Lords Sitting of 23 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 Coventry.

National Identity Number: Implications
Lord Marlesford Lord Marlesford asked Her Majesty's Government:
Whether a secure multi-purpose national identity number could be established for all United Kingdom citizens without the introduction of a system of national identity cards.
The Minister of State, Home Office (Baroness Blatch): My Lords, it would be possible for the Government to establish a national identity number without first introducing an identity card scheme, but we have no plans at present to do so.
Lord Marlesford: My Lords, does my noble friend agree that the effect of having an identity card without an underlying secure number is that the card would be hardly worth the paper it was printed on? It would become a farce like the British Visitor's Passport, and an expensive mistake like the national insurance number. At a time when the state is handing out such large sums of money, does my noble friend agree that it is important that we should know to whom we are handing that money? Does my noble friend agree that it is necessary that we have a secure national identity number and that the National Health Service number, which is given to everyone at birth, would be ideal?
Baroness Blatch: My Lords, I do not accept that a successful identity card scheme must necessarily be underpinned by a national identity number. Many measures would make the card a safe card, such as ensuring security during its production. Another important feature would be the identification information on the card. However, we have not ruled out the use of a number. My noble friend is right that a number could be useful, but I do not believe that it is necessary to have such a number for the card to work.
Lord McIntosh of Haringey: My Lords, from the Question tabled by the noble Lord, Lord Marlesford, I thought that he had thought carefully about its wording, but having heard the noble Lord's supplementary question I am not so sure. Is it not the case that a unique national identity number would be necessary only if the Government were to embark on a compulsory all-embracing single national identity card system which, we understand, would cost approximately £500 million (on probably out-of-date pricing) and that the path which the Government are likely to take—if they are to take any steps at all—is likely to be based
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on something like a photographic driving licence, for which a national identity number would not be necessary?
Baroness Blatch: My Lords, the noble Lord is absolutely right. It would be a costly option. However, I understood my noble friend's Question to relate to the introduction of an identity number without the introduction of a card. We believe that that would be very difficult. Perhaps I may repeat the question. My noble friend asked Her Majesty's Government whether a secure multi-purpose national identity number could be established for all United Kingdom citizens without the introduction of a system of national identity cards. We believe that that would be a particular problem.
Baroness Gardner of Parkes: My Lords, is my noble friend aware that my noble friend Lord Marlesford is not quite correct in saying that everyone is given a National Health Service number at birth because those of us who were not born in this country are given a National Health Service number labelled "NHS" on arrival in this country? Can my noble friend also confirm that if we were to have a national identity card system, which I personally favour, such a card could carry a great deal of valuable encoded information, including medical information, which could be lifesaving?
Baroness Blatch: My Lords, my noble friend makes an important point. There are problems and exceptions to the rule in almost any system. My noble friend has singled out at least one problem: not everybody who has a right of residence in this country was born here. My noble friend is also right in saying that because of new technology all sorts of information can now be carried on cards. Those who have read our Green Paper know that we have not ruled out the possibility of the wider use of such an identification card.
Lord Northbourne: My Lords, does the Minister agree that a secure multi-purpose national identity number would make an important contribution to reducing the amount of housing benefit fraud and other benefit frauds which are now reaching horrendous proportions?
Baroness Blatch: Yes, my Lords. There is an argument that such a number would be helpful in combating fraud. However, there is also another problem which cannot be ignored in all of this: if such a number was so widely used, so universal and applied to so many systems, the question of who can and cannot have access to it becomes very important. Furthermore, arrangements have to be consistent with the data protection regulations. Such a system would not be without complexity or problems.
Lord Clark of Kempston: My Lords, does my noble friend agree that whatever system is envisaged or implemented with regard to a national identity scheme,

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it would certainly combat fraud in the DSS and that, whatever the costs might be, the savings to the British taxpayer would easily outweigh them?
Baroness Blatch: My Lords, a good deal is going on to combat fraud, particularly social security fraud. We have a clear strategy for combating fraud in the state services. My right honourable friend the Secretary of State for Social Security has already announced the introduction of a plastic benefit card system which will commence in October. It will enable immediate checks to be made at post office counters against the Benefits Agency database.
Lord Astor of Hever: My Lords, does my noble friend agree that a database using a national ID number is less vulnerable to unauthorised access than one which uses personal names?
Baroness Blatch: Yes, my Lords, I agree with my noble friend on that point. A unique number would be much safer. There is a great deal of replication of names and my noble friend is right. But, again, no ID card would carry only a name. It would have other verifiable information on it.
Lord Hylton: My Lords, does the Minister agree that it is absurd and costly that almost everybody has three separate and different numbers; namely, for health, insurance and tax purposes?
Baroness Blatch: My Lords, there are many numbers: passport number; national insurance number; driving licence number, which indeed is unique; and NHS number. Behind my noble friend's point is the question: could we consider the possibility of having one single unique number to serve all those different purposes? I have said to my noble friend that we have not ruled that out.
Lord Mackie of Benshie: My Lords, can the noble Baroness tell us whether the system of national identity numbers which apparently will be very useful in preventing people obtaining money from the state will be of any use also in preventing people keeping from the state money which is due in tax?
Baroness Blatch: My Lords, we are talking about an identity card. Certainly, the Inland Revenue is a past master at chasing up those of us who do not pay back money we owe to the state. But the question underlying the noble Lord's point is whether such a card and number would help. I believe that the answer to both those questions is yes, it would.
Lord Dubs: My Lords, before we are carried away with enthusiasm for Big Brother and national identity cards, does the Minister agree that the case for a national identity card as a means of reducing crime has not been made, is opposed by many people in this country, and is a ridiculous measure?
Baroness Blatch: My Lords, I should like to hear from the noble Lord some kind of denial from his colleague in another place that it will not be Labour Party policy. Only this week the noble Lord's colleague suggested a much more draconian system: a genetic database and blood samples from babies and people applying to live in this country; as a back-up system, compulsory finger printing; in addition, a unique number which would tally with the genetic information; and on top of all that—the noble Lord looks a bit disturbed—a regulatory commission. Not only would that be expensive; it would also be incredibly complex. Nothing has been said about the cost, the complexity, the data protection issues or indeed the civil liberties issues. Do not blame this side of the House for draconian proposals!

Police Informers
2.45 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether they propose any restrictions on the use of police informers following the recent trial and conviction of a police officer for corruption and his dealings with Mr. Kenneth Noye as a police informer over a long period.
Baroness Blatch: My Lords, the use of informants is an operational matter for the police.
Lord Dean of Beswick: My Lords, is the Minister aware that Mr. Noye, who, it is now established, was a police informer used by the police force, was involved in the most brutal murder of Constable Fordham some years ago, for which quite surprisingly he was acquitted? If Mr. Noye was at that time on the payroll of the police as an informer and bearing in mind that other officers are now being investigated officially about whether they were releasing information to people such as Mr. Noye, is it not possible that one of Constable Fordham's so-called colleagues tipped off Mr. Noye that he was under surveillance by Mr. Sanderson with regard to the Brink's-Mat robbery which presented him with the facilities and information to dispose of the policeman and murder him?
Baroness Blatch: My Lords, I hope the House will understand that it would be quite improper for me to comment on any individual who might or might not be subject to a possible complaint against the police. Clearly laid down procedures for investigating complaints that the police have acted improperly are contained in Part IX of the Police and Criminal Evidence Act 1984. The responsibility for ensuring that complaints are thoroughly investigated rests with the chief officers and the independent Police Complaints Authority. If an investigation of a complaint suggested criminal action by an officer, the matter would be referred to the Crown Prosecution Service to consider whether criminal proceedings

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should be brought. I repeat that it would be improper for me to comment in this House on an individual case.
Lord Harris of Greenwich: My Lords, is the noble Baroness aware that the case to which the noble Lord refers was an extremely serious matter and the police officer concerned was rightly convicted and sentenced to a substantial term of imprisonment? Does she agree that the use of informants is a matter of critical importance in dealing with serious crime? Is she further aware that this matter is carefully monitored by both the inspectorate constabulary and chief officers to ensure that no impropriety takes place?
Baroness Blatch: My Lords, I agree with the first comment made by the noble Lord and with the second part of the statement in that informants properly employed—I emphasise properly employed—consistent with all the regulations laid down, are essential to criminal investigation and combating crime. It is essential and the police are highly accountable for the way in which they exercise it.
Lord McIntosh of Haringey: My Lords, the Minister was literally right when she replied to my noble friend that the employment of police informers is an operational matter for the police. But that is not the whole story, is it? Is it not the case that the principles which underlie the employment of police informers and the safeguards which are necessary—for example, to ensure that police informers do not also act as agents provocateurs—are matters for the Secretary of State and for the Government?
Baroness Blatch: My Lords, the noble Lord makes an important point. First, the Home Office issued guidelines in 1969 on the use of informants. They have been expanded and were supplemented in 1995 by ACPO. Both the Home Office and ACPO guidelines make it clear that on no account should an informant be permitted to act as agent provocateur, or incite or counsel another to commit an offence. Anyone doing so would himself be liable to prosecution.
Lord McIntosh of Haringey: My Lords, I should know the answer to this, but are those guidelines publicly available?
Baroness Blatch: My Lords, I am fairly certain that they are and, if they are, I shall let the noble Lord know. They must be available to the police so I am sure that they must be a public document.
Lord Renton: My Lords, is my noble friend aware that the practice in the criminal courts in this country has for years been of such a kind as to prevent people from being wrongly convicted when there have been police informants, and that the courts frown upon agents provocateurs and require corroboration of a police informant's evidence before the jury is told that it is acceptable?
Baroness Blatch: My Lords, my noble friend is right. The courts of course have a wide measure of discretion in exercising their powers to order the exclusion of evidence or to direct an acquittal where they believe that evidence has been collected in an improper way. That is always in the interests of justice for the person before the court.
Lord Dean of Beswick: My Lords—
Lord Stoddart of Swindon: My Lords, I did not want my noble friend to close the debate. I hope that he will have the opportunity to come back in a second. I wanted to ask the Minister whether the guidelines on agents provocateurs apply not just to police informants but to local authorities which are employing children to go into supermarkets and tobacconists to induce retailers to sell cigarettes and drink?
Baroness Blatch: My Lords, that matter is being reviewed. The use of under-age persons in test purchases is a matter for the police or, of course, for trading standards officers. They have to consider that those taking part would also be liable to prosecution. It is clearly important that the law is enforced effectively, but the prime consideration must at all times be the welfare of the juveniles themselves. Again, ACPO guidelines provide guidance on the use of juveniles as informants. That guidance is currently under review, as I said earlier. It is anticipated that more detailed advice on that issue will be produced, I believe by the end of the year.
Lord Dean of Beswick: My Lords, in her detailed reply to me, the Minister missed the main thrust of my question. I said that in a recent trial when an officer was convicted, it was stated that Mr. Noye was on the police payroll as an informant. Was Mr. Noye a paid police informant when he killed Constable Fordham in a most brutal fashion? With him being a paid police informant, is it not possible that someone told him that he was under surveillance, thus resulting in the death of an officer on duty? I am by no means satisfied that the answers I have received cover the point. I think that an innocent officer was butchered by someone who may well have been tipped off at the time.
Baroness Blatch: My Lords, I have to repeat that it would be difficult for me in this House to go into the details of any particular personal case in the course of answering a Question. The noble Lord, Lord Harris of Greenwich, has already said that that murder was tried in court, the person was found guilty, went to prison and served a sentence. Without referring to the particular details, if the noble Lord is suggesting that the police acted improperly or that the system—
Lord Dean of Beswick: A policeman.
Noble Lords: Order!
Baroness Blatch: My Lords, whether it is a policeman acting improperly or the police acting improperly, if that forms the basis of a complaint my advice is that a complaint should be made and investigated.

Dual Carriageways: Traffic Signals
2.54 p.m.
Lord Renton Lord Renton asked Her Majesty's Government:
Whether they will ensure that whenever possible traffic lights on dual carriageways are placed between the carriageways instead of at each side of them.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, traffic signals should be installed so that they are visible to both approaching and waiting traffic. To achieve that, and to be clear to which lane the signals apply, it is necessary and usual to place them both at the side and between the carriageways, unless the requirements of a particular site dictate otherwise.
Lord Renton: My Lords, I thank my noble friend for that somewhat cautious reply. Is he aware that overhead lights should also be placed in the centre rather than at the sides of dual carriageways?
Viscount Goschen: My Lords, I can confirm that in looking at the lighting of dual carriageways and motorways we aim for the most effective, economic, and environmentally sensitive approach. Indeed, putting lighting on the central reservation often achieves that. I can confirm that that is often also the most environmentally acceptable method.
Lord Clinton-Davis: My Lords, can the Minister indicate whether junctions on dual carriageways constitute a particular hazard? Does he have any evidence to suggest that more or fewer accidents occurred at junctions on dual carriageways in 1995 than in 1994, when I think they amounted to 6 per cent. of the total of 4,034 fatal or serious injuries occurring on the roads? If junctions do constitute a serious hazard, can he say whether the accidents are speed related?
Viscount Goschen: My Lords, I cannot give the noble Lord any more up-to-date statistics. Clearly many road safety issues centre on junctions. Of course when traffic is travelling fast that can be exacerbated. When people are speeding, obviously the risk increases in proportion. There is an issue relating to traffic lights on higher speed-limited roads. That is why the systems that we have introduced take account of traffic in a so-called dilemma zone when it is approaching lights.
Viscount Montgomery of Alamein: My Lords, following what the noble Lord, Lord Clinton-Davis, said, have the speed cameras which have been installed as an additional piece of road furniture had any effect?
Viscount Goschen: My Lords, yes, I believe that they have been extremely effective. I understand that some 300 cameras (both red light and speed cameras) have been installed. They have led to considerable road safety benefits.

Nuclear Weapon-free Zones
2.57 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether it would be safer to live in a nuclear weapon-free zone, having regard to their view that such zones "enhance global and regional security", than in Europe where it is also their view that peace and stability can only be preserved by nuclear weapons (H.L. Deb., col. WA22, 18th June 1996).
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, whether a nuclear weapon-free zone is feasible and would enhance stability must depend upon all the circumstances in any given region. With regard to Europe, I refer the noble Lord to my earlier Answer on 18th June.
Lord Jenkins of Putney: My Lords, is the Minister aware that there is a certain contradiction between the view that the nuclear weapon is peace-making and the alternative view that the whole region is better without it? Under those circumstances, would it not be wiser to say that the Answer to the Question is yes, and that the Government will work hard towards creating a nuclear-free zone in Europe so as to create the safest of all situations—a nuclear-free world?
Baroness Chalker of Wallasey: My Lords, the short answer to the noble Lord's question is no. The NATO countries believe that nuclear deterrence continues to play an essential role in the policy of maintaining stability in Europe, as I said in my Answer on 18th June. Our non-proliferation commitment is that the establishment of the nuclear weapon-free zone on the basis of arrangements freely arrived at by the states concerned enhances their global and regional security, but if the nations of Europe are not going to take that into account, then I believe we are far better to have proper deterrents. I compliment the noble Lord on carrying out to the full his recreation listed in Who's Who, which is to avoid retirement. I wish him—and I am sure everyone in the House will join me—a very happy 88th birthday on Saturday.
Noble Lords: Hear, hear!
The Earl of Kimberley: My Lords, does my noble friend agree that, having had nuclear deterrents since 1945, which is 51 years, peace has been kept in Europe and that if Afghanistan had had a nuclear weapon the Soviet Union might not have invaded Afghanistan?
Baroness Chalker of Wallasey: My Lords, Afghanistan is a sad country. It may be that that would have been as good a deterrent for Afghanistan as the nuclear deterrent has been for Western Europe and the free world.
Lord Richard: My Lords, as my noble friend approaches his 88th birthday, is the Minister aware that to my knowledge, he has been asking questions on this subject for 36 or 37 years? If he thinks he has made progress, will the Minister join with me in congratulating him? If he thinks that he has not made progress, shall we join in mutual commiserations?
Baroness Chalker of Wallasey: My Lords, there may be a time for commiseration, but fortunately I believe that this is a time for congratulations. The very fact that we are coming close to the prospect of achieving a comprehensive test ban treaty later this year is a sign that we have educated ourselves on these matters. However, I believe that it is right that nuclear deterrents should be regarded properly and we should work away at these matters. But it will not be easy to reduce nuclear weapons unilaterally. We are already reducing the size of our deterrent and taking into account new minimum security requirements. I am sure that that is the right way to go.
Lord Mayhew: My Lords, is the noble Baroness aware that her reference to the non-proliferation treaty is reassuring and goes back to the optimistic view that she was expressing about a month ago? Does that mean that the Government have overcome the problem of signing the treaty while India and one or two other countries do not sign it?
Baroness Chalker of Wallasey: My Lords, I believe that I told the noble Lord about a month ago that we were working away at this matter. I think that I said on that occasion that we want a treaty that will be effective in preventing proliferation. It cannot be effective unless there are proper inspections. That is clearly the problem which needs to be resolved before we can sign the treaty.
Lord Stoddart of Swindon: My Lords, will the noble Baroness give an assurance that the British nuclear deterrent will never come under any kind of control, operational or otherwise, of the European Union under the common foreign and security policy.
Baroness Chalker of Wallasey: My Lords, that will certainly not happen so long as a Conservative Government are in power. I cannot speak for the noble Lord's noble friends.
Lord Mackie of Benshie: My Lords, does the noble Baroness agree that there is only a small amount of danger or lack of safety if nuclear weapons are in the control of stable governments but that the biggest danger
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that we have today is that nuclear weapons may fall into the hands of unstable governments and, indeed, terrorist organisations?
Baroness Chalker of Wallasey: My Lords, I fully agree with the noble Lord, Lord Mackie of Benshie.
Lord Jenkins of Putney: My Lords, is the noble Baroness aware that I thank her very sincerely for her congratulations? I hope to continue making a nuisance of myself for a little longer yet.
Is the noble Baroness aware also that we have made progress on this matter in that we are now able to discuss it with more light than heat? In view of that, if the Government will look again at the possibility of making progress in relation to Europe, Europe will be a safer place. Will the Government consider the possibility of making perhaps not a U-turn but a movement of recognition towards the ultimate aim to which the Government are committed as much as anyone else; namely, a nuclear-free world?
Baroness Chalker of Wallasey: My Lords, I understand the noble Lord's passion on this issue. I believe that we are maintaining that minimum deterrent consistent with our national security requirements. That is how it should remain. However, we have made substantial reductions in our deterrent. It would be well for your Lordships to note that by the end of 1988, our deterrent will be reduced to a single system with 21 per cent. fewer warheads and 29 per cent. less explosive power than in the 1970s. Therefore, we are moving forward.

Baroness Blatch: Correction
3.5 p.m.
Baroness Blatch: My Lords, it may be for the convenience of the House if I correct personally something that I said in answer to the noble Lord, Lord Dean of Beswick. I know that efforts are being made to bring him back to the Chamber.
In answer to a question which he posed about Mr. Noye, I referred to a murder having taken place. I said that there had been a trial; and that the person was found guilty and subsequently served a sentence. The noble Lord, Lord Dean of Beswick, will know that that is not right. There was a murder; there was a trial; and the person was acquitted. There was a subsequent case in which the policeman was found guilty of corruption. I thought it best to put that matter right at the first available opportunity.
Lord Dean of Beswick: My Lords, I am grateful for that. There was another trial in which Mr. Noye, who got away with murder, was prosecuted for laundering the money, for which he received a sentence of 14 years. I believe that he served only seven years of that sentence. That is not much of a disincentive, is it?

House of Lords' Offices: Select Committee Report
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move that the Fourth Report from the Select Committee on House of Lords Offices be agreed to.
The Fourth Report from the Offices Committee deals with a number of subjects. The first is Her Majesty's Stationery Office privatisation, and noble Lords will see that much of the report deals with this matter. I suggest that comments on that matter should be reserved until the House comes very shortly to debate the Motion in the name of the noble Viscount the Leader of the House.
Accordingly, I shall confine myself to reminding the House that the report says that the Offices Committee agreed, on the basis of advice that it received, that the contract with HMSO for the provision of printing and publishing services,
"appears to provide the safeguards sought by the House … The Committee has left to the House the final decision on whether the contract meets its requirements".
I would like to take this opportunity to thank the Reading Clerk, who has been dealing with this matter under the Clerk of the Parliaments and who has done an immense amount of work on it; and to thank my counsel, Mr. Derek Rippengal, who has been involved in the drafting of the contract and has subjected it to very detailed scrutiny. I know that some of your Lordships were particularly anxious that independent legal advice would be available to undertake that work. I thank him. I would just add that I know, from my own experience of working closely with him on, in particular, Private Bills that no one brings a more independent mind to bear on this work for your Lordships' House than Mr. Rippengal and his fellow joint counsel to the chairman, Sir James Nursaw. He is meticulous and painstaking, has spent a vast amount of time on the matter and brings to the task precisely what is needed. I wanted to provide that information for the House while indicating that the HMSO matter and the protection and safeguards sought by the House will be dealt with on the noble Viscount's Motion.
The Offices Committee report also deals with the House's annual report and accounts. I am sure that the whole House will join me in thanking the authors of this invaluable document for all the hard work which has clearly gone into it. The annual report gives an excellent account of the activities of the House and its departments during the past 12 months. It will be published, and copies will be posted to Peers shortly before the House resumes in October after the Summer Recess.
The Offices Committee report refers to a revised database of Peers' specialised knowledge and experience. That used to be called the database of Peers' interests. However, since last year at least, the term "Peers' interests" has acquired a special meaning in the context of declaration and registration of interest. To avoid confusion, the name of the database has been changed. I would emphasise that Peers will be able to keep their data confidential if they wish.
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Finally, the Offices Committee report refers to a CD-ROM of the Palace of Westminster. I assure the House that that project is being carefully monitored by the authorities in both Houses. It will have the benefit of advice from our architectural archivist, Lady Wedgwood; and the contract with the producers has been drafted by my counsel. I commend the Motion to the House.
Moved, That the Fourth Report from the Select Committee be agreed to (HL Paper 102).—(The Chairman of Committees.)
Following is the report referred to:
1. HMSO Privatisation
In December 1995 the Committee took note of the Government's intention to privatise Her Majesty's Stationery Office provided that satisfactory arrangements could be made for the future provision of services to Parliament. The Committee agreed that extensive safeguards would be necessary to protect the House's interests. Similar safeguards were being sought by the House of Commons' Commission for that House.
The Committee agreed that, in any arrangements for privatisation, safeguards should be sought to secure the following:

1. Confidence that the business of the House would not be interrupted.

2. A publication regime which protected the interests of Parliament and did not leave the pricing of its publications to commercial interests.

3. A requirement on any prospective purchaser of the Stationery Office to accept the substance of the provisions of the recently agreed Supply and Service Agreement between the House and HMSO, including the maintenance of existing service standards and delivery schedules and the rights of the House to regulate the production and reproduction of its documents in both paper and electronic form.

4. The administration of Parliamentary copyright, and the function of Queen's Printer of Acts of Parliament, should not be transferred to the private sector.

The House agreed to the Committee's report on 18th January 1996. On the same day the House took note, on a motion by the Leader of the House, of the Government's plans for the future of HMSO, including safeguards proposed to meet Parliament's requirements for printing and publishing services.
In the six months since the House agreed to these safeguards, officers of the House, assisted by Counsel to the Chairman of Committees, have been engaged in drawing up a contract with HMSO which embodies the safeguards. We have been assured by the Clerk of the Parliaments that all reasonable steps have been taken to achieve the safeguards which the House has sought. The Finance and Staff Sub-Committee reported to us that in its opinion the terms of the contract as drafted appeared to provide the safeguards laid down by the House. Serious doubts were, however, expressed by some members of the Committee about the level of service which the House would receive under the contract. We have also been reminded that EC law does not permit the House to enter into an open-ended contract; and the contract expires on 31st March 2000, subject to the possibility of earlier termination, and is renewable for a further two years. At the end of that period, the contract will have to be put out to competitive tender.
Copies of the contract have been placed in the Printed Paper Office and the Library.
The Committee has been informed of the following short list of bidders for the purchase of HMSO:—

An independent consortium backed by Mercury Asset Management, 3i and Capita;

A Hambro's consortium;

National Publishing Group, a consortium led by Electra Fleming;

Westminster Information Systems, led by NatWest Ventures.

The Committee has agreed, on the basis of the advice we have received, that the contract appears to provide the safeguards sought by the House for the duration of the contract. The Committee has left to the House the final decision on whether the contract meets its requirements.
2. Electronic Publishing
The Committee approved a draft contract between the House and HMSO whereby HMSO would publish and distribute House of Lords' copyright material in electronic format.
3. House of Lords Annual Report and Accounts
The Committee approved the Annual Report and Accounts 1995–96.
4. Database of information about peers
The Committee approved a proposal to circulate a questionnaire to Lords to update the database of their specialised knowledge and experience. The questionnaire will be circulated to all Lords except those who had in the past indicated that they did not wish their specialised knowledge to be entered on the record and those without Writs of Summons or on leave of absence. Lords will have the option of keeping their data confidential.
5. CD-ROM of the Palace of Westminster
The Committee took note with approval of a proposal for a CD-ROM of the Palace of Westminster. Filming is expected to be completed by the beginning of the summer recess.
6. Refreshment Department Pay
The Committee noted with approval a pay increase of 3 per cent to House of Lords Catering Grades, from 1st April 1996.
7. Shorthand Writing Fees
The Committee noted with approval an increase of 3 per cent in fees payable to Gurneys, the Shorthand Writers to Parliament; and approved an amendment to the 1992 Agreement with Gurneys so that in future the two Houses of Parliament should no longer have regard to Treasury rates in determining the level of fees.
8. PDVN Accommodation Costs
The Committee was informed of the likely need for heavy expenditure to stabilise and develop the Parliamentary Data and Video Network (PDVN), details of which would be laid before it in due course. The Committee agreed that the House should contribute 22 per cent of the costs, shared with the Commons, of a lease of new accommodation in 10 Great George Street SW1 for the Communications Directorate for about five years.
9. Information and Staff of the House
In connection with the proposed increase in the provision by the Journal and Information Office of information about the House and its Select Committees, the Committee approved an increase of one in the complement of Clerks, to 22.
1 First Report from the Offices Committee, 1995–96, HL Paper 12.
2 HL Debs., 18th January 1996, cols. 712–760.
Lord Monkswell: My Lords, I thank the noble Lord the Chairman of Committees. I should like to ask him some questions on the report although I am to speak in the debate in the name of the noble Viscount the Leader of the House. My questions refer to paragraphs 4 and 8 of the report.
With regard to paragraph 4, the noble Lord referred to the change in title as regards information about Peers. However, I wonder whether the Offices Committee considered the usefulness of aligning the Register of Peers' interests with the other information which is made available by Peers about their knowledge and interests on other subjects. Surely it would be of use not
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only to Members of your Lordships' House but also to members of the public if a fuller picture of the situation was available in one document rather than having to refer to two documents.
My second point relates to paragraph 8 of the report which deals with PDVN accommodation costs. The report advises that there is,
"the likely need for heavy expenditure",
but gives no indication of the order of magnitude. Is it possible for the House to be given some idea of the order of magnitude of such heavy expenditure to be incurred in the near future?
Lord Bruce of Donington: My Lords, I must ask the indulgence of the House notwithstanding the remarks made by the noble Lord the Chairman of Committees about the desirability for all matters relating to HMSO privatisation to be left until the debate later today, which is to be led by the noble Viscount the Leader of the House.
I have not put down my name to speak in that debate, but I have one question to ask. I must beg the indulgence of the House to ask it now rather than do so during the course of the debate. In view of the remarks he made, I hope that the Chairman of Committees will understand my embarrassment in having to raise the question in this way. The report states:
"We have also been reminded that EC law does not permit the House to enter into an open ended contract; and the contract expires on 31st March 2000, subject to the possibility of earlier termination, and is renewable for a further two years. At the end of that period, the contract will have to be put out to competitive tender".
Can the Chairman of Committees tell me how long the Community has had the right to intervene in a matter concerning this House and the printing of its debates?
The Chairman of Committees: My Lords, perhaps I may, first, answer the point made by the noble Lord, Lord Bruce of Donington. Of course, I quite understand the circumstances in which he puts his question; indeed, he has done so quite properly. As I indicated, all the matters relating to that subject should be raised during the proceedings on the following Motion on the Order Paper. Therefore, perhaps I may leave that answer to the noble Viscount the Leader of the House.
I turn now to the two points raised by the noble Lord, Lord Monkswell. I shall seek to help the noble Lord on the second issue. On his first point, perhaps I may consider his suggestion. On the face of it, if I may say so with respect, it seems to be a helpful suggestion. However, there may be complications and I want to investigate any possibilities in that respect before giving a definitive answer. Therefore, I shall communicate with the noble Lord at some later stage. I trust that he will forgive me for not doing so now.
I turn now to the noble Lord's second point on costs and the parliamentary data and video network (PDVN). It seems likely that, in due course, more expenditure will be required and more staff will have to be recruited to enable the PDVN to deliver the standards which your Lordships and, indeed, Members of the other place would expect. At present, all that the Offices Committee

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has agreed to is that this House should contribute 22 per cent. towards the cost of a short lease of the new accommodation required at 10 Great George Street, SW 1. That particular cost in the first financial year—that is to say, the current year, 1996–97—will be £127,000. After that, for approximately five years, the cost will be £83,000 per year.
Lord Boyd-Carpenter: My Lords, before the House proceeds to debate the Motion on the Order Paper can the noble Lord indicate when the Motion was tabled and tell us how long noble Lords have had an opportunity to contemplate and consider it?
The Chairman of Committees: My Lords, I cannot answer the noble Lord without referring to the Minute, a copy of which, unfortunately, I did not bring with me. However, I believe that the Motion has been tabled for some days. I think, subject to correction, that it was tabled last Tuesday. I hope that that will have provided the noble Lord, Lord Boyd-Carpenter, and your Lordships generally with a little time to get to grips with the points raised in the report.
On Question, Motion agreed to.

HMSO: Draft Contract
3.16 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
I would submit that the terms of this Motion are narrow. We are addressing the draft contract for printing and publishing services between your Lordships' House and a privatised Stationery Office. Therefore, I do not propose to detain the House unduly by dwelling on other matters—for example, the principle of the privatisation of HMSO—as, in my submission, that would be outside the scope of the Motion.
Your Lordships will be well aware of the background to the contract. When the Offices Committee discussed the privatisation of HMSO last December, it listed certain contractual safeguards that it rightly believed to be essential to the needs of this House. Your Lordships' House then engaged lawyers specifically to draft the contract which met—and, indeed, exceeded—those criteria. It is that contract which I am now asking your Lordships to consider.
I note that not only does the Offices Committee believe that the safeguards have been met, but that, as the noble Lord observed this afternoon, such is also the opinion of counsel to the Chairman of Committees. The noble Lords, Lord Richard and Lord Weatherill, and indeed the noble Lord, Lord Jenkins, who I am sorry to see is not in his place, will I am sure allow me to refer to a letter that I sent to them on 18th July last. In that letter I reported a conversation that I had had with counsel to the Chairman of Committees in the wake of a notice, circulated to the Offices Committee last week, which invited any member of the Committee who had doubts about the draft contract between the House and HMSO to consult counsel to the Chairman of Committees.
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However, apart from me, I understand that no one consulted counsel. Therefore, I thought it might be helpful to write to my opposite numbers to report on the advice that he gave me. I was able to assure them that that, in counsel's opinion, the draft contract has entirely achieved the requirements laid down by the Offices Committee and, of course, those proposals were agreed to by your Lordships' House. In his view—and I report this with his permission—it reproduces the substance of the existing supply and services agreement but is tighter as befits a commercial contract. Counsel tells me that he is entirely satisfied that the requirements have been adequately fulfilled and that it is as tightly drawn a contract as one could have.
Noble Lords may also be interested to know that a very similar set of safeguards was requested by the authorities in another place. They have recently agreed to a similar contract. Indeed, our draft contract covers nearly £2 million-worth of work annually, compared to some £12.5 million for another place.
I am sure that many noble Lords share the stated concerns of the Offices Committee and it might, therefore, be useful, if your Lordships allow me, to outline some of the salient features of the draft contract. In all respects, I am advised that it at least meets the committee's safeguards, and in many cases exceeds them. For instance, the committee stated that steps should be taken to ensure that services continued to be provided from within central London. The contract, in fact, as your Lordships will know, ensures that the privatised Stationery Office cannot vacate HMSO's current parliamentary press in Southwark without the consent of your Lordships' House.
I know that there are many in this House, in the other place and elsewhere who are concerned about the pricing of parliamentary publications. Indeed, I have been concerned about that and I was pleased to sympathise with the noble Lord, Lord Lester, when he most helpfully intervened to ask a question last year. I hope that the noble Lord will agree that he and I are wholly at one on the importance of making parliamentary publications, in the interests of our parliamentary government, as widely available as possible. For that reason I believe that continued low cover prices are essential if the public are to be aware in particular of the work of your Lordships' House as well as of that of another place.
I am pleased, therefore, to be able to draw your Lordships' attention to the fact that the contract not only constrains cover prices, as the Offices Committee rightly and, I believe, unanimously requested, but also provides for real-terms price cuts of at least 2.5 per cent. per annum over the life of the contract. This, so far as I know, is the first time in the history of parliamentary publishing that such a deal has been offered. Perhaps I may add that I do not believe it very likely that such a deal would have been offered by a public-sector HMSO, although that is a matter of personal judgment.
I should also draw your Lordships' attention to the fact that the contract provides for the annual cuts in the charges that your Lordships' House pays to the Stationery Office. I am sure that we would all welcome that particular provision.

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Furthermore, the contract addresses the criteria raised by the Offices Committee. It provides for a comprehensive framework of accountability whereby named senior managers of the Stationery Office will be responsible to this House for all matters connected with the contract. It also provides for the continuation of the current emergency printing arrangements and allows this House to reclaim from the Stationery Office any extra costs incurred in their operation. Those are good examples of why counsel to the noble Lord the Chairman of Committees feels that the terms of the contract are both stringent and vigorous, and that there is a range of remedies up to and including termination of the contract in the event of unsatisfactory performance.
It might be worth noting that the short-listed bidders for HMSO recognised the strength of the contract. Indeed, one of them in particular wished to soften some of its provisions but has since been eliminated from the contest. The remainder have, however, stated their clear intention to agree and uphold the terms as drafted. That would clearly be in their interests because your Lordships would not be willing to modify those terms in any way, and I would certainly not suggest that your Lordships should contemplate such a step.
Your Lordships' House and, to a much greater extent as I have made clear, the other place represent arguably Her Majesty's Stationery Office's most important customers. Perhaps no sensible businessman would treat his most important customers and their wishes with anything other than the greatest respect. With respect, I would submit to your Lordships that we have here a proposal which meets and exceeds the safeguards requested by the Offices Committee. That is not my opinion, but it is a professional opinion which has hitherto been universally respected by your Lordships' House, and rightly so. The contract offers an unrivalled deal on pricing and costs and contains stringent terms in the highly unlikely event of unsatisfactory performance.
Perhaps I may add one other thing. I suggest that it would be somewhat perverse of this House not to agree to this contract, given the benefits on offer. Clearly, failure to agree would mean that we would still have to agree terms at a later date with someone, if we do not wish to set up in the publishing business ourselves, given that another place has accepted the terms of this contract. Any negotiations that we resumed with a privatised Stationery Office would be undertaken from a position of relatively greater weakness as compared with our present position. I would suggest that it is far better to secure the House's requirements in legally binding form now and share in the benefits of privatisation, which I know are not immediately apparent to all Members of your Lordships' House, but which I feel are clearly present. Therefore, I urge the House to endorse the contract.
Moved, That this House considers that the draft contract, which replaces the existing Supply and Services Agreement with HMSO, embodies the safeguards necessary to meet the requirements of the House for printing and publishing services.—(Viscount Cranborne.)
3.25 p.m.
Lord Richard: My Lords, perhaps I may say to the noble Viscount the Leader of the House that the benefits of privatisation of HMSO are not apparent to those on these Benches. I am not happy with the form of the contract. It is somewhat diffusely drafted, and there is far too much legislation almost by reference. You have to go from one clause to another clause to another clause to an appendix, and then from an appendix to a tender document to find out exactly what are the obligations. Having said that, I do not particularly like the form of the contract. Perhaps that is an aesthetic rather than a legal objection, but I have to say, looking at it as best I can, the obligations that the House was concerned to place on the prospective buyer of HMSO are sufficiently set out in the contract itself. I have no great dispute with the Government over the contract per se.
I wish to draw the attention of the House to what was said in the Offices Committee Report, which the noble Viscount the Leader of the House did not mention. That report said:
"Serious doubts were, however, expressed by some members of the Committee about the level of service which the House would receive under the contract".
We have also been reminded that European Community law does not permit the House to enter into an open-ended contract. The contract expires on 31st March 2000, subject to the possibility of earlier termination, and it is renewable for a further two years. At the end of that period the contract would have to be put out to competitive tender. If that is right, and I apprehend that it is, what we are talking about here is not a contract in perpetuity, but a contract for four years with a possible renewal of another two years, at the end of which the House and another place will have to reconsider the terms of the contract between whoever at that stage is running the Stationery Office and this House. I would be grateful if at some stage the noble Viscount could say something about that.
Of course the noble Viscount was very careful to avoid any discussion of privatisation as such. This is a privatisation too far. For the life of me, and I am doing the best I can with it, I really cannot see the purpose of this exercise. I do not see why on earth in the dying days of a dying government we have to go through this exercise. It would have been far better to have left HMSO as it was. Frankly, the House was reasonably satisfied with what it had.
3.28 p.m.
Lord Lester of Herne Hill: My Lords, I do not propose to say anything about privatisation; I wish to speak only about the contract before the House. I am grateful to the noble Viscount the Leader of the House for what he has just said, and, for that matter, to the staff for their dedicated efforts in producing what I regard as a contract containing effective safeguards of the public interest, subject to one or two points which I would like to raise in a moment.
Speaking entirely for myself, I am grateful to the noble Viscount the Leader of the House for his support for efforts to make Hansard and other

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parliamentary material available at marginal cost, or thereabouts, as happens in so many other Commonwealth and European countries. That must be in the interests of a healthy parliamentary democracy and in the interests of having an informed citizenry who are able to read what we say and do. Therefore, I am extremely glad that with Hansard and other parliamentary material—as I read the contract—being delivered free of charge over the Internet, it is proposed to reduce the price of printed material to no more than the marginal cost of distribution and sale. If that is right, I am extremely glad that that is so.
I raise three or four points for clarification. The first concerns the creation of a level playing field for the commercial distribution of the House's material in added value electronic form. There will, of course, be commercial publishing companies competing with the Stationery Office Limited in disseminating to the public parliamentary material in added value form. That will happen in addition to the publication of the House's material through the Internet by the Stationery Office Limited. It is therefore important to ensure that the Stationery Office Limited has no commercial or operational advantage over other publishers in creating added value services because of its "preferred supplier" status, in the words of the contract.
I should be grateful if the noble Viscount could assure the House that the Stationery Office Limited's added value operations will receive the House's material on exactly the same terms, including time of access, as all other electronic publishers. Those points are covered briefly in Clause 28 of what I call the electronic form contract. But the situation is not wholly clear, at least to me, although unlike the noble Lord, Lord Richard, I happen to think that by the normal standards of commercial drafting the contract is elegant and even concise. However, I must confess that it is not wholly clear to me. There are examples in other countries of monopoly publishers of official material abusing their position to give preference to their own commercial activities. It would therefore be helpful if it could be made clear that the core service activities—in the language of the contract—of the Stationery Office Limited under Clause 2 will include an express reference to the
"provision of those documents to any holder of a licence issued by or on behalf of the House".
Or, if that cannot be done because it is too late to amend the contractual language, can that point please be addressed in some other way?
My second point is about publication times for electronic material. Publication times are detailed in Schedule 1, Part 2 of the draft contract. I apologise to ordinary human beings in the House who do not have to read contractual language and construe it. As I am a lawyer I hope I shall be forgiven for what I am now doing. In the words of the contract,
"publication times assume normal timetables for supply of copy from the House for print production, thus allowing printer's text to be made available to meet electronic publishing schedules".
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That suggests to me that it is intended that the electronic version will be held up until printed copies are available. If that were right—I hope it is wrong—it would mean that new technology would be held back to the speed of the old technology. That would, with respect, be a timid and unsatisfactory approach which reminds me of the time when red flags went up before steam engines could advance along the railway track. It is inevitable that the full benefits of the speed of electronic publication will at some stage be permitted by your Lordships' House.
Lord Peston: My Lords, I hope I may interrupt the noble Lord because I am rather lost. Where in the contract does the electronic section appear?
Lord Lester of Herne Hill: My Lords, it appears in the electronic contract at Schedule 1, Part 2 of the contract entitled,
"Agreement for the electronic publication".
It was made available in the Library.
Lord Peston: My Lords, I interrupt the noble Lord for a second time to ask the noble Viscount the Leader of the House whether we are debating the electronic contract at all. I thought we were debating the other contract as it were. I am totally lost therefore as regards the electronic contract.
Viscount Cranborne: My Lords, as this is my Motion I am extremely sorry that I also find myself somewhat lost. As always I am hugely impressed by the expertise of the noble Lord, Lord Lester. I, too, thought we were debating what the noble Lord, Lord Peston, mentioned. However, I find the noble Lord's remarks of great interest to your Lordships' House. As always I am in the hands of the House but this is an important matter. I greatly sympathise as regards the parallel I believe the noble Lord drew of the red flag in front of an early motor car. Unless the House wishes to cut the noble Lord short, I think it would be worth while to listen to the conclusion of his remarks.
Lord Lester of Herne Hill: My Lords, I can be relied upon to get procedure wrong anywhere, especially in this House. However, I had thought that the draft contract which replaces the existing supply and services agreement with HMSO embodied two draft contracts which were made available to Members of the House. One deals with printed matter and the other deals with electronic matter. I have just one or two other points to make—
Lord Peston: My Lords, I interrupt the noble Lord a third time and apologise to him for doing so yet again. Like the noble Viscount the Leader of the House I am interested in what the noble Lord is saying. I think I am in agreement with him, but my problem is that I did not have the faintest idea that was what we were going to talk about. As someone quite obsessed with these electronic things I should like to have known about that so that I could debate the matter with the noble Lord.
Viscount Cranborne: My Lords, I apologise for intervening again. I think I was less than clear in my intervention in the noble Lord's speech. I am grateful to him for his patience as regards this double act between the noble Lord, Lord Peston, and myself. The draft contract to which I refer in my Motion is the agreement for printing, publishing and other services. There is another contract which I think is referred to in the Offices Committee Report which is not the subject of my Motion; namely, an agreement for the electronic publication and distribution of parliamentary material. Strictly that is not within the scope of the Motion. The House was quite right to listen with patience to the noble Lord, Lord Richard, when he referred to the principle of privatisation of HMSO. I am in the hands of the House as regards how much latitude the House will want to give to the noble Lord, Lord Lester.
Lord Lester of Herne Hill: My Lords, I shall be brief because I had almost finished my second point. I said that as regards publication times for electronic material, the time will surely come soon when the full benefits of the speed of electronic publication will be permitted by the House. I believe that is the position in both Houses of the Australian Parliament. As the electronic version will in practice be ready but under embargo—as I read the contracts—for a period before the printed version is available, there is scope for leaks and privileged access which I do not favour. Perhaps I can say in my defence that it is difficult to look at the print contract and turn a blind eye to the electronic contract because the two impact upon each other and have repercussive implications.
I refer to a related point. In the report of the committee of another place on access to that House's information it was suggested that Members of that House would receive information before non-Members; that is, before members of the public and the media. Speaking of this House, it is surely essential that the general rule under both these contracts should be that Members of this House—and I dare say of another—should have access to parliamentary material at the same time as the public and the media. I realise that there may have to be specific occasions where that is inappropriate, but the general rule should surely be one of simultaneity. There are many reasons why that should be the case including those of investor protection. Parliamentary material will sometimes have implications for investors. Members of this House and members of the staff of this House may be investors. There would be clear dangers in Members of either House enjoying a timing benefit over other investors.
The best principles developed in the financial services industry require simultaneous disclosure of information to all. The draft agreement seems to be silent on that point. I should therefore be most grateful if the noble Viscount would clarify whether Members of this House—and for that matter the staff of this House—would enjoy a timing advantage, and, if so, how the dangers to which I have referred would be dealt with.
I can deal with the last point in a sentence. I refer to judgments of the Appellate Committee of this House. From the contracts I do not understand whether it is
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envisaged that the judgments will be disseminated electronically as soon as they are available. I deprecate the selling of the judgments of the Appellate Committee, as has happened in recent times. I very much hope that they can be put on the Internet and made freely available to the public, who are always agog to read the decisions of Lords of Appeal in Ordinary, if possible without charge. I am most grateful to have been permitted to make these points on the other contract.
3.41 p.m.
Lord Monkswell: My Lords, we are all indebted to the noble Viscount the Lord Privy Seal for introducing the debate, even though it transpired that it is only half the introduction needed following the contribution of the noble Lord, Lord Lester of Herne Hill.
One of the first remarks that I noted from the noble Viscount the Lord Privy Seal was that advice from the counsel to the Chairman of Committees was important. That will be the theme of my contribution. The result of the contract will be that instead of the Clerk of the Parliaments being in control of the printing, publication and dissemination of our proceedings—making them available to Members of your Lordships' House—control will move from the Clerk of the Parliaments to the counsel to the Chairman of Committees. In effect we are surrendering control from ourselves to the Law Courts. I refer noble Lords to Clause 28.8 under the heading, "Governing Law and Jurisdiction". It states:
"This Agreement shall be governed by and construed in accordance with the laws of England and the parties hereby submit to the exclusive jurisdiction of the English Courts".
One of the advantages of what might be described as a direct labour organisation is that in the main disputes do not end up in the courts. But it is worth considering some further remarks made by the noble Viscount the Lord Privy Seal. He reported to us that the financial value of the contract was something like £2.5 million for our proceedings and £12.5 million for the proceedings of another place. That gives a contract value of about £15 million. I suspect that the turnover of Her Majesty's Stationery Office is in excess of that to a quite large degree. From the point of view of contractual arrangements, the printing and publishing of our proceedings are a small part of the operations of the Stationery Office. The noble Viscount the Lord Privy Seal reported that the printing and publication of our proceedings were the most important part of the Stationery Office's operations. Members of this House and another place would agree that that is currently the situation.
I was rather curious to hear the noble Viscount report that the price cuts offered under the contract would not be possible under the continued operation of the Stationery Office as a direct labour organisation. If price cuts can be achieved in the private sector which cannot be achieved if the body is run by this Government, it suggests to me that the Government are not good managers of business.
The noble Viscount also reported that while we were in a strong position now to write this contract—other noble Lords have suggested that it is a tight contract which provides all the safeguards needed—in future

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negotiations we shall be operating from a position of weakness. I believe that that is probably a quite realistic assessment of the situation. The current financial operations—the costs, if I may so put it—of producing the deliberations of this place and another place are a relatively small part, I suggest, of the Stationery Office's operations. Therefore in future we shall not be in a position of strength when negotiating with a commercial operation only a small part of whose business is connected directly with us.
I have referred to the fact that the very existence of the contract shifts control from the Clerk of the Parliaments to the lawyers. It is also worth noting—it was referred to by my noble friends Lord Richard and Lord Bruce of Donington—that once we go down this road of privatisation the situation will be taken out of our hands. Initially, control will be in the hands of the English courts, but within a relatively short space of time in the timescale of parliamentary proceedings it will end up in the jurisdiction of the European Union. The contract will have to be put out to competitive tender. In effect that means that the contract is offered to anyone within the European Union to fulfil.
It is one thing to allow our proceedings to be subject to the control of the English courts and English lawyers. It is quite another to allow the control of our proceedings to pass beyond that to a company which may not even be constituted within the English jurisdiction.
We have to ask two further questions. How far will privatisation go? During Starred Questions recently a noble Lord suggested that any direct labour organisation was fundamentally wrong. Does that extend to the Armed Forces of the Crown? That is the logic of the Government's position. They will continue to privatise until eventually nothing is left. Have they already had expressions of interest from rich Americans to buy the Palace of Westminster on a leaseback arrangement? That is the logic of the Government's position in continuing down the road of privatisation.
My final question for the noble Viscount the Lord Privy Seal is this. How difficult will it be to repatriate (if I may so put it) the printing and publishing of our proceedings to our direct control? How easy will it be to take back control of our own proceedings? I hope that the noble Viscount the Lord Privy Seal can answer that question. I suspect that he may not be able to do so.
Lord Ampthill: My Lords, before the noble Lord sits down will he help us by explaining why he believes that the control of our affairs has passed from the Clerk of the Parliaments into the hands of, he says, "the lawyers", purely because the noble Viscount the Leader of the House has chosen to accept advice from the counsel to the Chairman of Committees, who happens to have been a servant of this House for 20 years or more and is one of the most brilliant lawyers whom we are extremely fortunate to have at our disposal? Why should that mean that we are presenting all our affairs into the hands of, he says, "the lawyers"? Can he answer that?
Lord Monkswell: My Lords, yes, I think I can. Before I do so, I preface my remarks by saying that
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I have the utmost regard for the counsel to the Chairman of Committees and his integrity not only as a lawyer but as a servant of this House. I hope that any of my remarks which may have given a different impression will be struck out.
I suggest that the control of the printing and publishing of our proceedings will be surrendered from the Clerk of the Parliaments to the lawyers and the Law Courts because of the paragraph in the contract that I read out. On page 28 of the report, Clause 28.8 headed "Governing Law and Jurisdiction" states:
"This Agreement shall be governed by and construed in accordance with the laws of England and the parties hereby submit to the exclusive jurisdiction of the English courts".
We have heard from the noble Lord, Lord Lester of Herne Hill, that there are large question marks about how the electronic contract will be interpreted. I suspect that at the end of the day it will have to be interpreted by the courts. That is why I suggested that we are surrendering control of the publication and printing of our proceedings from ourselves and our servants to the jurisdiction of the courts. That is my interpretation of the draft contract. If the noble Lord the Lord Privy Seal has a different interpretation and can argue that the contract cannot be tested in an English court but will be subject to variation and determination by the Clerk of the Parliaments at will, that is a rather curious situation.
I hope that I have not detained the House too long.
3.52 p.m.
Lord Renton: My Lords, I did not put my name down to speak in this debate because, owing to my attendance at a meeting upstairs, I did not think I should be able to do so. I find I am free to speak and I have listened to the whole of this debate except for the first few minutes of the speech of my noble friend the Lord Privy Seal.
I am broadly in favour of what the Government propose but I should be glad of an assurance with regard to reports for which there is still a demand but which are no longer in print. I mention the report of the Committee on the Preparation of Legislation, which will be familiar to the noble Lord, Lord Richard, because he was a member of the committee. The report has twice been reprinted. My noble and learned friend Lord Hailsham described it when he was Lord Chancellor as a best seller. It has been a best seller almost continuously and is still in demand, not only in this country but in the Commonwealth, and indeed in the European Community where it is sometimes used.
We were told last year that such reports, of which there is no longer a supply available, could be provided by photocopying and charged for at a flat rate which was then—and I hope still is—£5 per copy, whatever the original or current price of the report may be. That is a service of great value provided by Her Majesty's Stationery Office. One wonders whether that arrangement will continue when the service is run on a commercial basis. There are many other reports like the one I mentioned which were published a good many years ago to which we need to have access in order to perform our parliamentary duties. It would be a great

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pity if those reports were either made prohibitive in price in order to make them commercially viable or not produced at all.
I am afraid I have not given notice of this matter to my noble friend the Lord Privy Seal. If he were able to give some indication of what is likely to happen, that would be a great help. If he cannot answer my question now, I should be grateful if the matter could be put on record, perhaps by a Question for Written Answer when we reassemble in October.
3.56 p.m.
Lord Bruce of Donington: My Lords, I rise with the indulgence of the House following the indication by the noble Viscount the Lord Privy Seal that he would give an answer to the question I asked during the earlier proceedings on the Offices Committee report relating to the role of the EC in this matter. Can he say whether, if the question of privatisation had not arisen at all and the arrangement had been left exactly as it is now, the European Community would have any right to insist on its rules being enforced in regard to competition. Is it only because of the privatisation that the Commission now has a right under the competition laws to insist that the next contract be put out to open tender?
I apologise to the House for rising in the interval.
3.57 p.m.
Lord Wallace of Saltaire: My Lords, I am tempted to follow the noble Lord, Lord Monkswell, in suggesting what one might do in selling off part of the services of this House to various private enterprises. I was thinking, as he spoke, of the contract we might let out for the Line of Route and whether Centerparcs would counter-bid against Walt Disney for it, but that is perhaps delving into the future of the role of privatisation.
Given the position we have reached, it seems to me that this is in many ways a very satisfactory contract. I congratulate those concerned on the fact that they have negotiated a lowering of prices. We all share the strongest interest in the widest possible public dissemination of Parliament in debate and report to British citizens at the lowest possible cost. If we achieve that, it will be a major step forward.
I support my noble friend Lord Lester in underlining that the speed at which the nature of publishing is changing suggests that in future the electronic dimension will become increasingly important. That is something which will clearly need to be looked at further as more and more of the younger generation automatically turn to the Internet to receive information. They will want access to parliamentary reports and parliamentary business.
My wider concerns are partly the question of conflicts of interest and partly the whole question of a private monopoly. The noble Viscount the Lord Privy Seal underlined the point made in the report of the Offices Committee that the two Houses themselves are the Stationery Office's most important customers. We are moving from a public service to a licensed private monopoly, back to the world of the 18th century when a sovereign Parliament dealt with contractors of one sort or
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another, contracting to provide regiments in some cases, printing services in others. It seems sadly poetic that it was Edmund Burke who was responsible for the Act that set up Her Majesty's Stationery Office and that a party which has lost touch with the traditions of Edmund Burke should now be the one proposing to privatise it. As I listened to the noble Viscount I wondered what the great Lord Salisbury would have said about a proposal to privatise the Queen's printer or what Disraeli or indeed Churchill would have said. I have little doubt that they would have called it ludicrous.
There are questions about commercial enterprise and public interest which go further than my noble friend Lord Lester suggested. Ought we to have written into the contract that the commercial enterprise which operates this private monopoly should, as a condition of acceptance, not be allowed to contribute from its funds to any particular political party? There is a real conflict of interest. Given the current state of British law on publication of party accounts, it seems to me that we should consider strengthening controls. It is part of the morass one gets into when one loses sight of the difference between public enterprise, public service and private monopoly.
Having spoken those cautionary words, I believe that the contract as negotiated within those terms is a good one. It is also highly desirable—and here I differ from the noble Lord, Lord Bruce—that it is a short-term contract. We will therefore have the opportunity to find out within a limited time whether it has lived up to our expectations.
4 p.m.
Viscount Cranborne: My Lords, given how controversial the matter is, I am extremely grateful to noble Lords who have spoken for their moderate and constructive attitude. That is a heartfelt expression of my feelings. I shall try to answer questions as briefly as I can.
I say to the noble Lord, Lord Wallace, that I shall return to what my great-great-grandfather might have said in a moment. The proposal to privatise the Queen's printer is not what is at stake here. As I am sure the noble Lord is aware, the Queen's printer will be retained in the public sector in the so-called residual HMSO. So technically that is not what we are doing and it is important that there should be a place for the copyright still to reside, and for there to be, in the jargon, an intelligent customer for it.
The whole House is well aware of the service which my noble friend Lord Renton and his colleagues provided not only to this House but to Parliament as a whole by the publication of his report. I believe that the report is under Crown copyright, but he will correct me if I am wrong. The privatised Stationery Office, like HMSO at present, will reprint documents when there is a continuing demand for them. Thereafter, I am advised that the photocopying service from the British Library will continue to be offered. If my noble friend Lord Renton has difficulty with the effectiveness of the service—and from the tone of his remarks I detect that he may—it might be worth considering the developing electronic services.

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The noble Lord, Lord Lester, drew our attention to those services, despite their being technically outside the scope of the debate. We can ascertain, as they develop, whether the benefits of the new technology can help us make more readily available not only future reports, existing reports and papers but also reports like that of my noble friend which are of continuing interest to your Lordships' House.
My right honourable friend the Prime Minister made it clear that he was sympathetic to the ideas expressed from all sides of your Lordships' House, particularly over the past two years, that we should try to improve the preparation and control of legislation. I hope that my noble friend Lord Renton will continue to keep a watching brief on this important question. Perhaps the Offices Committee, in its monitoring of the implementation of the electronic aspect of the subject that we are debating, might wish to return to find out whether we could build on our initial foray onto the Internet. We could try to ensure that the services we offer are not only as good as they are at the moment but are radically improved.
The noble Lord, Lord Bruce, asked a question and I should have been greatly disappointed if he had not managed to bring the European Union into our debate. Needless to say, I should not have worried. European Union law would apply, as it does in all cases in this country, to the extent that powers have been delegated by this sovereign Parliament to the European Union. But where services are provided within the same legal entity, I am advised that they would not have applied if we had not privatised HMSO. I am also advised that this House and HMSO, while it is in the public sector, would be considered to be one legal entity. That explains why the answer to the noble Lord's question is the one that I have just given.
The extent of EC procurement jurisdiction was the subsidiary point that the noble Lord made in an earlier intervention to the noble Lord the Chairman of Committees. I am also advised that directives under the EC treaties set out a legal framework to which public authorities and utilities must adapt their contract award procedures. The directives have been implemented in the United Kingdom by four sets of regulations covering supplies, works, services and utilities. The contracts which are covered must be the subject of a call for competition in the official journal of the European Union. The directives do not apply to the award of service concession contracts. The noble Lord, Lord Monkswell, was also concerned—
Lord Richard: My Lords, before the noble Viscount leaves that point, does it mean that, as some of us apprehend, the contract is for four years, possibly another two, and thereafter it must be put out to competitive tender? Is that its effect?
Viscount Cranborne: My Lords, legal advice on European Community law was that the contract should, so far as possible, reflect the existing supply and service agreement, including the term of the contract. As I understand it—and the noble Lord will be more aware
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of EC law than I—the law is clear that such contracts must have a term and must therefore be re-negotiated at the end of that term.
The noble Lord, Lord Monkswell, mentioned the impact of the European Union. The contract is for the House to offer. The only impact of European Union law is in terms of the need to tender competitively. That need will be subject to the precise terms of the contract and whether it falls within the regulations of public service contracts, which I have already tried to set out for your Lordships.
The noble Lord, Lord Lester, asked a number of questions which I shall endeavour to answer as best I can. He mentioned a level playing field. I refer him to my right honourable friend the Chancellor of the Duchy of Lancaster who discussed the matter earlier this year in another place. The Stationery Office will be required to be licensed to reproduce Crown and parliamentary copyright material in a value added format, in exactly the same way as any other publisher. It will have no inherent advantage at all in the field. I hope that that satisfies noble Lords. We have that on record in both Houses.
As we made clear in the course of exchanges during the remarks of the noble Lord, Lord Lester, I should emphasise that the electronic contract is a different contract. Apart from specifically requiring a level playing field, electronic publication will follow paper publication. As I understand it, it is a transitional arrangement designed to protect the rights of Peers; that is, of your Lordships. But it is assumed that the order of publication will be reversed in due course, as I believe it has been in Australia. The general rule about the time of publication is that parliamentary papers should not be available to the public before they are available to Members of your Lordships' House. I am sure that your Lordships would wish to maintain that situation and in that respect nothing has changed.
Therefore, the timing of release of the electronic version is a practical rather than a policy matter. At the moment, the assembly of data for electronic publication is a by-product of the printing process. We do not wish to introduce any delay into electronic publication.
The noble Lord, Lord Lester, also mentioned judgments. My advice is that they are not at the moment printed by Her Majesty's Stationery Office, nor are they the subject of the contract. They are not parliamentary papers as such, but are circulated by the Judicial Office on the authority of the Lord Chancellor. They are therefore subsequently published in the All England Law Reports. I confess that I cannot speak nearly as authoritatively on that point as the noble Lord, but that is the advice that I have been given.
Lord Renton: My Lords, I thank my noble friend for giving way. Surely the judgments are also published in the official reports which, as I understand it, have always been published at public expense.
Viscount Cranborne: My Lords, I am the last to want to enter into a jousting competition with two such distinguished barristers. May I take further advice on

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this point and write to both noble Lords? I will place my answer in the Library. I apologise that I am unable to give an authoritative answer.
The noble Lord, Lord Monkswell, talked about taking functions back into the control of this House. I submit that the House has never had such control, even under the present arrangements. Her Majesty's Stationery Office is a department of Her Majesty's Government, not of this House. In order to satisfy the criteria that the noble Lord seems to want this House to have, your Lordships would have to acquire and operate your own facilities.
The noble Lord also talked about control of the contract and referred to the last section, paragraph 28.8. The ability to go to law in a dispute is a backstop which offers additional protection to the current situation. The normal operation of the contract will be a partnership between the House and the Stationery Office, as it now is between the House and HMSO. My limited knowledge of legal matters tells me that it is usual to specify under which law of which country a contract is to operate. Therefore for us not to specify that, or to specify that it would operate under the law of another country, would be rather perverse.
Lord Monkswell: My Lords, I thank the noble Viscount the Lord Privy Seal for giving way. I admit that I may not have expressed myself very well in my earlier intervention. The point I was trying to make was that, as I understand the situation at the moment, the Clerk of the Parliaments, presumably together with the Serjeant at Arms in the other place, could have direct discussions with the controller of Her Majesty's Stationery Office to resolve any problems that might arise. Ultimately the outcome would be a government decision, given, as the noble Viscount said, it is a department of government. The difference between the situation that I understand currently pertains and the situation once we have entered into a contract with the private supplier, is that any disputes that might arise in future would not be amenable to discussion through what might be described as the usual channels and government decision ultimately answerable to Parliament; any disputes arising would have to go before a court of law for resolution.
Viscount Cranborne: My Lords, I refer the noble Lord particularly to the third section of the contract, which sets out very clearly the relationship between an accountable manager and the authorised officer of this House who is charged by the House to maintain the very sort of contact which the noble Lord wishes us to maintain. I hope that if he takes another look at those provisions he will feel that they have been rather more fully set out than they are at present.
I would never dream of intervening in a technical discussion as to the elegance or otherwise of this contract. However, I was amused to note that so distinguished a barrister as the noble Lord, Lord Richard, felt that the contract was not couched in the most elegant form, while the noble Lord, Lord Lester, took a contrary view. I leave it to the House to make its own aesthetic judgment in matters of this kind.
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Finally—I am well aware that I have taken rather a long time—I have endeavoured to answer, I hope reasonably adequately, the serious matters raised by a number of noble Lords. Fundamentally we are talking about something rather straightforward. As privatisation approaches, it is essential that this House should make satisfactory arrangements for the future provision of printing and publishing. It is important that those arrangements should safeguard the high standards of service that we have enjoyed from HMSO in recent years. As I said in opening, this draft contract does all that, and more.
The noble Lord, Lord Richard, tempted me just a little. We have already debated the merits or otherwise of privatisation. We did so at some length in January this year. I see little point in rehearsing the arguments now, particularly since there has been very strong interest on the part of bidders inquiring into the business. It is clear that the Stationery Office and its staff have a sound and prosperous future in the private sector. On those grounds alone it would be very unwise to seek to forestall this contract at a very late stage.
The noble Lord, Lord Wallace, who is an infinitely more distinguished historian than I, was kind enough to refer to my great, great grandfather. He was a pragmatist. He was also an extremely successful businessman. The noble Lord, Lord Wallace, with his knowledge of the commercial world, will also be aware of what happens to commercial companies which once enjoyed a monopoly, as HMSO did, when that monopoly disappears and they are not allowed to try to expand their markets into other fields. One of the penalties has been that the number employed by HMSO has declined distressingly. As government departments fish elsewhere in order to satisfy their requirements for stationery and other matters, HMSO, if it finds itself unable to compete, may preserve the virtues of public service but in the end will find itself declining ever more distressingly and more jobs will be lost. I suggest that the great Lord Salisbury would have been swayed by that argument rather more than by the ideological purity of the noble Lord, Lord Wallace.
Maintaining HMSO in government ownership can only lead to further decline as private sector competitors take an increasing share of that diminishing market. That also begins to answer the question raised by the noble Lord, Lord Monkswell, who asked whether it would have been possible to decrease the prices of printed papers published by HMSO if it remained in the public sector. A company in that kind of trouble would find it difficult to reduce prices and still remain viable.
This House should be under no illusions as to the consequences of failing to sign this contract. I have tried to make that perfectly clear. I hope that your Lordships will agree with me that the sensible course is to agree to the Motion standing in my name.
Lord Peston: My Lords, before the noble Viscount sits down, can he clarify one point? I am very sorry; he used the word "finally", which I felt was the right word to use. It is not impossible that the privatisation will take place at some time during the summer, when the House is not sitting. Although he used the words "draft

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contract", I take it that he is saying that it will be this precise contract that will be signed, and were there to be any variation in it, the Government would not go ahead until the House had seen any changes. I take it that our debate has taken place exactly on that understanding. However, it may be useful to state that precisely.
Viscount Cranborne: My Lords, that is my clear understanding. I am also well aware that the noble Lord is a very reasonable man. If there are matters of wording which could be improved, I am sure that he would not let that stricture apply. If it is a matter of substance, I am sure that the whole House will agree that his caveat is a sensible one.
On Question, Motion agreed to.

Consolidated Fund (Appropriation) Bill
Brought from the Commons; read a first time.
4.18 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.— (Lord Mackay of Ardbrecknish.)
Lord Eatwell: My Lords, on many occasions in the past at this juncture the noble Lord, Lord Boyd-Carpenter, has risen to object to the fact that we do not have the opportunity to debate the Consolidated Fund. His case has been clear. He has argued that the lack of such a debate deprives your Lordships of a chance to consider the scale, structure and content of government expenditure in the round, so to speak—an opportunity which is not provided when discussing specific measures. The usual reply to the noble Lord has been that it is not customary and appropriate to have a debate at this juncture. In this instance, I agree with the Government. However, I should like to make a proposal to ease the frustrations of the noble Lord, Lord Boyd-Carpenter, and other noble Lords about the inability of the House to hold a broad debate on government expenditure.
Noble Lords will remember that last year, on a Motion by the Labour Group introduced by my noble friend Lord Desai the day after the Budget, noble Lords had an opportunity to discuss the matter. Noble Lords will be aware that nowadays the unified Budget consists of proposals for tax-raising powers and general consideration of government expenditure. The debate introduced by my noble friend proved very popular, even though it took place just a few days following the economic section of the Queen's Speech. Twenty-three noble Lords took part. A number of very interesting and constructive speeches were made from all sides.
My proposal is that the Government should consider whether it would be appropriate for the House annually to debate the Budget as a matter of custom on the day after
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the Budget. Noble Lords would then have the opportunity to have a broad debate on government expenditure and to contribute ideas on government expenditure and taxation, as they did so successfully last year. Such a debate would not be left simply to the whims of the parliamentary timetable and Opposition parties using up their time to provide noble Lords with that opportunity. I put that proposal to the Government for consideration.
Lord Boyd-Carpenter: My Lords, I am very much indebted to the noble Lord opposite for involving me in this discussion. I share his views to a considerable extent. The Consolidated Fund Bill is probably the most important—or at least the second most important—measure with which your Lordships' House has to deal. Simply to pass it on the nod without arranging for an alternative opportunity to discuss the whole Budget, or the general level of expenditure and the proposals for expenditure, seems to me to be abandoning one of the duties of this House. I say to my noble friend the Leader of the House that I hope the Government will arrange for that at or about the time of the Budget. I hope that, in the context of the House not having debated the Consolidated Fund Bill, a full-scale economic debate will be arranged but—I say with very great enthusiasm—not on a Friday.
Lord Harris of Greenwich: My Lords, I do not have any difficulty with the proposal of the noble Lord, Lord Eatwell. This House would probably find it helpful to have such a debate on the Budget soon after the Budget Statement in the House of Commons. With regard to the general question of debate on the Consolidated Fund Bill, the noble Lord, Lord Boyd-Carpenter, will be aware that this matter has been discussed many times by the Procedure Committee. It was unanimously decided by that committee that it would not be appropriate to have a general economic debate on the occasion of the passage of the Consolidated Fund Bill. Therefore, I have no difficulty with the proposal of the noble Lord, Lord Eatwell, but I would have very substantial difficulty with regard to the Consolidated Fund Bill.
Lord Boyd-Carpenter: My Lords, I believe that the noble Lord has somewhat misunderstood the point that I tried to make. No doubt that is my fault and not his. I tried to say that, in view of the importance of the Consolidated Fund Bill—which is beyond dispute—linked with it there ought to be an opportunity for this House to have a general economic debate as of right and it should not depend on whether or not the Procedure Committee had found that convenient.
Lord Brabazon of Tara: My Lords, the noble Lord, Lord Harris of Greenwich, said that the Procedure Committee had discussed this matter on innumerable occasions. As a Member of the Procedure Committee, I endorse that. I add only that the report of the Procedure Committee on all of those occasions has been wholeheartedly endorsed by the House.
Lord Mackay of Ardbrecknish: My Lords, I thought that I was going to get away with not having

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to intervene at all, other than by uttering the words to allow the Bill to proceed through your Lordships' House. I believe that my noble friend Lord Boyd-Carpenter has almost accepted that we will not discuss the Consolidated Fund Bill and that the suggestion of the noble Lord, Lord Eatwell, ought to be considered. I remember with some pleasure the debate on the economy introduced by the noble Lord, Lord Desai. If the noble Lord is again lucky and manages to arrange a debate on the day after the Budget, I look forward to standing at this Dispatch Box and defending the Budget, but whether or not we have that debate is more a matter for the usual channels than for me. I shall pass on the comments that have just been made by my noble friends and the noble Lords, Lord Eatwell and Lord Harris of Greenwich, to the Lord Privy Seal and the Captain of the Gentlemen-at-Arms.
Lord Monkswell: My Lords, before the noble Lord sits down perhaps he will have the courtesy of replying to the question posed by his noble friend Lord Boyd-Carpenter. His noble friend suggested, quite sensibly, that at this time of year there was a need to debate the general economic situation of the country, bearing in mind that in terms of the parliamentary timetable it is only relatively recently that the unified Budget has been moved from April to November. I hope that the Minister has some sympathetic words for, if not complete acceptance of, the suggestion by the noble Lord, Lord Boyd-Carpenter, that there should be a major economic debate at about this time of year.
Lord Mackay of Ardbrecknish: My Lords, I am always grateful to the noble Lord, Lord Monkswell, for pulling me up when I do not answer absolutely every question. I thought that I had covered the ground fairly well. I believe that the Commons do not debate this particular Bill. As two noble Lords who are Members of the Procedure Committee have made clear, this ground has been tilled so often that I doubt whether a plough would find a piece of firm soil into which to bite. I am equally certain that your Lordships' House, if not the rest of the world, will be more than delighted to hear the views of the noble Lord, Lord Monkswell on the economy. But I believe that that is a quite different issue. I will do as I have said and draw the attention of my noble friends to the exchanges that we have had.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order 44 having been dispensed with (pursuant to Resolution of 18th July), Bill read a third time, and passed.

Housing Bill
4.28 p.m.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered. —(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT TO A LORDS AMENDMENT AND COMMONS AMENDMENTS IN LIEU OF CERTAIN OTHER LORDS AMENDMENTS
LORDS AMENDMENT
102 Clause 79, page 53, line 36, leave out from ("securing") to end of line 39 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 Commons disagreed to the above amendment but propose the following amendments in lieu—
102A Page 53, line 35, leave out from first "order" to end of line 39 and insert "subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.".
>102B Page 54, line 6, leave out "which, unless the order" and insert—
"( ) No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it".
Lord Lucas: My Lords, I beg to move that the House do not insist on their Amendment No. 102 to which the Commons have disagreed and do agree with the Commons in their Amendments Nos. 102A, and 102B in lieu thereof. I should like to speak also to Amendments Nos. 114, 114A and 114B, and Amendments Nos. 286, 286A and 286B.
The debate we had on leasehold valuation tribunal fees at Third Reading was an immensely valuable one. Many important and telling points were made. We also had before us a wide range of options about what the precise level of fees should be. In the event it was decided that in relation to the procedures for dealing with unreasonable service charges the tribunal should charge a fee no higher than for comparable cases in the county court; that is to say, of the order of £120.
When noble Lords' amendments were considered in another place, government amendments were accepted which provided that the fee for each case in both of these procedures should not exceed £500. We are therefore faced with the choice between the amendments passed in this House at Third Reading or those passed in another place.
The measures in this Bill are designed to help leaseholders challenge the unreasonable actions of a number of unscrupulous landlords. A particular problem that leaseholders face under existing procedures is that when they attempt to challenge unreasonable service charges in the county court they can be faced with protracted and potentially very expensive litigation. That is because, although the county court fees are relatively low, leaseholders can be exposed to the potential risk of paying the costs of both sides if they lose. Even for a case of average complexity, those costs could be as much as £6,000.
That is why we proposed switching the jurisdiction for those cases to the tribunal. The advantages of access to the leasehold valuation tribunal are considerable. The

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tribunals have quicker and less formal procedures than the courts, and there is no need for parties to have full legal representation. The tribunal itself will include a professional surveyor who is qualified to assess the technical arguments which are likely to arise. Also, tribunals cannot award costs to either party so the exposure of the leaseholder to the risk of costs will be much reduced.
In the light of those considerations, and in particular the very considerable advantages for the leaseholder in gaining access to the tribunals, we need to consider what level of fee it is reasonable for an applicant to pay. We believe that a maximum fee of £500 is about the right level. First, in relation to the likely level of costs of providing the service, which is expected to be about £2,000 per day, we expect the average case to last around one day. Secondly, we need to set the fee at a level which will discourage minor disputes, for which this service is not really intended, and also deter applications of a frivolous nature.
Thirdly, we believe that a maximum fee of £500 represents a practicable and affordable amount. The precise fee structure has not yet been worked out and will be subject to wide consultation before this section is commenced. However, I have already indicated that we intend to passport an existing means-testing regime such that, if the applicant qualifies under that regime, the fees will be remitted either in whole or in part.
My noble friend Lord Kinnoull will be familiar with the idea of a £500 limit on the level of fees as he proposed a very similar amendment at Third Reading. The reason I gave then for not accepting his amendment was that it would not be feasible to place a fixed limit of a cash amount on the face of the Bill without an order-making power to adjust that amount in the light of inflation. Our amendments now provide for that, subject to the affirmative resolution procedure.
In speaking to the amendments in another place my honourable friend the Minister indicated that the purpose of the order-making power was to make adjustments in the usual way from time to time to reflect cost changes. Of course, following the recommendations of the noble and learned Lord, Lord Woolf, and if my noble and learned friend the Lord Chancellor decided to pursue a total revision of fees for courts, then that might provide an additional reason to use this power. Any proposals for such a major change would need to be fully discussed at the time and would, I suspect, require changes to the primary legislation.
The noble and learned Lord, Lord Archer, also privately pressed me on how often we might seek to make adjustments using the order-making power. He suggested that a five-year period might be appropriate. Clearly, that would depend on movements in the rate of inflation. But I would tend to agree that on the basis of the current situation the period he suggests does not seem unreasonable. We would certainly not envisage making annual adjustments.
The noble Viscount, Lord Bledisloe—who I am delighted to see is present today to celebrate his previous triumphs—also raised a number of concerns on
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which I can offer some comfort. First, the Bill is now full-cost-recovery free. Secondly, I can clarify that the provision provides a fee to be paid for each application, and if the application is a joint one made by a number of tenants in a block of flats, then only one fee subject to the limit of £500 will be required. I can also state that in the procedure dealing with service charge disputes one application can cover all items which make up the total service charge. That service charge could span a number of years and could cover, for example, insurance premiums, repairs to the roof and charges for the maintenance of the garden. Even where all those items are disputed, only one fee, subject to the £500 maximum, will be payable.
I can also offer a further reassurance. My honourable friend the Minister undertook in another place, when considering the Lords amendments to the Bill, that we will seek to construct a scale of charges which offers a degree of certainty to the applicant before the case starts. That means that we will not seek to charge a fee relating to the length of the cases before the tribunal. He also undertook to examine the feasibility of designing a sliding scale of fees relating to the value of the disputed sums involved.
Our proposals are intended to provide leaseholders with a real opportunity for effective justice at an affordable price. I believe that the proposals relating to the fees chargeable by a tribunal to deal both with service charge disputes and the appointment of a manager, and offering a maximum limit of £500 will indeed deliver just that. I commend the Commons amendments to the House.
Moved, That the House do not insist on their Amendment No. 102 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 102A and 102B in lieu thereof. — (Lord Lucas.)
Viscount Bledisloe: My Lords, on a personal level perhaps I can thank the noble Lord, Lord Lucas, for the considerable trouble he has taken in discussing this matter with me and the courtesy he showed in so doing. As the noble Lord explained to the House, the provision seeks to alter the amendments your Lordships passed last week in the sense that the ceiling on the fees will not now be the approximate £120 they would have been in the county court but the £500 set out in the amendment agreed by another place. Obviously we regret the increase but we are very much reassured by the various promises made by the noble Lord as to the fact that it will be a sliding scale and a completely all-in fee.
In my view the benefit behind the amendment, like the amendment your Lordships accepted last time, is that it entirely abolishes any reference to a fees charge being sufficient to meet the entire costs of providing a service and it is therefore merely a question on a purely practical level of whether the maximum shall be £500 or whether the standard shall be £120. I venture to believe that the many noble Lords who kindly and energetically supported the amendment last time, both in speaking and in the Division Lobby, were concerned much more with the principle of not having full-cost

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justice than with the precise level of fees. For my part I am content not to oppose the Motion so ably and charmingly moved by the noble Lord, Lord Lucas.
Lord Archer of Sandwell: My Lords, perhaps I may advert specifically to Amendments Nos. 102A and 102B. I can think of many reasons for opposing this Motion. First, I believe that the community should provide the machinery of justice at community expense and that the cost ought not to fall on those who need to resort to the legal system in quest of justice.
Secondly, even if that principle is discarded in relation to the courts, there is a distinction between courts and tribunals. It is one of the distinguishing and important characteristics of tribunals that they provide justice for those who can receive justice only if it is provided without serious financial implications.
Thirdly, even if that process is breached, I believe, as the noble Lord, Lord Lucas, indicated in his introduction, that it should be enunciated clearly that there should be full consultation; that there should be debates in Parliament; and that it should not be introduced in a Bill on a different subject relating to part of the jurisdiction of one tribunal. Fourthly, I believe that those least able to afford the fees should be fully protected. For the avoidance of doubt, I do not resile from any of those reasons.
Like the noble Viscount, Lord Bledisloe, I believe that there are two reasons for supporting the Motion. First, where the two Houses have the misfortune to disagree, I believe that each should be prepared to make some effort to secure an accommodation. In the other place, there has been some movement since the initial proposal in the Bill. Secondly, I believe that the proposal now on offer is less draconian and potentially less unjust than the initial proposal in the Bill. As for what the noble Lord said about the intention of making use of the power to change the amount of £500, I think that that fell somewhat short of an undertaking that the amount would not be changed within five years, but I think that I detected an indication in good faith that, other things being equal, there was no intention to alter it within a period of five years—and five years is a long time in politics.
Accordingly, like the noble Viscount, Lord Bledisloe, I would not seek today to dissuade your Lordships from approving the Motion. Perhaps I may add that I am extremely grateful for the generous support that I received from noble Lords in all parts of the House. Lastly, I too express my appreciation of the unfailing courtesy and good humour of the noble Lord, Lord Lucas, throughout our debates.
The Earl of Kinnoull: My Lords, I welcome the Commons amendment and the measured arguments put forward by my noble friend. I congratulate him on his success in meeting the powerful arguments that were put forward both at Report and Third Reading, particularly by the noble and learned Lord, Lord Archer, and the noble Viscount, Lord Bledisloe, as well as many other noble Lords. Indeed, the House carried that amendment.
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I am sure that the amendment will be welcomed by the very large number of professional bodies which are concerned about the issue and that the future leasehold valuation tribunal should work; that it should work well, and that it should not be constrained by punitive costs.
Lord Renton: My Lords, the Housing Bill, as it was put before your Lordships originally, raised the controversial matter about the way in which tribunal costs should be met. Although I am grateful to the noble and learned Lord, Lord Archer of Sandwell, for the part that he played in helping to put the matter right, I do not think that we can generalise about the functions of tribunals and courts. Tribunals vary so very much, but they have one thing in common which all of us should always bear in mind. Indeed, it was borne in mind by your Lordships when the matter was before us only a week ago. The costs of tribunal cases should not vary greatly from the costs of court cases where somewhat similar issues are being dealt with.
I thank my noble friend Lord Lucas for having consulted me before the matter came before your Lordships and I congratulate him on the sensible and workable compromise that we are now being asked to approve. The noble Earl, Lord Kinnoull, must above all be very pleased because these provisions come so close to those of the amendment which he proposed previously.
Finally, perhaps I may express our indebtedness to the noble Viscount, Lord Bledisloe, for his initiative on the last occasion and for the wisdom that he has shown and the constructive attitude that he has taken in helping the Government to reach this compromise.
4.45 p.m.
Lord Williams of Elvel: My Lords, my noble and learned friend Lord Archer summed this up when he said that the amendment is less draconian and less unjust than the Government's original proposals. Nevertheless, I cannot say that I welcome the Government's compromise with wholehearted enthusiasm.
I should like to test the noble Lord, Lord Lucas, on two points. First, in spite of his assurance that five years might be the right period before the Secretary of State activates his power under the provisions of Amendment No. 102A, he slipped in a phrase about the report from the noble and learned Lord, Lord Woolf. I should be grateful if the noble Lord could elaborate on that because if, under this legislation, anything that the noble and learned Lord proposes (which may be adopted by the noble and learned Lord the Lord Chancellor) can be slipped through by order, we should like to know about it more comprehensively.
Secondly, I am sure that the noble Lord will understand that when—if—the Secretary of State decides to activate the powers which are recommended by another place in Amendment No. 102A, there is no chance of amendment. We can debate the matter but, under the normal procedures of this House, we cannot amend the provisions. In those circumstances, my noble and learned friend Lord Archer would have to take Trappist vows and be silent or simply talk, knowing that

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it was to no effect. I should be grateful if the noble Lord could assure us that if there is any deviation from what he has said this afternoon about the five-year limit, he will consult widely with us. If we are in government, we will consult widely with him.
Lord Lucas: My Lords, I turn first to the second of the questions from the noble Lord, Lord Williams. His noble and learned friend would always have as an alternative the possibility of joining the Liberal Democrat party. He would then be free to oppose affirmative resolutions in this House and he could thus find his voice again. However, the noble and learned Lord might consider that too severe a solution to the problem.
I have tried to be as careful as possible not to mislead the House about the ways in which the power would be used. Clearly, if there is for some reason a general revision of fees in three years' time, which would sensibly include an uprating of this amount in line with inflation—the idea being that it could run for another 10 years before we tackled the subject again—it might be sensible to roll this up in that change.
Turning to the noble and learned Lord, Lord Woolf, and to the proposals for full-cost recovery and changes to the ways in which courts charge fees, perhaps I may say that if that subject comes up, is debated and is agreed, it may be that all that we would need to do to change the fees of the tribunal would be to make an amendment under our powers to change the level of the fee by affirmative resolution. That would be a subsidiary matter to something else that had been agreed and debated at great length elsewhere. I think it most unlikely that a power so narrow could achieve anything useful in relation to a wholesale revision of the fees which courts should charge. I would expect that we would have to seek primary legislation. I did not want to mislead the House by saying that we would not use the power if that was the sensible conclusion to a much more wide-ranging debate and discussion on the level of the fees which should be charged. If all that we needed to do was to change the limit under this power, that would seem sensible. However, there is no intention of going back to the stage where perhaps we were seen by some noble Lords as trying to implement my noble and learned friend's proposals without having fully discussed them in the round.
I am grateful to be standing here today not being showered with rotten fruit, as on Third Reading, but being pelted with bouquets. I am grateful for that, even if some of them seem to have the odd thistle embedded in them. I commend the Motion to the House.
On Question, Motion agreed to.
LORDS AMENDMENT
114 Clause 82, page 57, line 35, leave out ("is sufficient to meet") and insert ("does not exceed")
The Commons disagreed to the above amendment but propose the following amendments in lieu—
114A Page 57, line 33, leave out from first "order" to end of line 37 and insert "subject to this limit, that the fees payable in respect of any one application or reference by the court
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together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.".
114B Page 58, line 2, leave out "which, unless the order" and insert—
"( ) No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it".
Lord Lucas: My Lords, I beg to move that the House do not insist on their Amendment No. 114 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 114A and 114B in lieu thereof, to which I have already spoken.
Moved, That the House do not insist on their Amendment No. 114 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 114A and 114B in lieu thereof. — (Lord Lucas.)
Earl Russell: My Lords, I apologise to the House for not being here at the beginning of business. But when I left this House late last night, this business was not yet on our agenda. Inquiries in the other place failed to discover what the Commons had done with our amendments. So I hope that I may be forgiven for coming in at this point and asking a couple of questions.
First, I ask about the vires that the Minister takes under the phrase:
"that the fees … shall not exceed £500 or such other amount as may be specified by order of the Secretary of State".
It is my understanding that a clear majority opinion in English law at present is that the doctrine of proportionality is not accepted. Therefore, would it be intra vires if a Minister under these powers were to specify fees of £2,000 per day, as was originally envisaged before the passage of the amendment? That seems to me to be a question of some importance.
Secondly, perhaps I may draw the Minister's attention to the fact that we in the Liberal Democrats have no affection for monopoly. We do not wish to claim a monopoly of the opinions which he rightly ascribed to us about voting on statutory instruments. Perhaps I may advise the Minister to read the most distinguished speech of the noble Lord, Lord Renton, on 20th October 1994.
Lord Lucas: My Lords, I am always delighted to read my noble friend's speeches. I do not have that speech with me at the moment, nor do I have what I would regard as a definitive answer to the first question asked by the noble Earl. My understanding of the wording is that my noble friend can propose to put the sum up to £100,000. There is no limit of which I am aware, except that it be approved by affirmative resolution. I hope that I have given noble Lords opposite a considerable degree of comfort that we have no such intention and that this provision is merely there to make

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sure that we do not have to come back with primary legislation every time that we wish to uprate the amount for inflation.
Lord Archer of Sandwell: My Lords, I assume that the noble Lord will accept that any such measure by the Secretary of State would attract an adverse report from the Select Committee on Statutory Instruments.
Lord Lucas: My Lords, I should not be surprised if it did. But we do not anticipate any great need to come back frequently, given this Government's record on inflation. The new Labour Party, should it ever gain power, might need to have more frequent recourse to this power.
Earl Russell: My Lords, before the Minister sits down, perhaps I may put on record that I find this amendment acceptable in the light of the resolution of this House on 20th October 1994: that the House has an unfettered freedom to vote on subordinate legislation.
On Question, Motion agreed to.
LORDS AMENDMENT
286 Schedule 5, page 144, line 44, leave out ("is sufficient to meet") and insert ("does not exceed")
The Commons disagreed to the above amendment but propose the following amendments in lieu—
286A Page 144, line 43, leave out from first "order" to end of line 45 and insert "subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.".
286B Page 145, line 1, leave out "which, unless the order" and insert—
"( ) No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it".
Lord Lucas: My Lords, I beg to move that the House do not insist on their Amendment No. 286 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 286A and 286B in lieu thereof, to which I have already spoken.
Moved, That the House do not insist on their Amendment No. 286 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 286A and 286B in lieu thereof. — (Lord Lucas.)
Baroness Hamwee: My Lords, is the Minister still assured that this is the right point to put to the House, given that almost every time he has put the question or moved the Motion, we have heard quite a loud rumble of thunder? There is an indication coming from outside this House that the matter does not receive universal approbation.
Lord Lucas: My Lords, I believe (as I shall reveal) that the thunder has to do with the next amendment.
On Question, Motion agreed to.
LORDS AMENDMENT
287 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.
(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.
(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 SD, must state—

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

(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
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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.

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,

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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

(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;

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(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 be 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.
Covenant, &c. affecting landlord's power to dispose.
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.
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—

(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 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 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

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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) 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 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.
Right of qualifying tenants to compel sale, &c. by purchaser.
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 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—

(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

(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
1310
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

(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 of 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.
(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 11A, 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

(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;

(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 1) 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 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 12B(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".")

The Commons agreed to this amendment with the following amendment to it—
287A Line 183, leave out "within" and insert "at the same time as the acceptance notice is served or at any time after that notice is served and before the end of—".
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 287A to Lords Amendment No. 287.
This amendment is entirely due to the efforts of the noble Lord, Lord Strabolgi. When he explained to me earlier today that, sadly, he would not be present because he had to be at a garden party, I thought that perhaps he was taking a risk. That appears to have been an unwarranted risk. Her Majesty's disapproval has clearly been communicated.
At Third Reading the noble Lord's amendment concerned the right of first refusal procedures contained in Part I of the Landlord and Tenant Act 1987. Noble Lords will be aware that this part is being substantially amended in the Bill in order to close a number of loopholes which have denied tenants their rights under these provisions. I undertook to consider one of the
1316
noble Lord's proposals with a view to the Government bringing forward an appropriate amendment during consideration of Lords Amendments in another place.
I am pleased to be able to inform the House that that was duly done. The amendment makes a small improvement to the procedures which must be followed when the landlord makes an offer to the tenants allowing them first refusal to purchase his interests. The general requirement is that the landlord must serve an offer notice on the tenants which specifies a period during which the offer must be accepted and a further period during which a person may be designated as the nominee purchaser.
The noble Lord, Lord Strabolgi, pointed out, quite rightly, that that could delay matters as the nominee purchaser could only be put forward in the second period. It may be the case that the tenants are well prepared and are able to accept the offer and name the nominee at the same time. This amendment secures that, by stating explicitly that the nominee can be put forward at the same time as the acceptance of the offer or at any future time up to the end of the second specified period.
I am sure that the noble Lord, Lord Strabolgi, is satisfied with that solution.
Moved, That this House do agree with the Commons in their Amendment No. 287A to Lords Amendment No. 287.—(Lord Lucas.)
Lord Williams of Elvel: My Lords, on behalf of my noble friend Lord Strabolgi, who, I am sure, is enjoying his entertainment this afternoon, I should like to thank the Government for paying attention to what he said. In passing, let me ask the Minister whether the Commons read through the schedule in its entirety. I had a great deal of difficulty in going through it on Third Reading and I only got halfway through. Did the Commons go through the whole schedule in detail?
Lord Lucas: My Lords, I do not believe that I could possibly answer that question. I believe that we have our suspicions.
On Question, Motion agreed to.

Housing Grants, Construction and Regeneration Bill [H.L.]
4.58 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 Commons amendments to the Housing Grants, Construction and Regeneration 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 Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS AND AMENDMENTS TO BE MOVED ON CONSIDERATION OF COMMONS AMENDMENTS
[The page and line refer to Bill (118) as first printed by the Commons.]
COMMONS AMENDMENTS
1 Clause 3, page 3, line 7, at end insert—
`( ) a health authority, special health authority or NHS trust;'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment Nos. 1. I shall also speak to Commons Amendments Nos. 2, 3, 38, 39, 40, 45, 61, 63 and 64.
Amendments Nos. 1, 2, 38 and 39 ensure that certain NHS authorities and trusts, and police authorities which are established under Section 3 of the Police Act 1964 are excluded from eligibility for grants under Chapter I of Part I of the Bill, and from participating in a group repair scheme as an assisted person. Amendments Nos. 1 and 38 respond to concerns which were expressed in Committee in another place that those health service bodies should be shown on the face of the Bill as bodies which cannot apply for grant.
Amendments Nos. 61, 63 and 64 provide that the references to new town corporations, housing action trusts and urban development corporations in the lists of ineligible applicants in Clauses 3(2) and 64(6) in Part I, shall be construed as references to their successor bodies which would be created under Clauses 139 to 141 of this Bill.
Amendments Nos. 3, 40 and 45 concern eligibility to apply for renovation grants and other grants under Chapter I of Part I of the Bill, to participate in a group repair scheme or to receive home repair assistance. To be eligible for all those purposes, applicants will have to pass a means test, the provisions for which will be set out in regulations. Broadly speaking, we have sought to make renovation grants and the other benefits given for private sector renewal available to people whose circumstances are equivalent to those who are entitled to housing benefit.
Amendments Nos. 3, 40 and 45 will enable the regulations to reflect the housing benefit rules in relation to matters other than the applicant's means. There has been a gap in the legislation on that so far and the amendments make a logical extension of the present provisions. They will ensure that the provisions for private sector renewal will, where appropriate, keep broadly in line with housing benefit. One such area relates to asylum seekers and other people who are subject to immigration control. The amendments will enable the regulations to make similar provisions to those for housing benefit regarding the eligibility of such people.
The purpose of the grant system under this Bill is to give people help with repairs and improvements so that their homes can be made fit so that they can go on living
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there. It is, of course, unlikely that many people who are covered by immigration controls will qualify for grants: they will need to own a home, and, in most, but not all, cases, will need to have lived there for three years. However, these amendments will ensure that in the unlikely cases where asylum seekers and other people who are subject to immigration control do jump all those hurdles, the rules governing their eligibility for grants will be the same as those governing their eligibility for housing benefit.
Moved, That the House do agree with the Commons in their Amendment No. 1—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
2 Clause 3, page 3, line 7, at end insert—
`( ) a police authority established under section 3 of the Police Act 1964;'.
3 Page 3, line 15, at end insert—
`( ) Regulations under subsection (3) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 and 3.
Moved, That the House do agree with the Commons in their Amendments Nos. 2 and 3—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
4 Leave out Clause 4 and insert the following new clause—
HOUSING GRANTS: THE AGE OF THE PROPERTY
'.—(1) A local housing authority shall not entertain an application for a grant in respect of premises provided (by construction or conversion) less than ten years before the date of the application, unless—

(a) the application is for a disabled facilities grant, or

(b) the application is for an HMO grant in respect of a house in multiple occupation provided by conversion.

(2) The Secretary of State may by order amend subsection (1) so as to substitute another period for that specified.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4. I shall also speak to Amendment No. 7.
New Clause 4 responds to concerns expressed in Committee in another place. It permits grant to be given for HMOs even where they have been converted less than 10 years ago. It removes the 10-year age requirement—provided for in Clause 4—for houses in multiple occupation which are provided by conversion.
The effect of not relaxing the provisions of Clause 4 for houses in multiple occupation which have been provided by conversion would be that occupiers of those premises might have to wait up to 10 years for a grant-aided improvement to their living conditions.

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Amendment No. 7 adds a new subsection to Clause 12. The new subsection allows renovation grant to be approved for fire precautions works to a self-contained dwelling forming part of an HMO where those works have been specified in a notice served on the HMO under Section 352 of the Housing Act 1985. Prior to the amendment (as is the case under the present legislation), no kind of mainstream renovation grant would have been available for fire precautions works to self-contained dwellings in such cases.
Moved, That the House do agree with the Commons in their Amendment No. 4—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
5 Clause 7, page 4, line 35, leave out from 'State' to end of line 36 and insert—
'References in this Chapter to tenants and other expressions relating to tenancies, in the context of a tenant's application for a renovation grant, shall be construed accordingly.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No.5. It may be convenient if I speak at the same time to Amendments Nos. 6, 8, 9, 18 to 23, 31, 37, 42, 43 and 62.
The purpose of Amendments Nos. 5, 6, 8, 9, 31, 37, 42, 43 and 62 is to ensure that references to "tenant" and "qualifying tenant" and such similar terms in Part I of the Bill shall be construed as including a person who has a licence to occupy a dwelling or a tenancy of a description which may be specified by the Secretary of State.
Amendments Nos. 18 to 23 are technical and are intended to clarify the provisions relating to the conditions as to availability for letting and as to occupancy.
Moved, That the House do agree with the Commons in their Amendment No. 5—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
6 Clause 8, page 5, line 7, at end insert—
'(3A) In subsection (3) references to letting include the grant of a licence to occupy premises.
References in this Chapter to tenants and other expressions relating to tenancies, in the context of a certificate of intended letting, shall be construed accordingly.'.
7 Clause 12, page 8, line 6, at end insert—
'( ) The reference in paragraph (f) of subsection (1) to precautions required under or by virtue of an enactment does not include precautions required to comply with a notice under section 352 of the Housing Act 1985 (notice requiring execution of works to render house in multiple occupation fit for number of occupants) so far as it relates to premises which are not part of a house in multiple occupation for the purposes of this Part.'.
8 Clause 14, page 9, line 8, at end insert—
'References in this Chapter to other expressions relating to tenancies, in the context of an application for a common parts grant, shall be construed accordingly.'.
9 Clause 19, page 12, line 7, leave out 'related expressions' and insert 'other expressions relating to tenancies, in the context of an application for disabled facilities grant,'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 6 to 9.
Moved, That the House do agree with the Commons in their Amendments Nos. 6 to 9— (Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
10 Clause 24, page 14, leave out lines 20 to 22 and insert—
'and the authority shall take that into account in deciding whether it is reasonable and practicable to carry out the relevant works.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10. It may be convenient if I speak also to Amendments Nos. 59 and 60.
Amendment No. 10 responds to concerns which were expressed in Committee in another place and were also raised by the noble Lord, Lord Williams, during earlier stages in this House. The amendment removes subsection (5) of Clause 24. Subsection (5) provides discretion for an authority on whether or not to approve an application for disabled facilities grant where the building does not meet the requirements of the fitness standard. It is replaced by an obligation on the authority to take into account the matters in subsection (4) in deciding whether it is reasonable and practicable to carry out the relevant works.
As a result of the amendment, disabled facilities grant will remain mandatory whether or not the property is unfit. At the same time the amendment reflects the intention behind the original provision; namely, that local authorities, when considering carrying out the proposed works, should have the discretion to refuse an application where the condition of the property is such that it would be unreasonable and impracticable to carry out the proposed works. The kind of case where that might apply, depending of course on the circumstances, might be where a person was considering installing heavy stairlift equipment when, in fact, the walls were crumbling.
Clause 96 requires local authorities to have regard to guidance which is given under Section 604A of the Housing Act 1985 in deciding whether they are satisfied that carrying out the relevant works with grant aid is the most satisfactory course of action where a property is unfit.
Amendments Nos. 59 and 60 add a requirement for authorities to have regard also to any guidance provided by the Secretary of State under Clause 84 in relation to the use and review of deferred action notices.
Moved, That the House do agree with the Commons in their Amendment No. 10—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
11 Clause 31, page 18, line 14, leave out from first 'be' to 'make' in line 27 and insert 'determined by the local housing authority, having regard to—

(a) the extent to which the landlord is able to charge a higher rent for the premises because of the works, and

(b) such other matters as the Secretary of State may direct.

( ) The authority may, if they think it appropriate, seek and act upon the advice of rent officers as to any matter.
( ) The Secretary of State may by regulations'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.
This amendment provides for authorities, in determining grant applications from landlords, to have regard to the extent to which the landlord is able to generate higher rental income on the improved property and, if they think it appropriate, they can seek and act upon the advice of rent officers on any matters concerning rents.
As Clause 31 provides authorities with discretion to determine the amount of grant which may be given in the case of landlord applications, we consider it important that decisions which are taken by local authorities are based on sound information. It is appropriate therefore that express provision is made to ensure that, in every case, authorities have regard to the scope for charging a higher rent on a property improved with grant. That will have a bearing on the landlord's ability to fund the works and therefore on the amount of grant the authority may award.
The amendment also simplifies Clause 31(4) allowing authorities discretion to obtain and take into account advice from rent officers on any relevant matters.
Moved, That the House do agree with the Commons in their Amendment No. 11—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
12 Clause 34, page 20, line 20, at end insert—
'( ) the amount of the costs which have been or are to be incurred as mentioned in subsection (2)(c) has increased,'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12. In moving this Motion, I shall speak also to Amendments Nos. 13, 28 and 57.
Amendment No. 12 is essentially a technical amendment and completes what would otherwise be an incomplete provision. Clause 34(5) enables authorities to redetermine the estimated expense and amount of grant where they are satisfied that, owing to circumstances beyond the applicant's control, there is a need for additional unforeseen works or if the original estimate cannot be adhered to.
Amendment No. 12 ensures that authorities may also redetermine the estimated expense and amount of grant where the amount of the costs with respect to
1322
preliminary or ancillary services or charges has increased owing to circumstances beyond the applicant's control.
Amendments Nos. 13, 28 and 57 correct cross-references in Clauses 35, 54, and 93 of the Bill. Amendment No. 57 is consequential to an earlier amendment made in this House.
Moved, That the House do agree with the Commons in their Amendment No. 12—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
13 Clause 36, page 21, line 2, leave out 'by virtue of section 23(1)' and insert 'under section 24(1)(a)'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13.
Moved, That the House do agree with the Commons in their Amendment No. 13— (Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
14 Clause 39, page 22, line 1, after second 'grant' insert'—

(a) by payment direct to the contractor, or

(b)".

Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 14. In moving this Motion, I shall speak also to Amendments Nos. 15 and 16.
These amendments respond to concerns expressed in Committee in another place and allow the local authority either to make payments direct to the contractor or to give the applicant a cheque made payable to the contractor. The local authority will be required to inform the applicant that payment will or may be made in this manner.
Moved, That the House do agree with the Commons in their Amendment No. 14—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
15 Clause 39, page 22, line 5, after 'would' insert 'or might'.
16 Page 22, leave out lines 6 to 9.
17 Page 22, line 10, leave out from 'Where' to end of line.
18 Clause 49, page 29, line 24, leave out from 'fulfilled' to end of line 28.
19 Page 29, line 32, leave out from 'dwelling' to end of line 35.
20 Page 29, line 42, at end insert—
'( ) The terms of any tenancy of the dwelling (or any part of it, or any property including the dwelling or part of it) shall be deemed to include a duty on the part of the tenant, if required to do so by the owner of the dwelling, to furnish him with such information as he may reasonably require to enable him to comply with a notice under subsection (2).'.
21 Clause 50, page 30, line 13, leave out from 'fulfilled' to end of line 17.
22 Page 30, line 21, leave out from 'house' to end of line 24.
23 Page 30, line 31, at end insert—
`( ) The terms of any tenancy of any part of the house shall be deemed to include a duty on the part of the tenant, if required to do so by the owner of the house, to furnish him with such information as he may reasonably require to enable him to comply with a notice under subsection (2).'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 15 to 23.
Moved, That the House do agree with the Commons in their Amendments Nos. 15 to 23—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
24 Clause 51, peave out Clause 51 and insert the following new Clause—
CONDITIONS AS TO REPAYMENT IN CASE OF OTHER COMPENSATION, &C
'.—(1) Where a local housing authority approve an application for a grant they may, with the consent of the Secretary of State, impose a condition requiring the applicant to take reasonable steps to pursue any relevant claim to which this section applies and to repay the grant, so far as appropriate, out of the proceeds of such a claim.
(2) The claims to which this section applies are—

(a) an insurance claim, or a legal claim against another person, in respect of damage to the premises to which the grant relates, or

(b) a legal claim for damages in which the cost of the works to premises to which the grant relates is part of the claim;

and a claim is a relevant claim to the extent that works to make good the damage mentioned in paragraph (a), or the cost of which is claimed as mentioned in paragraph (b), are works to which the grant relates.
(3) In the event of a breach of a condition under this section, the applicant shall on demand pay to the local housing authority the amount of the grant so far as relating to any such works, together with compound interest as from such date as may be prescribed by or determined in accordance with the regulations, calculated at such reasonable rate as the authority may determine and with yearly rests.
(4) The local housing authority may determine not to make such a demand or to demand a lesser amount.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 24. In moving this Motion, I shall speak also to Amendments Nos. 25 and 56.
The amendments concern the powers of local housing authorities to impose conditions, with the Secretary of State's consent, requiring applicants to take steps to pursue claims—for example, against an insurance company—covering works for which grant has been paid, and to repay grant as appropriate out of the proceeds of the claim.
Amendment No. 24 inserts a new clause to replace the provisions of Clause 51 of the Bill.
We believe that it is right that where grant has been awarded for works for which a claim against another person or a claim for damages is pending, and which would ultimately meet the cost of the works, the authority should seek recovery of grant already paid.
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These are sensible provisions which provide authorities with the flexibility to pursue grant recovery in appropriate cases and also help protect grant resources. Amendments No. 25 and 56 are consequential to the new clause.
Moved, That the House do agree with the Commons in their Amendment No. 24—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
25 Clause 52, page 31, line 44, leave out '51' and insert `(Conditions as to repayment in case of other compensation, &c.)'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 25.
Moved, That the House do agree with the Commons in their Amendment No. 25—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
26 Clause 54, page 32, line 19, leave out from first 'of' to end of line 23 and insert 'any such order as is mentioned in subsection (2A);'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 26. In moving this Motion, I shall speak also to Amendments Nos. 27, 29, 30, 110, 113 and 116.
Amendments Nos. 26, 27, 29 and 30 and the new clause which will be introduced by Amendment No. 110 extend the range of exempt disposals where the disposal is as a result of an order made in proceedings relating to divorce, inheritance or children.
The amendments resulted from consideration of provisions in your Lordships' House on the Housing Bill, where the reference was to Section 24 of the Matrimonial Causes Act 1973. This led to a revision of definitions in a number of areas of housing legislation. It is considered appropriate to make similar provision in this Bill.
Amendments Nos. 110, 113 and 116 similarly extend the definitions of exempt disposals under Part VIII of the Local Government and Housing Act 1989, which will continue to apply until the Bill is brought into force.
Moved, That the House do agree with the Commons in their Amendment No. 26—(Earl Ferrers.)
On Question, Motion agreed to.
5.45 p.m.
COMMONS AMENDMENTS
27 Clause 54, page 32, line 24, leave out from 'disposal' to end of line 25 and insert `(see subsection (2B));'.
28 Page 32, line 43, leave out 'section 15' and insert 'section 16'.
29 Page 33, line 19, at end insert—
'(2A) The orders referred to in subsection (1)(c) are orders under—

(a) section 24 or 24A of the Matrimonial Causes Act 1973 (property adjustment orders or orders for the sale of property in connection with matrimonial proceedings);

(b) section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate);

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

(d) paragraph 1 of Schedule I to the Children Act 1989 (orders for financial relief against parents).'.

30 Page 33, line 19, at end insert—
'(2B) For the purposes of subsection (1)(d) a compulsory disposal is a disposal of property which is acquired compulsorily, or is acquired by a person who has made or would have made, or for whom another person has made or would have made, a compulsory purchase order authorising its compulsory purchase for the purposes for which it is acquired.'.
31 Clause 59, page 36, leave out lines 50 to 52 and insert—

'tenent (and expressios relating to tenancies)

—in the context of a tenant's application for a renovation grant

section 7(6)

—in the context of a certificate of intended letting

section 8(3A)

—in the context of an application for a common parts grant

section 14(2)

—in the context of an application for disabled facilities grant

section 19(5)'

Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 27 to 31.
Moved, That the House do agree with the Commons in their Amendments Nos. 27 to 31—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
32 Clause 60, page 37, line 14, after 'works' insert '—(a)'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 32. In moving this Motion, I shall speak also to Amendments Nos. 33 to 36, 41 and 58.
The purpose behind these amendments is to increase the flexibility of group repair. Amendments No. 32 to 35 do so by enabling schemes to deal with structural instability, either together with, or separately from, works to put the property in reasonable repair. The new clause inserted by Amendment No. 41 enables schemes to be varied after commencement with the approval of the Secretary of State. Our intention would be to give a general approval to cover the bulk of cases. Both these sets of amendments meet concerns raised by noble Lords opposite at earlier stages of the Bill.
Amendment No. 36 clarifies the date of scheme approval in cases which fall within the Secretary of State's general consent.
1326
Amendment No. 58 rectifies incorrect references made in Clause 94(4) to Clause 64(2). The particular changes are the insertion of the correct title for Clause 64 and the insertion of a reference to paragraph (b)—of Clause 64(2)—in place of the reference to paragraph (c). The latter takes account of changes that were made to the numbering of Clause 64 following an earlier amendment made at Report stage in this House.
Moved, That the House do agree with the Commons in their Amendment No. 32—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
33 Clause 60, page 37, line 15, at end insert ', or
(b) to render the buildings to which the scheme relates structurally stable,
or for both those purposes.'.
34 Clause 62, page 37, line 32, at end insert 'works of the following descriptions.
( ) In the case of works to put in reasonable repair the exterior of the buildings to which the scheme relates, the works must be'.
35 Page 37, line 37, at end insert—
'( ) In the case of works to render the buildings to which the scheme relates structurally stable, the works must be—

(a) works to the structure or to the foundations of the buildings to which the scheme relates, or

(b) other works necessary to give satisfactory effect to such works.

and must be such that on completion of the works the buildings will be structurally stable.'.
36 Clause 64, page 38, line 31, at end insert—
'In the case of a scheme not submitted for specific approval, the date of approval shall be taken to be the date on which the authority decide that the scheme fulfils the criteria for general approval.'.
37 Page 39, line 9, at end insert—
'(4A) In subsection (4) references to letting include the grant of a licence to occupy premises.
References in this Chapter to tenants, and other expressions relating to tenancies, in the context of a certificate of intended letting, shall he construed accordingly.'.
38 Page 39, line 24, at end insert—
'( )a health authority, special health authority or NHS trust;'.
39 Page 39, line 24, at end insert—
'( ) a police authority established under section 3 of the Police Act 1964;'.
40 Page 39, line 28, at end insert—
'( ) An order under subsection (6)(f) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'.
41 After Clause 67, insert the following new clause—
VARIATION OF GROUP REPAIR SCHEME
'.—(1) A group repair scheme may be varied at any time before the completion date.
The variation may relate to the participants in the scheme, the buildings to which the scheme relates, the scheme works or any other matter.
(2) A variation is not effective unless approved by the Secretary of State.

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The provisions of section 63(2) to (4) (supplementary provisions as to approval of scheme) apply to approval of a variation.
(3) Where a scheme is varied to enable other persons to participate, section 64 (persons eligible to participate) applies in relation to new participants with the substitution for the reference to the date of approval of the scheme of a reference to the date of approval of the variation.
In the case of a variation not submitted for specific approval, the date of approval shall be taken to be the date on which the authority decide that the variation fulfils the criteria for general approval.
(4) Before varying a group repair scheme the local housing authority shall consult the existing participants and consider any representations made by them.
(5) Fresh scheme consent is required in the case of an existing participant as to whom the authority are satisfied that his interests are adversely affected by the variation.
In any other case the existing scheme consent shall be treated as extended to the scheme as varied.'.
42 Clause 74, page 43, line 44, after 'tenant' insert '(generally)'.
43 Page 43, line 44, at end insert—

'tenant and related expressions (in the context of a certificate of intended letting)

section 64(4A)'

Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 33 to 43.
Moved, That the House do agree with the Commons in their Amendments Nos. 33 to 43—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
44 Clause 77, page 45, line 30, leave out from 'has' to 'on' in line 31 and insert 'for that period had its only or main mooring in the same locality'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 44.
This amendment responds to concerns expressed during Committee in another place. It provides that houseboats may satisfy the residency qualification for home repair assistance through being moored in the same locality rather than at the same mooring. The provision as previously drafted unintentionally restricted the mobility of a houseboat in seeking to define the prior qualifying period for grant assistance.
Moved, That the House do agree with the Commons in their Amendment No. 44—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, I am sure that my noble friend Lord Dubs will be very grateful to the Government for producing this amendment. My noble friend has a continued interest in the residency qualification for houseboats. He spoke on that eloquently when the Bill was before your Lordships' House. I am sure that he will be very happy about this provision. I hope that the noble Earl has now had a little rest from jumping up and down, but I am afraid that he will have to jump up and down now.
On Question, Motion agreed to.
COMMONS AMENDMENT
45 Clause 78, page 46, line 21, at end insert—
`( ) Regulations under subsection (2) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 45. Perhaps I should explain to the noble Lord, Lord Williams, that I am not troubled by the exertion of getting up and down but it is rather that the thunder seems to have affected the air-conditioning system.
Moved, That the House do agree with the Commons in their Amendment No. 45—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
46 Clause 81, page 47, line 23, leave out 'owner of that' and insert 'person having control (as defined in section 207 of that Act) of the building or'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 46. At the same time, I should like to speak also to Amendments Nos. 47 to 55.
The purpose behind this group of amendments is fourfold. First, it clarifies the drafting and brings the service of deferred action notices closer into line with the provisions applying to repair notices under the Housing Act 1985 on which they are essentially based. This is the ground covered by Amendments Nos. 46 to 48, the first two and last two lines of Amendment No. 49, and Amendment No. 54. Secondly, it provides that a local authority may serve a copy of a deferred action notice on a licensee, as covered by the wording in paragraph (b) of Amendment No. 49.
Thirdly, Amendments Nos. 50 to 53 provide, in response to arguments made during the Committee stage of the Bill in another place, for the maximum period for reviewing a deferred action notice to be extended from 12 months to two years with the Secretary of State having power to vary the period. Fourthly, Amendment No. 55 corrects a reference error in the index of expressions in Clause 90.
Moved, That the House do agree with the Commons in their Amendment No. 46.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
47 Clause 81, page 47, line 27, leave out 'The authority may' and insert 'Where the authority serve a notice under subsection (1), (2) or (3) —
(a) they shall'.
48 Page 47, line 28, leave out 'dwelling-house or house' and insert 'premises'.
49 Page 47, line 29, at end insert '(within the meaning of Part VI of the Housing Act 1985), and
(b) they may serve a copy of the notice on any person having a licence to occupy the premises.
( ) Section 617 of the Housing Act 1985 (service of notices) applies for the purpose of this section as it applies for the purpose of that Act.'.
50 Clause 83, page 48, line 15, leave out 'twelve months' and insert 'two years'.
51 Page 48, line 17, leave out 'twelve months' and insert 'two years'.
52 Page 48, line 17, at end insert—
'The Secretary of State may by order amend this subsection so as to specify such other period or periods as he considers appropriate.'.
53 Page 48, line 18, leave out 'They' and insert 'The authority'.
54 Page 48, line 19, at end insert—
'For this purpose sections 197 (powers of entry) and 198 (penalty for obstruction) of the Housing Act 1985 apply as they apply for the purposes of Part VI of that Act.'.
55 Clause 90, page 52, line 4, leave out '100(b)' and insert '89(b)'.
56 Clause 93, page 53, line 30, after '44(3)(a)' insert ', (Conditions as to repayment in case of other compensation, &c.)'.
57 Page 53, line 31, leave out from 'State)' to end of line 33.
58 Clause 94, page 54, line 10, leave out from `schemes)' to end of line 17 and insert ', in section 64(2) (persons eligible to participate in group repair scheme as assisted participants), the requirement in paragraph (a) that a person give an owner-occupation certificate or a certificate of intended letting does not apply if—

(a) the person concerned is a charity or the trustee of a charity, or

(b) the dwelling is the residence house of an ecclesiastical benefice;

and the requirement in paragraph (b) that a person give a certificate of future occupation does not apply if the person concerned is a charity or the trustee of a charity.'.
59 Clause 96, page 54, line 38, at end insert 'and section 84 of this Act'.
60 Page 54, line 40, leave out 'that Act' and insert 'the Housing Act 1985'.
61 Clause 100, page 56, line 15, at end insert 'and includes any body established by order under section 88 of the Housing Act 1988'.
62 Page 56, line 17, leave out from first "'introductory' to 'Chapter' in line 18 and insert 'tenancy" and "introductory tenant" have the same meaning as in'.
63 Page 56, line 24, at end insert 'and includes any body established by order under paragraph 7 of Schedule 9 to the New Towns Act 1981'.
64 Page 57, line 4, at end insert 'and includes any body established by order under section 165B of the Local Government, Planning and Land Act 1980'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 47 to 64 en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 47 to 64.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
65 Clause 103, page 57, line 40, leave out from 'agreement' to end of line 41 and insert 'with a person for any of the following—

(a) the carrying out of construction operations:

(b) arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise;

(c) providing his own labour, or the labour of others, for the carrying out of construction operations.

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(1A) References in this Part to a construction contract include an agreement—

(a) to do architectural, design, or surveying work, or

(b) to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape,

in relation to construction operations.
(1B) References in this Part to a construction contract do not include a contract of employment (within the meaning of the Employment Rights Act 1996).
(1C) The Secretary of State may by order add to, amend or repeal any of the provisions of subsection (1), (1A) or (1B) as to the agreements which are construction contracts for the purposes of this Part or are to be taken or not to be taken as included in references to such contracts.
No such order shall be made unless a draft of it has been laid before and approved by a resolution of each of House of Parliament.'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 65. At the same time, it may be convenient for the House to consider Amendments Nos. 66, 67, 74, 75, 94 and 111. The main amendment—
Lord Williams of Elvel: My Lords, I am sorry to interrupt the Minister at this point, but does he intend to speak also to Amendment No. 65A?
Lord Lucas: My Lords, I rather feel that I shall have to do so. However, I had intended to wait until the noble Lord, Lord Howie of Troon, moved his amendment. I presume that he will do so immediately after I have spoken. That is still my intention unless the noble Lord, Lord Howie, wishes me to do otherwise.
Lord Howie of Troon: My Lords, I would be much happier if the Minister were to reply to my amendment after I have moved it. However, it usually does not make much difference whether he speaks to my amendments before or after I have moved them.
Lord Lucas: My Lords, the noble Lord, Lord Howie, is as perspicacious as always. As I was saying, the main amendment in the group is Amendment No. 65 which has arisen largely as a result of suggestions by the noble Lord, Lord Howie of Troon, before the Bill left this House. The noble Lord urged us to consider including within the Bill design and other consultancy-type work conducted by non-professionals in support of construction operations. An example might be specialist design work carried out by, say, an electrical contractor prior to wiring a building. The noble Lord pointed out that Clause 104(3) could be taken to relate only to the work of professionals and that a great deal of similar work was carried out on construction sites by those not accredited to a recognised profession. We were sympathetic to this, and I undertook to consider appropriate amendments.
During our deliberations it became clear that we were resting the definition section of Part II of the Bill too firmly on an idea of construction operations, and that that was requiring us to stretch the term to categories of work such as design and consultancy which, although

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they undoubtedly related to on-site operations, were not in themselves construction operations as generally understood. In short, we decided to redefine a construction contract to include not only construction operations but also work which related to it. That makes it very simple to include non-professional design and consultancy work, as we have done in subsection (1A) of Amendment No. 65, without having to stretch the idea of construction operations even further.
I should point out that Amendment No. 65 also clarifies the position of those who provide labour for construction operations or those involved in management or supervision. They are already covered by Clause 103 as it is drafted, but I hope that the House will agree that subsection (1)(b) and (c) would leave no possibility for doubt about this. We have also thought it right to make it clear, with subsection (1B), that an ordinary contract of employment would not be covered.
Some of the other amendments in the group are consequential. Amendment No. 66 is designed to ensure that there is no doubt about the meaning of "relates to construction operations" in subsection (2). Amendments Nos. 74 and 75 reflect the fact that the inclusion of these operations would be moved from Clause 104 to 103, and Amendment No. 111 is required to set straight the reference to the power to amend these subsections by order.
I turn now to Amendment No. 94. When the Bill was last in this House, the noble Lord, Lord Williams of Elvel, was most tenacious in his pursuit of an amendment to Clause 103 to ensure that construction work on behalf of the Royal Duchies would be covered by fair contracts provisions. Unfortunately, it was impossible to bring forward a government amendment to that effect before the Bill moved to another place, but I did undertake to reflect on the matter. This we have now done, and I am pleased to say that there has been complete agreement that the Bill should apply to work on behalf of the Duchy of Lancaster and the Duchy of Cornwall. That is the purpose of the new clause (Amendment No. 94), and Amendment No. 67 is consequential to it. I hope that the amendments will be acceptable to the whole House and in particular to the noble Lords, Lord Howie of Troon and Lord Williams of Elvel, to whose inspiration we owe such improvements.
Moved, That the House do agree with the Commons in their Amendment No. 65.—(Lord Lucas.)
AMENDMENT TO COMMONS AMENDMENT No. 65
65A Leave out lines 10 to 13 and insert (",in relation to construction operations, to provide professional advice or work on architecture or as a surveyor or consultant on building, engineering, interior or exterior decoration or on the laying-out of landscape").
Lord Howie of Troon: My Lords, I was deeply moved by the Minister's last few words as they contained unusual praise directed towards me. However, I am sorry to say that I am not exactly satisfied with the amendments. Indeed, I am not sure that the Minister correctly represented my objections to the clause as originally set out in the Bill. That was no doubt
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inadvertent. Perhaps the Minister is confusing me with the noble Lord, Lord Monkswell, who is more interested in non-professional professional work, if I may put it that way, than I am.
If the Minister can recall, my objection was that, in transferring a certain definition from the income tax Bill of 1988, the original Bill had changed the wording of that legislation in a way which I thought was incomprehensible. I know that I am going back quite a while, but perhaps I may remind the Minister of what the Bill originally said. In the reference to "construction operations" it included,
"the professional work of … architects or surveyors, or … consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape".
I was perturbed that a distinction was made in the Bill which was not made in the tax Bill—and, indeed, need not be made in any Bill—between the architects and the consulting engineer.
The Government have changed that part of the definition and shifted it in the Bill in order to meet a real objection. As we know, in Part III the title of architect is protected, but his work is not. In other words, anyone who is not an architect can undertake such work. Indeed, I can and have done so. I dare say that the Minister could do so if he felt so inclined, and it would be covered under the Bill's provisions. There is a good deal of sense in that.
However, I notice that the Government's amendment says:
"References in this part … include an agreement—

(a) to do architectural, design or surveying work, or

(b) to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape,

"in relation to construction operations".
We almost agreed on a previous occasion that the words,
"in relation to construction operations"
were in the wrong place; and, indeed, my amendment actually puts them in the right place. But no doubt we shall shortly hear why I am mistaken in that respect. However, in that context, what does the phrase "design work" mean?
The Minister will perhaps not remember, but we had a Bill which went through this House, the name of which escapes me but I am sure the noble Lord, Lord Williams of Elvel, will remember it very well.
5.30 p.m.
Lord Williams of Elvel: My Lords, the copyright Act 1988.
Lord Howie of Troon: My Lords, that is right. During the course of that Bill we had a very substantial discussion about the meaning of "design".
In the context of architectural and design work, design would seem to mean architectural design work. The word "engineering" in the next paragraph does not actually mean engineering design. That eminent body, the Design Council, does not do much in the construction industry. It does a good deal for manufacturing and visual design. I suppose that the

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Minister will argue that engineering design is included here—and I am sure that I could not convince him that he was wrong—but I should like to see the Bill state that engineering design is included because it is different from architectural design or forms of visual design.
A distinction is made in paragraph (a) to carrying out work and in paragraph (b) to providing advice on building, engineering and one or two other aspects. A consulting engineer is one of the most important people as regards construction contracts in this part of the Bill. He provides not only advice, but he also does substantial work. Other people who provide advice are lawyers. Often it is good advice, but sometimes it is not. The advice which a consulting engineer gives to a client is only a small part of the work that he does. What possible distinction are the Government trying to make between architectural work and engineering advice? Do they understand that there is, in fact, no real distinction between them?
In the construction industry the work of the architect involves feasibility studies, giving advice, drawing up contracts, drawing up specifications, making designs, placing the contract, advising the client on whom to give the contract and then managing, although not always, the work as it progresses as a project manager. The consulting engineer does exactly the same thing. What are the Government trying to do by suggesting that a body of professional activity can be described as architectural work when a similar body of professional activity is described as advice? That does not make much sense. In so far as there is any sense in it, that has been concealed from me, regardless of the amount of interest I have taken in the progress of this Bill.
I could go on a little longer, but I think that that would be extremely unkind. With those few remarks, I beg to move.
Moved, That Amendment No. 65A, as an amendment to Commons Amendment No. 65, be agreed to.—(Lord Howie of Troon.)
Lord Williams of Elvel: My Lords, I thought that the Minister had moved Amendment No. 65. Are we now moving Amendment No. 65A?
Lord Lucas: Yes, my Lords.
Lord Williams of Elvel: My Lords, I am grateful to the Minister for his remarks about the inspiration from me and my noble friend, Lord Howie of Troon, particularly in respect of the Duchy of Cornwall and the Duchy of Lancaster. It seemed to me to be something that was obvious to anybody who read through the Bill, but I am still grateful to the noble Lord.
Lord Lucas: My Lords, Amendment No. 65A seeks to compress subsection (1A) into a single sentence. The noble Lord, Lord Howie of Troon, has shown us on many occasions during the passage of this Bill his ingenuity in suggesting drafting amendments, and we had a similar offering to this during Report. We did not see much need for it then, and we still do not. One of the main purposes of Amendment No. 65 is to make it
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quite certain that the design and consultancy work of both professionals and non-professionals would be included within the Bill, and this amendment would reinstate the word "professional" in such a way that it is not clear to which items it refers in the list that follows. This would merely cause confusion.
I can, I hope, give the noble Lord, Lord Howie of Troon, the comfort that he requires; that design work in relation to construction operations is covered and that there is no implication in any way in this Bill that we do not honour and love all civil engineers and engineers—indeed, engineers of all descriptions—who might possibly be involved in construction work. In the order of wording or the order of clauses, there is no intention in any way to suggest that they occupy a subsidiary role. Indeed, some of my best friends are engineers.
I do not think that the noble Lord could change anything in this Bill to the advantage of his profession. I do not think that there is anything in this wording which will not cover what they do properly and fully. I appreciate the noble Lord might wish to rephrase it in some way or another. To date the noble Lord has not come forward with the form of wording which convinces us that his is better than ours in this particular aspect.
I can give the noble Lord the comfort which he is seeking underneath; that what this Bill achieves in practice is what he would like to achieve if only he could find the wording to do it in another way.
Lord Howie of Troon: My Lords, it probably will achieve the result in practice because engineers are eminently practical people. Before I finish, I wonder whether the Minister could make some attempt, however feeble, to justify the distinction between work and advice as regards the two bodies of work or advice which are virtually identical.
Lord Lucas: My Lords, my advice is that it works as it is.
Lord Howie of Troon: My Lords, I have spent several months in this Chamber withdrawing amendments and I am happy to withdraw this amendment, too, as is my custom.
Amendment No. 65A, as an amendment to Commons Amendment No 65, by leave, withdrawn.
On Question, Amendment No. 65 agreed to.
COMMONS AMENDMENTS
66 Clause 103, page 57, line 44, at end insert—
'An agreement relates to construction operations so far as it makes provision of any kind within subsection (1) or (1A).'.
67 Page 58, leave out lines 7 to 11.
Lord Lucas: My Lords, I beg to move Amendments Nos. 66 and 67.
Moved, that the House do agree with the Commons in their Amendments Nos. 66 and 67.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
68 Clause 104, page 58, line 14, leave out from beginning to end of line 22 and insert—

'(a) construction, alteration, repair, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of the land (whether permanent or not);

(b) construction, alteration, repair, maintenance, extension, demolition or dismantling of any works forming, or to form, part of the land, including (without prejudice to the foregoing) walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, reservoirs, water-mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence;'.

Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 68. It may also be convenient to consider Amendments Nos. 69 to 73, 76 and 77, and I understand that the noble Lord, Lord Howie of Troon, will be moving Amendments Nos. 68A, 68B and 68C in this same group.
When we considered these matters at earlier stages of this Bill, I suspect that we spent at least as much time discussing the definition of construction operations as we did any other aspect of the Bill. The Government were grateful for this close and testing scrutiny, and noble Lords accepted a number of detailed amendments which we brought forward as a result.
In examining Amendments Nos. 68 to 73, the House will see a number of familiar issues. I would have hoped that Amendment No. 68 would find favour with the noble Lord, Lord Howie of Troon, who introduced an amendment in Committee which included maintenance as a construction operation. Following debate in another place, we accepted that the industry may find an express reference to maintenance useful in both paragraphs (a) and (b) of this subsection, and we have also taken the opportunity to add a reference to dismantling in paragraph (b).
Although the amendments in the name of the noble Lord, Lord Howie of Troon, show that the noble Lord is still in search of further refinements on this, I hope he may be persuaded that they are unnecessary.
Amendments Nos. 69 and 70 arose as a result of suggestions in another place that external cleaning relating to construction should be treated in the same way as internal cleaning, and that the maintenance and dismantling of scaffolding should be treated in the same way as its erection. I am sure that noble Lords will see the sense of this.
Amendment No. 71 is another old favourite, and arose out of protracted debate here in which the noble Lords, Lord Berkeley, Lord Howie of Troon, Lord Williams of Elvel, Lord Monkswell and my noble friend Lord Ullswater, all made valuable contributions. I doubt if it would be a good use of the House's time to summarise the full extent of that debate, but let me just remind the House that, at the end of our consideration we undertook to amend Clause 104(2)(c) to achieve two particular effects. The first of these was to ensure that the exclusion of work on plant and machinery on a process
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plant site should extend only to steelwork that was necessarily connected to it in some way, and that all other steelwork on such a site—in common with all other construction work—should be subject to the Bill's provisions. The second was to remove the word "construction" from the beginning of the paragraph and to replace it with something less likely to cause confusion. I hope the House will agree that both those ends have been served by Amendment No. 71.
I hope too that the noble Lord, Lord Williams of Elvel, will recall introducing an amendment in Committee to enable so-called supply-and-fit contracts to be included in their entirety. When the noble Lord, Lord Howie of Troon, introduced a similar amendment at Third Reading, I undertook to bring forward amendments to cover the whole of such contracts, and this would be the effect of Amendment No. 72. I have to say, however, that we have not been prepared to go any further than this, despite the fact that some have argued that so-called "bespoke" manufacture should be covered, even where the manufacturer is not involved in the installation. We continue to believe that it would be difficult to distinguish between products that were fabricated for one particular construction operation and those that were not, and that such a move would be a recipe for dispute and litigation.
As I promised the noble Lord, Lord Howie of Troon, at Third Reading we have brought forward—in Amendment No. 73—an amendment to remove the specific exemption for signwriting and work on signboards and advertisements. I believe the noble Lord, Lord Williams of Elvel, was anxious that we should do that.
Turning now to Amendment No. 76, there are two main changes here, and I will look at the issue most familiar to noble Lords first. Clause 105 excludes from Part II contracts with a residential occupier, and the House will recall that, in Committee, both the noble Lords, Lord Williams of Elvel and Lord Howie of Troon, proposed amendments in the search for the most effective way of achieving this. During the Bill's passage in another place there were still concerns that a client who was building an office block or a factory might include a dwelling so that the whole contract could be exempted from fair contract provisions. Although the Government felt that this was rather unlikely, since the exemption could only apply to an individual owner and not to a company, we were persuaded to bring forward an amendment to make sure that no such loophole existed.
Having looked at this carefully, we decided that the most equitable and generally satisfactory way of proceeding was to restrict the exemption to contracts whose primary purpose related to a dwelling for one of the parties. This would still allow the exemption to cover contracts on second homes, which I know was a concern of the noble Baroness, Lady Hamwee, at Report, and also to cover contracts where some of the work applied to a separate flat, a garage or an outhouse. It would not, however, allow rich individuals to avoid the Bill by adding penthouse flats to their office blocks.
However, the precise wording of Amendment No. 76 has also arisen in response to concerns expressed in the property industry that the Bill might, inadvertently,

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cover certain types of agreement where construction operations may be identified but where they are incidental to the main purpose. We have listened very carefully to representations in another place on this issue, since we are anxious to ensure that the Bill's payment and adjudication provisions apply only to contracts where it is appropriate for them to do so.
One of the main categories which we would like to exclude is that of agreements to undertake projects under the private finance initiative. I should emphasise, however, that there must be no question of such exemptions having the effect of excluding normal construction work. Anyone with a contract or subcontract for actual construction work on a PH project, or one financed through some sort of loan or finance agreement, should still be covered by the Bill.
Obviously this is a complex and difficult area, and we are not yet in a position to propose firm amendments on this. Although we have only a limited number of exclusions in mind, we are anxious to get them absolutely right. In particular we are keen to avoid any possibility of exempting types of agreements which could be misappropriated for use further down the contractual chain. In other words, we do not want to create loopholes, and need to look at this carefully with representatives of all the interests concerned. Amendment No. 76 would give the Secretary of State power to exclude by order any description of construction agreement, and we intend to use this to bring forward appropriate exclusions along the lines I have indicated. These exclusions would then be debated by both Houses. I am sure that this is the right way forward, and I hope that—with the assurances I have given—noble Lords will feel able to agree to this amendment. Amendment No. 77, reflects the fact that, with Amendment No. 76 in place, there would be two order-making powers in Clause 105. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 68.—(Lord Lucas.)
AMENDMENT TO COMMONS AMENDMENT No. 68
68A Line 3, after ("structures") insert ("or any works").
5.45 p.m.
Lord Howie of Troon: My Lords, I beg to move Amendment No. 68A as an amendment to Commons Amendment No. 68. This is almost as small an amendment as I have moved in the course of this Bill. I managed to move one which had only two words in it. However, the Government were worried about the drafting of those two words at the time, but they eventually accepted them.
I think my noble friend Lord Williams of Elvel would agree with me that the Minister listened most carefully to the many amendments which we tabled during the various stages of the Bill. I am not sure that he always got the hang of them but he tried hard to meet us as far as he could. A number of amendments were discussed in the Committee stage in another place. They were sensible amendments and largely based on amendments which we had discussed in this House. They were passed, but unfortunately reversed by the Government at later stages of the Bill. One, however, did get through which sought
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to include the word "maintenance". That word appeared to give the Government great difficulty, although maintenance contracts are commonplace in construction. As regards roads, part of the private finance initiative is based on people building a road and then maintaining it for about 30 years through a variety of maintenance contracts. I was amazed that the Government took so long to accept the concept of maintenance although they had quite happily accepted the concept of repair. Repair and maintenance are fairly closely related. They do not differ widely from each other. I shall not mention the Minister in another place by name so as not to embarrass him, but he said that maintenance was a jolly silly word to put in the Bill. But then he put it in. That was one of the most sensible things he did.
My point in this little group of amendments is to tighten up the wording of the Bill and to make it understandable to people other than lawyers. Government Amendment No. 68 to Clause 104 contains three lines in paragraph (a) which are almost identical to the first three lines of paragraph (b). However, they are not totally identical; there is a distinction. Paragraph (a) refers to construction, alteration and so on of "buildings or structures". Paragraph (b) refers to the construction, alteration and so on of "any works". The words,
"any works forming, or to form, part of the land"
must in any common sense use of language include buildings or structures. Is there some reason why buildings or structures in paragraph (a) should be separated out and distinguished from "any works" in paragraph (b)? Of course there is no reason at all for that. All I have done in my amendment is to combine the two to refer to buildings or structures or any works. I have tidied up paragraph (b) by moving some of the wording into paragraph (a). That is all that I have done. That seems to me to make much more sense than the wording in the Bill as drafted at present, as quite obviously any works must include buildings or structures. If any works exclude buildings or structures someone ought to explain to me why that is so.
In passing let me mention something that occurred to me a few moment ago. I am sorry about that; it would have given me another amendment had I thought of it earlier. In the second to last line of Commons Amendment No. 68 there is a reference to "industrial plant". That means that industrial plant is included in the provisions of the Bill. However, under the exclusions in the Bill there is a reference to process plants. Is "industrial plant" different from "process plant", or will we discover the difference between them in some extremely expensive High Court action? I do not press the point too hard. I merely put the issue forward for the Minister to consider. No doubt we shall have an opportunity to deal with these obscurities and ambiguities when the remainder of the Latham proposals are eventually brought before this House next year or the year after. I beg to move.
Moved, That Amendment No. 68A, as an amendment to Commons Amendment No. 68, be agreed to.—(Lord Howie of Troon.)
Lord Lucas: My Lords, these amendments would have two effects. First, they would reduce the list of examples given in Clause 104 to ones solely concerned with civil engineering projects. I can understand why the noble Lord wishes to achieve that, but this is supposed to be a rather more wide-ranging clause than that.
Secondly, this is another series in the noble Lord's attempts to improve the drafting. We have looked carefully at what the noble Lord proposes. We think that the Bill as drafted achieves the effects we want. We do not see that the noble Lord's amendments offer any practical improvement. With that sparse comfort, I hope that the noble Lord will feel content to withdraw his amendment.
Lord Howie of Troon: My Lords, I am tempted to tell the Minister that he is wrong, but I would not dream of doing so. The amendment does not have the effect that he states. Quite apart from anything else, it leaves the list of examples exactly as he has put it. It so happens that those are nearly all civil engineering matters with the exception of power lines, telecommunication apparatus, and perhaps one or two others. Those are still in the list. His argument is completely mistaken. I give him another chance to convince me that I am wrong.
Lord Lucas: My Lords, with the leave of the House, I think that the best answer to the noble Lord's problems is to rely on Clause 104(4) and the power to make amendments at a later time if the noble Lord proves to be right and there prove to be problems with the definition. Doubtless he will continue to offer his advice to Secretaries of State on this subject. However, there is nothing that we are willing to do at this stage.
Lord Howie of Troon: My Lords, I look forward to Clause 104. I am elated at the thought that the Secretary of State might listen to something said to him. I beg leave to withdraw the amendment.
Amendment No. 68A, as an amendment to Commons Amendment No. 68, by leave, withdrawn.
[Amendments Nos. 68B and 68C, as amendments to Commons Amendment No. 68, not moved.]
On Question, Commons Amendment No. 68 agreed to.
COMMONS AMENDMENTS
69 Clause 104, page 58, line 28, after '(d)' insert 'external or'.
70 Page 58, line 34, at end insert `, maintenance or dismantling'.
71 Page 58, line 45, leave out from `(c)' to 'on' in line 46 and insert 'assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery,'.
72 Page 59, leave out lines 4 to 9 and insert—
'( ) manufacture or delivery to site of—

(i) building or engineering components or equipment,

(ii) materials, plant or machinery, or

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(iii) components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or for security or communications systems,

except under a contract which also provides for their installation;'.
73 Page 59, leave out lines 12 and 13.
74 Page 59, line 14, leave out from beginning to end of line 22.
75 Page 59, line 24, leave out ', (2) or (3)' and insert 'or (2)'.
76 Clause 105, page 59, line 28, leave out from 'apply' to "'dwelling"' in line 32 and insert—

(a) to a construction contract with a residential occupier (see below), or

(b) to any other description of construction contract excluded from the operation of this Part by order of the Secretary of State.

(2) A construction contract with a residential occupier means a construction contract which principally relates to operations on a dwelling which one of the parties to the contract occupies, or intends to occupy, as his residence.
In this subsection'.
77 Page 59, line 39, leave out 'such order' and insert 'order under this section'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 69 to 77 to which I have already spoken.
Moved, That the House do agree with the Commons in their Amendments Nos. 69 to 77.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
78 Clause 106, page 60, line 14, after 'submissions' insert 'in adjudication proceedings, or'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 78. The amendment would permit an exchange of submissions in adjudication proceedings to provide evidence of an agreement in writing in the same way that an exchange of submissions in arbitration and litigation can do so. This was first suggested by the noble Lord, Lord Howie of Troon, in Committee. Indeed, as on every other speaking note today, this demonstrates that we have been listening to the noble Lord. On that occasion I undertook to consider the matter. Unfortunately, we were not able to determine the final form of an amendment before the Bill left this House and in the end it was introduced first in another place. But I am more than happy to give the noble Lord, Lord Howie of Troon, sole credit for this sensible and useful addition to the Bill, and I commend it to the House.
Moved, That the House do agree with the Commons in their Amendment No. 78.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
79 Clause 107, page 60, line 23, leave out 'resolution by an adjudication' and insert 'adjudication under a'.
80 Clause 107, page 60, line 26, leave out 'procedure must' and insert 'contract shall'.
81 Page 60, line 26, at end insert—
`( ) enable a party to give notice at any time of his intention to refer a dispute to adjudication:'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 79 to 81. At the same time it may be convenient to consider Amendments Nos. 82 to 85. Again, I believe that the noble Lord, Lord Howie, has an amendment in this group.
I am sure that I do not need to remind your Lordships that when the Bill was last in this House there was a great deal of debate about the effect which an adjudicator's decision should have. The noble Lords, Lord Williams of Elvel, Lord Howie of Troon, and Lord Berkeley, all spoke to amendments in their name which were designed to ensure that adjudication should produce only a temporary decision, and the noble Baroness, Lady Hamwee, was one who queried our use of the word "resolution" in connnection with adjudication proceedings. As a result of those representations I gave an undertaking at Report that the adjudication under the scheme for construction contracts would enable adjudication decisions to have temporary effect.
By the time the Bill reached another place the Government decided that the meaning of the word "resolution" was insufficiently understood by the industry and we sought to remove it. That is the purpose of Amendment No. 79.
We also brought forward a new subsection to spell out the effect of an adjudicator's decision in much more detail. Our proposal was that an adjudicator's decision should be binding, which we consider essential, but that parties might reopen a dispute if they chose before an arbitrator or the courts. However, mindful not only of the views expressed in another place, but also of the debate that had already taken place in this House, we finally concluded that the industry did not wish to be given the option of permanently binding adjudication. The Government also considered the representations of professionals who feared that rapid but permanent decisions on matters concerning professional competence might have a damaging effect on professional indemnity premiums.
Accordingly I am now asking the House to agree, in Amendment No. 84, a provision which would make an adjudicator's decision binding but temporary. Although we hope that the vast majority of adjudicated decisions will effectively become permanent, we are proposing that this should be possible only with the agreement of parties after the event—or if arbitration or the courts reach the same conclusion.
Amendment No. 80 would substitute the word "contract" for procedure at the head of subsection (2) of Clause 107, and Amendment No. 85 would place all the emphasis on the contract in subsection (4) by omitting the word "procedure".
The noble Lord, Lord Howie of Troon, may recall that, in Committee, he proposed an amendment which would have required the start of the process in which a dispute was referred to an adjudicator to begin with an
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act of formal notification. Similar suggestions were also made in another place and, although the Government remain doubtful that such a step is really necessary, we have accepted that there are many in the industry who would like to see the process begin formally in that way. We have brought forward therefore Amendments Nos. 81 and 82 which have this effect.
Amendment No. 81 makes it clear that notice may be given at any time. We believe that this is essential if notification is not to provide recalcitrant parties with an opportunity to block the adjudication procedure with artificial and unreasonable constraints. We feel that that is what could happen if Amendment No. 81A, in the name of the noble Lord, Lord Howie of Troon, were to be accepted.
Amendment No. 83 would allow the adjudicator to extend the period for his consideration by up to 14 days with the agreement of the referring party. There were those in another place who advocated that the adjudicator should have sole discretion to extend his consideration indefinitely, but we remain firmly of the opinion that this would be most inadvisable and would inevitably result in adjudication becoming much slower and more expensive than it need be. However, we have accepted that it might be desirable to allow some possibility of an extension in circumstances other than those for which the Bill already allows where parties are agreed that the adjudicator should be given more time. Amendment No. 83 would mean that, where there was a real possibility of a few more days making a difference to a case, the adjudicator would only need to persuade the referring party to allow him more time. Amendment No. 83 would give an extra degree of flexibility to the adjudicator without compromising, to any great extent, our priorities of speed and fairness. We have had to strike a balance, and I believe we have got it about right.
Moved, That the House do agree with the Commons in their Amendments Nos. 79 to 81.—(Lord Lucas.)
AMENDMENT TO COMMONS AMENDMENT No. 81
81A Line 2, after ("time") insert ("within the period prescribed in the contract").
Lord Howie of Troon: My Lords, this is again a small amendment. I should first like to express my thanks to my noble friends and to Baroness Hamwee for the care with which the Government responded to our arguments on the complicated business of adjudication and the distinction between adjudication and arbitration which we tried over and over again to make and which I think the Government eventually got hold of. However, I am not sure that they have quite got hold of the point. I was rather entranced by the remark of the noble Lord the Minister when he said that the adjudication was to be binding but temporary. I know that I am only a Scot and we look at things somewhat differently, but it is hard to see how it can be both binding and temporary. I see the noble Lord, Lord McColl, sitting there. He is a very eminent medical man and he could talk about a binding bandage being temporary. However, this is a different thing altogether. I cannot see that arbitration can be binding if it is temporary. However, I think that the Government means

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well here. They are trying to do what we want them to do but they cannot bring themselves to say it. They have gone a good way towards the arguments which we put forward and we are grateful to them for that.
Government Amendment No. 81 contains three words which have caused a good deal of concern in the civil engineering profession. It is a provision to enable a party to give notice "at any time" of his intention to refer a dispute to adjudication. In the nature of things, a construction contract is completed over a period of time, sometimes over quite a long period of time, depending on the complications of the project. However, there comes a time when the project is deemed to have been completed. Some sections of the industry are worried that the words "at any time" might mean that the question of arbitration could be raised long after the project had been completed.
My amendment relates to the scheme, which we have not mentioned today, rather than to other contracts, and proposes that the contract should suggest a time limit within which adjudication has to be undertaken. It is a simple issue. Neither contractors nor clients like to think of the spectre of arbitration hanging over their heads for an unspecified period. They believe, rightly or wrongly, that the wording "at any time" raises that spectre.
Moved, That Amendment No. 81A, as an amendment to Commons Amendment No. 81, be agreed to.—(Lord Howie of Troon.)
Viscount Ullswater: My Lords, without Commons Amendment No. 81, I believe that the problem of notification of a reference of a dispute for resolution by adjudication would exercise the writers of contracts to an unreasonable degree. Parties might be tempted to write into the contract something that would seek to undermine the usefulness of this part of the Bill—for example, to the effect that disputes could only be notified within 24 hours of their arising, or only before 9.30 in the morning. This amendment gives the parties a formal starting time for the referral period. I believe that nobody would wish the right to refer to become a source of dispute in itself. I am certain that the scheme for construction contracts should not be used as the first fall-back position for all minor problems with a contract and that this is therefore a sensible amendment.
When your Lordships considered this clause when the Bill was before the House on the previous occasion, the concept that adjudication should be available at any time was, I believe, always implicit. However, it seems that during the passage of the Bill through another place the requirement for adjudication to be available at any time has become explicit.
The concept that there should be a strict time limit upon the referral period is the subject of Amendment No. 81A to Amendment No. 81 proposed by the noble Lord, Lord Howie. I understand that some sections of the industry are concerned about what they see as the widening of the timescale for the opportunity for referral of disputes for adjudication. Sir Michael Latham put forward the concept of adjudication for the quick settling of disputes. He recommended in his report,
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Constructing the Team, the three basic principles which this section of the Bill follows: first, that there should be no restriction on the issues capable of being referred to the adjudicator, conciliator or mediator, either in the main contract or in sub-contract documentation; secondly, that the award of the adjudicators should be implemented immediately; and, thirdly, that any appeals to arbitration or the courts should be after practical completion and should not be permitted to delay the implementation of awards. I believe that the Government have interpreted those principles in the words of Clause 107 and that the government amendments which my noble friend has put forward complement that position.
I believe that going to arbitration could be much more costly and therefore should not be the first recourse for the parties. The government amendment will not allow a strong party to the contract writing in difficult and onerous conditions which would have the effect of limiting substantially the effectiveness of this section. Therefore, I am content to support the government amendment. I am not content to support the amendment moved by the noble Lord, Lord Howie of Troon.
Lord Lucas: My Lords, I am grateful for my noble friend's support. As he points out, with an amendment such as Amendment No. 81A in place, it will be possible for a party bent on avoiding adjudication to insert a term which would allow notice to be given within an unreasonably narrow window, and we cannot allow that.
I am of course aware that some have doubted the wisdom of allowing parties to refer a dispute to adjudication long after work under the contract has ceased. However, as long as there is any possibility of disputes arising under a contract, parties will have to live with the fact that an adjudicator's decision may be sought. Indeed there may be times, even at such a late stage, where it is desirable to have a quick and cheap procedure that can produce an effective temporary decision, particularly since this will not prevent parties from seeking a permanent decision through arbitration or the courts.
As long as there is a possibility of a dispute arising under a contract, the right to seek adjudication will remain. There is no evidence that this will cause any particular difficulties in practice and on balance we feel that it is likely to be helpful. We should, of course, always be prepared to look again at the legislative framework if persistent problems emerged. Until that stage is reached, I hope the noble Lord, Lord Howie of Troon, will be content to leave the Bill as it is now and to withdraw his Amendment No. 81A.
Lord Howie of Troon: My Lords, in the course of the Bill I have frequently agreed with the noble Viscount, Lord Ullswater. I agreed with his speech today until the end when he disagreed with my amendment, but the rest of his speech was sound. The kind of examples which have been suggested of people inserting unreasonable timetables into a contract do not hold water. No one would accept a contract which contained such unreasonable conditions. Clause 107(2) concerns timetabling and provides that the contract

1345
should have a timetable. My amendment proposes the period within which adjudication can be taken in the context of a timetable. The wording of the Government's Amendment No. 81 is "at any time" and it removes adjudication from the context of a timetable.
However, I have been assured by the noble Lord, Lord Lucas, that the Secretary of State will consider our proposals carefully and examine the manner in which the Bill works in practice over the next year or two. If any of the flaws which I have detected are real and not imaginary, he will deal with them. I am therefore happy to withdraw my amendment.
Amendment No. 81 A, as an amendment to Commons Amendment No. 81, by leave, withdrawn.
On Question, Commons Amendments Nos. 79 to 81 agreed to.
6.15 p.m.
COMMONS AMENDMENTS
82 Clause 107. page 60, line 28, at end insert 'of such notice'.
83 Page 60, line 31, at end insert—
'( ) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;'.
84 Page 60, line 34, at end insert—
'(2A) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.
The parties may agree to accept the decision of the adjudicator as finally determining the dispute.'.
85 Page 60, line 39, leave out 'provide for a procedure which complies' and insert 'comply'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 82 to 85, to which I have already spoken.
Moved, That the House do agree with the Commons in their Amendments Nos. 82 to 85.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
86 Clause 107, page 60, line 42, leave out from beginning to end of line 2 on page 61 and insert—
'( ) For England and Wales, the Scheme may apply the provisions of the Arbitration Act 1996 with such adaptations and modifications as appear to the Minister making the scheme to be appropriate.
For Scotland, the Scheme may include provision conferring powers on courts in relation to adjudication and provision relating to the enforcement of the adjudicator's decision.'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 86. At the same time, it may be convenient if we consider Amendments Nos. 93 and 112.
There has been considerable misunderstanding about making the scheme and in particular our reference to the Arbitration Act. Although there may still be some who are suspicious that such a reference could be used to foist arbitration on an unsuspecting industry, I am
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pleased to say that there is now a general understanding in the industry of the need to mention the Arbitration Act.
We cannot provide adequately for court intervention under an ordinary regulation-making power. Asking the courts to intervene in a way that was outside their normal sphere could only be done through primary legislation or through an adaptation of the Arbitration Act, which contains the right sorts of provision. I need hardly say that it would be quite improper to take a wider power than we think we might need, and we are fortunate in having such a good range of suitable provisions available in such an up-to-date piece of legislation. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 86.—(Lord Lucas.)
Lord Howie of Troon: My Lords, in earlier stages of the Bill we had the opportunity to read the draft scheme as it related to England and Wales. There was some discussion in this House and elsewhere about it and I believe that the Government are reconsidering the matter. Is there any possibility of being able to see the scheme applying to Scotland reasonably soon? I have made inquiries but so far they have been fruitless.
Lord Lucas: My Lords, I shall ensure that the noble Lord receives an answer fairly soon but I am afraid that I cannot give him the information he needs now.
On Question, Motion agreed to.
COMMONS AMENDMENT
87 Clause 108, page 61, line 8, leave out '60' and insert '45'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 87. It may also be convenient for us to consider Amendments Nos. 88 and 92, to which I believe the noble Lord, Lord Chapple, has an amendment.
We have always envisaged that the right to interim payments should extend to all construction contracts, provided they were of sufficient duration. The reason for having a time threshold to trigger that right is because we do not think it practicable or reasonable to give that right on shorter contracts. It would clearly make no sense to have compulsory instalments on contracts lasting a day or two. We originally suggested a time threshold of 60 days. However, we have listened carefully to those who argued that this might be too long for small businesses to go without payment and we have accordingly decided to put forward a reduced threshold of 45 days. That is the effect of Amendments Nos. 87 and 88.
The effect of Amendment No. 92 is to remove the word "purporting" from the paragraph which makes contractual pay-when-paid provisions ineffective. We believe that the intention behind the word was not clear to many in the construction industry and accordingly agreed with an amendment made by the Opposition in another place that it should be removed. Provisions should be ineffective if they make payment conditional on the payer receiving payment from a third party. It is as simple as that. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 87.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
88 Clause 108, page 61, line 10, leave out '60' and insert '45'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 88.
Moved, That the House do agree with the Commons in their Amendment No. 88—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
89 Clause 109, page 61, line 23, at end insert—
'(1A) Every construction contract shall provide for the giving of notice by a party not later than five days after the date on which a payment becomes due from him under the contract, or would have become due if—

(a) the other party had carried out his obligations under the contract, and

(b) no set-off or abatement was permitted by reference to any sum claimed to be due under one or more other contracts.

specifying the amount (if any) of the payment made or proposed to be made, and the basis on which that amount was calculated.'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 89. Amendments Nos. 89 to 91 are complex amendments at the heart of the payment issue. I believe that they offer a most useful and significant improvement to the construction industry's payment mechanisms. When the Bill was in another place, the Government were persuaded that it might be possible to do something further to limit the abuses persistent in the name of set-off and abatement.
We had already done much to this end in the Bill but with Amendment No. 89 we can ensure that a party should know exactly how much he will be paid. The amendment would require a payer to disregard all issues of set-off and abatement in calculating a payment and then to indicate, within five days of the due date of that payment, how much he actually intended to pay. He would need to explain how that amount was calculated and, in doing so, take account of set-off and abatement, regardless of whether they were calculated into the sum due under the contract or simply subtracted afterwards. If he changes his mind he must indicate the change within the time available for issuing or withholding notice. This is the second notice and it is outlined in Clause 110(2). Once the time available for issuing or withholding notice is passed, the payer is bound to hand over the sum indicated. Should he fail to do so by the final date of payment, the payee may take steps to suspend performance, as indicated in Clause 111.
I shall also indicate the purpose of the other amendments in this group. Amendment No. 90 is consequential and Amendment No. 91 is required to make sure that the payer does not need to issue a second notice unless he decides to pay less than he said he
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would. This is a significant advance and will do much to address a major cause of dispute and disharmony. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 89.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
90 Clause 109, page 61, line 24, after 'provision' insert 'as is mentioned in subsection (1) or (1A)'.
91 Clause 110, page 61, line 28, at end insert—
'The notice mentioned in section 109(1A) may suffice as a notice of intention to withhold payment if it complies with the requirements of this section.'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 90 and 91, to which I have already spoken.
Moved, That the House do agree with the Commons in their Amendments Nos. 90 and 91.—(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
92 Clause 112, page 62, line 23, leave out 'purporting to make' and insert 'making'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 92.
Moved, That the House do agree with the Commons in their Amendment No. 92.—(Lord Lucas.)
AMENDMENT TO COMMONS AMENDMENT No. 92
92A Line 1, after ("insert") insert ("'which has the effect of'").
Lord Chapple: My Lords, I beg to move Amendment No. 92A as an amendment to Commons Amendment No. 92.
The issue of pay-when-paid is fairly important, but is not very clearly understood owing to the fact that many mumbled words have been uttered. What does the phrase mean? It means that if you work for a client who works for a client, and he is not paid or payment is delayed, he passes the cost on to you. That causes a great many bankruptcies in small and medium-sized firms in the building industry. Admittedly, in the rest of the Bill before the House the Government attempt to remedy that problem; in other words, to put a stop to what amounts to the blackmail of such companies.
Had the original wording remained, I should have been satisfied and should not have moved an amendment. With these five words, I seek to restore to the Bill the original meaning. I hope the Government will think again about pursuing this course. I beg to move.
Moved, That Amendment No. 92A, as an amendment to Commons Amendment No. 92, be agreed to.— (Lord Chapple.)
Viscount Ullswater: My Lords, Commons Amendment No. 92 narrows the prohibition of conditional payment provisions to the making of straight pay-when-paid contract conditions ineffective. I

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understand that there was considerable discussion about this in the other place, especially when the Latham Report, in Recommendation 8.10, uses these words:
"any attempt by a contractor to include a clause in a bespoke contract form with the effect of introducing "pay-when-paid" conditions should be explicitly declared unfair and invalid".
That is virtually the text of the amendment now moved by the noble Lord, Lord Chapple. I am glad that the other place had difficulty with "purporting to", because I found that equally difficult to interpret.
Payment under a construction contract is always going to be conditional on something. In most instances the work has to be certified by somebody before a payment can be made. What the Bill addresses is the practice of a main contractor claiming that it is able to withhold payment because it has not been paid as a result of the certificate, or not paid enough. However, Clause 112 is still only part of the matter. The parties to a construction contract must, under Clause 109 of the Bill, provide an adequate mechanism for determining what payments become due under the contract, and when; that is, payers must explain the timing and the amounts of the sums due. That may still include the event of a certificate being issued, but it must no longer rest upon the handing over of a sum of money further up the line.
I have been advised, like the noble Lord, Lord Chapple, that some parts of the construction industry are unhappy about the narrowing of the contract conditions to merely "pay-when-paid", and would certainly want to see more conditional payment terms being made ineffective. They are unhappy that the "adequate mechanism" will not be sufficiently strong to take up the recommendation in Latham that I quoted. This gives a wider interpretation to conditional payment provisions than the words in the Bill as originally drafted. As I have said before, the scheme for construction contracts cannot or should not be the first fallback position for any weakness in a construction contract; but it will be very important for the department to get the scheme right so that it can support the industry in a sensible way. There is now the new opportunity offered by the legislation to call in the adjudicator if there is a dispute.
Having said that, I wish to ask my noble friend Lord Lucas whether he understands that there is still a worry among the subcontractors and specialists in the industry that the sensible provisions in the Bill will and can be circumvented. If that is the case, could my noble friend give some comfort to those in the industry who are still worried by saying that if time proves that these concerns are justified, the Government will undertake to have another look at these conditional payment provisions? I believe that all noble Lords would want to see these sensible provisions work effectively. Therefore I am, perhaps reluctantly, prepared to support the government amendment, and to reject the amendment of the noble Lord, Lord Chapple.
Lord Howie of Troon: My Lords, a week or so ago I attended a dinner where a Government Minister, Mr. Roger Freeman, said that this Bill will introduce a statutory right of payment by instalments and a specified final date for payment for all construction contracts and
1350
outlaw the practice of pay-when-paid. His remarks were important. He presumably believed that the Bill outlawed the practice of pay-when-paid. I imagine that in drawing up their amendments in the other place the Government believed that they outlawed that practice. However, nobody else believes that. The Bill as it stands, with the proposed Commons amendments, does not outlaw the practice, regardless of what the Minister might say.
I give the Government credit for moving a long way in the right direction. However, for them to accept the amendment moved by the noble Lord, Lord Chapple, would be to move further in the right direction, and that would be very welcome.
Lord Lucas: My Lords, the noble Lord, Lord Chapple, has pressed us to reconsider an amendment to prohibit contractual conditions with the effect of pay-when-paid. We believe this is unnecessary, since we have banned pay-when-paid clauses, as we set out to do, and that to go any further would leave a degree of uncertainty in the effect of these provisions. If a provision in a contract has the effect of pay-when-paid, it is a matter of pay-when-paid. We do not see that the words in the amendment will add anything to the effectiveness of the Bill. They will merely cause confusion.
We have heard something about the apparent intention of the Latham Report on this matter. The concern that Sir Michael was asked to address was that the payment chain was becoming so extended that small construction companies at the bottom of the chain were having to wait months for their money. That was because of the pay-when-paid system, whereby payments made by a main contractor would await payment to them by the client. We believe that that is a well-understood concept and that the wording in this part of the Bill is sufficient to deal with it particularly when backed up, as my noble friend Lord Ullswater said, with requirements elsewhere in the Bill for an adequate payment mechanism.
Clearly, as time goes on, we shall be able to monitor the success of this legislation. In an industry where contracts are frequently very long, it might take us quite a while to be sure whether or not we have got matters right. If events show that we have missed the mark in significant ways, we will revisit the issue of fair contracts legislation and make the appropriate changes.
However, legislation should not be seen as an end in itself. The Bill is meant only to be a stepping-stone in the drive to build better relationships within the construction industry and to work towards the wider aims outlined by Sir Michael Latham in Constructing the Team.
I hope that in that context and with those assurances the noble Lord will feel able to withdraw his amendment.
Lord Chapple: My Lords, I beg leave to withdraw my amendment.
Amendment No. 92A, as an amendment to Commons Amendment No. 92, by leave, withdrawn.
On Question, Motion agreed to.
6.30 p.m.
COMMONS AMENDMENTS
93 Clause 113, page 63, line 22, at end insert—
'(5) Regulations under this section shall not be made unless a draft of them has been approved by resolution of each House of Parliament.'.
94 After Clause 115, insert the following new clause—
CROWN APPLICATION
'.—(1) This Part applies to a construction contract entered into by or on behalf of the Crown otherwise than by or on behalf of Her Majesty in her private capacity.
(2) This Part applies to a construction contract entered into on behalf of the Duchy of Cornwall notwithstanding any Crown interest.
(3) Where a construction contract is entered into by or on behalf of Her Majesty in right of the Duchy of Lancaster, Her Majesty shall be represented, for the purposes of any adjudication or other proceedings arising out of the contract by virtue of this Part, by the Chancellor of the Duchy or such person as he may appoint.
(4) Where a construction contract is entered into on behalf of the Duchy of Cornwall, the Duke of Cornwall or the possessor for the time being of the Duchy shall be represented, for the purposes of any adjudication or other proceedings arising out of the contract by virtue of this Part, by such person as he may appoint.'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 93 and 94, to which I have already spoken.
Moved, That the House do agree with the Commons in their Amendments Nos. 93 and 94.—(Lord Lucas)
On Question, Motion agreed to.
COMMONS AMENDMENT
95 Clause 118, page 66, line 16, leave out 'such' and insert 'the bodies representative of architects which are incorporated by royal charter and such other'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 95. It may be convenient at the same time if we consider Amendments Nos. 96 to 104, Amendments Nos. 126 to 128 and Amendments Nos. 130 to 132. Amendment No. 95 would add the specific requirement for the new Architects Registration Board to consult bodies of chartered architects—and this means the Royal Institute of British Architects and its equivalents in Scotland and Northern Ireland—before prescribing qualifications and experience needed for entry to the register of architects. The Bill as drafted already implies this. It requires the board to consult such professional and educational bodies as it thinks appropriate. Our view is that it would be unreasonable for the board to fail to consult the chartered bodies including the RIBA, which is the professional organisation to which 70 per cent. of architects belong. Clearly, it would be right for it to consult the bodies that it thought appropriate in respect of the remaining 30 per cent. of architects.
Nevertheless, this amendment aims to reassure the RIBA that it will continue to have a major input in the setting of prescribed qualifications by putting on the face of the Bill the requirement to consult it. We
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recognise that the RIBA plays a predominant role in architectural education and we do not wish the board to duplicate that role. But, at the same time, we must preserve the right of the board to determine the qualifications and experience necessary for registration as an architect. We believe that Amendment No. 95 strikes the right balance between recognising the RIBA's role and ensuring that the board can carry out its duties properly.
I turn to Amendments Nos. 96 to 103 and Amendment No. 128. Clause 119 creates the new disciplinary offence of professional incompetence and replaces the existing offence of disgraceful conduct with unacceptable professional conduct. It increases the level of protection given to the public by making bad work as well as bad behaviour a disciplinary offence. These amendments add the word "serious" before "professional incompetence". We have accepted the concerns of the profession that otherwise we may face the risk, albeit a small one, of trivial or vexatious allegations being made.
Amendment No. 104 and Amendments Nos. 130 to 132 bring the maximum penalty for practising under the title "architect", while not registered applicable in Northern Ireland, into line with that for the rest of the United Kingdom; namely, level 4 on the standard scale. Amendments Nos. 126 and 127 remove uncertainty and bring the drafting up to date. They have no other effect. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 95.
On Question, Motion agreed to.
COMMONS AMENDMENTS
96 Clause 119, page 68, line 6, after `(b)' insert 'serious'.
97 Page 68, line 17, after 'or' insert 'serious'.
98 Page 68, line 20, after 'or' insert 'serious'.
99 Page 68, line 33, at end insert 'serious'.
100 Page 68, line 41, at end insert 'serious'.
101 Page 69, line 12, after 'or' insert 'serious'.
102 Page 69, line 20, at end insert 'serious'.
103 Clause 120, page 70, line 44, after 'or' insert 'serious'.
104 Clause 121, page 71, line 16, leave out from 'registered); to end of line 17 and insert 'for the words from "to a fine" to "therefor:" substitute "to a fine not exceeding level 4 on the standard scale:".'.
Lord Lucas: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 96 to 104, to which I have already spoken.
Moved, That the House do agree with the Commons in their Amendments Nos. 96 to 104 —(Lord Lucas.)
On Question, Motion agreed to.
COMMONS AMENDMENT
105 After Clause 127, insert the following new clause—
REGENERATION AND DEVELOPMENT: WELSH DEVELOPMENT AGENCY
'.—(1) In the Welsh Development Agency Act 1975, after section 10 insert
"Financial assistance for regeneration and development.
10A.—(1) The Secretary of State may appoint the Agency to act as his agent in connection with such of his functions mentioned in subsection (2) below as he may specify.
(2) The functions are—

(a) functions under sections 126 to 128 of the Housing Grants, Construction and Regeneration Act 1996 (financial assistance for regeneration and development), so far as they relate to—

(i) financial assistance which the Agency has power to give apart from this section; or

(ii) financial assistance given under that Act in pursuance of an agreement entered into by the Secretary of State for Wales before the coming into force of this section, or

(b) functions of the Secretary of State in relation to financial assistance given by the Secretary of State for Wales under sections 27 to 29 of the Housing and Planning Act 1986.

(3) An appointment under this section shall be on such terms as the Secretary of State, with the approval of the Treasury, may specify; and the Agency shall act under the appointment in accordance with those terms.
(4) The Agency's powers in relation to functions under an appointment under this section include the powers it has in relation to functions under subsection (3) of section 1 by virtue of subsections (6) and (7) of that section."
(2) In section 2(8) of that Act, after "declared that" insert ", except as provided by section 10A below,".'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 105. I should like to speak at the same time to Amendment No. 115. Amendment No. 105 inserts a new clause after Clause 127 in Part IV of the Bill. It allows the Secretary of State for Wales to appoint the Welsh Development Agency to act as his agent in Wales, first, on regeneration and development issues— where these functions fall within the Welsh Development Agency's powers— and, secondly, on the administration of urban investment grant agreements. This mirrors the powers which the Secretary of State for the Environment has already used to appoint English Partnerships as his agent for regeneration in England. Amendment No. 115 is consequential and will bring the new clause into force the usual two months after Royal Assent.
Moved, That the House do agree with the Commons in their Amendment No. 105.—(Earl Ferrers.)
Lord Williams of Elvel: My Lords, we have no disagreement with the Commons amendment. I should like to make one small point that I hope the Minister will bring to the attention of his right honourable friend the Secretary of State for Wales. I must report that the Welsh Development Agency does not have a very good record for paying its bills. Having said that, I very much hope that the noble Earl will pass on that remark to his
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right honourable friend. On numerous occasions in Wales the WDA has not paid its bills on time. I hope that that will cease as of now.
Earl Ferrers: My Lords, if the Welsh Development Agency reads Hansard the practice will probably cease. I will ensure that the observations of the noble Lord are passed on to the appropriate quarter.
On Question, Motion agreed to.
COMMONS AMENDMENT
106 Clause 129, page 74, line 21, at end insert—
`and regulations made under paragraph (c) may provide for particular questions arising under the regulations to be determined by the authority.'
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 106. I should like to speak also to Amendments Nos. 107 to 109. The purpose behind these minor amendments is to increase the flexibility of the relocation grant provisions and to bring them more into line with the provisions for renovation grants.
Moved, That the House do agree with the Commons in their Amendment No. 106.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
107 Clause 131, page 76, line 13, leave out 'in the same area a dwelling of the same type' and insert 'a comparable dwelling in the same area'.
108 Page 76, line 33, at end insert—
'(8A) Regulations may make provision requiring any information or evidence needed for the determination of any matter under this section to be furnished by such person as may be prescribed.'
109 Clause 132, page 77, line 13, at end insert—
'( ) The consent of the Secretary of State for the purposes of subsection (3)(b) may be given either generally or in relation to any one or more specified authorities or descriptions of authority or in relation to particular cases or descriptions of case.'
110 Before Clause 138, insert the following new clause—
EXISTING HOUSING GRANTS: MEANING OF EXEMPT DISPOSAL
'.—(1) Section 124 of the Local Government and Housing Act 1989 (relevant and exempt disposals for purposes of housing grants) is amended as follows.
(2) In subsection (3) (exempt disposals), for paragraph
(c) substitute—
"(c) a disposal of the whole of the dwelling in pursuance of any such order as is mentioned in subsection (4A) below;".
(3) After subsection (4) insert—
"(4A) The orders referred to in subsection (3)(c) above are orders under

(a) section 24 or 24A of the Matrimonial Causes Act 1973 (property adjustment orders or orders for the sale of property in connection with matrimonial proceedings),

(b) section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate).

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

(d) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents);".'.

111 Clause 142, page 83, line 3, at end insert '103(IC),'.
112 Page 83, line 4, leave out 'and 105(4)' and insert', 105(4) and 113(5)'.
113 Clause 144, page 83, line 19, after 'sections' insert '(Existing housing grants: meaning of exempt disposal),'.
Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 107 to 113.
Moved, That the House do agree with the Commons in their Amendments Nos. 107 to 113.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENT
114 Clause 146, page 83, leave out lines 41 and 42 and insert—
'(1) The following provisions of this Act come into force on Royal Assent—

(a) section 142 (orders, regulations and directions),

(b) sections 144 to 147 (extent, commencement and other general provisions).'.

Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 114. At the same time, I should like to speak to Amendments Nos. 117 to 125 and Amendment No. 129. Amendments Nos. 114 and 117 correct a drafting oversight. They provide for the powers in Clause 142, which enable different provisions to be made in different cases for the orders, regulations or directions to be brought into force, as is becoming usual practice, on Royal Assent. Amendment No. 118 removes the words which your Lordships inserted in the normal way at Third Reading to avoid questions of financial privilege. The other amendments adjust certain consequential amendments in Schedule 1 and one of the repeals in Schedule 3 relating to Part I of the Bill.
Moved, That the House do agree with the Commons in their Amendment No. 114.—(Earl Ferrers.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
115 Clause 146, page 84, line 3, leave out '127' and insert '(Regeneration and development: Welsh Development Agency)'.
116 Page 84, line 4, at end insert—
'section (Existing housing grants: meaning of exempt disposal) (existing housing grants: meaning of exempt disposal),'.
117 Page 84, leave out lines 7 and 8
118 Clause 147, page 84, leave out lines 19 to 22.
119 Schedule 1, page 85, line 19, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.
120 Page 85, line 23, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.
121 Page 86, leave out lines 14 and 15 and insert 'In section 535(1)(a) of the Housing Act 1985 (exclusion of assistance under Part XV of that Act where grant application pending
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or approved), for the words from "an improvement grant" to "Part XV" substitute'.
122 Page 86, line 26, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.
123 Page 86, line 39, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.
124 Page 86, line 43, leave out from 'subsection' to 'of' and insert '(5b) for "Part VIII of the Local Government and Housing Act 1989" substitute "Chapter II'.
125 Page 87, line 12, leave out from 'substitute' to end of line 13 and insert 'or under section 12 or 27 of the Housing Grants, Construction and Regeneration Act 1996 (renovation grants or HMO grants: purposes)".'.
126 Schedule 2, page 91, line 47, leave out 'from "by the removal" to "against the removal or determination,"' and insert "'by the removal" onwards'.
127 Page 92, line 9, at end insert; and on an appeal under this section the Court may make any order which appears appropriate, and no appeal shall lie from any decision of the Court on such an appeal.".'.
128 Page 94, line 48, after 'or' insert 'serious'.
129 Schedule 3, page 96, line 25, after '30' insert ', the words "The Local Government and Housing Act 1989 section 138(1)".'.
130 Page 97, line 12, column 3, leave out 'the words from "and to" to "therefor" and'.
131 Page 97, line 18, at end insert—

'1977 c. 45.

Criminal Law Act 1977.

In Schedule 6, the entry relating to the Architects Registration Act 1938.'.

132 Page 97, line 21, at end insert—

'1995 c. 40.

Criminal Procedure(Consequential Provisions) (Scotland) Act 1995.

In Schedule 2. in Part II, the entry relating to the Architects
Registration Act 1938.'.

Earl Ferrers: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 115 to 132 en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 115 to 132.
On Question, Motion agreed to.

Statutory Instruments (Production and Sale) Bill
6.40 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Earl Howe.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Dean of Harptree) in the Chair.]
Clause 1 [Instruments etc. produced and sold under authority]:
Lord Graham of Edmonton: Perhaps the Committee will allow me to point out that there has been a slight delay. However, I believe the Deputy Chairman can now call upon the noble Lord, Lord McNally.
Lord McNally Lord McNally moved the amendment:
Page 1, line 5, leave out ("and be taken always to have had effect").
The noble Lord said: I thank the Labour Chief Whip for that intervention and also make the claim for a new sprint record down the Royal Gallery. The amendment is important. I draw the Committee's attention to the Order Paper. Alongside "Statutory Instruments (Production and Sale) Bill—Committee", we see a little squiggle. As a new boy to this Chamber. I looked up what the "squiggle" means. It indicates Bills set down before the expiry of the recommended minimum interval between stages.
I would have thought that the first thing the Minister should explain in responding to my amendment, and indeed to the Committee, is why the Bill needs to be speeded through in this way. As I understand the position, although it is related to the HMSO privatisation, it has been clarified firmly in the other place that there is not a direct consequential link between the two pieces of legislation. This legislation is not required to privatise HMSO and, even if it were, that would not be justification for dealing with the measure in this way. Why are we being asked to rush through a piece of retrospective legislation which covers a period of over 50 years? It is a serious point.
I want to make clear to the Minister why we on these Benches tabled the amendment. Sometimes amendments are tabled as probing amendments; sometimes they are tabled as helpful, constructive amendments; but sometimes amendments are tabled to draw a line in the sand and to make clear to the Executive that it cannot ride roughshod over the rights of Parliament.
There is a suspicion on these Benches that too often, particularly in recent weeks, the Government have been rushing things through this Chamber. They have been acting in a high-handed manner and behaving in some respects as though they almost believe that they have less than 200 days left to do anything. That is a recipe for bad government and bad legislation.
We on these Benches say most clearly that whichever party occupies the Government Benches, we will insist that proper procedures are carried through when legislation comes before this Chamber, not simply to employ the usual tactics of delay, but particularly because in cases such as when the Government wish to move a public asset into the private sector, expensive errors of judgment can be made and it is the duty of Parliament to check and check again.
A point made in the debate in the other place was that the Government have known of this need for retrospective legislation for well over one year when they first trawled through the implications of the privatisation of HMSO. Again. there is a massive
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question mark as to why, if that was known over one year ago, the legislation must come before this Chamber in this curious manner.
Our amendment is intended to question the whole status of retrospective legislation. We shall be interested to know what caused the Government to see the need. Was there a legal challenge or potential legal challenge? It will be interesting to know whether the Government now feel, since they are under such self-imposed haste and pressure, that that is the end of the matter or whether other anomalies exist that will need to be unpicked. That is the danger of the way in which the Government are going about their business at the present time.
Our debate on Thursday, the last day of this Session, in relation to privatisation of recruitment into the Civil Service, is another example. Even though the Government may feel that they are in their death throes and that their role now is to rifle through the till to see whether there are any trinkets left to be hocked, it is the duty of the Opposition to dig in our heels and stop the Government behaving in that way—riding roughshod over Parliament. We would like to make clear that the Third Reading of this Bill will take place after the Recess. We on these Benches want to consider the implications of the Committee stage. We may wish to table further amendments at Third Reading.
It was interesting to read the debate in the other place. One intervention in particular caught my eye. It was made by the honourable Member for South Hams Mr. Anthony Steen, a Member of the Government Benches. He threw up the interesting fact that we have dealt with over 8,000 statutory instruments in the past two years. Mr. Steen gave what I felt was a profound gypsy's warning to all parliamentarians concerned with the duties and responsibilities of this House and the other place. He said,
"There is a danger that we will pass more and more statutory instruments and find a new device for getting them printed in new and more exciting places, without tackling the issue".—[Official Report, Commons, 3/7/96; col. 1000]
It is because the Government are not tackling the issues that we propose this amendment today. It is because the Government seem to be adopting a cavalier attitude to national assets and for the way in which Parliament carries out its responsibilities that we strongly advocate that the Committee support the amendment. I beg to move.
Lord Graham of Edmonton: Always anxious to avoid the noble Baroness, Lady Miller, shaking her head as vigorously at me as she did at the noble Lord, Lord McNally, I shall use different words but ones which carry the same message. The Government have got themselves into a mess on this Bill. They have not been frank enough to say so, but when one looks at a situation such as that outlined by the noble Lord, Lord McNally, one realises that it could have been avoided. From last November until now the need for this legislation was patently clear. We on these Benches can understand why, when things are examined afresh, one must be extremely careful. We are conscious of the fact that it is not a question of looking to do damage or of damage limitation.

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When the Government drew to our attention the desirability of having such legislation, we immediately saw the problems and we are still as unconvinced as noble Lords on the Liberal Democrat Benches that there is no relationship between the privatisation of HMSO and this Bill. Those who are bidding for the tender for the privatised HMSO are bound to have some interest in whether there is a contingent liability which may explode in their face before, during or after any court case.
We can well understand the Government's desire to sell the business and to make arrangements for that. Indeed, the contract has been passed by the House this afternoon. We can well understand that the Government are anxious to make the asset as clean and as sweet as possible.
The Minister is not part of the usual channels. This is very much a question of the Whips and the business managers trying to reach a modus operandi. When the Liberal Chief Whip and I were faced with this matter, it would have been perfectly possible to extend the time which this House could devote to the Bill, but the Minister well knows that that would have been at the cost of a row, which would perhaps more than somewhat damage a delicate situation.
The noble Lord, Lord McNally, made the crucial point that because we on these Benches—that is, the whole of the Opposition Benches—are far from convinced that there is no link between the privatisation which is proceeding and this Bill, we want to exercise the rights that we do have. Let us be fair about this. Last week my noble friend Lord Richard on behalf of these Benches challenged the Leader of the House at the Dispatch Box to make it absolutely certain that this week, before the Recess, we would have to deal only with the Committee stage of this Bill. Since then we have been advised that it is perfectly proper and in order, in the event of no amendments being carried, for the Report stage also to be dealt with this evening. Again, we have no objection to that—with the caveat that has been there all along: we believe that this House should be able to return to this matter on Third Reading on 15th or 16th October. There could very well be happenings which will be of interest to this House.
We on these Benches fully understand that these things happen. We are constantly torn between those who say that we should never ever shorten the gaps between legislative stages and those who say that if the Government ask for something, they are entitled to have it. The Government are, of course, entitled to get their business through. It is unheard of that the Government do not get their business through under normal procedures without the full collaboration of all the Benches. There may be disagreements about the content of the business, but the Business Statement on the next week's business cannot proceed unless by consensus. That has been the position up to now and I believe that it will continue to be the position after tonight. If the amendment, which we support, is defeated and if the Motion that the clause should not stand part of the Bill is debated but the clause remains in the Bill, this House will still have had its opportunity.
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As the noble Lord, Lord McNally, pointed out, it is a great sadness that matters of crucial importance are spatchcocked into the last few days of the Session rather than being dealt with at some other time. I make no complaint about the Minister because the noble Earl is always courteous and anxious to please. He will give a full account of his department. Nevertheless, it is a great sadness that more time could not be found. We had a two-day debate on the future of the constitution and the House of Lords during a very slack period. Better management of our time might have provided some more time in which perhaps more than one amendment could have been tabled on this important and serious issue.
I am grateful to the noble Lord, Lord McNally, for having tabled the amendment which has provided us with the opportunity of this debate. More importantly, it has provided the Minister with an opportunity to explain the non-link between the Bill and the privatisation of HMSO and the reason why the Government would have wished all stages to be taken tonight. Let us be clear about it: that was their first proposal. I am not breaching any secret in saying that. The Government would have preferred all the business on this Bill to be taken in one stage. We support the Liberal Democrat Benches, who have taken a keen interest in this matter, in trying to ensure that this House is given a fair crack of the whip. I look forward to hearing what the Minister has to say.
Earl Howe: I confess to being absolutely astonished by what I have just heard from the noble Lords, Lord McNally and Lord Graham of Edmonton. It is as though the Second Reading debate did not take place. It is as though the full explanation that I gave of the need for the Bill has not even been considered by noble Lords.
The noble Lord, Lord McNally, asked why there was urgency with regard to the Bill. I must advise the noble Lord that he was a little late in saying that because he could have mentioned any objections when I moved the Motion that the House do now resolve itself into Committee on the Bill. In a nutshell, there is urgency about removing a palpable threat of obstruction to the courts and possibly even of technical acquittals in the courts as a result of an anomaly, a potential loophole, that has recently been discovered. Indeed, that loophole has been in existence for the past 30 years but we have not known about it. That has nothing to do with this Government's actions. We have discovered it only recently, but the practice—
Lord Harris of Greenwich: Can the noble Earl tell us on what date that was discovered?
Earl Howe: Yes, I am coming to that. Having drawn attention to the defect in the statute, it is absolutely necessary to resolve it as speedily as possible. I believe that the only responsible course of action is for your Lordships and the other place to rectify it as soon as possible.
The noble Lord, Lord Graham, professed himself to be unconvinced that there is no relationship between this Bill and the privatisation of HMSO. The noble Lord referred to a possible contingent liability for bidders.

1361
There would be no contingent liability for bidders whatever because if the Bill is not passed, all that would happen would be that all the printing of statutory instruments would be carried out by the public sector, by the so-called "residual HMSO". As I explained the other day, that is perfectly possible, although it would be an expensive course of action which would be likely to increase the cost of statutory instruments.
The noble Lord, Lord Graham, said that the Government have got themselves into a mess, echoing the noble Lord, Lord McNally, who said that we have known for well over a year that something is wrong. I am absolutely astonished by both of those statements. The Government have not known for well over a year. The Government identified a potential problem in preparing for the privatisation. We then took legal advice on the best solution available. As soon as that solution was identified—namely, the need for primary legislation—the intention to legislate was announced and the Bill was presented to Parliament. There was absolutely no delay whatever.
Perhaps I may turn to the amendment. As I understand it—
Lord Harris of Greenwich: I am grateful to the noble Earl for giving way. I hoped that he would address himself to the question that I put; namely, on what date did the Government first discover that there was a problem? I did not ask when they had taken legal advice but on what date this matter became clear to them.
7 p.m.
Earl Howe: I shall obtain a precise answer for the noble Lord, Lord Harris, if it is available. I am glad to answer questions in as much detail as I can. But I do not have the precise date in front of me.
Perhaps I may turn to the amendment. As I understand it, the intention is to remove from the Bill the retrospective powers in the Bill, to put beyond doubt the evidential status of copies of statutory instruments not printed directly by HMSO. But, it will leave intact the future power of HMSO to contract out SI printing. Any copies printed in the future by third parties would be valid, but those already printed would not be. I find that odd both because this would seem to be a pointless and inconsistent measure and also because we have hitherto enjoyed broad cross-party support for the retrospective elements of the Bill both in your Lordships' House and in the other place.
This amendment is a recipe for chaos. The debates on this Bill in your Lordships' House and the other place have inevitably drawn attention to the defects in current arrangements for printing SIs and to the possible technical defence in proceedings for breaching them. It can only have increased the chance of arguments about the status of SIs obstructing the courts and possibly of defendants being acquitted on a technicality. That is why the Government have sought urgent passage of the Bill, which would eliminate the problem if passed unamended.
However, if the amendment were to succeed, the Bill would not resolve the problem. On the contrary, it would draw attention to it. We would have highlighted
1362
a defect in statute and then failed to correct it, an approach which may not be seen in all quarters as entirely responsible.
Lord Richard: Before the noble Lord sits down, we all saw the 7th Cavalry arrive from the Box with the information requested by the noble Lord, Lord Harris. Can the noble Earl now give us the date on which the Government believe they were aware of the matter?
Earl Howe: I cannot; but I am advised that the defect in the statute was discovered around mid-April. I cannot be more precise than that.
The principle of retrospection was referred to by the noble Lord, Lord McNally. I agree that legislating retrospectively should only be undertaken when it is absolutely necessary and in accordance with established principles. That is precisely the case here. If the threat to the courts is to be removed, there is no alternative but to confirm the status of existing copies of SIs. That is, by definition, a retrospective act.
But the Government are also acting in accordance with the settled principle that retrospection may be justified where it confirms prior, albeit mistaken, genuine expectations of the meaning of the law. Here, HMSO and all concerned with it sincerely believed that contracting out SI printing was lawful, and the Bill merely confirms that expectation.
The noble Lord, Lord Graham, accused the Government of wanting to look for rows and disagreements. I hope I have persuaded him that nothing could be further from the truth. I cannot overstate the need to maintain the retrospective powers in this Bill. Without them, the courts risk becoming burdened by needless argument and obstructed by the need to have individual SIs specifically proved.
Lord Graham of Edmonton: Perhaps the noble Lord will allow me to intervene. I made a statement to the effect that the Government, as always, are anxious to have a row about the management of business. First, they sought to persuade the Liberal Democrat Benches and these Benches that the urgency of the matter was such that they should welcome having all the stages of the Bill taken on the same day. Secondly, as recently as last Thursday, the Leader of the Labour Benches received from the Leader of the House an assurance that the only business that would be dealt with on this Bill this week would be the Committee stage this evening. I see the Government Chief Whip shakes his head and we must read the record.
We have acknowledged that in addition a standing order, in the absence of any amendment being carried, allows for Report stage to be taken at the same time. The noble Lord, Lord McNally, and I have asked the Minister to confirm that it is not the Government's intention to do other than that this side of the Recess and to allow Third Reading to be taken in the overspill. If the Minister can assure us that it is not the Government's intention to drag out this matter, there will be no disagreement, but I can assure him that there will be a row if, by one means or another, the

1363
Government intend to ask permission of this House to proceed on this Bill other than by taking Committee and Report stages this evening.
It is not in the best interests of the House—indeed it is almost unprecedented—that business proceeds without the approval of all sides. The Government know that they do not have the approval of the Opposition Benches this side of the Recess to do other than deal with the Committee and Report stages of this Bill.
Earl Howe: I am a little surprised that the noble Lord, Lord Graham, should raise these questions under the heading of this amendment. I should have thought that the time to have done it was when I moved the Motion that the House resolve itself into a Committee on the Bill. Nevertheless, we seem to be having a fairly wide-ranging discussion and I shall endeavour to assist the noble Lord and the House so far as I am able.
The noble Lord is perfectly right. There has been no usual channels agreement to complete the passage of this Bill before the Summer Recess. However, I believe that there are good, substantive reasons why the Bill should he enacted before the House goes into Recess and I outlined those reasons. Therefore, I can tell the noble Lord that my noble friend the Leader of the House intends to move that the Bill be read a third time immediately after Questions tomorrow.
Lord Harris of Greenwich: That, of course, is a quite disgraceful statement. In 20 years in this House I have not known a single case in which a government of the day, whatever their political persuasion, have done that. If the noble Viscount, Lord Whitelaw, was the Leader of the House, it would not be done on this occasion either.
Earl Howe: I do not think that that is a remark which, in the cool light of day, the noble Lord, Lord Harris, will wish to stand by. It is a gross affront to my noble friend the Leader of the House.
Lord Richard: Perhaps the noble Earl will permit me to speak. He has now in effect made a Business Statement. As I understand it, the Business Statement is that tomorrow his noble friend the Leader of the House will move a Motion that the Third Reading be taken tomorrow. The Motion will be moved tomorrow against the views of the Opposition with no agreement through the usual channels. As soon as the Motion has been moved— no doubt it will be rammed through with a government majority in this House— we shall immediately move to the Third Reading. Is that what the Government are proposing for this House? If so, it is monstrous and unacceptable.
Lord Strathclyde: I had no intention of playing a part in this little debate. Frankly I am surprised that we should have this exchange of words at this stage of the Bill. It has been clear since last week that the Bill did not form part of the usual channels arrangements. It is of profound regret that that is the case. But my noble friend the Leader of the House also agreed that the
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Business of the House Motion that he moved last week would not include this Bill so far as it went and that he would return to the House in order to make a further statement. My noble friend Lord Howe has this evening confirmed that, assuming that the Committee stage proceeds and the Bill is unamended, using the provisions under the standing orders that the Report is received this evening, he will come forward with his statement asking the House for its permission to move the Third Reading.
There is no trickery here. There is no attempt to ram the Bill through this place. We had a Second Reading some days ago. The debate has been well previewed. This place will be asked to make a decision tomorrow. I do not see that noble Lords opposite can argue with that. Perhaps I might suggest to the noble Lord the Leader of the Opposition—before he gets to his feet—that it might serve the interests of this place better were we to continue with the Committee stage so that this place has a fair appreciation of what concerns the Opposition so much about the Bill.
Lord Richard: I am grateful to the noble Lord the Chief Whip for making that statement. Perhaps I may tell him what concerns me. When the Bill first came here we were asked to expedite it. We gave it a Second Reading, and it went through in the usual way. We then agreed to take the Committee stage with a truncated timetable. We agreed to that, so we are doing it tonight. When we agreed to do that, nothing was said about Report or Third Reading. Very well, the Bill is getting its Committee stage tonight.
The Government are using the provisions of a Standing Order to have a Report stage tonight—again truncated. Now we are told that they are not only truncating the Committee stage and the Report stage, they are also going to truncate the Third Reading of the Bill, despite the fact that, as far as I know, the usual channels have not discussed it, and despite the fact that it was made clear last week that we would not agree to that. It is to be put to this place tomorrow. I use the phrase again: it will be rammed through with a government majority. I say to the Government Chief Whip that that is not the way in which you ought to behave, particularly in relation to a Bill which we are told has nothing to do with the privatisation of HMSO. I have never believed that. I believe it even less tonight.
Lord Strathclyde: I do not wish to pre-empt the debate that will take place tomorrow afternoon, and the comments that my noble friend the Leader of the House will make. All I have done this evening is seek to clarify the situation. I do not believe that anything my noble friend Lord Howe said was a great surprise to the noble Lord the Leader of the Opposition or to noble Lords on the Liberal Democrat Benches. I understand that they were aware of the decision of my noble friend the Leader of the House that if this place approved the Committee stage and Report stage this evening he would tomorrow move the Motion for the Third Reading.

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Furthermore, that honours entirely the commitment my noble friend made when he moved the Business of the House Motion last week, that he would return to ask the permission of this place before that Third Reading was taken.
Earl Howe: I readily acknowledge that the problem for the noble Lord, Lord Richard, is that he does not believe me when I tell him that the Bill has nothing to do with the privatisation of HMSO. That is the case. It has nothing to do with the privatisation of HMSO. The bidders have not expressed one jot of interest in the Bill. We have had hundreds of inquiries from bidders. Not one of them has related to the Bill. That shows the measure of concern that they have for it. They do not care whether the printing of SIs is part of HMSO or is not part of it. It is such a tiny proportion of HMSO's turnover as not to make any difference.
I say again to the noble Lord, that there are remedies available to us if the Bill is not approved. The remedy is that SIs will have to be printed in-House. That is possible, but it does not do a service to those who purchase SIs; it does not do a service to public libraries which might want to stock them, because it will put up the cover price. It is not so much a question of the Government wanting to ram through a piece of legislation as for this place to act in a responsible manner towards the law of the land.
7.15 p.m.
Lord Graham of Edmonton: Perhaps the Minister will allow me to comment. If he is saying that the Bill is not needed to do what is required, but that in order to get the Bill tomorrow he and his colleagues are prepared to face a breakdown in discussions between the usual channels and have come to the conclusion that they would rather have that breakdown than do something for which the Bill is not necessary, that makes it a very sad day. If between today and tomorrow the Government would care to reflect that there are other means of achieving their ends, other than having Third Reading tomorrow, that will be a major step towards restoring normal relations. But if they persist, they are telling these Benches that when there is a choice between administrative convenience and the usual channels, they prefer administrative arrangements. That is not good for the future of this place.
Lord Harris of Greenwich: The person who is in charge of these arrangements is of course not the Leader of the House; it is Mr. Heseltine who has decided the timetable in which we are discussing the Bill. He showed an extraordinary degree of arrogance over the privatisation of the Recruitment and Assessment Services. Guarantees were given by the Leader of the House on the Floor of this place. They were dishonoured by Mr. Heseltine when he came to the committee which was considering the matter.
On that occasion, we were given undertakings that the privatisation would not be pushed through until the Government had had the opportunity to consider the report of the Committee on Public Service. When Mr. Heseltine gave evidence he made it abundantly clear that
1366
whatever the committee decided would not make the slightest difference because he was going to proceed with it whatever we said. On this occasion, too, despite all the Minister's denials, it is obvious that with the privatisation agenda all has to be pushed through before the Summer Recess, come hell or high water. That is Mr. Heseltine's decision.
The Leader of the House is merely Mr. Heseltine's messenger. The Government are prepared to rip up all the normal arrangements with regard to discussions between the usual channels about the organisation of public business in this place. If the Government continue in that way, I promise them that they will pay a heavy price in the future.
Earl Howe: The noble Lord, Lord Harris, may huff and puff, but he has not produced one argument against the substance of the Bill. I shall turn briefly to the amendment which I think we were discussing some time ago. The retrospective powers contained in the Bill are essential, because without them the courts risk becoming burdened by needless argument. They risk being obstructed by the need to have individual SIs specifically approved.
That is a process that can no doubt be undertaken, but it is not fair of Members of this place to force the courts down that road. There is a risk, albeit a remote one, of defendants being acquitted on a mere technicality. Is it for Members of this place to sanction such a risk? Discussion of the Bill has enhanced all of those risks. It is imperative that the Bill, in its final form, removes the risks. So I ask the Committee to reject the amendment.
I return to what the noble Lord, Lord Graham, said. Naturally, we on this side very much reject any breakdown in the usual channels. That should go without saying. If I can say this in as kind a way as I can, it is noble Lords on the other side of the Chamber who are seeking to pick an argument when there should be no argument. There should be no argument on a Bill of this kind. I have stated here, and I repeat the assurance, that the Bill has no bearing on the privatisation of HMSO. The noble Lord, Lord Harris, does not believe me. I am very sorry about that, because I say those words advisedly. If we reject the Bill, we shall cause all manner of problems for the courts, and we shall be deliberately sanctioning possible legal loopholes. I do not believe that that is a worthy thing for this place to be doing.
Lord McNally: My Lords, sometimes, particularly when one is a new boy, one tables an amendment without realising fully the implications of it. Having listened to the debate, I am very proud that I tabled the amendment because, if the Minister has access to cable television and looks at the repeats of the Lords' proceedings when one is given a glimpse of the serried ranks of Tuscany from time to time, he will see that his colleagues behind him looked glummer and glummer as he dug deeper and deeper into the hole of his own making. If they did not fill it, then they certainly do not realise the full implications of what the Minister described as a relatively unimportant and small piece of legislation. He dragged in at the last minute the

1367
implications for the courts but cannot even tell this Committee, apart from a vague reference to last April, when his own department became aware of the anomaly.
The Minister denies, denies and denies again any linkage between the Bill and the privatisation of HMSO. And yet, as my noble friend indicated, the circumstantial evidence of that linkage and the linkage between the diktats of the Deputy Prime Minister and the behaviour of that Front Bench would stand up in most courts of law.
Beyond this Bill is the behaviour of this House. The Leader of the Opposition has pointed out quite rightly that we shall move into a period when the behaviour of this House will be scrutinised and debated very closely. I say very clearly, because although I may be a new boy in this Chamber, I have been around this Palace in one guise or another for more than 40 years and I am very proud of the role of Parliament, that, if the Executive continues to use this House to demean Parliament and parliamentary procedures, in the long term it is this House which will pay the penalty. I intend to divide the Committee this evening to indicate how deeply we on these Benches feel that this Government are overriding the proper parliamentary procedures in dealing with this Bill.
Earl Howe: Before the noble Lord sits down, perhaps I may say that I do not believe that the Government have overridden any parliamentary procedures. We have agreed through the usual parliamentary channels to take the Committee stage this evening. The noble Lord may have found that inconvenient but that is the case.
We have referred to the possibility of my noble friend moving the Third Reading Motion tomorrow. That is yet to come. I suggest that the Committee is now looking at the amendment. The noble Lord has not argued in any substantive way against the principle in the Bill that there should be retrospective adjustment to cover a clear loophole in the law.
I have not heard such an argument. I do not believe that the noble Lord has addressed any of the points which I raised. Therefore, before going down that road, I urge Members of the Committee to pay close attention to what I said. Even at this late stage, I ask the noble Lord to think again about dividing the Committee.
Lord Harris of Greenwich: The fact is that the Government have made a Business Statement in the course of the debate which is frankly of a truly disgraceful character. We propose to vote for the amendment to demonstrate our total disapproval of what the Government are doing.
Lord McNally: I commend the amendment to the Committee.
7.24 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 28; Not-Contents, 101.

Division No. 1

CONTENTS

Addington, L.

Howie of Troon, L.

Berkeley, L.

Jeger, B.

Borrie, L.

Jenkins of Hillhead, L.

Carmichael of Kelvingrove, L.

Judd,L.

Cocks of Hartcliffe, L.

Kilbracken, L.

David. B.

Mackie of Benshie, L.

Dean of Beswick, L.

McNally, L.

Dormand of Easington, L.

Peston, L.

Gladwin of Clee,L.

Redesdale, L.

Glenamara, L.

Richard, L.

Graham of Edmonton, L. [Teller.]

Stoddart of Swindon, L.

Harris of Greenwich, L [Teller.]

Taylor of Blackburn, L.

Hayman, B.

Williams of Elvel.L.

Hollis of Heigham,B.

Winchilsea and Nottingham, E

NOT-CONTENTS

Abinger, L.

Henley, L.

Annaly, L.

Howe, E.

Belhaven and Stenton, L.

Inglewood, L.

Beloff,L.

Keyes, L.

Belstead, L.

Kimball, L.

Blaker, L.

Leigh, L.

Blatch, B.

Liverpool, E.

Boardman, L.

Lucas, L.

Bowness, L.

Lucas of Chilworth, L.

Brigstocke, B.

Lyell, L.

Brookeborough, V.

McConnell, L.

Brougham and Vaux, L.

Mackay of Ardbrecknish, L

Bruntisfield, L.

Mackay of Drumadoon, L.

Burnham,L.

Massereene and Ferrard, V.

Butterfield, L.

Mersey, V.

Butterworth, L.

Miller of Hendon,B.

Carnarvon, E.

Monk Bretton, L.

Carnegy of Lour, B.

Mountevans, L.

Chalfont, L.

Munster, E.

Chalker of Wallasey.B.

Newall, L.

Chelmsford, V.

Northesk, E.

Chesham, L. [Teller.]

O'Cathain, B.

Clark of Kempston, L.

Oppenheim-Barnes, B.

Colwyn. L.

Orkney, E.

Courtown, E.

Oxfuird, V.

Cox, B.

Palmer, L.

Cranbome, V. [Lord Privy Seal.]

Park of Monmouth, B.

Cross, V.

Pilkington of Oxenford, L.

Dean of Harptree, L.

Platt of Writtle,B.

Denham,L.

Rankeillour, L.

Dilhome, V.

Reay, L.

Dixon-Smith, L.

Seccombe, B.

Downshire, M.

Shaw of Northstead, L.

Elibank, L.

Shrewsbury, E.

Elton, L.

Skelmersdale, L.

Ferrers, E.

Somerset, D.

Finsberg, L.

Stewartby, L.

Fraser of Carmyllie, L.

Stockton, E.

Gardner of Parkes, B.

Stodart of Leaston, L.

Gisborough, L.

Strange, B.

Glenarthur, L.

Strathcarron, L.

Gray, L.

Strathclyde, L. [Teller.]

Gray of Contin, L.

Thomas of Gwydir, L.

Greenway, L.

Trumpington, B.

Hacking, L.

Tugendhat, L.

Halsbury, E.

Ullswater, V.

Hanson, L.

Vivian, L.

Harmar-Nicholls, L.

Wade of Chorlton,L.

Harmsworth, L.

Waverley, V.

Hayhoe, L.

Wilcox, B.

Wynford,L.

Resolved in the negative, and amendment disagreed to accordingly.
7.31 p.m.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment.
Lord Graham of Edmonton: My Lords, perhaps I may simply use this as an opportunity to demonstrate that it was within the gift of the Opposition to resist the Motion that the Report be received. In the context in which discussions took place this afternoon, in order to keep it clean and leave the Third Reading stage for October, both those on the Liberal Democrat Benches
1370
and we on these Benches acknowledged that the Standing Orders allow the Government to proceed as they have; but that process could have been resisted.
Earl Howe: My Lords, I have not as yet moved that the Report be now received. However, with the leave of the House, I shall do so now. I beg to move that this Report be now received, and, in doing so, I should like to express my gratitude to the noble Lord, Lord Graham of Edmonton, for what he has just said.
Moved, That this Report be now received.—(Earl Howe.)
On Question, Motion agreed to.
House adjourned at twenty six minutes before eight o'clock.