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The noble Lord said: The amendment is an attempt simply to tighten up the wording of this section of the Bill. The clause is uninformative. It states:

That is absolutely fine. Subsection (4) states:

In fact, if people are going to accept money through the HCA, they need to know in full and complete detail—as I am sure that they probably will in practice—exactly what those terms and conditions are, particularly those that relate to repayment and recovery, which are implied but certainly not spelt out. The wording is inadequate because it does not really require the provision of full details, although I am moderately confident—and the Minister may reassure me—that, with the actual business of making a financial contract between the HCA and a recipient, all the terms and details of that contract will be spelt out in detail. But that is not necessarily so, from what we read in the Bill. I beg to move.

4.30 pm

Baroness Andrews: I am grateful to the noble Lord for the explanation. I thought that that was the intent behind his proposal, because of the changes that would be introduced by the amendment. I understand why he has pressed the point, but I shall explain why we need the flexibility that we have.

The wording of the amendment is largely taken from the corresponding power that was given to the Urban Regeneration Agency in the Leasehold Reform, Housing and Urban Development Act 1993. That provision, by the use of the term “may”, allowed the URA to attach specific terms and conditions when providing financial assistance. This amendment, by changing “may” to “shall”, does not give that necessary flexibility.

Why is it important to have that flexibility? First, Clause 22(1) requires the HCA to obtain the consent of the Secretary of State to the giving of financial assistance, which is taken over from previous legislation. We need flexibility in practice because, when one considers the great spread of RSLs and housing associations—some of them very small and specific, catering for special needs and communities, while others are extremely large operations—we need to be able to cover all eventualities in contractual arrangements that reflect special circumstances, objectives and tasks. Clause 22 allows the necessary flexibility for those terms and conditions to be tailored to the different circumstances in each instance.

The noble Lord asked me whether I could assure him that the contractual arrangements that would be made would specify and address the particular issues—and I can. I am sure that my noble friend Lady Dean has had a lot to do with the contractual arrangements

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with the Housing Corporation and could confirm that they are not entered into lightly and are specific and clear.

The second reason is that we have moved away in drafting legislation from including items that amount to standard terms and conditions that would be enforceable under contract anyway. This is in fact a matter of good practice in framing legislation.

Finally, the agency is accountable to the Secretary of State. That has always been clear. I have just spoken on how it handles the finances; it is expected to account properly for its financial transactions. That, together with the requirement to obtain the Secretary of State’s consent, is the safeguard that we build into the Bill.

I hope that on those grounds noble Lords can rest content that we have done things in an appropriate way.

Lord Dixon-Smith: I am grateful for the explanation. It comes as no real surprise to me, but I am grateful to the Minister none the less, even if I assumed that she would say what she said. Since I can now read that with care and study it to my heart’s content, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clauses 23 to 25 agreed to.

Clause 26 [Financial limits]:

On Question, Whether Clause 26 shall stand part of the Bill?

Lord Greaves: I speak on behalf of my noble friend Lady Hamwee. She is not in her place because she has not yet returned from a conference.

The reason for my opposition to the clause standing part of the Bill is to enable me to question whether it is appropriate for specified amounts of money to appear in primary legislation rather than in secondary legislation, as it states in Clause 26(2) that:

The limit can be increased to £3,000 million. Nowadays people refer to that as £3 billion. I am not sure that it should be, but that is being old fashioned.

Is it appropriate for specified amounts to appear in primary legislation that may last for considerable time, during which inflation may occur? People try to keep inflation down to what is thought to be a reasonable level but some of us can remember when it was over 20 per cent. I am not suggesting it will get back to that level but many people feel that it may run at 4 or 5 per cent for a while. You would soon run away with large amounts of money if inflation stayed at that level for a number of years. That is the basic question.

A subsidiary question is to probe how £3,000 million, or £3 billion, compares with the current borrowing levels of the component organisations of the HCA. It will be interesting to know the amounts if the Minister can give them.



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Finally—this is a more trivial probing—it is not clear how subsections (1), (2) and (3) relate to each other and why they are necessary. Why cannot the Secretary of State simply have the power to make an order stating what the maximum amount is at any given time? It is clear that, at some time or other, the amount will have to be increased if this legislation and the HCA survive for a reasonable time. If the HCA does not survive, the legislation will not have succeeded anyway.

Baroness Andrews: I am happy to respond to this because one needs to explain why it is important to have this in primary legislation. In principle, it is important that Parliament understands what is proposed when one is discussing the borrowing powers of any public agency. This provision has been inherited from the Housing Associations Act 1985 and the limits are set at the same level as those available to the Housing Corporation. It is very much a standard provision for contingency powers. The current level is up to £2,300 million unless the Secretary of State provides for an increase to this limit, by order, up to a maximum ceiling of £3,000 million.

These amounts were increased from those originally allowed in the Housing Associations Act 1985 by the Housing Act 1988. Essentially, the reason for the increase is because the Homes and Communities Agency will be bigger than the Housing Corporation for all the reasons that we know. It does not seem reasonable to expect the new agency to do more than the combined roles of its constituent parts while restricting its ability to borrow to less than one of its constituent parts, so, as I have said, the amounts are those applicable to the Housing Corporation. Retaining access to this amount of borrowing would seem reasonable, given the breadth and wide variety of the work that the agency will undertake. Those limits will provide the scope for the agency to borrow such amounts as it considers appropriate, but it will be restricted to the terms of Clause 23; that is, the agency can borrow only from the Secretary of State or the European Investment Bank over the longer term, or from any person over the short term, in order to manage its finances. We expect amounts such as these to be borrowed over the longer term rather than the shorter.

I hope that clarifies why the clause is there and what it is intended to do, and that the noble Lord will be able to reassure his noble friend that everything is above board.

Viscount Eccles: It seems somewhat odd to refer to an Act from 1985. That Act says,

The value of money in 2008 is not exactly the same as it was in 1985. I would have thought that any modern calculations about financing would have to take into account where we are today and the experience of the Housing Corporation over that intervening period when circumstances have dramatically changed.

Lord Dixon-Smith: I have a slightly different concern. Curiously enough, it is rather a relief to see those limits there. The Homes and Communities Agency is

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going to have a broad spectrum of functions in the property field. It will be able to purchase and sell property. In a sense, if we are not careful, we will be establishing a plc—by which I mean not a private limited company but a government-supported company—with a capitalisation of up to £3 billion. If it was used in that way, that would be quite extraordinary, but I know that that is not the Government’s intention. However, I am not wholly convinced of where the safeguards are, even in this Bill, that will prevent it happening. They may exist, but I am not sure that I detected them in the form in which I have put the question.

Baroness Dean of Thornton-le-Fylde: I hope that the suggestion that the clause does not stand part of the Bill is not pursued. The organisation is going to be huge and it will need some clear traffic lights about how it does its business. It will be a public organisation, although it is going to work with the private sector, so it has that kind of accountability. Clause 2 says that the Secretary of State may, by order, specify a greater amount from time to time. So there is a minimum, but there is also the coverage. To take the whole clause out of the Bill would take away one of the compasses that the new organisation is going to have. It is sound to have that clause in. I question whether £2.3 billion is going to be enough in the future, but I am consoled by the fact that subsection (2) will cover that. The Secretary of State still has to have a handle, even though it is at arm’s length, on an organisation that is going to be investing substantial amounts of public sector funding.

Baroness Andrews: I am grateful for that intervention from my noble friend. We might have had a bit more argument in Committee if we had come back with a greatly inflated attempt to borrow. As the noble Lord, Lord Greaves, says, £3 billion is an awful lot of money, however you describe it—for example, £3,000 million. In answer to the noble Viscount, Lord Eccles, I say that the borrowing limits seem to us to be sufficient. Our assessment is based on the experience of the past 20 years, and there is no need to change the limits; they are proportionate and right. The arguments of the noble Lord, Lord Dixon-Smith, were very sensible in that context. But accountability is built in, not only in how we inherited powers from previous organisations and how they operate but in the set of relationships that we have between the Secretary of State, the corporation and the new agency. Indeed, if the HCA wants to borrow on a long-term basis, it can borrow only from the Secretary of State or the European Investment Bank. Short-term borrowing can come from any person if it should be needed, but it is short-term borrowing only. So we have checks and balances in the borrowing arrangements there, which are very sensible.

4.45 pm

Lord Greaves: I am grateful again for the Minister’s detailed explanations. She asked me to give reassurances to my noble friend, who has now arrived and is in her place; I shall anyhow draw her attention

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to Hansard for what has been said, and she can make up her own mind on whether she is reassured.

Clause 26 agreed to.

Clause 27 [Power to charge for certain activities]:

Baroness Hamwee moved Amendment No. 76A:

The noble Baroness said: First, I apologise to the Committee for arriving late, but I was at a conference about scrutiny.

Amendments Nos. 76A and 104C will not, I hope, need to detain your Lordships for very long. The first of the amendments is about the HCA, while the second is about Oftenant. Both those organisations will be subject to the freedom of information legislation. My amendments seek for reassurance that the charging powers in the two respective clauses will be subject to regulations made under the Freedom of Information Act, which itself sets charges for providing information in the circumstances with which it deals. I beg to move.

Baroness Andrews: It is very nice to see the noble Baroness in her place. I am sure that she drew on the forensic scrutiny of this Committee to impress her conference.

I can give the noble Baroness a short answer on the FOI point. She has drawn attention to the regulations made under the FOI Act, which applied to the provision of information under the Act by public authorities. Those regulations cover how a public authority should estimate the cost of complying with a request, for example, for a piece of information. These regulations include provision as to what a public authority can take into account in determining charges for dealing with an FOI request, and include, for example, how easily or not the public authority could determine whether it held the information, how it could take account of the costs that it expected to incur to locate or retrieve information and so on. These are very sensible principles in relation to charging for the provision of information when responding to a request under the Act.

The regulations will certainly apply to both the new HCA and the regulator, so the noble Baroness’s amendments are redundant in that sense. There are consequential amendments in Clause 87 and Schedule 8, which also provide for the FOI Act to apply to the HCA and the regulator. I hope that she will be satisfied with that.

Baroness Hamwee: I suspected the worst but then, after I had tabled amendments saying that the FOI Act should apply, I found that it did. I am grateful for the Minister’s assurance and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Clauses 28 to 30 agreed to.



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[Amendment No. 77 not moved.]

Clause 31 [Business]:

On Question, Whether Clause 31 shall stand part of the Bill?

Lord Greaves: I query what seems to be the extraordinarily far-reaching nature of this clause. It is very short and reads:

(1) The HCA may carry on any business.(2) In subsection (1) ‘business’ includes undertaking”.

I take it that this has nothing to do with assisting us all in our transition to the next world or wherever we may be going; nevertheless, I am not sure what,

means, why it is necessary and what the drafting purpose is of having it in the Bill. When I read the words,

I am reminded of Clause 3 concerning principal powers, which we debated several days ago. It states:

We had quite a debate about the words “anything it considers appropriate”. Nevertheless, there the HCA is clearly constrained by,

whereas here we are saying that it can carry out any business at all. I am intrigued by this and look forward to the Minister’s explanation.

Lord Brooke of Sutton Mandeville: I share the curiosity of the noble Lord, Lord Greaves. Some years ago, when my wife and I were in Sri Lanka, there was a hotel which had been run by the Dutch for well over 200 years. My wife asked whether she could see the literature advising potential clients of the facilities at the hotel and was given what appeared to be a cricket fixture card. It stated the name of the hotel, which was the New and Oriental Hotel, on the front cover. On the inside page, in the bottom right-hand corner of what I think is known as the centrefold—there were only two pages—was a notice saying, “Prices may be secured on application to the management”. However, the best sentence of all was the one just inside the second page which started with the words, “The New and Oriental Hotel is neither new nor oriental”.

I anticipate the Minister’s response with some curiosity. His fellow Minister, the noble Baroness, Lady Andrews, has alluded to changes in references to the Treasury that are now contained in all legislation. The noble Lord, Lord Howarth of Newport, is, again, unusually not in his place on this occasion, but it looks as though we may be looking at a new form of legislative architecture—a fashion trend within the Government towards minimalism in legislation. I have no problems at all with the nature of it—it may well be a good thing—but I think it is better that it happens with an explanation from the Government rather than by sleight of hand.

Lord Dixon-Smith: Perhaps I may make a simple observation. Clause 31 is the precise reason why, on the previous issue, I raised the relationship to the financial limits.



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Lord Bassam of Brighton: Clause 31 enables the Homes and Communities Agency to engage in any business, including commercial undertakings such as public/private partnerships, but such activities must be in support of its housing and regeneration objects. I can tell good Conservatives who are concerned about this that these powers are modelled on those of the Urban Regeneration Agency, which was established by their own legislation back in 1993.

These powers will be needed to allow the agency to carry on any business, including commercially established partnerships or funds or other such activities currently undertaken by English Partnerships, and to allow the HCA to continue to develop similarly innovative schemes, perhaps with the private sector, to support its broader objects. We do not want to inhibit the activities of the HCA when it works in the commercial field by failing to give it adequate powers. The noble Lord, Lord Mawson, who is not here today, asked of this Bill at Second Reading:

That was a good question. This clause is part of the way that this agency through this Bill is empowered to make it easier. The noble Lord, Lord Mawson, also stated:

I do not think that anyone in this Room would disagree with that. We certainly do not, and this clause, along with Clauses 32 and 46, forms an important part of our empowerment of the HCA to innovate and engage with entrepreneurs and businesses to help deliver its objects.

Will the agency be able to operate any business that it sees fit? No, it is not intended through this provision to authorise trading activity on the open market in competition with private sector operators or suppliers, and the activity must fall clearly within the objects of the agency. So the agency would not be able to open a fast-food restaurant, a new oriental hotel or any other sort of organisation, but the provision is intended to ensure that the agency can secure regeneration purposes and those involving community activity and innovation. That is what this is about. It is not a wider, more sweeping power. I hope that that helps the noble Lord, Lord Greaves.

Lord Greaves: I thank the Minister although I am not sure that that helps. The power seems very sweeping indeed. Time and again we have Ministers who say, “It is not intended to do this or that. We are a benign Government and we have benign Secretaries of State and we do not do things which all you people with your inquiring, occasionally cynical, minds might think might happen”. We are making legislation, which is not for the present Government. The present Government may last for ever, or they may not. Who knows? The response of Ministers that, “We do not intend to do this or that”, goes a certain distance in reassurance, but only that distance, because the legislation will be on the statute book for someone else to come along and perhaps do other things.



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