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Lord Goodhart: I am grateful to the Minister for explaining the purposes of paragraphs 2 and 6(1)(b) of Schedule 6. I understand the reasoning behind paragraph 6(1)(b). I do see how the explanation of paragraph 2 fits in with its wording. One must have premises which are divided between two or more freehold owners, one of whom owns a part of the building which is itself self-contained. Amendment No. 69 envisages that there is a self-contained building structurally detached which is divided into two or more self-contained parts which are vertically divided.

The only meaning that I can give to paragraph 2 is that where that set of circumstances arises the right to manage cannot be exercised. That seems to be a long way from the Minister's explanation. I believe that paragraph 2 needs to be looked at again. I understand and support the objective, but I do not see how the paragraph achieves it.

Lord Whitty: As to local authority leaseholders, the various activities to improve the management of local authority estates include provision for leaseholders as well as tenants. I cannot give a precise answer to the question posed by the noble Baroness, Lady Hamwee, but of the million or so leasehold flats there are probably 200,000 council leaseholders. I cannot say how many of them would be in blocks or estates where

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the majority were leaseholders and, therefore, might qualify. The number would be relatively limited. Nevertheless, in those areas the conflict to which the noble Lord rightly refers between those who exercise the right to buy council property in some form or another and those who remain tenants of the council still exists. However, to provide an additional right to leaseholders without a parallel provision to protect the tenants in a situation where the latter are in the minority greatly complicates that conflict.

We seek to pursue this entirely within the local authority management system rather than borrow something which exists in the private sector and transplant it into the local authority sector. The complications which would arise and the additional conflict created underline that.

The noble Lord, Lord Goodhart, referred to paragraph 2 of Schedule 6. That paragraph means that if the freehold is split into two or more self-contained parts the RTM will be exercised for each separately. If the parts are not self-contained one can lump them together and exercise the RTM across all of them. The reason for referring to the scams following the 1993 Act is that one moved from the second to the first and thereby avoided any right to manage. That is the loophole that we were trying to avoid with these provisions. It might be helpful to the noble Lord if I were to spell it out in more detail with cross-references to the texts of the 1993 and 1996 Acts. What is intended might then become clearer to him, and probably to me.

Lord Goodhart: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 91A not moved.]

Lord Whitty moved Amendment No. 92:

    Page 79, line 25, leave out paragraph 5.

The noble Lord said: Amendment No. 92 is another of those very rare Government amendments to which my noble friend Lord Bach referred earlier. Together with Amendments Nos. 99, 101 and 108, it seeks to remove the prohibition in the Bill on exercising the right to manage where the freehold has already been purchased by an RTE company under the requirements of Chapter II of Part II of the Bill.

The amendments also remove the bar which would prevent RTM continuing where a separate company is used as the RTE company. Leaseholders would therefore be able to have separate RTM and RTE companies for the same premises after the enfranchisement had taken place. I believe that is also the intention of Amendment No. 102, which has been tabled by the noble Lord, Lord Goodhart. Having looked at the matter again and after discussing it with the noble Lord and others, we thought it sensible to pursue the amendment. I beg to move.

Lord Goodhart: I greatly welcome these amendments. A significant objection to the Bill was that RTM and RTE could not co-exist. That would mean that someone who was a member of an RTM

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company but was not prepared to join an RTE company because of the cost implications would have had to give up the right to be involved in management. The co-existence of separate RTM and RTE companies may make administration a little more complicated, but that is not enough to override the injustice to those involved in management who would have been forced out of that involvement under the original proposal.

Lord Kingsland: I also support these amendments for the reasons given by the noble Lord, Lord Goodhart.

On Question, amendment agreed to.

[Amendments Nos. 93 and 93A not moved.]

Schedule 6, as amended, agreed to.

Clause 70 [RTM companies]:

Lord Kingsland moved Amendment No. 94:

    Page 30, line 4, leave out ("a") and insert ("an").

The noble Lord said: The Committee will have observed a large number of amendments in my name proposing that the Bill should refer to "an" RTM company rather than "a" RTM company.

When the Bill was first proposed, I feared that the Government would try to find some suitable name in keeping with their modernising culture such as "stakeholder co-operative". It was, therefore, a relief to find that the corporate vehicle for the new right would be simply a right-to-manage company.

Your Lordships will, however, remember the fashion that gripped companies during the 1970s of turning their names into initials. The British Tube and Rubber Company turned into BTR; International Business Machines became IBM; the British Oxygen Company turned into BOC. It was thus, I suppose, inevitable that, by the turn of the century, the Government would decide to call these management companies RTM companies.

I submit that one naturally speaks of "an" RTM company rather than "a" RTM company. I therefore commend the various amendments which seek to make this phonetic correction. I beg to move.

Lord Goodhart: Those of us who sat through debates on the House of Lords Bill will recognise this as the amendment of the noble Earl, Lord Ferrers. I thought that "a" hereditary Peer was correct and so we opposed the amendment when it was taken to a Division during the course of the proceedings on that Bill. On this occasion, I entirely support the noble Lord, Lord Kingsland.

7.15 p.m.

Lord Whitty: Faced with a combined opposition on the issues of syntax, I fear that, whatever the merits or otherwise of the amendments of the noble Earl, Lord Ferrers, under a different piece of legislation, that at least had the merit of relating back to the origins of the language as to whether we were speaking Norman French or English, which is always a matter of concern within this House. This issue relates to whether we take

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the full name of the company or the initials of the company and the pronunciation of the initials. I note that the noble Lord, Lord Kingsland, is disparaging of the tendency during the 1980s to change the names of organisations to their initials. Indeed, I remember myself changing the name of the General, Municipal, Boilermakers and Allied Trade Unions into the GMB. I thought that was an improvement--it certainly saved on the word processor, if we had them in those days.

In this case we refer to "a" right-to-manage company, which must be correct. When we reduced it to RTM we are referring in reality only to a right-to- manage company. To attach the "an" to R, which is not even a vowel, is putting the spoken word above the written word. We and the parliamentary draftsman are concerned with the written word. I hope therefore that the noble Lord, Lord Kingsland, will not pursue this rather substantial range of amendments, but I must commend his diligence on spotting the point throughout the text of this Bill.

Lord Monson: Before the Minister sits down, when I was a school governor some years ago we installed an ICI ceiling heating system. It was recorded in the minutes as such and we applied for a grant as such. Is he suggesting that we should have said a ICI heating system?

Lord Whitty: As I tried to explain, if one spells an Imperial Chemical Industries system would be "an". Therefore, were we to be legislating on such pieces of equipment, I would readily accept the amendment of the noble Lord, Lord Kingsland. However, we are not. We are legislating on a new entity which begins with "R".

Baroness Hamwee: Does the legislation anywhere provide for a right-to-manage company spelt out in full? The definition in Clause 110 refers to Clause 70, which states:

    "This section specifies what is a RTM company for the purposes of this Chapter".

I do not think we ever call it Imperial Chemical Industries.

Lord Whitty: The answer to that is probably no, except there. I am trying to look at what is normally the definitional part of the Bill. The noble Baroness may have a point, but it does not alter the basic fact that this entity is a right-to-manage entity and not Imperial Chemical Industries.

Lord Kingsland: I am extremely disappointed to hear what the Government have to say. While I am not going to make much of it this afternoon, I fully intend to return to this matter at Report stage, confident that I shall have support from other quarters. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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