Housing and Regeneration Bill

I am happy to respond to this because one needs to explain why it is important to have this in primary legislation. In principle, it is important that Parliament understands what is proposed when one is discussing the borrowing powers of any public agency. This provision has been inherited from the Housing Associations Act 1985 and the limits are set at the same level as those available to the Housing Corporation. It is very much a standard provision for contingency powers. The current level is up to £2,300 million unless the Secretary of State provides for an increase to this limit, by order, up to a maximum ceiling of £3,000 million. These amounts were increased from those originally allowed in the Housing Associations Act 1985 by the Housing Act 1988. Essentially, the reason for the increase is because the Homes and Communities Agency will be bigger than the Housing Corporation for all the reasons that we know. It does not seem reasonable to expect the new agency to do more than the combined roles of its constituent parts while restricting its ability to borrow to less than one of its constituent parts, so, as I have said, the amounts are those applicable to the Housing Corporation. Retaining access to this amount of borrowing would seem reasonable, given the breadth and wide variety of the work that the agency will undertake. Those limits will provide the scope for the agency to borrow such amounts as it considers appropriate, but it will be restricted to the terms of Clause 23; that is, the agency can borrow only from the Secretary of State or the European Investment Bank over the longer term, or from any person over the short term, in order to manage its finances. We expect amounts such as these to be borrowed over the longer term rather than the shorter. I hope that clarifies why the clause is there and what it is intended to do, and that the noble Lord will be able to reassure his noble friend that everything is above board.