Clause
36
Recovery
etc. of social housing
assistance
Amendment
made: No. 112, in clause 36, page 16, line 25, after
‘project)’ insert
‘; and, for
the purposes of this Part, a person provides social housing if (and
only if) the person acquires, constructs, converts, improves or repairs
any housing or other land for use as social housing or ensures such
acquisition, construction, conversion, improvement or repair by
another’.—[Mr.
Wright.]
Question proposed,
That the clause, as amended, stand part of the
Bill.
9.45
am
Sir
George Young:
I refer the Minister to an exchange that
took place on 11 December when the Council of Mortgage Lenders appeared
before us and was exposed to some questioning from the Committee. In
particular, I refer to column 65, which deals specifically with clause
36. Mr. Richard Hughes, the CML representative,
stated:
“On our
reading, clauses 36 and 37 seem to say that the HCA can demand its
grant back and a return on it—we assume some sort of
equity-style return.”——[Official Report,
Housing and Regeneration Public Bill Committee, 11 December 2007;
c. 65. Q102.]
I have to say
that I did not share the CML’s concern, but I will not be
lending any money. It is important that the CML is confident that the
security their members have when they advance funds is such that they
will continue to lend. Has there been any dialogue since that exchange
on 11 December between the Minister’s Department and the CML
that indicates that the organisation is no longer concerned about
clause 36 and that it does not want the amendment it sent to members of
the Committee but which no one tabled—a proposed new subsection
(4)(c) to clause 36, which deals with the recovery of social housing
assistance—and that the sort of difficulties that were envisaged
in the exchange will not, in fact, occur if clause 36 goes through
without its amendment?
Mr.
Wright:
I thank the right hon. Gentleman for that line of
questioning. I do not have the Hansard for 11 December in front
of me, but I seem to recall from my genning up for this debate that the
right hon. Gentleman was extraordinarily helpful to me in respect of
this matter. I believe he realises, because I think he made the point
in December, that the provisions are not, in essence, a change in
policy terms or in the legal framework. He mentioned in December that
the Housing Corporation operates a similar system under the Housing Act
1996, and I believe he agrees that it is not unreasonable to require
repayment of more grant than had been originally understood would go
unchallenged.
On the
direct point about dialogue between officials and the CML, I assure the
right hon. Gentleman that my officials have been discussing the matter
with the organisation. The discussion is ongoing, because we are keen
to reassure the CML of the nature of the clause and subsequent relevant
clauses, and to ease its concerns. I believe that the dialogue has
proved fruitful, and I hope that I have reassured the right hon.
Gentleman in that
regard.
Question
put and agreed
to.
Clause
36, as amended,
ordered to stand part of the
Bill.
Clause
37
Section
36: interest and successors in
title
Question
proposed, That the clause stand part of the
Bill.
Sir
George Young:
I am grateful to the Minister for what he
just said about clause 36. It is a relief to us, and I hope that the
dialogue ends with a happy
resolution.
The CML
also raised a specific problem with clause 37. I quote from the
note that it sent to all members of the
Committee:
“This
section appears to pass on the requirement to repay grants...to
successors in title.”
I
do not think that anybody has any difficulty with that. The note goes
on to
state:
“If this
is the case then security valuations would have to be adjusted to
reflect the obligation of a successor in title to repay grant. This
would mean that current registered providers could all be in breach of
their loan covenants and would impact negatively on the financial
capacity of registered providers going
forward.”
I put the same
question to the Minister as I did on clause 36: is there is a dialogue
on the clause, and has his Department been able to satisfy the CML that
the risks outlined in the passage that I have just read out do not
exist, and that there is no impediment to its continuing to fund
housing
associations?
Mr.
Wright:
Once again, I thank the right hon. Gentleman. He
is right to suggest that my response will be similar to that on clause
36. He will know that the provisions of clause 37 are the same as those
in the Housing Act 1988 and the Housing Act 1996. We are looking into
the CML’s point about how the operation of the determinations
will interact with repossessions and so on. Dialogues are ongoing
between officials and the CML, and they are proving fruitful. We are
trying
to reassure the CML as much as we can, which is having a productive
conclusion. I hope that reassures the right hon.
Gentleman.
Question
put and agreed
to.
Clause 37
ordered to stand part of the
Bill.
Clause
38
Determinations
under sections 36 and
37
Grant
Shapps:
I beg to move amendment No. 6, in
clause 38, page 17, line 25, leave
out ‘as it considers appropriate’ and insert
‘before making such a
determination’.
The
amendment is intended to clarify some vague wording in the clause. Its
purpose is to ensure that the HCA must consult bodies representing the
interests of registered providers of social housing before making a
determination. On page 17, clause 38(2)
states:
“Before making a
determination, the HCA must
consult...
(b)
such other persons as it considers
appropriate.”
The
other day we debated who “other persons” might be. It was
unclear at the time, but the Minister kindly gave some clarification
later in the day. “Other persons” seemed to include
people other than those whom I had suggested would be included, so I
would be interested to know which “other people”
subsection (2)(b) refers
to.
The amendment
would leave out the words “as it considers appropriate”
and insert
“before making
such a determination”,
to
remove the vagueness of the wording and tighten up the fact that there
should be more specific consultation before determination under clauses
36 and 37. Who are envisaged as “other persons” in that
context, and will the Minister consider tightening up the language to
ensure that specific consultation must take
place?
Mr.
Wright:
I suggest to the hon. Gentleman that the amendment
would not really add anything to the effect of the clause. I draw his
attention to subsection (4), which
states:
“The
HCA must, in particular, consult such bodies appearing to it to
represent the interests of registered providers of social housing as it
considers
appropriate.”
The
amendment would leave out “as it considers appropriate”,
and would thus apparently require the agency to consult all bodies
representative of registered providers of social housing, rather than
just those the agency considered appropriate, which would, I suggest,
remove the agency’s discretion as to whom it may
consult.
I know that
the hon. Gentleman says that the amendment would avoid vagueness, but
it would mean that the agency did not have discretion, which would
increase the risk of the agency’s decisions being successfully
challenged due to a failure to consult every single representative
body, including those unaffected by particular determinations. That
could be unwieldy and unnecessarily bureaucratic. I am sure that is not
what the hon. Gentleman intended, although I understand the sentiment
behind the amendment. To avoid that vagueness and ensure that the
agency has a degree of discretion, I hope that he will withdraw the
amendment.
Grant
Shapps:
I understand what the Minister says, and far be it
from me to want legislation that is more cumbersome and bureaucratic
than it needs to be, but I did not understand from his response who the
“other persons” are. May I press him on that
point?
Mr.
Wright:
I am afraid that I shall have to disappoint the
hon. Gentleman. It would depend on the particular circumstances, and it
would be whoever the agency considered
appropriate.
Grant
Shapps:
Will the Minister at least clarify who he imagines
the “other people” might
be?
Mr.
Wright:
We could perhaps take a
particular circumstance and then suggest who might be considered
appropriate. A wide range of circumstances might be covered, and the
agency needs considerable discretion when deciding who to bring
forward. I, therefore, throw the question back at the hon. Gentleman:
if he can suggest a particular circumstance, we could bat it about
further.
Grant
Shapps:
I am still curious, because not a single name or
organisation has been mentioned. I want to clarify whether the Minister
understands the intention of the clause. The other day, it turned out
that nobody in the Committee knew which persons were meant to be
represented under a particular clause. It took some time, and a lunch
break, to calculate the list. I should be grateful if the Minister
could tell us what is meant by “such other persons”, and
if he could provide us with examples of whom they might be. However, if
he cannot but could undertake to find out and tell us later, I would be
happy to withdraw the
amendment.
Mr.
Wright:
I am happy to do that. However,
I repeat that it would be extraordinarily helpful for me, in order to
provide some clarification and to reassure the hon. Gentleman, if he
could suggest particular circumstances in which we might consider the
proposal appropriate.
Grant
Shapps:
I did not draft the legislation, and it needs to
be explained by those who did—the Government. It is not
unreasonable to ask what a particular line in legislation means, and it
is for the Minister to provide that clarification to the Committee,
rather than the other way
around.
The
Chairman:
Order. We cannot go on like this for too long.
We have reached the point when either the amendment must be pressed or
withdrawn. Having said that, I shall allow the Minister to reply one
more
time.
Mr.
Wright:
One of the groups that would usually be consulted
is the National Housing Federation, but there would be others, too. I
hope that reassures the hon. Member for Welwyn
Hatfield.
Grant
Shapps:
I should be grateful if the Minister would
send me a letter with further details about the matter, but, taking
your advice, Mr. Benton, I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
38 ordered to stand part of the
Bill.
Clause 39
ordered to stand part of the Bill.
Clause
40
Duty to co-operate with Regulator
of Social
Housing
Question
proposed, That the clause stand part of the
Bill.
Sir
George Young:
I think that clause 40 is the first part of
the Bill where the regulator of social housing is mentioned. We will
have a much more substantive discussion about his role later on. This
is rather like Beethoven’s opera, “Fidelio”, in
which the hero does not appear until the second act. However, can the
Minister, who has announced the chief executive of the HCA, say
anything about who the regulator is? Has he been announced? If not, how
far have the Government got in the process of appointing
him?
The clause states
that the HCA must co-operate with the regulator. At present, the
regulator and the investor share the same building. Is it envisaged
that the HCA and the regulator will be co-located, or that they will be
separately accommodated? Furthermore, will the Minister shed some light
on clause 40(2), which states that
“the HCA must consult the
regulator on matters likely to interest the
regulator.”?
What does
that mean? We are imposing a statutory duty on the HCA, and in fairness
to it we should shed some light on what information it will be legally
obliged to pass on to the
regulator.
Mr.
Wright:
The process of appointing the regulator is
ongoing, but when we come to part 2 of the Bill, I might be able to
update the Committee on progress. As for co-location of the agency and
the regulator, that is an operational decision, but we do not intend
that there should be a physical separation as well as an organisational
separation.
10
am
The right hon.
Gentleman’s third line of questioning was about the
circumstances in which there would be co-operation between the
regulator and the agency. That is crucial, because, as he rightly said,
we have previously had a merging of the regulatory and investment
functions. The regulator will be concerned to see that registered
providers are responsive to tenants and that their businesses remain
viable, because that will help to raise standards for tenants.
Crucially, it will need to understand the stresses of business,
particularly the ability to borrow money.
As the investing body, the
agency will be also be interested in the ability to borrow money, and
will need to have an understanding of such matters when making
investment decisions. It would be sensible for the agency to consult
the regulator when developing its investment policies to understand the
overall ability of registered providers to deliver. It is in
everyone’s interests to ensure that the capacity and delivery
capability of the sector is advanced as much as possible. In short, a
close dialogue will be needed, while the regulator should maintain a
clear independence, as has been set out and universally acknowledged. I
hope that reassures the right hon.
Gentleman.
Sir
George Young:
Does the Minister propose
to codify or clarify exactly what the relationship between those two
organisations should be? At the moment, the measure says simply
“must consult”, and the Minister has been good enough to
outline the sort of information that ought to be exchanged. Should not
that be formalised in some way, so that both partners in the new
relationship know exactly what they are obliged to tell the other
about?
Mr.
Wright:
Yes, the right hon. Gentleman makes a good point.
We anticipate that there will be a memorandum of understanding between
the agency and the regulator to codify such issues as much as possible.
I hope that reassures him.
Question put and agreed
to.
Clause 40
ordered to stand part of the
Bill.
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