Alistair
Burt: I am following the Minister intently. Yes, that is
where the weight of Government interest may be. However, the Government
are subject to other swathes of opinion. The problem with the clause as
it is drawn is that there is no guarantee that there may not be other
matters—beyond the regulator’s stated
objectives—that the Government might press on the regulator in
order to force direction under clause 177. That is what the right hon.
Member for Greenwich and Woolwich is getting at. I am not sure if he is
making a clear enough distinction between the powers that the regulator
should be using and the drive that will come from the
Government.
12.45
pm
Mr.
Wright: I have put on record my intention to look at the
matter again. Although I am very keen to engage with my right hon.
Friend the Member for Greenwich and Woolwich, with stakeholders and
with others to reassure them as much as possible, a balance needs to be
struck. The whole point of our proposed regulatory regime is to
maintain and improve standards for tenants. Cave has suggested that
that will take place in three broad areas: rents, physical maintenance
of the estate and tenant consultation and engagement. That is
important. I used my words very carefully, and I think that that is
where the weight of Government interest will lie. Amendments will be
brought forward to that effect. I do not want to pre-empt what I will
do or pre-empt discussions that I am going to have with my right hon.
Friend the Minister for Housing, and with stakeholders, but I think
that I am hinting, as much as I can, what I intend to do.
I do not want to seek to
direct very detailed standards. That is the job of the regulator. I do
not wish to see or intend to use the power to secure detailed
management control of registered providers on the part of the Secretary
of State. We do not want to achieve that. I still maintain, regardless
of all the concerns that have been raised, that it would not be
possible to have any such detailed management control from the
Secretary of State or the regulator.
In a previous sitting, we
discussed the fundamental objectives of clause 86, which are a very
important part of the Bill. Clause 86(11)
states: “Objective
10 is to regulate in a manner
which— (a)
minimises interference,
and (b) is
proportionate, consistent, transparent and
accountable.”
That important objective should not be
disregarded. The whole basis on which standards are set will be based
on that 10th objective. I hope that that reassures the
Committee. Bearing
in mind my commitment to look again at this whole area, I now come on
to the extremely important issue of public sector classification, which
gave me nightmares over the weekend. I am aware of the great concern
over the private sector status of registered social landlords and
Office for National Statistics classification, and I want to clarify
the Government’s position. David Orr of the National Housing
Federation and Lord Best mentioned their concerns in the oral evidence
sessions. They do not want to see a change in the status of RSLs.
Frankly, neither do the Government and we do not want to seek direct
management control. What I hope to do is to liberate from the burden of
regulation well-performing, viable RSLs, which have satisfied
tenants. As regards
current powers and current ONS classification, let me make it very
clear that ONS has already classified RSLs as being in the private
sector for the purpose of national accounts. That classification was
there before any changes in the Bill. It is true that the Housing
Corporation already has certain strong powers. For example, it can
already put directors on the boards of RSLs, it can hold an inquiry and
transfer assets to another owner. It can also require consents to
disposals of social homes. Such powers exist already and do not affect
classification and we have no intention of changing
them.
Mr.
Raynsford: My hon. Friend is perfectly right to say that
the Housing Corporation has significant powers. As I said earlier, that
is appropriate and necessary, and is compatible with the non-public
sector status and classification of housing associations. The important
distinction is that under the existing regulatory framework, the
Secretary of State does not have the powers in clause 177 to give
direction to the Housing Corporation on standards to be complied with.
That is the nub of my anxiety. The new legislation will create a direct
chain of command: the Secretary of State can direct the regulator who
can in turn impose standards on regulated bodies and require compliance
with those standards. That is a new element that will—informed
commentators have considered this—put at risk the non-public
sector
status.
Mr.
Wright: I accept my right hon. Friend’s point.
Under the Bill as it is currently drafted—I stress “as it
is currently drafted”—the regulator’s
standard-setting powers could be subject to direction from the
Secretary of State. We are reconsidering that, and I pledge to keep the
Committee and in particular my right hon. Friend informed on that
issue. My right hon.
Friend made an important point about the Bill containing additional
powers, but those powers are limited. They enable the regulator to
impose fines and obtain compensation for tenants, and they require the
transfer of management of poorly performing RSLs. The additional powers
are much like those for normal, private sector utilities, and are
modelled—to use the word of the moment—on the current,
modern regulatory regime. They bring regulation into line with other
regulated industries and are not, in any sense, management
control.
Sir
George Young: May I press the Minister on the evidence
that the former Minister for Housing, now the Chief Secretary to the
Treasury, gave to the Committee? She
said: “We have
had considerable discussions with the Treasury. I have asked about
potential arrangements for taking advice from the ONS in advance of the
Committee stage, as opposed to the normal approach in which the ONS
gets asked afterwards. It would be helpful to have its advice in
advance, and I have asked for it.”——[Official
Report, Housing and Regeneration Public Bill Committee, 13 December
2007; c. 142, Q233.] What has
happened to
it?
Mr.
Wright: I vividly remember that the right hon. Gentleman
responded by saying something like, “Not half.” If he
will allow me, I shall come to that important point in a moment or
two. First, let me
explain the general thrust of my argument. The additional powers are
similar to those for private sector utilities and are part of the
regulatory regime. Nothing is changing in that regard. The powers bring
regulation into line with other regulated industries and are not in any
sense management control. I want to stress that
point. The regulator
setting standards and fining bodies for transgressing them is no
different from the water regulator fining a utility, or the Health and
Safety Executive imposing fines. No one is saying that the bodies that
are subject to that sort of regulation are public bodies. Let me give a
few examples. Ofwat has powers to fine water and sewerage companies if
they breach statutory duties or licence conditions or if they do not
meet required standards of performance. The areas for which they are
subject to licence conditions and standards of performance and for
which they have statutory duties include breaching rules on training
arrangements and providing substandard services to customers by failing
to meet guaranteed standards of
service.
Mr.
Raynsford: I accept entirely the Minister’s
analogy. He will know from what I argued earlier that I have no
difficulty with standards being set for the core functions of
protecting public finance and the interests of tenants. However, I do
not know of any power requiring private utilities such as those
delivering water to make a contribution to the environmental, economic
and social well-being of an area. If there is such a power, I would be
interested to hear about it. That is the worry about the formulation in
the Bill—there is scope for mission creep. That point was raised
by the hon. Member for North-East Bedfordshire, but I am also concerned
that because of the wide range of issues on which the regulator can
specify standards, and the ability of the Secretary of State to direct
the creation of standards, there is the risk of a wider chain of
command that might put the classification at
risk.
Mr.
Wright: I fully understand and appreciate the point raised
by my right hon. Friend. We have already discussed issues about
environmental and social well-being. Can I give notice to the Committee
that, following my point about the utilities, I will go on to address
the points made by the right hon. Member for North-West Hampshire with
regard to what we have done about getting clarification from the ONS. I
will then come on to the specific point about environmental, social and
economic well-being.
The Health and Safety Executive
is another example of a regulated body. It regulates and can impose
fines for breaches of the Health and Safety at Work Act 1974—for
example, a failure to ensure the health, safety and welfare of
employees. Again, private companies remain classified as private sector
for the purposes of national accounts. Ofgem regulates the gas and
electricity networks and has powers to take enforcement action
including imposing financial penalties for breaches of requirements
imposed under various Acts—the Gas Act 1986 for example, or
issues of unfair customer practices. The private sector classification
of utilities such as the gas and electricity networks are not in any
doubt. I am reluctant to mention this point, as I know that the right
hon. Member for North-West Hampshire has a whole range of knowledge
with regard to it. However, in terms of Network Rail and the whole rail
infrastructure, the Office of Rail Regulation has a range of statutory
powers under the Railways Act 1993. It issues licenses with a number of
conditions or provisions with which the licence holder must comply.
Given those important examples, the message is clear. There can be
significant obligations placed on companies with regard to their
regulations, without any question of their private sector status. I
hope that reassures hon. Members.
The point
raised by the right hon. Member for North-West Hampshire is important
in terms of dealing with the ONS and the Treasury. There has been
considerable discussion with the Treasury about the matter. During his
review, Martin Cave discussed his emergent thinking with Treasury
officials, to understand the implications for the classification of his
proposed changes to the regulatory system. My own officials have
discussed the
changes proposed in present legislation with the Treasury during the
detailed drafting and development of the Bill. A meeting took place on
2 October 2007. After the introduction of the Bill to the House, my
officials again considered the changes in the Bill with the Treasury.
That took place on 21 December 2007 after the oral evidence
sessions. Earlier
this month on 7 January, the Chief Secretary to the Treasury, my right
hon. Friend the Member for Pontefract and Castleford,who was then
Minister for Housing, and I met with departmental and Treasury
officials. We asked the Treasury at that meeting about the arrangements
for taking advice from the ONS—precisely as my right hon. Friend
the Member for Greenwich and Woolwich said in response to the question
put by the right hon. Member for North-West Hampshire. We asked the
Treasury in its capacity as experts on the production of the public
finances, and, for want of a better term, the owner of the
Government-ONS relationship—
Mr.
Love: I am listening intently. As the Minister has
indicated, this is a complex area. However, he will be aware of the
recent Statistics and Registration Service Act 2007, which gives the
ONS and statistics generally much greater independence from the
Treasury. I wonder whether he has sought reassurance from the Treasury
that his view would be reflected in the new ONS and statistics
structure.
Mr.
Wright: My hon. Friend has no idea how grateful I am for
that intervention.
It being One
o’clock, the Chairman adjourned
the Committee without Question put, pursuant to the Standing
Order. Adjourned
till this day at Four
o’clock.
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