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Earl Peel: My Lords, unfortunately, I was unable to be present in the Chamber during the Committee stage. However, I should just like to say how much I welcome the positive steps that the Government are taking in implementing the commitments that they made under the rural White Paper. It seems to me that identifying settlements in the countryside where the right to buy will be restricted is a sensible move. Indeed, I know that it has wide-spread support.

However, I have a degree of concern in that respect which has already been addressed by my noble friend Lord Stanley of Alderley. I just wonder whether the Government are prepared further to consider the matter. Clearly, low-cost housing depends to a degree on the willingness of owners to allow land to be sold at rates below market value. I am quite certain that it would cause very considerably grievance if such properties were later exempted from the exclusion of the right to buy, without those involved being properly consulted and the matter fully debated.

I appreciate that the Government have introduced the amendment. However, I doubt whether it goes quite as far as it ought to. I am a little confused with these amendments. I must admit that I do not understand how they all fit in together. Nevertheless, I understand the principles behind them. I realise that they seek to find ways of ensuring that we can proceed in the best possible way, given the excellent lead that the Government have already set.

Personally speaking, I am not particularly attracted by the idea that, once settlements have been designated, they should be so for all time. After all, as we all know and appreciate, the countryside is a dynamic place. There will inevitably be times in the future when the Government will see fit to allow changes to be made. Moreover, I have to say that I am really not a believer in the insistence that any proceeds derived from such a sale should necessarily be reinvested in the same source. I believe that that can lead to imprudence and I am quite certain that my noble friends on the Front Bench will resist it rigorously, and they would have my support.

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Amendment No. 221C, concerning approval by resolution of Parliament, is something which we ought to look at very carefully indeed. I am certain that, if dwellings are to be redesignated, the resolution should be subject to approval of both Houses of Parliament. I feel certain that that will be welcomed not just by local communities but also by local councils and indeed by those owners who have allowed land to go forward at a cheaper rate than it might otherwise have done. I hope, therefore, that my noble friends will consider this issue very seriously indeed. The Government have gone so far in this matter--and I congratulate them on that--that I think it would be a pity to spoil it for a ha'p'orth of tar.

Baroness Hamwee: My Lords, our concern from these Benches is that the rural exemption should be as good and effective an exemption as it can be. I will not say more, given the hour.

Earl Ferrers: My Lords, my noble friend Lord Peel may find this a little complicated because of all the amendments--I dare say he is not alone--but we are dealing with one subject.

I apologise to your Lordships for the fact that it was not possible for me to put down Amendment No. 217A earlier. My right honourable friend the Minister for Housing had already written to my noble friend Lord Shuttleworth telling him of our intentions. My noble friend is, of course, the chairman of the Rural Development Commission, and the letter was copied to those noble Lords who had expressed an interest in the matter.

I hope that the amendment deals with most of the concerns that your Lordships have expressed and that your Lordships will consider it a better amendment than those which your Lordships have been kind enough graciously to put down.

Perhaps I may say what we have tried to do. Clause 17 allows the Secretary of State to designate rural areas where the new right to acquire will not be allowed to operate. We have published a consultation paper explaining the general approach which we propose to take in England, using a settlement population of 3,000 as our guideline. We are now consulting on the details for all the counties of England, and on the proposals for Wales. We shall listen carefully to the special cases for the exclusion of larger settlements with equally good claim.

I recognise the concerns about the arrangements for changing our rural exemptions. That is why we are proposing Amendment No. 217A which will require the Secretary of State to consult the local authorities which are affected as well as the representatives of social landlords before any designation is removed. Local interests will be warned of any proposed changes before an order is laid before Parliament.

As my noble friend Lord Mackay of Ardbrecknish made clear in Committee, if a settlement's population goes over the 3,000 population mark, tenants will not suddenly gain the new right to buy. That would only happen if the rural designations were changed. It would

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be quite absurd if all of a sudden when five more people came into a village, taking the population to over 3,000, everyone suddenly acquired the right to buy. Once the designation is there, it is reckoned to be there for some time. We cannot rule out the possibility that a revision may be necessary where a small village grows into a new town over the years or where mistakes have been made. Obviously, if that happens, it must be remedied. Clearly the situation is grossly changed if a Milton Keynes is suddenly made to grow up around a small village. Once the rural exemptions are made, we do not intend continually to revisit them. For the great majority of settlements the exemptions are never likely to change. My amendment ensures that any changes will now also have to be consulted on before an order is laid before Parliament.

The noble Lord, Lord Carter, wondered what the timetable was for designation of rural areas. The position is that the consultation process will finish at the end of the month and we shall then need to consider the responses. We hope to lay the orders shortly afterwards.

Taken together, Amendments Nos. 212, 213, 215, 219 and 220 in the name of my noble friend Lord Peyton would remove the Secretary of State's discretionary powers to designate rural areas and make it a requirement to designate. This obligation implies that rural designations will have to be continually reviewed and updated, which is obviously undesirable.

In our consultations we are using a 3,000 population guideline. I do not think that it should be written on the face of the Bill, as Amendment No. 220 in the name of my noble friend Lord Peyton suggests. That would prevent our having the flexibility we need in order to deal, for example, with the different circumstances in Wales, where a different approach is needed. The 10,000 population limit in the noble Lord's amendment, Amendment No. 219, would also cause the same difficulty and would limit the scope to correct any errors.

In our consultation exercise we invited comments on special cases. Amendment No. 220 in the name of my noble friend Lord Peyton, allows special cases where the Secretary of State is satisfied that there is likely to be particular difficulty in securing land for replacement properties. Replacement properties do not only have to be newly-built properties. Sale proceeds can be used to buy existing properties on the open market. My noble friend's amendment would limit our discretion to deal with special cases, on whatever grounds they may be made.

Our proposals for the rural exemption will protect small rural villages where replacement could be particularly difficult. Our method will allow a certain degree of flexibility to take account of the specific problems of certain areas. In my Amendment No. 217A we are proposing that the Secretary of State must consult before a designation is removed.

Amendments Nos. 218 and 221 standing in the name of the noble Lord, Lord Carter, and my noble friend Lord Stanley of Alderley, and Amendment No. 221C, which stands in the name of the noble Lord, Lord Carter, propose in slightly different ways that any subsequent

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changes to the rural designations would be by affirmative resolution. We always have this argument. Whenever anyone suggests that something should be done by a negative resolution everyone jumps up and says that it ought to be done by an affirmative resolution. The fact is that a negative resolution is as debatable as an affirmative resolution. If everything is put into an affirmative resolution, not only does it take up the time of Parliament but it also makes having a negative resolution rather absurd. Obviously, certain things have to be done by affirmative resolution. However, I do not think that is so in this particular case because it is not expected that there will be many alterations. In any case, if it were a negative resolution procedure, it could still be debated. The nature of these provisions is consistent with the use of negative resolutions and it has been endorsed by the Delegated Powers Scrutiny Committee.

If we were to use a positive resolution, it could raise the curious spectre of hybridity. Your Lordships may think that that is curious, and up to a point so do I, but apparently that is a fact. Hybrid procedures apply only to affirmative orders. They mean that one person who is affected can pray against the order. One merely looks back a few years to the Aircraft and Shipbuilding Industries Bill. That was of a slightly different character, I agree, but it involved the hybridity issue and we all got into a muddle--we did not get into a muddle; the noble Lords opposite did so. They were the Government, and they walked into the mud. I suggest that we do not do so over this issue.

Amendment No. 217, also in the name of the noble Lord, Lord Carter, and my noble friend Lord Stanley is concerned with the use of sale proceeds. The noble Lord said that my noble friend Lord Mackay had failed to address the point on the last occasion. I am sure that, if he failed to address it, it was merely because he was anxious to address all the other points so copiously and correctly that that one happened to escape him.

Perhaps I may explain how we envisage the Housing Corporation using its power to determine the use of the disposals proceeds fund, because it is an important point.

My noble friend Lord Peel said that he did not want the sales recycled necessarily in the same place. I think I know what he means; and I think that I agree with him if by "the same place" one means physically, almost in juxtaposition with the existing sale. We expect that sale proceeds will normally be recycled in the same local authority area. But there needs to be some flexibility in order to take account of circumstances where more social housing is not a local requirement. Replacements will have to meet local priority needs. Associations will have to inform local authorities of all sales and they will be obliged to consult the local authority when deciding on the type, location and nomination arrangements for replacements. If the agreed need is for replacements in a particular area, whether that is a rural or urban area, that is where the sale proceeds should be directed.

I hope that my noble friends will understand that. For instance, a piece of land might have been given by a forebear many years ago. If the housing associations

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were to sell some of those flats, it might be imprudent, unnecessary and actually wrong to provide the replacement right next door. The point is that this system will allow people to purchase their houses and to become owner occupiers. The system then allows that money to be recycled again into social housing where that social housing is most appropriately required.

I hope that with that explanation noble Lords will come to the conclusion that on the whole my Amendment No. 217A is a smashing amendment and will resolve the problems that noble Lords have expressed. We have to be careful not to confuse the matter with too many straitjackets and legalities.

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