Lords Sitting of 17 July 1996

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lincoln.

Housing Benefit Fraud
Lord Northbourne Lord Northbourne asked Her Majesty's Government:
Whether, in the light of the recently published Third Report of the House of Commons Social Security Committee which indicates that housing benefit fraud may now have reached £2 billion per annum, they are satisfied that the Department of Social Security, the Benefits Agency and local authorities have performed their duties in relation to housing benefit in a responsible and efficient manner.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Government's statistical review of housing benefit estimates that there is around £1 billion of housing benefit fraud, not the £2 billion suggested. The framework now in place for tackling housing benefit fraud is producing substantial results. Local authorities and the Benefits Agency have significantly increased benefit savings over the past three years.
Lord Northbourne: My Lords, I am grateful to the noble Lord for that Answer. It is good to hear that the Government are taking action on this important issue. Does the Minister agree that, whether the figure is £1 billion or £2 billion, it is nonetheless a very substantial sum of money, which could have been very much better used providing for the homeless or for those in unsatisfactory accommodation? Does he further agree that some local authorities have been reluctant to tackle the problem of fraud and that those that have actually been paying out claims in respect of properties which do not exist, have been seriously negligent in their stewardship of public funds?
Lord Mackay of Ardbrecknish: My Lords, I certainly agree with the noble Lord that it is a very large sum of money, whichever of the two figures one takes. It is a problem in the first instance for local authorities. Some of them are better than others. We have been encouraging them since 1993 when we introduced a financial incentive scheme which allows those local authorities which actually exceed certain thresholds to keep some of the savings. If they are way below those thresholds they are penalised. In addition, we are looking at various other systems; for example, the introduction of housing benefit matching services where computers can talk to each other and by that means perhaps pick out those people who are
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making fraudulent claims in, say, adjacent boroughs in London where obviously, as with other big cities, the problem is at its greatest.
Lord Monkswell: My Lords, do the Government agree that the House should pay tribute to efficient and sensible local authorities which challenge the extremely high rents that are sometimes charged by unscrupulous private sector landlords to those in the poorest sector of our society who are in receipt of housing benefit?
Lord Mackay of Ardbrecknish: My Lords, not only should local authorities challenge it: they are legally obliged to now because we have introduced legislation regulation which means that housing benefit is not paid fully for rents which are hugely above the average for the local area. I cannot quite recall whether the noble Lord's party supported us on that.
Lord Desai: My Lords, can the Minister say whether there are any plans to privatise the distribution of housing benefit, as one hears that there are plans to privatise everything?
Lord Mackay of Ardbrecknish: My Lords, the distribution of housing benefit is the responsibility of local authorities. There are some which have out-sourced to the private sector part of the work of administering housing benefit. Some of those local authorities are run by the party opposite.
Baroness Hollis of Heigham: My Lords, I believe we all agree that housing benefit fraud is not tolerable and should not be tolerated. Do the Government accept the evidence of the Select Committee that most housing benefit fraud is perpetrated by rogue private landlords claiming direct payment of housing benefit for non-existent tenants, and that in some cases private landlords are making fraudulent claims of up to £250,000 a year? To help local authorities stop such fraud, will the Government now do what they have so far refused to do, and allow local authorities to require from a landlord receiving direct payment of benefit a list of all the properties on which that landlord receives housing benefit? With such a list the local authorities can conduct proper checks, but without it. they cannot check fraud. Will the Government stop being soft on rogue landlords and give local authorities the tools with which to combat serious financial fraud?
Lord Mackay of Ardbrecknish: My Lords, the noble Baroness and I can certainly agree that landlord fraud is serious. But I believe that we part company when she seems to imply that that is the sum and substance of all the fraud. Indeed, there is landlord fraud, tenant fraud, and there is also collusive fraud between landlord and tenant. It is interesting that in its evidence the committee of the London Borough Fraud Investigators Group thought that landlord fraud in London accounted for some £40 million. If one translates that across the country, it comes to about

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£200 million. Clearly, as I have said, that is only part of the fraud. I do not believe that it is wise to try to pick out just one of the villains in this particular case.
Baroness Hollis of Heigham: My Lords, with the leave of the House, will the Minister answer my point? Irrespective of whether landlords are responsible for 40 per cent., 60 per cent. or 80 per cent of the fraud, what now stops local authorities from doing an effective job in checking on landlord fraud is that they simply do not have information on the properties owned by such landlords. They are not allowed to require it. When we tabled an amendment to allow them to require it, the Government resisted it.
Lord Mackay of Ardbrecknish: My Lords, the noble Baroness has clearly backed off the point that she made in her first question when the fraud seemed largely to be landlord fraud. She now says that landlord fraud accounts for only 40 per cent. or 60 per cent. of all such fraud. As I have said, it is both landlord and tenant fraud, and we shall bear down hard on both—
Baroness Hollis of Heigham: Answer!
Lord Mackay of Ardbrecknish: My Lords, I shall do so if noble Lords opposite will contain themselves with some patience.
Computer matching will be an important tool in identifying multiple applications, which is one of the ways in which both landlords and tenants manage to swindle the system. We are also becoming involved in better data-matching. We need to have more people on the ground, employed by the local authorities, to pursue fraud and to investigate whether the property and the tenant exist. That is all part and parcel of the campaign.
Earl Russell: My Lords, is the Minister aware that research carried out by Dr. Doig of the University of Liverpool shows that Liberal Democrat councils have more success in combating housing benefit fraud than councils of either of the other parties? Can the Minister give me an assurance that, if I should observe that his reply to the Select Committee gives me the second occasion in 24 hours to say that the Government have got something right, he will not expect me to complete the hat trick when we meet later tonight?
Lord Mackay of Ardbrecknish: My Lords, I have not read that research. However, I would certainly commend those councils where the success is greatest, whichever parties run them, because they are saving the taxpayer a considerable amount of money and are preventing fraudulent action against both the taxpayer and the benefits system.
Baroness Farrington of Ribbleton: My Lords, I listened carefully when the Minister said that there should be more officials working on this in local authorities. But how does the Minister think that they
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can investigate effectively if they are not allowed information as to which properties at which addresses they are supposed to be investigating?
Lord Mackay of Ardbrecknish: My Lords, investigating officials in local authorities know the tenant, the landlord and what is being paid for what. They can do what our investigators did in the survey—visit a property to check that it exists and that the tenant is whom he says he is.
Lord Avebury: My Lords, has the Minister read the press comments about the sect which is claiming housing benefit on behalf of people resident in premises in a number of different local authorities all over the United Kingdom and in some cases letting the accommodation (in respect of which the claim had been made) to temporary residents with no claim at all on our housing benefit system? Will the Minister say what steps the Government are taking to look into that claim and how there can be co-operation between the several different local authorities involved?
Lord Mackay of Ardbrecknish: My Lords, I do not carry such detail around with me. If the noble Lord would write to me about it, I shall be happy to look into it.

Quarantine: Swedish Scheme
2.46 p.m.
Baroness Sharples Baroness Sharples asked Her Majesty's Government:
Whether they have had or intend to have discussions with the Swedish Government on the operation and development of its quarantine scheme.
Lord Lucas: My Lords, senior officials from the Ministry of Agriculture, Fisheries and Food visited Sweden and Norway late last year to get a first-hand idea of how the new quarantine systems there are working. They found that there were significant administrative problems due to the vast increase in numbers of people wishing to import their pets and the complexity of the procedures required. Smuggling also still remained a problem.
Baroness Sharples: My Lords, I thank my noble friend for that Answer, but does he accept that over many years both pets and their owners have suffered great stress because of our quarantine rules which mean six months in quarantine? Given that there are now proven inoculations against rabies, microchip identification and other precautions, does not my noble friend agree that we should move more towards the Swedish model?
Lord Lucas: My Lords, I certainly think that we should keep the Swedish experiment in mind, but we must also keep in mind several other points. Yes, there is a lot of inconvenience at the moment for people who return to this country with pets and for people who

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would like to take their pets abroad. We estimate that, in addition to that inconvenience, the financial cost to both pet owners and the taxpayer is about £12 million per year. However, that is very small beer compared with the problems that would result if rabies became endemic in this country. We reckon that the financial cost of protecting the dogs and cats in the United Kingdom would run to about £200 million per year. There would also be incalculable inconvenience to everybody from knowing that there was rabies in this country and that bites from pets and wild animals were dangerous.
Lord Carter: My Lords, is it true that there have been only two cases of rabies from imported animals since 1966? Is the Government's reluctance to change the quarantine laws due to concern about human health or is it the result of some extremely effective lobbying by the Kennel Club and the Royal College of Veterinary Surgeons?
Lord Lucas: No, my Lords. As I think that I have just explained, we have reached a balanced judgment on the course of action that will cause the people of the United Kingdom in general the least cost and the least inconvenience. At the moment, while rabies still remains widespread in the near parts of the Continent of Europe, we are convinced that our current regime is the right one.
Lord Desai: My Lords, can the noble Lord explain to the House how every other country in Europe manages without rules of this kind? Surely, they do not incur the same kind of costs in taking care of their pets?
Lord Lucas: My Lords, they pay the cost of vaccinating their pets and have the inconvenience of having to vaccinate people when they are bitten by animals. We reckon that in the United Kingdom there are 200,000 or 300,000 such incidents a year, every one of which would require subsequent vaccination if we had rabies in this country. They cannot keep rabies out of continental countries. Not surprisingly, the borders are too porous and open to foxes. This country is in a privileged position and it is one that we wish to retain.
Baroness Sharples: My Lords, does my noble friend accept that a considerable number of people try to smuggle their dogs into the country?
Lord Lucas: My Lords, yes. One of the great advantages of the current system is that it is known that when a dog comes in with a person who has returned from abroad that animal must have been brought in illegally, because all animals have to go into quarantine. Under any other system smuggling would be a worse problem, as indeed the Swedes have found.
The Earl of Liverpool: My Lords, is my noble friend aware that a great number of people in this country would very much like to export their pets but are unable to do so—I am referring to holidays and matters of that kind—because of the current legislation? Does the
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Minister agree that the Swedish system has proved the efficacy of tagging, inoculation and blood testing? Can he provide some encouragement to those pet owners who expect some kind of relaxation of the very onerous six-month quarantine requirement?
Lord Lucas: My Lords, as to the second part of the question posed by my noble friend, when rabies becomes much less common on the near continent than it is at the moment that may be a good time to look again at the balance of inconvenience. Referring to my noble friend's first supplementary question, we are aware that there have been problems in exporting pets to countries. It has not always been possible to sign the necessary export certificates without prior agreement. That has caused considerable and regrettable inconvenience. However, we have quickly contacted all of the importing countries when we have become aware of such problems and many have agreed to new import conditions which will allow people to move their pet animals with them.

Passenger Rail Franchises
2.52 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether they are satisfied that the conditions under which the eight rail passenger service franchises so far awarded are reasonable and, in all eight cases, capable of being fulfilled.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, yes.
Lord Peyton of Yeovil: My Lords, I hope that my noble friend will realise how grateful I am to him for his very expansive reply. Is he aware that at least on the surface some of the franchisees have set themselves or have accepted some very stiff targets?
Viscount Goschen: My Lords, I agree that the targets which have been set are properly ambitious. Those high targets mean better levels of service to the travelling public and more investment. I believe that that is greatly to be commended. Those promises are matters of contract and are legally enforceable.
Lord Cledwyn of Penrhos: My Lords, can the Minister give an assurance that the oldest named train in the world is not interfered with? I refer to the train from Euston to Holyhead which is known as the Irish Mail.
Viscount Goschen: My Lords, the noble Lord, Lord Cledwyn, raises a subject with which I am not especially familiar. I shall endeavour to find out the details that he requires. I am not entirely sure whether he refers to the locomotive itself or to the line. What is clear is that under franchising the passenger gets a better deal, and more investment is put into the network to the benefit of all concerned.
Lord Ezra: My Lords, does the noble Viscounnt agree that over the years one of the biggest problems suffered by the railways is under-investment? Does he consider that under the franchising arrangements that have been made that will be put right, particularly as far as concerns rolling stock?
Viscount Goschen: My Lords, I believe that the benefits of the privatisation programme will flow in terms of investment. The noble Lord is quite right. In the past British Rail has had to compete with all kinds of other areas of government spending for access to capital. We believe that under the new arrangements it will be much easier to bring in new sources of capital and there will be considerable improvements.
Lord Taylor of Gryfe: My Lords, is the noble Viscount aware that once a week I travel by train from King's Cross to Aberdeen, which is a considerable distance? In the past that service has been one InterCity service. I am advised that now the InterCity service ceases at Edinburgh, which means that the rest of the journey is made via ScotRail. Can the Minister assure me that, as there is a complete change of regime and personnel, there will be satisfactory co-ordination between the private owner of InterCity East Coast main line and the public owner of the Edinburgh to Aberdeen line via Leuchars?
Viscount Goschen: My Lords, I give the noble Lord the assurance that train operating companies will work together. Very shortly, we hope to see all train operating companies in the private sector, which will be to the considerable benefit of the country. I am glad that the noble Lord has referred to the InterCity East Coast main line. We have seen a further £7 million of promised investment in the refurbishment and improvement of rolling stock and a £15 million programme of station improvements, including security, accessibility and so forth. Those are examples of the improvements in the InterCity East Coast main line which have been promised. We certainly believe that they will be carried out.
Viscount Caldecote: My Lords, I should like to ask my noble friend whether the Government will encourage the new companies to buy British-made rolling stock and other equipment.
Viscount Goschen: My Lords, I am certain that the new train operating companies will work very closely with the rolling stock leasing companies in identifying the kind of rolling stock which will be to their benefit. I am sure that they fully realise the capacity and capability which this country has for manufacturing the same.
Lord Berkeley: My Lords, when the Minister for Roads and Railways welcomed the franchises for South West Trains and the East Coast Main Line, particular emphasis was placed on the integration of buses and trains in the same service to create a network. It was thought that this was a good idea. When the Midland Main Line was recently franchised the Office of Fair Trading said that buses must be removed from the operator if it was to avoid
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a reference to the Monopolies and Mergers Commission. Can the Minister explain to the House whether it is a good or a bad idea to have a network between buses and rail? Further, can he confirm that the real competition is not between rail and bus but with the motor car?
Viscount Goschen: My Lords, I am interested to hear the views of the noble Lord about where competition lies between the different modes of travel. The Secretary of State for Trade and Industry announced on 27th June that he intended to refer the acquisition of the Midland Main Line franchise by National Express to the MMC unless undertakings were given by National Express to remove competition concerns arising from the acquisition. I understand the current position to be that the Director General of the Office of Fair Trading is seeking such undertakings from National Express. In view of that, I do not believe that it is appropriate for me to comment further at this moment.
Lord Clinton-Davis: My Lords, can the Minister indicate the extent to which the line that he takes this afternoon about the benefits to the public arising from his fragmented system is consistent with a letter from the customer relations department of Central Trains Limited? The letter states:
"other rail operators do not discuss with us what plans they have for their services. Our priority has to be to provide the best service possible for our own customers".
East Coast replied to a not dissimilar complaint in the following terms:
"The issue of routing has become very complex and both staff and customers alike are confused as to which lines their tickets are valid upon … one franchise does not want passengers using its services if the payment for the ticket [goes] to another operator. As a result, the rules governing 'any reasonable route' are being given further consideration".
Are replies of that kind not absolutely inconsistent with the assurances that the Minister has given over a long period?
Viscount Goschen: My Lords, I regret that I have not read every single piece of correspondence from every single train operating company. However, the noble Lord may recall that a year or so ago there was a tremendous scare, fuelled by members of the party opposite, about the network benefits. It was said that through-ticketing would not exist and that all of this would go to the wall. That has turned out to be rubbish. Operators are obliged to provide through-ticketing to all destinations. Ticket inter-availability is being protected broadly in line with inter-availability of BR services. Railcards for the elderly, disabled and young people will continue. I believe that that firmly gives the lie to what was said about the abolition of network benefits.
Lord Clinton-Davis: My Lords, is the Minister saying that the replies of Central Railways and East Coast—they are typical of many, many replies—are a tissue of lies?
Viscount Goschen: My Lords, I have not read the private correspondence put forward by the noble Lord. He cannot possibly expect me to comment on

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correspondence to other people from private companies. Networker benefits are protected. That is written down. Those are the rules, and they cannot be sidestepped.
Lord Ewing of Kirkford: My Lords, will the Minister tell your Lordships whether those eight franchise holders are paid the fuel rebate on the diesel fuel that is used? If so, how much is paid by the Treasury on behalf of taxpayers to the holders of those eight franchises?
Viscount Goschen: My Lords, I do not have that information, but I shall be delighted to find out and write to the noble Lord about it. He might be interested to know, on another fiscal matter relating to the eight franchises, that by year seven of the franchises, the net burden on the taxpayer will fall by about £186 million per annum, which will be some 61 per cent. compared to the budgeted levels of support for BR in 1996–97, net of administered profit.
Lord Clinton-Davis: Wait and see!
Viscount Goschen: My Lords, the noble Lord says, "Wait and see". That is not the case. These are contractual matters.

Charitable Events on Set-aside Land
3.1 p.m.
Baroness Darcy (de Knayth)Baroness Darcy (de Knayth) asked Her Majesty's Government:
Under what European Community legislation the holding of charitable events on set-aside land is prohibited.
Lord Lucas: My Lords, Commission Regulation 762/94, as amended, lays down detailed rules for set-aside under the Arable Area Payments Scheme. Article 3(2) states that set-aside land may not be,
"put to any lucrative use incompatible with the growing of an arable crop".
In a written communication to Her Majesty's Government the European Commission has stated that that means that local, social and charitable activities that are both fund-raising and incompatible with the growing of an arable crop may not take place on set-aside land.
Baroness Darcy (de Knayth): My Lords, I thank the Minister for that detailed reply. Has the Commission given any indication that, if there were acceptable proof that only the charity gained from the event, it might accept the use of set-aside land for charitable purposes?
Lord Lucas: My Lords, in what it has said to us to date, it is clear that the Commission has set its face against that. We are continuing to argue with the Commission. In our latest letter to Mr. Fischler's chef de cabinet we have argued just what the noble Baroness has suggested to us.
Lord Bruce of Donington: My Lords, is the Minister aware that these provisions of the CAP whereby people are paid for not producing crops are one of the most obscene features of all Community legislation? Can we rely upon the common sense, if not the morality, of the Government to seek at the IGC to have the whole of this wretched apparatus destroyed?
Lord Lucas: My Lords, I think that the noble Lord knows that we agree with him in many respects. I would not necessarily use the same superlatives as he did. But there must be better ways of doing things than the way they are done at present.
Lord Clark of Kempston: My Lords, does my noble friend agree that it is sheer economic madness that there is set-aside land which may be used for a charity but which cannot be used? My local country church uses set-aside land belonging to a neighbouring farmer for a car park for the annual fête. Is it not ludicrous for that farmer to be deprived of set-aside money when he is not being paid? Surely that could be fixed if whichever charity is benefiting were to give to the farmer whose set-aside land it is a certificate saying that no payment had been made to the farmer. That should satisfy the European Union.
Lord Lucas: My Lords, I entirely agree with my noble friend that the situation is ludicrous, but unfortunately that is the way it is at present. The farmer would not just lose his payment for set-aside land; he would lose all the payments on land of which the set-aside was set aside. It would he extremely financially difficult for a farmer who was caught allowing the church fête to use the set-aside land as a car park. That is why as far as we know all farmers are not now doing that. That is not a situation we find tolerable.
Baroness Masham of Ilton: My Lords, when this legislation was going through the European Parliament did our representatives fight for charities or did they just let it slip through?
Lord Lucas: My Lords, it has been our understanding since the legislation was passed and until the latest Commission ruling that we could allow charities to make reasonable use of set-aside land. So I do not suppose that it came to the attention of our MEPs at the time. But it is interesting to note that in a recent edition of Country Life David Thomas, the Norfolk Labour MEP, is quoted as saying that this is all due to MAFF and that the European Union is in the right. I hope that the Labour Party will teach its MEPs to understand what is going on in this country and to look after this country's interests rather than Europe's.
Lord Pearson of Rannoch: My Lords, is it not true that Regulations are issued by the unelected Commission under delegated authority from the Council? Is it not true that Regulations are not even debated in national parliaments, although they become automatically legally binding in all the member states?

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Is that not just one more example of a gross abuse of our democracy made inevitable by our adherence to the Treaty of Rome?
Lord Lucas: My Lords, my noble friend is going just a little far.
Lord Carter: My Lords, will the Minister explain his first Answer when he talked about the use being incompatible with the growing of an arable crop? Does that mean that if one had a use which was compatible with the growing of an arable crop—of course, the land is to be set aside for the whole season anyway—it would be possible to use it for charitable purposes?
Lord Lucas: My Lords, yes, if the use were compatible with the growing of an arable crop. If one can imagine the use being compatible with the growing of a crop in the field—let us say wheat—at the same time, then one could use it. For instance, shooting—
Noble Lords: Ah!
Lord Lucas: My Lords, an ordinary shooting engagement would be allowed. Unfortunately, there are not many such charitable events. There are some, but not many.
Lord Campbell of Alloway: My Lords, what steps do the Government propose to take about this manifest nonsense?
Lord Lucas: My Lords, as I have said, in the short term we are writing to Mr. Fischler's chef de cabinet. We shall continue to take this matter up with him at every opportunity.
Lord Monkswell: My Lords, bearing in mind that these charitable events are an essential feature of rural life in this country, could it not be argued that those events are compatible with the raising of agricultural crops, because if the rural economy is to succeed it is essential to do that? Could I suggest also—
Noble Lords: No!
Lord Monkswell: My Lords, could I ask the Minister whether he has thought of advising the inspectors who might be checking on those charitable events to adopt a Nelsonian eye?
Lord Lucas: My Lords, I am afraid that I cannot give the noble Lord encouragement on either matter. Even the most charitable farmer would, in the eyes of the European Union, and indeed in my eyes, be going a bit far if he allowed the village fete car park to use a field that was growing a crop of wheat. One would not expect that. It would not be regarded as sensible. If our inspectors were to be seen to be turning a blind eye to such events, the EU would merely disallow some of the money coming to us, and we would find ourselves paying for it that way.

Education Bill [H.L.]
3.9 p.m.
Read a third time.
Clause 220 [Subsequent instruments of government]:
The Lord Chancellor (Lord Mackay of Clashfern)The Lord Chancellor (Lord Mackay of Clashfern) moved Amendment No. 1:
Page 117, line 29, after ("under") insert ("section 57(1)(a) of the Education Act 1993 or").
The noble and learned Lord said: My Lords, I should like to speak also to the other amendments which stand in my name on the Marshalled List. These amendments are relatively minor and technical in nature. They are intended to clarify various of the Bill's existing provisions, to rectify a small number of drafting omissions and to ensure that the Bill fully reflects the law which it is intended to consolidate. The amendments have been seen by my noble and learned friend Lord Lloyd of Berwick, the Lord Chairman of the Joint Committee on Consolidation Bills, for whose assistance I am very grateful. I beg to move.
Lord Morris of Castle Morris: My Lords, on behalf of my party, I have carefully looked over the consolidation, and I can find no fault with it. By the same token, I am content with all 13 amendments standing in the name of the noble and learned Lord the Lord Chancellor. In so far as I am competent to judge them, they dot the "i"s and cross the "t"s in an agreeable fashion.
I am also grateful to the officials of the noble and learned Lord's department for the considerable courtesy that they extended to me in giving me early sight of the parliamentary draftsmen's notes on the amendments, which I found extremely helpful whenever I did not find them totally incomprehensible. I hope that the noble and learned Lord will convey my thanks to his officials and wish them jointly and severally on my behalf a very happy summer holiday.
The Lord Chancellor: My Lords, I am extremely grateful to the noble Lord, Lord Morris of Castle Morris. I regret to say that the summer holidays are still a little distant for some of my colleagues who are working in this area.
On Question, amendment agreed to.
Clause 221 [Subsequent articles of government]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 2:
Page 118, line 28, after ("under") insert ("section 58(1)(a) of the Education Act 1993 or").
On Question, amendment agreed to.
Clause 322 [Duty of Health Authority or local authority to help local education authority]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 3:
Page 180. line 42, leave out ("metropolitan district council") and insert ("district council (other than one for an area for which there is a county council)").
On Question, amendment agreed to.
Clause 389 [Exceptions and special arrangements]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 4:
Page 218, line 34. leave out from ("of") to ("on") in line 35 and insert ("a school session (or, if there is only one, the school session)").
On Question, amendment agreed to.
Schedule 19 [Conduct and staffing of new county, voluntary and maintained special schools]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 5:
Page 387, line 44, leave out from ("which") to second ("school") in line 45 and insert ("each of the school sessions (or. if there is only one. the").
On Question, amendment agreed to.
Schedule 37 [Consequential amendments]:
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 6 to 9:
Page 443, line 20. leave out ("Subsection (8) is") and insert ("Subsections (8) and (13) are").
Page 453, line 14, after ("4(1)") insert ("and (2)").
Page 453. line 20, at end insert—
(".—(1) Section 4 of the Nursery Education and Grant-Maintained Schools Act 1996 (children with special educational needs) shall be amended as follows.
(2) In subsection (1) —

(a) for "section 157 of the Education Act 1993)" there is substituted "section 313 of the Education Act 1996)"; and

(b) for "Part III" there is substituted "Part IV".

(3) In each of subsections (2) and (3), for "Part III of the Education Act 1993" there is substituted "Part IV of the Education Act 1996".").
Page 453. line 21. leave out ("the Nursery Education and Grant-Maintained Schools Act 1996") and insert ("that Act").
On Question, amendments agreed to.
Schedule 38 [Repeals and revocations]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 10:
Page 457. line 47, at end insert—

("1991 No.2.

Diocesan Boards of Education Measure 1991.

In section 10(1), the definition of "the 1988 Act".")

On Question, amendment agreed to.
Schedule 39 [Transitional provisions and savings]:
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 11 to 13:
Page 460, line 12, at end insert ("made or").
Page 468, leave out lines 23 to 29 and insert—
("Contracts of staff transferred to School Curriculum and Assessment Authority or Curriculum and Assessment Authority for Wales
36.—(1) The repeal by this Act of—

(a) section 15 of the Education Reform Act 1988 (transfer of staff of School Curriculum Development Committee or Secondary Examinations Council), or

(b) section 248 of the Education Act 1993 (transfer of staff of National Curriculum Council and School Examinations and Assessment Council),

shall not affect the continued operation of section 15(3) to (5) or (as the case may he) section 248(2) and (3) in relation to any contract of employment in relation to which those provisions applied immediately before the commencement of this Act.
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(2) Nothing in this Act shall affect the continued operation of Article 4 of the Education (School Curriculum and Assessment Authority) (Transfer of Functions) Order 1995 in relation to the person mentioned in that Article.").
Page 471. leave out lines 13 to 16.
On Question, amendments agreed to.
The Lord Chancellor: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(The Lord Chancellor.)
On Question, Bill passed, and sent to the Commons.

School Inspections Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Deregulation (Insurance Companies Act 1983) Order 1996
The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie) rose to move, That the draft order laid before the House on 24th June be approved [26th Report from the Delegated Powers Scrutiny Committee].
The noble and learned Lord said: My Lords, the draft order is concerned with the removal of three burdens imposed upon the insurance industry under the Insurance Companies Act 1982. The proposal has completed the parliamentary scrutiny procedures for deregulation orders under the Deregulation and Contracting Out Act 1994. The Delegated Powers Scrutiny Committee of your Lordships' House and the Deregulation Committee of the other place have separately assessed and reported on the proposal.
The committee concentrated on three key matters set out in the Act: whether the proposed order would remove a burden; whether it allowed for necessary protection to be maintained; and whether there had been adequate consultation. Both committees have indicated that they are content with the draft order as it stands.
The purpose of the order is, first, to remove the requirement on all life assurance companies under Section 18(3) of the 1982 Act to prepare a statement of its long-term business once every five years. There is an incidental repeal of Section 42(1)(c). The industry estimates that that measure will save it some £6 million in a full five-year cycle.
The second burden is to remove from all insurance companies the requirement under Section 22(2) of the 1982 Act to show in their annual returns the names of connected intermediaries. It is estimated that that measure will save the industry as a whole some £500,000 per annum.
Finally, the order amends Section 22(1) of the Act to allow some copies of the annual returns to be submitted in electronic format. I beg to move.
Moved, That the draft order laid before the House on 24th June be approved [26th Report from the Delegated Powers Scrutiny Committee].—(Lord Fraser of Carmyllie.)
On Question, Motion agreed to.

Housing Bill
3.14 p.m.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Housing Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, I apologise to the noble Lord the Chairman of Committees for intervening at this stage but perhaps I should remind your Lordships that there is a heavy agenda in front of us on the Housing Bill, as your Lordships will have seen on the Marshalled List which was published this morning.
I hope that I speak for the House in saying that I do not believe that Third Reading should be the subject of long debates about issues which were decided or debated during earlier stages of the Bill. Indeed, the Companion at page 134 states:
"Except for privilege amendments, which are moved without notice, notice of amendments must be given in sufficient time to enable them to he printed and circulated in the form in which it is proposed to move them …
The principal purposes of amendments on Third Reading are to clarify any remaining uncertainties, to improve the drafting and to enable the Government to fulfil undertakings given at earlier stages of the bill".
At the moment, I am not attacking the Government on this issue because, in certain respects, they have responded to the undertakings that they gave and to the wishes of the Opposition at earlier stages of the Bill. However, I find it rather odd that on Third Reading in your Lordships' House, the Bill having gone through another place and through all its stages in this House bar Third Reading, we should now be confronted with a new schedule, admittedly meeting the principles which the Opposition wished, which contains 21 pages of drafting.
Perhaps I may remind the House and the Government that Third Reading is not an occasion on which to raise issues, and to continue to raise issues, which have been
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debated. No doubt the noble Earl, Lord Ferrers, will appreciate that we on this side of the House have been very moderate in the amendments that we tabled.
Lord Monkswell: My Lords, the noble Earl, Lord Ferrers, read a Statement which came from Her Majesty the Queen and His Royal Highness the Prince of Wales to the effect that, presumably, having read the Bill as it currently stands awaiting its Third Reading, they believed that there was no issue that they wished to raise and that they were content. Were both Royal Households aware of the latest government amendments to the Bill, which were tabled only yesterday, for consideration on Third Reading?
Baroness Hamwee: My Lords, I must apologise to your Lordships for having tabled amendments late at this stage. Perhaps that is a reflection of the amateur nature of this House in that some of us have difficulty in responding instantly to what is happening.
It has been difficult to get to grips with the number of government amendments during the limited time available. This morning I realised that there was one to which I should like to table a manuscript amendment, only to learn that that is not permitted on Third Reading. Will the Minister acknowledge the fact that in respect of a major Bill of this size, scale, complexity and importance, to use the timetable which your Lordships agreed—which was at no stage longer than the minimum period and at one point less than that—does not do justice to the role of this House as a good revising Chamber? I doubt that I have been alone in finding it difficult to carry out what I perceive to be my duties in that regard as a result of the timetable.
Earl Ferrers: My Lords, it is, as always, a pleasure to operate opposite the noble Lord, Lord Williams of Elvel, because I find that we so often agree on the important matters of life. What he has said this afternoon is perfectly correct. There should not be long debates about issues which have been discussed before. It is not the purpose of Third Reading to raise and to continue to raise issues that have been discussed before. The purpose of Third Reading is to clarify any uncertainties, to clarify the drafting and for Her Majesty's Government to give effect to commitments which were given before.
I do not blame the noble Lord, Lord Williams, for raising this matter. I do not mind saying that I was quite appalled when I saw the length of the Marshalled List. Many of the amendments, I freely admit, are government amendments. The reason why they are government amendments is that we have tried to clarify the uncertainties to meet the commitments and to give effect to other undertakings which we gave earlier.
The noble Lord, Lord Williams of Elvel, quite understandably refers to one particular amendment which covers 21 pages in the Marshalled List. That is, by any standards, fairly copious. The reason for that is that, although it is only a minor amendment which relates to contracts, it needs to amend the whole of one part of the Landlord and Tenant Act 1987. Therefore, it was concluded that, rather than amend that particular

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part of the legislation in a number of different places, it would be easier, both now and for people studying the law in the future, to have the whole part put down as one amendment. While it looks copious, it is, in fact, only putting one relatively minor effect into place.
Lord Williams of Elvel: My Lords, I am grateful to the noble Earl for allowing me to intervene. As always, he is very courteous and, indeed, we agree on the matter. Nevertheless, there are 21 pages of new drafting which I personally saw this morning. I do not understand how noble Lords in all parts of the House can, if necessary, properly investigate, revise or amend the drafting of such a long amendment. I simply put that point because I am sure that the noble Earl, like myself, has the interests of the House as a revising Chamber at heart.
Earl Ferrers: My Lords, the noble Lord is kind enough not to push the issue. He says that he just puts the point and I accept the point. I realise that it does create difficulties but one is left with the position of either taking the opportunity to get the Bill as right as possible or leaving an obvious flaw in it. That is the reason behind it.
The noble Lord, Lord Monkswell, asked if Her Majesty the Queen and His Royal Highness had agreed to the new amendments.
Lord Monkswell: My Lords, if I may correct the noble Earl. What I asked was not whether the Royal Households had agreed the amendments but whether they had had sight of them.
Earl Ferrers: My Lords, the position is that in the case of a Bill which affects the Prerogative of the Crown, consent is normally signified before the Motion for Second Reading. When a Private Member's Bill is directed substantially to the Queen's Prerogative, the practice is to move an Address for the consent of the Crown before introduction.
As regards a Bill affecting the interests of the Crown, the normal practice is to signify consent on Third Reading in order to take account of any amendments made to the Bill except in the case of private Bills where consent is signified by a Minute entry.
This is a formality, but an important formality. I can assure the noble Lord, Lord Monkswell, that if any of the amendments which have been tabled in today's Marshalled List were to affect materially the position of the Crown, they would have been alerted to that fact.
The noble Baroness, Lady Hamwee, said she had not had enough time to look at this. I can understand that too, for the reasons which the noble Lord, Lord Williams of Elvel, has given. I make some apology for the fact that this is one of the cries that always happens at this time of year. We have given quite a lot of time to the consideration of this Bill in Committee, on Report and again at Third Reading. I do see that it is always difficult to have sufficient time. If I may say, in the most delicate of fashions, it is sometimes difficult for us to deal with the amendments of the noble Baroness because they, too, have the habit, curiously
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enough, of being tabled at the last moment. So there are difficulties both ways. With that explanation, I hope that your Lordships will be content that the Bill be now read a third time.
On Question, Bill read a third time.
Clause 1 [The register of social landlords]:
Lord Lucas Lord Lucas moved Amendment No. 1:
Page 1, line 14, after ("registered") insert ("in the register kept by the Corporation").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 7, 8, 9, 10, 11, 97 and 98. All these amendments would fall within those allowable under the dictum of the noble Lord, Lord Williams. They are minor drafting technical improvements to the Bill giving it a final polish.
Amendment No. 1 clarifies that the reference in Clause 1 to a housing association registered under the Housing Associations Act 1985 means one in the register kept by the corporation. Amendment No. 7 corrects a cross-reference in Clause 42. Amendment No. 8 deletes a reference in Clause 56(2)(c) to a registered charity, which is already dealt with by the definitions in Clause 58(2). Amendments Nos. 9 and 11 insert a definition of "trustee" into Clauses 58(10)(a) and 64 respectively, to ensure that when the word is used in Part I it has the same meaning as it does in the Charities Act 1993. Amendment No. 10 deletes an otiose "with" from the definition of "house" in Clause 63. Amendment No. 97 deletes the words "order and" from paragraph 13(6) of Schedule 1: that sub-paragraph is concerned only with "resolutions". Amendment No. 98 corrects a cross-reference in sub-paragraph 13(8) of that schedule. I beg to move.
On Question, amendment agreed to.
Clause 8 [Power of registered social landlord to dispose of land]:
Lord Lucas Lord Lucas moved Amendment No. 2:
Page 5, line 31, leave out subsection (3).
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 3 and 4. Clause 8 gives registered social landlords a power to dispose of land. Clause 9 provides that before disposing of land a registered social landlord must obtain the prior consent of the corporation. Clause 10 specifies certain categories of disposals by registered social landlords which do not require corporation consent.
At Committee stage the noble Baroness, Lady Hamwee, identified a possible difficulty over these clauses with regard to the power of registered social landlords to dispose of land under Part V of the Housing Act 1985 (the right to buy) and Clause 16 of this Bill (the right to acquire). We have looked again at these clauses and agree that there is some uncertainty over the wording. The amendments will clarify the position and I thank the noble Baroness for identifying this difficulty. I beg to move.
On Question, amendment agreed to.
Clause 9 [Consent required for disposal of land by registered social landlord]:
Lord Lucas Lord Lucas moved Amendment No. 3:
Page 5, line 38, at end insert ("under section 8").
On Question, amendment agreed to.
Clause 10 [Lettings and other disposals not requiring consent of Corporation]:
Lord Lucas Lord Lucas moved Amendment No. 4:
Page 6, line 37, at end insert—
("(3) Consent under section 9 is not required for a disposal under Part V of the Housing Act 1985 (the right to buy) or under the right conferred by section 16 below (the right to acquire).").
On Question, amendment agreed to.
Clause 17 [Right of tenant to acquire dwelling: supplementary provisions]:
Lord Carter Lord Carter moved Amendment No. 5:
Page 12, line 21, at end insert ("and have regard to the views of').
The noble Lord said: My Lords, Amendment No. 5 amends Clause 17 of the Bill. At Report stage, the Government introduced an amendment which we welcomed regarding the consultation which would be conducted with housing authorities, local authorities and with organisations representative of registered social landlords, if the Government decided to remove the designation from an area where the exemption from the right to buy had been granted.
We said at the time that we felt it was not sufficient just to consult. There should be some attempt to ensure that the Government have regard to the results of that consultation. The effect of this amendment would be to add to line 21 on page 12 where the subsection says,
"the Secretary of State shall consult",
the words,
"and have regard to the views of'.
As I have said, we welcomed the government amendment on Report and the consultation amendment but we said then that we did not think it went far enough. When we discussed the matter at Report stage, the noble Earl, Lord Ferrers, said:
"Local interests will be warned of any proposed changes before an order is laid before Parliament".—[Official Report, 11/7/96; col. 502.]
He did not go on to say what would happen if, after the warning, the local authorities were consulted and were strongly opposed to the views of the Government. As the subsection is worded, the Government could ignore those views. We feel that there should be some means of requiring the Government at least to have regard to the views which they hear in the consultation, which we welcome.
We must point out that we do not doubt for a moment the good faith of the noble Earl and his colleagues. But Ministers change, departments change and, from time to time, there is even a change of government. Therefore, we feel that it is important to have this wording on the face of the Bill to ensure that the Government would at least have regard to the views of those they have consulted.
There is a clear precedent for this in a Bill which is to come before the House tomorrow; namely, the Deer (Scotland) Bill. I am not referring to the Deer (Amendment) (Scotland) Bill but to the Deer (Scotland) Bill which is to be considered on recommitment tomorrow. Subsection 5(2) of that Bill states:
"Before making an order … the Secretary of State may consult such persons or organisations as he thinks fit, or may direct the Commission to carry out such consultation on his behalf".
It then says in subsection (4):
"Where the Secretary of State or the Commission have carried out consultation …the Secretary of State shall have regard to the results of that consultation".
If having regard to the results of the consultation is acceptable in the Deer (Scotland) Bill on Thursday, it is perfectly fair to ask the Government why it is not acceptable in relation to the Housing Bill on Wednesday. There is a clear precedent here in the Government's own wording. Now there is that precedent, which I am sure the Government were seeking. They have used the phrase and have said in relation to the Deer (Scotland) Bill that they will have regard to the results of consultation. This is a very simple amendment which costs nothing. We are told continually that we have a listening government and that we are in the days of open government. Therefore, it is important to have those words on the face of the Bill.
Perhaps I may sum up by saying that there has been concern that the exemption granted to a rural area could be lifted by another Minister or ministerial order. If that were done in inappropriate circumstances, it would be damaging to the confidence of landowners who have made available their land on easy terms for the benefit of the local community.
As I said, we welcome the intention to carry out the consultations, but the duty on the Secretary of State under subsection (6) as worded is simply to consult with the parties concerned. He would not be obliged to have regard to their views. We feel that it is important to have a reminder on the face of the Bill that the Government should have regard to those views. As I say, there is a clear precedent in the wording of the Deer (Scotland) Bill which the House will discuss tomorrow. I beg to move.
3.30 p.m.
Lord Stanley of Alderley: My Lords, I must remind your Lordships that the object of this amendment and, indeed, the next one, is to ensure the continued confidence of landowners in offering land for rural housing. As we all know, confidence is a fickle animal, hence the need for this supportive amendment.
I suspect that my noble friend Lord Ferrers will say that there is no need for the amendment and that any reasonable Secretary of State would always have regard to the results of consultation. That may or may not be so. However, I ask, if that is the case, why the words are in so many other Acts of Parliament, in particular that mentioned by the noble Lord, Lord Carter, but also in a number of environment Acts. Would not what I call the Renton rule apply in that, if you mention something specifically, it is assumed that if something is not mentioned it is excluded? In this case, because there is

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no specific mention that the Secretary of State should take note of the results of consultation, it is implied that he need not do so.
Baroness Hamwee: My Lords, I have my name to the amendment. I support strongly the notion, however it is expressed, that in consulting anybody the Secretary of State should have regard to the points which are made to him; in other words, listening as well as passively hearing.
I was comforted to hear the reference made by the noble Lord, Lord Carter, to the Bill where those words appear, because my concern is that if the words are written in they may in some way undermine other references to consultation both within this Bill and other legislation. It would be helpful to have a complete understanding applying to all legislation that consult means to consult and have regard to. I should be very happy if that were retrospective to the year 1600. However that is achieved, the need to have regard to views expressed is absolutely self-evident, and if it is not self-evident in the drafting, then it should be made evident.
Earl Ferrers: My Lords, I agree with the noble Baroness, Lady Hamwee, that if you consult with somebody, it is self-evident that you must have regard to what they say. Although I understand the reasons which have been put forward so courteously by the noble Lord, Lord Carter, I understand too exactly what he is getting at. He infers that if you consult with someone you must have regard to what he says. Not only in my department but right across Whitehall, if you consult people of course you take note of what they say. It does not mean that you must agree with what they say. My fear is that, if this provision were included, it might imply that you should give preference to that sort of consultation or those people whom you have consulted as opposed to anyone else.
I find it very difficult to believe that either my noble friend Lord Stanley, for whom I have very great respect, the noble Lord, Lord Carter, or the noble Baroness, Lady Hamwee, would think that consultations with people would be carried out and then precisely no regard would be had to what those people had said. Frankly, that would be a farce. The Government have been criticised for a number of things but I do not believe that they have been criticised for being farcical, particularly when they have gone to the point of saying, as a result of pressure from your Lordships, that the Secretary of State should consult housing authorities. It would be unnecessary to have those words on the face of the Bill.
To give the Secretary of State a duty to have regard to the views of those consulted in this particular case could cast doubt on his other duties to consult where no such additional duty is mentioned. It would simply imply that in those areas where it was not mentioned the Secretary of State would not be under an obligation to take account of any views put forward to him. Obviously, that is not what is intended.
The noble Lord, Lord Carter, referred to the Deer (Scotland) Bill where there are duties to consult and there is an explicit duty to have regard to those
844
views. I cite Clause 53(4) and Clause 51(5). I understand the reasoning of my noble friend and the noble Lord, Lord Carter, but I feel that this amendment is unnecessary. We could not possibly consult and then take no notice of those consultations. The inference is that you consult and then throw the answers in the waste-paper basket. That is not practical and it does not happen like that.
Baroness Hamwee: My Lords, before the Minister sits down, perhaps I may say that I take his point entirely that having regard to views does not mean that you agree with them. However, the Minister may care to reflect aloud on the fact that this Bill flows from a White Paper on which the Government consulted. It provoked tens of thousands of reactions, almost all of which were against the Government's proposals for dealing with the question of homelessness. I agree that those were not in the sort of detail to which the noble Lord, Lord Carter, referred. But, as I say, there were tens of thousands of responses on the Government's approach to homelessness, to which we shall turn later, and other matters such as the right to buy. I hope that, from what the Government have said, they were in a position to write cogent, detailed replies to each of the respondents.
Earl Ferrers: My Lords, we are moving to a different matter. The noble Baroness is saying, or implying, that if there are tens of thousands of responses, the Government should make their mind up with regard to those responses because they are copious in number. The noble Baroness knows very well that a lot of people respond to things because they feel strongly about them, but they do not necessarily respond when they are indifferent to them.
To suggest that, because you have tens of thousands of responses, you just brush them on one side is not the case. If somebody fires a bomb into your house, the foundations may shake but you may still be able to live there. When people say terrible things about what the Government are doing, of course they take note, but it does not necessarily mean that they have to participate in that view simply because a lot of people hold it.
My fear is that if you say "you must take note of this" that will imply a precedence over other cases, the implication being that in those cases where you are not obliged to take note you do exactly that—you do not take note—and that is not right.
Lord Carter: My Lords, that was a very good try by the noble Earl but was very unconvincing. If, in fact, it is self-evident, then why not say so? In the normal meaning of the English language "having regard to" does not mean "having to agree with". It means exactly what it says, "having regard to".
The noble Earl has not answered my point. In a Bill which the House will be considering later tonight, there is a requirement to consult. The noble Earl said that there was no explicit requirement to "have regard to" but there is. Subsection (4) states:
"Where the Secretary of State or the commission have carried out the consultation under subsection (2) or (3) above the Secretary of State shall have regard to the results of that consultation".

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The consultation to which the Government say they have a duty to have regard concerns the fixing of a period in each year during which no person shall take or wilfully kill or injure any deer of the sex and species named in the order—that is male and female deer. I am referring to the close season for deer. Are the government really saying that it is important to have consultation with regard to the close season or the open season in which you can kill deer, but that it is not important to have regard to the consultation affecting large numbers of rural tenants and rural landlords? We have had discussions about the importance of rural housing; are the Government really prepared to introduce a requirement for consultation concerning the close season for deer but not on the important matter of rural housing?
Lord Rippon of Hexham: My Lords, the up-shot of this debate is that it is the Deer (Scotland) legislation that should be amended.
Earl Ferrers: My Lords, I am deeply grateful to my noble friend Lord Rippon for such a penetrating intervention. He is quite right.
The noble Lord, Lord Carter, is perfectly fair. If I were in his position I would make such a contrast and preen my feathers for having been clever enough to have discovered it.
If we alter this particular part of the Bill, it will throw into question all the other parts in the Bill which also refer to consultation and which do not contain those words.
The noble Lord, Lord Carter, shakes his head, but there are a number of occasions in the Bill where the Government are obliged to consult. If on this one particular occasion they are obliged to "have regard to" what is said, the implication is that on all the other occasions where they merely have to "consult" there is a difference and distinction between the two. It is much more important to get the equality right throughout the Bill rather than trying to compare it to some other Bill which may or may not be of such importance as the Housing Bill. For continuity and conformity it is much better to remain with the words as they are in the Bill, which I can assure noble Lords will mean that in the end the Government will take note of consultations.
Lord Carter: My Lords, if the noble Earl is so concerned he will have a chance in the other place to add the words "have regard to" where "consultation" appears elsewhere in the Bill.
It is clear that the noble Earl is not going to give way. The deer in Scotland will be a lot happier with his answers than the tenants and landlords of rural housing but, having said that, I do not intend to press the point. We have had a good discussion and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.45 p.m.
Lord Carter Lord Carter moved Amendment No. 6:
Page 12, line 29. at end insert (", unless the order is one to which subsection (6) applies in which case no such order shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.").
The noble Lord said: My Lords, Amendment No. 6 returns to a point we discussed on Report. We were not entirely happy with the answer that the noble Earl gave at that time. He will remember that there was a complex group of amendments which covered a number of areas affecting Clause 17. On reflection, we feel that it would have been better to have had a separate discussion about those matters, which is why we tabled the amendment I have just withdrawn and this one.
I will repeat, briefly, the points we made on Report. We entirely accept that the initial orders which designate the areas to be exempt from the right to buy should be laid under the negative procedure. That is a proper use of the negative procedure. But we believe that the changing of the designation—in other words, removing the exemption—should be by means of the affirmative procedure, and should be discussed by Parliament in an open debate.
The Minister will give me two replies, so I shall attempt to deal with them before he does. The first one will refer to parliamentary time. He will say that the affirmative procedure will use up parliamentary time. In Hansard on the 11th July 1996 the noble Lord said:
"Once the rural exemptions are made, we do not intend continually to revisit them. For the great majority of settlements the exemptions are never likely to change".—[Official Report, col. 503; 11/7/96.]
In a letter to the noble Lord, Lord Shuttleworth, the chairman of the Royal Development Commission, Mr. David Curry made the point that:
"As already explained, we have no intention of removing exemptions, except in special circumstances, but they cannot be immutable."
Obviously the change of designation will be a very rare event, so I hope that the noble Earl will not try the argument about the use of parliamentary time.
The second point, which did cause us some concern and about which we had an extremely interesting discussion, is the point of hybridity. The noble Earl said:
"If we were to use a positive resolution, it could raise a curious spectre of hybridity".—[Official Report; col. 504; 11/7/96.]
I was not aware, until the noble Earl pointed it out, that hybridity procedures apply only to affirmative orders. It seems to be a curious lacuna in the procedure of the House that affirmative orders are the only ones where hybridity applies.
I have checked with legal advisers in the House and, if the Government are concerned about hybridity, there is a very easy way to resolve the problem. Since 1983 the Government have introduced large numbers of de-hybridising amendments—it sounds extremely painful, I must admit—to deal with the question of hybridity of affirmative orders. So the Government are experienced in this. I am told by the highest authority that all the Government have to do, if they accept this amendment, is introduce a de-hybridising amendment in

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the other place. It is a standard procedure, perfectly straightforward, and therefore the hybridity argument does not run because there is an answer which can be easily set in place in the other place and which has been done before.
The change of designation will affect social landlords, a large number of tenants and those landowners who have given the land in the first place. It is important that the Government, to use their own words, on the very rare occasions when they intend to change the designation, should bring forward an order under the affirmative procedure so that the change of designation can be discussed in both Houses.
We have said that the consultation procedure under subsection (6) is welcome. We are dealing with the property right of individuals and it is appropriate that such orders should be consciously approved by Parliament. That objective can be achieved by the words which we propose should be added to subsection (7). Orders of this kind will attract the affirmative resolution procedure whereby each House of Parliament has to approve the order before it can come into effect.
As I said, I have taken advice on the hybridity point. That does not apply. The argument about the use of parliamentary time does not apply either. I hope that, on behalf of the Government, the noble Earl will be able to accept the amendment. I beg to move.
Lord Stanley of Alderley: My Lords, those of your Lordships who were present at Report stage when my noble friend Lord Ferrers gave the Government's reason for not accepting a somewhat similar amendment will, I am sure, agree that he gave one of the best and indeed most amusing performances that I have ever heard from him. He has quite a record of doing that and of getting the Government out of difficulty by using his charming manner. Unfortunately the answer he gave lacked a certain logic. Indeed, in relation to the previous amendment regarding the Scotland legislation to which he replied at that stage, he was completely caught out. I tried to tell him about that before he came into the Chamber, but unfortunately I did not see him.
Some less charitable than I might say that on the previous occasion when we discussed this matter my noble friend was struggling through a nonsensical government brief. He intimated, for instance, that there was no difference between an affirmative resolution and a negative resolution because they could both be debated. I do not think that is quite the case as regards the House of Commons. Here, it is a question of persuading the Whips to give time for that. Sometimes the Whips are not always keen to do that and can be awkward. My noble friend also said that more parliamentary time would be taken up—as the noble Lord, Lord Carter, said—by an affirmative order than by a negative order. I do not follow that argument. Either it implies a refusal by the Whips to give time to pray against a negative order, or it goes against what my noble friend Lord Mackay said in Committee; namely, that such an order would he rare indeed.
Therefore I hope your Lordships will agree that my noble friend's argument so far has much charm but little substance. As the noble Lord, Lord Carter, said, my
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noble friend played the hybridity card at col. 504 of the Official Report. Quite frankly, I fail to understand why an affirmative order can be hybrid but a negative one not so. The Public Bill Office tried to explain it to me, but I remain unconvinced. I leave it to my noble friend to explain it to me in words of one syllable, and in particular to explain whether all affirmative orders can be hybrid, in which case your Lordships could have a day or two's work altering all the Bills that are affected by that. As the noble Lord, Lord Carter, implied, I believe that the Commons has a duty or a right to make what it thinks might be hybrid into something that is not hybrid. That procedure could be adopted. I hope that my noble friend will address that problem when he replies.
Earl Ferrers: My Lords, my noble friend commenced his remarks with deep flattery when he said that he thought I had made such an amusing speech that I had dug the Government out of a hole. All I can say, with equal flattery, is that I have never heard such rubbish in all my life from my noble friend, and that is saying quite a lot.
Noble Lords: Oh!
Earl Ferrers: My Lords, my noble friend talks a lot of good sense too, but the important thing is to make sure that good sense overtakes what is not good sense. On this occasion my noble friend has slipped below his normal standard. I wondered whether the noble Lord, Lord Carter, had spoken to his noble friend Lord Williams. Perhaps he has not done so. Perhaps he was not present when his noble friend Lord Williams said this afternoon that we should not discuss again that which has already been discussed. We are doing precisely that. At the instigation of the noble Lord, Lord Carter, we discussed this matter on a previous occasion. However, he has tabled a virtually identical amendment today.
The noble Lord, Lord Carter, does not want me to say that there will be no parliamentary time to discuss the measure. He is saying that he does not want me to use that argument as regards an affirmative resolution procedure. I return to the same argument as I used on the previous occasion when we discussed this matter. There are many occasions when there are affirmative resolutions and many occasions when there are negative resolutions. Almost certainly, on every occasion when these measures arise, someone pops up—it does not matter what Bill it is—and says, "Oh, this is subject to a negative resolution but it ought to be subject to an affirmative resolution; otherwise people will not have the time to discuss things".
If I may say so, that is an old chestnut. There are some matters which are of considerable concern and which should be subject to the affirmative resolution procedure. However, there are some matters which are subject to the negative resolution procedure. What that means is that the order has to be laid and one has to wait for 40 days, within which time a person can pray against it. This is exactly the kind of occasion where I would suggest that the negative resolution procedure is the best way to proceed.

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If we did not have the negative resolution procedure, we would find that your Lordships' time and that of another place was taken up in considering and talking about a whole lot of orders which were subject to the affirmative rather than to the negative resolution procedure. The noble Lord, Lord Carter, may say, "Do not give me that line today". However, that is exactly the line that I am giving him. Certain matters ought to be subject to the affirmative resolution procedure and others ought to be subject to the negative resolution procedure.
My noble friend said that he wanted to know what was meant by hybridity. I do not know whether he asked the Clerk of the Parliaments about that or whether it was the staff in the Parliament Office. I believe he said that he could not understand a word of the explanation. I am not surprised. Sometimes these matters are difficult to absorb. If my noble friend cannot understand an explanation given on hybridity by officials of the House, I do not think I am the right person to try to lecture him about it. I suggest that he has another go. Hybridity arises on affirmative orders but not on negative orders. Both the noble Lord, Lord Carter, and my noble friend tried to make that a cause of ribaldry. However, the risk of hybridity can arise on rural orders because they remove a rural exemption. That could be seen as affecting adversely individual interests rather than only classes of interest. For example, one might remove a rural exclusion for a parish and that might be seen adversely to affect the individual interests of the one or two landlord associations working in that area. That is how the element of hybridity arises.
I believe that the amendment is unnecessary and undesirable. There is a perfectly good negative resolution procedure. My noble friend Lord Stanley of Alderley was correct to say that the provision will not arise all that often. If he keeps his eyes open—I am not suggesting that he is falling asleep; I mean he should keep his eyes open with regard to what is on the Order Paper—and if those who advise him do that, he will know in plenty of time whether there is anything which Parliament ought to discuss. Frankly, I do not think there will be many matters which Parliament ought to discuss as regards these orders. However, if there is anything to discuss, there will be an opportunity to discuss it.
Lord Carter: My Lords, I am extremely grateful to the noble Earl for those comments. Those of us who have lived and worked in the countryside for a long time have seen a number of examples of rural hybridity. I am not attempting to deny the possibility of hybridity. However, it is interesting that the noble Earl did not attempt to deal with the point that I made. I am told that since 1983 the Government have been continually dehybridising affirmative resolution procedure orders. Apparently it is an acknowledged technique. All I am suggesting is that if they are concerned about hybridity—they are entitled to be concerned—there is an easy way to deal with it which is standard procedure; namely to introduce an amendment in the other place which would remove the risk of hybridity.
850
The noble Earl was being, for him, a little unfair when he said that I was reintroducing an argument that we had discussed at Report stage. The Companion to the Standing Orders states:
"The principal purpose of amendments on Third Reading is to clarify any remaining uncertainties".
We were uncertain about hybridity. We took advice and we were told the way to deal with it. We presented the matter to the House. The noble Earl has not tried to deal with that point at all.
We hear the argument about parliamentary time on every Bill. We hear the arguments about the affirmative and the negative procedures. In the Government's own words this procedure will be used only rarely. If one is to change a designation, as well as consultation with all the interested parties, which the Government have accepted—they introduced their own amendment on that, although they did not accept the point about having regard to certain views—we feel it is important that the orders should be discussed by both Houses. I am afraid that the noble Earl has not really answered the point that I made. Therefore I should like to take the opinion of the House.
4 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 120; Not-Contents, 145.

Division No. 1

CONTENTS

Addington, L.

Ezra, L.

Archer of Sandwell, L.

Falkland. V.

Ashley of Stoke, L.

Farrington of Ribbleton, B

Avebury, L.

Fisher of Rednal, B.

Barnett, L.

Gallacher, L.

Bathurst, E.

Geraint, L.

Beaumont of Whitley, L.

Gladwin of Clee, L.

Berkeley, L.

Graham of Edmonton, L.

Birk, B.

Grey, E.

Blackstone, B.

Hamilton of Dalzell, L.

Blease,L.

Hampton, L.

Borrie, L.

Hamwee, B.

Bruce of Donington, L.

Harris of Greenwich, L.

Callaghan of Cardiff, L.

Haskel, L.

Carmichael of Kelvingrove, L.

Hertford, M.

Carter, L.

Hollis of Heigham, B.

Castle of Blackburn, B.

Hooson, L.

Chapple, L.

Howie of Troon, L.

Cledwyn of Penrhos, L.

Hughes, L.

Clinton-Davis, L.

Hylton-Foster, B.

Cocks of Hartcliffe, L.

Jay of Paddington, B.

Congleton, L.

Jeger, B.

Dainton, L.

Jenkins of Hillhead, L.

Dean of Beswick, L.

Jenkins of Putney, L.

Dean of Thornton-le-Fylde, B.

Kennet, L.

Desai, L.

Kilbracken, L.

Donaldson of Kingsbridge, L.

Kinloss, Ly.

Donoughue, L.

Listowel, E.

Dormand of Easington, L.

Lockwood, B.

Downshire, M.

Lovell-Davis, L

Dubs, L. [Teller.]

McGregor of Durris, L.

Eatwel), L.

McIntosh of Haringey, L.

Elis-Thomas, L.

Mackie of Benshie, L.

Erroll, E.

McNair, L.

Ewing of Kirkford, L.

Mar and Kellie, E.

851

Masham of Ilton, B.

Seear,B.

Mason of Bamsley, L.

Shaughnessy, L.

Mayhew, L.

Shepherd, L.

Merlyn-Rees, L.

Simon, V.

Meston, L.

Smith of Gilmorehill, B.

Milner of Leeds, L.

Stallard, L.

Molloy, L.

Stanley of Alderley, L.

Monkswell, L.

Stoddan of Swindon, L.

Morris of Castle Morris, L. [Teller.]

Strabolgi, L.

Taylor of Gryfe, L.

Mottistone L

Thomas of Walliswood, B.

Murray of Epping Forest, L

Thomson of Monifieth, L.

Murray of Epping Forest, L.

Tliurlow, L.

Nathan, L.

Tonypandy, V.

Nicol, B.

Tope, L.

Ogmore, L.

Tordoff, L.

Orr-Ewing, L.

Wallace of Saltaire, L.

Palmer, L.

Warnock, B.

Prys-Davies, L.

Whaddon, L.

ReaL.

Wharton, B.

Richard, L.

White, B.

Robson of Kiddington, B.

Wigoder, L.

Rochester, L.

Williams of Crosby, B.

Russell, E.

Williams of Elvel,L.

Sainsbury, L.

Williams of Mostyn, L.

Savile, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Aberdare, L.

Donegall, M.

Addison, V.

Eden of Winton, L.

Aldington, L.

Elles, B.

Alexander of Tunis, E.

Elliott of Morpeth, L.

Archer of Weston-Super-Mare, L.

Ferrers, E

Arran, E.

Finsberg, L.

Ashbourne, L.

Flather, B.

Astor of Hever, L.

Fraser of Carmyllie, L.

Balfour, E.

Gainford, L.

Belhaven and Stenton, L.

Gardner of Parkes, B.

Bemers, B.

Geddes, L.

Blake, L.

Gibson-Watt, L.

Blaker, L.

Gisborough, L.

Blatch, B.

Gray of Contin, L.

Bledisloe, V.

Hailsham of Saint Marylebone, L

Blyth, L.

Harlech, L.

Bowness, L.

Harmar-Nicholls, L.

Boyd-Carpenter, L.

Harris of Peckham, L.

Brabazon of Tara, L.

Hayhoe, L.

Braine of Wheatley, L.

Henley, L.

Campbell of Croy, L.

Holderness, L.

Carnegy of Lour, B.

HolmPatrick, L.

Carnock, L.

Hooper, B.

Charteris of Amisfield, L.

Hothfield, L.

Chelmsford, V.

Howe, E.

Chesham, L. [Teller]

Inglewood, L.

Clanwilliam, E.

Jenkin of Roding, L.

Clark of Kempston, L.

Johnston of Rockport, L.

Coleraine, L.

Kinnoull, E.

Coleridge, L.

Lauderdale, E.

Constantine of Stanmore, L.

Leigh, L.

Cooke of Thomdon, L.

Lindsay, E.

Courtown, E.

Lindsey and Abingdon, E.

Craig of Radley, L.

Liverpool, E.

Cranborne, V. [L Privy Seal]

Long, V.

Cranbrook, E.

Lucas, L.

Crathome, L.

Lucas of Chilworth, L.

Crickhowell, L.

Lyell, L.

Cross, V.

McColl of Dulwich,L.

Cuckney, L.

McConnell, L.

Cullen of Ashbourne, L.

Mackay of Ardbrecknish, L.

Dacre of Glanton, L.

Mackay of Clashfem, L. [Lord Chancellor]

Davidson, V.

De Freyne, L.

Macleod of Borve, B.

Dean of Harptree, L.

Merrivale, L.

Demon of Wakefield, B.

Mersey, V.

Derwent, L.

Monk Bretton, L.

852

Monteagle of Brandon, L.

Selsdon, L.

Montgomery of Alamein, V.

Sharples, B.

Montrose, D.

Shaw of Northstead, L.

Mountevans, L.

Skelmersdale, L.

Mowbray and Stourton, L.

Soulsby of Swaffham Prior, L.

Munster, E.

Stockton, E.

Murton of Lindisfarne, L.

Strathcarron, L.

Nelson, E.

Strathclyde,L. [Teller]

Newall, L.

Strathcona and Mount Royal, L.

Noel-Buxton, L.

Sudeley, L.

Northesk, E.

Swinfen, L.

O'Cathain, B.

Terrington, L.

Oppenheim-Barnes, B.

Teviot, L.

Oxfuird, V.

Thomas of Gwydir, L.

Park of Monmouth, B.

Trefgame, L.

Pender, L.

Trumpington, B.

Plummer of St. Marylebone, L.

Ullswater, V.

Quinton, L.

Vinson, L.

Rawlings, B.

Wedgwood, L.

Renton, L.

Westbury, L.

Renwick, L.

Whitelaw, V.

Rippon of Hexham, L.

Wilcox, B.

Romney, E.

Wise, L.

Roskill, L.

Wolfson, L.

Saint Levan, L.

Wyatt of Weeford, L.

Seccombe, B.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.8 p.m.
Clause 42 [Moratorium on disposal of land, &c.]:
Lord Lucas Lord Lucas moved Amendment No. 7:
Page 26. line 28, leave out ("or (2)") and insert (", (2) or (3)").
The noble Lord said: My Lords, I spoke to Amendments Nos. 7, 8, 9, 10 and 11 with Amendment No. 1. I beg to move.
On Question, amendment agreed to.
Clause 56 [Meaning of "the Corporation"]:
Lord Lucas Lord Lucas moved Amendment No. 8:
Page 33, line 41, leave out ("(other than a registered charity)").
On Question, amendment agreed to.
Clause 58 [Definitions relating to charities]:
Lord Lucas Lord Lucas moved Amendment No. 9:
Page 34, line 21, after ("1993") insert (", and "trustee" means a charitable trustee within the meaning of that Act").
On Question, amendment agreed to.
Clause 63 [Minor definitions: Part I]:
Lord Lucas Lord Lucas moved Amendment No. 10:
Page 36, line 19, leave out ("with").
On Question, amendment agreed to.
Clause 64 [Index of defined expressions: Part I]:
Lord Lucas Lord Lucas moved Amendment No. 11:
Page 37, line 56, at beginning insert ("trustee and").
On Question, amendment agreed to.
Clause 66 [Registration schemes: control provisions]:
Lord Lucas Lord Lucas moved Amendment No. 12:
Page 41, line 11, at end insert—
("( ) For the purposes of subsections (4) and (5) an appeal under subsection (3)(d) shall be treated as an appeal against a decision of the authority to refuse the application.").
The noble Lord said: My Lords, this amendment concerns the powers of the court to deal with appeals made by landlords of houses in multiple occupation against local authorities' actions under the new provisions on registration schemes set out in Clause 65.
The point concerns the case where a local authority has not responded within the prescribed time limits to an application from an HMO landlord for the registration of his property. As currently drafted, the clause provides that the landlord may then appeal to the county court. Amendment No. 12 clarifies that in these cases the court can treat this appeal as if it were an appeal against a refusal to register. The court will then have full powers to grant the application as made or as varied in such manner as the court may direct. I beg to move.
On Question, amendment agreed to.
Clause 69 [Information requirements in connection with registration schemes]:
Lord Lucas Lord Lucas moved Amendment No. 13:
Page 46, line 32, after ("(2)") insert ("of the authority's intention to make a scheme or submit a scheme for confirmation").
The noble Lord said: My Lords, in moving the amendment, I speak at the same time to Amendment No. 14.
My noble friend Lord Gisborough suggested in Committee that the requirements for publicity for HMO registration schemes should be extended. I am grateful to my noble friend for raising this matter, and Amendment No. 14 meets the point he made.
In addition to the scheme being available to the public, the register itself will also be available for public inspection. The public would also be able to take copies of entries in the register, for a reasonable fee.
Amendment No. 13 is a paving amendment for Amendment No. 14. I beg to move.
Baroness Hamwee: My Lords, perhaps I may—
Lord Gisborough: My Lords, I thank my noble friend for adding the amendment as a result of the proposal that I put forward.
Baroness Hamwee: My Lords, I wish to ask the Minister a question. However, I wished to give way to the noble Lord, Lord Gisborough, as, in a sense, he was the progenitor of this amendment.
Amendment No. 14 provides for the scheme to be kept,
"for as long as the scheme is in force".
I believe that it will be necessary for the details to be kept available for considerably longer than the scheme may be in force—for instance, if there are prosecutions or civil proceedings. Six years would seem to be the minimum period. I shall be grateful if the Minister will confirm that the provision in the proposed new subsection (4) is merely limited to inspection and is, if I may so put it, without prejudice to the requirement to
854
have the details available for as long as they may be needed for future court proceedings, either civil or criminal.
Lord Lucas: My Lords, indeed, yes, that is my understanding of the wording of the amendment. What we are talking about here is the exposure of the documents to the public, not the underlying requirements on the authority to keep proper records and to keep them for a sensible length of time. I commend the amendment.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 14:
Page 46, leave out lines 39 to 47 and insert—
("(4) After publication of notice under subsection (1) or (2) that a registration scheme has been made or confirmed, and for as long as the scheme is in force, the local housing authority—

(a) shall keep a copy of the scheme, and of the register, available for public inspection at the offices of the authority free of charge at all reasonable hours, and

(b) on request, and on payment of such reasonable fee as the authority may require, shall supply a copy of the scheme or the register, or of any entry in the register, to any person.").

On Question, amendment agreed to.
4.15 p.m.
Lord Gisborough Lord Gisborough moved Amendment No. 15:
After Clause 73, insert the following new clause—
HOUSE IN MULTIPLE OCCUPATION: IMMUNITY FROM DAMAGE CLAIMS
(" . A local housing authority shall be immune from any claim for damages by the tenant or occupier of a house in multiple occupation or any resident in a house in multiple occupation by reason of anything done or not done by the authority in the exercise of their powers under section 352 of the Housing Act 1985 or by reason of any failure on their part to exercise such powers.").
The noble Lord said: My Lords, at Report stage I proposed various amendments which expressed the concern of landlords about local authorities which might act unreasonably in their demands for excessive standards and requirements in relation to the duty of care.
My noble friend the Minister said that those fears were ungrounded because local authorities would be reasonable. I believe that the attitude of local authorities will indeed vary and some in fact will not be reasonable. I can think of certain authorities to which that might apply. There will be cases where the demand to undertake certain works will be economically unviable.
However, let us forget those unreasonable authorities. Let us assume that my noble friend is right and that all authorities are reasonable and require work to be done which could be considered reasonable for the type of house, and so on. There will inevitably be incidents such as fires, and so on. It would then be possible for a tenant to sue the local authority because the local authority was reasonable and did not insist on some specific aspect. There is an accident, and the local authority is sued. The next step will be that all local authorities will insist on every provision in order to protect themselves from being sued.
The amendment simply frees local authorities from the danger of being sued. The local authorities can then afford to take the risk of being reasonable in their requirements regarding work that they insist on being undertaken. I beg to move.
Lord Lucas: My Lords, I am grateful to my noble friend for his flattery. The previous amendments were tabled in response to a point raised by him, as I said. Flattery will get my noble friend a long way but not as far as my agreeing to this amendment.
I do not believe that the duty of care which we are placing on landlords in Clause 73 will affect the liability of local housing authorities. The thrust of case law on this matter, from fields as diverse as building control, social services and education, indicates that as long as a local authority acts reasonably and properly it would not be held liable under a general duty of care for exercising its discretion under Section 352 of the Act. My noble friend clearly believes that this is difficult to establish, but we have to proceed on the assumption that authorities will act reasonably, and will be allowed to continue to act reasonably. That is the basis of so much of our legislation in this area. To date, we have always been justified in proceeding on that assumption.
If a local authority does not act reasonably, landlords of HMOs will be able to appeal against unreasonable enforcement notices, having been forewarned of them by a "minded-to" notice under Clause 76.
I am sorry that I cannot give my noble friend the same encouragement that I was able to give on his previous amendment at Report stage. However, given what I have said, I hope that he will feel able to withdraw his amendment.
Lord Gisborough: My Lords, I thank the Minister for that reply. Who am I to argue about the legal requirements and liabilities of the council? No doubt my noble friend's words will help in any case that may be brought. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 74 [Section 354 direction to be local land charge]:
Lord Lucas Lord Lucas moved Amendment No. 16:
Page 49, line 11, after ("1985") insert ("(power to limit number of occupants of house)").
The noble Lord said: My Lords, the amendment adds to Clause 74 the description of Section 354 of the Housing Act 1985. This conforms to the usual practice when amending existing legislation. I beg to move.
On Question, amendment agreed to.
Clause 79 [Minor amendments]:
Lord Lucas Lord Lucas moved Amendment No. 17:
Page 53, line 2, at end insert—
("( ) In Part IV of Schedule 13 to the Housing Act 1985 (control order followed by compulsory purchase order), in paragraph 22 (application of provisions where compulsory purchase order is made within 28 days of a control order), for "28 days" substitute "eight weeks".").
The noble Lord said: My Lords, Amendment No. 17 is tabled in response to an amendment moved at Report stage by the noble Lord, Lord Williams of Elvel. I said that I accepted it in spirit, and would bring forward a similar amendment at Third Reading.
The amendment relates to the procedures that local authorities must follow after they have made a control order on an HMO, effectively taking over the running of the property from its owner. A control order can be made only where other action to deal with a property in poor condition has been taken, but the property is still below standard and the health and safety of the tenants appear to be at risk. After making the control order, the local authority is then required to prepare a management scheme for the property which must be served on the owner within eight weeks. This can be postponed if, within four weeks of making a control order, the local authority makes a compulsory purchase order.
There is general agreement that this very short four week period leaves the local authority with little time to decide what appropriate action to take to deal with the property. The amendment would extend the time limit from four to eight weeks. The authority then has a clear eight week period during which it must either make a compulsory purchase notice or serve the management scheme on the landlord. I hope that the change will meet the concerns of the noble Lord, Lord Williams. I beg to move.
Lord Williams of Elvel: My Lords, I am grateful to the Minister for introducing the amendment. It meets the anxieties that I expressed on Report, and I am happy to accept it.
On Question, amendment agreed to.
Clause 83 [Determination of reasonableness of service charges]:
Lord Archer of Sandwell Lord Archer of Sandwell moved Amendment No. 18:
Page 57, leave out lines 5 to 33.
The noble and learned Lord said: My Lords, it may be for your Lordships' convenience if, with this amendment, we discuss Amendments Nos. 19 to 23, 25, 99 and 100.
The amendments relate to a matter which was debated by your Lordships in Committee and on Report. I have very much in mind the admonition of my noble friend Lord Williams. It arises because the noble Lord, Lord Lucas, asked for time to consider what had been said. There is not at the moment any evidence that it produced a conversion of Damascus road proportions, but I doubt whether I shall augment my popularity with an unduly long introduction to the group.
For the avoidance of doubt and at the risk of being tiresome, I repeat the declaration of interest which I made at earlier stages. My amendment reflects the deep concern of the Council on Tribunals which first sounded the alarm on the proposals.
In our earlier debates, we sometimes ranged over issues which were wider than the amendments. We considered whether the adjudication process should be funded exclusively by those who had the misfortune to require it, or whether it is a service which should be provided by the community. The noble Lord, Lord Lucas, was kind enough to send me a copy of the letter which he wrote to the noble Viscount, Lord Bledisloe, following the Report stage, confirming that consideration was being given to introducing a policy of full costs recovery in the county court by way of fees charged to litigants. The noble Lord, Lord Lucas, also made the point—it came as something of a shock to me and, I suspect, to other noble Lords—that some 80 per cent. of the costs of the county court service are now funded from litigants' fees. If your Lordships' procedure permitted it—which it does not—I should have liked to cross-examine the noble Lord as to the basis for that statistic and whether the 80 per cent. is heavily subsidised from the debt-collecting part of county court business or whether it represents the issue-led litigation in the county courts. I at least was remiss in not having grasped earlier what was happening to the system of justice. Perhaps we should seize an early opportunity to debate it.
However, that is not the subject of the amendments. What is more relevant and perhaps more worrying is the proposal to introduce that policy to tribunals. It has always been seen as a great advantage of the tribunal system that it did not entail a heavy financial outlay, so litigants were not deterred from pursuing their rights. Back in 1932—and not 1929, as I inadvertently said at Report stage—the Donoughmore Committee reported and I venture to quote what it said:
"In cases where justice can only be done if it is done at a minimum cost, such tribunals"—
by which the committee means all relevant tribunals—
"which are likely to be cheaper to the parties, may on this ground be preferred to the ordinary courts of law".
In 1957, that point was made again by the Franks Committee. If that characteristic of our tribunal system is to be discarded, I believe, as do my noble friend Lord Dubs, the noble Viscount, Lord Bledisloe, and many other noble Lords who participated at an earlier stage—that so fundamental a change should have been preceded by at least a Green Paper, with wide consultation and debate in Parliament. No doubt part of the difficulty is that we have no one authority responsible for funding and administering tribunals. Perhaps I may respectfully suggest that that is another possible subject for future debate.
If the principle is to be breached by a provision inserted into Clause 83 of a Bill on a different subject applying to one part of the jurisdiction of one tribunal, then I suspect we may be likely to find that in the next Bill there will be a similar provision tucked away in Clause 157, relating to part of the jurisdiction of another tribunal. Then there may be perhaps one a week, until our tribunal system has died the death of a thousand cuts.
Clearly, the greatest impact will be on those of small means who need to go to leasehold valuation tribunals to enforce their rights—a facility which this very Bill provides for them. In order to safeguard them, my noble friends Lord Williams and Lord Dubs, the noble Viscount, Lord Bledisloe, and the noble Earl, Lord Kinnoull, have tabled more limited amendments. If we cannot rebuild the dyke, then I hope that at least we can plug the hole. I wish them all well. We may have to decide between those amendments at a later stage in the debate, if it arises.
I doubt whether the Government are likely to be more receptive to their pleas than they were to mine. I too was once a moderate. I began at the Committee stage by offering to settle for a much less ambitious solution, but all to no avail. It seems that what noble Lords find most alarming—understandably so—are the figures quoted by the noble Lord, Lord Lucas, with a cheerful frankness which indicated that the Government have lost all appreciation of the incomes on which many of our fellow citizens live. Applications of the kind for which this Bill provides could give rise to costs of up £2,000. It is sums of that order which the Government contemplate recovering from litigants.
Today, the noble Earl, Lord Ferrers, tabled a number of amendments. If I understand them correctly, they propose that the Secretary of State will not be compelled to set the level of fees at a figure in excess of the cost to the Government of providing the service. The tribunal will not be a profit-making undertaking. I am not sure that I derive much comfort from that since, until they denied it, even I had never accused the Government of so Machiavellian a suggestion. I am sure that they intend that the Secretary of State shall not be compelled to set the amount of fees at a level which ensures full cost recovery. It will be open to him to set the level at something lower. It is comforting that the Government propose to tell the Secretary of State that if a sliver of generosity finds its way to his heart, he could give effect to it. He does not have to be an unrelenting Scrooge. Of course, in fairness, the Bill already gives him the possibility of remitting the liability of some litigants. But, as I understand it, it is at the expense not of the Government but of other litigants. If that is the only limit they intend setting to the proposal, then many litigants—landlords as well as tenants—are in danger of being denied access to justice.
The proposal has received a bad press. Anxieties have been expressed by the Bar Council, the Leasehold Enfranchisement Association and many other bodies who are not notoriously subversive but who believe that the proposal would virtually nullify the availability of the jurisdiction which the Bill confers and which could perhaps be an indication of more denials of justice to come. I beg to move.
4.30 p.m.
Lord Dubs: My Lords, I agree with everything that my noble and learned friend said. I speak particularly in support of Amendments Nos. 18, 19 and 20. It is quite difficult to decide as between the three amendments, given that they all seek to achieve the same end. Before I go into detail, I wish to quote from our proceedings

859
on Report, when the noble Lord, Lord Lucas, dealt with a similar debate about charges for access to LVTs. It is always instructive to see what was said, even if only a few days ago. The noble Lord said:
"I am aware that in the course of giving that answer"—
the rejection of any change in the intended level of fees—
"I have left every noble Lord unsatisfied. As I have sat in my place I have felt the blows land on my body. I shall undertake to show my bruises to my right honourable friend the Minister and to discuss with him what has been said today. However, I do so with no commitment".—[Official Report, 10/7/96; col. 349.]
More bruises will be inflicted on the noble Lord during the course of the next few minutes.
It is fair to say that when we were informed in Committee that fees for access to the leasehold valuation tribunal could be as high as £2,000 a day, there was a great sense of shock—so much so that some of the organisations representing leaseholders said to me afterwards that, if fees were to be at that level, they would effectively deter people from using the tribunal and it might be better to give up the whole idea and use the county courts instead. To set the fees for justice at that level will prevent many people from gaining access to it at all. Many organisations have expressed alarm, and as the different stages of the Bill have proceeded, that alarm has intensified.
Earlier I cited the views of the Bar Council. I wish to say a little more by way of quoting from a document that the council sent to me and other noble Lords. The council states:
"It has always been acceptable for the Courts to impose reasonable charges for the issue of proceedings to deter vexatious litigants. However, it is a cornerstone of our judicial system that litigants should not have to pay for the provision of a judicial service".
It goes on to explain that settlement of service charge disputes is not different from other matters so as to warrant these very heavy charges in relation to leasehold valuation tribunals. The council says many other things, some of which I quoted during our discussions on Report.
As my noble and learned friend Lord Archer said, we are dealing with a radical departure in principle from the way in which there is access to civil courts or tribunals. It might well be the thin end of a wedge. What is worse is that it almost seems that the Government have slipped this matter into the Housing Bill. Although there is reference in the Bill to the LVT being able to charge fees, I know of nobody who anticipated that the fees would be other than at the £20, £30 or £50 level. There was a real sense of shock that for the first time access to a tribunal could be set at such a penal level.
There is a point of principle here. If the Government wish to charge fees for access to tribunals and to the civil courts, and wish those fees to cover the full provision of the court and tribunal system in that respect, it is a matter of such significant principle that it should be debated in itself. It represents a big change. We should not change the practice of hundreds of years as the by-product of a very complicated housing Bill. It is wrong that we should make such a big change almost
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inadvertently, as a result of its being slipped in. I hope the House will see fit to accept one of these three amendments when the time comes.
Baroness Hamwee: My Lords, my name is also down to the amendment tabled by the noble and learned Lord, Lord Archer. The House should be truly grateful to him. I was quite staggered when points he made at earlier stages of the Bill led to the revelations—I do not think that is expressing it too strongly—as to the implications of the costs regime for the tribunal. When I first read the Bill I did not realise this matter needed to be prodded in the way in which the noble and learned Lord has done.
Justice deferred is justice denied. Justice denied through cost is just as much a denial as failing to provide a tribunal to deal with the matter. As the noble Lord, Lord Dubs, said, this is a major issue. It should not be dealt with in connection with one tribunal, singling out those proceedings from others, "slipped in" (which is not an inaccurate description) in a Bill such as this.
If we are moving towards a regime of charging for justice, as these provisions seem to suggest, it is an idea that I believe the House would wish to discuss as a matter of principle. It would not wish the regime to be applied to this one tribunal and this one unfortunate group of people, who run the risk of being denied justice because they happen to be seeking it in a particular area.
I hesitate to accuse your Lordships of cynicism, but it would be cynical for this House to approve the passage of a Bill providing for rights while at the same time making those rights inaccessible as a result of the costs of achieving them.
Viscount Bledisloe: My Lords, Clause 83 of the Housing Bill is hardly the place one would expect to find a radical amendment to the judicial philosophy of this country. Nonetheless, by inserting new Section 31B into the Landlord and Tenant Act, the clause as drafted requires fees to be fixed so that those who applied to the leasehold valuation tribunal to have their services adjusted shall pay the entire cost of that service: buildings, staff, chairman and, as the noble Lord, Lord Lucas, charmingly put it, down to the milk for the office cat. By means of a very modest amendment tabled today, the Government now graciously say that the cost will not be more than that; that is, they will take only 99 per cent. of the cost of the milk for the office cat and not 100 per cent. of it.
These proposals are a radical departure from the entire philosophy on which this country has been run for a very long time. The House should be very grateful to the noble and learned Lord, Lord Archer of Sandwell, for discovering this poison pill tucked away in this remote provision.
Until today, every citizen has had access to the entire judicial system, courts, tribunals, etc., on payment of only a modest fee. But for some reason those who wish to challenge their service charges will, according to the Government, have to do something entirely different. According to the noble Lord, Lord Lucas, they will have to pay up to £2,000 a day for the hearing, and do so in advance.

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By contrast, under what I understand to be the rules for county court fees, such applicants would have to pay £115 in total, however many days a hearing ran. The rise from £115 to £2,000 per day is part of a measure proposed by the Government as a cost-effective method of resolving disputes on service charges. The main reason why I am concerned does not relate to the effect on the unfortunate individual leaseholders, but to the whole principle and nature of this provision, tucked away in a remote clause of the Bill.
We are told that the Government wish to have an entire system of "full cost justice". So be it. If that is what they want, let them introduce a Bill to that effect. Let us see and debate the various consequences and safeguards; and let us hear the considered views of judges, lawyers, litigants, etc. Let us tackle the problem face on, in its entirety.
I suggest to the House that it is unacceptable to make this system of full-cost justice apply to only one class of litigant and to do so by this remote clause. As far as I am aware, not one of the judicial Members of this House was aware of this clause until after the Report stage last Thursday. The leading judges had neither been consulted nor had they had any opportunity to comment on this radical departure from our traditional principles. Therefore, for my part I make no apologies for raising this important matter at Third Reading.
In the Official Report of 10th July (at col. 348), in replying to the debate, the noble Lord, Lord Lucas, said,
"there is no overwhelming case for a disputes procedure of this kind between landlord and tenant to be a burden on taxpayers".
With the greatest respect to the noble Lord, he appeared to be entirely unaware that every other public disputes procedure of any kind whatsoever is just that. It is paid for by the taxpayer and not by the individual litigant.
In his very courteous letter, for which I thank him, the noble Lord suggested that for the county court the fees currently received covered 80 per cent. of its costs. But with respect to him, that is a complete red herring. I am not sure how his figures are calculated, but if they are correct that is because a vast number of purely routine debt-collecting summonses are issued for a fee and involve no hearing at all because, on receipt of the summons, the defendant pays up. There is no relevance here. What is plain is that the present fee in the county court for a case which goes to hearing (£115 in total) bears no resemblance to the actual cost of the service. There is no judicial service where the litigant has to pay the full cost of his hearing.
On the last occasion the noble Lord, Lord Lucas, was—and, from his letter, I gather he still is—entirely unable to explain why this type of dispute alone is singled out for this treatment. It is not apparent to me why tenants who want their service charges reduced are to pay full costs while multinational companies in commercial or patent disputes, or wealthy citizens seeking to devise ingenious tax-avoidance schemes, merely pay county court fees of a very modest amount while the remainder is paid by the taxpayer. The distinction does not seem self-apparent for that reason. My suggestion to the House is that this is an entirely
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unacceptable derogation by a backdoor from a general principle of great importance. If it is to be altered it must be altered openly, after full debate and upon a rational and coherent basis.
I suggest that Amendment No. 20 in my name will achieve that. It restricts fees to the same level as those payable in the county court. Unless, in the Government's normal way, they suggest that that is defective because there will not be comparable fees in the county court, it allows the Secretary of State to decide what, in his opinion, those fees would have been so that he does not have the problem that there is no exact analogy. I do not believe that the drafting point will do any good.
If my amendment is accepted, for the moment a tenant applicant will pay no more than he would have paid in the county court prior to this so-called cost-effective exercise. But if at a later date the Government get through a general Bill which says that there shall be full cost justice in all courts, then, under my amendment, they will equally be able to charge those in this tribunal. I hope that the House will accept at least one or other of the amendments.
4.45 p.m.
Lord Renton: My Lords, so far I have not troubled your Lordships with any views on this Bill, but I am very much concerned about what is proposed in the part of Clause 83 we are now discussing. It would be very unfortunate if there were a great disparity between the fees charged before this tribunal, which is under discussion, and those charged in the county court. If we look further down page 57 of the Bill we see that certain cases can be transferred from the county court to the tribunal. If we look over the page we find that the question of service charges and the costs of proceedings in that regard are also under consideration as part of the jurisdiction of the tribunal.
Something more should be done than what is proposed by the Government in Amendment No. 21. That helps very little: it does not fundamentally deal with the problem. We can still be left with this enormous charge. At Report stage on 10th July my noble friend Lord Lucas said that the proceedings might cost as much as £2,000 a day. It is not merely a question of proceedings concerning a whole block of flats. We may be faced with the costs of proceedings dealing with much more limited matters including service charges.
The Government must do something. The noble Viscount, Lord Bledisloe, put his case with great clarity and persuasion. I agree with what he said about the drafting of his amendment. It fits in very well with the power given to the Secretary of State under the new Section 31B of the Landlord and Tenant Act 1985.
I do not wish to labour the point, but if justice is to be done it is important that it should not cost more than is reasonable. It is not only that. We should not, by statute, introduce a great difference in the treatment of people who go before the county court and those who go before the tribunal. It would be absurd to make such a difference. The Government had a great deal of representation made to them from all parts of the House at Report stage. I hope that they have considered the

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matter carefully. Now that a workable, constructive, positive suggestion has been put forward by the noble Viscount, I hope that the Government will consider that that is the best solution to a difficult problem.
Earl Russell: My Lords, I have never been woken up from a deep sleep by somebody sticking a pin in me, but if I were, I dare say that the effect would be very like that of listening to the speech of the noble and learned Lord, Lord Archer of Sandwell. I agree with every word that the noble Lord, Lord Renton, has just said on this subject. I would like to ask one question by way of clarification. When we hear that the costs shall not exceed the costs of providing the service, does that mean the immediate and direct costs of providing the service or are they to be defined to include overheads as in the case of the photographic charges at the Public Record Office? It received so many complaints on the subject—
Baroness Gardner of Parkes: My Lords, with the leave of the House, perhaps I may say to the noble Earl that we have had the answer before. The costs will include every penny down to the cost of the milk for the office cat.
Earl RussellMy Lords, I am most grateful to the noble Baroness. I apologise for not being here at the previous stage of the Bill. I have been occupied with other business from time to time. That makes more relevant the example that I was about to quote as regards photographic charges of the Public Record Office. Those caused such surprise that a Parliamentary Answer given in this House was stuck up beside the cashier's desk in the photographic office. It explained that the costs were meant to cover the overheads of the office. I am not sure whether there is an office cat, as the noble Baroness suggested. The noble and learned Lord who gave that answer is present in the Chamber. I apologise for not having given notice, but I did not know that this business would arise.
It has been a matter of public policy from the beginning of the limits of legal memory, if not before, to encourage people to have recourse to law because the alternative is for them to take the law into their own hands. I trust that that object of public policy has not now been abandoned.
Lord Roskill: My Lords, I had not intended to take part in this discussion, but perhaps I may venture to say how very much I agree with every word that has fallen from the noble and learned Lord, Lord Archer of Sandwell, and from the noble Viscount, Lord Bledisloe. Some of us were brought up on the principle that it was wrong to sell and to deny justice. That principle goes back, if I am right—the noble Earl, Lord Russell, will correct me if I am wrong—to 1216. If you sell justice, you deny it to anybody who cannot afford to pay that price.
During what I am afraid has been a rather long career at the Bar and on the Bench, I watched a tendency develop, with which I have had great sympathy, to remove specialist cases away from the jurisdiction of
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the courts to specialist tribunals in the hope that they can there be dealt with much more swiftly and much more cheaply, avoiding some of the endless arguments and delays which, unfortunately, proceedings in court at any level are doomed to suffer.
That principle is being challenged if, in sending such disputes to that particular tribunal, 100 per cent, of the cost including, to quote the noble Viscount, the milk for the office cat, is to be charged to the litigant, That is a denial of justice. It is utterly wrong. And it is even more wrong to slip such a provision into this Housing Bill because, as has been said by more than one speaker, it raises a major question of principle. If that question of principle is to be dealt with, it should be done openly and in a Bill dealing with that matter, not in a Bill of immense complication, such as this.
Lord Gisborough: My Lords, I should like briefly to support the amendment. Most of the cases will involve rogue landlords and most of those applying for cases will be less affluent tenants. There is no doubt but that the rogue landlords will use an extension of a case as a threat, knowing that the cost will be out of the reach of the less affluent tenant. There may well be a case for charging a modest fee to stop frivolous recourse to the law, but in principle I support the amendment.
Baroness Gardner of Parkes: My Lords, as we are speaking to so many amendments at once, matters are becoming slightly confusing so I should like to run through each amendment in the group separately.
The noble and learned Lord, Lord Archer, moved Amendment No. 18 with which I have great sympathy, but I would have preferred it if he had sought to eliminate the provisions of Clause 83(3) from line 14 on page 57. There is perhaps a case for making a reasonable charge, as happens with industrial tribunals where someone can be asked to pay a deposit of £150 if it is thought that the case might waste the tribunal's time.
I find subsection (3) of Clause 83 most unacceptable. Amendment No. 19, tabled by the noble Lord, Lord Dubs, is most interesting. It seeks to provide that there shall be no charge until the county court fee is payable.
The amendment which I support most strongly, however, is Amendment No. 20 which stands in the name of the noble Viscount, Lord Bledisloe. It is an excellent provision because, as I understand it from the noble Viscount's introduction, no charge will become payable until the matter becomes a general legal procedure. That would trigger the matter being brought into the tribunal system. I hope that I am right in my interpretation.
My noble friend Lord Kinnoull is about to speak to his amendment which seeks to provide for a charge to be limited to £500. Although I doubt whether an amount should be specified on the face of the Bill—it will soon be out of date—it might not be a bad thing to have such a sum specified in regulations.

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On 18th June, the first time this matter was raised, I asked my noble friend Lord Lucas the following question:
"Can my noble friend tell me whether, under Clause 79, an individual acting on his own behalf, and at comparatively low cost, can go to leasehold valuation tribunal to query these matters, or will that be an expensive process?".
My noble friend replied:
"How expensive the action is depends upon the complexity of the case. We believe that the basic charge will be about £500. In relation to a £5,000 service charge for each individual that does not seem excessive".
However, many of the service charges queried will relate to much smaller sums. My noble friend continued:
"Any individual tenant can apply to the leasehold valuation tribunal or a number can get together as a body and challenge the matter. The cost is the same. The cost may be £500 for something simple or £2,000 a day for a more complicated case".—[Official Report, 18/6/96; col. 178.]
Those figures were quoted again on Report, and have been mentioned again today.
If there is to be a fee—whether it be £150 or £500—it is essential that people know in advance what that fee is. The fee should be the same whether the case lasts one day or many days. As has been said, anyone who is skilful enough or who thinks that it is in their interests to do so can easily prolong a case. Indeed, my experience of industrial tribunals is that some chairmen take very much longer to hear a case than others because they are not so good at ensuring that those who give evidence keep to the point. It is most important that. even if there is a fee, it should not be levied on a daily basis.
Tenants must know where they stand. They must know the cost of having a case heard so that they can decide whether it is worth having it heard at all. There is no doubt but that at a later stage tenants, particularly tenants who lose, will have to pay their landlord's costs because those costs will be included as a legitimate expense and will be added to the next service charge. That point has not previously been made, but I am sure that that is likely to happen.
I have no direct interest to declare, but there is nothing to say that some day I shall not want to use the tribunals. That is why I want to see a fair system. We have heard some effective arguments about whether we want justice to continue in the tradition of the United Kingdom—at low cost, not at the cost of providing the service. That is why I support the amendment in the name of the noble Viscount, Lord Bledisloe.
Lord Ackner: My Lords, it was only yesterday at a garden party that the noble and learned Lord, Lord Archer of Sandwell, made me aware of the proposed amendment and asked me whether I would support it. I do so enthusiastically because I have observed a disturbing tendency in the Government to be myopic about making the access to justice illusory.
We recently debated the Asylum and Immigration Bill. We all know that there is a right of appeal—an important right given to the individual who has failed in
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his application. But we all know also that it is now an illusory right because the individual is cut off from all financial support and is not allowed to work. If he is to exercise that right, he must do so on some rather odd starvation basis.
Recently, we heard about new legal aid proposals—no doubt we will debate them next Session—which make access to justice for those of little means almost impossible. A detailed article in The Times last week by Professor Zander spelt this out in detail. We now face the prospect of another right of access to justice being made illusory. A person is told that of course he can go to the tribunal but if he does so he will have to find a sum of money that he cannot afford or one which makes it stupid for him to risk the expense in which he will be involved. Therefore, I wholly support the criticisms that have been made, and in particular I support the amendment moved by the noble Viscount, Lord Bledisloe.
5 p.m.
Lord Murray of Epping Forest: My Lords, it is astonishing that, after the unanimity of concern about these issues expressed at Report stage from every corner of the House—as acknowledged by the noble Lord, Lord Lucas—the Government should not have seen the light, even the red light, indicated by your Lordships at that stage. All of the arguments advanced today were rehearsed, albeit not as fully, at that stage. I can only assume that the Government's obduracy stems from the fact that they are firmly attached to securing the principle that is under attack this afternoon.
Our concern cannot stop at the effect of this matter on leaseholders who go to these tribunals. This is a precedent which apparently the Government intend to build upon and will quote in future in relation to other tribunals, perhaps even the courts. Let us make no mistake about what we are to decide this afternoon. We are setting a precedent for a number of people, some of whom, while they need justice just as much as leaseholders, are less capable of buying the justice which they need and deserve. Are we to look forward to people going to industrial tribunals in particular and facing the same charges, impositions and requirements to buy justice that they previously had free of charge? That is precisely what we are deciding this afternoon. Make no mistake about it: this will be used as a precedent unless it is now nipped in the bud.
The Earl of Kinnoull: My Lords, on the previous occasion that this matter was discussed we heard powerful advocacy from the noble and learned Lord, Lord Archer, and the noble Viscount, Lord Bledisloe. They have achieved the same success today, but their efforts have been added to by a number of distinguished noble and learned Lords. On that occasion my noble friend said that he had his heart in his boots, that he would take away and consider what had been said and come back with his own amendment. In fairness to him, that is what he has done. The question is whether that amendment goes far enough. No doubt he will explain it later.

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The purpose of Amendments Nos. 22 and 23 is to provide a base figure—which has been discussed before—so that leaseholders who choose to use this new tribunal on the issue of service charges have an understanding of their maximum commitment in terms of costs. I am not wedded to the figure of £500; I would much prefer £150, £100 or nothing. My first option is to support the noble and learned Lord, Lord Archer. My second option is to support the noble Viscount, Lord Bledisloe.
In correspondence which he passed round to those who took part in the earlier debate, my noble friend explained that there would be a consultation period in the autumn. I assume that, as a result of that, he will come up with an answer to the problem. I hope that tonight he will be able to give an undertaking that mention will be made of clear guidance figures either in the guidance or in some government statement on the issue, so that leaseholders will know whether or not they should use the tribunal or perhaps the county court. It would be a great shame if the new tribunal was lost because it was prohibitively expensive. It has many good ingredients. As a surveyor I recognise those ingredients and its expertise. I hope that it will go forward and that my noble friend will be able to convince the House by his amendment and undertakings that the Government have very much in mind what is being discussed today.
Lord Coleraine: My Lords, I join other noble Lords in paying tribute to the noble and learned Lord, Lord Archer of Sandwell, for drawing attention to the way in which a fundamental principle is being breached. But we are dealing with the Housing Bill. For the moment I descend to the more mundane question of how his amendment will affect other provisions in the Bill. During Committee stage my noble friend Lord Selsdon moved an amendment which drew attention to the fact that in the county court, where at present service charge disputes are resolved, lawyers' costs, surveyors' fees, and so on, had to be paid. Leasehold valuation tribunals work in an entirely different manner. Costs are not paid.
The amendment of my noble friend Lord Selsdon was hacked by a number of eminent bodies, property owners and surveyors, and the Federation of Private Residents' Associations, to whom I am an honorary consultant. I was embarrassed by having to say that I did not agree with the amendment. To go back one stage, one of my reasons for disagreeing with the amendment was that it was directed to the situation where a recalcitrant tenant who had a dispute over a small part of the service charge could go before the tribunal, spend a long time there and waste a lot of money trying to get an answer in his favour. That was something with which neither the landlords nor tenants organisations was happy because it would considerably interfere with the management of buildings. I disagreed with the amendment because it seemed to me that, given the way in which the Bill was structured, there were provisions which would enable LVTs to deal with frivolous tenants. A tribunal could strike out frivolous claims and would have power to ask the landlord or tenant to pay its fees. It emerged from
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an answer by my noble friend on the Front Bench that the fees would not be £500 a day but could amount to as much as £2,000 a day. if we accepted the amendment proposed by the noble and learned Lord, any tenant could go to a LVT at no cost to himself and foul up the management of his block of flats, or whatever it might be. Nevertheless, I entirely accept the principle that is involved here. I believe that a sum of £2,000 a day is grossly excessive, but probably the correct course is to adopt the amendment proposed by the noble Viscount, Lord Bledisloe. That would provide some disincentive to irresponsible tenants.
Lord Selsdon: My Lords, I had not intended to intervene in this debate. Sometimes I trust the wisdom of my noble friend on the Front Bench, although he has a humour which sometimes exceeds my own. We are talking here about frivolity, wasting time and the cost of justice. If costs are too high justice is never given. Before this matter goes any further I should like to hear from my noble friend. I know that he is an honest and honourable man. Having listened to opinions from all sides of the House, he is in the difficult position of accepting that the status quo is not correct but he is probably not sure what to do next.
Lord Lucas: My Lords, I am on at last! I have listened carefully to noble Lords and looked carefully at the amendments they have tabled. A variety of options have been suggested on how the level of tribunal fees, if any, should be set for service charges, and I shall comment upon them in a moment. Noble Lords will also recall that there was a full debate on this issue on Report. Similar concerns were raised and I said that I would take those concerns away and discuss them with my right honourable friend the Minister.
That I have done, and that is why the Government have tabled Amendments Nos. 21 and 25. They are almost exactly the same as amendments moved on Report by my noble friend Lord Gisborough and the noble Lord, Lord Dubs. The amendments would provide that both for proceedings in relation to service charge disputes and the appointment of a manager, the tribunal will be able to charge a level of fees which, taking one year with another, does not exceed the costs of providing the service.
Before I explain to the House the precise value of that change I should like to remind the House why we have decided to give this important new jurisdiction to leasehold valuation tribunals.
The measures in the Bill to help protect leaseholders were prompted by the unscrupulous actions of a minority of landlords who were imposing unreasonable and in some cases outrageous service charge demands. Any leaseholder who contested those claims was faced with the immediate threat of forfeiture and an action, usually in the High Court. There are measures in the Bill which deal with that abuse, and forfeiture proceedings can no longer be taken until the disagreement over service charges is resolved. That is a very significant step to assist leaseholders.
Leaving the problems of forfeiture to one side, leaseholders currently have the right to challenge unreasonable service charges or to seek to have a new

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manager appointed if they can show fault with the current manager, but those jurisdictions lie with the county court. Because of the complexity and cost of court proceedings—in court proceedings there are lawyers' fees which are likely to be far in excess of those payable in a tribunal—those remedies have been little used. The second stage of our proposals is therefore to switch those cases to the tribunals. That move has been widely welcomed because leasehold valuation tribunals offer a less formal procedure, can bring their expertise to bear, and as my noble friend Lord Coleraine said, do not award costs. It is very important not to lose sight of those key advantages.
The noble Earl, Lord Russell, raised the prospect of tenants and others taking the law into their own hands. They have not yet done so. They will have a far easier time now than they have in the past, and I do not see that as a danger.
The noble and learned Lord, Lord Roskill, was eloquent in his praise of the virtue of tribunals. I am happy to agree with him on that. But I think it is right that there should be provision for fees to be charged by the tribunal. Not to do so would impose a potentially open-ended burden on the public purse, and, as my noble friend Lord Coleraine said, leave open the possibility of oppression by tenants. That, among other reasons, is why we cannot accept Amendment No. 18 moved by the noble and learned Lord, Lord Archer of Sandwell.
Amendments Nos. 19 and 20 would link the scale of tribunal fees in various ways to fees charged in the county courts. We do not find that acceptable either, particularly in the light of the other advantages which will flow from access to the tribunals to which I have referred.
Amendments Nos. 22 and 23 would restrict the fee to be charged to a maximum of £500 or to cover the cost of the service, whichever is the lower. We cannot accept that it would be sensible to place a limitation on the face of the Bill of a monetary amount. That would unnecessarily restrict our scope for designing an appropriate fee structure and then to prescribe the required amounts in an order making power.
I shall turn now to the Government's amendments. They will give us additional flexibility to set an appropriate fee structure which is reasonable and which will deliver affordable justice to leaseholders. I cannot say now what the precise level of fees will be. If our amendments are accepted the Bill will say no more than that the amount raised by fees, taking one year with another, should not exceed the cost of providing the service. Subject to that overall requirement, the tribunals will have the power to waive the fee in part or in whole by reference to the financial resources of the applicant. They may also require any party to re-imburse the other party with the whole or part of the fee. Within that overall framework we will consider and consult on a fee structure which ensures the regime we are proposing operates efficiently and fairly to all. That is the key phrase.
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My noble friend Lord Gisborough raised the subject of rogue landlords getting away with oppression of tenants. If the fee structure operated in a way that allowed that, it would not be operating efficiently and fairly. I can also assure him that if an unscrupulous landlord brings the case, and is shown to have been unreasonable, the LVT has the power to make him pay the fee by reimbursing the tenants.
My noble friends Lord Kinnoull and Lady Gardner of Parkes asked for a fixed fee. They said that it was right that someone appearing before a tribunal should know what fee they were in for. That is very much a matter that we shall take into account when we set the fee structure, but I cannot make any commitments now.
The noble and learned Lord, Lord Ackner, referred to illusory access to justice. The noble and learned Lord, Lord Archer of Sandwell, said it would nullify access to justice. The noble Baroness, Lady Hamwee, said that it would make justice inaccessible. If the fee structure that we put together does any of those things, it would not operate efficiently and fairly.
The maxim which will guide us is the famous one about always keeping hold of nurse for fear of finding something worse. It is clear that if we put together a fee structure which does not enable this part of the Bill to work well and efficiently, and to wipe out the abuses that we have seen in the past, we shall be faced with something much worse, and, indeed, much worse things have been proposed during our discussions by members of the Labour Party, among others, such as the tenants' right to manage.
5.15 p.m.
Lord Renton: My Lords, before my noble friend sits down will he be so good as to say whether he stands by what he said on Report; namely, that in order to be self-financing the fee might have to be about £500 for straightforward cases and possibly £2,000 a day for the more complicated ones? Is he saying that what he has proposed will avoid such high fees or that, despite what he has proposed, they may remain?
Lord Lucas: My Lords, we have suggested that the costs of running the tribunal for those cases could be as high as £2,000 per day. But that does not have to translate directly into a fee which is likely to be payable in any particular case. That will depend on how we arrange the fee structure, the precise nature of that case and its complexity, and the financial circumstances of the applicants. And it is important to remember that in most cases the application will be joined by a number of leaseholders in a block of flats so that the fee payable will be shared among them.
Part of the balance we have to strike relates to public expenditure. As we design a new approach which will have undoubted value for the individuals concerned we have to assess how far any of the cost should properly fall to the public purse. The key point about our amendment is that it would give us that flexibility. I therefore believe that our proposals, taken as a whole, are a sensible way of achieving our overall objective

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of providing a more effective and lower cost route for leaseholders seeking justice where they are faced with unreasonable demands or actions by their landlord.
Noble Lords have said that introducing fees for tribunals should not be slipped into an obscure clause of the Housing Bill. I do not believe that this is an obscure clause of the Housing Bill. I hope that in this House I have never been involved in trying to slip anything into an obscure clause. In Committee we made clear what were our proposals. I am aware that it has caused noble Lords some consternation, but at no stage has there been any attempt by the Government to conceal or misrepresent what we propose to do.
There is also clearly a more general concern that the Government are proposing to institute a fee structure leading to full cost recovery throughout the judicial system. I should like to make a number of points in response to those more general issues. First, the proposals we are making in relation to the resolution of service charge disputes need to be judged on their own merits in terms of the very real improvements they will provide over existing procedures. I make no apology for that.
Secondly, we are not creating a precedent. We do not believe that there is any new issue of principle here. The Government's policy is that the costs of services should be recovered in full from the users of that service. My right honourable and learned friend the Lord Chancellor accepts the principle of full cost recovery for the civil courts and is considering what steps to take to achieve that. More than 80 per cent. of the costs of administering the civil courts is currently recovered through the taking of fees. However that may be made up, it is clear that the principle of cost recovery exists.
The noble and learned Lord, Lord Archer of Sandwell, and the noble Lord, Lord Dubs, questioned the principle of the introduction of charges to tribunals. It is important to distinguish between tribunals which fulfil a role analogous to that of the civil courts where fees are already charged and those performing the role of a genuine administrative tribunal determining disputes between an individual citizen and the state. In the latter case, the arguments for imposing a fee are very different. However, leasehold valuation tribunals fall into the former category of tribunals which, in reality, are much closer to courts. Another tribunal in that category is the lands tribunal in respect of which fees have been charged for a long time and in respect of which there has been a cost recovery target for a decade.
I now turn briefly to the other amendments. Amendment No. 99 is consequential to Amendment No. 140, which was carried at the Report stage, and is required because the necessary amendments to Schedule 5 were inadvertently omitted.
I hope that I have set out fairly and clearly our case and our understanding of the amendments and of our proposals in the matter. I suspect that some noble Lords have yet to be convinced by my exposition. There may be those who have more fundamental reasons for differing with the case we have put forward. I await to hear what the noble and learned Lord has to say.
Lord Ackner: My Lords, before the Minister sits down, he told us that the proposal put forward by the
872
noble Viscount, Lord Bledisloe, was not acceptable to the Government. However, he did not tell us why. Perhaps he can spell out in a little detail the reasons for his proposition.
Lord Lucas: My Lords, a litigant who uses the leasehold valuation tribunal where formerly he could have used the county court will find that he is enjoying considerable financial advantages due to the cost regimes and the structure of tribunals as opposed to the county courts. We do not believe that in those circumstances the entire benefit should fall to the litigant rather than being partaken of by the state in order to offset some of the state's costs.
Baroness Gardner of Parkes: My Lords, before my noble friend sits down, can he explain why the cases of contract have been moved to industrial tribunals and no charge is made to people who move from court to tribunal in those circumstances?
Lord Lucas: My Lords, not just now.
Earl Russell: My Lords, before the Minister finally sits down, will he clarify what he has just told us? He said that the Government have not finally decided on the level of fees and want to preserve flexibility. As this is the last occasion for parliamentary input into the Bill, is he telling us that this flexibility is the litigant's inflexibility?
Lord Lucas: My Lords, I am not sure that I understand what the noble Earl, Lord Russell, is trying to ask me.
Earl Russell: My Lords, is he telling us that as he preserves the freedom to do what he likes the litigant will have no flexibility and must put up with whatever he decides?
Lord Lucas: My Lords, there will be a great deal of consultation before we set the fee structure in this matter.
Lord Archer of Sandwell: My Lords, I am deeply grateful to all noble Lords who have participated in the debate. Perhaps at the outset I may apologise to the noble Baroness, Lady Hamwee. I simply had not noticed that she had added her name to my amendment and I am grateful to her.
It is clear that a number of principles are at stake. From time to time the question of legal aid has been introduced, as it was by the noble and learned Lord, Lord Ackner. Clearly, there is an interface between financial provisions relating to legal aid and financial provisions relating to the payment of fees. There will be other opportunities to discuss that. Indeed, I believe that the noble Earl, Lord Russell, has tabled a Question for tomorrow specifically on that subject.
If I were to attempt to unravel all the themes at this stage your Lordships might be rather less than grateful. However, I believe that there was a temptation for the noble Lord, Lord Lucas, to direct most of his concluding remarks at Aunt Sallies which have never really been put forward. No one suggested that the Government were

873
trying to conceal what they were doing or that they were misrepresenting. What was being said was that Clause 83 of a Bill on housing was not where one would expect to look to see indications of government policy on fees on a full recovery basis. I believe that most of us who made that point still adhere to it. It still seems to us that a principle is being breached which deserves a treatment much fuller than it can have in a Bill on housing.
The noble Lord, Lord Lucas, also said that most of us welcomed the transfer of the jurisdiction to deal with the reasonableness of service charges. Yes, most of us said that right from the outset. What a pity that having made this provision, which has so much going for it, the Government ruin it by ensuring that a large number of litigants cannot take advantage of it. That is the point which is being made.
The Minister gave two answers to the points which were made. If he gave any other answers, I apologise for the fact that I did not discern them. I promise to read what he said. First, he said that when the Government come to consider making the rules they will consider and consult. I should hope so. I should have been surprised if he had announced that the Government did not propose to give any consideration to the matter and had no intention of consulting anyone. It would require a more specific undertaking to set at rest the anxieties which have been expressed today.
Secondly, the Minister said that if access to justice were effectively to operate it would be necessary that it should be efficient justice. I wish I believed that efficiency and justice always necessarily go together. There have been systems of justice which were thoroughly unjust but which could not be faulted on the score of efficiency. If the Government are choosing to set their case on efficiency let us not pretend that that in some way guarantees justice.
I do not propose to say more at this stage. It has been said more eloquently and persuasively by other noble Lords. I say only this as to what we do next. When I saw the amendment tabled by the noble Viscount, Lord Bledisloe, I hesitated because he seeks to link fees payable at the tribunal with fees payable at the county court. I had some hesitation because whatever may be the policy of the Government in relation to the courts, for the reasons given by the noble and learned Lord, Lord Roskill, my noble friend Lord Dubs and other noble Lords, I should have wanted to draw a distinction between the courts and tribunals for this purpose.
However, many of your Lordships have indicated that for a number of reasons, which I fully understand, they are not inclined to support my amendment. I am not sure that at the outset of this series of debates in Committee I should have been inclined to support it. I set it down rather because I became somewhat irritated by what happened to my more moderate suggestions. As a result, I believe that I should give other noble Lords who have tabled later amendments, in particular the noble Viscount, Lord Bledisloe, an opportunity of testing the opinion of the House. For that reason, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 19 not moved.]
Viscount Bledisloe Viscount Bledisloe moved Amendment No. 20:
Page 57, line 16, leave out from ("securing") to end of line 19 and insert ("that the amount of the fees charged is no more than would, in the opinion of the Secretary of State, be chargeable for similar proceedings in the county court.").
The noble Viscount said: My Lords, I have to say that I find the Minister's reply to the previous amendment unacceptable. I urge upon him and the House that this has nothing to do with the desirability of moving these disputes to the tribunal. We all accept that that is a good idea. But the noble Lord then says "Well trust us, we will fix reasonable fees". What he does not address is the fact that Section 31B introduces, on the face of the Bill, an entirely new principle of full cost recovery for fees; and that is a principle which I would suggest to the House is wholly unacceptable.
He has given no reason why the transfer to what is meant to be a cost-effective tribunal should lead to higher fees which will be a new basis. He merely says "Well, in the tribunal you probably won't incur legal fees". I would point out to him that in a county court whether or not you employ a lawyer is optional; but these fees are compulsory however the matter is dealt with.
I am very grateful for all the support I have received. The noble Lord, Lord Lucas, suggested that we should "keep a hold of nurse for fear of finding something worse". I point out to him that "nurse" is the present fee structure we have in the county courts. Therefore, I urge the House to cling to nurse and to vote with me on this amendment. I beg to move.
5.31 p.m.
On Question, Whether the said amendment (No. 20) shall be agreed to?
Their Lordships divided: Contents, 136; Not-Contents, 119.

Division No. 2

CONTENTS

Ackner, L.

Cocks of Hartcliffe, L.

Archer of Sandwell, L. [Teller.]

Coleraine, L.

Ashley of Stoke, L.

Cornwallis, L.

Barnett, L.

Bathurst, E.

Craigavon, V.

Beaumont of Whitley, L.

Dahrendorf, L.

Berkeley, L.

David, B.

Blackstone, B.

Dean of Beswick, L.

Blease, L.

Dean of Thornton-le-Fylde, B

Bledisloe, V. [Teller.]

Blyth, L.

Derwent, L.

Borne, L.

Desai, L.

Boyd-Carpenter, L.

Donaldson of Kingsbridge, L.

Brabazon of Tara, L.

Donoughue, L.

Broadbridge, L.

Dormand of Easington, L.

Brooks of Tremorfa, L.

Bruce of Donington, L.

Dubs, L.

Carmichael of Kelvingrove, L.

Eatwell, L.

Carnock, L.

Ewing of Kirkford, L.

Carter, L.

Falkender, B.

Chapple, L.

Chorley, L.

Falkland, V.

Cledwyn of Penrhos, L.

Farrington of Ribbleton, B.

Clinton-Davis, L.

Fisher of Rednal, B.

875

Gainsborough, E.

Monson, L.

Gallacher, L.

Morris of Castle Morris, L.

Gardner of Parkes, B.

Murray of Epping Forest, L.

Geraint, L.

Nelson, E.

Gladwin of Clee, L.

Newall, L.

Glenamara, L.

Nicol, B.

Graham of Edmonton, L.

Ogmore, L.

Hamilton of Dalzell, L.

Palmer, L.

Hamwee, B.

Perry of Walton, L.

Harris of Greenwich, L.

Peston, L.

Haskel, L.

Plant of Highfield, L.

Hilton of Eggardon, B.

Prys-Davies, L.

Hollis of Heigham, B.

Renton, L.

Holme of Cheltenham, L.

Richard, L.

Hope of Craighead, L.

Robson of Kiddington, B.

Howie of Troon, L.

Rochester, L.

Hughes, L.

Rodgers of Quarry Bank, L.

Hylton-Foster, B.

Roskill, L.

Inchyra, L.

Russell, E.

Jay of Paddington, B.

Ryder of Warsaw, B.

Jeger, B.

St.John of Bletso, L.

Jenkins of Hillhead, L.

Saltoun of Abernethy, Ly.

Jenkins of Putney, L.

Seear, B.

Judd, L.

Shannon, E.

Kennet, L.

Shaughnessy, L.

Kilbracken, L.

Shepherd, L.

Kinnoull, E.

Simon of Glaisdale, L.

Kintore, E.

Stoddart of Swindon, L.

Lincoln, Bp.

Strabolgi, L.

Lockwood, B.

Swinfen, L.

Longford, E.

Taverne, L.

Lovell-Davis, L.

Thomson of Monifieth, L.

Lowry, L.

Tonypandy, V.

McCarthy, L.

Tope, L.

McGregor of Durris, L.

Tordoff, L.

McIntosh of Haringey, L.

Vinson, L.

Mackie of Benshie, L.

Wallace of Saltaire, L.

McNair, L.

Whaddon, L.

Mar and Kellie, E.

Wharton, B.

Marsh, L.

White, B.

Mason of Barnsley, L.

Wigoder, L.

Mayhew, L.

Wilberforce, L.

Merlyn-Rees, L.

Williams of Crosby, B.

Molloy, L.

Williams of Elvel, L.

Monk Bretton, L.

Williams of Mostyn, L.

Monkswell, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Ailsa, M.

Dixon-Smith, L.

Aldington, L.

Donegall, M.

Alexander of Tunis, E.

Downshire, M.

Archer of Weston-Super-Mare, L.

Eden of Winton, L.

Ashbourne, L.

Elibank, L.

Astor of Hever, L.

Elles, B.

Balfour, E.

Elliott of Morpeth, L.

Berners, B.

Feldman, L.

Blaker, L.

Ferrers, E.

Blatch, B.

Fraser of Carmyllie, L.

Bowness, L.

Gibson-Watt, L.

Brentford, V.

Gilmour of Craigmillar, L.

Brougham and Vaux, L.

Gisborough, L.

Cadman, L.

Glenarthur, L.

Caldecote, V.

Gray of Contin, L.

Carnegy of Lour, B.

Greenway, L.

Charteris of Amisfield, L.

Hacking, L.

Chelmsford, V.

Hailsham of Saint Marylebone, L

Chesham, L. [Teller.]

Halsbury, E.

Clark of Kempston, L.

Harmar-Nicholls, L.

Colwyn, L.

Harris of Peckham, L.

Courtown, E.

Hayhoe, L.

Cranborne, V. [Lord Privy Seal.]

Hemphill, L.

Crickhowell, L.

Henley, L.

Dacre of Glanton, L.

Hertford, M.

Dean of Harptree, L.

Holderness, L.

Denton of Wakefield, B.

HolmPatrick, L.

876

Hooper, B.

Park of Monmouth, B.

Hothfield, L.

Perry of Southwark, B.

Howe, E.

Pilkington of Oxenford, L.

Inglewood, L.

Pym, L.

Jenkin of Roding, L.

Quinton, L.

Leigh, L.

Rankeillour, L.

Lindsay, E.

Rawlings, B.

Lindsey and Abingdon, E.

Rees, L.

Liverpool, E.

Renwick, L.

Long, V.

Romney, E.

Lucas, L.

Saint Albans, D.

Lucas of Chilworth, L.

Savile, L.

McColl of Dulwich, L.

Seccombe, B.

McConnell, L.

Shaw of Northstead, L.

Mackay of Ardbrecknish, L.

Skelmersdale, L.

Mackay of Clashfern, L.[Lord Chancellor.]

Soulsby of Swaffham Prior, L.

Stanley of Alderley, L.

Mackay of Drumadoon, L.

Stockton, E.

Macleod of Borve,B.

Strathcarron, L.

Merrivale, L.

Strathclyde.L.[Teller.]

Miller of Hendon, B.

Strathcona and Mount Royal, L

Montgomery of Alamein, V.

Sudeley, L.

Montrose, D.

Tebbit, L.

Mottistone, L.

Thomas of Gwydir, L.

Mountevans, L.

Trumpington, B.

Mowbray and Stourton, L.

Wade of Chorlton, L.

Munster, E.

Wedgwood, L.

Murton of Lindisfarne, L.

Wilcox, B.

Northesk, E.

Windlesham, L.

O'Cathain, B.

Wise, L.

Oppenheim-Barnes, B.

Wolfson, L.

Orkney, E.

Wyatt of Weeford, L.

Orr-Ewing, L.

Wynford, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.42 p.m.
[Amendments Nos. 21 to 23 not moved.]
Lord Lucas Lord Lucas moved Amendment No. 24:
Page 58, line 44, at end insert—
("( ) In section 39 of that Act (index of defined expressions), at the appropriate place insert—

"arbitration agreement,

section 38".'"

arbitration proceedings

and arbitral tribunal

The noble Lord said: My Lords, Amendments Nos. 24 and 31 are both consequential. Noble Lords will recall that subsection (5) of Clause 83, which deals with the reasonableness of service charges, adds a definition of arbitration agreements to Section 38 of the Landlord and Tenant Act 1985. Section 39 of that Act is an index of defined expressions, and Amendment No. 24 adds an entry to that index to reflect the addition to Section 38.
Amendment No. 31 is consequential to new section 3A of the Landlord and Tenant Act 1985, as inserted by Clause 93. Section 3A, which places a duty on a landlord to inform tenants of their possible right of first refusal, is tied to Section 3 of that Act: it can only apply when Section 3 applies. Notices under Section 3 are served when a landlord's interest is assigned, and requires the new landlord to inform the tenants of his name and address. Since Sections 3 and 3A only apply to residential property, Section 3A must therefore be

877
added to the reference to Sections 1 to 3 in Section 32(1) of the Landlord and Tenant Act 1985, which says that these sections do not apply to business tenancies under Part II of the Landlord and Tenant Act 1954. I beg to move.
On Question, amendment agreed to.
Clause 86 [Appointment of manager: transfer of jurisdiction to leasehold valuation tribunal]:
Lord Lucas Lord Lucas moved Amendment No. 25:
Page 62, line 17, leave out ("is sufficient to meet") and insert ("does not exceed").
The noble Lord said: My Lords, I am entirely in the hands of the House in relation to Amendment No. 25. I suggest that it should be agreed to on the basis that at least it moves in the direction of the mood of the House, expressed so forcefully. It will give us an amended clause with which to deal and correct in the Commons if necessary. I beg to move.
On Question, amendment agreed to.
Lord Dubs Lord Dubs moved Amendment No. 26:
After Clause 88, insert the following new clause—
COMMON PARTS: RIGHT TO SELF-MANAGEMENT
(" . After section 34 of the Landlord and Tenant Act 1987 there is inserted—
"Common parts: right to self-management.
(1) The Secretary of State shall have power by order to provide a scheme for the self-management by qualifying tenants of common parts of the premises which the landlord is obliged to maintain and for which the tenants contribute a service charge under their existing leases.
(2) An order under this section shall be made by statutory instrument subject to approval by resolution of both Houses of Parliament.".").
The noble Lord said: My Lords, I make no apology for the fact that this amendment is couched in the same terms as an amendment which we discussed rather briefly on Report. The reason that I make no apology is that when I moved the amendment, the noble Earl, Lord Ferrers, in responding to it, appeared to me to be speaking largely to an amendment which I had not moved and not speaking to the amendment which I had moved in so far as he put up various objections which I suggest had no direct relevance to the amendment.
Therefore, I shall restate the issue extremely briefly. The issue relates to the right of leaseholders to self-manage the common parts of their flats. The Government did not like that as a blanket proposition and, indeed, the Minister said on Report that the right to self-management would apply whether or not the landlord was doing a good job. That is not the case. The wording of the amendment has been chosen extremely carefully. It gives the Secretary of State the powers, if he so wishes, to introduce a scheme of self-management for qualifying tenants.
That means that the Secretary of State can choose to do that or not and he can choose for which tenants he wishes to do it. He can decide on what basis a tenant would qualify. Therefore, on the wording of the amendment, the Secretary of State would be able to decide whether there should be a universal right to
878
self-management or whether the right to self-management should be limited only to those blocks of flats where the tenants had made out a case that the management was not working out very well; in other words, all those powers rest with the Secretary of State.
It would have been very difficult to table an amendment on Report to cover the complexity of the issue. On Report the noble Lord, Lord Lucas, referred to the fact that I had sent him a 34-page amendment, which I did not table, but which described a scheme of self-management. It seemed to me that to table such a long amendment at that stage of the Bill was not the right way forward. It seemed better to me to give the Secretary of State the powers to decide how to operate the scheme and whether and when to do that. He could decide which leaseholders would qualify. I thought that that was the best way forward. Therefore, the power would be there to be used as and when the Secretary of State wished it to be used.
Finally, we have had quite a long debate this afternoon about the cost of taking cases to leasehold valuation tribunals. The fact is that in so far as leaseholders are given the right to self-management, all the arguments about the costs of LVTs go by the board. We are dealing with a simple right for people in leasehold circumstances to have the same ability to manage the common parts of their flats as the Government have given to council tenants, and quite properly so. There is nothing outrageous about it. The Secretary of State could well decide that lessees who have good landlords should not be given the right and the right would be given only in circumstances where landlords had not behaved quite as well as they might have done. There is scope for flexibility and the amendment meets all the objections to which the Minister gave voice on the last occasion that we discussed this matter. I beg to move.
Lord Monson: My Lords, as I tried to point out when we debated an identical amendment on Report, this is a more complex and less straightforward matter than it appears.
Ten years ago, I should have taken it for granted that self-management was preferable to management by even the most benevolent ground landlord. But the experience of some of my family since then has totally changed my mind.
Lessees need effective maintenance at a fair price—and a price there is certainly going to be, whoever is responsible for the management. Now that the undoubted deficiencies of the 1987 Act have been remedied and the misbehaviour and over-charging of rogue landlords rightly curbed, I am sure that in most cases lessees will be better off overall not managing the common parts themselves. If time permitted—and I do not think it does—I should explain in detail exactly why that is so.
Even those who still swear by the notion of self-management will surely admit that it is not right for every aspect of maintenance. Certainly porterage could be self-managed in those statistically rare cases

879
where blocks of flats have resident porters. The same might be said of the cleaning of common parts provided that one acknowledges that insufficiently frequent cleaning and inefficient waste disposal could lead to a dangerously increased fire risk. Redecoration is a borderline case: there are good arguments both ways. But structural repairs are surely best left to the ground landlord.
I am trying to point out that these are contentious matters which need thorough debate. They are surely matters for primary rather than secondary legislation and therefore I oppose the amendment.
Earl Ferrers: My Lords, the noble Lord, Lord Dubs, has made me nervous. He said that he put down an amendment at Report stage and that I answered an amendment which he did not put down but did not answer the amendment that he did put down. I fear that I might be in the same trouble today if I am not careful.
I can only answer the amendment by stating the way we interpret the effect that it will have. This is all about giving people a right to manage. The Government have always, throughout the whole of this Bill, opposed an unfettered right to manage, both on grounds of principle and practicality. We have set out our reasons for this and detailed our objections at every stage when there has been a debate on this, both in the other place and in your Lordships' House.
We are opposed in principle to a right to manage because it could require any landlord, no matter how well he was carrying out his responsibilities, to hand over the management to leaseholders. The noble Lord, Lord Dubs, is saying by his amendment, "But that would only be after the Secretary of State had issued an order". Nevertheless, if my right honourable friend were to issue an order, the landlord could find his responsibilities in that regard taken away from him.
Whether or not we like it, it is a fact that the price which a landlord pays for property reflects the income which is available from the management of it. Management should be a wholly reputable business; quite obviously exploitation is not. If the management of the property is of a high standard, then that is a good thing for the tenants and retains a value for the management.
The proposal of the noble Lord, Lord Dubs, seems to envisage no provision for any element of compensation were the landlord to find that his right to manage his property had been taken away, even where he was carrying out his duty perfectly successfully and properly. That is not the right approach.
The Government's proposals set out in the Bill assist leaseholders and represent a better alternative. They include an end to the abuse of forfeiture proceedings by landlords as a means of frightening leaseholders into paying unreasonable service charges. They also include a new means of resolving disputes over service charges, and strengthen the right to seek the appointment of an independent manager where it can be demonstrated to a tribunal that the landlord is not doing his job properly. We are also widening the scope of leaseholding enfranchisement to give leaseholders the opportunity to
880
take on the full responsibilities of freehold ownership, while at the same time offering the landlord a fair price for it.
We are concerned about the practicalities of the noble Lord's proposal. If the amendment were to be accepted by your Lordships, then a complex measure would be introduced on the face of the Bill by a single clause. This would then allow the Secretary of State to construct some scheme at a future date through secondary legislation. That would be highly unsatisfactory. If the noble Lord, Lord Carter, were here, he would probably prefer it to be done by an affirmative resolution, too; but that is de minimis. For those reasons I hope that the noble Lord will consider his amendment inappropriate. Whatever I did on the last occasion, I hope I have at least answered his amendment on this occasion.
Lord Dubs: My Lords, the Minister has answered the arguments relating to my amendment on this occasion. The noble Lord, Lord Monson, suggested that this was a matter for primary not secondary legislation. I would agree with him if it were possible to devise a scheme for self-management short enough and succinct enough to be appropriate for primary legislation. All my efforts, with a lot of help from experts outside, suggest that this is a difficult undertaking which would probably require a Bill in itself rather than it being part of a larger Bill. It is the sheer difficulty of such an undertaking that has led me to believe that giving the Secretary of State powers might be a better way forward.
As to the Minister's comments, tenants would not wish to have the right to self-management unless they felt that they could do better than was being done in their block of flats. It would defy logic for tenants who were content about the quality of the management of their flats to say, "Nevertheless, good as the management is, we want something different". Tenants would only wish to move into self-management if they felt that there would be an improvement in their circumstances. That logical position must underpin any approach to the issue.
The Minister said that the Government can only interpret the amendment in their way. That is the whole point. It gives the Government the ability to go on interpreting in the way that they wish, up to the point where they actually take the powers given them in this particular amendment. Because it is open to the Government to decide whether to use the power, when to use it, how to use it and for which tenants, it gives them a complete hold on whether they move forward at all. Even if the power were on the statute book and the Government then said that it was difficult to apply, they simply would not move forward.
The amendment meets all the Government's criticisms. I can see that the Government are not going to concede the point and, therefore, I should like to test the opinion of the House.
5.56 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 91; Not-Contents, 135.

Division No. 3

CONTENTS

Annan, L.

Jenkins of Putney, L.

Archer of Sandwell, L.

Judd,L.

Ashley of Stoke, L.

Kilbracken, L.

Barnett, L.

Lockwood, B.

Bathurst, E.

Longford, E.

Beaumont of Whitley, L.

Lovell-Davis, L.

Berkeley, L.

McCarthy, L.

Blackstone, B.

McGregor of Durris, L.

Blease, L.

McIntosh of Haringey, L.

Borrie, L.

Mackie of Benshie, L.

Broadbridge, L.

McNair, L.

Bruce of Donington, L.

Mar and Kellie, E.

Carmichael of Kelvingrove, L.

Marsh, L.

Carter, L.

Masham of Ilton, B.

Chapple, L.

Mayhew, L.

Cledwyn of Penrhos, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Molloy, L.

Craigavon, V.

Monkswell, L.

Dahrendorf, L.

Morris of Castle Morris, L.

Dean of Beswick, L.

Murray of Epping Forest, L.

Dean of Thornton-le-Fylde, B. [Teller.]

Nelson, E.

Nicol, B.

Desai, L.

Ogmore, L.

Donaldson of Kingsbridge, L.

Peston, L.

Donoughue, L.

Prys-Davies, L.

Dormand of Easington, L.

Richard, L.

Dubs, L. [Teller.]

Robson of Kiddington, B.

Eatwell, L.

Rochester, L.

Ewing of Kirkford, L.

Rodgers of Quarry Bank, L.

Falkender, B.

Russell, E.

Falkland, V.

Seear, B.

Farrington of Ribbleton, B.

Shaughnessy, L.

Fisher of Rednal, B.

Stoddart of Swindon, L.

Gallacher, L.

Strabolgi, L.

Geraint, L.

Thomson of Monifieth, L.

Gladwin of Clee, L.

Thurso, V.

Glenamara, L.

Tope, L.

Graham of Edmonton, L.

Tordoff, L.

Grey, E.

Wallace of Saltaire, L.

Hamwee, B.

Weatherill, L.

Harris of Greenwich, L.

Whaddon, L.

Hollis of Heigham, B.

White, B.

Holme of Cheltenham, L.

Wigoder, L.

Jay of Paddington, B.

Williams of Crosby, B.

Jeger, B.

Williams of Elvel, L.

Jenkins of Hillhead, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Ailsa, M.

Caithness, E.

Alexander of Tunis, E.

Carnegy of Lour, B.

Ashbourne, L.

Carnock, L.

Astor of Hever, L.

Chelmsford, V.

Attlee, E.

Chesham, L. [Teller.]

Balfour, E.

Chorley, L.

Belhaven and Stenton, L.

Clark of Kempston, L.

Berners, B.

Coleraine, L.

Biddulph, L.

Colwyn, L.

Blaker, L.

Courtown, E.

Blatch, B.

Cranborne, V. [Lord Privy Seal.]

Bowness, L.

Crickhowell, L.

Boyd-Carpenter, L.

Dacre of Glanton, L.

Brentford, V.

Dean of Harptree, L.

Brougham and Vaux, L.

Demon of Wakefield, B.

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Dilhorne, V.

Macleod of Borve, B.

Dixon-Smith, L.

Massereene and Ferrard, V.

Donegall, M.

Merrivale, L.

Downshire, M.

Mersey, V.

Eden of Winton, L.

Miller of Hendon, B.

Elibank,L.

Monk Bretton, L.

Elles, B.

Monson, L.

Elliott of Morpeth, L.

Montagu of Beaulieu, L.

Elton, L.

Montgomery of Alamein, V.

Feldman, L.

Montrose, D.

Ferrers, E.

Mottistone, L.

Fraser of Carmyllie, L.

Mountevans, L.

Gainsborough, E.

Mowbray and Stourton, L.

Gibson-Watt, L.

Munster, E.

Gilmour of Craigmillar, L.

Murton of Lindisfarne, L.

Gisborough, L.

Napier and Ettrick, L.

Glenarthur, L.

Northesk, E.

Greenway, L.

O'Cathain, B.

Hacking, L.

Orr-Ewing, L.

Hailsham of Saint Marylebone, L.

Pender, L.

Halsbury, E.

Perry of Southwark, B.

Hamilton of Dalzell, L.

Pilkington of Oxenford, L.

Harmar-Nicholls, L.

Pym, L.

Harris of Peckham, L.

Rankeillour, L.

Hayhoe, L.

Rawlings, B.

Hemphill, L.

Rees, L.

Henley, L.

Renton, L.

Hesketh, L.

Renwick, L.

Holderness, L.

Romney, E.

HolmPatrick, L.

Saint Albans, D.

Hooper, B.

Saltoun of Abernethy, Ly.

Hothfield, L.

Savile, L.

Howe, E.

Seccombe, B.

Huntly, M.

Selsdon, L.

Hylton-Foster, B.

Shaw of Northstead, L.

Inglewood, L.

Sherfield, L.

Jeffreys, L.

Skelmersdale, L.

Jenkin of Roding, L.

Soulsby of Swaffham Prior, L.

Kinnoull, E.

Stanley of Alderley, L.

Leigh, L.

Stockton, E.

Lincoln, Bp.

Strathcarron, L.

Lindsay, E.

Strathclyde, L. [Teller.]

Lindsey and Abingdon, E.

Strathcona and Mount Royal, L

Long, V.

Sudeley, L.

Lucas, L.

Tebbit, L.

Lucas of Chilworth, L.

Trumpington, B.

Lyell, L.

Wade of Chorlton, L.

McColl of Dulwich, L.

Wharton, B.

McConnell, L.

Wilcox, B.

Mackay of Ardbrecknish, L.

Windlesham, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Wise, L.

Wolfson, L.

Mackay of Drumadoon, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.5 p.m.
Lord Lucas Lord Lucas moved Amendment No. 27:
Before Clause 89, insert the following new clause—
APPLICATION OF RIGHT OF FIRST REFUSAL IN RELATION TO CONTRACTS
(".—(1) After section 4 of the Landlord and Tenant Act 1987 (relevant disposals) insert—
"Application of provisions to contracts.
4A.—(1) The provisions of this Part apply to a contract to create or transfer an estate or interest in land, whether conditional or unconditional and whether or not enforceable by specific performance, as they apply in relation to a disposal consisting of the creation or transfer of such an estate or interest.

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As they so apply—

(a) references to a disposal of any description shall be construed as references to a contract to make such a disposal;

(b) references to making a disposal of any description shall be construed as references to entering into a contract to make such a disposal; and

(c) references to the transferee under the disposal shall be construed as references to the other party to the contract and include a reference to any other person to whom an estate or interest is to be granted or transferred in pursuance of the contract.

(2) The provisions of this Part apply to an assignment of rights under such a contract as is mentioned in subsection (1) as they apply in relation to a disposal consisting of the transfer of an estate or interest in land.
As they so apply—

(a) references to a disposal of any description shall be construed as references to an assignment of rights under a contract to make such a disposal;

(b) references to making a disposal of any description shall be construed as references to making an assignment of rights under a contract to make such a disposal;

(c) references to the landlord shall be construed as references to the assignor; and

(d) references to the transferee under the disposal shall be construed as references to the assignee of such rights.

(3) The provisions of this Part apply to a contract to make such an assignment as is mentioned in subsection (2) as they apply (in accordance with subsection (1)) to a contract to create or transfer an estate or interest in land.
(4) Nothing in this section affects the operation of the provisions of this Part relating to options or rights of pre-emption.".
(2) In section 4(2) of the Landlord and Tenant Act 1987 (relevant disposals: excluded disposals), for paragraph (i) (certain disposals in pursuance of existing obligations) substitute—
"(i) a disposal in pursuance of a contract, option or right of pre-emption binding on the landlord (except as provided by section 8D (application of sections 11 to 17 to disposal in pursuance of option or right of pre-emption));".
(3) In section 20(1) (interpretation), in the definition of "disposal" for "has the meaning given by section 4(3)" substitute "shall be construed in accordance with section 4(3) and section 4A (application of provisions to contracts)".").
The noble Lord said: My Lords, in moving Amendment No. 27, I wish to speak at the same time to Amendments Nos. 28, 29, 30, 101, 109 and 117. I wonder whether the noble Lord, Lord Strabolgi, might find it convenient if I also referred to his Amendments Nos. 102 to 108.
Lord Strabolgi: My Lords, I am sorry to interrupt the noble Lord just before he starts, but I would prefer to describe what my amendments are about before the noble Lord replies to them, although I should be interested to hear what he has to say on Amendments Nos. 27 and 101.
Lord Lucas: Certainly, my Lords. I gave some warning at Committee stage and indeed at Report stage that there would be a great deal to digest on this matter. The reality is always a little bit of a shock. Some 25 pages I have promised, and 25 pages, near enough, we have.
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I said in Committee and at Report that it was necessary to clarify the moment when a relevant disposal took place, particularly as we had introduced a criminal offence for a landlord not to offer the right of first refusal to his qualifying tenants when he wished to sell his interest. This offence will crystallise if a relevant disposal takes place before the offer notices have been served on the tenants, so it is essential that we should define the point of disposal. With your Lordships' indulgence, I shall proceed to do so in some depth.
The crux of all this material is contained in Amendment No. 27, which introduces a new Section 4A into Part I of the Landlord and Tenant Act 1987. All else follows from this. Subsection (1) of new Section 4A applies the right of first refusal to a contract to make a disposal. The remainder of the amendment also applies the right of first refusal to transfers of rights under a contract and to a contract to transfer rights under such a contract. There are further changes to other provisions of the Act, which I shall refer to later.
Amendment No. 28 introduces Amendment No. 101 which is a schedule that restates most of the remainder of Part I of the 1987 Act so as to simplify the procedures for the exercise of tenants' rights, and to apply those procedures in relation to contracts and special cases. Amendment No. 101 is the only other substantive amendment in this group, and it may help the House if I describe how it is arranged, and how it dovetails with the other clauses in the Bill.
Part I of the schedule, which is Amendment No. 101, replaces Sections 5 to 10 of the 1987 Act, which deal with the principal rights of first refusal. Part II of the schedule replaces Sections 11 to 15 of the 1987 Act, which deal with the enforcement by tenants of rights against a purchaser. Part III of the schedule replaces Sections 16 and 17 of the 1987 Act, which deal with the enforcement of rights against subsequent purchasers and termination of rights. Part IV of the schedule contains consequential amendments.
The consequences for the rest of the Bill are as follows: Clauses 91 and 92 of the Bill, and Schedule 6 to the Bill are to be left out, by means of Amendments Nos. 29, 30 and 109, as their content has been subsumed in Amendment No. 101. Clause 89 of the Bill, which amends Section 4 of the 1987 Act in relation to associated companies, remains unchanged. Clause 90 of the Bill, which introduces new Section 10A, the criminal offences, also remains unchanged. Clause 93, which amends the Landlord and Tenant Act 1985, remains unchanged, apart from the effect of Amendment No. 31, which we have already discussed.
I should now like to describe the main features of the schedule in Amendment No. 101, to explain how making an exchange of contracts a "relevant disposal" affects the structure of Part I of the Landlord and Tenant Act 1987.
Part I of the schedule in Amendment No. 101, sets out the principal rights of first refusal. It provides that where the landlord proposes to make a relevant disposal he shall serve an offer notice on the qualifying tenants of the constituent flats. The offer notice will need to comply with the requirements appropriate to the class of

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disposal. These are set out in new Sections 5A to 5D, which cover cases where contracts precede conveyance (the "normal" way of selling property), sales at auction, grants of options or rights of pre-emption, and conveyances not preceded by contract. Section 5E sets out the additional requirements where the disposal is for non-monetary consideration. Noble Lords will recall that procedures for special cases were introduced in Committee and currently reside in Schedule 6 to the Bill. Importing them into the body of the Act will make it easier for practitioners to follow.
New Sections 6, 7, 8 and 8A cover the next stages in the process: either the acceptance or not of the landlord's offer by the tenants, and the landlord's obligations when the tenants accept the offer and nominate a purchaser. The drafting of new Section 6 on acceptance of the landlord's offer has been simplified in comparison to the corresponding provision in the 1987 Act.
Clause 91 of the Bill introduced the new principle of "advance or withdraw" in the subsequent procedures, and these have been imported into new Sections 7, 8 and 8A, which are set out in Amendment No. 101. This means that when one party has received a notice or other document from the other, he must either act on it and advance to the next stage of the procedure, or withdraw from the process. An example is in new Section 8A(4): once the landlord has sent a form of contract to the tenants' nominee, the nominee must either withdraw or offer an exchange of contracts. If either party fails to act when required, this is treated as a withdrawal.
New Sections 8B to 8D cover the landlord's obligation in the special cases of auctions, disposal for non-monetary consideration and options respectively. New Section 8D is particularly interesting as it clarifies an issue on options and rights of pre-emption. The grants of these are relevant disposals, but the transfers following from their exercise are not. This caused a difficulty because tenants are not likely to hear about such transactions until the option has been exercised, and it was unclear whether they had any rights to purchase from the new landlord. New Section 8D makes it clear that they do have such rights. The necessary amendment to Section 4 of the 1987 Act, which deals with exclusions to the right of first refusal, is in subsection (2) of Amendment No. 27.
New Section 8E requires the landlord to use his best endeavours to obtain any consent required before disposing of his interest but, if it is not forthcoming, allows him to dispose of his interest elsewhere within 12 months, but on no better terms than those offered to the tenants. This recasts existing provisions in the 1987 Act.
New Sections 9A and 9B provide for notices of withdrawal by the tenants and the landlord, including provision for costs. Again, the principles are the same as in the 1987 Act, but the drafting has been simplified and now caters for contracts.
The other way, apart from withdrawal, that the procedure can come to an end is for the landlord's offer to the tenants of his interest, under Section 5 of the Act,
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to lapse. New Section 10 in Amendment No. 101, which replaces Section 10 of the 1987 Act, allows the offer to lapse only if the premises cease to come within the scope of the 1987 Act. The process may lapse only if the landlord serves the requisite notice on the tenants, but cannot be done after a binding contract has been entered into. Only if the landlord can lawfully rescind the contract, for example if the purchasers fail to complete, can he sell his interest on the open market.
Part II of the schedule in Amendment No. 101 deals with the enforcement of the rights of tenants to buy their landlord's interest when it has been disposed of to a third party. This corresponds to the provisions in Sections 11 to 15 of the existing legislation, as already amended by Clause 92 of the Bill. These rights come into play when the landlord has made a disposal without first offering his interest to the tenants, or has sold on better terms than were offered after negotiations had broken down.
These rights are triggered when the tenants hear about the disposal, either by means of a notice served under Section 3A of the Landlord and Tenant Act 1985, when the conveyance has been completed, or by some other documents if Section 3A does not apply. In both cases, the documents must alert the tenants to their rights under Part I of the 1987 Act and the time limits for action. These other documents will assume a greater importance in the future, as they will become servable on exchange of contracts, when Section 3A of the 1985 Act will not yet apply.
New Section 11 describes the circumstances in which these rights are enforceable and new Section 11A enables the tenants to serve a notice on the purchaser, requiring him to give information about the disposal. This is similar to the existing provision in the 1987 Act.
The right to force the purchaser to sell the interest disposed of at the price paid has undergone important changes, now that the relevant disposal has been defined to include the exchange of contracts. New Section 12A allows the tenants to take the benefit of the contract if they find out about it before completion. They have six months to serve a notice electing to take the contract, starting with the time that the purchaser complied with an information notice or the tenants were informed that the disposal had taken place.
New Section 12B applies when a Section 12A notice could have been served but has not been, or where the disposal did not consist of entering into a contract. In general this will mean that tenants can compel a sale after conveyance, and is analogous to the existing right in Section 12 of the 1987 Act. It is, however, important to realise that tenants have a choice in most contract cases. They can either serve a Section 12A notice and take the contract, or wait for completion and serve a Section 12B notice to compel the sale. The only restriction will occur when completion is due to take place after the end of the six-month period for action by the tenants. In this case they must follow the Section 12A route and take the contract, because if they wait for the conveyance, they will be out of time for serving a Section 12B notice.

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The remaining new sections in Part II of the schedule are these: new Section 12C allows the tenants to compel the grant of a new tenancy by a superior landlord when the original disposal was the surrender by the landlord of a tenancy held by him (corresponding to Section 15 of the 1987 Act); new Section 12D makes supplementary provisions for nominated persons (corresponding to subsections (7) to (9) of Section 12 of the 1987 Act); new section 13 gives a leasehold valuation tribunal jurisdiction to determine certain matters (corresponding to Section 13 of the 1987 Act); and new Section 14 makes provision for withdrawal by the tenants from a transaction compelling a sale after completion or a grant of a new tenancy under Sections 12B or 12C (corresponding to Section 14 of the 1987 Act).
Part III of the schedule in Amendment No. 101 deals with the consequences when tenants exercise their rights under Part II of the schedule but discover that the purchaser no longer holds the estate or interest that was the subject matter of the original disposal. These provisions correspond to Sections 16 and 17 of the 1987 Act. New Section 16 requires the purchaser to pass the notices on to the subsequent purchaser and inform the tenants of the subsequent purchaser's name and address. The notices then apply to the subsequent purchaser. If not all the purchase has been transferred, the original purchaser is still responsible for the parts he has retained.
New Section 17 deals with the termination of rights against a purchaser or subsequent purchaser, either when the premises no longer come within the scope of Part I of the 1987 Act, or the tenants have not pressed their claim against a purchaser within three months of serving a notice under Sections 12A, 12B or 12C.
Part IV of the schedule contains consequential amendments.
I thank the House for listening to this rather long explanation. I hope that the noble Lords have found it clear and helpful. I beg to move.
6.15 p.m.
Lord Strabolgi: My Lords, I am very grateful to the Government for tabling all these amendments, and also to the noble Earl, Lord Ferrers, who wrote a letter at the end of last week to warn us what was on the way. I thank him for sending the first draft. Of course, the second draft, which arrived this morning, was rather different, and I am very glad that I came in quite early today to try to grapple with it.
The clarification of "relevant disposal" in the new Section 4A of Amendment No. 27 is essential now that the failure to offer first refusal to tenants before disposal is to be made a criminal offence. It is now clear that the Act bites on the first occurring act of disposal, whether it be the right of pre-emption, option, exchange of contract or creation of an interest. In another place there was adverse comment on the fact that the Master of the Rolls in Mainwaring v. Trustees of Smith's Charity had to find unclear whether "relevant disposal" was the contract or the conveyance, but he came down in favour of the latter.
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Such a decision is clearly contrary to the prohibition against a disposal of the equity contained in the 1987 Act and surely arose out of flawed drafting. It would have opened further avenues of abuse from unwilling and rogue landlords who could then have entered into contracts with curious and peculiar terms only acceptable to their preferred purchasers which the tenants would then have to match. The current clarification of "relevant disposal" has closed that particular avenue.
I turn now to Amendment No. 101, which was described so ably by the noble Lord, Lord Lucas. I deal first with my Amendments Nos. 107 and 108 because they are of more substance than Amendments Nos. 102 to 106. Paragraph 2 of the new Part IV (on page 39 of the Marshalled List) reformulates but does not change the former Section 5(6) of the Landlord and Tenant Act 1987 and specifies the period for the available votes of which the qualifying majority must have more than 50 per cent. The number of available votes is then fixed.
The practical consequence is that for any block of flats, numbering, say, two to 100 flats, a majority of one (and various other permutations) is vulnerable to losing one or more of its qualifying votes and disqualifying itself although it still has a qualifying majority of what is left. Therefore 100 flats need a majority of 51. If before the exchange of contract the nominated purchaser loses one vote by virtue of that one tenant being evicted, or having died, he will still have a majority of what is left—that is, 50 of the 99. But he will not have a qualifying majority as defined. That is surely unjust.
By the time a person or persons have taken on the nominations he has committed himself to costs and consequences, whether in the straightforward sale or in the new auction proposals. He also becomes liable for landlord's costs under the Act itself. If he should wish to withdraw because of withdrawals of support and funding, that is a matter for him. He should not, I submit, be obliged to withdraw under either paragraph 9A(2) of Amendment No. 101—it is page 29 of the Marshalled List—or paragraph 14(2), which is on page 37.
The particular problem of the current situation is that unwilling landlords and their preferred purchasers target tenants who are part of the qualifying majority to make them withdraw their support. There is some evidence that that is what happened with the Smith property sale to the Wellcome Foundation, which the noble Lord, Lord Lucas, rightly criticised at an earlier stage of the Bill. If paragraphs 9A(2) and 14(2) are deleted, the advantage to the landlords, their preferred purchasers and agents of such conduct is minimised.
Amendments Nos. 102 to 106 which stand in my name are minor amendments. The 1987 Act allows the acceptance and nomination to be in the first two month period, although a second two months is allowed for the nomination if the tenants wish it. The use of the word "within" rather than "before the end of' means the nomination cannot occur before the end of the first two month acceptance period. That can be a disadvantage to both the landlords and tenants who want to get on with

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the disposal. I also suspect that it is a change which is probably unintended in the drafting. I suggest that the amendments are an improvement to the drafting in this respect.
Lord Williams of Elvel: My Lords, I am grateful to the Minister for explaining the purpose of the amendments and for going into some of the detail. I am most grateful to my noble friend, Lord Strabolgi, for explaining his amendments and going into detail. I am sure that when the Minister replies he will have appropriate responses to all the points made.
I find myself in some difficulty. Had the amendment moved, and the consequent amendments spoken to by the noble Lord, been produced on Report, I should have asked for recommitment. However, I am advised that we are now dealing with procedures after Third Reading, and there is no question of recommitment. Therefore I have to do my best to point out some of the problems that I envisage with the noble Lord's amendments.
I have difficulty in that regard as I received the amendments on the Marshalled List only when I came into the House at about 12.30 today. As the noble Lord, Lord Lucas, knows, I try to read carefully what the Government propose. I have only got half way through the new schedule that he proposes. However, I shall seek to put one or two points to the noble Lord which I am sure he will be able to answer.
On Amendment No. 27, I am not sure of the definition of "option or right of pre-emption". I shall be grateful if the noble Lord will explain precisely what "option or right of pre-emption" means in law under the circumstances that we address.
On Amendment No. 28, new subsection (2)(a) states:
"The amendments restate the principal provisions … so as to simplify the procedures for the exercise of the rights conferred on tenants".
Is it proper for a statute—it is a statute that we discuss at present—to embody the expression "simplify the procedures" when the provision probably complicates the procedures?
I turn to the substantive schedule, Amendment No. 101. Again, I have tried to read through the amendment as far as possible but I am only half way through it. Therefore I shall deliver my comments and hope for a response on half the proposed schedule.
What does the expression "sever the transaction" mean? I understand the expression "cancel a transaction". I understand that a transaction might be void. But what does "sever the transaction" mean?
New subsection 5(a) states:
"If he has served an offer notice on not less than 90% of the qualifying tenants".
What is the meaning of "not less than 90%"? It assumes that the number of people is large, but it may be small; for example, 10 or 11. Apart from the English involved in "not less than 90%", how does the noble Lord, Lord Lucas, define the phrase?
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The new schedule continues with the words in subsection (5)(b) of Section 5:
"where the qualifying tenants on whom it was required to be served number less than ten, if he has served such a notice on all but one of them".
Why should the one person be so disadvantaged? I ask that for clarification.
I am sorry to detain your Lordships, but the Government have produced a new schedule and as we are a revising Chamber, we must ask for clarification. Subsection (4) of the new Section 5B at the bottom of page 22 provides that:
"The notice must state that the notice constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for the contract (if any) entered into by the landlord at the auction to have effect".
Does that mean that if there is no contract for auction then there is no difficulty?
On page 23, subsection (6) of the new Section 5B states that:
"The notice must specify a further period of not less than 28 days".
Are they 28 calendar days or 28 working days, excluding Bank Holidays? The same question arises under subsection (8). On page 24, the new Section 6(1)(b) states:
"such longer period as may be agreed between him and the requisite majority".
Will the Minister explain how the requisite majority is achieved? On page 25, subsection (6) of the new Section 6 states that:
"A person nominated for the purposes of this section by the requisite majority … if …; he has … ceased to be able to act as a nominated person".
Why should the "nominated person" cease to be able to act? Is he meant to fall down dead or be incapacitated or resign his post because he cannot get agreement from his tenants?
On page 26 of the Marshalled List, subsection (5) of the new Section 8 states:
"Nothing in this section shall be taken as prejudicing the application of the provisions of this Part to any further offer notice served by the landlord on the qualifying tenants of the constituent flats".
That seems to contradict some of the measures in the new Section 8. I should be glad if the noble Lord could explain it further. On page 27, the new Section 8B(6) states:
"If the nominated person … does not serve notice on the landlord under subsection (2) by the time mentioned in that subsection — the following provisions of this Part apply as if he had given notice".
Does that mean that he does not have to give notice or that notice in one form or another—for example by a telephone call—is adequate?
I am sorry to detain your Lordships but I am trying my best to understand what the Government have in mind in the new schedule. On page 28, under the new Section 8D(2) we see under paragraph (b) the words:
"documents of any other description".

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Will the noble Lord explain what that means? Subparagraph (b)(ii) says "alerting the tenants". I am not sure what that expression means. Are the tenants away or what? How does one alert tenants? On page 29, the new Section 8E(6) states:
"Any such liability of the nominated person and those tenants is a joint and several liability".
That raises certain problems about who should be the "nominated person" and whether he or she should have joint and several liability with the tenants who have nominated him or her. It would be unfair if, when a person accepted being a nominated person for the purposes of the transaction, he or she were to be linked with other tenants in joint and several liability with all that that implies. The Minister knows well what it implies.
The new Section 9A(1) on page 29 states:
"the nominated person may serve notice on the landlord (a 'notice of withdrawal')".
In what form is the notice of withdrawal to be indicated? Would it be a telephone call saying: "I am giving up, I can't stand it any longer. All my tenants have joint and several liability". Will all that go by the board? New Section 9A(2) states:
"If at any time the nominated person becomes aware that the number of the qualifying tenants of the constituent flats",
and so forth. How does the nominated person become aware? Will the Minister please explain?
I have only read half the new schedule. No doubt, given further time, I could put a number of other questions, but those I have put are relevant. Having tabled the schedule at a very late stage in the progress of the Bill, the Government and the House must be satisfied that we, as a revising Chamber, do not pass anything that gives rise to doubt or of which the drafting is incoherent, insufficient or sloppy.
I hope that the noble Lord, Lord Lucas, will look at the new schedule carefully. If he cannot give the responses now, I am sure that my honourable friends in another place will interrogate the Government in a suitable manner when the Bill goes to the Commons.
6.30 p.m.
Earl Bathurst: My Lords, I am sure we all congratulate my noble friend on his explanation of this complicated series of amendments. However, it does not seem to have satisfied the noble Lord, Lord Strabolgi, nor, from what I understand, the noble Lord, Lord Williams. Will my noble friend's amendment or series of amendments definitely put out of court and prevent the dreadful case which the noble Lord, Lord Strabolgi, mentioned? I declare an interest, as one caught in the case between Smith's Charity and the Wellcome Foundation, as well as the Mainwaring litigation which was mentioned by the noble Lord, Lord Strabolgi. If my noble friend can tell myself and the House that it will prevent that, he will have done a service not only to the House but to the many tenants who suffer under the legislation.
Lord Selsdon: My Lords, I agree with my noble friend. However, this is a good amendment. The Government's heart is in the right place. I have to say that it would be better were the amendments of the noble Lord, Lord Strabolgi, to be accepted. The principles that we are supporting on all sides of the House are effectively leading to the death of long leasehold as it was originally known. With that comes a transition period whereby it is desirable to encourage tenants and landlords to get rid of an intermediary system. Thus for a tenant to have the right to buy a long leasehold or his freehold interest when someone is trading it is right and proper.
The amendment is relatively simple. The noble Lord, Lord Williams, managed to confuse me quite a lot. He admitted that he had only gone half-way through it, whereas I had the advantage of having been advised of the amendments by my noble friends in advance. I was able to consider them at some length, even though I was confused.
The dread reference to a criminal offence ought to terrify every irresponsible landlord. The phrase is almost sufficient in itself to warn anybody that he should not behave improperly.
As one of those who opposed the Smith's Charity amendments during the passage of the 1993 Act, I like to feel that this amendment has come about as a direct result of very irresponsible behaviour; it was done almost clandestinely in the middle of the night by many people, apparently in good faith but against the interests of so many more.
In residential areas there was a strange attitude that the landlord felt he had the right to do what he liked with his tenants; whereas with commercial leases in normal terms the landlord places great value on having a valuable tenant.
I still believe that there will be flaws within the Bill. In the case of some of the great estates in London, which are good landlords, where there are listed buildings that one wishes to try to keep together, the break-up of those terraces could be against everybody's interests in the long term. However, this Bill has perhaps encouraged landlords to realise that tenants are valuable and that the right relationship between landlord and tenant can now be restored to where it should have been for many years.
However, there are gaps. The business of qualifying or non-qualifying tenants leads to possibilities for unscrupulous people to manipulate facilities and suddenly seek to acquire the one property, the one flat within a block, which can permit qualification or non-qualification. I speak, for instance, of those from foreign parts who do not observe the same procedures as we should think right and whose behaviour may from time to time be less than gentlemanly. We should be aware that such situations will arise. The creation of a criminal offence will be the greatest deterrent of all.
6.45 p.m.
Lord Lucas: My Lords, I am most grateful for the general welcome given to these amendments. I am

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conscious that they have imposed a considerable burden on noble Lords in going through them, and that they may yet do so.
I turn first to the amendments of the noble Lord, Lord Strabolgi. Like him, I shall concentrate on the last two amendments first. The noble Lord indicated how just one participant dropping out can require the nominated purchaser to withdraw. It is the responsibility of tenants to organise themselves in an effective way when taking advantage of their rights. They should make provision for people dropping out and by doing so losing the qualifying majority, perhaps by requiring such a person to indemnify the remainder for any loss they may have suffered.
The noble Lord has considered only one case. We must also consider that his amendments would allow the rump of a participating group to continue with the purchase from the landlord even if most of the group had dropped out perhaps because they found they could not afford the price. Where a block is taken over by its residents, we believe it is a sound principle that the majority should not be ruled by a minority of their neighbours.
As I said, agreements between tenants should cater for eventualities. In the case of death, for instance, the obligation should pass to a professional representative. I understand the case made by the noble Lord, Lord Strabolgi, but feel that in trying to deal with some particular cases that are right on the edge with a majority close to 50 per cent., he is in danger of introducing even greater inequities in terms of the oppression of the minority of tenants who may not wish to go down that route. I hope that he will not move those amendments when we come to them.
I now turn to Amendments Nos. 102 and 106. The noble Lord argued that tenants are restricted when responding to their landlord's offer of a right of first refusal. There are two things that they must do: first, accept the offer and, secondly, nominate a purchaser. The landlord's offer will specify time limits of at least two months for each action so that tenants will have at least four months in which to nominate a purchaser. I accept the arguments of the noble Lord, Lord Strabolgi, that tenants may be precluded from nominating a purchaser at the same time as accepting the offer. We agree that there is no reason why tenants should not be able to accelerate the process if they are able to do so.
Unfortunately, the wording of the noble Lord's amendments will not have quite the effect intended. Further amendments may be needed. We shall therefore reflect on the matter and, if necessary, bring forward further amendments. We have the opportunity of Commons consideration of Lords amendments, if necessary, to do that, this being an amendment.
However, with some sense of nervousness, I draw the attention of the House to Section 20(4) of the 1987 Act. It must have been born rather before your Lordships' Committee on the Scrutiny of Delegated Legislation, as it is a classic Henry VIII clause and would give us the necessary powers to make this sort of amendment in this
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section of the Bill. I know that in Committee I said that we should not be using the Henry VIII provision in the 1987 Act. Making technical adjustments of the nature proposed by the noble Lord, Lord Strabolgi, might be a reasonable use of this clause. I am somewhat comforted by the attitude taken by the noble Lord, Lord Dubs, in proposing Amendment No. 26; namely, that he is prepared to see the Secretary of State given fairly wide powers to institute changes of this sort. However, I do not wish to understate my nervousness at proposing this particular route.
I now turn to the points raised by the noble Lord, Lord Williams of Elvel. He raised a question as to the meaning of options or rights of pre-emption. An option is, broadly, a right for the person with the benefit of the option to call for the property to be transferred to him; a right of pre-emption is a right to have a first call on the property of the owner if the owner wants to sell. Those are fairly standard definitions. I do not believe that they would differ from the noble Lord's understanding of those phrases.
The noble Lord referred to the wording, "simplify the procedures" and its appropriateness in the Bill. I cannot offer the noble Lord an immediate answer.
Turning to Amendment No. 101, the words, "sever the transaction", mean splitting up the estate; that is, treating a job lot of several blocks as individual blocks. Therefore, so far as tenants are concerned, we are dealing only with the building of which they are occupants rather than a widely scattered group of buildings, which is not how they think of their property, although the property being sold by the landlord may consist of such a widely spread group.
The words "not less than 90 per cent." repeat Section 5(4)(a) and (b) in the existing Act. It clearly allows for one tenant—or in cases of blocks with more than 10 tenants, for 10 per cent. of tenants to be uncontactable. In a block with 20 tenants, it would allow for only two to be uncontactable. In other words, it allows for only a very small proportion of tenants to be impossible to contact. We thought that that was a reasonable concession as regards the difficulties that people can have in contacting all the tenants in a block.
The next question concerns Section 5(4)(b) of the existing Act. I do not have an answer for the noble Lord on that. As regards the period of 28 days in new paragraph 5B(6), that will be 28 calendar days. New paragraph 5E(2)(b) refers to "the requisite majority", which is defined in Section 5 and is unchanged from the 1987 Act. As regards the meanings of the words on page 25 in subparagraph (6)—ceasing to be "a nominated person"—I do not have an answer for the noble Lord. As for paragraph 8(5) on page 26, again, there is nothing that I have to offer the noble Lord in that respect.
I turn now to page 27 and paragraph 8B(6). The "nominated person" does not have to give notice, but he is still deemed to have withdrawn. Paragraph 8E(6), which refers to "joint and several liability", is not a new principle; it replicates existing provisions. In general, one would expect a "nominated person" (who is the person receiving the freehold) to be a company of some

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description created for the purpose, or some body of that sort designed to receive the freehold on behalf of the tenants.
Lord Williams of Elvel: My Lords, joint and several liability?
Lord Lucas: My Lords, I understand the phrase and I know the implications of it. The only comfort that I can give to the noble Lord is that it has been in statute for a while. As noble Lords may have had cause to know, it is a severe provision if one is caught by it. As regards "documents of any other description" and "alerting the tenants" in paragraph 8D(2)(b), we believe that those phrases mean exactly what they would mean in ordinary straightforward English. As regards page 29 of the amendment—
Lord Williams of Elvel: My Lords, does that mean e-mail as well?
Lord Lucas: My Lords, the noble Lord asks an interesting question. I certainly understand it to mean e-mail. I shall return to the noble Lord as to whether that would mean the same to a lawyer.
I return now to the last question asked by the noble Lord about paragraph 9A on page 29. As regards the form of the notice and how the landlord becomes aware, I have no answer to give the noble Lord. I am quite clear that, on the many points made by the noble Lord, I or my officials and colleagues will have some writing to do to the noble Lord in fairly short order so as to give him full and proper answers to the questions raised. I am sure that this is a matter which will be studied in some depth in another place.
I appreciate that that is the great disadvantage of tabling such an extensive amendment at this late stage. But, as noble Lords can see, it has been quite a major work to get this matter into a state where we believe it to be suitable to present to your Lordships. Despite the late stage of the Bill, we believe that this is an important and essential change to make to the Bill. Therefore, we shall proceed with the amendment.
Perhaps I may also thank my noble friend Lord Selsdon for the support that he gave to this amendment and to the Bill generally. I hope that I can also give comfort to my noble friend Lord Bathurst that the iniquities of Smith's Charity are one of the principal reasons for us instituting this part of the Bill and that they are iniquities to which we very much hope we shall put an effective end.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 28:
After Clause 90, insert the following new clause—
PROCEDURE FOR EXERCISE OF RIGHTS OF FIRST REFUSAL
(".—(1) Part I of the Landlord and Tenant Act 1987 (tenants' rights of first refusal) is amended in accordance with Schedule (Amendments of Part I of the Landlord and Tenant Act 1987).
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(2) The amendments restate the principal provisions of that Part so as to—

(a) simplify the procedures for the exercise of the rights conferred on tenants, and

(b) apply those procedures in relation to contracts and certain special cases.

(3) In Schedule (Amendments of Part I of the Landlord and Tenant Act 1987)
Part I sets out provisions replacing sections 5 to 10 of the Act (rights of first refusal),
Part II sets out provisions replacing sections 11 to 15 of the Act (enforcement by tenants of rights against purchaser),
Part III sets out provisions replacing sections 16 and 17 of the Act (enforcement of rights against subsequent purchasers and termination of rights), and
Part IV contains consequential amendments.").
The noble Lord said: My Lords, I have just spoken to Amendments Nos. 28 to 30. I spoke to Amendment No. 31 with Amendment No. 24. I beg to move.
On Question, amendment agreed to.
Clause 91 [Part I of the Landlord and Tenant Act 1987: procedural changes]:
Lord Lucas Lord Lucas moved Amendment No. 29:
Leave out Clause 91.
On Question, amendment agreed to.
Clause 92 [Part I of the Landlord and Tenant Act 1987: other amendments]:
Lord Lucas Lord Lucas moved Amendment No. 30:
Leave out Clause 92.
On Question, amendment agreed to.
Clause 93 [Duty of new landlord to inform tenant of rights]:
Lord Lucas Lord Lucas moved Amendment No. 31:
Page 68, line 32, at end insert—
("( ) In section 32(1) of the Landlord and Tenant Act 1985 (provisions not applying to tenancies within Part II of the Landlord and Tenant Act 1954), for "sections 1 to 3" substitute "sections 1 to 3A".").
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 32:
Before Clause 94, insert the following new clause—
EXTENSION OF CERTAIN RIGHTS TO TENANTS OF REGISTERED SOCIAL LANDLORDS
(" . In Chapter I of Part I of Housing Act 1988 (assured tenancies) after section 19 (restriction on levy of distress for rent) there shall be inserted—
"Extension of certain rights to tenants of registered social landlords.
19A.—(1) Unless otherwise stated, references in this section to a section or a Schedule are references to a section or a Schedule of the Housing Act 1985.
(2) The provisions of sections 87 to 90 (succession on death of tenant) shall apply on the death of an assured tenant of a registered social landlord as if he were a secure tenant and section 17 of the Housing Act 1988 (succession to assured periodic tenancy by spouse) shall apply in such cases.

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(3) The provisions of sections 91 to 94 (assignment, lodgers and subletting) shall apply to an assured tenant of a registered social landlord as if he were a secure tenant and section 15 of this Act (limited prohibition on assignment etc. without consent) shall not apply in such cases.
(4) Sections 96 to 101 (tenant's improvements) and section 105 (consultation on matters of housing management) shall apply to an assured tenant of a registered social landlord as if he were a secure tenant.".").
The noble Baroness said: My Lords, I hope that this is a less complicated matter. I apologise for the late tabling of the amendment, although I did warn the Minister that I was proposing to do so. I told him of the question that I would be asking on the back of it. This amendment is about extending certain rights of tenants of registered social landlords. At the last stage of the Bill the noble Lord, Lord Lucas, referred to the rights being provided as a matter of contract under the tenant's guarantee so that a statutory provision was not necessary in the Government's view. He referred to possible recourse to the housing ombudsman. He said,
"If there is a dispute about the facts of any particular case, there can be recourse to the independent housing ombudsman who under the Bill will have power to determine such matters and require them to be put right".—[Official Report, 10/7/96; col. 310.]
I commented at that point that I wondered whether the ombudsman's powers in dealing with maladministration leading to an injustice were adequate to deal with the matter. I felt that it was appropriate to ask the Minister to explain a little further the powers of the ombudsman to deal with disputes on matters of fact. Since Report stage, inquiries have been made of the Housing Corporation ombudsman. The response that I have seen indicates that, if the problem is one where some matters of fact are in dispute, the ombudsman would expect one of the parties to seek independent professional assistance. The ombudsman cannot decide on a dispute, but may be able to appoint an arbitrator if the parties to the dispute agree to refer the matter to arbitration. The comment was made that the ombudsman can engage the services of consultants if he needs expert advice.
In the light of all that and in a spirit of inquiry, I shall be grateful if the Minister can take the opportunity to expand on the point that he made at Report stage in his assurances that my amendment was not in fact necessary. I beg to move.
Lord Lucas: My Lords, I very much hope that I can give the noble Baroness the comfort that she desires. The housing ombudsman's powers will be primarily concerned with issues of maladministration, but they may go wider. He may consider any complaints. He may be required to consider what are the facts of the case. The terms of membership of an ombudsman scheme will be that the landlord has his own complaints procedure, which would also encompass determining matters of fact. Finally, if there were an issue which was outside the ombudsman's terms of reference and it concerned succession rights, that would be a matter which the Housing Corporation could look at as it might constitute a failure to comply with the tenant's guarantee. It could take action. It could, for instance, make an appointee or institute an inquiry if that were warranted.
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I am sure that the noble Baroness understands our basic position. The tenant's guarantee is the right way, in general, to approach such questions where housing associations are concerned. I am sure that the noble Baroness understands that we stick to that principle. Nonetheless, I appreciate her concerns and hope that I have given her sufficient answer to reassure her that such matters will, in practice, be dealt with.
Baroness Hamwee: My Lords, I am not sure about that. The noble Lord says that he hopes that he can give me what I desire. I expect that he, like probably all other noble Lords in the Chamber, including myself, desires at least a tea-break. However, the interests of the nation take precedence.
I am not sure that the noble Lord has answered my points, but at any rate honour is satisfied. I have had another go. It may be that, as a result of reading what has been said, further help will be available in the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Baroness Hamwee Baroness Hamwee moved Amendment No. 33:
After Clause 95, insert the following new clause—
REGISTRATION OF RENTAL DEPOSIT MONEY
(".—(1) The Secretary of State may by order make a scheme or schemes authorising the registration and holding of all rental deposit monies charged by landlords letting residential properties.
(2) The Secretary of State may at any time by order vary or revoke a scheme.
(3) An order under subsection (1) shall be made by statutory instrument and shall be subject to approval by resolution of both Houses of Parliament.").
The noble Baroness said: My Lords, again, this amendment relates to a small point. The question of rental deposit schemes was debated at length at earlier stages. The Government's undertaking to look at what is happening with regard to such schemes in other countries is welcome.
I have tabled this amendment in order to take the matter a little further and so that I may ask a simple question which I should have thought of asking earlier. Can the Minister give a clear undertaking of the timetable for the research? I now have a second (and obvious) supplementary question. In undertaking the research on the evidence from abroad, can the Minister give any indication about the consultation with interested parties? In the light of our debate at the start of today's proceedings on this Bill, I am sure that the Minister will understand that by "consultation" I include, "having regard to the views of those parties consulted". I beg to move.
Lord Monson: My Lords, the noble Baroness, Lady Hamwee, moved a more or less similar amendment on Report. I supported her then and I do so again now. Although it paves the way for secondary legislation, I do not think that I am being inconsistent in any way in supporting this amendment, having opposed the earlier amendment. The issues at stake here are simple and are by no means of earth-shaking

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importance. The principle has had widespread support, as the noble Baroness mentioned, in all quarters of the House. I do not think that there has been any opposition to the principle. However, a few matters need to be resolved; notably, investigation into the success or otherwise of the Australian experiment. There have been inconsistent reports about whether or not it has been successful. Obviously, that matter must be investigated.
Other details also need to be resolved, not least the question of what happens to the interest earned. For what it is worth, I think that the only solution would be for it to be ploughed back into the running of the scheme, otherwise the tax implications would be horrendous. Such details need to he considered at leisure. For that reason, I think that the amendment gives a not unreasonable amount of discretion to the Secretary of State and I am happy to support it.
Earl Ferrers: My Lords, as the noble Lord, Lord Monson, said, we considered a similar amendment at the previous stage when we had an informative discussion on the merits of the Rental Bond Board of New South Wales. There are two main points to consider. First, we need to consider whether the problem is sufficient to warrant the cost and bureaucracy of setting up such a scheme. Here we must take into account the findings of the English House Condition Survey. This shows that only 4 per cent. of tenants are on bad terms with their landlords. While this gives no grounds for complacency, it does put the issue into context. Secondly, there is the question of how to handle the difficult issue of disputes over who has the best claim to the money at the end of the tenancy. The real problem is how to find a speedy and effective means of resolving who has the best claim.
The noble Baroness asked two questions: what is the timetable for the research and what about the consultation? She wanted to know whether, having consulted, we would have any regard to the views of those consulted. We intend to carry out that research over the summer and autumn months. We shall consult voluntary organisations such as the National Association of Citizens' Advice Bureaux and others with an interest. I can assure the noble Baroness that we shall have regard to the views of those consulted as well as of those who are kind enough to give us their views, whether or not they have been consulted.
Baroness Hamwee: My Lords, I did not make myself clear. I hoped that I had explained that I had assumed that the consultation would lead to the Government "having regard to views". On the strength of this afternoon's debate, I am prepared not to push that any further.
The Minister's reply was helpful. Perhaps I may suggest that the department consults local authorities. On Report I mentioned a committee report from Suffolk—I forget from which district—drawing the matter to the attention of the members following consideration of certain poverty issues and difficulties in the good operation of the private rented sector. I am sure that local authorities would have useful things to say. I am grateful for the Minister's response and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamwee Baroness Hamwee moved Amendment No. 34:
After Clause 99, insert the following new clause—
RUALIATORY EVICTION: EXTENSION OF NOTICE
(". (1) After Section 22 of the Housing Act 1988 there shall be inserted
"Variation of notice period for notice under section 21.
22A.—(1) If, after a tenant makes a rent application to a rent assessment committee, a qualifying notice is served by the landlord on the tenant at any time before the decision of the committee is given or within the period of six months thereafter, then, subject to subsection (3) below, that notice shall not take effect before the expiry of that period.
(2) If, after a local housing authority have proposed to exercise any of their housing functions and communicated that to the landlord, a qualifying notice is served by the landlord on a tenant of a qualifying dwelling before that function is exercised (or, as the case may be, a communication is made under subsection (4) below) or within a period of six months thereafter, then, subject to subsection (3) below, the notice shall not take effect before the expiry of that period.
(3) In a case falling within subsection (1) or (2) above (except where relevant proceedings have been commenced but not yet concluded)—

(a) the rent assessment committee may at any time (including before or after the disposal or withdrawal of a rent application), if they think fit, direct that a shorter period shall be substituted for the period specified in that subsection;

(b) if a rent application is withdrawn, the period during which the notice is not to take effect by virtue of subsection (1), shall end on the expiry of seven days from the withdrawal of the application.

(4) In the case falling within subsection (2) above, if the local housing authority cease to propose to exercise any of their housing functions they shall forthwith communicate that fact to the landlord and every tenant in the building.
(5) If, after a tenant has commenced legal proceedings against his landlord to secure or enforce his rights as a tenant or has communicated in writing to the landlord that he intends to commence such proceedings (whether conditionally or otherwise) a qualifying notice is served by the landlord on the tenant at any time before six months have elapsed since the earlier of the first such communication in writing or the commencement of such proceedings or within a period of six months thereafter, then, subject to subsection (6) below, the notice shall not take effect before the expiry of that period.
(6) In a case falling within subsection (4)—

(a) where relevant proceedings have not been issued, an application may be made to a rent assessment committee who may, whether or not such proceedings have subsequently been issued, at any time if they think fit, direct that a shorter period shall he substituted for the period specified in that subsection; and

(b) where relevant proceedings have been issued, an application may be made to the court in which the proceedings were commenced (whether before or after the conclusion of such proceedings) which may at any time if it thinks fit, direct that a shorter period shall be substituted for the period specified in that subsection.

(7) In this section—
"housing functions- means the local housing authority's functions under the Housing Act 1985 (other than under section 348D of that Act) or under the Environmental Protection Act 1989;

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"landlord" means the landlord of an assured shorthold tenant;
"qualifying dwelling" means a dwelling being, or being part of, a building in respect of which the authority propose to exercise any of their functions under the Housing Act 1985 (other than under section 348D of that Act);
"qualifying notice" means a notice complying with subsections (1)(b) or 4(a) of section 21 above:
"relevant proceedings" means proceedings in a county court or the High Court such as are referred to in subsection (4);
"rent application" means an application to a rent assessment committee under section 22 above; and
"tenant" means a tenant under an assured shorthold tenancy.".").
The noble Baroness said: My Lords, I apologise to your Lordships for the fact that this amendment appears terrifyingly long. This is not a new matter and, again, the amendment has been tabled to seek assurances on certain matters.
"Retaliatory eviction" is shorthand for eviction which is not unlawful but which is a landlord's response to a tenant behaving in a way which the landlord does not welcome. The tenant may have complained about matters such as harassment or may have drawn the bad state of repair of the property to the attention of the local environmental health department. It is important that tenants can complain without fear of losing their home.
The proposed measure to stop retaliatory eviction is intended to encourage responsible landlords—I am sure that responsible landlords would support such a measure—and to increase tenants' bargaining powers when dealing with unscrupulous landlords. If the Government do not feel that they can incorporate such a new clause in the Bill, I ask them to give an assurance that they will undertake research into the problem of retaliatory eviction. It is important that the Government become fully aware of the scale of the problem both in terms of eviction and in terms of tenants' inability to enforce their rights. The Government should look for ways of overcoming the problem. I am told that some overseas legislation contains possibly helpful models of how to protect tenants against retaliatory eviction. Perhaps the Government will consider assessing those measures and their applicability to our system.
At previous stages of this Bill your Lordships heard examples of the actions of unscrupulous landlords. I believe that the noble Lord, Lord Dubs, referred to improvement works on HMOs in the area of Swiss Cottage where the programme of works appeared to lead to a 15 per cent. loss of accommodation, although it is likely that that accommodation will be back on the market when the local authority programme moves on. There are similar examples. I am sure that your Lordships agree that the unequal bargaining power of tenants to which I have referred is not something to be supported, even indirectly. I beg to move.
Earl Ferrers:My Lords, I am bound to tell the noble Baroness that I have difficulty with the amendment that she proposes. It could prevent a landlord from regaining possession of his property for over six months after the end of the initial six-month period or the end of a
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pre-agreed fixed term. The tenant would simply have to apply to the rent assessment committee for a rent determination or write to the landlord saying that he intended to commence legal proceedings to enforce his rights in order to get the tenancy extended. Unlike the previous proposal of the noble Baroness, this one would allow a court or rent assessment committee to reduce the notice period if it thought it reasonable to do so. I appreciate that this is intended to address the objections that I raised to the last proposal that the landlord would be prevented from getting the tenant out for the extended period even if he had reasonable grounds for doing so. I do not believe that rent assessment committees should be asked to arbitrate in a dispute between landlord and tenant about whether the landlord is taking action for repossession in retaliation for the tenant seeking to exercise a legal right. I do not believe that it is appropriate to give the committees that role. After all, their primary function now is to determine rents. They should not have the role of deciding who has the better case in those circumstances.
If we impose this role on the courts we will create enormous scope for dispute, delay and confusion. It is extremely difficult to establish what someone's motive may be for acting in a particular way. How is a court to decide who has the best case where, for example, the landlord is required by the action of the tenant or a local authority to carry out repairs? If the landlord cannot afford to do the repairs and decides to sell the property instead, should he be able to regain possession as quickly as possible within the existing procedures, or should the tenant be allowed to stay on in his home which the landlord needs to have possession of in order to do the repairs for an additional six months? I assure the noble Baroness that I have sympathy with the minority of tenants who have difficulty getting their landlords to do repairs or to meet some other obligation under the tenancy agreement.
The noble Baroness asked whether we intended to do any research. I gave an undertaking to look at the legislation and the guidance in other countries to see whether there was any merit in applying their legislation or guidance to our own situation. I do not know whether the noble Baroness would regard that as research. I believe that it falls within the general ambit of what most people would call research. We want to see what others are doing to find out whether we can best apply it ourselves. I do not believe that we should rush into imposing a complicated structure such as the one proposed by the noble Baroness. It could undermine all of the progress made in the private rented sector since 1988. I hope that the noble Baroness will accept my undertaking.
7.15 p.m.
Baroness Hamwee: My Lords, perhaps one needs to be a little cautious in assessing the arguments advanced by some landlords—I do not attribute this to every landlord by any means—for not undertaking repairs. I do not need to repeat how important is the private rented sector. I do not seek to discourage landlords. I seek to encourage good landlords and to do something more than just discourage bad landlords. To put a tenant

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in a position where he cannot complain without fear of losing his home is a very sad situation. In New South Wales and a number of states in the US I understand that the courts have no difficulty operating retaliatory eviction procedures. I look forward to hearing the results of the Government's investigations. I do not attribute any particular qualities to the term "research". We all know what we are talking about. But I suggest that in furtherance of the Government's own policy it would be wise to pursue the matter with some vigour. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 35:
After Clause 122, insert the following new clause—
CONSULTATION ON AMENDMENT OF HOUSING BENEFIT REGULATIONS
(" . After subsection (1) of section 123 of the Social Security Contributions and Benefits Act 1992 there shall be inserted—
"(1A) Before making any amendment to the prescribed scheme for housing benefit in relation to non-dependent deductions from benefit, the Secretary of State shall lay a report as to his proposals and the responses to consultation on them before each House of Parliament.".").
The noble Baroness said: My Lords, this amendment is concerned with housing benefit. In particular, the amendment picks up an issue relating to non-dependent deductions. At the moment, if an adult son is living at home with his parents who are on housing benefit the parents will have their benefit reduced by £6, £12, £16 or £32 a week, depending on the earnings of the son. A fortnight ago the Government announced that they intended to increase the deductions from housing benefit from April 1997 by two further higher bands of £36 and £39 for those earning £250 a week or more.
Had the timing been more appropriate we would have raised the matter at an earlier stage, but the details have only just emerged from the Government. Why does this matter concern us, and why is it raised in this part of the Bill? First, most adult sons and daughters who live at home are not aware of how deductions operate. Local authorities are not in touch with them. Therefore, they are unaware how much housing benefit their parents lose if the parents do not know their income or they do and declare it. The Government's own research shows that three-quarters of adult non-dependants do not know how the system works and therefore do not pay the money to their parents in lieu of lost housing benefit, even if they could.
Secondly, the scale of non-dependent deductions takes no account of the rent paid and housing benefit received or the quality and size of the accommodation in which the family is living. I take as an example a Bengali family living on income support with a daughter earning £152 per week. Her parents will suffer a deduction of £30 a week from their housing benefit, even though the family is grossly overcrowded and she is sharing a double bed in one bedroom with three brothers, for which she pays £30 a week. If an adult son or daughter does not pay over the money elderly parents face arrears because the housing benefit does not cover the rent. If it is paid over the adult child is likely quickly to find that he is better off moving out. Thirdly, young
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people living at home, with housing benefit deductions at this level, will find it cheaper to rent a bedsit or flat at £30 or £35 a week outside London than pay the same sum over to their parents and crowd their parents' home. When they move out the parents must have full housing benefit, so it will cost the taxpayer more. It is possible that the son or daughter, depending on income, will in turn be eligible for housing benefit in the new accommodation, which may also cost the taxpayer more. It also puts pressure on the family to break up. If an adult son leaves home elderly parents may be under-occupying their accommodation, while at the same time the adult son is competing in the private rented sector for his own home. As such accommodation is in short supply, it encourages rents to rise and thus encourages housing benefit to spiral up. Those are tunnel vision policies. To achieve short-term savings by reducing housing benefit to elderly and often disabled parents, the Government will knowingly incur additional expenditure on housing benefit as well as putting pressure and strain on family relationships. Effectively, the Government are returning to the hated household means test.
Nearly half the parents of the adult non-dependants affected are elderly or disabled. The Government's own research shows that one-fifth of them do not know how much their adult sons earn. The loss of an adult son or daughter from the home loses also a potential carer from that home. That is particularly important if the elderly parent is becoming frail. That is what the Government will be doing. Last November the Government reduced housing benefit for young people in their own independent rented accommodation because, as the Secretary of State said:
"Housing benefit should not provide an incentive for young people to leave the parental home unnecessarily or to take on high price accommodation at the taxpayer's expense".
Yet, by increasing the adult non-dependent deductions that is precisely what the Government are doing. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, this is an interesting new clause. The noble Baroness has explained why she tabled it. I do not know whether she wants to deal particularly with the detail of the amendment; she herself did not deal with it. She wanted to discuss the policy and principle of non-dependent deductions. Anyone who was listening might have reasonably come to the conclusion that the party opposite was saying that it was against non-dependent deductions, and that therefore it might wish to abolish them with the additional costs on housing benefit and income support that that would bring to the taxpayer.
Baroness Hollis of Heigham: My Lords, perhaps the Minister will give way. He has a habit of trying to assume that because one criticises the latest extra cut in housing benefit that one is therefore automatically opposed to all adult non-dependent deductions. That is

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not what I have said. That is not what I have ever said. I wish that the Minister would stick to his brief rather than try to give me mine.
Lord Mackay of Ardbrecknish: My Lords, I of course take the reprimand from the noble Baroness. In every example she gave, needless to say, the household was crowded. Given average housing occupancy in this country, that would be pretty rare. Needless to say, in almost every case, she was talking about elderly parents and disabled parents.
Baroness Hollis of Heigham: My Lords, will the Minister give way? I was careful to say that the DoE research showed that half of them were elderly or disabled. Again, the Minister is trying to put words into my mouth that I did not use. Is his case so weak that he cannot rely on his own arguments and has to impute arguments to me?
Lord Mackay of Ardbrecknish: My Lords, I was just trying to point out that if the noble Baroness really meant what she said, then the logical conclusion to her argument—perhaps "logical conclusion" are not the right words—would be that those non-dependent deductions should be abolished. Because if they bite in the way the noble Baroness complains that the changes to which I shall come in a moment will bite, they must bite at the other levels—the lower levels. The noble Baroness cannot have it both ways. She can make a targeted criticism of our changes, but I regret to say that she seemed to be making a pretty scatter-gun attack on the whole principle of non-dependent deductions.
The noble Baroness clearly wishes to have a discussion on that subject and not on the detail of her amendment. Her amendment, interestingly enough, would introduce consultation, but there is already a fair amount of consultation because changes to housing benefit regulations are subject to referral to the SSAC. It is for that committee to decide whether it wishes to consult interested parties about the Secretary of State's proposals. Additionally, for housing benefit and council tax benefit the Secretary of State is required to consult organisations representing local authorities.
When the Secretary of State consults the SSAC, and the committee decides to go out to consultation and reports subsequently, the Secretary of State is obliged to provide a report to Parliament on his response when the regulations are laid before us. In that respect, the proposed amendment merely duplicates that requirement.
I believe that the noble Baroness is more interested in having a discussion about the changes we have made. As she has rightly pointed out, to date there have been four different groups relating to non-dependent deductions: a group of less than £76; £76 to £114; £114 to £150; and £150 and over. We have decided that we should group after £150. We should group £150 to £200; then £200 to £250; and over £250, rather than make the deduction, which is £32 beyond £150, go beyond £150 and as far as one cares to go. We feel we should put in a couple of extra steps, which is what we have done. So
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if a non-dependant in the household—a household which is claiming housing benefit—is earning over £200 (between £200 and £250), a deduction of £36 will be made, and if they earn above £250 a week a deduction of £39 will be made.
Those are the changes we propose. The SSAC to which we sent the proposal has agreed that it does not wish to consult on the proposed changes. Nor indeed did it consult formally on the amendments which introduced the present structure of deductions in 1992. The current proposed amendment regulations are still with the local authority associations for consultation.
Non-dependent deductions form an integral part of the social security scheme. I am pleased to hear that the noble Baroness agrees entirely that they should do so. It is a long-established principle that a claimant should not have housing costs paid in full by other taxpayers if there are others in the household who can contribute to those costs. That principle was accepted by the SSAC when the regulations that provide for the current structure were referred to it in 1992.
It is unnecessary to place extra steps into the system when we already have consultation on the statute book. As I have said, that consultation has led in this instance, as on the previous occasion, to the SSAC not going out to consultation.
The noble Baroness made much—of course one can make it at any level, not just at the two new steps we are introducing, which was the point I was making, and which seemed to sting her a little—of the fact that a parent may not know what the other adult member in the household is earning, or the other adult member may not know that deductions from housing benefit are being made. We are talking about adults. It is up to the people who live in the household to make suitable financial arrangements. It is up to the tenant to do so with those people who live with him or her. That includes adult non-dependants, who will most often be the grown-up youngsters of the family. We cannot intervene in arrangements between adults. They should be a matter for them.
The noble Baroness always manages to bring in the disabled. We already provide extra help for a tenant by ignoring the presence of non-dependants if the tenant receives AA or the care component of DLA or is registered blind. Indeed, SSAC acknowledged that in 1992 and agreed that there was no evidence that NDDs were a disincentive for caring. I hope that answers the point that the noble Baroness made.
I am not entirely sure that it would be cheaper for a non-dependant to move out. Even if the non-dependant were paying above the maximum of £39 a week, if your Lordships contrast that with the average private-sector rent of £65 a week, plus £10 a week council tax, they will see that it compares favourably with the maximum total NDD of rent and council tax of £43 a week. That is considerably less than the £75 a week which one might expect on average. I know that that is an average but we must look at the average situation. Therefore, I do not believe that the case is made that young people who live in the family home will find the proposal an imposition which forces them to leave the family home and obtain more expensive accommodation elsewhere.

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Non-dependent deduction is an important part of the benefits system. It has a key part to play because it would clearly be quite wrong if, when deciding on housing benefit, we absolutely ignored other income coming into the household. It would be unfair to other taxpayers and rent payers, some of whom might be earning less than the individual who is bringing in the earnings to the household where he is not the tenant.
I believe that we are taking a sensible step forward in adding the two rates at the higher earning level. Of course we will make modest savings but they are part and parcel of the continuing effort which the Government must undertake in order to keep government spending under control. As I said earlier, it is important that we in social security, with a budget of one-third of all government spending, are particularly careful to ensure that in all cases we are being absolutely fair to the taxpayers from whom we take that vast amount of money.
I believe that we are making a small and sensible change which reflects the reality that in some households there will be people earning £150, £200, £250 and more a week. It is quite just that they should be asked and expected to pay their fair share of the rent and council tax imposed on that house.
7.30 p.m.
Baroness Hollis of Heigham: My Lords, I do not believe that the Minister understands exactly what happens in such families. He suggested that we were trying to ignore other income. The amendment never provided for that and I never asked for it. It is proper that adult non-dependants should make a reasonable contribution to the household living expenses. In my opening remarks I made it clear that I believe that the steps proposed are excessive. I believe that the non-dependent deductions are counter-productive and that the additional steps are excessive.
The reason for that is that the vast majority of rented housing is not private-rented housing, as the Minister said; it is council housing and, to a lesser extent, housing association property. The average rent of a local authority council property is £42 a week across the country. If one excludes London from that figure, the national average in England and Wales is considerably lower. Nevertheless, perhaps we may take £42 a week as the national average rent for a local authority property—
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Baroness for giving way. From time to time she accuses me of not living in the real world but I do not believe that in the real world a single adult—that is the type of person about whom we are probably talking—if he decided to leave the parental home, would qualify for a council house. Therefore, I believe that we are talking about him looking for a house in the private-rented sector. I should be amazed if he would qualify immediately for a council house.
Baroness Hollis of Heigham: My Lords, perhaps I was not clear or the Minister was not concentrating. That was not what I said. The family, the household, would be living in a council house for which the average
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rent would be £42 a week. If that family were on income support, without the adult son their entire rent would be paid by housing benefit. An adult son living at home may be assumed to be contributing £39 a week and therefore the housing benefit would be down to £3 a week.
Let us assume that, as a result of believing that it is unreasonable that he should pay £39 out of £42 a week rent, he moves out perhaps to a private-rented flat or, if he is on a waiting list, to a council flat. He might move in with someone else. However, he will almost certainly find somewhere cheaper than the £39 a week that he is contributing to his parents' housing benefit. Immediately he moves out the Government have to pay the housing benefit in full for the parental home; that is the full £42 a week. If the son, now in a place of his own, loses his job the Government will have to pay his housing benefit too.
Although there may be some short-term savings, I believe that the consequences of the Government's position are perverse. I speak from experience because I see young people moving out of the home when they are expected to contribute half or even more of the rent of the parental home. I am worried not only about the financial consequences but about the fact that we are breaking up a family situation. The adult child might have been willing to live at home and there may now be implications for the family, especially as regards carers where there is a disabled member of the family. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 128 [Notice of proceedings for possession]:
Lord Lucas Lord Lucas moved Amendment No. 36:
Page 85, line 37, leave out from ("section") to end of line 38.
The noble Lord said: My Lords, in moving Amendment No. 36 I shall speak also to Amendments Nos. 37 to 49. They fulfil an undertaking which I made during the Report stage in a debate on an amendment tabled by my noble friend Lord Swinfen. They will provide the Secretary of State with a power to make an order to prescribe procedure for the internal review which the local authority or housing action trust must carry out if an introductory tenant is unhappy with the decision to evict him or her.
The Department of the Environment will consult the local authority associations and others, including tenants' organisations, on the terms of the regulations and the accompanying advice. In that way we can be sure that a system which is fair and equitable for both tenants and landlords is set in place.
Amendment No. 40 removes Clause 129 from the Bill. That contains the current provisions for an internal review which, by Amendments Nos. 38 and 39, are incorporated in the new provision. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 37:
Page 86, line 8, leave out from ("proceedings") to end of line 9.
The noble Lord said: My Lords, I have spoken to this amendment. I beg to move.
Baroness Hamwee: My Lords, I apologise to the House for being too slow to rise during the previous amendment to ask a question about Amendment No. 39. Perhaps it would be appropriate to do so now as the three amendments are grouped together. In subsection (6) the amendment provides:
"The review shall be carried out and the tenant notified before the date specified".
As I read that, it could be five minutes before the date specified.
At the beginning of today's proceedings we debated the difficulties which some of us had in reacting to amendments. This is the amendment to which I should have liked to move a manuscript amendment had I noticed the point in time. It would have sought to urge the Government to provide that, if the tenant were given notice close to the date specified as the date after which proceedings can be started, there should be a mechanism for extending the date for the proceedings. I do not know whether I have made that clear. In other words, can the Government find a way of inserting a suitable gap to enable the tenant to deal with the question of proceedings after receiving notification of the outcome of the review?
Lord Lucas: My Lords, I entirely appreciate the question which the noble Baroness has asked. Perhaps we shall find that when we get to Amendment No. 39 I have an answer.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 38:
Page 86, line 9, at end insert—
("( ) The notice shall inform the tenant of his right to request a review of the landlord's decision to seek an order for possession and of the time within which such a request must be made.").
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 39:
After Clause 128, insert the following new clause—
REVIEW OF DECISION TO SEEK POSSESSION
(".—(1) A request for review of the landlord's decision to seek an order for possession of a dwelling-house let under an introductory tenancy must be made before the end of the period of 14 days beginning with the day on which the notice of proceedings is served.
(2) On a request being duly made to it, the landlord shall review its decision.
(3) The Secretary of State may make provision by regulations as to the procedure to be followed in connection with a review under this section.
Nothing in the following provisions affects the generality of this power.
(4) Provision may be made by regulations—

(a) requiring the decision on review to be made by a person of appropriate seniority who was not involved in the original decision, and

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(b) as to the circumstances in which the person concerned is entitled to an oral hearing, and whether and by whom he may be represented at such a hearing.

(5) The landlord shall notify the person concerned of the decision on the review.
If the decision is to confirm the original decision, the landlord shall also notify him of the reasons for the decision.
(6) The review shall be carried out and the tenant notified before the date specified in the notice of proceedings as the date after which proceedings for the possession of the dwelling-house may be begun.").
The noble Lord said: My Lords, I beg to move Amendment No. 39. The noble Baroness, Lady Hamwee, raised a question on the procedure set out in subsection (6) of the amendment. The time limit has to be set for the service of the notice, and court proceedings can only be raised after that date. So, as long as the results of the appeal have been notified to the tenant before the court proceedings begin, the tenant will have the whole of that time period in which to deal with the consequences of the decision, whichever way it has gone. We feel that that should be sufficient.
Baroness Hamwee: My Lords, I am not sure I accept that relying on the fact that the courts do not necessarily move very quickly is an adequate answer to this. The Government have already suggested that certain matters might be reviewed when the Bill goes back to the Commons. This is not intended to be more than a common sense point. I know the Minister well enough to know that he will not dismiss my point out of hand.
On Question, amendment agreed to.
Clause 129 [Right to request review of decision to seek possession]:
Lord Lucas Lord Lucas moved Amendment No. 40:
Leave out Clause 129.
On Question, amendment agreed to.
Clause 132 [Cases where the tenant is a successor]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 41:
Page 87, line 31, leave out ("or").
The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 42. At the last stage, on 8th July, the noble Lord, Lord Lucas, said that he laid the blame for a series of amendments at the door of my noble friend Lord Meston and myself. He said that at Committee stage we taxed him with the necessity of ensuring that the various provisions for the transfer of property on matrimonial breakdown were properly reflected in housing legislation.
I have been advised that this seems to be the only provision in the Bill without a reference to this part of the Children Act being added to it. I have therefore tabled this amendment in order to explore whether that was deliberate on the part of the Government or whether this is a lacuna or any other polite word for an oversight or error—and I claim no credit for spotting the gap.
Therefore, I am giving the Government an opportunity to add the reference here, if it should be necessary. I beg to move.
Lord Lucas: My Lords, at first sight this amendment seems to deal with some pretty high odds situations. The sort of situation which would be covered, for example, is where a tenancy has been transferred to a wife under paragraph 1 of Schedule 1 of the Children Act for the benefit of a child. The wife, who is now the tenant, is widowed or divorced subsequently, and remarries. If she then dies, her second husband would not be entitled to succeed to the tenancy because the original transfer under the Children Act would count as a succession. The second succession could not take place unless such transfers were to be included in the list of exceptions. No, the reference to the Children Act was not omitted deliberately, but looking at the amendment of the noble Baroness, we do not think it is necessary. All the situations which are likely to arise under the rather obscure conditions that might fit in with this amendment would be well dealt with by our circular of 14th May which we have discussed frequently before. This gives local authorities the right to make sensible decisions on who should succeed to a tenancy. This advice is far more comprehensive in its coverage than any attempt to isolate individual cases. With that reassurance, I ask the noble Baroness to withdraw the amendment.
Baroness Hamwee: My Lords, giving authorities the right to make sensible decisions is an interesting confession at this stage of the Bill. I entirely take the point that this would be dealing with a high odds situation. I think that was how the noble Lord referred to it. He will know, I am sure, that life is stranger than fiction, and that what statisticians might regard as high odds situations occur perhaps more than they would anticipate.
However, despite the comment I made at the last stage about trying to resist drafting amendments, I feel that it was appropriate to bring the matter to the attention of the Government. I hope that, having given authorities the right to make sensible decisions, we can depend on them to do so. I beg leave to withdraw the amendment.
Amendment by leave, withdrawn.
[Amendment No. 42 not moved.]
7.45 p.m.
Clause 133 [Succession to introductory tenancy]:
Lord Lucas Lord Lucas moved Amendment No. 43:
Page 88, line 7, leave out from ("tenant") to end of line 16 and insert (", the tenancy ceases to be an introductory tenancy—

(a) when it is vested or otherwise disposed of in the course of the administration of the tenant's estate, unless the vesting or other disposal is in pursuance of an order made under—

(i) section 24 of the Matrimonial Causes Act 1973 (property adjustment orders made in connection with matrimonial proceedings),

(ii) section 17(1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, &c.), or

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(iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or

(b) when it is known that when the tenancy is so vested or disposed of it will not be in pursuance of such an order:).

The noble Lord said: My Lords, in moving this amendment, I shall also speak to Amendment No. 115. These amendments result from the commitment which we gave to the noble Lord, Lord Williams, during Report stage that we would consider further the point that he raised about an apparent anomaly between the drafting of Sections 89 and 90 of the Housing Act 1985.
Section 89 provides that where a secure tenant dies, the tenancy remains secure until it is disposed of in the winding up of the estate. The tenancy therefore remains secure even where it is known that there is no successor and so the local authority can only obtain possession by service of a notice to quit on the personal representative even where there is no one occupying the dwelling.
These amendments will rectify the situation for secure tenants and will also prevent the same situation arising in the case of an introductory tenant. The result will be that councils will be able to obtain possession much more quickly when it is known that there will be no successor. I am sure that that is what we all want. I beg to move.
On Question, amendment agreed to.
Clause 138 [Jurisdiction of county court]:
Lord Lucas Lord Lucas moved Amendment No. 44:
Page 90, line 16, leave out first ("Part") and insert ("Chapter").
The noble Lord said: My Lords, in moving this amendment, I shall also speak to Amendment No. 45.
Clause 138 deals with the jurisdiction of the county court in disputes that may arise about introductory tenancies. These amendments clarify that the county court has jurisdiction to determine questions relating to introductory tenancies, which form Chapter 1 of Part V only and not the whole of Part V. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 45:
Page 90, line 16, leave out second ("Part") and insert ("Chapter").
On Question, amendment agreed to.
Clause 141 [Consequential amendments: introductory tenancies]:
Lord Lucas Lord Lucas moved Amendment No. 46:
Page 91, line 13, at end insert—
("( ) Without prejudice to the generality of subsection (2), an order under that subsection may make such provision in relation to an enactment as the Secretary of State considers appropriate as regards its application (with or without modifications) or non-application in relation to introductory tenants or introductory tenancies.").
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 47 and 48.
Clause 141 was inserted at Report stage in this House to provide a power for the Secretary of State to make an order to make the numerous consequential amendments that arise in legislation elsewhere in relation to introductory tenancies. As I explained then, the

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Department of the Environment will need to scrutinise references to secure tenancies to see if a similar reference to introductory tenancies is necessary.
Amendments Nos. 46, 47 and 48 are designed to clarify the order-making power and to ensure that it has sufficient scope for it to be exercised as was originally intended. Some of the legislative provisions which we may wish to apply to introductory tenancies may confer additional rights and obligations upon introductory tenants. We would not wish that to be prevented because the wording of the order-making power was not sufficiently wide. These amendments make sure that that cannot happen. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 47:
Page 91, line 14, leave out subsection (3).
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 48:
After Clause 141, insert the following new clause—
REGULATIONS AND ORDERS
(". Any regulations or order under this Part—

(a) may contain such incidental, supplementary or transitional provisions, or savings, as the Secretary of State thinks fit, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

On Question, amendment agreed to.
Clause 146 [Proceedings for possession or termination]:
Lord Lucas Lord Lucas moved Amendment No. 49:
Page 93, line 6, at end insert ("or for the termination of the tenancy, and").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 50 to 52. This is a set of purely technical amendments. I beg to move.
Baroness Hamwee: My Lords, I should like to ask a question on Amendment No. 52. The amendment states:
"when the notice is still in force".
Perhaps the Minister will explain that. I do not think there is any specific provision in the Bill as to when a notice is in force. I assume, although one should not necessarily do so, that a notice is in force until the matter which is the subject of the notice has finally been determined. Perhaps the Minister will confirm that.
Lord Lucas: My Lords, as the noble Baroness knows, the amendment amends Section 83A so that possession proceedings can be begun only where a notice of possession proceedings issued under Section 83 is in force. A notice will last for 12 months. In that way, an indefinite threat does not hang over the tenant. I hope that that clarifies the position to the noble Baroness.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 50 to 52:
Page 93, line 7, leave out from ("ground") to end of line 9.
Page 93, line 14, after ("also") insert—

("(i) state that proceedings for the possession of the dwelling-house may be begun immediately, and

(ii)")

Page 93, line 41, at beginning insert ("Where a notice under section 83 has been served on a tenant containing the information mentioned in subsection (3)(a) of that section, the court shall not entertain proceedings for the possession of the dwelling-house unless they are begun at a time when the notice is still in force.
(1A)").
On Question, amendments agreed to.
Clause 149 [Additional notice requirements: domestic violence]:
Lord Lucas Lord Lucas moved Amendment No. 53:
Page 95, line 44, after ("landlord") insert ("or, in the case of joint landlords, at least one of them").
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 54 to 57. Clause 149 requires a landlord who is seeking possession of a property from an assured tenant under the new ground of domestic violence to take all reasonable steps to serve a copy of the notice of possession proceedings additionally on the partners who have left the accommodation because of the violence against them.
Amendments Nos. 53 and 55 provide that where there are joint landlords, only one of the landlords needs to serve the notice. Amendment No. 54 clarifies the provision which allows the court to dispense with the requirement to serve a copy of the notice on the partner who has left to make it clear that it is only the requirement to serve a copy on that partner which can be dispensed with. Amendments Nos. 56 and 57 clarify the notice provisions which apply when the new ground for possession is added after possession proceedings have begun to make it clear that it does not need to refer to the date when possession proceedings might begin. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 54 to 57:
Page 96, line 2, leave out ("the requirement of such a notice") and insert ("such requirements as to service").
Page 96, line 9, after ("landlord") insert ("or, in the case of joint landlords, at least one of them").
Page 96, line 19, at end insert ("and").
Page 96, line 20, leave out from ("grounds") to end of line 22.
On Question, amendments agreed to.
Clause 158 [Allocation of housing accommodation]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 58:
Page 102, line 12, at end insert—
("( ) The provisions of this Part do not apply to the allocation of accommodation to a member of the household of a qualifying person following a specified event.

915
( ) In this subsection—
"member of the household" means a person who was at the specified event and is either the spouse of the qualifying person or a person who had been residing with the qualifying person for the period of 12 months immediately before the specified event:
"specified event" means the death of a qualifying person;
"qualifying person" means a secure or introductory tenant.").
The noble Baroness said: My Lords, this amendment seeks to add a provision for a further exception from Part VI. Part VI deals with the allocation of housing accommodation from the waiting lists with exceptions limited to council and housing association tenants.
The Government's guidance to local authorities includes guidance to offer tenancies to members of the household of deceased tenants where there is no succession in the formal, technical sense of the term; for example, carers or same-sex partners. Those people will fall within the group where there is no succession.
Since the council can offer accommodation only to a person who is on the waiting list or to an existing secure or introductory tenant, the amendment has been tabled in order to explore whether the council can indeed offer a tenancy to such a person following Part VI coming into effect. The amendment seeks to enable local housing authorities to comply with the Government's own guidance. I beg to move.
Earl Ferrers: My Lords, on 14th May this year my department issued a circular which set out the circumstances in which an authority should normally consider granting a tenancy to a surviving member of an existing tenant's household who would otherwise have no right in law to succeed to the tenancy.
Subsections (2) and (3) of Clause 159 state that the needs of someone with succession rights need not, in certain circumstances, be considered in the context of the authority's allocations scheme. However, those subsections do not necessarily cover all cases where it is appropriate to set aside the provisions of Part VI. Noble Lords will be aware that we have taken powers under subsection (4) of Clause 159 to prescribe by regulations other circumstances in which the provisions of Part VI do not apply. We are considering how to use these powers to give authorities the discretion to grant tenancies in the circumstances which are described in the circular.
The reason for making provision in regulations is because the circumstances which we wish to cover are not as straightforward as the noble Baroness envisages in Amendment No. 58. For example, we might wish to include people who have been responsible for caring for the tenant or his dependants regardless of whether they had lived with the applicant. With that assurance, I urge the noble Baroness to withdraw the amendment.
Baroness Hamwee: My Lords, perhaps I may use the words of the noble Lord, Lord Lucas, and say that if the Minister is ensuring that ways are being sought to enable local authorities to take sensible decisions, of course I shall be happy to accept that assurance. There are occasions on which guidance has its place. No doubt very full consultations will be carried out as to what
916
extensions there should be to allow this provision to come into effect. I hope that the Minister will nod at my reference to consultation. I am not sure that he has even heard what I said.
Earl Ferrers: My Lords, I heard perfectly well. The noble Baroness wanted me to nod. I did nod, albeit it was a fairly slow nod. I do nod.
Baroness Hamwee: My Lords, I thought it was a rather old-fashioned look over the top of the Minister's spectacles.
Earl Ferrers: My Lords, I never give old-fashioned looks.
Baroness Hamwee: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 161 [The housing register]:
Earl Ferrers Earl Ferrers moved Amendment No. 59:
Page 104, line 2, after ("it") insert ("and other relevant matters").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendment No. 60. Amendments Nos. 59 and 60 are both intended to make small improvements to the provisions about the housing register.
Subsection (4) of Clause 161 contains a regulation-making power to prescribe the type of information about applicants which must be contained on the housing register. We want to be able to ensure that the register contains information, not only about the applicant but also about members of his household and the circumstances in which he lives. By broadening the scope of the regulation-making power, Amendment No. 59 would ensure that these circumstances are covered. I beg to move.
Baroness Hollis of Heigham: My Lords, the Minister said that this is about members of the household and so on. I am worried as to how benign the amendment is; perhaps the Minister will help.
Earl Ferrers: My Lords, I think the noble Baroness asked how benign the amendment is. I am not quite sure what she means by that.
8 p.m.
Baroness Hollis of Heigham: My Lords, where details about an applicant are held on file, the amendment allows the Secretary of State very wide powers to include information on that file. For example, it might include information about a prison sentence. Will the Minister say what information he would expect to come within that rubric?
Earl Ferrers: My Lords, the purpose of the housing register is to enable such information to be held as will in turn enable the local authority adequately to provide housing for the people concerned. The kind of detail that would be on the register would be whether the person

917
is married; whether he or she has children; and whether he or she may be unwell and need somebody to look after them. Those are the sorts of matters which will be held on the housing register. A prison sentence does not come into it, as far as I know.
Baroness Hollis of Heigham: My Lords, I am worried because in the past local authorities have been known to keep and collect information, including newspaper cuttings and the like, in order to allocate housing to a tenant based on his or her background. I am talking of somebody with a prison record being allocated to one sort of estate rather than another.
If the Minister can assure me that it is not intended that the register should contain such information, and that the records will be open and available for inspection by the persons concerned (as I believe will be the case) then I shall not worry. But I have seen such information misused in the past.
Earl Ferrers: My Lords, I believe I am right in saying that the information to be contained on the register will be available for that person to see and no one else and it will only be information relevant to the application. It may be that a person is notorious for bashing up all the houses that he has been in and that may be a relevant piece of information. If he has been given a prison sentence for bashing up somebody's property or the property in which he was housed, then that would be a relevant piece of information. One cannot be categorical, but the information which will be contained must be relevant to the application.
On Question, amendment agreed to.
Clause 162 [Operation of housing register]:
Earl Ferrers Earl Ferrers moved Amendment No. 60:
Page 104, line 16, leave out subsections (5) and (6) and insert—
("(5) A local housing authority may remove a person from their housing register in such circumstances as they think fit.
(6) They shall do so—

(a) if it appears to them that he has never been a qualifying person or is no longer such a person, or

(b) if he requests them to do so and he is not owed any duty under section 192 or 194(2) (main housing duties owed to persons who are homeless or threatened with homelessness).").

The noble Earl said: My Lords, Amendment No. 60 would allow an authority to choose whether to remove someone from its register if asked to do so and if the person is owed a duty by that authority under the homelessness provisions in Part VII. I beg to move.
On Question, amendment agreed to.
Clause 166 [Allocation in accordance with allocation scheme]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 61:
Page 106, line 9, at end insert—
("A person within paragraph (a) who becomes homeless, and not intentionally homeless, shall not lose preference by reason only that he no longer occupies accommodation within paragraph (a).").
The noble Baroness said: My Lords, this amendment arises because of an exchange during the Report stage between the Minister and ourselves. It seeks to ensure that families in unsatisfactory housing who become homeless and are rehoused into more satisfactory but temporary housing do not lose their existing priority on the waiting list as a result.
Comments from the Minister in another place seemed to suggest originally that a family who become homeless from unsatisfactory housing and are placed temporarily in short-term housing while waiting to get to the top of the queue, carry the points from their original housing with them—rather like a passport—and do not lose priority. To use a snakes and ladders example, they do not slide down the snake by being offered more satisfactory but temporary housing in which to wait.
The wording of the Bill suggests that the opposite may be the case. Paragraph (a) of subsection (2) of Clause 166 requires that reasonable preference is given to people "occupying" insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions. The use of the present tense "occupying" may mean that authorities are prevented from giving adequate priority to people who are unintentionally homeless—for example, if a family was living in overcrowded conditions or living in an HMO which is not safe because of inadequate fire protection and which is insanitary. They would have high priority on the waiting list. There might then be a fire. They would lose their home, be accepted as homeless and placed in acceptable but temporary housing.
Under this clause they would no longer have the points they had. They would lose their points and would go down the snake. I may have misunderstood the points situation, but in my local authority such a homeless family would gain no more points than if they were already in a shorthold tenancy. Certainly they would not have enough points to ensure that they would reach the top of the waiting list within the two-year period.
Surely that is not what the Government intend. If families lose points when they move into temporary housing, and if that means that they would therefore not reach the top of the queue within the two years, they could be caught endlessly in a downward spiral of temporary housing simply because the temporary housing was not quite as bad as the housing from which they became homeless in the first place.
What would be the implications? Temporary housing would—to use the rather ugly phrase—"silt up" and become semi-permanent housing because such families would never reach the head of the queue.
If the Minister thinks that that is hypothetical, I will give him an example from Shelter which I believe to be correct. In 1989, the Sovereign Housing Association set up a single waiting list for their housing when they took over Newbury DC's—now soon to be the Newbury Unitary Authority—housing stock. Homeless people were put into a need category based on the temporary accommodation provided by the district council rather than on their previous circumstance. Because that accommodation was of a reasonable standard, homeless people immediately went to the bottom of the list. In

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consequence, the council found its own temporary homes were tilled with people waiting to be rehoused and it therefore had to find other temporary accommodation, which meant that it had to triple the use of bed and breakfast accommodation. In other words, the temporary housing became quasi-permanent because it stripped away enough of the points that the applicants originally had and they could not therefore reach the head of the queue. The accommodation was better than that from which they had come but not as good as their temporary housing. They were therefore in never-never land, suspended between the two.
It will also mean that some applicants—and I would not blame them—will be reluctant to go into temporary housing, certainly if they were near the head of the queue, if it costs them points on the waiting list. They might prefer to spend two or three months in bed and breakfast accommodation rather than two or three years in temporary housing.
Such a process would take no account of the experience that homeless families have had, many of them moving from temporary property to temporary property. It would be extremely unfortunate that if, by offering a family temporary housing, one is therefore effectively denying them permanent housing for many years. Perhaps the Minister can reassure us on that point. I beg to move.
Earl Ferrers: My Lords, I shall try to satisfy the noble Baroness. She is worrying unnecessarily. The wording of Clause 166(2)(a) is identical with the wording in the Housing Act 1985. Of course the authorities take sensible decisions now and they will be able to continue to do so.
I understand the anxieties expressed by the noble Baroness. We should remember that those who are homeless are given accommodation for up to two years. One also has to remember that people who are homeless very often get themselves out of that situation.
I believe the noble Baroness gave the example of Newbury putting people into temporary housing accommodation. That meant they dropped down the housing list. She will understand that I cannot comment in detail on an individual case. However, the case to which she referred appears to show inefficiency. I believe the noble Baroness also said that that authority had changed that scheme. Perhaps one ought to take into account the fact that research shows that over three-quarters of households who are rehoused are granted the tenancy of a permanent home within two years.
We also know from another study that 18 per cent. of people accepted for rehousing under the homelessness legislation have "dropped out" of the system, before being permanently rehoused, over a period of 18 months; they have found other housing solutions. People often present themselves as homeless because of some underlying crisis such as marital breakdown or unemployment. As they resolve the underlying problem, they may also resolve their housing problem. We are therefore concerned with only a small minority of
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households who still require social housing but who are unlikely to be rehoused within the period of the two year minimum duty.
Amendment No. 61 would prevent authorities from taking account of improvements in applicants' housing circumstances after they have become homeless. I think that would be wrong. The provisions in Clause 166 are designed to ensure that the needs of households who have been placed in accommodation under the homelessness provisions are adequately reflected in local authorities' allocation schemes. For example, they may get preference because of their social or economic circumstances or because of the insecurity of their accommodation. The immediate needs of people who become homeless are best addressed through the homelessness provisions in Part VII. It would be wrong to give such households additional priority on the housing register because of an event which had already been addressed by other means.
Let us suppose that the authority secures the applicant an assured shorthold tenancy in the private rented sector, perhaps with the help of a rent guarantee. The family settles quickly into its new accommodation, and the landlord indicates that he is content for the tenancy to continue after the two year duty ends. Clearly, that household's circumstances will have changed for the better, and it would only be right to take account of those changes. If it did not, the authority would be failing to cater properly for other applicants. In other words, if such a person had settled into private accommodation and was content with it—and the landlord was content for him to stay after two years—it is right that that person should not therefore retain the same priority on the housing list as someone who had suddenly become homeless, for whatever reason.
To take another example, let us suppose that someone approaches an authority because her marriage has broken down. The authority secures accommodation for her and her children and puts her name on the housing register. During the period of duty she meets someone else and moves in with him. He happens to own his own home. Clearly, it would be unreasonable not to take account of the change in that applicant's circumstances.
The principles contained in Clause 166 are designed to create the conditions in which all applicants for social housing—whether they have been homeless or not—can have their needs assessed on a consistent basis. By requiring authorities to take account of factors which are no longer relevant, Amendment No. 61 would create one set of rules for people who had become homeless and a different set for those who had not. I think the noble Baroness would accept that would run counter to common sense and also to the central aims of the Bill.
8.15 p.m.
Baroness Hollis of Heigham: My Lords, I am sorry but I think the Minister is profoundly wrong on this. I do not think he has fully appreciated the effect of the scheme. I repeat that he is profoundly wrong. I believe the scheme will sabotage a major part of local authorities' efforts to continue to help homeless families.

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Let me go back a step. The Minister started by saying that the wording in the clause was the same wording as the 1985 Housing Act. I do not believe that is the case. In the 1985 Housing Act local authorities were expected to give reasonable preference to people accepted as homeless. The words "accepted as homeless" are wiped off the face of this Bill because those people are not in the categories of those eligible to be considered to have additional points, or additional preference, by virtue of their homelessness. Other factors qualify, such as insecure accommodation or insanitary accommodation, but not homelessness. That is one discrepancy.
I give the Minister an example. Let us say that someone is living in poor quality accommodation—they may use shared facilities—and they have been waiting one and a half years for permanent housing. With three months to wait for that, they become homeless. By going into temporary housing, instead of waiting for just three more months to have a permanent home in which they can settle their family and start again, they may have to wait a further two or three years because their number of points will be based not on the accommodation they were in but on the accommodation they are now in. Therefore the better the temporary housing the local authority provides, the fewer the points the applicant will have, and the longer the applicant will then have to wait for permanent housing.
The perverse effect of that is that as a result temporary housing silts up and the local authority has less ability to house other homeless families in temporary housing because that is all filled up with people whose points total is now so low that they will have to wait the full two years, three years or more, in that temporary housing. In other words, if the Government pursue their policy they will convert temporary housing into semi-permanent housing. That will mean that a local authority will have to continue to find more and more temporary housing. Instead of temporary housing being a route through from unsettled housing to permanent housing, it becomes itself a staging place which may last for several years at a time. That is not what it is meant to be. This is an important issue. I repeat that I think the Government are profoundly wrong on this issue. Can the Minister help us further?
Earl Ferrers: My Lords, with the leave of the House, I shall try to help the noble Baroness further. She says she thinks I am profoundly wrong. I have a horrible idea that she is profoundly wrong, but we may not be understanding each other well. The noble Baroness said that the provisions were not the same as those in the 1985 Act. However, the provisions on bad housing conditions are the same as in the 1985 Act. However, the particular provision concerning homelessness is no longer needed as we have other provisions concerning need.
I was worried when the noble Baroness said that temporary accommodation should be a route through to permanent housing. That is where I think we disagree. One needs to look at this matter as two separate issues: one concerns how one deals with homelessness, and the
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other concerns how one deals with permanent housing. We think it is right that homelessness should be dealt with immediately. Someone who is homeless through no fault of his own—he may have lost a wife, or had a mental breakdown or whatever—is homeless and is given accommodation.
At Report stage I gave the example of a person who was living in a house which has burnt down. It may have been a scruffy house and that person may have had many children. Therefore he had accumulated many points because the house was scruffy and because of the number of children. If the house burns down, that person will be given a house immediately on the basis of being homeless. That house might be a good one. Obviously the conditions under which such a person lives at present will be bound to affect the number of points he has when he reaches the end of the two year waiting period because he is now in a better house than he was when he lived in the scruffy house. The number of points must reflect that fact. The fact that he may be near the end of the waiting period and he will become homeless if he is not offered a house will also affect his points total on the register.
We do not want to stipulate that because a person is homeless he should be put in a house—which may be a local authority property—where he then stays, to the disadvantage of other people who may have been on the waiting list for a long time and who have climbed to the top of the list but they find they cannot occupy a property because a person who had once been homeless is now occupying it.
As I explained earlier, within two years something like 74 per cent. of the people who are homeless are rehoused. If they know that they can stay on in their house, they may not be rehoused. That prevents the house becoming available for other people. Households should not have to wait a further two to three years if their circumstances include other factors which attract reasonable preference under the allocation scheme, such as social characteristics and dependent children.
The noble Baroness said that temporary accommodation would silt up, but most people do get permanent accommodation within two years. We seek to ensure that people who come to the top of the housing list have a proper chance of being allocated a house but that those people who are homeless are given a separate allocation for the period during which they are homeless. When they go on to permanent housing, their position should be reassessed. The fact that they were once homeless should not enable them to jump to the top of the queue on the housing register.
Baroness Hollis of Heigham: My Lords, does this permit the local authority to take into account, under the points system, the time in need spent by that family?
Earl Ferrers: Yes, my Lords, I believe that that is so.
Baroness Hollis of Heigham: My Lords, I thank the Minister because that would at least allow the local authority to take the background into account. I understand the Minister's argument. What is profoundly wrong is that he is going to be continually

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expanding his argument. A local authority has, for example, a stock of 100 properties. The Minister will increasingly find that a greater proportion of that stock is used by the local authority for temporary housing precisely because it cannot move families on into permanent housing. It will actually subvert much of what the Government intend, simply because it will silt up and people will have to wait longer. However, we have probably gone as far as we can at this stage. The issue only arose at Report stage and this is the first opportunity we have had since then to pursue the matter. It is of vital importance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 176 [Whether it is reasonable to continue to occupy accommodation]:
Earl Ferrers Earl Ferrers moved Amendment No. 62:
Page 108, line 41, leave out ("as a member of his family").
The noble Earl said: My Lords, in moving Amendment No. 62 I shall speak also to Amendments Nos. 84 and 86. These amendments are due to the watchful eye of the noble Lord, Lord Dubs, at Report stage; I am very grateful to him.
The House may recall that we tabled a number of amendments at Report stage which were designed to strengthen provisions relating to domestic violence, the "two in three year" rule and out-of-area placements. In so doing, we excluded people who are not members of the applicant's family—for example, carers—from consideration when assessing whether the accommodation is available to an applicant.
That was not our intention. I am deeply grateful to the noble Lord, Lord Dubs, for bringing the matter to my attention. I beg to move.
Baroness Hollis of Heigham: My Lords, we are very happy to support this amendment.
On Question, amendment agreed to.
Clause 181 [Guidance by the Secretary of State]:
Lord Mottistone Lord Mottistone moved Amendment No. 63:
Page 111, line 21, at end insert—
("( ) No such guidance shall be issued unless a draft of it has been approved by resolution of each House of Parliament.").
The noble Lord said: My Lords, in moving Amendment No. 63 I shall speak also to Amendments Nos. 66, 67, 71 and 73, which I shall not be moving. The amendments were put down before I received a copy of a letter, for which I am most grateful, which was sent to the noble Baroness, Lady Hollis, by my noble friend the Minister. In part of that letter I believe that he considered the proposals made in my Amendments Nos. 66 onwards.
I make one point in relation to those amendments. My noble friend said that in cases where a person's mental state is obviously impaired, the local housing authority is likely to be in touch with social service departments or voluntary bodies as a matter of course. It is not definite, but it is likely. What worries me is that local housing authority managers will not have experience of mentally ill people and will not know when their mental
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state is impaired. That impairment will not necessarily be obvious, although they may be people who are mentally ill from time to time.
At Report stage, I suggested that as we now have care in the community, with a good deal of information available about these people, it might have been helpful if the Bill had said that such information would be referred to. However, I shall not pursue the matter further. My noble friend has obviously given me an answer, even though it is an inadequate one.
I seek through Amendment No. 63 an opportunity for Parliament to see the guidance notes, in whatever form they take, before or immediately after they are issued. In the case of the Mental Health Act 1983 a code of practice has to be laid before Parliament. The code was very much delayed for a number of reasons which need not bother your Lordships. When it was issued, we were able to discover that it did not accurately reflect what was in the Act and it had to be amended. It took something like three years for it to be amended. The important point was that coming before this House and another place meant that such matters could be dealt with.
Amendment No. 63 simply says: please may we see the guidance notes. It may well be that as a result of what has been said in the House at various stages, and not just by myself, the department will pick up what has been said and include those matters in the guidance notes. That would be absolutely splendid. However, if they are not included, we must have an opportunity to arrange that they are. The simplest course would be for my amendment to be accepted because that would then automatically be the case. I hope that my noble friend may he able to give me some encouragement, if only to say that we shall have an opportunity to comment on the guidance notes, even if the terms of my amendment are not acceptable. With great hope, I beg to move.
Baroness Hollis of Heigham:My Lords, we support the amendment. We believe that it is very useful. It is important that local authorities, housing associations and advice providers like Shelter as well as the specialist groups, the disability groups, the Schizophrenia Association, Age Concern and other such organisations are given an adequate and ample opportunity to comment. For example, I understand that the consultation period for the new Scottish Office homelessness code of practice was six months. That may be a little long. Nonetheless, it is so important that I hope very much that the Minister will take on board the proposal of his noble friend.
Lord Thurlow: My Lords, as one of those who was involved in the discussion on the draft code of practice under the Mental Health Act 1983, I should like to endorse very strongly the points that the noble Lord, Lord Mottistone, made. It is essential that Parliament has an opportunity to see the code of practice in draft. I am sure that it will be the intention of those presenting it that the code of guidance should cover the eventualities and circumstances we have in mind.
However, from our experience of the 1983 Act, we also know that that does not always occur. The problems of ambiguity in drafting cannot always be spotted. In

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that instance, the terms of the original code of practice positively misled members of the medical profession who were not conversant with the small print. I strongly endorse the noble Lord's request that, whether or not the provision is written into an amendment, we have an assurance that Parliament will have the opportunity to see and discuss the draft code of guidance.
8.30 p.m.
Earl Ferrers: My Lords, my noble friend Lord Mottistone confused me a little. In moving Amendment No. 63, he said that he will not move Amendments Nos. 66, 67 and so on, and then proceeded to talk to them. Perhaps I may take his cue and refer to those amendments first before coming back to Amendment No. 63 which he moved.
His anxiety relates to the mental state of individuals. That is a difficult matter. In cases where a person's mental state is obviously impaired, the local housing authority is likely to be in touch with social service departments or with voluntary bodies as a matter of course. In cases where the impairment is not so evident, or may be in doubt, it would be unreasonable to require the housing authority to make an assessment of that nature in every case by itself. Quite obviously this is a matter that should be dealt with jointly with the social services department. After all, housing managers will not know much about the mentally ill, as my noble friend said. But the guidance will cover how to proceed; and that is important.
My noble friend's amendment provides that,
"No such guidance shall be issued unless a draft of it has been approved by resolution of each House of Parliament".
My noble friend said, as did the noble Lord, Lord Thurlow, that it would be nice if Parliament could see the draft. If I may say so, it would not be appropriate that the code of guidance should be subject to parliamentary approval. Guidance is not, and indeed never has been, a substitute for legislation. Legislation says exactly what the duties are, in this case the duties imposed on authorities. Guidance can only explain what the law is, and how it is to be applied.
Legislation states what the duties are. It is for the guidance to explain how those duties can be worked in practice. We have before us new legislation on homelessness and allocations. The guidance will amplify that. We have a number of commitments to include in our revised guidance a wide range of issues which have been raised by your Lordships and another place. We shall ensure that those commitments are fulfilled.
My noble friend said that if the guidance picked up what noble Lords have said, that would be splendid. It would be inappropriate for me to guarantee that everything my noble friend has suggested, and, indeed, has been suggested by other noble Lords, will necessarily automatically find a place in the guidance. What will happen is that everything your Lordships have said will be taken into account in the formulation of the guidance.
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The noble Baroness, Lady Hollis, said that six months was too long a period as regards one set of guidance which was sent out. It is difficult to get the right ratio. At one moment everyone says, "We must have the guidance correct; it must be inspected and looked at". At other moments people say, "We want the guidance out immediately". Because we have a new Bill, clearly we have to ensure—it is a major undertaking—that the guidance to local authorities is right, is as good and succinct as possible, and contains the advice given to us. However, I am bound to say that if Parliament were to have to scrutinise, possibly amend, and pass all guidance, there would be no parliamentary time left. I do not think that that is the right role for Parliament. Parliament has altered the duties, and the legislation will state what those duties are. The guidance can only explain what the law is and how it is to be applied. I hope that that will content my noble friend.
Lord Mottistone: My Lords, with the leave of the House, will my noble friend give me one reassurance? Will the guidance be made public? That is what is needed. That would make all the difference. It does not matter whether it is laid before Parliament in the formal state so long as we can write to Ministers and say, "You have missed out this or that". That is all we wish to do.
Earl Ferrers: My Lords, I believe that I can satisfy my noble friend on that. Before the guidance is given out as official guidance, it will be available for consultation.
Lord Mottistone: My Lords, I am indeed grateful to my noble friend for that great reassurance. I have pleasure in begging leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 182 [Application for assistance]:
Earl Ferrers Earl Ferrers moved Amendment No. 64:
Page 111, line 30, leave out ("duty") and insert ("function").
The noble Earl said: My Lords, in moving Amendment No. 64, I speak also to Amendments Nos. 75 and 81.
Amendment No. 64 is a technical amendment. It makes clear that eligibility for assistance includes assistance provided not only under any duty, but also under any power.
Amendment No. 75 makes clear that the "alternative accommodation" provisions in Clause 196 do not apply where only a minor duty (for example, to provide advice and assistance or to provide accommodation for a very short period) is owed to a person.
Noble Lords will recall that I moved a number of similar amendments at Report stage which removed the "alternative accommodation" provisions from a number of minor duties. Amendment No. 75 is intended to bolster those earlier amendments by placing beyond doubt that the duty does not apply in such circumstances. I beg to move.
On Question, amendment agreed to.
Clause 185 [Asylum-seekers and their dependants]:
Lord Dubs Lord Dubs moved Amendment No. 65:
Page 112, line 42, at end insert (", or when a decision to grant a period of exceptional leave to remain in the United Kingdom is recorded by the Secretary of State as having been made").
The noble Lord said: My Lords, I beg to move the amendment standing in my name and that of the noble Earl, Lord Russell.
Perhaps I should precede my remarks by saying that it is moved for the avoidance of doubt. There is an element in Clause 185 which is not totally clear. I hope that the amendment, or the Government's response, will clarify the position.
Clause 185(2) states when, for the purposes of this section, an individual becomes an asylum-seeker.
The clause also refers to ceasing to be an asylum-seeker. The situations outlined in Clause 185(2)(b) include when an asylum-seeker's claim is recorded as having been finally determined or abandoned; that is to say, the claim has been finally determined by giving the individual full refugee status, or by refusing such status, or when the individual has abandoned the claim.
However, another possibility occurs in about four times as many instances as the granting of asylum. I refer to exceptional leave to remain. As drafted, it is not clear in Clause 185 whether the full entitlement to homelessness accommodation will attach itself to an individual who has been granted the status of exceptional leave to remain in the United Kingdom. Past practice suggests that that ought to be the case and it has always been the way in which people on ELR have been treated. However, because of the way Clause 185 is drafted, it is no longer clear that an individual on exceptional leave to remain would be entitled to homelessness provision under this part of the Bill. That is the amendment's purpose. I hope that the Minister can give some reassurance on it, otherwise we are left in an anomalous position as regards people who, in all respects, are able and allowed to stay here but who are not covered under the homelessness provisions. I beg to move.
Baroness Hamwee: My Lords, on behalf of my noble friend Lord Russell, whose name is attached to the amendment, I support the noble Lord, Lord Dubs. I moved a similar amendment at Committee stage and was told by the Minister that he suspected my amendment was inaccurate, if not technically defective. I felt duly squashed. He also said that he did not think that my amendment was practical, as the final determination of an asylum claim does not, in most cases, result in the grant of exceptional leave to remain.
As the noble Lord, Lord Dubs, explained, the proportion is significant and his amendment does not seek to change anything, merely to clarify the position. The amendment does not in any way challenge the Government's provisions on asylum seekers, it merely puts the status of someone with exceptional leave to remain into the context of housing provision.
Lord Mackay of Ardbrecknish: My Lords, I am not entirely sure whether the amendment moved by the noble Baroness at an earlier stage and the one moved by the noble Lord, Lord Dubs, this evening address the same problem. Perhaps I may leave that and explain what I think Amendment No. 65 seeks to achieve. Perhaps I may say, in the nicest possible way, that I am sorry the noble Lord did not raise the issue at an earlier stage. The provision he seeks to amend is taken directly from subsection (2) of Section 5 of the Asylum and Immigration Appeals Act 1993. That legislation has been in operation for nearly three years and the Department of the Environment has been given no evidence of the kind of problem which the amendment seeks to address, not even from the Refugee Council of which until recently the noble Lord was a respected director.
As noble Lords know, I do not often take refuge in technicalities but in this case they are important. The amendment is not in a form which I would find acceptable. The term "exceptional leave" does not appear in statute, it is a term which has no formal underpinning. It would be wrong to put into statute a term which had no definition. Were we to wish to give effect to the noble Lord's objective, we would need to take yet a further power to allow the Secretary of State to make regulations prescribing other circumstances when a person ceased to be regarded as an asylum seeker. The noble Earl, Lord Russell, is not in his place, but we know what noble Lords, led by him, usually think of regulation-making powers, especially those which are widely drawn.
We have made it clear throughout the passage of both this Bill and of the Asylum and Immigration Bill that we intend persons granted exceptional leave to have an entitlement to assistance under the homelessness legislation if they are unintentionally homeless and in priority need. They will also be entitled to housing benefit. I am not sure whether that was the point on which the noble Baroness, Lady Hamwee, wanted clarification. I believe that the point of the amendment is to address a subset of that.
If a person granted exceptional leave continues to pursue a claim for full refugee status and becomes homeless, what happens? He will have a right to assistance under the homelessness legislation, subject to the provisions of Clause 185(1); that is, he is not entitled to assistance if he has accommodation available, however temporary. Given that the homelessness duty is no longer to provide permanent accommodation, the kind of assistance he might expect to receive should result in accommodation of a similar character to any other person assisted under the legislation. In particular, that accommodation must be suitable for him and his household.
Bearing in mind that the situation has been in existence for nearly three years and that we can find no complaint arising from the narrow point, I believe that we can safely leave the legislation in its present state on the matter. If we had received any evidence, we might have been prepared to consider it at an earlier stage. I hope that I have explained to the noble Baroness the position on someone who has exceptional leave to

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remain. It is left at that. On the narrower point of someone who is granted leave but continues to seek refugee status, we believe that such a person would come under the homelessness legislation.
Lord Dubs: My Lords, I thank the Minister for clarifying the position. I appreciate that not many people are in the situation of having been granted ELR and then going on to claim asylum. In many respects, other than the right to family reunion, the position of such people is equivalent. It is only on family reunion that people might wish to improve their status to full refugee status. I understand the point.
However, the point has caused concern. I preceded my remarks by saying "for the avoidance of doubt" and up to a point the Minister has clarified the position. Given the asylum provisions in this Bill and those in the Asylum and Immigration Bill, the Minister will understand if some of us are a little suspicious about certain measures. Although the position has been clear up to now, I wished to make sure that the Government had not changed the position with regard to people on ELR without it being obvious that they had done so. I believe that the Minister will excuse my sense of suspicion if I now say that I thank him for having made the position clear. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Clause 189 [Duties to persons becoming homeless intentionally]:
[Amendments Nos. 66 and 67 not moved.]
Clause 190 [Becoming homeless intentionally]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 68:
Page 115, line 8, at end insert ("save where a relevant change of circumstances has occurred").
The noble Baroness said: My Lords, at present, when an applicant fails to obtain suitable alternative accommodation where it is reasonable that he should have done so and continues to be homeless, then, under the Bill's provisions, he has made himself intentionally homeless. If the alternative accommodation really had been suitable, available and affordable and he refused it, he is clearly intentionally homeless under the Bill. A local authority's duty is essentially limited to advice, and so on.
However, let us suppose that an applicant refused suitable alternative accommodation because he deemed it not entirely satisfactory. For example, it may have been too far from his work, he may have had no car or no adequate means of public transport. The local authority might disagree and deem him intentionally homeless. However, he may, off his own bat, manage to find a privately rented flat near his place of work. Then, perhaps, after a year, he may become homeless again if the landlord wished to raise the rent and the housing benefit did not cover it, or there might have been a fire and the property burnt down. If that person were to
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re-apply to the local authority as being homeless, the authority is obliged, I understand, still to find him intentionally homeless, irrespective of the circumstances which had caused his homelessness. In other words, once a person is deemed intentionally homeless, because he failed to occupy alternative accommodation suitable in the eyes of the local authority, that authority is permanently relieved of its duty to help, even if he presented himself again one or two years later.
Surely that cannot be what the Government intended. The amendment seeks to ensure that if there has been a change of circumstances since the applicant failed to secure the accommodation, the authority would not be able to find him intentionally homeless on the basis that he failed to occupy accommodation on a previous application. I beg to move.
Earl Ferrers: My Lords, the noble Baroness's amendment would disapply the provision in the case where a "relevant" change of circumstances has occurred. The noble Baroness explained her concern with the length of time that a person has to spend in other accommodation which he has found for himself before a further application for assistance under the homelessness legislation might be successful.
For example, a person may have applied to an authority for assistance and, having been given the addresses of suitable properties, decides that he does not like any of them; or perhaps he fails to turn up for the appointments that the authority has arranged for him. He applies again, and the authority declares him intentionally homeless. That is fair enough if he has not bothered to take the opportunities that were open to him. He then turns to his brother-in-law, who agrees to give him a room in his house. All goes well for a while, until his brother-in-law decides that he no longer has room for him, and the person becomes homeless again. The question then is whether that person should be deemed intentionally homeless.
There is a real point here. Clearly if someone fails to take up an opportunity to secure suitable accommodation and then reapplies under the homelessness legislation two weeks later, it is only reasonable for the authority to conclude that he is still intentionally homeless as a result of his first constructive failure to secure accommodation.
But equally, if he finds accommodation for himself and then, through no fault of his own, becomes homeless again two years later, his earlier failure should not be held against him.
That is the way in which the law works at the moment. The courts have held that normally there must be a period of "settled" accommodation between the time when an applicant was deemed to be intentionally homeless and before a further application which might be successful. If there is not such a period, the homelessness may be linked to the earlier instance of intentional homelessness. But being intentionally homeless—some people like to use the ghastly word "intentionality"—can be brought to an end by some other event, for example, the breakdown of a relationship. It is a matter of judging in each case

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whether the present homelessness application results from the earlier act of intentional homelessness, or from some other intervening event.
We are clear that the same interpretation of the law on intentional homelessness should apply in respect of a disqualification under subsection (4). Each case should be considered on its own facts. There is nothing in the wording of the provision in subsection (4) which casts doubt on the way in which the authorities and the courts have applied the law on this point.
I hope that clarifies the point that the noble Baroness made. As I said, it is a real point.
Baroness Hollis of Heigham: My Lords, before the Minister sits down, can he clarify a circumstance where, for example, there has been a change in the make-up of the household itself? Is that sufficient to purge intentionality?
Earl Ferrers: My Lords, the noble Baroness is asking me to define matters which it would be much wiser for me not to define. I gave an example. It would be quite wrong for me to say in one particular case this might work or in another it might not. If a person has made himself intentionally homeless and then, for some other reason, after he has found accommodation he becomes homeless again, then the local authority must be the one to decide whether that action by which he was made homeless is one which deems him not intentionally homeless but unintentionally homeless.
Baroness Hollis of Heigham: My Lords, I am grateful to the Minister. I think we share a common understanding of the problem. The Minister has made my amendment for me. The amendment states,
"save where a relevant change of circumstances has occurred".
Only the local authority can appropriately judge whether there has been a relevant change of circumstances; in other words, that the homelessness is not linked to the original situation from which his intentional homelessness emerged. I am just surprised that in that case the Government were not able to accept the wording of the amendment. It seems to embody the intent that the Minister wanted but which was not clear without such wording. I do not know whether, with the leave of the House, the Minister can indicate whether he feels that this amendment is unnecessary because it is already covered in the wording of the Bill. The Minister signals his assent. So he is saying that idea in the amendment, "save where a relevant change of circumstances has occurred", is part of the Government's intention behind somebody re-applying; and therefore in substance, though not in words, this amendment has been accepted. I therefore beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 192 [Duty to persons with priority need who are not homeless intentionally]:
Earl Ferrers Earl Ferrers moved Amendment No. 69:
Page 115, line 36, at end insert—
("( ) if the applicant was occupying accommodation made available to him under section (Duties to applicant whose case is considered for referral or referred)(3) (interim duty where case considered for referral but not referred), the date on which he was notified under subsection (2) of that section of the decision that the conditions for referral were not met;").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 70, 76 to 80, 91 and 93. This group of amendments clarifies the provisions that apply where an authority considers that a homelessness case should be referred to another authority.
The new clause rectifies a flaw in Clause 199, which had been imported from the Housing Act 1985, and which did not specify a duty to accommodate an applicant in the period between the decision that he was to be referred and the date of the referral.
The omission is put right in the new clause, which spells out the duties in sequence and clarifies which authority is responsible under certain circumstances. It ensures that accommodation continues to be provided pending the resolution of questions on "local connection". It also applies the "alternative accommodation" provisions where appropriate.
Amendments Nos. 70, 78, 79, 80, 91 and 93 are all minor drafting amendments.
Amendment No. 69 is a minor point, to specify that the two-year "minimum period" begins on the date on which the applicant is notified by the authority that the conditions for referral to another authority have not been met. I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 70:
Page 115, leave out lines 39 to 41.
On Question, amendment agreed to.
Clause 194 [Duties in case of threatened homelessness]:
[Amendment No. 71 not moved.]
Baroness Hamwee Baroness Hamwee moved Amendment No. 72:
Page 117, line 27, at beginning insert ("Thereafter").
The noble Baroness said: My Lords, this amendment adds the word "Thereafter" to subsection (2) of Clause 194. I freely accept that this is a new amendment at this stage.
Clause 194 deals with a local authority's duty in the case where somebody who is threatened with homelessness is in priority need but is not threatened with homelessness intentionally. It requires an authority to ensure that reasonable steps to secure that the applicant's accommodation does not cease—I underline the word "cease"—are available to the applicant. In that respect it is the same as Section 66 of the 1985 Act. The code of guidance refers to prevention being better than cure.
"Reasonable steps" may include matters such as negotiation with a mortgage lender to hold back from repossession; with a landlord, to extend a letting; assisting

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with rent arrears in the various ways that debt management would suggest; ensuring that all benefits are being claimed; considering direct payments to the landlord; and possibly—an approach that local authorities are increasingly exploring—providing rent guarantees to the landlord.
The current Section 66 outlines the steps that can be taken to avoid homelessness and avoid the homelessness duty. But I am concerned that the provisions replicated in Clause 194 will be undermined by the provision having effect, subject to Clause 196, which deals with the duty where other suitable accommodation is available. Your Lordships spent a good deal of time on that issue.
This cross-reference, as the provision is incorporated in Clause 194, effectively prevents a local authority taking reasonable steps to avoid a household being evicted where there is suitable alternative accommodation available in the area. I am not even convinced that a local authority needs to know that there is a decent supply of suitable alternative accommodation. Clause 196(4), which was inserted at the last stage and refers to the state of the housing market, is about the duties in Clause 196 itself—in other words, "advice and assistance". I am not sure whether one can read them into Clause 194. It may be that the conjunction of the two clauses means that if a single unit of accommodation is available then regard must be had to that.
I do not believe that the Government intend to stop what I and, I believe, the code of guidance describe as prevention being better than cure. This amendment is intended to make it clear that these matters should be considered in stages and to provide that the local authority can take reasonable steps to prevent homelessness and only look to the availability of suitable alternative accommodation after that has been done. I beg to move.
9 p.m.
Earl Ferrers: My Lords, Clause 194 sets out the duty which is owed by a local housing authority towards an applicant who is found to be unintentionally threatened with homelessness, to have a priority need for accommodation, and to be eligible for assistance under Part VII. That duty is expressed such that the authority:
"shall take reasonable steps to secure that accommodation does not cease to be available for [the applicant's] occupation".
In practical terms, this duty may be discharged in one of two ways, and in certain circumstances may involve both of them.
Firstly, the authority may take steps to try to prevent the applicant from losing his existing accommodation. If such steps are not taken (perhaps because it is clear that they would not be successful), or if they are taken but without success, then the authority will need to secure fresh accommodation for the applicant. In that case, the duty owed by the authority under Clause 194 is just the same as the main homelessness duty to secure accommodation for a minimum of two years under Clause 192.
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The purpose of this amendment is to ensure that the authority may take the first course—that is, it may take steps to prevent the applicant from losing his present accommodation—without being subject to the alternative accommodation provisions in Clause 196.
However, the amendment would go beyond this. It would also have the effect, which I believe was unintended, that where a duty to secure accommodation for two years applied, this also would not be subject to the alternative accommodation provisions. Not only would that be inconsistent with the provisions which apply in respect of the main duty to secure accommodation for two years under Clause 192, but it would also work directly against our policy intention that authorities should not be expected to accommodate a household where suitable other accommodation was available in the area.
I can assure the noble Baroness, Lady Hamwee, that we have considered this point carefully, and that we are clear that the duty under Clause 196, which is to advise and assist an applicant to secure other suitable accommodation which is available to him in the area, would not apply where it was less onerous for the authority to take steps to prevent the applicant from losing his existing accommodation in the first place.
In particular, I direct the attention of the noble Baronesses to Clause 196(5). This provides that accommodation should not be regarded as available for a particular applicant if the level of assistance required in order to secure it is unreasonable in the circumstances. In most cases where it is possible to prevent the threatened homelessness, the level of assistance which will be required to achieve that will be lower than the level of assistance that would be necessary to secure fresh accommodation from scratch. I hope, therefore, that that has put the position clearly to the noble Baroness.
Baroness Hamwee: My Lords, I am grateful to the Minister. As I understood Clause 196(5) when the matter was being debated at an earlier stage, the Government eventually put on the face of the Bill their recognition of the very real concerns that had been expressed. Clause 196(5) is about financial accessibility. It refers to,
"accommodation [being] available only with assistance beyond what the authority consider is reasonable".
The debate that we had on that certainly centred around the question of money; for example, whether there was a need for a deposit. If it is easy to secure suitable alternative accommodation, then the authority will be unable to assist the person and stop him becoming homeless. If the accommodation is secured under Clause 194(4) then it is subject to the provisions of Clause 192. I am not sure where this is taking us.
Clause 194(2) talks about,
"This subsection has effect subject to section 196.
The Minister has told me that I am undermining Section 192. I am not sure that I follow that. He said that the Government accept that the first course would be to prevent homelessness, and that is the purpose of the amendment. It is to provide that the first course shall be

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first and that it should be exhausted to a reasonable extent. I am not sure that I am going to get any more from the Government. I have made my point. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendment No. 73 not moved.]
Clause 196 [Duty where other suitable accommodation available]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 74:
Page118, line 45, at end insert—
("( ) If the authority are satisfied that suitable accommodation is available for occupation by the applicant under this section they shall notify him, under the provisions of section 183(3), of the address or addresses of the accommodation which they are satisfied is available for his occupation.").
The noble Baroness said: My Lords, I hope that this will be a simpler point. The amendment builds on—that is the right term—our debate at the last stage. A similar amendment was tabled then requiring the authority to provide the address of suitable accommodation. The new amendment requires authorities to provide the address or addresses.
The noble Earl, Lord Ferrers, presented the Government's case and I asked him at col. 95 on 8th July, regarding my amendment respecting particular addresses, how, if the authority is not aware of the address of the property, it can know that it is suitable. The Minister's answer came at col. 96. To an extent the answer was understandable. The noble Earl said:
"The property will be suitable if in practice it meets the needs of the applicant".—[Official Report, 8/7/96; col. 96.]
I am still unclear about how, without knowing the property referred to, the Government can be so sure of the matter. I am concerned that failure to provide addresses undermines the duty which, I happily acknowledge, is a strengthened duty which the Government brought forward on Report. If the applicant is directed towards suitable alternative accommodation under Clause 196, he needs to be directed to a specific property which is suitable and available. Without the address of the property, the applicant will be unable to challenge any decision that the local authority may make.
Perhaps I may put this in a context which may have a little resonance for your Lordships. Noble Lords may have experienced trying to move house and asking an estate agent for details of suitable properties, having given the agent one's requirements. My neighbours have this experience at the moment. I do not know if it is simply that estate agents do not wish to understand the constraints, but every estate agent I have ever encountered comes back, having heard the criteria, with details of properties which are not suitable in terms of price, accommodation and location. That struck me as a direct comparison.
In the owner-occupied market, one might be told by an estate agent that lots of property is available, but when one comes to investigate it, that is not the case at all. I am concerned about people who do not have the security of owning the property that they are occupying and who are therefore vulnerable, although perhaps not technically under the terms of the Bill. They are
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certainly likely to have fewer resources and correspondingly greater needs. I am concerned that if provisions similar to this amendment are not written into the Bill or set down where an applicant can point to them, that applicant will have to say to an authority, "I was told by the agent that there is a lot of property available; there is not". That would be a jolly difficult issue for the two of them to fight out. I should like to protect the position of the applicant rather more than I believe is currently the case under what, as I have said, is a strengthened duty. I beg to move.
Earl Ferrers: My Lords, it is disappointing to return to this matter again at this late hour on Third Reading because we have gone quite a long way to meet the noble Baroness and the points she raised at earlier stages.
The noble Baroness is concerned that the local authority should give the name and address of the person to whom the applicant should go to ascertain whether he or she can be housed. The noble Baroness asked, "How can you be sure that people are suitably housed if they do not know the name and address of the person to whom to go?" An authority may refer an applicant to an accommodation agency or possibly to a landlord who has a number of properties which may not necessarily be known individually to the authority. They may not all be in the same place. If the applicant goes to the agency and is rehoused, the matter has resolved itself. If he is not rehoused, he has to come back to the local authority and the local authority has to decide whether suitable alternative accommodation really is available.
The duty of the authority is to provide advice and assistance which is sufficient to enable the applicant to secure accommodation. If the applicant is not successful in securing accommodation the duty has not been discharged; or possibly the applicant himself has failed to take reasonable steps. The duty under Clause 196 has already been greatly strengthened in response to concerns of noble Lords on the other side of the House. The authority must be satisfied that other suitable accommodation is available. Where it is so satisfied, the authority is under a duty to provide such advice and assistance as is necessary to enable the applicant to secure the accommodation. I believe that the obligations that are placed on a local authority are clear, and I hope that the noble Baroness will accept that.
9.15 p.m.
Baroness Hamwee: My Lords, speaking for myself and perhaps other noble Lords, although a certain amount of debate on the Bill is a matter of horse trading, I do not regard this matter in quite the same way as negotiating a commercial contract where the two sides move a little towards each other and then decide that it is simply good manners to give up. There are certain points in legislation as important as this in respect of which one has a duty, as the noble Earl might say, to keep banging on about in order to try to get the legislation as near right as possible. Twice in my introductory comments I said I recognised that the

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Government had strengthened the duty. In this amendment I seek to ensure that the matter is properly and practically applicable.
With regard to the question of rent, in the owner-occupied sector estate agents, when asked to provide details of houses in the range of, say, £120,000 to £150,000, were perfectly capable of providing details of houses costing about £225,000 and suggesting that if one simply dug a little deeper into one's pocket one could find the difference. With regard to the rented sector, it is absolutely fundamental that the price should be right. Without being able to point to the properties in question, the authority cannot know that the rent will be covered by housing benefit. The indicative rent may be but not the housing benefit allowable rent. To take just one geographical example, I am sure that the noble Earl is aware of the scale of the problem in inner London.
Earl Ferrers: My Lords, I believe that the noble Baroness is becoming confused as to what is and what is not suitable. At Report stage I gave perhaps the extreme example of a local authority which suggested that a person should go along to the Ritz. It might be lovely accommodation, but it would not be suitable because the person could not afford it. If a person is directed to accommodation which he or she cannot afford, it is not suitable accommodation.
Baroness Hamwee: My Lords, it will be obvious that certain accommodation is not suitable. I am concerned with the more marginal cases where an applicant may need to apply for a review and to appeal against a decision. However, I can see that I am getting no further on this matter. I am very sad about it. It is not a matter of saying to the Government that they have not conceded enough as part of the negotiations; it is a matter of trying to see how in practice the duty will operate. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Ferrers Earl Ferrers moved Amendments Nos. 75 and 76:
Page 119, line 1, leave out subsection (6) and insert—
("(6) Subsection (1) does not apply to the duty of a local housing authority under—
section 187 (interim duty to accommodate in case of apparent priority need),
section 189(2)(a) (limited duty to person becoming homeless intentionally), or
section (Duties to applicant whose case is considered for referral or referred)(1), (3) or (4) (interim duties where case is considered for referral or referred).").
After Clause 198, insert the following new clause—
DUTIES TO APPLICANT WHOSE CASE IS CONSIDERED FOR REFERRAL OR REFERRED
(".—(1) Where a local housing authority notify an applicant that they intend to notify or have notified another local housing authority of their opinion that the conditions are met for the referral of his case to that other authority—

(a) they cease to be subject to any duty under section 187 (interim duty to accommodate in case of apparent priority need), and

938

(b) they are not subject to any duty under section 192 (the main housing duty),

but they shall secure that accommodation is available for occupation by the applicant until he is notified of the decision whether the conditions for referral of his case are met.
(2) When it has been decided whether the conditions for referral are met, the notifying authority shall notify the applicant of the decision and inform him of the reasons for it.
The notice shall also inform the applicant of his right to request a review of the decision and of the time within which such a request must be made.
(3) If it is decided that the conditions for referral are not met, the notifying authority shall secure that accommodation is available for occupation by the applicant until they have considered whether other suitable accommodation is available for his occupation in their district.
If they are satisfied that other suitable accommodation is available for his occupation in their district, section 196(2) applies; and if they are not so satisfied, they are subject to the duty under section 192 (the main housing duty).
(4) If it is decided that the conditions for referral are met, the notified authority shall secure that accommodation is available for occupation by the applicant until they have considered whether other suitable accommodation is available for his occupation in their district.
If they are satisfied that other suitable accommodation is available for his occupation in their district, section 196(2) applies; and if they are not so satisfied, they are subject to the duty under section 192 (the main housing duty).
(5) The duty under subsection (1), (3) or (4) ceases as provided in that subsection even if the applicant requests a review of the authority's decision (see section 201).
The authority may continue to secure that accommodation is available for the applicant's occupation pending the decision on a review.
(6) Notice required to be given to an applicant under this section shall be given in writing and, if not received by him, shall be treated as having been given to him if it is made available at the authority's office for a reasonable period for collection by him or on his behalf.").
The noble Earl said: My Lords, Amendments Nos. 75 and 76 have already been spoken to. I beg to move.
On Question, amendments agreed to.
Clause 199 [Duty to applicant whose case is referred]:
Earl Ferrers Earl Ferrers moved Amendment No. 77:
Leave out Clause 199.
On Question, amendment agreed to.
Clause 200 [Application of referral provisions to cases arising in Scotland]:
Earl Ferrers Earl Ferrers moved Amendments Nos. 78 and 79:
Page 121, line 9, leave out (" 199") and insert ("(Duties to applicant whose case is considered for referral or referred)").
Page 121, line 10, leave out ("persons whose applications are") and insert ("applicant whose case is considered for referral or").
On Question, amendments agreed to.
Clause 201 [Right to request review of decision]:
Earl Ferrers Earl Ferrers moved Amendments Nos. 80 and 81:
Page 121, line 28, leave out from ("section") to (", or") in line 29 and insert ("(Duties to applicant whose case is considered for referral or referred)(3) or (4) (decision as to duty owed to applicant whose case is considered for referral or referred)").
Page 121, line 32, leave out ("to") and insert ("or").
On Question, amendments agreed to.
Clause 203 [Right of appeal to county court on point of law]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 82:
Page 122, line 37, at end insert—
("( ) Subsection (2) shall be deemed to be a County Court Rule applicable to review under section 201").
The noble Baroness said: My Lords, I beg to move Amendment No. 82. The amendment adds an extra provision to Clause 203 which deals with the right of appeal to the county court on a point of law. I have found it slightly difficult to deal with this matter in drafting terms. My concern is that the time limit for appeal is absolute in the absence of any kind of discretion.
Unlike the Court of Appeal, the county court has no inherent power to allow appeals out of time. On other amendments noble Lords have given examples of people being in hospital or, due to suffering from mental illness, not taking the necessary steps in time, and so forth. The county court however has power to extend the time for something to be done under a court order or under its rules.
Currently, the time limit for appeals in homelessness cases is three months. That is under the judicial review procedure. An appeal to the county court has to be within three weeks. I accept that 21 days is the traditional time for appeals to the county court, but most appeals with which it deals currently are commercial matters and not legal aid, welfare-type matters.
To get to grips with the need for an appeal to be made, to find a solicitor, and so on could well jeopardise a prospective appellant in that the 21 days could slip quickly away. A number of people in that situation could probably not be expected to watch the timetable, in contrast to a landlord who might well be able to do so. In any event, a landlord applying, for instance, for registration can re-apply. I am seeking for a way in which, in exceptional cases, it would be possible to appeal outside the 21-day limit. I beg to move.
Earl Ferrers:My Lords, before I turn to the main point of the amendment perhaps I may say that on the previous amendment the noble Baroness looked sad and frustrated as she sat down because she felt that she had not got anywhere. She said she did not want to deal in a way that would be regarded as horse trading. I did not mean to give that impression. If I did, I apologise to her. I was trying to explain that the points that she had rightly made were already covered in the Bill, which is why I was not so enthusiastic about them. The enthusiasm referred only to not accepting the amendments as opposed to the point that she was making.
With the amendment the noble Baroness's main concern would seem to be where an authority fails to complete its review within the specified period. An appeal would then have to be made within 21 days of when the applicant should have been notified. In such a case, it might not be obvious to the applicant when he should make an appeal.
940
I hope that I shall be able to address those fears. Local authorities will be required under Clause 202(5) to inform the applicant of the period within which an appeal may be made. An applicant will therefore be in no doubt as to the time within which an appeal must be brought.
The noble Baroness is concerned also about the time that it could take to find a solicitor and to obtain legal aid. I hope to be able to put her mind at rest on that matter too. Solicitors who have a legal aid franchise may grant an "emergency" legal aid certificate immediately. Other solicitors may apply for an emergency legal aid certificate which would normally be processed within 24 hours.
It is in everyone's interests, especially the applicant's, for applications under the homelessness provisions to be resolved swiftly. There is nothing to be gained by encouraging delay. That is why I believe that the amendment is unnecessary.
Baroness Hamwee: My Lords, I am happy to acknowledge the Minister's remarks with regard to the previous amendment. I am also amused to note that he referred to legal aid which I do not believe I mentioned. In doing so, he implicitly acknowledged that he was aware of the thinking behind the amendment. So, despite it having been tabled late, some of the wheels turned properly and he got my notes before I did. I thank him for his comments, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Ferrers Earl Ferrers moved Amendment No. 83:
Page 122, line 40, leave out from ("duty") to end of line 43 and insert ("under section 187, 189 or (Duties to applicant whose case is considered for referral or referred) to secure that accommodation is available for the applicant's occupation, they may continue to secure that accommodation is so available-").
The noble Earl said: My Lords, in moving Amendment No. 83 I shall speak also to Amendments Nos. 87 to 89. I apologise for the late tabling of these amendments. They are, however, important provisions and I am grateful to the National Federation of Housing Associations for drawing my attention to the need for them.
Amendments Nos. 87, 88 and 89 seek to plug a gap in the provisions in Part VII. This concerns the situation where a local housing authority enlists the help of another landlord—perhaps a private landlord or a housing association—in discharging one of its lesser duties under Part VII to secure accommodation for a short interim period.
Amendment No. 83 would clarify that, pending a decision on an appeal to the court, an authority may also continue to secure accommodation for an applicant where it had been under a duty to secure accommodation pending a decision as to whether the conditions for referral of the case to another authority are met. The amendment would also provide that the authority may continue to secure accommodation, pending a decision on an appeal, where it had owed a duty under Clause 189 to secure accommodation for a limited period for someone with priority need but who

941
was intentionally homeless. The amendment will improve the clarity of the provisions as drafted, in the interests of homeless applicants. I beg to move.
On Question, amendment agreed to.
Clause 206 [Discharge of functions: provision of accommodation by the authority]:
Earl Ferrers Earl Ferrers moved Amendment No. 84:
Page 124, line 11, leave out ("as a member of his family").
On Question, amendment agreed to.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 85:
Page 124, line 23, leave out from ("direction") to end of line 24.
The noble Baroness said: My Lords, throughout the Bill one of our concerns has been the situation of those occupying local authority owned temporary housing. Under the original Bill the local authority was required to evict them after two years, whereupon they would be churned around the housing circuit before they could be rehoused. On Report we were happy to welcome a government amendment which allowed local authorities to continue to house a family in its own temporary accommodation with the permission of the Secretary of State, who could make exemptions for one year and then for a further year if appropriate; for example, for large families or for families with special needs.
However, that dispensation was only for one year at a time. The noble Lord, Lord Lucas, said that he wished to give local authorities the right to make sensible decisions. That is a charming phrase and we believe that it is right. In tabling the amendment we are trying to be equally helpful to the Minister because we wish to give him the right to make sensible decisions, not to find himself bound by primary legislation and able to make sensible decisions only for one year at a time.
The amendment would remove the unnecessary fettering of the Secretary of State's own discretion. It would remove the time limit which the Minister has placed on his own decisions allowing him, if he wished, to take account of local circumstances and thus remove the burden on the department. It does not affect the principle of the Government's position that exemption would come only with the express consent of the Secretary of State. It merely frees him from a self-imposed and, in our view, unnecessary constraint which fetters and shackles his judgment. I beg to move.
9.30 p.m.
Earl Ferrers: My Lords, as usual, the noble Baroness makes a persuasive case, saying that she wants to enable the Secretary of State to be able to make sensible decisions and that is why she has put down this wonderful amendment. Of course, she knows perfectly well that it would create a backdoor route into long-term social housing which would be unfair to other people who are still waiting on the housing list.
The amendment would remove the 12-month time limit which would apply to a direction. In other words, the noble Baroness wants the direction to be capable of
942
being indefinite. That runs counter to the intention of our provisions, which are to ensure that there is no way of by-passing the housing register.
We listened sympathetically to the concerns which were expressed by the noble Baroness and other noble Lords during the passage of the Bill. In response to those concerns I tabled a number of amendments at Report which inserted the power to enable the Secretary of State to waive the two in three year provisions in certain cases. The amendments of the noble Baroness says "Yes, let us waive that not for a year but for as many years as he likes". I am afraid we would find that hard to accept.
Baroness Hollis of Heigham: My Lords, the Minister said this was a backdoor route into long-term housing. That would only be true if this amendment gave local authorities the discretion to extend the two years out of three rule. I really think that the Secretary of State fails to trust the sane and good judgment of his colleagues in the other place or the relevant Minister.
This would allow the Secretary of State—not the local authority—to exercise his judgment rather than be fettered. It cannot be a backdoor route into long-term housing unless that is what the Secretary of State himself wishes to happen. I am quite baffled, I have to say, by the noble Earl's reply, which bears little relationship to what is on the Marshalled List. I wonder whether the Minister can help me further? I truly do not understand his reply.
Earl Ferrers: My Lords, I do not know whether we should continue with this as though we are in Committee. I replied to the noble Baroness who said that she could not understand it. I can only suggest that she reads my reply in Hansard, where she may be able to understand it.
As I have tried to explain, we do not want a backdoor route into social housing. That is why we have the two in three year rule. The noble Baroness is saying, "We need not have a two in three year rule. It can be three years, four years or five years." If that were to be the case, it would be a backdoor route into social housing. The noble Baroness then says that it is up to the Secretary of State to decide. It might be up to him to decide, but that is why Parliament is saying to him that he may only have certain privileges; that he may not have all the conditions he likes because one day a different Secretary of State may take some empirical view and say, "We will allow these people to stay in these houses for 10 years before they are rehoused".
Parliament has to decide what to do about these matters. We are suggesting that the Secretary of State should in certain cases, for certain specified situations, be allowed to increase the two in three year rule, but not for more than a year.
Baroness Hollis of Heigham: My Lords, the Minister has indeed clarified his position. He is saying that he is trying to bind his successor so that no Secretary of State can exercise his judgment in a way with which the present Secretary of State may disagree. That is a fairly new principle of parliamentary

943
sovereignty and a rather unfortunate argument. If that is valid, the Minister should never take unto himself any regulatory powers because they can clearly be used, and will be used, by the next Secretary of State to have a possibly different purport from what the current Secretary of State intends. But I give way to the Minister. I am happy to engage in a Committee stage.
Earl Ferrers: My Lords, with the permission of the House, the noble Baroness really cannot get away with remarks like that. She knows perfectly well that when Parliament passes Acts, it passes Acts permitting people to do certain things and restraining people from doing certain things, and it allows the Secretary of State to do things and it prevents the Secretary of State from doing other things. That is perfectly natural in the passing of any Bill. That is why we have said, in response to the noble Baroness, that we ought to allow Secretaries of State to have this flexibility. She says we are now doing this for some ulterior reason. The fact is that we are suggesting to Parliament what is right and what is reasonable. I think we have been very reasonable to the noble Baroness.
Baroness Hollis of Heigham: My Lords, the Minister responded to the original amendment which we proposed by offering flexibility. We agree with that entirely. We want the Secretary of State to be able to exercise his best judgment and not be fettered by the words which the Secretary of State, not Parliament, is now imposing upon himself on the face of the Bill.
But, as the Minister said, there are regulations and there are regulations. I do not doubt that this issue will be revisited by the next government. With the leave of the House, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 207 [Discharge of functions: out-of-area placements]:
Earl Ferrers Earl Ferrers moved Amendment No. 86:
Page 124, line 42, leave out ("as a member of his family").
On Question, amendment agreed to.
Clause 208 [Discharge of functions: arrangements with registered social landlord]:
Earl Ferrers Earl Ferrers moved Amendments Nos. 87 to 89:
Page 125, line 8, leave out ("registered social") and insert ("private").
Page 125, line 8, at end insert—
("For this purpose a "private landlord" means a landlord who is not within section 80(1) of the Housing Act 1985 (the landlord condition for secure tenancies).").
Page 125, line 9, leave out subsections (2) and (3) and insert—
("(2) If the housing function arises under section 187, 189, (Duties to applicant whose case is considered for referral or referred), or 203(4) (interim duties), a tenancy granted in pursuance of the arrangements to a person specified by the authority cannot be an assured tenancy before the end of the period of twelve months beginning with—

(a) the date on which the applicant was notified of the authority's decision under section 183(3) or 197(5), or

(b) if there is a review of that decision under section 201 or an appeal to the court under section 203, the date on which he is notified of the decision on review or the appeal is finally determined,

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unless, before or during that period, the tenant is notified by the landlord (or, in the cases of joint landlords, at least one of them) that the tenancy is to be regarded as an assured shorthold tenancy or an assured tenancy other than an assured shorthold tenancy.
A registered social landlord cannot serve such a notice making such a tenancy an assured tenancy other than an assured shorthold tenancy.
(3) Where in any other case a tenancy is granted in pursuance of the arrangements by a registered social landlord to a person specified by the authority—

(a) the tenancy cannot be an assured tenancy unless it is an assured shorthold tenancy, and

(b) the landlord cannot convert the tenancy to an assured tenancy unless the accommodation is allocated to the tenant under Part VI.").

On Question, amendments agreed to.
Clause 209 [Suitability of accommodation]:
[Amendment No. 90 not moved.]
Clause 210 [Protection of property of homeless persons and persons threatened with homelessness]:
Earl Ferrers Earl Ferrers moved Amendment No. 91:
Page 125, line 35, leave out from ("section") to ("referred)") and insert ("(Duties to applicant whose case is considered for referral or referred) (duties to applicant whose case is considered for referral or").
On Question, amendment agreed to.
Clause 212 [Co-operation between relevant housing authorities and bodies]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 92:
Page 127, line 10, at end insert—
("(1A) Where a social services authority request a relevant housing authority or body to assist them in the discharge of their functions under the Children Act 1989 or in the provision of community care services, the authority or body to whom the request is made shall co-operate in securing that accommodation is available for the benefit of any person (including a child) in respect of whom the request is made or in rendering such other assistance as is reasonable in the circumstances.
(1B) Where a social services authority which is also a local housing authority is subject to a duty to provide community care services or services under the Children Act 1989 for the benefit of any person (including a child), and the authority determines that such services comprise or include the provision of accommodation for that person, the authority shall secure that suitable accommodation is available for occupation by that person.
(1C) In this section "community care services" has the same meaning as in section 46(3) of the National Health Service and Community Care Act 1990 (which for the avoidance of doubt, shall include services provided under section 2 of the Chronically Sick and Disabled Persons Act 1970).").
The noble Baroness said: My Lords, we revisit an amendment which we discussed during earlier stages of the Bill. It seeks to ensure that there is appropriate co-operation between housing and social services departments so that applicants for housing who come within the framework of either the Children Act or the community care legislation are afforded suitable help.
I need not rehearse the arguments which were put forward at an earlier stage except to remind the House that at present the social services have the right to ask for co-operation and help with housing but a housing authority has the freedom to ignore or refuse that request. At Report, we asked the Minister for help to strengthen that requirement so that housing departments

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and social services departments, which are on two different tiers of local government, do not keep exporting problems to each other in a sort of pass-the-parcel of the most vulnerable people, but are required to co-operate.
It may be that the Minister will say that this is unnecessary; that there is already a duty under the Children Act for the local authority to comply with the request if it is compatible with its own statutory duties and obligations—that is, Section 27 of the Children Act—and does not unduly prejudice the discharge of any of its other functions.
What that means and what the Northavon judgment showed was that housing authorities are allowed to refuse to co-operate with social services departments, something about which we are extremely concerned. Therefore, I hope that the Minister can take us beyond the position which he enunciated on Report. I beg to move.
Earl Ferrers: My Lords, this amendment is identical to one tabled by the noble Baroness, Lady Hollis, at Report stage. It seeks to impose a duty of co-operation between housing authorities and social services authorities. I agreed to look closely at the wording of the legislation to ensure that it properly addressed the need for co-operation. I am entirely satisfied that it does, and I wrote to the noble Baroness, Lady Hollis, on 15th July to explain our position in detail.
Section 27 of the Children Act provides that a local housing authority,
"whose help is…requested shall comply with the request if it is compatible with their own statutory or other duties…".
Section 46 of the National Health Service and Community Care 1990 Act includes a specific requirement that local housing authorities shall be consulted in the drawing up of plans for community care services. Further, Section 47(3) provides that, where the local authority considers that there may be a need for the provision of services falling within the functions of a local housing authority, it shall notify that authority and invite it to assist.
The provisions in both Acts are complemented by the provisions in this Bill. The duties imposed on local authorities by the Bill give teeth to the "request" and "invitation" provisions in the other legislation.
I agree that the noble Baroness was concerned about passing the parcel between departments. Obviously that is bad and should not be encouraged. But here we are talking about co-operation and effective co-operation depends on shared objectives; it is not something which can be achieved solely through legislation. With that explanation, and in view of the fact that I have written to her on this matter, I hope the noble Baroness will now agree to withdraw the amendment.
Baroness Hollis of Heigham: My Lords, I am not satisfied. The Minister has failed to address the issue presented by the Northavon case and he did not refer to it in his reply. As I am sure he knows, in the Northavon case—Northavon District Council ex parte Smith,
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1994—the House of Lords held that Northavon District Council was entitled to refuse a request from Avon County Council for assistance in housing a family with young children on the basis that Northavon had already decided the parents were intentionally homeless. In other words, the local authority social services department asked for help because there were young children involved. Northavon refused to give help and the House of Lords upheld the right of a district council to refuse.
Nothing that the Minister has said tonight overturns that fact. The Northavon case in 1994 followed the Children Act 1989 and the Community Care Act 1990 which, it was said, would prevent such situations occurring. Yet they have occurred. The Minister failed to deal with that point. Does he want to comment on the Northavon case?
Earl Ferrers: My Lords, the noble Baroness asks if I want to comment on the Northavon case. The answer is not particularly, but I will if it helps her. The noble Baroness is concerned about the effect of the case. The noble and learned Lord, Lord Templeman, remarked on the case that the law is not the best way to achieve co-operation. We have tried to ensure that there are certain duties imposed upon housing authorities and other services and that they should co-operate with each other. I have tried to explain that.
In all the circumstances I have given, there is an obligation to co-operate, and, when help is requested, to comply with that request. Housing authorities are to be consulted in the drawing up of plans for community care services. I can go no further than that.
Baroness Hollis of Heigham: My Lords, I thank the Minister. So that family with young children remains homeless unless the social services can acquire accommodation of their own independent of the housing authority. That is a situation the Minister would seek to avoid. What the Minister has said is that the law has laid down a requirement that the district councils shall co-operate and, where they refuse to do so, there is no penalty. That is what the Minister has said. It is a walking away from parliamentary responsibility by this House tonight. It is quite unacceptable. I see that the Minister is getting restless and it is late.
Earl Ferrers: I am getting hungry.
Baroness Hollis of Heigham: That is the Minister's responsibility, not mine. We are here considering legislation under which extremely vulnerable people will not be protected in the way that the Minister 10 minutes ago assured us that they would be. He says that there is a duty to co-operate but he cannot make it stick.
Earl Ferrers: My Lords, the noble Baroness is trying my patience. She keeps putting words into my mouth. I have explained to her what the situation is; I have explained to her how those people will be affected; and I have explained to her how this Bill will take account of those cases. What the noble Baroness cannot expect

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is social services to demand something of housing authorities. There has to be co-operation, and that is what is expected.
Baroness Hollis of Heigham: My Lords, I thank the Minister. That means that when co-operation is withheld there is no way to ensure that it happens. That is what the Minister has conceded. That was the Northavon case, and that family remains homeless as a result. Families in a similar situation will remain homeless as a result because the Minister has not taken powers to make the obligation stick.
We have the Minister's words on the record and I have no doubt that we will address this problem again in future in other legislation. In the meantime, I fear, other families may continue to be at risk. I hope not, but they may because we have not remedied the situation tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 217 [Index of defined expressions: Part VII]:
9.45 p.m.
Earl Ferrers Earl Ferrers moved Amendment No. 93:
Page 129, line 15, column 2, leave out ("(and see section 199(4) and (7))").
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 94:
Before Clause 218, insert the following new clause—
NEGATIVE EQUITY
(".—(1) The power of the court under section 91 of the Law of Property Act 1925 ("the 1925 Act") to direct a sale of mortgaged property, on such terms as it thinks fit, shall, in respect of a dwelling house or part of a dwelling house occupied by a mortgagor in possession, include power to direct a sale free of the mortgage by the mortgagor, notwithstanding that the sum secured by the mortgage exceeds the sale price, and so to direct on terms that the mortgagor shall be entitled to deduct from the gross proceeds of sale his reasonable costs and expenses of effecting the sale before accounting to the mortgagee for the net proceeds.
(2) Where an application is made to a court by a mortgagee or any other interested person under section 91 of the 1925 Act for a direction that a mortgaged property to which subsection (1) applies be sold, the court may if it thinks fit suspend the making of the direction for a reasonable period to allow time for redemption or for the payment of any mortgage money or for sale by the mortgagor.
(3) Notwithstanding anything to the contrary in any other enactment, a County Court shall have jurisdiction under section 91 of the 1925 Act to determine an issue arising under this section whatever the amount owing in respect of the mortgage charge.").
The noble Baroness said: My Lords, this amendment deals with a situation that is possibly more widespread than that which the noble Baroness has been dealing with. However, it is equally serious. I am glad that she pressed her point on our previous amendment as it is a concern which I share. Amendment No. 94 returns to the issue of negative equity. I have tabled it in response to a letter which the noble Lord, Lord Lucas, wrote to my noble friend Lord Russell, and copied to other noble Lords. He explained that his department had been in contact with the Council of Mortgage Lenders and the Association of British Insurers about avoiding unnecessary court cases by ensuring that lenders and insurers did not unreasonably prevent borrowers in
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arrears and with negative equity from selling their homes on a voluntary basis. He attached a note—agreed by the council and the association—which sets out the general practice, although he stressed that each case was to be considered separately in the light of individual circumstances.
I have tabled this amendment tonight in order to ask the noble Lord how a note setting out current practice takes the matter any further. Your Lordships may feel that is a rhetorical question. Therefore, I ask the noble Lord whether it takes the matter any further. Can he tell your Lordships why the parties have not been able to go further and agree a code of practice in this area? Can he explain the status of the note? I appreciate that this is not a matter which is directly under his remit, but it is one in which his department has quite rightly taken an interest. Will the Council of Mortgage Lenders promote the measure with its members and include it in its code of practice on mortgage lending, which I believe is currently in draft—accepting, of course, that neither the statement nor the proposed code will be enforceable?
Can the noble Lord assure your Lordships that the Government will monitor the problem with a view to establishing a code of practice if the note does not have the effect—which I, for one, hope it will have—of allowing flexibility as a matter of common sense? The statement still seems to allow ample opportunity for a restrictive approach as regards allowing borrowers to sell their properties themselves. That is dependent on lenders and insurers being positive and helpful about the issue. I ask those questions in response to the letter which has been circulated to noble Lords. I beg to move.
Lord Lucas: My Lords, the noble Baroness, Lady Hamwee, has raised a number of cogent points to which I feel that I should give a proper reply by way of letter rather than by trying to give her a quick and probably inadequate summary from the Dispatch Box tonight. She asked particularly about the Council of Mortgage Lenders. We understand that it is currently considering comments on the draft code. I shall certainly arrange for the views of the noble Baroness to be drawn to the council's attention.
However, I am sure that the noble Baroness will understand that as regards the basic substance of this amendment—as we discussed on Report—we are happy with the position as outlined by the courts. We believe that is the right position and a defensible position. The process of bringing the Council of Mortgage Lenders and others involved round to the point where their practices are fully in line with that position is one that we shall continue to encourage. In the context of the Third Reading of this Bill and of this amendment, I do not think that I have anything further to add to what I said at Report stage. However, as I said, I shall look at Hansard and will look to see whether there are ways I can helpfully write to the noble Baroness to answer her concerns which, by and large, are ones that we share.
Baroness Hamwee: My Lords, I confess myself a little disappointed. The amendment responds to a letter dated 16th July, which is not that long ago. I had hoped that the noble Lord might have indicated the status of the note which was circulated with that letter.

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This is a matter of more interest than one that may simply be suitable for semi-private correspondence, if I may put it in that way. Although I am concerned about the time constraint, as the Recess is so close, I shall consider putting the matter down as a Question for Written Answer. I believe that the answer should be on the record. It would be extremely helpful if the Minister could see his way to ensuring that the matter receives a swift answer so that it is published quickly and can be read in conjunction with this Bill. I am glad to see that the Minister nods at that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 230 [Extent]:
Lord Lucas Lord Lucas moved Amendment No. 95:
Page 134, leave out lines 3 to 10 and insert—

("(a) amendments or repeals of provisions of the Housing Associations Act 1985, other than in consequence of paragraph I of Schedule 18 to this Act (repeal of Part IV of the Housing Act 1988), do not extend to Scotland,

(b) amendments or repeals of provisions of the Housing Act 1988 relating to registered housing associations do not extend to Scotland,

(c) amendments or repeals of provisions of the Asylum and Immigration Appeals Act 1993 or the Asylum and Immigration Act 1996 do not extend to Scotland or Northern Ireland, and

(d) repeals of the following provisions do not extend to Scotland—

(i) section 24(5)(a) and (c) of the Local Government Act 1988,

(ii) section 182 of the Local Government and Housing Act 1989,

(iii) paragraph 21(3) of Schedule 6 to the Charities Act 1993, and

(iv) provisions in Schedule 26 to the Local Government, Planning and Land Act 1980.").

The noble Lord said: My Lords, I beg to move Amendment No. 95 and to speak at the same time to Amendment No. 96. These are minor amendments which deal with extent. They amend Clause 230 in the following way: the repeal of tenant's choice (Part IV of the Housing Act 1988) extends to Scotland, and hence so do consequential changes to the Housing Act 1985. The rest of subsection (4)(a) to (c) is unchanged.
Subsection (4)(d) is new. The repeals whose extension to Scotland is saved are in two categories: sub-paragraphs (i) to (iii) are all statutes which amend part of the Housing Associations Act which is saved in its application to Scotland. Therefore, those amending provisions are saved; and sub-paragraph (iv) saves some requirements for Treasury consent in relation to Scotland. This is because of our decision to deal with these matters separately in Scotland and it seems tidier to keep the two exercises separate. The relevant provisions relate to urban development corporations.
On Question, amendment agreed to.
Clause 231 [Commencement]:
Lord Lucas Lord Lucas moved Amendment No. 96:
Page 134, line 28, leave out from beginning to ("paragraph") in line 29.
The noble Lord said: My Lords, I have just spoken to Amendment No. 96. I spoke to Amendments Nos. 97 and 98 with Amendment No. 1 and to Amendment No. 99 with Amendment No. 18. I trust that the House will agree that that is not an amendment which is prejudiced in any way by the vote earlier this evening. I also spoke to Amendment No. 100 with that group. Again, I hope that the House will agree that, in line with your Lordships' decision on Amendment No. 25, this is an amendment which might usefully be passed, although our lead amendment was lost. I spoke to Amendment No. 101 with Amendment No. 27. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Registered social landlords: regulation]:
Lord Lucas Lord Lucas moved Amendments Nos. 97 and 98:
Page 141, line 17, leave out ("order and").
Page 141, line 21, leave out ("(2)") and insert ("(3)").
On Question, amendments agreed to.
Schedule 5 [Text of Part II of the Landlord and Tenant Act 1987, as amended]:
Lord Lucas Lord Lucas moved Amendments Nos. 99 and 100:
Page 164, line 19, at end insert—
("(9A) The court shall not vary or discharge an order under subsection (9) on a landlord's application unless it is satisfied—

(a) that the variation or discharge of the order will not result in a recurrence of the circumstances which led to the order being made, and

(b) that it is just and convenient in all the circumstances of the case to vary or discharge the order.").

Page 165, line 13, leave out ("is sufficient to meet") and insert ("does not exceed").
On Question, amendments agreed to.
Lord Lucas Lord Lucas moved Amendment No. 101:
After Schedule 5, insert the following new schedule—
("SCHEDULE
AMENDMENTS OF PART I OF THE LANDLORD AND TENANT ACT 1987
PART I
RIGHTS OF FIRST REFUSAL
The following sections are substituted for sections 5 to 10 of the Landlord and Tenant Act 1987—
"Rights of first refusal
LANDLORD REQUIRED TO SERVE OFFER NOTICE ON TENANTS
5.—(1) Where the landlord proposes to make a relevant disposal affecting premises to which this Part applies, he shall serve a notice under this section (an "offer notice") on the qualifying tenants of the flats contained in the premises (the "constituent flats").
(2) An offer notice must comply with the requirements of whichever is applicable of the following sections—
section 5A (requirements in case of contract to be completed by conveyance, &c.),
section 5B (requirements in case of sale at auction),
section 5C (requirements in case of grant of option or right of pre-emption);
section 5D (requirements in case of conveyance not preceded by contract, &c.);
and in the case of a disposal to which section 5E applies (disposal for non-monetary consideration) shall also comply with the requirements of that section.

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(3) Where a landlord proposes to effect a transaction involving the disposal of an estate or interest in more than one building (whether or not involving the same estate or interest), he shall, for the purpose of complying with this section, sever the transaction so as to deal with each building separately.
(4) If, as a result of the offer notice being served on different tenants on different dates, the period specified in the notice as the period for accepting the offer would end on different dates, the notice shall have effect in relation to all the qualifying tenants on whom it is served as if it provided for that period to end with the latest of those dates.
(5) A landlord who has not served an offer notice on all of the qualifying tenants on whom it was required to be served shall nevertheless be treated as having complied with this section—

(a) if he has served an offer notice on not less than 90% of the qualifying tenants on whom such a notice was required to be served, or

(b) where the qualifying tenants on whom it was required to be served number less than ten, if he has served such a notice on all but one of them.

OFFER NOTICE: REQUIREMENTS IN CASE OF CONTRACT TO BE COMPLETED BY CONVEYANCE, &C
5A.—(1) The following requirements must be met in relation to an offer notice where the disposal consists of entering into a contract to create or transfer an estate or interest in land.
(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property, and the estate or interest in that property, to which the contract relates,

(b) the principal terms of the contract (including the deposit and consideration required).

(3) The notice must state that the notice constitutes an offer by the landlord to enter into a contract on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.
(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.
(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.
(6) This section does not apply to the grant of an option or right of pre-emption (see section 5C).
OFFER NOTICE: REQUIREMENTS IN CASE OF SALE BY AUCTION
5B.—(1) The following requirements must be met in relation to an offer notice where the landlord proposes to make the disposal by means of a sale at a public auction held in England and Wales.
(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular the property to which it relates and the estate or interest in that property proposed to be disposed of.
(3) The notice must state that the disposal is proposed to be made by means of a sale at a public auction.
(4) The notice must state that the notice constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for the contract (if any) entered into by the landlord at the auction to have effect as if a person or persons nominated by them, and not the purchaser, had entered into it.
(5) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months beginning with the date of service of the notice.
(6) The notice must specify a further period of not less than 28 days within which a person or persons may be nominated by the tenants under section 6.
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(7) The notice must be served not less than four months or more than six months before the date of the auction; and—

(a) the period specified in the notice as the period within which the offer may be accepted must end not less than two months before the date of the auction, and

(b) the period specified in the notice as the period within which a person may be nominated under section 6 must end not less than 28 days before the date of the auction.

(8) Unless the time and place of the auction and the name of the auctioneers are stated in the notice, the landlord shall, not less than 28 days before the date of the auction, serve on the requisite majority of qualifying tenants of the constituent flats a further notice stating those particulars.
OFFER NOTICE: REQUIREMENTS IN CASE OF GRANT OR OPTION OR RIGHT OF PRE-EMPTION
5C.—(1) The following requirements must be met in relation to an offer notice where the disposal consists of the grant of an option or right of pre-emption.
(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property, and the estate or interest in that property, to which the option or right of pre-emption relates,

(b) the consideration required by the landlord for granting the option or right of pre-emption, and

(c) the principal terms on which the option or right of pre-emption would be exercisable, including the consideration payable on its exercise.

(3) The notice must state that the notice constitutes an offer by the landlord to grant an option or right of pre-emption on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.
(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.
(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.
OFFER NOTICE: REQUIREMENTS IN CASE OF CONVEYANCE NOT PRECEDED BY CONTRACT, &C
5D.—(1) The following requirements must be met in relation to an offer notice where the disposal is not made in pursuance of a contract, option or right or pre-emption binding on the landlord.
(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property to which it relates and the estate or interest in that property proposed to be disposed of, and

(b) the consideration required by the landlord for making the disposal.

(3) The notice must state that the notice constitutes an offer by the landlord to dispose of the property on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.
(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.
(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.
OFFER NOTICE: DISPOSAL FOR NON-MONETARY CONSIDERATION
5E.—(1) This section applies where, in any case to which section 5 applies, the consideration required by the landlord for making the disposal does not consist, or does not wholly consist, of money.
(2) The offer notice, in addition to complying with whichever is applicable of sections 5A to 5D, must state—

(a) that an election may made under section 8C (explaining its effect), and

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(b) that, accordingly, the notice also constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for a person or persons nominated by them to acquire the property in pursuance of sections 11 to 17.

(3) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.
ACCEPTANCE OF LANDLORD'S OFFER: GENERAL PROVISIONS
6.—(1) Where a landlord has served an offer notice, he shall not during—

(a) the period specified in the notice as the period during which the offer may be accepted, or

(b) such longer period as may be agreed between him and the requisite majority of the qualifying tenants of the constituent flats,

dispose of the protected interest except to a person or persons nominated by the tenants under this section.
(2) Where an acceptance notice is duly served on him, he shall not during the protected period (see subsection (4) below) dispose of the protected interest except to a person duly nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats (a "nominated person").
(3) An "acceptance notice" means a notice served on the landlord by the requisite majority of qualifying tenants of the constituent flats informing him that the persons by whom it is served accept the offer contained in his notice.
An acceptance notice is "duly served" if it is served within—

(a) the period specified in the offer notice as the period within which the offer may be accepted, or

(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats.

(4) The "protected period" is the period beginning with the date of service of the acceptance notice and ending with—

(a) the end of the period specified in the offer notice as the period for nominating a person under this section, or

(b) such later date as may be agreed between the landlord and the requisite majority of qualifying tenants of constituent flats.

(5) A person is "duly nominated" for the purposes of this section if he is nominated within—

(a) the period specified in the offer notice as the period for nomination, or

(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats.

(6) A person nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if, he has (for any reason) ceased to be able to act as a nominated person.
(7) Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominated may continue to act.
FAILURE TO ACCEPT LANDLORD'S OFFER OR TO MAKE NOMINATION
7.—(1) Where a landlord has served an offer notice on the qualifying tenants of the constituent flats and—

(a) no acceptance notice is duly served on the landlord, or

(b) no person is nominated for the purposes of section 6 during the protected period,

the landlord may, during the period of 12 months beginning with the end of that period, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.
(2) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and

(b) that the other terms correspond to those specified in the offer notice.

(3) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice, and

(b) that the other terms correspond to those specified in the offer notice.

(4) The entitlement of a landlord, by virtue of this section or any other corresponding provision of this Part, to dispose of the protected interest during a specified period of 12 months extends only to a disposal of that interest, and accordingly the requirements of section 1(1) must be satisfied with respect to any other disposal by him during that period of 12 months (unless the disposal is not a relevant disposal affecting any premises to which at the time of the disposal this Part applies).
LANDLORD'S OBLIGATIONS IN CASE OF ACCEPTANCE AND NOMINATION
8.—(1) This section applies where a landlord serves an offer notice on the qualifying tenants of the constituent flat and—

(a) an acceptance notice is duly served on him, and

(b) a person is duly nominated for the purposes of section 6,

by the requisite majority of qualifying tenants of the constituent flats.
(2) Subject to the following provisions of this Part, the landlord shall not dispose of the protected interest except to the nominated person.
(3) The landlord shall, within the period of one month beginning with the date of service of notice of nomination, either—

(a) serve notice on the nominated person indicating an intention no longer to proceed with the disposal of the protected interest, or

(b) be obliged to proceed in accordance with the following provisions of this Part.

(4) A notice under subsection (3)(a) is a notice of withdrawal for the purposes of section 9B(2) to (4) (consequences of notice of withdrawal by landlord).
(5) Nothing in this section shall be taken as prejudicing the application of the provisions of this Part to any further offer notice served by the landlord on the qualifying tenants of the constituent flats.
LANDLORD'S OBLIGATION: GENERAL PROVISIONS
8A.—(1) This section applies where the landlord is obliged to proceed and the offer notice was not one to which section 5B applied (sale by auction).
(2) The landlord shall, within the period of one month beginning with the date of service of the notice of nomination, send to the nominated person a form of contract for the acquisition of the protected interest on the terms specified in the landlord's offer notice.
(3) If he fails to do so, the following provisions of this Part apply as if he had given notice under section 9B (notice of withdrawal by landlord) at the end of that period.
(4) If the landlord complies with subsection (2), the nominated person shall, within the period of two months beginning with the date on which it is sent or such longer period beginning with that date as may be agreed between the landlord and that person, either—

(a) serve notice on the landlord indicating an intention no longer to proceed with the acquisition of the protected interest, or

(b) offer an exchange of contracts, that is to say, sign the contract and send it to the landlord, together with the requisite deposit.

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In this subsection "the requisite deposit" means a deposit of an amount determined by or under the contract or an amount equal to 10 per cent. of the consideration, whichever is the less.
(5) If the nominated person—

(a) serves notice in pursuance of paragraph (a) of subsection (4), or

(b) fails to offer an exchange of contracts within the period specified in that subsection.

the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the same time as that notice or, as the case may be, at the end of that period.
(6) If the nominated person offers an exchange of contracts within the period specified in subsection (4), but the landlord fails to complete the exchange within the period of seven days beginning with the day on which he received that person's contract, the following provisions of this Part apply as if the landlord had given notice under section 9B (withdrawal by landlord) at the end of that period.
LANDLORD'S OBLIGATION: ELECTION IN CASE OF SALE AT AUCTION
8B.—(1) This section applies where the landlord is obliged to proceed and the offer notice was one to which section 5B applied (sale by auction).
(2) The nominated person may, by notice served on the landlord not less than 28 days before the date of the auction, elect that the provisions of this section shall apply.
(3) If a contract for the disposal is entered into at the auction, the landlord shall, within the period of seven days beginning with the date of the auction, send a copy of the contract to the nominated person.
(4) If, within the period of 28 days beginning with date on which such a copy is so sent, the nominated person—

(a) serves notice on the landlord accepting the terms of the contract, and

(b) fulfils any conditions falling to be fulfilled by the purchaser on entering into the contract,

the contract shall have effect as if the nominated person, and not the purchaser, had entered into the contract.
(5) Unless otherwise agreed, any time limit in the contract as it has effect by virtue of subsection (4) shall start to run again on the service of notice under that subsection; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract.
(6) If the nominated person—

(a) does not serve notice on the landlord under subsection (2) by the time mentioned in that subsection, or

(b) does not satisfy the requirements of subsection (4) within the period mentioned in that subsection,

the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the end of that period.
ELECTION IN CASE OF DISPOSAL FOR NON-MONETARY CONSIDERATION
8C.—(1) This section applies where an acceptance notice is duly served on the landlord indicating an intention to accept the offer referred to in section 5E (offer notice: disposal for non-monetary consideration).
(2) The requisite majority of qualifying tenants of the constituent flats may. by notice served on the landlord within—

(a) the period specified in the offer notice for nominating a person or persons for the purposes of section 6, or

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(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats,

elect that the following provisions shall apply.
(3) Where such an election is made and the landlord disposes of the protected interest on terms corresponding to those specified in his offer notice in accordance with section 5A, 5B, 5C or 5D, sections 11 to 17 shall have effect as if—

(a) no notice under section 5 had been served;

(b) in section 11A(3) (period for serving notice requiring information, &c.), the reference to four months were a reference to 28 days; and

(c) in section 12A(2) and 12B(3) (period for exercise of tenants' rights against purchaser) each reference to six months were a reference to two months.

(4) For the purposes of sections 11 to 17 as they have effect by virtue of subsection (3) so much of the consideration for the original disposal as did not consist of money shall he treated as such amount in money as was equivalent to its value in the hands of the landlord.
The landlord or the nominated person may apply to have that amount determined by a leasehold valuation tribunal.
DISPOSAL IN PURSUANCE OF OPTION OR RIGHT OF PRE-EMPTION
8D.—(1) Where—

(a) the original disposal was the grant of an option or right of pre-emption, and

(b) in pursuance of the option or right, the landlord makes another disposal affecting the premises ("the later disposal") before the end of the period specified in subsection (2),

sections 11 to 17 shall have effect as if the later disposal, and not the original disposal, were the relevant disposal.
(2) The period referred to in subsection (1)(b) is the period of four months beginning with the date by which—

(a) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or

(b) where that section does not apply, documents of any other description—

(i) indicating that the original disposal has taken place, and

(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,

have been served on the requisite majority of qualifying tenants of the constituent flats.
8E.—(1) Where the landlord is obliged to proceed but is precluded by a covenant, condition or other obligation from disposing of the protected interest to the nominated person unless the consent of some other person is obtained—

(a) he shall use his best endeavours to secure that the consent of that person to that disposal is given, and

(b) if it appears to him that that person is obliged not to withhold his consent unreasonably but has nevertheless so withheld it, he shall institute proceedings for a declaration to that effect.

(2) Subsection (1) ceases to apply if a notice of withdrawal is served under section 9A or 9B (withdrawal of either party from transaction) or if notice is served under section 10 (lapse of landlord's offer: premises ceasing to be premises to which this Part applies).
(3) Where the landlord has discharged any duty imposed on him by subsection (1) but any such consent as is there mentioned has been withheld, and no such declaration as is there mentioned has been made, the landlord may serve a notice on the nominated person stating that to be the case.

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When such a notice has been served, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.
(4) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and

(b) that the other terms correspond to those specified in the offer notice.

(5) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract), and

(b) that the other terms correspond to those specified in the offer notice.

(6) Where notice is given under subsection (3), the landlord may recover from the nominated party and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of the first four weeks of the nomination period and the time when that notice is served by him.
Any such liability of the nominated person and those tenants is a joint and several liability.
NOTICE OF WITHDRAWAL BY NOMINATED PERSON
9A.—(1) Where the landlord is obliged to proceed, the nominated person may serve notice on the landlord (a "notice of withdrawal") indicating his intention no longer to proceed with the acquisition of the protected interest.
(2) If at any time the nominated person becomes aware that the number of the qualifying tenants of the constituent flats desiring to proceed with the acquisition of the protected interest is less than the requisite majority of qualifying tenants of those flats, he shall forthwith serve a notice of withdrawal.
(3) Where notice of withdrawal is given by the nominated person under this section, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.
(4) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and

(b) that the other terms correspond to those specified in the offer notice.

(5) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract), and

(b) that the other terms correspond to those specified in the offer notice.

(6) If notice of withdrawal is served under this section before the end of the first four weeks of the nomination period specified in the offer notice, the nominated person and the qualifying tenants who served the acceptance notice are not liable for any costs incurred by the landlord in connection with the disposal.
(7) If notice of withdrawal is served under this section after the end of those four weeks, the landlord may recover from the nominated person and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served on him.
Any such liability of the nominated person and those tenants is a joint and several liability.
(8) This section does not apply after a binding contract for the disposal of the protected interest—
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(a) has been entered into by the landlord and the nominated person, or

(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

NOTICE OF WITHDRAWAL BY LANDLORD
9B.—(1) Where the landlord is obliged to proceed, he may serve notice on the nominated person (a "notice of withdrawal") indicating his intention no longer to proceed with the disposal of the protected interest.
(2) Where a notice of withdrawal is given by the landlord, he is not entitled to dispose of the protected interest during the period of 12 months beginning with the date of service of the notice.
(3) If a notice of withdrawal is served before the end of the first four weeks of the nomination period specified in the offer notice, the landlord is not liable for any costs incurred in connection with the disposal by the nominated person and the qualifying tenants who served the acceptance notice.
(4) If a notice of withdrawal is served after the end of those four weeks, the nominated person and the qualifying tenants who served the acceptance notice may recover from the landlord any costs reasonably incurred by them in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served.
(5) This section does not apply after a binding contract for the disposal of the protected interest—

(a) has been entered into by the landlord and the nominated person, or

(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

LAPSE OF LANDLORD'S OFFER
10.—(1) If after a landlord has served an offer notice the premises concerned cease to be premises to which this Part applies, the landlord may serve a notice on the qualifying tenants of the constituent flats stating—

(a) that the premises have ceased to be premises to which this Part applies, and

(b) that the offer notice, and anything done in pursuance of it, is to be treated as not having been served or done;

and on the service of such a notice the provisions of this Part cease to have effect in relation to that disposal.
(2) A landlord who has not served such a notice on all of the qualifying tenants of the constituent flats shall nevertheless be treated as having duly served a notice under subsection (1)—

(a) if he has served such a notice on not less than 90% of those tenants, or

(b) where those qualifying tenants number less than ten, if he has served such a notice on all but one of them.

(3) Where the landlord is entitled to serve a notice under subsection (1) but does not do so, this Part shall continue to have effect in relation to the disposal in question as if the premises in question were still premises to which this Part applies.
(4) The above provisions of this section do not apply after a binding contract for the disposal of the protected interest—

(a) has been entered into by the landlord and the nominated person, or

(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

(5) Where a binding contract for the disposal of the protected interest has been entered into between the landlord and the nominated person but it has been lawfully rescinded by the landlord, the landlord may, during the period of 12 months beginning with the date of the rescission of the contract, dispose of that interest to such person (and on such terms) as he thinks fit.".
PART II
ENFORCEMENT BY TENANTS OF RIGHTS AGAINST PURCHASER
The following sections are substituted for sections 11 to 15 of the Landlord and Tenant Act 1987—
"Enforcement by tenants of rights against purchaser
CIRCUMSTANCES IN WHICH TENANTS' RIGHTS ENFORCEABLE AGAINST PURCHASER
11.—(1) The following provisions of this Part apply where a landlord has made a relevant disposal affecting premises to which at the time of the disposal this Part applied ("the original disposal"), and either—

(a) no notice was served by the landlord under section 5 with respect to that disposal, or

(b) the disposal was made in contravention of any provision of sections 6 to 10,

and the premises are still premises to which this Part applies.
(2) In those circumstances the requisite majority of the qualifying tenants of the flats contained in the premises affected by the relevant disposal (the "constituent flats") have the rights conferred by the following provisions—
section 11A (right to information as to terms of disposal, &c.),
section 12A (right of qualifying tenants to take benefit of contract),
section 12B (right of qualifying tenants to compel sale, &c, by purchaser), and
section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord).
(3) In those sections the transferee under the original disposal (or, in the case of the surrender of a tenancy, the superior landlord) is referred to as "the purchaser".
This shall not be read as restricting the operation of those provisions to disposals for consideration.
RIGHT TO INFORMATION AS TO TERMS OF DISPOSAL, &C
11A.—(1) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him—

(a) to give particulars of the terms on which the original disposal was made (including the deposit and consideration required) and the date on which it was made, and

(b) where the disposal consisted of entering into a contract, to provide a copy of the contract.

(2) The notice must specify the name and address of the person to whom (on behalf of the tenants) the particulars are to be given, or the copy of the contract provided.
(3) Any notice under this section must be served before the end of the period of four months beginning with the date by which—

(a) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or

(b) where that section does not apply, documents of any other description—

(i) indicating that the original disposal has taken place, and

(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,

have been served on the requisite majority of qualifying tenants of the constituent flats.
(4) A person served with a notice under this section shall comply with it within the period of one month beginning with the date on which it is served on him.
RIGHT' OF QUALIFYING TENANTS TO TAKE BENEFIT OF CONTRACT
12A.—(1) Where the original disposal consisted of entering into a contract, the requisite majority of qualifying tenants of the constituent flats may by notice to the landlord elect that the contract
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shall have effect as if entered into not with the purchaser but with a person or persons nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats.
(2) Any such notice must be served before the end of the period of six months beginning—

(a) if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice;

(b) in any other case, with the date by which documents of any description—

(i) indicating that the original disposal has taken place, and

(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,

have been served on the requisite majority of qualifying tenants of the constituent flats.
(3) The notice shall not have effect as mentioned in subsection (1) unless the nominated person—

(a) fulfils any requirements as to the deposit required on entering into the contract, and

(b) fulfils any other conditions required to be fulfilled by the purchaser on entering into the contract.

(4) Unless otherwise agreed, any time limit in the contract as it has effect by virtue of a notice under this section shall start to run again on the service of that notice; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract.
(5) Where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal—

(a) a notice under this section has effect only in relation to the premises to which this Part applied at the time of the original disposal, and

(b) the terms of the contract shall have effect with any necessary modifications.

In such a case the notice under this section may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for that estate or interest, or any such terms, to be determined by a leasehold valuation tribunal.
12B.—(1) This section applies where—

(a) the original disposal consisted of entering into a contract and no notice has been served under section 12A (right of qualifying tenants to take benefit of contract), or

(b) the original disposal did not consist of entering into a contract.

(2) The requisite majority of qualifying tenants of the constituent flats may serve a notice (a "purchase notice") on the purchaser requiring him to dispose of the estate or interest that was the subject-matter of the original disposal, on the terms on which it was made (including those relating to the consideration payable), to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats.
(3) Any such notice must be served before the end of the period of six months beginning

(a) if a notice was served on the purchaser under section 11 A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice;

(b) in any other case, with the date by which—

(i) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or

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(ii) where that section does not apply, documents of any other description indicating that the original disposal has taken place, and alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,

have been served on the requisite majority of qualifying tenants of the constituent flats.
(4) A purchase notice shall where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal—

(a) require the purchaser only to make a disposal relating to those premises, and

(b) require him to do so on the terms referred to in subsection (2) with any necessary modifications.

In such a case the purchase notice may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by a leasehold valuation tribunal.
(5) Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal become subject to any charge or other incumbrance, then, unless the court by order directs otherwise—

(a) in the case of a charge to secure the payment of money or the performance of any other obligation by the purchaser or any other person, the instrument by virtue of which the property is disposed of by the purchaser to the person or persons nominated for the purposes of this section shall (subject to the provisions of Part I of Schedule 1) operate to discharge the property from that charge; and

(b) in the case of any other incumbrance, the property shall be so disposed of subject to the incumbrance but with a reduction in the consideration payable to the purchaser corresponding to the amount by which the existence of the incumbrance reduces the value of the property.

(6) Subsection (5)(a) and Part I of Schedule 1 apply, with any necessary modifications, to mortgages and liens as they apply to charges; but nothing in those provisions applies to a rentcharge.
(7) Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal increased in monetary value owing to any change in circumstances (other than a change in the value of money), the amount of the consideration payable to the purchaser for the disposal by him of the property in pursuance of the purchase notice shall be the amount that might reasonably have been obtained on a corresponding disposal made on the open market at the time of the original disposal if the change in circumstances had already taken place.
RIGHT OF QUALIFYING TENANTS TO COMPEL GRANT OF NEW TENANCY BY SUPERIOR LANDLORD
12C.—(1) This section applies where the original disposal consisted of the surrender by the landlord of a tenancy held by him ("the relevant tenancy").
(2) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him to grant a new tenancy of the premises which were subject to the relevant tenancy, on the same terms as those of the relevant tenancy and so as to expire on the same date as that tenancy would have expired, to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats.
(3) Any such notice must be served before the end of the period of six months beginning—

(a) if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &c.), with the date on which the purchaser complied with that notice;

(b) in any other case, with the date by which documents of any description—

(i) indicating that the original disposal has taken place, and

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(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,

have been served on the requisite majority of qualifying tenants of the constituent flats.
(4) If the purchaser paid any amount to the landlord as consideration for the surrender by him of that tenancy, the nominated person shall pay that amount to the purchaser.
(5) Where the premises subject to the relevant tenancy included premises other than premises to which this Part applied at the time of the disposal, a notice under this section shall—

(a) require the purchaser only to grant a new tenancy relating to the premises to which this Part then applied, and

(b) require him to do so on the terms referred to in subsection (2) subject to any necessary modifications.

(6) The purchase notice may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by a leasehold valuation tribunal.
NOMINATED PERSONS: SUPPLEMENTARY PROVISIONS
12D.—(1) The person or persons initially nominated for the purposes of section 12A, 12B or 12C shall be nominated in the notice under that section.
(2) A person nominated for those purposes by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if, he has (for any reason) ceased to be able to act as a nominated person.
(3) Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominated may continue to act.
(4) Where, in the exercise of its power to award costs, the court or the Lands Tribunal makes, in connection with any proceedings arising under or by virtue of this Part, an award of costs against the person or persons so nominated, the liability for those costs is a joint and several liability of that person or those persons together with the qualifying tenants by whom the relevant notice was served.
DETERMINATION OF QUESTIONS BY LEASEHOLD VALUATION TRIBUNAL
13.—(1) A leasehold valuation tribunal has jurisdiction to hear and determine—

(a) any question arising in relation to any matters specified in a notice under section 12A, 12B or 12C, and

(b) any question arising for determination as mentioned in section 8C(4), 12A(5) or 12B(4) (matters left for determination by tribunal).

(2) On an application under this section the interests a the persons by whom the notice was served under section 12A, 12B or 12C shall be represented by the nominated person; and accordingly the parties to any such application shall not include those persons.
WITHDRAWAL OF NOMINATED PERSON FROM TRANSACTION UNDER S. 12B OR 12C
14.—(1) Where notice has been duly served on the landlord under—
section 12B (right of qualifying tenants to compel sale, &c, by purchaser), or
section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord,
the nominated person may at any time before a binding contract is entered into in pursuance of the notice, serve notice under this section on the purchaser (a "notice of withdrawal") indicating an intention no longer to proceed with the disposal.
(2) If at any such time the nominated person becomes aware that the number of qualifying tenants of the constituent flats desiring to proceed with the disposal is less than the requisite majority of those tenants, he shall forthwith serve a notice of withdrawal.

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(3) If a notice of withdrawal is served under this section the purchaser may recover from the nominated person any costs reasonably incurred by him in connection with the disposal down to the time when the notice is served on him.
(4) If a notice of withdrawal is served at a time when proceedings arising under or by virtue of this Part are pending before the court or the Lands Tribunal, the liability of the nominated person for any costs incurred by the purchaser as mentioned in subsection (3) shall be such as may be determined by the court or (as the case may be) by the Tribunal.
(5) The costs that may be recovered by the purchaser under this section do not include any costs incurred by him in connection with an application to a leasehold valuation tribunal.".
PART III
ENFORCEMENT OF RIGHTS AGAINST SUBSEQUENT PURCHASERS AND TERMINATION OF RIGHTS
The following sections replace sections 16 and 17 of the Landlord and Tenant Act 1987—
"Enforcement by tenants of rights against subsequent purchasers
RIGHTS OF QUALIFYING TENANTS AGAINST SUBSEQUENT PURCHASER
16.—(1) This section applies where, at the time when a notice is served on the purchaser under section 11A, 12A, 12B or 12C, he no longer holds the estate or interest that was the subject-matter of the original disposal.
(2) In the case of a notice under section 11A (right to information as to terms of disposal, &c.) the purchaser shall, within the period for complying with that notice—

(a) serve notice on the person specified in the notice as the person to whom particulars are to be provided of the name and address of the person to whom he has disposed of that estate or interest ("the subsequent purchaser"), and

(b) serve on the subsequent purchaser a copy of the notice under section 11A and of the particulars given by him in response to it.

(3) In the case of a notice under section 12A, 12B or 12C the purchaser shall forthwith—

(a) forward the notice to the subsequent purchaser, and

(b) serve on the nominated person notice of the name and address of the subsequent purchaser.

(4) Once the purchaser serves a notice in accordance with subsection (2)(a) or (3)(b), sections 12A to 14 shall, instead of applying to the purchaser, apply to the subsequent purchaser as if he were the transferee under the original disposal.
(5) Subsections (1) to (4) have effect, with any necessary modifications, in a case where, instead of disposing of the whole of the estate or interest referred to in subsection (1) to another person, the purchaser has disposed of it in part or in parts to one or more other persons.
In such a case, sections 12A to 14—

(a) apply to the purchaser in relation to any part of that estate or interest retained by him, and

(b) in relation to any part of that estate or interest disposed of to any other person, apply to that other person instead as if he were (as respects that part) the transferee under the original disposal.

Termination of rights against purchasers or subsequent purchasers
TERMINATION OF RIGHTS AGAINST PURCHASER OR SUBSEQUENT PURCHASER
17.—(1) If, at any time after a notice has been served under section 11 A, 12A, 12B or 12C, the premises affected by the original disposal cease to be premises to which this Part applies, the purchaser may serve a notice on the qualifying tenants of the constituent flats stating—

(a) that the premises have ceased to be premises to which this Part applies, and

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(b) that any such notice served on him, and anything done in pursuance of it, is to be treated as not having been served or done.

(2) A landlord who has not served such a notice on all of the qualifying tenants of the constitent flats shall nevertheless be treated as having duly served a notice under subsection (1)—

(a) if he has served such a notice on not less than 90% of those tenants, or

(b) where those qualifying tenants number less than ten, if he has served such a notice on all but one of them.

(3) Where a period of three months beginning with the date of service of a notice under section 12A, 12B or 12C on the purchaser has expired—

(a) without any binding contract having been entered into between the purchaser and the nominated person, and

(b) without there having been made any application in connection with the notice to the court or to a leasehold valuation tribunal,

the purchaser may serve on the nominated person a notice stating that the notice, and anything done in pursuance of it, is to be treated as not having been served or done.
(4) Where any such application as is mentioned in subsection (3)(b) was made within the period of three months referred to in that subsection, but—

(a) a period of two months beginning with the date of the determination of that application has expired,

(b) no binding contract has been entered into between the purchaser and the nominated person, and

(c) no other such application as is mentioned in subsection (3)(b) is pending,

the purchaser may serve on the nominated person a notice stating that any notice served on him under section 12A, 12B or 12C, and anything done in pursuance of any such notice, is to be treated as not having been served or done.
(5) Where the purchaser serves a notice in accordance with subsection (1), (3) or (4), this Part shall cease to have effect in relation to him in connection with the original disposal.
(6) Where a purchaser is entitled to serve a notice under subsection (1) but does not do so, this Part shall continue to have effect in relation to him in connection with the original disposal as if the premises in question were still premises to which this Part applies.
(7) References in this section to the purchaser include a subsequent purchaser to whom sections 12A to 14 apply by virtue of section 16(4) or (5).".
PART IV
CONSEQUENTIAL AMENDMENTS
1. In section 4(2) of the Landlord and Tenant Act 1987 ((relevant disposals: excluded disposals), in paragraph (aa) (disposals by way of security for a loan) omit the words "consisting of the creation of an estate or interest".
2. Before section 19 of the Landlord and Tenant Act 1987, under the heading "Supplementary provisions", insert—
"The requisite majority of qualifying tenants.
18A.—(1) In this Part "the requisite majority of qualifying tenants of the constituent flats" means qualifying tenants of constituent flats with more than 50 per cent. of the available votes.
(2) The total number of available votes shall be determined as follows—

(a) where an offer notice has been served under section 5, that number is equal to the total number of constituent flats let to qualifying tenants on the date when the period specified in that notice as the period for accepting the offer expires;

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(b) where a notice is served under section 11A without a notice having been previously served under section 5, that number is equal to the total number of constituent flats let to qualifying tenants on the date of service of the notice under section 11A;

(c) where a notice is served under section 12A, 12B or 12C without a notice having been previously served under section 5 or section 11A, that number is equal to the total number of constituent flats let to qualifying tenants on the date of service of the notice under section 12A, 12B or 12C, as the case may be.

(3) There is one available vote in respect of each of the flats so let on the date referred to in the relevant paragraph of subsection (2), which shall be attributed to the qualifying tenant to whom it is let.
(4) The persons constituting the requisite majority of qualifying tenants for one purpose may be different from the persons constituting such a majority for another purpose.".
3.—(1) Section 20(1) of the Landlord and Tenant Act 1987 (interpretation of Part I) is amended as follows.
(2) For the definition of "acceptance notice" substitute—
""acceptance notice" has the meaning given by section 6(3);".
(3) For the definition of "constituent flat" substitute—
""constituent flat" shall be construed in accordance with section 5(1) or 11(2), as the case may require;".
(4) Omit the definition of "the new landlord".
(5) After that definition insert—
""the nominated person" means the person or persons for the time being nominated by the requisite majority of the qualifying tenants of the constituent flats for the purposes of section 6, 12A, 12B or 12C, as the case may require;".
(6) For the definition of "the protected interest" substitute—
""the protected interest" means the estate, interest or other subject-matter of an offer notice;".
(7) After that definition insert—
""the protected period" has the meaning given by section 6(4);".
(8) For the definition of "purchase notice" substitute—
""purchase notice" has the meaning given by section 12B(2);".
(9) After that definition insert—
""purchaser" has the meaning given by section 11(3);".
(10) In the definition of "the requisite majority" for "section 5(6) and (7)" substitute "section 18A".
4. In section 20(2) of the Landlord and Tenant Act 1987, omit the words "or counter-offer" in each place where they occur.
5. In Part III of the Landlord and Tenant Act 1987 (compulsory acquisition by tenants of their landlord's interest), in section 31 (determination of terms by rent assessment committees)—

(a) for "rent assessment committee", wherever occurring, substitute "leasehold valuation tribunal";

(b) for "such a committee" or "the committee", wherever occurring, substitute "the tribunal"; and

(c) omit subsection (5).

6. In section 52(1) of the Landlord and Tenant Act 1987 (jurisdiction of county courts) for "rent assessment committee" substitute "leasehold valuation tribunal".
7. After section 52 of the Landlord and Tenant Act 1987 insert—
"Jurisdiction of leasehold valuation tribunal under Part I or III
52A.—(1) Any jurisdiction conferred by Part I or III of this Act on a leasehold valuation tribunal is exercisable by a rent assessment committee constituted in accordance with Schedule 10 to the Rent
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Act 1977 which when so constituted for the purposes of exercising any such jurisdiction shall be known as a leasehold valuation tribunal.
(2) The power to make regulations under section 74(1)(b) of the Rent Act 1977 (procedure of rent assessment committees) extends to prescribing the procedure to be followed in connection with any proceedings before a leasehold valuation tribunal under this Act.
(3) Any application under this Act to a leasehold valuation tribunal must be in such form, and contain such particulars, as the Secretary of State may by regulations prescribe.
(4) Any costs incurred by a party to any such application in connection with the application shall be borne by that party.
(5) Paragraphs 1, 2, 3 and 7 of Schedule 22 to the Housing Act 1980 (supplementary provisions relating to leasehold valuation tribunals: constitution, appeals and provision of information) apply to a leasehold valuation tribunal constituted for the purposes of this section.".
8. In section 53(2)(b) of the Landlord and Tenant Act 1987 (regulations subject, to negative resolution), for the words from "section 13(2)" to "section 31)" substitute "section 52A(3)".
9. In section 54(4) of the Landlord and Tenant Act 1987 (saving for power under section 20(4)) for "either of the periods specified in section 5(2)" substitute "any of the periods specified in section 5A(4) or (5), 5B(5) or (6), 5C(4) or (5), 5D(4) or (5) or 5E(3)".
10. In section 60(1) of the Landlord and Tenant Act 1987 (general interpretation), omit the definition of "rent assessment committee".
11.—(1) In Schedule 1 of the Landlord and Tenant Act 1987 (discharge of mortgages, &c), in paragraph 1 (construction of provisions relating to discharge in pursuance of purchase notice)—

(a) for the words "the new landlord" wherever they appear substitute "the purchaser";

(b) in the definition of "consideration payable"—

(i) for the words "section 12(4)" substitute "section l2B(7)", and

(ii) for the words "section 16(2) or (3)" substitute "section 16(4) or (5)";

(c) in the definition of "nominated person", for the words "section 12(1)" substitute "section 12B(2)".

(2) In paragraphs 2, 4 and 5 of that Schedule (duty of nominated person to redeem mortgages, payments into court and savings)—

(a) for the words "section 12(4)(a)" wherever they appear substitute "section 12B(5)(a)";

(b) for the words "the new landlord" or "the new landlord's" wherever they appear substitute "the purchaser" or "the purchaser's".").

Lord Strabolgi Lord Strabolgi had given notice of his intention to move, as amendments to Amendment No. 101, Amendments Nos. 102 to 108:
Line 59, leave out ("within") and insert ("before the end of').
Line 81, leave out ("within") and insert ("before the end of').
Line 116, leave out ("within") and insert ("before the end of').
Line 134, leave out ("within") and insert ("before the end of').
Line 182, leave out ("within") and insert ("before the end of').
Leave out lines 400 to 404.
Leave out lines 739 to 742.
The noble Lord said: My Lords, I should like to thank the noble Lord, Lord Lucas, for accepting the principle of Amendments Nos. 102 to 106 and for his undertaking to reintroduce them in a slightly different form in another place. I am very grateful to him.
[Amendments Nos. 102 to 108, as amendments to Amendment No. 101, not moved.]
On Question, Amendment No. 101 agreed to.
Schedule 6 [Schedule 1A to the Landlord and Tenant Act 1987]:
Lord Lucas Lord Lucas moved Amendment No. 109:
Leave out Schedule 6.
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 27. I beg to move.
On Question, amendment agreed to.
Schedule 9 [Low rent test: extension of rights]:
Lord Lucas Lord Lucas moved Amendment No. 110:
Page 171, line 16, leave out ("fifty") and insert ("thirty-five").
The noble Lord said: My Lords, in moving Amendment No. 110 I shall speak also to Amendments Nos. 111 and 112.
It gives me particular pleasure that the amendments in the name of the noble Lord, Lord Strabolgi, might be put into effect using a Henry VIII provision, his ancestors having been there to watch Henry VIII in action and having then taken something of a holiday before resuming service in 1916, as I understand it. Since the noble Lord can look that far back in his ancestry, I am sure that he will appreciate the irony or the pleasure of it.
Turning to the amendments, the noble Lord, Lord Dubs, quite rightly decided to leave the tidying up to the Government after his victory at Report stage. These three amendments carry on the work that he started by amending the figure 50 to the figure 35 in three places. The noble Lord, Lord Dubs, felt that he had better things to do than getting round to tabling such amendments. I beg to move.
Lord Strabolgi: My Lords, as I was also involved with this matter, perhaps I may say how grateful we are to the Government for meeting us half way and for accepting these compromises.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendments Nos. 111 and 112:
Page 171, line 29, leave out ("fifty") and insert ("thirty-five").
Page 171, line 33, leave out ("fifty") and insert ("thirty-five").
On Question, amendments agreed to.
Viscount Caldecote Viscount Caldecote moved Amendment No. 113:
Page 171, line 47, at end insert (", and
(d) the freeholder satisfies the Leasehold Valuation Tribunal that the house is integral to the management of the estate concerned and has been leased on terms related to that purpose.
An application to the Leasehold Valuation Tribunal in accordance with paragraph (d) above shall be made by the freeholder within two months of his receipt of the relevant notice of this leaseholder's claim to enfranchise under the terms of this Act.").
The noble Viscount said: My Lords, the purpose of Amendment No. 113 is to give the right of enfranchisement to tenants in rural areas similar to those given to all other tenants subject—it is very important—to exclusion from those rights for tenants of houses which are integral to the management of the estate.
According to the Oxford English Dictionary "integral" means, "necessary to the completeness" of the management of the estate, which well illustrates the objective of the amendment.
That would exclude from the right of enfranchisement inter alia all houses occupied by employees and retired employees, managers and advisers to the estate, and the principal house on the estate normally occupied by the owner of the estate which might in special circumstances be let on a long lease. All such houses are clearly concerned with the responsible stewardship of the estate and, therefore, should not have the right to enfranchisement.
At Report stage in the debate on an amendment which I moved with similar objectives, though this amendment is more limited, my noble friend Lord Lucas said,
"I believe that we should be looking at the relationship between the house and the estate of which it is part, not the relationship between the leaseholder and freeholder".—[Official Report, 10/7/96; col. 379.]
That is exactly what the amendment provides.
My noble friend also said at col. 376:
"We do not believe that it would be wise to permit the break-up of rural estates".
I entirely agree. The amendment provides full safeguards against that happening.
My noble friend Lord Hamilton of Dalzell said, at col. 378, that I would,
"not be satisfied until every single house in the country which was previously leasehold is taken over by the leaseholders."
As I pointed out at the time, that is a travesty of the truth, for I want to see country estates preserved as much as my noble friend does. It requires that certain houses should not have the right to enfranchisement, as I have already explained.
I also wish to ensure that long leaseholders in the country are fairly treated as a whole and not excluded from the rights to enfranchisement when exclusion serves no useful purpose. I emphasise the words "as a whole", for it is misleading for the CLA to suggest, in its briefing opposing such an amendment, that,
"it attacks the fundamental, and accepted, principle of stewardship of properties in rural areas for the apparent benefit of some residents in a single parish".
The amendment has a far wider application than that. But there is a need for the previous freeholder to continue responsible stewardship when some houses in a village have been enfranchised, so as to ensure that the amenities and appearances are preserved for the benefit of the local community as a whole. In large urban estates, as in London, it is common practice to achieve that by setting up management schemes approved by the leasehold valuation tribunal, so no difficulty arises in that respect.
Finally, the amendment may be criticised because it encourages further litigation. But already ownership of property is subject to many Acts of Parliament. The existing law relating to enfranchisement involves litigation, as witness the arguments which have arisen in urban estates. The Bill itself includes clauses creating new offences, some of them criminal offences, all with the objective of creating a more equitable situation

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between freeholders and leaseholders. This simple amendment is no different in that respect and has the same objective, with minimal prospects of additional litigation in the courts because it uses the relatively simple and economical procedure of the leasehold valuation tribunal.
I submit that this is a well balanced amendment which makes a valuable contribution towards removing unfairness to many tenants in rural areas and gives very adequate protection to owners of estates so as to prevent their break-up. I beg to move.
10 p.m.
Lord Hamilton of Dalzell: My Lords, as I have been accused of making an allegation about the motives of my noble friend Lord Caldecote, I wish to apologise to him if it was untrue. However, at the time of the previous debate I also asked: who was he to judge whether the property was part of the integral management of an estate?
His amendment totally ignored the family interest in an estate. I have lived in three houses on my estate. With the first, I required a cottage while living in London which was subject to enfranchisement under the 1967 Act. Conveniently, the tenant died and we were able to buy the residue of the lease. My family lived in the cottage for a while but it became too small. A larger house on the estate was vacated by an American who was returning to America, it was also on a long lease so we were able to buy the lease.
However, it is impossible to look ahead and assume on behalf of generations unborn what the demands of an estate will be. To have to prove to a leasehold valuation tribunal what future family plans are or to look ahead to the generations unborn is unreasonable. The amendment would cause the dismemberment of estates, just as the CLA believes it would.
Lord Coleraine: My Lords, I support my noble friend's amendment and adopt all his arguments. My noble friend Lord Hamilton referred to his remarks last week which he repeated today. He asked how my noble friend Lord Caldecote could judge what is or is not subject to the leasehold exclusion. The answer is that my noble friend is trying to put on the face of the Bill a definition which will adequately differentiate between freehold properties which should be enfranchised and those which should not.
At the moment, the Bill provides for the cut-off point to be found in the provision as to whether the freehold of the house is owned, together with adjoining land which is not occupied for residential purposes. It would be difficult to imagine a more generalised and ad hoc definition. It does not in any meaningful way define a property on an agricultural estate, a property such as my noble friend and I would not wish to be able to enfranchise. It could well be that a dowerhouse not surrounded by residential land was on one side of the road and was not able to be enfranchised. On the other hand there is the case of the village of Adlestrop, where a number of houses which, for all intents and purposes,
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have been treated by the freeholder as not required for his estate and the tenants are apparently unable to enfranchise just because they are surrounded by non-residential land in the ownership of the estate.
The answer given in the past by my noble friend Lord Lucas has been that the owners of the houses in Adlestrop will be in no worse a position after the Bill is passed than they were before. That can be said of all applications for enfranchisement. It is the argument that we have had to meet all along the line. It is irrelevant to our discussions.
Given the basis on which the Government appear to be legislating, it is my opinion that the legislation is faulty and will ultimately provide a very clear example of the unintended effect. The information that the Government had was supplied by the Country Landowners' Association; that is, that 200 to 300 houses may be excluded under the rural exclusion provision. However, that does not in any way differentiate between houses that should be excluded on the grounds that are common to most of us and those that should not be excluded. There will almost certainly be other cases outside the cognisance of the Country Landowners' Association where the rural exclusion will operate unfairly and return to plague us. The Country Landowners' Association is very well aware of the position affecting landed estates, as it should be. But there will be other cases of which neither it nor the Government will be aware, where houses have, for example, been built on leasehold land and it has been necessary to grant long leases. The Bill does not in any way help such lessees, if such lessees there be.
As my noble friend Lord Caldecote impressed upon the House, what we really need is a proper definition as to what is a house on an agricultural estate. At the moment that definition is not on the face of the Bill. I hope that at this stage my noble friend will accept this amendment and, if the drafting needs improvement as I feel it probably does, return with a fuller and more completely drafted clause when the Bill comes back from another place.
Lord Strabolgi: My Lords, I support the amendment moved by the noble Viscount, Lord Caldecote. As the noble Lord, Lord Coleraine, said, based on his great experience, this matter should be seriously considered by the Government. The present blanket exclusion of houses in rural areas from the proposed low rent test provisions of the Bill would render unenfranchisable houses that bear no direct relationship to the management entity of an estate where houses are leased on 120-year leases and have ground rents of around £30 a year.
The noble Lord, Lord Coleraine, mentioned the village of Adlestrop in Gloucestershire. I know that a number of householders there are very concerned about the position they are in. Therefore I hope that the Minister replying will take notice of what was said by his colleagues tonight.
Lord Carnock: My Lords, I support the amendment. There will be a number of cases where a tenanted house in a designated rural area will not in any foreseeable

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contingency ever be required for any purpose connected with the proper management of the adjoining land. In such a case a leaseholder might reasonably feel deeply aggrieved by his inability to enfranchise his tenancy as others have the right to do, more especially as such deprivation confers no compensating advantage whatever, in connection with the management of the adjoining land, on the welfare of the workforce working thereon or to the local community.
This amendment will remove an injustice, which is inherent in the provisions of the Bill as presently drawn and amended by my noble friend on the Front Bench. It will cause no possible detriment to the freeholder, the workforce or the local community once the principle of leasehold enfranchisement has been accepted, as, of course, it has. I warmly recommend this amendment to your Lordships.
Baroness Hamwee: My Lords, I added my name to this amendment and I warmly support it. The point has been made that it is difficult for an individual or any of your Lordships to judge whether land is integral to the management of an estate. Tribunals of every sort are frequently asked to judge such matters. I for one am prepared to put this sort of matter into the hands of a tribunal.
Earl Ferrers: My Lords, the point of the rural exclusion is to retain the low rent test for properties which are an integral part of a rural estate. I believe, however, that the Government's criteria for determining the exclusion will be the best way to achieve this. They set out a clear and simple test which will accurately identify the properties which we intend should not be enfranchisable. I accept that any rule of this kind is bound to generate exceptions and hard cases. That is inevitable. There is clearly a balance to be struck here.
The difficulty with my noble friend's proposal is that it offers no guidance whatever on the criteria which a tribunal should use to decide whether a
"house is integral to the management of the estate concerned."
That is the wording of my noble friend's amendment.
My noble friend Lord Hamilton of Dalzell made an important point when he said that it may be part of the management function to ensure that houses or cottages on the estate are available for employees—for example, for farmer workers to occupy. That may be the case, but it may also be part of the management function to preserve the integrity of the estate for a future generation to inherit.
In order for the land valuation tribunal to come to a conclusion on whether a property is integral to the management of the estate, it would first have to determine what is meant by
"the management of the estate concerned".
For example, does that mean day-to-day management or management over the long term for the benefit of future generations of the freeholder's family; or is it management in order to make the agricultural operations on the estate as efficient as possible? It will be up to the leasehold valuation tribunal, and not a court, to decide this very fundamental question.
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As the amendment does not itself clarify the point, it will be necessary to issue guidance on it to the tribunals. If it were to be binding, there would need to be an express power in the primary legislation. The real problem, for the reasons I have given, is that it would be very difficult to frame any general guidance which can help tribunals to arrive at consistent, appropriate and fair decisions.
My noble friend's amendment would also mean that in every potential "rural exemption" case an application to the tribunal would have to be made, with the possibility of appeals to higher tribunals. This would create uncertainty for both leaseholders and freeholders and unnecessary expense since the parties would have to bear their own costs of fighting their case. These costs could easily extend to the fees of experts in estate management as well as of lawyers. The freeholder would have to state the purposes of management of his estate and effectively the future of the estate would be determined by the tribunal. I hope that my noble friend will understand if I say that his amendment would cause a number of difficulties as well as uncertainties and it would therefore be difficult for us to accept it.
10.15 p.m.
Viscount Caldecote: My Lords, I am extremely disappointed that my noble friend could not be a little more sympathetic to the purpose of the amendment. He does not seem to have any understanding of its objective, which is to make things fairer for a great many people who are now not able to take advantage of the principle of enfranchisement which is integral to the Bill.
The amendment has received widespread support. No one has spoken against it except my noble friend Lord Hamilton. Therefore, I find it odd that the Government are not prepared to give encouragement and to say that they will consider the matter again in another place to see whether some arrangements might be made for giving guidance to the tribunal. That seems to be my noble friend's main objection to the amendment. If the principle is accepted, surely we can get round the difficulties.
I believe that this is an important point of principle. At this late hour one is always reluctant to seek to divide the House, but because this point has been discussed right through Committee stage, Report stage and now, and because the amendment has been refined and refined again to try to meet the objections which the Government have raised, I think that the opinion of the House should be tested—
Earl Ferrers: My Lords, before my noble friend seeks to divide the House, I hope that he will think again. He said that he was sorry that I did not give a sympathetic response. I have tried to address myself to what the effect of my noble friend's amendment might be. It is not an argument about the principle; we are dealing with what should be put into legislation. If the amendment were accepted, we would be putting something uncertain in legislation. It is impossible for

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tribunals to know the principles of the management of estates and what is being done, yet a tribunal, not a court, will have to discuss and decide the matter.
I really believe that it would be unreasonable of my noble friend, particularly at this late hour and at this late stage, to seek a Division on this amendment when I have tried to explain to my noble friend that whatever he includes in the Bill will not work if it is along these lines.
Viscount Caldecote: My Lords, I know that I have angered my noble friend, but the fact is that tribunals now sit in all urban areas to discuss situations and problems which are just as difficult as my noble friend alleges that this is. Tribunals consider the management schemes which previous landlords have set up, rightly, to preserve the amenities of an estate, as I explained when I moved the amendment. I happen to know of one such valuation tribunal which has been sitting for nearly a year and has not yet come to any conclusion. If such difficult issues can be put before leasehold valuation tribunals, why cannot the difficult issues that we are now considering be put to them also?
I had hoped that the Government would be sympathetic to the amendment which seeks to remove a great unfairness affecting a lot of people. I had hoped that the Government would look for a way of giving guidance to tribunals to make their work easier. If the Government are not prepared to do that, we are left with a very unhappy situation for a lot of people. I must insist on putting the amendment before the House. I am sorry to have annoyed my noble friend who is a real friend, but I think that this is an important point of principle which should be decided. I commend the amendment to the House.
10.19 p.m.
On Question, Whether the said amendment (No. 113) shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 43.

Division No. 4

CONTENTS

Caldecote, V. [Teller.]

Hollis of Heigham, B.

Carnock, L.

Mar and Kellie, E.

Morris of Castle Morris, L

Coleraine, L.

Strabolgi, L. [Teller.]

Dubs, L.

Taylor of Blackburn, L.

Graham of Edmonton, L.

Thurso, V.

Hamwee, B.

Williams of Elvel, L.

NOT-CONTENTS

Balfour, E.

Donegall, M.

Berners, B.

Ferrers, E.

Biddulph, L.

Fraser of Carmyllie, L.

Blaker, L.

Gisborough, L.

Blatch, B.

Glenarthur, L.

Chesham, L. [Teller.]

Goschen, V.

Colwyn, L.

Hamilton of Dalzell, L.

Courtown, E.

HolmPatrick, L.

Dean of Harptree, L.

Hothfield, L.

Denton of Wakefield, B.

Howe, E.

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Inglewood, L

Miller of Hendon, B

Jenkin of Roding, L.

Montrose, D.

Lindsay, E.

Northesk, E.

Long, V. [Teller.]

Parkinson, L.

Lucas, L.

Rawlings, B.

Lucas of Chilworth, L.

Saltoun of Abernethy, L.

Skelmersdale, L.

Lyell, L.

Stamp, L.

Mccoll or Dulwich, L.

Trefgarne, L.

Mackay of Ardbrecknish, L.

Trumpington, B.

Marlesford, L.

Ullswater, V.

Massereene and Ferrard, V.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.28 p.m.
Schedule 18 [Miscellaneous provisions]:
Lord Lucas Lord Lucas moved Amendment No. 114:
Page 202, line 47, at end insert—
("( ) Except as otherwise provided by the regulations, in the case of introductory tenants, the provisions of the regulations shall apply in place of the provisions of section 137 of the Housing Act 1996 (consultation on matters of housing management).").
The noble Lord said: My Lords, we have included a provision in paragraph 3 of Schedule 18, which will insert a new Section 27BA in the Housing Act 1985, which widens the Secretary of State's powers to make regulations governing tenant consultation on housing management.
Amendment No. 114 will ensure that introductory tenants will be treated in the same way as secure tenants when local authorities consult on housing management in accordance with any regulations made under Section 27BA. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 115:
Page 207, leave out lines 1 to 9 and insert—
("10. In section 89 of the Housing Act 1985 (succession to periodic tenancy), for subsection (3) substitute—
"(3) Where there is no person qualified to succeed the tenant, the tenancy ceases to be a secure tenancy—

(a) when it is vested or otherwise disposed of in the course of the administration of the tenant's estate, unless the vesting or other disposal is in pursuance of an order made under—

(i) section 24 of the Matrimonial Causes Act 1973 (property adjustment orders made in connection with matrimonial proceedings),

(ii) section 17(1) of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders after overseas divorce, &c.), or

(iii) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents); or

(b) when it is known that when the tenancy is so vested or disposed of it will not be in pursuance of such an order.".").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 143. I beg to move.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 116:
Page 212, line 21, at end insert—
(". In paragraph 21(d) of Schedule 13 to the Local Government (Wales) Act 1994 (Residuary Body a local authority for purposes of section 442 of Housing Act 1985)—

(a) omit the words from "(so" to "subsection (1)(b))", and

(b) after "local authority" insert "agreement to indemnify mortgagee and".").

The noble Lord said: My Lords, I shall speak also to Amendment No. 118. Section 442 of the Housing Act 1985, which provides for agreements by local authorities to indemnify mortgagees, is applied to the Residuary Body for Wales by Schedule 13, paragraph 21(d) to the Local Government (Wales) Act 1994. These two amendments make consequential amendments and repeals to Schedule 13, paragraph 21(d), to the Local Government (Wales) Act 1994 in the light of the amendments to Section 442 of the 1985 Act by paragraph 27 of Schedule 18 to the Bill.
In simple terms, what we are seeking to do is to continue to provide a power after the enactment of the Bill which the residuary body is currently able to exercise under the 1985 Act. I beg to move.
On Question, amendment agreed to.
10.30 p.m.
Schedule 19 [Repeals]:
Lord Lucas Lord Lucas moved Amendments Nos. 117 and 118:
Page 214, column 3, leave out lines 9 to 23 and insert—

("In section 4(2)(aa), the words ""consisting of the creation of an estate or interest".

In section 20(1), the definition of "the new landlord".

In section 20(2), the words "or counter-offer" in each place where they occur.

Section 31(5).

In section 60(1), the definition of "rent assessment committee".")

Page 220, line 16, at end insert—

("1994 c. 19.

Local Government(Wales) Act 1994.

In Schedule 13, in paragraph 21(d) the words from "(so" to "subsection (1)(b))".")

The noble Lord said: My Lords, I spoke to Amendment No. 117 with Amendment No. 27 and to Amendment No. 118 with Amendment No. 116. I beg to move.
On Question, amendments agreed to.
Earl Ferrers: My Lords, I beg to move that this Bill do now pass.
At this hour of the night, the greatest service that I can do your Lordships is to restrain my remarks by thanking all noble Lords who have taken part for the kind and courteous way in which they have addressed themselves to the Bill. It has been a pretty good marathon of a Bill and has covered many issues.
Perhaps I may thank in particular the noble Lords, Lord Williams and Lord Dubs, and the noble Baroness, Lady Hollis, for the way in which they conducted their work for the Opposition Front Bench. It has been a pleasure. On the whole, we did not become too ruffled, although flustered once or twice. Apart from that, we managed to get through the Bill all right.
Perhaps I may also thank the noble Baroness, Lady Hamwee, and the noble Earl, Lord Russell. On a number of occasions he entertained us by referring to Xerxes and all kinds of other curious and unexpected creatures from history.
I also wish to thank my noble friends who have participated on this side of the House, in addition to the noble Lord, Lord Strabolgi, and others from the Opposition Front Benches. Perhaps I may express—I was going to say my warmest thanks but everything is equal here—my particular thanks to my noble friends Lord Mackay of Ardbrecknish and Lord Lucas who carried the burden in the heat of the day on Second Reading and in Committee when I was out of the light. Probably they got on better than when I came back into the light. For all that, they carried a great burden, in particular my noble friend Lord Mackay who, like a sputnik, came from outer space and into the department. He took up the Bill which belonged to another department of which he was not a member. Then, like a sputnik, he shot back into terrestrial orbit until he returned to deal with his own amendments relating to his department.
I am grateful to your Lordships for the attention which you have given to the Bill. I hope that it leaves your Lordships' House in a better condition than when it started. I beg to move.
Moved, That the Bill do now pass.—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, I am most grateful to the noble Earl, Lord Ferrers, who I am glad to see is back in his usual rumbustious mood. The Bill is not one which we would unhesitatingly endorse. Nevertheless, we have had long debates and today there was a wise decision from your Lordships.
As my mind has been diverted to the Armed Forces and other issues, as I explained on Second Reading, I have been unable to take part in the various stages of the Bill as I should have liked. However, my noble friend Lady Hollis has carried the burden on issues such as homelessness and those relating to the latter parts of the Bill. She has done so with great distinction, eloquence and effect.

977
I am grateful in particular to my noble friend Lord Dubs who helped me on Parts I and II, which were technical. I hope that in the course of time he will be on the other side of this House, certain events having taken place in the next year or so.
Earl Ferrers: My Lords, we would welcome the noble Lord, Lord Dubs, on these Benches.
Lord Williams of Elvel: My Lords, I did say after certain events may take place, within a year or so. The noble Lord, Lord Mackay of Ardbrecknish, as always, has been good, effective and courteous. But I should like to pay a special tribute to the noble Lord, Lord Lucas who has carried a burden which was slightly unexpected, in the light of the noble Earl's wish to take holidays in Crete. He has performed with courtesy, the greatest distinction and with great intelligence. I am most grateful to the noble Lord, Lord Lucas, who will go far in this House—I hope in opposition.
However, I believe that this is not a Bill to which, at the end of the day, we can give our full support. There are a number of things which are quite right in the Bill and we would support them. But I still think that this Bill may well have to be re-written in a year or two, particularly on the matter of homelessness where I do not think the Government have given much.
Having said that, and not wishing to detain your Lordships very long, I believe that there will be a debate on the various matters that we have passed in this House, in one form or another, in another place. I am sure that that will be informed and slightly aggressive in a way that is, perhaps, foreign to your Lordships' House.
I wish this Bill partially well. There are some things which are good and some things which are bad. But it is not for me at this moment to say which are the good and which are the bad. I am grateful to the noble Lords opposite for their courtesy towards the Opposition. In particular, I repeat—and I mean it in very genuine terms—I am grateful to the noble Lord, Lord Lucas.
Baroness Hamwee: My Lords, I, too, share a little more enthusiasm for the process than the outcome of this Bill. Nevertheless, I should like to take the opportunity to thank those who have been mentioned. It is unusual for me to take the Government's part to save the noble Earl testing his healing hip yet again and answering the crack about "going on hols". We were very glad—and I know that other noble Lords were too—to see him back in his place after his operation. I had not thought of the noble Lord, Lord Mackay of Ardbrecknish, as a sputnik, nor had I thought of the Department of Social Security as out of space; but I will reflect on that.
Like the noble Lord, Lord Williams, my admiration for the sheer application of the noble Lord, Lord Lucas, is tremendous. I have noticed today that he has barely been able to leave the Chamber. I cannot do the arithmetic now, but, many hours on, it is quite clear that he has listened to many points where others might have felt that their temper had been strained just a little.
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It has been a pleasure working with other noble Lords on this Bill. I would like to thank my noble friend Lord Russell, although it always seems impertinent to thank someone whose wisdom and seniority I admire so much. I would also like to thank my noble friend, Lord Meston, who, from these Benches, carried a major part of the Bill at Committee stage. He has been unable, for professional reasons, to spend as much time on it since then.
I should like to thank also the organisations which have provided so much helpful material. I hope that we have been able to do them justice. I thank also Selena Bevis, the Liberal Democrat research assistant, and Mr. Nick Goss who volunteered to help and continued volunteering almost to the end of today. Like the noble Lord, Lord Williams, I wish a healthy passage to parts of the Bill and a fairly swift demise to other parts of it.
Lord Strabolgi: My Lords, I should like to associate myself with what the noble Baroness, Lady Hamwee, said and to pay tribute to the noble Lord, Lord Lucas, in particular and to the noble Earl, Lord Ferrers, for their unfailing help and courtesy throughout the passage of the Bill.
I should like to thank also my noble friend Lord Dubs who has also been associated with Part III. I very much enjoyed working with him. We managed to get three concessions from the noble Lord, Lord Lucas, for which we are grateful, which I never expected to get when the Bill started its lengthy passage through your Lordships' House. I am very glad that we managed to make those improvements and that the Government accepted them.
Earl Ferrers: My Lords, I thank your Lordships for the final welcome as this Bill passes. It was a rather muted welcome from the noble Lord, Lord Williams of Elvel, who said that he liked some parts of it but did not like others. So long as he concentrates on the parts that he likes, that is the main thing.
However, I should tell the noble Lord, Lord Williams, that he really must get his facts straight. He accused me of going on holiday. He must think of all the people who will read Hansard and see what he said; that is, that I had gone on holiday to Crete when I did nothing of the sort. The next time he goes on holiday to Crete, I should not wish him to experience the experience that in fact I had.
I was particularly grateful for the tribute which the noble Baroness, Lady Hamwee, and the noble Lords, Lord Williams and Lord Strabolgi, paid to my noble friend Lord Lucas. He did a magnificent job. He shouldered responsibility for all the parts of the Bill for which I should have been responsible. He did it with enormous dignity and understanding. That was a remarkable effort.
I agree with the noble Lord, Lord Williams, about just one thing. He said that my noble friend Lord Lucas will go far in this House but he added, "on the Opposition Benches." Of course, he will not have an opportunity to experience that and he should have left out those last few words. I commend the Bill to the House.
On Question, Bill passed and returned to the Commons with amendments.

Education (Scotland) Bill [H.L.]
10.37 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (The Earl of Lindsay): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[The page and line refer to Bill (138) as first printed by the Commons.]
COMMONS AMENDMENT
1 Clause 2, page 2, line 24, leave out 'and assist in,' and insert 'assist in or carry out'.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1 I shall speak also to Amendments Nos. 2 to 4. I shall concentrate first on Amendments Nos. 2 and 3.
During Committee stage in this House the noble Lords, Lord Ewing and Lord Carmichael, spoke with eloquence and with sincerity about those with special educational needs. The matter was raised again when this Bill was considered by another place.
My right honourable friend the Secretary of State and I would expect the SQA to cater for those with special educational needs. Both SEB and SCOTVEC have a strong track record in that area.
This amendment therefore makes specific reference to SEN students in Clause 4(a). This power deals with the procedures adopted by establishments for assessing attainment rather than the audit of the effectiveness of these procedures dealt with in 4(b) which the noble Lords suggested. We feel that this is preferable.
We are committed to the principle that those with special educational needs should have the opportunity to gain fair access to qualifications. This amendment underlines that commitment and is the rationale behind Amendments Nos. 2 and 3.
I turn now to Amendments Nos. 1 and 4 which deal with national testing. Since 1993, primary schools have implemented a system of national testing from P1 to P7, in line with the principles of the 5–14 curriculum development programme.
Overall testing rates in primary schools are now very respectable, taking into account the time that it takes most pupils to advance one level in the programme. Some 90 per cent. of primary pupils are now routinely tested, using national testing materials, as they progress through one of the 5–14 attainment levels. The concept of testing—so controversial in 1992—is now rightly regarded as part of good teaching practice. In primary schools, the enduring result of that period was a real commitment to implement testing as part of the 5–14 programme.
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Primary schools in Scotland have performed on testing. But the secondary schools have not. Secondary schools were given an extra year to prepare for the introduction of testing; and the monitoring of testing rates only began in the 1994–95 session.
That delay should have meant that the secondary rates started at a decent level and rose swiftly. But the reality is that the rates of national testing in secondary schools are distressingly low.
For the latest available full year period, testing rates in the three tested areas of reading, writing and mathematics were, respectively, 9 per cent., 5 per cent. and 8 per cent. Several of the former education authorities reported testing rates in each of the subject areas of under 5 per cent. These rates are unacceptably low. And they have not appreciably improved over the past 18 months.
Although a significant number of schools are asking for national testing materials, very few indeed are actually doing national testing in the way the Government have asked for it to be carried out and in the way that education authorities themselves pledged to do back in 1993. And all the while, parents wait—wait to see results of their children's progress, as measured against nationally set standards.
Amendment No. 1 therefore extends the powers of the SQA in preparation for the extension of its role in national testing, while Amendment No. 4 makes substantive provision for testing regulations. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 1.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
2 Clause 4, page 3, line 15, after 'persons' insert '(and, in particular, such persons with special educational needs)'.
3 Clause 21, page 10, line 29, at end insert—
"'special educational needs" has the meaning given by section 1(5)(d) of the Education (Scotland) Act 1980;'.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 and 3 en bloc. I have spoken to Amendments Nos. 2 and 3 when moving Amendment No. 1
Moved, That this House do agree with the Commons in their Amendment Nos. 2 and 3.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENT
4 Before Clause 32, insert the following clause —
ASSESSMENT OF SECONDARY SCHOOL PUPILS
'. After section 2 of the Education (Scotland) Act 1980 (Secretary of State may prescribe standards etc. for education authorities) there shall be inserted the following section—
"Assessment of secondary school pupils.
2A.—(1) The Secretary of State may by regulations make provision for the testing and assessment of pupils undertaking the first or second year of secondary education in public or self-governing schools.

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(2) It shall be the duty of an education authority or a board of management to comply with the provisions of regulations made in pursuance of subsection (1) above.
(3) Regulations made in pursuance of subsection (1) above may make different provision as to different cases or circumstances.".'.
Lord Carmichael of Kelvingrove: My Lords, I beg to move that the House do disagree with the Commons in their Amendment No. 4.
The amendment, sadly, is not well thought out. The Government successfully introduced a new Clause 32 to the Bill at Committee stage as an amendment to the Education (Scotland) Bill 1980 which would allow for the testing and assessment of children in the S1 or S2 of secondary education in public and self-governing schools. The tests will be run by the new Scottish Qualifications Authority and will be marked by external examiners. The Government's intention is to take regulations in April and introduce the new S1 and S2 tests in August 1997.
The amendment seeks to ensure that pupils are tested only with their parents' consent. It will enable parents to elect to have their children tested and will ensure that no children are tested without parental consent. This follows from the Secretary of State's assurance in the Commons on Second Reading that no pupil will be required to be tested if his or her parents do not wish it, and the amendment ensures that there is a statutory basis for that decision.
There are a number of serious concerns about the new proposals, but at this late hour I will not speak to them at great length and perhaps tire noble Lords even further. The timetables are tight and, even if there were a general election, an incoming government would inherit the regulatory framework. The question arises of the stress on children given the timescale and the fact that the tests are likely to be marked by an outside body. The implication is that primary schools are unable to assess pupils properly and that a basic entry assessment system is needed to offset that deficiency.
Primary school staff will try to prepare pupils for the test in S1. There are fears of a narrowing of the curriculum. I am not trying to reduce the importance of the subjects themselves, but too narrow a focus on reading, writing and mathematics at this stage of a child's career is not the best way to bring him forward to become a fully educated individual.
There are also considerable cost implications. Has the Minister any information on the costs that may be involved? We should consider the morale of staff already facing the (5–14) curriculum changes and the implementation of the Higher Still programme. That places a severe strain on staff. Our conclusion is that the intentions of the Government are clear but have been poorly thought out. I think that is evident by the late date at which such important changes to the Bill were introduced.
I am sorry that the Government have introduced this amendment and this whole attitude to testing. I am sad to say that, because I do not like education Bills, or any sort of Bills, to fail one after the other. But I am sure there will need to be yet another education Bill
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sometime in the not too distant future. This amendment should not have been introduced, and certainly not at such a late stage. I cannot agree with it. I beg to move.
Moved, That the House do disagree with the Commons in their Amendment No. 4.—(Lord Carmichael of Kelvingrove.)
The Earl of Mar and Kellie: My Lords, given the late hour I shall speak briefly. I believe that testing proves to be unpopular in Scotland because of the perceived threat to the comprehensive system of education and because of the perverse effects that the interpretation of high and low schools can have on pupils, their families and teachers.
The Earl of Lindsay: My Lords, I can assure the noble Lord, Lord Carmichael, and to an extent the noble Earl, Lord Mar and Kellie, that some of the details that have been mentioned, principally by the noble Lord, Lord Carmichael, will come under the scrutiny of the consultation which my honourable friend the Minister and my right honourable friend the Secretary of State have promised will be carried out on the testing which will be introduced to secondary one and secondary two levels. Therefore, as regards the timetable between now and August 1997 when these tests will come into effect, that is exactly the sort of issue which the consultation exercise can address.
The noble Lord thinks there is undue stress being placed on children. Again that matter can be discussed between the education authorities and SEB—or SQA as it will become. I remind the noble Lord that testing is a regular feature now of primary school education. I am not sure that the sudden stress on children that the noble Lord imagines in secondary one and secondary two schools, will occur. I think that most children, not least my own, are used to those assessments being made.
I take issue with the implication of the noble Lord, Lord Carmichael of Kelvingrove, that reading, writing and arithmetic provide too narrow a focus on which to test a child. They are three basic requisites, which almost any child requires; therefore, the claim that it is too narrow a focus is one with which I could not agree.
The final point concerns costs. I assure the noble Lord that no additional burden will be imposed on education authorities. Indeed, my honourable friend the Minister and my right honourable friend the Secretary of State both assured another place that the additional resources required for this will be given to SQA. Therefore, no additional burden will be imposed on the education authorities themselves.
The noble Earl, Lord Mar and Kellie, stressed that testing is unpopular. I would suggest that, given that primary school testing is now greeted by parents and, indeed, by the schools themselves, as a success, it would indicate that after the initial reservations of the parties opposite have been overcome these will also be welcomed by a large client group.
Lord Carmichael of Kelvingrove: My Lords, I must correct the noble Earl, Lord Lindsay, if I have given him the wrong impression. I made a point of saying that the subjects of reading, writing and arithmetic are very important. All I implied was that these tests were narrowing matters down too much, so that if the pupils were being tested too often, particularly if they were external and national tests, it might force the schools to neglect other parts of the curriculum in order to concentrate on these subjects. Numeracy is, of course, incredibly important, but I do not like the idea that it may become the only important matter, so that there would be numerate people who did not have other skills, in an educational sense.
I do not necessarily wish the Minister to answer; I merely wish to make it clear that I was not attempting to suggest that those subjects were unimportant. They are very important, but so are other matters in the educational system. Therefore, I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4.
On Question, Motion agreed to.
COMMONS AMENDMENT
5 Clause 32, page 18, line 42, after 'kilometers' insert `(2 miles)'.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 5. In moving Amendment No. 5, I shall speak also to Amendments Nos. 6, 7, 8 and 9.
Amendments Nos. 5, 6 and 7 insert imperial measurements as supplementary indications of distance in addition to the metric terms adopted in new Section 28A(3B) of the Education (Scotland) Act 1980 (as inserted by Clause 32).
Amendments Nos. 8 and 9 clarify the regulation-making power in new Section 28A(3C) of the Education (Scotland) Act 1980 (as inserted by Clause 32) to prescribed maximum numbers of places which may be reserved for children of incomers to an area.
Moved, That the House do agree with the Commons in their Amendment No. 5.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
6 Clause 32, page 18, line 43, after 'kilometers' insert `(3 miles)'.
7 Page 18, line 44, at end insert—
', and in paragraphs (a) and (b) the references to imperial measurements are supplementary indications of distance.'.
8 Page 19, line 2, after second 'number' insert 'or, as the case may be, such percentage of places at the school or relating to the particular stage of education'.
9 Page 19, line 7, at end insert '; and different numbers or, as the case may be, percentages may be prescribed under this subsection for the purpose of different cases or circumstances'.
The Earl of Lindsay: My Lords, with the leave of the House, I beg to move that the House do agree with the Commons in their Amendments Nos. 6 to 9 en bloc, to which I have spoken with Amendment No. 5.
Moved, That the House do agree with the Commons in their Amendments Nos. 6 to 9.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENT
10 Clause 36, page 20, line 15, leave out subsection (7).
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10. This is a technical and procedural amendment, relating to Bills originating in this House. It will delete the privilege amendment inserted as subsection (7) of Clause 36 at Third Reading, as is normal practice.
Moved, That the House do agree with the Commons in their Amendment No. 10.—(The Earl of Lindsay.)
On Question, Motion agreed to.
11 p.m.
COMMONS AMENDMENT
11 Schedule 5, page 30, line 14, at end insert—
`. After section 51(2B) of the Education (Scotland) Act 1980 (provision of transport and other facilities) there shall be inserted the following subsection—
"(2C) In considering whether to make any arrangements under subsection (1) above in respect of pupils attending schools, an education authority shall have regard to the safety of such pupils.".'.
Lord Carmichael of Kelvingrove: My Lords, I beg to move that this House do disagree with the Commons in their Amendment No. 11. The amendment may appear unnecessary because we all have views on school transport. We are grateful that it is provided on such a wide scale in so many parts of Scotland.
However, I wish to refer to the Government's proposed amendment to Section 51 of the Education (Scotland) Act 1980 relating to the provision of transport and the need to have regard to the safety of pupils.
On the face of it, this would appear to be a straightforward amendment enshrining in statute what is standard practice in Scottish education authorities. However, there are genuine concerns about the intent behind the amendment, which could have serious implications for councils, hence our desire for clarification from the Minister. The Minister has been helpful throughout the Bill at all stages, giving every piece of information that was asked for. We seek further clarification and the same courtesy from the Minister, which I am sure we shall receive.
The amendment as proposed generally, as already indicated, reflects current practice in education authorities, but it is unclear and could give rise to unrealistic expectations among parents. I hope that the Minister and his advisers will look carefully at the provision. As worded, it could be taken to refer to

985
individual pupils which it is assumed is not the case as this would clearly have unquantifiable financial repercussions for councils. For the sake of clarity, the amendment, we believe, should be reworded to read,
"in respect of a pupil attending a school, an education authority shall have regard to the safety of such a pupil".
In general, Scottish local authorities would prefer a retention of the status quo in respect of statutory references to the provision of school transport. As a minimum, however, a government assurance that the amendment is not intended to impose any new burdens on authorities would be most helpful. Perhaps the Minister will give us that assurance. I beg to move.
Moved, That the House do disagree with the Commons in their Amendment No. 11.—(Lord Carmichael of Kelvingrove.)
The Earl of Mar and Kellie: My Lords, the Commons amendment seems to be aimed at curbing over-enthusiastic cutting back by unscrupulous local authorities. I find this rather strange, since Scottish local authorities are usually charged with overspending.
The Earl of Lindsay: My Lords, the Scottish local authorities may lay themselves open to being charged with overspending because of the generous local authority settlement that they have received from my right honourable friend the Secretary of State.
However, underlying many of the remarks made by the noble Lord, Lord Carmichael, is the assumption with which we agree: that it is good practice for education authorities to give appropriate consideration to safety issues when considering whether or not it is necessary to make school transport arrangements in respect of an individual pupil. That is exactly what many education authorities do. Therefore, the addition of the amendment to the face of the Bill will not impose any new burden on them because we are simply formalising a practice already followed.
However, where local authorities are failing to follow this good practice, additional costs would be involved. But we would simply be asking those local authorities which are failing to take safety into account when organising the transport of pupils in their area to do so. In that instance, we believe that it is a justifiable additional burden which should fall to local authorities, given that it is good practice that the consideration of safety should be taken into account.
The noble Lord made some other points which went much wider than the amendment with which we deal at present. The view of my honourable friend the Minister for Education at the Scottish Office is that this amendment is a very specific amendment on this one subject. It does not seek to deal with the wider implications that the noble Lord raised.
Lord Carmichael of Kelvingrove:My Lords, before the Minister sits down, could he in any way quantify the additional costs that he suggested might be involved? They will be important to local authorities. Can he give us a percentage or a rough idea of whether they are
986
excessive? How do the Government intend to reimburse local authorities for something which has been caused by the Government, with the best of intentions, when they changed the rules in the middle of the game?
The Earl of Lindsay: My Lords, our view is, first, that it is impossible to quantify the costs that a local authority may take on when it considers safety in the provision of transport for its pupils. Circumstances vary dramatically between areas and schools. We have deliberately introduced considerable flexibility into the amendments so that the widely diverse circumstances can be taken into account by each school, police force and the parents who will be involved in such situations.
The essential point is that any good local authority will, as a matter of good practice, already take into account the safety of pupils when deciding whether to offer transport. Therefore, for the authority there is no additional cost.
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for his explanation which I will read in Hansard. It is rather late in the day to believe that anything else can be done with the Bill, so I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.
On Question, Motion agreed to.
COMMONS AMENDMENT
12 Schedule 5, page 30, line 24, at end insert—
'. After section 13(3) of the Self-Governing Schools etc. (Scotland) Act 1989 (eligibility for self-governing status) there shall be inserted the following subsections—
"(3A) Without prejudice to subsection (3) above, where an education authority makes a proposal to discontinue a school by virtue of section 22A of the 1980 Act, no resolution shall be passed or request made under subsection (1) above during the relevant period.
(3B) The relevant period is whichever is the shorter of the period from the date when the education authority decides to consult persons in accordance with section 22A of the 1980 Act to the date the decision to discontinue the school is reached or—

(a) where no consent is required under section 22B. 22C or 22D of the 1980 Act as regards the decision to discontinue the school, three months later;

(b) where consent of the Secretary of State is so required, six months later.".'.

The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12. This amendment limits the use of procedures for schools to seek self-governing status by school boards or parents simply to block school closures proposed by an education authority.
Moved, That the House do agree with the Commons in their Amendment No. 12.—(The Earl of Lindsay.)
On Question, Motion agreed to.

Deer (Amendment) (Scotland) Bill [H.L.]
11.7 p.m.
The Earl of Lindsay: My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[The page and line refer to Bill (101) as first printed by the Commons.]
COMMONS AMENDMENT
1 Clause 10, page 9, line 41, at end insert 'and'.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. I. In doing so, I wish to speak also to Amendments Nos. 2 to 15. The amendments are all technical or minor in nature. There is a group of amendments designed to regulate the coming into force of the Act and to ensure a smooth transition to the consolidated Act. The remaining amendments represent minor changes to the Bill or small corrections. I commend the amendment.
Moved, That the House do agree with the Commons in their Amendment No. 1.—(The Earl of Lindsay.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
2 Clause 10, page 9, line 42, leave out from 'validity' to end of line 47 and insert—
'(8A) No authorisation shall be granted under subsection (2) or (3) above unless a code has been published under subsection (10) below, and any such authorisation shall contain a condition that the person concerned shall comply with the relevant provisions of any such code.'.
3 Page 10, line 2, leave out 'subsection (8)(c)' and insert 'subsection (8A)'
4 Page 10, line 10, at end insert—
'(2) Where on the commencement of this section a code has been published under section 33(4D) of the principal Act, that code shall be treated, after that commencement, as if it had been published under section 33A(10)(a) of that Act.
(3) Until a code is published under section 33(10)(b) of the principal Act (which is inserted by subsection (1) above), section 23(3A) of that Act shall have effect as if for the word "any", in the second place where it occurs, there is substituted the word "unenclosed".'.
5 Clause 11, page 10, line 20, at end insert—
'(bb) section 25AA;'.
6 Clause 12, page 11, line 13, leave out `, in relation to woodland.'.
7 Clause 14, page 12, line 11, leave out from 'force' to end of line 13 and insert 'at the end of the period of three months beginning with the day on which this Act is passed'.
8 Page 12, line 13, at end insert—
'(2A) Until an order in relation to red deer stags and hinds is made under section 21 of the principal Act (close seasons), as substituted by section 8 of this Act, the period for the purposes of subsection (1) of the said section 21 for—

(a) such stags shall be the period commencing on the twenty-first day of October and ending on the thirtieth day of June; and

988

(b) such hinds shall be the period commencing on the sixteenth day of February and ending on the twentieth day of October.'.

9 Page 12, line 18, leave out subsection (4).
10 Schedule 1, page 13, line 14, after 'each";' insert '; and (iii) after the word "been" there shall be inserted the words "taken or";'.
11 Page 16, line 19, after 'enclosed' insert 'or unenclosed'.
12 Page 16, line 22, leave out 'shot' and insert 'taken or killed by him or by any person, other than the owner or his servants in ordinary service, authorised or nominated by him under or'.
13 Page 17, line 3, at end insert—
'The Agriculture (Scotland) Act 1948 (c.45)
.—(1) The Agriculture (Scotland) Act 1948 shall be amended as follows.
(2) In section 39 (control of injurious animals), after subsection (3) there shall be inserted the following subsection—
"(3A) In subsection (3) above "deer" means any species of deer which is not included in the definition of "deer" in section 35A of the Deer (Scotland) Act 1959 (interpretation).".'.
(3) After section 42 there shall be inserted the following section—
"Meaning of "animals" for purposes of section 40 to 42.
. In sections 40 to 42 of this Act "animals" does not include any species of deer which is included in the definition of "deer" in section 35A of the Deer (Scotland) Act 1959 (interpretation).".'.
14 Schedule 2, page 17, leave out lines 25 to 27.
15 Page 18, line 10, leave out ', in subsection (3), the words "the carcase of," and'.
The Earl of Lindsay: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 to 15.
Moved, That the House do agree with the Commons in their Amendments Nos. 2 to 15.—(The Earl of Lindsay.)
On Question, Motion agreed to.

European Parliamentary Constituencies (Scotland) Order 1996
11.10 p.m.
The Earl of Lindsay The Earl of Lindsay rose to move, That the draft order laid before the House on 25th June be approved [25 th Report from the Joint Committee].
The noble Earl said: My Lords, this order will give effect to the final recommendations contained in the report of the Boundary Commission for Scotland following its review of European parliamentary constituencies.
The order has been considered by the Joint Committee on Statutory Instruments. If it is approved by this House and another place, my right honourable friend the Secretary of State for Scotland will submit it to Her Majesty in Council. The new European constituencies will come into effect at the next European

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general election, in June 1999. In the meantime, should any European by-election he held, this will take place on the basis of the existing European constituencies.
The commission has undertaken this European review as a result of Parliament approving new parliamentary constituencies in Scotland which take effect at the next general election. This is a statutory requirement as the building blocks for the European constituencies are the UK parliamentary constituencies.
I take this opportunity to thank the commission for the efficient and expeditious manner in which this review was undertaken. Lord Davidson, who chaired the commission so effectively, recently announced his retirement, so I also take this opportunity to wish him well. I commend the order to the House.
Moved, That the draft order laid before the House on 25th June be approved [25th Report from the Joint Committee].—(The Earl of Lindsay.)
The Earl of Mar and Kellie: My Lords, briefly, I want to make the complaint that the opportunity does not seem to have been taken to introduce proportional representation into the Scottish European elections.
I understand that the United Kingdom is the only country within the European Union not to have done that so far. One of the home countries, Northern Ireland,
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has already done so. My complaint is that the provision was not extended to Scotland. The opportunity was missed.
The Earl of Lindsay: My Lords, the opportunity was quite deliberately missed in that this country has a long tradition of a certain electoral system. This party and this Government intend to maintain that tradition.
The noble Lord and his fellow Liberal Democrats may be wondering why their constitutional proposals for Scotland are becoming increasingly divisive and unpopular. It may well be related to the fact that nearly one-half of the proposed assembly by which they would have Scotland ruled in Edinburgh—a single-chamber government, I remind the House—will be composed of people who have not been directly elected. That causes some discomfort to those of us who acknowledge the strength of the traditional way of government in this country.
On Question, Motion agreed to.

Damages Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment. Commons amendments ordered to be printed.

Trusts of Land and Appointment of Trustees Bill [H.L.]
Returned from the Commons agreed to with amendments. Commons amendments ordered to be printed.
House adjourned at thirteen minutes past eleven o'clock.