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However, during the passage of this Bill there has been strong cross-party support in both Houses for taking an enabling power in the current Bill. This would enable us to implement cross-domain regulation through
secondary legislation, rather than through the route of a fourth-Session Bill. I am not convinced that this would be a particularly advantageous method of achieving the shared goal we all want. It would not deliver cross-domain regulation any faster, as it will be complicated to draft the provisions whatever legislative route is chosen, and it would limit the opportunity for Parliament to scrutinise what will be an important and complex piece of legislation. However, it is also clear that Parliament has shown its preference. The argument that the regulator’s culture would develop and be defined if it only covered RSLs at the outset and there was no commitment in the Bill to include local authority social housing were strongly advanced in Committee and in the other place. On the basis of that strength of feeling, we brought forward an enabling clause on Third Reading in the other place so that the TSA’s culture and operating approach would be defined by the commitment to regulating both RSL and council house tenants.
The power contained in the new clause in Lords amendment No. 75 is unavoidably wide given the range of relevant legislation that will need to be amended. I am somewhat surprised that the other place was content with its broad scope. However, its broad nature is necessary, because it would be counter-productive to Parliament’s wishes if we were to forgo the opportunity to include cross-domain in this Bill only to find that we had drafted an enabling clause too tightly. However, Lords amendment No. 203 requires that the power will be subject to the affirmative resolution procedure in Parliament, and we intend to conduct a full public consultation on the draft regulations before they are laid before Parliament. This is a significant development, and one that I believe the whole House will welcome. It will mean that council tenants will enjoy the same protections and support from the regulator as housing association tenants without the need for a further Act of Parliament.
In a similar vein—I see that my hon. Friend the Member for Stroud (Mr. Drew) is in his place—the Government have always been committed to the development of well-managed and financially viable community land trusts. As I announced in April, we intend to consult later this year on how we can help to develop the community land trust sector further and overcome some of the barriers. We intended to consult at that stage on whether there should be a legal definition of community land trusts, but in view of the cross-party support in both Houses—led most eloquently by my hon. Friend—which strongly urged us to use the opportunities provided in this Bill to help support CLTs still further, we have accelerated this timetable to give a definition of community land trusts. Lords amendments Nos. 66 and 67 define CLTs. In drawing up this definition, we have worked closely with the CLT movement, and I am grateful for its positive and constructive input.
Part 2 of the Bill concentrates on raising the standards of housing services for tenants of social housing. A key part of achieving this objective is greater tenant empowerment, with better access to meaningful information to hold their provider of housing to account. Lords amendments Nos. 69, 70, 103 and 124 to 127 are about complaints and guidance. It has never been anticipated that the job of the regulator would be to address the bulk of tenants’ complaints; that is the responsibility of landlords themselves, through their complaints procedure,
and of the housing ombudsman. However, we have also always acknowledged that the TSA needs to be responsive to evidence from tenants and others about systematic failures by a provider, and to use that evidence to trigger regulatory intervention where needed to raise tenants’ standards or improve financial viability or governance. Lords amendments Nos. 103 and 124 to 127 amend clauses 190, 212 and 213 to achieve this objective explicitly. They require the TSA to issue guidance specifically relating to complaints about the performance of providers. The guidance must set out the procedure to be followed in making a complaint, the criteria to be used by the regulator in deciding whether to investigate, and the periods within which the regulator will aim to inform complainants of the result of complaints. The TSA will be obliged to consult tenant representatives before issuing this guidance. Lords amendments Nos. 69 and 70 also require it to include in its annual report a general description of the complaints it has received during the year and how it has dealt with them. This would improve transparency and accountability.
As part of tenant empowerment, we believe passionately that tenants should have the opportunity to be involved in the regulatory function. This is at the heart of part 2 of the Bill, with such measures as the requirement to consult tenant representatives on standards and guidance. I have already mentioned our wish that at least two of the regulator’s board members should have experience and direct knowledge of being a tenant. However, we are still keen to go further. Lords amendment No. 71 therefore inserts a new clause in the Bill to ensure that there is a statutory duty on the TSA to promote awareness of its functions among tenants and, where appropriate, to consult or involve them in the exercise of its functions. The new clause also requires the regulator to publish a statement describing how it will fulfil these duties. These additional statutory responsibilities have been warmly welcomed by key stakeholders, including the National Consumer Council, the Tenant Participation Advisory Service and the National Federation of ALMOs.
Debate in both Houses on part 2 of the Bill rightly concentrated on the appropriate balance to be struck between the wish to increase tenants’ standards, allowing the regulator appropriate powers to raise those standards and the fact that registered social landlords are independent bodies with responsibility for managing their own businesses. I have been aware at all stages of the Bill’s passage of concerns regarding regulatory creep or the passporting of policies from the Secretary of State to registered providers. The regulator must minimise interference and not misuse its powers, and it must act on the basis of evidence and of real need. With these broad aims in mind, we have responded to concerns that the major enforcement powers should be exercised only in the event of serious problems. Accordingly, Lords amendments Nos. 141, 142, 147 and 155 to 162 amend the regulator’s enforcement powers of management transfer, transfer of land, amalgamation, restrictions on dealings and removal or suspension of an officer. These enforcement powers could only ever be used after an inquiry, and their use would also be subject to the various other protections in the Bill against disproportionate regulatory intervention. Nevertheless, these amendments have provided further reassurance by removing so-called “breach of standards” as grounds for use of these enforcement
powers. We have also required that the regulator must obtain consent from the Secretary of State before using them.
In addition, we have addressed the concerns expressed in Committee by the hon. Member for Montgomeryshire (Lembit Öpik) that the fees set by the new regulator might be excessive. With Lords amendment No. 76, the Bill now requires the TSA to seek the Secretary of State’s agreement to the principles on which fees are set. That is a move from the original process, whereby the Bill required the regulator to consult the Secretary of State on those principles.
Lords amendments Nos. 108 to 119 relate to the inspection of registered providers. The Audit Commission inspects the overall management performance of all large housing associations over a certain period, and that has helped the overall and broad increase in standards, but given the new framework, in which investment and regulatory functions are being split, with the latter concerned with risk-based approaches, things can be done differently. Unlike the somewhat mechanical and cyclical current system, whereby inspections take place in a very similar way regardless of the risk across providers, the regulator will determine when an inspection is needed and what its scope should be. The aim is specifically to allow the regulator to pick up on things such as serious concerns about a provider’s performance as a result of information it collects or concerns raised by tenants and others about a specific estate.
Lords amendment No. 108 requires that the TSA must engage the Audit Commission to conduct inspections related to housing management functions—on standards—under clause 191. We do not wish the Bill to give rise to a plethora of different inspectorates, as we believe that would be unhelpful, confusing and counter-productive. However, other bodies, such as a major accountancy firm, for example, may be used to investigate governance or financial concerns, or anything that does not come under clause 191.
We have also responded to concerns raised in the Commons Committee stage about the disposal consents regime. Registered social landlords are currently required to seek the Housing Corporation’s consent for the disposal of any land. Lords amendment No. 89 ensures that where a non-profit registered provider wishes to sell a home that is let under a secure tenancy, it can do so only to another non-profit registered provider. Some of the protections of a secure tenancy rely on the status of a landlord as a public sector landlord or registered social landlord—or non-profit registered provider, as they will be known under the Bill. We do not wish to see a home let under a secure tenancy transferred to a non-profit making registered provider, as that would be contrary to this part of the Bill’s philosophy of protecting social housing tenants. The amendment makes that clear by explicitly prohibiting such a disposal. Lords amendments Nos. 90, 95, 96, 101 and 102 would ensure that disposals need only the regulator’s consent for social housing. Disposals of land not including social housing will not require the TSA’s consent.
Much like the group of amendments on part 1, this group also contains a number of minor and technical amendments designed to ensure that the Bill’s clauses work properly in practice. For example, the group includes amendments to restrict the TSA’s information-sharing powers, in response to concerns raised by the Joint
Committee on Human Rights. Lords amendment No. 78 arises directly from concerns raised in Committee stage by the hon. Member for Montgomeryshire that a requirement of the High Court to be the arbiter of an appeal against the decision of the regulator in respect of registration or deregistration would be, “Overkill and extortionately expensive”—I think that that is a direct quote. I agreed in Committee to go away and look at the matter, and we therefore tabled an amendment in the other place to see whether there could be a viable first-tier tribunal route. We see advantages in terms of lower costs and a reduced burden for smaller registered providers. The amendment therefore allows the Secretary of State, by order, to transfer the functions to the first-tier tribunal.
I apologise to the House for taking some time in addressing the amendments in part 2 of the Bill. Like my hon. Friend the Member for Luton, South (Margaret Moran), who touched on this in her intervention, I hope that the House will agree that they go a significant way to improving the Bill. They are an important part of the Bill, because they allow us to achieve our objectives: giving all social tenants more choice and a greater say over how their homes are managed; eliminating unnecessary regulation and bureaucracy; protecting public investment; and, crucially, improving standards for tenants. I commend the amendments to the House.
Grant Shapps: Again, I broadly welcome this group of amendments, despite the fact that they come too thick and fast, and too late in the process for the liking of Conservatives. The Minister will be interested to learn that we did not object to the idea that the office for social tenants and landlords might be known as Oftenant, rather than the Tenant Services Authority, which for some reason does not roll off the tongue so easily. He decided on his own to make an amendment to the name.
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On the substance, we had a long debate in Committee on the cross-domain regulation of Oftenant or whatever its new name; it has not been born yet, but already its name has been changed. It was strongly felt on both sides of the House that the idea of having a regulator that regulated only registered social landlords and did not regulate other social landlords, including local authorities, made nonsense of the purpose of providing fair regulation across the social sector. I welcome the Minister’s U-turn. He mentioned in response to the previous group of amendments that I had forgotten to welcome some of them, but I do welcome them, because U-turns are nearly always welcome in this regard.
It was curious that we could not get these changes in direction a little earlier, because all the way through the passage of the Bill there has been a compelling case for doing all this at one time. I do not accept the Minister’s arguments that it would be as complicated, or even more complicated, to describe these things in the primary legislation because lots of complicated secondary legislation would be required; such an approach clearly has to be more straightforward than introducing an entirely new Bill to provide exactly the same circumstances—the single regulator, whatever its name—across all social housing. Council tenants deserve nothing less than such provision; there is no reason to separate this into two. I
am made to wonder what the Government will now do, given that they have announced a pre-Queen’s Speech legislative programme in which they will legislate on this matter. Presumably, there will be one fewer piece of legislation or a gap in the programme—I am not sure which. I welcome the U-turn, although it could have come a little sooner. That would have allowed us a little more time to debate it, but, as I say, I think that both sides of the House agree on the measure.
There is also significant agreement on the welcome inclusion of a legal definition of community land trusts. I know that the Minister is aware of my interest in this subject. I had the pleasure of visiting a CLT self-build in Rock in Cornwall, about which I have spoken in this House previously. I found a community that was building its own homes; it was a do-it-yourself community land trust—a DIY CLT, to add more initials to this already complicated area. These individuals were leaving work at 5 pm and going to the CLT to build their own homes. I went there thinking that perhaps they had commissioned architects to build the homes for them using all the best principles, but they were physically constructing their own homes on evenings and at weekends.
The No.1 problem that those soon-to-be residents of the CLT had was that nobody in the finance world understood who they were and what they were trying to do, so for a long time—a year, in fact—they had battled to try to secure the finances for this thing called a CLT. Despite the fact that the financial institutions had an RSL helping them with the process, they simply could not get it into their minds where this fitted into the housing regime. When I put these points to the Minister on Report and, perhaps less forcefully, in Committee, he clearly told me that defining a CLT would add to the list principle that he most strongly rejected at the time—he has since changed his mind on that.
That practical example alone, as well as contact with many others who are now attempting to start their own CLT, convinced me that a legal definition, a framework, put in place by this House, which would help those who want to pursue the ultimate goal of a community based around the concept that people could live on a piece of land that would stay in common ownership in perpetuity to the benefit of those who came after them, has to be a good one.
The principle that land tends to be such a vast amount of the cost of any housing, even after a housing downturn, means that it must be right for this place to legislate a framework, a description, of what a CLT might mean in reality, and enable it, for example, to describe itself on a local basis. It is a classic example of what might be described as an enabling piece of legislation by Parliament, which can then be interpreted in the best possible way for the local community. I simply mean by that that the clause, which I am pleased to see is largely as we proposed it in Committee and now accepted by the Minister, will allow people locally to decide their own rules for the CLT. For example, it might include a commitment that the houses in the trust would remain for the use of people with local connections. Thus, in Rock in Cornwall, where it is now phenomenally expensive for someone brought up there to move into a house—a situation that is reflected in various parts of the country—the CLT might say in its local rules that the housing must always go to somebody who was either born there or had a strong connection with the area, or whatever other criteria it wishes to put in place.
I welcome this national framework, matched with sensible localised rules, which means that CLTs will be accelerated in years to come. I look forward to working with the Minister, perhaps even going on a joint visit to one of the pilot schemes that has been set up in his constituency in Hartlepool to see these in action. In our desire to solve Britain’s housing crisis, CLTs could point the way forward. I welcome the measure in particular because his response in Committee was so discouraging and demoralising. When I proposed a clause that was almost identical to the one now in the Bill, the Minister said that did not want to prescribe too overtly the various mechanisms by which the Homes and Communities Agency might help to deliver housing. He was also concerned about the future-proofing of such legislation. The Committee divided on the amendment, which was negatived, so I welcome the change of heart. I will be delighted to work with him to ensure that CLTs help to become the solution to the nation’s problem—to move from the test-bed and into reality, on a scale that is large enough to make a significant difference to communities throughout Britain who would greatly appreciate the outcome.
The Minister talked about tenant empowerment and, broadly speaking, I welcome and agree with some of the changes, which may not go far enough, but I respect the fact that we do not have the time this evening to get into the detail that was possible in Committee. [Interruption.] The Minister says that we do, but unfortunately we do not because the programme motion on which we divided gives us only until a certain hour. None the less, I do not want to be churlish and it should be said that the addition of greater tenant empowerment is to be welcomed. Of course it must be right that tenants play an active part in the way in which their communities and housing is run. Of course, almost by definition, the quality of housing must be improved when one allows the very people who have most to gain from good housing to be actively involved in its management. Therefore, these are welcome amendments, which we support.
Enforcement and control of the registered social landlords is yet another area covered by these many amendments where there has been a move in the right direction. I well remember the shock and concern of RSLs, as expressed through the National Housing Federation. They were running around frightened that the Bill would, perhaps even inadvertently, have the effect of partially nationalising a charitable element of housing by producing so much ministerial and state control over the RSLs that they ceased to operate freely, external to Government organisations. That concern was not just my own. I am sure that Treasury Ministers must have shared the concern that £35 billion or £38 billion of debt could end up on the Government’s balance sheet at a time when I am certain that, for reasons of economic downturn and perhaps competence or otherwise, it would not have gone down well in No. 11 Downing street.
The Minister quite bravely argued at an earlier stage that it was not necessary to water down the aspects of the Bill that dealt with the potential control of RSLs by the Secretary of State. But, again, I am pleased to see the amendments, without which we would end up in a situation where the flexibility, the entrepreneurship, the dynamic that makes housing associations work in providing
housing would have been to some extent, or perhaps to a great extent, choked off, unintentionally or otherwise, by the Bill. Therefore I welcome the changes.
I also welcome the realisation that if the Secretary of State was to ensure that appeals all went to the highest court in the land, the system would be snarled up to such an extent that it would be unworkable. The fact that a first-tier tribunal could be provided as a way of transferring responsibility from the Secretary of State for such decisions is to be greatly welcomed.
These are all good common-sense amendments to the Bill, which the Opposition welcome, not least because more than one of them were proposed by us and voted against by the Government. However, it is a pity to have literally had to reach the last hour or two of the Bill before having the opportunity to reflect on the changes. I say again to the Minister that better drafting, more thought, less dithering, or whatever it takes to have the right measures put in place early on, would have meant that this House and Parliament in general would have had a better opportunity to scrutinise the legislation and make it better for everyone who will rely on it.
Mr. Raynsford: I welcome the further amendments that we are considering, but I must correct the impression given by the hon. Member for Welwyn Hatfield (Grant Shapps) that these are the sum total of the amendments to the Bill in respect of the status of housing associations and the risk to their classification as non-public sector bodies. In practice, the main amendments that safeguarded the position of housing associations were carried on Report in this House before the Bill went to the other place, following a detailed debate on these issues in Committee.
Grant Shapps: I understand and appreciate the right hon. Gentleman’s comments, but does he agree that even though the amendments were made on Report, the three hours that we had to consider them was completely inadequate?
Mr. Raynsford: I will not debate the adequacy of Report stage, given the large number of amendments. I have expressed a view elsewhere on that subject and I alluded to it earlier in our proceedings this evening. I was simply correcting the implication that we had the amendments only at this late stage, because much of the work was done at an earlier stage. I welcome that because the Bill as originally drafted had defects, which I outlined on Second Reading and in Committee, and I welcome the positive response of my hon. Friend the Minister who listened and considered carefully, and who introduced amendments.
It is important, given that the National Housing Federation has been referred to, to put on the record the comments made by David Orr, chief executive of the federation, who wrote in this week’s Inside Housing:
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