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Baroness Fisher of Rednal: My Lords, the noble Lord's party built high blocks of flats. The block of flats I mentioned which was opened by the Minister was built

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under the Tories. Those flats are still there. They have been completely renovated and brought up to date. I invite my noble friend to come to Birmingham and I will take him to see them.

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

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

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

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

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

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whether they would continue to make the contribution to home ownership that those great societies have made over recent decades.

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

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

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

In relation to the figures, under the heading "Homes for those who need them most", dealing with the statutorily homeless, page 36 of the White Paper states:

    "They gain this priority regardless of the importance of the needs of other people on the housing waiting list. Today 40% of local authority new tenancies (over 80% in some London authorities) and over a quarter of allocations of housing association tenancies go to households accepted under the homelessness legislation."
I have found it impossible to persuade often decent, struggling families, living in substandard accommodation, often sharing--

Baroness Hollis of Heigham: My Lords, if I may--

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

The families I mentioned find themselves pipped at the post by someone deemed to be homeless. Under the existing legislation there has been a tendency for authorities to look at categories instead of comparative need, which they should be considering. I support what my noble friend on the Front Bench said about the distinction between finding permanent accommodation and emergency help for those who have involuntarily found themselves homeless. I welcome the proposed drawing of a distinction between short-term relief for

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homelessness and long-term secure accommodation. I do not wish to repeat the arguments which have already been made.

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

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

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

It seems to me that we have a tendency to listen to the organisations which quite properly represent those whom they see as the victims of family breakdown and homelessness, whereas we have an overriding duty to try to preserve the strength of the social fabric as a whole. If, through our housing policy, we can try to

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keep families together so that they do not break up and become charges on the community, we will be doing our duty. It is too easy to remedy the plight of the wandering waif and not recognise that the availability of that remedy may have caused the waif to wander in the first place.

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

5.58 p.m.

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

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

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

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

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

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

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

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

When it comes to the right to buy of a housing association, the situation is very curious. Again, as a result of government policy, there is now private finance in the housing association market. At one time it was predominantly Housing Corporation money. We now

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have a situation whereby a housing association can build a house, half of it funded by the taxpayer and half by the private sector. When that property is sold the private financier gets all his money back, but the public purse has to pay even for the discount that private financiers have contributed. The whole process is unfair. There are a number of anomalies within the Bill which will give rise to some interesting debates in Committee.

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

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

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

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

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

I have been speaking for far too long but perhaps I can ask one question. At the end of the Bill, in the "Miscellaneous and general provisions" section, reference is made to the application of the Bill to the Isles of Scilly. I have not seen that in previous Bills that

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have come before your Lordships' House. Perhaps the Minister can resolve the matter. The other points I raised will no doubt emerge in Committee. However, we need to bear in mind the wise words of the noble Baroness, Lady Fisher of Rednal, when she said that the Bill will not contribute one iota to new resources for housing the poorly housed and the homeless. I suggest that she was slightly wrong when she said that it tinkered at the edges. It will, in fact, do major damage if it is not significantly amended by your Lordships' House.

6.13 p.m.

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

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

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

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

I welcome many of the changes proposed in the Bill to the operation of the 1993 Act. I do so without reservation in respect of preventing abuses that have

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taken place arising out of management, the question of forfeiture of leases and methods clearly designed to deny the tenant's right of first refusal under the 1987 Act or to frustrate the process of enfranchisement. The measures are necessary and desirable to protect long leaseholders from the more unscrupulous type of management or freeholder. I am glad to note that the property industry also has been actively involved and consulted, as well as the home ownership sector.

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

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

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

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

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

There has been no rapid expansion in the number of professional managers coming forward in the housing sector. Traditional professional managers are all too

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

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

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

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

There are always problems when dealing with enfranchisement and responding to consumer demand. Consumerism may be a very short-term exercise. Value for money and long-term investment are commonly overlooked by a transient population in a flat development. We have to be careful that we do not push out the blue chip investors, the blue chip ground floor tenants, in mixed-use developments. If we do that, it will not be in the public interest. We will be risking

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progressive disinvestment and we will not get rid of friction between occupiers and freeholders. I wonder whether some of the great London estates--and I am not privy to their decision making--have not already got far advanced plans to scale down their involvement or perhaps disinvest in residential long leaseholds in favour of something which is less troublesome. It would be an enormous shame if they were to start departing that field. As I say, I have no brief to argue their corner. However, I do detect that no one is likely to care if management and proprietorship are split until the day when the proprietor is seen not to care whether management is good or bad. We need to give that very careful thought so as not to destabilise all sorts of things such as the quality of urban environments, the quality of management and the enjoyment and amenity of residential occupiers in their homes. If we are not careful we will get into the mechanisms of changing cost and risk and seeing markets move. There is a great deal at stake here.

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

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

6.26 p.m.

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

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

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planning permission and local communities will be deterred from giving support to new affordable housing schemes.

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

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

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

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

I should like to say a few words about the leasehold reform measures in the Bill. These were introduced following the exposure of the activities of a small number of unscrupulous landlords of long leasehold residential property. I warmly welcome the swift action the Government have taken in identifying this problem and introducing a focused package of measures. These measures will give lessees important new rights and

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provide effective safeguards against abuse, while at the same time not impinging on the vast majority of responsible landlords. Responsible landlords have nothing to fear from these measures; it is only the rogues who will be penalised. I congratulate the Government on striking this balance well. I should also like to pay tribute to the work of CARLA--the Campaign Against Residential Leasehold Abuse--in bringing these issues to the fore and maintaining the pressure for reform.

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

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

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

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

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

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

6.36 p.m.

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

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

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

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

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

I have viewed with increasing alarm the consultation paper produced by the Department of the Environment in association with the Housing Bill as regards the allocation of housing by local authorities. I believe that there is a parallel document from the Welsh Office, but I am referring to the DoE document. Paragraph 29 speaks about,

    "the underlying social characteristics of households whom the Government believes warrant preference for settled accommodation over other households living in similar conditions".
Two sentences later, the report states,

    "Consideration should also be given to the needs of those who have delayed starting a family because of the inadequacies of their accommodation".
There is a point there. I do not for the life of me see how a local authority can possibly discover that people have delayed starting a family because of the inadequacies of their accommodation. How on earth is the local authority supposed to establish that? It baffles me. It may be that the Minister has some answer.

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

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

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

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

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

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

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

I turn now to the question of private leaseholders, dealt with in Part III of the Bill. That has been a longstanding problem. The Government have tried to

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

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

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

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

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

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