Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Lucas: Under paragraph 2(1)(a) a contract of employment which offered such benefits would allow them to be paid. I do not believe that there should be any difficulty if they are regularly offered to employees.

Lord Swinfen: What is the position if the point is not dealt with in the contract of employment? It does not have to be, because it could be separate from the contract of employment.

Lord Lucas: I see no other way in which the offer could be made under the schedule, but I shall write to the noble Lord if there is one.

Lord Monkswell: The employee could be issued with a new contract of employment which included those terms. Perhaps I may press the Minister about the power that the Housing Corporation will have to allow payment to members of a housing association. From what the Minister said, we currently have a voluntary system where people are not remunerated or paid or even given expenses. Apparently there is no demand for it according to what the Minister said. Yet the Government say that it may be necessary to recruit people. What is the responsibility of the Government to recruit people into, for example, a voluntary organisation?

6 Jun 1996 : Column 1411

Previous changes that we have seen in what we might describe as public service--whether it be local authority members or magistrates--have required Acts of Parliament to determine their levels of remuneration or the level of expense claims that they may make. Surely it is not just that the power to determine the possible payments for a public service should be vested in the Housing Corporation rather than in parliamentary determination. There seems to be no mechanism whereby Parliament can be involved either by primary legislation or secondary legislation. There is no mechanism for Parliament to be involved in determining what levels of remuneration or expenses might be allowable or whether there should be any. It appears that the power is given totally to the Housing Corporation to determine the matter.

I suggest that it is a big departure from custom and practice in the way that public service has been considered that the power should be vested in the Housing Corporation rather than there being recourse to parliamentary determination. Can the Government respond to that point?

Lord Lucas: It is a matter of judgment. Earlier I quoted the noble and learned Lord, Lord Nolan, in support of the attitude that the Government take that the matter could reasonably be delegated to the corporation. I appreciate that the noble Lord, Lord Monkswell, and other Members of the Committee may believe that the noble and learned Lord does not get it right all the time. On this occasion, we agree with him and are comforted by his agreement with us. It is open to the noble Lord, Lord Monkswell, to take the opposite view but we take our view based on the same evidence before us.

Lord Williams of Elvel: I thank the Minister for his response to the amendments. I understand that he will consider Amendment No. 27 on the making of a loan and let me and other Members of the Committee know what the Government's legal view is. I wish to emphasise to the Minister that the housing association movement is absolutely committed to the principle of voluntarism. There is no question of it wishing to go professional, but housing associations recognise that a basic level of remuneration may be necessary in order to attract certain people to serve as members of the council.

The Minister adduced the report of the Committee on Standards in Public Life in aid of his view. Again there may be disagreement, but our view is that the amendment on the limitation to jury service meets precisely the terms of the Nolan Committee's second report. It reflects the spirit of the recommendations of the Nolan Inquiry. I find difficulty in understanding why the Government seem to leave matters rather in the air. I should have thought that some provision on

6 Jun 1996 : Column 1412

the face of the Bill, perhaps better drafted than the amendment I have proposed, would be right. Perhaps the Minister would care to comment on that point.

Lord Lucas: It is certainly a matter that we shall think about. But there is no possibility of my even hinting to the noble Lord that we might actually agree with him.

Lord Williams of Elvel: A nod, as they say, is as good as a wink.

Baroness Hamwee: It is better to nod.

Lord Williams of Elvel: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 28 not moved.]

Lord Lucas moved Amendment No. 29:

Page 117, line 6, leave out from ("Corporation") to end of line.

The noble Lord said: This amendment concerns the powers which the corporation has to determine what payments or benefits a registered social landlord which is an industrial and provident society or a company registered under the Companies Act 1985 may make. These powers are not new. Under Section 15 of the Housing Associations Act 1985 the corporation currently has the same powers in respect of industrial and provident societies. They are sometimes known as "Section 15 exemptions" since, in effect, they exempt associations from the strict rules of that section designed to avoid conflicts of interest. Section 15 is re-enacted, with amendment, by paragraph 2 of this schedule.

In his second report the noble and learned Lord, Lord Nolan, supports the retention of these powers, but recommends that they should be fully devolved to the corporation to simplify the procedures.

We are still considering the main recommendations made by the noble and learned Lord in that report. But this is a relatively minor matter, and one on which we can agree that the corporation, as regulator, is better placed than we are to determine what exemptions from the general rules as to payments and benefits should be allowed. This amendment therefore removes the requirement for the Secretary of State to approve any such determination. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 30 and 31 not moved.]

Lord Williams of Elvel moved Amendment No. 32:

Page 119, line 36, leave out from ("receive") to end of line 39.

The noble Lord said: The Committee will be aware that I return once again to the provisions of the Companies Act and how they might affect local housing companies.

The Bill as drafted allows the corporation to appoint someone to be a director of a registered social landlord and goes on to allow that person,

    "to require an extraordinary general meeting of the company to be convened within 21 days of a request to that effect made in writing to the directors of the company".

6 Jun 1996 : Column 1413

It is almost unprecedented that one director, as opposed to a group of shareholders, should be appointed by a regulator and then be allowed to call an extraordinary general meeting of a company. Certainly that is not the case, so far as I know, unless the noble Lord corrects me, with any of the regulators of the utilities. It seems a very extraordinary power to include. I hope very much that the Minister will be able to justify it. I beg to move.

Lord Lucas: Paragraph 7 of Schedule 1 provides the corporation with power to appoint a new director to a registered social landlord which is a registered company under the Companies Act 1985. Paragraph 8 of Schedule 1 provides the corporation with similar power to appoint a new committee member to a registered social landlord which is an industrial and provident society.

The purpose of this provision is to allow the corporation to exercise its judgment on when additional expertise or guidance is necessary and to enable the new director to help influence the existing directors to ensure that a registered social landlord is managed in an effective and proper manner.

Amendment No. 32 would prevent a director appointed by the corporation from calling an extraordinary general meeting. This power conferred on a director appointed by the corporation runs parallel to the powers under the Companies Act for shareholders and directors to call an extraordinary general meeting. It does not remove those powers. Rather this specially appointed director can act independently to call an extraordinary general meeting where he believes this would help to achieve the purpose for which he has been appointed--the proper management of the company's affairs. This director is acting in the public interest, which may quite legitimately differ from the interests of individual shareholders.

Extraordinary general meetings will typically be called to discuss the dismissal and appointment of directors. The corporation-appointed director will be concerned to restructure the Board to overcome management problems. Others could try to frustrate him. We cannot prevent this without removing their rights, which we have not sought to do.

What we have done is give the corporation further powers which we shall come to in later parts of this schedule to take more decisive action, if their appointed director or directors cannot get things under control.

I hope that explains to the noble Lord our logic in wishing the director to have these particular powers. I agree with him that it is unusual, though I can think of many instances in corporate practice where a particular investing organisation has been given particular powers through the board of directors or through its shareholding to call an EGM which would not run with the ordinary concept of majority control. This is a device which we feel fulfils the requirements we have in this particular case. We do not believe that it creates any problems under the Companies Act. However, I wait to hear the noble Lord's remarks.

Next Section Back to Table of Contents Lords Hansard Home Page