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Grand Committee

Volume 702: debated on Wednesday 11 June 2008

Grand Committee

Wednesday, 11 June 2008.

The Committee met at quarter to four.

[The Deputy Chairman of Committees (Lord Haskel) in the Chair.]

Housing and Regeneration Bill

(Sixth Day)

If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

97PA: After Clause 61, insert the following new Clause—

“Power to extend scope of Part 2

(1) The Secretary of State may make regulations providing for additional bodies to be included in the definition of English bodies.

(2) In making regulations, the Secretary of State shall aim to ensure that the effect of including additional bodies in the definition of English bodies is to extend the regulation of social housing in England in accordance with this Part to include other providers of social housing; and in particular, the regulations may extend the regulation of social housing to—

(a) a local housing authority within the meaning of section 1 of the Housing Act 1985 (c. 68) (local housing authorities), and(b) a person controlled by a local housing authority.(3) In addition to the regulations under subsection (1), the Secretary of State may by order provide for consequential changes to this Part which the Secretary of State considers necessary or expedient to permit or facilitate the regulation of social housing in England; and in particular, the order may modify or exclude the application of certain provisions of this Part to—

(a) a local housing authority within the meaning of section 1 of the Housing Act 1985, and(b) a person controlled by a local housing authority.(4) In making regulations or orders under this section, the Secretary of State shall aim to ensure that the effect is to create a single regulator for social housing in England; and in particular, the Secretary of State shall enable the regulator to regulate local housing authorities and persons controlled by a local housing authority using powers provided under the Local Government and Public Involvement in Health Act 2007 (c. 28).

(5) The regulations or order under this section shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament; and the regulations shall be made by statutory instrument.”

The noble Lord said: The two amendments tabled in my name, Amendments Nos. 97PA and 97PB, would give the Secretary of State the power at some later stage to extend the scope of the new regulator for social housing tenants to other bodies as well. At Second Reading, I made the point that the part of the rented sector most in need of regulation is the private rented sector. Tenants of private landlords, as we all know, can find themselves exposed to appalling practices with no protection from any regulator, in contrast to the position relating to the services they receive in their apartment, whether that is gas, electricity, water or whatever, and not even with the protection of a redress and ombudsman scheme. However, the Minister will be delighted to hear that I am not proposing to pursue this campaign any further within the context of this Bill since I understand that its scope is more limited than for the private rented sector and that battle must wait for another day.

However, I think it extremely important that the role of the regulator is extended in relation to those other tenants within what is known as the social housing sector; that is, principally the tenants of local authorities, whether those tenants are in homes that the council continues to manage itself or in homes that are now run by ALMOs—the arm’s-length management organisations.

Fortunately there is, I think, no disagreement on any side that the scope of the regulator should be extended to cover all tenants within the social housing sector. I am grateful to the Local Government Association and indeed to the Chartered Institute of Housing, the National Housing Federation, the National Federation of ALMOs and the Tenant Participation Advisory Service for their input to these amendments. There is unanimity among them that the regulator should cover all tenants in social housing, including those who are tenants of local authorities, for reasons of equity and to overcome the anomalies that would be perpetuated if tenants within the council sector remain outside the scope of the regulator and the tenants of housing associations are within in it.

Perhaps I may illustrate how those anomalies work through. It is quite likely that someone will be almost randomly nominated by a local authority to a housing association or to the council’s own stock depending on where vacancies arise or the number of children the person has at that time. It is not necessarily the person’s choice: they will accept the social housing to which they are nominated. In other cases, people transfer. They move home. There will sometimes be a mutual exchange between tenants of housing associations and local authorities. People move between these sectors quite freely. The entire stock of some councils has transferred through large-scale voluntary transfers into the housing association sector. Many tenants of ALMOs may believe that they have moved outside the council sector but in fact they are still council tenants and within it.

So anomalies abound. Indeed, it is possible that the existing tenants of ALMOs and joint venture local housing companies in future will not be covered by the new regulator, but that the tenants who move in, whose homes will have been provided with help from grant, will be brought within the regulator. So, even the same landlord or owner of the property may find that tenants are in different categories after this legislation is passed unless we can create what is known as a domain-wide regulator that covers comprehensively all those tenants in social housing.

There is unanimity of view that this measure is needed. The question is when should we extend the role of the regulator. I think that the service is now to be called the Tenant Services Authority rather than Oftenant. That sounds like an improvement to me, though possibly the name will change before the end of the afternoon. At the moment, though, we are going for the Tenant Services Authority. But my fundamental question is: why should we delay in having at least an opportunity for the Secretary of State to bring forward at a later date measures to extend the scope of the regulator to cover all the tenants of social housing, including council tenants?

I will not spend much of the Committee’s time arguing the case for the democratic process in itself being a sufficient protection for tenants to make it unnecessary at least to move speedily with this change, since very few people believe—and indeed the local authorities themselves, through the LGA, are not arguing—that council tenants should be put in a separate or different category because they have elected masters somewhere at the end of the line of accountability. Let me dismiss that potential argument and look at two other reasons that have been advanced for the delay in including something in this Bill to cover the extension of the role of the regulator.

The first is that this measure is better dealt with in the legislation which will possibly be called the empowerment, economic regeneration and community Bill—I may have missed a word or two in that one. The Government have properly announced that they intend to introduce that legislation after discussion on a White Paper in the autumn. It would fulfil their original intention that, within two years, the role of the regulator will be extended to cover council tenants. One ground for holding back is that other legislation is in the pipeline and it should make its way through the process in a couple of years and bring those tenants within the same regulatory system.

Professor Ian Cole—who with a number of colleagues has done much important work for the Joseph Rowntree Foundation which I greatly appreciate—has been looking at the practicalities of the extension of the role of the regulator. The group had its last meeting on Thursday of last week and its report, agreed across the piece, is winging its way to the housing Minister, Caroline Flint. It is likely that that report will say that the members of Ian Cole’s group are all agreed on the principle that one should press forward for domain-wide regulation, even if there are still one or two parts of the small print on which the arrangements that relate to council tenants would need to be different and refined in a couple of ways before the process is concluded. The group has been robust in working together to say that the time is right for this extension to happen as soon as practicable. I cannot see that the receipt of that report would lead anyone to form the view that the time is not right to include amendments to that end in this part of the Bill.

The next reason why it might be said to be a bad idea to include clauses in the Bill to extend the regulator’s powers is that these are enabling powers for the Secretary of State. They are Henry VIII clauses and there is an aversion in your Lordships' House to enabling powers. To counter that charge, those of us who have brought together these two amendments have sought to hedge, surround and box in the provisions that would give the Secretary of State additional powers, for example making it very difficult for my hopes of the private rented sector being incorporated ever to be fulfilled through these clauses. If the Minister and her colleagues believe that different wording would do the job better, or if there is anxiety that this extends the powers of the Secretary of State too liberally, I am sure that the wording can be tightened. The hope is that the clauses are sufficiently restrictive to ensure that this is not simply giving the Secretary of State more powers than Members of the Committee would wish.

The proposal is to do something that the Government already believe is good—extending the power of the regulator to cover all social housing tenants. It does so in a way that means we get a bird in the hand instead of one in the bush; we are not going to have to wait for two years for something that may or may not happen. It places in the Bill the chance for this to be triggered as soon as the negotiations—which I do not think are too far away—can be concluded between the different parties on exactly how the practicalities of this can be operated. It means that events will not intervene between now and the legislation that may or may not happen in a couple of years’ time. I think that it would make everybody happy. I hope very much that the Committee will agree. I have pleasure in begging to move.

I have two amendments in this group at the more extreme end of the matter. They delete the ineligibility of local authorities and ALMOs from registration. Regulations are second best. Sometimes it is better to have a regulation-making power than no power at all, and this may be such an occasion. However, we are all familiar with the procedures’ shortcomings, particularly in that no amendment can be made to an order.

Another reason for wanting to see local authorities included from the start is that the new agency—the Tenant Services Authority, did the noble Lord say?—should start by involving local authorities and local authority tenants, who should be involved in its development right from its inception and not as an add-on. Culturally it is important to include all those with an interest right from the start; it is quite hard to change an approach after two or three years. Having said that—and having referred to the regulation-making provisions, perhaps more scathingly than I intended, as second best—I would certainly be happier if the Government could be persuaded to go down that route than I would be with no reference at all to local authorities, or rather with the only reference to them being to exclude them.

I support what the noble Lord, Lord Best, said and the thrust of what the noble Baroness, Lady Hamwee, said. I shall not speak at length. It is an unusual and impressive situation that we have support from bodies like the Local Government Association and the National Federation of ALMOs, which would be captured by this self-volunteering, all-encompassing regulatory proposal, but also the Chartered Institute of Housing and TPAS. I pay tribute to the way in which they have worked together and put forward a progressive and mature case for change. I will not repeat the arguments on why domain-wide regulation is in the interest of tenants. The Committee knows that, not least the requirement to have a set of performance data.

I still struggle to understand why we are making such heavy weather of this. My good and noble friend Lady Andrews has tried to cheer me up in her kind way by saying that she has a little Bill coming along soon which will put it all right. I hear that. But the Government have known what CABE was going to recommend before it was published. They have known for well over a year that CABE was going to recommend this. Therefore, officials have had plenty of time to do the necessary policy work. I recognise that part of the anxiety was at a time when the Government rightly were seeking to deregulate local government through one door and that they did not want to re-regulate it through another. No doubt there were some good battles between officials within the department. But the LGA has cracked that problem for the department. Therefore, that is no reason for not moving forward with this.

I agree with the noble Lord, Lord Best, that in a situation where the House itself may be suggesting—or even going bolder and promoting—a powerful set of powers, the Minister need have no fear that the scrutiny process of this place will fall foul of that. I cannot speak for the whole House, but I would nevertheless want to see a different set of situations addressed in amendments. We have waited 30 years for an improved regulatory system for social housing. It is common sense to all of us that it should be domain-wide. It is not sensible to start a bus with one of its wheels missing. I urge the Government, even at this late date, to encourage their officials to get this together so that by Third Reading we can have the Bill which all of us believe is right and necessary.

I do not wish to be rude and make comments about future promissory notes from the Government, whom I support and love. But Members of the Committee know what I mean: no Government or Minister can at this stage guarantee that a Bill will come forward. What goes into the last Queen’s Speech of a Parliament is very different from what went into the first one. The Minister is not able to deliver on her promise that this will happen within two years. We should therefore put it into the Bill now.

The noble Lord, Lord Best, has introduced what I would call the uninvited guest to the feast. Whether it is an unwanted guest is another matter. It is quite clear that there is a great deal of support for this proposal. I add my voice to those of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Filkin, to say that we really ought to do this now. The noble Lord, Lord Filkin, made the political point—which I might have done but now have no need to do—that certainty about a future legislative programme is something that is not in our control. Even if we had been three years earlier in this cycle it still would not have been certain, but now there is particular uncertainty.

Everyone—the sector, the housing authorities and the LGA—agrees that we have the opportunity here. Like the noble Baroness, Lady Hamwee, I accept that the regulatory processes are not what we would desire. But I have to tell her that it might have come up later in the Bill, because elsewhere in the Bill we have mention of regulations that have had a special procedure. The regulatory procedure is what we define it as. If we amend this Bill, we can draft the regulatory procedure to permit draft regulations to be seen and amended before we have to deal with the regulations. That is technically possible to do. I think that difficulty can be overcome, and it is important to make that point.

The noble Lord, Lord Best, made the case that a large part of the process of producing a unified domain for the social housing sector is possible if we do this. If we do not do it, frankly, it is uncertain. I am a great believer in availing oneself of an opportunity if it does arise, so I support the amendment. If the wording is not perfect, I am sure that it can be adjusted between now and Report, when we might in any event want to consider it further. I hope that this will be taken further.

I am sorry to be a bit cold waterish about the amendment, particularly as I strongly support the principles behind it. Noble Lords might think that as a former employee of a regulator I would welcome this very handy tool, but I think that so-called Henry VIII provisions are to be resisted if at all possible. This one is not just enabling; it is enabling primary legislation to be amended by subordinate legislation. On the whole, that is not a democratic procedure. In any case, as far as I can see, the process is not likely to go faster than the primary legislation which, I understand, my noble friend intends to bring forward. I feel uneasy about the Henry VIII aspect.

I start by welcoming Members of the Committee to Part 2 of the Bill. We have looked forward to this day for some time, and so far it has lived up to expectations. I am glad that we started with an amendment that raises some important issues that cross the whole platform of what we are discussing in this part of the Bill. I was relieved when the noble Lord said that he was not going to pursue the private rented sector, because it creates even more complexities than the local authority sector. The noble Lord knows that it is Julie Rugg’s task to come to the department to tell us about some of the options that we might have, after she completes her review of the private rented sector.

The noble Lord also told the Committee, rightly, that we have decided that Oftenant was not the best possible choice of title; when we think about it, it may have been the worst choice. The Tenant Services Authority is what it will be called, which is much better because it represents what it is going to do. The amendment proposes to introduce an enabling power to provide a framework under which the future regulation of local authority housing would operate. It has been obvious from the way in which the noble Lord presented the case—he is the best possible advocate—the support around the Committee and the evidence that he drew on, that there is considerable sympathy with the process that he has proposed. I am grateful to my noble friend Lady Whitaker for raising one of the problems that we have with it, which I will come on to.

I want to be sure that Members of the Committee understand that we have never, ever thought that cross-domain regulation was anything other than a good thing. We have always been committed to it, so it has not been an uninvited guest. It has been a guest that has been under inspection, in a way that is perfectly proper and necessary. Martin Cave was clear in his report, and he was clear when we met him, that cross-domain regulation is designed to improve standards for every tenant, and that is right. The examples of the flows of tenants back and forward between the sectors, which the noble Lord, Lord Best, pointed out, are accurate. It illustrates the complexity. The only thing between us is how we move forward. This will involve taking enabling powers. We have had to consider a Henry VIII power many times in this House. It enables primary legislation to be amended or repealed by subordinate legislation. Our problem with an enabling power in this case—we do not have a natural aversion to it—is with the process to which it gives rise. I will come to that.

In a way, I was hoping that noble Lords would think that the amendment had been overtaken by events, given our commitment, which we announced in the draft legislative programme, to legislate for cross-domain regulation through the Community Empowerment, Housing and Economic Regeneration Bill. The noble Lord is quite right, but he had the words in the wrong order. It will not be a slight Bill; it will be substantial, and this will be an important part of it. I do not share the gloomy prognostications of noble Lords. I do not believe that there will be any issue. We will introduce the Bill in the autumn following a White Paper this summer, and we will be secure in our expectations that this will be an element of that. There is no question of our passing up a golden opportunity.

Our intention is to proceed, and our timetable is very clear. In that case, we really must subject the notion of an enabling power to proper scrutiny, because it offers no advantages with regard to timing. The noble Lord, Lord Best, was very firm on this point. He said that it was about timing; he did not want to contemplate delay. I understand the sense of urgency, but we can hope to achieve cross-domain regulation only by April 2010 at the earliest through either route. I shall explain why.

The amendment is hardly light on process. The enabling power proposed in complementary Amendment No. 97PB would place requirements on us to consult and to publish a draft order and a statement of representations. The order would have to be debated and agreed by both Houses. That process is quite lengthy. It could certainly not be concluded in time to deliver cross-domain regulation from April 2009. It would have to have proper scrutiny. We would have to protect against unintended consequences. Nothing would be more disastrous if we brought forward something with aspects which we simply did not predict. There is no advantage at all for timing, given the choice between enabling legislation and the Bill that we will bring forward.

The remaining case for an enabling power seems to rest on two points: the desirability of providing a safeguard, should we not be successful in including measures in the future Bill—I hope that I have dealt with that; and the idea that regulations are somehow a more appropriate way to proceed than primary legislation. I take issue with what my noble friend Lord Filkin said about the timing. The co-advisory panel has been of enormous benefit to us. It is working extremely hard. Its task is to work with the stakeholders who will be responsible for implementing this, as well as with those who tell us how to address the wide range of implications involved. These are very complex matters. It is not a question of officials in the DCLG working with the regulator; it is a question of everyone who is involved in this process knowing exactly what the implications are and how this will be achieved. The co-advisory panel is now nearing the final stage of its work. It has made welcome progress in working through many of the complexities, but there is still a little way to go.

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.

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.

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 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.

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 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]:

97PC: Clause 63, page 31, line 23, leave out “or mainly”

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,

“owns housing only or mainly in Wales”,

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,

“activities are principally undertaken in respect of Wales”?

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.

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,

“only or mainly in Wales”,

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 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.

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.

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.

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.

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.

97PE: After Clause 68, insert the following new Clause—

“Transitional arrangements

(1) The Secretary of State may by order transfer functions of the Housing Corporation to—

(a) the regulator, (b) the HCA, or(c) the regulator and the HCA jointly or concurrently.(2) An order under subsection (1) may make provision in relation to English registered social landlords which is similar to any provision made by this Part in relation to registered providers.

(3) “English registered social landlord” means a body—

(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).(4) Provision made under this section, including provision made by virtue of 318(1)(d), may modify an enactment.

(5) Provision under section 320(1) in connection with the coming into force of a provision of this Act may, in particular, include transitional provision having regard to the effect of provision made under this section.”

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.

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.

“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.

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

“In the case of the Regulator, it is considered that it would be impossible for it to begin exercising all of its new regulatory functions for a considerable period of time (because of the requirements for consultation in relation to setting standards under Clause 191) and it will therefore be necessary, in the short term, for the Regulator to exercise the Corporation’s existing regulatory powers”.

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?

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]:

97Q: Clause 70, page 34, line 16, leave out paragraph (b)

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,

“to such an extent that it is affordable for those on low incomes”.

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.

Amendments No. 97S and 97T—I do not understand how people cope with all these numbers and letters, especially when the order in which Z comes in the alphabet is different in different amendments; some people understand these things but the rest of us just try to cope—make the same point, that while preference in social housing should be given to people in need of housing, it is also necessary to look at the nature of the communities that are being created, affected or changed. One of these amendments relates to accommodation for rent and the other to owner-occupied accommodation, but in both the key is the need to promote mixed and sustainable communities. To some degree this goes back to the report produced rather more than a year ago by Professor John Hills on the role of social housing, in which he identified a number of problems specifically about council housing but which also relate to social housing in general. One of the main problems he identified was the unsustainability of communities increasingly dominated by the poorest and most vulnerable. There is tension between providing accommodation for people in the greatest need and creating communities that are sufficiently mixed and sustainable.

There are all sorts of different ways of dealing with this, but this is not the time to go into them. However, the purpose of the amendment is to make the point that, if we are not careful, social housing becomes ghetto housing of one sort or another, and it is very important that we avoid that. Let us consider what has happened to council housing in many areas over the years. Some council estates used to be entirely or mainly owned by the council. In many areas, particularly when the estates had existed for 25 years or more, there was a balanced and sustainable mix of ages, occupations, incomes and lifestyles, and the estates had become mature communities.

The twin pressures of allocation policies that restricted new allocations to people in the greatest need for the very best of reasons, which we all supported, and of the right to buy, in which substantial parts of the estate were sold off and went into the private ownership sector—in many cases, these are now being sold on to private landlords, unfortunately—have resulted in those council estates being less mixed, less sustainable and less mature communities than they used to be. These are important issues. I do not want to detain your Lordships for very long, but these issues must underlie discussions about social housing in general, where we are going with it and what sort of communities we are creating. I beg to move.

I greatly enjoyed the restrained contribution from the noble Lord, Lord Greaves, on what he described as modest amendments. It was a useful beginning to a discourse on the philosophical underpinning to the issue. I congratulate him on that, because we sometimes lose sight of where the whole notion of social housing comes from and it is helpful to be reminded. His observations about the impact of the right to buy on some council estates were very interesting. I recognise some of them from my experience of my time on my old local authority.

The council estate adjacent to the university has in part become studentified, which is an issue; there is no question about that. It was a strange spin-off from a policy that was put into place by Conservatives in an earlier Government, from motives that one well understood at the time. That Government certainly believed that they were taking a measure that would provide a greater social mix in many of the council estate areas in which the right to buy was taken up.

In general, the amendments return to the definition of social housing, which has been the subject of running debates not only in your Lordships’ House but in the Commons Committee. They follow on directly from that and seek to provide, as the noble Lord has argued, further instances of where the clauses operate. I can offer the reassurance that the clauses do not introduce any element of means-testing into social housing, if that is a concern, and that his amendment to Clause 70 explicitly refers to promoting mixed and sustainable communities as a criterion for allocations.

The noble Lord has explained his amendment to Clause 71, which attempts to address a number of important social housing issues, such as the affordability of rent levels for those on low incomes. He referred particularly to how that affordability might vary, as he sees it, in different parts of the country, and to the importance of creating mixed and sustainable communities.

Amendment No. 97S intends to influence allocations policies so that they promote more mixed communities within social housing estates. However, these clauses do not affect allocations policies. They refer to the existence of allocations policies simply because they are one of the features that define social housing. The amendment would therefore have no impact on day-to-day allocations, but may have a perverse impact on regulation. It might mean that some new homes for rent could not be classified as social housing, because the allocations policies were not in line with the definition.

If, for example, a registered provider was operating an allocations policy that was not in line with the regulator’s standards, any new homes that were built would not be defined as social housing, and those homes would therefore fall outside the scope of regulation. The effect would be precisely the opposite of what is intended. The homes need to be defined as social housing so that the regulator can enforce its standards.

Amendment No. 97T makes a similar amendment to the definition of low-cost home ownership accommodation. It includes a similar reference to promoting mixed and sustainable communities and refers to,

“affordable for those on low incomes”.

That language is unhelpful, because most low-cost home ownership purchasers often can afford to rent at a market rate. This would in fact restrict low-cost home ownership to very marginal purchasers and would seem to go against the main purpose of bringing about more mixed communities with a range of incomes.

However, we agree that the amendments probe some pertinent issues. For example, the question of how we can achieve more mixed and sustainable communities in social housing goes to the core of what the department does on a day-to-day basis. Our concern is that these issues cannot be addressed by these clauses and that the amendments seem to be attempting to achieve policy outcomes that the clauses have little or no impact on.

It may be helpful therefore if I set out again the purpose of these clauses. The clauses define which new homes become social housing. I reiterate that all existing homes owned by existing registered social landlords are automatically defined as social housing unless they are specifically excluded, such as care homes, for example. Once a home is classified as social housing, it remains social housing unless a specific event occurs, for example the tenant exercising a right to purchase.

In terms of the amendments, the clauses do not affect how homes are allocated. They do not affect the tenure of the tenant, and they do not make it possible for homes to leave the social housing stock. These clauses refer to allocations policy, for example, because that is one feature which defines social housing and therefore helps us to identify which homes need to be regulated. The clauses do not have any impact on allocations policies in their own right.

While the regulator will play an important role in ensuring that rent is affordable for people on low income, through its ability to set standards on rent and the Secretary of State’s ability to direct on rent standards, the clauses are not the right place for these important issues to be addressed and they will have no impact on long-term rent setting. I have some sympathy with the aims of the amendments, but I do not believe that they would achieve these aims and, in some instances, they may even be counterproductive.

To protect tenants, it is important that all new publicly-funded social housing falls under the scope of the regulator. In particular, the amendments might mean that some new homes could not be classified as social housing, for example, because the local allocations policies were not in line with the definition. That would leave tenants vulnerable and would leave the regulator unable to enforce standards. I understand what the noble Lord is trying to achieve, and he has raised some important issues in the amendments, but I rather fancy that the amendments do not achieve their objectives and that they might have perverse consequences.

I thank the Minister for that careful reply. It is probably true that these amendments are technically not up to the job that I would like them to do. However, the issues will not go away. They are fundamental to a great deal of this part of the Bill, particularly this section of it. They will come back, and we will no doubt discuss them again, whether or not in the context of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 97R and 97S not moved.]

Clause 70 agreed to.

Clause 71 [Low cost home ownership]:

[Amendments Nos. 97T and 98 not moved.]

Clause 71 agreed to.

Clauses 72 and 73 agreed to.

Clause 74 [Leaving the social housing stock: sale]:

On Question, whether Clause 74 shall stand part of the Bill?

I have no objection to the clause standing part subject to the typos being corrected. A cross-reference has not been updated. I shall point it out afterwards.

Clause 74 agreed to.

Clauses 75 to 79 agreed to.

98A: After Clause 79, insert the following new Clause—

“Extension of remit of regulator

(1) The Secretary of State may make regulations to extend the remit of the regulator in circumstances described in this section.

(2) Subsection (1) applies, notwithstanding the definition of social housing in section 69, where a dwelling has left the social housing stock under the circumstances referred to in any of sections 74, 76, 77 or 78 and if nevertheless there remains in respect of that dwelling residual landlord functions with the social landlord or other charges still due to the former social landlord or services owed by or to the former social landlord.

(3) Such functions include, but are not limited to, ground rent, services and service charges, amenity and amenity charges, district heating and other communal services provided by or on behalf of the former social landlord or other charges and liabilities owed by the lessee or occupier to the former social landlord.”

The noble Lord said: This amendment is intended to take one stage further the arguments put forward by the noble Lord, Lord Best, in support of the first amendment we discussed this afternoon, which I strongly support. I apologise to the Committee that I am having to Box and Cox and did not manage to get up to support that amendment.

This amendment is a way of getting on to the agenda an issue that we have not addressed hitherto in relation to what areas the regulator should cover. I am sure that these clauses as drafted do not do what I intend and—as the noble Lord, Lord Greaves, admitted with his amendments—I am sure there are some serious technical problems with them. However, they put on the agenda the fact that social landlords, whether they are councils, ALMOs or, in some cases, registered housing associations, manage large estates. On those large estates there are not only tenants in the strict sense of the word—direct tenants of the social landlord—but also ex-tenants who bought their flats, who are of the first right-to-buy generation and very similar in demographics and attitudes to the tenants, and those who bought the flats as the second generation and live on the estate of relatively low-cost housing, but not that low cost these days. There are also flats that were bought to let and are therefore occupied by sub-tenants who may be sub-tenants of other registered social landlords. This achieves the kind of mixed communities that we are all after in that there are owner-occupiers and direct tenants, often short-term tenancies fulfilling priorities in housing allocation priorities.

However, certain services, charges and relationships are still with the main landlord. On a large council estate a lot of things are dealt with on a more or less equivalent basis for tenants, sub-tenants and lessees, yet the Bill does not allow the regulator to intervene in the areas relating to non-direct tenants: for example: cleaning services; environmental services—the gardening, to put it crudely; big bills that relate to major works; smaller episodic bills relating, for example, to the introduction of digital television, which I have had cause to raise in other contexts in this House; and issues such as additional heating where charges are imposed by the landlord or the ALMO on tenants and lessees alike and will ultimately fall on the sub-tenants as well. They are calculated on the same basis and the services are the same for all forms of tenure.

While accepting the priority in the Bill on those areas that were previously regulated by the Housing Corporation—and housing associations essentially—and the assumption of the noble Lord, Lord Best, that we could later extend this to ALMOs and local authority tenants, it needs to be recognised that there are residual landlord functions that also relate to other forms of tenure on that estate that will not be allowed within the purview of the regulator. The noble Lord, Lord Best, used the word “domain”, which to me is not just a status issue but a physical one, where the later landlord is covering all these different forms of tenure. Many quality of life issues, some expense and value-for-money issues and some fairness and equality issues arise in relation to all these forms of tenure.

That is not a particularly acceptable message to some of the representatives of tenants and lessees who often see things through different lights and who are very much in the domain of improving the quality of life and genuinely creating mixed and sustainable communities in these areas. If nothing else, I hope that the Minister will give some indication that the department is prepared to take on board in this context, and in other parts of the Bill, that there are issues to be addressed that are appropriate for regulation and regulatory intervention. The general regulation on lessees or in tenancies in the private sector will not cover these.

Like the noble Lord, Lord Best, I would have preferred the regulator to have a very wide function in the first place. Down the line we will have to address the situation; otherwise we will create another form of inequity and inflexibility in housing provision by restricting the regulator to dealing with only one channel of communication between the provider and the occupier when there are multiple forms of relationship. I beg to move.

Briefly, I support everything that the noble Lord, Lord Whitty, said. Sometimes that is true where you would not expect it on ordinary estates, but it is particularly true in blocks of flats and such developments. I remind the Committee that my daughter is a tenant of a private landlord in a former council flat, and she is surrounded by tenants in similar situations, those from housing associations and people who own their own flats. It is very mixed indeed and it can get complex, which is exactly why people need the sort of regulation that the noble Lord suggests.

I sympathise with the proposal but add a word of caution. I heard what the noble Lord, Lord Whitty, said, and there is clearly a problem, but the people who bought the properties presumably thought that they were escaping from the inclusiveness of the original arrangement. If we do this, we will make the regulatory process more complex. It would be inappropriate to have blanket regulations applying to somebody who had bought their way out and had only a residual liability in respect of estate development. One would have to draft regulations to take account of the variations in tenure, which would make them more complicated; but the amendment would make that necessary.

A question occurs to me, so I hope that the noble Lord, Lord Whitty, can illuminate me. Where there is mixed tenure, does he envisage financial arrangements applying to the provider of the services? I am in broad sympathy with what he says, but I cannot see how it would work in practice. Would those financial arrangements be different according to the kind of tenure that people have on the estate, and what would be the implications?

I look forward to my noble friend answering that difficult question. It is a relief when the questions are put to other Members of the Committee.

An important set of issues has been raised in this short debate. My noble friend is exercised by the fact that, for very good reasons, we have mixed economies within some of our larger estates and in blocks of flats where there is a mix of tenure. There are issues about those who have bought their properties and who are now faced with major bills for repairs, some of which are prompted by the fact that decent homes legislation enables local authorities to spend considerable amounts of money doing up their own properties. That implies and brings with it a cost to those who own their own homes, which illustrates my response to the amendment as a whole. It may sound a bit harsh that we do not think it is necessary for the remit of the regulator to be extended to leaseholders. It is not that we are not concerned about them but we consider that, because they are in a different position, they are more appropriately dealt with through other regimes, systems and services than through the wholesale extension of the regulatory framework.

If all the occupiers of an estate are owner-occupiers, they will clearly get the benefits of the legislation. However, where some of the properties are owner-occupied and some are let on a social housing basis, the owner-occupiers will have the benefit of leasehold legislation. In addition, the standards that may be set by the regulator under Clause 191 will give tenants on those estates and owner-occupiers protection, because in practice it will be extremely difficult not to do so. That clause will give power to the regulator to set standards for registered providers as to the nature, extent and quality of accommodation, facilities or services provided by them in connection with social housing. The legislation provides that that those standards may cover such areas as maintenance, environmental and social matters, as well as estate management.

While the standards will be set for the benefit of the social housing sector, many of them will also be of benefit to owner-occupiers living in estates with a mix of both owner-occupiers and social tenants. We need to go back to the principles of why we need a regulator for social housing, and we shall come on to that in later amendments. However, the problem is that social housing is not subject to the usual competitive pressures and therefore one is looking at a very contained market with few market incentives for good management and little entry to, or mobility within, the sector. Owner-occupiers have greater control over their housing circumstances, as the noble Lord, Lord Dixon-Smith, said. They have more mobility and choice. However, it is important that properties should be properly managed, irrespective of landlord or ownership.

We also have to remember that leaseholders have a wide range of rights, protections and responsibilities set out in their leases and in the body of the law; for example, in the Landlord and Tenant Act 1985. The lease sets out enforceable contractual rights, and legislation places a condition of reasonableness on variable service charges which a leaseholder has to pay. They can be challenged through the leasehold valuation tribunals, and further court action is possible.

There are statutory requirements for all landlords, including those in the social sector, to consult with leaseholders before carrying out works to buildings and estates. There is a set of principles around that consultation and notices of intention. We have strengthened that. We are proposing changes to the legislation, for example, so that leaseholders will automatically receive a regular statement containing information about their service charges with the same right to see supporting documentation. Amendments have been included in the Housing and Regeneration Bill to allow this to happen. There will be sanctions if this is not complied with, including the right to withhold service charges. So we are strengthening the protection available to leaseholders.

Perhaps I may say something about what we are doing on large major-works bills in parts of London that have caused particular problems. I think that it is fair to say that this issue has been exercising my department for some time. We have been very conscious that the problem is very variable. Some boroughs have much higher numbers of leaseholders faced with these very high bills but some are not affected; it depends on the stock and patterns of ownership. Nevertheless when a leaseholder, particularly one on a low income, is suddenly faced with a bill for £10,000 or £20,000 because his block of flats is being upgraded, it is a real issue.

We have looked at various ways of addressing the issue. We set out in a Statement to Parliament last March how landlords, who already have a lot of scope in what they can do, can do more. When we reviewed it last year, we set out how we would look at extending the payment options. At the moment—I put this on the record because I think that it is important and I want local authorities to take note of it—local authorities can provide a loan at a low rate of interest, spread payment over a longer period or agree to delay payment until the property is sold. They can also buy back properties from owners who are in arrears with service charges or cannot cope with the costs of looking after their homes. The Government fund part of the cost of their doing so by letting them retain more of the receipts from property sales.

We are extending the options on offer to local authorities through the Housing and Regeneration Bill. Clause 308 will give local authority landlords a power to buy shares in properties in order to assist leaseholders to pay their major works bills. Clause 307 will give such landlords a power to offer leaseholders equity loans. These are interest-free loans which pay a percentage of the market value when the property in question is sold. I think that that is an extremely important new power. However, I should also like to ensure that local authorities use the powers that they already have to help leaseholders in difficulty and that they do so systematically and consistently. In addition, we are boosting the support available via LEASE, the body which supports, helps and advises leaseholders.

We are doing a range of things in relation to these situations and I think that they will really help. That is a powerful reason why it would be better that, rather than extend regulation in the way in which the noble Lord would like to see, we actually used, developed and promoted the powers that already exist.

Digital switchover is another relatively recent issue which is important to those living in mixed blocks of flats. We are working very closely with Digital UK and have for some time been embarked on a campaign to inform local authorities to ensure that they know where they are in the timetable for switching off the analogue signal. They are bound to give their tenants access to the new technologies. Working with us, Digital UK is encouraging landlords, regardless of whether they are covered by statutory requirements, to consult residents about upgrades. There is an issue about landlords sometimes going for the most expensive option. Digital UK recently published good practice on resident consultation for landlords entitled Calling All Landlords.

So we have in place different partnerships and different ways of dealing with some of the issues that the noble Lord raised. In all fairness, I think that that is a better, more sensitive and more targeted way of achieving the outcome that he wants to see, which is to ensure that leaseholders have a fair deal. I hope he will be able to withdraw his amendment on that basis.

I am grateful for the support of the noble Lord, Lord Greaves. I am particularly grateful to the Minister for putting on record the situation with local authorities and major repair bills. I endorse her view that local authorities should use their powers to the full, because quite a lot of lessees who are faced with major works bills bought their homes in the first flush of the right to buy, and they are now pensioners. They may be just above the housing benefit limit, but they are very pressed to pay and are very frightened by those bills.

The main point of my amendment relates to collective services in a block where there may be three or four different forms of tenure on any floor. Exactly the same issue arises when the lift does not work, for example. In those circumstances, it is not sensible to have different forms of regulation and different levels of payment according to the different types of tenure. It is possible to collect any payment differently—through service charges for lessees and through rent, spread over time, for tenants—but, in essence, fairness and quality of service apply to all of them equally. Some services, such as district heating, literally apply to them equally, because they all have the same charge and the same bill.

I appreciate what the Minister said about this being complex. I also appreciate, as I said at the beginning, that these amendments are probably not the appropriate ones to accept, but if we are to have a coherent approach to housing, particularly on some of our largest estates, ultimately the regulator should be able to cover these areas. These services are clearly different. As the noble Lord, Lord Dixon-Smith, says, we are dealing with a much narrower range of services in relation to indirect tenants. However, unless we have a coherent approach and a coherent set of regulations, the piecemeal help, which the Minister has rightly spelt out, is not very evident to the residents and could lead to new inequity and unfairness between different forms of tenure.

I therefore hope that this issue is kept alive. I should have declared an interest as chair of the National Consumer Council, which represents the interests of all consumers—all occupiers—in this respect. They all have a right to expect good quality collective services for which they are appropriately and not unfairly charged. That seems to be a communal issue that is not covered by the legislation or by the scope of the regulator. I suggest that we should extend it to them further down the line. As I said, I hope that this remains a live issue, but in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 [English bodies]:

99: Clause 80, page 37, line 38, after “England,” insert—

“( ) a community land trust (as defined in section 274),”

The noble Lord said: On Second Reading, I said that the community land trust was an idea whose time had come. My time has come now, and I intend to expand just a little on it. I take this opportunity to draw to the attention of the Minister and his advisers something that has been bubbling along for a little while. As one can see from the Marshalled List, I am not alone. I am delighted by the support that the amendment has received.

When the Government introduced the housing Green Paper in 2007, they paid tribute to the possibilities of the community land trust. The Conservative Party and the Liberal Democrat Party have also indicated their sympathy for it. We also have in the Committee the housing expert, the noble Lord, Lord Best, who has put his name to the amendment. One could therefore ask what on earth is stopping progress in the Bill. I am sure that the Minister has a number of very good reasons.

When the noble Lord, Lord Best, moved his amendment earlier this afternoon, he said that there was no disagreement, but that we had been told to wait. That may well be the fate of my amendment. I ask the Committee to understand the history of the community land trusts and the garden city movement, which is well known to me. Experience in America and Australia proves that this mechanism is capable of serving the needs of the public. The purpose of the CLT is to hold land and other assets for the benefit of its defined local community. It balances the needs and interests of the individual with the interests of the community as a whole by separating the value of the land from the value of the property on it.

A CLT holds the land in perpetuity. The owners of the buildings on it may be individual home owners, mutuals and co-operatives, or occupants of affordable rented housing. It is the community ownership and stewardship of the land asset that regulates the occupancy, limits the resale value of the homes built on it and ensures that the housing remains affordable to the community. It is such a simple prospect and project. For many years one has considered the two costs involved in housing. The cost of land was once very low. I remember that we were building well constructed council housing in Enfield and that the land cost less than £2,000. Now I shudder to think what it would be, but it must be up to £100,000, so the cost of land is prohibitive.

When I ask questions of those who advise me on these matters, they tell me that Salford University conducted a survey that reported that inhibition flowed from the uncertainty of a legal definition of a CLT. I can understand that. The report said that authorities and communities, and especially those who fund them, want to know the precise standing of the CLT before putting money in.

That is a good idea. I am willing to hear the Minister tell me that it is a good idea but that it is not in the right form of words. I would be saddened if he were to say that there is another opportunity, but not yet. There is no better opportunity than now. The Housing Corporation permitted and encouraged pilot projects in Stroud, Plymouth and Bristol, which were enthusiastically received. In my post last week came a letter from the community asset trust in north Shropshire which had heard about the initiatives. It has written to me, telling me what it is about and what it hopes to do. Frankly, it says everything that I believe should happen.

Local people will have an asset owned by the community. As the Committee knows, one of my objections to the sale of council houses is that they have been taken out of community control. The houses are controlled by private landlords or private owner-occupiers. I see an opportunity for the Government to give their blessing—I am not talking about funding, resources or priorities. The amendment asks the Government to agree that a legal definition is needed and to authorise their colleagues to table a better drafted definition on Report; I have been in this place long enough to realise that my wording may not be in the correct form.

I declare an interest: as the Committee will know, I am well associated with the Co-operative movement. Those involved in co-operative housing are anxious to serve the community, particularly David Rogers, the chief officer of CDS Co-operatives, who has a lot of experience. It was only a working party that made the recommendation for a legal definition. The Government are also anxious to serve the community. Nothing divides us politically or in trying to make progress. I welcome the Government’s stance in having not just one aspect, arrow or bow, but a number of them. This solution will not suit everyone. In north Shropshire, a thriving group of people represents many aspects and they should be encouraged.

Land is precious. Where will it come from? It could come from redundant brownfield sites owned by the council, the Ministry of Defence or other parts of government. It could come from private individuals, who wish to say, “I love this community. We are being denuded of our young people who cannot afford a house. I will donate acres of land. Instead of making a killing and getting millions of pounds, I will give it to the community”. The community then has the knowledge that that is an asset controlled by the community to serve the community in perpetuity.

I hope that the Minister will say something sympathetic. I hope that he will not ask me to wait for a better opportunity in another Bill. Time is pressing. This idea has been about for some time. People are making plans, possibly based upon the fact that this is a housing and regeneration Bill. They may be naive in believing that this is the best vehicle to take this idea forward. It is the best idea, so I hope that the Minister can help. I beg to move.

It gives me great pleasure to be associated with the amendment of my noble friend Lord Graham, and I do not intend to repeat his eloquent case for local communities having some say and control over how land in their area is utilised. I hope that the Minister will recognise that it is in tune with the Government’s current agenda of empowering local communities. It will do what we were talking about earlier: it will ensure—as my noble friend said, in perpetuity—that we have mixed communities and that our local housing stock does not become skewed in some way by market pressures. This is one of a range of future measures that local communities could have, and it should be seen in that light.

As my noble friend has said, these amendments appear here for a particular reason: the absence of a legal definition currently hampers the development of these activities. In this respect, this is a modest amendment. It does not propose to extend community land trusts, ask for extra funding or state that they are in any way superior to other forms of provision. It simply enables them to operate as a partner with other housing sectors.

I, too, am slightly concerned that the Minister will say nice words about this and then add that this is not the appropriate place. In Inside Housing a few weeks ago, the Minister Iain Wright said that he was sympathetic and would do more work on this but did not feel that the Bill was the right place. Doing more work on this is not in contradiction to putting a modest definition in the Bill. Some of the Government’s aspirations for consulting on how this can be used more widely are fine. Let us have that consultation. But, in the mean time, let us include that definition and work on it. It may be that the Government can come up with a better form of wording, but I do not see why we cannot have the definition and the consultation at the same time. The two issues are not in contradiction. This is a small and modest enabling clause. Let us have a wider debate further down the line. In the mean time, I hope that the Minister will feel able to agree to this amendment.

My name is added to Amendments Nos. 111 and 112 which, at the very least, gives us the satisfaction of knowing that we already are talking about Clauses 274 and 275. I have nothing to add to the eloquent speech made by my noble friend Lord Graham, except to add my support.

The poor noble Lord, Lord Bassam, is having a very hard time because we are all suspecting his motives before he has had a chance to defend himself. I, too, support this group of amendments. This subject has been hanging around for a long time. My noble friend Lord Cathcart made a particular plea for rural areas and housing earlier in this Bill. In many rural communities, there are people who would make land available for way below the commercial value of development land on the basis of a community land trust, so that houses would be available to the local community and would remain so in perpetuity. This would help rural areas very much; so, on that basis, I support this group. It is interesting that the proposed system would be available to all communities where land was in the ownership of people who might make it available on this basis.

However, this does not overcome all the obstacles. This is only one technical lacuna—if I can put it that way. The land would still have to go through the dreaded planning system. This does not remove that obstacle at all, as the Government have found when their eco-towns are considered, which seem to have raised a battery of negative sentiment. Going back to rural areas, this would be on such a scale that most communities would welcome it. Whether it would fit with the detailed village envelope as it existed would always be a matter of contention. It may be a matter of time before one can do something about that, because that is the planning system.

I hope that the noble Lord, Lord Bassam, will say, “We will take this away, look at it and produce a better form of words”, if he does not think that the wording is adequate. If a better form of words cannot be found before Third Reading, I suggest that he does the honourable thing and accepts this form of words. It is a fairly modest challenge. If the Government do not like this form of words because there is some insuperable obstacle in them, they should produce a form of words which would make it work. This is the opportunity. The time is now. I am very much with the noble Lord, Lord Graham, on this. Heaven help us, we are all getting older and we would like to see it happen.

A few months ago I met a gentleman whose daughter had given land to be used by a community land trust. That is clearly admirable. However, she did not, of course, have to achieve best consideration, which a local authority or any other public body would presumably have to do. I imagine that is one of the problems in creating CLTs, which is a concept that we on these Benches very much support. As I read this—I may have got it wrong—these amendments would make CLTs subject to registration. I do not know whether that is what is intended.

The noble Lord said that this is a very modest amendment. I was taken aback to discover there was an issue over the absence of a definition. I can understand that the absence of accepted structures could be a problem but not the absence of a definition. However, I am not trying to create these bodies and I take his word for it. The Housing and Regeneration Bill is exactly the right place to consider this matter, but we should be looking for something that is not necessarily very long but that gives a basis on which authorities can work and, forgive the pun, build on.

I appreciate that the Bill is at a relatively late stage but, more to the point, the Government are under pressure to get legislation through before the end of the Session. Nevertheless, I hope that we take this opportunity to facilitate the outcomes that we want to see. After all, what should legislation achieve other than to facilitate an outcome?

In replying to this amendment, I think that I have been cast as the unwitting curmudgeon and I am not looking forward to the task. My political spirit is very much with the amendment. As I listened to the comments of the noble Lord, Lord Graham, I thought back to when I chaired a housing committee a long time ago. We wrestled with some of these issues but managed successfully to resolve them when we created the Two Piers Housing Co-op in the 1980s. This issue has been around for a long time and noble Lords with more wisdom and knowledge than I have discussed it.

We understand what the noble Lord is trying to do here and we are very much in tune with its direction and political spirit. His amendment seeks to add community land trusts to the list of organisations which are defined as “English bodies” and which may consequently become registered providers. It is a clever way of trying to get the issue into the Bill. In doing so, he has argued about the important role that community land trusts can play in helping to deliver affordable homes, which we all agree are much needed by communities, in a way which is sustainable and supported by the community.

As I said, I am sympathetic to the arguments behind these amendments and the Government very much support the whole concept of community land trusts. My notes say that I must resist these amendments but I shall explain why that is the case. First, I emphasise that the Government believe both in empowering people to make decisions about their own lives and in the importance of home ownership in giving people a stake in their community.

We want to capture people’s enthusiasm, solve the problem of affordable housing supply in a way that is right for their local area and give them the opportunity to get involved and influence decisions about local services and assets. The CLT approach is a way of doing that. Community land trusts provide an opportunity to enhance those policy aims and objectives, and we are keen to explore what role they have to play in providing more households on lower incomes with the opportunity of home ownership. We have therefore provided community land trusts with access to funding through the Housing Corporation’s national affordable housing programme. That programme has been working closely with the University of Salford to assist 14 pilot community land trusts across the country. Seven of them are in urban areas, and the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, will be pleased to know that a further seven are in rural areas, so we recognise the contribution they can make in both settings. The university recently released a report on the experience of the seven urban pilots. It included some helpful pointers for communities wishing to explore the potential of a land trust. It also provided the Government with food for thought and observation in recommendations about what we can do to pave the way for the development of more community land trusts.

As the Government, our task is to take the lead. We will be consulting further over the summer and seeking views on how we can develop the community land trust and address some of the issues that the report raises. The noble Lord anticipated that I would ask the proponents of this approach to wait—

The noble Lord was not wrong, but I want to go further than that and make the simple point that the amendment is not necessary because community land trusts use a variety of legal entities, some of which are charities, some are industrial or provident societies—the noble Lord knows more about those than I do—some are companies and some are other community bodies. Clause 80 simply defines what is meant by the term “English bodies”. As noble Lords can see, all these types of bodies are already included within the definition of “English bodies”, provided that they are registered in England or intend to make accommodation available in England.

Therefore, we do not think that the amendment is necessary. Community land trusts have real potential to help provide more affordable housing and they are an exciting model, but it is inappropriate to put this mechanism to define community land trusts or any other vehicle, such as local housing companies, in legislation. Nor do we think it is wise or necessary. For example, development trusts are similar and hold assets for communities but do not have a definition in law, so there is no barrier there. To embed one particular mechanism in legislation is perhaps too short-term an approach. Circumstances differ and times change, and we would not want to see future innovative proposals or models held back because they do not fit a particular definition.

We have listened to the views of community land trust representatives, and Iain Wright announced at the Community Land Trust conference that we will be seeking views in the summer on the need for a legal definition. However, we do not think it is appropriate legally to define community land trusts without proper or full consultation. It is not just the Government who need to be convinced on the right words for CLTs; the financiers, the Local Government Association, the Council of Mortgage Lenders and housing lawyers need to have their say so that we can get this right. We are committed to getting this right so that we can take this policy area forward. If we were to accept this wording or an improved wording, we would be pre-empting that consultation.

The noble Lord, Lord Dixon-Smith, made a point about people waiting to gift land for housing. They can do so, and gifting land for housing has already enabled some community land trusts to get off the ground. That work is there and can be built on. We are looking at pilots and want to ensure, through consultation, that we get this right so that we can further encourage, develop and support community land trusts as my noble friend Lord Graham seeks. We are as one. We will get there. It is about getting this right and ensuring that we can make progress that stands up effectively and enables us to develop further this avenue of providing affordable housing.

I am grateful to the Minister and his colleagues, who have clearly taken the issue seriously. I read into this an argument that I am inclined to—I will not say “accept”—understand. My understanding comes from the fact that responsibility for the Government’s actions if things go wrong lies with the Government. I consequently understand the need for caution.

The Minister told us that there will be consultations in the summer on the need for a legal definition. If the experts from Salford who have advised me say that there is a need, that is not the end of it; they could be right or wrong. If we are told that there is no need for this, the Government must look at the consequences of saying that to the financial world, to landowners and fund providers.

I will withdraw the amendment and consult colleagues outside. This will not go away. Everyone in the room wishes it not to go away; it is a question of how we can make it go forward with a little more speed. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 agreed to.

Clause 81 [Provider of social housing]:

99A: Clause 81, page 38, line 21, at end insert—

“( ) are public authorities for the purposes of section 6 of the Human Rights Act 1998 (c. 42) and for the purposes of amenability to judicial review by the Administrative Court.”

The noble Baroness said: The amendment is grouped with Amendments Nos. 100, 103, 104 and 110 of the noble Earl, Lord Onslow. I apologise to him for stealing his thunder. I tabled the amendment after discussions with the Housing Law Practitioners Association, a group of lawyers which has briefed me from time to time over the years and which I have always found extremely helpful. It has raised points which need dealing with. I did not realise when I tabled the amendment that it would be the first in the group. As I say, that is a pity; it is not intended to detract from the points of the noble Earl.

This brief point is again about a level playing field. Are tenants of housing associations in the same position as tenants of local authorities in that they have the benefit of human rights legislation? Put the other way round, is their landlord body under the obligations of the Human Rights Act? We are all aware that provision of social housing has increasingly moved away from local authorities. It is quite odd and coarse to distinguish between the providers of housing in a way that affects tenants. Indeed, the whole thrust of the Bill, subject to the points made by the noble Lord, Lord Best, at the beginning regarding local authorities, is that every tenant matters and that every tenant has similar protection.

There is a chain of cases, of which the Government will of course be aware, but what they seem to boil down to, and what the Government have to say, is: “Let the court determine in any particular case whether the relationship between the housing provider and the local authority is such that it comes down on one side of the line or the other”. That is a very unsatisfactory position, and I believe that the Joint Committee on Human Rights takes the same view.

The issue arises in areas such as allocations and grounds for possession. While I appreciate—probably not adequately—the Treasury point about categorising housing associations, I am not persuaded that we should not be looking for a way of getting round that. This may not be the right way, but to leave a large group of tenants without the protection that they would have had, had circumstances which are probably entirely outside their control been different, seems to me a very sad thing. It cannot be a good thing for people’s rights to depend on who their housing provider is when, in almost every sense of the word, we are talking about public provision. I beg to move.

I do not begrudge the noble Baroness, Lady Hamwee, her nanosecond of glory in the slightest. She is perfectly welcome to open the batting if she wants to.

I had a meeting this morning with the noble Baroness, Lady Andrews, for which I am grateful. I explained to her, I hope, that this arose in the Joint Committee on Human Rights out of a case that was brought before the courts over a lady who was being looked after in private healthcare. In the YL case, because her care was provided privately, it did not count as a public function. Up until then, everyone had assumed that the Human Rights Act was supposed to cover anything that was providing a public function.

The difficulty here for me is that if landlord and tenant is not a public function, the Human Rights Act does not apply to the duties. If it is a public function—I am most grateful to the noble Baroness, Lady Faulkner, who drew this to my attention—when in Clause 88(2) under “Fundamental Objectives” there is objective 1,

“to encourage and support a supply of well-managed social housing, of appropriate quality, sufficient to meet reasonable demands”,

that strikes me as a public function that is being imposed on the regulator to provide social housing, either publicly or privately owned. Therefore, it seems to me that a public function performance is needed.

I am also told that there is a Treasury rule and that the moment the public function is admitted, it will come under Treasury rules for borrowing. I simply cannot believe that. Is the Minister seriously saying that if the YL case on social housing is reversed then a small company taking out a mortgage to provide social care housing will be subject to Treasury rules? Of course it will not. What is the PFI if it is not designed solely to keep every piece of borrowing off the Treasury books? Some of us have called that “Enron accounting” before now. This is an excuse produced to say that it is a bad idea.

The noble Baroness told me this morning—I am sure that she will tell the Committee, too—that the Ministry of Justice is looking into this whole affair. I quite accept that to try to fix the particular YL problem in one Bill may not be the right way to do it. It is a problem that must be brought to the attention of Ministers. That was the view of the Joint Committee on Human Rights, which considered the matter in a certain amount of detail. We are advised by some clever lawyers who know what they are talking about, and we thought it appropriate to bring this to the Committee’s attention and table an amendment, so I have great pleasure in supporting the noble Baroness, Lady Hamwee.

The noble Earl, Lord Onslow, reminds me of my days on the Joint Committee on Human Rights, when right from the beginning we had to grapple with this awkward area of bodies which carry out public functions, but which are not inherently public. The courts’ piecemeal judgments have not helped.

Perhaps my noble friend can answer the two questions in these amendments. The first refers to RSLs and the Human Rights Act and the other is about the regulator. I hope that I understand them, but it seems to me that Amendments Nos. 99A and 100 would make the landlords public bodies, which is obviously a huge issue. The other three—Amendments Nos. 103, 104 and 110—are about the conduct of the regulator. The regulator is absolutely a public body and must comply with the Human Rights Act. Perhaps the duties could be made more explicit as the latter three amendments suggest. I am not sure whether they are necessary but there would be no objection in principle to what they seek although they may not be correctly worded.

Would the objectives of all the amendments be fulfilled by the regulator setting Human Rights Act compliance standards? If the RSLs’ conduct fell short of the standard the regulator could deal with it. That would be much faster than the tenant going to court saying, “My human rights have been breached”. The question is whether this important area of tenants having the fullest human rights protection would not be satisfied by making it clear either in legislation, or even by the remarks of my noble friend, that the conduct of the regulator must comply with the Human Rights Act.

This is an important debate. I am grateful for the way in which it was opened, in competition, by the noble Baroness, Lady Hamwee, and the noble Earl, Lord Onslow. We had a productive meeting this morning, and I hope the noble Earl will forgive me, because these are complex areas, as we agreed this morning. My noble friend has just described them as rather awkward. I shall spend a little time explaining how we have come to our position and reassuring the Committee about the range of issues and the relationship between them. I will answer the two questions asked by my noble friend when I come to that part of my explanation.

I will pitch my words primarily at Amendment No. 100 in the name of the noble Earl, Lord Onslow, as it brings in the breadth of the issues raised by the Joint Committee. These are all subsequent amendments, to which we will return. Briefly, Amendment No. 100 would make the provision of social housing a public function for the purposes of Section 6 of the Human Rights Act. The substance of it arose from the report of the Joint Committee on Human Rights at the end of April. Amendments Nos. 103 and 104 were also recommended by the Joint Committee on Human Rights. They are consequential, so I will deal with them in passing. I will not deal with Amendment No. 106 in the group. We will come back to that, because I have some good news for the noble Earl.

Amendment No. 99A goes rather wider than Amendment No. 100, because the noble Baroness seeks to make all registered providers of social housing public authorities for the purposes of the HRA. That would mean that all functions performed by registered providers would be public functions for the purposes of the HRA. As I said, Amendment No. 100 was originally recommended by the Joint Committee, to which we are very grateful for going into these complex areas with the clarity and depth that it did. It has made an important contribution to Parliament’s scrutiny. The noble Earl started by referring to the case of YL. I will conclude with that, if he will bear with me, because I want to make clear the distinction between social care and social housing in its context.

The Joint Committee’s report proposed amendments to three areas of the Bill: first, the application of the Human Rights Act to the provision of social housing; secondly, the regulator’s information-sharing powers; and, thirdly, the current incompatibility in the homelessness legislation following the Morris judgment. We will deal with them in sequence as they arise in the Bill. I cannot accept the amendment, because it proposes that the provision of social housing should be deemed a public function under the Human Rights Act. I will make it absolutely clear why. My arguments are based on logic and principle. I will come to the funding issue later, but that is a consequence rather than an issue of principle.

The noble Baroness talked about the level playing field, and she is quite right to raise those sorts of issues. We strongly agree that social housing tenants need to be protected. Indeed, that is what the Bill is about. Our tenants are already protected, not least through their tenancy contract, which normally offers an extremely high level of security and protection. In addition, we are now giving social housing tenants real protection for the first time in different ways through regulation.

The second objective is to ensure that actual and potential social housing tenants have appropriate protection. The remainder of Part 2 gives the regulator the powers that it will need to ensure that tenants are protected. It covers the ability to set standards, to investigate problems, to enforce regulation in the event of breaches, and so on. In answer to the point made by my noble friend, it is perfectly possible for those standards to include even requirements that landlords act on the same principles that might be covered by the HRA. I should stress that it is up to the regulator, but my noble friend has made a significant point in that context.

The second question my noble friend raised related to the HRA itself. As a public authority, the regulator will be subject to the HRA. The noble Lord’s amendment needs to be seen in that wider context. The definitions of “public authority” and “public function” are crucial. Noble Lords will be aware that adherence to the Human Rights Act is compulsory only where a body is a “public authority”, or where it is undertaking functions of a public nature. So HRA duties arise not only where bodies are obviously public—the historic example is local authorities—but where any body performs a function that is of a public nature. We can bring the housing associations into that category because they perform one function which is of a public nature. However, an important difference is that everything a local authority does will be considered a public function because it is a public authority, whereas for a housing association, as a private sector body, some functions may be of a public nature and others will not.

I know this is terribly important and screamingly complicated for anybody to understand. Before the YL case it was assumed that private nursing homes while providing care for the elderly which was paid for by the local authority were performing a public function. The difficulty is that when they were providing the same care for people who were paying their own bills they were not performing a public function. Noble Lords are beginning to see how fiendishly complicated and difficult this is so I have a lot of sympathy with the Minister on this. However, before the YL case would we have thought that the public function would have applied to housing associations, which are helped by the regulator in a way that we thought care homes were covered by the Human Rights Act? I do not know what the answer is and, frankly, I do not think that anybody else does. However, I should like the noble Baroness to have a bash at answering it, if nothing else.

The simple answer is that we have never considered that housing associations performed functions of a public nature in providing social housing. I shall come on to the contrast with the social care provision and the noble Earl will appreciate the point I shall make about the differences in those functions.

Housing associations have always been private bodies. Why is that? I can give several reasons. This is what we would have said to the committee had we been able to submit a more substantial response. Housing associations are not controlled or owned by the state. There are about 2,000 of them, they are independent and most of them are charities. They have long and very honourable histories, often rooted in the personal benevolence of benefactors providing housing as a private function. That is what makes them so unique and independent. We are committed to that independence. I accept that they have one very limited public function. They were recently given statutory powers to deal with anti-social behaviour. While we accept that they have a public function in that context, that is very different from their core business, which is to own and manage social homes—I think that the noble Lord and the Committee saw the letter from my honourable friend Iain Wright to the Joint Committee—so anti-social behaviour is very much the exception.

As I say, there is no logic or tradition which suggests that the provision of accommodation below the market rate, as in social housing, is in any way inherently a public function. For 40 years the Housing Corporation supervised the provision of social housing by most housing associations and these bodies raise most of the money they need to build houses from private sources. They do not rely on public money to own and manage them, and have no role in the allocation of that process.

So I agree with the noble Earl: it is not the nature of the organisation providing the function, it is the nature of the function provided. On that basis, you could draw a parallel with some of the functions carried out by commercial organisations. Provision of social accommodation is almost identical to providing market housing except that the price and distribution of the service are controlled through regulation. In summary, social housing is not a public service which has been recently privatised, it is a regulated voluntary activity which local authorities become involved in. For these reasons, we disagree in principle with the Joint Committee’s conclusion that social housing is an inherently public function. By implication, I therefore also disagree with the amendments and the noble Baroness, Lady Hamwee, that registered providers—whose core functions are about social housing—should be public authorities for HRA purposes.

The practical implications are not an excuse, as the noble Earl suggested. I am arguing this case from a position of principle and logic. The consequences are serious not just for the sector, but for the whole provision of social housing in this country. The first point is relatively minor, but it will not be minor to the associations themselves. Putting the provision of social housing as a public function under the Human Rights Act will obviously impose additional costs on the sector in preparing for and dealing with the possibility of legal challenge. This is not a minor issue; some of these RSLs are very small and would not be able to cope with these sorts of legal challenges. Those costs would need to be met by increased rents and, unlike local authorities, they would not be subsidised by government grant and would clearly not be of benefit to tenants. As a principle, we seek not to impose burdens or costs on independent organisations without at least a consultation.

However, the most serious point raised by the noble Baroness and the noble Earl is that classifying social housing provision—or, indeed, RSLs themselves—as “public” for the purposes of the HRA could affect the present classification of housing authorities as private-sector bodies. The noble Earl and the Joint Committee argued that treating the provision of social housing as a public function would not necessarily imply that any organisation that performed the function was institutionally connected with the state, nor that the state would be required to exercise control over its management or operation. That is true: it would not necessarily do that. However, it is a serious risk. Even if the probability is low—and I do not think that it is—the impact would be very serious indeed for the future of housing supply in this country. The point is that if the current ability to borrow were choked off, £35 billion would be added to the public balance sheet. We would simply be unable to build the social homes we so desperately need in this country.

This question of risk was seriously examined in the other place, changes were made to the Bill to ensure that those risks were not run and relationships were clarified in such a way that everyone could see that these remain private functions. Those were important changes. If we were to make the core service—the raison d’être of the housing associations—a public function, it might pose a material risk of reclassification. Far from being an excuse, that is a terribly serious implication.

As I say, that is not my prime argument. Finally, there is the question of case law. In considering the amendment, we need to take account of emerging case law. The noble Baroness referred to it in the amendment, and the JCHR did so too. The current position of the courts supports our view that the provision of accommodation by private bodies, including housing associations, does not amount to a function of a public nature for the purposes of the HRA.

The noble Earl referred to the recent decision by your Lordships’ House in YL and Birmingham City Council. The ruling in that case held that an RSL-owned residential care home was not undertaking functions of a public nature for HRA purposes, despite the fact that the appellant’s care had been arranged by her local authority under the National Assistance Act. However, it remains the Government’s view that, in general, the provision of publicly arranged health and social care should be considered a function of a public nature. Amendments have been tabled to the Health and Social Care Bill by my noble friend Lady Thornton to restore the Government’s intention in relation to that function.

Why is that consistent with our position that social housing does not constitute a public function? There are two reasons. First, unlike social housing, care homes provide both accommodation and, critically, social care. They are restricted to extremely vulnerable people and are very heavily regulated. The same is not true of social housing, which caters to a much wider client group and covers accommodation only. Social care inspections are frequent and intrusive; the inspection of social housing provision happens about once every five years.

Secondly, social care tenants do not have the sort of contractual relationships that are governed by and govern the relationships that tenants and social housing have under the Landlord and Tenant Act. An important point is that YL affects only publicly arranged care home places. General needs social housing provided by housing associations is not normally publicly arranged. Most of the funding is sourced from rents, private borrowing and the RSL’s own resources; not grants. It is not carried out under contract, but as a private function with appropriate regulation.

So stark are the differences between social housing and care homes that I suspect that, if it was accepted that social housing provision was a public function because it was similar to care home provision, the next argument might be that private rented sector provision is a public function because of its similarities to social provision.

I want to conclude on a positive note. I have gone into that detail for all the reasons that the noble Earl invited me to; these are complex and important issues. This whole debate has raised important issues about definitions. As part of the Government’s response to the YL case, my honourable friend the Minister for Human Rights intends to undertake a consultation on the scope of the Human Rights Act. We think that this is the best way of taking forward the broader question of what should and should not be considered subject to the Human Rights Act. I was grateful that the noble Earl said that he did not think that this Bill was the right place to address this much larger issue, and he is right in that judgment. The preparatory work for that is under way, but we do not have a strict timetable for it.

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.

Before the noble Baroness, Lady Hamwee, withdraws her amendment, I thank the noble Baroness, Lady Andrews. I admit that I am 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.

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.

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.

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.

[Amendment No. 100 not moved.]

Clause 82 agreed to.

Clause 83 [Membership]:

101: Clause 83, page 39, line 1, leave out “3” and insert “6”

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.

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,

“unless the regulator directs otherwise”.

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:

“A committee or sub-committee may include non-members (provided that it includes at least one member)”.

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, 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.

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.

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.

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.

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.

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.

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.

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,

“of a small number of executive and non-executive board members, with a non-executive chair and majority, to which regulation should be entrusted”.

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 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,

“a small number of executive and non-executive board members”.

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.

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.

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.

I am pleased.

Amendment No. 101C of the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, would require the Secretary of State, when appointing new members of the regulator, to ensure that at least one-third of them are current tenants of social housing providers. We do not disagree with the spirit of the amendment, because we too want there to be tenants as members of the regulatory body. Having experience of living in social housing will clearly be advantageous for potential members, as it will give them first-hand knowledge of the problems that tenants face.

As I explained earlier, we are now recruiting through the normal public appointments procedure, and we have specified that some members should have experience as tenants. We currently envisage that the regulatory board will comprise the chair, chief executive and seven members and, among those seven, we would like to see at least two with direct experience of being a tenant. Caroline Flint made that clear in her announcement of 6 June. However, an amendment is unnecessary to establish that.

While we resist Amendment No. 102 of the noble Viscount, Lord Eccles, we understand the underlying concerns behind it. An important point is that Clause 84(2) specifies that a period of appointment may not exceed five years. It does not stipulate that appointments must last for five years, but merely sets it as a maximum length. In practice, it is likely that board appointments will last for three, or perhaps four, years—not least because a three-year appointment will probably be seen as a less daunting commitment for potential members. Housing Corporation board members have generally served three-year terms followed by a three-year reappointment, dependent on a satisfactory appraisal and recommendation by the chair. We would expect that practice to continue; indeed, as I have said, we are currently advertising for board members.

My noble friend Lady Dean made an important point about not having everybody going at the same point in the cycle. Certainly, when I have been involved in these appointments in the past, it was an issue. By having that flexibility with a five-year term, one potentially creates a situation where retirements come up periodically. That is an important consideration.

Amendment No. 102ZA would add the word “once” to the end of Clause 84(2). Hence the subsection would read, “A period of appointment may not exceed 5 years (but a member may be reappointed) once”. The amendment would clarify how often reappointment will be permitted. It is not necessary to include this in the Bill. The regulator is a public body whose appointment must comply with the guidance of the Office of the Commissioner for Public Appointments. This guidance makes it clear that public appointments should not last longer than 10 years, which allows for an appointment of five years and one additional reappointment. The purpose of the amendment is therefore already served through that route.

Amendments Nos. 102ZB and 102ZC seek to amend Clause 84, which permits the Secretary of State to dismiss members of the regulator in only five circumstances. These include absence of over six months, bankruptcy, financial interest and other forms of inability, unsuitability or unwillingness. This is the only way in which a member can be dismissed. The amendments seek to remove the specific reference to misbehaviour, so that “Case 5” refers only to members being unable, unsuitable or unwilling to perform duties, without specifying that this includes when there is misbehaviour. I therefore assume that the noble Baroness is content with the general principle behind the clause and behind dismissal in this case, but simply dislikes the use of the term “misbehaviour”.

It may help if I define misbehaviour. It is an entirely standard ground for removing a board member of a public authority. It covers two main circumstances: first, misbehaviour in office, such as using a position to confer benefits on family or harassing employees; and, secondly, misbehaviour that might affect the reputation of the body, which would normally involve the commission of a serious criminal offence.

If the clause no longer specifies misbehaviour, the Secretary of State would instead have to show that the acts that the person had committed made the person “unsuitable to perform functions”. However, unsuitability is probably a more difficult test to prove, as the Secretary of State would have to limit her considerations to the effect that the person’s actions would have on his or her suitability to remain a member. She would therefore be unable to take account of the reputational risk to the regulator of keeping the person as a member. That might be acceptable for criminal offences involving dishonesty, as it is reasonable in these cases to conclude that a person who is dishonest is not suitable to be a member of a public sector body. However, for other criminal offences or other serious misbehaviour, it is less clear that the unsuitability test would be satisfied. The wording should therefore stay as it is.

Amendment No. 104AB seeks to change the wording of Clause 92(b) by replacing the word “directs” with “permits”. The clause requires members or employees of the regulator to withdraw from performing a function where they have a conflict of interest, unless the regulator directs otherwise. The person is therefore automatically disbarred from that function unless the regulator directs that he can be involved; in other words, if the regulator permits him to be involved. The regulator is directing that the person is not disbarred from performing the function; he is not directing that the person must perform the function. It would therefore make no difference if “permits” were to replace “directs”. The two verbs have the same meaning in this context, so the amendment would have no effect.

Amendment No. 104AC seeks to change the wording of Clause 91(2) from:

“A committee or sub-committee may include non-members (provided that it includes at least one member)”,

to, “A committee or sub-committee may include non-members (provided that it shall not be quorate unless a majority of those present are members)”. The regulator has the power to set up committees and sub-committees. It can delegate authority over those committees to a member or an employee to exercise a function, and it needs to be able to do this for the committee to function.

Clause 89(1) permits the regulator to determine its own procedure, including provision for a quorum. The effect of the amendment would be that more than half the persons present on every committee and sub-committee would have to be members of the regulator—that is, they must be on the board—or they cannot legally take decisions. We take the view that there should be representation from the membership on each and every committee and sub-committee. That makes sense and ensures co-ordination and communication. It is a safeguard to ensure that there is awareness of the board’s policies on each committee. However, to have a majority of members is simply not practical and decreases the flexibility and, ultimately, the inclusiveness of the regulator’s work. Those are our reasons for opposing these amendments.

The noble Baroness referred to an amendment that she did not move. I shall break with convention and refer to it. As regards the user panel, we already have measures in place to ensure that tenants are involved through tenant members of the board. As I explained, we seek to recruit those who might be involved in a sub-committee of the type envisaged. The National Tenant Voice will engage frequently at a high level with the regulator. The user panel point is already covered. I hope that the noble Viscount will feel able to withdraw the amendment.

Before the noble Viscount replies, I thank the noble Lord for those comments. As regards the misbehaviour point, my experience may be out of date but had the term been “misconduct” rather than “misbehaviour” I would have better understood it. “Misconduct” implies something rather more serious than “misbehaviour”, which is a rather broader term. However, “misbehaviour” may be coming into common use in this context.

I am impressed by the interest this group of amendments has aroused. I thank everybody who has taken part in the debate. I particularly thank the Minister for his comprehensive reply. We are interested in precedents, and were reminded of them. If we look at the predecessor Bills and how the constitution and governance were set out, we see that it was rather sharper than in these clauses. Perhaps that is why interest has been aroused. On this occasion Ministers are not shy about putting forward government amendments. I hope to find a little more tidying up, if I may put it that way, between now and Third Reading.

On the point of substance, nobody could possibly object to the one-plus-seven balanced-board approach to the board of the regulator. I do not think that was what we were worried about; we were worried about the minimum of three. I told a story about government appointments advisedly because a Minister has often asked somebody in the department, “Aren’t we getting rather short of board members on such and such a body?” The reply comes, “I wouldn’t worry Minister, we’re allowed to go down to three”. Therefore, the numbers in the Bill are important and it would never be a good idea to get down to three.

The noble Baroness, Lady Hamwee, talked about “permits” instead of “directs”. I have a lot of sympathy with that. “Directs” has a technical meaning in Acts of Parliament and people must comply with it. While it can be acceptable when it is in the hands of Secretaries of State, it is not so good when it is in the hands of bodies which are not democratically elected.

I thought that I had dealt with the “all at once” point. In the case of a new body you have to try to find a way forward which does not mean that everybody goes at once. If you are recruiting in part from predecessor bodies and recruiting over a certain period of time, also in part, there is no reason to suppose that everyone would have to go all at once. It is a very simple administrative matter to put that right. I am tempted to remind the noble Baroness, Lady Dean, that she and I, on a particular day, resigned from a board together. It was a long time ago.

Finally, on Clause 84(4)(e) and misbehaviour, I cannot help thinking that if I were a lot younger I might organise myself onto this board and misbehave. Since my appointment cannot exceed five years, I could probably get that going in about six months. Then I would go to judicial review and see how much I could extract. In all seriousness, Clause 84(4)(e) is a complete hostage to fortune. Frankly, as drafted, it will not do.

This is a serious point and I know that I am being tedious today. On declaration of interest and the regulator directing that someone should not withdraw, am I right in understanding that the regulator would do that through the board? I suppose that there could be a scheme of delegation, which would enable either the chair or the chief executive to give the direction. But is it anticipated that the board would vote, so that this would be by a majority? If so, does the person who has the conflict of interest in question vote, withdraw from the vote or what?

I will write on this important point. It is, I think, somewhere in Clause 81. It is a matter of procedure. We will set it out for the noble Baroness so that it is transparent and we will share it with others.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 101A to 101C not moved.]

Clause 83 agreed to.

Clause 84 [Tenure]:

[Amendments Nos. 102 to 102ZC not moved.]

Clause 84 agreed to.

Clauses 85 and 86 agreed to.

Clause 87 [Consequential amendments]:

On Question, Whether Clause 87 shall stand part of the Bill?

Before I address whether Clause 87 should stand part of the Bill, I should say that, since we are expecting a vote, it is permissible to start a long group even though we will not finish it. We can legitimately stop wherever we are and resume on Monday. Once the vote is called, with the permission of the Deputy Chairman, we will conclude the Committee proceedings. That makes perfect sense in the circumstances. I know that Members of the Committee who have been waiting to speak will have to come back on Monday. I am sorry, but we are the victim of circumstances.

What Members of the Committee see on the Marshalled List is not a misprint. My move to withdraw this clause is my attempt to shorten the process. But this does not shorten the process because we are tabling Amendment No. 112C, which will put the provisions of this and other clauses into a new schedule. I hope that the Committee will allow me to do that.

Clause 87 negatived.

Clause 88 [Fundamental objectives]:

102ZD: Clause 88, page 40, line 17, leave out subsection (1) and insert—

“(1) The regulator shall perform its functions in a manner which—

(a) minimises interference,(b) is proportionate, consistent, transparent and accountable,(c) complies with any duty of the regulator under section 22 of the Legislative and Regulatory Reform Act 2006 (c. 51) (code of practice), and(d) seeks to achieve the following objectives as far as possible.”

The noble Earl said: The group of amendments to which I shall speak is headed by Amendment No. 102ZD, which is tabled in my name and those of four other noble Lords. Clause 88 sets out 10 objectives for the regulator and states that,

“the regulator shall balance them as it thinks appropriate”.

Objectives 1 to 9 include encouraging a supply of well managed social housing; ensuring protection and choice for tenants; tenant involvement in management; efficient, economical and properly managed providers that contribute to their local areas; and encouraging investment in social housing without burdening or misusing public funds. These objectives are all excellent, but they show what the regulator is expected to achieve.

However:

“Objective 10 is to regulate in a manner which … minimises interference, and … is proportionate, consistent, transparent and accountable”.

We believe that this objective is fundamentally different because it is not about the aims of the regulator but about how the regulator has to proceed and the manner in which it proceeds when seeking to achieve objectives 1 to 9. It is not in itself an objective. I suggest that the regulator should always operate in a manner that minimises interference and is proportionate, consistent, transparent and accountable in all the objectives it undertakes and in pursuing all its objectives 1 to 9. The regulator should not have to balance that against the other nine objectives as required in subsection (13). That is why we have tabled Amendment No. 102ZD and its consequential amendment, Amendment No. 103C, which ensure that the obligation of proportionality applies to the way that the regulator pursues all its objectives.

Amendment No. 103ZA is also in this group. It places an onus on the regulator to ensure that tenants have adequate information about the standard of their housing services. It would ensure that under objective 2 actual or potential tenants of social housing would have an appropriate degree of information about the management of their homes. That is essential if they are to have effective choice and be able to take part in management. As Professor Cave stated in his report, empowerment requires information. He reported that the Tenant Involvement Commission found that:

“Awareness of how housing associations perform is very low … Few tenants know how to find out how their association performs compared to others”.

Tenants need information, but there is nothing in the regulator’s objectives that imposes an obligation on providers to provide that information. This amendment places an onus on the regulator to ensure that the information provided is directly relevant to the tenants and is adequate for them to make choices and be involved with the management without at the same time placing an undue burden on the provider. This information must be available for comparison at a local level.

The Cave review accepted that providing local comparative information may be problematic for landlords who operate across many local authority areas. Professor Cave said that the regulator should play a key role in ensuring that the core information requirement is manageable and consistent across all areas. The optimum level at which information should be provided is for housing within a local authority area. That would enable tenants to make like-for-like comparisons. It would provide them with the material they need to consider whether their homes could be better run by another provider in the same area.

The next amendment is Amendment No. 103E, which is given a definition by Amendment No. 104ZA. It would ensure a level playing field for the public, private and third sector providers of social housing property and services. Those involved in the provision of such housing fear that some types of provider will have an unfair advantage because the rules do not apply to all types of providers. An explicit requirement on the regulator to promote competitive neutrality would help to prevent the development of disadvantage in the regulatory framework as well as help to eliminate barriers to developing a more effective market in housing services. That would have the effect of empowering tenants and enable a lessening of regulation over time.

I know that other amendments are grouped with mine and I want to give other Members of the Committee a chance to speak to them. I beg to move.

Amendments Nos. 102A and 108A are in my name, and I shall speak to them briefly. Amendment No. 102A would ensure that it is Oftenant’s fundamental objective to supply inclusive housing in its supply of social housing. Social inclusion has been an important objective of government policy but it needs to be future proofed. Amendment No. 108A would give Oftenant an explicit duty to set standards for registered providers in relation to the accessibility of the accommodation, facilities and services that they provide.

The Housing Corporation has design standards for new homes and this amendment, which has been sponsored by RADAR, Habinteg Housing Association and Care and Repair, proposes that the new social housing regulator should set standards for housing and the wider built environment and infrastructure as an important component of the Government’s goal of building inclusive communities.

I quote from the debate on this amendment in the other place in which Sir George Young states:

“By an inclusive community, I mean something broader than accessible housing. I mean homes and infrastructure that are planned and delivered to empower disabled people and other groups to get out and about … It means accessible and integrated transport, ensuring that facilities are located in places that everyone can reach easily and cheaply and that people in sheltered and supported accommodation can play a full role in a properly mixed community. The Disability Rights Commission has provided some invaluable guidance for planners and housing professionals on what it thinks should be factored into the planning of such communities”.—[Official Report, Commons, Housing and Regeneration Committee. 10/1/08; col. 183-4.]

I apologise that I could not be here when the HCA’s responsibility for accessible housing was discussed. My noble friend showed a deep understanding of the need to ensure that housing and the community infrastructure are capable of meeting the changing needs of the whole population, and that disabled people are not defined as a ghetto group to be dealt with separately. We are all liable to need accessible facilities at some time in our lives. I hope that she will respond accordingly to these two amendments.

I shall probably be the one who has to stop mid-sentence.

I have a good deal of sympathy with the noble Earl’s Amendment No. 102ZD. I have read the assurances given throughout the debate in the Commons about the importance of objective 10. I do not think that anyone is quarrelling with that in itself but it just feels uncomfortable. I had difficulty articulating my problem with it but thought this morning that that is perhaps because objective 10 is how things are done, not what is done. That is why it is absolutely right that proportionality—I will use that word to encompass everything—should apply, but it is an overarching approach that applies to all the objectives. That is why it feels uncomfortable. When I first read the noble Earl’s amendment, I was not sure about paragraph (d), which seeks to achieve,

“the … objectives as far as possible”.

I then realised that it is already in Clause 88(1), so I cannot take issue with it.

We very much support the amendments of the noble Baroness, Lady Wilkins. I made that point when we discussed similar issues in the context of the HCA. I hope the answer will be that that is all wrapped up in objective 1, which deals with,

“housing, of appropriate quality, sufficient to meet reasonable demands”.

I read “demands” as a range of demands for different types of housing. This is not simply a numbers matter. It may well be picked up. I am sure that that is intended.

My amendments are minnows compared with those. Amendment No. 102B is the same amendment which the noble Earl moved in a different place, and is about information for tenants. I confess that I do not really know why I tabled Amendment No. 102C, as it is in objective 3. I do not know why I wanted it in objective 2. Perhaps that was the point at which I fell asleep. Amendment No. 103D is another way of probing whether objective 10 is overarching and applies to the whole package, as I understand it to be from what has been said.

Amendment No. 104ZA seeks to encourage the Minister and her colleagues to look carefully at how the large amount of money which they are about to invest in housing can be used as a trigger to encourage social innovation. The housing association movement was begun by social entrepreneurs of their day, who used their independence from the state to begin to pioneer new and innovative ways of creating social housing. The capital development programme has often been used as a mechanism for stimulating new and innovative approaches to social problems.

At Second Reading, I referred to my work more than 25 years ago at the Kaleidoscope Project in Kingston-upon-Thames, where, alongside the hostel accommodation that we built for young people with drug-related problems, we pioneered new ways of working with people in this hard-to-reach group. We developed and ran for many years an all-night club that ran one of the first night-time walk-in surgeries for people with drug-related problems in the country. We also developed educational programmes, and provided a nursery for children of addicts and a church-based community setting in which people could rebuild their lives. The hostel accommodation, which was subject to regulation by the Housing Corporation, gave us the freedom to pioneer new ways of working with this hard-to-reach group.

Until the 1980s, the first duty of the Housing Corporation was to promote housing associations. Only in recent years has it moved from promoting new ways of working to regulating and controlling. The Bill takes this logic to its next logical stage, and even now not only gives powers to the Secretary of State to regulate the first-line service to tenants—housing and the protection of public investment, which I agree with—but gives the regulator powers to control social innovation.

The amendment seeks to encourage housing associations to continue to use—

I am so sorry to interrupt the noble Lord but the Division Bell has sounded. I suggest that the House adjourns until Monday 16 June, when we will resume Committee.