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Finally, subsection (6) provides for a situation where the Secretary of State issues a direction that is adopted intact by the regulator as a performance standard. Frankly, it will be pointless for both bodies to consult the same consultees on the same issue. Where the final standards differed from the direction they would probably have to be a second consultation.

I hope that I have been able to reassure noble Lords that this has been an iterative and open process which, in its evolution, has changed the balance in the Bill between the regulator and the Secretary of State. It has embedded the independence of the regulator, while giving some residual but very necessary powers to the Secretary of State. That is a proper balance. It has certainly been a proper parliamentary process. On that basis, I hope that noble Lords will agree that the clause should stand part.

Viscount Eccles: I should first apologise to the Grand Committee; I completely forgot to say that I am a member of the Delegated Powers and Regulatory Reform Committee, to which the Minister referred, but my views go rather beyond what was in its report. What I have said and will say is my personal view, not the view of the committee. I remain in a difficulty.

The problem is that we are discussing two completely separate things. I come to the practical one first. I quite understand that there will need to be conversations and leverage of some sort—there is plenty about, of course—if things are not going as well with the regulator as the Secretary of State considers that they should or if the Secretary of State identifies improvements that the regulator could make. No one can have any objection to there being a proper dialogue, guidance or whatever. It is the words “must comply” which provide the difficulty. That means that in a state of disagreement, the regulator must comply, because he will have received a direction.

The second issue is completely different. It concerns the relationship between secondary regulation and the power of direction as used by Secretaries of State and the relationship with Parliament. As with orders, Parliament gets the opportunity to scrutinise, not on a website, but in a legal document, what is being proposed. It also has the chance to debate either by Prayer to annul or needing an affirmative resolution what is written in that legal document. Everybody then knows that it has really been thought through and that it has been the subject of parliamentary scrutiny so that the opinions and prospective opinions of Parliament have been taken into account before the order was laid. This is not so with directions, and that is why directions, which are subject to no parliamentary scrutiny or procedure, have always been reserved for particular uses, not for general use. While I have the greatest respect for the positive report of the noble Lord, Lord Best—I understand about progress on the practical matters and I welcome it—it does not go to the point of the formality of receiving a direction which must be

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complied with but which has not been subjected to parliamentary scrutiny in any form. If I may say so, that is a different issue.

I remain of the opinion that what is set out in Clause 195 could be achieved by perfectly acceptable means within the relationship between the regulator and the Secretary of State, but should not be achieved by directions. That is my position and I am certain that in one way or another I shall return to the matter.

Clause 195, as amended, agreed to.

Baroness Hamwee moved Amendment No. 110DZA:

The noble Baroness said: This proposed new clause would require the regulator to undertake reviews of safety standards. It is prompted in particular by concerns over water heating systems. I understand from the Minister that the accident—if that is the right way to describe it—that prompted my honourable friend the Member for Taunton and the honourable Member for St Ives to raise this in the Commons took place on the Minister’s first day in office at the Department for Communities and Local Government. I am sure that noble Lords will remember the incident—a word I hate—where the appalling explosion of a water cistern above a cot in which a young child was sleeping resulted in her death.

I have drawn the clause in broader terms because it seemed appropriate. We are so close to the end of the Bill that I am reluctant to raise narrow matters when they ought to be placed in the context of what the regulator will be doing, but in the case of hot water cisterns, the Government are conducting a consultation at the moment and a new British standard is to be introduced. However, it will not be retrospective, which means that water cisterns installed before the 2004 British standard came into effect are not the subject of it.

My honourable friend has asked Questions of the Government, and the Answers deal with prospective work, not the retrospective implementation of the 2004 British standard. The Government obviously will want to await the outcome of the consultation since it is only a month or two away, but I hope that they will not sit on it and will take seriously the need to look at existing cisterns and their installation in order to ensure that they are safe. We would all be appalled if such a thing were to happen again. I beg to move.

Baroness Andrews: This is a good opportunity to raise this serious issue in Committee and to make sure that tragic deaths like that of Rhianna Hardy can be avoided by other children. I welcome the opportunity to put on record what we are doing and how we are

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helping housing associations, and intend to help them, to fulfil their obligations. We are united in our determination to do everything possible to ensure that such deaths do not happen again. Since the appalling accident and others like it, the Health and Safety Executive produced a comprehensive safety note explaining the symptoms of and remedies for the problem. The safety note also set out best practice for the installation of hot water systems. The Housing Corporation arranged for that alert to be distributed to every housing association, so that they would be fully informed about what they should do and look out for.

The department is updating the Decent Homes guidance, which will refer landlords to the HSE safety note to ensure that advice is taken into consideration by landlords when preparing investment plans, so that they can look at what they need to change. The noble Baroness knows that we brought forward proposals to widen the requirements relating to hot water safety in Part G, on hygiene, of the building regulations. Those proposals for consultation were published on 13 May and we will implement any changes early in 2009. I think that that was the review to which the noble Baroness referred. I will write to her about the issue of retrospection, because that raises more complex issues than I can address in the Committee.

Essentially, the proposed changes, if implemented, would seek to ensure that hot water systems, including the cylinder, the cistern and controls, are robust and do not let the system overheat to the extent that it fails, because that is the technical failure that has been causing the problems. As the noble Baroness knows, safety standards for existing dwellings are dealt with by the Housing Act 2004 via the Housing Health and Safety Rating System, the HHSRS; but duties under the Health and Safety at Work Act 1974 can also be applied and enforced in respect of the providers of rented housing when the conduct of the undertaking results in risk to tenants. That can help by ensuring that the HSE notice is distributed to all RSLs and that would also set standards for the condition of properties that would encompass compliance with health and safety matters. So the two systems working together can close that information gap. The landlords of existing rented stock have a duty of care to tenants and safety alerts make them aware of possible hazards from water heaters.

That series of actions is very practical and is targeted on RSLs to ensure that they are fully informed. I understand the intention in the amendment to put the issue on the regulator’s agenda in the form of a review. I do not think that that would be the right way forward, because the combination of the scrupulousness of the HSE and the building regulations is focused much more on consequential routes for addressing this. The issue goes much further than the social housing sector, as the noble Baroness knows. The regulator will not have direct authority over compliance with safety standards, because that comes under the HHSRS. Rather than requiring the regulator to carry out such a highly specialised review during its 12 months, we must bear in mind that in order to be fully effective and in order to choose some of these outcomes, he needs to be fully focused on the statutory objectives.

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So, current regulatory practice illustrates the role that the regulator might play. In fact, under Clause 191, one of the objectives of the regulator is to ensure that tenants enjoy an appropriate degree of protection. The clause empowers him to set standards on the quality of accommodation, facilities and services provided by registered providers, so if it is appropriate for the regulator to cover this issue, we need to note that he does have sufficient tools to do so. However, neither we nor he would want to duplicate the arrangements that are in place.

The Housing Corporation also regulates by means of a regulatory code which sets out fundamental obligations on housing associations in order to meet the corporation’s regulatory requirements. Under the code, RSLs are required to comply with the law, including safety standards, to ensure that the homes their residents live in are well maintained and in a lettable condition. The regulator can also help by facilitating and encouraging awareness of problems and legal obligations. I think that we have in place a system of safety and protection, access to information and ongoing work that, it is hoped, will help to ensure that we do not see another tragic accident in the future.

5 pm

Baroness Hamwee: I am grateful for that response. When the Minister writes to me, will she be able to give me any idea of how much is being done on the ground? She talked about mechanisms for spreading the word, and that is fine, but only so far as it goes. However, I do not expect her to have been briefed on that for today, but I would like to know. Having said that, and thanking her for her offer to write, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 196 and 197 agreed to.

Clause 198 [Survey: supplemental]:

Baroness Hamwee moved Amendment No. 110DA:

The noble Baroness said: This amendment briefly addresses a matter of fairness. Under Clause 198 the regulator can require the provider to pay some or all of the costs of the survey and report. I should say as an aside that my introduction may not be long enough to allow the Minister to get to his place in order to respond. However, it seems to me that the registered provider should be required to pay only if the survey upholds the regulator’s suspicions—that is the word used slightly earlier on. It would not be fair for the provider to have to pay if he gets a clean bill of health. I beg to move.

Lord Bassam of Brighton: My notes to respond to this amendment are rather longer than the words used by the noble Baroness to move it, and I apologise for that. However, I think that what I have to say will allay any suspicions. The effect of the amendment would be to make it impossible for the regulator to charge an individual provider the cost of a survey unless the

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regulator could prove that its suspicions when starting the survey were justified. A survey allows the regulator to enter a property to see whether a provider has improved the home or carried out maintenance to the agreed standard. It is an existing Housing Corporation power and is one of the ways in which the regulator can investigate a breach of maintenance standards either in response to tenants’ concerns or on its own suspicions. It can check, for example, that a roof has been mended or a boiler installed. A regulator which prioritises accommodation standards for tenants would use this power.

It is not our intention that the Government should pay the regulator’s running costs and it is anticipated that the regulator will raise almost all of its income from fees recovered from registered providers. Clause 177 allows the regulator’s costs to be met largely by fees imposed on the whole provider sector. It is likely, for example, that an annual fee will be paid by all registered providers. Additionally, specific powers in the Bill allow the regulator to charge individual providers on the “polluter pays” principle. If the regulator were not allowed to charge individual providers for a survey, it would have to absorb the cost. That means, in effect, that the other providers would ultimately pay through increased fees.

If the concern is that the regulator will use this power irresponsibly, I can offer some comfort. The regulator cannot charge more than the survey costs and can charge part or none of its costs if it thinks that is appropriate. So the regulator cannot possibly profit from running a survey. It must follow objective 10, which prevents unnecessary regulation, and it can charge none, part or all of the costs to respond to individual circumstances.

We want a proactive regulator, not one that responds at the last minute in cases of serious abuse by a provider. If the regulator cannot charge for a survey unless it can prove its suspicions are justified, we fear, not unreasonably, that it will either be discouraged from carrying out surveys proactively unless it is very certain in its concerns or, more likely, it will charge the costs to all providers in general rather than only the individual provider whose stock it surveyed. A question of fairness is involved in this issue.

In order for the amendment to work, the regulator would have to set out its suspicions publicly before the survey. That would add to bureaucracy. It may not be easy to tell, based on the survey alone, whether its suspicions are justified. I pose the question: what happens if the regulator considers its suspicions are upheld but the provider disagrees? Would there be legal challenges? This could end up costing more than the survey fees. That would benefit no one as all providers have to pay for the regulator to defend such cases in their annual fee. Overall, it would discourage the regulator from charging for surveys whatever the result and place the cost instead on the annual fee. By reasons of equity, that would not be fair. We would rather leave the choice of whether to charge directly to the regulator. I hope that answers the noble Baroness’s points.

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Baroness Hamwee: It answers the point, but not in a way which leaves me wholly happy. Here we have another situation where we are relying on the regulator to be reasonable. There is nothing here to say that the charge should in any way relate to a reasonable assessment of the need for the survey. I hear what the Minister has to say. It is most reassuring that this is not novel. If providers have not experienced problems in the past, common sense might apply. No doubt providers will read this report—this came out of my own head; I was not asked to raise the issue—and if they have a concern they will seek a way of taking forward a narrow but important point of fairness.

Because we rightly started from the tenants’ point of view, I have been concerned throughout this part of the Bill that, where there is an issue, it is easy to forget and overlook the need to be as even handed as possible with the providers. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 198 agreed to.

Baroness Andrews moved Amendment No. 110E:

(a) a registered provider’s performance of its functions in relation to the provision of social housing, or(b) the financial or other affairs of a registered provider.(a) shall invite the Audit Commission to carry out the inspection, and(b) may arrange for another person to carry out the inspection only if the Audit Commission declines.

On Question, amendment agreed to.

Clause 199 [Inspection]:

Baroness Andrews moved Amendment No. 110F:

On Question, amendment agreed to.

[Amendment No. 110FA not moved.]

Baroness Andrews moved Amendments Nos. 110G to 110L:

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(c) the Audit Commission.”

On Question, amendments agreed to.

Clause 199, as amended, agreed to.

Clause 200 [Inspector's powers]:

Baroness Andrews moved Amendments Nos. 110M to 110R:

(a) documents stored on computers or electronic storage devices on the premises, and(b) documents stored elsewhere which can be accessed by computers on the premises.(a) a person authorised in writing by the Audit Commission to exercise the powers under this section for the purpose of an inspection carried out by the Audit Commission under section (Inspections), or(b) a person authorised in writing by the regulator to exercise the powers under this section for the purpose of any other inspection under that section.”

On Question, amendments agreed to.

Clause 200, as amended, agreed to.

Clause 201 [Performance information]:

Baroness Hamwee moved Amendment No. 110RA:

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