INITIAL DEMOLITION NOTICES

HL Deb 16 September 2004 vol 664 cc1429-70

Initial demolition notices

1 (1) For the purposes of this Schedule an "initial demolition notice" is a notice served on a secure tenant—

1. (a) stating that the landlord intends to demolish the dwelling-house or (as the case may be) the building containing it ("the relevant premises"),
2. (b) setting out the reasons why the landlord intends to demolish the relevant premises,
3. (c) specifying the period within which he intends to demolish those premises,
4. (d) stating that, while the notice remains in force, he will not be under any obligation to make such a grant as is mentioned in section 138(1) in respect of any claim made by the tenant to exercise the right to buy in respect of the dwelling-house.

(2) An initial demolition notice must also state—

1. (a) that the notice does not prevent—
1. (i) the making by the tenant of any such claim, or
2. (ii) the taking of steps under this Part in connection with any such claim up to the point where section 138(1) would otherwise operate in relation to the claim, or
3. (iii) the operation of that provision in most circumstances where the notice ceases to be in force, but
2. (b) that, if the landlord subsequently serves a final demolition notice in respect of the dwelling-house, the right to buy will not arise in respect of it while that notice is in force and any existing claim will cease to be effective.

(3) If, at the time when an initial demolition notice is served, there is an existing claim to exercise the right to buy in respect of the dwelling-house, the notice shall—

1. (a) state that section 138C confers a right to compensation in respect of certain expenditure, and
2. (b) give details of that right to compensation and of how it may be exercised.

(4) The period specified in accordance with sub-paragraph (1)(c) must not—

1. (a) allow the landlord more than what is, in the circumstances, a reasonable period to carry out the proposed demolition of the relevant premises (whether on their own or as part of a scheme involving the demolition of other premises); or
2. (b) in any case expire more than five years after the date of service of the notice on the tenant.

Period of validity of initial demolition notice

2 (1) For the purposes of this Schedule an initial demolition notice—

1. (a) comes into force in respect of the dwelling-house concerned on the date of service of the notice on the tenant, and
2. (b) ceases to be so in force at the end of the period specified in accordance with paragraph 1(1)(c),

but this is subject to compliance with the conditions mentioned in sub-paragraph (2) (in a case to which they apply) and to paragraph 3.

(2) The conditions in sub-paragraphs (6) and (7) of paragraph 13 of Schedule 5 (publicity for final demolition notices) shall apply in relation to an initial demolition notice as they apply in relation to a final demolition notice.

(3) The notice mentioned in paragraph 13(7) (as it applies in accordance with sub-paragraph (2) above) must contain the following information—

1. (a) sufficient information to enable identification of the premises that the landlord intends to demolish,
2. (b) the reasons why the landlord intends to demolish those premises,
3. (c) the period within which the landlord intends to demolish those premises,
4. (d) the date when any initial demolition notice or notices relating to those premises will cease to be in force, unless revoked or otherwise terminated under or by virtue of paragraph 3 below,
5. (e) that, during the period of validity of any such notice or notices, the landlord will not be under any obligation to make such a grant as is mentioned in section 138(1) in respect of any claim to exercise the right to buy in respect of any dwelling-house contained in those premises,
6. (f) that there may be a right to compensation under section 138C in respect of certain expenditure incurred in respect of any existing claim.

Revocation or termination of initial demolition notices

3 (1) Paragraph 14(4) to (7) of Schedule 5 (revocation notices) shall apply in relation to an initial demolition notice as they apply in relation to a final demolition notice.

(2) If a compulsory purchase order has been made for the purpose of enabling the landlord to demolish the dwelling-house in respect of which he has served an initial demolition notice (whether or not it would enable him to demolish any other premises as well) and—

1. (a) a relevant decision within sub-paragraph (3)(a) becomes effective while the notice is in force, or
2. (b) a relevant decision within sub-paragraph (3)(b) becomes final while the notice is in force,

the notice ceases to be in force as from the date when the decision becomes effective or final.

(3) A "relevant decision" is—

1. (a) a decision under Part 2 of the Acquisition of Land Act 1981 to confirm the order with modifications, or not to confirm the whole or part of the order, or
2. (b) a decision of the High Court to quash the whole or part of the order under section 24 of that Act,

where the effect of the decision is that the landlord will not be able, by virtue of that order, to carry out the demolition of the dwelling-house.

(4) A relevant decision within sub-paragraph (3)(a) becomes effective—

1. (a) at the end of the period of 16 weeks beginning with the date of the decision, if no application for judicial review is made in respect of the decision within that period, or
2. (b) if such an application is so made, at the time when—
1. (i) a decision on the application which upholds the relevant decision becomes final, or
2. (ii) the application is abandoned or otherwise ceases to have effect.

(5) A relevant decision within sub-paragraph (3)(b), or a decision within sub-paragraph (4)(b), becomes final—

1. (a) if not appealed against, at the end of the period for bringing an appeal, or
2. (b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

(6) An appeal is disposed of—

1. (a) if it is determined and the period for bringing any further appeal has ended, or
2. (b) if it is abandoned or otherwise ceases to have effect.

(7) Where an initial demolition notice ceases to be in force under sub-paragraph (2), the landlord must, as soon as is reasonably practicable, serve a notice on the tenant which informs him—

1. (a) that the notice has ceased to be in force as from the date in question, and
2. (b) of the reason why it has ceased to be in force.

(8) If, while an initial demolition notice is in force in respect of a dwelling-house, a final demolition notice comes into force under paragraph 13 of Schedule 5 in respect of that dwelling-house, the initial demolition notice ceases to be in force as from the date when the final demolition order comes into force.

(9) In such a case the final demolition notice must state that it is replacing the initial demolition notice.

Restriction on serving further demolition notices

4 (1) This paragraph applies where an initial demolition notice ("the relevant notice") has (for any reason) ceased to be in force in respect of a dwelling-house without it being demolished.

(2) No further initial demolition notice may be served in respect of the dwelling-house during the period of 5 years following the time when the relevant notice ceases to be in force, unless—

1. (a) it is served with the consent of the Secretary of State, and
2. (b) it states that it is so served.

(3) Subject to sub-paragraph (4), no final demolition notice may be served in respect of the dwelling-house during the period of 5 years following the time when the relevant notice ceases to be in force, unless—

1. (a) it is served with the consent of the Secretary of State, and
2. (b) it states that it is so served.

(4) Sub-paragraph (3) does not apply to a final demolition notice which is served at a time when an initial demolition notice served in accordance with sub-paragraph (2) is in force.

(5) The Secretary of State's consent under sub-paragraph (2) or (3) may be given subject to compliance with such conditions as he may specify.

Service of notices

5 Paragraph 15 of Schedule 13 (service of notices) applies in relation to notices under this Schedule as it applies in relation to notices under paragraph 13 or 14 of that Schedule.

Interpretation

6 (1) In this Schedule any reference to the landlord, in the context of a reference to the demolition or intended demolition of any premises, includes a reference to a superior landlord.

(2) In this Schedule— final demolition notice" means a final demolition notice served under paragraph 13 of Schedule 5; premises" means premises of any description; scheme" includes arrangements of any description."

Before Schedule 8, insert the following new schedule—

"PROVISIONS RELATING TO TENANCY DEPOSIT SCHEMES

Schemes to be custodial schemes or insurance schemes

1 (1) A tenancy deposit scheme must be either—

1. (a) a custodial scheme, or
2. (b) an insurance scheme.

(2) A "custodial scheme" is a scheme under which—

1. (a) tenancy deposits in connection with shorthold tenancies are paid to the landlords under the tenancies,
2. (b) amounts representing the deposits are then paid by the landlords into a designated account held by the scheme administrator, and
3. (c) those amounts are kept by the scheme administrator in that account until such time as, in accordance with the scheme, they fall to be paid (wholly or in part) to the landlords or tenants under the tenancies.

(3) An "insurance scheme" is a scheme under which—

1. (a) tenancy deposits in connection with shorthold tenancies are paid to the landlords under the tenancies,
2. (b) such deposits are retained by the landlords—
1. (i) on the basis that, at the end of the tenancies, such amounts in respect of the deposits as are agreed between the tenants and the landlords will be repaid to the tenants, and
2. (ii) subject to the landlords undertaking that, if (in the absence of any such repayments being made to tenants) amounts in respect of the deposits are paid to the tenants by the scheme administrator, the landlords will reimburse those amounts to the scheme administrator in accordance with directions given by it, and
3. (c) insurance is maintained by the scheme administrator in respect of failures by landlords to comply with such directions.

Provisions applying to custodial and insurance schemes

2 (1) A custodial scheme must conform with the following provisions— paragraphs 3 and 4, and paragraphs 7 and 8.

(2) An insurance scheme must conform with the following provisions— paragraphs 5 and 6, and paragraphs 7 and 8.

Custodial schemes: general

3 (1) This paragraph applies to a custodial scheme.

(2) The scheme must provide for any landlord who receives a tenancy deposit in connection with a shorthold tenancy to pay an amount equal to the deposit into a designated account held by the scheme administrator.

(3) The designated account must not contain anything other than amounts paid into it as mentioned in sub-paragraph (2) and any interest accruing on such amounts.

(4) Subject to sub-paragraph (5), the scheme administrator may retain any interest accruing on such amounts.

(5) The relevant arrangements under section (Tenancy deposit schemes)(1) may provide for any amount paid in accordance with paragraph 4 to be paid with interest—

1. (a) in respect of the period during which the relevant amount has remained in the designated account, and
2. (b) at such rate as the appropriate national authority may specify by order.

(6) With the exception of any interest retained in accordance with sub-paragraph (4), nothing contained in the designated account may be used to fund the administration of the scheme.

(7) In this paragraph "the relevant amount", in relation to a tenancy deposit, means the amount paid into the designated account in respect of the deposit.

Custodial schemes: termination of tenancies

4 (1) A custodial scheme must make provision—

1. (a) for enabling the tenant and the landlord under a shorthold tenancy in connection with which a tenancy deposit is held in accordance with the scheme to apply, at any time after the tenancy has ended, for the whole or part of the relevant amount to be paid to him, and
2. (b) for such an application to be dealt with by the scheme administrator in accordance with the following provisions of this paragraph.

(2) Sub-paragraph (3) applies where the tenant and the landlord notify the scheme administrator that they have agreed that the relevant amount should be paid—

1. (a) wholly to one of them, or
2. (b) partly to the one and partly to the other.

(3) If, having received such a notification, the scheme administrator is satisfied that the tenant and the landlord have so agreed, the scheme administrator must arrange for the relevant amount to be paid, in accordance with the agreement, within the period of 10 days beginning with the date on which the notification is received by the scheme administrator.

(4) Sub-paragraph (5) applies where the tenant or the landlord notifies the scheme administrator—

1. (a) that a court has decided that the relevant amount is to be paid either wholly to one of them or partly to the one and partly to the other, and
2. (b) that decision has become final.

(5) If, having received such a notification, the scheme administrator is satisfied as to the matters mentioned in sub-paragraph (4)(a) and (b), the scheme administrator must arrange for the relevant amount to be paid, in accordance with the decision, within the period of 10 days beginning with the date on which the notification is received by the scheme administrator.

(6) For the purposes of this Schedule a decision becomes final—

1. (a) if not appealed against, at the end of the period for bringing an appeal, or
2. (b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

(7) An appeal is disposed of—

1. (a) if it is determined and the period for bringing any further appeal has ended, or
2. (b) if it is abandoned or otherwise ceases to have effect.

(8) In this paragraph "the relevant amount" has the meaning given by paragraph 3(7).

Insurance schemes: general

5 (1) This paragraph applies to an insurance scheme.

(2) The scheme must provide that any landlord by whom a tenancy deposit is retained under the scheme must give the scheme administrator an undertaking that, if at the end of the tenancy any amount in respect of the deposit is paid to the tenant by the scheme administrator in accordance with paragraph 6(5), the landlord will reimburse that amount to the scheme administrator in accordance with directions given by it.

(3) The scheme must require the scheme administrator to effect and maintain in force adequate insurance in respect of failures by landlords by whom tenancy deposits are retained under the scheme to comply with such directions as are mentioned in sub-paragraph (2).

(4) If the scheme provides for landlords participating in the scheme to be members of the scheme, the scheme may provide for a landlord's membership to be terminated by the scheme administrator in the event of any such failure on the part of the landlord.

(5) The scheme may provide for landlords participating in the scheme to pay to the scheme administrator—

1. (a) fees in respect of the administration of the scheme, and
2. (b) contributions in respect of the cost of the insurance referred to in sub-paragraph (3).

Insurance schemes: termination of tenancies

6 (1) An insurance scheme must make provision in accordance with this paragraph in relation to the respective obligations of the landlord and the scheme administrator where—

1. (a) a tenancy deposit has been retained by the landlord under the scheme, and
2. (b) the tenancy has ended.

(2) If the tenant and the landlord agree that the whole or part of the deposit should be repaid to the tenant, the landlord must repay the amount in question ("the agreed amount") to the tenant within the period of 10 days beginning with the date on which the agreement is made.

(3) Sub-paragraph (5) applies where the tenant notifies the scheme administrator that—

1. (a) there has been such an agreement as is mentioned in sub-paragraph (2), but
2. (b) the agreed amount has not been repaid within the period mentioned in that sub-paragraph.

(4) Sub-paragraph (5) also applies where the tenant notifies the scheme administrator that—

1. (a) there has been no such agreement as is mentioned in sub-paragraph (2), but
2. (b) a court has decided that the tenant is entitled to the whole or part of the deposit ("the due amount"), and
3. (c) that decision has become final (see paragraph 4(6) and (7)).

(5) If, having received such a notification as is mentioned in sub-paragraph (3) or (4), the scheme administrator is satisfied—

1. (a) as to the matters mentioned in sub-paragraph (3)(a) and (b), or
2. (b) as to the matters mentioned in sub-paragraph (4)(a) to (c),

the scheme administrator must pay to the tenant an amount equal to the agreed or due amount within the period of 10 days beginning with the date on which the notification is received by the scheme administrator.

(6) Where the scheme administrator pays any such amount to the tenant, he must direct the landlord to reimburse that amount to the scheme administrator within the period of 10 days beginning with the date on which the direction is received by the landlord.

(7) The landlord must comply with such a direction.

(8) The scheme must make provision for preventing double recovery by a tenant in respect of the whole or part of the deposit, and may in that connection make provision—

1. (a) for excluding or modifying any requirement imposed by the scheme in accordance with any of sub-paragraphs (5) to (7), and
2. (b) for requiring the repayment of amounts reimbursed.

(9) In sub-paragraph (8) "double recovery" means recovering both an amount from the scheme administrator and an amount from the landlord in pursuance of a court order made against him.

Notifications to tenants

7 (1) Every custodial scheme or insurance scheme must provide for the scheme administrator to respond as soon as is practicable to any request within sub-paragraph (2) made by the tenant under a shorthold tenancy.

(2) A request is within this sub-paragraph if it is a request by the tenant to receive confirmation that a deposit paid in connection with the tenancy is being held in accordance with the scheme.

Dispute resolution procedures

8 (1) Every custodial scheme or insurance scheme must provide for facilities to be available for enabling disputes relating to tenancy deposits subject to the scheme to be resolved without recourse to litigation.

(2) The scheme must not, however, make the use of such facilities compulsory in the event of such a dispute.

Power to amend

9 The appropriate national authority may by order make such amendments of this Schedule as it considers appropriate."

On Question, amendments agreed to.

Schedule 8 agreed to.

Clause 189 agreed to.

Clause 190 [Additional power to give grants for social housing]:

Lord Rooker moved Amendment No. 230C:

Page 144, line 37, leave out "companies that are not" and insert "persons other than"

The noble Lord said: In moving the amendment, I shall speak to the others in the group, which are almost identical except for one that leaves out lines 18 to 25 on page 146. As drafted, Clause 190 would allow the relevant authority to pay grants to companies other than registered social landlords for essentially the same housing purpose as for which they make grants to registered social landlords. For the purpose of the clause, "company" means a company registered under the Companies Act 1985 and ALMOs—that is, arm's-length management organisations.

This group of amendments would broaden the range of organisations eligible to receive grant. We have listened to arguments from the Opposition in the other place, and do not wish to exclude any potentially suitable providers. The amendments would mean that persons eligible to bid for grant would no longer be restricted to companies as defined under the Companies Act 1985 or arm's-length management organisations. The amendment would allow the Housing Corporation to pay grant to "persons", as defined in the Interpretation Act 1978. That would include a body of persons corporate or unincorporate.

The amendment would prevent situations from occurring where, for example, a joint venture between developers established as a company would qualify for grant, but a limited liability partnership joint venture between the same development partners would not. We still believe that a requirement for applicants to be registered companies would provide some additional assurances on their viability. However, the amendments will not mean that unsuitable persons will now be able to be allocated grant. I want to make that absolutely clear.

The Housing Corporation will be expected to make sure that only fit and proper persons receive funding. The reassurances that we want about the suitability of bodies can be sought in other ways—for example, as part of the corporation's "due diligence" work. These amendments would also bring the clause into line with general European Union policy, which seeks to avoid discrimination on the constitutional status and geographical basis of organisations.

The intention behind Amendments Nos. 230D and 231F appears to be to widen the range of bodies to which the Housing Corporation can pay grant. Frankly, the amendments that we have tabled are similar, taking into account the concerns raised in previous debates. However, the amendments of the noble Lord, Lord Best, would seek to place more restrictions on the definition of an eligible body than the Government are proposing. They would prevent government and governmental bodies, contracting authorities or individuals from applying. It is unlikely that many of the bodies excluded by these amendments would submit a bid. For example, the Public Services Contract Regulations include such bodies as national museums, tribunals and rent assessment panels.

However, the noble Lord, Lord Best, is right—I understand that this is a key concern and one we share—to be concerned that only suitable persons should receive the grant. But we think that that can be achieved without placing the restrictions on who is able to bid for the grant. I beg to move.

The Deputy Chairman of Committees

If I may make an apology to the noble Lord, Lord Best, I should have mentioned to the Committee that if Amendment No. 230C is agreed to I would not be able to call Amendment No. 230D, but of course he can speak to it now.

Lord Best

I am entirely satisfied with the amendment in the name of the Minister and I shall not move Amendment No. 230D and Amendment No. 231F which goes with it.

On Question, amendment agreed to.

[Amendment No. 230D not moved.]

Baroness Miller of Chilthorne Domer moved Amendment No. 231:

Page 145, line 18, at end insert— () The proportion of grants awarded to companies in rural areas shall be in proportion to the percentage of the population living in such areas.

The noble Baroness said: We talked at length earlier about the needs of rural areas, so I will not go back into those arguments that the noble Lord, Lord Bassam, replied to. This amendment seeks to make sure that the inevitable economies of scale that urban areas enjoy do not mean that an enormous proportion—disproportionate to the population—of the proposed grant goes only to urban and suburban areas, leaving rural areas to lose out, as they have done in the past.

I have had a projection from the Rural Housing Trust, which is the leading developer of small schemes of affordable housing in villages in England—that is, settlements of fewer than 1,500 people. The trust has been working with such villages since 1976. Since that time it has produced nearly 3,000 units of accommodation in 300 villages spread over 33 counties. It works at a small and appropriate scale for the size of village it works in, down to as few as two or three in an area such as Studland in Dorset, for example, where there is no such thing as affordable housing even for people earning probably £100,000 a year. If you are on a normal salary it would be hopeless. So three affordable houses in that area were really meaningful.

The trust's projection—which I want to bring to the attention of the Minister—is that over the next few years 8,000 small villages will need 50,000 new homes. That is in quite small settlements of under 1,500. I am very anxious that an innovative grant such as this is not going to make rural areas lose out. I beg to move.

Lord Hylton

I support the spirit of the amendment and do so as someone who, about 34 years ago founded a fairly small—now almost medium-sized—rural village housing association. Had that not been done, the village where most of the houses owned by the association stand, would almost certainly have been totally gentrified and passed beyond the means of the local inhabitants—the sons and daughters of local residents.

I might add that our last housing association scheme took five to seven years from start to completion due to shortage of funds, planning difficulties, other housing associations going bankrupt and numerous other problems. The Committee will realise that this is extremely uphill work. I recommend to the Government the point made by the amendment. I do not necessarily expect them to adopt it as it stands, but could we at least be told that the policy of the Housing Corporation will be in accordance with the sense of the amendment? That would be of great benefit.

Lord Rooker

I could almost say, "yes" to both speeches. We are completely at one regarding the intention of both the noble Baroness and the noble Lord. I make no bones about that. I do not wish even to be nit-picking about the amendment, but, as it is drafted, it could have a perverse effect if there was only one application in terms of percentages of bids—for example, if there was a poor bid that did not stack up. But that is not the thrust of the amendment. The thrust is so that the small settlements and rural hamlets do not lose out on what we hope is an innovative scheme for providing social housing in another direction.

I want to reassure the Committee that funding for affordable housing will be allocated in line with the priorities identified through the regional housing strategy process. But it must not be forgotten that part of that process is that regional housing boards must ensure that they have engaged with rural stakeholders and that the final product has been rural-proofed.

When I was Minister for Housing—Keith Hill now holds that post—we were visited by Alun Michael and his associates from Defra to ensure that our policies and their practical operation were rural-proofed. We already have a programme for small settlements below 3,000 involving the Housing Corporation; but I take on board what the noble Baroness said regarding the smaller ones. We would not want them to be missed out of this innovative scheme. Obviously, business cases will have to be put forward; but the main thrust is that this is not an urban policy, but a national housing policy.

A quarter of the population of the country lives in non-urban, rural areas—millions of people living in small hamlets, small villages and towns. We do not want them and their families driven out due to a lack of affordable housing. We are very keen to address that. We have stepped up the Housing Corporation programme only slightly, but we have stepped it up. We want to ensure that those areas also share in the new policy.

Baroness Miller of Chilthorne Domer

I thank the Minister warmly for his good reply, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Best moved Amendment No. 231A:

Page 145, line 21, at end insert ", to include measures to ensure—

1. (a) that tenants of homes built under subsection (2)(d) are afforded the same protection as tenants of registered social landlords in respect of—
1. (i) legal rights;
2. (ii) terms and conditions of occupancy;
3. (iii) rent levels;
4. (iv) bankruptcy of landlord or managing agent;
5. (v) recourse to the Independent Housing Ombudsman;
2. (b) that all recipients of grant under subsection (2) are subject to the same regulation in respect of—
1. (i) disposal of land or property which has been the subject of grant;
2. (ii) accountability for the use of grant;
3. (iii) requirements to repay or recycle grant."

The noble Lord said: I know that the hour is somewhat late, but with the surprise of having this sitting of the Committee on a Thursday and having cancelled engagements in Oxford and York to be here, I am afraid that I shall detain noble Lords for a short while on the amendment.

This is concerned with the intentions of Clause 190 to award to other bodies the social housing grant, and other grants which have hitherto been available to only registered social landlords—principally to private sector house builders. The issues here were not the subject of debate in the other place and I am glad, therefore, that this discussion accords with the views of the Minister that debates in this Chamber are most valuable when they pick up on new and original issues not previously debated. I remind your Members of the Committee of my earlier declaration of interest as chief executive of a registered social landlord, the Joseph Rowntree Housing Trust. I have been involved with the measures surrounding grants to housing associations and regulation of housing associations for well over 30 years.

6.15 p.m.

The object for the Government in taking the power to make grants to bodies that are not registered social landlords—in other words, not housing associations—is to increase competition, so that the amount of money available for social housing can be made to go further. Plans have already been announced for setting aside £200 million from next year's funds for housing associations, for which house builders and other developers will be able to compete.

If Clause 190 were to remain as it is in the Bill, my contention is that the medium to long-term consequences of this measure would be higher costs to the taxpayer, poorer outcomes for tenants and local communities, and consequently a deterioration in the public perceptions and acceptability of new housing for lower income households. I suspect that the only benefits would be very short-term, superficial savings, which all concerned would regret later on.

At present, when the Housing Corporation decides on the bodies to which it should award social housing grants, it has considerable choice. Today's housing associations compete fiercely with one another for the available grants and bids far exceed the resources available. Indeed, some have argued that this competition can be too intense, putting pressure on housing associations to cut corners. Certainly, the housing associations making bids invariably expect to operate at a loss for each new development for many years, because the rents they will receive will not match the outgoings in repaying loans and managing and maintaining the property.

However, the established housing associations can cover the losses by drawing on the surpluses they obtain from properties that they developed 10 or 20 years earlier, where rents will have risen while mortgage payments will have remained relatively constant, or indeed where mortgages have been fully repaid. My own housing association, for example, has debt-free properties built 50 and even 100 years ago.

Private sector house builders or developers would of course find it much more difficult to carry losses for several years, because they do not have a pool of older properties where rental income achieves surpluses. So why would house builders wish to move away from the building of homes for sale and embark upon provision of social housing for rent or even provision of shared ownership housing, which is partly for rent and partly for ownership? Very few have a cash flow that would make it easy for them to suffer deficits for several years, even if they are predicting long-term capital gains in the more distant future. Even fewer have any experience in providing rented homes for families on low incomes, with all the specialist skills that this implies.

However, there are circumstances in which direct provision of rented housing would suit the house builders. It is likely to be a condition of planning consent for all new developments that some social housing is provided. Of course, if social housing grants are available, normally there will be plenty of housing associations willing to take on the social rented provision so that house builders can perform their usual function of developing a site, selling and moving on to the next, without the ongoing commitments and hassles of owning any rented stock.

Partnerships between house builders and housing associations are now the order of the day and the two parties are learning how best to operate these partnerships successfully. The Joseph Rowntree Foundation has published a couple of reports on ways in which contractual relationships between house builders and housing associations can work to best effect. The great majority of house builders will much prefer to continue with current arrangements.

There are, however, occasions when house builders can find no housing association that wishes to work with them in taking on the rented element required by the planners. My housing association, the Joseph Rowntree Housing Trust, has turned down approaches from house builders because their plans have been unacceptable. Builders have wanted us to produce rented homes in a segregated part of their site, even with a separate access, in the worst position—for example, as a barrier between the owners and a noisy road or next to the gas works. We would refuse to be involved if we could not provide the rented homes "pepper-potted" across the site, avoiding the stigma of separate social housing, which can completely undermine the social purposes of a new development. With direct access to social housing grants, house builders might think that they could get away with practices that most housing associations would find deplorable. But I hope that the Housing Corporation would take a robust view and refuse to pay grant in any such cases.

The other circumstance in which house builders might feel that the only way they can satisfy the conditions for planning consent and draw the usual profits from the housing for sale is where the local authority is seeking a higher proportion of social housing than the housing associations feel they can achieve with the funds available. Although house builders want to keep the element of social housing— from which no profits are likely—to a minimum in order to get the whole development through the planning system, they may have to offer a higher proportion of affordable homes than the housing associations will attempt. What form would the efficiency gains take that would allow the profit-making house builders to produce more homes than the not-for-profit registered social landlords? Since the income that they will receive from rents will be the same, they will have to make the savings by reducing ongoing expenditure. They could do that if their costs for managing the property were lower than for housing associations, but exactly the reverse is likely, as they will have to engage private managing agents willing to take on social housing or, more likely, find housing associations willing to do the management for them. They will then have to add 17.5 per cent VAT—a tax which housing associations managing the homes themselves do not pay.

Nor are house builders likely to save money by borrowing at lower interest rates than housing associations. House builders cannot offer security on other properties in the way that housing associations, with a stock of older homes, can command. All the major housing associations borrow on highly competitive terms because the risks in lending to them are so low. So far, although housing associations have borrowed some £40 billion, lenders have never lost money.

The construction costs of an identical building are unlikely to be lower whether the homes are built for a housing association or a developer or house builder—unless, that is, the latter is prepared to accept lower standards, and that is where the problem lies. The Housing Corporation specifies scheme development standards, and assurances from the Minister make it clear that naturally the same standards, on paper, would apply to house builders seeking grants. But there is a wide variation in how the same product is produced—for example, in relation to the quality of all the components, from door handles to roofs.

As the Minister makes clear in the helpful notes that he has provided on the clause, building for rent requires a more robust construction than building for sale. Homes for rent will be fully occupied from day one, while the homes for sale will have spare rooms, and a new house purchaser is much more likely to have the resources and inclination to engage in constant DIY repair work than the tenant, and so the rented home must withstand greater wear and tear. Later costs will be borne by the landlord and not the occupier if component parts wear out. Over the life of a property, a cheaper initial article will cost more, but the Housing Corporation cannot be expected to measure accurately the life-cycle costs at the outset without fully inspecting all the properties on site being developed by private sector house builders in a way that is currently quite unnecessary.

Housing associations that have bought properties off the peg from house builders—properties that, of course, comply with the Housing Corporation scheme development standards—have discovered that they bring problems over the medium to longer term and they have discovered the true cost in higher maintenance costs. Important work on that issue, carried out for housing associations at the University of Dundee, has increased our understanding of the importance of the more robust construction of rented homes. Housing associations are in for the long haul and they know that they will regret it later if they try to make savings in the short term, just to secure grants in a competitive situation.

Moreover, I fear that those short-term savings—where the bid from the house builder is preferred over that of the registered social landlord—will be only the beginning of the problems caused by Clause 190. After the homes are built, and irrespective of higher maintenance costs that are likely to emerge, there is a range of other disadvantages in giving public money to unregulated profit-making companies.

The Minister has indicated that appropriate parts of the regulations currently applying to housing associations would be applied equally to other bodies that obtain grants. Those requirements would be enforced under the terms of the grant. In so far as that goes, the Minister's comments are very reassuring and very helpful, but in two respects I fear that the deal secured from the house builder, compared with that provided through the housing association, will be very inferior.

First, there are obligations on housing associations which it would seem impossible to require from unregulated providers. Secondly, in respect of those requirements which are imposed on house builders or other non-RSLs, it would seem virtually impossible for the regulator of the Housing Corporation to enforce compliance. Examples of the former relate to the roles that housing associations play beyond the simple management and maintenance of the homes that they own. They need to provide extra support to vulnerable tenants to tackle anti-social behaviour and to create extra communal and social facilities; they employ welfare rights and advice workers; they ensure tenant participation in decision making; and they often participate with other agencies in the support for renewal of a whole neighbourhood.

A house builder providing a few rented homes here and there cannot be expected to take on all these other functions. Although I entirely accept the assurances of the Minister that grants will be given to house builders only on condition that all the basic legal requirements for tenants are covered, that is only part of the story in terms of what society receives from supporting registered social landlords. The tenants of unregulated new landlords will not benefit from all the extra welfare and social input that they could expect from a housing association landlord.

The second half of those anxieties relates to the difficulties for the Housing Corporation in enforcing those conditions that are written into the original grant; for example, the corporation periodically requires housing associations to upgrade the standards of the homes that they built some years before. Currently, housing associations have to invest in properties so that they can reach new decent homes standards. In future properties will need to achieve a higher version of those standards.

Although the rents from any single scheme may not be sufficient to achieve surpluses to fund such upgrading, the housing associations can still pay for the improvements by pooling the surpluses from their older stock. How will the private developers and house builders feel about finding the funds later for such upgrading and what happens if they have not set aside sufficient to undertake even the predictable major repairs that are bound to become necessary? Without the regular regulatory inspections from the Audit Commission, to which housing associations are subject, how will the Housing Corporation keep tabs on what happens to the properties and their occupiers as the years go by?

Meanwhile, in the private sector there will undoubtedly be the usual mergers, takeovers and bankruptcies and the corporation will constantly need to be stepping in to ensure that the terms of the original grant continue to be enforced. That sounds like an expensive and, in some cases, doomed task which contrasts with the ongoing oversight of the regulated, registered social landlords.

My final, and in some respects my most severe criticism of the proposed measure, relates to the difficulties that will be encountered in capturing the equity appreciation in the grant-aided properties if and when they are sold in the years to come. I recall the Notting Hill Housing Trust buying and modernising homes in north Kensington in the 1970s for £25,000 per house. Those same houses are now worth 100 times that sum—over £2 million. All that increase in value is held within the not-for-profit social housing sector. If the Notting Hill Housing Trust sells a property, the proceeds will be re-used for the social purposes of the trust. It is not helpful simply to say that the original grant must be repaid. In my Notting Hill example, that grant might have represented £20,000, leaving over £2 million as equity appreciation that is, capital gains for the owner.

I realise that the Minister would like the terms of the original grant to ensure that the whole of the capital gains to the house builder can be recycled for social purposes, which is right, but it will be extraordinarily difficult to guarantee that outcome years from now. There is a real danger that the equity in subsidised property, which has made today's housing associations strong and financially secure and enabled them to undertake a range of important social functions, will not be captured where grants are paid to profit-making companies.

6.30 p.m.

Since I have been unable to say anything positive about the clause, except to express appreciation to the Minister for making it clear that some of the more extreme concerns about its implementation would be moderated by important conditions in the terms of grant aid, it might seem my purposes would be better served by arguing that the clause should not stand part of the Bill. That proposition, put forward by the noble Baroness, Lady Hanham, and the noble Lord, Lord Hanningfield, may be the safest option, but I recognise that there are some rare circumstances where grants can justifiably go to bodies that are not registered social landlords. Some charities might be keen to perform in a similar way to RSLs, and might not want to register with the Housing Corporation because they have only one or two small projects in mind and wish to avoid the full regulatory weight that registration would bring. There are the arm's-length management organisations the Minister mentioned, established by local authorities, which may seek social housing grants for new work. With these so-called ALMOs, the property remains in the ownership of the council, the organisations have a public service ethos and "good landlordism" can be expected, even though there is no registration with the Housing Corporation. There may be other worthy examples to accommodate such special circumstances, although I doubt there will be many.

The clause could be preserved with amendments that gave legal weight to the Government's intentions that a level playing field be created for non-registered social landlords, as for the registered social landlords. Amendment No. 231A seeks to enshrine in law a requirement that each of the key rights that apply to tenants in the homes of registered social landlords and the key elements of the regulation of social landlords are applied equally when non-RSLs provide the new subsidised homes. Even though I fear the enforcement of those measures will be difficult, they will provide a modicum of reassurance if grants for social housing are to be given to unregistered, unregulated private companies. I beg to move.

Baroness Hanham

I apologise for the fact that I did not hear everything the noble Lord, Lord Best, said. Like him, I had to go out and cancel an engagement.

We will not oppose the Question whether Clause 190 shall stand part of the Bill, because, from what I heard, the noble Lord, Lord Best, covered all the points that I would have made. I agree with what he said—this clause gives cause for extreme concern. We will listen to the Minister's answers to the noble Lord's amendments, but we will need to unpick this a bit more on Report.

Baroness Hamwee

The amendment also stands in the name of my noble friend, but I could not add anything.

Lord Rooker

I was not planning to reply to the Question that the clause stand part anyway, given what I am about to say. The noble Lord, Lord Best, has done a detailed demolition job on the clause, and I understand why. I will have to respond to him in kind, if only so that we can have a sensible debate. I do not mean that the debate is not sensible, but we need to have debates on Report in the knowledge of the Government's view of the points the noble Lord raised. Let me put it this way: a government who are legislating on housing and do not listen to the noble Lord, Lord Best, are asking for trouble.

Amendment No. 231A would put on the face of the Bill a requirement for the Housing Corporation to ensure that tenants of non-registered social landlords were given the same protection as tenants of registered social landlords (RSLs). The Government wish to ensure an equality of outcome for residents, tenants and prospective tenants of RSLs and non-RSLs. However, the amendment would unnecessarily restrict the Housing Corporation's flexibility to shape a competition and to amend conditions in the light of experience. It is also unnecessary—this is my fallback because it is the key area—given the order-making power that the Secretary of State will have to ensure that any key risk areas, such as the interests of prospective and actual tenants or occupiers, are addressed.

We would expect the Housing Corporation to ensure, through grant conditions, equivalent standards of management by non-registered social landlords to those provided by registered social landlords, subject to the regulatory code. That would include expectations about equality of opportunity, rent levels, consultation with tenants, maintenance, security of tenure and accepting nominations from local authorities.

In addition, the corporation is looking at ensuring, through grant conditions, that appropriate sections of the Charter for Housing Association Applicants and Residents will also apply to non-registered social landlords. Those are likely to include: written tenancy agreements, succession rights, information about rents and service charges, repair and maintenance services, and complaints handling, including referral to the Independent Housing Ombudsman.

Amendment No. 231A would also put in the Bill a requirement for the Housing Corporation to ensure that non-RSLs were subject to the same regulation in respect of disposal of property, use of grant and recycling of grant. We believe that that does not take into account some fundamental differences between RSLs and non-RSLs.

When an RSL sells a property, it is allowed to reinvest any surplus according to its own permissible purposes and must reinvest the grant for social housing within three years or refund it to the Housing Corporation. That works because the regulatory system controls the use of grant and surpluses, and because registered social landlords have specific social purposes. These statutory arrangements do not translate well to commercial profit-distributing organisations so we believe that the Housing Corporation will have to address in conditions how receipts should be reinvested or, more likely, how they should be refunded to the corporation for it to recycle.

We recognise that that is a crucial value-for-money issue. It is not our intention that funds will be unfairly lost for reinvestment in social housing. The Housing Corporation is looking at ways of ensuring that the benefit of the equity growth in property is retained by government or recycled for social housing purposes. The Government will in any case keep a watching brief over conditions applied to grants to non-RSLs. The clause already provides a safety net to ensure that, where we think that a specific condition needs to be prescribed or dealt with in a condition, the Secretary of State can, by means of an order, require that to happen.

I shall now address some of the noble Lord's questions. How would we ensure that public money is protected and any windfall from increased property prices is reinvested in social housing? I have explained the position that we recognise this as a crucial value-for-money issue. It is absolutely fundamental to registered social landlords and the housing association movement. We do not intend that funds will be unfairly lost for reinvestment in social housing. We are looking for ways to make that work.

The noble Lord, Lord Best, asked how private developers would be required to raise standards in the future. If long-term management is passed to a registered social landlord, it will be possible to apply new conditions to the normal regulatory processes. For non-registered social landlords, it will not be possible to impose new conditions, although that might be achieved through renegotiation with any non-registered social landlord provider or under a mechanism that provides compensation for such variation.

As the noble Lord said, there is an issue in that the corporation will struggle to enforce conditions. Obviously, this is a new field. Undoubtedly, enforcement would be simpler if the long-term management was transferred to a registered social landlord. The noble Lord, Lord Best, raised the issue of the extra 17.5 per cent floating around. I have not been briefed on that, but no doubt we will return to the issue. If that happened, it would be subject to regulation—that is, the transfer to an RSL. In other circumstances, if the Housing Corporation feels that the grant conditions have not been met or are not being fully complied with, it will ultimately be able to revert to the courts to enforce the conditions. Obviously, it is hoped that a satisfactory outcome could be achieved in almost all cases through discussion before such a sanction was deemed necessary.

On the conditions of grant, this begs the question in some ways—if everything negative about the clause that the noble Lord, Lord Best, referred to was true, you might ask who in their right mind would apply for the grant, bearing in mind the onerous conditions that will have to be met. I am not saying that that is a get-out and that we have arranged this in such a way that we do not want anyone to apply. That is simply not true. However, the conditions of grant drawn up by the Housing Corporation will be expected to replicate for non-RSLs the design, construction and management standards that currently apply to registered social landlords receiving approved development programme funding.

There is no intention that this measure—this clause—will reduce quality. I take that to mean the quality that RSLs—housing associations—work to now, for the very reasons that the noble Lord, Lord Best, raised. Building a home that is to be permanently rented for a tenant in the social sector has different requirements from those of owner-occupation. Generally, the space is used to capacity more and one has to consider the maintenance issues that the noble Lord raised. If we ignore that we are, as the noble Lord said, building up real problems for the future.

However, as a longstop, the Secretary of State is able to exercise control over the conditions of grant imposed by the Housing Corporation. The Secretary of State will have an order-making power to require the Housing Corporation to impose specific conditions and prescribe matters about which the Housing Corporation is to prepare and impose conditions, and any particular effects that such conditions are to achieve. This might be used to address key risk areas such as the interests of actual and potential tenants or occupiers and the public money or the asset that it has funded.

The noble Lord, Lord Best, raised the issue of value for money. There is a competition—the money has been top-sliced. The competition will be open to both registered social landlords and non-registered social landlords. Bodies will receive the grant only if they offer value for money. Any non-registered social landlord offering worse value for money than a registered social landlord will not receive any grant.

The intention of the clause is to see whether we can widen the pool of potential providers of social housing; drive efficiency and improve value for money; and encourage innovation and creativity in this sector, while creating a level playing field between registered social landlords and non-registered social landlords in terms of outcomes for tenants and prospective tenants.

It was not my intention to throw a bucket of whitewash over the issue of those who might apply for the grant. I wanted to give as robust, clear, firm and black and white an answer as possible to many of the issues raised by the noble Lord, Lord Best, so that there can be no misunderstanding of the clause's intention.

Between today, when we will finish the Committee stage, and when we come back on Report, one or two major conferences will take place. I do not mean the party political conferences, but one or two others which my right honourable friend the Deputy Prime Minister will address. I want it to be absolutely clear to his audiences that we have a robust line on this which fits very well with some of the issues that the noble Lord, Lord Best, has raised. Nevertheless, I suspect that we will come back to this on Report.

Lord Best

I am very grateful for those comments and for the Minister's obvious good intentions. We will indeed probably come back to this issue later. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Lord Rooker moved Amendments Nos. 231B to 231E:

Page 146, line 1, leave out "company" and insert "person"

Page 146, line 4, leave out "company" and insert "person"

Page 146, line 8, leave out "company" and insert "person"

Page 146, line 10, leave out "company" and insert "person"

On Question, amendments agreed to.

[Amendment No. 231F not moved.]

Lord Rooker moved Amendment No. 231G:

Page 146, leave out lines 18 to 25.

On Question, amendment agreed to.

Clause 190, as amended, agreed to.

Baroness Hanham moved Amendment No. 232:

After Clause 190, insert the following new clause—

"STANDARD FOR SOCIAL HOUSING

(1) The Secretary of State shall ensure that by 2016 all social housing shall as far as is reasonably practicable have insulation, heating and ventilation standards that are at least equivalent to those required in newly built homes by the building regulations for the time being in force.

(2) For the avoidance of doubt the standards referred to above shall include the following provisions, namely that—

1. (a) there must be a heating system that is economical and efficient and which is capable of heating the whole dwelling to a comfortable level in normal weather conditions at a cost that is affordable to the occupant; and
2. (b) any property to which this section applies must achieve a SAP rating of no lower than 65.

(3) In this section "social housing" means housing let by a registered social landlord or a local housing authority."

The noble Baroness said: I shall briefly explain the rationale of the amendment. Under the Warm Homes and Energy Conservation Act 2000, the Government have a duty to end fuel poverty. The mechanism for doing that in social housing is the decent homes standard. However, the Government have set the standard so low that it will not end fuel poverty. The Government will thus be in breach of the law, as well as failing to achieve the target set in the fuel poverty strategy.

It is clear that the decent homes standard for social housing has a very serious defect. The defect—the thermal insulation standard for social housing—is set too low and will fail to deliver on the legal obligation to end fuel poverty.

Upgrading insulation works are triggered on those houses that do not comply with the current standard. That sounds perfectly sound until we see that a large number of homes that do comply with the standard are still in fuel poverty.

A National Energy Action study of the Stockton Warm Zone indicated that 39 per cent of fuel-poor tenants live in properties which meet the energy efficiency standards contained in the decent homes standard. That represents an enormous number of social housing tenants who live in properties that comply with the decent homes standard and so do not qualify for upgrade works under the standard, which means that they will be left in fuel poverty.

What of homes that do not comply even with the current standard? The latest figures show that more than a million non-decent homes fail the current low standard on thermal insulation grounds. The current policy is to bring those homes up to the decent homes standard—a standard that will not, as I have explained, guarantee that they will be removed from fuel poverty.

Amendment No. 232 would therefore rectify the situation by requiring that the standards in social housing equate with those in the building regulations, as far as is reasonably practicable". The caveat is necessary because, for instance, it is not practicable to require a house with no cavity wall to have cavity wall insulation.

New Clause 3 requires that all social housing should be brought up to a Standard Assessment Procedure rating of 65. Support for that rating approach came from the ODPM Select Committee Report on the decent homes standard of 7 May.

The Government are under a legal duty to end fuel poverty under the Warm Homes and Energy Conservation Act 2000. If they adopt the current decent homes standard and upgrade social housing to a standard that does not comply with the law, the result will be that a further package of works will have to be undertaken on those homes at a later date. I beg to move.

Lord Rooker

The noble Baroness has been commendably brief. When I looked at my speaking notes on the amendment last night, they extended to 35 paragraphs—drafted for me by the excellent staff in my department who have supported me on the Bill. I pointed out to them that at the time of day that it would come up it might be a bit on the long side, so we have chopped it down a bit.

Amendment No. 232 would improve the insulation, heating and ventilation standards of existing social housing stock. While we support the general objectives of the amendment, we do not agree that it is the appropriate way to pursue the issue. The Government are fully committed to those objectives by ensuring that all social housing meets the decent homes standard. I do not quite remember the decent homes standard being in force before 1997. I do not think that there was a decent homes standard then. It is a standard that we have set for ourselves and we are happy to be measured by it, because millions of people are benefiting from it. We have set ourselves the goal of eradicating fuel poverty for all vulnerable households by 2010.

The Bill already contains measures—not all the measures necessary—relating to the energy efficiency of homes. Home information packs will include an energy efficiency assessment that will set out how energy efficient the property is and provide information on measures to improve it. There is no doubt about it; the energy efficiency of housing in this country will improve as a result of that.

The new housing health and safety rating system—I think that was in Part 1 of the Bill, which we considered a long time ago—will enable authorities to assess the health and safety impact of a range of hazards, including hazards from cold, damp and mould, and to take appropriate action. The best way of dealing with a hazard from cold is to make the dwelling more energy efficient. Not only will local authorities use the housing health and safety rating system as an enforcement tool but they will also be able to use it as a means of assessing risk and prioritising action where it is most needed in the social sector.

To be defined as decent, a home must meet the current statutory minimum standard for housing, be in a reasonable state of repair, have reasonably modern facilities and services and provide a reasonable degree of thermal comfort. There are hundreds of thousands of currently local authority homes that have had modern bathrooms and kitchens under the Decent Homes programme. Tenants almost literally have new houses—but this clause is about the thermal side and I shall stick to that.

To meet the thermal comfort criterion, a home must have efficient heating as well as effective insulation. By ensuring that homes are warm and dry and have reasonably modem facilities, we are delivering improved quality of life and reducing health inequalities, fuel poverty and child poverty. A typical social housing tenant living in a home with these measures will not be in fuel poverty. Those that are in fuel poverty after the installation of effective insulation and efficient heating—for instance, because their income is very low—will be in a better position than before, as they will have to spend less to heat their home.

However, we have to be realistic about that. We cannot accept the notion that heating systems should be capable of heating a dwelling to a level affordable to the occupant because affordability depends on an occupant's income. In instances of households with very low incomes, energy efficiency improvements alone will not be sufficient to allow a household to heat the home affordably. In such cases, income-related measures will be required. So while we are already committed to delivering effective heating, we cannot guarantee occupants' incomes and therefore this provision is not only unacceptable but is also unworkable. One can go so far with the property but at a certain point one has to deal with the income of the person living in it, which we do through the benefits and tax credit systems.

To sum up, the Government are committed to improving living conditions for the poorest members of our communities. We are improving the heating and insulation of at least 1.3 million homes in the social sector. A massive exercise has been taking place by freeing up and using the capital receipts that had been locked away for years under the previous Tory government. We fully accept the right to buy, but we then use the money from right to buy to build new social housing or to modernise the existing social housing.

We are providing winter fuel payments to most people aged 60 or over. Because we need to reach everybody, it goes to some people who do not need it. We fully accept that, but that way we reach the people who do need it. We are already committed to further amendments to Part L of the building regulations to increase further the energy efficiency of new dwellings and of existing ones when owners propose to carry out alterations and extension works, which we have debated in this House before. The proposed clause would impose a burden that we do not think is cost-effective and that is not practical in the way in which it is drafted. I fully accept that we need to raise these issues and I am not knocking the fact that the amendment was on the Order Paper.

Baroness Hanham

I am not going to try to disentangle the Minister's reply at this stage. I shall be happy to read it and to come back to it at Report, if necessary. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 232A:

After Clause 190, insert the following new clause—

"SUITABILITY OF ACCOMMODATION

In section 206 of the Housing Act 1996 (c. 52) (discharge of functions by local authorities), after subsection (2) insert—

"(3) Accommodation will not be deemed suitable unless the applicant has been allowed a reasonable opportunity of viewing the accommodation offered in potential discharge of housing functions.""

The noble Baroness said: This amendment is about the suitability of accommodation, with which we propose to deal by adding a provision to the 1996 Act. The purpose of the amendment is to reverse the effect of this year's decision of the Court of Appeal in the London Borough of Newham v Khatun and others. That decision was that an applicant for accommodation as homeless to whom a duty has been accepted under Part 7 of the 1996 Act can be required to accept accommodation offered in discharge of the duty—and this is the point—without being given the opportunity to view it.

By the council's scheme, which the Court of Appeal decision in effect franked, if the applicant refused to accept an offer, the council would regard its duty as discharged and cease to secure accommodation for an applicant. Applicants include pregnant women, families with infant children and the vulnerable.

The code of guidance issued in July 2002 by the Office of the Deputy Prime Minister implies that applicants should be allowed an opportunity to view, by advising that housing authorities, must allow applicants a reasonable period for considering offers of accommodation". It included in the assessment of what was reasonable, whether they are already familiar with the property in question".

The judge at first instance observed that the policy requires the applicant to enter into binding legal obligations in relation to a property sight unseen. In addition to that, the council is deprived of the applicants' views on the property, which the court rightly observed would be relevant to a decision as to the suitability if the applicant was able to give them. An applicant can request a statutory review of suitability, which the council would conduct, whether the offer is accepted or not, but at best the applicant will have had to accept the property before or at the same time as requesting the review, and to take up occupation before the review is completed. If the review is successful, the council will have to offer another property—which means one more move, unnecessary disruption for the applicant, and the council spending time on the formal statutory review process, which it could have avoided.

The justification for the policy is the need to remove applicants and their families from bed and breakfast accommodation as quickly as possible. Obviously, that is desirable, but the brief time required for an inspection can hardly cause a significant delay. I have referred already to the confusion, distress and so on that is caused by the policy, and the potential for avoidable error on the part of the council. The amendment allows for occasions when an inspection is not practicable by referring to a "reasonable opportunity".

This is not the first time that we have addressed the issue. During the passage of the Homelessness Bill in 2001, the noble and learned Lord, Lord Falconer, who was then Housing Minister, accepted the concern and pointed to the protection of the code of guidance. Shelter, which is not the only organisation to have brought the matter to our attention, is concerned that the decision of the Court of Appeal would undermine the code.

I hope that if the Minister cannot accept the amendment in these precise terms, it is something that can be taken away and worked on so that it is right technically. There is so much in this Bill that it would be a great pity not to use this opportunity to tweak a provision of a previous statute which is going slightly wrong and get it right. I beg to move.

Lord Rooker

I shall try to do justice to the amendment. It is an important issue, but we must also ensure that we are living in the real world as well. I know that the noble Baroness is concerned to ensure that homeless applicants are treated fairly, which is what we want. We want people to be provided with accommodation suitable for their needs. We share those concerns.

7 p.m.

That is partly why, for example, we introduced a target of reducing to zero the number of families with children accommodated under the homelessness legislation in bed and breakfast hotels and similar establishments for more than six weeks. That challenging target was met outright by 95 per cent of local housing authorities by the due date of 31 March this year. There were some 26 families.

In other words, when the target was announced, 6,000 children were moved out of bed and breakfast. It is true that some of them may have gone into temporary accommodation, but they have gone into a home of their own where they have a room, a kitchen and they can have their friends round. They are out of bed and breakfast accommodation. That was an incredible achievement by local government of all shades and we are seeking to maintain that figure having hit the target. We keep a constant watch on matters and we have since legislated so that if bed and breakfast accommodation has to be used it cannot be used for longer than six weeks.

We are also setting new accommodation standards for bed and breakfast accommodation and will be consolidating existing standards that apply to accommodation generally, when we issue a revision of the homelessness code of guidance for local authorities in the near future.

The Government want local housing authorities to adopt customer-centred approaches to the allocation of social housing, which give applicants more of a say in choosing where they live. While local housing authorities are under no statutory obligation to offer a choice of accommodation to applicants when they make an allocation of accommodation under Part 6, they are strongly encouraged to do so.

Indeed, the Government have set a target for all housing authorities to have adopted a choice-based approach to letting their long term accommodation by the year 2010. Furthermore, we believe that, where possible, choice-based lettings schemes should include homeless households. Offering choice is an important aspect of enabling the creation of sustainable communities.

However, the homelessness legislation provides a safety net for individuals who find themselves in a housing crisis. In areas of high housing demand where affordable accommodation is in short supply, it would not be practical for authorities to be required to offer a choice of such accommodation, or to take fully into account an applicant's preferences.

The type of accommodation used to discharge such a duty could include a place in a hostel; an offer of a non-secure tenancy in a house or flat, either in the authority's own stock or leased from another landlord; a direct tenancy with another landlord or, as a last resort, a place in a bed and breakfast establishment.

It will not always be practical for an applicant to view the accommodation beforehand; to be frank, there may be little point if no choice is being offered. It is important that the accommodation meets the minimum standards and is suitable for the applicant. In any particular case it is for the authority to decide whether the accommodation is suitable for the applicant.

In the main, where it is practical to do so, people, including the homeless, should have a choice under a choice-based lettings programme. Homeless applicants are using a different route for housing from people waiting in the queue or for an exchange. We need to make sure that their homeless circumstances are taken into account. We are making sure that they have a roof. There are different ways of doing that. Many authorities are introducing policies, which we greatly applaud, helping to prevent homelessness.

Where interim temporary accommodation has been secured by a local authority in discharge of its Part 7 duties, it is not possible to give people a choice in the normal sense of the word. This is crisis accommodation provided to cater for urgent needs of homeless applicants, many of whom would otherwise be living in unreasonable circumstances and some even sleeping rough.

We have cut rough sleeping by 70 per cent. They are not all in permanent long-term accommodation, but they are not on the streets. That figure is checked frequently. I have been out with the team myself not all night but late at night to see the work that goes on. We have cut rough sleeping by 70 per cent. We have removed families with children from bed-and-breakfast accommodation, and we now seek, through an increase in the housing programme, to address the provision of more social accommodation. In the mean time, for crisis accommodation it is not always possible to offer the choice that others would get using the normal route for housing.

Baroness Hamwee

It is obviously important that those who know far more about this than I can hope to should look at what the Minister had to say and see whether they feel anything can be retrieved from it. However, I do not mean that quite as aggressively as it may have sounded.

The Minister has talked throughout about choice. Of course this amendment is about choice, but it is based on what is regarded as suitable for the purposes of the 1996 Act. There is a distinction there that may be relevant to this point.

The Minister started by mentioning the need to live in the real world. Of course, I accept that. This was intended as a real world amendment.

Lord Rooker

That was not aimed at the noble Baroness but at the judges.

Baroness Hamwee

If we are having another knock at the lawyers, that is all right. It is the judges who do not live in the real world. In any event, it is a detailed and fairly technical point even though it is a real issue for those involved. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 191 to 193 agreed to.

Schedule 9 agreed to.

Baroness Hanham moved Amendment No. 233:

Before Clause 194, insert the following new clause—

"GENERAL PRINCIPLE AS TO THE EXERCISE OF FUNCTIONS

(1) In the exercise of their functions under Parts 1, 2, 3, 4 and 7 of this Act, any national authority, local housing authority or residential property tribunal shall, so far as is practicable, seek to ensure that the nature and extent of any works required to be carried out in respect of any premises or any facilities equipment or amenities to be provided in connections with the premises or standards to be complied with shall be no more than the minimum necessary commensurate with the health and safety of the occupiers or likely occupiers of the premises concerned.

(2) In determining how to exercise any function for the purposes of subsection (1) each national authority, local housing authority and residential property tribunal shall have regard to the following—

1. (a) the age, character and locality of the premises concerned,
2. (b) the cost of carrying out any works or providing any facility, equipment or amenity,
3. (c) the nature and extent of any works to be carried out or facility, equipment or amenity to be provided in such premises,
4. (d) the existing structure and design and layout of the premises,
5. (e) how any works, facilities or amenities will affect the matters referred to in paragraph (d),
6. (f) whether or not the premises are a listed building or located within a conservation area within the meaning of the Town & Country Planning Act 1990 (c. 8).

(3) Any reference to a "function" includes a "power"."

The noble Baroness said: I think that it has been the Government's intention all the way through to ensure that there was a light-touch regulation in relation to HMO licensing. We seem to be drifting back in the Bill, but there we are. However, as things stand at the moment it does not look quite so light-touch.

The implementation of the Bill lies in the hands of local authorities. While barriers are breaking down, historically, landlords have somewhat regarded local authorities and their environmental health officers as hostile to the private rented sector. Landlords sometimes feel that local authorities discriminate against them, not always applying the same strict standards to their own properties.

Throughout the debate on the Bill so far, the Government have acknowledged that the private rented sector is something of a cottage industry. With the "buy-to-let" boom, a majority of landlords own fewer than three properties. For example, many parents have in recent years bought properties in student areas for their children to live in and let out the other rooms. They will be surprised to find that they will be brought into the licensing net with all the costs and regulation involved. It would not be unreasonable to suppose that complying with the criteria for licensing could amount to about £10,000 a house. There is, therefore, considerable risk of disinvestment, if significant regulatory and cost burdens are placed on small landlords.

Prior to the passing of the Housing Act 1988, the private rented sector was dying on its feet. Since then, the tide has turned but large-scale residential property operators are notable by their absence from the sector. By and large, it is reliant upon individual investors, particularly the buy-to-let investor.

It is vital to recognise that many houses in multiple occupation provide relatively low cost affordable housing. If the requirements imposed upon them are over the top, they will be lost to the market. Over the last few years there has been a major loss of HMO accommodation, particularly in London, because owners have converted them back to flats. That problem will be exacerbated if excessive requirements are placed on landlords.

It is important that there be a statement of principle in the Bill, so as to ensure that those involved in carrying it into effect have a signpost by which to work. That is particularly significant as regards the residential property tribunals that will deal with appeals as well as the national authorities when setting standards.

The clause would ensure minimum measures, so as to impose the minimal financial burden, but always commensurate with the health and safety of occupiers. The clause then goes on to set out the factors that should be considered when any decision is taken, whether in relation to the setting of standards, enforcement action or appeals. It is vital to take into account the age and character of a property, otherwise one has a situation of new wine in old bottles. One cannot easily bring Victorian and Edwardian properties up to a modern standard. Similarly, there are problems in dealing with listed buildings, where a balance must be struck with the historical features of the building. The cost of any work is an important factor to ensure that it is not unreasonable. At the end of the day, if it is excessive, it will be passed on in higher rents. I beg to move.

Lord Bassam of Brighton

Amendment No. 233 would promote the principle that any requirement on landlords should be no more than is necessary to ensure the health and safety of the occupiers, or likely occupiers, of the premises. I think I understand what lies behind the amendment, and acknowledge that none of us wants local authorities to impose unreasonable requirements on landlords to carry out unnecessary works. I cannot support the amendment, however.

The items listed in subsection (2) of the new clause would, if necessary, be more appropriately dealt with in guidance for the purposes of Part 1 of the Bill. Clause 8 provides for guidance to be issued as to the exercise of Part 1 functions. Indeed, under Part 1, a local authority can serve a notice requiring works to be carried out only if they are necessary to protect the health and safety of the occupier. However, I do not agree that works cannot be required to provide or improve amenities in HMOs unless necessary for health and safety reasons. Licensing conditions must be able to be imposed to ensure that the HMO is reasonably suitable for multiple occupation, which, I think we could all agree, is more about decency and comfort than health and safety.

When we debated Part 2, I sensed a general agreement that, by and large, both sides of the House trusted local authorities to do things properly, and that they should be able to exercise their discretion in an appropriate way. To some extent, the amendment takes away that discretion. I have no reason at all to suppose that local authorities will not take into consideration the matters listed in subsection (2) (a) to (f) when determining whether or not to require works to amenity standards. But I do not think it is necessary to set this out as a statutory duty. Also, I do not think it is appropriate to direct a residential property tribunal in this regard. The whole point of the appeals procedure is to enable the tribunal to rehear the case and reach its own conclusion on the reasonableness, or not, of the original decision, having regard to all the circumstances.

I can understand the spirit behind the amendment, and I can see some of the problems, but I do not think this is the best way to do it. It would probably end up being an abuse of the residential property tribunal. I hope that the noble Baroness, Lady Hanham, feels able to withdraw the amendment.

Baroness Hanham

I thank the Minister for his reply. This may be something that we could come back to at the earlier stage of the Bill next time. I take his point about the guidance in Part 1, but we have got to be really careful—and I know we are in a different part of the Bill now—that the pressures we put with regard to houses in multiple occupation, particularly on landlords with a limited number of properties, are not so onerous that they simply give up and go away. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 194 [Residential property tribunals]:

Lord Bassam of Brighton moved Amendment No. 234:

Page 150, line 25, leave out subsection (5) and insert— (5) In this section "enactment" includes an enactment comprised in subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30)).

The noble Lord said: Amendments Nos. 234 and 235 concern the jurisdiction of residential property tribunals. Amendments Nos. 236, 237 and 238 concern procedural matters to be made by regulations relating to proceedings before them. Clause 194 provides for the constitution and jurisdiction of residential property tribunals. Amendment No. 234 is a technical amendment to clarify that "enactment" in subsection (4) means both primary and secondary legislation.

Amendment No. 235 adds a new clause, Clause 194A, to provide the tribunal with sufficient jurisdiction to dispose of all the relevant issues relating to a case at one hearing. It also gives effect to Schedule 10. Schedule 10 provides that regulations may be made concerning the procedural matters contained therein.

7.15 p.m.

Amendment No. 236 is consequential on amendments made to Clause 97. Amendment No. 237 amends Schedule 10 to provide that regulations can be made to set out standard timelines and directions in the most straightforward of cases, with flexibility for a tribunal to vary them in appropriate circumstances. It also removes criminal liability for non compliance with a fault cost provision which is more appropriate for citizen V state appeals.

Amendment No. 238 provides that regulations may be made so that tribunals can award costs against a party who has acted unreasonably, whether or not that party wins the case. I beg to move.

On Question, amendment agreed to.

Clause 194, as amended, agreed to.

Lord Rooker moved Amendment No. 235:

After Clause 194, insert the following new clause—

"POWERS AND PROCEDURE OF RESIDENTIAL PROPERTY TRIBUNALS

(1) A residential property tribunal exercising any jurisdiction by virtue of any enactment has, in addition to any specific powers exercisable by it in exercising that jurisdiction, the general power mentioned in subsection (2).

(2) The tribunal's general power is a power by order to give such directions as the tribunal considers necessary or desirable for securing the just, expeditious and economical disposal of the proceedings or any issue raised in or in connection with them.

(3) In deciding whether to give directions under its general power a tribunal must have regard to—

1. (a) the matters falling to be determined in the proceedings,
2. (b) any other circumstances appearing to the tribunal to be relevant, and
3. (c) the provisions of the enactment by virtue of which it is exercising jurisdiction and of any other enactment appearing to it to be relevant.

(4) A tribunal may give directions under its general power whether or not they were originally sought by a party to the proceedings.

(5) When exercising jurisdiction under this Act, the directions which may be given by a tribunal under its general power include (where appropriate)—

1. (a) directions requiring a licence to be granted under Part 2 or 3 of this Act;
2. (b) directions requiring any licence so granted to contain such terms as are specified in the directions;
3. (c) directions requiring any order made under Part 4 of this Act to contain such terms as are so specified;
4. (d) directions that any building or part of a building so specified is to be treated as if an HMO declaration had been served in respect of it on such date as is so specified (without there being any right to appeal against it under section 218(9)).

(6) Nothing in any enactment conferring specific powers on a residential property tribunal is to be regarded as affecting the operation of the preceding provisions of this section.

(7) Schedule 10 (residential property tribunals: procedure) has effect.

(8) Section 194(5) applies also for the purposes of this section and Schedule 10."

On Question, amendment agreed to.

Schedule 10 [Residential property tribunals: procedure]:

Lord Bassam of Brighton moved Amendments Nos. 236 to 238:

Page 222, line 22, at end insert "; and () in the case of applications under section 97(4) or (7), requiring the service of copies of the draft orders submitted with the applications.

Page 223, line 20, leave out paragraph 5 and insert—"

"5 (1) Procedure regulations may include—

1. (a) provision relating to the supply of information and documents by a party to the proceedings, and
2. (b) in particular any provision authorised by the following provisions of this paragraph.

(2) The regulations may include provision for requiring, or empowering the tribunal to require, a party to proceedings before a tribunal—

1. (a) to supply to the tribunal information or documents specified, or of a description specified, in the regulations or in an order made by the tribunal;
2. (b) to supply to any other party copies of any information or documents supplied to the tribunal;
3. (c) to supply any such information, documents or copies by such time as is specified in or determined in accordance with the regulations or order.

(3) The regulations may also include provision—

1. (a) for granting a party to the proceedings such disclosure or inspection of documents, or such right to further information, as might be granted by a county court;
2. (b) for requiring persons to attend to give evidence and produce documents;
3. (c) for authorising the administration of oaths to witnesses.

(4) The regulations may include provision empowering a tribunal to dismiss, or allow, the whole or part of an appeal or application in a case where a party to the proceedings has failed to comply with—

1. (a) a requirement imposed by regulations made by virtue of this paragraph, or
2. (b) an order of the tribunal made by virtue of any such regulations."

Page 225, leave out lines 20 to 22 and insert— () he has failed to comply with an order made by the tribunal; () in accordance with regulations made by virtue of paragraph 5(4), the tribunal dismisses, or allows, the whole or part of an application or appeal by reason of his failure to comply with a requirement imposed by regulations made by virtue of paragraph 5; ()in accordance with regulations made by virtue of paragraph 9, the tribunal dismisses the whole or part of an application or appeal made by him to the tribunal; or

On Question, amendments agreed to.

Schedule 10, as amended, agreed to.

Clauses 195 to 197 agreed to.

Clause 198 [Management regulations in respect of HMOs]:

[Amendment No. 238A not moved.]

Clause 198 agreed to.

Clause 199 [Power to require documents to be produced]:

Lord Rooker moved Amendment No. 238B:

Page 152, leave out lines 36 and 37 and insert "A person authorised in writing by a local housing authority may exercise the power conferred by subsection (2) in relation to documents reasonably required by the authority—"

The noble Lord said: Amendments Nos. 238B and 238C respond to a recommendation of the Joint Committee on Human Rights. Clause 199 allows a local housing authority to require the provision of documentation that the authority might need in order to carry out its functions under Parts 1 to 4 of the Bill and to investigate offences committed in relation to any residential premises. No person can be required to produce documents which he would be entitled to refuse to produce in court. The authority may serve a notice on a relevant person. Subsection (7) defines "relevant person" for the purpose of these amendments.

The Joint Committee on Human Rights in its 10th report has expressed concern that the requirement to exercise this power proportionately is not sufficiently built into the Bill. The lack of any procedural safeguards, in particular the lack of a requirement for either judicial authorisation or for an appropriate level of internal authorisation, leads in its view to a risk of unjustified use of this power in breach of Article 8 rights.

These amendments are therefore brought forward and we believe that they meet the concerns of the Joint Committee on Human Rights without adding to the administrative burden on authorities. I beg to move.

On Question, amendment agreed to.

Lord Rooker moved Amendment No. 238C:

Page 152, line 42, leave out "local housing authority" and insert "person so authorised"

On Question, amendment agreed to.

Clause 199, as amended, agreed to.

Clauses 200 to 202 agreed to.

Clause 203 [Powers of entry]:

Lord Rooker moved Amendments Nos. 238D and 238E:

Page 155, line 2, after "order" insert "to carry out an inspection under section 4(1) or otherwise"

Page 155, line 8, leave out subsection (2) and insert— (1A) Subsection (2) also applies where the proper officer of the local housing authority considers that a survey or examination of any premises is necessary in order to carry out an inspection under section 4(2).

(2) Where this subsection applies—

1. (a) a person authorised by the local housing authority (in a case within subsection (1)), or
2. (b) the proper officer (in a case within subsection (1A)),

may enter the premises in question at any reasonable time for the purpose of carrying out a survey or examination of the premises."

On Question, amendments agreed to.

The Deputy Chairman of Committees

I should have warned the noble Baroness that, by reason of pre-emption, if Amendment No. 238E was agreed to, Amendments Nos. 238F and 238G could not be moved. I apologise to the noble Baroness, Lady Hanham, that she cannot move those amendments.

[Amendments Nos. 238F and 238G not moved.]

Lord Rooker moved Amendment No. 238H:

Page 155, line 21, after "person" insert "or proper officer"

On Question, amendment agreed to.

Baroness Hanham moved Amendment No. 238J:

Page 155, line 31, at end insert ", and (c) only after the issuing of a warrant in relation to the premises issued by a justice of the peace

The noble Baroness said: I have been knocked back by not being told earlier that my other amendments were pre-emptive. I do not quite understand that. But I understand that I can still speak.

This clause is about the power of entry. As it stands a local authority can effectively send an authorised person to enter the home of an individual for the purpose of Clause 203, without seeking even the approval of a magistrate or some other judicial authority. Can the Minister say whether that is a new departure, because Amendments Nos. 238G and 238J specify that before such action can be taken the local authority must seek the authorisation of a warrant of a magistrate?

Amendment No. 238F is simply a probing amendment which has been pre-empted. Finally, Amendment No. 238K would remove from the armoury of the local authority the ability to leave recording equipment on any site it visited. I have to say that, reading between the lines, that gives enough legitimacy for a local authority to basically spy on and bug an individual in their accommodation. This would appear to be a worrying departure. We need from the Minister an understanding of what is required in terms of the powers of entry, so that we are not giving power of entry to any local authority person, whether authorised to be dealing with these matters or not. I beg to move.

Lord Bassam of Brighton

This group of amendments, as the noble Baroness said, seeks to limit access where a warrant has already been issued. I presume that this is not necessary when the owner is prepared to co-operate.

Baroness Hanham

This amendment has nothing to do with a situation in which a warrant has been issued. It states that there should be no entry without a warrant. I think we are on the wrong side of the coin.

Lord Bassam of Brighton

The amendment is designed to prevent an authority entering premises without a warrant. I understand the point. I am not quite sure what the problem is, because I think that such powers have existed before but I wish to check that.

Specifically, Amendment No. 238K relates to entering premises to remove recording. No, I believe that what is being attacked here is a concern about eavesdropping. Is that correct?

Baroness Hanham

There is a concern, first, about people, however prominent in the local authority, waltzing into other people's property. Secondly, there is a concern about leaving recording equipment for some reason—however good they might think it is—that could potentially bug the property. I cannot make it much clearer than that.

Lord Bassam of Brighton

The powers contained in Clause 203 give the local housing authority power of access where certain conditions are met. Representatives of the authority must have written authorisation setting out the purpose for which the entry is authorised and must give at least 24 hours notice to the owner or occupier of the premises they intend to enter.

Permission under the clause does not include a power to use force to enter and the power of entry includes entry for the purpose of taking samples. That is how it is framed, and it is also relevant to mention that Clause 204 enables a justice of the peace to issue a warrant for admission to premises, and that this includes power to enter by force, but only if necessary. The power is applicable, however, only when either entry under Clause 203 has been refused, or the property is empty and immediate access is necessary, or prior warning of entry is likely to negate the purpose of access. I understand the concerns, but there is sufficient qualification and hedging of the entry power so that the problem that the noble Baroness, Lady Hanham, sees is not so obvious.

In particular, the recording equipment referred to, which may well have triggered part of the concern in terms of eavesdropping and so on, is for recording levels of, for example, radon, or other harmful gases or particles. The inspector may need to leave the equipment—I am sure the noble Baroness will be familiar with this sort of activity from her local government experience—and return after a period of time, rather than take an immediate test and leave with the equipment. We do not want, in these circumstances, where there is an important issue of public health, to tie the hands of the inspector and prevent the inspector from acting effectively.

However, the inspector cannot simply leave equipment that records gases or particles without justification. I would like to reassure the noble Baroness, Lady Hanham, that we have hedged this power sufficiently. It is a matter of public protection and it is not a power that we would advance without all of those issues being at the forefront of our thinking.

Baroness Hanham

I am sorry that it is so late, because I would really wish to test the Minister on what he has said. Clause 203(4) states that before entering the premises the authorised person must give 24 hours' notice to the owner of the premises or to the occupier, if any. The chances arc that there will be somebody there. I will read what the Minister finally said when we got the thing right, but there is a real problem with people having the right to enter property—

Lord Bassam of Brighton

Would it help if between now and Report I sent the noble Baroness, Lady Hanham, a note giving some further explanation? This is a benign power. I can understand, having heard the noble Baroness read the subsection, that there may be some concern that we are being over-zealous here, but that is not the intention. I think that I could probably reassure the noble Baroness in correspondence.

Baroness Hanham

I should be grateful for that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 238K not moved.]

Clause 203, as amended, agreed to.

Clause 204 [Warrant to authorise entry]:

Lord Rooker moved Amendment No. 238L:

Page 156, line 15, after "order" insert "to carry out an inspection under section 4(1) or (2) or otherwise"

On Question, amendment agreed to.

Clause 204, as amended, agreed to.

Clauses 205 and 206 agreed to.

Lord Rooker moved Amendment No. 238M:

After Clause 206, insert the following new clause—

"AUTHORISATIONS FOR ENFORCEMENT PURPOSES ETC.

(1) This section applies to any authorisation given for the purposes of any of the following provisions—

1. (a) section 122 (management orders: power of entry to carry out work),
2. (b) section 199 (power to require documents to be produced),
3. (c) section 203 (powers of entry),
4. (d) paragraph 3(4) of Schedule 3 (improvement notices: power to enter to carry out work), and
5. (e) paragraph 25 of Schedule (Further provisions regarding empty dwelling management orders) (EDMOs: power of entry to carry out work).

(2) Any such authorisation must be given by the appropriate officer of the local housing authority.

(3) For the purposes of this section a person is "an appropriate officer" of a local housing authority, in relation to an authorisation given by the authority, if either—

1. (a) he is a deputy chief officer of the authority (within the meaning of section 2 of the Local Government and Housing Act 1989 (c. 42)), and
2. (b) the duties of his post consist of or include duties relating to the exercise of the functions of the authority in connection with which the authorisation is given,

or he is an officer of the authority to whom such a deputy chief officer reports directly, or is directly accountable, as respects duties so relating."

On Question, amendment agreed to.

[Amendment No. 238N not moved.]

Clauses 207 and 208 agreed to.

7.30 p.m.

Clause 209 [Service of documents]:

Lord Rooker moved Amendment No. 239:

Page 158, line 14, leave out from "premises" to end of line 16.

The noble Lord said: This group contains 14 government amendments, in the middle of which is deposited one opposition amendment. I shall try briefly to work my way through each of the 14 government amendments. Some are of some substance; others are not. I shall try to cut the cloth accordingly.

Amendments Nos. 239, 240 and 241 are minor amendments to Clause 209, which is concerned with the service of documents by local authorities on persons for the purposes of Parts 1 to 4 and Part 7. They either deal with inconsistency between subsections or they clarify subsections. I do not need to say any more.

Government Amendment No. 244A provides that the appropriate national authority can make rules concerning the calculation of numbers of persons for the provisions of the Bill. It is intended that the rules will be made by calculating the number of persons, including, in particular, children, for the purposes of licensing houses in multiple occupation. The appropriate national authority will consult on the rules and, of course, any order or regulation containing them will be laid before the House. Essentially, the rules will apply to the maximum permitted occupancy levels under licensing and shared amenity standards.

Government Amendment No. 252 provides that the new clause contained within Amendment No. 244A will come into force on the day that the Bill receives Royal Assent.

Government Amendment No. 253—I have gone out of order but it does not matter—is needed to update the Bill to provide for the commencement of new provisions inserted into the Bill during the Committee stage.

I turn to government Amendment No. 245. Schedule 12 makes minor and consequential amendments which are needed as a result of the Bill. This amendment simply adds to the schedule amendments which replace references in the Land Compensation Act 1973 to current housing enforcement notices—repair notices and closing orders—with the new enforcement notices in the Bill. The amendment is necessary to deal with both existing references to the 1973 Act and those in the new "loss payment: exclusion" provisions inserted by the Planning and Compulsory Purchase Act 2004.

Government Amendment No. 247 also relates to Schedule 12, which, again, makes minor and consequential amendments needed as a result of the Bill. The amendment revises the new Section 268 of the Housing Act 1985 that already appears in Schedule 12.

Amendments Nos. 248, 249 and 250 are to Schedule 13 and repeal a number of provisions made redundant by changes made as we have gone through the Bill.

I now return to my speaking note on government Amendment No. 242D. This is intended to close a major loophole in the legislation whereby a manager of a building can claim that the property is not a house in multiple occupation because the occupiers do not meet the necessary residency requirements. Essentially, the new clause introduced by the amendment places the burden of proof with regard to these matters on the manager. The general rule of thumb is that, in order for a building to be regarded as house in multiple occupation, it must be occupied by persons as their only or main residence.

The Government recognise that there may be circumstances in which there is a mix of occupancies—the most obvious example being bed and breakfast establishments, where some of the accommodation could be occupied by tourists and other accommodation could be occupied on a long-term basis by homeless families or asylum seekers. So we do not want a loophole to exist.

Government Amendments Nos. 252 and 253 are needed to update the Bill to provide for the commencement of new provisions inserted into the Bill during this Committee stage. If noble Lords wish to speak to Amendment No. 242A I shall be happy to respond to that now. I see the answer is "No". I beg to move.

On Question, amendment agreed to.

Lord Rooker moved Amendments Nos. 240 and 241:

Page 158, line 41, at end insert— () Subsection (1)(c) or (5)(c) applies whether the provision requiring or authorising service of the document refers in terms to a person having an estate or interest in premises or instead refers to a class of person having such an estate or interest (such as owners, lessees or mortgagees).

Page 159, line 7, after "section" insert—

1. "(a) references to a person managing premises include references to a person authorised to permit persons to occupy premises; and
2. (b)"

On Question, amendments agreed to.

Clause 209, as amended, agreed to.

Clauses 210 to 212 agreed to.

Clause 213 [Orders and regulations]:

The Deputy Chairman of Committees

I have to advise the Committee that if Amendment No. 242ZA is agreed to, I shall not be able to call Amendment No. 242A.

Lord Rooker moved Amendment No. 242ZA:

Page 161, line 11, leave out subsections (5) and (6) and insert— (5) Subsection (4) does not apply to any order under section 231 or paragraph 3 of Schedule (Provisions relating to tenancy deposit schemes).

(6) Subsection (4) also does not apply to—

1. (a) any order under section 54(3) which makes the provision authorised by section 54(4),
2. (b) any order under section 77(5) or (7),
3. (c) any order under section 187 or 194(3),
4. (d) any order under section 226(2) which modifies any provision of an Act,
5. (e) any regulations under section 217(6),
6. (f) any regulations under paragraph 3 of Schedule 4 or paragraph 9 of Schedule (Provisions relating to tenancy deposit schemes), or
7. (g) any regulations made by virtue of paragraph 11(3)(b) or 12(3)(b) of Schedule 10;

and no such order or regulations may be made by the Secretary of State (whether alone or with other provisions) unless a draft of the statutory instrument containing the order or regulations has been laid before, and approved by a resolution of, each House of Parliament."

On Question, amendment agreed to.

[Amendment No. 242A not moved.]

Clause 213, as amended, agreed to.

Clause 214 [Offences by bodies corporate]:

[Amendment No. 242B not moved.]

Clause 214 agreed to.

Clause 215 [Power to up-rate level of fines for certain offences]:

[Amendment No. 242C not moved.]

Clause 215 agreed to.

Clauses 216 to 222 agreed to.

Lord Rooker moved Amendment No. 242D:

After Clause 222, insert the following new clause—

"HMOS: PRESUMPTION THAT SOLE USE CONDITION OR SIGNIFICANT USE CONDITION IS MET

(1) Where a question arises in any proceedings as to whether either of the following is met in respect of a building or part of a building—

1. (a) the sole use condition, or
2. (b) the significant use condition,

it shall be presumed, for the purposes of the proceedings, that the condition is met unless the contrary is shown.

(2) In this section—

1. (a) "the sole use condition" means the condition contained in—
   1. (i) section 217(2)(d) (as it applies for the purposes of the standard test or the self-contained flat test), or
   2. (ii) section 217(4)(e),
   as the case may be; and
2. (b) "the significant use condition" means the condition contained in section 218(2) that the occupation of the living accommodation or flat referred to in that provision by persons who do not form a single household constitutes a significant use of that accommodation or flat."

On Question, amendment agreed to.

Clause 223 agreed to.

Clause 224 [Meaning of "lease", "tenancy", "occupier" and "owner" etc.]:

Lord Rooker moved Amendments Nos. 243 and 244:

Page 168, line 34, at end insert— And see sections (General effect of interim management orders: leases and licences granted by authority) and (General effect of final management orders: leases and licences granted by authority) (which also extend the meaning of references to leases).

Page 169, line 21, at end insert— And see sections (General effect of interim management orders: leases and licences granted by authority) and (General effect of final management orders: leases and licences granted by authority) (which also extend the meaning of references to licences).

On Question, amendments agreed to.

Clause 224, as amended, agreed to.

Clause 225 agreed to.

Lord Rooker moved Amendment No. 244A:

After Clause 225, insert the following new clause—

"CALCULATION OF NUMBERS OF PERSONS

(1) The appropriate national authority may prescribe rules with respect to the calculation of numbers of persons for the purposes of—

1. (a) any provision made by or under this Act which is specified in the rules, or
2. (b) any order or licence made or granted under this Act of any description which is so specified.

(2) The rules may provide—

1. (a) for persons under a particular age to be disregarded for the purposes of any such calculation;
1467
2. (b) for persons under a particular age to be treated as constituting a fraction of a person for the purposes of any such calculation.

(3) The rules may be prescribed by order or regulations."

On Question, amendment agreed to.

Clause 226 agreed to.

Schedule 12 [Minor and consequential amendments]:

Lord Rooker moved Amendments Nos. 245 to 247:

Page 227, line 38, leave out paragraph 2 and insert— 2 The Land Compensation Act 1973 has effect subject to the following amendments.

2A (1) Section 29 (right to home loss payment where person displaced from dwelling) is amended as follows.

(2) In subsection (1)—

1. (a) for paragraph (b) substitute—
2. "(b) the making of a housing order in respect of the dwelling;"; and.
3. (b) in paragraph (ii) for the words from "the order" onwards substitute "the housing order;".

(3) In subsection (3A) for the words from "the acceptance" onwards substitute "the carrying out of any improvement to the dwelling unless he is permanently displaced from it in consequence of the carrying out of that improvement."

(4) For subsection (7) substitute—

"(7) In this section "a housing order" means—

1. (a) a prohibition order under section 19 or 20 of the Housing Act 2004, or
2. (b) a demolition order under section 265 of the Housing Act 1985."

2B (1) Section 33D (loss payments: exclusions) is amended as follows.

(2) In subsection (4) for paragraphs (b) and (c) substitute—

1. "(b) notice under section 10 of the Housing Act 2004 (improvement notice relating to category 1 hazard);
2. (c) notice under section 11 of that Act (improvement notice relating to category 2 hazard);".

(3) For subsection (5) substitute—

"(5) These are the orders—

1. (a) an order under section 19 of the Housing Act 2004 (prohibition order relating to category 1 hazard);
2. (b) an order under section 20 of that Act (prohibition order relating to category 2 hazard);
3. (c) an order under section 42 of that Act (emergency prohibition orders);
4. (d) an order under section 265 of the Housing Act 1985 (demolition order relating to category 1 or 2 hazard)."

2C (1) Section 37 (disturbance payments for persons with compensatable interests) is amended as follows.

(2) In subsection (1)—

1. (a) for paragraph (b) substitute—
2. "(b) the making of a housing order in respect of a house or building on the land;"; and.
3. (b) in paragraph (ii) for the words from "the order" onwards substitute "the housing order;".

(3) In subsection (2)(c) for "closing" substitute "prohibition".

(4) In subsection (3) for the words from "any such order" onwards substitute "a housing order within paragraph (b) of that subsection unless he was in lawful possession as aforesaid at the time when the order was made."

(5) In subsection (3A) for the words from "the acceptance" onwards substitute "the carrying out of any improvement to a house or building unless he is permanently displaced in consequence of the carrying out of that improvement."

(6) In subsection (9) omit "or undertaking".

2D (1) Section 39 (duty to rehouse residential occupiers) is amended as follows.

(2) In subsection (1) for paragraph (b) substitute—

1. "(b) the making of a housing order in respect of a house or building on the land;".

(3) In subsection (6) for the words from "any such order" onwards substitute "a housing order within paragraph (b) of that subsection unless he was residing in the accommodation in question at the time when the order was made."

(4) In subsection (6A) for the words from "the acceptance" onwards substitute "the carrying out of any improvement to a house or building unless he is permanently displaced from the residential accommodation in question in consequence of the carrying of that improvement."

(5) In subsection (9) omit "or undertaking"."

Page 228, line 27, at end insert—

"Mobile Homes Act 1983 (c. 34)

In section 2 of the Mobile Homes Act 1983 (terms of agreements) after subsection (4) insert—

"(5) The supplementary provisions in Part 3 of Schedule 1 to this Act have effect for the purposes of paragraphs 8 and 9 of Part 1 of that Schedule.""

Page 229, leave out lines 2 to 21 and insert—

"268 SERVICE OF COPIES OF DEMOLITION ORDER

(1) A local housing authority who have made a demolition order must serve a copy of the order on every person who, to their knowledge, is—

1. (a) an owner or occupier of the whole or part of the premises to which the order relates,
2. (b) authorised to permit persons to occupy the whole or part of those premises, or
3. (c) a mortgagee of the whole or part of the premises.

(2) The copies required to be served under subsection (1) shall be served within the period of seven days beginning with the day on which the order is made.

(3) A copy of the order is to be regarded as having been served on every occupier in accordance with subsections (1) and (2) if a copy of the order is fixed to some conspicuous part of the premises within the period of seven days mentioned in subsection (2).

(4) An demolition order against which no appeal is brought under section 269 becomes operative at the end of the period of 28 days beginning with the day on which the order is made and is final and conclusive as to matters which could be raised on an appeal.

(5) Section 209 of the Housing Act 2004 (service of notices)—

1. (a) applies in relation to copies required to be served under this section (instead of section 617 below), and
2. (b) so applies as it applies in relation to documents required to be served under any provision of Parts 1 to 4 of that Act."

8A In section 269(1) (right of appeal against demolition or closing order) for the words from "demolition or closing order" to "the order," substitute "demolition order may, within the period of 28 days beginning with the day on which the order is made,".

After section 269 insert—"

On Question, amendments agreed to.

Schedule 12, as amended, agreed to.

Clause 227 agreed to.

Schedule 13 [Repeals]:

Lord Rooker moved Amendments Nos. 248 to 250:

Page 239, column 2, leave out line 32 and insert—

	"In section 37(9), the words "or undertaking".
	In section 39(9), the words "or undertaking"."

Page 240, column 2, leave out lines 20 and 21 and insert—

"Section 269(2A) and (3A)."

Page 241, line 8, at end insert—

"Housing (Consequential Provisions) Act 1985 (c. 71)

In Schedule 2, paragraph 24(2)(d)."

On Question, amendments agreed to.

Schedule 13, as amended, agreed to.

Clauses 228 and 229 agreed to.

Clause 230 [Expenses]:

[Amendment No. 251 not moved.]

Clause 230 agreed to.

Clause 231 [Short title, commencement and extent]:

Lord Rooker moved Amendments Nos. 252 to 256:

Page 171, line 7, at end insert "(Calculation of numbers of persons),"

Page 171, line 16, at end insert— () Schedule (New Schedule 5A to the Housing Act 1985: initial demolition notices),

Page 171, line 26, after "171," insert "(Tenancy deposit schemes) to (Sanctions for non-compliance),"

Page 171, line 26, after "206," insert "(Authorisations for enforcement purposes etc.),"

Page 171, line 27, at end insert— () Schedule (Provisions relating to tenancy deposit schemes),

On Question, amendments agreed to.

Clause 231, as amended, agreed to.

House resumed: Bill reported with amendments.