Housing Bill

HL Deb 16 May 1996 vol 572 cc560-625

3.42 p.m.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

My Lords, on behalf of my noble friend Lord Ferrers, I beg to move that the Bill be now read a second time.

The Bill shows our commitment to wider choice and better quality of life for home owners and tenants.

Each year, over £17 billion goes to help with housing in England alone, through public spending and tax reliefs. In the last five years, public investment has built or refurbished a quarter of a million homes for social renting or shared ownership and opened up an additional 70,000 lettings. This is a major investment of taxpayers' money.

The Bill will help ensure that public money is spent effectively and goes where help is most needed. It will ensure that those who get a long-term council or housing association home are those that need it most. It will help ensure effective management of social rented housing, with quicker and more effective action by the regulator when things go wrong.

This is a Bill which brings in private resources alongside public investment to improve council estates. It is a Bill which promotes sustainable home ownership by giving more housing association tenants the opportunity to buy the property they live in, at an amount they can afford, and which supports a healthy private rented sector.

It is a Bill aimed at making the quality of life better for the individual, whether tenant or home owner, by giving tenants protection against neighbours who intimidate them; by giving leaseholder home owners protection against unscrupulous landlords; and by improving the standards of housing in multiple occupation.

The White Paper Our Future Homes made clear the Government's commitment to investment in social rented housing. This is the most cost-effective way of making sure that people on long-term low incomes have a decent home.

Social housing does not need to be in public ownership. The track record of some housing associations shows that. Moreover, private bodies owning social housing have one great advantage over public sector landlords: their borrowing and investment are not constrained by the inevitable public expenditure limits. More investment means more and better housing for those in need.

That is why we are encouraging local authorities to transfer housing to new social landlords, and why we are making it possible in Part I of this Bill for the Housing Corporation to register as social landlords local housing companies, in which local authorities, tenants and others can have an interest. These will be able to take over council housing and bid alongside housing associations for grants to build new homes.

Some critics have suggested that this is "merely privatisation". If they mean that it brings in private money and private sector ideas about efficiency, they are right. That is all to the benefit of tenants, who get more investment and better service. If they mean that those landlords can charge high rents, offer poor standards, neglect their properties or throw tenants on to the streets, they are wrong.

We hope that councils and tenants in more and more areas will consider this solution to their housing needs, especially in the parts of our cities where those needs are greatest.

We want to extend home ownership and individual choice. Many housing association tenants, aspiring to home ownership, have only had the option of moving and buying on the open market. The new purchase grant scheme provided for in this Bill will let many more people buy the home they live in, and stay in the community they know.

Discounts of up to £16,000 will be funded by a grant from the Housing Corporation. This will bring the rights of housing association tenants closer to those enjoyed by secure tenants of local authorities. It will help to build motivated and responsible communities. There was widespread support for this objective in another place.

The housing association will receive the full market value of the dwelling. We did not wish to see the stock of social housing reduced, so we will require sale proceeds to be re-used. They will provide replacement homes to help house other families in need. We will protect the supply of social housing in small rural villages, where replacement could be particularly difficult. We propose to exclude homes in villages of 3,000 and fewer people.

The Bill also recognises the importance of the private rented sector in meeting the need for more homes. Since deregulation in 1988 the number of private rented homes in England has grown by 300,000 to 2 million. The Bill builds on that achievement. It makes some modest increases in flexibility for the often very small landlords operating here, reducing some of the red tape in establishing an assured shorthold tenancy and protecting landlords better against tenants who do not pay the rent. It improves subsidy and other arrangements for housing benefit.

The Bill acts to improve the quality of housing in multiple occupation. There is a package of measures. Landlords will have a new statutory duty to ensure that the property is fit for the number of tenants living there. Local authorities will have wider duties to check that certain houses in multiple occupation have adequate safety precautions. Local authorities will have stronger powers to establish houses in multiple occupation registration schemes and will be able to refuse to register sub-standard property. They will be able to charge higher fees to help pay for enforcement. Special control provisions will allow them to refuse registration if a property, by reason of its existence or the behaviour of its residents, is adversely affecting the character of the area. These are a substantial improvement on existing powers and should mean a real increase in standards.

Part III of the Bill also makes important provisions to strengthen the rights of long leaseholders living in flats. The leasehold system can work well, and there are very many honourable landlords who maintain their properties in a fair and responsible way and levy service charges which are reasonable. But unfortunately there are some landlords who abuse their powers. Your Lordships may have seen newspaper articles or television programmes about this, including the campaign in the Evening Standard last year.

The Government's approach to the problem has been to make it much easier for leaseholders to challenge bad landlords, while leaving good landlords free to continue doing their job. Leaseholders already have the right to challenge unreasonable demands for service charges, for example, but few have done so because of the potential cost and difficulty of going to court. We propose to make it easier to use that right. There are others who have advocated a more drastic approach, which would give leaseholders an unqualified right to take over the management, displacing even landlords who are doing a good job. That would not be fair. It would cut across the current clear division of responsibilities between landlord and tenant and it would not be in the best interests of maintaining the confidence of those who invest in and manage property, which is important in maintaining the nation's infrastructure.

The Bill provides additional rights for leaseholders. One of the most significant changes concerns forfeiture. In future landlords will not be able to use the threat of forfeiture of the lease to intimidate leaseholders into paying disputed service charges. Instead, the landlord will first have to establish that the service charge is due, by obtaining a court judgment if necessary.

The Bill makes a number of existing rights much more accessible. In future leasehold valuation tribunals will be able to deal with disputes about the reasonableness of service charges. They will also have the jurisdiction to appoint a manager where the leaseholders can show that there has been bad management—currently a jurisdiction of the court. The grounds on which an application can be made are also being extended considerably, to include, for example, exploitative service charges.

The Bill extends the scope of enfranchisement—the right of qualifying leaseholders to acquire the freeholds of their homes or to extend their leases. It will allow long leaseholders in blocks of flats to buy the freehold collectively where the ownership of the block has been split by creating "flying freeholds". This has been a device used by some landlords to defeat the 1993 legislation. The Bill will also give enfranchisement rights to long leaseholders with leases originally for more than 50 years, irrespective of the amount of rent they pay. This will simplify the procedures for the vast majority of leaseholders, removing the "low rent test" for them, as well as bringing some within the scope of the enfranchisement who previously have been outside it.

The Government will have some further, more technical and procedural measures to bring forward in the light of comments which were made in the earlier stage of the Bill and representations which we have received from the bodies representing landlords and leaseholders. These include improvements to the 1987 legislation on the leaseholder right of first refusal when a landlord wishes to sell, to make that operate more smoothly. The Master of the Rolls recently criticised the drafting of the legislation, and so we shall want to clarify certain points. We shall also want to make it possible for property to be offered at auction while still giving the leaseholders the right to pre-empt the sale.

Part V of the Bill brings us to a subject where we are all agreed that there is a problem and one which has been getting worse—anti-social behaviour. The Government have been asked by local authorities and the housing association movement to help them in their battle as landlords against the small but nasty minority of their tenants who can make life hell for the law-abiding tenant.

Social landlords (and to some extent private landlords) have a special relationship with their tenants with obligations enshrined in the tenancy agreement. The provisions in this Bill are about ensuring both sides to that agreement—both landlord and tenant—fulfil their responsibilities so that all tenants can enjoy a good quality of life.

Research shows that dealing with nuisance tenants takes up 20 per cent. of housing managers' time, although only between 2 per cent. and 10 per cent. of tenants on any one estate have been the subject of complaint. Clearly this is a matter which is both resource and time intensive. Local authorities already tackle the problem in a number of different ways—tightening up tenancy agreements and using injunctions for instance. However, it was put to us by local authorities that the statutory framework for dealing with the truly appalling cases of persistent anti-social behaviour, where it was concluded that as a last resort eviction must take place, has been failing in some cases.

We have therefore drawn up a substantial package of measures to help landlords deal more effectively with troublemakers. There are three strands.

First, local authorities will be able to set up an introductory tenancy scheme for new tenants. Introductory tenancies will last 12 months, after which the tenancy becomes a secure one unless the local authority has been granted possession of the dwelling. It will be easier for authorities to evict, compared with secure tenancies, although the tenant will have the right to an internal review by the local authority of any decision to evict.

Secondly, we are strengthening the grounds on which social and private landlords can evict secure tenants for nuisance and annoyance to neighbours. The Bill will make it easier to use professional witnesses, overcoming the problem where other tenants feel too intimidated to give evidence. Domestic violence will be made a ground for possession. So will being convicted of committing an arrestable offence in the locality of the dwelling, rather than only in the home itself as now. This will help tackle drug dealing on estates. We will also speed up possession proceedings.

Thirdly, the Bill provides for a power of arrest to be attached to injunctions taken out by social landlords to stop anti-social behaviour where violence has occurred or is threatened.

This is a sensible package to get tough on nuisance tenants and improve other people's quality of life.

The Government are very concerned to ensure that the best use is made of housing to meet the needs of the whole community. The present arrangements for allocating social housing have evolved in a rather unplanned way. In part they reflect allocation criteria established over 60 years ago. In part they reflect the way in which the homelessness legislation has come to dominate housing allocation in some parts of the country, to the detriment of others on the waiting list. We want to ensure that long-term social housing goes to those with the greatest long-term needs, while at the same time maintaining an effective safety net for families and vulnerable individuals who are made homeless through no fault of their own.

The new provisions on the allocation of social housing in Part VI of the Bill will require each local authority to establish a register of people seeking social housing in its area, and (with limited exceptions) to allocate all long-term tenancies within its gift in accordance with a locally determined allocations scheme that reflects the principles set out in the legislation. These principles (which appear in Clause 148) will ensure that, in assessing housing needs, a local authority looks at both current housing circumstances and at the social and economic problems of a household that mean it may need long-term assistance.

The new allocation criteria will ensure that local authorities give proper priority to the housing needs of the most vulnerable—such as those released into the community from a long-stay psychiatric hospital, or to others with a community care assessment. The Government are very conscious of the need to ensure that housing and social services departments work together to provide a co-ordinated service for the most vulnerable members of the community.

Part VII of the Bill completely replaces the existing homelessness legislation, but it retains much of the existing structure. As at present, a local authority will owe a duty where a household with dependent children or some other vulnerable individual is homeless (or threatened with homelessness) through no fault of its own.

Where the new provisions differ from previous legislation is in the way in which a local authority should now discharge its duty. The new duty will be to secure accommodation for at least two years—either temporarily in local authority or housing association housing, or in the private rented sector. This is a more certain guarantee of assistance than the present legislation provides following the recent Awua judgment.

Often, homelessness is associated with some other change in life circumstances, such as relationship breakdown or loss of a job. Such events are traumatic, but the problem is often temporary. A recent study found that nearly one in five of those accepted for rehousing under the homelessness legislation had ceased to require assistance within a year of being accepted by the local authority. Where there is a need for longer-term assistance the two-year period of duty should, in most areas, be long enough for anyone with real long-term needs to secure permanent rehousing through the housing register. If not, the duty can recur.

The allocation criteria in Part VI do not provide for the special treatment of those owed a duty under the homelessness legislation because it is dealt with in Part VII, which ensures that they are guaranteed accommodation for at least two years during which time their needs will be compared with those of others on the waiting list.

The proposed reforms of the homelessness legislation introduce an important new concept. We are clear that the homelessness legislation must provide an effective safety-net for those people who have no alternative. But the Government are clear that people should be expected to help themselves to a reasonable extent in resolving their housing problems. The Bill therefore provides that, where suitable alternative accommodation is available within the local authority's area, the duty of the authority should be to assist the person concerned to secure that accommodation.

When this provision was discussed in another place, concern was expressed that the less diligent authority might try to use this provision to relieve itself of all responsibility by simply pointing an applicant to accommodation advertisements in the local paper. We are clear that that would not be enough to count as discharge of duty. We have discussed this with the local authority associations and the housing profession, and will, if necessary, be prepared to bring forward an amendment to strengthen this provision during our consideration of the Bill.

Pursuing the idea of helping people to help themselves, the Bill also gives housing authorities a new duty to make advice on preventing homelessness available to anyone in the area who needs it. Timely advice can often prevent both the trauma of homelessness and the expenditure that flows from the duty to remedy it.

Taken together, the provisions of Parts VI and VII of the Bill represent a new approach to tackling housing needs. They emphasise the role of advice and help to prevent homelessness. They encourage those who need accommodation to make their own efforts to find it. They ensure that everyone seeking long-term housing gets proper consideration. Above all, they maintain an effective safety net for those families and vulnerable individuals who do lose their homes.

I commend the Bill to your Lordships.

Moved, That the Bill be now read a second time.—(Lord Mackay of Ardbrecknish.)

4.1 p.m.

Lord Williams of Elvel

My Lords, the House is grateful to the Minister for introducing this Bill. He does so in place of his noble friend Lord Ferrers, who has undergone a serious operation. I understand that the operation went well and that the noble Earl may soon be back among us in his usual rumbustious form. We look forward to that day and wish him a speedy and successful convalescence.

The Bill before your Lordships today is the second part of what I would describe as a "pantomime horse". Your Lordships may recall that in the Second Reading debate on the Housing Grants, Construction and Regeneration Bill, I reminded the House that the Bill was at its origin one part of a truly gargantuan Bill of 360 or so clauses which Ministers had previously prepared, but which was subsequently split into two. Your Lordships dealt with the first Bill as expeditiously and, if I may say so, as efficiently as is the custom of this House. The Government are now asking us to deal with the second part of the horse. For reasons of delicacy, I shall refrain from saying whether, in my opinion, this Bill is the front end or the rear end of the horse. I am sure that your Lordships will be able to judge, from what I say about the Bill, which end of the horse I believe it to be.

This particular animal had a colourful run, as the Minister described it, in another place. Proceedings had hardly started when the Government withdrew eight clauses and inserted a further 11. Further changes were made as the Bill went through Standing Committee, and were then reversed on Report. In the light of that we can confidently expect, as the Minister said, further movement of opinion in this House and we must prepare ourselves for government amendments to that extent. I propose to speak to the general purposes of the Bill; to indicate some of the places where we would like to see further amendment; and to explain how this Front Bench will handle the Bill when we move into Committee.

Part I deals, as the Minister told us, with social housing. I hope that I do not have to emphasise to your Lordships the importance of this sector, particularly to the elderly who will form an increasing proportion of our population in the years ahead. The right to buy for tenants in new housing association properties is all very well, but there are many who feel that the proposals being put forward are not flexible enough to meet the housing needs of older people. It seems to us that the Government have missed an opportunity, for example, to promote shared ownership and flexible tenure. Nor are we happy with the proposed exemptions.

As the Minister said, it is true that the Government agreed to exclude properties in settlements of fewer than 3,000 people. Without that safeguard the whole future programme of affordable housing in rural areas would be put at risk, largely because of the shortage of building land. But that is not good enough. The housing White Paper created a crisis of confidence in rural areas. We believe that the Bill as drafted does not deal with those concerns properly and we will wish to improve the Bill in that respect when we come to the Committee stage.

The same problem applies to other areas and other types of property where the situation becomes at least difficult, if not impossible. For instance, there are homes which are subject to restrictive covenants, such as those where the Church of England put land at the disposal of a developer for the express purpose of building homes to rent. There are homes where the cost of building or the cost of buying and renovating them is greater than their market value—particularly where social landlords buy run-down buildings and renovate them, to help preserve the character of the local area. Being forced to sell those properties at a loss would very quickly stop associations from engaging in that kind of activity.

Further, there are homes which were built for social housing without contribution from the taxpayer—for instance, private donors or other charities give money or land to housing associations specifically for the purpose of building low-cost rented homes for people in need. It would be absurd to compel a sale where no public money was involved in the first place. The Government seem to have accepted those points in the voluntary scheme which is in place for existing properties. The question that your Lordships will have to decide as we go through the Bill is whether they will now accept the same points in the compulsory right-to-buy scheme for new properties.

The Bill also makes provision for greatly increased powers for the Housing Corporation and Housing for Wales. Again, some of the originally proposed powers were diluted in another place. For instance, where a manager is appointed to take control of the housing of a social landlord where there is the possibility of insolvency. Such a manager would now have to consult widely before deciding on an appropriate course of action.

As I understand from debates in another place, we are also promised a code of practice as to how that power is to operate. I look forward to seeing a draft of the code of practice before we discuss the matter in Committee. I also look forward to the report of the Delegated Powers Scrutiny Committee of your Lordships' House, which I have no doubt will wish to remark on some of the powers which are to be delegated to subordinate legislation. We are also promised an amendment to ensure that a panel set up to inquire into the affairs of a social landlord should have at least one member who is independent of the Housing Corporation or Housing for Wales.

In all, we will have a whole raft of government business and of our business to discuss when we come to Committee. All that may be reasonable enough, subject to the Delegated Powers Scrutiny Committee. At least the Bill is better than when it started. But there is still the problem of accountability to Parliament. After all, as the Minister pointed out, the two housing corporations—the Housing Corporation and Housing for Wales—are major spenders of public money. At present they are subject only to periodic reviews by the Public Accounts Committee of another place and occasional investigation by the Environment Select Committee. There seems to us to be no reason at all why the corporations should not be subject to the same procedures as departments in the submission of their annual reports. I hope very much that the Government will accede to our request.

Part II deals with houses in multiple occupation. There are over 600,000 houses in England alone in multiple occupation, a large proportion of them houses converted into bedsits. Two-fifths of all HMOs are officially unfit for human habitation. The risk of death from fire is 28-times higher in HMOs than in the housing stock as a whole. Further, if the provisions of the Bill which the Minister has described are enacted, increasing numbers of homeless families will be living in private accommodation, including HMOs. It really does seem to us essential that HMOs should be properly registered and licensed by local authorities. For this to happen, any registration scheme must be mandatory and national. Nothing else will do.

Part III brings me personally on to familiar territory, as I debated from this Dispatch Box the Government's last effort at meeting their manifesto commitment to leasehold reform. I said then that the Act would not work and it did not. At the risk of sounding like the prophet Isaiah, I must say, "I told you so". I can confidently say, again at the risk of sounding like the prophet Isaiah, that this will not work either.

Having said that, I have to declare an interest in that I am a leaseholder covered by the provisions of the Act. Although I have not the remotest intention of enfranchising under the rather picturesque proposals of the previous Act, which is modified by the present Bill, I do not think that it would be right for me to engage in debate on such matters. I shall leave that part in the capable hands of my noble friend Lord Dubs. I can only hope that other noble Lords will take the same rigorous line as I do and abstain from pressing their own particular interests.

There is, however, a matter which deserves more than a moment's reflection and that is Chapter II of Part III. Clause 89 makes the assured shorthold tenancy the main tenancy agreement for private letting once the Act comes into force. At present, of course, a landlord has to serve a tenant with a prescribed notice when offering an assured shorthold agreement. The Bill proposes to reverse this position. I believe that we need to debate with a great deal of vigour the principle of basing the private rented sector on a short-term, insecure lettings regime. How can anyone—indeed, how can any family with children—create a home on such a basis? Further, anyone on an insecure letting is less likely to complain about disrepair and less likely to complain about dangerous conditions, let alone seek the intervention of the local environmental health or health and safety services.

There is no need to change the current system, and the Government gave no plausible reason in another place for doing so. They will have to do better in this House to explain why they have introduced, for no particular purpose, a provision which will almost certainly lead in time to a massive decasualisation of the private rented sector, and the danger and social disruption which will follow.

Parts IV, V, VI and VII will be dealt with by my noble friend Lady Hollis of Heigham and she will be dealing with the principles involved when she comes to wind up the debate this evening. I will confine myself to just two remarks. In the allocation of housing accommodation certain groups are mentioned as those to whom reasonable preference should be given. They are established according to what the Government perceive to be the greatest underlying need. The homeless do not appear on this list. But that is absurd; and it is absurd on two counts. First, of all the people who have an underlying need for a house, top of the list must come those who have no home at all. That seems to me to be obvious. Secondly, the principle is quite contrary to that expressed by the Government in their 1989 review of the homeless legislation. They said that, there is little doubt that [homeless] people would and should expect to have priority in any system of housing allocation based upon need. Quite so. Why then, in this Bill, have they gone back on their own word?

My second remark concerns the provisions of the Bill relating to the homeless. Homelessness is, as your Lordships are aware, a complicated phenomenon. It derives from a number of complex causes. But one thing has become clear in the many studies over the past few years. It is not a phenomenon which is susceptible to a short-term solution. The need of most homeless people is a permanent solution to their problem. A time-limited duty on a local authority, even one of two years as the Bill proposes, does not provide anything approaching an adequate solution. Indeed, there is every chance, as we will argue, that it will just compound the problem.

I said at the outset that I would confine myself to general points, as is appropriate for a Second Reading debate. There will be many points which need to be made and clarified, and I hope many amendments made, when we come to Committee. I also said how we on this Front Bench propose to handle the Bill in Committee. It should now be clear that I intend to take the lead on Parts I and II, helped by my noble friend Lord Carter on rural housing. My noble friend Lord Dubs will deal with Part III, and my noble friend Lady Hollis will deal with Parts IV, V, VI and VII. However, I must warn your Lordships that the Committee stage may well be long and difficult. This particular pantomime horse has quite a long way to run, but at least your Lordships will now be aware which half of the horse I believe this to be. It is a messy and miserable thing. It needs to be substantially amended in order to avoid its being relegated to what looks at the moment like its final permanent home, the knacker's yard.

4.18 p.m.

Baroness Hamwee

My Lords, I too must thank the Minister for his careful explanation of the Bill, although it did occur to me when he was speaking that beauty is very much in the eye of the beholder and that I am not one of those who regard this Bill as a thing of beauty. I was speaking last week to a group of people involved in providing housing advice. I had to explain to them that your Lordships' House cannot or will not wreck a Bill that has come from another place. That provoked from all quarters of the room the comment, "Shame". They of all people know that there is a housing crisis in this country and that the Bill does not tackle it. Worse, they know that the Government are abdicating responsibility, that the Bill is a huge step backwards in the battle against homelessness, and that it does little more than confirm the Government's lack of will to tackle the root of the problem, which is not the allocations system but a severe shortage of affordable homes to rent.

When my late noble friend Lord Ross of Newport introduced in another place his Private Member's Bill, the Housing (Homeless Persons) Bill, he paid credit to its sponsors from five political parties. He said that he looked for an all-party consensus to deal with what he called the "paradox" of homelessness. He said: We have plenty of empty houses, but we still have homelessness … There is no more extreme form of housing need".—[Official Report, Commons, 18/2/77; col.89.] He did not claim that his was a perfect Bill. He said: It is a disgrace that in this country today we have increasing homelessness". In talking about the high number of homeless people, he said: This is something that we have obviously got wrong and ought to be doing our best to put right. I am certain that when the Bill gets to the other place there will be some pleas, from clerics and others, to the effect that we have left out a vital group, namely, the single young homeless. I am sad that we have not been able to deal with them … Nevertheless"— this is important—

included in the Bill is the provision that further priority groups can be considered and I hope that as the country moves towards a more prosperous state we can give such persons greater consideration. I hope that whoever is Secretary of State in the future will be able to introduce the necessary measures to bring such people into the priority groups. I apologise to such people and to others who cannot be covered by the Bill".—[Official Report, Commons, 8/7/77; col. 1732.] In other words, he looked to the Government in 1977 to take the issue forward. I doubt whether he dreamt that there would be a Government in 1996 who would be seeking to privatise housing problems.

What, in a few words, does the Bill do? I read it as taking away the right of homeless families to stable long-term accommodation, decreasing the supply of affordable housing and making it easier for landlords to evict private tenants. Of course there are good things in the Bill. I acknowledge that there are things to be welcomed. But I believe that the Bill will do more harm than good.

As I was making notes and writing down the heading of Part I, "Social Rented Sector", I realised that we had stumbled over a piece of irony even before the first line of the text, because so much of it is about purchase and not rent. Yes, home ownership gives one a nice warm feeling. Or does it? Perhaps I feel the rosy glow of contentment at owning my own home—or at any rate myself and the Halifax Building Society—because I have been indoctrinated over the years to think that it is a good thing. But what nice warm feeling is there for those who have exercised their right to buy and whose equity is now negative?

The Bill is true to the White Paper, which said: Home ownership must remain at the heart of our policies. It is after all what most people want". Yes, they want it if it works. What society wants is a decent home for everyone irrespective of tenure.

Of course, there can be no intrinsic objection to the right to buy if stock is replaced, if the process is fair and if it is appropriate for different groups. The noble Lord, Lord Williams, referred to older people perhaps requiring the flexibility of mixed purchase and rent. That is a valid observation. I share the concerns being expressed by housing associations. One association has written to me and I am sure that your Lordships will have had similar representations from others. The association tells me that since 1900 it has had a long-term project to modernise all its properties by the year 2000. It says: Most of the costs are met from our own reserves or through private borrowings but we have, on occasion, been supported by Housing Association Grant. Under the SPG proposals, new lettings that are created as a result of this modernisation … will be subject to a right to buy. This will create the anomaly that part of a large old pre-war estate will be subject to the right to buy, whereas the remainder will not … Unless the SPG proposals are changed … the Trust will not seek grant for its modernisation work". This is the important part.

The work will therefore proceed at a much slower pace and, to that extent, another government objective (keeping existing social housing in good condition and making the best use of the social housing stock) will be thwarted". Much social housing has been built without the use of public funds. Private donors give money or they give land. We have had since the White Paper a clear warning from landowners that they will not in future contribute land as their contribution to society. They give it for the specific purpose of providing low cost rented homes for the people most in need. If those homes are sold, is that not some form of confiscation? Perhaps that is not surprising. Much of what many of us regard as being in the public realm or at any rate held in trust for the public is moving into private hands.

I acknowledge that the Government have moved to the extent of putting some flesh on the bones of the rural areas exemption. However, that flesh is meagre. I shall be joined by my noble friend Lord Beaumont of Whitley in dealing with rural matters. He asks, as I do, why areas that are the subject of Section 106 agreements—to be technical for a moment—are not included and why local authorities should not be given discretion themselves to designate exempt areas. How does that square with the White Paper statement: The Government must ensure that its housing policies support sustainable development, getting the right kind of housing, in the right amount, in the right place and in the right way—so that the environment is protected and enhanced". Are the Government prepared to publish an assessment of the environmental implications of the measures contained in the Bill? I hope that they are and that they will. I rather doubt that the Department of the Environment is getting a great deal of support for its draft circular on planning and affordable housing. My authority has said that the current proposals would seriously impede provision at a time of increasing reliance on the private sector and would completely undermine unitary development policy which has already been through statutory consultation, public inquiry and the DoE vetting procedures. I know of other district councils and other boroughs which have made similar points. Those concerns are rightly expressed today when we are dealing with issues of social housing. A district council in Hampshire has identified considerable need for further affordable homes. The council says that it has to use all avenues open to it to ensure the provision of as much affordable housing as possible. It is very concerned about how outside the Bill but at the same time the Government are making that increase well nigh impossible.

We are accustomed to regarding the Housing Corporation as a beneficent quango. Its quangocracy will be most under scrutiny in examining the increase in its powers contained in the Bill. I do not believe that the Bill provides for adequate accountability in any real sense. Are the provisions regarding HMOs adequate? HMOs will be increasingly important if the homelessness provisions are enacted, given the increasing number of families who will be living in private rented accommodation, including HMOs. Will they be in safe, well managed homes? The responsibility for that is the landlord's but the Government have a responsibility to regulate where necessary. Government at local level largely wants to do so. I accept that it is inconsistent for me to argue against local discretion but there are occasions when the imposition of duties is appropriate. Certainly I am not convinced that the provisions of the Bill are sufficiently strong.

The Joseph Rowntree Foundation published a report towards the end of last year with regard to the licensing of private rented housing. I shall not repeat the figures as to the problems in that sector but I can say that most local authorities are dissatisfied with the current regime. They find its complexity confusing. That is why they only take action on a very limited number of substandard properties.

The report indicates that a scheme covering all private rented properties could be self-financing with annual licence fees of £25 per room, saving £42 million currently spent from local authority general funds on enforcing standards. Figures like that are very well worth taking into account, resulting in large savings for small fees. We shall undoubtedly spend time on the part of the Bill concerned with private renting. I can well understand that leaseholders, having convinced the committee of another place, felt—how can I put it?—sold out at a later stage. I welcome the Government returning to the subject so soon after the 1993 Act and acknowledge the degree of humility involved. But have the Government learnt, and in particular how much, if at all, have they consulted with those who are affected?

Private provision is a key source of rented accommodation. That is the inevitable concomitant of the other policies contained in the Bill. Therefore, the measure must strike the right balance between security for the tenant and attraction for a landlord to rent his or her property. That balance is not an easy one to strike. I am not convinced that the right balance has been struck in the Bill. We need a real debate on the matter. We also need to be very certain—and I am not—that mandatory eviction, after a shorter period than now, will not lead to increased homelessness. It was at this point in making notes on the Bill that I began to wonder whether we were talking about a housing Bill or a homelessness Bill.

As regards housing benefit, we shall have the battle between my noble friend Lord Russell, the noble Baroness, Lady Hollis, and the noble Lord, Lord Mackay. That is a spectator sport we have come to enjoy. But for now I simply ask whether the provisions will jeopardise further the smooth working of private renting.

There will be both philosophical and practical issues to be addressed in the debate on probationary or introductory tenancies. No one who has been a councillor will under-estimate the distress that anti-social neighbours can cause. I wonder whether the provisions in this Bill will be effective. What is the justification for a two-tier system for local authority tenants? One passes the test of one year's good behaviour: to me that smacks of discriminating against the undeserving poor.

The parts of the Bill dealing with allocations and homelessness are likely to be of most concern, and rightly so. The knee-jerk reaction against the claim of queue jumping will not solve anything. There is no real evidence of unfairness after all. Perhaps I may give one statistic. Teenage single mothers actually take less than 0.3 per cent. of new council tenancies. Indeed, when I speak to local authority housing officers they are outraged at such claims and say things such as, "Our concern is, and always has been, for children. Our concern is for the family whatever sort of family it is".

The current legislation is only a very flimsy safety net— that of "reasonable preference" for homeless families. But that net is to be snapped. Lord Ross of Newport said, The need of most homeless people is a permanent solution to their problem which they have been unable to arrange for themselves". It is an obvious point really, but the Bill is short-termism with a vengeance. It does not recognise—indeed, it turns a blind eye—to the needs of young people, immigrants and now those caught in the revolving door. I believe that the party of the family is yet again making false economies. After all, your Lordships have debated often enough the importance of health and education and the fact that they are among the casualties of homelessness.

I do not believe that it will embarrass the noble Lord, Lord Jenkin of Roding, because I agree entirely with what he said during the course of the Housing (Homeless Persons) Bill. In fact, Lord Ross quoted what the noble Lord, Lord Jenkin, had said on an earlier occasion. It was this: One director of social services told me that he had calculated that over 50 per cent. of the time of the social workers in his department was devoted in one way or another to dealing with the consequences of homelessness. That seems to be the most appalling waste of resources. The work covers the whole range—battered wives, broken families, those who lose their homes for whatever reason, such as inability to pay the rent and so on".—[Official Report, Commons, 18/2/77; col. 898.] That was nearly 20 years ago. The noble Lord was so very right. It is still the problem today.

Finally, I wish to refer to the amount that has been invested in housing. I quote statistics prepared by the Chartered Institute of Housing. In the period from 1980 to 1994–5, there was a reduction of almost 54 per cent. compared with an increased spend of nearly 82 per cent. on law and order. One acknowledges the spend if not perhaps the effect. Your Lordships will be very familiar with the figures for negative equity. Thousands of people are affected by that problem. In the south-east alone the figure is almost 400,000. Perhaps another way of expressing the statistics is, "It is hurting and it is not working."

4.36 p.m.

The Lord Bishop of Oxford

My Lords, I am grateful to the Minister for his clear introduction of this Bill. As I believe he will appreciate, Churches of all denominations throughout the country have a deep commitment to meeting housing needs through housing associations and other agencies.

The background to this Bill is that there is still an acute shortage of low-cost rented housing. The House of Commons Environment Select Committee recommended that something approaching 100,000 new social homes a year needed to be built in order to meet existing need. This estimate was entirely in line with that of housing experts. For example, a Rowntree study recommended that 120,000 units a year needed to be built. The Government have provided resources to provide no more than 60,000 new social homes a year for the next three years and now it is uncertain whether even that target will be met. Even if it is, that will not meet existing demand; nor will it go any way to meeting the shortfall which has built up in recent years. So the need for low-cost rented homes will become even more acute.

Buying one's own home is clearly a desirable goal for those who can afford it. But with no end in sight to continuing high levels of unemployment—more than 20 per cent. in some parts of the country—millions of people will never be in a position to buy their own home, even with government subsidies. Unfortunately, people who are homeless are all too often stereotyped as feckless and irresponsible. No doubt some are, but a very high percentage are ordinary, decent people who are simply trapped by circumstances beyond their control.

Recently, in the diocese of Oxford, we had conferences on housing in Reading and Oxford itself in which people who were homeless spoke for themselves and told their story. One was a carpenter with a wife and three small children, who at one time had a car and a house on mortgage. He said, "We were very ordinary, successful and able to support ourselves". Suddenly, the recession came and his orders disappeared literally overnight. He had to sell his house and before he knew where he was, he had entered a nightmare world with no secure housing and endless bureaucratic blocking, with all the consequent strain on his family life. He said, "I can only sum up the experience as being in hell". Like many others, he and his family suddenly found themselves in desperate need of secure low-cost housing. Even for people in paid employment, we live in insecure times as far as jobs are concerned. Moreover, a good number of jobs do not allow people to save enough to purchase a house, even with government assistance.

The Government's policy is to try to encourage more housing need to be met by the private rented sector. The private rented sector certainly has a vitally important role to play. It was good to learn of the Government's success in increasing the role of that sector. But can it really meet the need for good quality, permanent low-cost rented accommodation for all our citizens?

The Bill abolishes the duty of local authorities to provide permanent accommodation and limits their obligation to ensuring that accommodation of some kind is found for a two-year period; the two-year period being a welcome change from the one year that was originally specified in the Bill. But two years at a time is not the kind of security that anyone, especially a family with young children, can be easy about. Many households will be directed towards private rented accommodation, where security can be for as little as six months, so they could face the prospect of up to four separate tenancies during the two-year period in which there is a statutory duty to try to find housing for them.

Alas, there are unsympathetic landlords about, and there is not the kind of security which can be provided by local authorities and housing associations. Research by several reputable organisations has shown that the private rented sector will not adequately meet the needs of homeless families. Up to three-quarters of landlords actively discriminate against prospective tenants who are homeless or on benefit in favour of those in employment.

So, although the aim of the Bill is entirely admirable—namely, to put decent affordable housing within the reach of everyone—it must be doubted whether its specific provisions will achieve that.

I now turn to one point of detail in the Bill about which housing associations are seriously concerned. I have the privilege of being the president of the National Federation of Housing Associations. I refer to the right to buy for tenants of housing associations, to which the noble Lord, Lord Williams of Elvel, and the noble Baroness, Lady Hamwee, have already referred. As I understand it, housing associations can accept the voluntary purchase grant scheme, as it has been amended. Clearly there are occasions when it is not only in the interests of the tenant but in the interests of the housing association and the better meeting of housing needs in a locality for a tenant to buy. But the statutory purchase grant scheme continues to be of great concern. As we know, the Government propose to exempt rural settlements under 3,000 from the right to buy. This is important for in rural areas if housing association property is sold, it will often prove impossible to purchase land for rebuilding and the social character in the village is likely to change over a period of time. There are, however, questions about whether the 3,000 figure is too low. I have received correspondence from people in rural areas raising that question. Large villages and small towns could be seriously deprived as a result of losing housing association homes without the possibility, for various reasons, of purchasing replacements. The figure of 5,000 has been suggested as more appropriate.

In the past housing associations have been able to build low-cost housing on land given or sold at below market value by generous landowners, the Church or some other trust. Sometimes use has been made of Section 106 schemes, whereby land on the edge of a village which would not normally be used for housing, but which is not needed for agricultural use, can be made available for social housing. But will such land be made available in the future, if there is a possibility that the housing so built could in due course be purchased? Those who make over land at less than the market value do so because they wish to help those not able to purchase houses of their own and because they wish to ensure the mixed social character of their community. Because of those considerations and questions I understand that the diocese of Hereford and the diocese of Salisbury, as well as my own diocese, are having reservations about making any more land available for such schemes. Reassurance is needed that land made available for low-cost rented accommodation, in order to ensure the continuation of a mixed community, will continue to serve that purpose.

However, it is not only in rural areas, but also in some parts of cities that that concern is being expressed; for example, in an area like Notting Hill and North Kensington there are very few opportunities for development. Property values are among the highest in the country and housing associations will not be able to find or afford suitable properties to renovate. The principle of making exceptions to the purchase grant in areas where it is difficult or impossible to replace existing housing association properties has been accepted by the Government as far as rural areas are concerned, but the arguments are just as relevant in the case of high-cost urban areas such as Notting Hill and North Kensington. In areas like that, there is at the moment a mixed community which the housing associations are very anxious not to lose. It could easily be lost if people started to purchase housing association properties, which they would naturally want to do in such a sought-after area, and the housing association was not able to replace them.

The Churches as well as the housing associations would welcome amendments to this legislation to give some legal protection to Church land and other land which might be made available for the purpose of providing affordable rented housing and housing developed to meet specific local needs under Section 106 (exceptional planning agreements). We believe that such amendments will further the aim of this Bill of putting decent affordable housing within the reach of everyone.

4.47 p.m.

Baroness Gardner of Parkes

My Lords, before making my prepared speech, in which I strongly support the Bill, I should like to comment on a few points that have been raised in the debate so far. When introducing the Bill my noble friend Lord Mackay referred to people having a right, under the Bill, to question service charges. That is a marvellous improvement on what happens at the moment. I have a property which is subject to a service charge, but I am not quoting that. I am referring to the people in that building who have come to me saying that they are very distressed because when they attempt to question the service charge they are told that, if they do not pay up and pay up immediately, they risk forfeiture; and, indeed, their legal advisers have confirmed that to them. The provisions will make a valuable difference if people no longer face the risk of forfeiture merely for making a genuine inquiry about their service charge.

The noble Lord, Lord Williams of Elvel, was concerned about the assured shorthold tenancy notice. As I shall declare later, I have always had lettings and they are now on an assured shorthold basis. I have found that, on the whole, tenants do not seem to value those notices. I go to great lengths to be sure that they have received such notices and ask them whether they have noticed everything on them. They say, "Oh yes", but most of them just throw out the notice immediately. I do not think that doing away with those notices is any bad thing. Indeed, it is now written into many tenancy agreements that you have to confirm that you have received the notice before you sign the tenancy agreement, otherwise the tenant will say, "I do not remember getting that" and landlords have to spend their time getting receipts to confirm that they have served the notice. I am not sure how effective those arrangements are.

I should like to be assured that the Bill in no way alters people's right to extend an assured shorthold or to be granted a further term. Letting agents always seem concerned that, if you give someone a tenancy for six months, you might be running some enormous risk if you extend the term. Many landlords may have been happy with a tenant for six months. If that tenant says, "I'd like to stay for another three months", extending the term should be very simple. However, I cannot find anything in the Bill which clarifies that point. The noble Baroness, Lady Hamwee, said that there were plenty of homes and yet there were still homeless people. I should like to link that comment to the speech of the right reverend Prelate the Bishop of Oxford. In my Oxford village there was an empty alms house. I wondered whether there were too many restrictions placed upon such properties. That property was empty for a long period while an attempt was made to find someone who could meet the criteria which applied to that small but very desirable house. The person had to be above retiring age and local, having lived in the area for so many years. That little house would have suited a homeless family. Such a family would have become part of that small village community.

I have a particular interest in this Bill both because of my former responsibility in the social rented sector as an area housing chairman on the Greater London Council and my more recent involvement in this Chamber in the leasehold reform Act. That Act, to which the noble Lord, Lord Williams, has already referred, has been of benefit to leaseholders of houses which have been comparatively easy to enfranchise.

Lord Williams of Elvel

My Lords, I hope the noble Baroness will forgive me for intervening. The enfranchisement of houses was a matter decided in the period of a Labour Government before this Act was introduced. The Act was concerned with the enfranchisement of long leaseholders of flats.

Baroness Gardner of Parkes

My Lords, I take issue with the noble Lord on that point. The previous enfranchisement Act allowed one to enfranchise only if one had a low rateable value and was very restrictive, whereas the last leasehold Act extended it to houses irrespective of value or size. There was a considerable advance in the leasehold enfranchisement of houses under the leasehold enfranchisement Act, on which noble Lords worked in this Chamber.

Leaseholders who had, perhaps, lived for 50 years in large and expensive houses often could not afford to enfranchise. I talked about people who were locked in to such properties. But when that Act was introduced it made their homes saleable to incoming leaseholders who would be able to take up that enfranchisement right at a later stage. In the case of houses, I believe that the last Act worked to a considerable extent; but it has not worked well for most leaseholders in blocks of flats who consider that the hopes that were raised have not been fulfilled. I consider that those in central London have been particularly disadvantaged.

At the time that this House debated the leasehold reform Act the public perception was that leaseholders looked forward to "something for nothing". Your Lordships emphasised that that was not the case and that money would be payable to the freeholder, which in some cases would be a very large amount. It was clear that many people would be disappointed when they discovered that there were no free gifts in that Act, and there was none.

However, I am surprised and sorry to see just how unsatisfactory the process has been. All kinds of heavy costs have had to be met by leaseholders before they can be in a position even to consider whether or not it is in their interests to proceed with the purchase of their freehold. This Bill goes some way to improving the position and rectifying that flaw in the leasehold reform Act.

As long speeches are not welcome in your Lordships' House, even on Second Reading, I shall concentrate today on Part III and save my comments on the other parts for later stages. I also intend to raise the question of tenants' deposits or bonds, which are not included in the Bill but which I believe would be of benefit and are relevant.

At the Report stage in the other place the Government tabled amendments which I believe to be very fair, and I support them. Those amendments were concerned with: first, the removal of the need for professional valuation of interests to be acquired in collective enfranchisement; secondly, the provision of general legal advice about residential tenancies, as set out in Clause 87 (which I am pleased to see will ensure that that service continues to be funded); thirdly, the extension of rights in relation to the low rent test; fourthly, the transfer of jurisdiction to a leasehold valuation tribunal to appoint a manager; and, fifthly, compulsory acquisition under the Landlord and Tenant Act 1987.

I believe that most of these changes make it easier for tenants or leaseholders to deal with their own affairs particularly in financial terms, as the costs under the leasehold reform Act were often intimidating. Those costs had to be met up front; that is, before the leaseholder could decide whether or not he was in a position to proceed. I ask my noble friend the Minister to clarify whether the changes in this Bill will benefit those who deal directly with the freeholder and also deal with cases where the head lessee intervenes between the freeholder and the leaseholder or lessee. Does it apply in the same way in that part of the Bill which deals with management?

All of the amendments tabled by the Government at Report stage on the topics that I have listed were reversals following Opposition amendments moved at Committee stage which went much further. I strongly support the changes made by the Government. I do not believe that they are an outright rejection of the points made by the Opposition; they are a sensible, middle-of-the-road compromise on very difficult issues.

There are many controversial points in the Bill, and we will have a good deal to debate. I hope that the Government will continue to give careful consideration to sensible, practical points made in Committee and at later stages in this House. I also hope that noble Lords opposite will take the same realistic attitude in any amendments that they table. However, one may say that that is a fine hope.

In the second chapter of Part III of the Bill amendments are made to assured shorthold tenancies. I intend to table an amendment on this subject. I have in the past made the following declaration to your Lordships' House. For many years I have had tenants of a furnished property. That is now dealt with on an assured shorthold basis. In the customary way, and in accordance with the tenancy agreement, I ask for and receive a certain amount by way of deposit against damage or default. Too often over the years tenants have reported to me most unfortunate past experiences. They have lost deposits because unscrupulous landlords or letting agents have misappropriated them and sometimes vanished without trace. In New South Wales all tenants' "bonds" (as they are called) have, by law, to be placed with one official deposit-holding body. The tenant knows that his money is safe under that system. I do not know whether that system is applied in other parts of Australia.

Here, I have used a number of different letting agents over the years. Some have a form of bonded insurance, others do not. I always check the position, but only the best informed tenants ever query it. If the agent has no bond or system of guarantee, I insist that I hold the deposit. I open a building society account in which I place the tenant's money. It is kept entirely separate from my own money. My amendment would not give me a personal financial advantage, although it would save the bother of having to make clear to the Inland Revenue that that money and the interest earned upon it belonged to the tenant.

I have taken soundings on this idea from agents who are involved in residential lettings and property owners. Most people believe that it is a sound idea. Certainly, it works very well in New South Wales. I will ask the Government to consider this matter when I table my amendment. It did not occur to me when I read the Bill that that might be even more relevant to those people in houses of multiple occupation. Often, they do not have the best landlords, although some are excellent. It would ensure the safe keeping of any deposit that such people had to make.

This is a complex and comprehensive Bill, and there will be much to debate. I reserve further comment until a later stage. I support this Second Reading.

4.58 p.m.

Lord Stallard

My Lords, like the noble Baroness who has just spoken, I will try to be brief. It is inevitable that noble Lords who for many years have been interested in housing issues are involved with voluntary organisations. I declare two interests. I am chairman of the all-party group in your Lordships' House which deals with issues associated with ageing. The secretary of that group is sponsored by Age Concern. I have recently been approached to become a patron of the Abbeyfield Society, which appointment I have accepted. I am interested in the whole subject, but those are two instances that I thought I should mention.

I, too, congratulate the Minister on introducing the Bill. I imagine that he is delighted that he did not have to introduce the two Bills together. They would have amounted to about 650 clauses. I thought that this was a jumbo Bill, but the two parts together would have been horrendous. I can understand my noble friend Lord Williams expressing the comments that he did. The Bill has 205 clauses and 16 schedules. It comes to us at a time when voluntary organisations, childcare organisations, local authorities, church organisations such as the CHAS, Church Action on Poverty, the Church National Housing Coalition, and many others are expressing, and have been for months past, grave anxiety about the chronic shortage of suitable affordable accommodation.

Anyone who has been interested in housing for any length of time knows that whatever Bill is produced, whatever palliatives are discussed, the basic problem is the shortage of affordable rented housing. We cannot get away from that. Until someone accepts that and brings forward a Bill to increase the supply of affordable rented housing, we shall be talking from now until Domesday about Bills like this. The right reverend Prelate the Bishop of Oxford made a number of salient points on these issues.

I wish to express gratitude and thanks to all those voluntary organisations which took the trouble to send us detailed analyses of what they see in the Bill, what should be in the Bill, and so on, because with a Bill of this length and importance, God knows how long it would take some of us merely to read through the Bill let alone analyse what is meant by it. I am grateful to all those organisations for their assistance.

I remember well when the White Paper was issued in 1994. At that time, 120,000 homeless households were accepted for housing by local authorities. Over 50,000 of them were in temporary accommodation, much of it unsatisfactory. There were over 1 million households on local authority housing waiting lists. It was estimated that an annual supply of between 100,000 and 125,000 additional homes at affordable rents was needed to meet the demand. Yet it was proposed to build fewer than 30,000 houses. I do not believe that the 30,000 materialised, but that was the proposal at that time.

In a recent publication, Cardinal Hume was moved to say: I would hope that no action would be taken which diminishes the duty on local authorities to help those most in need of housing, and that priority will be given to finding ways of meeting the desperate need to increase the supply of affordable accommodation for those without a home. It is not changing the legislation, surely, which will resolve the problem of homelessness but the provision of more resources". As I said at the beginning, those remarks are being echoed throughout the caring community.

I shall highlight one or two of the areas which are of particular interest to me. Like the noble Baroness, I hope to be able to participate fully in later stages of the Bill. Other speakers will highlight other aspects of the matter, as has already been done. First, I am concerned about changes in the Bill to housing policy which may adversely affect older people. That point was mentioned. Age Concern has gone to a great deal of trouble to try to analyse what that will mean. Parts VI and VII seek to alter the duties of local authorities with regard to homeless people and allocations policy. Among the groups affected by those changes are older people who become homeless. Not many people know that older people do become homeless. They believe that older people are secure in homes for life. We understand that that is not true.

Between 1990 and 1994 approximately 6,000 people per year were accepted as homeless and in priority need due to old age. That represents 5 per cent. of all acceptances, similar to the percentages of those homeless people who suffer domestic violence or who are vulnerable due to mental illness or disability. Older people can become homeless for a variety of reasons, including the loss of insecure private rented accommodation. Believe it or not, many of them become homeless as a result of a breakdown of their marriage. I do not know about relationships; they may be too old for that. It may be due to the breakdown of arrangements for living with the family. That often causes an older person to become homeless. We have heard of hundreds of older people who lose their tied accommodation when they retire. It is a problem for many older people.

At present, under the Housing Act 1985, local authorities have a duty to secure accommodation for all those people in priority need who are homeless and who are not found to be intentionally homeless. Local authorities are also required to give reasonable preference in their allocations policies to those people whom they accept as homeless and in priority need. The Bill removes the requirement on local authorities to give preference to homeless people in their allocations policies, and gives local authorities a duty to provide only temporary accommodation to homeless people. That creates all kinds of problems.

Local authorities only have a duty to provide accommodation for homeless older people where there is suitable accommodation available in the area. That itself presents a number of problems. Such accommodation is likely to be in the private rented sector. It may be difficult for older people to have access to that type of accommodation, for a number of obvious financial reasons. They may be on low incomes and have little access to money for a deposit or rent in advance, which such landlords require.

Accommodation in the private rented sector is now let almost exclusively on short-term tenancies, usually for six months. The insecurity of such accommodation is particularly unsuitable for older people who rely upon informal and formal support networks, such as family and friends, health services, home helps, meals on wheels, and so on. Older people need stability and not constantly shifting six-month tenancies. Older people are also likely to be less able to cope with the physical and emotional upheaval of the frequent moves which may be necessitated by living in insecure accommodation. Some older people require adaptations to homes to enable them to live there. It will be difficult to arrange for the necessary adaptations in a short-term tenancy.

If the local authority is satisfied that there is no suitable accommodation in the area, they will have a duty to house the homeless household, but they will be able to provide temporary accommodation only. The Government conceded in Committee in the other place that that could be for up to two years. It was originally to be for one year, but they made the concession, and we are grateful for it. The case must be reviewed within two years to ensure that the individual is still in priority need, and that no suitable accommodation is available. That was a welcome change to the Bill in the other place. Age Concern and others would like to see a requirement that local authorities should ensure that temporary accommodation is provided for homeless people until permanent housing can be secured. We hope that that might be an acceptable amendment.

Even those who meet the tighter definition of homelessness under the Bill no longer have a right to a permanent home. As I said, in the other place the Government made that concession, for which we are grateful, and we hope that it can be built upon. I wish to mention briefly the question of houses in multiple occupation. For many years I was a founder member of CHAR in the other place. We were very much concerned with the problems of houses in multiple occupation, especially fire hazards and the lack of statutory provision to control those places. Nothing in this Bill puts that right.

There are a number of provisions in the Bill—and I do not have time to go through them all—which improve the situation with regard to houses in multiple occupation. But the Government still fight shy of mandatory regulations in relation to fire. We know for a fact that the risk of dying in a fire in a house in multiple occupation is 20 times greater than in an ordinary house. There have been many examples in and around London of serious fires in houses in multiple occupation which could have been avoided had there been a mandatory obligation on the part of the people who own the houses to make adequate fire and safety provision. Therefore, I wish to see amendments in that sphere.

The right reverend Prelate referred to young, single people. I am particularly concerned about that because a number of youngsters have raised with me the problem of what happens when they leave local authority care. When they leave care, they are virtually abandoned. They take their few bits and pieces in a carrier bag and say "Cheerio" at the gate. That is that. They are then left to fend for themselves. There is no provision and in many cases there is no one there to help them at that stage. That becomes a problem.

I am grateful to the National Council for Voluntary Child Care Organisations which sent me some examples. I shall not refer to them all because there are too many of them but one or two seem to typify what I have found. First, there is the case of Martin, who is 17. The example states: He was looked after by the local authority from the age of six. After leaving his Children's Home at the age of 16 he was in supported lodgings for a year and enrolled on a Youth Training Programme. Eventually he has to move from the supported lodgings and is assessed as homeless, but no assistance is available. Martin finds bed and breakfast accommodation, but after a few weeks he cannot afford the rent on his training grant and is forced to move out … he cannot find any other affordable accommodation. Martin spends some months moving from friend to friend, sleeping on floors or sofas. He has to drop out from his YT course owing to his unstable and transient situation, and becomes homeless again. On applying to the Housing Department he is given a list of bed and breakfasts and private landlords", which are quite outside his financial means. The report continues: When last heard of he was sleeping rough in London". I am sure that there are many more such examples of children leaving care and being unable to find help. We wish to see some changes in that regard.

Another example which the organisation sent me is of Justine, who is also 17. The example states: Her father has been sexually abusing her for as long as she can remember and she eventually reports these allegations to her local authority Social Services Department. Social workers are supportive and her father leaves the family home pending court action. For a number of reasons court action does not materialise and Justine's father returns home. The Social Services Department now asks the Housing Authority to help, but Justine is given no allocation preference. The only available accommodation is in a private multi-occupation hostel type dwelling. To begin with Justine feels safer, and able to get on with her life and finds a job in a supermarket. She then discovers that two of the residents in the hostel are men living away from their families while child abuse allegations are being investigated. Justine feels frightened and threatened and leaves the hostel. The supermarket where she worked has no idea where she is". Those are probably typical examples of many cases in inner city areas which nobody seems to be picking up. When the youngsters themselves try to do something about their situation, they do not seem to be very successful. I hope that the Bill will be suitably amended to deal with such cases. I hope that I shall be able to participate in the remaining stages of the Bill.

5.15 p.m.

Lord Northbourne

My Lords, I hope not to detain your Lordships very long. I wish to address one or two issues in relation to the Bill; I wish to mention in particular young children, young people and their families. Before doing so, I should like to give one piece of background which seems extremely important. I draw your Lordships' attention to the report on housing benefit fraud published yesterday by the Social Security Committee of another place, the chairman of which is the honourable Member for Birkenhead, Mr. Frank Field.

Paragraph 6 of the report states that, the amount of Housing Benefit fraud estimated by the Government is around £1 billion … It is possible that the true total is £2 billion, perhaps even greater … The National Insurance Number system is far from secure and allows great scope for large scale fraud to be perpetrated". This means that £2 billion—£2,000 million—of taxpayers' money is being disbursed by local authorities as agents for the Government to the wrong people. Let us imagine the chairman of ICI or Barclays Bank standing up in front of his shareholders and saying that even £1 million was being disbursed to the wrong people. He would be hung, drawn and quartered. What action will the Government take to bring to book those who are responsible, through their negligence, for that gigantic misuse of taxpayers' money? I hope that when the Minister replies he will not plead lack of money for housing. There is plenty of money, but it is being wasted.

I turn now to possible opportunities for improving the Bill in relation to children, young people and their families. There is a strong interaction between housing and families. Inadequate or non-existent housing is a major cause of relationship breakdown in families. On the other side, relationship breakdown gives rise to the need for more housing. Therefore, we have a kind of vicious circle.

There is incontrovertible evidence now that family dysfunction leads to many of the evils of our society which are extremely costly to the taxpayer; for example, truanting, juvenile crime, drug and substance abuse, and unemployability. Those can all be linked positively with an unhappy family background. There are also positive links with mental and physical ill health. Together those social evils represent an enormous annual cost to the taxpayer and to that cost must be added the cost of additional housing when family relationships break down.

Of course, it is true that governments cannot make people good and they cannot make members of families love one another. But what they can and should do is to create an enabling environment in which families have a chance to thrive, to care for one another, and to look after one another. Is it not time that some government looked seriously at the links between family breakdown and homelessness to see whether more support for parents and more preparation for the roles of father and mother, husband and wife, could not, at minimal cost to the taxpayer, reduce that gigantic cost created by housing subsidy, crime and so on?

I now turn to two areas in the Bill where I feel there is need for further amendment and improvement. The first relates to temporary accommodation. The disastrous effects of unsatisfactory bed-and-breakfast accommodation on families with young children is well documented. I accept the need for some temporary accommodation but why must it be of such low quality? Surely standards could be raised by law or regulation and rigorously enforced. Bed-and-breakfast accommodation is paid for by the taxpayers. We must ensure that the minimum standard of accommodation provided for families with children is higher than at present. Should we not limit the length of stay of families with children in such accommodation?

The second group about which I am concerned was mentioned by the noble Lord, Lord Stallard. I refer to the problem of young people coming out of care and young people who leave home at 16 as a result of abuse or violence. Each year 10,000 people leave care. Sixty per cent. of them are aged 16 to 17 whereas the average age of someone leaving the family is 20 to 22. In Great Britain there are 195,000 homeless young people under 25. It is estimated that 40 per cent. of homelessness among 16 and 17 year-olds is directly as a result of leaving care.

I have met such young people during my work at Toynbee Hall; I know they have suffered major traumas. They have not grown up with the support of both or even one loving adult to care for them and guide them. Often the preparation for adult life they were given in children's homes was inadequate. In many cases, they were moved from one children's home to another, never able to put down roots. The psychological problem of children who have been abused or subjected to violence I do not need to stress.

I am not being negative; I want to be positive. Such young people need more than just accommodation. I welcome the Government's initiative in providing for advice but we need more than advice. Some people need pro-active support. They need support in coping with the problems of finding a home and a job and learning how to work the system and get on with neighbours and the people with whom they work and live. Giving such young people support is not very expensive, and later savings will be made in respect of crime, health and extra housing.

What I am suggesting is not pie in the sky. At the moment a number of schemes are operating in this country. Perhaps I may briefly introduce your Lordships to such a scheme in which I can declare a modest interest as my wife is chairman of the charitable organisation which runs it. It is an organisation run by the Kent Community Housing Trust called Moving Forward. It is for young people aged 16 to 21 who are homeless or living in insecure or unsuitable housing who would benefit from support and advice in gaining access to education, training, employment and housing opportunities and who are sufficiently motivated and willing to enter into an agreed plan of action which identifies the steps they can take towards moving forward.

If a young person decides to join Moving Forward a plan will be agreed with the keyworker setting out immediate and long-term goals. The keyworker will then help the person to find training and accommodation. Sometimes the organisation guarantees the rent to a private landlord and enters into a contract with the young person about standards of behaviour. It helps them and guides them but, more than that, it picks them up when they fall. When a number of times they do not get up in the morning and are kicked out of their training programme, they will be told, "Come on, you can do better than that. Let's try another way." That is the kind of help which such young people need and it is being given by Moving Forward. I believe that at low cost it could be widely extended across the country.

The children's organisations which are concerned about the Bill are unanimous in saying that some local authorities are doing an excellent job. The problem is that performance across the country is uneven. Some local authorities are doing very badly and always argue that the Government are not giving them enough money. That may be true, but it does not sound convincing bearing in mind that other local authorities are doing a good job.

If local democracy were really working the voters would throw out the authorities which are not doing their job properly. However, as we all know, it does not work because in local elections people cast their votes on the basis of what the national government are doing. Therefore, with great regret, I believe there is no alternative to more intervention by central government to try to ensure that local authorities provide a more uniform standard of performance. It is necessary for the Government to set minimum standards and to provide a strongly worded code of practice which will be enforced to ensure that local authorities are aware of their obligations under the Housing Act and the Children Act in such a way as to ensure that the most vulnerable people in our society receive at least the minimum housing provision they need.

5.26 p.m.

Lord Swinfen

My Lords, I wish to mention three matters with which we need to deal as the Bill goes through your Lordships' House. Under the Bill, housing association tenants will acquire the right to buy their homes at a discount. I am all in favour of that, including the right of tenants to buy accommodation specifically designed or adapted for physically disabled people. I say that in particular because an amendment which I moved to a Bill some years ago gave disabled people the right to buy such local authority-owned homes.

The primary purpose of housing associations is to provide homes at a low rent. The sale of a home does not mean that it ceases to exist. What concerns me is that the right to buy is to be at a discount. Will the Housing Corporation make up the difference in order to enable housing associations to replace the home that has been sold?

Furthermore, housing associations now raise an increasing proportion of their finance from private sources, often on a mortgage. The whole of the loan, not just the discounted proportion, becomes repayable on the disposal of the home. In some cases, the disposal of one flat in a block could mean that the loan on the block as a whole would have to be repaid. Will those points be taken into account when the housing association seeks funds to build replacement accommodation? Will those funds be sufficient to replace accommodation properly designed or adapted for disabled people to the same standard and not just to ordinary needs standards?

I turn to introductory tenancies. I understand and appreciate the need for them but I have some anxieties about how they may adversely affect some people with physical or mental disabilities. They could become a focus of harassment or discrimination. Some people with disabilities exhibit unusual and sometimes noisy behaviour or appear to be different. Although measures to deal with anti-social behaviour are to be welcomed, there must be no possibility of these measures being used to discriminate against disabled people or any other members of the community who are seen as being different.

As regards social housing, the new system proposed in the Bill would give priority to some disabled people. However, I consider that there are flaws which could result in many disabled people in extreme housing need receiving a low priority. The present housing situation of disabled people should receive proper consideration as the proposed new system would not include disabled people living in accommodation which is not accessible or is inappropriate for other reasons. We shall need to look at all those points carefully in Committee.

I have one final point, on community alarm systems. The Bill fails to clarify the powers of district councils to provide community alarm systems. I understand that local authorities are not allowed to charge for alarm systems. Yet it seems senseless to have an alarm system in an area where there is mixed local authority and private housing. I feel that the local authority alarm system should be extended at a cost to the private housing. If we do not do this, and a second system is set up, it is in effect a waste of the national funds.

5.30 p.m.

Baroness Fisher of Rednal

My Lords, I rise to express my feelings about this Government's policy on housing. I may have been around a long time, but I remember when political parties used to extol the number of houses they would build in a year. In the Birmingham area, I remember that housing estates were built in the late 1930s by the Birmingham City Council under a Conservative Government. All the large council housing estates that we have around the City of Birmingham were built under good Conservatives. There is a great difference between the Conservatives we now have and those we used to have.

I remember when we opened the first multi-storey block of flats in Birmingham. No other than Mr. Harold Macmillan, MP, the Minister of Housing, opened it. We heard of the virtues of the many houses they had built that year. I believe the figure was about 200 more than we had built the previous year.

However, this Government no longer wish to build any houses for ordinary people. When did that change take place in Conservative philosophy? The mind boggles at how that swing took place. No doubt the noble Lord now sitting on the Front Bench will have to ask his noble friend when he returns; he may have more knowledge of that period. The philosophy has changed but it is a change for the worse.

The White Paper published by John Gummer led to this Bill. When he launched it, he said: The Government aim is to ensure that decent housing is within the reach of every family in Britain". I have flicked through all the pages of the Bill—I have not read them all—but I cannot see that sentiment expressed on any page in the Bill. When the noble Lord replies, perhaps he will point to it.

I accept that there has to be a reasonable balance between owner occupation, private renting and social renting. We know that in our society people earn differing amounts. Some will have a choice. But if a person is in one specific area, he does not have that choice. It will be local authority housing, or housing association housing.

Therefore, we have to ask ourselves whether the Bill will deal with the serious matter of helping families to a decent home. I believe that a home is a fundamental priority for everyone. Decent homes mean better health for most people, especially those who live in the deplorable conditions which we all know about. Good housing helps children at school. We have had statistics about children who are not doing so well at their primary schools. In its audit, the Audit Commission should discover what kind of housing those children are in. Are they in bed and breakfast accommodation? Are they in appalling properties that should be pulled down? It should consider the difference that a decent home makes in the education of school children.

We know that a secure home reduces tension in the family. Therefore, if we are building for secure homes, tension is relieved in the family. Often families can stay together for longer periods. There is a release of the tension of close living and disharmony.

There is a powerful case for more investment in housing. Housing has been cut more severely over the past two decades than any other area of social expenditure. The White Paper indicates that fewer than 300,000 new homes a year for rent are proposed. The mind boggles when one considers that figure divided around the country.

The White Paper proposes, as does the Bill, a tighter definition of homelessness. That will deny to thousands of homeless people living in insecure private accommodation or living with relatives any right to help. The Minister told us that local authorities will receive an edict from government to make sure that the people they house are not jumping the queue. It is easy for someone in Whitehall to lay down an edict. The situation is different when you are the person behind the counter in the housing office with someone in front of you. You meekly say, "I have to fill in this form", and the applicant replies, "I don't want you to fill in any forms. I want you to find me a house". The tension that builds up when people are homeless is immense. I know that because for a long time I was the chairman of Birmingham's housing committee, then as now the largest housing authority in the country. You see the tension of these people who say "We've nowhere to go. Tell us where we can go". It is no use saying to a person who has three children and has to trail around, "Here's a list of private landlords. See what you can do". Many parts of the country do not have the types of houses that one sees in the London area, where a landlord may have 10 flatlets in a house. In many parts of the country there is no such accommodation.

When we consider the Bill in Committee, will the Minister accept that it is no good laying down cast-iron rules telling the local housing authorities, "This is what you have to do, and this is what you have to tell the people". That will lead to friction. Instead of the harmony that we can have at present, we shall have disharmony. Therefore, the needs of homeless people and those on the waiting list are best met by allowing local authorities and housing associations to act in the capable way that they know.

The noble Lord, Lord Stallard and the noble Lord, Lord Northbourne, referred to the opportunities for young people. The noble Lord, Lord Northbourne, mentioned an organisation with which his wife was involved. I am involved in the Birmingham area with St. Basil's, an organisation for the young homeless not unknown to Ministers in this House and in another place. Such agencies provide accommodation in the Birmingham area. They set the young people on their way again. They look after them and try to find them job opportunities. Such bodies are well organised in many parts of the country. I speak with knowledge of St. Basil's. I know that there are similar organisations in various parts of the country.

All that work will be completely lost in the future if they cannot prepare people to return to the community. In the main, that help will only come when they have been with the agencies for 12 months or more if the local authority does not help to put them on the road to success in permanent local authority homes or housing corporation properties.

Homelessness is caused by a lack of suitable affordable accommodation. A long time ago, J K Galbraith said this: In no country does the market system provide good quality low-cost housing. Millions are now learning to their cost what that means. We know that it is true.

In my view, this White Paper contains no new ideas. It provides for no new money and no new housing. There is nothing to get a house-building programme under way. There is only the old dogma and the measly attitude which this Government show to the homeless and to those who are ill-provided for in terms of housing.

The problem with the Housing Bill is that many of its provisions, such as those relating to changes in legislation concerning the homeless, the reduction in rights for private sector tenants and changes in the allocation of social housing, will not address the big housing issues in Britain today. Without adequate funding, the measures contained in the Housing Bill will simply amount to tinkering at the edges and the impressive words about decent homes being within everybody's grasp will not turn into reality.

5.42 p.m.

Lord Jenkin of Roding

My Lords, I cannot claim to have the experience of the noble Baroness, Lady Fisher of Rednal, of being chairman of a housing committee, but rather a long time ago I was for a year or two chairman of the housing committee of what was then Hornsey Borough Council. I am sorry that the noble Lord, Lord McIntosh of Haringey, has left the Chamber. When I drive along Turnpike Lane in what was Hornsey and see the monstrous block of flats that stands at the end of it, for which I and my committee were responsible, I have a deep sense of shame. Whatever else one tried to do then, one had absolutely no idea that building these massive blocks of flats would provide such poor long-term secure homes for the tenants. I should be slightly surprised if the noble Baroness, from a point of vantage in her great city, looks at the huge, towering blocks and feels that she has given the tenants the right sort of accommodation. She may do so, in which case all I can say is that we have heard the authentic voice of old Labour this evening.

Most people recognise that housing policy took a very bad wrong turn in providing tower blocks. Condemning families with small children to live in these high tower blocks is now costing this country dear in terms of social problems.

Baroness Fisher of Rednal

My Lords, the noble Lord's party built high blocks of flats. The block of flats I mentioned which was opened by the Minister was built under the Tories. Those flats are still there. They have been completely renovated and brought up to date. I invite my noble friend to come to Birmingham and I will take him to see them.

Lord Jenkin of Roding

My Lords, I did not the accuse the noble Baroness alone in this. I said "we" and I referred to Turnpike Lane. There are many renovated blocks of flats. The best example I know of is a block which used to be called Myrtle Gardens in Liverpool. It was taken over by Barratts. It was sold by the council before 1983. It was a superb example of a renovated block because the problems had been learnt. It was a matter of great regret to me that Mr. Hatton and his colleagues refused to sell the neighbouring block where exactly the same process could have happened. When I left office, it was still a derelict, vandalised, empty block and was no advertisement for Liverpool City Council.

There is a danger with a Bill of this kind that one makes a series of disjointed comments on a wide range of proposals, most of which merely foreshadow the debates that will take place in Committee, and I shall try to avoid doing that.

The Bill comes to us after extensive debate in another place. I was mildly surprised to hear the noble Lord, Lord Williams of Elvel, criticise the fact that the Government had listened to what had been said and had accepted the principle of a large number of amendments. I can assure the House that if the Government had refused to do that they would have been accused of being intransigent and deaf and blind to all the arguments that had been put forward. It does not lie in the mouth of the Opposition Front Bench to have it both ways. They should welcome this, and indeed there have been expressions of welcome for some of the changes that have been made.

I particularly welcome the addition of the clauses of the Bill dealing with abuses by an unscrupulous tiny minority of landlords of long-leasehold properties. I was glad that my noble friend referred to the campaign in the Evening Standard which did a great deal to expose the problems. I think the noble Lord, Lord Williams, was putting it a little high when he said that because of that the whole system had failed. I do not think that is right. Clearly it is necessary to prevent the abuses. It has been done without creating problems for the vast majority of perfectly responsible and respectable landlords. I have had some briefing from the British Property Federation, which is now satisfied with the Bill as it has come to this House.

The great expansion in home ownership is one of Britain's major post-war achievements. Millions of families now enjoy not only the fruits of having a home of their own but also of having assets which can endure for the benefit of their families and their successors. I should like to put on record that I believe the contribution of the mutual building societies has been absolutely crucial in this. I am sure I was not alone in being impressed by the recent "Panorama" programme which questioned the wisdom of many of these mutual societies turning themselves into proprietary banks and whether they would continue to make the contribution to home ownership that those great societies have made over recent decades.

The introduction of the right to buy was a major leap forward and I very much support the extension of it which is provided for in this Bill. I agree on one point with the right reverend Prelate the Bishop of Oxford. I believe we need to look carefully at the Section 106 cases where land was made available subject to planning conditions that it should be available for rent. I am not sure that it is necessarily right that the tenants in those cases should automatically have a right to buy when the covenants clearly refer to the provision of affordable housing to rent. There may also be other cases.

I realise that there will be many more debates on this matter, but I should like to turn briefly to the subject of housing allocation and homelessness. That is undoubtedly the most controversial part of this Bill. I welcome the single lists for the allocation of long-term secure accommodation and local authority nomination for sound tenancies provided by registered local landlords.

The noble Lord, Lord Stallard, is not in his place, but I cannot believe that anyone who has ever represented a constituency in London has not been at the receiving end of vociferous complaints from people whose housing is deplorable, who have been on a housing list for years but who find some flibbertigibbet of a girl jumping the queue and occupying a flat because she has been regarded as homeless. It is not necessarily a girl; it could be a young man, but it more often tends to be girls. It used to be that they had to have a baby, and then they went into a flat. That has caused enormous offence and made the system appear monstrously unfair. It is right for there to be a single list.

In relation to the figures, under the heading "Homes for those who need them most", dealing with the statutorily homeless, page 36 of the White Paper states: They gain this priority regardless of the importance of the needs of other people on the housing waiting list. Today 40% of local authority new tenancies (over 80% in some London authorities) and over a quarter of allocations of housing association tenancies go to households accepted under the homelessness legislation. I have found it impossible to persuade often decent, struggling families, living in substandard accommodation, often sharing—

Baroness Hollis of Heigham

My Lords, if I may—

Lord Jenkin of Roding

My Lords, I must get on. We will have an opportunity to return to the point in Committee, I assure the noble Baroness.

The families I mentioned find themselves pipped at the post by someone deemed to be homeless. Under the existing legislation there has been a tendency for authorities to look at categories instead of comparative need, which they should be considering. I support what my noble friend on the Front Bench said about the distinction between finding permanent accommodation and emergency help for those who have involuntarily found themselves homeless. I welcome the proposed drawing of a distinction between short-term relief for homelessness and long-term secure accommodation. I do not wish to repeat the arguments which have already been made.

I wish to take up one point made by the noble Lord, Lord Northbourne. He has left his place, but I admired what he said. Obviously youngsters leaving care, as happens at the moment in some areas, receive precious little support and end up in deep trouble. In that area the voluntary bodies are doing excellent work, but some local authorities could do better. There are cases of youngsters driven out of their home, perhaps by sexual abuse or some other form of maltreatment, and who are clearly in need of support. If they are of an age to come under the Children Act, it is a matter for the social services.

We have heard much about the breakdown of family life and problems of marital discord leading to family breakup with young people leaving. There is a tendency sometimes for us to take pity on those—I deliberately use neutral words—who no longer live in the family home. Some may leave involuntarily, some may be totally justified in leaving. However, my mind goes back to our debates on the Family Law Bill and divorce. Much was said about people not trying hard enough to make a go of things. One of the big changes in society of which noble Lords on both sides of the House spoke was ways in which people could be encouraged to surmount difficulties and retain family unity. It is the same with housing. In some areas it has become too easy to walk out knowing that a local authority will treat the person as homeless. That applies to young people, not the 16 to 17 year-olds; they are a separate category. We all know that as the children grow up and reach adulthood, families face periods of stress, arguing and worse; periods when parents seek to protect and guide their children but the youngsters seek independence and more control over their lives. There is widespread acceptance for the view that in most cases the best solution is for the family to stay together until the young person is able to fend for himself or herself. That requires compromises and realism from all parties.

How can it help parents in those circumstances, who may often have good homes with no question of inadequate housing, if the youngster throws into their face the suggestion: "Look, my friends, Annie, Betty and Celia have all been housed by the local authority. They all have flats, I'm going to do the same". They have their housing benefit and off they go. I know just such a family where that argument took place. The young lady went off and was not only housed but was also provided with furniture, refrigerator and all the extras. The noble Baroness shakes her head, I am sorry but I know the family. The parents turn round and say: "Surely to goodness, it should be the duty of the authorities to try to help keep such a family together, not to make it easy for it to break up".

It seems to me that we have a tendency to listen to the organisations which quite properly represent those whom they see as the victims of family breakdown and homelessness, whereas we have an overriding duty to try to preserve the strength of the social fabric as a whole. If, through our housing policy, we can try to keep families together so that they do not break up and become charges on the community, we will be doing our duty. It is too easy to remedy the plight of the wandering waif and not recognise that the availability of that remedy may have caused the waif to wander in the first place.

I hope that my noble friend can give me an assurance that the new provisions in the Bill for allocations for dealing with homelessness will not in any way exacerbate the position and may indeed help to strengthen families. Such people are quite different from the youngsters leaving care and children who have been abused. I want an assurance that housing will not be used as a means of encouraging youngsters to leave home when it would be much better for them to stay there. The noble Baroness has sat through my speech shaking her head sadly. No doubt she will answer what I have said, but if she does not recognise the phenomenon that I have described, then in the words of the comedian, she has not lived.

5.58 p.m.

Lord Monkswell

My Lords, there is a great temptation to respond to the last speaker by saying that on this side of the House we are concerned about young people who may be wandering the streets, homeless and without a job, and with no one to care for them. However, I shall try to restrain myself.

Most Members of your Lordships' House come to the debate with different experiences and understanding of the situation. It may be useful to run through my experiences so that noble Lords can see whether I contribute to the debate and make their own judgments.

I have been a city councillor in Manchester, representing a ward where there were two good tower blocks whose residents enjoyed living in them. The ward encompassed well-off owner occupation and very poor council estates. I am proud that the ward, in the suburb of Wythenshawe, Manchester, formed part of the largest council estate in Europe. My wife grew up in a council house, and we have been owner occupiers since we married. I currently have a flat in the biggest complex in the whole of Europe, Dolphin Square. It was built as a private speculative development and over the years has been supported by the local authority. It is currently under what might be described as a housing association and the flats are available only for renting; it is not possible to buy. The arrangement has been in existence since 1934. The mechanism of tenure and the running of the complex have stood the test of time. I wonder how the changes that the Government are to introduce will affect the future of such a complex.

I heard the other day that a tenant was evicted because the person was no longer in residence. The flat had been rented for many years, but for the last two or three years the tenant had not bothered to visit it. The tenant was effectively evicted. It was felt by the trust managing the property that it was not right that there should be empty flats within the complex. That is the background to my contribution.

My initial reading of the Bill involved a fair degree of struggle with the grammar and the language used in some parts of it. I hope that the noble Lord, Lord Quirk, will enter our debates in Committee to try to tease out the meanings of some of the clauses and subsections. In true House of Lords fashion, I read through the Bill searching for the "good bits", those parts that we could support as being positive and useful. There should obviously be some good bits in such a large Bill. I found two such elements. Unfortunately, they were circumscribed by difficulties. I shall go into them in more detail.

Fairness will be a theme of my contribution. There are eight separate sections of the Bill: one could almost describe them as eight Bills in one. Before noble Lords become worried, I shall not spend an hour making a Second Reading speech, although that could be justified on the basis of the Bill. I shall merely touch briefly on each of the elements.

The first element is the right to buy. I am among those in the Labour Party who believe that the ability of council tenants to buy the house in which they live is quite reasonable. One of the problems of housing policies from the 1930s to the 1960s was the emergence of monolithic estates, whether for private owner occupation or council tenancy. It bred divisions in our society. The ability of council tenants to buy their houses offered the opportunity to break down some of those divisions.

However, the policy was unfair for two reasons. First, local authorities were prevented from buying private houses in which to rehouse council tenants or house homeless people on housing waiting lists. Secondly, and rather more fundamental, the Government departed from the norms of the market. I refer to the policy of giving discounts. It was most unfair to the community at large. Effectively, the community having bought the land, built the houses and maintained them, the property belonged to the community. It belonged to us. It was therefore unfair to sell that property, to decide a market value, and to say to the person buying it, "You do not need to pay the market price, the value that it has to us as a community. You can get it for less than that. You will be given a discount." I do not know what the discount figure is. I have tabled a Question for Written Answer to try to extract the figure for the amount of public money used over the past 15 years or so that the policy has been in existence. I suspect that the combined wealth of all the Tory Members of Parliament in the House of Commons and in this place who voted for that policy would not be enough to repay to taxpayers the amount of money disbursed unfairly as a result. It might have been fair had the same policy extended to tenants in the private sector and if big private landlords with private tenants had been required to sell their properties at the same sort of discount and provide the discount out of their own pockets. I do not think, however, that the Conservatives would suggest that to their supporters.

When it comes to the right to buy of a housing association, the situation is very curious. Again, as a result of government policy, there is now private finance in the housing association market. At one time it was predominantly Housing Corporation money. We now have a situation whereby a housing association can build a house, half of it funded by the taxpayer and half by the private sector. When that property is sold the private financier gets all his money back, but the public purse has to pay even for the discount that private financiers have contributed. The whole process is unfair. There are a number of anomalies within the Bill which will give rise to some interesting debates in Committee.

The next mini-Bill within the Bill deals with housing in multiple occupation. I support my noble friend Lord Williams of Elvel. He mentioned that it can work only by having a compulsory register and if we insist on the control requirements—and, one hopes, extend them. In the Housing Grants, Construction and Regeneration Bill we took away from local authorities the ability to insist through their grant-giving powers and Housing Act notice powers that housing in multiple occupation was brought up to a decent standard. So if we remove from local authorities powers to insist that the landlords of houses in multiple occupation bring the houses up to a decent standard, effectively we must introduce powers that enable local authorities to shut down houses in multiple occupation in order to protect vulnerable tenants.

I turn to the third mini-Bill dealing with leasehold reform. I am struck again by the unfairness of it. There is a short sub-paragraph under which the leaseholder is required to pay the landlord's insurance. It is illogical. If the landlord wants insurance, he should pay for it. If the leaseholder wants insurance, he should pay for that. We should not force one person to pay another's insurance bill. That would be a little unfair.

One of the difficulties with regard to housing benefit, on my reading of the Bill, is that there is to be a cash limit for each local authority, not only on the amount of housing benefit they can disburse, but also on the amount they can use for administration purposes. I suspect that that will lead to grave difficulties.

The fifth mini-Bill concerns the conduct of tenants. One of the things I learnt as a local councillor is that bad neighbours are not solely the province of council estates; they are not solely the province of people living in housing association accommodation. The problem goes right the way through society. If we have one system for dealing with bad neighbours in relation to one specific kind of tenure and another system for dealing with them in a different tenure, there is a risk of unfairness. There are references to consultation. But why should consultation be available only to council tenants and housing action trust tenants, and not to housing association and private tenants? Again, it produces unfairness.

Part VI concerns allocation of housing. I shall not speak on that. Previous speakers elaborated on homelessness. Again, one of the issues concerns the unfairness that will arise in that some people will be eligible to go on lists and others will not.

I have been speaking for far too long but perhaps I can ask one question. At the end of the Bill, in the "Miscellaneous and general provisions" section, reference is made to the application of the Bill to the Isles of Scilly. I have not seen that in previous Bills that have come before your Lordships' House. Perhaps the Minister can resolve the matter. The other points I raised will no doubt emerge in Committee. However, we need to bear in mind the wise words of the noble Baroness, Lady Fisher of Rednal, when she said that the Bill will not contribute one iota to new resources for housing the poorly housed and the homeless. I suggest that she was slightly wrong when she said that it tinkered at the edges. It will, in fact, do major damage if it is not significantly amended by your Lordships' House.

6.13 p.m.

The Earl of Lytton

My Lords, in rising to speak on this Bill I must immediately declare an interest as an unpaid chairman of LEAS—the Leasehold Enfranchisement Advisory Service. Noble Lords may be aware that it is a co-funded—government and industry-funded—organisation set up in pursuit of a ministerial commitment during the passage of the 1993 Leasehold Reform, Housing and Urban Development Bill. I am also a chartered surveyor and a landowner and, therefore, I declare those interests. However, I am glad to say that I have no personal or professional interest in long leasehold property.

I must follow that declaration by an apology. It is possible that I shall not be able to stay until the end of the debate, and I apologise for that. My special interest concerns Part III of the Bill. As chairman of the LEAS I am particularly delighted with the interest shown in another place by Members of all parties and the commitment given by the Minister in respect of further funding of an advisory service. I am extremely pleased to see that provision in Clause 87.

In recent months there has been great uncertainty about the future of the service—bearing in mind the funding that it receives from the public sector—yet the demands on it for its impartial advice have never been greater. In particular, there has been a sharp escalation in requests for advice on management. Although that is outside the strict scope of the service, the staff have done their best to try to steer inquiries in the right direction. On behalf of the service I should like to express my warm appreciation for the support of the Government and the commitment to the future need for an advice service. I pay particular tribute to the chief executive of the LEAS and his staff who have worked extremely hard with limited resources.

There is a second reason to express appreciation for the Bill; namely, that it shows the hallmarks of the careful ear that the Government have given to some of the observations made by the LEAS on problem areas we encountered in the operation of the 1993 Act. The service believes that the Act can and does work and, to those who say otherwise, I merely say that my impression is that the figures do not support them. I also remind them gently that, since 1992, the property market as a whole is operating at a fraction of the volume at which it was running in the late 1980s.

I welcome many of the changes proposed in the Bill to the operation of the 1993 Act. I do so without reservation in respect of preventing abuses that have taken place arising out of management, the question of forfeiture of leases and methods clearly designed to deny the tenant's right of first refusal under the 1987 Act or to frustrate the process of enfranchisement. The measures are necessary and desirable to protect long leaseholders from the more unscrupulous type of management or freeholder. I am glad to note that the property industry also has been actively involved and consulted, as well as the home ownership sector.

If I may, I shall put aside my chairman's hat, put on another one and make comments of my own. Noting some of the amendments put forward in another place, a number of which have been contentious and were not accepted by the Government, I feel compelled to make some general comments of my own, as distinct from any views that the service may have, about the 1993 Act, long leasehold and management.

It is evident that, in some respects, the 1993 Act exposed opportunities for malpractice and exploitation. It did not create them; they were there before. Some of that may have been due to the media coverage of the problem areas and the public airing of loopholes. I do not blame the media for that. But I defend the 1993 Act, despite its complexities. If a pre-existing order of landlord and tenant is to be altered, as happened under the 1993 Act, it is right that there should be safeguards and that the rights of parties under the existing law of contract should be protected as far as money's worth can achieve that aim.

But I detect growing evidence that good landlords feel that they are being tarred with the same brush as the unscrupulous, while some of those lending institutions which campaigned so hard for the law to be changed in 1993 are now showing signs of reluctance to lend on long leasehold property at all. I put that down to a successful and indiscriminate airing that has been given to management problems, allied with a campaign against long leasehold as such. That is mirrored in a reluctance or lack of confidence among lenders in respect of housing association schemes. That is highly damaging to the forward prospects for investment to which the Minister rightly referred. I must express considerable personal concern over that. The evidence may even indicate that the Minister's concern about protecting that position comes a little late.

I shall remind the House of some core principles of long-term property ownership and management—and I apologise if it sounds as though I am teaching my grandmother to suck eggs. First, it should by now he clear that the ownership of freehold title of itself cannot secure good and effective management because management is part of a more complex interactive model and can even surprise the experts in the ways that it works.

Conversely, the control of management on its own—particularly if it has no control of title—and to the exclusion of any form of paternalistic motivation, is also no guarantee of good results. It can all too easily default to essentially short-term strategies with poor standards and the denial of long-term investment and commitment.

There has been no rapid expansion in the number of professional managers coming forward in the housing sector. Traditional professional managers are all too often seen as stooges of the old guard, the traditional landlord interests. I deplore that because there are few philanthropic organisations able and willing to provide a professional standard of management on a non-profit basis and giving an adequate duty of care, coupled with long-term strategic investment management. It is possible that housing associations will be able to fill this void, but it is by no means certain to me that arrangements with them could be set up without undue rigidity and I have some concerns about the underlying cost structures that they would bring to bear in terms of the management.

A right to manage is only as good as the quality of the management that is put in. It assumes that there is consensus within a building about forward aims. Unfortunately that does not always apply because differences in age, economic preference, social patterns and so on mean that one man's cost saving may be another man's leaky roof. Bearing in mind that they will have a duty to look at the management schemes, I wonder whether leasehold tribunals should not also have some fallback powers to appoint managers in cases of continuing disagreement over management policy rather than it being dealt with by the courts through some framework of management scheme. I raise the question without asking the Minister to answer at this juncture.

With mixed-use blocks, simply switching overall control from a commercial undertaking to a residential leaseholder does not create sustainable conditions for management. It is all very well to say that a 999-year lease is all right for the commercial investor but not for the residential one. That merely shifts the problem sideways and destabilises some other part of the economic model. The question that has been raised in another place of the percentage that should apply risks overlooking some fundamental problems. What we need is a substantial and defendable stake in property, a degree of paternalistic motivation, financial resources, entrepreneurial vision and ability over time. Those are the things that will procure good management.

My concern is that the situation as it stands at the moment will drive out good landlords and let in the spivs. There is too little reward and too much aggravation for honourable players in the market, certainly when it comes to enfranchisable blocks and, once they are enfranchised, there may be a complete lack of forward strategic objective. This is very important if we are talking about keeping out exploiters of new opportunities and keeping away speculators who see disrepair as an ideal opportunity for a bit of profit making. I hope that the new measures in the Bill will help in that respect, although I have to say that I have some doubts about how effective they will be.

There are always problems when dealing with enfranchisement and responding to consumer demand. Consumerism may be a very short-term exercise. Value for money and long-term investment are commonly overlooked by a transient population in a flat development. We have to be careful that we do not push out the blue chip investors, the blue chip ground floor tenants, in mixed-use developments. If we do that, it will not be in the public interest. We will be risking progressive disinvestment and we will not get rid of friction between occupiers and freeholders. I wonder whether some of the great London estates—and I am not privy to their decision making—have not already got far advanced plans to scale down their involvement or perhaps disinvest in residential long leaseholds in favour of something which is less troublesome. It would be an enormous shame if they were to start departing that field. As I say, I have no brief to argue their corner. However, I do detect that no one is likely to care if management and proprietorship are split until the day when the proprietor is seen not to care whether management is good or bad. We need to give that very careful thought so as not to destabilise all sorts of things such as the quality of urban environments, the quality of management and the enjoyment and amenity of residential occupiers in their homes. If we are not careful we will get into the mechanisms of changing cost and risk and seeing markets move. There is a great deal at stake here.

One final point is, about what I would call the "consumer bodies". Whenever we are dealing with multi-occupied property—I do not mean houses in multiple occupation; I mean blocks of, say, 100 or 150 flats—it is clear that any individual will always have only a minority say in the running of the block. Therefore, the concept of home ownership under the terms available to the freehold owner occupier of a single dwelling house can never apply. I sometimes wonder whether that message has been quite understood.

Finally, in connection with that last point, I would commend to the House the dictum of Aristotle that was often quoted by my late father which was along the lines—and I do not know whether I am quoting this correctly or not, "That which is owned in common belongs to nobody". I think that we would do well to consider that.

6.26 p.m.

Lord Gisborough

My Lords, I too declare an interest as the owner of a number of tenanted houses. The shortage of affordable housing is a crucial problem for many rural areas. At least 80,000 affordable homes are needed over the next five years, some 16,000 a year, and one report suggests that that figure should be nearer 150,000. Since 1989–90 some 15,000 new homes have been provided, mainly by housing associations through the Housing Corporation's special rural programme, yet during the 1980s, in spite of record levels of house building, homelessness rose in every county.

Rural housing problems are particularly acute in smaller villages, due to the shortage of suitable sites, the difficulty of gaining planning permission in sensitive locations, the extra cost involved with small schemes in remote locations and the difficulty of raising private finance. The proposal to extend the right to buy to housing association tenants through the purchase grant will seriously affect the existing and future provision of social housing in rural areas due to the lack of replacement houses, the lack of sites and the fact that, when social housing is sold on the open market, landowners will cease to make sites available for others to benefit. Planning authorities will be reluctant to grant planning permission and local communities will be deterred from giving support to new affordable housing schemes.

The Government's decision to exempt from grant social housing schemes with a population of less than 3,000 is therefore welcome, but if a numerical threshold is essential then the figure should surely be nearer 10,000. The real test should be whether there is a shortage of land and of affordable houses in any particular area. Exemption from grant should also be given to housing schemes built on exceptional sites, that is, outside normal planning permission, which are subject to a Section 106 agreement, with discretion to allow exemption for larger settlements where supply is particularly constrained. In order to restore confidence to landowners, planning authorities and local communities, there must be certainty that the exemptions, once agreed, will remain in place in the long term.

There is currently concern that the designations may be reviewed from time to time and the Statutory Instruments changed with the changed circumstances. The Housing Minister, Mr. Curry, in another place said that it was very likely that "most" settlements included in the rural exemption from the right to buy would remain exempt. That immediately raises doubts.

If boundaries are to be reviewed, how are providers of cheap land to be sure that houses will not be lost to the open market? How will the Government provide for special cases to be met—for example, small towns in the national parks, exceeding 3,000 in population but where alternative housing does not exist? How can planning authorities have the confidence to make Section 106 agreements? Any doubt about the future will seriously jeopardise the provision of social housing and destroy future provision. It will also inflate the value of land to the degree that there is hope value that exemptions will be lifted. Every time the right to buy social housing is exercised it will reduce the amount of social housing available. But, as there remains a shortage of affordable houses, the Government should make provision for the release of more land. The Bill fails to tackle this need.

The answer may be that the Town and Country Planning Acts should be changed so that the planning authorities can legitimately address the affordable housing issue. At present, affordable housing is not considered a land use issue and is therefore outside the scope of the planning system. Furthermore, the Housing Corporation should be given a duty to protect and enhance the environment and to consider the environmental implications of its decisions, and the Government and local authorities should be placed under the same general duty.

I should like to say a few words about the leasehold reform measures in the Bill. These were introduced following the exposure of the activities of a small number of unscrupulous landlords of long leasehold residential property. I warmly welcome the swift action the Government have taken in identifying this problem and introducing a focused package of measures. These measures will give lessees important new rights and provide effective safeguards against abuse, while at the same time not impinging on the vast majority of responsible landlords. Responsible landlords have nothing to fear from these measures; it is only the rogues who will be penalised. I congratulate the Government on striking this balance well. I should also like to pay tribute to the work of CARLA—the Campaign Against Residential Leasehold Abuse—in bringing these issues to the fore and maintaining the pressure for reform.

The Government's package of measures recognises the importance of the leasehold system of tenure in housing provision in this country. Leasehold tenure provides an alternative to freehold and increases choice in the market. Leasehold is a convenient form of tenure for many who do not wish to commit to a freehold purchase at the market price but who may for all kinds of reasons—perhaps for the duration of their careers—wish to live on the extremely well kept London estates.

I am pleased therefore that the Government have resisted the temptation to extend significantly the enfranchisement measures introduced in 1993. The measures in the Housing Bill are concerned with tackling bad management rather than transferring ownership, and they do this extremely well. Some have suggested that the Bill has had its teeth drawn. That is not how I see it. Far from having had its teeth drawn, the Bill now includes a comprehensive package of measures to protect lessees. Lessees will be able to challenge unfair service charge demands easily and cheaply through leasehold valuation tribunals and they will be able to do that without the threat that their leases will be forfeited. The obligation that landlords currently have to offer their lessees the right of first refusal where they wish to dispose of their interest will be strengthened and it will become a criminal offence not to do so.

When in February 1993 I spoke in the debate on what was then the Housing and Urban Development Bill, I mentioned an old lady I had visited in her flat in a block in Kensington. Her interest was not in the possibility of buying her freehold but rather in ensuring that the management of her block was carried out satisfactorily. I felt that the 1993 Bill offered her no assistance. I am pleased that the new measures we are considering today, which build on the protection which already exists in the Landlord and Tenant Act 1987, will give her real help and that, where a landlord neglects his duty or abuses his lessees in future, those lessees will have the ability to apply to the tribunal, rather than the courts, for an order that alternative management arrangements should be put in place. Moreover, the criteria which the tribunal can consider will be expanded so that the level of service charge can be looked at, and a departure from the new code of practice for the management of leasehold property, which the property industry has signed up to, will be an indicator of mismanagement which the LVT can consider.

I know that responsible property owners, through the British Property Federation and CARLA, are continuing their constructive dialogue to see whether there are further refinements to the 1987 Act which can be agreed. I hope the Government will listen carefully to any joint representations those organisations make.

Finally, I should like to flag up one area of difficulty I see with the new procedures which will be a particular problem for those blocks where the lessees themselves collectively own the freehold. In those cases the freehold is owned by a management company in which each of the leaseholders is a shareholder. In such circumstances, if one of the flat owners defaults on his service charge payment, the management company will have to apply to the leasehold valuation tribunal for a determination as to whether the service charge is properly due. The management company may want to employ expert witnesses and, perhaps, lawyers to advise it. The LVT will consider the case and make its judgment. The LVT has no power, however, to award costs and the costs that the management company expends in collecting properly due service charges will therefore be unrecoverable. As management companies have no independent resources on which to draw, this problem will present real practical difficulties for such companies looking to use the new procedures. One should bear in mind that, as enfranchisement really starts to bite, lessee-owned management companies will become much more common. It is important therefore that this difficulty is addressed now. I hope the Government will look at the issue to see whether a solution can be identified.

In conclusion, however, I should like to reiterate the welcome I have given to the action that has been taken to attack the mismanagement of leasehold property.

6.36 p.m.

Lord Dubs

My Lords, in approaching the Bill I judge it by four principles which I think are important to housing: first, everyone should have a home; secondly, everyone should have a decent home appropriate to their needs; thirdly, everyone should have some sense of security about living in their home; and, fourthly, the home should be flexible and people should have an ability to move from their home, especially when family circumstances change.

By any standards we still have a serious housing situation in parts of this country, especially in inner cities. I am always appalled when walking along Tottenham Court Road in the early evening or along the Strand to see how many people are sleeping in doorways. It is deeply depressing that in a country as rich as this one we should see so many of our fellow citizens homeless and living in such desperate circumstances. Noble Lords have said that it is inescapable that there is a desperate shortage of affordable housing in this country. There is also quite a lot of inappropriate housing—that is to say, people who are badly or unsuitably housed; for example, parents with young children living in tower blocks.

I remember years ago an active campaign in Wandsworth proclaiming that families with children should not live above the fourth floor of tower blocks, a very sensible policy to my mind but one which has been frustrated by a lack of housing. People have not had an opportunity to move. I looked at the Bill to see what it would do to help the many homeowners facing repossession or those who have negative equity. I see no solution for them.

I wish to mention a few of the specific areas where the Bill will not really help; I wish also to spend some time discussing the position of leaseholders. I am concerned about the changes in housing benefit which mean that it is now being paid in arrears and the fact there can be mandatory grounds for possession when people are in rent arrears for a period of two months. Those two facts together may well mean that people face eviction simply because, for administrative or bureaucratic reasons, housing benefit is paid longer in arrears than it should be. We all know of many instances when housing benefit is bound to be paid in arrears; for example, when there has been a change in the circumstances and the local authority has to go through its processes. It should not take so long, but we know that it does. The thought that people may be faced with eviction through no fault of their own is, to me, pretty intolerable.

Noble Lords have referred to the difficulty facing young people who may have been in the care of the local authority, who want to move to a measure of independence and who will have, as I understand it, no priority in the allocation of housing. Yet these are the very vulnerable people who need the stability to be derived from having a home in which they can build their future. I am also concerned that private lettings will be short, short-hold tenancies, which give only six months' security to the tenant unless the landlord offers a different and better tenancy. It seems to me undesirable that a large proportion of our population should live in conditions of housing insecurity with no sense that from one six months to another they will be able to stay in the area and in their home. That is undesirable.

I have viewed with increasing alarm the consultation paper produced by the Department of the Environment in association with the Housing Bill as regards the allocation of housing by local authorities. I believe that there is a parallel document from the Welsh Office, but I am referring to the DoE document. Paragraph 29 speaks about, the underlying social characteristics of households whom the Government believes warrant preference for settled accommodation over other households living in similar conditions". Two sentences later, the report states, Consideration should also be given to the needs of those who have delayed starting a family because of the inadequacies of their accommodation". There is a point there. I do not for the life of me see how a local authority can possibly discover that people have delayed starting a family because of the inadequacies of their accommodation. How on earth is the local authority supposed to establish that? It baffles me. It may be that the Minister has some answer.

I turn to the question of leaseholds and those leaseholders who bought their properties from the local authority and are now facing difficulties. Lest there be any misunderstanding about it, I welcome the right to buy. But it is not only people who have exercised that right who are now suffering as a result of being leaseholders of a local authority. I draw most of my experience and knowledge from Wandsworth Council.

That local authority has claimed for a long time that it has sold more council houses and flats than any other local authority.

Earlier in the debate a noble Lord referred to a "perceived sense of unfairness". In my experience the greatest sense of unfairness was felt by people in Wandsworth who were either homeless or badly housed and in desperate need of better accommodation from the council because they could afford no other but who saw their prospects of rehousing being delayed almost indefinitely by the action of that local authority in selling off a large number of its flats to persons not on the waiting list and who perhaps were not even living in the area. The knowledge that people from outside were being given priority, when people in housing need were given no chance, caused bitter resentment against the policies being carried out in Wandsworth, encouraged by the Government.

What happened to people who bought properties in Wandsworth? I refer partly to those who, under the proper right-to-buy provisions, bought their own homes. I regard that as a proper purchase as opposed to the other, which I regard as an undesirable policy. Council tenants were under a lot of pressure to exercise their right to buy because council rents were becoming as high as, and in some instances higher than, the mortgage repayments. So there was an incentive to buy for that reason as well as the fact that people wanted to have their own homes.

Since then, without warning and quite unexpectedly, people have been faced with ever-higher management charges and, in some instances, very high and unexpected additional charges which they simply cannot afford to pay. Perhaps I may give an example. I spoke to a man who was very happy to have bought his flat. Shortly after doing so, he was faced with a large bill because the lifts in the block had to be replaced. I forget whether it was going to cost £1,500 or £1,000 per flat. The man said that he had had no warning at all that the lifts were defective. That must have been known to the council at the time; yet he was faced with a bill which he could not afford to pay.

Another difficulty for which I see no solution in the Bill occurs where some flats in a block are bought and the tenants become leaseholders. They are then faced with their share of a very large repair bill. They cannot afford it because it is beyond their means. That means that the council will not carry out the improvements for the whole block, thereby also penalising the council tenants. The result is that nothing happens at all. It seems to me that in the rush to persuade council tenants to buy the property in which they are living, no one gave them proper warning of some of the consequences.

The last consequence is that of negative equity with which home owners are faced. Some building societies have "red-lined" areas with the result that it is now impossible to sell the properties even if negative equity has not begun to operate.

I turn now to the question of private leaseholders, dealt with in Part III of the Bill. That has been a longstanding problem. The Government have tried to deal with it but, as my noble friend Lord Williams said, they have not managed to do so thus far and it does not look as though the Bill will succeed in that respect either. Unlike the noble Lord, Lord Gisborough, I regard leasehold flats as a flawed method of tenure. I do not believe that it is satisfactory. It does not respect the needs and rights of people living in flats who have bought the leasehold. Their rights are not respected in relation to those of the freeholder. There have been many examples of it which have given rise to legislation.

In an ideal situation we would have not leasehold but commonhold, which is something the Conservative Party committed itself to in its last election manifesto, as did the Labour Party. I see no sign that that election promise is being met by the Government. Again, I judge the Bill by its failure to meet those criteria. We need a much fairer and simpler method of valuation. We do not have it at the moment. If time was not against me, I could digress into the argument about marriage values. We want a simple method of valuation which is fair to the leaseholder as well as to the freeholder. We do not have it and I believe we are not going to get it.

Furthermore, we have a very complicated system at the moment. It is so complicated that many leaseholders who want to buy their freeholds are unable to do so because of the bureaucratic and administrative problems. There cannot be much doubt about that proposition given the very small number of leaseholders who have succeeded in buying the freehold. There have been a number of Answers to Parliamentary Questions. They reveal that the number is tiny. Clearly, that is an indication that, despite the magnitude of the problem, a solution has not been found through legislation which the Government have brought forward so far. Nor, I suggest, is it provided by the Bill. There are also many complaints of abuse by landlords, of unreasonable service charges or repair costs, which the system has not allowed the leaseholder to remedy.

The last point on what I call the "ideal situation" is that there should be a right to manage for leaseholders. They are the people who are living in the flats. Surely, they are the ones who, above all, should have a say in the management of their homes and in the general common parts of the blocks in which they live. I contend that commonhold would be a better method of tenure. As I think we all understand what is meant by "commonhold", I shall not go into that matter now.

We have a number of difficulties. Perhaps I may give one example which is not actually to the detriment of Wandsworth Council, although it relates to Wandsworth. It is the story of a widow who cannot afford her service charge because of poverty. Wandsworth Council would help her but is not able to do so because, as the lease is worded, it cannot provide the finance which would enable the widow to meet the charges and the freeholder has been unwilling to change the terms of the lease to allow the council to make the payment. That is just one of many absurd and unfair situations. Perhaps I may give one other example—

Baroness Gardner of Parkes

My Lords, I am grateful to the noble Lord for giving way. Some time ago I took up an exact example of that—of someone being unable to afford a service charge—with my noble friend on the Front Bench. It related to someone living in Hammersmith. The answer I received through my noble friend's department was that if paying the service charge was an obligation under the lease, the council would be able to help through housing benefit. If it was not an obligation, why would one pay it?

Lord Dubs

My Lords, time is against my going into details. I can assure the noble Baroness that I was told that the widow had a need, that the council wanted to help, but that the landlord refused to change the lease to make that possible. Perhaps we can deal further with that point in Committee.

Having looked at what happened in the other place, I regret the fact that a number of amendments made in Committee were removed by the Government on Report. Perhaps I may refer to them briefly. I regret that the Government reinstated the low-rent test. I regret that the 50-year qualifying period was reinstated. I am sure that noble Lords have also received a letter from a person in NI who says that, having a lease of less than 50 years, his ground rent has been increased from typically between £200 and £300 per annum to between £4,500 and £5,500 per annum without any statutory protection. That is a swingeing increase and, I should have thought, a good argument against the 50-year qualifying period. I have already said that establishing a right to manage is the proper way forward. I regret that that was knocked out of the Bill in the other place on Report.

Finally, I very much regret that Clauses 165 and 166, which deal with people from abroad and asylum seekers, contain further provisions which are detrimental to justice for those people. My question for the Minister is: why do we need to have such provisions in this Bill when we already have them in another Bill that is going through this House? What is the purpose of that? Is a different principle being established? In which case, why bother about the Asylum and Immigration Bill? If they are identical, what is the need? Perhaps the Minister will be able to give the House some satisfaction on that point. I should like him to say that Clauses 165 and 166 are unnecessary.

6.53 p.m.

Lord Selsdon

My Lords, I am afraid that I have to declare some interests today, although they are already recorded. They will make me seem a little incestuous. I am a director of a large public construction company which builds houses. I am also on the international board of a large building materials company, and with another international group which makes washing machines and baths. To a large extent, all of their futures depend on an active housing market. However, there is worse to come, because I am a tenant of one of the great estates in London—I am very happy with the situation in which I find myself—and I am the manager of another property belonging to a great estate in London.

In fact, I am the manager by accident because when I had a flat there I undertook to take on the responsibility for management. That is a burden.

However, I should like to step back and to ask your Lordships to ignore all of those incestuous interests. I want to go both backwards and forwards. I want to take up the suggestion of the noble Baroness, Lady Fisher, who made a robust intervention and comes from that great area of Birmingham which has done so well in mixing conservatism and socialism and the public and private sectors over three generations.

I go back to the time when houses were important in politics. They have always been important to people. There can be no more plaintive cry than, "I am homeless and I am jobless. I am told that I cannot have a home unless I have a job and that I cannot have a job unless I have a home". At the other end of the scale there are families in which a widow or a widower has saved for years and is living in his or her own home but has to say, "I hope that I do not live much longer because I cannot afford to stay in this home and, if I sell it, I shall have nowhere to go".

If I remember correctly, Harold Macmillan said, "Elect us and we will build 300,000 houses a year. We will find homes for the heroes of the war". In those days there was no planning permission. Old railway wagons were brought into use, as were hand-crafted huts and prefabricated buildings. The south coast was, to some extent, ruined as restrictions were lifted. Today we find a fairly similar situation.

The housing market has changed. If we look backwards, we see that people thought that the state should provide houses. If we look forwards, we feel that the state should not provide houses. The noble Lord, Lord Williams, tried to accuse my noble friend of being a horse—I think that that is what he said; I cannot remember exactly, but I remember the difference—

Baroness Hollis of Heigham

My Lords, my noble friend said that the Bill was a pantomime horse.

Lord Selsdon

My Lords, a horse gets up forwards. A cow gets up backwards. A horse kicks backwards and a cow kicks sideways, as those of us who were brought up milking cows before that was done using electricity know full well. If we are horses, I suggest that noble Lords opposite may well be deemed to be cows.

However, it is not the duty of government to build houses. That is the duty of the house builders. The problem lies in whether we can build affordable homes today. What are the macro-economic and social factors which have brought about the changes that concern us today? On the social front, I think that it is rather sad that the original house of two up, two down, for a married couple with two children has had to go. Such houses are not easy to split into four flats. If we analyse the total housing stock—the total stock of homes—in this country on a square footage basis, we see that there is adequate square footage to accommodate everybody adequately. However, that breakdown in size has caused a problem. The existing housing stock is not suitable for the existing people. We now have single-parent families and households that comprise ones and twos.

The problem was that it was not possible to build at affordable levels. Why? The economic factors can be summed up in one word: inflation. Those of us who go back to the 1950s will recall that a five-bedroomed house here in Westminster cost £10,000 and a house in the country with 20 acres and a river cost £10,000. That is true because that is exactly what my mother bought when she sold a house and came to London and became the first woman to be Lord Mayor of Westminster. In those days it was an excellent council—

Baroness Hollis of Heigham

Say that again!

Lord Selsdon

My Lords, I said that in those days it was an excellent council. The noble Baroness has now put me off my stroke, which is most unfair.

My point about inflation is that it destroys people's ability to buy houses. Over a period of time this Government have changed attitudes so substantially because they have destroyed inflation. Unfortunately, many people regret that that has happened—even those with savings. People who have savings in a building society feel that their savings have been eroded because they cannot equate interest rates to the reduction of growth in the cost of living. That has had an impact on some people's attitudes to housing. Previously, people used to buy houses because they thought that they were a good investment and because they provided security. As the noble Lord, Lord Dubs, said, people need a home. We are a home-owning democracy. We are home owners by wish. It is part of our political beliefs. We like to have a home—perhaps more than any other country in the world and that is because we have had a stable society for generations and because the fear of losing a home because of war or government disruption no longer exists.

However, the removal of inflation causes problems. It means that people can no longer feel sure that if they buy a home and borrow to buy it they will do themselves good in the long term. In a very short space of time, interest rates which were effectively half or quarter the rate of inflation rose to double the rate of inflation. Even today, someone who borrows on a mortgage may well find that interest rates are three times the rate of inflation. Therefore, the main factor that increases the value of a home—and therefore the sense of security—is market demand. A house is no longer a fixed asset that rises in value in an inflationary environment. There will always be an element of inflation, and in general property will be a good investment provided that one lives in it.

As to the longer term effect, if inflation remains low we may see a switch to the rented sector. In many countries of the world people who retire put their pensions into owning property which they rent out to provide them with a reliable income. The tenant has no fear because he knows that if he wishes to leave that property there will be another one on the market at the same price, and the market makes the price. I believe that in this country the transition will take a long time, and for the foreseeable future we must accept that people of all political persuasions will demand to own their own homes.

Are we able to build affordable homes? I pick up the point raised by the noble Lord, Lord Northbourne. If there is so much fraud in the field of housing benefit claims I calculate that that is more than enough to satisfy the right reverend Prelate the Bishop of Oxford in terms of building new houses. If one looks at affordable or cheap homes and accommodation for students or nurses who work in hospitals, the cost of a unit, small though it may be, may come down to £12,000 or less. One of the problems is the availability of land and planning permission and the cost of land.

I cannot suggest what relaxations should take place, but unless there is movement in the housing market affordable homes will not be developed. With stability, there will probably be movement in the housing market. We know from the number of "For sale" signs outside houses that there is plenty of demand to sell. We also know that mortgages are cheaper than they have been for 30 years. In relative terms it is cheaper to buy a house today than it was 20 years ago. It is possible to start the market moving, and it is the market force which creates greater demand.

I am concerned that over a long period successive governments have tinkered with the situation. The schedules to the Bill indicate numerous attempts to try to improve or alter the position. Basically, there are those who provide money for people who wish to own homes: the building societies and the banks. One basic fact—in respect of which the period of 50 years appears to be so significant—is that in general banks or other lenders are reluctant to lend to people who wish to buy property unless there is a lease of at least 50 years. I do not believe that that commercial attitude will be changed easily. It is difficult to borrow money on short leases.

An additional element is the knowledge that there is a freeholder and a tenant, and there are good tenants and freeholders as well as bad tenants and freeholders. Sometimes, in the middle one inserts a strange creature who holds the head lease. If he is bad he can cause problems for both the freeholder and the tenant. I believe that this Bill goes a long way to provide added protection and security and to reduce costs. But we are not considering any moral factors; we are talking about money. As the Bill goes through Committee stage it may be that, as in the case of the leasehold reform Act, different factions will table amendments based upon a feeling that they may lose or gain. It is easier to do these things now than it was before because the chances of gain are not so great. In a more stable, non-inflationary society it is easier to determine values and these factors are not quite as great.

It is to Part III of the Bill that I shall address myself at Committee stage. Although it contains a number of mistakes, I believe that it goes quite a long way. I hope that noble Lords opposite will not try to disrupt what I believe to be an excellent attempt to get things moving forwards. I regret that there is such a concept as leasehold, but I do not believe that it is easy to change it. To me, it means that a person has his own door that leads on to the front street. As soon as one has a block of flats there are common areas for which people are responsible. To get a lot of people together to try to manage a single block, when they have never managed anything of this kind before, is extremely difficult. This is a matter that has caused me great concern from time to time. It is difficult to satisfy everybody all of the time. I believe that, if possible, the relationship between the freeholder and tenant should be a direct one without intermediate lessors. But for a period of time there must be an organisation or structure that looks after common parts, in blocks of flats, for example. I have been supportive of the concept of commonhold. I believe that the great estates also support it. The discussion paper in 1990 went a long way. I do not believe that there is as big a difference between the political parties on that concept as may appear. We are concerned purely with its definition. If tenants, landlords and governments can give some impetus to the concept, particularly in relation to multi-occupied buildings or flats, it may go a long way. I hope that the amendments that are tabled will not be onerous and disruptive, because in my view the Government have done an excellent job. I wish them and their horse well.

7.6 p.m.

Lord Berkeley

My Lords, my noble friend Lord Williams of Elvel said that this was the second half of a large amount of housing legislation which contained 300 clauses. Without wishing to turn this House into a zoo, I prefer the metaphor of the curate's camel—not a large one—which bites and kicks. (I believe that it kicks sideways.) This measure has good and bad parts. I am concerned if this is to follow Part II of the Housing Grants, Construction and Regeneration Bill. That Bill began with virtually unanimous support from the industry, which it was designed to help. When it left this House it had attracted a great deal of condemnation. I understand from colleagues in another place that there is a good deal of pressure to withdraw that part completely. I wonder whether parts of this Bill will suffer the same fate. I have received a large number of comments about Part I. A great deal of concern has been voiced by organisations which have to deal with the problems on the ground.

I wish to cover two aspects very quickly: first, the effect on the construction industry; and, secondly, the selling off of affordable rented accommodation. Does the Bill help the building and construction industry? The Government tell us many times in the Bill and elsewhere that it will encourage new building and greater refurbishment. The answer from the industry is that it will not do that and it just introduces more red tape. The ADC and AMA believe that it will not create a single additional home. I view that with great concern. They say that if there will not be more, or even the same, public finance, extra homes will be created only if there is significant private investment. We have to ask ourselves whether that will happen.

If the transfer of local authority housing to local housing companies or associations does not go ahead unless tenants support it, there will be no more houses. There appears to be little likelihood that tenants will support it in urban areas. If one looks at the estates in the worst condition, it is unlikely that they will be refurbished without pump-priming investment. Will that happen, given the current government squeeze on finance? To the extent that private resources are brought into investment in local authority stock, the Government are likely to make compensating reductions in the public provision of local authority investment, which will lead to a net decrease in investment. I hope that the Minister will be able to provide some comfort that that reduction will not occur.

I turn now to the sale of affordable housing. I pose the simple question: why is it necessary for any provision to be made for people to purchase affordable housing? I am not talking about the purchase of leases, which is a separate subject. Is it just a question of their status and the property-owning propaganda that we have had for, I suppose, 20 or 30 years since the war? Affordable housing should be just that—for those who cannot afford to buy. I am sure that the proposal is not made in response to the pressure for windfall profits—that those providing affordable houses would like to sell them and receive them more profit from what was originally government finance. If anyone living in affordable housing wishes to own a property, they should move and buy on the open market. That would leave the affordable housing available to those who need it, helping to keep a balanced community, as the right reverend Prelate the Bishop of Oxford suggested.

As the noble Baroness, Lady Hamwee, said, the CMA, the CPRE, and the William Sutton Trust have all expressed concern about the loss of affordable housing in rural areas. That is a serious concern. I am sure there is equal anxiety in urban areas. Why are the Government hooked on the notion of a property-owning democracy? It is a property-owning-negative-equity democracy at the moment. We have heard all the propaganda that owning is good and renting is bad. There seems to be status in owning. I declare an interest: I own a small property in which I live. It is true that after the war renting was bad. There were serious housing problems, but that was 50 years ago.

As the noble Lord, Lord Selsdon, said in an eloquent and moving speech, no such status is involved in owning property on the Continent. Many prosperous properties are rented at market rates. There is no evidence that the overall quality of housing is any better or worse in the UK. There is obviously good and bad. Renting is a viable option.

I do not believe that the Government have made any case for the sale of affordable housing. In the interest of shortening some of the time that the House may spend in Committee, there is merit in deleting much of Chapter II, Part I, Clauses 16 and 17. Instead, the vast government propaganda machine should do a U-turn and start promoting the attractions of flexibility, mobility, and the lack of negative equity that renting will provide. It should be advocating renting at a market price for the market end of the spectrum and affordable rents at the bottom end of the spectrum. That is a suggestion which we should look at in Committee. It will probably save us, as I said, many hours of Committee time.

7.12 p.m.

Baroness Hollis of Heigham

My Lords, overall, this is a bad Bill. It was a Bill demanded originally by Tory authorities wanting to stop homeless people enforcing their rights to housing through the courts. They were given aid and encouragement by the then Minister, Sir George Young, whose constituency included Heathrow Airport. Since then, the Minister has moved on, and most Tory authorities have been voted out of office. But, like the Bourbons, the Government never learn and never forget. So the Bill remains with us.

We welcome the Minister to the debates on the Bill. He will have a particular enthusiasm for it as, wearing his DSS hat, he will find that it will add some £120 million to the cost of housing benefit. However, if he accepts our amendments, we can help him make savings on those sections of the Bill. Without those amendments, the Bill will remain a bad, miserable, cynical, predatory Bill. It has however one saving grace: its timing. Coming at the fag end of a tired government, it will be ameliorated by regulation, I believe, and then repealed, I hope, before it has had time to do much damage.

What does the Bill seek to do? My noble friend Lord Williams has already outlined our objections to Part I and to the automatic RTB of housing association property where it is difficult to replace such housing, as the right reverend Prelate and the noble Lord, Lord Gisborough, said, or where social housing was part of a Section 106 planning agreement. When talking about HMOs, my noble friend made it clear that, although we welcome registration as a move in the right direction, nonetheless it is inadequate as it stands as probably half of all HMOs will be excluded. We need a mandatory scheme.

On Part III, my noble friend Lord Dubs talked about leasehold reform. He emphasised that we seek to give leaseholders greater rights and to give greater protection to those tenants threatened with eviction, since, as he said, tenants can be evicted if they fall eight weeks behind with their rent. Yet housing benefit is paid four weeks in arrears, and about a third of all local authorities currently fail to pay housing benefit on time. Those tenants may well be evicted through no fault of their own.

Part V relates to anti-social behaviour. Like the Government, we find it unacceptable wherever it occurs. Therefore, any remedies should apply also to owner occupation and to the private rented sector.

I turn now to Parts VI and VII. As my noble friend Lord Stallard said, they are the most offensive parts of the Bill. They remove the right to permanent housing from homeless families who are homeless through no fault of their own. While they queue, they will be parked in a sequence of six-month temporary tenancies, each time uprooting the family and children from home and school. In the process, I suspect, that will turn a homeless family into a problem family, and vulnerable children into damaged children.

Those parts of the Bill turn the clock back almost 20 years, because, back in 1974–75, nearly 3,000 children were taken into care, simply and solely because their parents were homeless. We said, "Never again". The Act introduced by Stephen Ross (later Lord Ross) in 1977, which was passed with the help of the then Labour Government, imposed upon local authorities the duty to house those homeless families who were both vulnerable and not intentionally homeless. That Act offered a safety net to some of the most fragile people in our society. That Act was reviewed by Mr. Heseltine in the early 1980s; it was consolidated by the Conservative Government in 1985; it was reviewed again by Chris Patten and Nicholas Ridley in 1989; and each time it was found to be working satisfactorily.

As Chris Patten said then: The present terms of the Act strike a reasonable balance between the interest of the genuinely homeless and others in housing need". That was in 1989, but perhaps things have changed since then. No, only a couple of months ago, the DoE published research reviewing its 1991 code of guidance on homelessness. It concluded that local authority homelessness procedures had become "better and fairer". That research came out only a few months ago. Homelessness procedures are now better and fairer. So why the Bill? Why do we have it?

Is there any evidence of abuse? No. As the DoE said in 1989: Despite anecdotes to the contrary, there is little or no evidence of abuse". Local authorities investigate thoroughly. If people have made themselves deliberately homeless, they have no claim to permanent housing, and they do not receive it. Local authorities are tough-minded. In my experience it is difficult to abuse the system.

Do homeless families take up too many council houses? Do they, as the Minister said in his opening remarks, "dominate" allocations? No, the evidence is to the contrary. Outside London only a quarter of all allocations, and inside London about 40 per cent. of allocations—not just new property—go to homeless families. That has not changed much over the past half dozen years. The rest of those allocations go to families on the waiting lists or, perfectly properly, to families with medical and social needs.

Are homeless families perhaps being housed too quickly compared with other families? Homeless families, like those who live in badly sub-standard housing which is grossly overcrowded or who have severe medical needs indeed take priority over those whose main claim is length of time in the queue. As so many noble Lords have said, homeless people are simply at the most urgent end of the spectrum of housing need.

In any event, three-quarters of the families who are homeless are already on the waiting list. They are not a different sort of people. As the 1989 Department of the Environment study said: in many local authorities, those who are homeless are simply people on the waiting list with nowhere to wait". Their housing conditions have broken down and they cannot continue where they are. Why is that? We know why. They may find their homes repossessed—1,000 houses are being repossessed every week in this country. They may find that their dwellings are intolerably over-crowded, particularly with the arrival of another child. They may be victims of domestic violence. They may find themselves evicted from the private sector because they are in rent arrears and they are in rent arrears because in 40 per cent. of all cases, housing benefit does not cover the cost of their rent. Or, as the noble Lord, Lord Northbourne, said, family breakdown leads to insecure accommodation and insecure accommodation leads to family breakdown.

In my experience, homeless families usually receive only one offer of accommodation. Those who wait on the list usually have two or three offers. The homeless have to go where they are put which is often to the roughest and toughest of estates. They will have lost their right to choose where they live and may be unable to live near the husband's workplace, the child's school or the elderly, sick relative for whom they are caring. You pay a high price if you are homeless. It is not an easy route into permanent housing, the mythology notwithstanding.

Is it that local authorities are complaining that the legislation is too generous and that they cannot make it work? On the contrary, when the Government consulted on this legislation five years ago, 85 per cent. of local authorities were satisfied with it and just 15 per cent. were dissatisfied. That 15 per cent. were dissatisfied because the legislation was not sufficiently generous. It is worth reminding ourselves that it is those local authorities—not us, not central government, not the Minister and not the department—which are at the sharp end of housing need and which have to manage it.

When this Bill went out for consultation, 10,000 organisations replied. They were virtually all hostile to its proposals. The Government were told by a then Tory authority that it was: ill conceived and if adopted would cause unnecessary trauma to many families and individuals in genuine housing crisis". When talking about the Government's proposals to push homeless families into the private rented sector, with six-month tenancies, that same then Tory authority said: problems will occur with families finding shorthold tenancies in the private sector which last for only six months, following which they may approach the local authority again as they may be homeless for a second time, only to have to repeat the process of temporary accommodation with the council followed by another shorthold tenancy. No account seems to have been taken of the effects upon family life of this constant disruption, particularly upon children involved". That Tory authority was Suffolk Coastal, the constituency of the Secretary of State for Environment, John Selwyn Gummer.

If the nature of homelessness has not really changed, and all the research, as the Minister knows, shows that it has not changed, why do we have this Bill? I believe that it is because homeless families are being asked to pay the price of the Government's failed policy. What was that housing policy? As far as possible it was to get rid of council housing; to encourage owner-occupation; and to strengthen the private rented sector. As my noble friend Lord Berkeley said, selling over one-quarter of council housing without replacing it while slashing the building programme from 100,000 council houses per year to under 1,000 council houses a year guarantees a housing crisis, a crisis of rationing.

Last year, 28,000 people were accepted as homeless in London. The London boroughs were allowed to build just 22 houses for them. That is not even enough to house the rough sleepers under Waterloo Bridge. Homeless families are being forced to compete with the waiting lists because there is not enough to go round. That is because the Government have ensured that there is not enough to go round. That should not surprise us. It is no different from blaming those on invalidity benefit for their sickness or blaming those who are unemployed for being jobless and therefore making more harsh the jobseeker's allowance. When in doubt blame the victim. We have seen it in policy after policy during the past two years. I believe that the Minister said that they are not going to change that. I believe it, but we shall change the Government.

In addition, the Government have pressed those who could not afford it into owner-occupation. With negative equity, those people were unable to trade down. Because of the housing slump, they were unable to sell and, with the removal of income support, they were unable to pay their mortgage. Finally, the Government encouraged private renting by deregulating rents and saying that housing benefit would take the strain. It did not and those pressed into private renting found themselves evicted.

Therefore, to the homeless, the casualties of life, are added the refugees from owner-occupation and from private renting. Those are the casualties of the Government's housing policy. They all arrive at the doorsteps of local authorities at the very same time as the ability of local authorities to house anyone has been reduced severely. That is why we have this Bill.

Lady Porter tried to ship the homeless out of the marginal wards in Westminster. With this Bill the Government are trying to ship the homeless out of council houses altogether. Local authorities are supposed to privatise the homeless. But because, fortunately, local authorities cannot be trusted to behave like Lady Porter, the Government are going to do the job for them by determining the nature of the waiting list and the principle of allocation from them: who may go on the waiting list; who may be housed from it; and at what speed. But just in case local authorities should cheat and house, ahead of others whose need is less urgent, a desperately homeless family with vulnerable children, the Government, having failed to abolish council housing, will appropriate its management. As my noble friend Lady Fisher said, the Minister responsible for housing, having presided over a catastrophic national housing policy, is now going to make himself the chairman of every housing committee in the land.

We need a housing Bill; but not this one. We need a housing Bill to tackle the problems caused by the 1,000 repossessions a week, the 1 million families in negative equity and the 255,000 families in serious mortgage arrears. We need a housing Bill to help leaseholders trapped in property which they cannot sell. We need a housing Bill to tackle disrepair in the private rented sector, because 1.25 million privately rented houses are now unfit. We need a housing Bill to bring back into use the 800,000 empty properties, mostly in the private sector. We need a housing Bill to prevent homelessness, especially of young people coming out of care and on to the streets. We need a housing Bill to end the poverty trap and dependency brought about by present housing regulations. But, above all, we need a housing Bill to build decent quality, affordable social rented housing for those who need it. This Bill could have done those things but it has not and it will not. In winding up, perhaps the Minister will tell us why.

Lord Selsdon

My Lords, before the noble Baroness sits down, perhaps I may say that every piece of evidence that has been given to me shows that it is more economic for the private sector to build and rent homes than it is for the public sector. If I am wrong, I shall apologise but it is a question of cost not of will. We all want to achieve the same thing.

Baroness Hollis of Heigham

My Lords, I am most grateful for the noble Lord's question. As the Minister will know, one of the differences between the two sectors is that private-sector housing rents are running substantially higher than local authority rents. Every homeless person going into a privately rented house will cost taxpayers an extra £20 in housing benefit. As a result of that policy, there will be a net addition of about £120 million to the DSS, although possibly some modest savings to the Department of the Environment. Therefore, the policy is self-defeating.

7.30 p.m.

Lord Lucas

My Lords, as the right reverend Prelate the Bishop of Oxford said to me this morning as I lay in bed, one of the strengths of the Church of England—

Noble Lords

Where?

Lord Lucas

He was appearing on television speaking in a different context. He said that one of the strengths of the Church of England—

Lord Williams of Elvel

What was the context?

Lord Lucas

I believe that the right reverend Prelate was talking about gay priests. He said that one of the strengths of the Church of England is that it encourages a vigorous, robust, debate. Indeed, he has participated in that today, as have many other noble Lords. I was particularly pleased that the noble Lord, Lord Monkswell, put down his name to speak. We all benefited from his experience during our debates on the previous housing Bill. He told us that he had worked as an electrician in this House. I wondered whether I should blame him for the fire in Cholmondeley's chop house or for the fact that when there was a fire over there the fire alarm sounded over here. I am glad that that is not the position.

The noble Lord took the opportunity to ask me a silly question to which I am delighted to be able to give a sensible answer. There are particular circumstances in the Isles of Scilly which may require a special consideration. We are considering whether to use the provision in Clause 197 in relation to the homelessness local connection provision.

The speech I enjoyed most was that of the noble Baroness, Lady Fisher of Rednal. She asked, "Where are the old Conservatives we used to have?". Of course, they are here. One could give the same answer to the question, "Where is the old Labour Party which we used to have?"—

Lord Graham of Edmonton

Over there!

Lord Lucas

My Lords, the noble Baroness made a speech which took me back 20 or 30 years to the pleasure I used to derive from listening to members of the Labour Party in full flow. Her unrestricted advocacy of socialism was a pleasure to hear and a great contrast to members of her Front Bench who today are subjected to such an authoritarian grip that not a whisper of policy is allowed to pass their lips. The great rapier of the noble Lord, Lord Williams, is blunted and the Thespian talents of the noble Baroness, Lady Hollis, are reduced to mime. Sitting opposite, it is a shame not to be able to enjoy them in the way that we used—

Lord Williams of Elvel

My Lords, that is enough small bedtime remarks about my rapier because I really do resent it.

Lord Lucas

My Lords, the noble Lord, Lord Williams, concerned himself with a pantomime horse. We finally gathered which end he was talking about because he was clearly holding a knife ready to geld or circumcise it. We shall do our best to avoid that eventuality.

The right reverend Prelate the Bishop of Oxford suggested that the Environment Select Committee said that there was a need for 100,000 new social lettings a year and that the Government are providing only 60,000. The Government's view is that the best estimate of the number of social lettings required each year is a range from 60,000 to 100,000. We are providing at the lower end of that range to allow for continuing growth in private rented housing and home ownership. That should be welcomed by my noble friend Lord Selsdon, not surprisingly. We could do with a much more varied, flexible and strong private rented sector. I believe that that would please the noble Lord, Lord Berkeley, even though it may not be welcomed by his Front Bench.

I now turn to the Bill. Part I covers the management of social rented housing. The Government are committed to the continued provision of social rented housing but such housing does not have to be publicly owned. The noble Lord, Lord Williams, agreed on the importance of this part of the Bill. He sounded as though he had a number of improvements to suggest. Given the record of the improvements that he suggested to the first housing Bill, I look forward to his amendments. In particular, he suggested that the Housing Corporation should be more accountable. I shall be delighted to read his amendments relating to that.

As regards purchase grant, we want the rights of housing association tenants brought closer to those enjoyed by secure tenants of local authorities. We want to make sure that sales do not result in a permanent reduction of social rented housing. Net receipts must be used to provide replacement properties to help those in greater need.

As regards charities, the scheme is compatible with the objectives of charitable housing associations. The new right applies only to housing built with public assistance. Any homes built with only charitable funding will not fall within the statutory scheme. Associations which decide to take part in the voluntary scheme may also decline to sell properties originally built with charitable funds.

The noble Baroness, Lady Hamwee, and others discussed the issue of part-funded properties, such as refurbishments of old schemes which would not be exempt. Yes, that is the way we want things to go. We want to see more opportunities for people in the private social rented sector to buy their properties.

The discount is funded by a grant and therefore the housing association receives the full market value of any home sold. Replacement properties built using sale proceeds can be used to give a home to others in need, helping to meet associations' charitable objectives.

The noble Baroness, Lady Hamwee, my noble friend Lord Swinfen and other noble Lords asked whether the right to acquire should apply to properties bought with private donations through, for instance, the free provision of land. We believe that that is adequately covered by the fact that if such properties are sold the housing association will receive the full market value of any home, the discount being covered by the grant. Therefore, the benefit of the donation feeds through to the replacement property which the housing association will be obliged to buy—

Lord Monkswell

My Lords, perhaps I may question the Minister's figures. He said that having sold the property for, say, £50,000 the housing association will be required to purchase or build another property. We still have some inflation and therefore it will cost more to build an exact replacement. On the other hand, if one uses the money to fund the replacement the replacement will inevitably be smaller. Therefore, we will in time see the size of houses reducing as the amount of money available to build them decreases as a result of current inflation rates. Can the Minister say whether that will be the case?

Lord Lucas

My Lords, I do not believe that that will affect a housing association with a large turnover of properties at a time of low inflation.

Lord Gisborough

My Lords, if houses are to be built in sensitive areas such as villages where will the land come from? There is no way in which a landowner, having supplied cheap land and seen the houses sold off at full price, will produce any more cheap land.

Lord Lucas

My Lords, I shall come to the question of villages.

Lord Swinfen

My Lords, before my noble friend does so—I am sorry to intervene at this stage—he gave me the impression that I was talking about charitable donations towards housing associations. I was not. I was talking about private financing which is borrowing private money, probably on a mortgage. I was referring to that aspect when a property or one of a block was sold. My noble friend may not be able to answer at this stage; he may wish to write to me.

Lord Lucas

My Lords, I believe that I shall cover that point later. As regards properties in rural areas, we recognise at the outset that there will be specific issues to address in rural areas. We have responded to those who pressed us on the need to safeguard villages where buying for building replacement properties can be difficult. The exemption for settlements with a population of 3,000 or under is clear and workable and built on a well-established threshold figure used for our rural housing programmes. I understand that the right reverend Prelate would like to see a higher figure.

We have issued a consultation paper which is available in the Printed Paper Office. We have already given detailed proposals for 30 areas of England. Those are available for scrutiny by Members of this House.

I believe that inner cities were a particular concern of the right reverend Prelate. The issue in inner cities concerns existing developments which fall within the voluntary scheme and so are not part of the Bill. But we have been involved in discussions with associations. We have accommodated their concerns about the difficulty of finding suitable replacements for properties sold on some of their long-established London estates. The voluntary scheme now also allows associations discretion to exclude properties built in the past using private charitable donations.

The right reverend Prelate mentioned in particular Notting Hill. It is an area in which I lived with enormous pleasure for 20 years. Indeed, the mixed community of Notting Hill is a vital part of that area. If a housing association has to sell a property in such an area it will do so at the full market price so far as it is concerned. It will therefore have the money to buy an exactly equivalent property in that area. Therefore, the area should not suffer in the way which concerned the right reverend Prelate.

The noble Lord, Lord Williams of Elvel, was worried that the right to acquire was not flexible enough to meet the needs of the elderly and that shared ownership might be more suitable. Elderly people can already apply for existing shared ownership development and the Housing Corporation funds a number of schemes directed specifically at the elderly. The noble Lord was also concerned whether the Housing Corporation would issue a code of practice on how the powers of the Bill would operate in practice in the event of insolvency and whether the code would be available during the Committee stage. We have discussed with the Housing Corporation the possibility of issuing a code of practice to be used in such event. There are complex issues which require much thought and discussion with the lenders. I am afraid that I cannot give the noble Lord the comfort that he requires.

Lord Williams of Elvel

My Lords, I am most grateful to the noble Lord for not giving me the comfort that I require. Can he say whether a code of practice in draft will be available before the Bill leaves this House.

Lord Lucas

My Lords, I shall write to the noble Lord on that subject.

My noble friend Lord Swinfen raised the question of community alarms and asked that social landlords and local authorities should be able to charge private owners on estates for the cost of providing community alarm systems. I can assure my noble friend that we are aware of the desire to extend the coverage for community alarm services. The issues involved are complex, but we are in touch with interested bodies such as the Association of District Councils. If we can find some practical proposals, we shall bring them forward.

I turn to Part II of the Bill. I believe that we find ourselves in broad agreement with the parties opposite as to the objective we seek to achieve—a substantial improvement in the quality of houses in multiple occupation. However, we find ourselves at a divergence on how to achieve it. I think we can do no more than await the Committee stage to see how that is resolved. We believe that our approach is the best and most flexible. It is clear that the noble Lord, Lord Williams, in particular disagrees.

As regards the question raised by the noble Lord, Lord Stallard, the Bill proposes new mandatory duties on local authorities to make sure that larger houses in multiple occupation have adequate fire precautions and means of escape. Those provisions are in Clause 73.

Many noble Lords addressed Part III of the Bill. I look forward to an active and contentious Committee stage with contributions from the noble Lord, Lord Dubs, the noble Earl, Lord Lytton, and my noble friends Lord Gisborough and Lord Selsdon among others. It is clear that we shall have the benefit of much good advice on the details of this section. I do not wish to waste the time of the House now in going into the nooks and crannies of the Bill. However, perhaps I may reply to a couple of questions raised by my noble friend Lady Gardner of Parkes. First, the new rights of management and service charges apply even where there is an intermediate lease between the freeholder and leaseholder. Secondly, the leasehold is the only workable form of tenure for flats available under existing English law. The noble Lord, Lord Dubs, was concerned with the question of whether we would bring in commonhold. My noble and learned friend the Lord Chancellor hopes to publish a draft Bill on commonhold this year. I am delighted at the prospect that it will have the support of the party opposite.

I turn to assured shorthold tenancies. One is aware that the noble Lord, Lord Williams, has major concerns in this area. However, I believe that we shall address them satisfactorily in Committee. In response to questions asked by the noble Lord, Lord Dubs, 70 per cent. of private sector tenancies are already shorthold. Landlords can still grant full assured tenancies—that is non-shorthold—if they wish. If this House were to insist on full security, the simple reaction of the market would be that properties were no longer available for letting.

My noble friend Lady Gardner of Parkes asked whether there were problems with extending a shorthold tenancy. Nothing in the Bill prevents a landlord offering a shorthold tenant a new term of any length he wants at the end of, or during, a shorthold tenancy.

The noble Lord, Lord Dubs, was concerned about our proposals on evictions in cases of rent arrears. The change we propose is modest, taking a month off the time it will take for the case to reach court. The tenant will still have three or four months before he is in danger of losing his home. We believe that this is adequate time to ensure that housing benefit claimants are not put at risk. It would be as well if the party opposite were to look at the other side of the equation sometimes and realise that many small landlords, often with mortgages, are dependent on getting the rent on time.

My noble friend Lady Gardner of Parkes told us at some length about the New South Wales rent deposit scheme. I look forward to covering that issue in Committee.

Part V of the Bill received a general welcome. The noble Baroness, Lady Hollis, said that she would like to see the provision extended beyond local authorities into the private rented sector. This part of the Bill concerns itself with local authorities in their role as landlords and the responsibilities which they have towards their tenants whom we feel have less choice about where they live. Remedies exist under other legislation such as the Environmental Protection Act which can be used for the protection of owner occupiers.

My noble friend Lord Swinfen was concerned about the application of Part V to vulnerable tenants, those who may find themselves at the wrong end of bogus complaints and those tenants vulnerable by reason of having some mental illness whose behaviour is not necessarily anti-social but may be different. Local authorities have long experience of dealing with such problems sensibly. We expect them to continue to give that support to all those who need it. But we shall be issuing guidance to local authorities to emphasise the need for care and sensitivity in the use of these powers.

The noble Baroness, Lady Hamwee, was concerned that introductory tenants would be particularly vulnerable to summary eviction. An introductory tenant who receives notice of the forthcoming repossession will be given reasons why the authority is taking that action and will have 14 days in which to appeal to the local authority. This is a sensible safeguard and will give the tenant an opportunity to make his case if there has been any misunderstanding. Eviction is always a matter of last resort. A local authority would far rather score a success with putting a tenant back on the straight and narrow than have to repossess his home and I see no reason why this should change.

The noble Baroness described introductory tenancies as a two-tier system of treatment for local authority tenants. We feel that introductory tenancies are not discriminatory. Introductory tenants will have virtually the same rights as secure tenants. We feel that well-behaved and law abiding tenants will have nothing to fear from the system.

Turning to Parts VI and VII, the noble Baroness, Lady Hollis, said that the Bill would add £120 million to the housing benefit cost of homelessness. That is not true. The noble Baroness is repeating a crude calculation by Shelter which ignores one side of the equation where savings may accrue. We expect the measure to be cost-neutral. Our proposals in Parts VI and VII of the Bill allow the establishment of a single route into permanent social housing. They aim to introduce greater fairness into the allocation of long-term tenancies in local authority and housing association homes while retaining a safety net for families and vulnerable people who become homeless unintentionally. They set out the broad framework within which housing should be allocated. Within that framework, local authorities will be responsible for devising their own schemes in order to reflect local conditions.

There is a fundamental political difference between the noble Baroness, Lady Hollis, and myself on this question. Our feeling is that homelessness as such should not be on the list of reasons for giving people permanent accommodation. Some people—perhaps most people—who are homeless will need permanent accommodation, and they will still get it under the terms of the Bill. Those who do not need permanent accommodation will not get it. We feel that that is right, and I was glad to be supported by my noble friend Lord Jenkin of Roding.

We are committed to ensuring that anyone accepted for rehousing under the homelessness legislation is provided with suitable accommodation for at least two years. In most areas anyone with genuine long-term housing needs should be offered suitable permanent accommodation in substantially less than that period. A household rehoused under the homelessness legislation would generally attract priority status by being in insecure or temporary accommodation or having a particular need for settled accommodation, in some cases as a result of social or economic circumstances that make securing settled accommodation difficult. I refer to the language of Clause 148(2).

The noble Lord, Lord Dubs, raised the question of those who wait until they are in suitable accommodation before they have children. I am sure we all know people who act responsibly in that fashion. The expression in our consultation paper is one that local authorities should take as an aspiration, not as a directive. In that context, it is not unreasonable to ask them to listen.

To turn to some particular questions, the noble Baroness, Lady Hamwee, the noble Lord, Lord Stallard, and the noble Lord, Lord Northbourne, were particularly concerned about young single people entitled to assistance under homelessness legislation. We are not changing existing priority-need criteria. Those already envisage that vulnerable young people are in priority need. We shall issue fresh statutory guidance, taking account of the interaction with Children Act provisions. Under the Children Act many young persons leaving care will be classed as vulnerable. I am sorry that the noble Lord, Lord Northbourne, is not in his place. I was delighted by his extensive arguments which seemed to me to amount to a case for the privatisation of children's homes. That is not on our programme, but perhaps the party opposite may care to take it up.

We agree that there is need for better co-ordination between housing and social services departments. The present homelessness code of guidance to local authorities was written before the Children Act took effect and we shall revise it before the implementation of the Bill.

My noble friend Lord Jenkin of Roding asked whether the homelessness provisions in the Bill would strengthen the family. The provisions of Clause 170 should make it more difficult for family break-up to be encouraged by the availability of social rented accommodation. The noble Baroness, Lady Hollis, referred to the research review. Yes, that review was about how applications were handled. We intend to keep the Bill on that structure.

Turning now to the discharge of duty towards homeless households, I must emphasise that we shall continue to give effective help to the homeless generally, with the exception of some persons from abroad who enter this country on condition that they do not receive public assistance. The same sort of people will receive help under this legislation in the same circumstances as they receive help now. The duty to help them will run for a minimum of two years. That will provide a period of stability within which the household can sort itself out.

The noble Lord, Lord Stallard, was concerned that elderly people should not be subject to the limit of two years. The sort of case the noble Lord refers to would attract priority under the allocation scheme criteria in Clause 148. I believe the cases discussed under the heading of St. Basil's by the noble Baroness, Lady Fisher of Rednal, would also qualify for that.

Many, but not all, of those owed a duty will be looking for permanent social housing and in most cases they will get it within two years through the housing register. Others will find different solutions. Recent research shows that 18 per cent. of those accepted for rehousing under the present homelessness legislation drop out of the system before they are offered long-term rehousing. Others may be able to find accommodation for themselves with assistance from the local authority.

The right reverend Prelate the Bishop of Oxford and the noble Lord, Lord Stallard, were concerned that rehousing of homeless people in the private rented sector would mean their moving every six months. We calculate that the average length of stay in assured shorthold tenancies is over two years. No landlord wishes to swap tenants every six months just for the sake of it. If he has good tenants, a landlord will keep them, and be happy to keep them.

The noble Lord, Lord Northbourne, said that bed and breakfast was bad for homeless families. We wholly agree. The homeless code of guidance states that bed and breakfast should be used only as a last resort. It is now usually used only for short periods in contrast to its much greater use a few years ago. We are committed to keeping its use to a minimum.

The noble Baroness, Lady Hollis, asked whether the homeless take up all the stock. Indeed, in some London boroughs over 80 per cent. of family housing goes to homeless acceptances.

I am conscious that there are many questions that have been asked that I have not answered. I shall look through Hansard and do my best, if necessary, to write a satisfactory answer to them.

This is a Bill we should welcome. It is about opportunity and choice. It gives the opportunity to buy their homes to more housing association tenants in addition to the 34,000 social tenants who last year exercised their right to buy. It gives leasehold home owners stronger and more accessible powers to deal with poor management and intimidation by landlords. The Bill protects homeless families. Local authorities will have a duty to house them for a minimum of two years if they are unintentionally homeless. At the same time, the Bill ensures that those who get a long term council or housing association home are those who need it most. It ensures that council estates can be renewed through private investment alongside public investment in local housing companies. It gives landlords effective powers against nuisance neighbours. It gives local authorities strong powers to improve the quality of multi-occupied housing.

I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.