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In summary, I hope that in that context, and for all the reasons that I have mentioned, the noble Earl will have the confidence not to press his amendment, now that the question has been addressed before a larger audience.

The Earl of Onslow: Before the noble Baroness, Lady Hamwee, withdraws her amendment, I thank the noble Baroness, Lady Andrews. I admit that I am

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fairly convinced by what she said; there is a lot of strength in it. The only bit that I do not take on board at all is the bit about the borrowing. She seemed to have a certain desperation when she said, “I admit that it is a remote risk, but it is always possible”. The other arguments are very strong. I am sure that the committee on which I have the honour to serve will read and take strong notice.

I hope that the commitment to look at this issue is not being heavily fertilised with overpriced fertiliser to make sure that the long grass is fast growing to camouflage proportions. I hope that it is a real, genuine and proper commitment. I will now let the noble Baroness, Lady Hamwee, withdraw her amendment if she wishes to do so.

Baroness Hamwee: In Grand Committee, I have no alternative but to withdraw my amendment, but I want to make a couple of points. The distinction between public and private provision is interesting. However, there may perhaps be a particular issue regarding allocations where a local authority is dependent on nominations to a housing association or uses its nominations, but the housing association has different allocation policies from the local authority. More particularly, what is the position where there has been a transfer of stock from a local authority? What is the position with an ALMO? That was clearly public provision which has become private without the tenants being involved in the process. That is a technical point, but the answer may be winging its way to the Minister. It had not occurred to me to ask that before.

Baroness Andrews: As the noble Baroness knows, a large number of local authority homes have been transferred to housing associations following a vote, but that function was not delegated or contracted out by the local authority where homes were sold. I do not think that we can assume that the tenants lost rights. As I have said before, tenants have a wide range of rights, almost all of which are retained on transfer. Tenants are protected by regulation. Under this Bill, they will get all the protections that we can make possible. There are minor changes. The noble Baroness will know that tenants on transfer do not have a right to manage. Although that is a slightly difficult issue, in our view it is not subject to the HRA. We would be hard put to say that the tenants have suffered by the decision to transfer.

Baroness Hamwee: That is a slightly different point. Where does the remedy lie? I do not seek to argue—at least, not here—against the concept of stock transfer, but it is a slightly different point. Remedies available through the courts in support of human rights which go underneath the way in which the provision is expressed are different. I do not feel qualified to take this argument further. I am grateful for the care with which the Minister gave her answer, which I shall read. I am intrigued by the suggestion made by the noble Baroness, Lady Whitaker, although non-compliance which would bring the regulators’ powers into play is not quite the same. There are not quite the same remedies. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 81 agreed to.

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[Amendment No. 100 not moved.]

Clause 82 agreed to.

Clause 83 [Membership]:

Viscount Eccles moved Amendment No. 101:

The noble Viscount said: I feel a bit as though I am coming down to Earth, so I shall start with a short anecdote about public appointments. I was deputy chairman of the Monopolies and Mergers Commission. It was January, and I was chairing five inquiries under the Fair Trading Act. My appointment was coming up for review at the end of the month, and it was clear that there was no way in which the five inquiries could be completed in time. I went to see the chairman, who said, “I wouldn’t worry, as long as your salary comes in”. It is therefore appropriate at this stage to look at the drafting.

There is no great difference between me and the noble Baroness, Lady Hamwee, on the numbers on the board. We have come up with different answers, and I am sure that the final answer does not need to follow my prescription precisely, but three members of a board are, and always would be, too few. You only have to have someone with a bad cough and you are down to two. As to the maximum, I have not sought to change the figure of 10, but I suppose that if I were in a position to choose I would argue for 12. In addition, renewable five-year terms are not as good as renewable three-year terms. I accept that that could be debated and that there would be genuine disagreement, but if you have three-year terms, the best expectation is that a member of the board who is diligent will always get one reappointment, which will mean six years, or two, which will mean nine. In exceptional circumstances, members could serve for 12 years.

There is always a problem at the beginning of a new organisation because how do you ensure that, when people retire after three years, the whole board does not have to go because all the members were appointed on the same day? There needs to be some provision, which I have not put into my amendment, to deal with that issue so that you get on to the “one-third, one-third, one-third” system without the whole board having to go at once. In this case, however, despite one of the amendments which the noble Baroness, Lady Hamwee, will talk to, I imagine that some people will continue. Indeed, I very much hope that some board members from the organisations that are being merged will continue because in such a merger there is a need to have people who know what has happened and can give the right advice to the new chairman, whose tenure we are all looking forward to.

In conclusion, Amendments Nos. 101 and 102 seek a rather more standard approach to board appointments that is consistent with Nolan. In this case, I see no reason not to read across from Nolan, who had views on the private sector as well as the public sector. I also seek to introduce consistency and certainty into how boards are appointed and their length of tenure because, as has been said many times in this Committee, the more consistency and certainty that we can provide to all the people who are interested in such an important organisation as the regulator, the better. I beg to move.

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6.30 pm

Baroness Hamwee: I have seven amendments in the group. I shall start by sharing a message that I have just received on the pager. There have been a number of occasions over the years where the results or the progress of sporting fixtures have been shared publicly. In this case, the message says that there has been all-party agreement that the vote on the amendment in the Chamber will take place at about 7.30 pm. I do not know whether I am correct in likening it to a sporting fixture.

I have a bit of a ragbag of amendments. The first is Amendment No. 101A, in which, like the noble Viscount, I am probing the reason for the size of the board of the new regulator. I had suggested a minimum of five and a maximum of 15, as distinct from the three and 10. Like the noble Viscount, I am particularly concerned about the minimum size, and for all sorts of reasons it is appropriate to have more than a tiny handful.

The second amendment is a probing amendment. Clause 83(4) says that former membership of the Housing Corporation is not a bar to appointment. I declare an interest because I was one of the referees for the person who has been appointed as chair, so I am certainly not trying to undermine his appointment. It seems a curious thing to say. There are a number of things here that indicate to me that there is a different hand in its drafting from the drafting of Part 1. I do not know why one should say that. The fourth amendment is Amendment No. 102ZA, which takes us to Clause 84, where Clause 84(2) says that a period of appointment may not exceed five years but that there can be a reappointment. I do not think that appointees should be able to go on and on, so I am saying that there should be only one reappointment, so that there would be a maximum period of 10 years in office.

Amendment No 102ZB and Amendment No. 102ZC, which is consequential, take out the reference to “misbehaviour”. I am intrigued about what might be meant by that in this context. Surely, the point is covered by the rest of the paragraph on dismissal of a member who is unable, or has become unsuitable or unwilling, to perform the functions. Misbehaviour is different from all that; it could be anything. I ask rather frivolously whether that means throwing bread rolls at dinner—that is misbehaviour.

Amendments Nos. 104AB and 104AC are to Clauses 90 and 91. On the issue of conflict of interest, which we dealt with in respect of the HCA, Clause 90(2)(b) provides that someone who has an interest must withdraw,

I thought that was curious. I could see an argument for the regulator permitting that member to continue, but for the regulator to be saying, “Thou shall stay in the room; thou shall take part in this decision”, is an odd way of going about it.

The last of the amendments—Amendment No. 104AC to Clause 91—refers essentially to co-optees. It states:

I want to understand what the Government have in mind, although that may be in development. I appreciate that it could be convenient to bring in non-Members,

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but I am concerned, as I was with the HCA, that committees or sub-committees may have a majority of non-members, which would be wrong. Members of the main body should be in the majority.

I do not know whether there was a technological problem, but somewhere between the amendment that I was asked to table by the National Consumer Council being typed in our Whips’ Office and it arriving in the Public Bill Office, it went astray. I realised it only this afternoon, so clearly I cannot expect an answer. I will make the point that the council made to me that to have a committee that is in effect an advisory panel whose members are, or have recently, been occupiers of social housing would be a very good thing—a sort of lay panel. I am not arguing against the point that I have just made about non-members, but about keeping feet on the ground and having a critical friend with both personal experience and that gained through talking to neighbours.

We talked briefly about the culture of the regulator, and having such a group involved in the very early stages to see how the board goes about its planning, makes its choice of thematic reviews, prioritises for activities and develops its methodologies would be a very good thing. I am sorry that the amendment did not reach the published list.

Earl Cathcart: I support my noble friend Lord Eccles and the noble Baroness, Lady Hamwee. The chairman plus three does not seem to be the right answer at all. It is far too few. Whether it is chairman plus five or six is a matter for further debate. I would have thought that a top number between 12 and 15 could be discussed as well. If members are allowed to be re-elected, I would have thought that three years would be ample, which would give them six years doing the job. I would have thought that that was enough for anybody, but otherwise we support the amendments.

Baroness Dean of Thornton-le-Fylde: It has been quite complicated following the amendments through this group. The noble Baroness, Lady Hamwee, referred to membership of the Housing Corporation not being a bar to appointment. I support that because it is a fair, clear statement. The amendment wants that to come out, but I believe that it should stay in. Much of the experience on the regulatory side will need to come from people who may well have worked as members of the Housing Corporation—maybe some time ago—but this would debar them entirely.

Baroness Hamwee: It is very difficult to probe the reasons for something. The words, “membership of the Housing Corporation shall qualify an individual for membership”, would have seemed odd. As I have said, I do not oppose this proposal, but I do not understand why it needs to be said. That is the reason for my amendment. I should have thought that it would apply. I do not know whether we should understand from this that membership of the Housing Corporation is a bar to appointment to the HCA, because that is not said there.

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Baroness Dean of Thornton-le-Fylde: I thank the noble Baroness. I am not suggesting that it should be a bar. It may look odd, but it gives clarity. With the appointments that we are going to have, that is important. On the amendment, in regard to the provision that the term not exceed five years, I should like the Minister to explain why. In most public bodies, the term is now three years. But, on looking at the Bill, the term could end up as 10 years. That is how it is packaged. If the term is to be only three years, one would not want the new body all to be appointed at the same time and, thus, finish at the same time. You will want them to finish in numbers and the five years may give that opportunity. It would be helpful for me to understand why the term is five years. It is the first time I have come up against that for some time.

As regards the amendment to Clause 91(2), I understand the points made by the noble Baroness, Lady Hamwee. But, with all due respect, when working in this kind of complicated area, sometimes committees need to be set up that are made up of people who are not members of the body, but which are chaired by a member of the body. Two such examples came to my mind as the noble Baroness was talking; for example, how the Housing Corporation developed its policy on rural housing. I chaired that group, and there was no other member of the Housing Corporation board on it. The recommendations from that group fed into the main board, just as did those from other committees of the group.

My second, and perhaps lasting, example concerned tenants. There was no provision at that time for tenant involvement directly in the policy development of the Housing Corporation. We set up a body, which, again, I chaired. Those were two areas that I was particularly keen that we should do something about. Not one member of the board was on that body either. We felt that if we were going to consult with tenants, we wanted to listen to them, not to members of our board. We knew what they thought. We wanted to get the tenants in and to ask what they thought. Similarly, we did that on the rural areas policy.

I hope that this provision stays. It will be very helpful, particularly if you have a small board. I cringed when I heard the figure of 15 members mentioned. That is a large number of members for any chairman to manage. I suggest that the most effective boards do not have that number of members. Whereas three members, with a maximum of the lower number of six, may not be quite right, I think that the higher number of 15 is probably too high. It would be very interesting to hear the Minister’s thinking and rationale for these points.

Lord Bassam of Brighton: I am grateful to Members of the Committee who have spoken in this debate, and I have drawn on their rich experience. It has been very helpful. I shall go through each amendment carefully and explain some of our thinking on it. I observe at the outset, although I have not sat on the Monopolies Commission or the Housing Corporation, I had a fairly large responsibility in running a local authority. I know that we had annual terms, which was very useful if you were the leader of the council, for fairly obvious reasons.

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Committee size was an issue, which cuts to the point raised by my noble friend Lady Dean. Some of the sizes of the committees were absurdly large. The notion that the quality of debate improved the more people you had was fatuous. Over the years, I brought the numbers down to a manageable size that provided for breadth of debate. That is where I am coming from on this.

6.45 pm

Amendment No. 101 was moved by the noble Viscount, Lord Eccles. We do not think it is necessary, and we think that it would run against the spirit of the Cave review. Cave recommended that the regulator’s board should consist,

We have begun the process of recruiting a board for the regulator and the HCA. I was flicking through the Sunday Times last week, and there were the big adverts. I understand that adverts were placed in other national newspapers. Do not press me, but I think the Sunday Mirror might have been one of them, but I am not a Sunday Mirror reader. The exact composition of the board will be for the new chairs, in conjunction with Ministers, to decide. However, we currently envisage that the board will comprise the chair, the chief executive and seven members. Among the seven members, we would like to see at least two with direct experience of being a tenant—I would have thought there is a powerful argument for that. However, the most important thing is that the board is comprised in a way that enables the regulator to meet its 10 objectives.

However, the stipulation that the board should have three to 10 members provides flexibility for the chair, while being faithful to the Cave aim of a having a small and focused board. Let me be clear that three members is an absolute minimum—the noble Viscount got it right when he said that if one of them caught a cold there would be a bit of a problem, and I entirely understand what he was saying. We discussed this with the Homes and Communities Agency, and three is just the bottom of the possible range. We would certainly expect the membership to be nearer to the maximum of 10 in order to allow the necessary range of skills and expertise to be reflected at member level.

Noble Lords will have noted the difference in the size of membership between the regulator and the new agency and, indeed, the current Housing Corporation board. These minimum and maximum numbers are smaller than the current arrangements and the future HCA arrangements. That is deliberately so in order to reflect the narrower and more focused functions of the regulator compared with the scope of the new agency or the Housing Corporation’s current role which, as noble Lords will appreciate, includes investment at present.

Amendment No. 101A, was tabled by the noble Baroness, Lady Hamwee, who unfairly described her amendments as a ragbag. I think that they were an interesting collection, and they have helped us to focus some of our thinking on these issues. This amendment amends Clause 83(1)(b), which enlarges the membership of the regulator—its board, if you like. The Bill currently

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permits the membership to consist of a chair, a chief executive and between three and 10 other members. All are appointed by the Secretary of State, though the Secretary of State must consult the chair on all appointments, except that of the chair. The effect of this amendment would be to raise the membership to between five and 15. The noble Baroness, Lady Dean, was right in her argument.

I am unsure of the noble Baroness’s reason for tabling this amendment. I suspect it was that, like the noble Viscount, Lord Eccles, the noble Baroness was concerned that there would not be sufficient breadth or that the board would be unrepresentative. In his recommendations, Professor Cave argued that the regulator should consist of,

Our view is that the regulator will be a relatively small body, funded by providers’ fees. That, in essence, is part of the thinking behind having a difference in the sizes of the memberships of the regulatory board and the new agency. I do not think that there is a case for having a board as large as that of the Housing Corporation, which also covers investment and regulatory functions. It has 11 members, not including the chair and chief executive. We have to have a rather more focused view on the size of that board. The important thing is that the board is comprised to enable the regulator to meet its objectives and perform its functions. That means getting the right mix of skills to do the job properly, so that we can get it up and running in good time. Three to 10 members, plus chair and chief executive, is sufficient.

Amendment No. 101B, tabled by the noble Baroness, Lady Hamwee, would remove a subsection stating that former membership of the Housing Corporation is not a bar to appointment of the new regulator. We are grateful to the noble Baroness for informing officials of the intention behind the amendment and appreciate her usual courtesy. I hope that I can provide her with the clarification she seeks. Clause 83(4) is merely for the avoidance of doubt. It merely makes clear that former membership of the Housing Corporation is not a bar to being appointed as a member of the regulator. We want to avoid any uncertainty over this, which is why the subsection has been included.

Baroness Hamwee: For the avoidance of doubt, how does membership of the Housing Corporation affect applicants for chairmanship of the Homes and Communities Agency? That is my point.

Lord Bassam of Brighton: It means that it is quite open to previous members of the Housing Corporation to be members of both the HCA and the regulator. There is no intended difference in the drafting. I hope that that answers the point.

Baroness Hamwee: It does.

Lord Bassam of Brighton: I am pleased.

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