 House of Commons |
Session 2007 - 08 Publications on the internet General Committee Debates Housing and Regeneration |
Housing and Regeneration Bill |
The Committee consisted of the following Members:Hannah Weston, Committee
Clerk
† attended the
Committee
Public Bill CommitteeTuesday 29 January 2008(Afternoon)[Mr. Joe Benton in the Chair]Housing and Regeneration BillClause 172Overview
Amendment
proposed [this day]: No. 345, in
clause 172, page 67, line 29, leave
out ‘compliance’ and insert
‘performance’.—[Mr.
Raynsford.]
4
pm
Question
again proposed, That the amendment be
made.
The
Chairman:
I remind the Committee that with this we are
discussing the following: amendment No. 44, in
clause 173, page 68, line 3, after
‘may’ insert
‘, in
accordance with subsection (2) and subject to subsection
(3),’.
Amendment
No. 41, in clause 173, page 68,
line 3, leave out ‘as’ and insert
‘for the purpose of protecting investment in social
housing or protecting the interests of tenants and residents in social
housing. These standards may
refer’
Amendment
No. 45, in clause 173, page 68, line 7,
leave out from ‘may’ to the end of line 8 and insert
‘cover-’
Government
amendment No.
229.
Amendment No. 42,
in clause 173, page 68, leave out lines 22
and 23.
Amendment No.
43, in clause 173, page 68, line 24, at end
insert—
‘(3) In setting
standards the regulator shall have regard (among other matters) to
landlords’ contribution to the environmental, social and
economic well-being of the areas in which their property is
situated.’.
Amendment
No. 47, in clause 174, page 68, line 27, at
end insert—
‘(2) In setting
standards, the regulator shall have regard (among other matters) to
providers’ contribution to the environmental, social and
economic well-being of the areas in which their property is
situated.’.
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright):
It is good to see
you in the Chair, Mr. Benton. It seems like a long time
since you were last presiding over us.
My hon. Friend the Member for
Edmonton, who is not in his place at the moment, has mentioned the
independence of the Office for National Statistics. The position is
clear. It is not for Departments to approach the ONS directly as part
of their development of Government policy, which would risk
compromising the independence of the ONS. All discussions on such
matters are conducted through Her Majesty’s Treasury, which has
advised us that the changes proposed under the Bill are not salient to
the classification decision. It is not therefore appropriate to consult
the ONS on the
changes. I suggest to the Committee that that is the proper process and,
on that basis, I am clear that the proposed changes do not
amount to direct management control, which has been suggested, and that
the Bill does not change the classification
process.
Mr.
Nick Raynsford (Greenwich and Woolwich) (Lab): Reference
has been made to a number of experts who have commented on the issue.
Julian Ashby, who gave evidence on 13 December,
said:
“When
working on the Cave review...we sought advice about the
classification...The aspect of the Bill that gives me concern
relates to clause 177...It seems to undermine the purpose of
having an independent regulator if the Secretary of State then
determines the detail of the standards that were for the regulator to
set.”——[Official Report, Housing and
Regeneration Public Bill Committee, 13 December 2007; c. 87,
Q140.]
I could go on,
because he gave clear evidence. When he was on the Cave review, he took
evidence from the Treasury, but he expressed concern that the Bill, as
drafted, did not achieve the objective that the Cave review felt was
the right way forward. Does my hon. Friend consider that there is
really ground for worry and that, by some means or another, the view of
the ONS should be sought before the situation becomes a fait accompli
with disastrous
consequences?
Mr.
Wright:
I agree with my right hon. Friend that it is
important to make sure that we get matters right, and I am satisfied
that we have followed the due process in that regard. I hope that he
will intervene, if I have matters wrong, but at the evidence session
Julian Ashby said something about the Secretary of State determining
the detail of standards—I hope that I understood him correctly,
because I do not have a copy of the report in front of me. I suggest
that that is not even how the current regime that we propose stands.
The Secretary of State will not direct in detail the nature of
standards, and it will be a broad-brush approach. The regulator will
undertake that direction, but we do not anticipate the Secretary of
State taking part in direct
detail.
“The
aspect of the Bill that gives me concern relates to clause 177, in
which the Secretary of State will have the power to direct the
regulator not simply to set standards in particular areas but to set
the content of those standards. It seems to undermine the purpose of
having an independent regulator if the Secretary of State then
determines the detail of the standards that were for the regulator to
set.”
He goes
on:
“The
overall assessment of whether something is a public body is made on a
rounded judgment. It is not a single issue matter, but the more the
Government have the power to intervene directly, the greater is the
risk of classification as a public
body.”——[Official Report, Housing and
Regeneration Public Bill Committee, 13 December 2007; c. 87-88,
Q140.
]
The
experience of foundation hospitals is such that we should be very wary
indeed in respect of
classification.
Mr.
Wright:
I agree that we should be absolutely certain. My
firm feeling is that the Bill does not represent my right hon.
Friend’s interpretation of it. However, I am aware of the worry
about such matters. I hope that he agrees that the right approach is to
work in consultation with stakeholders and that he and
others will play a large role in ensuring that we get the matter
absolutely right. I do not agree with the concerns about direct
management control. However, I hope that we can move forward on
particular areas such as directions, guidance and standards in which
the Secretary of State is
interested.
Amendment
No. 42 proposes to omit clause 173(2)(k), which permits the
regulator to set standards
on
“landlords’
contribution to the environmental, social and economic well-being of
the areas in which their property is situated”.
That was mentioned by my right hon.
Friend this morning, and it has been reiterated several times during
the Bill’s deliberations. There is concern that the regulator
may be able to set and enforce standards on non-social housing issues,
including local voluntary activities—we certainly do not want to
discourage such activities.
As I explained in the debate on
clause 86, while subsection (2)(k) would allow the regulator to
regulate such activities, if they are linked to social housing, it does
not necessarily follow that that power will be used. The regulator does
not have to use that power, and there might be more appropriate ways of
achieving the regulator’s sixth objective. Nevertheless, we
believe that the regulator should have power to regulate registered
providers’ wider community activities. Martin Cave recommended
that all parts of the domain should have a statutory duty to co-operate
with the convening and place-shaping role of local authorities. That
obligation will be stronger in areas in which a provider has a
significant number of homes. I share my right hon. Friend’s
concern that any requirements imposed on registered providers in
relation to place shaping should not be unduly or disproportionately
onerous. That is why we rejected imposing a direct statutory duty, as
the Cave review suggested. It would be difficult adequately to express
in the Bill the idea that the strength of the obligation should vary
depending on the extent of the landlords’ activities in an
area.
Subsection
(2)(k) was included to ensure that registered social landlords
co-operate with local authorities in local place shaping, but in a
reasonable and proportionate manner to their holdings in an area. By
giving the regulator the power to set standards, acting in accordance
with its objectives to regulate proportionately and in a way that
minimises the burden of regulation, I believe that we are carrying
forward the spirit of Cave’s recommendations, but in a manner
that is less onerous and more flexible and
practical.
My right
hon. Friend the Member for Greenwich and Woolwich also expressed
concern about what a standard under clause 173(2)(k) might require.
However, that is not for me to say, because such standards will be set
by the regulator. On that basis, I hope that I have reassured him on a
whole range of things, and I hope that I have made it clear that the
Government intend to move forward on the regulator, the setting of
standards and the role of the Secretary of State. Therefore, I ask my
right hon. Friend to withdraw the
amendment.
Government
amendment No. 229 is our only amendment to clause 173. It is a
technical amendment that will
insert
“policy and
procedures required by section 218A of the Housing Act 1996 in
connection with”
before “anti-social
behaviour” in subsection (2)(j). The aim is to clarify that
standards on antisocial behaviour should only be in respect of existing
duties and powers of landlords under the 1996 Act and should not be a
wider, open-ended power. In that way, I hope that we are mitigating the
concerns and risks that stakeholders have expressed with regard to the
antisocial behaviour standard as well. That is the approach that I aim
to take forward as the Bill progress through all its
stages.
I hope that I
have explained my policy and position in detail and that I have
reassured hon.
Members.
Sir
George Young (North-West Hampshire) (Con): I want briefly
to respond to what the Minister said before he moved on to the
Government amendment. I agree with him that this is one of the most
important issues in the Bill, as the right hon. Member for Greenwich
and Woolwich has also said. It is the obverse of the problem with
SociÃ(c)tÃ(c) GÃ(c)nÃ(c)rale, which thought that there
was something on the balance sheet and then discovered that it was not.
With this, the Government thought that something was off the balance
sheet, but they may discover that it is inadvertently on it. That is
the other side of the coin.
Before we rose for lunch, the
Minister said that he would look at the issue again and engage opinions
on it before Third Reading. That was helpful, but I am worried that he
is relying on meetings with Treasury officials. Treasury officials are
not omniscient. They were wrong about foundation hospitals—they
said that they would be off balance sheet, but they turned out to be on
balance sheet. There is a risk in relying on Treasury opinion. I am
sorry to press the Minister, but I remind him what the Chief Secretary
to the Treasury, the former Minister for Housing, said about the
ONS:
“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.]
In other words,
she asked the ONS for its advice. However, the Minister has not made it
clear what the advice might have
been.
The Minister
said—I think that I understood him—that it would be
improper to have a dialogue with the ONS, because it is independent. I
do not follow that line of argument. Yes, it is independent, but what
would be wrong with the Government saying, “We must get this
definition right. This is what is in the Bill. Will you tell us whether
we run the risk of having the debt classified as public sector
borrowing?” What would be improper about such a dialogue, which
seems entirely sensible? Indeed, the Chief Secretary to the Treasury
thought it was sensible on 12 December. Now, there will be no direct
dialogue with the ONS and the matter must go through the Treasury,
which will not put the question to the ONS
directly.
I want to
press the Minister about the alleged impropriety of talking in advance
to the ONS about the likely definition of housing association
borrowings. I have listened to what he has said about the measure
simply bringing the social housing regulator into line with other
regulators. I do not know whether in his nightmare weekend he read the
Centre for Economics and Business Research report that compared this
regulator with all the others. The powers in this Bill go way beyond
those of other regulators. For example, as we discovered a few moments
ago, appeals against this regulator can be made only to the High Court,
whereas other regulators have an appeal body. The Charities Act 2006
states that charity
commissioners
“shall
not be subject to the direction or control of any Minister of the
Crown”.
The
rail regulator, despite much pressure to the
contrary, is only required “to have regard” to Government
guidance. On Ofcom, there are a few occasions where the Secretary of
State can make directions, but those are in the interests of national
security, relations with a foreign Government, for securing compliance
with international obligations or in the interests of public safety or
public health. Those definitions are much narrower than the definitions
in the Bill.
Having
listened to the debate, my anxieties have not been allayed. The
Government could go further than they have so far in getting the
necessary assurances from the ONS that the debt likely to be incurred
will not be scored as public sector debt. As a responsible Minister, he
owes it to the Committee to come back on Report with better assurances
than he has given today.
Mr.
Wright:
The matter is important, and I appreciate the way
in which the right hon. Gentleman has set out his concerns. As I have
said, I am satisfied that we have followed due process. I appreciate
that the provision is a very important part of the Bill, and we want to
get it right. There are concerns, and I have pledged to the Committee
that I will go away and re-examine the matter to reassure the Committee
and wider stakeholders that management control—direct
micro-management by the Secretary of State—will not be enacted
as a result of the Bill’s provisions. I recognise the point, but
I want to reaffirm that I am satisfied that we have followed due
process in liaising with the Treasury and discussing its interpretation
of the issue. I understand the point about going directly to the ONS,
but I am clear that what we have done will not comprise the
independence of the ONS, notwithstanding what has been said about the
matter.
4.15
pm
Mr.
Andrew Love (Edmonton) (Lab/Co-op): I apologise to the
Minister for not being present when he answered the question that I
asked immediately before we broke for lunch. To follow up the comments
made by the right hon. Member for North-West Hampshire, this area is
incredibly complex. I understand what the Minister said about the
propriety of speaking about independent organisations, but I shall
choose just one particular complexity in relation to Network Rail.
There has been constant discussion about whether Network Rail is in or
out and whether it has public sector debt, which gives a flavour of the
complexity. Before the Bill is enacted, it is important that
reassurance is provided that what the Government intend to do with the
Bill will actually be carried through and will hold firm into the
future.
Mr.
Wright:
That is exactly what we all want. I am
disappointed that my hon. Friend was not here, because my answer was,
if I may say so, spectacular. It
sorted out all the problems—I wish. My hon. Friend has made an
important point about Network Rail, as has the right hon. Member for
North-West Hampshire on foundation
trusts.
When I was
having my nightmare weekend reading about the Committee from 2003, I
noticed a comment by the right hon. Member for North-West Hampshire on
foundation trusts. He said
that
“The
Under-Secretary can provide no precedent”—
the Under-Secretary was
my right hon. Friend the Secretary of State for Communities and Local
Government—
“for
the corporate vehicle that is envisaged in the
Bill.”——[Official Report, Health and Social
Care (Community Health and Standards) Public Bill Committee, 13 May
2003; c. 48.]
I suggest to the
right hon. Gentleman that we are some way away from that. Foundation
trusts were a new platform for the delivery and provision of health
care, and we are in no way near that. I hope that that provides a
degree of reassurance. In that Committee, the right hon. Gentleman also
suggested to the then Under-Secretary that he wished to see her rapidly
promoted to Minister of State, Office of the Deputy Prime Minister, but
she has done one better than that, because she is now a Secretary of
State.
The point
about foundation trusts is important, and I hope that the right hon.
Gentleman is reassured that we have not gone as far as that on
innovative new vehicles, because RSLs are essentially the same as
registered providers. We cannot get that important matter wrong. I
shall go away and look at it to ensure that I can provide greater
reassurance on
Report.
Mr.
Raynsford:
We have had a good debate and aired a number of
extremely important issues. I do not think that any of us should
underestimate the significance of what we have been talking about,
because if the classification issue is not got right, the whole
strategy for delivering an expanded housing programme and for
facilitating investment through housing associations is destroyed.
Therefore, I am pleased that the Minister has accepted that there is a
need for further reflection and that he has welcomed the participation
of the stakeholders in that process. I shall be only too happy to
continue to play a role in that, if he would welcome
it.
We need to
consider the structure of this part of the Bill, and the Minister has
indicated that that will be examined. We need to be absolutely
satisfied that the way forward does not have the malign consequences
that have been pointed out by the right hon. Member for North-West
Hampshire, my hon. Friend the Member for Edmonton and me.
This is the moment for me to
seek leave to withdraw the amendment, and I shall do so. I will add the
slightly mischievous comment that given the Minister’s concern
that the consultation with the ONS should be done only through the
Treasury, he is extraordinarily well placed, in that the Chief
Secretary to the Treasury, the former Minister for Housing, can pursue
her inquiries in her new role without any breach of propriety. I hope
that the clarification of the position on the ONS proceeds and that we
will have greater certainty when we return to the matter.
I beg to ask leave to withdraw
the amendment.
Amendment, by leave,
withdrawn.
Mr.
Raynsford:
I beg to move amendment No. 346, in
clause 172, page 67, line 30, leave
out from ‘regulator’ to ‘registered’ in
line 31 and insert
‘certain powers relating
to the governing instruments
of’.
Amendment
No. 350, in
clause 188, page 72, line 31, leave
out from ‘office’ to end of line 36 and insert
‘or,
(c) rules, except as provided
in subsection (3).
(3) The
regulator’s prior written consent is required to any change in
the society’s objects, or any change in the society’s
rules directing the application of its property in the event of its
dissolution, or any change providing authorisation for any benefit to
be obtained by directors or members of the society or persons connected
with them.
(4) Any change
requiring the regulator’s consent shall be invalid unless such
consent has been obtained.
(5)
In respect of changes requiring the regulator’s consent, the
requirement in section 10(1) of the Industrial and Provident Societies
Act 1965 (c. 12) (sending copies of amendment of rules to FSA) is
satisfied only if the copies are accompanied by a copy of the
regulator’s
consent.’.
Amendment
No. 351, in
clause 190, page 73, line 10, leave
out from ‘office’ to end of line 15 and insert
‘or,
(c) memorandum and articles of
association, except as provided in subsection
(3).
(3) The regulator’s
prior written consent is required to any change in the objects clause
in the company’s memorandum of association, or any change in the
company’s memorandum or articles of association directing the
application of its property in the event of its dissolution, or any
change in the company’s memorandum or articles of association
providing authorisation for any benefit to be obtained by directors or
members of the company or persons connected with
them.
(4) Any change requiring
the regulator’s consent shall be invalid unless such consent has
been obtained.
(5) In respect
of changes requiring the regulator’s consent, the requirement in
section 30 of the Companies Act 2006 (c. 46) (sending copy of
resolution to registrar) is satisfied only if the copy is accompanied
by a copy of the regulator’s
consent.’.
Clause
187 stand
part.
Mr.
Raynsford:
I will not detain the Committee, because the
amendments are broadly similar to those that we have debated. Amendment
No. 346 would amend clause 172(c), which gives the regulator
a
“degree of control over
the governance of non-profit registered providers”,
to give a slightly more felicitous
wording, so that the regulator would
have
“certain powers
relating to the governing instruments
of”
registered providers.
Obviously, the purpose is to safeguard against a possible
interpretation of the “degree of control” to be exercised
over RSLs, which might lead to their being classified as public sector
bodies. Those arguments have been rehearsed, and there is no point
repeating
them.
Amendments Nos.
350 and 351 are of a different nature. I am puzzled about the grouping,
but that is not for me to question—it is your decision,
Mr. Benton. The amendments concern the smaller issue of the
consent that is required by RSLs who seek to change the rules. Under
the Bill, the regulator must give prior consent for any changes in the
rules. The amendments
would limit that consent to important changes in the
organisation’s objectives, changes in the rules that apply to
the use of property in the event of an organisation going out of
existence, or any changes
“providing authorisation for any
benefit to be obtained by directors or
members”
of the
organisation
“or persons
connected with
them”.
Those
would be proper safeguards. Prior consent for such changes from the
regulator is appropriate, and more technical or trivial changes really
ought not to require prior consent from the regulator. If we are
seeking to act on the conclusions of the Elton review, which looked at
the degree to which housing associations are subject to over-heavy
regulation, this is a matter where there is scope for
improvement.
I hope
that my hon. Friend the Minister can at least reassure me on the
objectives of the amendments, even if he will resist the precise
wording. It is in all our interests that there is an effective form of
regulation that does not involve over-detailed or over-intrusive
examination of relatively trivial
matters.
Andrew
George (St. Ives) (LD): Will the right hon.
Gentleman comment on the need to ensure
cross-compliance between the regulations on housing associations
proposed under the Bill, and the Charities Act 2006, which, I
understand, contains similar wording to the amendments?
Cross-compliance would surely add to the robustness sought by the
amendments.
Mr.
Raynsford:
I am grateful to the hon. Gentleman for raising
that germane point. We should ensure consistency
between the different regulatory regimes that apply in general to
housing associations, and specifically to those that are charities, and
other charities.
Those are the purposes of the
amendments, and I hope that my hon. Friend the Minister will give them
sympathetic consideration.
Mr.
Wright:
I have a lot of sympathy with the motivation
behind amendments Nos. 350 and 351. As my right hon. Friend has rightly
pointed out, they identify the key areas of interest for the regulator
in a provider’s constitution. However, I hope that my right
hon. Friend accepts that I cannot accept the
amendments without first considering a detailed analysis of the risks
of removing the existing controls. I pledge to do that, and I hope to
update him on
Report.
On amendment
No. 346, I agree that the regulator should not and will not have
general control over a registered provider’s
day-to-day management or activities. I suggest that that will remain
the responsibility of registered providers’ governing boards,
which is how it should be. Clauses 187 to 190 do not apply to
profit-making bodies, and nor should they. The main aim of requiring
the regulator’s consent to a non-profit body’s change of
constitution is to ensure that it retains its non-profit status and
housing focus and cannot realise and distribute publicly funded social
housing assets. As my right hon. Friend is aware, we are introducing
amendments to strengthen that system, and I suggest that that is
irrelevant to profit-making bodies.
As I have said, I have much
sympathy with amendments Nos. 350 and 351. I would like to carry out a
detailed assessment of the potential impacts and risks, but I am
amenable and willing to consider the matter further. On that basis, I
hope that my right hon. Friend will withdraw the
amendment.
Mr.
Raynsford:
The Minister has given a fair response, and I
accept his undertaking to have a further look at the matter.
I beg to ask leave to withdraw
the
amendment.
Amendment,
by leave,
withdrawn.
Clause
172 ordered to stand part of the
Bill.
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