My Lords, I am grateful for the discussions my noble friend Lady Scott and I have had with the noble Baroness, Lady Hayter, and the noble
Earl, Lord Lytton, prior to this debate. I appreciate that they and others have hesitations and reservations around this clause; however, I hope I can persuade the Committee that those reservations should not be given weight.
The Government consider that Clause 213 should remain in the Bill because retaining the Secretary of State’s power in legislation to initiate reviews demonstrates that the Government are committed to supporting RICS in regaining and retaining its reputation after some very serious public failings in 2018-19. The clause also gives the Secretary of State discretion to set specific matters for the independent reviewer to consider that are connected to its governance and effectiveness. The noble Baroness, Lady Hayter, said that there was no rationale for this. The provision is to ensure that a review could specifically include issues that become a public concern, such as providing leadership to the market for the benefit of consumers, rather than always seeking to satisfy members.
The noble Baroness, Lady Hayter, indicated that she viewed the clause as interfering with an independent, free-standing institution. The noble Earl, Lord Lytton, made a similar point. While the clause clarifies the Secretary of State’s power to initiate a review, it would create no power to intervene in the workings of RICS, so I disagree with the premise that Clause 213 interferes with the independence of RICS. Indeed, the clause is clear in clarifying the independence of any proposed reviewer and, with regard to the review itself, mandates only the remit and a requirement to publish, and not, for instance, how the review is undertaken.
I point out to the noble Earl, Lord Lytton, that the power conferred by the clause is strictly limited. The Secretary of State would be required by the clause to publish the independent reviewer’s report but, as he mentioned, the Government are not legislating to act on the review’s outcomes or the independent reviewer’s report, because we cannot, as he said, pre-empt any findings or recommendations. Should the Government require any legislative powers to enact any of the recommendations from a review, we will need to return to Parliament for permission. Once again, this approach will ensure RICS’s ability to operate independently from government while strengthening its accountability to Parliament. The noble Earl asked whether any report would be made directly to the Department for Levelling Up, Housing and Communities. The answer is no: the report would be independent and the Secretary of State is simply required to publish it.
The noble Baroness, Lady Hayter, said that there would be no reason for the Secretary of State to establish an inquiry under the terms of this clause. RICS is uniquely influential across construction sectors and their links with financial service markets. It is the sole body for bestowing chartered surveyor status in the UK and its reputation took a big hit as a result of the failings of 2018-19, which, given its unique role in these matters, is a very serious issue. We cannot and should not gloss over those failings. Historically, RICS took a very limited view of providing leadership to the market for the public good, being constrained by its
internal practices and policies, such as on EWS1 forms, and this contributed to difficulties for leaseholders in selling their flats.
My noble friend Lord Caithness said that the Government do not need this power: he asked what the point was of including the clause. In this clause, we are setting out the scope of any review, and this should act as a reassurance as to the limits of what the Secretary of State is empowered to do. I say again: RICS’s independence of working is not in question. At the same time, the Government are signalling the importance we attach to RICS in protecting consumer interests through its guidance and standards, as well as the regulatory functions it undertakes across the market, improving and managing the built environment and land.
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The noble Earl, Lord Lytton, asked me what the relevance of this clause is to levelling up. The work of RICS touches on several areas of the levelling-up agenda, such as guidance on how developments should be valued for Section 106 agreements, the approach to valuation for the infrastructure levy, influencing the housing market through guidance on such matters as external wall systems and developing industry-wide methodologies for whole-life carbon in buildings. As an organisation with such influence, RICS needs to demonstrate that it is getting and keeping its house in order, in order to rebuild its reputation following such serious previous problems. The clause, along with our regular engagement with RICS—and we do have regular engagement—will encourage that momentum.
To address a further issue raised by the noble Baronesses, Lady Hayter and Lady Hayman, among others, the Government do not agree that this clause renders the Bill hybrid. A hybrid Bill is one that affects a particular private interest in a manner different from the private interest of other persons or bodies of the same class. RICS is a body in a class of its own, and this clause does not affect any private interest of RICS because the Government are not legislating to act on the review’s outcomes or the independent reviewer’s report. The noble Baroness, Lady Hayter, was also concerned that there has been no meeting between RICS and Ministers. She may like to know that the chief executive of RICS, Richard Collins, will be meeting my honourable friend in another place, Rachel Maclean, on 13 June to discuss the clause.
I would ask the noble Baronesses, Lady Hayter and Lady Hayman, the noble Earl, Lord Lytton, and my noble friend Lord Caithness to reconsider their opposition to this clause.