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The noble Earl said: My Lords, Amendment No. 93 was inspired by the National Housing Federation. It deals with the objectives of the regulator in Clause 88 and bears some similarity to my Amendment No. 102ZD, which was debated in Grand Committee. I have changed it slightly to take into account some concerns raised in Grand Committee, and I hope that the Minister will find the new amendment acceptable.

The point is to make clear how the regulator goes about meeting its objectives under this clause. The amendment simply replaces objective 10, because I do not think that, as the Bill is drafted, it is really an objective at all—it is the manner in which the other objectives are to be performed. My amendment just makes that point clear; it is nothing more sinister than that. Objectives 1 to 9 are all about what the regulator does. My amendment tells the regulator how it should operate.

Proportionality and minimising interference are very important. If the regulator follows those principles, we are much more likely to have a fair, efficient system. They should apply to all the objectives; they should not be seen as another objective that the regulator strives to achieve but must balance with nine others. It is not an either/or choice here; it is, as the noble Baroness, Lady Hamwee, said in Grand Committee,



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The Minister said in Grand Committee that she worried that Amendment No. 102ZD, as it was then, would send the wrong signal and that tenant confidence would suffer if she accepted it. My new amendment, as noble Lords can see, would be inserted towards the end of Clause 88. I have done that because I want to send a signal that the amendment is not to be seen as an attempt to water down or override objectives 1 to 9. I say again that my amendment is not another objective but instructions to the regulator on how best to perform. In Grand Committee, the Minister said that minimum interference is,

I am sure she will agree with me when I suggest that if the working principles of minimal interference and proportionality are applied to how the regulator performs on all its objectives, along with consistency, transparency and accountability, then tenant confidence will in fact be boosted, not undermined. I beg to move.

The Deputy Chairman of Committees (Lord Colwyn): My Lords, if this amendment were to be agreed, I remind the House that I would not be able to call Amendment No. 94 owing to pre-emption.

Baroness Hamwee: My Lords, I did indeed express the concerns that the noble Earl has summarised. I think I said that I read objective 10 as being a how rather than a what, and I found it difficult to understand it in the context of the list of objectives. It was of a different type from the other objectives.

The noble Lord, Lord Graham of Edmonton, referred earlier today to the “brainy people”. The Government have said so many times that this would give the wrong indication. They seem to say at one point that the objectives are not a list and not in order of importance, but they also say that moving this objective around would affect the importance. I am still confused by that, but there comes a point where one has to accept that the brainy people who draft legislation, which is a bit different from ordinary-speak, must know what they are doing, and the amateurs cannot interfere with it. I hope the Minister has some notes that will explain all these questions.

I have one question for the noble Earl about the last paragraph. He has taken me to task outside the Chamber for criticising his amendments, but I frame this as a straight question. Paragraph (c) refers to a duty; it does not matter where it comes, but if Section 22 of the Legislative and Regulatory Reform Act 2006 applies, why does that need saying? I was not quite sure why the noble Earl felt it necessary to spell this out because that Act will either apply or not and we do not need to repeat one piece of legislation in another. From the look on the noble Earl’s face, I am not making myself entirely clear. I suppose my question boils down to why it is necessary to spell this out. Is the 2006 Act, and the way it deals with matters, not sufficient?

4.15 pm

Baroness Andrews: My Lords, I appreciate the way in which the noble Earl has tried ingeniously to come back with an amendment which he thinks we might accept. I hope it does not sound churlish of me to say that we still cannot accept it on a point of principle.



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The amendment still prioritises its proposed objective over the other nine, which is a problem for us. Since the Committee stage, and since the noble Earl tabled his amendments, a statement by a coalition of interested stakeholders has drawn attention to their anxieties, which are exactly the same as those I expressed in Committee. They do it more authentically because they are going to be affected by this and involved in making it work. The National Consumer Council, tenants’ organisations and the CIH argue that the amendment would undermine tenants’ rights, send the wrong signal to tenants and tie the hands of the regulator. It is significant that they welcomed everything else the Government have done but have issued a red flag of warning regarding this amendment.

I am sure that the noble Earl has brought forward the amendment with total integrity, and the noble Baroness has returned to some of the arguments that took place in Committee. I do not have many new arguments, I am afraid, but I believe that those I have are sound. Objective 10 is not a drafting point; it is a deliberate decision to make the objective to minimise interference as important as all the others. Of course we want the regulator to proceed proportionately to minimise interference; we have said that throughout our proceedings and that must be in the culture and expectation of the way the regulator works.

The objective is included because it expresses the balance that we want to achieve between driving improvements among poor providers while minimising the regulatory burden for good providers. We are conscious that overburdening a regulatory system drives out good, and that is the last thing we want to do when we are trying to stimulate the market, not suppress it. Making this an objective does not diminish the fact that minimum interference is a working principle, as it is with other regulators, but demonstrates that the regulator should positively aim for it. I believe, as those very important stakeholders have said, that it would be wrong to require the regulator to start by asking how he intends to minimise interference by providers. His task is to start by asking how he will address and resolve the weak consumer position of tenants. That is his job. The amendment, albeit with the best of intentions, seems to send the wrong signal about what the Bill, the system and the regulator are trying to achieve, so I am afraid that I cannot accept it.

Baroness Hamwee: My Lords, I do not know whether the noble Earl intends to divide the House on this; I will go with the Government because there comes a point when one just has to accept what is being said. Can the noble Baroness explain why it is important to leave the objective in this place when subsection (13) states:

Baroness Andrews: My Lords, that is indeed the case. We have not created a hierarchy of objectives, because they each have to be balanced against the rest. Objective 10 is part of achieving that balance of all the other things that we want the regulator to do.



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Baroness Hamwee: My Lords, the noble Earl’s amendment would not remove subsection (13).

Earl Cathcart: My Lords, we have had a short but interesting debate. The noble Baroness, Lady Hamwee, asked about our new paragraph (c). It was cribbed straight from subsection (12) of the clause. The intention of our amendment was to change the Bill as little as possible, which is why we have included the paragraph.

At this and the previous stage, the Government have agreed to amendments from all sides of the House. That is welcome as I have no doubt that they will enhance the Bill. However, I am feeling a little left out. The Government in their wisdom have not agreed to any of my amendments on Report, neither a fair deal for rural areas nor the need for flood amendments. It therefore comes as little surprise that they will not accept this amendment—maybe it is just the way I tell ‘em. However, if at first you do not succeed, try, try again, so I live in hope. Slightly crestfallen, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Filkin moved Amendment No. 94:

(c) promotes dispute and complaint resolution at a local level”

The noble Lord said: My Lords, I shall say a few words also about Amendment No. 138A. Amendment No. 94 is in a sense timely. My right honourable friend the Secretary of State for Communities and Local Government has today made strong commitments to pass more power to tenants and provide effective redress systems for dissatisfied citizens. That points directly to the amendment and to concerns that some of us have about the Bill while welcoming in broad terms what it seeks to do.

Those concerns are, first, that the Bill essentially empowers the regulator, not tenants, and that tenants get influence and purchase only indirectly through the regulator. Secondly, it creates what some of us would see as a rather old-fashioned central-state model of regulation just when the all mighty central state is going out of fashion.

I go back to what Cave said that is directly relevant to this. First, he said,

He was wise. Secondly, he said,

Where are we now in the Bill? It is clear that much progress has been made, through both the contributions of your Lordships’ House and my noble friend’s listening skills, which are as good as ever. Information for tenants on a cross-domain basis in a locality, so that they can compare the performance and value of services that they receive from their own social landlord with those of others, is to be welcomed. The question now is what they can do about it if they are dissatisfied.

Also to be welcomed is the system of tenant triggers, which allows tenants to ask the regulator to intervene. However, it is clear that they can be used only in pretty

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extreme situations for reasons of economy, and will therefore not be an effective mechanism for the regulator to become involved in the hundreds of thousands of areas of day-to-day dissatisfaction that will be generated by 4 million tenancies. Triggers are necessary, but they do not address the issues about which many tenants are concerned.

There is much to be welcomed, too, in a set of centrally determined standards, but many tenants locally may want something different from them. There will be greater tenant involvement in the regulatory system as a result of the changes that my noble friend the Minister has brought forward. That, again, is to be welcomed. But the argument behind this amendment is essentially that the regulator needs a guiding statutory duty to promote local choice and local complaint resolution. That is what the amendment says on the tin, and that is what it seeks to do.

Why so? At one level, it is a statement of the blindingly obvious, because it is axiomatic in all dispute resolution systems that you seek to get things resolved as early and as low in the system as possible. It is better in economy terms and better for the complainants. It is necessary to give it statutory enforcement because the regulator should expect that local resolution to problems is sought first and vigorously. I am sure that the Minister will broadly agree with that. But the regulator needs to expect social landlords to be very proactive indeed, more proactive than I would suggest has been the tradition to date in listening to tenants, hearing what they are dissatisfied about and working to change it, when they wish to have proper changes brought about, even though that may go against the short-term interests of the landlord and their traditions—but of course not against the duty of the landlord and regulator—to protect the asset and the debt that sits behind that. It is possible to have both.

In other words, if tenants want a different and better service and are prepared to pay more for it, and if they want a different manager, because they believe that the manager there has a local office and can provide a better service than their own manager here, there should be a duty on that RSL or other social landlord to explore this with them and open up options to them. The regulator should have a mindset that if the social landlord does not behave in this way, in vigorously exploring complaints and trying to resolve them at local level, and the complaint escalates unnecessarily to the regulator, it should be seen as poor practice. In other words, the regulator needs to incentivise social landlords to be very proactive in opening up choice options and resolving complaints or the wish for improvement by those tenants. Why so? Obviously it is there as the most efficient way in which to resolve complaints, but it is locally that tenants need to be empowered and have choice. It is only locally that most tenants will ever get empowered. If we do not open up empowerment at local level, most of this Bill will be a load of hot air—if we are not careful. The regulator needs to work over time to change the nature of supply relationships and choice at a local level, so that the regulator does not need to get involved. That has been almost the leitmotif of regulatory practice for at least the last decade.



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I shall say no more about that; I shall say a few words, however, about Amendment No. 138A, which is in a similar domain to an amendment that I moved in Committee. My amendment tried to ensure that, when tenants were dissatisfied with the housing management service that their landlord provided, they could do something about it. I shall not go into detail about what the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, are saying, as that is for them to do, but I would hope that the Government would accept that, in the spirit of what the Secretary of State has been saying today, there has to be an effective way. If tenants collectively in an area are dissatisfied with the service provided by their manager and want to go somewhere else, and it is not in a situation of gross negligence—clearly there is a power of intervention in such a situation, but that is not the normality—and think that they will get a better deal elsewhere, it should be axiomatic in this Bill that the regulator would seek to open up that sort of choice.

That is one means of achieving the aim; I offered another. The Minister will say that she does not like either of them, but what is her mechanism by which tenants can do this that does not involve gross negligence cases but deals with normal complaints? I have the greatest respect and affection for her, and naively wait in anticipation that I shall rejoice and be surprised and delighted today. I beg to move.

Earl Cathcart: My Lords, I was interested to hear the arguments of the noble Lord, Lord Filkin. I would agree with him. We certainly agree that encouraging the resolution of disputes at a local level is sensible and preferable. It is far more efficient for everyone involved to resolve any differences without allowing them to escalate. Indeed, his amendment might also bring a change in culture to registered landlords.

4.30 pm

I also have amendments in this group that deal with disputes. Amendments Nos. 118 and 119 were raised in Grand Committee. I brought them back not to be difficult, but because I feared that I did not express myself as clearly as I might have done and the Minister responded on a slightly different tack from the one that I was on. Amendment No. 118 is designed to allow procedures to be developed so that landlords have recourse against troublesome tenants. At present, the Bill is silent on that point. We should not be so simplistic as to imagine that big, bad landlords will always behave badly towards tenants; the landlord may occasionally have perfectly reasonable and legitimate complaints to make about a tenant. Although the amendment in no way diminishes the rights of tenants, it is sensible to recognise that complaints—we use the word “differences”—may go both ways. The amendment would be a simple way of recognising that.

Amendment No. 119 would remove “or control” from the relationships that tenants have with their management. I do not think that the phrase is appropriate. We do not give a company’s shareholders control over the day-to-day management functions, as that is the job of the management team. However, if the shareholders—or, in the case of the Bill, the tenants—are unhappy with the management, there should be clear but quite separate mechanisms for dealing with the problem.

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There is a clear difference. I am concerned that by including the words “or control” in Clause 191, the Bill is muddying the waters.

Amendments Nos. 136, 137A and 138A, to which the noble Lord, Lord Filkin, referred, are a set, with each one explaining the one before. The Bill makes no clear provision for tenants to apply to the regulator for a change of manager or transfer of some management functions. It does make clear provision for the regulator to force a change of manager or to put the service out to tender, but not for that initiative to come from the tenants. Tenants should be able to initiate change. That principle is fundamental to tenant empowerment.

Amendment No. 136 would insert into Clause 247 the words,

This would provide an additional route to follow in transferring the management services of registered providers. Amendment No. 137A defines an approved application, and Amendment No. 138A would insert a new clause that specifies the guidelines for such an application. These amendments were inspired by the National Federation of ALMOs.

The Government’s policy is to offer choice to tenants, but that needs to be comprehensive and applied to social housing tenants too. These amendments would empower tenants to apply for a change of management. It was reported in the Cave review that all tenants felt that they should be able at a collective level to call for a change in the provider of management services. Without these amendments, there would be no clear mechanism for allowing tenants to trigger such a change. Amendment No. 138A suggests criteria that the regulator should apply to applications. The aim is to be sure of establishing a fair and transparent process. The noble Lord, Lord Filkin, said that he tabled a similar amendment in Grand Committee. If the Government do not accept this one, we would be interested to know how they will deal with the issue.

These amendments would neither provide a right for tenants directly to sack their manager nor—and I emphasise this in case a worry should arise—mean that a transfer of management would affect the ownership of property in any way. I simply wish to build on the mechanisms already in the Bill to allow the regulator to enforce a transfer where there has been a breach of standards or mismanagement. If the Government are serious about offering choice to tenants then empowering them in this way should raise no objections.

I have looked at the Government’s amendments in this group. Although I am sure that the Minister will answer all my questions when she responds, I have two queries. Several amendments propose inserting the words,

in parts of the Bill where there is already mention of “registered providers”. I am not sure why we must put that in. Is this a loophole that the Government have spotted and are now trying to close, or is there a more substantive reason for adding consideration of those interests at this stage? Are they not just registered providers?



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Government Amendment No. 96 proposes including in the regulator’s annual report a general description of the complaints made and how they were dealt with. I hope that the Minister will explain what is meant by “general”. How general is “general”? Does it mean a general description of every complaint, which sounds frightfully bureaucratic, or a general description of all the complaints received? If it is a matter of, “The regulator received 100 complaints and dealt with 90”, there would not be much point. I hope that the Minister can tell us how she envisages this measure working in practice.

Lord Best: My Lords, I am deeply sympathetic to tenants being empowered to play a full role in the management of their organisations. The Bill has been amended in several important respects to get the balance right between the opportunities for residents to participate actively in the management of their affairs—indeed, in some circumstances to raise the issue of a change of management—and, on the other hand, the regulator’s powers to act on the residents’ behalf and to take into account the cost to the taxpayer of any changes and the viability of the provider; that is, whether it would stay in business if changes were brought about. We have got the balance about right.


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