Housing Bill

HL Deb 20 October 2004 vol 665 cc778-819

3.16 p.m.

Lord Rooker

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Rooker.)

On Question, Motion agreed to.

Clause 148 [Duty to have a home information pack]:

Baroness Maddock moved Amendment No. 151J:

Page 105, line 12, at end insert— ( ) The Secretary of State may make regulations prescribing the permitted period after the property has been put on the market before which a responsible person is not required to comply with the duties relating to home information packs.

The noble Baroness said: My Lords, Amendment No. 151J concerns a very important issue; that of day one marketing; that is, the ability of homeowners to put their property up for sale at a time of their choosing and with immediate effect should they choose so to do. That right will be denied in future under the provisions of the Housing Bill.

We on these Benches think that ending day one marketing is both unnecessary for the Government to achieve the objective it perceives with home information packs and damaging to the housing market in general in Wales and England.

The amendment allows the Government to remedy the situation through regulation. The issue of day one marketing was debated in Committee. Therefore, I do not intend to repeat all the arguments that were put forward in its defence at that time. However, I should like to respond to one of the comments the Minister made in his reply. He suggested that, if first day marketing were allowed to continue, it would encourage house sales to be negotiated and concluded within days of a property coming on to the market and before a prospective buyer had had the benefit of access to important information that would be contained in a home information pack.

Only a tiny fraction of property sales are currently concluded almost instantly. Our objective is not to change that small number. I accept the Minister's comments in the very helpful note that he wrote following Committee that instant marketing does not necessarily mean a quick sale. However, many people, such as those who are embarking on job relocation, feel the need to put their property on the market quickly. Retaining day one marketing would allow them to begin the process of selling their property by attracting initial inquiries and viewings while the home information pack is being compiled. Retaining day-one marketing would allow them to begin the process of selling their property by, hopefully, attracting initial inquiries and viewings while the home information pack is being compiled.

Retaining day-one marketing is a very modest objective. We propose that the marketing should be allowed to take place only during what—if we accept the Government's forecasts—will be a very short period between when marketing first occurs and the home information pack is available to buyers.

We can all argue about whether the Government are optimistic in their prediction about the length of time it will take to compile a home information pack, but it is hoped that this period will be relatively short, probably no more than two weeks.

The vast majority of buyers view a wide number of properties before selecting a smaller number to look at in more detail and before making an offer. So I see no good reason for abolishing the rights to one-day marketing.

We have had extensive debates on home information packs. As the Minister knows, we support a voluntary approach to home information packs, and we support providing buyers with information on which they can make a more informed decision in relation to buying homes, which is—we have mentioned it several times—probably the biggest financial commitment of a person's life.

However, we remain convinced that home information packs will be of most value to buyers when they have identified a small number of properties that meet their requirements and which they wish to go and look at a second time and maybe make an offer.

I am grateful also for what the Minister has said and written in relation to flexibility, particularly about the individual elements of the home information pack. That, he said—and we had extensive discussions on it yesterday—may be subject to revision following the Government's intended dry run. However, this flexibility does not provide justification for abolishing day-one marketing and we see no good reason why marketing should not begin while the home information pack is being compiled.

We do not seek a blank cheque for a long time. The amendment allows the Government to review progress of various things; for example, progress towards electronic data exchange before they determine the length of time between marketing commencing and when a home information pack must be made available. They do not actually need to make the decision now; this is about giving the Government permission through secondary legislation.

The amendment is intended to be a helpful measure to balance the interests of buyers and sellers. I hope it is one which the Minister, on reflection and after much discussion, will feel able to accept. I beg to move.

The Earl of Caithness

My Lords, I am delighted to be able to support the noble Baroness on this amendment. It is a theme that I have raised in many of my previous amendments. This provision is, as I have said before, very important to vendors. The National Association of Estate Agents carried out a survey of its clients through the firms that belong to the national association. The overwhelming majority—over 80 per cent and in some cases it was as high as 95 per cent—said that they wanted to be able to market immediately, at day one.

As the noble Baroness has said, this will not drive a coach and horses through the Government's proposed home information packs because the likely period will be only a few days or around a couple of weeks. But it will be important to vendors that this right is not taken away from them. Certainly from my experience—and it is not just in London that I have such experience—it is something that vendors want. In most cases they will be in a position where they have seen a house they wish to buy and will want to be able to get on and start marketing their house as soon as possible in order that they can complete their sale so that they in turn can move.

If this flexibility is not permitted to be continued under the new regime, it will slow down the housing market. There is no question of that. We already know from the research done by the Consumers' Association, which the Minister prayed in aid yesterday, that imposition of the packs will cause a reduction of up to 25 per cent in houses on the market.

So I very strongly support the amendment. It is a better amendment than mine—Amendment No. 151K—which is similar. It tries to build a little bit of flexibility into the increasingly rigid system that the Government are imposing. In all fairness to the vendor, this provision should be allowed to continue: he should be allowed to market his property at day one when he wants to.

Baroness Hanham

My Lords, I want to make it clear that we support the amendment, as we would have supported the amendment of my noble friend Lord Caithness, which I gather he is now not moving. I want to make it clear that we are on side with the fact that vendors need a bit of time to get the housing pack together. What happens of course is that if you have to have a housing pack available on day one, that is in itself a delay for a vendor wanting to begin to test the market and see whether there are purchasers available who are likely to be interested in the short term.

It seems to me that this absolute insistence upon the pack being available before the property is put on the market is likely to hold things up. It is likely to make the market worse. As we were discussing yesterday, the point that we have now got to take into account is that the housing market today is very different from the one when the Bill was initially put forward. We are moving out of a fast-moving, rapid market turnover into one which is clearly going to be much slower because of the increase in interest rates. All the reports coming out from the press are that the market is slowing.

So I make it clear that I support the amendments of the noble Baroness, Lady Maddox, and my noble friend Lord Caithness.

Lord Bassam of Brighton

My Lords, I think that probably at the end of all of this there are not a million miles between us on the issue. We certainly understand the concerns of the noble Baroness, Lady Maddock, that the requirement to have a pack should not cause unnecessary delays in marketing a property. I say to the noble Earl that none of us wants to see a delay in going to market.

In the end we probably come down to a disagreement about how long we think it will take for packs to be assembled and on whether they will have a negative effect on the market. I think that is where the area of disagreement is, but we recognise the worries and understand and accept their validity. It is for that reason that we are taking a cautious approach to this and building in precautions to ensure that we can pick up any potential problems.

There is to be an office of government commerce review of the home information packs' programme with extensive stakeholder involvement, building on what we have done already. A new, extensive programme support structure—I am not sure I like the jargon, but that is what it will be—will be in place to oversee the route through the home information pack implementation; and, as we discussed yesterday, there will be a six-months' dry run of home information packs before they become operable.

If the home information pack programme working groups or the dry run were to show up problems of the nature that have been described during this short debate, we shall need the flexibility to prescribe a permitted period during which marketing can take place without a pack. Happily, measures are already in the Bill which enable us to further reflect on that, and we do not really require any further amendment.

Clause 155(9) allows the Secretary of State to vary the time at which a document is required to be in the pack and, if necessary, could be used to achieve just the same effect as is envisaged with this amendment. I think that we are on side with appreciating the problem. We have listened very carefully to what has been said. We have the flexibility in the Bill which will enable us to vary the permitted period. So I would argue very simply today that we do not require the amendment because what the noble Baroness seeks to achieve can already be achieved through Clause 155(9).

The clause also enables the Secretary of State to make transitional arrangements and to make different arrangements for different areas—different descriptions of properties and other variable circumstances. So there is flexibility in the Bill, which will enable us to respond to some of the issues raised by the noble Earl and the noble Baroness in our discussion of the operation of home information packs. I see the noble Earl shaking his head, but the flexibility is there. If conditions in the housing market change, of course the Bill is flexible and we can respond to some of them. We accept that, over time, there will be changes, but we think that we have sufficient flexibility to deal with the problem identified here.

3.30 p.m.

Baroness Maddock

My Lords, I thank the Minister for his reply and the noble Earl, Lord Caithness, for his support. I may say that the wording has nothing to do with me: I am very grateful to my noble friend Lady Hamwee, who is the lawyer, not me. I am also grateful to her for her advice about the Minister's recommendation that Clause 155(9), on page 109, will give the Government sufficient flexibility. As a lawyer, she is not convinced that that is so. We had better look at that. We have made the point and won the argument; the question is where it should happen in the Bill. If the Government are really intent on understanding the issue and acting on it if necessary, my amendment would be the better way, because it makes it quite clear, whereas there is some confusion in the Minister's recommendation. However, at this stage, I will go away and make more inquiries. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 151K and 152 not moved.]

Clause 149 [Duty to provide copy of home information pack on request]:

The Earl of Caithness moved Amendment No. 152A:

Page 105, line 15, after "which" insert ", where available,"

The noble Earl said: My Lords, what the noble Lord, Lord Bassam of Brighton, said in reply to the previous amendment was, "You are going to get home information packs. The whole thing will be done by regulations. Trust us. Have faith. We will listen. We will alter the regulations. We can adapt for low-cost housing and different types of houses. We can do anything that we want to, but we are not going to allow Parliament really to have a say on that".

We discussed the possibility of amending regulations yesterday; we know that that is not a practical reality. I have no doubt that the Minister will use exactly the same arguments on all my amendments to follow. We know that there will be regulations, but these things, especially the previous amendment, should be in the Bill. That is not something that we should leave to regulation; it is far too important and something that this House and Parliament ought to decide.

I shall speak also to Amendments Nos. 152D and 155F. Another problem is getting the information. The Government are imposing a strict timetable and conditions before one can market a property. My concern here is not for freehold properties, because normally, if you can get a good solicitor, that should be in good order; my concern is for leasehold properties. That is where my firm and many other firms have had trouble in the past. I was talking to someone from one of the Countrywide firms today and the person agreed with me that the real problem when one comes to marketing is getting information from the managing agents.

Incidentally, when I talked to the person at Countrywide, I asked whether he agreed with the statement made by the Minister yesterday at column 695 that Countrywide is, "ready to go". No, it is not ready to go. Not a single one of its offices or sub-offices is operating with an information pack at the moment and it does not expect the information packs to be available until July 2006. What Countrywide said is that if the Government are to bring in the Bill, of course it will prepare for it because it will become law, but it is not ready for it now. When I asked, "Are you doing any home condition reports?", I was told, "Of course not". So what the Minister said yesterday must be taken with a pinch of salt.

On obtaining information from managing agents, for instance, it was the noble and learned Lord, Lord Donaldson, who yesterday pointed out that he would be charged a sum of money for the release of the information. Let us suppose that the vendor of a flat instructs an agent to market that property and that it is a leasehold flat. As an agent, I would try to get the information from the managing agent about the service charge, the sinking fund, repair programmes, what has been spent in the past and what is budgeted for in future. That information takes a bit of time to come. Not only that, the managing agent puts a whacking great fee on releasing that information. My client, the vendor, wants to argue about the cost of providing that information, but at the same time, he needs to market his property. He is being put in an almost impossible position where he is unable to negotiate with the managing agent, the managing agent will not release the information, and he cannot market the property.

That will become a charter for managing agents to push up their costs for releasing the information so that a vendor can market his property quickly. That is why we should be able to market properties as quickly as possible and, when it is not our fault as agents that we do not have the information, we should still be able to provide what constitutes the basis of a home information pack but without all the necessary details, within a sensible time frame. I beg to move.

Baroness Hanham

My Lords, in supporting my noble friend's amendment, I want to ask one question, because I am not sure that we have dealt with it. How long do the Government expect that it will take to put the packs together? My noble friend has raised a very significant potential problem concerning leaseholds. Will there be any limit to the length of time that people are allowed to take to put packs together? Potentially, the sale could be delayed for a long time because a pack cannot be made available. Perhaps the Minister would enlighten us on that as well.

Baroness Gardner of Parkes

My Lords, yesterday I drew attention to this problem of leasehold property and charges made by either managing agents or freeholders. We must consider that realistically. My noble friend Lady Hanham has raised the additional point that if they wanted to be sufficiently obstructive, they could defeat one's whole purpose in selling and, in the end, perhaps be the only people entitled to buy the property back, which could be greatly to the disadvantage of the leaseholder. That may be a real concern.

Lord Phillips of Sudbury

My Lords, I rise merely to agree with the noble Earl, Lord Caithness. From long practice, the danger that he conjectures about managing agents hanging on to information and embarrassing the whole process is real. Somehow or other, we must try to provide for that.

Lord Rooker

My Lords, can I just knock one thing on the head to start with? That concerns what I said yesterday about the dry run. The dry run will give us practical experience, which will be fed into the monitoring operations at the time. If we need to amend the regulations in the light of that, we can do so by negative resolution. There is not the slightest problem. So if the noble Earl, Lord Caithness, wants to keep repeating what is clearly not correct, that is up to him, but he will get the same answer every time.

I think that the thrust of the argument raised by every noble Lord is that homeowners are not taking home ownership responsibly and seriously. To be honest, I cannot believe what I have just heard. We are talking about homeowners who do not know what their service charge is; homeowners who do not keep a copy of the annual report that they may receive from the managing agent with details of the sinking fund. That is their problem; they are paying the bills. If they want to put their property on the market, it should not be necessary to go to the managing agent to get every jot and tittle of that information. Homeowners should know; if they do not, it is their responsibility, as they are putting the property on the market. Noble Lords should not blame the managing agent or raise all these hurdles. I know that Peers live in an esoteric world that in some ways is not real, but that applies to the generality of what I have just heard.

The vast majority of people will not have that problem. Homeowners will have a problem with their managing agent anyway, if they have bad relations. But if they are not keeping the bills and invoices that tell them what they are paying out in service charges, frankly they are just not taking home ownership responsibly and that will be their problem when they come o sell. It should not be used as an excuse to dilute the legislation to the detriment of everybody else. The issue arose in Committee, and I addressed it in my subsequent letter. We will look at the matter during the dry run.

In response to the question of the noble Baroness, Lady Hanham, I can say off the top of my head, based on evidence from current experience, that it takes five working days. I am reliably informed that, from a practical point of view, that can happen now. It can take about as long as it would take some estate agents to compile details, if someone walked into their office on a Monday and said that they wanted to sell. The agent would have to nip around to take some photographs, get the details of the property and show them to the seller to get approval before they dared to compile a package of estate agent's details—I am not talking about the home information pack. That would take the same time as it would take to provide the home information pack.

If arrangements have been made to compile a home condition report or to apply for the necessary documentation and a document has not arrived in time for the marketing, there is leeway in the Bill of up to 14 days, provided that reasonable steps have been taken to secure the document. It is no good saying, "We have not applied for it yet". The evidence is that it can be done in five working days. But, as I mentioned in Committee, regulations provide that, where the odd document is unavailable because someone has not delivered it or the application got lost in the post—that might be quite a reliable thing to say—it can be secured for up to 14 days and then inserted into the pack.

The Earl of Caithness

My Lords, I did not say that the regulations could not be amended at any time, but to alter a negative instrument in this House is complicated and seldom done. Therefore, such matters should be in the Bill, not left to regulation. I do not disagree with what the Minister has just said; of course you can alter a regulation at any time. But it is difficult for us in this House to alter a negative instrument when it comes before us.

With respect to the Minister, given the tone of his reply I do not think that he fully understands quite how the market works. However conscientious you are as a flat-owner, getting information out of a managing agent can often be difficult. I agree that flat-owners ought to have information on past bills, but, although some managing agents and tenants associations are extremely good at documenting matters such as the sinking fund or the proposed repair programme and having that information ready to give out to all tenants, others are extremely bad. In my experience, there have been cases where someone has bought a well managed flat, the freeholder has then changed managing agent, and that agent has claimed that the information was not passed to them from the previous one. There are all sorts of complications in the real world; it is not as straightforward as the Minister indicated.

However, I do not think that we will make much more progress on the issue. I am grateful for the support of my noble friends Lady Hanham and Lady Gardner of Parkes. There is a problem in this area. The Minister does not acknowledge it, but it is there for those of us who work in the field. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 152B to 152E not moved.]

3.45 p.m.

The Earl of Caithness moved Amendment No. 152F:

Page 106, line 12, at end insert— ( ) All documents and information contained in the home information pack shall be confidential to the seller, the person acting on his behalf as an estate agent, a person acting on his behalf as a solicitor or conveyancer, and any bona fide buyer or potential buyer.

The noble Earl said: My Lords, this important amendment would make certain that all the information in the home information pack is, confidential to the seller, the person acting on his behalf as an estate agent, a person acting on his behalf as a solicitor or conveyancer, and any bona fide buyer or potential buyer". The documents will probably contain confidential information. It is only right that they should be kept within the confidence of the smallest circle of people. I beg to move.

Baroness Gardner of Parkes

My Lords, I go along with many of my noble friend's amendments, but I do not understand this one. How will one establish that someone is a bona fide buyer or potential buyer? As a general sticky-beak who loves looking into property, I would be one of the first to ask for packs from anyone and everyone. Certainly, if I were buying property, I would want to get packs from as many different people as possible to decide which property to buy. Even if I were a bona fide buyer, I would probably buy only one of the 10 properties that I had considered. So how does one establish that point?

Lord Rooker

My Lords, Amendment No. 152F is helpful in identifying the key people who need access to information in the home information packs. However, as we said in Committee, we do not feel that the amendment is necessary to address the concerns about access to information in the pack because much of it will already be available to the public. Clause 155 restricts the content of the pack to the information about the property so that no personal information about the seller may be included. We intend to ensure that sensitive information about security systems, and even information about decoration and furnishings, will be excluded from the pack. For those who keep on about the fact that the packs will include security information, I am not saying that for the first time.

We recognise that there are circumstances in which the seller would not want information contained in the home information pack to be disclosed to anyone outside the immediate home buying and selling process. In Committee, we gave the examples of a journalist seeking information about the home of a public figure, or entrepreneurs such as double-glazing salesmen trying to identify business opportunities, which bring up serious issues. We need to ensure that the Bill addresses them and complies with human rights legislation. Clause 150 addresses that concern by enabling anyone who has a concern about the use to which any information would be put to impose conditions. He could, if he chose, restrict access to the documents to those set out in the amendment. Several noble Lords raised concerns in Committee that estate agents might make the packs generally available on their websites. Having gone through some of these processes in the past couple of years, I know that many websites now have the facility to make documents available or to enable viewers to have a good look at the property, only if they have a password and are registered with the estate agent. You cannot go willy-nilly; you can go to the website and you might be able to look at property details such as the road, the area, price and number of rooms, but access to further details such as a floor plan is restricted to those with a security code, for which you have to give up your personal details. If people want to put those restrictions on the home information pack, it would be reasonable for them to do so. I can imagine that the majority of people would wish to do so.

Clause 149(4) ensures that sellers and agents do not have to give copies of the pack or any document in it to someone who is not genuinely interested in buying the property. I realise that that is very difficult to define. I accept that, as was indicated by my answer yesterday to the noble Baroness, Lady Gardner of Parkes.

From my own experience, I know that on walking into an estate agent and asking about a property or after seriously looking at a property and making an offer, some fairly basic questions will be asked about how one proposes to pay. Will a mortgage be needed? If so, who with? How much will be the deposit? Has the purchaser got the deposit? Is he or she employed? Those are reasonable questions for estate agents to ask so that they can filter those people who get the information. I am not saying that that happens everywhere, but it happens now.

There are all kinds of scenarios where people other than those identified in the amendment will want legitimate access to the pack. A potential buyer might want a copy of the pack to show to an architect or builder. For example, he or she may say, "If I buy this property, I want to know whether I could build a single or double-storey extension, or something like that, at the side. Is that technically possible? If so, what might roughly be the cost?". So they may want to show the pack to someone outside, which, I hope, would be quite legitimate. Of course, the enforcement authorities would also need access.

The amendment would prevent disclosure of the pack for those legitimate cases. However, the amendment is useful in identifying the kinds of people who would legitimately want access to the pack.

Lord Avebury

My Lords, I wonder whether the noble Lord watched last night's programme about identity theft or whether anyone mentioned it to him. It showed the practice of people wishing to steal identities obtaining details of vacant premises from estate agents. They go into estate agents with very plausible stories about how they have the money to put down a deposit and so on. They then use those addresses as the basis for the fake identities that they have created.

Lord Rooker

My Lords, I did not see the programme: I was here. I do not know what time the programme was broadcast. I am familiar with the type of situation raised by the noble Lord, not only from my former constituency experience where people were doing that but also from my work in the Home Office during the first year that I was in this House. The noble Lord is right.

As I said, I did not see the programme. But it is much more difficult to steal identities today, even as regards mail redirection. There has been a lot of work done to close down those opportunities. But we have to stay ahead of the game, as it were. There will always be crooks and spivs around to exploit all kinds of loopholes. I freely admit that. As I think that I said yesterday, it will not be 100 per cent.

These issues have to be considered in the way we draft the regulations and how we raise the issues with our partners and stakeholders as we are preparing the regulations and experimenting with the dry run. Doing a bit of blind testing during the dry run would not go amiss, would it? Someone could do those things during the dry run to test whether the system can pick up that kind of thing.

The Earl of Caithness

My Lords, I am grateful to the Minister for a more sympathetic answer and a better effort in answer to my concerns. My noble friend Lady Gardner of Parkes was right to raise the problem of identifying a bona fide purchaser or potential purchaser. That is another reason why I spoke to Amendment No. 151K, which provides for a home information pack being provided only once an offer has been accepted.

The noble Lord, Lord Avebury, said that one of the problems in estate agency is that there is a constant stream of people coming through the doors who may be pretending to be of a worth that they are certainly not. In most cases, one learns by hard experience because one always tries to help those people. Therefore, if someone comes through the door, the estate agent's duty is to try to sell a property to that person for their client. The initial attitude to the person is welcoming in anticipation that he or she has got the money, but that often turns out not to be the case.

I am grateful for what the Minister has said, which I shall read with interest in tomorrow's Official Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 152G had been withdrawn from the Marshalled List.]

[Amendment No. 153 not moved.]

Clause 150 [Section 149: imposition of conditions]:

[Amendments Nos. 153A to 154 not moved.]

Clause 151 [Duty to ensure authenticity of documents in other situations]:

The Earl of Caithness moved Amendment No. 154A:

Page 107, line 1, after "duty" insert "to take all reasonable care"

The noble Earl said: The purpose of the amendment is to relieve the estate agent of the responsibility that he is put under in the Bill, which states: Where a responsible person provides a potential buyer with, or allows a potential buyer to inspect, any document purporting to be … a copy of a document (or part of a document) included in that pack, the responsible person is under a duty to ensure that the document is authentic".

My amendment simply adds the words, to take all reasonable care". Of course, the agent will not be responsible for a great deal of the information, which will come from the surveyor who will have the home condition report and the solicitor who will have the searches. It is wrong that estate agents should be responsible for other people's work that is not up to the standard that is hoped for and expected. It is a simple amendment. I beg to move.

Lord Rooker

My Lords, I am more than happy to put on the record and, indeed, repeat what I said in Committee. An estate agent does not take on legal liability for any of the documents in the pack. The home inspector is responsible for the home condition report. The local authority is responsible for the local searches. Any redress sought by anyone for problems with documents in the pack is against the person who produced the document. Of course, the estate agent is not in the business of producing the documents to be assembled.

The trading standards officers will not serve a penalty charge on someone who has taken reasonable care or has taken care to ensure the authenticity of the contents of the pack. Obviously, it would be unreasonable to do so. To that extent estate agents are fully covered because there is no legal liability. I am happy to place that on the record.

The Earl of Caithness

My Lords, I thank the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 155 not moved.]

[Clause 152 [Other duties of person acting as estate agent]:

[Amendments Nos. 155A to 155D not moved.]

4 p.m.

The Earl of Caithness moved Amendment No. 155E:

Page 107, line 29, leave out paragraph (b).

The noble Earl said: My Lords, the amendment seeks to leave out subsection (3) (b). Subsection (3) states: In subsection (2) 'qualifying action' means action taken with the intention of marketing a property which … (b) does not put the property on the market or make public the fact that the property is on the market".

I find that a confusing statement because if one is instructed to market a property one immediately takes action. The Minister said a moment ago that an agent could wait for up to four or five days before taking any action. Such an agent should never have been instructed in the first place.

If the noble Lord, Lord Rooker, came to me and said, "I want you to market my house", I would immediately telephone a list of people who were looking for the type of house that the noble Lord wanted to sell. I would start marketing the house as soon as I had taken details or he had explained it to me. If the noble Lord came in and said, "You can come and measure up my house tomorrow but it has eight bedrooms, seven bathrooms and a billiard room", I would be able to look through my list of potential applicants and ring up those who were looking for something like that.

Equally, if it was a one-bedroom flat, wherever it was, I would look up my list of purchasers for one-bedroom flats. I would ring them and say, "I am looking at a flat tomorrow in the area in which you are interested; are you still looking?". Or, "I shall be taking details tomorrow. I will send you the information immediately thereafter".

That is why it is right that paragraph (b) should be deleted. I beg to move.

Lord Rooker

My Lords, we get a wonderful insight into the upper class and the way people live. Sellers such as the ones referred to by the noble Earl may be typical of the kind of people he works for—and I can understand his wish to protect them; obviously his amendments would make the clause null and void—but they do not reflect the real world or the generality of the 40,000 properties that are marketed each week.

We do not want to drive a coach and four through this, but nevertheless it is a key factor in what starts the ball rolling and it is important. The noble Earl and others, I suspect, may well come up with many new esoteric examples until the day we start.

Estate agents obviously talk to many people but they would not be in a breach of duty if they talk about a forthcoming sale with a spouse or discuss the arrangements with a colleague. Neither of those examples would be a qualifying action within the meaning of the clause, provided the communication was not aimed at marketing the property to the spouse or the colleague.

We know that there are one or two "spivvy" estate agents in London who have flogged within the office a house that they were supposed to be marketing for a client. I shall not mention any names, but there are one or two quite famous ones that I would not touch with a bargepole. I would advise people to keep clear of them. It is not a very nice practice, but there is no doubt that it would be classified as marketing.

As to deleting Clause 152(3)(b), which of course provides that the qualifying action for the purpose of the clause is an action that falls short of putting the property on the market or marketing to the public, I have explained that the whole purpose of Clause 152 is to capture direct marketing to a few selected buyers. In the kinds of examples given by the noble Earl, if it is direct marketing to a buyer or potential buyer, it is a qualifying action. His amendment would negate the whole thrust of the clause.

I have no doubt that all these issues will come to pass in the normal course of business, travelling around, looking at one property and maybe reviewing another. It will then be up to professional estate agents to know whether or not they have taken a qualifying action. In due course, experience will tell.

The Earl of Caithness

My Lords, the examples I gave were to cater for those people with ministerial salaries and for those of us who receive only expenses. I was trying to allow the noble Lord the flexibility to deal with whichever property he wanted.

I was not going back to the old theme that we have beaten to death about who I can and cannot talk to. I genuinely did not understand the significance of Clause 152(3)(b), but I think the Minister came to it in the end. In fact, the telephone calls that I would make on a vendor's behalf would be for marketing because I had received instructions and I would want to get moving on behalf of the vendor. I think that is what Clause 152(3)(b) covers. The Minister is nodding his head. It is now clear. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 155F to 156 not moved.]

Clause 153 [Residential properties not available with vacant possession]:

[Amendments Nos. 156A and 157 not moved.]

Clause 154 [Power to provide for further exceptions]:

[Amendment No. 158 not moved.]

Clause 155 [Contents of home information packs]:

The Earl of Caithness moved Amendment No. 158A:

Page 108, line 22, at end insert "; and ( ) the core elements of the pack which must be made available before any marketing of a residential property may take place

The noble Earl said: My Lords, in moving Amendment No. 158A, I shall speak also to Amendment No. 158C.

The purpose of Amendment No. 158A is to get the Minister to lift the veil a little on what his thoughts are for the regulations. He mentioned that it now looks as though the intention of the Government is that estate agents can start marketing a property within 14 days of instructions being received without all the information in the home information pack when there has been a genuine attempt to obtain the same. So there will be a 14-day delay as a maximum.

So, speaking as an agent, I receive instructions on day one and I ask for all the information; if by day 14 I have not had back all the replies, I can go ahead and market the property. I should like the Minister to confirm that, but that is my understanding.

This procedure will be covered in regulations and the Minister has said that the Government will have the flexibility to add bits, remove bits and make the key parts of the regulations. Are there core elements of the pack that the Minister believes will be essential and outwith the 14-day rule? In other words, are there any papers or pieces of information that will be absolute prerequisites before a property can be put on the market?

I think the Minister has dealt with Amendment No. 158C, which refers to an agent being able to market a property without all the relevant information, provided that it does not detract from the value of the property—in other words, there is no hindrance to the purchaser in assessing the price that he or she may pay for the property. I beg to move.

Lord Rooker

My Lords, to be honest, it is too early for me to bring forward draft regulations. They are some months away. If the amendment is intended to prevent a duty to include non-essential documents in the pack, it is ill placed to achieve such an effect. I can assure the House that the Secretary of State will prescribe under Clause 155 only documents that are necessary as part of the pack. We have seen the example in the consultation, but, to knock this on the head, the idea that we can start on day one with nothing and then try and get everything within 14 days is not one that I am offering. I do not think that that was implied in the noble Earl's comments. There will be core documents, but only those that are strictly necessary.

Some documents will be required from the seller and will be quite easy to provide. We will not require people to provide material that is not necessary. We still have work to do on this. Nobody will be committing an offence by failing to comply with the duties, as suggested in the amendment. Many groups have urged us to move from criminal to civil sanctions, and we have accepted their arguments.

The new subsection (4), as proposed in Amendment No. 158C, would provide that the responsible person could omit a prescribed document as long as it, does not detract from the value of the property". That is a pretty subjective judgment required by the sellers, estate agents, potential buyers and enforcement officers as to whether the omission of a particular document from the pack would affect the value of the property being sold. There is no question that that would cause practical difficulties. The value is one thing, the condition of the property something else altogether.

Information on the local searches or a home condition report cannot detract from the value of the report but can only help to reveal its true value. Someone is expected to make an offer for the property; the whole point about home information packs is that people make an offer on the basis of the maximum possible reasonable information available in a transparent way so that it will help to speed up the sale. The sale will be delayed if the relevant core documents are missing when the offer is made. People will want to alter their offer because something new has come up, but that new information could have been available when the pack was put together, if people had done their homework beforehand.

The Earl of Caithness

My Lords, the noble Lord's interpretation of the amendments is different from mine. Amendment No. 158A is in line with what the noble Baroness, Lady Maddock, and I were talking about earlier and deals with the need to market a property on day one, as soon as possible. That is very important to vendors, and I do not think that the Government have fully grasped that. That is why the amendment refers to, the core elements of the pack". It does not say that estate agents could get away with having only the core elements. It was an attempt to get some information from the Government so that there is no undue delay in getting a property to the market. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 158B:

Page 108, line 22, at end insert— ( ) A statutory instrument under this section is not to be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.

The noble Baroness said: My Lords, the amendment would provide for the affirmative resolution of both Houses in the case of regulations made under Clause 155 on the contents of the home information pack.

In Committee, a similar amendment was tabled that applied to this whole part of the Bill, not just the contents of the pack. The Minister's response was that various issues which had been the subject of debate were best dealt with by regulations rather than in the Bill. He talked about the flexibility of amending regulations. I shall not go into that as we had some exchanges yesterday. The Minister said: As presently drafted, the negative resolution procedure is right, should it prove to be necessary to make some changes".—[Official Report, 14/9/04; col. 1125.]

When I reread that, I realised that although it was an answer it was not accompanied by a reason. Although it repeats previous arguments, these are important matters, almost by definition, given the time that we have spent debating them. Seeking to ensure that both Houses of Parliament have the positive opportunity that the affirmative resolution procedure provides seems right.

I tabled the amendment to enable the Minister to amplify his short response earlier in our proceedings. I beg to move.

4.15 p.m.

Lord Bassam of Brighton

My Lords, Amendment No. 158B would change the Secretary of State's regulation-making powers as set out in Clause 155(1) from a negative resolution procedure to an affirmative one. That is my understanding.

Such issues need to be dealt with through regulations rather than in the Bill. I think that the noble Baroness's argument is about how these regulations are achieved. As I think I said in Committee, we need some flexibility to amend regulations quickly in response to the housing market. I made the point earlier that the housing market changes over time, and some items in the home information pack may become redundant or new sources of information may become apparent. The negative resolution procedure will enable us to act quickly.

Some examples of the likely contents of the pack are in the Bill, in Clause 155(5). We have also published, for consultation, detailed proposals for the contents of home information packs and have received a very favourable response. We have given a clear indication of our intentions.

For the most part, the documents and information are already provided under the present process. Clause 155 also restricts use of the power to the provision of information about the property, or its sale, that is of interest to potential buyers.

I hope that that reassures the House that the negative resolution procedure is right for making the regulations that relate to Clause 155. It is important to note that when the Select Committee on Delegated Powers and Regulatory Reform considered similar provisions in the Homes Bill, it was quite happy with them. The noble Baroness has pointed out that the committee's recommendations are not prescriptive, but we feel that we have got it right on this occasion. We require that flexibility, which is in everybody's interest.

Baroness Hamwee

My Lords, we are being asked to agree compulsory provisions. Let me suggest a situation which might, at present, seem quite unlikely. A government—not necessarily this Government—decide that it would be a good idea to remove one of the items in the pack which Parliament has decided should be compulsory. Surely Parliament should be able to review the matter, given all the consultation and the good work involving people outside these two Houses that has taken place. It seems to be out of scale with the importance of the matter for the Government to say that they are not sure that they can find parliamentary time sufficiently quickly and that we should trust them. I shall not take the matter further—I just had to get it off my chest. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 158C not moved.]

Baroness Hamwee moved Amendment No. 158D:

Page 108, line 29, leave out "of interest" and insert "material"

The noble Baroness said: In Committee, I queried the definition of "relevant information", which was information that "would be of interest" to potential buyers. I used a frivolous example—although my noble friend Lord Phillips said that it was not at all frivolous to raise the point—by talking about a range of paint colours. However, this provision uses loose, wide phraseology. It is no answer to say that the Government have consulted widely on the content, because this phrase could mean everything or nothing. My concern is that it means everything. I propose "material" instead of "of interest", which I hope fairly reflects what the Government hope to achieve. I beg to move.

Lord Phillips of Sudbury

My Lords, I will briefly add to what my noble friend so ably said. This provision is part of Part 5. It will be looked at and referred to as much as any subsection in this part of the Act. I would be interested to know whether the Government could cite any other example of a statute using these words in a comparable situation because they are so rubbery as to create unnecessary confusion. That is not to say that the word "material" is beyond dispute, but at least the concept of materiality runs through statute law and has a better chance of being construed with some degree of certainty than this inadequate phrase.

Lord Bassam of Brighton

My Lords, may I just check that I have the right amendment? I believe that we are discussing Amendment No. 158D, which proposes the alternative wording "material".

Noble Lords

Yes.

Lord Bassam of Brighton

My Lords, I do not think that there is much between the expressions in the end. We think that information about the property or its sale that is important, essential or relevant is likely to, be of interest to potential buyers". It is difficult to imagine information being prescribed for inclusion in the pack that is not material information, so there is not very much between us on this matter.

On balance, we believe that the amendment would not add anything to the drafting of the Bill. For a moment I was toying with the idea of having the expression "of material interest", but I am not convinced of that in the end because it would add unnecessary words and I can remember too many debates in your Lordships' House when I and other Ministers have been castigated for doing just that. I can see no particular benefit in the change of words. I do not think that one expression is any looser than the other. Such expressions crop up from time to time in legislation, although I am not prepared to indulge in extensive research for the benefit of the noble Lord, Lord Phillips, to find out how many times they do. We are happier with our wording and obviously parliamentary counsel are also happier, although mistakes can be made. They are the experts and I am not inclined to accept this amendment.

Lord Phillips of Sudbury

My Lords, before the noble Lord sits down and my noble friend stands up, would the Minister ask the parliamentary draftsmen specifically whether there is merit or demerit in the case that we have made for these alternatives and let us have the answer? As I understand from too long a career in the law, this is not an unimportant point and a very important clause.

Lord Bassam of Brighton

My Lords, I do not want to spend too long on this, but I have created a third possibility and I will take the matter away and have another look. However, I do not want to take too much of our time. The noble Lord makes a respectable point.

Baroness Hamwee

My Lords, I am grateful for the Minister's final comment. If the matter comes down to trading words, my one word would replace two, which we have done in the past, but that is not the most respectable of arguments. This is the sort of small practical matter that people can actually find themselves spending an awful lot of time on. I do not want to prolong the debate now because the Minister has not been as well served as he might have been. It is not fair to him to ask for examples that he clearly cannot provide off the top of his head. This matter is technical but also practical and it would have been helpful if somebody had thought about the "what ifs". My noble friend and I do not seek to make trouble but to save trouble. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 158E not moved.]

Baroness Hamwee moved Amendment No. 148F:

Page 109, line 4, leave out paragraph (d).

The noble Baroness said: This amendment would remove the requirement for a home condition report. I accept that most components in a home information pack will be required in any event—we have been over that. However, the one that is not currently required is a home condition report—or, in old money, a survey. The noble Lord, Lord Rooker, said earlier that only a minority of people have a survey and suggested that more people should—I am not sure whether I reflect him correctly in that. However, it is the sort of thing that individuals should be able to decide for themselves.

In the compendium letter that the noble Lord, Lord Rooker, sent us, there were details about the proportion of transactions that fail and the reasons for failure. He said that of sales that fall through, research indicates that 43 per cent do so because of an unfavourable survey and, of those, 30 per cent—which is 19.5 per cent the total—fail following a lender's valuation survey and 13 per cent of the 43 per cent—or 8.5 per cent fail following the buyer's own survey. So about a fifth of transactions fail after a lender's survey and about 8.5 per cent after a buyer's survey.

Since the home condition report will not contain a valuation, we are talking about the problem of 8.5 per cent failure. The Council of Mortgage Lenders brief sent to your Lordships makes it clear that lenders, will still need to undertake a large number of physical valuations". When I read what the Council of Mortgage Lenders had to say about home condition reports, I wrote "modified rapture" in the margin.

Yesterday, the Minister told us that HBOS and the Countrywide agency support home information packs. That is not the same as supporting home condition reports in a role that would contribute to the valuation of the property. The home condition report will not be cheap. With regard to a relatively low-value property, the cost of a home condition report could be proportionately quite high.

I have deliberately not spent as long on this issue as I might have done because we have covered quite a lot of ground already. I hope to have a specific response to the issue. I beg to move.

4.30 p.m.

Baroness Hanham

My Lords, this brings us back to something I was talking about yesterday—that is, the reliability that purchasers will be able to place on the home condition report. It is a pretty widely held view that people are not going to take the home condition report as gospel, and that buyers will have to undertake yet another survey. The Minister shakes his head at that, but the matter will depend to a large extent on the whole status of home condition reports and the people who undertake them. My noble friend Lord Caithness has an amendment to which we shall come later that deals with the training requirements, the value that people will be able to place on home condition reports with regard to what they cover, and the qualifications of the people carrying them out.

The amendment moved by the noble Baroness, Lady Hamwee, is sensible, but we also need to take into account the particular difficulties. The Minister said that there would be a "dry run"; I got the information on that, as have other noble Lords. One thing to be tested out in that dry run is whether people can actually rely on the home condition report and do not have to commission a further report.

The Earl of Caithness

My Lords, I rise to support my noble friend Lady Hanham and the noble Baroness, Lady Hamwee, on this matter. This is one of the Bill's Achilles' heels—Prescott's penalty on vendors. This is where the added costs will be.

The Minister said yesterday that on home information packs, HBOS and others, are gearing up and are ready to go".—[Official Report, 19/10/04; col. 695.] I have not been able to speak to that building society, but I have spoken to others, and they have told me quite clearly that they were not going to rely on the packs or the home condition report as a basis for lending. They will continue to do their own valuation. Therefore, the vendor is going to be put to huge extra cost.

Something less than 20 per cent of people buying a property have a survey carried out and, as the Minister rightly argued, some of that is wasted money because there is only one purchaser of a property. If three surveys are made of one property, two out of the three lose money. That is not different from the situation in Scotland, where there is a different form of buying and selling, but where the purchaser still has to do a survey before entering into his or her binding contract. We now face the situation in which there will be 100 per cent surveys. That will undoubtedly be a cost to the industry that is considerably more than the saving to potential purchasers. The measure is Prescott's penalty; this is where it will really hurt—and it will hurt the pensioners, the low-paid and those at the bottom end of the market in particular.

I talked to the Countrywide and a number of other agents this morning on the question of the home condition report. I can summarise what they all said—and the Countrywide is no exception. They say that the survey is only a matter of opinion at the end of the day and is out of date pretty quickly, but that they would run with it and make money with it. That is not a good reason to legislate—in fact, it is quite the wrong reason to legislate. Surely we should be legislating to benefit people. This measure will be a hindrance.

I talked to the Consumers' Association about the home condition report, and particularly the costs, and it said that the average cost will be £635. That figure is fine if it is based on a three-bed semi-detached house, but what about a wattle-and-daub house or a 1950s house built of concrete? That will not cost the same—it will cost considerably more. The Consumers' Association, which the Minister prayed in aid yesterday, agreed that it will result in a considerable extra cost.

The great advantage we have in this country is the wide mix of properties and their variation in age. There are Tudor cottages in small villages in which farm workers live. Some may have been modernised and updated by a rich lot of people, but there are still people living in those properties, which require a great deal more attention in a survey. They will to some extent fall within the standard form that the Government, along with the industry, have produced—but it does not tell the whole story.

The Minister told only half the story in reply to my Amendment No. 158A. He said that the home condition report would enable the purchaser to establish the true value of the property. That is wrong. It will enable the purchaser to have a look at the surface condition of the property, but it will not necessarily say anything about the roof, for example. If the roof is inaccessible—particularly in a block of flats—it will say nothing about that. The report will say nothing about foundations. It is not a full survey on which the true market value of a property can be assessed. The only survey that does that is a full structural survey.

I bought my property in London on the basis of the type of survey that will be in the home condition report, which did not indicate that one of the walls was sinking and that there would be a problem with the roof. Luckily for me, the insurance company paid the cost. It was a party wall, and the person next door who bought after me was not aware of the problem when he bought it, because it did not show up on his survey, either. It was a major structural fault that came to light after both my neighbour and I had bought our properties. It could have come to light with a full structural survey, but neither of us did such a survey and so were not able to establish what the Minister calls the true value of the property. We bought at the market value on what we could see—and that is all the home condition report will tell people.

I went into detail yesterday about how quickly the home condition report will go out of date. I shall come on to more specific amendments when we debate the next clause. I strongly support the noble Baroness, Lady Hamwee, on this matter. It would be possible to take the home condition report out of the home information pack without detriment to what the Government are trying to achieve. The survey is a matter of opinion; two surveyors will have different opinions of a property, just as two solicitors will argue over something that should be agreed on by everyone. I give the noble Baroness my full support.

Lord Bassam of Brighton

My Lords, as I explained earlier, we all accept that Clause 155 deals with the contents of the home information pack, giving the Secretary of State power to prescribe the documents to be included in the pack. That is no doubt the reason why the amendment has been moved at this point.

The information prescribed is subject to the condition that it must, in the opinion of the Secretary of State, be relevant to the property and its sale and that it relates to matters that are of interest to potential buyers. We had debates on that detail earlier this afternoon. The amendment would take out the commitment to have a report on the physical condition of the property, a report which would cover the particular physical characteristics and features of the property.

I think that we have a dividing line here, and that we will have to differ on this point. The amendment would not prevent the Secretary of State prescribing the information for inclusion in the pack because Clause 155(5) is expressed as being, without prejudice to the generality of subsection (4)". So the information mentioned is not meant to be a definitive list of what will be included in the pack. However, it is hard to see how anyone could argue that information about the physical condition of the property is not relevant or is of no interest to a potential buyer.

I have only recently found the time to read the Consumers' Association report kindly circulated to us in the summer. It asks, "What do people think about home information packs?". It conducted a fairly extensive survey, of over 1,000 people who had bought or sold a property, and 82 per cent of those surveyed thought that it would be useful to have a housing information pack that included details about the condition of the property. That is a pretty powerful expression of view by people who have had experience of buying and selling property in the market. Some 82 per cent thought that it was a pretty important thing to include in the pack. That is one of the reasons why we think it is important.

The other reason, alluded to by the noble Baroness in moving the amendment, is that our research shows that 43 per cent of transactions that fail are linked to an unfavourable survey report, either a report commissioned by the buyer or one produced by the mortgage lender. Does that not tell us how important it is to potential purchasers that they have knowledge and understanding of the physical condition of the property? It is important that they receive that information right at the outset so they can make a judgment between properties and understand what it is they are looking at.

The noble Earl made some points about the importance of the survey sought by the mortgage lender. That is another important document, and clearly very important in how the market operates. There seems to be an acceptance of that importance and the fact that the market would work better if people understood at the outset what they were being confronted with. As I said, 82 per cent of those surveyed believe that having a home condition report at the outset is vital to their pursuing an interest in a property.

Many other transactions do not fail, but are delayed following a survey report while renegotiations and further investigations take place. As most transactions are in chains, the effect of such delays and failures go beyond those who are immediately and directly affected and could have an impact on more than half of the transactions in one way or another. That is why, in a nutshell, we think that home condition reports on which all parties can rely are so important. That is also why we have to resist the amendment.

The amendment would strike a shaft through the Bill in a way that would undermine an important element of the package we are trying to put together. Amendment No. 161A is consequential on Amendment No. 158F.

4.45 p.m.

The noble Earl suggested that the whole package of a home condition report would cost as much as £600 and perhaps more. There is some debate in the industry about the likely cost of the reports and the impact on the overall cost of home information packs. We think that it will take a home inspector about half a day to prepare a home condition report on a typical three-bedroom semi-detached house. The cost of a home condition report will be determined by operation of the market. We estimate that in provincial locations the cost will be in the region of £300 for one of the more typical three-bedroom semidetached houses. So we cannot agree entirely with the claim that HCRs will cost the sum to which the noble Earl in particular drew attention. They are an important document, and we think it right that the pack should include them. We therefore have to resist the amendment.

The Earl of Caithness

My Lords, before the noble Lord sits down, will he say whether the Consumers' Association report to which he alluded asked whether people would be prepared to pay the costs of the home condition report and also drew attention to the fact that the home condition report has no shelf life?

Lord Bassam of Brighton

My Lords, as I said, I have not studied the report in depth. However, it contains a whole section on costs using the £600 figure. Most of the questioning seems to have focused on how potential purchasers would want to pay the sum, and there are various figures breaking down their favoured payment method. I am happy to study the document further and tell noble Earl what more I can deduce from it. However, I am sure that he will have found the document useful himself. I am happy to copy it to him if he does not have a copy.

Baroness Hamwee

My Lords, I too was going to ask whether the survey included a reference to price to give it a context and whether it questioned any first-time buyers such as a young woman I have in mind who I suspect could not have afforded to buy the flat that she bought last year if she had had to incur that bit of extra cost. As I scribbled that down, I thought, "I imagine that the Government are not trying to use this as a mechanism to dampen house prices", but one begins to wonder. That led me to wonder whether the Government—perhaps we will explore the point at the next stage—will use their regulation-making power and power to remove items from the pack to provide that the home condition reports are not appropriate in the market renewal pathfinder areas because of the disproportionate cost.

The Minister said that the cost would be determined by the market. If the report is made compulsory, that is precisely what will not happen. If it was voluntary, there would be competition and the survey price would be determined through that route.

The Minister referred also to the figures that I quoted, but he neglected to add to the statistic that 43 per cent of transactions fail because of an unfavourable survey the comment which I added—that the Council of Mortgage Lenders has said that lenders will be doing their own thing. That throws a completely different light on the percentage. We have not heard the end of the matter, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 159 had been withdrawn from the Marshalled List.]

[Amendments Nos. 159A and 159B not moved.]

Lord Rooker moved Amendment No. 160:

Page 109, line 30, leave out paragraph (b).

The noble Lord said: My Lords, Amendment No. 160 is a technical amendment that will remove a superfluous subsection from the Bill. I hope, therefore, that I do not need to say more about it.

I shall speak also to non-government Amendment No. 239B, which is linked to this provision in Clause 253. We believe that this is an instance where immediate commencement is both justified and desirable. Since 2001 the Office of the Deputy Prime Minister has funded an extensive programme of research and evaluation in connection with home condition reports and the certification scheme arrangements that will underpin the production of those reports. We see the home condition report as an important component of the home information pack.

The research and evaluation has examined requirements for national occupational standards for home condition inspections; assessment procedures to test the competence of home inspectors; complaints and control mechanisms; recruitment of home inspectors; the format of the home condition report; insurance products and the register that will be a central repository for home condition reports. We have made substantial progress. However, we have not been able to convert the results of all that research and evaluation into a development phase because, quite rightly, Treasury accounting rules limit expenditure on development before Royal Assent. It has taken rather longer than we had intended to secure parliamentary approval for the introduction of home information packs. As a consequence, planned investment in the development phase of the scheme has been delayed. We want to initiate this at the earliest possible moment, which will, of course, be Royal Assent.

More generally, we want the Secretary of State to be empowered to make regulations as soon as he is able in connection with exclusions from home information pack duties, the contents of home information packs and home condition report certification schemes. That is why Clause 253(2)(a) provides for these provisions to come into force on the day the Bill becomes an Act. Numerous commencement orders relating to a single Act are not in the interests of consumers or the industry.

For the reasons I have just given in relation to Amendment No. 239B, delaying the commencing of Clauses 154 to 156 and 167 is not desirable. Requiring the Secretary of State to make an order before he can make regulations or provide funding towards the cost of the development of home information pack components is, in our view, unnecessary. The order would not be subject to any parliamentary procedure in any event and would involve extra administration and inconvenience for those trying to negotiate an Act with numerous associated commencement dates. It is one order too many. Therefore, I hope that Amendment No. 243A will not be proceeded with. I beg to move.

Baroness Hamwee

My Lords, we are all accustomed to commencement orders introducing legislation in stages. However, I was curious about the clauses that are to come into effect immediately. Clause 154 allows the Secretary of State to make regulations but they would relate to clauses that would not be in effect, which seems to be a case of saying, "Let us have this cake of a Bill and eat it, as by having regulations we can amend primary legislation before we have even brought it into force". I may have that wrong but it is an interesting thought. Clauses 155 and 156 concern the home information packs. It occurred to me that the need to have these in force relates to how the dry run will operate. I may be wrong about that but I should be interested to know whether that is the case. I confess my confusion about the dry run. Is that the reason?

Lord Rooker

My Lords, we are serious about the dry run. We cannot have the dry run unless we have produced the regulations and they are in force. That is the reality. It is not being done on a wing and a prayer, so the noble Baroness is quite right.

Baroness Hamwee

My Lords, am I right in saying that there is no duty in this regard? That is where the confusion arises.

Lord Rooker

My Lords, the dry run is voluntary. It will occur before the full operation of the measure. However, you cannot have a proper dry run unless people know what is expected of them. The regulations will be in place so that people know what is required of them. We cannot have people in different parts of the country inventing different packs and deciding that they will do it differently. However, the measure would not be enforceable because the enforcement process would not be operational. This is a big operation. To have a proper dry run people need to know what is expected of them. As I said in the first few minutes of today's debate, if we find that things need altering within the regulations, we can introduce amending regulations.

Baroness Hamwee

My Lords, if there is no duty, there is nothing to stop people inventing their own form of the measure. However, I believe that people will be sensible. We on these Benches do not want to undermine the operation; we want it to go smoothly. Therefore, I am not advocating that people should do their own thing but it seems to me that they could.

Lord Rooker

My Lords, during the dry run people may do nothing. That is their choice. It is voluntary.

Baroness Hamwee

My Lords, they could do nothing or they could do their own thing. I refer to the Government amendment to delete paragraph (b) of Clause 155(9). The Minister dealt with that very quickly but the paragraph deals with incidental, supplementary and transitional provisions. We have been told how important it is to be flexible. I should have thought that by deleting that paragraph flexibility is, if anything, reduced.

Lord Rooker

My Lords, I am trying to make progress. I promised the Chief Whip that I would speak briefly. There is already a general power in Clause 233(2) allowing secondary legislation made under the Bill to contain such a provision. That is why I said it was a technical amendment that removed a superfluous paragraph. It is superfluous because we can already do what it says.

Baroness Hamwee

My Lords, with the leave of the House, the code that was used was a little too opaque for me. I am grateful for that. I am sorry that we have treated this rather like a Committee stage but I have found that helpful with regard to my amendments.

On Question, amendment agreed to.

[Amendments Nos. 160A and 161 not moved.]

Clause 156 [Home condition reports]:

[Amendment No. 161A not moved.]

The Earl of Caithness moved Amendment No. 161 B:

Page 109, line 39, at end insert— (Regulations under section 133 shall ensure that home condition reports will satisfy minimum criteria likely to be acceptable to mortgage lenders.

The noble Earl said: My Lords, I have given notice to the Minister's officials that I want to break up the grouping that has been agreed. I was not party to agreeing that grouping. As I said to the officials—I am sure that they have passed this on to the Minister—I shall move Amendment No. 161 B but not Amendment No. 161C. I shall move Amendments Nos. 161D and 161E together. I shall move Amendments Nos. 161F and 163A by themselves. I shall not move Amendment No. 163B. I shall move Amendment No. 163C but not Amendment No. 163D. The reason for that is that we had a general debate on this matter with Amendment No. 158F. It seems a little pointless to have another general debate on the home condition report when we can—

Lord Bassam of Brighton

My Lords, for the convenience of your Lordships' House, is the noble Earl moving the amendments to which he referred as a group or in separate blocks? It would be easier if the noble Earl spoke to them all together.

5 p.m.

The Earl of Caithness

My Lords, I am sure that the Government would consider it easier if I spoke to them all together. As I was about to conclude when the noble Lord interrupted me in mid-sentence, because we had a general debate on Amendment No. 158F, I want to adopt a more targeted approach. Therefore, I shall move individually certain amendments as they concern specific points rather than wrap it all up.

Amendment No. 161B requires that the regulations that the Government will make, under section 133 shall ensure that home condition reports will satisfy minimum criteria likely to be acceptable to mortgage lenders". That is critical. If the Government are to put their money where they say that their thoughts are, it is essential that the home condition report is acceptable to mortgage lenders, if it is to be of any value at all. The noble Baroness, Lady Hamwee, and I spoke on the point earlier, on Amendment No. 158F.

I want the Minister to focus on that point. If the home condition report is not acceptable to mortgage lenders—I spoke to mortgage lenders this morning who said that it was not—the whole point of this part of the Bill is worthless. It means double costs, because the vendor will produce a survey. It has no shelf life and is out of date. The mortgage lender will not rely on it arid will require its own survey from the purchaser. I beg to move.

Baroness Hanham

My Lords. I support the noble Earl on the amendment. We have had some discussion about the home condition reports, but the amendment is very important indeed. The Minister is keen on telling us about when he has bought houses; perhaps we have all done it at some stage. There will always be a question of whether the home condition report will be acceptable to the purchaser but, if we are not to have a plethora of surveys going on, that must happen, as it will rule out one possible survey having to take place. If not, we are looking at three surveys having to be carried out—one for the mortgage lenders, the second a housing condition survey, and the third the one that the purchasers will almost inevitably commission for themselves.

Lord Bassam of Brighton

My Lords, I always try to approach such debates in a very constructive mode, because we need to be constructive in focusing on such issues. The provision will happen. The big lenders are coming behind it; my noble friend Lord Rooker made that plain yesterday. They support where we are going with it, and want desperately to get on with it. However, the noble Earl makes an important point. At the end of the process, we should all end up in the same position—that there be acceptance of the scheme, agreement to work towards it, and an understanding that elements of it have to work if the whole package is to be successful. The home condition report is a crucial part of that.

It is worth putting on record that, if we accepted the amendment, the Bill would have to state that the home condition report was acceptable to lenders. That is clearly a highly desirable objective. We fully intend that lenders should have a contractual right to rely on the home condition report, and it is crucial that the report contains the information that lenders will need to inform their decisions about the adequacy of the property as security for a loan. However, I am reluctant to single them out in the way that the noble Earl has suggested. It could be dangerous to do so, as it would effectively give them a right of veto over the format and content of the home condition report.

In developing the home condition report, the ODPM has—as the noble Lord, Lord Rooker, and I have made plain on many occasions—had extensive discussions with mortgage lenders, particularly the Council of Mortgage Lenders, to ensure that their information requirements are met by the format and content of the home condition reports. Although detailed requirements may vary from lender to lender, we understand that the form of the home condition report is broadly acceptable to lenders.

The noble Earl said that there is not agreement among lenders, and that particular lenders object to the way in which the idea has been developed. We would like to know who those lenders are; we clearly need to talk to them and understand some of their problems with the proposition. We do not want it to fail, and I am sure that he does not want it to fail once it is in place.

We can demonstrate that we are trying to deliver something that the noble Earl is trying to support as well, at the end of the process. It would help us if we knew where the niggles were. We do not think that his approach is right; it would certainly be wrong to provide an effective form of veto in the legislation. It is far better to sort out such detail in continued discussions and negotiations with the Council of Mortgage Lenders and the major lenders. It is clearly in everyone's interests that the home condition report is a quality document that is accepted by all who operate in the business, and that works well for the consumer interest. That is the objective that we have to seek to satisfy, in the end.

I hope that the noble Earl does not press his amendment. He could certainly help us if he could identify some of the difficulties about which lenders have expressed concerns to him.

The Earl of Caithness

My Lords, if the mortgage lenders are behind the provision as the Minister says, there ought to be a statement from the Council of Mortgage Lenders saying that it is fully behind the Government on the question of the home condition report and will accept it. There has been no such statement and there will not be, because the home condition report has no shelf life, and no lenders will commit themselves to say yes to a home condition report over which they have no control on when it is made.

The noble Lord asks me to tell him who is not in favour of the scheme. That is the same as yesterday when the noble Lord, Lord Rooker, said, "Tell me about the costs. Tell me how you get to the justification of £1,000 per home information pack". We have told government officials time and again. It is fine if they take a different view, but they should not ask us to keep telling them who is against it; they know very well who is not behind them.

The noble Lord, Lord Bassam of Brighton, said that the big lenders were moving behind the scheme. I have not been able to talk to HBOS today, but it is true that it is doing so. However, the noble Lord, Lord Rooker, told us exactly why—HBOS sees commercial advantage in doing so. That is not a way to legislate. The scheme should be for the consumer—for the people buying and selling houses—not for the Council of Mortgage Lenders to profit, and not for us agents and surveyors to profit. Those are the people who will profit, and the people who will lose out are those people whom the Government are not protecting.

The noble Lord said that there would be a contractual obligation for mortgage lenders to agree the home condition report. I see no contractual obligation in the Bill; I am trying to get to one. They will not have a veto on the regulations. If he is so confident that they all want the home condition report, they will not veto the regulations. That is a false argument.

I shall not divide the House on the issue today; it is something that I need to discuss with the noble Baroness, Lady Hamwee, because of her concerns on it. However, it is a major point that we must get right. Without the support of the Council of Mortgage Lenders, there is another nail in the coffin of the home condition report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 161C not moved.]

The Earl of Caithness moved Amendment No. 161D:

Page 109, line 45, leave out "one or more suitable certification schemes" and insert "a suitable certification scheme"

The noble Earl said: My Lords, this amendment is simple. Why can there not be more than one scheme? I beg to move.

Lord Bassam of Brighton

My Lords, Clause 156(4) allows the Secretary of State to approve one or more certification schemes. The amendment, as I understand it, would restrict that power, so that only one scheme could be approved at any one time, giving a virtual monopoly over the certification of home inspectors.

If there is more than one scheme, as long as they conform to the same exacting standards and criteria, we would have little difficulty with that. Clause 156(4) enables what the noble Earl is after.

The Earl of Caithness

My Lords, I am grateful to the noble Lord, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 161E not moved.]

The Earl of Caithness moved Amendment No. 161 F:

Page 110, line 10, at end insert "which may be achieved by the government underwriting scheme"

The noble Earl said: My Lords, we come to the important point about insurance. The noble Lord, Lord Rooker, said yesterday in Hansard col. 694 that there would not be a Government scheme to back up the insurance industry, yet the Consumers' Association, upon which the Government have relied so much in the past, has said that without such backing the scheme would not work. Will the Minister lift the veil a little more? What progress have the Government made with the Association of British Insurers towards securing satisfactory commercial insurance arrangements? How do they see a scheme working that will cover all the pitfalls and potential liabilities that will arise from the home condition report? I beg to move.

Lord Bassam of Brighton

My Lords, I wish to make it clear from the Dispatch Box that we see it as essential for consumers that insurance is in place, so that lenders can rely on the home condition report. The insurance needs of home inspectors continue to be the subject of extensive research and discussion with stakeholders. As we detailed in Committee, that research includes work carried out on behalf of ODPM by consultants Willis Ltd and Bryan Fowler Consulting, into suitable means of providing a robust insurance regime, which will include insurance of last resort to be provided by the certification scheme. Substantial progress is being made, and we are confident that it can be made available.

We have been greatly assisted by the Association of British Insurers and the industry working group—of which the noble Earl will be aware—who have been advising us on insurance matters. Discussions with commercial insurers have continued since Committee, and will continue, aimed at identifying options based on a commercial approach. They would include commercially provided insurance complying with minimum terms prescribed by the certification scheme, and commercial insurers have responded positively to that approach. The possible basis for an insurance regime will be published when further work is complete. I cannot tell the noble Earl when that will be.

However, I can give a commitment. We do not intend to introduce compulsory home condition reports until we are satisfied that satisfactory insurance arrangements are available. We are confident that adequate insurance will be available without the need for a government guarantee. I think I have answered the noble Earl's point. Work is proceeding, we are making more than satisfactory progress and we are being greatly assisted by the industry and the stakeholders involved. We are confident that we can secure this matter in time to ensure that the legislation takes off on the due date.

The Earl of Caithness

My Lords, I am grateful to the Minister for that full answer, which was helpful and it is important for it to be on the record that insurance of last resort will be by the certification scheme or schemes. Has the Minister had any further contact with the Consumers' Association on its concerns? It has categorically stated that the scheme will not work without government backing. Has it been reassured by what is happening now?

Lord Bassam of Brighton

My Lords, I am not aware of any further communication with the Consumers' Association. I certainly cannot speak for it. The noble Earl has asked a question, and I shall check to ensure that the association is actively engaged in the process so that any concerns that it may have can be looked at.

The Earl of Caithness

My Lords, I thank the Minister again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord Bassam of Brighton moved Amendment No. 162:

Page 110, line 13, after "for" insert "requiring"

The noble Lord said: My Lords, I think I shall give a classic lead-off here. This has a great start. It says here that it is vital for the public to have confidence in the new home condition reports. I shall simply move the lead amendment without speaking to the other amendments, which are technical, so I shall not detain your Lordships' House unless I am asked a question. I beg to move.

Baroness Hanham

My Lords, I am sorry but the Minister was moving so quickly. I am not sure that Amendment No. 165, which is in this group, is a technical amendment. Amendments Nos. 162 and 163 provide the way for Amendment No. 165, which is an important amendment on the register of home condition reports. I am on the ball today, am I not? Should I continue to address the matter before the Minister comments?

Lord Bassam of Brighton

My Lords, the noble Baroness is correct. I was doing the House a great discourtesy in not addressing Amendment No. 165. I shall riot speak at length, but I shall certainly describe the effect of that amendment.

It inserts a new clause after Clause 156 which would enable the Secretary of State to make provision for a register of home condition reports. We intend that the register will comprise an electronic databank of all home condition reports prepared by registered home inspectors. Only registered home inspectors would be able to store or "register" home condition reports. The new clause specifies that such a register may be kept by or on behalf of the Secretary of State or such other person specified in the regulations. We also envisage that the certification scheme would use the register of home condition reports to monitor the work of home inspectors to ensure that they maintain the required standards in their work.

I hope that that adequately describes Amendment No. 165, and I apologise for not referring to it directly because the other two amendments are more technical. I beg to move.

Baroness Hanham

My Lords, I thank the Minister for finally getting round to the new clause. I am glad that he did, because, having read it, and having heard the explanation of it, I am bound to ask, "Why?".

The only justification that the Minister gave for including the clause was so that someone could check up on the homes inspectors and ensure that they were compiling the reports correctly. We have already established that the home condition reports will have an extremely short shelf life. They will not he of any interest to anyone after a few months. What possible purpose is there in retaining a database of every home condition report carried out in the country over the year?

The Minister has waxed lyrical about the fact that there are over 40,000 sales a year.

Lord Rooker

A week.

Baroness Hanham

My Lords, that is even worse. I thought that the figure was rather small as I was saying it. I am not going to do the maths, because I shall end up in even more trouble.

Lord Rooker

Two million a year.

Baroness Hanham

My Lords, 2 million reports a year will be lodged on the data base so that some bureaucrat every so often can dip in to have a look to see whether they have been carried out correctly.

I am bound to say that this is one of the most ridiculous clauses in this quite ridiculous part of the Bill. Unless the Minister can come up with a far better justification for its inclusion before Third Reading, we would be minded to test the opinion of the House. This will be an expensive procedure as there are bound to be requirements for new IT systems, which always go wrong, and problems of who has access.

I question the whole clause, so perhaps the Minister would like to give better justification in reply. This is a ludicrous proposal.

Baroness Hamwee

My Lords, one of the provisions of the proposed new clause is that anyone can pay a fee, inspect the register and take copies of any documents. I would be interested to know how this lies with the assurances given to the House earlier today by his noble friend about confidentiality. The noble Lord carefully described the "password" scheme which agents operate. It allows only individuals who have registered with the agent and who have given their details and a password to inspect documents, including the home condition report. The searches are for public information in any event. The House needs to know how the statements made today are not undermined by the provisions of this new clause.

The Earl of Caithness

My Lords, I am grateful to the noble Baroness, Lady Hamwee, because I wanted to raise the same point. I have to say to the noble Lord, Lord Bassam, in the nicest possible way that his explanation of the amendment was not the best speech he has made on the Bill. I do not blame him—we have all had lousy briefs and perhaps it was thought that the amendment would be dealt with late last night and that their Lordships would not be paying attention. We are paying attention.

What a load of bureaucracy is coming out here. Who can have access to the register? Can anyone tap into it and obtain home condition reports? There are staffing implications. What are the costs of the register and have they been taken into account in the economic assessment of the Bill? What happens if on looking at the register one finds that two surveys were done within a month of each other but that both are quite different? A survey is someone's opinion, which is why it is not a valid document.

Will the certification scheme take one surveyor to task and cross him off the list? Will there be recompense because a potential buyer who looked at surveyor A's report thought that the property was not worth buying but if he had seen surveyor B's report would have said, "With that survey, I would have bought the property. It was the property of my dreams. Surveyor A wrote such a bad report but surveyor B has written a good report"? This provision is nonsense and it will lead to great dispute.

What will happen when two reports are made of a property within a short time? What action will the Government, the certification scheme or the registrar take? The proposal needs a great deal more explanation before it can be accepted.

Lord Bassam of Brighton

My Lords, I have listened carefully to the points that have been made. I express my gratitude to the noble Baroness, Lady Hanham, for spotting that I had not properly moved the amendment. Having listened to the points made by her and the noble Earl, Lord Caithness, I am minded to take the amendment away and provide further thought. Some good questions have been raised.

However, I want to make it clear that I would not want objection to be made to our bringing it back at Third Reading. The provision is of value, but I want to be able to provide better detail than I can across the Dispatch Box today. Rightly I have been asked important questions about data protection, costs, staffing levels and bureaucracy. Those are important points. We will need to undertake more consultation to ensure that we have the provision right because not only does it have merit but it is potentially an important element of the scheme.

If noble Lords are happy that I should not move Amendment No. 165 today but undertake to bring it back and provide further and better particulars between now and Third Reading and at Third Reading, with the leave of the House I am happy to do that.

The Earl of Caithness

My Lords, I was greatly encouraged by what the noble Lord said. Will he write to us well before Third Reading and ensure that this time I get a copy? The noble Lord, Lord Rooker, said that I have made accusations. I have not made accusations—it is a fact that I did not receive any of the letters. We need to have this information in advance.

Lord Bassam of Brighton

My Lords, I was very careful in what I said. I said that between now and Third Reading we would find some further and better particulars and write on the issue. My noble friend Lord Rooker is rightly agitated to ensure that the noble Earl receives his copy of the letter and it will be sent by registered post if necessary. We will also provide more detail at Third Reading when we bring the amendment back.

On Question, amendment agreed to.

Lord Rooker moved Amendment No. 163:

Page 110, line 14, after "scheme" insert— ( ) for the keeping of a public register of the members of the scheme;

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 163A:

Page 110, line 15, at end insert "; and (f)—that a home condition report must be no more than three months old at the point at which a property is marketed

The Noble Earl said

We return to the validity of the home condition report. Here I am trying to help the Government to make it a more acceptable document. My amendment says that a home condition report must not be more than three months' old when a property is marketed. That is an important provision in that it ties the date of the report to within three months of marketing. It will not however solve the problem of the shelf life of the home condition report, which will be of continued concern. It could be out of date within a few hours or days due to natural causes. However, I understand that the Government want to include this by regulations, so surely it ought to be on the face of the Bill. I beg to move.

5.30 p.m.

Lord Bassam of Brighton

My Lords, in spirit, we do not disagree with what the noble Earl is trying to achieve through his amendment. We agree that the report should not really be more than three months old when a home is first marketed. As I suspected he would, the noble Earl anticipated my response—that is, we intend to provide for this matter in regulations rather than on the face of the Bill. As I have pointed out in debates on other amendments, we want flexibility so that the conditions of the scheme can be adjusted relatively speedily if circumstances change.

I know that the noble Earl will not be satisfied with that answer, but it is a rock-solid commitment and it will appear in the regulations. We are coming at this issue from the same point. We do not consider it right that that kind of detail should be on the face of the legislation.

The Earl of Caithness

My Lords, we are trying to arrive at the same point, but I want the commitment to appear on the face of the legislation. Can the Minister assure me that the Government have no intention of including in the regulations a condition that the home condition report must be made within three months of the date of the offer being accepted?

Lord Bassam of Brighton

My Lords, my noble friend Lord Rooker has this right. The answer is that the report must be made within three months of the property being marketed.

The Earl of Caithness

My Lords, I think that the Minister is giving me the assurance that no regulation will be tied to the date of the acceptance of the offer but only to the date of the marketing, even though the offer may be made a year and a half after the date of the marketing. Therefore, the home condition report relates to day one and not to a date 18 months later.

Lord Bassam of Brighton

Yes, my Lords, that is right.

The Earl of Caithness

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 163B not moved.]

The Earl of Caithness moved Amendment No. 163C:

Page 110, line 15, at end insert— ( ) The home condition inspector shall not be the employee or agent of a company or associated body linked to an estate agency.

The noble Earl said: My Lords, this is a consumer protection amendment. I think it would be quite wrong if the surveyor who was to carry out the home condition report was in any way connected with the estate agency or solicitor's firm involved. In the United States, the law states that such a person should not be connected. If the home condition report is to be accepted by the vendor, the purchaser and the mortgage lender, which is what the Government want, the report must be made by a third party outwith any firm associated with the purchaser or the vendor.

If someone goes into an estate agency and says, "I want you to market my property", and the agent replies, "Oh yes, we can do that for you. You need a home condition report. Sitting here at the desk beside me is someone who can do it for you. We'll run out and do it straight away", where is the independence for the purchaser and the guarantee that the report will be done at arm's length? I do not believe that any amount of regulation can satisfy a purchaser on that front. That is another reason why I do not think that the home condition report will be the success that the Government believe it will be and, in order to try to help them, I have tabled this amendment. I beg to move.

Lord Bassam of Brighton

My Lords, we said in Committee that we agreed with the noble Earl that the home condition report should be completely objective. I recognise and understand the concern that such objectivity could be compromised if there were to be any potential or actual conflict of interest. I know that particular concern exists about the risks that might arise where, for example, the home inspector and the seller's estate agent are employed by the same company.

However, we believe that the checks and balances that we intend to put in place will ensure that those fears, while completely understandable, are ultimately misplaced. We intend to tackle these risks through the regulations made in accordance with Clauses 155 and 156 and the terms under which home inspectors will belong to the certification scheme.

All the main stakeholders, including the Council of Mortgage Lenders and the Consumers' Association, are involved in this work, and certification schemes will not be approved unless all the interested parties can rely on the reports.

Perhaps overnight the noble Earl had the opportunity to read the letter of 11 October from my noble friend Lord Rooker. In that letter, he clearly outlined the checks and balances that we intend to put in place in order to ensure the competence and integrity of home inspectors. I am happy to repeat those assurances here.

We would expect a certification scheme to establish the duties and responsibilities of home inspectors and to publish clear guidance about the standards of conduct that they must adhere to, such as the behaviour required of inspectors in cases of perceived and actual conflicts of interest. An inspector could be required to make a statement on the front page of the home condition report if he or his firm were related to any of the parties or professionals involved in the sale or purchase of a property.

We would also expect a certification scheme to monitor and audit the work of home inspectors to ensure that the required standards were being maintained. As I said earlier, we intend that an electronic register of all home inspectors and condition reports will be maintained and, subject to what we may say at a later stage, we think that that may well assist with that responsibility.

We envisage home inspectors maintaining an internal mechanism for responding to consumer complaints and working within a quality assurance regime. Where consumers are not satisfied by the home inspector's response to their complaint, we propose that the certification scheme should offer a consumer-friendly mediation and adjudication service that would be run independently from the scheme. None of that would oust consumers' rights to pursue through the courts any civil liability that might arise through an inspector's or another person's negligence.

We foresee any certification scheme maintaining a robust disciplinary regime that would take action against inspectors who had failed to maintain the highest possible standards, whether of competence or conduct. We anticipate that that would be backed by a range of sanctions, including the option of expelling a home inspector from membership. If expelled, the former inspector would no longer he able to gain access to information that he had previously held, and it would prevent him or her producing any more home condition reports.

Our research indicates that mistakes in home condition reports will occur in only a small proportion of cases and that most of the resulting claims will be for modest sums. However, any approved certification scheme must contain provision for ensuring that home inspectors have suitable indemnity insurance.

I hope that, having said all that, the noble Earl will feel somewhat more assured. As I have said on a number of occasions, we are seeking to arrive at the same point, although we are taking a different route. I think that our route, with its extra flexibility and the rigour of our checks and balances approach, will achieve the objective that the noble Earl seeks.

The Earl of Caithness

My Lords, I am grateful to the Minister but I am not more reassured. We have a major difference of opinion. He believes that he can achieve by regulations sufficient independence and the integrity required for a surveyor. I do not believe that; I do not think that it will work in practice. I do not think that any of these checks and balances will be sufficient for the consumer. They will work, but the purchaser will always be wary of a report prepared by someone in the same firm as the estate agent or solicitor.

I would certainly not advise, and would continue not to advise, any purchaser to rely on a home condition report prepared by someone in the same office as the estate agent. Whatever the regulations or the Minister say, there is far too much scope for collusion. We are trying to protect the vendor and to achieve the best price for the vendor's property. That is what we are required to do. If a surveyor and a vendor are in the same office, the market is lousy and the instructions are "Get the deal done whatever", I believe that there will be endless scope for problems.

I remember the bad housing market of eight or nine years ago. People were dropping prices. Agents were saying, "You have to drop your price". It was not necessarily in the vendor's interest but they wanted the fee. The surveyor will want the fee. The payment of fees will not wait until the sale and therefore there will be huge pressure, particularly on big firms such as Countrywide, to ensure that sales go through at whatever price just to get the fees.

Having said that, I thank the Minister for the way he has handled this group of amendments on Clause 156. I think he will agree that we have probably had a better and more constructive debate in taking them individually than trying to wrap it all up generally. It has certainly been more focused and I have received better answers as a result. I thank the Minister for that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 163D to 165 not moved.]

Clause 157 [Enforcement Authorities]:

Baroness Hanham moved Amendment No. 166:

Leave out Clause 157.

The noble Baroness said: My Lords, in moving Amendment No. 166 I shall speak also to Amendments Nos. 167 to 170, which appear also in the name of the noble Baroness Lady Hamwee.

At the previous stage we spent a rather short time on the enforcement section regarding the home condition report and the home information packs. We have concerns that the enforcement regime will be carried out by the trading standards authority and about what enforcement is envisaged.

In Committee the Minister suggested that enforcement would really be carried out only as a result of complaints. That is not what the clause states. The clause gives some pretty wide powers to trading standards officers to demand the production of documents from both the vendors and their agents and the purchasers, who might be required subsequently to produce those documents, for a reason which is not at all clear within the clauses we are debating.

The clause also introduces a penalty charge notice scheme. I notice now that the enforcement agencies seem to be running around after people on bicycles, or people who are drinking alcohol in the streets. It is involved in all sorts of other innumerable areas of penalty charge notices. I suspect that there might be more chance of getting these penalty notices paid, but it is a very strange penalty. Of course, I accept that it is a civil penalty rather than a criminal penalty, but it is an unusual form of bringing people to task.

We did not discuss in much detail the enforcement provisions in the Bill as we sat rather late. We are very concerned about the implications of what is proposed. The provisions in the Bill simply allow enforcement by the trading standards officers; that is, to go in and ask wherever they wish for such information, and that does not seem to be regulated or restricted in any way.

We come back to the question of the bureaucracy attached to this. How much will it cost? What will be the purpose behind this form of enforcement, and how and to whom will these enforcement officers report? If they are trading standards officers, will it be the responsibility of the local authority to ensure that it knows what is being carried out?

It is quite a serious interference in the lives of a private citizen. It conjures up the suggestion that every time a "for sale" sign is put up the local trading standards office will immediately be sitting waiting to pounce to see what is going on. I do not think that estate agents or those preparing the home information packs will be particularly engaged by all of that. There is no indication of whether notice has to be given by the trading standards authority of the information it needs or whether it can make a sudden sweep.

In view of the enthusiasm with which the Minister believes that the home information packs will now be greeted by all sides, how many breaches does he anticipate are likely to happen within the 40,000 sales per week? All these clauses and provisions raise far more questions than we have had time to deal with in the past. I hope that the Minister will be able to give us some satisfactory responses. I beg to move.

5.45 p.m.

Baroness Hamwee

My Lords, as the noble Baroness said, these amendments are also in my name. I thought it would be inconsistent with the points that I have made earlier, together with my noble friends, on this part of the Bill not to seek to take out the enforcement provision. I do not think we were sufficiently on the ball to have tabled an amendment to remove Schedule 8, which we probably should have done.

In wanting to see a voluntary scheme, it would have been inappropriate to accept enforcement. As I said previously, I take the view—I know that we differ from the Minister—that we do not see it as the role of the state to enforce these provisions. Trading standards officers deal with matters where in fact or at any rate potentially—I say "potentially" thinking of situations such as food poisoning or something which should not be there cropping up in a pie or whatever—a large number of consumers are affected. Here, we are talking about transactions between two people. I support the noble Baroness.

Lord Bassam of Brighton

My Lords, if we were to go along with the amendment and the other amendments in this group, it would completely deconstruct the whole enforcement regime. That is clearly what the noble Baroness seeks to do. I find that most peculiar. As to the importance of these transactions, they can be the biggest purchase people make in their lives. They have the capacity for immense impact on those involved in such transactions if they go pear-shaped. Money can be lost and there is a potential for loss of business. All that can impact on the housing market. The case for effective regulation in this sector has been long and well established. The Estate Agents Act 1979 and the Property Misdescriptions Act 1991 are already enforced by trading standards and weights and measures authorities, which have responsibilities under that legislation. That seems to sit rather ill with the comments of the noble Baronesses, Lady Hamwee and Lady Hanham.

Obviously, if we are to have a statutory scheme we need to have a system of enforcement. It is the case that trading standards officers will play a major role in enforcing the home information pack duties. They seem to be best placed to do it. They are already involved in this and currently there is a lot of experience based on their activities.

The amendments are a series of clause stand part debates rolled into one. The noble Baroness will not be surprised to hear me say that we could not possibly accept them. They would make the scheme of much less value. Support would not be provided for the scheme without a system of enforcement. It would be foolish indeed to proceed without it.

I cannot accept that this will be, as the noble Baroness. Lady Hanham, describes it, an over-zealous exercise by trading standards officers. They have discretion. They act on good principles. Those are set out for good measure in the enforcement concordat, something of which I am sure those who have been involved in local government are well aware. We shall be consulting with LACORS (the Local Authorities Co-ordinators of Regulatory Services) and others on the best means of ensuring that trading standards officers can provide not just enforcement but effective help and advice to consumers and those providing services.

We see the trading standards officers' role in this area very much as protecting the interests of consumers. By that obviously we mean both buyers and sellers in the marketplace. Trading standards officers rely on public support in their efforts to protect consumers. There is a natural concern among some trading standards officers that the public's perception of their work might change if they apply home information pack sanctions, in particular to private individuals.

However, we think that we can address the issue in a public information initiative describing the role of trading standards officers. Effective enforcement is very much in the public's interest. Our objective is to look after the interests of consumers. We shall continue to work with those enforcement bodies and agencies which are responsible for coordinating the enforcement activities of local authority trading standards officers.

During my time working in local government as an official, LACOTS—the body that was the predecessor to LACORS—seemed to be very effective indeed in coordination. It seemed to work extremely well in terms of the advice it gave. It was much credit to LACOTS that the concordat was brought into being. It looked at a measured means of enforcement and an approach that sought to get compliance, not just through rigorous activity in the court setting or through confrontation but through guidance and assistance and enabling people to understand exactly what was required in achieving compliance.

The noble Baroness, Lady Hanham, asked about the level of activity that we anticipate. We are working very closely with LACORS. There will be an additional £2.2 million set aside for enforcement costs. That is based on information provided by LACORS. Of course we may well need to adjust those figures as and when the details of the packs are finalised. So we are making financial provision for enforcement. The sum suggests to me a fairly modest additional element will be included, but nevertheless it is right that we try and work with LACORS to assess the impact on trading standards workloads that this provision will bring. We certainly respect that point. I cannot give the noble Baroness more precise figures. Obviously, it will depend on the operation of the market and how many properties are bought and sold in a given year. As we all know, they can fluctuate fairly wildly. There are now about 2 million sales a year; in the past there have been half that number when the market has not worked as efficiently and effectively as it currently does.

Having heard that, I hope that the noble Baroness will feel able to withdraw her amendments.

Baroness Hanham

Well, my Lords, I suppose that if you set about having a statutory scheme, you then have to try and find out about having statutory enforcement. The one route leads you to the other route. It is obvious to the Minister that we are not in favour of a statutory scheme. Of course this statutory enforcement therefore falls very much within our view of Part 5 being a statutory obligation.

I note that the penalty charge notice system, which, as I have said, is creeping in all over the place, has a penalty of £500. Presumably, that is for any breach that the trading standards officers might decide has occurred—perhaps something wrong with the housing condition report or the fact that somebody had not put in a particular survey. It is very unclear. I can only assume that once again the regulations, which we are not going to be given the opportunity of seeing during the passage of this Bill or, by the sound of it, during the passage of anything else, will give an indication of likely problems that will be sussed out by the trading standards officers.

I hear the Minister's reply. I shall look at it carefully. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 158 [Power to require production of home information packs]:

[Amendment No. 167 not moved.]

Clause 159 [Penalty charge notices]:

[Amendment No. 168 not moved.]

Clause 160 [Offences relating to enforcement officers]:

[Amendment No. 169 not moved.]

Clause 161 [Right of private action]:

[Amendment No. 170 not moved.]

Clause 162 [Application of Part to sub-divided buildings]:

[Amendment No. 171 not moved.]

Clause 163 [Power to require estate agents to belong to a redress scheme]:

[Amendment No. 172 not moved.]

Clause 164 [Approval of redress schemes]:

[Amendment No. 173 not moved.]

Clause 165 [Withdrawal of approval]:

[Amendment No. 174 not moved.]

Clause 166 [Office of Fair Trading]:

[Amendment No. 175 not moved.]

Clause 167 [Grants]:

[Amendments Nos. 176 and 177 not moved.]

Baroness Hamwee moved Amendment No. 177A:

After Clause 167, insert the following new clause—