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Housing and Regeneration Bill

Before giving my reasons why Clause 195 should not stand part, I need to go back to our debate on Clause 49, which is the clause empowering the Secretary of State to give general directions to the HCA. I summed up my position on Amendment No. 96 by saying: "““Non-departmental public bodies operate most successfully when they have a high degree of independence within the terms of their Act of Parliament. The more that there is in the Bill that makes their position clear—and does so to everyone who deals with them—the better””." In contrast, I said: "““The more there is an opportunity for the rules of the game to be changed in the middle of play, the less successful the body will be””.—[Official Report, 10/6/08; col. GC 186.]" It would be good to hear today that the noble Baroness shares that view and agrees with that conclusion. However, in her response to Amendment No. 96, in what I now read as a hot and cold reply, she said: "““the power of direction ... is likely to be used sparingly ... for ensuring that the agency delivers effectively against its objects””." She also said that my amendment, "““would restrict the ability of the Secretary of State to influence the behaviour of the HCA””," and that the power was needed, "““to restrict or control certain important activities””.—[Official Report, 10/6/08; col. GC 183.]" There is much else besides which is in conflict with the professed policy that the HCA is to be strong and independent. It is even worse for the regulator in Part 2. All his rules can be changed in the middle of the game if Parliament accepts Clause 195. To reiterate, the power of direction with which public bodies must comply has been used for two purposes. The first is administrative, typically in accounts directions, while the second enables action to be taken to deal with issues that either could not have been foreseen during the passage of a Bill—the Dome, for example—or later, under an Act, when a non-departmental public body or a Secretary of State face a crisis needing urgent action—the Dome again. Therefore the second use is as a backstop or reserve power. This has been frequently agreed by Ministers in recent times as the position of directions. It is for these reasons that directions are subject to no parliamentary procedure; they come to Parliament for no form of scrutiny. Administration is de minimis—crises demand urgent action. Indeed, Parliament has no established right even to see directions, which is just about all right if they remain administrative or urgent matters of last resort. Of the four directions cited by the noble Baroness at col. 183 on 10 June in Grand Committee, three were related to the Dome and one to Stratford City. These were specific, complex issues outside the normal experience and, I expect, the powers of English Partnerships. They accurately illustrate my point because they were indeed used as backstop or reserve powers. The second important matter we need to remember about directions is that increasingly they are being included to cover situations that fall between the purely administrative and matters of last resort. We can see this as a steady infiltration into the middle ground of a non-departmental public body’s objects and the way in which it achieves them. Clause 195 is a classic example of direction creep. Thirdly, we need to remember that directions can be a form of secondary legislation to be used, as the noble Baroness, Lady Hamwee, told us, instead of orders and capable of being utilised without parliamentary scrutiny. Why is this happening? It is because it is convenient. A clause such as Clause 195 needs little thought. Its breadth means that, combined with no scrutiny either before the event, as with the scrutiny of orders by the Delegated Powers and Regulatory Reform Committee or when the Act is in operation, the discretion of the Secretary of State is unrestrained. However, such untrammelled flexibility comes at a price, and a steep one at that. All pretence of independence is exposed and nobody who deals with the regulation either can or ever should believe that he or she is his or her own man. It is the Secretary of State who calls the tune however and whenever he or she wants. Let us look at the detail of the clause. The paragraphs set out in subsections (1) and (2) cover just about everything in Clauses 191 and 192; indeed, is anything left out? Subsections (4) and (5) ensure that we have to go back to a zero base. Everything needs to be considered afresh. Indeed, the amendment put forward by the Minister increases the duty to consult. Since the process of consultation is open to manipulation, there is nothing to stop the Secretary of State from coming out exactly where and how he or she went in. Finally, in Clause 195(8) we have a fig leaf: publication. Publication to whom, and how? On the department’s website, I suppose. How detailed will the responses under Clause 195(8)(b) be? Not very, if experience is any guide. Then there is the direction itself. Just what can we do with that when we read it on the website? It is a fait accompli. Maybe—no, indeed, not ““maybe””; since the Secretary of State started the game again from a zero base and needs must justify the intervention, the rules of the regulator’s game will have been significantly changed. If that were not to be so, the clause would have real sense or meaning. I return to where I began. The more there is the perceived opportunity for the rules of the game to be changed in the middle of play, the less successful the regulator will be. Whenever directions have been put forward in this way—it has happened with the lottery funds, for example—the point has been taken and the powers brought back more into line with the usual and acceptable uses: administrative and last resort. That should happen again. Clause 195 should be dropped from the Bill.