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On the second point, it is difficult to see why secondary legislation would be a better approach than taking measures through a Bill. It is absolutely right that this House and all the stakeholders, of whom there are many—the LGA is not the only one, although it is playing a sterling role—can scrutinise these proposals in detail. We can then propose amendments. Despite what the noble Lord, Lord Dixon-Smith, has said, the process is infinitely more satisfactory, transparent, open and robust. For an issue which is as complex as this with major implications for tenants and local authorities I believe that noble Lords will certainly want to scrutinise these provisions at length on the Floor of the House and bring forward amendments. I do not believe that a debate on regulations would give anything like that opportunity.

4.15 pm

Lord Dixon-Smith: My Lords, there is an instance of this having being done on the emergency powers Bill. Draft regulations can be published, debated in both Houses and amended before they are finalised. Even if that were not the case, the Clerks have informed me—I took the trouble to check this with them—that the law is what Parliament says it is. If we decide that a procedure in the Bill is satisfactory, that will become the law as regards the relevant issue. We need to be clear about that. What the Minister said does not constitute a plausible excuse in my view.

Baroness Andrews: I do not think that the parallel with emergency powers holds good because we are in the middle of a very considered process here which will involve a lot of people having their say, and I should have thought they would want to do that. The noble Lord is right that we can debate regulations but in my experience in this House it is far better and far more in the spirit of the legislation we debate if we do so in the context of a Bill which allows maximum opportunity for such debate. Ian Cole has led this very

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effective process to move the debate forward. As I say, the debate has never been about whether we put this ideal into practice but about how we do it. How do we provide a consistent deal for all tenants while designing a system that fits with the local government performance framework? Given the changes in that framework, that in itself requires scrupulous attention. I am not persuaded by the amendment. I very rarely disagree with the noble Lord, Lord Best, but I do in this instance.

As regards the amendment put forward by the noble Baroness, Lady Hamwee, I appreciate her general argument, which I addressed. It is important to note that there is a world of difference between our removing an explicit bar to the registration of local authorities and providing for a framework to accommodate them. I know that the noble Baroness hoped to have the wider debate and I respect that but the amendment would take us to a confusing place where local authorities, though not prohibited from registering, would be under no obligation to do so. If they chose to do so, the regulator and any authorities that registered would face serious problems struggling with a framework which is obviously not designed with that in mind. It is better that we proceed as we are with the necessary work to ensure we have provisions which provide for the right form of regulation.

However, I take this opportunity to address concerns regarding potential problems which stakeholders fear could arise if there were a delay in achieving cross-domain regulation. We have said from the outset that we want to extend the regulator’s remit within two years of it starting to regulate registered providers. The timetable I have outlined would allow for that. As I have emphasised, an enabling power would not significantly reduce the timetable.

The transition team leading on the work necessary to take us from the Housing Corporation to the new regulator is well aware of the need to plan ahead for cross-domain. In the coming months we will need to ensure that stakeholders are fully involved in developing the detail of legislation and helping to define how regulation will work. I am confident that the LGA and its representatives and the groups that represent tenants’ interests will play a full role in helping to shape that new organisation in anticipation of achieving single-domain regulation.

I believe that absolutely nothing divides us except process. The timing can be reconciled but giving the House an opportunity to have a full debate on what is proposed is the proper way forward. I hope that on that basis the noble Lord will feel able to withdraw his amendment.

Lord Best: I am enormously grateful to colleagues on all sides for their support. The only word of dissent revolves around the use of enabling powers. I am very grateful to the noble Lord, Lord Dixon-Smith, for preceding the meeting by finding out exactly what the processes and procedures may be in that regard. If an enabling power is being used confined to an issue on which there is cross-party support for the outcome and in which the potential protagonists, both landlords and tenants, are in full agreement, one is not extending

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one’s enabling power very far. If there is the chance to debate draft regulations, one really gets the best of all worlds.

The question of culture, which the noble Baroness, Lady Hamwee, raised, seems quite an important one. Even if it is only two years before these council tenants are brought within the fold—this is, after all, the successor of a body that confined itself entirely to the tenants of housing associations—people will not have the time and energy to take account of the slightly different ways of working that would be appropriate if council tenants were within the fold. I feel that that is an important and useful additional point.

As the noble Lord, Lord Dixon-Smith, said, the Minister, however well meaning, is not able to deliver the legislative timetable. One is acting on faith if one walks away from this opportunity now to secure something that can be used when the moment is right. As to the timing, I cannot believe that consultation on the details of this would take very long. Following Professor Martin Cave’s work, Professor Ian Cole’s work has included the people who would be at the core of the consultation. They have worked very hard and very speedily to bring the matter to a point where an agreed report is going to the Minister for Housing this week. We know that the residents within council housing would find this a more than acceptable extension to the protections that they already have and that the landlord bodies already are in agreement. So the consultative process is able to be extremely speedy. We are ready to go. It seems an awful shame to miss this golden opportunity.

The next Bill will, I am sure, be important and useful, but it will not be specifically about regulation of this sector. This Bill is about the Tenant Services Authority and this seems to be the time when we should be making it as good as it can be. With a promise of returning to this matter, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 97PB not moved.]

Clause 62 agreed to.

Clause 63 [Restriction of “registered social landlord” system to Wales]:

Baroness Hamwee moved Amendment No. 97PC:

The noble Baroness said: This amendment is a short and brief probe about eligibility for registration with what, as my noble friend muttered to me, sounds a bit like the caretakers’ organisation—the Tenant Services Authority. However, that is better than Oftenant. Why can it not just be the Tenants Authority? My amendments ask, in the case of a body principally concerned with Welsh housing, what does,

mean? Does that mean a bit more than half of a body’s properties? Are we talking about properties or the number of tenants? I think that it probably refers to the number of properties. What is meant by the phrase,

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It does not refer to activities in Wales but to activities in respect of Wales. What are these “activities”? Does it refer to properties, or the size of its investment, or the number of tenants or staff?

Obviously this is a comparatively small point, though in practice it may not be. I do not know how many bodies potentially would fall within this category. Would the Welsh arrangement continue to apply to properties in England and therefore to tenants in England? This might appear to be a straightforward definition clause but it may raise bigger issues. I hope the Minister, who has had notice of these points, can flesh them out a little. I beg to move.

Baroness Andrews: This amendment, in the context of Welsh housing, probes the extent of the Bill and the separation between the functions of the regulator in England and the Welsh Minister in Wales. It would help if I set out clearly the position on the territorial extent of Part 2 of the Bill.

Part 2 sets out a new system of housing regulation for England only. It replaces Part 1 of the Housing Act 1996 which set out a system of housing regulation for England and Wales. That system is currently operated by the Housing Corporation for England and the Welsh Ministers for Wales, reflecting the devolution settlement. The new system of regulation that we set out in Part 2 is therefore for England only. This means that we need to preserve the existing system, as set out in the Housing Act 1996, for Wales only. Clauses 63 to 65 achieve that.

In particular, Clause 63 distinguishes between “English bodies”, which may register with the regulator, and “Welsh bodies”, which may not because they are more properly dealt with by the Welsh Ministers. English bodies must be established in England and Welsh bodies must be established in Wales. In order to be eligible for registration in Wales, a Welsh body must own housing,

or undertake its activities principally in respect of Wales. The amendment limits that definition so that a Welsh body must own housing “only in Wales”. The effect of that is that a Welsh landlord who owned a single property outside Wales could not register with the Welsh Ministers, and could therefore not receive a social housing grant from the Welsh Ministers under Section 18 of the Housing Act 1996.

We obviously want to ensure that landlords are subject to the right form of regulation and that tenants in England and Wales have the protection I have described. However, it would be impractical to legislate so that new providers of social housing are excluded from registering in Wales if they have any properties at all across the border in England. I know that the noble Baroness has concerns about English tenants of Welsh landlords, who would not be accountable to the regulator even if English homes comprised 49 per cent of the stock. “Stock”, as she has demonstrated, means properties rather than tenants.

In practice, however, this situation is unlikely to materialise. We must bear in mind that the criteria for registration affect only new providers. Existing RSLs

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in England will automatically be registered with the new regulator, whereas existing RSLs in Wales will continue to be registered with the Welsh Ministers. I am not aware of existing RSLs with significant cross-border operations.

4.30 pm

Other parts of the Bill ensure that landlords of new rented social housing funded by the HCA must be registered with the regulator. Here, I am referring to Clause 34, which provides that where the HCA builds or funds housing that is to be low-cost rental accommodation, the HCA must ensure that the landlord of that housing is either a local authority or a registered provider. Being registered with Welsh Ministers would not suffice. I cannot see a situation in which the problem would arise, whereas the amendment would be disabling.

The noble Baroness also asked two questions about the vocabulary that we use. There is no distinction between “mainly” and “principally”. There is no material difference in that context. “Housing activities” means housing activities as defined in the Housing Act 1996. That does not really address her question, so I will write to her about that and about any other aspects of the relationship that she feels I have not explained fully enough.

Baroness Hamwee: I thank the Minister, but I did send a note saying, “This is to probe what is meant by ‘mainly’; is it 51 per cent plus?”. The noble Baroness gave a useful explanation of what underlies all of this. It is difficult to probe without being accused of trying to dismantle the Bill. This sort of thing is a genuine attempt to understand what words mean, because someone is going to have to interpret them at some point, and I would like to know the criteria that will be used for the interpretation. If we do not ask, who will? That is our function. After that little outburst, I would be grateful if she would answer that question in a letter. We should pursue it.

Baroness Andrews: I am extremely sorry. I did not mean to imply that in the tone or content of what I said. We understand that “mainly” means 51 per cent— over 50 per cent. I should pick that up.

Baroness Hamwee: That answers the short point. I am sorry that this has taken eight minutes; I had hoped that it could take about three. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 97PD not moved.]

Clause 63 agreed to.

Clauses 64 to 68 agreed to.

Baroness Andrews moved Amendment No. 97PE:

(a) the regulator,

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(b) the HCA, or(c) the regulator and the HCA jointly or concurrently.(a) which is registered as a social landlord under Part 1 of the Housing Act 1996, and(b) which does not fall within paragraph (a) to (c) of section 56(2) of that Act (Welsh bodies).

The noble Baroness said: This is a technical but important provision which will help to ensure a smooth transition from the Housing Corporation to its successors in the regulator and the Homes and Communities Agency. The Bill already includes provision for the transfer of assets from the Housing Corporation to the new bodies, and for co-operation in an interim period, including the lending of staff and buildings. While those provisions address assets and staff, the new clause addresses functions.

The establishment of the regulator in particular will involve detailed work on new systems that will require extensive consultation with stakeholders, for example, on the regulator’s standards or on eligibility criteria for registering with the regulator. It is therefore likely that, when initially established, the regulator’s powers to set and consult on standards, registration criteria and so on, will need to be commenced first, so that when the new register becomes live, all the necessary parts of the regime are in place.

Therefore, to ensure an early transition, and to ensure that there is no regulatory vacuum, we will need to transfer the existing regulatory powers of the Housing Corporation to the regulator for a transitional period. That will enable the regulator to take over operational responsibility for regulation as soon as possible. The new clause simply enables those arrangements to be put in place. It is necessary. It is modest, but it is important, and I hope that the Committee will accept it. I beg to move.

Baroness Hamwee: The noble Baroness talked about powers, which I understand, but the clause is actually about transferring functions. Would these powers be better technically described as functions? I had put an exclamation mark against this point and was intending to ask whether any functions not specified in the Bill were to be transferred. The noble Baroness’s explanation of powers is helpful, because I can see how those might be needed. Perhaps the issue would be better dealt with later.

Baroness Andrews: “Functions” includes “powers”; I was using the words interchangeably as I spoke. I may well be able to offer the noble Baroness a written list of powers/functions that will fall into this category. I am very happy to do that.

Viscount Eccles: The letter proposing the amendment to the Delegated Powers and Regulatory Reform Committee, of which I am a member, arrived this

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morning; by chance we were having a meeting, as we frequently do on Wednesdays. The letter arrived just in time—I think that that would be the friendly way to describe it. Justifying the clause, it says:

I think that the Committee will completely understand that this is a practical problem, the sort of problem which arises out of the merging of bodies, with the removal of some functions from one of the bodies and their transferral to yet a third body. What does the Minister believe the phrase “a considerable period of time” might mean?

Baroness Andrews: I do not have a precise timetable for this process, so I will have to write to the noble Viscount. We will have to take advice from the transition team on this point. I will include that in the same letter as I write to the noble Baroness. I stand corrected; we have given it a timetable. My cavalry has done its job here. We have given up to 18 months for the transition period.

On Question, amendment agreed to.

Clause 69 agreed to.

Clause 70 [Low cost rental]:

Lord Greaves moved Amendment No. 97Q:

The noble Lord said: Amendments Nos. 97R to 97T, all of which are in my name, are grouped with this amendment. These are fairly modest amendments probing some aspects of the part of the Bill to which we are now moving and which is headed “Social housing”. I have exercised some self-restraint as I had thought of tabling quite a few more amendments to this part of the Bill about social housing, because there are some very important issues here that would bear discussion. The main reason I did not do so is that I was not sure that I would be able to be here this week. One of the reasons I have exercised self-restraint for the coming part of the Bill is that I shall not be here on Monday, for which I apologise. I imagine that apology will be accepted with alacrity by people wanting to get on.

The purpose of these amendments is to test two things. The first, which we discussed briefly yesterday, is the meaning of “low cost” and “affordability”. As part of a different discussion yesterday I made the point that in some places there is a requirement for social housing that may be let at a price that is not significantly lower than the market price for rented accommodation in that area because of conditions. Amendments Nos. 97Q and 97R are the other side of the same coin. They test how far below market rents affordable housing or low-cost rental accommodation has to be in areas where market rents are high. The amendment inserts the words,

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In other words, providing accommodation at a rent lower than the prevailing rent does not mean that it is low cost or affordable if the prevailing rents are high; it has to be sufficiently below the prevailing rent levels for people to be able to afford it. Circumstances are different in different parts of the country and in different areas. It would be unfortunate to have definitions that do not take account of that. When people look at needs in different areas, they would probably agree that that is the need. The wording of legislation should reflect that even though the need is different in different areas.

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