George Young (North West Hampshire, Conservative)

I think that clause 40 is the first part of the Bill where the regulator of social housing is mentioned. We will have a much more substantive discussion about his role later on. This is rather like Beethoven’s opera, “Fidelio”, in which the hero does not appear until the second act. However, can the Minister, who has announced the chief executive of the HCA, say anything about who the regulator is? Has he been announced? If not, how far have the Government got in the process of appointing him?

The clause states that the HCA must co-operate with the regulator. At present, the regulator and the investor share the same building. Is it envisaged that the HCA and the regulator will be co-located, or that they will be separately accommodated? Furthermore, will the Minister shed some light on clause 40(2), which states that

“the HCA must consult the regulator on matters likely to interest the regulator.”?

What does that mean? We are imposing a statutory duty on the HCA, and in fairness to it we should shed some light on what information it will be legally obliged to pass on to the regulator.

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

The process of appointing the regulator is ongoing, but when we come to part 2 of the Bill, I might be able to update the Committee on progress. As for co-location of the agency and the regulator, that is an operational decision, but we do not intend that there should be a physical separation as well as an organisational separation.

The right hon. Gentleman’s third line of questioning was about the circumstances in which there would be co-operation between the regulator and the agency. That is crucial, because, as he rightly said, we have previously had a merging of the regulatory and investment functions. The regulator will be concerned to see that registered providers are responsive to tenants and that their businesses remain viable, because that will help to raise standards for tenants. Crucially, it will need to understand the stresses of business, particularly the ability to borrow money.

As the investing body, the agency will be also be interested in the ability to borrow money, and will need to have an understanding of such matters when making investment decisions. It would be sensible for the agency to consult the regulator when developing its investment policies to understand the overall ability of registered providers to deliver. It is in everyone’s interests to ensure that the capacity and delivery capability of the sector is advanced as much as possible. In short, a close dialogue will be needed, while the regulator should maintain a clear independence, as has been set out and universally acknowledged. I hope that reassures the right hon. Gentleman.

George Young (North West Hampshire, Conservative)

Does the Minister propose to codify or clarify exactly what the relationship between those two organisations should be? At the moment, the measure says simply “must consult”, and the Minister has been good enough to outline the sort of information that ought to be exchanged. Should not that be formalised in some way, so that both partners in the new relationship know exactly what they are obliged to tell the other about?

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

Yes, the right hon. Gentleman makes a good point. We anticipate that there will be a memorandum of understanding between the agency and the regulator to codify such issues as much as possible. I hope that reassures him.