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Division No. 2

CONTENTS
Addington, L.
Archer of Sandwell, L.
Beaumont of Whitley, L.
Berkeley, L.
Clifford of Chudleigh, L.
Dahrendorf, L.
Dormand of Easington, L.
Dubs, L.
Geraint, L.
Gladwin of Clee, L.
Graham of Edmonton, L. [Teller.]
Hamwee, B.
Harris of Greenwich, L.
Haskel, L.
Hollis of Heigham, B.
Howie of Troon, L.
Jeger, B.
Jenkins of Putney, L.
Lawrence, L.
McNally, L.
Meston, L.
Methuen, L.
Milner of Leeds, L.
Mishcon, L.
Monkswell, L.
Morris of Castle Morris, L. [Teller.]
Nicol, B.
Plant of Highfield, L.
Redesdale, L.
Richard, L.
Russell, E.
Seear, B.
Shannon, E.
Stoddart of Swindon, L.
Strabolgi, L.
Strafford, E.
Thurso, V.
Tordoff, L.
Turner of Camden, B.
Wallace of Coslany, L.
White, B.
Williams of Elvel, L.
Winston, L.

NOT-CONTENTS
Addison, V.
Ailsa, M.
Ashbourne, L.
Balfour, E.
Belhaven and Stenton, L.
Berners, B.
Birdwood, L.
Blaker, L.
Blatch, B.
Boardman, L.
Boyd-Carpenter, L.
Brabazon of Tara, L.
Braine of Wheatley, L.
Bridgeman, V.
Brigstocke, B.
Burnham, L.
Cadman, L.
Caithness, E.
Caldecote, V.
Campbell of Croy, L.
Carnegy of Lour, B.
Carnock, L.
Carr of Hadley, L.
Chesham, L. [Teller.]
Clanwilliam, E.
Clark of Kempston, L.
Colwyn, L.
Courtown, E.
Craigavon, V.
Cranborne, V. [Lord Privy Seal.]
Cranbrook, E.
Cumberlege, B.
Dixon-Smith, L.
Dudley, E.
Eccles of Moulton, B.
Elliott of Morpeth, L.
Elton, L.
Feldman, L.
Gardner of Parkes, B.
Geddes, L.
Gisborough, L.
Hamilton of Dalzell, L.
Harding of Petherton, L.
Harrowby, E.
Haslam, L.
Henley, L.
Holderness, L.
HolmPatrick, L.
Howe, E.
Inglewood, L.
Kinnoull, E.
Layton, L.
Lindsey and Abingdon, E.
Long, V.
Lucas, L.
McColl of Dulwich, L.
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L. [Lord Chancellor.]
Mackay of Drumadoon, L.
Macleod of Borve, B.
Massereene and Ferrard, V.
Merrivale, L.
Mersey, V.
Miller of Hendon, B.
Milverton, L.
Monson, L.
Monteagle of Brandon, L.
Montgomery of Alamein, V.
Mottistone, L.
Mountevans, L.
Mowbray and Stourton, L.
Munster, E.
Murton of Lindisfarne, L.
Nelson, E.
Nickson, L.
Norrie, L.
Northesk, E.
O'Cathain, B.
Orr-Ewing, L.
Oxfuird, V.
Pearson of Rannoch, L.
Pender, L.
Prentice, L.
Rawlings, B.
Rees, L.
Renton, L.
Romney, E.
St. Davids, V.
Sanderson of Bowden, L.
Seccombe, B.
Selsdon, L.
Shaw of Northstead, L.
Shrewsbury, E.
Soulsby of Swaffham Prior, L.
Stewartby, L.
Strathclyde, L. [Teller.]
Sudeley, L.
Swinfen, L.
Thomas of Gwydir, L.
Thomas of Swynnerton, L.
Tollemache, L.
Trefgarne, L.
Trumpington, B.
Tugendhat, L.
Wakeham, L.
Wilcox, B.
Willoughby de Broke, L.
Wise, L.
Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

13 Jun 1996 : Column 1875

6.1 p.m.

Clause 93 agreed to.

Clause 94 [Mandatory possession for non-payment of rent: reduction in arrears required]:

Lord Meston moved Amendment No. 242JA:

Page 63, line 31, at end insert ("; and
(c) at the end of the Ground there shall be inserted--
"provided that no order for possession shall be made under this ground if a court is satisfied that--
(i) prior to the date of hearing the tenant has made a claim for housing benefit in respect of the period to which the arrears relate in whole or in part and which has not been finally determined by the local housing authority to which it was made; or
(ii) the tenant has an arguable set-off against the unpaid rent of an amount of liquidated or unliquidated damages capable of reducing the rent outstanding to below the amounts claimed.".").

13 Jun 1996 : Column 1876

The noble Lord said: Clause 94 deals with the grounds for making a possession order and amends the mandatory rent arrears ground (Ground 8) to enable landlords to take action when the level of rent outstanding is eight weeks in the case of weekly or fortnightly tenancies, and two months for monthly tenancies. It is a reduction of five weeks in the case of weekly or fortnightly tenancies, and of one month in the case of monthly tenancies.

One wonders what is the case for the amendments brought about by Clause 94. Having read the debates in another place, I have been unable to find a clear justification for Clause 94. If there were clear evidence of substantial difficulties experienced by landlords one might understand the case for Clause 94; but I am not aware of such evidence. All the clause does is to put an increased number of tenants at risk. That is not to say that one does not sympathise with landlords whose tenants will not or cannot pay.

However, there are in practice two problems which the amendment seeks to address. First, delay in obtaining housing benefit is the basis of the first limb of the amendment which I propose. If a proper claim to benefit which would help to meet some or all of the arrears is still pending when a possession claim comes to court, surely it is right that the courts should have a discretion not to order possession. Likewise, if there is an arguable set-off. That is the second problem in practice.

The amendment ensures that landlords are not able to recover possession where the tenant has claimed compensation by way of a counter-claim--for example, for disrepair, harassment or any other breach of the tenancy agreement. An amendment in similar terms was discussed at Report stage in another place. The Government's response at that stage was that there was a potential for the amendment to lead to long and protracted disputes about the cause and extent of the counter-claim; and, further, that the existing state of the law catered sufficiently well for the question. It is that latter proposition which I challenge. Without the amendment it will remain uncertain whether a tenant with a counter-claim for damages can resist a Ground 8 possession claim. The question was specifically left open by the Court of Appeal in a case reported in 1993, Mountain v. Hastings. The landlord will still have available to him the discretionary ground on which possession can be claimed under Ground 10 of the legislation. That would provide for any amount of arrears to be the basis for a claim for possession.

I suggest that mandatory orders for possession should be made only where there is clearly a substantial breach of the tenancy agreement. If there is any doubt about there being a substantial breach, or about the ability of the tenant to rectify that breach wholly or in part--for example, by way of housing benefit when it arrives; or by having a good, arguable counter-claim or set-off--the tenant quite properly should have the benefit of the doubt. I beg to move.

Baroness Hollis of Heigham: I support the amendment. One of the increasing causes of homelessness, as we know, is eviction from the private

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rented sector, usually, though not always, associated with failure to pay rent. Increasingly that failure to pay rent may be due to local authority errors or delays, for good and bad reasons, in processing housing benefit. A good reason, for example, is where the local authority needs quite detailed information and the employer refuses to co-operate.

Those delays mount up. The Minister may say that payment may be made on account. Nonetheless, anyone who has had to handle housing benefit will know that that is not a satisfactory way forward, in particular if there is doubt about the nature of employment. If a payment on account is made, one cannot subsequently recover it. The local authority is then in difficulties with its district auditor. I would counsel the Minister against encouraging local authorities to go down that route as an easy option.

What are we now seeing? Perhaps we shall cover the issue more fully during the debate on clause stand part. First, we are seeing increased risks of delay in paying housing benefit in particular as local authorities are being asked, rightly, by the Government to investigate more thoroughly to eradicate fraud. Secondly, we are seeing payment of housing benefit four weeks in arrears. Thirdly--it is a point that I do not believe has been mentioned--the Government propose to send out to compulsory competitive tendering the payment of housing benefit. If the tender is successfully won by a private firm it will introduce temporary chaos into the system, thus increasing the likelihood that housing benefit will be delayed and the tenant will risk eviction through arrears. Yet at the same time that that is happening, the Government seek to allow landlords to evict tenants after eight weeks instead of 13.

We all agree, surely, that tenants need protection from eviction where the cause of that eviction--for example the non-payment of rent--is through no fault of their own. The amendment goes some way towards that protection. It allows a tenant to have his eviction delayed where there is a prospect of housing benefit being paid to cover arrears in rent; or where he may expect other payments, such as compensation, to have the same effect.

We need this amendment because at present even if the courts believed that that eviction is unfair they cannot stop it. They have to grant possession. It is mandatory. The amendment allows that mandatory provision to become discretionary in the light of the circumstances: that is, that there is a reasonable possibility for the tenant to pay. I warmly support the amendment.

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