the clause not to recognise that within England or within Wales the Secretaries of State might wish to have the flexibility to require different amounts of information to be given to tenants in different authorities. In this era of tenants' choice, would it, for example, be sensible for an authority left with a handful of properties to give the same level of information to its tenants as one still managing thousands of houses? I think not. The first authority should have the protection of the clause as presently drafted.
I can, however, allay fears that Her Majesty's Government intend to use this provision to single out housing authorities for individual determinations as some form of punishment. That is not our intention.
I hope that the noble Lord, Lord Dean, will accept these arguments, in particular the reassurance that I have been able to give him, and that he will consequently feel able to withdraw his amendment.
Lord Dean of Beswick: My Lords, I am glad of the reassurance that the Minister gave, but I am still of the opinion that it would have been better to accept the amendment. I believe that it is better to have a national basis on which to assess than continually allow the Secretary of State to make his own determinations. However, I have no intention of pressing the issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 177B:
Page 148, line 39, at end insert—
("(8) Before making a determination under this section, the Secretary of State shall consult such representatives of local government as appear to him to be appropriate.)
The noble Lord said: My Lords, the proposal to introduce performance indicators for the local authority housing service has the general, cautious support of the local authority associations. The Association of Metropolitan Authorities certainly believes that its members should provide

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information for tenants. However, comments made by Mr. Michael Howard, the Minister for Water and Planning, at the Conservative Party Conference seemed to indicate that the Government are considering making those indicators statutory and will tighten them up in future years so that comparisons can be made between local authorities at the regional and national levels.
On 10th October the Department of the Environment issued to the local authority associations and other interested bodies a consultation paper on performance indicators and, as I understand it, comments were due to be back with the Department of the Environment in early December. This subsection is designed to ensure that at least the local authority associations are consulted on any change to these proposals in future years.
On the basis of what I have said I hope that the Minister will feel inclined to be sympathetic and will accept this amendment. I beg to move.
Lord Hesketh: My Lords, it is with the greatest of pleasure that I accept the noble Lord's amendment.
Lord Dean of Beswick: My Lords, one should give brief thanks for small gifts. I thank the noble Lord.
On Question, amendment agreed to.
[Amendment No. 177C not moved.]
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 177CA:
After Clause 165, insert the following new clause:—
("Court orders and the possession of property by landlord.
.—(1) Section 7 of the Housing Act 1988 shall be amended in accordance with the provisions of subsections (2) and (3) below.
(2) In section 7(3) the words "… subject to subsections (6) and (6A) below…" shall be substituted for the words "… subject to subsection (6) below…"
(3) After section 7(6) there shall be inserted a new subsection 6A as follows:—
"6A (a) The Court shall not make an order for possession on any ground which the landlord or any predecessor in title of the landlord seeking such possession has promised shall not be used against the tenant, whether that promise is continued in the original tenancy or any subsequent variation thereof, or in a separate contract of release.
(b) This subsection does not alter or limit the existing law in relation to waiver or estoppel."").
The noble Lord said: My Lords, I cannot be as brief as I am sure the House would like me to be at this time of night because I have to raise a rather important matter, which I believe should be of concern to the Government. In moving this amendment I shall also address a few remarks at the end to Amendment No. 202ZA which is grouped with it.
I believe that this is a very important amendment. The National Consumer Council has just received an authoritative counsel's opinion warning that contractual clauses purporting to give assured tenants enhanced security of tenure may be unenforceable. For example, Clause 4(2) of the National Federation of Housing Association's model tenancy agreement, intended for use with tenants' choice transfers and already in use for thousands of
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"voluntary transfer" tenants' agreements, may in fact be unenforceable. In respect of tenants' choice, the Housing Corporation's proposals for enforcing security of tenure clauses may be procedurally ineffective and also ultra vires.
The National Consumer Council rightly says that it is gravely concerned about this situation. Council tenants wanting to choose a new landlord may be penalised by facing considerably stricter mandatory grounds for possession. They are likely to perceive this as involving a significant reduction in their security of tenure. Independent landlords may be prevented from attracting council tenants with promises that they will retain their security of tenure. It cannot be fair or reasonable that such tenants and non-council landlords are possibly penalised in this way. The Government have called for an even playing field for tenants' choice. Surely that should also apply in this context.
The consumer council is aware that the true legal situation will not be clear until the matter is settled in court. Nonetheless, on the basis of the best legal advice it can obtain, it is clear that there is a substantial risk for tenants that the clauses in question are unenforceable. On the basis of its close contact with tenants, it feels that the problem is likely to undermine tenants' confidence and support for tenants' choice.
The situation is perhaps worse for the thousands of council tenants already transferring under voluntary transfers. They have for the most part been promised that they will retain their rights. Their tenancy agreements explicitly state this. The fear is now being expressed that they have been misled, even if unintentionally. I am not accusing the Government in any way. Once again we fear that such tenants will be distressed and angry. The programme of voluntary transfers may be disrupted until the position is corrected. I am sure that the Government—who wish to see it corrected—will be concerned about the matter. There is another aspect to the problem. Many thousands of new assured housing association tenants have clauses promising enhanced security of tenure. The National Consumer Council fears that these clauses are also unenforceable; that those tenants may also have been unintentionally misled.
It is for those reasons that we believe that the amendment before your Lordships' House is necessary if tenants are to be able to rely on the security of tenure written into their tenancy agreements.
I have lengthy copies of advice from eminent counsel, Robin Allen, who advises that a statutory amendment is the most sensible solution to this problem. I shall not bore the House by reading the 18 pages referring to the first part of the amendment. I shall read his conclusion. He states:
"My conclusion for the purposes of this part of this advice is that there is a serious problem about the inconsistencies between the enhanced protection given by the terms of the model agreement"
—the NFHA agreement—
"which appear to exclude all but one ground for mandatory possession and in the case of that ground modify its terms."

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While he considers that there is a substantial argument which may be mounted to justify a tenant seeking to rely on terms of agreement in the face of a landlord who seeks to enforce the express wording of the 1988 Act, he cannot advise that such a tenant would be certain of success.
Finally, I read from the second part of the conclusion. I dare say that the Government have seen these documents already. Having gone through a second opinion on this model agreement, he says that it would appear that the amendment which is before the House tonight is the only sensible way to ensure that this otherwise appropriate and useful model agreement—the NFHA agreement—is in fact effective. In other words, eminent counsel is saying that there is a grave risk that if a rogue landlord challenges the issue in the courts, a tenant who thinks he is perfectly safe, having the same security of tenure—having moved from council tenancy to housing association tenancy, or to a private landlord—may find that he does not have the security that he has been promised.
The justification for the second part of the amendment is this. We think the tenants ought to have the right of independent, financial and legal services so that they are informed of such a possibility. That is what the second amendment provides. The legal financial housing issues raised by such transfers are obviously many and complex. Legal advice is needed on the terms of any proposed tenancy agreement, and whether tenants' existing rights are preserved.
Some local authorities who are pursuing voluntary transfer—asking tenants to move from council tenancies to housing associations tenancies—are not willing to fund such advice. If noble Lords were asked to give advice to tenants who were placed in this situation, possibly favouring a move to a housing association, they would have to say that in the light of the advice given by eminent counsel the tenants would be absolutely stupid to do so. However, they ought at least to be given the opportunity to obtain that advice and be helped with it. Unfortunately, some local authorities are not willing to fund the advice. For example, the London Borough of Redbridge is currently pursuing the transfer of its general needs housing to a newly created housing association. Although it has set aside the sum of £500,000 to pay for the cost of doing so, it is unwilling to give tenants more than a few hundred pounds to pay for advice. The tenants' participation advisory service estimates that about £10,000 may be sufficient to pay for such advice.
I shall not continue because I assume that the Government have been made aware of the problem. Therefore, I hope that in reply the Minister will assure me that they have the matter under serious consideration and intend to do something about it. If they will not accept my amendment then at least they should bring forward their own amendment on Third Reading. The situation puts in jeopardy the whole question of the transfer of letting accommodation from the public to the private sector. I beg to move.
The Earl of Caithness: My Lords, I am grateful to the noble Lord for raising the matter and also for the representations that we have received from the National Consumer Council.
Part I of the Housing Act 1988 provided for most new lettings by private landlords, including housing associations, to be assured tenancies. The assured tenancy regime provides long-term securing of tenure with only strictly circumscribed grounds of posssession by the landlord. Be that as it may, it is open to the proposed new landlord to offer the tenant contractual rights additional to those provided in the statute.
The NCC has kindly made available to my department an opinion of counsel it has recently received on this matter. I think that it would be fair to say that the main message to emerge, and one with which I agree, is that, in the highly unlikely instance of a landlord reneging on a contractual undertaking he had publicly given not to exercise a statutory ground of possession, there are good reasons to think that a tenant would be likely to be successful in obtaining a remedy, although there is as yet no directly applicable case law.
I am bound to say that I consider it extremely unlikely that a potential rogue landlord would have had much success in persuading a local authority to agree to sell to him or the Housing Corporation to approve him for tenants' choice. Most, though not all, landlords engaged in these activities are besides likely to be registered housing associations, which are subject to most rigorous monitoring by the Housing Corporation, backed by draconian sanctions in any cases of misconduct or mismanagement. Tenants will besides be very reluctant to entrust themselves to a new landlord unless they are thoroughly satisfied as to his bona fides.
It seems to us a grave mistake to legislate now to provide for a remedy which in all probability would in any event be obtainable in the courts were the situation envisaged ever to arise. If experience were to show, contrary to our expectations, a need for a statutory remedy, that could be considered in all the circumstances of the time and against the background of a real rather than hypothetical case.
I turn to the second of the noble Lord's amendments, No. 202ZA. I hope to persuade him that it is not needed and is inappropriate. It is inappropriate because there are fundamental differences between tenants' choice and voluntary transfers. The main difference which is relevant here is that in the case of tenants' choice the local authority may not be a willing party to the disposal. That is the price one has to pay for giving tenants the right to choose. As a result, it would not be reasonable to expect the local authority to carry out the consultation of tenants or to explain the proposal. That responsibility lies with the applicant landlord. In those circumstances, we have introduced an outside body in the form of the Housing Corporation to oversee the process.
In the case of a voluntary transfer, the involvement of the corporation is not necessary. By definition, the local authority is a willing party. The onus is on the authority to spell out the proposals to tenants. It

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is given that responsibility by Schedule 3A to the Housing Act 1985. A tenant who wants information or assistance can seek it from the authority.
Lord Ross of Newport: My Lords, it is a great pity that we have to raise this matter at 11.25 in the evening. Of course, the Government are satisfied and believe that tenants who transfer have this security. However, it is not quite good enough to rely on that and say, "We think it is all right but we may have to reconsider that situation if the case came before the courts". We have counsel's opinion on this and it cannot lightly be set aside.
I am trying not to be destructive but, rather, constructive. There is no doubt that unless some sort of copper-bottomed guarantee is given, future transfers just will not happen because tenants will be worried, and rightly worried, if counsel is saying—the Government have had the advantage of seeing the opinion though perhaps they have not had very long to study it; I have certainly read it—that there may be a possibility that at some future date they do not have that security.
I am sure the Minister will agree that it is very important that these NFHA agreements and others should be found to hold water. I do not wish to divide the House but I hope the Government will consider what I said and what is in counsel's opinion before Third Reading to see whether or not they can give a further assurance. Who is to meet the cost if a rogue landlord takes somebody to court on this issue? That could be very expensive and there is no way in which the unlucky tenant who thinks he is perfectly safe will be able to fund that. I believe that should be underwritten in some way. I throw that out as a possibility. I wish to be constructive rather than destructive and I hope that the Government will look again to see whether or not they can give a guarantee as regards this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 178 [Security of tenure on ending of long residential tenancies]:
11.30 p.m.
Lord Coleraine Lord Coleraine moved Amendment No. 177D:
Page 165, line 1, after ("a") insert ("contractual").
The noble Lord said: My Lords, this clause deals with the rights of long lessees of flats at the end of their leases. I shall move and speak to two amendments designed to improve this clause and in a further amendment I shall ask your Lordships to omit the clause from the Bill. At this point, I should repeat the declaration of interest which I made on Second Reading. I live in a flat, the lease of which expires in 12 years' time. When your Lordships hear me speak you will realise that I am concerned in the second and third amendments which I shall move but not in the amendment to which I am now speaking.
Clause 178(3) is intended to withdraw from 15th January' 1999 the right of long lessees of flats at low
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rents the protection of the Rent Act when the lease has ended. The clause will make those tenants assured tenants in accordance with the regime set up by the Housing Act 1988. The effect of that will be that market rents will be paid rather than Rent Act fair rents.
The Government say that those provisions are to be postponed until 1999 in order to give a period of adjustment and to take some account of the fact that hefty premiums are paid for the short periods at the end of leases, so that some leases will sustain financial loss if those rights are lost. I consider those arrangements for a period of adjustment to be defective and unfair to lessees.
Section 3 of the Landlord and Tenant Act 1954 provides that at the term date of a lease the tenancy will continue until terminated, and there are other provisions in the Act which provide for termination. It will continue at the previous ground or low rent. At the term date the landlord can consider whether he has grounds to terminate the continued tenancy and obtain possession. If not, he can terminate the continued tenancy and create a Rent Act statutory tenancy. He would then be entitled to a fair rent.
Clause 178(3) provides that a long tenancy in existence on 15th January 1999 will be subjected to the new assured tenancy regime. This was not generally appreciated, but it became apparent during and after the Committee stage debate that this can apply to leases which will have expired long before 1999 just as much as to leases expiring then. It will apply if by that date the landlord has not terminated the continued tenancy to bring about a statutory tenancy.
Circumstances in which a landlord might take what may seem a quixotic action and leave the continued tenancy to run on until 15th January 1999 are when he thinks his best financial interest would be served by foregoing the right to increase from a low rent or a ground rent to a fair rent in the period before 1999, in order to receive much higher market rents after 1999.
Assuming a long lease coming to an end in 1993, the landlord sees a well established, healthy young couple in possession. They are not going to want to move for years to come, so it may well be in the landlord's interest to continue collecting the ground rents for a few years more, in order to be certain of an open market rent from 1999 and for what may be the best part of the tenant's lifetime thereafter.
What this means is that lessees whose leases are going to expire between now and 1999 cannot be certain they will retain their statutory tenancies in 1999. This seems to me altogether undesirable and I should be very surprised if it was really the intention of the Government. My proposal is that only long lessees, whose leases expire on or after 15th January 1999, should be subject to the assured tenancy regime.
It may be that my amendment is defective because of ambiguity as to what is a contractual tenancy in these circumstances. But my noble friend Lord Hesketh is well aware of my concern. If he finds the drafting defective I hope he will offer to take away

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my proposal and come back with his own amendment at Third Reading.
I should remind your Lordships that this clause had its birth in the White Paper preceding the 1988 Housing Act. It then proved too difficult to draft. It has again proved too difficult to be drafted properly for this Bill; nevertheless it is now before us. I mention this because I and others who have studied the Act were not originally aware of the features which I am drawing to your Lordships' attention tonight. I should like to read from the department's explanatory memorandum to the White Paper of 1987 which led to the Housing Act. It said:
"A transitional period of 10 years from the date of commencement is therefore proposed during which Part I of the 1954 Act will continue to apply in its present form to existing long leases on expiry. The new regime will apply to leases expiring after the transitional period".
That is what I am asking the Government for. I beg to move.
Lord Monson: My Lords, having read with extreme care the earlier criticisms of the noble Lord, Lord Coleraine, of Clause 178, made both at Second Reading and at Committee stage, I do at one level very much sympathise with him. But on another level I have to point out that successive governments for almost 75 years have interfered clumsily with the law of contract and with the rather more metaphysical law of supply and demand, insofar as these laws relate to housing. Because of this any major shift in the law is bound to dash somebody's expectations. Those who have such hopes consider them to be legitimate but, objectively speaking, I do not believe that that can be so however much one may sympathise with those who are caught out.
Let us cast our minds back a little more than 20 years. After the introduction of the Leasehold Reform Act 1967, may leaseholders who had paid a pittance for leasehold houses in the expectation that they were buying a wasting asset suddenly found themselves enormously wealthy overnight, following the decision of the then Labour Government to extend leasehold reform from a limited number of working-class, mainly terraced houses in South Wales, to embrace Georgian and Victorian houses in Chelsea, Kensington, Pimlico, Hampstead, Dulwich and so on. One of my close relations by marriage was one of those who benefited enormously from this Act.
The losers were two-fold. The first were those who had sold their leasehold interest just before the Act was introduced in the expectation that they were selling a wasting asset. The second losers were the ground landlords, many of them charities. What I am trying to point out is that there are bound to be random winners and losers. The latter will very understandably feel aggrieved until such time as governments cease to interfere clumsily with the law of contract and the law of supply and demand for housing so that the latter is brought into balance as is the case in most countries in continental Europe.
For all the hardship that this clause inflicts on certain individuals, I believe it is designed to advance towards this goal. So while there may be
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room for minor improvements to the clause, by and large I support it.
Lord Hesketh: My Lords, I am sure it is always good for the erudition of your Lordships' House to have a contribution from the noble Lord, Lord Monson. One matter that I do remember about the Leasehold Reform Act is that even the late Dick Crossman was rather shocked by the probity of it. I recall that fact from reading his diaries this summer for the second time.
This is the first of a series of amendments that my noble friend has tabled relating to the long residential tenancy provisions in the Bill. As my noble friend said, the aim of this amendment is to ensure that only existing long leases whose term date falls on or after 15th January 1999 would be affected by the new provisions. Under the Bill as drafted, the new regime established in Schedule 10 will apply to those existing long tenancies whose fixed term has expired prior to 15th January 1999, but which have not by that date been terminated under the current procedure set out in the Landlord and Tenant Act 1954. It has always been a basic feature of the 1954 Act regime that when the fixed term of a long tenancy expires, the tenancy continues to run on as a long tenancy unless and until brought to an end under the procedure laid down in the Act.
My noble friend has argued that as 15th January 1999 gets closer, there will be an incentive for landlords to delay taking the necessary action to terminate a long tenancy following the expiry of the fixed term because by doing so they will be able to create an assured tenancy rather than a Rent Act tenancy. But I do not regard this as in any way self-evident, bearing in mind that a tenancy remains a long tenancy after the fixed term has expired, with the tenant thus continuing to pay only a low rent until the landlord acts to create a new tenancy. I find it hard to believe that many landlords will be willing to accept a ground rent, which will typically amount to £100 or so per annum, for a significant period in the hope that the market rent will be much higher than the fair rent. It is, of course, impossible to predict what the relationship between fair rents and market rents will be in 1999.
We were of course aware of the point that my noble friend has raised when the Bill was introduced. As I said in Committee, we are satisfied that the transitional provisions that we have written into the legislation will be sufficient to ensure that no existing tenant is unfairly treated by virtue of the changes we are proposing. I hope that, in the light of this, my noble friend will withdraw his amendment.
Lord Coleraine: My Lords, I certainly would not withdraw the amendment in the light of what my noble friend has said. I have put forward what I think is an improvement to the Bill and what would certainly bring it into conformity with the original expressed intentions of the Government and relieve a lot of anxiety on the part of many lessees whose leases are going to expire in the period leading up to 1999. As I have said, I consider that the whole clause should be taken out of the Bill, and in the

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circumstances I would wish to do no more than to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 177E:
Page 165, line 12, at end insert—
("(3A) Subsection (3) above shall not apply to a tenancy if on the date of expiry of the term of years certain of that tenancy, whether before or after 15th January 1999, the tenant or one of the tenants is a person who was at any time before the date of commencement of this section the tenant or one of the tenants under the same tenancy or the spouse of any such person.").
The noble Lord said: My Lords, this amendment is designed to ensure that existing tenants under long leases affected by Clause 178(3) and their spouses do not have their rights taken from them by this clause, irrespective of when their leases expire. It does not seem reasonable that these particular existing tenants should have their personal rights taken away from them on the wholly artificial grounds that their statutory tenancies are not now in existence. This would be, to my way of thinking, unacceptably retrospective legislation.
I would also submit that unless we are to say that an existing statutory tenant is to lose Rent Act protection from 1999 we should not give different treatment to existing long lessees who may be said to be pregnant with Rent Act protection, however long a period of gestation there may be before that Rent Act protection begins.
Only the other day I had a letter from a lady in Kensington. She told me that she and her husband are lessees of a one-bedroomed flat. Their lease expires in 2006, when her husband will be 76 and she will be 61. Her worry was what would happen to them then. Surely it is not reasonable for that couple to be denied Rent Act protection whenever their lease ends, and to be treated less favourably than another person who happens to be a statutory tenant now and perhaps became one by claiming Rent Act protection against an unwilling landlord. I beg to move.
Lord Hesketh: My Lords, this amendment seeks to ensure that existing long residential tenants and their spouses would retain their entitlement to a Rent Act tenancy under Part I of the Landlord and Tenant Act 1954 irrespective of the date on which the long tenancy was brought to an end. If they assigned their tenancy after Clause 178 came into effect the new tenant would be subject to the 15th January 1990 cut-off date for such an entitlement.
As my noble friend has said, the amendment is aimed at protecting the expectations of existing tenants. It would however mean that the new Rent Act tenancies could arise for a very long period indeed—the lifetime of existing tenants and their spouses—because many long leases have periods of 99 years or longer.
As I said in Committee, we entirely accept the need to safeguard the position of tenants with long leases which have only a few years to run, and in particular of those who bought the tail-end of leases at a price which reflects an expectation that they will
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qualify for Rent Act tenancy when the long lease ends. We believe, however, that we should only allow new Rent Act tenancies to arise for finite period, long enough for the people affected to adjust to the new situation and make appropriate arrangements. Our judgement is that the 10-year period that the Bill allows is adequate, which is why we resist my noble friend's amendment.
Lord Coleraine: My Lords, my noble friend is clearly adamant on this point, and, for the same reason as with the previous amendment, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
11.45 p.m.
Lord Coleraine Lord Coleraine moved Amendment No. 177F:
Leave out Clause 178.
The noble Lord said: My Lords, the proposed transfer of tenants under long residential tenancies from the fair rent system to the open market assured tenancy regime from 1999 is a radical change from our long leasehold law and calls for the closest attention of this House. It would amount, in my opinion, to a mischievous destabilisation of the relationship which exists between landlords of flats and their tenants in the sensitive closing years of long leases. It would do this for no compelling reason.
I am sorry to have to say that we have here what seems to me a doctrinaire insistence that a commitment, which I unreservedly share, to making the move from controlled rents to the fixing of rents by market forces must be the one factor which ousts all other relevant considerations; the be-all and end-all of legislative thinking.
I say that this is doctrinaire and destabilising because it would not have effect for nine years and during that period any sane observer of the leasehold scene would surely have expected a government of any complexion to have introduced a comprehensive reform of leasehold law.
The way in which this is presented by my noble friend on behalf of the Government is that the nine-year period is a period of grace for flat owners, reducing their financial loss. I submit that that is a false analysis. It assumes that there would be a case for transferring to the assured tenancy system now. There is no such case. There will be no such case as long as the existing statutory tenancy system on a fair rent basis continues for other statutory tenants; because there is no reason why we should treat long residential tenants less favourably than straightforward Rent Act statutory tenants. If anything, long residential tenants have greater claim to their rights than the others.
I raised the question at Second Reading of why this legislation should be introduced at this time. No answer was given to that question but since then I have had helpful correspondence with my noble friend who has put the Government's position to me. Subsequently in Committee—when the Government at three o'clock in the morning finally introduced this legislation in the form we now have it—my noble friend explained that under the

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provisions of the Landlord and Tenant Act 1954 a tenant may remain in his home when the long tenancy comes to an end as a statutory tenant under the Rent Act 1977.
My noble friend went on to say:
"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".—[Official Report, 11/10/89; col. 506.]
My noble friend was referring to the fact that new tenancies are now to be assured tenancies and that no more statutory tenancies are to be created under the Rent Act. That was all he had to say to justify the Government's proposals. He offered no arguments.
I should add that in reply to the debate my noble friend added the thought that long leases can be for 99 or 999 years. He then told the Committee that to permit all lessees under existing leases to enjoy Rent Act protection would have meant permitting the creation of new Rent Act tenancies on a virtually indefinite basis. If I may borrow my noble friend's turn of speech, that one really is total nonsense, as I shall seek to demonstrate.
Section 1 of the Landlord and Tenant Act 1954 gives to long lessees what is termed the protection of the Rent Act when their leases come to an end. They do not have any specific Rent Act protection other than that which is given to the generality of statutory tenants. No doubt the time will come—and I hope it does—when government decide that Rent Act protection is no longer needed by tenants. When that time comes and rent protection is abolished generally the protection of the Rent Act will automatically be removed from 1954 Rent Act tenants. There will then need to be no discriminational differentiation between them and other statutory tenants.
I remind the House how all statutory tenants were treated on an equal footing in the Housing Act last year. Until then a statutory tenancy could, for the time being, pass twice to relatives following the death of the statutory tenant. Now, by Section 39 of the Housing Act, a statutory tenancy may pass once only. This affected the right enjoyed by the 1954 Act tenants in exactly the same way as it did other statutory tenants and no need was seen then for the erection of an elaborate pile of legislation or to give them nine years in which they were to adjust to their diminished circumstances. Why then, when the time is eventually ripe, should the Government not deal in exactly the same way with fair rents, both for the 1954 Act and for other statutory tenants?
By asking that there should be similarity of treatment between these types of tenancies, noble Lords will see that I am very far indeed from advocating the preservation of rent control into eternity; or for 99 years or, of necessity, even for nine years. It may be that in the normal way no further statutory tenancies can be created under the Rent Act, but these 1954 Act tenants have vested rights which, for the most part, they will have legitimately bought. The proposed legislation will strip many flat owners of rights which have gone with long leases of flats since before the Landlord and Tenant Act 1954. And in the nearly 50 years which have elapsed since then, other factors have
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intervened to reinforce the need to maintain the rights of long lessees under the 1954 Act regime.
The nature of our long leasehold system, the physical differences between a block of flats and a single house, the problems which are inherent during the tail end years of a long lease, all would seem to me to make it irresponsible at this time to step in and disturb a delicate balance by weakening the position of tenants as against their landlords. I remind the House that virtually all these landlords will have acquired their reversion; with full knowledge of the rights of tenants under the 1954 Act. It is well known that many of the owners of short lease reversions in London are speculators.
There is the difficulty with the last years of a lease of a flat—I am talking of a remaining term which may be as long as five years—that it cannot easily be mortgaged but in many parts of London may easily cost£100,000 for a 10 or 15-year lease. At the same time, there is the accruing and accrued liability to pay for the building to be put into tenantable repair at the end of the lease, but the provisions for the repair of the block may be vexatious or badly expressed.
This liability for repairs is nowhere near so serious in the case of lessees of houses. A long lessee of a house is the master of his own fortunes when it comes to carrying out the necessary repairs. In addition he has had since 1967 the right to enfranchise under the Leasehold Reform Act. The tenants of flats are in a totally different position. The landlord will usually be responsible for carrying out repairs and the tenants have only a limited say as to what repairs are carried out, when they are carried out, or at what cost. There are landlords who do net carry out repairs, hoping in this way to persuade their tenants either to surrender their leases or buy long terms. These tenants have to live with the likelihood that, when the repairs are finally carried out, it will be they, the tenants, who will have to foot the bill for the increased cost which will have resulted from the delay. Flat owners do not have —but it is widely recognised that consistency would demand that they should have —a fair claim to be given the same right to enfranchise as was given to long residential tenants of houses under the 1967 Act. So the clause is to be regretted also because it takes away rights from flat owners when fairness and consistency of legislation suggest that their rights should be protected and enhanced rather than diminished.
I have explained that this clause would not come into effect for nine years, but for nine years it would add to the problems facing flat owners. I ask my noble friend to take it away and not to proceed further with it. I put it to him that this clause is deeply offensive to many flat owners. To omit it now might be a prudent exercise in damage limitation. The clause is an irrelevance. It is no more than a theoretical exercise in free market economics. It achieves nothing of present significance beyond the creation of ill will and concern and some destabilising of the landlord and tenant relationship.
I know that for some two years a great deal of time and energy has been expended in the department in bringing before us what we have now. But on the

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other hand, I should like to give the Government an opportunity not to shoot themselves in the foot. After all—and I offer my noble friend this thought—if you are in danger of shooting yourself in the foot, the prudent course is to put the gun away. I suggest that to change into iron boots should be the less preferred course of action. I beg to move.
Lord Hesketh: My Lords, I fear that if I shot myself in one foot then I might have to shoot myself in the other.
My noble Friend has argued that Clause 178 should be deleted from the Bill, because it will not have any effect until 1999, and well before then legislation should be introduced to reorganise comprehensively the law as it relates to residential leasehold property.
The Government are, of course, well aware of the concerns to which my noble friend referred. The Nugee Committee was set up in 1984 to investigate the problems of leasehold blocks of flats, and its report provided a thorough and useful description of those problems and proposed a range of measures to deal with them.
The Government accepted almost all of the report's recommendations, and they formed the basis of the Landlord and Tenant Act 1987. Residential leaseholders now have a right of first refusal when blocks of flats are sold; they enjoy significantly strengthened rights to consultation over service charges and insurance arrangements; and we have provided them with stronger remedies against inadequate management. These provisions came into force only relatively recently. The Department of the Environment proposes to carry out research into the effects of the legislation next year, and we clearly need to have the results of that before we can decide whether anything more needs to be done.
In addition to this legislation, the Government have accepted the Law Commission's recommendations on the creation of a completely new form of ownership to be known as commonhold. Legislation to give effect to this is being prepared. We do not yet know, however, when the legislation will be introduced. And final decisions on its form, including the question of whether leaseholders should have a right to switch to commonhold against the wishes of their landlord, have still to be taken. My noble and learned friend the Lord Chancellor will make an announcement about all this in due course.
Your Lordships will see, therefore, that the prospect of further legislation on leasehold matters is uncertain. Clearly, if such legislation is introduced, it will have to take account of the existing law, including this clause and the related schedule. But I do not believe that these provisions, which are essentially consequential on the introduction of the assured tenancy regime in the Housing Act 1988, should be held on ice until decisions on these wider questions about the future of the leasehold system are taken. For these reasons, we resist my noble friend's amendment.
Lord Coleraine: My Lords, I was interested in my noble friend's digression into the history of the Nugee Committee report, the 1967 Act and the Government's acceptance of the idea of commonhold. I do not think that they have very much to do with the issue before the House tonight, but, in the absence of any support and in view of the lateness of the hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 10 [Security of Tenure on Ending of Long Residential Tenancies]:
Lord Hesketh Lord Hesketh moved Amendments Nos. 178 and 179:
Page 253, leave out lines 13 and 14.
Page 253, line 44, at end insert—
(""undisputed terms" shall be construed in accordance with paragraph 11(1A) below").
The noble Lord said: My Lords, these are technical amendments to Schedule 10. I beg to move.
On Question, amendments agreed to.
Lord Coleraine Lord Coleraine moved Amendment No. 179A:
Page 255, line 6, at end insert ("and specifies particulars of any such ground or grounds").
The noble Lord said: My Lords, I have received advice from SHAC as regards this and the following group of amendments. I should say that we are interested in exploring whether in the transfer of long leasehold tenants to the assured tenancy regime there is any possibility of tenants dropping, or being pushed, through the net and out of protection altogether.
This amendment affects paragraph 4(6) of Schedule 10, which deals with the termination of tenancies by the landlord on various specified grounds. When a landlord wants to recover possession from a long leaseholder holding over after the lease has ended, a notice must be served terminating any continuing tenancy which has arisen by virtue of the schedule. The notice must inform the former leaseholder about the ground, or grounds, of possession the landlord proposes to rely upon in court.
There is, however, no requirement that the notice to resume possession must state details or particulars of the grounds; for example, the amount of rent arrears or the particular obligation of the tenancy which has been broken. The amendment ensures that particulars of any grounds raised are stated in the notice.
The requirement to give details of any grounds alleged applies where a landlord serves a notice seeking possession against an assured tenant under the Housing Act 1988. There is no reason in principle that I can see why that should not apply also where a landlord seeks possession against a former long leaseholder under the new regime. I beg to move.
Lord Monson: My Lords, having been rather lukewarm over the previous amendments moved by

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the noble Lord, Lord Coleraine, I have to say that there is a great deal to be said for this series of amendments.
12 midnight.
Lord Hesketh: My Lords, as my noble friend has said, the amendment relates to the form of the notice that the landlord must serve if he wants to secure possession of the dwellinghouse when the long tenancy comes to an end. Under paragraph 4(5)(b) the notice must state the ground or grounds on which he proposes to apply to the courts for possession.
As with many other aspects of Schedule 10, paragraph 4(5)(b) mirrors the equivalent provision in the Landlord and Tenant Act 1954—in this case Section 4(3)(b). That provision does not require particulars of the ground to be stated.
I appreciate that, following pressure in the House during the passage of the Housing Act 1988, a provision requiring particulars to be stated was written into the provisions relating to notice of proceedings for possession of dwelling houses let on assured tenancies. As I have said, the general precedent that we have followed in Schedule 10 is that of the 1954 Act rather than the 1988 Act.
I should point out, however, that under paragraph 4(1) of Schedule 10 my right honourable friend is required to prescribe the form that a notice to resume possession must take. The prescribed form will require the landlord to state the particulars of each ground under which he intends to seek possession, so the point that the amendment addresses wiil be fully met, albeit by secondary rather than primary legislation.
I hope that in the light of that reassurance my noble friend will withdraw his amendment.
Lord Coleraine: My Lords, I am considerably reassured by what my noble friend said. I should still have thought that the Government could give consideration to looking not so far back as the 1954 Act when they come to deal with this point. The precedent in the 1988 Act is clear and it should be written on to the face of the Bill. Nevertheless, I am grateful to my noble friend for his assurance. I shall read what he said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendments No. 180 to 192:
Page 258, leave out lines 51 to 53 and insert ("and").
Page 259, line 5, at end insert—
("(1A) Where, under paragraph 10(2) above, a tenant's notice is referred to a rent assessment committee, any reference in this Schedule to the undisputed terms is a reference to those terms (if any) which —

(a) are proposed in the landlord's notice or the tenant's notice; and

(b) do not relate to the amount of the rent; and

(c) are not disputed terms.").

Page 259, line 14, leave out ("agreed") and insert ("undisputed").
Page 259, line 19, leave out ("agreed") and insert ("undisputed").
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Page 259, line 23, leave out ("agreed") and insert ("undisputed").
Page 259, line 38, leave out ("agreed") and insert ("undisputed").
page 259, line 41, leave out ("agreed") and insert ("undisputed").
Page 260, line 3, after ("(a)") insert ("if the committee decide that there are no disputed terms and that there is no dispute as to the rent, paragraph 10(2)(b) above shall apply as if the notice had not been so referred;
(b) where paragraph (a) above does not apply then, so far as concerns the amount of the rent under the tenancy, if there is a dispute as to the rent").
Page 260, line 5, leave out ("or") and insert ("and").
Page 260, line 9, leave out ("(b) the agreed") and insert—
("(c) where paragraph (a) above does not apply and there are disputed terms, then, so far as concerns the subject matter of those terms, the terms determined by the committee under sub-paragraph (2) above shall be term s of the tenancy and, so far as concerns any undisputed terms, those").
Page 260, line 10, after ("shall") insert ("also").
Page 260, line 35, leave out from first ("of ") to ("are") in line 36 and insert ("paragraph 11 above, what the disputed terms").
Page 260, leave out lines 41 to 45.
On Question, amendments agreed to.
Lord Coleraine Lord Coleraine moved Amendment No. 192A:
Page 263, line 28, after second ("of ") insert ("or includes").
The noble Lord said: My Lords, the amendment seeks to amend paragraph 16(1) of Schedule 10. The paragraph is designed to ensure that leaseholders do not lose security of tenure on the expiry of a long lease by taking periodic tenancies at a low rent. Paragraph 16 provides that whatever the length of the new tenancy, it will be deemed to be a long tenancy if the property let under the new tenancy consists of the whole or any part of the property let under the previous tenancy.
It is easy to envisage a situation where a landlord approaches a tenant and says, "If you will give up that inconvenient bedroom, you will have a new lease and you will have this larger bedroom". If the tenant, who will no doubt not ask for or receive advice, accepts that kind offer of a new tenancy, the protection will go entirely. The amendment seeks to extend the existing safeguard contained in the Bill to cover that situation. I beg to move.
Lord Hesketh: My Lords, as my noble friend has said, the amendment relates to paragraph 16 of Schedule 10, which deals with new tenancies at a low rent granted to the same tenant on the ending of a long tenancy at a low rent. In essence, paragraph 16 is aimed at ensuring that such tenants do not lose the protection afforded by the schedule if they take on such new tenancies.
As I said in Committee, Schedule 10 is modelled closely on the provisions in the Landlord and Tenant Act 1954 that it will replace. Paragraph 16 of the schedule is the direct equivalent of Section 19 of the 1954 Act. Section 19 also uses the phrase,
"the whole or any part of the property",
I am not aware that the sort of problems which my noble friend has referred to have arisen in relation to Section 19. If there have been no problems where landlords are faced with Rent Act tenancies at so called "fair rents" —artificially suppressed below market level —why should they arise under the

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schedule, where landlords will be able to charge market rents once assured tenancies are created?
There are three further points that I should make. The first is that under the schedule tenants who remain in occupation after their long tenancies are brought to an end will do so as assured tenants paying market rents. Since landlords will be receiving a reasonable return on their investment, it is hard to see why they should be determined to avoid such tenancies arising.
The second is that I find the whole notion of landlords of blocks of flats having spare rooms sitting empty which they can add to flats when they bring long tenancies to an end not entirely possible. The third is that people buying property on long leases will almost always employ solicitors to handle the transaction. They are therefore much more likely to seek legal advice when their landlord offers them a new tenancy than are ordinary protected or assured tenants. Their advisers will be able to tell them if the landlord's proposals are unsatisfactory. I hope that in the light of these comments my noble friend will be able to withdraw his amendment.
Lord Coleraine: My Lords, my noble friend seems to assure the House that there are no loopholes here to be closed. I shall obviously have to read what he has said in order to see whether I agree. Nevertheless, if there are loopholes, it may be the case that paragraph 16 is in similar terms to the equivalent provisions of the Landlord and Tenant Act 1954. But that does not seem to me to be a good reason for not blocking a loophole if one exists. However, in the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 192B:
Page 264, line 6, after ("17") insert ("(1)").
The noble Lord said: My Lords, paragraph 17 of Schedule 10 allows landlords and leaseholders to agree prior to the termination of the long lease on the grounds of a future tenancy that there shall be a future tenancy at a rent other than a low rent and otherwise on terms to be agreed between the parties, as I understand it.
There is no requirement that the new tenancy must be an assured tenancy or that it may not be an assured shorthold or that the mandatory grounds for possession cannot be brought into play by the landlord. As drafted, paragraph 17 opens up the possibility that landlords may seek to persuade tenants to take on new tenancies on the expiry of long leases which will have no or very little security of tenure because, for example, they are shortholds.
To create an assured shorthold tenancy, or to use grounds 1 to 5 of the mandatory grounds for possession against assured tenants, notice must be given to the tenant before the grant of the new tenancy. It need not be given before the parties enter into the agreement to create the new tenancy. For example, the parties could agree that a weekly tenancy be granted to the tenant when the long lease ends. Subsequently, shortly before the tenancy is
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actually granted, the landlord may give to the tenant written notice that the property may in future be required as the only or main home of himself or his spouse. By so doing he makes this mandatory ground available in future to himself.
Similarly, the parties could agree that the term at the end of the long lease should be the grant of a one-year lease. Subsequently, shortly before the tenancy is actually granted the landlord can give the tenant a notice that the new tenancy is to be a shorthold, thus ensuring that the tenant can be evicted without any grounds for possession being proved once the one-year fixed term has expired. I feel sure that these possibilities were not within the contemplation of the Government when this schedule was drafted. The amendment seeks to preserve the leaseholder's security by ensuring that the new tenancy must be an assured tenancy which is not a shorthold and that the landlord cannot bring into play the mandatory grounds for possession, I to 5. I beg to move.
Lord Hesketh: My Lords, I think I am correct in saying that my noble friend also spoke to Amendments Nos. 192C and 192D. These amendments relate to paragraph 17 of Schedule 10 which disapplies the schedule in cases where the landlord and tenant agree to the grant of a new tenancy which is not at a low rent. If the parties agree such a tenancy, they obviously do not need to invoke the provisions of the schedule aimed at establishing one.
As my noble friend has said, under paragraph 17 of the schedule as drafted, the landlord and tenant can agree to an assured or an assured shorthold tenancy. But the crucial word is "agree". If the tenant does not want to accept the tenancy that the landlord offers him, he is free to refuse it and will then retain the protection afforded by Schedule 10. If the landlord wants to create an assured shorthold, he has to serve the prescribed shorthold notice before the tenancy is entered into. That notice states clearly that the landlord may have the right to repossession when the fixed term expires and it tells tenants to get advice if they do not understand it. So tenants will have clear notice of what they are being offered.
As I said in relation to the previous amendment, long leaseholders will almost certainly have employed solicitors when they entered into their leases and are therefore likely to take legal advice when the term date approaches and the landlord starts to take steps to set up a new arrangement. I do not believe, therefore, that tenants will be cheated out of their rights in the way that has been suggested.
My noble friend also argued that paragraph 17 should be amended so that the schedule's provisions will be disapplied only if the landlord offers an assured tenancy in respect of which possession will not be recoverable under grounds 1 to 5 of Schedule 2 to the 1988 Act. Grounds 2 to 5 are clearly irrelevant to the case where the dwelling-house has previously been let on a long tenancy. Ground 1 is very unlikely to be relevant as the landlord would have had to have occupied the dwellinghouse as his only or principal home at some time before the long tenancy began. As my noble friend will appreciate,

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in most cases the landlord will be a company or a trust rather than an individual and could not therefore satisfy this requirement. But if such a case were to arise, the landlord could only be confident that he would be able to use ground 1 if he served written notice before the tenancy was entered into. So again the tenant will have notice of what is proposed and does not have to agree if he does not like it.
I hope that in the light of what I have said my noble friend will feel able to withdraw his amendment.
Lord Coleraine: My Lords, I wish to clarify something between myself and my noble friend. In dealing with mandatory ground 1 he said that on the rare occasions, as he put it, where the landlord was not a company or a trust and ground 1 might apply—that is to say, the notice might be given that the resumption of possession was needed for the landlord's family—the tenant would have to have notice of this. The point I have been making is that the tenant would receive the notice after the agreement had been reached to have the extended term or the new tenancy at the end of the long lease. So it does not appear to me to be helpful to suggest that the tenant gets this notice when my complaint has been that he gets the notice too late.
My noble friend suggested that in most cases a tenant in the situation we are describing would have the benefit of a solicitor's advice. However, speaking as a solicitor myself I do not think one should legislate on the basis that a solicitor's advice Nv!1 be obtained on all occasions. However, my noble friend had a lot to say about the amendment and I shall obviously need to read very carefully what he has said when Hansard is published. Unless he has any further comments to make on the question of the notice in connection with mandatory ground 1, I beg leave to—
Lord Hesketh: My Lords, speaking with the leave of the House, notice would have to be served before the assured tenancy is created, as I understand it.
Lord Coleraine: My Lords, my point is that the landlord can agree with the tenant that at the end of the long lease another tenancy will be created. The trouble is that there is a period between the agreement and the creation of the new tenancy in which the landlord can spring upon the tenant the fact that mandatory ground 1 may be applied. Nevertheless, I am sure that we shall look at the question again if need be. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 192C and 192D not moved.]
12.15 a.m.
Schedule 11 [Minor and Consequential Amendments]:
Lord Hesketh Lord Hesketh moved Amendment No. 193:
Page 269, line 8, at end insert—
("The Social Work (Scotland) Act 1968.
For paragraph 8 of Schedule 3 to the Social Work (Scotland) Act 1968 (expenses of children's panel members) there shall be substituted the following paragraph—
"8. A local authority may pay—

(a) to a member or possible member of the children's panel;

(b) to a member of the Children's Panel Advisory Committee

such allowances as may be determined by the Secretary of State; and he may determine differently in relation to different cases or classes of case.".)
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 193A:
Page 269, line 15, at end insert—
("Local Authority Social Services Act 1970.
15A. In section 2(1) of that Act, after "a social services committee" there shall be inserted "or sub-committee".")
The noble Lord said: My Lords, in speaking to Amendment No. 193A I should like to speak also to Amendments Nos. 195A and 195B.
With the leave of the House, I should like to make a technical change to tidy up Amendment No. 193A, on the advice of parliamentary counsel. Where it reads:
"15A. In section 2(1) of that Act,"
under the heading:
"Local Authority Social Services Act 1970",
it would clearly be proper to say:
"15A. In section 2(1) of the Local Authority Social Services Act 1970, after 'a social services committee' there shall be inserted 'or sub-committee'."
In other words, instead of "that Act" it should read:
"the Local Authority Social Services Act 1970".
I should like to move the amendment with that alteration to it.
At Committee it was agreed, in connection with my Amendment No. I 84ZB, that it was right that local authorities should follow the very sensible and practical practice of appointing all of their committees and sub-committees at the first meeting of the council in each municipal year., instead of pretending that the sub-committees are appointed by the committees and leaving it till later in the year so that nobody knows whether they are a member of a committee or not. The three amendments tidy up aspects of committee appointment which we neglected to deal with at Committee stage. I beg to move.
Lord Reay: My Lords, the noble Lord, Lord McIntosh, has explained fully the purpose of the amendments. There are some minor drafting changes which we would wish to make at a later stage. In the meantime we are happy to accept the amendments as a useful extension of the provisions which the noble Lord introduced at Committee.
Lord McIntosh of Haringey: My Lords, I thought that I had made the drafting change, on the advice of parliamentary counsel. However, I am happy

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to move the amendment on whatever terms are acceptable.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 194:
Page 269, line 33, at end insert —
(". In section 94(5)(b) of that Act (allowances not to be treated as pecuniary interests), after the word "below" there shall be inserted the words "or under any scheme made by virtue of section (schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 195:
Page 269, line 33, at end insert —
("18A. In subsection (6) of section 97 of the Local Government Act 1972 (exclusion of disability from speaking and voting by reason of small shareholdings), for £1,000 there shall be substituted £5,000.").
The noble Lord said: My Lords, in the absence of my noble friend Lord Rippon, I should like to move Amendment No. 195. I beg to move.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Rippon, had taken great care to ensure that I would be here to move that amendment. I take deep offence at this "insult".
Lord Monson: My Lords, the noble Lord, Lord Rippon, had not taken any care whatsoever to ensure that I was here. However, I was on the point of leaping to my feet to move his amendment in the absence of anyone else rising to do so. It is a very sensible amendment. The retail price index has increased a good deal more than five fold since 1972, whichever month in that year one happens to choose. The amendment is therefore not only logical and sensible but, if anything, somewhat modest. I am delighted that the Government have moved it for us.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 195A and 195B:
Page 270, line 3, leave out ("and")
Page 270, line 6, at end insert—
("(c) in subsection (4), after "may appoint a committee" there shall be inserted "or a sub-committee; and
(d) in paragraph (b) of subsection (4), before "may appoint"
there shall be inserted "(in the case of a committee)" ").
The noble Lord said: My Lords, I have already spoken to Amendments Nos. 195A and 195B. I beg to move the amendments en bloc.
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 196:
Page 270, line 6, at end insert —
(". Sections 173 and 173A of that Act (attendance allowance and financial loss allowance) shall be amended as follows—

(a) for the words "local authority", wherever they occur, there shall be substituted "parish or community council";

(b) in subsection (3) of each of those sections, for the word "authority" there shall be substituted "council"; and

1532

(c) for the words "body to which this section applies" in subsection (4) of section 173 there shall be substituted "parish or community council".

In section 175 of that Act (allowances for conferences and meetings)—
(a) in subsection (I) (allowances payable), for the words from "allowances in the nature of onwards there shall be substituted "allowances in the nature of an attendance allowance and an allowance for travelling and subsistence, as they think fit.
(1A) Payments made under subsection (1) above shall be of such reasonable amounts as the body in question may determine in a particular case or class of case but shall not exceed—

(a) in the case of payments of an allowance in the nature of an attendance allowance, such amounts as may be specified in or determined under regulations made by the Secretary of State; and

(b) in the case of payments of an allowance in the nature of an allowance for travel and subsistence in respect of a conference or meeting held in the United Kingdom, such amounts as may be specified under section 174 above for the corresponding allowance under that section;

and regulations made by the Secretary of State may make it a condition of any payment mentioned in paragraph (a) above that, in the financial year to which the payment would relate, the aggregate amount which the body in question has paid or is already liable to pay in respect of any prescribed allowance or allowances does not exceed such maximum amount as may be specified in or determined under the regulations."
(b) in subsection (3B) (conferences to which section applies in relation to joint boards and committees), for the words "such body as is mentioned in section 177(1)(d) or (e) below" there shall be substituted the words "body which is a joint board, joint authority or other combined body all the members of which are representatives of local authorities".
—(1) Subsection 177 of that Act shall be amended as follows.
(2) For sub section (1) (bodies to which sections 173 and 175 apply) there shall be substituted the following subsection—
"(1) Subject to paragraph 4 of Schedule 2 to the Education Act 1980 (application of certain allowances to appeal committees), sections 174 and 175 above apply —

(a) to the bodies specified in section 19 (1) of the Local Government and Housing Act 1989, except—

(i) the Common Council;

(ii) a body established pursuant to an order under section 67 of the Local Government Act 1985 (successors to residuary bodies); and

(iii) without prejudice to section 265 below, the Council of the Isles of Scilly;

(b) to any prescribed body on which a body to which those sections apply by virtue of paragraph (a) above is represented; and

(c) to any parish or community council."

(3) For subsection (2) (meaning of "approved duties") there shall be substituted the following subsection—
"(2) In sections 173 to 176 above 'approved duty' in relation to a member of a body, means such duties as may be specified in or determined under regulations made by the Secretary of State."
(4) In subsection (4) (members not excluded from discussion of allowances), at the end there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".
In section 178(2) of that Act (regulations with respect to allowances), for the words "177 or 177A" there shall be substituted "or 177".").
On Question, amendment agreed to.
[Amendment No. 197 had been withdrawn from the Marshalled List.]
Lord Hesketh Lord Hesketh moved Amendments Nos. 198 to 200:
Page 270, line 31, leave out from beginning to ("(recording)") in line 41 and insert—
(".In section 38(4)(b) of the Local Government (Scotland) Act 1973 (allowances not to be treated as pecuniary interests) after the word "Act" there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989."
In section 47 of that Act (allowances for conferences and meetings)—
(a) in subsection (1) (allowances payable), for the words from "allowances in the nature of" onwards there shall be substituted "allowances in the nature of an attendance allowance and an allowance for travel and subsistence, as they think fit.
"(1A) payments made under subsection (1) above shall be of such reasonable amounts as the body in question may determine in a particular case or class of case but shall not exceed—

(a) in the case of payments of an allowance in the nature of an attendance allowance, such amounts as may be specified in or determined under regulations made by the Secretary of State; and

(b) in the case of payments of an allowance in the nature of an allowance for travel and subsistence in respect of a conference or meeting held in the United Kingdom, such amounts as may be specified under section 46 above for the corresponding allowance under that section;

and regulations made by the Secretary of State may make it a condition of any payment mentioned in paragraph (a) above that, in the financial year to which the payment would relate, the aggregate amount which the body in question has paid or is already liable to pay in respect of any prescribed allowance or allowances does not exceed such maximum amount as may be specified in or determined under the regulations.
(b) in subsection (3A) (conferences to which section applies in relation to joint boards and committees), for the words "such body as is mentioned in section 49(1)(c) or (d) below" there shall be substituted the words "body which is a joint board, joint authority or other combined body all the members of which are representatives of local authorities".
—(1) Section 49 of that Act shall be amended as follows.
(2) For subsection (1) (bodies to which sections 46 and 47 apply) there shall be substituted the following subsection —
"(1) Sections 46 and 47 above apply—

(a) to the bodies specified in section 19(2) of the Local Government and Housing Act 1989; and

(b) to any prescribed body on which a body to which those sections apply by virtue of paragraph (a) above is represented.".

(3) For subsection (2) (meaning of "approved duties") there shall be substituted the following subsection —
"(2) In sections 46 to 48 above "approved duty", in relation to a member of a body, means such duties as may be specified in or determined under regulations made by the Secretary of State.".
(4) In subsection (4) (members not excluded from discussion of allowances), at the end there shall be inserted the words "or under any scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989".
In sub-paragraph (1) of paragraph 7 of Schedule 7 to that Act").
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Page 271, line 22, at end insert—
("In section 4 of the Local Government (Scotland) Act 1975 (valuation appeal committees) after subsection (7) there shall be inserted the following subsection—
"(7A) There shall be paid to members of a valuation appeal committee and to members of a local valuation panel such allowances as may be determined by the Secretary of State".").
Page 271, line 23, leave out ("the Local Government (Scotland) Act 1975") and insert ("that Act").
On Question, amendments agreed to.
[Amendment No. 200A not moved.]
Lord Reay Lord Reay moved Amendment No. 201:
Page 272, line 10, leave out from ("subsection") to end of line 12 and insert ("(1) after the word "officer" there shall be inserted "or other person".").
The noble Lord said: My Lords, this amendment applies to registers of local authority loan instruments maintained under Clause 43 and certain standard provisions relating to registers. They follow the corresponding provisions in the Companies Act. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 202:
Page 273, line 6, at end insert —
("The Education (Scotland) Act 1980
In Schedule Al to the Education (Scotland) Act 1980, for paragraph 9 there shall be substituted the following paragraph—
"9. There shall be paid to members of an appeal committee constituted in accordance with this Schedule such allowances as may be determined by the Secretary of State.").
On Question, amendment agreed to.
[Amendment No. 202ZA not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 202A:
Page 274, line 31, at end insert—
("51A. 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: My Lords, at an earlier stage of the proceedings an amendment in comparable terms was moved by the noble Lord, Lord Ross, but it was rejected by the Government. The purpose of this amendment is to ensure that those with suspended possession orders against them do not lose their rights as secure tenants until eviction, rather than when the suspended order is broken. On previous occasions we have drawn on the experience and the policy of the London borough of Redbridge, which was one of denying a right to consultation to those with suspended possession orders against them in connection with a proposed voluntary transfer to a newly created housing association.
I must tell the House that I am now advised that on 23rd October—in other words, at the beginning of this week—at a meeting of that council's housing committee, officers admitted that the right to

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consultation had been denied to all those with outstanding possession orders against them. They did not know in the case of specific individuals whether the suspended possession order had been broken; nor had they considered whether in the case of specific individuals a new tenancy might have been granted by the payment and acceptance of rent after the suspended order had been broken. On that occasion, the committee decided to withdraw those properties from the sale where there were outstanding possession orders and to consider what to do in respect of those properties at a later time.
I am sure that both the Minister and the House are aware that we are dealing with people in wretched circumstances who should be given not only the benefit of the doubt but every consideration in those circumstances. The purpose of the amendment is to redress that situation. I beg to move.
Lord Hesketh: My Lords, where there is a secure tenancy and the landlord has obtained an order for possession which has been suspended on certain conditions, the tenancy comes to an end on the day when the tenant first commits a breach of the conditions. The effect of the amendment would be to cause a secure tenancy to end on the date of execution of the order for possession. So the tenant would retain for a longer period the rights and obligations which a secure tenancy implies, such as the right to buy and the right to vote in any ballot about a voluntary transfer of housing stock from a local council to some other landlord.
I believe that the present position is the right one and that this change is both inappropriate and undesirable. If tenants do not fulfil conditions placed on court orders—and those most commonly relate to payment by instalments of rent arrears—we must ask the question whether that group of tenants ought to have the right to buy or the right to vote to change landlord. Could they afford a mortgage or the rent of a different landlord if they cannot meet the debts as required by the court? I would suggest not.
Furthermore, it does not necessarily follow that, in the event of a breach, the landlord will immediately apply for the possession order to be executed and, in appropriate circumstances, the conduct of both parties might lead to a new secure tenancy arising. It is difficult to generalise on this point since the behaviour of both parties will vary from case to case. But it has to be recognised that, in some circumstances, the amendment would not have an effect. I urge the noble Lord, Lord Graham, to resist the temptation of his amendment.
Lord Graham of Edmonton: My Lords, the Minister invites me to resist the temptation of my own amendment. That is a difficult process at any time and certainly at twenty-five minutes past midnight.
The Minister makes a fair point that one who is aware of all the circumstances, all the rights and obligations, in effect has his eyes wide open and knows what happens when he takes steps which put
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him on the wrong side of the law. In fact, I mentioned what had happened in the London borough of Redbridge only this week. I think that that is very significant in the context in which I raised the matter.
But I am sure that the Minister will not give way on this matter tonight. He said that it was right and proper that the present situation should prevail. I take the opposite view. However, I shall not press the issue tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chairman of Committees (Lord Aberdare): My Lords, perhaps I may revert for a moment to Amendment No. 198. I put it in the terms of the amendment as printed. In fact there is a printing error. The amendment should read:
"Page 270, line 31, leave out from beginning to ("(recording)") in line 32".
It should not read "line 41".
With that correction I hope that your Lordships will allow acceptance of the amendment to stand.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202AA:
Page 274, line 31, at end insert—
("51A. 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 raise this matter again as I did in Committee. It deals with the matter of trading down where council tenants perhaps living in property with rather more accommodation than they need give up possession and move to a smaller property.
In this amendment one seeks to make sure that those who happen to live with that particular tenant do not lose any of their rights. In rejecting the amendment previously, the noble Lord, Lord Hesketh, on behalf of the Government, said that 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. He said that it would open the door to abuse, undermining the principle that tenancies should be allocated so far as possible on the basis of need. With respect, I suggest that that is not the case.
The person wishing to succeed to the tenancy would still have to satisfy the landlord or the court that he or she was living in the property and that it was his or her only or main home at the time of the tenant's death. Accordingly it is hard to see how there could be any more room for abuse than there is under the current law or that the principle of allocating tenancies on the basis of need would be undermined. The potential successor would also have to satisfy the landlord or the court that he or she had lived with the tenant in the 12 months up to the tenant's death, the only difference being that it need not be at the property itself. I beg to move.
Lord Hesketh: My Lords, the noble Lord, Lord Ross, tabled a similar amendment during Committee

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stage. He will not be surprised to learn that my view is the same now as it was then. The effect of Amendment No. 202AA would be that, to succeed to a secure tenancy, a member of the tenant's family no longer has to reside in the dwelling 12 months prior to the tenant's death but merely has to have resided anywhere with the tenant for a minimum of 12 months.
As drafted, the amendment would enable a partner who had never lived in the property to succeed to the secure tenancy of a tenant who had been absent from the home for a year while retaining it as his principal home. I am afraid that that would open the door to abuse and would lead to minimal conditions for justifying succession to a secure tenancy. These in my view would be too slight. And I believe that, in needy cases—say, where children were involved—the landlord would allow the family to stay on.
In the light of those remarks, I hope that the noble Lord, Lord Ross, also will be able to resist the temptation of his amendment.
Lord Ross of Newport: My Lords, it seems to me that I heard the same remarks about a week ago. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.30 a.m.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202AB:
Page 274, line 31, at end insert—
("51A. In section 89 of the Housing Act 1985 (succession to periodic tenancy) after subsection 2(b) there shall be inserted the following paragraph—
"(2)(c) of two or more spouses of the tenant such one of them as may be agreed between them or as may, where there is no such agreement, be selected by the court."").
The noble Lord said: My Lords, at least on these Benches we try! The amendment seeks to remove the distinction between spouses and cohabitees, thus allowing the cohabitee to succeed to the secure tenancy without having to clock up the minimum period of 12 months. It also means that the cohabitee of an unmarried tenant would be given preference over other members of the tenant's family in the decision about who can succeed. Where two or more people claimed to be the tenant's spouse, the court would select who was to succeed in the event of a dispute. I raised the matter earlier but we have now concluded the discussion about the courts.
In Committee the noble Lord, Lord Hesketh, stated:
"We have no evidence that this situation has presented a problem for secure tenancies in the past".
Whatever may have been the position in the past, cohabitation is clearly a growing phenomenon and it is only right that the law should not discriminate against cohabitees in this area, as it does not do so in deciding succession rights of assured tenancies under the Government's own Housing Act 1988. I beg to move.
Lord Hesketh: My Lords, the amendment would provide for a dispute between two or more spouses over succession to a secure tenancy to be settled by the courts. I am not aware that there have been disputes over successions to secure tenancies. It is not an issue that has been raised with us by local authority associations. I can see that the courts would be the natural forum to settle disputes but I cannot see in practice that we shall need to give them this extra duty. I am of course prepared to look at any evidence of problems that the noble Lord may care to send me. But I am afraid that at the moment I cannot accept the amendment.
Lord Ross of Newport: My Lords, with that invitation, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 202B:
Page 275, line 2, at end insert—
("53A. In section 131 of the Housing Act 1985 (limits on amount of discount), there shall be added after sub-section (3) the following subsection—
"3A) Any determination under sub-section (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: My Lords, the amendment seeks to protect the position of a non-charitable housing association which transfers one of its secure tenants or one of its assured tenants with a preserved right to buy to a property provided partly or fully by private finance should that tentant subsequently exercise right to buy. The amendment was withdrawn at Committee stage for consideration of the Government's response.
Under Section 35 of the Housing Act 1988 a secure tenant of a housing association who transfers to another property owned by the same association is entitled to retain their secure tenancy. For a non-charitable housing association this also means that the secure tenant retains the right to buy that property at a discount under the Housing Act 1986. Similarly, former public sector secure tenants whose properties are transferred to a housing association retain their preserved right to buy even if they transfer to another property owned by the association.
Changes in the funding regime for housing associations mean that many new properties are provided either wholly by private rather than public funding or by a mixture of public and private funding. Existing provisions to limit the amount of discount available to tenants exercising their right to buy were established prior to any substantial use of private funding by housing associations and prior to transfers of public sector housing stock to other landlords.
The current cost floor rules were drawn up in 1984. The calculation of the cost floor, established to ensure that the discount to which the tenant is entitled does not reduce the selling price of the dwelling below its cost of provision, does not take

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account of private sector funding. The noble Lord, Lord Hesketh, stated in Hansard at col. 453 on 11th October that,
"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 improvements".
The current Housing Corporation circular, issued in 1985 but still the only guidance to housing associations, is quite clear. It tells associations to exclude from cost floor calculation all cost not funded by public subsidy. This quite clearly excludes the private funding together with associated cost such as deferred interest payments or penalties for early redemption of the loan.
At present housing associations run the risk of facing a substantial underfunded loss unless the existing rules are changed. At present they are very wary of permitting transfers which could result in the exercise of right to buy on mixed or privately-funded property. The amendment would clarify the position which does not seem to be as clear cut as the Minister previously indicated. I beg to move.
Lord Hesketh: My Lords, the amendment is identical to one moved in Committee by the noble Lord, Lord McIntosh, about which I subsequently wrote to him. As I explained in Committee, a tenant exercising the right to buy is allowed discount only to the extent that it does not reduce the purchase price below the sum of the costs incurred by the landlord in acquiring, building or improving the property. These costs can be summarised, to use the words of the amendment, as
"the total cost of the provision of the dwelling".
The noble Lord has referred to the concern of housing associations about cases where a tenant with the ordinary or preserved right to buy applies to buy a property within the association's stock financed from private sources on terms including penalties for early redemption. The cost of such penalties would be unlikely to count as a cost for the purposes of the cost floor rule. However, it is difficult to see how the rule could reasonably be extended to cover penalties arising under the particular financial arrangements by which the property was funded. It is surely not right to discriminate between tenants on the basis of the particular financial package negotiated by their landlord.
In the light of that explanation, I hope that the noble Lord will find this an opportunity to resist a temptation.
Lord Dean of Beswick: My Lords, I was about to say that I was grateful to the Minister for his reply. However, as he has given me no comfort, that would be rather false. At this time of night and at this stage of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 202C:
Page 275, line 2, at end insert—
1540
("53A. In section 113 of the Housing Act 1985 (member of a person's family) in subsection (1)(a) leave out the words "or he and that person live together as husband and wife" and after subsection (2) of that section insert the following subsection—
"(3) For the purpose of this Part, a person who lives together with another person as his wife or husband shall be treated as his spouse."").
The noble Lord said: My Lords, I rise to the temptation to move yet another amendment. It seeks to recognise the reality that large numbers of public sector tenants live together as husband and wife although they may not be married. At the moment the state fails to recognise that fact. It is also out of line with the law for Rent Act tenants and assured tenants under the Housing Act 1988. For both groups of private sector tenants the Housing Act 1988 makes no distinction between married people and cohabitees in deciding what rights the person has to accede to a tenancy. The amendment seeks to bring the law in the public sector in line with that for the private sector.
In Committee the Government queried the use of both genders, given that the Interpretation Act 1978 provides that reference to "he" covers both genders. The amendments were modelled on Section 17(4) of the Housing Act 1988 covering the position of succession to assured tenancies which refers to both genders. In any event, the amendment has been re-worded to refer only to the male gender. I beg to move.
Lord Hesketh: My Lords, the effect of Amendment No. 202C would be that a person living with another person as wife or husband would be treated as the spouse. We have no reason to believe that the redefinition within Amendment No. 202C is necessary or desirable. We are not aware that problems have arisen in this connection. However, if the noble Lord would like to send me details of cases I shall be happy to look into them, although I cannot guarantee that we shall be able to do anything about it in this Bill. In the light of that explanation, I hope that the noble Lord will be able to withdraw his amendment.
Lord Ross of Newport: My Lords, I am tempted to make sure that the noble Lord receives about one hundred letters through the post next week. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Strathmore and Kinghorne The Earl of Strathmore and Kinghorne moved Amendment No. 203:
Page 279, line 1, at end insert—
(". In section 61(3) of the Housing (Scotland) Act 1987 (application of right to buy to tenants under secure tenancies granted after acquisition by landlord of defective dwelling) for "282(3)" there shall be substituted "282(2) or (3)").
The noble Earl said: My Lords, this is a technical amendment which remedies an unintended effect made on consolidation of the Scottish housing legislation in the Housing (Scotland) Act 1987. The policy intention behind Section 61(3) of the Act is to ensure that a tenant who had his defective home repurchased by his landlord does not have to meet the two-year qualifying period before he can apply to exercise the right to buy. The provisions as they

1541
stand only disapply the waiting period to tenants of non-public sector landlords. This amendment will disapply them also to tenants of public sector landlords. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 204:
Page 281, line 20, at end insert—
("(2) At the beginning of subsection (4) of that section there shall be inserted the words "Subject to section 38 (4A) below".").
The noble Lord said: My Lords, Amendments Nos. 204 and 205 are minor amendments which follow on from Amendment No. 188C which noble Lords agreed in Committee. I beg to move.
On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 205:
Page 281, line 35, after ("above") insert ("so long as the tenancy continues to be held by a body which would have been specified in subsection (1) of section 80 of the Housing Act 1985 if the repeal of provisions of that section effected by this Act had not been made").
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 206:
Page 282, line 6, at end insert —
(". In Schedule 2 to that Act (grounds for possession of dwelling-houses let on assured tenancies) at the end of Ground 6 (landlord intending to demolish or reconstruct) there shall be added the following paragraph —
"For the purposes of this ground, every acquisition under Part IV of this Act shall be taken to be an acquisition for money or money's worth; and in any case where —

(i) the tenancy (in this paragraph referred to as "the current tenancy") was granted to a person (alone or jointly with others) who, immediately before it was granted, was a tenant under a tenancy of a different dwelling-house (in this paragraph referred to as "the earlier tenancy"), and

(ii) the landlord under the current tenancy is the person who, immediately before that tenancy was granted, was the landlord under the earlier tenancy, and

(iii) the condition in paragraph (b) above could not have been fulfilled with respect to the earlier tenancy by virtue of an acquisition under Part IV of this Act (including one taken to be such an acquisition by virtue of the previous operation of this paragraph),

the acquisition of the landlord's interest under the current tenancy shall be taken to have been under that Part and the landlord shall be taken to have acquired that interest after the grant of the current tenancy." ").
The noble Lord said: My Lords, this amendment arises from a gap which my colleague Simon Hughes MP in the other place raised with the Government when this Bill was in Committee there. It relates to tenants choice landlords who might use ground 6 of Schedule 2 to the Housing Act to obtain vacant possession for their tenants. I believe that the Government may have some sympathy for this amendment. I beg to move.
Lord Reay: My Lords, the noble Lord, Lord Ross of Newport, has explained the purpose of this amendment, which we are happy to accept.
Lord Ross of Newport: My Lords, I am very grateful to the Government for their co-operation and I also express my thanks to my colleague Simon Hughes.
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On Question, amendment agreed to.
Lord Reay Lord Reay moved Amendment No. 207:
Page 282, line 14, at end insert—
("96. In Schedule 18 to that Act (enactments repealed) at the end of paragraph 4 at the end of that Schedule (scope of repeals of section 80 of the Housing Act 1985) there shall be added "and
(c) do not have effect in relation to a tenancy while it is a housing association tenancy."").
The noble Lord said: My Lords, this amendment fulfils an undertaking which my noble friend Lord Caithness gave at Committee stage to the noble Lord, Lord Graham of Edmonton, to consider an amendment about establishing security of tenure for certain types of housing association tenant who might not otherwise have full security.
The amendment which the Government are now bringing forward has been drafted to meet the concerns expressed by the noble Lord, Lord Graham. Its effect is to establish that, in cases where a housing association tenancy under the pre-1988 Act regime is not also a secure tenancy, it may nonetheless become a secure tenancy if it subsequently meets the normal conditions for such a tenancy.
This is a small but useful measure to deal with a minor anomaly in the existing legislation. I am grateful to the noble Lord for bringing the point to the Government's attention and I hope that your Lordships will agree to the amendment.
Lord Graham of Edmonton: My Lords, I am grateful not only to the noble Earl, Lord Caithness, for his assurances but also the Minister and his advisers for giving effect to my suggestion, although perhaps going on a different route to that which we proposed but securing the same purpose. I assure the Minister that the National Federation of Housing Associations has asked me to convey to the Minister that it is very grateful for the notice which has been taken of what it sees as a genuine concern. We are grateful to the Minister for doing what he has done.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 208:
Page 282, line 14, at end insert —
("The Social Security Act 1989
. In paragraph 2(6) of Schedule 8 to the Social Security Act 1989 (interpretation of provisions relating to incapacity for work), for paragraphs (a) and (b) of the definition of "councillor's allowance" there shall be substituted the following paragraphs—

"(a) section 173 or 177 of the Local Government Act 1972 or a scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989, other than such an allowance as is mentioned in section 173(4) of that Act of 1972 or in section (Schemes for basic, attendance and special responsibility allowances for local authority members) (2) of that Act of 1989; or

(b) section 49 of the Local Government (Scotland) Act 1973 or a scheme made by virtue of section (Schemes for basic, attendance and special responsibility allowances for local authority members) of the Local Government and Housing Act 1989, other than such an allowance as is mentioned section (Schemes for basic, attendance and special responsibility allowances for local authority members) (2) of that Act of 1989".").

On Question, amendment agreed to.
Schedule 12 [Enactments repealed]:
Lord Hesketh Lord Hesketh moved Amendments Nos. 209 to 212:
Page 285, line 26, column 3, at end insert—

("In section 177, subsection (2A) and in subsection (3), the words "(but not for the purposes of subsection (2A) above)".

Section 177A.

In section 178, in subsection (1), the words "and 177A".").

Page 285, line 27, column 3, at end insert—

("section 265A(1)(g).").

Page 285, line 50, column 3, at end insert—

("Section 45 and 45A. Section 49(1A). Section 49A.").

Page 286, line 23, at end insert—

("1975 c. 30.

The Local Government (Scotland)Act 1975.

In Schedule 6, in Part II,(Scotland) Act 1975. paragraph 46.").

On Question, amendments agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 212A:
Page 286, line 29, at end insert—

("1975 c. 76.

The Local Land Charges Act 1975

In section 9, in subsection (2),the words from the beginning to "in writing, and".").

The noble Baroness said: My Lords, this amendment is consequential on Amendment No. 173ZA. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 213 to 215:
Page 286, line 37, at end insert—

("1980 c. 20.

The Education Act 1980.

In Schedule 2, in paragraph 4, the words 173(4) and".").

Page 286, line 39, at end insert—

("1980 c. 65.

The Local Government, Planning and Land Act 1980.

Section 26(1) to (3).").

Page 287, line 14, column 3, at end insert—

("In Schedule 14, paragraphs 19 and 20.").

On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 215A:
Page 289, leave out line 45.
The noble Lord said: My Lords, this amendment is consequential on Amendment No. 173B. I beg to move.
On Question, amendment agreed to.
12.45 a.m.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 215B:
Page 289, line 49, column 3, after ("notices)"") insert ("and the word "366", in paragraph 2(2)(b) the word "366").
The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No.215C:
Page 289, line 57, column 3, at end insert ("; and in paragraph 8(1) the word "366").
The noble Lord said: My Lords, this amendment, too, has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 216:
Page 290, line 16, at end insert—

("1980 c. 10.

The Local Government Act 1986.

Section 11.").

On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 216ZA:
Page 290, line 31, column 3 at end insert—
("Schedule 20, paragraph 10(3)").
The noble Lord said: My Lords, this amendment refers to the Housing (Scotland) Act, on which I am such a noted expert. It is brought to our attention by the Convention of Scottish Local Authorities. The problem which they have identified relates to the repurchasing of defective housing by the local authority from which the tenant purchaser has already bought the property.
It seems somewhat contrary to Amendment No. 203, which has just been agreed and which was moved by the noble Earl, Lord Strathmore and Kinghorne. But the problem which has been identified is that if a local authority repurchases defective housing from a tenant purchaser, Clause 9(1) of Schedule 20 to the Housing (Scotland) Act provides that the tenant purchaser should get, in effect, 95 per cent. of its defect-free value. So far so good. What then happens is that, under Section 282 of the 1987 Act, the former purchaser may, if he or she wishes, in addition to receiving 95 per cent. of the defect-free value be given a secure tenancy of the house when it is sold back to the local authority, or may be given secure tenancy of a similar property if the council subsequently has to demolish the original property. The third twist is that, if the council puts further resources into remedying the defects, the tenant is free to reapply to buy the house or a replacement house at the full discount.
This appears to the Convention of Scottish Local Authorities to be anomalous, and the amendment would ensure that, where a property is not offered back to the authority with vacant possession, the repurchase price can be adjusted by the local authority or the district valuer taking into account this equivalent to a sitting tenancy. I beg to move.
The Earl of Strathmore and Kinghorn: My Lords, I cannot accept this amendment, which is contrary to a central principle of the housing defect legislation. That principle has always been that eligible owners should be offered repurchase at 95 per cent. of the defect-free value so that they receive, broadly speaking, the price they might have expected to get on selling their house had the house not turned out to be defective. So, in these circumstances, the amount an owner receives in excess of the defective value should be seen as compensation.
The principle was discussed during the passage of the housing defects legislation, along with the proposal in that legislation to offer a secure tenancy to the former owner. The question of discounting the price paid to the owner who wishes to remain as a secure tenant was also raised, but the main argument against such a discount is that, while the majority of

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former owners would want to buy another property in the open market following repurchase, some would find it difficult to do so. This could be for a number of reasons. For example, traditional houses often have higher values than those of non-traditional construction; former owners might also have to repay part of their right-to-buy discount, or any outstanding mortgage debts and then not find it easy to take out a new mortgage; for example, because of their age. As for any existing tenant, it was felt that it would be wrong for former owners to lose their security of tenure as a result of the housing defects statutory provisions. Their position is therefore preserved, and I see no reason to remove this right. With that explanation, I hope the noble Lord will withdraw his amendment.
Lord McIntosh of Haringey: My Lords, I am sure that the Scottish local authorities who were concerned about this matter will read very carefully what the noble Earl has said and, pending such reconsideration, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendments Nos. 216A to 220:
Page 291, line 2, leave out ("(2)") and insert (", in subsection (2),").
Page 291, line 3, at end insert ("and subsection (3),").
Page 291, line 16, at end insert—

("In section 140(2) the word "and" at the end of paragraph (e).").

Page 291, line 16, at end insert—

("In section 143(4) the words "57 or" ").

Page 291, line 18, after ("2,") insert ("in paragraph 2(2)(m), the words from "and" to the end.").
Page 291, line 28, after ("9,") insert ("in paragraph 2(2)(h), the words from "and" to the end.").
On Question, amendments agreed to.
Clause 187 [Short title, commencement and extent]:
Lord Hesketh Lord Hesketh moved Amendment No. 221:
Page 168, line 9, after ("140") insert ("[contingency planning and co-ordination in respect of emergencies or disasters]").
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 222:
Page 168, line 21, after ("147") insert ("(charges: temporary traffic signs)").
The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 171, to which your Lordships have already agreed. I beg to move.
On Question, amendment agreed to.
In the Title:
Lord Hesketh Lord Hesketh moved Amendments Nos. 223 and 224:
Line 18, leave out from ("grants") to ("to") in line 19. Line 22, after ("to';') insert ("and planning by").
On Question, amendments agreed to.

Midlands Metro Bill
Returned from the Commons with the amendments agreed to.
House adjourned at nine minutes before one o'clock.