Clause
197
Content
Amendment
made: No. 264, in clause 197, page 75,
line 11, at end
insert—
‘( ) The action
specified in an enforcement notice may include publishing the notice in
a specified manner.’.—[Mr.
Wright.]
Clause
197, as amended, ordered to stand part of the
Bill.
Clause
198
Warning
Amendment
made: No. 265, in clause 198, page 75,
line 34, after ‘224’ insert ‘,
226’.—[Mr.
Wright.]
Clause
198, as amended, ordered to stand part of the
Bill.
Clauses
199 to 203 ordered to stand part of the
Bill.
Clause
204
Grounds
for
imposition
Mr.
Wright:
I beg to move amendment No. 266, in
clause 204, page 77, line 2, at
end insert—
‘( ) Case 4A is
where the registered provider has failed to pay an annual fee under
section
113(2).’.
The
Chairman:
With this it will be convenient to consider the
following: Government amendments Nos. 267 to
271.
Government
amendments Nos. 273 and
274.
Government new
clause 45—Notifying HCA
(No.2)
Mr.
Wright:
Government amendments Nos. 266 to 271, 273 and 274
and new clause 45 relate to clauses 203 to 212, which permit the
regulator to penalise failures by registered providers with a financial
penalty or fine. Again, and as with similar amendments, the measures
are technical.
The
amendments will allow penalties to be used if registered providers fail
to pay an annual registration fee, require a penalty notice to specify
how that must be paid, and what interest or additional penalty is
payable in the event of late payment. They will allow the notice to
require that the provider publishes information about the penalty. They
explain details of how the penalty and interest is to be paid and
enforced, appeal rights, and the consequences for prosecution of a
penalty imposed for a criminal offence. They also refer to clause 206,
which I shall come to later and which we propose to remove from the
Bill.
The amendments
remove an erroneous reference to clause 232 in the context of combining
warning notices before enforcement action, and require that a copy of
the penalty notice is sent to the Homes and Communities Agency. As I
said, the measures are technical and I hope that hon. Members will
accept them on that
basis.
Alistair
Burt:
The Minister is right—the
amendments are technical. On the other hand, they set out new powers in
the Bill.
Does the
Minister have any idea of the amounts that we are talking about?
Bearing in mind that whatever charges are made in penalties, they will
ultimately find their way back to the tenants of the providers.
Presumably, they will be required to find the money to help the
providers to pay the fines.
Has the Department thought
through any indicative level of fines, so that we know what new costs
are being added? I raise that in the context of the regulatory burden
being imposed. I understand that it is assumed
to be about £15 to £20 per house in the housing
association sector. The Bill might add something like £10 a
house, so it all adds up to a big sum at the end of the day. Are we
talking about indicative fines or about housing associations and
registered providers having to find substantial amounts of
money?
Mr.
Wright:
As the hon. Gentleman is aware, we will discuss
penalty notices in the clause 206 stand part debate. The regulator will
have the power to set the general level of penalty notices for
registered providers. We propose that it should be able to require
financial penalties of no more than £5,000. The point has been
made, certainly on Second Reading, that what we are trying to do is
almost an exercise of naming and shaming rather than financially
penalising registered providers. I should not like penalties to be
imposed because I hope that registered providers will give tenants a
good service, but it is a means by which we can publicise it when
housing services have not been what they should be. So the fines will
be subject to a limit somewhere around the £5,000 mark, but we
will consider that
further.
Alistair
Burt:
The Minister has helped me there but we are talking
indicative rather than penal. That is the sense that we are trying to
get, bearing in mind who is going to pay
ultimately.
Mr.
Wright:
Absolutely, the hon. Gentleman has it spot
on.
Amendment
agreed
to.
Clause 204,
as amended, ordered to stand part of the
Bill.
Clause
205
Imposition
Amendments
made: No. 267, in clause 205, page 77,
line 19, leave out
‘and’.
No.
268, in
clause 205, page 77, line 19, at
end insert—
‘( ) how the
penalty must be
paid.’.
No.
269, in
clause 205, page 77, line 20, at
end insert ‘, and
( ) any interest
or additional penalty which, by virtue of section 211(2), is payable in
the event of late
payment.’.
No.
270, in
clause 205, page 77, line 20, at
end insert—
‘(2A) The notice
may require the registered provider to publish information about the
penalty in a specified
manner.’.
No.
271, in
clause 205, page 77, line 20, at
end insert—
‘( ) The notice
must explain the effect of sections 211(1), (3) and (6) and
212.’.—[Mr.
Wright.]
Clause
205, as amended, ordered to stand part of the
Bill.
Clause
206
Impact
Question
proposed, That the clause stand part of the
Bill.
Mr.
Wright:
As I have mentioned, I propose that the clause
should not stand part of the Bill. It is one of a group of clauses on
the penalty notices that we have just been discussing. It specifies
that
“when the regulator
is considering whether to require a registered provider to pay a
penalty”
it must
consider
“the likely
impact of the penalty on the registered provider’s ability to
provide services.”
We
have just discussed fines of £5,000, and the Government take the
view that that figure is somewhat excessive, and that there should be a
name-and-shame approach. On that basis, I am about to introduce new
clause 46, which will insert an identical clause into the part of the
Bill dealing with compensation to tenants, which, unlike fines, is not
limited to a total of £5,000 and could, therefore, have an
adverse impact on the organisation, if the impact was not fully
considered—something that we wish to avoid. On that basis, I
hope that the clause does not stand part of the
Bill.
Question put
and
negatived.
Clause
206 disagreed
to.
6.15
pm
Clause
207
Amount
Amendment
made: No. 273, in clause 207, page 78,
line 2, leave out subsection
(1).—[Mr.
Wright.]
Question
proposed, That the clause, as amended, stand part of the
Bill.
Mr.
Raynsford:
We have already had a brief debate on the
matter before us, but clause 207 deals with the amount of a penalty
charge. I have a number of points to raise with the Minister about the
thinking behind the clause. First, in subsection (2), a clear link is
made between the amount of a penalty in case 5—in which a
registered provider has given an undertaking and failed to comply with
it—and the maximum amount of fine that a magistrates court could
impose for the relevant offence. That linkage does not apply in any of
the other cases.
We
have been told that the figure of £5,000 stated in subsection
(3) might be subject to reconsideration, because the Government are
anxious that it should not jeopardise a provider’s viability.
However, for many of the larger providers, £5,000 will not
present a serious risk to their viability, and would probably have very
little impact on their thinking. I suppose that my second point,
therefore, is about the concept of proportionality in fines relating to
the size and capacity of the organisation and to its ability to deliver
services. The degree of the offence that has merited the fine does not
appear to be set out in the Bill. Will guidance be given to the
regulator on introducing the concept of proportionality?
Thirdly, the Minister mentioned
compensation to tenants as a further option, in the light of which he
withdrew clause 206, which required the regulator to consider the
impact of a penalty on a provider’s ability to provide services
or on its financial viability. That, of course, raises questions about
the extent to which compensation to tenants should be an overriding
entitlement, owing to the landlord’s failure to provide services
that he ought to, and about whether such a penalty will be considered
in proportion to its possible impact on the viability of an
organisation and its ability to deliver services. There is probably
quite a lot of uncertainty, and scope for some pretty messy decisions,
if greater thought is not given to how the regime will operate. I would
welcome the Minister’s thoughts on that, not necessarily today,
but certainly before the Bill completes its passage in this
House.
Mr.
Wright:
I appreciate my right hon. Friend’s last
point about providing an outline of where I think that this needs to
go. He was extremely kind and gracious on that.
I shall expand on points that I
made earlier in discussion with the hon. Member for North-East
Bedfordshire. The setting of penalties requires a careful balance. It
is quite right that £5,000 could be a very low-level fine for
some large housing associations, but for others it could represent a
significant financial penalty. In any case, the aim of the fine is
explicitly not to bankrupt the provider, or to inhibit in any way the
provider’s social housing activities. I see it as a way publicly
to rebuke the provider for minor problems, and to prevent those
problems from getting worse. There are a range of powers at the
regulator’s disposal should the breaches get worse, to the point
at which it could intervene much more directly. However, I think the
question of balance is
important.
I come back
to one of my favourite parts of the Bill, clause 86, and objective 10
regarding proportionality, which my right hon. Friend mentioned.
Proportionality is important both for objectives and for penalties, and
the regulator will have to have regard to that. On that basis, I will
take up my right hon. Friend’s invitation to write and express
my thoughts more clearly. I hope, however, that I have reassured
him.
Clause 207, as
amended, ordered to stand part of the
Bill.
Clause
208
Warning
Amendment
made: No. 274, in clause 208, page 78,
line 32, leave out ‘, 228 and 232.’ and
insert ‘and 228.’.—[Mr.
Wright.]
Clause
208, as amended, ordered to stand part of the
Bill.
Clause
s
209 to 213
ordered to stand part of the
Bill.
Clause
214
Grounds
for
award
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to take
Government amendments Nos. 275 to
281.
Government new
clause
46—Impact
.
Mr.
Wright:
This group of amendments and new clause 46 relate
to clauses 213 to 222, which permit the regulator to require registered
providers to compensate tenants for the provider’s failures. The
amendments are technical. They require the regulator to take account of
the provider’s financial standing and the effect on services
when issuing compensation notices, a point that we have just touched
on. They require the compensation notice to specify what interest or
additional compensation is payable in the event of a late payment. They
allow the notice to require that the provider publish information on
the compensation; they require the notice to explain how payment of the
compensation and any interest on it are to be enforced, and to explain
appeal rights. They require the regulator to consult the ombudsman
before issuing a pre-compensation notice—that is, a warning
notice—to avoid dual compensation for the same failing. They
also require the regulator to say whether a voluntary undertaking could
be accepted in place of a compensation notice, as per other
powers.
Margaret
Moran:
I share some of the concerns that my right hon.
Friend the Member for Greenwich and Woolwich raised earlier regarding
these issues. In relation to this group of amendments, one concern
could be the length of time it might take for a victim of poor
performance by an RSL to receive their compensation. Will the Minister
also clarify under what circumstances the regulator would accept a
voluntary undertaking rather than compensation? Obviously, that would
impact on whether the tenant’s just demands were granted, with
regard to the kinds of offences that the regulatory body had identified
the RSL as having failed to deal
with.
Mr.
Wright:
I do not want to sidestep the issue, but it will
be up to the regulator to decide how to enforce compensation notices.
My hon. Friend raises an important point about the length of time
involved, and I shall certainly reconsider
it.
As for voluntary
undertakings, I point out to my hon. Friend that, as the clauses and
amendments on enforcement notices and penalty powers suggest, the
regulator will be required to state in a notice whether it will
consider a voluntary undertaking. In many cases it might not, but that
is for the regulator to decide. I shall be frank with my hon. Friend:
it was an oversight that that provision was not also included in the
compensation power. I suggest to her that voluntary undertakings could
encourage a provider to resolve its problem in its own way without the
need for top-down intervention. That would be a good thing and might
help the regulator to ensure that tenants’ concerns are
addressed. I hope that she is reassured by
that.
Question put
and agreed
to.
Clause 214
ordered to stand part of the
Bill.
Clause
215 ordered to stand part of the Bill.
| 
