Housing Bill

HL Deb 11 June 1996 vol 572 cc1577-645

3.19 p.m.

Lord Lucas

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Lucas.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

[Amendment No. 68 not moved.]

Clause 17 [Right of tenant to acquire dwelling: supplementary provisions]:

Lord Stanley of Alderley moved Amendment No. 69:

Page 11, line 17, leave out ("may").

The noble Lord said: I move this amendment on behalf of my noble friend Lord Peyton of Yeovil. I hope that Members of the Committee and my noble friend on the Front Bench will forgive me for intervening on this Bill but I shall do so only in relation to rural housing because I took a passing interest in the subject during the passage of the 1989 Act. However, I should like to put on record at the start the fact that I am extremely grateful to the Government—as, indeed, are the organisations with which I am in touch—for the progress made over the problem of rural housing since the passing of the 1989 Act. I hope that my noble friend will find that the amendments to which I have attached my name are at least helpful, even if he is unable to accept all of them.

Although Amendments Nos. 69, 71, 73, 77, 82 and 83 are grouped together, perhaps Members of the Committee will allow me to address Amendments Nos. 69, 71 and 73 at present. The three amendments tabled in the name of my noble friend Lord Peyton would make it a duty for the Secretary of State to make regulations designating certain rural areas, although he would still have the right to specify the rate of discount.

The amendments are really paving amendments for the substantial amendments, Amendments Nos. 82 and 83, tabled in the name of my noble friend, and Amendment No. 77, tabled in the name of the noble Lord, Lord Carter. It may be better, after I have formally moved Amendment No. 69, if the noble Lord, Lord Carter, introduces his amendment, which is of substantial merit, before we all speak to the whole group of amendments. I beg to move.

Lord Carter

In speaking to this group of amendments I should, first, declare an interest as a trustee of the Rural Housing Trust. However, I should point out that the amendments which are tabled in my name do not necessarily reflect the views of that trust. However, we think it important on this side of the Committee—indeed, it applies to other parts of the Committee—to use the Committee stage to probe the whole of Clause 17 with a view to ascertaining the Government's intentions and to see whether we can improve the wording of the Bill. That is the function of this Chamber. We wish to give the Minister the chance, which we are sure he will welcome, to give us an assurance on a list of undertakings. We also wish to give the noble Lord the opportunity to reflect upon what we say and to revise and improve the Bill before the Report stage.

There is no need for me to repeat the history of how Clause 17 came into being. That was covered on Second Reading. All of us involved in the rural housing field welcome the change of heart on the part of the Government. The housing White Paper proposed the removal of the exemptions policy for rural areas. However, that has now been restored through Clause 17. I am glad to have the opportunity in today's proceedings on the Bill to congratulate the Rural Housing Trust, the CLA, the NFU and many other organisations on their efforts in persuading the Government that it was right to bring back the rural exemptions and put them in the Bill.

In the group of amendments we deal with all aspects of Clause 17. We wish to see whether we can get the Government to think much more clearly about the way in which the rural exemptions will work and to examine the problem. I sympathise with the Government in their efforts to get at what we mean by a "settlement". They have used the very exhaustive procedure of examining all the various parishes and settlements and, indeed, have sent out consultation papers. They have made a valiant effort to meet the point. However, we still wonder whether the definitions should be clearer and whether there should be more on the face of the Bill than is left to regulations at present. We also want to see a degree of permanence in the arrangements.

There is a fear that the supply of land will dry up if landowners feel that the policy may be reversed again. We know that no Parliament can bind its successor but if the permanence of the exemption arrangements is set out on the face of the Bill it will be that much harder to alter them. However, as I said, the Government have made a valiant effort, and we congratulate them.

It is possible that the approach in the amendments is not exactly the best way to deal with the matter. However, we believe that the proposals would be a good start. Indeed, our approach may be better than that of the Government; we hope to convince them that that is so. I believe that it is a proper use of the Committee stage to probe the whole operation of Clause 17. Then, depending on what the Minister tells us regarding the Government's intentions, we may wish to return to the matter on Report.

I shall deal with the amendments briefly. As the noble Lord, Lord Stanley, said, Amendments Nos. 69, 71 and 73 are paving amendments. Amendment No. 77 is the substantive amendment in the group. I have to admit that I drafted it myself. Therefore, I shall be entirely happy if the Minister tells me that it needs redrafting. Nevertheless, the amendment has a simple approach. Once one has decided on the houses which have received rural exemption, we propose that a register should be made of them. I believe that I am correct in saying that every local authority will have a list of all the houses in its area which have an agricultural exemption as regards use. It would not be a big task—there will not be an enormous number of houses involved—but it would be extremely helpful if the relevant local authority were to maintain what I have described as a register of exempt rural properties. I take no pride in the name. If the Government prefer another form of words, I shall be happy to accept it.

The second subsection of Amendment No. 77 reads: Dwellings entered on the Register of Exempt Rural Properties shall not be removed from that Register and their exemption from the purchase grant scheme shall be permanent". That is a fairly straightforward way of achieving the degree of permanence I believe we all want to see. The amendment accepts the principle of Clause 17(1)(b), namely, the designation of rural areas. We shall certainly return to that aspect. However, if the Government's designation approach turns out to be the one that is finally adopted, which is very likely, I feel that the properties which are so designated should be registered and that such designation should be permanent.

As I said, I drafted the amendment myself simply to get the Government's reaction to the idea. Of course, if they like the approach, I shall be happy to withdraw the amendment and for the Government to redraft it. The purpose of the amendment seems so obvious that I should have thought the Government could at least accept the principle behind it.

The other amendments in the group, which were originally tabled by the noble Lord, Lord Peyton, and to which the noble Lord, Lord Stanley, and myself added our names, are Amendments Nos. 82 and 83. Obviously, Amendment No. 82 deals with technical points about the granting of planning permission for "construction" and so on either side of the grant of that permission. The wording of the amendment is straightforward.

The proposed subsection (8) of the amendment seeks to meet the point. I am not sure that, a population of more than 10,000 people", is the right figure, but it is an attempt to try to lift the fairly artificial barrier of 3,000 to ascertain what the Government intend to do. I believe that the Government have said that they are prepared to see some variation around the margin of 3,000, but I am not sure whether they are prepared to see a variation from 3,000 to 10,000. I am sure the Minister will understand that this is an attempt to find a slightly more flexible way to deal with the problem of the enlargement of a rural settlement. For example, what happens if an exempt property is in a settlement of, say, fewer than 3,000 people and the settlement then grows? I am sure that the Minister will be prepared to answer that point.

Amendment No. 83 deals with settlements the other way round, that is to say, all settlements with a population of fewer than 3,000 people, and other settlements"— and this is a most important part— in relation to which the Secretary of State is satisfied that there are likely to be particular problems for a registered social landlord in securing further land on which to provide additional dwellings". That approach is picked up in a slightly different way in Amendment No. 79. However, I am sure that Members of the Committee will understand what we are trying to achieve by way of this group of amendments, and those which follow, as regards Clause 17. The amendments are an attempt to persuade the Government that although their approach to the problem is welcome the clause could he improved and a degree of permanence should be built into the exemptions once they are granted.

3.30 p.m.

Lord Stanley of Alderley

I am sorry to repeat myself but as I have added my name to the noble Lord's amendment, and I have also been asked by my noble friend Lord Peyton to move his amendment, I perhaps ought to say a few words now. As the noble Lord has explained, Amendments Nos. 77 and 82 both have the same important objective; namely, to make sure that once an area is designated exempt it always remains exempt. The amendment of my noble friend Lord Peyton spells out clearly—as the noble Lord pointed out—that all settlements with a population of fewer than 3,000 people must be designated exempt and remain so even if the population grows, unless the area changes its character or its population rises above 10,000. However, I understand the noble Lord's reservations about that figure.

Amendment No. 83, to which the noble Lord, Lord Peyton, has added his name, seeks to reflect the views expressed in the Secretary of State's consultation paper and gives him the power to include other areas if he thinks fit, for example, national parks or green belt areas. As the noble Lord, Lord Carter, explained so well, Amendment No. 77 is far less restrictive than Amendments Nos. 82 and 83. I shall be interested to learn of the preference of my noble friend Lord Mackay. Needless to say, I want to be on the winning side. The Government should be as definite as possible about this matter, otherwise land will not be forthcoming. It is essential that these houses are not lost to the local community. We have been through this matter before in this Chamber many times. However, I understand that if any house is sold, the proceeds will be reinvested in other local accommodation. I should be pleased if, when he replies, my noble friend will spell out what "local" means. I suspect it is considerably less local than what I might consider local.

I repeat my considerable thanks to the Government for having come so far since the 1989 Act. The Committee may remember the somewhat vitriolic exchanges that took place then, followed by a somewhat disastrous Division. The situation today is totally different. I am sure that the noble Lord, Lord Carter, would agree with that as he took part in the proceedings on that Bill. I think that we are all agreed on what we want to achieve.

Lord Carter

The noble Lord said that the Division was disastrous. Why did he say that when we won the Division?

Lord Stanley of Alderley

It is well known that any Division that I win is considered disastrous by my noble friends on the Front Bench. That is why I said it was disastrous. I should add that I did not win the Division by myself; the noble Lord was greatly involved in it and, for all I know, probably egged me on. However, we must get back to the business under discussion.

As I said, the situation today is totally different. I think we are all agreed on what we want to achieve, not least because the Government have accepted that there is a problem and have produced their plan. It is now a matter of whether we proceed by regulation—which, as I understand it, is the way the Government would like to proceed—or whether we need something more reassuring. My view is that we need something on the face of the Bill to ensure confidence and continuity. I should not have thought that it was beyond the wit of the Committee and my noble friend to propose a form of words, perhaps along the lines of the amendment of the noble Lord, Lord Carter, to achieve that aim. I look forward to hearing my noble friend's reply.

Baroness Hamwee

The name of my noble friend Lord Beaumont of Whitley is added to Amendment No. 77. He is unable to be present but on his behalf, and indeed on my own, I wish to support that amendment. I share the concerns of those who believe that the limit of 3,000 dwellings is too low. I take the Government's point about the difficulty of being absolutely precise, given, at the margins, that a car crash or a multiple birth could take the figure above or below the limit, but nevertheless as a general principle the figure of 3,000 is too low. I support the attempts to increase the figure as regards exemption.

Lord Hamilton of Dalzell

I strongly support this series of amendments, particularly the flexibility given to the Secretary of State in Amendments Nos. 82 and 83. In Surrey, where I have property interests, there are 70 villages designated as rural with a population of 10,000 or under. Of these, 20—which I calculate as being 28.5 per cent.—have populations of more than 3,000. I know that Surrey social services is immensely anxious about its ability to produce social housing. That will depend on the roll-over producing incessant planning consents which are extremely hard to come by in Surrey. I have no doubt that the same thing applies in many of the other home counties.

Lord Hylton

I support all these amendments. I do not discriminate between them. We have been over this ground many times in this Chamber as regards I do not know how many different housing Bills. It must be extremely well known by now that there are a number of perfectly valid reasons why it is not possible to replace certain housing in certain villages and small settlements. There may be planning reasons, green belt reasons, sewerage reasons or a whole stack of reasons why that is not possible. I hope that by now the Government have become extremely familiar with those reasons and will look upon these amendments with favour.

Lord Mackay of Ardbrecknish

I am grateful to those Members of the Committee who have taken part in this debate. As my noble friend Lord Stanley of Alderley said, it seems that we are all agreed on what we want to achieve, give or take a thousand or two, having heard the words of the noble Lord, Lord Hylton. However, we are generally agreed on what we want to achieve. The amendments in front of us are attempts to probe me, or to move the goalposts a little, or to put on the face of the Bill the aspects that we wish to see considered as regards designating rural areas which will be excluded from the right to buy.

The whole of Clause 17 is concerned with the Secretary of State's power to designate rural areas. Obviously the Committee is interested in the criteria that we plan to use to identify exempt rural areas, and the permanence of those designations once we have made them. I hope that I can reassure the Committee on those matters and that those Members of the Committee who have tabled amendments will feel able to withdraw them. Clause 17 specifies that the Secretary of State may designate rural areas where the new right to acquire will not arise. It is our intention that in England this will cover small rural villages of 3,000 people or fewer. In Wales an approach using population density is proposed. However, in England we shall be looking—and we are looking—at the population density in parishes. We are identifying those parishes which have no settlements with more than 3,000 people. That is the key point. It is not a question of the parish in total having a population of fewer than 3,000 people; it is a question of the settlements in the parishes having a population of fewer than 3,000.

Amendments Nos. 69, 71 and 73 together would remove the Secretary of State's discretionary power to designate rural areas and make it a requirement to designate exempt rural areas. As the Committee will know, we have published a consultation paper explaining the general approach that we propose to take in England to identify and exempt rural areas using a settlement population of 3,000 as our guideline. We are consulting on detailed, specific proposals for particular areas. We have already put forward detailed proposals for 30 English counties, and proposals for Wales. The remaining English counties will be consulted shortly. In England we propose to base exclusions on parish areas wherever possible, but where a parish contains both a small settlement and a larger settlement we shall use a map to delineate the excluded area. The settlement assessments are based on the previous census. We shall listen to views either that we have misunderstood particular areas, or propose not to exclude areas with an equally good claim.

Our intention to make rural designations is therefore clear, and the criteria on which we are consulting, and propose to use, are also clear. The Committee has already had the advantage of seeing some of the consultation papers although I accept that they may not concern the part of England in which particular Members of the Committee are interested. A number of consultation papers have been produced. There are two different kinds. There is the general one which lists the places in each county in England. By some accident I am looking at the document concerning Wiltshire. It lists the parishes in alphabetical order. It is followed by a second document for each of the counties in which maps are used to delineate those parishes where a split is required and the whole parish is not to be included, perhaps because one part of the parish contains a large town but outside is a rural area in which no settlement is greater than 3,000, and which we believe ought to be designated. The documents contain much information for noble Lords to see how the Government are carrying out the powers given to the Secretary of State under Clause 17.

I do not believe that the criteria need to be written on the face of the Bill as Amendment No. 83 would do. Indeed, this would prevent the flexibility we need to take account of the different circumstances in Wales, where a different approach is needed.

We have made clear in the consultation paper that we will consider any special cases made for other settlements with higher populations to be excluded. Amendment No. 83 also includes provision for special cases where the Secretary of State is satisfied that there is likely to be particular difficulty securing land for replacement properties. I explained at the end of the last Committee day that replacement properties do not only have to be newly built. Landlords will also be able to use the sale proceeds to buy existing properties on the open market as a replacement for social renting. Specifying a single criterion under which further exemptions could be made severely limits our discretion to deal properly with special cases, on whatever grounds they are made.

Amendment No. 82 attempts to ensure that once a property is within a designated area tenants would not gain the new right unless the settlement population rose to over 10,000. Under our proposals, if a settlement's population goes over the 3,000 mark, tenants will not suddenly gain the new right. This would only happen if the rural designations were changed. We cannot rule out the possibility of revision where a small village, over the decades, grew into a new town. Amendment No. 82 recognises that a rural exemption would no longer be appropriate in such circumstances.

I recognise that there has been concern about the duration of our rural exemptions. But once the rural exemptions are made we would not intend to revisit them. It is unlikely that any new information would be available anyway, except at the 10-yearly census. It might be appropriate to review the designations more generally at some time in the future, but it would certainly be possible to conduct a review using a different, higher population limit to take account of general population growth in rural areas.

The fact that making rural designations proposed in the noble Lord's Amendment No. 82 would be an obligation implies that rural designations will have to be continually reviewed and updated. Our intention is that once rural areas are designated they should remain designated unless circumstances change substantially. I hope that that answers one of the questions asked by the noble Lord, Lord Carter. For the great majority of settlements the exemptions are never likely to change. Once the orders are made, we will not want to revisit them continually.

As it stands Amendment No. 82 would cause particular difficulties if an exempt settlement's population reached 10,000. As the noble Baroness, Lady Hamwee, said, a single birth, multiple births, or a fatal car crash could bring the provision into play or take it out. That cannot be workable. Moreover, it would limit the scope for any errors in designations, once made, to be corrected.

I understand the concerns of landowners who play an important role in the provision of social housing. But landowners need have no worries about continuing to give land at a discount for social housing. As I have explained before, where they have donated land and the tenant subsequently buys, the benefit of their generosity is simply rolled over into the replacement housing, and used to help another family in need.

We have recognised that this process of replacement could be particularly difficult in small villages, where there may be no land to build a replacement, and where there is less opportunity to buy existing homes on the open market. Our rural exemption is designed to protect such small villages.

In Amendment No. 77 it is proposed that every local authority should be required to keep a register of dwellings in exempt areas. Listing all the exempt parishes for the proposed statutory instruments has been a considerable undertaking. To list each and every exempt dwelling, I suggest, would be a somewhat bureaucratic nightmare. There was concern in another place that the size of the statutory instruments that we proposed would require a wheelbarrow. I think that a register of dwellings would require a pantechnicon.

The amendment suggests also that exemptions for properties should be permanent. I understand those concerns. However, again I have to underline my assurance to the Committee that the Government have no intention of revising designations except in exceptional circumstances. However, we need the flexibility to be able to revisit designations if an error has been made or there has been a major growth in population which substantially changes the nature of the settlement. However, if Amendment No. 77 were to be taken on board, the consultation documents produced, say, for Gloucestershire, might be a good deal thicker than this slim volume.

3.45 p.m.

Lord Carter

I am grateful to the noble Lord for giving way. I believe that he has misunderstood the amendment. This proposal would not involve a statutory instrument. The local authority would keep the list in exactly the same way that it now does for houses with an agricultural restriction on them. There would not be that many in each area. The Minister will be better briefed on this issue than I am, but the number of houses involved will not be that great. It would be up to the local authority to keep the register.

Lord Mackay of Ardbrecknish

I believe that I misunderstood. I came to the conclusion that the register of dwellings would include the statutory power. I accept the noble Lord's assurance that is not what he intended. I shall consider again what he said. Equally, if local authorities were to keep a register, that involves lists, and so on. I see no advantage over the documents and maps which the Government propose should form the statutory basis of the exemption scheme.

I have sought to explain how we propose to set about this task. Indeed, we have already begun. The Committee can see how we propose to set about it in the case of those parts of England and counties for which we have already produced the documentation. The proposals that we have put forward indicate quite clearly how the Secretary of State will use the power to designate areas and allow us the flexibility we need to ensure that designations make sense on the ground, thus assuring landowners who wish to give land in those areas that if they do so there is a certain fairly fixed permanence in the proposals that we shall put forward, and that change in designation will take place only in fairly exceptional circumstances.

With that explanation, the assurances that I have given, and the explanation of how we believe the amendments would impinge sometimes adversely on what we think is the correct way forward, I hope that noble Lords who have amendments in the group will feel able to withdraw them.

Lord Carter

Before the noble Lord, Lord Stanley, decides what to do with the amendment, having dealt with the point on Amendment No. 77, perhaps I may raise two brief points on what the Minister said.

For reasons that I entirely understand, it is becoming clear that the Government are concerned with the designation of areas. Those who wish to maintain the exemption are concerned with the designation of property, of the individual house. We seek to achieve some means of maintaining designation of a house which is exempt because it is in an exempt area. I understand the reasons for the Government adopting the attitude that they do. I shall return at Report stage to the issue of the designation of property once it is exempt. The Minister said that the problem would be considered through the 10-yearly census. I cannot believe that it would be so accurate that a car crash or a multiple birth would be reflected in the 10-yearly census.

Lord Mackay of Ardbrecknish

Perhaps I may help the noble Lord. The only figures likely to be available if one wished to reconsider the problem are those from the 10-yearly census. I hope that I indicated firmly that it did not mean that we would review the situation every 10 years. We envisage that many areas would never be reviewed and those that may require review will be reconsidered perhaps because of new town growth or some other change that one cannot foresee at the moment. I hope that in the great majority of cases the permanence of the arrangements can be accepted.

Lord Stanley of Alderley

Before I withdraw Amendment No. 69, I wish to make two points. I may misquote my noble friend, but I believe that he said that the Government did not intend to alter the designations. He also said that once an area was designated as rural, it would remain so, or words to that effect. Those assurances are extremely helpful. However, being a somewhat doubting person, I believe that they are only assurances. Surely something on the face of the Bill as a real assurance would be better. Perhaps we can draft something later on at Report stage.

Apart from that, I am grateful to the Minister for all that he said and agree with him with the possible exception—to take the line adopted by the noble Lord, Lord Carter—that perhaps we should look at the individual house rather than the individual area. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 70 to 78 not moved.]

Lord Gisborough moved Amendment No. 79: Page 11, line 21, at end insert— ("() The rural areas designated under subsection (1)(b) above shall include areas where—

1. (a) there is a shortage of affordable housing demonstrated by the local authority's housing register and other relevant evidence; or
2. (b) the release of land to provide replacement stock for dwellings in the social rented sector acquired under the right conferred by section 16 would be contrary to planning and environmental policies for that area.").

The noble Lord said: I am concerned that the effect of the Bill will be to reduce the supply of affordable housing in rural areas. It fails to take into account the environmental and land use implications of the proposals for the extension of the right to buy. The Government recognise that there are particular problems in providing affordable houses in rural areas. However, I believe that the proposals to exempt small rural settlements, identified on the basis of an arbitrary population threshold, is too crude. It fails to recognise the large number of rural communities above 3,000 in population where problems of providing affordable housing are just as acute. The proposal also fails to recognise fully the factors which influence and determine the ability to meet affordable housing needs within the acceptable environmental limits.

In another place, the Government claimed that extending the right to buy to housing association tenants will not have any environmental consequences. I do not believe that that is the case. In areas where tenants exercise their right to buy, providing replacement stock could have important environmental implications. That will be particularly true in areas where suitable land or buildings in the locality to provide replacement dwellings is not available and green field sites have to be provided.

I am also concerned that the current proposals are creating a degree of uncertainty about the future status of social housing stock. This uncertainty is undermining the co-operation of landowners in providing suitable sites for local needs housing and risks exacerbating problems of supplying social needs housing in areas where suitable sites may be difficult to identify.

In tabling the amendment, I sought to ensure that the Bill is sensitive to the different circumstances of different rural areas. I believe that the amendment will allow for the continued extension of the principle of the right to buy while safeguarding the supply of affordable homes in rural areas. It addresses two key concerns: first, retaining a supply of affordable homes in areas where shortages already exist; and, secondly, ensuring that the replacement of dwellings purchased under the right to buy does not contradict existing environmental and planning policies.

The amendment defines on the face of the Bill those areas where the right to buy will not apply. It adopts a criteria-based approach in which environmental and land use criteria, as well as evidence of housing shortages, are taken into account. Its effect would be to ensure that in identifying areas which should be exempt from the right to buy, the particular circumstances of individual rural areas would be considered. This would help reduce the impact of tenants exercising the right to buy on affordable housing stock in areas of constraint and avoid conflict with other planning and environmental policies for that area. It would also create a greater sense of security about the future status of social housing stock in exempted areas than the current proposals which rely entirely on the use of statutory instruments. I beg to move.

Baroness Hamwee

My name is also to the amendment. I do not wish to repeat the detailed arguments put by the noble Lord, Lord Gisborough, with which I agree. I support the amendment in particular because it allows, within proper constraints, for local diversity. It would reflect local needs and, most important, it would allow those needs to be determined locally by those who are best placed to analyse them.

Lord Carter

My name is also to the amendment because if we consider the discussion on the previous group of amendments, this is another example where we might be able to obtain more flexibility and diversity in the approach, as the noble Baroness said. We should be able to ascertain whether there is a shortage of affordable housing which we agree would be the triggering factor in granting the exemptions. That is what it would be about; it would be another arrow in the Government's quiver when dealing with the problem. If we have the provision on the face of the Bill, it would help.

Lord Hylton

I support the amendment for the reasons that I gave as regards the previous group. The problems are particularly acute in what one might describe as affluent areas where housing prices are already high and will tend to rise still further. I give one example of where I live which is within the commuting area surrounding Bath and Bristol. There the problem is quite severe.

Lord Mackay of Ardbrecknish

My noble friend's amendment seeks to extend the application of the rural exemptions. It proposes that rural exclusions should cover areas where there is a high level of housing demand or where releasing land for replacement properties would be against planning and environmental policies for that area. I cannot accept the justification for either of those cases. We are now entering a number of small debates in which we must be careful that we do not pay lip service to the idea of the right to acquire property by a tenant of a housing association and then salami-slice away that right until we are left with half a dozen tenants in a small part of the country.

We must be careful about the exemptions we bring forward and put into the legislation. Every time we make an exemption, we are saying that the tenants in the exempt area will not share with tenants in other areas the right to acquire their house. If we have all signed up to the principle that the tenant should have the right to acquire, then we should remember that we are taking away that right from tenants. We should only do that when we feel it is absolutely justified. We all feel that it is justified in certain rural areas and we have already had a debate about them.

The first part of this debate concerns housing demand. The scheme should in fact help landlords to meet housing need. I do not believe that my noble friend's concern has any basis as regards that aspect. If a tenant buys the property in which he is living, he thereby provides a receipt which can be re-invested in a home for a family on the waiting list. That is either by new build or by purchase. That should solve a problem rather than create one.

As concerns environmental and planning policies, I must stress again that replacement properties do not have to be newly built. It is the same point. Existing properties can be bought on the open market. Since the receipt will be the market value of the property sold, it should be sufficient to buy another similar existing property in the same area which can then be used for social renting.

The purpose of rural exclusions, to which my noble friend's amendment would add new exclusions, is to exempt small country villages and rural areas where land is limited and where there is also limited scope for buying existing property. In larger rural towns, we believe there is ample scope for buying replacements on the open market or for new build. Therefore I do not believe we should extend the "protection" of the rural areas policy to the areas falling within the definitions my noble friend suggests. I hope with that explanation my noble friend will be able to withdraw his amendment.

4 p.m.

Baroness Gardner of Parkes

Will my noble friend clarify one point that I do not quite understand? He said that the proceeds from the sale would enable someone to buy a comparable property in the same area. As I understand it, the proceeds will be discounted. I know that a grant is to be given to enable people to buy. Would the grant make up the value sufficiently to purchase a similar property?

Lord Mackay of Ardbrecknish

I am not entirely sure I understand my noble friend's question. If an association sells a house to a sitting tenant at a discount, it obviously receives from the tenant the market price less the discount and then receives the discount from the Housing Corporation. From those two routes the association receives the market value of the house it sold. The money that the housing association receives from such sources is to be ring-fenced to provide another rented house. I hope that that answers the question.

Baroness Gardner of Parkes

I thank my noble friend, but there is another point that has arisen previously; namely, what happens when the amount provided by both the grant and the tenant's purchase still does not cover what was land at an unrealistically low price in the first instance? The case has been raised again and again of someone selling land at an artificially low price. Surely local properties would not be saleable at the same figure.

Lord Mackay of Ardbrecknish

If the land is sold at a low price and a house on the land is then sold to a sitting tenant, the market price will reflect the proper market value of the land. The housing association will gain that additional money and will therefore be able to fulfil the purpose for which the land was originally given; namely, to provide social housing. It will provide another social house.

The Earl of Dundonald

Who will be responsible for carrying out the valuation? Will it be the district valuer?

Lord Mackay of Ardbrecknish

I am not entirely sure whether that is the name used in England. My noble friend comes from north of the Border. In Scotland it will certainly be somebody like the district valuer. I am not entirely sure whether the district valuer exists in the south but some such person will do the valuations. As I understand it, that is how it works currently with the sale of local authority houses.

The Earl of Dundonald

In that case, perhaps I may put another point to my noble friend. It is normal practice for the district valuer to set the value slightly lower than the open market value. Therefore there would be a difference.

Lord Mackay of Ardbrecknish

I shall take advice on whether district valuers set valuations lower than the market value and perhaps write to my noble friend.

Lord Carter

Perhaps I may take up a point made by the Minister in referring to the "salami" technique of gradually removing the right to buy slice by slice. I suggest that if the criteria were on the face of the Bill, the problem would not exist.

Lord Monkswell

I have a slightly different question. At present local authority tenants who have a right to buy are locked into the private sector. Once they have bought their council house it is virtually impossible for the local authority to buy it back. From what the Minister says, it will be possible for a housing association to sell a house to a tenant under the right to buy; the tenant will receive a discount; three years later the housing association could buy back the property at the market price and almost immediately sell it again to the tenant, whereupon the tenant would receive a discount. It would seem logical in that sort of situation for the housing association and the tenant to come to an agreement that every three years they go through such a transaction and split the difference in terms of the discount. Have the Government thought of that? Do they think it a sensible use of the public funds involved in the discounting procedure?

Lord Mackay of Ardbrecknish

The noble Lord allows his imagination to run away with him on hypothetical cases. I cannot see a housing association and a tenant entering into successive deals in which the tenant moves from being a tenant to being the owner, to being a tenant again, and then to becoming the owner again. That is very unlikely. I suspect that something would stop any such procedure dead in its tracks. Common sense might do so in the case of a tenant who had become the owner and had to become a tenant again. Perhaps we should leave the matter to one side. In case I have misunderstood the noble Lord's intervention, I shall certainly look into it. If I feel that he has a point that should be addressed, I shall come back to him.

Perhaps I may use this opportunity to save writing to my noble friend Lord Dundonald. The landlord can use anyone to make a valuation. But if the tenant disputes it, there is a right to go to the district valuer. The legislation states clearly that the valuation must be the open market value. I refer my noble friend to Section 127 of the Housing Act 1985 where that is clearly spelt out. The valuation must be the open market value.

To return to the nightmare scenario suggested by the noble Lord, Lord Monkswell, any tenant's discount in the circular dance he suggested has to take into account any earlier discount that the tenant received.

Lord Hamilton of Dalzell

It may be clear to other Members of the Committee. It is not quite clear to me. Will the open market value that is decided be the open market value as if the house had a tenant? Or will it be the freehold market value? Before you can put another tenant in another place you have to buy the freehold, not a leasehold.

Lord Mackay of Ardbrecknish

As the Committee knows, I am not a lawyer; nor am I an estate agent. I am afraid my noble friend takes me into territory to which I shall need to give a little thought. I suspect that the Housing Act 1985 may be helpful. I can advise my noble friend that the open market value, which must be taken, must be on the basis of vacant possession.

Lord Gisborough

I thank my noble friend for that explanation. I am not totally convinced. I do not totally understand how the value can be maintained for continually replacing the houses. However, I shall read his remarks. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 80 to 83 not moved.]

Clause 17 agreed to.

Lord Carter moved Amendment No. 84: After Clause 17, insert the following new clause— TENANTS' INCENTIVE SCHEME: ALLOCATION OF FUNDS (". Allocation of funds for the Tenants' Incentive Scheme shall take into account the fact that tenants whose dwelling is entered on the Register of Exempt Rural Properties do not have the right to buy the dwelling which they occupy.").

The noble Lord said: We can be extremely brief with this amendment. It seems to me worth exploring the attitude of the Government on the matter of taking away the right to buy through the exemptions policy. This is a community benefit and it is being done for social purposes. But, in a sense, the tenant is a loser. I feel that there should be some form of quid pro quo because a tenant in that situation has lost the right to buy.

Would it not be fair to allow the tenants of exempted properties to be taken into particular account when the allocations of the incentive scheme are being made? That would give them a new freedom, if their exempted property remains within the stock of rural and social housing, to have the chance to pick up the right that the exemptions policy removed from them? It seems to me that the community should give some kind of quid pro quo to the individual tenant in respect of the right that he is losing as a result of the social purposes, which are the intention of the legislation. I beg to move.

Lord Mackay of Ardbrecknish

The purpose of the tenants' incentive scheme is to make housing association property available for a family in housing need by giving the existing tenant a cash grant to help him buy a property on the open market and thus free the tenanted property for another tenant. Approximately £81 million was spent on the tenants' incentive scheme in 1994–95 and around 7,000 grants were distributed.

As with any cash limited programme, clearly it is essential that funds are targeted at areas where there is the greatest housing need. Approximately 53 per cent. of all TIS, as it is called, grants in 1994–95 were distributed to the London and South-East area where there is the most acute need for social housing. We expect that trend to continue.

Many housing associations in rural areas simply do not bid for TIS grants as there appears to be very much less demand for those grants in rural areas. But if they were to bid, they would be considered, just like everybody else. With that assurance, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Carter

I thank the Minister for that helpful answer. I understand that they do not bid because they do not believe they will get an allocation. I understand that that is the problem. And that is the reason for the amendment. We want to have it clear that, if they wish to bid, they can do so. It is to be hoped that the particular circumstances of the exempted tenants can be taken into account when the allocations of the TIS money are made. I shall read what the noble Lord said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 [Social housing grants]:

[Amendment No. 85 not moved.]

Clause 18 agreed to.

Clause 19 agreed to.

4.15 p.m.

Clause 20 [Purchase grant where right to acquire exercised]:

Baroness Hamwee moved Amendment No. 86: Page 13, line 14, leave out from ("be") to end of line 15 and insert—

1. ("(a) the aggregate of the discounts given in that year;
2. (b) the replacement costs; and
3. (c) the interest.

(2A) The rate of replacement costs per dwelling shall be set in each September for the following year by the Corporation and different provision may be made for different cases, and in particular may be made in relation to different values, different areas, different descriptions of housing accommodation and different descriptions of registered social landlord, and may be a composite sum allowing for actual items of expenditure. (2B) Before setting the replacement costs the Corporation shall consult such bodies appearing to it to be representative of registered social landlords as it considers appropriate. (2C) In this section— replacement costs" means the estimated costs of disposal, including processing the person's claim, valuation and legal expenses, and of acquisition of a replacement dwelling, including search, valuation taxes and legal expenses and with an appropriate allowance for abortive disposals and acquisitions, at a rate as determined by the Corporation in accordance with subsection (2B); and interest" means interest on the discount and replacement cost from the date of disposal to date of payment at the rate of interest on judgment debts in the High Court.").

The noble Baroness said: This amendment is grouped with Amendments Nos. 87, 88 and 89. My later amendments, Amendments Nos. 92 and 95, which I do not intend to move, cover rather similar ground.

On a number of occasions the Minister referred to the replacement of the value of houses which are sold at their full market value. This amendment seeks to ensure that there is a proper reinstatement to the housing association since I believe that more than simply the value of the house is needed in order to put the housing association back where it started, especially in respect of replacement costs. I refer to paragraphs (b) and (c) of the amendment which add to paragraph (a), the words of which already appear in the Bill. That proposal is to take account in particular of the cost of selling and purchasing. Members of the Committee who have been involved in property transactions, from the smallest to the largest, will know that they do not come without associated costs. Any organisation which arranges a transaction will have to cover at the least staff time, fees, valuation costs and all the costs involved in searching for a replacement dwelling. There will be—dare I say?—lawyers' fees. There will be stamp duty, land registry fees and even costs in dealing with the Housing Corporation with regard to expenditure from the disposal proceeds fund.

The amendment mentions interest. I am not necessarily wedded to interest at the very high rate—I believe it is now 15 per cent.—proposed in the amendment. But it is a fact that interest would recompense the housing association for not having the cash represented by these amounts in its own account and earning interest.

The Housing Corporation is a quango. As such its dealing in these matters tempts me in one or two places to raise issues which I might otherwise not wish to bring to the Committee. I feel, however, that it is important to have some detail on the face of the Bill, given the difficulties of raising at a later stage questions about the way in which the schemes are being operated, since there is indirect rather than direct accountability. Therefore, I seek a proper reinstatement.

Amendment No. 88 allows the corporation to borrow and is essentially a timing matter in order to ensure that funding is available to the corporation. Since reimbursement to housing associations is not a precondition, it will follow the event. I hope that the Minister will take the opportunity to give the Committee assurances that the funding will be secured to the fullest extent possible in order to ensure that the intention of reimbursing housing associations can be implemented. I do not intend to move Amendment No. 89. I beg to move.

Lord Mackay of Ardbrecknish

This group of amendments seeks to amend the provisions relating to the payment of grant to registered social landlords to cover the new right-to-buy discounts. I do not believe that any of the amendments would improve the scheme.

Clause 20 requires the corporation to pay grants to registered social landlords in respect of discounts given by them to tenants exercising the right to acquire. The amount of the grant will be the aggregate value of discounts given in that year. Amendment No. 86 would increase the amount of the grant to cover the cost of disposing of a property and providing a replacement, and interest on the discount and replacement costs. Registered social landlords who sell under the new right to buy will receive, as I said, the market value of the property. That should be sufficient to provide a replacement. I cannot therefore see any need for the amendment, which would simply add to the Housing Corporation's costs.

Clause 20(4) provides that the corporation, when paying a grant, may provide that the grant is contingent on compliance with such conditions as it may specify. The type of conditions which the corporation is likely to specify will relate to matters such as audit, record keeping, and so on. Amendment No. 87 would remove that power. It is clearly useful for the corporation to be able to specify these matters as it will help it keep track of what is, after all, public funding. I see no justification for the proposal in Amendment No. 87 to remove that power.

Amendment No. 88 would add a new subsection to Clause 20, providing that the corporation may borrow from any person such sums as it requires to make payments of grant to social landlords under Clause 20. The corporation already has borrowing powers under Section 92 of the Housing Associations Act 1985 which are subject to the Secretary of State's approval. Therefore, we believe that the amendment is superfluous.

I believe that I heard the noble Baroness aright when she said that she would not move Amendment No. 89. With my explanation, I hope that she will feel able to withdraw the amendment she has moved.

Baroness Hamwee

I do not feel that the Minister answered Amendment No. 86 at all. He repeated that the market value will be provided. I do not intend to pursue the point further but I shall take the opportunity between now and the next stage of the Bill to attempt to gather further detailed information of the cost of the transaction. I hope that the Minister will be prepared to consider the perfectly practical and commonsense points which may be made in order to deal with what I believe will be a funding gap. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 87 and 88 not moved.]

Clause 20 agreed to.

Clause 21 [Purchase grant in respect of other disposals]:

[Amendment No. 89 not moved.]

Clause 21 agreed to.

Clause 22 [Assistance from local authorities]:

Baroness Hamwee moved Amendment No. 90: Page 14, line 14, leave out subsection (4).

The noble Baroness said: Amendment No. 90 deals with the subsection providing that, A local housing authority may sell or supply under a hire-purchase agreement furniture to the occupants of houses provided by a registered social landlord, and may buy furniture for that purpose".

In moving the amendment I do not wish to suggest that local housing authorities should not have this power. I simply ask the Minister whether they do not already have the power under Section 111 of the Local Government Act 1972. That is the section which allows local authorities to, do any thing … calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions".

The point may seem a frivolous and unnecessary one. However, in the wider context of local authorities having to justify everything they do on the basis of legislation, I am concerned that, rather than relying on the Section 111 power to deal with matters which are ancillary, the powers of local authorities will become much narrower as a result of the general thrust of legislation. I beg to move.

Lord Mackay of Ardbrecknish

Clause 22 enables local authorities to promote and provide assistance to registered social landlords. As the noble Baroness, Lady Hamwee, points out, subsection (4) allows local housing authorities to sell, or supply under a hire purchase agreement, furniture to the tenants of registered social landlords.

The noble Baroness is concerned that this is an additional power we are giving to local authorities which is not necessary because it can be swept up under Section 111 of the 1972 Act. However, the provisions simply re-enact earlier legislation, and that earlier legislation was contained in Section 61 of the Housing Associations Act 1985.

I suspect that if we did not carry this legislation forward people would assume that we had removed it and that, rather than being swept up by Section 111, it may be swept out. The provision provides local authorities with a practical way of providing help to those who are setting up home for the first time or those who, because of a change in circumstances, would find it difficult to meet the full costs of providing furniture for their home. For example, it could be used to help tenants who need rehousing as a result of a fire. Many local authorities have taken advantage of the provision when working with registered housing associations to provide furnished accommodation in their area.

This is a useful provision which should be retained rather than relying on any hope that it can be swept up by Section 111. I am sure that the noble Baroness will withdraw her amendment in the light of that explanation.

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.

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").

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, 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 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.

Baroness Hamwee

In thanking the Minister I would observe that if the corporation makes a grant and makes conditions, one of those conditions, whether the Government provided for it or not, would, I hope, be that if the registered social landlord does not comply with the conditions it will have to pay back the grant. That is what I thought was covered by Clause 18(3). If there is more than that, perhaps I may turn around the burden of writing letters and ask the Minister to write to me if I am missing the point.

Clause 27, as amended, agreed to.

[Amendment No. 105 not moved.]

Clause 28 [Grants under ss.50 to 55 of the Housing Act 1988]:

Lord Lucas moved Amendments Nos. 106 to 108: Page 17, line 21, leave out ("Part") and insert ("subsection"). Page 17, line 23, leave out ("Part") and insert ("subsection"). Page 17, line 26, leave out subsection (3) and insert— ("(3) Section 52 of that Act (recovery, &c. of grants) is amended as follows—

1. (a) in subsection (2)(c), for "to pay to it" substitute "to apply or appropriate for such purposes as the Corporation may specify, or to pay to the Corporation,";
2. (b) in the closing words of subsection (2), for the words from "requiring" to "interest on that amount" substitute "may require the application, appropriation or payment of an amount with interest";
3. (c) in subsection (7), for the words from "requiring" to "to the Corporation" substitute "requiring the application, appropriation or payment of an amount with interest";
4. (d) in subsection (8)(a), for the words from "the amount" to "is paid" substitute "the principal amount is applied, appropriated or paid";
5. (e) in subsection (8)(b), for "that amount is so paid" substitute "the principal amount is so applied, appropriated or paid".").

The noble Lord said: I spoke to Amendments Nos. 106 and 107 with Amendment No. 2 and my noble friend Lord Mackay spoke to Amendment No. 108 with Amendment No. 96. I beg to move.

On Question, amendments agreed to.

[Amendment No. 109 not moved.]

Lord Lucas moved Amendment No. 110: Page 17, line 38, leave out ("this Part") and insert ("section 1 of this Act (the register of social landlords)").

The noble Lord said: I spoke to this amendment with Amendment No. 2. I beg to move.

On Question, amendment agreed to.

Clause 28, as amended, agreed to.

Clause 29 [Commutation of payments of special residual subsidy]:

Baroness Hamwee moved Amendment No. 111: Page 18, line 6, leave out ("or greater").

The noble Baroness said: This amendment is grouped with Amendment No. 112. In Clause 29(3) provision is made that, if after a commuted payment has been made to a housing association … smaller or greater than it should have been, the Secretary of State may make a further payment in order to make up the shortfall if the payment was smaller or require repayment by the association if the payment was greater.

I am seeking to confine subsection (3) to making up payments that were smaller than they should have been. It is tough to require repayment of an amount which has been overpaid when the Secretary of State has had further thought about what he should have done in the first instance and come to the view that he has been a little over-generous. That provision would allow the Housing Corporation to keep on reviewing its decisions. Even though one appreciates that there are uncertainties in the future and matters can appear over the horizon which can change one's business plans, to add the problem of the Secretary of State requiring repayment increases the difficulty of the housing organisation operating in a businesslike fashion. I do not believe that I would want to do business with someone who says, "I reserve the right to consider in a general way whether I shall ask you to pay some money back". That does not lead to efficiency quite apart from justice. I beg to move.

Lord Lucas

I believe that the noble Baroness exaggerates the problem. I also believe that she has been playing too much Monopoly: "There is a Housing Corporation error in your favour, collect £100". That is not the Government's idea of how this Bill should be put together. It is in the interests of good financial management that provision should be made to enable any overpayment to be recovered. These calculations are complex. On occasions there will be mistakes made in both directions by the Housing Corporation and whatever their direction they should be corrected.

Baroness Hamwee

My concern is with the words, greater than it should have been". That allows a discretion which goes beyond the explanation that the Minister has given. Perhaps this matter can have a little further attention; we should not disallow efficiency. In opening I said that I felt that efficiency should be encouraged. However, it should be made quite clear what the limit should be on the Secretary of State's determination. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 112 not moved.]

Clause 29 agreed to.

Clause 30 [General power to obtain information]:

Lord Williams of Elvel moved Amendment No. 113: Page 18, line 31, leave out (", or has been,").

The noble Lord said: In moving this amendment it may be for the convenience of the Committee if I also speak to Amendments Nos. 114 and 116. Amendment No. 116 is slightly dissociated from this, and I shall be speaking to it in greater detail as I go along. Amendments Nos. 113 and 114 give rise to certain problems. A notice under the general powers of the corporation may be served on somebody who has been, in the words of subsection (2)(b), an officer, member, employee or agent of a registered social landlord". It is odd that the corporation may serve a notice even though many people may resign from being, an officer, member, employee or agent of a registered social landlord". Nevertheless on some future occasion the corporation has the right to serve notice on him or her. Amendment No. 114 is very broad. The corporation can serve a notice to obtain information on, any person whom the Corporation has reason to believe is or may be in possession of relevant information". That is enormously broad. I very much hope that the Government will reconsider that wording.

Amendment No. 116 leads us into this matter. It is designed to address what I consider to be a clause in the Bill which cuts straight across the banking secrecy provisions under both legislation and normal procedure. As far as I am aware—and I hope I am aware—bankers are not entitled to give any information about a client's account other than by a request under a court order. Looking at the Bill as drafted, the wording seems to cut right across that matter. It is something which the Government may well wish to look at again because I do not believe that it is consistent with proper banking practice or with the banking law as it stands at present. I beg to move.

4.45 p.m.

Lord Boardman

I support the three amendments of the noble Lord, Lord Williams of Elvel. Perhaps I may just comment on the third one as regards banking, while declaring a former interest in that occupation. As the Bill is currently drafted, there is a very deep intrusion into the confidentiality between the bank and the customer. It is a complete disregard of the Jack Committee report which referred to the degree of confidentiality that should be kept between the bank and the customer, which should not be intruded on unless there were very special circumstances. As I understand it, there has been no consultation with the bankers about this particular clause. I ask my noble friend to consider carefully either adopting the amendment proposed by the noble Lord, Lord Williams of Elvel, or propose a similar amendment which will meet the point that he makes.

Lord Hylton

The fact is that the Housing Corporation has very considerable powers already. Have any representations been made by that corporation pointing out that its powers are not sufficient? This clause is very widely drawn and probably far too widely drawn.

Lord Lucas

The powers that we are looking at in this clause are rather more restrictive than those enjoyed by the Charity Commissioners as regards charities. They have a very widely drawn power to require any person to furnish them with any information in his possession which relates to any charity and which is relevant to the discharge of their functions or the functions of the official custodian. That is not subject to the limitations under this clause of the Bill. We are looking here to give the Housing Corporation a set of powers which are, relative to the nearest obvious comparison, restricted. Nonetheless, I am happy to go through them in order and discuss the particular reasons for them. The corporation must ensure that it does not abuse its power, but it has a statutory duty to protect public funds and tenants, and it must be able to obtain the information that it requires.

In practice, the majority of registered social landlords will readily respond to requests for information. However, if the corporation meets resistance it needs to be able to take effective action. The provision in Clause 30 will enable the corporation to specify in a notice the information and documents to be made available to it. Should a registered social landlord without reasonable excuse fail to comply enforcement action can be taken under Clause 31.

The noble Lord, Lord Williams, has proposed an amendment to the powers of the corporation to obtain information from the banker of a registered social landlord. The corporation is the guardian of the substantial public funds invested in registered social landlords. Its regulatory interest is not limited merely to public funds; it has a duty to protect tenants, and also needs to be assured that the registered social landlord can meet all its commitments, including the private loans that it holds. This aspect of the corporation's regulatory function also provides a degree of comfort to private lenders—something upon which they have frequently commented favourably.

There may be occasions when the corporation needs to obtain information from bankers. I believe it is right that it should on request be granted relevant information about an individual registered social landlord. I recognise that that power should not extend to other customers of the bank. I am assured that the present wording of Clause 30(5)(b) limits any request to the social landlord's banker to information about the registered social landlord itself. I hope that that provides some comfort to my noble friend Lord Boardman. For the additional comfort of my noble friend and that of the noble Lord, Lord Williams, I will undertake to look again at the extent to which we are giving the corporation powers to request information from bankers. We have been in touch with the British Bankers' Association on the detail of this part of the Bill. That association has not raised this particular problem in relation to the clause, except that it would like to be able to charge fees for providing the information.

It has been suggested that this power will override the confidential relationship between banker and customer. I recognise that that special relationship exists and is protected by statute, but if the corporation is to perform its statutory function it must be able to obtain all relevant information on the financial position of a registered social landlord. Therefore, it is right that it should be able to require a banker to provide, in confidence, information about a registered social landlord who is a customer. Clause 33 provides that restrictions can be placed on further disclosure of information. This power is not unique to the corporation. The Charity Commissioners enjoy much more widely drawn powers, and the Companies Acts provide similar kinds of powers which enable the Secretary of State to require documents to be made available.

In moving Amendment No. 113 the noble Lord, Lord Williams, seeks to prevent former employees from being required to provide information about a registered social landlord. We believe that often former employees may well have relevant information that they have gained during their employment. This may fill important gaps in the corporation's knowledge. We consider it essential that it can legitimately take steps to obtain such information. We also consider it right that the corporation should be able to obtain information from others where it has reason to believe that they may hold something that is relevant. In this context, we will look at the way in which that power would apply to their bankers. If the corporation is to have effective powers it must be able to obtain information from those who it has good reason to believe are holding relevant information. I ask the noble Lord, Lord Williams, to withdraw his amendment. I hope that he will not move either of the others.

Lord Hylton

While the Government are examining this question, will they look at how long the obligations will endure, whether they are covered, for example, by the Statute of Limitations and, if so, whether a shorter period is appropriate?

Lord Lucas

I will come back to the noble Lord, Lord Hylton, on that question.

Lord Williams of Elvel

As always, I am grateful to the noble Lord for explaining the Government's reasoning behind this. I find it difficult to accept that just because there is a precedent under Charity Commission law it can be translated into Housing Corporation law. Once one has a precedent in Charity Commission law one can translate it into Housing Corporation law and then into anything else. Any other measure proposed by the Government under which a regulatory body is entitled to look at the banking records of a client will quote this Act, just as the noble Lord has quoted the Charities Act. Hitler operated in this way. A notice may be served on almost anybody. Almost any person has been involved in one form or another in a registered social landlord. I am sure that this applies not just to members of my family but to members of the noble Lord's family and others. Without any restriction whatever, notices carrying legal force—involving a contempt of Parliament if they are not obeyed—can be served on anybody who has been involved in a voluntary organisation if he is not prepared to give the kind of information that the Housing Corporation, in its great wisdom—I am sure that it will have great wisdom—requires. The Housing Corporation can serve notices on people who may be completely innocent of any offence and may not have known what on earth was going on five years ago when they were members of a housing association, registered social landlord or whatever. The notice can be served on any other person who the corporation has reason to believe is or may be in possession of relevant information.

Hitler would have been proud of this clause. It gives the corporation blanket authority to serve notice on anybody who it believes is able to contribute. The only protection is that afforded to solicitors. I understand why solicitors want to be protected on the basis of privileged communications, but if they are to be protected I see no reason why bankers should not enjoy the same protection. I am not here to defend bankers. The noble Lord, Lord Boardman, is a good advocate for bankers. But I believe that the Government have to watch this very carefully. I hope that the noble Lord will take on board what I say. The whole of this matter, as regards bankers and anybody else who the corporation believes may have information that it wants, gives rise to general disquiet. I very much hope that before we come to Report stage the noble Lord will reconsider the clause and amend it accordingly. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 114 to 117 not moved.]

Clause 30 agreed to.

Clause 31 [Enforcement of notice to provide information, &c.]

[Amendment No. 118 not moved.]

Lord Lucas moved Amendment No. 119: Page 19, line 16, at end insert— ("() Proceedings for an offence under subsection (1) or (2) may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I spoke to Amendment No. 119 with Amendment No. 46. I beg to move.

[Amendments Nos. 119A and 119B, as amendments to Amendment No. 119, not moved.]

On Question, Amendment No. 119 agreed to.

Clause 31, as amended, agreed to.

5 p.m.

Clause 32 [Disclosure of information to the Corporation]:

Lord Lucas moved Amendment No. 120: Page 19, line 40, leave out subsection (5).

The noble Lord said: I shall speak at the same time to Amendments Nos. 123, 192 and 276.

Clauses 32 and 33, which deal respectively with disclosure of information to and by the corporation, contain definitions of "enactment". A definition is necessary in order to determine the information which may be disclosed and which may be subject to restriction on disclosure. There is currently no definition of "enactment" in the Bill: a consequence no doubt of splitting what was once one Bill into two, one of which this place has already looked at in some detail. A definition of "enactment" is required for the Bill as a whole. Amendment No. 276 inserts it into Clause 202. That definition, which is the same as that currently used for the purposes of Clauses 32 and 33, will, by virtue of Amendment No. 192 to Clause 63, apply to the whole of Part I. Amendments Nos. 120 and 123 therefore dispense with the definition in Clauses 32 and 33. I beg to move.

On Question, amendment agreed to.

Clause 32, as amended, agreed to.

Clause 33 [Disclosure of information by the Corporation]:

[Amendment No. 121 not moved.]

Lord Lucas moved Amendment No. 122: Page 20, line 27, at end insert— ("Proceedings for such an offence may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I spoke to this amendment with Amendment No. 46. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 123: Page 20, line 30, leave out subsection (7).

The noble Lord said: I spoke to this amendment with Amendment No. 120. I beg to move.

On Question, amendment agreed to.

Clause 33, as amended, agreed to.

Clause 34 [Standards of performance]:

[Amendment No. 124 not moved.]

Clause 34 agreed to.

Clause 35 [Information as to levels of performance]:

[Amendment No. 125 not moved.]

Lord Lucas moved Amendment No. 126: Page 21, line 9, at end insert— ("Proceedings for such an offence may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I spoke to this amendment with Amendment No. 46. I beg to move.

[Amendments Nos. 126A and 126B, as amendments to Amendment No. 126, not moved.]

On Question, Amendment No. 126 agreed to.

Clause 35, as amended, agreed to.

Clause 36 [Issue of guidance by the Corporation]:

Baroness Hamwee moved Amendment No. 127: Page 21, line 42, at end insert— ("() the devolution to tenants of decisions concerning the management of housing accommodation.").

The noble Baroness said: The amendment proposes the addition to Clause 36(2) of another subject for guidance by the corporation. In this case, it is the devolution to tenants of the decisions about the management of housing accommodation. Although I have my reservations about guidance, and would in many cases prefer something a little firmer than allowing guidance to include certain matters, I recognise that in listing those matters the Government are giving their support to the subjects that are set out.

The amendment seeks to build on an amendment moved by my honourable friend the Member for Southwark and Bermondsey when he sought to introduce a new clause which he called the democratisation of social housing management. The amendment does not go as far as his amendment. I have attempted to take account of the Minister's comments in response to my honourable friend.

The Committee will, I am sure, share my concern that tenants who are, in this sense, customers of the housing services provided, have the greatest stake in the accommodation which they occupy. Almost invariably they are the best people to comment upon how best that accommodation should be managed. They may well be the best people to take the decisions. I seek to ensure that the corporation raises the issue of devolution of decision making to the tenants in the guidance which it produces.

Clearly tenants in different types of accommodation, possibly in different communities, will differ one from another. Fully to take account of tenants' views and make the management of their accommodation not just accountable to them but their own management as far as possible is essential to good housing and good social policy.

In response to my honourable friend, the Minister said that he shared many of the sentiments behind his proposal for democratisation, and that tenants have an important part to play in management. He said that the degree to which they would want to become involved would vary, and that it was not possible to draw up a blueprint. Of course I accept that. I would go further and say that in providing for devolution of decision making it is essential that the body that devolves the decision making should assist in the process. One cannot expect people who are not used to taking certain decisions to move from possibly not even being present to listen to taking the decision without—I hope that this does not sound too paternalistic—having some assistance in ensuring that the process works as well as possible.

Encompassed in these two lines is a great deal of work for the Housing Corporation and the tenants, but it is something which should be on the face of the Bill. I beg to move.

Lord Lucas

We agree, if I heard the noble Baroness aright, with everything that she said. Clause 36 is not exclusive. We do not have to list everything in the clause. She will remember that on the last Housing Bill we had extensive discussions with the noble Lord, Lord Howie of Troon, who wanted to amend and add to such lists. I hope that the fact that we propose to accept the amendment will not upset the noble Lord too much.

On Question, amendment agreed to.

[Amendment No. 128 not moved.]

Baroness Hamwee moved Amendment No. 129: Page 22, line 14, leave out subsection (7).

The noble Baroness said: The amendment seeks to take out subsection (7) of Clause 36, which provides that the corporation may have regard to the extent to which guidance has been followed when considering action to secure the proper management of the affairs of a registered social landlord, or whether there has been mismanagement. I wonder whether using guidance to decide whether there has been mismanagement is giving too much scope for abuse. That may be putting the matter a little high but I believe that it compromises the independence of housing associations.

Clause 36(2) provides that guidance may, in particular, deal with the demands for which provision should be made and how; the allocation between individuals; and the terms of the tenancies and rents set in principle. Subsection (7) provides that the Housing Corporation may have regard to the extent to which that guidance, as well as other guidance, has been followed. Might that not give inappropriate scope for government views, for instance, to be given rein to; perhaps views on allocation to asylum seekers?

We must remember that the voluntary housing movement comprises independent bodies, most of which are charities. I suggest that government interference should be resisted and kept to the minimum that is necessary to deal with oversight. If there has been actual mismanagement there has been mismanagement, but choosing whether or not to follow Housing Corporation guidance should not put an association in fear of Housing Corporation intervention. I beg to move.

Lord Lucas

I appreciate what the noble Baroness said. It is true that the clause provides only for the issue of guidance on various matters. However, the issues to be covered by such guidance are of considerable importance. They include allocation policies; services to tenants; terms of tenancies and calculation of rents; standards of maintenance and repair; complaints procedures for tenants; and consultation and communication with tenants.

It does not appear to us acceptable to say that when considering whether or not to use these important powers the corporation cannot have regard to the extent to which a registered social landlord is following the guidance issued under this clause. The guidance represents accepted good practice. Failure to follow good practice could have major implications for tenants. It could also have implications for taxpayers where, for instance, there is inadequate maintenance and repair. These are clearly matters of relevance to the management of public stock.

This is not a matter of the independence of registered social landlords. The proper independence of the social housing sector will be recognised in the guidance which is issued. The provision is about the failure to follow that guidance. I understand the noble Baroness's anxieties but I hope that she will be prepared to withdraw the amendment.

Baroness Hamwee

I do not believe that I should push my luck. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36, as amended, agreed to.

Clause 37 [Powers of entry]:

Lord Lucas moved Amendment No. 130: Page 22, line 30, at end insert— ("() Proceedings for an offence under subsection (3) may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I spoke to this amendment with Amendment No. 46. I beg to move.

[Amendments Nos. 130A and 130B, as amendments to Amendment No. 130, not moved.]

On Question, Amendment No. 130 agreed to.

Clause 37, as amended, agreed to.

Clause 38 [Penalty for obstruction of person exercising power of entry]:

Lord Lucas moved Amendment No. 131: Page 22, line 45, at end insert— ("() Proceedings for such an offence may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I spoke to this amendment with Amendment No. 46. I beg to move.

On Question, amendment agreed to.

Clause 38, as amended, agreed to.

5.15 p.m.

Baroness Hamwee moved Amendment No. 132: After Clause 38, insert the following new clause— STANDARDS OF PERFORMANCE OF THE CORPORATION (". The Corporation shall, after consultation with persons or bodies appearing to it to be representative of registered social landlords and any other persons or bodies that it thinks fit, from time to time—

1. (a) publish a statement of the standards of performance that it intends to achieve in connection with its duties under sections 30 to 38 of this Part:
2. (b) arrange for publication, in such form or manner as it considers appropriate, of the standards so determined;
3. (c) arrange for publication, in such form or manner as it considers appropriate but at intervals of no more than one year, of a comparison between its actual performance and the standard of performance determined under paragraph (a), and a statement of the action that it is taking to correct any shortfalls in its performance.").

The noble Baroness said: The amendment inserts a new clause to provide for the Housing Corporation and its equivalent in Wales to be required after consultation to publish from time to time a statement of the standards of performance which it intends to achieve and to arrange for that publication.

The amendment addresses a fundamental anxiety which I can express without in any way making pejorative remarks about the Housing Corporation as it exists. It is not intended to be an attack; it is intended to be a positive move to make the corporation more accountable to the public and to registered social landlords for the way in which it carries out its routine regulatory functions.

The Bill re-enacts and extends the powers of the corporation to regulate, to give guidance on and to monitor the activities of housing associations and, in the future, all registered social landlords. I do not seek to challenge that role. It is, of course, a counterpart to the channelling of public funding through the corporation. I appreciate too that private lenders who invest in housing associations need the reassurance that monitoring is being properly conducted.

However, any system of supervision and regulation should have a basic principle that is transparent to all concerned. That allows decision makers and those who are affected by regulation to assess the risks involved and also to understand the way in which their performance is being measured. One of the anxieties about the increasing use of performance indicators is that they can be read out of context and it is important to make measures of performance clear.

The amendment would require the corporation to publish a statement drawing the links between the risks that are envisaged and the actions that it will carry out to guard against or to mitigate them. Social landlords have costs imposed upon them by regulation. The regulatory decisions affect their day-to-day activities. They have a need to know. The amendment provides for procedures and timescales and it also requires the corporation to compare its intended performance with its actual performance.

Since the Bill was published I have received, as no doubt have other Members of the Committee, the Housing Corporation paper entitled Changing Responsibilities: The Housing Corporation's Priorities and Targets for the period 1996 to 1999. It may well be that the Minister will tell me that the fact that such a document is published should allay my fears. Of course, it does not do so because arrangements can change. However, it is useful to point to two or three words in the document. In talking about the achievements since the 1988 Housing Act, the report refers to the corporation's tasks as having increased in both scale and complexity and refers to its business responsibilities. It also has a section on administration and efficiency. That is rightly a very businesslike approach to what is very big business. But it is big business conducted on behalf of the public. It is public sector money, public sector business. I believe that, accordingly, public sector accountability to the relatively limited extent I am proposing is the minimum which the public is entitled to expect. I beg to move.

Lord Williams of Elvel

I support the amendment. As I said on Second Reading, one of the fundamental problems in the Bill is in relation to the accountability of the Housing Corporation. This amendment addresses that problem. It may not do so in words which the Government like and it may be that there are other points which we should wish to build in. But there is a fundamental principle which at present is not observed that the Housing Corporation should be treated, as I think I said on Second Reading, like any other government department. In other words, it should produce an annual report, and that annual report should be scrutinised by Parliament. It should produce an annual report, in the words of the amendment, after consultation with persons or bodies appearing to it to be representative of registered social landlords and any other persons or bodies that it thinks fit from time to time". It must publish a statement of standards of performance. It must justify its existence and how it operates, and Parliament must approve.

The amendment covers a large part of my argument. I hope very much that the Government will not simply brush it aside. As I said on Second Reading, the Housing Corporation is to be given massive powers. Our discussions on Clause 30 have shown them to be even more massive than I had originally expected. If that is so, it is only right that the corporation should come under proper parliamentary control and be properly accountable. For that reason, on this side of the Committee, we strongly support the amendment moved by the noble Baroness, Lady Hamwee.

Lord Lucas

I hope that I shall be able to give the noble Baroness some comfort on this matter. We are very much ad idem as regards wanting this body to be properly accountable. What we are doing and what we propose to do, we believe, will be as good as that which the proposed amendment seeks to achieve. Responsibility for the corporation rests with the Secretary of State. He allocates funding to the corporation and sets the broad targets which he expects it to achieve in support of government policy.

Lord Williams of Elvel

I apologise for interrupting the Minister at the beginning of his speech, but there lies the problem. The Housing Corporation is responsible to the Secretary of State. If the Housing Corporation and Housing for Wales are to be properly accountable, they should be properly accountable to Parliament and not the Secretary of State. We have heard time and time again that the Secretary of State cannot answer questions because the organisation involved is a quango or a new next steps agency. That is the problem which appears in the first sentence of the noble Lord's brief.

Lord Lucas

I understand that that is an argument advanced in relation to quangos. However, we believe that it is a structure which has great advantages in some circumstances; namely, it can be allocated clearly defined tasks in a limited policy area where some distance from day-to-day politics is a positive advantage. We believe that that applies to the Housing Corporation and that it is better off with its present status. The noble Lord, Lord Williams, may not be aware that the noble Lord, Lord Carter, on 3rd July, will be advocating that powers be taken away from the Ministry of Agriculture and given to a new quango.

Lord Williams of Elvel

I am all in favour of my noble friend advocating that powers be taken away from the Ministry of Agriculture since it made such an absolute, total nonsense of the beef crisis. In view of that, I believe that all powers should be taken away from the Ministry of Agriculture. That has nothing to do with the present argument.

Lord Lucas

It illustrates the point that, in the right circumstances, the noble Lord's party is prepared to advocate the use of the particular structure which is used for the Housing Corporation. It is something which has positive advantages, and we believe that that is so in this particular case. Nevertheless, it must be made properly accountable.

Baroness Jay of Paddington

I hesitate to intervene in a debate which is certainly not my concern. However, the noble Lord, Lord Lucas, referred to my noble friend's Starred Question which is tabled for 3rd July. I do not wish to read my noble friend's mind but I believe that he is suggesting that the Food Standards Agency should be placed within the Department of Health rather than remain a responsibility of MAFF. That is certainly my understanding of the phrasing of the Question. If that is the reference which the noble Lord makes, I suspect that he is mistaken.

Lord Lucas

I shall wait to see whether I am correct. I may have misunderstood the noble Lord.

The corporation is required to report annually to the Secretary of State who, in turn, is required to lay copies of the report before Parliament. Parliament exercises its oversight of the corporation's performance through its normal processes. It may require the Secretary of State to report to it on any specific aspect or it may call the corporation to account for its performance to any of the committees established for that purpose in another place. It is also subject to the oversight of the Comptroller and Auditor General.

The corporation supports and assists the Secretary of State to meet government policies and objectives. It rightly falls to the Secretary of State to set targets for the corporation covering each of its functions. That is done through the annual corporate plan prepared by the corporation and discussed and agreed with the Secretary of State. In setting out its proposals for approval the corporation is expected to have regard to the impact its plans will have on the sector and to ensure they make a contribution towards the Government's objectives. The corporation has also established a practice, referred to by the noble Baroness, Lady Hamwee, whereby it publishes annually at the commencement of the financial year a three—year planning document where it sets out in detail the objectives agreed with the Secretary of State.

The committee chaired by the noble and learned Lord, Lord Nolan, has recently examined public spending bodies, including housing associations. One aspect it looked closely into was the openness and accountability of the corporation in its regulatory function. It recommended that the corporation give more consideration to bringing into the public arena more information on its performance as a regulator and the lessons learned from its regulatory interventions in housing associations and registered social landlords.

The corporation is actively considering those recommendations and will be giving effect to them later this year.

In general, the Housing Corporation, like other public bodies, takes its responsibilities seriously and is striving to be more open and consultative. Following debate in another place, we introduced a series of statutory duties to consult. But there is a danger of over—prescription.

The noble Baroness proposed that the corporation be required to consult annually before setting its performance targets under its regulatory powers as detailed in Clauses 30 to 38 of the Bill. The corporation is required to take soundings from the sector and those involved in it before submitting its proposals covering all of its functions to the Secretary of State for approval. A separate exercise here would appear to be unnecessary.

The noble Baroness also proposed that the corporation publish its proposals and arrange for publication, at least annually, of a comparison of performance against the targets set. We support the thought which lies behind that, but the corporation already publishes an annual report which is presented to the Secretary of State and laid before Parliament. That would seem to be the appropriate vehicle for such comparisons.

The corporation is taking forward a number of measures designed to improve its accountability to Parliament, the registered social landlord sector and the wider public. It strives to be a best practice organisation. It is accountable to the Secretary of State and serves a vocal and well-informed sector. To introduce a further requirement for consultation and publication would be an unnecessary administrative burden and would be unlikely to add to the information already in the public domain, particularly in view of the further assurances that I have given today. I consider the new clause to be unnecessary. I invite the noble Baroness to withdraw the amendment.

Baroness Hamwee

The Minister said that the Housing Corporation and Housing for Wales are responsible to the Secretary of State. He then went on to say that they should be distanced from politics. I do not believe that I need do more to ally those two comments than say that the Minister cannot have it both ways. What the noble Lord described could be put in rather different words; for example, a rather cosy tête-à-tête between the corporation and the Government, not the consultation that the amendment proposes.

The Minister told us that the Nolan Committee has recommended that more information be put into the public arena. He also gave us assurances that the corporation is actively considering those recommendations and that it will take action later this year. We are so often reminded about the shortage of parliamentary time. However, we have a big housing Bill before us which deals with the Housing Corporation. Why do the Government fear using the Bill as a vehicle for widening the responsibilities of the Housing Corporation in the area of openness, transparency and consultation; and, indeed, as regards working with others in the sector?

The Bill seems to me to be the most appropriate vehicle for taking all those activities further and putting into legislative form the assurances that we are being asked to take account of this afternoon. Virtually everyone else in the sector suffers prescription from the Bill; I do not believe that the Housing Corporation should be an exception. I should like to test the opinion of the Committee.

5.32 p.m.

On Question, Whether the said amendment (No. 132) shall be agreed to?

Their Lordships divided: Contents, 74; Not-Contents, 146.

Division No. 1
CONTENTS
Addington, L.	Jenkins of Putney, L.
Allenby of Megiddo, V.	Judd, L.
Archer of Sandwell, L.	Kilbracken, L.
Barnett, L.	Lockwood, B.
Beaumont of Whitley, L. [Teller.]	McIntosh of Haringey, L.
Berkeley, L.	Mackie of Benshie, L.
Blease, L.	McNair, L.
Borne, L.	Mar and Kellie, E.
Broadbridge, L.	Masham of Ilton, B.
Carmichael of Kelvingrove, L.	Mason of Barnsley, L.
Carter, L.	Merlyn-Rees, L.
Clinton-Davis, L.	Methuen, L.
Cocks of Hartcliffe, L.	Mishcon, L.
Dahrendorf, L.	Monkswell, L.
David, B.	Morris of Castle Morris, L.
Dean of Beswick, L.	Nicol,B.
Dean of Thornton-le-Fylde, B.	Rea, L.
Dormand of Easington, L.	Rochester, L.
Dubs, L.	Rodgers of Quarry Bank, L.
Farrington of Ribbleton, B.	Russell, E
Fisher of Rednal, B.	Seear, B.
Fitt, L.	Sefton of Garston, L.
Gallacher, L.	Simon, V.
Geraint, L.	Stoddatt of Swindon, L
Glenamara, L.	Strabolgi, L.
Graham of Edmonton, L. [Teller.]	Taylor of Blackburn, L.
Gregson, L.	Tenby, V.
Grey, E.	Thomas of Walliswood, B.
Hamwee, B.	Thomson of Monifieth, L.
Harris of Greenwich, L.	Tordoff,L
Haskel, L.	Turner of Camden, B.
Hilton of Eggardon, B.	Wallace of Coslany, L.
Hollis of Heigham, B.	Wallace of Saltaire, L
Howie of Troon, L.	Wharton, B.
Hylton, L.	White, B.
Jay of Paddington, B.	Williams of Elvel, L.
Jeger, B.	Winston, L.
NOT-CONTENTS
Aberdare, L.	Brabazon of Tara, L.
Ailsa,M	Braine of Wheatley, L.
Aldington, L.	Bridgeman, V.
Alexander of Tunis, E	Brougham and Vaux, L.
Ashbourne, L.	Bruntisfield, L.
Astor of Hever, L	Cadman, L.
Balfour, E.	Campbell of Alloway.L
Barber, L.	Carew, L
Berners, B.	Carnegy of Lour, B.
Biddulph, L.	Carnock L.
Birdwood, L.	Chalker of Wallasey, B.
Blake, L.	Chelmsford, V.
Blatch, B.	Chesham, L. [Teller.]
Blyth, L.	Clanwilliam, E.
Boardman,L.	Clark of Kempston, L.
Bowness, L.	Courtown, E.
Boyd-Carpenter, L.	Craigavon, V.

Cranborne, V. [Lord Privy Seal]	Mowbray and Stourton, L.
Crickhowell, L.	Moyne, L.
Cuckney, L.	Munster, E.
Darcy (de Knayth), B.	Napier and Ettrick, L.
Dean of Harptree, L.	Nelson, E.
Denton of Wakefield, B.	Newall, L.
Dixon-Smith, L.	Norrie, L.
Eden of Winton, L.	Northesk, E.
Ellenborough, L.	O'Cathain, B.
Elton, L.	Onslow, E.
Feldman, L.	Orkney, E.
Ferrers, E.	Orr-Ewing, L.
Gainsborough, E.	Oxfuird, V.
Gardner of Parkes, B.	Palmer, L.
Gisborough, L.	Park of Monmouth, B.
Goschen, V.	Pender, L.
Gray of Contin, L.	Peyton of Yeovil, L.
Gridley, L.	Pilkington of Oxenford, L.
Grimston of Westbury, L.	Plummer of St Marylebone, L.
Halsbury, E.	Quinton, L.
Harding of Petherton, L.	Rankeillour, L.
Hardinge of Penshurst, L.	Rawlings, B.
Harmsworth, L.	Reay, L.
Hayhoe, L.	Rees, L.
Henley, L.	Renfrew of Kaimsthorn, L.
Holderness, L.	Rodney, L.
Hothfield, L.	Romney, E.
Huntly, M.	Saint Albans, D.
Hylton-Foster, B.	St. Davids, V.
Inchyra, L.	St John of Bletso, L.
Kimball, L.	Saltoun of Abernethy, Ly.
Kingsland, L.	Sandford, L.
	Savile, L.
Lane of Horsell, L.	Seccombe, B.
Lauderdale, E.	Sharples, B.
Leigh, L.	Shaw of Northstead, L.
Lindsay, E.	Simon of Glaisdale, L.
Lindsey and Abingdon, E.	Soulsby of Swaffham Prior, L.
Long, V.	Stevens of Ludgate, L.
Lucas, L.	Stockton, E.
Lyell, L.	Strange, B.
McConnell, L.	Strathcarron, L.
Mackay of Ardbrecknish, L.	Strathclyde, L. [Teller.]
Mackay of Clashfern, L. [Lord Chancellor.]	Sudeley, L.
	Swinfen L.
Mackay of Drumadoon, L.	Tebbit, L.
Macleod of Borve, B.	Teviot, L.
Marlesford, L.	Thomas of Gwydir, L.
Massereene and Ferrard, V.	Trumpington, B.
Mersey, V.	Ullswater, V.
Middleton, L.	Wade of Chorlton, L.
Miller of Hendon, B.	Weatherill, L.
Milverton, L.	Whitelaw, V.
Monteagle of Brandon, L.	Wilcox, B.
Montgomery of Alamein, V.	Wise, L.
Mottistone, L.	Wynford,L.
Mountevans, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.41 p.m.

Lord Williams of Elvel moved Amendment No. 133: Before Clause 39, insert the following new clause— SOLVENCY TEST OF SOCIAL LANDLORD (". The tests of solvency or otherwise of a registered social landlord shall be those specified in section 123 of the Insolvency Act 1986.").

The noble Lord said: It may be for the convenience of the Committee if I also speak to Amendment No. 134. The problem of solvency is one which has exercised many people and many minds which are more learned than mine. At the moment I am wholly unclear about what the Government mean by solvency in the case of a registered social landlord. Having followed the progress in this Chamber of the Insolvency Act, as it now is, in 1986, I think I am aware of what is insolvency in terms of a company under the Companies Act. Where I am in doubt is how the Government recognise—or how anyone recognises—solvency or insolvency in the case of a registered social landlord; in other words, in the case of a housing association.

I shall refrain from drawing the attention of the noble Lord, Lord Lucas, to the problem involved with the possible differential definition of solvency between a Companies Act company and a housing association or a registered social landlord which is not a Companies Act company. No doubt we shall discuss those matters further on Report. However, there seem to me to be some serious differences at the moment between the two. I should be grateful therefore if, in response to my amendment, the Minister would give the Committee a clear definition of what insolvency means in terms of a social landlord. What is the solvency test? Is it the same solvency test as in Section 123 of the Insolvency Act 1986, and, if not, what is it? If that is the case, how does that chime with other insolvency regulations? If, indeed, the Minister cannot give a true explanation, will he take this away and consider giving such an explanation when we reach Report stage?

I hope that I do not have to emphasise to the Minister that this is a question of enormous importance. Those who trade—even people who trade for non—profit, however that is defined, and we are not entirely clear on that—when insolvent commit criminal offences. That is particularly true of companies under the Companies Act 1985. I very much hope that the noble Lord will be able to give the Committee a clear and defined view of what solvency means in the case of a registered social landlord. If he cannot do that, I hope that he will take it away and give us such a definition when we reach the Report stage. I beg to move.

Lord Lucas

At the risk of getting a hasty note from the Box, I think the answer to the noble Lord's question is in the words "Insolvency, &c.". This is not really a section about insolvency; it is a section about insolvency and that sort of thing with "and that sort of thing" being rather loosely defined, and powers being there to modify and extend it to deal with any sort of problem which may arise which could tip a registered social landlord into the sort of difficulties from which the corporation would want to be able to dig it out.

Looking first at the particular amendment which the noble Lord, Lord Williams, has proposed—

Lord Williams of Elvel

Before the noble Lord goes on, he has referred to "Insolvency &c". That is in the rubric of the clause. The rubric of the clause, when it is enacted, is not part of the legislation.

5.45 p.m.

Lord Lucas

I quite agree, but I hoped that it might give a clue as to where this part of the Bill is heading. We are not trying to redefine insolvency; we are trying to define a set of circumstances where the Housing Corporation should have to take action. Insolvency is the base of that. I address myself first to the particular amendment that the noble Lord, Lord Williams, has proposed. He will see that this section deals with much wider circumstances because the amendments he has proposed would prevent the powers in Clauses 39 to 49 taking effect where creditors are enforcing security for other reasons—for instance, where a property is being used for purposes not specified in the charge deeds. One such example, is if the housing association was running a bordello, and another is where a landlord who has received transferred local authority stock has failed to meet designated right-to-buy targets. These are clearly nothing to do with insolvency but they trigger events and securities and create the sort of problem one would meet with insolvency.

It is that whole set of circumstances that we are dealing with in these clauses. One might also suggest the case where lenders dissent from the terms of a proposed merger of two social landlords. We are dealing in these clauses with a much wider set of circumstances than insolvency. Financial failure among housing associations is, thankfully, as yet unknown. There are severe difficulties but, to date, meltdown has been avoided with help from the Housing Corporation. Therefore the use of the new powers that we propose will clearly not be an everyday occurrence. Indeed one might look at them as a backstop. The fact that they are there may well mean that under normal circumstances they are never used.

Lord Williams of Elvel

I am sorry to interrupt the noble Lord in mid-flight but he says that these are almost unknown circumstances. Nevertheless the clause deals with interventions by the corporation under the circumstances which—leaving aside the rest of it—I have described; that is, insolvency. It may be "Insolvency,&c.", but it is also insolvency. The question that I am putting to the noble Lord is not whether there has been any case of insolvency in housing associations; it is not even whether there has ever been a case of insolvency in Companies Act companies, because there have been many cases of insolvency of Companies Act companies; I am trying to elicit from the noble Lord a definition of what constitutes insolvency in a housing association. Is it that it cannot pay its bills over the next 12 months? Is it, alternatively, that it has a negative net worth? Is it, alternatively, that it has negative current assets? Is it, alternatively, that it is trading at a loss and that in the short term it cannot meet the provisions of that loss? I search for a definition. If a housing association is registered as a social landlord, should the Bill be enacted, what should it and the corporation regard as an issue which justifies intervention under this clause?

Lord Lucas

I hope that as I continue I shall throw some light on the noble Lord's question. However, the fundamental answer is that the Bill does not define insolvency. Those definitions are contained in other Acts. The Bill is concerned with consequences of events which occur when a company becomes insolvent.

Lord Williams of Elvel

I am sure that the noble Lord will throw a lot of light on the matter when he responds. However, perhaps he will be good enough to tell me in which sections of which Acts insolvency is defined for housing associations, or registered social landlords as we now call them. I know about the Companies Act. That information would remove the need for my amendment referring to the Insolvency Act 1986.

Lord Lucas

It is the Act which contains the governing law on insolvency. That is the Act which we would expect to apply to housing associations, not through the instrument of this Bill but because that legislation applies to them anyway.

The Bill is designed to deal with the consequences of insolvency, and events which have a similar effect to insolvency, to make sure that housing can be retained within the social sector rather than having to be disposed of on the open market with all the consequences that that would have for tenants.

I shall come to the ways in which the Bill works with the insolvency laws, but I do not believe that it is intended that the Bill should create any separate definition of insolvency. The triggering point is a step taken by someone, usually a secured creditor, which results in the social landlord being in danger of dissolution and its assets being sold in the private sector.

Clauses 39 to 49 are triggered by an event. I do not believe that there is any necessity in that process to define insolvency. One merely defines the set of events which trigger those clauses, some of which might involve an insolvency process, and some of which might be matters totally unconnected with insolvency but connected with the specific terms of a charge that a lender has over a piece of property.

Lord Williams of Elvel

I believe that this will be a continuing debate. Under the Insolvency Act 1986, the main burden of declaring a company insolvent is not on a secured creditor or a shareholder. It is on a board of directors which takes the view, on advice, that its company should no longer be trading. In other words, if it goes against the advice it will be trading when insolvent and trading unlawfully.

The noble Lord recognises the problem that I put forward. He states that events are triggered by a secured creditor. They are not triggered by a secured creditor but by a director of the company—under the Companies Act in the case of a Companies Act 1985 company.

Will the same arrangements be relevant for the council of a housing association? Are they relevant at present? If the council of a housing association decides under the terms of Section 123 of the Insolvency Act, even if it is an industrial provident society, "We cannot go on trading because we are insolvent", does that trigger the matters which the noble Lord explained to me under Clause 39 of the Bill? If that is the case, let us know it.

Lord Lucas

We are in some difficulty because we are referring to different things. The noble Lord talks about matters governed by the governing legislation of the specific type of vehicle. It may be a Companies Act company, an industrial provident society, a charitable trust or various other types of vehicle. Whether or not they are insolvent will depend on the legislation governing those types of vehicle.

This Bill is concerned with the consequences of insolvency: that the housing may be put in danger of being sold on the open market. It concerns the corporation's power to deal with that, whether or not the event is due to insolvency.

Perhaps I may be allowed to make some progress in my general peroration on the subject. I do not count on giving the noble Lord the comfort that he requires but it may at least help.

The consequences of insolvency for all parties could be disruptive and expensive. The housing and public funds invested could be transferred from the social rented sector to the private rented sector. Rents could and very likely would rise to market levels. Housing benefit expenditure would rise. The Government, taxpayers and tenants would lose the benefit of the sub-market rents secured by the original capital subsidy.

This Bill introduces a moratorium following insolvency during which creditors will not be able to dispose of the landlord's land. During this period the corporation will develop a proposal which will retain the housing within the social rented sector, if necessary transferring it to an alternative landlord. With the secured creditor's consent the corporation will be able to appoint a manager to implement all or part of its proposal.

The provisions in the Bill represent a major improvement on the current position. Existing legislation does not give the corporation any right to intervene or any powers to assist if a housing association faces insolvency. The matter is dealt with entirely informally at present.

The Bill provides a statutory role for the corporation to draw up proposals which protect tenants and taxpayers' funds. It ensures that there is no leakage of social housing out of the sector until the corporation has tried to sort things out.

The earlier versions of these clauses were unacceptable to lenders because they put the corporation in control and removed lenders' automatic right to enforce their security in line with their charge deeds. After extensive discussion, the clauses were radically revised so that the corporation could act only if it had the unanimous consent of secured creditors. Lenders are now broadly content with the clauses.

The main body of existing law governing insolvency is contained in the Insolvency Act 1986. By and large the provisions in Clauses 39 to 49 run parallel with this legislation. Thus, while Clauses 40 and 41 require creditors of a registered social landlord to give notice to the corporation before and after they take a step to enforce their security, creditors are not prevented from taking such steps. So receivers or administrators could be appointed to manage the landlord's assets. A liquidator could be brought in to wind up the landlord or the creditor could take over as mortgagee in possession of the landlord's housing.

There are, however, two ways in which Clauses 39 to 49 affect the operation of established insolvency law. First, as soon as any step is taken to enforce security over a landlord's land there is, as I mentioned, a time-limited moratorium on the disposal of that land. This means that for the duration of the moratorium, which will be a minimum of 28 days, neither the landlord nor any creditor or insolvency practitioner can dispose of the land. They can engage in other activities. For instance, a receiver could take over the management of the housing, but he would not be able to sell it. The moratorium provides essential protection to the landlord's tenants and taxpayers' money which has been invested in his housing. During this period, the corporation will put forward a proposal which seeks to retain the housing within the social rented sector. The agreement of all secured creditors will be needed before the proposal can be implemented. This is the second area where these clauses affect existing insolvency legislation.

The proposals put forward by the corporation, once agreed by secured creditors, bind both those creditors and any insolvency office holder appointed over the landlord. An insolvency officer's powers may be derived from statute case law or from contract. Whatever the basis on which an office holder, for instance, a receiver, administrator or liquidator, has been appointed, his action must not frustrate the implementation of the corporation's proposal. For instance, an insolvency office holder would not be able to derail the implementation of a proposal by selling property which was affected by the proposal.

It is possible that the corporation will not be able to put together a proposal that secures the unanimous consent of the insolvent landlord's secured creditors. If the moratorium ends without an agreed proposal in place, then the corporation will bow out and creditors will be free to proceed without further corporation involvement. The restraint on the disposal of the landlord's housing will be lifted. There will then be no guarantees that it will remain within the social rented sector. This is a situation which the corporation would strive to avoid; but the Government have accepted that if an acceptable corporation proposal is not available, then lenders must be able to protect their investors and take whatever action is open to them to recover their money. There are a number of amendments later which will clarify some of the particular aspects of the ways in which the proposals will work.

The noble Lord, Lord Williams, asked earlier whether the Companies Act insolvency arrangements would be appropriate for a housing association. If a housing association decides that it cannot go on trading, it would tell its bank which would enforce its security or it would resolve to be wound up, both of which are events mentioned in Clause 40(2) as triggering the provisions of this part of the Bill.

6 p.m.

Lord Hylton

I am very much in sympathy with the Government's intentions in the clauses. It is most important to protect tenants and to ensure, so far as possible, that social housing remains available for its primary purpose. The same applies to land intended for social housing. However, I urge the Government to take into account also the interests of unsecured creditors. I think particularly of builders, contractors and suppliers of a wide range of goods and equipment. Such people may well think that they are dealing with strong, well-endowed associations, trusts or authorities. If they go bankrupt, the consequences for employment are likely to be rather serious. I do not know whether the Government can do anything to give protection in that direction. I do not expect an immediate reply, but it is worthy of consideration.

Lord Williams of Elvel

I am sure that the Government will give their reply in the course of time. I am grateful to the Minister for explaining the purpose of Clause 39. I still have problems about insolvency and what constitutes insolvency across the range of those organisations under different governing Acts who could be registered social landlords. I hope that when we come to Report the Government will have sorted out their position on it because I believe there is a difference between a Companies Act company, an industrial provident society and a charity, as well as the duties of directors of a Companies Act company and a member of the council of a housing association under the Housing Act, and so on. This lends force to Amendment No. 135 which I shall move later. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 39 [Insolvency, &c. of registered social landlord: scheme of provisions]:

[Amendment No. 134 not moved.]

Lord Williams of Elvel moved Amendment No. 135: Page 23, line 16, at end insert— ("() The Corporation shall establish and publish a Code of Practice as to the use of its powers under the sections listed in subsection (1) above, taking account of the interests of the tenants of the registered social landlord and the interests of the landlord and its creditors, both secured and unsecured, and shall—

1. (a) consult such bodies appearing to it to be representative of tenants, registered social landlords and lenders as it considers appropriate, before establishing the Code; and
2. (b) review and amend the Code if requested to do so by the Secretary of State or whenever it considers this to be necessary, and in doing so shall consult the bodies referred to in paragraph (a) above.").

The noble Lord said: This amendment stands in my name and that of the noble Baroness, Lady Hamwee. It is exactly what I was trying to get from the Government in our last discussion, that the corporation should establish a code of practice on how it will use its powers under Clause 39(1). It seems to me, from what the noble Lord, Lord Lucas, said, that it would be a worthwhile exercise and we could all understand better than I do at the moment what the Government intend by the legislation. I beg to move.

Lord Lucas

In considering this amendment, I ask the Committee to remember that the new powers in Clauses 39 to 49 are likely to be used on very few occasions. There is no telling when these powers will first be used—it could well be several years from now—or what circumstances the corporation will face when it finds it has to use them. Given this unpredictability, we do not believe that the general code the noble Lord has in mind would be particularly useful. The corporation and others would have to engage in some highly speculative thinking about the wide range of circumstances the corporation might confront in real life. It is quite possible that lenders, the National Federation of Housing Associations and tenants' organisations, would labour for months to produce a statutory document which is then not used for several years and which, when it is at last used, does not actually help the corporation to tackle the case that it is confronting.

The powers in these new clauses are important, and we have no doubt that the corporation will want to think carefully about how it might use them. My honourable friend in another place agreed to consider whether a code of some description would be appropriate. The Government have concluded that there is merit in drawing up a code of guidance on the procedures that each party would follow when the powers are used. This would help to ensure that the new powers worked smoothly, so that there are no procedural hiccups—for instance, on the giving of notice, or on the way in which the corporation consults and has regard to various parties' interests.

However, I do not think that the kind of statutory code that the noble Lord described in his amendment would be an especially helpful or useful document when it came to a messy real life situation. Indeed, the existence of a rigid statutory code drawn up on a basis which must necessarily at present be speculation and guesswork could frustrate the successful use of the clauses, whatever the situation that they might be called upon to deal with. In the light of those comments, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Williams of Elvel

The Minister has put his finger on the point. The clauses have been arrived at after a great deal of negotiation between the Government, the Housing Corporation, private lenders and the NFHA. All admit, as the Minister admitted, that there are certain to be flaws, rough edges and difficulties in their application, if occasion ever arises for the clauses to be invoked.

We shall come to subsection (3) and the power of the Secretary of State to amend Clause 39 as he wishes. The problem is that registered landlords do not know how the Housing Corporation, the Secretary of State or anyone else will approach the powers under Clause 39. All we ask is that the delicate balance between lenders, tenants, social landlords and the corporation should in some form be set out so that people could be a little more certain than at the moment flow Clause 39, which was scrambled together in something of a hurry, might operate in the future.

I am not asking for a code of practice that is set for ever in stone. It is simply a statement which may come in a ministerial statement at Report stage and we would welcome it. The statement would be on how the clause might be operated by the Housing Corporation. Having heard what the Minister said, and with those comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Williams of Elvel moved Amendment No. 136: Page 23, line 21, leave out ("(including a floating charge)").

The noble Lord said: The order of the wording on page 23 line 21 is a little odd. A "floating charge" is a floating charge; in other words, it is a charge over the assets of an organisation. It is transferable from one asset to another. That is the definition of a floating charge. There can be no such thing as a floating charge over land. In the Bill as worded, it seems to be a floating charge over land; but, as any qualified accountant or banker could tell the Committee, that is not sensible. I ask the Government to look at the drafting.

It may be for the convenience of the Committee if, while I am on my feet, I address Amendment No. 137. Although it is not formally in the grouping, it might be useful for me to do so, if it is acceptable to the Committee in order to get proceedings moving.

Amendment No. 137 allows the Secretary of State to make provision defining the purposes of the section. This relates to Amendment No. 135, which we discussed. I find it an odd and uncomfortable situation whereby a clause is produced in a Bill; the Secretary of State can amend the clause as he wishes and any such order is by negative instrument. That is the purpose of Amendment No. 137. I hope the Committee will not mind my speaking to the two amendments together. The one relating to the floating charge is a technical one. I beg to move.

Lord Lucas

I am in complete agreement with the noble Lord, Lord Williams, as to what a floating charge is and what its definition is. The reference to a floating charge in Clause 39 is intended to make it clear that the term "secured creditor" encompasses a creditor holding a floating charge over a landlord's assets which happen to include his land. There is nothing in the present wording that would lead us to adopt a more unusual or restrictive interpretation of the term "floating charge". The present wording therefore appears to us to be adequate. Nevertheless, we shall reflect on the noble Lord's remarks and check again as to whether there is any need to amend it. I hope that will enable the noble Lord, Lord Williams, to withdraw that amendment.

Turning to Amendment No. 137, in order for these clauses to work effectively, lenders and the corporation must have a clear idea of the triggers that will activate a moratorium. In the large majority of cases the steps being taken to enforce security will be familiar ones—for instance the appointment of a liquidator, administrative receiver, or receiver.

But these are not the only actions that secured creditors may take. Lenders may also decide to use their mortgagee in possession powers. There may be specific terms within a charge deed that we would wish to define as constituting a "step". We need to bear in mind, too, that lending practices to this sector are evolving and becoming more sophisticated. The forms of security that lenders are taking are becoming more varied. The provisions in Clauses 39 to 49 need to be able to keep up with such developments.

We therefore need to discuss with lenders whether there are any other actions that should be included in the definition of a "step". These would then be set out in a statutory order, to supplement the specific notice provisions on the face of the Bill. I hope that explains why we feel that we need that particular part of the Bill.

Lord Williams of Elvel

I am grateful to the Minister for his response. The question of the floating charge is a matter of drafting. I suggest that line 20 on page 23 of the Bill might read: "'Secured creditor' means a creditor who holds a floating charge or a mortgage or charge over land". Then, as a banker, I think I should understand it. The wording as it stands seems to confuse what is a floating charge with a mortgage or charge over land. I offer that suggestion in the friendliest possible spirit to the parliamentary draftsman.

Turning to the question of the Secretary of State amending Clause 39, I am grateful for the Minister's remarks. He said that the Secretary of State would consult widely before making such provisions. That is the point that we are trying to get at. It cannot just be for the Secretary of State, on a whim or whatever, to make an order subject to negative resolution procedure. On the assurance that the Secretary of State, whoever he or she may be in the future, will consult widely on the application of subsection (3) of Clause 39, I beg leave to withdraw Amendment No. 136.

Amendment, by leave, withdrawn.

[Amendment No. 137 not moved.]

Clause 39 agreed to.

Clause 40 [Initial notice to be given to the Corporation]:

Lord Lucas moved Amendment No. 138: Page 23, line 31, leave out ("in writing").

The noble Lord said: I spoke to this amendment with Amendment No. 56. I beg to move.

On Question, amendment agreed to.

6.15 p.m.

Lord Lucas moved Amendment No. 139: Page 24, line 10, leave out ("charitable trust") and insert ("registered charity (other than a company registered under the Companies Act 1985)").

The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 140, 147 and 148.

Clauses 40(4) and 41(4), as drafted, do not apply to registered charities which are neither Companies Act companies nor trusts. Such registered landlords should be covered by the requirement to give notice contained in these clauses. Amendments Nos. 139 and 140 achieve this.

Clauses 40(5)(a) and 41(5) exempt certain bodies such as the Attorney-General and the Charity Commissioners from giving notice to the Housing Corporation. The assumption is that the corporation will not require notice, because these are public bodies and the corporation will know what they are doing without requiring formal notice.

In reality the corporation will not always have close contacts with such bodies. The exemption on giving notice effectively places an onus on the corporation to keep abreast of what these other bodies are doing, and on those bodies to keep the corporation informed. On balance, it seems simpler to extend the requirement to give notice so that it applies to these bodies, and Amendments Nos. 147 and 148 achieve that. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 140: Page 24, leave out lines 15 to 17.

The noble Lord said: I have just spoken to this amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 141 not moved.]

Clause 40, as amended, agreed to.

Clause 41 [Further notice to be given to the Corporation]:

Lord Lucas moved Amendment No. 142: Page 24, line 23, leave out ("in writing").

The noble Lord said: I spoke to this amendment with Amendment No. 56. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 143: Page 24, line 24, leave out ("events") and insert ("steps").

The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 144 to 146, 149, 150, 155, 158, 180, 189 and 193.

Amendments Nos. 143, 144, 145, 146, 149, 150, and 155 replace the terms "events" and "occur" with "steps" and "are taken", thereby standardising the terminology used in Clauses 39 to 49.

Amendments Nos. 158, 180, 189 and 193 ensure that the references to trusts in Clauses 44, 57 and 63 and paragraph 7(6) of Schedule 2 tie in with existing charities legislation. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendments Nos. 144 to 148: Page 24, line 24, leave out ("occurs") and insert ("is taken"). Page 24, line 29, leave out ("events") and insert ("steps"). Page 24, line 38, leave out ("events") and insert ("steps"). Page 25, line 5, leave out ("charitable trust") and insert ("registered charity (other than a company registered under the Companies Act 1985)"). Page 25, line 10, leave out subsection (5).

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

On Question, amendments agreed to.

Clause 41, as amended, agreed to.

Clause 42 [Moratorium on disposal of land, &c.]:

Lord Lucas moved Amendments Nos. 149 and 150: Page 25, line 16, leave out ("events") and insert ("steps"). Page 25, line 16, leave out ("occurs") and insert ("is taken").

The noble Lord said: I spoke to both of these amendments with Amendment No. 143. I beg to move.

On Question, amendments agreed to.

Lord Lucas moved Amendment No. 151: Page 25, line 21, leave out from ("or") to end of line 23 and insert ("any person having a power of disposal in relation to the land").

The noble Lord said: In moving this amendment I shall speak at the same time to Amendments Nos. 153 and 154.

The current drafting of the Bill fails to include certain parties, such as mortgagees in possession, in the moratorium on the disposal of land. In order to be effective the moratorium should apply to any person who has a power of disposal in relation to the land. Amendment No. 151 achieves that.

It is possible that any of the steps described in Clause 39 may be rescinded during the period of a moratorium. The landlord might, for instance, have been able to satisfy the requirements of the creditor who sought to enforce their security. In those circumstances the threat to the future of the landlord's social housing will have receded, and the corporation will no longer need to develop a proposal. The need for a moratorium on disposals will also have disappeared.

Amendments Nos. 153 and 154 recast Clause 43 to give the corporation the power to terminate a moratorium if it believes that the continued management of the landlord's housing by a registered landlord can be achieved without making a proposal. I beg to move.

Lord Williams of Elvel

I am a little concerned about the wording: any person having a power of disposal in relation to the land". I understand from the Minister's explanation that that means that organisations, such as banks, building societies or whatever, will have a charge over the land which is the subject of Clause 42. Whether that contains a power of disposal is a moot point as is the question of whether a charge in itself constitutes a power of disposal.

This may be a drafting point, but I should be grateful if the noble Lord could clear it up.

Lord Lucas

I cannot clear it up on the hoof. But I shall certainly write to the noble Lord.

Baroness Hamwee

This is similar to a point about charges, assignments and disposals which occurred earlier in the Bill. I believe that the noble Lord will find that he is satisfied with the response that comes via the Minister, because charges generally do contain assignments.

On Question, amendment agreed to.

[Amendment No. 152 not moved.]

Clause 42, as amended, agreed to.

Clause 43 [Period of moratorium]:

Lord Lucas moved Amendments Nos. 153 to 155: Page 25, line 35, leave out subsection (1) and insert— ("(1) The moratorium in consequence of the taking of any step as mentioned in section 41—

1. (a) begins when the step is taken, and
2. (b) ends at the end of the period of 28 days beginning with the day on which notice of its having being taken was given to the Corporation under that section,

subject to the following provisions."). Page 26, line 7, leave out subsection (4) and insert— ("(4) If during a moratorium the Corporation considers that the proper management of the landlord's land can be secured without making proposals under section 44 (proposals as to ownership and management of landlord's land), the Corporation may direct that the moratorium shall cease to have effect. (4A) When a moratorium comes to an end, or ceases to have effect under subsection (4), the Corporation shall give notice of that fact to the landlord and the landlord's secured creditors. (4B) When a moratorium comes to an end (but not when it ceases to have effect under subsection (4)), the following provisions of this section apply. The Corporation's notice shall, in such a case, inform the landlord and the landlord's secured creditors of the effect of those provisions."). Page 26, line 11, leave out ("occurs") and insert ("is taken").

The noble Lord said: I spoke to these amendments with Amendments Nos. 151 and 143. I beg to move them en bloc.

On Question, amendments agreed to. Clause 43, as amended, agreed to.

Clause 44 [Proposals as to ownership and management of landlord's land]:

Lord Williams of Elvel moved Amendment No. 156: Page 26, line 27, leave out (", so far as is practicable,").

The noble Lord said: Clause 44 deals with the proposals as to ownership and management of the landlord's land. Subsection (2) of the clause, as drafted, states that: In drawing up its proposals the corporation…shall consult the landlord and, so far as is practicable, its tenants". I am not entirely certain that "so far as is practicable" is the right expression. I can understand that there may be some difficulty in consulting all the tenants, but I do not believe that such a general let out should be available to the corporation. I hope very much that the Government will find some rather better expression or give some better assurance as to what is meant than appears on the face of the Bill as drafted. I beg to move.

Lord Lucas

We have considerable sympathy with the sentiment behind this amendment. The period during a moratorium will be an anxious one for tenants as they wait to see how the future ownership of their homes will be determined.

Were it not for the corporation's intervention at this stage, future ownership would be determined solely by the creditors; tenants would be completely sidelined, and their homes could be sold to an unregistered private sector landlord. The corporation will want to work for the benefit of tenants to avoid that—that is the primary purpose of Clauses 39 to 49—and will want, so far as possible, to consult tenants as it prepares its proposal.

We must bear in mind the constraints under which the corporation will be operating. It will have a very short period of time—possibly as little as 28 days—to undertake the complicated task of putting together a workable proposal. A detailed analysis of the landlord's assets and finances will be needed; intensive discussions with all the secured creditors will have to be held; possible alternative registered landlords will need to be identified and approached; and suitable arrangements will have to be made for the appointment of a manager to implement the proposal.

We should also bear in mind that the landlord may have hundreds, if not thousands, of tenants. While tenants are in many cases organised into representative groups and associations, that is not always the case. In times of stress, such as those confronting the tenants of an insolvent landlord, differences of opinion and factionalism among tenants' groups can all too easily develop.

It is right that the corporation should be required to consult tenants. But in the circumstances that I have described, that requirement must be tempered by a sensible appreciation of what can realistically be achieved. Placing an unqualified duty on the corporation to consult tenants could not only make the preparation of a proposal immeasurably more difficult, but would also expose the corporation to an increased possibility of legal challenge by any tenant who felt that the corporation had not discharged its duty fully. That could frustrate the implementation of a proposal, to no one's benefit.

I believe that the noble Lord agrees with the direction of our thought and merely questions the particular wording that we have chosen. We are content that the wording we have chosen will achieve the effect that we want; namely, the duty to look after the tenants is there but the corporation is not required to do anything which is impracticable. It has to take practical decisions, given all the constraints upon it.

We shall return to the wording when we come to Amendment No. 157. I hope that the noble Lord will feel that for this amendment and for Amendment No. 157 it is a reasonably well tried phrase, which will produce the right result if ever we come to such an unhappy pass.

Lord Williams of Elvel

I am grateful to the Minister for his response and for recognising my concerns. What he said makes very good sense. It must be the right direction in which to go. If I questioned the wording, it was simply to elicit from the Minister the kind of response that he gave. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 157: Page 26, line 42, at end insert— ("() So far as practicable no proposals shall be made which have the effect that unsecured creditors of the landlord are in a worse position than they would otherwise be.").

The noble Lord said: I hope that this amendment will answer some of the questions raised earlier by the noble Lord, Lord Hylton.

Clause 45 provides that a proposal may be implemented only if the corporation has obtained the unanimous consent of the landlord's secured creditors. That clearly puts secured creditors in a powerful position. Each secured creditor has an effective power of veto, which none of the other parties—the landlord, tenants, or unsecured creditors—enjoys.

This balance acknowledges the reality of an insolvency situation. When a landlord has become insolvent it is the secured creditors' interests that come to the fore. They will have effective control over the housing on which they have secured their loans. If the corporation is to protect tenants and publicly—funded assets, it is the secured creditors with whom it must deal.

A landlord will have unsecured creditors, too, however, and the Bill as currently drafted makes little provision for them. In an insolvency situation unsecured creditors generally come off pretty badly and have to share between them whatever value is left after secured creditors have taken their cut.

So unsecured creditors will be at the back of the queue. But they should not then be further disadvantaged when the corporation steps in with its proposal. Because of the strong position of secured creditors, the corporation may feel under pressure to protect their interest in developing its proposal, to the possible detriment of the already weak position of unsecured creditors. That would not be acceptable.

We therefore want to amend the current Clause 45 to make it clear that the corporation must not develop a proposal which either deliberately or inadvertently leaves unsecured creditors in a worse position than they would be in were the corporation not to intervene. I hope that gives the comfort sought by the noble Lord, Lord Hylton, that there is no way in which secured creditors can put pressure on the corporation successfully to have the corporation develop a proposal which would disadvantage unsecured creditors.

Amendment No. 157 requires that, so far as practicable, no proposals shall be made which would leave unsecured creditors worse off than they would have been had a proposal not been made. The corporation will have to engage in a certain amount of speculative thinking about how unsecured creditors might fare if a proposal was not being made. It will not have a great deal of time in which to do so. That is why the qualification covering practicability has been built into this clause.

However, the corporation will be expected to take all steps practicable in the time available to assess the position of unsecured creditors and ensure that the proposal the corporation develops does not leave such creditors worse off than would otherwise be the case. In many instances unsecured creditors may be better off as a result of a proposal. For instance, the transfer of an insolvent landlord's debts to another, financially sound, landlord should put unsecured creditors in a better position. I do not say that that will always be the case; but it may often be. Whatever the situation, the implementation of a proposal should certainly not leave unsecured creditors still further out of pocket. The amendment is designed to avoid that possibility. I beg to move.

6.30 p.m.

Lord Hylton

I am somewhat reassured by the Minister's explanation in relation to unsecured creditors. I am also happy to note the reference to them on both pages 26 and 27. However, if the Minister felt able to write to me regarding the employment considerations and how these measures will work in practice I should be extremely grateful.

Lord Williams of Elvel

I am not certain about this amendment. I accept that the corporation has a duty under Clause 44 to put forward proposals. In spite of what the noble Baroness, Lady Hamwee, said earlier, secured creditors have different types of security which may or may not involve the assignment of assets. As the noble Lord rightly points out, unsecured creditors, in Companies Act terms, come just before the shareholders.

I am not certain how the corporation can form proposals which protect the secured creditors—which they must do, as I understand it—leave the unsecured creditors no worse off than they otherwise would be and, at the same time, secure certain things that the corporation needs. Something has to give, so far as it is practicable.

What is going to give? In normal circumstances, if an administration takes control of a company and disposes of the assets, a receiver takes control and winds up the company or there is a voluntary winding-up of the company, the unsecured creditors take their lumps, as the noble Lord said; they are unsecured.

At the moment I am unclear, and hope that the Minister can help me, as to how unsecured creditors can be no worse off than they would be were the corporation not to intervene and yet the corporation have power—given the protection of the secured creditors—to intervene in the way the clause invites it to?

Lord Lucas

It may not always be the case, but in principle it should often be the case. A block of flats owned by a social landlord will be a difficult asset to sell on the open market. If it is sold to a private-sector landlord there will be a large number of extremely angry and disaffected tenants, which will not make it an attractive proposition for many landlords. On the other hand, if it is sold or transferred under Housing Corporation aegis to another social landlord which is better managed and is used to dealing with those matters, then it will be trusted by the tenants and have a higher potential value.

It is a question of the difference between realisation value and going-concern value when it comes to accounts. If the Housing Corporation can work the trick, the asset should be worth more than it would be if there was subsequent liquidation.

Lord Williams of Elvel

I accept that and that is absolutely right. The problem is, assuming that there is no going concern, how can the Housing Corporation produce a proposal—as the amendment requires—which leaves the unsecured creditors no worse off than they would otherwise be? I do not understand how the Housing Corporation can fulfil that requirement. I can understand how it can take over a block of flats and sell it under its aegis at a going—concern value which would protect the unsecured creditors. However, that is not what the amendment says.

Lord Lucas

I find myself at a loss in encompassing the problem envisaged by the noble Lord, Lord Williams. However, I shall consider what he said and write to him. So far as I can see, there may be occasions when the Housing Corporation cannot work this trick and therefore cannot produce a proposal. But one would hope that in most cases it would be able to do so.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 158: Page 26, line 44, leave out ("charitable").

The noble Lord said: I spoke to Amendment No. 158 with Amendment No. 143. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 159 and 160 not moved.]

Clause 44, as amended, agreed to. Clause 45 [Effect of agreed proposals]:

Baroness Hamwee moved Amendment No. 161: Page 27, line 28, at end insert— ("but nothing in this subsection shall require the members, directors and trustees referred to in this subsection to act in a manner contrary to their fiduciary or other obligations as members, directors or trustees or affect their rights, including their right to resign.").

The noble Baroness said: In moving Amendment No. 161 I shall speak also to Amendment No. 162, which is a government amendment.

Amendment No. 161 provides that directors, members and trustees are not required to act in conflict with their fiduciary or other obligations since it would be unreasonable and probably unlawful for them to do so, and that the provisions of Clause 145 shall not affect their rights, including their right to resign.

The clause requires directors, members and trustees to co-operate in the implementation of the corporation's proposals. However, it is conceivable that they could be placed in a difficult or even an impossible position—there may be a conflict between their duties under this clause and their fiduciary duties. The corporation has wide powers but I do not believe that they should be so wide as to place the persons referred to in that situation.

The government amendment contains similar provisions, though it does not go so far as to deal with the question of the right to resign. I beg to move.

Lord Lucas

We are clearly ad idem on the first part of this amendment because Amendment No. 162 covers the situation. In relation to the right to resign, our legal advice is that, in the absence of express provision, the requirement to co-operate contained in Clause 45(3) would not affect the right to resign and therefore that part of Amendment No. 161 is unnecessary.

Baroness Hamwee

I am glad to have that assurance. On that basis, and on the assumption that the noble Lord is about to move Amendment No. 162, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 162: Page 27, line 28, at end insert— ("This does not mean that they have to do anything contrary to any fiduciary or other duty owed by them.").

The noble Lord said: I have just spoken to Amendment No. 162. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 163 and 164 not moved.]

Clause 45, as amended, agreed to.

Clause 46 [Appointment of manager to implement agreed proposals]:

Lord Williams of Elvel moved Amendment No. 165: Page 28, line 2, leave out ("of the registered social landlord").

The noble Lord said: At present, the wording of Clause 46 implies to us that the manager will take over the whole running of the association. I am not sure that that is what the Government intend. Nor is it borne out by the powers of the manager, which do not include the convening and holding of board meetings, but are largely related to transactions dealing with land. This point was debated in another place but there was a somewhat inconclusive result. I believe it is worth hearing what the Government feel about this because it seems to us that the wording of Clause 46 as presently drafted is defective. I beg to move.

Lord Lucas

It seems only fair, having given an amendment to the noble Baroness, Lady Hamwee, to give one to the noble Lord, Lord Williams, as well. The quality of his draftsmanship is well known but it is very rarely that the parliamentary draftsman cannot find any reason to argue. This is one occasion.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 166: Page 28, line 4, at end insert— ("() If the landlord is a registered charity, the Corporation shall give notice to the Charity Commissioners of the appointment.").

The noble Lord said: In moving this amendment, I wish to speak at the same time to Amendment No. 167. Amendment No. 166 places an obligation on the corporation to notify the Charity Commissioners if it decides to appoint a manager under Clause 46. The Charity Commission itself has powers to appoint managers under certain circumstances and it is important that the commission knows if and when the corporation decides to appoint a manager under these provisions. Amendment No. 167 removes the Secretary of State's power to make an order stipulating the qualifications that a manager appointed under Clause 46 should possess.

The corporation's proposal will have been drawn up after close consultation with the landlord, his secured creditors and the tenants. It will be in the interests of all parties to ensure that any manager appointed to implement the proposals should possess the necessary qualifications and experience. He must command the confidence of all the parties involved. The qualifications that are required will depend on the nature of the tasks that the manager has been appointed to carry out. In some instances, an experienced housing manager may be the most appropriate appointment. In others, someone with an insolvency or accounting qualification might be more suitable. It would be difficult for the Secretary of State to make an order covering all these eventualities. The judgment on what kind of manager is needed is best left to the corporation and the other parties to the proposal. I believe that we can trust to their good sense to ensure that a suitable appointment is made. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 167: Page 28, line 8, leave out subsection (3).

The noble Lord said: I have just spoken to this amendment. I beg to move.

On Question, amendment agreed to. Clause 46, as amended, agreed to.

Clause 47 [Powers of the manager]:

Baroness Hamwee moved Amendment No. 168:Page 29, line 17, at end insert— ("(The manager shall consult and inform, so far as is practicable, the tenants of the landlord on such matters in the exercise of his powers as are likely to affect them.").

The noble Baroness said: It sounds as though the Minister may be in a giving mood. I hope that may extend to this amendment. Under Clause 44(2), the corporation is to consult tenants in drawing up its proposals so far as is practicable. It is consistent with this that in implementing proposals the manager should keep the tenants well informed of his actions and consult them "so far as is practicable". I hope that a manager would consider it appropriate to consult tenants affected by his actions without requiring a legislative obligation to tell him so. I think it is appropriate to add this protection since tenants are not specifically protected by the clause against actions by a manager not in accordance with agreed proposals. We referred earlier today, in the amendment which the Government accepted, to the importance of informing and consulting tenants. The importance of the general interests of tenants was accepted. I hope that the Government can accept the intention, and possibly even the words, of this amendment. I beg to move.

6.45 p.m.

Lord Lucas

We understand the reasoning behind the amendment but we hope very much that the noble Baroness will understand that the parliamentary draftsman must be allowed some pride. On this occasion he would wish to consider the precise wording of any such provision.

Baroness Hamwee

I hope I may take that as "We shall take this away and consider how we may implement the notion behind the amendment". I think I understand the noble Lord to be saying that and of course the parliamentary draftsman should put it into proper language. After all, there are jobs to be protected. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 169: Page 29, line 18, leave out subsection (3).

The noble Lord said: In moving this amendment, I wish to speak at the same time to Amendment No. 171. One solution to the housing association's insolvency that the corporation might propose is a transfer of engagements between industrial and provident societies. This is currently addressed by Clause 48(3). This subsection makes it clear that the manager may be given power to effect a transfer of engagements but does not make provision for the Registry of Friendly Societies to register such a transfer as it would if the transfer were being effected under the Industrial and Provident Societies Act 1965.

Amendment No. 169 removes Clause 47(3), and Amendment No. 171 subsumes that subsection and makes suitable provision for the registration of the instrument of transfer. The amendment also preserves the rights of creditors of the original—in this case, insolvent—society so that they have the same rights in relation to the receiving society. Equivalent provision is contained in Section 54 of the Industrial and Provident Societies Act 1965. I beg to move.

On Question, amendment agreed to.

[Amendment No. 170 not moved.]

Clause 47, as amended, agreed to.

Lord Lucas moved Amendment No. 171: After Clause 47, insert the following new clause— POWERS OF THE MANAGER: TRANSFER OF ENGAGEMENTS (".—(1) An order under section 46(1) may, where the landlord is an industrial and provident society, give the manager power to make and execute on behalf of the society an instrument transferring the engagements of the society. (2) Any such instrument has the same effect as a transfer of engagements under section 51 or 52 of the Industrial and Provident Societies Act 1965 (transfer of engagements by special resolution to another society or a company). In particular, its effect is subject to section 54 of that Act (saving for rights of creditors). (3) A copy of the instrument, signed by the manager, shall be sent to the appropriate registrar and registered by him; and until that copy is so registered the instrument shall not take effect. (4) It is the duty of the manager to send a copy for registration within 14 days from the day on which the instrument is executed; but this does not invalidate registration after that time.").

The noble Lord said: I spoke to this amendment with Amendment No. 169. I beg to move.

On Question, amendment agreed to.

Clause 48 [Assistance by the Corporation]:

Lord Monkswell moved Amendment No. 172: Page 29, leave out line 34.

The noble Lord said: This amendment seeks to delete the reference to the Housing Corporation lending staff to a registered social landlord. There is confusion with regard to staff in that situation. Would they be responsible to the Housing Corporation or would they be responsible to the registered social landlord? Bearing in mind the powers of the Housing Corporation to install a manager to sort out the affairs of a registered social landlord, there will be confusion as to the position of a loaned member of staff. I hope the Government will accept that what they propose is probably not the best way to go forward. I beg to move.

Lord Williams of Elvel

I support my noble friend's amendment. The expression "lend staff— is pretty odd. Staff are not there to be lent; they are human beings. They can be sent on secondment or detached, but they cannot be lent. I query whether the drafting is right and whether it is appropriate that the corporation should detach or second any staff, whether we are talking about the Housing Corporation or Housing for Wales, to give assistance for the purposes of Clause 48. Who and how should they be responsible? And what is the chain of command? My noble friend has put his finger on an interesting point. I hope that the Government have taken note of it.

Lord Lucas

I trust that I can give some comfort to the noble Lords, Lord Monkswell and Lord Williams, on this occasion. The corporation will be acting in very difficult circumstances to protect tenants' and taxpayers' money if this particular part of the Bill is to come into effect. We are concerned that it should be given maximum flexibility to carry out its difficult task, which should include the ability to lend staff to assist the landlord or the manager. On our reading of the corporation's powers, we are uncertain at the moment that it has the ability to do that. We do not expect that the corporation will want to very often.

The careful control exercised by the Government over running costs means that it is very unlikely that the corporation will ever be able to spare staff for such a task for very long. But there may be occasions when this approach is the most sensible and cost-effective way of achieving a particular task. An individual may have been responsible for looking after the affairs of a particular social landlord for a long while. He is the most reliable person who knows the details of that social landlord's operations and the person best placed to advise the manager appointed under the Bill.

The noble Lord, Lord Monkswell, was anxious about a possible conflict of interest. I can reassure him. The loaned member of staff will be appointed to implement a part of the corporation's proposal or to assist the landlord in some specified way. The corporation, the landlord and the creditors should by that time be working towards a common goal and the loan of a member of staff would be designed to help in the achievement of that goal. I hope that that gives the noble Lord the comfort he requires to enable him to withdraw his amendment.

Lord Monkswell

I am reassured to some extent by what the Minister said. I would have thought that the provision of assistance to the registered social landlord by the Housing Corporation would be incorporated in the wording of the clause. I suspect that the ability to loan staff will give rise to difficulties to a greater extent than it will provide assistance. On the basis of the Minister's assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 173 not moved.]

Clause 48 agreed to.

Clause 49 [Application to court to secure compliance with agreed proposals]:

Lord Lucas moved Amendment No. 174: Page 30, line 17, leave out subsection (3).

The noble Lord said: Clause 49(3) restricts the legal challenge to which a manager may be subject under Clause 49(1). This provides the manager with very wide immunity which, given the significant responsibilities he may exercise, might be regarded as too generous. The manager may, for instance, be in a position of fiduciary duty and there is no reason why he should not be open to proceedings for breach of such duty. Amendment No. 174 removes Clause 49(3) thereby removing the limitation on legal challenge. I beg to move.

On Question, amendment agreed to.

Clause 49, as amended, agreed to.

Clause 50 [Schemes for investigation of complaints]:

Lord Williams of Elvel moved Amendment No. 175: Page 31, line 2, leave out subsection (4).

The noble Lord said: In moving this amendment it may be for the convenience of the Committee if I speak to Amendment No. 176 standing in the name of the noble Earl, Lord Ferrers. I believe that both amendments are in search of the same point. The Secretary of State has to go through some procedure in order to amend the description of landlords. The government amendment meets my anxiety and I hope that the Minister will be able to move it. I beg to move.

Lord Lucas

Both amendments concern the Secretary of State's powers to make changes to the description of the landlords who are to be treated as social landlords for the purposes of membership of an improved ombudsman scheme. Amendment No. 175 would prevent the Secretary of State from adding to, or amending by order, the description of landlords who are to be treated as social landlords. Subsection (2) of the Bill identifies the categories of landlord currently appropriate to be regarded as social landlords.

As the noble Lord, Lord Williams, will appreciate, the world of social housing is not static. In time other categories of landlord may need to be brought into the statutory scheme. I instance housing investment trusts. We are here looking just at the ombudsman scheme rather than it being brought into the Bill as a whole.

While we do not have any particular category of new landlord in mind, it is important that when they do appear we are able to ensure straightaway that tenants have recourse to the approved ombudsman as soon as possible. To achieve that we are proposing that the Secretary of State should have the power by order to amend the description of social landlord. That will not affect those landlords who, under Schedule 2, can voluntarily choose to join the scheme.

Amendment No. 176, which I propose to move, is required to rectify an omission identified by the Delegated Powers Scrutiny Committee. We are grateful to it for doing so. Because any amendment to the description of landlords is likely to be relatively simple, we had intended that the Secretary of State's order-making powers should be subject to negative resolution procedures. However, due to an oversight, the necessary provision was omitted. The purpose of the government amendment is to correct the omission. I am pleased to say that in its report the Delegated Powers Scrutiny Committee agreed that the negative procedure would be appropriate.

Lord Williams of Elvel

I am grateful to the noble Lord for his response to my amendment and for acknowledging the oversight that took place in the Government's deliberations. On the assumption that the noble Lord will move Amendment No. 176, I beg leave to withdraw Amendment No. 175.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 176: Page 31, line 6, at end insert— ("( ) Any such order shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble Lord said: To give the noble Lord, Lord Williams, the required comfort, I beg to move.

On Question, amendment agreed to.

Clause 50, as amended, agreed to.

Schedule 2 [Social rented sector: housing complaints]:

Lord Williams of Elvel moved Amendment No. 177: Page 131, line 24, at end insert— ("(16A. A duty of the Housing Ombudsman annually to consult its members on its activities and costs.").

The noble Lord said: We now move to Schedule 2. It may be for the convenience of the Committee if I also speak to Amendment No. 178 standing in my name and that of the noble Baroness, Lady Hamwee. As drafted, Schedule 2 does not oblige the housing ombudsman to consult members on activities and costs. Ombudsman schemes, if I may call them that, might draw up annual budgets in a fashion without regard to the costs for members or for value for money. The amendment that I propose will provide a formal mechanism for members of an ombudsman scheme to comment on the activities, costs and budgets and, therefore, it will provide a degree of influence over the level of contributions that they may have to make. We want to ensure that the independent housing ombudsman schemes which are established are responsive to their members and have regard to value for money in the service that they provide.

Amendment No. 178, if accepted, will require that consultation takes place with the representatives of social landlords before any ombudsman scheme, or any amendment to a scheme, is approved. In general, housing associations welcome the Bill's provisions for an independent statutory ombudsman. Membership of an ombudsman scheme will be compulsory for registered housing associations and, in future, for all registered social landlords. These landlords will have to meet the costs of the scheme, which is not unreasonable, and they will be affected by decisions taken by the ombudsman under the scheme. In our view, it is equally reasonable that registered social landlords should be properly consulted about the ways in which such schemes will operate. To date, the clause has been phrased to allow for consultation to be carried out either by the Secretary of State or anyone else who proposes an ombudsman scheme or changes to a scheme. We believe that the Secretary of State should be obliged to consult such bodies representative of social landlords as he thinks fit, and that is the object of Amendment No. 178. I beg to move Amendment No. 177.

7 p.m.

Lord Lucas

If the Committee agrees, I should like to speak to both Amendments Nos. 177 and 178. Both amendments concern the scheme to be submitted by a prospective independent housing ombudsman. We fully appreciate the concerns that lie behind the first amendment in the name of the noble Lord, Lord Williams, which would require the ombudsman to consult annually with its members on its activities and costs. The noble Lord may be concerned that in setting the annual charge the ombudsman may not have regard to the impact of the costs of the service on member landlords, or to the importance of achieving value for money from the scheme. I should like to reassure the noble Lord that the Secretary of State will consider carefully the quality of any scheme and how the costs are to be defrayed by the members; in short, the value for money that the scheme provides. He will, of course, wish to ensure that the scheme is capable of being sufficiently responsive to its prospective members, while at the same time it is properly independent. If he is not satisfied on this point, he may decide not to approve the scheme.

Amendment No. 178 in the name of the noble Baroness, Lady Hamwee, would require the Secretary of State to consult with bodies representative of social landlords before approving a scheme, and is unnecessary. In submitting a scheme for the Secretary of State's approval, the prospective ombudsman will be expected to have demonstrated that social landlords and their representative bodies have been fully consulted. Given this, we see no reason for these bodies to be consulted separately by the Secretary of State.

I hope that that gives the noble Lord, Lord Williams, enough comfort to withdraw his amendment and the noble Baroness, Lady Hamwee, enough comfort not to move hers in due course.

Lord Williams of Elvel

I am grateful to the Minister for his response. He provided the comfort for which I was looking. On balance, I do not believe that it is necessary to have something on the face of the Bill. A ministerial Statement such as the one that the noble Lord has given the Committee suffices. I am grateful to the Minister for what he has said. I accept his arguments about Amendment No. 178. Unless the noble Baroness has any objection, I beg leave to withdraw Amendment No. 177. I leave it to the noble Baroness to decide whether or not she wishes to move Amendment No. 178.

Amendment, by leave, withdrawn.

[Amendment No. 178 not moved.]

Lord Lucas moved Amendment No. 179: Page 132, line 25, at end insert— ("Proceedings for such an offence may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.").

The noble Lord said: I beg to move Amendment No. 179 to which I spoke with Amendment No. 46.

[Amendments Nos. 179A and 179B, as amendments to Amendment No. 179, not moved.]

On Question, Amendment No. 179 agreed to.

Lord Lucas moved Amendment No. 180: Page 133, line 32, leave out ("charitable").

The noble Lord said: I spoke to Amendment No. 180 with Amendment No. 143. I beg to move Amendment No. 180.

On Question, amendment agreed to.

[Amendment No. 181 not moved.]

Schedule 2, as amended, agreed to.

Clause 51 [General provisions as to orders]:

On Question, Whether Clause 51 shall stand part of the Bill?

Lord Williams of Elvel

I have some difficulty with this clause. It seems to me to be, if not a Henry VIII clause, at least a Henry VII clause. The clause reads: (1) The following provisions apply to any power of the Secretary of State under this Part to make an order. (2) An order may make different provision for different cases or descriptions of case… (3) An order may contain such supplementary, incidental, consequential or transitional provisions and savings as the Secretary of State considers appropriate". All of that is very well, and Henry VII would have been very proud of it.

Can the Minister say whether there is any restriction on the power of the Secretary of State under this clause and, if so, what it is? How does the Secretary of State, or a future Secretary of State, intend to use the powers under the clause? Perhaps this could take the form of a ministerial Statement. Over the years I have seen this clause before in Bills with which I have been concerned on the Opposition Bench. I have raised the same point but have never received a satisfactory answer as to how the Secretary of State may use these powers. I would be grateful if the noble Lord could give me some reassurance as to my worries.

Lord Lucas

This clause gives the Secretary of State the power to make orders containing different provisions for different cases, including provision for different housing activities and areas. For example, this may allow an order to specify different levels of discount to apply to different parts of the country when a tenant exercises a right to acquire under Clause 16, or different provisions for England and Wales. I do not believe that the Secretary of State has any thought of using these powers in a more dangerous way than that. But I am conscious that the concerns expressed by the noble Lord, Lord Williams, perhaps run deeper than I can give comfort to by those brief illustrations. I will give thought to what he has said, and if I can say anything more helpful I will write to him.

Lord Williams of Elvel

I always enjoy receiving letters from the noble Lord. He stated that the Secretary of State could order different discounts in different places in England and Wales and not be responsible to anybody for such an order. If I have misunderstood what the noble Lord has said he will tell me. It seems to me to be very odd. We are invited to pass a clause which allows the Secretary of State to make an order which determines what price someone shall pay, what discount shall or shall not be paid and what premium shall or shall not be paid without any supervision or accountability whatever. Before he sits down to write his letter, I would be grateful if in this Committee he would be kind enough to say whether or not my interpretation of the clause is correct.

Lord Lucas

To the best of my understanding the noble Lord, Lord Williams, is right in his interpretation of the clause, within of course the usual constraints that in fact the Secretary of State is responsible to Parliament.

Lord Peyton of Yeovil

I do not want to be tiresome to my noble friend, but I thought I heard him say that he did not believe that the Secretary of State had any more dangerous intention than to do those trifling things. Such knowledge as one has of Secretaries of State and such fears as one has of Secretaries of State in the future, do not leave one all that happy with my noble friend's rather hopeful mixture of hope and thought that the Secretary of State does not intend anything particularly dangerous or menacing.

Lord Hylton

On previous housing Bills it has sometimes been proposed in amendments that the level of discounts should be varied from that set out on the face of the Bill. That has pretty well always been resisted. So I find it rather surprising that it should be suggested that this or any future Secretary of State might wish to vary the discount just at his personal whim.

Lord Monkswell

This is the first time the Minister has said that the responsible Minister might vary the rate of discount depending upon the particular area or circumstances in the country. Perhaps we may probe the Government a little further on that and ask what sort of criteria he might use in reaching the judgment that a discount should be higher or lower in a particular area.

Baroness Hamwee

Perhaps I may add to the list of questions. One generally debates "son of rather than "father of', and despite Henry VII being a fairly well organised king, the points that have been made demonstrate how much there is in the clause. When the Minister responds, either this evening or on paper, could he deal with the slightly different wording of the different subsections? Subsection (3) provides for the Secretary of State to be able to make: supplementary, incidental, consequential or transitional provisions and savings as", he considers appropriate. What is the import of the words, "as he considers appropriate"? Common sense tells us that he would not make such provisions if he did not consider them appropriate, but does the inclusion of the phrase import an objectivity that they must be reasonably appropriate? If that is so, why does that not apply to Clause 51(2), which is perhaps the more extensive part of the clause?

Lord Lucas

Perhaps I am now in a position to enlighten the Committee slightly more than I was before. It would appear that the order—making powers referred to in this clause are all subject to parliamentary procedures, at least negative, and that therefore all orders made under this clause will come before Parliament. What this clause does is merely to give flexibility in the design of those orders.

There is nothing in the Bill which specifies the rate of discount which should be given. That is not something which is already set down or is proposed to be set down in statute, it is something which is determined by order. What we are taking here is the power to make that a different rate in different parts of the country, and in other ways to give flexibility to the powers of the Bill to deal with particular problems which may arise on a geographical basis or between different types of landlords. However, as I have said, any proposals coming forward under this clause would find themselves before Parliament, under the negative procedure at least.

7.15 p.m.

Lord Williams of Elvel

I am moderately grateful to the Minister for that reassurance. I look forward with even greater anticipation to receiving his letter on this matter, which I am sure will enlighten me much more than I am enlightened at the moment.

Clause 51 agreed to.

Clause 52 [General provisions as to determinations]:

On Question, Whether Clause 52 shall stand part of the Bill?

Lord Williams of Elvel

Clause 52 refers not only to the Secretary of State's determinations but also to determinations made by the corporation. In the rather general manner to which we have become used, it says that this is a determination by either the Secretary of State or by the corporation (the Housing Corporation or Housing for Wales) which: may make different provision for different cases or descriptions of case". I do not have to read through the whole clause for the benefit of the Committee because I am sure the Committee has read it. However it does again seem to me slightly odd that the corporation can make such determinations either of a general or, apparently, specific nature without any accountability to anyone. A general determination as defined in subsection (3) means a determination which is not particular. Obviously if it made a particular determination, it would fall under subsection (2), as I understand it.

I wonder whether the Minister can enlighten me as to what sort of determinations the corporation, leaving aside the Secretary of State because we dealt with the Secretary of State under Clause 51, is liable to make—that is, the Housing Corporation or Housing for Wales—and whether there will be any parliamentary scrutiny of any of those determinations.

Lord Lucas

Not having a ready list of the determinations in front of me, and not being able to read with sufficient speed to pick them out of the preceding parts of the Bill, I cannot give the noble Lord the exact collection of powers that he requires, but determinations are restricted to matters which we do not feel need to be brought before Parliament. Hence the corporation's power to make such determinations. The sort of matters which would be covered are grant conditions and rates, particular requirements for information to be provided by social landlords. The reason for the powers under this clause is to allow those to be varied so that different grant conditions and rates may apply, for instance, to housing designed for families, hostels, or housing designed for the disabled, according to the particular needs and requirements of those particular types of development or, when one is coming to information requirements, different information requirements, say, for a small, old, fairly static almshouse, as compared with a large and active social landlord.

Lord Williams of Elvel

Before the Minister continues, am I right in thinking that such determinations have the force of law?

Lord Lucas

Yes, Clause 52(4) requires the corporation to consult before making such determinations. Clearly, if the corporation determines that such and such information is to be required from a social landlord, there have to be some powers to back up its determination. They are in the Bill to ensure that where the corporation exercises the powers given to it by the Bill, those subject to the powers (social landlords) comply with them.

There is a wide range of grant rates for different types of development. We feel that is inappropriate for the Secretary of State to become involved in, let alone Parliament. We are getting down to the detail of the operation of the corporation. I do not see any sinister import in the clause. It seems to me to be a sensible provision for the flexible application of the corporation's powers which are granted elsewhere in the Bill. If the particular powers cause the noble Lord, Lord Williams, any concern, perhaps they should be addressed in the parts of the Bill which give the corporation those powers, rather than with this clause which merely gives the corporation power to use those powers flexibly and sensibly. I hope therefore that the Committee will allow the clause to stand part of the Bill.

Clause 52 agreed to.

Clause 53 agreed to.

[Amendment No. 182 not moved.]

Clause 54 [Minor and consequential amendments: Part I]:

Lord Williams of Elvel moved Amendment No. 183: Page 32, line 7, leave out subsection (2).

The noble Lord said: It may be for the convenience of the Committee if in moving Amendment No. 183 I speak also to Amendment No. 184 in the name of my noble friend Lord Monkswell.

Whenever I see a clause entitled "Minor and consequential amendments" I become rather suspicious. Here we have it again. Subsection (2) provides that: The Secretary of State may by order make such amendments or repeals of any enactment as appear to him necessary or expedient in consequence of the provisions of this Part". I understand that that does not apply to the Bill of Rights because I assume that under this clause the Secretary of State cannot make amendments to that Bill. However, I should like an assurance from the Minister that that is the case.

I have seen such a provision in previous Bills but it is odd that it is introduced without any qualification. It is carried out under negative procedure and it amends primary legislation; it is "any enactment". It is normal for the Delegated Powers Scrutiny Committee to insist that amendments to primary legislation by order are made under affirmative procedure so that Parliament at least has an opportunity to discuss them. I beg to move.

Lord Monkswell

In rising to speak to Amendment No. 183 and to the next amendment which stands in my name there is little I need add to what has been said by my noble friend Lord Williams. The Government appear to be taking rather draconian powers. On the basis that the Bill of Rights is an Act of Parliament it is therefore capable of being amended by this provision.

We hope that the Government can assure us that their intentions are limited. However, it appears that giving themselves the power described in the clause is somewhat excessive.

Lord Lucas

The noble Lords, Lord Monkswell and Lord Williams, are right in saying that the terms within which Clause 54 is drawn are wide. They are restricted to amendments or repeals which appear to the Secretary of State to be necessary or expedient in consequence of the provisions of this part. However, they are certainly not restricted as to any particular enactment. Although I am not aware of anything in this part of the Bill which could render amendment to the Bill of Rights necessary, there is nothing in the clause as drafted which would prevent such a thing. However, in practice it is a matter which the Secretary of State's colleagues would wish to know about before he embarked on such a course of action.

Perhaps I may give comfort to the noble Lords as to why we want the clause. I am also aware that the Delegated Powers Scrutiny Committee drew the attention of the House to the provision and perhaps, with the leave of the Committee, I may take a little time to explain what, for our purposes, it means.

Clause 54 enables the Secretary of State to make, by order, such amendments or repeals of any enactment as appear to him necessary or expedient in consequence of the provisions of Part I of the Bill. I would emphasise that what is to be done must be "in consequence". We intend to use the provision to ensure, for example, that existing statutes will henceforth apply to registered social landlords, which is the term being introduced by the Bill, as they apply to registered housing associations.

In most instances, it will be sufficient to substitute "registered housing associations" with "registered social landlords". And where appropriate, a definition of registered social landlords may also be needed. An example would be amendments to Section 37 of the Land Compensation Act 1973 to provide for an entitlement to a disturbance payment in certain specified circumstances. Similar amendments are also required to the Leasehold Reform Act 1967; the National Health Service Act 1977; the Finance Act 1981; and a number of other Acts.

In a few instances, the amendment will need to reflect that the provisions in Part I of the Bill apply to registered social landlords in England and Wales only. For Scotland and Northern Ireland the existing provisions will continue to apply. An example of that would be the Inheritance Tax Act 1984.

I suspect that one of the questions which lies behind the noble Lord's amendment is why the proposed amendments are expedient as well as necessary. I can assure him that there is nothing sinister in the use of this terminology. It has been used before. Examples of that would be Section 30 of the Landlord and Tenant (Covenants) Act 1995; Sections 48 and 62 of the Agriculture Act 1993; and Section 181 of the Local Government etc. (Scotland) Act 1994. It means that we can use the powers to put beyond doubt the position with regard to other enactments, even if it may not be strictly necessary to make an amendment, because the courts may imply a reference to registered social landlords.

Considerable care is being taken to ensure that the amendments to be made by order will essentially be minor. Where a substantive change is justified we have proposed that it should be clearly shown on the face of the Bill, in Schedule 3, where it can be considered in detail. An example of this is the Government Amendment No. 186, which we shall consider later, affecting Section 75 of the Housing Associations Act 1985.

Turning to Amendment No. 184, I should like to reassure the noble Lord, Lord Monkswell, that we are not hiding anything in this provision. I would draw attention to the fact that the Bill, when it was in another place, originally included a list of consequential amendments at Schedule 3. I have the list, which runs to about 15 pages. We decided that they should be removed from the face of the Bill and introduced by secondary legislation precisely because they are routine in nature. They are typical of the amendments which we shall make by order.

I hope that the noble Lords, Lord Williams and Lord Monkswell, feel sufficiently comfortable to withdraw their amendments.

Lord Williams of Elvel

I am grateful to the Minister. He has certainly enlightened me as to what this extraordinary clause is about. I must read carefully what he has said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 184 not moved.]

Clause 54 agreed to.

Schedule 3 [Social rented sector: minor amendments]:

Lord Lucas moved Amendment No. 185: Page 136, line 35, at end insert— (". Section 33 of the Housing Associations Act 1985 (recognition of central association) shall cease to have effect.").

The noble Lord said: In moving Amendment No. 185 I shall speak also to Amendment No. 271. The amendment is introduced to amend Schedule 3 to repeal Section 33 of the Housing Associations Act 1985. Section 33 permits the Secretary of State to recognise and provide grant-in-aid for expenses to a central association or other body which is established for the purposes of promoting the formation and extension of housing associations. This provision is not used and should be repealed accordingly.

Amendment No. 271 is introduced by the Government to record the repeal of Section 33 of the 1985 Act in Schedule 16, Part I, which lists present enactments which are repealed by the Housing Bill. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish

I beg to move that the House be now resumed. In moving this Motion, perhaps I may suggest that the Committee stage begin again not before 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.