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Lord Williams of Elvel moved Amendment No. 199:

Page 126, line 6, at end insert--
("( ) Any payment of remuneration under paragraph (2)(b) above shall be the level of remuneration payable to a person undertaking jury service in accordance with the Juries Act 1974.").

The noble Lord said: My Lords, this amendment is designed to make it clear that payments to board members of registered social landlords will be at the same level paid to jury members as compensation for loss of earnings. At the Report stage of the Bill in another place, the Government amended the Bill to allow the remuneration of voluntary board members of registered social landlords. The Minister said:

He added that the Government's amendment was,

    "not expected to change the modus operandi"--
if I can quote the Minister's Latin expression--

    "of a valuable movement that is based on voluntary service".--[Official Report, Commons, 29/4/96; cols. 816-17.]

This amendment reinforces the express wishes of both the Government and the voluntary housing movement that the voluntary ethos of housing associations is not lost; that they do not become commercial organisations hiring their directors or council members on a commercial basis. The effect of the amendment will be that any remuneration paid to a board member of a housing association or registered social landlord will be no more than the level of compensation for loss of earnings that is available to a person serving on a jury. I think the case is made. I beg to move.

Lord Lucas: My Lords, I quite agree with the noble Lord, Lord Williams, that the housing association sector has a long tradition of voluntary service. There are in England and Wales more than 25,000 people freely

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giving of their time, serving on the committees of housing associations. Many more contribute to the running of registered social landlords as members of local, area and tenant committees.

The question of payment has received much attention during the last year. The National Federation of Housing Associations recommended that consideration be given to the introduction of a loss of earnings regime linked to the jury service scheme. That is very much what the noble Lord, Lord Williams, is proposing in the amendment.

As I explained when the matter was debated in Committee we are not advocating the introduction of payment to board members. But there is a continuing demand for new people to come forward and we need to be able to attract people from a wide cross-section. We have to recognise that not everyone is able to give their time freely but will incur expenses and should be suitably compensated. However, we must also recognise that for some their involvement may have other costs, including having to forgo some paid employment. Employment practices are changing. For many there is no standard working day. Some work flexible hours; other fixed shifts involving both early and late hours. Attendance at evening meetings could be inconvenient, especially if much travelling is involved. If we are to continue to be able to draw on people from a wide cross-section of backgrounds then it may be necessary in the future to make some payment or compensation for loss of earnings. We have consequently taken the opportunity of this Bill to enable payment over and above existing expenses, but still subject to corporation control over maxima.

The noble Lord, Lord Williams of Elvel, proposes that any remuneration to board members be at the level payable to a person undertaking jury service in accordance with the Juries Act 1974. If payments for more than expenses are to be introduced, there would be benefits to be gained from limiting payment to loss of earnings and from using an existing scheme which is well established. However, the hours involved in board membership are not precisely equivalent to jury service. Jury service tends to be in the day, but board membership would involve evening attendance.

It would be necessary to consider also the position of such groups as the self-employed, the low paid and the unemployed. People who are released for jury service find, if they have a good employer, that they continue to be paid as well as receiving the jury supplement. Obviously, that is not the case for the self-employed--and it applies even less to the unemployed. We want to ensure that the payment regime that is put together can take account of the particular circumstances of the people it is thought necessary to attract onto housing association boards.

Furthermore, the amendment would require payment at jury service levels, while the Bill at present allows the corporation to set a maximum. It would be up to the individual organisation to decide whether to introduce a system and, if so, whether to make payments below the maximum. The Housing Corporation and, we

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understand, many others in the industry want the payments to be set at below jury service levels--or to have the ability to make payments at below that level.

The corporation has been giving thought to the question of payment and is considering whether to publish a consultation paper to seek views on possible options. This would explore the possibilities of a loss of earnings regime, based on public service models, such as the justices allowances (for JPs) or jury service. If any payment ceiling were to be introduced, it would be for an individual registered social landlord to decide whether to make use of it as many will probably wish to retain fully their voluntary service ethos.

The noble Lord has indicated that one reason for proposing this amendment is to establish clearly on the statute the maximum level of payment rather than leaving it to the discretion of the corporation as the regulator. We consider that there are good grounds for leaving decisions on the maximum level of payments to the corporation and do not see any need to impose any separate limit. The corporation will consult before using its powers under Schedule 1(3), so enabling any limit set to reflect the views of all interested parties. Should the balance favour a lower figure than that available under the jury service scheme, including perhaps a nominal sum, the corporation will be able to impose such a limit.

We prefer the flexibility which the Bill provides at present. Other than that, we are thinking along very much the same lines as the noble Lord, Lord Williams, and I hope that he considers that sufficient comfort to enable him to withdraw his amendment.

Lord Williams of Elvel: My Lords, I am most grateful to the noble Lord. We are, indeed, thinking along the same lines on a subject that we have now given a good airing. Having had that statement from the noble Lord, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 200:

Page 128, leave out lines 9 to 15 and insert--
("( ) A person appointed under this paragraph as director or trustee of a registered charity is entitled--
(a) to attend, speak and vote at any general meeting of the charity and to receive all notices of and other communications relating to any such meeting which a member is entitled to receive,
(b) to move a resolution at any general meeting of the charity, and
(c) to require a general meeting of the charity to be convened within 21 days of a request to that effect made in writing to the directors or trustees.").

The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendments Nos. 202, 204, 205 and 207.

I undertook in Committee to look again at certain provisions in Schedule 1 to the Bill to see whether the arrangements for regulating registered social landlords worked satisfactorily and unambiguously for Companies Act companies. We are satisfied that they do, but we have concluded there are one or two areas where the

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provisions can be improved. That is a disingenuous way of saying that we are extremely grateful to the noble Lord, Lord Williams of Elvel, for having pointed out the fact that we needed to look carefully at the way in which the Bill had been drafted. We have managed to convince ourselves that we can get round most of the problems raised and we are most grateful for having been given that opportunity. This amendment is the first fruit of that investigation.

First, as the noble Lord pointed out in Committee, while the Bill allows the Housing Corporation in certain circumstances to appoint a person to be a director, a trustee or a committee member and allows them to attend, speak and vote at a general meeting, it does not allow them to move a resolution at such a meeting. We agree that that is a weak link, since without such a power the appointee has no effective way of getting the meeting to address issues of concern. Amendments Nos. 200, 202 and 204 rectify that.

Secondly, in looking at the provisions under which appointed persons may act in certain circumstances, it has become clear that paragraph 6 of Schedule 1 which deals with registered charities, differs from the provisions of the Housing Associations Act 1985 and from those in paragraphs 7 and 8 in that it allows an appointed person to attend, speak and vote at a meeting of the directors and trustees: a right which they should have in any case. What is required is a right to attend, speak and vote at any general meeting of the charity, which Amendment No. 200 achieves.

Thirdly, we have concluded that the provisions of paragraph 13(2) of Schedule 1 dealing with orders of the court under Sections 425 and 427 of the Companies Act 1985 are not adequate and could be difficult to apply. Orders under these sections deal respectively with compromises and arrangements with creditors or members, and with the transfer of undertakings or property for the purposes of reconstruction or amalgamation of a company. Amendment No. 205 rectifies this by providing that any such order is not effective unless the corporation has given its consent. It further provides that a copy of the consent shall be sent to the registrar of companies along with the copy of the order.

Finally, Amendment No. 207 deals with an oversight in paragraph 24 of the schedule. It was always intended that failure to comply with an order of the corporation in respect of the holding of money or securities should be a summary offence, to be heard by a magistrates' court, rather than an offence to be heard by a Crown Court. This amendment rectifies that oversight. I beg to move.

6.15 p.m.

Lord Williams of Elvel: My Lords, I am grateful to the noble Lord for paying attention to what I said in Committee and for realising that to a large extent the Government's original suggestions were defective. I am also grateful to him for tabling some amendments which in some cases seem to rectify some of my problems with these provisions.

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The first difficulty that I see with Amendment No. 202 to which the noble Lord spoke--this difficulty follows through into Amendment No. 204--is the question of what happens if, at any general meeting of the company, the shareholders (or anybody else who is entitled to move a resolution) move a resolution to remove the director appointed by the corporation before he has been able to move his own resolution. It is up to the board to determine the agenda of the general meeting. The director is then removed if the shareholders vote in favour of the original measure and cannot then move his own resolution.

Secondly, what happens if the director appointed by the corporation moves his resolution and it is defeated by the shareholders? It may be a resolution to remove a certain director or a number of directors from the board of that local housing company. The shareholders have a right to vote on that and to reject the motion. What happens then? In my view, the authority of the corporation which appointed that director to engage in such an odd arrangement is thereby seriously damaged.

The corporation does not have any power to do anything. As I see it, it has a power only to appoint a director who may at some point early in the general meeting be removed. If the director is not removed, he may move a resolution which may then be defeated. What happens in those circumstances? Although I recognise that the noble Lord has moved a little in my direction, I am not entirely clear about how the provision might work in practice.

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