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Baroness Hamwee: The Minister cannot always be quite so certain as he is on this occasion. As I said when moving the amendment, it is important that local authorities go on doing useful work in this area. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Clause 22 agreed to.

Clause 23 agreed to.

Clause 24 [The disposal proceeds fund]:

The Deputy Chairman of Committees (Lord Strabolgi): I must advise the Committee that if Amendment No. 91 is agreed to I cannot call Amendments Nos. 92 to 96.

[Amendment No. 91 not moved.]

[Amendments Nos. 92 to 95 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 96:

Page 15, line 39, leave out from ("section") to ("do") in line 40 and insert ("27 below (recovery, &c. of social housing grants) and section 52 of the Housing Act 1988 (recovery, &c. of grants under that Act and earlier enactments)").

The noble Lord said: In moving Amendment No. 96 in the name of my noble friend Lord Ferrers, I shall speak also to Amendments Nos. 102 to 104 and 108.

Clause 27 refers to the recovery of social housing grants. Clause 28 refers to grants made under earlier powers. In certain situations grants need to be recovered; for example, where an association disposes of a property originally built with grant. For the new social housing grant the corporation already has a power to direct grant to be paid to it or that it should be unrecovered but used for purposes it specifies. We agreed in another place to extend this power to direct unrecovered grants to housing association grants paid under earlier enactments too. Amendment No. 108 replaces an earlier amendment to meet this commitment, which we decided was not sufficiently detailed.

The remaining amendments are of a technical nature to provide for the way in which interest is dealt with on unrecovered social housing grants or housing association grants, extending the corporation's scope to abate or reduce interest payments where grants are re-used by the date the corporation specifies, and to correct minor technical errors in Clauses 24 and 27. I beg to move.

Amendment No. 96 agreed to.

Clause 24, as amended, agreed to.

Clause 25 [Application or appropriation of disposal proceeds]:

The Deputy Chairman of Committees: If Amendment No. 97 is agreed to, I cannot call Amendment No. 98.

[Amendments Nos. 97 and 98 not moved.]

The Deputy Chairman of Committees: If Amendment No. 99 is agreed to, I cannot call Amendment No. 100.

[Amendments Nos. 99 and 100 not moved.]

Clause 25 agreed to.

Clause 26 agreed to.

Clause 27 [Recovery, &c. of social housing grants]:

Lord Williams of Elvel moved Amendment No. 101:

Page 16, line 18, at end insert ("in accordance with guidance which the Corporation shall issue before the commencement of this Part").

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The noble Lord said: In moving Amendment No. 101 it may be for the convenience of the Committee if I speak also to Amendment No. 109, which is perhaps the more important of the two.

Amendment No. 101 invites the corporation to give guidance. The effect of Amendment No. 109 would be to give the corporation the express power, within the principles it determines for applying Section 52(2) of the Housing Act 1988, to direct a registered social landlord which has received housing association grant under that Act to use the amounts specified for the purposes and objects of the landlord set out in Clause 2 of the Bill.

Amendment No. 109 relates to grants paid prior to the enactment of the Bill before the Committee today; that is, under the 1988 Housing Act or earlier enactments. The corporation's powers to recover social housing grant powers enables it to take action when property funded by grant is sold or transferred to a non-social housing use. That is because public finds have been involved. I accept that. I have no problem with the principle that some control must be exercised over the proceeds of sale or the outcome of a new use. However, I should be grateful if the Government could either agree with Amendment No. 101 or at least give a considered response to Amendment No. 109, because we believe it is important that the corporation should observe this principle if the Bill is enacted. I beg to move.

4.30 p.m.

Lord Mackay of Ardbrecknish: The noble Lord has explained the purpose of his amendment. I hope that when I have explained the position he will feel satisfied and be able to withdraw it.

As the noble Lord explained, Amendment No. 101 would require the corporation, when issuing a determination governing the events in which its powers to recover grant under Clause 27 are exercised, to do so in accordance with guidance issued before commencement. The corporation, as a matter of course, consults before it issues determinations. It may help if I explain to the Committee how it intends to proceed in this case.

The corporation is planning a staged approach. The bidding guidance will draw bidders' attention to Parliament's general intention in introducing the new social housing grant regime. That will be issued around the end of August. The corporation then aims to consult on the various determinations that need to be in place in the autumn so that all the details can be agreed in time for the introduction of social housing grant from 1st April 1997. It would seem unnecessary to require two statements of the principles that the corporation would adhere to--both guidance and a determination. Moreover, the guidance would have to be issued before commencement and could not therefore be altered to take account of any consultation process.

Amendment No. 109 would provide that if the corporation requires an association to use amounts of unrecovered grant for purposes it specifies, these amounts must be used in pursuance of the landlord's purposes and objectives. Those would be in accordance with Clause 2 of the Bill. While I understand the noble Lord's concerns that associations do not use unrecovered grant for other,

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perhaps non-housing purposes, I do not believe that that would be possible in any case. Associations must act in accordance with their permissible purposes and the corporation could not direct them to act outside those purposes, whether in their use of grant or of unrecovered grant. With that explanation I hope the noble Lord will see that his fears are already covered and that he can withdraw the amendment.

Lord Williams of Elvel: I am most grateful to the noble Lord for his response. This is a problem. However, what the noble Lord has said has covered my substantial concerns. I shall have to read Hansard and decide what precisely we should do at the next stage. However, on balance, at the moment, I think I am able with a clean conscience, if I may put it in that way, to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mackay of Ardbrecknish moved Amendments Nos. 102 to 104:

Page 16, line 38, leave out from first ("the") to second ("paid") and insert ("principal amount is applied, appropriated or").
Page 16, line 42, leave out ("that amount is so") and insert ("the principal amount is so applied, appropriated or").
Page 17, line 11, leave out ("or") and insert ("to").

The noble Lord said: I have already spoken to these amendments. I beg to move.

On Question, amendments agreed to.

On Question, Whether Clause 27, as amended, shall stand part of the Bill?

Baroness Hamwee: Perhaps I may take this opportunity to ask the Government about the relationship between Clause 27 and Clause 18(3). Under Clause 18(3), the corporation, in making a grant, can provide that the grant is conditional on compliance with such conditions as it may specify. Clause 27 refers to powers which are exercisable in such events as the corporation may from time to time determine in connection with a grant received by a registered social landlord. Although one or two parts of Clause 27 may not be covered elsewhere, it seems to me that the two clauses cover quite similar ground. I should be grateful if the Minister could explain the need for going into quite so much detail in Clause 27. The clause is permissive in nearly every part. It says that the direction shall specify interest, but no doubt the corporation could specify a rate of interest of nil per cent.

Lord Mackay of Ardbrecknish: The provisions of Clause 27 are not new. They are similar to those in Section 52 of the Housing Act 1988. The existing provisions apply to housing associations in respect of housing association grant. The new clause applies these rules to registered social landlords in receipt of social housing grant.

The provisions are perfectly sensible. Their purpose is to apply controls to the use of public funds. After certain events determined by the corporation, the corporation may reduce or suspend any grant which it pays to the landlord or recover grant which it has already paid. The main addition to the new clause is the provision of a power for the corporation to direct

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landlords to use unrecovered grant for purposes which it specifies. Clause 27 specifically covers the recovery of social housing grant whereas Clause 18 concerns the terms on which the grant is given. That is the distinction between the two.

I could go on at some length explaining what the clause does but I think it is easier to answer the noble Baroness's question quickly. If she is still not satisfied, perhaps she could write to me or talk to me about it. Clause 27 specifically covers the recovery of social housing grant whereas Clause 18 concerns the terms on which the grant is given. There is a distinction between recovery of a grant and a grant being given in the first place. I hope that helps to explain the matter to the noble Baroness.

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