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Amendment No. 115 again relates to changes made in Grand Committee, which limit the requirement to seek disposal consent to social housing. It was achieved through amendments to Clause 171. That change did not, however, affect those disposal consents which are required under other legislation via Clauses 188 and 189. These clauses mainly apply to stock transferred homes. This omission would have meant that registered providers may still have been required to seek disposal consents for land other than social housing where the land was part of a stock transfer, but not otherwise, which was not our intention. Amendment No. 115

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corrects that omission by clarifying the requirement to seek consent under Clause 189, which does not apply to land that is not social housing.

Finally, Amendments Nos. 108 and 109 are technical and ensure the clauses are consistent with similar powers elsewhere in the Bill. I hope noble Lords will agree that, while technical, these amendments are important to ensure that the system works in a simple and effective way, ensuring the protection of tenants and investment where needed, while minimising bureaucracy for providers. I beg to move.

Baroness Hamwee: My Lords, I am grateful to the Government for acting on the concerns that I raised at the previous stage about disposals without consent. I would have preferred to see something which more closely mirrored the position that would have applied with other companies on an insolvency, but the proposed amendment is a good one.

A question has just occurred to me and I am sorry I did not think of this before and give notice. If the purported disposal is one where there has been an agreement to sell more properties than come within the exception and the purchaser has paid a deposit, what happens to that deposit? Of course, anyone with his wits about him would provide for the possibility of a moratorium when drafting a sale agreement. There must be an answer. If the purported disposal is void, would the deposit go back to the failed purchaser? It would be helpful to have clarity on that.

Lord Bassam of Brighton: My Lords, the noble Baroness is probably right but I shall take advice and write to her on the point.

On Question, amendment agreed to.

Clause 149 [Exempted disposals]:

Baroness Andrews moved Amendments Nos. 105 and 106:

(a) ”(b) section 173 of the Local Government and Housing Act 1989 (c. 42).”

On Question, amendments agreed to.

Baroness Andrews moved Amendment No. 107:

(a) it requires the regulator’s consent under section 148, and(b) the regulator has not given consent.(a) the disposal is of a single dwelling, and(b) the registered provider reasonably believes at the time of the disposal that the buyer intends to use the property as the buyer’s principal residence.”

On Question, amendment agreed to.

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Clause 166 [Transfer of property]:

Baroness Andrews moved Amendment No. 108:

On Question, amendment agreed to.

Clause 167 [Section 166: supplemental]:

Baroness Andrews moved Amendment No. 109:

On Question, amendment agreed to.

Clause 172 [Exceptions]:

Baroness Andrews moved Amendments Nos. 110 and 111:

(a) ”(b) section 173 of the Local Government and Housing Act 1989 (c. 42).”

On Question, amendments agreed to.

Clause 176 [Separate accounting]:

Baroness Andrews moved Amendment No. 112:

On Question, amendment agreed to.

Clause 182 [Interpretation: other expressions]:

Baroness Andrews moved Amendment No. 113:

“and for this purpose “infrastructure” has the same meaning as in Part 1.”

On Question, amendment agreed to.

Baroness Andrews moved Amendment No. 114:

On Question, amendment agreed to.

Clause 189 [Section 188: consequential amendments]:

Baroness Andrews moved Amendment No. 115:

“(ba) after subsection (1A) insert—“(1B) This section does not apply to a disposal of land by a registered provider of social housing unless the land is social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008.””

On Question, amendment agreed to.

Clause 190 [Overview]:

Baroness Andrews moved Amendment No. 116:

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“(d) requires the regulator to give guidance about complaints relating to registered providers and about the use of its powers under this Chapter and Chapter 7 (sections 213 and 214),”

On Question, amendment agreed to.

Clause 191 [Provision of social housing]:

[Amendments Nos. 117 to 119B not moved.]

Clause 194 [Consultation]:

Baroness Andrews moved Amendment No. 120:

“(da) one or more bodies appearing to it to represent the interests of local housing authorities,”

On Question, amendment agreed to.

Viscount Eccles moved Amendment No. 121:

(a) consult, before revoking guidance under this section, such persons as the Secretary of State considers appropriate, and(b) publish the fact that the guidance has been revoked as soon as reasonably practicable after the revocation.

The noble Viscount said: My Lords, I shall speak also to Amendment No. 123. What would these amendments do if agreed? First, they would remove Clause 195 with its unprecedented and prescriptive provisions; secondly, they would split Clause 195, in effect, into two clauses, one of which is a widely drawn, flexible guidance clause which is a replica of Clause 48 in Part 1, except that the amendment changes the name “HCA” to “the regulator”. Finally, the amendments include a directions clause, the wording of which is taken directly from Section 76 of the Housing Associations Act 1985. Section 76 is the precedent cited by the Government in their submission to the Delegated Powers and Regulatory Reform Committee and in Grand Committee. However, if the Government were minded to replace the proposed Section 76 clause with a replica of Clause 48(1) to (4) in Part 1, thus putting the regulator into the same position as the HCA, that would be entirely appropriate. Either clause would do what the two amendments intend.

What would be the effect of these amendments? First, they would provide the Government with the powers they have argued they need. Secondly, they would put the HCA and the regulator on all fours and

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make them subject to a similar scheme of powers. Thirdly, they would deal with and put to rest the disagreement between the Delegated Powers and Regulatory Reform Committee, of which I am a member, and the Government. Finally, they would retain a conventional power of direction as included in many Acts.

5.30 pm

I will give my reasons why these four improvements to the Bill deserve a welcome from the Government. First, with regard to powers, the Minister has herself argued that in dividing the functions of the Housing Corporation in separating out regulation—I quote from the letter of May last to the Delegated Powers and Regulatory Reform Committee—

but that the,

and, further, that,

I believe that these propositions will be met with general agreement: first, that the regulator should be more independent, and, secondly, that the Secretary of State indeed has an interest in the regulator’s functions—including, I would judge, those in Clause 195(1) as well as those in Clause 195(2). The question is how we satisfy those twin goals in the most elegant and effective way.

Guidance is a better way than directions. Guidance allows dialogue to proceed at any required pace, allows any depth and detail of consultation and enables compromise—although the regulator must have regard to guidance, whether in full agreement or not. Thus compulsion is avoided. In contrast, directions would entail compulsion. It is certain that any direction that enforced a realignment of the regulator’s method of delivering performance under Clauses 190 to 194 would be highly disruptive both to the HCA and to social housing providers. That is inherent in the language and the process of Clause 195. Would the inevitably slow progress towards a direction take a year? Given Clause 195(4) and (5), it seems likely, thus creating great uncertainty in a difficult and demanding market. Surely guidance is the much more appropriate power, serving to achieve both more independence and the Secretary of State’s legitimate pursuit of the public interest.

The second issue is the keeping of the HCA and the regulator on all fours. People in both public bodies will be drawn from the Housing Corporation and from English Partnerships, where they are colleagues. They will need to continue to be colleagues in a joint endeavour. The HCA and the regulator face a stern test: 70,000 high-quality completions by 2010-11, as the noble Lord, Lord Bassam, reminded us. That is a 40 per cent increase on the current 50,000 completions, split more or less down the middle between rented and owned. I believe that there is agreement that the most acute shortage is in rented property. The average Housing Corporation grant for rented housing is about £60,000. For owned property it is about half that figure, confirming that rented property is the most demanding sector in the social housing market. Both the HCA and the

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regulator, continuing to work in close harmony, will need to be both innovative and imaginative if they are fully to succeed. They will need the independence that they have been promised, and anything that puts one into a different relationship with the Secretary of State from the other will not help. They need to be on all fours.

I turn to the third issue. There has been, as my noble friend Lord Dixon-Smith pointed out in Grand Committee, a disagreement between the Delegated Powers and Regulatory Reform Committee and the Government. The committee demurred at Clause 195, saying in its Eighth Report that the,

Despite the fact that the Minister continues in a state of disagreement with the committee, it will be to the advantage of the House if this disagreement is peacefully resolved. Amendments Nos. 121 and 123 achieve this; neither the proposed guidance clause nor the proposed directions clause is of a legislative character, and both are well precedented.

The final issue is that of the conventional inclusion of a directions clause. Directions are a draconian power and are meant to be so. They are not intended for the review of detailed operations under the provisions of an Act; they are intended for the unforeseen—for exceptional circumstances when rapid action is needed. This is why directions clauses such as that in Section 76 of the 1985 Act have been acceptable, despite the fact that they are subject to no parliamentary procedure. Amendment No. 123 restores directions to their well precedented place in legislation.

I shall say a word or two about assurances. Directions clauses attract assurances, and we have had some about Clause 195. However, two questions always arise. The first is that of the cook’s pie crust—are assurances made to be, after a time, broken? The second is more serious. Why put an extensive and complicated clause in a Bill if it is very unlikely to be invoked? The language and intent of Clause 195 is all about the performance of functions. Guidance will be a more effective way to find improvements to performance, leaving directions for use in extremis.

I am seeking to meet the needs of all the principal players—the Secretary of State, the HCA, the regulator and the Delegated Powers and Regulatory Reform Committee. I believe that the providers as well as the tenants and owners will also benefit. I beg to move.

Lord Dixon-Smith: My Lords, my noble friend has made an admirable case for trying to keep all the bodies that he mentioned in line. I am quite sure that the Minister will argue that the Bill already does that but the report of the Delegated Powers and Regulatory Reform Committee shows that there is clear division of opinion as to whether that is the case.

I support my noble friend in his amendments; as he says, they would enable the apparent conflict to be resolved and would unquestionably assist in keeping co-ordinated the actions of the Homes and Communities Agency and the regulator. That has to be a worthwhile ambition. Therefore, it is very easy for me to offer my support.

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Baroness Hamwee: My Lords, I agree absolutely with the noble Viscount about guidance being better than directions. I hope that he will comment on the fact that Amendment No. 123 gives the Secretary of State a much wider direction-making power than Clause 195, as I do not think he has said anything about it. His argument may lead one inevitably to that conclusion—probably it does—but it gives me some trouble.

Lord Bassam of Brighton: My Lords, I shall start where the noble Baroness finished, because her point goes to the heart of the argument. As I read the amendments, they would make the regulator subject to the Secretary of State’s direction and guidance. I understand the point about guidance, but that would apply for all its functions. When we discussed this matter earlier, I assumed that the noble Viscount, Lord Eccles, was much more keenly in favour of the regulator’s independence. It is a feature of the Bill, which I had thought was broadly accepted, that the new social housing regulator should be largely independent from government, subject to the Secretary of State’s direction only in the setting of a small group of key standards. This is in contrast to the status quo, where the Housing Corporation is subject to direction by the Secretary of State in respect of all its functions; so there is a change.

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