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The vast majority of the agency’s powers will be inherited from previous legislation governing the Housing Corporation and English Partnerships. For example, Clauses 13 and 14 enable the Secretary of State to give the agency planning powers in certain areas, but they are modelled on existing powers provided by the Leasehold Reform, Housing and Urban Development Act 1993. Those powers may be used in pursuance of the agency’s objectives, set out in Clause 2, whose breadth gives the agency the necessary flexibility to find the right solutions for the right areas. I stress that the Government will look to involve and consult closely local authorities when the use of these clauses is being considered. Indeed, in the one example that we have so far, when English Partnerships used its similar powers in Milton Keynes, the local authority was fully involved in establishing the delivery vehicle.

With such a range of powers, noble Lords will want to be assured that we are not creating a behemoth or a juggernaut that will slow things down, impose top-down demands or frustrate other partners—whether housing associations, regional development agencies or local authorities. I can give those assurances. First, the agency will have offices in each region to help those relationships at the local and regional level to flourish. Secondly, for local authorities in particular this is very good news. The relationship between local authorities and the HCA will be critical. The agency will be no less than local government’s best delivery partner, working with the grain of local ambitions and local needs, while securing the achievement of government targets.

In the other place, the proposals for the new agency received a constructive welcome. There was particular support on all sides, however, for the role of the agency in delivering on the sustainability agenda to be strengthened. The Government were pleased to be able to respond to this and we amended the objects to include contributing to the achievement of sustainable development. Of course, this underlines the fact that good design will be a highly important feature of the agency’s work, and I know that many noble Lords will welcome that. The Bill was also

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amended to provide greater clarity over the agency’s relationship with the GLA. Those changes have made the Bill better and stronger.

The Bill is not just about delivering more and better homes. It will also break new ground in giving social tenants new rights to high standards of housing, access to better services and more say over how their homes are managed. In that sense, therefore, the HCA and the new social regulator that are contained in Part 2 of the Bill, are complementary in terms of ensuring and securing the better supply and condition of housing. Part 2 of the Bill establishes a new regulator for housing association tenants. Its predecessor body, the Housing Corporation, was established in 1964 and the current limited system of social housing regulation was introduced more than 30 years ago. Regulation has, until now, been focused on making sure that RSLs were well run organisations with sound financial management. We must not underestimate the importance of the changes in the scope of regulation and the creation of a regulatory regime that will mediate between some of the most vulnerable people in the community and the RSLs. They are benevolent providers, but nevertheless have a monopoly over the consumer. That means that the regulatory framework in the Bill is, rightly, rather different from other regulatory frameworks.

Noble Lords will also want to know why we have confined this initiative to registered social landlords, given that there have also been calls for the regulator’s remit to extend to local authorities. Let me explain. We agree with the principle that there should be a single cross-domain regulator for social housing. Obviously, tenants should have a right to expect good housing services no matter who their provider is. We have made it clear that it is our intention that the regulator’s remit should be extended to local authority landlords within two years of it being established. We understand why there are calls to move faster on this, but getting this right will take time, particularly as we need to ensure that regulation supports the principles of the new local authority performance framework.

We have to bear in mind, in particular, that the landscape of social housing has changed significantly. The housing association sector, to its huge credit, has risen to the challenge of providing an increasing proportion of the social housing stock since 1988, with both large-scale voluntary transfers and massive investment in building new homes. Throughout the country, many housing associations are key players in their local communities. But tenants’ experiences have changed too, and this Bill will put tenants at the heart of the new system. The fundamental objectives of the regulator, set out in Clause 88, are wide because the regulator can act only in accordance with his objectives. That means that important issues, which are not the direct responsibility of the regulator—like the supply of new social housing—must be reflected here so that the regulator can take them into account in his work, for example, through setting standards.

The new regulator will therefore be tasked with protecting tenants and helping them to have greater choice and influence over matters central to their everyday lives. He will do this primarily through

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setting standards for accommodation, facilities and services in connection with social housing—in Clauses 191 to 196—which will be developed in consultation with landlords, tenants, and a range of other interested bodies, including the Homes and Communities Agency, lenders to the social housing sector, and the Government. Where landlords fail to meet standards, the regulator will have new powers to step in with fines and enforcement measures designed to improve services to tenants.

But we are quite clear that the independence and integrity of landlords is important too, so these powers are balanced against an objective to minimise interference, and behave reasonably, transparently and proportionately—Clause 88(11). The regulator can intervene only when there is a material breach of standards, not a technical breach or an isolated incident. So this is about targeting the regulator’s efforts where they are really needed and can be really effective. Landlords who involve their tenants and deliver good services should in fact see fewer burdens, not more, but poor performers will be subject to a quicker and more targeted regime of sanctions, focused on securing rapid improvements to services.

Enforcement notices will set out to landlords exactly what improvements are expected, and what the consequences will be if improvements are not delivered—Clauses 216 to 224—and the regulator will have power to fine landlords, to award compensation to tenants and, in the worst cases, to require them to employ another organisation to manage their housing.

Let us put ourselves in the shoes of tenants. This means a regulator that sets clear standards on what level of management service tenants can expect from their landlord—for example, the quality of their accommodation and the speed of repairs—publishes clear information on landlord performance against those standards in a form accessible and useful to tenants, listens and responds to tenants’ concerns about systematic breach of standards and uses their evidence to investigate, uses enforcement powers when needed to name, shame and fine landlords, and compensate tenants and gives tenants more opportunity to be involved in management of their own homes—Objective 3.

I met Martin Cave recently and was pleased to hear that he is happy with the way his vision for the future of social housing regulation is being turned into a reality. He wanted to see an independent regulator, with government influence strictly limited, and the Bill delivers this. The regulator will be independent of government, and the changes that were made in the other place make it clear that the Secretary of State may direct it only on certain standards relating to rent, the physical standards of homes, and tenant engagement. Government will have no role, for example, in the exercise of the enforcement powers. That debate also made clear the Government’s commitment to protect tenants and public investment while preserving the independence of providers.

There was significant debate in the other place on how to get right the balance of regulation in the Bill. In response, we made important amendments to ensure that we strike the right balance and to ensure that the

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status of RSLs as private bodies is clear, for example, in relation to the Secretary of State’s powers of direction, as I mentioned earlier, and the enforcement powers. While we are still considering whether a number of additional amendments may be necessary to address technical issues raised by stakeholders, overall I think that we have the balance right.

The final part of the Bill includes a number of small but nevertheless significant provisions which will improve the way in which housing services are delivered and raise environmental standards. Measures to support and extend the mandatory supply of information about the sustainability of new homes are an important part of the package of measures to ensure we deliver our commitment to zero-carbon homes by 2016.

Linked to the regulatory reforms to give tenants more choice and voice, the Bill makes a tenant ballot mandatory before decisions about transfers out of local authority ownership. Significant changes to the housing revenue account subsidy system will give councils more income from any new homes they build. Measures to enable landlords of shared ownership houses to restrict “staircasing” in hard to replace areas respond to concerns that affordable rural housing is being “lost”. Changes to address an anomaly in housing legislation which has existed for far too long ensure that service personnel are put on an equal footing with civilians when applying to a local authority for social housing or for help because they are facing homelessness.

There is provision for family intervention tenancies, which are designed to help to support delivery of family intervention projects, which provide intensive support to a small number of the most challenging families. Amendments made in the other place have helped to ensure that the right safeguards are in place to protect these vulnerable tenants.

In response to a European Court of Human Rights ruling, there are improvements to security of tenure for Gypsies and Travellers living on authorised local authority sites. I know that noble Lords who have highlighted the lack of equity in the current situation will welcome this change.

Provisions introduced in Committee in the other place ensure that tenants retain tenancy status as long as they live in their homes to address the problem of “tolerated trespassers”.

The Bill represents the clearest possible expression of this Government’s commitment to social justice. It will help to address the shortage of affordable housing for first-time buyers and families; it will make new housing greener to tackle climate change; and it will give social housing tenants a better deal. It will build on the outstanding work we have done in regenerating some of the most deprived and marginalised communities in our country. It addresses some of the biggest challenges that we face today. I have set out the broad picture but we will have the opportunity in Committee to discuss how this will be achieved. I look forward to that because I know that your Lordships have a particular interest in how things will be achieved. I also know that all round this House there is a wealth of experience and

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commitment to the values and work of this sector so it will be a pleasure to engage with colleagues as we take this Bill forward. The Bill is fit for purpose and I commend it to your Lordships.

Moved, That the Bill be now read a second time.—(Baroness Andrews.)

5.36 pm

Lord Dixon-Smith: My Lords, I need to clear the air slightly by declaring a number of interests. I am a landowner in Essex and own potential development land. I also let surplus farm cottages, so I am in that business as well. We have sold land for development and, among other things, we have provided a large number of homes for our local authority at no cost under a Section 106 agreement. In those days the biggest problem was ensuring that the local authority was able to hang on to those houses under the right-to-buy legislation and did not have to sell them. That problem is long past but it shows how long ago the planning permission was given.

I am most grateful to the noble Baroness for her exposition of the Bill. It was a tour de force that informed the House what the Bill is all about. Life would be very easy if this was as straightforward as she says. I have one question for her at this stage. I am informed by one of my Welsh friends that there have been no discussions about the Bill with the Welsh Assembly. I do not know whether that is so but I will be very relieved if she can clarify that matter when she winds up. I find it very difficult to believe that that is the case but if a worry is raised it is as well to deal with it.

I apologise to the House if I do not see it through the same rose-tinted spectacles as the noble Baroness. It is the fate of those who sit on these Benches that it does not really matter which side of the House we speak from, we inevitably see the world through slightly differently tinted spectacles. I suppose mine will inevitably be pale blue whereas the noble Baroness is wearing her pink ones.

One can have no quarrel with a Bill the purpose of which is to free up procedures and facilitate an increase in provision and improvement of regulation in the whole housing field and particularly in the social housing sector. The problem I have with the Bill is that, as drafted, it seems to go rather wider than that, as I shall explain in a moment. I have had many representations from many groups about it. They do not all agree that it is fit for purpose. I am most grateful to those who corresponded with me. If I do not mention them it is because it would be impossible to do all the matters justice. Things will come up at later stages of the Bill and I look forward to that very much indeed.

The arrival of the Bill in this House is a fortunate, or perhaps, if you are a pessimist, an unfortunate coincidence as it arrives when the whole construction industry is in crisis, but not one of its own making, which I am very happy to acknowledge. Unfortunately, the hiatus in the banking industry is the problem, and it is not just a problem for home-buyers; it will also be a problem for home-providers, because they will not

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find it so easy to raise finance either. Housing associations may well find that when they go to banks for money, as they do from time to time, they will have some difficulties.

This is a fundamental problem, which I regret to say is giving the doom-mongers a field day. One of the wonderful, terrible and terrifying things about the fourth estate is that it has no responsibility for the consequences of what it publishes. At the moment, it is talking the world down, and the world of housing really does not deserve it. I am bound to say that this is the case.

I have had some discussions with estate agents working in the field. People who have made firm offers for houses are already withdrawing those firm offers, because they want to stay where they are and wait and see what happens. I know of one firm of estate agents that has closed, not because it was not trading profitably, but because it had had 20 good years and those people thought that it would be rather more comfortable if they were not doing it for the next five years. That may seem to be a very short-sighted and pessimistic view, but it is not unrepresentative of some of the things that are happening.

Regrettably, the construction firms are predicting a downturn in house building. As a natural consequence, if the buyers are not there and there is no certainty of funding for purchasers, there is no point in building. That is another unfortunate matter, with which we will have to deal in the short term. That said, I am bound to acknowledge that this is extraordinary. We know that there is a crude housing shortage. We know that employment is at a high level. We know that there is a big demand for houses and that there are many people who would like to get on the housing ladder, even if they are going temporarily to withdraw that demand, because they are worried about where things are going. It will probably be two years down the road before we see what is going to happen. I hope that by then things will have sorted themselves out.

The past decade has not been quite as good in the housing sector as the figures that the noble Baroness gave us might suggest. It is a matter of regrettable fact that there are now 1.67 million households on the social housing waiting list. That is an increase of 64 per cent over the 1997 figure, and it has gone up by 40,000 in the past 12 months. Housing construction has slowed. During the 1980s, it was an average of around 250,000 houses per year. The low point was five years ago, as the noble Baroness said, and it is climbing back towards the 200,000 mark today. The target is 200,000 at the moment and perhaps 300,000 in the long term. While we have that sort of target, we have another reality, which is that the construction of houses by local authorities has completely collapsed. Fewer than 300 such houses were built last year. Of course, registered social landlords nowadays take up most of that burden, and they have done it very well, but the fact remains that there were roughly 26,600 houses completed last year against roughly 28,350 in 1997.

There is a very real cause for concern. The need for houses is growing, and greater life expectancy is keeping us all around rather longer. I can say that as a genuine

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pensioner. We do not have the sort of extended family existence nowadays that used to be the case. Old couples such as me and my wife want to have our own home and the children do not want to have us around. They love to see us—don’t get me wrong—but that is a norm of life. That is increasing housing demand. Perish the thought, but one has to say that immigration is also increasing housing demand, and the number of immigrants coming in every year is way beyond the figure that I am going to mention. The increase in housing demand is somewhere between 20,000 and 30,000 houses per year. In the short term, all of that will be very difficult.

Now I will address my criticisms of the Bill. The creation of the Homes and Communities Agency seems a natural evolution and on first thoughts it certainly is. In principle, I have no difficulty with it. To bring together the powers of new towns, the Housing Corporation and English Partnerships has got to be a sensible rationalisation. But the question, as always, is where you draw the limits of those powers. The Bill seems to me to be very sweeping. Clause 2(1)(a) states the object as,

which is written almost as if no one else does that. Clause 2(1)(b) states the object as,

Again, the same remark applies. Clause 2(1)(c) states the object as,

At this point, all my former colleagues in local government see a major part of their role in life being taken away. I know that the noble Baroness mentioned discussions with the Local Government Association. All I can do is report the feeling that is being reported to me; they are extremely worried. I think that the worry is because of the lack of definition in this part of the Bill, and that is one of the matters to which we must pay particular attention at later stages.

The Bill goes slightly further than that. In Clause 3, we read that the Homes and Communities Agency,

I have a nasty feeling—perhaps I read too many newspapers—that I can think of a number of Governments of whom we would not approve who would love to have words like those written into their legislation. It opens the mind to dreadful possibilities. I know that would not happen here, but we need to define the limits with greater clarity than exists at present. I accept that the Secretary of State has some controls, and I accept that there are financial limitations, but the Bill is too widely drafted as it stands. It is unfortunate that local government, which is perhaps the prime agent of carrying out these functions, because it also has to deal through the planning system with the private sector, feels that it is under attack.

I am fascinated by the continuation of the new towns path. Many years ago, in the early 1970s, I was a member of a very exotic body, which has long since been disposed of—the South East Economic Planning Council. In those days, the south-east region of England

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began in Essex, went round through Buckinghamshire and down to Hampshire. It had one-third of the country’s population and half the country’s GDP. It really was a very interesting and exotic body to serve on, if I may put it that way. The reason for mentioning it is that one of the things we did was to take part in a study of the Docklands. In those days, the London Docklands began just a bit east from the Tower. My abiding memory of that part of London then was of a continuous traffic jam surrounded by a sea of dereliction.

It had one other unique feature. The area was controlled by five separate boroughs. Whether I agreed with them or not politically is neither here nor there. I admired them. They were run by tough gentlemen who were immensely proud of their areas. Unfortunately, that had one consequence—that they would not agree to work together. There was no overcoming that, so in the end SEEPC recommended that the only way to solve the problem was by establishing a new town corporation. That recommendation went to the then Labour Government and it was finally implemented by Margaret Thatcher, now my noble friend Lady Thatcher, who is no longer in her place. The Docklands that we see today, which is bustling, developing and continues to move forward, was the result in part, although it was nothing to do with me, of my noble friend Lady Thatcher’s decision.

However, I wonder whether we need to continue those sorts of powers. Local authorities are far more accustomed to working together and co-operatively. They, perhaps more than we, recognise the need for development and redevelopment. Anyone with brownfield land recognises the need for that. However, the bulk of brownfield land is in the north of the country and the bulk of housing demand is in the south—and that causes problems. We need to think about that issue.

The National Housing Federation has written to me. I shall quote from its letter, because it describes a particular issue more succinctly than I could. It states:

When the National Housing Federation, which represents a very large sector of housing, says that, we need to listen, because it then states:

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