Housing and Regeneration Bill

I am grateful to the noble Viscount, Lord Eccles, for enabling us to have a short and important debate. This is an important part of the Bill. I appreciate that he has consistently raised these issues as we have gone through this process, for which I give him credit. As I said earlier, I put a high value on the independence of the regulator from government, just as the Cave review recommended. Perhaps I may give the Committee a little background. I am grateful to the noble Lord, Lord Best, for what he said. He put his finger on an important aspect of this debate and gave credit where it was due to those in the other place who took seriously the concerns raised by the housing associations and addressed what we required, and did not require, the Secretary of State to do. The Government’s considered response to that is the reason for the clauses being the way that they are now. In the original drafting the power was too open-ended—essentially, it permitted the Secretary of State to set standards on any issue—but that was never our intention. There were limitations on the power in any case: the Secretary of State could not give directions requiring the regulator to act contrary to its fundamental objectives, including objective 10, or regulate anything unconnected to social housing. However, it became evident that those conditions were neither clear nor sufficient enough to allay the concern and we agreed to amend the Bill at Report stage so that it better reflected our intentions. As I have said, that was always our intention. Why would it be otherwise? What is the point of setting up a regulatory system if it is not independent from government? That is the whole point. We have done that and this regulator is far from being just an agent for government directions. This clause covers none of the provisions in Clause 192 and a very limited range of issues in Clause 191. Other than directions on standards and a role in selecting the board, the Government will have virtually no control over the regulator. I invite the Committee to consider how that compares with the Housing Corporation, the costs of which are paid and the targets set by the Government, who also have the power to direct it on any issue. My noble friend Lady Dean paid tribute to that. It is a draconian power which is very different from what we are offering in the Bill. We have sought throughout to strike the right balance between the regulator’s independence and the need for the Government to have a say in certain key issues on which standards are set and which are fundamental to how tenants and social housing can be managed in terms of rents, physical housing standards and tenant engagement. On the point made by the noble Baroness, Lady Falkner, I refer the Committee to paragraphs 5.12, 5.13 and 5.14 of the Cave review, which states: "““the regulator should be independent of government with that independence defined by statute. But there are certain defined matters for which the government should have the power to issue directions to the regulator. The first of these areas relates to housing standards””." It continues: "““The second key area for government direction relates to rent levels””." The Government have a clear interest in setting a strategic rents policy. We have to ensure that rents are not set too high and that they are fair, both for the benefit of tenants and, frankly, because otherwise we end up paying huge amounts in housing benefit. We also have to acknowledge—Cave certainly did—that some improvements of physical standards have required huge amounts of public money, in particular under the Decent Homes policy, and the regulator should not be able to require them without government approval. I am referring to the £20 billion which has gone into that element of our economy.