Homes Bill

Public Bill Committee, 18 January 2001.

Standing Committee D

Homes Bill

Roger Gale (Conservative, North Thanet)

Good morning. Before we move on, I believe that there is a point of order.

Nigel Waterson (Conservative, Eastbourne)

On a point of order, Mr. Gale. It has started, by which I mean that Government amendments have started seeping on to the amendment paper. On more than one occasion, both in Committee and on the Floor of the House, I have mentioned my apprehension that the tabling of Government amendments may undermine the programme resolution. The Government have had an entire Parliament and—18 years before that—to think about the Bill. We have started the Committee stage, yet a raft of amendments appeared yesterday. I accept that a couple of them are drafting amendments, but some are more substantive and one or two are wholly incomprehensible to us, and bodies such as the Law Society.

I am putting down a marker. More amendments may be seen and, as we gauge the size of debate that they will generate, we reserve our right to raise the issue of reconvening the Programming Sub-Committee.

Roger Gale (Conservative, North Thanet)

I appreciate the marker, but what is the point of order?

Nigel Waterson (Conservative, Eastbourne)

I am merely drawing attention to the point.

Roger Gale (Conservative, North Thanet)

The Committee heard what the hon. Gentleman has to say. I restate what I said at the start of proceedings on Tuesday. I shall consider reconvening the Sub-Committee, as its Chairman, if it becomes apparent to me that that is necessary. That will become only apparent when I have heard representations through the usual channels, in the normal courteous manner.

Tim Loughton (Conservative, East Worthing and Shoreham)

On a point of order, Mr. Gale. Would you make an announcement on jackets to avoid any confusion about secret deals?

Roger Gale (Conservative, North Thanet)

I thought that I had made it clear at the start of the previous sitting that, as far as I am concerned, hon. Members have blanket consent to remove jackets as they wish. I cannot speak for Mr. Stevenson, who must make his own judgment. Clause 2 Responsibility for marketing a property which is on the market

Clause 2 - Responsibility for marketing a property which is on the market

Don Foster (Liberal Democrat, Bath)

I beg to move amendment No. 26, in page 2, line 25, at end insert—

`(5A) The seller does not become responsible under subsection (5) by marketing the property to an individual who is known to him or by virtue of any informal conversation with any individual.'.

I ran to ensure that I was here on time this morning but, in view of the time wasting, perhaps I did not need to bother.

You were privileged, Mr. Gale, to hear the use of argument A in the first sitting. Unfortunately, Mr. Stevenson, who was in the Chair for our second sitting, had not been acquainted with it, so we had to explain its ramifications to him. To avoid any difficulty for you, I should explain that during your absence, the hon. Member for Eastbourne (Mr. Waterson) introduced a new character into our proceedings: the owner of 74 Acacia avenue.

Nigel Waterson (Conservative, Eastbourne)

As this shadowy character is obviously going to become a close friend of and regular attender of the Committee, should we give him a name? Mandelson perhaps?

Don Foster (Liberal Democrat, Bath)

I have not yet been notified of the chap's name. I know that he is a regular recipient of ``Focus'' newsletters but rarely receives copies of the ``In Touch'' newsletter, which was a point raised during our second sitting.

The important point is that the occupier of 74 Acacia avenue, Mr. Mandelson or whoever, is a regular habitue of his local public house.

David Curry (Conservative, Skipton and Ripon)

That is tautologous. Such a person can be a regular or an habitue but he cannot be a regular habitue.

Don Foster (Liberal Democrat, Bath)

I apologise to you, Mr. Gale, to the right hon. Gentleman and to the entire Committee for wasting time with tautological phrases. I will try to do better.

The chap goes to the pub regularly. On Second Reading, the hon. Member for Eastbourne and others asked what would happen if, during conversations in the pub, the chap announced that he planned to sell his house—74 Acacia avenue. I had hoped that you would select amendment No. 17, Mr. Gale, which states:

after `action', insert `excluding casual conversations in premises licensed for entertainment or for the sale of intoxicating liquors'.

However, you selected amendment No. 26, which would insert

`The seller does not become responsible under subsection (5) by marketing the property to an individual who is known to him or by virtue of any informal conversation with any individual.'.

That stands whether that conversation takes place in a pub or elsewhere.

Our concern is that there remains a lack of clarity as to when it can be deemed that the sale process has begun. Once it is deemed that the sale has begun, clause 3(2) states:

The responsible person shall have in his possession, at all times during that period, a seller's pack for the property which complies with the requirements of any regulations under section 7.

That means that if the occupier of 74 Acacia avenue indicates in a casual pub conversation with somebody who is not a friend or relative or is little known to him that he intends to sell his property, he is not only covered by the Act but, more importantly, must have a copy of the seller's pack in his possession. If the conversation involved more than one person, presumably the occupier would have to have more than one copy on his person. As he is such a gregarious character, and might speak to many people in the pub, he would have to possess numerous copies.

This is a probing amendment that seeks clarification from the Minister on the point at which clause 2, and the rest of part I, will come into effect. As it stands, the wording is seriously ambiguous, which will affect its interpretation. Failure to comply with the Act will lead to criminal prosecution, so it is a very serious matter and we need to be clear about precisely when the sale is deemed to have started.

Although the Minister may not be prepared to accept amendment No. 26—I suspect that he would have preferred amendment No. 17 with its direct reference to the pub—I hope that he is willing to provide much greater clarity on the issue.

Roger Gale (Conservative, North Thanet)

Before we continue, I appreciate that we have to brighten our dull lives, and that a certain amount of levity in the Committee is therefore in order—but only a certain amount. Some jokes wear thin, and the gentlemen of the press have been known to make hay at the expense of the dignity of the House. Although 74 Acacia avenue and argument A are acceptable shorthand, we should draw the line there.

Nigel Waterson (Conservative, Eastbourne)

Right. Mr. Gale, I promise that the word ``Mandelson'' will not pass my lips again during the sitting. However, it is helpful to be able to refer to an address, and your ruling allows that.

The hon. Member for Bath (Mr. Foster) obviously has a sentimental attachment to amendment No. 17 and bitterly resents that it was not selected, but, effectively, we debated it when the Committee discussed amendment No. 26.

The Committee supports the thrust of the hon. Member for Bath's argument, but the Minister shot his fox, or at least wounded it—if that is not too topical an analogy—when he said on Tuesday that he would introduce regulations to deal with sales to friends and close family members; I was desperately trying to find that part in Hansard.

The Committee will recall our long and learned debate about what constitutes a family or a trust and so on. However, with specific reference to friends, does the Minister think that such points will be swept up in the regulations?

The hon. Member for Bath raised an important question: would the proposed regulations set the machinery of justice moving if the seller were to have an informal chat with someone in a pub or elsewhere? Will the Minister make clear whether the legislation would apply to someone selling in such circumstances?

On Tuesday, the Minister used the word ``friend'', and I wait agog to discover how the departmental draftsmen will define the term. Their definition might not encompass mere acquaintances or drinking buddies, but the legislation should not apply to such informal relationships. It is bad enough that the panoply of the criminal justice system is to be wheeled out to deal with ordinary people engaged in free contractual relations in the buying and selling of property, but to apply it to people making such transactions freely and informally is anathema. Will the Minister assure me that the term ``put on the market'' will not catch friends of the seller or people introduced to the seller through friends? Will that be made clear in the legislation?

As the Committee stage progresses, I fear that the Bill will shrink while the mass of regulations grows. Given what the Minister has said, it seems unlikely that the Committee will have an opportunity to consider even some draft regulations.

I support the thrust of the argument of the hon. Member for Bath, and look forward to hearing the Minister's response.

Geoffrey Clifton-Brown (Conservative, Cotswold)

I seek your guidance, Mr. Gale. I want to make a narrow but important point about clause 2 that is tangential to the amendment. Are you minded to have a clause 2 stand part debate, or should I make my point now?

Roger Gale (Conservative, North Thanet)

Curiously enough, the Clerk and I have been discussing that. The hon. Gentleman knows that I am relaxed about such matters. The issues that would be raised in a clause stand part debate can be covered during the main debate on the amendments or there can be a separated debate the end. If it would help the Committee, the hon. Gentleman can raise his point now, on the understanding that it is likely that I would therefore be minded not to have a clause stand part debate at the end. The decision is for him and his colleagues.

Geoffrey Clifton-Brown (Conservative, Cotswold)

There is a weakness in clause 2(3). It refers to

A person acting as estate agent.

The Committee knows that sometimes, more than one estate agent is appointed to sell a property, and I can envisage many situations where there might be a muddle about which agent is responsible for ensuring that there is a seller's pack. That aspect of the clause needs to be tightened up

In our previous sitting, the Minister mentioned introductory agents. An agent might know that someone is about to put a property on the market, and might introduce a purchaser to that seller, even though another agent has been instructed. In such circumstances, who is responsible for ensuring the production of the seller's pack—the introductory agent or the agent already instructed? The Minister should clarify those two important points.

Chris Mullin (Labour, Sunderland South)

I heartily second your point, Mr. Gale, about 74 Acacia avenue testing our good humour. Had you been present at our previous sitting, you would have heard a lot of nonsense about a lady in red sequins and even some references to the gestapo. I do not intend to pursue those this morning. I hope to satisfy the concerns of hon. Members who have spoken today.

The Bill places the obligation to produce a seller's pack only on those marketing a property

to the public or to a section of the public.

I shall explain the reasoning behind that. Ideally, we would like anyone who is selling a house to have prepared a seller's pack before seeking to interest potential buyers, but we also have to consider practicality and enforceability.

Most people make a deliberate decision to market their property, and then approach an estate agent, who mails out particulars, or advertises in the local press or the shop window. A private seller might advertise in the local paper, through a ``for sale'' notice in the front window, or on the internet. In each case, there is clear evidence of marketing, and a seller's pack should have been prepared beforehand.

There are, however, cases in which a person might let family or acquaintances know that they are interested in selling their home. It would be difficult to enforce the production of a seller's pack in such cases because there would be no tangible evidence of marketing. The person may simply have been signalling an intention to market through an agent later.

We have carefully considered whether exempting such cases significantly undermines our policy, and have concluded that it does not. Such cases will constitute a small minority. In nearly all of them, the buyer will be known to the seller, so there will be a much lower chance of concealing material information that causes delays. We anticipate that it will become normal practice for buyers to ask to see a seller's pack, so should a buyer express an interest, the first action would usually be for the seller to commission the necessary work.

Clause 2(5) provides that the seller becomes responsible for marketing the property—and therefore subject to the seller's pack obligations set out in clause 3—when he either puts the property on the market or makes public the fact that it is. Clause 1(4) provides that a property is put on the market at the point at which the fact that it is, or may become, available for sale, is first made public. Clause 1(6) provides that a fact is made public when it is advertised, or otherwise communicated, to

the public or to a section of the public.

That rehearses our discussion on clause 1.

The expression ``public or a section of the public'' has been used before in legislation where some flexibility is desirable, for example in the Race Relations Act 1976. The expression is not defined in the Bill—and the same is true of other legislation—precisely to maintain flexibility. The use of the expression signals an aim to cover some people and not others. Were that not so, communication to any person would constitute marketing.

With regard to case law in other contexts, we consider that ``the public'' relates to the public at large, and that ``section of the public'' would not include family members, individuals, or small groups of people, especially if they were known to the seller. Therefore, the Bill's drafting does not affect marketing to individuals and goes further than the proposed amendment.

In the final analysis, it will be for the courts to determine, on the evidence of the case and the purpose of part I, whether marketing had extended to the public or a section of the public.

Don Foster (Liberal Democrat, Bath)

Will the hon. Gentleman give way?

Chris Mullin (Labour, Sunderland South)

I will in a moment.

We are confident that the actions mentioned in amendment No. 26 do not amount to putting the property on the market as defined in clause 1(4) and do not therefore trigger the seller's pack obligations set out in clause 3.

Amendment No. 17 refers to conversations that might take place in a pub. My hon. Friend the Minister dealt with that when we debated clause 1 on Tuesday. He said that a conversation between individuals known to each other would not constitute marketing. However, as he put it, if someone stands on a bar stool in the pub and announces to all and sundry that his home is for sale, those obligations might well be triggered. That is the crucial distinction.

The hon. Member for Cotswold (Mr. Clifton-Brown) asked about the situation where more than one estate agent or person acts as an agent. All agents marketing the property would have to have a pack. I hope that I have dealt with the points that were raised.

Don Foster (Liberal Democrat, Bath)

The Minister is being helpful, not least by putting his remarks clearly on the record. If he looks through the record, he will see that he has referred to relationships where the parties are known to each other, acquaintances and casual acquaintances. Will he state clearly whether a casual conversation with a person not previously known to the potential seller is covered by those remarks?

Chris Mullin (Labour, Sunderland South)

Yes, provided that it is an individual and not a group of people.

The hon. Member for Eastbourne asked whether we would introduce regulations to define friend or family member. No, we will not. Clause 1(6) defines that the property is marketed when it is:

communicated ... to the public or to a section of the public.

We believe that that is adequate for the purpose.

I believe that I have addressed the points made by the hon. Members for Bath and for Eastbourne. The situation is clear enough and was covered the other day when we debated clause 1. Therefore, I ask the hon. Member for Bath to withdraw the amendment.

Don Foster (Liberal Democrat, Bath)

I repeat my thanks to the Minister for his helpful comments. Our deliberations during the Committee's second sitting were predominantly about whether a seller's pack would be required during the sale itself, in a sale between the seller and an acquaintance or a friend. As we understand it, an individual not previously known to the seller would not be excluded, and in those circumstances a seller's pack would be required. I hope that it is clear that there is a difference between the two points.

If I wished to pursue the point further, I would raise the case of serial meetings with individuals and whether they are included in the prohibition in relation to groups of people. However, I suspect that that will become clear later.

In light of the Minister's helpful comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Roger Gale (Conservative, North Thanet)

Unless any hon. Member has a burning issue that arises from clause 2, I am minded to—

Geoffrey Clifton-Brown (Conservative, Cotswold)

I am sorry to be a nuisance, but I do not believe that the Minister adequately answered my point. People often decide to put a property on the market and instruct an estate agent who then begins the marketing process. Another agent sees that marketing, says, ``Ah yes, I have a client who is looking for precisely that type of property'', and introduces his client to the other estate agent or the vendor. Surely the agent who has made the introduction but who has had nothing to do with marketing the property is not required to have a seller's pack available, as well as the original agent who received the instruction.

Roger Gale (Conservative, North Thanet)

The hon. Gentleman has been in the House for long enough to know that if he wants to make an additional point, he should rise before the amendment is withdrawn. I am prepared to allow the debate to continue on this occasion, because I may be partly responsible for the confusion. However, the Committee is now out of order, so I will move that clause 2 stand part and take the hon. Gentleman's comments as part of the debate.

Question proposed, That the clause stand part of the Bill.

Chris Mullin (Labour, Sunderland South)

If there is more than one agent, whatever the relationship between those agents, each will have to have a seller's pack.

I should like to answer a question put to me by the hon. Member for Bath, which I did not address in my earlier remarks. He asked whether the seller had to have more than one copy of the seller's pack if he marketed it to more than one person. No, the seller needs to have only one copy in his possession, so there is a bonus for the hon. Gentleman.

Don Foster (Liberal Democrat, Bath)

It always helps to put these things on the record. I understand the need for the seller to have one pack on his person. However, what will happen if he has met one individual and given him the pack? Will he be obliged to have another pack available for anyone else he might talk to?

Chris Mullin (Labour, Sunderland South)

If the seller is marketing it to someone else, in due course he will have to provide another copy. However, he only needs to have one with him when talking to an individual, not a big pile. He can show it to the prospective purchaser, take it back, make a copy, or do what he likes. If he is marketing the property within the terms of clause 1(6), he must show a seller's pack to everyone to whom he is marketing. If he is marketing the property to several people, each of them will need to see one.

Don Foster (Liberal Democrat, Bath)

My point may seem trivial, but clause 3(2) states:

The responsible person shall have in his possession, at all times during that period, a seller's pack for the property.

I put it to the Minister that, having just handed over a seller's pack, the person whom he has described will no longer have on his person a copy of the seller's pack. I suspect that the answer lies in the definition of ``have in his possession''. Perhaps when we reach clause 3, the Minister may think it appropriate to raise these points.

Chris Mullin (Labour, Sunderland South)

The seller has 14 days to provide any copy. I suspect that he could use a photocopier should the need arise.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clause 3 - Duties of responsible person where a property is on the market

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 35, in page 2, line 42, leave out

`shall have in his possession, at all times during that period'

and insert

`upon reasonable demand shall make available'.

Roger Gale (Conservative, North Thanet)

With this we may discuss the following amendments: No. 38, in page 3, line 6, leave out `as it stands'.

No. 39, in page 3, line 8, leave out `at that time'.

Nigel Waterson (Conservative, Eastbourne)

By good fortune, we move straight to the point that the hon. Member for Bath has been champing at the bit to debate. There are three amendments. Subject to your discretion, Mr. Gale, Conservative members intend to deal with them in a narrow fashion because there are issues that we wish to raise in the stand part debate. We have not had a stand part debate, apart from the accidental one that just occurred. I hope that you will weigh that in the balance when the time comes.

Roger Gale (Conservative, North Thanet)

That is perfectly in order.

Nigel Waterson (Conservative, Eastbourne)

Amendment No. 35 replaces the requirement for the seller to have the pack in his possession at all times with what we think is a much more sensible provision, namely to make it available upon reasonable demand. Otherwise, the responsible person—usually the estate agent, but possibly the seller himself—would have to take his seller's pack into this fictitious pub, no doubt on the corner of Acacia avenue, which is becoming rather overcrowded. No rational person would dream of visiting it for a quiet, relaxed drink because of the frenzied buying and selling of properties. Do Ministers really suggest that the seller should have the pack, which will become ever more voluminous with all the stuff that they insist on putting in by law, in his possession or about his person at all times during that period? Should the seller have the pack by his bedside table at night on the off chance that what I termed the conveyancing gestapo might ask to see it during one of its regular trawls through the pub?

It is ridiculous that the seller should have to have the pack with him at all times. It is sloppy drafting and I want to know what the Minister thinks. I cannot, for the life of me, see any objection to our amendment, which is a sensible departure from the text of the Bill.

Amendments Nos. 38 and 39, which delete the words ``as it stands'' and ``at that time'' respectively are probing amendments. They are both curious groups of words that leap off the page. The responsible person's obligation to provide a potential buyer with the pack is fine as far as it goes, but why ``as it stands'' and ``at that time''? The Minister needs to tell us more of what he envisages. Presumably, the words mean that the seller's pack will not be a static document but will be changed and updated as time goes on. If that is the case, and I assume that it is because the Minister is nodding, it opens up a series of possibilities that number among our objections to the Government's proposals.

We made the point—as did professional bodies and organisations—until we were all blue in the face, that the concept of seller's packs is not objectionable. A lot of people provide them already, but we do not think that they should have the force of law. We also debated new properties, and developers putting together seller's packs. It makes sense for those who want a rapid sale to put together some of the basic documents that they know they will be asked for anyway, sooner rather than later.

The practical difficulties arise with the local search—we will say more on that later—and the home condition report. Both documents have a definite shelf life. The local search might have a life of about three months. If applicants were particularly unlucky, the local search in the seller's pack could be rendered out of date if, shortly afterwards, a massive new development were approved by the local planning committee. That information would be found in subsequent searches.

Perhaps more importantly, there is the home condition report. It is far from being a full structural survey, but it is something, Ministers presume, on which most buyers will place great reliance in making such large purchases. However, the report will become out of date, for many reasons. A very hot summer can produce problems with subsidence; a wet spell can also cause trouble. Some areas, and not only those that recently experienced major flooding, have had problems with the rise in the water table and old springs coming to life, sometimes after centuries. Properties that were perfectly sound four or five months ago might present problems, if surveyed now, to a potential buyer. Those are some of the reasons why seller's packs are a neat concept on paper but are far removed from the real world.

We share the view of various professional bodies that we should exclude at least those two items; we will debate that in detail. The drafting of the clause implies that the Minister accepts that seller's packs will be amended and updated, which is fine in the practical world. Are Ministers not persuaded that, in the real world, seller's packs will not be as beneficial as the Government think and not worth the extra time, effort and expense involved? The last two amendments are probing ones and I am keen to hear what the Minister—or any other member of the Committee—has to say.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I welcome you to the Chair, Mr. Gale.

I support the Conservative amendments. In relation to amendment No. 35, I was going to spin a detailed story about a sole estate agent on holiday abroad who goes to the beach, where he meets the trading standards officer to whom reference has been made, who recognises the local estate agent, approaches him and asks to see all the seller's packs for the properties currently advertised in that agent's window. I will not elaborate on the story because the Minister has said that although agents will be required to have a seller's pack in their possession at all times, they will have 14 days in which to deliver it. However, those two requirements seem contradictory. How can an agent be required to have a seller's pack in his or her possession at all times while having 14 days in which to provide a copy? I hope that the Minister will be able to explain what appear to be two highly contradictory requirements placed on agents.

Turning to amendment No. 38, of course it is important to discourage sellers from delaying a sale by embarking on a series of possibly spurious searches or inquiries that might delay the handing over of a seller's pack. However, what if the seller is a pillar of the community—a Member of Parliament, doctor, accountant, or even an estate agent—who becomes aware that a significant change is about to occur in the local area, such as the local authority having granted permission for one of the many new incinerators that are to be built to be located close to the property that is being sold? I am sure that that person would want to reflect the changes in the seller's pack, so that the buyers would not come knocking on the door in a few months' time or get in touch with the local press about the dud that had been sold to them.

There will be circumstances in which the people providing the seller's pack will want to be able to update it, which would be to the benefit of the person purchasing the property. Will the Minister make clear whether that will be allowed or whether the seller's pack must be handed over as it stands, irrespective of changes such as work of a major structural nature having been carried out to enhance the property,? I hope that it is not the case that the pack cannot be changed.

Nick Raynsford (Labour, Greenwich and Woolwich)

To help the Committee, I shall start by explaining the structure of the clause, particularly the two separate obligations correctly identified by the hon. Member for Carshalton and Wallington (Mr. Brake) which are laid on the person or persons responsible for marketing the property. They are necessary and complementary, not contradictory, as he implied. I hope that when he understands the logic behind the clause, he will accept that.

The first of the obligations, set out in clause 3(2), is that the person responsible for marketing the property should have a seller's pack in his or her possession at all times when the property is on the market. The second obligation, set out in clause 3(3), is to make available to a potential buyer, on request, and subject to a payment of any reasonable fee required to cover the cost, a copy of the seller's pack or any document from the pack.

Clause 3(5) allows up to 14 days to comply with the second obligation. That is necessary to allow reasonable time for a copy to be obtained, or for the photocopying operation to be undertaken if necessary—that answers the question that the hon. Member for Bath asked my hon. Friend the Under-Secretary—and to allow for sickness and holidays. A sole estate agent who went on holiday would put his business at risk if he did not make arrangements to cope with customers' requirement during that period. One assumes that a sole estate agent would not desert the office for a period of greater than 14 days, as he would endanger his business as well as risk not complying with the requirement.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Will a sole estate agent be required to arrange for someone to be present on his premises at all times who will have access to the seller's pack if a request is made for one?

Nick Raynsford (Labour, Greenwich and Woolwich)

No. Let me distinguish between the two separate obligations. A sole agent will be obliged to ensure that he can meet the requirement to provide a copy of the pack within 14 days. He will be subject to the obligation to have in his possession—I will come on to the definition of that in a moment—a copy of it at all times.

Geoffrey Clifton-Brown (Conservative, Cotswold)

I have a simple question. Will the Minister make clear whether 14 days means 14 working days, or does the period include bank and public holidays?

Nick Raynsford (Labour, Greenwich and Woolwich)

It means 14 days.

Geoffrey Clifton-Brown (Conservative, Cotswold)

So it does include bank and public holidays?

Nick Raynsford (Labour, Greenwich and Woolwich)

Yes, there are no excluded days.

Perhaps the best way to explain the need to require a responsible person to have the seller's pack in his possession is to describe the sort of loophole that would arise if the first of the two obligations did not apply. Let us assume that a property in Penzance is put on the market by a responsible person living in London. That can and does happen, say, if the seller is selling the home of a deceased relative or an agent is acting in respect of a property located some distance from his office. If there were no requirement to have a seller's pack in his possession, a responsible person, in the strict clause 2 sense, might be tempted to begin marketing without a pack, in the knowledge that if anyone asked for a copy he would have 14 days to put one together and could not be easily approached because the property was a long way away from the agent's office. We want to avoid such a loophole.

The objective is to ensure that the seller's pack is compiled and is therefore available when the property is being marketed. That is the reason for requiring the responsible person to have a copy of the pack in his possession. The ancillary reason relates to enforcement, to which we shall return later. A trading standards officer can check that the requirement is being complied with simply by visiting the agent and asking for a copy of the seller's pack. Without that obligation, it might be difficult to establish that there has been a breach of the legislation. The aim is to ensure that the obligations in the legislation are met. I shall come on shortly to possible misinterpretation of the requirement to have a pack in one's possession at all times, which I know has aroused concern.

Nigel Waterson (Conservative, Eastbourne)

Before the Minister leaves that point, given that an estate agent can take a full 14 days to produce the seller's pack, with the result that that a potential buyer can be deprived of it for 14 days in any event, why does it add anything to have the separate obligation he describes?

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman cannot have heard what I was saying in response to the earlier intervention. That will enable the trading standards officer to call on the agent's premises and ask for a copy of the seller's pack, which should be available because the property is being put on the market. It is simply a reinforcing measure, designed to ensure that the Bill's provisions are put into effect.

David Curry (Conservative, Skipton and Ripon)

Let us pursue the Minister's analogy. Let us say that in a couple of months' time, the electorate make a horrible mistake and I have to sell my constituency house in North Yorkshire. In the light of the Minister's improbable scenario, I may decide to entrust it to an estate agent and put it on the market in Kennington. Why should that be a better option than putting it on the market in Ripon? Is the Minister seriously suggesting that the trading standards officer of Lambeth council is going to investigate whether a seller's pack is available in an estate agent's office in Kennington for the sale of a small cottage in North Yorkshire? That seems implausible. If a potential purchaser asks for the details but the agent does not have the seller's pack, is he going to head off to Lambeth town hall to complain to a trading standards officer? It is a belt-and-braces approach, but it is not very practical.

Nick Raynsford (Labour, Greenwich and Woolwich)

I hope that I can satisfy the right hon. Gentleman by explaining how profoundly practical it is. The provision is designed to cover circumstances in which evasion might otherwise be covered up. I suspect that his feared scenario may well be forthcoming after the next general election, although I hope that the right hon. Gentleman, whom I have known for many years and for whom I have considerable respect, does not himself have to face the scenario he describes. However, if he did, he might find it easier to put his Ripon property in the hands of a national estate agent whose offices are in London.

David Curry (Conservative, Skipton and Ripon)

Or countrywide.

Nick Raynsford (Labour, Greenwich and Woolwich)

I shall not pursue the analogy any further. In those circumstances, it might be difficult for the potential buyer of the Ripon property—which might be desirable, despite its former use—to obtain the necessary documentation that the seller's pack would provide. I accept that that will not happen in the vast majority of cases, but it will in some, so safeguards should be in place. The key safeguard is that an aggrieved person can ascertain whether the law has been complied with simply by visiting the agent responsible for the marketing to establish whether a seller's pack is available. If not, the law has not been complied with.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Will the hon. Gentleman give way?

Nick Raynsford (Labour, Greenwich and Woolwich)

In a moment.

All sorts of interesting defences based on speculation and the theoretical mislocation of the seller's pack could be resorted to, which is why the person responsible for the marketing must have a copy of the seller's pack in his or her possession at all times.

Mr. Curry rose—

Nick Raynsford (Labour, Greenwich and Woolwich)

I will give way to the hon. Member for Carshalton and Wallington, but I shall give way first to the right hon. Gentleman who wants to follow up his previous point.

David Curry (Conservative, Skipton and Ripon)

To return to the trading standards officer, under best value regimes through which the effectiveness of local authority services are tested, should trading standards officers be proactive and therefore descend from time to time on estate agents to verify whether the seller's packs are in place, or should they act only in response to complaints?

Nick Raynsford (Labour, Greenwich and Woolwich)

Trading standards officers will act in accordance with the concordat that governs their general operations. They will tend to act on complaints, except when they have reason to believe that one particular person is breaking the law, in which case they may decide to visit. I would expect a reasonable trading standards officer not to behave in the wholly fanciful way suggested by the hon. Member for Eastbourne—arriving in jackboots to investigate whether seller's packs are available. A good officer would respond to complaints: if a complaint were received that a property had been put on the market without a seller's pack, the officer would call on the agent to find out. If a series of complaints were received that a particular agent was not complying with the law, the officer may well choose to make an unannounced visit to ascertain whether properties being advertised by that agent had seller's packs. That is how I assume trading standards officers are likely to behave.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I apologise for returning to the same point; perhaps it is because of our late nights. The Minister referred to the aggrieved person who might request the seller's pack. Let us return to the beach scenario and say that the estate agent takes a three-week, not a two-week, holiday. To judge from what the Minister said, a sole estate agent will be required to arrange for someone to be present in his office so that when the aggrieved person or the trading standards officer turns up asking to see the seller's pack, someone will be there to receive him and to produce the documents. The defence that the estate agent is on holiday will not be good enough. I thought that the Minister said that it would not be a requirement for a sole estate agent to have someone on the premises; in fact, on the contrary, that will be a requirement, so that, when the trading standards officer turns up on the first day of the estate agent's holiday in Benidorm, the person present can give the seller's pack to the aggrieved party.

Roger Gale (Conservative, North Thanet)

Order. The interventions are becoming shaggy dog stories. Interventions must not be speeches.

Nick Raynsford (Labour, Greenwich and Woolwich)

I fear that the hon. Gentleman does not have a deep understanding of the way in which businesses operate if he thinks that an estate agent, a sole practitioner, can go on holiday for three weeks without making provision for his office to be staffed during that time. If such a person does not make such an arrangement, he is unlikely to have a business when he comes back.

The obligation is on the agent to have a copy of the seller's pack in his possession and to respond to a request for that pack within 14 days. If he were to be abroad for some time, to satisfy the second obligation he would have someone able to deal with the business in his absence, which is a normal, common-sense business arrangement. The proposal will not require a person to be on his premises with a copy of the seller's pack at midnight on Sunday evening. That would be taking the matter too far.

The formulation proposed in the amendment—an obligation to make the pack available on reasonable demand—is another way of closing that loophole. We considered that solution but, on balance, concluded that requiring a responsible person to have a copy of the pack in his possession was a more appropriate option. Having gone to the trouble and expense of compiling a seller's pack, it is reasonable to assume—without making it a legal requirement enforced by the criminal law—that a responsible person would make the pack available for inspection by a potential buyer. That is why we did not follow the route suggested in the amendment; our alternative is a more satisfactory way of achieving our aim. I do not denigrate the Opposition's reasonable approach, but hope that they accept that there are good reasons for preferring our option.

We are considering the wording of clause 3(2), as

in his possession, at all times

could be interpreted as the agent having to carry a pack with him wherever he goes. That is not our intention. We will introduce an amendment at a later stage to clarify the position. The matter is complex, as we do not want to open another loophole; equally, however, we do not want people to be subject to an unreasonable misinterpretation. I hope that the hon. Gentleman will accept that as an indication of our good intention to achieve the purpose without opening another loophole.

David Curry (Conservative, Skipton and Ripon)

What else could the phrase mean but that the pack must be in the estate agent's possession wherever he goes?

Nick Raynsford (Labour, Greenwich and Woolwich)

There is concern that it could be interpreted in a slightly fanciful way.

David Curry (Conservative, Skipton and Ripon)

Could it be otherwise interpreted?

Nick Raynsford (Labour, Greenwich and Woolwich)

The common-sense interpretation is that if, for example, the right hon. Gentleman were to leave the Committee Room for a temporary break to have a cup of coffee, he would not be required to take the seller's pack with him to comply with the requirement.

The right hon. Gentleman will understand, because he was a Minister and he knows the problems, that there could be an over-detailed interpretation of the proposal. For that reason I have undertaken to reconsider the issue. We shall, if it is necessary, table an appropriate amendment at a later stage.

Under clause 3(3), (4) and (5), a responsible person will be under an obligation to provide a copy of the seller's pack or an extract from it within 14 days of a request being made by a potential buyer on payment of any fee required to cover reasonable costs. Failure to comply with that obligation will be an offence. Clause 3(3) makes an allowance that the copy that is required to be provided is to be of the seller's pack or of the requested extract from it as it stands when the request is made. The hon. Member for Eastbourne asked what that meant. The allowance, which the amendments would remove, is most important to ensure that the obligation does not impose an undue and unreasonable burden.

As I said, we envisage that the contents of a seller's pack might change over time. Under clause 7(8)(a) the Secretary of State may provide in regulations for the time at which any document is to be included in the seller's pack. We have in mind to use that power to allow properties to be marketed with an incomplete seller's pack when, through no fault of the seller or the seller's agent, a prescribed document or information is not available or cannot be supplied within a reasonable period. It would be unreasonable to prevent the property being marketed when, for technical reasons, one document was not available; some flexibility is necessary. In such cases, the missing item or items must be indicated in the seller's pack and inserted when and if they become available. The contents of the pack could also change if the seller chose to update certain information.

The hon. Member for Eastbourne, who raised the matter, may suggest a lurid interpretation of the cost involved, but in the most likely instance—a search—we hope that the introduction of the national land information system will make it possible to find out almost immediately whether there has been any change. It would be a simple, straightforward and cheap way of obtaining that information, thus obviating the need for an update—provided, of course, that the reply is that there has been no change. That is why it is appropriate to consider updating; it is not an open door to large, additional costs.

Tim Loughton (Conservative, East Worthing and Shoreham)

I understood the clause as drafted to refer to the documents available in the pack. The Minister said that the Secretary of State may specify documents that may not need to be included at that stage; presumably, that does not include important documents such as the survey. The Minister of State used the phrase ``when and if'' those documents become available. Will he qualify the ``if''? Let us take the damp-proofing guarantees, for example, which are just the sort of documents he refers to. At what stage will it be deemed inappropriate to search for or to provide a replacement for a missing certificate?

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman makes a fair and reasonable point, of which the damp-proofing certificate is a classic example. There is an obligation for documentation such as guarantees to be assembled, provided that the seller has that documentation available. As the hon. Gentleman knows, a guarantee may have been issued a long time ago and lost. The seller may believe that the document will be found and put a note in the pack stating that it will be provided when it turns up, but he may fail to find it. A guarantee of that nature will not be fundamental, because it is an ancillary element; the lack of such a document would enable the buyer to decide whether the price to be offered should be reduced for that reason, but it would not make the pack fundamentally deficient. The hon. Gentleman suggests that the house condition report is fundamental, and that the absence of a document would mean that a satisfactory pack could not be assembled, but it is in the nature of documents such as guarantees that they may not be found. That is why the word ``if'' is used, although it is in the seller's interest to provide those documents as soon as possible.

Tim Loughton (Conservative, East Worthing and Shoreham)

I am grateful for the Minister's explanation. Let us suppose that it is specified in the pack that the seller is likely to or will provide some guarantees, including one on damp-proofing, but the guarantees do not turn up by the time contracts are exchanged or the sale completed and do not subsequently turn up, even though the vendor has given the impression that they exist and that documentation could be provided. What legal rights has the purchaser? He has completed the transaction, but has not been able to take possession of the additional guarantees that he was led to believe would be forthcoming in the seller's pack. What specific redress does he have? The price has been settled, so no reduction can be negotiated.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman makes a fair point, but he is pushing a little too far. As I said, the purchaser could judge what price to offer if the documentation does not become available. Any solicitor advising such a purchaser would advise him to be wary of promises regarding documentation that has not materialised. If the solicitor acts properly and professionally, he will advise the purchaser to take a view on what discount might be made in the offer price in the light of the absence of the documentation. Of course, the caveat emptor principle still exists: the buyer would have taken the decision knowing full well that the documentation was not available, even though it had been promised. The buyer would be taking that risk—but at least he will in a position to know that the documentation is absent. That is one of the advantages of our provisions stating that the pack must mark the absence of documentation that it should otherwise contain. The buyer will act having reasonable knowledge about the absence of information, and will be able to form a judgment based on it.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Does the Minister intend to state what documents will be absolutely necessary in the seller's pack? I am worried that technical reasons might be used to excuse the presence of any number of documents including, for instance, a home condition survey.

Nick Raynsford (Labour, Greenwich and Woolwich)

I ask the hon. Gentleman to be patient. The contents of the seller's pack are the subject of regulations to be made under a later clause, so we will have a full debate on them. I would not want to incur your wrath, Mr. Gale, by moving too far ahead of our logical procedures. I undertake to return to the subject when we reach the relevant point.

Don Foster (Liberal Democrat, Bath)

In the event that the sale is protracted, common sense and the Minister's comments make it clear that there will be opportunities for the seller's pack to be updated to contain new additional information. Will the vendor be required to notify those who received earlier versions of the seller's pack that amendments and updates to it have been made, or does the Minister think—I would be tempted to share the view—that it would simply be a matter of good practice on the part of the vendor to do so?

Nick Raynsford (Labour, Greenwich and Woolwich)

It certainly would be a matter of good practice. I can envisage circumstances, such as if the property had been on the market for a long time, in which the agent would simply not have a means of contacting people who had expressed an interest but not left forwarding addresses. It would be difficult to impose an absolute obligation, but informing people where possible would be good practice.

Under amendments Nos. 38 and 39, if the contents of the pack changed between a copy of the pack being requested and being provided, the responsible person would be obliged to provide a copy of the revised pack—and all within the 14-day deadline; the pack could change on day 13, for example. If a copy of the new or revised document could not be obtained and provided within 14 days of the original request, the responsible person would have committed an offence. To put people in a position in which they could be in breach of the law in such circumstances would be wholly inappropriate and unreasonable. In such circumstances, the responsible person will be expected to make every effort to ensure that the copy documents are fully up to date, but that should not be made a formal obligation subject to criminal sanctions.

In view of what I have said about the circumstances in which we intend to allow properties to be marketed with an incomplete seller's pack, I hope that hon. Members will consider not moving amendment No. 29 when the Committee turns its attention to clause 7, when, as I told the hon. Member for Eastbourne, we shall return to the subject in detail. For now, I hope that the hon. Member for Eastbourne will withdraw amendment No. 35.

Nigel Waterson (Conservative, Eastbourne)

I am grateful to the Minister for that long and fairly complex series of explanations. I shall seek the leave of the Committee to withdraw the amendments, but first I reiterate that if the official Opposition are unable to talk the Government out of the lunacy of making it subject to law, we should not heap too many obligations on people who are going about their ordinary business—even hapless estate agents in Benidorm. A great deal more work needs to be done on the possession point.

I hope that the Minister will not think me churlish, given that he has undertaken to reconsider subsection (2). On first reading, the phrase

in his possession, at all times

leaps off the page. I am surprised that it passed quality control checks in Whitehall. It certainly should be reconsidered. Presumably, a vast body of law, including drugs legislation, states what does and does not constitute possession. The Minister would be well advised to get away from that, or at least to table an amendment on similar lines to ours. I have a hunch—I could be wrong—that a Government amendment will emerge sooner or later that is not dissimilar to amendment No. 35. The Minister has been good enough to say that he will reconsider the matter, and we are pleased about that.

Amendments Nos. 38 and 39 have done their job as probing amendments in that they have brought out the inherent absurdities of the legislation. The Minister tried to shrug it off, but dating the seller's pack and so on will only add to the cost—in some cases, unnecessarily. The Minister had no choice but to accept the fact that not only will the packs need to be updated, but that some documents will not become available in good time—some, as my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) pointed out, may not become available at all. I do not remember ever buying a property when the damp-proofing guarantee was produced on time—indeed, sometimes it could not be found. It is a mystery why anyone should bother issuing them.

Cracks are beginning to appear in the Bill. It is envisaged not only that people will have to scrabble around putting the seller's pack together, but that they will not always be able to put it all together because papers, some of them important, will be missing. For instance, the home condition report may not be available at the start because the seller wants to use the services of a particular surveyor—perhaps one he has used before—who turns out to be on holiday. It is a serious matter because, in many cases, the seller's pack may not be complete.

However, we shall return to those points at some point. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nick Raynsford (Labour, Greenwich and Woolwich)

I beg to move amendment No. 61, in page 3, line 27, at end insert—

`(7A) Subsection (7) does not apply to anything provided at the request of a potential buyer under subsection (3)'.

We come to the first of the Government amendments. As the hon. Member for Eastbourne was somewhat churlish in the opening moments of this sitting by suggesting that it was unreasonable of us to table the amendments, I remind him that, on Tuesday morning, he said:

Every Bill involves consequential and drafting amendments that are tabled by the Government, and we have no difficulty about that.—[Official Report, Standing Committee D, 16 January 2001; c. 6.]

I assure him that amendment No. 61 is a consequential and technical amendment that removes unnecessary duplication. It is the first of a small number of Government amendments; they are all technical, and they do not reflect any change in policy or substance.

In case the Committee would like further enlightenment about amendment No. 61, I shall explain that clause 3(7) seeks to ensure that if a person supplies something purporting to be a copy of the seller's pack to a potential buyer, the documents supplied are accurate copies. The duty imposed by the subsection also applies regardless as to whether the potential buyer asks for them or not. Clause 3(3) already provides for those duties in cases in which copies of documents are requested by potential buyers. The amendment therefore removes a provision that is an unnecessary duplication. I hope that all hon. Members will recognise that the amendment is helpful and simplifies the Bill.

Nigel Waterson (Conservative, Eastbourne)

I have never claimed to be the sharpest tool in the box, but I did have difficulties with the amendment. I am relieved to see that I am not the only one. The note supplied to me by the Law Society begins

God knows what they are trying to do with this one.

So I am not alone in finding the amendment opaque. However, out of my abiding respect for the Minister, going back many years, I shall accept his assurance—simply because I still do not understand what the amendment is supposed to do. With respect, perhaps if the Minister had spoken more slowly, it would have made a difference. I do not understand his explanation. Let the record show that I am entirely relying on the Minister's seller's pack, as it were. I reserve the right to sue him, or at least return to the issue, if it turns out that my confidence was misplaced.

Don Foster (Liberal Democrat, Bath)

I endorse every single word uttered by the hon. Member for Eastbourne with one notable exception, which is founded on the fact that there appears to be a secret deal between the Law Society and the hon. Gentleman, since I have not received a copy of the brief he mentions. Questions will be asked. As for the amendment, despite the Minister's explanation and having looked at the amendment again, I still do not understand it and will therefore have to take it on trust, in the same way as the hon. Member for Eastbourne has.

Amendment agreed to.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 1, in page 3, line 28, leave out subsection (8).

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take amendment No. 2, in clause 4, page 4, line 12, leave out subsection (5)

Nigel Waterson (Conservative, Eastbourne)

In stark contrast to the previous amendment, amendments Nos. 1 and 2 are important. Amendment No. 1 seeks to remove clause 3(8). We shall return to the detail of enforcement and penalties later, but the subsection seeks to make it clear that a person to whom the clause applies—someone under an obligation as a responsible person to have a seller's pack in his possession—shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale if he fails to meet that obligation.

Before we go any further, it might be instructive to look at level 5. I have not practised as a criminal lawyer in recent years but, other offences punishable with the same level of fines include those under the Restriction of Offensive Weapons Act 1959 covering the manufacture, sale, lending or giving of a flick knife. It strikes me as bizarre that we are talking about a maximum penalty similar to that which applies to the manufacture or possession of a flick knife. I vaguely recall that that legislation was enacted in response to an epidemic of people carrying and using flick knifes. I do not think that the Minister, even at the height of his hyperbole, would suggest that we might face a similar breakdown in law and order in the conveyancing world, requiring that kind of draconian punishment.

We strongly oppose the imposition of criminal sanctions for breaches of the legislation. I start from my usual position, which is that we do not believe that any of the provisions should have the force of law. Sensible people will use a version of the seller's pack in certain circumstances, and if that is what they want to do, that is fine. We believe in the principle of caveat emptor. We would also strenuously argue that where ordinary people are going about their ordinary business and seeking to enter into free contractual relations, that is really a matter for the law of contract.

One of the proposals that we might discuss later was raised by the hon. Member for Upminster (Mr. Darvill) on Second Reading. He clearly has a great deal of knowledge and experience of the subject, which is no doubt why he is not a member of this Committee. He made the point that another possible enforcement mechanism might be that one cannot register a property one has bought unless one has complied with the provisions of the legislation. That has a neatness about it that might appeal to rational Ministers. It is comparable to the state rather neatly ensuring that people pay their stamp duty by requiring that they cannot register their property unless they have done so.

That is a neat way of dealing with a problem of enforcement, which does not involve the great panoply of criminal sanctions, or the forces of the trading standards officers. It would appear that those officers are not only to be required to bring prosecutions when complaints are made—presumably by disgruntled, would-be buyers—but will have a more proactive role in trawling through public houses and elsewhere to ensure that people are not subverting the provisions of the Bill, as well as making spot checks at the offices of estate agents to ensure that they have the seller's packs.

Don Foster (Liberal Democrat, Bath)

In view of the hon. Gentleman's remarks about what will have to happen to the work of the local trading standards officers, has he reflected further on the Minister's statement to the Committee that the average cost of the whole exercise to a given local authority is likely to be £5,000 a year?

Nigel Waterson (Conservative, Eastbourne)

I share the hon. Gentleman's scepticism of that figure. It sounds like a suspiciously round figure. The amount will vary enormously. There will be some councils in low-demand, low-value areas—of which we will hear more—where there will be hardly any extra expenditure because hardly any buying and selling will be going on, and not many people will be prepared to invest in a seller's pack just to see if their property has any value. However, there will be other places, such as Westminster, where there will be a tremendous cost because there is a vigorous and active property market at the worst of times—the same would be true of Lambeth, for example. The Minister's figure is not helpful or defensible, and it does not represent the disproportionate costs for different local authorities around the country.

We, and bodies such as the Law Society, consider it abhorrent that ordinary, law-abiding people—particularly people who are not acting through agents, but are trying to sell their own properties—might be made criminals through no fault of their own. We have had endless debates about the fine distinctions that may have to be made in regulations concerning informal discussions, dealings with individuals and so on. It is no good the Ministers airily waving their arms around and saying, ``Nobody would bring a prosecution in such a circumstance, nobody would pursue that, and, if someone nipped out for a cup of coffee that would not amount to not having been in possession of a seller's pack.'' Those are not matters for the Committee, and they are certainly not matters for Ministers. Such matters will be adjudicated on in the first instance by the trading standards officers, who are hard-pressed, in short supply and have many other duties to perform. They will subsequently be adjudicated on by a court of law.

Why should a person be made a criminal for trying to sell his own house? Is there any other country in the developed world where one could be made a criminal for such a reason? We have heard a lot about Denmark and New South Wales, and it would be interesting to hear what sanctions, if any, operate there or in other jurisdictions where there is an equivalent to seller's packs. The creation of criminal offences is disproportionate to the circumstances that need to be dealt with. No Governments, whatever their colour, should create new criminal offences unless there is an overwhelming case for doing so.

I rely also on a point that has been made before—it has almost been mentioned enough for us to give it a letter, so we can refer to it simply as argument Z—that if seller's packs are so much to be commended and will make such a difference, people will adopt them out of enlightened self-interest. Buying and selling property is a private contractual matter between willing buyers and sellers, who reach a price and agree the terms through their lawyers, for the disposal of a piece of property. It has nothing to do with the state—particularly the nanny state.

Amendment No. 2 would delete the criminal offence of not handing a pack to a would-be buyer, subject to certain defences, under clause 4. We consider the criminal sanction an inappropriate reaction to such a breach. How could the seller be sure that a person was a potential buyer? Some strange defences arise, which I shall not deal with now, but judgment and the view that a person takes at the time must come into the matter. Criminal sanctions are disproportionate to the problem that the Bill is intended to tackle. The proposal for such sanctions in the Bill is perhaps the greatest of our concerns.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I support the amendments. If the seller's packs will be as useful and in as much demand as we are told, they will sell themselves and become common in the industry. They will become best practice, so I do not understand the need for fines.

It appears that the Government intend to introduce a list of exceptions. They have already suggested that, for technical reasons, it will be acceptable for certain parts of the seller's packs to be unavailable. By making their use mandatory but allowing technical exceptions they are opening many avenues for challenge. Perhaps doing away with fines and introducing seller's packs on a voluntary basis might simplify matters with respect to the possibility of legal challenge.

Finally, will the Minister would clarify the upper limit of a level 5 fine?

Geoffrey Clifton-Brown (Conservative, Cotswold)

I support the argument of my hon. Friend the Member for Eastbourne, who succinctly described the worst aspect of the Bill. We have already heard numerous scenarios that suggest that the Bill will be difficult to implement. I understand that the measure is intended to speed up property transactions, but the more burdensome the requirements of the seller's pack become, the slower the transaction is likely to be. It will take longer to prepare the pack and for purchasers' solicitors to check it.

Another consideration is that, the more burdensome the seller's pack, the more cursory will be the information. Estate agents and others involved will ask, ``What is it that we've got to provide solely to comply with the Act?'' A seller's pack that gives an accurate and complete picture is needed, because that is what purchasers and their solicitors want when they buy a property. However, if the obligation is too burdensome and criminal sanctions are involved, those involved—human beings being what they are—will naturally provide minimal and cursory information. I say that the spirit of offering helpful advice to Ministers in their consideration of what to include in regulations.

There is a worrying trend in this country toward making criminal sanctions available to additional groups of public servants. There must be something wrong with a country that does that. After all, we are talking not just about the fine levied at the time: when a person contravenes the regulations, not only will he have to pay the fine, but he will receive a criminal record. The knock-on effect on a person and his family can be huge, resulting in people being unable to get credit or suffering various other problems. We should use regulations that involve criminal sanctions very sparingly. A matter that essentially involves civil contractual law should not in any way be extended into criminal sanctions. To do that would be wholly reprehensible.

Another aspect relates to trading standards officers. They receive good and extensive training in how to deal with many matters, but they are not trained to be specialists in property transactions. When they see a complicated extract of title, how will they know whether a full and complete extract has been supplied? They will have to undergo new training. Then, there will be huge arguments about whether a seller has provided full and complete information. Litigation will follow and there will be court cases about whether the trading standards officer considers that the estate agent has provided the full information to comply with the law.

I hope that the Minister will reconsider the matter. A fine at level 5 is £5,000—a substantial sum. Through our constituency cases, we all know that some officials are more zealous than others. I can fully envisage circumstances in which over-zealous trading standards officers, perhaps because they have a grudge against an estate agent, make that agent's life very difficult. As I said, the imposition of criminal sanctions would be wrong. My hon. Friend the Member for Eastbourne has suggested a neat alternative mechanism, whereby a person could not register a property until he had paid a penalty, which is similar to the arrangements regarding stamp duty. Such penalties would essentially be civil fines, which would be a much better way of imposing sanctions under the Bill.

I do not think that I will be the last person to raise the issue of criminal sanctions. Eminent lawyers in the other place will shred this part of the Bill when they get hold of it. If the Minister does not respond satisfactorily today, people in the other place will want answers.

Nick Raynsford (Labour, Greenwich and Woolwich)

I am happy to rise to that challenge. Let me put this important issue in context. As the prelude to reform, we conducted the most extensive research ever into the home buying and selling process in this country. The results of that research and the following consultation exercise show that the proposed changes are warmly supported not only by the public, who will benefit, but by many professionals, who see enormous advantages in having information up front, at the start of the process.

Our proposals are the result not of theoretical analysis but of very detailed research, followed by a pilot study and accompanied by detailed discussions with many people. The public are fed up with the present system, which is slow, inefficient and extremely expensive. Although the costs may seem to be low, as the hon. Member for Eastbourne said in a previous sitting, about £350 million—a huge sum—is incurred by the failure of 28 per cent. of transactions between acceptance of an offer and the point at which contracts are normally exchanged. That is a scandal that the public want to eliminate. They want a more efficient system and that is what we seek to deliver.

Despite all the support from the public—I have no doubt that the packs will be popular—their benefits will not become universally available unless they are made mandatory. Even if the overwhelming majority, say 95 per cent., of the public adhered to the system, there would always be freeloaders who wanted to enjoy the benefit of a seller's pack when buying a property, but did not offer one for the property that they are selling. Not only is that cheating, but it puts the whole process at risk. It requires only one sale not to have the benefit of a pack for problems to emerge when a buyer conducts surveys and searches; the whole chain, involving many people, can be disrupted. The failure of one individual to participate in the process can have knock-on consequences for many others. I fully understand the argument of the hon. Member for Carshalton and Wallington that if the packs are so popular they should sell themselves, but it requires only one person cheating the system for personal benefit to wreck not only one transaction, but many.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Is it not ultimately the decision of the person in the chain who decides to proceed whether or not the person from whom he or she is buying has a seller's pack?

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman has not understood my point. It is precisely where an individual decision to allow progression to take place without a seller's pack that all the problems inherent in the current system are likely to re-emerge. Unless buyers were very foolish they would, on the advice of their lawyers, undertake searches that might reveal something problematic, thereby possibly initiating the process with which we are all so familiar of the price being renegotiated, a row developing and the sale collapsing—affecting not just that sale but all the others in the chain. To use the analogy of motor insurance, while the vast majority of responsible, sensible people want to arrange such insurance, some freeloaders try to evade it. That is why we have a sanction against people driving a car without being insured. Seller's packs are an exactly parallel case.

The amendments would remove the sanctions that we have put in place, leaving civil proceedings as the only means of redress for a person who suffers as a result of a failure to comply with the seller's pack obligations. We looked closely at civil sanctions as one of the enforcement options discussed in our consultation paper, but concluded that they could not offer effective safeguards. They would depend on a buyer suing the person who had marketed the property without a seller's pack, and to require buyers to incur the costs and effort of initiating such action would impose an unreasonable burden on them. In most cases, they simply would not bother, so there would be no effective sanction against someone who was systematically breaking the law. While I understand the readiness of the hon. Member for Eastbourne to reach for a writ at the first opportunity—I refer to his comments on the previous amendment—the vast majority of members of the public would not feel similarly inclined. The inevitable result would be that the law fell into disrepute through lack of enforcement.

Criminal sanctions would not have to rely on action by the buyer, as local trading standards officers could initiate enforcement action. As I made clear to the right hon. Member for Skipton and Ripon (Mr. Curry), their response would depend on the circumstances, and they would have a large measure of discretion. Our view that criminal sanctions are the right way to ensure compliance is supported by the Consumers Association and the National Association of Estate Agents. The NAEA's members will be most affected by and are most likely to be prosecuted under these arrangements, so their support is a telling recognition of the need for our approach, as the system would otherwise fall into disrepute and would not work.

Don Foster (Liberal Democrat, Bath)

I am listening with great care to the Minister. I shall reflect long and hard on his argument. He has implied that the only alternative to criminal sanctions is civil proceedings and he has pointed out the difficulties associated with that. Other hon. Members, including some of his hon. Friends, have proposed alternatives to civil proceedings. Will he explain why they would not work?

Nick Raynsford (Labour, Greenwich and Woolwich)

I am glad that the hon. Gentleman has raised that because it was the hon. Member for Eastbourne who mentioned the speech by my hon. Friend the Member for Upminster on Second Reading in which he sketched out an alternative approach. I invited my hon. Friend to the Department last week and we had a lengthy, constructive and detailed discussion about a number of the issues, including alternative sanctions. I pointed out to him that there were defects in his proposals, such that they would work in most cases but not in every case. Individuals might not be able to satisfy the requirements of the Land Registry, which would result in a delay. The whole process be put at risk because people could not depend on the validity of the documentation. That is the crucial point.

As I made clear in my response to the hon. Member for Carshalton and Wallington, once there are people who are not participating or cases in which it is not possible to ensure compliance, the whole system begins to break down and the effect across a whole chain has far-reaching consequences. That is why we want a simple, standard procedure that applies across the board with an understood and straightforward enforcement mechanism.

Several hon. Members rose—

Nick Raynsford (Labour, Greenwich and Woolwich)

I see three hon. Members wishing to speak. I give way first to the hon. Member for Eastbourne.

Nigel Waterson (Conservative, Eastbourne)

Will the Minister deal specifically with the suggestion that has been made by the hon. Member for Upminster and others that there should simply be a bar on registry? I do not quite understand the practical difficulty with that. I use the analogy of stamp duty. I do not expect the Minister to deal with the matter on the hoof—he may want to write to the Committee about it. Secondly, although the matter is not strictly for the Minister, given the experience and expertise that his hon. Member for Upminster could bring to these matters, why is he not a member of the Committee?

Nick Raynsford (Labour, Greenwich and Woolwich)

The selection of hon. Members to serve on the Committee has nothing to do with me. I have already made it quite clear that I responded quickly to the points raised by my hon. Friend the Member for Upminster; I met him and discussed his concerns in detail. I have been willing to talk to other hon. Members outside the Committee because I believe that that is the right way to handle those matters. We are genuinely looking for the best way forward and we have considered alternatives. I made it clear earlier that we had considered civil sanctions as one possible mechanism, but that we had come to the conclusion that that was not the best way forward.

The fear that criminal sanctions are being applied inappropriately and that they are completely out of proportion does not stand up if one looks at the issue carefully. There are a large number of precedents for the application of the criminal law to enforce civil obligations. Let us take a few housing examples: the Landlord and Tenant Act 1985—an Act for which the previous Government were responsible, though it had earlier precedents—sets out obligations to provide a rent book, to provide information in a rent book and to provide information to leaseholders about service charges; those are all civil duties, but they are enforceable under the criminal law. The obligation to provide information to a prospective buyer does not seem very different.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee D

Homes Bill

Andrew Love (Labour/Co-operative, Edmonton)

On a point of order, Mr. Gale. I seek your guidance. First I declare an interest as one of the co-chairs of the all-party group on homelessness. I do so on behalf of the approximately 250 Members of Parliament who are members of that group. We have so far reached clause 3 and I understand the natural enthusiasm, if not exuberance, of other members of the Committee to explore all the nooks and crannies of the legislation. A motion passed by the House suggests that we must conclude the Bill by the beginning of February and that it should be taken in two equal halves. With the progress we have made to date, I fear that that the Committee cannot properly scrutinise and hold the Minister to account on part II. Can you reassure me about that?

Nigel Waterson (Conservative, Eastbourne)

Further to that point of order, Mr. Gale.

Roger Gale (Conservative, North Thanet)

Let me deal with the first point of order. If the hon. Member for Eastbourne (Mr. Waterson) still wishes to raise an issue after that, he may do so.

First, the programme resolution is in accordance with a motion that was passed by the House a few weeks ago. Secondly, while I appreciate that the hon. Member for Edmonton (Mr. Love) was not present at the sitting of the Programming Sub-Committee on Monday—although he could have been present as an observer—an end date was agreed but there was no decision on internal dates or timings. The hon. Gentleman was probably in the Room when we discussed this on Tuesday. I have made my ruling on this abundantly plain. I am prepared to listen to representations from the usual channels with a view to reconvening the Programming Sub-Committee if that becomes necessary. So far, no such approaches have been made. No fixed points have been determined within the sitting period. The expectation has been, and this is common knowledge to all hon. Members, that the first part of the Bill will be concluded on Tuesday, but that is a matter to be determined by hon. Members, not the Chair.

Nigel Waterson (Conservative, Eastbourne)

Further to that point of order, Mr. Gale. I agree entirely with one point made by the hon. Member for Edmonton, not least as another member of the all-party group to which he referred. We believe that part II is also an important part of the Bill. The suggestion that the Bill should be completed in six sitting days has come from no other source but the Government, possibly with some agreement from the Liberal Democrats. We have consistently made a case for more time. We have put down markers that if there is significant slippage we could always return to the Programming Sub-Committee. There is no agreement, Mr. Gale and nor, to use your phrase, is there an expectation among Opposition Members. We think that part I is important too. If some hon. Members have signed up for this Committee with an interest in part II but little interest in part I, that is a matter for them. Millions of people are affected by part I—

Roger Gale (Conservative, North Thanet)

Order. The hon. Gentleman is supposedly raising a point of order with the Chair, not making a speech.

Nigel Waterson (Conservative, Eastbourne)

Those are the points that I wish to make. This is a complex Bill. Both parts are important and both deserve proper scrutiny. The solution is in the hands of the Government's business managers.

David Curry (Conservative, Skipton and Ripon)

Further to that point of order, Mr. Gale. I am the other co-chair of the homelessness group. I took the Housing Act 1996, which is amended by part II of the Bill, through the House. For the record, it has 233 sections, 19 and 19 schedules and at no stage was a guillotine ever suggested or imposed.

Roger Gale (Conservative, North Thanet)

First, the right hon. Gentleman has now pointed that out and it is on the record, but it is not a point of order for the chair. Secondly, I stand by the rulings I have given and the offer I have already made. I remain at the service of the Committee in general, and of the usual channels in particular, if they wish to discuss this with me further. Thirdly, I had better state clearly that, as is my custom when I the Chair, I have ensured that the debates so far have been entirely in order, and no one, so far as I am aware, has attempted to filibuster. Just in case anyone feels minded to do so, they should be aware that I would take a very dim view. Clause 3Duties of a responsible person where a property is on the market

Clause 3Duties of a responsible person where a property is on the market

Roger Gale (Conservative, North Thanet)

I remind the Committee that with this we are considering amendment No. 2, in clause 4, page 4, line 12, leave out subsection (5).

Nick Raynsford (Labour, Greenwich and Woolwich)

At our previous sitting I referred to the fact that on a number of other comparable issues involving housing law, criminal sanctions do apply as a means of enforcing what are, in effect, civil duties. I was referring to the Landlord and Tenant Act 1954, where obligations to provide rent books and to provide information about service charges to leaseholders are important and are, essentially, civil duties that are backed by criminal sanctions when there is a failure to comply. In those circumstances, it seems entirely appropriate to adopt a similar approach in this legislation. Another important reason for doing so is that the duties of estate agents under this legislation are, in many ways, complementary to the obligations under the Property Misdescriptions Act 1991. The hon. Member for Cotswold (Mr. Clifton-Brown), who seemed to be pre-occupied by this matter earlier, should be reminded that that Act, which imposed criminal sanctions with unlimited fines, was passed by the Government he supported.

Hon. Members also raised the interesting question of what happens overseas. New South Wales was the first area to pursue the idea of a seller's pack. It felt it necessary to provide for sanctions in the event of a failure to comply. My understanding is that any seller in New South Wales found guilty of concealing or falsifying any information required to be disclosed shall be liable, at the discretion of the supreme court, to suffer such punishment by fine or imprisonment for any time not exceeding two years, with our without hard labour, or both, as the court awards. I am only astonished at our own moderation.

Nigel Waterson (Conservative, Eastbourne)

I shall resist the temptation to talk about the possibility of transportation back to England. The legislation to which the Minister referred talks about concealing or falsifying. That is not what we are talking about. We are talking about when people do not have their tackle in order, as it were. Surely, such biblical penalties are not to be visited on people in those situations in New South Wales.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman will know how I intend to respond to that because, as I have pointed out several times, it is important that the response is proportionate. Clearly, we do not anticipate a draconian response to an individual who has, often entirely unknowingly, failed to provide a basic piece of information. However, where there is deliberate, wilful and persistent failure to comply with the law, it would be appropriate for that type of sanction to be pursued.

Nigel Waterson (Conservative, Eastbourne)

What the Minister has just said chimes in with something his hon. Friend the Under-Secretary, the law graduate, said the other day. In reality, this is a matter not for the Minister. It is for the trading standards officers and the courts to decide whether they will take a view on proportionality. That is why it is important that we get it right before it gets into their hands.

Nick Raynsford (Labour, Greenwich and Woolwich)

We agree entirely with the hon. Gentleman that the sanction must be proportionate. The trading standards officers will, of course, be working within the concordat that governs the way they operate. That is the right way to achieve the desired effect. We want to avoid unnecessary court proceedings and avoid unsuspecting home-owners being caught up in sanctions. The Bill confers the duty of enforcement on local trading standards officers, but those officers retain discretion as to what to do in performance of that duty. Local weights and measures authorities, like all prosecuting authorities, have considerable discretion as to how they operate. Their role involves providing help and advice. The commission of an offence does not automatically lead to a prosecution. Where the offence is sufficiently serious to warrant a fixed penalty notice, the service of such a notice does not bring about a criminal record.

The hon. Member for Bath (Mr. Foster) raised concerns regarding the cost of this activity for local authority trading standards. He will be pleased to know that, following the concerns he raised on Second Reading, we have taken further advice from the Local Authorities Co-ordinating Body on Food and Trading Standards—LACOTS. We are informed by LACOTS that it stands by its view that the activities involved are complementary to its existing duties in relation to the Property Misdescriptions Act 1991 and that, therefore, it envisages only a very notional additional expenditure—this is an average figure—of about £5,000 per authority. I can assure the hon. Gentleman that we have taken his comments seriously. If he chooses to check with LACOTS, I am sure it will give him the same advice.

Trading standard officers will have the discretion to vary their action with regard the circumstances of the case. For example, they will be able to provide help and advice where a person is genuinely unaware of the requirements. They will be able to give a warning, perhaps for a first or minor offence, and they will be able to offer a formal caution or serve a fixed penalty notice where the offence was deliberate and more serious, but even that will not attract a criminal record. In the most serious cases, where there has been deliberate and persistent flouting of the law, they could commence proceedings in the magistrates court.

I hope that, on reflection, hon. Members will recognise that the enforcement arrangements set out in the Bill are proportionate and do provide the appropriate way forward. I hope that the hon. Member for Eastbourne will withdraw his amendments.

Nigel Waterson (Conservative, Eastbourne)

I am grateful to the Minister, who has obviously done his homework since our previous sitting. We think that this involves the fundamental principle of whether the criminal law should be drawn into this. It is interesting to hear what punishments are available in New South Wales and to hear about other statutes in this country, but we hold the unshakeable view—and we are not alone—that these are matters of private contractual relations between three individuals where the nanny state should not intervene. With all due respect to the Minister, we are minded to press this to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 7.

Bob Ainsworth (Labour, Coventry North East)

On a point of order, Mr. Gale. May I ask you to check that vote again?

Roger Gale (Conservative, North Thanet)

In fact, the Ayes were 4 and the Noes were 7.

Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I indicated earlier that, with your agreement, Mr. Gale, I wanted to initiate a short debate on clause 3. I want to make four points as expeditiously as I can.

We have already debated the issue of the responsible person having to have the pack

in his possession, at all times.

We think that that is an incredibly difficult piece of draftsmanship. I have reiterated the reasons for that more than once. The Minister has said that he will look at it again, and it would be helpful if he could give us the occasional bulletin on his progress.

Clause 3 (3) deals with the changes in the seller's pack. It is now common ground between the two sides of the Committee that the seller's pack could change with the passage of time. It is now conceded that, in the real world, seller's packs will not always be completely ready at the beginning of the marketing of a property. We think that that underlines the artificiality of these proposals in terms of the effect they will have on the market. People will produce seller's packs of their own with some basic documents, regardless of whether there is legislation. We think that there are real concerns about seller's packs not being ready. As my hon. Friend for East Worthing and Shoreham (Mr. Loughton) pointed out this morning, some pieces of paper remain elusive throughout any transaction.

We have just covered the issue of criminal sanctions and enforcement. I urge the Minister to have another meeting with his hon. Friend and Member for Upminster (Mr. Darvill). The hon. Member for Upminster, the phantom at the feast, is not a member of the Committee, but he made some detailed, constructive and critical comments on Second Reading. Having been a Whip myself, I can understand that that would not immediately suggest that he should be a member of the standing committee. There is a story of a former Tory Whip who, many years ago, decided not to put one of his colleagues on a Committee because he saw him leaving the Library, and, worse than that, he was clutching a hardback book. That was said to be his offence.

Andrew Love (Labour/Co-operative, Edmonton)

It was only for show.

Nigel Waterson (Conservative, Eastbourne)

I think it was ``Black Beauty'' or something like that. That was the reason he was given for not being on the Committee. I see that struck a chord with the Government Whip.

On a serious note, it is excellent that, in parallel with this Committee, the Minister is having meetings with the hon. Member for Upminster. It would have been interesting for us all to benefit from his detailed views.

Don Foster (Liberal Democrat, Bath)

Perhaps I can save time by asking whether the hon. Gentleman agrees that it might be helpful if the Minister were to prepare a briefing note on the arguments that have been made for the various alternatives by his hon. Friend the Member for Upminster and others, and the Government's reasons for rejecting them. That would aid the continuing debate and put some of these issues on the record. I hope that he might agree that it would be worth seeking the Minister's support for that proposal.

Nigel Waterson (Conservative, Eastbourne)

That is an excellent suggestion from the hon. Member for Bath—I suppose, on the law of averages, it had to happen sooner or later.

This is a serious point. It is clear that the hon. Member for Upminster has a wealth of experience and knowledge on these matters. We know of at least one specific proposal, to which I referred earlier, which involves a system of registration instead of having the great mass of criminal sanctions and enforcement and having to rely on the hard-pressed trading standards officers. We could use the same mechanism as that used to ensure that stamp duty is paid. I do not believe that there is any evasion of stamp duty for that very reason. The hon. Member for Upminster and others, who did not make it onto the Committee, may have proposed other mechanisms and had other excellent ideas. Apparently, many hon. Members are keen to get on to part II; the hon. Member for Upminster would have been keen to debate part I properly. That is a shame, but it is not a matter for me. Even if we cannot have note of the meeting with the hon. Member for Upminster, it would be helpful for the Minister to give us some outline of what was discussed. The practical difficulties of that proposal are being floated not just by me or the hon. Member for Upminster but, by one of the relevant organisations in one of the briefings we have received. There may be good practical reasons why the proposal would not work, but if the shadow of the hon. Member for Upminster is hovering over our deliberations in that regard, it might be helpful to lay the ghost to rest.

My next point is what I refer to in my notes as the Madonna point. I remember reading some time ago that when the pop star Madonna—I think that it was her—was selling an expensive property in central London, the agent involved was charging people about £2,000 for the particulars of the property and to see around it. That is obviously a rare example, but it is not uncommon for a charge to be imposed for very upmarket properties whose owners, not unreasonably, do not want the world and his wife trooping around just to have a look. That is what happens on the last day of the boat show, which fills up with people who do not have the slightest intention of ever buying a boat.

That leads me to ``reasonable cost''. I could have tabled a probing amendment to remove those words. What is a reasonable cost? Will agents involved in such upmarket transactions be able to charge a high amount for the seller's pack? As I understand the clause, they are allowed to insist on payment in advance, and do not have to produce the pack—even if they have to have it about their person 24 hours a day—until the money has been paid up front. That is a serious issue. Who is to define ``reasonable''? Many lawyers have waxed wealthy and successfully on defining that word in legislation and I do not want this Bill to be another instance of that.

Geoffrey Clifton-Brown (Conservative, Cotswold)

I shall be brief because we want to make progress. I would like to put on record my conversation with the Minister after this morning's sitting. Trading standards officers often act in a supporting role in a civil prosecution. For example, if someone goes into a shop and buys faulty goods, contravening the Sales of Goods Act 1979, the purchaser may complain to the trading standards officer that he has in some way been disadvantaged by the transaction. The trading standards officer will then investigate. He will not prosecute, but he will be prepared to produce an expert report to enable civil litigation to take place.

There is no good reason why that should not be the procedure in the Bill. The trading standards officer would investigate whether there had been breaches of the legislation and, if there had, he would report to the Stamp Office or the Land Registry that an offence had been committed, automatically triggering an excess penalty. That would be a civil matter that would be simple to undertake and would not delay the property transaction. The solicitors involved would simply be informed that the legislation had been breached but that it had been remedied and the correct information supplied.

The possibility would remain of a penalty being applied, but the transaction could still go through. The argument could then take place as to whether there had been a breach of the law. The Minister said that that procedure would cause property transactions to be slowed, but I do not believe that. I believe that if criminal sanctions are to be applied, property transactions will be slowed in any case.

I know that the Minister does not agree, but I want to put my view on the record. If criminal sanctions are to be applied in the event of a breach of the terms of this Bill, something serious must have occurred—there must be a serious defect in the seller's pack. If that is the case, I doubt that any solicitor would advise a purchaser to go ahead with the transaction until the litigation had been resolved. A criminal sanction would delay the transaction far more than the simple civil procedure than I propose. I want to get that on the record, Mr. Gale. I know the Minister does not agree—he is shaking his head—but at least others will now be able to see what I have said.

Nick Raynsford (Labour, Greenwich and Woolwich)

The debate has seen five main issues raised and one suggestion made by the hon. Member for Bath. I will try and deal with them in turn.

The first point made by the hon. Member for Eastbourne (Mr. Waterson) was an expression of concern about the provision that requires the seller or the seller's agent to have a seller's pack in his possession at all times. During debate on a previous amendment, I gave an undertaking that the Government would think further on the matter, as it was not our intention to create an unworkable requirement that might be interpreted over-zealously. I hope the hon. Gentleman will accept that is a genuine commitment. It is difficult to avoid amending the provision in a way that does not create a huge loophole, but I am hopeful that the great legal minds that advise us on legislation will come up with an appropriate solution that enables us to avoid that loophole while making the changes he wants.

The hon. Gentleman's second concern focused on circumstances in which it might not be possible to get all the documents together. In my view, the Bill represents a sensible and practical response to such circumstances. The normal requirement is that the seller's pack should be assembled in full and marketing can then begin. However, for cases in which, for good reasons, certain documents cannot be secured in a timely fashion and the whole process would be unreasonably delayed thereby, we have provided that seller's pack can be issued with the missing items indicated in the pack and provided as soon as they become available.

We had an interesting and useful debate about the kind of documents that would be involved—the warranties and guarantees that owners recall having secured some time ago, but are found to have mysteriously disappeared when the time comes to trawl through the chest of drawers. That is a common occurrence and it is reasonable to make provision for such items not to be provided in the initial seller's pack, but to be provided at a later stage. That is entirely pragmatic and I do not accept the suggestion the provision is an indication that the system will not work properly.

Nigel Waterson (Conservative, Eastbourne)

It might be a philosophical point, but in respect of items flagged as not being included in the initial seller's pack, the Minister appears to be falling back on the principle of caveat emptor, in the sense that the buyer will be on notice that there might or might not be a problem and can act accordingly. However, the whole thrust of the Bill is to undermine caveat emptor, although it does not say that. Would he like to comment on that?

Nick Raynsford (Labour, Greenwich and Woolwich)

I have already made it clear that the principle of caveat emptor remains. The important point is that the buyer is properly alerted at an early stage to issues that might be a cause of concern. In practice, warranties and guarantees—as I am sure the hon. Member for Eastbourne recognises—are often out of date and inappropriate and so do not matter a great deal, but they might in some cases, so the buyer should have the information. I repeat, the principle of caveat emptor remains and our proposals mean that the buyer will receive more information up front on which to judge whether or not it is appropriate to purchase the property and, if so, what is a reasonable price to offer.

The third point that the hon. Gentleman relates to criminal sanctions. He referred to my hon. Friend the Member for Upminster, who as I said this morning made a very useful contribution to the debate on Second Reading. I invited my hon. Friend to the Department last week to discuss his concerns and we had a useful discussion in which I pointed out to him that there were difficulties with his proposals. In practice, they would not achieve our objective of a system that works expeditiously and in which sanctions are clear and can be applied without causing the buyer unreasonable difficulty or expense, or requiring effort to enforce the procedure through civil sanctions. Although my hon. Friend's proposal is ingenious, it would not provide that effective sanction, because it would bite only at the end of the process. In such cases, the seller will generally not be the least bit interested if the sale has fallen through, so I am not convinced that my hon. Friend's proposal would be an effective sanction against a seller.

The hon. Member for Bath asked me to set out the reasons for opting for criminal sanctions rather than the alternatives. I spent quite a lot of time this morning trying to do so—that is the purpose of Committee—and I responded specifically to the issues raised. I will respond in public in the same way as I responded in private this morning to the hon. Member for Cotswold. I hope that the hon. Member for Bath will accept that I have no wish to conceal anything and that I am happy to be open with the Committee. However, rather than put my officials to considerable trouble by requiring them to write down again what I have already said to the Committee, I ask the hon. Gentleman to bring to my attention now any doubts that he has about the arguments that I have advanced and I will try to respond.

Don Foster (Liberal Democrat, Bath)

The Minister asks me to bring to his attention matters about which I know nothing. He made it clear that the Department had seriously considered whether to go for a criminal offence and that many other options that had been proposed. The point I made through the hon. Member for Eastbourne was that to date not all those options had been explored in the Minister's remarks in Committee or elsewhere in public. I should be grateful to be told about those suggestions and the reasons why they were rejected. I cannot give the Minister examples, because I do not know what the suggestions were.

Nick Raynsford (Labour, Greenwich and Woolwich)

I am tempted to say, as my hon. Friend the Under-Secretary said to me sotto voce when the hon. Member for Bath said that he knew nothing about the subject, ``That has never stopped him speaking about it in the past,'' but that would be unkind. I have heard the hon. Gentleman's request and I shall try to ensure that he receives a succinct summary. He will have to accept that it will not be comprehensive and the gold-plated, Rolls-Royce version that we normally try to produce in such circumstances, because we must focus on moving forward, rather than look backward.

Fourthly, the hon. Member for Eastbourne advanced the Madonna argument—moving us into even more interesting territory. In a nutshell, the argument rests on the contention that a seller may have good reason to want to restrict access. A celebrity might be selling a house that is notorious or attractive to large numbers of fans. Such circumstances may constitute a perfectly good reason for wanting to restrict access. The hon. Gentleman asked whether the price charged for the seller's pack would be a way to achieve that. To some extent, it might be, because the seller's pack produced for the extremely expensive property that he describes is likely to be rather larger and contain more documents than the pack for an average house. However, the policy objective should not be achieved in that way.

If the hon. Gentleman looks ahead to clause 6(3)(c), he will see that we have made provision for the agent not to provide a seller's pack to categories of people whom the seller is unlikely to favour. That is a very difficult issue, and I hesitate to bring it up as it raises hard questions of compatibility with anti-discrimination legislation. At this point, suffice it to say that we have thought very carefully and we are completely satisfied that the provision allows a seller to indicate, for good reason, that certain categories of people should not be offered a seller's pack. That is entirely compatible with and in no way breaches anti-discrimination legislation, which will continue to apply and will bind the estate agent throughout these proceedings. We believe that the provision is the effective way to achieve our aim. I hesitate to get into this debate now, as we will come to it later, but I can see the hon. Gentleman wishes to intervene—

Mr. Waterson rose—

Roger Gale (Conservative, North Thanet)

Order. No. I am sure the Ministers' remarks are helpful at this stage, but we will leave the matter there for now and deal with it when we debate clause 6.

Nigel Waterson (Conservative, Eastbourne)

I hope you will allow me to intervene on a more germane point, Mr. Gale. I acknowledge that we shall return to the issue later and probably discuss it at some length, so let us not deal with it now. The Minister has been helpful in explaining that link, but my real concern relates to use of the word ``reasonable''. Leaving aside matters relating other clauses, is the situation that we are discussing covered by that word?

Nick Raynsford (Labour, Greenwich and Woolwich)

The normal construction of the word ``reasonable'' is ``reasonable in relation to the expenditure that has been incurred'' which is why I made the point that because an elaborate and glossy brochure produced to promote the virtues of Madonnaville, or whatever the particular building is called, might be an expensive item, it would be reasonable to charge quite highly for it. However, I did say that I do not regard that as the most effective way to achieve a policy objective, so I hope that we shall return to the subject later.

Finally, the hon. Member for Cotswold raised a point that he discussed with me after this morning's sitting regarding the possibility of seeking a declaration from a trading standards officer in which the officer states his belief that an offence has been committed. That could then be presented to the solicitor acting for the buyer, which would be likely to have an effect of warning the buyer about such circumstances. As I pointed out to the hon. Gentleman, the difficulty with that approach is that a trading standards officer who could be sued for indicating incorrectly the likelihood of an offence having been committed would be highly unlikely to issue such a statement without very careful and thorough appraisal, which could take a considerable period of time.

It is not uncommon for anything relating to a sensitive issue that is put into the public arena by the Government—any Government—to be checked thoroughly by lawyers. I would imagine that a statement of such a nature coming from a trading standards officer would be crawled all over by local authority lawyers, and probably outside advisers as well, before it was put into the public arena, just because of the risk of legal challenge. I do not accept the hon. Gentleman's argument that that could be done expeditiously.

Such a sanction would in any case be post hoc. That is the difficulty with the proposals made by hon. Friend the Member for Upminster. It would not have the effect of providing a clear indication that would act as a deterrent to malpractice, which is the purpose of having sanctions to enforce measures of this nature. If an offence had been committed in the situation that the hon. Gentleman describes, by the time the conclusion of such a tortuous process had been reached, either the sale would have proceeded because the buyer had ignored it, or it would be history because the buyer's solicitor had advised strongly against proceeding in such circumstances. I honestly do not accept the hon. Gentleman's argument.

Geoffrey Clifton-Brown (Conservative, Cotswold)

The Minister may not accept my argument, but his precise arguments apply with a vengeance to the whole issue of criminal sanctions and issuing a prosecution notice, which will be scrutinised in even greater depth.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman ignores my key point that I was making: the provision exists to be a deterrent. I have said repeatedly that would expect the more extreme sanction of prosecution to be used only in cases of persistent and wilful breach of the law—for example, if an agent has chosen deliberately on a number of occasions not to provide a seller's pack. In the case of an individual who has unknowingly failed to provide a seller's pack or has accidentally forgotten to put an item in the seller's pack, the most likely response of trading standards officers, if it were brought to their attention, would be to issue nothing more than advice or a warning. That seems to be compatible with the fast-track procedures that we want, while retaining the deterrent of knowing that an agent who wilfully and repeatedly breaks the law risks criminal prosecution.

Such an arrangement is compatible with the Property Misdescriptions Act 1991 and is comparable to procedures used in New South Wales. The hon. Member for Cotswold was not paying full attention earlier, so I remind him that, unlike the authorities in New South Wales, it is not our intention to add hard labour to the other penalties that would apply.

I hope that the Committee accepts that there are sound policy reasons for having an effective system that can be enforced to prevent widespread malpractice, that the penalties should be proportionate, and that the right mechanism to achieve that is to allow trading standards officers considerable discretion to make an appropriate response when they believe that the provisions have been breached. I invite the Committee to accept that clause 3 should stand part of the Bill.

Question put and agreed to.

Clause 3, as amended, ordered to stand part of the Bill.

Clause 4Other duties of person acting as estate agent

Chris Mullin (Labour, Sunderland South)

I beg to move Government amendment No. 54, in page 3, line 44, at beginning insert

`with a view to marketing the property,'.

I hope that the amendment will be uncontroversial. A person acting as an estate agent is required under clause 4 to have a seller's pack before he communicates the fact that a property is or may become available to any person in England and Wales. A strict interpretation of the clause might mean that estate agents who mentioned anything to employees, spouses, friends and so on would be committing an offence. Amendment No. 54 would trigger the seller's pack requirements only when the communications are part of a direct attempt to market the property in question. I ask the Committee to support the amendment.

Geoffrey Clifton-Brown (Conservative, Cotswold)

Before I respond to the Minister, may ask you, Mr. Gale, whether you are minded to have a clause stand part debate?

Roger Gale (Conservative, North Thanet)

It is difficult for me to determine that, because it depends how wide the discussion on the amendment ranges. The amendment is a narrow one and a narrow debate is likely to arise from it, so if the Committee wants a clause stand part debate, it can have one.

Geoffrey Clifton-Brown (Conservative, Cotswold)

I am grateful for your guidance, Mr. Gale.

The Conservatives welcome the amendment in so far as it goes. It begins—I emphasise the word—to clear up the confusion that might arise when an estate agent starts to market a property. The Minister provided a narrow definition in referring to when an agent communicates to his employees, spouses, friends and so on. As someone with direct experience of marketing properties, let me tell the Minister what often happens in practice. A person wishing to sell a house will invite one or more agents to discuss the proposition—a process that can take some time because fees, marketing and other matters have to be negotiated. Not until that process is concluded and the client has chosen which agent will market the property will any agent be in a position to proceed. During the phoney marketing phase or pre-marketing phase, an agent will need to discuss that property with other employees and members of his firm. That is only natural, but it is not to say that he would then start a marketing campaign. The Minister must state at exactly what point an estate agent is deemed to be marketing a property.

I want to return to a proposition that I put to the Minister this morning, as I have taken further advice and I believe that what he told me earlier may be wrong. It is about the circumstances in which a property is put on the market by an estate agent. Another agent, having seen the first agent's advertising and marketing says, ``I am retained by a client who is looking for precisely that type of property.'' He tells the other agent, ``I have a client who is interested in purchasing the property,'' or he may approach his client directly. The Minister told me this morning that in those circumstances, the introducing agent would be required to produce a seller's pack.

My advice is that that may not be correct. I should be grateful if the Minister confirmed his previous answer, because one or two experts on the matter believe that he may have been wrong. Depending on what the Minister says, my colleagues and I may or may not try to catch your eye in the stand part debate, Mr. Gale.

Chris Mullin (Labour, Sunderland South)

I shall take the hon. Member for Cotswold's second point first. I believe that what I told him this morning is correct, but I shall check it. If I learn anything to the contrary, I will let the hon. Gentleman know.

The hon. Gentleman talked about several agents being invited to tender for business and asked at what point they would be deemed to market a property. Clause 1(6) clarifies the position: marketing occurs when a property is

advertised or otherwise communicated...to the public or to a section of the public.

I shall not detain the Committee further on a matter that we have discussed exhaustively.

Amendment agreed to.

Clause 4, as amended, ordered to stand part of the Bill.

Clause 5Exceptions

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 3, in page 4, line 26, at end add

`save that this section shall not apply to residential properties owned by local authorities or registered social landlords.'.

The amendment is a probing one which would remove from the provision properties owned by local authorities or registered social landlords. It follows from a debate in which my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) raised the issue in the context of a sitting tenant and the sale of a council house. The amendment is designed to clarify the matter. The clause is drafted broadly on the basis of vacant possession being available.

Two examples were posited by my right hon. Friend, the first of which is that of a sitting tenant who has been living in the council house for, say, 20 years and who wants to buy it under right-to-buy legislation. Would that transaction require the full rigour of a seller's pack? The Minister's view was that even though the tenant had been living there for 20 years, the house might have all sorts of problems that had not been noticed, so a seller's pack was important. He said:

The local authority will provide the seller's pack as part of its response to the right-to-buy notice and the private landlord will be obliged to prepare a seller's pack.—[Official Report, Standing Committee D, 16 January 2001; c. 65.]

My right hon. Friend's second scenario was that of a person who had not himself lived in the property for 20 years, but whose family had lived there. Again, the Minister made it absolutely clear that local authority sales, whether or not a sitting tenant was involved, would still have to prepare a seller's pack in the usual way.

There are several issues extending beyond the amendment, which I may speak to as part of a short stand part debate. Amendment No. 3 is a rather blunt instrument, but it is only one of the avenues by which the legislation could be made to address the undoubted problem of low-demand, low-value areas. I do not know whether the Minister has had significant representations from large landlords of social housing in areas with very low demand where there is a desire to sell properties in due course, about whether the amendment might be one way in which to exempt properties in areas where the sheer cost of the seller's pack may deter people altogether from getting into a sale. That is a separate issue. The amendment itself is very much a probing amendment.

We certainly do not contend that, as a matter of principle, tenants of social housing should be excluded from the benefits of seller's packs—of course, we do not think that there are many benefits to be gained from a legally required seller's pack system, but I shall not weary the Committee by repeating the reasons for our view. None the less, I should be grateful for the Minister's comments.

David Curry (Conservative, Skipton and Ripon)

I assume that this is where the whole question of exemptions becomes central. My hon. Friend the Member for Eastbourne is right to table the amendment as a probing one. Since our debate the other day, I have reflected on the issue and I now think that there is a strong argument in favour of seller's packs being provided by local authorities. In an earlier sitting, the Minister raised the possibility of an exemption for properties valued at £10,000 or less. Some local authority properties will be sold under the right to buy for less than £10,000, although there may not be many such properties left, their tenants will probably be of long standing and improvements are unlikely to have been made recently to such properties. That last point substantiates my argument—after all, improvements made over the last 10 years are likely to be reflected in the price. However, I can see no argument why a local authority selling a house valued at less than £10,000 should be exempt from the need to provide the seller's pack.

There are large landlords: the authority in Birmingham has 93,000 social houses, and other big metropolitan authorities have between 30,000 and 40,000 houses. Even where that housing has been transferred, it has been to registered social landlords who are in the same moral position as a local authority. Therefore, I would like the Minister to make it clear that local authorities would be able to sell properties without a seller's pack, whatever the value. There is no reason why the city councils of Birmingham, Leeds or Newcastle should be exempt from that requirement.

There is a further danger inherent in numerical exemptions—that is, setting a threshold of £10,000, for example. I shall not refer again to Acacia avenue or the eponymous pub, but it is possible to conceive of a person deciding to sell a property for £9,750, because a price of £10,000 or £10,001 would incur a cost of £500 to produce a seller's pack. The individual therefore decides to sell the property for slightly less than £10,000 and split the difference, enabling him to put £250 into his back pocket and sell it formally under the £10,000 threshold. It is perfectly possible to envisage such a case.

In a funny way, this is a sort of arse-over-tit Bill. [Laughter.] I am sorry to use that expression. The discussion on Second Reading was about the necessity for exemptions at the bottom end of the price range. In practice, cases for exemption lie almost entirely at the top end of the range. Anyone willing to shell out £500,000 without ascertaining the information in the seller's pack must be out of their tiny minds.

At a much lower level, the Bill makes most sense as a regeneration measure. Houses at the bottom end of the scale are particularly in need of regeneration and require the security provided by the certificate of viability that the Bill would create. I hope that the Minister will be extraordinarily miserly in considering exemptions for that reason. People enter the market for the first time without experience of house purchasing, and they may need some sort of security.

My sentiments are that it would be much more sensible to exempt everything from council tax band D upwards. I would concentrate the Bill on areas in which it will contribute to regeneration of neighbourhoods and help to bring properties into use that might otherwise be regarded as hopeless cases. I hope that the Minister will concentrate hard on that particular aspect of the proposal, which may be the right thing to do, if for different reasons to those that he may originally have envisaged.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Member for Eastbourne rightly made the point that we had covered some of these issues on Tuesday, and the right hon. Member for Skipton and Ripon returned to a number of issues that he had previously raised. I thank the hon. Member for Eastbourne for his amendment, which has served a wider purpose than he probably anticipated when he tabled it.

I can assure the hon. Gentleman that the purpose for which he tabled it is not relevant. The amendment was prompted by concern that council tenants would be denied benefit because they were not buying vacant possession. In practice, when council tenants buy a property, they do so with vacant possession. They cease to be tenants and obtain vacant possession of the property. Therefore, if that was the concern that prompted his amendment, it is not material. The amendment is additionally not material because the position of council tenants is governed not by the Bill, but by the right-to-buy provisions, to which I shall turn shortly.

I am glad that the hon. Gentleman tabled the amendment, however, because it has highlighted that there could be a difficulty with some properties, as sometimes happens when people buy a house that has a separate flat in the basement with a sitting tenant. In such cases there could be definitional problems, and we intend to look further at that. I thank the hon. Gentleman for a useful contribution to the debate, even if not quite along the lines that he had originally intended.

As I made clear on Tuesday, the principles underlying the Bill should apply to local authorities and registered social landlords. I was delighted to hear from the right hon. Member for Skipton and Ripon that, on reflection, he recognises that that is appropriate. Where authorities and social landlords act as seller, marketing vacant stock, the Bill will apply to them. Where they are selling under the right to buy, slightly different circumstances apply. The local authority is already required under the right-to-buy legislation to give the tenant a description of any known structural defect affecting the dwelling and, for flats, any defect affecting the building in which the flat is situated. Existing legislation also requires information to be provided up front about the terms of the conveyance, any lease or service charges and any improvement contributions that may be required. Thus, local authorities are already under substantial obligations with regard to the provision of up-front information.

The pack of information required to be provided under the right to buy is governed by the Housing Act 1985. Our intention is that those arrangements should be made fully consistent with the principles underlying this Bill. We will consult closely with local government, the Housing Corporation and the National Housing Federation as we draw up the detail of the seller's pack. That consultation will enable us to clarify what legislative changes may be necessary for right-to-buy transactions. We do not know whether changes will be necessary and it is quite possible that no changes will be needed. However, any changes will be to the 1985 Act rather than the Bill. In the meantime, as I have already explained, it would be nonsense to exclude local authorities and RSLs from the ambit of the Bill when they put their properties on the market.

Turning again to the points made by the right hon. Member for Ripon and Skipton—sorry, I keep getting that wrong, but I shall not repeat his elegant phrase to describe my inability to get Skipton and Ripon in the right order, as it might not go down well in the Yorkshire dales. He asked whether, if there is an exemption for low-value properties—I stress that we do not say that there definitely will be an exemption—a council property subject to a large discount might come below the threshold, thus depriving the tenant of the seller's pack. As I stressed on Tuesday, the tenant might be the person most in need of the information. I am giving an instant response to him because this is an important point, but I will check it further. My understanding is that value is value before discount, and that the discount that would apply in respect of right to buy would not be material to a valuation. The fact that a tenant of long standing qualifies for a relatively large discount would not of itself bring a property down to below a threshold. I accept entirely that there is a problem where local authorities are subject to right-to-buy applications in very low-value areas. I should like to reflect further on whether, if an exemption figure applies, it should apply to local authority properties. I hope that that sets the right hon. Gentleman's mind at rest on the issue.

I stress once again that the figure of £10,000 that I mentioned on Tuesday was an illustration. I do not rule it out, but there is no intention at present to adopt a cut-off point at that or any other level. We are considering the issues carefully and we will consult with the full range of interested parties. I accept whole heartedly his concerns about the regenerative benefits of provisions that help people to acquire properties in low-value areas. We certainly would not want to damage that process.

Finally, on the right hon. Gentleman's point about people adjusting the price to come just below the cut-off point, that is one of the problems of having a cut-off point. We will need to consider that when we decide whether there should be an exemption and at what level it should be pitched. He is probably right that there is less need for a seller's pack for £1-million houses, as buyers of such properties can protect themselves perfectly well, but in practice it will happen in any case because someone buying such a property would expect to have a pretty clear indication of its quality before investing such a sum. The requirement to have a seller's pack will not impede transactions in that section of the market.

Geoffrey Clifton-Brown (Conservative, Cotswold)

When considering at what level to promote possible exemptions from the seller's pack, will the Minister bear in mind my point that exempting properties will in itself stigmatise them? The Minister has a problem both ways. The cost of the seller's pack obviously a large proportion of the cost of low-value properties, but at the same time exemption will stigmatise them.

Nick Raynsford (Labour, Greenwich and Woolwich)

Indeed. As the hon. Gentleman will recall, I pointed out on Second Reading that it is precisely those people buying properties with a relatively low intrinsic value who will benefit the most from a seller's pack. They might buy a property only for unexpected costs for repairing the roof or the structure of the building to wipe out its entire value. That was why I was extremely cautious in my response to pressure from my colleagues who were seeking an exemption. I made the point, which was also made very effectively by the right hon. Member for Skipton and Ripon, that we did not want to stigmatise people in low-value areas by such a procedure.

While I acknowledge the arguments regarding an exemption, we are not fully convinced that exemption is the right way forward. We are considering the point carefully and we shall consult on it because we do not want to inhibit sales, which might the effect of exemptions. On mature reflection, we shall draw conclusions as to whether an exemption would be appropriate and, if so, at what level it should be set.

David Curry (Conservative, Skipton and Ripon)

If the house condition survey discovered evidence of quite recent modernisation, improvements or alterations, and the seller were not able to produce a receipt from a recognised builder to prove that he had paid VAT, could any sanction follow on from production of a seller's pack? Could the seller be required to demonstrate that he paid VAT on the works?

Nick Raynsford (Labour, Greenwich and Woolwich)

I cannot envisage circumstances in which that information would be germane to the seller's pack. There are quite legitimate circumstances in which a single builder whose turnover is below the threshold would not legitimately require to charge VAT. Equally, as we know, cowboy builders offer to do work on the side without a bill and with payment made in cash with the clear purpose of evading VAT. It is to deal with precisely that problem that the Government have set out proposals for a quality mark scheme, which we are developing in trials in Birmingham and Somerset. In the context of the seller's pack, information would relate to the condition of the property, not to the person who carried out the works on it, and I do not think that the information to which the right hon. Gentleman refers would come to light in any way. I hope that I have put his mind at rest on that.

Before I conclude, I ask for guidance from the hon. Member for Bath regarding his colleague, the hon. Member for Carshalton and Wallington (Mr. Brake)—I probably got that constituency name the wrong way around, too; I have problems with double-barrelled constituencies. The hon. Gentleman revealed to the Committee on Tuesday that his wife was expecting a baby imminently. We have noted his absence this afternoon and if that is because he is attending the birth, we all want to send our quickest congratulations.

Don Foster (Liberal Democrat, Bath)

Given the date I mentioned, the Minister will be well aware that my hon. Friend's wife is now three days late. The event to which the Minister refers is imminent, but my hon. Friend sent his apologies today—I communicated them to the Chairman earlier—because he is speaking on a debate on the Environmental Audit Committee's report.

Nick Raynsford (Labour, Greenwich and Woolwich)

The Committee will wish to send its best wishes to Mrs. Brake. On that note, I urge the hon. Member for Eastbourne to withdraw his amendment.

Nigel Waterson (Conservative, Eastbourne)

We would associate ourselves with the Minister's concern: how things are going is a matter of constant worry to us. It may even be possible to adjourn to attend on the happy event. Perhaps, for once, the usual channels can sort that out.

I am always pleased when one of my amendments hits a target, even if it is not the target at which I originally aimed. I remember as a small boy playing a game called ``Destroyers'', with lots of little squares on the sheet of paper, in which hitting any target is something. In Opposition, one will take anything as a minor triumph. Of course we are happy, with the help of the Minister and the many new converts to the excellent Tory right-to-buy legislation, to bring about any improvement that we can to it, even if we do so unwittingly. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

The amendment having been fairly narrow, I wish to debate just two issues in the stand part debate. One is short and technical. The other is longer, and is basically a whinge. The first point, raised by the Law Society, was whether the Bill would apply where a property was bought with vacant possession but with the express purpose of letting to tenants. I assume that I have to qualify that question by saying that we are not talking about a right-to-buy case, for which, as the Minister explained, there is a different set of rules.

The whinge, which is slightly longer, relates to a point that I have made before and I raise it now rather than make a separate point of order. Clause 5 is the first of several—in company with clauses 7, 8 and 31—in which the Minister proposes to take powers to enable his right hon. Friend the Secretary of State to make regulations. On 10 January, I wrote to the Minister asking whether draft regulations would be available for the Committee stage. The Minister courteously responded on 15 January and sent copies, I think, to all members of the Committee. The letter was long and detailed and definitely courteous, but the basic answer was no.

A more outgoing letter followed on 16 January, enclosing a helpful note prepared by the Department about the ambit of the likely regulations. With respect, that note, while helpful, raises more questions than it answers. I will not list them in detail but, since the letter was despatched, we have discovered other bits and pieces that will need to be addressed. I think that the Minister conceded in one of our debates that the question of derelict properties might have to be considered in regulations. There is also the vexed question of friends and family and so on, which I gather is going to be dealt with.

Geoffrey Clifton-Brown (Conservative, Cotswold)

On a point of order, Mr. Gale. I return to the point of order that I made in a previous sitting. I have just seen the Minister's Parliamentary Private Secretary communicate with the lady in the red sequinned top. Your co-Chairman ruled strictly that that was out of order. I ask you again whether it is in order to communicate with that lady and whether it is in order for that lady to sit on the Press Bench.

Roger Gale (Conservative, North Thanet)

My co-Chairman has ruled on that. As I understand it, provided that the Press Bench is not occupied by members of the press, it may be occupied by others. I have since received remonstrations by some members of the press who regard that as a hard-fought-for privilege. While we do not propose to raise the matter, the Press Gallery may wish to raise it with the House authorities.

So far as communication is concerned, the point of order gives me an opportunity to go slightly wider than the hon. Gentleman's question. As you know, I have always deprecated private conversations or communication in Committee Rooms. There is plenty of space on the Green Benches outside. If people on the Front or Back Benches wish to have private conversations, then, out of courtesy to the Committee and the Chair, they should go outside to do so.

Nigel Waterson (Conservative, Eastbourne)

Thank you, Mr. Gale. I was in the middle of saying that issues have arisen since the letter I mentioned was written. I dare say that others will arise as debates develop and that those, too, will be encompassed in regulations. I appreciate that it is not always practically possible for Committees to have draft regulations beforehand, but sometimes it is. Clause 5 is a perfect illustration of the type of clause under which, should the Bill become law, substantial regulations will probably be made. We hope and expect that the points we raise will inform the drafting of regulations, but I can only reiterate that the Opposition, the Liberal Democrats and even Government Back Benchers are seriously hampered if the likely contents of regulations remain unseen by us.

All we can do, despite the general indication given to us of some of the matters to be covered in regulations, is hope and expect that the Minister and his officials will take some note of the points that we raise. They are not frivolous and are often practical, and they have been brought to our attention by professional bodies and others. That is my whinge.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Member for Eastbourne raised two issues. The first was a technical point about properties bought with vacant possession but with the express purpose of letting. Under the Bill, a property put on the market with vacant possession will be subject to a seller's pack, irrespective of the intended usage.

The hon. Gentleman's second point was about regulations. I repeat that we want to take full account of the views expressed in the House, in Committee and in another place. We want to ensure that any detail that cannot reasonably be put in the Bill now, but that will be necessary to guide the implementation of the scheme, will be embodied in regulations, which should be practical, effective and easy to interpret. We have already debated—on Tuesday and this morning—some of the borderline definitional issues that are difficult to interpret.

It is important to produce effective guidance on regulations, especially in respect of exemptions. We have not yet committed ourselves to exemptions and we are aware of the disadvantages. The hon. Member for Cotswold rightly pointed to the potential danger of stigmatising low-value properties through low-value exemptions. Equally, however, the absence of an exemption might inhibit the market is some low-value areas. As I said, we intend to pay attention to all the views expressed in Committee, in the House and in another place. We shall also work with professional bodies such as the National Association of Estate Agents and others, so that the regulations will be well informed and produce the requisite effect.

Geoffrey Clifton-Brown (Conservative, Cotswold)

The Under-Secretary has already explained that an introductory agent will have to produce a seller's pack. If one person is selling the house to another, unconnected person—not a friend or relative—and both parties use agents, would the vendor's agent have to produce a pack?

Nick Raynsford (Labour, Greenwich and Woolwich)

We are once again getting into complex and technical territory. It is important to deal with the complexities, which is precisely why we want further opportunity to reflect on them before making binding commitments. My hon. Friend the Under-Secretary has already said that he would reflect further to check that the answer he gave was correct.

Our concern is that anyone marketing a property—which may not be the case in the hon. Gentleman's example—must be subject to the seller's pack procedure. Although parts of the industry may deplore it, under some agreements several agencies are involved in the same sale. In those circumstances, it would be absurd if only one agent had to produce a pack and the others could sell without it. Agents involved in the marketing of properties will therefore be subject to the provisions.

In certain circumstances, marketing of a property may not be relevant—an agent could be putting two people together and acting on behalf of a potential buyer—and the pack provisions might not apply. In common with my hon. Friend the Under-Secretary, I want to reflect further and I undertake to write to the hon. Gentleman about the matter.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clause 6Defences

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 41, in page 4, line 30, leave out subsection (2).

Roger Gale (Conservative, North Thanet)

With this we may take the following amendments:

No. 4, in page 4, line 39, leave out subsection (3).

No. 18, in page 5, line 2, leave out from `property;' to end of line 4.

No. 42, in page 5, line 3, leave out paragraph (c) and insert—

`( ) was a person to whom the seller had indicated he was not prepared to sell the property.'.

Government amendment No. 55.

Nigel Waterson (Conservative, Eastbourne)

We now move on the curious clause entitled ``Defences'', which opens up a wealth of curious anomalies and contradictions. Amendment No. 41 is designed to eliminate the defence of a seller who believed that the person marketing the property had a seller's pack. This, too, is a probing amendment, but it raises some curious potential problems and anomalies. I am particularly indebted to the National Association of Estate Agents, which has flagged up its concerns.

The association posits a possible case in which the seller instructs an agent who tells him or her that making up the seller's pack will take a few days. Three or four days later, the seller could decide to advertise the property on the internet, or possibly even by going to the pub and standing on a bar stool. He does not bother to make up a seller's pack on the grounds that a few days have passed and it is reasonable to assume that the agent has put together a pack by then.

If the property is then sold privately—either on the internet or to a buddy at the pub—the fact that the agent will have had to take the time and trouble to put together a pack will provide a defence against criminal prosecution for the seller without providing any commensurate benefit for the agent. While making up the pack, the latter could not market the property and therefore, I assume, lost any hope of commission, whereas the vendor's apparently reasonable belief that the pack was then in existence enabled him or her to market the property privately without penalty. I would be interested to hear the Minister's response to that conundrum.

Amendment No. 4 would leave out subsection (3), which allows the defence of not giving the seller's pack to someone who does not appear likely to be a buyer or someone to whom the seller was likely to sell the property. From a legal point of view, it is almost impossible to envisage how anyone could fail to get in under that defence. A short while ago, we discussed the Madonna situation. I think that I am right in saying that the Minister said that subsection (3) would bite in that case, because a seller could take the view that they would not sell to certain types of people. The Minister rather delicately managed to avoid defining those people, but I assume that he meant poor people, who would not be covered by any anti-discrimination legislation.

We need to have a pretty general debate about the Minister's view of the position on anti-discrimination legislation. To take another extreme example, I assume that if someone decided that they would not sell to people of a particular colour, they would clearly be in breach of other legislation. However, the legislation before us would provide a defence. That is a curious situation, and if the Minister does not mind, I should like him to take us carefully through his reasoning. Hon. Members on both sides of the Committee would probably like to know the answer.

Our other objection to the provision is simply that it is very silly. Presumably, almost anyone could say after the event that he or she would not have sold to the jilted buyer, who is likely to be the person who belled the cat and informed on the seller to the trading standards people, thereby causing the prosecution. It would be easy to make a case—particularly if we are taking about criminal, not civil, burdens of proof—and to say as a defence, ``Oh well, I wouldn't have sold to that sort of person anyway.'' I would be interested to hear whether there is any legislation anywhere in this country with a similar provision and, if so, whether it works. I cannot imagine that there is. The thrust of the Liberal Democrat amendment, No. 18, is similar to ours.

Amendment No. 42 would take out paragraph (c) and insert

was a person to whom the seller had indicated he was not prepared to sell the property.

That would have the effect of replacing the present vague formulation—a person to whom the seller was unlikely to sell—with a requirement that the seller must have indicated that he would not sell to a particular person before the pack could be refused. I am trying to help the Government, not to mention trading standards officers across the country. If anyone is ever going to mount a case under those criminal sanctions, our proposal would give them a much less steep mountain to climb than that created by the legislation drafted in the Minister's Department.

The National Association of Estate Agents believes that clause 6(3) is very imprecise, and we agree. It says:

As it stands, it is so wide as apparently to give legislative backing to any sellers or agents prepared to discriminate against prospective purchasers on the grounds of their race, which would then be a defence to their claim. We believe that our drafting in these amendments would significantly tighten this subsection.

We think that we are proposing improvements that the Government ought to adopt. If they are unhappy with the detail, we shall be happy to withdraw the amendment on the basis that the Government will improve on them. As matters stand, the defences in the Bill are almost risible. The Bill refers to someone

not being genuinely interested in buying a property of a general description.

What on earth does that mean? How can anyone prove or disprove such a vague concept? The same applies to the other category—

not the sort of person to whom the seller was likely to be prepared to sell the property.

In our experience, a seller is prepared to sell the property to anyone who will pay the price that the seller thinks appropriate, no matter what else the seller may think about the buyer. That is commercial reality. We think that the Bill's defences are misguided. We are saying, not that we should limit the defences, but that they should be more sensible and less likely to bring the law in general into disrepute.

David Curry (Conservative, Skipton and Ripon)

I support my hon. Friend. I shall begin by telling an absolutely true story, which relates to my cottage in a village called Fearby, near Masham, near Ripon, in North Yorkshire. My next-door neighbour is a charming lady who keeps rather a lot of cats. My daughter and her boyfriend stayed in my cottage over Christmas and the new year. My next-door neighbour said that she had heard a rumour that I was not going to stand again for Parliament. My daughter immediately refuted that and, being very loyal, said to the neighbour that she surely would not want to lose such an outstandingly good constituency Member of Parliament. My neighbour replied to my daughter that that was not what was on her mind: she simply did not think that anyone else who moved in would take such a tolerant view of her cats.

I tell that story to ask whether that would it would be a defence to say that I was not prepared to sell my property because I did not think that the purchaser would be sufficiently tolerant of the cats in the neighbourhood. Curiously, as I went home last night, just a mile from the House, in Kennington, a large dog fox was raiding the dustbins, supremely indifferent to the vote that had just taken place here. Could one say that any purchaser would have to be an animal lover? These are the Del Boy clauses—the ``any excuse'' clauses. Would one want to sell one's house to a Member of Parliament? The neighbours might be very upset at the prospect of the neighbourhood being brought down quite so low.

My hon. Friend the Member for Eastbourne made a serious point about a person being black. Related legislation exists, but how can one demonstrate that the person being black was the reason for reluctance to sell? Could one not think that the purchaser had insufficient means, or was not genuinely interested in buying a property of a general description? Such a defence is easy to advance, but difficult to unravel or, indeed, to sustain under interrogation. I do not understand how the defences are going to stand up in practice.

May one take exception to people's accents or to their clothes? I do not mean to insult Members of Parliament and I am sorry to use them again as an example, but some of them do not look as though they have just stepped out of a bandbox—I except, of course, members of the Committee, who are sartorial models, but have in mind some old Labour Members, and perhaps even one or two Conservatives. If they turned up to view a property, one might suspect that they did not have the means to purchase it. Will the Minister tell us, not the intention behind the proposal, but how he thinks that the defence, whether justifiable or not, can sensibly be analysed in practice?

Geoffrey Clifton-Brown (Conservative, Cotswold)

I want to ask the Minister just one question. Has he considered whether any form of letter or certificate from a financial lending institution could be supplied or whether, in its absence, it would be a defence to argue that someone did not have the wherewithal to purchase a property? I ask because—

Roger Gale (Conservative, North Thanet)

Order. The sitting will be suspended for a Division in the House. When we return, Mr. Stevenson will be in Chair so I wish all members of the Committee a productive weekend. I hope that when we return on Tuesday the brakes will be back on.

Sitting suspended for a Division in the House.

On resuming—

[Mr. George Stevenson in the Chair]

Geoffrey Clifton-Brown (Conservative, Cotswold)

It is very nice to see you in the Chair, Mr Stevenson. The record will show that the last word that I uttered before the bell tolled for me and we suspended was ``because''. The suspension has given me some time to think about the matters that I had begun to elucidate.

Clause 6 is a bit of a dog's breakfast, as it can provide an excuse for all sorts of people to be denied a seller's pack on all sorts of spurious grounds. It would be much better to produce legislation in which there was more certainty. One way to provide that certainty would be for the seller to be reasonably reassured that the buyer has the financial wherewithal to complete the purchase of the property—at the asking price, or the agreed price. Has the Minister considered requiring some form of financial evidence to be supplied by a prospective purchaser asking for a seller's pack? That could come from an accountant to say that the interested party had the means already to complete the purchase or from a financial lending institution that would, subject perhaps to quite severe conditions, was in a position to be able to complete the purchase. That a reasonable and sensible point, to which I hope that the Minister will be able to respond.

Nick Raynsford (Labour, Greenwich and Woolwich)

I offer the apologies of my hon. Friend the Under-Secretary, who cannot be with us for the rest of this afternoon's sitting because of a longstanding commitment to enlighten the boys of Harrow school. There is no limit to New Labour's ambition and I wish him every success.

Geoffrey Clifton-Brown (Conservative, Cotswold)

As my son is one of those boys being enlightened, I wonder whether I will be able truly to testify whether he has been.

Nick Raynsford (Labour, Greenwich and Woolwich)

I will not be tempted to down that route because I fear it might be ruled out of order. I look forward to hearing privately the judgment of the hon. Gentleman's son on my hon. Friend.

Clause 2 sets out who will be responsible for marketing and property, and who is therefore responsible for the seller's pack obligations. It establishes that the seller is not responsible for providing a copy of the seller's pack where an agent is marketing on his behalf. We want potential buyers to be able to have a copy or part of the pack if they want it and are prepared to pay a reasonable fee for copying costs. Potential buyers will often want to show a copy to their legal representatives for example, or to look at the contents at leisure in the privacy of their own homes. That is fair enough, but we can foresee circumstances in which the seller or his agent should be able to turn down such requests without incurring a penalty.

Clause 3(3) sets out three possible reasons for so doing. The first defence allows the seller, or the seller's agent, to refuse to provide copies if there are reasonable grounds to believe the person could not afford the property in question. That relates to the issue raised by the hon. Member for Cotswold. The agent might know, for example, the financial circumstances of the person in question as a result of a previous failed transaction, and would therefore be quite clear that there was no possibility of this person being able to proceed.

Roger Gale (Conservative, North Thanet)

Order. I thought I heard the Minister refer to clauses 2 and 3. If that is the case, can he confirm it?

Nick Raynsford (Labour, Greenwich and Woolwich)

We are, of course, on clause 6, but in my introduction I referred to the cross reference between the clauses. Clause 6 provides defences against potential sanctions where someone who has a responsibility under earlier clauses, might be considered to have committed an offence. I am sorry if I confused the Committee with that cross reference.

I was describing a situation where the agent might know, from personal experience, that the financial circumstances of the potential buyer were such that there was no practical possibility of the purchase taking place. Equally, the seller might want to clinch a quick deal, and so would specify that only those who could demonstrate their ability to proceed quickly should be considered.

In such cases, the agent might exclude people who could not demonstrate that they had an in-principle mortgage offer or the wherewithal to proceed to a quick purchase. Those are the kind of circumstances that we envisage under the first of these three grounds.

Geoffrey Clifton-Brown (Conservative, Cotswold)

The estate agent might know that a prospective purchaser is part of a chain and cannot possibly have the financial means to proceed quickly until they have sold their house—and there may be other people further up the chain. Would that be a ground on which to refuse to supply a seller's pack?

Nick Raynsford (Labour, Greenwich and Woolwich)

I am always a bit cautious in these circumstances because there is an interface between this and other legislation, which might involve a discriminatory practice. I will come to that later. There could be grounds for challenge in certain cases if the fact that someone was engaged in a chain was used as the pretext for denying them any opportunity to even see the property. The whole purpose of the reform is designed to speed up chains. Therefore, that circumstance is less likely to be a ground for refusal. In certain circumstances, an inability to proceed quickly, where a quick sale is the seller's instruction, could be a ground for refusal.

The second defence applies if it is believed that the person making the request is not really interested in buying the property, or one like it. For example, it could be a journalist posing as a buyer in order to gain access to the seller's pack relating to a celebrity's home or it could be an individual who has a curious fixation with visiting a celebrity's home but who has no interested in buying it and has no means to do so— the Madonna example that the hon. Member for Eastbourne raised earlier. Another example would be the serial time-waster who is known to the estate agent. Those are all circumstances where the seller might reasonably have grounds for suggesting that such a person should not be given a seller's pack.

The third reason allows someone to refuse to provide copies if they believe that the potential buyer is not a person to whom the seller would wish to sell the property. This is a complex and difficult issue on which I should like to spend a little time. There are human rights implications, and this defence simply reflects the current position where someone can refuse to sell his house to a particular person if he wishes to do so, providing that that is not in breach of other legislation. It does not override race relations legislation or other anti-discriminatory legislation, but it reflects the current position. An individual may, for example, have a long-standing grudge with a neighbour and would not want that person to purchase the property under any circumstances.

A different and more benign example might involve someone acting as executor for his deceased parents, who had been keen gardeners and who, over a lifetime, had created a particularly fine garden. Such a person might not want the property to go to someone who was likely to neglect the garden. It would be an entirely understandable human reaction to want the lifetime work of one's parents to be cherished by a potential buyer.

I think that we can all accept that those grounds would be entirely reasonable. Having said that, the second example is entirely reasonable, but the first one—hatred of a neighbour—may be irrational. That is a situation we can accept. It happens in real life and does not involve a breach of anti-discriminatory legislation.

Nigel Waterson (Conservative, Eastbourne)

I do not know how long the list of odd but true situations will be, but does the Minister see the point, that however reasonable we find those two examples, why should ordinary folk, who are entitled, subject to human rights legislation, to sell their property to whomever they choose, be dragged through the courts to show that they have reasonable grounds for adopting a particular view?

Nick Raynsford (Labour, Greenwich and Woolwich)

The very existence of this defence in the Bill will ensure that they are not dragged through courts. The trading standards officer would see immediately that there was no offence.

David Curry (Conservative, Skipton and Ripon)

Does it have to be demonstrated that the seller's belief was well founded? In other words, in the Minister's illustration about gardening, does the seller have to demonstrate that he was justified in believing that people would not be able to look after the garden, or is it sufficient to state his belief?

Nick Raynsford (Labour, Greenwich and Woolwich)

The right hon. Gentleman is picking up on the difference between legislation as currently drafted, and the amendment tabled by his hon. Friend the Member for Eastbourne, which would substitute the words:

was a person to whom the seller had indicated he was not prepared to sell the property.

I will explain later why we do not accept that that is the right formulation. An estate agent acting on behalf of a seller would have to have some basis for his view that the seller was unlikely to be prepared to sell a property to someone to whom he denied a seller's pack. It is not as rigorous as the requirement in the amendment tabled by the hon. Member for Eastbourne, but the intent is similar. We prefer the current drafting because it gives the agent more discretion by not having to get specific instructions on individual cases. Nevertheless, there would have to be some basis to justify the agent's view that an individual was the sort of person to whom the seller would be unwilling to sell his property.

These provisions are designed to, and I believe achieve, a reasonable balance between the need for genuine buyers to get copies of important documents and the right of sellers or their agents to refuse to supply them where they believe that there are good grounds for doing so. Amendment No. 41 would remove the seller's defence that the agent marketing the property should have had a copy of the seller's pack in his possession, and therefore that he the seller was not the responsible person in accordance with clause 2. That would be unsatisfactory, because it could lead sellers, unintentionally, into a breach of the law. If clause 6(2) were removed, the seller and his agent would be required to have a copy of the seller's pack in their possession at all times during marketing. That would duplicate the requirement to have a seller's pack, and is undesirable for that reason.

I am aware that the amendment may have been inspired by the National Association of Estate Agents. I am delighted that the Opposition have been seeking the counsel of the NAEA, which has given thorough attention to the development of the proposals. I know that it has expressed concerns on the issue, but I do not believe that those concerns are justified. Subsection 6(2)(b) provides that the defence is only open to a seller who believes on reasonable grounds that another responsible person is in possession of a pack. That could only be interpreted as meaning that the seller has taken reasonable steps to inform himself whether the pack has been produced. To infer from silence that the pack had come in to the estate agent's possession could not amount to grounds for a reasonable belief.

The effect of amendment No. 4 would be to remove all defences available under clause 6, so that a copy of the seller's packs would have to be provided to anyone who claimed to be a potential buyer and asked for it. As I have explained, there are cases where refusal can be legitimately justified, and I believe that the Opposition will broadly concur with that.

Amendment No. 18 seeks to remove one of the defences I described earlier—that which allows the defence that a person asking for copies was not someone to whom the seller was prepared to sell the property. This raises difficult issues, but, as I have already explained, it is not a charter for discrimination. We could fall foul of human rights legislation if we did not include this clause, or something similar, allowing the seller to withhold a pack from other people to whom they have good reasons to deny access to their home.

Amendment No. 42 seeks to amend clause 6(3)(c). The effect of the amendment would be to put a positive requirement on sellers to decide whether to refuse to provide copies of the pack in each individual case. It could be burdensome and excessive if the estate agent felt that he had to go back to the seller on every occasion that he chose to deny a pack. For example, it would be an excessive requirement to have to get individual instructions for a property if the agent knew that a substantial number of the several hundred who might have expressed an interest would be unable to proceed with the purchase. Although we are sympathetic to the intention behind the amendment, we do not think that it is workable.

There could be many caveats that a seller might want to attach to a sale. I have touched on a number of those, and I will not bore the Committee by giving other examples. We believe that it is right to have this provision in general terms.

Government amendment No. 55 removes one of the conditions that have to be fulfilled before a seller can rely on a person acting as an estate agent to supply copies of the seller's pack to potential buyers.

The defence in clause 6(4) applies where both the seller and the estate agent are responsible for marketing a property. If the seller fulfils the conditions stated, he is not required to supply copies of documents to potential buyers. He can refer them to his estate agent to obtain those copies. The amendment makes it immaterial to the defence whether or not the seller has a copy of the pack in his possession. It is a sensible and practical amendment, and has the other advantage of reducing the length of the Bill by a modest amount. I hope that right hon. and hon. Members accept that the amendments tabled by the hon. Members for Eastbourne and for Bath should be withdrawn and that the Government amendment should be accepted.

Nigel Waterson (Conservative, Eastbourne)

I am grateful for the Minister's explanation of amendment No. 55, which caused us some puzzlement. As he said, if it shortens the Bill, who are we to complain.

I do not intend to invite my hon. Friends to force this to a Division because, unless those Labour Members who are only here to discuss part II have disappeared, the odds are that we would probably lose. Despite the examples quoted by the Minister—and there may be many others—the defences in subsection (3)(a), (b) and (c) are in ascending order of silliness, reaching the pinnacle of:

was not a person to whom the seller was likely to be prepared to sell the property.

The Minister's first example was about a long-running feud with a neighbour. We might all think that it is perfectly reasonably for the seller to refuse them a pack because he would rather die than sell the property to the neighbour, but that is precisely the sort of person who would be apt to report the matter to the trading standards officers. It is not open to the Minister to say that trading standards officers would make a decision that it came within that defence. It is not their job. They may have a decision about whether to initiate a prosecution, but that is a wholly different matter to making a decision on whether a defence will fly. There are some other strange examples being cast around, but we are simply trying to remove these defences because we are concerned that ordinary folk who are simply doing what they are entitled to do—

Geoffrey Clifton-Brown (Conservative, Cotswold)

The seller's pack contains a lot of private information, particularly at the more expensive end of the market. I wonder whether my hon. Friend has considered the fact that the seller, or indeed the buyer, might not want such information to be generally available to a lot of other people. How will that impinge on these defences? It could be a defence for a seller to say, ``I only want one or two people to have the seller's pack. I don't want it to go to those who I believe are not genuine purchasers''.

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend makes a very good point, which we will develop in more detail in a subsequent amendment. I believe that I have tabled an amendment dealing with confidentiality. It is a considerable issue. My right hon. Friend the Member for Skipton and Ripon talked about people perhaps not wanting a Member of Parliament living next door to them—I suppose it depends on the Member of Parliament. Equally, a Member of Parliament, or any householder selling a property, may not wish people to have access to details about it. For example, I do not know if the home condition report would cover whether a property has a working burglar alarm system. In the age of the photocopier, seller's packs are not necessarily restricted to those to whom they are given. Whether one is a pop star, a Member of Parliament or a celebrity, or if one has many things that people may want to steal, it is likely that there will be a view on who should see the seller's pack. I do not intend to deal with that now, but it needs to be addressed.

We think that it is entirely wrong that ordinary citizens, who can take a decision on any or no grounds not to hand out the seller's pack, should risk being dragged through the courts simply to take advantage of these defences. On human rights, I think that the Minister was hinting at the possibility that it might be infringing the human rights of the seller, but what about a potential buyer? If a buyer is refused a seller's pack, possibly on racial grounds, there is redress under the appropriate legislation. Are there other, wider rights for other people who feel badly done by? I should be grateful if the Minster would develop that, or perhaps he might prefer to write to right hon. and hon. Members.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 55, in page 5, line 8, leave out paragraph (a)—[Mr. Raynsford.]

Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I want to raise a separate issue, which did not fit naturally into an amendment. It relates to clause 6(1), which, I understand, is a free-standing and separate defence where a person has

exercised all due diligence to avoid the commission of the offence.

that is, the failure to produce the seller's pack. The Minister will, no doubt, have been told by his advisers that ``due diligence'' is a phrase that appears many times in legislation and court decisions. In layman's terms, I want to tease out of the Minister what a seller would need to have done, short of procuring a seller's pack, to avoid prosecution under subsection (1). There is a little help, but not much, to be gathered from other parts of the law. I am primarily a shipping lawyer and, although there is a great deal about ``due diligence'' in shipping law, it is not of any direct help in this instance. Perhaps the most interesting case is Jervis v. Tomkinson in 1905, in which it was held that

A covenant to do a thing ``with all due and reasonable diligence and despatch'' is not excused from performance if it can be done; even though the jury find that it cannot be done by any reasonable application of labour, diligence, skill, money, or other means.

That decision, couched though it may be in slightly obscure legal language, suggests that a person cannot simply escape on the basis of a defence of due diligence if he or she has taken all reasonable steps to do whatever is required. I do not know what that was in the above case, but it is obviously not related to the situation that we are discussing. If it were still possible to do what was required and the person did not, even by an unreasonable application of labour, diligence, skill, money or other means, he or she could fall foul of the legislation.

There is another definition in, as it happens, a shipping case of 1960: Riverstone Meat Co. Ltd. v. Lancashire Shipping Co. Ltd. Lord Justice Willmer held that

An obligation to exercise due diligence is to my mind indistinguishable from an obligation to exercise reasonable care.

To my lawyer's mind, those two requirements seem rather contradictory. There is certainly enough there to require some dispelling of the potential confusion. Unless the Minister says the opposite, I think that this is meant to be a wholly free-standing defence, quite separate from those that we have been discussing. It would be helpful to know what the Minister's advisers suggest would amount to due diligence, which would get someone off the hook.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman has asked a perfectly fair and valid question about clause 6(1), which is the defence of due diligence. After responding to that question, I will say a few words on the human rights issue that he raised at the end of his comments on the amendments. As he sought leave to withdraw the amendment, I did not have an opportunity to respond. I hope that it will be in order to do so now.

The obvious example of due diligence, which we have already discussed, is the case in which it proves impossible to put together all the documents for the seller's pack, because the warranties—which exercised us earlier—never turn up. Despite the seller repeatedly being asked and reminded to search his or her chest of drawers, cellar or wherever old documents are kept to try to find the warranties, they are never secured. There might be a claim that the seller's pack has been offered with a note in it saying that the warranties or guarantees will follow, but they never arrived, and that is a breach of the law. In such a case, it would be entirely proper for the estate agent to be able to show that he or she had done all that was reasonably possible to obtain that information, but had not been able to do so. He could show that he has systems in place that normally prevent him from falling in breach of the law, for example, to avoid early marketing, before a seller's pack is put together and to ensure that where the information is not obtained by a certain time, a pack may be issued but with procedures for chasing up the information later. In my view, such evidence is an obvious example of the due diligence likely to be covered by these circumstances.

I must tell the hon. Member for Eastbourne that I am not an expert in shipping law and I do not want to begin to address the questions about which even he seemed unsure, which arose from the cases that he quoted. However, I suspect—this is a hesitant comment—that some of those provisions relate to obligations that clearly had a very serious impact on the safety of people travelling on ships. It is probable that higher standards would reasonably be expected where human life was at risk than in simple compliance with the provisions of this legislation. I do not want to pursue that any further, but the defence seems reasonable in the context of what we are discussing, where it is a matter of ensuring compliance with procedures but where human life is not immediately at risk.

Nigel Waterson (Conservative, Eastbourne)

I do not want to pursue the Minister too far down that avenue as the question of human life is neither here nor there in the shipping law analogy. It is probably my fault for not having been sufficiently succinct. I was trying to make the point that I have found from my researches that the test of ``all due diligence'' is quite a high test in law. It is significantly higher than taking ``all reasonable care'', for example. A layman might underestimate its importance. I do not expect the Minister to deal with this on the hoof, as it requires careful thought and careful advice from those who know about these things. I should be happy if he undertook to write to the Committee on that subject.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman may be reassured to know that the phraseology is not unique to this type of legislation as the Property Misdescriptions Act 1991, which is probably the closest parallel, has exactly the same defence. There is therefore a good precedent in legislation that was introduced by the previous Conservative Government. I hope that he will accept that this is a reasonable basis for proceeding. I shall look into this further and if any concerns arise, I will write to him. I hope that he will accept that this is an appropriate defence that is also commensurate with the level of responsibility defined in the Bill.

On human rights, he asked whether buyers could feel that their human rights were violated by a refusal to let them have a seller's pack in certain cases. That was one of the reasons for including the provisions in subsection (3). Without them, it would be much easier for a malicious, disgruntled or simply obsessive potential buyer to use the Human Rights Act 1998 as a basis for frequent, and in some cases entirely malicious, challenges. Therefore, I hope that he will accept that while Human Rights Act considerations apply—I made it clear that we would be careful to avoid actions that might be seen to restrict the rights of sellers—we do not want the legislation to be abused by buyers pursuing malicious claims for which no defence is prescribed in the Bill.

Don Foster (Liberal Democrat, Bath)

A thought occurred to me as the Minister was speaking. What is the situation with regard to estate agents providing information in the packs that they currently make available? Presumably without legislation of the type the Minister describes, they could find themselves in difficulty under the Human Rights Act.

Nick Raynsford (Labour, Greenwich and Woolwich)

Exactly the same considerations that I have been describing apply at present. An estate agent might decline to provide particulars of a property to an individual on the instructions of the seller. It might be a specific instruction such as, ``Under no circumstances are you to ever to entertain a bid from my loathsome neighbour Mr. X''. It might be a more general but entirely legitimate instruction, which would not breach the anti-discrimination legislation, to exclude groups of people such as those who would be unlikely to maintain the garden. Exactly the same considerations would apply because the Human Rights Act is already in force. We are not introducing new concepts. We are trying to ensure that the provisions of the Bill are compatible both with the anti-discrimination legislation and the Human Rights Act. I hope that, on that basis, hon. Members will accept that this is a sensible clause that should stand part of the Bill.

Question put and agreed to.

Clause 6, as amended, ordered to stand part of the Bill.

Clause 7Contents of sellers' packs

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 43, in page 5, line 19, leave out `may' and insert `shall'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take the following amendments:No. 5, in page 5, line 44, at end insert

`save that these shall not include local authority searches.'.

No. 19, in page 5, line 44, at end insert

`or—( ) a valuation of the property.'.

No. 6, in, page 6, line 2, at end insert

`save that these shall not include a survey report or home condition report.'.

No. 7, in page 6, line 2, at end insert

`and the term ``characteristics'' shall include information about risk of flooding.'.

No. 20, in page 6, line 2, at end insert—

`( ) an account of the suitability of the property for occupation by disabled persons.'.

No. 40, in page 6, line 3, after `the', insert

`physical structure of the property.'

Nigel Waterson (Conservative, Eastbourne)

Amendment No. 43 is very simple. I am not entirely clear why ``shall'' has not been used: the Minister cannot be in any doubt that the regulations will be issued in due course. It could be a drafting point and I am willing to listen to reason on that.

Amendment No. 5 would take out of the seller's pack reference to the local authority searches and linked amendment would take out reference to the home condition report. I shall return to those matters later and speak first to some of the amendments that are easier to deal with.

The reasoning behind amendment No. 7 on flooding is self-evident. In recent months, few hon. Members can fail to have received letters in their postbag about flooding—some cases more serious than others—as a result of sustained rain over a long period. Some time ago, the Minister made it clear that the Government, as well as producing new planning guidance—currently in draft form, but likely to be finalised soon—were considering using the Bill to address the flooding problem. I cannot lay my hands on the reference, but it appears in Hansard. The Conservatives regard that suggestion with favour. It underlines the inadvisability of insisting that the seller's pack contain a home condition report. We shall debate the format in detail when we reach clause 8 and I do not want to stray too far, but to what extent will it deal with flooding? Will the information be reliable? If there has been severe flooding over several months, will information be provided about how badly the condition of a particular property could be affected?

I return to amendments Nos. 5 and 19. Several organisations, including the Law Society and the Council of Mortgage Lenders, are concerned about the requirements stipulated in the amendments. Although the National Association of Estate Agents is broadly supportive of the reforms, it would surely accept that not every estate agent is signed up to the proposals. Strong views are held on the subject. We need look no further than the Second Reading speech of the hon. Member for Upminster, who warned against

over-promoting the proposals as a panacea for the problems inherent in the system of moving home.

On the basis of his nearly 30 years of experience as a conveyancer and member of the Law Society, he believed that the problem was caused

not by the conveyancing process, but by the nature of our housing economy.

The hon. Gentleman was also critical of attempts, not least those of the Minister, to compare our system with that of other countries. In fairness, the Minister would accept that it is difficult to draw close parallels when markets, habits and occupation levels are different.

The hon. Member for Upminster made the telling point that:

As a result of the high proportion of home ownership—

as we know it is 69 per cent. in this country—

and the low proportion of private rented accommodation in England and Wales, few people who have to move home can consider moving into temporary accommodation.

That, of course, is a solution found in other countries, not least in Scotland, where I believe there is a tradition of people moving into rented accommodation rather than endure the tremendous climactic event whereby everyone in a chain moves house on the same day. I seem to recall a rather good film on the subject; it was made many years ago, but remains true today.

The hon. Gentleman made a fair point—no doubt doing so sank his chances of serving on the Committee. He that the proposal will help those moving home, but only marginally and at a cost—financially and otherwise. He says, for example that:

an unscrupulous seller might obtain a seller's pack and hawk it around.

He came up with other criticisms, pointing to the efforts of the Law Society and others over quite a long period to speed up the system.

It is important that we do not pretend that we are acting in a vacuum. Things are happening, things have been happening and things will continue to happen to speed up and make more efficient the system of conveyancing in this country. It is fair to say that the Law Society and estate agents have been at the forefront of that effort. Lots of things are changing, such as the development of the internet, and so on. It may be a while before the internet is fully effective, but searches and other activities will eventually become a matter of clicking a mouse.

The hon. Member for Upminster talked about the extension of communications technology, saying that

local and land registry searches will be available at the touch of a computer keyboard—

but adding—

I think we can ignore them as a factor leading to delay and uncertainty, although they are relevant to the question of cost and who is to bear it.—[Official Report, 8 January 2001; Vol. 360, c. 787-88.]

He pointed that it has always been possible to make a personal search, it just costs extra money. If there is a great hurry, it is always possible to pay for your solicitor to send someone down to the local council office and make a personal search, even in the age of the internet. The hon. Gentleman mentioned serious reservations about the front-loading of costs, extra costs, the need for further surveys, and so on. He also, rather interestingly, talked about the problems of criminal sanctions. What a shame the Committee does not have the benefit of his advice.

Andrew Love (Labour/Co-operative, Edmonton)

We are getting it from you.

Nigel Waterson (Conservative, Eastbourne)

The hon. Gentleman is certain getting good press from Opposition Members.

I have a letter from a Mr. Rendell, who works for a company called Convey Direct. The letter is sent from an address in Bristol and, of course, Mr. Rendell talked about the Bristol pilot scheme. Rather fascinatingly, he says of the scheme that:

The trial was in my view, carried out on a misconception i.e. that by the time the scheme was launched all Local Authorities would be on line. If that were the case i.e. so that searches could be obtained ``at the click of a mouse'' then frankly there seems little to be gained by making a search weeks, months, in advance of the sale. Besides, the Local Search is a highly technical document.

He says that

it is unrealistic to think that the searches will be on line before 2003—

the date by which the Minister hopes to implement the legislation. His letter continues:

What we will therefore have is a situation where the searches alone may take two to three weeks.

Then—this is a fascinating observation from one who was there—Mr. Rendell says

This was ``massaged'' in the Bristol Pilot because Bristol Council agreed to give priority to all Sellers Pack searches, returning them within 48 hours.

I was not aware of that until I saw that letter. If that is true—and I have no reason to believe that it is not—it puts another twist on the pilot results. Rather fetchingly, Mr. Rendell notes:

This is not the real world but it helped to contribute to the suggestion that Sellers Packs could be prepared in the space of 10 days.

He makes the further important point that

The pack will have no value unless the Condition Report is acceptable to Purchasers.

He goes on to say that, even in the pilot scheme, houses were

surveyed not once or twice but three times i.e. once for the Sellers pack, once for the Lender and once for the Purchaser.

Mr. Rendell also talks about speeding up conveyancing. We all know that electronic technology will speed up the process and make it more effective, but it is rather worrying, to say the least, that he does not believe that it will be possible to implement the scheme within the proposed time scale.

I have talked about local authority searches and the home condition report. Our position on those matters is clear and amendments Nos. 5 and 7 touch on that. The only other amendment to which I need to speak is amendment No. 40, a probing amendment that seeks to establish what warranties or guarantees on property are involved. We want it to be clear that only warranties or guarantees relating to the physical state of the property—structure, repairs, damp work and so on—are involved, not those relating to equipment.

Don Foster (Liberal Democrat, Bath)

In the light of those comments, does the hon. Gentleman think that it would be helpful for the seller's pack to give information about documents that are not available—for example, damp guarantees, dry rot guarantees and so on? Might a checklist of the information deemed necessary be included so that it is clear whether such information is available in a particular pack?

Nigel Waterson (Conservative, Eastbourne)

That is possible but we are again getting into the famous list argument. If the documentation included a long list of what one should expect to see, it could be worrying to see an ominous set of unticked boxes. That is a clause 8 issue.

The Bristol scheme involved specific reports about subsidence and so on, owing to former mining works. That obviously makes sense in certain parts of the country but would not be relevant in Eastbourne. We are by the sea, so information about flooding risk might be more relevant. Our cliffs are disappearing at a rate of knots—I blame the Government. On that note and in my usual desire to be constructive, pithy and concise, I commend the amendments to the Committee.

Don Foster (Liberal Democrat, Bath)

I rise to speak briefly to amendments Nos. 19 and 20, even though members of the Committee can probably guess the Minister's arguments against both. I suspect that he will deploy the famous argument A—the list argument—against them, although he may have other arguments to advance against amendment No. 20.

We are debating an issue that goes wider than the specifics of the amendment: what sort of information should be included in the seller's pack and should that information be detailed in the regulations or in the Bill? The purpose of the amendments is to ensure a clear undertaking from the Minister that such matters will be covered in the regulations, if not the Bill. I hope that the Minister will accept the spirit in which the amendments have been tabled.

On Second Reading, the Minister, in responding to his hon. Friend the Member for Barnsley, Central (Mr. Illsley), who had raised the issue of the possible inclusion in the pack of information relating to subsidence in mining areas, said:

My hon. Friend makes a valid point. We are specifically considering whether the seller's pack should contain precisely the information about which he is concerned in areas of mining subsidence, but there are other issues. Obviously, vulnerability to flooding would be an important issue, about which many hon. Members will rightly be concerned in the light of the recent floods.—[Official Report, 8 January 2001; Vol. 360, c. 716.]

An amendment in relation to subsidence or flooding has not been moved, and I hope that the Minister will take the opportunity of commenting on both of those issues. While doing so, perhaps he could he comment on another issue that it would be appropriate for the regulations to refer to.

The Chartered Institute of Environmental Health has drawn my attention to the problem of radon gas. Much concern has been expressed in the newspapers about the threat to soldiers of inhaling depleted uranium but it is easy to forget that as many as 2,500 people each year die from the effects of inhaling radon gas and its decay products, which lead to lung cancer.

One of the problems is that the issue does not affect all parts of the country. It predominantly affects a swathe running from the west of the country through to the east midlands. It is important that reference is made to this problem, but I recognise that, were a test for it to be required in all parts of the country, that would create difficulties. For example, in London, were it to be a requirement to demonstrate that there had been a test for radon and what the test results had been, that might lead to anxiety and a great deal of delay, in an area where we know that there is no such problem. The difficulty, and I appreciate it entirely in raising this issue, and those of with mining subsidence and flooding, is that these are area-specific issues.

The Committee will note that the Minister has said that he is prepared to look at the issue of whether low-value properties should be excluded, and that too will generally be an area-based issue applying in some parts of the country and not others.

These variations add some additional complications, which need to be addressed, to the way in which the seller's packs are produced. What will not vary in different parts of the country is that enormous benefits will be gained in buying and selling houses—in particular doing what the Minster wants, and speeding up that process—if the seller's pack could have an additional purpose, that of assisting mortgage lenders in speeding up their part of the operation.

Amendment 19 suggests that, in addition to the other items included in the seller's pack and which are referred to specifically on the face of the Bill, there should also be a valuation of the property done in a way that would be acceptable to a mortgage lender. That addition would be beneficial in speeding matters up and would go a long way to addressing the problem of gazumping, which the Committee knows is not significantly addressed by the Bill.

Hon. Members who have read amendment No. 20 will agree that it would be useful to ensure that information about disabled access to the property was made available. However, I acknowledge the difficulty of doing this, since the particular needs of one disabled person could be very different from those of another. I acknowledge that the wording of my amendment does not recognise that, but I should be interested to hear the Minister's response to the problem that it highlights.

I realise that I am asking the Minister perhaps to go against his own determination to stick to argument A, the list argument. I hope that, if he looks at all the proposals in the group of amendments, he will note that there are nearly as many deletions as additions. That might persuade him that we will end up more or less where we started and he might be slightly more sympathetic than I suspect he is about to be.

Nick Raynsford (Labour, Greenwich and Woolwich)

We have had an interesting debate on the specific requirements of clause 7, which is a particularly important clause because it defines the contents of the seller's pack and sets the parameters for the detailed specification that will be carried through in regulations. I shall not weary the Committee by repeating the reasons for using regulations. The only restriction is that the documents must be relevant to the property being sold and concern matters that are of interest to a potential buyer. They are specific and common-sense restrictions on the exercise of the power and what is to be included in the seller's pack.

The clause states the sort of information that would go into the pack. It is essentially the information that is provided by or on behalf of buyers and sellers now. For reasons that I have explained, we want to prescribe the contents of the pack in secondary legislation. That will allow time for the components to be drawn up in consultation with consumer and professional representatives. It also provides important flexibility to make changes more speedily if changes in the housing market make some items redundant or if new sources of important information come to light. One need think only about the specification of the average house today compared with 30 or 40 years ago to know how important it is to have the flexibility to update. A whole series of electronic equipment in the house, not to mention central heating, would have been rare 40 years ago, yet is now commonplace.

Amendment No. 43 would substitute ``shall'' for ``may''. I am familiar with that, as I have myself moved similar amendments. I probably moved one on the Housing Act 1996 when the right hon. Member for Skipton and Ripon was in the place that I now occupy and I was where the hon. Member for Eastbourne sits. I fully understand the reason for tabling the amendment. Just as our best efforts were rebuffed by the then Minister, I shall disappoint the hon. Member for Eastbourne, although perhaps I will not as he is a realist and he knows that I will be offering him a clear explanation of why we need the wording.

Don Foster (Liberal Democrat, Bath)

As a matter of interest, were the Minister at some future date to be transferred back to the position currently occupied by the right hon. Member for Skipton and Ripon, would he hold his current view, or those that he held when he was in opposition?

Nick Raynsford (Labour, Greenwich and Woolwich)

I am a great believer in progress. Labour Members believe in progress and it is fair to say that Liberal Democrat Members do, too. Unfortunately, the hon. Gentleman is on the side of the House that is associated with a party that does not believe in progress and has a more conservative approach towards the world. The belief in progress and the perfectibility of man, and woman, is such that I have learned from my experience in the past three and three quarter years in government. I would not now repeat the arguments that I made in good faith when I was in opposition and had not the expert advice that I now have available from people with razor-sharp minds who know exactly why legislation has to be drafted in certain ways. I hope that answers the hon. Gentleman's question.

The use of the word ``may'' should not be taken to imply that regulations will not be made. The rest of the provisions of the Bill cannot work unless the contents of the seller's pack are prescribed in regulations. If regulations were not made, the scheme would not be introduced. We are committed to introducing the seller's pack. We want it to work, and we will make regulations. We are satisfied that the current wording achieves our objectives. I am told that the substitution of the word ``shall'' for ``may'' could expose the Secretary of State to legal challenge for failure to produce regulations by a particular time when there might be good reason to ensure fuller consultation, which might mean that the regulations emerged slightly later. That is one illustration of the potential problem that could arise should the word ``shall'' be substituted for ``may''. I have questioned my advisers carefully on that point, because I have argued the case from the other point of view in the past, and I am satisfied that there are good and precedented reasons for keeping the phraseology that is in the Bill.

Geoffrey Clifton-Brown (Conservative, Cotswold)

It is an important point, because professionals will be looking at the Hansard report of the debate. When does the Under-Secretary expect to be able to produce those draft regulations? Clearly, it is in everyone's interests that there should be proper consultation with all the relevant bodies. At the same time, it is in everyone's interests that those regulations are known about in good time before the Act is brought into force.

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman is correct in saying that there is a balance to be achieved between scope for proper consultation—to allow all interested parties a full opportunity to express their views and enable the Government to learn from the experience of the wide range of bodies who have much to contribute to the debate—and the need to provide plenty of advance notice for those preparing for the implementation of the scheme. I cannot give the hon. Gentleman a precise date at the moment for that reason, but I can assure him, however, that we are determined to complete both those processes. We have two years in which to do so, which gives us more than enough time to ensure full and extensive consultation, and to provide the regulations in good time for the House to consider and debate them. All those who will need to use them will have access to them, and will be able to prepare well in advance of the implementation of the scheme.

Amendment No. 5 would appear to be intended to provide that local authority searches cannot be specified in any regulations that prescribe the contents of the seller's pack. Local searches are important to home buyers and mortgage lenders. If problems are revealed by the search, they can lead to further investigations and delays, possible renegotiation over the price, or even transactions collapsing altogether. The whole point of the seller's pack is to introduce transparency into the system by exposing potential problems and information that might threaten the transaction right at the beginning of the process. The local authority search is an important component. It is a check against other components of the pack, including the home condition report, and the property information form. The search, therefore, needs to be available up front, and I believe that the effect of the amendment would be catastrophic to the good working of the scheme. I hope that the Committee will reject it.

I understand that anxieties have been expressed on these issues. The hon. Member for Eastbourne referred to various concerns. I shall not go into the detailed point. He quoted at length my hon. Friend the Member for Upminster. My hon. Friend was not alone in failing to secure a place on the Committee. Many Labour Members expressed a wish to serve on the Committee. It has proved a popular Cttee, and several hon. Members were disappointed not to be able to serve. I can assure the Committee that I have heard the views of my hon. Friend for Upminster and have considered them carefully. I do not agree with all of them.

My hon. Friend was quoted by the hon. Member for Eastbourne as saying that international comparisons were potentially misleading. I accept that some misleading comparisons can be made, but by whatever criteria one judges, we have one of the slowest systems in the world. Virtually everyone to whom I have spoken accepts that we must be able to speed up the process considerably and that applies equally to local authority searches. I will, therefore, pick up the point that the hon. Member for Eastbourne made, quoting Mr. Rendell. I hope that he is no relation to the Liberal Democrat hon. Member for Newbury (Mr. Rendel). Mr. Rendell wrote to say that the Bristol pilot was bogus because there was a fast-track procedure for the searches, and it would not be possible to obtain information by 2003 using the national land information service and the electronic system. I have to say that Mr. Rendell's first point is unfair and his second is quite simply wrong. Let me tell the Committee why.

The pilot was designed to replicate the circumstances that will apply as and when the new arrangements come into force. We expect NLIS to be available in the not-too-distant future, which is why we sought to ensure that local authority searches could be processed more quickly than under the existing manual arrangements. That is the reason why there was a strong emphasis on creating a quick procedure for accessing the information necessary for the local authority searches. It is in everyone's interest that we do that, to speed the process up, because the current arrangements are not satisfactory.

As for the claim that the endless and similar arrangements will not be available by 2003, I inform the Committee that a statement was issued today, prepared jointly by the local authority improvement and development agency, and by Teramedia Ltd., which is working with the agency on this. The statement makes the point that

there is already a modernisation programme under way, pioneered by the local government Improvement and Development Agency (IDeA) and the first local authority data providers are being selected. Roll out plans for modernisation indicate that a critical mass of data providers would be able to provide updates to questions direct from the source registers by 2003.

We are also looking at the feasibility of various private sector initiatives to keep this information constantly up to date, for example in the area of planning applications received in the interim. Indeed, the first NLIS Channel Licence is being signed tomorrow by Teramedia Ltd.

None of this would be possible using manual methods but I have confidence that NLIS will provide this capability through a choice of outlets, by the time sellers packs are mandated by 2003.

Geoffrey Clifton-Brown (Conservative, Cotswold)

I am a member of the Public Accounts Committee, and time after time we have come across big government IT programmes that were delivered very late. One can think of NIRS2 and IT in the Ministry of Defence. Far too many big government IT programmes are delivered late, so it is highly possibly that the NLIS programme will be late. Under those circumstances, it will still be necessary to rely on manual searches. It is my experience that local authorities are very variable in the length of time that they take to provide local authority searches. Would it be a defence in such circumstances to provide a seller's pack, saying the date of application for a local authority search and the date on which it was expected to be provided.

Nick Raynsford (Labour, Greenwich and Woolwich)

Our intention is that there will be no need for it, because the system can be obtained electronically within a short time. I am pleased to say that Teramedia Ltd., a private sector company with considerable experience in the field, and the local authority improvement and development agency are both confident that that can be achieved.

However, to take the hon. Gentleman's point, in the event of gross inefficiency on the part of a local authority and a total failure to provide the information by the time that the agent felt it was reasonable to put a seller's pack on the market, it would certainly be possible for the agent to put the pack on the market with the note, as we have described, stating that the information will be provided as soon as it becomes available. I would hope, however, that the agent would notify, not just the local authority, but our Department, because such a failure would be wholly unsatisfactory. As I have said, we are seeking to improve and speed up processing and most local authorities are entirely sympathetic to the need for such processes to be carried out far more efficiently than they are now. We will continue to apply pressure to help ensure that that is achieved.

Amendment No. 19 would provide that a valuation of the property may be included in the contents of the seller's pack. We have deliberately chosen not to include a valuation in the pack for two main reasons: first, inclusion would unbalance and inhibit the usual bargaining process; and, secondly, a valuation is subjective and could become out of date very quickly in a fast-moving market. In our view, the home condition report would generally be reliable for six months or so without a valuation attached, but its reliability would be seriously compromised if it included a valuation that became out of date in a matter of weeks.

The home condition report will greatly assist buyers in making a sound judgement on whether the price of the property accurately reflects its condition. We also want lenders to be able to use the home condition report to assist their valuation purposes, although we do not intend, in any way, to inhibit the ability of lenders to carry out a separate valuation inspection if they feel that is necessary. We are quite confident that the condition report will greatly assist the current trend, in the industry, towards desktop valuations for mortgage purposes and it would be very wrong if buyers armed with a home condition report were asked to pay unnecessarily for a separate valuation inspection.

We recognise that there may be circumstances where lenders will wish to carry out their own valuation inspections, we will provide for that, but in the majority of cases we are quite confident that the availability of the condition report should make inspections the exception rather than the rule. That, of course, will be of huge benefit to the public who are currently paying, on average, approximately £180 for such a valuation. If we can remove it, it is another cost reduction in the system and so benefits the consumer. That is what the Bill is all about—making the system better and more cost effective for the public. We are discussing with the Council for Mortgage Lenders how that can be achieved. The CML is one of the stakeholders represented on the body governing the development of the home condition report and certification scheme and it is well placed to ensure that lenders needs are considered alongside those of other stakeholders.

Amendment No. 6 will provide that the seller's pack may include information on the physical condition of the property, but a survey report or home condition report may not be prescribed in regulations. Again, the amendment is wholly unsatisfactory and would be utterly destructive to the whole process. The inclusion of a mandatory, professional report on the condition of the property is central to the overall objective of our proposals. Research has shown that the cause of 43 per cent. of failed transactions are a result of problems identified by the valuation inspection or conditions survey where one is commissioned. That is why the information should be made available at the very start of the transaction process and should be included in the seller's pack. Furthermore, in the chain, the effective delays and aborted transactions can go well beyond those directly involved. That adds further weight to the argument for identifying condition problems at the start of the process.

The inclusion of a condition report also brings other major advantages, the largest for first-time buyers. They have the least experience in the market, and the least experience in owning property. They are probably those in the greatest need of reliable advice on condition. They are also often those who can least afford a survey. They have a real gain from these proposals. There can be few measures that would give more direct benefits to first-time buyers. When they first buy, often when people are most stretched and in greatest difficulty, they will not have to incur some of the costs they face now. This is a very sound basis for helping first-time buyers. It is one of its greatest advantages.

Specifying that information on the physical condition of a property should not be in the format of a survey or a home condition report, would considerably weaken the effectiveness of including this information. In order to be of benefit to consumers, the information needs to be prepared to consistent benchmark standards by a competent inspector, that is a member of an approved certification scheme.

Our proposals for a certification scheme will ensure that the condition reports are independent, objective and reliable. Any certification scheme approved by the Secretary of State will ensure that reports are produced to consistent benchmark standards by suitably qualified inspectors with professional indemnity insurance.

One of the major advantages of the home condition report is that it will be a standard form of report, produced to consistent standards. This will enable consumers to compare the condition of different properties. It is far preferable to using the homebuyer survey and valuation, where a wide variation of reporting occurs, due to a lack of benchmark standards. Many of us who have gone through the house buying process, and have commissioned surveys, will know that the caveats and safeguards put in by individual valuers often vary. It will be of huge benefit to have a standard set of procedures that will be understood, so there will be a lot less scope for valuers to use weasel words to conceal potential weaknesses or failures, or to safeguard themselves against action if their report is not a good one.

Amendment No. 7 to clause 7(5)(d) will provide that any information on the physical condition of the property contained in the seller's pack should also include information about the risk of flooding. Clause 7 (5)(d) signposts our intention to include a home condition report in the seller's pack. The precise contents of the home condition report are not yet finalised, but I can assure the Committee that it will contain information relating to flooding. If, for example, there was evidence of flood damage to the property, it is intended that that should be reported. Even if there was no physical evidence of flooding, the report might still point out any potential risks of which the inspector is aware.

In view of recent events, to which the hon. Member for Eastbourne referred, I can understand the calls for information relating to flood risks to be made available in the seller's pack. In this respect, potential buyers can go to the Environment Agency, which provides a search inquiry service on this and other environmental matters. Any such search would fall within the provisions of clause 7(5)(c)(ii), and we will consider this further in consultation with representatives of consumers and the professions.

Geoffrey Clifton-Brown (Conservative, Cotswold)

On the subject of those further environmental searches, it will be necessary to establish the norm in relation to searches. Will those searches have to include the normally separate commons registration search? Will the local authority search have to include a search of the contaminated land register?

Nick Raynsford (Labour, Greenwich and Woolwich)

The hon. Gentleman raises two important but highly technical issues, and rather than give an unadvised answer immediately, I will take further advice and write to him on both those issues. I can assure him that it is our intention to ensure that the searches and the compilation of the condition report are carried out in as standard a format as possible, to ensure that the vast majority of eventualities that are relevant to the property are identified and that the evidence can be relied upon by prospective buyers and others.

Amendment No. 20 seeks to include the suitability of a property for occupation by disabled persons as an example of relevant information under clause 7 (5). Information on whether the property being sold is suitable for disabled people is clearly relevant information within the meaning of clause 7(3) and (4). However, it is not strictly necessary, and it could be counter-productive, to make it a specific requirement for the regulations. The information would fall within clause (7)(5)(d), which provides that the pack may include information on the physical condition of the property. I refer to my earlier comments on the reasons for not wishing to specify matters in the Bill where it is not necessary to do so—argument A.

As the hon. Member for Bath recognised, there is a considerable variation in the type of adaptation carried out for disabled people, and some adaptations would not be appropriate for certain needs, but not for others. I hope that he will recognise that, while we are quite clear about the importance of ensuring that relevant information, including information about suitability for disabled people, is included, his would not be an appropriate amendment to put on the face of the Bill.

While mining subsidence and radon are both potentially relevant issues, as the hon. Gentleman recognised, they are applicable only in certain areas. We are considering how we can best organise the home condition report to provide as much relevant and useful information as possible, without it becoming unduly complicated, inaccessible or expensive. Those issues are under consideration and we will certainly reflect on the views expressed in the Committee before we come to conclusions.

David Curry (Conservative, Skipton and Ripon)

Exactly what does the Minister mean by the term ``risk'', which he has been using frequently over the last 15 minutes? We have all become used to the ``analysis of the risk'', for example, in food safety. We talk about the ``risk of flooding''. Yet the Environment Agency was talking about a one-in-500-year event, which has now turned out to be rather more frequent. There is a real danger that details about a risk that is in practice unlikely to occur may, by being included, be a serious deterrent to sale. We need a definition of what the order of evaluation of risk means, and to reassure people that when we say, ``You cannot discount something,'' that does not mean that it is not going to happen.

Nick Raynsford (Labour, Greenwich and Woolwich)

The right hon. Gentleman makes a point similar to the one that I made in my evidence to the inquiry into flooding conducted by the Environment, Transport and Regional Affairs Select Committee. I made the very point that the fact that the property is in a flood plain does not of itself necessarily indicate that there is a risk of flooding. We are all in a flood plain. The whole of central London is a flood plain. However, given the presence of the Thames barrier, the likelihood of a flood is very much reduced. Therefore, the information needs to be relevant and to take account of the remediation and safeguards that are present to try to counter those risks. I hope that the hon. Gentleman will accept that we are very much alert to the point that he has raised, and we do not wish to raise undue fears by information being included that is only partially accurate and therefore could give a false impression. It is important that information should be available, but the information must be useful and give a true picture of the extent of the risks that exist.

Amendment No. 40 would amend clause 7(5)(e). That provides that the regulations may prescribe that ``any warranties or guarantees'' relating to the property should be included in the pack. The amendment would restrict this to ``warranties or guarantees'' that relate to the physical structure of the property. The intention here is to make sure that, where a new home is being sold, the NHBC or similar warranty is included in the pack. If it is not—for example, if the builder is not a member of the scheme—then a home condition report must be provided instead. This guarantee clearly concerns the physical structure of the property and therefore meets concerns expressed by the hon. Member for Eastbourne. In other cases, the pack may include guarantees that do not relate to the structure— for example, a guarantee for a new central heating boiler. However, such documents need be included only where they are available, and there will be no question of sanctions being brought against people who have mislaid them.

I apologise to the Committee for having taken such a long time to deal with these issues but, as hon. Members will accept, these are complex issues, right at the heart of this piece of legislation and I think it is right that all hon. Members should be aware of them.

I hope that the hon. Gentleman will now accept that his amendment should be withdrawn and that we can proceed to further matters.

Nigel Waterson (Conservative, Eastbourne)

These are matters we are going to return to in further debate and so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Further consideration adjourned.—[Mr. Robert Ainsworth.]

Adjourned accordingly at six minutes to Six o'clock till Tuesday 23 January at half-past Ten o'clock.