George Young (North West Hampshire, Conservative)

I am grateful to the Minister for what he just said about clause 36. It is a relief to us, and I hope that the dialogue ends with a happy resolution.

The CML also raised a specific problem with clause 37. I quote from the note that it sent to all members of the Committee:

“This section appears to pass on the requirement to repay grants...to successors in title.”

I do not think that anybody has any difficulty with that. The note goes on to state:

“If this is the case then security valuations would have to be adjusted to reflect the obligation of a successor in title to repay grant. This would mean that current registered providers could all be in breach of their loan covenants and would impact negatively on the financial capacity of registered providers going forward.”

I put the same question to the Minister as I did on clause 36: is there is a dialogue on the clause, and has his Department been able to satisfy the CML that the risks outlined in the passage that I have just read out do not exist, and that there is no impediment to its continuing to fund housing associations?

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

Once again, I thank the right hon. Gentleman. He is right to suggest that my response will be similar to that on clause 36. He will know that the provisions of clause 37 are the same as those in the Housing Act 1988 and the Housing Act 1996. We are looking into the CML’s point about how the operation of the determinations will interact with repossessions and so on. Dialogues are ongoing between officials and the CML, and they are proving fruitful. We are trying  to reassure the CML as much as we can, which is having a productive conclusion. I hope that reassures the right hon. Gentleman.