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Grand Committee

Wednesday, 11 June 2008.

The Committee met at quarter to four.

[The Deputy Chairman of Committees (Lord Haskel) in the Chair.]

Housing and Regeneration Bill

(Sixth Day)

The Deputy Chairman of Committees (Lord Haskel): If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Lord Best moved Amendment No. 97PA:

(a) a local housing authority within the meaning of section 1 of the Housing Act 1985 (c. 68) (local housing authorities), and(b) a person controlled by a local housing authority.(a) a local housing authority within the meaning of section 1 of the Housing Act 1985, and(b) a person controlled by a local housing authority.

The noble Lord said: The two amendments tabled in my name, Amendments Nos. 97PA and 97PB, would give the Secretary of State the power at some later stage to extend the scope of the new regulator for social housing tenants to other bodies as well. At Second Reading, I made the point that the part of the rented sector most in need of regulation is the private rented sector. Tenants of private landlords, as we all know, can find themselves exposed to appalling practices with no protection from any regulator, in contrast to the position relating to the services they receive in their apartment, whether that is gas, electricity, water

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or whatever, and not even with the protection of a redress and ombudsman scheme. However, the Minister will be delighted to hear that I am not proposing to pursue this campaign any further within the context of this Bill since I understand that its scope is more limited than for the private rented sector and that battle must wait for another day.

However, I think it extremely important that the role of the regulator is extended in relation to those other tenants within what is known as the social housing sector; that is, principally the tenants of local authorities, whether those tenants are in homes that the council continues to manage itself or in homes that are now run by ALMOs—the arm’s-length management organisations.

Fortunately there is, I think, no disagreement on any side that the scope of the regulator should be extended to cover all tenants within the social housing sector. I am grateful to the Local Government Association and indeed to the Chartered Institute of Housing, the National Housing Federation, the National Federation of ALMOs and the Tenant Participation Advisory Service for their input to these amendments. There is unanimity among them that the regulator should cover all tenants in social housing, including those who are tenants of local authorities, for reasons of equity and to overcome the anomalies that would be perpetuated if tenants within the council sector remain outside the scope of the regulator and the tenants of housing associations are within in it.

Perhaps I may illustrate how those anomalies work through. It is quite likely that someone will be almost randomly nominated by a local authority to a housing association or to the council’s own stock depending on where vacancies arise or the number of children the person has at that time. It is not necessarily the person’s choice: they will accept the social housing to which they are nominated. In other cases, people transfer. They move home. There will sometimes be a mutual exchange between tenants of housing associations and local authorities. People move between these sectors quite freely. The entire stock of some councils has transferred through large-scale voluntary transfers into the housing association sector. Many tenants of ALMOs may believe that they have moved outside the council sector but in fact they are still council tenants and within it.

So anomalies abound. Indeed, it is possible that the existing tenants of ALMOs and joint venture local housing companies in future will not be covered by the new regulator, but that the tenants who move in, whose homes will have been provided with help from grant, will be brought within the regulator. So, even the same landlord or owner of the property may find that tenants are in different categories after this legislation is passed unless we can create what is known as a domain-wide regulator that covers comprehensively all those tenants in social housing.

There is unanimity of view that this measure is needed. The question is when should we extend the role of the regulator. I think that the service is now to be called the Tenant Services Authority rather than Oftenant. That sounds like an improvement to me, though possibly the name will change before the end

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of the afternoon. At the moment, though, we are going for the Tenant Services Authority. But my fundamental question is: why should we delay in having at least an opportunity for the Secretary of State to bring forward at a later date measures to extend the scope of the regulator to cover all the tenants of social housing, including council tenants?

I will not spend much of the Committee’s time arguing the case for the democratic process in itself being a sufficient protection for tenants to make it unnecessary at least to move speedily with this change, since very few people believe—and indeed the local authorities themselves, through the LGA, are not arguing—that council tenants should be put in a separate or different category because they have elected masters somewhere at the end of the line of accountability. Let me dismiss that potential argument and look at two other reasons that have been advanced for the delay in including something in this Bill to cover the extension of the role of the regulator.

The first is that this measure is better dealt with in the legislation which will possibly be called the empowerment, economic regeneration and community Bill—I may have missed a word or two in that one. The Government have properly announced that they intend to introduce that legislation after discussion on a White Paper in the autumn. It would fulfil their original intention that, within two years, the role of the regulator will be extended to cover council tenants. One ground for holding back is that other legislation is in the pipeline and it should make its way through the process in a couple of years and bring those tenants within the same regulatory system.

Professor Ian Cole—who with a number of colleagues has done much important work for the Joseph Rowntree Foundation which I greatly appreciate—has been looking at the practicalities of the extension of the role of the regulator. The group had its last meeting on Thursday of last week and its report, agreed across the piece, is winging its way to the housing Minister, Caroline Flint. It is likely that that report will say that the members of Ian Cole’s group are all agreed on the principle that one should press forward for domain-wide regulation, even if there are still one or two parts of the small print on which the arrangements that relate to council tenants would need to be different and refined in a couple of ways before the process is concluded. The group has been robust in working together to say that the time is right for this extension to happen as soon as practicable. I cannot see that the receipt of that report would lead anyone to form the view that the time is not right to include amendments to that end in this part of the Bill.

The next reason why it might be said to be a bad idea to include clauses in the Bill to extend the regulator’s powers is that these are enabling powers for the Secretary of State. They are Henry VIII clauses and there is an aversion in your Lordships' House to enabling powers. To counter that charge, those of us who have brought together these two amendments have sought to hedge, surround and box in the provisions that would give the Secretary of State additional powers, for example making it very difficult for my hopes of the private rented sector being incorporated ever to be fulfilled

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through these clauses. If the Minister and her colleagues believe that different wording would do the job better, or if there is anxiety that this extends the powers of the Secretary of State too liberally, I am sure that the wording can be tightened. The hope is that the clauses are sufficiently restrictive to ensure that this is not simply giving the Secretary of State more powers than Members of the Committee would wish.

The proposal is to do something that the Government already believe is good—extending the power of the regulator to cover all social housing tenants. It does so in a way that means we get a bird in the hand instead of one in the bush; we are not going to have to wait for two years for something that may or may not happen. It places in the Bill the chance for this to be triggered as soon as the negotiations—which I do not think are too far away—can be concluded between the different parties on exactly how the practicalities of this can be operated. It means that events will not intervene between now and the legislation that may or may not happen in a couple of years’ time. I think that it would make everybody happy. I hope very much that the Committee will agree. I have pleasure in begging to move.

Baroness Hamwee: I have two amendments in this group at the more extreme end of the matter. They delete the ineligibility of local authorities and ALMOs from registration. Regulations are second best. Sometimes it is better to have a regulation-making power than no power at all, and this may be such an occasion. However, we are all familiar with the procedures’ shortcomings, particularly in that no amendment can be made to an order.

Another reason for wanting to see local authorities included from the start is that the new agency—the Tenant Services Authority, did the noble Lord say?—should start by involving local authorities and local authority tenants, who should be involved in its development right from its inception and not as an add-on. Culturally it is important to include all those with an interest right from the start; it is quite hard to change an approach after two or three years. Having said that—and having referred to the regulation-making provisions, perhaps more scathingly than I intended, as second best—I would certainly be happier if the Government could be persuaded to go down that route than I would be with no reference at all to local authorities, or rather with the only reference to them being to exclude them.

4 pm

Lord Filkin: I support what the noble Lord, Lord Best, said and the thrust of what the noble Baroness, Lady Hamwee, said. I shall not speak at length. It is an unusual and impressive situation that we have support from bodies like the Local Government Association and the National Federation of ALMOs, which would be captured by this self-volunteering, all-encompassing regulatory proposal, but also the Chartered Institute of Housing and TPAS. I pay tribute to the way in which they have worked together and put forward a progressive and mature case for change. I will not repeat the arguments on why domain-wide regulation

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is in the interest of tenants. The Committee knows that, not least the requirement to have a set of performance data.

I still struggle to understand why we are making such heavy weather of this. My good and noble friend Lady Andrews has tried to cheer me up in her kind way by saying that she has a little Bill coming along soon which will put it all right. I hear that. But the Government have known what CABE was going to recommend before it was published. They have known for well over a year that CABE was going to recommend this. Therefore, officials have had plenty of time to do the necessary policy work. I recognise that part of the anxiety was at a time when the Government rightly were seeking to deregulate local government through one door and that they did not want to re-regulate it through another. No doubt there were some good battles between officials within the department. But the LGA has cracked that problem for the department. Therefore, that is no reason for not moving forward with this.

I agree with the noble Lord, Lord Best, that in a situation where the House itself may be suggesting—or even going bolder and promoting—a powerful set of powers, the Minister need have no fear that the scrutiny process of this place will fall foul of that. I cannot speak for the whole House, but I would nevertheless want to see a different set of situations addressed in amendments. We have waited 30 years for an improved regulatory system for social housing. It is common sense to all of us that it should be domain-wide. It is not sensible to start a bus with one of its wheels missing. I urge the Government, even at this late date, to encourage their officials to get this together so that by Third Reading we can have the Bill which all of us believe is right and necessary.

I do not wish to be rude and make comments about future promissory notes from the Government, whom I support and love. But Members of the Committee know what I mean: no Government or Minister can at this stage guarantee that a Bill will come forward. What goes into the last Queen’s Speech of a Parliament is very different from what went into the first one. The Minister is not able to deliver on her promise that this will happen within two years. We should therefore put it into the Bill now.

Lord Dixon-Smith: The noble Lord, Lord Best, has introduced what I would call the uninvited guest to the feast. Whether it is an unwanted guest is another matter. It is quite clear that there is a great deal of support for this proposal. I add my voice to those of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Filkin, to say that we really ought to do this now. The noble Lord, Lord Filkin, made the political point—which I might have done but now have no need to do—that certainty about a future legislative programme is something that is not in our control. Even if we had been three years earlier in this cycle it still would not have been certain, but now there is particular uncertainty.

Everyone—the sector, the housing authorities and the LGA—agrees that we have the opportunity here. Like the noble Baroness, Lady Hamwee, I accept that

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the regulatory processes are not what we would desire. But I have to tell her that it might have come up later in the Bill, because elsewhere in the Bill we have mention of regulations that have had a special procedure. The regulatory procedure is what we define it as. If we amend this Bill, we can draft the regulatory procedure to permit draft regulations to be seen and amended before we have to deal with the regulations. That is technically possible to do. I think that difficulty can be overcome, and it is important to make that point.

The noble Lord, Lord Best, made the case that a large part of the process of producing a unified domain for the social housing sector is possible if we do this. If we do not do it, frankly, it is uncertain. I am a great believer in availing oneself of an opportunity if it does arise, so I support the amendment. If the wording is not perfect, I am sure that it can be adjusted between now and Report, when we might in any event want to consider it further. I hope that this will be taken further.

Baroness Whitaker: I am sorry to be a bit cold waterish about the amendment, particularly as I strongly support the principles behind it. Noble Lords might think that as a former employee of a regulator I would welcome this very handy tool, but I think that so-called Henry VIII provisions are to be resisted if at all possible. This one is not just enabling; it is enabling primary legislation to be amended by subordinate legislation. On the whole, that is not a democratic procedure. In any case, as far as I can see, the process is not likely to go faster than the primary legislation which, I understand, my noble friend intends to bring forward. I feel uneasy about the Henry VIII aspect.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): I start by welcoming Members of the Committee to Part 2 of the Bill. We have looked forward to this day for some time, and so far it has lived up to expectations. I am glad that we started with an amendment that raises some important issues that cross the whole platform of what we are discussing in this part of the Bill. I was relieved when the noble Lord said that he was not going to pursue the private rented sector, because it creates even more complexities than the local authority sector. The noble Lord knows that it is Julie Rugg’s task to come to the department to tell us about some of the options that we might have, after she completes her review of the private rented sector.

The noble Lord also told the Committee, rightly, that we have decided that Oftenant was not the best possible choice of title; when we think about it, it may have been the worst choice. The Tenant Services Authority is what it will be called, which is much better because it represents what it is going to do. The amendment proposes to introduce an enabling power to provide a framework under which the future regulation of local authority housing would operate. It has been obvious from the way in which the noble Lord presented the case—he is the best possible advocate—the support around the Committee and the evidence that he drew on, that there is considerable sympathy with the process

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that he has proposed. I am grateful to my noble friend Lady Whitaker for raising one of the problems that we have with it, which I will come on to.

I want to be sure that Members of the Committee understand that we have never, ever thought that cross-domain regulation was anything other than a good thing. We have always been committed to it, so it has not been an uninvited guest. It has been a guest that has been under inspection, in a way that is perfectly proper and necessary. Martin Cave was clear in his report, and he was clear when we met him, that cross-domain regulation is designed to improve standards for every tenant, and that is right. The examples of the flows of tenants back and forward between the sectors, which the noble Lord, Lord Best, pointed out, are accurate. It illustrates the complexity. The only thing between us is how we move forward. This will involve taking enabling powers. We have had to consider a Henry VIII power many times in this House. It enables primary legislation to be amended or repealed by subordinate legislation. Our problem with an enabling power in this case—we do not have a natural aversion to it—is with the process to which it gives rise. I will come to that.

In a way, I was hoping that noble Lords would think that the amendment had been overtaken by events, given our commitment, which we announced in the draft legislative programme, to legislate for cross-domain regulation through the Community Empowerment, Housing and Economic Regeneration Bill. The noble Lord is quite right, but he had the words in the wrong order. It will not be a slight Bill; it will be substantial, and this will be an important part of it. I do not share the gloomy prognostications of noble Lords. I do not believe that there will be any issue. We will introduce the Bill in the autumn following a White Paper this summer, and we will be secure in our expectations that this will be an element of that. There is no question of our passing up a golden opportunity.

Our intention is to proceed, and our timetable is very clear. In that case, we really must subject the notion of an enabling power to proper scrutiny, because it offers no advantages with regard to timing. The noble Lord, Lord Best, was very firm on this point. He said that it was about timing; he did not want to contemplate delay. I understand the sense of urgency, but we can hope to achieve cross-domain regulation only by April 2010 at the earliest through either route. I shall explain why.

The amendment is hardly light on process. The enabling power proposed in complementary Amendment No. 97PB would place requirements on us to consult and to publish a draft order and a statement of representations. The order would have to be debated and agreed by both Houses. That process is quite lengthy. It could certainly not be concluded in time to deliver cross-domain regulation from April 2009. It would have to have proper scrutiny. We would have to protect against unintended consequences. Nothing would be more disastrous if we brought forward something with aspects which we simply did not predict. There is

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no advantage at all for timing, given the choice between enabling legislation and the Bill that we will bring forward.

The remaining case for an enabling power seems to rest on two points: the desirability of providing a safeguard, should we not be successful in including measures in the future Bill—I hope that I have dealt with that; and the idea that regulations are somehow a more appropriate way to proceed than primary legislation. I take issue with what my noble friend Lord Filkin said about the timing. The co-advisory panel has been of enormous benefit to us. It is working extremely hard. Its task is to work with the stakeholders who will be responsible for implementing this, as well as with those who tell us how to address the wide range of implications involved. These are very complex matters. It is not a question of officials in the DCLG working with the regulator; it is a question of everyone who is involved in this process knowing exactly what the implications are and how this will be achieved. The co-advisory panel is now nearing the final stage of its work. It has made welcome progress in working through many of the complexities, but there is still a little way to go.

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