Housing and Regeneration Bill

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Mr. Wright: I have a lot of sympathy with what the hon. Gentleman is trying to do. I pay tribute to the manner in which he has outlined his case. As he said, the new clause would provide for a code of conduct covering payments and benefits to officers in place of existing statute. The Government share his aim, which they agreed to following the 2006 Elton review. However, I suggest that the same outcome could be achieved in the Bill without the new clause, and arguably in a less centralised manner.
With clause 118, we are repealing paragraphs 2 and 3 of schedule 1 of the Housing Act 2006, for England. Clause 63 ensures that schedule 1 will apply only to Wales. The Bill reintroduces some parts of the schedule; for example, paragraph 1 comes in as clause 118, but paragraphs 2 and 3 do not.
The regulator may set standards on payments and benefits in clause 174, following consultation. It could choose not to do so if it trusts the sector to get it right and wants to minimise burdens. The Secretary of State will not be able to direct on those measures, and I anticipate a fierce debate about the role of the Secretary of State with regard to directions and standards when we debate clause 173. We do not think it necessary or appropriate to give the Secretary of State a role in relation to such standards, given the greater independence we envisage for the new regulator. That is a fundamental point and we must protect the regulator’s independence as much as possible.
The regulator will be explicitly permitted by amendment No. 238 to clause 178 to set standards referring to documents produced by others, such as a code of conduct produced by the sector. If the regulator wanted the standards to follow a code of conduct, it could set standards accordingly, but that would be a matter for the regulator not the Secretary of State.
The new clause leaves an unfortunate gap in regulation in Wales, as it would repeal paragraphs 2 and 3, which are concerned with Wales, without providing for an alternative. I doubt that is what those tabling the amendments, including the hon. Gentleman and the Welsh Assembly Government would want. I have sympathy with the argument, but I hope that the hon. Gentleman will recognise the central thrust of my argument—that we are trying to move away from centralised diktat from the Secretary of State that is in nobody’s interests with regard to the new regulatory regime. On that basis, I hope that he will not move new clause 4.
Grant Shapps: I am grateful for the Minister’s response, in particular the admission that he recognises the problem that new clause 4 seeks to correct, or prevent. I am also satisfied with his explanation of how the Bill might help to deal with those issues. As he has put on the record his agreement with the principles, if not the wording, of the new clause, I ask leave to withdraw the motion—oh, I do not need to.
The Chairman: There is no need to withdraw the motion because it has not been moved, but I will take what the hon. Gentleman says as an indication that he does not wish to move the motion formally when we reach it.
Question put and agreed to.
Clause 118 ordered to stand part of the Bill.
Clause 119 ordered to stand part of the Bill.
11.45 pm

Clause 120

Mr. Wright: I beg to move amendment No. 198, in clause 120, page 49, line 8, at end insert—
‘“Housing Corporation”
“Regulator of Social Housing”’.
The Chairman: With this it will be convenient to discuss Government amendments Nos. 199, 304 and 306.
Mr. Wright: These are minor and consequential amendments. They will make sure that clause 120 has the desired effect, which is to require registered providers to be members of the housing ombudsman scheme, as RSLs are at present.
Amendments Nos. 198 and 199 make further changes to schedule 2 to the Housing Act 1996 to remove references to the Housing Corporation and replace some of them with references to the regulator of social housing.
Amendments Nos. 304 and 306 simply add to the schedule of provisions to be repealed the references to the Housing Corporation in schedule 2 to the Housing Act 1996 and schedule 16 to the Government of Wales Act 1998, which are to be omitted by amendment No. 198.
The amendments are very technical and very minor. On that basis, I hope that the Committee will accept them.
Amendment agreed to.
Amendment made: No. 199, in clause 120, page 49, line 8, at end insert—
‘( ) In paragraph 11(4) of Schedule 2 to that Act (grants), omit—
(a) “or the Housing Corporation”, and
(b) “or, as the case may be, the Housing Corporation”.’.—[Mr. Wright.]
Question proposed, That the clause, as amended, stand part of the Bill.
Sir George Young: The clause carries forward the housing ombudsman, and we are all pleased to see that. What will happen, however, when we reach our goal of having a single domain regulator, and local authority housing comes under the regulator’s remit? Will complaints by local authority tenants continue to go to the local government ombudsman, while complaints by housing association tenants will go to the housing ombudsman, or does the Minister envisage some harmonisation of the ombudsman service?
Mr. Wright: I anticipate that the former suggestion will be the correct one and that matters regarding housing will be subject to scrutiny by the local housing ombudsman. Having said that, the situation is fluid, and we will certainly explore it as we move forward over the next two years. However, that is certainly how I currently anticipate that things will be.
Question put and agreed to.
Clause 120, as amended, ordered to stand part of the Bill.
Clauses 121 and 122 ordered to stand part of the Bill.

Clause 123

Lembit Öpik: I beg to move amendment No. 77, in clause 123, page 49, line 25, leave out ‘non-profit’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 78, in clause 124, page 50, line 11, leave out ‘non-profit’.
No. 79, in clause 125, page 50, line 22, leave out ‘non-profit’.
No. 80, in clause 126, page 50, line 41, leave out ‘non-profit’.
Lembit Öpik: We have discussed the possibility of treating profit-based registered providers in the same way as non-profit registered providers on several occasions. The amendments would simply create a level playing field between the two in terms of accounts and regulation. It is important that the regulator can address the accounts of profit-making registered providers in the same way as those of non-profit-making registered providers. I seek the Minister’s perspective on that view.
The Chairman: The question is that the amendment be made—sorry, I call Mr. Wright.
Mr. Wright: You did have an early start today, Mr. Gale, as I can testify.
The Chairman: Order. The Minister tells me that he was still in bed, when I was broadcasting to the nation.
Mr. Wright: I did not say that I was in bed—I was reading the clauses of the Bill. [Laughter.] Can we move swiftly on?
Amendment No. 230 will amend clause 174, which will allow the regulator to set standards for profit-based organisations. As we have said, we need to make it clear that given the absence of shareholders, and with the real economic interest in the activity of a business, the non-profit sector should have regulation to fill the gap and make what is going on transparent. That is essential, which is why we propose that the regulator should be able to direct non-profit providers as to the preparation of their accounts, just as the Housing Corporation does at present under the Housing Act 1996.
Given the assets with which profit-making registered providers will be entrusted, we will consider whether it is sensible to extend the regulator’s powers in relation to accounting directions to profit-making providers in the interests of transparency, as proposed by amendments Nos. 77 and 78. The hon. Member for Montgomeryshire has made a good case for amendments Nos. 77 and 78.
Having said that, amendments Nos. 79 and 80 do not make much sense. The clauses that they seek to amend apply to industrial and provident societies, which are referred to under clause 125, and registered charities, which are referred to under clause 126. By definition, such organisations cannot be for-profit. Clause 111(2) explicitly provides that
“A body is a non-profit organisation if it is a registered or non-registrable charity.”
So even if amendment No. 80 were accepted, it would have no practical effect, because there would not be any registered providers that were registered charities and profit making. As I have stated, I want to consider the appropriate role for the regulator in relation to accounting requirements for profit-making providers. On that basis, I hope that I have moved some way towards the hon. Gentleman’s argument and that he will withdraw the amendment.
Lembit Öpik: First, I apologise to you, Mr. Gale, for affecting you with my own doziness, as displayed by amendments Nos. 106 and 107. [Hon. Members: “Ooh.”] I blame myself, Mr. Gale—it was entirely my fault and I am glad to see that you have made a full recovery.
Moving swiftly back to the amendments, Government amendment No. 230, which relates to clause 174, seems to address the same point, although I had not realised that that is the case. It seems that the Government are giving the regulator the powers that I am trying to provide under clause 123 in a different way. When we get to clause 174, I hope that the Minister will expand on how Government amendment No. 230 relates to the clauses. On that basis, I am reassured that the Government have considered the matter, albeit by way of an amendment.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Wright: I beg to move amendment No. 200, in clause 123, page 50, leave out line 5.
The hon. Member for Montgomeryshire is a far braver man than me, because I would never accuse you of being dozy, Mr. Gale.
The Chairman: You are very wise.
Mr. Wright: I do not know whether the hon. Gentleman is brave or stupid, but I shall leave it to the Committee to decide.
Lembit Öpik: On a point of order, Mr. Gale. I apologise to one and all in the Committee for my moment of madness. As I heard the words coming out of my mouth, I knew that I had made a dreadful mistake. I seek the forbearance of the Committee and crave your forgiveness, Mr. Gale. It will not happen again.
Mr. Wright: I am sure that the Committee would like to discuss amendment No. 200, which is an example of how the new regulatory framework in the Bill differs from the current position, as defined by the Housing Act 1996. Amendment No. 200 will remove the Secretary of State’s role in agreeing to accounting directions that apply to more than one registered provider. That position is much more in keeping with an independent regulator bound by statutory objectives. It would be wrong for the Secretary of State to be involved in such day-to-day regulation. That is a change from the position as defined in schedule 1 to the 1996 Act and fundamentally further emphasises the new regulator’s greater independence from central Government. I am keen to highlight that, and no doubt we will touch on it later today.
Amendment agreed to.
Clause 123, as amended, ordered to stand part of the Bill.
Clauses 124 to 130 ordered to stand part of the Bill.

Clause 131

Charity: auditor’s powers
Mr. Wright: I beg to move amendment No. 201, in clause 131, page 53, line 8, leave out ‘social housing’ and insert ‘its housing activities’.
We were on a roll, which I have chosen to stop.
Clause 131 covers the powers of an auditor or reporting accountant undertaking either a normal audit or producing an accountant’s report under clause 127 or an extraordinary audit under clause 130 in relation to a registered provider that is a charity. The charity must grant the auditor or reporting accountant access to its records, and its officers must provide such information or explanations as the auditor or reporting accountant think necessary.
The triggers for what is termed a normal audit are when income or assets from a charitable registered provider’s housing activities, as opposed to social housing activities alone, exceed certain thresholds. The amendment enables the auditor to access information about all housing activities. If the income or assets from the body’s social housing activities are below the specified thresholds, an accountant’s report is required under clause 127(3), although an extraordinary audit can be ordered under clause 130.
An auditor’s report must state whether the revenue account gives a true and fair view of the charity’s income and expenditure, so far as they relate to its housing activities. Amendment No. 201 is needed simply because the social housing activities of a charity may not encompass all its housing activities; for example, student hostels, which are explicitly excluded from the definition of social housing. The effect of the amendment is to enable access to a sufficiently wide range of information. Otherwise, only a partial picture would be given, and a comprehensive audit or accountant’s report would be inhibited. The amendment aligns the access to information with matters to be examined by the reporting accountant or auditor. It applies the current position in schedule 1(18) to the Housing Act 1996. I hope that hon. Members accept my explanation of the amendment.
Amendment agreed to.
Clause 131, as amended, ordered to stand part of the Bill.
Clauses 132 to 136 ordered to stand part of the Bill.
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