Clause
94
Financial
assistance
Mr.
Wright:
I beg to move amendment No. 178, in
clause 94, page 40, line 13, at
end insert ‘or giving a guarantee or
indemnity.’.
This
is a technical amendment that aims to draw a clear distinction between
the two types of financial assistance that the regulator can give.
Under subsection (1), the regulator can give financial assistance for
research, guidance, best practice or
for
“facilitating the
management of social housing by
tenants.”
In practice,
that gives the regulator powers to run programmes similar to the
innovation and good practice programme and the tenant empowerment
programme, which are currently run by the Housing Corporation.
Financial assistance under subsection (1) does not require the
Secretary of State’s
consent.
Under
subsection (3), the regulator can give financial assistance to a
registered provider by way of a loan, a guarantee or indemnity and only
with the consent of the Secretary of State. That type of financial
assistance is intended to support a provider in serious financial
difficulties through short-term provisions, while longer-term plans are
put in place. Given the large sums of money and the difficult
circumstances that are likely to
be involved, Secretary of State consent with Treasury approval is an
essential
safeguard. At present,
subsection (2) allows financial assistance to be given by grant, loan,
defraying expenditure
or
“in any other way
except purchasing loan or share capital of a body
corporate.”
The amendment
will further limit how assistance can be given under subsection (2) to
prevent the
regulator
“giving a
guarantee or
indemnity.”
That is an
additional protection to ensure that the powers of the clause cannot be
used inappropriately. We cannot foresee a circumstance in which a
guarantee or indemnity would be an appropriate way to fund research,
guidance or best
practice.
I hope the
Committee will accept the
amendment.
Amendment
agreed
to.
Clause 94,
as amended,
ordered to stand part of the
Bill.
Clauses
95 to 102
ordered to stand part of the
Bill.
Clause
103
Direction
to the
HCA
Mr.
Wright:
I beg to move amendment No. 179, in
clause 103, page 42, line 21, at
end insert—
‘( ) A direction
may not prohibit grants to a registered provider in respect of
discounts given by the provider on disposals of dwellings to
tenants.’.
The
clause enables the regulator to direct the Homes and Communities Agency
not to give financial assistance under clause 22 to a registered
provider. The amendment will qualify that for financial assistance in
respect of a repayment to registered providers of the discount that
they are obliged to provide when they sell a property to a tenant who
is exercising the right to acquire, or which they choose to sell to a
tenant who had the right to acquire in respect of a different property.
The right to acquire applies to almost all social housing owned by
registered providers for which grant has been paid after
1997.
Without the
amendment, the registered provider would be obliged to sell at a
discount without being reimbursed where one of the specified events in
clause 22 has occurred. Reimbursement has been a principle of the right
to acquire since it was introduced in the Housing Act 1996 and that has
been the clear understanding of grant recipients when applying for and
receiving social housing and other grants. At present clause 22 gives
the agency simply the power to make such grants. We will be tabling an
amendment to part 1 to impose a duty on the agency to repay the
discounts on such disposals, just as there is a duty on the Housing
Corporation to pay such grants under sections 20 and 21 of the 1996
Act. This is an important, yet technical, amendment, which clarifies
matters regarding financial assistance and I hope that hon. Members
will accept
it.
Amendment
agreed
to.
Clause 103,
as amended, ordered to stand part of the
Bill.
Clause
104
Collection
4.45
pm
Mr.
Wright:
I beg to move amendment No. 180, in
clause 104, page 42, line 26, leave
out ‘relating’ and insert
‘which it has reason to believe is
or may be in the person’s possession and which
relates’.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 181, in
clause 104, page 42, line 29, at
end insert—
‘(1A) A
requirement may be imposed on a person other than the body to which the
document or information relates only
if—
(a) the body has
been required to provide the document or information but has failed to
do so, or
(b) the regulator
thinks that the body is unable to provide
it.’.
No.
182, in
clause 104, page 42, line 30, leave
out subsection
(2).
No. 183, in
clause 105, page 43, line 12, leave
out ‘a’ and insert
‘the’.
No.
184, in
clause 105, page 43, line 12, after
‘provider’ insert
‘to whose affairs or activities the
documents or information
relates’.
No.
185, in
clause 105, page 43, line 13, leave
out second ‘a’ and insert
‘the’.
No.
186, in
clause 105, page 43, line 14, leave
out ‘a’ and insert
‘the’.
No.
187, in
clause 105, page 43, line 23, at
end insert—
‘( ) Proceedings
for an offence under section 104(5) or (6) may be brought only by or
with the consent of—
(a)
the regulator, or
(b) the
Director of Public
Prosecutions.’.
Mr.
Wright:
Amendments Nos. 180 and 181 limit the
regulator’s data collection power. Clause 104 permits the
regulator to collect information relating to registered providers or
other persons. The hon. Member for North-East Bedfordshire will be
pleased to hear that that power is modelled on an existing one that is
available to the Housing Corporation under section 30 of the Housing
Act 1996.
Amendment
No. 180 limits the regulator’s ability to require a person to
provide information or documents which it reasonably believes is in the
person’s possession. Amendment No. 181 limits the
regulator’s ability to require information or documents from
persons other than the registered provider to which the information or
documents relates. The regulator will only be able to ask for
information from such other persons if the relevant registered provider
has not provided the documents or information, or if the regulator
believes that the document or information cannot be provided by the
registered
provider.
As the
consequences of failing to comply with the regulator’s
requirement to provide information under the clause include criminal
prosecution and the exercise of one of the regulator’s
enforcement powers, such as
an enforcement notice or monetary penalty, it is important that those
powers should be no wider than is strictly necessary. As currently
drafted, the regulator’s powers would be wider than those of the
Housing Corporation, which we do not believe is necessary. The effect
of amendments Nos. 180 and 181 is to prevent so-called fishing
expeditions among registered providers for information or documents
relating to that provider, and protect persons other than that provider
from having requests made of them, unless the provider does not have
the document or information, or has been required to provide it and has
failed to do so. The amendments impose on the regulator statutory
limitations that were imposed on the Housing Corporation’s
information collection
powers. Amendment
No. 182 will omit subsection (2), so that the regulator will be able to
ask for the same type of information from profit-making registered
providers as from non-profit providers. It will not be limited to
information relating only to the social housing affairs or activities
of a profit-making provider. That extension to the regulator’s
powers is needed because we now propose that the regulator should be
able to set standards for governance and financial viability for
profit-making registered providers, and to exercise the moratorium
powers in the case of insolvency. The regulator will, therefore, need
the power to require the provision of a wider range of information from
profit-making providers than was previously contemplated in order to
exercise, and as a consequence of exercising, these
powers.
Clause
105 is supplemental to clause 104. It has two main effects: to specify
how clause 104 is limited in regard to legal professional privilege and
bankers’ duty of confidentiality, and to specify penalties for
those guilty of an offence under clause 104. As presently drafted,
clause 105 could not require a banker to breach a duty of
confidentiality owed to a person who is not a registered provider, or a
subsidiary or associate of a registered provider. However, it could
require the banker to breach its duty of confidentiality owed to
registered provider A, for example, if the regulator were seeking
information about registered provider B, even though registered
provider A was not an associate or subsidiary of registered provider B.
The Council of Mortgage Lenders expressed concerns about that
possibility. Amendments Nos. 183 to 186 respond to their
concerns.
The
amendments qualify clause 105 and ensure that, if the regulator
requires a banker to provide a document or information of a banker
under clause 104, the banker can only be required to breach a duty of
confidentiality owed to the registered provider to whom the requested
document or information relates, or to a subsidiary or an associate of
that provider, but to no other person. The effect of the amendments is
to protect the confidentiality of other registered providers, their
subsidiaries and associates—apart from the registered provider
to which the requested document or information relates, and the
provider’s subsidiaries and
associates.
The
amendments thus protect registered providers and other persons from
unnecessary requests, and require the regulator to request documents
and information from the relevant registered provider
first—unless the regulator thinks that the provider does not
have it—before asking anyone else. They also
protect duties of confidentiality owed to people other than those to
whom the request for information
relates. Amendment No.
187 relates to the offences that carry over from the Housing Act 1996
of failing to comply with the requirement for information or documents,
under clause 104, or of altering, suppressing or destroying a document
to which a requirement relates. The amendments will ensure that such
proceedings may be brought only with the consent of the regulator or
the Director of Public Prosecutions. Those provisions are necessary to
prevent fraud or other misconduct from thwarting the regulator’s
reasonable requirements for
information.
The
amendment ensures that, if an exceptional prosecution must be brought
under clause 104, it is brought with the consent of those with an
interest in the case and not anyone else with powers to prosecute. It
will ensure proper consideration of the matter by someone with specific
sector knowledge, such as the regulator, or with the authority and duty
to consider the public interest, such as the DPP, before a prosecution
can take place. It provides a further limitation on a power to
prosecute, which it is hoped will not need to be used, but which is an
important backstop to ensure that the regulator can obtain the
information that it needs to do its job. I hope that hon. Members will
except the
amendments.
Amendment
agreed
to.
Amendment
s
made: No. 181, in
clause 104, page 42, line 29, at
end insert—
‘(1A) A
requirement may be imposed on a person other than the body to which the
document or information relates only
if—
(a) the body has
been required to provide the document or information but has failed to
do so, or
(b) the regulator
thinks that the body is unable to provide
it.’.
No.
182, in
clause 104, page 42, line 30, leave
out subsection (2).—[Mr.
Wright.]
Clause
104, as amended, order
ed
to stand part of the
Bill.
Clause
105
Section
104:
supplemental
Amendments
made: No. 183, in
clause 105, page 43, line 12, leave
out ‘a’ and insert
‘the’.
No.
184, in
clause 105, page 43, line 12, after
‘provider’ insert
‘to whose affairs or activities the
documents or information
relates’.
No.
185, in
clause 105, page 43, line 13, leave
out second ‘a’ and insert
‘the’.
No.
186, in
clause 105, page 43, line 14, leave
out ‘a’ and insert
‘the’.
No.
187, in
clause 105, page 43, line 23, at
end insert—
‘( ) Proceedings
for an offence under section 104(5) or (6) may be brought only by or
with the consent of—
(a)
the regulator, or
(b) the
Director of Public Prosecutions.’.—[Mr.
Wright.]
Clause
105, as amended, ordered to stand part of the
Bill.
Clause
106
Disclosure
Mr.
Wright:
I beg to move amendment No. 188, in
clause 106, page 43, line 30, at
end insert—
‘( ) The
regulator may disclose information to a person acting on its behalf for
a purpose connected with the regulator’s
functions.’.
The
Chairman:
With this it will be convenient to discuss
Government amendment No.
189.
Mr.
Wright:
Under clause
106(1),
“A
public authority may disclose information to the regulator for a
purpose connected with the regulator’s
functions”.
A
public authority is defined in subsection (6) as
“a person having functions of a
public nature (whether or not in the United
Kingdom).”
Subsection
(2) allows the regulator to disclose information to a public authority
for a purpose connected with its own functions or those of the public
authority. That is not a new power. The Housing Corporation has the
power to disclose information under section 33 of the 1996 Act. For
example, the regulator might need to share information with the Homes
and Communities Agency, if the regulator discovers that the provider
has not been using the HCA grant in the way intended, or has concerns
about its long-term financial viability such that HCA investment could
be jeopardised.
The
regulator might need to pass on information to the police, if it
becomes aware of, for example, fraud committed against the provider by
an employee. Furthermore, it might need to disclose information to
other regulators, such as the Charity Commission, where the registered
provider is also a registered charity. Sharing such information with
other regulators might help to reduce the administrative burden imposed
on providers that are regulated by more than one body, and to avoid the
need for both regulators to ask the body for the same, or very similar
information.
Although
clause 106(2) gives the regulator the power to share information with
other public bodies, it might also need to disclose information to
people other than public bodies. The regulator might want to appoint
consultants and other agents in connection with its functions, such as
specialist accountants—I like the sound of that one—or
auditors to carry out an extraordinary order under clause 186, or
housing consultants to assist in an inspection under clause 181. Such
persons acting on behalf of the regulator would need to be able to see
information that the regulator has in order to carry out the tasks
entrusted to them by the regulator. Amendment No. 188 will allow that
to happen.
We recognise that information
sharing by public bodies, such as the regulator, is a sensitive issue.
Clause 106(3) allows either the regulator or another public authority
when disclosing information to impose requirements preventing further
disclosure. The subsequent disclosure of information in contravention
of such a restriction is an offence. At present, clause 106(5) provides
that the maximum penalty on conviction is a fine not exceeding level 3
on the standard scale, which is £1,000. That is the same as the
penalty provided for in section 33(5) of the Housing Act
1996.
Amendment No.
189 means that the regulator will not be able to disclose information
if doing so would breach a statutory prohibition on disclosure imposed
in other legislation. Similarly, it would prevent other public
authorities from disclosing information to the regulator if doing so
would breach a statutory prohibition.
Other legislation may state
that disclosure of such information is prohibited except where allowed
by other enactments. The words in brackets in amendment No. 189 mean
that the regulator or public authorities could disclose information
under clause 106 if other legislation states that disclosure is
possible if allowed or required by another enactment. Clause 106 would
be such another enactment, permitting disclosure in such a case. The
intention is to clarify the powers of the regulator and public
authorities while maintaining appropriate
limits.
The amendments
will allow a sensible onward disclosure when it is necessary for the
regulator to carry out his functions, but enable the regulator to put
further restrictions on subsequent disclosure. They will enable
flexibility of arrangements while preserving the confidentiality of
information that has been provided. I hope that that clarifies the
matter.
Amendment
agreed
to.
Amendment
made: No. 189, in
clause 106, page 43, line 31, at
end insert—
‘( ) The power
to disclose information under this section is subject to any express
restriction on disclosure imposed by another enactment (ignoring any
restriction which allows disclosure if authorised by an
enactment).’.—[Mr.
Wright.]
Clause
106, as amended, ordered to stand part of the
Bill.
Clauses
107 and 108 ordered to stand part of the
Bill.
The
Chairman:
Just before we adjourn, I shall mention that we
have considered Tuesday. If we do sit on Tuesday evening, it will be
from 8 o’clock until 10 o’clock. That is still a matter
for the usual channels, but it is what I am banking on at the
moment.
Further
consideration adjourned.—[Liz
Blackman.]
Adjourned
accordingly at three minutes to Five o’clock till Tuesday 29
January at half-past Ten
o’clock.
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