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Baroness Hamwee: I am grateful for those comments. The Minister has indeed been extremely diplomatic and careful in what he said. I, too, must be careful not to be so seduced by those words as to let the matter go at a later stage in this Bill if it appears that those discussions--I think that was the term the Minister used--are not proving as productive as the Government might hope. Can the Minister give any indication of the likely timetable as it relates to the timetable of this Bill? If he cannot, can he give an assurance before the next stage that the matter can be handled outside the scope of primary legislation as without some such comfort I would feel the need to return to the matter? In other words, I need to know that I am not letting pass a good opportunity to deal with something which is clearly of widespread concern.

Lord Lucas: If I have not been able to satisfy the noble Baroness by the time we reach this matter on Report, I would expect to see another amendment from her to the Bill. I am quite clear therefore that I shall have to answer her one way or another.

Baroness Hamwee: I thank the Minister. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 agreed to.

6.30 p.m.

Schedule 1 [Registered social landlords: regulation]:

Lord Williams of Elvel moved Amendment No. 27:


Page 116, line 7, after ("gift") insert ("or make a loan").

The noble Lord said: In moving Amendment No. 27, it may be for the convenience of the Committee if I speak also to Amendment No. 28 in the name of the noble Baroness, Lady Hamwee, Amendment No. 30 in our joint names, and Amendment No. 31 which stands in my name.

Amendment No. 27 concerns the remuneration of members of the council of the housing associations, and of the board of directors (if that is the case) of other social landlords. The Committee will be aware that before the House went into Committee I declared an interest in that my wife was a member of the council of Stonham Housing Association. Therefore, I enter particularly sensitive territory. Despite that, and on advice, I believe that I am able to speak on the matter.

6 Jun 1996 : Column 1407

Paragraph 1 of this schedule begins with the rubric,


    "Payments by way of gift, dividend or bonus".
It does not mention making a loan. There are certain restrictions in companies' legislation on making loans. I imagine that Companies Acts would apply where a social landlord who is registered is a Companies Act company. I also imagine that such restrictions would apply to other organisations which may be registered as social landlords which are not Companies Act companies. In other words, there should be parity treatment between the different types of legal organisations.

I shall leave the noble Baroness to speak to her Amendment No. 28. Amendment No. 30 in our joint names refers to the remuneration of members of the council or board of directors, or whatever it might be, of a registered social landlord. As the Minister said in another place, the Government do not seek to change the ethos of the housing association movement. I am glad to hear that because I believe that the housing association movement has persisted for many years on the basis of voluntary service. It is only right that it should do so. Nevertheless, there is the nagging question not just of refunding the expenses of those involved in housing associations but also as regards loss of earnings. Again, I speak from a certain amount of marital experience. Being involved as a member of the council of the housing association involves an enormous amount of time, effort, reading papers and making decisions. Loss of earnings can be a major problem if a housing association wishes to have on its council people who are not supported either by private income or other means. It seems to me that some formula along the lines of jury service could be right.

It is an important matter. So far as I am aware--I am open to correction--it is the first time that it has been proposed that housing associations should cease being organisations run on a purely voluntary basis by people who give time and effort to them and become possibly professional organisations with directors or members of the council who are professionals in the sense that they are paid for that specific job. It is an important principle that I believe the Committee would wish to discuss.

Amendment No. 31 is simply a probing amendment which seeks to encourage the Government to explain why the corporation has the power to specify maximum amounts even in the case where shareholders of a company registered under the Companies Act decide that the managing director may qualify for substantial bonuses if the company, although non-profit-making, may have done particularly well. I question whether the corporation is not cutting across some of the provisions of the Companies Act in that respect. It is purely a probing amendment. I beg to move Amendment No. 27.

Baroness Hamwee: I do not need to add to the comments of the noble Lord in support of Amendment No. 30 which also stands in my name. Amendment No. 28 is entirely straightforward. It enables the

6 Jun 1996 : Column 1408

Government to confirm that a gift does not include a benefit as set out in paragraph 2, to which the amendment refers.

Lord Lucas: As the noble Lord, Lord Williams, records, the housing association movement is supported by the commitment of voluntary committee members of registered social landlords. There are in England and Wales more than 25,000 such people freely giving of their time serving on the committees of housing associations. Many more contribute to the running of the registered social landlords as members of local, area and tenant committees. We are considering part of the Bill which proposes the possibility that they may receive some compensation for loss of earnings or for the time that they give in such service. Perhaps I may take time to set out the Government's position in this area.

First, let me explain the present controls over the granting of payments and benefits to board members of registered social landlords and members of their families. Paragraphs 1 to 3 of Schedule 1 of the Bill broadly re-enact the provisions of Section 15 of the Housing Associations Act 1985. Payments to board members are limited to the refund of expenses directly incurred. The provision provides for the corporation to be able to specify the maximum amount which may be paid.

Last year the National Federation of Housing Associations conducted a review under the chairmanship of Sir David Hancock, of the governance of housing associations. In their report the review team recommended that consideration be given to the introduction of a loss of earnings regime. In taking forward the provisions from the 1985 Act we have taken the opportunity to clarify the provision to enable loss of earnings regime to be introduced, subject to the corporation using its powers to specify the maximum amounts that might be paid.

I turn to the Nolan review. During his review of local spending bodies, including housing associations, the noble and learned Lord, Lord Nolan, was asked to consider the question of payment to board members. He concluded that at the present time there was no case for departing from the voluntary principle. Many long-standing members apparently suggested that they would be offended if offered money. Perhaps that applies to the wife of the noble Lord, Lord Williams.

The noble and learned Lord, Lord Nolan, also considered whether compensation for loss of earnings should be forthcoming. His committee concluded that at present it could not be justified. Nor was it necessary to attract new people.

Our position is that we are not advocating the introduction of payment to board members. But there is a continuing demand for new people to come forward. Should the position change, then we need to ensure that there are no unnecessary restrictions in place.

The noble and learned Lord, Lord Nolan, in his report suggested that where there was flexibility over the timing of meetings, this was another consideration against loss of earnings compensation. We have to recognise that employment practices are changing

6 Jun 1996 : Column 1409

radically. For many there is no standard working day; some work flexible hours, others fixed shifts involving both early and late hours. If we are to recruit people from a wide cross-section of backgrounds, we may find that some form of compensation will be necessary.

Amendment No. 30 proposes that any payments to board members be limited to the amounts payable under the Juries Act 1974 for loss of earnings. I recognise there are benefits to be gained from using an existing scheme and I am sure the corporation will consider it before specifying maximum limits in accordance with its powers in paragraph 3 of Schedule 1. I shall return to that later.

The corporation's initial intention is to consider the possibility of a small token payment. However, it is possible that in some instances there may well be justification for some modest payment for such groups as the self-employed, the low paid or the unemployed. The jury service analogy, while helpful, may not be exactly what is required.

The corporation's good record was recognised by the noble and learned Lord, Lord Nolan. He considered that decisions on possible exemption should be the sole responsibility of the corporation and should not require the approval of the Secretary of State. We consider there are good grounds for also leaving decisions on the maximum level of payments to it and do not see any need to impose any separate limit. The corporation will consult on any proposals.

In Amendment No. 27, the noble Lord, Lord Williams, has proposed that the limit on gifts or payments granted by a registered social landlord to members should extend to loans. I am grateful to the noble Lord for his explanation of the purpose of his amendment. I share his concern that members should not be granted any unlimited benefits by registered social landlords. I recognise that at present loans are not explicitly mentioned. I do not believe that any amendment is necessary, but we shall check the position with our legal advisers and inform the noble Lord of the results.

In Amendment No. 28, the noble Baroness, Lady Hamwee, has proposed that to avoid any doubt an amendment be made to the effect that a gift does not include a benefit within the meaning of paragraph 2. I believe the paragraph already adequately covers gifts and do not think further clarification is necessary. I hope that that assurance will satisfy the noble Baroness.

I understand that the final amendment in this group is a probing amendment. The noble Lord, Lord Williams, would like some background on how this power is to be used. The first point is that it will be subject to public discussion. The corporation's board has given preliminary thought to these issues. Leading on from my points earlier, it has agreed two general matters of principle: first, if anything other than token payments are allowed, they should be modest and based on a loss of earnings concept; secondly, any system which is put in place should derive from an established regime, such as jury service or magistrates' allowance.

6 Jun 1996 : Column 1410

The noble Lord, Lord Williams, also asked whether the power to set the maximum payment cuts across the Companies Act. The simple answer is yes. This is an extra limitation and the power allows the corporation to set maximum limits on certain payments. The shareholders of a Companies Act company are free to decide what to pay the managing director, but subject to the limit set by the corporation, which is an additional restriction, together with those in the Companies Act.

I hope that what I have said reassures the noble Lord. If the paragraph were to be removed, it would significantly weaken the corporation's powers, and we feel that it has its place in the Bill.

6.45 p.m.

Lord Swinfen: Before my noble friend sits down, perhaps he could help me. I have been looking through paragraph 2 of the schedule and wonder whether a social landlord will be able to make a loan to an employee or officer who moves from an area where housing is at a reasonable cost to an area of expensive housing. The loan would allow him to find somewhere for himself and his family to live and therefore to take up the employment with the social landlord. It may be to the benefit of the social landlord that that person should be employed because of his skills and knowledge, but he might not be able to take the job if he were not able to obtain a loan to buy property in that way.


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