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My Lords, I beg to move that the Bill be now further considered on Report.
moved Amendment No. 89:
Clause 69, page 34, line 19, at end insert—
"(3A) The Secretary of State may by order make further provision in respect of a function transferred under this section (which may, in particular, include provision for the function to cease to be exercisable)."
On Question, amendment agreed to.
Clause 72 [Low cost home ownership]:
[Amendment No. 90 not moved.]
Clause 81 [English bodies]:
My Lords, noble Lords who were here at 10.10 pm on Monday will recall that this amendment was reached but, regrettably, I could not move it. If I had been called, my speech would have been curtailed; now I have the whole day. I do not intend to take the whole day, but I am grateful for this opportunity. I shall also speak to the related amendments in this group.
I remind the Minister of what her colleague said when I moved a comparable amendment in Committee. I said at the end of my speech:
"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 naïve 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".—[Official Report, 11/6/08; col. GC 221.]
We are talking about community land trusts. At Second Reading, I said that it was an idea whose time had come. I do not intend to reiterate all the arguments, but I am sure that the House will be pleased to be reminded of the genesis of the amendment. The idea is that people living and working in a community—those who have its interests at heart—should be able to do something about the problem. I can do no better than to quote Amendment No. 150, which states:
"the primary purpose of the organisation is to hold land and other assets so as to promote the social, economic and environmental sustainability of a specified local geographic community through providing or facilitating the provision of affordable or other sub-market housing or other community-based facilities and services (or both) ... it is an inclusive organisation, committed to enabling those who live or work (or both), or need to live or work (or both), in the community it is established to serve to benefit from the land or other assets it holds, without discrimination on grounds of race, religion, age, sex, disability, sexuality or any other matter that is not relevant to its work".
Yesterday afternoon, I had the pleasure of attending a meeting about ALMOs. The Minister, Caroline Flint, who was there, and I—and others—gloried in the fact that we now have a greater range of options than we did in the days when I was more directly active in housing.
The Minister said that an earlier amendment had support across the whole House—that it was what the House wanted and enjoyed a high degree of consensus. I remind the Minister, without labouring the point too strongly, that those words could also apply to this amendment. All parties and the whole House, including the noble Lord, Lord Best, who I see is in his place, would like the Minister to do something.
What would the amendments require? The Housing Corporation was given the task of inviting a working party, centred on the University of Salford, to examine the feasibility of the community land trust nexus. It said that that was first class, that it has merit and is viable and practical but that there is a difficulty; that is, that there is no definition of a community land trust.
When you invite people—the House, the Government, the country—to invest money, time and land, they are entitled to know exactly what they are subscribing to. Friends tell me that there is life in a number of major towns and villages throughout the land and that they are able to go forward. I remember noble Lords opposite pointing out that they knew of individuals who were willing to donate land or negotiate the sale of land at below market value to establish a community land trust. There is no doubting the fact that the availability and cost of land is crippling. I hope that committees or groups in any community will see merit in this. The land will remain perpetually in the ownership of the trust; in other words, once houses have been built on it, it will not be possible to cede the land to someone else. That is the idea. I hope that the Minister will not tell us that the practical difficulties of even conceiving a definition is beyond the wit of those whom I call the clever people, the brainy and experienced people, in her department; they should be able to come up with a form of words—they may not be precisely the words that I would use—to enable us to go forward. We might have to wait 12 months or longer for another opportunity; the Bill gives us an opportunity. I remember that the noble Lord, Lord Dixon-Smith, when speaking to another amendment, said that a bird in the hand was worth two in the bush.
The Minister has been very generous and fair with her time because she has agreed to take away more than one amendment and to come back, I hope, at Third Reading with an acceptable form of words. That is all I am asking her to do today: to take away my amendment, discuss it with her colleagues and those who work on the ground in this matter, and to come back. I am not wedded to the wording of the amendment. It was given to me by David Rodgers, the director of CDS Co-operative Housing Society Ltd, who is a friend of mine. He believes that this form of words is suitable, but that may not be the case.
I am optimistic. I believe that this is a credit to the Government. It is not a partisan or party matter; in practical terms, it would add to the range of matters and opportunities currently before the Government and the Minister. I beg to move.
My Lords, I supported the amendments relating to community land trusts at the previous stage and I continue to do so. Therefore, I am very glad that the noble Lord has tabled his amendments today. I hope he will understand that what I say next is an expression of the affection in which the whole House holds him. It is wonderfully disingenuous of him to say, "All I'm doing is asking the Government to take the amendment away and draft it for me". That is very skilful and it shows the noble Lord's years of experience. I hope that the Government will do exactly that.
My Lords, the noble Lord, Lord Graham, is absolutely right. In Grand Committee, this proposal was supported by every speaker in the debate. It is perfectly true to say that there would not be a complete inhibition on this type of development. There is no formal definition of community land trusts, but the ones that go forward do so by private arrangement without the absolute certainty of legislative backing. Although, in principle, that is a method of development that I thoroughly approve of and support, in this instance if something along the lines of this amendment could be put on the statute book, it would help a movement which, in turn, would very often help smaller communities where, among other things, as we have argued from this side, there is currently a social housing deficit. This is a very worthwhile move and I hope that the Government have their sympathetic boots on this afternoon.
My Lords, the good news is that we do have sympathetic ears this afternoon. We have listened carefully to the views of my noble, and very venerable, friend Lord Graham on this, and we recognise the strength of the argument that has been put forward in favour of including in the legislation a definition of a community land trust.
I should be honest and say at the outset that, although we have been committed to helping the development of community land trusts, we would have preferred our consultation to reach the point where the way that we addressed the issues raised by my noble friend could be better finessed. That is also the case in relation to the legal definition. That said, we want to respond to the powerfully expressed will of noble Lords in Grand Committee and meet their concerns. Over the next few days, I should like to consider the options for putting a definition of community land trusts in Part 2 of the Bill. I give an absolute promise this afternoon that we will bring back an amendment at Third Reading that satisfies my noble friend.
We have said all the way through that we recognise the importance of consulting interested parties on community land trust definitions. Of course, there will still be an opportunity for consultation with stakeholders and for considering the detail when the regulator sets the relevant criteria under Clause 113, which concerns eligibility for registration. I assure the House that we are working closely with the community land trust movement to agree a suitable definition for our amendment. I hope that that demonstrates our support and commitment to everyone's satisfaction. I thought I had made that pretty plain in Grand Committee; that was certainly what I thought I said. I am more than happy to make the concession this afternoon and hope that the House will accept our good offer to bring something back at Third Reading next week.
My Lords, I am deeply grateful to the Minister and his colleagues. Without the opportunity taken today, we would not be looking at what is possible this year; it could have been next year. I remind the Minister that the Housing Corporation saw fit to ask an eminent body to consult and bring forward its ideas, which it did. The Minister might believe that a wider consultation might have produced a better answer, I do not know, but it would be churlish of me not to say to the Minister that what he has done this afternoon is as much as he could possibly do. I look forward to looking at the amendment. I am sure that he and his colleagues are consulting a number of people on the precise wording. I am satisfied that the net product of their work will be acceptable to the House. I repeat that I am grateful to the Minister and his colleagues for having responded to the overwhelming view of all Benches of the House. I beg leave to withdraw the amendment.
moved Amendment No. 92:
After Clause 82, insert the following new Clause—
"Provision of social housing to be a function of a public nature
Provision of social housing under this Part shall be deemed to be a function of a public nature for the purposes of section 6 of the Human Rights Act 1998 (c. 42) (acts of public authorities)."
My Lords, in moving this amendment, I hope that I am a quarter as successful as the noble Lord, Lord Graham of Edmonton. This is our old friend YL again; in other words, should a housing authority be regarded as a public authority for the purposes of the Human Rights Act? In Grand Committee, the Minister said that housing associations are not and should not be regarded as such, except where ASBOs are to be given. However, it is interesting that Mr Straw said exactly the opposite in March 2000, before the concept of ASBOs was even thought of. Furthermore, in the Weaver case, the administrative court found that housing associations should be regarded as public bodies under the Human Rights Act. I think that all I have to do is to make those three statements and point out with crystal clarity that there is one hell of a muddle on this. Please can the Minister sort it out? I beg to move.
My Lords, I am very sorry to disappoint the noble Earl. Would that it had been as relatively simple to deal with this matter as it was to satisfy my noble friend. This is an important amendment that raises very complex issues. I am glad that we can have another go at it because the noble Earl has raised a couple of additional points that I am happy to address in my response.
The amendment makes the ownership or management of social housing a public function for the purposes of Section 6 of the Human Rights Act, as proposed by the JCHR. As I said in Committee, we welcome the Joint Committee's interest in this important matter, although we cannot agree with its recommendation. I hope I can persuasively explain why.
I made it clear that there is no logical tradition that suggests that the provision of accommodation at below the market rate is by nature a public function. In Committee, I referred to the long history of social housing provided by the charitable and commercial sectors, which are largely privately funded. I think the noble Earl sort of agreed with me that social housing is not a public service that has recently been privatised, but is a regulated voluntary activity in which local authorities have become involved. I also made it clear that we were very concerned by the potential consequences of the amendment because of the risks and costs on the RSL sector, which includes many very small charitable organisations—more than 1,000 of them—that could face the possibility of more legal challenges in their day-to-day decisions. The Government do not subsidise the management of social housing by RSLs so the costs, which the JCHR reasonably did not assess, may need to be met by higher rents. I cannot impose extra burdens on the sector without full and proper consideration.
The bigger risk is that reclassification of social housing as public housing would mean that the RSLs' ability to borrow to provide new social homes and refurbish stock would be very constrained and £35 billion would be added to the public balance sheet. That is money that funds affordable homes for ordinary people. No matter how low that risk would be, the consequences for our ability as a country to provide the affordable homes so badly needed mean that we cannot take the chance that that might happen.
The noble Earl mentioned the recent case of Weaver v London & Quadrant. As he knows, the opinion of the presiding judge in the case was that social housing provision was a public function for the purposes of the Human Rights Act. Obviously, we are looking at that decision and its implications carefully. I want to make just two comments on the case. First, the judgment appears to have been finely balanced. The judgment of Lord Justice Richards states:
"I have not found this an altogether easy issue to resolve. The difficulty of drawing the dividing line between public and private functions in the context of s.6 of the Human Rights Act 1998 is illustrated by the differences of judicial view in previous cases".
That is absolutely right. Secondly, I understand that the housing association involved in the case may appeal.
As I said in Committee, we are of the view that social housing provision is not and should not be considered a public function, whether for human rights or any other purposes, but we recognise that there may well be different opinions on the issue and we feel that we need a careful consideration of the arguments raised in the case. The noble Earl asked: will I sort it out? As part of the Government's response in 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 are still fervently of the view that that is the best possible route for taking forward the broader question of what should and should not be considered subject to the Human Rights Act. That is where we rest our case at the moment.
My right honourable friend Mr Straw actually said that if you are a private authority carrying out a public function, that function is covered by the HRA. I have just said that that is right. He also mentioned housing associations as bodies which, he speculates, might do things including some public function. He said nothing about what functions they do that are public; he certainly did not say that social housing management is a public function.
It is a complex area; it is very easy to read things into a statement that were not intended. It was some years ago that my right honourable friend made that point; I cannot believe that he envisaged that the Act would turn private functions into public ones, as the noble Earl proposes in his amendment. Perhaps he meant that sometimes housing associations take on other public functions; for example, Group 4 in providing prison services, or contracting with the local authority. In any case, the Government's view in 2000, when Mr Straw made that statement, was that social housing provision was not a public function. Our view is the same now.
I am sorry to disappoint the noble Earl, but we have had a serious engagement in two stages and I hope that he will consent to withdraw his amendment.
My Lords, I never thought that I would be able to say this—it is a totally joyous thing to be able to do—because I never thought that I could confuse the noble Baroness with the Byzantine Archimandrite. She is making one of those wonderful Byzantine arguments about the number of angels who can dance on the head of a pin. As I understand it, Mr Straw said something that is now inconvenient and someone is trying, perfectly reasonably—if I had ever been entrusted with government business, which, thank goodness, I have not, I would probably be making exactly the same effort—to bat the ball away, but that did not stop it sounding slightly hollow. I accept that the Government cannot accept the amendment as it is, but I am trying to ensure that the problem is seriously and urgently addressed because it goes wider than the Bill; it goes to the YL and Weaver cases, as well as to what Mr Straw said. There is a lacuna somewhere, a muddle, and it needs to be sorted out. With that, I beg leave to withdraw the amendment.
My Lords, the amendments in this group follow the amendments tabled in Committee. The Homes and Communities Agency's principal power is wide-reaching, and its objectives include supporting in other ways the creation, regeneration, development or continued well-being of communities in England, with a view to meeting the needs of people living in England.
The precautionary measures proposed in the amendments are intended to address the risk of leukaemia in children, rather than any known or future risk to older people. The current scientific evidence seems to suggest an increased vulnerability in children as a result of prolonged electromagnetic field exposure. Perhaps more broadly, this signals the need for the Secretary of State to be aware of emerging risks and to be able to issue guidance that deals with public health generally in planning matters.
A social housing regulator is to be established to carry out the objectives in Clause 88, thereby regulating the provision of social housing and ensuring that good quality housing is available. The amendment aims to protect children from risks to public health arising from electromagnetic fields. It would have an impact only on the HCA's powers to provide social housing intended for occupation by families with children and related developments such as schools, nurseries and play areas.
Amendment No. 94A is a very general amendment. Its intention is to provide scope to enable the regulator's objectives to be widened, if necessary, to encompass measures that the Government may bring forward in the future, such as any recommendations from the Health Protection Agency. It would avoid the need for future primary legislation to amend the regulator's objectives.
Amendments Nos. 119A and 119B, which would amend Clause 191, would give the regulator scope to restrict the building of social housing within 60 metres of overhead transmission lines, thereby partly implementing the recommendation of the cross- party inquiry on the issue. There have also been recommendations to reduce electromagnetic fields in homes from household wiring and appliances. One proposed subsection would give the regulator powers to set standards for social housing. Another proposed subsection would allow the regulator to specify that housing intended for occupation by families with children should be located away from sources of electromagnetic fields, although there would be no obligation on the regulator to do so. Yet another proposed subsection would distinguish between housing that will be occupied by children, and housing, such as retirement homes, that will be occupied by older people, thereby lessening the impact of the amendment on development prospects.
The last amendment in the group, Amendment No. 151A, defines "overhead transmission line". I hope that the Government will see the wisdom of introducing a precautionary principle, as research reveals significant risks. The clusters of childhood leukaemia that have recently emerged in the face of a high index of suspicion for many years suggests that there will be further findings as case numbers increase for different conditions.
I expect—indeed, I am pretty certain—that the Government will not feel able to accept the amendments, but I hope they will see that the statutory guidance should incorporate some precautionary principle into planning, so that during planning there is an assessment of risks in the light of the scientific evidence of the day. To ignore emerging science would be irresponsible. It would be dangerous to allow short-term financial expediency to override long-term considerations of the health of the next generation. I beg to move.
My Lords, I support my noble friend Lady Finlay, who is much more expert than I ever could be in matters of medicine and science, and cancer and child leukaemia. In Committee, I mentioned that I was responsible for negotiating the undergrounding of a stretch of overhead cables with an electricity generator. From that experience, I discovered quite a few things. As a housing association, we were very unhappy at the thought that we would be developing underneath such wires. If the law meant that it would be impossible for us to develop underneath such wires, the value of the land that we would be acquiring would be correspondingly reduced, so we would have paid less for the site. As it was, the wires went underground and we were able to develop on more of the green land on top, an option that will always be open to people.
At a time when housebuilders are quite desperate to make the profits that they have made in the past, but which have become extremely difficult to make today, it is important for building regulations or planning requirements to make clear that development cannot happen under these wires. They may take actions today that they would not have taken in the past. Equally, with the housing shortage as acute as it is, people—consumers, buyers or tenants—may take unwise risks. It would be much better for the regulations to be clear. With the risks that the science appears to suggest, it would be much better if there was a prohibition on building beneath these wires and options for doing other things, such as undergrounding cables or leaving a green wedge, which are reflected in the price.
Whether that should be in this Bill, I leave to others to decide. It sounds more like a planning matter or, possibly, a building regulations issue. In this context, it would apply only to the social housing for which the regulator has responsibility, but I should like it to apply to all housebuilders. I very much support the sentiment behind the amendment.
My Lords, I should like to express some sympathy with this amendment. On looking at the history of our development over the past 50 years, we have seen increasing scientific sophistication, increasing capacity to measure the adverse effects of developments that have taken place historically and increasing knowledge of the side effects of some of those things. We see it across many fields and there are many things that we do not do today that were considered to be perfectly normal 50 years ago, and sometimes not even as long ago as that.
The noble Baroness is not asking that development should be prevented, but that, in social housing, particular tenants should not be moved into particular properties in particular locations, which is slightly different. I do not think that I have misunderstood her. We are not aiming to inhibit development in toto. We are saying that this housing, which may be perfectly acceptable for middle-aged adults and even the elderly, should not be used to house young people. That is a much more refined request than the idea that the proposal might be to inhibit development altogether, which is an important factor. If there is a serious risk of an effect on our young people, we should be concerned about that.
My Lords, as always, I admire the way in which the noble Baroness, Lady Finlay, marshals the evidence and makes the case. This is a serious issue, and the contributions from the noble Lords, Lord Best and Lord Dixon-Smith, were very thoughtful. We discussed this in Committee. I know that the noble Baroness is keen to see action from the Government on this matter. She correctly anticipated what I have to say, but that does not mean that I have not listened very hard to noble Lords. The noble Lord, Lord Best, said that this is not the right Bill, but let me answer the points raised by explaining what we are thinking of doing in the future.
This group of amendments would place various duties and requirements on the regulator which relate to reducing exposure to extremely low frequency electric and magnetic fields—I shall use the shorthand of ELF EMF. Amendments Nos. 92A and 94A relate to the fundamental objectives of the regulator. Amendment No. 92A specifies that pursuit of the regulator's objective to ensure tenants an appropriate degree of protection includes protecting them from any risk arising from exposure to ELF EMF, whilst Amendment No. 94A would allow the Secretary of State to add to the regulator's objectives.
As I have said many times in the course of the Bill, the objectives are high level and guide the regulator's behaviour; they are not designed to refer to such specific issues. The regulator has no authority over where homes are sited. Its role is to ensure good management of existing homes, wherever they are. Amendment No. 94A would give the Secretary of State the power to micromanage the regulator, giving it new tasks and changing its focus whenever she liked. That is inconsistent with the Cave review, which proposed that the regulator should be as independent as possible. We have given the regulator 10 high-level objectives which it must balance in performing its functions, and we do not want to add to those.
As I have said, the regulator has no control over where homes are sited. Therefore I cannot accept Amendment No. 119B, which would grant the regulator power to set standards to include the distance from overhead transmission lines that housing must be built, the levels of ELF EMF permitted within housing and the locations of housing intended for occupation by families and children. The regulator will not issue standards on such matters.
The noble Baroness and the noble Lords who have spoken are driving much deeper than the detail of the amendments. As I did in Committee, I can reassure the noble Baroness that the Government take this issue very seriously. There are already guidelines in place in this country to protect people from exposure to ELF EMF which are based on the established effects of exposure to these fields. In addition, we are currently considering the need for additional practical precautionary measures to reduce exposure to ELF EMF. In another place, my honourable friend Iain Wright will be taking forward discussions with Ministers in relevant government departments to inform the Government's policy on this issue. We will not be in a position to set that out until later this year. I will ensure that the noble Baroness is fully informed of those discussions—she may like to share in them—with the relevant Ministers. I have listened closely to what she said about the way she thinks we should go forward and I will ensure that that is also put within reach of the Minister.
Any measures which are appropriate to limit the exposure of the public to ELF EMF should apply at the national level. It is not appropriate to place individual responsibilities and duties on the regulator, as it would be subject to the same statutory control and regulatory frameworks or guidance concerning exposure to ELF EMF as any other body.
That rounds off the argument. I hope that, with those assurances, the noble Baroness will understand that the Government are alive to and concerned about the issue she raises.
My Lords, I am grateful to the Minister for her reply and to the Government for their sympathetic understanding of the need for a precautionary approach and that the size of the precaution must be proportionate to the size of the risk. I accept the Minister's arguments as to why these amendments are not appropriate. I am grateful for the support of the noble Lords, Lord Best and Lord Dixon-Smith, and I hope the Minister will also keep them informed of discussions on this matter. I beg leave to withdraw the amendment.
moved Amendment No. 93:
Clause 88, page 41, line 12, leave out subsections (11) and (12) and insert—
"( ) The regulator shall perform its functions in a manner which—
(a) minimises interference,(b) is proportionate, consistent, transparent and accountable, and(c) complies with any duty of the regulator under section 22 of the Legislative and Regulatory Reform Act 2006 (c. 51) (code of practice)."
My Lords, Amendment No. 93 was inspired by the National Housing Federation. It deals with the objectives of the regulator in Clause 88 and bears some similarity to my Amendment No. 102ZD, which was debated in Grand Committee. I have changed it slightly to take into account some concerns raised in Grand Committee, and I hope that the Minister will find the new amendment acceptable.
The point is to make clear how the regulator goes about meeting its objectives under this clause. The amendment simply replaces objective 10, because I do not think that, as the Bill is drafted, it is really an objective at all—it is the manner in which the other objectives are to be performed. My amendment just makes that point clear; it is nothing more sinister than that. Objectives 1 to 9 are all about what the regulator does. My amendment tells the regulator how it should operate.
Proportionality and minimising interference are very important. If the regulator follows those principles, we are much more likely to have a fair, efficient system. They should apply to all the objectives; they should not be seen as another objective that the regulator strives to achieve but must balance with nine others. It is not an either/or choice here; it is, as the noble Baroness, Lady Hamwee, said in Grand Committee,
"an overarching approach that applies to all the objectives".—[Official Report, 11/6/08; col. GC246.]
The Minister said in Grand Committee that she worried that Amendment No. 102ZD, as it was then, would send the wrong signal and that tenant confidence would suffer if she accepted it. My new amendment, as noble Lords can see, would be inserted towards the end of Clause 88. I have done that because I want to send a signal that the amendment is not to be seen as an attempt to water down or override objectives 1 to 9. I say again that my amendment is not another objective but instructions to the regulator on how best to perform. In Grand Committee, the Minister said that minimum interference is,
"of course, a working principle".—[Official Report, 16/6/08; col. GC307.]
I am sure she will agree with me when I suggest that if the working principles of minimal interference and proportionality are applied to how the regulator performs on all its objectives, along with consistency, transparency and accountability, then tenant confidence will in fact be boosted, not undermined. I beg to move.
My Lords, I did indeed express the concerns that the noble Earl has summarised. I think I said that I read objective 10 as being a how rather than a what, and I found it difficult to understand it in the context of the list of objectives. It was of a different type from the other objectives.
The noble Lord, Lord Graham of Edmonton, referred earlier today to the "brainy people". The Government have said so many times that this would give the wrong indication. They seem to say at one point that the objectives are not a list and not in order of importance, but they also say that moving this objective around would affect the importance. I am still confused by that, but there comes a point where one has to accept that the brainy people who draft legislation, which is a bit different from ordinary-speak, must know what they are doing, and the amateurs cannot interfere with it. I hope the Minister has some notes that will explain all these questions.
I have one question for the noble Earl about the last paragraph. He has taken me to task outside the Chamber for criticising his amendments, but I frame this as a straight question. Paragraph (c) refers to a duty; it does not matter where it comes, but if Section 22 of the Legislative and Regulatory Reform Act 2006 applies, why does that need saying? I was not quite sure why the noble Earl felt it necessary to spell this out because that Act will either apply or not and we do not need to repeat one piece of legislation in another. From the look on the noble Earl's face, I am not making myself entirely clear. I suppose my question boils down to why it is necessary to spell this out. Is the 2006 Act, and the way it deals with matters, not sufficient?
My Lords, I appreciate the way in which the noble Earl has tried ingeniously to come back with an amendment which he thinks we might accept. I hope it does not sound churlish of me to say that we still cannot accept it on a point of principle.
The amendment still prioritises its proposed objective over the other nine, which is a problem for us. Since the Committee stage, and since the noble Earl tabled his amendments, a statement by a coalition of interested stakeholders has drawn attention to their anxieties, which are exactly the same as those I expressed in Committee. They do it more authentically because they are going to be affected by this and involved in making it work. The National Consumer Council, tenants' organisations and the CIH argue that the amendment would undermine tenants' rights, send the wrong signal to tenants and tie the hands of the regulator. It is significant that they welcomed everything else the Government have done but have issued a red flag of warning regarding this amendment.
I am sure that the noble Earl has brought forward the amendment with total integrity, and the noble Baroness has returned to some of the arguments that took place in Committee. I do not have many new arguments, I am afraid, but I believe that those I have are sound. Objective 10 is not a drafting point; it is a deliberate decision to make the objective to minimise interference as important as all the others. Of course we want the regulator to proceed proportionately to minimise interference; we have said that throughout our proceedings and that must be in the culture and expectation of the way the regulator works.
The objective is included because it expresses the balance that we want to achieve between driving improvements among poor providers while minimising the regulatory burden for good providers. We are conscious that overburdening a regulatory system drives out good, and that is the last thing we want to do when we are trying to stimulate the market, not suppress it. Making this an objective does not diminish the fact that minimum interference is a working principle, as it is with other regulators, but demonstrates that the regulator should positively aim for it. I believe, as those very important stakeholders have said, that it would be wrong to require the regulator to start by asking how he intends to minimise interference by providers. His task is to start by asking how he will address and resolve the weak consumer position of tenants. That is his job. The amendment, albeit with the best of intentions, seems to send the wrong signal about what the Bill, the system and the regulator are trying to achieve, so I am afraid that I cannot accept it.
My Lords, I do not know whether the noble Earl intends to divide the House on this; I will go with the Government because there comes a point when one just has to accept what is being said. Can the noble Baroness explain why it is important to leave the objective in this place when subsection (13) states:
"The order in which the objectives are listed in this section is not significant"?
My Lords, that is indeed the case. We have not created a hierarchy of objectives, because they each have to be balanced against the rest. Objective 10 is part of achieving that balance of all the other things that we want the regulator to do.
My Lords, we have had a short but interesting debate. The noble Baroness, Lady Hamwee, asked about our new paragraph (c). It was cribbed straight from subsection (12) of the clause. The intention of our amendment was to change the Bill as little as possible, which is why we have included the paragraph.
At this and the previous stage, the Government have agreed to amendments from all sides of the House. That is welcome as I have no doubt that they will enhance the Bill. However, I am feeling a little left out. The Government in their wisdom have not agreed to any of my amendments on Report, neither a fair deal for rural areas nor the need for flood amendments. It therefore comes as little surprise that they will not accept this amendment—maybe it is just the way I tell 'em. However, if at first you do not succeed, try, try again, so I live in hope. Slightly crestfallen, I beg leave to withdraw the amendment.
My Lords, I shall say a few words also about Amendment No. 138A. Amendment No. 94 is in a sense timely. My right honourable friend the Secretary of State for Communities and Local Government has today made strong commitments to pass more power to tenants and provide effective redress systems for dissatisfied citizens. That points directly to the amendment and to concerns that some of us have about the Bill while welcoming in broad terms what it seeks to do.
Those concerns are, first, that the Bill essentially empowers the regulator, not tenants, and that tenants get influence and purchase only indirectly through the regulator. Secondly, it creates what some of us would see as a rather old-fashioned central-state model of regulation just when the all mighty central state is going out of fashion.
I go back to what Cave said that is directly relevant to this. First, he said,
"many of the activities necessary to achieve the regulatory objectives will be undertaken by regulated social housing providers rather than directly by the regulator".
He was wise. Secondly, he said,
"empowered tenants would play a key role in assessing performance and holding landlords to account for weaknesses in performance".
Where are we now in the Bill? It is clear that much progress has been made, through both the contributions of your Lordships' House and my noble friend's listening skills, which are as good as ever. Information for tenants on a cross-domain basis in a locality, so that they can compare the performance and value of services that they receive from their own social landlord with those of others, is to be welcomed. The question now is what they can do about it if they are dissatisfied.
Also to be welcomed is the system of tenant triggers, which allows tenants to ask the regulator to intervene. However, it is clear that they can be used only in pretty extreme situations for reasons of economy, and will therefore not be an effective mechanism for the regulator to become involved in the hundreds of thousands of areas of day-to-day dissatisfaction that will be generated by 4 million tenancies. Triggers are necessary, but they do not address the issues about which many tenants are concerned.
There is much to be welcomed, too, in a set of centrally determined standards, but many tenants locally may want something different from them. There will be greater tenant involvement in the regulatory system as a result of the changes that my noble friend the Minister has brought forward. That, again, is to be welcomed. But the argument behind this amendment is essentially that the regulator needs a guiding statutory duty to promote local choice and local complaint resolution. That is what the amendment says on the tin, and that is what it seeks to do.
Why so? At one level, it is a statement of the blindingly obvious, because it is axiomatic in all dispute resolution systems that you seek to get things resolved as early and as low in the system as possible. It is better in economy terms and better for the complainants. It is necessary to give it statutory enforcement because the regulator should expect that local resolution to problems is sought first and vigorously. I am sure that the Minister will broadly agree with that. But the regulator needs to expect social landlords to be very proactive indeed, more proactive than I would suggest has been the tradition to date in listening to tenants, hearing what they are dissatisfied about and working to change it, when they wish to have proper changes brought about, even though that may go against the short-term interests of the landlord and their traditions—but of course not against the duty of the landlord and regulator—to protect the asset and the debt that sits behind that. It is possible to have both.
In other words, if tenants want a different and better service and are prepared to pay more for it, and if they want a different manager, because they believe that the manager there has a local office and can provide a better service than their own manager here, there should be a duty on that RSL or other social landlord to explore this with them and open up options to them. The regulator should have a mindset that if the social landlord does not behave in this way, in vigorously exploring complaints and trying to resolve them at local level, and the complaint escalates unnecessarily to the regulator, it should be seen as poor practice. In other words, the regulator needs to incentivise social landlords to be very proactive in opening up choice options and resolving complaints or the wish for improvement by those tenants. Why so? Obviously it is there as the most efficient way in which to resolve complaints, but it is locally that tenants need to be empowered and have choice. It is only locally that most tenants will ever get empowered. If we do not open up empowerment at local level, most of this Bill will be a load of hot air—if we are not careful. The regulator needs to work over time to change the nature of supply relationships and choice at a local level, so that the regulator does not need to get involved. That has been almost the leitmotif of regulatory practice for at least the last decade.
I shall say no more about that; I shall say a few words, however, about Amendment No. 138A, which is in a similar domain to an amendment that I moved in Committee. My amendment tried to ensure that, when tenants were dissatisfied with the housing management service that their landlord provided, they could do something about it. I shall not go into detail about what the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, are saying, as that is for them to do, but I would hope that the Government would accept that, in the spirit of what the right honourable Member the Secretary of State has been saying today, there has to be an effective way. If tenants collectively in an area are dissatisfied with the service provided by their manager and want to go somewhere else, and it is not in a situation of gross negligence—clearly there is a power of intervention in such a situation, but that is not the normality—and think that they will get a better deal elsewhere, it should be axiomatic in this Bill that the regulator would seek to open up that sort of choice.
That is one means of achieving the aim; I offered another. The Minister will say that she does not like either of them, but what is her mechanism by which tenants can do this that does not involve gross negligence cases but deals with normal complaints? I have the greatest respect and affection for her, and naively wait in anticipation that I shall rejoice and be surprised and delighted today. I beg to move.
My Lords, I was interested to hear the arguments of the noble Lord, Lord Filkin. I would agree with him. We certainly agree that encouraging the resolution of disputes at a local level is sensible and preferable. It is far more efficient for everyone involved to resolve any differences without allowing them to escalate. Indeed, his amendment might also bring a change in culture to registered landlords.
I also have amendments in this group that deal with disputes. Amendments Nos. 118 and 119 were raised in Grand Committee. I brought them back not to be difficult, but because I feared that I did not express myself as clearly as I might have done and the Minister responded on a slightly different tack from the one that I was on. Amendment No. 118 is designed to allow procedures to be developed so that landlords have recourse against troublesome tenants. At present, the Bill is silent on that point. We should not be so simplistic as to imagine that big, bad landlords will always behave badly towards tenants; the landlord may occasionally have perfectly reasonable and legitimate complaints to make about a tenant. Although the amendment in no way diminishes the rights of tenants, it is sensible to recognise that complaints—we use the word "differences"—may go both ways. The amendment would be a simple way of recognising that.
Amendment No. 119 would remove "or control" from the relationships that tenants have with their management. I do not think that the phrase is appropriate. We do not give a company's shareholders control over the day-to-day management functions, as that is the job of the management team. However, if the shareholders—or, in the case of the Bill, the tenants—are unhappy with the management, there should be clear but quite separate mechanisms for dealing with the problem. There is a clear difference. I am concerned that by including the words "or control" in Clause 191, the Bill is muddying the waters.
I now move to Amendments Nos. 136, 137A and 138A, to which the noble Lord, Lord Filkin, referred. These amendments are a set, with each one explaining the one before. The Bill makes no clear provision for tenants to apply to the regulator for a change of manager or transfer of some management functions. It does make clear provision for the regulator to force a change of manager or to put the service out to tender, but not for that initiative to come from the tenants. Tenants should be able to initiate change. That principle is fundamental to tenant empowerment.
Amendment No. 136 would insert into Clause 247 the words,
"or an approved application from tenants".
This would provide an additional route to follow in transferring the management services of registered providers. Amendment No. 137A defines an approved application, and Amendment No. 138A would insert a new clause that specifies the guidelines for such an application. These amendments were inspired by the National Federation of ALMOs.
The Government's policy is to offer choice to tenants, but that needs to be comprehensive and applied to social housing tenants too. These amendments would empower tenants to apply for a change of management. It was reported in the Cave review that all tenants felt that they should be able at a collective level to call for a change in the provider of management services. Without these amendments, there would be no clear mechanism for allowing tenants to trigger such a change. Amendment No. 138A suggests criteria that the regulator should apply to applications. The aim is to be sure of establishing a fair and transparent process. The noble Lord, Lord Filkin, said that he tabled a similar amendment in Grand Committee. If the Government do not accept this one, we would be interested to know how they will deal with the issue.
These amendments would neither provide a right for tenants directly to sack their manager nor—and I emphasise this in case a worry should arise—mean that a transfer of management would affect the ownership of property in any way. I simply wish to build on the mechanisms already in the Bill to allow the regulator to enforce a transfer where there has been a breach of standards or mismanagement. If the Government are serious about offering choice to tenants then empowering them in this way should raise no objections.
I have looked at the Government's amendments in this group. Although I am sure that the Minister will answer all my questions when she responds, I have two queries. Several amendments propose inserting the words,
"the interests of local housing authorities", in parts of the Bill where there is already mention of "registered providers". I am not sure why we must put that in. Is this a loophole that the Government have spotted and are now trying to close, or is there a more substantive reason for adding consideration of those interests at this stage? Are they not just registered providers?
Government Amendment No. 96 proposes including in the regulator's annual report a general description of the complaints made and how they were dealt with. I hope that the Minister will explain what is meant by "general". How general is "general"? Does it mean a general description of every complaint, which sounds frightfully bureaucratic, or a general description of all the complaints received? If it is a matter of, "The regulator received 100 complaints and dealt with 90", there would not be much point. I hope that the Minister can tell us how she envisages this measure working in practice.
My Lords, I am deeply sympathetic to tenants being empowered to play a full role in the management of their organisations. The Bill has been amended in several important respects to get the balance right between the opportunities for residents to participate actively in the management of their affairs—indeed, in some circumstances to raise the issue of a change of management—and, on the other hand, the regulator's powers to act on the residents' behalf and to take into account the cost to the taxpayer of any changes and the viability of the provider; that is, whether it would stay in business if changes were brought about. We have got the balance about right.
I have done this before, but just so that everyone is entirely clear, I declare that I chair a large housing association and can be accused of bringing a provider interest into the debate. I put that declaration up front. A transfer of management—which sounds like a relatively modest change in the affairs of an organisation—is no trivial matter. Only about 350 housing associations are currently active and developing, although about 1,300 exist. That means that around 1,000 are really managers of rented property. That is what they do. Although they may own the property in name, if they are denied the opportunity to continue to manage it, they will go out of business.
Some of these organisations have been around for decades, some for longer. I absolutely accept that they have no God-given right to be managers of social housing; that is certain. However, it is not a trivial matter to end their management of their stock. The Housing Ombudsman is there to handle complaints and individual redress for the 4 million tenants whom the noble Lord, Lord Filkin, mentioned, who will have issues and complaints on a day-to-day basis. The ombudsman provides an effective service. I have been on the sharp end of it myself, and have been entirely content with its judgments. The ombudsman can arbitrate between tenants and landlords—between the housing associations and their residents—and it can fine the registered social landlord, the housing association. It can publish on a name and shame basis the offending housing association. It can draw the attention of the funder—currently the Housing Corporation but in future the Homes and Communities Agency—to the fact that the housing association has not acted properly.
Those powers ensure that tenants with individual complaints on a day-to-day basis—the 4 million tenants—have redress and access to a higher authority to settle those disputes, without it being suggested that it requires a change of management or a wholesale shift in the management of the stock of the organisation to another enterprise.
That should not be taken lightly, because it brings with it—although it probably should not—the imposition of VAT on the management process. There is a 17.5 per cent surcharge if someone else, apart from the owners, does the management. Therefore, if residents complain that service charges are too high and they want to see some cuts in the costs, then, to get a 5 per cent efficiency gain, you need a 22.5 per cent cut in cost to take on board the VAT at 17.5 per cent as well. So they should not enter into this lightly.
We are trying desperately to get the right balance here. I should be very disappointed if the noble Earl, Lord Cathcart, does not see any of his amendments accepted by the end of the day, with some concessions from the noble Baroness. On this one, getting the balance exactly right is difficult. At the moment, the Bill, after the changes that the noble Baroness is bringing forward in the amendments before us now, will get it just about right.
My Lords, I had the good sense in Committee to let the noble Lord, Lord Best, speak before me on this issue, and I am very glad that I did so again, because he put it so well. There is a need for guidance, or a regime, to enable tenants, in the most serious situation, to prompt a change of management. As the noble Lord said, this is not by any means a trivial matter. That prompts me to ask about the application of "mismanagement". If there is mismanagement, various mechanisms can be brought into play. Mismanagement is defined as including affairs conducted "improperly or inappropriately". Is the Minister able to explain how that would apply to the concerns that are being voiced?
I do not want to take out the reference to "control" in Clause 191(2)(g), but whether or not that provision is amended in this way, again I ask how that fits with the issues. Like the noble Lord, I do not think that it is necessarily a service to tenants to enable an easy flip-flop, which I think is the term that was used last time, and that is the concern. On Amendment No. 138A, I am unclear about how these matters are linked to the standards that are being spelt out in the Bill, because they seem to come in from a different direction, or at least to allow for a different direction.
The noble Lord, Lord Best, referred to the VAT issue, which is not a trivial matter either. These are really difficult issues, and we are feeling our way around them and moving forward. It is hardly for me to say this, but the noble Earl ought to bear in mind that raising matters such as this one will have led the Government to reconsider things. None of us gets an amendment labelled with our initials into a Bill, but the process is very worth while.
My Lords, I thank my noble friend Lord Filkin for enabling us to have this important debate. His amendments in Committee prompted rethinking on the Government's part; likewise, my noble friend Lord Whitty, who is not in his place, raised issues to do with tenants that we have been able to address. They are important issues; I echo the noble Baroness, Lady Hamwee, about the context in which we have such debates and on the influences that make an impression on the Government and require us to change. Because it is a complicated group of amendments, I propose to take them slightly out of order to make a more logical argument; then we can have a more coherent debate on the main amendments.
Amendments Nos. 120, 122 and 128 would add a body considered representative of the interests of local housing authorities to the list of bodies which must be consulted when issuing or changing standards under Clause 194, issuing directions under Clause 195 and issuing guidance under Clause 214. The amendments are a direct response to the argument made by the noble Baroness, Lady Hamwee, in Grand Committee that the regulator should be required to consult local authority representatives on standards. It was the first time the issue had been raised with us, which is another testament to her forensic abilities. I have considered her points, and on balance I certainly agree that it would be preferable to include bodies representing their interests in the list of mandatory consultees. For consistency's sake, it should apply to directions and guidance as well.
I turn to my own amendments, Amendments Nos. 95, 96, 97, 116, 124, 125, 126 and 127, and will discuss the amendment tabled by the noble Lord, Lord Filkin, in that context. They are important and address two key issues: how the regulator will involve tenants in its own functions, and how it will address complaints. We had a good discussion on this in Committee, and I am pleased to offer the amendments, which help to deliver a truly tenant-focused regulatory system. I very much hope that they have reassured my noble friend; I think that they have, from what he said. They have certainly been widely welcomed by those who represent the interests of tenants: the National Consumer Council, the National Federation of ALMOs, the Tenant Participation Advisory Service and the Chartered Institute of Housing.
Now I come to what will give me great pleasure. The noble Earl, Lord Cathcart, tabled a good amendment in Grand Committee to give the regulator a "duty to involve", to ensure that tenants are involved in the exercise of its functions. I responded that I was concerned about how that would work in practice and within the structure of the Bill, but I took the principle away. I am pleased to put forward Amendment No. 97, which fully meets the requirements outlined by the noble Earl and my noble friend Lord Whitty, who has also been of great help in this. I hope that it restores the noble Earl's amour propre and good humour. I am bound to explain how the amendment works.
The amendment puts a duty on the regulator in three parts. It requires it to promote awareness of its functions; to consult and discuss where appropriate with tenants on the exercise of its functions, such as through tenant focus groups or other meetings; and to involve them where appropriate in the exercise of functions, such as by including them on committees. It is a signal provision; it flags up the relationship that we hope the tenants and the regulator will have, which will be open, frank and constructive. The amendment additionally requires that the regulator publish a statement saying how it will comply with the duty, and that the statement be subject to consultation. Those measures increase transparency and accountability, so I hope that the noble Earl is pleased with that.
The second key issue is of course how the regulator addresses complaints. We call that the tenant trigger, in shorthand. In Grand Committee, my noble friend Lord Whitty put forward an amendment proposing requirements on the regulator as to how it achieves that, which helped greatly in clarifying our own thinking. He won the support of many noble Lords in doing so. These amendments, which are the culmination of the hard work of my officials, take forward what we are doing.
My starting point is the Cave review, which recommended that the regulator works with the National Tenant Voice and others to develop a range of ways in which interventions can be triggered, by which Professor Cave meant that the regulator should ensure a constant flow of information to allow it to intervene on the basis of clear evidence from a range of sources. That evidence will frequently come from tenant complaints.
As I think the House knows, while the regulator will certainly use tenant complaints as evidence and will have strong powers to intervene, it is not set up to address most individual complaints. That is a core responsibility of landlords, and by issuing standards on complaints procedures the regulator will ensure that they do it well. Where landlords fail to address individual complaints, tenants have the right to put their case to the ombudsman, who delivers a very good service. Indeed, if he has captured the noble Lord, Lord Best, the ombudsman is obviously providing an extraordinary service. We want the ombudsman to work closely with the regulator. We do not want to interfere with those arrangements, but it is for the regulator to address systematic breaches of standards.
Amendments Nos. 124 and 125 are the most important of my amendments. They amend Clause 213, which requires the regulator to issue guidance on how it will use its powers under Chapters 6 and 7. The best way to include the complaints procedure within the regulatory system is for the regulator to issue guidance specifically dealing with complaints about the performance of providers. This is a powerful requirement. The regulator must issue guidance, must consult—including with tenant representatives—and must have regard to its guidance. We thereby ensure that guidance on complaints handling is produced alongside guidance on how the regulator sets standards or uses its enforcement powers, because that link, as the noble Baroness implied, is extremely important and makes it more likely that complaints will influence the rest of the regulatory system.
The guidance issued on this subject also must address specific issues. Three are mentioned: procedure followed in making a complaint, criteria used in deciding whether to investigate, and periods within which the regulator aims to inform complainants of the results. The regulator will, therefore, have to publish a document committing it to stating broadly which complaints it will handle and which are for other bodies to deal with—in particular the ombudsman. It will also need to commit to setting timescales for informing complainants. It is right that the regulator should make commitments in these areas, but it is also right that we leave it flexibility to address each complaint as deserved rather than imposing a target in statute.
Our amendments make the regulator more accountable and its activities more transparent. It must publish guidance and consult on it, but we have added an extra requirement at Clause 94. Amendments Nos. 95 and 96 require that the annual report includes a general description of complaints made to the regulator that year about performance of providers, and how complaints were dealt with. The amendments would not only clarify the culture that we are trying to achieve and the processes whereby the regulator will have as a priority dialogue and involvement with tenants, but, crucially, would give tenants the clarity and confidence that their concerns will be addressed and resolved in the most appropriate and helpful way.
Amendment No. 94 is tabled in the name of my noble friend. He was most generous and helpful, and I hope that I can answer his specific questions about how the Government intend to respond to the issues raised by the noble Earl's Amendments Nos. 136 and 138A and how we want the regulator to work to achieve the best results.
I have explained how my amendments will ensure that the regulator will be open and responsive to tenants, but that is only part of the story. My noble friend is quite right about the need for a rapport between the regulator and tenants that is driven by tenants themselves, and the need to inspire and create a new and confident ecology which means that tenants feel genuinely empowered to raise their own concerns and living standards. That is what we both want to see.
It is not our intention that the only route open to tenants who deserve a better service from their landlord will be to formally complain to the regulator. Again, my noble friend and I agree on that. It would not be practical or desirable, because tenants should not have to seek redress from the regulator in order to receive a decent service. If we were to rely on central intervention, we would not be providing what true tenant empowerment is about. It is not the cultural shift that we want. My noble friend understands that point very well; it is what his amendment is driving at. I agree with him entirely that the new regulatory system that we are introducing should be about not just fundamental tenant protection but also behavioural and cultural change—a culture of expectations that will make it clear to tenants that they can be confident that they are entitled to ask for a good service. I believe that the Bill will deliver this. That is the first part of my answer to my noble friend, who asked how we see the system working if we do not agree to later amendments.
I assure my noble friend that promoting dispute and complaint resolution at the local level is something that the regulator will be empowered to do, through setting standards for landlords. We have a link with standards at that point. There will be standards on procedures for addressing complaints by tenants against landlords, methods for consulting and informing tenants and methods for enabling tenants to influence or control the management of their accommodation and environment.
These empowerment mechanisms relate to the relationships between tenants and landlords. They do not depend on regulatory intervention in order to happen on a day-to-day basis. The regulator's role will be to set standards on these areas, in consultation with tenants and providers, and to take enforcement action when necessary to ensure that tenants are receiving a satisfactory service. Some of the regulator's standards will use tenant satisfaction as a measure of compliance. Poor complaint handling by RSLs would show up very clearly in this data.
I also anticipate that the guidance that the regulator will now be obliged to publish on how it will respond to tenant complaints will make it clear that the regulator will support a culture in which tenants can proactively resolve problems with landlords at the local level without having to seek redress.
The regulator will promote local dispute resolution through standards, as I have explained, but it will also promote it in the way it regulates. The regulator will not be swooping in to deal with disputes unless that is necessary. That imperative is already in the Bill. The regulator will have a statutory objective to minimise interference, as we have discussed. It will also be required to comply with the statutory code of practice for regulators. Before exercising its enforcement powers, the regulator must consider the desirability of providers being free to choose how to conduct their business. The Bill provides that RSLs can give the regulator voluntary undertakings. The regulator must have regard to any such undertakings.
I assure my noble friend that the regulator will have no interest in crowding out dispute resolution at the local level—quite the reverse. It is also right that, through the tenant trigger, we should provide a mechanism for tenants to escalate complaints where there are systemic problems that landlords are not addressing. The regulator will focus on setting good standards for complaint resolution, backed up by a good procedure to handle complaints where there are systemic problems.
My noble friend has been a champion of this issue throughout this Bill, and I am sure that the whole House recognises the great contribution that he has made. I hope that he feels that the amendments that I have tabled today have been useful.
I turn to Amendments Nos. 118 and 119, in the names of the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart. The noble Earl was right: we slightly misunderstood the intention behind the amendment when we discussed it in Grand Committee. I now understand the noble Earl's point that Clause 191(2)(e) should not refer exclusively to,
"complaints by tenants against landlords"; that might imply that a landlord could never have a legitimate complaint against a tenant—it should be a two-way street.
I need to go back to the Cave review briefly; Professor Cave was the original author of Part 2. He found that the closed market for social housing resulted in tenants being disempowered and he suggested that this was one of the principal reasons why regulation of social housing was necessary. He said that,
"a system in which tenants cannot switch and are put at risk of poor treatment by providers, which face limited pressures to offer good service and choice, or even to operate efficiently ... makes a strong case for regulation to protect tenants".
Cave did not find that landlords were similarly disempowered. The fundamental challenge of Part 2 is to address that lack of tenant empowerment and choice. That is why Clause 191(2)(e) is drafted as it is.
The Bill does not assume that the tenant is always right; nor does it assume that RSLs will never have legitimate complaints against tenants. However, there are already well established routes for dealing with such complaints under tenancy contracts, up to and including evicting the tenant in some circumstances. As the noble Earl said, RSLs also have anti-social behaviour powers, which are highly effective in dealing with troublesome tenants, and standards can be issued on this as well. Tenants simply do not have powers of this nature. I hope that that explanation will satisfy him.
Amendment No. 119 would limit the regulator's ability to set standards in relation to tenants controlling the management of their homes. It is crucial that tenants have opportunities to be meaningfully involved in the management of their homes, and that can take many forms. They can be members of boards or involved in other decision-making forums, and they can be directly involved through tenant management organisations. It is right that the regulator should be able to set standards in this area to encourage greater tenant participation in the management of social housing and to make the arrangements work effectively.
The noble Earl was concerned that setting standards in this area might mean that the regulator could force providers to move to tenant management. That is not our intention. Perhaps I may reassure him by drawing his attention to subsection (3) of Clause 191, which states:
"In setting standards the regulator shall have regard to the desirability of registered providers being free to choose how to provide services and conduct business".
It would not be consistent with that if the regulator attempted to force providers to adopt a particular management model. However, where tenant management arrangements are already in place, the regulator should be able to set standards in this area to ensure that they work well, and that might not be possible under the noble Earl's amendment. I believe that the regulator has a legitimate role in encouraging greater tenant involvement, including through the standard-setting process.
Finally—to the relief of noble Lords, I am sure—I turn to Amendments Nos. 136, 137A and 138A, which are an important group. I am very grateful for the support that the noble Lord, Lord Best, gave for Amendment No 138A. Again, I know that my reply will be very disappointing because I cannot accept the amendments. However, I assure noble Lords that we have thought constructively about them as the amendments themselves are very constructive. I am glad to see that in the amendments noble Lords accept the points that I made about management choice in our debate in Grand Committee and that their amendments follow a similar style to my own ones on tenant complaints and involvement. In particular, they accept that it is for the regulator to decide whether transfer occurs and that it is also for the regulator to set out how it will use this power.
My first point of reassurance is that the amendments would do several things that the Bill already covers. First, they would require that guidance be issued on use of the management transfer power. That is already required under Clause 213, which stipulates that the regulator must issue guidance on how it will use all its enforcement powers, including how tenants will be involved. That guidance, unlike the guidance proposed in the amendment, must be consulted on.
Secondly, they specify that tenants can apply directly to the regulator for change of management under circumstances to be specified by the regulator. That is effectively covered by the tenant-trigger amendments that I introduced a few moments ago. If a tenant or group of tenants send a complaint about management and the complaint meets the criteria in guidance, the regulator must say how it intends to address the complaint. Tenants can write saying that there are serious problems and that they want a new manager, although the regulator may of course decide that it is more appropriate to use another power. However, that is how tenants will be able to influence change.
The issue of tenant influence on the choice of manager is also already covered in other ways. The regulator's second fundamental objective is to ensure that tenants have an appropriate degree of choice. Its third is to ensure that they are involved in the management of their homes—and that means involvement in decisions on the management service they receive. The regulator has powers, under Clause 98, to consider evidence and opinions provided by tenants and tenant groups when considering using investigation and enforcement powers. Furthermore, when management tender occurs, there must be representation of tenant interests on the selection panel. I hope that, together with what I said earlier, those details will help to reassure the noble Earl and my noble friend Lord Filkin about how the processes will work.
Finally, and most importantly, its standards may explicitly include standards on methods by which tenants can influence or control the management of their homes. In other words, this allows the regulator to set standards on how landlords give tenants choice about the management service they receive. This is one of the reasons why I am very keen not to delete the word "control" from Clause 191(2)(g), which Amendment No. 119 seeks to do, because standards on tenant involvement in management is one of the key areas where the Secretary of State can direct the regulator.
The third aspect of these amendments is that they would allow management transfer to be used on the basis of an application, even if there has been no statutory inquiry. That is the point made by the noble Lord, Lord Best. This is where we have the greatest difficulty. Given the seriousness and intrusiveness of the management transfer power, I strongly believe that its use must be preceded by an inquiry to investigate whether there has been mismanagement. Using the power without an inquiry would be contrary to natural justice, and it might give rise to human rights concerns. Cave was aware of that, and it is contrary to what he recommended. He said:
"These fallback powers would need to be preceded by a formal independent inquiry that found evidence of mismanagement that would justify such actions as a proportionate response".
Evidence is crucial. In Committee, I debated the use of this power with the noble Lord, Lord Best, who was concerned about it being too easy for the regulator to use. I have tabled amendments to address some of his concerns. I am therefore disinclined to reverse course at this stage.
In producing the Bill, we have had to balance the needs of tenants against those of landlords. The Bill offers a much better deal for tenants than the existing system. It has been greatly improved during its passage through this House so I am grateful to noble Lords. For the regulator to require, for the first time, that a provider tender or transfer management of homes to another body is a huge step forward, as is greater tenant involvement in regulation and management. My amendments deliver that.
However, there must be a balance. The regulator must take account of the desirability of providers managing their own businesses, minimise interference and not misuse its considerable powers. It must act on the basis of evidence and of real need. That is important to providers and lenders, who I suspect would be very concerned if we were to amend the Bill in this way. The independence and stability of providers are clearly in the long-term interests of taxpayers and tenants.
What really matters, as my noble friend Lord Filkin argued, is that providers involve tenants more in choices over the service they receive, with encouragement from the regulator and, where necessary, some enforcement. That matters more to me than encouraging a constant stream of demands that the regulator force management change when it has less intrusive and more effective solutions at its disposal.
The noble Earl asked me two questions. I have one answer here, but I seem to have lost the other one. I may well have to write to him about it. He asked what a general description of complaints is. It is intended that the numbers, types and severity of complaints should be summarised and related to the response made by the regulator. It does not imply a detailed description of all complaints. I will write to him on that point and the other point before Third Reading to make sure that we have all the detail.
In relation to the question asked by the noble Baroness, Lady Hamwee, on mismanagement, the governance concerns that we discussed in Committee are included in the definition of mismanagement. At present, the corporation is able to intervene where there is misconduct. No problems have come up with that power so we are carrying forward the definition that has worked to date.
I am conscious that I have spoken for a long time. I hope noble Lords will accept what I have said in relation to the government amendments and to their own amendments.
My Lords, I thank my noble friend for her thoughtfulness and care in responding to these complex issues. I shall value reading what she has said. I will reflect on it and see whether I need to come back at Third Reading or whether I can leave a little peace in her life before she prepares for the Planning Bill. I beg leave to withdraw the amendment.
moved Amendments Nos. 95 and 96:
Clause 94, page 42, line 22, leave out "and"
Clause 94, page 42, line 24, at end insert ", and
(c) contain a general description of complaints made to the regulator in that year about the performance of registered providers and of how those complaints have been dealt with."
On Question, amendments agreed to.
moved Amendment No. 97:
After Clause 99, insert the following new Clause—
(1) The regulator shall—
(a) promote awareness of the regulator's functions among tenants of social housing,(b) where the regulator thinks it appropriate, consult them about the exercise of its functions (for example, by holding meetings), and(c) where the regulator thinks it appropriate, involve them in the exercise of its functions (for example, by appointing them to committees or sub-committees).
(2) The regulator shall from time to time publish a statement about how it proposes to comply with subsection (1).
(3) Before publishing a statement the regulator must consult such persons as it thinks appropriate."
On Question, amendment agreed to.
Clause 110 [Disclosure]:
moved Amendments Nos. 98 and 99:
Clause 110, page 47, line 8, after "regulator" insert "if the authority thinks that the disclosure is necessary"
Clause 110, page 47, line 10, after "authority" insert "if the regulator thinks that the disclosure is necessary"
On Question, amendments agreed to.
Clause 114 [Local authority non-registrable bodies]:
moved Amendment No. 101:
After Clause 123, insert the following new Clause—
"Accountability of providers
(1) Every registered provider shall prepare a statement showing how it will account to residents for the performance of its functions in relation to social housing.
(2) The statement shall be published in printed or electronic form and a copy supplied to the regulator."
My Lords, the question of tenant empowerment must in the end depend on tenants having sufficient accurate information on which to base their opinions. We have tabled these two amendments to ensure that tenants are properly supplied with information by their housing providers.
Amendment No. 101, which deals with the accountability of providers, inserts a new clause to require every registered provider to prepare a statement showing how it will account to residents for the performance of its functions. Amendment No. 129 returns to the regulator accrediting social housing providers, and states:
"Any accreditation scheme shall require each accredited person to ... prepare a statement showing how it will account to residents".
Those two amendments are very simple and straightforward, but the whole debate that we have had on the previous group is to do with a large part of the purpose of the Bill, which is giving tenants power over their environment. As providers are landlords funded partly through the public sector and partly through the private sector, we must ensure that they account properly to their tenants for what they are doing and why they are doing it.
If we are to give tenants power to complain about their landlords to a regulator who might, in certain circumstances, choose to change that landlord, we must ensure that any movement by tenants corporately is supported adequately by accurate and precise information about what is going on. The amendments would facilitate that process; I beg to move.
My Lords, I am completely sympathetic to the intention and the vocabulary of the noble Lord as he described the amendments and I welcome them back because I strongly agree with the need to ensure that registered providers are indeed properly accountable to their tenants and that tenants have the information that they need to exercise their rights.
Where we disagree is on how that imperative should be reflected in the Bill. Generally, we have preferred to use regulatory tools rather than impose direct statutory requirements on RSLs because, as we all know, that is more flexible, lighter touch and more consistent with the independence of the sector. I do not want to return to the debate on the risk of reclassification of RSLs as public rather than private sector bodies, but we always have that in mind when considering these issues. I very much doubt whether those concerns would be eased by imposing a direct statutory duty on every RSL in England at this stage of the Bill's progress. I am also reluctant to impose such a requirement on RSLs without consultation with the sector.
For those reasons, I am not convinced that it would be wise to impose a statutory duty, as the noble Lord proposes. However, we have given careful thought to the aims behind the amendments and how we can translate them into reality. We think that the best way to do so would be through regulatory guidance. That would have several advantages. It would allow the RSL sector to be consulted first, as required by Clause 214. It would give the regulator some flexibility to determine what should be included in the accountability statements. That would help to ensure consistency with whatever regulatory standards had been set. Consistency is very important, given the sector that we are dealing with. It would also integrate the requirement into the broader regulatory system. It would be for the regulator to decide whether this was appropriate, but I believe that the National Housing Federation is keen on these changes. If it wanted to submit this requirement as a regulatory proposal, I am sure that the regulator would consider it seriously.
Although accountability statements would be better dealt with through regulatory guidance, it is also important to recognise that the Bill will provide a strong impetus for RSL accountability to tenants. The ability to set standards for methods of consulting tenants and enabling them to influence or control the management of their accommodation and environment also means that those standards have to be consulted on and enforced, and in doing so the regulator has to observe his objectives. We are aiming for choice, protection and the opportunity for tenants to be involved in the management of their homes. It is therefore highly likely that these standards will include requirements that relate to accountability to tenants as well. In fact, that makes perfect sense. However, consultation is a more appropriate route to the same goal than a statutory requirement.
We had extensive debates in Grand Committee about the importance of information and how information alone can bring choice and empowerment. The same logic applies to accountability, because tenants will not be able to hold their landlords to account unless they can access information. The Bill provides for that, because the regulator is subject to a statutory requirement to publish information about RSLs' performance against standards.
I hope the noble Lord will be reassured that we are at one with his intention and that we can achieve what he wants through the new regulatory system. I assure him that we differ only on the means, not the ends.
My Lords, I am happy to acknowledge that the difference between us, if it is a difference, is between the means and the ends. However, the end is no problem; the question is how you get there. The Minister's explanation and offer of regulatory guidance in essence accepted the principles behind the amendments. It is therefore perfectly possible for me to beg leave to withdraw the amendment.
moved Amendments Nos. 102 to 103:
Clause 124, page 52, line 38, leave out subsection (1) and insert—
"(1) In section 51 of, and Schedule 2 to, the Housing Act 1996 (c. 52) (schemes for investigation of complaints by housing ombudsmen) for "Relevant Authority", wherever appearing, substitute "Regulator of Social Housing".
(1A) In section 51 of that Act—
(a) for subsection (2)(a) substitute—"(a) a registered provider of social housing,",(b) in subsection (2)(d) after "registered with" insert "the Regulator of Social Housing or", and(c) at the end add—
"(7) Section 52 shall apply to an order under subsection (4) (with any necessary modifications)."
(1B) In paragraph 6(2) of Schedule 2 to that Act (grants) for "Housing Corporation", in both places, substitute "Regulator of Social Housing"."
Clause 124, page 53, line 12, at end insert—
"(3) At the end of Schedule 2 to that Act add—
"General provision about orders
12 Section 52 shall apply to an order of the Secretary of State under this Schedule (with any necessary modifications).""
On Question, amendments agreed to.
Clause 148 [Effect of moratorium]:
My Lords, this large group of amendments makes a number of changes to the disposal provisions in the Bill. Amendments Nos. 104 and 107 address a concern raised in Grand Committee by the noble Baroness, Lady Hamwee, about the effect of the moratorium provisions, which are triggered when a registered provider becomes insolvent, on a third party who had agreed but not completed a purchase of land from a registered provider. Noble Lords will know that a moratorium is triggered only in the most serious circumstances, when a registered provider becomes insolvent. There has been only one moratorium in the history of the Housing Corporation, which occurred when the housing association Ujima became insolvent last December.
The effect of a moratorium is that the registered provider's land may be disposed of only with the regulator's prior consent. As noble Lords will be aware, disposals of social housing by a registered provider require the regulator's consent at any time. There are two differences during a moratorium. First, the requirement to seek the regulator's consent extends beyond the provider itself by preventing secured creditors enforcing their security and repossessing land. Secondly, the requirement to seek consent extends to all land, not just to social housing.
For the majority of disposals by the provider, there will be no change. Disposals of social housing continue to require consent as before, and disposals under the right to buy and the right to acquire continue to be exempt as before. In theory, however, that means that a registered provider could have agreed to, but not completed, a disposal of land that was not social housing and therefore did not require consent under Clause 171, but could find that the disposal required consent under Clause 148 once a moratorium was triggered. The sale then could be delayed or even prevented. I accept that this is a strong power, which could disadvantage a third party, but we believe that it is necessary to provide protection in most cases. A moratorium is extremely rare. It arises only when the provider is insolvent and the future of the homes is therefore at serious risk. In this situation, tenants' homes will be at risk, as will public investment and the investment of secured and unsecured creditors.
Following the concerns raised in Grand Committee, we have considered what the effect of these provisions might be on an individual homebuyer. We agree that it seems disproportionate to block the sale of a single home to an individual who intends to use the property as their primary residence. These amendments, therefore, make similar provision in the moratorium clauses to those in the main disposals clauses. Disposals of a single home to an individual homebuyer exempt such disposals from the provision that they are void when made without the necessary consent. The regulator still would have the power to prevent large-scale or commercial disposals which are not in the best long-term interests of the provider, but individual homebuyers will not be affected. I hope that noble Lords will agree that this strikes the right balance between protecting individuals and protecting the long-term interests of tenants and public investment.
Amendments Nos. 105, 106, 110 and 111 amend Clauses 147 and 172, which set out exceptions to the requirement to seek disposal consent. Clause 147 relates to disposals during a moratorium, whereas Clause 172 relates to the normal course of business. In both clauses there is an exception for disposals which require consent under other legislation, mainly stock-transferred homes. Although the responsibility for those consents will, in future, be given by the regulator rather than the Secretary of State, the consents are still given under the original legislation; that is, the Housing Act 1985 and the Local Government and Housing Act 1989. They still need to be excepted from the main disposal consents regime, otherwise registered providers would theoretically be required to seek consent twice. These amendments correct an error in those exceptions, which, at present, refer only to the consents required under the Housing Act 1985. Those required under the Local Government and Housing Act 1989 are missing.
Amendment No. 114 closes a potential loophole opened up by the changes we made in Grand Committee which limited the requirement to seek disposal consent to only social housing. The potential for providers to evade the requirement to seek disposal consent by changing the use of a property is largely limited by the protection in Clause 70 that accommodation which becomes social housing remains social housing except in very specific circumstances. There is a theoretical possibility, however, that this protection could be avoided if the land was no longer accommodation; that is, if the home had been demolished. This amendment ensures that, if consent is required for the disposal of a dwelling, it continues to be required even if the land has ceased to be a dwelling.
Amendment No. 115 again relates to changes made in Grand Committee, which limit the requirement to seek disposal consent to social housing. It was achieved through amendments to Clause 171. That change did not, however, affect those disposal consents which are required under other legislation via Clauses 188 and 189. These clauses mainly apply to stock transferred homes. This omission would have meant that registered providers may still have been required to seek disposal consents for land other than social housing where the land was part of a stock transfer, but not otherwise, which was not our intention. Amendment No. 115 corrects that omission by clarifying the requirement to seek consent under Clause 189, which does not apply to land that is not social housing.
Finally, Amendments Nos. 108 and 109 are technical and ensure the clauses are consistent with similar powers elsewhere in the Bill. I hope noble Lords will agree that, while technical, these amendments are important to ensure that the system works in a simple and effective way, ensuring the protection of tenants and investment where needed, while minimising bureaucracy for providers. I beg to move.
My Lords, I am grateful to the Government for acting on the concerns that I raised at the previous stage about disposals without consent. I would have preferred to see something which more closely mirrored the position that would have applied with other companies on an insolvency, but the proposed amendment is a good one.
A question has just occurred to me and I am sorry I did not think of this before and give notice. If the purported disposal is one where there has been an agreement to sell more properties than come within the exception and the purchaser has paid a deposit, what happens to that deposit? Of course, anyone with his wits about him would provide for the possibility of a moratorium when drafting a sale agreement. There must be an answer. If the purported disposal is void, would the deposit go back to the failed purchaser? It would be helpful to have clarity on that.
moved Amendments Nos. 105 and 106:
Clause 149, page 64, line 15, leave out "to which" and insert "for which consent is required under—
Clause 149, page 64, leave out line 16 and insert ", or
(b) section 173 of the Local Government and Housing Act 1989 (c. 42)."
On Question, amendments agreed to.
moved Amendment No. 107:
After Clause 149, insert the following new Clause—
"Disposals without consent
(1) A purported disposal by a registered provider is void if—
(a) it requires the regulator's consent under section 148, and(b) the regulator has not given consent.
(2) But subsection (1) does not apply to a disposal by a non-profit registered provider to one or more individuals ("the buyer") if—
(a) the disposal is of a single dwelling, and(b) the registered provider reasonably believes at the time of the disposal that the buyer intends to use the property as the buyer's principal residence."
On Question, amendment agreed to.
Clause 166 [Transfer of property]:
moved Amendments Nos. 110 and 111:
Clause 172, page 73, line 14, leave out "to which" and insert "for which consent is required under—
Clause 172, page 73, line 15, leave out "applies (disposals requiring consent)" and insert ", or
(b) section 173 of the Local Government and Housing Act 1989 (c. 42)."
On Question, amendments agreed to.
Clause 176 [Separate accounting]:
moved Amendment No. 112:
Clause 176, page 75, line 6, at end insert—
"( ) Where this section applies in relation to the proceeds of sale arising on a disposal, section 35 above, section 27 of the Housing Act 1996 (c. 52) and section 52 of the Housing Act 1988 (c. 50) do not apply."
On Question, amendment agreed to.
Clause 182 [Interpretation: other expressions]:
moved Amendment No. 114:
After Clause 185, insert the following new Clause—
"Change of use, &c.
(1) Where the regulator's consent is required for the disposal of a dwelling by a registered provider, sections 171 to 174 continue to apply in relation to a disposal of the land by the registered provider even if the land has ceased to be a dwelling.
(2) Sections 171 to 174 also apply in relation to a disposal of land by a registered provider which would fall within Exception 2 or 3 of section 172 but for a change of use of the land by the registered provider."
On Question, amendment agreed to.
Clause 189 [Section 188: consequential amendments]:
moved Amendment No. 115:
Clause 189, page 80, line 44, at end insert—
"(ba) after subsection (1A) insert—"(1B) This section does not apply to a disposal of land by a registered provider of social housing unless the land is social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008.""
On Question, amendment agreed to.
Clause 190 [Overview]:
moved Amendment No. 116:
Clause 190, page 81, line 31, leave out paragraph (d) and insert—
"(d) requires the regulator to give guidance about complaints relating to registered providers and about the use of its powers under this Chapter and Chapter 7 (sections 213 and 214),"
On Question, amendment agreed to.
Clause 191 [Provision of social housing]:
[Amendments Nos. 117 to 119B not moved.]
Clause 194 [Consultation]:
moved Amendment No. 121:
After Clause 194, insert the following new Clause—
"Guidance by the Secretary of State (No. 2)
(1) The Secretary of State may give guidance to the regulator as to the exercise of any of its functions.
(2) Before giving guidance under this section, the Secretary of State must consult such persons as the Secretary of State considers appropriate.
(3) The Secretary of State must publish any guidance given under this section as soon as reasonably practicable after giving it.
(4) The Secretary of State may revoke guidance given under this section.
(5) The Secretary of State must—
(a) consult, before revoking guidance under this section, such persons as the Secretary of State considers appropriate, and(b) publish the fact that the guidance has been revoked as soon as reasonably practicable after the revocation.
(6) The regulator must, in exercising its functions, have regard to any guidance for the time being in force under this section.
(7) References in this section to giving guidance include references to giving guidance by varying existing guidance."
My Lords, I shall speak also to Amendment No. 123. What would these amendments do if agreed? First, they would remove Clause 195 with its unprecedented and prescriptive provisions; secondly, they would split Clause 195, in effect, into two clauses, one of which is a widely drawn, flexible guidance clause which is a replica of Clause 48 in Part 1, except that the amendment changes the name "HCA" to "the regulator". Finally, the amendments include a directions clause, the wording of which is taken directly from Section 76 of the Housing Associations Act 1985. Section 76 is the precedent cited by the Government in its submission to the Delegated Powers and Regulatory Reform Committee and in Grand Committee. However, if the Government were minded to replace the proposed Section 76 clause with a replica of Clause 48(1) to (4) in Part 1, thus putting the regulator into the same position as the HCA, that would be entirely appropriate. Either clause would do what the two amendments intend.
What would be the effect of these amendments? First, they would provide the Government with the powers they have argued they need. Secondly, they would put the HCA and the regulator on all fours and subject to a similar scheme of powers. Thirdly, they would deal with and put to rest the disagreement between the Delegated Powers and Regulatory Reform Committee, of which I am a member, and the Government. Finally, they would retain a conventional power of direction as included in many Acts.
I will give my reasons why these four improvements to the Bill deserve a welcome from the Government. First, with regard to powers, the Minister has herself argued that in dividing the functions of the Housing Corporation in separating out regulation—I quote from the letter of May last to the Delegated Powers and Regulatory Reform Committee—
"one of the aims of the Bill is to establish a regulator which is more independent of the Secretary of State", but that the,
"Government has a legitimate public interest in the regulator's functions", and, further, that,
"in relation to the issues referred to in Clause 195(2) the Secretary of State has such an interest".
I believe that these propositions will be met with general agreement: first, that the regulator should be more independent, and, secondly, that the Secretary of State indeed has an interest in the regulator's functions—including, I would judge, those in Clause 195(1) as well as those in Clause 195(2). The question is how we satisfy those twin goals in the most elegant and effective way.
Guidance is a better way than directions. Guidance allows dialogue to proceed at any required pace, allows any depth and detail of consultation and enables compromise—although the regulator must have regard to guidance, whether in full agreement or not. Thus compulsion is avoided. In contrast, directions would entail compulsion. It is certain that any direction that enforced a realignment of the regulator's method of delivering performance under Clauses 190 to 194 would be highly disruptive both to the HCA and to social housing providers. That is inherent in the language and the process of Clause 195. Would the inevitably slow progress towards a direction take a year? Given Clause 195(4) and (5), it seems likely, thus creating great uncertainty in a difficult and demanding market. Surely guidance is the much more appropriate power, serving to achieve both more independence and the Secretary of State's legitimate pursuit of the public interest.
The second issue is the keeping of the HCA and the regulator on all fours. People in both public bodies will be drawn from the Housing Corporation and from English Partnerships, where they are colleagues. They will need to continue to be colleagues in a joint endeavour. The HCA and the regulator face a stern test: 70,000 high-quality completions by 2010-11, as the noble Lord, Lord Bassam, reminded us. That is a 40 per cent increase on the current 50,000 completions, split more or less down the middle between rented and owned. I believe that there is agreement that the most acute shortage is in rented property. The average Housing Corporation grant for rented housing is about £60,000. For owned property it is about half that figure, confirming that rented property is the most demanding sector in the social housing market. Both the HCA and the regulator, continuing to work in close harmony, will need to be both innovative and imaginative if they are fully to succeed. They will need the independence that they have been promised, and anything that puts one into a different relationship with the Secretary of State from the other will not help. They need to be on all fours.
I turn to the third issue. There has been, as my noble friend Lord Dixon-Smith pointed out in Grand Committee, a disagreement between the Delegated Powers and Regulatory Reform Committee and the Government. The committee demurred at Clause 195, saying in its Eighth Report that the,
"delegations have a legislative character but are not subject to a parliamentary procedure ... it is not clear that section 76 of the Housing Associations Act 1985 is a relevant precedent".
Despite the fact that the Minister continues in a state of disagreement with the committee, it will be to the advantage of the House if this disagreement is peacefully resolved. Amendments Nos. 121 and 123 achieve this; neither the proposed guidance clause nor the proposed directions clause is of a legislative character, and both are well precedented.
The final issue is that of the conventional inclusion of a directions clause. Directions are a draconian power and are meant to be so. They are not intended for the review of detailed operations under the provisions of an Act; they are intended for the unforeseen—for exceptional circumstances when rapid action is needed. This is why directions clauses such as that in Section 76 of the 1985 Act have been acceptable, despite the fact that they are subject to no parliamentary procedure. Amendment No. 123 restores directions to their well precedented place in legislation.
I shall say a word or two about assurances. Directions clauses attract assurances, and we have had some about Clause 195. However, two questions always arise. The first is that of the cook's pie crust—are assurances made to be, after a time, broken? The second is more serious. Why put an extensive and complicated clause in a Bill if it is very unlikely to be invoked? The language and intent of Clause 195 is all about the performance of functions. Guidance will be a more effective way to find improvements to performance, leaving directions for use in extremis.
I am seeking to meet the needs of all the principal players—the Secretary of State, the HCA, the regulator and the Delegated Powers and Regulatory Reform Committee. I believe that the providers as well as the tenants and owners will also benefit. I beg to move.
My Lords, my noble friend has made an admirable case for trying to keep all the bodies that he mentioned in line. I am quite sure that the Minister will argue that the Bill already does that but the report of the Delegated Powers and Regulatory Reform Committee shows that there is clear division of opinion as to whether that is the case.
I support my noble friend in his amendments; as he says, they would enable the apparent conflict to be resolved and would unquestionably assist in keeping co-ordinated the actions of the Homes and Communities Agency and the regulator. That has to be a worthwhile ambition. Therefore, it is very easy for me to offer my support.
My Lords, I agree absolutely with the noble Viscount about guidance being better than directions. I hope that he will comment on the fact that Amendment No. 123 gives the Secretary of State a much wider direction-making power than Clause 195, as I do not think he has said anything about it. His argument may lead one inevitably to that conclusion—probably it does—but it gives me some trouble.
My Lords, I shall start where the noble Baroness finished, because her point goes to the heart of the argument. As I read the amendments, they would make the regulator subject to the Secretary of State's direction and guidance. I understand the point about guidance, but that would apply for all its functions. When we discussed this matter earlier, I assumed that the noble Viscount, Lord Eccles, was much more keenly in favour of the regulator's independence. It is a feature of the Bill, which I had thought was broadly accepted, that the new social housing regulator should be largely independent from government, subject to the Secretary of State's direction only in the setting of a small group of key standards. This is in contrast to the status quo, where the Housing Corporation is subject to direction by the Secretary of State in respect of all its functions; so there is a change.
A key recommendation of Martin Cave's review was that the new regulator should be independent of government, but that does not mean that there is no role for government. Professor Cave was very clear that the Government had a direct interest in the setting of rents and standards of service for tenants, which are the areas in which we have given the Secretary of State a power to direct the regulator. This limited power of direction, backed up by transparent processes, should give providers and tenants the certainty that they have previously lacked.
I am clear that this is much more faithful to Professor Cave's recommendations. It is perhaps worth quoting what he said:
"It is right that regulation should be used to achieve policy objectives. But current and future social housing providers need to have more regulatory certainty about the extent and cost of policy burdens. The process for introducing and adapting policy requirements needs to be more structured, transparent and equitable".
The Bill achieves that objective. The noble Lord's amendments would provide a new role for the Secretary of State that rather waters down the Cave recommendations.
The Secretary of State's role under this Bill remains extremely limited. We have introduced amendments that would give the Secretary of State additional roles in two very specific areas, to which I referred earlier, but they do not undermine the basic principle of independence. First, we have given the Secretary of State a role in the process for setting the regulator's fees. As the House will know, regulation in this sector has not previously been funded by fees, and providers are perhaps understandably nervous about how the new system might work. The role for the Secretary of State should help to reassure providers.
Secondly, we have given the Secretary of State a role in the regulator's determinations on the disposals proceeds funds. In this area, the regulator takes on the role of the Housing Corporation in determining how proceeds from right-to-acquire sales are invested. That is how we ensure that proceeds of right-to-acquire sales are invested in new social housing. Although it is a regulatory function, it has important investment implications. The Secretary of State's role here simply ensures that the status quo is maintained; namely, that government are able to ensure that right-to-acquire sales do not lead to the loss of social housing stock. I am sure that most noble Lords will agree that that is a desirable outcome. The Bill was not intended to make any substantial changes to the right-to-acquire system. Giving the Secretary of State a role here ensures that the status quo is maintained.
These small roles for the Secretary of State do not diminish the overall independence of the regulator. The Secretary of State will have only a limited role in setting standards and no role at all in other areas, including the registration of new providers, enforcement of standards or the disposal consents regime, where one could fairly argue that a guidance role is more appropriate. These are amendments that we have to resist.
My Lords, I thank the Minister for his reply. I shall deal first with the question of Professor Cave. We all have the greatest respect for the work that the professor has done on this subject, but none of us would expect him to be an expert on parliamentary procedure or the drafting of Bills and proper implementation of Acts of Parliament. That is not what we would expect—and Parliament would not wish to delegate the responsibility for such decision-making to anybody, however expert they were, if they were not themselves Members.
On the point made by the noble Baroness, Lady Hamwee, on the width of the directions clause, I remind the House that I suggested that if the Government thought it more appropriate they could use Clause 49 and thus put the regulator on exactly the same basis as the HCA. That clause is quite short; subsections (1) to (4) are the ones that count. It would do admirably. I chose Section 76 of the 1985 Act only because the Government kept citing it as the precedent on which they relied. Directions clauses are meant to be wide. There are many of them, in many Acts of Parliament, and when they are used as backstop or reserve powers, as is their usual use, they are wide, because it is not possible to foresee the purposes for which they may need to be used.
In Grand Committee, we had three uses of directions pointed out to us by the Minister, which were all to do with the Dome. That is an absolutely classic example of the need to use directions under an Act of Parliament because the circumstances of the Dome, as it was shut down after the millennium, could not have been foreseen. That is why they were used in that way. As a matter of precedent and parliamentary procedure, I believe that directions clauses should be wide.
There is much benefit in Amendments Nos. 121 and 123, and I wish to test the opinion of the House.
moved Amendments Nos. 124 to 126:
Clause 213, page 90, line 18, leave out "give registered providers guidance on" and insert "publish—
(a) guidance about complaints to the regulator about the performance of registered providers, and(b) guidance about"
Clause 213, page 90, line 19, at end insert—
"(1A) Guidance under subsection (1)(a) must, in particular, specify—
(a) the procedure to be followed in making a complaint,(b) the criteria used by the regulator in deciding whether to investigate a complaint, and(c) periods within which the regulator aims to inform complainants of the result of complaints."
Clause 213, page 90, line 20, leave out "the guidance in exercising those powers" and insert "guidance under this section"
On Question, amendments agreed to.
Clause 214 [Consultation]:
moved Amendments Nos. 127 and 128:
Clause 214, page 90, line 22, after "guidance" insert "under section 213"
Clause 214, page 90, line 25, at end insert—
"(ba) one or more bodies appearing to it to represent the interests of local housing authorities,"
On Question, amendments agreed to.
Clause 215 [Accreditation]:
[Amendment No. 129 not moved.]
Clause 227 [Amount]:
My Lords, this formidable-looking group of amendments can be broken into two. I shall deal first with Amendments Nos. 130 to 135, 148, 149, 194 and 197, which address four issues: they ensure that an order by the Secretary of State changing the amount that the regulator can set as a penalty will be subject to the affirmative procedure; specify what is covered in a warning notice for the penalty or compensation powers; tidy up Clause 236 to remove obsolete references to "occupiers"; and ensure a single definition of the word "officer".
I have already written to the House on the size of the penalty. Amendment No. 110XD, tabled by the noble Lord, Lord Dixon-Smith, was accidentally accepted in Committee. It aimed to implement a DPRRC recommendation by ensuring that where the Secretary of State uses an order to change the maximum permitted penalty under Clause 227 above the inflation rate, it must follow affirmative procedure. Sadly, the accidentally accepted amendment cannot be kept because it included a number of undefined terms.
In Committee, we had tabled our own amendments but then had to withdraw them as they were incompatible with the amendment which had by then been accepted. My Amendment No. 130 removes the text added by that amendment from Clause 227, and Amendments Nos. 194 and 197 ensure that the aim of the noble Lord's amendment is met by ensuring that Clause 318, which sets out which procedure applies to each order-making power, applies the affirmative procedure to Clause 227. I apologise for the confusion caused over that.
On the second issue, my Amendments Nos. 131 and 135 specify what issues need to be covered in the warning notices that the regulator must issue to a provider before using penalty and compensation powers. At present, Clauses 228 and 240 state that the notice must inter alia explain the effects of Clauses 229 to 233 and Clauses 241 to 243 respectively. The problem is that many parts of those clauses are not relevant to the provider and do not need to be in the warning notice.
The amendments clarify that the notice should explain issues affecting providers such as the representations procedure and the fact that the penalty/compensation and interest on that sum is treated as a debt to the regulator. However, the notice does not need to include issues such as the regulator's duty to inform the HCA, or the process by which the Treasury may make regulations authorising the charging of interest.
On the third issue, my Amendments Nos. 132, 133 and 134 remove the word "occupier" from Clause 236 in three places. The definition of "tenant" in Clause 273 already includes "occupiers", so they do not need to be separately mentioned.
Finally, my Amendments Nos. 148 and 149 ensure that the Bill uses a consistent definition of "officer". Clauses 264 and 267 were taken virtually intact from the Housing Act 1996 and include a definition of "officer" that we are now removing. The Bill defines "officer" at Clause 268 for the three different types of housing association, cross-referring to other legislation. There is no need to retain two separate definitions with the same meaning.
The effect of Amendments Nos. 137 and 138 and 139 to 147 is to remove the ability for the regulator to use a number of its major enforcement powers—that is those usable only following, or in some cases during, an inquiry—on the ground of "breach of a standard" and to require the regulator to have the consent of the Secretary of State to use its new powers to amalgamate bodies and transfer management. I discussed those issues at some length with the noble Lord, Lord Best, when he tabled these and other amendments on the enforcement powers in Grand Committee. He was kind enough to accept many of the points that I made in response, and I have written to the noble Lord following that sitting.
For the benefit of the House, I shall briefly explain what the amendments mean. They are concerned with three major enforcement powers; transfer of land, amalgamation and transfer of management. Transfer of land, in Clause 251, is an existing power used as a last resort in extreme cases when a provider is effectively unable to govern itself or manage its homes. The corporation normally requires the provider to sell all its homes to another provider, and then it is wound up. Amalgamation is an alternative to transfer of land for industrial and provident societies, which does not involve winding up. Mandatory transfer of management was proposed by Professor Cave as a way of addressing very serious tenant concerns without the need to change ownership. All of those are major enforcement powers that must be preceded by an inquiry.
Under the Housing Act 1996, transfer of land is usable on two grounds: where the corporation believes that the affairs of the provider have been mismanaged, and where it believes that management of the land would be improved through transfer. In the Bill, we added a third ground; where there has been a breach of standards under Clauses 191 or 192. We did so because it seemed right that there should be a close link between standards and enforcement. We also applied all three grounds to the new enforcement powers of amalgamation and management transfer, for the sake of consistency.
I understood that the concern of the noble Lord, Lord Best, was that those powers should be usable only where there was mismanagement. The noble Lord was concerned about the new ground of "breach of standards". I do not believe that there was any real risk that the regulator would be able to use extreme powers such as these on the basis of a minor breach of standards; it was certainly not our intention that it could do so. There are protections in the Bill against precisely that, such as Clause 216, which requires the regulator, when using enforcement powers, or deciding which ones to use, to have regard to the materiality and frequency of the problem and the desirability of the provider managing its own affairs.
However, after some consideration, I am content to make the proposed change, because this is a new ground, and removing it should not make it harder to use the transfer of land power than it already is. As I stated in Committee, my continuing objection to removing the "improve the management of the land" ground is precisely that it is an existing power and that removing it would make it harder to use in the interests of tenants and the security of assets than at present.
Amendments Nos. 137, 139, 140 and 142 to 147 therefore remove the ground of "breach of standard" from all enforcement powers which must be preceded by an inquiry or used during an inquiry; transfer of land, management transfer, amalgamation, and the powers to restrict dealings and suspend officers. That is in Clauses 254 to 259.
On Amendments Nos. 138 and 141, in Committee, the noble Lord, Lord Best, argued cogently that there was significant protection for providers built into the existing transfer of land power, because the consent of the Secretary of State was required; I agree. Although this was not included in his amendments, it is right that, just as the three key post-inquiry enforcement powers—transfer of land, management transfer and amalgamation—are usable on the same grounds, they should all be made subject to the consent of the Secretary of State, which is the effect of Amendments Nos. 138 and 141. That sends a powerful message that the powers cannot be used lightly, though I do not believe for a moment that the regulator would do so. I hope that the noble Lord is content that we have made those amendments in the way that he would have wanted and that we have got the balance right. I beg to move.
My Lords, I am well content with the amendments, and I am very grateful to the Minister for introducing them. The clinching argument for limiting the circumstances in which the regulator could transfer the management of property to another landlord was made by the noble Earl, Lord Cathcart, in Committee. He put it so well that it bears repetition. He said that it was,
"rather like a court trying someone for murder, finding him innocent of murder but guilty of shoplifting, and then deciding, 'Well, we'll hang him anyway'".—[Official Report, 18/6/08; col. GC 428.]
That was such a good quote that I felt it was worth repeating. I am deeply grateful to the Minister for the amendments, which will definitely be well appreciated by the National Housing Federation and others.
moved Amendments Nos. 132 to 134:
Clause 236, page 97, line 7, leave out "or occupier"
Clause 236, page 97, line 9, leave out "or occupiers"
Clause 236, page 97, line 11, leave out "and occupiers"
On Question, amendments agreed to.
Clause 240 [Warning]:
moved Amendment No. 138:
Clause 247, page 101, line 19, at end insert—
"(2A) A requirement to transfer management functions may be imposed only with the Secretary of State's consent (both as to the transfer and the terms)."
On Question, amendment agreed to.
[Amendment No. 138A not moved.]
Clause 251 [Transfer of land]:
moved Amendments Nos. 140 and 141:
Clause 253, page 104, line 31, leave out paragraph (a)
Clause 253, page 104, line 42, at end insert—
"(2A) The regulator may act under subsection (2) only with the Secretary of State's consent."
On Question, amendments agreed to.
Clause 254 [Restrictions on dealings during inquiry]:
moved Amendments Nos. 142 and 143:
Clause 254, page 105, line 22, leave out paragraph (a) and insert—
"(a) that the affairs of the registered provider have been mismanaged,"
Clause 254, page 105, line 27, leave out from "satisfied" to "have" in line 30 and insert "that the affairs of the registered provider"
On Question, amendments agreed to.
Clause 255 [Restrictions on dealings following inquiry]:
moved Amendments Nos. 145 and 146:
Clause 257, page 107, line 1, leave out paragraph (a) and insert—
"(a) that the affairs of the registered provider have been mismanaged,"
Clause 257, page 107, line 6, leave out from "satisfied" to "have" in line 9 and insert "that the affairs of the registered provider"
On Question, amendments agreed to.
Clause 258 [Removal or suspension following inquiry]:
moved Amendments Nos. 154 to 157:
Schedule 9, page 203, line 28, at end insert—
"Inheritance Tax Act 1984 (c. 51)
In section 24A(2) of the Inheritance Tax Act 1984 (gifts to housing associations) before paragraph (a) insert—
"(za) a non-profit registered provider of social housing;"."
Schedule 9, page 204, line 12, at end insert—
The Income and Corporation Taxes Act 1988 is amended as follows.
In section 376(4) (qualifying borrowers and qualifying lenders) for paragraph (k) substitute—
"(k) the Regulator of Social Housing,".
In section 488(7A) (co-operative housing associations)—
(a) at the beginning insert "In relation to a housing association which is a registered provider of social housing", and(b) for paragraph (a) substitute "to the Regulator of Social Housing".
In section 489(5A) (self-build societies) for "Housing Corporation" substitute "Regulator of Social Housing".
In section 506B(9) (transactions with substantial donors: exceptions)—
(a) for "registered social landlord or housing association", in both places it appears, substitute "relevant housing provider", and(b) in paragraph (a) after "body" insert "which is a non-profit registered provider of social housing or which is".Taxation of Chargeable Gains Act 1992 (c. 12)
The Taxation of Chargeable Gains Act 1992 is amended as follows.
(2) For "the Housing Corporation", wherever appearing, substitute "the Regulator of Social Housing".
(3) For "the Corporation", wherever appearing, substitute "the Regulator".
(4) In subsection (1)(a) after "Housing Associations Act 1985" insert ", or in accordance with a requirement imposed under section 251 of the Housing and Regeneration Act 2008,".
(5) In the heading to the section, and in the italic heading before it, for "Housing Corporation," substitute "Regulator of Social Housing,".
(1) Section 219 (disposals by Housing Corporation, the Secretary of State, Scottish Homes and certain housing associations) is amended as follows.
(2) In subsection (1)—
(a) in paragraphs (a), (c) and (d) for "the Corporation" substitute "a housing regulator",(b) for "relevant housing association" and "association", wherever appearing, substitute "relevant housing provider",(c) in paragraph (c) after "given under" insert "section 166 of the Housing and Regeneration Act 2008,", and(d) in the words after paragraph (d) for "the Corporation", wherever appearing, substitute "the housing regulator".
(3) In subsection (2)—
(a) for ""the Corporation" means the Housing Corporation" substitute ""housing regulator" means the Regulator of Social Housing", and(b) for the definition of "relevant housing association" substitute—
""relevant housing provider" means—
(a) a non-profit registered provider of social housing,(b) a registered social landlord within the meaning of Part 1 of the Housing Act 1996, or(c) a body registered in the register maintained under section 57 of the Housing (Scotland) Act 2001."
(4) For the heading substitute "Disposals by housing related bodies".
(1) Section 259 (gifts to housing associations) is amended as follows.
(2) In subsection (1)(a) for "relevant housing association" substitute "relevant housing provider".
(3) In subsections (1)(b) and (2) for "association", wherever appearing, substitute "relevant housing provider".
(4) For subsection (3) substitute—
"(3) In this section "relevant housing provider" means—
(a) a non-profit registered provider of social housing, (b) a registered social landlord within the meaning of Part 1 of the Housing Act 1996,(c) a body registered in the register maintained under section 57 of the Housing (Scotland) Act 2001, or(d) a registered housing association within the meaning of Part 2 of the Housing (Northern Ireland) Order 1992.""
Schedule 9, page 205, line 12, at end insert—
"Finance Act 2003 (c. 14)
The Finance Act 2003 is amended as follows.
(1) Section 71 (certain acquisitions by registered social landlord exempt from charge to stamp duty land tax) is amended as follows.
(2) In subsections (1), (2) and (3) for "registered social landlord", wherever appearing, substitute "relevant housing provider".
(3) After subsection (1) insert—
"(1A) In this section "relevant housing provider" means—
(a) a non-profit registered provider of social housing, or(b) a registered social landlord."
(1) Paragraph 2 of Schedule 3 (stamp duty land tax: transactions exempt from charge) is amended as follows.
(2) In sub-paragraphs (1) and (2) for "registered social landlord" and "landlord", wherever appearing, substitute "relevant housing provider".
(3) After sub-paragraph (2) insert—
"(2A) A "relevant housing provider" means—
(a) a non-profit registered provider of social housing, or(b) a registered social landlord."
(1) Schedule 9 (stamp duty land tax: right to buy, shared ownership leases etc.) is amended as follows.
(2) In paragraph 1(3)—
"A non-profit registered provider of social housing".
(3) In paragraph 1(5) after "social landlord" insert "or registered provider of social housing".
(4) After paragraph 1(5) insert—
"(6) A grant under section 22 of the Housing and Regeneration Act 2008 which—
(a) is made by virtue of section 38 of that Act, or(b) is otherwise made to a relevant provider of social housing (within the meaning of section 38 of that Act) in respect of discounts given by the provider on disposals of dwellings to tenants,does not count as part of the chargeable consideration for a right to buy transaction to which the vendor is a relevant provider of social housing.""
Schedule 9, page 205, line 15, at end insert—
"Income Tax Act 2007 (c. 3)
In section 555 of the Income Tax Act 2007 (transactions with substantial donors: exceptions)—
(a) in subsections (2) and (3) for "registered social landlord or housing association" substitute "relevant housing provider", and(b) in subsection (3) after "body" insert "which is a non-profit registered provider of social housing or which is"."
On Question, amendments agreed to.
moved Amendment No. 158:
Before Clause 277, insert the following new Clause—
"Abolition of home information packs
(1) Sections 148 to 170 of the Housing Act 2004 (c. 34) are repealed.
(2) A person who is selling a residential property must supply the purchaser with information about the energy efficiency of the property.
(3) The Secretary of State may make regulations prescribing the particular information which is required or authorised to be included in, or which is to be excluded from, such energy efficiency information and all other incidental matters relating to it."
My Lords, we return to the subject of the home information packs. The noble Lord, Lord Graham, appears surprised but I do not see why. We have moved forward 10 days since we last debated the matter. In that debate I reported that the home information packs, which were introduced as a frightfully good idea without adequate testing, had produced a very negative result. Eight out of 10 sellers do not think that the home information pack has been any help to them in selling their property, and nor did 70 per cent of them think that it had made doing so more efficient. Curiously enough, 55 per cent of buyers did not think that it had speeded up or helped the process either.
Only a few months ago, we had the report from Sir Bryan Carsberg which took a careful look at what had happened to the home information packs and the housing market. His conclusions are highly critical. He said that the home information pack had been watered down and now appeared to consist of very little information. None the less, it still costs much the same. He said that,
"few buyers have shown an interest in the HIP, and a substantial number of conveyancers ignore its existence and recommission searches on receiving instructions from their buyer".
He summarised the position by saying that the home information pack,
"provides the worst of all worlds—it omits much of the most useful information but still imposes significant costs on the property transaction".
He raised a more fundamental objection, saying that,
"consumer well-being, in matters like property transactions, is best secured by operation of the market. The imposition of constraints by central decision makers is not likely to serve consumers well because it cannot take account of consumers' wishes in the way that the market does ... The market is better at producing customer satisfaction than legislation can be".
Since the debate only 10 days ago, the market has continued to worsen. I spoke to someone at only the beginning of the week who was familiar with the City, and he said that the trouble was that the banks effectively had no money. Through the regulators, the Government have rightly required the banks to strengthen their reserves. Given that the banks were to some extent overborrowed and overlent, they need to do that. However, the effect has been that if banks can get hold of funds, those funds are then put into their reserves. As a consequence, the money is not available for commercial use anywhere, so the market continues to devalue and depreciate. In those circumstances, anything that would reduce the cost of a transaction would undoubtedly be helpful.
I accept entirely that one should not take short-term decisions to deal with what one hopes is only a short-term situation, but the housing market is practically non-existent at the moment. You have only to look at what is happening to our main house-construction firms to see that there is a deep problem. If one is honest, the problem is so severe now that tackling it in a short-term way will not produce a solution. None the less, it would be appropriate as a gesture—it would be no more than that—to remove one possible impediment, although a tiny one, which is on the record so far as having helped to slow the market down. It has led to particular houses not being put forward for sale.
The whole question of home information packs has always been doubtful. In our party, we have always wished them to exist for no longer than they have to. We have an opportunity tonight, if we choose to take it, to remove them and remove an impediment. It might have only the most marginal effect on the market, but if it has any beneficial effect it will be worth taking that step. I beg to move.
My Lords, I was intrigued by the weight that the noble Lord placed on the words of Sir Bryan Carsberg about letting the market decide, because it was the market that decided in the past, when the problems arose of delay and cost. From day one there has been a concerted effort to denigrate the worth of HIPs. It has been difficult. As the House will appreciate, the market itself has been topsy-turvy for at least the last two or three years.
On this side of the House, we are more prepared to intervene than those on the other side. In other words, we intervened in a genuine belief that the first-time buyer, faced with delays, chains and all the rest of it, had a bad deal. Undoubtedly the main weight in the original legislation was the conditions survey, which was dropped about a year ago because there was undoubted hostility towards the idea. Where did that come from? The vested interests in business. People had been professionally involved and elevated the profession of surveyors to the degree that they virtually had a monopoly, and they did not like interference. Whether the Government got it right or wrong, that provision was dropped to make some progress.
I am not in touch with the detail, but the Government should not feel chastised at all because they have not allowed the market to decide. It was the absence of a market that was sympathetic to the needs of the consumer that led the Government to intervene. I will of course listen to what the Minister has to say, as I am sure the House will too.
My Lords, I am disappointed that we return to the issue of home information packs, because the House has debated them long and hard in the past 12 months and, finally, we agreed on the way forward. I take issue with the noble Lord, Lord Dixon-Smith—oddly, because I do not do that often—but it is unreasonable to blame home information packs and energy certificates for the current lack of mortgages in the market. We all know perfectly well that the residential market is frozen because of the lack of availability of mortgage finance.
The noble Lord said that home information packs were marginal. Abolishing them would be a gesture and a wholly retrograde step. This afternoon I spent a long time talking to some housebuilders. Not only did they want us to get rid of home information packs, but to significantly dilute all quality standards and elements of the sustainable buildings code that will make a serious difference to climate change. It is wrong to use the current, one hopes temporary, state of the capital and housing markets to renege on very hard-fought and hard-won advances in terms of the impact that the housing construction industry has on climate change. I urge noble Lords to resist the amendment.
My Lords, my noble friends have removed two of the most important planks of my argument much more eloquently and powerfully than I could have done. I am particularly grateful to my noble friend Lady Ford for her latest piece of intelligence; we must hold firmly to the principles of what we know is right and we must build differently for the future, not be destabilised by what I am sure is a temporary difficulty in the housing market—although it seems to be severe for many people.
We had a similar debate 10 days ago, as the noble Lord, Lord Dixon-Smith, pointed out. Not a great deal has changed in my argument. It was certainly the market that failed to deliver; in fact, it delivered a chaotic and protracted system of buying and selling—the longest time in Europe that it takes to buy or sell a house. This happened against a background whereby customers simply did not get the information they needed early enough to inform their decisions about a property.
The introduction of HIPs has been a first step in addressing these problems. We always said that it would be first step. We also said that we hoped that it would galvanise the market into changing itself. Indeed, it has, because the process of introducing HIPs has been much smoother than we had expected. They take on average seven days to prepare; drainage and water searches are taking three days; competition from HIPs is reducing the average cost of property searches; 85 local authorities have already reduced their charges by £30, and some by as much as £120; and energy performance certificates are being prepared within an average of two to four days. This has not been an onerous or bureaucratic exercise and important information is there for the first time.
I understand and listened with respect to what the noble Lord said about the state of the market. I am sure that he will have read the independent and thorough report that I sent him by Europe Economics on the relationships that HIPs have with the market when compared with the many other influences on what makes people buy and sell homes. The report found no evidence of an impact of HIPs on transactions and prices, and noted that any effect on listings would be short-lived and the impact on the market marginal compared to wider factors. I hope that the noble Lord accepts that, because we want to move on with industry and consumer groups to enhance and improve HIPs and ensure that consumers can get the information that they want at the right time in a format that they find useful.
My other argument with the noble Lord is that at this time of turbulence in the housing market, more change is the last thing that we want, particularly regarding home improvement packs. The industry and consumers want certainty and confidence. That is a very strong argument for rejecting the amendment. More than 750,000 HIPs have now been produced, and energy performance certificates have put into the hands of consumers information which previously they never had. This is important information at a time of rising fuel costs. I know the noble Lord understands that.
With respect, I cannot accept the amendment and I hope that the noble Lord will withdraw it.
My Lords, the essential arguments have not changed; they go over similar ground to that covered 10 days ago. I want to raise three points. First, the amendment would keep the energy performance certificate; that is not an issue. Part of my reluctance about HIPs is because the energy performance certificate is needed on all housing now. Relying on the market to distribute energy performance certificates is a basically flawed strategy.
The second problem is that, for better or worse, the home information pack really is not fit for purpose. If it were, we would not have passed, only a few weeks ago, yet another extension of the exemption on first-day advertising and sale, so that HIPs only have to be applied and do not have to be available from day one. If there was confidence that they were doing a genuinely good job, we would not have passed that exemption when we did. I should be surprised if, when the time comes, we do not see yet another request for another exemption period. So long as that is in place, the Government's confidence in their own product, if one can put it that way, is deeply flawed.
Thirdly, the sustainable building code is nothing to do with HIPs. That code will apply in particular to new buildings but it will inevitably—because we want to see it—work its way through into the existing housing market. It will not be an issue in the marketing of property; people buy their property as it is. The evidence is that people buy their property without particular regard to the home information pack and most people usually make a commitment to buy before they have seen it. So long as that is so, we cannot say that this is a benefit to the market.
I agree that this could have only a marginal effect on present circumstances. I also agree that the existence of the pack has nothing to do with current marketing or the quality of housing except in so far as the really useful part of it—the energy performance certificate—is part of the pack; we need the energy performance certificates, and we intend that they should continue. There really is no case for sustaining this unsustainable bit of marketing nonsense. I wish to test the opinion of the House.
My Lords, it would be an understatement to say that this is a large group of amendments, but it is the case. Many of them are intended to respond to concerns raised by noble Lords and Members of the other place. The amendments relate to three sets of provisions in Part 3: tenant ballots, family intervention tenancies and the right to buy.
I shall begin with Amendments Nos. 159, 160, 161 and 162, which relate to tenant ballots. These amendments are intended to improve the working of Clause 292, which itself amends Schedule 3A to the Housing Act 1985.
Amendment No. 159 would bring forward the date on which the local authority could hold a ballot on its proposals. Under the Bill as drafted, the local authority would have to wait until the time for making a representation to the Secretary of State had expired. The amendment would allow the local authority to hold a ballot as soon as it had served the notice of its proposals on the tenants. This will make for a more flexible process.
Amendment No. 160 responds directly to the concerns raised by my noble friends Lord Whitty and Lady Jones. They spoke eloquently about the need to ensure that the consultation and ballot process prior to stock transfer is conducted fairly and properly. We agree. The amendment would require the Secretary of State, or Welsh Ministers in relation to Wales, to publish guidance on the consultation process with tenants and the holding of ballots prior to the transfer of council housing stock to registered social landlords. The amendment would also require local authorities to have regard to that guidance.
The Government want to put these requirements in the Bill to reflect our commitment to ensuring that tenants are properly involved in decisions about the future management of their homes. We consider that this amendment will provide a safeguard in circumstances where there is considerable scepticism about the willingness to involve tenants effectively or to have regard to the view of the majority.
Amendment No. 162 is a minor amendment. It would amend the definition of "registered social landlord" in Wales to take account of the changes that are being made in Part 2 of the Bill. Once Clause 63 is fully in force, the definition of a registered social landlord will be relevant only to Wales.
Amendments Nos. 163 to 175 and Amendments Nos. 205 and 207 all relate to family intervention tenancies. These amendments have two main purposes. A number are minor and technical, and are intended to improve the functionality of the clauses. I do not propose to run through these. The other group addresses concerns raised by the noble Baroness, Lady Hamwee, and Shelter and will therefore be of more general interest to noble Lords. They are aimed at further clarifying the circumstances under which family intervention tenancies can be used. They address concerns that FITs could be used inappropriately alongside support programmes that are not of sufficient quality or intensity. We accept that that is a legitimate concern. It is better that we include additional safeguards where they are sensible and do not unduly compromise the flexibility to carry out valuable project activities.
One of the main purposes of the FIT is to provide behavioural support to the tenants of family intervention tenancies. The purpose of the support services is to address exactly the kind of behaviour that led to the tenant's anti-social behaviour. Through these amendments, we have specified that the behaviour support services provided under the FIT scheme should be such services as are identified in the behaviour support agreement between the tenant, the landlord and the local housing authority.
Behaviour support agreements, often called "support contracts", are commonly used to outline the support that will be provided to families referred to family intervention projects. They set out clearly what support will be offered and by whom, and what will be expected in return from the families. This ensures that family intervention tenancies will be used only where an agreement of this nature is in place. It would be difficult to conceive of an agreement that specified that support services should be sporadic or not of a type sufficient for the purpose of addressing the underlying causes of anti-social behaviour.
Finally, Amendments Nos. 180 to 187, 200 and 204 relate to the right-to-buy provisions. The bulk of these amendments—namely, Amendments Nos. 180 to 186, 200 and 204—are designed to clarify aspects of the review procedure that Clause 304 introduces. They do this in four ways. First, they provide that when a redetermination of value is requested following court proceedings, no party may request a review of the original determination which that redetermination has superseded. However, they will be able to request a review of the redetermination itself. Secondly, when the value of a property is determined, redetermined or reviewed, they specify the start date of the 12-week period in which a tenant must decide whether to go ahead with his right-to-buy application. Thirdly, they clarify that the landlord must advise the tenant that a review of either a determination of value or a redetermination can be requested by either the landlord or the tenant, and they clarify the effect of either of them doing so. Finally, they remove a superfluous phrase from Section 128(2) of the Housing Act 1985— and I am very much in favour of removing superfluous phrases.
Amendment No. 187 is slightly different. It relates to Clause 307, which will give local authorities and registered social landlords the power to buy a share—formally, an "equitable interest"—in flats that they have let on long leases. This power is to be used, where all parties agree, for the purpose of assisting the owner of such a flat—the leaseholder, formally referred to as "the tenant"—to meet some or all of the service charges that he or she is liable to pay towards the cost of repairing, maintaining or refurbishing the building in which their flat is situated and the surrounding estate grounds. That fulfils the Government's commitment, in our Statement to Parliament on
With this large group of amendments, we have done our best to address concerns raised by noble Lords at different stages, as well as some broader issues of concern. I am sure that most noble Lords will find them welcome. I beg to move.
moved Amendments Nos. 160 and 161:
Clause 292, page 125, line 32, at end insert—
"(3A) After paragraph 5 insert—
5A (1) The appropriate person must give guidance to local authorities about complying with the requirements of paragraph 3 as to consultation.
(2) The appropriate person must publish guidance given under this paragraph as soon as reasonably practicable after giving it.
(3) Local authorities must, in complying with the requirements of paragraph 3 as to consultation, have regard to the guidance for the time being in force under this paragraph.
(4) The appropriate person may revoke guidance given under this paragraph.
(5) References in this paragraph to giving guidance include references to giving guidance by varying existing guidance.
(6) In this paragraph "the appropriate person" means—
Clause 292, page 125, line 33, leave out "and (3)" and insert "to (3A)"
On Question, amendments agreed to.
Clause 294 [Requirements to co-operate in relation to certain disposals of land]:
moved Amendments Nos. 163 to 175:
Clause 295, page 128, line 37, at end insert "new"
Clause 295, page 128, line 39, at end insert "(unless otherwise required to do so)"
Clause 295, page 129, line 29, at end insert—
""behaviour support agreement" means an agreement in writing about behaviour and the provision of support services made between the new tenant and the local housing authority concerned (or between persons who include those persons);"
Clause 295, page 129, line 30, after "means" insert "relevant"
Clause 295, page 129, line 34, leave out "preventing" and insert "addressing"
Clause 295, page 129, line 39, at end insert—
""relevant support services" means support services of a kind identified in a behaviour support agreement and designed to meet such needs of the recipient as are identified in the agreement"
Clause 295, page 130, line 27, at end insert "new"
Clause 295, page 130, line 29, at end insert "(unless otherwise required to do so)"
Clause 295, page 131, line 17, at end insert—
""behaviour support agreement" means an agreement in writing about behaviour and the provision of support services made between the new tenant, the landlord and the local housing authority for the district in which the dwelling-house which is to be subject to the new tenancy is situated (or between persons who include those persons);"
Clause 295, page 131, line 18, after "means" insert "relevant"
Clause 295, page 131, line 22, leave out "preventing" and insert "addressing"
Clause 295, page 131, line 26, at end insert—
""local housing authority" (and the reference to its district) has the same meaning as in the Housing Act 1985 (see sections 1 and 2(1) of that Act);"
Clause 295, page 131, line 30, at end insert—
""relevant support services" means support services of a kind identified in a behaviour support agreement and designed to meet such needs of the recipient as are identified in the agreement"
On Question, amendments agreed to.
moved Amendment No. 176:
After Clause 297, insert the following new Clause—
"Possession orders and The European Convention on Human Rights
A possession order may not be made by any court in respect of any dwelling-house occupied by any person as their home unless the court is satisfied that to make the order would be compatible with Article 8 of the European Convention and, in particular, that it would be proportionate for an order to be made."
My Lords, this is another amendment that has been suggested to me by the Housing Law Practitioners Association; I said in Committee that I have always found its amendments very apposite. It is prompted by a judgment which just preceded the Committee stage, and therefore it was just too late to table the amendment at that stage.
In the case of McCann, the European Court of Human Rights ruled in favour of a former tenant that his summary eviction following termination of his tenancy by his wife's notice to quit was contrary to Article 8 of the European convention, and he was awarded damages. I appreciate that by tabling this amendment I am seeking to do the Government's business, but perhaps they can read it as a prompting amendment to enable us to hear what they will do about the judgment.
The court held that:
"The loss of one's home is a most extreme form of interference with the right to respect for the home. Any person at risk of an interference of this magnitude should in principle be able to have the proportionality of the measure determined by an independent tribunal in the light of the relevant principles under Article 8 of the convention, notwithstanding that, under domestic law, his right of occupation has come to an end".
Unless we have legislation, the issue of proportionality to which the court referred is to be considered by the courts when making a possession order in cases where the occupiers would otherwise have no defence in domestic law.
It has been held that there are only two means, or gateways, as they are termed. First, if a seriously arguable point is raised that the law is incompatible with Article 8, the county court should deal with the argument by giving effect to the law by interpreting the law to make it compatible or by adjourning proceedings to enable the compatibility issue to be dealt with by the High Court. The difficulty with that is that domestic law excludes consideration of proportionality in such cases and interpretations may differ. Even then, the incompatible domestic law continues to bind the parties until Parliament has remedied the matter. The second gateway is essentially judicial review, which is not well adapted to this situation. In the McCann case, the court said that it is not well adapted to the resolution of sensitive factual questions better left to the county court ordering possession. In addition, it does not provide an opportunity for an independent tribunal to examine the proportionality issue.
Until we have a change or the House of Lords rules differently, the lower courts are stuck. The only certain way of ensuring that the case I quoted is followed in domestic law is by legislation. I therefore look forward to hearing from the Minister what the Government have in mind to deal with the problem. I beg to move.
My Lords, I appreciate why the noble Baroness has raised this issue, and I shall do my best to address the concerns raised by the ECHR case McCann v UK in which judgment was handed down in May. I do not want to go into great detail about the background to the McCann case, except to say that it involved a complex and unusual family situation. That said, the judgment seemed to raise a point of more general application; namely, whether a public authority tenant can raise an Article 8 defence—the right to privacy—to a possession claim brought against him by his local authority landlord.
In order for the possession procedure to be Article 8 compliant, any interference with Article 8 rights—and there will usually be interference with those rights in proceedings for possession of someone's home—must be three things: lawful; in pursuit of a legitimate aim; and a proportionate means of achieving that aim. I should point out that while the amendment is very generally worded so it might be assumed that it would apply to all homes, only public authorities would have a duty to their tenants under the Human Rights Act.
In McCann, the Strasbourg Court held that the interference with Mr McCann's rights was lawful and pursued the legitimate aim of protecting the rights and freedoms of others. The problem it identified was that the interference was not proportionate to the aim pursued, as the noble Baroness said. The court held that, contrary to the view that had previously been taken by UK courts, a public authority tenant who faces possession proceedings should be able to raise an Article 8 defence to those proceedings and that, where the circumstances were exceptional, he or she should be able to require the court to examine the issue. It is worth observing that the European Court in McCannobserved that,
"it would be only in very exceptional cases that an applicant would succeed in raising an arguable case which would require a court to examine the issue".
Section 2(1) of the Human Rights Act 1998 provides that any domestic court determining a question connected with a convention right must take into account any relevant judgment of the Strasbourg Court. The McCann judgment itself therefore seems to make this amendment extraneous because domestic courts are obliged to take what Strasbourg said into account. That means that they must already consider whether possession action is the proportionate response.
The amendment proposes that we should go further than that by providing that the court should have to allow a full hearing of any Article 8 defence raised, no matter whether the circumstances of the defendant were exceptional. That is disproportionate because it is likely to complicate and delay the vast majority of cases whereas, as the Strasbourg hearing affirmed, only an exceptional few are likely to hold reasonable grounds. On those grounds, we do not consider that that position could be easily justified. The noble Baroness will know that this issue and the impact of McCann on domestic possession proceedings are currently before the House of Lords in the case of Doherty v Liverpool City Council and that while that is happening I cannot comment on it. Therefore, this is work in progress to an extent.
My Lords, I am not remotely qualified to take the argument any further, but I shall make one point that I did not make in moving the amendment because it would have been unfair to expect the Minister to respond to it. It is that although the amendment refers to a dwelling house, there could be an equivalent situation in a caravan. I should have thought that similar points arise. In view of the Minister's explanation of the current position, I am not going to press this matter, but those who are concerned with supporting Travellers will read the comments as if they applied more widely. The choice of the words "dwelling house" was a little accidental, and I should have thought about the need to expand them or define them in some way. I am grateful for the Minister's reply. I beg leave to withdraw the amendment.
moved Amendment No. 176A:
Schedule 11, page 212, line 21, at end insert—
"( ) an assured tenancy which is not an assured shorthold tenancy if the original tenancy was a secure tenancy and during the termination period the interest of the former landlord has been transferred to a landlord which is not capable of granting secure tenancies,"
My Lords, I shall speak also to Amendments Nos. 177A and 177B which are in this group, as is government Amendment No. 177, which also covers the issue of applying provisions about security to successor landlords. The Government's amendment gives the Secretary of State an enabling power to extend the legislation to transferees at a later date. As we are at a late state of the Bill, my amendment immediately remedies an omission in the changes that have been made to the law relating to tolerated trespassers to cover the lacuna relating to tenancies where a person was formerly a council tenant but his home has been the subject of a stock transfer order.
My amendment would allow a former tolerated trespasser to take on an assured tenancy agreement. The amendment would not only benefit tolerated trespassers in a stock transfer situation, but give the same benefit where a housing association is merged or taken over and there is a transfer of stock between associations. The Minister will argue that it is better to take these things a little more slowly and in a slightly more measured way. I have some sympathy with that, but I use this opportunity to put a bit of pressure on the Government to keep up the momentum. I beg to move.
My Lords, I am happy to bear the pressure, because we are seeking to do the same thing. The noble Baroness and I both recognise that the existence of tolerated trespassers causes serious problems to tenants and landlords. We want to resolve that to ensure that no tolerated trespassers are created in future.
My amendments would amend Part 2 of Schedule 11 to deal with the situation in respect of tolerated trespassers whose landlord changes. The most usual situation where that happens, as the noble Baroness implied, is transfer from a local authority to a registered social landlord following a large-scale voluntary transfer. Less usual examples are where one RSL takes over the stock of another, or where one local authority is substituted for another as a result of boundary changes.
It is certainly true that, while Part 2 of Schedule 11 provides for all other existing tolerated trespassers to receive new tenancies, it does not at present cover the situation of those who have transferred to a new landlord. That is why we are introducing an amendment today which will put that right.
My problem with the noble Baroness's amendment is not that it is extra speedy, it is just that it is not quite as simple as she suggests. Our aim is to provide certainty as well as appropriate speed. As far as possible, the aim is to provide that both landlord and tenant are in the same position as they would have been had the tenant not become a tolerated trespasser and that neither is disadvantaged by the changes. Paragraph 17 of Part 2 of Schedule 11 provides, with one exception, that the new tenancy will be the same as the original tenancy. That means that a tolerated trespasser of an RSL who had previously held a demoted tenancy will be granted a demoted tenancy on commencement.
However, the noble Baroness's amendments would provide all transferring tolerated trespassers with a full assured tenancy. We are aware that at the moment different stock transfer RSLs take different approaches to how they deal with occupants who transfer to them as tolerated trespassers. That is part of the problem. Some grant full assured tenancies; others grant only assured shorthold tenancies—usually with a promise of a full assured tenancy after a certain time if the tenant behaves well.
There are also some transferee landlords who fail to provide a new tenancy, or to do anything else to regularise the position for transferring tolerated trespassers. That could happen for different reasons, including an intention by the landlord to request the court to proceed with an eviction. However, as with other existing tolerated trespassers, the court may not grant that request, with the result that the occupant would be left in their current anomalous position. We do not have information on how many tolerated trespassers are in this position.
Specifying in the legislation that all transferring tolerated trespassers should receive a full assured tenancy would not only be out of line with the general thrust of Part 2 of Schedule 11; it would also remove the choices that transferee landlords currently have. This is not possible or right to do without first consulting landlords.
We consulted generally on the provisions in Schedule 11 in August 2007, and the landlords and other housing professionals who responded to that consultation strongly supported remedying the situation for future and existing tolerated trespassers. However, we did not consult specifically on the issue of transferring tolerated trespassers. It would be wrong to make those changes without first seeking the views of RSLs and local authority landlords, because they will be affected by those changes.
We would then extend the consultation more widely to include private landlord representative organisations, as well as tenant and advisory organisations. However, it is true that any resulting addition to the provisions is unlikely to affect private landlords to any great extent.
Although I have to say that there are certain shortcomings with the amendments tabled by the noble Baroness—not with mine—we accept that it is unfair for a change of landlord outside a tolerated trespasser's control to determine whether they have their tenancy status restored or not. We also recognise that if we do not remedy this situation, it could lead to subsequent litigation.
Amendment No. 177, which I am introducing today, gives the appropriate national authority—the Secretary of State in England and Welsh Ministers in Wales—the power to provide by order that a new tenancy will arise wherever there has been a change of landlord since the former tenant became a tolerated trespasser. It also provides for the order to set out the detail of how that would work. We intend that that should be kept as close as possible to the existing provisions for new tenancies in Schedule 11. Amendment No. 177 will meet the concerns raised with the department by a number of stakeholders, including Shelter. I am very pleased that it will.
The provisions will relate only to those tolerated trespassers who have not signed a new tenancy agreement with their new landlord. As I said, however, as this is an issue which we did not include in our earlier consultation, and as we recognise that RSLs in particular may have strong views about the form of tenancy which should be granted in this situation, we have provided a delegated power so that provision can be made by secondary legislation, rather than by inclusion in the Bill. As I said, that will allow for a full consultation process to be undertaken before final decisions are made on the detail.
We intend that if, following consultation, the power is exercised, the secondary legislation will come into force at the same time as commencement of the main provisions on tolerated trespassers in the Bill. In that way, we will ensure that transferring tolerated trespassers are not disadvantaged by the timing of these changes. I hope that the noble Baroness will appreciate that.
Given that that will end the current situation in which RSLs have discretion as to what sort of tenancy to offer transferring tolerated trespassers, we think it right that the regulation-making powers should be subject to the affirmative resolution procedure. Amendments Nos. 195 and 198 therefore make the necessary consequential amendments to Clause 318, which deals with orders and regulations.
Finally, Amendments Nos. 178 and 179 are minor technical amendments. They are necessary for completeness to add a missing definition of "successor" in paragraph 25 of Part 2 in relation to demoted tenancies, where the general assured tenancy succession rules would apply.
I hope that that rather long-winded explanation satisfies the noble Baroness on her amendments. I think that we have closed the loophole effectively, which is a good thing.
My Lords, transferring tolerated trespassers is almost as difficult as, "She sells seashells". The noble Baroness said that my amendments are not that easy. If I have learnt anything about housing law it is that it is not that easy. I beg leave to withdraw the amendment.
moved Amendment No. 177:
Schedule 11, page 215, line 18, at end insert—
23A (1) The appropriate national authority may by order provide for this Part of this Schedule to apply, subject to such modifications as may be specified in the order, to successor landlord cases.
(2) For the purposes of sub-paragraph (1) a successor landlord case is a case, in relation to an original tenancy, where the interest of the ex-landlord in the dwelling-house—
(a) has been transferred to another person after the end of the original tenancy and before the commencement date, and(b) on the commencement date, belongs to the person to whom it has been transferred or a subsequent transferee."
On Question, amendment agreed to.
[Amendments Nos. 177A and 177B not moved.]
moved Amendments Nos. 178 and 179:
Schedule 11, page 216, line 13, after second "tenancy" insert "or which is a demoted tenancy to which section 20B of the Act of 1988 applies"
Schedule 11, page 216, line 14, leave out "the Act of 1988" and insert "that Act"
On Question, amendments agreed to.
Clause 304 [Review of determination of value]:
moved Amendments Nos. 180 to 186:
Clause 304, page 137, line 20, at end insert—
"(6A) A review notice may not be served in relation to a determination which is subject to a re-determination required in pursuance of section 128(3) (but this does not prevent the service of a review notice in relation to the re-determination)."
Clause 304, page 138, line 28, at end insert—
"(9A) This section does not apply to a determination which is subject to a re-determination required in pursuance of section 128(3) (but this does not prevent this section applying to the re-determination)."
Clause 304, page 138, line 42, leave out from "intention)," to end of line 47 and insert "in paragraph (b), for the words from ", the service" to the end substitute "(or where the landlord exercises his right to have the value of the dwelling-house re-determined by the district valuer), the relevant event".
( ) After section 125D(2) (period for serving tenant's notice of intention) insert—
"(3) In subsection (2)(b) "the relevant event" means—
(a) where a review notice was capable of being served under section 128A in relation to the determination or re-determination but no such notice was served during the period permitted by that section, the service of the notice under section 128(5) stating the effect of the determination or re-determination,(b) where a review notice was served under section 128A in relation to the determination or re-determination and section 128B(3) applied, the service on the tenant of the notice under section 128B(3), and(c) where a review notice was served under section 128A in relation to the determination or re-determination and section 128B(5) applied, the service of the notice under section 128B(7).""
Clause 304, page 138, line 47, at end insert—
"( ) In section 128(2) (power of tenant to require determination or re-determination of value) omit ", or as the case may be re-determined,".
( ) In section 128(5) (notice of determination or re-determination) for the words from "stating" to the end substitute "stating—
(a) the effect of the determination or re-determination,(b) the matters mentioned in section 125(2) and (3) (terms for exercise of right to buy), and(c) the effect of section 128A(2) (right of district valuer to serve review notice and of landlord and tenant to request that such a notice is served)."
Clause 304, page 139, line 14, leave out from "tenant)," to end of line 18 and insert "in paragraph (b), for the words from ", the service" to the end substitute "(or where the right to have the value of the dwelling-house re-determined by the district valuer is or has been exercised by the landlord), the relevant event".
( ) After section 136(2) (period for serving notice of intention where there is a change of secure tenant) insert—
"(2A) In subsection (2)(b) "the relevant event" means—
(a) where a review notice was capable of being served under section 128A in relation to the determination or re-determination but no such notice was served during the period permitted by that section, the service of the notice under section 128(5) stating the effect of the determination or re-determination,(b) where a review notice was served under section 128A in relation to the determination or re-determination and section 128B(3) applied, the service on the new tenant or (as the case may be) the former tenant of the notice under section 128B(3), and(c) where a review notice was served under section 128A in relation to the determination or re-determination and section 128B(5) applied, the service of the notice under section 128B(7).""
Clause 304, page 139, line 22, at end insert ", section 128B applies"
Clause 304, page 139, line 27, at end insert—
"(ab) no such review notice has been served but such a notice may still be served under section 128A,"
On Question, amendments agreed to.
Clause 307 [Former right to buy and other flats: equity share purchases]:
moved Amendment No. 187:
Clause 307, page 142, line 38, leave out from "authority"" to the end of line 45 and insert "—
(a) does not include a registered provider of social housing, or a registered social landlord, which is a co-operative housing association;(b) includes a co-operative housing association which is neither a registered provider of social housing nor a registered social landlord;"
On Question, amendment agreed to.
Clause 312 [Ineligible persons from abroad: statutory disregards]:
My Lords, this is a JCHR amendment, which I must admit I had difficulty getting my pea-sized brain around, but I think that it can be summed up as this. If you are a mother with five children whose immigrant status is not settled, the old law discriminated against them. The court found that wrong. The Government, at the pressing of the noble Baroness, Lady Hamwee, and others, introduced an amendment in Committee that set about rectifying the matter. However, they said that those people, instead of being on a par with someone whose entire family had completely normal immigrant status, could get only a 12-month short-hold tenancy. This seems to several of us to continue to be discriminatory and liable to fall foul of the lawyers and the courts when they get their hands on it. The Government have said that very few people are involved. However, one of the signatories to the letter to the Government alleged that the number is rather more. All I am really asking is: please will the Government explain the discriminatory action in their amendment? This requires serious consideration, because no one wants to have everyone carted in front of expensive lawyers again. It is a waste of time and money, and apart from that it is wrong. I beg to move.
My Lords, I fear that I am not going to be as brief, succinct or clear as the noble Earl. He is absolutely right that this is hugely complex, and I will have to explain it for the record if he will bear with me. We had a long exchange in Committee about this, and I am afraid that my explanation this evening will be much the same. I will also have to reply to the letter from the Joint Committee on Human Rights. We received it only yesterday and I have not had time to reply, so I will address the contents of that letter as well.
My Lords, the noble Earl certainly summed up the crucial points succinctly. I will have to say a bit more about why there is a continuing difference in the treatment of certain people. I would not call it discrimination, but there is a continuing difference. If the House will bear with me, I will have to read my speaking notes on this.
This is a complex area of law. As the noble Earl said, in some ways the issue at stake is what help a mixed household, in which household members have different immigration status, should get if its members become homeless. In Committee, I gave a long explanation of definitions of what constituted eligibility, for example. I will not do that here, because I will have to provide more detail in response to the letter from the JCHR.
In Committee, I also tabled amendments on behalf of the Government to remedy the incompatibility. These now comprise Clause 312 and Schedule 15. At the time, the noble Baroness, Lady Hamwee, asked whether there might be an opportunity for the Joint Committee on Human Rights to consider the Government's proposed remedy before the proceedings on the Bill come to an end. Since then, the Joint Committee has helpfully written to me and asked for clarification of some aspects of the remedy. I will address that in a moment.
The starting point is this. As the noble Earl said, at present if a British citizen, with a foreign pregnant partner or a dependent child who has leave to stay on condition of no recourse to public funds, becomes homeless and is not vulnerable in his own right, that family will not be housed under homelessness legislation. The Government's remedy in Schedule 15 is to ensure that, in future, households in these circumstances will be provided with suitable housing—that is the big step forward—while continuing to ensure that people from abroad with no claim to UK public resources cannot confer entitlement to long-term social housing. Long-term housing is what we are talking about here.
It will not have gone unnoticed that the noble Earl's amendment seeks to effect a remedy with a short clause of just two lines, whereas the Government's own amendments extend to a rather long and very detailed schedule. The noble Earl's amendment would remove only part of the provision that has been declared incompatible; that is, Section 185(4)(b). The other part, Section 185(4)(a), stays in place. One prevents local authorities taking account of ineligible family members, which is the sort of family he describes, for the purpose of establishing priority need. The other prevents account being taken of ineligible family members for the purpose of establishing homelessness. Both have been declared incompatible, but only to a limited extent. In fact, there may be no need to sweep away completely either of those provisions. The noble Earl's amendment sweeps one away completely but not the other one. He obviously wants to take our remedy out of the Bill completely.
I believe in simplicity, and I would like to be able to deliver a neat solution. However, the reality is that those declarations of incompatibility give rise to very difficult policy issues that bear on the interface between immigration policy and the provision of social welfare assistance. The declarations of incompatibility do not lend themselves to being resolved so simply. They have not been easy to resolve, which is one of the reasons for the considerable delay. We are committed to remedying incompatible legislation as quickly as possible, but we must also maintain a strong and fair immigration policy.
The principal difficulty for us in these cases is that we do not accept that a person from abroad who is here illegally—that is, he requires leave to enter or remain in the UK and does not have it—or who has been granted leave to stay but only on the condition that he will not have recourse to public funds, should be able to convey on another person priority or entitlement for long-term social housing. The point is this. Homelessness assistance is one thing, but long-term social housing is another. It is a scarce and valuable resource. It offers security of tenure for life at a sub-market rent, as well as other valuable benefits such as the right to buy or acquire and rights of succession.
In England and Wales, acceptance of the main homelessness duty brings with it the right to reasonable preference in the allocation of social housing. In about 70 per cent of cases in England, the main homelessness duty is brought to an end with an offer of social housing. The noble Earl's amendment does not address this problem. On the contrary, it would mean that local authorities would be required to allow anyone who was here illegally or on the condition of no recourse to public funds to convey on another person entitlement to homelessness assistance and thus priority for long-term social housing, with all the benefits that I mentioned. That is not acceptable.
There are other issues which the noble Earl's amendment does not address. There have been two declarations of the incompatibility of Section 185(4). In the second, in the case of Gabaj, Section 185(4) was declared incompatible to the extent that it required a pregnant member of the household of a British citizen to be disregarded when determining not only whether the British citizen had a priority need but whether he was homeless. Section 185(4)(a) is the section that requires ineligible household members to be disregarded when determining whether the applicant is homeless. However, the noble Earl's amendment would repeal only Section 185(4)(b), which requires ineligible household members to be disregarded when determining whether the applicant has priority need. The amendment does not address Section 185(4)(a).
There is another, broader, issue to be considered. The noble Earl's amendment addresses Section 185(4) of the Housing Act 1996. This section extends only to England and Wales, but there is an equivalent provision in Section 119(1) of the Immigration and Asylum Act 1999, which governs the different forms of homelessness legislation that apply in Scotland and Northern Ireland. Although Section 119(1) has not been declared incompatible, the Government's view is that it will be incompatible by implication and must be remedied together with Section 185(4). That is a technical explanation of why the noble Earl's amendment will not serve his purpose, and is why Schedule 15 of the Bill, which delivers the Government's remedy, is as extensive as it is: it has to make provision in respect of three different jurisdictions. The issue at stake is what should happen if the applicant is eligible for assistance but the dependent child or pregnant partner is not, even if in normal circumstances the dependant would confer entitlement to assistance.
Section 185(4) of the 1996 Act and Section 119(1) of the 1999 Act mean that household members who are not eligible cannot be taken into account when deciding whether an applicant is homeless or in priority need—the situation described by the noble Earl. The courts ruled that the application of Section 185(4) to British citizen applicants is incompatible with human rights legislation because it discriminates against those British citizens who are affected. It denies them the help that other British citizens who are not affected will get and the discrimination is not justified. Of course, the noble Earl will know of the Morris case, which was addressed in Committee. Clause 312 and Schedule 15 address the declarations of incompatibility in these cases.
The principal effect of Schedule 15 is that the incompatible provision, Section 185(4) of the 1996 Act and Section 119(1) of the 1999 Act, will no longer apply to applicants who are British citizens. Nor will it apply to other eligible applicants with a specific right to live in the UK; for example, Commonwealth citizens with a right of abode or people with an EU treaty right to reside. We have willingly addressed that, which means that these applicants will be owed a duty to have accommodation secured for them where they meet the normal entitlement criteria, even if their application rests on an ineligible dependant.
However, as I have said, the Government remain concerned that those migrants who are here illegally or on condition of no recourse to public funds—referred to as restricted persons in my amendments—should still not be able to convey priority or entitlement for long-term social housing. Schedule 15 provides that where a homelessness duty is owed in a restricted case, where the applicant is owed the duty through reliance on a restricted person, so far as possible, the duty should be discharged by arranging an offer of housing in the private rented sector.
As the noble Earl said, this housing will need to be made available for at least 12 months and must be suitable for the applicant. It will also need to be reasonable for the applicant to accept the offer. If for any reason the local authority, or the Northern Ireland Housing Executive, is unable to arrange a suitable private sector offer, it would be open to the authority to bring the duty to an end with an offer of social housing. So that remains a final offer. However, any preference or priority for an allocation of social housing normally awarded to someone owed the homelessness duty will be withheld.
Restricted persons include illegal entrants, asylum seekers, failed asylum seekers and people who have entered the UK on a visitors' visa and have overstayed. Schedule 15 does not apply to eligible applicants who are subject to immigration control; for example, someone granted refugee status, humanitarian protection or discretionary leave. The current restrictions in Section 185(4) and Section 119(1) will continue to apply to those applicants. But I should stress that, as now, they will not be able to rely on any ineligible household members to confer priority need or homelessness.
I shall weary the House a little longer in order to respond to the specific questions on the ECHR letter. Unfortunately, I have not been able to reply. The Committee asked for a fuller explanation of the Government's view that our proposals will be compatible. It also asked why we think that maintaining a distinction between those eligible applicants who rely on ineligible household members to convey entitlement and those eligible applicants who do not is justified and compatible with the right to enjoy respect for private and family life without discrimination.
As I have said, the Government acknowledge that Schedule 15 will result in a difference of treatment between eligible applicants depending on their particular household circumstances. We have given this very careful consideration and are satisfied that those differences of treatment are justifiable because of the policy considerations. The Court of Appeal questioned the policy objectives underlying Section 185(4). In the court's view, denying a person from abroad the right to be secured accommodation by a local authority would put pressure on that person to leave the country and where the person was a British citizen with a right of abode that was unjustifiable.
First, we acknowledge that British citizens who are habitually resident here and who become unintentionally homeless should be entitled to be provided with accommodation to relieve their homelessness, even where their priority need or homelessness derives from ineligible dependants or other ineligible household members. For all the reasons that I have explained, the provision of long-term social housing—it is a scarce resource which brings valuable benefits with it, including the right-to-buy—is another matter. We strongly believe it is justifiable policy that, as far as possible, restricted persons should not be able to convey entitlement or priority for long-term social housing on another person through the operation of the homelessness legislation.
Secondly, we also agree with the Court of Appeal that a clear distinction needs to be made in the application of immigration control between people who have a right to live in the UK and those who do not. People without such a right may be granted leave to enter or remain in the UK. Even where leave is granted they continue to be subject to immigration control. Their leave granted remains subject to the possibility of withdrawal or loss; for example, if they leave the UK for a period of two years or more. It does not confer an unqualified right to be here.
In our view, persons subject to immigration control have a lesser claim to social housing than British citizens and others with a right of abode in the UK or a right to equal treatment under EU law. We believe that it is appropriate and justifiable for Section 185(4) and Section 119(1) to continue to apply in respect of housing applicants who are subject to immigration control. We consider that Schedule 15 will deliver a remedy which is compatible with the European Convention for the following reasons. It will ensure that British citizens and other eligible applicants who have a right to live in the UK now will be able to rely on ineligible household members to convey entitlement to homelessness assistance. They will no longer be denied accommodation as a result of the immigration status of their dependants or be placed under pressure which could make them consider leaving the UK because they were unable to obtain accommodation when faced with homelessness.
The declarations of incompatibility do not extend to the effect of Section 185(4) on eligible applicants who are subject to immigration control and do not have a right to be here. We do not consider that there is a need to extend the remedy to them. There is strong policy justification, weighty reasons, why people who only have permission to be in the UK should not be able to rely on ineligible persons to convey entitlement to homelessness assistance or priority for long-term social housing. Perhaps I may remind the House that none of that affects the ability of eligible people, such as refugees, to obtain homelessness assistance if they are vulnerable in their own right.
The Joint Committee also asked what information the Government have to support my statement in Committee that Section 185(4) affects a very small number of people. We do not routinely collect data that identifies the number of cases where applications for homelessness assistance falls within the scope of Section 185(4). However, in May 2008, my department asked all local housing authorities in England informally to provide an indication of the number of such cases that they have dealt with over the past year. Responses have been received from 188 local authorities—53 per cent of the total—and 57 per cent were nil returns. Many of the positive responses have provided the authority's best estimate of the cases experienced and are very good initial estimates in grossing up non returns. Between 250 and 400 applicants who were British citizens or EEA nationals may have been affected by the operation of Section 185(4) in England during the previous year. That is between 0.3 per cent and 0.6 per cent of the number of applicants who were accepted as owed the main homelessness duty.
The Joint Committee also asked how the number of individuals affected influenced the Government's approach to the declaration of incompatibility. The numbers affected played no great part in our response. We are committed to remedying declarations of incompatibility as quickly as possible, regardless of the number of individuals who are affected. The cases have proved particularly difficult to remedy because of their impact on the important confluence of immigration policy, social welfare policy and protection of the interests of the UK taxpayer.
The Joint Committee also asked whether it would be possible to arrange publication of the Explanatory Notes to accompany the amendments before Report stage, which has not been possible. Explanatory Notes for the whole Bill will be published when the Bill goes back to the other place and I will reply to the letter including details of our estimates.
I know that I have wearied the House. I probably have even wearied the noble Earl who asked the question, but, having put that detail and explanation on the record, I hope that noble Lords will agree that Schedule 15 will not only remedy the incompatibility but will genuinely set a fair balance between the interests of UK taxpayers and the rights of individuals who come to the country with no claim on public funds.
My Lords, I thank the Minister for that detailed answer. She could not possibly expect me or anyone else to absorb it all and retain it in their brains at this time of day. It is very complicated and obviously I shall have to read it again, I still have a worry, not about the head of the family but about subsidiary family members. Let us take the situation where a man is completely legal here but the status of his pregnant wife or girlfriend is under query. If she was completely okay, one set of rules would apply to her; but if her case was pending, a lower set of rules would apply to her. If she was then moved to, let us say, a 12-month tenancy agreement and her immigration status was settled as fully okay during that time, the family would then be landed with a second-class remedy which it would not have had if the settlement had come in earlier. I hope the Minister is following me because I think I am getting it right
I am not going to press the amendment. It is obvious that the Minister's officials have gone to an enormous amount of trouble, for which I am grateful. We look forward to her letter—perhaps not with the glee with which one looks forward to a Valentine's card, but we will be pleased to hear the answer and I thank her for that. I beg leave to withdraw the amendment.
moved Amendments Nos. 189 and 190:
Schedule 15, page 234, leave out lines 27 and 28 and insert "decisions mentioned in section 35A(2)(e)."
Schedule 15, page 236, leave out lines 7 to 9 and insert—
""(e) in a case where a private accommodation offer is made to the applicant, any decision— (i) that the accommodation offered is not accommodation falling within section 32(5)(a) to (c), or(ii) that the authority have discharged their duty to the applicant under section 32(8).""
On Question, amendments agreed to.
[Amendment No. 191 not moved.]
Clause 318 [Orders and regulations]:
moved Amendments Nos. 197 to 201:
Clause 318, page 147, line 5, at end insert "(excluding section 227),"
Clause 318, page 147, line 19, leave out "or 21(2) or (4)" and insert ", 21(2) or (4) or 23A"
Schedule 16, page 239, line 26, column 2, at end insert—
|"In Schedule 4, in paragraph 4, the words from "be authorised" to "Government to"."|
Schedule 16, page 242, line 33, column 2, at end insert—
|"In section 128(2), the words ", or as the case may be re-determined,"."|
Schedule 16, page 242, line 46, column 2, at end insert—
|"In section 58(1)(b), the words "the Commission for the New Towns or"."|
On Question, amendments agreed to.
Clause 322 [Extent]:
My Lords, I am tempted to tease the House by saying this will take just as long, but it will not.
Amendments Nos. 202 and 203 to Clause 322 make it clear that orders under Part 4 can extend to the whole of the United Kingdom. This means that the necessary consequential or transitional provisions can be drafted to achieve their intended effect. Of course, any provision that affects the devolved Administrations will be proposed only after full consultation. Amendment No. 206 amends Clause 323 and inserts a necessary reference to "revocations" as both Schedule 16 and orders made under Clause 319 deal with changes to secondary legislation. I beg to move.
moved Amendments Nos. 204 to 207:
Clause 323, page 149, line 4, after "125D(2)" insert ", 128(2)"
Clause 323, page 149, line 10, leave out ", 294" and insert "to 296"
Clause 323, page 149, line 11, after "repeals" insert "and revocations"
Clause 323, page 149, line 20, leave out subsection (5)
On Question, amendments agreed to.
My Lords, I am sorry. That is fine. I take this opportunity to inform noble Lords that as the debate is the last business of the day, 90 minutes have been allocated to it.