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Baroness Miller of Chilthorne Domer: I am grateful to the Minister for his reference to exception sites. However, would he make a judgment on their value? He told us what they were, but he did not actually say whether he regards them as useful, very useful or essential. I would be grateful for any such indication.

Lord Bassam of Brighton: They are useful, but I am aware of some statistics and I can see that we have a problem. What we are trying to suggest is that we need flexible means to address the problems. No doubt the Local Government Association rural commission will bring forward some further thoughts as a product of its recent motion.

Tenants of social housing built or acquired by registered social landlords with public funds after 1 April 1997 may qualify for the right-to-acquire scheme under the Housing Act 1996 and be eligible to purchase their rented home at a discount. However, the right to acquire does not apply in areas designated as rural. These are generally small community settlements with a population of 3,000 people or fewer.
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As this is the same coverage as rural exception sites, the social housing on such sites is already preserved for local people in perpetuity.

We already have a range of means in place for preserving new social housing on rural exception sites or provided through Section 106 agreements. The amendment is public-spirited, but it is not necessary in order to achieve the ends that we all seek. I have listened hard to the debate and I think that there is more to do. There are other approaches—I was particularly interested in what the noble Baroness, Lady Maddock, had to say. From personal experience, going round the country and as leader of a local authority with rural communities remote to our major settlement, I can see that this is not an issue that will go away or one that can be left. We are addressing it through current policies.

Lord Borrie: I am grateful to all those who have participated in the debate, which was probably rather longer than Ministers wished it to be. I am particularly grateful to those from the Liberal Democrat Benches who gave varied, I might even say disparate, but certainly balanced comments on the problem. I am most grateful to the Minister for a comprehensive response and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 212 not moved.]

Clause 158 agreed to.

Clause 159 [Exceptions to the right to buy: houses due to be demolished]:

Lord Bassam of Brighton moved Amendment No. 212A:

The noble Lord said: This group of amendments relates to the aim of the demolition notice provisions and is designed to address loopholes in existing legislation. Currently, when tenants know that demolition is likely, they are able to buy at a discount knowing that when the property has to be repurchased using compulsory powers they will be entitled to full market value plus home loss compensation. This adversely affects the financial viability of regeneration schemes.

In another place it was suggested that our original proposals did not deal adequately with regeneration schemes involving the phased demolition of blocks or areas over several years. Tenants in such areas are likely to be aware of demolition plans well in advance and may be tempted to exploit the rules. Stakeholders have also suggested that the existing clauses did not adequately address situations where landlords had compulsorily to purchase from local owner-occupiers, a process that, as most of us will have experienced or observed, may be subject to delays.

We thought that there was force in those points and we have therefore decided to amend the procedure for demolition notices. There will now be a two-stage process. First, initial demolition notices—IDNs—will suspend a landlord's obligation to complete a right-to-buy purchase. Secondly, final demolition notices—FDNs—will terminate any right-to-buy claims and
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prevent any new ones being made. In both cases there will be a prescribed notification procedure that landlords must follow. Notices must set out the reasons for demolition and the effect of the notice served. Landlords must also publicise them locally, both in the local press and on the landlord's website—my notes say "if he has one"; I suppose that most landlords probably now do. But that is an obligation on them.

The initial demolition notices are not capable of extension, although the final demolition notices may be extended on application to the Secretary of State. Either notice can be revoked by the Secretary of State if he takes the view that the landlord has no intention of demolishing the properties.

We therefore propose, first, that an initial demolition notice, valid for no longer than five years and not extendable, may be served, and that will suspend the landlord's obligation to complete the right-to-buy sale. It will not prevent new right-to-buy applications being made but it will provide a breathing space in which landlords can properly develop schemes and, where necessary, follow the statutory compulsory purchase procedures. Tenants' interests are protected. Right-to-buy claims can continue to be made and will be processed as normal so that if a demolition plan fails to proceed, the application can then be completed.

Secondly, final demolition notices can be served. These should be valid for two years rather than 18 months. Final demolition notices will end any existing right-to-buy claims and prevent any new ones being lodged.

A landlord will be able to serve a final notice only if there are no owner-occupiers within the planned demolition area and acquisition of those properties is essential for the demolition plans to proceed, or if there are such properties but binding agreements for the acquisition of the properties have been agreed and/or compulsory purchase orders have been successfully made and the landlord has served notices to treat or has made a vesting declaration in respect of all the owner-occupied properties within the planned demolition area.

That proviso is important. It would be unfair to bring right-to-buy claims to an end and prevent new ones being made in cases where a regeneration scheme, and hence the need for demolition, depended upon the purchase of local owner-occupied properties which may never take place. So, if a CPO is necessary in order for demolition plans to go ahead and the CPO is not confirmed or is quashed by the courts, an IND will cease to have effect.

For tenants who have made a valid right-to-buy claim, and an initial demolition notice or a final demolition notice is served before the transaction is completed, compensation will be available for conveyancing-related expenses incurred before the respective notice was served.
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We believe that the amendments will improve the Bill's original safeguards against exploitation by tenants, while providing sufficient safeguards against unreasonable behaviour by landlords. We hope that we have the balance right; I think that we probably have. I therefore ask the Committee to support the amendments. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton moved Amendments Nos. 212B to 212Y:

"( ) stating that one of conditions A to C in paragraph 13A is satisfied in relation to the notice (specifying the condition concerned), and"
Page 108, line 10, leave out "138A" and insert "138C"
Page 108, line 14, leave out "18" and insert "24"
Page 108, line 16, after "a" insert "final"
Page 108, line 17, leave out "18" and insert "24"
Page 108, line 18, leave out from "(4)" to end of line 19 and insert ", but this is subject to—
(a) compliance with the conditions in sub-paragraphs (6) and (7) (in a case to which they apply), and
(b) the provisions of paragraph 14(1) to (7)."
Page 108, line 24, after "a" insert "final"
Page 108, line 27, after "a" insert "final"
Page 108, line 44, after "any" insert "final"
Page 108, line 45, leave out "and" and insert "unless extended or revoked under paragraph 14,"
Page 108, line 48, at end insert—
"( ) that there may be a right to compensation under section 138C in respect of certain expenditure incurred in respect of any existing claim."
Page 109, line 1, leave out "paragraph 14" and insert "paragraphs 13A and 14"
Page 109, line 3, after "premises," insert "or of a reference to the acquisition or transfer of any premises,"
Page 109, line 4, at end insert—
"13A (1) A final demolition notice may only be served for the purposes of paragraph 13 if one of conditions A to C is satisfied in relation to the notice.
(2) Condition A is that the proposed demolition of the dwelling-house does not form part of a scheme involving the demolition of other premises.
(3) Condition B is that—
(a) the proposed demolition of the dwelling-house does form part of a scheme involving the demolition of other premises, but
(b) none of those other premises needs to be acquired by the landlord in order for the landlord to be able to demolish them.
(4) Condition C is that—
(a) the proposed demolition of the dwelling-house does form part of a scheme involving the demolition of other premises, and
(b) one or more of those premises need to be acquired by the landlord in order for the landlord to be able to demolish them, but
(c) in each case arrangements for their acquisition are in place.
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(5) For the purposes of sub-paragraph (4) arrangements for the acquisition of any premises are in place if—
(a) an agreement under which the landlord is entitled to acquire the premises is in force, or
(b) a notice to treat has been given in respect of the premises under section 5 of the Compulsory Purchase Act 1965, or
(c) a vesting declaration has been made in respect of the premises under section 4 of the Compulsory Purchase (Vesting Declarations) Act 1981.
(6) In this paragraph—
"premises" means premises of any description;
"scheme" includes arrangements of any description."
Page 109, line 6, at end insert "final"
Page 109, line 15, after "a" insert "final"
Page 109, line 22, after "a" insert "final"
Page 109, line 38, after "a" insert "final"
Page 109, line 39, at end insert "final"
Page 109, line 44, at end insert—
"( ) The Secretary of State's consent under sub-paragraph (8) may be given subject to compliance with such conditions as he may specify."
Page 109, line 45, leave out from "notice" to end of line 46 and insert "under paragraph 13 or 14 may be served on a person—"

On Question, amendments agreed to.

Clause 159, as amended, agreed to.

Clause 160 [Right to buy: claim terminated by demolition notice]:

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