Yvette
Cooper: The debate on clause 1 has ranged widely, and I
should like to respond to some of the points made.
The hon. Member for Surrey
Heath began by sympathising with me for my seasonal malady. It is
seasonal, although it is provoked by pollen rather than by a virus.
Since hay fever is not yet contagious, he escapes blame. I also assure
him that he need not worry about how close he gets to us.
The hon. Gentleman raised a
series of questions for the Government, which I shall try to answer.
The first was about what he described as an audit of non-departmental
public bodies. My hon. Friends the Members for Liverpool, Walton, for
Wallasey and for Milton Keynes, South-West also referred to the
issue. The officials
in the Office of the Deputy Prime Minister have done an audit of all
the non-departmental public bodies that report to our Department. We
found that none were in the position that has been mentioned. We also
raised with the Cabinet Office the need to co-ordinate across
Government more widely on the issue. We are not aware of any other
bodies that need such powers and do not have them. There may be other
non-departmental bodies that do not need such powers and do not have
them. As I said, we are not aware of any other body that is in this
situation, but I am not in a position to give guarantees for other
Departments, and it would not be appropriate for me to do so. We tried
to examine comparable bodies. For example, we examined the
circumstances of English Heritage and found that having been
established in 1983, it had an express power to
delegate. We need to
be mindful of the warning given by my hon. Friend the Member for
Liverpool, Walton that we should not attempt to create work either for
lawyers or for legislators. Equally, the issue of the Housing
Corporation is significant because, unlike many non-departmental public
bodies, it deals in the financial markets and its operations have
implications for them. Organisations in such situations are different
from other non-departmental bodies, which may not be in engaged in such
financial decisions, which have so many wider ramifications. The
significant point is that when modernising legislation is introduced we
need to ensure that such issues are properly scrutinised.
The second question put by the
hon. Member for Surrey Heath was which decisions required the same
legal underpinning for the past, as well as the section 9 decisions to
which we referred. The issue is about the statutory functions of the
Housing Corporation; it is
not about which kind of biscuits to get for the board meeting. It covers
consents under section 9 of the Housing Act 1996, which requires a
registered social landlord to obtain the consent of the corporation for
any disposal of land under section 8 of the Act, which includes the
placing of charges by lenders as security against a loan and rule
changes for RSLs. For example, if someone does not have a valid consent
to theirrule changes, that could raise questions about
constitutional amendments for the housing association and for decisions
that flow from them. Some of those amendments may be significant while
others may not be. Either way, it is important to have certainty about
those decisions. The
provision may also cover the Housing Corporation’s ability to
appoint members to the board of an RSL that is causing problems and is
under supervision. We would not want those sorts of things challenged
in the court by people who are causing problems within the RSL if it is
already under supervision and needs to be regulated further in the
public interest. In
each of those areas when we have pursued this matter some legal comfort
regarding rule changes might be provided by other legislation, for
example the Land Registration Act 2002, the Companies Act 1985 and the
Industrial and Provident Societies Act 1965. Having looked into that in
some detail, we came to the conclusion that there was insufficient
certainty in relation to the statutory functions for us to expect the
Housing Corporation, the housing associations and their lenders to
proceed on the basis of the appropriate comfort needed for future
decision-making. 5.15
pm The hon. Member
for Surrey Heath asked whether we could publish our legal advice. We
considered that as well because we were keen to be as transparent as
possible. As the hon. Gentleman knows, legal advice is covered by legal
privilege. There may be challenges in court in advance of the
legislation reaching the statute books, and for that reason—and
the precedents that would be created—we concluded that it would
not be appropriate for us to publish that advice. We did, however,
provide a summary of the key points. We relayed the key points to the
Council of Mortgage Lenders when it raised this issue, and I am happy
for officials to provide further advice to the hon. Gentleman on the
issue if he feels that it is important. We made sure that we relayed
the principles of the legal advice we received to the House and to the
Opposition parties in order to allow proper discussion of the
issues. The third
question that the hon. Member for Surrey Heath raised concerned
consequences and the relationship between the Housing Corporation and
English Partnerships. The hon. Member for Wellingborough also raised
the issue and asked whether future legislation would be needed. We
should be clear that we have not taken a decision about the
relationship between the Housing Corporation and English Partnerships.
We are consulting and having a wide debate about that and we have
definitely not made any decision yet about the appropriate way
forward.
If the two
organisations were to merge into a new one, primary legislation would
certainly be required, but it would take time to draw up primary
legislation and to take decisions about the functions that a new body
would have. It would be irresponsible of us to delay the measures in
the legislation until such time as decisions were made, especially as
it may be the case that no legislation will be introduced, or it may be
some time before the legislative opportunity arises. I assure the House
that were it to be the case that new legislation created a new body, we
would ensure that the express power was included as part of that
legislation.
My hon. Friend the
Member for Liverpool, Walton raised a point about not searching for
non-existent problems. Nevertheless, we have made it clear that we must
ensure that all of our non-departmental bodies can function effectively
and appropriately. I welcome the support of the hon. Member for North
Cornwall for clauses 1 and 2. I agree with him that this is timely
legislation which we need to pass in order to address the
problem.
The hon. Member
for Wellingborough raised a series of questions to which I shall try to
respond. He asked whether we could wait longer. As I have already said,
it is not appropriate to do so. He said that the Housing Corporation
was not panicking so we should not legislate in haste, but he would
accuse the corporation of extremely irresponsible behaviour if it
started panicking about this issue. The Housing Corporation and its
lenders have been very responsible in their approach and part of the
reason for the calm and measured tone of their response is that we made
it clear to them from an early stage that we wanted to resolve the
position and would be prepared to introduce legislation, if necessary,
in order to do so. It has proved necessary, and we have responded to
their
concerns.
Mr.
Bone: The Minister just said that the Housing Corporation
was aware very early on that the Bill was coming before Parliament. In
that case, why were they still pursuing until recently the idea of a
general consent under section
9?
Yvette
Cooper: As I said, the Housing Corporation first raised
the issue with the Department in December last year and we had further
discussions and meetings in January and February. We made it clear to
the corporation that we wanted to resolve the situation, but also that
we needed to explore every other avenue of doing so because it was
important not to take up parliamentary time if there were alternative
routes. That is why we asked the Housing Corporation to look further at
issues around general consents, and we looked at them as well. We have
been very clear with the corporation and with the lenders from the
beginning that everyone agreed that the situation needed to be resolved
to provide a secure basis for and proper certainty around future and
retrospective decisions, but that we needed to work out in some detail
with it and other stakeholders how we took the matter
forward.
The hon. Member for
Wellingborough asked whether section 9 decisions could have been
covered by the general consents. It is correct that other decisions
could not have been covered by general consents, as only section 9 of
the Housing Act 1996 on disposal of land provides for general consents.
Therefore, we would not have been able to cover some of the other
issues around regulation, and regulatory and registration decisions
through a general
consent. In addition,
the legal advice was that there was no certainty that a retrospective
consent to dispose of land would be held by a court to be valid; that
even though it might provide some considerable comfort it would not
provide legal certainty. On that basis, we thought it appropriate to
legislate to provide
certainty. We
considered whether section 9 consents were needed at all. In fact, the
Elton review considered this and decided that it was not appropriate to
remove the requirement for a section 9 consent to be given by the
Housing Corporation. One of the issues is that social housing assets
are in part funded by the taxpayer. They are a public investment and
provide an important public service. Therefore, there are significant
questions about the protection of taxpayers’ money and the
public interest if housing associations are able to dispose of assets
that have been part-funded by public investment and by taxpayers. The
hon. Gentleman is welcome to raise the matter as part of a wider debate
about the Housing Corporation and English Partnerships. Obviously, it
would be more fruitful to discuss that wider question, which has far
wider ramifications, in that way rather than trying to debate it within
the scope of this Bill, which has a limited
purpose. My hon.
Friend the Member for Wallasey and other hon. Members asked what had
happened to the lawyers who uncovered the problem in the first place. I
am not able to say what has happened to them, to the many lawyers who I
presume have been consulted over the decades, or to the officials under
this or previous Governments who perhaps failed to consult lawyers when
dealing with the issue on previous occasions. Nevertheless, now that we
are clear that there is a problem, everyone—lawyers, officials
and so on—is working hard to resolve it. My hon. Friend is also
right in saying that we should be trying to prevent court challenges
and unnecessary litigation in the
future. Finally, a
question arose while my hon. Friend was talking about whether
registration of RSLs should be done at board level. In fact, the
registration of RSLs is done not by officers but by sub-committees,
whichis a perfectly sensible approach for the Housing
Corporation to take. Obviously, it is for the corporation to decide
whether that should be done by the main board or by a sub-committee.
The point is that the Bill allows the corporation to take that decision
itself, rather than taking everything through the board. I hope that I
have responded to every question that was raised on clause 1.
Question put and agreed
to. Clause 1
ordered to stand part of the Bill.
Clause 2 ordered to stand
part of the Bill.
Bill to be reported, without
amendment. Committee
rose at twenty-four minutes past Five
o’clock.
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